Document/Exhibit Description Pages Size
1: 10-K Form 10-K, for the Year Ended Dec. 31, 1993 27 128K
2: EX-4.(II) Debt Indenture, Dated as of Aug. 9, 1993 93 400K
3: EX-10.(III Lease Agreement, Dated as of Dec. 1, 1993 82 288K
4: EX-10.(IV) Escrow and Development Agmt, Dated Dec. 1, 1993 71 217K
5: EX-10.(V) Ground Lease, Dated Dec. 1, 1993 77 221K
6: EX-12 Statement Re: Computation of Ratios 2 9K
7: EX-13 Corporation's Annual Report, 1993 41 280K
8: EX-22 Subsidiaries of the Registrant 2 7K
9: EX-23 Consent of Independent Accountants 2 7K
EX-10.(IV) — Escrow and Development Agmt, Dated Dec. 1, 1993
Exhibit Table of Contents
EXHIBIT 10(iv)
CONSTRUCTION MANAGEMENT,
ESCROW AND DEVELOPMENT AGREEMENT
DATED AS OF DECEMBER 1, 1993
AMONG REFIRST, INC., FIRST HAWAIIAN BANK
AND FIRST FIDELITY BANK, N.A., PENNSYLVANIA
____________________________________________________________
CONSTRUCTION MANAGEMENT, ESCROW AND DEVELOPMENT AGREEMENT
among
REFIRST, INC.,
FIRST HAWAIIAN BANK
and
FIRST FIDELITY BANK, N.A.,
PENNSYLVANIA, as Trustee
Dated as of December 1, 1993
____________________________________________________________
TABLE OF CONTENTS
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Preliminary Statement . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I
DEFINITIONS
1.1 Defined Terms . . . . . . . . . . . . . . . . . . . 2
1.2 Other Definitional Provisions . . . . . . . . . . . 11
ARTICLE II
APPOINTMENT OF CONSTRUCTION MANAGER
2.1 Appointment . . . . . . . . . . . . . . . . . . . . 12
2.2 Assumption . . . . . . . . . . . . . . . . . . . . . 12
2.3 Term . . . . . . . . . . . . . . . . . . . . . . . . 12
2.4 Scope of Authority . . . . . . . . . . . . . . . . . 12
2.5 Assignment of Project Contracts and
Construction Account . . . . . . . . . . . . . . . 15
2.6 Delegation of Duties . . . . . . . . . . . . . . . . 16
2.7 Covenants of the Construction Manager . . . . . . . 16
2.8 Covenants of the Construction Manager
regarding the Construction Consultant . . . . . . . 19
ARTICLE III
THE BUILDING
3.1 Demolition and Construction . . . . . . . . . . . . 19
3.2 Change Orders . . . . . . . . . . . . . . . . . . . 20
3.3 Failure to Complete Building . . . . . . . . . . . . 23
3.4 Payments at the Overdue Rate . . . . . . . . . . . . 25
ARTICLE IV
PAYMENT OF COSTS OF WORK
4.1 Requisition of Funds Directly from the
Construction Account . . . . . . . . . . . . . . . 26
4.2 Limitation on Obligation to Fund . . . . . . . . . . 29
4.3 Conditions to Disbursement for Retainage . . . . . . 30
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ARTICLE V
EVENTS OF DEFAULT
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5.1 Events of Default . . . . . . . . . . . . . . . . 31
5.2 Damages . . . . . . . . . . . . . . . . . . . . . 33
5.3 Liquidated Damages . . . . . . . . . . . . . . . . 33
5.4 Waiver of Certain Rights . . . . . . . . . . . . . 34
5.5 Remedies Cumulative . . . . . . . . . . . . . . . 34
5.6 Release of the Lessor . . . . . . . . . . . . . . 34
ARTICLE VI
CASUALTY AND CONDEMNATION
6.1 Casualty and Condemnation . . . . . . . . . . . . 35
ARTICLE VII
INDEMNITY
7.1 Indemnification by Construction Manager . . . . . 35
7.2 Payment; Procedure for Claims . . . . . . . . . . 37
ARTICLE VIII
INSURANCE
8.1 Contractor's Insurance . . . . . . . . . . . . . . 39
8.2 Property Insurance . . . . . . . . . . . . . . . . 41
8.3 Coverage . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE IX
LESSOR'S RIGHTS; CONSTRUCTION MANAGER'S RIGHTS
9.1 Exercise of the Lessor's Rights . . . . . . . . . 43
9.2 Lease Obligations . . . . . . . . . . . . . . . . 43
9.3 Lessor's Right to Cure Construction
Manager's Defaults . . . . . . . . . . . . . . . 43
ARTICLE X
MISCELLANEOUS
10.1 Notice . . . . . . . . . . . . . . . . . . . . . 44
10.2 Successors and Assigns . . . . . . . . . . . . . 44
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10.3 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . 44
10.4 Consent To Jurisdiction . . . . . . . . . . . . . . . . 44
10.5 Amendments and Waivers . . . . . . . . . . . . . . . . 46
10.6 Counterparts . . . . . . . . . . . . . . . . . . . . . 46
10.7 Severability . . . . . . . . . . . . . . . . . . . . . 46
10.8 Integration . . . . . . . . . . . . . . . . . . . . . . 46
10.9 Headings and Table of Contents . . . . . . . . . . . . 46
10.10 Security Agreement and Financing Statement
Under Uniform Commercial Code . . . . . . . . . . . . 46
10.11 Directions of the Lessor . . . . . . . . . . . . . . . 47
10.12 Liabilities and Rights of the Trustee . . . . . . . . 47
10.13 Obligations Absolute and Unconditional . . . . . . . . 47
Schedules
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Schedule 1 - Default Amount
Schedule 2 - Essential Design Elements
Schedule 3 - [Reserved]
Schedule 4 - Consulting Agreement
Schedule 5 - Project Budget
Schedule 6 - Project Schedule
Schedule 7 - Form of Surety Bonds
Schedule 8 - Form of Project Architect's Certificate of
Substantial Completion for Core and Shell
Schedule 9 - Form of Interior Design Architect's Certificate
of Substantial Completion for Lessee Installations
Schedule 10 - Termination Amount
Schedule 11 - Replacement Construction Consultants
Schedule 12 - Limits for Off Site Materials
Schedule 13 - Assumed Earnings on Construction Account
Schedule 14 - Form of Letter from the Trustee to Sureties
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CONSTRUCTION MANAGEMENT, ESCROW AND DEVELOPMENT AGREEMENT
CONSTRUCTION MANAGEMENT, ESCROW AND DEVELOPMENT AGREEMENT,
dated as of December 1, 1993, among REFIRST, INC., a Delaware corporation (the
"Lessor"), FIRST HAWAIIAN BANK, a Hawaii banking corporation (the "Construction
Manager"), and FIRST FIDELITY BANK, N.A., PENNSYLVANIA, a national banking
association (the "Trustee").
Preliminary Statement
A. The Lessor and the Lessee (as defined below) are
parties to that certain Lease Agreement, dated as of even date herewith (the
"Master Lease"), pursuant to which the Lessee has leased from the Lessor those
certain parcels of real estate described on Schedules A-1 and A-2 to the Master
Lease (the "Land") together with all of the Improvements (as defined below).
B. The Lessor and the Lessee are also parties to that
certain Leased Improvements Construction Agreement, dated as of even date
herewith (the "Leased Improvements Construction Agreement"), pursuant to which
the Lessor has agreed, for the benefit of the Lessee, to cause the demolition
of the Existing Improvements (as defined below) and the construction of the
Building (as defined below) in accordance with the Plans and Specifications (as
defined below).
C. In order to provide funds for the demolition of the
Existing Improvements and the construction of the Building, the Lessor has
issued $161,990,000 of its 6.93% Class A Secured Notes Due 2003 (the "Class A
Notes") and $25,885,000 of its 6.98% Class B Secured Notes Due 2003 (the "Class
B Notes" and, together with the Class A Notes, the "Notes"), pursuant to that
certain Indenture, dated as of even date herewith (the "Indenture"), between
the Lessor and the Trustee, as trustee for the benefit of the holders of the
Notes (collectively, the "Holders"). The Lessor's obligations under the Notes
are secured by a first mortgage on the Property (as defined below) granted
pursuant to that certain Real Property Mortgage, Security Agreement and
Financing Statement, dated as of even date herewith (the "Mortgage"), made by
the Lessor and the Ground Lessors to the Trustee, and by an Assignment of
Leases and Rents, dated as of even date herewith (the "Assignment of Lease"),
from the Lessor to the Trustee and with respect to which the Lessee has
executed and delivered Lessee's Consent (the "Consent to Assignment"), dated as
of even date herewith.
D. Subject to the terms and conditions hereof, (i) the
Lessor desires to appoint the Construction Manager as its manager in connection
with the demolition of the Existing Improvements and the construction of the
Building in accordance with the Plans and Specifications and (ii) the
Construction
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Manager desires to assume, for the benefit of the Lessor and the Trustee, as
trustee for the benefit of the Holders, each of the Lessor's obligations under
the Leased Improvements Construction Agreement, including the obligations
thereunder to cause the demolition of the Existing Improvements and the
construction of the Building in accordance with the Plans and Specifications
and such other liabilities and obligations as are herein set forth.
NOW, THEREFORE, in consideration of the foregoing, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS
1.1 Defined Terms. As used in this Agreement, terms defined
in the caption or in the Preliminary Statement shall have the meanings set
forth therein, and the following terms shall have the following meanings:
Administrative Agent: As defined in the Participation
Agreement.
Affiliate: As defined in the Master Lease.
After Tax Basis: As defined in the Master Lease.
Agreement: This Construction Management, Escrow and
Development Agreement, as amended, supplemented or otherwise modified
from time to time.
Assignment of Lease: As defined in the Preliminary Statement.
Budget Finalization Date: As defined in Section 3.2(h) hereof.
Building: A 27 story first-class office tower containing
approximately 378,000 square feet of Rentable Area and approximately
700 parking spaces to be built on the Land in accordance with the
Plans and Specifications.
Business Day: As defined in the Master Lease.
Casualty: As defined in the Master Lease, but without regard
to the limitation that such event occur on or after the Final
Substantial Completion Date.
Change Order: As defined in Section 3.2(a) hereof.
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Class A Notes: As defined in the Preliminary Statement.
Class B Notes: As defined in the Preliminary Statement.
Closing Date: As defined in the Participation Agreement.
Condemnation: As defined in the Master Lease, but without
regard to the limitation that such event occur on or after the Final
Substantial Completion Date.
Consent to Assignment: As defined in the Preliminary
Statement.
Consulting Agreement: The agreement between the Bank and the
Construction Consultant in the form attached as Schedule 4 hereto.
Construction Account: An account established by the Trustee
on or prior to the Closing Date into which the Trustee shall deposit
all payments, receipts and other consideration of any sort whatsoever
received by the Trustee pursuant to this Agreement.
Construction Consultant: Parametrix, Inc., and following the
removal of such construction consultant by the Construction Manager in
accordance with the terms of Section 2.8 hereof, any replacement
construction consultant selected by the Construction Manager from
those construction consultants set forth on Schedule 11 hereto.
Construction Contract: The Construction Agreement dated
November 2, 1993 between the Construction Manager and the General
Contractor, providing for (a) the construction of the core and shell
of the Building in accordance with the Plans and Specifications, (b) a
maximum guaranteed price or stipulation sum, including interest carry,
of not more than $93,510,951 and (c) a turn-key completion, as such
Construction Agreement may be amended, supplemented or otherwise
modified from time to time in accordance with the terms of this
Agreement.
Construction Manager: As defined in the caption hereto.
Construction Project Costs: Those Project Costs which are
payable with respect to all labor, materials, equipment and fixtures
necessary for the demolition of the Existing Improvements and the
construction of the Building, the Lessee Installations and the
Subtenant Installations pursuant to the Project Contracts.
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Construction Surety Bond: As defined in Section 2.4(d) hereof.
Contingency Reserve: The amount specified as such in the
Project Budget.
Debt Overdue Rate: As defined in the Master Lease.
Default Amount: For any Payment Date, an amount set forth on
Schedule 1 hereto with respect to such Payment Date.
Demolition Contract: The Abatement and Demolition Agreement
dated June 3, 1993 between the Construction Manager and the Demolition
Contractor, providing for the demolition of the Existing Improvements,
as such Demolition Agreement may be amended, supplemented or otherwise
modified from time to time in accordance with the terms of this
Agreement.
Demolition Contractor: Cleveland Wrecking Company, or any
replacement permitted under Section 2.4(a)(v) hereof.
Demolition Surety Bond: As defined in Section 2.4(d) hereof.
Developer: The Myers Corporation, or any replacement
permitted under Section 2.4(a)(v) hereof.
Development Agreement: The Development Management Agreement,
dated December 28, 1992, between the Construction Manager and the
Developer, as such Development Management Agreement may be amended,
supplemented or otherwise modified from time to time in accordance
with the terms of this Agreement.
Disbursement Amount: As defined in Section 4.1(a)(i)(t)
hereof.
Disbursement Request: As defined in Section 4.1(a) hereof.
Environmental Law: As defined in the Master Lease.
Environmental Violation: As defined in the Master Lease.
ERISA: As defined in the Master Lease.
Escrow Termination Date: The date on which all funds
maintained in the Construction Account have been disbursed pursuant to
the terms of Article IV hereof and no additional funds are required to
be deposited in the Construction Account by the Construction Manager
under the terms hereof.
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Essential Design Elements: Those general features and
elements of the Building which are set forth in Schedule 2 hereto.
Event of Default: As defined in Section 5.1 hereof.
Excepted Payments: As defined in the Indenture.
Excepted Rights: As defined in the Indenture.
Excess Line Item Reserve: As defined in Section 3.2(b)(ii)
hereof.
Existing Improvements: As defined in the Participation
Agreement.
Final Substantial Completion Date: The date upon which both
the Substantial Completion Date for Core and Shell and the final
Substantial Completion Date for Lessee Installations shall have
occurred.
Fixtures: As defined in the Master Lease.
Force Majeure Event: Any event in the nature of acts of God,
civil commotion or enemy action.
General Contractor: Fletcher Pacific Construction Co., Ltd.,
or any replacement permitted under Section 2.4(a)(v) hereof.
Governmental Authority: Any federal, state, county, regional,
municipal or other governmental or regulatory authority, agency,
board, body, commission, instrumentality, court or quasi-governmental
authority.
Ground Lease: The Ground Lease, dated as of even date
herewith, between the Ground Lessors, collectively as ground lessors,
and the Lessor, as ground lessee.
Ground Lessors: As defined in the Participation Agreement.
Hazardous Activity: As defined in the Master Lease.
Hazardous Condition: As defined in the Master Lease.
Hazardous Substance: As defined in the Master Lease.
Holders: As defined in the Preliminary Statement.
Improvements: As defined in the Mortgage.
Indemnified Parties: As defined in Section 7.1(a) hereof.
