“Financial Statements” means the consolidated income statements, statements of cash flows and balance sheets of Borrower delivered in accordance withSection 3.4 andAnnex E.
“Fiscal Quarter” means any of the quarterly accounting periods of Borrower, ending on March 31, June 30, September 30 and December 31 of each year.
“Fiscal Year” means any of the annual accounting periods of Borrower ending on December 31 of each year.
“Fixtures” means all “fixtures” as such term is defined in the Code, now owned or hereafter acquired by any Credit Party.
“Flood Insurance” means, for any real property located in a Special Flood Hazard Area, Federal Flood Insurance or private insurance that meets the requirements set forth by FEMA in its Mandatory Purchase of Flood Insurance Guidelines. Flood Insurance shall be in an amount equal to the full, unpaid balance of the Loans and any prior liens on the real property up to the maximum policy limits set under the National Flood Insurance Program, or as otherwise required by Agent, with deductibles not to exceed $50,000.
“Franchise” means an initial Governmental Authorization or renewal thereof issued by a Franchising Authority which authorizes the acquisition, ownership, construction or operation of a cable television system.
“Franchising Authority” means any Governmental Authority authorized by any federal, state or local law to grant a Franchise or to exercise jurisdiction over the rates or services provided by a cable television system pursuant to a Franchise or over Persons holding a Franchise.
“GAAP” means generally accepted accounting principles in the United States of America, consistently applied, as such term is further defined inAnnex G to the Agreement.
“GE Capital” means General Electric Capital Corporation, a Delaware corporation.
“General Intangibles” means “general intangibles,” as such term is defined in the Code, now owned or hereafter acquired by any Credit Party, including all right, title and interest that such Credit Party may now or hereafter have in or under any Contract, all payment intangibles, customer lists, Licenses, Copyrights, Trademarks, Patents, and all applications therefor and reissues, extensions or renewals thereof, rights in Intellectual Property, interests in partnerships, joint ventures and other business associations, licenses, permits, copyrights, trade secrets, proprietary or confidential information, inventions (whether or not patented or patentable), technical information, procedures, designs, knowledge, know-how, software, data bases, data, skill, expertise, experience, processes, models, drawings, materials and records, goodwill (including the goodwill associated with any Trademark or Trademark License), all rights and claims in or under insurance policies (including insurance for fire, damage, loss and casualty, whether covering personal property, real property, tangible rights or intangible rights, all liability, life, key man and business interruption insurance, and all unearned premiums), uncertificated securities, choses in action, deposit, checking and other bank accounts, rights to receive tax refunds and other payments, rights to receive dividends, distributions, cash, Instruments and other property in respect of or in exchange for pledged Stock and Investment Property, rights of indemnification, all books and records, correspondence, credit files, invoices and other papers, including without limitation all tapes, cards, computer runs and other papers and documents in the possession or under the control of such Credit Party or any computer bureau or service company from time to time acting for such Credit Party, and any and all Governmental Authorizations to the extent permitted by applicable law.
“Goods” means any “goods” as defined in the Code, now owned or hereafter acquired by any Credit Party, wherever located, including embedded software to the extent included in “goods” as defined in the Code, manufactured homes, standing timber that is cut and removed for sale and unborn young of animals.
“Governmental Authority” means any nation or government, any state or other political subdivision thereof, and any agency, department, court, central bank or other entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government (including, without limitation, the FCC, any PUC and any Franchising Authority).
“Governmental Authorization” means any authorization, approval, consent, franchise, license, covenant, order, ruling, permit, certification, exemption, notice, declaration or similar right, undertaking or other action
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of, to or by, or any material filing, qualification or registration with, any Governmental Authority, including any Communications License.
“Grantor” has the meaning ascribed to it in the Security Agreement.
“Guaranteed Indebtedness” means, as to any Person, any obligation of such Person guaranteeing, providing comfort or otherwise supporting any Indebtedness, lease, dividend, or other obligation (“primary obligation”) of any other Person (the “primary obligor”) in any manner, including any obligation or arrangement of such Person to (a) purchase or repurchase any such primary obligation, (b) advance or supply funds (i) for the purchase or payment of any such primary obligation or (ii) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency or any balance sheet condition of the primary obligor, (c) 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, (d) protect the beneficiary of such arrangement from loss (other than product warranties given in the ordinary course of business) or (e) indemnify the owner of such primary obligation against loss in respect thereof. The amount of any Guaranteed Indebtedness at any time shall be deemed to be an amount equal to the lesser at such time of (x) the stated or determinable amount of the primary obligation in respect of which such Guaranteed Indebtedness is incurred and (y) the maximum amount for which such Person may be liable pursuant to the terms of the instrument embodying such Guaranteed Indebtedness, or, if not stated or determinable, the maximum reasonably anticipated liability (assuming full performance) in respect thereof.
“Guaranties” means, collectively, the Subsidiary Guaranty and any other guaranty executed by any Guarantor in favor of Agent and Lenders in respect of the Obligations.
“Guarantor” means each Credit Party (other than Borrower and the PUC Restricted Subsidiaries) and each other Person, if any, that (i) executes a guaranty or other similar agreement in favor of Agent, for itself and the ratable benefit of Lenders, in connection with the transactions contemplated by the Agreement, or (ii) becomes a “Guarantor” under the Subsidiary Guaranty by the execution of a Joinder Agreement.
“Hazardous Material” means any substance, material or waste that is regulated by, or forms the basis of liability now or hereafter under, any Environmental Laws, including any material or substance that is (a) defined as a “solid waste,” “hazardous waste,” “hazardous material,” “hazardous substance,” “extremely hazardous waste,” “restricted hazardous waste,” “pollutant,” “contaminant,” “hazardous constituent,” “special waste,” “toxic substance” or other similar term or phrase under any Environmental Laws, or (b) petroleum or any fraction or by-product thereof, asbestos, polychlorinated biphenyls (PCB’s), or any radioactive substance.
“Hedging Obligations” means, with respect to any Person, the obligations of such Person under: (i) currency exchange, interest rate or commodity swap agreements, interest rate or commodity cap agreements and currency exchange, interest rate or commodity collar agreements; and (ii) other agreements or arrangements designed to protect such Person against fluctuations in currency exchange, interest rates or commodity prices.
“Impacted Lender” means any Lender that fails to provide Agent, within three (3) Business Days following Agent’s written request, satisfactory assurance that such Lender will not become a Non-Funding Lender, or any Lender that has a Person that directly or indirectly controls such Lender and such Person (a) becomes subject to a voluntary or involuntary case under the Bankruptcy Code or any similar bankruptcy laws, (b) has appointed a custodian, conservator, receiver or similar official for such Person or any substantial part of such Person’s assets, or (c) makes a general assignment for the benefit of creditors, is liquidated, or is otherwise adjudicated as, or determined by any Governmental Authority having regulatory authority over such Person or its assets to be, insolvent or bankrupt, and for each of clauses (a) through (c), Agent has determined that such Lender is reasonably likely to become a Non-Funding Lender. For purposes of this definition, control of a Person shall have the same meaning as in the second sentence of the definition of Affiliate.
“Incur” means issue, assume, guarantee, incur or otherwise become liable for;provided,however, that any Indebtedness or Stock of a Person existing at the time such Person becomes a Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Person at the time it becomes a Subsidiary. The terms “Incurrence” or “Incurred” shall have the meanings correlative thereto.
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“Indebtedness” means, with respect to any Person: (i) the principal and premium (if any) of any indebtedness of such Person, whether or not contingent: (a) in respect of borrowed money, (b) evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers’ acceptances (or, without duplication, reimbursement agreements in respect thereof), (c) representing the deferred and unpaid purchase price of any property, which purchase price is due more than six months after the date of placing the property in service or taking delivery and title thereto, (d) in respect of Capital Lease Obligations or (e) representing any Hedging Obligations, if and to the extent that any of the foregoing Indebtedness (other than letters of credit and Hedging Obligations) would appear as a liability on a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP; (ii) to the extent not otherwise included, any Guaranteed Indebtedness as to such Person (other than by endorsement of negotiable instruments for collection in the ordinary course of business and other than Guaranteed Indebtedness with respect to which the primary obligation is not itself Indebtedness); and (iii) to the extent not otherwise included, Indebtedness of another Person secured by a Lien on any asset owned by such Person (whether or not such Indebtedness is assumed by such Person);provided,however, that the amount of such Indebtedness will be the lesser of (a) the Fair Market Value of such asset at such date of determination and (b) the amount of such Indebtedness of such other Person;provided,further, that any obligation of Borrower or any Subsidiary in respect of account credits to participants under the LTIP or any successor or similar compensation plan, shall be deemed not to constitute Indebtedness.
“Indemnified Liabilities” has the meaning ascribed to it inSection 1.13.
“Indemnified Person” has the meaning ascribed to it inSection 1.13.
“Index Rate” means, for any day, a floating rate equal to the higher of (i) the rate publicly quoted from time to time byThe Wall Street Journal as the “prime rate” (or, ifThe Wall Street Journal ceases quoting a prime rate, the highest per annum rate of interest published by the Federal Reserve Board in Federal Reserve statistical release H.15 (519) entitled “Selected Interest Rates” as the Bank prime loan rate or its equivalent) (ii) the Federal Funds Rate plus 50 basis points per annum and (iii) 4.25% per annum. Each change in any interest rate provided for in the Agreement based upon the Index Rate shall take effect at the time of such change in the Index Rate.
“Index Rate Loan” means a Loan or portion thereof bearing interest by reference to the Index Rate.
“Initial Outside Date” has the meaning ascribed to it inSection 5.18.
“Instruments” means all “instruments,” as such term is defined in the Code, now owned or hereafter acquired by any Credit Party, wherever located, and, in any event, including all certificates of deposit, and all promissory notes and other evidences of indebtedness, other than instruments that constitute, or are a part of a group of writings that constitute, Chattel Paper.
“Intellectual Property” means any and all Licenses, Patents, Copyrights, Trademarks, and the goodwill associated with such Trademarks.
“Intercompany Notes” has the meaning ascribed to it in Section 6.3.
“Interest Payment Date” means (a) as to any Index Rate Loan, each March 21, June 21, September 21 and December 21; and (b) as to any LIBOR Loan, the last day of the applicable LIBOR Period,provided, that in the case of any LIBOR Period greater than three months in duration, interest shall be payable at three month intervals and on the last day of such LIBOR Period; andprovided further that, in addition to the foregoing, each of (x) the date upon which all of the Commitments have been terminated and the Loans have been paid in full and (y) the Commitment Termination Date shall be deemed to be an “Interest Payment Date” with respect to any interest that has then accrued under the Agreement.
“Inventory” means any “inventory,” as such term is defined in the Code, now owned or hereafter acquired by any Credit Party, wherever located, and in any event including inventory, merchandise, goods and other tangible personal property that are held by or on behalf of any Credit Party for sale or lease or are furnished or are to be furnished under a contract of service, or that constitute raw materials, work in process, finished goods, returned goods, supplies or materials of any kind, nature or description used or consumed or to be used or consumed in such Credit Party’s business or in the processing, production, packaging, promotion, delivery or shipping of the same, including all supplies and embedded software.
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“Investment Bank” has the meaning ascribed to it inSection 5.18.
“Investment Company Act of 1940” means the Investment Company Act of 1940, 15 U.S.C. §§ 80a-1,et seq.
“Investment Property” means all “investment property,” as such term is defined in the Code, now owned or hereafter acquired by any Credit Party, wherever located, including (i) all securities, whether certificated or uncertificated, including stocks, bonds, interests in limited liability companies, partnership interests, treasuries, certificates of deposit, and mutual fund shares; (ii) all securities entitlements of any Credit Party, including the rights of such Credit Party to any securities account and the financial assets held by a securities intermediary in such securities account and any free credit balance or other money owing by any securities intermediary with respect to that account; (iii) all securities accounts of any Credit Party; (iv) all commodity contracts of any Credit Party; and (v) all commodity accounts held by any Credit Party.
“Investments” means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of loans (including guarantees), advances or capital contributions (excluding accounts receivable, trade credit and advances to customers and commission, travel and similar advances to officers, employees and consultants made in the ordinary course of business), purchases or other acquisitions for consideration (including agreements providing for the adjustment of purchase price) of Indebtedness, Stock or other securities issued by any other Person and investments that are required by GAAP to be classified on the balance sheet of Borrower in the same manner as the other investments included in this definition to the extent such transactions involve the transfer of cash or other property by such Person to such other Person. The amount of any Investment shall be the original cost of such Investment plus the cost of all additions thereto, without any adjustment 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, and all regulations promulgated thereunder.
“IRS” means the Internal Revenue Service.
“Joinder Agreement” means a joinder agreement substantially in the form ofExhibit 6.23 to the Agreement.
“Lenders” means (a) GE Capital, the other Lenders made parties to this Agreement pursuant to the Plan of Reorganization, and any other Person that becomes a “Lender” hereunder pursuant toSection 1.16(d) orSection 9.1(a), and (b) solely for the purpose of obtaining the benefit of the Liens granted to the Agent and the Guaranties made in favor of the Agent, in each case, for the benefit of the Lenders under the Collateral Documents.
“LIBOR Business Day” means a Business Day on which banks in the City of London are generally open for interbank or foreign exchange transactions.
“LIBOR Loan” means a Loan or any portion thereof bearing interest by reference to the LIBOR Rate.
“LIBOR Period” means, with respect to any LIBOR Loan, each period commencing on a LIBOR Business Day selected by Borrower pursuant to the Agreement and ending one, two, three or six months thereafter, as selected by Borrower’s irrevocable notice to Agent as set forth inSection 1.5(e);provided, that the foregoing provision relating to LIBOR Periods is subject to the following:
(a) if any LIBOR Period would otherwise end on a day that is not a LIBOR Business Day, such LIBOR Period shall be extended to the next succeeding LIBOR Business Day unless the result of such extension would be to carry such LIBOR Period into another calendar month in which event such LIBOR Period shall end on the immediately preceding LIBOR Business Day;
(b) any LIBOR Period that would otherwise extend beyond the Commitment Termination Date shall end two (2) LIBOR Business Days prior to such date;
(c) any LIBOR Period that begins on the last LIBOR Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such LIBOR Period) shall end on the last LIBOR Business Day of a calendar month;
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(d) Borrower shall select LIBOR Periods so as not to require a payment or prepayment of any LIBOR Loan during a LIBOR Period for such Loan; and
(e) Borrower shall select LIBOR Periods so that there shall be no more than six (6) separate LIBOR Loans in existence at any one time.
“LIBOR Rate” means for each LIBOR Period, a rate of interest determined by Agent equal to the greater of (i) 3.0% per annum and (ii)
(a) the offered rate for deposits in Dollars for the applicable LIBOR Period that appears on Reuters Screen LIBOR01 Page as of 11:00 a.m. (London time), on the second full LIBOR Business Day next preceding the first day of such LIBOR Period (unless such date is not a Business Day, in which event the next succeeding Business Day will be used); divided by
(b) a number equal to 1.0minus the aggregate (but without duplication) of the rates (expressed as a decimal fraction) of reserve requirements in effect on the day that is two (2) LIBOR Business Days prior to the beginning of such LIBOR Period (including basic, supplemental, marginal and emergency reserves under any regulations of the Federal Reserve Board or other Governmental Authority having jurisdiction with respect thereto, as now and from time to time in effect) for Eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the Federal Reserve Board) that are required to be maintained by a member bank of the Federal Reserve System.
If such interest rates shall cease to be available from Reuters, the LIBOR Rate shall be determined from such financial reporting service or other information as shall be acceptable to Agent.
“License” means any Copyright License, Patent License, Trademark License or other license of rights or interests now held or hereafter acquired by any Credit Party.
“Lien” means any mortgage or deed of trust, pledge, hypothecation, assignment, deposit arrangement, lien, charge, security interest, easement or encumbrance, or priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including any lease or title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, and the filing of, or agreement to give, any financing statement perfecting a security interest under the Code or comparable law of any jurisdiction).
“Liquidity Transaction” has the meaning ascribed to it inSection 5.18.
“Litigation” has the meaning ascribed to it inSection 3.13.
“Loan Account” has the meaning ascribed to it inSection 1.12.
“Loan Documents” means the Agreement, the Notes, the Collateral Documents, the Fee Letter and all other agreements, instruments, documents and certificates identified in the Closing Checklist executed and delivered to, or in favor of, Agent or any Lenders and including all other pledges, powers of attorney, consents, assignments, contracts, notices, and all other written matter whether heretofore, now or hereafter executed by or on behalf of any Credit Party, or any employee of any Credit Party, and delivered to Agent or any Lender in connection with the Agreement or the transactions contemplated thereby.
“Loans” means the Revolving Loan, the Swing Line Loan and the Term Loan.
“LTIP” means any long-term incentive or similar compensation plan maintained by Borrower or its Subsidiaries.
“Management Equity Plan” means the equity plan established for certain employees of the Borrower, which plan shall be acceptable to the Agent.
“Margin Stock” has the meaning ascribed to it inSection 3.10.
“Material Adverse Effect” means a material adverse effect on (a) the business, assets, operations or financial or other condition of the Credit Parties considered as a whole, (b) Borrower’s ability to pay any of the Loans or any of the other Obligations in accordance with the terms of the Agreement or the ability of any Credit Party to perform any of its other obligations under the Loan Documents, (c) the Collateral or Agent’s
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Liens, on behalf of itself and Lenders, on the Collateral or the priority of such Liens, or (d) Agent’s or any Lender’s rights and remedies under the Agreement and the other Loan Documents.
“Material Real Estate” means (i) the Real Estate subject to any Mortgage, (ii) any Real Estate having a value in excess of $250,000, (iii) any Real Estate leased, subleased or used by any Credit Party with respect to which the aggregate annual payments therefor exceed $300,000, and/or (iv) any Real Estate that the Requisite Lenders have determined is material to the business, operations, assets or financial condition of the Credit Parties.
“Maximum Amount” means, as of any date of determination, an amount equal to the Revolving Loan Commitment of all Lenders as of that date.
“Moody’s” means Moody’s Investors Service, Inc., and any successor rating agency.
“Mortgaged Properties” means Mortgages (or amendments to Mortgages) covering all of the owned Real Estate.
“Mortgages” means each of the mortgages, deeds of trust, leasehold mortgages, leasehold deeds of trust, collateral assignments of leases or other real estate security documents delivered by any Credit Party to Agent on behalf of itself and Lenders with respect to the Mortgaged Properties, all in form and substance reasonably satisfactory to Agent.
“Multiemployer Plan” means a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA, and to which any Credit Party or ERISA Affiliate is making, is obligated to make or has made or been obligated to make, contributions on behalf of participants who are or were employed by any of them.
“Multiple Employer Plan” means a “section 413(c) plan” as defined in Treasury Regulations Section 1.413-2 and to which any Credit Party or ERISA Affiliate is making, is obligated to make or has made or been obligated to make, contributions on behalf of participants who are or were employed by any of them.
