MASTER SECURITY AGREEMENT
THIS MASTER SECURITY AGREEMENT, made as of September 10, 1999
("AGREEMENT"), by and between GENERAL ELECTRIC CAPITAL CORPORATION, a New
York corporation with an address at 0 XXXXX XXXX XXXXX, XXXXX 000, XXXX
XXXXXX, XXXXXXXX 00000, AND ITS ASSIGNS (together with is successors and
assigns, if any, "SECURED PARTY"), and METRO ONE TELECOMMUNICATIONS, INC., A
CORPORATION, organized and existing under the laws of the State of OREGON
with its chief executive offices located at 00000 XXXXXX XXXXXXX XXXXX,
XXXXXXXXX, XX 00000 ("DEBTOR").
In consideration of the promises herein contained and of certain other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Debtor and Secured Party hereby agree as follows:
1. CREATION OF SECURITY INTEREST.
Debtor hereby gives, grants and assigns to Secured Party, its successors
and assigns forever, a security interest in and against any and all property
listed on any collateral schedule now or hereafter annexed hereto or made a
part hereof ("COLLATERAL SCHEDULE"), and in and against any and all
additions, attachments, accessories and accessions thereto, any and all
substitutions, replacements or exchanges therefor, and any and all insurance
and/or other proceeds thereof (all of the foregoing being hereinafter
individually and collectively referred to as the "COLLATERAL"). The
foregoing security interest is given to secure the payment and performance of
any and all debts, obligations and liabilities of any kind, nature or
description whatsoever (whether primary, secondary, direct, contingent, sole,
joint or several, or otherwise, and whether due or to become due) of Debtor
to Secured Party, now existing or hereafter arising, including but not limited
to the payment and performance of certain Promissory Notes from time to time
identified on any Collateral Schedule (collectively "NOTES" and each a
"NOTE"), and any renewals, extensions and modifications of such debts,
obligations and liabilities (all of the foregoing being hereinafter referred
to as the "INDEBTEDNESS"). Notwithstanding the foregoing, and
notwithstanding anything to the contrary contained elsewhere in this
Agreement, to the extent that Secured Party asserts a purchase money security
interest in any items of Collateral ("PMSI COLLATERAL"): (i) the PMSI
Collateral shall secure only that portion of the Indebtedness which has been
advanced by Secured Party to enable Debtor to purchase, or acquire rights in
or the use of such PMSI Collateral (the "PMSI INDEBTEDNESS"), and (ii) no
other Collateral shall secure the PMSI Indebtedness.
2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF DEBTOR.
Debtor hereby represents, warrants and covenants as of the date hereof
and as of the date of execution of each Collateral Schedule hereto that:
(a) Debtor is, and will remain, duly organized, existing and in good
standing under the laws of the State set forth in the first paragraph of this
Agreement, has its chief executive offices at the location set forth in such
paragraph, and is, and will remain, duly qualified and licensed in every
jurisdiction wherever necessary to carry on its business and operations;
(b) Debtor has adequate power and capacity to enter into, and to
perform its obligations, under this Agreement, each Note and any other
documents evidencing, or given in connection with, any of the Indebtedness (all
of the foregoing being hereinafter referred to as the "DEBT DOCUMENTS");
(c) This Agreement and the other Debt Documents have been duly
authorized, executed and delivered by Debtor and constitute legal, valid and
binding agreements enforceable under all applicable laws in accordance with
their terms, except to the extent that the enforcement of remedies may be
limited under applicable bankruptcy and insolvency laws;
(d) No approval, consent or withholding of objections is required from
any governmental authority or instrumentality with respect to the entry into,
or performance by, Debtor of any of the Debt Documents, except such as may
have already been obtained;
(e) The entry into, and performance by, Debtor of the Debt Documents
will not (i) violate any of the organizational documents of Debtor or any
judgment, order, law or regulation applicable to Debtor, or (ii) result in
any breach of, constitute a default under, or result in the creation of any
lien, claim or encumbrance on any of Debtor's property (except for liens in
favor of Secured Party) pursuant to, any indenture mortgage, deed of trust,
bank loan, credit agreement, or other agreement or instrument to which Debtor
is a party;
(f) There are no suits or proceedings pending or threatened in court or
before any commission, board or other administrative agency against or
affecting Debtor which could, in the aggregate, have a material adverse
effect on Debtor, its business or operations, or its ability to perform its
obligations under the Debt Documents;
