LOAN AGREEMENT

Exhibit 10.1

 

LOAN AGREEMENT

among

AMERICAN SAMOA HAWAII CABLE, LLC and

SAMOA AMERICAN CABLE, LLC

as Borrower

and

ANZ FINANCE AMERICAN SAMOA, INC.

ANZ AMERIKA SAMOA BANK

as Lenders

and

ANZ AMERIKA SAMOA BANK

as Agent

June 8, 2009

 

 

TABLE OF CONTENTS

 

 

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LOAN AGREEMENT

THIS LOAN AGREEMENT (the “ Agreement ”) is made as of the 8th day of June, 2009, by and between AMERICAN SAMOA HAWAII CABLE, LLC, a Delaware limited liability company (“ASHC”) and SAMOA AMERICAN SAMOA CABLE, LLC, a Delaware limited liability company (“SASC”), a wholly owned subsidiary of ASHC, jointly and severally (individually and collectively, the “ Borrower ”), and ANZ FINANCE AMERICAN SAMOA, INC., an American Samoa corporation (“ ANZ Finance ”), ANZ AMERIKA SAMOA BANK (“ ANZ Bank ”) and together with ANZ Finance, the “ Lenders ” and each a “ Lender ”), and ANZ AMERIKA SAMOA BANK as agent for Lenders (in such capacity, the “ Agent ”).

ARTICLE 1

DEFINITIONS; INTERPRETIVE PROVISIONS

Section 1.1 Certain Defined Terms . As used in this Agreement, the following terms have the following meanings:

“ Affiliate ” means any Person who, directly or indirectly, controls or is controlled by or is under common control with such Person.

“ Agent ” means ANZ Amerika Samoa Bank, an American Samoa corporation, and any Successor thereto or successor agent selected pursuant to Section 10.8 .

“ Agreement ” means this Loan Agreement, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“ AICPA ” means the American Institute of Certified Public Accountants.

“ ANZ Bank ” means ANZ Amerika Samoa Bank, an American Samoa corporation, and any Successor.

“ ANZ Finance ” means ANZ Finance American Samoa, Inc., an American Samoa corporation, and any Successor.

“ Applicable Interest Rate ” means with respect to the Loans, an interest rate per annum equal to two percent (2.00%) above the Prime Rate (changing as such Prime Rate changes), as the same may be modified pursuant to Sections 2.4 and 3.4 hereof.

“ ASHC ” has the meaning specified in the Preamble.

“ ASHUC ” means American Samoa Hawaii Undeployed Cable, LLC, a Delaware limited liability company, a wholly owned subsidiary of ASHC.

“ Borrower ” means, individually and collectively, American Samoa Hawaii Cable, LLC, a Delaware limited liability company, and any Successor, and Samoa American Samoa Cable, LLC, a Delaware limited liability company, and any Successor.

“ Borrower Documents ” means this Agreement, the Notes and the Security Documents to which the Borrower is a party, as any thereof shall be amended, restated, supplemented or otherwise modified from time to time and all other certificates, instruments and other documents executed by the Borrower in connection with this Agreement or the transactions contemplated hereby.

“ Business Day ” means any day other than Saturday, Sunday or other day on which banks are authorized or obligated to close in Pago Pago, American Samoa, and Miami, Florida USA.

“ Business Unit ” means (i) a corporation, partnership or limited liability company, business, business unit, division or product or service line, or (ii) the assets that constitute all or substantially all of the assets of any of the entities or business units described in the preceding clause (i).

“ Cable System ” has the meaning given in the Purchase Agreement, except that it specifically excludes the Excess Cable.

“ Capital Leases ” means for any Person, all obligations of such Person under leases which shall have been, or in accordance with GAAP, should be recorded as capital leases.

“ Capital Stock ” means all shares of capital stock of or in a Person which is a corporation, whether voting or non-voting, and including common stock and preferred stock, all membership or other equity interests of or in a Person which is a limited liability company, all partnership and other equity interests of or in a Person which is a partnership, and all similar equity and other interests of or in any other Person.

“ Cash Equivalents ” means: (i) marketable direct obligations issued or unconditionally guaranteed by the United States government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within one year from the date of acquisition thereof; (ii) commercial paper maturing no more than one year from the date issued and, at the time of acquisition, having a rate of at least A-1 from Standard & Poor’s Rating Services or at least P-1 from Moody’s Investors Service, Inc.; (iii) certificates of deposit or bankers’ acceptances maturing within one year from the date of issuance thereof issued by, or overnight reverse repurchase agreements from any commercial bank organized under the laws of the United States of America or any state thereof or the District of Columbia having combined capital and surplus of not less than One Hundred Million Dollars ($100,000,000); (iv) time deposits maturing no more than thirty (30) days from the date of creation thereof and demand deposits with commercial banks having membership in the Federal Deposit Insurance Corporation in amounts not exceeding the lesser of Two Hundred Fifty Thousand Dollars ($250,000) or the maximum amount of insurance applicable to the aggregate amount of the Borrower’s deposits at such institution; and (v) deposits or investments in mutual or similar funds offered or sponsored by brokerage or other companies having membership in the Securities Investor Protector Corporation investing only in obligations described in clauses (i) through (iv) above.

“ Code ” means the Internal Revenue Code of 1986, as amended from time to time.

 

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“ Collateral ” means the property in which any of the Security Documents creates or purports to create a security interest or other lien in favor of the Agent for the ratable benefit of the Lenders and the Agent.

“ Commitment ” means (i) with respect to the Tranche 1 Loan, Lender’s obligation to make the Ten Million Dollar ($10,000,000) loan under this Agreement and (ii) with respect to the Tranche 2 Loan, Lender’s obligation to make the Six Million Six Hundred Seventy-Two Thousand Dollar ($6,672,000) loan under this Agreement.

“ Commitment Period ” has the meaning given in Section 2.1 .

