Email Address:
  
  Password:
  
  

Exhibit 10.1

 

$30,000,000.00

 

AMENDED AND RESTATED

REVOLVING LINE OF CREDIT AGREEMENT

DATED AS OF OCTOBER 3, 2011

 

Among

 

HAWAIIAN TELCOM COMMUNICATIONS, INC.

as Borrower,

 

FIRST HAWAIIAN BANK

as Agent,

 

And

 

FIRST HAWAIIAN BANK

AND THE OTHER LENDERS FROM TIME TO TIME PARTY HERETO

As Lenders

 



 

TABLE OF CONTENTS

 

 

 

Page

Section 1.

DEFINITIONS

1

1.1

Certain Defined Terms

1

1.2

Accounting Terms; GAAP

10

1.3

Other Definitional Provisions

10

Section 2.

AMOUNTS AND TERMS OF COMMITMENTS AND LOANS

10

2.1

Commitments; Making of Loans and Letters of Credit; the Register; Note

10

 

A.

Commitments and Loans

10

 

B.

Borrowing Mechanics

11

 

 

(i)

General Provisions Relating to Borrowing

11

 

C.

Disbursement of Funds

11

 

 

(i)

Funding of Loans

11

 

 

(ii)

Disbursement of Loan Proceeds by Agent

11

 

 

(iii)

Agent May Advance Funds; Failure of Lender to Fund Loan

12

 

 

(iv)

Failure of Lender to Fund Letters of Credit

12

 

 

(v)

Several Obligations of Lenders

12

 

 

(vi)

Defaulting Lenders

13

 

D.

The Register

14

 

E.

Reserved

15

 

F.

Letters of Credit; and Letter of Credit Fee

15

2.2

Interest on the Loans

16

 

A.

Rate of Interest

16

 

B.

Interest Periods

16

 

C.

Interest Payments; Payment Currency

17

 

D.

Conversion or Continuation

17

 

E.

Post-Maturity Interest

18

 

F.

Computation of Interest

18

2.3

Commissions and Fees

19

 

A.

Upfront Fee

19

 

B.

Agent’s Fee

19

 

C.

Unused Commitment Fee

19

 

D.

Letter of Credit Fees

19

 

E.

Breakage Fee

19

2.4

Prepayments and Reductions in Commitments; General Provisions Regarding Payments

19

 

A.

Prepayments and Reductions in Commitments

19

 

 

(i)

Voluntary Prepayments

19

 

 

(ii)

Voluntary Reductions of Commitments

19

 

 

(iii)

Application of Prepayments to Base Rate Loans and LIBOR Rate Loans

20

 

 

(iv)

Reductions of Commitments to Remove a Lender

20

 

B.

General Provisions Regarding Payments

20

 

 

(i)

Manner and Time of Payment

20

 

 

(ii)

Application of Payments to Principal and Interest

20

 

i



 

 

 

(iii)

Apportionment of Payments

20

 

 

(iv)

Payments on Business Days

21

 

 

(v)

Notation of Payment

21

2.5

Special Provisions Governing LIBOR Rate Loans

21

 

A.

Determination of Applicable Interest Rate

21

 

B.

Inability to Determine Applicable Interest Rate

21

 

C.

Illegality or Impracticability of LIBOR Rate Loans

21

 

D.

Compensation For Breakage or Non-Commencement of Interest Periods

22

 

E.

Booking of LIBOR Rate Loans

23

 

F.

Assumptions Concerning Funding of LIBOR Rate Loans

23

 

G.

LIBOR Rate Loans After Default

23

Section 3.

INCREASED COSTS, TAXES, CAPITAL ADEQUACY, AND MITIGATION

23

3.1

Increased Costs; Taxes; Capital Adequacy

23

 

A.

Compensation for Increased Costs and Taxes

23

 

B.

Withholding of Taxes

24

 

 

(i)

Payments to Be Free and Clear

24

 

 

(ii)

Grossing-up of Payments

24

 

 

(iii)

Evidence of Exemption from Withholding Tax

25

 

C.

Capital Adequacy Adjustment

26

3.2

Obligation of Lenders to Mitigate

27

3.3

Replacement of Lenders

27

Section 4.

CONDITIONS TO LOANS

27

4.1

Conditions to Closing

28

 

A.

Borrower’s Authorization

28

 

B.

Guarantors’ Authorizations

28

 

C.

Documentation and Proceedings

28

 

D.

The Note

28

 

E.

The Guaranty

28

 

F.

Reserved

28

 

G.

The Amendment of Mortgage and Amendment to Security Instruments

28

 

H.

Material Adverse Change

29

 

I.

Opinion of Counsel

29

 

J.

Title Insurance Policy

29

 

K.

Expenses

29

 

L.

No Event of Default

29

4.2

Conditions to Each Loan and Letter of Credit

29

 

A.

No Default

29

 

B.

Representations and Warranties

29

 

C.

Material Adverse Change

29

 

D.

Fees and Other Charges

29

Section 5.

BORROWER’S REPRESENTATIONS AND WARRANTIES

30

5.1

Corporate Status

30

5.2

Authority; No Conflict

30

 

ii



 

5.3

Enforceability

30

5.4

Compliance with Laws

30

5.5

Licenses; Tariffs

30

5.6

Financial Statements

31

5.7

Litigation

31

5.8

No Violation

31

5.9

Reserved

31

5.10

Consents

31

5.11

ERISA

31

5.12

Use of Proceeds

32

5.13

Hazardous Materials

32

5.14

Brokers, Finders and Agents

32

5.15

Amendment to Term Loan Documents

32

Section 6.

BORROWERS’ COVENANTS

33

6.1

Financial Statements

33

6.2.

Taxes

34

6.3

Insurance

34

6.4

Existence

35

6.5

Maintenance

35

6.6

Employee Pension Profit Plan

35

6.7

Financial Covenants

35

 

A.

Total Leverage Ratio

35

 

B.

Minimum Liquidity

36

 

C.

Non NGTV Capital Expenditures

36

 

D.

NGTV Capital Expenditures

36

6.8

Compliance with PUC Decision and Order

36

6.8

Negative Covenants

36

Section 7.

EVENTS OF DEFAULT

37

7.1

Representations

37

7.2

Principal and Interest

37

7.3

Defaults Under Term Loan Facility and Other Agreements

37

7.4

Bankruptcy

38

7.5

Other Covenants

38

7.6

Security Agreement

38

7.7

Mortgage

38

7.8

Guaranty

39

7.9

ERISA

39

7.10

Material Adverse Change

39

7.11

Judgments

39

7.12

PUC Decision and Order

40

8.

AGENT

40

8.1

Appointment

40

8.2

Powers; General Immunity

40

 

A.

Duties Specified

40

 

B.

No Responsibility for Certain Matters

40

 

C.

Exculpatory Provisions

40

 

iii



 

 

D.

Agent Entitled to Act as Lender

41

8.3

Representations and Warranties; No Responsibility For Appraisal of Credit-worthiness

41

8.4

Right to Indemnity

41

8.5

Successor Agent

42

Section 9.

MISCELLANEOUS

42

9.1

Assignments and Participations in Loans

42

 

A.

General

42

 

B.

Assignments

42

 

 

(i)

Amounts and Terms of Assignments

42

 

 

(ii)

Acceptance by Agent; Recordation in Register

43

 

C.

Participations

44

 

D.

Assignments to Federal Reserve Banks

44

 

E.

Information

44

9.2

Expenses

45

9.3

Indemnity

45

9.4

Set-Off

46

9.5

Ratable Sharing

46

9.6

Amendments and Waivers: Replacement of Lenders

47

 

A.

Amendments and Waivers

47

 

B.

