Exhibit 10.3
UNCONDITIONAL GUARANTY
November 28, 2005
Roanoke Gas Company
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
P.O. Box 13007
Roanoke, Virginia 24016
(Individually and collectively "Borrower")
RGC Resources, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(Individually and collectively "Guarantor")
Wachovia Bank, National Association
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(Hereinafter referred to as "Bank")
To induce Bank to make, extend or renew loans, advances, credit, or other
financial accommodations to or for the benefit of Borrower, which are and will
be to the direct interest and advantage of the Guarantor, and in consideration
of loans, advances, credit, or other financial accommodations made, extended or
renewed to or for the benefit of Borrower, which are and will be to the direct
interest and advantage of the Guarantor, Guarantor hereby absolutely,
irrevocably and unconditionally guarantees to Bank and its successors, assigns
and affiliates the timely payment and performance of all liabilities and
obligations of Borrower to Bank and its affiliates, including, but not limited
to, all obligations under any notes, loan agreements, security agreements,
letters of credit, instruments, accounts receivable, contracts, drafts, leases,
chattel paper, indemnities, acceptances, repurchase agreements, overdrafts, and
the Loan Documents, as defined below, and all obligations of Borrower to Bank or
any of its affiliates under any swap agreement (as defined in 11 U.S.C. Section
101, as in effect from time to time), however and whenever incurred or
evidenced, whether primary, secondary, direct, indirect, absolute, contingent,
due or to become due, now existing or hereafter contracted or acquired, and all
modifications, extensions and renewals thereof, (collectively, the "Guaranteed
Obligations").
Guarantor further covenants and agrees:
GUARANTOR'S LIABILITY. This Guaranty is a continuing and unconditional guaranty
of payment and performance and not of collection. The parties to this Guaranty
are jointly and severally obligated hereunder. This Guaranty does not impose any
obligation on Bank to extend or continue to extend credit or otherwise deal with
Borrower at any subsequent time. This Guaranty shall continue to be effective or
be reinstated, as the case may be, if at any time any payment of the Guaranteed
Obligations is rescinded, avoided or for any other reason must be returned by
Bank, and the returned payment shall remain payable as part of the Guaranteed
Obligations, all as though such payment had not been made. Except to the extent
the provisions of this Guaranty give Bank additional rights, this Guaranty shall
not be deemed to supersede or replace any other guaranties given to Bank by
Guarantor; and the obligations guaranteed hereby shall be in addition to any
other obligations guaranteed by Guarantor pursuant to any other agreement of
guaranty given to Bank and other guaranties of the Guaranteed Obligations.
TERMINATION OF GUARANTY. Guarantor may terminate this Guaranty only by written
notice, delivered personally to or received by certified or registered United
States Mail by an authorized officer
of Bank at the address for notices provided herein. Such termination shall be
effective only with respect to Guaranteed Obligations arising more than 15 days
after the date such written notice is received by said Bank officer. Such
termination shall not be effective with respect to Guaranteed Obligations
(including any subsequent extensions, modifications or compromises of the
Guaranteed Obligations) then existing, or Guaranteed Obligations arising
subsequent to receipt by Bank of said notice if such Guaranteed Obligations are
a result of Bank's obligation to make advances pursuant to a commitment, or are
based on Borrower's obligations to make payments pursuant to any swap agreement
(as defined in 11 U.S.C. Section 101, as in effect from time to time), entered
into prior to expiration of the 15 day notice period, or are a result of
advances which are necessary for Bank to protect its collateral or otherwise
preserve its interests. Termination of this Guaranty by any single Guarantor
will not affect the existing and continuing obligations of any other Guarantor
hereunder.
