Exhibit 10 (l)(l)(l)
LOAN AGREEMENT
Among
ROANOKE GAS COMPANY
and
SUNTRUST BANK
and
RGC RESOURCES, INC.
Date: November 22, 2002
TABLE OF CONTENTS
PAGE
ARTICLE I....................................................................1
RECITALS AND PURPOSES OF LOAN.............................................1
1.1 RECITALS...................................................1
1.2 PURPOSES...................................................1
ARTICLE II...................................................................1
DEFINITIONS...............................................................1
ARTICLE III..................................................................5
THE LOAN..................................................................5
3.1 THE LOAN ..................................................5
3.2 INTENTIONALLY OMITTED .....................................5
3.3 INTENTIONALLY OMITTED .....................................5
3.4 INTENTIONALLY OMITTED .....................................5
3.5 INTENTIONALLY OMITTED .....................................5
3.6 METHOD OF PAYMENT..........................................5
3.7 PREPAYMENTS................................................5
3.8 ILLEGALITY.................................................5
3.9 DISASTER...................................................5
3.10 FUNDING LOSS INDEMNIFICATION...............................6
3.11 INTENTIONALLY OMITTED .....................................6
3.12 GUARANTY...................................................6
ARTICLE IV...................................................................6
INTENTIONALLY OMITTED
ARTICLE V....................................................................6
INTENTIONALLY OMITTED
ARTICLE VI ..................................................................6
CONDITIONS OF LENDING......................................................6
6.1 BORROWING UNDER THE LOAN...................................6
6.2 INTENTIONALLY OMITTED......................................8
6.3 CONDITIONS FOR BANK'S BENEFIT .............................8
ARTICLE VII................................................................. 8
PAYMENT OF ADVANCES.......................................................8
7.1 UNDER THE LOAN.............................................8
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ARTICLE VIII................................................................ 8
GENERAL REPRESENTATIONS AND WARRANTIES....................................8
8.1 ORGANIZATION, QUALIFICATION, PROPERTIES....................8
8.2 AUTHORITY..................................................8
8.3 BINDING EFFECT AND ENFORCEABILITY..........................8
8.4 NO CORPORATE, PARTNERSHIP OR CONTRACT VIOLATION............9
8.5 FINANCIAL STATEMENTS.......................................9
8.6 PROCEEDINGS................................................9
8.7 APPROVALS..................................................9
8.8 ERISA......................................................9
8.9 COMPLIANCE.................................................9
8.10 USE OF PROCEEDS............................................10
8.11 NO DEFAULT.................................................10
8.12 TITLE TO PROPERTY, PERFECTION OF LIENS.....................10
8.13 RICO OR CCE ACTIONS........................................10
8.14 ACCURACY OF INFORMATION....................................10
8.15 LABOR DISPUTES AND ACTS OF GOD.............................10
8.16 OTHER AGREEMENTS...........................................10
8.17 OPERATION OF BUSINESS......................................10
ARTICLE IX...................................................................11
AFFIRMATIVE COVENANTS.....................................................11
9.1 FINANCIAL STATEMENTS, REPORTS..............................11
9.2 TAXES......................................................11
9.3 CORPORATE AND PARTNERSHIP FRANCHISES.......................11
9.4 INTENTIONALLY OMITTED......................................11
9.5 CORPORATE AND PARTNERSHIP EXISTENCE........................11
9.6 ACCESS TO PREMISES AND RECORDS.............................11
9.7 NOTICES OF DEFAULT.........................................11
9.8 INTENTIONALLY OMITTED......................................11
9.9 COMPLIANCE WITH LAWS.......................................11
9.10 ERISA......................................................11
9.11 FINANCIAL COVENANTS........................................12
9.12 NON-BANK DEBT..............................................12
9.13 INSURANCE..................................................12
9.14 ENVIRONMENTAL MATTERS......................................12
9.15 INDEMNITY..................................................14
9.16 GENERAL INFORMATION........................................14
ARTICLE X....................................................................14
NEGATIVE COVENANTS........................................................14
10.1 MERGERS, CONSOLIDATIONS....................................14
10.2 DISPOSITION OF ASSETS......................................14
10.3 INTENTIONALLY OMITTED......................................14
10.4 NEGATIVE PLEDGE............................................14
10.5 CHANGE IN CONTROL..........................................14
10.6 NO SALE AND LEASE BACK.....................................14
10.7 LOAN.......................................................14
10.8 CONTINGENT LIABILITIES.....................................14
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ARTICLE XI...................................................................15
EVENTS OF DEFAULT.........................................................15
11.1 EVENTS OF DEFAULTS.........................................15
11.2 REMEDIES...................................................16
ARTICLE XII..................................................................17
MISCELLANEOUS PROVISIONS..................................................17
12.1 NOTICES....................................................17
12.2 TERM OF AGREEMENT..........................................17
12.3 NO WAIVER..................................................17
12.4 SEAL, JURISDICTION.........................................17
12.5 CONSENT TO JURISDICTION....................................17
12.6 SEVERABILITY...............................................18
12.7 OFFSET.....................................................18
12.8 CHANGE, WAIVERS, ETC.......................................18
12.9 SINGULAR AND PLURAL........................................18
12.10 USE OF DEFINED TERMS.......................................18
12.11 BINDING EFFECT OF AGREEMENT................................18
12.12 HEADINGS...................................................18
12.13 ACCOUNTING TERMS...........................................18
12.14 COUNTERPARTS...............................................18
12.15 EXPENSES...................................................18
12.16 WAIVER OF JURY TRIAL.......................................19
12.17 FURTHER ASSURANCES.........................................19
12.18 INCORPORATION OF COMMITMENT................................19
12.19 TIME OF THE ESSENCE........................................19
12.20 ENTIRE AGREEMENT...........................................19
12.21 CONSTRUCTION AND CONFLICTS.................................19
12.22 ASSIGNMENT.................................................19
LIST OF EXHIBITS AND SCHEDULES
Schedule 2.1 - Permitted Encumbrances
Schedule 8.6 - Proceedings
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LOAN AGREEMENT
THIS LOAN AGREEMENT dated as of November 22, 2002, by and among ROANOKE GAS
COMPANY, a Virginia corporation (the "Borrower") (hereinafter referred to as the
"Borrower"); and SUNTRUST BANK, a Georgia banking corporation (the "Bank"), and
RGC RESOURCES, INC., a Virginia corporation, (the "Guarantor") provides:
ARTICLE I
RECITALS AND PURPOSES OF LOAN
1.1 RECITALS. Subject to the terms and conditions set forth in this
Agreement, the Bank agrees to make a certain loan to the Borrower, and the
Borrower agrees to borrow from the Bank a term loan in the amount of
$8,000,000.00 (the "Loan").
1.2 PURPOSE. The purpose of the Loan is to finance certain capital
needs of the Borrower, and to refinance certain short term debt of the Borrower.
ARTICLE II
DEFINITIONS
2.1 The terms defined in this Article II shall for all purposes of this
Agreement have the meanings herein specified unless the context expressly or by
necessary implication otherwise requires:
"Affiliate" means any Person (1) which directly or indirectly
controls, or is controlled by, or is under common control with, a Borrower; or
(2) which directly or indirectly beneficially owns or holds five percent (5%) or
more interest in a Borrower. The term "control" means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities, by
contract, or otherwise.
"Agreement" means this loan agreement between the Borrower, the Bank,
and the Guarantor, as amended, supplemented, modified or replaced from time to
time.
"Business" means the business carried on by the Borrower during the
fiscal year ended September 30, 2002, activities ancillary thereto and such
other activities as may be warranted as the result of changes in the natural gas
and propane industry and markets.
"Business Day" means any day other than Saturday, Sunday or other day
on which commercial banks in Roanoke, Virginia, are authorized or required to
close under applicable laws.
"Capitalized Lease Obligations" means with respect to any person any
and all lease obligations required or permitted under generally accepted
accounting principles to be capitalized on the books of such person.
"Closing Date" means November 22, 2002.
"Commitment" means the letter agreement dated October 10, 2002 from
the Bank, as may be amended from time to time, and accepted by the Borrower,
setting forth certain terms and conditions relating to the Loan, the terms of
which are incorporated in this agreement.