Replacement of Lenders

47

9.7

Independence of Covenants

48

9.8

Notices

48

9.9

Survival of Representations, Warranties and Agreements

48

9.10

Failure or Indulgence Not Waiver; Remedies Cumulative

48

9.11

Marshalling; Payments Set Aside

48

9.12

Severability

49

9.13

Obligations Several; Independent Nature of Lenders’ Rights and Borrower’s Obligations

49

9.14

Headings

49

9.15

Applicable Law

49

9.16

Successors and Assigns

49

9.17

Consent to Jurisdiction and Service of Process

49

9.18

Waiver of Jury Trial

50

9.19.

Compliance with OFAC Restrictions

50

9.20

Confidentiality

51

9.21

Counterparts; Facsimile Signatures; Effectiveness

51

 

iv



 

AMENDED AND RESTATED

REVOLVING LINE OF CREDIT AGREEMENT

 

This AMENDED AND RESTATED REVOLVING LINE OF CREDIT AGREEMENT is dated and effective as of October 3, 2011 (the “Effective Date”) and entered into by and among HAWAIIAN TELCOM COMMUNICATIONS, INC., a Delaware corporation (the “Borrower”), FIRST HAWAIIAN BANK, a Hawaii corporation, as the agent for the Lenders referred to below (together with its successors and assigns in such capacity, “Agent”), FIRST HAWAIIAN BANK, a Hawaii corporation, and each of the other lenders from time to time party hereto (each individually referred to herein as a “Lender” and collectively as “Lenders”).

 

RECITALS

 

WHEREAS, the Borrower and First Hawaiian Bank are parties to that certain Revolving Credit Agreement dated as of October 28, 2010.

 

WHEREAS, the Borrower, the Agent and the Lenders wish to amend and restate in its entirety the Revolving Credit Agreement as more particularly set forth herein.

 

NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, Borrower, Agent and Lenders agree as follows:

 

Section 1.                                           DEFINITIONS

 

1.1                                  Certain Defined Terms .

 

The following terms used in this Agreement shall have the following meanings:

 

“Adjusted LIBOR Rate” means, for each Interest Period, the rate per annum obtained by (i) taking the offered rate of interest which appears on the Bloomberg Official BBAM LIBOR Rates page as of 11:00 a.m., London Time, on the applicable Interest Rate Determination Date, and (ii) dividing such rate by a percentage equal to 100% minus the LIBOR Reserve Percentage.

 

“Affected Lender” has the meaning assigned to that term in subsection 2.5C.

 

“Affiliate”, as applied to any Person, means any other Person directly or indirectly controlling, controlled by, or under common control with, that Person. For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlling”, “controlled by” and “under common control with”), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities or by contract or otherwise.

 

“Agent” has the meaning assigned to that term in the introduction to this Agreement.

 

“Agent’s Fee” has the meaning set forth in subsection 2.3B.

 

“Agent’s Funding and Payment Office” means the office of Agent located at 999 Bishop Street, Honolulu, Hawaii 96813, or such other location in the United States of America as may from time to time be designated in writing by Agent.

 

“Aggregate Amounts Due From Borrower” has the meaning assigned to that term in subsection 9.5.

 

1



 

“Agreement” means this Revolving Credit Agreement, as it may be amended, supplemented or otherwise modified from time to time.

 

“Applicable Base Rate Margin” means the applicable number of percentage points set forth in the Interest Rate Matrix.

 

“Applicable LIBOR Margin” means the applicable number of percentage points set forth in the Interest Rate Matrix.

 

“Assignment Agreement” means an Assignment Agreement in substantially the form of Exhibit “5” annexed hereto.

 

“Authorized Person” means an officer of the Borrower or such other person designated by the Borrower in writing.

 

“Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy”, as now and hereafter in effect, or any successor statute.

 

“Base Rate” means the Prime Rate, as determined by the Agent on a daily basis.

 

“Base Rate Loans” means Loans advanced to Borrower bearing interest at rates determined by reference to the Base Rate, as provided in subsection 2.2A.

 

“Borrower” has the meaning assigned to that term in the introduction to this Agreement.

 

“Business Day” means any day excluding Saturday and Sunday and also excluding (i) for all purposes other than as covered by clause (ii) below, any day which is a legal holiday under the laws of the State of Hawaii or is a day on which banking institutions located in the State of Hawaii are authorized or required by law or other governmental action to close, and (ii) with respect to all notices, determinations, findings and payments in connection with the Adjusted LIBOR Rate, any day which is not a Business Day pursuant to clause (i) or which is not a day for trading by and between banks in Dollar deposits in the applicable interbank Eurodollar market.

 

“Capital Lease”, as applied to any Person, means any lease of any property (whether real, personal or mixed) by that Person as lessee that, in conformity with accounting principles used by that Person and reasonably acceptable to Agent, is accounted for as a capital lease on the balance sheet of that Person.

 

“Certificate re. Non-Bank Status” means a certificate substantially in the form of Exhibit “6” annexed hereto, delivered by a Lender to Agent pursuant to subsection 3.1B(iii).

 

“Chapter 11 Cases” has the meaning set forth in the Term Loan Agreement.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Collateral” means the collateral described in the Term Loan Agreement.

 

2



 

“Commitment” or “Revolving Commitment” means the commitment of a Lender to make Loans to Borrower pursuant to subsection 2.1A, and “Commitments” means such commitments of all Lenders in the aggregate.

 

“Consolidated Funded Debt” means the sum (without duplication) of (i) the outstanding principal balance under this Revolving Credit Agreement, (ii) the outstanding principal balance under the Term Loan Facility, (iii) any other indebtedness of the Borrower for borrowed money to the extent of the principal amount outstanding thereunder, (iv) the principal component of all obligations of the Borrower evidenced by bonds, debentures or notes or otherwise evidencing extensions of credit, (v) the obligation of the Borrower for the payment of the deferred purchase price of property or services (except trade accounts in the ordinary course of business), regardless of when such liability or other obligation is due and payable, (vi) obligations of the Borrower for Capital Leases, (vii) guaranties, assumptions and endorsement by the Borrower of indebtedness for borrowed money of others, and (viii) indebtedness for borrowed money of others secured by any assets of Borrower provided that, if such indebtedness has not been assumed, only the lesser of the amount of such indebtedness and the value of such assets of the Borrower shall be included in “Consolidated Funded Debt”.

 

“Consolidated EBITDA” shall have the meaning specified in the Term Loan Agreement.

 

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled” have meanings correlative thereto.

 

“Default” shall mean any event, act or condition which with notice or lapse of time or both would, unless cured or waived, constitute an Event of Default.

 

“Default Rate” shall have the meaning set forth in Section 2.2E.

 

“Defaulting Lender’ shall have the meaning set forth in Section 2.1C(vi).

 

“Designated Entity” shall have the meaning set forth in the Term Loan Agreement.

 

“Designated Officer” shall mean Borrower’s Chief Financial Officer, the Controller of Borrower, or another officer of Borrower designated in writing to Agent by Borrower’s Chief Financial Officer.

 

“Dollars”, “$” and “U.S.$” means any lawful money of the United States of America.

 

“Effective Date” shall mean October 3, 2011, the effective date of this Agreement.

 

“Eligible Assignee” means, other than any Designated Entity, (A) (i) a commercial bank organized under the laws of the United States or any state thereof; (ii) a savings and loan association or savings bank organized under the laws of the United States or any state thereof; (iii) a commercial bank organized under the laws of any other country or a political subdivision thereof; provided that (x) such bank is acting through a branch or agency located in the United States or (y) such bank is organized under the laws of a country that is a member of the Organization for Economic Cooperation and Development or a political subdivision of such country; and (iv) any other entity which is an “accredited investor” (as defined in Regulation D under the Securities Act) which extends credit or buys loans as one of its businesses including,

 

3



 

but not limited to, insurance companies, mutual funds and lease financing companies, in each case (under clauses (i) through (iv) above) to which Agent and Borrower have consented (which consent may be withheld in Borrower’s sole discretion); and (B) subject to such transfer not resulting in additional costs being payable by Borrower under subsection 2.5 or 3.1, any Lender and any Affiliate of any Lender; provided that (x) neither Borrower nor any Affiliate of Borrower shall be an Eligible Assignee, and (y) by entry into this Agreement, the Borrower consents to American Savings Bank, a federal savings bank, as an Eligible Assignee.

