EXHIBIT 10.14
CREDIT AGREEMENT
DATED AS OF NOVEMBER 1, 2001
By and Among
D & E COMMUNICATIONS, INC.
as Borrower,
and
COBANK, ACB,
as Administrative Agent and a Lender,
and
the other Lenders referred to herein
TABLE OF CONTENTS
SECTION 1 AMOUNTS AND TERMS OF LOANS.............................................................................. 1
1.1 Loans........................................................................................... 1
(A) Term Loan.............................................................................. 1
(B) Revolving Loan......................................................................... 1
(C) Notes.................................................................................. 2
(D) Advances............................................................................... 2
1.2 Interest........................................................................................ 2
(A) Interest Options....................................................................... 2
(B) Applicable Margins..................................................................... 2
(C) Interest Periods....................................................................... 3
(D) Calculation and Payment................................................................ 3
(E) Default Rate of Interest............................................................... 4
(F) Excess Interest........................................................................ 4
(G) Selection, Conversion or Continuation of Loans; LIBOR and Long-Term Fixed
Rate Availability...................................................................... 4
1.3 Notice of Borrowing, Conversion or Continuation of Loans........................................ 5
1.4 Fees and Expenses............................................................................... 5
(A) Revolving Loan Commitment Fee.......................................................... 5
(B) Certain Other Fees..................................................................... 5
(C) Breakage Fees.......................................................................... 5
(D) Expenses and Attorneys Fees............................................................ 6
1.5 Payments........................................................................................ 6
1.6 Repayments and Reduction of Loans and Commitments............................................... 7
(A) Scheduled Repayments and Reductions of Term Loan and Revolving Loan Commitment......... 7
(B) Reductions Resulting From Mandatory Repayments......................................... 8
(C) Voluntary Reduction of Revolving Loan Commitment....................................... 8
(D) Mandatory Repayments................................................................... 8
1.7 Voluntary Prepayments........................................................................... 9
1.8 Application of Repayments; Payment of Breakage Fees, Etc........................................ 9
1.9 Loan Accounts................................................................................... 9
1.10 Changes in LIBOR Rate Availability.............................................................. 9
1.11 Capital Adequacy and Other Adjustments.......................................................... 10
1.12 Optional Prepayment/Replacement of Lender in Respect of Increased Costs......................... 10
1.13 Taxes........................................................................................... 11
(A) No Deductions.......................................................................... 11
(B) Foreign Lenders........................................................................ 11
1.14 Changes in Tax Laws............................................................................. 12
1.15 Term of This Agreement.......................................................................... 13
SECTION 2 AFFIRMATIVE COVENANTS................................................................................... 13
2.1 Compliance With Laws............................................................................ 13
2.2 Maintenance of Books and Records; Properties; Insurance......................................... 13
2.3 Inspection; Lender Meeting...................................................................... 14
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2.4 Legal Existence, Etc........................................................................... 14
2.5 Use of Proceeds................................................................................ 14
2.6 Further Assurances............................................................................. 14
2.7 CoBank Patronage Capital....................................................................... 14
SECTION 3 NEGATIVE COVENANTS..................................................................................... 15
3.1 Indebtedness................................................................................... 15
3.2 Liens and Related Matters...................................................................... 15
(A) No Liens.............................................................................. 15
(B) No Other Negative Pledges............................................................. 15
3.3 Investments.................................................................................... 15
3.4 Contingent Obligations......................................................................... 16
3.5 Restricted Junior Payments..................................................................... 16
3.6 Restriction on Fundamental Changes............................................................. 16
3.7 Disposal of Assets or Subsidiary Stock......................................................... 17
3.8 Transactions with Affiliates................................................................... 17
3.9 Conduct of Business............................................................................ 18
3.10 Fiscal Year.................................................................................... 18
3.11 Management Fees and Compensation............................................................... 18
SECTION 4 FINANCIAL COVENANTS AND REPORTING...................................................................... 18
4.1 Total Leverage Ratio........................................................................... 18
4.2 Indebtedness to Total Capitalization Ratio..................................................... 18
4.3 Financial Statements and Other Reports......................................................... 18
(A) Quarterly Financials.................................................................. 18
(B) Year-End Financials................................................................... 19
(C) Borrower Compliance Certificate....................................................... 19
(D) Accountants' Reliance Letter.......................................................... 19
(E) Accountants' Reports.................................................................. 19
(F) Projections........................................................................... 19
(G) SEC Filings and Press Releases........................................................ 19
(H) Events of Default, Etc................................................................ 19
(I) Litigation............................................................................ 20
(J) Supplemented Schedules; Notice of Corporate Changes................................... 20
(K) Regulatory and Other Notices.......................................................... 20
(L) Other Information..................................................................... 20
4.4 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement............. 20
SECTION 5 REPRESENTATIONS AND WARRANTIES......................................................................... 20
5.1 Disclosure..................................................................................... 21
5.2 No Material Adverse Effect..................................................................... 21
5.3 Organization, Powers, Authorization and Good Standing.......................................... 21
(A) Organization and Powers............................................................... 21
(B) Authorization; Binding Obligation..................................................... 21
(C) Qualification......................................................................... 21
5.4 Compliance of Agreement, Loan Documents and Borrowings with Applicable Law..................... 22
5.5 Compliance with Law; Governmental Approvals.................................................... 22
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5.6 Tax Returns and Payments....................................................................... 22
5.7 Environmental Matters.......................................................................... 22
5.8 Financial Statements........................................................................... 22
5.9 Intellectual Property.......................................................................... 23
5.10 Litigation, Investigations, Audits, Etc........................................................ 23
5.11 Employee Labor Matters......................................................................... 23
5.12 Employee Benefit Plans......................................................................... 23
5.13 Communications Regulatory Matters.............................................................. 24
5.14 Solvency....................................................................................... 24
5.15 Investment Company Act; Public Utility Holding Act............................................. 24
5.16 Certain Agreements............................................................................. 25
5.17 Subsidiaries................................................................................... 25
5.18 Title to Properties............................................................................ 25
SECTION 6 EVENTS OF DEFAULT AND RIGHTS AND REMEDIES.............................................................. 25
6.1 Event of Default............................................................................... 25
(A) Payment............................................................................... 25
(B) Default in Other Agreements........................................................... 25
(C) Breach of Certain Provisions.......................................................... 26
(D) Breach of Warranty.................................................................... 26
(E) Other Defaults Under Loan Documents................................................... 26
(F) Involuntary Bankruptcy; Appointment of Receiver, Etc.................................. 26
(G) Voluntary Bankruptcy; Appointment of Receiver; Etc.................................... 26
(H) Governmental Liens.................................................................... 26
(I) Judgment and Attachments.............................................................. 27
(J) Dissolution........................................................................... 27
(K) Solvency.............................................................................. 27
(L) Injunction............................................................................ 27
(M) ERISA; Pension Plans.................................................................. 27
(N) Environmental Matters................................................................. 27
(O) Invalidity of Loan Documents.......................................................... 27
(P) Licenses and Permits.................................................................. 28
(Q) Change in Control..................................................................... 28
(R) Material Adverse Effect............................................................... 28
(S) Certain Material Contracts............................................................ 28
(T) Hedging Agreement..................................................................... 28
6.2 Suspension of Commitments...................................................................... 28
6.3 Acceleration................................................................................... 28
6.4 Rights of Collection........................................................................... 29
6.5 Consents....................................................................................... 29
6.6 Performance by Administrative Agent............................................................ 29
6.7 Set Off and Sharing of Payments................................................................ 29
6.8 Application of Payments........................................................................ 30
6.9 Adjustments.................................................................................... 30
SECTION 7 CONDITIONS TO LOANS.................................................................................... 30
7.1 Conditions to Initial Loan..................................................................... 30
(A) Executed Loan and Other Documents..................................................... 30
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(B) Closing Certificates; Opinions........................................................ 31
(C) Consents.............................................................................. 31
(D) Financial Matters..................................................................... 32
(E) Miscellaneous......................................................................... 32
7.2 Conditions to All Loans........................................................................ 33
SECTION 8 ASSIGNMENT AND PARTICIPATION........................................................................... 33
8.1 Assignments and Participations in Loans and Notes.............................................. 33
8.2 Administrative Agent........................................................................... 35
(A) Appointment........................................................................... 35
(B) Nature of Duties...................................................................... 35
(C) Rights, Exculpation, Etc.............................................................. 36
(D) Reliance.............................................................................. 37
(E) Indemnification....................................................................... 37
(F) Administrative Agent Individually..................................................... 37
(G) Notice of Default..................................................................... 37
(H) Successor Administrative Agent........................................................ 38
(I) Dissemination of Information.......................................................... 38
8.3 Amendments, Consents and Waivers for Certain Actions........................................... 39
8.4 Disbursement of Funds.......................................................................... 39
8.5 Disbursements of Advances; Payments............................................................ 39
(A) Pro Rata Treatment; Application....................................................... 39
(B) Availability of Lender's Pro Rata Share............................................... 39
(C) Return of Payments.................................................................... 40
SECTION 9 MISCELLANEOUS.......................................................................................... 40
9.1 Indemnities.................................................................................... 40
9.2 Amendments and Waivers......................................................................... 40
9.3 Notices........................................................................................ 41
9.4 Failure or Indulgence Not Waiver; Remedies Cumulative.......................................... 42
9.5 Marshaling; Payments Set Aside................................................................. 42
9.6 Severability................................................................................... 42
9.7 Lenders' Obligations Several; Independent Nature of Lenders' Rights............................ 42
9.8 Headings....................................................................................... 42
9.9 Governing Law.................................................................................. 42
9.10 Successors and Assigns......................................................................... 42
9.11 No Fiduciary Relationship...................................................................... 43
9.12 Construction................................................................................... 43
9.13 Confidentiality................................................................................ 43
9.14 Consent to Jurisdiction and Service of Process................................................. 43
9.15 Waiver of Jury Trial........................................................................... 44
9.16 Survival of Warranties and Certain Agreements.................................................. 44
9.17 Entire Agreement............................................................................... 44
9.18 Counterparts; Effectiveness.................................................................... 45
9.19 Liability Unconditional........................................................................ 45
SECTION 10 DEFINITIONS........................................................................................... 45
10.1 Certain Defined Terms.......................................................................... 45
10.2 Other Definitional Provisions.................................................................. 56
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SCHEDULES
Schedule 3.3 Existing Investments
Schedule 3.9 Transactions with Affiliates
Schedule 5.4 Governmental Approvals
Schedule 5.5 Compliance with Law
Schedule 5.6 Tax Returns and Payments
Schedule 5.10 Litigation, Etc.
Schedule 5.11 Employee Labor Matters
Schedule 5.13(A) License Information
Schedule 5.16 Certain Agreements
Schedule 5.17 Subsidiaries
EXHIBITS
Exhibit 1.3 Form of Notice of Borrowing/Conversion/Continuation
Exhibit 4.3(C) Form of Compliance Certificate
Exhibit 10.1(A) Form of Term Loan Promissory Note
Exhibit 10.1(B) Form of Revolving Loan Promissory Note
Exhibit 10.1(D) Form of Lender Addition Agreement
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INDEX OF DEFINED TERMS
Defined Term Defined in Section
------------ ------------------
Accounting Changes Section 4.5
Adjustment Date Section 10.1
Administrative Agent Section 10.1
Affected Lender Section 1.12
Affiliate Section 10.1
Agreement Section 10.1
Annual Operating Cash Flow Section 10.1
Applicable Commitment Fee Percentage Section 10.1
Applicable Law Section 10.1
Asset Disposition Section 10.1
Bankruptcy Code Section 10.1
Base Rate Section 10.1
Base Rate Loan Section 10.1
Benefited Lender Section 6.9
Borrowers Preamble
Breakage Fee Section 1.4(C)
Business Day Section 10.1
Calculation Period Section 10.1
Cash Balances Section 10.1
Cash Equivalents Section 10.1
Certificate of Exemption Section 1.13(B)
Closing Date Section 10.1
CoBank Preamble
Communications Act Section 10.1
Communications System Section 10.1
Compliance Certificate Section 4.3(C)
Contingent Obligation Section 10.1
Default Section 10.1
Environmental Laws Section 10.1
Equity Section 10.1
Event of Default Section 6.1
Facility Section 10.1
Facilities Section 10.1
FCC Section 10.1
FDPA Section 2.2
Federal Funds Rate Section 10.1
Foreign Lender Section 1.13(B)
Funding Date Section 7.2
GAAP Section 10.1
Governmental Approvals Section 10.1
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Governmental Authority Section 10.1
Hedging Agreement Section 10.1
Indebtedness Section 10.1
Indebtedness to Total Capitalization Ratio Section 10.1
Indemnitees Section 9.1
Intellectual Property Rights Section 5.9
Interest Period Section 1.2(C)
Investment Section 10.1
IRC Section 10.1
Lender(s) Section 10.1
Lender Addition Agreement Section 10.1
Letter of Non-Exemption Section 1.13(B)
LIBOR Section 10.1
LIBOR Loans Section 10.1
LIBOR Margin Section 10.1
Licenses Section 10.1
Lien Section 10.1
Loan(s) Section 10.1
Loan Commitment(s) Section 10.1
Loan Documents Section 10.1
Long-Term Fixed Rate Section 10.1
Long-Term Fixed Rate Loan Section 10.1
Material Adverse Effect Section 10.1
Material Contracts Section 10.1
Net Leverage Ratio Section 10.1
Net Proceeds Section 10.1
Note(s) Section 10.1
Notice of Borrowing/Conversion/Continuation Section 1.3
Obligations Section 10.1
Operating Cash Flow Section 10.1
PCS System Section 10.1
Permitted Encumbrances Section 10.1
Person Section 10.1
Prime Rate Section 10.1
Prior Indebtedness Recitals
Pro Rata Share Section 10.1
Projections Section 10.1
PUC Section 10.1
Replacement Lender Section 1.12(A)
Requisite Lenders Section 10.1
Revolving Loan(s) Section 10.1
Revolving Loan Commitment Section 10.1
Revolving Loan Expiration Date Section 10.1
Revolving Loan Facility Section 10.1
Revolving Note(s) Section 10.1
SEC Section 4.3(G)
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Statement Section 4.3(B)
Subsidiary Section 10.1
Subsidiary Borrowers Preamble
Tax Liabilities Section 1.13(A)
Term Loan(s) Section 10.1
Term Loan Commitment Section 10.1
Term Loan Facility Section 10.1
Term Loan Maturity Date Section 10.1
Term Note(s) Section 10.1
Total Assets Section 10.1
Total Capitalization Section 10.1
Total Lender Loan Commitment Section 10.1
Total Leverage Ratio Section 10.1
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CREDIT AGREEMENT
This CREDIT AGREEMENT (this "Agreement") is entered into as of November 1,
2001, among D & E COMMUNICATIONS, INC., a Pennsylvania corporation ("Borrower"),
COBANK, ACB (in its individual capacity ("CoBank")), as a Lender and in its
capacity as Administrative Agent, and such other Lenders as may become a party
to this 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 Lenders extend a term loan facility to
refinance all existing indebtedness of Borrower and its Subsidiaries (the "Prior
Indebtedness"), to provide funds for capital expenditures, general corporate
purposes and working capital needs of Borrower and its Subsidiaries and to
finance fees and expenses associated with the closing of the Loans; and
WHEREAS, Borrower desires that Lenders extend a revolving credit facility
to provide funds for capital expenditures, acquisitions, general corporate
purposes and working capital needs of the Borrower and its Subsidiaries; and
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 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. Each Lender, severally and not jointly, agrees to
lend to Borrower, on the date all conditions precedent set forth in Subsections
7.1 and 7.2 are satisfied or waived as provided herein, in a single advance its
Pro Rata Share of the Term Loan Commitment. Amounts borrowed under this
Subsection 1.1(A) that are repaid may not be reborrowed.