“ Consent of Customer ” means a Consent and Agreement to Collateral Assignment of Capacity Lease Agreement executed by a Customer for the benefit of the Lender, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“ Consent of Supplier ” means a Consent and Agreement to Lending Party Services Agreement executed by a Supplier for the benefit of the Lender, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“ Controlled Group ” means all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with the Borrower, are treated as a single employer under Section 414(b) or 414(c) of the Code.

“ Customer ” means, as the context requires, the Government of Samoa, SamoaTel Limited, AT&T Corp., American Samoa Telecommunications Authority, and AST Telecom LLC d/b/a Blue Sky Communications.

“ Default ” means any event which but for the passage of time, the giving of notice, or both would be an Event of Default.

“ Default Rate ” means a per annum rate equal to eight percent (8%) above the Prime Rate (changing as such Prime Rate changes).

“ Dollar ” and “ $ ” mean lawful money of the United States.

“ Environmental Laws ” means all federal, state and local statutes, regulations, ordinances, and requirements, now or hereafter in effect, pertaining to environmental protection, contamination or cleanup, including, without limitation (i) the Federal Resource Conservation and Recovery Act of 1976 (42 U.S.C. § 6901, et seq .), (ii) the Federal Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. § 9601, et seq .), (iii) the Federal Hazardous Materials Transportation Control Act (49 U.S.C. § 1801, et seq .), (iv) the Federal Clean Air Act (42 U.S.C. § 7401, et seq. ), (v) the Federal Water Pollution Control Act, Federal Clean Water Act (33 U.S.C. § 1251, et seq. ), (vi) the Federal Insecticide, Fungicide, and Rodenticide Act, Federal Pesticide Act (7 U.S.C. § 136, et seq. ), (vii) the Federal Toxic Substances Control Act (15 U.S.C. § 2601, et seq. ) and (viii) the Federal Safe Drinking Water Act (42 U.S.C. § 300f, et seq. ), all as now or hereafter amended.

 

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“ EBIT ” means, for any period, an amount equal to Net Income for such period plus , the following to the extent deducted in calculating such Net Income, (i) Interest Expense for such period and (ii) all Federal, state, local and foreign income tax expense of the Borrower and its Subsidiaries on a consolidated basis for such period.

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

“ Event of Default ” has the meaning given in Section 8.1 .

“ Excess Cable ” means the cable owned by ASHUC.

“ Existing Debt ” means the Indebtedness set forth on Schedule 1 attached hereto.

“ Financial Transaction Contract ” means any agreement (including all schedules thereto, confirmations of transactions thereunder, and documents, definitions, and agreements incorporated therein by reference or relating thereto) between the Borrower and the Lender or an Affiliate of the Lender, whether or not in writing, pursuant to which the Lender or an Affiliate of the Lender has agreed to (i) permit daylight overdrafts to occur on accounts maintained by the Borrower with the Lender or such Affiliate of the Lender, (ii) provide remote disbursement services for any the Borrower, (iii) process automated clearing house (ACH) transactions for the account of the Borrower or (iv) extend credit to the Borrower, in the form of credit card accounts and merchant card accounts, and, unless the context otherwise clearly requires, any master agreement relating to or governing any or all of the foregoing.

“ Fraudulent Transfer Law ” means Section 548 of the Bankruptcy Code of the United States, the Uniform Fraudulent Transfer Act, or any applicable provisions of comparable international, foreign, Federal, state or local law.

“ GAAP ” has the meaning given in Section 1.3 .

“ Government Approval ” means an approval, permit, license, authorization, certificate, or consent of any Governmental Authority.

“ Governmental Authority ” means the government of the United States or any State or any foreign country or any political subdivision of any thereof or any branch, department, agency, instrumentality, court, tribunal or regulatory authority which constitutes a part or exercises any sovereign power of any of the foregoing.

“ Guaranty ” means that certain Continuing Guaranty, substantially in the form of Exhibit B attached hereto, executed by the Guarantor in favor of the Lender, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“ Guarantor ” means, individually and collectively, Elandia International Inc., a Delaware corporation and American Samoa Hawaii Undeployed Cable, LLC, a Delaware limited liability company.

 

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“ Guarantor Documents ” means the Guaranty and the Security Documents to which the Guarantor is a party, as any thereof shall be amended, restated, supplemented or otherwise modified from time to time and all other certificates, instruments and other documents executed by any Guarantor in connection with this Agreement or the transactions contemplated hereby.

“ Indebtedness ” means, for any Person, without duplication: (i) all indebtedness for borrowed money; (ii) all obligations issued, undertaken or assumed as the deferred purchase price of property or services (other than indebtedness or liability for borrowed money deferred for a period of more than six months from the date of incurrence or trade payables entered into in the ordinary course of business on ordinary terms); (iii) all reimbursement or payment obligations with respect to letters of credit, bankers acceptances, surety bonds and similar instruments; (iv) all obligations evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition of property, assets or businesses; (v) the net obligations of such Person under any Swap Contract in an amount equal to (A) if such Swap Contract has been closed out, the termination value thereof, or (B) if such Swap Contract has not been closed out, the mark-to-market value thereof determined on the basis of readily available quotations provided by any recognized dealer in such swap agreement; (vi) all indebtedness created or arising under any conditional sale or other title retention agreement (excluding any operating lease), or incurred as financing, in either case with respect to property acquired by such Person (even though the rights and remedies of the seller or bank under such agreement in the event of default are limited to repossession or sale of such property); (vii) all obligations with respect to Capital Leases or Synthetic Leases; (viii) all indebtedness referred to in clauses (i) through (vi) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in property (including, without limitation, accounts and contracts rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness; and (viii) all liabilities in respect of indebtedness or obligations of others of the kinds referred to in clauses (i) through (vii) above for which such Person is directly or contingently liable as obligor, guarantor, or otherwise, or in respect of which such Person otherwise assures a creditor against loss. For purposes of this Agreement, the Indebtedness of any Person shall include all recourse Indebtedness of any partnership or joint venture formed as a partnership where such Person is a general partner or is otherwise liable for the Indebtedness of such partnership or joint venture to the extent of recourse against such Person, unless such Indebtedness is expressly made non-recourse to such Person and except for customary exceptions acceptable to the Lender.