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Indenture: As defined in the Preliminary Statement.
Independent Investment Banker: An independent investment
banking institution of national standing appointed by the Lessor that
is independent in fact from, does not have any direct financial
interest in, or any material indirect financial interest in, the
Lessor or the Construction Manager or any Affiliate of the Lessor or
the Construction Manager and is not connected with the Lessor or the
Construction Manager or any Affiliate of the Lessor or the
Construction Manager as an officer, employee, promoter, underwriter,
trustee, partner, director or Person performing similar functions.
Insurance Requirements: As defined in the Master Lease.
Interior Design Architect: With respect to any portion of the
interior space in the Building, the interior design architect selected
by the Construction Manager or, with respect to any portion of the
space in the Building subject to a sublease, the subtenant, as the
case may be, to design such portion of the interior space in the
Building.
Interior Design Plans and Specifications: The plans and
specifications for the construction of the Lessee Installations, as
such plans and specifications may be amended, supplemented or
otherwise modified from time to time in accordance with the terms of
this Agreement.
Land: As defined in the Preliminary Statement.
Leased Improvements Construction Agreement: As defined in the
Preliminary Statement.
Legal Requirements: As defined in the Master Lease.
Lessee: First Hawaiian Bank, a Hawaii banking corporation,
and its successors and assigns expressly permitted under the Master
Lease.
Lessee Installations: The tenant installations and fixtures
to be constructed in the space in the Building to be initially
occupied by the Lessee or any of its Affiliates.
Lessor Base Rent: As defined in the Master Lease.
Lessor Contribution: As defined in the Participation
Agreement.
Lessor Make-Whole Premium: As defined in the Master Lease.
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Lessor Overdue Rate: As defined in the Master Lease.
Lien: As defined in the Indenture.
Make-Whole Premium: As defined in the Indenture.
Master Lease: As defined in the Preliminary Statement.
Modifications: As defined in the Master Lease.
Moody's: As defined in the Participation Agreement.
Mortgage: As defined in the Preliminary Statement.
Notes: As defined in the Preliminary Statement.
Officer's Certificate: A certificate of the Construction
Manager signed by an individual holding the office of vice president
or higher, which certificate shall certify as true and correct the
subject matter being certified to in such certificate.
Operative Agreements: As defined in the Participation
Agreement.
Outside Completion Date for Core and Shell: October 1, 1997,
it being agreed this date may not be extended, regardless of any
extension, whether by Change Order or otherwise, of the date by which
the General Contractor or the Demolition Contractor must complete
performance of its obligations under the Construction Contract or the
Demolition Contract, as applicable.
Outside Completion Date for Lessee Installations: (a) With
respect to 76,000 square feet of Rentable Area of space in the
Building, October 1, 1998, (b) with respect to 114,000 square feet of
Rentable Area of space in the Building, February 1, 1999, and (c) with
respect to 152,000 square feet of Rentable Area of space in the
Building, June 1, 1999, it being agreed that such dates may not be
extended, regardless of any extension, whether by Change Order or
otherwise, of the date by which the Lessee Installations must be
completed under any Tenant Installation Contracts.
Outstanding: As defined in the Indenture.
Participants: As defined in Section 8.1(a) hereof.
Participation Agreement: The Participation Agreement, dated
as of November 19, 1993, among the Lessee, the Ground Lessors, the
Lessor and the Trustee.
Payment Date: As defined in the Indenture.
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Permitted Exceptions: As defined in the Master Lease.
Plans and Specifications: The plans and specifications for
the construction of the Building dated September 7, 1993 (as revised
through the Closing Date) and prepared by the Project Architect, as
such plans and specifications may be amended, supplemented or
otherwise modified from time to time in accordance with the terms of
this Agreement.
Project Architect: Kohn Pedersen Fox Associates P.C., or
another licensed architect selected by the Construction Manager which
both (i) is comparable in size and experience to Kohn Pedersen Fox
Associates P.C. and has comparable experience in the design and
construction administration of projects similar to the Building and
(ii) assigns to the Building an individual having experience in the
design and construction administration of projects similar to the
Building comparable to that of the on-site representative originally
assigned by Kohn Pedersen Fox Associates P.C.
Project Budget: The budget attached as Schedule 5 hereto
specifying all anticipated Project Costs, as such budget may be
amended, supplemented or otherwise modified from time to time in
accordance with the terms of this Agreement.
Project Contracts: The collective reference to the
Construction Contract, the Demolition Contract, the Development
Agreement, the Tenant Installation Contracts, the Surety Bonds, the
Consulting Agreement, and all other contracts between the Construction
Manager and any architect, engineer, consultant, contractor or other
professional which may be executed from time to time in connection
with the demolition of the Existing Improvements, the development and
construction of the Building, the Lessee Installations and the
Subtenant Installations, or the preparation of the Building for
occupancy by the Lessee or subtenants under Space Leases.
Project Costs: All costs and expenses incurred by the
Construction Manager or otherwise expended in connection with the
demolition of the Existing Improvements and the development, financing
or construction of the Building, the Lessee Installations and the
Subtenant Installations, or the preparation of the Building for
occupancy by the Lessee or subtenants under Space Leases, including,
without limitation, the following (but without duplication of any
item): (a) the costs of obtaining, and complying with, all necessary
demolition, building and other construction permits and licenses from
Governmental Authorities; (b) the costs of reviewing and implementing
safety programs; (c) the costs of preparing and distributing bid
packages in connection with engaging architects, engineers,
consultants, contractors or other professionals; (d) real estate taxes
8
and assessments; (e) personal property taxes, if applicable; (f)
charges of utilities provided to the Land; (g) premiums payable under
insurance policies (which, in the case of any policies covering
multiple properties, shall be allocated to the Building pro rata in
proportion to the insured value of the properties covered by such
policies); (h) premiums payable under the Surety Bonds; (i) legal fees
and expenses; (j) security costs; (k) fees and expenses of the
Trustee, the Administrative Agent and the Construction Consultant; (l)
survey costs and title premiums; (m) fees and expenses of architects,
consultants, appraisers, engineers and other professionals; (n) costs
for soil analysis, hazardous waste audits and other consultants'
studies, reports and surveys; (o) the relocation expenses of Lessee;
(p) Sublease Expenditures; (q) the cost of the Lessee Installations;
and (r) all fees and expenses relating to the issuance and sale of the
Notes, including legal fees and expenses, rating agency fees and
expenses, accounting fees and expenses, printing fees and expenses and
placement agent fees and expenses.
Project Costs Increase: As defined in Section 3.2(b)(i)(y)
hereof.
Project Schedule: The construction schedule for the Building
and the completion of the Lessee Installations attached as Schedule 6
hereto, as such schedule may be amended, supplemented or otherwise
modified from time to time in accordance with the terms of this
Agreement.
Property: As defined in the Master Lease.
Release: As defined in the Master Lease.
Rent Commencement Date: As defined in the Master Lease.
Rentable Area: As defined by the Building Owners and Managers
Association International, commonly known as BOMA.
S&P: As defined in the Participation Agreement.
Significant Event: As defined in Section 3.3(a)(i) hereof.
Space Leases: Subleases for space in the Building to tenants
other than the Lessee or any of its Affiliates.
Sublease Expenditures: All costs, expenses and fees relating
to the subletting by the Lessee of space in the Building, including,
without limitation, all costs and expenses relating to the Subtenant
Installations, fees and expenses of architects and legal counsel,
brokerage commissions, marketing costs, and any work allowance
9
payments made to subtenants in lieu of work letter installations.
Substantial Completion Date for Core and Shell: The date on
which Substantial Completion for Core and Shell shall occur.
Substantial Completion Date for Lessee Installations: The
dates on which Substantial Completion for Lessee Installations shall
occur.
Substantial Completion for Core and Shell: The completion of
construction of the Building in accordance with the Plans and
Specifications, subject only to punch list items, as certified to by
the Project Architect pursuant to a Certificate of Substantial
Completion for Core and Shell, in the form attached as Schedule 8
hereto.
Substantial Completion for Lessee Installations: The
completion of construction of Lessee Installations in 76,000 square
feet of Rentable Area of space in the Building, 114,000 square feet of
Rentable Area of space in the Building and 152,000 square feet of
Rentable Area of space in the Building, respectively, in each case in
accordance with the Interior Design Plans and Specifications, subject
only to punch list items, as certified to by the Interior Design
Architect pursuant to a Certificate of Substantial Completion for
Lessee Installations, in the form attached as Schedule 9 hereto.
Subtenant Installations: The tenant installations and
fixtures to be constructed in the space in the Building to be
subleased by the Lessee to subtenants other than Affiliates of the
Lessee.
Surety Bonds: Collectively, the Construction Surety Bond and
the Demolition Surety Bond.
Tenant Installation Contracts: All contracts for the
construction of Lessee Installations or Subtenant Installations.
Termination Amount: As of any Payment Date, the amount set
forth on Schedule 10 hereto with respect to such Payment Date.
Termination Date: As defined in Section 3.3(c) hereof.
Termination Notice: As defined in Section 3.3(b) hereof.
Title Company: Ticor Title Insurance Co., or another
nationally recognized title insurance company reasonably acceptable to
the Trustee.
10
Title Policy: The lender's policy of title insurance issued
on the Closing Date to the Trustee in an amount equal to 187,875,000.
Total Condemnation: As defined in the Master Lease.
Treasury Yield: With respect to the calculation of the Lessor
Make-Whole Premium, a per annum rate, determined as of the date of
determination of the Lessor Make-Whole Premium, equal to the weekly
average yield to maturity of United States Treasury Notes having a
constant maturity as set forth in the most recent weekly statistical
release (or any successor release) published by the Board of Governors
of the Federal Reserve System and designated "H.15(519) Selected
Interest Rates" (the "H.15 Statistical Release"), corresponding to the
average weighted life of the Lessor Contribution (calculated to the
nearest 1/12 of a year) (the "Weighted Average Life"); such yield
described in this clause to be calculated by the Independent
Investment Banker, by interpolation (unless the Weighted Average Life
of the Lessor Contribution equals a constant maturity set forth in the
H.15 Statistical Release) on a straight-line basis, between the
weekly average yields (rounded, if necessary, to the nearest 1/100 of
1% with any figure of 1/200 of 1% or above rounded upward) on (a) the
United States Treasury Notes with a constant maturity closest to and
greater than the Weighted Average Life and (b) the United States
Treasury Notes with a constant maturity closest to and less than the
Weighted Average Life, or if such weekly average yields are not
available, by interpolation of comparable rates selected by the
Independent Investment Banker.
Trustee: As defined in the caption hereto, or any replacement
Trustee appointed pursuant to the terms of the Indenture.
1.2 Other Definitional Provisions. (a) Words and phrases
used in the singular shall be deemed to include the plural and vice versa, and
nouns and pronouns used in any particular gender shall be deemed to include any
other gender, as the context may permit.
(b) Unless otherwise specified, all references herein to
designated "Articles", "Sections", "Schedules" and other subdivisions shall be
to the designated Articles, Sections, Schedules and other subdivisions of this
Agreement.
(c) The words "including" and "include", and words of similar
import, shall be deemed to be followed by "without limitation".
(d) The words "herein", "hereof" and "hereunder", and words
of similar import, shall refer to this Agreement as a whole
11
and not to any particular Article, Section, Schedule or other subdivision of
this Agreement.
ARTICLE II
APPOINTMENT OF CONSTRUCTION MANAGER
2.1 Appointment. Subject to the terms and conditions hereof,
the Lessor hereby irrevocably designates and appoints the Construction Manager
as its exclusive manager in connection with the demolition of the Existing
Improvements and the development and construction of the Building on the Land
in accordance with the Plans and Specifications, as an independent contractor
and not as the Lessor's agent. Notwithstanding any provision to the contrary
contained in this Agreement, the Construction Manager shall not have any duties
or responsibilities, except those expressly provided herein and in the other
Operative Agreements to which the Construction Manager is a party, or any
fiduciary relationship with the Lessor, and no implied covenants,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Construction Manager.
2.2 Assumption. The Construction Manager hereby
unconditionally assumes, for the benefit of the Lessor and the Trustee, as
trustee for the benefit of the Holders, the performance and satisfaction of all
of the Lessor's obligations under the Leased Improvements Construction
Agreement. The Construction Manager also hereby agrees, unconditionally and
for the benefit of the Lessor and the Trustee, as trustee for the benefit of
the Holders, to cause the Substantial Completion Date for Core and Shell to
occur on or prior to the Outside Completion Date for Core and Shell and each
Substantial Completion Date for Lessee Installations to occur on or prior to
the applicable Outside Completion Date Completion Date for Lessee
Installations. In consideration for such obligations, the Lessor has on the
date hereof, deposited in the Construction Account for disbursement in
accordance with the terms hereof, an amount equal to the Project Costs as
specified in the current Project Budget less the amount specified in the
Project Budget on account of assumed earnings on the Construction Account.
2.3 Term. This Agreement shall commence on the date hereof
and shall terminate upon the earlier to occur of (a) the Escrow Termination
Date and (b) payment by the Construction Manager of the Termination Amount in
accordance with the terms of Section 3.3 hereof.
2.4 Scope of Authority. (a) The Lessor hereby expressly
authorizes the Construction Manager, or the Developer as the agent of the
Construction Manager, and the Construction Manager unconditionally agrees, for
the benefit of the Lessor and the Trustee, to take all action necessary or
desirable for the
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performance and satisfaction of all of the Lessor's obligations under the
Leased Improvements Construction Agreement and to fulfill all of the
obligations of the Construction Manager hereunder, including, without
limitation:
(i) negotiating and entering into the Project Contracts
and all other arrangements with architects, engineers, managers,
consultants, contractors and other professionals on such terms and
conditions as are customary and reasonable in light of local standards
and practices;
(ii) terminating for any reason any Project Contract
(other than the Construction Contract, the Demolition Contract, the
Development Agreement and the Surety Bonds) and terminating for cause
the Construction Contract, the Demolition Contract, the Development
Agreement or the Surety Bonds;
(iii) to the extent expressly permitted by Section 3.2
hereof, modifying or amending the Project Contracts (subject at all
times to the obligations contained in Section 2.4(c) hereof);
(iv) supervising and directing the work of all
architects, engineers, managers, consultants, contractors and other
professionals;
(v) entering into any contract or contracts necessary
to replace a Project Contract that has been terminated in accordance
with the terms hereof; provided that (x) the replacement Project
Contract is substantially similar in scope to the Project Contract
being terminated, by its terms will require Substantial Completion for
Core and Shell to occur on or prior to the Outside Completion Date for
Core and Shell, or, with respect to Lessee Installations, will require
Substantial Completion for Lessee Installations to occur on or prior
to the each Outside Completion Date for Lessee Installations, and will
not increase the Project Costs except to the extent permitted under
Section 3.2 hereof and (y) the contracting party has the demonstrable
reputation, experience and economic capacity to perform the scope of
work required under the replacement Project Contract; and provided
further that in the event of the failure of the General Contractor,
the Demolition Contractor or the Developer to perform their respective
obligations under the Construction Contract, the Demolition Contract
or the Development Agreement, respectively, in any material respect,
the Construction Manager shall use its best efforts to replace the
General Contractor, the Demolition Contractor or the Developer, as the
case may be, as soon as reasonably practicable in light of the then
current status of the Building;
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(vi) obtaining all necessary permits, licenses,
consents, approvals and other authorizations, including those required
under applicable Environmental Laws, from all Governmental Authorities
in connection with the demolition and disposal of the Existing
Improvements (including any Hazardous Substances) and the development
and construction of the Building in accordance with the Plans and
Specifications and the Lessee Installations in accordance with the
Interior Design Plans and Specifications;
(vii) performing all acts necessary or desirable to
construct the Lessee Installations and the Subtenant Installations;
and
(viii) performing any other acts necessary or desirable in
connection with the demolition of the Existing Improvements and the
development and construction of the Building in accordance with the
Plans and Specifications.
