Document:

Exhibit 10.33

 

THE AMENDED AND
RESTATED

NEIMAN MARCUS GROUP, INC.

DEFINED CONTRIBUTION

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

 

(Effective as of January 1,
2008)

 

 

	
  ARTICLE
  I PURPOSE

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  II DEFINITIONS

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2-1

  	
   

  	
  “Affiliate”

  	
   

  	
  2

  
	
  Section 2-2

  	
   

  	
  “Amended
  Enrollment Agreement”

  	
   

  	
  2

  
	
  Section 2-3

  	
   

  	
  “Base
  Pay”

  	
   

  	
  2

  
	
  Section 2-4

  	
   

  	
  “Beneficiary”

  	
   

  	
  2

  
	
  Section 2-5

  	
   

  	
  “Board”

  	
   

  	
  2

  
	
  Section 2-6

  	
   

  	
  “Cause”

  	
   

  	
  2

  
	
  Section 2-7

  	
   

  	
  “Change
  of Control”

  	
   

  	
  2

  
	
  Section 2-8

  	
   

  	
  “Claimant”

  	
   

  	
  4

  
	
  Section 2-9

  	
   

  	
  “Code”

  	
   

  	
  4

  
	
  Section 2-10

  	
   

  	
  “Committee”

  	
   

  	
  4

  
	
  Section 2-11

  	
   

  	
  “Company”

  	
   

  	
  4

  
	
  Section 2-12

  	
   

  	
  “Compensation
  Limitation”

  	
   

  	
  4

  
	
  Section 2-13

  	
   

  	
  “DB
  SERP”

  	
   

  	
  4

  
	
  Section 2-14

  	
   

  	
  “Defined
  Contribution”

  	
   

  	
  4

  
	
  Section 2-15

  	
   

  	
  “Defined
  Contribution Account”

  	
   

  	
  4

  
	
  Section 2-16

  	
   

  	
  “Disabled”

  	
   

  	
  4

  
	
  Section 2-17

  	
   

  	
  “Effective
  Date”

  	
   

  	
  4

  
	
  Section 2-18

  	
   

  	
  “Eligible
  Compensation”

  	
   

  	
  4

  
	
  Section 2-19

  	
   

  	
  “Eligible
  Employee”

  	
   

  	
  6

  
	
  Section 2-20

  	
   

  	
  “Employee”

  	
   

  	
  6

  
	
  Section 2-21

  	
   

  	
  “Employer”

  	
   

  	
  6

  
	
  Section 2-22

  	
   

  	
  “Enrollment
  Agreement”

  	
   

  	
  7

  
	
  Section 2-23

  	
   

  	
  “ERISA”

  	
   

  	
  7

  
	
  Section 2-24

  	
   

  	
  “Exchange
  Act”

  	
   

  	
  7

  
	
  Section 2-25

  	
   

  	
  “Hour
  of Service”

  	
   

  	
  7

  
	
  Section 2-26

  	
   

  	
  “Identification
  Date”

  	
   

  	
  7

  
	
  Section 2-27

  	
   

  	
  “Key
  Employee”

  	
   

  	
  7

  
	
  Section 2-28

  	
   

  	
  “Non-Transitional
  Defined Contribution”

  	
   

  	
  7

  
	
  Section 2-29

  	
   

  	
  “Participant”

  	
   

  	
  7

  
	
  Section 2-30

  	
   

  	
  “Plan”

  	
   

  	
  7

  
	
  Section 2-31

  	
   

  	
  “Plan
  Year”

  	
   

  	
  7

  
	
  Section 2-32

  	
   

  	
  “Separation
  Date”

  	
   

  	
  7

  
	
  Section 2-33

  	
   

  	
  “Separation
  From Service”

  	
   

  	
  8

  
	
  Section 2-34

  	
   

  	
  “Specified
  Distribution Date”

  	
   

  	
  8

  
	
  Section 2-35

  	
   

  	
  “Specified
  Employee”

  	
   

  	
  8

  
	
  Section 2-36

  	
   

  	
  “Transitional
  Defined Contribution”

  	
   

  	
  8

  
	
  Section 2-37

  	
   

  	
  “Year
  of Service”

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  III ADMINISTRATION OF THE PLAN AND DISCRETION

  	
   

  	
  9

  
	
   

  	
   

  	
   

  
	
  Section 3-1

  	
   

  	
  Administration

  	
   

  	
  9

  
	
  Section 3-2

  	
   

  	
  Compensation
  of Committee; Expenses

  	
   

  	
  9

  
	
  Section 3-3

  	
   

  	
  Indemnification

  	
   

  	
  9

  
	
  Section 3-4

  	
   

  	
  Interpretations

  	
   

  	
  9

  

 

 

	
  ARTICLE
  IV PARTICIPATION

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4-1

  	
   

  	
  Defined
  Contributions

  	
   

  	
  10

  
	
  Section 4-2

  	
   

  	
  Time
  of Distribution

  	
   

  	
  11

  
	
  Section 4-3

  	
   

  	
  Form of
  Distribution

  	
   

  	
  11

  
	
  Section 4-4

  	
   

  	
  Modifications
  of Distribution Timing

  	
   

  	
  11

  
	
  Section 4-5

  	
   

  	
  Characterization
  of Payments for 409A Purposes

  	
   

  	
  11

  
	
  Section 4-6

  	
   

  	
  Change
  in Status

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  V INVESTMENT CREDITS AND FUNDING

  	
   

  	
  13

  
	
   

  	
   

  	
   

  
	
  Section 5-1

  	
   

  	
  Theoretical
  Rate of Return

  	
   

  	
  13

  
	
  Section 5-2

  	
   

  	
  Notional
  Investment Alternatives

  	
   

  	
  13

  
	
  Section 5-3

  	
   

  	
  Changes
  of Notional Investment Alternatives, if Applicable

  	
   

  	
  13

  
	
  Section 5-4

  	
   

  	
  Unfunded
  Status

  	
   

  	
  13

  
	
  Section 5-5

  	
   

  	
  Valuation

  	
   

  	
  14

  
	
  Section 5-6

  	
   

  	
  Defined
  Contribution Account Statement

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  VI VESTING

  	
   

  	
  15

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VII DISTRIBUTIONS

  	
   

  	
  16

  
	
   

  	
   

  	
   

  
	
  Section 7-1

  	
   

  	
  Distributions

  	
   

  	
  16

  
	
  Section 7-2
  

  	
   

  	
  Distributions
  on Separation From Service for Participants Who  Are Deemed Specified Employees 

  	
   

  	
  16 

  
	
  Section 7-3

  	
   

  	
  Death
  of Participant

  	
   

  	
  16

  
	
  Section 7-4

  	
   

  	
  Disability
  of Participant

  	
   

  	
  16

  
	
  Section 7-5

  	
   

  	
  Change
  of Control

  	
   

  	
  17

  
	
  Section 7-6

  	
   

  	
  Change
  in Time

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  VIII AMENDMENT AND TERMINATION

  	
   

  	
  18

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IX CLAIMS PROCEDURES

  	
   

  	
  19

  
	
   

  	
   

  	
   

  
	
  Section 9-1

  	
   

  	
  Claim

  	
   

  	
  19

  
	
  Section 9-2

  	
   

  	
  Claim
  Decision

  	
   

  	
  19

  
	
  Section 9-3

  	
   

  	
  Request
  for Review

  	
   

  	
  19

  
	
  Section 9-4

  	
   

  	
  Review
  of Decision

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  X MISCELLANEOUS

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10-1

  	
   

  	
  Designation
  of Beneficiary

  	
   

  	
  20

  
	
  Section 10-2

  	
   

  	
  Limitation
  of Participant’s Right

  	
   

  	
  20

  
	
  Section 10-3

  	
   

  	
  No
  Limitation on Employer Actions

  	
   

  	
  20

  
	
  Section 10-4

  	
   

  	
  Obligations
  to the Employer

  	
   

  	
  20

  
	
  Section 10-5

  	
   

  	
  Non-alienation
  of Benefits

  	
   

  	
  20

  
	
  Section 10-6

  	
   

  	
  Protective
  Provisions

  	
   

  	
  21

  
	
  Section 10-7

  	
   

  	
  Withholding
  Taxes

  	
   

  	
  21

  
	
  Section 10-8

  	
   

  	
  Unfunded
  Status of Plan

  	
   

  	
  21

  
	
  Section 10-9

  	
   

  	
  Severability

  	
   

  	
  21

  
	
  Section 10-10

  	
   

  	
  Governing
  Law

  	
   

  	
  21

  
	
  Section 10-11

  	
   

  	
  Headings

  	
   

  	
  21

  
	
  Section 10-12

  	
   

  	
  Gender,
  Singular and Plural

  	
   

  	
  21

  
	
  Section 10-13

  	
   

  	
  Notice

  	
   

  	
  21

  

 

 

	
  Section 10-14

  	
   

  	
  Missing
  Participants

  	
   

  	
  21

  
	
  Section 10-15

  	
   

  	
  Incapacity

  	
   

  	
  21

  
	
  Section 10-16

  	
   

  	
  Section 409A

  	
   

  	
  22

  

 

 

THE NEIMAN MARCUS GROUP, INC.

DEFINED CONTRIBUTION

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

 

ARTICLE I

PURPOSE

 

The
Neiman Marcus Group, Inc. (the “Company”) adopted The Neiman Marcus Group, Inc.
Defined Contribution Supplemental Executive Retirement Plan (the “Plan”),
effective as of the Effective Date (such term, together with all other
capitalized terms set forth in this Plan having the meanings set forth in
ARTICLE II below), in recognition of the services provided by certain key
management employees or other highly compensated employees of the Company and
its Affiliates. Subsequent to the adoption of the Plan, but also effective as
of the Effective Date, the Plan was amended and restated to resolve minor
scrivener’s errors and formatting issues that were discovered following the
adoption of the Plan.

 

The
Plan is intended to provide Eligible Employees with the opportunity to receive
deemed contributions from the Company for a portion of their Compensation that
exceeds the limit on compensation under Section 401(a)(17)(A) of the
Code, as adjusted pursuant to section 401(a)(17)(B) (the “Compensation
Limitation”). The Company intends that the Plan shall at all times be
maintained on an unfunded basis for federal income tax purposes under the Code
and administered as a non-qualified “top-hat” plan exempt from the substantive
requirements of ERISA. The Company also intends that the Plan be operated and maintained
in accordance with the requirements of Section 409A of the Code and the
regulations and rulings thereunder.

 

 

ARTICLE II

DEFINITIONS

 

For
purposes of this Plan, the following terms shall have the meanings indicated,
unless the context clearly indicates otherwise:

 

Section 2-1                                     “Affiliate” means any corporation or organization that
together with the Company is treated as a single employer under Section 414(b) or
(c) of the Code.

 

Section 2-2                                     “Amended
Enrollment Agreement” means a new
Enrollment Agreement executed by a Participant that satisfies the requirements
of Section 7-6 below and that changes the time and/or form of a
distribution for a particular Plan Year.

 

Section 2-3                                     “Base
Pay” means the base salary payable
by an Employer to an Employee, including amounts that would have been payable
to the Employee as base salary but for an election under:

 

(a)                                  Section 125 of the Code

 

(b)                                 Section 401(k) of the Code,
including catch-up contributions and Roth 401(k) contributions, if any, or

 

(c)                                  a deferral election under a nonqualified
deferred compensation plan.

 

Section 2-4                                     “Beneficiary” means the person or persons (natural or
otherwise) designated by the Participant as such in accordance with Section 10-1
below.

 

Section 2-5                                     “Board” means the Board of Directors of
The Neiman Marcus Group, Inc.

 

Section 2-6                                     “Cause”

 

(a)                                  The term “Cause” means:

 

(1)                                  the willful and continued failure by an
Employee to substantially perform duties consistent with the Employee’s
position with an Employer (other than any such failure resulting from
incapacity due to physical or mental illness), after a demand for substantial
performance is delivered to the Employee, and the Employee has failed to resume
substantial performance of the Employee’s duties on a continuous basis within
fourteen (14) days of receiving such demand;

 

(2)                                  the willful engaging by an Employee in conduct
that is demonstrably and materially injurious to an Employer, monetarily or
otherwise; or

 

(3)                                  the Employee’s commission of a felony,
commission of a misdemeanor involving assets of an Employer, or violation of an
Employer’s merchandise discount policy.

 

(b)                                 For purposes of this definition, no act, or
failure to act, on the Employee’s part shall be deemed “willful” unless done,
or omitted to be done, by the Employee not in good faith and without reasonable
belief that the Employee’s action or omission was in the best interest of an
Employer.

 

Section 2-7                                     “Change
of Control”

 

(a)                                  The term “Change of Control” means the occurrence of any of the following events after the
Effective Date:

 

(1)                                  any sale, lease, exchange or other transfer
(in one transaction or a series of related transactions) of all or
substantially all of the assets of the

 

 

Company
on a consolidated basis to any Person or group of related persons for purposes
of Section 13(d) of the Securities Exchange Act of 1934 (a “Group”),
together with any CIC Affiliates thereof other than to a Majority Stockholder;

 

(2)                                  the approval by the holders of the outstanding
voting power of the Company of any plan or proposal for the liquidation or
dissolution of the Company;

 

(3)                                  the occurrence of both of the following:

 

(A)                              any Person or Group (other than the Majority
Stockholder) becoming the beneficial owner (within the meaning of Section 13(d) of
the Exchange Act), directly or indirectly, of Common Stock representing more
than 40% of the aggregate outstanding voting power of the Company and such
Person or Group actually having the power to vote such Common Stock in any such
election, and

 

(B)                                the Majority Stockholder beneficially owning
(within the meaning of Section 13(d) of the Securities Exchange Act
of 1934), directly or indirectly, in the aggregate a lesser percentage of the
voting power of the Company than such other Person or Group described in Section 2-7(a)(3)(A) above;

 

(4)                                  the replacement of a majority of the members
of the Board over a two-year period from the members who constituted the Board
at the beginning of such period, and such replacement shall not have been
approved by a vote of at least a majority of the members of the Board then
still in office who either were members of such Board at the beginning of such
period or whose election as a member of such Board was previously so approved
or who were nominated by, or designees of, a Majority Stockholder; or

 

(5)                                  consummation of a merger or consolidation of
the Company with another entity in which holders of the Common Stock of the
Company immediately prior to the consummation of the transaction hold, directly
or indirectly, immediately following the consummation of the transaction, less
than 50% of the common equity interest in the surviving corporation in such
transaction and the Majority Stockholder does not hold a sufficient amount of
voting power (or similar securities) to elect a majority of the surviving
entity’s board of directors.

 

(b)                                 For purposes of this Section 2-7, the
following terms shall have the following meanings:

 

(1)                                  “CIC Affiliate” shall mean, with
respect to any entity, any other corporation, organization, association,
partnership, sole proprietorship or other type of entity, whether incorporated
or unincorporated, directly or indirectly controlling or controlled by or under
direct or indirect common control with such entity.

 

(2)                                  “Common Stock” shall mean the common
stock of the Company, $0.01 par value per share.

 

(3)                                  “Majority Stockholder” shall mean,
collectively or individually as the context requires, Newton Holding, LLC, TPG
Newton III, LLC, TPG Partners IV, L.P., TPG Newton Co-Invest I, LLC, Warburg
Pincus Private Equity VIII, L.P., Warburg Pincus Netherlands Private Equity
VIII C.V. I, Warburg

 

 

Pincus Germany Private
Equity VIII K.G, Warburg Pincus Private Equity IX, L.P and/or their respective
CIC Affiliates.

 

(4)                                  “Person”
shall mean an individual, partnership, corporation, limited liability company,
unincorporated organization, trust or joint venture, or a governmental agency
or political subdivision thereof.

 

Section 2-8                                     “Claimant”
means a person who believes that he or she is being denied a benefit to which
he or she is entitled under the Plan.

 

Section 2-9                                     “Code”
means the Internal Revenue Code of 1986, as amended.

 

Section 2-10                               “Committee”
means The Neiman Marcus Group, Inc. Employee Benefits Committee or any
successor committee appointed by the Board.

 

Section 2-11                               “Company”
means The Neiman Marcus Group, Inc. a Delaware corporation, and any
successor, including a successor to all or substantially all of the Company’s
assets or business which assumes the obligations of the Company.

 

Section 2-12                               “Compensation
Limitation” means the dollar limitation in effect under Section 401(a)(17)(A) of
the Code with respect to a Plan Year, as adjusted pursuant to Section 401(a)(17)(B) of
the Code.

 

Section 2-13                               “DB
SERP” means The Neiman Marcus Group, Inc. Defined Benefit Supplemental
Executive Retirement Plan.

 

Section 2-14                               “Defined
Contribution” means the amounts credited to the Plan on behalf of an
Eligible Employee by the Company pursuant to Section 4-1(a) or Section 4-1(b) below.

 

Section 2-15                               “Defined
Contribution Account” means the bookkeeping account established by the
Company to which are credited Transitional Defined Contributions and Non-Transitional
Defined Contributions, and notational earnings and losses thereon.

 

Section 2-16                               “Disabled”
means:

 

(a)                                  subject
to Section 2-16(b) below, a condition:

 

(1)                                  in
which the Committee, in its sole and absolute discretion, determines has
rendered the Participant unable to engage in any substantial gainful activity
by reason of any medically determinable physical or mental impairment that can
be expected to result in death or can be expected to last for a continuous
period of not less than 12 months, or

 

(2)                                  for
which the Participant, by reason of any medically determinable physical or
mental impairment that can be expected to result in death or can be expected to
last for a continuous period of not less than 12 months, is receiving income
replacement benefits for a period of not less than three months under an
accident and health plan covering employees of the Participant’s Employer.

 

(b)                                 Notwithstanding
Section 2-16(a) above, a Participant shall be deemed to be Disabled
if such Participant is determined to be totally disabled by the Social Security
Administration.

 

Section 2-17                               “Effective
Date” means January 1, 2008.

 

Section 2-18                               “Eligible
Compensation” means all of the items reflected in Section 2-18(a) below
and excluding the items reflected in Section 2-18(b) below:

 

(a)                                  Subject
to the exclusions enumerated in Section 2-18(b) below, the term “Eligible
Compensation” includes:

 

 

(1)                        wages, within the meaning of Section 3401(a) of
the Code, and all other payments of remuneration to a Participant by an
Employer for which the Employer is required to furnish the Participant a
written statement under Sections 6041(d), 6051(a)(3) and 6052 of the Code, but determined without regard to any rules that
limit the remuneration included in wages based on the nature or location of the
employment or the services performed (such as the exception for agricultural
labor in Section 3401(a)(2) of the Code),

 

(2)                        any contributions made by an Employer on
behalf of the Participant to a qualified cash or deferred arrangement (as
defined in Section 401(k) of the Code) maintained by the Employer,

 

(3)                        any compensation reduction amounts elected by such Participant for the purchase of
benefits pursuant to a cafeteria plan (within the meaning of Section 125(d) of
the Code) maintained the Employer, and

 

(4)                        any elective amounts not includable in a Participant’s gross
income by reason of Section 132(f)(4) of the Code.

 

(b)                                 Notwithstanding the compensatory items
enumerated in Section 2-18(a) above, the term “Eligible Compensation”
excludes:

 

(1)                                  moving or other expense reimbursements,

 

(2)                                  imputed compensation,

 

(3)                                  property,

 

(4)                                  tips,

 

(5)                                  allowances,

 

(6)                                  fringe benefits (both cash and noncash),

 

(7)                                  severance payments,

 

(8)                                  service awards and prizes other those paid in
cash through an Employer’s payroll system,

 

(9)                                  contributions to a nonqualified plan of
deferred compensation made by the an Employer to the extent that the
contributions are not includible in the gross income of the Participant for the
taxable year in which contributed,

 

(10)                            distributions from any other plan of deferred compensation, regardless
of whether such amounts are includible in the gross income of the Participant
when distributed,

 

(11)                            amounts received in connection with or otherwise attributable to awards
or grants under any stock option plan, restricted stock plan, restricted stock
unit plan, performance share plan, or similar plan,

 

(12)                            other amounts which receive special tax benefits, including premiums for
group-term life insurance,

 

(13)                            incentive payments earned through a wellness or similar program sponsored
by an Employer, and

 

(14)                            any other extraordinary remuneration.

 

 

Section 2-19                               “Eligible Employee”

 

(a)                                  Subject to Section 2-19(b) below,
the term “Eligible Employee” means each Employee who, as of the Effective Date
or the first day of any Plan Year thereafter:

 

(1)                                  has completed at least one Year of Service, or
such shorter period of service as may be specified by the Committee, in its
sole and absolute discretion; and

 

(2)                                  in the sole and absolute discretion of the
Committee:

 

(A)                              is or was a member of a group of “key
management or other highly compensated employees” of the Employer, within the
meaning of Sections 201, 301 and 401 of ERISA,

 

(B)                                is actively employed on a full-time basis,

 

(C)                                is not classified as an hourly employee,

 

(D)                               is, or has been, designated as being eligible
to participate in the Plan, and

 

(E)                                 either:

 

(i)                                     had in effect on August 1 of the
preceding calendar year (or, if later, on the Employee’s date of hire) a rate
of Base Pay of at least 80% of the Compensation Limitation applicable to such
preceding calendar year, or

 

(ii)                                  was both:

 

(I)                                    participating in the DB SERP on December 31,
2007, and

 

(II)                                either:

 

(a)                                  elected to both cease participating in the DB
SERP and commence participation in this Plan, or

 

(b)                                 ceased to be eligible to participate in the DB
SERP solely as a result of the partial freezing of eligibility under the DB
SERP.

 

(b)                                 Notwithstanding Section 2-19(a) above,
an Eligible Employee shall remain an Eligible Employee notwithstanding any
reduction in his or her annual rate of Base Pay below the applicable minimum
reflected in Section 2-19(a)(2)(E)(i) above; provided, however, that the
Committee in its sole and absolute discretion may withdraw an Employee’s
designation under Section 2-19(a)(2)(D) above, as an Eligible Employee at any
time and for any reason effective with respect to any subsequent Plan Year.

 

Section 2-20                               “Employee” means any individual who is
employed by the Employer whose earnings are reported on Form W-2.

 

Section 2-21                               “Employer” means the Company and each
Affiliate. An Affiliate may revoke its acceptance of such designation at any
time, but until such acceptance has been revoked, all of the provisions of the
Plan and amendments thereto shall apply to the Eligible

 

 

Employees of the
Affiliate. In the event the designation is revoked by an Affiliate, the Plan
shall be deemed terminated only with respect to such Affiliate.

 

Section 2-22                               “Enrollment
Agreement” means the authorization form which an Eligible Employee timely
files with the Committee to designate the time of distributions from the Plan,
pursuant to the terms set forth in Section 4-2 below.

 

Section 2-23                               “ERISA” means the Employee Retirement
Income Security Act of 1974, as amended.

 

Section 2-24                               “Exchange Act” means the Securities
Exchange Act of 1934, as amended.

 

Section 2-25                               “Hour of Service” means each hour for
which an Employee is paid or entitled to payment for the performance of duties
for an Employer or an Affiliate.

 

Section 2-26                               “Identification Date” means December 31.

 

Section 2-27
                            “Key Employee”

 

(a)                                  The term “Key Employee” means an Employee who
is one of the following:

 

(1)                                  an officer of the Employer having annual
compensation greater than $140,000 (adjusted for inflation pursuant to Section 416(i) of the Code and limited to the top 50
Employees),

 

(2)                                  a five percent owner of the Employer, or

 

(3)                                  a one percent owner of the Employer having
annual compensation from the Employer of more than $150,000, subject to such
other determinations made by the Committee, in its sole discretion, in a manner
consistent with the regulations issued under Section 409A of the Code.

 

(b)                                 For purposes of this definition, the term
“compensation” shall have the meaning under Treas. Reg. § 1.415(c)-2(a),
without using the safe harbor provided in Treas. Reg. § 1.415(c)-2(d), any of
the special timing rules provided in Treas. Reg. § 1.415(c)-2(e), and any
special rules provided in Treas. Reg. § 1.415(c)-2(g).

 

Section 2-28                               “Non-Transitional Defined Contribution”
means the amounts credited to the Plan on behalf of an Eligible Employee by the
Company pursuant to Section 4-1(a) below.

 

Section 2-29                               “Participant” means each Eligible
Employee who is participating in the Plan in accordance with the provisions of
ARTICLE IV below. In the event of a Participant’s death, the term Participant
shall mean the Participant’s Beneficiary. In the case of a Participant’s
incompetency, the term Participant shall include an individual with a duly
authorized power of attorney or, in the absence of a duly authorized power of
attorney, the Participant’s personal representative or guardian. An individual
shall remain a Participant until that individual has received full distribution
of any amount credited to the Participant’s Defined Contribution Account.

 

Section 2-30                               “Plan” means this plan, called The
Neiman Marcus Group, Inc. Defined Contribution Supplemental Executive
Retirement Plan.

 

Section 2-31                               “Plan Year” means the 12 month period
beginning on each January 1 and ending on the following December 31.

 

Section 2-32                               “Separation Date” means the date on
which a Participant incurs a Separation From Service.

 

 

Section 2-33                               “Separation
From Service” means a Participant’s separation
from service with the Employer within the meaning of Section 409A of the
Code and the regulations issued thereunder.

 

Section 2-34                               “Specified
Distribution Date” means a specific time, within the meaning of Section 409A
of the Code and the regulations promulgated thereunder, that is designated by
the Participant in his or her Enrollment Agreement or Amended Enrollment
Agreement, as applicable; provided, however, that the Specified Distribution
Date cannot be sooner than the date on which the Participant has:

 

(a)                                  vested
in all of the amounts credited to
his or her Defined Contribution Account pursuant to ARTICLE VI below, and

 

(b)                                 either:

 

(1)                                  attained age fifty-five (55),

 

(2)                                  died,
or

 

(3)                                  determined to be Disabled.

 

Section 2-35                               “Specified
Employee” means an Employee who at any time during the 12-month period
ending on an Identification Date is a Key Employee. If an Employee would be
deemed a Key Employee as of an Identification Date, the Employee is treated as
a “Specified Employee” for the 12-month period beginning on the fourth month
following the end of the 12- month period following the Identification Date.
Notwithstanding the foregoing, unless otherwise provided under Section 409A
of the Code and its corresponding regulations, no Participant shall be deemed a
Specified Employee if at the time of the Participant’s Separation From Service
no stock of the Employer, or any entity required to be aggregated with the
Employer pursuant to Section 414(b) or 414(c) of the Code, is
publicly traded on an established securities market or otherwise.

 

Section 2-36                               “Transitional
Defined Contribution” means the amounts credited to the Plan on behalf of
an Eligible Employee by the Company pursuant to Section 4-1(b) below.

 

Section 2-37                               “Year
of Service” means completion of the twelve consecutive month period
beginning on the date the Employee first performs an hour of service upon
initial employment with an Employer or an Affiliate during which the Employee
is continuously employed by an Employer or an Affiliate or, with respect to an
Employee who terminates employment prior to completing a Year of Service,
completion of the twelve consecutive month period beginning on the date the
Employee first performs an hour of service upon reemployment with an Employer
or an Affiliate during which the Employee is continuously employed by an
Employer or an Affiliate.

 

 

ARTICLE III

ADMINISTRATION OF THE PLAN AND DISCRETION

 

Section 3-1                                     Administration. The Committee shall have full power
and authority to interpret the Plan, to prescribe, amend and rescind any rules,
forms and procedures as it deems necessary or appropriate for the proper
administration of the Plan and to make any other determinations and to take any
other such actions as it deems necessary or advisable in carrying out its
duties under the Plan. All action taken by the Committee arising out of, or in
connection with, the administration of the Plan or any rules adopted
thereunder, shall, in each case, lie within its sole discretion, and shall be
final, conclusive and binding upon the Company, the Employer, the Board, all
Participants, all Beneficiaries of Participants and all persons and entities
having an interest therein, and a Participant’s participation in the Plan shall
constitute that Participant’s acknowledgement and acceptance of the Committee’s
authority and discretion. The Committee may from time to time adopt rules and
regulations governing the operation of this Plan and may employ and rely on
such employees of the Employer, legal counsel, accountants, and agents, as it
may deem advisable to assist in the administration of the Plan.

 

Section 3-2                                     Compensation of Committee; Expenses. Members of the Committee shall serve
without compensation for their services unless otherwise determined by the
Board. All expenses of administering the Plan shall be paid by the Company.

 

Section 3-3                                     Indemnification. the Company shall indemnify, defend
and hold the Committee harmless from any and all claims, losses, damages,
expenses (including counsel fees) and liability (including any amounts paid in
settlement of any claim or any other matter with the consent of the Board)
arising from any act or omission of such member, except when the same is due to
gross negligence or willful misconduct.

 

Section 3-4                                     Interpretations. Any decisions, actions or
interpretations to be made under the Plan by the Company, the Employer, the
Board or the Committee shall be made in its respective sole discretion, not as
a fiduciary, need not be uniformly applied to similarly situated individuals
and shall be final, binding and conclusive on all persons interested in the
Plan.

 

 

ARTICLE IV

PARTICIPATION

 

Section 4-1                                     Defined Contributions.

 

(a)                                  Non-Transitional Defined Contributions. Effective as of the Effective Date,
the Company shall make a Non-Transitional Defined Contribution to the Plan on
behalf of each Eligible Employee periodically throughout the Plan Year. The
aggregate amount of such Non-Transitional Defined Contributions credited on
behalf of each Eligible Employee during each Plan Year will be equal to the
product of:

 

(1)                                  that
portion of such Eligible Employee’s Eligible Compensation that exceeds the
Compensation Limitation, and

 

(2)                                  ten
and one-half percent (10.5%).

 

(b)                                 Transitional Defined Contributions.

 

(1)                                  In
addition to amounts credited to Eligible Employees under Section 4-1(a) above,
effective as of the Effective Date, the Company shall periodically make
Transitional Defined Contributions during the Plan Year on behalf of each
Eligible Employee who:

 

(A)                              was
eligible under the DB SERP as of December 31, 2007, and

 

(B)                                has
neither attained, nor will attain, age sixty-six (66) during the Plan Year to
which the Transitional Defined Contribution would otherwise relate if credited
to such Eligible Employee’s Defined Contribution Account.

 

(2)                                  The
aggregate amount of such Transitional Defined Contributions for the Plan Year
for each Eligible Employee who has satisfied the eligibility criteria reflected
in Section 4-1(b)(1) above, shall be equal to the product of:

 

(A)                              that
portion of such Eligible Employee’s Eligible Compensation that exceeds the
Compensation Limitation, and

 

(B)                                the
applicable percentage that corresponds with the highest age attained by the
Eligible Participant during the Plan Year to which the Transitional Defined
Contribution would otherwise relate, according to the schedule set forth below:

 

	
  Eligible Employee’s

  Highest Age During

  Applicable Plan Year

  	
   

  	
  Applicable Percentage or

  Eligible Compensation

  	
   

  
	
  30 - 39

  	
   

  	
  3

  	
  %

  
	
  40 - 49

  	
   

  	
  4

  	
  %

  
	
  50 – 59

  	
   

  	
  5

  	
  %

  
	
  60 - 65

  	
   

  	
  6

  	
  %

  
	
  66 and Older

  	
   

  	
  0

  	
  %

  

 

(c)                                  Timing of Defined Contributions. Any Defined Contribution made under this
Section 4-1 will be credited to the Employee’s Defined Contribution
Account no later than as soon as administratively practicable following the
close of the Plan Year to which such Defined Contribution relates.

 

 

Section 4-2                                     Time of Distribution.

 

(a)                                  Affirmative Election.

 

(1)                                  Subject to Section 7-2, Section 7-3,
Section 7-4 and Section 7-5 below, the Committee, in its sole and
absolute discretion, may permit an Eligible Employee to elect to receive the
distribution of his or her Defined Contributions for each Plan Year upon the later of:

 

(A)                              his or her Separation From Service, or

 

(B)                                his or her Specified Distribution Date.

 

(2)                                  Notwithstanding anything herein to the contrary, an
affirmative election will be disregarded and given no consideration if such an
election is not reflected on a completed and fully executed Enrollment
Agreement that is timely with the Committee by the earlier of:

 

(A)                              the date set by the Committee, in its sole and
absolute discretion, or

 

(B)                                the first day of the Plan Year for which the
Defined Contribution relates.

 

(b)                                 Deemed Election. Subject to Section 7-2, Section 7-3,
Section 7-4 and Section 7-5 below, to the extent an Eligible Employee
has not made an affirmative election regarding the distribution of his or her
Defined Contributions for a given Plan Year, pursuant to Section 4-2(a) above,
the Eligible Employee shall be deemed to have designated the time of payment as
the later of:

 

(1)                                  Separation From Service, and

 

(2)                                  the attainment of age fifty-five (55).

 

Section 4-3                                     Form of Distribution. Subject to Section 7-3 below,
the distribution of a Participant’s Defined Contribution Account will be made
in five (5) annual installments commencing on the time of distribution
elected, or deemed to have been elected, by the Participant under
Section 4-2 above.

 

Section 4-4                                     Modifications
of Distribution Timing. Except as provided in Section 7-6 below, the
election as to the time of payment cannot be subsequently changed.

 

Section 4-5                                     Characterization
of Payments for 409A Purposes. For purposes of Section 409A of the
Code, installment payments under the Plan shall be treated as a series of
separate payments.

 

Section 4-6                                     Change
in Status. If at any time during the Plan Year an Eligible Employee ceases
to qualify as such, then the following provisions shall apply:

 

(a)                                  Cessation as an Eligible Employee.

 

(1)                                  If an Eligible Employee ceases to qualify as
an Eligible Employee at any time during the Plan Year, but remains employed by
an Employer, the Company will credit to such Eligible Employee’s Defined
Contribution Account, at the same time that Defined Contributions are credited
to the other Eligible Employees’ Defined Contribution Accounts, an amount equal
to the amount that the Eligible Employee would have received if the Eligible Employee
continued as such for the remainder of the Plan Year, except only the portion
of the Employee’s Compensation that was earned during the period he or she
qualified as an Eligible Employee will be counted for this purpose. For

 

 

purposes of determining
the portion of any bonus or similar remuneration that will be counted for this
purpose, only a pro rata portion of such remuneration will be counted, with
such pro rata portion determined by multiplying the amount of such remuneration
for the Plan Year, by a fraction, the numerator of which is the number of days
the Employee qualified as an Eligible Employee for the Plan Year and the
denominator of which is 365; and

 

(2)                                  In
addition, the Eligible Employee
shall not be eligible to receive any further Defined Contributions for any
future Plan Year, unless the Employee subsequently qualifies as an Eligible
Employee.

 

(b)                                 Termination
of Employment for any Reason Other Than Cause. If an Eligible Employee
ceases to be employed by an Employer at any time during the Plan Year for any
reason other than a termination of employment by the Employer for Cause, the
Company will credit, as soon as administratively practicable following the date
the Eligible Employee terminates employment with the Employer, to the Defined
Contribution Account of such Eligible Employee, a Defined Contribution equal to
the amount that the Eligible Employee
accrued for the Plan Year ending on the date such Eligible Employee terminated
employment, except that no amount will be credited for any portion of any bonus
or similar remuneration, if any, that is paid to the Eligible Employee
following the date of his or her termination of employment, and no additional
Defined Contribution will be credited for such Eligible Employee.

 

(c)                                  Termination
of Employment for Cause. If an Eligible Employee ceases to be employed by
an Employer at any time during the Plan Year as a result of a termination of
employment by the Employer for Cause, all Defined Contributions that have been
credited on behalf of such Eligible Employee shall be forfeited. Furthermore,
in such instances, no amounts will be credited to such Eligible Employee’s
Defined Contribution Account for the Plan Year in which such termination of
employment occurs.

 

 

ARTICLE V

INVESTMENT CREDITS AND FUNDING

 

Section 5-1                                     Theoretical
Rate of Return. A Participant’s Defined Contribution Account shall be
credited with a theoretical rate of return, which shall be established, and may
be prospectively modified at any time, by the Committee, in its sole and
absolute discretion; provided, however, that the Committee may not reduce the
theoretical rate of return below an annual rate equal to the average prime
interest rate published in the Eastern Edition of The Wall
Street Journal on the last business day of the preceding calendar
quarter (or, if two or more such rates are published, the average of such
rates), unless the Committee otherwise adopts two or more notional investment
alternatives.

 

Section 5-2                                     Notional
Investment Alternatives. To the extent two or more notional investment
alternatives are established by the Committee, the returns on each
Participant’s Defined Contribution Account will be based upon the notional
investment alternatives elected by the Participant. Notwithstanding the
foregoing, if two or more notional investment alternatives are established by
the Committee and a Participant does not affirmatively elect one or more
notional investment alternatives, until the Participant makes an affirmative
election regarding the notional investment alternatives on which the return of
his or her Defined Contribution Account will be based, the Participant will be
deemed to have elected the default investment option that the Committee has
designated for this purpose. Additionally, if two or more notional investment
alternatives are established by the Committee, unless otherwise provided under
this Plan, Participants may allocate the amounts credited to their Defined
Contribution Accounts among the notional investment alternatives available
under the Plan only in whole percentages of not less than one percent. The rate
of return, positive or negative, credited under any notional investment
alternative will be based upon the actual investment performance of the
investment fund(s) designated by the Committee from time to time, and
shall equal the total return of such investment fund, net of asset-based
charges, including, without limitation, money management fees, fund expenses
and mortality and expense risk insurance contract charges.