“ Intellectual Property ” means, as to any Person, all of the following: (i) all trademarks, service marks, designs, trade names, corporate names, company names, business names, fictitious business names, trade styles, trade dress, logos, other source or business identifiers owned or used by such Person in its business or hereafter adopted or acquired, all registrations and recordings thereof, and all registration and recording applications filed in connection therewith, including registrations and pending applications in the United States Patent and Trademark Office, any State of the United States or any similar offices in any other country or any political subdivision thereof, and all extensions or renewals thereof; (ii) all letters patent of the United States or any other country or any political subdivision thereof, all registrations and recordings thereof, and all applications for letters patent of the United States or the equivalent thereof in any other country owned by such Persons, including registrations, recordings and pending applications in the

 

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United States Patent and Trademark Office or the equivalent thereof in any similar offices in any other country, and all reissues, continuations, divisions, continuations-in-part, renewals or extensions thereof, and the inventions disclosed or claimed therein, including the right to make, use and/or sell the inventions disclosed or claimed therein; (iii) all computer programs, computer data bases, other computer software, trade secrets, trade secret rights, ideas, drawings, designs, schematics, algorithms, writings, techniques, processes and formulas owned or used by such Person in its business; and (iv) all copyright rights of such Person in any work subject to the copyright laws of the United States, any state thereof or any other country or any political subdivision thereof, whether registered or unregistered and whether published or unpublished, whether as author, assignee, transferee or otherwise, and all registrations and applications for registration of any such copyright in the United States, any state thereof or any other country or any political subdivision thereof, including registrations, recordings, supplemental registrations and pending applications for registration in the United States Copyright Office or in any similar offices in any other country.

“ Interest Expense ” means, for any period, the sum (without duplication) of (i) all interest, premium payments, debt discount, fees, charges and related expenses in connection with borrowed money (including capitalized interest) or in connection with the deferred purchase price of assets, in each case to the extent treated as interest in accordance with GAAP and (ii) the portion of rent expense with respect to such period under Capital Leases that is treated as interest in accordance with GAAP, in each case, of or by the Borrower and its Subsidiaries on a consolidated basis for such period.

“ Investments ” has the meaning given in Section 7.8 .

“ Lenders ” means ANZ Finance, ANZ Bank and any Successors thereto or permitted assigns thereof, and “ Lender ” means ANZ Finance or ANZ Bank, and any Successor thereto or permitted assigns thereof.

“ Lien ” means, for any Person, any security interest, pledge, mortgage, charge, assignment, hypothecation, encumbrance, attachment, garnishment, execution or other voluntary or involuntary lien upon or affecting the revenues of such Person or any real or personal property in which such Person has or hereafter acquires any interest.

“ Loan Documents ” means, collectively, the Borrower Documents, the Guarantor Documents and all other documents executed by the Borrower or any Guarantor and delivered to the Lender in connection with the transactions contemplated by this Agreement as the same may be amended, restated, supplemented or otherwise modified from time to time.

“ Loan Parties ” means ASHC, SASC and ASHUC.

“ Loans ” means (as the context requires) the Tranche 1 Loan and the Tranche 2 Loan which in the aggregate will total up to the maximum principal amount of Sixteen Million Six Hundred Seventy-Two Thousand Dollars ($16,672,000), and “ Loan ” means the Tranche 1 Loan or the Tranche 2 Loan (as the context requires).

“ Maturity Date ” means June 7, 2016.

 

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“ Net Income ” means, for any period, an amount equal to the net income of the Borrower and its Subsidiaries on a consolidated basis for such period determined in accordance with GAAP.

“ Notes ” means the Tranche 1 Note and the Tranche 2 Note, and “ Note ” means either of them.

“ Officer’s Certificate ” means a certificate executed and delivered on behalf of the Borrower by a Responsible Officer of the Borrower.

“ PBGC ” means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.

“ Pension Plan ” means an “employee pension benefit plan” (as such term is defined in ERISA) from time to time maintained by the Borrower or a member of a Controlled Group.

“ Permitted Liens ” means: (i) Liens securing Taxes which are not delinquent or which remain payable without penalty (excluding any Liens imposed pursuant to any of the provisions of ERISA) or the validity or amount of which is being contested in good faith by appropriate proceedings, which shall have the effect of staying execution if execution is threatened or possible; (ii) Liens imposed by law (such as mechanics’, processor’s, materialmen’s, carriers’, warehousemen’s and landlord’s liens) incurred in good faith in the ordinary course of business which are not delinquent or which remain payable without penalty or the validity or amount of which is being contested in good faith by appropriate proceedings, which shall have the effect of staying execution if execution is threatened or possible; (iii) Liens arising in connection with worker’s compensation, unemployment insurance and social security benefits which are not delinquent or which remain payable without penalty or the validity or amount of which is being contested in good faith by appropriate proceedings, which shall have the effect of staying execution if execution is threatened or possible; (iv) Liens incurred or deposits made in the ordinary course of business to secure the performance of bids tenders, statutory obligations, fee and expense arrangements with trustees and fiscal agents (exclusive of obligations incurred in connection with the borrowing of money) and customary deposits granted in the ordinary course of business under operating leases; (v) Liens securing surety, indemnity, performance, appeal and release bonds; (vi) customary rights of set off, revocation, refund or chargeback under deposit agreements or under the UCC in favor of banks where the Borrower maintains deposits in the ordinary course of business; (vii) Liens constituting encumbrances in the nature of zoning restrictions, condemnations, easements, encroachments, covenants, rights of way, minor defects, irregularities and rights or restrictions of record on the title or use of real property, which, in the reasonable judgment of the Lender, do not materially detract from the value of such property or materially impair the use thereof in the business and operations of the Borrower; and (viii) Liens on any portion of the Excess Cable granted to Agent or Lenders.

