EXHIBIT 10.52.11
Loan No. ML 0883T1
AMENDED AND RESTATED FIRST SUPPLEMENT
TO THE MASTER LOAN AGREEMENT
THIS AMENDED AND RESTATED FIRST SUPPLEMENT (this "First Supplement") to the
Master Loan Agreement dated as of June 29, 2001, as amended by that certain
letter agreement (the "Letter Amendment"), dated as of even date herewith (as
the same may be amended, modified, supplemented, extended or restated from time
to time, the "MLA"), dated as of June 6, 2002, is made by and between CoBANK,
ACB ("CoBank") and GLOBE TELECOMMUNICATIONS, INC., INTERSTATE TELEPHONE COMPANY
and VALLEY TELEPHONE CO., INC. (collectively, the "Borrowers").
SECTION 1.
(A) The Loan Commitment. On the terms and conditions set forth in the
MLA and this First Supplement, CoBank agrees to make a loan to the Borrowers
(the "Loan"), by means of one or more advances in an amount not to exceed
$40,000,000 (the "Commitment") less the aggregate amount of outstanding Letters
of Credit (as hereinafter defined). All of the Borrowers shall be jointly and
severally liable for the Loan, however incurred. References to the Borrowers
with respect to the Loan or any portion thereof shall mean each Borrower on a
joint and several basis. Under the Commitment, amounts borrowed and later repaid
may not be reborrowed. The Commitment shall expire at 12:00 noon Eastern time on
December 31, 2002, or on such later date as CoBank may, in its sole discretion,
authorize in writing (the "Termination Date").
(B) Letter of Credit. The Borrowers may utilize an amount of the
Commitment not to exceed $1,050,000 to open irrevocable letters of credit
(individually, a "Letter of Credit" and, collectively, the "Letters of Credit")
for its account. Each Letter of Credit shall reduce the amount available under
the Commitment by the maximum amount capable of being drawn thereunder.
(1) Maximum Amount. The aggregate amount of Letters of Credit
outstanding for the account of the Borrowers plus the aggregate principal amount
of advances outstanding on the Loan at any time shall not exceed the Commitment.
(2) Reimbursement. The Borrowers shall be irrevocably and
unconditionally obligated forthwith without presentment, demand, protest or
other formalities of any kind, to reimburse CoBank for any amounts paid by
CoBank with respect to a Letter of Credit issued for the account of the
Borrower, including all fees, costs and expenses paid by CoBank. The Borrowers
hereby authorizes and directs CoBank, at CoBank's option, to make an advance
under the Loan in the amount of any payment made by CoBank with respect to any
Letter of Credit. If the Letter of Credit is payable in a foreign currency, the
amount owed by the Borrowers in connection with such Letter of Credit shall
equal an amount in United States Dollars equivalent to CoBank's actual cost of
settling its obligation under such Letter of Credit
Amended and Restated First Supplement/Globe/Interstate/Valley
Loan No. ML0883T1
in such foreign currency. All amounts paid by CoBank with respect to any Letter
of Credit that are not immediately repaid by the Borrowers shall be considered
part of the Loan and shall bear interest (i) from the time of such payment to
the date of receipt by the Borrowers of notice of such payment from CoBank, at
the National Variable Rate (as hereinafter defined) and (ii) after the date of
receipt of such notice by the Borrowers at the National Variable Rate plus two
percent (2.00%) per annum.
(3) Conditions of Issuance of Letters of Credit. In addition to
all other terms and conditions set forth in the MLA and this First Supplement,
the issuance by CoBank of any Letter of Credit shall be subject to the
conditions precedent that the Letter of Credit shall support a transaction
entered into in the ordinary course of the Borrowers' businesses and shall be in
such form, be for such amount, and contain such terms and conditions as are
reasonably satisfactory to CoBank. The expiration date of each Letter of Credit
shall be on a date which is the earlier of one year from its date of issuance or
the seventh (7th) day before the Maturity Date (as hereinafter defined);
provided, however, that the Letters of Credit may, if requested by the
Borrowers, provide by their terms, and on terms acceptable to CoBank, for
renewal for successive periods of one year or less (but not beyond the seventh
day prior to the Maturity Date), unless and until CoBank shall have delivered a
notice of nonrenewal to the beneficiary of such Letter of Credit.
(4) Request for Letters of Credit. The Borrowers shall give
CoBank at least three (3) Business Days' prior written notice, which shall be
irrevocable, specifying the date a Letter of Credit is requested to be issued,
identifying the beneficiary and describing the nature of the transactions
proposed to be supported thereby. Any notice requesting the issuance of a Letter
of Credit shall be accompanied by the form of the Letter of Credit to be
provided by CoBank. The Borrowers will also complete any application procedures
and documents required by CoBank in connection with the issuance of any Letter
of Credit.