 

“Environmental Laws” shall have the meaning set forth in the Term Loan Agreement.

 

“Environmental Liability” shall have the meaning set forth in the Term Loan Agreement.

 

“ERISA Affiliate” shall have the meaning set forth in the Term Loan Agreement.

 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974 as amended from time to time.  Section references to ERISA are to ERISA as in effect at the date of this Agreement and any subsequent provisions of ERISA, amendatory thereof, supplemental thereto or substituted therefor.

 

“ERISA Event” shall have the meaning set forth in the Term Loan Agreement.

 

“Event of Default” means each of the events set forth in Section 7.

 

“Excluded Taxes” means with respect to any Person (i) taxes imposed on or measured by its overall net income (however denominated), and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located, (b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction in which the Lender is located, (c) in the case of a Non-U.S. Lender, any withholding tax that is imposed on amounts payable to such Non-U.S. Lender at the time such Non-U.S. Lender becomes a party hereto (or designates a new lending office) or is attributable to such Non-U.S. Lender’s failure or inability (other than as a result of a Change in Law) to comply with Section 3.1B(iii), except to the extent that such Non-U.S. Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from the Borrower with respect to such withholding tax pursuant to Section 3.1B, and (d) any tax imposed under FATCA.

 

“FATCA” means Section 1471, 1472, 1473, and 1474 of the Code, or any Treasury Regulations promulgated thereunder or published administrative guidance implementing such Sections.

 

“Federal Funds Effective Rate” shall mean, for any period, a fluctuating interest rate equal for each during such period to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Agent from three Federal funds brokers of recognized standing selected by Agent.

 

4



 

“Funding Date” shall mean the date any Loan is funded, which must be a Business Day.

 

“GAAP” shall mean generally accepted accounting principles in the United States.

 

“Guaranty” shall mean that certain Guaranty dated October 28, 2010, executed by the Guarantors in favor of First Hawaiian Bank, as amended and restated in favor of the Agent and the Lenders, pursuant to which the Guarantors jointly and severally guaranteeing the due and punctual payment of the Note, and the observance and performance of the Borrower’s obligations under the Loan Documents.

 

“Guarantors” shall mean, individually and collectively, (i) Holdco, (ii) Hawaiian Telcom, Inc., Hawaiian Telcom Services Company, Inc., and (iii) each other Person that subsequently becomes party to the Guaranty as a Guarantor on the terms provided for therein.

 

“Hazardous Materials” shall have the meaning set forth in the Term Loan Agreement.

 

“Holdco” means Hawaiian Telcom Holdco, Inc., a Delaware corporation.

 

“lndemnitee” has the meaning assigned to that term in subsection 9.3.

 

“Insolvency Laws” means the Bankruptcy Code, or any other applicable bankruptcy, insolvency or similar law now or hereafter in effect in the United States of America or any state thereof.

 

“Inter-creditor and Collateral Sharing Agreement” shall mean that certain Inter-Creditor and Collateral Sharing Agreement; Cross-Default Agreement, made effective as of October 28, 2010, by and among the Borrower, the Guarantors, Wilmington Trust FSB, as “Term Loan Facility Collateral Agent”, and First Hawaiian Bank, as “Revolving Facility Lender” and “Revolving Facility Collateral Agent”, respecting the sharing of the Collateral and the Mortgaged Property by the Revolving Facility Collateral Agent (for the benefit of the Revolving Facility) and the Term Loan Facility Collateral Agent (for the benefit of the Term Loan Facility), and the repayment of the Commitment from the proceeds of the Collateral and the Mortgaged Property prior to the repayment of the Term Loan Facility, as such instrument shall be amended, restated, supplemented or otherwise modified from time to time, including in connection with the execution of this Amended and Restated Revolving Line of Credit Agreement.

 

“Interest Payment Date” means (i) with respect to any Base Rate Loan, the Monthly Payment Date, commencing on the last day of the month in which the Loan is made; and (ii) with respect to any LIBOR Rate Loan, the last day of each Interest Period applicable to such Loan; provided that, if the Interest Period for such LIBOR Rate Loan is six (6) months, then interest shall be payable after 90 days, and again at the end of the Interest Period for such LIBOR Rate Loan, and (iii) in respect of each Loan, on any prepayment or at maturity (whether by acceleration or otherwise), and, after maturity, on demand.

 

“Interest Period” has the meaning assigned to that term in subsection 2.2B.

 

“Interest Rate Determination Date” means, with respect to any Interest Period, the second Business Day prior to the first day of such Interest Period.

 

“Interest Rate Matrix” means the following table, which sets forth the Applicable Base Rate Margin, the Applicable LIBOR Margin and the Unused Commitment Fee Percentage

 

5



 

based on the Consolidated Funded Debt to Consolidated EBITDA ratio then in effect, which shall be used to calculate the interest rate on an Interest Rate Determination Date; provided however, that during any Interest Period, the Agent shall adjust the Applicable Base Rate Margin, the Applicable LIBOR Martin and the Unused Commitment Fee Percentage to reflect the Consolidated Funded Debt to Consolidated EBITDA ratio last reported by Borrower, and such adjustment shall be effective on the first Business Day following delivery of such report:

 

Consolidated Funded
Debt to Consolidated
EBITDA

 

Applicable
Base Rate
Margin

 

Applicable
LIBOR Rate
Margin

 

Unused
Commitment Fee
Percentage

 

 

 

 

 

 

 

 

 

Less than or equal to 2.00

 

3.00

%

4.00

%

0.375

%

2.01 to 2.50

 

3.375

%

4.375

%

0.500

%

2.51 to 3.00

 

3.875

%

4.875

%

0.600

%

3.01 to 3.50

 

4.500

%

5.500

%

0.750

%

Greater than 3.50 (Technical Default)

 

6.00

%

Not Applicable

 

 

 

 

“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended to the date hereof and from time to time hereafter.

 

“Lender” and “Lenders” means the persons identified as “Lenders” and listed on the signature pages of this Agreement, together with their successors and permitted assigns pursuant to subsection 9.1.

 

“Letter of Credit” shall mean a commercial or standby letter of credit, issued by the Lender at the request of, and for the account of, the Borrower, under the Commitment, as provided in Section 2.1 F of this Agreement.

 

“Letter of Credit Fee” shall mean the fee, payable by the Borrower to the Lender, as provided in Section 2.1 F of this Agreement, in respect of each Letter of Credit issued by the Lender for the account of the Borrower hereunder.

 

“LIBOR Rate Loans” means Loans advanced to Borrower and bearing interest at rates determined by reference to the Adjusted LIBOR Rate as provided in subsection 2.2A.

 

“LIBOR Reserve Percentage” means shall mean, with respect to each LIBOR Rate Loan, the then maximum effective rates per annum (expressed as a decimal), as determined solely by the Agent (which determination shall be final, conclusive and binding on all of the parties hereto, absent manifest error), of the maximum aggregate reserve requirements (whether or not incurred and including all basic, emergency, supplemental, marginal and other reserves and taking into account any scheduled changes in reserve requirements) specified under regulations to which the Lenders are subject, issued from time to time by the Board of Governors of the Federal Reserve System on $1,000,000 “Eurocurrency Liabilities” of the Lenders, having a maturity equal to the term of the applicable LIBOR Interest Period.

 

“Lien” shall have the meaning set forth in the Term Loan Agreement.

 

“Liquidity” shall have the meaning set forth in the Term Loan Agreement.

 

“Loan Documents” means this Amended and Restated Revolving Credit Agreement, the Note, the Guaranty, the Mortgage, the Security Agreements and the Inter-creditor Agreement and Collateral Sharing Agreement, as the same shall be amended or amended and restated, and any other agreements or instruments evidencing and/or securing the Loans.