(g) All financial statements delivered to Secured Party in connection
with the Indebtedness have been prepared in accordance with generally
accepted accounting principles, and since the date of the most recent
financial statement, there has been no material adverse change;
(h) The Collateral is not, and will not be, used by Debtor for
personal, family or household purposes;
(i) The Collateral is, and will remain, in good condition and repair
and Debtor will not be negligent in the care and use thereof;
(j) Debtor is, and will remain, the sole and lawful owner, and in
possession of, the Collateral, and has the sole right and lawful authority to
grant the security interest described in this Agreement; and
(k) The Collateral is, and will remain, free and clear of all liens,
claims and encumbrances of every kind, nature and description, except for (i)
liens in favor of Secured Party, (ii) liens for taxes not yet due or for
taxes being contested in good faith and which do not involve, in the
reasonable judgment of Secured Party, any risk of the sale, forfeiture or
loss of any of the Collateral, and (iii) inchoate materialmen's, mechanic's,
repairmen's and similar liens arising by operation of law in the normal
course of business for amounts which are not delinquent (all of such
permitted liens being hereinafter referred to as "PERMITTED LIENS").
3. COLLATERAL.
(a) Until the declaration of any default hereunder, Debtor shall remain
in possession of the Collateral; provided, however, that Secured Party shall
have the right to possess (i) any chattel paper or instrument that constitutes
a part of the Collateral, and (ii) any other Collateral which because of its
nature may require that Secured Party's security interest therein be
perfected by possession. Secured Party, its successors and assigns, and their
respective agents, shall have the
right to examine and inspect any of the Collateral at any time during normal
business hours. Upon any request from Secured Party, Debtor shall provide
Secured Party with notice of the then current location of the Collateral.
(b) Debtor shall (i) use the Collateral only in its trade or business,
(ii) maintain all of the Collateral in good condition and working order,
(iii) use and maintain the Collateral only in compliance with all applicable
laws, and (iv) keep all of the Collateral free and clear of all liens, claims
and encumbrances (except for Permitted Liens).
(c) Debtor shall not, without the prior written consent of Secured
Party, (i) part with possession of any of the Collateral (except to Secured
Party or for maintenance and repair), (ii) remove any of the Collateral from
the continental United States, or (iii) sell, rent, lease, mortgage, grant a
security interest in or otherwise transfer or encumber (except for Permitted
Liens) any of the Collateral.
(d) Debtor shall pay promptly when due all taxes, license fees,
assessments and public and private charges levied or assessed on any of the
Collateral, on the use thereof, or on this Agreement or any of the other Debt
Documents. At its option, Secured Party may discharge taxes, liens, security
interests or other encumbrances at any time levied or placed on the
Collateral and may pay for the maintenance, insurance and preservation of the
Collateral or to effect compliance with the terms of this Agreement or any of
the other Debt Documents. Debtor shall reimburse Secured Party, on demand,
for any and all costs and expenses incurred by Secured Party in connection
therewith and agrees that such reimbursement obligation shall be secured
hereby.
(e) Debtor shall, at all times, keep accurate and complete records of
the Collateral, and Secured Party, its successors and assigns, and their
respective agents, shall have the right to examine, inspect, and make
extracts from all of Debtor's books and records relating to the Collateral at
any time during normal business hours.
(f) If agreed by the parties, Secured Party may, but shall in no event
be obligated to, accept substitutions and exchanges of property for property,
and additions to the property, constituting all or any part of the
Collateral. Such substitutions, exchanges and additions shall be
accomplished at any time and from time to time, by the substitution of a
revised Collateral Schedule for the Collateral Schedule now or hereafter
annexed. Any property which may be substituted, exchanged or added as
aforesaid shall constitute a portion of the Collateral and shall be subject
to the security interest granted herein. Additions to, reductions or
exchanges of, or substitutions for, the Collateral, payments on account of
any obligation or liability secured hereby, increases in the obligations and
liabilities secured hereby, or the creation of additional obligations and
liabilities secured hereby, may from time to time be made or occur without
affecting the provisions of this Agreement or the provisions of any
obligation or liability which this Agreement secures.
