THIRD AMENDMENT
Exhibit
10.1
THIRD AMENDMENT
THIRD AMENDMENT, dated as of April 13, 2007 (this “Amendment”), with respect to the
Credit Agreement, dated as of March 25, 2004 (as amended by that certain First Amendment, dated as
of October 18, 2005 and by that certain Second Amendment, dated as of May 22, 2006, and as may be
further amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Rural Cellular Corporation, a Minnesota corporation (the
“Borrower”), the lenders from time to time parties thereto (the “Lenders”), Xxxxxx
Commercial Paper Inc., as administrative agent (in such capacity, the “Administrative
Agent”), and Bank of America, N.A. as documentation agent.
WITNESSETH:
WHEREAS, capitalized terms undefined herein shall have the meaning ascribed to them in the
Credit Agreement;
WHEREAS, pursuant to the Credit Agreement, the Lenders have agreed to make certain loans and
other extensions of credit to the Borrower;
WHEREAS, the Borrower wishes to be able to make one-time cash dividend payments on certain
Existing Preferred Stock in accordance with Section 6.08 of the Credit Agreement and, in connection
therewith, has requested that Section 6.08 of the Credit Agreement be amended in the manner
provided for in this Amendment;
WHEREAS, the Borrower has requested a reduction in the interest rates applicable to the Loans
and, in connection therewith, has requested that the definition of “Applicable Margin” contained in
the Credit Agreement be amended in the manner provided for in this Amendment;
WHEREAS, the Borrower has requested the removal of certain financial covenants contained in
the Credit Agreement and, in connection therewith, has requested that Section 6.12 of the Credit
Agreement and the definition of “Pro Forma Compliance” contained in the Credit Agreement be amended
in the manner provided for in this Amendment;
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and in consideration of the premises contained herein, the parties hereto hereby
agree as follows:
SECTION I AMENDMENT
1.1. Amendments to Section 1.01. (a) The following defined terms are hereby
inserted in appropriate alphabetical order:
“Senior Secured First Lien Debt” shall mean all Indebtedness for Borrowed Money of the
Borrower and the Subsidiaries Incurred under the Credit Agreement.
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“2007 Permitted One-Time Cash Dividends” means (i) a one-time cash dividend
payment on the 11 3/8% Senior Exchangeable Preferred Stock of the Borrower in an aggregate
amount not to exceed $47 million in payment of previously accrued and current dividends
(including any interest accrued on such dividends) thereon and (ii) a one-time cash dividend
payment on the 12 1/4% Junior Exchangeable Preferred Stock of the Borrower in an aggregate
amount not to exceed $42 million in payment of previously accrued and current dividends
(including any interest accrued on such dividends) thereon, provided that, in each case,
such payment is made on or before August 15, 2007 and that such payment is otherwise
permitted to be made as a Restricted Payment pursuant to Section 6.08.
(b) The following defined terms are hereby amended and restated in their entirety to read as
follows:
“Applicable Margin” means, for any day, with respect to any ABR Loan (but subject to
Section 2.12(a) for any Swing Line Loan) or Eurodollar Loan, as the case may be, the applicable
rate per annum set forth below under the caption “ABR Spread” or “Eurodollar Spread”, as the case
may be, based upon the Applicable Ratio determined as set forth below:
| ABR | Eurodollar | |||||||
| Applicable Ratio | Spread | Spread | ||||||
Category 1 |
||||||||
Ratio is greater than 1.75 to 1.00 |
1.00 | % | 2.00 | % | ||||
Category 2 |
||||||||
Ratio is less than or equal to 1.75 to 1.00 |
0.75 | % | 1.75 | % | ||||
For purposes of the foregoing, (i) the Applicable Ratio shall be determined as of
the end of each fiscal quarter of the Borrower’s fiscal year based upon the Borrower’s
consolidated financial statements delivered pursuant to Section 5.01(a) or (b) and (ii) each
change in the Applicable Margin resulting from a change in the Applicable Ratio shall be
effective during the period commencing on and including the date that is three Business Days
after the date of delivery to the Administrative Agent of such consolidated financial
statements indicating such change and ending on the date immediately preceding the effective
date of the next such change; provided that the Applicable Ratio shall be deemed to
be (A) 1.75% in the case of the “ABR Spread” and 2.75% in the case of the “Eurodollar
Spread”, at the option of the Administrative Agent or at the request of the Required
Lenders, at any time that an Event of Default has occurred and is continuing and (B) in
Category 1, at the option of the Administrative Agent or at the request of the Required
Lenders, if the Borrower fails to deliver the consolidated financial statements required to
be delivered by it pursuant to Section 5.01(a) or (b), during the period from the expiration
of the time for delivery thereof until the tenth Business Day after such consolidated
financial statements are delivered.