(B) Revolving Loan. Each Lender, severally and not jointly, 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 as
provided herein and ending on the Business Day immediately preceding the
Revolving Loan Expiration Date, its Pro Rata Share of each Revolving Loan;
provided that no Lender shall be required at any time to lend more than its
respective Pro Rata
Credit Agreement/D&E Communications, Inc.
Share of the Revolving Loan Commitment. Within the limits of the Revolving Loan
Commitment and this Subsection 1.1(B), amounts borrowed under this Subsection
1.1(B) may be prepaid and reborrowed at any time prior to the Revolving Loan
Expiration Date.
(C) Notes. Borrower shall execute and deliver to each Lender a Term
Note, dated the Closing Date, in the principal amount of such Lender's Pro Rata
Share of the Term Loan Commitment, and a Revolving Note, dated the Closing Date,
in the principal amount of such Lender's Pro Rata Share of the Revolving Loan
Commitment.
(D) 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. 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 and
Subsection 1.2 (C)), each Loan shall accrue interest as follows:
(1) as a Base Rate Loan, at the Base Rate;
(2) as a LIBOR Loan, for the applicable Interest Period (as
defined in Subsection 1.2 (C)), at the sum of LIBOR plus the LIBOR Margin
applicable on the first day of the applicable Interest Period or as applicable
from time to time as otherwise provided in Subsection 1.2(B); or
(3) with respect to Term Loans only, as a Long-Term Fixed Rate
Loan, at the Long-Term Fixed Rate.
Except as otherwise provided in Subsection 6.6, interest on all other
Obligations shall accrue at the Base Rate.
(B) Applicable Margins. The applicable LIBOR Margin for each Loan
shall be for each Calculation Period the applicable per annum percentage set
forth in the pricing table below opposite the Net Leverage Ratio of Borrower;
provided, that effective upon the occurrence of an Event of Default and until
such Event of Default is cured or waived the applicable LIBOR Margin shall be
1.750% per annum.
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Credit Agreement/D&E Communications, Inc.
PRICING TABLE
Net
Leverage Ratio LIBOR Margin
Greater than or = 3.00:1 1.750%
Greater than or = 2.50:1 less than 3.00:1 1.500%
less than 2.50:1 1.250%
(C) Interest Periods. Each LIBOR Loan may be obtained for a one
(1), two (2), three (3) or six (6) month period and each Long-Term Fixed Rate
Loan may be obtained for any period of one (1) year or longer (each such period
being an "Interest Period"). With respect to all LIBOR and Long-Term Fixed Rate
Loans:
(i) the Interest Period will commence on the date that
the LIBOR or Long-Term Fixed Rate Loan is made or the date on which
any portion of the Base Rate Loan is converted into a LIBOR or
Long-Term Fixed Rate 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 for a LIBOR
Loan 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 for a LIBOR Loan 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
(iv) no Interest Period shall be selected for any Loan
if, in order to make repayments required pursuant to Subsection
1.6(A), repayment of all or any portion of such Loan prior to the
expiration of such Interest Period would be necessary.
(D) Calculation and Payment. Interest on all LIBOR or Long-Term
Fixed Rate Loans and all other Obligations and the amount of any fees set forth
in Subsection 1.4 shall be calculated daily on the basis of a three hundred
sixty (360) day year for the actual number of days elapsed. The interest on the
Base Rate Loans shall be calculated daily on the basis of a three hundred
sixty-five or -six (365-6) day year for the actual number of days elapsed. The
date of funding or conversion to a Base Rate Loan and the first day of an
Interest Period with respect to a LIBOR or Long-Term Fixed Rate Loan shall be
included in the calculation of interest. The date of payment of any Loan and the
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Credit Agreement/D & E Communications, Inc.
last day of an Interest Period with respect to a LIBOR or Long-Term Fixed 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 (1) day's interest shall be charged.
Interest accruing on Base Rate Loans and Long-Term Fixed Rate Loans
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),
(iii) the last day of each applicable Interest Period for Long-Term Fixed Rate
Loans, and (iv) the Term Loan Maturity Date or the Revolving Loan Expiration
Date, as applicable, whether by acceleration or otherwise. Interest accruing on
each LIBOR or Long-Term Fixed Rate 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 (3) 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 Administrative
Agent or Requisite Lenders, after the occurrence of an Event of Default and for
so long as it continues, all Loans and other Obligations shall bear interest at
variable rates that are two percent (2.000%) in excess of the Base Rate.
(F) Excess Interest. Under no circumstances will the rate of
interest chargeable be in excess of the maximum amount permitted by law. If any
such excess interest is charged and paid in error, then the excess amount will
be promptly refunded.
(G) Selection, Conversion or Continuation of Loans; LIBOR and
Long-Term Fixed Rate Availability. Provided that no Default or Event of Default
has occurred and is then continuing, Borrower shall have the option to (i)
select all or any part of a new borrowing to be a LIBOR Loan or, if the Term
Loan, a Long-Term Fixed Rate Loan, in a principal amount equal to $2,000,000 or
any whole multiple of $500,000 in excess thereof, or a Base Rate Loan in a
principal amount equal to $1,000,000 or any whole multiple of $250,000 in excess
thereof, (ii) convert at any time all or any portion of a Base Rate Loan in a
principal amount equal to $2,000,000 or any whole multiple of $500,000 in excess
thereof into one or more LIBOR or, if the Term Loan, Long-Term Fixed Rate Loans,
(iii) upon the expiration of any Interest Period, convert all or any part of any
LIBOR or Long-Term Fixed Rate Loan into a Base Rate Loan, and (iv) upon the
expiration of its Interest Period, continue any LIBOR or Long-Term Fixed Rate
Loan in a principal amount of $2,000,000 or any whole multiple of $500,000 in
excess thereof into one or more LIBOR or Long-Term Fixed Rate Loans for such new
Interest Period(s) as selected by Borrower, subject to the other provisions
herein. Each LIBOR Loan must be made under either the Term Loan Facility or the
Revolving Loan Facility, but may not be made under both concurrently. Each
Long-Term Fixed Rate Loan may be made only under the Term Loan. During any
period in which any Default or Event of Default is continuing, as the Interest
Periods for LIBOR or Long-Term Fixed Rate Loans then in effect expire, such
Loans shall be converted into Base Rate Loans and the LIBOR and Long-Term Fixed
Rate options will not be available to Borrower until all Events of Default are
cured or waived. Notwithstanding the foregoing, there may be no more than a
total of six (6) Loans outstanding under the Facilities at any one time
(including, as a single Loan, all amounts under a single Facility accruing
interest at the Base Rate).
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Credit Agreement/D & E Communications, Inc.
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 Loans pursuant to Subsection 1.2(G), Borrower, shall give
Administrative Agent 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 a Base Rate Loan (or
any portion thereof), not later than 11:00 a.m. (Denver, Colorado time), two (2)
Business Days before the proposed borrowing, conversion or continuation is to be
effective or (ii), if requesting a borrowing of, a conversion to or a
continuation of a LIBOR or Long-Term Fixed Rate Loan, not later than 11:00 a.m.
(Denver time), three (3) Business 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 or Long-Term Fixed Rate
Loan to be converted or continued, the last day of the current Interest Period
therefor, (b) the effective date of such borrowing, conversion or
continuation (which shall be a Business 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 or Long-Term Fixed Rate Loan, and (e)
the Facility under which such borrowing, conversion or continuation is to be
made. In the event Borrower fails to elect a LIBOR or Long-Term Fixed Rate Loan
upon any advance hereunder or upon the termination of any Interest Period,
Borrower shall be deemed to have elected to have the amount of such advance
constitute a Base Rate Loan.
1.4 Fees and Expenses.
(A) Revolving Loan Commitment Fee. From the Closing Date, Borrower
shall pay Administrative Agent, for the benefit of all Lenders (based upon their
respective Pro Rata Shares of the Revolving Loan Commitment), an annual fee in
an amount equal to (i) the Revolving Loan Commitment less the average daily
outstanding balance of Revolving Loans during the preceding calendar quarter
multiplied by (ii) the Applicable Commitment Fee Percentage. 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 the fees specified in
that certain letter, dated September 7, 2001 by and between Borrower and
Administrative Agent, at such times and to such entities as specified in such
letter agreement.
(C) Breakage Fees. Upon any repayment or payment of a LIBOR Loan or
Long-Term Fixed Rate 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 Administrative Agent, for the benefit of all affected
Lenders, an amount (the "Breakage Fee") equal to (i) in connection with any
repayment or payment of a LIBOR Loan, the present value of any losses, expenses
and liabilities (including any loss (including interest paid)) sustained by each
such affected Lender in connection with the re-employment of such funds) that
any such affected Lender may sustain as a result of the payment of such Loan on
such day (the "Loss Amount") and (ii) in connection with any Long-Term Fixed
Rate Loan, the Loss Amount plus one-half of one percent (0.5%) of the amount
repaid.
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Credit Agreement/D&E Communications, Inc.
(D) Expenses and Attorneys Fees. Borrower agrees to pay
promptly all reasonable fees, costs and expenses (including those of attorneys)
incurred by Administrative Agent in connection with (i) any matters contemplated
by or arising out of the Loan Documents, and (ii) the continued administration
of the Loan Documents, including any such fees, costs and expenses incurred in
perfecting, maintaining, determining the priority of and releasing any security,
in connection with any amendments, modifications and waivers and any tax payable
in connection with any Loan Documents. In addition to fees due under Subsection
1.4(B), Borrower shall also reimburse on demand Administrative Agent and Lenders
for their respective out-of-pocket expenses (including reasonable attorneys'
fees and expenses and syndication costs and expenses) incurred in connection
with the transactions contemplated herein. Borrower agrees to pay promptly all
reasonable fees, costs and expenses incurred by Administrative Agent and Lenders
in connection with 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 and secured by the Collateral. Notwithstanding the foregoing,
Borrower's liability for attorney's fees, costs and expenses incurred by CoBank
in connection with the negotiation, documentation and closing of the Facilities
shall not exceed $50,000.
1.5 Payments. All payments by Borrower of the Obligations shall be made
in same day funds and delivered to Administrative Agent, for the benefit of
Administrative Agent and Lenders, as applicable, by wire transfer to the
following account or such other place as Administrative Agent may from time to
time designate:
CoBank, ACB
Greenwood Village, Colorado
ABA Number ▇▇▇▇-▇▇▇▇-▇
Reference: CoBank for the benefit of D & E Communications, Inc.
Borrower shall receive credit on the day of receipt for funds received by
Administrative Agent by 11:00 a.m. (Denver 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.
Borrower hereby authorizes Lenders to make (but Lenders shall not be
obligated to make) a Base Rate Loan under the Revolving Loan Facility, on the
basis of their respective Pro Rata Shares of 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) and 1.4(D) or elsewhere in
any Loan Document may be debited as a Base Rate Loan under the Revolving Loan
Facility after fifteen (15) days notice. After the occurrence of an Event of
Default, any such other fees, costs and expenses may be debited as a Base Rate
Loan under the Revolving Loan Facility without notice.
To the extent Borrower makes a payment or payments to Administrative
Agent for the ratable benefit of Lenders or for the benefit of Administrative
Agent in its individual capacity, which
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Credit Agreement/D&E Communications, Inc.
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 Administrative Agent.
1.6 Repayments and Reduction of Loans and Commitments.
(A) Scheduled Repayments and Reductions of Term Loan and
Revolving Loan Commitment.
(1) Term Loan. Commencing on September 30, 2004, Borrower
shall repay the aggregate outstanding principal balance of the Term Loan on the
last day of each calendar quarter occurring during each period set forth below
in the amount set forth opposite such period:
Quarterly Payment
Period Amount
------ ------
September 30, 2004 through and $1,250,000
including December 31, 2007
March 31, 2008 through and including $1,875,000
December 31, 2009
March 31, 2010 through and including $2,500,000
December 31, 2010
March 31, 2011 $3,750,000
June 30, 2011 $3,750,000, or such lesser amount, if any as may be
required to repay the aggregate outstanding principal
balance of the Term Loan Facility
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Credit Agreement/D&E Communications, Inc.
(2) Revolving Loan Commitment. The Revolving Loan
Commitment shall be permanently reduced on the last day of each calendar quarter
occurring during each period set forth below in the amount set forth opposite
such period (which reductions shall be in addition to those provided for in
Subsection 1.6(B) and, to the extent set forth therein, Subsection 1.6(C)):
Quarterly Reduction
Period Amount
------ ------
September 30, 2003 through and $1,250,000
including December 31, 2004
March 31, 2005 through and including $1,875,000
December 31, 2007
March 31, 2008 through and including $2,500,000
September 30, 2009
December 31, 2009 $2,500,000, or such lesser amount, if
any as may be required to repay the
aggregate outstanding principal balance
of the Revolving Loan Facility
(B) Reductions Resulting From Mandatory Repayments. [INTENTIONALLY
OMITTED].
(C) Voluntary Reduction of Revolving Loan Commitment. Borrower shall
have the right, upon at least three Business Days' notice to Administrative
Agent, to permanently reduce the then unused portion of the Revolving Loan
Commitment. Each reduction shall be in a minimum amount of at least $2,000,000,
or any whole multiple of $1,000,000 in excess thereof, and shall be applied as
to each Lender based upon its Pro Rata Share. Notwithstanding the foregoing, no
reduction shall be permitted if, after giving effect thereto and to any
prepayment made in connection therewith, the aggregate principal balance of
Revolving Loans then outstanding would exceed the Revolving Loan Commitment as
so reduced.
(D) Mandatory Repayments. On the date of each Revolving Loan Commitment
reduction provided for in this Subsection 1.6, Borrower shall repay Revolving
Loans in an amount at least sufficient to reduce the aggregate principal balance
of Revolving Loans then outstanding to the amount of the Revolving Loan
Commitment as so reduced. If at any time the aggregate outstanding amount of
Revolving Loans exceeds the Revolving Loan Commitment, Borrower shall repay
Revolving Loans in an amount at least sufficient to reduce the aggregate
principal balance of Revolving Loans then outstanding to the amount of the
Revolving Loan Commitment, and until such repayment is made, Lenders shall not
be obligated to make Loans. Any repayments pursuant to this Subsection 1.6(D)
shall be applied in accordance with Subsection 1.8, and shall be accompanied by
accrued interest on the amount repaid and any amount required pursuant to
Subsection 1.4(C).
8
Credit Agreement/D&E Communications, Inc.
