Exhibit 10.12
REVOLVING CREDIT LINE AGREEMENT
Intending to be legally bound by this Revolving Credit Line Agreement
("Agreement"), dated _May 15_________________, 2000, BANK OF HAWAII, whose
mailing address is X.X. Xxx XX, Xxxxxxx, Xxxx 00000 (the "Bank") and TELESOURCE
CNMI, INC., whose mailing address is KS Xxxxxx Building, Sadog Tasi, PPP 402,
Box 10000, Saipan, MP 96950 (the "Borrower") agree as follows:
I. Revolving Credit
1.01 In General. Subject to the terms of this Agreement and the other Loan
Documents, the Bank hereby establishes a credit facility in favor of the
Borrower (the "Credit Facility") under which the Bank will extend credit
to the Borrower from time to time until January 31, 2001, (the "Credit
Termination Date"), by way of Loans, issuances of commercial and standby
letters of credit, acceptances and issuances of xxxx of lading bonds,
pursuant to Section 1.02.
Each extension of credit shall be in such amount as the Borrower may
request, provided that the aggregate principal amount of all extensions
of credit at any one time outstanding shall not exceed $2,000,000.00 (the
"Commitment"). The Borrower may obtain credit, repay without penalty and
obtain further credit as provided for under this Agreement, from the date
hereof until the Credit Termination Date, in either the full amount of
the Commitment or any lesser sum.
1.02 Drawings. Borrower may draw on the Commitment in the following manner(s):
By obtaining a cash advances (each such cash advance herein referred to
as a "Loan") evidenced by a revolving promissory note (the "Master Note")
executed by Borrower in favor of Bank.
By obtaining the issuance of a nontransferable commercial or standby
letter of credit or acceptance pursuant to an application by Borrower on
the Bank's standard Commercial Letter of Credit Application and Agreement
or Standby Letter of Credit Application and Agreement.
By obtaining the issuance of a nontransferable xxxx of lading bond
pursuant to a Guaranty Agreement in Respect of Shipment of Goods between
Borrower and Bank on the Bank's standard form.
1.03 Purpose. The proceeds of the Loans and other extensions of credit under
the Credit Facility shall be used exclusively for capital expenditures
and general working capital flexibility purposes.
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1.04 Security. The Credit Facility and Loans and other extensions of credit
shall be secured by liens on or security interests in the following
collateral ("Collateral"), which liens or security interests shall be of
first priority unless otherwise approved by the Bank:
Borrower shall execute an assignment of twenty-one notes (the "Notes")
issued by Commonwealth Utilities Corporation ("CUC") with a face amount
of $3,780,000.00, which Notes are numbers 48 through 68 with maturity
dates commencing March 31, 2003 and ending on November 30, 2004, and
shall deliver to Bank physical possession of said Notes.
The assignment of said Notes shall include assignment of all collateral
securing the Notes, including without limitation the rights created (i)
under that certain Pledge and Security Agreement between the Borrower and
CUC dated October 19, 1999, including all power plant assets, and (ii)
under that Escrow Agreement dated December 13, 1999 between Borrower and
CUC.
1.05 Negative Pledge Agreement. Borrower shall execute a negative pledge
agreement whereby Borrower covenants not to grant a security interest in
or lien upon any of Borrower's interests in the Lease dated March 27,
1998 between CUC as lessor and Borrower as Lessee, of any personal
property located at Xxx Xx. 000 X 00, Xxxxxx, XXXX, including without
limitation, the Plant, and each piece of Plant Equipment and all material
used in connection with the Plant, as Plant and Plant Equipment are
defined in the Agreement for Design, Supply of Plant and Equipment,
Private Construction, Maintenance and Operation, and Transfer of
Ownership between Borrower and CUC dated June 10, 1997. The Negative
Pledge agreement shall provide that Borrower may pledge the Lease for
bonding purposes only, which bonding must be with a US Treasury listed
bonding company, and on the following conditions:
a. Borrower shall give written notice to the Bank of the terms and
conditions of the pledge and provide a copy of the agreement with
the bonding company to the Bank;
b. Bank may within thirty days after receipt of written notice of
the terms and conditions of the pledge and receipt of the copy of
the agreement with the bonding company to the Bank, declare the
entire remaining unpaid principal and interest of the credit line
and outstanding financial obligations of Borrower to Bank for any
other indebtedness then remaining unpaid by Borrower to Bank, due
and payable forthwith.
