revolvingcredit_amendno1.htm


    Execution
Version

     

    AMENDMENT
NO. 1 TO CREDIT AGREEMENT

     

    AMENDMENT
No. 1 (this “Amendment”)
dated as of December 9, 2008 to the Revolving Credit Agreement dated as of March
14, 2008 (the “Credit
Agreement”) among NATIONAL RURAL UTILITIES COOPERATIVE FINANCE
CORPORATION (the “Borrower”), the BANKS party
thereto (the “Banks”),
DEUTSCHE BANK SECURITIES INC., UBS LOAN FINANCE LLC and THE BANK OF
TOKYO-MITSUBISHI UFJ, LTD., New York Branch, as Co-Documentation Agents, THE
ROYAL BANK OF SCOTLAND PLC, as Syndication Agent, and THE BANK OF NOVA SCOTIA,
as Administrative Agent (the “Administrative
Agent”).

     

    WITNESSETH:

     

    WHEREAS,
the parties hereto desire to amend the Credit Agreement to add certain
provisions thereto and to provide for certain waivers and consents and other
amendments with respect to the terms thereof;

     

    NOW,
THEREFORE, the parties hereto agree as follows:

     

    Section
1.  Defined Terms;
References.  Unless otherwise specifically defined herein, each
term used herein that is defined in the Credit Agreement has the meaning
assigned to such term in the Credit Agreement.  Each reference to
“hereof”, “hereunder”, “herein” and "hereby” and each other similar reference
and each reference to “this Agreement” and each other similar reference
contained in the Credit Agreement shall, from and after the Amendment Effective
Date (as defined in Section 8 below), refer to the Credit Agreement as amended
hereby.

     

    Section
2.  Liens.  Clause
(vii) of Section 5.10 of the Credit Agreement is hereby amended by replacing
“$3,000,000,000” with “$6,000,000,000”.

     

    Section 3.  ICC Transactions. Article 9 of the Credit
Agreement is hereby amended by adding immediately after Section 9.14 thereof a
new Section 9.15 that reads as follows:

     

    “Section
9.15.  ICC
Transactions. Notwithstanding anything to the contrary set forth in
this Agreement (without limiting the terms of the penultimate sentence of this
Section 9.15) or in any of the Notes or other instruments or documents that
have been or are in the future executed or delivered pursuant to, or that
otherwise relate to, this Agreement or to any Borrowings or Loans hereunder (all
of the foregoing, collectively with this Agreement, the “Credit Documentation”), (a) to the
extent necessary under the Credit Documentation, the Banks hereby consent to,
and waive any Default, Event of Default or other breach, violation, default or
noncompliance with the provisions of the Credit Documentation that might
otherwise be caused by or be 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    attributable
to, the “ICC
Transactions” as such term is defined in Schedule 9.15 hereto, and (b)
the ICC Transactions, the “ICC
Assets,” the
“ICC Related Companies” (as such terms
are respectively defined in Schedule 9.15 hereto), and the assets,
liabilities and operations of the ICC Related Companies (including without
limitation any circumstances, events, occurrences, actions or omissions relating
to, of or by any of the ICC Related Companies), are hereby excluded from,
and shall not be taken into account in applying, interpreting or determining
compliance with, the provisions of the Credit Documentation (including without
limitation, the definitions, representations, warranties, covenants, agreements,
conditions and events of default set forth in the Credit Documentation) and may
be excluded from any certifications, notices, reports or statements delivered or
to be delivered pursuant to the Credit Documentation. Without limiting the
generality of the foregoing, the defined terms “Controlled
Subsidiary,” “Consolidated Subsidiary Member,” “ERISA
Group,” “Joint Venture,” “Member” and “Subsidiary,” among
others, as used in the Credit Documentation shall not include the ICC Related
Companies. Notwithstanding the preceding provisions of this Section 9.15,
any new investments in the ICC Related Companies by purchase of equity and/or
debt securities, funding (through capital contributions and/or newly originated
loans) of working capital or capital expenditure needs of the ICC Related
Companies, payment by RTFC or the Borrower of claims of other creditors of the
ICC Related Companies, and/or provision of any new guarantees, letters of
credit and/or other new credit support or credit enhancement of the debt or
other obligations of the ICC Related Companies, in the case of each of the
foregoing, made or provided by the Borrower and/or RTFC at any time from and
after December 9, 2008 shall not exceed in the aggregate (but without
double-counting any such new investments) $275,000,000 without the consent
of the Required Banks.  To the extent that the Credit Documentation
provides that any of the ICC Transactions may be implemented if certain advance
notice thereof is given, all such conditions or requirements of advance notice
shall be deemed to have been complied with and all such notices shall be deemed
to have been duly and timely given in accordance with the terms of the Credit
Documentation.”