(g) Any third person at any time and from time to time holding all or any
portion of the Collateral shall be deemed to, and shall, hold the Collateral
as the agent of, and as pledge holder for, Secured Party. At any time and
from time to time, Secured Party may give notice to any third person holding
all or any portion of the Collateral that such third person is holding the
Collateral as the agent of, and as pledge holder for, the Secured Party.
4. INSURANCE.
The Collateral shall at all times be held at Debtor's risk, and Debtor
shall keep it insured against loss or damage by fire and extended coverage
perils, theft, burglary, and for any or all Collateral which are vehicles,
for risk of loss by collision, and where requested by Secured Party, against
other risks as required thereby, for the full replacement value thereof, with
companies, in amounts and under policies acceptable to Secured Party. Debtor
shall, if Secured Party so requires, deliver to Secured Party policies or
certificates of insurance evidencing such coverage. Each policy shall name
Secured Party as loss payee thereunder, shall provide for coverage to
Secured Party regardless of the breach by Debtor of any warranty or
representation made therein, shall not be subject to co-insurance, and shall
provide for thirty (30) days written notice to Secured Party of the
cancellation or material modification thereof. Debtor hereby appoints
Secured Party as its attorney in fact to make proof of loss, claim for
insurance and adjustments with insurers, and to execute or endorse all
documents, checks or drafts in connection with payments made as a result of
any such insurance policies. Proceeds of insurance shall be applied, at the
option of Secured Party, to repair or replace the Collateral or to reduce any
of the Indebtedness secured hereby.
5. REPORTS.
(a) Debtor shall promptly notify Secured Party in the event of (i) any
change in the name of Debtor, (ii) any relocation of its chief executive
offices, (iii) any relocation of any of the Collateral, (iv) any of the
Collateral being lost, stolen, missing, destroyed, materially damaged or worn
out, or (v) any lien, claim or encumbrance attaching or being made against
any of the Collateral other than Permitted Liens.
(b) Debtor will within ninety (90) days of the close of each fiscal
year of Debtor, deliver to Secured Party, Debtor's complete financial
statements, certified by a recognized firm of certified public accountants.
Debtor will, within thirty (30) days after the date on which they are filed,
deliver to Secured Party all Forms 10-K and 10-Q filed with the Securities
and Exchange Commission. Upon request Debtor will deliver to Secured Party
quarterly, within ninety (90) days of the close of each fiscal quarter of
Debtor, in reasonable detail, copies of Debtor's quarterly financial report
certified by the chief financial officer of Debtor. Upon request, Debtor
will deliver to Secured Party one copy of each financial statement, report,
notice or proxy statement sent by Debtor to shareholders generally and one
copy of each regular or periodic report, registration statement or
prospectus filed by Debtor with any securities exchange or the Securities
and Exchange Commission or any successor agency, such copies to be delivered
to Secured Party within thirty (30) days after they become available or are
otherwise filed. Any and all financial statements submitted and to be
submitted to Secured Party have and will have been prepared on a basis of
generally accepted accounting principles, and are and will be complete and
correct and fairly present Debtor's financial condition as at the date
thereof. Secured Party may at any reasonable time examine the books and
records of Debtor and make copies thereof.
(c) Within thirty (30) days after any request by Secured Party, Debtor
will furnish a certificate of an authorized officer of Debtor stating that he
has reviewed the activities of Debtor and that, to the best of his
knowledge, there exists no Event of Default (as described in Section 7) or
event which with notice or lapse of time (or both) would become an Event of
Default.