1.06 Guarantor. Repayment of all Loans and other extensions of credit under
the Credit Facility shall be jointly, severally, unconditionally and
absolutely guaranteed by the following persons and/or entities
("Guarantor"): Telesource International, Inc.
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1.07 Requests for Loans or Credit. In respect of each Loan and each other
extension of credit, the Borrower shall give to the Bank at least one
Business Day's telephonic notice of the Borrower's request therefor (in
each case confirmed prior to disbursement of the Loan or other extension
of credit by a written "Notice of Borrowing" in the form of Schedule 1.07
attached hereto). Unless otherwise directed in writing by the Borrower,
all cash advances shall be credited to the Borrower's Deposit Account No.
___________________, maintained with the Bank.
1.08 Interest; Repayment of Loans and Credit.
(a) Interest Rate. Borrower agrees to pay interest on the outstanding
principal balance of each Loan at a floating rate one percentage point
above the Base Rate in effect from time to time. "Base Rate" means the
primary index rate established from time to time by the Bank in the
ordinary course of its business and with due consideration of the money
market, and published by intrabank memoranda for the guidance of its loan
officers in pricing all of its loans which float with the Base Rate.
Any floating rate of interest will increase or decrease during the term
of this Agreement if there is an increase or decrease in the rate to
which the floating rate is tied. If the rate to which the floating rate
is tied is no longer available, the Bank will choose a new rate that is
based on comparable information.
Interest shall be computed on the basis of the actual number of days
elapsed between payments and on the basis of a 365-day year (or, in leap
years, on the basis of 366-day year).
In no event shall the Borrower be obligated to pay any amount under this
Agreement that exceeds the maximum amount allowable by law. If any sum is
collected in excess of the applicable maximum amount allowable by law,
the excess collected shall, at the Bank's discretion, be applied to
reduce the principal balance of the Loans or returned to the Borrower.
(2) Repayment of Loans.
(1) Payment Schedule. The Borrower agrees to pay to the Bank
interest on the principal amount of each Loan on the _____ day of
each month commencing on _____________________.
The Borrower agrees to pay in full on or before the Credit
Termination Date all principal and accrued interest then
outstanding under the Credit Facility, not required to have been
previously paid.
(2) Repayment of Letters of Credit, Acceptances and Xxxx of Lading
Bonds. Any draw under any letter of credit or acceptance or
payment under any xxxx of lading bond must be repaid in full by
the Borrower on the date such draw or payment is made. In the
event Borrower shall fail to make such repayment, it shall
automatically be made by a Loan hereunder and Borrower
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shall be deemed to have made a request for such loan pursuant to
Section 1.06 above.
(3) Currency, Place and Dates of Payments. Payments shall be made
in United States money at the Bank's address stated above, or at
such other place as the Bank shall have designated by written
notice to the Borrower. Any payment due on a day that is not a
Business day shall be made on the next succeeding Business day and
the extension of time shall be included in the computation of
interest. All payments shall be made net and free of all taxes,
imposts, withholdings or deductions of any nature whatsoever now
or hereafter imposed.
"Business day" means any day on which the Bank is open to the
public for carrying on substantially all of its banking functions.
(4) Evidence of Making and Repayment of Loans. The Bank's records
evidencing the date of disbursement and principal amount of each
Loan and the amounts of all repayments of principal and payments
of interest on each Loan shall constitute prima facie evidence of
the making and repayment of such Loans and of the payment of such
interest. However, the Bank's making of erroneous notations in its
records shall not affect the Borrower's obligation to repay the
outstanding balance of principal under a Loan, and accrued
interest thereon, as provided in this Agreement.
(5) Late Charges. If any payment under this Agreement is not made
when due, the Borrower will pay to the Bank a late charge in
respect of that payment, in the amount of 5% of the overdue
payment.
(6) Application of Payments. ___ Payments under this Agreement may
be applied by the Bank to the indebtedness evidenced by this
Agreement in any manner the Bank deems appropriate. The priority
of application elected by the Bank on any one occasion shall not
determine any such election in the future.
1.09 Fees. Borrower will pay the Bank's standard issuance, advisement, and any
other fees and charges in connection with any letter of credit or xxxx of
lading bond. Borrower shall also pay a facility fee of $20,000.00.
1.10 Evidence of Indebtedness; Loan Documents. The Credit Facility is or is to
be evidenced and/or secured by this Agreement and all such other
documents as the Bank may require from time to time to effectuate the
intent of this Agreement, together with all renewals, extensions and
modifications thereto (collectively the "Loan Documents").