 

Section 5-3                                     Changes
of Notional Investment Alternatives, if Applicable. To the extent
established by the Committee, a Participant may change the notional investment
alternatives to which the Participant’s Defined Contribution Accounts are
deemed to be allocated on such basis as determined by the Committee in its sole
and absolute discretion. Each such change may include:

 

(a)                                  a
reallocation of the amounts credited to the Participant’s Defined Contribution
Account among the notional investment alternatives available in whole percentages
of not less than one percent, and/or

 

(b)                                 a
change in investment allocation in whole percentages of not less than one
percent of amounts to be credited to the Participant’s Defined Contribution
Account in the future.

 

Section 5-4                                     Unfunded
Status. Notwithstanding anything herein to the contrary, the Company shall
not be obligated to invest any Defined Contribution under this Plan, or any
other amounts, in such portfolios or in any other investment funds. The Plan
shall be entirely unfunded and no provision shall at any time be made with
respect to segregating any assets of the Company or an Employer for payment of
any distributions hereunder; however, the Board may, but shall not be required,
to authorize the establishment of a trust or the purchase of insurance to serve
as a funding vehicle for the Company’s obligations with respect to the Plan. In
any event, the obligation of the Company hereunder shall constitute a general,
unsecured obligation, payable solely from the general assets of the Company,
and no Participant shall have any rights to any specific assets of the Company
or any Employer.

 

 

Section 5-5                                     Valuation. The value of a Participant’s Defined
Contribution Account as of any date shall equal the amounts theretofore
credited to such Defined Contribution Account, including any earnings (positive
or negative) deemed to be earned on such Defined Contribution Account in
accordance with Section 5-1, or, if applicable, Section 5-2 above,
through the day preceding such date, less the amounts theretofore deducted from
such Defined Contribution Account.

 

Section 5-6                                     Defined
Contribution Account Statement. The
Committee shall provide to each Participant, not less frequently than quarterly
(or such other period as determined by the Committee in its sole discretion), a
statement in such form as the Committee deems desirable, setting forth the
balance standing to the credit of each Participant in his or her Defined
Contribution Account, and adjusted pursuant to Section 5-5 above.

 

 

ARTICLE VI

VESTING

 

An Eligible Employee
shall be fully vested in the amounts credited to his or her Defined
Contribution Account upon the earlier of:

 

(a)                                  his
or her completion of five (5) Years of Service;

 

(b)                                 his
or her attainment of age 65;

 

(c)                                  if
he or she was an Employee at the time of his or her death, the date of his or
her death;

 

(d)                                 if
he or she was an Employee at the time he or she becomes Disabled, the date he
or she becomes Disabled, or

 

(e)                                  if
he or she was an Employee at the time of the Change of Control, the date of a
Change of Control.

 

 

ARTICLE VII

DISTRIBUTIONS

 

Section 7-1                                     Distributions. A Participant shall receive a distribution
of the vested amount credited to his or her Defined Contribution Account under
the Plan at the time or times and in the form or forms selected by the
Participant in the Enrollment Agreement, as provided in ARTICLE IV, or pursuant
to one or more Amended Enrollment Agreements, as provided in Section 7-6
below; provided, however, that if the distribution of an amount credited to the
Participant’s Defined Contribution Account is to commence upon his or her
Separation From Service and such Participant is a Specified Employee at the
time of his or her Separation From Service, the provisions of Section 7-2
below shall apply to such distribution. A distribution paid pursuant to this Section 7-1
shall commence to be paid by the Company to the Participant as soon as
administratively practicable on or following the time designated by the
Participant, but no later than sixty (60) days following such designated time,
and shall be paid to the Participant entirely in cash.

 

Section 7-2                                     Distributions on Separation From Service for
Participants Who Are Deemed Specified Employees. Any Participant who is deemed a Specified
Employee at the time of his or her Separation From Service and designated, or
was deemed to have designated, as his or her distribution commencement date his
or her Separation From Service as the time for distribution of the vested
amounts credited to his or her Defined Contribution Account under the Plan
shall commence to receive such distribution(s) under the Plan as soon as
administratively practicable after the first day of the seventh month following
the Participant’s Separation Date, but no later than sixty (60) days following
such date. If a distribution is delayed because of the immediately preceding
sentence, the first distribution will be equal to the installment that the
Participant would have received during the first six (6) months following
the Participant’s Separation From Service, plus earnings or losses, and the
remaining installments shall be paid as if the installments commenced on the
Participant’s Separation Date. A distribution paid pursuant to this Section 7-2
shall be paid entirely in cash.

 

Section 7-3                                     Death of Participant. If a Participant dies prior to commencement
of his or her benefit under the Plan, the Participant’s Beneficiary shall
receive a lump sum cash distribution of the entire vested amount credited to
the Participant’s Defined Contribution Account as soon as administratively
practicable following the date of discovery of, or notification regarding, the
Participant’s death, but no later than sixty (60) days following the discovery
of, or notification regarding the Participant’s death. If a Participant dies
after commencement of his or her benefit under the Plan, the Participant’s
Beneficiary shall receive a lump sum cash distribution of the remaining
installments payable to the Participant under the Plan as soon as
administratively practicable following the date of the Participant’s death, but
not later than sixty (60) days following the discovery of, or notification
regarding the Participant’s death.

 

Section 7-4                                     Disability of Participant. If a Participant becomes Disabled prior to commencement
of his or her benefit under the Plan, the Participant shall receive a lump sum
cash distribution of the entire vested amount credited to his Defined
Contribution Account as soon as administratively practicable following the date
the Committee determines that such Participant is Disabled, but no later than
sixty (60) days following such determination. If a Participant becomes Disabled
after commencement of his or her benefit under the Plan, the Participant shall
receive a lump sum cash distribution of the remaining installments payable to
the Participant under the Plan as soon as administratively practicable
following the date the Committee determines that such Participant is Disabled,
but no later than sixty (60) days following such determination. Notwithstanding
anything herein to the contrary, if the Participant, in the sole judgment of
the Committee, is considered by reason of physical or mental condition to be
unable to give a valid receipt therefore, the Committee may direct payment in
accordance with Section 10-15 below.

 

 

Section 7-5                                     Change
of Control. In the event of a Change in Control, to the extent such Change
of Control is a permitted distribution event with respect to such Participant
pursuant to Code Section 409A(a)(2)(A)(v), all amounts credited to each
Participant’s Defined Contribution Account shall be distributed in single lump
sum cash payments, regardless of whether or not any such Participants have
already commenced benefits under the Plan, at the time of such Change in
Control or within five business days thereafter.

 

Section 7-6                                     Change
in Time.

 

(a)                                  Subject
to Section 7-6(b) below, a Participant may change the time of a distribution
designated in an Enrollment Agreement for a particular Plan Year by filing an
Amended Enrollment Agreement with the Committee in accordance with the
requirements of this Section 7-6; provided, however, that to change the
time of a distribution for a particular Plan Year:

 

(1)                                  the
Amended Enrollment Agreement applicable to such distribution will not become
effective for the twelve (12) month period after the date on which the Amended
Enrollment Agreement is filed with the Committee;

 

(2)                                  the
distribution cannot commence for a period that is not less than five (5) years
from the date such payment was originally scheduled to commence pursuant to the
original Enrollment Agreement; and

 

(3)                                  with
respect to a change in a time or form of payment on a Specified Distribution
Date, the Amended Enrollment Agreement cannot be made less than twelve (12)
months prior to the date of the scheduled payment.

 

(b)                                 Notwithstanding
anything herein to the contrary:

 

(1)                                  with
the exception of a Participant’s death or disability, once payment has
commenced, the time of such payment shall not be modified, and

 

(2)                                  a
Specified Distribution Date that applies to the distribution of a Participant’s
Defined Contributions for a given Plan Year may not be postponed by more than
ten (10) years from the date originally elected, or, if applicable, deemed
to have been elected.

 

 

ARTICLE VIII

AMENDMENT AND TERMINATION

 

The Plan may be amended,
suspended, discontinued or terminated at any time by the Board; provided,
however, that, except as provided below, no such amendment, suspension,
discontinuance or termination shall reduce or in any manner adversely affect
the rights of any Participant with respect to benefits that are payable or may
become payable under the Plan based upon the balance of the Participant’s
Defined Contribution Account as of the effective date of such amendment,
suspension, discontinuance or termination. The Committee may, at any time, also
make such amendments to the Plan as it deems necessary and appropriate, in its
sole and absolute discretion, without Board approval, provided that any such
amendments to the Plan by the Committee may not materially increase the costs
of the Plan to the Company or any other Employer or result in a material
adverse affect on a Participant. Notwithstanding anything to the contrary in
this ARTICLE VIII, if the Committee determines that, in order to avoid current
taxation of amounts deferred under the Plan or to comply with applicable law,
additional restrictions must be placed on Participants’ rights under the Plan,
then the Committee may, in its sole discretion, amend the Plan to impose such
restrictions, and/or cease contributions under the Plan with respect to all
Defined Contribution Accounts, any affected Defined Contribution Accounts or
the affected portions of any Defined Contribution Accounts. If the Board
terminates the Plan, Participants shall be entitled to a distribution of their
benefit under the Plan if the termination is on account of a permitted
distribution event under Treas. Reg. §1.409A-3(j)(4)(ix)(A), (B), (C) or (D) and
the requirements, as applicable, of such regulations are met with respect to
the termination of the Plan and distribution of benefits hereunder.

 

 

ARTICLE IX

CLAIMS PROCEDURES

 

Section 9-1                                     Claim.
A Claimant may file a written request for such benefit with the Committee,
setting forth the claim.

 

Section 9-2                                     Claim
Decision. Upon receipt of a claim, the Committee shall advise the Claimant
that a reply will be forthcoming within ninety (90) days and shall, in fact,
deliver such reply within such period. The Committee may, however, extend the
reply period for an additional ninety (90) days for reasonable cause. If the
claim is denied in whole or in part, the Claimant shall be provided a written
explanation, using language calculated to be understood by the Claimant,
setting forth:

 

(a)                                  the
specific reason or reasons for such denial;

 

(b)                                 the
specific reference to relevant provisions of the Plan on which such denial is
based;

 

(c)                                  a
description of any additional material or information necessary for the
Claimant to perfect the claim and an explanation why such material or such information
is necessary;

 

(d)                                 appropriate
information as to the steps to be taken if the Claimant wishes to submit the
claim for review;

 

(e)                                  the
time limits for requesting a review; and 

 

(f)                                    that
the Claimant has the right to bring an action for benefits under Section 502
of ERISA following an adverse determination on review.

 

Section 9-3                                     Request
for Review. Within sixty (60) days after the receipt by the Claimant of the
written opinion described above, the Claimant may request in writing that the
Committee review its determination. The Claimant, or his or her duly authorized
representative, may, but need not, review the pertinent documents and submit
issues and comments in writing for consideration by the Committee. If the
Claimant does not request a review of the initial determination within such
sixty (60) day period, the Claimant shall be barred and estopped from
challenging the determination.

 

Section 9-4                                     Review
of Decision.

 

(a)                                  Within
sixty (60) days after the Committee’s receipt of a request for review, it will
review the initial determination. After considering all materials presented by
the Claimant, the Committee will render a written opinion, written in a manner
calculated to be understood by the Claimant. If the decision is adverse, the
written opinion will:

 

(1)                                  set
forth the specific reasons for the decision and specific references to the
relevant provisions of this Plan on which the decision is based; and

 

(2)                                  include
a statement that the Claimant is entitled to receive, upon request and free of
charge, reasonable access to, and copies of, all documents, records and other
information relevant to the claim and that the Claimant may bring an action
under Section 502(a) of ERISA.

 

(b)                                 If
special circumstances require that the sixty (60) day time period be extended,
the Committee will so notify the Claimant and will render the decision as soon
as possible, but no later than one hundred twenty (120) days after receipt of
the request for review.

 

 

ARTICLE X

MISCELLANEOUS

 

Section 10-1                               Designation of Beneficiary. 
Each Participant may designate a Beneficiary or Beneficiaries (which
Beneficiary may be an entity other than a natural person) to receive any
payments which may be made following the Participant’s death. Such designation
may be changed or canceled at any time without the consent of any such
Beneficiary. Any such designation, change or cancellation must be made in a
form approved by the Committee and shall not be effective until received by the
Committee, or its designee. If no Beneficiary has been named, or the designated
Beneficiary or Beneficiaries shall have predeceased the Participant, the
Beneficiary shall be the Participant’s estate. If a Participant designates more
than one Beneficiary, the interests of such Beneficiaries shall be paid in
equal percentages, unless the Participant has specifically designated
otherwise.

 

Section 10-2                               Limitation
of Participant’s Right. Nothing in this Plan shall be construed as
conferring upon any Participant any right to continue in the employment of the
Employer, nor shall it interfere with the rights of the Employer to terminate
the employment of any Participant and/or to take any personnel action affecting
any Participant without regard to the effect which such action may have upon
such Participant as a recipient or prospective recipient of benefits under the
Plan. Any amounts payable hereunder shall not be deemed salary or other
compensation to a Participant for the purposes of computing benefits to which
the Participant may be entitled under any other arrangement established by the
Employer for the benefit of its employees.

 

Section 10-3                               No
Limitation on Employer Actions. Nothing contained in the Plan shall be
construed to prevent the Employer from taking any action which is deemed by it
to be appropriate or in its best interest. No Participant, Beneficiary, or
other person shall have any claim against the Employer as a result of such
action.

 

Section 10-4                               Obligations
to the Employer. If a Participant becomes entitled to a distribution of
benefits under the Plan, and if at such time the Participant has outstanding
any debt, obligation, or other liability representing an amount owing to the
Employer, then the Company may offset such amount owed to the Employer against
the amount of benefits otherwise distributable, but only as such amounts become
distributable. Such determination shall be made by the Committee.

 

Section 10-5                               Non-alienation
of Benefits.

 

(a)                                  Except
as expressly provided herein, no Participant or Beneficiary shall have the
power or right to transfer (otherwise than by will or the laws of descent and
distribution), alienate, or otherwise encumber the Participant’s interest under
the Plan. The Company’s obligations under this Plan are not assignable or
transferable except to:

 

(1)                                  any
corporation or partnership which acquires all or substantially all of the
Company’s assets; or

 

(2)                                  any
corporation or partnership into which the Company may be merged or
consolidated.

 

(b)                                 The
provisions of the Plan shall inure to the benefit of each Participant and the
Participant’s Beneficiaries, heirs, executors, administrators or successors in
interest.

 

 

Section 10-6                               Protective Provisions. 
Each Participant shall cooperate with the Company by furnishing any and
all information requested by the Company in order to facilitate the payment of
benefits hereunder, taking such physical examinations as the Company may deem
necessary and taking such other relevant action as may be requested by the
Company. If a Participant refuses to cooperate, the Company shall have no
further obligation to the Participant under the Plan, other than payment to
such Participant of then current balance of the Participant’s Defined
Contribution Account in accordance with his or her prior elections.

 

Section 10-7                               Withholding
Taxes. The Company and/or the Employer may make such provisions and take
such action as it may deem necessary or appropriate for the withholding of any
taxes which the Company and/or the Employer is required by any law or
regulation of any governmental authority, whether federal, state or local, to
withhold in connection with any deferrals, amounts credited or benefits payable
under the Plan, including, but not limited to, withholding of appropriate sums
from any amount payable to the Participant (or his or her Beneficiary) under
the Plan or otherwise payable to the Participant from other sources. Each
Participant, however, shall be responsible for the payment of all individual
tax liabilities relating to any such deferrals, credits and benefits.

 

Section 10-8                               Unfunded
Status of Plan. The Plan is intended to constitute an “unfunded” plan of
deferred compensation for Participants. Benefits payable hereunder shall be
payable out of the general assets of the Company, and no segregation of any
assets whatsoever for such benefits shall be required. With respect to any
payments not yet made to a Participant, nothing contained herein shall give any
such Participant any rights to assets that are greater than those of a general
creditor of the Company.

 

Section 10-9                               Severability.
If any provision of this Plan is held unenforceable, the remainder of the Plan
shall continue in full force and effect without regard to such unenforceable
provision and shall be applied as though the unenforceable provision were not
contained in the Plan.

 

Section 10-10                         Governing
Law. The Plan shall be construed in accordance with and governed by the
laws of the State of Texas, without reference to the principles of conflict of
laws.

 

Section 10-11                         Headings.
Headings are inserted in this Plan for convenience of reference only and are to
be ignored in the construction of the provisions of the Plan.

 

Section 10-12                         Gender,
Singular and Plural. All pronouns and any variations thereof shall be
deemed to refer to the masculine, feminine, or neuter, as the identity of the
person or persons may require. As the context may require, the singular may
read as the plural and the plural as the singular.

 

Section 10-13                         Notice.
Any notice required or permitted under the Plan shall be sufficient if in
writing and hand delivered or sent by registered or certified mail. Such notice
shall be deemed given as of the date of delivery or, if delivery is made by
mail, as of the date shown on the postmark on the receipt for registration or
certification. Notice to a Participant or Beneficiary shall be directed to the
individual’s last known address in the Employer’s records.

 

Section 10-14                         Missing
Participants. In the event that the Committee is unable to locate a
Participant or Beneficiary within two years following the date the Participant
was to commence receiving payment, the entire amount credited to the
Participant’s Defined Contribution Account shall be forfeited. If, after such
forfeiture, the Participant or Beneficiary later claims such benefit, such
benefit shall be reinstated without interest or earnings from the date payment
was to commence pursuant to ARTICLE VII above.

 

Section 10-15                         Incapacity.
In the event that any amount becomes payable under the Plan to a person who, in
the sole judgment of the Committee, is considered by reason of physical or
mental condition to be unable to give a valid receipt therefore, the Committee
may direct that such payment be made to any person found by the Committee, in
its sole judgment, to have

 

 

assumed the care of such
person. Any payment made pursuant to such determination shall constitute a full
release and discharge of the Committee, the Company and the Employer.

 

Section 10-16                         Section 409A. The Plan is intended to comply with
the applicable requirements of Section 409A of the Code and its
corresponding regulations and related guidance, and shall be administered in
accordance with Section 409A of the Code to the extent Section 409A
of the Code applies to the Plan. Notwithstanding anything in the Plan to the
contrary, distributions from the Plan may only be made in a manner and upon an
event permitted by Section 409A of the Code. To the extent that any
provision of the Plan would cause a conflict with the requirements of Section 409A
of the Code, or would cause the administration of the Plan to fail to satisfy
the requirements of Section 409A of the Code, such provision shall be
deemed null and void to the extent permitted by applicable law.

 

IN WITNESS WHEREOF, the
Company has caused this instrument to be signed in its name and on its behalf
by its duly authorized officer, this 10th day of March, 2008.

 

 

	
   

  	
  THE NEIMAN MARCUS
  GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Marita O’Dea

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Its: 

  	
  Senior Vice President,

  
	
   

  	
   

  	
  Chief Human Resource OfficerExhibit 10.1

 

 

THIRD AMENDED AND
RESTATED CREDIT AGREEMENT

 

DATED AS OF
SEPTEMBER 19, 2008

 

among

 

SUREWEST
COMMUNICATIONS

 

as Borrower,

 

COBANK, ACB,

 

as Administrative
Agent, Lead Arranger, Issuing Lender, Swingline Lender and a Lender

 

and

 

the other Lenders
referred to herein

 

 

 

TABLE OF CONTENTS

 

	
  SECTION 1 AMOUNTS AND TERMS OF LOANS

  	
  2

  
	
   

  	
  1.1.

  	
  Loans

  	
  2

  
	
   

  	
   

  	
  (A)

  	
  Term Loan A Facility

  	
  2

  
	
   

  	
   

  	
  (B)

  	
  Term Loan B Facility

  	
  2

  
	
   

  	
   

  	
  (C)

  	
  Revolving Loan Facility

  	
  2

  
	
   

  	
   

  	
  (D)

  	
  Swingline Loan Facility

  	
  2

  
	
   

  	
   

  	
  (E)

  	
  Letters of Credit

  	
  2

  
	
   

  	
   

  	
  (F)

  	
  Notes

  	
  6

  
	
   

  	
   

  	
  (G)

  	
  Loans

  	
  6

  
	
   

  	
  1.2.

  	
  Interest

  	
  6

  
	
   

  	
   

  	
  (A)

  	
  Interest Options

  	
  6

  
	
   

  	
   

  	
  (B)

  	
  Applicable Margins

  	
  7

  
	
   

  	
   

  	
  (C)

  	
  Interest Periods

  	
  7

  
	
   

  	
   

  	
  (D)

  	
  Calculation and Payment

  	
  8

  
	
   

  	
   

  	
  (E)

  	
  Default Rate of Interest

  	
  9

  
	
   

  	
   

  	
  (F)

  	
  Excess Interest

  	
  9

  
	
   

  	
   

  	
  (G)

  	
  Selection, Conversion or Continuation of Loans; LIBOR Availability

  	
  9

  
	
   

  	
  1.3.

  	
  Notice of Borrowing,
  Conversion or Continuation of Loans

  	
  10

  
	
   

  	
  1.4.

  	
  Fees and Expenses

  	
  11

  
	
   

  	
   

  	
  (A)

  	
  Commitment Fees

  	
  11

  
	
   

  	
   

  	
  (B)

  	
  Certain Other Fees

  	
  11

  
	
   

  	
   

  	
  (C)

  	
  Breakage Fee

  	
  11

  
	
   

  	
   

  	
  (D)

  	
  Expenses and Attorneys
  Fees

  	
  11

  
	
   

  	
   

  	
  (E)

  	
  Letter of Credit Fees

  	
  12

  
	
   

  	
  1.5.

  	
  Payments

  	
  12

  
	
   

  	
  1.6.

  	
  Repayments and
  Reduction of Term Loan Commitments and Revolving Loan Commitment and Related
  Mandatory Repayments

  	
  13

  
	
   

  	
   

  	
  (A)

  	
  Scheduled Repayments
  and Reductions of Term Loan Commitments, Revolving Loan Commitment and
  Swingline Loan Commitment

  	
  13

  
	
   

  	
   

  	
  (B)

  	
  Voluntary Reduction of
  Loan Commitments

  	
  14

  
	
   

  	
   

  	
  (C)

  	
  Mandatory Repayments

  	
  14

  
	
   

  	
  1.7.

  	
  Voluntary Prepayments
  and Other Mandatory Repayments

  	
  14

  
	
   

  	
   

  	
  (A)

  	
  Voluntary Prepayment of
  Loans

  	
  14

  
	
   

  	
   

  	
  (B)

  	
  Repayments from
  Insurance Proceeds

  	
  15

  
	
   

  	
   

  	
  (C)

  	
  Repayments from Asset
  Dispositions

  	
  15

  
	
   

  	
  1.8.

  	
  Application of
  Prepayments and Repayments; Payment of Breakage Fees, Etc.

  	
  15

  
	
   

  	
  1.9.

  	
  Loan Accounts

  	
  15

  
	
   

  	
  1.10.

  	
  Changes in LIBOR Rate
  Availability

  	
  16

  
	
   

  	
  1.11.

  	
  Capital Adequacy and
  Other Adjustments

  	
  16

  
	
   

  	
  1.12.

  	
  Optional
  Prepayment/Replacement of Lender in Respect of Increased Costs

  	
  17

  
	
   

  	
  1.13.

  	
  Taxes: No Deductions

  	
  18

  

 

i

 

	
   

  	
   

  	
  (A)

  	
  No Deductions

  	
  18

  
	
   

  	
   

  	
  (B)

  	
  Foreign Lenders

  	
  18

  
	
   

  	
  1.14.

  	
  Changes in Tax Laws

  	
  19

  
	
   

  	
  1.15.

  	
  Treatment of Certain
  Refunds

  	
  20

  
	
   

  	
  1.16.

  	
  Mitigation Obligations

  	
  20

  
	
   

  	
  1.17.

  	
  Term of This Agreement

  	
  20

  
	
   

  	
  1.18.

  	
  Letter of Credit
  Liability

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2
  AFFIRMATIVE COVENANTS

  	
  21

  
	
   

  	
  2.1.

  	
  Compliance With Laws

  	
  21

  
	
   

  	
  2.2.

  	
  Maintenance of Books
  and Records; Properties; Insurance

  	
  21

  
	
   

  	
  2.3.

  	
  Inspection

  	
  22

  
	
   

  	
  2.4.

  	
  Legal Existence, Etc.

  	
  22

  
	
   

  	
  2.5.

  	
  Use of Proceeds

  	
  22

  
	
   

  	
  2.6.

  	
  Further Assurances

  	
  22

  
	
   

  	
  2.7.

  	
  CoBank Patronage
  Capital

  	
  23

  
	
   

  	
  2.8.

  	
  Investment Company Act

  	
  23

  
	
   

  	
  2.9.

  	
  Payment of Obligations

  	
  23

  
	
   

  	
  2.10.

  	
  Environmental Laws

  	
  23

  
	
   

  	
  2.11.

  	
  ERISA Compliance

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3
  NEGATIVE COVENANTS

  	
  24

  
	
   

  	
  3.1.

  	
  Indebtedness

  	
  24

  
	
   

  	
  3.2.

  	
  Liens and Related
  Matters

  	
  25

  
	
   

  	
  3.3.

  	
  Investments

  	
  25

  
	
   

  	
  3.4.

  	
  Restricted Junior
  Payments

  	
  25

  
	
   

  	
  3.5.

  	
  Restriction on
  Fundamental Changes

  	
  25

  
	
   

  	
  3.6.

  	
  Disposal of Assets or
  Subsidiary Stock

  	
  26

  
	
   

  	
  3.7.

  	
  Transactions with
  Affiliates

  	
  27

  
	
   

  	
  3.8.

  	
  Conduct of Business

  	
  27

  
	
   

  	
  3.9.

  	
  Fiscal Year

  	
  27

  
	
   

  	
  3.10.

  	
  Inconsistent Agreements

  	
  27

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4 FINANCIAL COVENANTS
  AND REPORTING

  	
  28

  
	
   

  	
  4.1.

  	
  Leverage Ratio

  	
  28

  
	
   

  	
  4.2.

  	
  Interest Coverage Ratio

  	
  28

  
	
   

  	
  4.3.

  	
  Net Worth

  	
  28

  
	
   

  	
  4.4.

  	
  Financial Statements and Other Reports

  	
  28

  
	
   

  	
   

  	
  (A)

  	
  Quarterly Financials

  	
  28

  
	
   

  	
   

  	
  (B)

  	
  Year-End Financials

  	
  28

  
	
   

  	
   

  	
  (C)

  	
  Borrower Compliance Certificate

  	
  29

  
	
   

  	
   

  	
  (D)

  	
  Budgets

  	
  29

  
	
   

  	
   

  	
  (E)

  	
  SEC Filings

  	
  29

  
	
   

  	
   

  	
  (F)

  	
  Events of Default, Etc.

  	
  29

  
	
   

  	
   

  	
  (G)

  	
  Litigation

  	
  29

  
	
   

  	
   

  	
  (H)

  	
  Environmental Notices

  	
  30

  

 

ii

 

	
   

  	
   

  	
  (I)

  	
  ERISA Events

  	
  30

  
	
   

  	
   

  	
  (J)

  	
  Other Information

  	
  30

  
	
   

  	
  4.5.

  	
  Accounting Terms; Utilization of GAAP for Purposes
  of Calculations Under Agreement

  	
  30

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5 REPRESENTATIONS AND
  WARRANTIES

  	
  31

  
	
   

  	
  5.1.

  	
  Disclosure

  	
  31

  
	
   

  	
  5.2.

  	
  No Material Adverse Effect

  	
  31

  
	
   

  	
  5.3.

  	
  Organization, Powers, Authorization and Good
  Standing

  	
  31

  
	
   

  	
   

  	
  (A)

  	
  Organization and Powers

  	
  31

  
	
   

  	
   

  	
  (B)

  	
  Authorization; Binding Obligation

  	
  31

  
	
   

  	
   

  	
  (C)

  	
  Qualification

  	
  32

  
	
   

  	
  5.4.

  	
  Compliance of Agreement, Loan Documents and
  Borrowings with Applicable Law

  	
  32

  
	
   

  	
  5.5.

  	
  Compliance with Law; Governmental Approvals

  	
  32

  
	
   

  	
  5.6.

  	
  Tax Returns and Payments

  	
  32

  
	
   

  	
  5.7.

  	
  Environmental Matters

  	
  33

  
	
   

  	
  5.8.

  	
  Financial Statements

  	
  33

  
	
   

  	
  5.9.

  	
  Intellectual Property

  	
  33

  
	
   

  	
  5.10.

  	
  Litigation, Investigations, Audits, Etc.

  	
  33

  
	
   

  	
  5.11.

  	
  Employee Labor Matters

  	
  34

  
	
   

  	
  5.12.

  	
  ERISA Compliance

  	
  34

  
	
   

  	
  5.13.

  	
  Communications Regulatory Matters

  	
  35

  
	
   

  	
  5.14.

  	
  Solvency

  	
  35

  
	
   

  	
  5.15.

  	
  Investment Company Act

  	
  35

  
	
   

  	
  5.16.

  	
  Certain Agreements and Material Contracts

  	
  35

  
	
   

  	
  5.17.

  	
  Title to Properties

  	
  36

  
	
   

  	
  5.18.

  	
  Transactions with Affiliates

  	
  36

  
	
   

  	
  5.19.

  	
  OFAC

  	
  36

  
	
   

  	
  5.20.

  	
  Patriot Act

  	
  36

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6 EVENTS OF DEFAULT
  AND RIGHTS AND REMEDIES

  	
  36

  
	
   

  	
  6.1.

  	
  Event of Default

  	
  36

  
	
   

  	
   

  	
  (A)

  	
  Payment

  	
  36

  
	
   

  	
   

  	
  (B)

  	
  Default in Other Agreements

  	
  37

  
	
   

  	
   

  	
  (C)

  	
  Breach of Certain Provisions

  	
  37

  
	
   

  	
   

  	
  (D)

  	
  Breach of Warranty

  	
  37

  
	
   

  	
   

  	
  (E)

  	
  Other Defaults Under Loan Documents

  	
  37

  
	
   

  	
   

  	
  (F)

  	
  Involuntary Bankruptcy; Appointment of Receiver; Etc.

  	
  37

  
	
   

  	
   

  	
  (G)

  	
  Voluntary Bankruptcy; Appointment of Receiver; Etc.

  	
  37

  
	
   

  	
   

  	
  (H)

  	
  Judgment and Attachments

  	
  38

  
	
   

  	
   

  	
  (I)

  	
  Dissolution

  	
  38

  
	
   

  	
   

  	
  (J)

  	
  Solvency

  	
  38

  
	
   

  	
   

  	
  (K)

  	
  Injunction

  	
  38

  
	
   

  	
   

  	
  (L)

  	
  ERISA; Pension Plans

  	
  38

  
	
   

  	
   

  	
  (M)

  	
  Invalidity of Loan Documents

  	
  38

  

 

iii

 

	
   

  	
   

  	
  (N)

  	
  Licenses and Permits

  	
  38

  
	
   

  	
   

  	
  (O)

  	
  Change in Control

  	
  39

  
	
   

  	
  6.2.

  	
  Suspension of Commitments

  	
  39

  
	
   

  	
  6.3.

  	
  Acceleration

  	
  39

  
	
   

  	
  6.4.

  	
  Rights of Collection

  	
  39

  
	
   

  	
  6.5.

  	
  Consents

  	
  39

  
	
   

  	
  6.6.

  	
  Performance by Administrative Agent

  	
  40

  
	
   

  	
  6.7.

  	
  Set Off and Sharing of Payments

  	
  40

  
	
   

  	
  6.8.

  	
  Application of Payments

  	
  40

  
	
   

  	
  6.9.

  	
  Adjustments

  	
  41

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7 CONDITIONS TO LOANS

  	
  41

  
	
   

  	
  7.1.

  	
  Conditions to the Loan on the Amendment Date

  	
  41

  
	
   

  	
   

  	
  (A)

  	
  Executed Loan and Other Documents

  	
  41

  
	
   

  	
   

  	
  (B)

  	
  Closing Certificates; Opinions

  	
  42

  
	
   

  	
   

  	
  (C)

  	
  Consents

  	
  42

  
	
   

  	
   

  	
  (D)

  	
  Fees, Expenses, Taxes, Etc.

  	
  43

  
	
   

  	
   

  	
  (E)

  	
  Miscellaneous

  	
  43

  
	
   

  	
  7.2.

  	
  Conditions to All Loans

  	
  43

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 8 ASSIGNMENT AND
  PARTICIPATION

  	
  44

  
	
   

  	
  8.1.

  	
  Assignments and Participations in Loans and Notes

  	
  44

  
	
   

  	
   

  	
  (A)

  	
  General

  	
  44

  
	
   

  	
   

  	
  (B)

  	
  Assignments by the Lenders

  	
  45

  
	
   

  	
   

  	
  (C)

  	
  Register

  	
  46

  
	
   

  	
   

  	
  (D)

  	
  Participations

  	
  46

  
	
   

  	
   

  	
  (E)

  	
  Limitations upon Participant Rights

  	
  47

  
	
   

  	
   

  	
  (F)

  	
  Certain Pledges

  	
  47

  
	
   

  	
  8.2.

  	
  Administrative Agent

  	
  47

  
	
   

  	
   

  	
  (A)

  	
  Appointment

  	
  47

  
	
   

  	
   

  	
  (B)

  	
  Nature of Duties

  	
  48

  
	
   

  	
   

  	
  (C)

  	
  Rights, Exculpation, Etc.

  	
  48

  
	
   

  	
   

  	
  (D)

  	
  Reliance

  	
  49

  
	
   

  	
   

  	
  (E)

  	
  Indemnification

  	
  49

  
	
   

  	
   

  	
  (F)

  	
  Administrative Agent Individually

  	
  50

  
	
   

  	
   

  	
  (G)

  	
  Notice of Default

  	
  50

  
	
   

  	
   

  	
  (H)

  	
  Successor Administrative Agent

  	
  50

  
	
   

  	
   

  	
  (I)

  	
  Dissemination of Information

  	
  51

  
	
   

  	
  8.3.

  	
  Consents; Notices

  	
  51

  
	
   

  	
  8.4.

  	
  Disbursement of Funds

  	
  51

  
	
   

  	
  8.5.

  	
  Disbursements of Loans; Payments

  	
  52

  
	
   

  	
   

  	
  (A)

  	
  Pro Rata Treatment; Application

  	
  52

  
	
   

  	
   

  	
  (B)

  	
  Availability of Lender’s Pro Rata Share

  	
  52

  
	
   

  	
   

  	
  (C)

  	
  Return of Payments

  	
  52

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9 MISCELLANEOUS

  	
  53

  

 

iv

 

	
   

  	
  9.1.

  	
  Indemnities

  	
  53

  
	
   

  	
  9.2.

  	
  Amendments and Waivers

  	
  53

  
	
   

  	
  9.3.

  	
  Notices

  	
  55

  
	
   

  	
  9.4.

  	
  Failure or Indulgence Not Waiver; Remedies
  Cumulative

  	
  55

  
	
   

  	
  9.5.

  	
  Payments Set Aside

  	
  55

  
	
   

  	
  9.6.

  	
  Severability

  	
  56

  
	
   

  	
  9.7.

  	
  Lenders’ Obligations Several; Independent Nature of
  Lenders’ Rights

  	
  56

  
	
   

  	
  9.8.

  	
  Headings

  	
  56

  
	
   

  	
  9.9.

  	
  Governing Law

  	
  56

  
	
   

  	
  9.10.

  	
  Successors and Assigns

  	
  56

  
	
   

  	
  9.11.

  	
  No Fiduciary Relationship

  	
  56

  
	
   

  	
  9.12.

  	
  Construction

  	
  56

  
	
   

  	
  9.13.

  	
  Confidentiality

  	
  56

  
	
   

  	
  9.14.

  	
  Consent to Jurisdiction and Service of Process

  	
  57

  
	
   

  	
  9.15.

  	
  Waiver of Jury Trial

  	
  57

  
	
   

  	
  9.16.

  	
  Survival of Warranties and Certain Agreements

  	
  58

  
	
   

  	
  9.17.

  	
  Entire Agreement

  	
  58

  
	
   

  	
  9.18.

  	
  Counterparts; Effectiveness

  	
  58

  
	
   

  	
  9.19.

  	
  Patriot Act

  	
  59

  
	
   

  	
  9.20.

  	
  Effectiveness of Amendment and Restatement; No
  Novation

  	
  59

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 10 DEFINITIONS

  	
  59

  
	
   

  	
  10.1.

  	
  Certain Defined Terms

  	
  59

  
	
   

  	
  10.2.

  	
  Other Definitional Provisions

  	
  73

  

 

v

 

SCHEDULES

 

	
  Schedule 3.7

  	
  Transactions
  with Affiliates

  
	
  Schedule 5.3(A)

  	
  Jurisdiction of
  Organization

  
	
  Schedule 5.3(C)

  	
  Qualification to
  Transact Business

  
	
  Schedule 5.4

  	
  Governmental
  Approvals

  
	
  Schedule 5.6

  	
  Tax Returns and
  Payments

  
	
  Schedule 5.8

  	
  Financial
  Statements

  
	
  Schedule 5.10

  	
  Litigation, Etc.