1.7 Voluntary Prepayments. Subject to the provisions of Section 1.8, at
any time, with one day's notice, Borrower may prepay any Base Rate Loan, in
whole or in part, without penalty. Subject to the provisions of Section 1.8,
payment of the Breakage Fee pursuant to Subsection 1.4(C) and the notice
requirement in the following sentence, at any time Borrower may prepay any LIBOR
Loan or Long-Term Fixed Rate Loan, in whole or in part. Notice of any prepayment
of a LIBOR Loan or Long-Term Fixed Rate Loan shall be given not later than 11:00
a.m. (Denver 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 amount required
pursuant to Subsection 1.4(C).
1.8 Application of Repayments; Payment of Breakage Fees, Etc. All
repayments made pursuant to Section 1.7 shall be applied first to Loans
outstanding under the Revolving Loan Facility and then to Loans outstanding
under the Term Loan Facility. All 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 a Base Rate Loan and then to such LIBOR or Long-Term Fixed
Rate Loans as Borrower and Administrative Agent shall agree. All repayments
required or permitted hereunder shall be accompanied by payment of all
applicable Breakage Fees and accrued interest on the amount repaid. All
repayments applied to Loans outstanding under the Term Loan Facility shall be
applied to principal installments in the inverse order of maturity.
1.9 Loan Accounts. Administrative Agent will maintain loan account
records for (i) all Loans, interest charges and payments thereof, (ii) the
charging and payment of all fees, costs and expenses and (iii) 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
Lenders, provided that any failure by Administrative Agent 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 Administrative Agent shall have the continuing exclusive right to
apply and reapply payments to any amounts due hereunder in any manner it deems
appropriate.
1.10 Changes in LIBOR Rate Availability. If with respect to any
proposed Interest Period, Administrative Agent or any Lender (after consultation
with Administrative Agent) determines that deposits in dollars (in the
applicable amount) are not being offered to each Lender in the relevant market
for such Interest Period, Administrative Agent shall forthwith give notice
thereof to Borrower and Lenders, whereupon and until Administrative Agent
notifies Borrower that the circumstances giving rise to such situation no longer
exist, the obligations of any affected Lender to make its portion of such type
of LIBOR Loan 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 any Lender 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 one or more Lenders to honor its obligations hereunder to make or
maintain any LIBOR Loan, such Lender shall promptly give notice thereof to
Administrative Agent, and Administrative Agent shall promptly give
9
Credit Agreement/D&E Communications, Inc.
notice thereof to Borrower and all other Lenders. Thereafter, until
Administrative Agent notifies Borrower that such circumstances no longer exist,
(i) the obligations of the affected Lenders to make LIBOR Loans and the right of
Borrower to convert any Loan or continue any Loan as a LIBOR Loan shall be
suspended with respect to the affected Lenders and (ii) if any Lender may not
lawfully continue to maintain a LIBOR Loan to the end of the then current
Interest Period applicable thereto, the portion of such Loan held by the
affected Lender shall immediately be converted to the Base Rate Loan.
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 any Lender of making or maintaining a LIBOR Loan, then Administrative
Agent, on behalf of all affected Lenders, shall submit a certificate to Borrower
setting forth the amount and demonstrating the calculation of such increased
cost. Borrower shall pay the amount of such increased cost to Administrative
Agent for the benefit of the affected Lenders within fifteen (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 any Lender 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 any
Lender or any corporation controlling such Lender 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 such Lender or
any corporation controlling such Lender and thereby reducing the rate of return
on such Lender's or such corporation's capital as a consequence of its
obligations hereunder, then Borrower shall from time to time within fifteen (15)
days after notice and demand from such Lender (together with the certificate
referred to in the next sentence and with a copy to Administrative Agent) pay to
Administrative Agent, for the account of such Lender, additional amounts
sufficient to compensate such Lender for such reduction. A certificate as to the
amount of such cost and showing the basis of the computation of such cost
submitted by such Lender to Borrower and Administrative Agent 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 Optional Prepayment/Replacement of Lender in Respect of Increased
Costs. Within fifteen (15) days after receipt by Borrower of written notice and
demand from any Lender (an "Affected Lender") for payment of additional costs as
provided in Subsection 1.11 and 1.14, Borrower may, at its option, notify
Administrative Agent and such Affected Lender of its intention to do one of the
following:
(A) Borrower may obtain, at Borrower's expense, a replacement
Lender ("Replacement Lender") for such Affected Lender, which Replacement Lender
shall be reasonably satisfactory to Administrative Agent. In the event Borrower
obtains a Replacement Lender within
10
Credit Agreement/D & E Communications, Inc.
ninety (90) days following notice of its intention to do so, the Affected Lender
shall sell and assign its Loans and its obligations under the Loan Commitments
to such Replacement Lender, provided that Borrower has reimbursed such Affected
Lender for its increased costs for which it is entitled to reimbursement under
this Agreement through the date of such sale and assignment; or
(B) Borrower may prepay in full all outstanding Obligations owed
to such Affected Lender and terminate such Affected Lender's Pro Rata Share of
the Loan Commitments, in which case the Loan Commitments will be permanently
reduced by the amount of such Pro Rata Share. Borrower shall, within ninety (90)
days following notice of its intention to do so, prepay in full all outstanding
Obligations owed to such Affected Lender (including all applicable Breakage Fees
and such Affected Lender's increased costs for which it is entitled to
reimbursement under this Agreement through the date of such prepayment), and
terminate such Affected Lender's obligations under the Loan Commitments. Any
such prepayment pursuant to this Subsection 1.12(B) shall be applied in
accordance with Subsection 1.8 and shall be accompanied by payment of all
applicable Breakage Fees and accrued interest on the amount repaid.
1.13 Taxes.
(A) 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 (all such taxes, levies,
imposts, deductions, charges or withholdings and all liabilities with respect
thereto excluding, however, all taxes imposed on income or net income and all
liabilities with respect thereto, herein "Tax Liabilities"), excluding, however,
taxes imposed on the income or net income of a Lender or Administrative Agent
and all liabilities with respect thereto. If Borrower shall be required by law
to deduct any such Tax Liabilities from or in respect of any sum payable
hereunder to any Lender or Administrative Agent, then, except as provided in
Subsection 1.13(B), the sum payable hereunder shall be increased as may be
necessary so that, after making all required deductions, such Lender or
Administrative Agent receives an amount equal to the sum it would have received
had no such deductions been made.
(B) Foreign Lenders. Each Lender organized under the laws of a
jurisdiction outside the United States (a "Foreign Lender") as to which payments
to be made under this Agreement or under the Notes are exempt from United States
withholding tax or are subject to United States withholding tax at a reduced
rate under an applicable statute or tax treaty shall provide to Borrower and
Administrative Agent (1) a properly completed and executed Internal Revenue
Service Form W-8 BEN or other applicable form, certificate or document
prescribed by the Internal Revenue Service of the United States certifying as to
such Foreign Lender's entitlement to such exemption or reduced rate of
withholding with respect to payments to be made to such Foreign Lender under
this Agreement and under the Notes or Form W-8 ECI or other applicable form,
certificate or document presented by the Internal Revenue Service of the United
States certifying that payments made to such Foreign Lender are not subject to
withholding because they are effectively connected with the conduct of a trade
or business in the United States (each a "Certificate of Exemption") or (2) a
letter from any such Foreign Lender stating that it is not entitled to any such
exemption or reduced rate of withholding (a "Letter of Non-Exemption"). Prior to
becoming a Lender under this Agreement and within fifteen (15) days after a
reasonable written request of Borrower, or Administrative Agent
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Credit Agreement/D & E Communications, Inc.
from time to time thereafter, each Foreign Lender that becomes a Lender under
this Agreement shall provide a Certificate of Exemption or a Letter of
Non-Exemption to Borrower and Administrative Agent.
If a Foreign Lender is entitled to an exemption with respect to
payments to be made to such Foreign Lender under this Agreement (or to a reduced
rate of withholding) and does not provide a Certificate of Exemption to Borrower
and Administrative Agent within the time periods set forth in the preceding
paragraph, Borrower shall withhold taxes from payments to such Foreign Lender at
the applicable statutory rates and Borrower shall not be required to pay any
additional amounts as a result of such withholding, provided that all such
withholding shall cease or be reduced, as appropriate, upon delivery by such
Foreign Lender of a Certificate of Exemption to Borrower and Administrative
Agent.
1.14 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 Administrative Agent or any Lender with any request or directive
(whether or not having the force of law) from any Governmental Authority:
(i) does or shall subject Administrative Agent or any Lender
to any tax of any kind whatsoever with respect to this Agreement, the
other Loan Documents or any Loans made hereunder, or change the basis
of taxation of payments to Administrative Agent or such Lender of
principal, fees, interest or any other amount payable hereunder (except
for taxes imposed on income or net income and all liabilities with
respect thereto, or franchise taxes imposed in lieu of such income
taxes and all liabilities with respect thereto, imposed generally by
federal, state, local or foreign 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 Administrative Agent or
such Lender); or
(ii) does or shall impose on Administrative Agent or any
Lender 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 any
Administrative Agent or any such Lender of making or continuing any
Loan, or to reduce any amount receivable hereunder, then, in any such
case, Borrower shall promptly pay to Administrative Agent or such
Lender, upon its demand, any additional amounts necessary to compensate
Administrative Agent or such Lender, on an after-tax basis, for such
additional cost or reduced amount receivable, as determined by
Administrative Agent or such Lender with respect to this Agreement or
the other Loan Documents. If Administrative Agent or such Lender
becomes entitled to claim any additional amounts pursuant to this
Subsection 1.14, it shall promptly notify Borrower of the event by
reason of which Administrative Agent or such Lender has become so
entitled. A certificate as to any additional amounts payable pursuant
to the foregoing sentence submitted by Administrative Agent or such
Lender to Borrower and Administrative Agent 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.
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Credit Agreement/D & E Communications, Inc.
1.15 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
Obligations relating to the Revolving Loan Facility shall become due and payable
on the Revolving Loan Expiration Date and all of the remaining Obligations shall
become due and payable on the Term Loan Maturity Date. This Agreement shall
remain in effect through and including, and shall terminate immediately after,
the date on which all Obligations shall have been indefeasibly and irrevocably
paid and satisfied in full.
SECTION 2
AFFIRMATIVE COVENANTS
Borrower covenants and agrees that so long as this Agreement is in
effect and until payment in full of all Obligations, unless Requisite Lenders
shall otherwise give their prior written consent, Borrower shall and shall cause
its 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 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 Subsidiaries is now or hereafter doing business, other
than those laws, rules, regulations and orders the noncompliance with which
could not reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect and (ii) obtain and maintain and will cause
its 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 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. 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 and will cause its Subsidiaries to keep adequate records and books of
account, in which complete entries will be made in accordance with GAAP
consistently applied, reflecting all financial transactions. Borrower will and
will cause its Subsidiaries to maintain or cause to be maintained in good
repair, working order and condition all material properties used in the business
of Borrower and its Subsidiaries, and will make or cause to be made all
appropriate repairs, renewals and replacements thereof. Borrower will and will
cause its Subsidiaries to maintain or cause to be maintained, with financially
sound and reputable insurers, public liability, property loss and damage and
business interruption insurance with respect to its business and properties and
the business and properties of its Subsidiaries against loss and damage of the
kinds and in amounts, with such deductibles and otherwise on such terms and
conditions, as customarily carried or maintained by corporations of established
reputation engaged in the communications industry in amounts, with such
deductibles, and otherwise on such terms and conditions as shall be reasonably
acceptable to Administrative Agent and will deliver evidence thereof to
Administrative Agent.
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Credit Agreement/D & E Communications, Inc.
2.3 Inspection; Lender Meeting. Borrower will and will cause its
Subsidiaries to permit any authorized representatives of any Lender (i) to visit
and inspect any of the properties of Borrower and its 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, at such reasonable times
during normal business hours and as often as may be reasonably requested.
Without in any way limiting the foregoing, Borrower will and will cause its
Subsidiaries to participate and will cause its key management personnel to
participate in a meeting with Administrative Agent and Lenders at least once
during each year, which meeting shall be held at such time and such place as may
be reasonably requested by Administrative Agent and consented to by Borrower,
which consent shall not be unreasonably withheld. Borrower, each of its
Subsidiaries, Administrative Agent and Lenders shall be responsible for the
payment of their respective expenses in connection with any such meeting.
2.4 Legal Existence, Etc. Borrower will and will cause its 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 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, from time to time, do, execute
and deliver all such additional and further acts, documents and instruments as
Administrative Agent or any Lender reasonably requests to consummate the
transactions contemplated hereby and to vest completely in and assure
Administrative Agent and Lenders of their respective rights under this Agreement
and the other Loan Documents.
2.7 CoBank Patronage Capital. So long as CoBank is a Lender hereunder,
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. Section 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. CoBank's Pro Rata
Share of the Loans and other Obligations due to CoBank shall be secured by a
statutory first lien on all equity which Borrower may now own or hereafter
acquire in CoBank. Such equity shall not, however, constitute security for the
Obligations due to any other Lender. CoBank shall not be obligated to set off or
otherwise apply such equities to Borrower's obligations to CoBank.
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Credit Agreement/D & E Communications, Inc.
SECTION 3
NEGATIVE COVENANTS
Borrower covenants and agrees that so long as this Agreement is in
effect and until payment in full of all Obligations, unless Requisite Lenders
shall otherwise give their prior written consent, Borrower shall perform and
comply with, and shall cause its Subsidiaries to perform and comply with, all
covenants in this Section 3.
3.1 Indebtedness. Borrower will not and will not permit its
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) Indebtedness incurred in connection with a Hedging
Agreement with a Lender;
(C) Contingent Obligations permitted by Section 3.4;
(D) Indebtedness under purchase money security agreements
and capital leases or other unsecured Indebtedness in
an amount not to exceed $10,000,000 in the aggregate
at any one time;
(E) Indebtedness which is expressly subordinate in right
of payment to the Obligations hereunder on terms and
conditions satisfactory to Requisite Lenders in their
sole discretion; and
provided, that none of the Indebtedness permitted to be incurred by this Section
shall restrict, limit or otherwise encumber (by covenant or otherwise) the
ability of any Subsidiary of Borrower to make any payment to Borrower or any
other Subsidiary (in the form of dividends, intercompany advances or otherwise)
for the purpose of enabling Borrower to pay the Obligations.
3.2 Liens and Related Matters.
(A) No Liens. Borrower will not and will not permit its
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
Subsidiaries, whether now owned or hereafter acquired, or any income or profits
therefrom, except Permitted Encumbrances.
(B) No Other Negative Pledges. [INTENTIONALLY OMITTED]
3.3 Investments. Borrower will not and will not permit its Subsidiaries
directly or indirectly to make or own any Investment in any Person except:
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Credit Agreement/D & E Communications, Inc.
(A) Borrower and its Subsidiaries may make and own Investments in
Cash Equivalents; provided that neither Borrower nor any of its Subsidiaries
shall incur any obligation to any Person which could subject such Cash
Equivalents (other than deposit accounts in which no more than $20,000 is held
overnight) to set off rights;
(B) obligations of or equities in CoBank, as set forth in
Subsection 2.7;
(C) loans or advances to directors, officers and employees of
Borrower or any Subsidiary thereof made in the ordinary course of business that
do not in the aggregate exceed $1,000,000 at any time outstanding;
(D) current assets arising from the sale of goods and services in
the ordinary course of business of the Borrower and its Subsidiaries;
(E) other Investments in Communications Systems (whether in
Subsidiaries or otherwise) in an aggregate amount at any time not in excess of
$10,000,000; and
(F) existing Investments, as set forth on Schedule 3.3.