(5) Obligations Absolute. The obligations of the Borrowers with
respect to the Letters of Credit, shall be irrevocable, shall remain in effect
until CoBank shall have no further obligations to make any payments or
disbursements under any circumstances with respect to any Letter of Credit,
shall be absolute and unconditional, shall not be subject to counterclaim,
setoff or other defense or any other qualification or exception whatsoever and
shall be made in accordance with the terms and conditions of the MLA and this
First Supplement under all circumstances, including, without limitation, any of
the following circumstances; provided that, in the case of any payment by CoBank
under any Letter of Credit, CoBank has not acted with gross negligence or
willful misconduct (as determined by a court of competent jurisdiction) in
determining that the demand for payment under such Letter of Credit complies on
its face with any applicable requirements for a demand for payment under such
Letter of Credit:
(a) Any lack of validity or enforceability of the MLA and
this First Supplement, any of the other Loan Documents or any documents or
instruments relating to any Letter of Credit;
(b) Any change in the time, manner or place of payment of,
or in any other term of, all or any of the obligations in respect of any
Letter of Credit or any
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Loan No. ML0883T1
other amendment, modification or waiver of or any consent to or departure
from any Letter of Credit, any documents or instruments relating thereto,
or any Loan Document in each case whether or not the Borrowers have notice
or knowledge thereof;
(c) The existence of any claim, setoff, defense or other
right that the Borrowers may have at any time against a beneficiary named
in a Letter of Credit, any transferee of any Letter of Credit (or any
Person for whom any such transferee may be acting), CoBank or any other
Person, whether in connection with the MLA and this First Supplement, any
Letter of Credit, the transactions contemplated hereby or any unrelated
transactions (including any underlying transaction between the Borrowers
and the beneficiary named in any such Letter of Credit);
(d) Any draft, certificate or any other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect, any errors, omissions, interruptions or delays
in transmission or delivery of any messages, by mail, telecopier or
otherwise, or any errors in translation or in interpretation of technical
terms;
(e) Payment under any Letter of Credit against presentation
of a demand, draft or certificate or other document which does not comply
with the terms of such Letter of Credit;
(f) Any defense based upon the failure of any drawing under
any Letter of Credit to conform to the terms of such Letter of Credit
(provided that any draft, certificate or other document presented pursuant
to such Letter of Credit appears on its face to comply with the terms
thereof), any nonapplication or misapplication by the beneficiary or any
transferee of the proceeds of such drawing or any other act or omission of
such beneficiary or transferee in connection with such Letter of Credit;
(g) The exchange, release, surrender or impairment of any
collateral or other security for the obligations;
(h) The occurrence of any Potential Default or Event of
Default; or
(i) Any other circumstance or event whatsoever, including,
without limitation, any other circumstance that might otherwise constitute
a defense available to, or a discharge of, the Borrowers or a guarantor.
Any action taken or omitted to be taken by CoBank under or in connection
with any Letter of Credit, if taken or omitted in the absence of gross
negligence or willful misconduct, shall be binding upon the Borrowers and
shall not create or result in any liability of CoBank to the Borrowers. It
is expressly understood and agreed that, for purposes of determining
whether a wrongful payment under a Letter of Credit resulted from CoBank's
gross negligence or willful misconduct, (i) CoBank's acceptance of
documents that appear on their face to comply with the terms of such Letter
of Credit,
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Loan No. ML0883T1
without responsibility for further investigation, regardless of any notice
or information to the contrary, (ii) CoBank's exclusive reliance on the
documents presented to it under such Letter of Credit as to any and all
matters set forth therein, including the amount of any draft presented
under such Letter of Credit, whether or not the amount due to the
beneficiary thereunder equals the amount of such draft and whether or not
any document presented pursuant to such Letter of Credit proves to be
insufficient in any respect (so long as such document appears on its face
to comply with the terms of such Letter of Credit), and whether or not any
other statement or any other document presented pursuant to such Letter of
Credit proves to be forged or invalid or any statement therein proves to be
inaccurate or untrue in any respect whatsoever, and (iii) any noncompliance
in any immaterial respect of the documents presented under such Letter of
Credit with the terms thereof shall, in each case, be deemed not to
constitute gross negligence or willful misconduct of CoBank.