CONSENT TO MODIFICATIONS. Guarantor consents and agrees that Bank (and, with
respect to swap obligations, its affiliates) may from time to time, in its sole
discretion, without affecting, impairing, lessening or releasing the obligations
of Guarantor hereunder: (a) extend or modify the time, manner, place or terms of
payment or performance and/or otherwise change or modify the credit terms of the
Guaranteed Obligations; (b) increase, renew, or enter into a novation of the
Guaranteed Obligations; (c) waive or consent to the departure from terms of the
Guaranteed Obligations; (d) permit any change in the business or other dealings
and relations of Borrower or any other guarantor with Bank; (e) proceed against,
exchange, release, realize upon, or otherwise deal with in any manner any
collateral that is or may be held by Bank in connection with the Guaranteed
Obligations or any liabilities or obligations of Guarantor; and (f) proceed
against, settle, release, or compromise with Borrower, any insurance carrier, or
any other person or entity liable as to any part of the Guaranteed Obligations,
and/or subordinate the payment of any part of the Guaranteed Obligations to the
payment of any other obligations, which may at any time be due or owing to Bank;
all in such manner and upon such terms as Bank may deem appropriate, and without
notice to or further consent from Guarantor. No invalidity, irregularity,
discharge or unenforceability of, or action or omission by Bank relating to any
part of the Guaranteed Obligations or any security therefor shall affect or
impair this Guaranty.
WAIVERS AND ACKNOWLEDGMENTS. Guarantor waives and releases the following rights,
demands, and defenses Guarantor may have with respect to Bank (and, with respect
to swap obligations, its affiliates) and collection of the Guaranteed
Obligations: (a) promptness and diligence in collection of any of the Guaranteed
Obligations from Borrower or any other person liable thereon, and in foreclosure
of any security interest and sale of any property serving as collateral for the
Guaranteed Obligations; (b) any law or statute that requires that Bank (and,
with respect to swap obligations, its affiliates) make demand upon, assert
claims against, or collect from Borrower or other persons or entities, foreclose
any security interest, sell collateral, exhaust any remedies, or take any other
action against Borrower or other persons or entities prior to making demand
upon, collecting from or taking action against Guarantor with respect to the
Guaranteed Obligations, including any such rights Guarantor might otherwise have
had under Va. Code Sections 49-25 and 49-26, et seq., N.C.G.S. Sections 26-7, et
seq., Tenn. Code ▇▇▇. Section ▇▇-▇▇-▇▇▇, O.C.G.A. Section 10-7-24, Mississippi
Code ▇▇▇. Section 87-5-1, and any successor statute and any other applicable
law; (c) any law or statute that requires that Borrower or any other person be
joined in, notified of or made part of any action against Guarantor; (d) that
Bank or its affiliates preserve, insure or perfect any security interest in
collateral or sell or dispose of collateral in a particular manner or at a
particular time, provided that Bank's obligation to dispose of Collateral in a
commercially reasonable manner is not waived hereby; (e) notice of extensions,
modifications, renewals, or novations of the Guaranteed Obligations, of any new
transactions or other relationships between Bank, Borrower and/or any guarantor,
and of changes in the financial condition of, ownership of, or business
structure of Borrower or any other guarantor; (f) presentment, protest, notice
of dishonor, notice of default, demand for payment, notice of intention to
accelerate maturity, notice of acceleration of maturity, notice of sale, and
all other notices of any kind whatsoever to which Guarantor may be entitled;
(g) the right to assert against Bank or its affiliates any defense (legal or
equitable), set-off, counterclaim, or claim that Guarantor may have at any time
against Borrower or any other party liable to Bank or its affiliates; (h) all
defenses relating to invalidity, insufficiency, unenforceability, enforcement,
release or impairment of Bank or its affiliates' lien on any collateral, of the
Loan Documents, or of any other guaranties held by
Bank; (i) any right to which Guarantor is or may become entitled to be
subrogated to Bank or its affiliates' rights against Borrower or to seek
contribution, reimbursement, indemnification, payment or the like, or
participation in any claim, right or remedy of Bank or its affiliates against
Borrower or any security which Bank or its affiliates now has or hereafter
acquires, until such time as the Guaranteed Obligations have been fully
satisfied beyond the expiration of any applicable preference period; (j) any
claim or defense that acceleration of maturity of the Guaranteed Obligations is
stayed against Guarantor because of the stay of assertion or of acceleration of
claims against any other person or entity for any reason including the
bankruptcy or insolvency of that person or entity; and (k) the right to
marshalling of Borrower's assets or the benefit of any exemption claimed by
Guarantor. Guarantor acknowledges and represents that Guarantor has relied upon
Guarantor's own due diligence in making an independent appraisal of Borrower,
▇▇▇▇▇▇▇▇'s business affairs and financial condition, and any collateral;
Guarantor will continue to be responsible for making an independent appraisal of
such matters; and Guarantor has not relied upon Bank or its affiliates for
information regarding Borrower or any collateral.