3.4 Contingent Obligations. Borrower will not and will not permit its
Subsidiaries directly or indirectly to create or become or be liable with
respect to any Contingent Obligation except those:
(A) Contingent Obligations in favor of Administrative Agent for
the benefit of Administrative Agent and Lenders;
(B) resulting from endorsement of negotiable instruments for
collection in the ordinary course of business;
(C) arising with respect to customary indemnification obligations
incurred in connection with permitted Asset Dispositions;
(D) incurred in the ordinary course of business with respect to
surety and appeal bonds, performance and return-of-money bonds and other similar
obligations not exceeding at any time outstanding $2,500,000 in aggregate
liability;
(E) Contingent Obligations with respect to Indebtedness permitted
pursuant to Section 3.1; and
(F) Contingent Obligations existing on the Closing Date.
3.5 Restricted Junior Payments. [INTENTIONALLY OMITTED].
3.6 Restriction on Fundamental Changes. Borrower will not and will not
permit its Subsidiaries directly or indirectly to: (i) amend, modify or change
any provision of its articles or certificate of incorporation or organization,
as applicable, its bylaws, operating agreement or
16
Credit Agreement/D & E Communications, Inc.
partnership agreement, as applicable or the terms of any class or series of its
capital stock or equity, other than in a manner that could not reasonably be
expected to adversely affect the Lenders, (ii) enter into any transaction of
merger or consolidation, except 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; or (ii)
liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution).
3.7 Disposal of Assets or Subsidiary Stock. Borrower will not and will
not permit its Subsidiaries directly or indirectly to: convey, sell, lease,
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
Subsidiary whether now owned or hereafter acquired, except for (i) bona fide
sales of inventory to customers for fair value in the ordinary course of
business and dispositions of obsolete equipment not used or useful in the
business, (ii) fair market value sales of Cash Equivalents, (iii) the transfer,
sale, lease, assignment or other disposition of assets to Borrower or any
wholly-owned Subsidiary of Borrower, (iv) the sale or discount without recourse
of accounts receivable arising in the ordinary course of business in connection
with the compromise or collection thereof, (v) sales of the Investments listed
on Schedule 3.3, and (vi) all other dispositions of assets if all of the
following conditions are met: (a) the aggregate market value of assets sold in
any one transaction or series of related transaction for any calendar year does
not exceed $1,000,000 for Borrower and its Subsidiaries; (b) the consideration
received is at least equal to the fair market value of such assets; (c) the sole
consideration received is cash; (d) after giving effect to the sale or other
disposition of such assets, Borrower, on a consolidated basis with its
Subsidiaries, is in compliance on a pro forma basis with the covenants set forth
in Section 4 recomputed for the most recently ended month for which information
is available; and (e) no Default or Event of Default then exists or shall result
from such sale or other disposition.
3.8 Transactions with Affiliates. Borrower will not and will not permit
its 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, other than Borrower, or with
any director, officer or employee of Borrower or any Affiliate, except (i) as
set forth on Schedule 3.8; (ii) transactions in the ordinary course of and
pursuant to the reasonable requirements of the business of Borrower or such
Subsidiary and upon fair and reasonable terms which are fully disclosed to
Lenders 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; (iii) 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; or (iv) purchases of up to 30,000 shares of the Borrower's
capital stock from the Voting Trust Agreement among the Shareholders of Denver &
Ephrata Telephone & Telegraph Co, dated of 11/19/92, as amended on 12/31/95.
Notwithstanding the foregoing, upon the election of Administrative Agent or
Requisite Lenders no payments may be made with respect to any items set forth in
clauses (i) and (ii) of the preceding sentence upon the occurrence and during
the continuation of an Event of Default.
17
Credit Agreement/D & E Communications, Inc.
3.9 Conduct of Business. Borrower will not and will not permit its
Subsidiaries directly or indirectly to engage in any business other than
businesses of owning, investing in, constructing, managing and operating
Communications Systems, renting space in buildings owned by Borrower on the
Closing Date and owning and operating its existing flower shop.
3.10 Fiscal Year. Borrower will not and will not permit its
Subsidiaries to change its or their fiscal year from a fiscal year ending on
December 31 of each year.
3.11 Management Fees and Compensation. Borrower will not and will not
permit its Subsidiaries directly or indirectly to pay any management, consulting
or other similar fees to any Person, other than reasonable and customary
professional services fees to accountants, attorneys, engineers, architects and
financial consultants in the ordinary course of business.
SECTION 4
FINANCIAL COVENANTS AND REPORTING
Borrower covenants and agrees that so long as this Agreement is in
effect and until payment in full of all Obligations, unless Requisite Lenders
shall otherwise give their prior written consent, Borrower shall perform and
comply with, and shall cause its 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 quarterly on a consolidated basis.
4.1 Total Leverage Ratio. Commencing on the Closing Date, Borrower
shall achieve, measured on a consolidated basis at each fiscal quarter end, a
Total Leverage Ratio less than or equal to 3.50:1.00.
4.2 Indebtedness to Total Capitalization Ratio. Commencing on the
Closing Date, Borrower shall achieve, measured on a consolidated basis at each
fiscal quarter end, an Indebtedness to Total Capitalization Ratio less than
0.60:1.
4.3 Financial Statements and Other Reports. Borrower will and will
cause its 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).
Borrower will deliver each of the financial statements and other reports
described below to Administrative Agent (and each Lender in the case of the
financial statements and other reports described in Subsections 4.3(A), (B),
(C), (D), (E), (F), (G) and (H)).
(A) Quarterly Financials. As soon as available and in any event
within forty-five (45) days after the end of each of the first three fiscal
quarters, Borrower will deliver consolidated balance sheets of Borrower and its
Subsidiaries, as at the end of such fiscal quarter, and the related consolidated
statements of income, stockholders' equity 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.
18
Credit Agreement/D & E Communications, Inc.
(B) Year-End Financials. As soon as available and in any event within
ninety (90) days after the end of each fiscal year of Borrower, Borrower will
deliver (i) consolidated balance sheets of Borrower and its 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 a firm of certified public accountants
selected by Borrower and reasonably acceptable to Administrative Agent, 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).
(C) Borrower Compliance Certificate. Together with each delivery of
financial statements of Borrower and its Subsidiaries pursuant to Subsections
4.3(A) and 4.3(B), Borrower will deliver a fully and properly completed
compliance certificate in substantially the same form as Exhibit 4.3(C) (each, a
"Compliance Certificate") signed by the chief executive officer or chief
financial officer of Borrower.
(D) Accountants' Reliance Letter. [INTENTIONALLY OMITTED]
(E) Accountants' Reports. Promptly upon receipt thereof, Borrower will
deliver copies of all significant reports submitted by Borrower firm of
certified public accountants in connection with each annual, interim or special
audit or review of any type of the financial statements or related internal
control systems of Borrower made by such accountants, including any comment
letter submitted by such accountants to management in connection with their
services.
(F) Projections. [INTENTIONALLY OMITTED]
(G) SEC Filings and Press Releases. 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
Subsidiaries to its or their security holders, (ii) all regular and periodic
reports and all registration statements and prospectuses, if any, filed by
Borrower or any of its Subsidiaries with any securities exchange or with the
Securities and Exchange Commission (the "SEC") or any governmental or private
regulatory authority, and (iii) all press releases and other statements made
available by Borrower or any of its Subsidiaries to the public concerning
developments in the business of any such Person.
(H) Events of Default, Etc. Promptly upon any 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
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 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.
19
Credit Agreement/D & E Communications, Inc.
(I) Litigation. Promptly upon any 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
Subsidiaries not previously disclosed by Borrower to Administrative Agent 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 Subsidiaries which, in each case, could reasonably be expected to
have a Material Adverse Effect, Borrower will give notice thereof to
Administrative Agent and provide such other information as may be reasonably
available to Borrower to enable Administrative Agent and its counsel to evaluate
such matter.
(J) Supplemented Schedules; Notice of Corporate Changes.
[INTENTIONALLY OMITTED]
(K) Regulatory and Other Notices. Within fifteen (15) days after
filing, receipt or becoming aware thereof, copies of any filings or
communications sent to or notices and other communications received by Borrower
or any of its Subsidiaries from any Governmental Authority, including the FCC,
any applicable PUC and the SEC, relating to any noncompliance by Borrower or any
of its Subsidiaries with any law or with respect to any matter or proceeding the
effect of which could reasonably be expected to have a Material Adverse Effect
or which could reasonably be expected to result in a material adverse amendment,
change or termination of any License.
(L) Other Information. With reasonable promptness, Borrower will
deliver such other information and data with respect to Borrower or any of its
Subsidiaries as from time to time may be reasonably requested by Administrative
Agent.
4.4 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 Administrative Agent or the
Lenders 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
accountant and implemented by Borrower; and (iii) changes in the method of
determining carrying value of Borrower's or any of its 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.
SECTION 5
REPRESENTATIONS AND WARRANTIES
20
Credit Agreement/D & E Communications, Inc.
In order to induce Administrative Agent and Lenders to enter into this
Agreement and to make Loans, Borrower represents and warrants to Administrative
Agent and each Lender on the Closing Date and on the date of each request for a
Loan that the following statements are true, correct and complete:
5.1 Disclosure. No information furnished by or on behalf of Borrower or
any of its Subsidiaries contained in this Agreement, the financial statements
referred to in Subsection 5.8 or any other document, certificate, opinion or
written statement furnished to any Administrative Agent or any Lender for use in
connection with the Loan Documents or the transactions contemplated thereunder
contains any untrue statement of a material fact or omitted, omits or will 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. Borrower is not aware of any facts which it has not disclosed in
writing to the Administrative Agent having a Material Adverse Effect, or insofar
as Borrower can now foresee, that could reasonably be expected to have a
Material Adverse Effect.
5.2 No Material Adverse Effect. Since June 30, 2001, there has been no
event or change in facts or circumstance affecting Borrower or any of its
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. Borrower and each of its Subsidiaries
is a limited liability company, corporation or partnership duly organized,
validly existing and in good standing under the laws of its jurisdiction or
incorporation. Borrower and each of its 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. Borrower and each of its
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 Administrative Agent
and the Lenders), 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.
(C) Qualification. Borrower and each of its 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.
21
Credit Agreement/D & E Communications, Inc.
5.4 Compliance of Agreement, Loan Documents and Borrowings with
Applicable Law. The execution, delivery and performance by Borrower and its
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) except as
set forth on Schedule 5.4 hereto, require any Governmental Approval or violate
any Applicable Law relating to Borrower or any of its Subsidiaries, (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 Subsidiaries or 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 or (iii) 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.
5.5 Compliance with Law; Governmental Approvals. Except as set forth on
Schedule 5.5 hereto, each of Borrower and each of its Subsidiaries (i) has 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 each of its
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 Subsidiaries in respect of federal, state, local and
other taxes for all fiscal years and portions thereof are in the judgment of
Borrower adequate, and neither Borrower nor any of its Subsidiaries anticipates
any additional material taxes or assessments for any of such years.
5.7 Environmental Matters. Each of Borrower and each of its
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 or its 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.
5.8 Financial Statements. All financial statements concerning Borrower
and its Subsidiaries which have been or will hereafter be furnished to
Administrative Agent or any Lender pursuant to this Agreement have been or will
be prepared in accordance with GAAP consistently applied (except as disclosed
therein) and do or will 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 do and will disclose all material liabilities
and Contingent Obligations of Borrower or its
22
Credit Agreement/D & E Communications, Inc.
Subsidiaries as at the dates thereof, except that any unaudited financial
statements are or shall be subject to changes resulting from normal year end
adjustments and items that are or will be disclosed in footnotes to the audited
statements. Neither Borrower nor any of its Subsidiaries has, after giving
effect to the initial Loans hereunder, any Indebtedness for borrowed money or
Contingent Obligations other than (i) the Loans, (ii) the Indebtedness permitted
under Subsection 3.1, (iii) the deferred payments owed to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, formerly the shareholders of Alternate
Solutions, Inc., and (iv) the Contingent Obligations permitted under Subsection
3.4.
5.9 Intellectual Property. Each of Borrower and each of its
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") 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. Neither Borrower nor
any of its Subsidiaries has been threatened with any litigation regarding
Intellectual Property Rights that would present a material impediment to the
business of any such Person.
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 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). 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 involves the
possibility of any judgment or liability not fully covered by insurance which,
if determined adversely to Borrower or any of its Subsidiaries, could reasonably
be expected to have a Material Adverse Effect. Neither Borrower nor any of its
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.
5.11 Employee Labor Matters. Except as set forth on Schedule 5.11, (i)
neither Borrower, any of its 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, 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 Employee Benefit Plans. Borrower and its Subsidiaries are in
compliance in all material respects with the applicable provisions of the
Employee Retirement Income Security Act of
23
Credit Agreement/D & E Communications, Inc.
1974, as amended (ERISA), and the regulations and published interpretations
thereunder, the failure to comply with which could reasonably be expected to
have a Material Adverse Effect.
5.13 Communications Regulatory Matters.
(A) Schedule 5.13(A) sets forth a true and complete list of the
following information for each License issued to Borrower or its Subsidiaries:
the name of the licensee, the type of service, the expiration date and the
geographic area covered by such License.
(B) 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 forfeiture or the revocation,
termination or adverse modification of any such License or (ii) materially and
adversely affect any rights of Borrower or its 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. Neither Borrower nor any of
its Subsidiaries is a party to any investigation, notice of violation, order or
complaint issued by or before the FCC, and there are no proceedings pending by
or before the FCC which could in any manner threaten or adversely affect the
validity of any License.
(C) All of the material properties, equipment and systems owned,
leased or managed by Borrower or its 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.
(D) Borrower and its Subsidiaries has paid all franchise, license
or other fees and charges which have become due pursuant to any Governmental
Approval, including the Licenses, in respect of its business and has made
appropriate provision to the extent required by GAAP for any such fees and
charges which have accrued.
5.14 Solvency. Each of Borrower and each of its 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 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
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; Public Utility Holding Act. Neither Borrower
nor any of its Subsidiaries is an "investment company" as that term is defined
in, or is otherwise subject to regulation under, the Investment Company Act of
1940, as amended. Neither Borrower nor any of
24
Credit Agreement/D & E Communications, Inc.
its Subsidiaries is a "holding company" as that term is defined in, or is
otherwise subject to regulation under, the Public Utility Holding Company Act of
1935, as amended.
5.16 Certain Agreements. Schedule 5.16 sets forth a complete and
accurate list of all loan agreements, indentures, guarantees, capital leases and
other similar credit or reimbursement agreements of Borrower and each of its
Subsidiaries in effect immediately prior to the Closing Date. Borrower and its
Subsidiaries have performed all of their respective obligations under such
agreements and, to the best knowledge of Borrower, each other party thereto is
in compliance with each such agreement.
