Exhibit 10.17
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REVOLVING LINE OF CREDIT APPLICATION AND AGREEMENT
("AGREEMENT")
Name of Applicant: VIRGIN ISLANDS TELEPHONE CORPORATION,
a Virgin Islands corporation ("Applicant")
Address: X.X. Xxx 0000
Xx. Xxxxxx, X.X. Xxxxxx Xxxxxxx 00000
Applicant hereby applies to Rural Telephone Finance Cooperative ("RTFC"), a
South Dakota cooperative association, for a revolving line of credit loan in an
amount not to exceed five million dollars ($5,000,000). Applicant hereby agrees
that in the event RTFC approves this Agreement, the terms and conditions herein
and any additional terms and conditions as approved by RTFC, and as agreed to in
writing by Applicant, shall constitute a valid and binding agreement between
Applicant and RTFC. In consideration of their mutual promises hereunder and
other valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, RTFC and Applicant agree to the following terms and conditions:
1. REVOLVING CREDIT AND TERM. Upon approval of this Agreement, RTFC agrees to
make advances to the Applicant pursuant to the terms of this Agreement
("Advances") in the maximum amount specified above or such lesser amount as
may be approved by RTFC in accordance with the terms and conditions hereof.
Within such limits, the Applicant may borrow, repay and reborrow at any time
or from time to time for a period up to sixty (60) months from the Effective
Date (as defined herein) (the "Maturity Date").
2. REQUISITIONS. The Applicant shall give RTFC such prior notice of requests
for Advances as RTFC may reasonably require from time to time.
3. INTEREST RATE AND PAYMENT. The Applicant unconditionally promises and agrees
to pay, as and when due, interest on all amounts advanced hereunder from the
date of each Advance and to repay all amounts advanced hereunder with
interest on the Maturity Date. Interest shall be due and payable quarterly
on the first day of each January, April, July and October, commencing on the
first such date after such initial Advance; except that if RTFC gives notice
thereof to the Applicant before the first day of any month, interest shall
thereafter be due and payable on the
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15th day of such month and each month thereafter. RTFC shall invoice the
Applicant at least five days prior to the due date of any such interest
payment. All amounts shall be payable at RTFC's main office at Woodland
Park, 0000 Xxxxxxxxxxx Xxx, Xxxxxxx, Xxxxxxxx 00000-0000, or at such other
location as designated by RTFC from time to time.
The interest rate on all Advances will be equal to the Prevailing Bank
Prime Rate (as defined herein), plus one and one-half percent per annum or
such lesser total rate per annum as may be fixed by RTFC from time to time.
Interest will be computed on the basis of a year of 365 days. The interest
rate will be adjusted as determined from time to time by RTFC, provided
that no such adjustment may be effective on a date other than the first or
sixteenth day of any month, and will remain in effect until a subsequent
change in rate occurs.
The "Prevailing Bank Prime Rate" is that bank prime rate published in the
"Money Rates" column of any edition of The Wall Street Journal which RTFC
determines in its discretion to be the representative bank prime rate on
the day preceding the day on which an adjustment in the interest rate
hereof shall become effective. If such preceding day is not a publication
day for The Wall Street Journal, then the Prevailing Bank Prime Rate shall
be established by reference to such "Money Rates" column as of the last
publication day next preceding the day on which such adjustment shall
become effective; provided, if The Wall Street Journal shall cease to be
published, then the Prevailing Bank Prime Rate shall be determined by RTFC
by reference to another publication reporting bank prime rates in a similar
manner.
4. RTFC ACCOUNTS. RTFC shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Applicant resulting
from each Advance made from time to time and the amounts of principal and
interest payable and paid from time to time hereunder. In any legal action
or proceeding in respect of this Agreement, the entries made in such
account or accounts (whether stored on computer memory, microfilm, invoices
or otherwise) shall be presumptive evidence (absent manifest error) of the
existence and amounts of the Applicant's transactions therein recorded.
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5. CORPORATE AND REGULATORY APPROVALS. Applicant represents that it has
obtained any and all necessary corporate and regulatory approvals for
Applicant to execute and perform pursuant to this Agreement.