     

    Section 4.  ICC Transactions
Schedule.  The Credit Agreement is hereby amended by adding
immediately after Schedule 5.03(a) thereto a new Schedule 9.15 to the Credit
Agreement in the form attached to this Amendment as Schedule 9.15, which
schedule is hereby incorporated in and made a part of this Amendment and the
Credit Agreement.

     

    Section
5.  Representations
of Borrower.  The Borrower represents and warrants that (i) the
representations and warranties of the Borrower set forth in Article 4 of the
Credit Agreement will be true on and as of the Amendment Effective Date,
provided that, for purposes of this Section 5, (A) with respect to Section
4.02(a), all references to balance sheets and financial statements as at and for
the fiscal year ended May 31, 2007 shall refer to the Borrower’s financial
statements as at and for the fiscal 

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    year
ended May 31, 2008, (B) with respect to Section 4.02(b), all references to
balance sheets and financial statements shall refer to the Borrower’s financial
statements as of and for the three-month period ended August 31, 2008 and
references to the six-month period ended November 30, 2007 shall refer to the
three-month period ended August 31, 2008, and (C) with respect to Section
4.02(c), the reference to November 30, 2007 shall refer to August 31,
2008.

     

    Section
6.  Governing
Law.  This Amendment shall be governed
by and construed in accordance with the laws of the State of New
York.

     

    Section
7.  Counterparts.  This
Amendment may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon
the same instrument.

     

    Section
8.  Effectiveness.  This
Amendment shall become effective as of the date hereof (the “Amendment Effective Date”)
when the Administrative Agent shall have received from each of the Borrower and
the Required Banks a counterpart hereof signed by such party or facsimile or
other written confirmation (in form satisfactory to the Administrative Agent)
that such party has signed a counterpart hereof.

     

    Section
9.  Continuing
Effectiveness of Credit Agreement as Amended.  From and after
the Amendment Effective Date, the Credit Agreement and this Amendment shall be
construed together as a single instrument, and the Credit Agreement, as amended
hereby, shall remain in full force and effect and is hereby ratified, approved
and confirmed all respects.

     

    Section
10.  Severability.  Any
provision of this Amendment that is prohibited or unenforceable in any
jurisdiction shall, as to such provision and such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions of this Amendment or affecting the validity or
enforceability of such provision in any other jurisdiction.

     

    Section
11.  Headings.  The
various headings of this Amendment are inserted for convenience only and shall
not affect the meaning or interpretation of this Amendment or any provisions
hereof or of the Credit Agreement as amended hereby.

     

    Section
12.  Successors and
Assigns.  This Amendment shall be binding upon and shall inure
to the benefit of the parties hereto, the other Banks and the respective
successors and assigns of the foregoing.

     

    


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    IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed as of the date first above written.