5.17 Subsidiaries. Borrower has no Subsidiaries other than as set forth
on Schedule 5.17. Borrower is the registered and beneficial owner of the
specified percentage of the shares of issued and outstanding capital stock or
other equity interests of each of the Subsidiaries as set forth on Schedule
5.17, which stock and other equity interests are owned free and clear of all
liens, warrants, options, rights to purchase, rights of first refusal and other
interests of any person, except for the Lien of PNC Bank on the partnership
interest, owned by D & E Wireless, Inc., in the D & E/Omnipoint Wireless Joint
Venture L.P. The stock or other equity interests of each such Subsidiary has
been duly authorized and validly issued and is fully paid and non-assessable.
5.18 Title to Properties. Each of Borrower and each of its Subsidiaries
has such title or leasehold interest in and to the real property 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.
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 principal amount of
the Loans at the time required pursuant to this Agreement, or failure to pay,
within five (5) days after the due date, any interest on any Loan or 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 Subsidiaries to pay when due or within any applicable grace period any
principal or interest on Indebtedness (other than the Loans) or any Contingent
Obligation or (ii) any other breach or default of Borrower or any of its
Subsidiaries with respect to any Indebtedness (other than the Loans) or any
Contingent Obligation, if the effect of such failure to pay, breach or default
is to cause or to permit the holder or holders then to cause such Indebtedness
or Contingent Obligation having an aggregate principal amount for Borrower and
its Subsidiaries in excess of $500,000 to become or be declared due prior to its
stated maturity; or
25
Credit Agreement/D & E Communications, Inc.
(C) Breach of Certain Provisions. Failure of Borrower or any of
its 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
Subsidiaries' obligation to maintain insurance, Subsection 2.4, Section 3 or
Section 4 (excluding Section 4.3 (except for the first sentence thereof and
Subsection 4.3(H)); or
(D) Breach of Warranty. Any representation, warranty,
certification or other statement made by Borrower or any of its Subsidiaries in
any Loan Document or in any statement or certificate at any time given by
Borrower or any of its Subsidiaries in writing pursuant to or in connection with
any of the Loan Documents is false in any material respect on the date made or
deemed made; or
(E) Other Defaults Under Loan Documents. Borrower or any of its
Subsidiaries, or any other party (other than a Lender) 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
thirty (30) days after receipt by Borrower, any such Subsidiary, or such other
party of notice from Administrative Agent or Requisite Lenders 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
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 sixty (60) days; or (ii) the continuance of any of
the following events for sixty (60) days unless dismissed, bonded or discharged:
(a) an involuntary case is commenced against Borrower or any of its
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 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 Subsidiaries, for all or a substantial part of the
property of Borrower or any of its Subsidiaries; or
(G) Voluntary Bankruptcy; Appointment of Receiver; Etc. Borrower
or any of its 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 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 Subsidiaries; or (ii) makes any assignment for the
benefit of creditors; or (iii) the Board of Directors of Borrower or any of its
Subsidiaries adopts any resolution or otherwise authorizes action to approve any
of the actions referred to in this Subsection 6.1(G); or
(H) Governmental Liens. Any Lien, levy or assessment (other than
Permitted Encumbrances) is filed or recorded with respect to or otherwise
imposed upon all or any material
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part of the Collateral or the other assets of Borrower or any of its
Subsidiaries by the United States or any department or instrumentality thereof
or by any state, county, municipality or other Governmental Authority, in each
case; or
(I) Judgment and Attachments. Any money judgment, writ or warrant
of attachment or similar process (other than those described in Subsection
6.1(H)) involving an amount in any individual case or in the aggregate for
Borrower and its Subsidiaries at any time in excess of $500,000 (in either case
not adequately covered by insurance as to which the insurance company has
acknowledged coverage) is entered or filed against Borrower or any of its
Subsidiaries or any of their respective assets and remains undischarged,
unvacated, unbonded or unstayed for a period of thirty (30) days or in any event
later than five (5) Business Days prior to the date of any proposed sale
thereunder; or
(J) Dissolution. Any order, judgment or decree is entered against
Borrower or any of its Subsidiaries decreeing the dissolution or split up of
Borrower or any of its Subsidiaries and such order remains undischarged or
unstayed for a period in excess of fifteen (15) days, in each case; or
(K) Solvency. Borrower or any of its Subsidiaries ceases to be
solvent or Borrower or any of its Subsidiaries admits in writing its present or
prospective inability to pay its debts as they become due; or
(L) Injunction. Borrower or any of its Subsidiaries is enjoined,
restrained or in any way prevented by the order of any court or any Governmental
Authority from conducting all or any material part of its business and such
order continues for more than sixty (60) days, in each case, except where such
Subsidiary is not material to the operations of Borrower on a consolidated
basis; or
(M) ERISA; Pension Plans. (i) Borrower or any of its 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; or (iii) any employee benefit plan
of Borrower or any of its 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
(N) Environmental Matters. Borrower or any of its Subsidiaries
fails to: (i) obtain or maintain any operating licenses or permits required by
environmental authorities; (ii) begin, continue or complete any remediation
activities as required by any environmental authorities; (iii) store or dispose
of any hazardous materials in accordance with applicable environmental laws and
regulations; or (iv) comply with any other environmental laws, if in any such
case such failure could reasonably be expected to have a Material Adverse
Effect; or
(O) 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
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or is declared to be null and void, or Borrower or any of its Subsidiaries
denies that it has any further liability under any Loan Documents to which it is
party, or gives notice to such effect; or
(P) Licenses and Permits. (i) The loss, suspension or revocation
of, or failure to renew, any license or permit now held or hereafter acquired by
Borrower or any of its Subsidiaries, if such loss, suspension, revocation or
failure to renew could reasonably be expected to have a Material Adverse Effect;
or (ii) one or more of the Licenses shall be terminated, revoked, substantially
adversely modified or fail to be renewed at its stated expiration, if such
termination, revocation, modification or non-renewal could reasonably be
expected to have a Material Adverse Effect; or
(Q) Change in Control. Any person acquires or beneficially owns,
directly or indirectly, and controls at least 51% of the voting equity in
Borrower; or
(R) Material Adverse Effect. Any event not referred to elsewhere
in this Subsection 6.1 shall occur which results in a Material Adverse Effect;
or
(S) Certain Material Contracts. Any material breach or default or
any termination (other than on the stated or optional expiration date of such
contract in accordance with its terms shall have occurred under any of the
Material Contracts by any of the parties thereto (other than Borrower)), unless,
but only as long as, the existence of any such default is being contested by
Borrower or such Subsidiary in good faith by appropriate proceedings and
adequate reserves in respect thereof have been established on the books of
Borrower or such Subsidiary to the extent required by GAAP; or
(T) Hedging Agreement. Any termination payment shall be due by
Borrower under any Hedging Agreement and such amount is not paid within thirty
(30) Business Days of the due date thereof.
6.2 Suspension of Commitments. Upon the occurrence of any Default or
Event of Default, Administrative Agent and each Lender, without notice or
demand, may immediately cease making additional Loans and cause its obligation
to lend its Pro Rata Share of each Loan Commitment to be suspended; provided
that, in the case of a Default, if the subject condition or event is waived,
cured or removed by Requisite Lenders 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 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 Administrative Agent and Lenders to make Loans shall
thereupon terminate. Upon the occurrence and during the continuance of any other
Event of Default, Administrative Agent may, and upon written demand by Requisite
Lenders shall, by written notice to Borrower declare all or any portion of the
Loans 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
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acceleration the obligations of Administrative Agent and Lenders to make Loans
shall thereupon terminate.
6.4 Rights of Collection. Upon the occurrence of any Event of Default
and at any time thereafter and unless and until such Event of Default is waived
by Requisite Lenders, Administrative Agent may exercise on behalf of Lenders all
of their other rights and remedies under this Agreement, the other Loan
Documents and Applicable Law, in order to satisfy all of Borrower's 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 Administrative Agent or Lenders in the exercise of their
respective rights under this Agreement and the other Loan Documents may require
the consent of a Governmental Authority. If counsel to Administrative Agent
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 Administrative Agent
or Lenders 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 their Subsidiaries to use
their reasonable efforts, to secure such consent and to cooperate with
Administrative Agent and Lenders in any action commenced by Administrative Agent
or any Lender to secure such consent.
6.6 Performance by Administrative Agent. If Borrower shall fail to
perform any covenant, duty or agreement contained in any of the Loan Documents,
Administrative Agent 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 Administrative Agent, promptly pay any amount
reasonably expended by Administrative Agent in such performance or attempted
performance to Administrative Agent, 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 Administrative Agent
shall not have any liability or responsibility for the performance of any
obligation of Borrower under this Agreement or any other Loan Document.
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, each Lender 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 any and all (A)
balances held by such Lender at any of its offices for the account of Borrower
or any of its Subsidiaries (regardless of whether such balances are then due to
Borrower or any of its Subsidiaries), and (B) except as provided in Subsection
8.2(J), other property at any time held or owing by such Lender to or for the
credit or for the account of Borrower or any of their Subsidiaries, against and
on account of any of the Obligations; provided, that no Lender shall exercise
any such right without the prior written consent of Administrative Agent. Any
Lender exercising a right to set off shall, to the extent the amount of any such
set off exceeds its Pro Rata Share of the amount set off, purchase for cash (and
the other Lenders shall sell) interests in each such other Lender's Pro Rata
Share of the Obligations
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as would be necessary to cause such Lender to share such excess with each other
Lender in accordance with their respective Pro Rata Shares. Borrower agrees, to
the fullest extent permitted by law, that any Lender may exercise its right to
set off with respect to amounts in excess of its Pro Rata Share of the
Obligations and upon doing so shall deliver such excess to Administrative Agent
for the benefit of all Lenders in accordance with their Pro Rata Shares;
provided, that CoBank may exercise its rights against any equity of CoBank held
by Borrower without complying with this sentence.
6.8 Application of Payments. Subsequent to the acceleration of the
Loans pursuant to Subsection 6.3, all payments received by the Lenders on the
Obligations and on the proceeds from the enforcement of the Obligations shall be
distributed pro rata among the Loans and shall be further applied among
Administrative Agent and the Lenders as follows: First, to all Administrative
Agent's fees and expenses then due and payable, then to all other expenses then
due and payable by Borrower hereunder, then to all indemnitee obligations then
due and payable by Borrower hereunder, then to all commitment and other fees and
commissions then due and payable by Borrower, then to accrued and unpaid
interest on the Loans (pro rata in accordance with all such amounts due on the
Loans), and then to the principal amount of the Loans (pro rata among all
Loans), in that order.
6.9 Adjustments. If any Lender (a "Benefitted Lender") shall at any
time receive any payment of all or part of its Loans, or interest thereon in a
greater proportion than any such payment received by any other Lender, if any,
in respect of such other Lender's Loans, or interest thereon, such Benefitted
Lender shall, to the extent permitted by Applicable Law, purchase for cash from
the other Lenders such portion of each such other Lender's Loans as shall be
necessary to cause such Benefitted Lender to share the excess payment or
benefits ratably with each Lender; provided, that if all or any portion of such
excess payment or benefits is thereafter recovered from such Benefitted Lender,
such purchase shall be rescinded, and the purchase price and benefits returned
to the extent of such recovery, but without interest. Borrower agrees that each
Lender so purchasing a portion of another Lender's Loans may exercise all rights
of payment (including rights of set-off) with respect to such portion as fully
as if such Lender were the direct holder of such portion. This Subsection 6.9
shall not apply to any action taken by CoBank with respect to equity in it held
by Borrower.
SECTION 7
CONDITIONS TO LOANS
The obligations of Lenders to make Loans are subject to satisfaction
of all of the applicable conditions set forth below.
7.1 Conditions to Initial Loan. The obligations of Lenders to make the
initial Loan are, in addition to the conditions precedent specified in
Subsection 7.2, 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
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satisfactory to Administrative Agent, and Borrower, or such other Person, as
applicable, shall have delivered original counterparts thereof to Administrative
Agent.
(B) Closing Certificates; Opinions.
(1) Officer's Certificate. Administrative Agent shall have
received a certificate from the chief executive officer or chief financial
officer of Borrower, in form and substance reasonably satisfactory to
Administrative Agent, to the effect that all representations and warranties of
Borrower contained in this Agreement and the other Loan Documents are true,
correct and complete; that neither Borrower nor any of its 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; that
Borrower has satisfied each of the closing conditions to be satisfied hereby;
and that Borrower has filed all required tax returns and owes no delinquent
taxes, 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.
(2) Certificate of Secretary of Borrower. Administrative Agent
shall have received a certificate of the secretary or assistant secretary of
Borrower certifying that attached thereto is a true and complete copy of the
articles of incorporation or organization of Borrower, and all amendments
thereto, certified as of a recent date by the Secretary of State of the state of
incorporation or organization; that attached thereto is a true and complete copy
of the bylaws, operating agreement or other governing agreement of Borrower as
in effect on the date of such certification; that attached thereto is a true and
complete copy of resolution or consent of the governing body of Borrower,
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 officer of Borrower
executing Loan Documents.
(3) Certificates of Good Standing. Administrative Agent 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 Administrative Agent.
(4) Opinions of Counsel. Administrative Agent shall have
received favorable opinions of counsel to Borrower addressed to Administrative
Agent and Lenders with respect to Borrower, the Loan Documents and regulatory
matters (including, without limitation, the Licenses) reasonably satisfactory in
form and substance to Administrative Agent.
(5) Lien Searches. Borrower shall have delivered to
Administrative Agent the results of a Lien search of all filings made against
Borrower or any of its Subsidiaries, under the Uniform Commercial Code as in
effect in any jurisdiction in which any of its assets are located, indicating
among other things that Borrower's assets are free and clear of any Lien, except
for Permitted Encumbrances.
(C) Consents.
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(1) Governmental and Third Party Approvals. Borrower shall
have delivered to Administrative Agent all necessary 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 Administrative
Agent.
(2) Permits and Licenses. Administrative Agent shall have
received copies of all material permits and licenses, including the Licenses,
required under Applicable Laws for the conduct of Borrower's or any of its
Subsidiaries' businesses.
(3) 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 Administrative Agent in its reasonable discretion, would
make it inadvisable to consummate the transactions contemplated by this
Agreement and such other Loan Documents.
(D) Financial Matters.
(1) Financial Statements. Administrative Agent and each Lender
shall have received recent annual and interim financial statements and other
financial information with respect to Borrower and its Subsidiaries prepared in
accordance with GAAP.
(2) Fees, Expenses, Taxes, Etc. There shall have been paid by
Borrower to Administrative Agent, for the benefit of Administrative Agent and
Lenders, as applicable, 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.
(E) Miscellaneous.
(1) Repayment of Prior Indebtedness. Administrative Agent
shall have received evidence, in form and substance reasonably satisfactory to
Administrative Agent, that (i) the Prior Indebtedness has been fully paid,
satisfied and discharged, other than as permitted under Section 3.1 hereof and
(ii) that all Liens in respect of any such Indebtedness have been terminated.
(2) 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 Administrative Agent. Administrative Agent shall have received
copies of all other instruments and other evidence as Administrative Agent may
reasonably request, in form and substance reasonably satisfactory to
Administrative Agent, with respect to the transactions contemplated by this
Agreement and the taking of all actions in connection therewith.