(b) Neither the Construction Manager, the Developer nor any
of their respective Affiliates or agents shall enter into any Project Contract
which would, directly or indirectly, impose any liability or obligation on the
Lessor.
(c) The Construction Manager shall cause each of the
Demolition Contractor and the General Contractor to procure and maintain at all
times during which work is being performed under, or Disbursement Requests are
being made in respect of, the Demolition Contract or the Construction Contract,
as applicable, a performance and payment bond guaranteeing the faithful
performance and payment of the obligations arising under the Demolition
Contract and the Construction Contract, respectively, or the payment of an
amount equal to the contract sum. Each such performance and payment bond shall
be in the form attached as Schedule 7 hereto.
(d) The surety bond which supports the obligations of the
Demolition Contractor (the "Demolition Surety Bond") shall be issued by The
Insurance Company of the State of Pennsylvania. The Surety Bond which supports
the obligations of the General Contractor (the "Construction Surety Bond") will
be issued by one or more insurance companies which has, or whose parent
corporation has, a "claims paying ability" rating from S&P and Moody's of at
least "A" and "A1", respectively. In the event that at any time prior to the
completion of the demolition of the Existing Improvements the rating of the
Notes from S&P or Moody's is less than "BBB" or "Baa2", respectively, unless at
the same time the "claims paying ability" rating assigned to an insurance
company which has issued (and is liable for the entire obligation under) the
Construction Surety Bond, or its parent corporation, from either S&P or Moody's
is at least equal to "BBB-" or "Baa3", respectively, then the Construction
Manager shall either replace such surety with a surety which has, or whose
parent corporation has, a "claims paying ability" rating from S&P and Moody's
of at
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least "BBB-" and "Baa3", respectively, or provide additional credit support for
the obligations of The Insurance Company of the State of Pennsylvania in order
to ensure that such obligations are equivalent to the obligations of an entity
whose "claims paying ability" ratings from S&P and Moody's are at least "BBB-"
and "Baa3", respectively. Further, in the event that at any time prior to the
completion of construction of the core and shell of the Building the rating of
the Notes from S&P or Moody's is less than "BBB" or "Baa2", respectively,
unless at the same time the "claims paying ability" rating assigned to an
insurance company which has issued (and is liable for the entire obligation
under) the Construction Surety Bond, or its parent corporation, from either S&P
or Moody's is at least equal to "BBB-" or "Baa3", respectively, then the
Construction Manager shall either replace such surety with one or more sureties
which has, or whose parent corporation has, a "claims paying ability" rating
from S&P and Moody's of at least "BBB-" and "Baa3", respectively, or provide
additional credit support for the obligations of such surety in order to ensure
that such obligations are equivalent to the obligations of an entity whose
"claims paying ability" ratings from S&P and Moody's are at least "BBB-" and
"Baa3", respectively.
(e) The Trustee will promptly execute and deliver at the
request of the Construction Manager a letter in the form attached as Schedule
14 hereto in favor of each of the insurance companies which have issued the
Surety Bonds.
2.5 Assignment of Project Contracts and Construction Account.
(a) As security for its obligation to cause Substantial Completion for Core
and Shell to occur on or prior to the Outside Completion Date for Core and
Shell and to cause each Substantial Completion for Lessee Installations to
occur on or prior to the applicable Outside Completion Date for Lessee
Installations, the Construction Manager hereby assigns, transfers, conveys and
sets over to the Lessor all of its right, title and interest in and to the
Project Contracts. Notwithstanding the foregoing, so long as no Event of
Default shall have occurred and be continuing, the Construction Manager shall
retain (i) all rights to pursue claims for damages in respect of the Building
arising as a result of any default by any architect, engineer, consultant,
contractor or other professional retained by the Construction Manager,
including, without limitation, all rights with respect to warranty, service,
performance guarantee and indemnity provisions contained in any Project
Contract (it being agreed, however, that all warranties and guaranties relating
to the Building, such as those covering the elevators, roof, curtain wall,
heating, HVAC and electrical systems will be issued jointly to the Construction
Manager and to the Lessor) and (ii) all rights to compel performance of the
terms of the Project Contracts.
(b) Pursuant to the Indenture, the Lessor has pledged its
right, title and interest in and to all funds from time to
15
time deposited in the Construction Account to the Trustee as security for the
benefit of the Holders. The Construction Manager and the Lessor each
acknowledges that such pledge has been effected and agrees that the terms of
the Indenture shall control the disposition of the funds in the Construction
Account to the extent there exists or occurs any conflict between the terms of
the Indenture and this Agreement.
2.6 Delegation of Duties. The Construction Manager may
execute any of its duties under this Agreement by or through agents or
attorneys-in-fact, including, without limitation, the Developer; provided,
however, that no such delegation shall limit or reduce in any way the
Construction Manager's duties and obligations under this Agreement.
2.7 Covenants of the Construction Manager. The Construction
Manager hereby covenants and agrees that it will:
(a) Permit the Construction Consultant to enter upon the
Land, inspect the Improvements and all materials to be used in the
construction thereof and examine all detailed plans and shop drawings
which are kept on the Land; it will cooperate with, and cause the
Demolition Contractor, the General Contractor, the Developer and all
subcontractors to cooperate with, the Construction Consultant to
enable him to perform his functions hereunder; at the time of each
inspection by the Construction Consultant, the Construction Manager
will make available to the Construction Consultant, on demand, daily
log sheets covering the period since the immediately preceding
inspection showing the date, weather, subcontractors on the job,
number of workers and status of construction;
(b) Pay all Project Costs, including, without limitation:
(i) all costs and expenses of the Lessor
incurred or required to be paid under the Leased Improvements
Construction Agreement;
(ii) all document and stamp taxes, recording and
filing expenses and fees and commissions lawfully due to
brokers in connection with the transactions contemplated
hereby; and
(iii) the fees and expense of the Construction
Consultant in connection with the transactions contemplated
hereby.
(c) Following the commencement of construction of the
Building, cause construction of the Building to be prosecuted
diligently and continuously in accordance with the Plans and
Specifications; and cause the Substantial Completion Date for Core and
Shell to occur on or prior to
16
the Outside Completion Date for Core and Shell and cause each
Substantial Completion Date for Lessee Installations to occur on or
prior to the applicable Outside Completion Date for Lessee
Installations, in each case in a good and workmanlike manner and free
and clear of defects and Liens or claims for materials supplied or
labor or services performed in connection with the demolition of the
Existing Improvements or the construction of the Building or the
Lessee Installations;
(d) Upon the written request of the Lessor, the Trustee or
the Construction Consultant, deliver to the Lessor, the Trustee or the
Construction Consultant, as applicable, copies of all contracts, bills
of sale, statements, receipted vouchers or agreements under which the
Construction Manager claims title to any materials, fixtures or
articles incorporated in the Building, or under which it has incurred
costs or expenses for which it is entitled to a disbursement
hereunder, and deliver to the Lessor, the Trustee and the Construction
Consultant such other information or documents in connection with the
Building and the Lessee Installations as they may from time to time
reasonably request;
(e) Upon demand of the Lessor, the Trustee or the
Construction Consultant, correct any defects (including structural
defects) in the Building or the Lessee Installations or any departures
from the Plans and Specifications or the Interior Design Plans and
Specifications not permitted under the terms of this Agreement;
(f) Employ suitable means to protect from theft or vandalism
all portions of the Improvements and all tools and building materials
stored on the Land;
(g) Ensure that at all times there are sufficient funds on
deposit in the Construction Account (after taking into account the
interest expected to be earned on such funds as reflected in the
Project Budget) in order to provide that (i) the Building will be
constructed in accordance with the Plans and Specifications, (ii) the
Lessee Installations will be constructed in accordance with the
Interior Design Plans and Specifications, (iii) Substantial Completion
for Core and Shell will occur on or prior to the Outside Completion
Date for Core and Shell, and (iv) each Substantial Completion for
Lessee Installations will occur on or prior to the applicable Outside
Completion Date for Lessee Installations, in each case by depositing
additional funds in the Construction Account as necessary to comply
with this Section 2.7(g);
(h) Following the Substantial Completion Date for Core and
Shell and the final Substantial Completion Date for
17
Lessee Installations, respectively, use reasonable good-faith efforts
to cause all outstanding punch list items with respect to the Building
and the Lessee Installations to be completed;
(i) Each year during the calendar month in which occurs the
anniversary of the Substantial Completion Date for Core and Shell, the
Construction Manager shall cause the Construction Consultant to enter
upon the Land, to inspect the Improvements and to prepare a written
report of the condition of the Improvements for delivery to the Lessor
and the Trustee and shall cooperate with the Construction Consultant
as may be reasonably required to enable it to prepare such report (and
the obligation of the Construction Consultant set forth in this
Section 2.7(i) shall expressly survive the expiration or earlier
termination of this Agreement until the principal amount of the Notes
shall have been paid in full); and
(j) In addition to the right to receive a written report of
the condition of the Improvements contained in Section 2.7(i) above,
as often as the Lessor shall reasonably request, the Construction
Manager shall promptly cause the Construction Consultant to enter upon
the Land, to inspect the Improvements and to prepare a written report
of the condition of the Improvements for delivery to the Lessor and
shall cooperate with the Construction Consultant as may be reasonably
required to enable it to prepare such report (and the obligation of
the Construction Manager set forth in this Section 2.7(j) shall remain
in full force and effect until December 1, 2003 notwithstanding any
expiration or earlier termination of this Agreement). In the event
that any report of the Construction Consultant contemplated by either
the preceding sentence or Section 2.7(i) above reasonably demonstrates
that a condition exists which results, or a potential condition exists
which if left uncured could result, in a default hereunder or a
default under the Master Lease or is adverse to the interests of the
Lessor in the Property, then the Lessor shall deliver a written notice
to the Construction Manager reasonably identifying such condition.
Within fifteen (15) days of receipt by the Construction Manager of
such notice from the Lessor, the Construction Manager will (i) remedy
such condition or such potential condition, or (ii) present to the
Lessor a plan to remedy such condition or potential condition and
diligently commence efforts to cure such condition or such potential
condition. If the Construction Manager fails to observe or perform
its obligations under clauses (i) or (ii) of the preceding sentence,
then the Lessor (in addition to any other rights and remedies it may
have hereunder or under the Master Lease) shall have the right to
inspect the Property. Further, if at any time there occurs and is
continuing a default hereunder or a default under the Master Lease,
then the Lessor shall (in
18
addition to any other rights and remedies it may have hereunder or
under the Master Lease) have the right to inspect the Property in
accordance with the terms and provisions of the Master Lease.
2.8 Covenants of the Construction Manager regarding the
Construction Consultant. (a) The Construction Manager shall engage the
Construction Consultant pursuant to the Consulting Agreement. The Construction
Manager shall not terminate the Construction Consultant except for cause (which
will in no event include the reasonable, good-faith performance by the
Construction Consultant of its duties under the Consulting Agreement, even if
the Construction Manager disagrees with the conclusions reached by the
Construction Consultant in the performance of such duties).
(b) The Construction Manager shall cause the Construction
Consultant to perform its duties as set forth in the Consulting Agreement and
shall terminate the Construction Consultant if at any time it fails to perform
such duties.
(c) The Construction Manager will not amend, modify or
supplement the Consulting Agreement without the prior written consent of the
Trustee.
(d) In the event the Construction Consultant is terminated in
accordance with clause (a) or (b) above, a replacement Construction Consultant
shall be selected by the Bank from the consultants listed on Schedule 11 hereto
(provided that such replacement consultant shall not at the time of its
selection derive a significant portion of its annual revenues from the
Construction Manager) to perform the same duties, and subject to the same terms
and conditions, as set forth in the Consulting Agreement.
(e) The obligations of the Construction Manager contained in
this Section 2.8 shall remain in full force and effect until December 1, 2003
notwithstanding any expiration or earlier termination of this Agreement.
ARTICLE III
THE BUILDING
3.1 Demolition and Construction. (a) The Construction
Manager will cause the Existing Improvements and any Hazardous Substances
therein to be demolished, used, handled, managed, treated, stored, transported,
deposited and disposed of in accordance with the Demolition Contract and in
full compliance with all Legal Requirements, including, without limitation, all
Legal Requirements relating to the removal, handling, management, storage,
transport and disposal of the asbestos-containing materials present in the
Existing Improvements.
19
(b) The Construction Manager will cause (i) Substantial
Completion for Core and Shell to occur on or prior to the Outside Completion
Date for Core and Shell, and (ii) the Building to be constructed and equipped
in full compliance with all Legal Requirements (including Environmental Laws)
and Insurance Requirements.
(c) The Construction Manager will cause (i) each Substantial
Completion for Lessee Installations to occur on or prior to the applicable
Outside Completion Date for Lessee Installations, (ii) the Subtenant
Installations to be constructed as may be required under any Space Lease which
requires construction of Subtenant Installations, and (iii) all Sublease
Expenditures to be paid as and when incurred.
3.2 Change Orders. (a) The Construction Manager may at any
time following the Budget Finalization Date revise, amend or modify the Plans
and Specifications, the Interior Design Plans and Specifications, the Project
Budget or the Project Schedule (but not beyond the Outside Completion Date for
Core and Shell or the Outside Completion Date for Lessee Installations, as
applicable) (any such revision, amendment or modification, a "Change Order")
and enter into any related amendments, modifications or supplements to any of
the Project Contracts (other than the Consulting Agreement), the Project Budget
and the Project Schedule without the consent of the Lessor or the Trustee;
provided that such Change Orders or related amendments, modifications or
supplements to any Project Contract do not result in a rescission, termination
or cancellation of the Construction Contract, the Demolition Contract, the
Development Agreement or the Surety Bonds.
