EXHIBIT 10.18
LOAN AGREEMENT
LOAN AGREEMENT ("Agreement") made as of March 29, 2000, by and between
COASTAL UTILITIES, INC., a Georgia corporation ("Borrower"), and RURAL TELEPHONE
FINANCE COOPERATIVE, a South Dakota cooperative association ("Lender' or
"RTFC").
RECITALS
WHEREAS, Borrower has requested Lender to make the Loan to Borrower
described in Schedule 1 hereto; and
WHEREAS, Lender is willing to make the Loan upon the terms and conditions
set forth in this Agreement;
NOW, THEREFORE, for and in consideration of the mutual covenants contained
herein, Borrower and Lender do hereby agree as follows:
I. CONSTRUCTION AND DEFINITION OF TERMS
All accounting terms not specifically defined herein shall have the
meanings assigned to them as determined by generally accepted accounting
principles. In addition to the terms defined elsewhere in this Agreement, unless
the context otherwise requires, when used herein, the following terms shall have
the following meanings:
"Adjustment Date" shall mean the last date of the term (or rate period) of
the applicable Fixed Rate, after the date of the initial Advance to the Maturity
Date.
"Advance" shall mean an advance as defined in Section 2.02.
"Business Day" shall mean any day that Lender is open for business.
"Cash Margins" for any year shall mean net income (including guaranty
payments to Borrower from any of its affiliates) plus depreciation, amortization
and any other non-cash charges, less any non-cash credits and principal on long-
term debt payable in such year, as calculated on a consolidated basis for
Borrower and all its Subsidiaries.
"Certified" shall mean that the information, statement, schedule, report or
other document required to be "Certified" shall contain a representation of a
duly authorized officer of Borrower that such information, statement, schedule,
report or other document is true and correct and complete.
"Closing" shall mean the first date on which funds are advanced to Borrower
hereunder.
"Collateral" shall mean the Mortgaged Property, as such term is defined in
the Mortgage, and all proceeds, cash and non-cash, including insurance proceeds,
of the foregoing, whether in the
possession of Borrower or any other person, and certain stock and related
proceeds and dividends described in, and pledged to Lender pursuant to the
Pledge Agreement.
"Commitment" shall have the meaning set forth in Schedule 1 hereto.
"Current Ratio" for any year shall mean the ratio of total current assets
to total current liabilities, as calculated by dividing total current assets by
total current liabilities, on a consolidated basis for Borrower and all its
Subsidiaries.
"Debt Service Coverage Ratio" or "DSC" for any year shall mean (a) total
net income (including guaranty payments to Borrower from any of its affiliates)
or margins plus depreciation and amortization and deferred compensation expense
and interest on long-term debt for such year, divided by (b) principal and
interest on long-term debt payable in such year, as calculated on a consolidated
basis for the Borrower and all its Subsidiaries.
"Event of Default" shall mean any of the events described in Section 8
hereof.
"Fixed Rate" shall mean the interest rate per annum provided for in Section
2.03(b) of this Agreement, plus 50 basis points.
"Leases" shall mean any lease of property by which Borrower shall be
obligated for rental or other payments which in the aggregate for any fiscal
year are in excess of $100,000 other than such equipment leases which are in
form and substance substantially in conformity with lease agreements in general
use in Borrower's industry by companies of size and character similar to
Borrower.
"Leverage Ratio" for any year shall mean (a) total debt excluding SCCs
divided by (b) the sum of: (i) total net income (including guaranty payments to
Borrower from any of its affiliates) or margins, (ii) income taxes, (iii)
interest expense payable on long-term debt for such year, (iv) depreciation and
amortization expense where pre-tax income or loss excludes any extraordinary
gains, (v) the write-up of any asset, and (vi) any investment income or losses
(including all Lender patronage capital allocations), as measured on a
consolidated basis for Borrower and all its Subsidiaries.
"Lien" shall mean any statutory or common law consensual or non-consensual
mortgage, pledge, security interest, encumbrance, lien, right of set-off, claim
or charge of any kind, including, without limitation, any conditional sale or
other title retention transaction, any lease transaction in the nature thereof
and any secured transaction under the Uniform Commercial Code of any
jurisdiction.
"Loan" shall mean the loan by the Lender to Borrower, pursuant to this
Agreement and the Note, in an aggregate principal amount not to exceed the
Commitment.
"Make-Whole Premium" shall mean the excess, if any, of (i) the present
value of the amount of interest that would have accrued during the applicable
Fixed Rate period on that portion of the Loan to be prepaid or converted over
(ii) the present value of the amount of interest Lender
would earn if that portion of the Loan to be prepaid or converted was reinvested
for the remainder of the applicable Fixed Rate period in U.S. Treasury
obligations with a maturity comparable to the remaining term of the applicable
Fixed Rate period. For purposes of calculating the present value in (i) and (ii)
above, the discount rate will be the rate of interest accruing on the U.S.
Treasury obligations in (ii) above.
"Material Adverse Effect" shall mean any event or circumstance which, in
Lender's reasonable discretion, has a material and adverse effect upon the
business, operations, assets or properties or financial condition of the
Borrower and its Subsidiaries, taken as a whole.
"Maturity Date" shall mean the maturity date defined in the Note.
"Minimum Net Worth Test" shall be calculated on a consolidated basis for
the Borrower and all its Subsidiaries, and shall mean an equity to total asset
ratio of at least forty percent (40%). Equity shall be determined by subtracting
total liabilities from total assets.
"Mortgage" shall mean the deed to secure debt and security agreement
described in Schedule 1.
"Net Worth" shall be calculated on a consolidated basis for the Borrower
and all its Subsidiaries taken as a whole and arrived at by subtracting total
liabilities from total assets.
"Note" shall mean the note or notes executed and delivered by Borrower at
or prior to Closing pursuant to Subsection 5.02(a) hereof, and all renewals,
replacements and extensions thereof.
"Obligations" shall include the full and punctual performance of all
present and future duties, covenants and responsibilities due to the Lender by
Borrower under this Agreement, the Note, the Other Agreements, all present and
future obligations of Borrower to the Lender for the payment of money under this
Agreement, the Note, the Other Agreements, extending to all principal amounts,
interest, late charges and all other charges and sums, as well as all costs and
expenses payable by Borrower under this Agreement, the Note, the Other
Agreements, and any and all other present and future monetary liabilities of
Borrower to the Lender, whether direct or indirect, contingent or noncontingent,
matured or unmatured, accrued or not accrued, related or unrelated to this
Agreement, whether or not of the same character or class as Borrower's
obligations under this Agreement and the Note, whether or not secured under any
other document, instrument or statutory or common law provision, as well as all
renewals, refinancings, consolidations, recastings and extensions of any of the
foregoing.
"Other Agreements" shall mean any and all promissory notes, security
agreements, assignments, subordination agreements, pledge or hypothecation
agreements, mortgages, deeds of trust, leases, contracts, guaranties,
instruments and documents now and hereafter existing between the Lender and
Borrower and executed and/or delivered pursuant to this Agreement or
guaranteeing, securing or in any other manner relating to any of the
Obligations, including, the instruments and documents referred to in Subsection
5.02 hereof.