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7.2 Conditions to All Loans. The several obligations of Lenders to make
Loans, including the initial Loan, on any date (each such date a "Funding Date")
are subject to the further conditions precedent set forth below.
(A) Administrative Agent shall have received, in accordance with the
provisions of Subsection 1.3, a notice requesting an advance of a Loan.
(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 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 Administrative Agent after the Closing Date and approved
by Requisite Lenders in writing.
(C) No event shall have occurred and be continuing or would result
from the consummation of the borrowing 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 any Lender from
making any Loan.
(E) Since June 30, 2001, 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.
(G) Borrower shall have delivered to Administrative Agent such other
documents, certificates and opinions as Administrative Agent reasonably request.
SECTION 8
ASSIGNMENT AND PARTICIPATION
8.1 Assignments and Participations in Loans and Notes. Each Lender
(including CoBank) may assign, subject to the terms of a Lender Addition
Agreement, its rights and delegate its obligations under this Agreement to one
or more Persons; provided that, (a) such Lender shall first obtain the written
consent of Administrative Agent and, if no Default or Event of Default shall
have occurred and be continuing, Borrower, which consents shall not be
unreasonably withheld or delayed; (b) the Pro Rata Share of a Loan Commitment
being assigned shall in no event be less than the lesser of (i) $5,000,000
(which may be aggregated where several Lenders are simultaneously assigning to
the same Person) and (ii) the entire amount of the Pro Rata Share of such Loan
Commitment of the assigning Lender; and (c) upon the consummation of each such
assignment the assigning Lender shall pay Administrative Agent a non-refundable
administrative fee of $2,000; provided, that in connection with an assignment
from a Lender to an Affiliate of such Lender or to another Lender, written
consent of Borrower shall not be required and no administrative fee shall be
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payable and assignments by CoBank to institutions chartered under the Farm
Credit System shall not require written consent of Borrower. From and after the
effective date specified in a duly executed, delivered and accepted Lender
Addition Agreement, which effective date shall be at least five (5) Business
Days after the execution thereof (unless Administrative Agent shall otherwise
agree), (A) the assignee thereunder shall be a party hereto and, to the extent
that rights and obligations hereunder have been assigned to it pursuant to such
Lender Addition Agreement, shall have the rights and obligations of the
assigning Lender hereunder with respect thereto and (B) the assigning Lender
shall, to the extent that rights and obligations hereunder have been assigned by
it pursuant to such Lender Addition Agreement, relinquish its rights (other than
rights under the provisions of this Agreement and the other Loan Documents
relating to indemnification or payment of fees, costs and expenses, to the
extent such rights relate to the time prior to the effective date of such Lender
Addition Agreement) and be released from its obligations under this Agreement
other than obligations to the extent relating to the time prior to the effective
date of such Lender Addition Agreement (and, in the case of a Lender Addition
Agreement covering all or the remaining portion of such assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto). The terms and provisions of each Lender Addition Agreement shall,
upon the effectiveness thereof be incorporated into and made a part of this
Agreement, and the covenants, agreements and obligations of each Lender set
forth therein shall be deemed made to and for the benefit of Administrative
Agent and the other parties hereto as if set forth at length herein. Upon its
receipt of a duly completed Lender Addition Agreement executed by an assigning
Lender and an assignee, and Borrower (if required), together with any Note
subject to such assignment and the processing fee referred to above,
Administrative Agent will accept such Lender Addition Agreement and give notice
thereof to Borrower and the other Lenders. In the event of an assignment
pursuant to this Subsection 8.1, Borrower shall, upon surrender of the assigning
Lender's Note, issue a new Note to reflect the interests of the assigning Lender
and the Person to which interests are to be assigned.
Each Lender (including Administrative Agent) may sell participations in
all or any part of its Pro Rata Share of each Loan Commitment to one or more
Persons; provided that such Lender shall first obtain the prior written consent
of Administrative Agent; and provided, further, that such Lender's obligations
under this Agreement shall remain unchanged; Borrower, Administrative Agent and
the other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement; all
amounts payable by Borrower hereunder shall be determined as if that Lender had
not sold such participation; and the holder of any such participation shall not
be entitled to require such Lender 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 Revolving Loan Expiration Date or the Term Loan
Maturity 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 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 that any participant that is a member of the Farm Credit System
shall for purposes of Subsections 1.11, 1.13, 1.14, and 9.1 be considered to be
a "Lender" and all participants shall for purposes of Section 6.7 be considered
to be a "Lender."
Except as otherwise provided in this Subsection 8.1, no Lender shall, as
between Borrower and such Lender, be relieved of any of its obligations
hereunder as a result of any sale, assignment,
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transfer or negotiation of, or granting of a participation in, all or any part
of the Loans, the Notes or other Obligations owed to such Lender. Each Lender
may furnish any information concerning Borrower and its Subsidiaries in the
possession of that Lender from time to time to assignees and participants
(including prospective assignees and participants), subject to the provisions of
Subsection 9.13.
Nothing in this Agreement shall be construed to prohibit any Lender from
pledging or assigning all or any portion of its rights and interest hereunder or
under any Note as collateral security for any loan or financing or in connection
with any securitization or other similar transaction or to any Federal Reserve
Bank as security for borrowings therefrom; provided, that no such pledge or
assignment shall release a Lender from any of its obligations hereunder.
Notwithstanding anything contained in this Agreement to the contrary, so
long as Requisite Lenders shall remain capable of making LIBOR Loans, no Person
shall become a "Lender" hereunder unless such Person shall also be capable of
making LIBOR Loans.
CoBank reserves the right to assign or sell participations in all or any
part of its Pro Rata Share of each Loan Commitment on a non-patronage basis.
8.2 Administrative Agent.
(A) Appointment. Each Lender hereby irrevocably appoints and
authorizes CoBank, as Administrative Agent to act as Administrative Agent
hereunder and under any other Loan Document with such powers as are specifically
delegated to Administrative Agent by the terms of this Agreement and any other
Loan Document, together with such other powers as are reasonably incidental
thereto. Administrative Agent is authorized and empowered to amend, modify or
waive any provisions of this Agreement or the other Loan Documents on behalf of
Lenders subject to the requirement that the consent of certain Lenders be
obtained in certain instances as provided in Subsections 8.3 and 9.2. CoBank
hereby agrees to act as Administrative Agent on the express conditions contained
in this Subsection 8.2. The provisions of this Subsection 8.2 are solely for the
benefit of Administrative Agent and Lenders, and Borrower shall have no right as
a third party beneficiary of any of the provisions hereof. In performing its
functions and duties under this Agreement, Administrative Agent shall act solely
as agent of Lenders and do not assume and shall not be deemed to have assumed
any obligation toward or relationship of agency or trust with or for Borrower.
Administrative Agent may execute any of its duties under this Agreement or any
other Loan Document by or through Administrative Agent or attorneys-in-fact and
shall not be responsible for the negligence or misconduct of any Administrative
Agent or attorneys-in-fact that it selects with reasonable care.
(B) Nature of Duties. The duties of Administrative Agent shall be
mechanical and administrative in nature. Administrative Agent shall not have by
reason of this Agreement a fiduciary relationship in respect of any Lender.
Nothing in this Agreement or any of the Loan Documents, express or implied, is
intended to or shall be construed to impose upon Administrative Agent any
obligations in respect of this Agreement or any of the Loan Documents except as
expressly set forth herein or therein. Each Lender expressly acknowledges that
neither Administrative Agent, nor any of its respective officers, directors,
employees, agents, attorneys-in-
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Credit Agreement/D & E Communications, Inc.
fact or Affiliates has made any representation or warranty to it and that no act
by Administrative Agent now or hereafter taken, including any review of the
affairs of Borrower, shall be deemed to constitute any representation or
warranty by Administrative Agent to any Lender. Each Lender represents to
Administrative Agent that (i) it has, independently and without reliance upon
Administrative Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, properties, financial
and other condition and creditworthiness of Borrower and made its own decision
to enter into this Agreement and extend credit to Borrower hereunder, and (ii)
it will, independently and without reliance upon Administrative Agent or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action hereunder and under the other Loan
Documents and to make such investigation as it deems necessary to inform itself
as to the business, prospects, operations, properties, financial and other
condition and creditworthiness of Borrower. Administrative Agent shall not have
any duty or responsibility, either initially or on a continuing basis, to
provide any Lender with any credit or other information with respect thereto
(other than as expressly required herein). If Administrative Agent seeks the
consent or approval of any Lenders to the taking or refraining from taking of
any action hereunder, then Administrative Agent shall send notice thereof to
each Lender. Administrative Agent shall promptly notify each Lender any time
that Requisite Lenders have instructed Administrative Agent to act or refrain
from acting pursuant hereto.
(C) Rights, Exculpation, Etc. Neither Administrative Agent nor any
of its officers, directors, employees, agents or attorneys-in-fact shall be
liable to any Lender for any action taken or omitted by them hereunder or under
any of the Loan Documents, or in connection herewith or therewith, except that
each such entity shall be liable with respect to its own gross negligence or
willful misconduct. Administrative Agent shall not be liable for any
apportionment or distribution of payments made by it in good faith and if any
such apportionment or distribution is subsequently determined to have been made
in error the sole recourse of any Lender to whom payment was due but not made,
shall be to recover from other Lenders any payment in excess of the amount to
which they are determined to be entitled (and such other Lenders hereby agree to
return to such Lender any such erroneous payments received by them). In
performing its functions and duties hereunder, Administrative Agent shall
exercise the same care which it would in dealing with loans for its own account,
but Administrative Agent shall not be responsible to any Lender for any
recitals, statements, representations or warranties herein or for the execution,
effectiveness, genuineness, validity, enforceability, collectibility or
sufficiency of this Agreement or any of the Loan Documents or the transactions
contemplated thereby, or for the financial condition of Borrower. Administrative
Agent may at any time request instructions from Lenders with respect to any
actions or approvals which by the terms of this Agreement or of any of the Loan
Documents Administrative Agent is permitted or required to take or to grant, and
if such instructions are promptly requested, Administrative Agent shall be
absolutely entitled to refrain from taking any action or to withhold any
approval and shall not be under any liability whatsoever to any Person for
refraining from any action or withholding any approval under any of the Loan
Documents (i) if such action or omission would, in the reasonable opinion of
Administrative Agent, violate any Applicable Law or any provision of this
agreement or any other Loan Document, or (ii) until it shall have received such
instructions from Requisite Lenders or all of the Lenders, as applicable.
Without limiting the foregoing, no Lender shall have any right of action
whatsoever against Administrative Agent as a result of Administrative
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Credit Agreement/D & E Communications, Inc.
Agent acting or refraining from acting under this Agreement, the Notes, or any
of the other Loan Documents in accordance with the instructions of Requisite
Lenders.
(D) Reliance. Administrative Agent shall be entitled to rely, and
shall be fully protected in relying, upon any written or oral notices,
statements, certificates, orders or other documents or any telephone message or
other communication (including any writing, telex, telecopy or telegram)
believed by it in good faith to be genuine and correct and to have been signed,
sent or made by the proper Person, and with respect to all matters pertaining to
this Agreement or any of the Loan Documents and its duties hereunder or
thereunder, upon advice of counsel selected by it in connection with the
preparation, negotiation, execution, delivery, administration, amendment,
modification, waiver or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement or any of the other Loan Documents.
(E) Indemnification. Lenders will reimburse and indemnify agents and
its officers, directors, employees, agents, attorneys-in-fact and Affiliates, on
demand for and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses (including, attorneys'
fees and expenses), advances or disbursements of any kind or nature whatsoever
which may be imposed on, incurred by, or asserted against Administrative Agent
(i) in any way relating to or arising out of this Agreement or any of the Loan
Documents or any action taken or omitted by Administrative Agent under this
Agreement or any of the Loan Documents, and (ii) in connection with the
preparation, negotiation, execution, delivery, administration, amendment,
modification, waiver or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement or any of the other Loan Documents in
proportion to each Lender's Pro Rata Share; provided, that no Lender shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses, advances or disbursements
resulting from Administrative Agent's gross negligence or willful misconduct. If
any indemnity furnished to Administrative Agent for any purpose shall, in the
opinion of Administrative Agent, be insufficient or become impaired,
Administrative Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished. The obligations of Lenders under this Subsection 8.2(E) shall survive
the payment in full of the Obligations and the termination of this Agreement.
(F) Administrative Agent Individually. With respect to its
obligations under the Loan Commitments, the Loans made by it, and the Notes
issued to it, Administrative Agent shall have and may exercise the same rights
and powers hereunder and is subject to the same obligations and liabilities as
and to the extent set forth herein for any other Lender. The terms "Lenders" or
"Requisite Lenders" or any similar terms shall, unless the context clearly
otherwise indicates, include Administrative Agent in its individual capacity as
a Lender or one of the Requisite Lenders. Administrative Agent may lend money
to, and generally engage in any kind of banking, trust or other business with,
Borrower or any of their Subsidiaries as if it were not acting as an
Administrative Agent pursuant hereto.
(G) Notice of Default. Administrative Agent shall not be required to
make any inquiry concerning either the performance or observance of any of the
terms, provisions or
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Credit Agreement/D & E Communications, Inc.
conditions of this Agreement or any of the Loan Documents or the financial
condition of Borrower or any of their Subsidiaries, or the existence or possible
existence of any Default or Event of Default. Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default unless Administrative Agent shall have received written notice from
Borrower or a Lender referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default." In the
event that Administrative Agent receives such a notice, Administrative Agent
will give notice thereof to Lenders as soon as reasonably practicable; provided,
that if any such notice has also been furnished to Lenders, Administrative Agent
shall have no obligation to notify Lenders with respect thereto. Administrative
Agent shall (subject to this Subsection 8.2) take such action with respect to
such Default or Event of Default as shall reasonably be directed by the
Requisite Lenders; provided, further, that, unless and until Administrative
Agent shall have received such directions, Administrative Agent may (but shall
not be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable and in
the best interests of Lenders.
(H) Successor Administrative Agent.
(1) Resignation. Administrative Agent may resign from the
performance of all its agency functions and duties hereunder at any time by
giving at least thirty (30) Business Days' prior written notice to Borrower and
Lenders. Such resignation shall take effect upon the acceptance by a successor
Administrative Agent of appointment pursuant to clause (2) below or as otherwise
provided below.
(2) Appointment of Successor. Upon any such notice of
resignation pursuant to clause (1) above, Requisite Lenders shall, upon receipt,
if no Event of Default or Default shall have occurred and be continuing, of
Borrower's prior consent which shall not be unreasonably withheld, appoint a
successor Administrative Agent from among Lenders. If a successor Administrative
Agent shall not have been so appointed within the thirty (30) Business Day
period, referred to in clause (1) above, the retiring Administrative Agent, upon
notice to Borrower, shall then appoint a successor Administrative Agent from
among Lenders who shall serve as Administrative Agent until such time, if any,
as Requisite Lenders, upon receipt of Borrower's prior written consent which
shall not be unreasonably withheld, appoint a successor Administrative Agent as
provided above.
(3) Successor Administrative Agent. Upon the acceptance of any
appointment as Administrative Agent under the Loan Documents by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Administrative Agent, and the retiring Administrative Agent
shall be discharged from its duties and obligations under the Loan Document.