(b) Except as otherwise provided in Sections 3.2(c) and
3.2(h) below, within thirty (30) days of implementing any such Change Order,
the Construction Manager shall:
(i) deliver to the Lessor, the Trustee and the
Construction Consultant an Officer's Certificate and a certificate of
the Developer (each of which shall be executed only after consultation
with the Project Architect and only with the concurrence of the
Project Architect, if appropriate), in each case setting forth (x) any
changes in the Project Budget or the Project Schedule resulting from
the Change Order, (y) the estimated increase, if any, in Project Costs
relating to any line item in the Project Budget that will result from
implementation of the Change Order (each such increase, a "Project
Costs Increase") and (z) a statement that the Change Order (1) is
permitted under the Surety Bonds or that the Surety Bonds have been
amended to allow such Change Order, (2) is in compliance with all
applicable Legal Requirements, (3) will not extend the Substantial
Completion Date for Core and Shell past the Outside Completion Date
for Core and Shell and will not extend any Substantial Completion Date
for Lessee
20
Installations past the applicable Outside Completion Date for Lessee
Installations, (4) if undertaken, would not result in the Building
being constructed other than in accordance with the Essential Design
Elements and (5) complies with the requirements of Section 3.2(f)
hereof; and
(ii) to the extent that all or a portion of any Project
Costs Increase cannot be funded from the yet unallocated Contingency
Reserve line item in the Project Budget or from excess funds available
under any line item of the Project Budget (other than the line item
for Project Costs to be incurred for Subtenant Installations and
Lessee Installations) where the yet unfunded amount allocated to such
line item under the Project Budget exceeds the amount necessary to
complete such line item as certified to by the Project Architect or,
if such line item is outside the scope of the expertise of the Project
Architect, by the Developer (as so certified, an "Excess Line Item
Reserve"), cause to be deposited in the Construction Account an amount
in cash equal to the Project Costs Increase or such portion thereof.
The Construction Manager shall cause the funds required by the preceding clause
(ii) to be deposited by paying its own funds into the Construction Account.
Any such funds so deposited in the Construction Account shall be disbursed in
accordance with the terms of Article IV hereof.
(c) Except as otherwise provided in Section 3.2(h) below, the
Construction Manager shall comply with the requirements of clauses (i) and (ii)
of Section 3.2(b) above at least ten (10) days in advance of implementing any
such Change Order if either (i) prior to the time referred to in clause (ii)
below, such Change Order anticipates a net increase or decrease of greater than
$1,000,000 either in (x) any one line item in the Project Budget individually
or (y) any number of line items in the Project Budget in the aggregate or (ii)
from and after the time the Construction Manager shall have begun the
implementation of Change Orders, all of which Change Orders taken together
result in a net increase or decrease of greater than $5,000,000 in any number
of line items in the Project Budget in the aggregate or in a net increase or
decrease of greater than $2,000,000 in any one line item in the Project Budget
individually, such Change Order anticipates a net increase or decrease of
greater than $100,000 either in (x) any one line item in the Project Budget
individually or (y) any number of line items in the Project Budget in the
aggregate.
(d) If either (i) prior to the time referred to in clause
(ii) below, any Change Order anticipates a net decrease of greater than
$1,000,000 either in (x) any one line item in the Project Budget individually
or (y) any number of line items in the Project Budget in the aggregate or (ii)
from and after the time the Construction Manager has begun the implementation
of
21
Change Orders, all of which Change Orders taken together result in a net
decrease of greater than $5,000,000 in any number of line items in the Project
Budget in the aggregate or in a net decrease of greater than $2,000,000 in any
one line item in the Project Budget individually, any Change Order (when
aggregated with any other Change Orders with respect to which the Construction
Manager has not delivered an appraiser's certificate) anticipates a net
decrease of greater than $500,000 either in (x) any one line item in the
Project Budget individually or (y) any number of line items in the Project
Budget in the aggregate, then at least ten days in advance of implementing any
such Change Order, the Construction Manager shall deliver to the Lessor, the
Trustee and the Construction Consultant a certificate of The Hallstrom Group,
Inc. or another reputable appraisal firm, which is a member of the Appraisal
Institute, which has received not more than 5% of its gross income during the
previous two (2) years from business with the Construction Manager and which
has at least five (5) years experience in the downtown Honolulu office market,
stating that the aggregate effect of such Change Order, together with any
previous or contemporaneous Change Orders, will not be to reduce the fair
market value of the Building when completed.
(e) Upon compliance by the Construction Manager with all of
the provisions of this Section, the Project Budget, the Project Schedule, the
Plans and Specifications and the Interior Design Plans and Specifications shall
be deemed amended in accordance with the Change Order.
(f) The Construction Manager agrees that it will not
implement any Change Order if the aggregate effect of such Change Order,
together with any previous or contemporaneous Change Orders, would be to reduce
the fair market value of the Building when completed.
(g) The Project Budget assumes that the earnings, on a
cumulative basis, on investments of the funds deposited in the Construction
Account, on a month-by-month basis are as reflected on Schedule 13. To the
extent that the actual cumulative earnings on investments of the funds
deposited in the Construction Account for any particular month are less than
the assumed cumulative earnings for such month set forth in Schedule 13, the
Construction Manager shall either (i) deposit in the Construction Account an
amount equal to such deficiency as a condition to any further disbursements or
(ii) implement a Change Order in accordance with Section 3.2(a) through (f)
which has the effect of reducing Project Costs by an amount at least equal to
such deficiency. The Construction Manager shall have the right to implement a
Change Order in respect of the earnings line item in the Project Budget to the
extent of any reduction of another line item in the Project Budget (adopted in
accordance with the Change Order procedures set forth in Section 3.2(a) through
(f), and in that event, Schedule 13 shall be modified. To the extent that the
actual cumulative earnings on the Construction Account
22
for any particular month are greater than the assumed cumulative earnings for
such month set forth in Schedule 13, the Construction Manager shall have the
right to implement one or more Change Orders which has the effect of increasing
Project Costs by an amount equal to such excess.
(h) Notwithstanding the provisions of paragraphs (a) through
(g) above, the Construction Manager shall amend the Project Budget within four
(4) months of the date of this Agreement without complying with the
requirements of paragraphs (a) through (g) above and within a reasonable time
after the General Contractor delivers to the Construction Manager its detailed
breakdown of the costs and expenses included within the scope of the
Construction Contract (the date upon which the Project Budget shall be so
amended, the "Budget Finalization Date"). Pursuant to such amendment, the
Construction Manager shall (i) reallocate the aggregate amount of $93,510,951
set forth in the "Building Construction" category in the Project Budget among
the nineteen (19) "Divisions" constituting the "Building Construction
Categories" attached to the Project Budget and (ii) shall further allocate the
amount allocated to each of these nineteen (19) "Divisions" to each of the
line-items set forth as a subheading to such "Division" in the Project Budget.
Such amendment with respect to the Project Budget shall be consistent in all
material respects with the cost breakdown agreed upon between the Construction
Manager and the General Contractor and shall be subject to the prior approval
of the Construction Consultant.
3.3 Failure to Complete Building. (a) If at any time prior
to the Substantial Completion Date for Core and Shell there occurs a Casualty
or a Force Majeure Event or the Lessor or the Construction Manager receives
notice of a Condemnation then in each case the Construction Manager shall
either:
(i) terminate this Agreement in accordance with Sections
3.3(b) and 3.3(c) below in the event of (x) a Total Condemnation or
(y) a Condemnation, Casualty or Force Majeure Event which in the
reasonable, good-faith judgment of the Construction Manager (as
evidenced by an Officer's Certificate) and in the judgment of the
Construction Consultant (as evidenced by a certificate of the
Construction Consultant) is so substantial in nature such that
achieving (1) the Substantial Completion Date for Core and Shell on or
prior to the Outside Completion Date for Core and Shell would be
impracticable or impossible or (2) any Substantial Completion Date for
Lessee Installations on or prior to the applicable Outside Completion
Date for Lessee Installations would be impracticable or impossible
(each of the events described in this Section 3.3(a)(i), a "Significant
Event"); or
(ii) promptly and diligently complete the construction of
the Building and the Lessee Installations in
23
accordance with the Plans and Specifications and the Interior Design
Plans and Specifications, respectively, and with the terms hereof, and
otherwise at the Construction Manager's sole cost and expense, and
cause the Substantial Completion Date for Core and Shell to occur on
or prior to the Outside Completion Date for Core and Shell and each
Substantial Completion Date for Lessee Installations to occur on or
prior to the applicable Outside Completion Date for Lessee
Installations, in the event of a Condemnation, Casualty or Force
Majeure Event which in the reasonable, good-faith judgement of the
Construction Manager (as evidenced by an Officer's Certificate) does
not constitute a Significant Event.
(b) If prior to the Substantial Completion Date for Core
and Shell the Lessor or the Construction Manager shall have received notice of
a Total Condemnation of the Property, then the Construction Manager shall,
within thirty (30) days after the Construction Manager receives notice thereof,
deliver to the Lessor and the Trustee a written notice in the form described in
Section 3.3(c) (a "Termination Notice") of the termination of this Agreement.
If prior to the Substantial Completion Date for Core and Shell the Lessor or
the Construction Manager shall have received notice of a Condemnation of the
Property or a Casualty or Force Majeure Event occurs, and the Construction
Manager shall have delivered to the Lessor an Officer's Certificate and a
certificate of the Construction Consultant to the effect that such
Condemnation, Casualty or Force Majeure Event constitutes a Significant Event
in accordance with Section 3.3(a)(i), then the Construction Manager shall,
simultaneously with the delivery of such Officer's Certificate and certificate
of the Construction Consultant, deliver to the Lessor and the Trustee a
Termination Notice.
(c) A Termination Notice shall contain (i) notice of the
Construction Manager's termination of this Agreement on the next Payment Date
which occurs at least thirty (30) days after the Lessor's and the Trustee's
receipt of such Termination Notice (the "Termination Date"), (ii) a binding and
irrevocable agreement of the Construction Manager to pay the Termination Amount
and purchase the Lessor's right, title and interest in the Property on such
Payment Date and (iii) the Officer's Certificate and the certificate of the
Construction Consultant described in Section 3.3(a)(i). On the Termination
Date, the Construction Manager shall pay to the Lessor the Termination Amount
and all amounts owing in respect of Rent (including Additional Charges),
including any indemnities under Article VII hereof or Articles IV and XXV of
the Master Lease (if any), theretofore accruing hereunder or under the Master
Lease, and the Lessor shall convey its right, title and interest in the
Property, or the remaining portion thereof, to the Construction Manager (or the
Construction Manager's designee) in accordance with Section 19.1 of the Master
Lease.
24
(d) Notwithstanding anything to the contrary set forth in
this Agreement, if a Casualty occurs or the Lessor or the Construction Manager
shall receive notice of a Condemnation, in each case on or after the
Substantial Completion Date for Core and Shell, such Casualty or Condemnation
shall be governed by the provisions in respect thereof contained in the Master
Lease. Notwithstanding anything to the contrary set forth in this Agreement,
if a Force Majeure Event occurs after the Substantial Completion Date for Core
and Shell, the Construction Manager shall cause construction of the Lessee
Installations to be prosecuted diligently and continuously in accordance with
the Interior Design Plans and Specifications but the Construction Manager shall
be relieved of its obligation to achieve each Substantial Completion for Lessee
Installations on or prior to the applicable Outside Completion Date for Lessee
Installations and its obligation to deliver, or cause to be delivered, as a
condition to its ability to receive funds from the Construction Account,
certificates to the effect that each Substantial Completion for Lessee
Installations will be achieved on or prior to the applicable Outside Completion
Date for Lessee Installations.
(e) Notwithstanding anything to the contrary set forth in
this Agreement, if the Master Lease terminates as a result of the provisions of
Section 16.1(b)(iii) thereof, this Agreement shall also terminate concurrently
therewith.
3.4 Payments at the Overdue Rate. The Construction Manager
shall pay to the Lessor (i) interest at the Debt Overdue Rate on any portion of
the Termination Amount, Default Amount, Make-Whole Premium or other amount
payable under this Agreement that is required to be paid to the Trustee and
applied to the payment of principal, interest or premium (if any) due under the
Notes or to the payment of any other amount due the Trustee hereunder, under
the Indenture or under any other Operative Agreement (provided, that the Debt
Overdue Rate shall not apply to an overdue payment to the extent that the
application of the Debt Overdue Rate would render unenforceable the payment of
Make-Whole Premium due hereunder (but only if such payment of Make-Whole
Premium would otherwise exceed the payment resulting from such application of
the Debt Overdue Rate) and (ii) interest at the Lessor Overdue Rate on any
portion of the Termination Amount, Default Amount, Lessor Make-Whole Premium or
other amount payable under this Agreement that is required to be paid to the
Trustee on account of the Lessor Contribution or otherwise payable to the
Lessor hereunder, in each case not paid when due from the due date to the date
of actual payment.
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ARTICLE IV
PAYMENT OF COSTS OF WORK
4.1 Requisition of Funds Directly from the Construction
Account. (a) On the tenth (10th) day of each calendar month (or if such day
is not a Business Day, the next succeeding Business Day), the Construction
Manager shall submit to the Lessor, with a copy to the Construction Consultant
and the Trustee, a request for a disbursement from the Construction Account (a
"Disbursement Request"), together with:
(i) an Officer's Certificate, certified as true and
correct by the Developer, setting forth the following:
(t) the amount of Project Costs that the Construction Manager
has incurred in accordance with the Plans and Specifications and the
Project Budget since the last Disbursement Request submitted to the
Lessor for the payment of amounts due on account of Project Costs (the
"Disbursement Amount") broken down by the categories identified in the
Project Budget, accompanied by evidence supporting each such item of
Project Costs covered by such Disbursement Request, including a copy
of the disbursement request and all related information presented by
the Demolition Contractor, the General Contractor or any other
contractor under any Project Contract with respect to such
Disbursement Request, and indicating that such amounts are currently
due and payable;
(u) a statement and evidence that all amounts advanced to the
Construction Manager during the previous calendar month for the
payment of Project Costs have been properly applied to such Project
Costs;
(v) a statement that the construction of the Building and the
Lessee Installations, if applicable, to date has been performed in a
good and workmanlike manner and in accordance with the Plans and
Specifications and the Interior Design Plans and Specifications, as
applicable, and in compliance with all applicable Legal Requirements
(including Environmental Laws) and Insurance Requirements and that the
progress thereof is such that the Substantial Completion Date for Core
and Shell will occur on or prior to the Outside Completion Date for
Core and Shell and that each Substantial Completion Date for Lessee
Installations will occur on or prior to the applicable Outside
Completion Date for Lessee Installations;
(w) a statement with respect to any Disbursement Amount
that relates to the payment of Construction Project Costs, that such
amount has been paid by the Construction Manager or is currently due
and payable for (A) work, labor or materials incorporated in the
Building, the Lessee
26
Installations or the Subtenant Installations; (B) materials suitably
stored on the Land but not incorporated in the Building; (C) materials
warehoused; or (D) materials otherwise identifiable and for which
customary arrangements have been made with the manufacturer or
fabricator for payment and delivery, in each case up to the date of
such Disbursement Request (in the case of the first Disbursement
Request) or to the date of such Disbursement Request from the date of
the last previous Disbursement Request (in the case of any subsequent
Disbursement Request), together with evidence that, following
disbursement of that portion of the Disbursement Amount which relates
to a particular category of materials described in the preceding
clause (C) or this clause (D), the value of such materials, when
aggregated with all materials of the same category which are currently
neither incorporated into the Building, the Lessee Installations or
the Subtenant Installations nor stored on the Land (but which are
either warehoused or are otherwise identifiable and for which
customary arrangements have been made for payment and delivery) and
which were the subject of a previous Disbursement Request, do not
exceed the amount set forth opposite such category listed on Schedule
12 hereto;
(x) a statement with respect to any Disbursement Amount that
relates to the payment of Project Costs (other than Construction
Project Costs), that such amount has been paid by the Construction
Manager or is currently due and payable for such Project Costs;
(y) a statement that the unadvanced funds in the Construction
Account (including the then current amount of assumed earnings on the
Construction Account) allocable to Project Costs in each line item of
the Project Budget are sufficient (after application of any available
Excess Line Item Reserve and the Contingency Reserve) to pay in full
Project Costs of such line item which will be required for the
Substantial Completion Date for Core and Shell to occur on or prior to
the Outside Completion Date for Core and Shell and for each
Substantial Completion Date for Lessee Installations to occur on or
prior to the applicable Outside Completion Date for Lessee
Installations; and
(z) a statement that no part of the Project Costs described
in such Disbursement Request has been previously paid under a prior
Disbursement Request.