1.11 Borrower's Obligations. The Borrower's obligations to pay, observe and
perform all indebtedness, liabilities, covenants and other obligations on
the part of the Borrower to
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be paid, observed and performed under this Agreement and the remainder of
the Loan Documents are herein collectively called the "Obligations".
II. Conditions of Lending
2.01 First Loan or Other Extension of Credit. The obligation of the Bank to
make the first Loan or other extension of credit under this Agreement is
subject to the satisfaction of all of the following conditions on or
before the date on which the Bank shall grant such Loan or other
extension of credit (the "Closing Date"):
(a) Documents Required for Closing. The Bank shall have received, in each
case in form and substance satisfactory to the Bank, such fully executed
originals or certified copies as the Bank may have requested of each of
the following, in each case as amended through the Closing Date:
(1) Loan Documents. All of the Loan Documents.
(2) Consents. Evidence that all parties to the Loan Documents
(except the Bank) have obtained all necessary and appropriate
authority, approvals and consents to execute and deliver the Loan
Documents.
(3) Organizational Documents. If any party to the Loan Documents
(except the Bank) is a corporation, partnership, trust,
association or other recognized legal entity other than a natural
person (a "Legal Entity"), all instruments pursuant to which such
Legal Entity was organized and by which its internal affairs are
governed and, if requested by the Bank, a Certificate of Good
Standing, evidencing such Legal Entity's good standing and
authority to conduct its business in the jurisdiction(s) in which
it conducts its business.
(4) Evidence of Priority. Evidence acceptable to the Bank that the
Bank's liens on and/or security interests in the Collateral have
the priority required by the Bank.
(5) Opinion(s) of Counsel. If requested by the Bank, an opinion or
opinions of counsel for the Borrower and any Guarantor, addressed
to the Bank, covering to the Bank's satisfaction (i) the due
authorization, execution, delivery, binding effect, and
enforceability of the Loan Documents, (ii) no undisclosed
litigation, (iii) no consents or approvals required, (iv) no
conflicts with any agreement or laws, and (v) such other matters
as Bank may require.
(6) Good Standing and Tax Clearance Certificates. If requested by
Bank a good standing certificate, or such equivalent certificate
issued by the appropriate governmental agency of the Commonwealth
of the Northern Mariana Islands, and a tax clearance certificate
evidencing that all taxes due
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from the Borrower to the Commonwealth of the Northern Mariana
Islands have been paid.
(7) Insurance. Evidence of the Borrower's compliance with the
provisions stated below in Section 4.06.
(b) Certain Other Events. On the Closing Date:
(1) The Borrower shall have paid to the Bank all fees and other
charges to have been paid in accordance with the terms hereof and
the other Loan Documents, including, without limitation, Section
1.10 of this Agreement.
(2) The representations and warranties contained in Article III
shall be true.
(3) No event shall have occurred and be continuing that (i)
constitutes an Event of Default, or (ii) with the giving of notice
or passage of time, or both, would constitute such an Event of
Default.
(4) No material adverse change shall have occurred in the
financial condition of the Borrower or Guarantor since the date of
the most recent of the Borrower's and Guarantor's financial
statements submitted to the Bank.
(5) No material adverse change shall have occurred in the physical
condition of the Borrower's assets since the date of this
Agreement.
(6) All legal matters incidental to the Closing shall be
satisfactory to legal counsel for the Bank.
2.02 Subsequent Loans or Extensions of Credit. The obligation of the Bank to
make the second or any subsequent Loan or other extension of credit is
subject to (i) the prior satisfaction of all conditions stated above in
Section 2.01(a), (ii) the satisfaction as of the date of such subsequent
Loan or other extension of credit of the conditions stated above in
Section 2.01(b) of this Agreement, and (iii) the delivery to the Bank of
such additional Loan Documents as may have been reasonably requested by
the Bank in respect to such subsequent Loan or other extension of credit.
III. Representations and Warranties
To induce the Bank to make the Commitment available to the Borrower, Borrower
makes the following representations and warranties to Bank, which
representations and warranties shall survive the execution of this Agreement and
continue so long as Borrower is indebted to Bank under the Loan Documents, and
until payment in full of the Obligations:
3.01 Organization. The Borrower, if it is a Legal Entity, as well as each
Legal Entity comprising the Borrower, is duly organized, validly existing
and in good standing
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under the laws of the jurisdiction of its organization, and has the
lawful power to own its properties and to engage in the business it
conducts.