FINANCIAL CONDITION. Guarantor warrants, represents and covenants to Bank and
its affiliates that on and after the date hereof: (a) the fair saleable value of
Guarantor's assets exceeds its liabilities, Guarantor is meeting its current
liabilities as they mature, and Guarantor is and shall remain solvent; (b) all
financial statements of Guarantor furnished to Bank are correct and accurately
reflect the financial condition of Guarantor as of the respective dates thereof;
(c) since the date of such financial statements, there has not occurred a
material adverse change in the financial condition of Guarantor; (d) there are
not now pending any court or administrative proceedings or undischarged
judgments against Guarantor, no federal or state tax liens have been filed or
threatened against Guarantor, and Guarantor is not in default or claimed default
under any agreement; and (e) at such reasonable times as Bank requests,
Guarantor will furnish Bank and its affiliates with such other financial
information as Bank and its affiliates may reasonably request.
INTEREST AND APPLICATION OF PAYMENTS. Regardless of any other provision of this
Guaranty or other Loan Documents, if for any reason the effective interest on
any of the Guaranteed Obligations should exceed the maximum lawful interest, the
effective interest shall be deemed reduced to and shall be such maximum lawful
interest, and any sums of interest which have been collected in excess of such
maximum lawful interest shall be applied as a credit against the unpaid
principal balance of the Guaranteed Obligations. Monies received from any source
by Bank or its affiliates for application toward payment of the Guaranteed
Obligations may be applied to such Guaranteed Obligations in any manner or order
deemed appropriate by Bank and its affiliates.
DEFAULT. If any of the following events occur, a default ("Default") under this
Guaranty shall exist: (a) failure of timely payment or performance of the
Guaranteed Obligations or a default under any Loan Document; (b) a breach of any
agreement or representation contained or referred to in the Guaranty, or any of
the Loan Documents, or contained in any other contract or agreement of Guarantor
with Bank or its affiliates, whether now existing or hereafter arising; (c) the
death of, appointment of a guardian for, dissolution of, termination of
existence of, loss of good standing status by, appointment of a receiver for,
assignment for the benefit of creditors of, or the commencement of any
insolvency or bankruptcy proceeding by or against Guarantor or any general
partner of or the holder(s) of the majority ownership interests of Guarantor;
and/or (d) Bank determines in good faith, in its sole discretion, that the
prospects for payment or performance of the Guaranteed Obligations are impaired
or a material adverse change has occurred in the business or prospects of
Borrower or Guarantor, financial or otherwise. If a Default occurs, the
Guaranteed Obligations shall be due immediately and payable without notice,
other than Guaranteed Obligations under any swap agreements (as defined in 11
U.S.C. Section 101, as in effect from time to time) with Bank or its affiliates,
which shall be due in accordance with and governed by the provisions of said
swap agreements, and, Bank and its affiliates may exercise any rights and
remedies as provided in this Guaranty and other Loan Documents, or as provided
at law or equity. Guarantor shall pay interest on the Guaranteed Obligations
from such Default at the highest rate of interest charged on any of the
Guaranteed Obligations.
ATTORNEYS' FEES AND OTHER COSTS OF COLLECTION. Guarantor shall pay all of Bank's
and its affiliates' reasonable expenses incurred to enforce or collect any of
the Guaranteed Obligations, including, without limitation, reasonable
arbitration, paralegals', attorneys' and experts' fees and expenses, whether
incurred without the commencement of a suit, in any suit, arbitration, or
administrative proceeding, or in any appellate or bankruptcy proceeding.