(ii) a certificate of the Project Architect setting forth the
following:
(x) a statement that to the best of the Project Architect's
knowledge, information and belief, the work covered by such
Disbursement Request and by all prior Disbursement Requests has been
completed in accordance with
27
the Plans and Specifications and in a good and workmanlike manner; and
(y) the stage and percentage of completion, based on the
Plans and Specifications, which has been achieved with respect to the
various contract categories in the construction of the Building.
(iii) with respect to any Disbursement Request which contains
a request for the funding of Subtenant Installations (and in lieu of the
materials required under clause (ii) above), the following:
(x) a certificate from the Interior Design Architect setting
forth the following:
(1) a statement that to the best of the Interior
Design Architect's knowledge, information and belief, the
construction of the Subtenant Installations covered by such
Disbursement Request and by all prior Disbursement Requests
has been performed in a good and workmanlike manner and in
accordance with the applicable terms of the Space Lease or
Space Leases pursuant to which such Subtenant Installations
are being performed; and
(2) with respect to each Space Lease pursuant to
which Subtenant Installations are being performed, the stage
and percentage of completion, based on the approved plans and
specifications for such Space Lease, which have been achieved
with respect to the various contract categories in the
construction of such Subtenant Installations; and
(y) an Officer's Certificate, certified as true and correct
by the Developer, stating that, after giving effect to such
Disbursement Amount, and any previous Disbursement Amount for the
payment of the costs of Subtenant Installations, the unadvanced funds
in the Construction Account allocable to the line item for Project
Costs to be incurred for Subtenant Installations are at least equal to
$40 per square foot of the remaining unimproved space demised to
subtenants under Space Leases (with a partially improved space being
considered improved to the extent of the percentage completion
indicated by the Interior Design Architect in its certificate
delivered pursuant to clause (iii)(x)(2) above).
(iv) with respect to any Disbursement Request which contains
a request for the funding of Lessee Installations (and in lieu of the materials
required under clause (ii) above), a certificate from the Interior Design
Architect setting forth the following:
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(x) a statement that to the best of the Interior Design
Architect's knowledge, information and belief, the construction of the
Lessee Installations covered by such Disbursement Request and by all
prior Disbursement Requests has been performed in a good and
workmanlike manner and in accordance with the Interior Design Plans
and Specifications; and
(y) the stage and percentage of completion, based on the
Interior Design Plans and Specifications, which has been achieved with
respect to the various contract categories in the construction of the
Lessee Installations.
(v) an endorsement to the Title Policy from the Title Company
insuring that the Disbursement Amount is secured by the Mortgage and the
Assignment of Lease and constitutes a valid first lien on the Land and the
Improvements without exception, other than Permitted Exceptions.
(b) Each Disbursement Request and each receipt of the
Disbursement Amount requested thereby shall constitute a representation and
warranty by the Construction Manager that each representation and warranty
contained in Section 7.2 of the Participation Agreement (provided, that, except
for the first disbursement to be made on the Closing Date, no such
representation shall be made in respect of the first sentence of subsection
7.2(a) thereof, as to which a comparable representation shall be true, or in
subsection 7.2(p), subsection 7.2(q), as to which a comparable representation
shall also be true, or subsection 7.2(w) thereof) are true and correct on the
date of such Disbursement Request or such receipt, as the case may be.
(c) Unless within ten (10) days of receipt by the Lessor, the
Trustee and the Construction Consultant of a Disbursement Request, the
Construction Consultant advises the Construction Manager, the Lessor and the
Trustee that the Disbursement Request is deficient (including, without
limitation, due to the fact that any certification included therewith is
inaccurate or that any condition to disbursement set forth in Section 4.2 has
not been satisfied), the Trustee shall transfer from the Construction Account
to the account of the Construction Manager maintained with the Trustee funds
equal to the Disbursement Amount, as limited or adjusted in accordance with
Section 4.2 below. If the Construction Consultant determines that the
Disbursement Request is deficient in some manner, it shall promptly advise the
Construction Manager, the Lessor and the Trustee of the nature of the
deficiency.
4.2 Limitation on Obligation to Fund. (a) With respect to
any Disbursement Request, disbursements for the payment of Project Costs in
each category of cost in the Project Budget shall be limited (i) in the
aggregate to the amount shown for such category in the Project Budget in the
column entitled
29
"Reserve" and (ii) in each case to the Disbursement Amount on account of such
amounts as stated in a particular Disbursement Request. Disbursements shall be
made only to defray Project Costs described in the Project Budget and actually
incurred or then due and payable.
(b) If the unadvanced funds in the Construction Account
allocable to Project Costs in any line item in the Project Budget is at any
time not sufficient to pay in full Project Costs of such line item which will
be required for the Substantial Completion Date for Core and Shell to occur on
or prior to the Outside Completion Date for Core and Shell and for each
Substantial Completion Date for Lessee Installations to occur on or prior to
the applicable Outside Completion Date for Lessee Installations, the Trustee
shall not make further Disbursements and the Construction Manager shall
promptly (i) reallocate the amount of such deficiency from the Contingency
Reserve line item in the Project Budget or from any available Excess Line Item
Reserve, or any combination of such amounts, or (ii) deposit funds in the
Construction Account in the amount of such deficiency. Following any such
reallocation or deposit, the Project Budget shall be amended to reflect the
increased Project Costs and the Trustee shall continue to make disbursements in
accordance with such revised Project Budget. For the purpose of this Section
4.2(b), the Construction Account shall be deemed to include the then current
amount, as shown on Schedule 13 hereto, of the assumed earnings on the
Construction Account.
(c) No disbursement shall be made if either (i) there
shall have occurred and be continuing either a default hereunder, with respect
to which the Construction Manager has received written notice thereof, or an
Event of Default or (ii) any of the representations or warranties contained in
Section 7.2 of the Participation Agreement (provided, that, except for the
first disbursement to be made on the Closing Date, no such representation shall
be made in respect of the first sentence of subsection 7.2(a) thereof, as to
which a comparable representation shall be true, or in subsection 7.2(p),
subsection 7.2(q), as to which a comparable representation shall also be true,
or subsection 7.2(w) thereof) shall not be true and correct in any material
respect as of the date of such disbursement.
4.3 Conditions to Disbursement for Retainage. On or prior to
the date of the disbursement for the release of the retainage withheld from the
General Contractor in accordance with the Construction Contract, the Lessor,
the Trustee and the Construction Consultant shall have received, in addition to
the documentation required by Section 4.1 hereof:
(a) Architects Certificate. A Certificate of Substantial
Completion for Core and Shell in the form attached as Schedule 8
hereto signed by the Project Architect stating that, subject to punch
list items, the
30
Building has been completed in accordance with the Plans and
Specifications;
(b) Release of Liens. A release of liens signed by the
Project Architect, the Developer, the Demolition Contractor, the
General Contractor, all other contractors under the Project Contracts
and all other subcontractors and materialmen; provided that a release
of liens shall not be required with respect to contracts (i) which the
Construction Manager is contesting and with respect to which the
Construction Manager has a reasonable, good-faith belief that a
release of lien should have been delivered and (ii) the aggregate
amount owed to contractors and subcontractors under which is no
greater than $2,000,000;
(c) Survey. A survey of the Land and the Improvements by an
independent surveyor licensed in the State of Hawaii (i) showing no
encroachments by the Building over the lot lines or easements other
than those permitted by express written easements or appropriate
governmental approval, (ii) noting any visible work on the Land which
is on-going on the date of such survey and (iii) based on an
inspection within thirty (30) days prior to the date of the
Disbursement Request;
(d) Utilities. Letters from local utility companies or
Governmental Authorities stating that electric power, sanitary and
storm sewer and water facilities and other necessary utilities are
available to and are serving the Building; and
(e) Governmental Approvals. Evidence of approval by all
Governmental Authorities whose approval may then be required with
respect to the completion of the Building, the Lessee Installations
and the Subtenant Installations, and the intended use thereof, under
any Legal Requirements at such time.
ARTICLE V
EVENTS OF DEFAULT
5.1 Events of Default. If any one or more of the following
events (each an "Event of Default") shall occur:
(a) the Construction Manager shall fail to make any payment
or deposit any funds required to be paid or deposited hereunder within
five (5) days after receipt of notice that the same has become due and
payable;
(b) the Substantial Completion Date for Core and Shell shall
fail for any reason to occur on or prior to the Outside Completion
Date for Core and Shell or any
31
Substantial Completion Date for Lessee Installations shall fail for
any reason to occur on or prior to the applicable Outside Completion
Date for Lessee Installations;
(c) if the insurance policy required by Section 8.2 shall
be terminated or expire without replacement;
(d) the Construction Manager shall fail to observe or perform
any term, covenant or condition of this Agreement, the Master Lease,
the Participation Agreement or any other Operative Agreement (except
with respect to breaches discussed in clauses (a), (b) and (c) above)
to which it is a party, or any representation or warranty set forth in
Section 7.2 of the Participation Agreement as of the date hereof, or
in Section 4.1(b) of this Agreement, shall be inaccurate in any way
materially adverse to the Lessor, and such failure or
misrepresentation or breach of warranty shall remain uncured for a
period of thirty (30) days after notice thereof; provided, however, no
Event of Default shall be deemed to occur if such failure,
misrepresentation or breach cannot reasonably be cured within such
period, so long as the Construction Manager shall have promptly
commenced the cure thereof and continues to act with diligence to cure
such failure, misrepresentation or breach and, with respect to any
failure, misrepresentation or breach contained in Sections 2.2, 2.4,
2.5, 2.7(a), (b), (d), (g), 2.8, 3.1(b)(i), 3.1(c)(i), 3.2 and 7.1
hereof and Sections 7.2(a), (b), (h), (l), (m), (o), (r), (t), (u),
(v), 7.3(a), (b), (f), (g), (i), 7.4(a), (b), (f), (g), (i), Section
8, Section 9, Sections 14.1, 14.2, 14.3, 14.4, 14.5, 14.7 and 14.9 of
the Participation Agreement, in fact cures such failure,
misrepresentation or breach within 180 days after receipt of notice
thereof;
(e) the Construction Manager shall (i) admit in writing its
inability to pay its debts generally as they become due, (ii) file a
petition under the United States bankruptcy laws or any other
applicable insolvency law or statute of the United States of America
or any State or Commonwealth thereof, (iii) make a general assignment
for the benefit of its creditors, (iv) consent to the appointment of a
receiver of itself or the whole or any substantial part of its
property, (v) fail to cause the discharge of any custodian, trustee,
receiver or conservator appointed for the Construction Manager or the
whole or a substantial part of its property within ninety (90) days
after such appointment, or (vi) file a petition or answer seeking or
consenting to reorganization under the United States bankruptcy laws
or any other applicable insolvency law or statute of the United States
of America or any State or Commonwealth thereof; or
(f) insolvency proceedings or a petition under the United
States bankruptcy laws or any other applicable insolvency law or
statute of the United States of America or
32
any State or Commonwealth thereof shall be filed against the
Construction Manager and not dismissed within ninety (90) days from
the date of its filing, or a court of competent jurisdiction shall
enter an order or decree appointing, without the consent of the
Construction Manager, a receiver or conservator of the Construction
Manager or the whole or a substantial part of its property, and such
order or decree shall not be vacated or set aside within ninety (90)
days from the date of the entry thereof;
then, in any such event, the Lessor may, in addition to the other rights and
remedies provided for in this Article, terminate this Agreement by giving the
Construction Manager thirty (30) days notice of such termination and upon the
expiration of the time fixed in such notice, this Agreement shall terminate and
all rights of the Construction Manager under this Agreement shall cease,
subject to the Construction Manager's rights under Section 5.3. The
Construction Manager shall pay all costs and expenses incurred by or on behalf
of the Lessor, including fees and expenses of counsel, as a result of any Event
of Default hereunder.
5.2 Damages. The termination of this Agreement pursuant to
Section 5.1 shall in no event relieve the Construction Manager of its liability
and obligations hereunder or under the Master Lease, or in respect of any
indemnity hereunder or under the Master Lease, all of which shall survive any
such termination. In the event of any termination of this Agreement pursuant
to Section 5.1, the Construction Manager shall forthwith pay to the Lessor all
sums on account of funds required to be paid or deposited hereunder to and
including the date of such termination.
5.3 Liquidated Damages. (a) At any time after this
Agreement shall be terminated pursuant to Section 5.1, whether or not the
Lessor shall have collected any damages pursuant to Section 5.2, the Lessor
shall have the right to recover, by demand to the Construction Manager and at
the Lessor's election, and the Construction Manager shall pay to the Lessor, as
and for final liquidated damages, and in lieu of all current liquidated damages
beyond the date of such demand (it being agreed that it would be impossible
accurately to determine actual damages), but exclusive of any indemnity
payments under Article VII hereof or Section 25.1 or Article IV of the Master
Lease, an amount equal to the sum of (i) the Default Amount specified for such
Payment Date on Schedule 1 hereto plus (ii) the Make-Whole Premium payable by
reason of the application of the Default Amount as shall be required to be
applied to the Notes upon acceleration thereof, plus (iii) the Lessor Make-
Whole Premium, if any, required to be paid to the Lessor under Section 5.3(b)
hereof, plus (iv) all amounts owing in respect of Rent (including Additional
Charges) theretofore accruing under the Master Lease. Upon the payment in full
of the amount specified in the first sentence of this Section 5.3, the
Construction Manager or its
33
designee shall be entitled to receive from the Lessor, at the Construction
Manager's request and cost, an assignment of the Lessor's right, title and
interest as lessee under the Ground Lease and the Lessor's entire interest in
the Improvements, Fixtures and Modifications all in accordance with Section
19.1 of the Master Lease. The Construction Manager (or the Construction
Manager's designee) shall execute and deliver to the Lessor an assumption of
all of the Lessor's obligations under the Ground Lease. The Property shall be
conveyed to the Construction Manager (or the Construction Manager's designee)
"AS IS" and in its then present physical condition. If any statute or rule of
law shall limit the amount of such final liquidated damages to less than the
amount agreed upon, the Lessor shall be entitled to the maximum amount
allowable under such statute or rule of law; provided, however, that the
Construction Manager shall not be entitled to receive an assignment of the
Lessor's interest under the Ground Lease or in the Improvements unless the
Construction Manager shall have paid in full the Default Amount plus the
Make-Whole Premium, the Lessor Make-Whole Premium, if applicable, and all
accrued Rent (including Additional Charges) as provided for in the previous
sentence.