"Consolidated" when used with respect to Long Term Debt means Long
Term Debt of the Borrower and its Affiliates determined on a consolidated basis
eliminating intercompany items.
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"Consolidated Total Capitalization" means, as of the date of any
determination thereof, the sum of (i) Consolidated Long Term Debt, plus (ii)
current maturities of Consolidated Long Term Debt, plus (iii) consolidated
stockholders' equity.
"Customer" means the account debtor with respect to any of the
Receivables, the obligor on any chattel paper, the prospective purchaser with
respect to any contract right, and any person who enters into or proposes to
enter into any contract or other arrangement with Borrower pursuant to which
Borrower is to deliver any goods or other personal property or for whom Borrower
performs any service.
"Dollar(s)" means lawful money of the United States of America.
"Environmental Laws" means any Federal, state or local laws, rules,
ordinances or common law, and any judicial interpretation thereof, relating
primarily to the environment or to environmental protection, including, but not
limited to, the Clean Air Act, 42 U.S.C. Section 7401, ET SEQ.; Federal Water
Pollution Control Act, 33 U.S.C. Section 1251, ET SEQ.; Solid Waste Disposal
Act, 42 U.S.C. Section 6901, ET SEQ.; Comprehensive Environmental Response
Compensation and Liability Act, 42 U.S.C. Section 9601, ET SEQ.; National
Environmental Policy Act, 42 U.S.C. Section 4321, ET SEQ.; and Toxic Substances
Control Act, 15 U.S.C. Section 2601, ET SEQ.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the regulations and published interpretations thereof.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) which together with Borrower would be treated as a single employer
under Section 4001 of ERISA.
"Event of Default" means an event specified in Section 11.1 of this
Agreement.
"GAAP" means generally accepted accounting principles in the United
States.
"Guarantor" means RGC Resources, Inc., a Virginia corporation.
"Guaranty" means the guaranty between the Guarantor and the Bank
dated even date herewith, executed and delivered in connection with the Loan,
and any amendments or replacements thereof.
"Hazardous Materials" means all materials subject to regulation under
Environmental Laws, including, but not limited to, asbestos, polychlorinated
biphenyls (PCB's), petroleum products, and lead based paints.
"Head Office" means the principal office of the Bank located at 00
Xxxxxxxx Xxxx, X.X., Xxxxxxx, Xxxxxxxx 00000.
"Indebtedness" means with respect to any Person at any time (excluding
Shareholder Subordinated Debt), without duplication, (i) all obligations of such
Person for borrowed money, (ii) all obligations of such Person evidenced by
bonds, debentures, Note or other similar instruments, (iii) all obligations of
such Person upon which interest charges are customarily paid, (iv) all
obligations of such Person under conditional sale or other title retention
agreements relating to property purchased by such Person, (v) all obligations of
such Person issued or assumed as the deferred purchase price of property or
services (other than accounts payable to suppliers incurred in the ordinary
course of business and not overdue), (vi) all obligations of others secured by
any lien, security interest or encumbrance on property owned or acquired by such
person, whether or not the obligations secured thereby have been assumed, (vii)
all Capitalized Lease Obligations of such Person, and (viii) current liabilities
in respect of unfunded vested benefits under any Plan.
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"Interest Period" means the period commencing on the first day of each
calendar month and ending on the last day of each calendar month, provided that
the foregoing provisions relating to Interest Period are subject to the
following:
(a) No Interest Period may extend beyond the Termination Date;
(b) If an Interest Period would end on a day that is not a
Business Day, such Interest Period shall be extended to the next Business Day,
unless such Business Day would fall in the next calendar month, in which event
such Interest Period shall end on the immediately preceding Business Day;
(c) The initial Interest Period shall commence on the date the
Loan is made, and end on the last day in such calendar month.
"Inventory" means and includes (a) all goods (as defined in the
Uniform Commercial Code as adopted in Virginia (the "UCC")), now owned or
hereafter acquired by Borrower, which are held for sale or lease by Borrower or
are furnished or to be furnished by Borrower under contracts of service; (b) all
raw materials, work in process, finished goods, materials and supplies of every
kind used or consumed in connection with the manufacture, packing, shipping,
advertising or sale of such goods; and (c) all proceeds and products from the
sale or other disposition of such goods, including all goods returned or
repossessed, or acquired by Borrower by way of substitution or replacement, and
all additions and accessions thereto, and all documents and instruments (as
those terms are defined in the UCC) covering such goods, wherever located.
"LIBOR Interest Rate" shall have the same definition provided for the
term "Index" in the Note.
"Loan Documents" means, collectively, this Agreement, the Note, the
Guaranty, together with such additional certifications, consents, documents,
instruments and agreements, as reasonably requested by the Bank, and as may be
executed pursuant to, or transferred or delivered in connection with, this
Agreement.
"Loan" means the loan as described under Section 1.1 of this
Agreement.
"Long Term Debt" of any Person means (i) all Indebtedness of such
Person for borrowed money or which has been incurred in connection with the
acquisition of assets in each case having a final maturity of more than one year
from the date of origin thereof (or which is renewable or extendible at the
option of the obligor for a period or periods more than one year from the date
of origin), but excluding all payments in respect thereof that are required to
be made within one year from the date of any determination of Long Term Debt,
whether or not the obligation to make such payments shall constitute a current
liability of the obligor under GAAP, (ii) obligations secured by any lien upon
property or assets owned by such Person, even though such Person has not assumed
or become liable for the payment of such obligations, (iii) obligations created
or arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person, notwithstanding the fact that the
rights and remedies of the seller, lender or lessor under such agreement in the
event of default are limited to repossession or sale of property, (iv) all
capitalized rentals of such Person, and (v) all guaranties by such Person of
Long Term Debt of others.
"Mony Agreement" means that certain Note Agreement dated as of June 1,
1998, between the Borrower and accepted by The Mutual Life Insurance Company of
New York and Mony Life Insurance Company of America.
"Multiemployer Plan" means a Plan described in Section 4001(a)(3) of
ERISA which covers employees of the Borrower or any ERISA Affiliate.
"Note" means the note, evidencing the Loan, as executed and delivered
under this Agreement, and any and all renewals, modifications or extensions
thereof.
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"PBGC" means the Pension Benefit Guaranty Corporation.
"Permitted Encumbrances" means, as of any particular time, (a) liens
imposed by mandatory provisions of law such as for materialmen's, mechanics',
warehousemen's and other like liens arising in the ordinary course of business
securing charges for which payment is not yet due, (b) liens for taxes,
assessments and governmental charges or levies imposed upon any person or upon
such person's income or profits or property, if the same are not yet due and
payable or if the same are being contested in good faith and as to which
adequate reserves therefor have been established on the Borrower's books in
accordance with generally accepted accounting principles, (c) liens arising in
connection with any court proceedings, provided the execution of such liens is
effectively stayed and such liens are contested in good faith and adequate
reserves therefor have been established on the Borrower's books in accordance
with GAAP, (d) liens in favor of the Bank, (e) the extension, renewal or
replacement of any above-described items, (f) purchase money liens incurred in
the ordinary course of business and not exceeding over $500,000 in the aggregate
during the term of the Loan, and (g) such liens and encumbrances set forth on
the attached SCHEDULE 2.1.
"Person" means a corporation, association, partnership, limited
liability company, organization, business, division, individual or government or
political subdivision thereof or any governmental agency.
"Plan" means any employee pension benefit plan of the Borrower
covered by ERISA.
"Prime Rate" means the interest rate established from time to time by
the Bank and recorded in its credit administration division as a reference used
by the Bank in determining the lending rates on commercial Loan. The Prime Rate
is not intended to be the lowest rate of interest charged on any extension of
credit to any customer. Any change in the interest rate based on the Prime Rate
resulting from a change in the Prime Rate shall be effective as of the opening
of business on the day on which such change in the Prime Rate becomes effective.
"Prohibited Transaction" means a prohibited transaction as defined in
Section 406 of ERISA.
"Properties" means the lands, buildings, improvements and structures
now or later owned, leased, used or operated by the Borrower or the Guarantor,
as applicable.
"Receivables" means all accounts, accounts receivable, contract
rights, instruments, documents, chattel paper and general intangibles of
Borrower, whether now existing or hereafter arising or created, and whether or
not specifically sold or assigned to the Bank hereunder.