SUBORDINATION OF OTHER DEBTS. Guarantor agrees: (a) to subordinate the
obligations now or hereafter owed by Borrower to Guarantor ("Subordinated Debt")
to any and all obligations of Borrower to Bank or its affiliates now or
hereafter existing while this Guaranty is in effect, provided however that
Guarantor may receive regularly scheduled principal and interest payments on the
Subordinated Debt so long as (i) all sums due and payable by Borrower to Bank
and its affiliates have been paid in full on or prior to such date, and (ii) no
event or condition which constitutes or which with notice or the lapse or time
would constitute an event of default with respect to the Guaranteed Obligations
shall be continuing on or as of the payment date; (b) Guarantor will either
place a legend indicating such subordination on every note, ledger page or other
document evidencing any part of the Subordinated Debt or deliver such documents
to Bank; and (c) except as permitted by this paragraph, Guarantor will not
request or accept payment of or any security for any part of the Subordinated
Debt, and any proceeds of the Subordinated Debt paid to Guarantor, through error
or otherwise, shall immediately be forwarded to Bank by Guarantor, properly
endorsed to the order of Bank, to apply to the Guaranteed Obligations.
MISCELLANEOUS. Assignment. This Guaranty and other Loan Documents shall inure to
the benefit of and be binding upon the parties and their respective heirs, legal
representatives, successors and assigns. Bank's interests in and rights under
this Guaranty and other Loan Documents are freely assignable, in whole or in
part, by Bank. Any assignment shall not release Guarantor from the Guaranteed
Obligations. Organization; Powers. Guarantor (i) is (a) an adult individual and
is sui juris, or (b) a corporation, general partnership, limited partnership,
limited liability company or other legal entity (as indicated below), duly
organized, validly existing and in good standing under the laws of its state of
organization, and is authorized to do business in each other jurisdiction
wherein its ownership of property or conduct of business legally requires such
organization, (ii) has the power and authority to own its properties and assets
and to carry on its business as now being conducted and as now contemplated; and
(iii) has the power and authority to execute, deliver and perform, and by all
necessary action has authorized the execution, delivery and performance of, all
of its obligations under this Guaranty and any other Loan Document to which it
is a party. Applicable Law; Conflict Between Documents. This Guaranty shall be
governed by and construed under the laws of the state named in Bank's address
shown above without regard to that state's conflict of laws principles. If the
terms of this Guaranty should conflict with the terms of any commitment letter
that survives closing, the terms of this Guaranty shall control. Guarantor's
Accounts. Except as prohibited by law, Guarantor grants Bank and its affiliates
a security interest in all of Guarantor's accounts with Bank and its affiliates.
Jurisdiction. Guarantor irrevocably agrees to nonexclusive personal jurisdiction
in the state named in Bank's address shown above. Severability. If any provision
of this Guaranty or of the other Loan Documents shall be prohibited or invalid
under applicable law, such provision shall be ineffective but only to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Guaranty or other Loan Documents.
Notices. Any notices to Guarantor shall be sufficiently given if in writing and
mailed or delivered to Guarantor's address shown above or such other address as
provided hereunder, and to Bank, if in writing and mailed or delivered to
Wachovia Bank, National Association, Mail Code VA7628, P.O. Box ▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇ or Wachovia Bank, National Association, Mail Code VA7628, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ or such other address as Bank may specify in
writing from time to time. Notices to Bank must include the mail code. In the
event that Guarantor changes Guarantor's address at any time prior to the date
the Guaranteed Obligations are paid in full, Guarantor agrees to promptly give
written notice of said change of address to Bank by registered or certified
mail, return receipt requested, all charges prepaid. Plural; Captions. All
references in the Loan Documents to borrower, guarantor, person, document or
other nouns of reference mean both the singular and plural form, as the case may
be, and the term "person" shall mean any individual person or entity. The
captions contained in the Loan Documents are inserted for convenience only and
shall not affect the meaning or interpretation of the Loan Documents. Binding
Contract.
Guarantor by execution of and Bank by acceptance of this Guaranty agree that
each party is bound to all terms and provisions of this Guaranty. Amendments,
Waivers and Remedies. No waivers, amendments or modifications of this Guaranty
and other Loan Documents shall be valid unless in writing and signed by an
officer of Bank. No waiver by Bank or its affiliates of any Default shall
operate as a waiver of any other Default or the same Default on a future
occasion. Neither the failure nor any delay on the part of Bank or its
affiliates in exercising any right, power, or privilege granted pursuant to this
Guaranty and other Loan Documents shall operate as a waiver thereof, nor shall a
single or partial exercise thereof preclude any other or further exercise or the
exercise of any other right, power or privilege. All remedies available to Bank
or its affiliates with respect to this Guaranty and other Loan Documents and
remedies available at law or in equity shall be cumulative and may be pursued
concurrently or successively. Partnerships. If Guarantor is a partnership, the
obligations, liabilities and agreements on the part of Guarantor shall remain in
full force and effect and fully applicable notwithstanding any changes in the
individuals comprising the partnership. The term "Guarantor" includes any
altered or successive partnerships, and predecessor partnership(s) and the
partners shall not be released from any obligations or liabilities hereunder.