3.02 No Breach. The execution and performance of the Loan Documents will not
immediately, or with the passage of time or the giving of notice, or
both:
(a) Violate any law or result in a default under any contract,
agreement, or instrument to which the Borrower is a party or by
which the Borrower or its property is bound; or
(b) Result in the creation or imposition of any security interest in,
or lien or encumbrance on, any of the assets of the Borrower,
except in favor of the Bank.
3.03 Authorization. The Borrower has the power and authority to incur and
perform the Obligations, and, if the Borrower is a Legal Entity, the
Borrower has taken all corporate, partnership, or other action necessary
to authorize the execution and delivery of the Loan Documents and its
incurring of the Obligations.
3.04 Validity. This Agreement is, and the remainder of the Loan Documents when
delivered will be, legal, valid, binding, and enforceable in accordance
with their respective terms.
3.05 Financial Statements. All financial statements heretofore given by the
Borrower to the Bank, including any schedules and notes pertaining
thereto, were prepared in accordance with generally accepted accounting
principles, consistently applied, ("GAAP") and fully and fairly present
the financial condition of the Borrower at the dates thereof and the
results of operations for the periods covered thereby, and as of the date
of this Agreement there have been no material adverse changes in the
financial condition or business of the Borrower from the date of the most
recent financial statements given to the Bank.
3.06 Taxes. Except as otherwise permitted by this Agreement, the Borrower has
filed all tax returns it was required by law to have filed prior to the
date of this Agreement, has paid or caused to be paid all taxes,
assessments, and other governmental charges that were due and payable
prior to the date of this Agreement, and has made adequate provision for
the payment of such taxes, assessments, or other charges accruing but not
yet payable, and the Borrower has no knowledge of any deficiency or
additional assessment in a materially important amount in connection with
any taxes, assessments, or charges not provided for on its books.
3.07 Compliance With Law. Except to the extent that the failure to comply
would not materially interfere with the conduct of the business of the
Borrower, the Borrower has complied with all applicable laws in respect
of: (1) restrictions, specifications, or other requirements pertaining to
products that the Borrower sells or to the services it
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performs; (2) the conduct of its business; and (3) the use, maintenance,
and operation of its properties.
3.08 Statements and Omissions. No representation or warranty by the Borrower
contained in this Agreement or in any certificate or other document
furnished by the Borrower pursuant to this Agreement contains any untrue
statement of material fact or omits to state a material fact necessary to
make such representation or warranty not misleading in light of the
circumstances under which it was made.
3.09 No Pending Actions. There is no pending or threatened litigation
affecting the Borrower or any Collateral that may have a material adverse
effect on the business of the Borrower or the Collateral.
3.10 No Other Assignment. Borrower has made no assignment any of the
promissory notes or collateral securing the notes, which notes evidence
the Guarantied Obligations of CUC under the Contract No. CUC-PG-97-C057,
and Borrower will not make any assignment without the prior written
consent of the Bank.
IV. Affirmative Covenants
For so long as the Commitment or any of the Obligations remains outstanding, the
Borrower will, unless otherwise permitted by the Bank in writing:
4.01 Payments. Punctually pay when due all sums which may be due under the
Loan Documents.
4.02 Accounting Records. Maintain accurate and proper accounting records and
books in accordance with GAAP, and provide the Bank with access to such
books and accounting records at the Bank's request during the Bank's
normal business hours.
4.03 Financial Reporting. Furnish the Bank with financial reports, certified
as true and correct by an officer of the Borrower, in reasonable detail
and form approved by the Bank, as follows:
(a) Not later than 120 days after and as of the end of each fiscal year
CPA-audited financial statements of the Borrower, which financial
statements shall include the balance sheet as of the close of such fiscal
year and statements of income, sources and uses of funds for such year,
earnings reinvested and changes in financial position for such year and
with a statement of current agings of accounts receivable and accounts
payable, all prepared in accordance with GAAP and all certified by an
independent certified public accountant acceptable to Bank;
(b) The financial statements of the Borrower required pursuant to clauses
(a) and (b) shall be accompanied by a compliance certificate in the form
attached as Schedule 4.03 certifying (i) the representations and
warranties set forth in Article III as being true and correct on and as
of such date, and (ii) that no Default or Event of Default has occurred
and is continuing;
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(c) Borrower shall (i) provide to Bank on an annual basis within
one-hundred twenty (120) days after each fiscal year end, Guarantor's
CPA-audited financial statements, all prepared in accordance with GAAP
and all certified by an independent certified public accountant
acceptable to Bank and (ii) provide to Bank on an annual basis copies of
Borrower's year-end tax returns;
(d) From time to time such other information as the Bank may reasonably
request.