"Reportable Event" means a reportable event as defined in Section 4043
of ERISA that might constitute grounds for termination by the PBGC of an
employee benefit plan of the Borrower covered by ERISA or for the appointment by
the appropriate United States District Court of a trustee to administer any such
plan.
"Shareholder Subordinated Debt" means all indebtedness of Borrower to
its shareholders, now existing or hereafter to occur.
"Termination Date" means November 30, 2005.
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ARTICLE III
THE LOAN
3.1 THE LOAN.
(a) AMOUNT. The Bank agrees to lend to the Borrower the
principal sum of $8,000,000.00, upon the terms, covenants and conditions set
forth in this Agreement and in the Loan Documents. The Borrower agrees to accept
the Loan and expressly covenants to comply with and perform all of the terms,
covenants and conditions of this Agreement and the Loan Documents.
(b) NOTE. The Loan shall be evidenced by the Note in the amount
of the Loan, payable to the Bank in accordance with the terms thereof. The Note
shall bear interest at a rate equal to the LIBOR Interest Rate plus 100 basis
points. Interest on the Loan shall be calculated on the basis of a 360 day year
for the actual number of days elapsed. Interest shall be paid on the first day
of each month commencing on January 1, 2003. The Loan shall be funded in full on
the Closing Date. Outstanding principal and interest shall be paid in full on
the Termination Date.
3.2 INTENTIONALLY OMITTED.
3.3 INTENTIONALLY OMITTED.
3.4 INTENTIONALLY OMITTED.
3.5 INTENTIONALLY OMITTED.
3.6 METHOD OF PAYMENT. The Borrower shall make each payment under
this Agreement and under the Note not later than 11:00 a.m. (Eastern Standard
Time) on the date when due in lawful money of the United States to the Bank at
the office address of the Bank provided in the Note in immediately available
funds. The Borrower hereby authorizes the Bank, if and to the extent payment is
not made when due under this Agreement and the Note, to charge from time to time
against any account of the Borrower with the Bank any amount so due. Whenever
any payment to be made under this Agreement or under the Note shall be stated to
be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest.
3.7 PREPAYMENTS. The Borrower may prepay the Note in whole or in
part with accrued interest to the date of such prepayment on the amount prepaid,
provided that LIBOR Loan may be prepaid only on the last day of an Interest
Period for such LIBOR Loan.
3.8 ILLEGALITY. Notwithstanding any other provision in this
Agreement, if the adoption of any applicable law, rule, or regulation, or any
change therein, or any change in the interpretation or administration thereof by
any governmental authority, central bank, or comparable agency charged with the
interpretation or administration thereof, or compliance by the Bank with any
request or directive (whether or not having the force of law) of any such
authority, central bank, or comparable agency shall make it unlawful or
impossible for the Bank to (a) maintain its commitment, then upon notice to the
Borrower by the Bank the commitment of the Bank shall terminate; or (b) maintain
or fund its LIBOR Loan, then upon notice to the Borrower by the Bank the LIBOR
Loan may be converted into Prime Loan, or the outstanding principal amount of
the LIBOR Loan, together with interest accrued thereon, and any other amounts
payable to the Bank under this Agreement shall be repaid (i) immediately upon
demand of the Bank if such change or compliance with such request, in the
reasonable judgment of the Bank, requires immediate repayment; or (ii) at the
expiration of the last Interest Period to expire before the effective date of
any such change or request.
3.9 DISASTER. Notwithstanding anything to the contrary herein, if
the Bank determines (which determination shall be conclusive) that quotations of
interest rates for the relevant deposits referred to in the
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5
definition of LIBOR Interest Rate are not being provided in the relevant amounts
or for the relative maturities for purposes of determining the LIBOR Interest
Rate, then the Bank shall forthwith give notice thereof to the Borrower,
whereupon until the Bank notifies the Borrower that the circumstances giving
rise to such suspension no longer exist, the Loan shall bear interest at the
Prime Rate.
3.10 FUNDING LOSS INDEMNIFICATION. The Borrower shall pay to the
Bank, upon the request of the Bank, such amount or amounts as shall be
sufficient (in the reasonable opinion of the Bank) to compensate it for any
loss, cost, or expense incurred as a result of any payment of the Loan on a date
other than the last day of an Interest Period including, but not limited to,
acceleration of the Loan by the Bank pursuant to Section 11.2, or any failure by
the Borrower to borrow, or to honor a LIBOR Loan on the date set for borrowing.
3.11 GUARANTY. The Loan shall be unconditionally guaranteed without
limit by the Guarantor.
ARTICLE IV
INTENTIONALLY OMITTED.
ARTICLE V
INTENTIONALLY OMITTED.
ARTICLE VI
CONDITIONS OF LENDING
The obligation of the Bank to make the Loan is subject to the accuracy, as
of the date hereof, of the representations and warranties contained in Article
VIII, to the performance by the Borrower of its obligations to be performed
hereunder and to the satisfaction of the following conditions, each of which
shall be precedent to any obligations of the Bank hereunder and shall be
satisfied prior of the funding the Loan:
6.1 BORROWING UNDER THE LOAN. With respect to the obligation of the
Bank to make the Loan on the Closing Date:
(a) The Borrower and the Guarantor shall have each duly
authorized, executed and delivered to the Bank the Loan Documents to which they
are a party, and, where appropriate, acknowledged and recorded or filed such
documents.
(b) The Borrower and the Guarantor shall have delivered to the
Bank copies of all resolutions adopted by its board of directors, members, or
partners duly authorizing the execution, delivery and performance of the Loan
Documents to which it is a party, and all transactions and documents
contemplated thereby.
(c) The Bank shall have received true copies of all consents and
required governmental approvals, if any, necessary to the execution, delivery
and performance of the Loan Documents and the transactions contemplated thereby.
(d) The Bank shall have received a general certificate of the
Borrower and the Guarantor with (i) a copy of its articles of incorporation,
articles of organization or partnership certificate, certified as of a recent
date by the appropriate official of the state of incorporation, organization or
partnership, (ii) certificates of the appropriate state official, dated as of a
recent date, as to the good standing of Borrower and the Guarantor, (iii) a copy
of the bylaws, operating agreement or partnership agreement of the Borrower and
the Guarantor certified as of a recent date by its secretaries or partners; and
(iv) incumbency and signature certificates of Borrower and the Guarantor
certifying the names and the
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6
signatures of the officers or partners authorized to sign the Loan Documents to
which it is a party and the other documents to be delivered under this
Agreement.
(e) The Bank shall have received written opinions of counsel to
the Borrower, addressed to the Bank, dated the date of Closing, in form and
substance acceptable to the Bank and its counsel.
(f) No event shall have occurred and be continuing which
constitutes an Event of Default, or which would constitute an Event of Default
but for a requirement that notice be given or that a period of time elapse, or
both; and the Borrower shall have duly authorized, executed and delivered to the
Bank a certificate to that effect, dated as of the Closing Date, if required by
the Bank.
(g) INTENTIONALLY OMITTED.
(h) The Bank shall have received certificates of insurance and,
if requested by the Bank, copies of all policies evidenced thereby, showing
insurance against all risks required by the Bank in the amounts and with
insurers satisfactory to the Bank, including the following:
(i) Unless the Borrower qualifies as a self-insurer under
the laws of the state of its incorporation or any other
state in which it does business, worker's compensation
insurance with regard to all employees of the Borrower in
accordance with the applicable requirements of law; and
(ii) Such other insurance of the types customarily carried
by the Borrower with appropriate loss payable clauses in
favor of the Bank, including but not limited to (i) public
liability and indemnity insurance; (ii) fire (with broad
form and extended coverage) insurance; (iii) vandalism and
malicious mischief insurance; (iv) business interruption
insurance; and (v) insurance for such other risks and in
such forms and amounts as the Bank may reasonably require
including vandalism, malicious mischief and other forms of
hazard protection. All policies of insurance shall be in
amounts and forms satisfactory to the Bank, written by a
company or companies licensed to do business in Virginia and
otherwise satisfactory to the Bank.
(i) INTENTIONALLY OMITTED.
(j) All legal matters incident to the Loan and all documents and
instruments to be delivered hereunder or pursuant hereto or thereto, shall be
satisfactory in form and substance to counsel for the Bank.