"Payment Date" shall mean the last day of each of the months referred to in
Schedule 1 hereto.
"Payment Notice" shall mean the notice furnished to the Borrower at least
quarterly indicating the precise amount of principal and/or interest due on the
next ensuing Payment Date, such notice to be sent to the Borrower at least ten
(10) days before such Payment Date.
"Person" shall include natural persons, corporations, associations,
partnerships, limited liability companies, joint ventures, trusts, governments
and agencies and departments thereof, and every other entity of companies, every
kind.
"Pledge Agreement" or "Pledge" shall mean the Pledge and Security Agreement
executed by and between Borrower and Lender as of even date herewith.
"Reset Date" shall have the meaning set forth in the definition of "Fixed
Rate" above.
"Subordinated Capital Certificate" or "SCC" shall mean a subordinated
certificate representing an investment in the Lender purchased by the Borrower
in connection with the Loan.
"Subsidiary" at any time means any entity which is at the time beneficially
owned or controlled directly or indirectly by the Borrower, by one or more such
entities or by the Borrower and one or more such entities.
"Termination Date" shall mean that date which is two (2) years from the
date hereof.
"Times Interest Earned Ratio" or "TIER" for any year shall mean (a) total
net income (including guaranty payments to Borrower from any of its affiliates)
or margins plus income taxes plus interest payable on long-term debt for such
year, divided by (b) interest on long-term debt payable in such year, as
measured on a consolidated basis for the Borrower and all its Subsidiaries.
"Total Plant" shall be calculated on a consolidated basis for the Borrower
and all its Subsidiaries and shall mean the total of all assets included in
property, plant and equipment pursuant to generally accepted accounting
principles and shall exclude any goodwill or plant acquisition adjustments.
"Variable Rate" shall mean the variable rate established by the Lender from
time to time for loans similarly classified pursuant to Lender's policies and
procedures then in effect, plus 50 basis points.
2. LOAN
2.01 Loan. The Lender agrees to make the Loan to Borrower subject to all of
the terms and conditions of this Agreement and the Other Agreements.
2.02 Advances. The Lender agrees to make, and the Borrower agrees to
request, on the terms and conditions of this Agreement, Advances from time to
time at the office of the Lender in
Herndon, Virginia, or at such other place as the Lender may designate, not to
exceed the Commitment. The Borrower shall give the Lender at least one Business
Day prior written notice of the date on which each Advance is to be made. On the
Termination Date, the Lender may stop advancing funds and reduce the Commitment
to the aggregate amount theretofore advanced. The obligation of the Borrower to
repay the Advances shall be evidenced by the Note.
2.03 Payment, Amortization and Interest Rate.
(a) Payment. The Borrower shall pay on each Payment Date quarterly
installments, in an amount as determined by the Lender, of principal and/or
interest as shown in the Payment Notice, except that, if not sooner paid, any
balance of the principal amount and interest accrued thereon and all other
amounts due hereunder shall be due and payable on the Maturity Date. Payment of
principal hereunder shall commence on the date which is one-year after the first
full quarter following the initial Advance of funds as set forth in Schedule 1
and on each subsequent Payment Date until the Maturity Date or such earlier date
as all amounts due hereunder and on account of the Note shall have been paid in
full. Payment of interest hereunder is due on each Payment Date in which a
principal balance is outstanding. Principal will be amortized in accordance with
the method stated in Schedule 1 hereto.
The Lender will use, for purposes of calculating the amortization of principal,
one of the following interest rates, as applicable:
(i) If the Borrower elects the Fixed Rate, the Fixed Rate in effect on
the Adjustment Date; or
(ii) If the Borrower elects the Variable Rate, the Variable Rate in
effect when amortization begins; or
(iii) If the Borrower elects to convert from one interest rate program to
another pursuant to the provisions hereunder, the interest rate then
in effect for the elected program.
At the Lender's option, all payments shall be applied first to late payment
charges due, as hereinafter provided, then to interest accrued to the date of
such payment, and then to the reduction of principal balance outstanding.
No provision of this Agreement or the Note shall require the payment, or permit
the collection, of interest in excess of the highest rate permitted by
applicable law.
(b) Interest Rate. Each Advance shall be initially made at the Variable
Rate. Interest shall be computed from the actual number of days elapsed on the
basis of a year of 365 days until the first Payment Date following the initial
Advance. Thereafter, interest shall continue to be computed for the actual
number of days elapsed on the basis of a year of 365 days unless a Fixed Rate is
applicable to the Loan, in which case interest shall be computed on the basis of
a 30-day month and 360-day year.
(i) Variable Rate. If Advances are made at the Variable Rate, it shall
apply until the Maturity Date, except as provided herein below.
(ii) Fixed Rate. If the Borrower elects a Fixed Rate, such Fixed Rate as
is available and in effect for loans similarly classified pursuant to
Lender's policies and procedures then in effect at the time of the
election shall apply to such Advance until the Adjustment Date. Upon
notice given by the Borrower five (5) Business Days prior to such
Adjustment Date, Borrower may elect to reset the interest rate to
such Fixed Rate as is available and in effect at the time of such
Adjustment Date. Such reset Fixed Rate shall apply to that portion of
the outstanding principal balance of the Loan elected to have a Fixed
Rate from the Adjustment Date until a new Adjustment Date or the
Maturity Date. If Borrower does not elect to reset the Fixed Rate,
the Variable Rate shall apply to the outstanding principal balance of
the Loan that had been bearing interest at the Fixed Rate prior to
such Adjustment Date, from such Adjustment Date to the Maturity Date.
(iii) Conversion to Different Interest Program.
(A) Variable Rate to Fixed Rate. Subject to the conditions set forth
herein, the Borrower may convert from the Variable Rate to the Fixed
Rate for any portion or all of the principal amount of the Commitment
then outstanding at any time provided the Lender offers a Fixed Rate
at such time for similarly classified loans.
(B) Fixed Rate to Variable Rate. The Borrower may convert from a Fixed
Rate to the Variable Rate: (1) on an Adjustment Date or (2) at any
other time, provided that the Borrower shall pay Lender any
applicable Make-Whole Premium.
