Exhibit 10.1

 

 

FIRST AMENDMENT TO CREDIT AGREEMENT AND CONSENT

 

 

This FIRST AMENDMENT TO CREDIT AGREEMENT AND CONSENT (this “Agreement”) is made and entered into as of June 3, 2011, by and among (i) SureWest Communications  (the “Borrower”), (ii) the Subsidiaries of the Borrower identified on the signature pages hereto (each, individually, a “Guarantor” and collectively, the “Guarantors”), (iii) CoBank, ACB (the “Administrative Agent”), as Administrative Agent, Lead Arranger, Bookrunner, Issuing Lender, Swingline Lender and a Lender, and (iv) certain of such other Lenders as are party to the Credit Agreement defined below.  Capitalized terms used herein and not otherwise defined herein have the meanings assigned to them in the Credit Agreement defined below.

 

RECITALS

 

WHEREAS, the Borrower, the Guarantors, the Administrative Agent and the Lenders have entered into that certain Credit Agreement, dated as of March 2, 2011 (as the same may be amended, modified, supplemented, extended or restated from time to time, the “Credit Agreement”);

 

WHEREAS, SureWest Telephone desires to sell its parcel of real property located at 99 Yosemite Avenue, Roseville, California 95678 (the “Yosemite Property”), which property is currently mortgaged to the Administrative Agent for the benefit of the Secured Parties, and has requested that the Lenders party hereto, in their capacity as Requisite Lenders under the Credit Agreement, consent to such sale;

 

WHEREAS, the Borrower has requested that the Lenders party hereto, in their capacity as Requisite Lenders under the Credit Agreement, amend Section 3.3 of the Credit Agreement in order to permit the Loan Parties to make Investments that are not currently permitted by such Section in an aggregate amount of up to $10,000,000;

 

WHEREAS, the Borrower has requested that the Lenders party hereto, in their capacity as Requisite Lenders under the Credit Agreement, amend Section 3.6 of the Credit Agreement in order to permit the Loan Parties to dispose of assets pursuant to clauses (vi) and (viii) of such Section in partial or total consideration of a note or other form of delayed payment; and

 

WHEREAS, the Lenders party hereto, in their collective capacity as Requisite Lenders under the Credit Agreement, have agreed to consent to the sale of the Yosemite Property and to amend Section 3.3 of the Credit Agreement and clauses (vi)(c) and (viii)(c) of Section 3.6 of the Credit Agreement.

 

NOW, THEREFORE, in consideration of the foregoing and the agreements set forth in this Agreement, each of the Borrower, the Guarantors and the Lenders party hereto, in their collective capacity as Requisite Lenders under the Credit Agreement, hereby agree as follows:

 











 

SECTION 1.  Amendments.

 

(A)       Upon the effectiveness of this Agreement as provided below, Section 3.3 of the Credit Agreement is hereby amended and restated by replacing such Section in its entirety with the following:

 

Investments.  The Loan Parties will not, and will not permit any of their respective Subsidiaries to, directly or indirectly, make or own any Investment in any Person that is prohibited by Borrower’s Investment Policy, except for the following:

 

(A)       the CoBank Equities, as set forth in Subsection 2.7;

 

(B)       Permitted Acquisitions and Investments acquired in connection with Permitted Acquisitions; and

 

(C)       any other Investments, so long as (i) each such Investment and all transactions related thereto are consummated in accordance with Applicable Law in all material respects, (ii) after giving effect to each such Investment, no Default or Event of Default has occurred and is continuing, (iii) each such Investment is related to the telecommunications and/or the broadband industry, (iv) the consideration paid for all such Investments does not exceed $10,000,000 in the aggregate during the term hereof, and (v) Borrower is in pro forma compliance after giving effect to each such Investment with the covenants set forth in Subsections 4.1 through 4.3 for the most recently ended test period under such Subsections as if such Investment had occurred on the first day of such test period.