(k) The Borrower shall deliver to the Bank evidence satisfactory
to the Bank that all governmental authorities having jurisdiction over the
Borrower and its operations, have authorized the Borrower's operations and that
the operations as planned comply with laws, ordinances, rules, regulations, and
restrictions affecting such operations.
(l) The Borrower shall have paid or shall pay all costs of the
Bank incurred in connection with the underwriting, drafting and closing of the
Loan and the Loan Documents, including without limitation, reasonable counsel
and other fees and disbursements, engineer fees, inspection fees, and appraisal
fees.
(m) The Borrower shall have delivered to the Bank all documents,
instruments and other items required by the Bank pursuant to the provisions of,
and satisfied all conditions to, the disbursement of the Loan set forth in the
Commitment.
(n) The representations made, and the information furnished by
the Borrower to the Bank with regard to the Loan and the Borrower's
qualifications therefor shall have been and, to the best of Borrower's
knowledge, shall continue to be true and correct and not misleading in any
material respect.
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7
(o) The Bank shall have received such other approvals, opinions,
or documents as the Bank or its counsel may reasonably request.
(p) The Borrower shall have obtained all approvals from the
Virginia State Corporation Commission necessary for its operations, in the sole
discretion of the Bank.
In its sole discretion, the Bank may waive in writing any or all of the
foregoing items as a condition precedent to the Bank's obligation fund the Loan,
in which case the Borrower will satisfy such item or items within thirty (30)
days after the funding of the Loan.
6.2 INTENTIONALLY OMITTED.
6.3 CONDITIONS FOR BANK'S BENEFIT. All conditions of the obligations of
the Bank to make the Loan are imposed solely and exclusively for the benefit of
the Bank and its assigns and no other person shall have standing to require
satisfaction of such conditions in accordance with their terms or be entitled to
assume that the Bank will refuse to make advances in the absence of strict
compliance with any or all thereof and no other person shall, under any
circumstances, be deemed to be a beneficiary of such conditions, any or all of
which may be freely waived in whole or in part by Bank at any time if, in its
sole discretion, it deems it advisable to do so.
ARTICLE VII
PAYMENT OF ADVANCES
7.1 UNDER THE LOAN. The Loan shall be funded one advance on the Closing
Date equal to the principal amount of the Loan.
ARTICLE VIII
GENERAL REPRESENTATIONS AND WARRANTIES
The Borrower and the Guarantor represent and warrant to the Bank with
respect to itself, as of the date of this Agreement and as of the date of the
funding of the Loan that:
8.1 ORGANIZATION, QUALIFICATION, PROPERTIES. Each of the Borrower and the
Guarantor is a (i) corporation, limited liability company or partnership duly
organized, existing and in good standing under the laws of the jurisdiction of
their incorporation or organization, (ii) duly qualified as a foreign
corporation, limited liability company or partnership to do business in each of
the jurisdictions where failure to qualify would have a material adverse effect
on its ability to fulfill its obligations under the Loan Documents or to conduct
its business, and (iii) entitled to own its Properties and carry on its business
as now conducted.
8.2 AUTHORITY. Each of the Borrower and the Guarantor have the necessary
corporate, company or partnership power to enter into, and have taken all
necessary corporate, company or partnership actions to authorize the execution,
delivery and performance of this Agreement, and the other Loan Documents, and
all transactions and documents contemplated hereby and thereby to which they are
a party, and all such corporate, company or partnership actions are in full
force and effect.
8.3 BINDING EFFECT AND ENFORCEABILITY. This Agreement constitutes, and
the other Loan Documents, when issued and delivered pursuant hereto for value
received, will constitute, legal, valid and binding obligations of the Borrower
and the Guarantor, enforceable in accordance with the terms thereof, except that
the enforceability of the obligations of the parties under the Loan Documents is
subject to the provisions of bankruptcy, insolvency, reorganization, moratorium
or other similar laws and is also subject to general equity principles, which
may limit the specific enforcement of certain remedies.
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8.4 NO CORPORATE, PARTNERSHIP OR CONTRACT VIOLATION. There is no
provision of law or in the charter, bylaws, operating agreement or partnership
agreement of the Borrower or the Guarantor, and no provision of any existing
mortgage, contract, lease, indenture or agreement binding on either of the
Borrower or the Guarantor or any of its Properties which would be breached by
the Loan Documents or by the performance or observance of any of the terms
thereof, or result in, or require, the creation or imposition of any lien upon
or with respect to any of its Properties or cause either the Borrower or the
Guarantor to be in default or violation of any law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award binding upon or
applicable to the Borrower or the Guarantor.
8.5 FINANCIAL STATEMENTS. The unaudited financial statements of the
Borrower and the Guarantor as of the fiscal quarter ending June 30, 2002,
together with their statements of income, retained earnings and changes in
financial position for the period then ended, in the form previously delivered
to the Bank, fairly present the financial condition of such party as well as the
results of their operations and changes in their financial position as of the
dates and for the period covered thereby and are correct and complete in all
material respects. To the knowledge of the Borrower and the Guarantor, there are
no material liabilities, direct or indirect, fixed or contingent, affecting it
as of the date hereof, which are not reflected in the financial statements of
the Borrower and the Guarantor heretofore delivered to the Bank and nor has
there been any material adverse change in its financial condition or operations,
all except as disclosed in writing to the Bank.
8.6 PROCEEDINGS. To the best of the Borrower's and the Guarantor's
knowledge, there are no proceedings pending or threatened, before any court or
administrative agency against the Borrower or the Guarantor which, if adversely
determined, would individually or in the aggregate affect adversely the
financial condition of the Borrower or Guarantor, or its ability to perform
under this Agreement or any of the other Loan Documents, with the exception of
those proceedings on SCHEDULE 8.6.
8.7 APPROVALS. The execution, delivery and performance of this Agreement
and the other Loan Documents, and the transactions contemplated hereby and
thereby, do not require any consents, approvals, permits, authorizations or
orders of any governmental or regulatory authority (other than the approval of
the Virginia State Corporation Commission, which approval has been granted). All
tax returns now required to be filed have been filed (or appropriate extensions
of such filings have been obtained) and all taxes, assessments and other
governmental charges (other than those presently payable without penalty or
interest and those being contested in good faith by appropriate proceedings) due
have been paid. Each of the Borrower and the Guarantor has established on its
books reserves adequate for the payment of all federal, state and other income
tax liabilities.
8.8 ERISA. The Borrower is in compliance in all material respects with
all applicable provisions of ERISA, and neither has received any notice of
violation thereof from any applicable authority. Neither a Reportable Event nor
a Prohibited Transaction has occurred or exists in connection with any Plan; no
notice of intent to terminate a Plan has been filed nor has any Plan been
terminated; no circumstances exist which constitute grounds for the termination
of any Plan by PBGC or for the appointment of any trustee to administer a Plan,
nor has the PBGC instituted any such proceedings; the Borrower has not
completely or partially withdrawn from a Multiemployer Plan, as described in
Section 4001(e)(3) of ERISA; the Borrower has met its minimum funding
requirements under ERISA with respect to all of their or its Plan and the
present fair market value of all Plan assets exceeds the present value of all
vested benefits under each Plan, as determined on the most recent valuation date
of the Plan and in accordance with the provisions of ERISA and the regulations
thereunder for calculating the potential liability of the Borrower to PBGC or
the Plan under Title IV of ERISA; and the Borrower has not incurred any
liability to the PBGC or ERISA.
8.9 COMPLIANCE. The Borrower is in compliance with all statutes, rules
and regulations relating to environmental, occupational and health standards and
controls in all jurisdictions where it is presently are doing business, the
failure to comply with which might materially adversely affect the business,
operations or Properties of the Borrower, and has not received any notice of
violation thereof from any applicable authority. The Borrower is not, to the
knowledge of the Borrower, in violation of any other statute, rule or regulation
of any governmental body, the violation of any of which might materially affect
adversely the business, operations or Properties of the Borrower.
