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EXHIBIT 10.3
SECURED REVOLVING LINE OF CREDIT APPLICATION AND AGREEMENT
("AGREEMENT")
Name of Applicant: ILLUMINET, INC.
a Delaware corporation ("Applicant")
Address: 0000 Xxxxxxx Xxxx, X.X.
Xxxxxxx, XX 00000
Applicant hereby applies to Rural Telephone Finance Cooperative ("RTFC"), a
South Dakota cooperative association, for a revolving line of credit loan in an
amount not to exceed seven million three hundred thousand ($7,300,000).
Applicant hereby agrees that in the event RTFC approves this Agreement, the
terms and conditions herein and any additional terms and conditions as approved
by RTFC, and as agreed to in writing by Applicant, shall constitute a valid and
binding agreement between Applicant and RTFC. In consideration of their mutual
promises hereunder and other valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, RTFC and Applicant agree to the following terms
and conditions:
1. REVOLVING CREDIT AND TERM. Upon approval of this Agreement, RTFC agrees
to make advances to the Applicant pursuant to the terms of this
Agreement ("Advances") in the maximum amount specified above or such
lesser amount as may be approved by RTFC in accordance with the terms
and conditions hereof. Within such limits, the Applicant may borrow,
repay and reborrow at any time or from time to time for a period up to
sixty (60) months from the Effective Date (as defined herein) (the
"Maturity Date").
2. REQUISITIONS. The Applicant shall give RTFC such prior notice of
requests for Advances as RTFC may reasonably require from time to time.
3. INTEREST RATE AND PAYMENT. The Applicant unconditionally promises and
agrees to pay, as and when due, interest on all amounts advanced
hereunder from the date of each Advance and to repay all amounts
advanced hereunder with interest on the Maturity Date. Interest shall be
due and payable quarterly on the first day of each January, April, July
and October, commencing on the first such date after such initial
Advance; except that if RTFC gives notice thereof to the Applicant
before the first day of any month, interest shall thereafter be due and
payable on the 15th day of such month and each month thereafter. RTFC
shall invoice the Applicant at least five days prior to the due date of
any such interest payment. All amounts shall be payable at RTFC's main
office at Woodland Park, 0000 Xxxxxxxxxxx Xxx, Xxxxxxx, Xxxxxxxx
00000-0000 or at such other location as designated by RTFC from time to
time.
The interest rate on all Advances will be equal to the Prevailing Bank
Prime Rate (as defined herein), plus one and one-half percent per annum
or such lesser total rate per annum as may be fixed by RTFC from time to
time. Interest will be computed on the basis of a year of 365 days. The
interest rate will be adjusted as determined from time to time by RTFC,
provided that no such adjustment may be effective on a date other than
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the first or sixteenth day of any month, and will remain in effect until
a subsequent change in rate occurs.
The "Prevailing Bank Prime Rate" is that bank prime rate published in
the "Money Rates" column of any edition of The Wall Street Journal which
RTFC determines in its discretion to be the representative bank prime
rate on the day preceding the day on which an adjustment in the interest
rate hereof shall become effective. If such preceding day is not a
publication day for The Wall Street Journal then the Prevailing Bank
Prime Rate shall be established by reference to such "Money Rates"
column as of the last publication day next preceding the day on which
such adjustment shall become effective; provided if The Wall Street
Journal shall cease to be published, then the Prevailing Bank Prime Rate
shall be determined by RTFC, by reference to another publication
reporting bank prime rates in a similar manner.
4. RTFC ACCOUNTS. RTFC shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of the Applicant
resulting from each Advance made from - time to time and the amounts of
principal and interest payable and paid from time to time hereunder. In
any legal action or proceeding in respect of this Agreement, the entries
made in such account or accounts (whether stored on computer memory,
microfilm, invoices or otherwise) shall be presumptive evidence (absent
manifest error) of the existence and amounts of the Applicant's
transactions therein recorded.
5. CORPORATE AND REGULATORY APPROVALS. Applicant represents that it has
obtained any and all necessary corporate and regulatory approvals for
Applicant to execute and perform pursuant to this Agreement.
6. REPORTS. Applicant agrees to deliver to RTFC, promptly upon their
becoming available, a copy of (i) any annual report prepared subsequent
to the submission of this Agreement; (ii) its monthly operating report
within twenty (20) days for any month in which there are advances
outstanding pursuant to this Agreement; and (iii) any other reports
which RTFC reasonably requests during the term of this Agreement.