 

Without the consent of Administrative Agent, Borrower will not amend or modify its Investment Policy in any manner that Administrative Agent determines in its reasonable judgment is materially adverse to the interests of the Lenders hereunder or under any other Loan Document.  Administrative Agent shall provide or withhold its consent to any proposed amendment or modification to Borrower’s Investment Policy within 10 days of Administrative Agent receiving notice of such proposed amendment or modification in accordance with Subsections 4.4(L) and 9.3.  If Administrative Agent fails to respond within such 10-day period it shall be deemed to have consented to such proposed amendment or modification.

 

(B)       Upon the effectiveness of this Agreement as provided below, clause (vi)(c) of Section 3.6 of the Credit Agreement is hereby amended and restated by replacing such clause in its entirety with the following:

 

(c) as to any Asset Disposition with respect to which the fair market value of the assets disposed of exceeds $15,000,000, unless otherwise agreed to by the

 

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Administrative Agent, in its sole discretion, the sole consideration received is cash or other assets (other than a note or other delayed payment transaction),

 

(C)       Upon the effectiveness of this Agreement as provided below, clause (viii)(c) of Section 3.6 of the Credit Agreement is hereby amended and restated by replacing such clause in its entirety with the following:

 

(c) as to any Asset Disposition with respect to which the fair market value of the assets disposed of exceeds $15,000,000, unless otherwise agreed to by the Administrative Agent, in its sole discretion, the sole consideration received is cash or other assets (other than a note or other delayed payment transaction),

 

SECTION 2.  Consent.  Pursuant to clause (vi) of Section 3.6 of the Credit Agreement, the Loan Parties may dispose of assets pursuant to such clause of such Section if all of the conditions set forth in such clause of such Section are satisfied, including that the sole consideration received in respect of such disposition is cash or other assets (other than a note or other delayed payment transaction).  The Borrower has requested that the Requisite Lenders consent to SureWest Telephone disposing of the Yosemite Property in partial consideration of a note from the purchaser (the “Yosemite Property Sale”).  In reliance on the representations, warranties and agreements provided and made by the Borrower to the Lenders herein and in connection with the request for such consent, upon the effectiveness of this Agreement as provided below, the Lenders party hereto, in their collective capacity as Requisite Lenders under the Credit Agreement, hereby consent under the Credit Agreement to the Yosemite Property Sale.

 

SECTION 3.  Condition to Effectiveness.  This Agreement shall be effective only upon receipt by the Administrative Agent of an execution counterpart hereto signed by the Borrower, each Guarantor, and such Lenders party to the Credit Agreement that collectively constitute Requisite Lenders thereunder.

 

SECTION 4.  This Agreement shall not constitute a novation of the Credit Agreement or any other Loan Document.

 

SECTION 5.  All references to the Credit Agreement in the Credit Agreement or in any other Loan Document, shall be deemed a reference to the Credit Agreement as amended by this Agreement.  Except as expressly provided in this Agreement, the execution and delivery of this Agreement does not and will not amend, modify or supplement any provision of, or constitute a consent to or a waiver of any noncompliance with the provisions of, the Credit Agreement or the other Loan Documents, and the Credit Agreement and the other Loan Documents shall remain in full force and effect.

 

SECTION 6.  Each of the Borrower and the Guarantors hereby represents and warrants to the Lenders as follows:

 

(A)      Such entity has the right and power, and has taken all necessary action to authorize it, to execute, deliver and perform this Agreement in accordance with its terms.  This Agreement has been duly executed and delivered by such entity and is a legal, valid and binding obligation of it, enforceable against it in accordance with its terms.

 

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(B)      The execution, delivery and performance of this Agreement in accordance with its terms do not and will not, by the passage of time, the giving of notice or otherwise,

 

(1)        require any governmental approval or violate any Applicable Law relating to such entity;

 

(2)        conflict with, result in a breach of or constitute a default under the organizational documents of such entity, any material provision of any indenture, agreement or other instrument to which it is a party or by which it or any of its properties may be bound or any governmental approval relating to it; or

 

(3)        result in or require the creation or imposition of any lien (except as permitted by the Loan Documents) upon or with respect to any property now owned or hereafter acquired by such entity.