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9
8.10 USE OF PROCEEDS. The Borrower will use the proceeds of the Loan only
for the purposes set forth in Section 1.2 of this Agreement. No part of the
proceeds of the Loan will be used, directly or indirectly, for the purpose of
purchasing, carrying or trading in any margin security within the meaning of
applicable regulations of the Board of Governors of the Federal Reserve System,
or for the purpose of purchasing or carrying or trading in any securities under
such circumstances as to involve the Bank or the Borrower in a violation of such
regulations including, without limitation, Regulations G, T, U and X of such
Board, or for any purpose other than as set forth in Section 1.2 hereof. If
requested by the Bank, the Borrower will furnish to the Bank a statement in
conformity with the requirements of Federal Reserve Form U-1 referred to in
Regulation U.
8.11 NO DEFAULT. Neither the Borrower nor the Guarantor is in default in
respect of any indebtedness for borrowed money and no holder of any such
indebtedness has given notice of any asserted default thereunder. No
liquidation, dissolution or other winding up of the Borrower or the Guarantor
and no bankruptcy or similar proceedings relative to it or its Properties are
pending or, to its knowledge, threatened against it.
8.12 TITLE TO PROPERTY, PERFECTION OF LIENS. To the best of Borrower's
knowledge, the Borrower has good and marketable title to all of its Properties
and assets reflected on the balance sheet referred to in Section 8.5, free and
clear of any liens, security interests and encumbrances, except Permitted
Encumbrances.
8.13 RICO OR CCE ACTIONS. There is, to the best of Borrower's knowledge,
no investigation, and there is no indictment, information, proceeding,
conviction, judgment or order under the Racketeer Influenced and Corrupt
Organizations Act, 18 U.S.C. 1961, ET SEQ. ("RICO"), the Continuing Criminal
Enterprises Act, 21 U.S.C. 848 ET SEQ. ("CCE") or any similar law that may
result in a forfeiture of any part of the Collateral or any of the assets of the
Borrower.
8.14 ACCURACY OF INFORMATION. No information, exhibit or report furnished
by the Borrower or the Guarantor to the Bank in connection with the negotiation
of this Agreement contained any material misstatement of fact or omitted to
state any fact necessary to make the statement contained therein not misleading,
and there is no fact that the Borrower or the Guarantor has not disclosed to the
Bank in writing that could materially adversely affect its Properties, or its
business or financial condition.
8.15 LABOR DISPUTES AND ACTS OF GOD. Neither the business nor the
Properties of the Borrower are affected by any fire, explosion, accident,
strike, lockout, or other labor dispute, drought, storm, hail, earthquake,
embargo, act of God or of the public enemy, or other casualty (whether or not
covered by insurance), materially and adversely affecting such business or
Properties or the operations of the Borrower.
8.16 OTHER AGREEMENTS. Borrower is not a party to any indenture, loan, or
credit agreement, or to any lease or other agreement or instrument or subject to
any charter or corporate restriction which could have a material adverse effect
on the ability of Borrower to carry out its obligations under the Loan
Documents. Borrower is not in default in any respect in the performance,
observance, or fulfillment of any of the obligations, covenants, or conditions
contained in any agreement or instrument material to its business.
8.17 OPERATION OF BUSINESS. The Borrower possesses all licenses, permits,
franchises, patents, copyright, trademarks, and trade names, or rights thereto,
to conduct its business substantially as now conducted and as presently proposed
to be conducted, and the Borrower is not in violation of any valid rights of
others with respect to any of the foregoing.
The foregoing warranties and representations shall be deemed to be
continuing, shall be and remain effective despite any investigation or knowledge
by the Bank of their inaccuracy, and shall survive the execution and delivery of
this Agreement and the making of the Loan.
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10
ARTICLE IX
AFFIRMATIVE COVENANTS
Until payment in full of the Loan and the Note, unless the Bank shall
otherwise consent in writing, the Borrower (together with the Guarantor when
referenced) will:
9.1 FINANCIAL STATEMENTS, REPORTS. Furnish or cause to be furnished:
(a) as soon as available, but not later than 120 days after the
close of its fiscal year, the Borrower's and the Guarantor's reasonably detailed
operating statements and balance sheets, together with financial statements
consisting of a consolidated and consolidating balance sheet as of the end of
such fiscal year and consolidated and consolidating statements of income,
retained earnings, changes in financial position, and reconciliation of net
worth for such fiscal year, all prepared by independent certified or public
accountants satisfactory to the Bank in accordance with GAAP, accompanied by a
certificate of its chief financial officer to the effect that he has reviewed
this Agreement and nothing contained in the report or otherwise results in a
default hereunder or a violation of any provision hereof, or would so result
with notice of lapse of time, or both, or that there is a default or violation
and stating the nature of the default or violation; and
(b) such additional information, reports or statements (financial
or otherwise) as the Bank from time to time may reasonably request.
9.2 TAXES. Duly pay and discharge all taxes, assessments and governmental
charges upon them or against its Properties prior to the date on which penalties
attach unless and to the extent only that such taxes, assessments and
governmental charges shall be contested in good faith and by appropriate
proceedings by the Borrower, and the Borrower shall have set aside on its books
such reserves as are required by GAAP with respect to any such tax, assessment
or charge so contested.
9.3 CORPORATE AND PARTNERSHIP FRANCHISES. Keep its corporate or
partnership franchises in full force and effect and duly observe and conform to
all valid requirements of any governmental authority relative to the conduct of
its business and to its Properties and assets and maintain and keep in force all
franchises, licenses and permits necessary to the lawful and proper conduct of
its business.
9.4 INTENTIONALLY OMITTED.
9.5 CORPORATE AND PARTNERSHIP EXISTENCE. Maintain its corporate, company,
or partnership existence.
9.6 ACCESS TO PREMISES AND RECORDS. Maintain financial records in
accordance with GAAP, and permit representatives of the Bank to have access to
such financial records and the Business at reasonable times during normal
business hours and to make inspections thereof and such excerpts from such
records as such representatives deem necessary.
9.7 NOTICES OF DEFAULT. Give the Bank written notice of any Event of
Default and any event which with notice or lapse of time or both would
constitute an Event of Default, within ten (10) days of learning of same.
9.8 INTENTIONALLY OMITTED.
9.9 COMPLIANCE WITH LAWS. Comply in all material respects with all laws
and governmental regulations of the United States of America and all political
subdivisions thereof applicable to the rights of the Borrower to transact
business under any such laws and regulations.
9.10 ERISA. Comply in all material respects with the applicable
provisions of ERISA, (b) deliver to the Bank written notice as soon as possible
and in any event within ten (10) days if Borrower adopts or agrees to contribute
to an employee pension benefit plan (as defined in Section 3(2) of ERISA)
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11
not presently in existence if the obligation to contribute thereto is material,
and (c) furnish to the Bank, (i) as soon as possible, and in any event within
ten (10) days after any officer or partner of the Borrower knows or has reason
to know that any Reportable Event with respect to any Plan with vested unfunded
liabilities has occurred, a statement of an executive officer of the Borrower
setting forth details as to such Reportable Event and the action that the
Borrower propose to take with respect thereto, together with a copy of the
notice of such Reportable Event given to PBGC, and (ii) promptly after receipt
thereof, a copy of any notice the Borrower may receive from PBGC relating to the
intention of PBGC to terminate any Plan with vested unfunded liabilities or to
appoint a trustee to administer any such Plan.
9.11 FINANCIAL COVENANTS. At the end of each of the Borrower's and the
Guarantor's fiscal quarters, tested on a rolling fiscal four quarter basis,
beginning with the quarter ending on December 31, 2002, the Borrower together
with the Guarantor and the Guarantor's Affiliates will have and maintain the
following financial positions on a consolidated basis, all as defined or
determined in accordance with GAAP:
(a) MINIMUM INTEREST COVERAGE RATIO. A minimum interest coverage
ratio of not more than 1.5 to 1.0 at each testing time. For purposes of this
Section 9.11(a), the maximum leverage to cash flow ratio shall be defined as:
net income + interest expense + taxes
-------------------------------------
interest expense
(b) MAXIMUM LONG TERM DEBT TO TOTAL CAPITALIZATION. A
Consolidated Long Term Debt plus current maturities of Consolidated Long Term
Debt to Consolidated Total Capitalization ratio of .65 to 1.0.
(c) MINIMUM RETAINED EARNINGS. Retained earnings of at least
$6,500,000.00.
The financial covenants contained in this Section 9.11 are intended to be
consistent with those comparable financial covenants contained in Sections 5.6
and 5.9 of the Mony Agreement and to the extent that there is any inconsistency
in interpretation, the covenants under the Mony Agreement shall govern for
purposes of this Agreement.
