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AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF MAY 14, 2007
Between
SUREWEST COMMUNICATIONS
as Borrower,
and
COBANK, ACB,
as Lender
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TABLE OF CONTENTS
SECTION 1 AMOUNTS AND TERMS OF LOANS.........................................1
1.1 Loans............................................................1
(A) Term Loan..................................................1
(B) Revolving Loans............................................1
(C) Swingline Loans............................................2
(D) Letters of Credit..........................................2
(E) Notes......................................................5
(F) Advances...................................................5
1.2 Interest.........................................................5
(A) Interest Options...........................................5
(B) Applicable Margins.........................................6
(C) Interest Periods...........................................6
(D) Calculation and Payment....................................7
(E) Default Rate of Interest...................................7
(F) Excess Interest............................................7
(G) Selection, Conversion or Continuation of Loans;
LIBOR Availability.........................................8
1.3 Notice of Borrowing, Conversion or Continuation of
Loans............................................................8
1.4 Fees and Expenses................................................9
(A) Commitment Fee.............................................9
(B) Certain Other Fees.........................................9
(C) Breakage Fee...............................................9
(D) Expenses and Attorneys Fees...............................10
(E) Letter of Credit Fees.....................................10
1.5 Payments........................................................10
1.6 Repayments and Reduction of Term Loan and Revolving
Loan Commitment and Related Mandatory Repayments................11
(A) Scheduled Repayments and Reductions of Term Loan
and Revolving Loan Commitment.............................11
(B) Voluntary Reduction of Loan Commitments...................11
(C) Mandatory Repayments......................................12
1.7 Voluntary Prepayments and Other Mandatory Repayments...........12
(A) Voluntary Prepayment of Loans.............................12
(B) Repayments from Insurance Proceeds........................12
(C) Repayments from Asset Dispositions........................13
1.8 Application of Prepayments and Repayments; Payment of
Breakage Fees, Etc..............................................13
1.9 Loan Accounts...................................................13
1.10 Changes in LIBOR Rate Availability..............................13
1.11 Capital Adequacy and Other Adjustments..........................14
1.12 Taxes: No Deductions............................................14
1.13 Changes in Tax Laws.............................................15
1.14 Term of This Agreement..........................................15
1.15 Letter of Credit Liability......................................15
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SECTION 2 AFFIRMATIVE COVENANTS.............................................16
2.1 Compliance With Laws............................................16
2.2 Maintenance of Books and Records; Properties;
Insurance.......................................................16
2.3 Inspection......................................................17
2.4 Legal Existence, Etc............................................17
2.5 Use of Proceeds.................................................17
2.6 Further Assurances..............................................17
2.7 CoBank Patronage Capital........................................18
2.8 Investment Company Act..........................................18
2.9 Payment of Obligations..........................................18
2.10 Environmental Laws..............................................18
2.11 ERISA Compliance................................................19
SECTION 3 NEGATIVE COVENANTS................................................19
3.1 Indebtedness....................................................19
3.2 Liens and Related Matters.......................................20
3.3 Investments.....................................................20
3.4 Restricted Junior Payments......................................20
3.5 Restriction on Fundamental Changes..............................20
3.6 Disposal of Assets or Significant Subsidiary Stock..............21
3.7 Transactions with Affiliates....................................22
3.8 Conduct of Business.............................................22
3.9 Fiscal Year.....................................................22
3.10 Inconsistent Agreements.........................................22
SECTION 4 FINANCIAL COVENANTS AND REPORTING.................................23
4.1 Leverage Ratio..................................................23
4.2 Interest Coverage Ratio.........................................23
4.3 Net Worth.......................................................23
4.4 Financial Statements and Other Reports..........................23
(A) Quarterly Financials......................................23
(B) Year-End Financials.......................................23
(C) Borrower Compliance Certificate...........................24
(D) Budgets...................................................24
(E) SEC Filings...............................................24
(F) Events of Default, Etc....................................24
(G) Litigation................................................24
(H) Environmental Notices.....................................25
(I) ERISA Events..............................................25
(J) Other Information.........................................25
4.5 Accounting Terms; Utilization of GAAP for Purposes of
Calculations Under Agreement....................................25
SECTION 5 REPRESENTATIONS AND WARRANTIES....................................26
5.1 Disclosure......................................................26
5.2 No Material Adverse Effect......................................26
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5.3 Organization, Powers, Authorization and Good Standing...........26
(A) Organization and Powers...................................26
(B) Authorization; Binding Obligation.........................26
(C) Qualification.............................................27
5.4 Compliance of Agreement, Loan Documents and
Borrowings with Applicable Law..................................27
5.5 Compliance with Law; Governmental Approvals.....................27
5.6 Tax Returns and Payments........................................27
5.7 Environmental Matters...........................................27
5.8 Financial Statements............................................28
5.9 Intellectual Property...........................................28
5.10 Litigation, Investigations, Audits, Etc.........................28
5.11 Employee Labor Matters..........................................29
5.12 ERISA Compliance................................................29
5.13 Communications Regulatory Matters...............................29
5.14 Solvency........................................................30
5.15 Investment Company Act..........................................30
5.16 Certain Agreements and Material Contracts.......................30
5.17 Title to Properties.............................................30
5.18 Transactions with Affiliates....................................31
5.19 OFAC............................................................31
5.20 Patriot Act.....................................................31
SECTION 6 EVENTS OF DEFAULT AND RIGHTS AND REMEDIES.........................31
6.1 Event of Default................................................31
(A) Payment...................................................31
(B) Default in Other Agreements...............................31
(C) Breach of Certain Provisions..............................32
(D) Breach of Warranty........................................32
(E) Other Defaults Under Loan Documents.......................32
(F) Involuntary Bankruptcy; Appointment of Receiver;
Etc.......................................................32
(G) Voluntary Bankruptcy; Appointment of Receiver; Etc........32
(H) Judgment and Attachments..................................33
(I) Dissolution...............................................33
(J) Solvency..................................................33
(K) Injunction................................................33
(L) ERISA; Pension Plans......................................33
(M) Invalidity of Loan Documents..............................33
(N) Licenses and Permits......................................33
(O) Change in Control.........................................34
6.2 Suspension of Commitments.......................................34
6.3 Acceleration....................................................34
6.4 Rights of Collection............................................34
6.5 Consents........................................................34
6.6 Performance by CoBank...........................................34
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6.7 Set Off and Sharing of Payments.................................35
SECTION 7 CONDITIONS TO LOANS...............................................35
7.1 Conditions to Effectiveness of this Agreement...................35
(A) Executed Loan and Other Documents.........................35
(B) Closing Certificates; Opinions............................35
(C) Consents..................................................36
(D) Fees, Expenses, Taxes, Etc................................36
(E) Miscellaneous.............................................37
7.2 Conditions to All Loans.........................................37
SECTION 8 ASSIGNMENT AND PARTICIPATION......................................38
SECTION 9 MISCELLANEOUS.....................................................38
9.1 Indemnities.....................................................38
9.2 Amendments and Waivers..........................................39
9.3 Notices.........................................................39
9.4 Failure or Indulgence Not Waiver; Remedies Cumulative...........39
9.5 Severability....................................................39
9.6 Headings........................................................40
9.7 Governing Law...................................................40
9.8 No Fiduciary Relationship.......................................40
9.9 Construction....................................................40
9.10 Confidentiality.................................................40
9.11 Consent to Jurisdiction and Service of Process..................40
9.12 Waiver of Jury Trial............................................41
9.13 Survival of Warranties and Certain Agreements...................42
9.14 Entire Agreement................................................42
9.15 Counterparts; Effectiveness.....................................42
9.16 Patriot Act.....................................................42
9.17 Effectiveness of Amendment and Restatement; No
Novation........................................................42
SECTION 10 DEFINITIONS......................................................43
10.1 Certain Defined Terms...........................................43
10.2 Other Definitional Provisions...................................55
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SCHEDULES
Schedule 3.8 Transactions with Affiliates
Schedule 5.3(A) Jurisdiction of Organization
Schedule 5.3(C) Qualification to Transact Business
Schedule 5.4 Governmental Approvals
Schedule 5.6 Tax Returns and Payments
Schedule 5.10 Litigation, Etc.
Schedule 5.11 Employee Labor Matters
EXHIBITS
Exhibit 1.3 Form of Notice of Borrowing/Conversion/Continuation
Exhibit 4.4(C) Form of Compliance Certificate
Exhibit 10.1(A) Form of Revolving Loan Promissory Note
Exhibit 10.1(B) Form of Term Loan Promissory Note
Exhibit 10.1(C) Form of Swingline Promissory Note
INDEX OF DEFINED TERMS
Defined Term Defined in Section
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Accounting Changes ss.4.5
Acquired Indebtedness ss.10.1
Adjusted Consolidated Net Worth ss.10.1
Adjustment Date ss.10.1
Affiliate ss.10.1
Agreement Preamble
Applicable Law ss.10.1
Asset Disposition ss.10.1
Banking Day ss.10.1
Bankruptcy Code ss.10.1
Base Rate ss.10.1
Base Rate Loan ss.10.1
Base Rate Margin ss.10.1
Borrower Preamble
Breakage Fees ss.1.4(C)
Budget ss.10.1
Business Day ss.10.1
Calculation Period ss.10.1
Capital Leases ss.10.1
Cash Equivalents ss.10.1
Closing Date ss.10.1
CoBank Preamble
Communications Act ss.10.1
Compliance Certificate ss.4.4(C)
Consolidated Net Assets ss.10.1
Consolidated Net Worth ss.10.1
Contingent Obligation ss.10.1
Default ss.10.1
EBITDA ss.10.1
Environmental Laws ss.10.1
ERISA ss.10.1
ERISA Affiliate ss.10.1
ERISA Event ss.10.1
Event of Default ss.6.1
Evergreen Letter of Credit ss.1.1(D)(7)
Existing Credit Agreement Preamble
Facility(ies) ss.10.1
FCC ss.10.1
Funding Date ss.7.2
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GAAP ss.10.1
Governmental Approvals ss.10.1
Governmental Authority ss.10.1
Indebtedness ss.10.1
Indemnitees ss.9.1
Intellectual Property Rights ss.5.9
Interest Coverage Ratio ss.10.1
Interest Period ss.1.2(C)
Interest Rate Agreement ss.10.1
Investment ss.10.1
IRC ss.10.1
Letter of Credit Liability ss.10.1
Letter(s) of Credit ss.1.1(D)
Leverage Ratio ss.10.1
LIBOR ss.10.1
LIBOR Breakage Fees ss.1.4(C)
LIBOR Loans ss.10.1
LIBOR Margin ss.10.1
Licenses ss.10.1
Lien ss.10.1
Loan(s) ss.10.1
Loan Commitment(s) ss.10.1
Loan Documents ss.10.1
Material Adverse Effect ss.10.1
Material Contracts ss.10.1
Multi-employer Plan ss.10.1
Net Proceeds ss.10.1
Nonrenewal Notice Date ss.1.1(D)(7)
Note(s) ss.10.1
Note Purchase Agreement ss.10.1
Notice of Borrowing/Conversion/Continuation ss.1.3
Obligations ss.10.1
Overnight LIBOR ss.10.1
Patriot Act ss.9.16
PBGC ss.10.1
Permitted Encumbrances ss.10.1
Person ss.10.1
Plan ss.10.1
Priority Debt ss.10.1
PUC ss.10.1
Quoted Rate ss.10.1
Quoted Rate Breakage Fees ss.1.4(C)
Quoted Rate Loans ss.10.1
Quoted Rate Period ss.1.2(A)(i)
Related Interest Rate Agreement ss.10.1
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Reportable Event ss.10.1
Restricted Investments ss.10.1
Restricted Junior Payment ss.10.1
Revolving Loan(s) ss.10.1
Revolving Loan Commitment ss.10.1
Revolving Loan Expiration Date ss.10.1
Revolving Loan Facility ss.10.1
Revolving Note(s) ss.10.1
SEC ss.4.4(A)
Statement ss.4.4(B)
Swingline Facility ss.10.1
Swingline Funding Date ss.7.3
Swingline Loan Commitment ss.10.1
Swingline Loans ss.10.1
Swingline Note(s) ss.10.1
Subsidiary ss.10.1
Tax Liabilities ss.1.12
Telecommunications System ss.10.1
Term Loan ss.10.1
Term Loan Availability Expiration Date ss.10.1
Term Loan Commitment ss.10.1
Term Loan Facility ss.10.1
Term Loan Maturity Date ss.10.1
Term Loan Note(s) ss.10.1
UCP ss.1.1(D)(6)
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AMENDED AND RESTATED CREDIT AGREEMENT
This AMENDED AND RESTATED CREDIT AGREEMENT (as amended, supplemented,
modified, extended or restated as permitted herein from time to time, and
including all schedules and exhibits hereto, this "Agreement") is entered into
as of May 14, 2007, between SUREWEST COMMUNICATIONS, a California corporation
("Borrower"), and COBANK, ACB ("CoBank"), and amends and restates that certain
Credit Agreement, dated as of May 1, 2006, between Borrower and CoBank (the
"Existing Credit Agreement"). Capitalized terms used and not otherwise defined
herein shall have the meanings given to them in Section 10.1 of this Agreement.
R E C I T A L S:
WHEREAS, Borrower desires that CoBank extend a term loan facility and a
revolving loan facility to Borrower, the proceeds of which are to be available
for general corporate purposes of Borrower and its Subsidiaries, including,
without limitation, refinancing existing indebtedness, capital expenditures,
permitted acquisitions and working capital needs;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties agree, and amend and restate the Existing Credit Agreement in its
entirety, as follows:
SECTION 1
AMOUNTS AND TERMS OF LOANS
1.1 Loans. Subject to the terms and conditions of this Agreement and in
reliance upon the representations, warranties and covenants of Borrower
contained herein and in the other Loan Documents:
(A) Term Loan. CoBank has lent to Borrower the Term Loan. Amounts
borrowed under this Subsection 1.1(A) that are repaid or prepaid may not be
reborrowed.
(B) Revolving Loans. CoBank agrees to lend to Borrower, during the
period commencing on the date all conditions precedent set forth in Subsections
7.1 and 7.2 are satisfied or waived and ending on the Business Day immediately
preceding the Revolving Loan Expiration Date, Revolving Loans; provided, that
the aggregate principal amount of all Revolving Loans outstanding may not exceed
the Revolving Loan Commitment less the sum of (i) the outstanding Letter of
Credit Liability and (ii) the aggregate principal amount of the Swingline Loans
then outstanding. Within the limits of the Revolving Loan Commitment and this
Subsection 1.1(B) and Subsections 1.6, 1.7 and 1.8, amounts borrowed under this
Subsection 1.1(B) may be prepaid and reborrowed at any time prior to the
Revolving Loan Expiration Date.
(C) Swingline Loans. CoBank agrees to lend to Borrower, during the
period commencing on the date all conditions precedent set forth in Subsections
7.1 and 7.2 are satisfied or waived and ending on the Business Day immediately
preceding the Revolver Loan Expiration Date, Swingline Loans; provided, that the
aggregate principal amount of all Swingline Loans outstanding may not exceed the
Swingline Loan Commitment and provided, further, that CoBank shall not be
required at any time to lend more than the Revolver Loan Commitment less the sum
of (i) the outstanding Letter of Credit Liability and (ii) the aggregate
principal amount of the Revolver Loans and Swingline Loans then outstanding.
Within the limits of the Swingline Commitment and this Subsection 1.1(C) and
Subsections 1.6, 1.7 and 1.8, amounts borrowed under this Subsection 1.1(C) may
be prepaid and reborrowed at any time prior to the Revolver Loan Expiration
Date.
(D) Letters of Credit. The Revolving Loan Commitment may, in addition
to advances as Revolving Loans, be utilized, upon the request of Borrower, for
the issuance of irrevocable letters of credit (individually, a "Letter of
Credit" and, collectively, the "Letters of Credit") by CoBank for the account of
Borrower or any of its Subsidiaries. Each Letter of Credit shall reduce the
amount available under the Revolving Loan Commitment by the maximum amount
capable of being drawn under such Letter of Credit.
(1) Maximum Amount. The aggregate amount of Letter of Credit
Liability with respect to all Letters of Credit outstanding at any time for the
account of Borrower or any of its Subsidiaries may not exceed $25,000,000, and
the aggregate amount of Letter of Credit Liability with respect to all Letters
of Credit outstanding for the account of Borrower or any of its Subsidiaries
plus the aggregate principal amount of Revolving Loans outstanding at any time
may not exceed the Revolving Loan Commitment.
(2) Reimbursement. Borrower is irrevocably and unconditionally
obligated without presentment, demand, protest or other formalities of any kind
to reimburse CoBank in immediately available funds for any amounts paid by
CoBank with respect to a Letter of Credit issued hereunder for the account of
Borrower or any of its Subsidiaries. Borrower hereby authorizes and directs
CoBank, at CoBank's option, to make a Revolving Loan in the amount of any
payment made by CoBank with respect to any Letter of Credit issued for the
account of Borrower or any of its Subsidiaries. If the Letter of Credit is
payable in a foreign currency, the amount owed by Borrower in connection with
such Letter of Credit shall equal an amount in United States Dollars equivalent
to CoBank's actual cost of settling its obligation under such Letter of Credit
in such foreign currency. All amounts paid by CoBank with respect to any Letter
of Credit that are not immediately repaid by Borrower or that are not repaid
with a Revolving Loan shall bear interest at the sum of the Base Rate plus the
Base Rate Margin applicable from time to time as provided in Subsection 1.2(B).
(3) Conditions of Issuance of Letters of Credit. In addition to all
other terms and conditions set forth in this Agreement, the issuance by CoBank
of any Letter of Credit shall be subject to the conditions precedent that the
Letter of Credit shall support a transaction entered into in the ordinary course
of Borrower's or any of its Subsidiaries' businesses, shall be in an amount
equal to or greater than $50,000 and shall be in such form and contain such
terms and conditions as are reasonably satisfactory to CoBank. The expiration
date of each Letter of Credit must be on a date which is the earlier of one year
from its date of issuance or the 30th day before the date set forth in clause
(iii) of the definition of the term Revolving Loan Expiration Date, or such
other date as agreed to by both CoBank, in its sole discretion.
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(4) Request for Letters of Credit. Borrower must give CoBank at
least three Business Days' prior written notice, which notice will be
irrevocable, specifying the date a Letter of Credit is requested to be issued
and the amount and the currency in which such Letter of Credit is payable,
identifying the beneficiary and describing the nature of the transactions
proposed to be supported thereby. Any notice requesting the issuance of a Letter
of Credit shall be accompanied by the form of the Letter of Credit to be
provided by CoBank. Borrower must also complete any application procedures and
documents required by CoBank in connection with the issuance of any Letter of
Credit, including a certificate regarding Borrower's compliance with the
provisions of Subsection 7.2 of this Agreement.
(5) Borrower Obligations Absolute. The obligations of Borrower under
this Subsection 1.1(C) are irrevocable, will remain in full force and effect
until CoBank has no further obligations to make any payments or disbursements
under any circumstances with respect to any Letter of Credit, shall be absolute
and unconditional, shall not be subject to counterclaim, setoff or other defense
or any other qualification or exception whatsoever and shall be paid in
accordance with the terms and conditions of this Agreement under all
circumstances, including, without limitation, any of the following
circumstances:
(a) Any lack of validity or enforceability of this Agreement, any
of the other Loan Documents or any documents or instruments relating to any
Letter of Credit;
(b) Any change in the time, manner or place of payment of, or in
any other term of, all or any of the obligations in respect of any Letter of
Credit or any other amendment, modification or waiver of or any consent to or
departure from any Letter of Credit, any documents or instruments relating
thereto, or any Loan Document in each case whether or not Borrower or its
Subsidiaries has notice or knowledge thereof;
(c) The existence of any claim, setoff, defense or other right
that Borrower or its Subsidiaries may have at any time against a beneficiary
named in a Letter of Credit, any transferee of any Letter of Credit (or any
Person for whom any such transferee may be acting), CoBank or any other Person,
whether in connection with this Agreement, any other Loan Document, any Letter
of Credit, the transactions contemplated hereby or any other related or
unrelated transaction or transactions (including any underlying transaction
between Borrower or its Subsidiaries and the beneficiary named in any such
Letter of Credit);
(d) Any draft, certificate or any other document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect, any errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, telecopier or otherwise, or any errors in
translation or in interpretation of technical terms;
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(e) Payment under any Letter of Credit against presentation of a
demand, draft or certificate or other document which does not comply with the
terms of such Letter of Credit;
(f) Any defense based upon the failure of any drawing under any
Letter of Credit to conform to the terms of such Letter of Credit (provided that
any draft, certificate or other document presented pursuant to such Letter of
Credit appears on its face to comply with the terms thereof), any nonapplication
or misapplication by the beneficiary or any transferee of the proceeds of such
drawing or any other act or omission of such beneficiary or transferee in
connection with such Letter of Credit;
(g) The exchange, release, surrender or impairment of any
collateral or other security for the obligations;
(h) The occurrence of any Default or Event of Default; or
(i) Any other circumstance or event whatsoever, including,
without limitation, any other circumstance that might otherwise constitute a
defense available to, or a discharge of, Borrower or any Subsidiary.
Any action taken or omitted to be taken by CoBank under or in connection with
any Letter of Credit, if taken or omitted in the absence of negligence or
willful misconduct, is binding upon Borrower and its Subsidiaries and shall not
create or result in any liability of CoBank to Borrower or any of its
Subsidiaries. It is expressly agreed that, for purposes of determining whether a
wrongful payment under a Letter of Credit resulted from CoBank's negligence or
willful misconduct, none of the following shall be deemed to constitute
negligence or willful misconduct by CoBank: (i) CoBank's acceptance of documents
that appear on their face to comply with the terms of such Letter of Credit,
without responsibility for further investigation, (ii) CoBank's exclusive
reliance on the documents presented to it under such Letter of Credit as to any
and all matters set forth therein, including the amount of any draft presented
under such Letter of Credit, whether or not the amount due to the beneficiary
thereunder equals the amount of such draft and whether or not any document
presented pursuant to such Letter of Credit proves to be insufficient in any
respect (so long as such document appears on its face to comply with the terms
of such Letter of Credit), and whether or not any other statement or any other
document presented pursuant to such Letter of Credit proves to be forged or
invalid or any statement therein proves to be inaccurate or untrue in any
respect whatsoever, and (iii) any noncompliance in any immaterial respect of the
documents presented under such Letter of Credit with the terms thereof.
(6) UCP. The Uniform Customs and Practice for Documentary Credits as
most recently published from time to time by the International Chamber of
Commerce (the "UCP") is hereby incorporated in this Agreement and shall be
deemed incorporated by this reference into each Letter of Credit issued pursuant
to this Agreement. The terms and conditions of the UCP shall be binding on the
parties to this Agreement and each beneficiary of any Letter of Credit issued
pursuant to this Agreement .
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(7) Evergreen Letters of Credit. If Borrower so requests in any
applicable Letter of Credit application, CoBank agrees to issue a Letter of
Credit that has automatic renewal provisions (each, an "Evergreen Letter of
Credit"); provided that any such Evergreen Letter of Credit must permit CoBank
to prevent any such renewal at least once in each twelve-month period
(commencing with the date of issuance of such Letter of Credit) by giving prior
notice to the beneficiary thereof not later than a day (the "Nonrenewal Notice
Date") in each such twelve-month period to be agreed upon at the time such
Letter of Credit is issued. Unless otherwise directed by CoBank, Borrower shall
not be required to make a specific request to CoBank for any such renewal.