“National Flood Insurance Program” means the program created by the U.S. Congress pursuant to the National Flood Insurance Act of 1968 and the Flood Disaster Protection Act of 1973, as revised by the National Flood Insurance Reform Act of 1994, that mandates the purchase of flood insurance to cover real property improvements located in Special Flood Hazard Areas in participating communities and provides protection to property owners through a Federal insurance program.
“Net Cash Proceeds” means:
(a) with respect to any Disposition, (i) the aggregate amount of cash proceeds received by any Credit Party in respect of such Disposition (including any cash proceeds received at any time by any Credit Party as income or other proceeds of any noncash proceeds or other consideration in respect of any Disposition as and when received),less (ii) the sum without duplication of the following amounts, but only to the extent not already deducted in arriving at the amount referred to in clause (a)(i) above: (A) commissions and other reasonable and customary transaction costs, fees and expenses properly attributable to such Disposition and payable by any Credit Party in connection therewith (in each case, paid to non-Affiliates); (B) taxes payable by any Credit Party in connection with such Disposition; (C) amounts payable by any Credit Party to holders of senior Liens (to the extent such Liens constitute Permitted Encumbrances hereunder), if any, on the Property that is the subject of such Disposition and required to be, and which is, repaid by any Credit Party under the terms thereof as a result thereof (including in order to obtain the consent of such holders to make such Disposition); (D) an appropriate reserve for indemnities, purchase price adjustments and other contingent liabilities in accordance with GAAP in connection with such Disposition; and (E) an appropriate reserve for income taxes in accordance with GAAP in connection with respect of such Disposition;provided that the reversal of any such reserve shall be deemed to be cash proceeds received by a Credit Party in respect of such Disposition; and
(b) with respect to any Debt Issuance or Stock Issuance, the gross amount of cash proceeds paid to or received by any Credit Party in respect of such Debt Issuance or Stock Issuance as the case may be (including any cash proceeds received at any time by any Credit Party as income or other proceeds of any noncash proceeds or other consideration in respect of any Debt Issuance or Stock Issuance as and when received), net
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of underwriting discounts and commissions and other reasonable costs and expenses directly incurred by such Credit Party and paid to non-Affiliates in connection therewith.
“Net Income” means, with respect to any Person, the net income (loss) of such Person, determined in accordance with GAAP.
“Non-Funding Lender” means any Lender that has (a) failed to fund any payments required to be made by it under the Loan Documents within two (2) Business Days after any such payment is due (excluding expense and similar reimbursements that are subject to good faith disputes), (b) given written notice (and Agent has not received a revocation in writing), to a Borrower, Agent, or any Lender, or has otherwise publicly announced (and Agent has not received notice of a public retraction) that such Lender believes it will fail to fund payments or purchases of participations required to be funded by it under the Loan Documents or one or more other syndicated credit facilities, (c) failed to fund, and not cured, loans, participations, advances, or reimbursement obligations under one or more other syndicated credit facilities, unless subject to a good faith dispute, or (d) (i) become subject to a voluntary or involuntary case under the Bankruptcy Code or any similar bankruptcy laws, (ii) a custodian, conservator, receiver or similar official appointed for it or any substantial part of such Person’s assets, or (iii) made a general assignment for the benefit of creditors, been liquidated, or otherwise been adjudicated as, or determined by any Governmental Authority having regulatory authority over such Person or its assets to be, insolvent or bankrupt, and for this clause (d), Agent has determined that such Lender is reasonably likely to fail to fund any payments required to be made by it under the Loan Documents.
“Notes” means, collectively, the Revolving Notes, the Swing Line Note and the Term Notes.
“Notice of Conversion/Continuation” has the meaning ascribed to it inSection 1.5(e).
“Notice of Revolving Credit Advance” has the meaning ascribed to it inSection 1.1(a).
“Notice of Swing Line Advance” has the meaning ascribed to it inSection 1.1(c).
“Obligations” means all loans, advances, debts, liabilities and obligations, for the performance of covenants, tasks or duties or for payment of monetary amounts (whether or not such performance is then required or contingent, or such amounts are liquidated or determinable) owing by any Credit Party to Agent or any Lender, and all covenants and duties regarding such amounts, of any kind or nature, present or future, whether or not evidenced by any note, agreement or other instrument, arising under the Agreement or any of the other Loan Documents. This term includes all principal, interest (including all interest that accrues after the commencement of any case or proceeding by or against any Credit Party in bankruptcy, whether or not allowed in such case or proceeding), Fees, Hedging Obligations of Borrower to a Secured Swap Provider pursuant to a Secured Rate Contract, Charges, expenses, attorneys’ fees and any other sum chargeable to any Credit Party under the Agreement or any of the other Loan Documents.
“Organizational Documents” means the by-laws, certificate of incorporation, certificate of formation, stockholders agreement, or operating agreement of each of the Borrower and its Subsidiaries.
“Original Closing Date” means July 3, 2006.
“Patent License” means rights under any written agreement now owned or hereafter acquired by any Credit Party granting any right with respect to any invention on which a Patent is in existence.
“Patent Security Agreements” means the Patent Security Agreements made in favor of Agent, on behalf of itself and Lenders, by each applicable Credit Party.
“Patents” means all of the following in which any Credit Party now holds or hereafter acquires any interest: (a) all letters patent of the United States or any other country, all registrations and recordings thereof, and all applications for letters patent of the United States or of any other country, including registrations, recordings and applications in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State or any other country, and (b) all reissues, continuations, continuations-in-part or extensions thereof.
“PBGC” means the Pension Benefit Guaranty Corporation.
“Pension Plan” means a Plan described in Section 3(2) of ERISA.
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“Permitted Encumbrances” means the following encumbrances: (a) Liens for taxes or assessments or other governmental Charges not yet due and payable or which are being contested in accordance withSection 5.2(b); (b) pledges or deposits of money securing statutory obligations under workmen’s compensation, unemployment insurance, social security or public liability laws or similar legislation (excluding Liens under ERISA); (c) pledges or deposits of money securing bids, tenders, contracts (other than contracts for the payment of money) or leases to which any Credit Party is a party as lessee made in the ordinary course of business; (d) inchoate and unperfected workers’, mechanics’ or similar liens arising in the ordinary course of business, so long as such Liens attach only to Equipment, Fixtures and/or Real Estate; (e) carriers’, warehousemen’s, suppliers’ or other similar possessory liens arising in the ordinary course of business and securing liabilities in an outstanding aggregate amount not in excess of $2,000,000 at any time for all Credit Parties combined, so long as such Liens attach only to Inventory; (f) deposits securing, or in lieu of, surety, appeal or customs bonds in proceedings to which any Credit Party is a party; (g) any attachment or judgment lien not constituting an Event of Default underSection 8.1(j); (h) zoning restrictions, easements, licenses, or other restrictions on the use of any Real Estate or other minor irregularities in title (including leasehold title) thereto, so long as the same do not materially impair the use, value, or marketability of such Real Estate; (i) presently existing or hereafter created Liens in favor of Agent, on behalf of Lenders; and (j) Liens expressly permitted underclauses (b) and (c) ofSection 6.7 of the Agreement.
“Person” means any individual, sole proprietorship, partnership, joint venture, trust, unincorporated organization, association, corporation, limited liability company, institution, public benefit corporation, other entity or government (whether federal, state, county, city, municipal, local, foreign, or otherwise, including any instrumentality, division, agency, body or department thereof).
“Petition Date” has the meaning ascribed to it in the recitals to the Agreement
“Plan” means, at any time, an “employee benefit plan,” as defined in Section 3(3) of ERISA, that any Credit Party or ERISA Affiliate maintains, contributes to or has an obligation to contribute to on behalf of participants who are or were employed by any Credit Party.
“Plan Documents” has the meaning ascribed to it inSection 2.1(c).
“Pledge Agreements” means (i) the Pledge Agreement executed by Borrower and each other Credit Party that is a signatory thereto in favor of Agent, on behalf of itself and Lenders, together with any Joinders to Pledge Agreement executed from time to time and (ii) any other pledge agreement entered into after the Closing Date by any Credit Party (as required by the Agreement or any other Loan Document).
“Pledgors” has the meaning ascribed to it in the Pledge Agreements.
“Preferred Stock” means any Stock with preferential right of payment of dividends or upon liquidation, dissolution, or winding up.
“Proceeds” means “proceeds,” as such term is defined in the Code, including (a) any and all proceeds of any insurance, indemnity, warranty or guaranty payable to any Credit Party from time to time with respect to any of the Collateral, (b) any and all payments (in any form whatsoever) made or due and payable to any Credit Party from time to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the Collateral by any Governmental Authority (or any Person acting under color of governmental authority), (c) any claim of any Credit Party against third parties (i) for past, present or future infringement of any Patent or Patent License, or (ii) for past, present or future infringement or dilution of any Copyright, Copyright License, Trademark or Trademark License, or for injury to the goodwill associated with any Trademark or Trademark License, (d) any recoveries by any Credit Party against third parties with respect to any litigation or dispute concerning any of the Collateral, including claims arising out of the loss or nonconformity of, interference with the use of, defects in, or infringement of rights in, or damage to, Collateral, (e) all amounts collected on, or distributed on account of, other Collateral, including dividends, interest, distributions and Instruments with respect to Investment Property and pledged Stock, and (f) any and all other amounts, rights to payment or other property acquired upon the sale, lease, license, exchange or other disposition of Collateral and all rights arising out of Collateral.
“Pro Forma” means the unaudited consolidated balance sheet of Borrower and its Subsidiaries as of [date] after giving pro forma effect to the Restructuring.
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“Pro Forma Basis” means, for purposes of determining compliance with any financial covenant or test hereunder and determining whether the conditions to the Incurrence of Indebtedness pursuant toSection 6.3 have been met, that the subject transaction shall be deemed to have occurred as of the first day of the four consecutive fiscal quarters most recently ended for which annual or quarterly financial statements shall have been delivered in accordance with the provisions hereof (the “Reference Period”). For purposes of making calculations on a “Pro Forma Basis” hereunder, (a) any Indebtedness to be Incurred by any Person in connection with the consummation of any Debt Issuance will be assumed to have been Incurred on the first day of the Reference Period, (b) the gross interest expenses, determined in accordance with GAAP, with respect to such Indebtedness assumed to have been Incurred on the first day of the Reference Period that bears interest at a floating rate shall be calculated at the current rate under the agreement governing such Indebtedness (including this Agreement if the Indebtedness is Incurred hereunder), and (c) any gross interest expense, determined in accordance with GAAP, Incurred during the Reference Period that was or is to be refinanced with proceeds of Indebtedness assumed to have been Incurred as of the first day of the Reference Period will be excluded from the calculation for which a Pro Forma Basis is being given.
“Projections” means Borrower’s forecasted consolidated: (a) balance sheets; (b) profit and loss statements; and (c) cash flow statements, in each case delivered to the Lenders prior to the Closing Date.
“Property” means any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible.
“Pro Rata Share” means with respect to all matters relating to any Lender (a) with respect to the Revolving Loan, the percentage obtained by dividing (i) the Revolving Loan Commitment of that Lender by (ii) the aggregate Revolving Loan Commitments of all Lenders, (b) with respect to the Term Loan, the percentage obtained by dividing (i) the Total Term Loan Commitment of that Lender by (ii) the aggregate Total Term Loan Commitments of all Lenders, as any such percentages may be adjusted by assignments permitted pursuant toSection 9.1, (c) with respect to all Loans, the percentage obtained by dividing (i) the aggregate Commitments of that Lender by (ii) the aggregate Commitments of all Lenders, and (d) with respect to all Loans on and after the Commitment Termination Date, the percentage obtained by dividing (i) the aggregate outstanding principal balance of the Loans held by that Lender, by (ii) the outstanding principal balance of the Loans held by all Lenders.
“PUC” means any state Governmental Authority that exercises jurisdiction over the rates or services or the acquisition, ownership, construction or operation of any telecommunications systems 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 such state, including, without limitation, the PUC of Alabama, the PUC of Missouri, the Department of Telecommunications and Cable of Massachusetts, the PUC of New Hampshire, Public Services Commission of West Virginia and the Public Utilities Commission of Maine.
“PUC Authorization” means any Governmental Authorization granted or issued by a PUC.
“PUC Restricted Subsidiary” means Mid-Maine Telecom and War Telephone.
“Qualified Plan” means a Pension Plan that is intended to be tax-qualified under Section 401(a) of the IRC.
“Qualified Assignee” means (a) any Lender (other than a Non-Funding Lender or Impacted Lender), any Affiliate (as defined in clause (a) and/or (b) of the definition of “Affiliate” in thisAnnex A) of any Lender (other than a Non-Funding Lender or Impacted Lender)and, with respect to any Lender (other than a Non-Funding Lender or Impacted Lender) that is an investment fund that invests in commercial loans, any other investment fund that invests in commercial loans and that is managed or advised by the same investment advisor as such Lender or by an Affiliate (as defined in clause (a) and/or (b) of the definition of “Affiliate” in thisAnnex A) of such investment advisor, and (b) any commercial bank, savings and loan association or savings bank or any other entity which is an “accredited investor” (as defined in Regulation D under the Securities Act) which extends credit or buys loans as one of its businesses, including insurance companies, mutual funds, lease financing companies and commercial finance companies, in each case, which has a rating of BBB or higher from S&P and a rating of Baa2 or higher from Moody’s at the date that it becomes a Lender and which, through its applicable lending office, is capable of lending to Borrower without the
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imposition of any withholding or similar taxes greater than those taxes imposed by the assigning Lender at the time of such assignment.
“Rate Contracts” means swap agreements (as such term is defined in Section 101 of the Bankruptcy Code) and any other agreements or arrangements designed to provide protection against fluctuations in interest or currency exchange rates.
“Real Estate” means all real property owned, leased, subleased or used by any Credit Party.
“Refunded Swing Line Loan” has the meaning ascribed to it inSection 1.1(c)(iii).
“Registration Rights Agreement” means the Registration Agreement of even date herewith entered into by and among the Lenders and each Credit Party that is a signatory thereto.
“Relationship Bank” means each of the banks specified onDisclosure Schedule (3.19) on the Closing Date and such other bank or banks reasonably acceptable to Agent.
“Release” means any release, spill, emission, leaking, pumping, pouring, emitting, emptying, escape, injection, deposit, disposal, discharge, dispersal, dumping, leaching or migration of Hazardous Material in the indoor or outdoor environment, including the movement of Hazardous Material through or in the air, soil, surface water, ground water or property.
“Requisite Lenders” means Lenders having (a) more than 50% of the Commitments of all Lenders, or (b) if the Commitments have been terminated, more than 50% of the aggregate outstanding amount of the Loans.
“Requisite Revolving Lenders” means Lenders having (a) more than 50% of the Revolving Loan Commitments of all Lenders, or (b) if the Revolving Loan Commitments have been terminated, more than 50% of the aggregate outstanding amount of the Revolving Loan.
“Requisite Term Lenders” means Lenders holding more than 50% of the aggregate principal amount of the Term Loan then outstanding.
“Reserves” means, as of any date, any reserve against the Borrowing Availability established by Agent pursuant toSection 1.3(b)(ii) orSection 5.4.
“Responsible Officer” means the chief executive officer, president, chief financial officer, principal accounting officer or treasurer of Borrower.
“Restricted Payment” means (a) the declaration or payment of any dividend or the Incurrence of any liability to make any other payment or distribution of cash or other property or assets in respect of Stock; (b) any payment on account of the purchase, redemption, defeasance, sinking fund or other retirement of any Credit Party’s Stock or any other payment or distribution made in respect thereof, either directly or indirectly; (c) any payment or prepayment of principal of, premium, if any, or interest, fees or other charges on or with respect to, and any redemption, purchase, retirement, defeasance, sinking fund or similar payment and any claim for rescission with respect to, any Subordinated Debt or any other Indebtedness of any Credit Party subordinated to any of the Obligations; (d) any payment made to redeem, purchase, repurchase or retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire Stock of any Credit Party now or hereafter outstanding; (e) any payment of a claim for the rescission of the purchase or sale of, or for material damages arising from the purchase or sale of, any shares of any Credit Party’s Stock or of a claim for reimbursement, indemnification or contribution arising out of or related to any such claim for damages or rescission; (f) any payment, loan, contribution, or other transfer of funds or other property to any Stockholder or Affiliate of any Credit Party other than payment of compensation in the ordinary course of business to Stockholders who are employees of such Credit Party; and (g) any payment of management fees (or other fees of a similar nature) by any Credit Party to any Stockholder of any Credit Party or its Affiliates.
“Retiree Welfare Plan” means, at any time, a Welfare Plan that provides for continuing coverage or benefits for any participant or any beneficiary of a participant after such participant’s termination of employment, other than continuation coverage provided pursuant to Section 4980B of the IRC and at the sole expense of the participant or the beneficiary of the participant.
“Revolving Credit Advance” has the meaning ascribed to it inSection 1.1(a)(i).
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“Revolving Lenders” means, as of any date of determination, Lenders having a Revolving Loan Commitment.
“Revolving Loan” means, at any time, the aggregate amount of Revolving Credit Advances outstanding to Borrower.
“Revolving Loan Commitment” means (a) as to any Revolving Lender, the aggregate commitment of such Revolving Lender to make Revolving Credit Advances as set forth onAnnex J to the Agreement or in the most recent Assignment Agreement executed by such Revolving Lender and (b) as to all Revolving Lenders, the aggregate commitment of all Revolving Lenders to make Revolving Credit Advances, which aggregate commitment shall be Five Million Dollars ($5,000,000) on the Closing Date, as such amount may be adjusted, if at all, from time to time in accordance with the Agreement.
“Revolving Note” has the meaning ascribed to it inSection 1.1(a)(ii).
“Sale/Leaseback Transaction” means an arrangement relating to property now owned or hereafter acquired by Borrower or a Subsidiary whereby Borrower or a Subsidiary transfers such property to a Person and Borrower or such Subsidiary leases it from such Person, other than leases between Borrower and a Wholly Owned Subsidiary or between Wholly Owned Subsidiaries.
“Secured Rate Contract” means any Rate Contract between Borrower and the counterparty thereto, which (i) has been provided or arranged by GE Capital or an Affiliate of GE Capital, or (ii) the Agent has acknowledged in writing constitutes a “Secured Rate Contract” hereunder.
“Secured Swap Provider” means (i) a Lender or an Affiliate of a Lender (or a Person who was a Lender or an Affiliate of a Lender at the time of execution and delivery of a Rate Contract) who has entered into a Secured Rate Contract with Borrower, or (ii) a Person with whom Borrower has entered into a Secured Rate Contract provided or arranged by GE Capital or an Affiliate of GE Capital, and any assignee thereof.
“Securities Offering” means any public or private sale of common stock or Preferred Stock of Borrower (other than Disqualified Stock), other than public offerings with respect to Borrower’s Common Stock registered on Form S-8 and the sales in respect of the Equity Documents.