9.12 NON-BANK DEBT. No subordinate Indebtedness shall be permitted by the
Borrower to exist with respect to the Business, other than that which
constitutes Long Term Debt.
9.13 INSURANCE. Continuously maintain or cause to be maintained insurance
with responsible carriers against such risks as are customarily insured against
and in such amounts as are customarily carried by entities similar to the
Borrower, paying or causing to be paid as the same becomes due all premiums in
respect thereto, and naming the Bank as loss payee as its interests may appear.
9.14 ENVIRONMENTAL MATTERS.
(a) Conduct its business operations in full compliance with
Environmental Laws and refrain from, and prevent any other party from, using any
Hazardous Materials on the Properties except such material as are incidental to
its normal course of business, maintenance and repairs.
(b) Permit the Bank, its agents, contractors and employees (not
more often than one (1) time per calendar year, unless there exists an Event of
Default or Borrower shall have received a notice of a violation of Environmental
Laws, or Borrower or Bank have knowledge that a release of Hazardous Materials
has occurred) to enter and inspect any of the Properties at any reasonable time
upon three (3) days' prior notice for the purpose of conducting environmental
investigations and audits (including taking physical samples) to monitor
compliance with this section, provided that prior to doing so, Bank delivers to
the Borrower signed hold harmless and indemnity agreements with regard to damage
or injury that may be caused by the Bank's negligence or willful wrongdoing in
conducting such investigations and audits, reasonably satisfactory to the
Borrower.
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12
(c) Provide the Bank, its agents, contractors, employees and
representatives with access to and copies of any and all data and documents
relating to or dealing with any Hazardous Materials used, generated,
manufactured, stored or disposed of either on, under, or about the Properties or
by the Borrower's business operations within five days of a request therefor.
(d) Immediately advise the Bank in writing of (i) any and all
enforcement, clean-up, remedial, removal, or other governmental or regulatory
actions instituted, completed or threatened pursuant to any Environmental Law
affecting or pertaining to the Properties or the Borrower's business operations,
(ii) all claims made or threatened by any third party against the Borrower
relating to damages, contribution, cost recovery compensation, loss or injury
resulting from any Hazardous Materials; and (iii) any remedial action taken by
the Borrower with respect to its Properties or the Borrower's business
operations.
9.15 INDEMNITY. Protect and indemnify the Bank, its officers, directors,
employees, and agents (the "Indemnitees") from and against all liabilities,
obligations, claims, damages, penalties, causes of action, costs and expenses
(including, without limitation, reasonable attorneys' fees and disbursements),
imposed upon or incurred by or asserted by third parties against the Indemnitees
or any of them by reason of:
(a) ownership of its Properties or any interest therein, or
receipt of any rent or other sum therefrom;
(b) any accident to, injury to or death of persons or loss of or
damage to property occurring on or about the Properties or the adjoining
sidewalks, curbs, vaults or vault space, if any, streets or ways;
(c) any use, nonuse or condition of its Properties or the
adjoining sidewalks, curbs, vaults or vault space, if any, streets or ways;
(d) any failure on the part of the Borrower to perform or comply
with any of the terms, covenants, conditions and agreements set forth in the
Loan Documents, or any other agreements executed by the Borrower or any one of
them or any other Persons liable for the payment of the indebtedness hereby
secured;
(e) performance of any labor or services or the furnishing of
any materials or other property in respect of the Properties or any part thereof
for construction or maintenance or otherwise;
(f) any action brought against the Bank by any person other than
the Borrower's attacking the validity, priority or enforceability of the Loan
Documents, or any other agreements executed by the Borrower or any other Persons
liable for the payment of the indebtedness hereby secured;
(g) exercise or the attempted exercise by the Bank, of the rights
and remedies set forth in the Note and other Loan Documents; or
(h) actual or threatened damage to the environment, agency costs
of investigation, personal injury or death, or property damage, due to a release
or alleged release of any Hazardous Material on or under any of its Properties
or the surface or ground water located on or under its Properties or arising
from the Borrower's business operations, or gaseous emissions arising from the
Borrower's business operations or any other condition existing on its Properties
resulting from the use or existence of Hazardous Materials, whether such claim
proves to be true or false.
The Borrower further agrees that its indemnity obligations hereunder shall
include, but are not limited to, liability for damages resulting from the
personal injury or death of an employee of the Borrower, regardless of whether
the Borrower has paid the employee under the worker's compensation laws of any
state or other similar federal or state legislation for the protection of
employees. The term "property damage" as used in this section includes, but is
not limited to, damage to any real or personal property of the Borrower, the
Indemnitees, and of any third parties. Any accounts payable to the Indemnitees
under this section which are not paid within ten (10) days after written demand
therefor by the
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13
Bank shall bear interest at the maximum rate per annum then permitted by law
from the date of such demand. In the event any action, suit or proceeding is
brought against any of the Indemnitees by reason of any such occurrence, the
Borrower shall have the right to, and upon the request of the Indemnitees shall,
resist and defend at the Borrower's expense such action, suit or proceeding or
cause the same to be resisted and defended by counsel designated by the Borrower
and approved by the Indemnitees which approval shall not be withheld
unreasonably. The obligations under this section shall survive the termination,
satisfaction or release of the Loan Documents.
9.16 GENERAL INFORMATION. Provide the Bank with such other information
respecting the condition or operations, financial or otherwise, of the Borrower
as the Bank may from time to time reasonably request.
ARTICLE X
NEGATIVE COVENANTS
Borrower agrees that until payment in full of the Loan and the Note,
without the prior express written consent of the Bank, Borrower shall not enter
into any agreement or transaction that causes any of the financial covenants to
be violated. Furthermore, the Borrower shall not, without the prior written
consent of the Bank:
10.1 MERGERS, CONSOLIDATIONS. Enter into any merger or consolidation or
acquire all or substantially all the assets of any Person, except such asset
acquisitions not exceeding $500,000 per transaction or $1,000,000 in the
aggregate during the term of the Loan.
10.2 DISPOSITION OF ASSETS. Sell, lease or otherwise dispose of all,
substantially all, or, determined on a consolidated basis, a significant portion
of the Properties of Borrower, except in the ordinary course of business.
10.3 INTENTIONALLY OMITTED.
10.4 NEGATIVE PLEDGE. Create, incur, assume or allow to exist any pledge,
lien or other encumbrance on or any security interest in any of its assets other
than Permitted Encumbrances.
10.5 CHANGE IN CONTROL. Transfer, assign or otherwise dispose of, or
allow to be transferred, assigned or otherwise dispose of, a controlling
interest in Borrower, provided, however, that transfers of interests exclusively
(i) among or between the existing shareholders or partners of Borrower, (ii)
members of the immediate families and descendants of such existing shareholders
or partners, or (iii) to trusts created solely for estate or tax planning
purposes shall not be subject to, or included within, the restriction contained
in this section.
10.6 NO SALE AND LEASE BACK. Enter into any transaction for the sale and
lease back of any of its assets that exceed $500,000 per transaction or
$1,000,000 in the aggregate during the term of the Loan.
10.7 LOAN. Make loans or advances to any Person, other than in the
ordinary course of business and not exceeding $50,000 in the aggregate during
the term of the Loan.
10.8 CONTINGENT LIABILITIES. Assume, guarantee, endorse, or otherwise
become surety for or upon the obligation of any Person, except by the
endorsement of negotiable instruments for deposit or collection in the ordinary
course of business.