2.04 Prepayment. In the event the Borrower prepays all or part of the Loan,
the Borrower shall pay any prepayment fee required pursuant to the terms of this
Section 2.04. All prepayments shall be accompanied by payment of accrued and
unpaid interest on the amount of and to the date of the prepayment. All
prepayments shall be applied first to fees, second to the payment of accrued and
unpaid interest, and then to the unpaid balance of the principal amount of the
Loan; provided, however, Borrower may at its option allocate principal
prepayment between amounts outstanding on Variable Rate Loans and Fixed Rate
Loans. If the Loan bears interest at the Variable Rate the Borrower may prepay
the Loan or any portion thereof, as the case may be, at any time subject to the
terms hereof and said prepayment fee shall be in an amount equal to fifty (50)
basis points times the amount being prepaid. If the Loan bears interest at the
Fixed Rate, the Borrower may prepay the Loan only on an Adjustment Date or any
such other date provided that the Borrower shall pay a prepayment fee in an
amount equal to fifty (50) basis points times the amount being prepaid plus any
applicable Make-Whole Premium (which Make-Whole Premium shall only be paid to
the extent any Fixed Rate Loan is prepaid on any date other than an Adjustment
Date). Notwithstanding anything to the contrary herein, if Borrower shall make a
permitted prepayment pursuant to the terms hereto, then, upon Borrower's
request, Lender shall re-amortize the Loan pursuant to the method of
amortization designated in Section 2.03 (a).
2.05 10% Subordinated Capital Certificate. The Borrower shall purchase SCCs
which in the aggregate shall not exceed the amount specified in Schedule 1
hereto. Unless otherwise requested in writing by the Borrower prior to the
initial Advance and approved by the Lender, the Borrower agrees to purchase SCCs
either: (1) with each Advance in the amount of ten percent (10%) of each such
Advance, and each such SCC shall be paid for with proceeds of such Advance, or
(2) by making payments with Borrower's own funds in twenty (20) equal quarterly
installments, commencing on the first Payment Date following the initial
Advance. If the Borrower elects to pay for SCCs other than from Loan funds, the
amount of the Commitment will be correspondingly reduced by said amount when the
SCCs are fully paid. If the Borrower obtains Advances hereunder other than for
the purpose of purchasing SCCs and fails to pay for the SCCs, then the Lender
may make Advances for the account of the Borrower to purchase the SCCs. The
Lender agrees to deliver the SCCs on or about the date on which the SCCs have
been paid for in full. The SCCs shall bear no interest and shall mature in
accordance with the terms thereof.
3. SECURITY
As security for the payment and performance of all of the Obligations, Borrower
has: (i) entered into the Mortgage pledging and granting to the Lender a prior
and continuing security interest in the Collateral that may be secured by the
Mortgage that shall continually exist until all Obligations have been paid in
full, and (ii) executed the Pledge and obtained an executed pledge and security
agreement from its parent corporation, Coastal Communications, Inc., pursuant to
which certain equity interests are pledged to Lender as are further described
therein. If reasonably required by the Lender at any time, Borrower shall make
notations, satisfactory to the Lender, on its books and records disclosing the
existence of the Lender's security interest in the Collateral. Borrower agrees
that, with respect to the Collateral, which is subject to Article 9 of the
Uniform Commercial Code, the Lender shall have, but not be limited to, all the
rights and remedies of a secured party under the Uniform Commercial Code. The
Lender shall have no liability or duty, either before or after the occurrence of
an Event of Default hereunder, on account of loss of or damage to, or to collect
or enforce any of its rights against, the Collateral, or to preserve any rights
against account debtors or other parties with prior interests in the Collateral.
4. REPRESENTATIONS AND WARRANTIES
To induce the, Lender to enter into this Agreement, Borrower represents and
warrants to the Lender as of the date of this Agreement that:
4.01 Good Standing. Borrower is a corporation duly incorporated, validly
existing and in good standing under the laws of the state of its incorporation,
has the power to own its property and to carry on its business, is duly
qualified to do business, and is in good standing in each jurisdiction in which
the transaction of its business makes such qualification necessary, except to
the extent such lack of qualification would not have a Material Adverse Effect.
4.02 Authority. Borrower has the necessary power and authority to enter
into this Agreement and the Mortgage, to make the borrowing hereunder, to
execute and deliver all documents and instruments required hereunder and to
incur and perform the obligations provided
for herein, in the Mortgage, and in the Note, all of which have been duly
authorized by all necessary and proper action, and no consent or approval of any
person, including, without limitation, shareholders of Borrower and any public
authority or regulatory body, which has not been obtained is required as a
condition to the validity or enforceability hereof or thereof.
4.03 Binding Agreement. This Agreement has been duly and properly executed
by Borrower, constitutes the valid and legally binding obligation of Borrower
and is fully enforceable against Borrower in accordance with its terms, subject
only to laws affecting the rights of creditors generally, the exercise of
judicial discretion in accordance with general principles of equity or because
waivers of statutory or common law rights or remedies may be limited.
4.04 No Conflicting Agreements. The execution, delivery of and performance
by Borrower of this Agreement, the Mortgage and the Note, and the transactions
contemplated hereby or thereby, will not: (a) violate any material provision of
law, any order, rule or regulation of any court or other agency of government,
any material award of any arbitrator, the charter or by-laws of Borrower, or any
indenture, contract, agreement, mortgage, deed of trust or other instrument to
which Borrower is a party or by which it or any of its property is bound; or (b)
be in conflict with, result in a breach of or constitute (with due notice and/or
lapse of time) a default under, any such material award, indenture, contract,
agreement, mortgage, deed of trust or other instrument, or result in the
creation or imposition of any Lien (other than contemplated hereby) upon any of
the property or assets of Borrower, except to the extent any such conflict
referred to in (a) or (b) above would not have a Material Adverse Effect.
4.05 Litigation. There are no judgments, claims, actions, suits or
proceedings pending or, to the knowledge of Borrower, threatened against or
affecting Borrower or its properties, at law or in equity or before or by any
federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, which may result in a Material Adverse
Effect, and Borrower is not, to its knowledge, in default with respect to any
judgment, order, writ, injunction, decree, rule or regulation of any court or
federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, which could reasonably
be expected to have a Material Adverse Effect.
4.06 Financial Condition. The financial statements of Borrower as at the
date set forth in Schedule 1 hereto, heretofore delivered to the Lender, are
complete and correct in all material respects, fairly present the financial
condition of Borrower and have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis. There are no
material liabilities of Borrower, direct or indirect, fixed or contingent, as of
the date of such statements which are not reflected therein. There has been no
material adverse change in the financial condition or operations of the Borrower
from that set forth in said financial statements except changes previously
disclosed in writing to the Lender prior to the date hereof.
4.07 Taxes. Borrower has paid or caused to be paid all federal, state and
local taxes to the extent that such taxes have become due, unless the Borrower
is contesting in good faith any such tax. Borrower has filed or caused to be
filed all federal, state and local tax returns which are required to be filed by
Borrower.
4.08 Title to Properties. Borrower has good and marketable title to all of
its real properties and owns all of its other properties and assets free and
clear of any liens, except (i) the lien of the Mortgage and taxes or assessments
not yet due; (ii) deposits or pledges to secure payment of workmen's
compensation, unemployment insurance, old age pensions or other social security;
(iii) deposits or pledges to secure performance of bids, tenders, contracts
(other than contracts for the payment of borrowed money), leases, public or
statutory obligations, surety or appeal bonds, or other deposits or pledges for
purposes of like general nature in the ordinary course of business, and (iv)
easements, rights of way, zoning and similar restrictions and encumbrances not
interfering with the ordinary conduct of the business of Borrower and which do
not detract materially from the value of such property or asset to which they
attach or impair materially Borrower's use thereof or materially adversely
affect Lender's lien thereon.