Loan Documents. The term "Loan Documents" refers to all documents executed in
connection with or related to the Guaranteed Obligations and may include,
without limitation, commitment letters that survive closing, loan agreements,
other guaranty agreements, security agreements, instruments, financing
statements, mortgages, deeds of trust, deeds to secure debt, letters of credit
and any amendments or supplements (excluding swap agreements as defined in 11
U.S.C. Section 101, as in effect from time to time). LIMITATION ON LIABILITY;
WAIVER OF PUNITIVE DAMAGES. EACH OF THE PARTIES HERETO, INCLUDING BANK BY
ACCEPTANCE HEREOF, AGREES THAT IN ANY JUDICIAL, MEDIATION OR ARBITRATION
PROCEEDING OR ANY CLAIM OR CONTROVERSY BETWEEN OR AMONG THEM THAT MAY ARISE OUT
OF OR BE IN ANY WAY CONNECTED WITH THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY
OTHER AGREEMENT OR DOCUMENT BETWEEN OR AMONG THEM OR THE OBLIGATIONS EVIDENCED
HEREBY OR RELATED HERETO, IN NO EVENT SHALL ANY PARTY HAVE A REMEDY OF, OR BE
LIABLE TO THE OTHER FOR, (1) INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES OR
(2) PUNITIVE OR EXEMPLARY DAMAGES. EACH OF THE PARTIES HEREBY EXPRESSLY WAIVES
ANY RIGHT OR CLAIM TO PUNITIVE OR EXEMPLARY DAMAGES THEY MAY HAVE OR WHICH MAY
ARISE IN THE FUTURE IN CONNECTION WITH ANY SUCH PROCEEDING, CLAIM OR
CONTROVERSY, WHETHER THE SAME IS RESOLVED BY ARBITRATION, MEDIATION, JUDICIALLY
OR OTHERWISE. FINAL AGREEMENT. This Agreement and the other Loan Documents
represent the final agreement between the parties and may not be contradicted
by evidence of prior, contemporaneous or subsequent oral agreements of the
parties. There are no unwritten oral agreements between the parties.
FINANCIAL COVENANTS. Guarantor agrees to the following provisions from the date
hereof until final payment in full of the Guaranteed Obligations, unless Bank
shall otherwise consent in writing, using the financial information for
Guarantor, its subsidiaries, affiliates and its holding or parent company, as
applicable: EBIT to Interest Ratio. Guarantor shall, at all times, maintain an
EBIT to Interest Ratio of not less than 1.50 to 1.00. This covenant shall be
calculated quarterly, on a rolling four quarters basis. "EBIT to Interest Ratio"
shall mean the sum of earnings before interest and taxes divided by interest
expense. Long Term Debt to Long Term Capitalization Ratio. Guarantor shall
maintain a ratio of Long Term Debt to Long Term Capitalization of not more than
..65 to 1.00 measured at each fiscal year end. "Long Term Debt to Long Term
Capitalization" shall mean Long Term Funded Debt divided by the sum of Long Term
Funded Debt and Effective Net Worth. "Long Term Funded Debt" shall mean, as
applied to any person or entity, the sum of all indebtedness for borrowed money,
including, without limitation, capital lease obligations, subordinated debt
(including debt subordinated to the Bank), and unreimbursed drawings under
letters of credit, or any other monetary obligation evidenced by a note, bond,
debenture or other agreement of that person or entity with a maturity greater
than one year. "Effective Net Worth" shall mean total assets minus Total
Liabilities. "Total Liabilities" shall mean all liabilities of Guarantor
excluding debt fully subordinated to Bank on terms and conditions acceptable to
Bank, and including capitalized leases and all reserves for deferred taxes and
other deferred sums appearing on the liabilities side of a balance sheet, in
accordance with generally accepted account principles applied on a consistent
basis.