Notwithstanding anything to the contrary contained herein, CoBank shall have no
obligation to permit the renewal of any Evergreen Letter of Credit at any time.
(E) Notes. Borrower shall execute and deliver to CoBank a Term Loan
Note, a Revolving Loans Note and a Swingline Note, each dated the Closing Date,
in the aggregate principal amount of the Term Loan Commitment, the Revolving
Loan Commitment and the Swingline Commitment, respectively.
(F) Advances. Loans will be made available by wire transfer of
immediately available funds. Wire transfers will be made to such account or
accounts as may be authorized by Borrower.
1.2 Interest.
(A) Interest Options.(i) From the date each Loan is made, based upon
Borrower's election at such time and from time to time thereafter (as
provided in Subsection 1.3 and subject to the conditions set forth in such
Subsection 1.3 and Subsection 1.2 (C)), each Loan shall accrue interest as
follows:
(a) as a portion of the Base Rate Loan, at the sum of the Base
Rate plus the Base Rate Margin applicable from time to time as
provided in Subsection 1.2(B);
(b) as a LIBOR Loan, for the applicable Interest Period, at
the sum of LIBOR plus the LIBOR Margin applicable from time to time
as provided in Subsection 1.2(B); or
(c) as a Quoted Rate Loan, at the Quoted Rate. The Quoted Rate
may be fixed for periods (each, a "Quoted Rate Period") ranging from
365 days to, in the case of the Term Loan, the date in clause (ii)
of the definition of "Term Loan Maturity Date" and, in the case of
Revolving Loans, the date in clause (iii) of the definition of
"Revolving Loan Expiration Date,", such rate and period to be
established by CoBank in its sole discretion; provided, however, the
period during which the Quoted Rate applies may only expire on a
Business Day;
provided, further, that for each Swingline Loan, such Swingline Loan
shall accrue interest at the sum of the Overnight LIBOR Rate
applicable from time to time plus the LIBOR Margin applicable from
time to time as provided in Subsection 1.2(B);
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(ii) Except as otherwise provided in Subsections 1.2(E) and 6.6,
interest on all Obligations (other than the interest payments required
pursuant to Subsection 1.2(A)(i) above) not paid when due will accrue
interest at the Base Rate plus 0.25% per annum.
(B) Applicable Margins. Initially, and continuing through the day
immediately preceding the first Adjustment Date, the applicable Base Rate Margin
and LIBOR Margin shall be 0.00% and 0.875% per annum, respectively. Commencing
on such Adjustment Date, the applicable Base Rate Margin and LIBOR Margin shall
be for each Calculation Period the applicable per annum percentage set forth in
the pricing table below opposite the applicable Leverage Ratio of Borrower;
provided, that at the election of CoBank, effective upon the occurrence of an
Event of Default pursuant to Subsection 6.1(A) or Subsection 6.1(C) with respect
to failure to comply with a financial covenant in Section 4 and for so long as
it continues the applicable Base Rate Margin and LIBOR Margin shall be 0.25% and
1.00% per annum, respectively.
PRICING TABLE
Base Rate
Leverage Ratio Margin LIBOR Margin
-------------------------- ---------------- ---------------------
= 2.00:1 0.25% 1.00%
-------------------------- ---------------- ---------------------
< 2.00:1 = 1.00:1 0.00% 0.875%
-------------------------- ---------------- ---------------------
< 1.00:1 0.00% 0.75%
-------------------------- ---------------- ---------------------
(C) Interest Periods. Each LIBOR Loan may be obtained for a one, two,
three, six, nine or 12 month period (each such period being an "Interest
Period"). With respect to all LIBOR Loans:
(i) the Interest Period will commence on the date that any LIBOR
Loan is made or the date on which any portion of the Base Rate Loan is
converted into a LIBOR Loan, or, in the case of immediately successive
Interest Periods, each successive Interest Period shall commence on the
day on which the immediately preceding Interest Period expires;
(ii) if the Interest Period would otherwise expire on a day that is
not a Business Day, then it will expire on the next Business Day,
provided, that if any Interest Period would otherwise expire on a day that
is not a Business Day and such day is a day of a calendar month after
which no further Business Day occurs in such month, such Interest Period
shall expire on the Business Day next preceding such day;
(iii) any Interest Period that begins on the last Business Day of a
calendar month or on a day for which there is no numerically corresponding
day in the last calendar month in such Interest Period shall end on the
last Business Day of the last calendar month in such Interest Period; and
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(iv) no Interest Period shall be selected for any LIBOR Loan if, in
order to make repayments required pursuant to Subsection 1.6 in connection
with scheduled installments on the Term Loan or scheduled reductions of
the Revolving Loan Commitment pursuant to Subsection 1.6, repayment of all
or any portion of a Loan prior to the expiration of such Interest Period
would be necessary.
(D) Calculation and Payment. Interest on all Loans and all other
Obligations and the amount of any fees set forth in Subsection 1.4 shall be
calculated on the basis of a 360-day year (of twelve 30-day months) for the
actual number of days elapsed. The date of funding or conversion to the Base
Rate Loan or a Swingline Loan, the first day of an Interest Period with respect
to a LIBOR Loan and the first day of a Quoted Rate Period with respect to a
Quoted Rate Loan shall be included in the calculation of interest. The date of
payment of any Loan, the last day of an Interest Period with respect to a LIBOR
Loan and the last day of a Quoted Rate Period with respect to a Quoted Rate Loan
shall be excluded from the calculation of interest; provided, if a Loan is
repaid on the same day that it is made, one day's interest shall be charged.
Interest accruing on the Base Rate Loan, and Swingline Loan and each
Quoted Rate Loan is payable in arrears on each of the following dates or events:
(i) the last day of each calendar quarter, (ii) the prepayment of such Loan (or
portion thereof) and (iii) the Term Loan Maturity Date or the Revolving Loan
Expiration Date, as applicable, whether by acceleration or otherwise. Interest
accruing on each LIBOR Loan is payable in arrears on each of the following dates
or events: (i) the last day of each applicable Interest Period, (ii) if the
Interest Period is longer than three months, on each three-month anniversary of
the commencement date of such Interest Period, (iii) the prepayment of such Loan
(or portion thereof) and (iv) the Term Loan Maturity Date or the Revolving Loan
Expiration Date, as applicable, whether by acceleration or otherwise.
(E) Default Rate of Interest. At the election of CoBank, after the
occurrence of an Event of Default pursuant to Subsection 6.1(A) or Subsection
6.1(C) with respect to failure to comply with a financial covenant in Section 4
and for so long as it continues, all Loans and other Obligations shall bear
interest at rates that are 2.00% in excess of the rates otherwise in effect,
including, without limitation, rates in effect pursuant to the proviso in the
second sentence of Subsection 1.2(B), with respect to such Loans and other
Obligations.
(F) Excess Interest. Notwithstanding anything to the contrary set forth
herein, the aggregate interest, fees and other amounts required to be paid by
Borrower to CoBank hereunder are hereby expressly limited so that in no
contingency or event whatsoever, whether by reason of acceleration of maturity
of the Indebtedness evidenced hereby or otherwise, shall the amount paid or
agreed to be paid to CoBank for the use or the forbearance of the Indebtedness
or Obligations evidenced hereby exceed the maximum permissible under Applicable
Law. If under or from any circumstances whatsoever, fulfillment of any provision
hereof or of any of the other Loan Documents at the time of performance of such
provision shall be due, shall involve exceeding the limit of such as is validity
prescribed by Applicable Law then the obligation to be fulfilled shall
automatically be reduced to the limit of such validity and if under or from any
circumstances whatsoever CoBank should ever receive as interest any amount which
would exceed the highest lawful rate, the amount of such interest that is
excessive shall be applied to the reduction of the principal balance of the
Obligations evidenced hereby and not to the payment of interest. Additionally,
should the method used for calculating interest (i.e., using a 360-day year) be
unlawful, such calculation method shall be automatically changed to a 365-6-day
year or such other lawful calculation method as is reasonably acceptable to
CoBank. This provision shall control every other provision of this Agreement and
all provisions of every other Loan Document.
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(G) Selection, Conversion or Continuation of Loans; LIBOR
Availability. Borrower shall have the option to (i) select all or any part of a
new borrowing to be (a) a portion of the Base Rate Loan in a principal amount
equal to $100,000 or any whole multiple of $5,000 in excess thereof, (b) a LIBOR
Loan in a principal amount equal to $500,000 or any whole multiple of $100,000
in excess thereof, (c) a Swingline Loan in a principal amount equal to $50,000
or any whole multiple of $5,000 in excess thereof or (d) a Quoted Rate Loan in a
principal amount equal to $10,000,000 or any whole multiple of $1,000,000 in
excess thereof, (ii) convert at any time all or any portion of the Base Rate
Loan in a principal amount equal to $500,000 or any whole multiple of $250,000
in excess thereof into a LIBOR Loan or in a principal amount equal to
$10,000,000 or any whole multiple of $1,000,000 in excess thereof into a Quoted
Rate Loan, (iii) upon the expiration of its Interest Period, convert all or any
part of any LIBOR Loan into the Base Rate Loan or into a Quoted Rate Loan in a
principal amount equal to $10,000,000 or any whole multiple of $1,000,000 in
excess thereof for such new Quoted Rate Period(s) as selected by Borrower or
upon the expiration of its Quoted Rate Period, or convert all or any part of any
Quoted Rate Loan into the Base Rate Loan or into a LIBOR Loan in a principal
amount equal to $500,000 or any whole multiple of $100,000 in excess thereof for
such new Interest Period(s) as selected by Borrower, and (iv) upon the
expiration of its Interest Period, continue any LIBOR Loan in a principal amount
equal to $500,000 or any whole multiple of $100,000 in excess thereof into one
or more LIBOR Loans for such new Interest Period(s) as selected by Borrower, or
upon the expiration of its Quoted Rate Period, continue any Quoted Rate Loan in
a principal amount equal to $10,000,000 or any whole multiple of $1,000,000 in
excess thereof into one or more Quoted Rate Loans for such new Quoted Rate
Period(s) as selected by Borrower. During any period in which any Event of
Default is continuing, as the Interest Periods for LIBOR Loans and Quoted Rate
Loans then in effect expire, such Loans shall be converted into the Base Rate
Loan and the LIBOR option and the Quoted Rate option will not be available to
Borrower until all Events of Default are cured or waived. Each LIBOR Loan or
Quoted Rate Loan must be made under a single Facility. In the event Borrower
fails to elect a LIBOR Loan or Quoted Rate Loan upon any advance hereunder or
upon the termination of any Interest Period or Quoted Rate Period, Borrower
shall be deemed to have elected to have such amount constitute a portion of the
Base Rate Loan. Notwithstanding the foregoing, there may be no more than a total
of ten LIBOR Loans and Quoted Rate Loans outstanding under the Facilities at any
one time.
1.3 Notice of Borrowing, Conversion or Continuation of Loans.
Whenever Borrower desires to request a Loan pursuant to Subsection
1.1 or to convert or continue Base Rate, LIBOR Loans or Quoted Rate Loans
pursuant to Subsection 1.2(G), Borrower shall give CoBank irrevocable prior
written notice in the form attached hereto as Exhibit 1.3 (a "Notice of
Borrowing/Conversion/Continuation"), (i) if requesting a borrowing of,
conversion to or continuation of the Base Rate Loan (or any portion thereof) or
a Quoted Rate Loan, not later than 11:00 a.m. (Denver, Colorado time), one
Business Day before the proposed borrowing, conversion or continuation is to be
effective, (ii) if requesting a borrowing of a Swingline Loan, not later than
2:00 p.m. (Denver, Colorado time) on the date the proposed borrowing is to be
effective or (iii) if requesting a borrowing of, a conversion to or a
continuation of a LIBOR Loan, not later than 11:00 a.m. (Denver, Colorado time),
three Banking Days before the proposed borrowing, conversion or continuation is
to be effective. Each Notice of Borrowing/Conversion/Continuation shall specify
(a) the Loan (or portion thereof) to be converted or continued and, with respect
to any LIBOR Loan to be converted or continued, the last day of the current
Interest Period therefore and with respect to any Quoted Rate Loan to be
converted or continued, the last day of the current Quoted Rate Period therefor,
(b) the effective date of such borrowing, conversion or continuation (which
shall be a Business Day, and in the case of a LIBOR Loan, also a Banking Day),
(c) the principal amount of such Loan to be borrowed, converted or continued,
(d) the Interest Period to be applicable to any new LIBOR Loan or the Quoted
Rate Period to be applicable to any new Quoted Rate Loan, and (e) the Facility
under which such borrowing, conversion or continuation is to be made. Upon
satisfaction of the notice requirement set forth in this Subsection 1.3, and the
other applicable conditions set forth in this Agreement, CoBank shall make the
Loan, or requested conversion or continuation, on the requested effective date.
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1.4 Fees and Expenses.
(A) Commitment Fee. From the Closing Date through the Revolving Loan
Expiration Date, Borrower shall pay CoBank a fee in an amount equal to (i) the
Revolving Loan Commitment less the sum of (a) the average daily outstanding
balance of Revolving Loans plus (b) the average daily outstanding balance of
Swingline Loans plus (c) the average daily outstanding Letter of Credit
Liability, in each case during the preceding calendar quarter multiplied by (ii)
either (a) 0.125% per annum, when such aggregate average daily outstanding
balance during the applicable period equals or exceeds 50% of the applicable
Revolving Loan Commitment, or (b) 0.25% per annum, when such aggregate average
daily outstanding balance during the applicable period is less than 50% of the
applicable Revolving Loan Commitment. Such fee is to be paid quarterly in
arrears on the last day of each calendar quarter for such calendar quarter (or
portion thereof), with the final such payment due on the Revolving Loan
Expiration Date.
(B) Certain Other Fees. Borrower shall pay to CoBank the fees
specified in that certain letter agreement, dated April 5, 2006, from CoBank to
Borrower, in such amounts and at such times as specified in such letter
agreement.
(C) Breakage Fee. Upon any repayment or payment of a LIBOR Loan on
any day that is not the last day of the Interest Period applicable thereto
(regardless of the source of such repayment or prepayment and whether voluntary,
mandatory, by acceleration or otherwise), Borrower shall pay CoBank an amount
(the "LIBOR Breakage Fee") equal to the greater of (i) $300 or (ii) the present
value of any losses, expenses and liabilities (including any loss (including
interest paid but excluding the loss of any applicable margin) sustained by
CoBank in connection with the good faith re-employment of such funds) that
CoBank may sustain as a result of the payment of such LIBOR Loan on such day.
Upon any repayment or payment of a Quoted Rate Loan on any day that is not the
last day of the Quoted Rate Period applicable thereto (regardless of the source
of such repayment or prepayment and whether voluntary, mandatory, by
acceleration or otherwise), Borrower shall pay CoBank an amount (the "Quoted
Rate Breakage Fee"; and together with the LIBOR Breakage Fee, the "Breakage
Fees") equal to the greater of (i) $300 or (ii) the sum of (a) the present value
of any losses, expenses and liabilities (including any loss (including interest
paid) sustained by CoBank in connection with the good faith re-employment of
such funds) that CoBank may sustain as a result of the payment of such Quoted
Rate Loan on such day plus (b) a per annum yield of 1/2 of 1 percent (0.50%) on
the amount prepaid for the period such amount was scheduled to have been
outstanding at Quoted Rate.
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(D) Expenses and Attorneys Fees. Borrower agrees to pay promptly all
reasonable fees, costs and expenses (including those of external attorneys)
incurred by CoBank in connection with (i) any matters contemplated by or arising
out of the Loan Documents, and (ii) any fees, costs and expenses incurred in
connection with any amendments, modifications and waivers. In addition to fees
due under Subsections 1.4(A) and (B), Borrower shall also reimburse on demand
CoBank for its out-of-pocket expenses (including reasonable attorneys' fees and
expenses and expenses) incurred in connection with the transactions contemplated
herein. Borrower agrees to pay promptly all reasonable out-of-pocket fees, costs
and expenses incurred by CoBank in connection with any action to enforce any
Loan Document or to collect any payments due from Borrower. In addition to fees
due under Subsections 1.4(A) and (B), Borrower agrees to pay promptly (i) all
reasonable fees, costs and expenses incurred by CoBank in connection with any
amendment, supplement, waiver or modification of any of the Loan Documents and
(ii) all reasonable out-of-pocket fees, costs and expenses incurred by each of
CoBank in connection with any Default or Event of Default and any enforcement of
collection proceeding resulting therefrom or any workout or restructuring of any
of the transactions hereunder or contemplated thereby or any action to enforce
any Loan Document or to collect any payments due from Borrower. All fees, costs
and expenses for which Borrower is responsible under this Subsection 1.4(D)
shall be deemed part of the Obligations when incurred, payable upon demand and
in accordance with the second paragraph of Subsection 1.5.
(E) Letter of Credit Fees. Borrower shall pay CoBank a yearly fee
for each Letter of Credit from the date of issuance to the date of termination
in an amount equal to the applicable LIBOR Margin multiplied by the face amount
of such Letter of Credit. Such fee is to be paid quarterly in arrears on the
last day of each calendar quarter and the termination of the Letter of Credit.
With respect to each Letter of Credit, Borrower shall also pay CoBank an
issuance fee equal to 0.125% of the face amount of such Letter of Credit, which
amount shall be paid upon the date of issuance and, if the expiration date of
such Letter of Credit is later than one year from its date of issuance, upon
each anniversary of the date of issuance during the term of such Letter of
Credit.
1.5 Payments. All payments by Borrower of the Obligations shall be made
in same day funds and delivered to CoBank by wire transfer to the following
account or such other place as CoBank may from time to time designate:
CoBank, ACB
Greenwood Village, Colorado
ABA Number 0000-0000-0
Account No. 00000000-RX0407 (indicate whether a payment on
Term Loan Facility, Swingline Facility or the Revolving
Loan Facility)
Reference: CoBank for the benefit of SureWest Communications
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Borrower shall receive credit on the day of receipt for funds received by CoBank
by 11:00 a.m. (Denver, Colorado time) on any Business Day. Funds received on any
Business Day after such time shall be deemed to have been paid on the next
Business Day. Whenever any payment to be made hereunder shall be stated to be
due on a day that is not a Business Day, the payment shall be due on the next
succeeding Business Day and such extension of time shall be included in the
computation of the amount of interest and fees due hereunder.
At any time that funds have been drawn thereunder, Borrower authorizes
CoBank to make (but CoBank shall not be obligated to make) the Base Rate Loan
under the Revolving Loan Facility, for Letter of Credit Liability payments.
Following an Event of Default, Borrower authorizes CoBank to make (but CoBank
shall not be obligated to make) a Base Rate Loan under the Revolving Loan
Facility for the payment of interest, commitment fees and Breakage Fees. Prior
to an Event of Default, other fees, costs and expenses (including those of
attorneys) reimbursable pursuant to Subsections 1.4(A), 1.4(B), 1.4(D) and
1.4(E) or elsewhere in any Loan Document may be debited to the Base Rate Loan
under the Revolving Loan Facility after 15 days' notice. After the occurrence of
an Event of Default, any such other fees, costs and expenses may be debited to
the Base Rate Loan under the Revolving Loan Facility without notice.
To the extent Borrower makes a payment or payments to CoBank, which
payments or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside and/or required to be repaid to a trustee,
receiver or any other party under any bankruptcy law, state or federal law,
common law or equitable cause, then, to the extent of such payment or proceeds
repaid, the Obligations or part thereof intended to be satisfied shall be
revived and continued in full force and effect as if such payment or proceeds
had not been received by CoBank.
1.6 Repayments and Reduction of Term Loan and Revolving Loan Commitment
and Related Mandatory Repayments.
(A) Scheduled Repayments and Reductions of Term Loan and Revolving
Loan Commitment.
(1) Term Loan. In addition to any prepayments or repayments made
or required pursuant to Subsection 1.7, the outstanding principal balance of the
Term Loan not sooner due and payable shall become due and payable on the Term
Loan Maturity Date.
(2) Revolving Loan Commitment and Swingline Commitment. In
addition to any reductions pursuant to Subsection 1.6(B), the Revolving Loan
Commitment and the Swingline Commitment shall be permanently reduced and
terminated in full on the Revolving Loan Expiration Date, and any outstanding
principal balance of the Revolver Loans and the Swingline Loans not sooner due
and payable will become due and payable on the Revolving Loan Expiration Date.
(B) Voluntary Reduction of Loan Commitments. Borrower shall have the
right, upon at least three Business Days' notice to CoBank, to permanently
reduce the then unused portion of the Revolving Loan Commitment or the Swingline
Commitment. Each reduction shall be in a minimum amount of at least $1,000,000,
or any whole multiple of $250,000 in excess thereof. Notwithstanding the
foregoing, no reduction of the Revolving Loan Commitment shall be permitted if,
after giving effect thereto and to any prepayment made therewith, the aggregate
principal balance of the Revolving Loans and the Swingline Loans then
outstanding plus the amount of the Letter of Credit Liability then outstanding,
would exceed the Revolving Loan Commitment, as so reduced. Notwithstanding the
foregoing, no reduction of the Swingline Commitment shall be permitted if, after
giving effect thereto and to any prepayment made therewith, the aggregate
principal balance of the Swingline Loans then outstanding would exceed the
Swingline Commitment, as applicable as so reduced.
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(C) Mandatory Repayments. On the date of any Revolving Loan
Commitment reduction provided for in this Subsection 1.6, Borrower shall repay
Revolving Loans and the Swingline Loans or reduce the Letter of Credit Liability
pursuant to Subsection 1.15 in an amount at least sufficient to reduce the
aggregate principal balance of Revolving Loans and the Swingline Loans then
outstanding plus the amount of the Letter of Credit Liability then outstanding
to the amount of the Revolving Loan Commitment as so reduced. If at any time the
aggregate outstanding amount of Revolving Loans and the Swingline Loans plus the
amount of the Letter of Credit Liability then outstanding exceeds the Revolving
Loan Commitment, Borrower shall repay Revolving Loans and Swingline Loans or
reduce the Letter of Credit Liability pursuant to Subsection 1.15 in an amount
at least sufficient to reduce the aggregate principal balance of Revolving Loans
and Swingline Loans then outstanding plus the amount of the Letter of Credit
Liability then outstanding to the amount of the Revolving Loan Commitment, and
until such repayment is made, CoBank shall not be obligated to make any Loans or
issue any Letters of Credit. Any repayments pursuant to this Subsection 1.6(C)
shall be applied in accordance with Subsection 1.8, and shall be accompanied by
accrued interest on the amount repaid and any applicable Breakage Fees. If at
any time the aggregate outstanding amount of the Swingline Loans outstanding
exceeds the Swingline Loan Commitment, Borrower shall repay Swingline Loans in
an amount at least sufficient to reduce the aggregate principal balance of
Swingline Loans then outstanding to the amount of the Swingline Loan Commitment,
and until such repayment is made, CoBank shall not be obligated to make any
Loans or issue any Letters of Credit. Any repayments pursuant to this Subsection
1.6(C) shall be applied in accordance with Subsection 1.8, and shall be
accompanied by accrued interest on the amount repaid and any applicable Breakage
Fees.