4.09 Licenses and Permits. Borrower has duly obtained and now holds all
licenses, permits, certifications, approvals and the like necessary to own and
operate its property and business that are required by federal, state and local
laws of the jurisdictions in which Borrower conducts its business and each
remains valid and in full force and effect except to the extent the failure to
hold such licenses, permits, certifications or approvals or the lack of validity
of the foregoing could not, in each case, be reasonably expected to have a
Material Adverse Effect.
4.10 Subsidiaries. Borrower has no Subsidiaries other than Subsidiaries
heretofore disclosed to the Lender, or hereafter formed or acquired with the
prior written consent of the Lender.
4.11 Certain Indebtedness. There is no material indebtedness of Borrower
owing to any employee, officer, member, or director of the board of Borrower
other than accrued salaries, commissions and the like and any indebtedness
subordinated to the Obligations pursuant hereto.
4.12 Location of Office. The chief place of business of the Borrower and
the office where its records concerning accounts and contract rights are kept is
identified in Schedule 1 hereto.
4.13 Required Approvals. No license, consent, permit or approval of any
governmental agency or authority is required to enable the Borrower to enter
into this Agreement or to perform any of its obligations provided for herein
except as disclosed on Schedule 1 hereto and except with respect to regulatory
approvals which may be required in connection with the Lender's enforcement of
certain remedies hereunder.
4.14 ERISA. Each pension plan of Borrower and its Subsidiaries providing
benefits for employees of Borrower or such Subsidiary covered by Title IV of the
Employee Retirement Income Security Act of 1974, as amended, and the regulations
thereto ("ERISA"), is in compliance with ERISA in all material respects, and no
material liability to the Pension Benefit Guaranty Corporation ("PBGC") or to a
multiemployer plan has been, or is expected by Borrower or its Subsidiaries to
be, incurred by Borrower or such Subsidiary.
5. CONDITIONS OF LENDING
The Lender shall have no obligation to make the initial Advance to
Borrower hereunder unless, as of the date of Closing, each of the following
conditions precedent shall be satisfied as provided below or otherwise waived by
the Lender:
5.01 Legal Matters. All legal matters incident to the consummation of the
transactions hereby contemplated shall be satisfactory to counsel for the Lender
and to such local counsel as counsel for the Lender may retain.
5.02 Documents. There shall have been delivered to the Lender, fully
completed and duly executed (when applicable), the following, satisfactory to
the Lender and its counsel:
(a) This Agreement and the Note.
(b) Certified copies, satisfactory to the Lender, of all such
documents and proceedings of the Borrower authorizing the
transactions herein contemplated.
(c) A written opinion from Borrower's counsel addressing such legal
matters as the Lender or its counsel shall reasonably require.
(d) The Borrower shall have (I) executed the Mortgage(s); (ii) if any
real property is owned by Borrower, recorded a valid and binding
Mortgage granting Lender a first lien in all real property owned
by Borrower; (iii) filed financing statements in all
jurisdictions necessary to provide Lender a first priority,
perfected security interest in all Collateral which may be
perfected by the filing of financing statements; and (iv)
delivered such other documents as are necessary to create or
continue a perfected security interest in favor of the Lender in
the Collateral.
(e) The Pledge and a pledge and security agreement dated as of even
date herewith, and related stock powers, from Borrower and
Borrower's parent corporation, Coastal Communications, Inc.
5.03 Government Approvals. The Borrower shall have furnished to the Lender
true and correct copies of all certificates, authorizations and consents,
including without limitation the consents referred to in Section 4.13 hereof,
necessary for the execution, delivery or performance by the Borrower of this
Agreement, the Note and the Mortgage.
5.04 Representations, Warranties and Material Change. At Closing and at the
date of every subsequent Advance hereunder, all covenants, representations and
warranties set forth in this Agreement shall be true and correct on and as of
such time with the same effect as though such covenants, representations and
warranties had been made on and as of such date; no Event of Default specified
in Section 8 and no event which, with the lapse of time or the notice and lapse
of time specified in Section 8 would become such an Event of Default, shall have
occurred and be continuing or will have occurred after giving effect to the
Advance on the books of the Borrower; there shall have occurred no material
adverse changes in the business or condition, financial or
otherwise, of the Borrower; and nothing shall have occurred which in the opinion
of the Lender materially and adversely affects the Borrower's ability to meet
its obligations hereunder.
5.05 Special Conditions. At Closing and at the time of every subsequent
Advance hereunder, the Lender and its counsel shall be fully satisfied that the
Borrower has complied and will continue to comply with any special conditions
identified in Schedule 1 hereto.
5.06 Requisitions. The Borrower will request Advances in form and substance
satisfactory to the Lender. Pursuant to the terms and conditions hereof, the
Lender will wire the proceeds of the requested Advance to an account or accounts
as directed by the Borrower.
6. AFFIRMATIVE COVENANTS
Borrower covenants and agrees with the Lender that, until all of the
Obligations have been paid in full, Borrower will:
6.01 Membership. Remain or an affiliate thereof will remain, a member in
good standing of the Lender.
6.02 Financial Statements and Other Information. Furnish to the Lender: (a)
financial statements as required by the Mortgage; (b) such other information,
reports or statements concerning the operations, business affairs and/or
financial condition of Borrower as the Lender may reasonably request from time
to time; and (c) promptly upon their becoming available information, in form and
substance satisfactory to Lender, of any and all material changes or
modification of licenses, permits, certifications, approvals and the like
necessary for Borrower to own or operate its business or a substantial part of
its business.
6.03 Financial Ratios. Subject to applicable laws and rules and orders of
regulatory bodies, and to events which in the reasonable judgment of the Lender
are beyond the control of the Borrower, so operate and manage its business as to
achieve minimum annual DSC and TIER Ratios, and a maximum annual Leverage Ratio,
in the following amounts, in each case as of the last calendar day of any fiscal
year:
Period Minimum Minimum DSC Maximum
TIER Ratio Leverage Ratio
Requirement Requirement
2000 / Year 1 1.00 1.25 6.00
2001 / Year 2 1.00 1.25 5.50
2002 / Year 3 1.10 1.25 5.00
2003 / Year 4 1.25 1.35 4.50
2004 and thereafter 1.50 1.50 4.00
For purposes of 2000fYear 1 only, the Leverage Ratio shall be based on nine
months annualized "EBITDA" for the period April 1 - December 31, 2000. "EBITDA"
shall be calculated in accordance with item (b) of the definition for Leverage
Ratio in Section 1, above.
6.04 Annual Certificate. Within one hundred twenty (120) days after the
close of each calendar year, commencing with the year in which the initial
Advance hereunder shall have been made, deliver to the Lender a written
statement signed by the general manager or such other similar presiding officer
stating that to the best of said person's knowledge, the Borrower has fulfilled
all of its Obligations under this Agreement, the Note, and the Mortgage
throughout such year or, if there has been a default in the fulfillment of any
such Obligations, specifying each such default known to said person and the
nature and status thereof.