(b) In the event this Agreement is terminated solely as a
result of the Construction Manager's willful and deliberate failure to cause
the Substantial Completion Date for Core and Shell to occur on or prior to the
Outside Completion Date for Core and Shell or any Substantial Completion Date
for Lessee Installations to occur on or prior to the applicable Outside
Completion Date for Lessee Installations, then the Lessor shall have the right
to recover on the Payment Date on which payment is made, pursuant to paragraph
(a) above, by demand to the Construction Manager and at the Lessor's sole
election, and the Construction Manager shall pay to the Lessor on such Payment
Date, an amount equal to the Lessor Make-Whole Premium.
5.4 Waiver of Certain Rights. If this Agreement shall be
terminated pursuant to Section 5.1, the Construction Manager waives, to the
fullest extent permitted by law, (a) any notice of re-entry or the institution
of legal proceedings to obtain re-entry or possession; (b) any right of
redemption, re-entry or repossession; (c) the benefit of any laws now or
hereafter in force exempting property from liability for rent or for debt; and
(d) any other rights which might otherwise limit or modify any of the Lessor's
rights or remedies under this Article.
5.5 Remedies Cumulative. The remedies herein provided shall
be cumulative and in addition to (and not in limitation of) any other remedies
available at law, equity or otherwise.
5.6 Release of the Lessor. In the event the Lessor assigns
all of its right, title and interest as lessee under the Ground Lease and its
entire interest in the Improvements, Fixtures and Modifications to the
Construction Manager (or the Construction Manager's designee) all in accordance
with Section
34
19.1 of the Master Lease and the terms of this Agreement, then the Lessor shall
be released from all of its obligations under this Agreement.
ARTICLE VI
CASUALTY AND CONDEMNATION
6.1 Casualty and Condemnation. In the event of a Casualty or
Condemnation which occurs prior to the Substantial Completion Date for Core and
Shell, any award, compensation or insurance proceeds shall be paid to the
Trustee, and any such award, compensation or insurance proceeds received by the
Trustee shall be (a) first applied by the Trustee to reimburse the Lessor, the
Trustee and the Holders for any expenses (including, without limitation, any
reasonable attorneys' and consultants' fees and expenses) incurred by any of
the foregoing in connection with the collection of such award, compensation or
insurance proceeds, or the determination of the amount of the loss, and then
(b) deposited into the Construction Account to be disbursed in accordance with
the terms of Article IV hereof.
ARTICLE VII
INDEMNITY
7.1 Indemnification by Construction Manager. (a) The
Construction Manager shall indemnify the Lessor, the Administrative Agent, the
Trustee and the Holders and any affiliate, officer, director, employee, agent
or shareholder of the Lessor, the Administrative Agent, the Trustee or any
Holder (collectively, the "Indemnified Parties"), on an After Tax Basis, from
and against all actions, causes of action, claims, lawsuits, administrative
proceedings, hearings, judgments, liabilities, awards, fines, penalties, costs,
fees (including legal, engineers', experts' and consulting fees and expenses),
damages (including natural resource damages), corrective action costs,
financial assurance costs, remediation activities and clean-up costs (including
investigation, monitoring, encapsulation, removal and response costs), Liens
(including any environmental Lien), and all other liabilities incurred by or
imposed on any of the Indemnified Parties, whenever incurred or imposed (but
excluding any liabilities for Impositions imposed by any taxing authority,
which liabilities are covered exclusively by Article IV of the Master Lease),
arising out of, imposed upon or incurred by or asserted against the Indemnified
Parties by reason of:
(i) any accident, injury to or death of natural
persons or loss of or damage to property occurring on or about the
Property;
(ii) the Lessor's ownership of the Property;
35
(iii) the failure by the Lessor to qualify as a foreign
corporation in the State of Hawaii;
(iv) any use, misuse, nonuse, condition, operation,
possession, leasing, subleasing, financing, refinancing, disposition,
maintenance or repair of the Property;
(v) the construction, design, purchase, acceptance,
rejection, modification, substitution or condition of the Property,
including, without limitation, claims or penalties arising from any
violation of law or liability in tort (strict or otherwise);
(vi) entering into the Operative Agreements or any
transaction arising out of the Operative Agreements;
(vii) the breach by the Construction Manager of any of its
representations and warranties, or the failure on the part of the
Construction Manager at any time to perform or comply with any of the
terms or conditions, in any of the Operative Agreements to which it is
a party;
(viii) the existence or presence at, on, in or under the
Property of any Hazardous Substance or the Release of any Hazardous
Substance from, at, under or within the Property into the environment
(including air, water vapor, surface water, groundwater, drinking
water, land (including surface or subsurface), plant, aquatic and
animal life);
(ix) the disturbance, pollution, contamination or
interference with any wetland, body of water (whether surface or
subsurface), aquifer or watercourse due to any Hazardous Activity or
the existence or presence of a Hazardous Condition at the Property;
(x) the occurrence at the Property of any Hazardous Activity
or Hazardous Condition;
(xi) the transportation, use, treatment, storage,
disposition, Release or disposal of any Hazardous Substance found in,
on, under or at the Property;
(xii) any personal injury to or death of natural persons or
property damage resulting from any Hazardous Activity at the Property,
the existence of a Hazardous Condition at the Property or the Release
of any Hazardous Substance from, at, under or onto the Property;
(xiii) any Environmental Violation or alleged violation of
Environmental Law at, on, in or under the Property or in connection
therewith;
(xiv) the applications of Parts 4 and 5 of Subtitle B of
Title I of ERISA (including, without limitation, any
36
penalties imposed under Section 501(i) or (1) of ERISA) or any excise
taxes, charges or penalties imposed under Section 4975 of the Code,
except as a result of the breach by the Lessor or any Affiliate of the
Lessor of ERISA or any rule or regulation promulgated thereunder
(other than a breach caused by or resulting from an act or omission of
the Construction Manager, either of the Ground Lessors, the Trustee,
the Holders or any of their respective Affiliates); and
(xv) the demolition of the Existing Improvements or the
development and construction of the Building as contemplated by this
Agreement;
except in each case, with respect to any Indemnified Party, to the extent such
liabilities, obligations, claims, damages, penalties, causes of action, costs
or expenses (x) are imposed upon or incurred by or asserted against such
Indemnified Party by reason of the matters described in clauses (i) through
(xv) above that arise from events commencing solely and entirely after the
later of the expiration or earlier termination of this Agreement; (y) solely
result from the gross negligence or the willful misconduct by of such
Indemnified Party (except, in the case of the Lessor, for the Lessor's failure
to qualify as a foreign corporation in the State of Hawaii); or (z) solely
result from the breach by such Indemnified Party of Section 905 or 921 of the
Indenture or the breach by such Indemnified Party of any other provisions of
the Operative Agreements after receipt of notice of such breach and a
reasonable opportunity to cure such breach (but only to the extent such
Indemnified Party is not otherwise prevented from curing such breach).
(b) The obligations of the Construction Manager under this
subsection shall remain unaffected and continue in full force and effect
irrespective of and notwithstanding any action or failure to act or delay on
the part of any of the Indemnified Parties to enforce any rights or remedies
against the Construction Manager. Such obligations shall remain unaffected
irrespective of and notwithstanding any default by any such party in performing
any obligation or duty arising under this subsection.
(c) The obligations of the Construction Manager pursuant to
this subsection shall survive the expiration or earlier termination of this
Agreement notwithstanding anything herein to the contrary.
7.2 Payment; Procedure for Claims. (a) Any amounts which
become payable by the Construction Manager under subsection 7.1 shall be paid
promptly after demand by the Indemnified Party entitled thereto and, if such
payment is not timely paid, shall bear interest at the Lessor Overdue Rate from
the date when due to the date of payment.
37
(b) Promptly after receipt by an Indemnified Party of notice
of the commencement or assertion against it of any claim, action or proceeding,
such Indemnified Party shall, if a claim in respect thereof is to be made
against the Construction Manager under this subsection, notify the
Construction Manager thereof; but the omission so to notify the Construction
Manager shall not relieve the Construction Manager from any liability which it
may have to such Indemnified Party. The Construction Manager, at its sole cost
and expense, acting through counsel reasonably acceptable to the Indemnified
Party, may contest, resist and defend any claim, action or proceeding with
respect to which it shall have received the notice described in the preceding
sentence and may compromise or otherwise dispose of the same as the
Construction Manager shall deem appropriate, and, upon such assumption by the
Construction Manager of such contest and defense, the Construction Manager
shall not be obligated to pay any attorneys' fees or other legal costs incurred
by or on behalf of the Indemnified Party; provided that the Construction
Manager may only assume control of the defense of any such claim to the extent
that it has provided to such Indemnified Party written acknowledgement that the
Construction Manager is obligated to indemnify such Indemnified Party with
respect to such claim; and provided further that the Construction Manager shall
not be entitled to assume and control the defense of any such contest, action,
suit or proceeding if and to the extent that (i) in the reasonable opinion of
such Indemnified Party; (x) such contest, action, suit or proceeding involves
the potential imposition of criminal liability or material civil liability
(whether or not indemnified hereunder) on such Indemnified Party or (y) the
control of such contest, action, suit or proceeding would involve the
Construction Manager in a bona fide conflict of interest, (ii) an Event of
Default has occurred and is continuing or (iii) such contest, action, suit or
proceeding involves matters which extend beyond or are unrelated to the
transactions contemplated by the Operative Agreements and if determined
adversely could be materially detrimental to the interests of such Indemnified
Party notwithstanding indemnification by the Construction Manager, in which
case the Indemnified Party will be entitled to assume and take control of the
defense thereof at the Construction Manager's expense. The Indemnified Party
may participate in a reasonable manner at its own expense and with its own
counsel in any proceeding conducted by the Construction Manager in accordance
with the foregoing. Each Indemnified Party shall, at the Construction
Manager's request, cooperate with the Construction Manager, at no cost or
expense to the Indemnified Party, in the defense of any such claim, action or
proceeding. If, in the opinion of counsel to any Indemnified Party, there are
legal defenses available to such Indemnified Party which are different from or
in addition to those available to the Construction Manager, such Indemnified
Party shall be permitted to participate in the defense of such claim, action or
proceeding with separate counsel and the Construction Manager shall pay the
fees and expenses of such separate counsel.
38
ARTICLE VIII
INSURANCE
8.1 Contractor's Insurance. The Construction Manager shall
cause both the Demolition Contractor and the General Contractor, except as
otherwise indicated, to purchase and maintain during the terms of the
Demolition Contract and the Construction Contract, respectively (except that
(x) the insurance referred to in Sections 8.1(b)(iii) and 8.1(d) below shall be
carried by the Demolition Contractor for an additional period of one year
following completion of work under the Demolition Contract and by the
Construction Contractor for an additional period of three years following
completion of work under the Construction Contract and (y) either (A) the
insurance referred to in Section 8.1(f) below shall contain a three-year
discovery period from the date of completion of the demolition of the Existing
Improvements or (B) the Demolition Contractor shall carry, and continue to
provide evidence of, completed operations coverage with respect to pollution
liability insurance for a period of three years from the date of the completion
of the demolition of the Existing Improvements), the following insurance
coverages:
(a) Workers compensation and employers' liability insurance
as required by Hawaii law or the laws of other applicable
jurisdictions, with statutory limits for workers' compensation
insurance and limits for employers' liability insurance of:
$1,000,000 each accident; $1,000,000 disease - policy limits; and
$1,000,000 disease - each employee. Further, such policy shall
contain a waiver of subrogation in favor of the Developer, the Ground
Lessors, the Construction Manager, the Lessor, the Trustee and the
Administrative Agent (the "Participants"). Alternatively, the
Demolition Contractor and the General Contractor may be "qualified"
self-insurers in the State of Hawaii.
(b) Commercial general liability insurance on an
"occurrence" form, which shall include coverage for (i) premises-
operations, (ii) independent contractors, (iii) products and completed
operations, (iv) broad form property damage, (v) blanket contractual
liability, (vi) personal and advertising injury, (vii) employees named
as additional insureds, (viii) demolition, explosion, collapse, (ix)
underground property damage, and (x) severability of interest. The
limits for such coverage shall be (A) bodily injury and property
damage combined single limit: $1,000,000 per occurrence; $2,000,000
general aggregate; and $2,000,000 products-completed operations
aggregate; and (B) personal injury limit: $1,000,000 per occurrence;
$2,000,000 general aggregate; and a self-insured retention of no
greater than $2,000,000. Such policy shall also be specifically
endorsed to provide that the policy
39
shall be considered to be primary insurance which shall apply to any
loss or claim before any contribution by any insurance which any of
the Participants may have in force; and shall name each of the
Participants as an additional insured; and further it shall contain a
waiver of subrogation clause with respect to each of the Participants.
Such policy shall also contain a provision that the general aggregate
limit thereunder applies exclusively to the demolition of the Existing
Improvements or the construction of the Building, as the case may be.
(c) Automobile liability insurance for all owned,
non-owned and hired autos and automobile contractual liability, which
contains limits of: $1,000,000 per person/$1,000,000 per
accident-bodily injury; $1,000,000 per accident-property damage; and
basic no fault coverage as required by Hawaii law.
(d) Umbrella or excess liability insurance which shall be
excess over the commercial general liability, automobile liability and
employers' liability. Such policy shall be written on an "occurrence"
form with a limit of liability of $10,000,000 during the term of the
Demolition Contract and $50,000,000 during the term of the
Construction Contract. Such policy shall also be specifically
endorsed to provide that it shall be considered to be part of an
unbroken chain of primary and excess liability insurance which shall
apply to any loss or claim before any contribution by any insurance
which any of the Participants may have in force. Such policy shall
also contain a clause specifically naming each of the Participants as
an additional insured. Such policy shall also contain a waiver of
subrogation clause which states that the insured waives any right of
recovery they may have against any of the Participants because of
payments made under such policy. If such policy contains an "insured
vs. insured" exclusion, the policy must state that it applies only to
the "named insured" or "insured persons" not "additional insureds."
