AMENDMENT NO. 1
Exhibit 10.1
AMENDMENT XX. 0
XXXXXXXXX XX. 0 dated as of August 26, 2005 (“Amendment No. 1”) to the Amended and
Restated Credit Agreement dated as of November 23, 2004 (as modified and supplemented and
in effect from time to time, the “Credit Agreement”) between IOWA TELECOMMUNICATIONS
SERVICES, INC. (the “Borrower”), the lenders party thereto (the “Lenders”) and
RURAL TELEPHONE FINANCE COOPERATIVE, as administrative agent (in such capacity, together with its
successors in such capacity, the “Administrative Agent”).
The Borrower has requested that the requisite lenders consent to the reduction of the
Applicable Margin for Tranche B Term Loans and to make certain other modifications to the Credit
Agreement and, in that connection, the Administrative Agent has been granted authority by the
requisite Lenders to execute and deliver this Amendment on behalf of the Lenders. The Borrower and
the Administrative Agent pursuant to authority granted by, and having obtained all necessary
consents of, the requisite lenders, wish now to amend the Credit Agreement in certain respects, and
accordingly, the parties hereto hereby agree as follows:
Section 1. Definitions. Except as otherwise defined in this Amendment No. 1, terms
defined in the Credit Agreement are used herein as defined therein.
Section 2. Amendments. Subject to the satisfaction of the conditions precedent
specified in Section 4 below, but effective as of the date hereof, the Credit Agreement shall be
amended as follows:
2.01. References Generally. References in the Credit Agreement (including references
to the Credit Agreement as amended hereby) to “this Agreement” (and indirect references such as
“hereunder”, “hereby”, “herein” and “hereof”) shall be deemed to be references to the Credit
Agreement as amended hereby.
2.02. Definition of Applicable Rate. The first paragraph of the definition of
“Applicable Rate” in Section 1.01 of the Credit Agreement shall be amended in its entirety to read
as follows:
“Applicable Rate” means, for any day, (i) with respect to any ABR Loan, (x)
that is a Revolving Loan, 1.00% per annum and (y) with respect to any ABR Loan that is a
Tranche B Term Loan, .75% per annum, (ii) with respect to any Eurodollar Loan, (x) that is a
Revolving Loan, 2.00% per annum and (y) with respect to any Eurodollar Loan that is a
Tranche B Term Loan, 1.75% per annum, (iii) with respect to any Fixed Rate Loan, 0.85% per
annum and (iv) with respect to any Variable Rate Loan, 0.85% per annum.
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2.03. Other Definitions. The definitions of “Applicable Revolving Reduction amount”
and “Available Cash” in Section 1.01 of the Credit Agreement shall be amended in their entirety to
read as follows, and new definitions of “Amendment No. 1 Effective Date”, “Pro Forma Revolving
Amount” and “Repricing Transaction” shall be inserted in the appropriate alphabetical locations to
read as follows:
“Amendment No. 1 Effective Date” means the effective date of Amendment No. 1
dated as of August 26, 2005 to this Agreement.
“Applicable Revolving Reduction Amount” means, for any fiscal year, the
cumulative reductions, if positive, of Revolving Loans from the Pro Forma Revolving Amount
through the last day of such fiscal year. Such cumulative reduction may be determined by
formula as follows:
(a) for the fiscal year ending December 31, 2005, the sum of (i) the Pro Forma
Revolving Amount minus (ii) the aggregate amount of Revolving Loans
outstanding on the close of business on December 31, 2005 and
(b) for any subsequent fiscal year, the sum of (i) the amount referred to in
the foregoing subclause (a)(i) minus the sum of the Applicable Revolving
Reduction Amounts for each fiscal year preceding such subsequent fiscal year
minus (ii) the aggregate amount of Revolving Loans outstanding on the close
of business on the last day of such subsequent fiscal year.