(6) Effectiveness. Notwithstanding any termination of the Commitment
or repayment of the Loan, or both, the obligations of the Borrowers under this
Section 1(B) shall remain in full force and effect until CoBank shall have no
further obligations to make any payments or disbursements under any
circumstances with respect to any Letter of Credit.
(7) UCP. The Uniform Customs and Practice for Documentary Credits as
most recently published from time to time by the International Chamber of
Commerce (the "UCP") is hereby incorporated in this First Supplement and shall
be deemed incorporated by this reference into each Letter of Credit issued
pursuant to this First Supplement. The terms and conditions of the UCP shall be
binding on the parties to this First Supplement and each beneficiary of any
Letter of Credit issued pursuant to this First Supplement.
SECTION 2. Purpose. The proceeds of the Loan shall be used (i) subject to
satisfaction of the conditions precedent set forth in the Letter Amendment, to
make a dividend to Knology, Inc. ("Knology") for the purpose of financing
capital expenditures and general corporate purposes of Knology or its
subsidiary, Knology of Knoxville, Inc. ("Knoxville"), (ii) to finance capital
expenditures, working capital and general corporate purposes of the Borrowers
and (iii) to pay the expenses and fees incurred by the Borrowers in connection
with the closing of the Loan. The Borrowers agree that the proceeds of the Loan
shall be used only for the purposes set forth in this Section 2.
SECTION 3. Availability. Subject to Section 2 of the MLA, Section 9 hereof
and the conditions set forth in the MLA, advances will be made prior to the
Termination Date as provided in Section 1 of the MLA on a date selected by the
Borrowers (the "Funding Date").
SECTION 4. Fees.
(A) Origination and Structuring Fee. In consideration of the
Commitment, the Borrowers have paid to CoBank a loan structuring fee in the
amount of $100,000 and a loan origination fee in the amount of $200,000.
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(B) Commitment Fee. The Borrowers shall pay to CoBank a commitment fee
on the average daily unused portion of the Commitment at a rate of 0.375% per
annum (calculated on a 360-day basis), payable quarterly in arrears on the 20th
day of each January, April, July and October, commencing October 20, 2001;
provided, however, that the last such payment shall be due and payable on the
Termination Date.
(C) Letter of Credit Fee. The Borrowers shall pay to CoBank a letter
of credit fee for each calendar quarter (or portion thereof) in respect of all
Letters of Credit outstanding during such quarter, at a per annum rate equal to
the LIBOR Margin (as hereinafter defined) as in effect from time to time plus
one percent (1.00%) on the daily average aggregate amount of such Letters of
Credit outstanding, payable quarterly in arrears (i) by the 20th day of each
January, April, July and October, and (ii) on the later of the Maturity Date and
the date of termination of the last outstanding Letter of Credit.
(D) Other Fees. To CoBank, for its own account, such commissions,
issuance fees, transfer fees and other fees and charges incurred in connection
with the issuance and administration of each Letter of Credit as are customarily
and reasonably charged from time to time by CoBank for the performance of such
services in connection with similar letters of credit, or as may be otherwise
agreed to by CoBank, but without duplication of amounts payable under Subsection
(C) above.
SECTION 5. Interest.
(A) Rate Options; Etc. The unpaid principal balance of each advance
under the Loan shall accrue interest at the rate or rates determined or selected
by the Borrowers in accordance with this Section 5(A).
(1) Variable Rate Option. As to the portion of the unpaid
principal balance of the Loan selected by the Borrowers (such portion, and each
portion selected pursuant to Section 5(A)(2) and Section 5(A)(3) below, is
hereinafter referred to as a "Portion" of the Loan), interest shall accrue
pursuant to this variable rate option at a variable annual interest rate (the
"Variable Rate") equal at all times to the rate established by CoBank on the
first Business Day of each week. The rate of interest so established by CoBank
may not exceed CoBank's National Variable Rate (as hereinafter defined) in
effect on the date so established and shall be effective from and including the
first Business Day of each week to and excluding the first Business Day of the
next week. Any change in the National Variable Rate shall be effective on the
date established by CoBank, and CoBank shall notify the Borrowers promptly after
any such change. The term "National Variable Rate" shall mean the rate of
interest established by CoBank from time to time as its National Variable Rate.
The National Variable Rate is intended by CoBank to be a reference rate, and
CoBank may charge other borrowers rates at, above, or below that rate.