After any retiring Administrative Agent's resignation as Administrative Agent
under the Loan Documents, the provisions of this Subsection 8.2 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under the Loan Documents.
(I) Dissemination of Information. Administrative Agent will use its
best efforts to provide Lenders with any information received by Administrative
Agent from Borrower which is required to be provided to a Lender hereunder,
provided that Administrative Agent shall not be liable
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Credit Agreement/D & E Communications, Inc.
to Lenders for any failure to do so, except to the extent that such failure is
attributable to Administrative Agent's gross negligence or willful misconduct.
8.3 Amendments, Consents and Waivers for Certain Actions.
(A) Except as otherwise provided in this Agreement (including this
Subsection 8.3 and Subsection 9.2), any Lender Addition Agreement or any other
Loan Document, the consent of Requisite Lenders and Borrower will be required to
amend, modify, terminate, or waive any provision of this Agreement or any of the
other Loan Documents.
(B) In the event Administrative Agent requests the consent of a
Lender and does not receive a written consent or denial thereof within ten (10)
Business Days after such Lender's receipt of such request, then such Lender will
be deemed to have denied the giving of such consent.
8.4 Disbursement of Funds. Administrative Agent shall advise each Lender
by telephone or telecopy of the amount of such Lender's Pro Rata Share of any
Loan requested by Borrower no later than 11:00 a.m. (Denver time) on the Funding
Date applicable thereto, and each such Lender shall pay Administrative Agent
such Lender's Pro Rata Share of such requested Loan, in same day funds, by wire
transfer to Administrative Agent's account by no later than 1:00 p.m. (Denver
time) on such Funding Date. If any Lender fails to pay the amount of its Pro
Rata Share forthwith upon Administrative Agent's demand, Administrative Agent
shall promptly notify Borrower, and Administrative Agent shall disburse to
Borrower, by wire transfer of immediately available funds, that portion of such
Loan as to which Administrative Agent has received funds. In such event,
Administrative Agent may, on behalf of any Lender not timely paying
Administrative Agent, disburse funds to Borrower for Loans requested, subject to
the provisions of Subsection 8.5(B). Each such Lender shall reimburse
Administrative Agent on demand for all funds disbursed on its behalf by
Administrative Agent. Nothing in this Subsection 8.4 or elsewhere in this
Agreement or the other Loan Documents, including the provisions of Subsection
8.5, shall be deemed to require Administrative Agent to advance funds on behalf
of any Lender or to relieve any Lender from its obligation to fulfill its
commitments hereunder or to prejudice any rights that Administrative Agent or
Borrower may have against any Lender as a result of any default by such Lender
hereunder.
8.5 Disbursements of Advances; Payments.
(A) Pro Rata Treatment; Application. Upon receipt by Administrative
Agent of each payment from Borrower hereunder, other than as described in the
succeeding sentence, Administrative Agent shall promptly (but in no event later
than 11:00 a.m. (Denver time) on the next succeeding Business Day) wire transfer
in immediately available funds to each Lender's account its Pro Rata Share of
such payment in accordance with such Lender's Pro Rata Share. Each payment to
Administrative Agent of its fees shall be made in like manner, but for the
account of Administrative Agent.
(B) Availability of Lender's Pro Rata Share.
(1) Unless Administrative Agent has been notified by a Lender
prior to a Funding Date of such Lender's intention not to fund its Pro Rata
Share of the Loan amount requested
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Credit Agreement/D & E Communications, Inc.
by Borrower, Administrative Agent may assume that such Lender will make such
amount available to Administrative Agent on the Funding Date. If such amount is
not, in fact, made available to Administrative Agent by such Lender when due,
and Administrative Agent disburses funds to Borrower, on behalf of such Lender,
Administrative Agent will be entitled to recover such amount on demand from
Borrower, without set-off, counterclaim or deduction of any kind, with interest
thereon at the rate per annum then applicable to such Loan.
(2) Nothing contained in this Subsection 8.5(B) will be deemed
to relieve a Lender of its obligation to fulfill its commitments or to prejudice
any rights Administrative Agent or Borrower may have against such Lender as a
result of any default by such Lender under this Agreement.
(C) Return of Payments.
(1) If Administrative Agent pays an amount to a Lender under
this Agreement in the belief or expectation that a related payment has been or
will be received by Administrative Agent from Borrower and such related payment
is not received by Administrative Agent, then Administrative Agent will be
entitled to recover such amount from such Lender without set-off, counterclaim
or deduction of any kind.
(2) If Administrative Agent determines at any time that any
amount received by Administrative Agent under this Agreement must be returned to
Borrower or paid to any other Person pursuant to any solvency law or otherwise,
then, notwithstanding any other term or condition of this Agreement,
Administrative Agent will not be required to distribute any portion thereof to
any Lender. In addition, each Lender will repay to Administrative Agent on
demand any portion of such amount that Administrative Agent has distributed to
such Lender, together with interest at such rate, if any, as Administrative
Agent is required to pay to Borrower or such other Person, without set-off,
counterclaim or deduction of any kind.
SECTION 9
MISCELLANEOUS
9.1 Indemnities. Borrower agrees to indemnify, pay, and hold
Administrative Agent and each Lender and their respective officers, directors,
employees, Administrative Agent, 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 gross 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.
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
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Credit Agreement/D & E Communications, Inc.
unless the same shall be in writing and signed by Borrower and Requisite Lenders
(or Administrative Agent, if expressly set forth herein, in any Note or in any
other Loan Document); provided, that except to the extent permitted by any
applicable Lender Addition Agreement, no amendment, modification, termination or
waiver shall, unless in writing and signed by all Lenders, do any of the
following: (i) increase any Lender's Pro Rata Share of either Loan Commitment;
(ii) reduce the principal of, rate of interest on or fees payable with respect
to any Loan; (iii) extend the Revolving Loan Expiration Date or Term Loan
Maturity Date or extend the date on which any Obligation is to be paid; (iv)
change the aggregate unpaid principal amount of the Loans; (v) change the
percentage of Lenders which shall be required for Lenders or any of them to take
any action hereunder; (vi) amend or waive this Subsection 9.2 or the definitions
of the terms used in this Subsection 9.2 insofar as the definitions affect the
substance of this Subsection 9.2; and (vii) consent to the assignment,
delegation or other transfer by Borrower or its Subsidiaries of any of its
rights and obligations under any Loan Document; provided, further, that no
amendment, modification, termination or waiver affecting the rights or duties of
Administrative Agent under any Loan Document shall in any event be effective,
unless in writing and signed by Administrative Agent, in addition to Lenders
required hereinabove to take such action. 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 amendment, modification,
termination or waiver of any provision of any Note shall be effective without
the written concurrence of the holder of that Note. 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 transmission if
transmitted on a Business Day before 2:00 p.m. (Denver time) and otherwise on
the Business Day next succeeding the date of transmission; (c) if delivered by
overnight courier, two (2) days after delivery to the courier properly
addressed; or (d) if delivered by U.S. mail, four (4) Business Days after
deposit with postage prepaid and properly addressed.
Notices shall be addressed as follows:
If to Borrower: D & E Communications, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: CFO
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Administrative
Agent or a Lender: To the address set forth on the signature page
hereto or in the applicable Lender Addition
Agreement.
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Credit Agreement/D & E Communications, Inc.
9.4 Failure or Indulgence Not Waiver; Remedies Cumulative. No failure or
delay on the part of Administrative Agent or any Lender 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 Marshaling; Payments Set Aside. Neither Administrative Agent nor any
Lender shall be under any obligation to marshal any assets in payment of any or
all of the Obligations. To the extent that Borrower makes payment(s) or
Administrative Agent or any Lender exercises its right of set-off, or
Administrative Agent enforces its Liens and such payment(s) or the proceeds of
such enforcement or set-off is subsequently invalidated, declared to be
fraudulent or preferential, set aside, or required to be repaid by anyone, then
to the extent of such recovery, the Obligations or part thereof originally
intended to be satisfied, and all Liens, rights and remedies therefor, shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or set-off had not occurred.
9.6 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.
9.7 Lenders' Obligations Several; Independent Nature of Lenders' Rights.
The obligation of each Lender hereunder is several and not joint and no Lender
shall be responsible for the obligation or commitment of any other Lender
hereunder. In the event that any Lender at any time should fail to make a Loan
as herein provided, the Lenders, or any of them, at their sole option, may make
the Loan that was to have been made by the Lender so failing to make such Loan.
Nothing contained in any Loan Document and no action taken by Administrative
Agent or any Lender pursuant hereto or thereto shall be deemed to constitute
Lenders to be a partnership, an association, a joint venture or any other kind
of entity. The amounts payable at any time hereunder to each Lender shall be a
separate and independent debt.
9.8 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.
9.9 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.
9.10 Successors and Assigns. 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 all Lenders.
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Credit Agreement/D & E Communications, Inc.
9.11 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 Administrative Agent or any Lender.
9.12 Construction. Administrative Agent, each Lender 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 Administrative Agent, each Lender and Borrower.
9.13 Confidentiality. Administrative Agent and Lenders agree to hold any
confidential information that they may receive from Borrower or any of their
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 Administrative Agent or Lenders; (ii) to
regulatory officials having jurisdiction over Administrative Agent or Lenders;
(iii) as required by Applicable Law or legal process or (iv) in connection with
any legal proceeding between Administrative Agent or Lenders and Borrower
(provided that, in the event Administrative Agent or Lenders are so required to
disclose such confidential information pursuant to clauses (iii) or (iv) of this
Subsection 9.13, Administrative Agent or Lenders 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 that Lender's interests hereunder or a participation interest
in its Pro Rata Share, provided that such disclosure is made subject to an
appropriate confidentiality agreement on terms substantially similar to this
Subsection 9.13. 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,
Lenders and (C) information obtained by Administrative Agent or Lenders from a
source independent of Borrower or its Subsidiaries.
9.14 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 ADMINISTRATIVE AGENT OR ANY
LENDER TO BRING PROCEEDINGS AGAINST BORROWER IN THE COURTS OF ANY OTHER
JURISDICTION.
(B) BORROWER HEREBY AGREES THAT SERVICE OF THE SUMMONS AND COMPLAINT
AND ALL OTHER PROCESS WHICH MAY BE SERVED IN ANY SUCH
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Credit Agreement/D & E Communications, Inc.
SUIT, ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING BY REGISTERED MAIL 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.
9.15 Waiver of Jury Trial. BORROWER, ADMINISTRATIVE AGENT AND EACH LENDER
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 ANY 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,
ADMINISTRATIVE AGENT AND EACH LENDER 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, ADMINISTRATIVE
AGENT AND EACH LENDER 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, ADMINISTRATIVE AGENT AND
EACH LENDER ALSO WAIVE ANY BOND OR SURETY OR SECURITY UPON SUCH BOND WHICH
MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF ADMINISTRATIVE AGENT AND LENDER.
9.16 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, 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, 1.14, 9.1, 9.14 and 9.15 shall survive the payment of the Loans and
the termination of this Agreement; provided, however, that Borrower shall have
no payment obligation under Section 1.11 or 1.14 after termination of this
Agreement unless notice of such obligation pursuant to Section 1.11 or 1.14 was
delivered to Borrower prior to termination of this Agreement.
9.17 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
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Credit Agreement/D & E Communications, Inc.
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.
9.18 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.
9.19 Liability Unconditional. Borrower hereby agrees that it liable for
the full and prompt payment (whether at stated maturity, by acceleration or
otherwise) and performance of, all Obligations owed or hereafter owing to the
Administrative Agent and the Lenders by Borrower. Borrower agrees that its
liability shall be absolute and unconditional, irrespective of, and unaffected
by,
(A) the genuineness, validity, regularity, enforceability or any
future amendment of, or change in, this Agreement, any other Loan Document or
any other agreement, document or instrument to which Borrower is or may become a
party;
(B) the absence of any action to enforce this Agreement or any other
Loan Document or the waiver or consent by the Administrative Agent or the
Lenders with respect to any of the provisions thereof;
(C) the insolvency of Borrower; or
(D) any other action or circumstances which might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor,
it being agreed by Borrower that its obligations as confirmed under this Section
9.19 shall not be discharged until the payment and performance, in full, of the
Obligations has occurred. It is agreed among Borrower, the Administrative Agent
and the Lenders that the foregoing waivers are of the essence of the transaction
contemplated by this Agreement and the other Loan Documents and that, but for
the provisions of this Section 9.19 and such waivers, each Lender would decline
to enter into this Agreement.
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.
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"Adjustment Date" means each date which is the fifth Business Day after
the receipt by Administrative Agent of (i) each Compliance Certificate delivered
by Borrower pursuant to Subsection 4.3(C) and (ii) in the case a decrease in an
applicable margin is warranted, a written notice from Borrower to decrease such
margin.
"Administrative Agent" means CoBank in its capacity as administrative
agent for Lenders under this Agreement and each of the other Loan Documents and
any successor in such capacity appointed pursuant to Section 8.2.
"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 ten percent (10%) 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.
"Agreement" means this Credit Agreement (including all schedules and
exhibits hereto), as amended and supplemented from time to time as permitted
herein.
"Annual Operating Cash Flow" means, as of any date, Operating Cash Flow
for the four (4) most recently completed fiscal quarters.
"Applicable Commitment Fee Percentage" means, from time to time, a per
annum percentage equal to 0.375% per annum.
"Applicable Law"? shall mean, 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.
"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 (other than to another
Subsidiary) or (ii) any or all of its assets, other than bona fide sales of
inventory to customers for fair value in the ordinary course of business,
dispositions of obsolete equipment not used or useful in the business of
Borrower and sales of Cash Equivalents and other investments permitted under
Section 3.3(C) and set forth on Schedule 3.3 hereto for fair value; but shall
not include dispositions of assets for which all of the following conditions are
met: (a) the aggregate market value of assets sold in any one transaction or
series of related transaction for any calendar year does not exceed $1,000,000
for Borrower and its Subsidiaries; (b) the consideration received is at least
equal to the fair market value of such assets; (c) the sole consideration
received is cash; (d) after giving effect to the sale or other disposition of
such assets, Borrower, on a consolidated basis
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with its Subsidiaries, are in compliance on a pro forma basis with the covenants
set forth in Section 4 recomputed for the most recently ended month for which
information is available; and (e) no Default or Event of Default then exists or
shall result from such sale or other disposition.
"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 higher of (i) the Prime Rate or (ii) the sum of Federal Funds Rate plus
0.50%.
"Base Rate Loans" means, at any time, the aggregate amount of all Loans
then bearing interest at the rate determined by reference to the Base Rate.
"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 or in Pennsylvania are closed or which the
Federal Reserve Banks are closed, and (ii) with respect to all notices,
determinations, findings and payments in connection with LIBOR Loans, any day
that is a Business Day described in clause (i) 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.
"Cash Balances" means the greater of (i) Cash Equivalents on hand minus,
the sum of Borrower's restricted cash accounts plus $2,500,000, or (ii) zero.