4.04 Existence. If the Borrower is a Legal Entity, preserve and maintain the
Borrower's legal existence and timely file all necessary and appropriate
documents and exhibits and pay all appropriate fees and charges in
connection therewith.
4.05 Observance of Laws. Conduct the Borrower's business activities in an
orderly, efficient and regular manner and comply with all requirements of
all applicable state, federal and local laws, rules and regulations.
4.06 Insurance. Maintain and keep in force insurance of the types and in such
amounts as are satisfactory to the Bank, and in no event less than
amounts customarily carried in lines of business similar to the
Borrower's, including but not limited to, property and casualty,
commercial general liability and worker's compensation insurance, and
provide the Bank with a schedule or schedules or certificates of
insurance from time to time setting forth all insurance then in effect
along with copies of all such policies.
If real or personal properties are given to secure either the Obligations
or any guaranty given in support of the Obligations, such properties
shall be covered by property and casualty insurance acceptable to the
Bank, and such policies shall contain a mortgagee's clause and /or
lender's loss payable endorsement and shall require 30 days' prior
written notice to the Bank of any cancellation or material change in
coverage.
4.07 Facilities. Keep all of the Borrower's property and business premises in
a good state of repair and condition, make all necessary repairs,
renewals and replacements thereto from time to time so that such property
and business premises shall be fully and efficiently preserved and
maintained, keep such property and business premises free and clear of
all liens, charges or encumbrances except those consented to by the Bank
in writing and permit the Bank's authorized representatives to make
reasonable inspections of the Borrower's property and business premises.
4.08 Taxes and Other Liabilities. Pay and discharge when due all of the
Borrower's indebtedness, obligations, assessments and taxes, except such
as the Borrower may in good faith contest or as to which a bona fide
dispute may exist, provided that the
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Borrower has provided evidence satisfactory to the Bank regarding the
Borrower's ability to pay the disputed items in the event they are
determined to be justly due.
4.09 Notice to Bank. Promptly give notice to the Bank of (a) the occurrence of
any Event of Default, (b) any change in the name or organizational
structure of the Borrower, (c) any uninsured loss through fire, theft,
liability or property damage exceeding $10,000.00, (d) any pending or
threatened litigation affecting the Borrower or any Collateral involving
an amount exceeding $10,000.00, (e) any event which could have a material
adverse effect on the ability of the Borrower to continue its business
operations in the ordinary course, (f) any change in the Borrower's
principal place of business, and (g) any change in the location of any
Collateral.
4.10 Financial Condition. Maintain the Borrower's financial condition
according to the following standards, in each such case determined in
accordance with GAAP:
(a) Net Worth of not less than $5,000,000.00.
4.11 Hazardous Materials. Abide at all times by all applicable hazardous
material laws, rules and regulations and immediately notify the Bank of
any claim or threatened claim affecting any property owned, leased or
occupied by the Borrower.
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V. Negative Covenants
For so long as the Commitment or any of the Obligations remains outstanding, the
Borrower will not, without the prior written consent of the Bank:
5.01 Use of Funds. Use any of the proceeds of the Commitment for any purpose
except as set forth in Section 1.03 of this Agreement.
5.02 Other Indebtedness. Create, incur or permit to exist any liabilities
resulting from borrowing, loans or advances, secured or unsecured, except
for the liabilities of the Borrower to the Bank under this Agreement and
new borrowings not to exceed $2,000,000 in the aggregate provided that
such borrowing are subordinate to the liabilities of the Borrower to the
Bank hereunder.
5.03 Merger, Consolidation, Sale of Stock or Assets. Merge into or consolidate
with any Legal Entity, acquire or establish any operating subsidiaries or
acquire all or substantially all of the capital stock or assets of any
other legal entity, or (unless the Borrower is a publicly-held Legal
Entity) sell, or permit to be sold, assigned, pledged or transferred, any
interest in the Borrower or legal entities comprising the Borrower or any
of its operating subsidiaries; or sell, assign, transfer, pledge,
mortgage, or otherwise dispose of all or substantially all of the assets
of the Borrower, except in the ordinary course of its business.