1.7 Voluntary Prepayments and Other Mandatory Repayments (A) Voluntary
Prepayment of Loans. Subject to the provisions of Section 1.8, at any time,
Borrower may prepay the Base Rate Loan, in whole or in part, without penalty.
Subject to the provisions of Section 1.8, payment of applicable Breakage Fees
and the notice requirement in the following sentence, at any time Borrower may
prepay any LIBOR Loan or any Quoted Rate Loan, in whole or in part. Notice of
any prepayment of a LIBOR Loan or Quoted Rate Loan shall be given not later than
11:00 a.m. (Denver, Colorado time) on the third Business Day preceding the date
of prepayment. All prepayment notices shall be irrevocable. All prepayments
shall be accompanied by accrued interest on the amount prepaid and any
applicable Breakage Fees.
(B) Repayments from Insurance Proceeds. Borrower shall repay the
Term Loan in an amount equal to the Net Proceeds received by Borrower or any of
its Subsidiaries which are insurance proceeds from any Asset Disposition to the
extent that such proceeds are not reinvested in equipment or other assets that
are used or useful in the business of Borrower or any of its Subsidiaries within
180 days of receipt by Borrower or such Subsidiary of such proceeds. All such
repayments shall be applied in accordance with Subsection 1.8. All such
repayments shall be accompanied by accrued interest on the amount repaid and any
applicable Breakage Fees.
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(C) Repayments from Asset Dispositions. Promptly upon receipt by
Borrower or any of its Subsidiaries of Net Proceeds of an Asset Disposition,
other than insurance proceeds reinvested pursuant to Subsection 1.7(B) or Net
Proceeds of Asset Dispositions permitted pursuant to Subsection 3.7, without the
consent of CoBank (unless pursuant to Subsection 3.7(vi) Borrower is required to
apply such proceeds to the repayment of the Term Loan pursuant to this
Subsection 1.7(C)), Borrower shall repay the Term Loan in an amount equal to the
Net Proceeds received by Borrower or any of its Subsidiaries. All such
repayments shall be applied in accordance with Subsection 1.8. All such
repayments shall be accompanied by accrued interest on the amount repaid and any
applicable Breakage Fees.
1.8 Application of Prepayments and Repayments; Payment of Breakage Fees,
Etc. All prepayment and repayments made pursuant to Subsections 1.6 and 1.7
shall first be applied to such of the applicable type of Loans as Borrower shall
direct in writing and, in the absence of such direction, shall first be applied
to the Base Rate Loan and then to such LIBOR Loans and Quoted Rate Loans as
Borrower and CoBank shall agree (in the absence of agreement, such prepayments
and repayments shall be applied to the LIBOR Loans and Quoted Rate Loans on
which the lowest amount of Breakage Fees would be due). All prepayments and
repayments required or permitted hereunder shall be accompanied by payment of
all applicable Breakage Fees and accrued interest on the amount repaid.
1.9 Loan Accounts. CoBank will maintain loan account records for (i) all
Loans, interest charges and payments thereof, (ii) all Letter of Credit
Liability, (iii) the charging and payment of all fees, costs and expenses and
(iv) all other debits and credits pursuant to this Agreement. Absent manifest
error, the balance in the loan accounts shall be presumptive evidence of the
amounts due and owing to CoBank, provided that any failure by CoBank to maintain
such records shall not limit or affect Borrower's obligation to pay. During the
continuance of an Event of Default, Borrower irrevocably waives the right to
direct the application of any and all payments and Borrower hereby irrevocably
agrees that CoBank shall have the continuing exclusive right to apply and
reapply payments in any manner it deems appropriate.
1.10 Changes in LIBOR Rate Availability. If with respect to any proposed
Interest Period, CoBank determines that deposits in dollars (in the applicable
amount) are not being offered in the relevant market for such Interest Period,
CoBank shall forthwith give notice thereof to Borrower, whereupon and until
CoBank notifies Borrower that the circumstances giving rise to such situation no
longer exist, the obligations of CoBank to make LIBOR Loans shall be suspended.
If the introduction of, or any change in, any Applicable Law or any
change in the interpretation or administration thereof by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by CoBank with any request or directive
(whether or not having the force of law) of any such Governmental Authority,
central bank or comparable agency, shall make it unlawful or impossible for
CoBank to honor its obligations hereunder to make or maintain any LIBOR Loan,
CoBank shall promptly give notice thereof to Borrower. Thereafter, until CoBank
notifies Borrower that such circumstances no longer exist, (i) the obligations
of CoBank to make LIBOR Loans and the right of Borrower to convert any Loan or
continue any Loan as a LIBOR Loan shall be suspended and (ii) if CoBank may not
lawfully continue to maintain a LIBOR Loan to the end of the then current
Interest Period applicable thereto, such Loan shall immediately be converted to
the Base Rate Loan.
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1.11 Capital Adequacy and Other Adjustments.
(A) If the introduction of or the interpretation of any law, rule,
or regulation would increase the reserve requirement or otherwise increase the
cost to CoBank of making or maintaining a LIBOR Loan, then CoBank shall submit a
certificate to Borrower setting forth the amount and demonstrating the
calculation of such increased cost. CoBank may seek recovery of such additional
amounts from Borrower only to the extent it seeks recovery for such amounts from
similarly situated borrowers. Borrower shall pay the amount of such increased
cost to CoBank within 15 days after receipt of such certificate. Such
certificate shall, absent manifest error, be final, conclusive and binding for
all purposes. There is no limitation on the number of times such a certificate
may be submitted.
(B) In the event that CoBank shall have determined that the adoption
after the date hereof of any law, treaty, governmental (or quasi-governmental)
rule, regulation, guideline or order regarding capital adequacy, reserve
requirements or similar requirements or compliance by CoBank or any corporation
controlling CoBank with any request or directive regarding capital adequacy,
reserve requirements or similar requirements (whether or not having the force of
law and whether or not failure to comply therewith would be unlawful) from any
central bank or governmental agency or body having jurisdiction does or shall
have the effect of increasing the amount of capital, reserves or other funds
required to be maintained by CoBank or any corporation controlling CoBank and
thereby reducing the rate of return on CoBank's or such corporation's capital as
a consequence of its obligations hereunder, then Borrower shall from time to
time within 15 days after notice and demand from CoBank (together with the
certificate referred to in the next sentence) pay to CoBank additional amounts
sufficient to compensate CoBank for such reduction. CoBank may seek recovery of
such additional amounts from Borrower only to the extent it seeks recovery for
such amounts from similarly situated borrowers. A certificate as to the amount
of such cost and showing the basis of the computation of such cost submitted by
CoBank to Borrower shall, absent manifest error, be final, conclusive and
binding for all purposes. There is no limitation on the number of times such a
certificate may be submitted.
1.12 Taxes: No Deductions. Any and all payments or reimbursements made
hereunder or under the Notes shall be made free and clear of and without
deduction for any and all taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, however, any
tax imposed on the revenues, income or net income of CoBank by its jurisdiction
of incorporation or by the federal, state, local or foreign taxing authorities
in the jurisdiction in which the principal place of business of CoBank is
located or by any jurisdiction or taxing authority thereof or therein, with
which CoBank has or had a connection (other than a connection arising solely as
a result of CoBank having executed, delivered or performed its obligations or
received a payment under, or enforced, this Agreement or any other Loan
Document) (all such non-excluded taxes, levies, imposts, deductions or
withholdings, and all liabilities with respect thereto, collectively, "Tax
Liabilities"). If Borrower shall be required by law to deduct any Tax
Liabilities from or in respect of any sum payable hereunder to CoBank, then the
sum payable hereunder shall be increased as may be necessary so that, after
making all required deductions, CoBank receives an amount equal to the sum it
would have received had no such deductions been made.
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1.13 Changes in Tax Laws. In the event that, subsequent to the Closing
Date, (i) any changes in any existing law, regulation, treaty or directive or in
the interpretation or application thereof, (ii) any new law, regulation, treaty
or directive enacted or any interpretation or application thereof, or (iii)
compliance by CoBank with any request or directive (whether or not having the
force of law) from any Governmental Authority:
(i) does or shall subject CoBank to any tax of any kind whatsoever
with respect to this Agreement, the other Loan Documents or any Loans made
or any Letters of Credit issued hereunder, or change the basis of taxation
of payments to CoBank of principal, fees, interest or any other amount
payable hereunder (except for net income taxes, or franchise taxes imposed
in lieu of net income taxes, imposed generally by federal, state or local
taxing authorities with respect to interest or commitment or other fees
payable hereunder or changes in the rate of tax on the overall net income
of CoBank); or
(ii) does or shall impose on CoBank any other condition or increased
cost in connection with the transactions contemplated hereby or
participations herein;
and the result of any of the foregoing is to increase the cost to CoBank of
making or continuing any Loan or of issuing any Letters of Credit hereunder, or
to reduce any amount receivable hereunder, then, in any such case, Borrower
shall promptly pay to CoBank, upon its demand, any additional amounts necessary
to compensate CoBank, on an after-tax basis, for such additional cost or reduced
amount receivable, as determined by CoBank with respect to this Agreement or the
other Loan Documents. If CoBank becomes entitled to claim any additional amounts
pursuant to this Subsection 1.13, it shall promptly notify Borrower of the event
by reason of which CoBank has become so entitled. A certificate as to any
additional amounts payable pursuant to the foregoing sentence submitted by
CoBank to Borrower shall, absent manifest error, be final, conclusive and
binding for all purposes. There is no limitation on the number of times such a
certificate may be submitted.
1.14 Term of This Agreement. All of the Obligations shall become due and
payable as otherwise set forth herein, but in any event, all of the remaining
Obligations shall become due and payable on the Term Loan Maturity Date. Until
all Obligations have been indefeasibly and irrevocably paid and satisfied in
full, all Letters of Credit have been terminated and the Revolving Loan
Commitment has been terminated, this Agreement shall remain in full force and
effect.
1.15 Letter of Credit Liability. Upon the occurrence and during the
continuance of an Event of Default, and in the event any Letters of Credit are
outstanding at the time that Borrower terminates the Revolving Loan Commitment,
then (a) with respect to each such Letter of Credit, Borrower shall either (i)
deliver to CoBank a letter of credit in the same currency that such Letter of
Credit is payable, with a term that extends 60 days beyond the expiration date
of such Letter of Credit, issued by a bank satisfactory to CoBank and in an
amount equal to 105% of the aggregate outstanding Letter of Credit Liability
with respect to such Letter of Credit, which letter of credit shall be drawable
by CoBank to reimburse payments of drafts drawn under such Letter of Credit and
to pay any fees and expenses related thereto or (ii) immediately deposit with
CoBank an amount equal to the aggregate outstanding Letter of Credit Liability
to enable CoBank to make payments under the Letters of Credit when required and
such amount shall become immediately due and payable, and (b) Borrower shall
prepay the fees payable under Subsection 1.4(E) with respect to all such Letters
of Credit for the full remaining terms of such Letters of Credit. Upon
termination of any such Letter of Credit, the unearned portion of such prepaid
fee attributable to such Letter of Credit shall be refunded to Borrower.
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SECTION 2
AFFIRMATIVE COVENANTS
Borrower covenants and agrees that so long as the Loan Commitments
remain in effect, or any Letter of Credit, any Loan, any interest on any Loan or
any fee payable to CoBank hereunder remains outstanding, or any other amount
then due and payable is owing to CoBank hereunder, and unless CoBank shall
otherwise give its prior written consent, Borrower shall and shall cause its
Significant Subsidiaries to, perform and comply with all covenants in this
Section 2.
2.1 Compliance With Laws. Borrower will (i) comply with and will cause its
Significant Subsidiaries to comply with the requirements of all Applicable Laws
(including laws, rules, regulations and orders relating to taxes, employer and
employee contributions, securities, employee retirement and welfare benefits,
environmental protection matters and employee health and safety) as now in
effect and which may be imposed in the future in all jurisdictions in which
Borrower or any of its Significant Subsidiaries is now or hereafter doing
business, other than those Applicable Laws the noncompliance with which could
not reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect, (ii) obtain and maintain and will cause its Significant
Subsidiaries to obtain and maintain all licenses, qualifications and permits
(including the Licenses) now held or hereafter required to be held by Borrower
or any of its Significant Subsidiaries, the loss, suspension or revocation of
which or which the failure to obtain or renew could reasonably be expected to
have a Material Adverse Effect and (iii) comply with and will cause its
Significant Subsidiaries to comply with all Material Contracts, other than, in
all such cases, as would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. This Subsection 2.1 shall not
preclude Borrower or any of its Subsidiaries from contesting any taxes or other
payments, if they are being diligently contested in good faith and if adequate
reserves therefor are maintained in conformity with GAAP.
2.2 Maintenance of Books and Records; Properties; Insurance. Borrower will
keep and will cause each of its Significant Subsidiaries to keep adequate
records and books of account, in which full, true and correct entries will be
made in accordance with GAAP consistently applied, reflecting all financial
transactions of such Persons. Borrower will maintain or cause to be maintained
and will cause each of its Significant Subsidiaries to maintain or cause to be
maintained in good repair, working order and condition all material property
used in its business and the business of its Significant Subsidiaries, and will
make or cause to be made all appropriate repairs, renewals and replacements
thereof. Borrower will and will cause each of its Significant Subsidiaries to
maintain complete, accurate and up-to-date books, records, accounts and other
information relating to all property in such form and in such detail as may be
reasonably satisfactory to CoBank. Borrower will maintain or cause to be
maintained and will cause each of its Significant Subsidiaries to maintain or
cause to be maintained, with financially sound and reputable insurers,
commercial general liability, property loss and damage, business interruption
and workers' compensation insurance with respect to its business and properties
and the business and properties of its Significant Subsidiaries against loss and
damage of the kinds customarily carried or maintained by corporations of
established reputation engaged in the telecommunications service provider
industries, which may include self-insurance, if determined by Borrower to be
reasonably prudent, and will deliver evidence thereof to CoBank on or prior to
the Closing Date, and thereafter at least 30 days prior to any expiration
thereof, evidence of renewal of such insurance. All property loss and damage
insurance shall be on an all risk basis and shall insure property for the full
replacement cost thereof.
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CoBank shall be entitled, upon reasonable advance notice, to review
and/or receive copies of, the insurance policies of Borrower and its Significant
Subsidiaries carried and maintained with respect to Borrower's obligations under
this Subsection 2.2. Notwithstanding anything to the contrary herein, no
provision of this Subsection 2.2 or any provision of this Agreement shall impose
on CoBank any duty or obligation to verify the existence or adequacy of the
insurance coverage maintained by Borrower and its Significant Subsidiaries, nor
shall CoBank be responsible for any representations or warranties made by or on
behalf of Borrower and its Significant Subsidiaries to any insurance broker,
company or underwriter. CoBank, at its sole option, may obtain such insurance if
not provided by Borrower and in such event, Borrower shall reimburse CoBank upon
demand for the cost thereof.
2.3 Inspection. Borrower will and will cause its Significant Subsidiaries
to permit any authorized representatives of CoBank (i) to visit and inspect any
of the properties of Borrower and its Significant Subsidiaries, including its
financial and accounting records, and to make copies and take extracts
therefrom, and (ii) to discuss its affairs, finances and business with its
officers, employees and certified public accountants, all upon at least five
days notice, at such reasonable times during normal business hours and, unless a
Default or Event of Default has occurred and is continuing, not more than twice
a year.
2.4 Legal Existence, Etc. Except as otherwise permitted by Subsection 3.6,
Borrower will and will cause its Significant Subsidiaries to at all times
preserve and keep in full force and effect its or their legal existence and good
standing and all rights and franchises material to its or their business.
2.5 Use of Proceeds. Borrower will use and will cause its Significant
Subsidiaries to use the proceeds of the Loans solely for the purposes described
in the recital paragraphs to this Agreement. No part of any Loan will be used to
purchase any margin securities or otherwise in violation of the regulations of
the Federal Reserve System.
2.6 Further Assurances. Borrower will, and will cause each of its
Significant Subsidiaries to, from time to time, do, execute and deliver all such
additional and further acts, documents and instruments as CoBank reasonably
requests to consummate the transactions contemplated hereby and to vest
completely in and assure CoBank of its rights under this Agreement and the other
Loan Documents.
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2.7 CoBank Patronage Capital. Borrower will acquire non-voting
participation certificates in CoBank in such amounts and at such times as CoBank
may require in accordance with CoBank's Bylaws and Capital Plan (as each may be
amended from time to time), except that the maximum amount of participation
certificates that Borrower may be required to purchase in CoBank in connection
with the Loans may not exceed the maximum amount permitted by the Bylaws at the
time this Agreement is entered into. The rights and obligations of the parties
with respect to such participation certificates and any distributions made on
account thereof or on account of Borrower's patronage with CoBank shall be
governed by CoBank's Bylaws. Borrower hereby consents and agrees that the amount
of any distributions with respect to its patronage with CoBank that are made in
qualified written notices of allocation (as defined in 26 U.S.C. ss. 1388) and
that are received by Borrower from CoBank, will be taken into account by
Borrower at the stated dollar amounts whether the distribution is evidenced by a
participation certificate or other form of written notice that such distribution
has been made and recorded in the name of Borrower on the records of CoBank. The
Obligations shall be secured by a statutory first lien on all equity which
Borrower may now own or hereafter acquire in CoBank.
2.8 Investment Company Act. Neither Borrower nor any of its Significant
Subsidiaries shall be or become an "investment company" as that term is defined
in and is not otherwise subject to regulation under, the Investment Company Act
of 1940, as amended.
2.9 Payment of Obligations. Unless contested in good faith by appropriate
proceedings and then only to the extent reserves required by GAAP have been set
aside therefore, Borrower will, and will cause each of its Significant
Subsidiaries to, (i) pay, discharge or otherwise satisfy at or before maturity
all liabilities and obligations as and when due (subject to any applicable
subordination provisions), and any additional costs that are imposed as a result
of any failure to so pay, discharge or otherwise satisfy such obligations,
except to the extent failure to do so would not be reasonably likely to have a
Material Adverse Effect, and (ii) pay and discharge all taxes, assessments,
claims and governmental charges or levies imposed upon it, upon its income or
profits or upon any of its properties, prior to the date on which penalties
would attach thereto or a lien would attach to any of the properties of Borrower
if unpaid unless the same are being contested in good faith and by appropriate
proceedings and then only if and to the extent reserves required by GAAP have
been set aside therefor.
2.10 Environmental Laws. Borrower will, and will at all times cause each
of its Significant Subsidiaries to: (
(A) Comply in all material respects with, and ensure compliance in all
material respects by all its tenants and subtenants, if any, with, all
applicable Environmental Laws and obtain and comply in all material respects
with and maintain, and ensure that all its tenants and subtenants obtain and
comply in all material respects with and maintain, any and all licenses,
approvals, notifications, registrations or permits required by applicable
Environmental Laws except to the extent that failure to do so could not
reasonably be expected to have a Material Adverse Effect;
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(B) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws except to the extent that the same are being contested in good faith by
appropriate proceedings and the pendency of such proceedings could not
reasonably be expected to have a Material Adverse Effect.
(C) Defend, indemnify and hold harmless CoBank, and its respective
employees, agents, officers and directors, from and against any and all claims,
demands, penalties, fines, liabilities, settlements, damages, costs and expenses
of whatever kind or nature known or unknown, contingent or otherwise, arising
out of, or in any way relating to the violation of, noncompliance with or
liability under, any Environmental Law applicable to the operations of Borrower
or any of its Significant Subsidiaries or their respective properties, or any
orders, requirements or demands of Governmental Authorities related thereto,
including, without limitation, reasonable attorney's and consultant's fees,
investigation and laboratory fees, response costs, court costs and litigation
expenses, except to the extent that any of the foregoing is determined by a
final judgment of a court of competent jurisdiction or pursuant to arbitration
as set forth herein to have resulted from the gross negligence or willful
misconduct of the party seeking indemnification therefor. The agreements in this
Subsection 2.10 shall survive repayment of the Obligations and the termination
of this Agreement.
2.11 ERISA Compliance. With respect to any Plan that is intended to
qualify under Section 401(a) of the IRC, Borrower will apply for and obtain a
favorable determination letter within the period required by Applicable Law.
SECTION 3
NEGATIVE COVENANTS
Borrower covenants and agrees that so long as the Loan Commitments remain
in effect, or any Letter of Credit, any Loan, any interest on any Loan or any
fee payable to CoBank hereunder remains outstanding, or any other amount then
due and payable is owing to CoBank hereunder, and unless CoBank shall otherwise
give its prior written consent, Borrower shall, and shall cause its Significant
Subsidiaries to, perform and comply with all covenants in this Section 3.
3.1 Indebtedness. Borrower will not and will not permit its Significant
Subsidiaries directly or indirectly to create, incur, assume, guaranty or
otherwise become or remain liable with respect to any Indebtedness other than:
(A) the Obligations;
(B) Acquired Indebtedness if after giving effect to the incurrence the
Acquired Indebtedness, Borrower, on a combined and consolidated basis with its
Significant Subsidiaries as set forth in Section 4, are in compliance on a pro
forma basis with the covenants set forth in Section 4 recomputed for the most
recently ended fiscal quarter for which information is available;
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(C) Indebtedness issued or incurred by any of Borrower's Significant
Subsidiaries if after giving effect thereto and the application of proceeds
therefrom, the aggregate of all Priority Debt incurred after December 8, 1998
would not exceed 15% of Consolidated Net Worth as of the most recently completed
fiscal quarter of Borrower;
(D) secured Indebtedness issued by Borrower secured by a Lien described
in clause (9) of the definition of Permitted Encumbrances;
(E) Other unsecured Indebtedness issued by Borrower, provided, that no
Default or Event of Default exists at the time of or will result in the
succeeding 12 months after such issuance, including under Subsections 4.1 and
4.2, taking such additional Indebtedness (and a reasonable estimate of its
related interest expense into account);
(F) Indebtedness incurred in connection with any Related Interest Rate
Agreement; and
(G) Indebtedness under purchase money security agreements and Capital
Leases not to exceed $25,000,000 in the aggregate principal at any one time.
3.2 Liens and Related Matters. Borrower will not and will not permit its
Significant Subsidiaries directly or indirectly to create, incur, assume or
permit to exist any Lien on or with respect to any property or asset (including
any document or instrument with respect to goods or accounts receivable) of
Borrower or its Significant Subsidiaries, whether now owned or hereafter
acquired, or any income or profits therefrom, except Permitted Encumbrances.
3.3 Investments. Borrower will not make or own and will not permit its
Significant Subsidiaries to make or own any Investment in any Person that is
prohibited by its investment policy as then in effect, except equities in
CoBank, as set forth in Subsection 2.8.
3.4 Restricted Junior Payments. Borrower will not directly or indirectly
declare, order, pay, make or set apart any sum for any Restricted Junior
Payment; provided, however, that so long as no Default or Event of Default
exists before or will result in the succeeding 12 months after such
distribution, based upon Borrower's Budget delivered to CoBank pursuant to
Subsection 4.4(G), Borrower may declare or pay lawful distributions to its
shareholders (i) during each of the fiscal years ending December 31, 2006, 2007
and 2008, up to an aggregate amount of $20,000,000 during any such fiscal year
and (ii) during each fiscal year thereafter, up to an aggregate amount equal to
the higher of $20,000,000 or 100% of the net income of the immediately preceding
fiscal year; provided, further, however, that Borrower may (i) satisfy on a
non-cash basis the exercise of any stock option or similar award under a
stock-based compensation plan and (ii) may otherwise repurchase its issued and
outstanding stock in an aggregate amount not to exceed $20,000,000.