“ Person ” means any natural person, corporation, unincorporated organization, trust, joint stock company, joint venture, association, company, limited liability company, partnership or government, or any agency or political subdivision of any government.

 

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“ Plan ” means, at any time, an employee pension benefit plan which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code and is either (i) maintained by the Borrower or any member of a Controlled Group for employees of the Borrower or any member of a Controlled Group or (ii) maintained pursuant to a collective bargaining agreement or any other arrangement under which more than one employer makes contributions and to which the Borrower or any member of a Controlled Group is then making or accruing an obligation to make contributions or has within the preceding five (5) plan years made contributions.

“ Prime Rate ” means the base rate on corporate loans posted by at least 75% of the United States’ 30 largest banks, commonly known as the U.S. Prime Rate of Interest as published from time to time in the Wall Street Journal .

“ Purchase Agreement ” means that certain Purchase and Sale, Finance and Development Agreement between Borrower and Pac-Rim Redeployment, LLC with an effective date of May 30, 2008, as amended by First Amendment to Purchase and Sale, Finance and Development Agreement dated November 4, 2008.

“ Reporting Parties ” means ASHC, SASC, ASHUC, Elandia International, Inc., AST Telecom, Inc., American Entertainment, Inc., Datec (Fiji) Limited and Generic Technology Limited and “ Reporting Party ” means any one of them.

“ Responsible Officer ” means, as to any Loan Party, any of the President, the Director, the Vice President, or the Secretary of such Loan Party.

“ SASC ” has the meaning specified in the Preamble.

“ Security Agreements ” means, collectively (i) that certain Security Agreement dated as of June 8, 2009 substantially in the form of Exhibit C-1 attached hereto executed by the Borrower in favor of the Agent for the ratable benefit of the Lenders and the Agent, (ii) that certain Collateral Assignment of Landing Party Agreements dated as of June 8, 2009 substantially in the form of Exhibit C-2 attached hereto executed by the Borrower in favor of the Agent for the ratable benefit of the Lenders and the Agent, (iii) that certain Collateral Assignment of Capacity Lease Agreements dated as of June 8, 2009 substantially in the form of Exhibit C-3 hereto executed by Borrower in favor of the Agent for the ratable benefit of the Lenders and the Agent; (iv) that certain Security Agreement dated as of June 8, 2009, substantially in the form of Exhibit C-4 hereto, executed by SASC in favor of the Agent for the ratable benefit of the Lenders and the Agent; and (v) that certain Security Agreement dated as of June 8, 2009, substantially in the form of Exhibit C-5 hereto, executed by ASHUC in favor of the Agent for the ratable benefit of the Lenders and the Agent, as each may be amended, restated, supplemented or otherwise modified from time to time, and “ Security Agreement ” means any of them.

“ Security Documents ” means, collectively (i) the Security Agreements, (ii) all financing statements, fixture filings, landlord waivers and notices filed in connection therewith, and (iii) all other documents and instruments executed by the Borrower or any Guarantor in connection therewith, as any thereof shall be amended, restated, supplemented or otherwise modified from time to time.

 

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“ Solvent ” means, as to any Person at a particular time, if, at such time both (a) (i) the then fair saleable value of the property of such Person on a going concern basis is (A) greater than the total amount of liabilities (including contingent liabilities) of such Person as they mature in the ordinary course and (B) not less than the amount that will be required to pay the probable liabilities on such Person’s then existing debts as they become absolute and matured considering all financing alternatives and potential asset sales reasonably available to such Person; (ii) such Person’s capital is not unreasonably small in relation to its business or any contemplated or undertaken transaction; and (iii) such Person does not intend to incur, or believe (nor should it reasonably believe) that it will incur, debts beyond its ability to pay such debts as they become due; and (b) such Person is “solvent” within the meaning given that term and similar terms under applicable laws relating to fraudulent transfers and conveyances. For purposes of this definition, the debts and liabilities of a Person, contingent or otherwise, shall include the amount of all debts and liabilities that are relevant under applicable Fraudulent Transfer Laws, and the assets of a Person shall give effect to the value (as determined under the applicable provisions of the Fraudulent Transfer Laws) of any rights to subrogation, reimbursement, indemnification or contribution of such Person pursuant to applicable Law or pursuant to the terms of any agreement (including the Contribution Agreement).

“ Subordinated Debt ” means Indebtedness of the Borrower or any Subsidiary with respect to which the Borrower or such Subsidiary and the party to whom the Indebtedness is owed have executed and delivered a subordination agreement in favor of the Lender in form and substance satisfactory to the Lender.

“ Subsidiary ” means, for any Person, each business entity directly or indirectly controlled by such Person. For the purposes of this definition, “controlled by” shall mean the possession, directly or indirectly of the power to direct or cause the direction of the management or policies of such Subsidiary, whether through the ownership of partnership or limited liability company interest, voting securities, by contract, or otherwise. Unless otherwise specified, all references herein to a “Subsidiary” shall refer to a Subsidiary of the Borrower.

“ Successor ” means, for any corporation, banking association or other legal entity, any successor by merger or consolidation, or by acquisition of substantially all of the assets of the predecessor, or by conversion to another type of legal entity, or by continuation after and the occurrence of an event that would otherwise result in termination under applicable law but for such continuation.

“ Supplier ” means, as the context requires, AT&T Corp., SamoaTel Limited, AST Telecom LLC d/b/a Blue Sky Communications.

“ Swap Contract ” means any agreement (including all schedules thereto, confirmations of transactions thereunder, and documents, definitions, and agreements incorporated therein by reference or relating thereto) relating to any transaction between the Borrower and the Lender or an Affiliate of the Lender that is an interest rate swap agreement or equivalent interest rate risk management agreement, basis swap, forward rate agreement, interest rate option, rate cap, collar or floor agreement or any other, similar agreement, and, unless the context otherwise clearly requires, any master agreement relating to or governing any or all of the foregoing.

 

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“ Synthetic Lease ” means (i) a so-called synthetic, off-balance sheet or tax retention lease, or (ii) an agreement for the use or possession of property creating obligations which do not appear on the balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person, would be characterized as the Indebtedness of such Person (without regard to accounting treatment).