     

    
      
        	
                 
      

              	
                NATIONAL
      RURAL UTILITIES 

                 
      COOPERATIVE FINANCE 

                 
      CORPORATION

              


      

    

    


                                                                   

      
        	
                 
      

              	
                By:
      /s/STEVEN L.
      LILLY

              


      

    

    
      	
               
      

            	
              Name:
      Steven L. Lilly    

            


    

    
      	
               
      

            	
              Title:
      Sr. Vice President & Chief Financial
Officer

            


    

     

     

     

                                                [OTHER SIGNATURES
FOLLOW 

                                                SCHEDULE 9.15
ATTACHED HERETO]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE
9.15

     

    ICC
TRANSACTIONS

     

    Background

     

    As
described in the Borrower’s filings with the U.S. Securities and Exchange
Commission, Rural Telephone Finance Cooperative (“RTFC”), a Consolidated
Subsidiary of the Borrower, made secured loans to Innovative Communication
Corporation (“ICC”), a
diversified telecommunications company organized under the laws of the United
States Virgin Islands (“USVI”) and headquartered in
St. Croix, USVI, which loans have been on non-accrual status since February
2005, and ICC and certain of its affiliates are the subject of pending
bankruptcy proceedings.  Through operating divisions and subsidiaries,
ICC provides cellular, wireline local and long-distance telephone, cable
television, Internet access and other telecommunications services in the eastern
and southern Caribbean and in mainland France.  ICC and its
subsidiaries are hereby defined as the “ICC Companies.”  As
of August 31, 2008, RTFC had $484 million in loans outstanding to ICC, and all
such ICC loans have been on non-accrual status since February 1,
2005.  A Bankruptcy Trustee has been appointed to manage the
operations of the ICC bankrupt estate (the “Trustee”).  The
Trustee has separated the bankrupt estate into two groups described by the
Trustee as follows:

    


    “Group 1”:

    


    
      	
              ·  

            	
              Wireline
      telephone operations in the USVI,

            


    

    
      	
              ·  

            	
              Wireless
      telephone operations in the USVI and St. Maarten/St. Martin,
      and

            


    

    
      	
              ·  

            	
              Cable
      television service operations in the USVI, the British Virgin Islands and
      St. Maarten.

            


    

    


    “Group 2”:

    


    
      	
              ·  

            	
              Cable
      television operations in Guadeloupe, Martinique and
  France.

            


    

    


    


    ICC
Transactions

     

    The
Borrower and RTFC are contemplating the acquisition of some or all of the assets
and/or stock of the ICC Companies in Group 1 and/or Group 2 (collectively,
“ICC Assets”), either
through a credit bid pursuant to which, if such credit bid is successful, ICC
Assets would be transferred to RTFC, the Borrower or one or more designees
controlled by the Borrower or RTFC (and which may be one or more special purpose
entities owned directly or indirectly by the Borrower or RTFC) or through one or
more joint ventures with one or more third-party bidders pursuant to which the
Borrower, RTFC and/or one or more special purpose entities created by the
Borrower or RTFC 

     

    
      
        
        

      