FINANCIAL AND OTHER INFORMATION. Guarantor shall deliver to Bank such
information as Bank may reasonably request from time to time, including without
limitation, financial statements and information pertaining to Guarantor's
financial condition. Such information shall be true, complete, and accurate.
AFFIRMATIVE COVENANTS. Guarantor agrees that from the date hereof and until
final payment in full of the Guaranteed Obligations, unless Bank shall otherwise
consent in writing, Guarantor will: Non- Default Certificate From Guarantor.
Deliver to Bank, with the Financial Statements required below, a certificate
signed by Guarantor, in the form attached hereto as Exhibit A, if Guarantor is
an individual, or by a principal financial officer of Guarantor warranting that
no "Default" as specified in the Loan Documents nor any event which, upon the
giving of notice or lapse of time or both, would constitute such a Default, has
occurred and demonstrating Guarantor's compliance with the financial covenants
contained herein.
NEGATIVE COVENANTS. ▇▇▇▇▇▇▇▇▇ agrees that from the date hereof and until final
payment in full of the Guaranteed Obligations, unless Bank shall otherwise
consent in writing, Guarantor will not: Default on Other Contracts or
Obligations. Default on any material contract with or obligation when due to a
third party or default in the performance of any obligation to a third party
incurred for money borrowed in an amount in excess of $250,000.00. Government
Intervention. Permit the assertion or making of any seizure, vesting or
intervention by or under authority of any governmental entity, as a result of
which the management of Guarantor or any guarantor is displaced of its authority
in the conduct of its respective business or such business is curtailed or
materially impaired. Judgment Entered. Permit the entry of any monetary judgment
or the assessment against, the filing of any tax lien against, or the issuance
of any writ of garnishment or attachment against any property of or debts due
Guarantor in an amount in excess of $500,000.00 which is not discharged or
execution is not stayed within 30 days of entry. Retire or Repurchase Capital
Stock. Retire or otherwise acquire any of its capital stock.
ANNUAL FINANCIAL STATEMENTS. Guarantor shall deliver to Bank, within 90 days
after the close of each fiscal year, audited financial statements reflecting its
operations during such fiscal year, including, without limitation, a balance
sheet, profit and loss statement and statement of cash flows, with supporting
schedules; all on a consolidated and consolidating basis with respect to
Guarantor and its subsidiaries, affiliates and parent or holding company, as
applicable, and in reasonable detail, prepared in conformity with generally
accepted accounting principles, applied on a basis consistent with that of the
preceding year. If audited statements are required, all such statements shall be
examined by an independent certified public accountant acceptable to Bank. The
opinion of such independent certified public accountant shall not be acceptable
to Bank if qualified due to any limitations in scope imposed by Guarantor or any
other person or entity. Any other qualification of the opinion by the accountant
shall render the acceptability of the financial statements subject to Bank's
approval.
PERIODIC FINANCIAL STATEMENTS. Guarantor shall deliver to Bank, within 30 days
of filing, copies of each 10-Q and 10-K report.
WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF
GUARANTOR BY EXECUTION HEREOF AND BANK BY ACCEPTANCE HEREOF, KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT EACH MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS GUARANTY, THE LOAN DOCUMENTS OR ANY AGREEMENT CONTEMPLATED TO BE
EXECUTED IN CONNECTION WITH THIS GUARANTY, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY WITH
RESPECT HERETO. THIS PROVISION IS A MATERIAL INDUCEMENT TO BANK TO ACCEPT THIS
GUARANTY. EACH OF THE PARTIES AGREES THAT THE TERMS HEREOF SHALL SUPERSEDE AND
REPLACE ANY PRIOR AGREEMENT RELATED TO ARBITRATION OF DISPUTES BETWEEN THE
PARTIES CONTAINED IN ANY LOAN DOCUMENT OR ANY OTHER DOCUMENT OR
AGREEMENT HERETOFORE EXECUTED IN CONNECTION WITH, RELATED TO OR BEING REPLACED,
SUPPLEMENTED, EXTENDED OR MODIFIED BY, THIS GUARANTY.
IN WITNESS WHEREOF, Guarantor, on the day and year first written above, has
caused this Unconditional Guaranty to be executed under seal.
RGC Resources, Inc.