  
	
  Schedule 5.11

  	
  Employee Labor
  Matters

  
	
   

  	
   

  
	
  EXHIBITS

  
	
   

  	
   

  
	
  Exhibit 1.3

  	
  Form of
  Notice of Borrowing/Conversion/Continuation

  
	
  Exhibit 4.4(C)

  	
  Form of Compliance Certificate

  
	
  Exhibit 10.1(A)

  	
  Form of
  Assignment and Assumption

  
	
  Exhibit 10.1(B) 

  	
  Form of
  Third Amended and Restated Revolving Loan Promissory Note

  
	
  Exhibit 10.1(C)

  	
  Form of
  Third Amended and Restated Term Loan A Note

  
	
  Exhibit 10.1(D)

  	
  Form of Amended
  and Restated Term Loan B Note

  
	
  Exhibit 10.1(E)

  	
  Form of
  Amended and Restated Swingline Promissory Note

  

 

vi

 

INDEX OF DEFINED
TERMS

 

	
  Defined Term

  	
   

  	
  Defined in Section

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accounting Changes

  	
   

  	
   

  	
  §4.5

  	
   

  
	
  Acquired Indebtedness

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Adjusted Consolidated Net Worth

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Adjustment Date

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Administrative Agent

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Affected Lender

  	
   

  	
   

  	
  §1.12

  	
   

  
	
  Affiliate

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Agreement

  	
   

  	
   

  	
  Preamble

  	
   

  
	
  Amendment Date

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Applicable Law

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Asset Disposition

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Available Revolving Loan Commitment

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Banking Day

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Bankruptcy Code

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Base Rate

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Base Rate Loan

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Base Rate Margin

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Borrower

  	
   

  	
   

  	
  Preamble

  	
   

  
	
  Breakage Fees

  	
   

  	
   

  	
  §1.4(C)

  	
   

  
	
  Budget

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Business Day

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Calculation Period

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Capital Leases

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Cash Equivalents

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Change of Law

  	
   

  	
   

  	
  §1.10

  	
   

  
	
  Closing Date

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  CoBank

  	
   

  	
   

  	
  Preamble

  	
   

  
	
  Communications Act

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Compliance Certificate

  	
   

  	
   

  	
  §4.4(C)

  	
   

  
	
  Consolidated Net Assets

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Consolidated Net Worth

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Contingent Obligation

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Default

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Defaulting Lender

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  EBITDA

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Electing Lenders

  	
   

  	
   

  	
  §1.8

  	
   

  
	
  Environmental Laws

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  ERISA

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  ERISA Affiliate

  	
   

  	
   

  	
  §10.1

  	
   

  

 

vii

 

	
  ERISA Event

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Event of Default

  	
   

  	
   

  	
  §6.1

  	
   

  
	
  Everest Acquisition

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Evergreen Letter of Credit

  	
   

  	
   

  	
  §1.1(E)(8)

  	
   

  
	
  Excluded Taxes

  	
   

  	
   

  	
  §1.13(A)

  	
   

  
	
  Existing Credit Agreement

  	
   

  	
   

  	
  Preamble

  	
   

  
	
  Facility(ies)

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  FCC

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  First Amended Credit Agreement

  	
   

  	
   

  	
  Recitals

  	
   

  
	
  Fixed Rate Loan

  	
   

  	
   

  	
  §1.2(B)

  	
   

  
	
  Fixed Rate Margin

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Fixed Rate Period

  	
   

  	
   

  	
  §1.2(B)

  	
   

  
	
  Foreign Lender

  	
   

  	
   

  	
  §1.13(A)

  	
   

  
	
  Funding Date

  	
   

  	
   

  	
  §7.2

  	
   

  
	
  GAAP

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Governmental Approvals

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Governmental Authority

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Indebtedness

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Indemnitees

  	
   

  	
   

  	
  §9.1

  	
   

  
	
  Intellectual Property Rights

  	
   

  	
   

  	
  §5.9

  	
   

  
	
  Interest Coverage Ratio

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Interest Period

  	
   

  	
   

  	
  §1.2(C)

  	
   

  
	
  Interest Rate Agreement

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Investment

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Issuing Lender

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Lender(s)

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Assignment and Assumption

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  IRC

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  ISP

  	
   

  	
   

  	
  §1.1(E)(7)

  	
   

  
	
  Letter of Credit Liability

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Letter(s) of Credit

  	
   

  	
   

  	
  §1.1(E)

  	
   

  
	
  Leverage Ratio

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  LIBOR

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  LIBOR Loans

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  LIBOR Margin

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Licenses

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Lien

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Loan(s)

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Loan Commitment(s)

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Loan Documents

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Material Adverse Effect

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Material Contracts

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Multi-employer Plan

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Net Proceeds

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Non-Consenting Lender

  	
   

  	
   

  	
  §9.2

  	
   

  

 

viii

 

	
  Nonrenewal Notice Date

  	
   

  	
   

  	
  §1.1(E)(8)

  	
   

  
	
  Note(s)

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Note Purchase Agreement

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Notice of Borrowing/Conversion/Continuation

  	
   

  	
   

  	
  §1.3

  	
   

  
	
  Obligations

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Patriot Act

  	
   

  	
   

  	
  §9.16

  	
   

  
	
  PBGC

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Permitted Acquisitions

  	
   

  	
   

  	
  §3.5

  	
   

  
	
  Permitted Encumbrances

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Person

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Plan

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Priority Debt

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Pro Rata Share

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Proposed Change

  	
   

  	
   

  	
  §9.2

  	
   

  
	
  PUC

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Register

  	
   

  	
   

  	
  §8.1(C)

  	
   

  
	
  Related Interest Rate Agreement

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Replacement Lender

  	
   

  	
   

  	
  §1.12

  	
   

  
	
  Reportable Event

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Requisite Lenders

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Restricted Investments

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Restricted Junior Payment

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Revolving Loan(s)

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Revolving Loan Commitment

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Revolving Loan Expiration Date

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Revolving Loan Facility

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Revolving Note(s)

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  SEC

  	
   

  	
   

  	
  §4.4(A)

  	
   

  
	
  7-Day LIBOR Index Rate

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Statement

  	
   

  	
   

  	
  §4.4(B)

  	
   

  
	
  Swingline Facility

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Swingline Funding Date

  	
   

  	
   

  	
  §7.3

  	
   

  
	
  Swingline Lender

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Swingline Loan Commitment

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Swingline Loans

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Swingline Note(s)

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Subsidiary

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Tax Liabilities

  	
   

  	
   

  	
  §1.13(A)

  	
   

  
	
  Telecommunications System

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Term Loan A

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Term Loan A Commitment

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Term Loan A Facility

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Term Loan A Maturity Date

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Term Loan A Note(s)

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Term Loan B

  	
   

  	
   

  	
  §10.1

  	
   

  

 

ix

 

	
  Term Loan B Commitment

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Term Loan B Facility

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Term Loan B Maturity Date

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Term Loan B Note(s)

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Term Loan Commitments

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Term Loan Facilities

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Term Loan Maturity Date

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Term Loan Note(s)

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Term Loans

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Verizon

  	
   

  	
   

  	
  §10.1

  	
   

  
	
  Wireless Sale

  	
   

  	
   

  	
  §10.1

  	
   

  

 

x

 

THIRD
AMENDED AND RESTATED CREDIT AGREEMENT

 

This THIRD AMENDED AND RESTATED  CREDIT AGREEMENT
(as amended, supplemented, modified, extended or restated as permitted herein
from time to time, and including all schedules and exhibits hereto, this “Agreement”) is entered into as of September 19,
2008, among SUREWEST COMMUNICATIONS, a
California corporation (“Borrower”),
COBANK, ACB (individually, “CoBank” and, as Administrative Agent, “Administrative Agent”), in its capacity
as Administrative Agent, as Lead Arranger, as Issuing Lender, as Swingline
Lender and as a Lender, and each such other Lender as may from time to time
become a party to this Agreement. 
Capitalized terms used and not otherwise defined herein shall have the
meanings given to them in Subsection 10.1
of this Agreement.

 

R  E
C  I  T  A  L  S:

 

WHEREAS, Borrower and CoBank
previously entered into a Credit Agreement, dated as of May 1, 2006 (the “Original Credit Agreement”), pursuant
to which CoBank extended certain financial accommodations to Borrower
consisting of a revolving loan facility and a term loan facility; and

 

WHEREAS, Borrower
and CoBank entered into an Amended and Restated Credit Agreement, dated as of May 14,
2007 (the “First Amended Credit Agreement”),
pursuant to which Borrower and CoBank amended and restated the Original Credit
Agreement as described therein; and

 

WHEREAS, Borrower,
Administrative Agent, Issuing Lender and the other Lenders referred to therein
entered into a Second Amended and Restated Credit Agreement, dated as of February 13,
2008 (the “Existing Credit Agreement”),
pursuant to which Borrower, Administrative Agent, Issuing Lender and such other
Lenders amended and restated the First Amended Credit Agreement as described
therein; and

 

WHEREAS, Borrower,
Administrative Agent, Issuing Lender and the other Lenders have agreed to amend
and restate the Existing Credit Agreement as described herein, including,
without limitation, to extend the term of the Term Loan B Facility, to modify
the interest rate pricing on all Facilities, to provide for certain scheduled
reductions in the Revolving Loan Commitment and to separate the Revolving Loan
Facility and the Swingline Facility.

 

NOW, THEREFORE, in consideration
of the premises and the agreements, provisions and covenants herein contained,
and for other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties agree, and amend and restate the
Existing Credit Agreement in its entirety, as follows:

 

 

SECTION 1

 

AMOUNTS AND TERMS OF LOANS

 

1.1.                              Loans.  Subject to the terms and conditions of this
Agreement and in reliance upon the representations, warranties and covenants of
Borrower contained herein and in the other Loan Documents:

 

(A)                              Term
Loan A Facility.  Each Lender,
severally and not jointly, previously has lent to Borrower such Lender’s Pro
Rata Share of the Term Loan A Commitment. 
Amounts borrowed under this Subsection 1.1(A) that
are repaid or prepaid may not be reborrowed.

 

(B)                                Term
Loan B Facility.  Each Lender,
severally and not jointly, previously has lent to Borrower such Lender’s Pro
Rata Share of the Term Loan B Commitment (as such Commitment has been reduced
and repaid prior to the Amendment Date). 
Amounts borrowed under this Subsection
1.1(B) that are repaid or prepaid may not be reborrowed.

 

(C)                                Revolving
Loan Facility.  Each Lender,
severally and not jointly, agrees to lend to Borrower, from time to time 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 Share of the Available Revolving Loan Commitment; and provided,
further, that at any one time the aggregate principal amount of all
Revolving Loans outstanding may not exceed the Revolving Loan Commitment less the
outstanding Letter of Credit Liability then outstanding.  Within the limits of the Revolving Loan
Commitment and this Subsection 1.1(C) and
Subsections 1.6, 1.7 and 1.8,
amounts borrowed under this Subsection 1.1(C) may
be prepaid and reborrowed at any time prior to the Revolving Loan Expiration
Date.

 

(D)                               Swingline Loan
Facility.  The
Swingline Lender agrees to lend to Borrower, during the period commencing on
the date all conditions precedent set forth in Subsections 7.1 and 7.2 are
satisfied or waived and ending on the Business Day immediately preceding the
Swingline Loan Expiration Date, Swingline Loans; provided, that the
aggregate principal amount of all Swingline Loans outstanding may not exceed
the Swingline Loan Commitment.  Within
the limits of the Swingline Loan Commitment and this Subsection 1.1(D) and
Subsections 1.6, 1.7
and 1.8, amounts borrowed under
this Subsection 1.1(D) may be
prepaid and reborrowed at any time prior to the Swingline Loan Expiration Date.

 

(E)                                 Letters of
Credit.  The
Revolving Loan Commitment may, in addition to advances as Revolving Loans, be
utilized, upon the request of Borrower, for the issuance of irrevocable letters
of credit (individually, a “Letter of Credit”
and, collectively, the “Letters of Credit”)
by Issuing Lender for the account of Borrower or any of its Subsidiaries.  Immediately upon the issuance by Issuing
Lender of a Letter of Credit, and without further action on the part of
Administrative Agent or any Lender with a Pro Rata Share of the Revolving Loan
Commitment, each such Lender shall be deemed to have purchased from Issuing
Lender a participation in such Letter of Credit equal to such Lender’s Pro Rata
Share of the Revolving Loan Commitment of the 

 

2

 

aggregate amount available to be drawn under
such Letter of Credit.  Each Letter of
Credit shall reduce the amount available under the Revolving Loan Commitment by
the maximum amount capable of being drawn under such Letter of Credit.

 

(1)                                  Maximum
Amount.  The aggregate amount of
Letter of Credit Liability with respect to all Letters of Credit outstanding at
any time for the account of Borrower or any of its Subsidiaries may not exceed
$25,000,000, and the aggregate amount of Letter of Credit Liability with
respect to all Letters of Credit outstanding for the account of Borrower or any
of its Subsidiaries plus the aggregate principal amount of Revolving
Loans outstanding at any time may not exceed the Revolving Loan Commitment.

 

(2)                                  Reimbursement.  Borrower is irrevocably and unconditionally
obligated without presentment, demand, protest or other formalities of any kind
to reimburse Issuing Lender in immediately available funds for any amounts paid
by Issuing Lender with respect to a Letter of Credit issued hereunder for the
account of Borrower or any of its Subsidiaries. 
Borrower hereby authorizes and directs Administrative Agent, at
Administrative Agent’s option, to make a Revolving Loan in the amount of any
payment made by Issuing Lender with respect to any Letter of Credit issued for
the account of Borrower or any of its Subsidiaries.  If the Letter of Credit is payable in a
foreign currency, the amount owed by Borrower in connection with such Letter of
Credit shall equal an amount in United States Dollars equivalent to Issuing
Lender’s actual cost of settling its obligation under such Letter of Credit in
such foreign currency.  All amounts paid
by Issuing Lender with respect to any Letter of Credit that are not immediately
repaid by Borrower or that are not repaid with a Revolving Loan shall bear
interest at the sum of the Base Rate plus the Base Rate Margin
applicable from time to time as provided in Subsection
1.2(B).  Each Lender agrees to
fund its Pro Rata Share of any Revolving Loan made pursuant to this Subsection 1.1(E)(2).  In the event Administrative Agent elects not
to debit Borrower’s account and Borrower fails to reimburse Issuing Lender in
full on the date of any payment in respect of a Letter of Credit issued for the
account of Borrower or any of its Subsidiaries, Administrative Agent shall
promptly notify each Lender the amount of such unreimbursed payment and the
accrued interest thereon and each such Lender, on the next Business Day, shall
deliver to Administrative Agent an amount equal to its Pro Rata Share thereof
in same day funds.  Each Lender hereby
absolutely and unconditionally agrees to pay to Issuing Lender upon demand by
Issuing Lender such Lender’s Pro Rata Share of each payment made by Issuing
Lender in respect of a Letter of Credit and not immediately reimbursed by Borrower.  Each Lender acknowledges and agrees that its
obligations to acquire participations pursuant to this Subsection 1.1(E)(2) in respect of
Letters of Credit and to make the payments to Issuing Lender required by the
preceding sentence are absolute and unconditional and shall not be affected by
any circumstance whatsoever, including, without limitation, the occurrence and
continuance of a Default or an Event of Default or any failure by Borrower to
satisfy any of the conditions set forth in Subsection
7.2.  If any Lender fails to
make available to Issuing Lender the amount of such Lender’s Pro Rata Share of
any payments made by Issuing Lender in respect of a Letter of Credit as
provided in this Subsection 1.1(E)(2),
Issuing Lender shall be entitled to recover such amount on demand from such
Lender together with interest at the Base Rate.

 

(3)                                  Conditions
of Issuance of Letters of Credit.  In
addition to all other terms and conditions set forth in this Agreement, the
issuance by the Issuing Lender of any Letter of Credit shall be subject to the
conditions precedent that the Letter of Credit shall support a transaction 

 

3

 

entered into in the ordinary course of
Borrower’s or any of its Subsidiaries’ businesses, shall be in an amount equal
to or greater than $50,000 and shall be in such form and contain such terms and
conditions as are reasonably satisfactory to the Administrative Agent and the
Issuing Lender.  The expiration date of
each Letter of Credit must be on a date which is the earlier of one year from
its date of issuance or the 30th day before the date set forth in clause (iii) of
the definition of the term Revolving Loan Expiration Date, or such other date
as agreed to by both Administrative Agent and Issuing Lender, in their sole
discretion.

 

(4)                                  Request
for Letters of Credit.  Borrower must
give Administrative Agent and Issuing Lender at least three Business Days’
prior written notice specifying the date a Letter of Credit is requested to be
issued and the amount and the currency in which such Letter of Credit is
payable, identifying the beneficiary and describing the nature of the
transactions proposed to be supported thereby. 
Any notice requesting the issuance of a Letter of Credit shall be
accompanied by the form of the Letter of Credit to be provided by Issuing
Lender.  Borrower must also complete any
application procedures and documents required by Issuing Lender in connection
with the issuance of any Letter of Credit, including a certificate regarding
Borrower’s compliance with the provisions of Subsection
7.2 of this Agreement.

 

(5)                                  Borrower
Obligations Absolute.  The
obligations of Borrower under this Subsection 1.1(E) are
irrevocable, will remain in full force and effect until Issuing Lender and the
Lenders have no further obligations to make any payments or disbursements under
any circumstances with respect to any Letter of Credit, shall be absolute and
unconditional, shall not be subject to counterclaim, setoff or other defense or
any other qualification or exception whatsoever and shall be paid in accordance
with the terms and conditions of this Agreement under all circumstances,
including, without limitation, any of the following circumstances:

 

(a)                                  Any
lack of validity or enforceability of this Agreement, any of the other Loan
Documents or any documents or instruments relating to any Letter of Credit;

 

(b)                                 Any
change in the time, manner or place of payment of, or in any other term of, all
or any of the obligations in respect of any Letter of Credit or any other
amendment, modification or waiver of or any consent to or departure from any
Letter of Credit, any documents or instruments relating thereto, or any Loan
Document in each case whether or not Borrower or its Subsidiaries has notice or
knowledge thereof;

 

(c)                                  The
existence of any claim, setoff, defense or other right that Borrower or its
Subsidiaries may have at any time against a beneficiary named in a Letter of
Credit, any transferee of any Letter of Credit (or any Person for whom any such
transferee may be acting), Administrative Agent, Issuing Lender, any Lender or
any other Person, whether in connection with this Agreement, any other Loan
Document, any Letter of Credit, the transactions contemplated hereby or any
other related or unrelated transaction or transactions (including any
underlying transaction between Borrower or its Subsidiaries and the beneficiary
named in any such Letter of Credit);

 

(d)                                 Any
draft, certificate or any other document presented under any Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any respect or any

 

4

 

statement therein being untrue or inaccurate in any respect, any
errors, omissions, interruptions or delays in transmission or delivery of any
messages, by mail, telecopier or otherwise, or any errors in translation or in
interpretation of technical terms;

 

(e)                                  Payment
under any Letter of Credit against presentation of a demand, draft or
certificate or other document which does not comply with the terms of such
Letter of Credit;

 

(f)                                    Any
defense based upon the failure of any drawing under any Letter of Credit to
conform to the terms of such Letter of Credit (provided that any draft,
certificate or other document presented pursuant to such Letter of Credit
appears on its face to comply with the terms thereof), any nonapplication or
misapplication by the beneficiary or any transferee of the proceeds of such
drawing or any other act or omission of such beneficiary or transferee in
connection with such Letter of Credit;

 

(g)                                 The
exchange, release, surrender or impairment of any collateral or other security
for the obligations;

 

(h)                                 The
occurrence of any Default or Event of Default; or

 

(i)                                     Any
other circumstance or event whatsoever, including, without limitation, any
other circumstance that might otherwise constitute a defense available to, or a
discharge of, Borrower or any Subsidiary.

 

Any action taken
or omitted to be taken by the Issuing Lender under or in connection with any
Letter of Credit, if taken or omitted in the absence of negligence or willful
misconduct, is binding upon Borrower and its Subsidiaries and shall not create
or result in any liability of the Issuing Lender to Borrower or any of its
Subsidiaries.  It is expressly agreed
that, for purposes of determining whether a wrongful payment under a Letter of
Credit resulted from the Issuing Lender’s negligence or willful misconduct,
none of the following shall be deemed to constitute negligence or willful
misconduct by the Issuing Lender: (i)  Issuing Lender’s acceptance of
documents that appear on their face to comply with the terms of such Letter of
Credit, without responsibility for further investigation, (ii)  Issuing
Lender’s exclusive reliance on the documents presented to it under such Letter
of Credit as to any and all matters set forth therein, including the amount of
any draft presented under such Letter of Credit, whether or not the amount due
to the beneficiary thereunder equals the amount of such draft and whether or not
any document presented pursuant to such Letter of Credit proves to be
insufficient in any respect (so long as such document appears on its face to
comply with the terms of such Letter of Credit), and whether or not any other
statement or any other document presented pursuant to such Letter of Credit
proves to be forged or invalid or any statement therein proves to be inaccurate
or untrue in any respect whatsoever, and (iii) any noncompliance in any
immaterial respect of the documents presented under such Letter of Credit with
the terms thereof.

 

(6)                                  Obligations
of Issuing Lender.  Issuing Lender
(if other than Administrative Agent) hereby agrees that it will not issue a
Letter of Credit hereunder until it has provided Administrative Agent with
written notice specifying the amount and intended issuance date of such Letter
of Credit and Administrative Agent has returned a written acknowledgment of
such 

 

5

 

notice to Issuing Lender.  Issuing Lender (if other than Administrative
Agent) further agrees to provide to Administrative Agent:  (i) a copy of each Letter of Credit
issued by Issuing Lender promptly after its issuance; (ii) a monthly
report summarizing available amounts under Letters of Credit issued by Issuing
Lender, the dates and amounts of any draws under such Letters of Credit, the
effective date of any increase or decrease in the face amount of any Letters of
Credit during such month and the amount of any unreimbursed draws under such
Letters of Credit; and (iii) such additional information reasonably
requested by Administrative Agent from time to time with respect to the Letters
of Credit issued by Issuing Lender.

 

(7)                                  ISP.  Unless otherwise expressly agreed by Issuing
Lender and the Borrower when a Letter of Credit is issued, the rules of
the “International Standby Practices 1998” published by the Institute of
International Banking Law & Practice (or such later version thereof as
may be in effect at the time of issuance) (“ISP”) shall apply to each Letter of Credit.

 

(8)                                  Evergreen
Letters of Credit.  If Borrower so
requests in any applicable Letter of Credit application, the Issuing Lender
agrees to issue a Letter of Credit that has automatic renewal provisions (each,
an “Evergreen Letter of Credit”);
provided that any such Evergreen Letter of Credit must permit the Issuing
Lender to prevent any such renewal at least once in each twelve-month period
(commencing with the date of issuance of such Letter of Credit) by giving prior
notice to the beneficiary thereof not later than a day (the “Nonrenewal Notice Date”) in each such
twelve-month period to be agreed upon at the time such Letter of Credit is
issued.  Unless otherwise directed by the
Issuing Lender, Borrower shall not be required to make a specific request to
the Issuing Lender for any such renewal. 
Notwithstanding anything to the contrary contained herein, the Issuing
Lender shall have no obligation to permit the renewal of any Evergreen Letter
of Credit at any time.

 

(F)                                 Notes.  Borrower shall execute and deliver to each
requesting Lender a Revolving Note, a Term Loan A Note, a Term Loan B Note and
a Swingline Note, each dated the Amendment Date, in the principal amount of
such Lender’s Pro Rata Share of the Revolving Loan Commitment, the Term Loan A
Commitment, the Term Loan B Commitment and the Swingline Loan Commitment,
respectively.

 

(G)                                Loans.  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 1.3 and Subsection 1.2
(C)), each Loan shall accrue interest as follows:

 

(1)                                  as
a portion of the Base Rate Loan, at the sum of the Base Rate plus the
Base Rate Margin applicable from time to time as provided in Subsection 1.2(B); or

 

6

 

(2)                                  as
a LIBOR Loan, for the applicable Interest Period, at the sum of LIBOR plus
the LIBOR Margin applicable from time to time as provided in Subsection 1.2(B);

 

provided,
further, that for each Swingline Loan, such Swingline Loan shall accrue
interest at the sum of the 7-Day LIBOR Index Rate applicable from time to time plus
the LIBOR Margin applicable from time to time as provided in Subsection 1.2(B); and provided, further,
that $40,000,000 of the principal amount of the Term Loan A (the “Fixed Rate Loan”) shall be subject
to a fixed rate for the period from and including the Amendment Date through
and including May 31, 2011 (the “Fixed Rate Period”)
of the sum of 6.2860% plus the Fixed Rate Margin applicable from time to
time as provided in Subsection 1.2(B).

 

Except as otherwise provided in
Subsections 1.2(E) and 6.6, interest on all Obligations (other
than the interest payments required pursuant to this Subsection 1.2(A)) not paid when due will accrue interest at
the Base Rate plus 1.50% per annum.

 

(B)                                Applicable
Margins.  Initially, and continuing
through the day immediately preceding the first Adjustment Date that occurs on
or after the date that is six months after the Amendment Date, the applicable
Base Rate Margin, LIBOR Margin and Fixed Rate Margin shall be 1.50%, 2.50% and
0.75% per annum, respectively. 
Commencing on such Adjustment Date, the applicable Base Rate Margin,
LIBOR Margin and Fixed Rate Margin shall be for each Calculation Period the
applicable per annum percentage set forth in the pricing table below opposite
the applicable Leverage Ratio of Borrower; provided, that at the
election of Requisite Lenders, effective upon the occurrence of an Event of
Default pursuant to Subsection 6.1(A) or
Subsection 6.1(C) with
respect to failure to comply with a financial covenant in Section 4 and for so long as it
continues the applicable Base Rate Margin, LIBOR Margin and Fixed Rate Margin
shall be 1.50%, 2.50%, 0.75% per annum, respectively.

 

TERM LOAN A, TERM LOAN B AND REVOLVING LOAN
PRICING TABLE

 

	
  Leverage Ratio

  	
   

  	
  Base Rate

  Margin

  	
   

  	
  LIBOR Margin

  	
   

  	
  Fixed Rate

  Margin

  	
   

  
	
  > 3.00:1

  	
   

  	
  1.50

  	
  %

  	
  2.50

  	
  %

  	
  0.75

  	
  %

  
	
  > 2.00:1 < 3.00:1

  	
   

  	
  1.25

  	
  %

  	
  2.25

  	
  %

  	
  0.50

  	
  %

  
	
  > 1.00:1 < 2.00:1

  	
   

  	
  1.00

  	
  %

  	
  2.00

  	
  %

  	
  0.25

  	
  %

  
	
  < 1.00:1

  	
   

  	
  0.75

  	
  %

  	
  1.75

  	
  %

  	
  0.00

  	
  %

  

 

(C)                                Interest
Periods.  Each LIBOR Loan may be
obtained for a one, two, three, six, nine or 12 month period (each such period
being an “Interest Period”).  With respect to all LIBOR Loans:

 

7

 

(1)                                  the
Interest Period will commence on the date that any LIBOR Loan is made or the
date on which any portion of the Base Rate Loan is converted into a LIBOR Loan,
or, in the case of immediately successive Interest Periods, each successive
Interest Period shall commence on the day on which the immediately preceding
Interest Period expires;

 

(2)                                  if
the Interest Period would otherwise expire on a day that is not a Business Day,
then it will expire on the next Business Day, provided, that if any
Interest Period would otherwise expire on a day that is not a Business Day and
such day is a day of a calendar month after which no further Business Day
occurs in such month, such Interest Period shall expire on the Business Day
next preceding such day;

 

(3)                                  any
Interest Period that begins on the last Business Day of a calendar month or on
a day for which there is no numerically corresponding day in the last calendar
month in such Interest Period shall end on the last Business Day of the last
calendar month in such Interest Period; and

 

(4)                                  no
Interest Period shall be selected for any LIBOR Loan if, in order to make
repayments required pursuant to Subsection
1.6 in connection with scheduled installments on either Term Loan or
scheduled reductions of the Revolving Loan Commitment pursuant to Subsection 1.6, repayment of all or any
portion of a Loan prior to the expiration of such Interest Period would be
necessary.

 

(D)                               Calculation
and Payment.  Interest on all Loans
and all other Obligations and the amount of any fees set forth in Subsection 1.4 shall be calculated on
the basis of a 360-day year for the actual number of days elapsed.  The date of funding or conversion to the Base
Rate Loan or a Swingline Loan and the first day of an Interest Period with respect
to a LIBOR Loan shall be included in the calculation of interest.  The date of payment of any Loan, the last day
of an Interest Period with respect to a LIBOR Loan and the last day of the
Fixed Rate Period shall be excluded from the calculation of interest; provided,
if a Loan is repaid on the same day that it is made, one day’s interest shall
be charged.

 

Interest accruing on each Base Rate Loan and Swingline Loan and on the
Fixed Rate Loan is payable in arrears on each of the following dates or events:
(i) the last day of each calendar quarter, (ii) the prepayment of
such Loan (or portion thereof) and (iii) the Term Loan A Maturity Date,
the Term Loan B Maturity Date, the Revolving Loan Expiration Date or the
Swingline Loan Expiration Date, as applicable, whether by acceleration or
otherwise.  Interest accruing on each
LIBOR Loan is payable in arrears on each of the following dates or events: (i) the
last day of each applicable Interest Period, (ii) if the Interest Period
is longer than three months, on each three-month anniversary of the commencement
date of such Interest Period, (iii) the prepayment of such Loan (or
portion thereof) and (iv) the Term Loan A Maturity Date, the Term Loan B
Maturity Date, the Revolving Loan Expiration Date or the Swingline Loan
Expiration Date, as applicable, whether by acceleration or otherwise.

 

Interest accruing pursuant to Subsection 1.2(E) is
payable on demand.

 

8

 

(E)                                 Default
Rate of Interest.  At the election of
Requisite Lenders, after the occurrence of an Event of Default pursuant to Subsection 6.1(A) or Subsection 6.1(C) with respect to
failure to comply with a financial covenant in Section 4 and for so long as it continues, all Loans and
other Obligations shall bear interest at rates that are 2.00% in excess of the
rates otherwise in effect, including, without limitation, rates in effect
pursuant to the proviso in the second sentence of Subsection 1.2(B), with respect to such Loans and other
Obligations.

 

(F)                                 Excess
Interest.  Notwithstanding anything
to the contrary set forth herein, the aggregate interest, fees and other
amounts required to be paid by Borrower to Lenders or any Lender hereunder are
hereby expressly limited so that in no contingency or event whatsoever, whether
by reason of acceleration of maturity of the Indebtedness evidenced hereby or
otherwise, shall the amount paid or agreed to be paid to Lenders or any Lender
for the use or the forbearance of the Indebtedness or Obligations evidenced
hereby exceed the maximum permissible under Applicable Law.  If under or from any circumstances
whatsoever, fulfillment of any provision hereof or of any of the other Loan
Documents at the time of performance of such provision shall be due, shall
involve exceeding the limit of such as is validity prescribed by Applicable Law
then the obligation to be fulfilled shall automatically be reduced to the limit
of such validity and if under or from any circumstances whatsoever Lenders or
any Lender should ever receive as interest any amount which would exceed the highest
lawful rate, the amount of such interest that is excessive shall be applied to
the reduction of the principal balance of the Obligations evidenced hereby and
not to the payment of interest. 
Additionally, should the method used for calculating interest (i.e.,
using a 360-day year) be unlawful, such calculation method shall be
automatically changed to a 365-6-day year or such other lawful calculation
method as is reasonably acceptable to Administrative Agent.  This provision shall control every other
provision of this Agreement and all provisions of every other Loan Document.

 

(G)                                Selection,
Conversion or Continuation of Loans; LIBOR Availability.  Borrower shall have the option to (i) select
all or any part of a new borrowing to be (a) a portion of the Base Rate
Loan in a principal amount equal to $100,000 or any whole multiple of $5,000 in
excess thereof, (b) a LIBOR Loan in a principal amount equal to $500,000
or any whole multiple of $100,000 in excess thereof or (c) a Swingline
Loan in a principal amount equal to $50,000 or any whole multiple of $5,000 in
excess thereof (except in connection with a borrowing made pursuant to Subsection 1.3(B), in which case no
minimums or multiples shall apply), (ii) convert at any time all or any
portion of the Base Rate Loan or of the Fixed Rate Loan in a principal amount
equal to $500,000 or any whole multiple of $100,000 in excess thereof into a
LIBOR Loan, and (iii) upon the expiration of its Interest Period, continue
any LIBOR Loan in a principal amount equal to $500,000 or any whole multiple of
$100,000 in excess thereof into one or more LIBOR Loans for such new Interest
Period(s) as selected by Borrower. 
During any period in which any Event of Default is continuing, as the
Interest Periods for LIBOR Loans then in effect expire, such Loans shall be
converted into the Base Rate Loan and the LIBOR option will not be available to
Borrower until all Events of Default are cured or waived.  Each LIBOR Loan must be made under a single
Facility.  In the event Borrower fails to
elect a LIBOR Loan upon any advance hereunder or upon the termination of any
Interest Period or of the Fixed Rate Period, Borrower shall be deemed to have
elected to have such amount constitute a portion of the Base Rate Loan.  Notwithstanding the foregoing, there may be
no more than a total of ten LIBOR Loans outstanding under the Facilities at any
one time.

 

9

 

1.3.                              Notice
of Borrowing, Conversion or Continuation of Loans.

 

(A)                              Except
to the extent provided in Subsection 1.3(B),
whenever Borrower desires to request a Loan pursuant to Subsection 1.1 or to convert or
continue Base Rate or LIBOR 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 the Base Rate Loan (or any
portion thereof), not later than 11:00 a.m. (Denver, Colorado time), one
Business Day before the proposed borrowing, conversion or continuation is to be
effective, (ii) if requesting a borrowing of a Swingline Loan, not later
than 2:00 p.m. (Denver, Colorado time) on the date the proposed borrowing
is to be effective or (iii) if requesting a borrowing of, a conversion to
or a continuation of a LIBOR Loan, not later than 11:00 a.m. (Denver,
Colorado time), three Banking Days before the proposed borrowing, conversion or
continuation is to be effective.  Each
Notice of Borrowing/Conversion/Continuation shall specify (a) the Loan (or
portion thereof) to be converted or continued and, with respect to any LIBOR
Loan to be converted or continued, the last day of the current Interest Period
therefore, (b) the effective date of such borrowing, conversion or
continuation (which shall be a Business Day, and in the case of a LIBOR Loan,
also a Banking Day), (c) the principal amount of such Loan to be borrowed,
converted or continued, (d) the Interest Period to be applicable to any
new LIBOR Loan, and (e) the Facility under which such borrowing,
conversion or continuation is to be made. 
Upon satisfaction of the notice requirement set forth in this Subsection 1.3, and the other applicable
conditions set forth in this Agreement, Administrative Agent shall make the
Loan, or requested conversion or continuation, on the requested effective date.

 

(B)                                Swingline
Loans also will be made automatically under the Swingline Loan Facility
(subject to the limitations set forth in Subsection
1.1(D)), (i) on any day that the balance held in the account of
Borrower deposited with Wachovia Bank, National Association [(Acct.# 2079900434077)], or any successor
account designated by CoBank, is less than the amount of items presented for
payment in such account on such date, as provided more fully in the cash
management or similar agreement between CoBank and Borrower and (ii) upon
request telephonic, electronic (CoLink) or other method in each case approved
in advance by CoBank provided such request is made by an employee or
representative of Borrower designated in writing by Borrower as authorized to
make such a request.  The representations
and warranties contained in Section 5
and elsewhere in this Agreement and in the Loan Documents shall be (and each
advance under this Subsection 1.3(B) 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 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 the Administrative
Agent after the Amendment Date so long as what is being disclosed does not give
rise to a Default or an Event of Default. 
It shall be a condition precedent to any advance under this Subsection 1.3(B) that (i) no
event shall have occurred and be continuing or would result from the
consummation of the advance that would constitute an Event of Default or a
Default, (ii) no order, judgment or decree of any court, arbitrator or
Governmental Authority shall purport to enjoin or restrain CoBank from making
the advance, (iii) since December 31, 2007, there shall not have
occurred any event or condition that has had or could reasonably be expected to
have a Material Adverse Effect, and (iv) all Loan Documents shall be in 

 

10

 

full
force and effect.  The requirements of Subsection 7.2 shall not be applicable to
advances under this Subsection 1.3(B).

 

1.4.                              Fees
and Expenses.

 

(A)                              Loan
Commitment Fees.

 

(1)                                  Revolving
Loan Commitment Fee.  From the
Amendment Date through the Revolving Loan Expiration Date, Borrower shall pay
to Administrative Agent, for the benefit of all Lenders that are not Defaulting
Lenders (based upon their respective Pro Rata Shares of the Revolving Loan
Commitment) a fee in an amount equal to (i) the Revolving Loan Commitment less
the sum of (a) the average daily outstanding balance of Revolving Loans plus
(b)  the average daily outstanding Letter of Credit Liability, in each
case during the preceding calendar quarter multiplied  by 0.375%
per annum.  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.