6.05 Use of Proceeds. Use Advances made hereunder and under the Note only
for the purpose identified in Schedule 1 hereto and for the payment of the
costs, expenses and fees incident to this Agreement and for no other purpose
whatsoever without the prior written consent of the Lender.
6.06 Special Affirmative Covenants. During the term hereof, Lender and its
counsel shall be fully satisfied that the Borrower has complied and will
continue to comply with any special affirmative covenants identified in Schedule
1 hereto.
6.07 Mortgage Filing. Within thirty (30) days of acquiring any real
property, the Borrower shall cause a deed to secure debt and security agreement,
substantially in the form of the Mortgage, to be duly recorded as a first lien
on all such real property and such deed to secure debt and security agreement or
other appropriate documentation shall have been duly filed, recorded or indexed
as a security interest in personal property wherever the Lender shall have
reasonably requested, all in accordance with applicable law, and the Borrower
shall have caused satisfactory evidence thereof to be furnished to the Lender.
7. NEGATIVE COVENANTS.
7.01 Notice. Borrower covenants and agrees with the Lender that Borrower
will not, directly or indirectly, without giving written notice to the Lender
thirty (30) days prior to the effective date of any change:
(a) Change Location of Chief Place of Business. Change location of the
Borrower's chief place of business
(b) Change of Name. Change the name of Borrower.
7.02 Consent. Borrower covenants and agrees with the Lender that Borrower
will not, directly or indirectly, without the prior written consent of the
Lender (such consent not to be unreasonably withheld):
(a) Control. Alter or permit alteration of control of the Borrower.
Control shall be as defined by regulations for telephone companies
issued by the Federal Communications Commission ("FCC").
(b) Subsidiaries. Form or acquire any Subsidiaries.
(c) Additional Indebtedness. Borrow money, or allow any Subsidiary to
borrow money, on a secured or unsecured basis from any other lender or
incur any additional secured or unsecured indebtedness (other than
indebtedness incurred under and pursuant to the two secured revolving
line of credit agreements, each dated as of the date hereof, between
Borrower and Lender, as the same may be amended, restated,
supplemented or otherwise modified from time to time); or enter into
or allow any of its Subsidiaries to enter into any Leases, unless at
that time Borrower meets the Minimum Net Worth Test; provided,
however, Borrower and its Subsidiaries, may grant purchase money
secured indebtedness or incur unsecured trade debt or pay other
current operating liabilities that arise in the ordinary course of
business so long as the aggregate total of such debt does not exceed
five percent (5%) of Borrower's consolidated total assets. If Borrower
meets the Minimum Net Worth Test, then Borrower and its Subsidiaries
may incur additional unsecured indebtedness or enter into Leases
without prior written approval of Lender as provided in the foregoing
sentence, provided the Borrower meets the Minimum Net Worth Test after
incurring such additional unsecured indebtedness or entering into such
Leases; provided, further, however, Borrower must give at least thirty
(30) days written notice to Lender prior to incurring any additional
unsecured indebtedness or entering into any such Leases which exceed
five percent (5%) of Borrower's consolidated total assets.
7.03 Dividends and Other Cash Distributions. The Borrower will not, in any
one calendar year, without the prior approval in writing of the Lender (i)
declare or pay any dividends or make any other distribution to its stockholders
with respect to its capital stock; (ii) purchase or redeem or retire any of its
capital stock; or (iii) increase the management fee factor above the management
fee factor contained in the Madison River Telephone Company Financial Model
(submitted on behalf of Borrower) dated February 25, 2000, unless with respect
to any of the foregoing (after giving effect to such transaction) Borrower:
(1)(a) maintains a Current Ratio of not less than 1.25 and (b) meets the Minimum
Net Worth Test, -or- (2)(a) maintains a Current Ratio of not less than 1.25, (b)
maintains a minimum Net Worth to total assets of not less than twenty-five
percent (25%) and (c) the payment of such dividend, the making of such
distribution, or the purchase, redemption or retirement of such capital stock
individually or in the aggregate, does not exceed fifty percent (50%) of the
prior fiscal year-end Cash Margins in any one calendar year. Notwithstanding
anything to the contrary herein, Borrower may make cash dividends in an amount
not to exceed fifty (50%) of the net proceeds of any sale of its holdings in
Illuminet, Inc.
In no event may the Borrower make any distributions or payments pursuant to this
Section when there is unpaid any due installment of principal and/or interest on
the Note or if the Borrower is otherwise in material default of any provision of
this Agreement or would be in material default hereunder as a result of such
distribution or payment.
7.04 Special Negative Covenants. During the term hereof, Lender and its
counsel shall be fully satisfied that the Borrower has complied and will
continue to comply with any special negative covenants identified in Schedule 1
hereto.
7.05 Limitations on Loans, Investments and Other Obligations:
(a) The Borrower shall not, without first obtaining the written approval
of Lender, (i) purchase or make any commitment to purchase any stock,
bonds, notes, debentures or other securities or obligations of or
beneficial interest in, (ii) make any other investment in, (iii) make
any loan to, or (iv) guarantee, assume, or otherwise become liable for
any obligation of, any corporation, association, partnership, joint
venture, trust, government or any agency or department thereof, or any
other entity of any kind if the aggregate amount of all such
purchases, investments, loans and guarantees exceeds in any twelve
(12) month period the greater of ten percent (10%)of Total Plant or
thirty percent (30%) of Net Worth.
(b) The following shall not be included in the limitation on purchases
investments, loans and guarantees in (a) above: (i) bonds, notes,
debentures, stock, or other securities or obligations issued by or
guaranteed by the United States government or any agency or
instrumentality thereof; (ii) bonds, notes, debentures, stock,
commercial paper, subordinated capital certificates, or other security
or obligation of institutions whose senior unsecured debt obligations
are rated by at least two nationally recognized rating organizations
in either of its two highest categories; (iii)investments incidental
to loans made by RTFC; (iv) bonds, notes, debentures, commercial paper
or any other security of the National Rural Utilities Cooperative
Finance Corporation; and (v) any deposit that is fully insured by the
Federal Government.
7.06 Limitations on Contracts; Deposits of Funds: The Borrower will not,
without the approval in writing of the Lender: (a) enter into any contract or
contracts (i) for management of its business or any part thereof (except in
connection with any management contract for which the fees are permitted by
Section 7.03 above); (ii) for the operation or maintenance of all or any
substantial part of its property, (iii) for the use by others of any of the
Collateral in excess of $100,000; or (iv) with other companies; provided,
however, that such approval shall not be required for any contract which in form
and substance substantially conforms with contracts in general use in the
Borrower's industry by companies of size and character similar to Borrower or
which substantially conform to contracts which are currently in existence that
Borrower is a party to; or (b) except as permitted by Section 7.05 above,
deposit any of its funds, regardless of the source thereof, in any bank which is
not insured by the Federal Deposit Insurance Corporation or the successor
thereof.