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5.04 Guaranties. Guarantee or become liable in any way as a surety, endorser
(other than in the ordinary course of business), or accommodation
endorser or otherwise for the debt or obligation of any person or entity.
5.05 Business. Materially change the character of the Borrower's current
business, or engage in any type of business other than the Borrower's
current business.
5.06 Dividends. If the Borrower is a Legal Entity, and not a publicly-held
Legal Entity, declare or pay any dividends or partnership distributions
of any kind, or redeem, retire, purchase or otherwise acquire shares of
any class of the Borrower's stock or any partnership interest therein.
5.07 Salaries. Increase the salary or other compensation of any officer or
director of the Borrower above the present level of such salary or other
compensation as of the Closing Date.
VI. Bank's Rights Upon Default
6.01 Events of Default. Each of the following events is an "Event of Default"
under this Agreement:
(a) The Borrower's failure to pay when due any sum payable to the Bank
under the Loan Documents or under any other agreement or note between the
Bank and the Borrower, whether now existing or hereafter executed;
(b) The Borrower's or any Guarantor's failure to perform or observe any
other obligation of such Borrower or Guarantor to the Bank (including
without limitation all obligations undertaken in any of the Loan
Documents);
(c) Any Guarantor denies liability under, attempts to revoke, or
otherwise impairs the guaranty;
(d) The death, dissolution or insolvency of the Borrower or Guarantor;
(e) The commencement of any proceeding or the taking of any act by or
against the Borrower or Guarantor for any relief under bankruptcy,
insolvency or similar laws for the protection of debtors, or for the
appointment of a receiver of the business or assets of the Borrower or
any Guarantor or the Borrower's or Guarantor's inability (or admission of
inability) to pay his, her, or its debts as they become due;
(f) Any governmental authority having jurisdiction over the Borrower or
Guarantor revokes any authorization or permit materially affecting the
Borrower's or Guarantor's ability to do business;
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(g) The Borrower or Guarantor defaults in the payment of any material
debt owed by the Borrower or the Guarantor to any person or entity other
than the Bank, if such default permits the holder(s) to accelerate such
debt;
(h) Any representation, warranty, or other information made or furnished
by the Borrower or Guarantor in respect of the Credit Facility is or
shall be untrue or materially misleading;
(i) The Bank reasonably believes there has been a material impairment of
or decrease in either the Borrower's ability to pay or perform the
Obligations or the value of any collateral or guaranty given to secure
payment of the Obligations;
(j) Any third party obtains a court order enjoining or prohibiting the
Borrower, Guarantor or the Bank from performing any of its respective
obligations under the Loan Documents and such order is not discharged
within 60 days after its issuance; or
(k) The Borrower or Guarantor fails to pay when due any amount relating
to any plan governed by the Employee Retirement Income Security Act of
1974, as amended.
6.02 Bank's Rights. If an Event of Default shall occur and be continuing the
Bank shall have, in addition to any and all other rights and remedies,
legal or equitable, available to the Bank under any and all of the Loan
Documents or at law, the following additional rights and remedies:
(a) The absolute right to deny to the Borrower any further Loan or
extension of credit (the Bank's obligation to extend any further credit
to the Borrower shall immediately terminate);
(b) The right, at the option of the Bank, to declare, without notice, the
entire principal amount and accrued interest for any Loan or extension of
credit outstanding under this Agreement, plus any fees and charges
reasonably incurred by the Bank under any of the Loan Documents,
immediately due and payable; and
(c) The right, at the option of the Bank, to charge interest on any
principal amount outstanding under this Agreement at the rate of 18% per
year or three percentage points above the "Paying Rate", whichever is
greater (the "Default Rate"); the "Paying Rate" being the interest rate
which would otherwise be applicable if the Credit Termination Date has
not occurred or been accelerated; and, with respect to any overdue
principal and/or interest from and after maturity, whether or not by
acceleration, to determine the Paying Rate pursuant to Section 1.08(a) as
if the maturity date had been extended to the actual date that payment is
made to the Bank.
(d) The right to the ex parte appointment without bond of a receiver,
without regard to the value of any collateral or solvency of any party
liable for payment,
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observance or performance of the Obligations and regardless of whether
the Bank has an adequate remedy at law.
VII. Miscellaneous
7.01 Further Assurance. From time to time within five Business Days after the
Bank's demand, the Borrower will execute and deliver such additional
documents and provide such additional information as may be reasonably
requested by the Bank to carry out the intent of this Agreement.