“Security Agreement” means the Amended and Restated Security Agreement dated as of the date hereof entered into by and among Agent, on behalf of itself and Lenders, and each Credit Party that is a signatory thereto, together with any joinders and amendments to the Security Agreement executed from time to time.
“Solvent” means, with respect to any Person on a particular date, that on such date (a) the fair value of the property of such Person is greater than the total amount of liabilities, including contingent liabilities, of such Person; (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured; (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities mature; and (d) such Person is not engaged in a business or transaction, and is not about to engage in a business or transaction, for which such Person’s property would constitute an unreasonably small capital. The amount of contingent liabilities (such as litigation, guaranties and pension plan liabilities) at any time shall be computed as the amount that, in light of all the facts and circumstances existing at the time, represents the amount that can be reasonably be expected to become an actual or matured liability.
“Special Flood Hazard Area” means an area that FEMA’s current flood maps indicate has at least a one percent (1%) chance of a flood equal to or exceeding the base flood elevation (a 100-year flood) in any given year.
“Stock” means all shares, options, warrants, general or limited partnership interests, membership interests, participations or other equivalents (regardless of how designated) of or in a corporation, partnership, limited liability company or equivalent entity whether voting or nonvoting, including (i) common stock, preferred stock or any other “equity security” (as such term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934) and (ii) common stock represented by IDS Securities and common stock outstanding upon the separation of IDS Securities into the securities represented thereby.
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“Stock Issuance” means any issuance by any Credit Party of any Stock to any Person or receipt by any Credit Party of a capital contribution from any Person, including the issuance of Stock pursuant to the exercise of options or warrants and the conversion of any Indebtedness to Stock.
“Stockholder” means, with respect to any Person, each holder of Stock of such Person.
“Stockholders Agreement” means the Stockholders Agreement of even date herewith entered into by and among the Lenders and each Credit Party that is a signatory thereto.
“Subsidiary” means, with respect to any Person, (a) any corporation of which an aggregate of more than 50% of the outstanding Stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether, at the time, Stock of any other class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time, directly or indirectly, owned legally or beneficially by such Person or one or more Subsidiaries of such Person, or with respect to which any such Person has the right to vote or designate the vote of 50% or more of such Stock whether by proxy, agreement, operation of law or otherwise, and (b) any partnership or limited liability company in which such Person and/or one or more Subsidiaries of such Person shall have an interest (whether in the form of voting or participation in profits or capital contribution) of more than 50% or of which any such Person is a general partner or may exercise the powers of a general partner. Unless the context otherwise requires, each reference to a Subsidiary shall be a reference to a Subsidiary of the Borrower.
“Subsidiary Guarantor” means each Credit Party that is a Guarantor under the Subsidiary Guaranty.
“Subsidiary Guaranty” means the Subsidiary Guaranty executed by each Subsidiary of Borrower (other than the PUC Restricted Subsidiaries) in favor of Agent, on behalf of itself and Lenders, together with any joinders and amendments to the Subsidiary Guaranty executed from time to time.
“Swing Line Advance” has the meaning ascribed to it inSection 1.1(c)(i).
“Swing Line Availability” has the meaning ascribed to it inSection 1.1(c)(i).
“Swing Line Commitment” means, as to the Swing Line Lender, the commitment of the Swing Line Lender to make Swing Line Advances as set forth onAnnex J to the Agreement, which commitment constitutes a subfacility of the Revolving Loan Commitment of the Swing Line Lender.
“Swing Line Lender” means CoBank, ACB.
“Swing Line Loan” means at any time, the aggregate amount of Swing Line Advances outstanding to Borrower.
“Swing Line Note” has the meaning ascribed to it inSection 1.1(c)(ii).
“Taxes” means taxes, levies, imposts, deductions, Charges or withholdings, and all liabilities with respect thereto, excluding (i) taxes imposed on or measured by the net income of Agent or a Lender by the jurisdictions under the laws of which Agent and Lenders are organized or conduct business or any political subdivision thereof, (ii) any branch profits taxes under Section 884 of the Code or similar taxes imposed by any such jurisdictions, (iii) any taxes imposed as a result of any Foreign Lender failing to comply with Section 1.15(c), or (iv) any taxes pursuant to Sections 1471-1474 of the Code, any regulatory or other guidance issued thereunder, or any tax imposed pursuant to Sections 1471 through 1474 of the Code, including any implementing Treasury regulations and administrative pronouncements thereunder.
“Telecommunications Approvals” shall have the meaning ascribed to it inSection 3.1.
“Telecommunications Business” means the business of (i) transmitting or providing services relating to the transmission of voice, video or data through transmission facilities, (ii) constructing, creating, developing or producing communications networks, related network transmission, equipment, software, devices and content for use in a communications or content distribution business or (iii) evaluating, participating or pursuing any other activity or opportunity that is primarily related to (i) or (ii) above.
“Termination Date” means the date on which (a) the Loans have been indefeasibly repaid in full, (b) all other Obligations (other than contingent indemnity and expense reimbursement obligations for which no claim
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has been made) under the Agreement and the other Loan Documents have been completely discharged, and (c) Borrower shall not have any further right to borrow any monies under the Agreement.
“Term Lenders” means those Lenders having Total Term Loan Commitments.
“Term Lender Settlement Date” has the meaning assigned to it inSection 9.9(a)(iii).
“Term Loan” means the Existing Term Loan.
“Term Note” has the meaning assigned to it inSection 1.1(b)(i).
“Test Period” means each period of twelve fiscal months ended as provided in the relevant provision or definition in the Agreement.
“Title IV Plan” means a Pension Plan (other than a Multiemployer Plan), that is covered by Title IV of ERISA, and that any Credit Party or ERISA Affiliate maintains, contributes to or has an obligation to contribute to on behalf of participants who are or were employed by any of them.
“Total Term Loan Commitment” means, collectively, an amount equal to One Hundred Forty-Two Million and No/100 Dollars ($142,000,000.00).
“Trademark Security Agreements” means the Trademark Security Agreements made in favor of Agent, on behalf of Lenders, by each applicable Credit Party.
“Trademark License” means rights under any written agreement now owned or hereafter acquired by any Credit Party granting any right to use any Trademark.
“Trademarks” means all of the following now owned or hereafter adopted or acquired by any Credit Party: (a) all trademarks, trade names, corporate names, business names, trade styles, service marks, logos, other source or business identifiers, prints and labels on which any of the foregoing have appeared or appear, designs and general intangibles of like nature (whether registered or unregistered), all registrations and recordings thereof, and all applications in connection therewith, including registrations, recordings and applications in the United States Patent and Trademark Office or in any similar office or agency of the United States, any state or territory thereof, or any other country or any political subdivision thereof; (b) all reissues, extensions or renewals thereof; and (c) all goodwill associated with or symbolized by any of the foregoing.
“Trigger Event” has the meaning ascribed to such term inSection 5.18.
“Unfunded Pension Liability” means, at any time, the aggregate amount, if any, of the sum of (a) the amount by which the present value of all accrued benefits under each Title IV Plan exceeds the Fair Market Value of all assets of such Title IV Plan allocable to such benefits in accordance with Title IV of ERISA, all determined as of the most recent valuation date for each such Title IV Plan using the actuarial assumptions for funding purposes in effect under such Title IV Plan, and (b) for a period of 5 years following a transaction which might reasonably be expected to be covered by Section 4069 of ERISA, the liabilities (whether or not accrued) that could be avoided by any Credit Party or any ERISA Affiliate as a result of such transaction.
“Unused Commitment Fee” shall have the meaning ascribed to such term in Section1.19(b) of this Agreement.
“War Telephone” means War Telephone LLC, a Delaware limited liability company.
“Welfare Plan” means a Plan described in Section 3(i) of ERISA.
“Wholly Owned Subsidiary” of any Person means a Subsidiary of such Person 100% of the outstanding Stock or other ownership interests of which (other than directors’ qualifying shares) shall at the time be owned by such Person and/or by one or more Wholly Owned Subsidiaries of such Person.
Rules of construction with respect to accounting terms used in the Agreement or the other Loan Documents shall be as set forth inAnnex G. All other undefined terms contained in any of the Loan Documents shall, unless the context indicates otherwise, have the meanings provided for by the Code to the extent the same are used or defined therein; in the event that any term is defined differently in different Articles or Divisions of the Code, the definition contained in Article or Division 9 shall control. Unless otherwise specified, references in the Agreement or any of the Appendices to a Section, subsection or clause
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refer to such Section, subsection or clause as contained in the Agreement. The words “herein,” “hereof” and “hereunder” and other words of similar import refer to the Agreement as a whole, including all Annexes, Exhibits and Schedules, as the same may from time to time be amended, restated, modified or supplemented, and not to any particular section, subsection or clause contained in the Agreement or any such Annex, Exhibit or Schedule.
Any reference in the Agreement or any other Loan Document to a Loan Document shall include all appendices, exhibits or schedules thereto, and all amendments, restatements, supplements, joinders or other modifications thereto, and shall refer to the Agreement or such Loan Document as the same may be in effect at any and all times such reference becomes operative.
Wherever from the context it appears appropriate, each term stated in either the singular or plural shall include the singular and the plural, and pronouns stated in the masculine, feminine or neuter gender shall include the masculine, feminine and neuter genders. The words “including”, “includes” and “include” shall be deemed to be followed by the words “without limitation”; the word “or” is not exclusive; references to Persons include their respective successors and assigns (to the extent and only to the extent permitted by the Loan Documents) 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 the same and any successor statutes and regulations. Whenever any provision in any Loan Document refers to the “actual knowledge” of any Credit Party, such words are intended to signify that such Credit Party has actual knowledge or awareness of a particular fact or circumstance. Whenever any provision in any Loan Document refers to the “knowledge” (or an analogous phrase) of any Credit Party without the word “actual”, such words are intended to signify that such Credit Party has actual knowledge or awareness of a particular fact or circumstance or that such Credit Party, if it had exercised reasonable diligence, would have known or been aware of such fact or circumstance.
“Working Capital” means, with respect to any Credit Party, such Credit Party’s Current Assets (excluding cash) less its Current Liabilities.
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ANNEX B
B-1
Each Credit Party (other than a PUC Restricted Subsidiary) shall establish and maintain the Cash Management Systems described below. It is understood that each reference to a “Credit Party” or a “Subsidiary” in thisAnnex C only shall constitute a reference to each Credit Party or Subsidiary other than a PUC Restricted Subsidiary.
(a) On or before the Closing Date, the applicable Credit Party shall cause each Blocked Account maintained by such Credit Party at a Relationship Bank to become subject to a tri-party blocked account agreement in accordance with paragraph (c) of this Annex C. Except for such closures or replacements expressly permitted or required by paragraph (d) of this Annex C, the Credit Parties shall, until the Termination Date, at all times maintain each Blocked Account at the Relationship Bank at which such account was established. On or before the Closing Date and until the Termination Date, each applicable Credit Party shall (i) request in writing and otherwise take reasonable steps to ensure that all Account Debtors forward payment directly to one or more Blocked Accounts or to Borrower or the applicable Subsidiary and (ii) deposit and cause its Subsidiaries to deposit or cause to be deposited promptly, and in any event no later than the second Business Day after the receipt thereof, all cash, checks, drafts or other similar items of payment relating to or constituting payments made in respect of any and all Collateral into one or more Blocked Accounts or, to the extent permitted by paragraph (b) of this Annex C, into one or more Excluded Accounts or Disbursement Accounts.
(b) Each Credit Party may maintain, in its name, at a Relationship Bank, one or more Disbursement Accounts. No Credit Party shall accumulate or maintain cash in Disbursement Accounts as of any date of determination in excess of (x) checks outstanding against such accounts and paid as of such date, (y) payroll requirements outstanding and paid as of such date, and (z) amounts necessary to meet ordinary course minimum balance requirements of the applicable Relationship Bank in respect thereof as of such date. Each Credit Party may maintain, in its name, at a Relationship Bank, one or more Excluded Accounts. The Credit Parties agree that at no time shall the aggregate amount on deposit in all Excluded Accounts and all other accounts of the Credit Parties (other than Disbursement Accounts or Blocked Accounts) exceed $100,000 in the aggregate at any time (after giving effect to any hold period) for all Credit Parties combined (the “Threshold Amount”);provided;however, that no Event of Default shall occur solely by reason of the amount on deposit in all Excluded Accounts and such other accounts combined exceeding the Threshold Amount if (i) the amount in excess of the Threshold Amount is transferred to a Blocked Account within one Business Day of such excess having occurred and (ii) at the close of business on such Business Day the amount on deposit in all Excluded Accounts and such other accounts combined does not exceed the Threshold Amount.
(c) On or before the Closing Date each Relationship Bank shall have, in respect of each Blocked Account located at such Relationship Bank, entered into a tri-party blocked account agreement with Agent, for the benefit of itself and Lenders, and Credit Parties, as applicable, in form and substance reasonably acceptable to Agent, which shall become operative on or prior to the Closing Date. Unless Agent shall agree otherwise, each such blocked account agreement (and each blocked account agreement referred to in paragraph (b) and (d) of this Annex C) shall provide, among other things, that (i) all items of payment deposited in such account are held by such bank as agent or bailee-in-possession for Agent, on behalf of itself and Lenders, (ii) the bank executing such agreement has no rights of setoff or recoupment or any other claim against such account, as the case may be, other than for payment of its service fees and other charges directly related to the administration of such account and for returned checks or other items of payment, and (iii) from and after the Closing Date with respect to banks at which a Blocked Account is maintained, such bank agrees, from and after the receipt of a notice (an “Activation Notice”) from Agent (which Activation Notice may be given by Agent at any time at which an Event of Default has occurred and is continuing (an “Activation Event”)), to forward immediately all amounts in each Blocked Account to the Collection Account through daily sweeps from such Blocked Account into the Collection Account.
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(d) After the Closing Date, no Credit Party shall (i) close any deposit or other account, (ii) establish any deposit or other account or (iii) continue to maintain such Credit Party’s deposit or other accounts;provided,however, that
(A) a Credit Party may (I) close a deposit account in accordance with the final sentence of this paragraph (d), (II) close a Disbursement Account or Excluded Account so long as all amounts on deposit therein, if any, shall have been transferred to a Blocked Account prior to the closure thereof and (III) with the prior written consent of Agent, close a Blocked Account so long as all amounts on deposit therein, if any, shall have been transferred to another Blocked Account prior to the closure thereof;
(B) [Intentionally Omitted];
(C) so long as no Event of Default has occurred and is continuing, any Credit Party may establish a deposit account at a Relationship Bank subject to the satisfaction of the following conditions:
(I) Borrower shall have delivered to Agent (1) written notice setting forth the Relationship Bank at which such account shall be established, whether the applicable account is either a “Blocked Account”, “Disbursement Account” or “Excluded Account” for purposes of this Annex C and a description of the proposed use therefor and (2) an amendedDisclosure Schedule (3.19) reflecting the information specified in the immediately preceding clause (1); and
(II) in the case of a Blocked Account, prior to the time of the opening thereof, the applicable Credit Party, the Relationship Bank at which such Blocked Account is located and Agent shall have executed and delivered to Agent a tri-party blocked account agreement with respect to such account, in form and substance reasonably satisfactory to Agent.
Borrower shall deliver to Agent (1) a list of all deposit accounts maintained by the Credit Parties together with the delivery of annual audited consolidated financial statements in accordance with paragraph (b) of Annex E and (2) within five (5) Business Days after the request of Agent, information concerning such accounts (including deposits and withdrawals therefrom) as Agent may reasonably request. Borrower shall, or, as applicable, shall cause its applicable Subsidiary to, close a deposit account or accounts (and establish replacement deposit accounts in accordance with clause (C) of this paragraph (d)) promptly and in any event within 30 days following notice from Agent that the creditworthiness of any bank holding the referenced account or accounts is no longer acceptable in Agent’s reasonable judgment, or as promptly as practicable and in any event within sixty (60) days following notice from Agent that the operating performance, funds transfer or availability procedures or performance with respect to accounts of the bank holding such account or accounts or Agent’s liability under any tri-party blocked account agreement with such bank is no longer acceptable in Agent’s reasonable judgment.
(e) The Blocked Accounts, Disbursement Accounts and Excluded Accounts shall be cash collateral accounts, with all cash, checks and other similar items of payment in such accounts securing payment of the Loans and all other Obligations, and in which Borrower and each Subsidiary thereof shall have granted a Lien to Agent, on behalf of itself and Lenders, pursuant to the Security Agreement.
(f) All amounts deposited in the Collection Account shall be deemed received by Agent in accordance withSection 1.10 and shall be applied (and allocated) by Agent in accordance withSection 1.11. In no event shall any amount be so applied unless and until such amount shall have been credited in immediately available funds to the Collection Account.
(g) Borrower shall and shall cause its Subsidiaries, officers, employees, agents, directors or other Persons acting for or in concert with the Credit Parties, each a “Related Person”) to (i) hold in trust for Agent, for the benefit of itself and Lenders, all checks, cash and other items of payment received by Borrower or any such Related Person, and (ii) within two (2) Business Days after receipt by Borrower or any such Related Person of any checks, cash or other items of payment, deposit the same into a Blocked Account. Borrower on behalf of itself and each Related Person thereof acknowledges and agrees that all cash, checks or other items of payment constituting proceeds of Collateral are part of the Collateral. All proceeds of the sale or other disposition of any Collateral shall be deposited directly into Blocked Accounts.
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ANNEX D (Section 2.1(a))
EXECUTION CLOSING CHECKLIST
In addition to, and not in limitation of, the conditions described inSection 2.1 of the Agreement, pursuant toSection 2.1(a), the following items must be received by Agent and Lenders in form and substance satisfactory to Agent and Lenders on or prior to the Closing Date (each capitalized term used but not otherwise defined herein shall have the meaning ascribed thereto in Annex A to the Agreement):
A. Appendices. All Appendices to the Agreement, in form and substance satisfactory to Agent.
B. Insurance. Satisfactory evidence that the insurance policies required bySection 5.4 with respect to the Credit Parties are in full force and effect, together with appropriate evidence showing loss payable and/or additional insured clauses or endorsements, as requested by Agent, in favor of Agent, on behalf of Lenders.
C. Security Interests and Code Filings. (a) Evidence satisfactory to Agent that Agent (for the benefit of itself and Lenders) continues to have a valid and perfected first priority security interest in the Collateral, including (i) such documents duly executed by each Credit Party (including financing statements under the Code and other applicable documents under the laws of any jurisdiction with respect to the perfection of Liens) as Agent may request in order to perfect its security interests in the Collateral, (ii) copies of Code search reports listing all effective financing statements that name any Credit Party as debtor, together with copies of such financing statements, none of which shall cover the Collateral, except for those relating to the Prior Lender Obligations (all of which shall be terminated on the Closing Date, as applicable) and others approved by Agent, and (iii) a perfection certificate duly executed on behalf of each Credit Party.