 

6



 

“Loan Parties” means the Borrower, each Guarantor, and the other Subsidiaries of the Borrower executing one or more of the Loan Documents.

 

“Loans” means Loans made by Lenders to Borrower pursuant to subsections 2.1A.

 

“Material Adverse Effect” means (i) a material adverse effect upon the business, operations, properties, assets or financial condition of Borrower or any Guarantor, taken as a whole, or (ii) the material impairment of the ability of Borrower and the Guarantors, taken as a whole, to perform the Obligations in the aggregate.

 

“Monthly Payment Date” means the last Business Day of each calendar month.

 

“Mortgage” shall that certain Real Property Mortgage and Financing Statement dated November 1, 2010 recorded in the Office of the Assistant Registrar of the Land Court of the State of Hawaii as Document No. 4015285 and recorded in the Bureau of Conveyances of the State of Hawaii as Document No. 2010-165556, as amended by that certain Amendment to Real Property Mortgage and Financing Statement executed concurrently herewith in substantially the form attached as Exhibit “7” , pursuant to which Hawaiian Telcom, Inc. grants to the Agent, for the ratable benefit of the Lenders, a first priority lien on the Mortgaged Property.

 

“Mortgaged Property” shall mean the mortgaged property defined in the Mortgage.  The Borrower shall cause the mortgagor under the Mortgage to supplement the Mortgage from time to time, as additional easements, licenses and governmental authorizations, each with a purchase price in excess of $250,000.00 are acquired by the mortgagor; provided that at no time shall such easements, licenses and governmental authorizations with an aggregate purchase price in excess of $2,000,000.00 be excluded from the Mortgaged Property.

 

“NGTV Capital Expenditures” shall have the meaning specified in the Term Loan Agreement.

 

“NGTV Initiative” shall have the meaning specified in the Term Loan Agreement.

 

“Non-NGTV Capital Expenditures” shall have the meaning specified in the Term Loan Agreement.

 

“Note” means that certain Revolving Note dated October 28, 2010 in the aggregate principal amount of $30,000,000.00, as amended and restated by that certain Amended and Restated Revolving Note executed concurrently herewith, as the same may be amended, supplemented or otherwise modified from time to time.

 

“Notice of Borrowing” means a notice substantially in the form of Exhibit “1” annexed hereto executed by a Designated Officer and delivered by Borrower to Agent pursuant to subsection 2.1B with respect to a proposed borrowing.

 

“Notice of Conversion” means a notice substantially in the form of Exhibit “2” annexed hereto, executed by a Designated Officer and delivered by Borrower to Agent pursuant to subsection 2.2D with respect to a proposed conversion of the applicable basis for determining the interest rate with respect to the Loans specified therein.

 

“Obligations” means all financial obligations of every nature of Borrower from time to time owed to Agent, Lenders, or any of them under the Loan Documents, whether for principal, interest, fees, expenses, indemnification or otherwise.

 

7



 

“”PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant to Section 4002 of ERISA, or any successor thereto.

 

“Person” means and includes natural persons, corporations, limited partnerships, general partnerships, limited liability companies, limited liability partnerships, joint stock companies, joint ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts or other organizations, whether or not legal entities, and governments and agencies and political subdivisions thereof.

 

“Plan” shall mean at any time an “employee pension benefit plan” (other than a “multiemployer plan” (within the meaning of Section 3(37) of ERISA)) which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code or Section 302 of ERISA and in respect of which the Borrower or any ERISA Affiliate (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be an “employer”, as defined in Section 3(5) of ERISA) has any material liability.

 

“Prime Rate” means the lending rate of interest per annum announced publicly by Agent from time to time as its “Prime Interest Rate”, which rate shall not necessarily be the best or lowest rate charged by Agent from time to time. Such prime interest rate is a reference rate and does not necessarily represent the lowest or best rate actually charged to any customer. Agent or any other Lender may make commercial loans or other loans to its other customers at rates of interest at, above or below such prime interest rate.

 

“Principal Balance” means the aggregate principal amount of all outstanding Loans.

 

“Pro Rata Share” means, with respect to any Lender, the Commitment of such Lender as a percentage of the sum of the Commitments of all Lenders.

 

“Projections” shall have the meaning specified in the Term Loan Agreement.

 

“PUC Decision and Order” shall mean that certain Decision and Order issued by the Public Utilities Commission of the State of Hawaii, filed in Docket No. 2010-0001, on September 22, 2010, relating to the Application by Hawaiian Telcom, Inc., and Hawaiian Telcom Services Company, Inc., for an Order Approving the Joint Chapter 11 Plan of Reorganization of Hawaiian Telcom Communications, Inc., and its Debtor Affiliates, Including Certain Security Arrangements, as modified or clarified by that certain Decision and Order filed in Docket No. 2011-0124 on June 17, 2011 and Order Approving Parties’ Joint Motion, filed August 31, 2011, on September 2, 2011.

 

“Quarter” means each of the following three-month periods in each year: January 1 to and including March 31; April 1 to and including June 30; July 1 to and including September 30; and October 1 to and including December 31.

 

“Register” has the meaning assigned to that term in subsection 2.1D.

 

“Regulation D” means Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time.

 

“Requisite Lenders” means Lenders having or holding 51% or more of the aggregate Commitments (or if the Commitments have terminated, the Lenders having or holding at least 51% of the outstanding Principal Balance).

 

“Security Agreements” mean collectively that certain (a) Security Agreement dated October 28, 2010, by and among the Borrower and the Guarantors, as Debtors, and First Hawaiian Bank, as Lender, (b) Trademark Security Agreement dated as of January 3, 2011, by

 

8



 

and between Hawaiian Telcom, Inc. and the Borrower, as Grantors and First Hawaiian Bank, as Lender, and (c) Copyright Security Agreement dated January 3, 2011, by and between Hawaiian Telcom Services Company, Inc., as Grantor and First Hawaiian Bank, as Lender, as each of the foregoing instruments may be amended, restated, waived, supplemented or otherwise modified from time to time, including by that certain Amendment to Security Agreement executed concurrently herewith in substantially the form attached as Exhibit “8” ,

 

“Securities Act” means the Securities Act of 1933, as amended from time to time, and any successor statute.

 

“Subsidiary” means, with respect to any Person, any corporation, partnership, association, joint venture, limited liability company, limited liability partnership, or other business entity of which more than 50% of the total voting power of shares of capital stock or other ownership or membership interests, entitled (without regard to the occurrence of any contingency) to vote in the election of the Person or Persons (whether directors, managers, trustees or other Persons performing similar functions) having the power to direct or cause the direction of the management and policies thereof, is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof.

 

“Tax” or “Taxes” means any present or future governmental tax, levy, impost, duty, charge, fee, deduction or withholding of any nature and whatever called, by whomsoever, on whomsoever and wherever imposed, levied, collected, withheld or assessed.

 

“Term Loan Facility” shall mean the term loan facility, in the aggregate amount of $300,000,000.00, made by the Term Loan Lenders to the Borrower pursuant to the Term Loan Agreement.

 

“Term Loan Agreement” shall mean that certain Senior Secured Loan Agreement dated October 28, 2010, executed by and between the Borrower, Wilmington Trust FSB, as Administrative Agent and Collateral Agent, and the various lenders from time to time parties thereto, as the same may be amended, restated, supplemented, waived or otherwise modified from time to time in accordance with its terms; provided, however, that whenever reference is made in this Agreement to (a) any terms defined in the Term Loan Agreement or (b) any covenants contained in the Term Loan Agreement, such references shall mean the terms defined in, or the covenants contained in, the Senior Secured Loan Agreement dated October 28, 2010, described above, without amendment other than amendments to which the Requisite Lenders have consented in writing.

 

“Term Loan Lenders” shall mean the lenders made parties to the Term Loan Agreement from time to time.

 

“Termination Date” means October 3, 2015.

 

“Total Indebtedness” shall have the meaning specified in the Term Loan Agreement.