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14
ARTICLE XI
EVENTS OF DEFAULT
11.1 EVENTS OF DEFAULTS. The occurrence of any of the following events
shall constitute an Event of Default under this Agreement:
(a) The Borrower shall fail to make, within ten (10) days after
notice from Bank, any payment when due of principal or interest with respect to
the Note, or any of them, on the due date thereof, whether at maturity,
acceleration or otherwise;
(b) If there shall occur an event of default under any other
Indebtedness of the Borrower or the Guarantor to the Bank;
(c) The Borrower or the Guarantor shall breach or fail to
perform any other term, covenant, warranty or agreement herein or in any other
Loan Document and such default shall continue for thirty (30) days after written
notice thereof has been given to the Borrower or the Guarantor by the Bank;
(d) Any representation or warranty of the Borrower or the
Guarantor in any Loan Document or in any certificate delivered thereunder shall
prove to have been untrue in any material respect at the time it was made;
(e) The Borrower or the Guarantor shall default in, fail to pay
at maturity, or otherwise default in respect of, any indebtedness for borrowed
money from the Bank in any amount (except indebtedness under this Agreement), or
from any other Person, or fail to observe or perform any material term, covenant
or agreement contained in any other agreement (except this Agreement) by which
it is bound evidencing or securing borrowed monies or advances from the Bank in
any amount or from any other Person, and shall not cure such failure within any
applicable period of grace, as would permit, or would have permitted, the holder
or holders thereof or of any obligations issued thereunder to accelerate the
maturity thereof;
(f) The Borrower or the Guarantor shall (i) voluntarily commence
any proceeding or file any petition seeking relief under Title 11 of the United
States Code or any other federal, state or foreign bankruptcy, insolvency or
similar law, (ii) consent to the institution of, or fail to controvert in a
timely and appropriate manner, any such proceeding or the filing of any such
petition, (iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator or similar official for it or for a substantial part of
its property, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general assignment
for the benefit of creditors, (vi) become unable, admit in writing its inability
or fail generally to pay its debts as they become due, or (vii) take action for
the purpose of effecting any of the foregoing;
(g) An involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent jurisdiction seeking
(i) relief in respect of the Borrower or the Guarantor or of a substantial part
of its property, under Title 11 of the United States Code or any other federal,
state or foreign bankruptcy, insolvency or similar law, (ii) the appointment of
a receiver, trustee, custodian, sequestrator or similar official for the
Borrower or the Guarantor or for a substantial part of its property or (iii) the
winding-up or liquidation of the Borrower or the Guarantor and such proceeding
or petition shall continue undismissed for sixty (60) days or an order or decree
approving or ordering any of the foregoing shall continue unstayed and in effect
for thirty (30) days;
(h) The occurrence of any Prohibited Transaction involving any
Plan, a Reportable Event or other event or circumstance which is not promptly
cured and which might constitute grounds for termination of any Plan by the PBGC
or grounds for the appointment by the appropriate United States District Court
of a trustee to administer any such Plan, the filing of a notice of intent to
terminate any Plan or the termination of any Plan, or the complete or partial
withdrawal from a Multiemployer Plan or the reorganization, insolvency or
termination of any Multiemployer Plan; and in each case above, such event or
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15
condition, together with all other events or conditions, if any, could in the
opinion of the Bank subject the Borrower or the Guarantor to any tax, penalty or
other liability to a Plan, a Multiemployer Plan, the PBGC or otherwise which
would, in the reasonable opinion of the Bank, have a material adverse effect on
the Borrower's or the Guarantor's ability to perform its obligations under the
Loan Documents;
(i) (i) The filing of an indictment or information, or (ii) the
commencement of any proceeding, or (iii) the entry of any conviction, judgment
or order, under RICO or CCE or any similar law, which in any instance results in
or may result in a forfeiture of a material portion of any of the assets of the
Borrower or the Guarantor;
(j) One or more judgments, decrees, or orders for the payment of
money in excess of One Hundred Thousand Dollars ($100,000.00) in the aggregate
shall be rendered against the Borrower or the Guarantor and such judgments,
decrees, or orders shall continue unsatisfied and in effect for a period of
thirty (30) days after entry thereof without being vacated, discharged,
satisfied, stayed or bonded pending appeal;
(k) If the Borrower assigns this Agreement or any interest
herein;
(l) If within thirty (30) days after written request by the Bank,
the Borrower fails to furnish the Bank or the Guarantor with financial
statements, such as balance sheets and profit and loss statements, and such
other statements as the Bank may require to determine the financial condition of
the Borrower or the Guarantor in form and substance satisfactory to the Bank;
(m) If any condition precedent contained herein to making the
first or any subsequent advance under the Loan, which is made by the Bank, is
not satisfied within thirty (30) days after such advance is requested by the
Borrower, unless such condition is expressly waived in writing by the Bank; or
(n) Any occurrence of an event of default by the Borrower under
the Mony Agreement.
An Event of Default under the Loan shall constitute an event of default as to
any other loans or advances of credit made by the Bank to the Borrower or for
the benefit of the Borrower, whether now or hereafter existing.
11.2 REMEDIES.
(a) Upon the occurrence of an Event of Default (other than of an
Event of Default described in clause (b) below), the Bank may, without notice to
the Borrower, take either or both of the following actions, at the same or
different times: (i) terminate its obligation, if any, to make further advances
under the Loan and (ii) declare the full unpaid principal of and accrued
interest on the Note and all other obligations of the Borrower under the other
Loan Documents to be immediately due and payable, whereupon the Note and such
obligations shall be immediately due and payable, without presentment, demand,
protest or other formalities of any kind, all of which are hereby expressly
waived by the Borrower, (b) upon the occurrence of an Event of Default referred
to in Section 11.1(f) and (g) above, the Bank's obligation, if any, to make
further advances under the Loan shall automatically terminate and the full
unpaid principal of and accrued interest on the Note and all other obligations
of the Borrower under the other Loan Documents shall automatically become
immediately due and payable, without presentment, demand, protest or other
formalities of any kind, all of which are hereby expressly waived by the
Borrower; or (c) exercise any other rights or remedies available to the Bank
under the Loan Documents or under applicable law.
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16
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.1 NOTICES. All written notices hereunder to any party hereto shall be
certified or registered mail, postage prepaid, or delivered in person addressed
to the party for whom intended at the following addresses:
if to Borrower: Roanoke Gas Company
X.X. Xxx 00000
Xxxxxxx, XX 00000-0000
Attention: Xxxx X. Xxxxx, Vice President and
Secretary
with a copy to: Xxxxxxxx X. Xxxxx, Esquire
Xxxxx Xxxxxx & Xxxxxxxxxx
X.X. Xxx 00000
Xxxxxxx, XX 00000-0000
if to the Bank, at: SunTrust Bank
SunTrust Plaza, First Floor
00 Xxxxxxxx Xxxx, XX
Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxx, Senior Vice
President
with a copy to: G. Xxxxxxx Xxxx, Jr., Esquire
Xxxxxx Xxxxx Xxxxx & Xxxxx
Xxxx Xxxxxx Xxx 00000
Xxxxxxx, Xxxxxxxx 00000-0000
Any party shall have the right to change its address for notice by giving notice
hereunder, including the right to specify a person to whose attention notices
shall be directed. Any notice sent by registered or certified mail shall be
deemed given on the third day after the date of mailing and any notice given by
personal delivery to an officer of a party shall be deemed given on the date of
receipt as evidenced by such officer's signed receipt; provided, however, that
if any party shall refuse to accept delivery of any notice so sent by registered
or certified mail or personally tendered to an officer, such notice shall be
deemed given when tendered for delivery.
12.2 TERM OF AGREEMENT. This Agreement shall continue in force and effect
so long as the Loan or any obligation of the Borrower or the Guarantor for any
interest or other expense hereunder or thereunder or under any other Loan
Document, shall be outstanding.
12.3 NO WAIVER. No failure or delay by the Bank in exercising any right,
power or privilege hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided are cumulative and no exclusive of any rights or
remedies otherwise provided by law.
12.4 SEAL, JURISDICTION. This Agreement and the Note shall be deemed to
be a contract made under seal and shall be construed in accordance with and
governed by the laws of the Commonwealth of Virginia except any provision of
them that would otherwise require application of the law of a foreign
jurisdiction.
12.5 CONSENT TO JURISDICTION. The Borrower and the Guarantor hereby
consents to the jurisdiction and venue of the courts of the Commonwealth of
Virginia, specifically to the courts of the City of Roanoke, Virginia, and to
the jurisdiction and venue of the United States District Court for the Western
District of Virginia in connection with any action, suit or proceeding arising
out of or relating to this
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17
Agreement or any of the other Loan Documents and further waives and agrees not
to assert in any such action, suit or proceeding brought in the City of Roanoke,
Virginia, or the Western District of Virginia that the Borrower and the
Guarantor is not personally subject to the jurisdiction of such courts, that the
action, suit or proceeding is brought in an inconvenient forum or that venue is
improper.