(b) Evidence satisfactory to Agent, including copies, of all UCC-1 and other financing statements filed in favor of any Credit Party with respect to each location, if any, at which Inventory may be consigned.
(c) Control Letters from (i) all issuers of uncertificated securities and financial assets, if any, held by any Credit Party (other than any PUC Restricted Subsidiary and other than the CoBank equity), (ii) all securities intermediaries with respect to all securities accounts and securities entitlements, if any, of any Credit Party (other than any PUC Restricted Subsidiary), and (iii) all futures commission agents and clearing houses with respect to all commodities contracts and commodities accounts, if any, held by any Credit Party (other than any PUC Restricted Subsidiary).
D. [Intentionally Omitted].
F. Cash Management System; Blocked Account Agreements. Evidence satisfactory to Agent that, as of the Closing Date, Cash Management Systems complying withAnnex C to the Agreement with respect to the Credit Parties have been established and are currently being maintained in the manner set forth in suchAnnex C, together with copies of duly executed tri-party blocked account agreements, reasonably satisfactory to Agent, with the banks as required byAnnex C.
G. Initial Notice of Revolving Credit Advance. Duly executed originals of a Notice of Revolving Credit Advance, dated the Closing Date, with respect to any Revolving Credit Advance to be requested by Borrower on the Closing Date.
H. Charter and Good Standing. For each Credit Party, such Person’s (a) charter and all amendments thereto, (b) good standing certificates (including verification of tax status) in its state of incorporation or organization, (c) good standing certificates (including verification of tax status) and (d) certificates of qualification to conduct business in each jurisdiction where its ownership or lease of property or the conduct of its business requires such qualification, each dated a recent date prior to the Closing Date and certified by the applicable Secretary of State or other authorized Governmental Authority.
I. Bylaws and Resolutions. For each Credit Party, (a) such Person’s bylaws and all charter documents including partnership and/or operating agreements, together with all amendments thereto and (b) resolutions of such Person’s board of directors and partners, members and stockholders, as applicable,
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approving and authorizing the execution, delivery and performance of the Loan Documents required to be executed and delivered on the Closing Date to which such Person is a party and the transactions to be consummated in connection therewith, each certified as of the Closing Date by such Person’s corporate or organizational secretary or an assistant secretary as being in full force and effect without any modification or amendment.
J. Incumbency Certificates. For each Credit Party, signature and incumbency certificates of the officers of each such Person executing any of the Loan Documents, certified as of the Closing Date by such Person’s corporate secretary or an assistant secretary as being true, accurate, correct and complete.
K. Opinions of Counsel. Duly executed original opinion of Dorsey & Whitney LLP, counsel for the Credit Parties
L. [Intentionally Omitted].
M. [Intentionally Omitted].
N. Officer’s Certificate. Agent shall have received duly executed originals of a certificate of the chief executive officer and chief financial officer of Borrower, dated the Closing Date, confirming compliance with the conditions set forth inSection 2.2 at the Third Restatement Closing Date.
O. Waivers. Agent, on behalf of Lenders, shall have received landlord waivers and consents, bailee letters and mortgagee agreements in form and substance reasonably satisfactory to Agent, in each case as required pursuant toSection 5.9.
P. Audited Financials; Financial Condition. Agent shall have received the Financial Statements, Projections and other materials set forth inSection 3.4(a) and (c) which are required to be delivered as of the Closing Date, certified by Borrower’s chief financial officer, in each case in form and substance satisfactory to Agent, and Agent shall be satisfied, in its sole discretion, with all of the foregoing.
Q. [Intentionally Omitted].
R. Intellectual Property Security Agreements. Duly executed originals of Trademark Security Agreements, Copyright Security Agreements and Patent Security Agreements, each dated the Closing Date and signed by each Credit Party (other than the PUC Restricted Subsidiaries) which owns Trademarks, Copyrights and/or Patents, as applicable, all in form and substance reasonably satisfactory to Agent, together with all instruments, documents and agreements executed pursuant thereto.
S. Revolving Notes, Swing Line Note and Term Notes. To the extent requested by a Lender, duly executed originals of the Revolving Notes, Swing Line Note and Term Notes for each applicable Lender, dated the Original Closing Date or the Closing Date, as applicable.
T. Title Insurance. Agent shall received updated title insurance policies, along with Date Down endorsements, which shall be satisfactory to Agent in Agent’s sole discretion.
U. Class B Equity. Agent shall have confirmed that each Lender has received its Pro Rata Share of the Class B. Equity.
V. Plan of Reorganization Distribution. Each Lender shall have received its Pro Rata Share of the Senior Secured Term Loan Payment (as defined in the Plan of Reorganization) and shall have been paid all interest and expenses that were accrued and unpaid under the Existing Credit Agreement as of the Closing Date.
U. Other Documents. Such other certificates, documents and agreements respecting any Credit Party as Agent may reasonably request.
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ANNEX E (Section 4.1(a))
FINANCIAL STATEMENTS AND PROJECTIONS — REPORTING
Borrower shall deliver or cause to be delivered to Agent or to Agent and Lenders, as indicated, the following:
(a) Monthly Financials. As soon as available, but in any event within 30 days after the end of each fiscal month of each year (commencing with the first full fiscal month following the Closing Date), (i) the unaudited consolidated and consolidating balance sheets of the consolidated Borrower and each of its consolidating Subsidiaries and operating regions as of the end of such month, and the related consolidated and consolidating statements of income or operations, stockholders’ equity and cash flows for such month and for the portion of the Borrower’s Fiscal Year then ended in the case of the consolidated statements of income or operations and cash flows for such month (A) compared to the budget for such year delivered pursuant to Annex E (c) and (B) setting forth in comparative form for the corresponding month of the previous Fiscal Year and the corresponding portion of the previous Fiscal Year, and (ii) a schedule of revenues, operating income and operating metrics (such as access line equivalents) by geographic region, all in reasonable detail and duly certified by the chief executive officer, chief financial officer, treasurer or controller of the Borrower as being complete and correct and fairly presenting, in all material respects, in accordance with GAAP, the financial position and the results of operations of Borrower and its Subsidiaries, subject to normal year-end adjustments and absence of footnote disclosures.
(b) Quarterly Financials. To Agent and Lenders, within forty-five (45) days after the end of each Fiscal Quarter, the following consolidated financial statements for Borrower and its Subsidiaries, certified by the chief financial officer of Borrower: (i) unaudited balance sheets as of the close of such Fiscal Quarter and the related statements of income and cash flow for that portion of the Fiscal Year ending as of the close of such Fiscal Quarter and (ii) unaudited statements of income and cash flows for such Fiscal Quarter, in each case setting forth in comparative form the figures for the corresponding period in the prior year and the figures contained in the Projections for such Fiscal Year, all prepared in accordance with GAAP (subject to normal year-end adjustments and the absence of footnotes). Such financial statements shall be accompanied by (A) a statement in reasonable detail (each, a “Compliance Certificate”) signed by a Responsible Officer of Borrower (i) showing the calculations used in determining compliance with each of the Financial Covenants that is tested on a quarterly basis, (ii) showing the calculations of the Consolidated Fixed Charge Coverage Ratio and Consolidated Total Leverage Ratio for the Credit Parties for the four-fiscal quarter period ending on the last day of the period covered by such financial statements, (iii) certifying whether a Dividend Suspension Period or Interest Deferral Period shall have occurred and be continuing, (iv) certifying as to the number of access lines operated by the Credit Parties as of the end of the prior Fiscal Quarter and (v) showing the calculations of Excess Cash, in each case, for the prior Fiscal Quarter and (B) the certification of the chief financial officer of Borrower that (i) such financial statements present fairly in all material respects in accordance with GAAP (subject to normal year-end adjustments and the absence of footnotes) the financial position and results of operations and cash flows of Borrower and its Subsidiaries, on a consolidated basis, as at the end of such Fiscal Quarter and for that portion of the Fiscal Year then ended, (ii) any other information presented is true, correct and complete in all material respects and that there was no Default or Event of Default in existence as of such time or, if a Default or Event of Default has occurred and is continuing, describing the nature thereof and all efforts undertaken to cure such Default or Event of Default. In addition, Borrower shall deliver to Agent and Lenders, within forty-five (45) days after the end of each Fiscal Quarter, a management discussion and analysis that includes a comparison to budget for that portion of the Fiscal Year ending as of the close of such Fiscal Quarter and a comparison of performance for that portion of the Fiscal Year ending as of the close of such Fiscal Quarter to the corresponding period in the prior year.
(c) Operating Plan. To Agent and Lenders, as soon as available, but not later than thirty (30) days after the end of each Fiscal Year, an annual operating plan for Borrower, approved by the board of directors of Borrower, for the following Fiscal Year, which (i) includes a statement of all of the material assumptions on which such plan is based, (ii) includes a monthly budget for the following year and (iii) integrates sales, gross
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profits, operating expenses, operating profit and cash flow projections, all prepared on the same basis and in similar detail as that on which operating results are reported (and in the case of cash flow projections, representing management’s good faith estimates of future financial performance based on historical performance), and including plans for personnel, Consolidated Capital Expenditures and facilities.
(d) Annual Audited Financials. To Agent and Lenders, within ninety (90) days after the end of each Fiscal Year, audited Financial Statements for Borrower and its Subsidiaries on a consolidated basis, consisting of balance sheets and statements of income and retained earnings and cash flows, setting forth in comparative form in each case the figures for the previous Fiscal Year, which Financial Statements shall be prepared in accordance with GAAP and certified without qualification as to going concern status or like qualification or scope of the audit, by an independent certified public accounting firm of national standing or otherwise acceptable to Agent. Such Financial Statements shall be accompanied by (i) a statement prepared in reasonable detail showing the calculations used in determining compliance with each of the Financial Covenants, (ii) a report from such accounting firm to the effect that, in connection with their audit examination, nothing has come to their attention to cause them to believe that a Default or Event of Default has occurred (or specifying those Defaults and Events of Default that they became aware of), it being understood that such audit examination extended only to accounting matters and that no special investigation was made with respect to the existence of Defaults or Events of Default, (iii) a letter addressed to Agent, on behalf of itself and Lenders, in form and substance reasonably satisfactory to Agent and subject to standard qualifications required by nationally recognized accounting firms, signed by such accounting firm acknowledging that Agent and Lenders are entitled to rely upon such accounting firm’s certification of such audited Financial Statements, (iv) the annual letters to such accountants in connection with their audit examination detailing contingent liabilities and material litigation matters, and (v) the certification of the chief executive officer or chief financial officer of Borrower that all such Financial Statements present fairly in all material respects in accordance with GAAP the financial position and results of operations and cash flows of Borrower and its Subsidiaries on a consolidated basis, as at the end of such Fiscal Year and for the period then ended, and that there was no Default or Event of Default in existence as of such time or, if a Default or Event of Default has occurred and is continuing, describing the nature thereof and all efforts undertaken to cure such Default or Event of Default.
(e) Management Letters. To Agent and Lenders, within five (5) Business Days after receipt thereof by any Credit Party, copies of all management letters, exception reports or similar letters or reports received by such Credit Party from its independent certified public accountants.
(f) Default Notices. To Agent and Lenders, as soon as practicable, and in any event within five (5) Business Days after an executive officer of Borrower has actual knowledge of the existence of any Default, Event of Default or other event that has had a Material Adverse Effect, telephonic or telecopied notice specifying the nature of such Default or Event of Default or other event, including the anticipated effect thereof, which notice, if given telephonically, shall be promptly confirmed in writing on the next Business Day.
(g) SEC Filings and Press Releases. To Agent and Lenders, promptly upon their becoming available, copies of (or, if made publicly available on publicly accessible electronic medium (e.g. internet, EDGAR or other another similar medium), notice of posting to such electronic media): (i) all Financial Statements, reports, notices and proxy statements made publicly available by any Credit Party to its security holders generally; (ii) all regular and periodic reports and all registration statements and prospectuses, if any, filed by any Credit Party with any securities exchange or with the Securities and Exchange Commission or any governmental or private regulatory authority; and (iii) all press releases and other statements made available by any Credit Party to the public concerning material changes or developments in the business of any such Person.
(h) Equity Notices. To Agent and Lenders, as soon as practicable, copies of all material written notices given or received by any Credit Party with respect to any Stock of such Person,.
(i) Supplemental Schedules. To Agent and Lenders, supplemental disclosures, if any, required bySection 5.6.
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(j) Litigation. To Agent and Lenders in writing, promptly upon learning thereof, notice of any Litigation commenced or threatened against any Credit Party that (i) seeks damages in excess of $500,000, (ii) seeks injunctive relief, (iii) is asserted or instituted against any Plan, its fiduciaries or its assets or against any Credit Party or ERISA Affiliate in connection with any Plan, (iv) alleges criminal misconduct by any Credit Party, or (v) alleges the violation of any law regarding, or seeks remedies in connection with, any Environmental Liabilities reasonably likely to be in excess of $500,000.
(k) Insurance Notices. To Agent and Lenders, disclosure of losses or casualties required bySection 5.4.
(l) Lease Default Notices. To Agent, within two (2) Business Days after receipt thereof, copies of (i) any and all default notices received under or with respect to any leased location or public warehouse where Collateral having a value, individually or in the aggregate, in excess of $250,000 is stored or located, and (ii) such other notices or documents with respect to such leased locations or public warehouses as Agent may reasonably request.
(m) Lease Amendments. To Agent, within two (2) Business Days after receipt thereof, copies of any amendment to a lease of Material Real Estate.
(n) Regulatory Notices. To Agent and Lenders, promptly upon receipt of notice of (i) any actual or threatened forfeiture, non-renewal, cancellation, termination, revocation, suspension, impairment or material modification of any material Telecommunications Approval held by any Credit Party, or any notice of default or forfeiture with respect to any such material Telecommunications Approval, or (ii) any refusal by the FCC, any PUC or any Franchising Authority to renew or extend any such material Communications License, a certificate of an Responsible Officer specifying the nature of such event, the period of existence thereof, and what action such Credit Party is taking and propose to take with respect thereto.
(o) Change of Location. To Agent and Lenders, within ten (10) Business Days after the change of location thereof, notice of change in locations at which Collateral having a value, individually or in the aggregate, in excess of $100,000, is held or stored, or the location of its records concerning such Collateral.
(p) Other Documents. To Agent and Lenders, such other financial and other information respecting any Credit Party’s business or financial condition as Agent or any Lender shall, from time to time, reasonably request.
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ANNEX F (Section 4.1(b))
Borrower shall deliver or cause to be delivered the following:
(a) [Intentionally Omitted]
(b) [Intentionally Omitted]
(c) �� [Intentionally Omitted]
(d) To Agent, at the time of delivery of each of the quarterly Financial Statements delivered pursuant toAnnex E, (i) a listing of government contracts of Borrower subject to the Federal Assignment of Claims Act of 1940; and (ii) a list of any applications for the registration of any Patent, Trademark or Copyright filed by any Credit Party with the United States Patent and Trademark Office, the United States Copyright Office or any similar office or agency in the prior Fiscal Quarter;
(e) [Intentionally Omitted]
(f) To Agent, at Borrower’s expense, such appraisals of its assets as Agent may reasonably request at any time after the occurrence and during the continuance of a Default or an Event of Default, such appraisals to be conducted by an appraiser, and in form and substance reasonably satisfactory to Agent; and
(g) Such other reports, statements and reconciliations with respect to the Collateral or Obligations of any or all Credit Parties as Agent or any Lender shall from time to time request in its reasonable discretion.
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ANNEX G (Section 6.10)
Borrower shall not breach or fail to comply with any of the following financial covenants, each of which shall be calculated in accordance with GAAP consistently applied:
(a) Minimum Consolidated Fixed Charge Coverage Ratio. Credit Parties shall have, at the end of each Fiscal Quarter, a Consolidated Fixed Charge Coverage Ratio for the Test Period ending with such Fiscal Quarter of not less than [__] to [__].
(b) Maximum Consolidated Total Leverage Ratio. Credit Parties shall have, at the end of each Fiscal Quarter, a Consolidated Total Leverage Ratio as of the last day of such Fiscal Quarter and for the Test Period ending with such Fiscal Quarter of not more than [__] to 1.00.
All accounting determinations required to be made pursuant hereto shall, unless expressly otherwise provided herein, be made in accordance with GAAP. No change in the accounting principles used in the preparation of any financial statement hereafter adopted by Borrower shall be given effect for purposes of measuring compliance with any provision of this Agreement (including, for the avoidance of doubt, this Annex G) unless Borrower, Agent and the Requisite Lenders agree to modify such provisions to reflect such changes in GAAP and, unless such provisions are modified, all financial statements, Compliance Certificates and similar documents provided hereunder shall be provided together with a reconciliation between the calculations and amounts set forth therein before and after giving effect to such change in GAAP. Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to in this Agreement (including, for the avoidance of doubt, Annex G) shall be made, without giving effect to any election under Accounting Standards Codification 825-10 (or any other Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of any Credit Party or any Subsidiary of any Credit Party at “fair value.” A breach of a financial covenant contained in this Agreement (including, for the avoidance of doubt, Annex G) shall be deemed to have occurred as of any date of determination by Agent or as of the last day of any specified measurement period, regardless of when the financial statements reflecting such breach are delivered to Agent.
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ANNEX H (Section 9.9(a))
LENDERS’ WIRE TRANSFER INFORMATION
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ANNEX I (Section 11.10)
| | | | If to Agent or GE Capital, at |
| |
| | | | General Electric Capital Corporation
201 Merritt 7
Norwalk, CT 06851
Attention: Scott Javor, Account Manager
Telecopier No.: 203-749-4166
Telephone No.: 203-956-4102 |
| |
| | | | |
| |
| | | | King & Spalding LLP
1180 Peachtree Street
Atlanta, GA 30309Attention: Carolyn Z. Alford, Esq.
Telecopier No.: 404-572-3551
Telephone No.: 404-572-5128
|
| |
| | | | |
| |
| | | | General Electric Capital Corporation
201 Merritt 7
Norwalk, CT 06851
Attention: Corporate Counsel-Global Media & Communications
Telecopier No.: 203-956-4258
Telephone No.: 203-956-4785 |
| |
| | | | |
| |
| | | | CoBank, ACB
5500 South Quebec Street
Greenwood Village, Colorado 80111
Attention: Communications and Energy Banking Group
Telecopier No.: 303-224-2639
|
| |
| | | | If to Raymond James, FSB, at: |
| |
| | | | Raymond James, FSB
710 Carrillon Parkway
St. Petersburg, Florida 33716
Attention: Andrew D. Hahn
Telecopier No.: 727-567-8830
Telephone No.: 727-567-7762
|
| |
| | | | |
| |
| | | | Raymond James, FSB
710 Carrillon Parkway
St. Petersburg, Florida 33716
Attention: Loan Operations Administrator
Telecopier No.: 866-597-4002
Telephone No.: 727-567-1815 |
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| | | | If to Union Bank of California, N.A., at: |
| |
| | | | Union Bank of California, N.A
445 South Figueroa Street
Los Angeles, California 90071
Attention: Richard Vian, Vice President
Telecopier No.: 213-236-5747
Telephone No.: 213-236-6515 |
| |
| | | | |
| |
| | | | Union Bank of California, N.A
445 South Figueroa Street
Los Angeles, California 90071
Attention: David Hill, Assistant Vice President
Telecopier No.: 213-236-5747
Telephone No.: 213-236-6516 |
| |
| | | | If to Webster Bank, N.A. at: |
| |
| | | | Webster Bank, N.A.