7.02 Enforcement and Waiver by the Bank. The Bank shall have the right at all
times to enforce the provisions of the Loan Documents, as they may be
amended from time to time, in strict accordance with their terms,
notwithstanding any conduct or custom on the part of the Bank in
refraining from so doing at any time or times. The failure of the Bank at
any time or times to enforce its rights under such provisions, strictly
in accordance with the same, shall not be construed as having created a
custom in any way or manner contrary to specific provisions of the Loan
Documents or as having in any way or manner modified or waived the same.
All rights and remedies of the Bank are cumulative and concurrent and the
exercise of one right or remedy shall not be deemed a waiver or release
of any other right or remedy.
7.03 Expenses of the Bank. The Borrower will, on demand, reimburse to the Bank
all reasonable expenses, including reasonable attorneys' fees, incurred
by the Bank in connection with the administration, amendment,
modification, workout, or enforcement of the Loan Documents and the
collection or attempted collection of the indebtedness evidenced by the
Loan Documents, whether or not legal proceedings are commenced.
7.04 Notices. Any notices or consents required or permitted by this Agreement
or the remainder of the Loan Documents shall be in writing and shall be
deemed delivered if delivered in person or if sent by certified mail,
postage prepaid, return receipt requested, or by FAX, at the following
addresses, unless such address is changed by written notice hereunder:
BORROWER BANK
Telesource CNMI, Inc. Bank of Hawaii
K.S. Xxxxxx Building, Sadog Tasi X.X. Xxx XX
XXX 000, Xxx 00000 Xxxxxxx, XX 00000
Saipan, MP 96950 PHONE: (000) 000-0000
PHONE: (___) FAX: (000) 000-0000
Attn: Guam Regional Business
------------------- Banking Center Manager
FAX: (___)
-------------------
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7.05 Waiver and Release by the Borrower. To the maximum extent permitted by
applicable law, the Borrower (and each of them, if more than one):
(1) Waives notice and opportunity to be heard, after acceleration of the
indebtedness evidenced by the Loan Documents, before exercise by the Bank
of the remedy of setoff or of any other remedy or procedure permitted by
any applicable law or by any prior agreement with the Borrower, and,
except where specifically required by this Agreement or by any applicable
law, notice of any other action taken by the Bank;
(2) Waives presentment, demand for payment, notice of dishonor, and any
and all other notices or demands in connection with the delivery,
acceptance, performance, or enforcement of this Agreement, and consents
to any extension of time (and even multiple extensions of time for longer
than the original term), renewals, releases of any person or organization
liable for the payment of the Obligations under this Agreement, and
waivers or modifications or other indulgences that may be granted or
consented to by the Bank in respect of the Loans and other extensions of
credit evidenced by this Agreement; and
(3) Releases the Bank and its officers, agents, and employees from all
claims for loss or damage caused by any act or omission on the part of
any of them except willful misconduct.
7.06 Sales and Participations. The Borrower consents to the Bank's
negotiation, offer, and sale to third parties ("Participants") of the
Credit Facility or participating interests in the Credit Facility, to any
and all discussions and agreements heretofore or hereafter made between
the Bank and any Participant or prospective Participant regarding the
interest rate, fees, and other terms and provisions applicable to the
Credit Facility, and to the Bank's disclosure to any Participant or
prospective Participant, from time to time, of such financial and other
information pertaining to the Borrower and the Credit Facility as the
Bank and such Participant or prospective Participant may deem appropriate
(whether public or non-public, confidential or non-confidential, and
including information relating to any insurance required to be carried by
the Borrower and any financial or other information bearing on the
Borrower's creditworthiness and the value of any Collateral). The
Borrower acknowledges that the Bank's disclosure of such information to
any Participant or prospective Participant constitutes an ordinary and
necessary part of the process of effectuating and servicing the Credit
Facility.
7.07 Applicable Law. The substantive laws of the Territory of Guam shall
govern the construction of this Agreement and the rights and remedies of
the parties hereto.
7.08 Binding Effect. This Agreement shall inure to the benefit of the parties
hereto and their respective heirs, personal representatives, successors
and permitted assigns, and shall be binding on the parties hereto and
their respective heirs, personal representatives, successors and assigns.
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7.09 Merger. This Agreement and the remainder of the Loan Documents constitute
the full and complete agreement between the Bank and the Borrower with
respect to the Credit Facility, and all prior oral and written
agreements, commitments, and undertakings shall be deemed to have been
merged into the Loan Documents and such prior oral and written
agreements, commitments, and undertakings shall have no further force or
effect except to the extent expressly incorporated in the Loan Documents.