      
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    would
receive partial equity ownership in the acquisition entity/ies (the
above-mentioned designees, special purpose entities and joint ventures, together
with the ICC Companies, are hereby defined collectively as the “ICC Related Companies”); and
in either case, among other things, (i) RTFC may transfer some or all of its
rights with respect to its ICC loans (including without limitation the right to
acquire ICC Assets pursuant to a successful RTFC credit bid) to the Borrower or
to one or more special purpose entities controlled and designated by the
Borrower, and such transfer(s) of RTFC’s rights may occur (A) in exchange for
the Borrower’s forgiveness of, or in satisfaction of, some or all of RTFC’s
indebtedness to the Borrower that was incurred to finance RTFC’s ICC loans,
and/or (B) pursuant to the terms of a guaranty agreement between the Borrower
and RTFC under which the Borrower has guaranteed, subject to certain
limitations, that RTFC’s loss in respect of its ICC loans will not exceed its
loss reserve therefor and under which the Borrower is entitled to be transferred
RTFC’s rights relating to the ICC loans if RTFC makes a call on the
guaranty; (ii) the Borrower and/or RTFC may provide equity and/or debt
capitalization of, and ongoing funding for, the entities involved in the
acquisition, ownership and operation of ICC Assets, and may create one or more
of special purpose entities for such purposes; (iii) the Borrower and/or RTFC
may provide working capital and capital expenditure financing to the ICC
Companies and for the ICC Assets, either directly or through such special
purpose entity/ies; (iv) the acquisition of ICC Assets would involve settling
claims of other creditors of the ICC Companies, which settlements may be
financed by the Borrower and/or RTFC directly or through ICC Related
Companies; (v) the Borrower and/or RTFC may provide credit support and/or
credit enhancement for obligations of ICC Related Companies, including without
limitation in the form of guaranties and/or letters of credit; (vi) the
Borrower or RTFC would hold such ICC Assets (through one or more special purpose
entities) or such joint venture investment(s) and operate or provide for the
operation of the ICC Companies for the purpose of preserving and rehabilitating
such ICC Assets, preparing them for resale or other disposition and reselling or
disposing of them in one or more transactions at a price or prices or for other
consideration satisfactory to RTFC and/or the Borrower; and (vii) the Borrower
and/or RTFC may engage staff and/or outside consultants, agents, managers,
management companies and other professional advisers to advise and assist with
respect to, and/or to carry out, the foregoing.  All of the potential
transactions, actions and other matters referred to above in this paragraph
(together with such other related transactions and steps, occurring prior to or
concurrently with or within a reasonable time after the transactions, actions
and other matters referred to above and as may be reasonably necessary to carry
out such transactions, actions and other matters) are hereby defined
collectively as the “ICC
Transactions.”

     

    Nothing
in this Schedule 9.15 or in Section 9.15 of the Credit Agreement shall
constitute an obligation on the Borrower, RTFC or any other Person to enter into
all or any of the transactions, or to take all or any of the actions, described
in this Schedule 9.15.  Transactions and actions referred to in
this Schedule 9.15 are not necessarily listed in the chronological order in
which they may be entered into or taken.

     

    
      
        
        

      

      
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    [SIGNATURE
PAGES TO AMENDMENT NO. 1 TO

    REVOLVING
CREDIT AGREEMENT DATED AS OF MARCH 14, 2008

    CONTINUE
ON FOLLOWING PAGES]

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
       

      
        	
                THE BANK OF NOVA SCOTIA,
      as 

                    Administrative
      Agent and as a Bank

              
	
                By:

              	/s/
      THANE RATTEW
	
                Name:
      Thane Rattew

              
	
                Title:
      Managing Director

              


      

    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    
      
        
          	
                  The Bank of Tokyo-Mitsubishi UFJ, LTD,

                      New
      York Branch

                
	
                  By:

                	/s/
      MARY COSEO  
	
                  Name:
      Mary Coseo

                
	
                  Title:
      Authorized Signatory

                


        

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    

      
        
          
            	
                    Commerica Bank

                  
	
                    By:

                  	/s/ MARK
      SKRZYNSKI  
	
                    Name:
      Mark Skrzynski

                  
	
                    Title:
      Corporate Banking
Officer

                  


          

        

      

       

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      
         

        

          
            
              
                	
                        DEUTSCHE BANK AG NEW YORK

                            BRANCH

                      
	
                        By:

                      	/s/
      MING K. CHU  
	
                        Name:
      Ming K. Chu

                      
	
                        Title:
      Vice President

                      


              

            

          

           

        

      

      
        

          
            
              
                	
                         

                      
	
                        By:

                      	/s/ HEIDI
      SANDQUIST  
	
                        Name:
      Heidi Sandquist

                      
	
                        Title:
      Vice President

                      


              

            

          

           

        

         

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
         

        

          
            
              
                	
                        HSBC BANK USA, NATIONAL

                            ASSOCIATION

                      
	
                        By:

                      	/s/
      JIMMY TSE  
	
                        Name:
      Jimmy Tse

                      
	
                        Title: Vice
      President

                      


              

            

          

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

        

      

    

     

     

    
       

      

        
          
            
              	
                      JPMORGAN
      CHASE BANK, N.A.