12.6 SEVERABILITY. The provisions of this Agreement and the other Loan
Documents are severable, and if any clause or provision of any of them shall be
held invalid or enforceable in whole or in part in any jurisdiction, then such
invalidity or unenforceability shall affect only such clause or provision, or
part thereof, in such jurisdiction and shall not in any manner affect such
clause or provision in any other jurisdiction. Each of the covenants, agreements
and conditions contained in this Agreement is independent and compliance by the
Borrower and the Guarantor with any of them shall not excuse non-compliance by
the Borrower and the Guarantor with any other.
12.7 OFFSET. In addition to, and not in limitation of, all rights of
offset that the Bank or other holder of the Note may have under applicable law
upon the occurrence of any Event of Default hereunder, the Bank or other holder
of such Note and, to the extent permitted by applicable law, any participant in
the Note or the Loan, shall have the right to appropriate and apply to the
payment thereof any and all balances, credits, deposits, accounts or monies of
the Borrower then or thereafter maintained with the Bank or any of its
subsidiaries or affiliates or other holder of the Note.
12.8 CHANGE, WAIVERS, ETC. No amendment, modification, termination or
waiver of any provision of this Agreement, the Note or the other Loan Documents,
nor consent to any departure by the Borrowers from any Loan Document, shall in
any event be effective unless the same shall be in writing and signed by the
Bank, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
12.9 SINGULAR AND PLURAL. Terms in the singular number shall include the
plural and those in the plural shall include the singular.
12.10 USE OF DEFINED TERMS. All terms defined in this Agreement shall
have the defined meanings set forth herein when such terms are used in the Note,
the other Loan Documents and in certificates, reports or other documents made or
delivered pursuant hereto or thereto, unless the context shall otherwise
require.
12.11 BINDING EFFECT OF AGREEMENT. This Agreement shall be binding upon
and inure to the benefit of the Borrower, the Bank and their respective heirs,
executors, personal representatives, successors and assigns, provided that the
Borrower may not assign or transfer their right or obligations under this
Agreement without the prior written consent of the Bank.
12.12 HEADINGS. Headings or captions have been inserted for convenience
only and shall not be construed as limiting or affecting in any way the
provisions of this Agreement.
12.13 ACCOUNTING TERMS. Except as otherwise specifically provided, all
accounting terms used herein shall have the meanings customarily given them in
accordance with GAAP, and all financial computations, statements and balance
sheets required or permitted under this Agreement will be performed or prepared
in accordance with such principles consistently applied.
12.14 COUNTERPARTS. This Agreement may be signed in any number of
counterparts with the same effect as if the signatures hereto and thereto were
upon the same instrument.
12.15 EXPENSES. Borrower will pay all fees and expenses incurred by the
Bank in connection with the preparation of the Agreement and the other Loan
Documents (whether or not the transactions hereby contemplated shall be
consummated), and the making of the Loan hereunder, including reasonable
attorney's fees, the enforcement of the rights of the Bank in connection with
this Agreement or with the Loan made or the Note issued hereunder, including but
not limited to, the fees and disbursements of counsel for the Bank. The Bank may
use either outside counsel or its own in-house counsel, or both, to provide it
with
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18
legal services in connection with this transaction. In any event, such attorneys
will represent the Bank exclusively, and the Borrower acknowledges that such
attorneys do not undertake to provide legal services or advice to the Borrower.
Any future reasonable and customary legal fees after the closing of this loan
for amendments to the Loan Documents requested by the Borrower or required
hereunder are to be paid by the Borrower. If the Bank shall retain or engage at
any time an attorney or attorneys to collect or enforce or protect its interest
with respect to this Agreement, the Loan, the Note or the other Loan Documents,
to the extent the Bank is entitled to so collect, enforce or protect under the
Loan Documents or applicable law, the Borrower shall pay all of the costs and
expenses of such collection, enforcement or protection, including reasonable
fees and disbursements of attorneys, and the Bank may take judgment for all such
amounts.
12.16 WAIVER OF JURY TRIAL. TO THE EXTENT PERMISSIBLE UNDER APPLICABLE
LAW, THE BORROWER AND THE BANK WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM BROUGHT BY EITHER PARTY AGAINST THE OTHER ON ANY MATTER WHATSOEVER
ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT, THE LOAN, THE NOTE,
THE OTHER LOAN DOCUMENTS, OR ANY RELATED AGREEMENTS OR INSTRUMENTS, THE
ENFORCEMENT THEREOF, ANY OBLIGATIONS OR INDEBTEDNESS EVIDENCED THEREBY, ANY
COLLATERAL SECURITY THEREFOR OR ITS DISPOSITION, OR THE LENDING RELATIONSHIP
BETWEEN THE PARTIES, INCLUDING ANY CLAIM OF INJURY OR DAMAGE TO ANY PARTY OR THE
PROPERTY OF ANY PARTY.
12.17 FURTHER ASSURANCES. At any time or from time to time upon the
request of the Bank, the Borrower will execute and deliver such further
documents and do such other acts and things as the Bank may reasonably request
in order to effect fully the purposes of the Loan Documents and to provide for
the payment of the Loan made hereunder and interest thereon in accordance with
the terms of the Loan Documents.
12.18 INCORPORATION OF COMMITMENT. All the terms and conditions of the
Commitment are incorporated herein by reference and, to the extent not
inconsistent with the provisions of the Loan Documents, shall survive the
closing of the Loan.
12.19 TIME OF THE ESSENCE. Time shall be of the essence with respect to
the performance of the Borrower's obligations under the Loan Documents.
12.20 ENTIRE AGREEMENT. This Agreement and the other Loan Documents
contain the entire agreement among the parties with respect to the subject
matter herein, and each party represents to and agrees with the others that
there are no additional agreements, understandings or representations other than
those provided herein and in the other Loan Documents. The Loan Documents
supersede any prior agreements between the Bank and the Borrower, and, to the
extent that the terms and provisions of any such prior agreements are
inconsistent with the terms and provisions of the Loan Documents, the terms and
provisions of the Loan Documents shall govern and control.
12.21 CONSTRUCTION AND CONFLICTS. The parties to the Loan Documents and
their respective counsel have reviewed and revised (or requested revisions of)
the Loan Documents, and the normal rule of construction that any ambiguities are
to be resolved against the drafting party shall not be applicable in the
construction and interpretation of this Agreement or any of the other Loan
Documents. To the extent possible, the provisions of this Agreement and the
other Loan Documents shall be interpreted to complement and supplement each
other and the absence of any provision or portion thereof in one such document
shall not be deemed to be an inconsistency with the other such document which
contains such provision or portion thereof. To the extent that any provision of
this Agreement is inconsistent with any corresponding provision of any other
Loan Document, then such provision of this Agreement shall prevail.
12.22 ASSIGNMENT. The Bank may assign, negotiate or pledge all or any of
its rights or security with respect to the Loan, this Agreement or any other
Loan Documents, sell participation in the Loan, and, in any such case, the
Borrower shall accord full recognition to such assignment, negotiation, pledge
or sale. The Borrower shall execute and deliver any and all documents which the
Bank may require for the purpose of effecting any and all such transactions.
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19
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered by their proper and duly authorized officers or partners
as of the day and year first above written.
BORROWER:
ROANOKE GAS COMPANY
By: s/ Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: Vice President and Secretary
BANK:
SUNTRUST BANK
By: s/ Xxxxxx X. Xxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxx
Title: Senior Vice President
GUARANTOR:
RGC RESOURCES, INC.
By: s/ Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: Vice President and Secretary
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20
SCHEDULE 2.1
PERMITTED ENCUMBRANCES
1. Liens and security interests on certain real and personal property of
Roanoke Gas Company (the "Company") created by that Deed of Trust,
dated as of June 1, 1998, from the Company to Xxxxxx X. X. Xxxxx and
Xxxxxx X. Xxxxxx, Xx. for the benefit of The Mutual Life Insurance
Company of New York and MONY Life Insurance Company of America.
2. Liens and security interests in favor of Siemens Credit Corporation on
a Siemens Hicom 300 E Model 30 EX Telephone System, as reflected in
UCC-1 financing statement No. 990000146, filed with the Clerk of the
Circuit Court of the City of Roanoke, Virginia on February 11, 1999
SCHEDULE 8.6
PROCEEDINGS
None