7.10 Amendments; Consents. No amendment, modification, supplement,
termination, or waiver of any provision of this Agreement or the other
Loan Documents, and no consent to any departure by the Borrower
therefrom, may in any event be effective unless in writing signed by the
Bank, and then only in the specific instance and for the specific purpose
given.
7.11 Assignments.
(a) The Borrower shall have no right to assign any of its rights or
obligations under the Loan Documents without the prior written consent of
the Bank.
(b) The Bank may sell participations in the Credit Facility, as
contemplated by Section 7.06 above, and the Bank may assign the Loan
Documents (or the receivables evidenced thereby) to a Federal Reserve
Bank or to any other agency or instrumentality of the United States of
America to support borrowings of Federal Funds.
7.12 Severability. If any provision of any of the Loan Documents shall be held
invalid under any applicable law, such invalidity shall not affect any
other provision of the Loan Documents that can be given effect without
the invalid provision, and, to this end, the provisions of the Loan
Documents are severable.
7.13 Bank's Right of Setoff; Security Interest in Accounts. At any time, the
Bank may set off obligations owed by the Bank to the Borrower (such as
balances in checking and savings accounts) against the Obligations,
whether or not an Event of Default shall have occurred or shall have been
declared, and without first resorting to other Collateral . To secure the
Obligations, the Borrower grants to the Bank a security interest in all
checking, savings, and other deposit accounts now or hereafter maintained
by the Borrower with the Bank.
7.14 Time is of the Essence. Time is of the essence under and in respect of
this Agreement.
7.15 Joint and Several Liability. lf more than one Borrower has signed this
Agreement, all Borrowers shall be liable under this Agreement jointly,
and each of them severally, for the payment, observance, and performance
of all of the Obligations.
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7.16 Headings. The headings of the various provisions of this Agreement are
inserted for convenience of reference only and shall not affect the
meaning or construction of any provision.
7.17 Counterparts. This Agreement may be executed in counterparts, each of
which shall be an original instrument and all of which shall together
constitute one and the same agreement.
VIII. Definitions
8.01 Definitions The following terms used herein shall have the following
meanings (such meanings to be equally applicable to both the singular and
plural of the terms defined unless otherwise indicated):
"Business Day" shall have the meaning given in Section 1.08(B)(2).
"Closing Date" shall have the meaning given in Section 2.01.
"Collateral" shall have the meaning given in Section 1.04.
"Commitment" shall have the meaning given in Section 1.01.
"Credit Facility" shall have the meaning given in Section 1.01.
"Credit Termination Date" shall have the meaning given in Section 1.01.
"Default Rate" shall have the meaning given in Section 6.02(c).
"Event of Default" shall have the meaning given in Section 6.01.
"GAAP" shall have the meaning given in Section 3.05.
"Guarantor" shall have the meaning given in Section 1.06.
"Legal Entity" shall have the meaning given in Section 2.01(a)(3).
"Loan " shall mean a either a cash advance or an automatic repayment of a
draw under a letter of credit or a payment made under a xxxx of lading
bond, pursuant to Section 1.02.
"Loan Documents" shall have the meaning given in Section 1.10.
"Long Term Debt" means any obligation of the Borrower which by its terms
matures more than one year from the date as of which the calculation is
made, and any obligation maturing within one year from such date which is
renewable or extendable at any obligor's option to a date beyond one year
from such date.
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"Notice of Borrowing" shall have the meaning given in Section 1.07.
"Obligations" shall have the meaning given in Section 1.11.
"Participant" shall have the meaning given in Section 7.06.
"Paying Rate" shall have the meaning given in Section 6.02(c).
"Total Liabilities" means all liabilities of the Borrower, on a
consolidated basis, that should, in accordance with GAAP, be classified
as liabilities on the Borrower's financial statements.
8.02 References. All references to Sections are to Sections of this Agreement
unless otherwise indicated.
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8.03 Interpretation. The headings of the Sections are for the convenience of
reference only and shall not affect the meaning or construction of any
provision hereof.
IN WITNESS WHEREOF, the Borrower and the Bank have duly executed this Agreement.
BORROWER:
TELESOURCE CNMI, INC.
By: /s/X.X. Xxxxxxxx
-----------------------------------
Its
BANK:
BANK OF HAWAII
By: /s/Xxxxx Xxxxxxx
-----------------------------------
Its
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