City Place II
185 Asylum Street, 5th Floor
Hartford, Connecticut 06103-3494
Attention: Madeliene Follett
Telecopier No.: 860-692-1604
Telephone No.: 860-692-1603 |
| |
| | | | |
| |
| | | | Emmet, Marvin & Martin, LLP
120 Broadway, 32nd Floor
New York, New York 10271
Telecopier No.: 212-238-3100
Telephone No.: 212-238-3127 |
| |
| | | | |
| |
| | | | CIBC, INC.
300 Madison Avenue, 4th floor
New York, NY 10017
Attention: Michael Gewirtz, Director, CIBC World Markets
Telephone No.: 212-856-3562
Telecopier No.: 212-856-3991 |
| |
| | | | |
| |
| | | | CIBC, INC.
300 Madison Avenue, 4th floor
New York, NY 10017
Attention: Zhen Ma, Analyst, CIBC World Markets
Telephone No.: 212-856-6766
Telecopier No.: 212-856-3991 |
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| | | | |
| |
| | | | Otelco Inc.
505 3rd Avenue East
Oneonta, Alabama 35121
Attention: President
Telecopier No.: 205-274-8999
Telephone No.: 205-625-3574 |
| |
| | | | |
| |
| | | | Dorsey & Whitney LLP
51 West 52nd Street
New York, New York 10019-6119
Attention: Steven Khadavi
Telecopier No.: 646-390-6549
Telephone No.: 212-415-9200 |
| |
| | | | If to any other Credit Party, at |
| |
| | | | c/o Otelco Inc.
505 3rd Avenue East
Oneonta, Alabama 35121
Attention: President
Telecopier No.: 205-274-8999
Telephone No.: 205-625-3574 |
| |
| | | | |
| |
| | | | Dorsey & Whitney LLP
51 West 52nd Street
New York, New York 10019-6119
Attention: Steven Khadavi
Telecopier No.: 646-390-6549
Telephone No.: 212-415-9200 |
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ANNEX J (from Annex A — Commitments definition)
Lenders:
GENERAL ELECTRIC CAPITAL CORPORATION
Revolving Loan Commitment: | | | | |
Total Term Loan Commitment: | | | | |
COBANK, ACB
Revolving Loan Commitment (including a Swing Line Commitment of $1,500,000): | | | | |
Total Term Loan Commitment: | | | | |
RAYMOND JAMES, FSB
Revolving Loan Commitment: | | | | |
Total Term Loan Commitment: | | | | |
UNION BANK OF CALIFORNIA, N.A.
Revolving Loan Commitment: | | | | |
Total Term Loan Commitment: | | | | |
WEBSTER BANK, N.A.
Revolving Loan Commitment: | | | | |
Total Term Loan Commitment: | | | | |
CIBC, INC.
Total Term Loan Commitment: | | | | |
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EXHIBIT 2
New Stockholders Agreement
STOCKHOLDERS’ AGREEMENT
THIS STOCKHOLDERS’ AGREEMENT (this “Agreement”), dated as of , 2013, by and among OTELCO INC. (the “Company”), a Delaware corporation, GE CAPITAL EQUITY INVESTMENTS, INC., a Delaware corporation (“GE Capital”), COBANK, ACB (“CoBank”), RAYMOND JAMES BANK, FSB (“Raymond James”), UNION BANK OF CALIFORNIA, N.A. (“Union Bank”), WEBSTER BANK, NATIONAL ASSOCIATION (“Webster Bank”), and CIBC, INC. (“CIBC”).
WITNESSETH:
WHEREAS, pursuant to the terms of the Joint Prepackaged Plan of Reorganization for Otelco Inc. and Its Affiliated Debtors, dated as of [ ], 2013, the Stockholders have acquired from the Company the shares of Class B Common Stock set forth opposite their respective names onSchedule I hereto; and
WHEREAS, the Company and the Stockholders believe that it is in the best interest of the Company and the Stockholders that provision be made for the continuity and stability of the business and policies of the Company, and, accordingly, desire to make certain arrangements among themselves with respect to certain matters set forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual covenants and obligations hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
SECTION 1. Definitions. As used herein, the following terms have the following respective meanings:
(a) “Affiliate” means any Person who or which, directly or indirectly, through one or more intermediaries, controls or is controlled by, or is under common control with, any specified Person.
(b) “Amended Credit Agreement” means the Third Amended and Restated Credit Agreement, dated as of [ ], 2013, among the Company, the other persons designated therein as “Credit Parties”, General Electric Capital Corporation, acting as agent on behalf of itself as a lender and the other lenders signatory thereto from time to time (as such Amended Credit Agreement may be amended, modified, restated, supplemented, refunded, replaced or refinanced from time to time).
(c) “Capital Stock” means, collectively, the shares of Class A Common Stock, Class B Common Stock and any class or series of common stock or preferred stock of the Company authorized after the date hereof, or any other class or series of stock resulting from successive changes or reclassifications of any class or series of common stock or preferred stock of the Company.
(d) “Certificate of Incorporation” means the Amended and Restated Certificate of Incorporation of the Company, as the same may be amended, modified, restated or supplemented from time to time.
(e) “Class A Common Stock” means the shares of Class A common stock, $0.01 par value per share, of the Company.
(f) “Class B Common Holder” means GE Capital, CoBank, Raymond James, Union Bank of California, Webster Bank and CIBC, individually, and any subsequent Permitted Transferee of any of his, her or its shares of Class B Common Stock.
(g) “Class B Common Stock” means the shares of Class B common stock, $0.01 par value per share, of the Company.
(h) “Dispose” or “Disposition” (and any derivatives thereof) means (i) a voluntary or involuntary sale, assignment, mortgage, grant, pledge, hypothecation, exchange, transfer, conveyance or other disposition of a Stockholder’s Shares and (ii) any agreement, contract or commitment to do any of the foregoing.
(i) “Eligible Purchaser” means, with respect to any issuance of New Issuance Securities, a Stockholder or its designee so long as such Stockholder (or its designee) is an accredited investor (as such term is defined in Rule 501 under the Securities Act or any similar rule then in effect) at the time of the purchase of such New Issuance Securities.
(j) “Encumbrance” or “Encumber” means any lien, claim, charge, pledge, mortgage, encumbrance, security interest, preferential arrangement, restriction on voting or alienation of any kind, adverse interest or the interest of a third party under any conditional sale agreement, capital lease or other title retention agreement.
(k) “New Issuance Securities” means Shares other than Shares issued or issuable: (i) in a strategic partnership, joint venture or similar corporate partnering transaction; (ii) in connection with any bank financing or similar financing transactions; (iii) in connection with the acquisition of another entity by merger, purchase of all or substantially all of the assets of such entity or other reorganization resulting in the ownership by the Company and its Subsidiaries of more than fifty percent (50%) of the voting power of such entity; (iv) to officers, directors or employees of, or advisors or consultants to, the Company or any of its Subsidiaries pursuant to the Stock Incentive Plan; (v) upon the conversion of shares of Class B Common Stock into shares of Class A Common Stock pursuant to the provisions of the Certificate of Incorporation; or (vi) to finance the purchase of shares of Class B Common Stock pursuant to the exercise by the Company of its redemption right in Section 4 of this Agreement.
(l) “Percentage Interest” means, with respect to any Stockholder, the quotient obtained by dividing the number of Shares then owned by that Stockholder by the number of Shares then owned by all stockholders of the Company.
(m) “Permitted Transferees” means, in the case of any Stockholder or its Permitted Transferee, (i) the respective Affiliates, investors, partners, limited partners, and members of such Stockholder, or any of their respective Affiliates, (ii) any other Stockholder, and (iii) any Person to whom a Stockholder is permitted to transfer Shares under the Amended Credit Agreement;provided,however, that in each case (1) such Permitted Transferee must execute and deliver a joinder, in form and substance satisfactory to the Company, to this Agreement, agreeing to comply with all applicable provisions of this Agreement and (2) such Disposition must comply with the requirements regarding Dispositions set forth in the Amended Credit Agreement.
(n) “Person” means any individual, partnership, corporation, limited liability company, joint venture, trust, firm, association, unincorporated organization or other entity.
(o) “Securities Act” means the Securities Act of 1933, as amended, or any similar Federal statute, and the rules and regulations thereunder, all as the same shall be in effect at the time.
(p) “Shares” means, with respect to any Stockholder, (i) the shares of Capital Stock held at any time by such Stockholder, (ii) any option, warrant or other right held at any time by any Stockholder, exercisable for shares of Capital Stock, and (iii) any security held at any time by such Stockholder, convertible or exchangeable for Capital Stock.
(q) “Stockholder” means each Class B Common Holder, individually. The Class B Common Holders are sometimes hereinafter collectively referred to as the “Stockholders”.
(r) “Stock Incentive Plan” means each of the Company’s stock option or equity incentive plan(s) now in existence or, with the consent of the Board of Directors of the Company, as amended or to be established in the future.
(s) “Subsidiaries” means, with respect to any Person, a corporation or other entity of which fifty percent (50%) or more of the voting power of the voting equity securities or equity interest is owned, directly or indirectly, by such Person. Unless otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of the Company or to Subsidiaries thereof.
SECTION 2. Transfers of Capital Stock.
(a) None of the Stockholders shall effect a Disposition of any of his, her or its shares of Capital Stock, except (1) to such Stockholder’s Permitted Transferees or (2) as provided in the Amended Credit Agreement. In addition, notwithstanding any provision herein to the contrary, in no event shall a Stockholder effect a Disposition of any of his, her or its shares of Class B Common Stock to a transferee
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pursuant to this Section 2 unless such Stockholder concurrently transfers to such transferee a ratable portion of such Stockholder’s rights and obligations under the Amended Credit Agreement.
(b) No Disposition may be effected by any Stockholder unless the transferring holder causes the transferee to execute and deliver a counterpart copy of this Agreement to the Company, in which such transferee agrees in writing to be bound by the terms of this Agreement. Any Person who is a transferee of shares under this Section 2 shall become a party to this Agreement as a Stockholder by executing and delivering a written joinder to this Agreement, in form and substance reasonably satisfactory to the Company, agreeing to be bound by and to comply with all applicable provisions of this Agreement, whereupon such person shall have the benefits of, and shall be subject to the obligations of and restrictions applicable to, a Stockholder, as set forth in this Agreement. Such written joinder agreement shall constitute a Modification (as defined herein) of this Agreement without any further action of the other parties hereto.
(c) Any purported Disposition in violation of this Agreement shall be null and voidabinitio, and the Company shall not recognize any such Disposition or accord to any such purported transferee any rights as a Stockholder.
SECTION 3. Preemptive Rights. After the date hereof and subject to the Certificate of Incorporation:
(a) If the Company proposes to issue any New Issuance Securities, each Eligible Purchaser shall have the right of first refusal to purchase a portion of such New Issuance Securities (a “Ratable Portion”) equal to the total number of New Issuance Securities,multipliedby such Eligible Purchaser’s Percentage Interest.
(b) The Company shall give each Eligible Purchaser at least fifteen (15) days prior written notice of any such proposed issuance of New Issuance Securities (an “Issuance Notice”) setting forth in reasonable detail the proposed terms and conditions thereof and shall offer to each such Eligible Purchaser the opportunity to purchase such Eligible Purchaser’s Ratable Portion of such New Issuance Securities at the same price, on the same terms and at the same time as the New Issuance Securities are proposed to be issued by the Company. An Eligible Purchaser may exercise its right of first refusal by delivery of an irrevocable written notice to the Company not more than twenty (20) days after the receipt of any such Issuance Notice. If an Eligible Purchaser fails to agree in writing within such twenty (20)-day period to purchase his, her or its full Ratable Portion of New Issuance Securities (a “Nonpurchasing Stockholder”), then such Nonpurchasing Stockholder shall forfeit the right hereunder to purchase that part of his, her or its full Ratable Portion of such New Issuance Securities that he, she or it did not so agree to purchase.
(c) If an Eligible Purchaser fails to exercise the rights granted to him, her or it in Sections 3(a) and (b) above (the “Preemptive Right”) within the periods specified in such sections, then the Company shall have one hundred eighty (180) days thereafter to issue the New Issuance Securities with respect to which such Eligible Purchaser’s Preemptive Rights were not exercised, at a price and upon general terms not materially more favorable to the purchasers thereof than specified in the Issuance Notice;provided that if the issuance of such New Issuance Securities has not occurred during such one hundred eighty (180)-day period as a result of a review by the Securities and Exchange Commission, then the Company shall have an additional ninety (90) days to issue such New Issuance Securities. If the Company has not issued the New Issuance Securities within the period specified in the preceding sentence, then the Company shall not thereafter issue any New Issuance Securities without again first offering such New Issuance Securities to Eligible Purchasers pursuant to this Section 3. The obligations of the Eligible Purchasers exercising their Preemptive Rights shall be conditioned upon the consummation of the proposed issuance of such New Issuance Securities by the Company.
(d) If the Preemptive Right is exercised by a designee of a Stockholder, then such designee must agree in writing to be bound by the terms of this Agreement.
SECTION 4. Redemption Right.
(a) Within fifteen (15) days after the indefeasible payment in cash in full of the Company’s Obligations (as defined in the Amended Credit Agreement) under the Amended Credit
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Agreement (including the cash collateralization of any outstanding letters of credit) and termination of the Commitments (as defined in the Amended Credit Agreement) thereunder (a “Redemption Event”), the Company may elect, at its option, to furnish to the Class B Common Holders written notice (the “Redemption Notice”) setting forth the occurrence of a Redemption Event. The Redemption Notice shall give rise to the requirement that the Company purchase from the Class B Common Holders all, but not less than all, of the shares of outstanding Class B Common Stock held by the Class B Common Holders (the “Company Share Redemption”). The Redemption Notice shall be deemed an irrevocable commitment of the Company to purchase all of the shares of Class B Common Stock from the Class B Common Holders. The price to be paid for the shares of Class B Common Stock (the “Purchase Price”) shall be an amount equal to (i) 2.5% of the outstanding principal obligations under the Amended Credit Agreement as of the Closing Date (as defined in the Amended Credit Agreement), if the redemption is effected on or before March 31, 2014, (ii) 5% of the outstanding principal obligations under the Amended Credit Agreement as of the Closing Date if the redemption is effected after March 31, 2014 and on or before March 31, 2015 or (iii) 7.5% of the outstanding principal obligations under the Amended Credit Agreement as of the Closing Date, if the redemption is effected after March 31, 2015 and on or before March 31, 2016. The foregoing right of the Company to redeem the shares of Class B Common Stock held by the Class B Common Holders shall terminate on March 31, 2016.
(b) Following any election by the Company pursuant to Section 4(a) to redeem all of the outstanding shares of Class B Common Stock, the Company and the Class B Common Holders shall cooperate in good faith and use their respective reasonable best efforts to consummate the Company Share Redemption as promptly as reasonably practicable and, in any event, within thirty (30) days following the Class B Common Holders’ receipt of the Redemption Notice. Payment of any amounts due to the Class B Common Holders under this Section 4 shall be made by the Company to the Class B Common Holders in cash at the closing of the Company Share Redemption.
SECTION 5. Information Rights. The Company shall use its good faith efforts to deliver to each Stockholder that is a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act) (each an “Institutional Holder”) notice of any actions taken by the holders of Capital Stock at a meeting or by written consent. In addition, the Company shall deliver to such Institutional Holders:
(a) as soon as practicable, but in any event within one hundred twenty (120) days after the end of each fiscal year of the Company, (i) a balance sheet as of the end of such year and (ii) statements of income and of cash flows for such year, all such financial statements audited and certified by independent public accountants of regionally recognized standing selected by the Company; and
(b) as soon as practicable, but in any event within forty five (45) days after the end of each quarter of each fiscal year of the Company, unaudited statements of income and of cash flows for such quarter, and an unaudited balance sheet as of the end of such quarter, all prepared in accordance with generally accepted accounting principles (“GAAP”) (except that such financial statements may (i) be subject to normal year-end audit adjustments and (ii) not contain all notes thereto that may be required in accordance with GAAP).
SECTION 6. Observer Rights. So long as a Class B Common Holder holds at least fifteen percent (15%) of the shares of Capital Stock acquired by all Class B Common Holders on the date hereof, such Class B Common Holder shall have the right to designate an individual to attend each meeting of the Board of Directors of the Company and each committee thereof, as an observer, without voting rights, and to receive a copy of all materials distributed to members of the Board of Directors of the Company and each committee thereof, in each case at the expense of such Class B Common Holder. Such observer shall be entitled to notice of each meeting of the Board of Directors of the Company and each committee thereof to the same extent that members of the Board of Directors of the Company are entitled to notice of such meetings.
SECTION 7. Confidentiality. Each Stockholder recognizes and acknowledges that all information obtained by such Stockholder pursuant to any rights that it may have under Section 5 or 6 above that is not generally known in the public domain constitutes valuable, special, unique and proprietary information. Each Stockholder agrees that it will not at any time, directly or indirectly, disclose, disseminate, publish or permit the disclosure, dissemination or publication of such information to or for any other Person or utilize the same for any reason or purpose whatsoever other than for the benefit and at the request of the Company.
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SECTION 8. Legend on Stock Certificates. Each certificate, if any, representing Shares shall bear the following legend until such time as the Shares represented thereby are no longer subject to the provisions hereof:
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SECTION 1145 OF THE BANKRUPTCY REFORM ACT OF 1978, AS AMENDED (THE ”BANKRUPTCY CODE“), AND MAY BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE ”SECURITIES ACT“), PROVIDED THAT THE HOLDER IS NOT DEEMED TO BE AN UNDERWRITER AS SUCH TERM IS DEFINED IN SECTION 1145(B) OF THE BANKRUPTCY CODE. IF THE HOLDER IS DEEMED TO BE AN UNDERWRITER AS SUCH TERM IS DEFINED IN SECTION 1145(B) OF THE BANKRUPTCY CODE, THEN THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY ONLY BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED (1) PURSUANT TO (A) A REGISTRATION STATEMENT WITH RESPECT TO SUCH SECURITIES THAT IS EFFECTIVE UNDER THE SECURITIES ACT OR (B) AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT RELATING TO THE DISPOSITION OF SECURITIES AND (2) IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS CERTIFICATE MUST BE SURRENDERED TO THE ISSUER (THE ”COMPANY“) OR ITS TRANSFER AGENT AS A CONDITION PRECEDENT TO THE SALE, PLEDGE OR OTHER TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE.