 

(C)       That, after giving effect to the amendments and consent set forth in this Agreement, the representations and warranties of such entity set forth in the Loan Documents to which it is a party are true and correct in all material respects as of the date hereof as if made on the date hereof.

 

(D)       That, after giving effect to the amendments and consent set forth in this Agreement, no Event of Default under the Loan Documents has occurred and is continuing as of this date.

 

SECTION 7.  The Borrower, as the maker of certain Security Documents and certain other related documents, hereby confirms and agrees that (a) each such document is and shall continue to be in full force and effect, and (b) the obligations secured by each such document include any and all obligations of the Borrower to the Lenders under the Credit Agreement, as amended hereby.

 

SECTION 8.  Each of the Guarantors, as the makers of certain guarantees set forth in the Credit Agreement, certain Security Documents and certain other related documents, hereby confirms and agrees that (a) its respective guarantee of the Guaranteed Obligations is and shall continue to be in full force and effect, (b) each such document is and shall continue to be in full force and effect, and (c) the obligations guaranteed or secured, as applicable, by each such applicable document include any and all obligations of the Borrower to the Lenders under the Credit Agreement, as amended hereby.

 

SECTION 9.  The Borrower agrees to pay the Lenders, on demand, all out-of-pocket costs and expenses incurred by the Lenders, including, without limitation, the reasonable fees and expenses of counsel retained by the Lenders, in connection with the negotiation, preparation, execution and delivery of this Agreement and all other instruments and documents contemplated hereby.

 

SECTION 10.  This Agreement may be executed in any number of counterparts and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original and shall be binding upon all parties and their respective permitted

 

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successors and assigns, and all of which taken together shall constitute one and the same agreement.

 

SECTION 11.  Except to the extent governed by applicable federal law, this Agreement shall be governed by and construed in accordance with the laws of the State of New York, without reference to choice of law doctrine.

 

[Signatures commence on the following page.]

 

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Witness the due execution hereof by the respective duly authorized officers of the undersigned as of the date first written above.

 

	
 
    	
SUREWEST   COMMUNICATIONS, a
   California corporation, as Borrower
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ STEVEN C. OLDHAM
    	
 
    
	
 
    	
 
    	
Steven C. Oldham
    
	
 
    	
 
    	
President and Chief   Executive Officer
    
	
 
    	
 
    	
 
    
	
 
    	
SUREWEST   BROADBAND, a   California
   corporation,
    
	
 
    	
SUREWEST   KANSAS HOLDINGS,
   INC., a Delaware   corporation,
    
	
 
    	
SUREWEST   TELEVIDEO, a   California
   corporation,
    
	
 
    	
SUREWEST   KANSAS, INC., a   Delaware
   corporation, and
    
	
 
    	
SUREWEST   TELEPHONE, a   California
   corporation, each as a Guarantor
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ STEVEN C. OLDHAM
    	
 
    
	
 
    	
 
    	
Steven C. Oldham
    
	
 
    	
 
    	
President and Chief   Executive Officer
    
	
 
    	
 
    
	
 
    	
SUREWEST KANSAS CONNECTIONS,
    LLC, a Delaware limited liability   company,
   as a Guarantor
    
	
 
    	
 
    
	
 
    	
By:
    	
SureWest Kansas   Holdings, Inc.,
   its manager
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ STEVEN C. OLDHAM
    
	
 
    	
 
    	
 
    	
Steven C. Oldham
    
	
 
    	
 
    	
 
    	
President and Chief   Executive
   Officer
    
						


 

 

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SUREWEST   KANSAS LICENSES, LLC,
    SUREWEST KANSAS OPERATIONS,
   LLC, and

SUREWEST KANSAS PURCHASING,
   LLC, each a Delaware limited liability
   company, each as a Guarantor
    