 

(2)                                  Swingline
Loan Commitment Fee.  From the
Amendment Date through the Swingline Loan Expiration Date, Borrower shall pay
to Administrative Agent, for the benefit of the Swingline Lender, if the
Swingline Lender is not a Defaulting Lender, a fee in an amount equal to (i) the
Swingline Loan Commitment less the the average daily outstanding balance
of Swingline Loans during the preceding calendar quarter multiplied  by
0.375% per annum.  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 Swingline
Loan Expiration Date.

 

(B)                                Certain
Other Fees.  Borrower shall pay to
Administrative Agent the fees specified in that certain letter agreement, dated
September 11, 2008, from Administrative Agent to Borrower, in such amounts
and at such times as specified in such letter agreement.

 

(C)                                Breakage
Fee.  Upon any repayment or payment
of a LIBOR Loan or the Fixed Rate Loan on any day that is not the last day of
the Interest Period or the Fixed Rate Period applicable thereto (regardless of
the source of such repayment or prepayment and whether voluntary, mandatory, by
acceleration or otherwise), Borrower shall pay to Administrative Agent, for the
benefit of all affected Lenders, an amount (the “Breakage
Fee”) equal to the greater of (i) $300 or (ii) the sum
of (a) present value of any losses, expenses and liabilities (including
any loss (including interest paid but excluding the loss of any applicable
margin) sustained by each such affected Lender in connection with the good
faith re-employment of such funds) that any such affected Lender may sustain as
a result of the payment of such LIBOR Loan or the Fixed Rate Loan on such day
plus (b) in the case of the Fixed Rate Loan only, a per annum yield of
1⁄2 of 1 percent (0.50%) on the amount of the Fixed Rate Loan for the remaining
Fixed Rate Period.

 

(D)                               Expenses
and Attorneys Fees.  Borrower agrees
to pay promptly all reasonable out-of-pocket fees, costs and expenses
(including those of external attorneys) incurred by Administrative Agent and
Lead Arranger in connection with any matters contemplated by or arising out of
the Loan Documents.  In addition to fees
due under Subsections 1.4(A) and
(B), Borrower shall also reimburse
on demand Administrative Agent for its out-of-pocket expenses (including 

 

11

 

reasonable attorneys’ fees and expenses and
expenses) incurred in connection with the transactions contemplated
herein.  In addition to fees due under Subsections 1.4(A) and (B), Borrower agrees to pay promptly (i) all
reasonable fees, costs and expenses incurred by Administrative Agent in
connection with any amendment, supplement, waiver or modification of any of the
Loan Documents and (ii) all reasonable out-of-pocket fees, costs and
expenses incurred by each of Administrative Agent and Lenders in connection
with any Default or Event of Default and any enforcement of collection proceeding
resulting therefrom or any workout or restructuring of any of the transactions
hereunder or contemplated thereby or any action to enforce any Loan Document or
to collect any payments due from Borrower. 
All fees, costs and expenses for which Borrower is responsible under
this Subsection 1.4(D) shall
be deemed part of the Obligations when incurred, payable upon demand and in
accordance with the second paragraph of Subsection 1.5.

 

(E)                                 Letter
of Credit Fees.  Borrower shall pay
Administrative Agent for the account of all Lenders (other than Defaulting
Lenders) committed to make Revolving Loans (based upon their respective Pro
Rata Shares) an annual fee for each Letter of Credit from the date of issuance
to the date of termination in an amount equal to the applicable LIBOR Margin multiplied
by the face amount of such Letter of Credit.  Such fee shall be payable to Administrative
Agent for the benefit of all Lenders committed to make Revolving Loans (based
upon their respective Pro Rata Shares). 
Such fee is to be paid quarterly in arrears on the last day of each
calendar quarter and upon the termination of the Letter of Credit.  With respect to each Letter of Credit,
Borrower shall also pay Administrative Agent, for the benefit of Issuing Lender
issuing such Letter of Credit an issuance fee equal to 0.125% of the face
amount of such Letter of Credit, which amount shall be paid upon the date of
issuance and, if the expiration date of such Letter of Credit is later than one
year from its date of issuance, upon each anniversary of the date of issuance
during the term of such Letter of Credit.

 

1.5.                              Payments.  All payments by Borrower of the Obligations
shall be made in same day funds and delivered to 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 3070-8875-4

  
	
  Account No. 00039293 (indicate whether a payment
  on Term Loan A Facility, Term Loan B Facility, Swingline Facility or the
  Revolving Loan Facility)

  
	
  Reference: CoBank for the benefit of SureWest
  Communications

  

 

Borrower shall
receive credit on the day of receipt for funds received by Administrative Agent
by 11:00 a.m. (Denver, Colorado time) on any Business Day.  Funds received on any Business Day after such
time shall be deemed to have been paid on the next Business Day.  Whenever any payment to be made hereunder
shall be stated to be due on a day that is not a Business Day, the payment
shall be due on the next succeeding Business Day and such extension of time
shall be included in the computation of the amount of interest and fees due
hereunder.

 

12

 

At any time that funds have been drawn thereunder, Borrower authorizes
Lenders to make (but the Lenders shall not be obligated to make) a Loan
constituting a portion of the Base Rate Loan under the Revolving Loan Facility,
on the basis of their respective Pro Rata Shares of the Revolving Loan
Commitment, for Letter of Credit Liability payments.  Following an Event of Default, Borrower
authorizes Lenders to make (but the Lenders shall not be obligated to make) a
Loan constituting a portion of the Base Rate Loan under the Revolving Loan
Facility for the payment of interest, commitment fees and Breakage Fees.  Prior to an Event of Default, other fees,
costs and expenses (including those of attorneys) reimbursable pursuant to Subsections 1.4(A), 1.4(B), 1.4(D) and 1.4(E) or
elsewhere in any Loan Document may be debited to the Base Rate Loan under the
Revolving Loan Facility after 15 days’ notice. 
After the occurrence of an Event of Default, any such other fees, costs
and expenses may be debited to the Base Rate Loan under the Revolving Loan
Facility without notice.

 

To the extent Borrower makes a payment or payments to Administrative
Agent for the ratable benefit of Lenders or for the benefit of Administrative
Agent in its individual capacity, which payments or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver or any other party under
any bankruptcy law, state or federal law, common law or equitable cause, then,
to the extent of such payment or proceeds repaid, the Obligations or part
thereof intended to be satisfied shall be revived and continued in full force
and effect as if such payment or proceeds had not been received by
Administrative Agent.

 

Each payment received by Administrative Agent under this Agreement or
any Note for the account of any Lender shall be remitted by Administrative
Agent to such Lender promptly after Administrative Agent’s receipt thereof, and
such remittance shall be made in immediately available funds for the account of
such Lender for the Loans or other obligation in respect of which such payment
is made.

 

1.6.                              Repayments
and Reduction of Term Loan Commitments and Revolving Loan Commitment and
Related Mandatory Repayments.

 

(A)                              Scheduled
Repayments and Reductions of Term Loan Commitments, Revolving Loan Commitment
and Swingline Loan Commitment.

 

(1)                                  Term
Loans.  In addition to any
prepayments or repayments made or required pursuant to Subsection 1.7, the outstanding principal
balance of Term Loan A and Term Loan B not sooner due and payable shall become
due and payable on the Term Loan A Maturity Date and Term Loan B Maturity Date,
respectively.

 

(2)                                  Revolving
Loan Commitment.  The Revolving Loan
Commitment shall be permanently reduced in the amount of $7,500,000 on each of December 31,
2009 and on December 31, 2010, in each case, less all voluntary reductions
of the Revolving Loan Commitment pursuant to Subsection
1.6(B) and all
voluntary prepayments and mandatory repayments of the Term Loan Facilities
pursuant to Subsection 1.7 during
the applicable year, and the Revolving Loan Commitment shall be terminated in
full on the Revolving Loan Expiration Date. 
Any outstanding 

 

13

 

principal balance of the Revolving Loans not
sooner due and payable will become due and payable on the Revolving Loan
Expiration Date.

 

(3)                                  Swingline
Loan Commitment.  The Swingline Loan
Commitment shall be permanently reduced and terminated in full on the Swingline
Loan Expiration Date.  Any outstanding
principal balance of the Swingline Loans not sooner due and payable will become
due and payable on the Swingline Loan Expiration Date.

 

(B)                                Voluntary
Reduction of Loan Commitments. 
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 or the Swingline Loan Commitment.  Each reduction shall be in a minimum amount
of at least $1,000,000, or any whole multiple of $250,000 in excess thereof,
and shall be applied as to each Lender based upon its Pro Rata Share.  Notwithstanding the foregoing, no reduction
of the Revolving Loan Commitment shall be permitted if, after giving effect
thereto and to any prepayment made therewith, the aggregate principal balance
of the Revolving Loans and the amount of the Letter of Credit Liability then
outstanding, would exceed the Revolving Loan Commitment, as so reduced.
Notwithstanding the foregoing, no reduction of the Swingline Loan Commitment
shall be permitted if, after giving effect thereto and to any prepayment made
therewith, the aggregate principal balance of the Swingline Loans then
outstanding would exceed the Swingline Loan Commitment, as applicable as so
reduced.

 

(C)                                Mandatory
Repayments.  On the date of any
Revolving Loan Commitment reduction provided for in this Subsection 1.6, Borrower shall repay
Revolving Loans or reduce the Letter of Credit Liability pursuant to Subsection 1.18 in an amount at least
sufficient to reduce the aggregate principal balance of Revolving Loans then
outstanding plus the amount of the Letter of Credit Liability then
outstanding to the amount of the Revolving Loan Commitment as so reduced.  If at any time the aggregate outstanding
amount of Revolving Loans plus the amount of the Letter of Credit
Liability then outstanding exceeds the Revolving Loan Commitment, Borrower
shall repay Revolving Loans or reduce the Letter of Credit Liability pursuant
to Subsection 1.18 in an amount at
least sufficient to reduce the aggregate principal balance of Revolving Loans
then outstanding plus the amount of the Letter of Credit Liability then
outstanding to the amount of the Revolving Loan Commitment, and until such
repayment is made, Lenders shall not be obligated to make any Loans or issue
any Letters of Credit.  If at any time
the aggregate outstanding amount of the Swingline Loans outstanding exceeds the
Swingline Loan Commitment, Borrower shall repay Swingline Loans in an amount at
least sufficient to reduce the aggregate principal balance of Swingline Loans
then outstanding to the amount of the Swingline Loan Commitment, and until such
repayment is made, Lenders, including the Swingline Line Lender, shall not be
obligated to make any Loans, including the Swingline Loans.  Any repayments pursuant to this Subsection 1.6(C) shall be applied in
accordance with Subsection 1.8,
and shall be accompanied by accrued interest on the amount repaid and any
applicable Breakage Fees.

 

1.7.                              Voluntary
Prepayments and Other Mandatory Repayments.

 

(A)                              Voluntary
Prepayment of Loans.  Subject to the
provisions of Subsection 1.8, at
any time, Borrower may prepay any Base Rate Loan and any Swingline Loan, in
whole or in part, without penalty. 
Subject to the provisions of Subsection 1.8,
payment of applicable Breakage Fees 

 

14

 

and the notice requirement in the following
sentence, at any time Borrower may prepay any LIBOR Loan or the Fixed Rate
Loan, in whole or in part.  Notice of any
prepayment of a LIBOR Loan or of the Fixed Rate Loan shall be given not later
than 11:00 a.m. (Denver, Colorado time) on the third Business Day
preceding the date of prepayment.  All
prepayment notices shall be irrevocable. 
All prepayments shall be accompanied by accrued interest on the amount
prepaid and any applicable Breakage Fees.

 

(B)                                Repayments
from Insurance Proceeds.  Borrower
shall repay the Term Loans in an amount equal to the Net Proceeds received by
Borrower or any of its Subsidiaries which are insurance proceeds from any Asset
Disposition to the extent that such proceeds are not reinvested in equipment or
other assets that are used or useful in the business of Borrower or any of its
Subsidiaries within 180 days of receipt by Borrower or such Subsidiary of such
proceeds.  All such repayments shall be
applied in accordance with Subsection 1.8.  All such repayments shall be accompanied by
accrued interest on the amount repaid and any applicable Breakage Fees.

 

(C)                                Repayments
from Asset Dispositions.  Promptly
upon receipt by Borrower or any of its Subsidiaries of Net Proceeds of an Asset
Disposition, other than insurance proceeds reinvested pursuant to Subsection 1.7(B) or Net Proceeds of
Asset Dispositions permitted pursuant to Subsection
3.6, without the consent of Administrative Agent (unless pursuant to
Subsection 3.6(vi) Borrower
is required to apply such proceeds to the repayment of the Term Loans pursuant
to this Subsection 1.7(C)),
Borrower shall repay the Term Loans in an amount equal to the Net Proceeds
received by Borrower or any of its Subsidiaries.  All such repayments shall be applied in
accordance with Subsection 1.8.  All such repayments shall be accompanied by
accrued interest on the amount repaid and any applicable Breakage Fees.

 

1.8.                              Application
of Prepayments and Repayments; Payment of Breakage Fees, Etc.  All prepayments and repayments made pursuant
to Subsection 1.7 with respect to
the Term Loans shall applied pro rata to the Term Loans.  All other prepayments and repayments made
pursuant to Subsections 1.6 and 1.7 shall be applied as directed in
writing by Borrower (in the absence of such direction, such prepayments and
repayments shall first be applied to the Swingline Loan Facility until paid in
full, then to the Revolving Loan Facility until paid in full, and then to the
Term Loan Facilities on a pro rata basis). 
All prepayment and repayments made pursuant to Subsections 1.6 and 1.7 shall first be applied to such of the
applicable type of Loans of a Facility as Borrower shall direct in writing and,
in the absence of such direction, shall first be applied to the Base Rate Loan
and then to such LIBOR Loans or the Fixed Rate Loan as Borrower and CoBank
shall agree (in the absence of agreement, such prepayments and repayments shall
be applied to the LIBOR Loans and the Fixed Rate Loan on which the lowest
amount of Breakage Fees would be due).

 

1.9.                              Loan
Accounts.  Administrative Agent will
maintain loan account records for (i) all Loans, interest charges and
payments thereof, (ii) all Letter of Credit Liability, (iii) the
charging and payment of all fees, costs and expenses and (iv) all other
debits and credits pursuant to this Agreement. Absent manifest error, the
balance in the loan accounts shall be presumptive evidence of the amounts due
and owing to 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 

 

15

 

payments and Borrower hereby irrevocably
agrees that Administrative Agent shall have the continuing exclusive right to
apply and reapply payments in any manner it deems appropriate.

 

1.10.                        Changes
in LIBOR Rate Availability.  If with
respect to any proposed Interest Period, Administrative Agent or any Lender
(after consultation with Administrative Agent) determines that deposits in
dollars (in the applicable amount) are not being offered in the relevant market
for such Interest Period, or Lenders having a Pro Rata Share of more than 50%
under a Facility determine (and notify Administrative Agent) that the LIBOR
Rate applicable pursuant to Subsection 1.2(A) for
any requested Interest Period with respect to a proposed LIBOR Loan under such
Facility does not adequately and fairly reflect the cost to such Lenders of
funding such Loan, Administrative Agent shall forthwith give notice thereof to
Borrower and Lenders, whereupon and until such affected Lender or Lenders
notifies Administrative Agent, and Administrative Agent notifies Borrower and
the other Lenders 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 and such affected Lender shall make
its Pro Rata Share of such type of LIBOR Loans as a Base Rate Loan or such
other type of Loan as permitted by Administrative Agent.  Any Lender may, in its sole discretion, waive
the benefits and provisions of this Subsection with respect to any proposed
Interest Period.

 

If the introduction of, or any change in, any Applicable Law or treaty
or any change in the interpretation or administration thereof by any Governmental
Authority, central bank, quasi-governmental entity 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, quasi-governmental agency or
comparable agency (collectively, a “Change of Law”),
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 notice thereof to Borrower and all other Lenders.  Thereafter, until such Lender or Lenders
notifies Administrative Agent, and Administrative Agent notifies Borrower and
the other Lenders that such circumstances no longer exist, (i) the
obligations of such Lender or Lenders to make LIBOR Loans and the right of
Borrower to convert any Loan of such Lender or Lenders to a LIBOR Loan or
continue any Loan of such Lender or Lenders as a LIBOR Loan shall be suspended
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, such Lender’s
Loan shall immediately be converted to the Base Rate Loan.

 

1.11.                        Capital
Adequacy and Other Adjustments.

 

(A)                              If
any Change of Law would increase the reserve requirement or otherwise increase
the cost to Administrative Agent 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. 
Administrative Agent may seek recovery of such additional amounts from
Borrower only to the extent it seeks recovery for such amounts from similarly
situated borrowers.  Borrower shall pay
the amount of such increased cost to Administrative Agent for the benefit of
the affected Lenders within 15 days after receipt of such certificate.  Such certificate shall, absent manifest
error, be final, conclusive and binding for all purposes.  There is no limitation on the number of times
such a certificate may be submitted.

 

16

 

(B)                                In
the event that any Lender shall have determined that any Change of Law
regarding capital adequacy, reserve requirements or similar requirements or
compliance by any Lender or any entity 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 entity controlling such Lender and thereby reducing the rate
of return on such Lender’s or such entity’s capital as a consequence of its
obligations hereunder, then Borrower shall from time to time within 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 Lender may seek
recovery of such additional amounts from Borrower only to the extent it seeks
recovery for such amounts from similarly situated borrowers.  A certificate as to the amount of such cost
and showing the basis of the computation of such cost submitted by such Lender
to Borrower and Administrative Agent shall, absent manifest error, be final,
conclusive and binding for all purposes. 
There shall be no limitation on the number of times such a certificate
may be submitted.

 

(C)                                Notwithstanding
any other provision of this Agreement, Borrower shall not be obligated to pay
any increased costs suffered or incurred by a Lender under this Subsection 1.11 more than 180 days prior to the date that
such Lender obtained knowledge of the circumstances giving rise to such
increased costs.  Any Lender which
becomes aware of (i) any Change of Law that will make it unlawful or
impossible for such Lender to make or maintain any LIBOR Loan or (ii) any
Change of Law or other event or condition that will obligate Borrower to pay
any amount pursuant to this Subsection 1.11
shall notify Borrower and Administrative Agent thereof as promptly as
practical.  If any Lender has given
notice of any such Change of Law or other event or condition and thereafter
becomes aware that such Change of Law or other event or condition has ceased to
exist, such Lender shall notify Borrower and Administrative Agent thereof as
promptly as practical.  Each Lender
affected by any Change of Law which makes it unlawful or impossible for such
Lender to make or maintain any LIBOR Loan or to which Borrower is obligated to
pay any amount pursuant to this Subsection 1.11
shall use reasonable commercial efforts (including changing the jurisdiction of
its applicable lending office) to avoid the effect of such Change of Law or to
avoid or materially reduce any amounts which Borrower is obligated to pay
pursuant to this Subsection 1.11 if, in the
reasonable opinion of such Lender, such efforts would not be disadvantageous to
such Lender or contrary to such Lender’s normal lending practices.

 

1.12.                        Optional
Prepayment/Replacement of Lender in Respect of Increased Costs.  If (a) any Lender shall become a
Defaulting Lender at any time, (b) any Lender shall suspend its obligation
to make or maintain LIBOR Loans pursuant to Subsection
1.11 for a reason which is not applicable to any other Lender, or (c) any
Lender shall demand any payment under Subsection
1.11, 1.13 or 1.14 for a reason which is not applicable
to any other Lender, then, unless such Lender (an “Affected Lender”) has theretofore taken
steps to remove or cure, and has removed or cured, the conditions creating the
cause for such obligation to pay such additional amounts or for such illegality
or impossibility, Borrower may, at its option, notify Administrative Agent and
such Affected Lender of its intention to do the following:  Borrower may obtain, at Borrower’s expense, a
replacement Lender 

 

17

 

(“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 180 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 at a price of par plus accrued interest
and other amounts due to such Affected 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.

 

1.13.                        Taxes:
No Deductions.

 

(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, provided,
however, that Borrower shall not be required to make any additional
payment pursuant to this Subsection 1.13 for
or on account of  (all of the following
in clauses (i) and (ii), “Excluded
Taxes”) (i) taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto (a) which are
payable other than by withholding from payments or reimbursements made
hereunder or under the Notes, (b) which are imposed on the payments to, or
revenues, income or net income of, a Lender by its jurisdiction of
incorporation or by the federal, state, local or foreign taxing authorities in
the jurisdiction in which the principal place of business of such Lender is
located or in which such Lender has or had a connection (other than a connection arising solely as a result of
such Lender having executed, delivered or performed its obligations or received
a payment under, or enforced, this Agreement or any other Loan Document), or by
any jurisdiction or taxing authority thereof or therein or (c) which would
not have been imposed but for the failure of the Lender to comply with
certification, information or other reporting requirements concerning the
nationality, residence, identity or connection with the United States of the
Lender if such compliance is necessary by statute or by regulation of the United
States Treasury Department as a precondition to relief or exemption from such taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, or (ii) in the case of a Lender that is organized
under the laws of a jurisdiction other than the United States (a “Foreign Lender”), any withholding tax
that is imposed on amounts payable to such Foreign Lender at the time such
Foreign Lender becomes a party hereto (or designates a new lending office),
except to the extent that such Foreign Lender (or its assignor, if any) was
entitled, at the time of designation of a new lending office (or assignment),
to receive additional amounts from the Borrower with respect to such
withholding tax pursuant to this Subsection
1.13 (all such non-excluded taxes, levies, imposts, deductions or
withholdings, and all liabilities with respect thereto, collectively, “Tax Liabilities”).  If Borrower shall be required by law to
deduct any Tax Liabilities from or in respect of any sum payable hereunder to
any Lender, then the sum payable hereunder shall be increased as may be
necessary so that, after making all required deductions, such Lender receives
an amount equal to the sum it would have received had no such deductions been
made.

 

(B)                                Foreign
Lenders.  Each Foreign Lender as to
which payments made under this Agreement or under the Notes are exempt from
withholding tax under the IRC or other applicable tax law or are subject to
withholding tax at a reduced rate under an applicable statute or tax treaty
shall provide to Borrower and Administrative Agent a properly completed and
executed United States Internal Revenue Service Form W-8ECI or W-8BEN or
other applicable form, certificate or document prescribed by the Internal
Revenue Service of the United States or other taxing authority 

 

18

 

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 (a “Certificate of Exemption”).
 Prior to becoming a Lender under this Agreement and within 15 days after
a reasonable written request of Borrower or Administrative Agent from time to
time thereafter, each Foreign Lender that becomes a Lender under this Agreement
shall provide a Certificate of Exemption to Borrower and Administrative
Agent.  In addition, any Lender, if
requested by the Borrower or the Administrative Agent, shall deliver a properly
completed United States Internal Revenue Service Form W-9 or other
applicable form as will enable the Borrower or the Administrative Agent to
determine whether or not such Lender is subject to backup withholding or
information reporting requirements.

 

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 from subsequent
payments 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:

 

(a)                                  does
or shall subject any Lender to any tax of any kind whatsoever with respect to
this Agreement, the other Loan Documents or any Loans made or any Letters of
Credit issued hereunder, or change the basis of taxation of payments to such
Lender of principal, fees, interest or any other amount payable hereunder
(except Tax Liabilities covered by Subsection
1.13 and the imposition or, or any change in the rate of, any
Excluded Tax payable by such Lender); or

 

(b)                                 does
or shall impose on any Lender any other condition or increased cost in
connection with the transactions contemplated hereby;

 

and the result of any of the foregoing is to
increase the cost to such Lender of making or continuing any Loan or of issuing
any Letters of Credit hereunder, or to reduce any amount receivable hereunder,
then, in any such case, Borrower shall promptly pay to Administrative Agent
(for the account of such Lender), upon its demand, any additional amounts
necessary to compensate such Lender, on an after-tax basis, for such additional
cost or reduced amount receivable, as determined by such Lender with respect to
this Agreement or the other Loan Documents. If any Lender becomes entitled to
claim any additional amounts pursuant to this Subsection
1.14, it shall promptly notify Borrower (through Administrative
Agent) of the event by reason of which such Lender has become so entitled.  A certificate as to any additional amounts
payable pursuant to the foregoing sentence 

 

19

 

submitted by a Lender to Borrower shall,
absent manifest error, be final, conclusive and binding for all purposes.  There is no limitation on the number of times
such a certificate may be submitted.

 

1.15.                        Treatment
of Certain Refunds.  If
Administrative Agent, a Lender or an Issuing Lender determines, in its sole
discretion, that it has received a refund of any Taxes as to which it has been
indemnified by Borrower or with respect to which Borrower has paid additional
amounts pursuant to Subsection 1.13
or 1.14, it shall pay to Borrower
an amount equal to such refund (but only to the extent of indemnity payments
made, or additional amounts paid, by Borrower under Subsection 1.13 or 1.14
with respect to the Taxes giving rise to such refund), net of all out-of-pocket
expenses of the Administrative Agent, such Lender or such Issuing Lender, as
the case may be, and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund), provided that
Borrower, upon the request of Administrative Agent, such Lender or such Issuing
Lender, agrees to repay the amount paid over to Borrower (plus any penalties,
interest or other charges imposed by the relevant Governmental Authority) to
Administrative Agent, such Lender or such Issuing Lender in the event the
Administrative Agent, such Lender or such Issuing Lender is required to repay
such refund to such Governmental Authority. 
This Subsection 1.15 shall
not be construed to require Administrative Agent, any Lender or any Issuing
Lender to make available its tax returns (or any other information relating to
its taxes that it deems confidential) to Borrower or any other Person.

 

1.16.                        Mitigation
Obligations.  If any Lender requires
Borrower to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Subsection 1.13 or 1.14,
then such Lender shall use reasonable efforts to designate a different lending
office for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in
the judgment of such Lender, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to Subsection 1.13 or 1.14,
as the case may be, in the future and (ii) would not subject such Lender
to any unreimbursed cost or expense and would not otherwise be disadvantageous
to such Lender.  Borrower hereby agrees
to pay all reasonable costs and expenses incurred by any Lender in connection
with any such designation or assignment.

 

1.17.                        Term of
This Agreement.  All of the
Obligations shall become due and payable as otherwise set forth herein, but in
any event, all of the remaining Obligations shall become due and payable on the
Term Loan A Maturity Date.  Until all
Obligations have been indefeasibly and irrevocably paid and satisfied in full,
all Letters of Credit have been terminated and each of the Loan Commitments has
been terminated, this Agreement shall remain in full force and effect.

 

1.18.                        Letter
of Credit Liability.  Upon the
occurrence and during the continuance of an Event of Default, and in the event
any Letters of Credit are outstanding at the time that Borrower terminates the
Revolving Loan Commitment, then (a) with respect to each such Letter of
Credit, Borrower shall either (i) deliver to Administrative Agent for the
benefit of all Lenders with a Revolving Loan Commitment a letter of credit in
the same currency that such Letter of Credit is payable, with a term that
extends 60 days beyond the expiration date of such Letter of Credit, issued by
a bank satisfactory to Administrative Agent and in an amount equal to 105% of
the aggregate outstanding Letter of Credit Liability with respect to such
Letter of Credit, which letter of credit shall be drawable by Administrative
Agent to reimburse payments of drafts drawn under such Letter of 

 

20

 

Credit and to pay any fees and expenses
related thereto or (ii) immediately deposit with Administrative Agent an
amount equal to the aggregate outstanding Letter of Credit Liability to enable
Administrative Agent to make payments under the Letters of Credit when required
and such amount shall become immediately due and payable, and (b) Borrower
shall prepay the fees payable under
Subsection 1.4(E) with respect to all such Letters of Credit
for the full remaining terms of such Letters of Credit.  Upon termination of any such Letter of
Credit, the unearned portion of such prepaid fee attributable to such Letter of
Credit shall be refunded to Borrower.

 

SECTION 2

 

AFFIRMATIVE COVENANTS

 

Borrower covenants and agrees that so long as the Loan Commitments remain
in effect, or any Letter of Credit, any Loan, any interest on any Loan or any
fee payable to Administrative Agent or any Lender hereunder remains
outstanding, or any other amount then due and payable is owing to
Administrative Agent or any Lender hereunder, and unless the 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 Applicable Laws the noncompliance with which
could not reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect, (ii) obtain and maintain and will
cause its 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 and (iii) comply with and will cause its
Subsidiaries to comply with all Material Contracts, other than, in all such
cases, as would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.  This Subsection 2.1 shall not preclude
Borrower or any of its Subsidiaries from contesting any taxes or other
payments, if they are being diligently contested in good faith and if adequate
reserves therefor are maintained in conformity with GAAP.

 

2.2.                              Maintenance
of Books and Records; Properties; Insurance.  Borrower will keep and will cause each of its
Subsidiaries to keep adequate records and books of account, in which full, true
and correct entries will be made in accordance with GAAP consistently applied,
reflecting all financial transactions of such Persons.  Borrower will maintain or cause to be
maintained and will cause each of its Subsidiaries to maintain or cause to be
maintained in good repair, working order and condition all material property
used in its business and the business of its Subsidiaries, and will make or
cause to be made all appropriate repairs, renewals and replacements
thereof.  Borrower will and will cause
each of its Subsidiaries to maintain complete, accurate and up-to-date books,
records, 

 

21

 

accounts and other information relating to
all property in such form and in such detail as may be reasonably satisfactory
to Administrative Agent.  Borrower will
maintain or cause to be maintained and will cause each of its Subsidiaries to
maintain or cause to be maintained, with financially sound and reputable
insurers, commercial general liability, property loss and damage, business
interruption and workers’ compensation insurance with respect to its business
and properties and the business and properties of its Subsidiaries against loss
and damage of the kinds customarily carried or maintained by corporations of
established reputation engaged in similar industries, which may include
self-insurance, if determined by Borrower to be reasonably prudent, and will
deliver evidence thereof to Administrative Agent on or prior to the Closing
Date, and thereafter at least 30 days prior to any expiration thereof, evidence
of renewal of such insurance.  All
property loss and damage insurance shall be on an all risk basis and shall
insure property for the full replacement cost thereof.

 

Administrative Agent shall be entitled, upon reasonable advance notice,
to review and/or receive copies of, the insurance policies of Borrower and its
Subsidiaries carried and maintained with respect to Borrower’s obligations
under this Subsection 2.2.  Notwithstanding anything to the contrary
herein, no provision of this Subsection 2.2
or any provision of this Agreement shall impose on Administrative Agent and
Lenders any duty or obligation to verify the existence or adequacy of the
insurance coverage maintained by Borrower and its Subsidiaries, nor shall
Administrative Agent and Lenders be responsible for any representations or
warranties made by or on behalf of Borrower and its Subsidiaries to any
insurance broker, company or underwriter. 
Administrative Agent, at its sole option, may obtain such insurance if
not provided by Borrower and in such event, Borrower shall reimburse
Administrative Agent upon demand for the cost thereof.

 

2.3.                              Inspection.  Borrower will and will cause its Subsidiaries
to permit any authorized representatives of Administrative Agent (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, all upon at
least five days notice, at such reasonable times during normal business hours
and, unless a Default or Event of Default has occurred and is continuing, not
more than twice a year.

 

2.4.                              Legal
Existence, Etc.  Except as otherwise
permitted by Subsection 3.5,
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 and
will cause its Subsidiaries to use the proceeds of the Loans solely for the
purposes described in the recital paragraphs to the Original Credit Agreement,
the First Amended Credit Agreement and the Existing Credit Agreement.  No part of any Loan will be used to purchase
any margin securities or otherwise in violation of the regulations of the
Federal Reserve System.

 

2.6.                              Further
Assurances.  Borrower will, and will
cause each of its Subsidiaries to, from time to time, do, execute and deliver
all such additional and further acts, documents and instruments as
Administrative Agent reasonably requests to consummate the transactions
contemplated hereby and to vest completely in and assure Administrative Agent
of its rights under this Agreement and the other Loan Documents.

 

22

 

2.7.                              CoBank
Patronage Capital.  Borrower will
acquire non-voting participation certificates in CoBank in such amounts and at
such times as CoBank may require in accordance with CoBank’s Bylaws and Capital
Plan (as each may be amended from time to time), except that the maximum amount
of participation certificates that Borrower may be required to purchase in
CoBank in connection with the Loans may not exceed the maximum amount permitted
by the Bylaws at the time this Agreement is entered into.  The rights and obligations of the parties
with respect to such participation certificates and any distributions made on
account thereof or on account of Borrower’s patronage with CoBank shall be
governed by CoBank’s Bylaws.  Borrower
hereby consents and agrees that the amount of any distributions with respect to
its patronage with CoBank that are made in qualified written notices of
allocation (as defined in 26 U.S.C. § 1388) and that are received by Borrower
from CoBank, will be taken into account by Borrower at the stated dollar
amounts whether the distribution is evidenced by a participation certificate or
other form of written notice that such distribution has been made and recorded
in the name of Borrower on the records of CoBank.  The Obligations shall be secured by a
statutory first lien on all equity which Borrower may now own or hereafter
acquire in CoBank.

 

2.8.                             Investment
Company Act.  Neither Borrower nor
any of its Subsidiaries shall be or become an “investment company” as that term
is defined in and is not otherwise subject to regulation under, the Investment
Company Act of 1940, as amended.

 

2.9.                              Payment
of Obligations.  Unless contested in
good faith by appropriate proceedings and then only to the extent reserves
required by GAAP have been set aside therefore, Borrower will, and will cause
each of its Subsidiaries to, (i) pay, discharge or otherwise satisfy at or
before maturity all liabilities and obligations as and when due (subject to any
applicable subordination provisions), and any additional costs that are imposed
as a result of any failure to so pay, discharge or otherwise satisfy such
obligations, except to the extent failure to do so would not be reasonably
likely to have a Material Adverse Effect, and (ii) pay and discharge all
taxes, assessments, claims and governmental charges or levies imposed upon it,
upon its income or profits or upon any of its properties, prior to the date on
which penalties would attach thereto or a lien would attach to any of the
properties of Borrower if unpaid unless the same are being contested in good
faith and by appropriate proceedings and then only if and to the extent
reserves required by GAAP have been set aside therefor.

 

2.10.                        Environmental
Laws.  Borrower will, and will at all
times cause each of its Subsidiaries to:

 

(A)                              Comply
in all material respects with, and ensure compliance in all material respects
by all its tenants and subtenants, if any, with, all applicable Environmental
Laws and obtain and comply in all material respects with and maintain, and
ensure that all its tenants and subtenants obtain and comply in all material
respects with and maintain, any and all licenses, approvals, notifications,
registrations or permits required by applicable Environmental Laws except to
the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect;

 

(B)                                Conduct
and complete all investigations, studies, sampling and testing, and all
remedial, removal and other actions required under Environmental Laws and
promptly comply in all material respects with all lawful orders and directives
of all Governmental Authorities regarding Environmental Laws except to the
extent that the same are being contested in good faith by 

 

23

 

appropriate proceedings and the pendency of
such proceedings could not reasonably be expected to have a Material Adverse
Effect.

 

(C)                                Defend,
indemnify and hold harmless Administrative Agent and Lenders, and their
Affiliates and their and their Affiliates’ respective employees, agents,
officers and directors, from and against any and all claims, demands,
penalties, fines, liabilities, settlements, damages, costs and expenses of
whatever kind or nature known or unknown, contingent or otherwise, arising out
of, or in any way relating to the violation of, noncompliance with or liability
under, any Environmental Law applicable to the operations of Borrower or any of
its Subsidiaries or their respective properties, or any orders, requirements or
demands of Governmental Authorities related thereto, including, without
limitation, reasonable attorney’s and consultant’s fees, investigation and
laboratory fees, response costs, court costs and litigation expenses, except to
the extent that any of the foregoing is determined by a final judgment of a
court of competent jurisdiction or pursuant to arbitration as set forth herein
to have resulted from the gross negligence or willful misconduct of the party
seeking indemnification therefor.  The
agreements in this Subsection 2.10
shall survive repayment of the Obligations and the termination of this
Agreement.

 

2.11.                        ERISA
Compliance.  With respect to any Plan
that is intended to qualify under Section 401(a) of the IRC, Borrower
will apply for and obtain a favorable determination letter within the period
required by Applicable Law.