“Pro Forma Compliance” means, on the Reference Date with respect to any Pro
Forma Event, that the following ratio test has been met on such Reference Date on a pro
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forma basis after giving effect to such Pro Forma Event: the ratio of (x) Senior
Secured First Lien Debt outstanding on such Reference Date (after giving pro forma effect to
the Incurrence or discharge of all Indebtedness Incurred or discharged during the Related
Measurement Period) to (y) Adjusted EBITDA for the Reference Period for such Pro Forma Event
is not greater than 1.00 to 1.00; provided, that for purposes of any such
computation, the Pro Forma Event giving rise to the need to make such computation (other
than a Pro Forma Event consisting of a New Extension of Revolver Credit) will be assumed to
have occurred (on a pro forma basis) on the first day of the Reference Period for such Pro
Forma Event.
1.2. Amendments to Section 6.08. Section 6.08 of the Credit Agreement is hereby
amended by (i) deleting the word “and” appearing at the end of clause (viii) of such Section, (ii)
replacing the period at the end of clause (ix) of such Section with “; and” and (iii) adding a new
clause (x) at the end of such Section as follows:
“(x) if no Default or Event of Default has occurred and is continuing on the date such
Restricted Payment is made (or, in the case of any dividend, on the date of declaration thereof so
long as such dividend is paid within 60 days thereafter) or would result therefrom, the 2007
Permitted One-Time Cash Dividends.”
1.3. Amendments to Section 6.12. Section 6.12 of the Credit Agreement is hereby
amended and restated in its entirety to read as follows:
“Financial Covenants. On any day when any Loan, or any interest accrued on any Loan,
is outstanding or any Letter of Credit has been issued but has not been Fully Satisfied, the
following covenant of this Section 6.12 will apply to the Borrower and the Subsidiaries with
respect to the fiscal quarter most recently ended on or prior to such day (regardless of whether
any Loans or Letters of Credit were outstanding as of such day): the Borrower will not permit the
ratio as of the last day of any such quarter of (x) Senior Secured First Lien Debt outstanding on
such day to (y) Adjusted EBITDA for the Reference Period ending on such day to exceed 1.00 to
1.00.”
SECTION II MISCELLANEOUS
2.1. Conditions to Effectiveness of Amendment. This Amendment shall become
effective as of the date first set forth above upon satisfaction of the following conditions:
(a) the Administrative Agent shall have received (i) counterparts of this Amendment duly
executed and delivered by the Borrower, the Guarantors and the Administrative Agent and (ii) in the
case of the Lenders, either (x) counterparts of this Amendment that, when taken together, bear the
signatures of all Lenders or (y) (A) counterparts of this Amendment that, when taken together, bear
the signatures of the Required Lenders and all Lenders other than each Lender not consenting to and
approving this Amendment and (B) evidence satisfactory to the Administrative Agent that (i) the
Revolving Commitment of each Lender not consenting to and approving this Amendment shall either (x)
terminate upon the effectiveness of this Amendment in accordance with Section 9.02(b) of the Credit
Agreement or (y) be assigned to an assignee that shall assume such obligations (which assignee may
be another Lender, if such Lender accepts
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such assignment) in accordance with Section 2.18(b) of the Credit Agreement and (ii) at the
time this Amendment becomes effective, each Lender not consenting to and approving this Amendment
receives payment in full of the principal of and interest accrued on each Loan made by it and all
other amounts owing to it or accrued for its account under the Credit Agreement, in each case,
pursuant to Section 2.18(b) or Section 9.02(b) of the Credit Agreement, as applicable; and
(b) the Administrative Agent shall have received, for the account of each Lender consenting to
this Amendment, an amendment fee equal to 0.075% of each such consenting Lender’s Revolving
Commitment then in effect.
2.2. Representations and Warranties. The Borrower represents and warrants to each
Lender that as of the effective date of this Amendment: (a) this Amendment constitutes the legal,
valid and binding obligation of the Borrower, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’
rights generally and subject to general principles of equity, regardless of whether considered in a
proceeding in equity or at law; (b) no Default or Event of Default shall have occurred and be
continuing as of the date hereof; and (c) the Guarantors signing this Amendment include each Person
who is a Subsidiary of the Borrower as of the date hereof.