(2) LIBOR Option. As to any Portion or Portions of the Loan
selected by the Borrowers, in minimum amounts of $100,000, interest shall accrue
pursuant to this LIBOR Option at a fixed rate per annum equal to LIBOR (as
hereinafter defined) plus the LIBOR Margin applicable on the first day of the
applicable Interest Period (as hereinafter
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Loan No. ML0883T1
defined) or applicable from time to time as otherwise provided herein. Under
this option: (i) rates may be fixed for Interest Periods (as hereinafter
defined) of 1, 2, 3, or 6 months, as selected by the Borrowers; and (ii) rates
may only be fixed on a Banking Day (as hereinafter defined) or, at the option of
the Borrowers, on two (2) Banking Days' prior notice. "LIBOR" shall mean the
rate indicated by Telerate at Page 3750 (rounded upward to the nearest
thousandth) as having been quoted by the British Bankers Association at 11:00
a.m. London time on the date the Borrowers elect to fix a rate under this option
for the offering of U.S. dollar deposits in the London interbank market for the
Interest Period designated by the Borrowers. "Banking Day" shall mean a day on
which CoBank is open for business, dealings in U.S. dollar deposits are being
carried out in the London interbank market, and banks are open for business in
New York City and London, England. "Interest Period" shall mean the time period
chosen by the Borrowers during which the chosen fixed rate is to apply to a
Portion of the Loan, which period commences on the day the Borrowers elect to
fix a rate under this Section 5(A)(2) or under Section 5(A)(3) (or, at the
option of the Borrowers, two (2) Banking Days later). The Interest Period for
Portions accruing interest at the LIBOR Option rate shall be 1, 2, 3 or 6
months, as selected by the Borrowers, and the Interest Period shall end on the
day in the next calendar month or in the month that is 2, 3, or 6 months
thereafter which corresponds numerically with the day the Interest Period
commences; provided, however, that: (a) in the event such ending day is not a
Banking Day, such period shall be extended to the next Banking Day unless such
next Banking Day falls in the next calendar month, in which case it shall end on
the preceding Banking Day; and (b) if there is no numerically corresponding day
in the month, then such period shall end on the last Banking Day in the relevant
month. In the event Telerate ceases to provide such quotations or materially
changes the form or substance of such quotations (as determined by CoBank), then
CoBank will notify the Borrowers and the parties hereto will agree upon a
substitute basis for obtaining such quotations.
"LIBOR Margin" shall mean, for each Calculation Period, the applicable per annum
percentage set forth in the pricing table below opposite the Total Leverage
Ratio of the Borrowers, measured on a consolidated basis:
Total Leverage Ratio: LIBOR Margin:
--------------------- -------------
** 4.00:1 * 5.00:1 3.00%
** 3.00:1 * 4.00:1 2.50%
** 2.00:1 * 3.00:1 2.00%
* 2.00:1 1.50%
** Less than or equal to
* More than
"Calculation Period" shall mean each period commencing on each Adjustment Date
and ending on the day preceding each subsequent Adjustment Date. "Adjustment
Date" shall mean each date which is the fifth Business Day after receipt by
CoBank of (i) each Compliance Certificate delivered by the Borrowers pursuant to
Section 7(H)(8) of the MLA and (ii) if a decrease in the LIBOR Margin is
warranted, a written notice from the Borrowers to decrease such margin.
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Loan No. ML0883T1
(3) Quoted Rate Option. As to any Portion or Portions of the Loan
selected by the Borrowers, interest shall accrue pursuant to this quoted rate
option at a fixed annual interest rate (the "Quoted Rate") to be quoted by
CoBank in its sole and absolute discretion. Under this option, the interest rate
on any Portion of the Loan, in minimum amounts of $100,000, may be fixed for
such Interest Periods as may be agreeable to CoBank in its sole discretion in
each instance; provided, however, that such Interest Period shall not extend
beyond the Maturity Date (as hereinafter defined) and such Interest Period may
only expire on a Business Day.
(4) Selection And Changes of Rates. The Borrowers shall select
the rate option applicable to the Loan on the date the Loan is advanced.