THE SALE, TRANSFER, ENCUMBRANCE AND OTHER DISPOSITION OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND CONDITIONS OF THE STOCKHOLDERS’ AGREEMENT, DATED AS OF , AMONG THE COMPANY AND CERTAIN HOLDERS OF ITS OUTSTANDING CAPITAL STOCK (AS THE SAME MAY BE AMENDED, MODIFIED, SUPPLEMENTED OR RESTATED FROM TIME TO TIME), A COPY OF WHICH MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE COMPANY.”
Each certificate representing Shares of Class B Common Stock shall also include the following legend:
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AUTOMATIC CONVERSION PURSUANT TO THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF THE COMPANY, A COPY OF WHICH MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE COMPANY.”
SECTION 9. Duration of Agreement. The rights and obligations of each Stockholder under this Agreement shall terminate as to such Stockholder upon the transfer of all Shares owned by such Stockholder in accordance with this Agreement. Upon the earlier to occur of (a) the conversion of all shares of Class B Common Stock into shares of Class A Common Stock pursuant to the provisions of the Certificate of Incorporation and (b) the date on which the Company and the holders of a majority of the outstanding shares of Class B Common Stock, if shares of Class B Common Stock are issued and outstanding, agree to terminate this Agreement, the rights and obligations of the Company and each Stockholder under this Agreement shall terminate;provided,however, that no Modification (as defined below) shall be effective to reduce the percentage of the shares of Class B Common Stock the consent of the holders of which is required under this Section 9.
SECTION 10. Representations and Warranties. Each Stockholder represents and warrants to the Company and the other Stockholders as follows:
(a) The execution, delivery and performance of this Agreement by such Stockholder will not violate any provision of law, any order of any court or other agency of government, any provision of the governing documents of such Stockholder or any provision of any indenture, agreement or other instrument to which such Stockholder or any of his, her or its properties or assets is bound, or conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any
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such indenture, agreement or other instrument, or result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon any of the properties or assets of such Stockholder.
(b) This Agreement has been duly executed and delivered by such Stockholder and constitutes the legal, valid and binding obligation of such Stockholder, enforceable against such Stockholder in accordance with its terms.
(c) The Shares of such Stockholder listed onSchedule I hereto constitute all the Shares owned by such Stockholder, and such Stockholder does not have any right or obligation to acquire any additional shares of capital stock of the Company except as provided herein.
The representations and warranties contained in this Section 10 shall survive the execution and delivery of this Agreement.
SECTION 11. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED IN ACCORDANCE WITH AND ENFORCED UNDER THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO AGREEMENTS OR INSTRUMENTS ENTERED INTO AND PERFORMED ENTIRELY WITHIN SUCH STATE, OTHER THAN CONFLICT OF LAWS PRINCIPLES THEREOF DIRECTING THE APPLICATION OF ANY LAW OTHER THAN THAT OF THE STATE OF DELAWARE.
SECTION 12. JURISDICTION.
(a) EACH PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY AGREES THAT ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE SHARES OR ANY AGREEMENTS OR TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK AND HEREBY EXPRESSLY SUBMITS TO THE PERSONAL JURISDICTION AND VENUE OF SUCH COURTS FOR THE PURPOSES THEREOF AND EXPRESSLY WAIVES ANY CLAIM OF IMPROPER VENUE AND ANY CLAIM THAT THE SUCH COURTS ARE AN INCONVENIENT FORUM. EACH PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO HIS, HER OR ITS ADDRESS SET FORTH IN SECTION 14 HEREOF, SUCH SERVICE TO BECOME EFFECTIVE 10 DAYS AFTER SUCH MAILING.
(b) EACH OF THE COMPANY AND THE STOCKHOLDERS HEREBY WAIVES HIS, HER OR ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT OR THE SHARES, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. EXCEPT AS PROHIBITED BY LAW, EACH OF THE COMPANY AND THE STOCKHOLDERS HEREBY WAIVES ANY RIGHT HE, SHE OR IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION REFERRED TO IN THE PRECEDING SENTENCE ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. EACH OF THE PARTIES HERETO (I) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (II) ACKNOWLEDGES THAT EACH OTHER PARTY HERETO HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS CONTAINED HEREIN.
SECTION 13. Benefits of Agreement. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns. Except as otherwise provided herein (including as provided in Section 2 with respect to Dispositions to Stockholders’ Permitted Transferees), neither this Agreement nor any of the rights or obligations hereunder may be assigned or delegated in whole or in part by any of the parties hereto without the prior written consent of the other parties hereto, and any
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such assignment without such prior written consent shall be null and voidab initio. Any Disposition of Shares, in violation of the provisions of this Agreement, shall be null and voidab initio.
SECTION 14. Notices. All notices, demands, consents, approvals, requests or other communications which any of the parties to this Agreement may desire or be required to give hereunder (collectively, “Notices”) must be in writing and shall be deemed to have been validly served, given or delivered (a) upon the earlier of actual receipt and three (3) business days after deposit in the United States Mail, registered or certified mail, return receipt requested, with proper postage prepaid, (b) upon transmission, when sent by email, telecopy or other similar facsimile transmission during normal business hours of the recipient, or, if not sent during normal business hours of the recipient, then on the next business day (with such email, telecopy or facsimile promptly confirmed by delivery of a copy by United States Mail as provided in clause (a) above), (c) one (1) business day after deposit with a reputable overnight courier with all charges prepaid or (d) when delivered, if hand-delivered by messenger, all of which shall be addressed to the party to be notified and sent to the address, telecopier number or email address set forth below or to such other address, telecopier number or email address as may be substituted by Notice given as herein provided.
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| | | | | | GE Capital Equity Investments, Inc. |
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| | | | | | Attention: Otelco Account Manager |
| | | | | | Telecopier No.: (513) 770-5332 |
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| | | | | | Attention: William G. Roche |
| | | | | | Telecopier No.: (404) 572-5133 |
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| | | | | | Attention: Chief Financial Officer |
| | | | | | Telecopier No.: (205) 625-3523 |
| | | | | | Email: curtis@otelcotel.com |
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| | | | | | Attention: Steven Khadavi |
| | | | | | Telecopier No.: (646) 390-6549 |
| | | | | | Email: khadavi.steven@dorsey.com |
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| | | | | | if to any other Stockholder: |
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| | | | | | at the address for such Person set forth onSchedule I hereto. |
SECTION 15. Modification. Except as otherwise provided herein, neither this Agreement nor any provision hereof shall be modified, amended, discharged or terminated (collectively, a “Modification”) except by an instrument in writing signed by the Company and the holders of a majority of the outstanding shares of Class B Common Stock if shares of Class B Common Stock are issued and outstanding;provided,however, that no Modification shall be effective to reduce the percentage of the Shares the consent of the holders of which is required under this Section 15.
SECTION 16. Entire Agreement. This Agreement constitutes the entire agreement among the undersigned with respect to the subject matter contained herein and supersedes any and all prior agreements or understandings, oral or written, among any or all of the undersigned relating to such subject matter.
SECTION 17. Signatures Counterparts. Telefacsimile or email transmissions of any executed original document and/or retransmission of any executed telefacsimile or email transmission shall be deemed to be the same as the delivery of an executed original. At the request of any party hereto, the other parties hereto shall confirm telefacsimile or email transmissions by executing duplicate original documents and delivering the same to the requesting party or parties. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.
SECTION 18. Specific Performance. The parties hereto agree that the breach by any party hereto of the provisions of this Agreement would result in substantial damage to the other parties hereto which would be difficult, if not impossible, to ascertain, and by reason of that fact the parties hereto agree that in the event of any such breach, the non-breaching parties shall have the right to enforce this Agreement by injunction or other proceeding in equity without the posting of a bond or other security.
SECTION 19. Severability. If any one or more of the provisions contained in this Agreement, or the application thereof in any circumstance, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired, unless the provisions held invalid, illegal or unenforceable shall substantially impair the benefits of the remaining provisions of this Agreement. The parties hereto further agree to replace such invalid, illegal or unenforceable provision of this Agreement with a valid, legal and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of such invalid, illegal or unenforceable provision.
SECTION 20. Descriptive Headings. The descriptive headings of this Agreement are inserted for convenience only and do not constitute part of this Agreement.
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first above written.
| | | | OTELCO INC. |
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| | | | | | ______________________________ |
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| | | | GE CAPITAL EQUITY INVESTMENTS, INC. |
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| | | | COBANK, ACB |
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| | | | RAYMOND JAMES BANK, FSB |
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| | | | UNION BANK OF CALIFORNIA, N.A. |
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| | | | WEBSTER BANK, NATIONAL ASSOCIATION |
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| | | | CIBC, INC. |
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Schedule I
Stockholders’ Ownership
| | | | Shares of Class B Common Stock |
GE Capital Equity Investments, Inc. | | | | | | |
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Union Bank of California, N.A. | | | | | | |
Webster Bank, National Association | | | | | | |
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EXHIBIT 3
List of Officers and Directors
[To Come in Plan Supplement]
EXHIBIT 4
Certificate of Incorporation of Otelco Inc.
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
OTELCO INC.
a Delaware corporation
Otelco Inc., a Delaware corporation (the “Corporation”), hereby adopts this Amended and Restated Certificate of Incorporation pursuant to the provisions of Sections 242, 245 and 303 of the General Corporation Law of the State of Delaware.
1. The present name of the Corporation is Otelco Inc. The Corporation was originally formed as a Delaware limited liability company under the name Rural LEC Acquisition LLC.
2. The original Certificate of Formation of the Corporation was filed with the Secretary of State of the State of Delaware on October 20, 1998. The Corporation converted to a Delaware corporation on December 21, 2004 and filed its original Certificate of Incorporation with the Secretary of State of the State of Delaware and changed its name to Otelco Inc. on that date.
3. This Amended and Restated Certificate of Incorporation, which has been duly adopted in accordance with Sections 242, 245 and 303 of the General Corporation Law of the State of Delaware, is being filed as required by that certain Joint Prepackaged Plan of Reorganization for the Corporation and its Affiliated Debtors, dated as of , 2013, as filed with the United States Bankruptcy Court for the District of Delaware (the “Court”) on , 2013 (Case No. ( )) and confirmed by the Court on , 2013.
4. The original Certificate of Incorporation is hereby amended and restated by this Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”).
ARTICLE I
The name of the Corporation is Otelco Inc.
ARTICLE II
The address of the registered office of the Corporation in the State of Delaware is 615 South DuPont Highway, City of Dover, County of Kent, Delaware 19901. The name of the registered agent of the Corporation at such address is National Corporate Research, Ltd.
ARTICLE III
The nature of the business or purposes to be conducted or promoted by the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware.
ARTICLE IV
A. Authorized Classes of Stock and Number of Shares. The total number of shares of capital stock which the Corporation shall have authority to issue is [•] shares of common stock, $0.01 par value per share, of which [•] shares are designated as Class A common stock (the “Class A Common Stock”) and [•] shares are designated as Class B common stock (the “Class B Common Stock” and together with the Class A Common Stock, the “Common Stock”).
1. Dividend Rights. Subject to applicable law, this Certificate of Incorporation, the rights, if any, of the holders of any class or series of stock having a preference over or the right to participate with the Class A Common Stock with respect to the payment of dividends or other distributions, and the rights of the holders of Class B Stock to participate in such dividends or other distributions pursuant to Article IV.C.1, dividends and other distributions of cash, capital stock or property may be declared and paid on the Class A
Common Stock out of the assets of the Corporation that are by law available therefor, at the times and in the amounts as the Board of Directors of the Corporation (the “Board of Directors”) in its discretion may determine. All dividends and other distributions paid pursuant to this Article IV.B.1 shall be paid pro rata to the holders entitled thereto.
2. Liquidation Rights. Upon the liquidation, dissolution or winding up of the Corporation, the assets of the Corporation shall be distributed to the holders of Common Stock on a pro rata basis.
3. Voting Rights. Each holder of Class A Common Stock shall be entitled to one vote for each share of Class A Common Stock held, shall be entitled to notice of stockholder meetings in accordance with the Bylaws of the Corporation (the “Bylaws”) and shall be entitled to vote upon such matters and in such manner as is otherwise provided herein or as may be provided by applicable law.
1. Dividend Rights. If the Corporation declares and pays any dividend or other distribution on shares of Class A Common Stock as provided for in Article IV.B.1, the holders of the shares of Class B Common Stock shall be entitled to receive, when, as and if declared by the Board of Directors, out of the assets of the Corporation that are by law available therefor, dividends or other distributions in respect of each share of Class B Common Stock, in the same amount per share as the holders of shares of Class A Common Stock. The Corporation shall not declare and pay any dividend or other distribution on shares of Class A Common Stock as provided for in Article IV.B.1, unless it simultaneously declares and pays an equivalent per share dividend or other distribution to the holders of the shares of Class B Common Stock. All dividends and other distributions paid pursuant to this Article IV.C.1 shall be paid pro rata to the holders entitled thereto. Notwithstanding any provision of this Certificate of Incorporation, if dividends are declared on the Class A Common Stock or the Class B Common Stock that are payable in shares of Common Stock, or securities convertible into, or exercisable or exchangeable for, Common Stock, the dividends payable to the holders of Class A Common Stock shall be paid only in shares of Class A Common Stock (or securities convertible into, or exercisable or exchangeable for, Class A Common Stock), the dividends payable to the holders of Class B Common Stock shall be paid only in shares of Class B Common Stock (or securities convertible into, or exercisable or exchangeable for, Class B Common Stock), and such dividends shall be paid in the same number of shares (or fraction thereof) on a per share basis of the Class A Common Stock and Class B Common Stock, respectively (or securities convertible into, or exercisable or exchangeable for, the same number of shares (or fraction thereof) on a per share basis of the Class A Common Stock and Class B Common Stock, respectively). In no event shall the shares of either Class A Common Stock or Class B Common Stock be split, divided, combined or reclassified unless the outstanding shares of the other class shall be proportionately split, divided, combined or reclassified.
2. Liquidation Rights. Upon the liquidation, dissolution or winding up of the Corporation, the assets of the Corporation shall be distributed to the holders of Common Stock on a pro rata basis.
3. Voting Rights. Except as otherwise required by applicable law or set forth in this Certificate of Incorporation, the holders of Class B Common Stock shall not be entitled to vote.
4. Automatic Conversion of Class B Common Stock. If (a) all of the outstanding Obligations (as defined below) of the Corporation under the Amended Credit Agreement (as defined below) have been satisfied in full (including the cash collateralization of any outstanding letters of credit) and (b) all of the Commitments (as defined below) of the Lenders (as defined below) under the Amended Credit Agreement have been terminated in accordance with the provisions of Section 7 of the Amended Credit Agreement, then each share of Class B Common Stock as of the date of such satisfaction in full of all Obligations and termination of all Commitments shall automatically and without further action be converted into one share of Class A Common Stock. The Corporation will publicly disclose the date and time that such Obligations have been satisfied and such Commitments have been terminated.
(a) “Amended Credit Agreement” means that certain Third Amended and Restated Credit Agreement, dated as of [ ], 2013, among the Corporation, the other persons designated therein as “Credit Parties,” General Electric Capital Corporation, acting as agent on behalf of itself as a lender and the other lenders signatory thereto from time to time, as amended from time to time.
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(b) “Commitments” has the meaning specified in the Amended Credit Agreement.
(c) “Lenders” has the meaning specified in the Amended Credit Agreement.
(d) “Obligations” has the meaning specified in the Amended Credit Agreement.
ARTICLE V
A. In the event that either (1) the Corporation’s Consolidated Total Leverage Ratio (as defined in the Amended Credit Agreement), at the end of any Fiscal Quarter (as defined in the Amended Credit Agreement), is more than 4.25:1.0 or (2) an Event of Default (as defined in the Amended Credit Agreement) shall have occurred under Section 8.1(a) of the Amended Credit Agreement (the events described in the foregoing subsections (1) and (2) are referred to herein as a “Trigger Event” or “Trigger Events”), the Corporation and its Subsidiaries (as defined in the Amended Credit Agreement) shall within one hundred and eighty (180) days of the occurrence of a Trigger Event (the “Initial Outside Date”), effectuate the sale of their assets or equity interests (a “Liquidity Transaction”). Notwithstanding anything herein to the contrary, any Credit Party’s (as defined in the Amended Credit Agreement) determination as to whether to consummate any Liquidity Transaction shall be determined by the Credit Party’s board of directors in the exercise of such board of directors’ reasonable business judgment, which determination and business judgment shall take into consideration the board of directors’ fiduciary duties and its obligations, if any, to the Credit Party’s stockholders and creditors.
B. In furtherance of the Liquidity Transaction under Article V.A, (1) on or prior to the date which is forty-five (45) days after the occurrence of a Trigger Event, the Credit Parties shall engage a nationally recognized investment banker selected by the Corporation (the “Investment Bank”) that is reasonably satisfactory to the Requisite Lenders (as defined in the Amended Credit Agreement) and who has been retained pursuant to an engagement letter whose final form has been disclosed to the Agent (as defined in the Amended Credit Agreement), and has been executed in a form reasonably satisfactory to the Agent, (2) on or prior to the date which is seventy-five (75) days after the occurrence of a Trigger Event, the Corporation shall have distributed to prospective buyers and prospective investors (or to the Investment Bank for distribution to such buyers and investors) a confidential information memorandum for the potential Liquidity Transaction in customary form and in a form approved by the Investment Bank, (3) on or prior to the date which is one hundred thirty (130) days after the occurrence of a Trigger Event, the Corporation shall have received final bids related to the Liquidity Transaction, (4) on or prior to the date which is one hundred forty-five (145) days after the occurrence of a Trigger Event, the Corporation shall have selected the final bidder or bidders for the Liquidity Transaction, and (5) on or prior to the Initial Outside Date, the Liquidity Transaction shall have been consummated. Notwithstanding anything herein to the contrary, any Credit Party’s determination as to whether to consummate any Liquidity Transaction shall be determined by the Credit Party’s board of directors in the exercise of such board of directors’ reasonable business judgment, which determination and business judgment shall take into consideration the board of directors’ fiduciary duties and its obligations, if any, to the Credit Party’s stockholders and creditors. If (i) Governmental Authorization (as defined in the Amended Credit Agreement) for the Liquidity Transaction has not been obtained or (ii) the waiting period (and extensions thereof) applicable to the Liquidity Transaction under the Hart-Scott Rodino Antitrust Improvement Act of 1976 have not expired or been early terminated by the Initial Outside Date and the Corporation is working in good faith to obtain such approval, expiration or termination, as the case may be, the Corporation may extend the Initial Outside Date for a period of up to one hundred twenty (120) days by giving notice of such extension to the Agent or alternatively, if stockholder approval of the Liquidity Transaction has not been obtained by the Initial Outside Date and the Corporation is working in good faith to obtain such approval, provided the Corporation has executed a definitive, written agreement memorializing the Liquidity Transaction, on or prior to the date which is one hundred eighty (180) days after the occurrence of a Trigger Event, the Corporation may extend the Initial Outside Date for a period of forty-five (45) days by giving notice of such extension to the Agent. The Initial Outside Date may be extended solely to the extent necessary to enable the Corporation to obtain the applicable Governmental Authorization, stockholder approval or expiration or termination for the Liquidity Transaction and in no event shall the Initial Outside Date be extended by more than one hundred twenty (120) days in the aggregate.