 

“Total Leverage Ratio” shall mean, on any date, the ratio obtained by dividing (a) Total Indebtedness by (b) Consolidated EBITDA, for the period of four (4) consecutive Quarters of the Borrower most recently ended on or prior to such date.

 

“Upfront Fee” shall mean the fee, in the amount of $150,000.00, payable by the Borrower to the Lenders on the Effective Date, as provided in Section 2.3 of this Agreement.

 

“UCC-1 Financing Statements” shall mean each of the UCC-1 Financing Statements recorded on or about October 28, 2010 in the Bureau of Conveyances of the State of Hawaii and filed in the office of the Secretary of State of the State of Delaware, each as amended and/or continued, covering the items of personal property described in the Security Agreement.

 

9



 

“Unused Commitment Fee” means a fee, payable quarterly in arrears, as provided in subsection 2.3B, equal to the applicable Unused Commitment Fee Percentage, multiplied by the difference between (a) the total Commitments for such prior quarterly period, and (b) the Principal Balance of all Loans made during such prior quarterly period as determined on the last day of the applicable quarter, computed on an actual daily balance basis, in arrears.

 

“Unused Commitment Fee Percentage ” means the applicable number of percentage points set forth in the Interest Rate Matrix.

 

1.2                                  Accounting Terms; GAAP .

 

Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that, if the Borrower notifies the Lender that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision, regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith.

 

1.3                                  Other Definitional Provisions .

 

References to “Sections” and “subsections” shall be to Sections and subsections, respectively, of this Agreement unless otherwise specifically provided. Any of the terms defined in subsection 1.1 may, unless the context otherwise requires, be used in the singular or the plural, depending on the reference.

 

Section 2.                                           AMOUNTS AND TERMS OF COMMITMENTS AND LOANS

 

2.1                                  Commitments; Making of Loans and Letters of Credit; the Register; Note .

 

A.                                    Commitments and Loans . Subject to the terms and conditions of this Agreement and in reliance upon the representations and warranties of Borrower set forth in this Agreement and in the Loan Documents, each Lender severally agrees to make Loans to Borrower and to issue Letters of Credit for the account of the Borrower from time to time during the period from the Effective Date to but excluding the Termination Date, in an aggregate amount outstanding at any time not exceeding its Pro Rata Share of the aggregate amount of the Commitments, to be used for the purposes identified in Section 5.12.  The original amount of each Lender’s Commitment is set forth opposite its name on Schedule “1” annexed hereto, and the aggregate original amount of the Commitments is $30,000,000.00; provided that the individual Commitment of each Lender shall be adjusted to give effect to any assignments of the Commitments pursuant to subsection 9.1B; and provided , further that the amount of the Commitments shall be reduced from time to time by the amount of any reductions thereto made pursuant to subsection 2.4A(ii). Each Lender’s Commitment shall expire on the Termination Date, and all Loans and all other amounts owed hereunder with respect to the Loans and with respect to the Commitment of such Lender, shall be paid in full no later than the Termination Date. Subject to the provisions of Section 7, amounts borrowed under this subsection 2.1A may be repaid and re-borrowed to but excluding the Termination Date.

 

10



 

Anything contained in this Agreement to the contrary notwithstanding, the Loans and the Commitments shall be subject to the limitation that in no event shall the Principal Balance at any time exceed the total Commitments then in effect.  All Loans shall be denominated and funded in Dollars.

 

B.                                      Borrowing Mechanics .

 

Loans.   Loans made on any Funding Date shall be in an aggregate minimum amount of $250,000.00 and integral multiples of $100,000.00. Whenever Borrower desires that Lenders make Loans, Borrower shall deliver to Agent a Notice of Borrowing, no later than 10:00 a.m.(Hawaii time) at least two Business Days in advance of the proposed Funding Date in the case of a LIBOR Rate Loan, and at least one Business Day in advance of the proposed Funding Date in the case of a Base Rate Loan. LIBOR Rate Loans may not be borrowed on the Effective Date unless the Borrower shall have entered into a Special Funding Procedures Letter Agreement with Agent and Lenders on or prior to the date that is two Business Days before the Effective Date.  Loans may be continued as or converted into Base Rate Loans and LIBOR Rate Loans in the manner provided in subsection 2.2D. In lieu of delivering the above-described Notice of Borrowing, Borrower may give Agent telephonic notice by the required time of any proposed borrowing under this subsection 2.1B, provided, that such notice shall be promptly confirmed in writing by delivery of a Notice of Borrowing to Agent on or before the applicable Funding Date.

 

(i)                                      General Provisions Relating to Borrowing .  Neither Agent nor any Lender shall incur any liability to Borrower for acting in accordance with this subsection 2.1B, or in accordance with instructions given pursuant to this subsection 2.1B, and upon funding of Loans by Lenders in accordance with this Agreement, Borrower shall have effected the Loans hereunder.

 

Borrower shall notify Agent prior to the funding of any Loan in the event that any of the matters to which Borrower is required to certify in the applicable Notice of Borrowing is no longer true and correct as of the applicable Funding Date, and the acceptance by Borrower of the proceeds of any Loans shall constitute a re-certification by Borrower, as of the applicable Funding Date, as to the matters to which Borrower is required to certify in the applicable Notice of Borrowing.

 

Except as otherwise provided in subsections 2.5B, 2.5C and 2.5G, a Notice of Borrowing for a LIBOR Rate Loan shall be irrevocable on and after the related Interest Rate Determination Date, and Borrower shall be bound to make a borrowing in accordance therewith.

 

C.                                      Disbursement of Funds .

 

(i)                                      Funding of Loans .  All Loans under this Agreement shall be made by the Lenders simultaneously and proportionately to their respective Pro Rata Shares. Promptly after receipt by Agent of a Notice of Borrowing, Agent shall notify each Lender of the proposed borrowing. Each Lender shall make the amount of its Loan available to Agent, in Dollars and same day funds, at the Agent’s Funding and Payment Office not later than 10:00 a.m., (Hawaii time) on the applicable Funding Date.

 

(ii)                                   Disbursement of Loan Proceeds by Agent .  Upon satisfaction or waiver of the conditions precedent specified in subsections 4.1 (in the case of Loans made on the Effective Date) and 4.2 (in the case of all Loans), Agent shall make the proceeds of such Loans available to Borrower no later than 1:00 p.m. (Hawaii time) on the applicable Funding Date by

 

11



 

causing an amount of same day funds in Dollars, equal to the proceeds of all such Loans received by Agent from Lenders, to be credited to an account of Borrower at the Agent’s Funding and Payment Office or to be wired to such account with another financial institution as Borrower may specify in writing to Agent, as applicable.

 

(iii)                                Agent May Advance Funds; Failure of Lender to Fund Loan .  Unless Agent shall have received notice from a Lender prior to a requested Funding Date that such Lender does not intend to make available to Agent the Lender’s Pro Rata Share of the requested Loan, the Agent may assume that such Lender has made or will make its Pro Rata Share of the requested Loan available to Agent on the requested Funding Date.  The Agent may in its sole discretion and in reliance upon such assumption make available to Borrower on the Funding Date a corresponding amount.  If a Lender does not make available to the Agent the full amount of such Lender’s Pro Rata Share of any Loan required to be funded on the requested Funding Date, the Agent may, but shall not be obligated to, advance such corresponding amount, and accrue interest thereon for Agent’s own account at the Federal Funds Rate for each day from the date such principal amount is made available to the Borrower until the date such principal amount (together with accrued interest) is repaid by such Lender or Borrower, as provided below, to the Agent. Notwithstanding any provision of this Agreement requiring the pro rata repayment of amounts owing to Lenders hereunder, if Agent has made an advance in respect of another Lender’s Commitment in accordance with this subsection 2.1C(iii) and such Lender does not reimburse the amount of such advance with interest at the Federal Funds Rate immediately upon the Agent’s demand therefor, all payments in respect of principal received by Agent from Borrower shall be paid to Agent to reduce such amounts owing to Agent by such Lender until Agent has been reimbursed in full; provided that if the making of such advance by Agent causes the aggregate principal balance of Loans extended by Agent hereunder, in either its capacity as Agent or as a Lender, to exceed Agent’s Commitment as a Lender, Agent shall notify Borrower and Borrower shall, within two (2) days after such notice pay the principal amount of such excess to Agent with interest thereon at the applicable interest rate otherwise payable by Borrower hereunder.