3.5 Restriction on Fundamental Changes. Borrower will not and will not
permit its Significant Subsidiaries directly or indirectly to: (i) unless and
only to the extent required by law, amend, modify or waive any term or provision
of its articles of organization, partnership agreement, operating agreement,
management agreements, articles of incorporation or certificates of designations
pertaining to preferred stock or by-laws without the consent of CoBank (which
consent shall not be unreasonably withheld), other than an amendment,
modification or waiver that is solely ministerial or administrative in nature or
the reincorporation of Borrower in the State of Delaware; provided, however,
Borrower shall promptly give CoBank notice of any such amendment, modification
or waiver; (ii) enter into any transaction of merger or consolidation or acquire
by purchase or otherwise all or any substantial part of the business or assets
of any other Person, except (a) any Subsidiary of Borrower may be merged with or
into Borrower or any wholly owned Subsidiary of Borrower provided that Borrower
or such wholly owned Subsidiary of Borrower is the surviving entity and (b)
Borrower or its Subsidiaries may consolidate or merge with or into any other
Person or acquire by purchase or otherwise all or any substantial part of the
business or assets of any other Person, provided that no Default or Event of
Default then exists or would result from such transaction, Borrower or such
Subsidiary is the surviving or continuing entity and the consideration for each
such transaction provided by Borrower (whether in the form of stock, cash or
other consideration) does not exceed $100,000,000 and such consideration for all
such transactions under this subclause (b) does not in the aggregate exceed
$200,000,000; or (iii) liquidate, wind-up or dissolve itself (or suffer any
liquidation or dissolution).
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3.6 Disposal of Assets or Significant Subsidiary Stock. Borrower will not,
and will not permit any of its Significant Subsidiaries to, directly or
indirectly, convey, sell (including, without limitation, pursuant to a sale and
leaseback transaction), lease (including, without limitation, pursuant to a
lease and leaseback transaction), sublease, transfer or otherwise dispose of, or
grant any Person an option to acquire, in one transaction or a series of
transactions, any of its property, business or assets, or the capital stock of
or other equity interests in any of its Significant Subsidiaries, except for (i)
bona fide sales or leases of inventory to customers in the ordinary course of
business, dispositions of equipment not used or useful in the business or
otherwise obsolete and any sale, conveyance, lease, sublease, transfer or other
disposition of assets of any of Borrower or its Subsidiaries to Borrower or any
wholly owned Subsidiary; (ii) fair market value sales of Cash Equivalents or
other Investments permitted by Section 3.3; (iii) leasing or subleasing of its
property in the ordinary course of business; (iv) other Asset Dispositions if
all of the following conditions are met: (a) the aggregate book value of such
assets sold in any one transaction or series of related transactions for any
12-month period does not exceed 20% of Consolidated Net Assets determined as of
the end of the immediately preceding fiscal year in the aggregate for Borrower
and its Significant Subsidiaries, (b) the consideration received by Borrower or
such Significant Subsidiary is at least equal to the fair market value of such
assets, (c) the sole consideration received is cash or other assets (other than
a note or other delayed payment transaction), (d) after giving effect to the
Asset Disposition, Borrower, on a combined and consolidated basis with its
Significant Subsidiaries as set forth in Section 4, are in compliance on a pro
forma basis with the covenants set forth in Section 4 recomputed for the most
recently ended fiscal quarter for which information is available and Borrower is
in compliance with all other terms and conditions contained in this Agreement,
and (e) no Default or Event of Default then exists or would result from the
Asset Disposition; (v) the sale by Borrower or any Significant Subsidiary of
property and the subsequent lease, as lessee, of the same property, within 180
days following the acquisition or construction of such property, in an aggregate
amount not to exceed $25,000,000; and (vi) an Asset Disposition if (a) the
aggregate Net Proceeds of such assets disposed of under this clause (vi) does
not exceed $100,000,000, (b) the consideration received is at least equal to the
fair market value of such assets, (c) the sole consideration received is cash or
other assets (other than a note or other delayed payment transaction), (d) no
Default or Event of Default then exists or would result from the Asset
Disposition, (e) after giving effect to the Asset Disposition, Borrower, on a
combined and consolidated basis with its Significant Subsidiaries as set forth
in Section 4, are in compliance on a pro forma basis with the covenants set
forth in Section 4 recomputed for the most recently ended fiscal quarter for
which information is available and Borrower is in compliance with all other
terms and conditions contained in this Agreement, and (f) the proceeds from any
sale under this clause (vi) are promptly used to repay the Term Loan pursuant to
Subsection 1.7(C), provided that if at the time of such disposition under this
clause (vi) Borrower's Leverage Ratio is less than or equal to 2.2:1.0 for a
disposition occurring on or before December 31, 2007 and less than or equal to
2.0:1.0 for a disposition occurring on or after January 1, 2008, Borrower may in
lieu of repaying the Term Loan apply such proceeds to the acquisition of fixed
assets or other property useful and intended to be used in the operation of the
business of Borrower is Significant Subsidiaries within 365 days of the date of
sale of such assets, any remaining unapplied proceeds after such 365 days to be
applied promptly to repay the Term Loan pursuant to Subsection 1.7(C).
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3.7 Transactions with Affiliates. Borrower will not and will not permit
its Significant Subsidiaries directly or indirectly to enter into or permit to
exist any transaction (including the purchase, sale, lease or exchange of any
property or the rendering of any service) with any Affiliate or with any
director, officer or employee of Borrower or any Affiliate, except (i) as set
forth on Schedule 3.8; (ii) transactions between Borrower or any wholly owned
Subsidiaries with Borrower or any wholly owned Subsidiaries; (iii) pursuant to
the reasonable requirements of the business of Borrower or such Subsidiary and
upon fair and reasonable terms and are no less favorable to Borrower or such
Subsidiary than would be obtained in a comparable arm's length transaction with
a Person that is not an Affiliate; or (iv) payment of compensation to directors,
officers and employees in the ordinary course of business for services actually
rendered in their capacities as directors, officers and employees, provided such
compensation is reasonable and comparable with compensation paid by companies of
like nature and similarly situated.
3.8 Conduct of Business. Borrower will not and will not permit its
Significant Subsidiaries directly or indirectly to engage in any business other
than businesses of owning, constructing, managing and operating
Telecommunications Systems, or other lines of business necessary to or ancillary
to the foregoing or consistent with advances in the Telecommunications Systems
industry.
3.9 Fiscal Year. Borrower will not and will not permit its Significant
Subsidiaries to change its or their fiscal year from a fiscal year ending on
December 31 of each year.
3.10 Inconsistent Agreements. Borrower will not, and will not permit any
of its Significant Subsidiaries to, enter into any agreement containing any
provision which would (a) be violated or breached by any borrowing by Borrower
hereunder or by the performance by Borrower or such Significant Subsidiary of
any of its obligations hereunder or under any other Loan Document, or (b) create
or permit to exist or become effective any encumbrance or restriction on the
ability of such Significant Subsidiary to (i) pay dividends or make other
distributions to Borrower or pay any Indebtedness owed to Borrower, (ii) make
loans or advances to Borrower or (iii) transfer any of its assets or properties
to Borrower, the effect of which encumbrance or restriction would reasonably be
to have a Material Adverse Effect; provided, however, that the foregoing shall
not apply to restrictions and conditions imposed by applicable governmental
rules or by this Agreement.
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SECTION 4
FINANCIAL COVENANTS AND REPORTING
Borrower covenants and agrees that so long as the Loan Commitments remain
in effect, or any Letter of Credit, any Loan, any interest on any Loan or any
fee payable to CoBank hereunder remains outstanding, or any other amount then
due and payable is owing to CoBank hereunder, and unless CoBank shall otherwise
give its prior written consent, Borrower shall perform and comply with, and
shall cause its Significant Subsidiaries to perform and comply with, all
covenants in this Section 4. For purposes of this Section 4, all covenants
calculated for Borrower shall be calculated on a consolidated basis for Borrower
and its Significant Subsidiaries.
4.1 Leverage Ratio. Borrower shall have at each fiscal quarter end a
Leverage Ratio less than or equal to 3.0:1.0.
4.2 Interest Coverage Ratio. Borrower shall have at each fiscal quarter
end an Interest Coverage Ratio greater than or equal to 3.0:1.0.
4.3 Net Worth. Borrower shall have at each fiscal quarter end an Adjusted
Consolidated Net Worth not less than $160,000,000.
4.4 Financial Statements and Other Reports. Borrower will and will cause
its Significant Subsidiaries to maintain a system of accounting established and
administered in accordance with sound business practices to permit preparation
of financial statements in conformity with GAAP (it being understood that
quarterly financial statements are not required to have footnote disclosures or
reflect year end adjustments). Borrower will deliver each of the financial
statements and other reports described below to CoBank.
(A) Quarterly Financials. As soon as available and in any event within
60 days after the end of each of the first three fiscal quarters of each fiscal
year, Borrower will deliver consolidated balance sheets of Borrower and its
Significant Subsidiaries, as at the end of such fiscal quarter, and the related
consolidated statements of income and cash flow for such fiscal quarter and for
the period from the beginning of the then current fiscal year of Borrower to the
end of such quarter; provided that delivery within the time period specified
above of copies of Borrower's Quarterly Report on Form 10-Q prepared in
compliance with the requirements therefore and filed with the Securities and
Exchange Commission (the "SEC") will be deemed to satisfy the requirements of
this Subsection 4.4(A).
(B) Year-End Financials. As soon as available and in any event within
105 days after the end of each fiscal year of Borrower, Borrower will deliver
(i) consolidated balance sheets of Borrower and its Significant Subsidiaries, as
at the end of such year, and the related consolidated statements of income,
stockholders' equity and cash flow for such fiscal year and (ii) a report with
respect to the financial statements from Ernst & Young LLP, or another firm of
certified public accountants selected by Borrower and reasonably acceptable to
CoBank, which report shall be prepared in accordance with Statement of Auditing
Standards No. 58 (the "Statement"), as amended, entitled "Reports on Audited
Financial Statements" and such report shall be "Unqualified" (as such term is
defined in such Statement) ; provided that delivery within the time period
specified above of copies of Borrower's Annual Report on Form 10-K prepared in
compliance with the requirements therefore and filed with the SEC will be deemed
to satisfy the requirements of this Subsection 4.4(B).
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(C) Borrower Compliance Certificate. Together with each delivery of
financial statements of Borrower and its Significant Subsidiaries pursuant to
Subsections 4.4(A) and 4.4(B), Borrower will deliver a fully and properly
completed compliance certificate in substantially the same form as Exhibit
4.4(C) (each, a "Compliance Certificate") signed by the chief financial officer
of Borrower.
(D) Budgets. As soon as available and in any event no later than 90
days prior to the first day of each of Borrower's fiscal years, Borrower will
deliver a final Budget of Borrower and its Significant Subsidiaries for such
fiscal year approved by Borrower's senior management and Board of Directors.
(E) SEC Filings. Promptly upon their becoming available, Borrower will
deliver copies of (i) all financial statements, reports, notices and proxy
statements sent or made available by Borrower or its Significant Subsidiaries to
its or their security holders and (ii) all regular and periodic reports and all
registration statements and prospectuses, if any, filed by Borrower or any of
its Significant Subsidiaries with any securities exchange or with the SEC or any
governmental or private regulatory authority, provided, that, such financial
statements and reports shall be deemed to have been delivered upon the filing of
such financial statements and reports by Borrower through the SEC's XXXXX system
or publication by Borrower of such financial statements and reports on its
website.
(F) Events of Default, Etc. Promptly upon any executive officer of
Borrower obtaining knowledge of any of the following events or conditions,
Borrower shall deliver copies of all notices given or received by Borrower or
any of its Significant Subsidiaries with respect to any such event or condition
and a certificate of Borrower's chief executive officer specifying the nature
and period of existence of such event or condition and what action Borrower has
taken, is taking and proposes to take with respect thereto: (i) any condition or
event that constitutes an Event of Default or Default; (ii) any notice that any
Person has given to Borrower or any of its Significant Subsidiaries or any other
action taken with respect to a claimed default or event or condition of the type
referred to in Subsection 6.1(B); or (iii) any event or condition that could
reasonably be expected to have a Material Adverse Effect.
(G) Litigation. Promptly upon any executive officer of Borrower
obtaining knowledge of (i) the institution of any action, suit, proceeding,
governmental investigation or arbitration against or affecting Borrower or any
of its Significant Subsidiaries not previously disclosed by Borrower to CoBank
which, in each case, could reasonably be expected to have a Material Adverse
Effect or (ii) any material development in any action, suit, proceeding,
governmental investigation or arbitration at any time pending against or
affecting Borrower or any of its Significant Subsidiaries which, in each case,
could reasonably be expected to have a Material Adverse Effect, Borrower will
give notice thereof to CoBank and provide such other information as may be
reasonably available to Borrower to enable CoBank and its counsel to evaluate
such matter.
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(H) Environmental Notices. Immediately after becoming aware of any
material violation by Borrower or any Signficant Subsidiary of Environmental
Laws or immediately upon receipt of any notice that a Governmental Authority has
asserted that Borrower or any Significant Subsidiary is not in material
compliance with Environmental Laws or that its compliance is being investigated,
which, in each case, could reasonably be expected to have a Material Adverse
Effect, Borrower will give notice to CoBank thereof and provide such other
information as may be reasonably available to Borrower to enable CoBank and its
counsel to reasonably evaluate such matter.
(I) ERISA Events. Promptly after becoming aware of any ERISA Event,
accompanied by any materials required to be filed with the PBGC with respect
thereto; promptly after any Borrower's or any of its Significant Subsidiaries'
receipt of any notice concerning the imposition of any withdrawal liability
under Section 4042 of ERISA with respect to a Plan; promptly upon the
establishment of any Pension Plan not existing at the Closing Date or the
commencement of contributions by any Borrower or any of its Significant
Subsidiaries to any Pension Plan to which any Borrower or any of its Significant
Subsidiaries was not contributing at the Closing Date; and promptly upon
becoming aware of any other event or condition regarding a Plan or any
Borrower's, or any of its Significant Subsidiaries' or an ERISA Affiliate's
compliance with ERISA which could reasonably be expected to have a Material
Adverse Effect, such Borrower will give notice to CoBank thereof and provide
such other information as may be reasonably available to such Borrower to enable
CoBank and its counsel to reasonably evaluate such matter.
(J) Other Information. With reasonable promptness, Borrower will
deliver such other information and data with respect to Borrower or any of its
Significant Subsidiaries as from time to time may be reasonably requested by
CoBank.
4.5 Accounting Terms; Utilization of GAAP for Purposes of Calculations
Under Agreement. For purposes of this Agreement, all accounting terms not
otherwise defined herein shall have the meanings assigned to such terms in
conformity with GAAP. Except as otherwise expressly provided, financial
statements and other information furnished to CoBank pursuant to this Agreement
shall be prepared in accordance with GAAP as in effect at the time of such
preparation. No "Accounting Changes" (as defined below) shall affect financial
covenants, standards or terms in this Agreement; provided that Borrower shall
prepare footnotes to each Compliance Certificate and the financial statements
required to be delivered hereunder that show the differences between the
financial statements delivered (which reflect such Accounting Changes) and the
basis for calculating financial covenant compliance (without reflecting such
Accounting Changes). "Accounting Changes" means: (i) changes in accounting
principles required by GAAP and implemented by Borrower; (ii) changes in
accounting principles recommended by Borrower's certified public accountants and
implemented by Borrower; and (iii) changes in the method of determining carrying
value of Borrower's or any of its Significant Subsidiaries' assets, liabilities
or equity accounts. All such adjustments resulting from expenditures made
subsequent to the Closing Date (including, but not limited to, capitalization of
costs and expenses or payment of pre-Closing Date liabilities) shall be treated
as expenses in the period the expenditures are made.
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SECTION 5
REPRESENTATIONS AND WARRANTIES
In order to induce CoBank to enter into this Agreement and to make Loans,
Borrower represents and warrants to CoBank on the Closing Date and on the date
of each request for a Loan or the issuance of a Letter of Credit that the
following statements are true, correct and complete:
5.1 Disclosure. The information furnished by or on behalf of Borrower and
its Significant Subsidiaries contained in this Agreement, the financial
statements referred to in Subsection 5.8 and any other document, certificate,
opinion or written statement furnished to CoBank pursuant to this Agreement or
any other Loan Document (other than projections), taken as a whole, does not
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements contained herein or therein not
misleading in light of the circumstances in which the same were made. Any
projections provided by or on behalf of Borrower and its Significant
Subsidiaries have been prepared by management in good faith and based upon
assumptions believed by management to be reasonable at the time the projections
were prepared. Borrower is not aware of any fact which it has not disclosed in
writing to CoBank having or which could reasonably be expect to have a Material
Adverse Effect.
5.2 No Material Adverse Effect. Since December 31, 2006, there has been no
event or change in facts or circumstances affecting Borrower or any of its
Significant Subsidiaries which individually or in the aggregate have had or
could reasonably be expected to have a Material Adverse Effect and that have not
been disclosed herein or in the attached Schedules.
5.3 Organization, Powers, Authorization and Good Standing.
(A) Organization and Powers. Each of Borrower and its Significant
Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization (which jurisdiction
is set forth on Schedule 5.3(A) as of the Closing Date). Each of Borrower and
its Significant Subsidiaries has all requisite legal power and authority to own
and operate its properties, to carry on its business as now conducted and
proposed to be conducted, to enter into each Loan Document to which it is a
party and to carry out its respective obligations with respect thereto.
(B) Authorization; Binding Obligation. Each of Borrower and its
Significant Subsidiaries has taken all necessary corporate and other action to
authorize the execution, delivery and performance of this Agreement and each of
the other Loan Documents to which it is a party. This Agreement is, and the
other Loan Documents when executed and delivered will be, the legally valid and
binding obligations of the applicable parties thereto (other than CoBank), each
enforceable against each of such parties, as applicable, in accordance with
their respective terms, except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar state or federal debt or
relief laws from time to time in effect which affect the enforcement of
creditors' rights in general and general principles of equity.
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(C) Qualification. Each of Borrower and its Significant Subsidiaries is
duly qualified and authorized to do business and in good standing in each
jurisdiction where the nature of its business and operations requires such
qualification and authorization, except where the failure to be so qualified,
authorized and in good standing could not reasonably be expected to have a
Material Adverse Effect. All jurisdictions in which each such Person is
qualified and authorized to do business are set forth on Schedule 5.3(C) as of
the Closing Date.
5.4 Compliance of Agreement, Loan Documents and Borrowings with Applicable
Law. Except as set forth on Schedule 5.4 hereto, the execution, delivery and
performance by Borrower and its Significant Subsidiaries of the Loan Documents
to which each is a party, the borrowings hereunder and the transactions
contemplated hereby and thereby do not and will not, by the passage of time, the
giving of notice or otherwise, (i) require any Governmental Approval or violate
any Applicable Law relating to Borrower or any of its Significant Subsidiaries,
the violation of which could reasonably be expected to have a Material Adverse
Effect, (ii) conflict with, result in a breach of or constitute a default under
the articles of incorporation, bylaws or other organizational documents of
Borrower or any of its Significant Subsidiaries, (iii) conflict with, result in
a breach of or constitute a default under any Material Contract to which such
Person is a party or by which any of its properties may be bound or any
Governmental Approval relating to such Person, the breach or default of which
could reasonably be expected to have a Material Adverse Effect, or (iv) result
in or require the creation or imposition of any Lien upon or with respect to any
property now owned or hereafter acquired by such Person, the creation or
imposition of which could reasonably be expected to have a Material Adverse
Effect.
5.5 Compliance with Law; Governmental Approvals. Each of Borrower and its
Significant Subsidiaries (i) has, or has the right to use, all material
Governmental Approvals, including the Licenses, required by any Applicable Law
for it to conduct its business and (ii) is in material compliance with each
Governmental Approval, including the Licenses, applicable to it and in
compliance with all other Applicable Laws relating to it or any of its
respective properties the violation of which could reasonably be expected to
have a Material Adverse Effect. Each such Governmental Approval is in full force
and effect, is final and not subject to review on appeal and is not the subject
of any pending or threatened attack by direct or collateral proceeding.
5.6 Tax Returns and Payments. Each of Borrower and its Significant
Subsidiaries has duly filed or caused to be filed, except as set forth on
Schedule 5.6, all federal, state, local and other tax returns required by
Applicable Law to be filed, and has paid, or made adequate provision for the
payment of, all federal, state, local and other taxes, assessments and
governmental charges or levies upon it and its property, income, profits and
assets which are due and payable, except where the payment of such tax is being
diligently contested in good faith and adequate reserves therefor have been
established in compliance with GAAP. The charges, accruals and reserves on the
books of Borrower and its Significant Subsidiaries in respect of federal, state,
local and other taxes for all fiscal years and portions thereof are in the
judgment of Borrower adequate.
5.7 Environmental Matters. Each of Borrower and its Significant
Subsidiaries is in compliance in all material respects with all applicable
Environmental Laws, and there is no contamination at, under or about the
properties or operations of Borrower and its Significant Subsidiaries, which
interfere in any material respect with the continued operation of such
properties or impair in any material respect the fair saleable value thereof or
with such operations, except for any such violations or contamination as could
not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
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5.8 Financial Statements.
(A) All financial statements concerning Borrower and its Significant
Subsidiaries which have been furnished to CoBank pursuant to this Agreement have
been prepared in accordance with GAAP consistently applied (except as disclosed
therein) and present fairly the financial condition of the Persons covered
thereby as of the date thereof and the results of their operations for the
periods covered thereby and disclose all material liabilities of Borrower or its
Significant Subsidiaries as at the dates thereof. Neither Borrower nor any of
its Significant Subsidiaries has outstanding, as of the Closing Date, and after
giving effect to the initial Loans hereunder on the Closing Date, any
Indebtedness for borrowed money other than (i) the Loans and (ii) the
Indebtedness permitted under Subsection 3.1.
(B) All Budgets concerning Borrower and its Significant Subsidiaries
which have been furnished to CoBank were prepared in good faith by or on behalf
of Borrower and such Significant Subsidiaries. No fact is known to Borrower
which materially and adversely affects or is reasonably expected to have a
Material Adverse Effect which has not been set forth in the financial statements
referred to in Subsection 5.8(A) or in such information, reports, papers and
data or otherwise disclosed in writing to CoBank prior to the date hereof.
5.9 Intellectual Property. Each of Borrower and its Significant
Subsidiaries owns, or possesses through valid licensing arrangements, the right
to use all patents, copyrights, trademarks, trade names, service marks,
technology know-how and processes used in or necessary for the conduct of its
business as currently or anticipated to be conducted (collectively, the
"Intellectual Property Rights"), to its knowledge, without infringing upon any
validly asserted rights of others, except for any Intellectual Property Rights
the absence of which could not reasonably be expected to have a Material Adverse
Effect. No event has occurred which permits, or after notice or lapse of time or
both would permit, the revocation or termination of any such rights the absence
of which could not reasonably be expected to have a Material Adverse Effect.