By: s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, III (SEAL)
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, III, President/Chairman/CEO
By: s/▇▇▇▇▇▇ ▇. ▇▇▇▇ (SEAL)
▇▇▇▇▇▇ ▇. ▇▇▇▇, Controller/Treasurer
Commonwealth of Virginia
City of Roanoke
Corporate Acknowledgment
I certify that before me appeared this day ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, III, a person
known to me, who after being sworn said he/she is President/Chairman/CEO of RGC
Resources, Inc., a Virginia corporation, and is duly authorized to act on behalf
of said Corporation, that the seal affixed to the foregoing instrument is the
seal of said Corporation and that said instrument was signed and sealed by
him/her on behalf of said Corporation, and being informed of the contents
thereof, acknowledged execution of the foregoing instrument on behalf of said
Corporation.
Witness my hand and official seal, this 28th day of November, 2005.
s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Notary Public
Notary Seal
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
(Printed Name of Notary)
I was commissioned as ▇▇▇▇▇ ▇. ▇▇▇▇
My Commission Expires: February 28, 2006
Commonwealth of Virginia
City of Roanoke
Corporate Acknowledgment
I certify that before me appeared this day ▇▇▇▇▇▇ ▇. ▇▇▇▇, a person known to me,
who after being sworn said he/she is Controller/Treasurer of RGC Resources,
Inc., a Virginia corporation, and is duly authorized to act on behalf of said
Corporation, that the seal affixed to the foregoing instrument is the seal of
said Corporation and that said instrument was signed and sealed by him/her on
behalf of said Corporation, and being informed of the contents thereof,
acknowledged execution of the foregoing instrument on behalf of said
Corporation.
Witness my hand and official seal, this 28th day of November, 2005.
s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Notary Public
Notary Seal
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
(Printed Name of Notary)
I was commissioned as ▇▇▇▇▇ ▇. ▇▇▇▇
My Commission Expires: February 28, 2006
EXHIBIT A
NON-DEFAULT CERTIFICATE
In accordance with the terms of the Loan Documents dated November 25, 2005 by
and between Wachovia Bank, National Association and RGC Resources, Inc.
("Guarantor"), I hereby certify that:
1. I am a principal financial officer of Guarantor;
2. The enclosed financial statements are prepared in accordance with
generally accepted accounting principles;
3. No Default (as defined in the Loan Documents) or any event which, upon
the giving of notice or lapse of time or both, would constitute such a
Default, has occurred.
4. Guarantor is in compliance with the Financial Covenant(s) set forth in
the Loan Documents, as demonstrated by the calculations contained in
the Covenant Compliance Certificate attached hereto as Schedule 1.
s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, III
-------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, III
Title: President/Chairman/CEO
SCHEDULE 1
COVENANT COMPLIANCE CERTIFICATE
Guarantor Name: RGC Resources, Inc.
For the fiscal ________________________ ended ____________________
ALL CAPITALIZED TERMS USED BUT NOT DEFINED HEREIN SHALL HAVE THE MEANINGS GIVEN
IN THE LOAN DOCUMENTS.
CALCULATIONS FOR ROLLING FOUR QUARTERS COVENANT
COMPLIANCE FOR THE QUARTER ENDED__________________
INSTRUCTIONS: THIS IS A ROLLING FOUR-QUARTER CALCULATION. THE COLUMN LABELED
Q1 SHOULD CONTAIN INFORMATION FOR THE MOST RECENTLY ENDED QUARTER (I.E.,
MATCHES THE DATE ABOVE). Q2 SHOULD CONTAIN INFORMATION FOR THE IMMEDIATELY
PRECEDING QUARTER-END, AND SO ON FOR Q3 AND Q4.
MOST RECENT QUARTER PRECEDING THREE QUARTERS
COVENANT: Q1 Q2 Q3 Q4 TOTAL
--------
EBIT to Interest Ratio
(a) net income _____ _____ _____ _____ _____
(b) interest _____ _____ _____ _____ _____
(c) taxes _____ _____ _____ _____ _____
The sum of the Totals of (a) plus (b) plus (c) divided by the Total of (b)
equals an EBIT to Interest Ratio of _____. Required EBIT to Interest Ratio is
not less than ____ to 1.00.
Compliance? ___Yes ___No