6. REPORTS. Applicant agrees to deliver to RTFC, promptly upon their becoming
available, a copy of (i) all financial and statistical reports which
Applicant may file with Rural Utilities Service ("RUS") and/or the Rural
Telephone Bank ("RTB"); (ii) any annual audit report prepared subsequent to
the submission of this Agreement; (iii) its monthly operating report within
twenty (20) days for any month in which there are outstanding pursuant to
this Agreement; and (iv) any other reports which RTFC reasonably requests
during the term of this Agreement.
7. FEES. If any amount outstanding and due hereunder shall not be paid when
due, Applicant agrees to pay on demand RTFC's reasonable costs of
collection or enforcement of this Agreement, or preparation therefor,
including reasonable fees of counsel. If payment of any principal and/or
interest due under the terms of this Agreement is not received at RTFC's
office in Herndon, Virginia, or such other location designated by RTFC,
within five (5) business days after the due date thereof (such unpaid
amount of principal and/or interest being herein called the "delinquent
amount," and the period beginning after such due date being herein called
the "late payment period"), Applicant will pay to RTFC, on demand, in
addition to all other amounts due under the terms of this Agreement, any
late payment charge as may then be in effect pursuant to RTFC's policy on
the delinquent amount for the late payment period.
8. LIMITATION ON ADVANCES. The amount of outstanding Advances hereunder in any
single calendar year may not at any one time exceed the amount approved by
RTFC.
9. REDUCE BALANCE TO ZERO. In the event this Agreement is for a term of more
than 12 months, then within 360 days of the first Advance, Applicant will
reduce to zero for a period of at least five consecutive business days (the
last day of such five-day period being herein called the "Zero Balance
Date") amounts outstanding hereunder, and will reduce to zero for a period
of at least five consecutive business days (the last day of such five
business-day period being called the "Subsequent Zero Balance Date")
amounts outstanding hereunder within 360 days from the
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Zero Balance Date or Subsequent Zero Balance Date, as appropriate.
10. CREDIT SUPPORT. This Agreement may not be used as credit support for any
other financings without RTFC's prior written approval.
11. NOTICES, ACCELERATION OF DEBT AND WAIVERS. While any amount hereunder is
outstanding, Applicant agrees to notify RTFC of any delinquency or default
on any of its financial obligations, any material adverse change in its
financial or business condition and if any representation or warranty made
in this Agreement has become untrue in any respect having a material
adverse effect on the financial condition or business of the Applicant. If
any delinquency, default or any other event as a result of which any holder
of indebtedness may declare the same due and payable shall occur and
continue for more than any applicable grace period, or any representation
or warranty herein shall become untrue, or Applicant shall fail to comply
with any term of this Agreement, or if the financial condition of Applicant
shall have changed to the extent that such change, in the reasonable
judgment of RTFC, materially increases RTFC's risk hereunder, then RTFC may
declare at any time all outstanding amounts hereunder immediately due and
payable in full with accrued interest, without presentment or demand, and
may withhold advances of funds. The Applicant waives the defense of usury
and all rights to setoff, counterclaim, deduction or recoupment.
12. PURPOSE, REPAYMENTS AND DEPOSIT. Applicant agrees that any and all Advances
hereunder will be used only for proper corporate purposes and consistently
with the requirements of outstanding security documents of Applicant
relating to its operations. Applicant agrees that this loan shall be
repayable out of Applicant's general funds and that loan proceeds will not
be deposited in Applicant's Trustee-Special Construction Fund Account or
any other account dedicated for secured financing advances.
13. ADDITIONAL INDEBTEDNESS. While any amount hereunder is outstanding and
unless otherwise disclosed in writing to RTFC, Applicant agrees that it
will not, without prior written consent of RTFC, create, incur, assume,
guarantee or otherwise become obligated for any additional indebtedness,
other than to RTFC, RUS or RTB except that the Ap-
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plicant may borrow against another loan previously approved by RTFC.
14. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND PAYMENT OBLIGATIONS. Applicant
agrees that the representations and warranties made in this Agreement shall
survive the making of Advances hereunder. Any unsatisfied payment
obligation hereunder shall survive the maturity and cancellation of this
Agreement.