5.10 Litigation, Investigations, Audits, Etc. Except as set forth on
Schedule 5.10, there is no action, suit, proceeding or investigation pending
against, or, to the knowledge of Borrower, threatened against or in any other
manner relating adversely to, Borrower or any of its Significant Subsidiaries or
any of their respective properties, including the Licenses, in any court or
before any arbitrator of any kind or before or by any Governmental Authority
(including the FCC), except such as affect the telecommunications industry
generally which, in each case or in the aggregate, could reasonably be expected
to have a Material Adverse Effect. None of the actions, suits, proceedings or
investigations disclosed on Schedule 5.10 (i) calls into question the validity
of this Agreement or any other Loan Document, or (ii) individually or
collectively could reasonably be expected to result in a judgment or liability
not fully covered by insurance which, if determined adversely to Borrower or any
of its Significant Subsidiaries, could reasonably be expected to have a Material
Adverse Effect. Neither Borrower nor any of its Significant Subsidiaries is the
subject of any review or audit by the Internal Revenue Service or any
investigation by any Governmental Authority concerning the violation or possible
violation of any law.
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5.11 Employee Labor Matters. Except as set forth on Schedule 5.11, (i)
none of Borrower, its Significant Subsidiaries nor any of their respective
employees is subject to any collective bargaining agreement, (ii) no petition
for certification or union election is pending with respect to the employees of
any such Person and no union or collective bargaining unit has sought such
certification or recognition with respect to the employees of any such Person
and (iii) there are no strikes, slowdowns, unfair labor practice complaints,
work stoppages or controversies pending or, to the best knowledge of Borrower
after due inquiry, threatened between any such Person and its respective
employees, other than employee grievances arising in the ordinary course of
business which could not reasonably be expected to have, either individually or
in the aggregate, a Material Adverse Effect.
5.12 ERISA Compliance.
(A) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the IRC and other federal or state law. Borrower
and each ERISA Affiliate has made all required contributions to any Plan subject
to Section 412 of the IRC, and no application for a funding waiver or an
extension of any amortization period pursuant to Section 412 of the IRC has been
made with respect to any Plan.
(B) There are no pending or, to the best knowledge of Borrower,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan which has resulted or could reasonably be expected to
have a Material Adverse Effect. There has been no prohibited transaction or
violation of the fiduciary responsibility rules with respect to any Plan which
has resulted or could reasonably be expected to have a Material Adverse Effect.
(C) (i) No ERISA Event has occurred or is reasonably expected to occur;
(ii) no Pension Plan has any unfunded liability; (iii) neither Borrower nor any
ERISA Affiliate has incurred, or reasonably expects to incur, any liability
under Title IV of ERISA with respect to any Pension Plan (other than premiums
due and not delinquent under Section 4007 of ERISA); (iv) neither Borrower nor
any ERISA Affiliate has incurred, or reasonably expects to incur, any liability
(and no event has occurred which, with the giving of notice under Section 4219
of ERISA, would result in such liability) under Section 4201 or 4243 of ERISA
with respect to a Multi-employer Plan; and (v) neither Borrower nor any ERISA
Affiliate has engaged in a transaction that could subject any Person to Section
4069 or 4212(c) of ERISA.
5.13 Communications Regulatory Matters.
(A) The Licenses are valid and in full force and effect without
conditions except for such conditions as are generally applicable to holders of
such Licenses. No event has occurred and is continuing which could reasonably be
expected to (i) result in the imposition of a material forfeiture or the
revocation, termination or adverse modification of any such License or (ii)
materially and adversely affect any rights of Borrower or its Significant
Subsidiaries or any other holder thereunder. Borrower has no reason to believe
and has no knowledge that any License will not be renewed in the ordinary
course. Except as disclosed on Schedule 5.10, neither Borrower nor any of its
Significant Subsidiaries is a party to any investigation, notice of violation,
order or complaint issued by or before the FCC or any applicable Governmental
Authority, and there are no proceedings pending by or before the FCC or any
applicable Governmental Authority, which could in any manner threaten or
adversely affect the validity of any License.
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(B) All of the material properties, equipment and systems owned, leased
or managed by Borrower or its Significant Subsidiaries are, and (to the best
knowledge of Borrower) all such property, equipment and systems to be acquired
or added in connection with any contemplated system expansion or construction
will be, in good repair, working order and condition (reasonable wear and tear
excepted) and are and will be in material compliance with all terms and
conditions of the Licenses and all standards or rules imposed by any
Governmental Authority or as imposed under any agreements with telephone
companies and customers.
(C) Each of Borrower and its Significant Subsidiaries has paid all
material franchise, license or other fees and charges which have become due
pursuant to any Governmental Approval in respect of its business and has made
appropriate provision as is required by GAAP for any such material fees and
charges which have accrued.
5.14 Solvency. Each of Borrower and its Significant Subsidiaries: (i) owns
and will own assets the present fair saleable value of which are (a) greater
than the total amount of liabilities (including contingent liabilities) of
Borrower or its Significant Subsidiaries and (b) greater than the amount that
will be required to pay the probable liabilities of its then existing debts and
liabilities as they become absolute and matured considering all financing
alternatives and potential asset sales reasonably available to Borrower or such
Significant Subsidiary; (ii) has capital that is not unreasonably small in
relation to its business as presently conducted or after giving effect to any
contemplated transaction; and (iii) does not intend to incur and does not
believe that it will incur debts and liabilities beyond its ability to pay such
debts and liabilities as they become due.
5.15 Investment Company Act. None of Borrower or any of its Significant
Subsidiaries is an "investment company" as that term is defined in and is not
otherwise subject to regulation under, the Investment Company Act of 1940, as
amended.
5.16 Certain Agreements and Material Contracts. Each of Borrower and its
Significant Subsidiaries has performed all of its material obligations under all
loan agreements, indentures, guarantees, capital leases and Material Contracts
and, to the best knowledge of Borrower, each other party thereto is in
compliance with each such agreement or Material Contract. Each such agreement or
Material Contract is in full force and effect in accordance with the terms
thereof.
5.17 Title to Properties. Borrower and each of its Significant
Subsidiaries has such title or leasehold interest in and to the real property or
interests therein, including material easements, licenses and similar rights in
real estate, owned or leased by it as is necessary or desirable to the conduct
of its business and valid and legal title or leasehold interest in and to all of
its personal property, including those reflected on the balance sheets of
Borrower delivered pursuant to Subsection 5.8, except those which have been
disposed of by Borrower subsequent to such date which dispositions have been in
the ordinary course of business or as otherwise expressly permitted hereunder.
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5.18 Transactions with Affiliates. No Affiliate of Borrower is a party to
any agreement, contract, commitment or transaction with Borrower or has any
material interest in any material property used by Borrower, except as permitted
by Subsection 3.8.
5.19 OFAC. None of Borrower or its Significant Subsidiaries (i) is a
person whose property or interest in property is blocked or subject to blocking
pursuant to Section 1 of Executive Order 13224 of September 23, 2001 Blocking
Property and Prohibiting Transactions With Persons Who Commit, Threaten to
Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)), (ii) engages in any
dealings or transactions prohibited by Section 2 of such executive order, or is
otherwise associated with any such person in any manner violative of Section 2,
or (iii) is a person on the list of Specially Designated Nationals and Blocked
Persons or subject to the limitations or prohibitions under any other U.S.
Department of Treasury's Office of Foreign Assets Control regulation or
executive order.
5.20 Patriot Act. Each of Borrower and its Significant Subsidiaries is in
compliance, in all material respects, with the (i) Trading with the Enemy Act,
as amended, and each of the foreign assets control regulations of the United
States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any
other enabling legislation or executive order relating thereto, and (ii) Uniting
And Strengthening America By Providing Appropriate Tools Required To Intercept
And Obstruct Terrorism (USA Patriot Act of 2001). No part of the proceeds of the
Loans will be used, directly or indirectly, for any payments to any governmental
official or employee, political party, official of a political party, candidate
for political office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in violation
of the United States Foreign Corrupt Practices Act of 1977, as amended.
SECTION 6
EVENTS OF DEFAULT AND RIGHTS AND REMEDIES
6.1 Event of Default. "Event of Default" shall mean the occurrence or
existence of any one or more of the following:
(A) Payment. Failure to repay any outstanding amount of the Loans at
the time required pursuant to this Agreement, or to reimburse CoBank for any
payment made by CoBank under or with respect to any Letter of Credit when due,
or failure to pay, within five days after the due date, any interest on any Loan
or failure to pay, within five days after receipt by Borrower of notice from
CoBank, any other amount due under this Agreement or any of the other Loan
Documents; or
(B) Default in Other Agreements. (i) Failure of Borrower or any of its
Significant Subsidiaries to pay when due or within any applicable grace period
any principal or interest on Indebtedness (other than the Loans) in excess of
$5,000,000 or (ii) any other breach or default of Borrower or any of its
Significant Subsidiaries with respect to the Note Purchase Agreement, any
Indebtedness (other than the Loans), if the effect of such breach or default is
to cause or to permit the holder or holders then to cause such Indebtedness
having an aggregate principal amount for Borrower and its Significant
Subsidiaries in excess of $5,000,000 to become or be declared due prior to its
stated maturity; or
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(C) Breach of Certain Provisions. Failure of Borrower or any of its
Significant Subsidiaries to perform or comply with any term or condition
contained in that portion of Subsection 2.2 relating to Borrower's or any of its
Significant Subsidiaries' obligation to maintain insurance, Subsection 2.4,
Section 3 or Section 4; or
(D) Breach of Warranty. Any representation, warranty, certification or
other statement made by Borrower or any of its Significant Subsidiaries in any
Loan Document or in any statement or certificate at any time given by Borrower
or any of its Significant Subsidiaries in writing pursuant to any Loan Document
is false in any material respect on the date made or deemed made; or
(E) Other Defaults Under Loan Documents. Borrower, any of its
Significant Subsidiaries or any other party (other than CoBank) breaches or
defaults in the performance of or compliance with any term contained in this
Agreement or the other Loan Documents and such default is not remedied or waived
within 30 days after receipt by Borrower, any such Significant Subsidiary or
such other party of notice from CoBank of such default (other than occurrences
described in other provisions of this Subsection 6.1 for which a different grace
or cure period is specified or which constitute immediate Events of Default); or
(F) Involuntary Bankruptcy; Appointment of Receiver; Etc. (i) A court
enters a decree or order for relief with respect to Borrower or any of its
Significant Subsidiaries in an involuntary case under the Bankruptcy Code, which
decree or order is not stayed or other similar relief is not granted under any
applicable federal or state law within 60 days; or (ii) the continuance of any
of the following events for 60 days unless dismissed, bonded or discharged: (a)
an involuntary case is commenced against Borrower or any of its Significant
Subsidiaries, under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect; or (b) a decree or order of a court for the
appointment of a receiver, liquidator, sequestrator, trustee, custodian or other
officer having similar powers over Borrower or any of its Significant
Subsidiaries, or over all or a substantial part of its property, is entered; or
(c) an interim receiver, trustee or other custodian is appointed without the
consent of Borrower or any of its Significant Subsidiaries, for all or a
substantial part of the property of Borrower or any of its Significant
Subsidiaries; or
(G) Voluntary Bankruptcy; Appointment of Receiver; Etc. Borrower or any
of its Significant Subsidiaries (i) commences a voluntary case under the
Bankruptcy Code, files a petition seeking to take advantage of any other law
relating to bankruptcy, insolvency, reorganization, winding up or composition
for adjustment of debts of Borrower or any of its Significant Subsidiaries, or
consents to, or fails to contest in a timely and appropriate manner, the entry
of an order for relief in an involuntary case, the conversion of an involuntary
case to a voluntary case under any such law, or the appointment of or taking
possession by a receiver, trustee or other custodian of all or a substantial
part of the property of Borrower or any of its Significant Subsidiaries; or (ii)
makes any assignment for the benefit of creditors; or (iii) the Board of
Directors or the shareholders of Borrower or any of its Significant Subsidiaries
adopts any resolution or otherwise authorizes action to approve any of the
actions referred to in this Subsection 6.1(G); or
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(H) Judgment and Attachments. Any money judgment, writ or warrant of
attachment or similar process involving an amount in any individual case or in
the aggregate for Borrower and its Significant Subsidiaries at any time in
excess of $5,000,000 (in either case not adequately covered by insurance as to
which the insurance company has not denied coverage) is entered or filed against
Borrower or any of its Significant Subsidiaries or any of their respective
assets and remains undischarged, unvacated, unbonded or unstayed for a period of
60 days or in any event later than five Business Days prior to the date of any
proposed sale thereunder; or
(I) Dissolution. Any order, judgment or decree is entered against
Borrower or any of its Significant Subsidiaries decreeing the dissolution or
split up of Borrower or any of its Significant Subsidiaries and such order
remains undischarged or unstayed for a period in excess of 15 days; or
(J) Solvency. Borrower or any of its Significant Subsidiaries ceases to
be solvent or Borrower or any of its Significant Subsidiaries admits in writing
its present or prospective inability to pay its debts as they become due; or
(K) Injunction. Borrower or any of its Significant Subsidiaries is
enjoined, restrained or in any way prevented by the order of any court or any
Governmental Authority from conducting all of its business or otherwise for more
than 60 days to the extent that the results of such injunction or restraint
could reasonably be expected to have a Material Adeverse Effect; or
(L) ERISA; Pension Plans. (i) Borrower or any of its Significant
Subsidiaries fails to make full payment when due of all amounts which, under the
provisions of any employee benefit plans or any applicable provisions of the
IRC, any such Person is required to pay as contributions thereto and such
failure results in or could reasonably be expected to have a Material Adverse
Effect; or (ii) an accumulated funding deficiency occurs or exists, whether or
not waived, with respect to any such employee benefit plans and such accumulated
funding deficiency results in or could reasonably be expected to have a Material
Adverse Effect; or (iii) any employee benefit plan of Borrower or any of its
Significant Subsidiaries loses its status as a qualified plan under the IRC and
such loss results in or could reasonably be expected to have a Material Adverse
Effect; or
(M) Invalidity of Loan Documents. Any of the Loan Documents for any
reason, other than a partial or full release in accordance with the terms
thereof, ceases to be in full force and effect or is declared to be null and
void and Borrower or any applicable Significant Subsidiary fails to promptly
correct such cessation or declaration, or Borrower or any of its Significant
Subsidiaries denies that it has any further liability under any Loan Documents
to which it is party, or gives notice to such effect; or
(N) Licenses and Permits. The loss, suspension or revocation of, or
failure to renew, any license or permit, including any License, now held or
hereafter acquired by Borrower or any of its Significant Subsidiaries, if such
loss, suspension, revocation or failure to renew could reasonably be expected to
have a Material Adverse Effect; or
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(O) Change in Control. Any Person acquires or beneficially owns,
directly or indirectly, and controls at least 35% of the voting equity in
Borrower.
6.2 Suspension of Commitments. Upon the occurrence and during the
continuation of any Default or Event of Default, CoBank, without notice or
demand, may immediately cease making additional Loans and issuing Letters of
Credit and cause its obligation to lend under the Loan Commitments to be
suspended; provided that, in the case of a Default, if the subject condition or
event is cured, or waived by CoBank, within any applicable grace or cure period,
any suspended portion of the Loan Commitments shall be reinstated.
6.3 Acceleration. Upon the occurrence of any Event of Default described in
the foregoing Subsections 6.1(F) or 6.1(G), the unpaid principal amount of and
accrued interest and fees on the Loans, payments under the Letters of Credit and
all other Obligations shall automatically become immediately due and payable,
without presentment, demand, protest, notice of intent to accelerate, notice of
acceleration or other requirements of any kind, all of which are hereby
expressly waived by Borrower, and the obligations of CoBank to make Loans and
issue Letters of Credit shall thereupon terminate. Upon the occurrence and
during the continuance of any other Event of Default, CoBank may by written
notice to Borrower declare all or any portion of the Loans, all or any Letter of
Credit and all or some of the other Obligations to be, and the same shall
forthwith become, immediately due and payable together with accrued interest
thereon, and upon such acceleration the obligations of CoBank to make Loans and
issue Letters of Credit shall thereupon terminate and Borrower shall immediately
comply with the provisions of Subsection 1.15.
6.4 Rights of Collection. Upon the occurrence and during the continuation
of any Event of Default and at any time thereafter, unless and until such Event
of Default is cured or waived by CoBank, CoBank may exercise all of its rights
and remedies under this Agreement, the other Loan Documents and Applicable Law,
in order to satisfy all of the Obligations.
6.5 Consents. Borrower acknowledges that certain transactions contemplated
by this Agreement and the other Loan Documents and certain actions which may be
taken by CoBank in the exercise of its rights under this Agreement and the other
Loan Documents may require the consent of a Governmental Authority. If counsel
to CoBank reasonably determines that the consent of a Governmental Authority is
required in connection with the execution, delivery and performance of any of
the aforesaid Loan Documents or any Loan Documents delivered to CoBank in
connection therewith or as a result of any action which may be taken pursuant
thereto, then Borrower, at Borrower's sole cost and expense, agrees to use its
reasonable efforts, and to cause its Significant Subsidiaries to use their
reasonable best efforts, to secure such consent and to cooperate with CoBank in
any action commenced by CoBank or CoBank to secure such consent.
6.6 Performance by CoBank. If Borrower shall fail to perform any covenant,
duty or agreement contained in any of the Loan Documents, CoBank may perform or
attempt to perform such covenant, duty or agreement on behalf of Borrower after
the expiration of any cure or grace periods set forth herein, subject to
Applicable Law. In such event, Borrower shall, at the request of CoBank,
promptly pay any amount reasonably expended by CoBank in such performance or
attempted performance to CoBank, together with interest thereon at the highest
rate of interest in effect upon the occurrence of an Event of Default as
specified in Subsection 1.2(E) from the date of such expenditure until paid.
Notwithstanding the foregoing, it is expressly agreed that CoBank shall not have
any liability or responsibility for the performance of any obligation of
Borrower under this Agreement or any other Loan Document.
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6.7 Set Off and Sharing of Payments. In addition to any rights now or
hereafter granted under applicable law and not by way of limitation of any such
rights, during the continuance of any Event of Default, CoBank is hereby
authorized by Borrower at any time or from time to time, with reasonably prompt
subsequent notice to Borrower (any prior or contemporaneous notice being hereby
expressly waived) to set off and to appropriate and to apply against and on
account of any of the Obligations any and all (A) balances held by CoBank at any
of its offices for the account of Borrower or any of its Significant
Subsidiaries (regardless of whether such balances are then due to Borrower or
any of its Significant Subsidiaries), and (B) all other property at any time
held or owing by CoBank to or for the credit or for the account of Borrower or
any of its Significant Subsidiaries.
SECTION 7
CONDITIONS TO LOANS
The obligations of CoBank to make Loans are subject to satisfaction of all
of the applicable conditions set forth below.
7.1 Conditions to Effectiveness of this Agreement. The effectiveness of
this Agreement, and the amendments set forth herein, are subject to the
satisfaction of each of the following conditions:
(A) Executed Loan and Other Documents. (i) This Agreement, (ii) the
Notes and (iii) all other documents and instruments contemplated by such
agreements, shall have been duly authorized and executed by Borrower or other
Person, as applicable, in form and substance satisfactory to CoBank, and
Borrower or such other Person, as applicable, shall have delivered original
counterparts thereof to CoBank.
(B) Closing Certificates; Opinions.
(1) Officers' Certificate. CoBank shall have received a certificate
from the chief executive officer and vice president, treasuer of Borrower, in
form and substance reasonably satisfactory to CoBank, to the effect that, to
their knowledge after reasonable diligence, all representations and warranties
of Borrower and its Significant Subsidiaries contained in this Agreement and the
other Loan Documents are true, correct and complete in all material respects on
and as of the date thereof; that neither Borrower nor any of its Significant
Subsidiaries is in violation of any of the covenants contained in this Agreement
and the other Loan Documents; that, after giving effect to the transactions
contemplated by this Agreement, no Default or Event of Default has occurred and
is continuing; and that Borrower has satisfied each of the closing conditions to
be satisfied hereby.
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(2) Certificate of Secretary of Borrower. CoBank shall have received
a certificate of the secretary or assistant secretary of Borrower certifying
that attached thereto is a true and complete copy of its articles of
incorporation, and all amendments thereto, certified as of a recent date by the
Secretary of State of the state of its organization; that attached thereto is a
true and complete copy of its bylaws as in effect on the date of such
certification; that attached thereto is a true and complete copy of resolution
of its Board of Directors authorizing the borrowings contemplated hereunder, and
the execution, delivery and performance of this Agreement and the other Loan
Documents; and as to the incumbency and genuineness of the signature of each of
its officers executing Loan Documents.
(3) Certificates of Good Standing. CoBank shall have received
certificates as of a recent date of the good standing of Borrower under the laws
of its jurisdiction of organization and such other jurisdictions as are
requested by CoBank.
(4) Opinion of Counsel. CoBank shall have received a favorable
opinion of counsel to Borrower addressed to CoBank with respect to Borrower and
the Loan Documents reasonably satisfactory in form and substance to CoBank.
(C) Consents.
(1) Governmental and Third Party Approvals. Borrower shall have
delivered to CoBank all necessary material approvals, authorizations and
consents, if any, of all Persons, Governmental Authorities, including the FCC
and all applicable PUCs, and courts having jurisdiction with respect to the
execution and delivery of this Agreement and the other Loan Documents, and all
such approvals shall be in form and substance satisfactory to CoBank.
(2) No Injunction, Etc. No action, proceeding, investigation,
regulation or legislation shall have been instituted, threatened or proposed
before, nor any adverse ruling received from, any Governmental Authority to
enjoin, restrain or prohibit, or to obtain substantial damages in respect of, or
which is related to or arises out of this Agreement or the other Loan Documents
or the consummation of the transactions contemplated hereby or thereby, or
which, as determined by CoBank in its reasonable discretion, would make it
inadvisable to consummate the transactions contemplated by this Agreement and
such other Loan Documents.
(D) Fees, Expenses, Taxes, Etc. There shall have been paid by Borrower
to CoBank the fees set forth or referenced in Subsection 1.4 and any other
accrued and unpaid fees or commissions due hereunder (including legal fees and
expenses), and to any other Person such amount as may be due thereto in
connection with the transactions contemplated hereby, including all taxes, fees
and other charges in connection with the execution, delivery, recording, filing
and registration of any of the Loan Documents.
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(E) Miscellaneous.
(1) Proceedings and Documents. All opinions, certificates and other
instruments and all proceedings in connection with the transactions contemplated
by this Agreement shall be reasonably satisfactory in form and substance to
CoBank. CoBank shall have received copies of all other instruments and other
evidence as CoBank may reasonably request, in form and substance reasonably
satisfactory to CoBank, with respect to the transactions contemplated by this
Agreement and the taking of all actions in connection therewith.
(2) Litigation, Investigations, Audits, Etc. There is no action,
suit, proceeding or investigation pending against, or, to the knowledge of
Borrower after due inquiry, threatened against or in any other manner relating
adversely to, Borrower or any of its Significant Subsidiaries or any of their
respective properties, including the Licenses, in any court or before any
arbitrator of any kind or before or by any Governmental Authority (including the
FCC), except such as affect the telecommunications industry generally, that
would reasonably be expected to have a Material Adverse Effect.
7.2 Conditions to All Loans. The obligations of CoBank to make Loans,
including the initial Loan, and of CoBank to issue Letters of Credit, including
the initial Letter of Credit, on any date (each such date a "Funding Date"), are
subject to the further conditions precedent set forth below.