(e) Asbestos abatement liability insurance must be
carried by the Demolition Contractor. Such policy shall be written on
an "occurrence" form and shall include coverage for (i) operations
including removal and disposal, (ii) independent contractors, (iii)
completed operations, (iv) broad form property damage, (v) contractual
liability, (vi) personal injury or death, (vii) employees named as
additional insureds, and (viii) transportation to the disposal site.
The limits of such policy shall be $5,000,000 for bodily injury and
property damage combined single limit each occurrence and project
aggregate. Such policy shall name FH Center, Inc.; and Lessee shall
use best efforts to promptly after the date hereof have the Lessor
also named as an additional insured, and the Construction Manager as
additional insureds. The policy shall also
40
contain a waiver of subrogation for FH Center, Inc. and the
Construction Manager; and Lessee shall use best efforts to promptly
after the date hereof obtain a waiver of subrogation for the Lessor.
(f) Pollution liability insurance shall be carried by the
Demolition Contractor. Such policy shall be written on a claims-made
form which shall include coverage for bodily injury and property
damage (defined to include loss of use of undamaged property and
clean-up or response costs). The limit of such policy shall be
$5,000,000 each loss; $5,000,000 project aggregate. Any self-insured
retention on such policy shall not exceed $500,000. Each of the
Participants shall be a named insured; provided, however, that with
respect to coverage for transportation of PCB's, the coverage shall be
$1,000,000 combined single limit bodily injury and property damage
insurance and shall name the Developer, FH Center, Inc., the
Construction Manager and the Lessor as an additional insured.
8.2 Property Insurance. (a) At all times during which work
is being performed under, or Disbursement Requests are being made in respect
of, the Construction Contract, the Construction Manager shall maintain property
insurance in the amount of $93,510,951 (or, if the Construction Contract is
converted to a lump sum contract in accordance with Section 2.4(a)(iii) hereof,
the lump sum payable under the Construction Contract) (plus any Project Costs
Increases for which the Construction Manager is required to make deposits in
accordance with Section 3.2(a)(ii) hereof) on a replacement basis. Such
property insurance shall be a builder's risk policy form written on an I.S.O.
standard "broad" causes of loss form as filed with the Hawaii Insurance
Commissioner or equivalent coverage, including (unless such coverage is not
commonly maintained with respect to similar properties or is prohibitively
expensive) earthquake, volcanic activity, windstorm and flood, and shall insure
against perils of direct physical loss to the work including loss occasioned by
fire, lightning, vandalism, malicious mischief and collapse. The policy shall
also include coverage for debris removal and reasonable compensation for
architect's services and expenses required as a result of such insured loss.
(b) The Construction Manager shall purchase and maintain
boiler and machinery insurance which shall specifically cover such insured
objects during installation and until final acceptance by the Construction
Manager.
(c) The builder's risk property insurance will be written
with a deductible not to exceed $500,000 to apply to damage occasioned by all
perils of loss covered in the property insurance; provided, however, that the
deductible for wind, earthquake and flood losses may exceed $500,000 but will
not exceed 5% of the estimated total completed value of the Building.
41
(d) The property insurance maintained by the Construction
Manager (or the property insurance maintained by the General Contractor) shall
cover building materials for which disbursement has been made and which are (i)
not yet installed but intended for use in the construction of the Building and
stored on the Land, (ii) stored at other sites or (iii) in transit, other than
ocean transit. The insurance will not cover any General Contractor's equipment
including cranes or the tools owned by the General Contractor or any
subcontractors stored at the job site or any other location.
8.3 Coverage. (a) The builder's risk property insurance
required by this Agreement shall be maintained with insurance companies that
may lawfully conduct insurance business in the State of Hawaii and that have a
"Best's" rating of not less than A-/X. If the above-stated rating system is
changed or terminated, the A-/X rating will be adjusted by the Construction
Manager to a comparable rating, as established by an Officer's Certificate of
the Construction Manager. Further, in the event that the rating of the Notes
from S&P or Moody's is at any time less than "BBB" or "Baa2", respectively,
then the Construction Manager will be required to either (i) maintain the
builder's risk property insurance with an insurer which has, or whose parent
corporation has, a "claims paying ability" rating from S&P and Moody's of at
least "BBB" and "Baa2", respectively, or (ii) provide additional credit
support for the obligations of the insurer which provides the builder's risk
property insurance in order to ensure that such obligations are equivalent to
the obligations of an entity whose "claims paying ability" ratings from S&P and
Moody's are at least "BBB" and "Baa2", respectively.
(b) The Construction Manager shall furnish the Lessor and the
Trustee with certificates showing the insurance required under Sections 8.1 and
8.2 to be in effect and naming each of the Participants as an additional
insured. All such insurance shall be at the cost and expense of the
Construction Manager, the Demolition Contractor or the General Contractor.
Such certificates shall include a provision for thirty (30) days' advance
written notice by the insurer to the Lessor and the Trustee in the event of
cancellation of such insurance. If an Event of Default shall have occurred and
is continuing and the Lessor so requests, the Construction Manger shall
deliver, or cause to be delivered, to the Lessor copies of all insurance
policies required by Sections 8.1 and 8.2.
(c) All insurance policies required by subsection 8.2 shall
include a "New York" or standard form mortgagee endorsement in favor of the
Trustee.
(d) Neither the Lessor nor the Construction Manager shall
carry separate insurance concurrent in kind or form or contributing in the
event of loss with any insurance required under this Article VIII except that
the Construction Manager and the Lessor may carry separate liability insurance
so long as
42
(i) the Construction Manager's insurance is designated as primary and in no
event excess or contributory to any insurance the Lessor may have in force
which would apply to a loss covered under the Construction Manager's policy and
(ii) the policy will not cause the Construction Manager's insurance required
under this Article VIII to be subject to a co-insurance exception of any kind.
ARTICLE IX
LESSOR'S RIGHTS; CONSTRUCTION MANAGER'S RIGHTS
9.1 Exercise of the Lessor's Rights. Subject to the Excepted
Rights and the Excepted Payments, the Lessor and the Construction Manager
hereby acknowledge and agree that, subject to and in accordance with Section
909 of the Indenture, the rights and powers of the Lessor under this Agreement
have been assigned to the Trustee for the benefit of the Holders. The
Construction Manager and the Lessor further acknowledge and agree that the
Trustee shall have the right to rely on the Construction Consultant in
connection with exercising any such right or power and shall not object to any
decision made by the Trustee on the basis of the Trustee's reliance on the
advice of the Construction Consultant.
9.2 Lease Obligations. Notwithstanding anything contained
herein or in the Master Lease to the contrary and to the extent not paid or
satisfied out of funds deposited in the Construction Account, prior to the
Final Substantial Completion Date, the Construction Manager shall perform or
cause to be performed all of Lessee's obligations regarding (a) Additional
Charges with respect to the Property pursuant to Section 3.3 of the Master
Lease, (b) payment of taxes, utility and related charges pursuant to Article IV
of the Master Lease, (c) maintenance and repair of the Property pursuant to
Section 10.1 of the Master Lease, (d) the maintenance of title to the Property
pursuant to Section 12.1(a) of the Master Lease, (e) compliance with all laws
and insurance requirements pursuant to Section 9.1 of the Master Lease and (f)
payments by Lessee to Lessor with respect to Lessor's right to cure defaults
pursuant to Section 18.1 of the Master Lease; provided, that nothing in this
Section shall in any way relieve the Lessee from any of its obligations under
the Master Lease.
9.3 Lessor's Right to Cure Construction Manager's Defaults.
The Lessor, without waiving or releasing any obligation or Event of Default,
may (but shall be under no obligation to) remedy any Event of Default for the
account of and at the sole cost and expense of the Construction Manager. All
out of pocket costs and expenses so incurred (including fees and expenses of
counsel), together with interest thereon at the Lessor Overdue Rate from the
date on which such sums or expenses
43
are paid by the Lessor, shall be paid by the Construction Manager to the Lessor
on demand.
ARTICLE X
MISCELLANEOUS
10.1 Notices. All notices, requests and demands to or upon
the parties hereto to be effective shall be in writing (including by facsimile
transmission), and, unless otherwise expressly provided herein, shall be deemed
to have been duly given or made when actually delivered or, in the case of
notice by facsimile transmission, when received and telephonically confirmed,
addressed as follows, or to such address as may be hereafter notified in
writing by the parties hereto:
If to the Lessor: REFIRST, Inc. 1900 Indian Wood Circle
Maumee, Ohio 43537
Attention: Vice President - First
Hawaiian Bank Transaction
with a copy to: REFIRST, Inc.
1209 Orange Street
Wilmington, Delaware 19801
Attention: Mark A. Ferrucci
If to the
Construction Manager: First Hawaiian Bank
1132 Bishop Street
Suite 2500
Honolulu, Hawaii 96813
Attention: Howard H. Karr
If to the Trustee: First Fidelity Bank, N.A., Pennsylvania
123 South Broad Street
Philadelphia, Pennsylvania 19109
Attention: Corporate Trust
Administration
10.2 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the Lessor, the Construction Manager, the
Trustee, and their respective successors and assigns.
10.3 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
10.4 Consent To Jurisdiction. (a) Each of the Lessor, the
Construction Manager and the Trustee agrees that any
44
legal suit, action or proceeding arising out of or based upon this Agreement
may be instituted in any state or Federal court in New York County, New York,
and waives, to the extent it may effectively do so, any objection which it may
have now or hereafter to the laying of the venue of any such suit, action or
proceeding, and irrevocably submits to the jurisdiction of any such court in
any such suit, action or proceeding.
(b) The Lessor hereby (i) irrevocably designates, appoints
and empowers CT Corporation System, 1633 Broadway, New York, New York 10019 as
its agent to receive for and on its behalf service of process in said County in
any such suit, action or proceeding, (ii) agrees that (x) service of any and
all process which may be served in any such suit, action or proceeding in any
such court may be made by (1) service on such agent, with a copy to the Lessor
at the address set forth in Section 10.1 of this Agreement or (2) mailing by
registered or certified mail, postage prepaid, return receipt requested, to
such address, (y) either of (1) or (2) above shall be deemed in every respect
effective service of process upon the Lessor in any such suit, action or
proceeding and shall be taken and held to be valid personal service upon the
Lessor, whether or not Lessor shall then be doing, or at any time shall have
done, business within the State of New York, and (z) any such service of
process shall be of the same force and validity as if service were made upon it
according to the laws governing the validity and requirements of such service
in such State, and waives all claim or error by reason of any such service.
(c) The Construction Manager hereby (i) irrevocably
designates, appoints and empowers CT Corporation System, 1633 Broadway, New
York, New York 10019 as its agent to receive for and on its behalf service of
process in said County in any such suit, action or proceeding, (ii) agrees that
(x) service of any and all process which may be served in any such suit, action
or proceeding in any such court may be made by (1) service on such agent, with
a copy to the Construction Manager at the address set forth in Section 10.1 of
this Agreement or (2) mailing by registered or certified mail, postage prepaid,
return receipt requested, to such address, (y) either of (1) or (2) above shall
be deemed in every respect effective service of process upon the Construction
Manager in any such suit, action or proceeding and shall be taken and held to
be valid personal service upon the Construction Manager, whether or not the
Construction Manager shall then be doing, or at any time shall have done,
business within the State of New York, and (z) any such service of process
shall be of the same force and validity as if service were made upon it
according to the laws governing the validity and requirements of such service
in such State, and waives all claim or error by reason of any such service.
(d) The Lessor and the Construction Manager each agree to
take all action as may be necessary to continue the designation and appointment
of the above-specified agents (or a
45
replacement agent) so that each of the Lessor and the Construction Manager
shall at all times have an agent for service of process for the above purpose
in the County designated above in this Section.
(e) Notwithstanding the foregoing, nothing contained herein
shall affect the right of any party hereto to serve process in any other manner
permitted by law or to commence legal proceedings or otherwise proceed against
any other party hereto in any other jurisdiction in which such other party may
be subject to suit. Each of the Lessor, the Construction Manager and the
Trustee agrees that final judgment (i.e., no longer appealable) in any such
action or proceeding shall be conclusive and, to the extent permitted by
applicable law, enforceable in any other jurisdiction by suit thereon, and that
such party shall institute no proceedings or take any action inconsistent with
the intent of the parties that such legal suit, action or proceeding arising
out of or based upon this Agreement, shall have the venue and governing law set
forth in this Agreement.
10.5 Amendments and Waivers. The Lessor, the Construction
Manager and the Trustee may from time to time, enter into written amendments,
supplements or modifications hereto.
10.6 Counterparts. This Agreement may be executed on any
number of separate counterparts and all of said counterparts taken together
shall be deemed to constitute one and the same instrument.
10.7 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.8 Integration. This Agreement, the Participation
Agreement and the Leased Improvements Construction Agreement represent the
entire agreement of the Lessor, the Construction Manager and the Trustee with
respect to the demolition of the Existing Improvements and the development and
construction of the Building on the Land, and there are no promises,
undertakings, representations or warranties by the Lessor, the Construction
Manager or the Trustee relative to the subject matter hereof which are not
expressly set forth or referred to herein or therein.
10.9 Headings and Table of Contents. The headings and table
of contents contained in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning hereof.
46
10.10 Security Agreement and Financing Statement Under
Uniform Commercial Code. This Agreement shall constitute a security agreement
and financing statement under the Uniform Commercial Code, as enacted in the
State of New York; and the Construction Manager, as debtor, hereby grants to
the Lessor, as secured party, a security interest in any or all of the Project
Contracts. The Construction Manager and any permitted assignee of the
Construction Manager will assist in the preparation of and execute from time to
time, alone or with the Lessor, and deliver, file and record any financing or
continuation statements, mortgages or other instruments, and do such further
acts as the Lessor may request to establish, maintain and perfect the security
interest of the Lessor in the Project Contracts and the Construction Account,
and all renewals, additions, substitutions, improvements to the same and the
proceeds thereof, and otherwise to protect the same against the rights and
interests of third parties. The terms of this Agreement shall be deemed
commercially reasonable within the meaning of the Uniform Commercial Code, as
enacted in the State of New York.
10.11 Directions of the Lessor. The Lessor hereby
acknowledges and agrees that each of the Construction Manager, the Construction
Consultant and the Trustee may, in the absence of bad faith on their respective
parts, conclusively rely upon, and in all events shall be fully protected in
relying upon, any document, instrument, certificate, opinion or direction
furnished to any of them by the Administrative Agent and otherwise conforming
to the requirements of any applicable Operative Agreement, and the Construction
Manager, the Trustee and the Construction Consultant may treat any such
document, instrument, certificate, opinion or direction as the document,
instrument, certificate, opinion or direction of the Lessor.
10.12 Liabilities and Rights of the Trustee. The Trustee is
entering into this Agreement in its capacity as Trustee under the Indenture,
and all of the rights, immunities, indemnities, and protections of the Trustee
set forth in Article Six under the Indenture shall inure to the benefit of the
Trustee hereunder. In all events, the Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer, unless it shall
be proved that the Trustee was negligent in ascertaining the pertinent facts.