6. FURTHER ASSURANCES.
(a) Debtor shall, upon request of Secured Party, furnish to Secured
Party such further information, execute and deliver to Secured Party such
documents and instruments (including, without limitation, Uniform Commercial
Code financing statements) and do such other acts and things, as Secured
Party may at any time reasonably request relating to the perfection or
protection of the security interest created by this Agreement or for the
purpose of carrying out the intent of this Agreement. Without limiting the
foregoing, Debtor shall cooperate and do all acts deemed necessary or
advisable by Secured Party to continue in Secured Party a perfected first
security interest in the Collateral, and shall obtain and furnish to Secured
Party any subordinations, releases, landlord, lessor, or mortgagee waivers,
and similar documents as may be from time to time requested by, and which are
in form and substance satisfactory to, Secured Party.
(b) Debtor hereby grants to Secured Party the power to sign Debtor's
name and generally to act on behalf of Debtor to execute and file
applications for title, transfers of title, financing statements, notices of
lien and other documents pertaining to any or all of the Collateral. Debtor
shall, if any certificate of title be required or permitted by law for any of
the Collateral, obtain such certificate showing the lien hereof with respect
to the Collateral and promptly deliver same to Secured Party.
(c) Debtor shall indemnify and defend the Secured Party, its successors
and assigns, and their respective directors, officers and employees, from and
against any and all claims, actions and suits (including, without limitation,
related attorneys' fees) of any kind, nature or description whatsoever
arising, directly or indirectly, in connection with any of the Collateral.
7. EVENTS OF DEFAULT.
Debtor shall be in default under this Agreement and each of the other
Debt Documents upon the occurrence of any of the following "Event(s) of
Default";
(a) Debtor fails to pay any installment or other amount due or coming
due under any of the Debt Documents within ten (10) days after its due date;
(b) Any attempt by Debtor, without the prior written consent of Secured
Party, to sell, rent, lease, mortgage, grant a security interest in, or
otherwise transfer or encumber (except for Permitted Liens) any of the
Collateral;
(c) Debtor fails to procure, or maintain in effect at all times, any of
the insurance on the Collateral in accordance with Section 4 of this
Agreement;
(d) Debtor breaches any of its other obligations under any of the Debt
Documents and fails to cure the same within thirty (30) days after written
notice thereof;
(e) Any warranty, representation or statement made by Debtor in any of
the Debt Documents or otherwise in connection with any of the Indebtedness
shall be false or misleading in any material respect;
(f) Any of the Collateral being subjected to, or being threatened
with, attachment, execution, levy, seizure or confiscation in any legal
proceeding or otherwise;
(g) Any default by Debtor under any other agreement between Debtor and
Secured Party;
(h) Any insolvency or business failure of Debtor or any guarantor or
other obligor for any of the Indebtedness (collectively "GUARANTOR"), or if
Debtor or any Guarantor is a natural person, any death or incompetency of
Debtor or such Guarantor;
(i) The appointment of a receiver for all or of any part of the
property of Debtor or any Guarantor, or any assignment for the benefit of
creditors by Debtor or any Guarantor;
(j) The filing of a petition by Debtor or any Guarantor under any
bankruptcy, insolvency or similar law, or the filing of any such petition
against Debtor or any Guarantor if the same is not dismissed within thirty
(30) days of such filing;
(k) Any uncured default by Debtor under any obligation for borrowed
money, for the deferred purchase price of property or any lease if such
default allows for the acceleration of such obligations or repossession of
the collateral;
(l) Any dissolution, termination of existence, merger or consolidation
of Debtor or any Guarantor (such action being referred to as an "Event"),
unless not less than sixty (60) days prior to such Event: (x) such person is
organized and existing under the laws of the United States or any state, and
executes and delivers to Secured Party an agreement containing an effective
assumption by such person of the due and punctual performance of this
Agreement; and (y) Secured Party is reasonably satisfied as to the credit
worthiness of such person;
(m) If Debtor or any guarantor is a privately held corporation and
effective control of Debtor's or any guarantor's voting capital stock, issued
and outstanding from time to time, is not retained by the present
stockholders (unless Debtor shall have provided sixty (60) days' prior
written notice to Secured Party of the proposed disposition of stock and
Secured Party shall have consented thereto in writing); or
(n) If Debtor or any guarantor is a publicly held corporation as a
result of or in connection with a material change in the ownership of
Debtor's or any guarantor's capital stock, Debtor's or any guarantor's
debt-to-worth ratio equals or exceeds twice Debtor's or any guarantor's
debt-to-worth ratio as of the date of this Lease (unless Secured Party shall
have given its prior written consent thereto); or if Debtor or any guarantor
is a natural person, any death or incompetency of Debtor or such guarantor.