(A) CoBank shall have received, in accordance with the provisions of
Subsection 1.3, a Notice of Borrowing requesting an advance of a Loan or such
notice as CoBank shall require for the issuance of a Letter of Credit.
(B) The representations and warranties contained in Section 5 of this
Agreement and elsewhere herein and in the Loan Documents shall be (and each
request by Borrower for a Loan or a Letter of Credit shall constitute a
representation and warranty by Borrower that such representations and warranties
are) true, correct and complete in all material respects on and as of such
Funding Date to the same extent as though made on and as of that date, except
for any representation or warranty limited by its terms to a specific date and
taking into account any amendments to the Schedules or Exhibits as a result of
any disclosures made in writing by Borrower to CoBank after the Closing Date so
long as what is being disclosed does not give rise to a Default or an Event of
Default.
(C) No event shall have occurred and be continuing or would result from
the consummation of the borrowing or issuance contemplated that would constitute
an Event of Default or a Default.
(D) No order, judgment or decree of any court, arbitrator or
Governmental Authority shall purport to enjoin or restrain CoBank from making
any Loan or issuing any Letter of Credit.
(E) Since December 31, 2006, there shall not have occurred any event or
condition that has had or could reasonably be expected to have a Material
Adverse Effect.
(F) All Loan Documents shall be in full force and effect.
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SECTION 8
ASSIGNMENT AND PARTICIPATION
This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns except that Borrower may not
assign its rights or obligations hereunder without the written consent of
CoBank. CoBank may assign its rights and delegate its obligations under this
Agreement to one or more Persons, with the written consent of Borrower other
than during the continuance of a Default or an Event of Default, such consent
not to be unreasonably withheld, except in the case of an assignment to an
affiliate of CoBank. CoBank may sell participations in all or any part of its
obligations and rights under this Agreement to one or more Persons; provided
that CoBank's obligations under this Agreement shall remain unchanged; Borrower
shall continue to deal solely and directly with CoBank in connection with
CoBank's rights and obligations under this Agreement; all amounts payable by
Borrower hereunder shall be determined as if CoBank had not sold such
participation; and the holder of any such participation shall not be entitled to
require CoBank to take or omit to take any action hereunder except action
directly affecting (i) any reduction, modification or forgiveness in the
principal amount, interest rate or fees payable with respect to any Loan; (ii)
any extension of the Term Loan Availability Expiration Date, the Term Loan
Maturity Date, the Revolving Loan Expiration Date, or any change of any date
fixed for any payment of any of the Obligations; and (iii) any consent to the
assignment, delegation or other transfer by Borrower or any of its Significant
Subsidiaries of any of its rights and obligations under any Loan Document.
Borrower hereby acknowledges and agrees that any participation will give rise to
a direct obligation of Borrower to the participant, and the participant shall
have direct rights for purposes of Subsections 1.11, 1.12, 1.13, 6.7 and 9.1.
However, a participant shall not be entitled to receive any greater payment
under Subsections 1.11, 1.12, 1.13, 6.7 and 9.1 than CoBank would have been
entitled to receive with respect to the participation sold to such participant,
unless the participation is made with Borrower's prior written consent to such
greater payments. CoBank may furnish any information concerning Borrower and its
Significant Subsidiaries in the possession of CoBank from time to time to
assignees and participants (including prospective assignees and participants),
subject to the provisions of Subsection 9.10. CoBank reserves the right to
assign or sell participations in all or any part of its obligations and rights
under this Agreement on a non-patronage basis.
SECTION 9
MISCELLANEOUS
9.1 Indemnities. Borrower agrees to indemnify, pay, and hold CoBank and
its respective officers, directors, employees, agents, and attorneys (the
"Indemnitees") harmless from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits and claims of any kind or
nature whatsoever that may be imposed on, incurred by, or asserted against the
Indemnitee as a result of its being a party to this Agreement; provided, that
Borrower shall have no obligation to an Indemnitee hereunder with respect to
liabilities arising from the negligence or willful misconduct of that Indemnitee
as determined by a court of competent jurisdiction. This Subsection 9.1 and all
indemnification provisions contained within any other Loan Document shall
survive the termination of this Agreement.
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9.2 Amendments and Waivers. Except as otherwise provided herein, no
amendment, modification, termination or waiver of any provision of this
Agreement, the Notes or any of the other Loan Documents, or consent to any
departure by Borrower therefrom, shall in any event be effective unless the same
shall be in writing and signed by Borrower and CoBank. Each amendment,
modification, termination or waiver shall be effective only in the specific
instance and for the specific purpose for which it was given. No notice to or
demand on Borrower in any case shall entitle Borrower to any other or further
notice or demand in similar or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with this Subsection 9.2
shall be binding upon each holder of the Notes at the time outstanding, each
future holder of the Notes, and, if signed by Borrower, on Borrower.
9.3 Notices. Any required notice or other communication shall be in
writing addressed to the respective party as set forth below and may be
personally delivered, telecopied, sent by overnight courier service or U.S. mail
and shall be deemed to have been given: (i) if delivered in person, when
delivered; (ii) if delivered by telecopy, on the date of confirmed transmission
if transmitted on a Business Day before 2:00 p.m. (Denver, Colorado time) and
otherwise on the Business Day next succeeding the date of transmission; (c) if
delivered by overnight courier, two days after delivery to the courier properly
addressed; or (d) if delivered by U.S. mail, four Business Days after deposit
with postage prepaid and properly addressed.
Notices shall be addressed as follows:
If to Borrower: SureWest Communications
000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Chief Financial Officer
Fax: (000) 000-0000
If to CoBank: CoBank, ACB
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attn: Communications & Energy Banking Group
Fax: (000) 000-0000
9.4 Failure or Indulgence Not Waiver; Remedies Cumulative. No failure or
delay on the part of CoBank to exercise, nor any partial exercise of, any power,
right or privilege hereunder or under any other Loan Documents shall impair such
power, right, or privilege or be construed to be a waiver of any Default or
Event of Default. All rights and remedies existing hereunder or under any other
Loan Document are cumulative to and not exclusive of any rights or remedies
otherwise available.
9.5 Severability. The invalidity, illegality, or unenforceability in any
jurisdiction of any provision under the Loan Documents shall not affect or
impair the remaining provisions in the Loan Documents or any such invalid,
unenforceable or illegal provision in any jurisdiction in which it is not
invalid, unenforceable or illegal.
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9.6 Headings. Section and Subsection headings are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purposes or be given substantive effect.
9.7 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
COLORADO WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THAT WOULD REQUIRE OR
PERMIT APPLICATION OF THE LAWS OF ANY OTHER STATE OR JURISDICTION.
9.8 No Fiduciary Relationship. No provision in the Loan Documents and no
course of dealing between the parties shall be deemed to create any fiduciary
duty owing to Borrower by CoBank.
9.9 Construction. CoBank and Borrower acknowledge that each of them has
had the benefit of legal counsel of its own choice and has been afforded an
opportunity to review the Loan Documents with its legal counsel and that the
Loan Documents shall be constructed as if jointly drafted by CoBank and
Borrower.
9.10 Confidentiality. CoBank agrees to hold any confidential information
that it may receive from Borrower or any of its Subsidiaries pursuant to this
Agreement in confidence, except for disclosure: (i) on a confidential basis, as
necessary or appropriate, to directors, officers, employees, agents or legal
counsel, independent public accountants and other professional advisors of
CoBank; (ii) to regulatory officials having jurisdiction over CoBank; (iii) as
required by Applicable Law or legal process or (iv) in connection with any legal
proceeding between CoBank and Borrower (provided that, in the event CoBank is so
required to disclose such confidential information pursuant to clauses (iii) or
(iv) of this Subsection 9.10, CoBank shall promptly notify Borrower, so that
Borrower or any of its Subsidiaries may seek, at its sole cost and expense, a
protective order or other appropriate remedy); and (v) to another Person in
connection with a disposition or proposed disposition to that Person of all or
part of CoBank's interests hereunder or a participation interest, provided that
such disclosure is made subject to an appropriate confidentiality agreement on
terms substantially similar to this Subsection 9.10. For purposes of the
foregoing, "confidential information" shall mean all information respecting
Borrower or any of its Subsidiaries, other than (A) information previously filed
by Borrower or any of its Subsidiaries with any Governmental Authority and
available to the public, (B) information previously published in any public
medium from a source other than, directly or indirectly, CoBank and (C)
information obtained by CoBank from a source independent of Borrower or its
Subsidiaries.
9.11 Consent to Jurisdiction and Service of Process. (A) BORROWER HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL COURT OR COLORADO STATE COURT IN THE STATE OF COLORADO HAVING SUBJECT
MATTER JURISDICTION OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
ANY LOAN DOCUMENTS. BORROWER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN
RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO
THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT,
PERSONAL JURISDICTION OF ANY SUCH COURT OR THAT SUCH COURT IS AN INCONVENIENT
FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF COBANK TO BRING PROCEEDINGS
AGAINST BORROWER IN THE COURTS OF ANY OTHER JURISDICTION.
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(B) BORROWER HEREBY AGREES THAT SERVICE OF THE SUMMONS AND COMPLAINT AND
ALL OTHER PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING MAY
BE EFFECTED BY MAILING BY REGISTERED MAIL, RETURN RECEIPT REQUESTED, A COPY OF
SUCH PROCESS TO BORROWER AT THE ADDRESS TO WHICH NOTICES TO BORROWER ARE THEN TO
BE SENT PURSUANT TO SUBSECTION 9.3 AND THAT PERSONAL SERVICE OF PROCESS SHALL
NOT BE REQUIRED. NOTHING HEREIN SHALL BE CONSTRUED TO PROHIBIT SERVICE OF
PROCESS BY ANY OTHER METHOD PERMITTED BY LAW.
9.12 Waiver of Jury Trial. BORROWER AND COBANK EACH HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT, ANY OF THE OTHER LOAN DOCUMENTS, OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION AND THE
LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. THE SCOPE OF THIS WAIVER
IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN
ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING
WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW AND STATUTORY CLAIMS. BORROWER AND COBANK EACH ACKNOWLEDGE THAT
THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT
EACH HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT
EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS.
BORROWER AND COBANK EACH FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED
THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY
WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS
WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN
WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THE LOAN DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR
AGREEMENTS RELATING TO THE LOANS. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY
BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT. BORROWER AND COBANK ALSO
EACH WAIVE ANY BOND OR SURETY OR SECURITY UPON SUCH BOND WHICH MIGHT, BUT FOR
THIS WAIVER, BE REQUIRED OF COBANK.
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9.13 Survival of Warranties and Certain Agreements. All agreements,
representations and warranties made herein shall survive the execution and
delivery of this Agreement, the making of the Loans, the issuances of Letters of
Credit and the execution and delivery of the Notes. Notwithstanding anything in
this Agreement or implied by law to the contrary, the agreements of Borrower set
forth in Subsections 1.4(D), 1.11, 1.12, 1.13, 9.1, 9.11 and 9.12 shall survive
the payment of the Loans, the payment of the Letter of Credit Liabilities and
the termination of this Agreement.
9.14 Entire Agreement. This Agreement, the Notes and the other Loan
Documents referred to herein embody the final, entire agreement among the
parties hereto and supersede any and all prior commitments, agreements,
representations, understandings, whether oral or written, relating to the
subject matter hereof and may not be contradicted or varied by evidence of
prior, contemporaneous or subsequent oral agreements or discussions of the
parties hereto.
9.15 Counterparts; Effectiveness. This Agreement and any amendments,
waivers, consents or supplements may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all of which
counterparts together shall constitute but one and the same instrument. This
Agreement shall become effective upon the execution of a counterpart hereof by
each of the parties hereto.
9.16 Patriot Act. CoBank notifies Borrower and its Subsidiaries that
pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)) (the "Patriot Act"), it is required to
obtain, verify and record information that identifies each of Borrower and its
Subsidiaries, which information includes the name and address of such entity and
other information that will allow CoBank to identify such in accordance with the
Patriot Act. Each of Borrower and its Subsidiaries shall provide to the extent
commercially reasonable, such information and take such other actions as are
reasonably requested by CoBank in order to assist CoBank in maintaining
compliance with the Patriot Act.
9.17 Effectiveness of Amendment and Restatement; No Novation. The
amendment and restatement of the Existing Credit Agreement pursuant to this
Agreement shall be effective as of the Amendment Date. All obligations and
rights of Borrower and its Significant Subsidiaries and CoBank arising out of or
relating to the period commencing on the Amendment Date shall be governed by the
terms and provisions of this Agreement; the obligations of and rights of
Borrower and its Significant Subsidiaries and CoBank arising out of or relating
to the period prior to the Amendment Date shall continue to be governed by the
Existing Credit Agreement without giving effect to the amendment and
restatements provided for herein. This Agreement shall not constitute a novation
or termination of Borrower's or any of its Significant Subsidiary's obligations
under the Existing Credit Agreement or any document, note or agreement executed
or delivered in connection therewith, but shall constitute an amendment and
restatement of the obligations and covenants of Borrower and its Significant
Subsidiaries under the such documents, notes and agreements, and each Borrower
and its Significant Subsidiaries hereby reaffirms all such obligations and
covenants, as amended and restated hereby.
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SECTION 10
DEFINITIONS
10.1 Certain Defined Terms. The terms defined below are used in this
Agreement as so defined. Terms defined in the preamble and recitals to this
Agreement are used in this Agreement as so defined.
"Acquired Indebtedness" shall mean Indebtedness of a Person or any of its
Subsidiaries existing at the time such Person becomes a Subsidiary or at the
time it merges or consolidates with or into Borrower or any of its Subsidiaries
or assumed in connection with the acquisition of assets from such Person and in
each case not incurred by such Person in connection with, or in anticipation or
contemplation of, such Person becoming a party to the Credit Agreement or such
acquisition, merger or consolidation and which Indebtedness is without recourse
to Borrower or any Subsidiary or to any of their respective properties or assets
other than the Person or the assets to which such Indebtedness related prior to
the time such Person became a Subsidiary or the time of such acquisition, merger
or consolidation. Acquired Indebtedness shall not include any Indebtedness that
refinances or replaces any Acquired Indebtedness.
"Adjusted Consolidated Net Worth" means, as of any date of determination,
the result of (i) Consolidated Net Worth minus (ii) the sum of Restricted
Investments incurred after December 9, 1998 in excess of 10% of Consolidated Net
Worth, all as of the such date of determination.
"Adjustment Date" means each date which is the fifth (5th) Business Day
after the receipt by CoBank of (i) each Compliance Certificate delivered by
Borrower pursuant to Subsection 4.4(C) and (ii) in the case a decrease in an
applicable margin is warranted, a written notice from Borrower to decrease such
margin.
"Affiliate" means any Person: (i) directly or indirectly controlling,
controlled by, or under common control with, Borrower or any of its
Subsidiaries; (ii) directly or indirectly owning or holding five percent (5%) or
more of any equity interest in Borrower or any of its Subsidiaries; or (iii)
five percent (5%) or more of whose voting stock or other equity interest is
directly or indirectly owned or held by Borrower or any of its Subsidiaries. For
purposes of this definition, "control" (including with correlative meanings, the
terms "controlling," "controlled by" and "under common control with") means the
possession directly or indirectly of the power to direct or cause the direction
of the management and policies of a Person, whether through the ownership of
voting securities or by contract or otherwise.
"Amendment Date" means the date hereof.
"Applicable Law" means, in respect of any Person, all provisions of
constitutions, statutes, rules, regulations and orders of governmental bodies or
regulatory agencies applicable to such Person, including the Licenses, the
Communications Act and all Environmental Laws, and all orders, decisions,
judgments and decrees of all courts and arbitrators in proceedings or actions to
which the Person in question is a party or by which it is bound.
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"Asset Disposition" means the disposition, whether by sale, lease,
transfer, loss, damage, destruction, condemnation or otherwise, by Borrower or
any of its Subsidiaries, of any of the following: (i) any of the capital stock
or the ownership interests of any of its Subsidiaries, or (ii) any or all of its
assets.
"Banking Day" means a day on which CoBank is open for business, dealings
in U.S. dollar deposits are being carried out in the London interbank market,
and banks are open for business in New York City and London, England.
"Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy," as amended from time to time or any applicable bankruptcy,
insolvency or other similar federal or state law now or hereafter in effect and
all rules and regulations promulgated thereunder.
"Base Rate" means a variable rate of interest per annum equal, on any day,
to the rate of interest established by CoBank from time to time as its CoBank
Base Rate, which rate is intended by CoBank to be a reference rate and not its
lowest rate. The CoBank Base Rate will change on the date established by CoBank
as the effective date of any change thereof.
"Base Rate Loan" means, at any time, the aggregate amount of all Loans
then bearing interest at the rate determined by reference to the Base Rate.
"Base Rate Margin" means the applicable percent per annum determined in
accordance with Subsection 1.2(B).
"Budget" means, for Borrower prepared on a segment basis, (i) profit and
loss statements and (ii) cash flow statements, all prepared on a consistent
basis with Borrower's or such Subsidiaries' historical financial statements,
together with appropriate supporting details and a statement of underlying
assumptions. The Budget represents and will represent as of the date thereof the
good faith estimate of Borrower and its senior management concerning the course
of its business.
"Business Day" means (i) for all purposes other than as covered by clause
(ii) below, any day excluding Saturday, Sunday and any day which is a legal
holiday under the laws of the State of Colorado, or is a day on which banking
institutions located in such state are closed or which the Federal Reserve Banks
are closed, and (ii) with respect to all notices, determinations, fundings and
payments in connection with LIBOR Loans, any day that is a Business Day
described in clause (a) above and that is also a day for trading by and between
banks in U.S. dollar deposits in the applicable interbank LIBOR market.
"Calculation Period" means each period commencing on each Adjustment Date
and ending on the day preceding each subsequent Adjustment Date.
"Capital Lease" means any lease of real or personal property which is
required to be capitalized under GAAP or which is treated as an operating lease
under regulations applicable to Borrower and its Subsidiaries but which
otherwise would be required to be capitalized under GAAP.
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"Cash Equivalents" means: (i) marketable direct obligations issued or
unconditionally guarantied 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 (1) year from the date of acquisition thereof;
(ii) commercial paper maturing no more than one (1) year from the date issued
and, at the time of acquisition, having a rating of at least A-1 from Standard &
Poor's Rating Service or at least P-1 from Xxxxx'x Investors Service, Inc.;
(iii) certificates of deposit or bankers' acceptances maturing within one (1)
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 $500,000,000; and (iv) time
deposits maturing no more than 30 days from the date of creation thereof with
commercial banks having membership in the Federal Deposit Insurance Corporation
in amounts at any one such institution not exceeding the lesser of $100,000 or
the maximum amount of insurance applicable to the aggregate amount of Borrower's
deposits at such institution.
"Closing Date" means May 1, 2006.
"Communications Act" means the Communications Act of 1934, as amended and
any similar or successor federal statute, and the rules and regulations of the
FCC thereunder, all as the same may be in effect from time to time.
"Consolidated Net Assets" means, on a consolidated basis for Borrower and
its Subsidiaries, total assets minus the sum of (a) Restricted Investments and
(b) current liabilities.
"Consolidated Net Worth" means the consolidated stockholders' equity of
Borrower and its Subsidiaries.
"Default" means a condition or event that, after notice or lapse of time
or both, would constitute an Event of Default if that condition or event were
not cured or removed within any applicable grace or cure period.
"Excluded Subsidiary" means any Subsidiary that is not a Significant
Subsidiary.
"EBITDA" means the sum of (a) (i) net income or deficit, as the case may
be (excluding extraordinary gains, the write up of any asset or any gain
realized upon the sale of an asset and excluding any extraordinary, non-cash
losses, the write down of any asset and the loss realized upon the sale of any
asset), (ii) total interest expense (including non-cash interest), (iii)
depreciation and amortization expense, and (iv) income or franchise taxes,
federal, state or local. For any period of calculation, EBITDA shall be adjusted
to give effect to any acquisition, sale or other disposition of any operation or
business (or any portion thereof) during the period of calculation as if such
acquisition, sale or other disposition occurred on the first day of such period
of calculation.
"Environmental Laws" means all applicable federal, state or local laws,
statutes, rules, regulations or ordinances, codes, common law, consent
agreements, orders, decrees, judgments or injunctions issued, promulgated,
approved or entered thereunder relating to public health, safety or the
pollution or protection of the environment, including those relating to
releases, discharges, emissions, spills, leaching, or disposals of hazardous
substances (including petroleum, crude oil or any fraction or derivative
thereof, or other hydrocarbons) to air, water, land or ground water, to the
withdrawal or use of ground water, to the use, handling or disposal of
polychlorinated biphenyls, asbestos or urea formaldehyde, to the treatment,
storage, disposal or management of hazardous substances (including petroleum,
crude oil or any fraction or derivative thereof, or other hydrocarbons),
pollutants or contaminants, to exposure to toxic, hazardous or other controlled,
prohibited, or regulated substances, including, without limitation, any such
provisions under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended (42 U.S.C. ss. 9601 et seq.), or the Resource
Conservation and Recovery Act of 1976, as amended (42 U.S.C. ss. 6901 et seq.).
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) which is a member of a controlled group or under common control
with Borrower within the meaning of Section 414(b) or (c) of the IRC (and
Sections 414(m) and (o) of the IRC for purposes of provisions relating to
Section 412 of the IRC).
"ERISA Event" means, with respect to Borrower, any ERISA Affiliate or any
Pension Plan, the occurrence of any of the following: (a) a Reportable Event;
(b) a withdrawal by a substantial employer (as defined in Section 4001(a)(12) of
ERISA) subject to Section 4063 of ERISA; (c) a cessation of operations which is
treated as a withdrawal under Section 4062(e) of ERISA; (d) a complete or
partial withdrawal under Section 4203 or 4205 of ERISA from a Multi-employer
Plan; (e) a notification that a Multi-employer Plan is in reorganization under
Section 4242 of ERISA; (f) the filing of a notice of intent to terminate a
Pension Plan under 4041 of ERISA; (g) the treatment of an amendment of a Pension
Plan as a termination under 4041 of ERISA; (h) the termination of a
Multi-employer Plan under Section 4041A of ERISA; (i) the commencement of
proceedings by the PBGC to terminate a Pension Plan under 4042 of ERISA; (j) an
event or condition which could reasonably be expected to constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, a Pension Plan; or (k) the imposition of any liability
under Title IV of ERISA, other than PBGC premiums due but not delinquent under
Section 4007 of ERISA.
"Facility" and "Facilities" mean, respectively, each of the Term Loan
Facility, the Swingline Facility and the Revolving Loan Facility and,
collectively, both of the Term Loan Facility, the Swingline Facility and the
Revolving Loan Facility.
"FCC" means the Federal Communications Commission, or any other similar or
successor agency of the federal government administering the Communications Act.
"GAAP" means generally accepted accounting principles as set forth in
statements from Auditing Standards No. 69, as amended, entitled "The Meaning of
`Present Fairly in Conformance with Generally Accepted Accounting Principles in
the Independent Auditors Reports'" issued by the Auditing Standards Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board that are applicable
to the circumstances as of the date of determination.
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"Governmental Approvals" means all authorizations, consents, approvals,
licenses and exemptions of, registrations and filings with, and reports to, all
Governmental Authorities, including all Licenses.
"Governmental Authority" means any nation, province, or state or any
political subdivision of any of the foregoing, and any government or any Person
exercising executive, legislative, regulatory or administrative functions of or
pertaining to government, and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise, by any of the
foregoing, including the FCC and any PUC.
