EXHIBIT 10.52.9
June 6, 2002
Globe Telecommunications, Inc.
Interstate Telephone Company
Valley Telephone Co., Inc.
0000 X.X. Xxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
Re: Consent, Waiver and Amendments
Ladies and Gentlemen:
Reference is made to (i) the Master Loan Agreement, dated as of June 29,
2001, between CoBank, ACB ("CoBank") and Globe Telecommunications, Inc.
("Globe"), Interstate Telephone Company ("Interstate") and Valley Telephone Co.,
Inc. ("Valley," together with Globe and Interstate, the "Borrowers") (as the
same may be amended, restated, modified, supplemented or extended from time to
time, the "MLA"), and (ii) the First Supplement to the Master Loan Agreement,
dated as of June 29, 2001, between CoBank and Borrowers (as the same may be
amended, restated, modified, supplemented or extended from time to time, the
"First Supplement," together with the MLA, the "Loan Agreement"). Capitalized
terms used and not defined herein shall have the meanings assigned to them in
the Loan Agreement.
Consent, Waiver and Amendment to Loans and Investments Covenant
Pursuant to Subsection 8(E) of the MLA, Borrowers have covenanted that they
will not and will not permit any of their Restricted Subsidiaries, directly or
indirectly, to make any Investment except as expressly permitted in Subsection
8(E). Subsection 8(E)(iv) permits purchases, from time to time, by Valley, of
the Notes, issued by Knology Broadband, Inc., in an amount not to exceed
$40,000,000 in the aggregate; provided, however, such Notes must be held in an
investment account which is pledged to CoBank, on a first-priority basis,
pursuant to an Investment Account Pledge Agreement. The Borrowers have requested
CoBank to (i) consent to the discharge and release by Valley of the Notes
purchased by Valley prior to the date hereof, the aggregate value of such
discharged and released Notes not to exceed $22,800,000, (ii) release and
discharge any lien or security interest that CoBank may have in such Notes, and
(iii) waive the Event of Default arising under the Loan Agreement in connection
the purchase of the Notes by Valley and the subsequent failure to enter into an
Investment Account Pledge Agreement. In reliance on the representations and
warranties provided by the Borrowers to CoBank set forth in this letter
agreement and in connection with this request, and subject to the satisfaction
by the Borrowers or waiver by CoBank of the conditions precedent set forth
below, CoBank hereby (i) consents to the discharge and release by Valley of the
Notes purchased by Valley prior to the date hereof, provided, the aggregate
value of such Notes shall not exceed $22,800,000, (ii) releases and discharges
any lien or security interest it may have in such Notes, (iii) waives the Event
of Default arising under the Loan Agreement in connection the purchase of the
Notes by Valley and its subsequent failure to enter into an Investment Account
Pledge Agreement, and (iv) amends the provisions of Subsection 8(E) of the MLA
to delete Subsection 8(E)(iv) in its entirety.
June 6, 2002
Page 2
Amendments to Dividends and Distributions Covenant
Subsection 8(H) of the MLA is hereby amended by deleting it in its entirety
and inserting in lieu thereof the following:
"(H) Dividends and Other Distributions. Except as provided for in
Subsection 2(i) of the First Supplement to the Master Loan Agreement, dated
as of even date herewith, between Borrowers and CoBank, provide, make,
declare or pay, directly or indirectly, any dividend or other distribution
of assets to shareholders, partners or members (as applicable) of such
Borrower, or retire, redeem, purchase or otherwise acquire for value any
capital stock or equity interests (as applicable) of such Borrower."
Conditions Precedent
The consent, waiver and amendments provided in this letter agreement are
subject to the satisfaction by Borrowers or waiver by CoBank of the following
conditions precedent:
(a) The execution and delivery of a continuing guaranty by each of Knology,
Inc., Knology Broadband, Inc. ("Broadband") and Knology of Knoxville for the
benefit of CoBank, in form and substance satisfactory to CoBank; provided, the
continuing guaranty of Broadband may be subordinate to the obligations and liens
of Broadband to Wachovia Bank, National Association, as agent for the lenders
under Broadband's senior secured indebtedness; and
(b) The execution and delivery of such security documents by Knology of
Knoxville as CoBank shall request, in form and substance satisfactory to CoBank,
pledging to CoBank a first-priority security interest in all assets, real and
personal, of Knology of Knoxville; and
(c) That CoBank receive such other documents, opinions or certificates,
including lien search results, as CoBank shall reasonably request in connection
with the consent, waiver and amendments hereunder.
(d) No Potential Default or Event of Default shall have occurred and be
continuing under any of the Loan Documents, which has not previously been
disclosed to and waived by CoBank, in writing.
(e) Borrowers shall reimburse CoBank promptly upon request for all
reasonable costs associated with the negotiation, execution, enforcement and
administration of this letter agreement, including, without limitation, all
reasonable inside and outside attorneys' fees and expenses incurred by CoBank.
(f) All representations and warranties by Borrowers herein shall be true
and correct as of the date hereof.
General
Except as expressly provided by this letter agreement, the terms and
provisions of the
June 6, 2002
Page 3
Loan Agreement and the other Loan Documents are hereby ratified and confirmed
and shall continue in full force and effect. By agreeing to this letter
agreement as acknowledged below, Borrowers, Guarantor (as defined on the
signature page below) and Pledgor (as defined on the signature page below)
hereby certify and warrant to CoBank that each of the representations and
warranties contained in the Loan Agreement and in the other Loan Documents are
true and correct as of the effective date of this letter agreement, including
that no Potential Default or Event of Default exists, with the same effect as
though made on such effective date (except to the extent any such representation
or warranty is expressly stated to have been made as of a specific date, in
which case such representations or warranty shall be true and correct as of such
specified date).
Without limiting any condition to effectiveness set forth above, the
consent, waiver and amendments provided or agreed to herein are to be effective
only upon receipt by CoBank of an execution counterpart of this letter agreement
signed by each of Borrowers, Guarantor and Pledgor; and such consent, waiver and
amendments are conditioned upon the correctness of all representations and
warranties made by each of Borrowers, Guarantor and Pledgor herein or as
provided to CoBank in connection with the request for consent, waiver and
amendments. The consent, waiver and amendments contained herein shall not
constitute a course of dealing between Borrowers, Guarantor, Pledgor and CoBank,
and shall not constitute a waiver, extension or forbearance of any Potential
Default or Event of Default, now or hereafter arising, except as described
herein, or a waiver of amendment of any provision of the Loan Agreement or the
other Loan Documents, except as described herein. This letter agreement shall be
governed by, construed and enforced in accordance with all provisions of the
Loan Agreement, and may be executed in multiple counterparts.
[Signatures begin on next page.]
June 6, 2002
Page 4
Please evidence your acknowledgment of and agreement to the foregoing by
executing this letter agreement in the place indicated below.
Sincerely,
COBANK, ACB
By:
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Xxxx Xxxxxxx, Vice President
Acknowledged and agreed to:
GLOBE TELECOMMUNICATIONS, INC., as a Borrower
By:
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Name:
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Title:
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INTERSTATE TELEPHONE COMPANY, as a Borrower
By:
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Name:
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Title:
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VALLEY TELEPHONE CO., INC., as a Borrower
By:
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Name:
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Title:
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ITC GLOBE, INC., as Guarantor
By:
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Name:
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Title:
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KNOLOGY, INC., as Pledgor
By:
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Name:
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Title:
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