“ Tax ” means, for any Person, any tax, assessment, duty, levy, impost or other charge imposed by any Governmental Authority on such Person or on any property, revenue, income, or franchise of such Person and any interest or penalty with respect to any of the foregoing.

“ Tranche 1 Commitment ” means Ten Million Dollars ($10,000,000).

“ Tranche 1 Note ” has the meaning given in Section 2.6 .

“ Tranche 2 Commitment ” means Six Million Six Hundred Seventy-Two Thousand Dollars ($6,672,000).

“ Tranche 2 Loan ” has the meaning given to it in Section 3.1 .

“ Tranche 2 Note ” has the meaning given in Section 3.6 .

“ Treasury Management Contract ” means any agreement among the Borrower and its Affiliates governing the provision of treasury or cash management services, including, without limitation, deposit accounts, funds transfers, automated clearing house (ACH) transactions, zero balance accounts, concentration accounts, controlled disbursement services and lockbox accounts.

“ Unfunded Vested Liabilities ” means, with respect to any Plan at any time, the amount (if any) by which (i) the present value of all vested non-forfeitable benefits under such Plan exceeds (ii) the fair market value of all Plan assets allocable to such benefits, all determined as of then most recent valuation date for such Plan, but only to the extent that such excess represents a potential liability of the Borrower or any member of a Controlled Group to the PBGC or the Plan under Title IV of ERISA.

“ United States ” and “ U.S. ” each means the United States of America.

Section 1.2 General Principles Applicable to Definitions . Definitions given herein shall be equally applicable to both singular and plural forms of the terms therein defined and references herein to “he” or “it” shall be applicable to Persons whether masculine, feminine or neuter. References herein to any document including, without limitation, this Agreement shall be deemed a reference to such document as it now exists, and as, from time to time hereafter, the same may be amended. The term “including” is not limiting and means “including without limitation.” References herein to any section, subsection, Schedule or Exhibit shall, unless otherwise indicated, be deemed a reference to sections and subsections within and schedules and Exhibits to this Agreement.

 

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Section 1.3 Accounting Terms. Except as otherwise provided herein, accounting terms not specifically defined shall be construed, and all accounting procedures shall be performed, in accordance with generally accepted United States accounting principles consistently applied from and after the date hereof (“ GAAP ”) and as in effect on the date of application.

Section 1.4 UCC Terms . Except as otherwise provided herein, terms used herein that are defined in the UCC have the meanings given to them in the Uniform Commercial Code (the “ UCC ”) as the same may, from time to time, be in effect in the State of Washington.

ARTICLE 2

THE TRANCHE 1 LOAN

Section 2.1 Tranche 1 Loan . Subject to the terms and conditions of this Agreement, Lenders agree to make a term loan (the “ Tranche 1 Loan ”) duly requested by the Borrower in a Notice of Borrowing given under this Agreement; provided , that, after giving effect to any such requested borrowing the aggregate principal amount of the Tranche 1 Loan will not exceed the Tranche 1 Commitment.

Section 2.2 Manner of Borrowing . To request the Tranche 1 Loan, the Borrower shall deliver to Agent a written request made by a Responsible Officer not later than 11:00 a.m. (Pago Pago time) on the date the Borrower wishes the Tranche 1 Loan to be made. Such request shall specify the date of a requested borrowing (which must be a Business Day) and the amount thereof. Such request shall be deemed to constitute a representation and warranty by the Borrower that (i) as of the date of such request, the representations and warranties set forth in Article 5 hereof are true and correct in all material respects and (ii) no Default or Event of Default has occurred and is continuing or will result from making the requested the Tranche 1 Loan. Upon fulfillment to Agent’s satisfaction of the applicable conditions set forth in this Section 2.2 and in Article 4 hereof, Lenders shall promptly make the principal amount of the requested borrowing available to the Borrower first by direct payment to the lenders holding Existing Debt until the existing debt is paid in full and thereafter by depositing the amount to an ordinary checking account maintained by the Borrower with ANZ Bank.

Section 2.3 Repayment of Tranche 1 Loan . The Borrower shall repay to Agent, for the benefit of Lenders, the Tranche 1 Loans in (a) seven (7) consecutive monthly installments of accrued interest only, and (b) followed by seventy-seven (77) consecutive monthly installments each in the amount of One Hundred Twelve Thousand Three Hundred Fifty-five and 24/100 Dollars ($112,355.24) including interest accrued at the Applicable Interest Rate, beginning with the first payment due on July 8, 2009 and the same day of each month thereafter (each a “ Tranche 1 Payment Date ”) through the Maturity Date. On the Maturity Date the entire remaining unpaid principal balance shall be due in full (estimated to be approximately Four Million Twenty Thousand Three Hundred Fifty-Two and 38/100 Dollars ($4,020,352.38) (more or less)), together with all unpaid interest accrued at the Applicable Interest Rate. The Tranche 1 Loan may be repaid at any time without penalty or premium.

Section 2.4 Interest . The Borrower agrees to pay to Agent, for the benefit of Lenders, interest on the unpaid principal amount of the Tranche 1 Loan from the date the Tranche 1 Loan is made until the Tranche 1 Loan shall be paid in full at a per annum rate equal

 

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to the Applicable Interest Rate in effect from time to time; provided , however , that after the occurrence and during the continuation of an Event of Default, interest shall accrue at the Default Rate; provided , further , that interest shall not accrue at a rate in excess of the maximum rate permitted by applicable law. Computations of interest on the Tranche 1 Loan shall be made on the basis of a year of 365/366 days, for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest is payable. Notwithstanding the foregoing, in the event Borrower obtains a USDA Rural Development ‘Conditional Commitment for Guarantee’ in favor of Lender covering the outstanding amount of the Tranche 1 Loan (“ USDA Guaranty ”) the definition of “Applicable Interest Rate” in Section 1.1 hereof shall be amended, as of the effective date of the USDA Guaranty in favor of Lender, to delete “two percent (2.0%)” and to substitute in place thereof “one and one-tenth percent (1.10%).”