Thereafter, with respect to the Portion of the Loan accruing interest at the
Variable Rate, the Borrowers may, on any Business Day subject to Section 5(A)(3)
above, elect to have a Quoted Rate apply to all or a part of such Portion in the
minimum amounts provided above, and on any Banking Day, subject to Section
5(A)(2), elect to have a LIBOR Option rate apply to all or a part of such
Portion in the minimum amounts provided above. In addition, with respect to all
or a part of any Portion of the Loan accruing interest pursuant to the Quoted
Rate or LIBOR Option rate, the Borrowers may, subject to Sections 5(A)(2) and
5(A)(3) above, on the last day of the Interest Period for such Portion, elect to
fix the interest rate accruing on all or a part of such Portion for an Interest
Period pursuant the Quoted Rate or the LIBOR Option rate. In the absence of any
such election, interest shall automatically accrue on such Portion of the Loan
at the Variable Rate. From time to time the Borrowers may elect, on any Business
Day prior to the expiration of the Interest Period for any Portion of the Loan
accruing interest pursuant to the Quoted Rate or the LIBOR Option rate, and upon
payment of a Surcharge or a LIBOR Surcharge, as applicable (each as defined in,
and calculated pursuant to, Section 6 hereof) to convert all, but not part, of
such Portion of the Loan so that it accrues interest at the Variable Rate or any
combination of the Variable Rate and the fixed rate options described in
Sections 5(A)(2) and 5(A)(3) hereof in accordance with the terms thereof.
Notwithstanding any other provision hereof to the contrary, the Borrowers may
have outstanding at any time not more than an aggregate of five (5) separate
Portions. Except for the initial selection, all interest rate selections
provided for herein shall be made by telephonic or written request of an
authorized employee of the Borrowers by 12:00 noon, Eastern time, on the
relevant day. In taking actions upon telephonic requests, CoBank shall be
entitled to rely on (and shall incur no liability to the Borrowers in acting
upon) any request made by a person identifying himself or herself as one of the
persons authorized by the Borrowers to select interest rates hereunder.
Upon the occurrence and during the continuance of an Event of Default, as
the Interest Periods for Portions of the Loan accruing interest at a Quoted Rate
or a LIBOR Option rate expire, at CoBank's option, such Portions of the Loan
shall be converted to the Variable Rate option and the Quoted Rate and the LIBOR
Option rate will not be available to the Borrowers until all Events of Default
are no longer continuing.
(5) Accrual of Interest. Interest shall accrue pursuant to the
Quoted Rate option or the LIBOR Option rate selected by the Borrowers from and
including the first day of the applicable Interest Period to but excluding the
last day of such Interest Period. If the Borrowers elect to refix the interest
rate on any Portion of the Loan accruing interest at the
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Loan No. ML0883T1
Quoted Rate or the LIBOR Option rate pursuant to Section 5(A)(4) above, the
first day of the new Interest Period shall be the last day of the preceding
Interest Period. In the absence of any such election, interest shall accrue on
such Portion at the Variable Rate from and including the last day of such
Interest Period. If the Borrowers elect to convert from either of the fixed rate
options described in Sections 5(A)(2) or 5(A)(3) hereof to the Variable Rate or
another fixed rate option pursuant to Section 5(A)(4) upon payment of the
Surcharge or LIBOR Surcharge as provided in Section 5(A)(4) above, interest at
the applicable fixed rate shall accrue through the day before such conversion
and either (i) the first day of any new Interest Period shall be the date of
such conversion, or (ii) interest at the Variable Rate shall accrue on the
Portion of the Loan so converted from and including the date of conversion.
(B) Payment and Calculation. Interest shall be payable quarterly in
arrears by the twentieth (20th) day of the month following the end of each
calendar quarter. Interest shall be calculated on the actual number of days the
Loan is outstanding on the basis of a year consisting of 360 days. In
calculating accrued interest, the date the advance under the Loan is made shall
be included and the date any principal amount of the Loan is repaid or prepaid
shall be excluded as to such amount.