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C. Subject to the execution by the Agent and its advisors and the Corporation of a mutually acceptable confidentiality agreement and applicable law, the Corporation will at all times keep the Agent and its advisors reasonably informed as to the status of the pursuit of a Liquidity Transaction and will in any event provide current and frequent (no less frequently than twice per month and in any event promptly following the occurrence of a material event in connection with the pursuit of a Liquidity Transaction) updates of the amount, number and status of all bids, the range of values of the Corporation reflected in bids or refinancing proposals, the timing and occurrence of visits by representatives of prospective buyers or investors, copies of all management presentations and sale memorandum submitted to prospective buyers or investors, copies of letters of intent or final commitment letters submitted by prospective buyers and investors and copies of all draft and final material documents for the Liquidity Transaction, provided, that until delivery of final letters of intent or final commitment letters, as the case may be, the Corporation may redact the names (and other identifying information) of the prospective buyers and investors, at which time the Corporation shall disclose the name of the prospective buyer or investor providing such final document. At the written request of the Agent or the Requisite Lenders, the Corporation will participate in conference calls (at times to be mutually agreed with the Corporation, such agreement not to be unreasonably withheld or delayed) with the Lenders and the Agent regarding the progress of the pursuit of the Liquidity Transaction; provided, such calls shall not occur more than twice per month and any such call shall constitute the fulfillment of the requirement to keep the Lenders informed as to the status of the pursuit of a Liquidity Transaction required by this Article V.C, but shall not be deemed to fulfill any document delivery requirements under this Article V.C. All requests for information by the Lenders relative to the Liquidity Transaction shall be made either through the Agent or at such conference calls.
D. Without limitation of the foregoing, the Corporation shall be deemed to have fulfilled its twice per month reporting obligations under Article V.C if the Corporation on a twice per month basis from and after the occurrence of a Trigger Event, shall deliver to the Agent, which reports and information are subject to the Agent’s and each Lender’s confidentiality requirements pursuant to Section 11.8 of the Amended Credit Agreement and applicable law, an updated chart prepared by the Corporation or the Investment Bank, in form and substance reasonably satisfactory to the Agent, for each prospective buyer and investor (whose names and other identifying information may be redacted until delivery of a final letter of intent or commitment letter, as the case may be, in which the name and other identifying information of the prospective buyer or investor providing such final document shall be disclosed) that has been contacted by the Investment Bank, (1) whether and/or when a teaser letter was sent to any such prospective buyer or investor, (2) whether and/or when the prospective buyer or investor entered into a confidentiality agreement, (3) whether and/or when a sale memorandum was delivered to any such prospective buyer, (4) whether and/or when the prospective buyer or investor delivered a written indication of interest (or any revised version), (5) whether and/or when the prospective buyer or investor delivered a letter of intent or commitment letter or term sheet (or any revised version), (6) to the extent such information is contained in similar charts prepared by the Investment Bank for distribution to representatives of the Credit Parties, the dates and, to the extent not prohibited by an agreement or by applicable law, the substance of communications between any representatives of the Credit Parties and representatives of the prospective buyer or investor and (7) to the extent such information is contained in similar charts prepared by the Investment Bank for distribution to representatives of the Credit Parties, any other material information relating to the status of the prospective buyer’s or investor’s participation in the sale process.
ARTICLE VI
A. In the event that one or more Class B Common Holders (the “Selling Holders”) acting together or pursuant to a common plan or arrangement proposes to Dispose of fifty percent (50%) or more of the Shares of Class B Common Stock then owned by all Class B Common Holders to a Bona Fide Purchaser, then the Selling Holders may, at their option, require each of the other Stockholders (the “Non-Selling Holders”) to Dispose of all or, if applicable, a pro rata portion of the Shares held by them (the “Bring-Along Right”) to such Bona Fide Purchaser for the same consideration per share and otherwise on the same terms and conditions upon which the Selling Holders effect the Disposition of their Shares. The Bring-Along Right described in this Article VI.A shall only be exercisable by Class B Common Holders following the occurrence of a Trigger Event.
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B. If the Selling Holders desire to exercise their rights pursuant to Article VI.A, the Selling Holders shall deliver to the Corporation, and the Corporation shall within ten (10) days thereafter deliver to the Non-Selling Holders written notice (“Sale Notice”) setting forth the identity of the Bona Fide Purchaser and the consideration per share to be paid by such Bona Fide Purchaser and the other terms and conditions of such Disposition. Such Sale Notice must be delivered at least ten (10) days prior to the closing of the proposed Disposition. At the closing of the Disposition by the Selling Holders of their Shares, each of the Non-Selling Holders shall deliver to the Bona Fide Purchaser a certificate or certificates, if any, evidencing such Non-Selling Holder’s pro rata portion of Shares to be Disposed of, together with an appropriate assignment separate from certificate duly executed in a proper form to effect the Disposition of such Shares from the Non-Selling Holders to the Bona Fide Purchaser on the books and records of the Corporation,provided, that the Bona Fide Purchaser delivers to such Non-Selling Holders for their Shares the same consideration per Share and otherwise on the same terms and conditions upon which the Selling Holders effect the Disposition of their Shares. If any Non-Selling Holder shall fail to deliver such certificate(s) and assignment to the Bona Fide Purchaser, the consideration payable to such Non-Selling Holder shall be paid to a depositary on behalf of such Non-Selling Holder, and upon such payment the Corporation shall cancel the Shares of such Non-Selling Holder on the records of the Corporation and cause a notation to be made on its books and records to reflect that the Shares of such Non-Selling Holder have been cancelled and represent only the right to receive the consideration payable in such Disposition upon surrender of his, her or its Share certificate(s) and assignment. For purposes of this Article VI: (1) all options, warrants and other rights to acquire securities that are “in the money” shall be treated as the number of Shares issuable upon the full exercise thereof, less such number of Shares the aggregate fair market value of which (based on the value attributed in such Disposition) would be required to pay the aggregate exercise price therefor and (2) all options, warrants and other rights to acquire securities that are not “in the money” shall be cancelled effective on the closing of the Disposition contemplated hereunder;provided,however, that all options and other rights to acquire securities granted pursuant to a Stock Incentive Plan shall be treated in accordance with the terms of such plan. In addition to the foregoing, in the event any Disposition is structured as a merger, at the discretion of the Selling Holders and the Bona Fide Purchaser, each holder of Common Stock subject to the Bring-Along Right shall be required, if such merger requires Stockholders to vote thereupon or consent thereto, (x) to consent to the Disposition by voting all of the shares of Common Stock held by such Non-Selling Holder in favor of, or to consent to, any such Disposition, and (y) if applicable, not to exercise any appraisal or similar rights with respect to such Disposition.
C. If, within one-hundred eighty (180) days after the Selling Holders’ delivery of the Sale Notice required pursuant to Article VI.B. (or such longer period in order to obtain necessary regulatory approvals), the Selling Holders have not completed the Disposition of their Shares and that of the Non-Selling Holders in accordance herewith, the Selling Holders shall return to the Non-Selling Holders the certificates and assignments of certificates with respect to the Non-Selling Holders’ Shares which the Non-Selling Holder delivered pursuant to this Article VI. Upon the Non-Selling Holder’s receipt of such materials, all the restrictions on Disposition contained in this Agreement with respect to the Shares owned by the Stockholders shall again be in effect.
D. All Dispositions of Shares to be made pursuant to this Article VI shall be subject to the following terms:
1. the Non-Selling Holders shall deliver to the Bona Fide Purchaser the certificates evidencing the Shares being Disposed of, free and clear of Encumbrances, together with duly executed stock transfer powers in favor of the Bona Fide Purchaser or its nominees and such other documents, including evidence of ownership and authority, as the Bona Fide Purchaser may reasonably request;
2. except as otherwise specifically set forth herein, the Non-Selling Holders shall not be required to make any representations or warranties to any Person in connection with such Disposition, including any representations or warranties with respect to the Corporation or any Credit Party, except as to (i) good title to the Shares being Disposed of, (ii) the absence of Encumbrances with respect to the Shares being Disposed of, (iii) its valid existence and good standing (if applicable), (iv) the authority for, and validity and binding effect of (as against such Non-Selling Holder), any agreement entered into by such Non-Selling Holder in connection with such Disposition, (v) the fact that such Non-Selling Holder’s Disposition will not conflict with or result in a breach of or constitute a default under, or violation of, its governing documents or
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any indenture, lease, loan or other agreement or instrument by which he, she or it is bound or affected, (vi) all required material consents to such Non-Selling Holder’s Disposition and material governmental approvals having been obtained (excluding any securities laws) and (vii) the fact that no broker’s commission is payable by the Non-Selling Holder as a result of Non-Selling Holder’s conduct in connection with the Disposition; and
3. the Non-Selling Holders shall not be required to enter into any non-solicitation or non-competition agreement in connection with such Disposition.
E. As used in this Article VI, the following defined terms have the meanings indicated below:
1. “Affiliate” means any Person who or which, directly or indirectly, through one or more intermediaries, controls or is controlled by, or is under common control with, any specified Person.
2. “Bona Fide Purchaser” means any Person who or which has delivered a good faith written offer to purchase all or any portion of a Stockholder’s Shares other than an Affiliate of such Stockholder.
3. “Capital Stock” means, collectively, the shares of Class A Common Stock, Class B Common Stock and any class or series of common stock or preferred stock of the Corporation authorized after the date hereof, or any other class or series of stock resulting from successive changes or reclassifications of any class or series of common stock or preferred stock of the Corporation.
4. “Class A Common Holder” means a holder of Class A Common Stock, individually, and any subsequent transferee of his, her or its shares of Class A Common Stock.
5. “Class B Common Holder” means a holder of Class B Common Stock, individually, and any subsequent transferee of his, her or its shares of Class B Common Stock.
6. “Dispose” or “Disposition” (and any derivatives thereof) means (i) a voluntary or involuntary sale, assignment, mortgage, grant, pledge, hypothecation, exchange, transfer, conveyance or other disposition of a Stockholder’s Shares, and (ii) any agreement, contract or commitment to do any of the foregoing. Any such Disposition may be structured as a merger of an affiliate of a Bona Fide Purchaser with and into the Corporation at the discretion of the Selling Holders and the Bona Fide Purchaser.
7. “Encumbrance” or “Encumber” means any lien, claim, charge, pledge, mortgage, encumbrance, security interest, preferential arrangement, restriction on voting or alienation of any kind, adverse interest or the interest of a third party under any conditional sale agreement, capital lease or other title retention agreement.
8. “Person” means any individual, partnership, corporation, limited liability company, joint venture, trust, firm, association, unincorporated organization or other entity.
9. “Shares” means, with respect to any Stockholder, (i) the shares of Capital Stock held at any time by such Stockholder, (ii) any option, warrant or other right held at any time by any Stockholder, exercisable for shares of Capital Stock, and (iii) any security held at any time by such Stockholder, convertible or exchangeable for Capital Stock.
10. “Stock Incentive Plan” means each of the Corporation’s stock option or equity incentive plan(s) now in existence or, with the consent of the Board of Directors, as amended or to be established in the future.
11. “Stockholder” means each holder of Shares, individually. “Stockholders” means all holders of Shares.
F. Each certificate, if any, representing Shares shall bear the following legend until such time as the Shares represented thereby are no longer subject to the provisions of this Article VI:
“THE SALE, TRANSFER, ENCUMBRANCE AND OTHER DISPOSITION OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND CONDITIONS OF THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF THE CORPORATION, AS AMENDED FROM TIME TO TIME, A COPY OF WHICH MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE CORPORATION.”
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G. Notwithstanding any provision of this Certificate of Incorporation, the rights and obligations under this Article VI shall automatically terminate and this Article VI shall have no effect if (i) all of the outstanding Obligations of the Corporation under the Amended Credit Agreement have been paid in full (including the cash collateralization of any outstanding letters of credit) and (ii) all of the Commitments of the Lenders under the Amended Credit Agreement have been terminated in accordance with the provisions of Section 7 of the Amended Credit Agreement.
ARTICLE VII
The Corporation is to have a perpetual existence.
ARTICLE VIII
In furtherance and not in limitation of the powers conferred by the laws of the State of Delaware, except as otherwise provided in this Certificate of Incorporation, the Board of Directors is expressly authorized and empowered to make, repeal, alter, amend or rescind any or all of the Bylaws in any manner without any action on the part of the stockholders. Notwithstanding the foregoing sentence, but subject to Article IX.C.2, the stockholders may make, repeal, alter, amend or rescind any or all of the Bylaws in any manner pursuant to a vote of at least two-thirds of the voting power of the outstanding shares of capital stock entitled to vote thereon;provided,however, that, in addition to any other vote required by law, the last sentence in Section 3.6(e) of the Bylaws may not be altered, amended or repealed by the stockholders or the Board of Directors except by the affirmative vote of the holders of at least a majority of the then outstanding shares of Class B Common Stock if shares of Class B Common Stock are issued and outstanding.
ARTICLE IX
| A. | | Number and Election of Directors. |
1. Prior to (a) the indefeasible payment in cash in full of the Corporation’s Obligations under the Amended Credit Agreement (including the cash collateralization of any outstanding letters of credit) and (b) the termination of all of the Commitments of the Lenders under the Amended Credit Agreement, the Board of Directors shall be comprised of seven members and shall consist of (i) four individuals who shall be elected by the holders of Class A Common Stock (the “Class A Directors”) and (ii) three individuals who shall be elected by the holders of Class A Common Stock and who do not have any material business or close personal relationships with or any history of any material business or close relationships with any or all of the Agent, the Lenders, the holders of Subordinated Debt (as defined in the Existing Credit Agreement (as such term is defined in the Amended Credit Agreement)), the management of the Corporation, the Corporation or any of their respective affiliates (the “Special Directors”);provided that such Special Directors must be acceptable to the holders of at least a majority the Class B Common Stock in respect of experience, qualifications, disinterestedness, independence and integrity;providedfurther that, unless and until all shares of Class B Common Stock have been converted into shares of Class A Common Stock in accordance with the provisions of Article IV.C.4, with respect to any individual elected to replace a Special Director, such individual must be acceptable to the holders of at least a majority the Class B Common Stock in respect of qualifications, experience, integrity, independence and disinterestedness.
2. Following (a) the indefeasible payment in cash in full of the Corporation’s Obligations under the Amended Credit Agreement (including the cash collateralization of any outstanding letters of credit) and (b) the termination of all of the Commitments of the Lenders under the Amended Credit Agreement, the number of members of the Board of Directors shall be fixed from time to time by resolution of a majority of the entire Board of Directors and, except as otherwise set forth in the Bylaws, all members of the Board of Directors shall be elected by the holders of the Class A Common Stock.
3. Unless and except to the extent that the Bylaws so require, the election of directors of the Corporation need not be by written ballot.
1. Subject to Article IX.B.2, each director of the Corporation shall be entitled to one vote on every matter to be voted upon by the Board of Directors.
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2. Following the occurrence of a Trigger Event, but prior to the indefeasible payment in cash in full of the Corporation’s Obligations under the Amended Credit Agreement (including the cash collateralization of any outstanding letters of credit) and the termination of all of the Commitments of the Lenders under the Amended Credit Agreement, (a) the Class A Directors shall each be entitled to one (1) vote on every matter to be voted upon by the Board of Directors and (b) the Special Directors shall each be entitled to two (2) votes on every matter to be voted upon by the Board of Directors;provided that if there is a vacancy among the Special Directors, then the votes of the remaining Special Directors shall be increased on a pro rata basis such that the Special Directors shall be entitled to cast six (6) votes in the aggregate on every matter to be voted upon by the Board of Directors.
1. Prior to (a) the indefeasible payment in cash in full of the Corporation’s Obligations under the Amended Credit Agreement (including the cash collateralization of any outstanding letters of credit) and (b) the termination of all of the Commitments of the Lenders under the Amended Credit Agreement, in addition to any other vote required by applicable law, the Corporation shall not file any voluntary bankruptcy proceeding without the approval of the Special Directors holding at least two-thirds (2/3) of the votes then entitled to be cast by all of the Special Directors.
2. So long as any shares of Class B Common Stock remain outstanding, the Corporation shall not either directly or indirectly, by amendment, merger, consolidation or otherwise, do any of the following without (in addition to any other vote required by applicable law) the written consent or affirmative vote of the holders of at least a majority of the then outstanding shares of Class B Common Stock, given in writing or by vote at a meeting, consenting or voting (as the case may be) separately as a class:
(a) adversely amend, alter, repeal or change (by amendment, merger, consolidation or otherwise) the rights, powers, preferences or privileges of, or the restrictions provided for the benefit of, the Class B Common Stock;
(b) amend, alter or repeal (by amendment, merger, consolidation or otherwise) Article IX.A.1 of this Certificate of Incorporation;
(c) create, or authorize the creation (by reclassification or otherwise) of, any additional class or series of capital stock of the Corporation having rights, powers, preferences or privileges senior orpari passu to the Class B Common Stock;
(d) increase the authorized number of shares of the Common Stock;
(e) (i) reclassify, alter or amend any existing security of the Corporation that ispari passu with the Class B Common Stock in respect of the distribution of assets on the liquidation, dissolution or winding up of the Corporation, the payment of dividends or other distributions or rights of redemption, if such reclassification, alteration or amendment would render such other security senior to the Class B Common Stock in respect of any such right, preference or privilege or (ii) reclassify, alter or amend any existing security of the Corporation that is junior to the Class B Common Stock in respect of the distribution of assets on the liquidation, dissolution or winding up of the Corporation, the payment of dividends or other distributions or rights of redemption, if such reclassification, alteration or amendment would render such other security senior to orpari passu with the Class B Common Stock in respect of any such right, preference or privilege;
(f) increase the number of authorized shares under the Corporation’s Stock Incentive Plan, or adopt any new equity incentive plan for the Corporation’s directors, employees, or consultants;
(g) authorize or effect the declaration or payment of any dividend on any shares of Common Stock or, except as permitted by the Stockholders’ Agreement, the redemption or repurchase of any shares of Common Stock;
(h) effect any merger, corporate reorganization, sale of control or any transaction in which all or substantially all of the assets of the Corporation and/or its subsidiaries are sold to a third party;provided,however, that the written consent or affirmative vote of the holders of at least a majority of the then outstanding shares of Class B Common Stock shall not be required in connection with (i) the consolidation or
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merger of any subsidiary of the Corporation with and into the Corporation or (ii) the merger of the Corporation with any affiliate of the Corporation incorporated solely for the purpose of reincorporating the Corporation in another jurisdiction; or
(i) alter or amend the Sale Covenant.