Section 2.5 Form and Place of Payment . All payments and prepayments of principal and interest on the Tranche 1 Loan shall be made by paying the same in United States Dollars and in immediately available funds to Agent not later than 3:00 p.m. (Pago Pago time) on the date on which such payment or prepayment shall become due. If such payment is received after 3:00 p.m. (Pago Pago time), then it will be deemed received on the next Business Day. All payments to be made by the Borrower shall be made without setoff, recoupment or counterclaim. Whenever any payment under this Article 2 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 and payment of interest or fees, as the case may be.

Section 2.6 Note; Recordation of Tranche 1 Loan . The Tranche 1 Loan shall be evidenced by a promissory note of the Borrower dated as of the date hereof, payable to the order of ANZ Bank, as Agent for the benefit of Lenders, substantially in the form attached hereto as Exhibit A-1 in the face amount of the Tranche 1 Commitment (the “the Tranche 1 Note ”). Agent is hereby authorized to record the date and amount of the Tranche 1 Loan, the Applicable Interest Rate, and the date and amount of each payment of principal and interest thereon on a schedule annexed to or kept in respect of the Tranche 1 Note. Any such recordation by Agent shall constitute prima facie evidence of the accuracy of the information so recorded; provided , however , that the failure to make any such recordation or any error in any such recordation shall not affect the obligations of the Borrower hereunder or under the Tranche 1 Note.

Section 2.7 Commitment Fees . The Borrower agrees to pay to Agent for the ratable benefit of Lenders, in connection with the Loans an upfront loan commitment fee for the Tranche 1 Loan and the Tranche 2 Loan in the amount of Two Hundred Fifty Thousand Eighty Dollars ($250,080). The upfront loan commitment fee shall be payable at closing as set forth in Section 4.1(j) . The fees payable under this Section 2.7 shall be deemed fully earned when due and non-refundable when paid.

ARTICLE 3

THE TRANCHE 2 LOAN

Section 3.1 Tranche 2 Loan . Subject to the terms and conditions of this Agreement, Lenders agree that after the satisfaction of the conditions set forth in Article 4 hereof, to make a term loan (the “ Tranche 2 Loan ”) to the Borrower in the principal amount of Six Million Six Hundred Seventy-Two Thousand Dollars ($6,672,000).

 

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Section 3.2 Manner of Borrowing . To request the Tranche 2 Loan, the Borrower shall deliver to the Agent a written request made by a Responsible Officer not later than 11:00 a.m. (Pago Pago time) on the date the Borrower wishes the Tranche 2 Loan to be made. Such request shall specify the date of the requested borrowing (which must be a Business Day) and the amount thereof. Such request shall be deemed to constitute a representation and warranty by the Borrower that (i) as of the date of such request, the representations and warranties set forth in Article 5 hereof are true and correct in all material respects and (ii) no Default or Event of Default has occurred and is continuing or will result from making the Tranche 2 Loan. Upon fulfillment to Agent’s satisfaction of the applicable conditions set forth in this Section 3.2 and in Article 4 hereof, Lenders will promptly make the proceeds of the Tranche 2 Loan available to the Borrower first by direct payment to the lenders of the Existing Debt until the Existing Debt is paid in full and thereafter by depositing the amount to an ordinary checking account maintained by the Borrower with ANZ Bank.

Section 3.3 Repayment of Tranche 2 Loan . The Borrower shall repay to Agent, for the benefit of Lenders, the Tranche 2 Loan in (a) seven (7) consecutive monthly installments of accrued interest only, (b) followed by seventy-seven (77) consecutive installments each in the amount of Seventy-Four Thousand Nine Hundred Sixty-Three and 42/100 Dollars ($74,963.42) including interest accrued at the Applicable Interest Rate, beginning with the first payment due on July 8, 2009 and the same day of each month thereafter (each a “ Tranche 2 Payment Date ”) through the Maturity Date. On the Maturity Date the entire remaining unpaid principal balance of the Tranche 2 Loan shall be due in full (estimated to be approximately Two Million Thirty-Seven Thousand Five Hundred Four and 65/100 Dollars ($2,037,504.65) (more or less), together with all unpaid interest accrued at the Applicable Interest Rate. The Tranche 2 Loan may be repaid at any time without premium or penalty.

Section 3.4 Interest . The Borrower agrees to pay to Agent, for the benefit of Lenders, interest on the unpaid principal amount of the Tranche 2 Loan from the date made until the Tranche 2 Loan shall be due and payable at a per annum rate equal to the Applicable Interest Rate in effect from time to time; provided , however , that after the occurrence and during the continuation of an Event of Default, interest shall accrue at the Default Rate; provided , further , that interest shall not accrue at a rate in excess of the maximum rate permitted by applicable law. Accrued but unpaid interest on the Tranche 2 Loan shall be paid in accordance with Section 3.3 . Computations of interest on the Tranche 2 Loan shall be made on the basis of a year of 365/366 days, for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest is payable. Notwithstanding the foregoing, in the event Borrower obtains a USDA Rural Development ‘Conditional Commitment for Guarantee’ in favor of Lender covering the outstanding amount of the Tranche 2 Loan (“ USDA Guaranty ”) the definition of “Applicable Interest Rate” in Section 1.1 hereof shall be amended, as of the effective date of the USDA Guaranty in favor of Lender, to delete “two percent (2.0%)” and to substitute in place thereof “one and one-tenth percent (1.10%).”

Section 3.5 Form and Place of Payment . All payments and prepayments of principal and interest on each Loan shall be made by paying the same in United States Dollars and in immediately available funds to the Agent not later than 3:00 p.m. (Pago Pago

 

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time) on the date on which such payment or prepayment shall become due. If such payment is received after 3:00 p.m. (Pago Pago time), then it will be deemed received on the next Business Day. All payments to be made by the Borrower shall be made without setoff, recoupment or counterclaim. Whenever any payment under this Article 3 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 and payment of interest or fees, as the case may be.