SECTION 6. Prepayment and Surcharge. The Borrowers may, on one Business
Day's prior written notice, prepay in full or in part any Portion of the Loan
accruing interest at a Variable Rate and, may, on two Business Days' prior
written notice, prepay in full or in part any Portion of the Loan accruing
interest at either of the fixed rate options described in Sections 5(A)(2) or
5(A)(3). Notwithstanding the foregoing, the Borrowers' right to prepay any
amount accruing interest at a Quoted Rate (whether such payment is made
voluntarily, as a result of an acceleration, or otherwise) shall be conditioned
upon the payment of a prepayment Surcharge as defined and calculated below and
the Borrowers right to prepay any amount accruing interest at a LIBOR Option
rate (whether such payment is made voluntarily, as a result of an acceleration
or otherwise) shall be conditioned upon the payment of a LIBOR Surcharge as
defined and calculated below. Unless otherwise agreed, all prepayments will be
applied to principal installments on a pro rata basis and to such Portions of
the Loan as CoBank shall specify. For purposes of calculating the Surcharge and
LIBOR Surcharge provided for in this Section 6, early conversion of a Portion of
the Loan accruing interest pursuant to a Quoted Rate or a LIBOR Option rate so
that it accrues interest at a different rate pursuant to Section 5(A)(4) shall
be deemed a prepayment in full of that portion of the Loan. Upon any such early
conversion or any prepayment of any Portion of the Loan accruing interest
pursuant to a Quoted Rate, and as a condition to any voluntary prepayment, the
Borrowers shall pay to CoBank, on the date of such prepayment or early
conversion, a surcharge ("Surcharge") in an amount equal to the sum of: (a) the
present value of any funding losses incurred or imputed by CoBank to have been
incurred as a result of such prepayment for the period such amount was scheduled
to have been outstanding at such Quoted Rate; plus (b) 1/2 of 1 percent (0.50%)
on the amount prepaid or converted. Upon any such early conversion or any
prepayment of any Portion of the Loan accruing interest pursuant to the LIBOR
Option rate, and as a condition to any voluntary prepayment, the Borrowers shall
pay to CoBank, on the date of such prepayment or early conversion, a surcharge
("LIBOR Surcharge") in an amount equal to the present value of any funding
losses incurred or imputed by CoBank to have been incurred as a result of such
prepayment for the period such amount was scheduled to have been outstanding at
such LIBOR
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Loan No. ML0883T1
Option rate. Such Surcharge and such LIBOR Surcharge shall be determined and
calculated in accordance with methodology established by CoBank which shall be
customary for the industry and consistent with CoBank's past practice for
calculating such surcharge.
SECTION 7. Repayment of the Loan.
(A) Scheduled Reductions to Commitment and Mandatory Repayment.
On June 30, 2002 and September 30, 2002 (each, a "Commitment Reduction Date"),
the Commitment shall be permanently reduced by $787,984 and $802,759
respectively. No reduction in the Commitment shall obligate the Borrowers to
make any payment of principal in respect of the Loan unless, and then only to
the extent that, the then unpaid principal balance of the Loan plus the
aggregate amount of outstanding Letters of Credit exceeds the Commitment as then
reduced and in effect. If, upon the permanent reduction of the Commitment on a
Commitment Reduction Date, the unpaid principal balance of the Loan plus the
aggregate amount of Outstanding Letters of Credit exceeds the Commitment as then
reduced and in effect, repayment of the Loan to the extent of such excess shall
be due on the 20th day of the month immediately succeeding such Commitment
Reduction Date.
(B) Scheduled Repayments. Commencing on January 20, 2003 and on the
twentieth (20th) day of each April, July, October and January occurring
thereafter, the Borrowers shall repay the principal amount of the Loan in 34
consecutive payments equal to the amount of principal scheduled to be repaid on
such date as set forth on Schedule 7(A) hereto, with the last such quarterly
principal payment installment due and payable on April 20, 2011 (the "Maturity
Date"). If any repayment date is not a Business Day, then the principal
repayment then due shall be paid on the next Business Day and shall continue to
accrue interest until paid. If not sooner required to be repaid, all advances
under the Loan and all other amounts due and owning hereunder and under the
other Loan Documents relating to the Loan shall be due and payable on the
Maturity Date.
(C) Mandatory Repayments from Net Proceeds of Asset Dispositions.
Within 180 days following receipt of the Net Proceeds (as hereafter defined),
from any Asset Disposition (as hereinafter defined), the Commitment shall be
permanently reduced and the Borrowers shall repay the outstanding principal
balance of the Loan in an amount equal to such Net Proceeds to the extent that
such proceeds are not reinvested within such period in similar equipment or
assets that are used or useful in the business of the Borrower. "Asset
Disposition" means the disposition, whether by sale, lease, transfer, loss,
damage, destruction, condemnation, or otherwise of any or all of the assets of
the Borrowers or any of their subsidiaries other than (i) sales of inventory in
the ordinary course of business, (ii) dispositions of obsolete equipment not
used or useful in the business of the Borrowers or any of their subsidiaries and
(iii) sales of Investments permitted under Subsection 8(E) of the MLA for fair
value. "Net Proceeds" means cash proceeds received by the Borrowers or any of
their subsidiaries from any Asset Disposition (including insurance proceeds,
awards of condemnation, and payments under notes or other debt securities
received in connection with any Asset Disposition), net of (i) the costs of such
sale, lease, transfer or other disposition (including taxes attributable to such
sale, lease, transfer or other disposition) and (ii) amounts applied to
repayment of Indebtedness (other than
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Loan No. ML0883T1
Indebtedness outstanding hereunder) secured by a lien on the asset or property
disposed and permitted under Section 8(A)(ii) of the MLA.