ARTICLE X
No action required to be taken or which may be taken at any annual or special meeting of the holders of the Corporation’s capital stock may be taken without a meeting, and the power of the holders of the Corporation’s capital stock to consent in writing, without a meeting, to the taking of any action is specifically denied.
ARTICLE XI
Subject to any express provisions or restrictions contained in this Certificate of Incorporation, the Corporation may amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders, directors or others hereunder are subject to such reservation.
ARTICLE XII
To the fullest extent permitted by applicable law, a director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for any breach of fiduciary duty as a director. No repeal or modification of any of the foregoing provisions of this Article XII, by amendment of this Article XII or by operation of law, or adoption of any provision in this Certificate of Incorporation inconsistent with this Article XII, shall adversely affect any right or protection of a director of the Corporation with respect to any acts or omissions of such director occurring prior to such repeal or modification.
ARTICLE XIII
To the fullest extent permitted by applicable law, the Corporation is authorized to provide indemnification of (and advancement of expenses to) directors, officers, employees and other agents of the Corporation (and any other persons to which Delaware law permits the Corporation to provide indemnification), through Bylaw provisions, agreements with any such director, officer, employee, agent or other person, vote of stockholders or disinterested directors or otherwise. No repeal or modification of any of the foregoing provisions of this Article XIII, by amendment of this Article XIII or by operation of law, or adoption of any provision in this Certificate of Incorporation inconsistent with this Article XIII, shall adversely affect any right or protection of a director, officer, employee, agent or other person existing at the time of, or increase the liability of any director, officer, employee, agent or other person with respect to any acts or omissions of such director, officer, agent or other person occurring prior to, such repeal or modification.
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IN WITNESS WHEREOF, the undersigned has executed this Amended and Restated Certificate of Incorporation as of this day of , 2013.
| | | | OTELCO INC.,
a Delaware corporation |
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| | | | | | __________________________________ |
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EXHIBIT 5
Bylaws of Otelco Inc.
FOURTH AMENDED AND RESTATED
BY-LAWS OF
OTELCO INC.
ARTICLE I
OFFICES
The registered office of Otelco Inc. (the “Corporation”) in the State of Delaware shall be at 615 South DuPont Highway, City of Dover, County of Kent, Delaware 19901, and the registered agent in charge thereof shall be National Corporate Research, Ltd.
The principal office for the transaction of the business of the Corporation shall be at such place as may be established by the Board of Directors of the Corporation (the “Board”). The Board is granted full power and authority to change said principal office from one location to another.
The Corporation may also have an office or offices at any other place or places within or outside the State of Delaware.
ARTICLE II
MEETING OF STOCKHOLDERS
The annual meeting of the stockholders for the election of directors, and for the transaction of such other business as may properly come before the meeting, shall be held at such place, date and hour as shall be fixed by the Board and designated in the notice or waiver of notice thereof.
A special meeting of the stockholders for any purpose or purposes may be called by the Board pursuant to (a) a resolution adopted by a majority of the members of the Board or (b) a request by holders of at least a majority of the voting power of all outstanding shares of the capital stock of the Corporation entitled to vote at such special meeting (the “Voting Stock”), in each case to be held at such place, date and hour as shall be designated in the notice or waiver of notice thereof;provided,however, that if and to the extent that any special meeting of stockholders may be called by any other person or persons specified in any provisions of the Certificate of Incorporation of the Corporation (as amended, restated and/or supplemented, including by way of a designation of one or more series of Preferred Stock pursuant to a certificate of designations, rights and preferences thereof, the “Certificate of Incorporation”) or any amendment thereto, or any certificate filed under Section 151(g) of the Delaware Statute (as defined below), then such special meeting may also be called by the person or persons in the manner, at the times and for the purposes so specified.
Except as otherwise required by applicable law, the Certificate of Incorporation or these By-laws, notice of each annual or special meeting of the stockholders shall be given to each stockholder of record entitled to vote at such meeting not less than 10 nor more than 60 days before the day on which the meeting is to be held, by delivering written notice thereof to such stockholder personally, or by mailing a copy of such notice, postage prepaid, directly to such stockholder at his, her or its address as it appears in the records of the
Corporation, or by transmitting such notice thereof to such stockholder at such address by telegraph, cable or other telephonic transmission. Every such notice shall state the place, the date and hour of the meeting, and, in case of a special meeting, the purpose or purposes for which the meeting is called. If mailed, such notice shall be deemed to be given when deposited in the United States mail, postage pre-paid, directed to the stockholder at such address as appears on the records of the Corporation. Notice of any meeting of stockholders shall not be required to be given to any stockholder who shall attend such meeting in person or by proxy, or who shall, in person or by attorney thereunto authorized, waive such notice in writing, either before or after such meeting. Except as otherwise provided in these By-laws, neither the business to be transacted at, nor the purpose of, any meeting of the stockholders need be specified in any such notice or waiver of notice. Notice of any adjourned meeting of stockholders shall not be required to be given, except when expressly required by law.
At each meeting of the stockholders, except where otherwise provided by applicable law, the Certificate of Incorporation or these By-laws, the holders of a majority of the voting power of the issued and outstanding Voting Stock, present in person or represented by proxy, shall constitute a quorum for the transaction of business;provided,however, that the stockholders present at a duly called or held meeting at which a quorum is present may continue to transact business until adjournment notwithstanding the withdrawal of enough stockholders to leave less than a quorum, if any action taken (other than adjournment) is approved by at least a majority of the shares required to constitute a quorum. In the absence of a quorum, a majority in voting interest of the stockholders present in person or represented by proxy and entitled to vote, or, in the absence of all the stockholders entitled to vote, any officer entitled to preside at, or act as secretary of, such meeting, shall have the power to adjourn the meeting from time to time, without notice other than an announcement at the meeting until stockholders holding the requisite amount of stock to constitute a quorum shall be present or represented. At any such adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted at the meeting as originally called. The chairman of the meeting may determine that a quorum is present based upon any reasonable evidence of the presence in person or by proxy of stockholders holding a majority of the voting power of the Voting Stock, including, without limitation, evidence from any record of stockholders who have signed a register indicating their presence at the meeting. If the adjournment is for more than 30 days, or if, after the adjournment, a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.
(a) Unless otherwise determined by the Board, at each meeting of the stockholders, one of the following shall act as chairman of the meeting and preside thereat, in the following order of precedence:
(i) the Chairman, if any;
(ii) the Chief Executive Officer;
(iii) the President;
(iv) any director, officer or stockholder of the Corporation designated by the Board to act as chairman of such meeting and to preside thereat if the Chairman, the Chief Executive Officer and the President shall be absent from such meeting; or
(v) a stockholder of record who shall be chosen chairman of such meeting by a majority in voting interest of the stockholders present in person or by proxy and entitled to vote thereat.
(b) The Secretary or, if he or she shall be presiding over such meeting in accordance with the provisions of this Section 2.5 or if he or she shall be absent from such meeting, the person (who shall be an Assistant Secretary, if an Assistant Secretary has been appointed and is present) whom the chairman of such meeting shall appoint, shall act as secretary of such meeting and keep the minutes thereof.
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The date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at a meeting shall be announced at the meeting by the chairman of the meeting. The Board may adopt by resolution such rules and regulations for the conduct of the meeting of stockholders as it shall deem appropriate. Except to the extent inconsistent with such rules and regulations as adopted by the Board, the chairman of such meeting of stockholders shall have the right and authority to convene and to adjourn the meeting, determine the order of business to be transacted at such meeting, to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairman, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board or prescribed by the chairman of the meeting, may include, without limitation, the following: (a) the establishment of an agenda or order of business for the meeting; (b) rules and procedures for maintaining order at the meeting and the safety of those present; (c) limitations on attendance at or participation in the meeting to stockholders of record of the Corporation, their duly authorized and constituted proxies or such other persons as the chairman of the meeting shall determine; (d) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (e) limitations on the time allotted to questions or comments by participants. The chairman at any meeting of stockholders, in addition to making any other determinations that may be appropriate to the conduct of the meeting, shall, if the facts warrant, determine and declare to the meeting that a matter or business was not properly brought before the meeting and if such chairman should so determine, such chairman shall so declare to the meeting and any such matter or business not properly brought before the meeting shall not be transacted or considered. Unless and to the extent determined by the Board or the person presiding over the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure.
(a) Except as otherwise provided by applicable law, the Certificate of Incorporation or these By-laws, at each meeting of the stockholders, every stockholder of the Corporation shall be entitled, in person or by proxy, to that number of votes provided for in the Certificate of Incorporation in respect of each share of Voting Stock held by him, her or it and registered in his, her or its name, as applicable, on the books of the Corporation on the date fixed pursuant to Section 6.7 as the record date for the determination of stockholders entitled to vote at such meeting. Persons holding stock in a fiduciary capacity shall be entitled to vote the shares so held. A person whose stock is pledged shall be entitled to vote, unless, in the transfer by the pledgor on the books of the Corporation, he, she or it has expressly empowered the pledgee to vote thereon, in which case only the pledgee or his, her or its proxy may represent such stock and vote thereon. If shares or other securities having voting power stand in the record of two or more persons, whether fiduciaries, members of a partnership, joint tenants, tenants in common, tenants by the entirety or otherwise, or if two or more persons have the same fiduciary relationship respecting the same shares, unless the Secretary shall be given written notice to the contrary and furnished with a copy of the instrument or order appointing them or creating the relationship wherein it is so provided, their acts with respect to voting shall have the following effect:
(i) if only one votes, his, her or its act binds all;
(ii) if more than one votes, the act of the majority so voting binds all; and
(iii) if more than one votes, but the vote is evenly split on any particular matter, such shares shall be voted in the manner provided by law.
(b) If the instrument so filed shows that any such tenancy is held in unequal interests, a majority or even split for the purposes of this Section 2.7 shall be a majority or even split in interest. The Corporation shall not vote directly or indirectly any share of its own capital stock. Any vote of stock may be given by the stockholder entitled thereto in person or by his, her or its proxy appointed by an instrument in writing in the manner set forth in subparagraph (c) of this Section 2.7, subscribed by such stockholder or by his, her or its attorney thereunto authorized, delivered to, and filed by, the secretary of the meeting;provided,however, that no proxy shall be voted after three years from its date, unless said proxy provides for a longer period. At all meetings of the stockholders, all matters (except where other provision is made by applicable law, the Certificate of Incorporation or these By-laws, in which case such express provision shall govern and control the decision of such matter) shall be decided by the vote of a majority in voting interest of the stockholders
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present in person or by proxy at such meeting and entitled to vote thereon, a quorum being present. Unless demanded by a stockholder present in person or by proxy at any meeting and entitled to vote thereon, the vote on any question need not be by ballot. Upon a demand by any such stockholder for a vote by ballot upon any question, such vote by ballot shall be taken. On a vote by ballot, each ballot shall be signed by the stockholder voting, or by his, her or its proxy, if there be such proxy, and shall state the number of shares voted.
(c) Without limiting the manner in which a stockholder may authorize another person or persons to act for such stockholder as proxy pursuant to the General Corporation Law of the State of Delaware (the “Delaware Statute”), the following shall constitute a valid means by which a stockholder may grant such authority: (i) a stockholder may execute a writing authorizing another person or persons to act for such stockholder as proxy, and execution of the writing may be accomplished by the stockholder or the stockholder’s authorized officer, director, employee or agent signing such writing or causing his or her signature to be affixed to such writing by any reasonable means including, but not limited to, by facsimile signature; or (ii) a stockholder may authorize another person or persons to act for such stockholder as proxy by transmitting or authorizing the transmission of a telegram, cablegram or other means or electronic transmissions to the person who will be the holder of the proxy or to a proxy solicitation firm, proxy support service organization or like agent duly authorized by the person who will be the holder of the proxy to receive such transmission, provided that any such telegram, cablegram or other means of electronic transmission must either set forth or be submitted with information from which it can be determined that the telegram, cablegram or other transmissions are valid. If it is determined that such telegrams, cablegrams or other electronic transmissions are valid, the inspectors, or if there are no inspectors, such other persons making that determination shall specify the information upon which they relied.
Any copy, facsimile telecommunication or other reliable reproduction of writing or transmission created pursuant to the preceding paragraph of this Section 2.7 may be substituted or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used, provided that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction for the entire original writing or transmission.
(a) The chairman of the meeting may at any time appoint one or more inspectors to serve at any meeting of the stockholders. Any inspector may be removed, and a new inspector or inspectors appointed, by the Board at any time. Such inspectors shall decide upon the qualifications of voters, accept and count votes, declare the results of such vote and subscribe and deliver to the secretary of the meeting a certificate stating the number of shares of stock issued and outstanding and entitled to vote thereon and the number of shares voted for and against the question, respectively. The inspectors need not be stockholders of the Corporation, and any director or officer of the Corporation may be an inspector on any question other than a vote for or against his or her election to any position with the Corporation or on any other matter in which he or she may be directly interested. Before acting as herein provided, each inspector shall subscribe an oath to faithfully execute the duties of an inspector with strict impartiality and according to the best of his or her ability.
(b) The inspector shall perform his or her duties and shall make all determinations in accordance with the Delaware Statute including, without limitation, Section 231 of the Delaware Statute.
2.9 | | List of Stockholders. |
It shall be the duty of the Secretary or other officer of the Corporation who shall have charge of its stock ledger to prepare and make, at least 10 days before every meeting of the stockholders, a complete list of the stockholders entitled to vote thereat, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to any such meeting, during ordinary business hours, for a period of at least 10 days prior to such meeting, at the principal executive offices of the Corporation. Such list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.
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2.10 | | Transaction of Business. |
(a) Annual Meetings of Stockholders.
(i) Nominations of persons for election to the Board and the proposal of business to be considered by the stockholders may be made at an annual meeting of stockholders only (A) pursuant to the Corporation’s notice of meeting (or any supplement thereto) delivered pursuant to Section 2.3 of these By-laws, (B) by or at the direction of the Board or (C) by any stockholder of the Corporation who is entitled to vote at the meeting, who has complied with the notice procedures set forth in subparagraphs (ii) and (iii) of this Section 2.10(a) and who was a stockholder of record at the time such notice is delivered to the Secretary of the Corporation.
(ii) For nominations or other business to be properly brought before an annual meeting by a stockholder pursuant to clause (C) of Section 2.10(a)(i), the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation, and, in the case of business other than nominations, such other business must be a proper matter for stockholder action. To be timely, a stockholder’s notice shall be delivered to the Secretary at the principal executive offices of the Corporation not less than 90 days nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting;provided,however, that in the event that the date of the annual meeting is advanced by more than 20 days, or delayed by more than 70 days, from such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the 120th day prior to such annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting or the tenth day following the day on which public announcement of the date of such meeting is first made by the Corporation. Such stockholder’s notice shall set forth (A) as to each person whom the stockholder proposes to nominate for election or re-election as a director all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected; (B) as to any other business that the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend the By-laws of the Corporation, the language of the proposed amendment), the reasons for conducting such business at the meeting and any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made; and (C) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (1) the name and address of such stockholder, as they appear on the Corporation’s books, and of such beneficial owner, (2) the class and number of shares of the Corporation which are owned beneficially and of record by such stockholder and such beneficial owner, and that such shares have been held for the period required by any applicable law, (3) a representation that the stockholder is a holder of record of stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to propose such business or nomination and (4) a representation whether the stockholder or the beneficial owner, if any, intends or is part of a group which intends (x) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Corporation’s outstanding capital stock required to approve or adopt the proposal or elect the nominee and/or (y) otherwise to solicit proxies from stockholders in support of such proposal or nomination. The foregoing notice requirements shall be deemed satisfied by a stockholder if the stockholder has notified the Corporation of his, her or its intention to present a proposal at an annual meeting in compliance with Rule 14a-8 (or any successor thereof) promulgated under the Exchange Act and such stockholder’s proposal has been included in a proxy statement that has been prepared by the Corporation to solicit proxies for such annual meeting. The Corporation may require any proposed nominee to furnish such other information as it may reasonably require to determine the eligibility of such proposed nominee to serve as a director of the Corporation.
(iii) Notwithstanding anything in the second sentence of Section 2.10(a)(ii) to the contrary, in the event that the number of directors to be elected to the Board at an annual meeting is increased and there is no public announcement by the Corporation naming all of the nominees for director or specifying the size of the increased Board made by the Corporation at least 100 days prior to the first anniversary of the preceding year’s annual meeting, a stockholder’s notice required by this by-law shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the
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Secretary at the principal executive offices of the Corporation not later than the close of business on the tenth day following the day on which such public announcement is first made by the Corporation.
(b) Special Meetings of Stockholders. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting as set forth in the Corporation’s notice of meeting pursuant to Section 2.3 of these By-laws. Nominations of persons for election to the Board may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of meeting (i) by or at the direction of the Board or (ii) by any stockholder of the Corporation who is entitled to vote at the meeting, who complies with the notice procedures set forth in this by-law and who is a stockholder of record at the time such notice is delivered to the Secretary of the Corporation. Nominations by stockholders of persons for election to the Board may be made at such a special meeting of stockholders if the stockholder’s notice as required by Section 2.10(a)(ii) of this by-law shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the later of the 90th day prior to such special meeting or the tenth day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board to be elected at such meeting.
(c) General.
(i) Only persons who are nominated in accordance with the procedures set forth in this by-law shall be eligible to serve as directors elected by the Corporation’s stockholders and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this by-law. Except as otherwise provided by law, the Certificate of Incorporation or these By-laws, the chairman of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made in accordance with the procedures set forth in this by-law and, if any proposed nomination or business is not in compliance with this by-law, to declare that such defective nomination shall be disregarded or that such proposed business shall not be transacted. Notwithstanding the foregoing provisions of this by-law, if the nominating or proposing stockholder (or a qualified representative of the nominating or proposing stockholder) does not appear at the annual or special meeting of stockholders of the Corporation to present a nomination or business, such nomination shall be disregarded and such proposed business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the Corporation.
(ii) For purposes of this Section 2.10, “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.
(iii) For purposes of this by-law, no adjournment nor notice of adjournment of any meeting shall be deemed to constitute a new notice of such meeting for purposes of this Section 2.10, and in order for any notification required to be delivered by a stockholder pursuant to this Section 2.10 to be timely, such notification must be delivered within the periods set forth above with respect to the originally scheduled meeting.
(iv) Notwithstanding the foregoing provisions of this by-law, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this by-law. Nothing in this by-law shall be deemed to affect any rights of (A) stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act or (B) the holders of any series of preferred stock to elect directors pursuant to any applicable provisions of the Certificate of Incorporation (including any certificate of designations relating to such series).
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ARTICLE III
BOARD OF DIRECTORS