7.07 Preservation of Existence and Franchises; Compliance with Laws;
Limitations on Mergers, Transfers and Purchases: The Borrower will at all times,
so long as any of the Notes shall be outstanding, take or cause to be taken all
such action as from time to time may be necessary to preserve its existence and
to preserve and renew all franchises, rights of way, easements, permits and
licenses necessary to the conduct of its business, and will materially comply
with all valid laws, ordinances, regulations and requirements applicable to it
or its property.
8. EVENTS OF DEFAULT
The occurrence of any one or more of the following events shall constitute
an "Event of Default":
(a) Representation and Warranties. Any representation or warranty made
herein, in any of the Other Agreements or in any statement, report,
certificate, opinion, financial statement or other document
furnished or to be furnished in connection with this Agreement or
the Other Agreements shall be false or misleading in any material
respect.
(b) Payment. Failure of Borrower to make any of the payment Obligations,
including, without limitation, any sum due the Lender under this
Agreement or any of the Other Agreements, when and as the same shall
become due, whether at the due date thereof, by demand, by
acceleration or otherwise.
(c) Other Covenants. Failure of Borrower to observe or perform any
warranty, covenant or condition to be observed or performed by
Borrower under this Agreement or any of the Other Agreements.
(d) Existence. The Borrower shall forfeit or otherwise be deprived of
its charter, franchises, permits, easements, consents or licenses
required to carry on any material portion of its business.
(e) Other Obligations. Default, after giving effect to any applicable
grace period, by the Borrower in the payment when due of any money
owed by the Borrower, whether principal, interest, premium or
otherwise, under any other agreement for borrowing money in an
amount in excess of five percent (5%) of total assets, whether or
not such borrowing is secured.
(f) Bankruptcy. A court shall enter a decree or order for relief with
respect to the Borrower or any Subsidiary or guarantor (if any) in
an involuntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official, or ordering the winding up or liquidation of its
affairs, and such decree or order shall remain unstayed and in
effect for a period of sixty (60) consecutive days or the Borrower
or any Subsidiary or guarantor (if any) shall commence a voluntary
case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or under any such law, or consent to
the appointment or taking of possession by a receiver, liquidator,
assignee, custodian or trustee, of a substantial part of its
property, or make any general assignment for the benefit of
creditors.
(g) Dissolution or Liquidation. Other than as provided in subsection (f)
above, the dissolution or liquidation of the Borrower or any
Subsidiary or guarantor (if any), or failure by the Borrower or any
Subsidiary or guarantor promptly to forestall or
remove any execution, garnishment or attachment of such consequence
as will impair its ability to continue its business or fulfill its
obligations and such execution, garnishment or attachment shall not
be vacated within sixty (60) days.
(h) Final Judgment. A final non-appealable judgment in excess of
$250,000 shall be entered against the Borrower and shall remain
unsatisfied or without a stay for a period of sixty (60) days.
9. RIGHTS AND REMEDIES
9.01 Rights and Remedies of the Lender. Upon the occurrence of an Event of
Default, the Lender may, subject to:
(i) thirty (30) days prior written notice during which time Borrower
shall have the opportunity to cure said Event of Default except with
respect to Obligations pursuant to 8(b), 8(f) and 8(g) above which
shall require no notice or demand and shall have no period to cure;
and
(ii) compliance, if required, with the rules and regulations of the FCC
and any state public service or utilities commission having
jurisdiction;
exercise in any jurisdiction in which enforcement hereof is sought, the
following rights and remedies, in addition to all rights and remedies available
to the Lender under applicable law, all such rights and remedies being
cumulative and enforceable alternatively, successively or concurrently:
(a) Declare all unpaid principal outstanding on the Note, all accrued
and unpaid interest thereon, and all other Obligations to be
immediately due and payable and the same shall thereupon become
immediately due and payable without presentment, demand, protest or
notice of any kind, all of which are hereby expressly waived.
(b) Institute any proceeding or proceedings to enforce the Obligations
owed to, or any Liens in favor of the Lender.
(c) Pursue all rights and remedies available to the Lender that are
contemplated by the Mortgage in the manner, upon the conditions, and
with the effect provided in the Mortgage, including but not limited
to a suit for specific performance, injunctive relief or damages.
(d) Pursue any other rights and remedies available to the Lender at law
or in equity.
9.02 Cumulative Nature of Remedies. Nothing herein shall limit the right of
the Lender, subject to notice and right to cure provisions contained herein, to
pursue all rights and remedies available to a creditor following the occurrence
of an Event of Default subject to compliance, if
required, with the rules and regulations of the FCC and any state public service
or utilities commission having jurisdiction. Each right, power and remedy of the
Lender in this Agreement and/or the Other Agreements shall be cumulative and
concurrent, and recourse to one or more rights or remedies shall not constitute
a waiver of any other right, power or remedy.
9.03 Costs and Expenses. Borrower agrees to pay and to be liable for any
and all reasonable expenses, including attorneys' fees and court costs, incurred
by the Lender in exercising or enforcing any of its rights hereunder or under
the Other Agreements, together with interest thereon at the rate and determined
in the manner provided in the Mortgage. Subject to the Mortgage and applicable
law, the Lender may apply all Collateral and proceeds of all Collateral to the
Obligations in any manner which the Lender, in its sole discretion, deems
appropriate, and Borrower will continue to be liable for any deficiency.
9.04 Late Payment Charges. If payment of any principal and/or interest due
under the terms of the Note is not received at the office of the Lender in
Herndon, Virginia, or as the Lender may otherwise designate to the Borrower,
within such time period as the Lender may prescribe from time to time in its
policies in connection with any late payment charges (such unpaid amount of
principal and/or interest being herein called the "delinquent amount" and the
period beginning after such due date until payment of the delinquent amount
being herein called the "late-payment period"), the Borrower will pay to the
Lender, in addition to all other amounts due under the terms of the Note, the
Mortgage, and this Agreement, any late-payment charge as may be fixed by the
Lender from time to time, on the delinquent amount for the late-payment period.
9.05 Lender's Setoff. The Lender shall have the right, in addition to all
other rights and remedies available to it, to setoff and to recover against any
or all of the Obligations due to Lender, any monies now and hereafter owing to
Borrower by the Lender. Borrower waives all rights of setoff, deduction,
recoupment and counterclaim.