 

SECTION 3

 

NEGATIVE COVENANTS

 

Borrower covenants and
agrees that so long as the Loan Commitments remain in effect, or any Letter of
Credit, any Loan, any interest on any Loan or any fee payable to Administrative
Agent or any Lender hereunder remains outstanding, or any other amount then due
and payable is owing to Administrative Agent or any Lender hereunder, and
unless Requisite Lenders (or (x) such other number of Lenders as is
required by Subsection 9.2 or (y) Administrative
Agent if expressly set forth in this Section 3)
shall otherwise give their prior written consent, Borrower shall, 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)                                Acquired
Indebtedness if after giving effect to the incurrence the Acquired
Indebtedness, Borrower, on a combined and consolidated basis with its
Subsidiaries as set forth in Section 4,
are in compliance on a pro forma basis with the covenants set forth in Section 4 recomputed for the most recently ended fiscal
quarter for which information is available;

 

24

 

(C)                                Indebtedness
issued or incurred by any of Borrower’s Subsidiaries if after giving effect
thereto and the application of proceeds therefrom, the aggregate of all
Priority Debt incurred after December 8, 1998 would not exceed 10% of
Consolidated Net Assets as of the most recently completed fiscal quarter of
Borrower;

 

(D)                               secured
Indebtedness issued by Borrower secured by a Lien described in clause (9) of
the definition of Permitted Encumbrances;

 

(E)                                 Other
unsecured Indebtedness issued by Borrower, provided, that no Default or
Event of Default exists at the time of or will result in the succeeding 12
months after such issuance, including under Subsections
4.1 and 4.2, taking
such additional Indebtedness (and a reasonable estimate of its related interest
expense into account);

 

(F)                                 Indebtedness
incurred in connection with any Related Interest Rate Agreement; and

 

(G)                                Indebtedness
under purchase money security agreements and Capital Leases not to exceed
$40,000,000 in the aggregate principal at any one time.

 

3.2.                              Liens
and Related Matters..  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.

 

3.3.                              Investments.  Borrower will not make or own and will not
permit its Subsidiaries to make or own any Investment in any Person that is
prohibited by its investment policy as then in effect, except equities in
Administrative Agent, as set forth in Subsection
2.7, Permitted Acquisitions and Investments acquired in connection
with Permitted Acquisitions.

 

3.4.                              Restricted
Junior Payments.  Borrower will not
directly or indirectly declare, order, pay, make or set apart any sum for any
Restricted Junior Payment; provided, however, that so long as no
Default or Event of Default exists before or will result in the succeeding 12
months after such distributions and repurchases, based upon Borrower’s Budget
delivered to Administrative Agent pursuant to Subsection
4.4(D), Borrower may (i) declare or pay lawful distributions to
its shareholders and (ii) repurchase its issued and outstanding stock so
long as the aggregate amount of such distributions and repurchases does not
exceed (A) during the fiscal year ending December 31, 2008,
$25,000,000 and (B) during each fiscal year thereafter, the higher of
$25,000,000 or 100% of the net income of the immediately preceding fiscal year;
provided, further, however, that Borrower may satisfy on a
non-cash basis the exercise of any stock option or similar award under a
stock-based compensation plan.

 

3.5.                              Restriction
on Fundamental Changes.  Borrower
will not and will not permit its Subsidiaries directly or indirectly to:  (i) unless and only to the extent
required by law, amend, modify or waive any term or provision of its articles
of organization, partnership agreement, operating agreement, management
agreements, articles of incorporation or certificates of 

 

25

 

designations pertaining to preferred stock or
by-laws without the consent of Administrative Agent (which consent shall not be
unreasonably withheld), other than an amendment, modification or waiver that is
solely ministerial or administrative in nature or the reincorporation of
Borrower in the State of Delaware; provided, however, Borrower
shall promptly give Administrative Agent notice of any such amendment,
modification or waiver; (ii) enter into any transaction of merger or
consolidation or acquire by purchase or otherwise all or any substantial part
of the business or assets of any other Person, except (each of the following, a
“Permitted Acquisition”) (a) any
Subsidiary of Borrower may be merged with or into Borrower or any wholly owned
Subsidiary of Borrower provided that Borrower or such wholly owned
Subsidiary of Borrower is the surviving entity, and (b) Borrower or its
Subsidiaries may consolidate or merge with or into any other Person or acquire
by purchase or otherwise all or any substantial part of the business or assets
of any other Person, provided that no Default or Event of Default then
exists or would result from such transaction, Borrower or such Subsidiary is
the surviving or continuing entity and the consideration for each such
transaction provided by Borrower (whether in the form of stock, cash or other
consideration) does not exceed $100,000,000 and such consideration for all such
transactions under this subclause (b) after the Amendment Date does not in
the aggregate exceed $200,000,000; or (iii) liquidate, wind-up or dissolve
itself (or suffer any liquidation or dissolution).

 

3.6.                              Disposal
of Assets or Subsidiary Stock. 
Borrower will not, and will not permit any of its Subsidiaries to,
directly or indirectly, convey, sell (including, without limitation, pursuant
to a sale and leaseback transaction), lease (including, without limitation,
pursuant to a lease and leaseback transaction), sublease, transfer or otherwise
dispose of, or grant any Person an option to acquire, in one transaction or a
series of transactions, any of its property, business or assets, or the capital
stock of or other equity interests in any of its Subsidiaries, except for (i) bona
fide sales or leases of inventory to customers in the ordinary course of business,
dispositions of equipment not used or useful in the business or otherwise
obsolete and any sale, conveyance, lease, sublease, transfer or other
disposition of assets of any of Borrower or its Subsidiaries to Borrower or any
wholly owned Subsidiary; (ii) fair market value sales of Cash Equivalents
or other Investments permitted by Subsection
3.3; (iii) leasing or subleasing of its property in the
ordinary course of business; (iv) other Asset Dispositions if all of the
following conditions are met: (a) the aggregate book value of such assets
sold in any one transaction or series of related transactions (excluding the
Wireless Sale) for any 12-month period does not exceed 20% of Consolidated Net
Assets determined as of the end of the immediately preceding fiscal year in the
aggregate for Borrower and its Subsidiaries, (b) the consideration
received by Borrower or such Subsidiary is at least equal to the fair market
value of such assets, (c) the sole consideration received is cash or other
assets (other than a note or other delayed payment transaction), (d) after
giving effect to the Asset Disposition, Borrower, on a combined and
consolidated basis with its Subsidiaries as set forth in Section 4, are in compliance on a pro
forma basis with the covenants set forth in Section 4
recomputed for the most recently ended fiscal quarter for which information is
available and Borrower is in compliance with all other terms and conditions
contained in this Agreement, and (e) no Default or Event of Default then
exists or would result from the Asset Disposition; (v) the sale by Borrower or any Subsidiary of
property and the subsequent lease, as lessee, of the same property, within 180
days following the acquisition or construction of such property, in an
aggregate amount not to exceed $25,000,000; and (vi) an Asset Disposition
if (a) the aggregate Net Proceeds of such assets disposed of under
this clause (vii) does not exceed $100,000,000 from and after the
Amendment Date, (b) the
consideration 

 

26

 

received is at least equal to the fair market value of such assets, (c) the
sole consideration received is cash or other assets (other than a note or other
delayed payment transaction), (d) no Default or Event of Default then exists
or would result from the Asset Disposition, (e) after giving effect to the Asset Disposition,
Borrower, on a combined and consolidated basis with its Subsidiaries as set
forth in Section 4, are in
compliance on a pro forma basis with the covenants set forth in Section 4 recomputed for the most
recently ended fiscal quarter for which information is available and Borrower
is in compliance with all other terms and conditions contained in this
Agreement, and (f) the proceeds
from any sale under this clause (vi) are promptly used to repay the Term
Loan pursuant to Subsection 1.7(C),
provided that if at the time of such disposition under this clause (vi) Borrower’s
Leverage Ratio is less than or equal to 2.2:1.0 for a disposition
occurring on or before December 31, 2007 and less than or equal to 2.0:1.0
for a disposition occurring on or after January 1, 2008, Borrower may in lieu of repaying the Term Loan apply such
proceeds to the acquisition of fixed assets or other property useful and
intended to be used in the operation of the business of Borrower is
Subsidiaries within 365 days of the date of sale of such assets, any remaining
unapplied proceeds after such 365 days to be applied promptly to repay the Term
Loan pursuant to Subsection 1.7(C).

 

3.7.                              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 or
with any director, officer or employee of Borrower or any Affiliate, except (i) as
set forth on Schedule 3.7; (ii) transactions between Borrower or
any wholly owned Subsidiaries with Borrower or any wholly owned Subsidiaries; (iii) pursuant
to the reasonable requirements of the business of Borrower or such Subsidiary
and upon fair and reasonable terms and are no less favorable to Borrower or
such Subsidiary than would be obtained in a comparable arm’s length transaction
with a Person that is not an Affiliate; or (iv) payment of compensation to
directors, officers and employees in the ordinary course of business for
services actually rendered in their capacities as directors, officers and
employees, provided such compensation is reasonable and comparable with
compensation paid by companies of like nature and similarly situated.

 

3.8.                              Conduct
of Business.  Borrower will not and
will not permit its Subsidiaries directly or indirectly to engage in any
business other than businesses of owning, constructing, managing and operating
Telecommunications Systems, or other lines of business necessary to or
ancillary to the foregoing or consistent with advances in the
Telecommunications Systems industry.

 

3.9.                              Fiscal
Year.  Borrower will not and will not
permit its Subsidiaries to change its or their fiscal year from a fiscal year
ending on December 31 of each year.

 

3.10.                        Inconsistent Agreements.  Borrower
will not, and will not permit any of its Subsidiaries to, enter into any
agreement containing any provision which would (a) be violated or breached
by any borrowing by Borrower hereunder or by the performance by Borrower or such Subsidiary of any of its
obligations hereunder or under any other Loan Document, or (b) create or
permit to exist or become effective any encumbrance or restriction on the
ability of such Subsidiary to (i) pay dividends or make other
distributions to Borrower or pay any Indebtedness owed to Borrower, (ii) make
loans or advances to Borrower or (iii) transfer any of its assets or
properties to Borrower, the effect of which encumbrance or restriction would
reasonably be to have a Material 

 

27

 

Adverse
Effect; provided, however, that  the foregoing shall not apply to restrictions
and conditions imposed by applicable governmental rules or by this
Agreement.

 

SECTION 4

 

FINANCIAL COVENANTS AND REPORTING

 

Borrower covenants and agrees that so long as the Loan Commitments
remain in effect, or any Letter of Credit, any Loan, any interest on any Loan
or any fee payable to Administrative Agent or any Lender hereunder remains
outstanding, or any other amount then due and payable is owing to
Administrative Agent or any Lender hereunder, and unless the Requisite Lenders
(or Administrative Agent if expressly set forth in this Section 4)
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 on a consolidated
basis for Borrower and its Subsidiaries.

 

4.1.                              Leverage
Ratio.  Borrower shall have at each fiscal quarter end a
Leverage Ratio less than or equal to 3.75:1.0.

 

4.2.                              Interest
Coverage Ratio.  Borrower shall have
at each fiscal quarter end an Interest Coverage Ratio greater than or equal to
3.0:1.0.

 

4.3.                              Net
Worth.  Borrower shall have at each
fiscal quarter end an Adjusted Consolidated Net Worth not less than
$160,000,000.

 

4.4.                              Financial
Statements and Other Reports. 
Borrower will and will cause its Subsidiaries to maintain a system of
accounting established and administered in accordance with sound business
practices to permit preparation of financial statements in conformity with GAAP
(it being understood that quarterly financial statements are not required to
have footnote disclosures or reflect year end adjustments).  Borrower will deliver each of the financial
statements and other reports described below to Administrative Agent.

 

(A)                              Quarterly
Financials.  As soon as available and
in any event within 60 days after the end of each of the first three fiscal
quarters of each fiscal year, Borrower will deliver consolidated balance sheets
of Borrower and its Subsidiaries, as at the end of such fiscal quarter, and the
related consolidated statements of income and cash flow for such fiscal quarter
and for the period from the beginning of the then current fiscal year of
Borrower to the end of such quarter; provided that delivery within the
time period specified above of copies of Borrower’s Quarterly Report on Form 10-Q
prepared in compliance with the requirements therefore and filed with the
Securities and Exchange Commission (the “SEC”) will
be deemed to satisfy the requirements of this Subsection
4.4(A).

 

(B)                                Year-End
Financials.  As soon as available and
in any event within 105 days after the end of each fiscal year of Borrower,
Borrower will deliver (i) consolidated balance sheets of Borrower and its
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 

 

28

 

financial statements from Ernst &
Young LLP, or another 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); provided that delivery within
the time period specified above of copies of Borrower’s Annual Report on Form 10-K
prepared in compliance with the requirements therefore and filed with the SEC
will be deemed to satisfy the requirements of this Subsection 4.4(B).

 

(C)                                Borrower
Compliance Certificate.  Together
with each delivery of financial statements of Borrower and its Subsidiaries
pursuant to Subsections 4.4(A) and
4.4(B), Borrower will deliver a
fully and properly completed compliance certificate in substantially the same
form as Exhibit 4.4(C) (each, a “Compliance
Certificate”) signed by the chief financial officer of Borrower.

 

(D)                               Budgets.  As soon as available and in any event no
later than 45 days following the first day of each of Borrower’s fiscal years,
Borrower will deliver a final Budget of Borrower and its Subsidiaries for such
fiscal year approved by Borrower’s senior management and Board of Directors.

 

(E)                                 SEC
Filings.  Promptly upon their
becoming available, Borrower will deliver copies of (i) all financial
statements, reports, notices and proxy statements sent or made available by
Borrower or its Subsidiaries to its or their security holders and (ii) all
regular and periodic reports and all registration statements and prospectuses,
if any, filed by Borrower or any of its Subsidiaries with any securities
exchange or with the SEC or any governmental or private regulatory authority, provided, that, such financial statements and reports shall be deemed to have
been delivered upon the filing of such financial statements and reports by
Borrower through the SEC’s EDGAR system or publication by Borrower of such
financial statements and reports on its website.

 

(F)                                 Events
of Default, Etc.  Promptly upon any
executive officer of Borrower obtaining knowledge of any of the following
events or conditions, Borrower shall deliver copies of all notices given or
received by Borrower or any of its 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.

 

(G)                                Litigation.  Promptly upon any executive officer of
Borrower obtaining knowledge of (i) the institution of any action, suit,
proceeding, governmental investigation or arbitration against or affecting
Borrower or any of its Subsidiaries not previously disclosed by Borrower to
Administrative Agent which, in each case, could reasonably be expected to have
a Material Adverse Effect or (ii) any material development in any action,
suit, proceeding, governmental investigation or arbitration at any time pending
against or affecting Borrower or any of its Subsidiaries which, in each case,
could reasonably be expected to have a Material Adverse Effect, 

 

29

 

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.

 

(H)                               Environmental
Notices.  Immediately after becoming
aware of any material violation by Borrower or any Signficant Subsidiary of
Environmental Laws or immediately upon receipt of any notice that a
Governmental Authority has asserted that Borrower or any Subsidiary is not in
material compliance with Environmental Laws or that its compliance is being
investigated, which, in each case, could reasonably be expected to have a
Material Adverse Effect, Borrower will give notice to Administrative Agent
thereof and provide such other information as may be reasonably available to
Borrower to enable Administrative Agent and its counsel to reasonably evaluate
such matter.

 

(I)                                    ERISA
Events.  Promptly after becoming
aware of any ERISA Event, accompanied by any materials required to be filed
with the PBGC with respect thereto; promptly after any Borrower’s or any of its
Subsidiaries’ receipt of any notice concerning the imposition of any withdrawal
liability under Section 4042 of ERISA with respect to a Plan; promptly
upon the establishment of any Pension Plan not existing at the Closing Date or
the commencement of contributions by any Borrower or any of its Subsidiaries to
any Pension Plan to which any Borrower or any of its Subsidiaries was not
contributing at the Closing Date; and promptly upon becoming aware of any other
event or condition regarding a Plan or any Borrower’s, or any of its
Subsidiaries’ or an ERISA Affiliate’s compliance with ERISA which could
reasonably be expected to have a Material Adverse Effect, such Borrower will
give notice to Administrative Agent thereof and provide such other information
as may be reasonably available to such Borrower to enable Administrative Agent
and its counsel to reasonably evaluate such matter.

 

(J)                                   Other
Information.  With reasonable
promptness, Borrower will deliver such other information and data with respect
to Borrower or any of its Subsidiaries as from time to time may be reasonably
requested by Administrative Agent.

 

4.5.                              Accounting
Terms; Utilization of GAAP for Purposes of Calculations Under Agreement.  For purposes of this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to such terms in conformity with GAAP. Except as otherwise expressly provided,
financial statements and other information furnished to Administrative Agent
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 occurring after the Amendment
Date in accounting principles required by GAAP and implemented by Borrower; (ii) changes
occurring after the Amendment Date in accounting principles recommended by
Borrower’s certified public accountants and implemented by Borrower; and (iii) changes
occurring after the Amendment Date 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 Amendment 

 

30

 

Date (including, but not
limited to, capitalization of costs and expenses or payment of pre-Amendment
Date liabilities) shall be treated as expenses in the period the expenditures
are made.

 

SECTION 5

 

REPRESENTATIONS AND WARRANTIES

 

In order to induce Administrative Agent and Lenders to enter into this
Agreement and to make Loans, Borrower hereby represents and warrants to
Administrative Agent and each Lender that the following statements are true and
correct on the Amendment Date and on the date of each request for a Loan or the
issuance of a Letter of Credit unless another date is expressly noted below:

 

5.1.                              Disclosure.  The information furnished by or on behalf of
Borrower and its Subsidiaries contained in this Agreement, the financial statements
referred to in Subsection 5.8 and
any other document, certificate, opinion or written statement furnished to
Administrative Agent pursuant to this Agreement or any other Loan Document
(other than projections), taken as a whole, does not contain any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements contained herein or therein not misleading in
light of the circumstances in which the same were made.  Any projections provided by or on behalf of
Borrower and its Subsidiaries have been prepared by management in good faith
and based upon assumptions believed by management to be reasonable at the time
the projections were prepared.  Borrower
is not aware of any fact which it has not disclosed in writing to
Administrative Agent having or which could reasonably be expect to have a
Material Adverse Effect.

 

5.2.                              No
Material Adverse Effect.  Since December 31,
2007, there has been no event or change in facts or circumstances 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.  Each of Borrower and its
Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization (which jurisdiction
is set forth on Schedule 5.3(A) as of the Amendment Date).  Each of Borrower and 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.  Each of Borrower
and 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 Lenders), each enforceable against each of such
parties, as applicable, in accordance with their respective terms, 

 

31

 

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.  Each of Borrower and 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.  All
jurisdictions in which each such Person is qualified and authorized to do
business are set forth on Schedule 5.3(C) as of the Amendment Date.

 

5.4.                              Compliance
of Agreement, Loan Documents and Borrowings with Applicable Law.  Except as set forth on Schedule 5.4  hereto, the execution, delivery and
performance by Borrower and its Subsidiaries of the Loan Documents to which
each is a party, the borrowings hereunder and the transactions contemplated
hereby and thereby do not and will not, by the passage of time, the giving of
notice or otherwise, (i) require any Governmental Approval or violate any
Applicable Law relating to Borrower or any of its Subsidiaries, the violation
of which could reasonably be expected to have a Material Adverse Effect, (ii) conflict
with, result in a breach of or constitute a default under the articles of
incorporation, bylaws or other organizational documents of Borrower or any of
its Subsidiaries, (iii) conflict with, result in a breach of or constitute
a default under any Material Contract to which such Person is a party or by
which any of its properties may be bound or any Governmental Approval relating
to such Person, the breach or default of which could reasonably be expected to
have a Material Adverse Effect, or (iv) result in or require the creation
or imposition of any Lien upon or with respect to any property now owned or
hereafter acquired by such Person, the creation or imposition of which could
reasonably be expected to have a Material Adverse Effect.

 

5.5.                              Compliance
with Law; Governmental Approvals. 
Each of Borrower and its Subsidiaries (i) has, or has the right to
use, all material Governmental Approvals, including the Licenses, required by
any Applicable Law for it to conduct its business and (ii) is in material
compliance with each Governmental Approval, including the Licenses, applicable
to it and in compliance with all other Applicable Laws relating to it or any of
its respective properties the violation of which could reasonably be expected
to have a Material Adverse Effect.  Each
such Governmental Approval is in full force and effect, is final and not
subject to review on appeal and is not the subject of any pending or threatened
attack by direct or collateral proceeding.

 

5.6.                              Tax
Returns and Payments.  Each of
Borrower and its 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.

 

32

 

5.7.                              Environmental
Matters.  Each of Borrower and 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 and 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.

 

(A)                              Except as set forth on Schedule 5.8, all
financial statements concerning Borrower and its Subsidiaries which have been
furnished to Administrative Agent pursuant to this Agreement have been prepared
in accordance with GAAP consistently applied (except as disclosed therein) and
present fairly the financial condition of the Persons covered thereby as of the
date thereof and the results of their operations for the periods covered
thereby and disclose all material liabilities of Borrower or its Subsidiaries
as at the dates thereof. Neither Borrower nor any of its Subsidiaries has
outstanding, as of the Amendment Date, and after giving effect to the initial
Loans hereunder on the Amendment Date, any Indebtedness for borrowed money
other than (i) the Loans and (ii) the Indebtedness permitted under Subsection 3.1.

 

(B)                                All
Budgets concerning Borrower and its Subsidiaries which have been furnished to Administrative
Agent were prepared in good faith by or on behalf of Borrower and such
Subsidiaries.  No fact is known to
Borrower which materially and adversely affects or is reasonably expected to
have a Material Adverse Effect which has not been set forth in the financial
statements referred to in Subsection 5.8(A) or
in such information, reports, papers and data or otherwise disclosed in writing
to Administrative Agent prior to the date hereof.

 

5.9.                              Intellectual
Property.  Each of Borrower and 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”), to
its knowledge, without infringing upon any validly asserted rights of others,
except for any Intellectual Property Rights the absence of which could not
reasonably be expected to have a Material Adverse Effect.  No event has occurred which permits, or after
notice or lapse of time or both would permit, the revocation or termination of
any such rights the absence of which could not reasonably be expected to have a
Material Adverse Effect.

 

5.10.                        Litigation,
Investigations, Audits, Etc.  Except
as set forth on Schedule 5.10, there is no action, suit, proceeding or
investigation pending against, or, to the knowledge of Borrower, threatened
against or in any other manner relating adversely to, Borrower or any of its
Subsidiaries or any of their respective properties, including the Licenses, in
any court or before any arbitrator of any kind or before or by any Governmental
Authority (including the FCC), except such as affect the telecommunications
industry generally which, in each case or in the aggregate, could reasonably be
expected to have a Material Adverse Effect. 
None of the actions, suits, proceedings or investigations disclosed on Schedule
5.10 (i) calls into question the validity of this Agreement or any
other Loan Document, or (ii) individually or collectively could reasonably
be expected to result in a judgment or liability not fully covered by insurance
which, if determined adversely to Borrower or any of its 

 

33

 

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) none of Borrower, 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, unfair labor
practice complaints, work stoppages or controversies pending or, to the
best knowledge of Borrower after due inquiry, threatened between any such
Person and its respective employees, other than employee grievances arising in
the ordinary course of business which could not reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect.

 

5.12.                        ERISA
Compliance.

 

(A)                              Each
Plan is in compliance with the applicable provisions of ERISA, the IRC and
other federal or state law except for failures to comply that would not
reasonably be expected to have a Material Adverse Effect.  Except as would not reasonably be expected to
have a Material Adverse Effect, Borrower and each ERISA Affiliate has made all
required contributions to any Plan subject to Section 412 of the IRC, and
no application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the IRC has been made with respect to any Plan.

 

(B)                                There
are no pending or, to the best knowledge of Borrower, threatened claims,
actions or lawsuits, or action by any Governmental Authority, with respect to
any Plan which has resulted or could reasonably be expected to have a Material
Adverse Effect.  There has been no
prohibited transaction or violation of the fiduciary responsibility rules by
Borrower or any of its ERISA Affiliates with respect to any Plan which has
resulted or could reasonably be expected to have a Material Adverse Effect.

 

(C)                                (i) No
ERISA Event has occurred or is reasonably expected to occur that could
reasonably be expected to have a Material Adverse Effect; (ii) neither
Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability under Title IV of ERISA with respect to any Pension Plan (other
than premiums due and not delinquent under Section 4007 of ERISA) that
could reasonably be expected to have a Material Adverse Effect; (iii) neither
Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability (and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under Section 4201
or 4243 of ERISA with respect to a Multi-employer Plan; and (iv) neither
Borrower nor any ERISA Affiliate has engaged in a transaction that could
subject any Person to Section 4069 or 4212(c) of ERISA.

 

34

 

5.13.                        Communications
Regulatory Matters.

 

(A)                              The
Licenses are valid and in full force and effect without conditions except for
such conditions as are generally applicable to holders of such Licenses.  No event has occurred and is continuing which
could reasonably be expected to (i) result in the imposition of a material
forfeiture or the revocation, termination or adverse modification of any such
License or (ii) materially and adversely affect any rights of Borrower or
its Subsidiaries or any other holder thereunder.  Borrower has no reason to believe and has no
knowledge that any License will not be renewed in the ordinary course.  Except as disclosed on Schedule 5.10,
neither Borrower nor any of its Subsidiaries is a party to any investigation,
notice of violation, order or complaint issued by or before the FCC or any
applicable Governmental Authority, and there are no proceedings pending by or
before the FCC or any applicable Governmental Authority, which could in any
manner threaten or adversely affect the validity of any License.

 

(B)                                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.

 

(C)                                Each
of Borrower and its Subsidiaries has paid all material franchise, license or
other fees and charges which have become due pursuant to any Governmental
Approval in respect of its business and has made appropriate provision as is
required by GAAP for any such material fees and charges which have accrued.

 

5.14.                        Solvency.  Each of Borrower and its 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.  None of Borrower or any
of its Subsidiaries is an “investment company” as that term is defined in and
is not otherwise subject to regulation under, the Investment Company Act of
1940, as amended.

 

5.16.                        Certain
Agreements and Material Contracts. 
Each of Borrower and its Subsidiaries has performed all of its material
obligations under all loan agreements, indentures, guarantees, capital leases
and Material Contracts and, to the best knowledge of Borrower, each other party
thereto is in compliance with each such agreement or Material Contract.  Each such agreement or Material Contract is
in full force and effect in accordance with the terms thereof.

 

35

 

5.17.                        Title
to Properties.  Borrower and each of
its Subsidiaries has such title or leasehold interest in and to the real
property or interests therein, including material easements, licenses and
similar rights in real estate, owned or leased by it as is necessary or
desirable to the conduct of its business and valid and legal title or leasehold
interest in and to all of its personal property, including those reflected on
the balance sheets of Borrower delivered pursuant to Subsection 5.8, except those which have been disposed of
by Borrower subsequent to such date which dispositions have been in the
ordinary course of business or as otherwise expressly permitted hereunder.

 

5.18.                        Transactions
with Affiliates.  No Affiliate of
Borrower is a party to any agreement, contract, commitment or transaction with
Borrower or has any material interest in any material property used by
Borrower, except as permitted by Subsection 3.7.

 

5.19.                        OFAC.  None of Borrower or its Subsidiaries (i) is
a person whose property or interest in property is blocked or subject to
blocking pursuant to Section 1 of Executive Order 13224 of September 23,
2001 Blocking Property and Prohibiting Transactions With Persons Who Commit,
Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)), (ii) engages
in any dealings or transactions prohibited by Section 2 of such executive
order, or is otherwise associated with any such person in any manner violative
of Section 2, or (iii) is a person on the list of Specially
Designated Nationals and Blocked Persons or subject to the limitations or
prohibitions under any other U.S. Department of Treasury’s Office of Foreign
Assets Control regulation or executive order.

 

5.20.                        Patriot
Act.  Each of Borrower and its
Subsidiaries is in compliance, in all material respects, with the (i) Trading
with the Enemy Act, as amended, and each of the foreign assets control
regulations of the United States Treasury Department (31 CFR, Subtitle B,
Chapter V, as amended) and any other enabling legislation or executive order
relating thereto, and (ii) Uniting And Strengthening America By Providing
Appropriate Tools Required To Intercept And Obstruct Terrorism (USA Patriot Act
of 2001).  No part of the proceeds of the
Loans will be used, directly or indirectly, for any payments to any
governmental official or employee, political party, official of a political
party, candidate for political office, or anyone else acting in an official
capacity, in order to obtain, retain or direct business or obtain any improper
advantage, in violation of the United States Foreign Corrupt Practices Act of
1977, as amended.

 

SECTION 6

 

EVENTS OF DEFAULT AND RIGHTS AND REMEDIES

 

6.1.                              Event
of Default.  “Event of
Default” shall mean the occurrence or existence of any one or
more of the following:

 

(A)                              Payment.  Failure to repay any outstanding amount of
the Loans at the time required pursuant to this Agreement, or to reimburse
Administrative Agent (for the account of Issuing Lender) for any payment made
by Issuing Lender under or with respect to any Letter of Credit when due, or
failure to pay, within five days after the due date, any interest on any Loan
or failure to pay, within five days after receipt by Borrower of notice from
Administrative Agent, any other amount due under this Agreement or any of the
other Loan Documents; or

 

36

 

(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)
in excess of $5,000,000 or (ii) any other breach or default of Borrower or
any of its Subsidiaries with respect to the Note Purchase Agreement, any
Indebtedness (other than the Loans), if the effect of such breach or default is
to cause or to permit the holder or holders then to cause such Indebtedness
having an aggregate principal amount for Borrower and its Subsidiaries in
excess of $5,000,000 to become or be declared due prior to its stated maturity;
or

 

(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; 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 any Loan Document is false in
any material respect on the date made or deemed made; or

 

(E)                                 Other Defaults
Under Loan Documents.  Borrower, any
of its Subsidiaries or any other party (other than Administrative Agent or 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 30 days after receipt by Borrower, any such
Subsidiary or such other party of notice from Administrative Agent 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 60 days; or (ii) the
continuance of any of the following events for 60 days unless dismissed, bonded
or discharged:  (a) an involuntary
case is commenced against Borrower or any of its 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 

 

37

 

(iii) the Board of Directors or the
shareholders 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)                               Judgment and
Attachments.  Any money judgment,
writ or warrant of attachment or similar process involving an amount in any
individual case or in the aggregate for Borrower and its Subsidiaries at any
time in excess of $5,000,000 (in either case not adequately covered by
insurance as to which the insurance company has not denied coverage) is entered
or filed against Borrower or any of its Subsidiaries or any of their respective
assets and remains undischarged, unvacated, unbonded or unstayed for a period
of 60 days or in any event later than five Business Days prior to the date of
any proposed sale thereunder; or

 

(I)                                    Dissolution.  Any order, judgment or decree is entered
against Borrower or any of its 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 15 days; or

 

(J)                                   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

 

(K)                               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 of its business or otherwise for
more than 60 days to the extent that the results of such injunction or
restraint could reasonably be expected to have a Material Adeverse Effect; or

 

(L)                                 ERISA; Pension
Plans.  (i) Borrower or any of
its Subsidiaries fails to make full payment when due of all amounts which,
under the provisions of any employee benefit plans or any applicable provisions
of the IRC, any such Person is required to pay as contributions thereto and
such failure results in or could reasonably be expected to have a Material
Adverse Effect; or (ii) an accumulated funding deficiency occurs or
exists, whether or not waived, with respect to any such employee benefit plans
and such accumulated funding deficiency results in or could reasonably be
expected to have a Material Adverse Effect; or (iii) any employee benefit
plan of Borrower or any of its Subsidiaries loses its status as a qualified
plan under the IRC and such loss results in or could reasonably be expected to
have a Material Adverse Effect; or

 

(M)                            Invalidity of Loan
Documents.  Any of the Loan Documents
for any reason, other than a partial or full release in accordance with the
terms thereof, ceases to be in full force and effect or is declared to be null
and void and Borrower or any applicable Subsidiary fails to promptly correct
such cessation or declaration, 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

 

(N)                               Licenses and Permits.  The loss, suspension or revocation of, or
failure to renew, any license or permit, including any License, now held or
hereafter acquired by Borrower or any of its Subsidiaries, if such loss,
suspension, revocation or failure to renew could reasonably be expected to have
a Material Adverse Effect; or

 

38

 

(O)                               Change in Control. 
Any Person acquires or beneficially owns, directly or indirectly, and
controls at least 35% of the voting equity in Borrower.

 

6.2.                              Suspension
of Commitments.  Upon the occurrence
and during the continuation of any Default or Event of Default, and without
limiting any other right or remedy hereunder, Administrative Agent may with the
consent of the Requisite Lenders or shall upon written instructions from the
Requisite Lenders, upon written notice to Borrower, cease making additional
Loans and suspend the Lenders’ obligation to lend their Pro Rata Share of the
Loan Commitments; provided that, in the case of a Default, if the
subject condition or event is cured to the reasonable satisfaction of the
Requisite Lenders (unless otherwise provided in Subsection
9.2) or waived or removed by the Requisite Lenders (unless otherwise
provided in Subsection 9.2) within any
applicable grace or cure period, any suspended portion of the Loan Commitments
shall be reinstated.

 

6.3.                              Acceleration.  Upon the occurrence and during the
continuance of any Event of Default described in the foregoing Subsections 6.1(F) or 6.1(G), the unpaid principal amount of and
accrued interest and fees on the Loans, payments under the Letters of Credit
and all other Obligations (other than Obligations under any Related Interest
Rate Agreement to which a Lender or an Affiliate of a Lender is a party, which
may be accelerated solely in the discretion of the Lender or Affiliate of a
Lender party thereto) 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 Lenders to make Loans and
issue Letters of Credit shall thereupon terminate.  Upon the occurrence and during the
continuance of any other Event of Default, Administrative Agent may and upon
written demand of Requisite Lenders shall by written notice to Borrower declare
all or any portion of the Loans, all or any Letter of Credit and all or some of
the other Obligations (other than Obligations under any Related Interest Rate
Agreement to which a Lender or an Affiliate of a Lender is a party, which may
be accelerated solely in the discretion of the Lender or Affiliate of a Lender
party thereto) to be, and the same shall forthwith become, immediately due and
payable together with accrued interest thereon, and upon such acceleration the
obligations of Lenders to make Loans and issue Letters of Credit shall
thereupon terminate and Borrower shall immediately comply with the provisions
of Subsection 1.18.

 

6.4.                              Rights
of Collection.  Upon the occurrence
and during the continuation of any Event of Default and at any time thereafter,
unless and until such Event of Default is cured or waived in writing by
Requisite Lenders, Administrative Agent may exercise on behalf of Lenders all
of its rights and remedies under this Agreement, the other Loan Documents and
Applicable Law, in order to satisfy all of the Obligations.

 

6.5.                              Consents.  Borrower acknowledges that certain
transactions contemplated by this Agreement and the other Loan Documents and
certain actions which may be taken by Administrative Agent or a Lender in the
exercise of its rights under this Agreement and the other Loan Documents may
require the consent of a Governmental Authority.  If counsel to 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 any
Lender 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, 

 

39

 

agrees to use its reasonable efforts, and to
cause its Subsidiaries to use their reasonable efforts, to secure such consent
and to cooperate with Administrative Agent and such Lender 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 neither
Administrative Agent nor any Lender shall 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 against and on account of any of the Obligations 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) all
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 its Subsidiaries; 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 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 Subsection 6.7.

 

6.8.                              Application
of Payments.  Subsequent to the
occurrence and during the continuation of any Default or Event of Default, all
payments received by Lenders (or Affiliates of Lenders party to Related
Interest Rate Agreements) on the Obligations and on the proceeds from the
enforcement of the Obligations shall be applied among Administrative Agent and
Lenders (and Affiliates of Lenders party to Related Interest Rate Agreements)
as follows:  first, to all
Administrative Agent’s and Lenders’ (and Affiliates of Lenders party to Related
Interest Rate Agreements) fees and expenses then due and payable, other than
such fees and expenses which, in effect, correspond to principal, notional
amount or interest under or with respect to such Related Interest Rate
Agreements; second, to all other expenses then due and payable by any
Loan Party under the Loan Documents; third, to all indemnitee
obligations then due and payable by any Loan Party under the Loan Documents; fourth,

 

40

 

to all commitment and other fees and
commissions then due and payable by Borrower under the Loan Documents; fifth,
pro rata to (i) accrued and unpaid interest on the Loans (pro rata) in
accordance with all such amounts due on the Loans and (ii) any scheduled
payments (excluding termination, unwind and similar payments) due to a Lender
or an Affiliate of a Lender on any Related Interest Rate Agreements (pro rata
with all such amounts due); sixth, pro rata to (a) the principal
amount of the Loans (pro rata among all Loans) and (b) any termination,
unwind and similar payments due to a Lender or an Affiliate of a Lender under
Related Interest Rate Agreements (pro rata with all such amounts due); and seventh,
to any remaining amounts due under the Obligations, in that order.  Any remaining monies not applied as provided
in this Subsection 6.8 shall be
paid to Borrower or any Person lawfully entitled thereto.

 

6.9.                              Adjustments.  If any Lender (a “Benefited
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 (other than pursuant to Subsection 1.11(B)), if any, in respect of such other Lender’s
Loans, or interest thereon, such Benefited 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
Benefited 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 Benefited 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 Effectiveness.  The effectiveness
of this Agreement, and the amendments and restatement contained herein, is
subject to the satisfaction of each of the following conditions:

 

(A)                              Executed Loan and
Other Documents.  (i) This
Agreement, (ii) the Notes and (iii) all other documents and
instruments contemplated by such agreements, shall have been duly authorized
and executed by Borrower or other Person, as applicable, in form and substance
satisfactory to Administrative Agent and Lenders, and Borrower or such other
Person, as applicable, shall have delivered original counterparts thereof to
Administrative Agent for delivery to Lenders.

