EXHIBIT 10.41
FINANCING AGREEMENT BETWEEN
ABLE TELCOM HOLDING CORP.
AND COTTON COMMUNICATIONS, INC.
FEBRUARY 17, 1999
THIS AGREEMENT ("Agreement") confirms our discussion with respect to
the subject matter hereof and the parties agree as follows:
1. DEFINITIONS.
a. "Able" means Able Telcom Holding Corp.
b. "Borrower" means Cotton Communications, Inc.
c. "Loan" means the $32,000,000 loaned by Able to
Borrower pursuant to the terms of this Agreement.
d. "Note" means the non-recourse promissory note
attached hereto as EXHIBIT A evidencing the Loan.
e. "Senior Notes" means the 12% Senior Subordinated
Notes of Able initially due January 6, 2005, in the aggregate amount of
$10,000,000.
f. "Series B Preferred Stock" means up to 4,000 shares
of Series B Convertible Preferred Stock of Able issued as of June 30, 1998 in
the aggregate amount of $20,000,000.
2. LOAN. Able agrees to lend Borrower $32,000,000 on the signing of
this Agreement by Able and Borrower. The Loan will be made by Able advancing
funds by means of wire transfer to an account designated by Borrower.
The Loan will be evidenced by the Note and will be prepayable and
repayable, in whole or in part, as applicable, pursuant to the terms of said
Note on the earlier of (i) October 31, 2000 or (ii) the dates on which (A) Able
consummates the redemption of all or any part of the Series B Preferred Stock,
(B) Borrower sells all or any portion of the Series B Preferred Stock or all or
any portion of the Common Stock of Able issued upon conversion of the Series B
Preferred Stock or (C) Able pays, in whole or in part, the Senior Notes.
Upon the occurrence of any of the above events, Borrower will
immediately pay, in accordance with the terms of the Note, the proceeds received
by Borrower to Able within one (1) business day after Borrower receives the
proceeds.
Upon payment in full of the principal of the Note and all interest
accrued thereon, Able will xxxx the Note "paid" and return it to Borrower.
3. USE OF PROCEEDS. The proceeds of the Loan will be used by Borrower
to purchase the Series B Preferred Stock from the holders thereof pursuant to
Stock Purchase Agreements substantially in the forms attached hereto as EXHIBIT
B and EXHIBIT C and to purchase the Senior Notes in accordance with two letter
agreements substantially in the forms attached hereto as EXHIBIT D and EXHIBIT
E.
4. SECURITY FOR REPAYMENT. The Loan will be secured by a pledge of the
Series B Preferred Stock stock certificates and the Senior Notes pursuant to a
Pledge Agreement substantially in the form attached hereto as EXHIBIT F.
5. INDEMNIFICATION. In the event that Borrower, or its shareholders,
directors or officers (collectively and individually, the "Indemnified Parties")
become involved in any action, proceeding or investigation in connection with
any matter contemplated by this Agreement, Able shall reimburse the Indemnified
Parties for their reasonable legal and other expenses (including the cost of any
investigation and preparation) as they are incurred by the Indemnified Parties.
Able shall also indemnify and hold harmless the Indemnified Parties
from and against any and all losses, claims, damages and liabilities, joint or
several, related to or arising out of any matters contemplated by this Agreement
unless and to the extent that it shall be finally judicially determined that
such losses, claims, damages or liabilities resulted from the negligence or
willful misconduct of the Indemnified Parties.
6. DISCLOSURE. Neither this Agreement nor the undertaking and
commitment contained herein may be disclosed to or relied upon by any person or
entity other than the parties hereto, and their accountants, attorneys and other
advisors, without the prior written consent of the other party, except that
public disclosure hereof may be made as required by law, including the filing of
a Form 13D and a Form 8K with the Securities and Exchange Commission.
7. AMENDMENT; ASSIGNMENT. This Agreement may be modified or amended
only in writing. This Agreement is not assignable by Borrower without the prior
written consent of Able.
8. OTHER DOCUMENTS. Able and Borrower agree to act in good faith and to
negotiate, prepare and sign such other documents as shall be reasonably required
to further evidence the intent of this Agreement.
9. EXCULPATORY PROVISION. Borrower's obligations under this Financing
Agreement are subject to the Exculpatory Provision contained in the Note.
2
10. LEGAL INTENT. The parties intend to be legally bound by this
Agreement and agree that this Agreement contains the necessary material items to
be considered a contract.
This Agreement is entered into this 17th day of February, 1999.
COTTON COMMUNICATIONS, INC. ABLE TELCOM HOLDING CORP.
By: /s/ XXXXX XXXXX By: /s/ XXXXX X. XXX
-------------------------------- ------------------------------
Name: Xxxxx Xxxxx Name: Xxxxx X. Xxx
Title: President Title: President & CEO
3
EXHIBIT A
Note
EXHIBIT B
Stock Purchase Agreement
EXHIBIT C
Stock Purchase Agreement
EXHIBIT D
Letter Agreement
EXHIBIT E
Letter Agreement
EXHIBIT F
Stock Pledge Agreement