                    
	
                      By:

                    	/s/
      MICHAEL DEFORGE  
	
                      Name:
      Michael DeForge

                    
	
                      Title:
      Executive Director

                    


            

          

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

    

     

    
       

      

        
          
            
              	
                      KEYBANK NATIONAL

                          ASSOCIATION

                    
	
                      By:

                    	/s/
      SHERRIE I. MANSON  
	
                      Name:
      Sherrie I. Manson

                    
	
                      Title:
      Senior Vice President

                    


            

          

        

         

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

    

     

     

    
      
         

        

          
            
              
                	
                        MERRILL LYNCH BANK
  USA

                      
	
                        By:

                      	/s/
      LOUIS ALDER  
	
                        Name:
      Louis Alder

                      
	
                        Title:
      First Vice President

                      


              

            

          

           

           

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

        

      

    

     

     

    
      
         

        

          
            
              
                	
                        Mizuho Corporate Bank,
    Ltd.

                      
	
                        By:

                      	/s/RAYMOND
      VENTURA  
	
                        Name:
      Raymond Ventura

                      
	
                        Title:
      Deputy General Manager

                      


              

            

          

           

          
             

            

              
                
                  
                    	
                             

                          
	
                            By:

                          	 
      
	
                            Name:
      

                          
	
                            Title:
      

                          


                  

                

              

               

            

          

           

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

        

      

    

     

     

     

    
      
         

        

          
            
              
                	
                        PNC Bank, N.A.

                      
	
                        By:

                      	/s/
      D. JERMAINE JOHNSON
	
                        Name:
      D. Jermaine Johnson

                      
	
                        Title:
      Vice President

                      


              

            

          

           

           

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

        

      

    

     

     

     

    
      
        

          
            
              
                	
                        The Royal Bank of Scotland

                            PLC 

                      
	
                        By:

                      	/s/
      BELINDA TUCKER  
	
                        Name:
      Belinda Tucker

                      
	
                        Title:
      Senior Vice President

                      


              

            

          

           

           

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

             

             

             

            
              
                 

                

                  
                    
                      
                        	
                                SunTrust Bank

                              
	
                                By:

                              	/s/ANDREW JOHNSON 
      
	
                                Name:
      Andrew Johnson

                              
	
                                Title:
      Director

                              


                      

                    

                  

                   

                   

                   

                  
                    
                      
                      

                    

                    
                      
                      

                      
                        

                      

                    

                    
                      
                      

                    

                     

                     

                     

                    
                      
                         

                        

                          
                            
                              
                                	
                                        UBS Loan Finance LLC

                                      
	
                                        By:

                                      	/s/
      IRJA R. OTSA
	
                                        Name:
      Irja R. Otsa

                                      
	
                                        Title:
      Associate Director

                                      


                              

                            

                          

                          

                            
                              
                                
                                  	
                                           

                                        
	
                                          By:

                                        	/s/
      MARY E. EVANS  
	
                                          Name:
      Mary E. Evans

                                        
	
                                          Title:
      Associate Director

                                        


                                

                              

                            

                             

                          

                           

                           

                          
                            
                              
                              

                            

                            
                              
                              

                              
                                

                              

                            

                            
                              
                              

                            

                             

                             

                             

                             

                            
                              
                                 

                                

                                  
                                    
                                      
                                        	
                                                U.S. Bank, N.A. 

                                              
	
                                                By:

                                              	/s/ ERIC
      J. COSGROVE   
	
                                                Name:
      Eric J. Cosgrove

                                              
	
                                                Title:
      Vice President