 

41

 

(B)                                Closing
Certificates; Opinions.

 

(1)                                  Officers’
Certificate.  Administrative Agent
shall have received a certificate from the chief executive officer and the senior vice president, finance and corporate
development of Borrower, in form and substance reasonably satisfactory
to Administrative Agent, to the effect that, to their knowledge after
reasonable diligence, all representations and warranties of Borrower and its
Subsidiaries contained in this Agreement and the other Loan Documents are true
and correct in all material respects on and as of the date thereof; 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; and that Borrower has
satisfied each of the closing conditions to be satisfied hereby.

 

(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 its articles of incorporation, and all amendments thereto,
certified as of a recent date by the Secretary of State of the state of its
organization; that attached thereto is a true and complete copy of its bylaws
as in effect on the date of such certification; that attached thereto is a true
and complete copy of resolution of its Board of Directors authorizing the
borrowings contemplated hereunder, and the execution, delivery and performance
of this Agreement and the other Loan Documents; and as to the incumbency and
genuineness of the signature of each of its officers executing Loan Documents.

 

(3)                                  Closing
Certification.  The Administrative
Agent shall have received a certificate of the chief executive officer and the senior vice president, finance and corporate
development of the Borrower, dated the Amendment Date, in form and
substance reasonably acceptable to the Administrative Agent, to the effect that
as of the Amendment Date the Borrower, on a combined and consolidated basis
with its Subsidiaries as set forth in Section 4,
are in compliance on a pro forma basis (after giving effect to the transactions
contemplated by this Agreement) with the covenants set forth in Section 4 for the succeeding 12-month
period based upon the Budgets delivered pursuant to Subsection 4.4(D) and other reasonable and good faith
assumptions, which shall be set forth in such certification, as to transactions
contemplated during such 12-month period.

 

(4)                                  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.

 

(5)                                  Opinion of Counsel.  Administrative Agent shall have received a
favorable opinion of counsel to Borrower addressed to Administrative Agent with
respect to Borrower and the Loan Documents reasonably satisfactory in form and
substance to Administrative Agent.

 

(C)                                Consents.

 

(1)                                  Governmental and
Third Party Approvals.  Borrower
shall have delivered to Administrative Agent all necessary material approvals,
authorizations and consents, if any, of all Persons, Governmental Authorities,
including the FCC and all applicable PUCs, and 

 

42

 

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 reasonably satisfactory to
Administrative Agent.

 

(2)                                  No Injunction, Etc.  No action, proceeding, investigation,
regulation or legislation shall have been instituted, threatened or proposed
before, nor any adverse ruling received from, any Governmental Authority to
enjoin, restrain or prohibit, or to obtain substantial damages in respect of,
or which is related to or arises out of this Agreement or the other Loan
Documents or the consummation of the transactions contemplated hereby or
thereby, or which, as determined by Administrative Agent in its reasonable
discretion, is reasonably likely to result in a Material Adverse Effect.

 

(D)                               Fees, Expenses,
Taxes, Etc.  There shall have been
paid by Borrower to Administrative Agent the fees set forth or referenced in Subsection 1.4 and any other accrued and
unpaid fees or commissions due hereunder (including legal fees and expenses),
and to any other Person such amount as may be due thereto in connection with
the transactions contemplated hereby, including all taxes, fees and other
charges in connection with the execution, delivery, recording, filing and
registration of any of the Loan Documents.

 

(E)                                 Miscellaneous.

 

(1)                                  Proceedings and
Documents. All opinions, certificates and other instruments and all
proceedings in connection with the transactions contemplated by this Agreement
shall be reasonably satisfactory in form and substance to Administrative
Agent.  Administrative Agent shall have
received copies of all other instruments and other evidence as Administrative
Agent or any Lender may request, in form and substance reasonably satisfactory
to Administrative Agent and Lenders, with respect to the transactions
contemplated by this Agreement and the taking of all actions in connection therewith.

 

(2)                                  Litigation,
Investigations, Audits, Etc.  There
is no action, suit, proceeding or investigation pending against, or, to the
knowledge of Borrower after due inquiry, threatened against or in any other
manner relating adversely to, Borrower or any of its Subsidiaries or any of
their respective properties, including the Licenses, in any court or before any
arbitrator of any kind or before or by any Governmental Authority (including
the FCC), except such as affect the telecommunications industry generally, that
would reasonably be expected to have a Material Adverse Effect.

 

7.2.                              Conditions
to All Loans.  The obligations of
Lenders to make Loans, including any Loan on the Amendment Date, and of Issuing
Lenders to issue Letters of Credit, including the initial Letter of Credit, on
any date (each such date a “Funding Date”),
are subject to the further conditions precedent set forth below.

 

(1)                                  Administrative Agent
shall have received, in accordance with the provisions of Subsection 1.3, a Notice of Borrowing
requesting an advance of a Loan or such notice as Issuing Lender shall require
for the issuance of a Letter of Credit.

 

43

 

(2)                                  The
representations and warranties contained in Section 5
of this Agreement and elsewhere herein and in the Loan Documents shall be (and
each request by Borrower for a Loan or a Letter of Credit shall constitute a
representation and warranty by Borrower that such representations and
warranties are) true and correct 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
Amendment Date so long as what is being disclosed does not give rise to a
Default or an Event of Default.

 

(3)                                  No
event shall have occurred and be continuing or would result from the
consummation of the borrowing or issuance contemplated that would constitute an
Event of Default or a Default.

 

(4)                                  No
order, judgment or decree of any court, arbitrator or Governmental Authority
shall purport to enjoin or restrain any Lender from making any Loan or Issuing
Lender from issuing any Letter of Credit.

 

(5)                                  Since
December 31, 2007, there shall not have occurred any event or condition
that has had or could reasonably be expected to have a Material Adverse Effect.

 

(6)                                  All
Loan Documents shall be in full force and effect.

 

SECTION 8

 

ASSIGNMENT AND PARTICIPATION

 

8.1.                              Assignments
and Participations in Loans and Notes.

 

(A)                              General.  No Lender may assign or otherwise transfer
any of its rights or obligations hereunder except (i) to an assignee in
accordance with the provisions of Subsection
8.1(B), (ii) by way of participation in accordance with the
provisions of Subsection 8.1(D),
or (iii) by way of pledge or assignment of a security interest subject to
the restrictions of Subsection 8.1(F) (and
any other attempted assignment or transfer by any party hereto shall be null
and void).  Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby,
Participants to the extent provided in Subsection
8.1(D) and, to the extent expressly contemplated hereby, the
Related Parties of each of Administrative Agent and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.  In the event of an assignment pursuant to
this Subsection 8.1, if a new Note
is requested by the Person to which interests are to be assigned, 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 may
furnish any information concerning Loan Parties and their 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.  Notwithstanding anything contained in this
Agreement to the 

 

44

 

contrary, so
long as the 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.

 

(B)           Assignments by the
Lenders.  Any Lender may at any time
assign to one or more assignees all or a portion of its rights and obligations
under this Agreement (including all or a portion of its Loan Commitments and
the Loans at the time owing to it); provided that any such assignment
shall be subject to the following conditions:

 

(i)            Minimum Amounts.

 

(a)           in the case of an
assignment of the entire remaining amount of the assigning Lender’s Loan
Commitment and the Loans at the time owing to it or in the case of an
assignment to another Lender, an Affiliate of a Lender or an Approved Fund, no
minimum amount need be assigned; and

 

(b)           in any case not
described in Subsection 8.1(B)(i)(a), the
aggregate amount of the Loan Commitment (which for this purpose includes Loans
outstanding thereunder) or, if the applicable Loan Commitment is not then in
effect, the principal outstanding balance of the Loans of the assigning Lender
subject to each such assignment (determined as of the date the Assignment and
Assumption with respect to such assignment is delivered to the Administrative
Agent or, if an “Effective Date” is specified in the Assignment and Assumption,
as of the Effective Date) shall not be less than $3,000,000, in the case of any
assignment in respect of a revolving facility, or $1,000,000, in the case of
any assignment in respect of a term facility, unless each of Administrative
Agent and, so long as no Default or Event of Default has occurred and is
continuing, Borrower otherwise consents (each such consent not to be
unreasonably withheld or delayed).

 

(ii)           Proportionate
Amounts.  Each partial assignment
shall be made as an assignment of a proportionate part of all the assigning
Lender’s rights and obligations under this Agreement with respect to the Loans
or the Loan Commitments assigned, except that this clause (ii) shall not
prohibit any Lender from assigning all or a portion of its rights and
obligations among separate Facilities on a non-pro rata  basis.

 

(iii)          Required Consents.  No consent shall be required for any
assignment except to the extent required by of Subsection
8.1(B)(i)(b) and, in addition:

 

(a)           the consent of Borrower
(such consent not to be unreasonably withheld or delayed) shall be required
unless (x) a Default or an Event of Default has occurred and is continuing
at the time of such assignment or (y) such assignment is to a Lender, an
Affiliate of a Lender or an Approved Fund; and
provided that assignments by CoBank to institutions chartered under the Farm
Credit System shall not require written consent of the Borrower; and

 

45

 

(b)                                 the consent of
Administrative Agent (such consent not to be unreasonably withheld or delayed)
shall be required for assignments in respect of a Facility if such assignment
is to a Person that is not a Lender with a Loan Commitment in respect of such
Facility, an Affiliate of such Lender or an Approved Fund with respect to such
Lender.

 

(iv)                              Assignment
and Assumption.  The parties to each
assignment shall execute and deliver to Administrative Agent an Assignment and
Assumption, together with a processing and recordation fee of $3,500, and the
assignee, if it is not a Lender, shall deliver to Administrative Agent an
Administrative Questionnaire.

 

(v)                                 No
Assignment to the Borrower.  No such
assignment shall be made to Borrower or any of the Borrower’s Affiliates or
Subsidiaries.

 

(vi)                              No
Assignment to Natural Persons.  No
such assignment shall be made to a natural person.

 

Subject to acceptance and recording thereof by Administrative
Agent pursuant to Subsection 8.1(C),
from and after the effective date specified in each Assignment and Assumption,
the assignee thereunder shall be a party to this Agreement and, to the extent
of the interest assigned by such Assignment and Assumption, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the
case of a Assignment and Assumption covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto) but shall continue to be entitled to the benefits of Subsections 1.4(D), 1.11, 1.13, 1.14, 9.1, 9.14 and 9.15 with respect to facts and circumstances occurring prior
to the effective date of such assignment. 
Any assignment or transfer by a Lender of rights or obligations under
this Agreement that does not comply with this Subsection
8.1(B) shall be treated for purposes of this Agreement as a
sale by such Lender of a participation in such rights and obligations in
accordance with Subsection 8.1(D).

 

(C)                                Register.  Administrative Agent, acting solely for this
purpose as an agent of Borrower, shall maintain at one of its offices in
Denver, Colorado a copy of each Assignment and Assumption delivered to it and a
register for the recordation of the names and addresses of the Lenders, and the
Loan Commitments of, and principal amounts of the Loans owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be
conclusive absent manifest error, and Borrower, Administrative Agent and the
Lenders may treat each Person whose name is recorded in the Register pursuant
to the terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. 
The Register shall be available for inspection by Borrower and any
Lender, at any reasonable time and from time to time upon reasonable prior
notice.

 

(D)                               Participations.  Any Lender may at any time, without the
consent of, or notice to, Borrower or Administrative Agent, sell participations
to any Person (other than a natural person or Borrower or any of Borrower’s Affiliates
or Subsidiaries) (each, a “Participant”)
in all or a portion of such Lender’s rights and/or obligations under this
Agreement (including all or a portion of 

 

46

 

its Loan
Commitment and/or the Loans owing to it); provided that (i) such
Lender’s obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) Borrower, Administrative Agent
and the Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement.  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.

 

Any agreement or instrument pursuant to which a Lender
sells such a participation shall provide that such Lender shall retain the sole
right to enforce this Agreement and to approve any amendment, modification or
waiver of any provision of this Agreement; provided that such agreement
or instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver described in Subsection 9.2 relating to amendments requiring unanimous
consent of the Lenders that affects such Participant.  Subject to Subsection
8.1(E), Borrower agrees that each Participant shall be entitled to
the benefits of Subsections 1.11, 1.13 and 1.14 to the
same extent as if it were a Lender and had acquired its interest by assignment
pursuant to Subsection 8.1(B).  To the extent permitted by law, each
Participant also shall be entitled to the benefits of Subsection
6.7 as though it were a Lender, provided such Participant agrees to
be subject to Subsection 6.7 as though it were a
Lender.

 

(E)                                 Limitations
upon Participant Rights.  A
Participant shall not be entitled to receive any greater payment under Subsections 1.11, 1.13 and 1.14 than the applicable Lender would have
been entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is made
with the Borrower’s prior written consent and after disclosure in writing of
such greater payment to the extent such Participant has knowledge of the
circumstances giving rise to such greater payment at the time of such sale.  A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Subsection 1.13 unless Borrower is notified
of the participation sold to such Participant and such Participant agrees, for
the benefit of Borrower, to comply with Subsection
1.13(B) as though it were a Lender.

 

(F)                                 Certain
Pledges.  Any Lender may at any time
pledge or assign a security interest in all or any portion of its rights under
this Agreement to secure obligations of such Lender, including any pledge or
assignment  to secure obligations to a
Federal Reserve Bank; provided that no such pledge or assignment shall
release such Lender from any of its obligations hereunder or substitute any
such pledgee or assignee for such Lender as a party hereto.

 

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 or all
Lenders, as appropriate, be obtained in certain instances as provided in this
Agreement.  CoBank hereby agrees to act
as Administrative Agent on 

 

47

 

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 rights 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 an Administrative Agent of Lenders and Administrative
Agent shall not assume or be deemed to have assumed any obligation toward or
relationship of agency or trust with or for any Loan Party or their respective
Affiliates.  Administrative Agent may
execute any of its duties under this Agreement or any other Loan Document by or
through agents or attorneys-in-fact and shall not be responsible for the
negligence or misconduct of any agents 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 none
of Administrative Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates have made any representation or warranty to it
and that no act by Administrative Agent or any such Person hereafter taken,
including any review of the affairs of Borrower or any of its Subsidiaries,
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 its
Subsidiaries 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 Loan Parties. 
Administrative Agent shall have no 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.  Administrative
Agent, its Affiliates and any of their or their Affiliates’ respective
officers, directors, employees, agents or attorneys-in-fact shall not 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, bad faith
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 

 

48

 

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 Loan
Parties.  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 Lenders, as applicable.  Without limiting the foregoing, no Lender
shall have any right of action whatsoever against Administrative Agent as a
result of Administrative 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, except in connection with its own gross
negligence, bad faith or willful misconduct.

 

(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
Administrative Agent and its Affiliates and its and its Affiliates’ officers,
directors, employees, agents, and attorneys-in-fact (collectively, “Representatives”), on demand (to
the extent not actually reimbursed by Borrower, but without limiting the
obligations of Borrower under this Agreement) for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses (including, without limitation, 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 or its
Representatives (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 or its Representatives 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 

 

49

 

of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses, advances or disbursements resulting from Administrative
Agent’s or its Representatives’ gross negligence, bad faith or willful misconduct.  If any indemnity furnished to Administrative
Agent or its Representatives 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 as one of the
Requisite Lenders.  Administrative Agent
may lend money to, and generally engage in any kind of banking, trust or other
business with, Loan Parties as if it were not acting as 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 conditions of this Agreement or
any of the Loan Documents or the financial condition of Borrower or any of its
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
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 they shall
deem advisable and in the best interests of Lenders.

 

(H)                               Successor
Administrative Agent.

 

(a)                                  Resignation.  Administrative Agent may resign from the
performance of all its agency functions and duties hereunder at any time by
giving at least 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 (b) below or as otherwise provided below.

 

(b)                                 Appointment
of Successor.  Upon any such notice
of resignation or removal pursuant to clause (a) above, Requisite Lenders
shall (and if no Event of 

 

50

 

Default or
Default shall have occurred and be continuing, upon receipt of Borrower’s prior
consent, which shall not be unreasonably withheld or delayed), appoint a
successor Administrative Agent from among Lenders or another financial
institution.  If a successor
Administrative Agent shall not have been so appointed within the 30 Business
Day period referred to in clause (a) 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 (if required under the first sentence of this paragraph), which shall
not be unreasonably withheld or delayed, appoint a successor Administrative
Agent as provided above.

 

(c)                                  Successor
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 Documents.
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 (except where otherwise provided herein) to provide
Lenders with any information received by Administrative Agent from Borrower
which is required to be provided to a Lender hereunder or which is otherwise
requested by any Lender, provided that Administrative Agent shall not be
liable to Lenders for any failure to do so, except to the extent that such
failure is attributable to Administrative Agent’s or its Representatives’ gross
negligence, bad faith or willful misconduct.

 

8.3.                              Consents;
Notices.

 

In the event
Administrative Agent requests the consent of a Lender and does not receive a
written consent or denial thereof within ten 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, Colorado time) at least two Business Days immediately preceding the
Funding Date applicable thereto (in the case of LIBOR Loans), otherwise on the
Business Day immediately preceding 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, Colorado 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 

 

51

 

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 (or any other Lender) 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 Loans; 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
credit each Lender’s account with its Pro Rata Share of such payment in
accordance with such Lender’s Pro Rata Share and shall promptly wire advice of
the amount of such credit to each Lender. 
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.

 

(a)                                  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 by Borrower, and Administrative Agent has given notice pursuant to Subsection 8.4, 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.

 

(b)                                 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 a default by such Lender under this Agreement.

 

(c)                                  Without
limiting the generality of the foregoing, each Lender shall be obligated to
fund its Pro Rata Share of any Revolving Loan made after any Event of Default
or acceleration of the Obligations with respect to any draw on a Letter of
Credit.

 

(C)                                Return
of Payments.

 

(a)                                  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.

 

(b)                                 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 

 

52

 

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 Affiliates and the
respective officers, directors, employees, agents, and attorneys of
Administrative Agent, each Lender and their respective Affiliates (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
Administrative Agent and each Lender being a party to this Agreement or
otherwise in connection with this Agreement; provided, that Borrower shall
have no obligation to an Indemnitee hereunder with respect to liabilities
arising from the negligence or willful misconduct of that Indemnitee as
determined by a court of competent jurisdiction; provided further, however,
that Borrower’s obligations to indemnify or compensate any Indemnitee for taxes
shall be subject to Subsection 1.13.
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
(other than any Related Interest Rate Agreement, which may only be amended, modified
or terminated, or any provision thereof waived, in accordance with the terms
thereof), or consent to any departure by Borrower therefrom, shall in any event
be effective unless the same shall be in writing and signed by Borrower and
Requisite Lenders (or Administrative Agent, if expressly set forth herein, in
any Note or in any other Loan Document); provided, that, notwithstanding
any other provision of this Agreement to the contrary and except, with respect
to an assignee or assignor hereunder, to the extent permitted by any applicable
Assignment and Assumption, no amendment, modification, termination or waiver
shall, unless in writing and signed by Borrower and all Lenders affected
thereby, do any of the following: (i) increase any Lender’s Pro Rata Share
of any Loan Commitment or change a pro rata payment of any Lender; (ii) reduce
the principal of, rate of interest on (except as contemplated by Subsection 1.2) or fees payable with
respect to any Loan; provided, however, that only the consent of the Requisite
Lenders shall be necessary (a) to amend the definition of “Default Rate”
or to waive any obligation of Borrower to pay interest or fees at the Default
Rate or (b) to amend any financial covenant hereunder (or any defined term
used therein) even if the effect of such amendment would be to reduce the rate
of interest on any Loan or to reduce any fee payable hereunder; (iii) extend
the Revolving Loan Expiration Date, the any Term Loan Maturity Date or extend
any other scheduled date on which any Obligation is to be paid (but excluding
mandatory prepayments); (iv) change the percentage of Lenders which shall
be required 

 

53

 

for Lenders or
any of them to take any action hereunder; (v) 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; or (vi) consent to the
assignment, delegation or other transfer by Borrower of any of its rights and
obligations under any Loan Document; and provided, further, that
no amendment, modification, termination or waiver affecting the rights or
duties of Administrative Agent or 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 shall be required for
Administrative Agent to take Collateral pursuant to any Loan Document.  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, except to the extent that all Notes
have been amended with the consent of Requisite Lenders as permitted
herein.  No notice to or demand on
Borrower or any other Person in any case shall entitle Borrower or such Person
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.

 

In connection with any
such proposed amendment, modification, waiver or termination requiring the
consent of all Lenders (such proposed amendment, modification, waiver or
termination, a “Proposed Change”),
if the consent of the Requisite Lenders is obtained to such Proposed Change,
but the consent of other Lenders whose consent is required is not obtained (any
such Lender whose consent is not obtained as described in this Subsection 9.2 being referred to as a “Non-Consenting
Lender”), then, so long as the Lender that is acting as
Administrative Agent is not a Non-Consenting Lender and provided no Event of
Default has occurred and is then continuing, then Borrower shall have the right
to cause each such Non-Consenting Lender to (and such Non-Consenting Lender
shall) transfer or assign, without recourse, all of the rights, obligations and
interests of each such Non-Consenting Lender or with respect to this Agreement
to one or more assignees (in accordance with and subject to the restrictions
contained in Subsection 8.1(B)) approved by
Administrative Agent, which approval shall not be unreasonably withheld, so
long as at the time of such transfer or assignment, each such assignee consents
to such Proposed Change; provided, however, that no
Non-Consenting Lender shall be obligated to make any such assignment unless, (x) such
assignment shall not conflict with any law or any rule, regulation or order of
any Governmental Authority and (y) such assignee shall pay to the affected
Non-Consenting Lender in immediately available funds on the date of such
assignment the principal of and interest accrued to the date of payment on the
Loans made by such Non-Consenting Lender and all fees owed to such Non-Consenting
Lender hereunder and all other amounts accrued for such Non-Consenting Lender’s
account or owed to it hereunder.  In
furtherance of the foregoing, each Non-Consenting Lender agrees to execute an
Assignment and Assumption to reflect such assignment, but regardless of whether
such Assignment and Assumption is executed, such Non-Consenting Lender’s rights
hereunder, except rights under Subsection 9.1
with respect to actions prior to such date, shall cease from and after the date
of tender by the assignee to such Non-Consenting Lender of the amount specified
by clause (y) above.

 

54

 

9.3.                              Notices.  Any required notice or other communication
shall be in writing addressed to the respective party as set forth below and
may be personally delivered, telecopied, sent by overnight courier service or
U.S. mail and shall be deemed to have been given:  (i) if delivered in person, when
delivered; (ii) if delivered by telecopy, on the date of confirmed
transmission if transmitted on a Business Day before 2:00 p.m. (Denver,
Colorado time) and otherwise on the Business Day next succeeding the date of
transmission; (iii) if delivered by overnight courier, two days after
delivery to the courier properly addressed; or (iv) if delivered by U.S.
mail, four Business Days after deposit with postage prepaid and properly
addressed.

 

Notices shall be addressed as follows:

 

If to Borrower:                                                                SureWest
Communications

200 Vernon Street 

Roseville, CA 95678

Attn: Chief Financial Officer

Fax:                         (916)
786-1800

 

with a copy to:                                                                 SureWest
Communications

200 Vernon Street 

Roseville, CA 95678

Attn: Senior Vice President, Finance and Corporate Development

Fax:                         (916)
786-1800

 

If to Administrative Agent:                                      CoBank, ACB

5500 South Quebec Street

Greenwood Village, Colorado 80111

Attn: Communications & Energy Banking Group

Fax: (303) 224-2639

 

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.                              Payments
Set Aside.  To the extent that
Borrower or any other Person makes payment(s) or Administrative Agent
enforces its Liens or Administrative Agent or any Lender exercises its right of
set-off, 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 (whether by demand, litigation,
settlement or otherwise), 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.

 

55

 

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 or
any such invalid, unenforceable or illegal provision in any jurisdiction in
which it is not invalid, unenforceable or illegal.

 

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 an Loan as
herein provided, 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 imply or construe 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 each 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.

 

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 or its Affiliates by
Administrative Agent or any Lender.

 

9.12.                        Construction.  Administrative Agent, or 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 its
Subsidiaries pursuant to this Agreement in confidence, except for disclosure: (i) on
a confidential basis to directors, officers, employees, agents or legal
counsel, independent public accountants and other professional advisors of
Administrative Agent or Lenders or their respective Affiliates; (ii) to
regulatory officials having jurisdiction over Administrative Agent or Lenders
or their Affiliates; (iii) as required or requested by Applicable Law or
legal process; or (iv) in connection with any legal proceeding between or
among Administrative Agent or Lenders or their Affiliates and Borrower and/or
their respective Subsidiaries or Affiliates 

 

56

 

(provided that, in the event
Administrative Agent or Lenders or their Affiliates 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 (unless legally prohibited from
so doing), 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 possible 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 its Affiliates
or Subsidiaries, other than (A) information previously filed by Borrower
or its Affiliates or Subsidiaries with any Governmental Authority and available
to the public or otherwise made available by Borrower or any of its Affiliates
to third parties on a non-confidential basis, (B) information previously
published in any public medium from a source other than, directly or
indirectly, Lenders in violation of this Subsection
9.13 and (C) information obtained by Administrative Agent or
Lenders from a source independent of Borrower or its Subsidiaries, which source
is not actually known to Administrative Agent or Lenders to be bound by a duty
of confidentiality with respect to such information.

 

9.14.                        Consent
to Jurisdiction and Service of Process.

 

(1)  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.

 

(2)  BORROWER HEREBY AGREES THAT SERVICE OF THE SUMMONS AND
COMPLAINT AND ALL OTHER PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT,
ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING BY REGISTERED MAIL, RETURN
RECEIPT REQUESTED, A COPY OF SUCH PROCESS TO BORROWER AT THE ADDRESS TO WHICH
NOTICES TO BORROWER ARE THEN TO BE SENT PURSUANT TO SUBSECTION 9.3
AND THAT PERSONAL SERVICE OF PROCESS SHALL NOT BE REQUIRED.  NOTHING HEREIN SHALL BE CONSTRUED TO PROHIBIT
SERVICE OF PROCESS BY ANY OTHER METHOD PERMITTED BY LAW.

 

9.15.                        Waiver
of Jury Trial.  BORROWER, ADMINISTRATIVE
AGENT AND EACH LENDER EACH HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL
OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT,
ANY OF THE OTHER LOAN DOCUMENTS, OR ANY DEALINGS BETWEEN ANY THEM 

 

57

 

RELATING TO THE SUBJECT MATTER OF THIS LOAN
TRANSACTION AND THE LENDER/BORROWER RELATIONSHIP THAT IS BEING
ESTABLISHED.  THE SCOPE OF THIS WAIVER IS
INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN
ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING
WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND
ALL OTHER COMMON LAW AND STATUTORY CLAIMS. 
BORROWER, ADMINISTRATIVE AGENT AND EACH LENDER EACH ACKNOWLEDGE THAT
THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP,
THAT EACH HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND
THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS.  BORROWER, ADMINISTRATIVE AGENT AND EACH
LENDER EACH FURTHER WARRANTS AND REPRESENTS 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 EACH OF THEM.

 

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, the
issuances of Letters of Credit and the execution and delivery of the
Notes.  Notwithstanding anything in this
Agreement or implied by law to the contrary, the agreements of Borrower set
forth in Subsections 1.4(D), 1.11, 1.13,
1.14, 9.1, 9.14 and 9.15
shall survive the payment of the Loans, the payment of the Letter of Credit
Liabilities and the 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 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.

 

58

 

9.19.                        Patriot Act.  Administrative Agent notifies
Borrower and its Subsidiaries that pursuant to the requirements of the USA
PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Patriot
Act”), it is required to
obtain, verify and record information that identifies each of Borrower and its
Subsidiaries, which information includes the name and address of such entity
and other information that will allow Administrative Agent to identify such in
accordance with the Patriot Act.  Each of
Borrower and its Subsidiaries shall provide to the extent commercially
reasonable, such information and take such other actions as are reasonably
requested by Administrative Agent in order to assist Administrative Agent in maintaining
compliance with the Patriot Act.

 

9.20.                        Effectiveness
of Amendment and Restatement; No Novation. 
The amendment and restatement of the Existing Credit Agreement pursuant
to this Agreement shall be effective as of the Amendment Date.  All obligations and rights of Borrower and
its Subsidiaries and Administrative Agent arising out of or relating to the
period commencing on the Amendment Date shall be governed by the terms and
provisions of this Agreement; the obligations of and rights of Borrower, its
Subsidiaries, Lenders and Administrative Agent arising out of or relating to
the period prior to the Amendment Date shall continue to be governed by the
Existing Credit Agreement without giving effect to the amendment and
restatements provided for herein. This Agreement shall not constitute a
novation or termination of Borrower’s or any of its Subsidiary’s obligations
under the Existing Credit Agreement or any document, note or agreement executed
or delivered in connection therewith, but shall constitute an amendment and
restatement of the obligations and covenants of Borrower and its Subsidiaries
under the such documents, notes and agreements, and each Borrower and its
Subsidiaries hereby reaffirms all such obligations and covenants, as amended
and restated hereby.

 

SECTION 10

 

DEFINITIONS

 

10.1.                        Certain
Defined Terms.  The terms defined
below are used in this Agreement as so defined. 
Terms defined in the preamble and recitals to this Agreement are used in
this Agreement as so defined.

 

“Acquired Indebtedness” shall
mean Indebtedness of a Person or any of its Subsidiaries existing at the time
such Person becomes a Subsidiary or at the time it merges or consolidates with
or into Borrower or any of its Subsidiaries or assumed in connection with the
acquisition of assets from such Person and in each case not incurred by such
Person in connection with, or in anticipation or contemplation of, such Person
becoming a party to this Agreement or such acquisition, merger or consolidation
and which Indebtedness is without recourse to Borrower or any Subsidiary or to
any of their respective properties or assets other than the Person or the
assets to which such Indebtedness related prior to the time such Person became
a Subsidiary or the time of such acquisition, merger or consolidation.  Acquired Indebtedness shall not include any
Indebtedness that refinances or replaces any Acquired Indebtedness.

 

59

 

“Adjusted Consolidated Net Worth”
means, as of any date of determination, the result of (i) Consolidated Net
Worth minus (ii) the sum of Restricted Investments incurred after December 9,
1998 in excess of 10% of Consolidated Net Worth, all as of the such date of
determination.

 

“Adjustment Date”
means each date which is the fifth (5th) Business Day after the
receipt by Administrative Agent of (i) each Compliance Certificate
delivered by Borrower pursuant to Subsection 4.4(C) and
(ii) in the case a decrease in an applicable margin is warranted, a
written notice from Borrower to decrease such margin.

 

“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 Subsection 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 five percent (5%) or more of any equity
interest in Borrower or any of its Subsidiaries; or (iii) five percent
(5%) or more of whose voting stock or other equity interest is directly or
indirectly owned or held by Borrower or any of its Subsidiaries.  For purposes of this definition, “control”
(including with correlative meanings, the terms “controlling,” “controlled by”
and “under common control with”) means the possession directly or indirectly of
the power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities or by contract or
otherwise.

 

“Amendment Date”
means the date hereof.

 

“Applicable Law”
means, in respect of any Person, all provisions of constitutions, statutes,
rules, regulations and orders of governmental bodies or regulatory agencies
applicable to such Person, including the Licenses, the Communications Act and
all Environmental Laws, and all orders, decisions, judgments and decrees of all
courts and arbitrators in proceedings or actions to which the Person in
question is a party or by which it is bound.

 

“Asset Disposition”
means the disposition, whether by sale, lease, transfer, loss, damage,
destruction, condemnation or otherwise, by Borrower or any of its Subsidiaries,
of any of the following:  (i) any of
the capital stock or the ownership interests of any of its Subsidiaries, or (ii) any
or all of its assets.

 

“Assignment and Assumption” 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 Commitment, the Facilities and other interests under
this Agreement and the other Loan Documents in the form attached hereto as Exhibit 10.1(A).

 

“Available Revolving Commitment”
means, at any time, the Revolving Loan Commitment, as it may have been reduced
pursuant to this Agreement, minus the sum of (a) aggregate
principal balance of all Revolving Loans and (b) the Letter of Credit
Liability then outstanding.

 

60

 

“Banking Day” means
a day on which CoBank is open for business, dealings in U.S. dollar deposits
are being carried out in the London interbank market, and banks are open for
business in New York City and London, England.

 

“Bankruptcy Code”
means Title 11 of the United States Code entitled “Bankruptcy,” as amended from
time to time or any applicable bankruptcy, insolvency or other similar federal
or state law now or hereafter in effect and all rules and regulations
promulgated thereunder.

 

“Base Rate” means a
variable rate of interest per annum equal, on any day, to the rate of interest
established by CoBank from time to time as its CoBank Base Rate, which rate is
intended by CoBank to be a reference rate and not its lowest rate.  The CoBank Base Rate will change on the date
established by CoBank as the effective date of any change thereof.

 

“Base Rate Loan”
means, at any time, the aggregate amount of all Loans then bearing interest at
the rate determined by reference to the Base Rate.

 

“Base Rate Margin”
means the applicable percent per annum determined in accordance with Subsection 1.2(B).

 

“Budget” means, for
Borrower prepared on a segment basis, (i) profit and loss statements and (ii) cash
flow statements, all prepared on a consistent basis with Borrower’s or such
Subsidiaries’ historical financial statements, together with appropriate
supporting details and a statement of underlying assumptions.  The Budget represents and will represent as
of the date thereof the good faith estimate of Borrower and its senior
management concerning the course of its business.

 

“Business Day”
means (i) for all purposes other than as covered by clause (ii) below,
any day excluding Saturday, Sunday and any day which is a legal holiday under
the laws of the State of Colorado, or is a day on which banking institutions
located in such state are closed or which the Federal Reserve Banks are closed,
and (ii) with respect to all notices, determinations, fundings and
payments in connection with LIBOR Loans, any day that is a Business Day
described in clause (a) above and that is also a day for trading by and
between banks in U.S. dollar deposits in the applicable interbank LIBOR market.

 

“Calculation Period”
means each period commencing on each Adjustment Date and ending on the day
preceding each subsequent Adjustment Date.

 

“Capital Lease”
means any lease of real or personal property which is required to be
capitalized under GAAP or which is treated as an operating lease under
regulations applicable to Borrower and its Subsidiaries but which otherwise
would be required to be capitalized under GAAP.

 

“Cash Equivalents”
means:  (i) marketable direct
obligations issued or unconditionally guarantied by the United States
Government or issued by any agency thereof and backed by the full faith and
credit of the United States, in each case maturing within one (1) year
from the date of acquisition thereof; (ii) commercial paper maturing no
more than one (1) year from the date issued and, at the time of
acquisition, having a rating of at least A-1 from Standard & Poor’s
Rating Service or at least P-1 from Moody’s Investors Service, Inc.; (iii) certificates
of deposit or bankers’ 

 

61

 

acceptances maturing
within one (1) year from the date of issuance thereof issued by, or
overnight reverse repurchase agreements from, any commercial bank organized
under the laws of the United States of America or any state thereof or the
District of Columbia having combined capital and surplus of not less than
$500,000,000; and (iv) time deposits maturing no more than 30 days from
the date of creation thereof with commercial banks having membership in the
Federal Deposit Insurance Corporation in amounts at any one such institution
not exceeding the lesser of $100,000 or the maximum amount of insurance
applicable to the aggregate amount of Borrower’s deposits at such institution.

 

“Closing Date”
means May 1, 2006.

 

“Communications Act”
means the Communications Act of 1934, as amended and any similar or successor
federal statute, and the rules and regulations of the FCC thereunder, all
as the same may be in effect from time to time.

 

“Consolidated Net Assets”
means, on a consolidated basis for Borrower and its Subsidiaries, total assets
minus the sum of (a) Restricted Investments and (b) current
liabilities.

 

“Consolidated Net Worth”
means the consolidated stockholders’ equity of Borrower and its Subsidiaries.

 

“Default” means a
condition or event that, after notice or lapse of time or both, would constitute
an Event of Default if that condition or event were not cured or removed within
any applicable grace or cure period.

 

“Defaulting Lender”
means any Lender that (a) has failed to fund any portion of any Loan or
participation in any Letter of Credit required to be funded by it hereunder
within one Business Day of the date required to be funded by it hereunder, (b) has
otherwise failed to pay over to Administrative Agent or any other Lender any
other amount required to be paid by it hereunder within one Business Day of the
date when due, unless the subject of a good faith dispute, or (c) has been
deemed insolvent or become the subject of a bankruptcy or insolvency
proceeding.

 

“EBITDA” means the
sum of (a) net income or deficit, as the case may be (excluding
extraordinary gains, the write up of any asset or any gain realized upon the
sale of an asset and excluding any extraordinary, non-cash losses, the write
down of any asset and the loss realized upon the sale of any asset), (b) total
interest expense (including non-cash interest), (c) depreciation and
amortization expense, (d) income or franchise taxes, federal, state or
local, (e) non-recurring fees and expenses incurred in connection with any
investment, disposition or acquisition permitted by this Agreement or any
issuance of equity interests or incurrence or early extinguishment of
Indebtedness, or refinancing transactions or other modification of any debt
instrument, in each case permitted herein, (f) non-cash compensation
charges, including any such charges resulting from stock options, stock
appreciation rights, restricted stock grants or other equity incentive
programs, (g) to the extent actually reimbursed, expenses incurred to the
extent covered by indemnification provisions in any agreement in connection
with Permitted Acquisitions, and (h) purchase accounting adjustments in
connection with Permitted Acquisitions. 
For any period of calculation, EBITDA shall be adjusted to give effect
to any acquisition, sale or other disposition of any operation or business (or
any portion 

 

62

 

thereof) during the period of calculation as if such acquisition, sale
or other disposition occurred on the first day of such period of calculation.