15. REPRESENTATIONS AND WARRANTIES. Except as set forth and attached hereto,
Applicant represents and warrants as of the date of its application and on
the date of each and every Advance hereunder that:
(a) The Applicant has and will meet all obligations and be in compliance
with all instruments under which it is bound and that all information
submitted in support of its application is true, complete and correct;
(b) There has been no material adverse change in the Applicant's business or
financial condition from that set forth in its audited financial
statements;
(c) The Applicant has no outstanding loans from sources other than RUS, RTB
and RTFC;
(d) The Applicant is not in default in any material respect of any of its
obligations and no litigation is threatened or pending which would have
a material adverse impact on the Applicant's ability to perform under
this Agreement; and
(e) The Applicant has no lines of credit with any other lenders.
16. SUBMISSIONS. Applicant submits the following documents in support of this
Agreement (if not previously received by RTFC):
(a) The most recently prepared RUS Form 479 or income statement and balance
sheet for non-RUS borrowers and all attachments thereto; and
(b) RUS Form 479 or income statement and balance sheet for non-RUS borrowers
for the three preceding calendar years; and
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(c) Applicant's most recent annual audit report prepared by an independent
certified public accountant.
17. CONSENT TO PATRONAGE CAPITAL DISTRIBUTIONS. Applicant hereby consents that
the amount of any distributions with respect to Applicant's patronage which
are made in written notices of allocation (as defined in Section 1388 of
the Internal Revenue Code of 1986, as amended ("Code") including any other
comparable successor provision) and which are received from RTFC will be
taken into account by Applicant at their stated dollar amounts in the
manner provided in Section 1385(a) of the Code in the taxable year in which
such written notices of allocation are received.
18. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF VIRGINIA.
19. SEVERABILITY. If any term, provision or condition, or any part thereof, of
this Agreement shall for any reason be found or held invalid or
unenforceable by any court or governmental agency of competent
jurisdiction, such invalidity or unenforceability shall not affect the
remainder of such term, provision or condition nor any other term,
provision or condition, and this Agreement shall survive and be construed
as if such invalid or unenforceable term, provision or condition had not
been contained therein.
20. SETOFF. RTFC is hereby authorized at any time and from time to time without
prior notice to the Applicant to exercise rights of setoff or recoupment
and apply any and all amounts held, or hereafter held, by RTFC or owed to
the Applicant or for the credit or account of the Applicant against any and
all of the obligations of the Applicant now or hereafter existing
hereunder. RTFC agrees to notify the Applicant promptly after any such
setoff or recoupment and the application thereof, provided that the failure
to give such notice shall not affect the validity of such setoff,
recoupment or application. The rights of RTFC under this section are in
addition to any other rights and remedies (including other rights of setoff
or recoupment) which RTFC may have.
21. ADDITIONAL TERMS AND CONDITIONS. Additional terms and conditions set forth
herein or attached hereto are an integral part of this Agreement.
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22. TERMINATION AND CANCELLATION OF EXISTING AGREEMENT. Applicant agrees to the
termination and cancellation of its existing revolving line of credit with
RTFC (#__________), if any, on the Effective Date, in consideration of
RTFC's approval of this Agreement; provided, however, Applicant agrees that
any unsatisfied payment obligation owed pursuant to such agreement shall
survive its termination and cancellation.
23. INTEGRATION. This Agreement and the matters incorporated by reference
contain the entire agreement of the parties hereto with respect to the
matters covered and the transactions contemplated hereby, and no other
agreement, statement or promise made by any party hereto, or by any
employee, officer, agent or attorney of any party hereto, which is not
contained herein, shall be valid and binding. No amendment or waiver to
this Agreement shall be valid and binding except if in writing.
24. HEADINGS. The headings and subheadings contained in this Agreement are
intended to be used for convenience only and do not constitute part of this
Agreement.
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(For RTFC Use Only)
ADDITIONAL TERMS AND CONDITIONS
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NAME OF APPLICANT: VIRGIN ISLANDS TELEPHONE CORPORATION
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SIGNED BY: /s/ Xxxxxxxxx X. Prior, Jr.
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XXXXXXXXX X. PRIOR, JR.
TITLE: CHAIRMAN/SECRETARY
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DATE OF APPLICATION: 2/17/95
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APPROVAL OF AGREEMENT
This Agreement is approved, subject to any Additional Terms and Conditions noted
above, on the date set forth below and is effective as of March 21, 1995 (the
"Effective Date").
RURAL TELEPHONE FINANCE COOPERATIVE
Signed By: /s/ Xxxxxxx X. Xxxxxx, Chief Executive Officer
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Loan #: 02-70-501-S-06 Date of Approval: 3/21/95
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