As used herein, "DEBT-TO-WORTH RATIO" shall mean the ratio of (x) total
liabilities which, in accordance with generally accepted accounting
principles ("GAAP") would be included in the liability side of a balance
sheet, to (y) tangible net worth including the sum of the par or stated value
of all outstanding capital stock, surplus and undivided profits, less any
amounts attributable to goodwill, patents, copyrights, mailing lists,
catalogs, trademarks, bond discount and underwriting expenses, organization
expense and other intangibles, all determined in accordance with GAAP.
8. REMEDIES ON DEFAULT.
(a) Upon the occurrence of an Event of Default under this Agreement,
the Secured Party, at its option, may declare any or all of the Indebtedness,
including without limitation the Notes, to be immediately due and payable,
without demand or notice to Debtor or any Guarantor. The obligations and
liabilities accelerated thereby shall bear interest (both before and after
any judgment) until paid in full at the lower of eighteen percent (18%) per
annum or the maximum rate not prohibited by applicable law.
(b) Upon such declaration of default, Secured Party shall have all of
the rights and remedies of a Secured Party under the Uniform Commercial Code,
and under any other applicable law. Without limiting the foregoing, Secured
Party shall have the right to (i) notify any account debtor of Debtor or any
obligor on any instrument which constitutes part of the Collateral to make
payment to the Secured Party, (ii) with or without legal process, enter any
premises where the Collateral may be and take possession and/or remove said
Collateral from said premises, (iii) sell the Collateral at public or private
sale, in whole or in part, and have the right to bid and purchase at said
sale, and/or (iv) lease or otherwise dispose of all or part of the
Collateral, applying proceeds therefrom to the obligations then in default.
If requested by Secured Party, Debtor shall promptly assemble the Collateral
and make it available to Secured Party at a place to be designated by Secured
Party which is reasonably convenient to both parties. Secured Party may also
render any or all of the Collateral unusable at the Debtor's premises and may
dispose of such Collateral on such premises without liability for rent or
costs. Any notice which Secured Party is required to give to Debtor under
the Uniform Commercial Code of the time and place of any public sale or the
time after which any private sale or other intended disposition of the
Collateral is to be made shall be deemed to constitute reasonable notice if
such notice is given to the last known address of Debtor at least five (5)
days prior to such action.
(c) Proceeds from any sale or lease or other disposition shall be
applied: first, to all costs of repossession, storage, and disposition
including without limitation attorneys', appraisers', and auctioneers fees;
second, to discharge the obligations then in default; third, to discharge any
other Indebtedness of Debtor to Secured Party, whether as obligor, endorser,
guarantor, surety or indemnitor; fourth, to expenses incurred in paying or
settling liens claims against the Collateral; and lastly, to Debtor, if
there exists any surplus. Debtor shall remain fully liable for any
deficiency.
(d) In the event this Agreement, any Note or any other Debt Documents
are placed in the hands of an attorney for collection of money due or to
become due or to obtain performance of any provision hereof, Debtor agrees to
pay all reasonable attorneys' fees incurred by Secured Party, and further
agrees that payment of such fees is secured hereunder.
(e) Secured Party's rights and remedies hereunder or otherwise arising
are cumulative and may be exercised singularly or concurrently. Neither the
failure nor any delay on the part of the Secured Party to exercise any right,
power or privilege hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, power or privilege preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege. Secured Party shall not be deemed to have waived any of its rights
hereunder or under any other agreement, instrument or paper signed by Debtor
unless such waiver be in writing and signed by Secured Party. A waiver on
any one occasion shall not be construed as a bar to or waiver of any right or
remedy on any future occasion.