"Guarantee Obligation": as to any Person (the "guaranteeing person"), any
obligation, including a reimbursement, counterindemnity or similar obligation,
of the guaranteeing person that guarantees any Indebtedness, leases, dividends
or other obligations (the "primary obligations") of any other third Person (the
"primary obligor") in any manner, whether directly or indirectly, including any
obligation of the guaranteeing person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1) for the purchase
or payment of any such primary obligation or (2) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation, (iv) otherwise to assure or hold harmless the owner of any such
primary obligation against loss in respect thereof or (v) to reimburse or
indemnify an issuer of a letter of credit, surety bond or guarantee issued by
such issuer in respect of primary obligations of a primary obligor other than
Borrower or any Significant Subsidiary; provided, however, that the term
Guarantee Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. The amount of any Guarantee
Obligation of any guaranteeing person shall be deemed to be the lower of (a) an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Guarantee Obligation is made and (b) the maximum amount
for which such guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary obligation
and the maximum amount for which such guaranteeing person may be liable are not
stated or determinable, in which case the amount of such Guarantee Obligation
shall be such guaranteeing person's reasonably anticipated liability in respect
thereof as determined by Borrower in good faith.
"Indebtedness" as applied to any Person, means, without duplication: (i)
all indebtedness for borrowed money; (ii) that portion of obligations with
respect to Capital Leases or other capitalized agreements that is properly
classified as a liability on a balance sheet in conformity with GAAP; (iii)
notes payable and drafts accepted representing extensions of credit whether or
not representing obligations for borrowed money; (iv) any obligation owed for
all or any part of the deferred purchase price of property or services, except
trade payables arising in the ordinary course of business not more than 90 days
past due; (v) all indebtedness secured by any Lien on any property or asset
owned or held by that Person regardless of whether the indebtedness secured
thereby shall have been assumed by that Person or is nonrecourse to the credit
of that Person, but only to the extent of the fair value of such property or
asset; (vi) fixed rate hedging obligations that are due (after giving effect to
any period of grace or notice requirement applicable thereto) and remain unpaid;
(viii) all obligations of such Person, contingent or otherwise, as an account
party or applicant under or in respect of acceptances, letters of credit, surety
bonds or similar arrangements (other than reimbursement obligations, which are
not due and payable on such date, in respect of documentary letters of credit
issued to provide for the payment of goods and services in the ordinary course
of business); (ix) obligations under partnership, organizational or other
agreements to fund capital contributions or other equity calls with respect to
any Person or investment, or to redeem, repurchase or otherwise make payments in
respect to capital stock or other securities of such Person and (x) all
Guarantee Obligations of such Person in respect of obligations of the kind
referred to in clauses (i) through (ix) above.
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"Interest Coverage Ratio" means the ratio derived by dividing (i) EBITDA
by (ii) total interest expense, in each case for the then most recently
completed four fiscal quarters.
"Interest Rate Agreement" means any interest rate swap, hedge, cap, collar
or similar agreement or arrangement designed to protect Borrower against
fluctuations in interest rates.
"Investment" means (i) any direct or indirect purchase or other
acquisition by Borrower or any of its Significant Subsidiaries of any beneficial
interest in, including stock, partnership interest or other equity securities
of, any other Person, other than trade associations and similar organizations
purchased or acquired in the ordinary course of business; and (ii) any direct or
indirect loan, advance, guarantee, assumption of liability or other obligation
of liability, or capital contribution by Borrower or any of its Significant
Subsidiaries to any other Person, including all indebtedness and accounts
receivable from that other Person that are not current assets or did not arise
from sales to that other Person in the ordinary course of business. The amount
of any Investment shall be the original cost of such Investment plus the cost of
all additions thereto, without any adjustments for increases or decreases in
value, or write-ups, write-downs or write-offs with respect to such Investment.
"IRC" means the Internal Revenue Code of 1986, as amended from time to
time, and all rules and regulations promulgated thereunder.
"Letter of Credit Liability" means, as to each Letter of Credit, all
reimbursement obligations of Borrower to CoBank consisting of (a) the amount
available to be drawn or which may become available to be drawn; (b) all amounts
which have been paid and made available by CoBank to the extent not reimbursed
by Borrower, whether by the making of a Revolving Loan or otherwise; and (c) all
accrued and unpaid interest, fees and expenses with respect thereto. In the case
of any Letter of Credit that is issued in a currency other than United Stated
Dollars, the corresponding Letter of Credit Liability shall be determined in
United States Dollars based on the currency exchange rate from time to time
applicable to the issuer of such Letter of Credit.
"Leverage Ratio" means, for any period, the ratio derived by dividing all
Indebtedness as of the last day of the applicable period by EBITDA, in each case
as determined for the immediately preceding four fiscal quarters.
"LIBOR" means the rate (rounded upward to the nearest sixteenth and
adjusted for reserves required on Eurocurrency Liabilities (as defined in
Regulation D as promulgated by the Board of Governors of the Federal Reserve
System, 12 CFR Part 204, as amended) for banks subject to such Regulation D or
required by any other federal law or regulation) quoted by the British Bankers
Association at 11:00 a.m. London time two (2) Banking Days before the
commencement of the Interest Period for the offering of U.S. dollar deposits in
the London interbank market for the Interest Period designated by Borrower, as
published by Bloomberg or another major information vendor listed on British
Bankers Association's official website.
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"LIBOR Loans" means Loans (excluding Swingline Loans) accruing interest at
rates determined by reference to the LIBOR.
"LIBOR Margin" means the applicable percent per annum determined in
accordance with Subsection 1.2(B).
"Licenses" means any material telephone, long distance, cellular
telephone, microwave, personal communications or other telecommunications or
similar license, authorization, waiver, certificate of compliance, franchise,
approval or permit, whether for the acquisition, construction or operation of
any Telecommunications System, granted or issued by the FCC or any applicable
PUC and held by Borrower or any of its Significant Subsidiaries, all of which
are listed as of the Closing Date on Schedule 5.13(A).
"Lien" means any lien, mortgage, pledge, security interest, charge or
encumbrance of any kind, whether voluntary or involuntary (including any
conditional sale or other title retention agreement and any lease in the nature
thereof), and any agreement to give any lien, mortgage, pledge, security
interest, charge or encumbrance.
"Loan" or "Loans" means an advance or advances under the Term Loan
Commitment, the Revolving Loan Commitment and the Swingline Commitment.
"Loan Commitment" or "Loan Commitments" mean, respectively, each of the
Term Loan Commitment, the Revolving Loan Commitment and the Swingline Commitment
and collectively, the Term Loan Commitment, the Revolving Loan Commitment and
the Swingline Commitment.
"Loan Documents" means this Agreement, the Notes, the Letters of Credit,
any Related Interest Rate Agreement and all other instruments, documents and
agreements executed and delivered concurrently herewith or at any time hereafter
to or for the benefit of CoBank in connection with the Loans and other
transactions contemplated by this Agreement, all as amended, supplemented or
modified from time to time.
"Material Adverse Effect" means (i) a material adverse effect upon the
business, operations, properties, assets or condition (financial or otherwise)
of Borrower and its Subsidiaries, taken as a whole, or (ii) the material
impairment of the ability of Borrower or any of its Subsidiaries to perform its
obligations under any Loan Document to which it is a party or of CoBank to
enforce any Loan Document or collect any of the Obligations. In determining
whether any individual event could reasonably be expected to have a Material
Adverse Effect, notwithstanding that such event does not of itself have such
effect, a Material Adverse Effect shall be deemed to have occurred if the
cumulative effect of such event and all other then existing events could
reasonably be expected to have a Material Adverse Effect.
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"Material Contracts" means (a) any contract or any other agreement,
written or oral, of Borrower or any of its Subsidiaries involving monetary
liability of or to any such Person in an amount in excess of $1,000,000 per
annum, and (b) any other contract or agreement, written or oral, of Borrower or
any of its Subsidiaries the failure to comply with which could reasonably be
expected to have a Material Adverse Effect; provided, however, that any (i)
vendor contract or (ii) contract or agreement which is terminable by a party
other than Borrower or any of its Subsidiaries without cause upon notice of 95
days or less shall not be considered a Material Contract.
"Multi-employer Plan" means a Multi-employer plan as defined in Section
4001(a)(3) of ERISA to which Borrower or any ERISA Affiliate makes, is making,
made, or was at any time during the current year or the immediately preceding 6
years obligated to make contributions.
"Net Proceeds" means cash proceeds received by Borrower or any of its
Subsidiaries from any Asset Disposition (including insurance proceeds, awards of
condemnation, and payments under notes or other debt securities received in
connection with any Asset Disposition), net of (i) the costs of such sale,
lease, transfer or other disposition (including taxes attributable to such sale,
lease or transfer) and (ii) amounts applied to repayment of Indebtedness (other
than the Obligations) secured by a Lien on the asset or property disposed.
"Note" or "Notes" means one or more of the Term Loan Notes, the Revolving
Notes and the Swingline Notes.
"Note Purchase Agreement" means that certain Note Purchase Agreement,
dated as of December 9, 1998, between Borrower and the purchasers listed on
Schedule A thereto, as supplemented by that certain Supplement to Note Purchase
Agreement, dated as of March 13, 2003, between Borrower and the purchasers
listed on Schedule A thereto, and as further amended, supplemented, modified,
extended or restated from time to time.
"Obligations" means all obligations, liabilities and indebtedness of every
nature of Borrower from time to time owed to CoBank under the Loan Documents
including the principal amount of all debts, claims and indebtedness, accrued
and unpaid interest, all reimbursement obligations in respect of any Letters of
Credit and all fees, costs and expenses thereunder, whether primary, secondary,
direct, contingent, fixed or otherwise, heretofore, now and/or from time to time
hereafter owing, due or payable whether before or after the filing of a
proceeding under the Bankruptcy Code by or against Borrower or any of its
Subsidiaries.
"Overnight LIBOR" with respect to any Swingline Loans, the per annum rate
of interest most recently announced within CoBank at its principal office in
Denver, Colorado as its Overnight LIBOR Rate, with the understanding that
CoBank's Overnight LIBOR is one of its base rates and serves as the basis upon
which effective rates of interest are calculated for those loans making
reference thereto, and is evidenced by the recording thereof after its
announcement in such internal publication or publications as CoBank may
designate. CoBank shall base its determination of the Overnight LIBOR upon such
offers for deposits on or other market indicators of the interbank market as
CoBank in its discretion deems appropriate, and the Overnight LIBOR available to
Borrower hereunder shall be adjusted by CoBank for reserves required on
Eurocurrency Liabilities (as defined in Regulation D as promulgated by the Board
of Governors of the Federal Reserve System, 12 CFR Part 204, as amended). Any
change in the Overnight LIBOR shall become effective on the date on which each
such change in the Overnight LIBOR is announced within CoBank.
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"PBGC" means the Pension Benefit Guaranty Corporation or any Person
succeeding to the functions thereof.
"Pension Plan" means a pension plan (as defined in Section 3(2) of ERISA)
subject to Title IV of ERISA which any Borrower or an ERISA Affiliate sponsors,
maintains, or to which it makes, is making, or is obligated to make
contributions or, in the case of a Multi-employer Plan, has made contributions
at any time during the current year or the immediately preceding six plan years.
"Permitted Encumbrances" means the following:
(1) Liens for taxes, assessments or other governmental charges not yet
due and payable unless the same are being diligently contested in good faith and
by appropriate proceedings and then only if and to the extent that adequate
reserves therefor are maintained in accordance with GAAP;
(2) statutory Liens of landlords, carriers, warehousemen, mechanics,
materialmen and other similar liens imposed by law, which are incurred in the
ordinary course of business for sums not more than 90 days delinquent or which
are being contested in good faith; provided that a reserve or other appropriate
provision shall have been made therefor;
(3) Liens incurred or deposits made in the ordinary course of business
in connection with workers' compensation, unemployment insurance and other types
of social security (other than any Lien imposed by the Employee Retirement
Income Security Act of 1974 or any rule or regulation promulgated thereunder),
or to secure the performance of tenders, statutory obligations, surety, stay,
customs and appeal bonds, bids, leases, government contracts, trade contracts,
performance and return of money bonds and other similar obligations (exclusive
of obligations for the payment of borrowed money);
(4) deposits, in an aggregate amount not to exceed $1,000,000, made in
the ordinary course of business to secure liability to insurance carriers or
others;
(5) any attachment or judgment Lien not constituting an Event of
Default under Subsection 6.1(H);
(6) easements, rights of way, restrictions and other similar charges or
encumbrances not interfering in any material respect with the ordinary conduct
of the business of Borrower or any of its Subsidiaries;
(7) Liens in favor of CoBank as set forth in Subsection 2.7;
(8) Liens securing purchase money security agreements and capital
leases permitted under Section 3.1(G), provided that such Liens do not encumber
any property other than the items purchased with the proceeds of such
Indebtedness or leased pursuant to such Indebtedness and such liens do not
secure any amounts other than amounts necessary to purchase or lease such items;
and
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(9) other Liens securing Priority Debt of Borrower or any Significant
Subsidiary not otherwise permitted by this definition of Permitted Encumbrances,
provided that Priority Debt incurred after December 8, 1998 does not exceed 15%
of Consolidated Net Worth as of the most recently completed fiscal quarter of
Borrower.
"Person" means and includes natural persons, corporations, limited
liability companies, limited partnerships, limited liability partnerships,
general partnerships, joint stock companies, joint ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments and agencies and
political subdivisions thereof and their respective permitted successors and
assigns (or in the case of a governmental person, the successor functional
equivalent of such Person).
"Plan" means an employee benefit plan (as defined in Section 3(3) of
ERISA) which any Borrower or an ERISA Affiliate sponsors or maintains or to
which any Borrower or an ERISA Affiliate makes, is making, or is obligated to
make contributions and includes any Pension Plan.
"Priority Debt" means (without duplication) the sum of (a) unsecured
Indebtedness of the Subsidiaries other than Indebtedness owing to Borrower or
any other Subsidiary and (b) Indebtedness of Borrower and its Subsidiaries
secured by a Lien described in clause (9) of the definition of Permitted
Encumbrances.
"PUC" means any state, provincial or other local regulatory agency or body
that exercises jurisdiction over the rates or services or the ownership,
construction or operation of any Telecommunications System or over Persons who
own, construct or operate a Telecommunications System, in each case by reason of
the nature or type of the business subject to regulation and not pursuant to
laws and regulations of general applicability to Persons conducting business in
any such jurisdiction.
"Quoted Rate" means a fixed annual interest rate for a selected Quoted
Rate Period to be quoted by CoBank in its sole and absolute discretion.
"Quote Rate Loans" means Loans accruing interest at Quoted Rates.
"Related Interest Rate Agreement" means any Interest Rate Agreement
entered into between CoBank and Borrower to hedge the interest rate exposure
applicable to any portions of the Loans.
"Reportable Event" means any of the events set forth in Section 4043(c) of
ERISA or the regulations thereunder, other than any such event for which the 30
day notice requirement under ERISA has been waived in regulations issued by the
PBGC.
"Restricted Investment" means all Investments except (i) property to be
used in the ordinary course of business; (ii) current assets arising from the
sale of goods and services in the ordinary course of business; (iii) Investments
in one or more Subsidiaries or any Person that concurrently becomes a
Subsidiary; (iv) Investments existing on December 9, 1998; (v) Investments in
obligations, maturing within one year, issued by or guaranteed by the United
States of America or an agency thereof; (vi) Investments in municipal
securities, maturing within one year, which are rated in one of the top two
ratings classifications by at least one national rating agency; (vii)
Investments in certificates of deposit or banker's acceptances issued by Bank of
America or other commercial banks which are rated in one of the top two rating
classifications by at least one national rating agency; (viii) Investments in
commercial paper, maturing within 270 days, rating in one of the top two rating
classifications by at least one national rating agency; and (ix) Investments in
money market instrument programs which are classified as current assets in
accordance with GAAP.
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"Restricted Junior Payment" means: (i) any dividend or other distribution,
direct or indirect, on account of any equity interest in Borrower, including any
shares of any class of stock of Borrower now or hereafter outstanding, except a
dividend payable solely in shares of a class of stock to the holders of that
class; (ii) any redemption, conversion, exchange, retirement, sinking fund or
similar payment, purchase or other acquisition for value, direct or indirect, of
any equity interest in Borrower, including any shares of any class of stock of
Borrower now or hereafter outstanding; (iii) any payment or prepayment of
interest on, principal of, premium, if any, redemption, conversion, exchange,
purchase, retirement, defeasance, sinking fund or similar payment with respect
to, any Indebtedness subject to subordination provisions for the benefit of
CoBank; and (iv) any payment made to retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire any equity interest in
Borrower, including any shares of any class of stock of Borrower now or
hereafter outstanding.
"Revolving Loan" or "Revolving Loans" means an advance or advances under
the Revolving Loan Commitment.
"Revolving Loan Commitment" means, initially, $60,000,000, as such amount
is reduced from time to time as provided in this Agreement.
"Revolving Loan Expiration Date" means the earlier of (i) the suspension
(subject to reinstatement) of CoBank's obligations to make Loans pursuant to
Subsection 6.2, (ii) the acceleration of the Obligations pursuant to Subsection
6.3 or (iii) May 1, 2012.
"Revolving Loan Facility" means, the revolving loan credit facility
extended to Borrower pursuant to Section 1.1(B).
"Revolving Note" or "Revolving Notes" means one or more of the notes of
Borrower substantially in the form of Exhibit 10.1(A), or any combination
thereof, and any replacements, restatements, renewals or extensions of any such
notes, in whole or in part.
"Significant Subsidiary": as defined in Article 1, Rule 1-02(w) of
Regulation S-X of the Exchange Act of 1934 as of the Closing Date. Unless
otherwise qualified, all references to a "Significant Subsidiary" or to
"Significant Subsidiaries" in this Agreement shall refer to a Significant
Subsidiary or Significant Subsidiaries of Borrower; provided, however, that if
the 10% requirement of Regulation S-X is replaced with 25% and in the aggregate
the Excluded Subsidiaries satisfy the 25% threshold, then all references in this
Agreement to a "Significant Subsidiary" or to "Significant Subsidiaries" shall
also apply to the Excluded Subsidiaries.
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"Subsidiary" means, with respect to any Person, any corporation,
partnership, association or other business entity of which more than fifty
percent (50%) of the total voting power of shares of stock (or equivalent
ownership or controlling interest) entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof.
"Swingline Facility" means the working capital loan facility extended to
Borrower pursuant to Subsection 1.1(C).
"Swingline Loan Commitment" means, initially $20,000,000, as such amount
is reduced from time to time as provided in this Agreement.
"Swingline Loans" means an advance or advances under the Swingline Loan
Commitment.
"Swingline Note" or "Swingline Notes" means one or more of the Notes of
Borrower substantially in the form of Exhibit 10.1(C), or any combination
thereof, and any replacements, reinstatements, renewals or extension of any such
notes, in whole or in part.
"Telecommunications System" means a telephone, long distance, internet,
data services, video and satellite services, wireless telecommunications,
telephone directories, fiber and cable leasing, telecommunications equipment,
including hand sets, rental, leasing, installation, selling or maintenance
system or business and shall include a microwave system or a paging system
operated in connection with (and in the same general service area as) any of the
foregoing systems, and businesses related thereto.
"Term Loan" means the Loan under the Term Loan Commitment.
"Term Loan Commitment" means $40,000,000, as such amount is reduced from
time to time as provided in this Agreement.
"Term Loan Facility" means the term loan credit facility extended to
Borrower pursuant to Subsection 1.1(A).
"Term Loan Maturity Date" means the earlier of (i) the acceleration of the
Obligations pursuant to Subsection 6.3 or (ii) May 1, 2012.
"Term Loan Note" or "Term Loan Notes" means one or more of the notes of
Borrower substantially in the form of Exhibit 10.1(B), or any combination
thereof, and any replacements, restatements, renewals or extensions of any such
notes, in whole or in part.
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10.2 Other Definitional Provisions. References to "Sections,"
"Subsections," "Exhibits" and "Schedules" shall be to Sections, Subsections,
Exhibits and Schedules, respectively, of this Agreement unless otherwise
specifically provided. Any of the terms defined in Subsection 10.1 may, unless
the context otherwise requires, be used in the singular or the plural depending
on the reference. In this Agreement, "hereof," "herein," "hereto," "hereunder"
and the like mean and refer to this Agreement as a whole and not merely to the
specific section, paragraph or clause in which the respective word appears;
words importing any gender include the other gender; references to "writing"
include printing, typing, lithography and other means of reproducing words in a
tangible visible form; the words "including," "includes" and "include" shall be
deemed to be followed by the words "without limitation"; references to
agreements and other contractual instruments shall be deemed to include
subsequent amendments, assignments, and other modifications thereto, but only to
the extent such amendments, assignments and other modifications are not
prohibited by the terms of this Agreement or any other Loan Document; references
to Persons include their respective permitted successors and assigns or, in the
case of governmental Persons, Persons succeeding to the relevant functions of
such Persons; and all references to statutes and related regulations shall
include any amendments of same and any successor statutes and regulations.
-55-
Witness the due execution hereof by the respective duly authorized
officers of the undersigned as of the date first written above.
SUREWEST COMMUNICATIONS
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------
Xxxxxx X. Xxxxxx
President and Chief Executive Officer
[Signatures Continued on Following Page]
[Signatures Continued from Previous Page]
COBANK, ACB
By: /s/ Xxx Xxxxxxx
----------------------------
Xxx Xxxxxxx
Vice President
SCHEDULE 3.8
TRANSACTIONS WITH AFFILIATES
None
SCHEDULE 5.3(A)
JURISDICTION OF ORGANIZATION
SureWest Communications California
SureWest Broadband California
SureWest Custom Data Services California
SureWest Internet_ California
SureWest Long Distance Company California
SureWest Telephone California
SureWest TeleVideo California
SureWest TeleVideo of Roseville California
SureWest Wireless_ California
West Coast PCS LLC California
SCHEDULE 5.3(C)
QUALIFICATION TO TRANSACT BUSINESS
California
SCHEDULE 5.4
GOVERNMENTAL APPROVALS
None
SCHEDULE 5.6
TAX RETURNS AND PAYMENTS
None
SCHEDULE 5.10
LITIGATION, ETC.
Borrower reported certain regulatory matters in Item 3 of its Annual
Report on Form 10-K for the year ended December 31, 2006, which are incorporated
in this Schedule 5.10.
SCHEDULE 5.11
EMPLOYEE LABOR MATTERS
None
EXHIBIT 1.3
SureWest Communications
FORM OF
NOTICE OF BORROWING/CONVERSION/CONTINUATION
CoBank, ACB
0000 X. Xxxxxx Xxxxxx
Xxxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attention:
-----------------------
Ladies and Gentlemen:
Pursuant to the Amended and Restated Credit Agreement, dated as of May 14,
2007 (as such loan agreement may hereafter be amended, modified or supplemented,
the "Credit Agreement") between SureWest Communications ("Borrower") and CoBank,
ACB ("CoBank"), Borrower hereby requests that CoBank take the actions indicated
below. Capitalized terms used but not defined herein have the meanings given to
them in the Credit Agreement.