10.13 Obligations Absolute and Unconditional. The
Construction Manager's obligations to make payments under this Agreement shall
be absolute and unconditional and such payments shall be made without any
abatement, suspension, deferment, reduction, setoff, counterclaim or defense
whatsoever.
47
IN WITNESS WHEREOF, the parties hereto have caused this
Construction Management, Escrow and Development Agreement to be duly executed
and delivered by their proper and duly authorized officers as of the day and
year first above written.
REFIRST, INC.
By: /s/ Paul J. Bishop
-----------------------------
Name: Paul J. Bishop
Title: President
FIRST HAWAIIAN BANK
By: /s/ Thomas P. Huber
-----------------------------
Name: Thomas P. Huber
Title: Senior Vice President
FIRST FIDELITY BANK, N.A., PENNSYLVANIA
By: /s/ John H. Clapham
-------------------------------
Name: John H. Clapham
Title: First Vice President
48
Schedule 1
Default Amount
[Download Table]
Payment Date Amount
------------------- --------------
June 1, 1994 194,000,000.00
December 1, 1994 193,862,187.50
June 1, 1995 193,862,187.50
December 1, 1995 193,724,375.00
June 1, 1996 193,724,375.00
December 1, 1996 193,699,875.00
Schedule 2
Essential Design Elements
The size of the lot area (55,775 square feet)
The height of the Building (428 feet, including a 35-foot mechanical penthouse)
The number of office floors (27)
The gross building area (418,313 square feet), plus or minus a variance of 5%
The rentable building area (380,000 square feet), plus or minus a variance
of 5%.
700 parking spaces, plus or minus a variance of 5%
The size of the average typical floor plate is 14,066 gross square feet at the
16th floor. Note: Because of the configuration of the Building, the floor
plate varies from floor to floor
The configuration of the exterior building envelope, including the tower and
three-story podium
The area of the below-grade structure (278,875 square feet), plus or minus a
variance of 5%
The size of the First Hawaiian Banking Hall and Contemporary Art Museum at the
ground floor (10,000 square feet), plus or minus a variance of 5%
The size and configuration of the public open space at grade (24,000 square
feet), plus or minus a variance of 5%
The Bankers Club Private Dining facility
The size of the Health Club facility (5,451 gross square feet), plus or minus
a variance of 5%
the vertical transportation configuration (3 garage, 5 low-rise, 1 service,
1 main branch and 4 outside high-rise elevators)
SCHEDULE 4 OMITTED
[Enlarge/Download Table]
SCHEDULE S
First Hawaiian Center
Consolidated Cashflow
November 16, 1993
Line Item Description 11/16/93
Budget
1.0 Building Construction $93,510,951
2.0 Demolition $5,000,000
3.0 Special Building Features
3.1 Bankers Club F F & E 2,750,000
3.2 Athletic Club F F & E 793,000
3.3 Public Space F F & E 60,000
3.4 Art 481,000
Special Features Subtotal $4,084,000
4.0 Tenant Improvement Allowance/Incentives
4.1 Base Building Tenant Improvements 14,779,000
4.2 Incentives 2,986,000
4.3 FHB TI (In Excess of Allowance)
4.1.1 Main Branch 2,333,000
4.1.2 Staff Dining 1,100,000
4.1.3 Executive Floors 3,360,000
4.1.4 Administrative Offices 1,269,000
Tenant Improvement Allowance/Incentive Subtotal $25,827,000
5.0 Soft Costs:
5.1 Due Diligence
5.1.1 Soils Analysis 74,000
5.1.2 Topographic & ALTA Surveys 10,000
5.2 Permits and Fees
5.2.1 Demolition/Building Permit 144,000
5.2.2 Water Fees 200,000
5.2.3 Sewer Fees 150,000
5.3 Design Fees
5.3.1 Architect, Electrical, Mechanical, Structural 4,923,000
5.3.2 Architect Site Representative 466,000
5.3.3 Banking Hall Programming 42,000
5.3.4 Civil Engineer 172,000
5.3.5 Traffic Engineer 20,000
5.3.6 Soils Engineer/Analysis 100,000
5.3.7 Hazardous Waste 115,000
5.3.8 Acoustical Engineer 16,000
5.3.9 Landscape Architect 145,000
5.3.10 Vertical Transportation 56,000
5.3.11 Parking Consultant 8,000
5.3.12 Curtainwall Consultant 150,000
5.3.13 Wind Tunnel Testing Consultant 58,000
5.3.14 Lighting Consultant 56,000
5.3.15 Water Features Consultant 121,000
5.3.16 Tele/Data Communications Consultant 38,000
5.3.17 Security Consultant 82,000
5.3.18 Waterproofing Consultant 45,000
5.3.19 Building Graphic Consultant 46,500
[Enlarge/Download Table]
5.3.20 Kitchen Consultant 50,500
5.3.21 Specialty Glass Consultant 178,000
5.3.22 Stone Consultants 106,000
5.3.23 Electronic Consultant 47,000
5.3.24 Special Building Features
5.3.24.1 Bankers Center 300,000
5.3.24.2 Health Club 82,000
5.3.24.3 Banking Hall/Main Branch (2nd & 3rd) 355,000
5.3.24.4 FHB Staff Dining 171,000
5.3.24.5 FHB Administrative Offices 66,000
5.3.25 Consultant Reimbursables 1,300,000
5.4 Testing and Inspection 420,000
5.5 Marketing
5.5.1 Public Relations 150,000
5.5.2 Scale Model 176,000
5.5.3 Architectural Renderings 30,000
5.5.4 Market Analysis 214,000
5.5.5 Collateral 132,000
5.5.6 Tenant Programming/Space Planning 112,000
5.5.7 Tenant Work Letter 56,000
5.5.8 "History of Bishop Street" Book 150,000
5.6 Project Administration
5.6.1 Photography 40,000
5.6.2 Legal
5.6.2.1 Due Diligence 50,000
5.6.2.2 Contracts, Gen'l Conditions & Sec. 106 600,000
5.6.2.3 Tenant Work Letter Legal 60,000
5.6.3 Appraisals 40,000
5.6.4 Accounting 30,000
5.6.5 TMC Development Management 9,999,820
5.6.6 TMC Reimbursables 430,000
5.6.7 FHB Reimbursables 240,000
5.7 Insurance 1,240,000
5.8 Property Taxes 2,100,000
Soft Costs Subtotal $26,162,820
6.0 Financing Costs:
6.1 Title Insurance 150,000
6.2 Legal 3,000,000
6.3 Accounting 30,000
6.4 Transaction Fee 1,940,000
6.5 Moody's Fee 74,000
6.6 Standard & Poor's Fee 92,000
6.7 Printing 35,000
6.8 Trustee Fee 30,000
6.9 Reimbursables 30,000
8.10 Conveyance Tax 38,000
8.11 Construction Consultant 216,000
8.12 Rating Agencies Annual Fees 39,888
8.13 Trustee's Annual Fees 55,704
8.14 Mortgage Recordation Tax 360,000
Financing Costs Subtotal $6,090,592
[Enlarge/Download Table]
7.0 Project Contingency $6,135,444
Total Project Costs $166,810,807
Projected Cumulative Outflow
Actual Cumulative Outflow $166,832,193
8.0 Interest
8.1 Interest: Purchase Stripped Treasuries 37,748,000
8.2 Projected Swap Income (10,580,193)
Interest Expense Subtotal $27,167,807
Grand Total Project Costs $193,978,614
Projected Cumulative Outflow
Actual Cumulative Outflow $194,000,000
EXHIBIT A
First Hawaiian Center
Building Construction Categories
[Download Table]
Division 1 GENERAL CONDITIONS 7,944,725
Division 2 SITEWORK 10,452,645
02050 Demolition and Removal
02140 Dewatering
02150 Permanent Prestressed Tock Anchors
02200 Earthwork (including shoring system)
02280 Soil Treatment and Subterranean Termite Control
02400 Storm Drainage System
02500 Paving and Surfacing
02501 Pavement Marking and Signage
02510 Concrete Sidewalks, Curbs and Gutters
02515 Precast Concrete Pavers
02517 Stone Paving/Feature Stone
02718 Water System
02722 Sanitary Sewer System
02810 Landscape Irrigation System
02900 Landscaping
Division 3 CONCRETE 16,344,068
03100 Concrete Formwork
03200 Concrete Reinforcement
03250 Waterstop
03300 Cast in Place Concrete
03345 Cementitious Crystalline Waterproofing
Division 4 MASONRY 1,506,830
04220 Concrete Masonry Unit
04400 Exterior Hand Set Stone Cladding
04401 Interior Stone Cladding
04402 Stone Counters
Division 5 METALS 9,644,049
05120 Structural Steel
05300 Metal Decking
05500 Miscellaneous Metals
05510 Metal Stairs
05700 Ornamental Metals/Metal Ceilings
Division 6 WOOD AND PLASTICS 158,131
06200 Carpentry
06400 Architectural Woodwork
06600 Fiberglass Reinforced Fabrication
[Download Table]
Division 7 THERMAL & MOISTURE 2,723,481
07110 Exterior Concrete Elastomeric Waterproofing
07120 Fluid Applied Membrane Waterproofing
07136 Composits Bentonite Waterproofing System
07200 Building Insulation
07253 Sprayed-on Fireproofing
07271 Firestops and Smokeseals
07552 Fluid Applied Protected Membrane Roofing
07575 Fluid Applied Membranes
07579 Penetrating Sealers for Concrete
07600 Sheet Metal Work
07700 Roof Specialties and Accessories
07900 Joint Sealers
07910 Miscellaneous Joint Fillers
Division 8 DOORS AND WINDOWS 14,958,466
08100 Metal Doors and Frames
08200 Wood Doors
08300 Access Doors
08330 Roll Up doors
08340 Roll Up Grilles
08411 Glazed Entrances and Storefronts
08700 Finish Hardware
08800 Miscellaneous Glass and Glazing
08900 Glazed Curtainwall (Includes Assoc. Stone Cladding)
08910 Art Glass Wall
Division 9 FINISHES 7,243,326
09200 Lathing and Plastering
09250 Gypsum Drywall
09310 Tile Work
09510 Acoustic Panel Ceilings
09600 Stone Flooring
09660 Resilient Tile Flooring
09685 Carpeting (Tackless)
09900 Painting and Finishing
Division 10 SPECIALTIES 783,464
10160 Ceiling Mounted Toilet Partitions
10200 Aluminum Louvers
10400 Identifying Devices
10522 Fire Extinguishers and Cabinets
10800 Toilet Accessories
Division 11 EQUIPMENT 65,454
11012 Window Washing Equipment
11150 Parking Control Equipment
11160 Loading Dock Equipment
Division 13 SPECIAL CONSTRUCTION 520,657
13150 Electrical: Fountains and Waterways
13151 Plumbing: Fountains and Waterways
Division 14 CONVEYING SYSTEM 4,185,088
14100 Dumb Waiter
[Download Table]
14200 Elevators (Include Cab Finish)
Division 15 MECHANICAL 6,421,928
15060 Piping and Accessories (Includes valves)
15160 Pumps
15240 Sound Vibration and Siesmis Control
15250 Mechanical Insulation
15320 Fire Pump System
15330 Wet Pipe Sprinkler & Dry Standpipe System
15400 Plumbing
15440 Plumbing Fixtures
15611 Fuel System
15655 Packaged Cooling System
15680 Water Chillers
15710 Cooling Towers
15720 Water Treatment
15850 Air Handling Equipment
15870 Dampers
15880 Air Distribution
Section 16 ELECTRICAL 3,860,595
16050 Electrical: Basic Materials and Methods
16400 Electrical: Service and Distribution
16500 Luminaires
16612 Diesel Engine Standby Power Plant
16720 Fire Alarm and Detection System
Division 17 SECURITY 347,104
17200 Point Monitoring & Access Control System (PMAC)
17200 Closed Circuit Television (CCTV)
17200 Intercom
17200 Console Construction
17200 Wires & Cables
Division 18 BUILDING AUTOMATION SYSTEM 842,968
18050 Building Automation System
PERFORMANCE BOND 541,483
CONTRACTOR'S FEE 4,428,080
G.I. TAX @ 4.17% 538,508
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TOTAL 93,510,951
SCHEDULE 6 OMITTED
SCHEDULE 7 OMITTED
SCHEDULE 8 OMITTED
SCHEDULE 9 OMITTED
SCHEDULE 10
Termination Amount
[Download Table]
Payment Date Amount
------------------ ---------------
June 1, 1994 194,000,000.00
December 1, 1994 193,862,187.50
June 1, 1995 193,862,187.50
December 1, 1995 193,724,375.00
June 1, 1996 193,724,375.00
December 1, 1996 193,699,875.00
SCHEDULE 11 OMITTED
SCHEDULE 12 OMITTED
SCHEDULE 13
Assumed Earnings on Construction Account
[Download Table]
January 1, 1994 $490,854
February 1, 1994 483,848
March 1, 1994 470,923
April 1, 1994 465,996
May 1, 1994 459,198
June 1, 1994 453,386
July 1, 1994 447,672
August 1, 1994 439,165
September 1, 1994 431,873
October 1, 1994 423,160
November 1, 1994 414,416
December 1, 1994 403,812
January 1, 1995 393,204
February 1, 1995 381,711
March 1, 1995 367,434
April 1, 1995 355,044
May 1, 1995 342,576
June 1, 1995 327,504
July 1, 1995 313,291
August 1, 1995 296,096
September 1, 1995 280,060
October 1, 1995 265,688
November 1, 1995 251,204
December 1, 1995 236,768
January 1, 1996 223,868
February 1, 1996 209,866
March 1, 1996 197,997
April 1, 1996 186,838
May 1, 1996 173,529
June 1, 1996 159,431
July 1, 1996 140,783
August 1, 1996 120,639
September 1, 1996 99,037
October 1, 1996 78,321
November 1, 1996 57,486
December 1, 1996 39,521
| EX-10.(IV) | Last Page of 71 | TOC | 1st | Previous | Next | ↓Bottom | Just 71st |
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SCHEDULE 14 OMITTED
Dates Referenced Herein and Documents Incorporated by Reference
| Referenced-On Page |
|---|
| This ‘10-K’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| | 12/1/03 | | 23 | | 24 |
| | 6/1/99 | | 12 |
| | 2/1/99 | | 12 |
| | 10/1/98 | | 12 |
| | 10/1/97 | | 12 |
| Filed on: | | 3/31/94 | | | | | | | 10-Q |
| | 1/1/94 | | 70 |
| For Period End: | | 12/31/93 |
| | 12/1/93 | | 1 | | 6 |
| | 11/19/93 | | 12 |
| | 11/16/93 | | 57 |
| | 11/2/93 | | 8 |
| | 9/7/93 | | 13 |
| | 6/3/93 | | 9 |
| | 12/28/92 | | 9 |
| List all Filings |
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