(f) DEBTOR HEREBY UNCONDITIONALLY WAIVES ITS RIGHTS TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR
INDIRECTLY, THIS AGREEMENT, ANY OF THE OTHER DEBT DOCUMENTS, ANY OF THE
INDEBTEDNESS SECURED HEREBY, ANY DEALINGS BETWEEN DEBTOR AND SECURED PARTY
RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION OR ANY RELATED
TRANSACTIONS, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN
DEBTOR AND SECURED PARTY. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL
ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT
(INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS). THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT, ANY OTHER DEBT DOCUMENTS, OR
TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS TRANSACTION OR ANY
RELATED TRANSACTION. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED
AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
9. MISCELLANEOUS.
(a) This Agreement, any Collateral Schedules, any Note and/or any of
the other Debt Documents may be assigned, in whole or in part, by Secured
Party without notice to Debtor, and Debtor hereby waives any defense,
counterclaim or cross-complaint by Debtor against any assignee, agreeing that
Secured Party shall be solely responsible therefor. Debtor agrees that if
Debtor receives written notice of an assignment from Secured Party, Debtor
shall pay all payments and other amounts due under the assigned Note and
Collateral Schedule to such assignee or as instructed by Secured Party.
Debtor further agrees to confirm in writing receipt of the notice of
assignment as may be reasonably requested by Assignee.
(b) All notices to be given in connection with this Agreement shall be
in writing, shall be addressed to the parties at their respective addresses
set forth hereinabove (unless and until a different address may be specified
in a written notice to the other party), and shall be deemed given (i) on the
date of receipt if delivered in hand or by facsimile transmission, (ii) on
the next business day after being sent by express mail, and (iii) on the
fourth business day after being sent by regular, registered or certified
mail. As used herein, the term "business day" shall mean and include any day
other than Saturdays, Sundays, or other days on which commercial banks in New
York, New York are required or authorized to be closed.
(c) Secured Party may correct patent errors herein and fill in all blanks
herein or in any Collateral Schedule consistent with the agreement of the
parties.
(d) Time is of the essence hereof. This Agreement shall be binding,
jointly and severally, upon all parties described as the "Debtor" and their
respective heirs, executors, representatives, successors and assigns, and
shall inure to the benefit of Secured Party, its successors and assigns.
(e) This Agreement and its Collateral Schedules constitute the entire
agreement between the parties with respect to the subject matter hereof and
supersede all prior understandings (whether written, verbal or implied) with
respect thereto. This Agreement and its Collateral Schedules shall not be
changed or terminated orally or by course of conduct, but only by a writing
signed by both parties hereto. Section headings contained in this Agreement
have been included for convenience only, and shall not affect the
construction or interpretation hereof.
(f) This Agreement shall continue in full force and effect until all of
the Indebtedness has been indefeasibly paid in full to Secured Party. The
surrender, upon payment or otherwise, of any Note or any of the other
documents evidencing any of the Indebtedness shall not affect the right of
Secured Party to retain the Collateral for such other Indebtedness as may
then exist or as it may be reasonably contemplated will exist in the future.
This Agreement shall automatically be reinstated in the event that Secured
Party is ever required to return or restore the payment of all or any portion
of the Indebtedness (all as though such payment had never been made).
IN WITNESS WHEREOF, Debtor and Secured Party, intending to be legally
bound hereby, have duly executed this Agreement in one or more counterparts,
each of which shall be deemed to be an original, as of the day and year first
aforesaid.
SECURED PARTY: DEBTOR:
GENERAL ELECTRIC CAPITAL CORPORATION METRO ONE TELECOMMUNICATIONS, INC.
By: By: /s/ X.X. Xxxxxxx, Xx.