	
 
    	
 
    
	
 
    	
By:
    	
SureWest Kansas   Connections, LLC,
   its manager
    
	
 
    	
By:
    	
SureWest Kansas   Holdings, Inc.,
   its manager
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ STEVEN C. OLDHAM
    
	
 
    	
 
    	
 
    	
Steven C. Oldham
   President and Chief Executive
   Officer
    	
 
    


 

 

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COBANK, ACB,   as Administrative Agent, Lead Arranger, Bookrunner, Issuing Lender, Swingline   Lender and a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 /s/ Victor Padilla
    
	
 
    	
 
    	
Victor Padilla
    
	
 
    	
 
    	
Vice President
    


 

 

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ROYAL BANK OF CANADA,   as Syndication
   Agent, Bookrunner, Lead Arranger and a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ D.W. Scott
    
	
 
    	
 
    	
Name:
    	
D.W. Scott Johnson
    
	
 
    	
 
    	
Title:
    	
Authorized Signatory
    


 

 

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UNION BANK,   as Documentation Agent, Lead
   Arranger and a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ David Hill
    
	
 
    	
 
    	
Name:
    	
David Hill
    
	
 
    	
 
    	
Title:
    	
Vice President
    


 

 

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RBC BANK (USA),   as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
Richard Marshall
    
	
 
    	
 
    	
Name:
    	
Richard Marshall
    
	
 
    	
 
    	
Title:
    	
Market Executive –   National Division
    


 

 

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RAYMOND JAMES BANK, FSB,   as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Joseph A. Ciccolini
    
	
 
    	
 
    	
Name:
    	
Joseph A. Ciccolini
    
	
 
    	
 
    	
Title:
    	
Vice President-Senior   Corporate
    
	
 
    	
 
    	
 
    	
Banker
    


 

 

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BANK OF THE WEST,   as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
Edward Unwin
    
	
 
    	
 
    	
Name:
    	
Edward Unwin
    
	
 
    	
 
    	
Title:
    	
Vice President
    


 

 

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BROWN BROTHERS   HARRIMAN & CO., 
   as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Scott C. Meves
    
	
 
    	
 
    	
Name:
    	
Scott C. Meves
    
	
 
    	
 
    	
Title:
    	
SVP
    


 

 

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FARM CREDIT BANK OF TEXAS,   as a 
   Voting Participant
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Nicholas King
    
	
 
    	
 
    	
Name:
    	
Nicholas King
    
	
 
    	
 
    	
Title:
    	
Vice President
    


 

 

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FARM CREDIT SERVICES OF   AMERICA, FLCA, as a Voting Participant 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ John Zhang 
    
	
 
    	
 
    	
Name: John Zhang 
    
	
 
    	
 
    	
Title:  Vice President
    


 

 

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NORTHWEST FARM CREDIT SERVICES,   
   as a Voting Participant
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jeremy A. Roewe
    
	
 
    	
 
    	
Name:  Jeremy A. Roewe 
    
	
 
    	
 
    	
Title:    Account Manager
    


 

 

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UNITED FCS, FLCA, d/b/a FCS 

COMMERCIAL FINANCE GROUP,   as a 
   Voting Participant
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jeremy Voigts
    
	
 
    	
 
    	
Name:  Jeremy Voigts
    
	
 
    	
 
    	
Title:    Vice-President
    


 

 

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FCS FINANCIAL, FLCA,   as a Voting 
   Participant
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Lee Fuchs
    
	
 
    	
 
    	
Name:  Lee Fuchs
    
	
 
    	
 
    	
Title:    Vice President
    


 

 

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FARM CREDIT SERVICES OF THE   MOUNTAIN PLAINS, FLCA, as a Voting Participant
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Bradley K. Leafgren
    
	
 
    	
 
    	
Name:  Bradley K. Leafgren
    
	
 
    	
 
    	
Title:    Senior Vice President
    


 

 

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