2.3. Counterparts. This Amendment may be executed by one or more of the parties to
this Amendment on any number of separate counterparts (including by facsimile transmission), and
all of said counterparts taken together shall be deemed to constitute one and the same instrument.
2.4. Continuing Effect; No Other Amendments. Except to the extent the Credit
Agreement is expressly modified hereby, all of the terms and provisions of the Credit Agreement and
the other Loan Documents are and shall remain in full force and effect. This Amendment shall
constitute a Loan Document.
2.5. Payment of Expenses. The Borrower agrees to pay and reimburse the
Administrative Agent for all of its out-of-pocket costs and reasonable expenses incurred to date in
connection with this Amendment and the other Loan Documents, including, without limitation, the
reasonable fees and disbursements of legal counsel to the Administrative Agent.
2.6. GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and
delivered by their respective proper and duly authorized officers as of the day and year first
above written.
| RURAL CELLULAR CORPORATION |
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| By: | /s/ Xxxxxxx Xxxxx | |||
| Name: | Xxxxxxx Xxxxx | |||
| Title: | Treasurer | |||
| XXXXXX COMMERCIAL PAPER INC., Individually and as Administrative Agent |
||||
| By: | /s/ Xxxxx X. Xxxxxx | |||
| Name: | Xxxxx X. Xxxxxx | |||
| Title: | Vice President | |||
| SIGNATURE PAGE TO THE THIRD AMENDMENT TO THE RURAL
CELLULAR CREDIT AGREEMENT Name of Institution: Xxxxxx Xxxxxxx Senior Funding, Inc. |
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| By: | /s/ Xxxxxx X. Xxxxx | |||
| Name: | Xxxxxx X. Xxxxx | |||
| Title: | VP | |||
Name of Institution: Bank of America N.A. |
||||
| By: | /s/ Xxxx X. Xxxxxxx III | |||
| Name: | Xxxx X. Xxxxxxx | |||
| Title: | Senior Vice President | |||
Name of Institution: CIT Lending Services Corporation |
||||
| By: | /s/ Xxxxx Xxxxxxx | |||
| Name: | Xxxxx Xxxxxxx | |||
| Title: | VP | |||
Name of Institution: Xxxxx Fargo Bank NA |
||||
| By: | /s/ Xxxxx X. Xxxxxxxxxxx | |||
| Name: | Xxxxx X. Xxxxxxxxxxx | |||
| Title: | Vice President | |||
Name of Institution: CoBank, ACB |
||||
| By: | /s/ Xxxxxxx X. Xxxx | |||
| Name: | Xxxxxxx X. Xxxx | |||
| Title: | Vice President | |||
Name of Institution: National City Bank |
||||
| By: | /s/ Xxxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxx | |||
| Title: | Vice President | |||
THE UNDERSIGNED GUARANTORS HEREBY CONSENT AND AGREE TO THE FOREGOING AMENDMENT AS OF THE DATE
HEREOF.
| RCC MINNESOTA, INC. |
||||
| By: | /s/ Xxxxxxx Xxxxx | |||
| Name: | Xxxxxxx Xxxxx | |||
| Title: | Assistant Treasurer | |||
| TLA SPECTRUM, LLC |
||||
| By: | /s/ Xxxxxxx Xxxxx | |||
| Name: | Xxxxxxx Xxxxx | |||
| Title: | Assistant Treasurer | |||
| RCC TRANSPORT, INC. |
||||
| By: | /s/ Xxxxxxx Xxxxx | |||
| Name: | Xxxxxxx Xxxxx | |||
| Title: | Assistant Treasurer | |||
| RCC ATLANTIC, INC. |
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| By: | /s/ Xxxxxxx Xxxxx | |||
| Name: | Xxxxxxx Xxxxx | |||
| Title: | Assistant Treasurer | |||
| ALEXANDRIA INDEMNITY CORPORATION |
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| By: | /s/ Xxxxxxx Xxxxx | |||
| Name: | Xxxxxxx Xxxxx | |||
| Title: | Assistant Treasurer | |||
| RCC ATLANTIC LICENSES, LLC |
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| By: | /s/ Xxxxxxx Xxxxx | |||
| Name: | Xxxxxxx Xxxxx | |||
| Title: | Assistant Treasurer | |||