7. FEES. If any amount outstanding and due hereunder shall not be paid when
due, Applicant agrees to pay on demand RTFC's reasonable costs of
collection or enforcement of this Agreement, or preparation therefor,
including reasonable fees of counsel. If payment of any principal and/or
interest due under the terms of this Agreement is not received at RTFC's
office in Herndon, Virginia, or such other location designated by RTFC
within five (5) business days after the due date thereof (such unpaid
amount of principal and/or interest being herein called the "delinquent
amount," and the period beginning after such due date being herein
called the "late-payment period"), Applicant will pay to RTFC, on
demand, in addition to all other amounts due under the terms of this
Agreement, any late-payment charge as may then be in effect pursuant to
RTFC's policy on the delinquent amount for the late payment period.
8. LIMITATION ON ADVANCES. The amount of outstanding Advances hereunder in
any single calendar year may not at any one time exceed the amount
approved by RTFC.
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9. REDUCE BALANCE TO ZERO. In the event this Agreement is for a term of
more than 12 months, then within 360 days of the first Advance,
Applicant will reduce to zero for a period of at least five consecutive
business days, (the last day of such five day period being herein called
the "Zero Balance Date") amounts outstanding hereunder, and will reduce
to zero for a period of at least five consecutive business days (the
last day of such five business day period being called the "Subsequent
Zero Balance Date") amounts outstanding hereunder within 360 days from
the Zero Balance Date or Subsequent Zero Balance Date, as appropriate.
10. CREDIT SUPPORT. This Agreement may not be used as credit support for any
other financings without RTFC's prior written approval.
11. NOTICES, ACCELERATION OF DEBT AND WAIVERS. While any amount hereunder is
outstanding, Applicant agrees to notify RTFC of any delinquency or
default on any of its financial obligations, any material adverse change
in its financial or business condition and if any representation or
warranty made in this Agreement has become untrue in any respect having
a material adverse effect on the financial condition or business of the
Applicant. If any delinquency, default, or any other event as a result
of which any holder of indebtedness may declare the same due and payable
shall occur and continue for more than any applicable grace period, or
any representation or warranty herein shall become untrue in any
material respect, or Applicant shall fail to comply with any term of
this Agreement, or if the financial condition of Applicant shall have
changed to the extent that such change, in the reasonable judgment of
RTFC, materially increases RTFC's risk hereunder, then RTFC may declare
at any time all outstanding amounts hereunder immediately due and
payable in full with accrued interest, without presentment or demand,
and may withhold advances of funds. The Applicant waives the defense of
usury and all rights to setoff, counterclaim, deduction or recoupment.
12. PURPOSE, REPAYMENTS AND DEPOSIT. Applicant agrees that any and all
Advances hereunder will be used only for proper corporate purposes and
consistently with the requirements of outstanding security documents of
Applicant relating to its operations. Applicant agrees that this loan
shall be repayable out of Applicant's general funds and that loan
proceeds will not be deposited in Applicant's Trustee-Special
Construction Fund Account or any other account dedicated for secured
financing advances.
13. ADDITIONAL INDEBTEDNESS. While any amount hereunder is outstanding and
unless otherwise disclosed in writing to RTFC, Applicant agrees that it
will not, without prior written consent of RTFC, create, incur, assume,
guarantee or otherwise become obligated for any additional indebtedness,
other than to RTFC except that the Applicant may borrow against another
loan previously approved by RTFC.
14. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND PAYMENT OBLIGATIONS.
Applicant agrees that the representations and warranties made in this
Agreement shall survive the making of Advances hereunder. Any
unsatisfied payment obligation hereunder shall survive the maturity and
cancellation of this Agreement.
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15. REPRESENTATIONS AND WARRANTIES. Except as set forth in writing and
attached hereto, Applicant represents and warrants as of the date of its
application and on the date of each and every Advance hereunder that:
(a) The Applicant has and will meet all material obligations and be
in material compliance with all instruments under which it is
bound and that all information submitted in support of its
application is true, complete and correct in all material
respects;
(b) There has been no material adverse change in the Applicant's
business or financial condition from that set forth in its
audited financial statements;
(c) The Applicant has no outstanding loans from sources other than
RTFC;
(d) The Applicant is not in default in any material respect of any
of its obligations and no litigation is threatened or pending
which would have a material adverse impact on the Applicant's
ability to perform under this Agreement; and
(e) The Applicant has no lines of credit with any other lenders.
16. SUBMISSIONS. Applicant submits the following documents in support of
this Agreement (if not previously received by RTFC):
(a) The most recently prepared income statement and balance sheet
and all attachments thereto; and
(b) The income statement and balance sheet for each of the three
preceding calendar years; and
(c) Applicant's most recent annual audit report prepared by an
independent certified public accountant.