 

“Environmental Laws”
means all applicable federal, state or local laws, statutes, rules, regulations
or ordinances, codes, common law, consent agreements, orders, decrees,
judgments or injunctions issued, promulgated, approved or entered thereunder
relating to public health, safety or the pollution or protection of the
environment, including those relating to releases, discharges, emissions,
spills, leaching, or disposals of hazardous substances (including petroleum,
crude oil or any fraction or derivative thereof, or other hydrocarbons) to air,
water, land or ground water, to the withdrawal or use of ground water, to the
use, handling or disposal of polychlorinated biphenyls, asbestos or urea
formaldehyde, to the treatment, storage, disposal or management of hazardous
substances (including petroleum, crude oil or any fraction or derivative
thereof, or other hydrocarbons), pollutants or contaminants, to exposure to
toxic, hazardous or other controlled, prohibited, or regulated substances,
including, without limitation, any such provisions under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
(42 U.S.C. § 9601 et  seq.), or the Resource Conservation and
Recovery Act of 1976, as amended (42 U.S.C. § 6901 et  seq.).

 

“ERISA” means the
Employee Retirement Income Security Act of 1974, as amended from time to time.

 

“ERISA Affiliate”
means any trade or business (whether or not incorporated) which is a member of
a controlled group or under common control with Borrower within the meaning of Section 414(b) or
(c) of the IRC (and Sections 414(m) and (o) of the IRC for
purposes of provisions relating to Section 412 of the IRC).

 

“ERISA Event”
means, with respect to Borrower, any ERISA Affiliate or any Pension Plan, the
occurrence of any of the following: (a) a Reportable Event; (b) a
withdrawal by a substantial employer (as defined in Section 4001(a)(12) of
ERISA) subject to Section 4063 of ERISA; (c) a cessation of
operations which is treated as a withdrawal under Section 4062(e) of
ERISA; (d) a complete or partial withdrawal under Section 4203 or
4205 of ERISA from a Multi-employer Plan; (e) a notification that a
Multi-employer Plan is in reorganization under Section 4242 of ERISA; (f) the
filing of a notice of intent to terminate a Pension Plan under 4041 of ERISA; (g) the
treatment of an amendment of a Pension Plan as a termination under 4041 of
ERISA; (h) the termination of a Multi-employer Plan under Section 4041A
of ERISA; (i) the commencement of proceedings by the PBGC to terminate a
Pension Plan under 4042 of ERISA; (j) an event or condition which could
reasonably be expected to constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, a
Pension Plan; or (k) the imposition of any liability under Title IV of
ERISA, other than PBGC premiums due but not delinquent under Section 4007
of ERISA.

 

“Everest Acquisition” means the
acquisition by Borrower of substantially all of the stock of Everest Broadband, Inc.
pursuant to that certain Purchase and Sale Agreement by and among Everest
Broadband, Inc., the equity holders of Everest Broadband, Inc. and
Borrower dated December 6, 2007.

 

63

 

“Facility” and “Facilities” mean, respectively, each of
the Term Loan Facility, the Swingline Facility and the Revolving Loan Facility
and, collectively, both of the Term Loan Facilities, the Swingline Facility and
the Revolving Loan Facility.

 

“FCC” means the
Federal Communications Commission, or any other similar or successor agency of
the federal government administering the Communications Act.

 

“Fixed Rate Margin”
means the applicable percent per annum determined in accordance with Subsection 1.2(B).

 

“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.

 

“Guarantee  Obligation” means as to any Person (the “guaranteeing
person”), any obligation, including a reimbursement, counterindemnity or
similar obligation, of the guaranteeing person that guarantees any Indebtedness,
leases, dividends or other obligations (the “primary obligations”) of
any other third Person (the “primary obligor”) in any manner, whether
directly or indirectly, including any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or
any property constituting direct or indirect security therefor, (ii) to
advance or supply funds (1) for the purchase or payment of any such
primary obligation or (2) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of such primary
obligation, (iv) otherwise to assure or hold harmless the owner of any
such primary obligation against loss in respect thereof or (v) to
reimburse or indemnify an issuer of a letter of credit, surety bond or guarantee
issued by such issuer in respect of primary obligations of a primary obligor
other than Borrower or any Subsidiary; provided, however, that
the term Guarantee Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business.  The amount of any Guarantee Obligation of any
guaranteeing person shall be deemed to be the lower of (a) an amount equal
to the stated or determinable amount of the primary obligation in respect of
which such Guarantee Obligation is made and (b) the maximum amount for
which such guaranteeing person may be liable pursuant to the terms of the 

 

64

 

instrument embodying such
Guarantee Obligation, unless such primary obligation and the maximum amount for
which such guaranteeing person may be liable are not stated or determinable, in
which case the amount of such Guarantee Obligation shall be such guaranteeing
person’s reasonably anticipated liability in respect thereof as determined by
Borrower in good faith.

 

“Indebtedness” as
applied to any Person, means, without duplication: (i) all indebtedness
for borrowed money; (ii) that portion of obligations with respect to
Capital Leases or other capitalized agreements that is properly classified as a
liability on a balance sheet in conformity with GAAP; (iii) notes payable
and drafts accepted representing extensions of credit whether or not
representing obligations for borrowed money; (iv) any obligation owed for
all or any part of the deferred purchase price of property or services, except
trade payables arising in the ordinary course of business not more than 90 days
past due; (v) all indebtedness secured by any Lien on any property or
asset owned or held by that Person regardless of whether the indebtedness
secured thereby shall have been assumed by that Person or is nonrecourse to the
credit of that Person, but only to the extent of the fair value of such
property or asset; (vi) fixed rate hedging obligations that are due (after
giving effect to any period of grace or notice requirement applicable thereto)
and remain unpaid; (viii) all obligations of such Person, contingent or
otherwise, as an account party or applicant under or in respect of acceptances,
letters of credit, surety bonds or similar arrangements (other than
reimbursement obligations, which are not due and payable on such date, in
respect of documentary letters of credit issued to provide for the payment of
goods and services in the ordinary course of business); (ix) obligations
under partnership, organizational or other agreements to fund capital
contributions or other equity calls with respect to any Person or investment,
or to redeem, repurchase or otherwise make payments in respect to capital stock
or other securities of such Person and (x) all Guarantee Obligations of
such Person in respect of obligations of the kind referred to in clauses (i) through
(ix) above.

 

“Interest Coverage Ratio”
means the ratio derived by dividing (i) EBITDA by (ii) total interest
expense (excluding (A) for the period from and including February 13,
2008 and through and including May 31, 2008, interest expense on
$30,000,000 of the Term Loan B, and (B) interest expense attributable to
Indebtedness repaid by the seller or otherwise in connection with either the
Everest Acquisition or any Permitted Acquisition, but including for the
applicable calculation period prior to the date of any such Permitted
Acquisition, pro forma interest expense on any Indebtedness incurred to finance
all or a portion of the purchase price for the Everest Acquisition or such
Permitted Acquisition based on the principal amount of such Indebtedness on the
date of the Everest Acquisition or such Permitted Acquisition and the rate of
interest thereon on such date), in each case for the then most recently
completed four fiscal quarters.

 

“Interest Rate Agreement”
means any interest rate swap, hedge, cap, collar or similar agreement or
arrangement designed to protect Borrower against fluctuations in interest
rates.

 

“Investment” means (i) any
direct or indirect purchase or other acquisition by Borrower or any of its
Subsidiaries of any beneficial interest in, including stock, partnership
interest or other equity securities of, any other Person, other than trade
associations and similar organizations purchased or acquired in the ordinary
course of business; and (ii) any direct or indirect loan, advance,
guarantee, assumption of liability or other obligation of liability, or capital
contribution by Borrower or any of its Subsidiaries to any other Person,
including all indebtedness and accounts receivable 

 

65

 

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.

 

“Issuing Lender”
means CoBank, or any other Lender designated from time to time by
Administrative Agent or Borrower (and subject to such Lender’s acceptance of
such designation), in such Lender’s capacity as an issuer of Letters of Credit
hereunder.

 

“Lead Arranger”
means CoBank in its capacity as Lead Arranger.

 

“Lender” or “Lenders” means one or more of the banks
or other financial institutions identified as Lenders in the first paragraph of
this Agreement and their successors and permitted assigns pursuant to Subsection 8.1.

 

“Letter of Credit Liability”
means, as to each Letter of Credit, all reimbursement obligations of Borrower
to Issuing Lender consisting of (a) the amount available to be drawn or
which may become available to be drawn; (b) all amounts which have been
paid and made available by Issuing Lender to the extent not reimbursed by
Borrower, whether by the making of a Revolving Loan or otherwise; and (c) all
accrued and unpaid interest, fees and expenses with respect thereto.  In the case of any Letter of Credit that is
issued in a currency other than United Stated Dollars, the corresponding Letter
of Credit Liability shall be determined in United States Dollars based on the
currency exchange rate from time to time applicable to the issuer of such
Letter of Credit.

 

“Leverage Ratio”
means, for any period, the ratio derived by dividing (i) all Indebtedness
as of the last day of the applicable period by (ii) EBITDA for the
then most recently completed four fiscal quarters.

 

“LIBOR” means the
rate (rounded upward to the nearest sixteenth and adjusted for reserves
required on Eurocurrency Liabilities (as defined in Regulation D as promulgated
by the Board of Governors of the Federal Reserve System, 12 CFR Part 204,
as amended) for banks subject to such Regulation D or required by any other
federal law or regulation) quoted by the British Bankers Association at 11:00 a.m.
London time two Banking Days before the commencement of the Interest Period for
the offering of U.S. dollar deposits in the London interbank market for the
Interest Period designated by Borrower, as published by Bloomberg or another
major information vendor listed on British Bankers Association’s official
website.

 

“LIBOR Loans” means
Loans (excluding Swingline Loans) accruing interest at rates determined by
reference to the LIBOR.

 

“LIBOR Margin”
means the applicable percent per annum determined in accordance with Subsection 1.2(B).

 

66

 

“Licenses” means
any material telephone, long distance, cellular telephone, microwave, personal
communications or other telecommunications or similar license, authorization,
waiver, certificate of compliance, franchise, approval or permit, whether for
the acquisition, construction or operation of any Telecommunications System,
granted or issued by the FCC or any applicable PUC and held by Borrower or any
of its Subsidiaries.

 

“Lien” means any
lien, mortgage, pledge, security interest, charge or encumbrance of any kind,
whether voluntary or involuntary (including any conditional sale or other title
retention agreement and any lease in the nature thereof), and any agreement to
give any lien, mortgage, pledge, security interest, charge or encumbrance.

 

“Loan” or “Loans” means an advance or advances
under the Term Loan Commitments, the Revolving Loan Commitment and the
Swingline Loan Commitment.

 

“Loan Commitment”
or “Loan Commitments”  mean, respectively, each of the Term Loan
Commitments, the Revolving Loan Commitment and the Swingline Loan Commitment
and collectively, the Term Loan Commitments, the Revolving Loan Commitment and
the Swingline Loan Commitment.

 

“Loan Documents”
means this Agreement, the Notes, any outstanding Letters of Credit, any Related
Interest Rate Agreement and all other instruments, documents and agreements
executed and delivered concurrently herewith or at any time hereafter to or for
the benefit of Administrative Agent in connection with the Loans and other
transactions contemplated by this Agreement, all as amended, supplemented or
modified from time to time.

 

“Material Adverse Effect”
means (i) a material adverse effect upon the business, operations,
properties, assets or condition (financial or otherwise) of Borrower and its
Subsidiaries, taken as a whole, or (ii) the material impairment of the
ability of Borrower or any of its Subsidiaries to perform its obligations under
any Loan Document to which it is a party or of Administrative Agent 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 $1,000,000 per annum, and (b) any
other contract or agreement, written or oral, of Borrower or any of its
Subsidiaries the failure to comply with which could reasonably be expected to
have a Material Adverse Effect; provided, however, that any (i) vendor
contract or (ii) contract or agreement which is terminable by a party
other than Borrower or any of its Subsidiaries without cause upon notice of 95
days or less shall not be considered a Material Contract.

 

“Multi-employer Plan”
means a Multi-employer plan as defined in Section 4001(a)(3) of ERISA
to which Borrower or any ERISA Affiliate makes, is making, made, or was at any
time during the current year or the immediately preceding 6 years obligated to
make contributions.

 

67

 

“Net Proceeds”
means cash proceeds received by Borrower or any of its Subsidiaries from any
Asset Disposition (including insurance proceeds, awards of condemnation, and
payments under notes or other debt securities received in connection with any
Asset Disposition), net of (i) the costs of such sale, lease, transfer or
other disposition (including taxes attributable to such sale, lease or
transfer) and (ii) amounts applied to repayment of Indebtedness (other
than the Obligations) secured by a Lien on the asset or property disposed.

 

“Note” or “Notes” means one or more of the Term
Loan Notes, the Revolving Notes and the Swingline Notes.

 

“Note Purchase Agreement”
means that certain Note Purchase Agreement, dated as of December 9, 1998,
between Borrower and the purchasers listed on Schedule A thereto, as
supplemented by that certain Supplement to Note Purchase Agreement, dated as of
March 13, 2003, between Borrower and the purchasers listed on Schedule A
thereto, and as further amended, supplemented, modified, extended or restated
from time to time.

 

“Obligations” means
all obligations, liabilities and indebtedness of every nature of Borrower from
time to time owed to Administrative Agent or any Lender (or an Affiliate of a
Lender party to a Related Interest Rate Agreement) under the Loan Documents
including the principal amount of all debts, claims and indebtedness, accrued
and unpaid interest, all reimbursement obligations in respect of any Letters of
Credit and all fees, costs and expenses thereunder, whether primary, secondary,
direct, contingent, fixed or otherwise, heretofore, now and/or from time to
time hereafter owing, due or payable whether before or after the filing of a
proceeding under the Bankruptcy Code by or against Borrower or any of its
Subsidiaries.

 

“PBGC” means the
Pension Benefit Guaranty Corporation or any Person succeeding to the functions
thereof.

 

“Pension Plan”
means a pension plan (as defined in Section 3(2) of ERISA) subject to
Title IV of ERISA which any Borrower or an ERISA Affiliate sponsors, maintains,
or to which it makes, is making, or is obligated to make contributions or, in
the case of a Multi-employer Plan, has made contributions at any time during
the current year or the immediately preceding six plan years.

 

“Permitted Encumbrances”
means the following:

 

(1)                                  Liens
for taxes, assessments or other governmental charges not yet due and payable
unless the same are being diligently contested in good faith and by appropriate
proceedings and then only if and to the extent that adequate reserves therefor
are maintained in accordance with GAAP;

 

(2)                                  statutory
Liens of landlords, carriers, warehousemen, mechanics, materialmen and other
similar liens imposed by law, which are incurred in the ordinary course of
business for sums not more than 90 days delinquent or which are being contested
in good faith; provided that a reserve or other appropriate provision
shall have been made therefor;

 

(3)                                  Liens
incurred or deposits made in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other types of social
security 

 

68

 

(other than any Lien imposed by the Employee
Retirement Income Security Act of 1974 or any rule or regulation
promulgated thereunder), or to secure the performance of tenders, statutory
obligations, surety, stay, customs and appeal bonds, bids, leases, government
contracts, trade contracts, performance and return of money bonds and other
similar obligations (exclusive of obligations for the payment of borrowed
money);

 

(4)                                  deposits,
in an aggregate amount not to exceed $1,000,000, made in the ordinary course of
business to secure liability to insurance carriers or others;

 

(5)                                  any
attachment or judgment Lien not constituting an Event of Default under Subsection 6.1(H);

 

(6)                                  easements,
rights of way, restrictions and other similar charges or encumbrances not
interfering in any material respect with the ordinary conduct of the business
of Borrower or any of its Subsidiaries;

 

(7)                                  Liens
in favor of CoBank as set forth in Subsection
2.7;

 

(8)                                  Liens
securing purchase money security agreements and capital leases permitted under Subsection 3.1(G), provided that such Liens
do not encumber any property other than the items purchased with the proceeds
of such Indebtedness or leased pursuant to such Indebtedness and such liens do
not secure any amounts other than amounts necessary to purchase or lease such
items; and

 

(9)                                  other Liens securing Priority Debt of
Borrower or any Subsidiary not otherwise permitted by this definition of
Permitted Encumbrances, provided that Priority Debt incurred after December 8,
1998 does not exceed (i) until the Indebtedness owing by Borrower
under the Note Purchase Agreement (and any debt securities issued thereunder)
is repaid in full, 15% of Consolidated Net Worth as of the most recently
completed fiscal quarter of Borrower and (ii) after the Indebtedness owing
by Borrower under the Note Purchase Agreement (and any debt securities issued
thereunder) is repaid in full, 10% of Consolidated Net Assets as of the most
recently completed fiscal quarter of Borrower.

 

“Person” means and
includes natural persons, corporations, limited liability companies, limited
partnerships, limited liability partnerships, general partnerships, joint stock
companies, joint ventures, associations, companies, trusts, banks, trust
companies, land trusts, business trusts or other organizations, whether or not
legal entities, and governments and agencies and political subdivisions thereof
and their respective permitted successors and assigns (or in the case of a
governmental person, the successor functional equivalent of such Person).

 

“Plan” means an
employee benefit plan (as defined in Section 3(3) of ERISA) which any
Borrower or an ERISA Affiliate sponsors or maintains or to which any Borrower
or an ERISA Affiliate makes, is making, or is obligated to make contributions
and includes any Pension Plan.

 

“Priority Debt”
means (without
duplication) the sum of (a) unsecured Indebtedness of the Subsidiaries
other than Indebtedness owing to Borrower or any other Subsidiary and (b) Indebtedness

 

69

 

of
Borrower and its Subsidiaries secured by a Lien described in clause (9) of
the definition of Permitted Encumbrances.

 

“Pro Rata Share”
means (i) with respect to matters relating to each Facility, the
percentage obtained by dividing (a) the commitment of a Lender under such
facility by (b)  the total commitment of all Lenders under such Facility
and (ii) with respect to all other matters, the percentage obtained by
dividing (a) the total commitments of a Lender under all of the Facilities
(b) the aggregate total commitments of all Lenders, in either case as such
percentage may be adjusted by assignments and participations permitted pursuant
to Subsection 8.1; provided, however,
if the commitment under a Facility 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 Facility, shall be based on the aggregate
amount of a Lender’s outstanding loans related to such Facility and the
aggregate amount of all outstanding loans related to such Facility.

 

“PUC” means any
state, provincial or other local regulatory agency or body that exercises
jurisdiction over the rates or services or the ownership, construction or
operation of any Telecommunications System or over Persons who own, construct
or operate a Telecommunications System, in each case by reason of the nature or
type of the business subject to regulation and not pursuant to laws and
regulations of general applicability to Persons conducting business in any such
jurisdiction.

 

“Related Interest Rate Agreement”
means any interest rate swap, hedge, cap, collar or similar agreement or
arrangement designed to protect Borrower against fluctuations in interest rates
and will also include any arrangement that Lenders, in their sole discretion,
may offer to Borrower to effectively fix the interest rate applicable to any
portions of the Loans.

 

“Reportable Event”
means any of the events set forth in Section 4043(c) of ERISA or the
regulations thereunder, other than any such event for which the 30 day notice
requirement under ERISA has been waived in regulations issued by the PBGC.

 

“Requisite Lenders”
means at least two Lenders (to the extent more than one Lender holds any Loan
Commitment) who have in the aggregate Pro Rata Shares greater than 50%; provided
that the Pro Rata Share of any Defaulting Lender shall be excluded for purposes
of making a determination of Requisite Lenders and for determining how many
Lenders hold any Loan Commitment.

 

“Restricted Investment”
means all Investments except (i) property to be used in the ordinary
course of business; (ii) current assets arising from the sale of goods and
services in the ordinary course of business; (iii) Investments in one or
more Subsidiaries or any Person that concurrently becomes a Subsidiary; (iv) Investments
existing on December 9, 1998; (v) Investments in obligations,
maturing within one year, issued by or guaranteed by the United States of
America or an agency thereof; (vi) Investments in municipal securities,
maturing within one year, which are rated in one of the top two ratings
classifications by at least one national rating agency; (vii) Investments
in certificates of deposit or banker’s acceptances issued by Bank of America or
other commercial banks which are rated in one of the top two rating
classifications by at least one national rating agency; (viii) Investments
in commercial paper, maturing within 270 days, rating in one of the top two
rating 

 

70

 

classifications by at least one national rating agency; and (ix) Investments
in money market instrument programs which are classified as current assets in
accordance with GAAP.

 

“Restricted Junior Payment”
means:  (i) any dividend or other
distribution, direct or indirect, on account of any equity interest in
Borrower, including any shares of any class of stock of Borrower now or
hereafter outstanding, except a dividend payable solely in shares of a class of
stock to the holders of that class; (ii) any redemption, conversion, exchange,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any equity interest in Borrower, including any
shares of any class of stock of Borrower now or hereafter outstanding; (iii) any
payment or prepayment of interest on, principal of, premium, if any,
redemption, conversion, exchange, purchase, retirement, defeasance, sinking
fund or similar payment with respect to, any Indebtedness subject to
subordination provisions for the benefit of Administrative Agent and Lenders unless
expressly permitted by such subordination provisions and Administrative Agent
and Requisite Lenders have consented in writing to such provisions; and (iv) any
payment made to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire any equity interest in Borrower,
including any shares of any class of stock of Borrower now or hereafter
outstanding.

 

“Revolving Loan” or
“Revolving Loans” means an
advance or advances under the Revolving Loan Commitment.

 

“Revolving Loan Commitment”
means, initially, $57,500,000, 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) May 1, 2012.

 

“Revolving Loan Facility”
means, the revolving loan credit facility extended to Borrower pursuant to Subsection 1.1(C).

 

“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.

 

“7-Day LIBOR Index Rate” means
the per annum rate (rounded upward to the nearest sixteenth and adjusted for
reserves required on Eurocurrency Liabilities (as defined in Regulation D as
promulgated by the Board of Governors of the Federal Reserve System, 12 CFR Part 204,
as amended) for banks subject to such Regulation D or required by any other
federal law or regulation) quoted by the British Bankers Association at 11:00 a.m.
London time for the
offering of seven (7)-day U.S. dollar deposits, as published by Bloomberg or
another major information vendor listed on the British Banker Association’s
official website on the first Banking Day in each week, with such rate to
change weekly on such day.  The
rate shall be reset automatically, without the necessity of notice being
provided to the Borrower or any other party, on the first Banking Day of each
succeeding week, and each change in the rate shall be applicable to all
balances subject to this option.

 

71

 

“Subsidiary” means,
with respect to any Person, any corporation, partnership, association or other
business entity of which more than fifty percent (50%) of the total voting
power of shares of stock (or equivalent ownership or controlling interest)
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof.

 

“Swingline Facility”
means the working capital loan facility extended to Borrower pursuant to Subsection 1.1(D).

 

“Swingline Lender”
means CoBank, and its successors and permitted assigns under the Swingline Loan
Commitment pursuant to Subsection  8.1.

 

“Swingline Loan Commitment”
means, initially $2,500,000, as such amount is reduced from time to time as
provided in this Agreement.

 

“Swingline 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) May 1, 2012.

 

“Swingline Loans”
means an advance or advances under the Swingline Loan Commitment.

 

“Swingline Note” or “Swingline Notes” means one or more
of the Notes of Borrower substantially in the form of Exhibit 10.1(E),
or any combination thereof, and any replacements, reinstatements, renewals or
extension of any such notes, in whole or in part.

 

“Telecommunications System”
means a telephone, long distance, internet, data services, video and satellite
services, wireless telecommunications, telephone directories, fiber and cable
leasing, telecommunications equipment, including hand sets, rental, leasing,
installation, selling or maintenance system or business and shall include a
microwave system or a paging system operated in connection with (and in the
same general service area as) any of the foregoing systems, and businesses
related thereto.

 

“Term Loan A “ means the Loan under the
Term Loan A Commitment.

 

“Term Loan A Commitment”
means $120,000,000, as such amount is reduced from time to time as provided in
this Agreement.

 

“Term Loan A Facility”
means the term loan credit facility extended to Borrower pursuant to Subsection 1.1(A).

 

“Term Loan A Maturity Date”
means the earlier of (i) the acceleration of the Obligations pursuant to Subsection 6.3 or (ii) May 1, 2012.

 

“Term Loan A Note”
or “Term Loan A Notes”
means one or more of the notes of Borrower substantially in the form of Exhibit 10.1(C),
or any combination thereof, and any replacements, restatements, renewals or
extensions of any such notes, in whole or in part.

 

72

 

“Term Loan B “ means the Loan under the
Term Loan B Commitment.

 

“Term Loan B Commitment”
means $30,000,000, reflecting reductions in this commitment to the Amendment
Date, as it may be further reduced from time to time as provided in this
Agreement.

 

“Term Loan B Facility”
means the term loan credit facility extended to Borrower pursuant to Subsection 1.1(B).

 

“Term Loan B Maturity Date”
means the earlier of (i) the acceleration of the Obligations pursuant to Subsection 6.3 or (ii) May 1, 2012.

 

“Term Loan B Note”
or “Term Loan B Notes”
means one or more of the notes of Borrower substantially in the form of Exhibit 10.1(D),
or any combination thereof, and any replacements, restatements, renewals or
extensions of any such notes, in whole or in part.

 

“Term Loan Commitments” means the
Term Loan A Commitment and the Term Loan B Commitment.

 

“Term Loan
Facilities” means the Term Loan A Facility and the Term Loan B
Facility.

 

“Term Loan
Maturity Date” means the Term Loan A Maturity Date and the Term
Loan B Maturity Date, as applicable to the respective Term Loan Facility.

 

“Term Loan Note” or “Term Loan Notes” means, collectively, the Term Loan A
Notes and the Term Loan B Notes.

 

“Term Loans”
means the Term Loan A and the Term Loan B.

 

“Wireless Sale”
means the Borrower’s sale of substantially all of its wireless business assets
to Cellco Partnership, a Delaware general partnership doing business as Verizon
Wireless (“Verizon”), pursuant to that
certain Asset Purchase Agreement dated January 18, 2008 among SureWest
Wireless, West Coast PCS LLC, Verizon and Borrower.

 

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 

 

73

 

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.

 

74

 

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

 

	
   

  	
  SUREWEST
  COMMUNICATIONS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Steven C. Oldham

  
	
   

  	
   

  	
  Steven C. Oldham

  
	
   

  	
   

  	
  President and
  Chief Executive Officer

  

 

 

[Signatures
Continued on Following Page]

 

 

[Signatures
Continued from Previous Page]

 

 

	
   

  	
   

  	
  COBANK,
  ACB  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   /s/ Ted Koerner 

  
	
   

  	
   

  	
   

  	
  Ted Koerner 

  
	
   

  	
   

  	
   

  	
  Managing
  Director

  

 

 

SCHEDULE 3.7

 

TRANSACTIONS WITH AFFILIATES

 

None

 

 

SCHEDULE
5.3(A)

 

JURISDICTION
OF ORGANIZATION

 

	
  SureWest Communications

  	
   

  	
  California

  
	
   

  	
   

  	
   

  
	
  Roseville Alternative
  Company

  	
   

  	
  California

  
	
   

  	
   

  	
   

  
	
  RTC Communications
  Corp.

  	
   

  	
  California

  
	
   

  	
   

  	
   

  
	
  SureWest Broadband

  	
   

  	
  California

  
	
   

  	
   

  	
   

  
	
  SureWest Custom Data
  Services

  	
   

  	
  California

  
	
   

  	
   

  	
   

  
	
  SureWest Internet

  	
   

  	
  California

  
	
   

  	
   

  	
   

  
	
  SureWest Long Distance
  Company

  	
   

  	
  California

  
	
   

  	
   

  	
   

  
	
  SureWest Telephone

  	
   

  	
  California

  
	
   

  	
   

  	
   

  
	
  SureWest TeleVideo

  	
   

  	
  California

  
	
   

  	
   

  	
   

  
	
  SureWest TeleVideo of
  Roseville

  	
   

  	
  California

  
	
   

  	
   

  	
   

  
	
  SureWest Wireless

  	
   

  	
  California

  
	
   

  	
   

  	
   

  
	
  West Coast PCS LLC

  	
   

  	
  California

  
	
   

  	
   

  	
   

  
	
  West Coast PCS
  Structures

  	
   

  	
  California

  
	
   

  	
   

  	
   

  
	
  PCS Structures
  Towers, Inc.

  	
   

  	
  California

  
	
   

  	
   

  	
   

  
	
  Everest
  Broadband, Inc.

  	
   

  	
  Delaware

  
	
   

  	
   

  	
   

  
	
  Everest Connections
  Holdings, Inc.

  	
   

  	
  Delaware

  
	
   

  	
   

  	
   

  
	
  Everest Holdings I, LLC

  	
   

  	
  Delaware

  
	
   

  	
   

  	
   

  
	
  Everest Connections,
  LLC

  	
   

  	
  Delaware

  
	
   

  	
   

  	
   

  
	
  Everest Holdings III,
  LLC

  	
   

  	
  Delaware

  
	
   

  	
   

  	
   

  
	
  Everest Midwest, LLC

  	
   

  	
  Delaware

  
	
   

  	
   

  	
   

  
	
  Everest I
  Leasing & Financing, LLC

  	
   

  	
  Delaware

  
	
   

  	
   

  	
   

  
	
  Everest Midwest
  Properties, LLC

  	
   

  	
  Delaware

  

 

 

	
  Everest Midwest
  License, LLC

  	
   

  	
  Delaware

  

 

 

SCHEDULE
5.3(C)

 

QUALIFICATION
TO TRANSACT BUSINESS

 

California

 

Delaware

 

Missouri

 

Kansas

 

 

SCHEDULE
5.4

 

GOVERNMENTAL
APPROVALS

 

None

 

 

SCHEDULE
5.6

 

TAX
RETURNS AND PAYMENTS

 

None

 

 

SCHEDULE
5.8

 

FINANCIAL
STATEMENTS

 

None.

 

 

SCHEDULE
5.10

LITIGATION,
INVESTIGATIONS, AUDITS, ETC.

 

Borrower reported
in its most recent Form 10Q for the six months ended June 30, 2008
that it is subject to certain legal proceedings, Internal Revenue Service
examinations and other income tax exposures, and other claims arising in the
ordinary course of business. The ultimate outcome of these matters will not
materially affect the consolidated financial position, results of operations or
cash flows of the Borrower.

 

Borrower is also
subject to a number of regulatory proceedings occuring at the federal and state
levels including but not limited to competition, interconnection access
charges, broadband deployment and universal service reform.  The outcomes and impact on the Borrower’s
operations of these proceedings and related court matters cannot be determined
at this time.

 

With respect to
certain regulatory matters Borrower reported in Item 3 of its 2007 Annual
Report on Form 10-K, specifically KCC Docket No. 08-EVMC-049-KSF,
Kansas Universal Service Fund Audit for March 1, 2006 through February 28,
2007 — Everest Midwest, LLC – Everest Connections Holdings, Inc Solix conducted
an audit April 17, 2008 and reported no findings.  The State Corporation Commission of the State
of Kansas issued an order adopting the audit report and closed the docket on May 5,
2008

 

With respect to the Acacia Media allegations of 2003
regarding patent infringements held by Acacia. 
Borrower considers this matter concluded with no material impacts to the
Company.

 

 

SCHEDULE 5.11

 

EMPLOYEE
LABOR MATTERS

 

None

 

 

EXHIBIT
1.3

 

FORM OF

NOTICE OF
BORROWING/CONVERSION/CONTINUATION

 

CoBank, ACB

5500 S. Quebec
Street

Greenwood Village,
Colorado 80111

Attention:

 

Ladies and
Gentlemen:

 

Pursuant to the Third Amended and Restated Credit Agreement, dated as
of September 19, 2008 (as such loan agreement may hereafter be amended,
modified or supplemented, the “Credit
Agreement”) by and among SureWest Communications (“Borrower”) and CoBank, ACB, as
Administrative Agent (“Administrative Agent”),
Issuing Lender and Lender, and the other Lenders referred to therein, Borrower
hereby requests that Administrative Agent take the actions indicated
below.  Capitalized terms used but not
defined herein have the meanings given to them in the Credit Agreement.

 

Note:  The following requirements apply to all
requests:

 

·              Requests must be
made no later than 11:00 a.m. (Denver, Colorado time) on a Business Day
(however, if requesting a borrowing of a Swingline Loan, not later than 2:00 p.m.
(Denver, Colorado time) on the date the proposed borrowing is to be effective).

 

·              In the case of a
borrowing of or conversion to or continuation of the Base Rate Loan, requests
must be made at least one Business Day in advance of the proposed borrowing,
conversion or continuation date.

 

·              In the case of a borrowing
of or conversion to or continuation of a LIBOR Loan, requests must be made at
least three Banking Days in advance of the proposed borrowing, conversion or
continuation date.

 

·              Borrowings under the
Base Rate Loan must be in a minimum amount of $100,000 and whole multiples of
$5,000 in excess of $100,000.

 

·              LIBOR Loans must be
in a minimum amount of $500,000 and whole multiples of $100,000 in excess of
$500,000.

 

 

·              Borrowings under the
Swingline Facility must be in a minimum amount of $50,000 and whole multiples
of $5,000 in excess of $50,000.

 

·              No more than a
combined total of ten LIBOR Loans under the Facilities may be outstanding at
any one time.

 

                REQUEST FOR BORROWING:

 

Borrower hereby requests an advance under the
                  
[Term Loan A/Term Loan B/Revolving
Loan/Swingline] Facility.  In
connection with such request under the Revolving Loan Facility, Borrower hereby
certifies as follows:

 

(a)           The
Revolving Loan Commitment as
reduced pursuant to the Credit Agreement is
$                                    ;
and

 

(b)           The
aggregate principal balance of Revolving
Loans outstanding (not including this requested Loan) is
$                          ;
and

 

(c)           The aggregate amount of the outstanding
Letter of Credit Liability is $                          ;
and

 

(d)           Therefore,
the Available Revolving Loan
Commitment is
$                              .  [(a) minus (b) and
also minus (c))].

 

In connection with such request under the Swingline Loan Facility,
Borrower hereby certifies as follows:

 

(a)           The
Swingline Loan Commitment as reduced pursuant to the Credit Agreement is
$                                    ;
and

 

(b)           The
aggregate principal balance of Swingline
Loans outstanding (not including
this requested Loan) is
$                          ;
and

 

(c)           Therefore,
the available Swingline Loan Commitment is
$                              .  [(a) minus
(b))]].

 

Borrower hereby requests under the
                  
[Term Loan A/Term Loan B/Revolving
Loan/Swingline] Facility an advance of $                                          ,
to be made on                         
and to bear interest pursuant to the interest rate option(s) checked below
[check all applicable]:

 

 

o            A portion of the Base
Rate Loan in the principal amount of $

 

o            A LIBOR Loan in the
principal amount of
$                        ,
for an Interest Period of [check one]:

 

o 1 month         o 2
months           o 3
months         o 6
months         o 9
months         o 12
months

 

o          If
a Swingline Loan, at the 7-Day LIBOR Index Rate

 

                REQUEST FOR CONVERSION:

 

Borrower hereby requests that the following Loan(s) be converted
to new interest rate option(s) as indicated:

 

Description of Loan(s) to be Converted
[check one]:

 

o                                   On
                  ,
convert
$                                
of the [Base/Fixed] Rate Loan under the
                  
[Term Loan A/Term Loan B/Revolving Loan] Facility

 

o                                   On
                    ,
convert the LIBOR Loan under the
                  
[Term Loan A/Term Loan B/Revolving Loan] Facility
in the principal amount of $                              ,
the Interest Period for which expires on:

 

Description of New Loan(s) [check all applicable]:

 

o            to the Base Rate Loan
in the principal amount of $

 

o            to a LIBOR Loan in the
principal amount of
$                                      ,
for an Interest Period of [check one]:

 

o 1 month         o 2
months           o 3
months         o 6
months         o 9
months         o 12
months

 

                REQUEST FOR
CONTINUATION:

 

Borrower hereby requests that the interest rate option(s) applicable
to the following loan(s) be continued as indicated:

 

Upon expiration of its current Interest Period, continue the LIBOR Loan
under the
                  
[Term Loan A/Term Loan B/Revolving Loan] Facility
in the principal amount of
$                        ,
the current Interest Period for which expires on
              
for a new Interest Period of:

 

o 1 month         o 2
months           o 3
months             o 6
months           o 9
months             o 12
months

 

 

The undersigned hereby certifies that both before and after giving
effect to the borrowing, conversion or continuation request above, (i) all
of the representations and warranties contained in the Credit Agreement and the
other Loan Documents, are true and correct in all material respects as of the
date hereof to the same extent as though made on and as of the date hereof,
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 to the
Credit Agreement as a result of any disclosures made in writing by Borrower to
Administrative Agent after the Amendment Date so long as what is being
disclosed does not give rise to a Default or an Event of Default, (ii) no
Default or Event of Default has occurred and is continuing or would result on
the date hereof, (iii) since December 31, 2007, there has not occurred
any event or condition that has had or could reasonably be expected to have a
Material Adverse Effect, (iv) the undersigned is authorized to execute and
deliver this Notice on behalf of Borrower, and (v) the Loan Documents
remain in full force and effect as to Borrower.