--------------------------------- -------------------------------
Title: Title: SVP & CFO
------------------------------ ----------------------------
/s/ R. Xxx Xxxxxxxxxx
R. XXX XXXXXXXXXX
VP, FINANCE
PROMISSORY NOTE
September 15, 1999
(Date)
00000 XXXXXX XXXXXXX XXXXX, XXXXXXXXX, XXXXXXXXXX XX., XX 00000
(Street Address of Maker) (Town) (County) (State)(Zip Code)
FOR VALUE RECEIVED, METRO ONE TELECOMMUNICATIONS, INC. ("Maker") promises,
jointly and severally if more than one, to pay to the order of FIRST SECURITY
BANK, N.A. or any subsequent holder hereof (each, a "Payee") at its office
located at 0000 X. X. XXXXXXX XXXX, XXXXX 000, XXXXXX, XX 00000 or at such
other place as Payee may designate, the principal sum of ONE MILLION SEVEN
HUNDRED FIFTY THOUSAND DOLLARS ($1,750,000.00), with interest thereon, from
the date hereof through and including the dates of payment, at a fixed
interest rate of EIGHT AND 77/100 PERCENT (8.77%) per annum, to be paid in
lawful money of the United States, in FORTY-SEVEN (47) consecutive monthly
installments of principal and interest of FORTY-THREE THOUSAND THREE HUNDRED
FIFTY-SEVEN AND 95/100 Dollars ($43,357.95) each (each, a "Periodic
Installment") and a final installment in the amount of $43,357.95. The first
Periodic Installment shall be due and payable on OCTOBER 15, 1999, and the
following Periodic Installments and the final installment shall be due and
payable on the same day of each succeeding month (each, a "Payment Date").
Such installments have been calculated on the basis of 360 day year of twelve
30-day months. Each payment may, at the option of the Payee, be calculated
and applied on an assumption that such payment would be made on its due date.
Payments shall be paid by wire transfer of immediately available funds to
Xxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000. Account No.: 00-000-000, ABA No.
000-000-000, or to such other account as holder may request.
The acceptance by Payee of any payment which is less than payment in full of
all amounts due and owing at such time shall not constitute a waiver of
Payee's right to receive payment in full at such time or at any prior or
subsequent time.
The Maker hereby expressly authorizes the Payee to insert the date value is
actually given in the blank space on the face hereof.
This Note is secured by Collateral Schedule No. F-1 to Master Security
Agreement dated September 10, 1999 ("Security Agreement.")
Time is of the essence hereof. If any installment or any other sum due under
this Note or any Security Agreement is not received within ten (10) days
after its due date, the Maker agrees to pay, in addition to the amount of
each such installment or other sum, a late payment charge of five percent
(5%) of the amount of said installment or other sum, but not exceeding any
lawful maximum. In the event that (i) Maker fails to make payment of any
amount due hereunder within ten (10) days after the same becomes due and
payable; or (ii) Maker is in default under, or fails to perform under any
term or condition contained in any Security Agreement following any
applicable notice and/or cure period, then the entire principal sum remaining
unpaid, together with all accrued interest thereon and any other sum payable
under this Note or any Security Agreement, at the election of Payee, shall
immediately become due and payable, with interest thereon at the lesser of
500 basis points over the fixed interest rate payable hereunder or the
highest rate not prohibited by applicable law from the date of such
accelerated maturity until paid (both before and after any judgment).
The Maker may prepay in full, but not in part, its entire indebtedness
hereunder upon payment of an additional sum as a premium equal to the
following percentages of the remaining principal balance for the indicated
period:
After the first anniversary and prior to the second annual
anniversary date of this Note: one percent (1)%
Prior to the third annual anniversary date of this Note: one
percent (1)%
Prior to the fourth annual anniversary date of this Note: one
percent (1)%
and zero percent (0%) thereafter, plus all other sums due hereunder
or under any Security Agreement
The Maker may not prepay the indebtedness prior to the first anniversary date
of this Note.