 

(iv)                               Failure of Lender to Fund Letters of Credit .  Unless Agent shall have received notice from a Lender prior to the date payment is required on a Letter of Credit issued under this Agreement, that such Lender does not intend to make available to Agent the Lender’s Pro Rata Share of the amount of such Letter of Credit, the Agent may assume that such Lender has made or will make its Pro Rata Share of the Letter of Credit available to Agent on the date the Letter of Credit is presented to Agent for payment.  The Agent shall, in reliance upon such assumption, make payment on such Letter of Credit.  If a Lender does not make available to the Agent the full amount of such Lender’s Pro Rata Share of any Letter of Credit when payment is required from Agent as the issuing bank, the Agent may, but shall not be obligated to, advance such corresponding amount and accrue interest thereon for Agent’s own account at the Federal Funds Effective Rate for each day from the date such principal amount is made available to the Borrower until the date such principal amount (together with accrued interest) is repaid by such Lender or Borrower, as provided below, to the Agent.  Notwithstanding any provision of this Agreement requiring the pro rata repayment of amounts owing to Lenders hereunder, if Agent has made payment on a Letter of Credit in respect of another Lender’s Commitment in accordance with this subsection 2.1C(iv) and such Lender does not reimburse the amount of such payment with interest at the Federal Funds Rate immediately upon the Agent’s demand therefor, all principal payments made by Borrower to Agent shall be paid to Agent to reduce such amounts owing to Agent by such Lender until Agent has been reimbursed in full; provided that if the payment of a Letter of Credit by Agent causes the aggregate principal balance of Letters of Credit extended by Agent hereunder, in either its capacity as Agent or as a Lender, to exceed Agent’s Commitment as a Lender, Agent shall notify Borrower and Borrower shall, within two (2) days after such notice pay the principal amount of such excess to Agent with interest thereon at the applicable interest rate otherwise payable by Borrower hereunder.

 

(v)                                  Several Obligations of Lenders .  No Lender shall be responsible for any default by any other Lender in that other Lender’s obligation to make a Loan requested hereunder nor shall the Commitment of any Lender be increased or decreased as a result of a

 

12



 

default by any other Lender in that other Lender’s obligation to fund its Pro Rata Share of a Loan or Letter of Credit requested hereunder. The failure of any Lender to fund its Pro Rata Share of any Loan or Letter of Credit shall not relieve any other Lender of its obligation to fulfill its Commitment to fund its Pro Rata Share as and when required under this Agreement, but no Lender shall be responsible for any such failure of any other Lender.  The Borrower shall be entitled to exercise any rights and remedies it may have at law or in equity against any Lender as a result of any default by such Lender under this Agreement.

 

(vi)                               Defaulting Lenders .

 

(a)                                   In the event that, at any time (other than during a period when an Event of Default has occurred and is continuing) a Lender fails or refuses to fund its Pro Rata Share as required under this Agreement, such Lender, after two (2) Business Days from the date it failed to fund its Pro Rata Share, shall be deemed to be a “ Defaulting Lender ”. Until such time as a Defaulting Lender has funded its Pro Rata Share (which late funding shall not absolve such Defaulting Lender from any liability it may have), the Defaulting Lender shall not have the right to vote regarding or to approve any issue on which voting or approval is required or advisable under this Agreement or any other Loan Document, and the amount of the Pro Rata Share of such Lender shall not be counted as outstanding for purposes of determining any matters or actions as to which such Lender would otherwise be entitled to vote or to direct the Agent to act on its behalf under this Agreement or the other Loan Documents. In addition, Agent shall not transfer to any Defaulting Lender, any payments (including principal, interest, Unused Commitment Fee, Letter of Credit Fees and other fees) made by or for Borrower to Agent or otherwise received by Agent, for the Defaulting Lender’s benefit, nor shall a Defaulting Lender be entitled to any sharing in such payments. All of such payments shall instead be payable to and retained by Agent and applied to repay principal, interest, fees and related obligations in respect of advances made by Agent under Section 2.1 C (iii) and (iv)   above related to such Defaulting Lender’s Pro Rata Share. Agent shall hold and relend to Borrower the amount of any such payments paid to or retained by Agent.

 

(b)                                  Without prejudice to the survival of any other remedies against a Defaulting Lender, if a Defaulting Lender fails to make available to the Agent the full amount of such Lender’s Pro Rata Share of any Loan or Letter of Credit required to be made hereunder within five (5) Business Days after the date on which such Defaulting Lender was required to fund, the Borrower or the Agent may require that such Lender transfer, and if so required, the Defaulting Lender shall transfer, all of its right, title and interest under this Agreement and each other Loan Document to Agent or to a Eligible Assignee identified by the Borrower or by the Agent (with the consent of the Borrower), subject to the following:

 

(i)                                      such proposed Eligible Assignee shall agree to assume all of the obligations of the transferor Lender under the Loan Documents, for consideration equal to the outstanding principal of such transferor Lender’s Pro Rata Share of Loans or Letters of Credit, together with interest thereon to the date of such transfer;

 

(ii)                                   satisfactory arrangements shall be made for payment to such transferor Lender of all other amounts payable hereunder, provided that, in the event that any transfer is made pursuant to this subparagraph 2.1C(vi), the Agent shall be entitled to an amount equal to $3,000.00 payable by the transferor Lender, which shall be deducted from the consideration payable to the transferor Lender by the Eligible Assignee and shall be paid by the Eligible Assignee to Agent; and

 

(iii)                                the transferor Lender agrees to pay the Eligible Assignee the Eligible Assignee’s Pro Rata Share of fees which the transferor Lender has received related to this Agreement, pro rated through the date of transfer.  This Pro Rata Share of the fees may be deducted from the consideration payable to the transferor Lender by the Eligible Assignee.

 

13



 

(iv)                               Other than as expressly set forth herein, the rights and obligations of a Defaulting Lender (including the obligation to indemnify Agent) and the other parties hereto shall remain unchanged. Nothing in this subsection shall be deemed to release any Defaulting Lender from its obligations under this Agreement and the Loan Documents, shall alter such obligations, shall operate as a waiver of any default by such Defaulting Lender hereunder, or shall prejudice any rights which Borrower, Agent or any other Lender may have against any Defaulting Lender as a result of any default by such Defaulting Lender hereunder.

 

(c)                                   In the event a Defaulting Lender cures to the satisfaction of Agent and to the reasonable satisfaction of Borrower all outstanding breaches which caused such Lender to become a Defaulting Lender, such Defaulting Lender shall no longer be a Defaulting Lender and shall be treated as a Lender under this Agreement.

 

D.                                     The Register .

 

(i)                                      Agent shall maintain, at its address referred to in subsection 9.8, a register for the recordation of the names and addresses of Lenders, and the Commitment and Loans of each Lender, from time to time (the “ Register ”). The Register shall be available for inspection by Borrower or any Lender at any reasonable time and from time to time upon reasonable prior notice.

 

(ii)                                   Agent shall record in the Register each repayment or prepayment in respect of the principal amount of the Loans of each Lender. Any such recordation shall be conclusive and binding on Borrower and each Lender, absent manifest or demonstrable error; provided that failure to make any such recordation, or any error in such recordation, shall not affect Borrower’s Obligations in respect of the applicable Loans.