“Available Cash” means for any Reference Period, for the Borrower and the
Subsidiaries (determined on a consolidated basis, without duplication, for such Reference
Period), the sum (which may be negative) of Adjusted EBITDA for such Reference Period
minus (a) the sum of
(i) Cash Interest Expense for such Reference Period,
(ii) Capital Expenditures made during such Reference Period, excluding
any Capital Expenditures financed with the proceeds of (A) Indebtedness
permitted hereunder and identified pursuant to Section 5.01(c) as having
been applied to finance Capital Expenditures (other than any Capital
Expenditures financed with the proceeds of Revolving Loans), (B) issuances
of Equity Interests, (C) permitted sales of assets or (D) casualty events),
(iii) the aggregate consideration of the type described in clause (a)
of the definition of “Purchase Price” in this Section in respect of
Permitted Acquisitions made during such Reference Period, excluding any
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such
consideration financed with the proceeds of (A) Indebtedness permitted
hereunder and identified pursuant to Section 5.01(c) as having been applied
to finance Permitted Acquisitions, (B) issuances of Equity Interests or (C)
permitted sales of assets, net of any Recoveries in respect of such
Permitted Acquisitions not included in Adjusted EBITDA,
(iv) Investments (other than Exempt Investments or Permitted
Acquisitions during such Reference Period), net of any Recoveries in
respect of such Investments not included in Adjusted EBITDA,
(v) scheduled payments of principal of such Person’s Indebtedness made
or payable during such Reference Period,
(vi) voluntary prepayments of Indebtedness of such Person made during
such Reference Period (other than prepayments of Revolving Loans) and
prepayments of the Loans made pursuant to paragraphs (c) and (d) of Section
2.10 during such Reference Period (other than prepayments of Revolving
Loans),
(vii) Taxes paid in cash for such Reference Period,
(viii) Transaction Expenses incurred during such Reference Period,
(ix) the cash cost of any extraordinary or unusual losses, during such
Reference Period and
(x) payments made in cash during such Reference Period on account of
non-cash losses or non-cash charges expensed during or prior to such
Reference Period,
plus (b) the sum of (i) the cash amount realized in respect of
extraordinary or unusual gains, and the cash amount realized on gains on sales of
assets other than in the ordinary course of business, during such Reference Period
and (ii) cash received during such Reference Period on account of non-cash gains or
non-cash income excluded from Adjusted EBITDA in any period prior to such Reference
Period.
“Pro Forma Revolving Amount” means an amount equal to the sum of (i) the
outstanding Revolving Loans on the Closing Date ($29,507,010) plus (y) the aggregate
Transaction Expenses associated with the Recapitalization paid after the Closing Date and on
or before December 7, 2004, consisting of $14,201,901 applied to the payment of certain
breakage fees and $10,046,161 applied to the redemption of certain options as described in
the Registration Statement. The total Pro Forma Revolving Amount is equal to $53,755,072.
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“Repricing Transaction” has the meaning assigned to such term in Section
2.10(f).
2.04. Section 2.10 of the Credit Agreement shall be amended as follows:
A. Section 2.10(a) of the Credit Agreement shall be amended in its entirety to read as
follows:
“(a) Voluntary Prepayments. The Borrower shall have the right at any time and
from time to time to prepay any Borrowing in whole or in part, subject to the requirements
of this Section, provided that the Tranche D Term Loans may not be voluntarily
prepaid unless, prior to or concurrently with such voluntary prepayment, the aggregate
outstanding principal amount of all Tranche B Term Loans, Tranche C Term Loans and
Incremental Loans, all accrued and unpaid interest thereon and all other amounts payable
hereunder with respect thereto shall have been paid in full, provided,
further, that any voluntary prepayment of Tranche B Term Loans with the proceeds of
a Repricing Transaction shall be accompanied by a prepayment fee as and to the extent
provided in Section 2.10(f).”
B. Section 2.10(d) of the Credit Agreement shall be amended in its entirety to read as
follows:
“(d) Mandatory Prepayment of Excess Cash Flow. The Borrower shall prepay the
Loans within 120 days after the end of each fiscal year of the Borrower commencing with the
fiscal year ending on December 31, 2005, in an aggregate amount equal to the sum of the
Applicable Prepayment Percentage of (i) any increase in Cumulative Distributable Cash of the
Borrower and the Subsidiaries during such fiscal year (it being understood that the
determination of the amount referred to in clause (i) of the definition of “Cumulative
Distributable Cash” in Section 1.01 shall not be deemed to be an increase in Cumulative
Distributable Cash for purposes hereof) minus (ii) the sum of (A) the aggregate
amount of prepayments (if any) of Term Loans made during such fiscal year pursuant to
paragraph (c) above (to the extent such prepayments have not already been deducted in
determining Cumulative Distributable Cash for the Reference Period that includes such fiscal
year) plus (B) the Applicable Revolving Reduction Amount for such fiscal year.”
C. A new clause (f) shall be inserted at the end of said Section 2.10, immediately after
clause (e), to read as follows:
“(f) Prepayments in Connection with Repricing Transactions. Any prepayment in
full of the Tranche B Term Loans on or prior to the first anniversary of the Amendment No. 1
Effective Date with the proceeds of any Repricing Transaction shall
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be accompanied by a
prepayment fee equal to 1.00% of the principal amount prepaid. A “Repricing
Transaction” means the incurrence by any Loan Party on any Indebtedness (including,
without limitation, any Incremental Loan or other new or additional term loans under this
Agreement) that is secured or is broadly marketed or syndicated to banks and other
institutional investors in financings similar to the financing provided pursuant
to this Agreement (i) having an effective interest rate margin or weighted average
yield (to be determined by the Administrative Agent consistent with generally accepted
financial practice, after giving effect to, among other factors, margins, upfront or similar
fees or original issue discount shared with all lenders or holders thereof, but excluding
the effect of any arrangement, structuring, syndication or other fees payable in connection
therewith that are not shared with all lenders or holders thereof) that is less than the
Applicable Rate for, or weighted average yield (to be determined by the Administrative Agent
on the same basis) of, the Tranche B Term Loans, and (ii) the proceeds of which are used, in
whole or in part, to prepay all outstanding principal of the Tranche B Term Loans.”