It is the intention of the parties hereto to comply with the applicable usury
laws; accordingly, it is agreed that, notwithstanding any provision to the
contrary in this Note or any Security Agreement, in no event shall this Note
or any Security Agreement require the payment or permit the collection of
interest in excess of the maximum amount permitted by applicable law. If any
such excess interest is contracted for, charged or received under this Note
or any Security Agreement, or if all of the principal balance shall be
prepaid, so that under any of such circumstances the amount of interest
contracted for, charged or received under this Note or any Security Agreement
on the principal balance shall exceed the maximum amount of interest
permitted by applicable law, then in such event (a) the provisions of this
paragraph shall govern and control, (b) neither Maker nor any other person or
entity now or hereafter liable for the payment hereof shall be obligated to
pay the amount of such interest to the extent that it is in excess of the
maximum amount of interest permitted by applicable law, (c) any such excess
which may have been collected shall be either applied as a credit against the
then unpaid principal balance or refunded to Maker, at the option of the
Payee, and (d) the effective rate of interest shall be automatically reduced
to the maximum lawful contract rate allowed under applicable law as now or
hereafter construed by the courts having jurisdiction thereof. It is further
agreed that without limitation of the foregoing, all calculations of the rate
of interest contracted for, charged or received under this Note or any
Security Agreement which are made for the purpose of determining whether such
rate exceeds the maximum lawful contract rate, shall be made, to the extent
permitted by applicable law, by amortizing, prorating, allocating and
spreading in equal parts during the period of the full stated term of the
indebtedness evidenced hereby, all interest at any time contracted for,
charged or received from Maker or otherwise by Payee in connection with such
indebtedness; provided, however, that if any applicable state law is amended
or the law of the United States of America preempts any applicable state law,
so that it becomes lawful for the Payee to receive a greater interest per
annum rate than is presently allowed, the Maker agrees that, on the effective
date of such amendment or preemption, as the case may be, the lawful maximum
hereunder shall be increased to the maximum interest per annum rate allowed
by the amended state law or the law of the United States of America.
The Maker and all sureties, endorsers, guarantors or any others (each such
person, other than the Maker, an "Obligor") who may at any time become liable
for the payment hereof jointly and severally consent hereby to any and all
extensions of time, renewals, waivers or modifications of, and all
substitutions or releases of, security or of any party primarily or
secondarily liable on this Note or any Security Agreement or any term and
provision of either, which may be made, granted or consented to by Payee, and
agree that suit may be brought and maintained against any one or more of
them, at the election of Payee without joinder of any other as a party
thereto, and that Payee shall not be required first to foreclose, proceed
against, or exhaust any security hereof in order to enforce payment of this
Note. The Maker and each Obligor hereby waives presentment, demand for
payment, notice of nonpayment, protest, notice of protest, notice of
dishonor, and all other notices in connection herewith, as well as filing of
suit (if permitted by law) and diligence in collecting this Note or enforcing
any of the security hereof, and agrees to pay (if permitted by law) all
reasonable expenses incurred in collection, including Payee's actual
attorneys' fees.
THE MAKER HEREBY UNCONDITIONALLY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR
INDIRECTLY, THIS NOTE, ANY OF THE RELATED DOCUMENTS, ANY DEALINGS BETWEEN
MAKER AND PAYEE RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION OR ANY
RELATED TRANSACTIONS, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED
BETWEEN MAKER AND PAYEE. The scope of this waiver is intended to be all
encompassing of any and all disputes that may be filed in any court
including, without limitation, contract claims, tort claims, breach of duty
claims, and all other common law and statutory claims). THIS WAIVER IS
IRREVOCABLE MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS NOTE, ANY RELATED DOCUMENTS, OR TO ANY OTHER
DOCUMENTS OR AGREEMENTS RELATING TO THIS TRANSACTION OR ANY RELATED
TRANSACTION. In the event of ligation, this Note may be filed as a written
consent to a trial by the court.
This Note and any Security Agreement constitute the entire agreement of the
Maker and Payee with respect to the subject matter hereof and supersedes all
prior understandings, agreements and representations, express or implied.
No variation or modification of this Note, or any waiver of any of its
provisions or conditions, shall be valid unless in writing and signed by an
authorized representative of Maker and Payee. Any such waiver, consent,
modification or change shall be effective only in the specific instance and
for the specific purpose given.
Any provision in this Note or any Security Agreement which is in conflict
with any statute, law or applicable rule shall be deemed omitted, modified or
altered to conform thereto.
METRO ONE TELECOMMUNICATIONS, INC.
By: /s/ X.X. Xxxxxxx Xx. (L.S.)
-------------------------------- -------------------------------
(Witness) Signature
X.X. Xxxxxxx Xx.
SVP & CFO
-------------------------------- -------------------------------
(Print Name) Print name (and title, if applicable)
-------------------------------- 00-0000000
(Address) Federal Tax ID Number
/s/ R. Xxx Xxxxxxxxxx
-------------------------------
R. XXX XXXXXXXXXX
VP, FINANCE