 

(iii)                                Each Lender shall record on its internal records the amount of each Loan made by it and each payment in respect thereof. Any such recordation shall be conclusive and binding on Borrower and such Lender, absent manifest or demonstrable error; provided that failure to make any such recordation, or any error in such recordation, shall not affect Borrower’s Obligations in respect of the applicable Loans; and provided, further that in the event of any inconsistency between the Register and any Lender’s records, the recordations in the Register shall govern.

 

(iv)                               Borrower, Agent and Lenders shall deem and treat the Persons listed as Lenders in the Register as the holders and owners of the corresponding Commitments and Loans listed therein for all purposes hereof, and no assignment or transfer of any such Commitment or Loan shall be effective, in either case, unless and until an Assignment Agreement effecting the assignment or transfer thereof shall have been accepted by Agent and recorded in the Register as provided in subsection 9.1B(ii). Prior to such recordation, all amounts owed with respect to the applicable Commitment or Loan shall be owed to the Lender listed in the Register as the owner thereof, and any request, authority or consent of any Person who, at the time of making such request or giving such authority or consent, is listed in the Register as a Lender shall be conclusive and binding on any subsequent holder, assignee or transferee of the Commitment or Loan.

 

14



 

(v)                                  Borrower hereby designates Agent to serve as Borrower’s agent solely for purposes of maintaining the Register as provided in this subsection 2.1D, and Borrower hereby agrees that, to the extent Agent serves in such capacity, Agent and its officers, directors, employees, agents and affiliates shall constitute Indemnitees for all purposes under subsection 9.3. This subsection 2D shall be construed so that the Loans are at all times maintained in “registered form” within the meaning of Sections 163(f), 871(h)(2), and 881(c)(2) of the Code.

 

E.                                       Reserved .

 

F.                                       Letters of Credit; and Letter of Credit Fee .

 

(i)                                      An application for each desired Letter of Credit under this Agreement shall be made by the Borrower to the Lender on an Application and Agreement for Standby Letter of Credit in the form attached hereto as Exhibit “4” and made a part hereof, or an Application and Agreement for Commercial Letter of Credit in the form attached hereto as Exhibit “5” and made a part hereof, delivered to the Lender no later than five (5) Business Days prior to the date the Letter of Credit is desired; provided, that in the event any provision of either such Application is inconsistent with the terms of this Agreement, or any of the other Loan Documents, the terms of this Agreement, or the applicable Loan Document (as the case may be) shall control. The expiry date of any Letter of Credit shall be no later than one (1) year after the Termination Date; provided, however, that if the expiry date for any Letter of Credit is a date after the Termination Date, the Borrower shall, within thirty (30) days prior to the Termination Date, deposit with the Lender cash or cash equivalents to fully secure the repayment of any such Letter of Credit upon negotiation thereof. The minimum amount of any Letter of Credit shall be $100,000.00. The aggregate amount of all Letters of Credit issued and outstanding at any one time under the Revolving Commitment may not exceed Five Million Dollars ($5,000,000.00), and the amount of the Revolving Commitment available to the Borrower for Loans shall be reduced by the aggregate amount of all Letters of Credit issued and outstanding at any one time. In addition to the Letter of Credit Fee payable by the Borrower as described in Section 2.1 F(ii) below, the Borrower shall pay to the Lender, for the Lender’s own account, the Lender’s standard issuance, drawing, amendment and negotiation fees. Upon the negotiation of any Letter of Credit and the payment by the Lender of the amount drawn thereunder, the amount so drawn shall become and be deemed part of the Principal Balance, unless and until such amount is reimbursed by Borrower. Upon the occurrence of an Event of Default hereunder, the full amount of all outstanding Letters of Credit shall become and be part of the Principal Balance, as provided in Section 7 of this Agreement. The Letters of Credit shall be issued for general corporate purposes, consistent with the Borrower’s business operations, and for such other purposes as the Lender may approve.

 

(ii)                                   The Letter of Credit Fee for each Letter of Credit issued by the Lender for the account of the Borrower hereunder shall be calculated based on the Applicable LIBOR Margin set forth in the Interest Rate Matrix; provided, however, that if the Borrower chooses to fully collateralize a Letter of Credit by depositing with the Lender, upon the issuance thereof, cash in the amount of 100% of the notional amount of such Letter of Credit, the Letter of Credit Fee for such fully collateralized Letter of Credit shall be one and one-half percent (1.50%) of the notional amount of such Letter of Credit. The Borrower shall pay to the Agent, quarterly in arrears, on the 90 th , 180 th , 270 th  and 360 th  days after issuance of each outstanding Letter of Credit, one-fourth of the Letter of Credit Fee for such Letter of Credit.

 

15



 

2.2                                  Interest on the Loans.

 

A.                                    Rate of Interest .

 

(i)                                      Loans shall bear interest on the unpaid principal amount thereof from the date made through maturity (whether by acceleration or otherwise) at a rate determined by reference to the Base Rate or the Adjusted LIBOR Rate. The applicable basis for determining the rate of interest on Loans shall be selected by Borrower at the time Borrower submits a Notice of Borrowing pursuant to subsection 2.1B of this Agreement, or a Notice of Conversion is given pursuant subsection 2.2D. If on any date a Loan is outstanding with respect to which notice has not been delivered to Agent in accordance with the terms of this Agreement specifying the basis for determining the rate of interest, then that Loan shall continue to bear interest on the same basis for determining the rate of interest that was in effect during the prior period for that particular Loan; provided that if such period would extend beyond the Termination Date, such Loan shall nevertheless mature on the Termination Date, and shall also be subject to the provisions of subsection 2.5D.

 

(ii)                                   Subject to the provisions of subsections 2.2E and 3.1, Loans shall bear interest as follows:

 

(a)                                   Whenever the Borrower selects or is deemed to have selected a Base Rate Loan, interest shall accrue on the unpaid principal balance of the Loan, at a fluctuating rate per annum equal to the Base Rate, plus the Applicable Base Rate Margin.  The Applicable Base Rate Margin shall be calculated by Agent in reference to the Consolidated Funded Debt to Consolidated EBITDA ratio in effect on the Interest Rate Determination Date; provided however that during any Interest Period, the Applicable Base Rate Margin shall be adjusted to reflect the Consolidated Funded Debt to Consolidated EBITDA ratio last reported by Borrower, and such adjustment shall be effective on the first Business Day following delivery of such report.

 

(b)                                  Whenever the Borrower selects a LIBOR Rate Loan, interest shall accrue on the unpaid principal balance of the Loan, for the Interest Period selected by Borrower in the applicable Notice of Borrowing or Notice of Conversion, at a rate per annum equal to the Adjusted LIBOR Rate for such Interest Period, plus the Applicable LIBOR Rate Margin.  The Applicable LIBOR Rate Margin shall be calculated by Agent in reference to the Consolidated Funded Debt to Consolidated EBITDA ratio in effect on the Interest Rate Determination Date; provided however that during any Interest Period, the Applicable LIBOR Rate Margin shall be adjusted to reflect the Consolidated Funded Debt to Consolidated EBITDA ratio last reported by Borrower, and such adjustment shall be effective on the first Business Day following delivery of such report.