(D) Application of Repayments; Related Interest and Surcharge
Payments. All repayments made pursuant to this Section 7 shall be applied to
such Portions of the Loan as the Borrowers shall direct in writing and, in the
absence of such direction, shall first be applied to the Portion of the Loan
accruing interest pursuant to the Variable Rate option and then to such Portions
of the Loan accruing interest at either of the fixed rate options as the
Borrowers and CoBank shall agree. At the time of each mandatory repayment
pursuant to this Section 7, the Borrowers shall pay all accrued and unpaid
interest on the amount repaid, and any Surcharge or LIBOR Surcharge due pursuant
to Section 7 in connection with such repayment.
SECTION 8. Security. The Loan is secured by (i) that certain Stock Pledge
Agreement, dated as of even date herewith, made by and between Globe
Telecommunications, Inc. ("Globe") and CoBank (as the same may be amended,
modified, supplemented, extended or restated from time to time, the "Globe
Pledge Agreement"), pursuant to which Globe has granted to CoBank a
first-priority lien and security interest in all of its now owned or hereafter
acquired capital stock or voting securities in ITC Globe, (ii) that certain
Security Agreement, dated as of even date herewith, made by and between the
Borrowers and CoBank (as the same may be amended, modified, supplemented,
extended or restated from time to time, the "Borrowers Security Agreement"),
pursuant to which the Borrowers have granted to CoBank a first-priority lien and
security interest in substantially all of their now-owned and hereafter-acquired
personal property, (iii) that certain Continuing Guaranty, dated as of even date
herewith, made by ITC Globe for the benefit of CoBank (as the same may be
amended, modified, supplemented, extended or restated from time to time, the
"ITC Globe Guaranty"), (iv) that certain Stock Pledge Agreement, dated as of
even date herewith, made by and between Knology and CoBank (as the same may be
amended, modified, supplemented, extended or restated from time to time, the
"Knology Pledge Agreement"), pursuant to which Knology has granted to CoBank a
first-priority lien and security interest in all of its now owned or hereafter
acquired capital stock or voting securities in the Borrowers, and (v) that
certain Deed to Secure Debt, made by Globe Telecommunications, Inc. in favor of
CoBank and that certain Mortgage, made by Globe Telecommunications, Inc., in
favor of CoBank (as the same may be amended, modified, supplemented, extended or
restated from time to time, collectively the "Deeds to Secure Debt"), pursuant
to which Globe Telecommunications, Inc. has granted to CoBank a first-priority
lien and security interest in substantially all of its now-owned and
hereafter-acquired real property.
The ITC Globe Guaranty is secured by that certain Security Agreement, dated
as of even date herewith, made by and between ITC Globe and CoBank (as the same
may be amended, modified, supplemented, extended or restated from time to time,
the "ITC Globe Security Agreements"), pursuant to which ITC Globe has granted to
CoBank a first-priority lien and security interest in certain of its personal
property.
SECTION 9. Additional Conditions Precedent. In addition to the conditions
precedent set forth in the MLA, CoBank's obligation to make an advance under the
Loan shall be conditioned upon the satisfaction of each of the following
conditions precedent:
10
Amended and Restated First Supplement/Globe/Interstate/Valley
Loan No. ML0883T1
(A) No Material Adverse Change; Due Diligence. That from March 31,
2001, to the date of such advance, there shall not have occurred any event which
has had or would be reasonably likely to have a Material Adverse Effect on the
Borrowers, taken as a whole, and CoBank shall have been satisfied, in its sole
discretion, of the results of any due diligence review made by CoBank or its
agents or attorneys in connection with the Loan.
(B) Representations and Warranties. That the representations and
warranties of the Borrowers and any other party (except CoBank) contained in the
MLA, this Supplement and the other Loan Documents are true and correct in all
material respects on and as of the date of such advance, as though made on and
as of such date.
(C) Advance Certificate. That CoBank receive a certificate, in the
form of Exhibit A attached hereto, dated as of the Funding Date, from an
appropriate officer of each of the Borrowers as to, among other things, the
continuing truth and accuracy of the representations and warranties of the
Borrowers under the Loan Documents to which it is a party and the satisfaction
of each of the conditions applicable to the making of the advance under the
Loan.
(D) Capital Contribution to CoBank. That the Borrowers have acquired
non-voting participation certificates in CoBank in an initial amount of $1,000.
(E) Other Information. That CoBank receive such other information
regarding the condition, financial or otherwise, and operations of the Borrowers
as CoBank shall reasonably request and such other certificates or documents as
CoBank shall reasonably request.