Section 3.6 Note; Recordation of Tranche 2 Loan . The Tranche 2 Loan shall be evidenced by a promissory note of the Borrower dated as of the date hereof, payable to the order of ANZ Bank, as Agent for the benefit of Lenders, substantially in the form attached hereto as Exhibit A-2 in the face amount of Six Million Six Hundred Seventy-Two Thousand Dollars ($6,672,000) (the “ Tranche 2 Note ”). Agent is hereby authorized to record the date and amount of the Tranche 2 Loan, the Applicable Interest Rate, and the date and amount of each payment of principal and interest thereon on a schedule annexed to or kept in respect of the Tranche 2 Note. Any such recordation by Agent shall constitute prima facie evidence of the accuracy of the information so recorded; provided , however , that the failure to make any such recordation or any error in any such recordation shall not affect the obligations of the Borrower hereunder or under the Tranche 2 Note.

ARTICLE 4

CONDITIONS TO LOANS

Section 4.1 Conditions to Initial Advance . In addition to the conditions set forth in Section 4.4 , the obligations of Lenders to make the Tranche 1 Loan and the Tranche 2 Loan are subject to fulfillment of the following conditions precedent prior to making such Loan:

(a) Borrower Documents . The Agent shall have received the following, each properly executed by an officer of the Borrower and each in form and substance satisfactory to the Agent and its legal counsel: (i) executed counterparts of this Agreement; (ii) the original Notes; and (iii) executed counterparts of each other Borrower Document.

(b) Borrower Authority . The Agent shall have received the following, each in form and substance satisfactory to the Agent and its legal counsel: (i) such certificates of resolutions or other action, incumbency certificates and/or other certificates of officers of the Borrower as the Agent may require to establish the identities of and verify the authority and capacity of each officer thereof authorized to act as an officer in connection with this Agreement, the Notes and the other Borrower Documents; and (ii) such evidence as the Agent may require to verify that the Borrower is duly formed, validly existing, in good standing and qualified to engage in business in each jurisdiction in which it is required to be qualified to engage in business, including certified copies of the Borrower’s certificate of formation and operating agreement and a certificate of good standing.

(c) Guarantor Documents . The Agent shall have received the following, each properly executed by an officer of Guarantor a party thereto and each in form and substance satisfactory to the Agent and its legal counsel: (i) executed counterparts of the Guaranty; and (ii) executed counterparts of each other Guarantor Document.

 

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(d) Guarantor Authority . The Agent shall have received the following, each in form and substance satisfactory to the Agent and its legal counsel: (i) such certificates of resolutions or other action, incumbency certificates and/or other certificates of officers of each Guarantor as the Agent may require to establish the identities of and verify the authority and capacity of each officer thereof authorized to act as an officer in connection with the Guaranty and the other Guarantor Documents to which such Guarantor is a party; and (ii) such evidence as the Agent may require to verify that each Guarantor is duly formed, validly existing, in good standing and qualified to engage in business in each jurisdiction in which it is required to be qualified to engage in business, including certified copies of each Guarantor’s articles or certificate of incorporation and bylaws and a certificate of good standing.

(e) Collateral . The Agent shall have received the following, each in form and substance satisfactory to the Agent and its legal counsel:

(i) searches of Uniform Commercial Code filings in (A) the jurisdiction in which the Borrower is organized, (B) the jurisdiction in which the chief executive office of the Borrower is located, and (C) each jurisdiction where any Collateral is located or where a filing would need to be made in order to perfect the Lien created by the Security Documents, copies of the financing statements on file in such jurisdictions and evidence that no Liens exist other than as expressly permitted by this Agreement;

(ii) to the extent not described in Sections 4.1(a) and 4.1(c) above, executed counterparts of each Security Document together with allonges or assignments as may be necessary or appropriate to perfect the Lien created by the Security Documents; and

(iii) evidence that all other actions necessary or, in the opinion of the Lender, desirable to perfect and protect the first priority Lien created by the Security Documents, and to enhance the Agent’s ability to preserve and protect its interests in and access to the Collateral, have been taken.

(f) Evidence of Priority . The Agent shall have received evidence reasonably satisfactory to the Agent and its legal counsel that (i) the Agent holds a perfected, first priority Lien on all Collateral (other than as expressly permitted by this Agreement) and (ii) none of the Collateral is subject to any other Liens other than as expressly permitted by this Agreement.

(g) Evidence of Insurance . The Agent shall have received copies of insurance policies, certificates of insurance or other evidence reasonably satisfactory to the Agent that the insurance required by this Agreement or any Security Document is in full force and effect and that the Agent and Lenders have been named as additional insured and/or loss payee to the extent required hereunder or thereunder.

 

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(h) Officer’s Certificate . The Agent shall have received an Officer’s Certificate from the Borrower as to the accuracy of the Borrower’s representations and warranties set forth in Article 5 hereof and as to the absence of any Default or Event of Default.

(i) No Material Adverse Change . No event shall have occurred since the date of the balance sheet referred to in Section 5.6(b) that could reasonably be expected to have a material adverse change in, or a material adverse effect upon, the business, operations, properties or financial condition of the Borrower or the Borrower and the Guarantor taken as a whole.

(j) Payment of Fees and Expenses . The Lenders shall have received (i) the upfront fees set forth in Section 2.7 and (ii) reimbursement for all reasonable expenses, including, without limitation, the costs of any appraisals required to be obtained by the Borrower pursuant to Section 4.1(e) hereof, incurred by Agent or any Lender in connection with the consummation of the transactions contemplated by this Agreement and the other Loan Documents.