 

B.                                      Interest Periods . In connection with each LIBOR Rate Loan, Borrower may, pursuant to the applicable Notice of Borrowing or Notice of Conversion, as the case may be, select an interest period (each an “Interest Period”) to be applicable to such Loan, which Interest Period shall be, at Borrower’s option, either a one, two, three or six month period; provided that:

 

(i)                                      the initial Interest Period for any LIBOR Rate Loan shall commence on the Funding Date in respect of such Loan, in the case of a Loan initially made as a LIBOR Rate Loan, or on the date specified in the applicable Notice of Conversion, in the case of a Loan converted to a LIBOR Rate Loan;

 

16



 

(ii)                                   in the case of immediately successive Interest Periods applicable to a LIBOR Rate Loan continued as such pursuant to a Notice of Conversion, each successive Interest Period shall commence on the day on which the next preceding Interest Period expires;

 

(iii)                                if an Interest Period would otherwise expire on a day that is not a Business Day, such Interest Period shall expire on the next succeeding Business Day; provided that, if any Interest Period would otherwise expire on a day that is not a Business Day but is a day of the month after which no further Business Day occurs in such month, such Interest Period shall expire on the next preceding Business Day;

 

(iv)                               any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall, subject to clause (v) of this subsection 2.2B, end on the last Business Day of a calendar month;

 

(v)                                  no Interest Period with respect to any portion of the Loans shall extend beyond the Termination Date;

 

(vi)                               there shall be no more than four (4) LIBOR Interest Periods outstanding at any time; and

 

(vii)                            in the event Borrower fails to specify an Interest Period for any LIBOR Rate Loan in a Notice of Borrowing, or if Borrower fails to specify an Interest Period for any LIBOR Rate Loan in a Notice of Conversion, Borrower shall be deemed to have selected an Interest Period of one month therefor; and if Borrower fails to deliver a Notice of Conversion for a LIBOR Rate Loan at the end of the Interest Period for any LIBOR Rate Loan, Borrower shall be deemed to have selected an Interest Period of the same duration as the prior Interest Period; provided that if such Interest Period would extend beyond the Termination Date, such LIBOR Rate Loan shall nevertheless mature on the Termination Date, and shall also be subject to the provisions of subsection 2.5D.

 

C.                                      Interest Payments; Payment Currency .  Subject to the provisions of subsection 2.2E, interest on each Loan shall be payable in arrears (i) on and to each Interest Payment Date applicable to that Loan, (ii) upon any prepayment of that Loan (to the extent accrued on the amount being prepaid) and (iii) at maturity (including final maturity). Interest in respect of all Loans shall accrue and be paid in Dollars.

 

D.                                     Conversion or Continuation .  Subject to the provisions of subsection 2.5, Borrower shall have the option to continue or to convert any or all outstanding Loans from one type of Loan to another type of Loan; provided (a) conversions of LIBOR Rate Loans to Base Rate Loans shall be subject to the provisions of subsection 2.5D; and (b) no Loan may be converted into a LIBOR Rate Loan at any time that an Event of Default has occurred and is continuing.  A Base Rate Loan shall continue as a Base Rate Loan until converted to a LIBOR Rate Loan, or until such Loan is paid in full or matures.  A LIBOR Rate Loan shall continue as a LIBOR Rate Loan until converted to a Base Rate Loan, or until such Loan is paid in full or matures. If Borrower wishes to convert a LIBOR Rate Loan to a Base Rate Loan, or to convert a Base Rate Loan to a LIBOR Rate Loan, or to change the Interest Period for a LIBOR Rate Loan as of the end of the Interest Period for such LIBOR Rate Loan, Borrower shall deliver a Notice of Conversion to Agent no later than 2:00 p.m. (Hawaii time) at least three (3) Business Days in advance of the proposed conversion date. A Notice of Conversion shall specify (i) the date of

 

17



 

the proposed conversion (which shall be a Business Day), (ii) the amount and type of the Loan to be converted, (iii) the nature of the proposed conversion, (iv) in the case of a conversion to a LIBOR Rate Loan, or a change in the Interest Period for such LIBOR Rate Loan, the requested Interest Period, and (v) in the case of a conversion to a LIBOR Rate Loan, that no Event of Default has occurred and is continuing. In lieu of delivering the above-described Notice of Conversion, Borrower may give Agent telephonic notice by the required time of any proposed conversion under this subsection 2.2D; provided that such notice shall be promptly confirmed in writing by delivery of a Notice of Conversion to Agent on or before the proposed conversion date.

 

Neither Agent nor any Lender shall incur any liability to Borrower for acting in accordance with this subsection 2.2D, or in accordance with instructions given pursuant to this subsection 2.2D, and upon conversion of the applicable basis for determining the interest rate with respect to any Loans in accordance with this Agreement, Borrower shall have effected a conversion hereunder.

 

Except as otherwise provided in subsections 2.5B, 2.5C and 2.5G, a Notice of Conversion for conversion to a LIBOR Rate Loan shall be irrevocable on and after the related Interest Rate Determination Date, and Borrower shall be bound to effect a conversion in accordance therewith unless Borrower pays to Lenders such amounts as may be due under subsection 2.5D for failure of a conversion to any LIBOR Rate Loan to occur on the date specified therefor in the Notice of Conversion.

 

E.                                       Post-Maturity Interest . Any payments of principal or interest on any Loan not paid when due, whether at stated maturity, by acceleration or otherwise, shall thereafter bear interest (including post-petition interest in any proceeding under the Bankruptcy Code or other applicable Insolvency Laws) payable on demand at a rate which is equal to 6.00% per annum in excess of the interest rate otherwise payable under this Agreement with respect to the applicable Loans (the “ Default Rate ”); provided that, in the case of LIBOR Rate Loans, upon the expiration of the Interest Period in effect at the time any such increase in interest rate is effective, such LIBOR Rate Loans shall thereupon become Base Rate Loans.  Payment or acceptance of the increased rates of interest provided for in this subsection 2.2E is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of Agent or any Lender.

 

F.                                       Computation of Interest . Interest on the Loans shall be computed (but not compounded) on the basis of and a year of 360-day year.  In computing interest on any Loan, the date of the making of such Loan or the first day of an Interest Period applicable to such Loan or, with respect to a Base Rate Loan being converted from a LIBOR Rate Loan, the date of conversion of such LIBOR Rate Loan to such Base Rate Loan, as the case may be, shall be included, and the date of payment of such Loan or the expiration date of an Interest Period applicable to such Loan or, with respect to a Base Rate Loan being converted to a LIBOR Rate Loan, the date of conversion of such Base Rate Loan to such LIBOR Rate Loan, as the case may be, shall be excluded; provided that if a Loan is repaid on the same day on which it is made, one day’s interest shall be paid on that Loan.

 

18



 

2.3                                  Commissions and Fees .

 

A.                                    Upfront Fee . Borrower agrees to pay to the Lenders on or before the Effective Date, the Upfront Fee, which shall be shared by the initial Lenders under this Agreement in accordance with their respective Pro Rata Shares.

 

B.                                      Agent’s Fee . Borrower shall pay to Agent, for its own account, and not for distribution to any Lender, an annual Agent’s Fee in an amount agreed upon between Borrower and Agent in a separate Agreement Re. Agent’s Fee.

 

C.                                      Unused Commitment Fee . Borrower shall pay to Agent, for distribution to the Lenders based on their respective Pro-Rata Shares, the Unused Commitment Fee, payable quarterly, in arrears, on the last day of each quarter and on the Termination Date.

 

D.                                     Letter of Credit Fees . Borrower agrees to pay to the Agent for distribution to the Lenders based on their Pro Rata Shares the Letter of Credit Fees, and the Agent’s standard issuance, drawing, amendment and negotiation fees, as provided in Section 2.1F above.

 

E.                                       Breakage Fee . Borrower agrees to pay to the Lender from time to time and at any time, on demand, a fee (each called a “Breakage Fee”) equal to the Breakage Losses relating to an event described in Section 2.5D below.

 

2.4                                  Prepayments and Reductions in Commitments; General Provisions Regarding Payments .

 

A.                                    Prepayments and Reductions in Commitments .

 

(i)                                      Voluntary Prepayments . Borrower may, upon not less than one Business Day’s prior written notice, in the case of Base Rate Loans, and two Business Days’ prior written notice, in the case of LIBOR Rate Loans, in each case given to Agent by 10:00 a.m. (Hawaii time) on the date required and (which written notice Agent will promptly transmit by facsimile transmission to each Lender), at any time and from time to time prepay any Loan on any Business Day in whole or in part in an aggregate minimum amount of $250,000.00 and integral multiples of $100,000.00 in excess of that amount, provided, however, that a LIBOR Rate Loan may only be


This is only a partial view of this document. We have millions of legal documents and clauses drafted by top law firms. learn more search for free browse for free learn more