Note: The following requirements apply to all requests:
- Requests must be made no later than 11:00 a.m. (Denver, Colorado
time) on a Business Day (however, if requesting a borrowing of a
Swingline Loan, not later than 2:00 p.m. (Denver, Colorado time) on
the date the proposed borrowing is to be effective).
- In the case of a borrowing of or conversion to or continuation of
the Base Rate Loan or a Quoted Rate Loan, requests must be made at
least one Business Day in advance of the proposed borrowing,
conversion or continuation date.
- In the case of a borrowing of or conversion to or continuation of a
LIBOR Loan, requests must be made at least three Banking Days in
advance of the proposed borrowing, conversion or continuation date.
- Borrowings under the Base Rate Loan must be in a minimum amount of
$100,000 and whole multiples of $5,000 in excess of $100,000.
- LIBOR Loans must be in a minimum amount of $1,000,000 and whole
multiples of $250,000 in excess of $1,000,000.
- Borrowings under the Swingline Facility must be in a minimum amount
of $50,000 and whole multiples of $5,000 in excess of $50,000.
- Quoted Rate Loans must be in a minimum account of $10,000,000 and
whole multiples of $1,000,000 in excess of $10,000,000.
- No more than a combined total of five LIBOR Loans and Quoted Rate
Loans under the Facilities may be outstanding at any one time.
__ REQUEST FOR BORROWING:
Borrower hereby requests an advance under the _________ [Term
Loan/Revolving Loan/Swingline] Facility. In connection with such request
under the Revolving Loan or Swingline Facilities, Borrower hereby
certifies as follows ((a)-(d) in the case of a Revolving Loan; (a) -(g) in
the case of Swingline Loan):
(a) The _________ Revolving Loan Commitment as reduced pursuant to
the Credit Agreement is $__________________; and
(b) The aggregate principal balance of _________ Revolving and
Swingline Loans _________ [advanced/outstanding] (not
including this requested Loan) is $_____________; and
(c) The aggregate amount of all outstanding Letter of Credit
Liability is $_____________; and
(d) Therefore, the available _________ Revolving Loan Commitment
is $_______________. [(a) minus (b) and also minus (c))][; and
(e) The _________ Swingline Loan Commitment as reduced pursuant to
the Credit Agreement is $__________________; and
(f) The aggregate principal balance of _________ Swingline Loans
_________ [advanced/outstanding] (not including this requested
Loan) is $_____________; and
(g) Therefore, the available _________ Swingline Loan Commitment
is $_______________. [(a) minus (b))]].
Borrower hereby requests under the _________ [Term Loan/Revolving
Loan/Swingline] Facility an advance of $_____________________, to be made
on ____________ and to bear interest pursuant to the interest rate
option(s) checked below [check all applicable]:
___ A portion of the Base Rate Loan in the principal amount of
$____________
___ A LIBOR Loan in the principal amount of $____________, for an
Interest Period of [check one]:
__1 month __2 months __3 months __6 months __9 months __12 months
___ If a Swingline Loan, at the Overnight LIBOR
___ A Quoted Rate Loan in the principal amount of $_________, of a
Quoted Rate Period of __________, commencing __________
___ REQUEST FOR CONVERSION:
Borrower hereby requests that the following Loan(s) be converted to new
interest rate option(s) as indicated:
Description of Loan(s) to be Converted [check one]:
___ On _________, convert $________________ of the Base Rate Loan under
the _________ [Term/Revolving] Loan Facility
___ On __________, convert the LIBOR Loan under the _________
[Term/Revolving] Loan Facility in the principal amount of
$_______________, the Interest Period for which expires on:
_____________
___ On __________, convert the Quoted Rate Loan under the _________
[Term/Revolving] Loan Facility in the principal amount of
$_______________, the Quoted Rate Period for which expires on:
_____________
Description of New Loan(s) [check all applicable]:
___ to the Base Rate Loan in the principal amount of $_________________
___ to a Quoted Rate Loan in the principal amount of $_________________,
for a Quoted Rate Period of _________________, commencing
_________________
___ to a LIBOR Loan in the principal amount of $___________________, for
an Interest Period of [check one]:
__1 month __2 months __3 months __6 months __9 months __12 months
___ REQUEST FOR CONTINUATION:
Borrower hereby requests that the interest rate option(s) applicable to
the following loan(s) be continued as indicated:
Upon expiration of its current Interest Period, continue the LIBOR Loan
under the _________ [Term/Revolving] Loan Facility in the principal amount
of $____________, the current Interest Period for which expires on _______
for a new Interest Period of:
__1 month __2 months __3 months __6 months __9 months __12 months
Upon expiration of its current Quoted Rate Period, continue the Quoted
Rate Loan and the _________ [Term/Revolving] Loan Facility in the
principal amount of $____________, the current Quoted Rate Period for
which expires on _______ for a new Quoted Rate Period of _______
The undersigned hereby certifies that both before and after giving effect
to the borrowing, conversion or continuation request above, (i) all of the
representations and warranties contained in the Credit Agreement and the other
Loan Documents, are true, correct and complete in all material respects as of
the date hereof as and to the extent provided in Section 7.2(B) of the Credit
Agreement, (ii) no Default or Event of Default has occurred and is continuing or
would result on the date hereof, (iii) since December 31, 2006, there has not
occurred any event or condition that has had or could reasonably be expected to
have a Material Adverse Effect, (iv) the undersigned is authorized to execute
and deliver this Notice on behalf of Borrower, and (v) the Loan Documents remain
in full force and effect as to Borrower.
SUREWEST COMMUNICATIONS
By:
-------------------------------
Name:
-------------------------
Title:
------------------------
Date:
-----------------------------
EXHIBIT 4.4(C)
FORM OF
COMPLIANCE CERTIFICATE
THIS COMPLIANCE CERTIFICATE is given by __________________ and
__________________, the [chief financial officer] of SUREWEST COMMUNICATIONS
("Borrower") pursuant to Subsection 4.4(C) of that certain Amended and Restated
Credit Agreement, dated as of May 14, 2007 (as such agreement may hereafter be
amended, modified or supplemented, the "Credit Agreement"), among Borrower and
CoBank, ACB. Capitalized terms used herein and not otherwise defined herein
shall have the meanings ascribed to them in the Credit Agreement.
I hereby certify as follows:
1. I am the [chief financial officer] of Borrower, and as such possess the
knowledge and authority to certify to the matters set forth in this Compliance
Certificate, and hereby certify that the matters set forth below are true and
accurate to the best of my present knowledge, information and belief after due
inquiry;
2. Attached hereto as Annex A are the [audited/unaudited]
[annual/quarterly] financial statements of Borrower, for the fiscal
[year/quarter] ended ______________, as required by Subsection 4.4[(A)/(B)] of
the Credit Agreement. Such financial statements were prepared in accordance with
GAAP consistently applied (except as expressly provided in the Credit
Agreement), fairly present the condition of Borrower during the periods covered
thereby and as of the dates thereof, and are in a format that demonstrates any
accounting or formatting changes that may be required by various jurisdictions
in which the business of Borrower is conducted (to the extent not inconsistent
with GAAP);
3. As of the date of such financial statements, Borrower is in compliance
with the covenants set forth in Section 4 of the Credit Agreement. Attached
hereto as Annex B are calculations which demonstrate the compliance by Borrower
with such covenants; and
4. I have reviewed the activities of Borrower, and consulted with
appropriate representatives of Borrower during the fiscal [year/quarter] ended
______________, and reviewed the Credit Agreement and the other Loan Documents.
As of the date of this Compliance Certificate, there is no condition, event or
act which constitutes a Default or an Event of Default under the Credit
Agreement, except as disclosed on Annex C hereto.
IN WITNESS WHEREOF, I have executed this Compliance Certificate as of
_____________, _____.
---------------------------
[chief financial officer]
SureWest Communications
ANNEX A
Annual (audited) or Quarterly (unaudited)
Financial Statements
ANNEX B
Financial Covenant Compliance Worksheet
COVENANT 4.1
Leverage Ratio
As of the fiscal year/quarter ended ______________, __________.
(A) Indebtedness $
(B) EBITDA (the sum of 1 through 4, without duplication; (calculated for the
then most recently completed four fiscal quarters))
1. Net income or deficit (excluding extraordinary
gains, the write up of any asset or gain and
excluding any extraordinary, non-cash losses,
the write down of any asset and loss realized
upon sale of any asset), plus $
-----------------
2. Total interest expense (including non-cash
interest), plus $
-----------------
3. Depreciation and amortization expense, plus $
-----------------
4. Income and franchise taxes, federal, state
or local $
-----------------
Sum of 1 through 4 $
-----------------
Leverage Ratio = (A) / (B) = :1.0
-----------------
Required Ratio: Not more than 3.0:1.0
Compliance: Yes No
COVENANT 4.2
Interest Coverage Ratio
As of the fiscal quarter/year ended ____________________, ____________.
(Calculated for the then most recently completed four fiscal quarters)
(A) EBITDA $
-----------------
(B) Cash interest expense $
-----------------
Pro Forma Debt Service Coverage Ratio = (A) / (B) = :1.0
----------------
Required Ratio: Not less than 3.0:1.0
Compliance: Yes No
COVENANT 4.3
Net Worth
As of the fiscal quarter/year ended __________, ____________.
(A) Consolidated Net Worth $
-----------------
(B) Greater of (i) $0 or (ii) the result of (a)
Restricted Investments incurred after
December 9, 1998 minus (b) 10% of
Consolidated Net Worth $
-----------------
Net Worth = (A) - (B) =$
-----------------
Required Amount: Not less than $160,000,000
Compliance: Yes No
EXHIBIT 10.1(A)
FORM OF
REVOLVING NOTE
SUREWEST COMMUNICATIONS
[$___________] ______ __, 2007
FOR VALUE RECEIVED, the undersigned ("Borrower"), hereby unconditionally
promises to pay to the order of __________ ("Lender") in lawful money of the
United States of America and in immediately available funds, the principal sum
of [_________________ UNITED STATES DOLLARS (US $__________)], or if less, the
aggregate unpaid principal amount of all advances made to Borrower by Lender
pursuant to Subsection 1.1(B) of the Credit Agreement described below, at such
times and in the manner specified therein.
This Revolving Note is payable on the dates and in the amounts set forth
in the Credit Agreement described below. This Revolving Note may be prepaid in
whole or in part at any time subject to the terms of the Credit Agreement
described below.
This Revolving Note is one of the Notes referred to in, was executed and
delivered pursuant to, evidences indebtedness of Borrower incurred under, and is
subject to all terms and conditions of, that certain Credit Agreement, dated as
May 14, 2007, between Borrower and Lender (as the same may be amended, restated,
supplemented or otherwise modified and in effect from time to time, the "Credit
Agreement"), to which reference is hereby made for a statement of, among other
things, the terms and conditions under which the indebtedness evidenced hereby
was made and is to be repaid and for a statement of Lender's remedies upon the
occurrence of an Event of Default, including without limitation, the remedy of
acceleration. Capitalized terms used herein but not otherwise specifically
defined shall have the meanings ascribed to such terms in the Credit Agreement.
Borrower unconditionally promises to pay interest on the outstanding
unpaid principal amount hereof from the date hereof until payment in full at the
rates from time to time applicable to the Revolving Loans as determined in
accordance with the Credit Agreement; provided, however, that upon the
occurrence and during the continuance of an Event of Default, Borrower promises
to pay interest on the outstanding principal balance of this Revolving Note at
the rate of interest applicable following the occurrence of an Event of Default
as determined in accordance with the Credit Agreement.
Interest on this Revolving Note shall be payable, at the times and from
the dates specified in the Credit Agreement for the Revolving Loans, on the date
of any prepayment hereof, at maturity, whether due by acceleration or otherwise,
and as otherwise provided in the Credit Agreement. From and after the date when
the principal balance hereof becomes due and payable, whether by acceleration or
otherwise, interest hereon shall be payable on demand, subject to any grace or
cure period set forth in the Credit Agreement. In no contingency or event
whatsoever shall interest charged hereunder, however such interest may be
characterized or computed, exceed the highest rate permissible under any law
which a court of competent jurisdiction shall, in a final determination, deem
applicable hereto. In the event that such a court determines that Lender has
received interest hereunder in excess of the highest rate applicable hereto,
such excess shall be applied in accordance with the terms of the Credit
Agreement. The indebtedness evidenced by this Revolving Note is secured pursuant
to the terms of the Loan Documents.
Except for any notices expressly required by the Loan Documents and as
otherwise required by applicable law, Borrower hereby waives demand, presentment
and protest and notice of demand, presentment, protest and nonpayment.
Borrower further agrees, subject only to any limitation imposed by
applicable law or the Loan Documents, to pay all expenses, including reasonable
attorneys' fees and legal expenses, incurred by Lender in endeavoring to collect
any amounts payable hereunder which are not paid when due, whether by
acceleration or otherwise.
THIS REVOLVING NOTE SHALL BE GOVERNED BY, AND INTERPRETED AND ENFORCED IN
ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO CONFLICTS OF LAW PROVISIONS
THAT REQUIRE OR PERMIT APPLICATION OF THE LAWS OF ANY OTHER STATE OR
JURISDICTION) AND DECISIONS OF THE STATE OF COLORADO. Whenever possible each
provision of this Revolving Note shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Revolving
Note shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity in such
jurisdiction, without invalidating the remainder of such provision or the
remaining provisions of this Revolving Note or the effectiveness and validity of
such prohibited or invalid provision in any other jurisdiction. Whenever in this
Revolving Note reference is made to Lender or Borrower, such reference shall be
deemed to include, as applicable, a reference to their respective permitted
successors and assigns and in the case of Lender, any financial institution to
which it has sold or assigned all or any part of its interest in the Revolving
Loans or in its commitment to make the Revolving Loans as permitted by the
Credit Agreement. The provisions of this Revolving Note shall be binding upon
and shall inure to the benefit of such permitted successors and assigns.
Borrower's respective successors and assigns shall include, without limitation,
a receiver, trustee or debtor in possession of or for Borrower.
IN WITNESS WHEREOF, Borrower has caused this note to be executed and
delivered, by its duly authorized officer, on the date first shown above.
SUREWEST COMMUNICATIONS
By:
------------------------
Name:
----------------------
EXHIBIT 10.1(B)
FORM OF
TERM LOAN NOTE
SUREWEST COMMUNICATIONS
[$___________] ______ __, 2007
FOR VALUE RECEIVED, the undersigned ("Borrower"), hereby unconditionally
promises to pay to the order of __________ ("Lender") in lawful money of the
United States of America and in immediately available funds, the principal sum
of [_________________ UNITED STATES DOLLARS (US $__________)], or if less, the
aggregate unpaid principal amount of all advances made to Borrower by Lender
pursuant to Subsection 1.1(A) of the Credit Agreement described below, at such
times and in the manner specified therein.
This Term Loan Note is payable in installments on the dates and in the
amounts set forth in the Credit Agreement described below. This Term Loan Note
may be prepaid in whole or in part at any time subject to the terms of the
Credit Agreement described below.
This Term Loan Note is one of the Notes referred to in, was executed and
delivered pursuant to, evidences indebtedness of Borrower incurred under, and is
subject to all terms and conditions of, that certain Credit Agreement, dated as
of May 14, 2007, between Borrower and Lender (as the same may be amended,
restated, supplemented or otherwise modified and in effect from time to time,
the "Credit Agreement"), to which reference is hereby made for a statement of,
among other things, the terms and conditions under which the indebtedness
evidenced hereby was made and is to be repaid and for a statement of Lender's
remedies upon the occurrence of an Event of Default, including without
limitation, the remedy of acceleration. Capitalized terms used herein but not
otherwise specifically defined shall have the meanings ascribed to such terms in
the Credit Agreement.
Borrower unconditionally promises to pay interest on the outstanding
unpaid principal amount hereof from the date hereof until payment in full at the
rates from time to time applicable to the Term Loan as determined in accordance
with the Credit Agreement; provided, however, that upon the occurrence and
during the continuance of an Event of Default, Borrower promises to pay interest
on the outstanding principal balance of this Term Loan Note at the rate of
interest applicable following the occurrence of an Event of Default as
determined in accordance with the Credit Agreement.
Interest on this Term Loan Note shall be payable, at the times and from
the dates specified in the Credit Agreement for the Term Loan, on the date of
any prepayment hereof, at maturity, whether due by acceleration or otherwise,
and as otherwise provided in the Credit Agreement. From and after the date when
the principal balance hereof becomes due and payable, whether by acceleration or
otherwise, interest hereon shall be payable on demand, subject to any grace or
cure period set forth in the Credit Agreement. In no contingency or event
whatsoever shall interest charged hereunder, however such interest may be
characterized or computed, exceed the highest rate permissible under any law
which a court of competent jurisdiction shall, in a final determination, deem
applicable hereto. In the event that such a court determines that Lender has
received interest hereunder in excess of the highest rate applicable hereto,
such excess shall be applied in accordance with the terms of the Credit
Agreement. The indebtedness evidenced by this Term Loan Note is secured pursuant
to the terms of the Loan Documents.
Except for any notices expressly required by the Loan Documents and as
otherwise required by applicable law, Borrower hereby waives demand, presentment
and protest and notice of demand, presentment, protest and nonpayment.
Borrower further agrees, subject only to any limitation imposed by
applicable law or the Loan Documents, to pay all expenses, including reasonable
attorneys' fees and legal expenses, incurred by Lender in endeavoring to collect
any amounts payable hereunder which are not paid when due, whether by
acceleration or otherwise.
THIS TERM LOAN NOTE SHALL BE GOVERNED BY, AND INTERPRETED AND ENFORCED IN
ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO CONFLICTS OF LAW PROVISIONS
THAT REQUIRE OR PERMIT APPLICATION OF THE LAWS OF ANY OTHER STATE OR
JURISDICTION) AND DECISIONS OF THE STATE OF COLORADO. Whenever possible each
provision of this Term Loan Note shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Term Loan
Note shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity in such
jurisdiction, without invalidating the remainder of such provision or the
remaining provisions of this Term Loan Note or the effectiveness and validity of
such prohibited or invalid provision in any other jurisdiction. Whenever in this
Term Loan Note reference is made to Lender or Borrower, such reference shall be
deemed to include, as applicable, a reference to their respective permitted
successors and assigns and in the case of Lender, any financial institution to
which it has sold or assigned all or any part of its interest in the Term Loan
or in its commitment to make the Term Loan as permitted by the Credit Agreement.
The provisions of this Term Loan Note shall be binding upon and shall inure to
the benefit of such permitted successors and assigns. Borrower's respective
successors and assigns shall include, without limitation, a receiver, trustee or
debtor in possession of or for Borrower.
IN WITNESS WHEREOF, Borrower has caused this note to be executed and
delivered, by its duly authorized officer, on the date first shown above.
SUREWEST COMMUNICATIONS
By:
------------------------
Name:
----------------------
EXHIBIT 10.1(C)
FORM OF
SWINGLINE NOTE
SUREWEST COMMUNICATIONS
$____________] ______ __, 2007
FOR VALUE RECEIVED, the undersigned ("Borrower"), hereby unconditionally
promises to pay to the order of __________ ("Lender") in lawful money of the
United States of America and in immediately available funds, the principal sum
of [_________________ UNITED STATES DOLLARS (US $__________)], or if less, the
aggregate unpaid principal amount of all advances made to Borrower by Lender
pursuant to Subsection 1.1(C) of the Credit Agreement described below, at such
times and in the manner specified therein.
This Swingline Note is payable on the dates and in the amounts set forth
in the Credit Agreement described below. This Swingline Note may be prepaid in
whole or in part at any time subject to the terms of the Credit Agreement
described below.
This Swingline Note is one of the Notes referred to in, was executed and
delivered pursuant to, evidences indebtedness of Borrower incurred under, and is
subject to all terms and conditions of, that certain Credit Agreement, dated as
of May 14, 2007, between Borrower and Lender (as the same may be amended,
restated, supplemented or otherwise modified and in effect from time to time,
the "Credit Agreement"), to which reference is hereby made for a statement of,
among other things, the terms and conditions under which the indebtedness
evidenced hereby was made and is to be repaid and for a statement of Lender's
remedies upon the occurrence of an Event of Default, including without
limitation, the remedy of acceleration. Capitalized terms used herein but not
otherwise specifically defined shall have the meanings ascribed to such terms in
the Credit Agreement.
Borrower unconditionally promises to pay interest on the outstanding
unpaid principal amount hereof from the date hereof until payment in full at the
rates from time to time applicable to the Swingline Loans as determined in
accordance with the Credit Agreement; provided, however, that upon the
occurrence and during the continuance of an Event of Default, Borrower promises
to pay interest on the outstanding principal balance of this Swingline Note at
the rate of interest applicable following the occurrence of an Event of Default
as determined in accordance with the Credit Agreement.
Interest on this Swingline Note shall be payable, at the times and from
the dates specified in the Credit Agreement for the Swingline Loans, on the date
of any prepayment hereof, at maturity, whether due by acceleration or otherwise,
and as otherwise provided in the Credit Agreement. From and after the date when
the principal balance hereof becomes due and payable, whether by acceleration or
otherwise, interest hereon shall be payable on demand, subject to any grace or
cure period set forth in the Credit Agreement. In no contingency or event
whatsoever shall interest charged hereunder, however such interest may be
characterized or computed, exceed the highest rate permissible under any law
which a court of competent jurisdiction shall, in a final determination, deem
applicable hereto. In the event that such a court determines that Lender has
received interest hereunder in excess of the highest rate applicable hereto,
such excess shall be applied in accordance with the terms of the Credit
Agreement. The indebtedness evidenced by this Swingline Note is secured pursuant
to the terms of the Loan Documents.
Except for any notices expressly required by the Loan Documents and as
otherwise required by applicable law, Borrower hereby waives demand, presentment
and protest and notice of demand, presentment, protest and nonpayment.
Borrower further agrees, subject only to any limitation imposed by
applicable law or the Loan Documents, to pay all expenses, including reasonable
attorneys' fees and legal expenses, incurred by Lender in endeavoring to collect
any amounts payable hereunder which are not paid when due, whether by
acceleration or otherwise.
THIS SWINGLINE NOTE SHALL BE GOVERNED BY, AND INTERPRETED AND ENFORCED IN
ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO CONFLICTS OF LAW PROVISIONS
THAT REQUIRE OR PERMIT APPLICATION OF THE LAWS OF ANY OTHER STATE OR
JURISDICTION) AND DECISIONS OF THE STATE OF COLORADO. Whenever possible each
provision of this Swingline Note shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Swingline
Note shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity in such
jurisdiction, without invalidating the remainder of such provision or the
remaining provisions of this Swingline Note or the effectiveness and validity of
such prohibited or invalid provision in any other jurisdiction. Whenever in this
Swingline Note reference is made to Lender or Borrower, such reference shall be
deemed to include, as applicable, a reference to their respective permitted
successors and assigns and in the case of Lender, any financial institution to
which it has sold or assigned all or any part of its interest in the Revolving
Loans or in its commitment to make the Swingline Loans as permitted by the
Credit Agreement. The provisions of this Swingline Note shall be binding upon
and shall inure to the benefit of such permitted successors and assigns.
Borrower's respective successors and assigns shall include, without limitation,
a receiver, trustee or debtor in possession of or for Borrower.
IN WITNESS WHEREOF, Borrower has caused this note to be executed and
delivered, by its duly authorized officer, on the date first shown above.
SUREWEST COMMUNICATIONS
By:
------------------------
Name:
----------------------