[Signatures appear on the following page]
11
First Supplement/Globe/Interstate/Valley
Loan No. ML0883T1
IN WITNESS WHEREOF, the Borrowers have caused this First Supplement to be
executed and delivered and attested under seal and CoBank has caused this First
Supplement to be executed and delivered, each by their duly authorized officers
as of the date first shown above.
CoBANK, ACB GLOBE TELECOMMUNICATIONS, INC.
By: By:
---------------------------------- ------------------------------------
Xxxx Xxxxxxx, Vice President Name:
------------------------------
Title:
-----------------------------
Attest:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
[CORPORATE SEAL]
INTERSTATE TELEPHONE COMPANY
By:
-----------------------------------
Name:
------------------------------
Title:
-----------------------------
Attest:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
[CORPORATE SEAL]
VALLEY TELEPHONE CO., INC.
By:
------------------------------------
Name:
------------------------------
Title:
-----------------------------
Attest:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
[CORPORATE SEAL]
First Supplement/Globe/Interstate/Valley
Loan No. ML0883T1
EXHIBIT A
ADVANCE CERTIFICATE
THIS CERTIFICATE is given by , the
--------------- -------------------------
of each of GLOBE TELECOMMUNICATIONS, INC., INTERSTATE TELEPHONE COMPANY and
VALLEY TELEPHONE CO., INC. (the "Borrowers"), pursuant to Section 5 of that
certain Master Loan Agreement, dated as of June 29, 2001 (the "MLA"), as amended
by that certain letter agreement, dated as of June 6, 2002, each among Borrowers
and CoBank, ACB ("CoBank") and pursuant to Section 9(C) of that certain Amended
and Restated First Supplement to the Master Loan Agreement, dated as of June 6,
2002 (the "First Supplement"), among CoBank and the Borrowers. Capitalized terms
used herein and not otherwise defined herein shall have the meanings ascribed to
them in the MLA and in the First Supplement.
I hereby certify as follows:
1. I am the of each of the Borrowers and as such
----------------------
possess the knowledge and authority to certify to the matters herein set forth,
and the matters herein set forth are true and accurate to the best of our
present knowledge, information and belief after due inquiry;
2. All representations and warranties of the Borrowers contained in the MLA
and the other Loan Documents are true and correct in all material respects on
and as of the date hereof;
3. No Potential Default or Event of Default exists as of the date hereof or
will result from the making of the advance with respect to which this
Certificate is delivered; and
4. Each of the conditions specified in Section 5 of the MLA, and in Section
9 of the First Supplement, required to be satisfied on or prior to the date of
the making of the advance under the Loan has been fulfilled as of the date
hereof.
First Supplement/Globe/Interstate/Valley
Loan No. ML0883T1
IN WITNESS WHEREOF, I have executed in my corporate, not individual
capacity, this Certificate as of , 2002.
--------
GLOBE TELECOMMUNICATIONS, INC.
By:
------------------------------------
Name:
------------------------------
Title:
-----------------------------
INTERSTATE TELEPHONE COMPANY
By:
------------------------------------
Name:
------------------------------
Title:
-----------------------------
VALLEY TELEPHONE CO., INC.
By:
------------------------------------
Name:
------------------------------
Title:
-----------------------------
First Supplement/Globe/Interstate/Valley
Loan No. ML0883T1
Schedule 7(A)
AMORTIZATION SCHEDULE
Principal Payment Date Amount
---------------------- -----------
January 20, 2003 $ 817,811
April 20, 2003 833,145
July 20, 2003 848,766
October 20, 2003 864,680
January 20, 2004 880,893
April 20, 2004 897,410
July 20, 2004 914,236
October 20, 2004 931,378
January 20, 2005 948,842
April 20, 2005 966,632
July 20, 2005 984,757
October 20, 2005 1,003,221
January 20, 2006 1,022,031
April 20, 2006 1,041,194
July 20, 2006 1,060,717
October 20, 2006 1,080,605
January 20, 2007 1,100,867
April 20, 2007 1,121,508
July 20, 2007 1,142,536
October 20, 2007 1,163,959
January 20, 2008 1,185,783
April 20, 2008 1,208,016
July 20, 2008 1,230,667
October 20, 2008 1,253,742
January 20, 2009 1,277,249
April 20, 2009 1,301,198
July 20, 2009 1,325,595
October 20, 2009 1,350,450
January 20, 2010 1,375,771
April 20, 2010 1,401,567
July 20, 2010 1,427,846
October 20, 2010 1,454,618
January 20, 2011 1,481,892
April 20, 2011 1,509,675
-----------
Total $38,409,257