(k) Consents . The Agent shall have received evidence reasonably satisfactory to the Agent that the Borrower and Guarantor have obtained all consents, permits and Government Approvals from all Persons (including, without limitation, Governmental Authorities) which are parties to or the issuer of any material contract, lease, license or other Government Approval necessary or advisable to permit the Agent following any Event of Default, to enjoy the practical realization of the rights and remedies provided in this Agreement and the other Loan Documents, including duly executed Consent of Supplier by each Supplier (except AT&T Corp.) and duly executed Consent of Customer by each Customer (except AT&T Corp. and American Samoa Telecommunications Authority), and evidence that notice of the assignment to Agent with respect to the Capacity Lease Agreements and Landing Party Agreements shall have been given to AT&T Corp. by ASHC and evidence that notice of the assignment to Agent with respect to the Capacity Lease Agreements shall have been give to American Samoa Telecommunications Authority by ASHC.

Section 4.2 Acknowledgements . Agent shall have received:

(a) Acknowledgements from all members of ASHC that ASHC has entered into a fixed priced contract for the purchase of a fully operational underwater fibre optic cable for US$25,367,835, the cost of which has been paid or will be paid in full (i) with a US$9,000,000 contribution by the American Samoa Government (in exchange for its 33.3% ownership interest in ASHC) and (ii) loans by Lenders to Borrower under this Agreement.

(b) A Certificate or other evidence that the US$9,000,000 contribution by the American Samoa Government has been irrevocably committed to pay a portion of the acquisition price.

(c) Acknowledgement from the American Samoa Government of its knowledge of the security arrangements and collateral for the Loans, and acknowledgement that Lender has the right and power to sell the Cable System and other Collateral in the event of one or more continuing and unremedied events of default under this Agreement or other Loan Documents.

 

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(d) Confirmation from the attorney for each member/owner of ASHC that there is in place an agreement among the members regarding the distribution of revenues, income and property of ASHC with the understanding being that interest and principal payments on the Loans shall have priority over and above any dividends or any new debt repayment requirements of the Borrower.

Section 4.3 Final Acceptance. The Agent shall have received from ASHC a Certificate of Final Acceptance of the Cable System and certification that the Cable System is fully operational.

Section 4.4 Conditions to All Loans . The obligations of Lenders to make the Tranche 1 Loan and the obligations of Lenders to make the Tranche 2 Loan, are subject to fulfillment of the following conditions precedent:

(a) Prior Conditions . All of the conditions set forth in Section 4.1 shall have been satisfied.

(b) Notice of Borrowing . Agent shall have received from the Borrower a request therefor complying with the requirements of Section 2.2 , and in the case of the Tranche 1 Loan, and Agent shall have received from the Borrower a request therefor complying with the requirements of Section 3.2 in the case of the Tranche 2 Loan.

(c) No Defaults, Etc . At the date of the requested Loan, no Default or Event of Default shall have occurred and be continuing or will result from making such Loan; and the representations and warranties of the Borrower in Article 5 hereof shall be true on and as of such date with the same force and effect as if made on and as of such date.

(d) Revocation of Guaranty . Agent shall not have received from the Borrower or Guarantor any notice terminating or purporting to terminate Guarantor’s obligations under the Guaranty to which such Guarantor is a party or claiming that either Guaranty is not or will in the future not be fully enforceable against each Guarantor a party thereto in accordance with its terms.

(e) Other Information . The Agent shall have received such other statements, certificates, documents and information as it may reasonably request in order to satisfy itself that the conditions set forth in this Section 4.4 have been fulfilled.

ARTICLE 5

REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants to the Agent and each Lender as follows:

Section 5.1 Existence and Power . Each Borrower is a limited liability company, duly organized, validly existing and in good standing under the laws of the State of Delaware. Each Borrower is duly qualified to do business in each other jurisdiction where the failure to so qualify would be likely to have a material adverse effect on the business, operations, properties or financial condition of such Borrower. Each Borrower has full company power, authority and legal right to carry on its business and operations as presently conducted, to own and operate its properties and assets, and to execute, deliver and perform this Agreement and the other Borrower Documents.

 

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Section 5.2 Authorization . The execution, delivery and performance by the Borrower of this Agreement and the other Borrower Documents and any borrowing hereunder, have been duly authorized by all necessary company action of the Borrower, do not require any member approval or the approval or consent of any trustee or the holders of any Indebtedness of the Borrower, except such as have been obtained (certified copies thereof having been delivered to the Lender), do not contravene any law, regulation, rule or order binding on it or its certificate of formation and limited liability company agreement and do not contravene the provisions of or constitute a default under any material indenture, mortgage, contract or other agreement or instrument to which the Borrower is a party or by which the Borrower or any of its properties may be bound or affected.

Section 5.3 Government Approvals, Etc . No Government Approval or filing or registration with any Governmental Authority is required for the making and performance by the Borrower or any Guarantor of the Loan Documents or in connection with any of the transactions contemplated hereby or thereby, except such as have been heretofore obtained and are in full force and effect (certified copies thereof having been delivered to the Agent).

Section 5.4 Binding Obligations, Etc . This Agreement has been duly executed and delivered by the Borrower and constitutes, and the other Borrower Documents when duly executed and delivered will constitute, the legal, valid and binding obligations of the Borrower enforceable against the Borrower in accordance with their respective terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, similar laws affecting creditors’ rights generally or general principles of equity. The Guarantor Documents when duly executed and delivered will constitute, the legal, valid and binding obligations of each Guarantor a party thereto enforceable against such Guarantor in accordance with their respective terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, similar laws affecting creditors’ rights generally or general principles of equity.

Section 5.5 Litigation . Except as specifically disclosed in Schedule 2 attached hereto, there are no material actions, proceedings, investigations, or claims against or affecting the Borrower or any Guarantor now pending before any court, arbitrator, or Governmental Authority (nor to the Borrower’s knowledge has any thereof been threatened nor does any basis exist therefor) which if determined adversely to the Borrower or such Guarantor would (a) have a material adverse effect on the business, operations, properties or financial condition of the Borrower or the Borrower and the Guarantors taken as a whole, (b) impair or defeat the Lien of the Agent or any Lender on any material portion of the Collateral or any rights of the Borrower or any Guarantor therein, or (c) result in a judgment or or