10. MISCELLANEOUS
10.01 Performance for Borrower. Borrower agrees and hereby authorizes that
the Lender may, in its sole discretion, but the Lender shall not be obligated
to, advance funds on behalf of Borrower without prior notice to Borrower, in
order to insure Borrower's compliance with any material covenant, warranty,
representation or agreement of Borrower made in or pursuant to this Agreement or
any of the Other Agreements, to preserve or protect any right or interest of the
Lender in the Collateral or under or pursuant to this Agreement or any of the
Other Agreements, including without limitation, the payment of any insurance
premiums or taxes and the satisfaction or discharge of any judgment or any Lien
upon the Collateral or other property or assets of Borrower; provided, however
(i) prior to making any such advance, the Lender shall give the Borrower prior
written notice of its intent to make such advances and, unless there is some
imminent danger of the occurrence of a Material Adverse Effect, the Borrower
shall have fifteen (15) Business Days to rectify the issue set forth in such
notice, and (ii) that the making of any such advance by the Lender shall not
constitute a waiver by the Lender of any Event of Default with respect to which
such advance is made nor relieve Borrower of any such Event or Default. Borrower
shall pay to the Lender upon demand all such advances made by the Lender with
interest thereon at the rate and determined in the manner provided in the Note.
All such advances shall be
deemed to be included in the Obligations and secured by the security interest
granted the Lender hereunder to the extent permitted by law.
10.02 Expenses and Filing Fees. Whether or not any of the transactions
contemplated hereby shall be consummated, Borrower agrees to pay to the Lender
at Closing or thirty (30) days after the execution and delivery hereof,
whichever is earlier, all expenses of the Lender in connection with the filing
or recordation of all financing statements and instruments as may be required by
the Lender at the time of, or subsequent to, the execution of this Agreement,
including, without limitation, all documentary stamps, recordation and transfer
taxes and other costs and taxes incident to recordation of any document or
instrument in connection herewith. Borrower agrees to save harmless and
indemnify the Lender from and against any liability resulting from the failure
to pay any required documentary stamps, recordation and transfer taxes,
recording costs, or any other expenses incurred by the Lender in connection with
this Agreement. The provisions of this Subsection 10.02 shall survive the
execution and delivery of this Agreement and the payment of all other
Obligations.
10.03 Waivers by Borrower. Borrower hereby waives, to the extent the same
may be waived under applicable law: (a) in the event the Lender seeks to
repossess any or all of the Collateral by judicial proceedings, any bond(s) or
demand(s) for possession which otherwise may be necessary or required; (b)
presentment, demand for payment, protest and notice of non-payment and all
exemptions; and (c) substitution, impairment, exchange or release of any
collateral security for any of the Obligations. Borrower agrees that the Lender
may exercise any or all of its rights and/or remedies hereunder and under the
Other Agreements without resorting to and without regard to security or sources
of liability with respect to any of the Obligations.
10.04 Waivers by the Lender. Neither any failure nor any delay on the part
of the Lender in exercising any right, power or remedy hereunder or under any of
the Other Agreements shall operate as a waiver thereof, nor shall a single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or remedy.
10.05 Lender's Records. Every statement of account or reconciliation
rendered by the Lender to Borrower with respect to any of the Obligations shall
be presumed conclusively to be correct and shall (absent manifest error)
constitute an account stated between the Lender and Borrower unless, within ten
(10) Business Days after such statement or reconciliation shall have been
mailed, postage prepaid, to Borrower, the Lender shall receive written notice of
specific objection thereto.
10.06 Modifications. No modification or waiver of any provision of this
Agreement, the Note or any of the Other Agreements, and no consent to any
departure by Borrower therefrom shall in any event be effective unless the same
shall be in writing, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given. No notice to or
demand upon Borrower in any case shall entitle Borrower to any other or further
notice or demand in the same, similar or other circumstances.
10.07 Notices. All notices, requests and other communications provided for
herein including, without limitation, any modifications of, or waivers, requests
or consents under, this
Agreement shall be given or made in writing (including, without limitation, by
telecopy) and delivered to the intended recipient at the "Address for Notices"
specified below; or, as to any party, at such other address as shall be
designated by such party in a notice to each other party. Except as otherwise
provided in this Agreement, all such communications shall be deemed to have been
duly given when personally delivered or, in the case of a mailed or telecopied
notice, upon receipt, in each case given or addressed as provided for herein.
The Address for Notices of the respective parties are as follows:
The Lender:
Rural Telephone Finance Cooperative
Woodland Park
0000 Xxxxxxxxxxx Xxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Loan Officer
Fax: 000-000-0000
The Borrower:
Coastal Utilities, Inc.
000 Xxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxxx, XX 00000-0000
With a copy to:
Madison River Telephone
Company, LLC
XX Xxx 0000
000 Xxxxx Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Vice President and General Counsel
Fax: 000-000-0000
10.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL.
(a) THE PERFORMANCE AND CONSTRUCTION OF THIS AGREEMENT AND THE NOTE SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH
OF VIRGINIA.
(b) BORROWER HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED
STATES COURTS LOCATED IN VIRGINIA AND OF ANY STATE COURT SO LOCATED FOR PURPOSES
OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY. BORROWER IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY
APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
ESTABLISHING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY
CLAIM THAT ANY SUCH PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) EACH OF THE BORROWER AND THE LENDER HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
10.09 Holiday Payments. If any payment to be made by the Borrower hereunder
shall become due on a day which is not a Business Day, such payment shall be
made on the next succeeding Business Day and such extension of time shall be
included in computing any interest in respect of such payment.
10.10 Consent to Patronage Capital Distributions. The Borrower hereby
consents that the amount of any distributions with respect to Borrower'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 Lender will be
taken into account by Borrower 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.
10.11 Right to Inspect. The Borrower shall permit representatives of the
Lender at any time during normal business hours to inspect and make abstracts
from the books and records pertaining to the Collateral, and permit
representatives of the Lender to be present at Borrower's place of business to
receive copies of all communications and remittances relating to the Collateral,
all in such manner as the Lender may reasonably require, provided, that prior to
the occurrence and continuance of an Event of Default the Lender shall not
exercise its rights pursuant to this Section 10.11 more than one time per
calendar quarter.
10.12 Survival; Successors and Assigns. All covenants, agreements,
representations and warranties made herein and in the Other Agreements shall
survive Closing and the execution and delivery to the Lender of the Note, and
shall continue in full force and effect until all of the Obligations have been
paid in full. Whenever in this Agreement any of the parties hereto is referred
to, such reference shall be deemed to include the successors and assigns of such
party. All covenants, agreements, representations and warranties by or on behalf
of Borrower which are contained in this Agreement and the Other Agreements shall
inure to the benefit of the successors and assigns of the Lender.
10.13 Assignment. The Lender may assign its rights and obligations under
this Agreement and the Other Agreements without the consent of the Borrower;
provided, however, that no such assignment shall effect any of the material
terms of this agreement (other than the name of the Lender and the address for
notices and payments) or otherwise result in terms or conditions less favorable
to Borrower. The Borrower may not assign any of its rights of obligations under
this Agreement or the Other Agreements without the prior written consent of the
Lender.
10.14 Severability. If any term, provision or condition, or any part
thereof, of this Agreement or any of the Other Agreements 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, provision or
condition, and this Agreement, the Note, and the Other Agreements shall survive
and be construed as if such invalid or unenforceable term, provision or
condition had not been contained therein.