17. CONSENT TO PATRONAGE CAPITAL DISTRIBUTIONS. Applicant hereby consents
that the amount of any distributions with respect to Applicant's
patronage which are made in written notices of allocation (as defined in
Section 1388 of the Internal Revenue Code of 1986, as amended ("Code")
including any other comparable successor provision) and which are
received from RTFC will be taken into account by Applicant at their
stated dollar amounts in the manner provided in Section 1385(a) of the
Code in the taxable year in which such written notices of allocation are
received.
18. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF VIRGINIA.
19. SEVERABILITY. If any term, provision or condition, or any part thereof,
of this Agreement shall for any reason be found or held invalid or
unenforceable by any court or governmental agency of competent
jurisdiction, such invalidity or unenforceability shall not affect the
remainder of such term, provision or condition nor any other term,
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provision or condition, and this Agreement shall survive and be
construed as if such invalid or unenforceable term, provision or
condition had not been contained therein.
20. SETOFF. RTFC is hereby authorized at any time and from time to time
without prior notice to the Applicant to exercise rights of setoff or
recoupment and apply any and all amounts held, or hereafter held, by
RTFC or owed to the Applicant or for the credit or account of the
Applicant against any and all of the obligations of the Applicant now or
hereafter existing hereunder. RTFC agrees to notify the Applicant
promptly after any such setoff or recoupment and the application
thereof, provided that the failure to give such notice shall not affect
the validity of such setoff, recoupment or application. The rights of
RTFC under this section are in addition to any other rights and remedies
(including other rights of setoff or recoupment) which RTFC may have.
21. ADDITIONAL TERMS AND CONDITIONS. Additional terms and conditions set
forth herein or attached hereto are an integral part of this Agreement.
22. TERMINATION AND CANCELLATION OF EXISTING AGREEMENT. Applicant agrees to
the termination and cancellation of its existing revolving line of
credit with RTFC (#WA 812-S-01 & WA 800-S-01), if any, on the Effective
Date, in consideration of RTFC's approval of this Agreement, provided,
however, Applicant agrees that any unsatisfied payment obligation owed
pursuant to such lines of credit shall survive their termination and
cancellation.
23. INTEGRATION. This Agreement and the matters incorporated by reference
contain the entire agreement of the parties hereto with respect to the
matters covered and the transactions contemplated hereby, and no other
agreement, statement or promise made by any party hereto, or by any
employee, officer, agent or attorney of any party hereto, which is not
contained herein, shall be valid and binding. No amendment or waiver to
this Agreement shall be valid and binding except if in writing and
signed by both parties.
24. HEADINGS. The headings and sub-headings contained in this Agreement are
intended to be used for convenience only and do not constitute part of
this Agreement.
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(For RTFC Use Only)
ADDITIONAL TERMS AND CONDITIONS
1. All advances hereunder shall be secured pursuant to the Consolidated
Mortgage and Security Agreement by and between Applicant and RTFC dated
as of even date herewith. ("Mortgage") and the obligation of Applicant
to repay Advances hereunder shall be deemed an "Additional Note" secured
by the Mortgage.
2. The total principal balance outstanding on this secured line of credit
shall not exceed the lesser of 80% of the value of Borrower's prevailing
accounts receivable of $7,300,000.
3. Each request for advance from this line of credit must be submitted to
RTFC in writing and accompanied by:
(a) The most recent balance sheet and income statement;
(b) A monthly cash flow forecast, in form and content satisfactory
to RTFC, indicating all planned advances from and repayment of
the line of credit, including the current advance request; and
(c) A collateral position statement, in a form and content
satisfactory to RTFC, itemizing all of Applicant's outstanding
secured debt and the corresponding net book value of the
collateral for said indebtedness.
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Name of Applicant: ILLUMINET, INC
Signed By:
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Title:
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Date of Application:
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APPROVAL OF AGREEMENT
This Agreement is approved, subject to any Additional Terms and Conditions noted
above, on the date set forth below and is effective as of _________________,
199__ (the "Effective Date").
RURAL TELEPHONE FINANCE COOPERATIVE
Signed By: ____________________________________________, Chief Executive Officer
Loan: # WA 812-S-01 Date of Approval:
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Name of Applicant: ILLUMINET, INC
Signed By:
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Title:
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Date of Application:
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APPROVAL OF AGREEMENT
This Agreement is approved, subject to any Additional Terms and Conditions noted
above, on the date set forth below and is effective as of _________________,
199__ (the "Effective Date").
RURAL TELEPHONE FINANCE COOPERATIVE
Signed By: ____________________________________________, Chief Executive Officer
Loan: # WA 812-S-01 Date of Approval:
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