Section 3. Representations and Warranties. The Borrower represents and warrants to
the Lenders and the Administrative Agent that (i) the representations and warranties set forth in
Article III of the Credit Agreement are true and complete on the date hereof as if made on and as
of the date hereof (or, if any such representation or warranty is expressly stated to have been
made as of a specific date, such representation or warranty shall be true and correct as of such
specific date), and as if each reference in said Article III to “this Agreement” included reference
to this Amendment No. 1 and (ii) no Default or Event of Default has occurred and is continuing and
(iii) the outstanding Revolving Loans on the Closing Date was $29,507,010 and the aggregate
Transaction Expenses associated with the Recapitalization paid after the Closing Date and on or
before December 7, 2004 consisted of $14,201,901 applied to the payment of certain breakage fees
and $10,046,161 applied to the redemption of certain options as described in the Registration
Statement.
Section 4. Conditions to Effectiveness. The amendments set forth in Section 2 hereof
are subject to the receipt by the Administrative Agent of duly executed and delivered counterparts
of this Amendment from the Borrower and the Administrative Agent, and duly executed and delivered
authorizations to the Administrative Agent from the Required Lenders and each Tranche B Lender.
Section 5. Confirmation of Guarantee and Security. Each of the Subsidiary Loan
Parties hereby confirms that the obligations of the Borrower under the Credit Agreement as amended
hereby shall be entitled to the benefits of their Guarantee set forth in the Subsidiary Guarantee
Agreement in accordance with its terms, and each of the Borrower and the Subsidiary Loan Parties
hereby confirms that the obligations of the Loan Parties under the Credit Agreement and the
Subsidiary Guarantee Agreement as amended and confirmed hereby shall be entitled to the benefits of
the collateral security provided by the Security Documents in accordance with their respective
terms.
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Section 6. Miscellaneous. Except as herein provided, the Credit Agreement shall
remain unchanged and in full force and effect. This Amendment No. 1 may be executed in any number
of counterparts, all of which taken together shall constitute one and the same amendatory
instrument and any of the parties hereto may execute this Amendment No. 1 by signing any such
counterpart. This Amendment No. 1 shall be governed by, and construed in accordance with, the law
of the State of New York.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to Credit Agreement to
be duly executed and delivered as of the day and year first above written.
| IOWA TELECOMMUNICATIONS SERVICES, INC. |
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| By: | /s/ Xxxxx X. Knock | |||
| Name: | Xxxxx X. Knock | |||
| Title: | Vice-President, Chief Financial Officer, & Treasurer | |||
| GUARANTORS IOWA TELECOM COMMUNICATIONS, INC. |
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| By: | /s/ Xxxxx X. Knock | |||
| Name: | Xxxxx X. Knock | |||
| Title: | Vice-President, Chief Financial Officer, & Treasurer | |||
| IOWA TELECOM DATA SERVICES, L.C. Iowa Telecommunications Services, Inc., Sole Member |
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| By: | /s/ Xxxxx X. Knock | |||
| Name: | Xxxxx X. Knock | |||
| Title: | Vice-President, Chief Financial Officer, & Treasurer | |||
| IOWA TELECOM TECHNOLOGIES, LLC Iowa Telecommunications Services, Inc., Sole Member |
||||
| By: | /s/ Xxxxx X. Knock | |||
| Name: | Xxxxx X. Knock | |||
| Title: | Vice-President, Chief Financial Officer, & Treasurer | |||
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| IT COMMUNICATIONS, LLC Iowa Telecom Communications, Inc., Sole Member |
||||
| By: | /a/ Xxxxx X. Knock | |||
| Name: | Xxxxx X. Knock | |||
| Title: | Vice-President, Chief Financial Officer, & Treasurer | |||
| ADMINISTRATIVE AGENT RURAL TELEPHONE FINANCE COOPERATIVE, as Administrative Agent |
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| By: | /s/ J. Xxxxxx Xxx | |||
| Name: | J. Xxxxxx Xxx | |||
| Title: | Assistant Secretary-Treasurer | |||
Amendment No. 1