10.15 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto on separate counterparts, each of
which, when so executed and delivered, shall be an original, but all such
counterparts shall together constitute one and the same instrument.
10.16 Headings/Use of Terms. 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. The use of any gender or the neuter herein
shall also refer to the other gender or the neuter and the use of the plural
shall also refer to the singular, and vice versa.
10.17 Further Assurances. The Borrower will, upon demand of the Lender,
make, execute, acknowledge and deliver all such further and supplemental
indentures of mortgage, deeds of trust, mortgages, financing statements,
continuation statements, security agreements and/or any other instruments and
conveyances as may be reasonably requested by the Lender to effectuate the
intention of this Agreement and to provide for the securing and payment of the
principal of and interest on the Note according to the terms thereof.
10.18 Lender's Approval. Wherever prior written approval of Lender is
required under the terms and conditions of this Agreement, Lender hereby agrees
to not unreasonably withhold said approval.
10.19 Merger and Integration. This Agreement and the attached exhibits and
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 or binding.
10.20 Schedule 1. Schedule 1 attached hereto is an integral part of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed or caused to be executed
this Agreement under seal as of the date first above written.
COASTAL UTILITIES, INC.
By: XXXX X. XXXX
-------------------------------
Title: Executive Vice President
-----------------------------
(SEAL)
Attest: XXXX XXXXXXXX
----------------------------
Asst. Secretary
RURAL TELEPHONE FINANCE COOPERATIVE
By: XXXXXXX XXXXXX, III
-------------------------------
Assistant Secretary-Treasurer
(SEAL)
Attest: BLUEPENDER SELIGAL
----------------------------
Secretary-Treasurer"
SCHEDULE 1
1. The "Commitment" shall mean $108,688,889.
2. The Mortgage is the Modification to Deed to Secure Debt and Security
Agreements by and between Borrower and Lender dated as of even date
herewith.
3. The months relating to the Payment Date are January, April, July and
October.
4. The method of amortization referred to in Section 2.03 shall be based upon
level debt service (with one year principal deferral).
5. The amount referred to in Section 2.05 is $10,868,889.
6. The date of Borrower's financial statement referred to in Section 4.06 is
December 31, 1998.
7. The chief place of business referred to in Section 4.12 and address of
Borrower referred to in Section 10.07 is X.X. Xxx 000, 000 Xxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxx 00000-0000.
8. The government authorities referred to in Section 4.13 are the Georgia
Public Service Commission and the Federal Communications Commission.
9. The special conditions referred to in Section 5.05 are as follows:
1. Prior to the initial Advance of funds from this Loan, Lender shall
receive, in form and content satisfactory to Lender, the following:
a) Evidence of a common equity capital contributions of no less than
$51,000,000 into the Borrower.
b) Evidence of the Georgia Public Service Commission's approval of
the acquisition transaction and Borrowers incurrence of the
secured term loan and line of credit totaling $118,688,889; and
c) Evidence of the conveyance of the business office and
headquarters building located in Hinesville to Borrower or an
affiliate thereof. Any and all lease agreements relating to these
buildings to be entered into by Borrower shall be subject to
Lenders prior review and approval.
2. Borrower hereby agrees that a portion of the GA 543-9004 loan shall be
used to fully refinance all outstanding loan funds on the existing
RTFC loans to Borrower designated GA 543-A-01, GA 543-A-02, and GA
543-A-03 (the "Prior Notes"). At the time of such refinancing, all
unadvanced loan funds under the Prior Notes shall
be rescinded. Any commitment fees being held by RTFC at the time of
the refinancing and, if applicable, recission, will be refunded in
accordance with RTFC's policy for those commitment fees. Borrower will
not pay a prepayment fee in conjunction with the refinancing of the
existing RTFC loans.
3. Borrower acknowledges and agrees to the cancellation of RTFC line of
credit # GA 5433-06 effective with the initial Advance of RTFC Loan #
GA 543-9004 for the purpose of completing the acquisition of Coastal
Utilities, Inc. Any funds outstanding under said line of credit at the
time of the cancellation will be transferred to Borrower's new secured
line of credit designated GA 543-5107.
4. Borrower acknowledges, accepts and agrees to the cancellation of its
Class A voting membership in RTFC and the refund of its $1,000
membership fee in the form of a check within 60 days of the initial
Advance of RTFC Loan # GA 543-9004 for the purpose of completing the
acquisition of Coastal Utilities, Inc.
10. The purpose referred to in Section 6.05 for the A-01 Loan is to: (a)
refinance its existing indebtedness outstanding to RTFC; (b) fund the
acquisition costs associated with acquiring Coastal Utilities, Inc. and its
subsidiaries, (c) finance certain transaction related expenses (not to exceed
$3,820,000); and (d) to purchase 10% SCCs.
11. The special affirmative covenants referred to in Section 6.06 are not
applicable.
12. The special negative covenants referred to in Section 7.04 are not
applicable.
SECURED PROMISSORY NOTE
$108,688,889 March 29, 2000
COASTAL UTILITIES, INC., a Georgia corporation (herein called the "Borrower'),
for value received hereby promises to pay, without setoff, deduction, recoupment
or counterclaim, to the order of RURAL TELEPHONE FINANCE COOPERATIVE (herein
called the "Payee") at the Payee's office in Herndon, Virginia, or such other
location as the Payee may designate, in lawful money of the United States, the
sum of the aggregate unpaid principal amount of all Advances made by the Payee
pursuant to that certain Loan Agreement dated as of even date herewith, between
the Borrower and the Payee as it may be amended from time to time (herein called
the "Loan Agreement"), on the dates provided for in the Loan Agreement (except
that if not sooner paid, any balance shall be due and payable on a date fifteen
(15) years after the date hereof, such date being the "Maturity Date"), with
interest thereon in like money from the respective dates of each Advance (as
defined in the Loan Agreement) hereunder, at the rate or rates and payable at
the times provided in said Loan Agreement together with any other amount payable
under the Loan Agreement.
This Note is secured under a certain Modification to Deed to Secure Debt and
Security Agreement and Pledge and Security Agreement dated as of even date
herewith by and between the Borrower and the Payee, as it may have been or shall
be supplemented, amended, restated or consolidated from time to time (herein
called the "Security Documents"). This Note is the Note referred to in, and has
been executed and delivered pursuant to, the Loan Agreement.
The principal hereof and interest accrued thereon and any other amount due under
the Loan Agreement may be declared to be forthwith due and payable in the
manner, upon the conditions, and with the effect provided in the Security
Documents or Loan Agreement.
The Borrower waives demand, presentment for payment, notice of dishonor,
protest, notice of protest, and notice of non-payment of this Note.
IN WITNESS WHEREOF the Borrower has caused this Note to be signed in its
corporate name and its corporate seal to be hereunto affixed and to be attested
by its authorized officers, all as of the day and year first above written.
COASTAL UTILITIES, INC.
By: XXXX X. XXXX
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Title: Executive Vice President
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(SEAL)
Attest: XXXX XXXXXXXX
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Assistant Secretary