"Cash Equivalents" means: (i) marketable direct obligations issued or
unconditionally guaranteed by the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one (1) year from the date of acquisition thereof;
(ii) commercial paper maturing no more than 270 days 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 ▇▇▇▇▇'▇ 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 $100,000,000 and whose long-term
unsecured debt obligations (or the long-term unsecured debt obligations of the
bank holding company owning all of the capital stock of such bank or trust
company) shall have been given a rating of "A" or better by Standard & Poor's
Rating Service or at ▇▇▇▇▇ "▇▇" from ▇▇▇▇▇'▇ Investors Service, Inc; and (iv)
time deposits maturing no more than thirty (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.
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"Closing Date" means the date of this Agreement.
"Communications Act" shall mean 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.
"Communications System" means a computer network integration system,
land-line telephone system, a competitive local exchange carrier system, a cable
television system (both land-line and wireless), an internet service provider
system, cellular mobile radio telephone system, a PCS System or other
telecommunications-related system and other businesses reasonably related
thereto, 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.
"Contingent Obligation," as applied to any Person, means any direct or
indirect liability of that Person: (i) with respect to any indebtedness, lease,
dividend or other obligation of another Person if the primary purpose or intent
of the Person incurring such liability, or the primary effect thereof, is to
provide assurance to the obligee of such liability that such liability will be
paid or discharged, or that any agreements relating thereto will be complied
with, or that the holders of such liability will be protected (in whole or in
part) against loss with respect thereto; (ii) with respect to any letter of
credit issued for the account of that Person or as to which that Person is
otherwise liable for reimbursement of drawings; or (iii) under any foreign
exchange contract, currency swap agreement, interest rate swap agreement or
other similar agreement or arrangement designed to alter the risks of that
Person arising from fluctuations in currency values or interest rates.
Contingent Obligations shall also include (a) the direct or indirect guaranty,
endorsement (other than for collection or deposit in the ordinary course of
business), co-making, discounting with recourse or sale with recourse by such
Person of the obligation of another, (b) the obligation to make take-or-pay or
similar payments if required regardless of nonperformance by any other party or
parties to an agreement, and (c) any liability of such Person for the
obligations of another through any agreement to purchase, repurchase or
otherwise acquire such obligation or any property constituting security
therefor, to provide funds for the payment or discharge of such obligation or to
maintain the solvency, financial condition or any balance sheet item or level of
income of another. The amount of any Contingent Obligation shall be equal to the
amount of the obligation so guaranteed or otherwise supported or, if not a fixed
and determined amount, the maximum amount so guaranteed.
"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.
"Environmental Laws" shall mean 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 the pollution, public health, safety
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
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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 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. Section 9601 et seq.) and the Resource
Conservation and Recovery Act of 1976, as amended (42 U.S.C. Section 6901 et
seq.).
"Equity" means the difference between total assets less total
liabilities (determined in accordance with GAAP consistently applied).
"Facility" or "Facilities" means, individually, each of the
Revolving Loan Facility and the Term Loan Facility, and collectively, the
Revolving Loan Facility and the Term Loan Facility.
"FCC" shall mean the Federal Communications Commission, or any other
similar or successor agency of the federal government administering the
Communications Act.
"Federal Funds Rate" shall mean, for any day, the rate of interest
per annum (rounded upward, if necessary, to the nearest whole multiple of 1/100
of 1%) equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published by the Federal Reserve Bank of New York on the
Business Day next succeeding such day, provided that (i) if such day is not a
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day and (ii) if no such rate is so
published on the next succeeding Business Day, the Federal Funds Rate for such
day shall be the average rate quoted to Administrative Agent on such day on such
transactions as determined by Administrative Agent.
"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.
"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.
"Hedging Agreement" means any agreement with respect to an interest
rate swap, collar, cap, floor or a forward rate agreement or other agreement
regarding the hedging of interest rate risk exposure executed in connection with
hedging the interest rate exposure of Borrower, and any
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confirming letter executed pursuant to such hedging agreement, all as amended,
restated or otherwise modified.
"Indebtedness," as applied to any Person, means, without duplication:
(i) all obligations for borrowed money; (ii) obligations representing the
deferred purchase price of property or services other than accounts payable
arising in connection with the purchase of goods or services on terms customary
in the trade, excluding SAB 101 obligations and long term incentive plan
obligations; (iii) obligations, whether or not assumed, secured by liens or a
pledge of or an encumbrance on the proceeds or production from property now or
hereafter owned or acquired; (iv) obligations which are evidenced by notes,
acceptances or other instruments; (v) leases of real or personal property which
are required to be capitalized under GAAP or which are treated as operating
leases under regulations applicable to them but which otherwise would be
required to be capitalized under GAAP; and (vi) fixed payment obligations under
guarantees that are due and remain unpaid.
"Indebtedness to Total Capitalization Ratio" means the ratio derived
by dividing Indebtedness by Total Capitalization.
"Investment" means (i) any direct or indirect purchase or other
acquisition by Borrower or any of their 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 their 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.
"Lender" or "Lenders" means one or more of the banks identified as
Lenders in the first paragraph of this Agreement and their successors and
permitted assigns pursuant to Subsection 8.1.
"Lender Addition Agreement" means an agreement among Administrative
Agent, a Lender and such Lender's assignee regarding their respective rights and
obligations with respect to assignments of the Loans, the Loan Commitments and
other interests under this Agreement and the other Loan Documents, substantially
in the form of Exhibit 10.1(D).
"LIBOR" means for each applicable Interest Period, a fixed annual
rate equal to: (a) the rate of interest determined by Administrative Agent at
which deposits in U.S. dollars for the relevant Interest Period are offered
based on information presented by the Telerate Service as quoted by the British
Bankers Association as of 11:00 a.m. (London time) on the day which is two (2)
Business Days prior to the first day of such Interest Period, provided, that in
the event British Bankers Association ceases to provide such quotations (as
determined by Administrative Agent), then Administrative Agent will notify
Borrower, and Borrower will agree upon a substitute basis for
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obtaining such quotations, divided by (b) a number equal to 1.0 minus the
aggregate (but without duplication) of the rates (expressed as a decimal
fraction) of reserve requirements in effect on the day which is two (2) Business
Days prior to the beginning of such Interest Period for Eurocurrency funding
(currently referred to as "Eurocurrency Liabilities" in Regulation D of such
Board) which are required to be maintained by a member bank of the Federal
Reserve System (including, without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the Board of Governors of the
Federal Reserve System or other Governmental Authority having jurisdiction with
respect thereto, as now and from time to time in effect); such rate to be
rounded upward to the next whole multiple of one-hundredth of one percent
(0.01%).
"LIBOR Loans" means 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" shall mean any land-line telephone, 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
Communications System, granted or issued by the FCC or any applicable PUC and
held by Borrower or any of its 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 Revolving
Loan Commitment or the Term Loan Commitment.
"Loan Commitment" and "Loan Commitments" mean, individually, each of
the Revolving Loan Commitment and the Term Loan Commitment, and collectively,
the Revolving Loan Commitment and the Term Loan Commitment, as each such
commitment is reduced from time to time as provided in this Agreement.
"Loan Documents" means this Agreement, the Notes, any Hedging
Agreement with Lender (which Hedging Agreement is permitted hereunder) and all
other instruments, documents and agreements executed and delivered concurrently
herewith or at any time hereafter to or for the benefit of Administrative Agent
or any Lender in connection with the Loans and other transactions contemplated
by this Agreement, all as amended, supplemented or modified from time to time.
"Long-Term Fixed Rate" means a quoted fixed rate of interest per
annum as determined by CoBank in its sole discretion.
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"Long-Term Fixed Rate Loan" means a Term Loan accruing interest at a
rate determined by reference to the Long-Term Fixed Rate.
"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, on a consolidated basis, or (ii)
the impairment of the ability of Borrower and its Subsidiaries, on a
consolidated basis, to perform their obligations under the Loan Documents or of
Administrative Agent or any Lender 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.
"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 $500,000 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 contract or
agreement which is terminable by a party other than Borrower or any of its
Subsidiaries without cause upon notice of ninety-five (95) days or less shall
not be considered a Material Contract.
"Net Leverage Ratio" means the ratio derived by dividing (i)
Indebtedness minus Cash Balances by (ii) Annual Operating Cash Flow.
"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.
"Net Worth" means the difference between total assets and total
liabilities (not including preferred stock).
"Note" or "Notes" means one or more of the Revolving Notes and the
Term Notes.
"Obligations" means all obligations, liabilities and indebtedness of
every nature of Borrower from time to time owed to Administrative Agent or any
Lender under the Loan Documents including the principal amount of all debts,
claims and indebtedness, accrued and unpaid interest 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.
"Operating Cash Flow" means the sum of (i) net income or deficit, as
the case may be (excluding extraordinary gains, extraordinary losses, the
non-cash write up or write down of any asset), (ii) total interest expense
(including non-cash interest), (iii) depreciation and amortization
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expense and other similar non-cash expenses, (iv) taxes, federal or state,
imposed upon income and (v) non-cash employee and director compensation. For any
period of calculation, Operating Cash Flow 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.
"PCS System" shall mean any broadband personal communications
services telecommunications system operating on radio spectrum at 1900 MHZ or a
License to operate such a system.
"Permitted Encumbrances" means the following:
(1) Liens for taxes, assessments or other governmental charges
not yet due and payable or as to which the period of grace (not to exceed thirty
(30) days), if any, related thereto has not expired unless the same are being
diligently icontested 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 thirty (30)
days delinquent or which are being contested in good faith;
(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 $500,000,
made in the ordinary course of business to secure liability to insurance
carriers;
(5) any attachment or judgment Lien not constituting an Event
of Default under Subsection 6.1(I);
(6) easements, rights of way, restrictions and other similar
charges or encumbrances which in the aggregate are not substantial in amount and
which do not, in any case, materially detract from the value of such property or
impair the use thereof in the ordinary conduct of the business of Borrower or
any of its Subsidiaries;
(7) Liens in favor of Administrative Agent, for the benefit of
Administrative Agent and Lenders;
(8) Liens in favor of CoBank as set forth in Subsection 2.7;
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(9) Liens securing purchase money security agreements and
capital leases permitted under Section 3.1(D), provided that such Liens are
created substantially simultaneously with the acquisition or lease of the
related asset, 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;
(10) Liens securing subordinated Indebtedness to the extent
permitted under Section 3.1(E), provided that such Liens are expressly
subordinate to any Lien in favor of Administrative Agent, for the benefit of
Administrative Agent and Lenders, granted hereunder on terms satisfactory to
Requisite Lenders in their sole discretion;
(11) Liens in connection with the purchase money Indebtedness
permitted by Subsection 3.1(D);
(12) the Lien of PNC Bank on the partnership interest, owned
by D & E Wireless, Inc., in the D & E/Omnipoint Wireless Joint Venture L.P; and
(13) the claims of customers of Borrower on deposits made by
such customers in connection with the purchase of goods or services from
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).
"Prime Rate" means, a variable rate of interest per annum equal, on
any day, to the rate of interest published on such day in the Eastern Edition of
The Wall Street Journal as the average prime lending rate for 75% of the United
States' 30 largest commercial banks, or if the Eastern Edition of The Wall
Street Journal or such rate is not published on such day, such rate as last
published in the Eastern Edition of The Wall Street Journal. In the event the
Eastern Edition of The Wall Street Journal ceases to publish such rate or an
equivalent, the term "Prime Rate" shall be determined by reference to such other
regularly published prime rate based upon any averaging of such 30 banks, as
Administrative Agent shall determine, or if no such published average prime rate
is available, then the term "Prime Rate" shall mean a variable rate of interest
per annum as determined by Administrative Agent equal to the highest of the
"prime rate," "reference rate," "base rate" ?or other similar rate announced
from time to time by any of Bankers Trust Company and Citibank as selected by
Administrative Agent (with the understanding that any such rate may merely be a
reference rate and may not necessarily represent the lowest or best rate
actually charged to any customer by such bank).
"Pro Rata Share" means (i) with respect to matters relating to a
particular Loan Commitment, the percentage obtained by dividing (a) the
commitment of a Lender under such Loan Commitment by (b) all commitments of all
Lenders under such Loan Commitment and (ii) with respect to all other
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matters, including, without limitation, for purposes of the definition of
"Requisite Lenders," the percentage obtained by dividing (a) the aggregate Total
Lender Loan Commitments of a Lender by (b) the aggregate Total Lender Loan
Commitments of all Lenders, in either case as such percentage may be adjusted by
assignments permitted pursuant to Subsection 8.1; provided, however, if any Loan
Commitment is terminated pursuant to the terms hereof, in lieu of commitments,
the calculation of clauses (i) and (ii) above, as they relate to or include such
Loan Commitment, shall be based on the aggregate amount of such Lender's
outstanding Loans related to such Loan Commitment and the aggregate amount of
all outstanding Loans related to such Loan Commitment.
"Projections" means, for Borrower and its Subsidiaries, forecasted;
(i) balance sheets; (ii) profit and loss statements; and (iii) 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 Projections
represent and will represent as of the date thereof the good faith estimate of
Borrower and its senior management concerning the most probable course of its
business.
"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 Communication System or over Persons who own,
construct or operate a Communication 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.
"Requisite Lenders" means at least two Lenders who have in the
aggregate Pro Rata Shares greater than sixty-six and two-thirds percent
(66.667%).
"Revolving Loan" or "Revolving Loans" means an advance or advances
under the Revolving Loan Commitment.
"Revolving Loan Commitment" means, initially, $50,000,000, 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 the Lenders' obligations to make Loans
pursuant to Subsection 6.2, (ii) the acceleration of the Obligations pursuant to
Subsection 6.3 or (iii) December 31, 2009.
"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(B), or any combination
thereof, and any replacements, restatements, renewals or extensions of any such
notes, in whole or in part.
"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
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owned or controlled, directly or indirectly, by that Person or one or more of
the other Subsidiaries of that Person or a combination thereof.
"Term Loan" or "Term Loans" means an advance or advances under the
Term Loan Commitment.
"Term Loan Commitment" means, initially, $50,000,000, 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 Section 1.1(A).
"Term Loan Maturity Date" means the earlier of (i) the acceleration
of the Obligations pursuant to Section 6.3 or (ii) June 30, 2011.
"Term Note" or "Term 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.
"Total Capitalization" means the sum of Indebtedness plus Net Worth.
"Total Lender Loan Commitment" means the aggregate commitments of any
Lender with respect to the Revolving Loan Commitment and the Term Loan
Commitment.
"Total Leverage Ratio" means the ratio derived by dividing
Indebtedness by Annual Operating Cash Flow.
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.
[Signatures begin on following page]
56
Credit Agreement/D&E Communications, Inc.
Witness the due execution hereof by the respective duly authorized
officers of the undersigned as of the date first written above.
[CORPORATE SEAL] D & E COMMUNICATIONS, INC., as Borrower
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: VP, CFO & Treasurer
[Signatures continued from previous page.]
Commitment to make Term Loans: COBANK, ACB, as Administrative Agent and
$50,000,000 a Lender
Pro Rata Share of Term Loan By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Commitment: 100% -------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: V.P.
Commitment to make Revolving
Loans: $50,000,000
Address: CoBank, ACB
Pro Rata Share of Revolving Loan ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Commitment: 100% ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Communications and Energy
Total Lender Loan Banking Group
Commitment:$100,000,000 Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Pro Rata Share of Term Loan
Commitment and Revolving Loan
Commitment: 100%