 

 

	
   

  	
  SUREWEST
  COMMUNICATIONS

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  Date:

  	
   

  
						

 

 

EXHIBIT
4.4(C)

 

FORM OF

COMPLIANCE
CERTIFICATE

 

THIS COMPLIANCE CERTIFICATE is
given by
                                    
and                                     ,
the [chief financial officer] of SUREWEST COMMUNICATIONS (“Borrower”) pursuant to Subsection 4.4(C) of that
certain Third Amended and Restated Credit Agreement, dated as of September 19,
2008 (as such agreement may hereafter be amended, modified or supplemented, the
“Credit Agreement”), among
Borrower and CoBank, ACB, as Administrative Agent (“Administrative
Agent”), Lead Arranger, Issuing Lender and Lender, and the other
Lenders referred to therein.  Capitalized
terms used herein and not otherwise defined herein shall have the meanings
ascribed to them in the Credit Agreement.

 

I hereby certify as follows:

 

1.             I am the [chief financial officer] of Borrower, and as such possess
the knowledge and authority to certify to the matters set forth in this
Compliance Certificate, and hereby certify that the matters set forth below are
true and accurate to the best of my present knowledge, information and belief
after due inquiry;

 

2.             Attached hereto as Annex
A are the [audited/unaudited] [annual/quarterly]
financial statements of Borrower, for the fiscal [year/quarter]
ended
                            ,
as required by Subsection 4.4[(A)/(B)] of
the Credit Agreement.  Such financial
statements were prepared in accordance with GAAP consistently applied (except
as expressly provided in the Credit Agreement), fairly present the condition of
Borrower during the periods covered thereby and as of the dates thereof, and
are in a format that demonstrates any accounting or formatting changes that may
be required by various jurisdictions in which the business of Borrower is
conducted (to the extent not inconsistent with GAAP);

 

3.             As of the date of
such financial statements, Borrower is in compliance with the covenants set
forth in Section 4 of the Credit Agreement, except
as disclosed on Annex B hereto.  Attached
hereto as Annex B are calculations which demonstrate the extent of
compliance by Borrower with such covenants; and

 

4.             I have reviewed the
activities of Borrower, and consulted with appropriate representatives of
Borrower during the fiscal [year/quarter]
ended
                            ,
and reviewed the Credit Agreement and the other Loan Documents.  As of the date of this Compliance
Certificate, there is no condition, event or act which constitutes a Default or
an Event of Default under the Credit Agreement, except as disclosed on Annex C
hereto.

 

 

IN WITNESS WHEREOF, I have
executed this Compliance Certificate as of
                          ,
          .

 

 

	
   

  	
   

  
	
   

  	
  [CHIEF FINANCIAL OFFICER]

  
	
   

  	
  SUREWEST COMMUNICATIONS

  

 

 

ANNEX A

 

Annual (audited)
or Quarterly (unaudited)

Financial
Statements

 

 

ANNEX B

 

Financial Covenant
Compliance Worksheet

 

 

COVENANT 4.1

 

Leverage
Ratio

 

As of the fiscal
year/quarter ended
                            ,
                    .

 

	
  (A)

  	
  Indebtedness

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  
	
  (B)

  	
  EBITDA (the sum
  of 1 through 8, without duplication; calculated for the then most recently
  completed four fiscal quarters)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  Net income or
  deficit (excluding extraordinary gains, the write up of any asset or gain and
  excluding any extraordinary, non-cash losses, the write down of any asset and
  loss realized upon sale of any asset), plus

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.

  	
  Total interest
  expense (including non-cash interest), plus

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.

  	
  Depreciation and
  amortization expense, plus

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.

  	
  Income and
  franchise taxes, federal, state or local

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.

  	
  non-recurring fees
  and expenses incurred in connection with any investment, disposition or
  acquisition permitted by this Agreement or any issuance of equity interests
  or incurrence or early extinguishment of Indebtedness, or refinancing
  transactions or other modification of any debt instrument, in each case
  permitted herein

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.

  	
  non-cash
  compensation charges, including any such charges resulting from stock
  options, stock appreciation rights, restricted stock grants or other equity
  incentive programs

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.

  	
  to the extent
  actually reimbursed, expenses incurred to the extent covered by
  indemnification provisions in any agreement in connection with Permitted
  Acquisitions, and

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.

  	
  purchase
  accounting adjustments in connection with Permitted Acquisitions

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Sum of 1 through
  8

  	
   

  	
  $

  

 

 

	
  Leverage
  Ratio = (A) ÷ (B)

  	
   

  	
  =

  	
  :1.0

  

 

	
  Required Ratio:

  	
  Not
  more than 3.75:1.0

  

 

Compliance:                  o    Yes                   o    No

 

 

COVENANT 4.2

 

Interest
Coverage Ratio

 

As of the fiscal
quarter/year ended
                                        ,
                        .

 

(Calculated for
the then most recently completed four fiscal quarters)

 

	
  (A)

  	
  EBITDA

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (B)

  	
  Total interest
  expense (excluding, for the period from and including February 13, 2008
  and through and including May 31, 2008, interest expense on $30,000,000
  of the Term Loan B)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Interest
  Coverage Ratio = (A) ÷ (B)

  	
   

  	
  =

  	
  :1.0

  

 

	
  Required Ratio:

  	
  Not less than
  3.0:1.0

  

 

Compliance:                  o    Yes                   o    No

 

 

COVENANT 4.3

 

Adjusted
Consolidated Net Worth

 

As of the fiscal
quarter/year ended
                    ,
                        .

 

	
  (A)

  	
  Consolidated Net
  Worth

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (B)

  	
  Greater of (i) $0
  or (ii) the result of (a) Restricted Investments incurred after December 9,
  1998 minus (b) 10% of Consolidated Net Worth

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Adjusted
  Consolidated Net Worth = (A) - (B)

  	
   

  	
  =$

  	
   

  

 

	
  Required Amount:

  	
  Not less than
  $160,000,000

  

 

 

Compliance:                  o    Yes                   o    No

 

 

EXHIBIT 10.1(A)

 

FORM OF ASSIGNMENT AND
ASSUMPTION

 

THIS ASSIGNMENT AND ASSUMPTION is dated as of
                          ,
20
                                                 
between
                                      
(the “Assignor”)
and                                     
(the “Assignee”).

 

Reference is made to the Third Amended and Restated
Credit Agreement, dated as of September 19, 2008 (as such credit agreement
may hereafter be amended, modified, supplemented, extended or restated, the “Credit Agreement”), among SureWest
Communications (“Borrower”),
CoBank, ACB, as Administrative Agent (“Administrative
Agent”), Lead Arranger, Issuing Lender and a Lender, and the
other Lenders referred to therein. 
Capitalized terms used herein and not otherwise defined herein are used
herein as defined in the Credit Agreement.

 

The Assignor and
the Assignee hereby agree as follows:

 

1.               The Assignor hereby
sells and assigns to the Assignee, and the Assignee hereby purchases and
assumes from the Assignor, [all of] [an interest in] the Assignor’s rights and
obligations under the Credit Agreement equal to the Pro Rata Share of [the
Revolving Loan Facility,] [the Term Loan A Facility] [and] [the Term Loan B
Facility] specified on Section 1 of Schedule I  hereto.  The [Revolving Loan Commitment,] [Term Loan A
Commitment] [and] [Term Loan B Commitment] and principal amount of the Loans
assigned to the Assignee are set forth in Section 1 of such Schedule I and the [Revolving Loan Commitment,] [Term
Loan A Commitment] [and] [Term Loan B Commitment] and principal amount of the
Loans retained by the Assignor after giving effect to such sale and assignment
are set forth in Section 2
of such Schedule I.

 

2.               The Assignor (a) represents
and warrants that it is the legal and beneficial owner of the interest being
assigned by it hereunder and that such interest is free and clear of any
adverse claim, (b) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations made
in or in connection with the Credit Agreement or any other Loan Document or any
other instrument or document furnished pursuant thereto or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
Credit Agreement or any other Loan Document or any other instrument or document
furnished pursuant thereto, and (c) makes no representation or warranty
and assumes no responsibility with respect to the financial condition of the
Borrower and any Loan Party or the performance or observance by the Borrower
and any Loan Party of any of its obligations under the Credit Agreement or any
other Loan Document or any other instrument or document furnished pursuant
thereto [and (d) attaches the Note[s] held by the Assignor and requests that
the Administrative Agent exchange such Note[s] for [a] new Note[s] in
accordance with Section 9.2 of the Credit Agreement.]

 

3.               The Assignee (a) agrees
that it will, independently and without reliance upon Administrative Agent, the
Assignor 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 decisions
in taking or not taking action under the Credit Agreement, (b) appoints
and authorizes Administrative Agent to take 

 

 

such action as agent on its behalf and to exercise
such powers under the Credit Agreement and the other Loan Documents as are
delegated to Administrative Agent by the terms thereof, together with such
powers as are reasonably incidental thereto, (c) agrees that it will perform in
accordance with their terms all of the obligations that, by the terms of the
Credit Agreement, are required to be performed by it as a Lender, (d)
represents and warrants that it is an Eligible Assignee, and (e) confirms it
has received such documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into this Assignment and
Assumption.

 

4.               Following the
execution of this Assignment and Assumption by the Assignor and the Assignee, it
will be delivered to Administrative Agent for acceptance and recording by
Administrative Agent. The effective date of this Assignment and Assumption
shall be the effective date specified in Section 3  of Schedule I hereto (the “Effective Date”).

 

5.               Upon such
acceptance and recording by Administrative Agent, then, as of the Effective
Date, (a) the Assignee shall be a party to the Credit Agreement and, to
the extent provided in this Assignment and Assumption, have the rights and
obligations under the Credit Agreement of a Lender and (b) the Assignor
shall, to the extent provided in this Assignment and Assumption, relinquish its
rights (except those surviving the payment in full of the Obligations) and be
released from its obligations under the Loan Documents other than those
relating to events or circumstances occurring prior to the Effective Date.

 

6.               Upon such
acceptance and recording by Administrative Agent, from and after the Effective
Date, Administrative Agent shall make all payments under the Loan Documents in
respect of the interest assigned hereby (a) to the Assignee, in the case
of amounts accrued with respect to any period on or after the Effective Date,
and (b) to the Assignor, in the case of amounts accrued with respect to
any period prior to the Effective Date.

 

7.               This Assignment and
Assumption shall be governed by, and be construed and interpreted in accordance
with, the law of the State of Colorado.

 

8.               This Assignment and
Assumption may be executed in any number of counterparts and by different
parties on separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute but
one and the same agreement.  Delivery of
an executed counterpart of this Assignment and Assumption by telecopier shall
be effective as delivery of a manually executed counterpart of this Assignment
and Assumption.  Delivery of an executed
counterpart hereof by telecopy shall be effective as delivery of a manually executed
counterpart.

 

[SIGNATURE PAGES FOLLOW]

 

 

IN
WITNESS WHEREOF, the parties hereto have caused this
Assignment and Assumption to be executed by their respective officers thereunto
duly authorized, as of the date first above written.

 

	
   

  	
   

  	
  ,

  
	
   

  	
  as Assignor

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Notice Address:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attn:

  	
   

  
	
   

  	
  Telephone:

  	
   

  	 

	
   

  	
  Fax:

  	
   

  
	
   

  	
  Email:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  ,

  
	
   

  	
  as Assignee

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
  Notice Address:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attn:

  	
   

  
	
   

  	
  Telephone:

  	
   

  
	
   

  	
  Fax:

  	
   

  
	
   

  	
  Email:

  	
   

  
														

 

 

ACCEPTED
AND AGREED

this
             day of
                            ,
20      :

 

COBANK,
ACB,

as Administrative Agent

 

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

SUREWEST
COMMUNICATIONS,

as Borrower

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
  Notice Address:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
				

 

 

SCHEDULE I

TO

ASSIGNMENT AND ACCEPTANCE

 

SECTION 1.

 

	
  Pro Rata Share
  assigned to the Assignee:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Revolving Loan
  Facility

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Term Loan A
  Facility

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Term Loan B
  Facility

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Revolving Loan
  Commitment assigned to the Assignee:

  	
   

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  
	
  Term Loan A
  Commitment assigned to the Assignee:

  	
   

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  
	
  Term Loan B
  Commitment assigned to the Assignee:

  	
   

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  
	
  Aggregate
  Outstanding Principal Amount of Revolving Loans assigned to the Assignee:

  	
   

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  
	
  Aggregate
  Outstanding Principal Amount of Term Loan A Loans Assigned to the Assignee:

  	
   

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  
	
  Aggregate
  Outstanding Principal Amount of Term Loan B Loans Assigned to the Assignee:

  	
   

  	
   

  	
  $

  

 

SECTION 2.

 

	
  Pro Rata Share
  retained by the Assignor:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Revolving Loan
  Facility

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Term Loan A
  Facility

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Term Loan B
  Facility

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Revolving Loan
  Commitment retained by the Assignor:

  	
   

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  
	
  Term Loan A
  Commitment retained by the Assignor:

  	
   

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  
	
  Term Loan B
  Commitment retained by the Assignor:

  	
   

  	
   

  	
  $

  

 

 

	
  Aggregate
  Outstanding Principal Amount of Revolving

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Loan s retained
  by the Assignor:

  	
   

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  
	
  Aggregate
  Outstanding Principal Amount of Term Loan A Loans retained by the Assignor:

  	
   

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  
	
  Aggregate
  Outstanding Principal Amount of Term Loan B Loans retained by the Assignor:

  	
   

  	
   

  	
  $

  

 

SECTION 3.

 

	
  Effective Date:

  	
   

  	
   

  	
  , 20                      

  

 

 

EXHIBIT 10.1(B)

 

FORM OF

AMENDED AND RESTATED
REVOLVING NOTE

 

SUREWEST COMMUNICATIONS

 

	
  [$                                    ]

  	
   

  	
                          ,
  20             

  

 

FOR VALUE RECEIVED,
the undersigned (“Borrower”),
hereby unconditionally promises to pay to                     
(“Lender”) in lawful money
of the United States of America and in immediately available funds, the
principal sum of [                                  
UNITED STATES DOLLARS (US $                    )],
or if less, the aggregate unpaid principal amount of all advances made to
Borrower by Lender pursuant to Subsection 1.1(C) of the Credit Agreement
described below, at such times and in the manner specified therein.

 

This Revolving Note is payable on the dates and in the
amounts set forth in the Credit Agreement described below.  This Revolving Note may be prepaid in whole
or in part at any time subject to the terms of the Credit Agreement described
below.

 

This
Revolving Note is one of the Notes referred to in, was executed and delivered
pursuant to, evidences indebtedness of Borrower incurred under, and is subject
to all terms and conditions of, that certain Third Amended and Restated Credit
Agreement, dated as September 19, 2008 (as such credit agreement may
hereafter be amended, modified, supplemented, extended or restated, the “Credit Agreement”), among Borrower,
CoBank, ACB, as Administrative Agent (“Administrative
Agent”), Lead Arranger, Issuing Lender and a Lender, and the
other Lenders referred to therein, to which reference is hereby made for a
statement of, among other things, the terms and conditions under which the
indebtedness evidenced hereby was made and is to be repaid and for a statement
of Lender’s remedies upon the occurrence of an Event of Default, including
without limitation, the remedy of acceleration. 
Capitalized terms used herein but not otherwise specifically defined
shall have the meanings ascribed to such terms in the Credit Agreement.

 

This
Revolving Note is given in substitution for and supersedes and replaces a previously
issued Revolving Note (the “Original Note”).
This Revolving Note is not delivered in extinguishment of the indebtedness
evidenced by the Original Note and does not constitute a novation of the
Original Note, but is made to evidence indebtedness outstanding under the
Original Note as of the date of this Revolving Note and any additional
indebtedness under Revolving Loan Commitment incurred or to be incurred by
Borrower under the Credit Agreement.

 

Borrower unconditionally promises to pay interest on
the outstanding unpaid principal amount hereof from the date hereof until
payment in full at the rates from time to time applicable to the Revolving
Loans as determined in accordance with the Credit Agreement; provided, however,
that upon the occurrence and during the continuance of an Event of Default,
Borrower promises to pay interest on the outstanding principal balance of this
Revolving Note at the rate of interest applicable following the occurrence of
an Event of Default as determined in accordance with the Credit Agreement.

 

 

Interest on this Revolving Note shall be payable, at
the times and from the dates specified in the Credit Agreement for the
Revolving Loans, on the date of any prepayment hereof, at maturity, whether due
by acceleration or otherwise, and as otherwise provided in the Credit
Agreement. From and after the date when the principal balance hereof becomes
due and payable, whether by acceleration or otherwise, interest hereon shall be
payable on demand, subject to any grace or cure period set forth in the Credit
Agreement.  In no contingency or event
whatsoever shall interest charged hereunder, however such interest may be
characterized or computed, exceed the highest rate permissible under any law
which a court of competent jurisdiction shall, in a final determination, deem
applicable hereto.  In the event that
such a court determines that Lender has received interest hereunder in excess
of the highest rate applicable hereto, such excess shall be applied in
accordance with the terms of the Credit Agreement.

 

Except for any notices expressly required by the Loan
Documents and as otherwise required by applicable law, Borrower hereby waives
demand, presentment and protest and notice of demand, presentment, protest and
nonpayment.

 

Borrower further agrees, subject only to any
limitation imposed by applicable law or the Loan Documents, to pay all
expenses, including reasonable attorneys’ fees and legal expenses, incurred by
Lender in endeavoring to collect any amounts payable hereunder which are not
paid when due, whether by acceleration or otherwise.

 

The transfer, sale or assignment of any rights under
or interest in this Revolving Note is subject to certain restrictions contained
in the Credit Agreement, including Subsection
8.1 thereof.

 

THIS REVOLVING NOTE SHALL BE
GOVERNED BY, AND INTERPRETED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS
(AS OPPOSED TO CONFLICTS OF LAW PROVISIONS THAT REQUIRE OR PERMIT APPLICATION
OF THE LAWS OF ANY OTHER STATE OR JURISDICTION) AND DECISIONS OF THE STATE OF
COLORADO.  Whenever
possible each provision of this Revolving Note shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Revolving Note shall be prohibited by or invalid under applicable law,
such provision shall be ineffective to the extent of such prohibition or
invalidity in such jurisdiction, without invalidating the remainder of such
provision or the remaining provisions of this Revolving Note or the
effectiveness and validity of such prohibited or invalid provision in any other
jurisdiction.  Whenever in this Revolving
Note reference is made to Lender or Borrower, such reference shall be deemed to
include, as applicable, a reference to their respective permitted successors
and assigns and in the case of Lender, any financial institution to which it
has sold or assigned all or any part of its interest in the Revolving Loans or
in its commitment to make the Revolving Loans as permitted by the Credit
Agreement.  The provisions of this Revolving
Note shall be binding upon and shall inure to the benefit of such permitted
successors and assigns. Borrower’s respective successors and assigns shall
include, without limitation, a receiver, trustee or debtor in possession of or
for Borrower.

 

 

IN
WITNESS WHEREOF, Borrower has caused this note to be executed
and delivered, by its duly authorized officer, on the date first shown above.

 

 

	
   

  	
  SUREWEST COMMUNICATIONS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
				

 

 

EXHIBIT 10.1(C)

 

FORM OF

THIRD AMENDED AND
RESTATED TERM LOAN A NOTE

 

SUREWEST COMMUNICATIONS

 

	
  $                                    

  	
   

  	
                            ,
  20

  

 

FOR VALUE RECEIVED,
the undersigned (“Borrower”),
hereby unconditionally promises to pay to
                    
(“Lender”) in lawful money
of the United States of America and in immediately available funds, the
principal sum of [                        
UNITED STATES DOLLARS (US
$                    )],
or if less, the aggregate unpaid principal amount of all advances made to
Borrower by Lender pursuant to Subsection 1.1(A) of the Credit Agreement
described below, at such times and in the manner specified therein.

 

This Term Loan A Note is payable in installments on
the dates and in the amounts set forth in the Credit Agreement described
below.  This Term Loan A Note may be
prepaid in whole or in part at any time subject to the terms of the Credit
Agreement described below.

 

This
Term Loan A Note is one of the Notes referred to in, was executed and delivered
pursuant to, evidences indebtedness of Borrower incurred under, and is subject
to all terms and conditions of, that certain Third Amended and Restated Credit
Agreement, dated as of September 19, 2008 (as the same may be amended,
restated, supplemented or otherwise modified and in effect from time to time,
the “Credit Agreement”),
among Borrower, CoBank, ACB, as Administrative Agent (“Administrative
Agent”), Lead Arranger, Issuing Lender and a Lender, and the
other Lenders referred to therein, to which reference is hereby made for a
statement of, among other things, the terms and conditions under which the
indebtedness evidenced hereby was made and is to be repaid and for a statement
of Lender’s remedies upon the occurrence of an Event of Default, including
without limitation, the remedy of acceleration. 
Capitalized terms used herein but not otherwise specifically defined
shall have the meanings ascribed to such terms in the Credit Agreement.

 

This
Term Loan A Note is given in substitution for and supersedes and replaces a
previously issued Term Loan A Note (the “Original
Note”). This Term Loan A Note is not delivered in extinguishment
of the indebtedness evidenced by the Original Note and does not constitute a
novation of the Original Note, but is made to evidence indebtedness outstanding
under the Original Note as of the date of this Term Loan A Note and any
additional indebtedness under Term Loan A Commitment incurred or to be incurred
by Borrower under the Credit Agreement.

 

Borrower unconditionally promises to pay interest on
the outstanding unpaid principal amount hereof from the date hereof until
payment in full at the rates from time to time applicable to the Term Loan A
Facility as determined in accordance with the Credit Agreement; provided,
however, that upon the occurrence and during the continuance of an Event
of Default, Borrower promises to pay interest on the outstanding principal
balance of this Term Loan A Note at the rate of interest applicable following
the occurrence of an Event of Default as determined in accordance with the
Credit Agreement.

 

 

Interest on this Term Loan A Note shall be payable, at
the times and from the dates specified in the Credit Agreement for the Term
Loan A, on the date of any prepayment hereof, at maturity, whether due by
acceleration or otherwise, and as otherwise provided in the Credit Agreement.
From and after the date when the principal balance hereof becomes due and
payable, whether by acceleration or otherwise, interest hereon shall be payable
on demand, subject to any grace or cure period set forth in the Credit
Agreement.  In no contingency or event
whatsoever shall interest charged hereunder, however such interest may be
characterized or computed, exceed the highest rate permissible under any law
which a court of competent jurisdiction shall, in a final determination, deem
applicable hereto.  In the event that
such a court determines that Lender has received interest hereunder in excess
of the highest rate applicable hereto, such excess shall be applied in
accordance with the terms of the Credit Agreement.

 

Except for any notices expressly required by the Loan
Documents and as otherwise required by applicable law, Borrower hereby waives
demand, presentment and protest and notice of demand, presentment, protest and
nonpayment.

 

Borrower further agrees, subject only to any
limitation imposed by applicable law or the Loan Documents, to pay all
expenses, including reasonable attorneys’ fees and legal expenses, incurred by
Lender in endeavoring to collect any amounts payable hereunder which are not
paid when due, whether by acceleration or otherwise.

 

The transfer, sale or assignment of any rights under
or interest in this Term Loan A Note is subject to certain restrictions
contained in the Credit Agreement, including Subsection 8.1 thereof.

 

THIS TERM LOAN A NOTE SHALL BE
GOVERNED BY, AND INTERPRETED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS
(AS OPPOSED TO CONFLICTS OF LAW PROVISIONS THAT REQUIRE OR PERMIT APPLICATION
OF THE LAWS OF ANY OTHER STATE OR JURISDICTION) AND DECISIONS OF THE STATE OF
COLORADO.  Whenever
possible each provision of this Term Loan A Note shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Term Loan A Note shall be prohibited by or invalid under applicable
law, such provision shall be ineffective to the extent of such prohibition or
invalidity in such jurisdiction, without invalidating the remainder of such
provision or the remaining provisions of this Term Loan A Note or the
effectiveness and validity of such prohibited or invalid provision in any other
jurisdiction.  Whenever in this Term Loan
A Note reference is made to Lender or Borrower, such reference shall be deemed
to include, as applicable, a reference to their respective permitted successors
and assigns and in the case of Lender, any financial institution to which it
has sold or assigned all or any part of its interest in the Term Loan A or in
its commitment to make the Term Loan A as permitted by the Credit
Agreement.  The provisions of this Term
Loan A Note shall be binding upon and shall inure to the benefit of such
permitted successors and assigns. Borrower’s respective successors and assigns
shall include, without limitation, a receiver, trustee or debtor in possession
of or for Borrower.

 

 

IN
WITNESS WHEREOF, Borrower has caused this note to be executed
and delivered, by its duly authorized officer, on the date first shown above.

 

 

	
   

  	
  SUREWEST COMMUNICATIONS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
				

 

 

EXHIBIT 10.1(D)

 

FORM OF

THIRD AMENDED AND
RESTATED TERM LOAN B NOTE

 

SUREWEST COMMUNICATIONS

 

	
  $                            

  	
   

  	
                     ,
  20     

  

 

FOR VALUE RECEIVED,
the undersigned (“Borrower”),
hereby unconditionally promises to pay to                     
(“Lender”) in lawful money
of the United States of America and in immediately available funds, the
principal sum of [                                  
UNITED STATES DOLLARS (US $                    )],
or if less, the aggregate unpaid principal amount of all advances made to
Borrower by Lender pursuant to Subsection 1.1(B) of the Credit Agreement
described below, at such times and in the manner specified therein.

 

This Term Loan B Note is payable in installments on
the dates and in the amounts set forth in the Credit Agreement described
below.  This Term Loan B Note may be
prepaid in whole or in part at any time subject to the terms of the Credit
Agreement described below.

 

This
Term Loan B Note is one of the Notes referred to in, was executed and delivered
pursuant to, evidences indebtedness of Borrower incurred under, and is subject
to all terms and conditions of, that certain Third Amended and Restated Credit
Agreement, dated as of September 19, 2008 (as the same may be amended,
restated, supplemented or otherwise modified and in effect from time to time,
the “Credit Agreement”),
among Borrower, CoBank, ACB, as Administrative Agent (“Administrative Agent”), Lead Arranger,
Issuing Lender and a Lender, and the other Lenders referred to therein, to
which reference is hereby made for a statement of, among other things, the
terms and conditions under which the indebtedness evidenced hereby was made and
is to be repaid and for a statement of Lender’s remedies upon the occurrence of
an Event of Default, including without limitation, the remedy of
acceleration.  Capitalized terms used
herein but not otherwise specifically defined shall have the meanings ascribed
to such terms in the Credit Agreement.

 

This
Term Loan B Note is given in substitution for and supersedes and replaces a
previously issued Term Loan B Note (the “Original
Note”). This Term Loan B Note is not delivered in extinguishment
of the indebtedness evidenced by the Original Note and does not constitute a
novation of the Original Note, but is made to evidence indebtedness outstanding
under the Original Note as of the date of this Term Loan B Note and any
additional indebtedness under Term Loan B Commitment incurred or to be incurred
by Borrower under the Credit Agreement.

 

Borrower unconditionally promises to pay interest on
the outstanding unpaid principal amount hereof from the date hereof until
payment in full at the rates from time to time applicable to the Term Loan B
Facility as determined in accordance with the Credit Agreement; provided,
however, that upon the occurrence and during the continuance of an Event
of Default, Borrower promises to pay interest on the outstanding principal
balance of this Term Loan B Note at the rate of interest applicable following
the occurrence of an Event of Default as determined in accordance with the
Credit Agreement.

 

 

Interest on this Term Loan B Note shall be payable, at
the times and from the dates specified in the Credit Agreement for the Term
Loan B, on the date of any prepayment hereof, at maturity, whether due by
acceleration or otherwise, and as otherwise provided in the Credit Agreement.
From and after the date when the principal balance hereof becomes due and
payable, whether by acceleration or otherwise, interest hereon shall be payable
on demand, subject to any grace or cure period set forth in the Credit
Agreement.  In no contingency or event
whatsoever shall interest charged hereunder, however such interest may be
characterized or computed, exceed the highest rate permissible under any law
which a court of competent jurisdiction shall, in a final determination, deem
applicable hereto.  In the event that
such a court determines that Lender has received interest hereunder in excess
of the highest rate applicable hereto, such excess shall be applied in
accordance with the terms of the Credit Agreement.

 

Except for any notices expressly required by the Loan
Documents and as otherwise required by applicable law, Borrower hereby waives
demand, presentment and protest and notice of demand, presentment, protest and
nonpayment.

 

Borrower further agrees, subject only to any
limitation imposed by applicable law or the Loan Documents, to pay all
expenses, including reasonable attorneys’ fees and legal expenses, incurred by
Lender in endeavoring to collect any amounts payable hereunder which are not
paid when due, whether by acceleration or otherwise.

 

The transfer, sale or assignment of any rights under
or interest in this Term Loan B Note is subject to certain restrictions
contained in the Credit Agreement, including Subsection 8.1 thereof.

 

THIS TERM LOAN B NOTE SHALL BE
GOVERNED BY, AND INTERPRETED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS
(AS OPPOSED TO CONFLICTS OF LAW PROVISIONS THAT REQUIRE OR PERMIT APPLICATION
OF THE LAWS OF ANY OTHER STATE OR JURISDICTION) AND DECISIONS OF THE STATE OF
COLORADO.  Whenever
possible each provision of this Term Loan B Note shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Term Loan B Note shall be prohibited by or invalid under applicable
law, such provision shall be ineffective to the extent of such prohibition or
invalidity in such jurisdiction, without invalidating the remainder of such
provision or the remaining provisions of this Term Loan B Note or the
effectiveness and validity of such prohibited or invalid provision in any other
jurisdiction.  Whenever in this Term Loan
B Note reference is made to Lender or Borrower, such reference shall be deemed
to include, as applicable, a reference to their respective permitted successors
and assigns and in the case of Lender, any financial institution to which it
has sold or assigned all or any part of its interest in the Term Loan B or in
its commitment to make the Term Loan B as permitted by the Credit
Agreement.  The provisions of this Term
Loan B Note shall be binding upon and shall inure to the benefit of such
permitted successors and assigns. 
Borrower’s respective successors and assigns shall include, without
limitation, a receiver, trustee or debtor in possession of or for Borrower.

 

 

IN
WITNESS WHEREOF, Borrower has caused this note to be executed
and delivered, by its duly authorized officer, on the date first shown above.

 

 

	
   

  	
  SUREWEST COMMUNICATIONS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
				

 

 

EXHIBIT 10.1(E)

 

FORM OF

AMENDED AND RESTATED
SWINGLINE NOTE

 

SUREWEST COMMUNICATIONS

 

	
  $                            

  	
   

  	
                     ,
  20     

  

 

FOR VALUE RECEIVED,
the undersigned (“Borrower”),
hereby unconditionally promises to pay to
                    
(“Lender”) in lawful money
of the United States of America and in immediately available funds, the
principal sum of [                                  
UNITED STATES DOLLARS (US $                    )],
or if less, the aggregate unpaid principal amount of all advances made to
Borrower by Lender pursuant to Subsection 1.1(D) of the Credit Agreement
described below, at such times and in the manner specified therein.  [This Swingline Note amends and restates in
its entirety that certain Swingline Note, dated as of February 13, 2008
(the “Prior Note”), by Borrower, in favor of
the Payee.]

 

This Swingline Note is payable on the dates and in the
amounts set forth in the Credit Agreement described below.  This Swingline Note may be prepaid in whole
or in part at any time subject to the terms of the Credit Agreement described
below.

 

This
Swingline Note is one of the Notes referred to in, was executed and delivered
pursuant to, evidences indebtedness of Borrower incurred under, and is subject
to all terms and conditions of, that certain Third Amended and Restated Credit
Agreement, dated as of September 19, 2008 (as the same may be amended,
restated, supplemented or otherwise modified and in effect from time to time,
the “Credit Agreement”),
among Borrower, CoBank, ACB, as Administrative Agent (“Administrative Agent”), Lead Arranger,
Issuing Lender and a Lender, and the other Lenders referred to therein, to
which reference is hereby made for a statement of, among other things, the
terms and conditions under which the indebtedness evidenced hereby was made and
is to be repaid and for a statement of Lender’s remedies upon the occurrence of
an Event of Default, including without limitation, the remedy of
acceleration.  Capitalized terms used
herein but not otherwise specifically defined shall have the meanings ascribed
to such terms in the Credit Agreement.

 

This
Swingline Note is given in substitution for and supersedes and replaces a
previously issued Swingline Note (the “Original
Note”). This Swingline Note is not delivered in extinguishment
of the indebtedness evidenced by the Original Note and does not constitute a
novation of the Original Note, but is made to evidence indebtedness outstanding
under the Original Note as of the date of this Swingline Note and any
additional indebtedness under Swingline Loan Commitment incurred or to be
incurred by Borrower under the Credit Agreement.

 

Borrower unconditionally promises to pay interest on
the outstanding unpaid principal amount hereof from the date hereof until
payment in full at the rates from time to time applicable to the Swingline
Loans as determined in accordance with the Credit Agreement; provided, however,
that upon the occurrence and during the continuance of an Event of Default,
Borrower promises to 

 

 

pay interest on the outstanding principal balance of this Swingline
Note at the rate of interest applicable following the occurrence of an Event of
Default as determined in accordance with the Credit Agreement.

 

Interest on this Swingline Note shall be payable, at
the times and from the dates specified in the Credit Agreement for the
Swingline Loans, on the date of any prepayment hereof, at maturity, whether due
by acceleration or otherwise, and as otherwise provided in the Credit
Agreement. From and after the date when the principal balance hereof becomes
due and payable, whether by acceleration or otherwise, interest hereon shall be
payable on demand, subject to any grace or cure period set forth in the Credit
Agreement.  In no contingency or event
whatsoever shall interest charged hereunder, however such interest may be
characterized or computed, exceed the highest rate permissible under any law
which a court of competent jurisdiction shall, in a final determination, deem
applicable hereto.  In the event that
such a court determines that Lender has received interest hereunder in excess
of the highest rate applicable hereto, such excess shall be applied in
accordance with the terms of the Credit Agreement.

 

Except for any notices expressly required by the Loan
Documents and as otherwise required by applicable law, Borrower hereby waives
demand, presentment and protest and notice of demand, presentment, protest and
nonpayment.

 

Borrower further agrees, subject only to any
limitation imposed by applicable law or the Loan Documents, to pay all
expenses, including reasonable attorneys’ fees and legal expenses, incurred by
Lender in endeavoring to collect any amounts payable hereunder which are not
paid when due, whether by acceleration or otherwise.

 

The transfer, sale or assignment of any rights under
or interest in this Swingline Note is subject to certain restrictions contained
in the Credit Agreement, including Subsection 8.1 thereof.

 

THIS SWINGLINE NOTE SHALL BE
GOVERNED BY, AND INTERPRETED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS
(AS OPPOSED TO CONFLICTS OF LAW PROVISIONS THAT REQUIRE OR PERMIT APPLICATION
OF THE LAWS OF ANY OTHER STATE OR JURISDICTION) AND DECISIONS OF THE STATE OF
COLORADO.  Whenever
possible each provision of this Swingline Note shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Swingline Note shall be prohibited by or invalid under applicable law,
such provision shall be ineffective to the extent of such prohibition or
invalidity in such jurisdiction, without invalidating the remainder of such
provision or the remaining provisions of this Swingline Note or the
effectiveness and validity of such prohibited or invalid provision in any other
jurisdiction.  Whenever in this Swingline
Note reference is made to Lender or Borrower, such reference shall be deemed to
include, as applicable, a reference to their respective permitted successors
and assigns and in the case of Lender, any financial institution to which it
has sold or assigned all or any part of its interest in the Revolving Loans or
in its commitment to make the Swingline Loans as permitted by the Credit
Agreement. The provisions of this Swingline Note shall be binding upon and
shall inure to the benefit of such permitted successors and assigns.  Borrower’s respective successors and assigns
shall include, without limitation, a receiver, trustee or debtor in possession
of or for Borrower.

 

 

[The amendment and restatement of the Prior Note by
this Swingline Note shall not constitute a novation or termination of the
obligations and covenants of the Borrower thereunder, but shall constitute an
amendment and restatement of the obligations and covenants of the Borrower
under such Prior Note and the Borrower hereby reaffirms all such obligations
and covenants under the Prior Note as amended and restated hereby.]

 

 

IN
WITNESS WHEREOF, Borrower has caused this note to be executed
and delivered, by its duly authorized officer, on the date first shown above.

 

 

	
   

  	
  SUREWEST COMMUNICATIONS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

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