Exhibit 10.16
MLA No. ML0743
SECOND AMENDED AND RESTATED MASTER LOAN AGREEMENT
THIS SECOND AMENDED AND RESTATED MASTER LOAN AGREEMENT (this "Agreement"),
dated as of November 30, 2004, is made by and between COBANK, ACB ("CoBank") and
Shenandoah Telecommunications Company (the "Borrower").
WHEREAS, the Borrower and CoBank have previously entered into that certain
Master Loan Agreement, dated as of January 12, 2000, as amended and restated by
that certain Amended and Restated Master Loan Agreement, dated as of June 22,
2001 (the "Prior MLA").
WHEREAS, the Borrower and CoBank now wish to amend and restate the Prior
MLA on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing, intending to be legally
bound hereby, and in consideration of CoBank making one or more loans to the
Borrower, CoBank and the Borrower hereby amend and restate the Prior MLA in its
entirety as follows:
SECTION 1. Supplements. In the event the Borrower desires to borrow from
CoBank and CoBank is willing to lend to the Borrower, or in the event CoBank and
the Borrower desire to consolidate any existing loans hereunder, the parties
will enter into a Supplement to this Agreement (each supplement, as it may be
amended, modified, supplemented, extended or restated from time to time, a
"Supplement" and, collectively, the "Supplements"). Each Supplement will set
forth CoBank's commitment to make a loan or loans (each, a "Loan" and,
collectively, the "Loans") to the Borrower, the amount of the Loan(s), the
purpose of the Loan(s), the interest rate or rate options applicable to the
Loan(s), the repayment terms of the Loan(s), and any other terms and conditions
applicable to the Loan(s). Each Loan will be governed by the terms and
conditions contained in this Agreement and in the Supplement relating to that
Loan.
SECTION 2. Availability. Advances under the Loans will be made available
on any day on which CoBank and the Federal Reserve Banks are open for business
(a "Business Day") upon the telephonic or written request of an authorized
employee of the Borrower. Requests for advances under the Loans must be received
no later than 12:00 noon Eastern time on the date the advance is desired or at
such earlier date and time as may be specified in the relevant Supplement.
Advances under the Loans will be made available by wire transfer of immediately
available funds. Wire transfers will be made to such account or accounts as may
be authorized by the Borrower. In taking actions upon telephonic requests,
CoBank shall be entitled to rely on (and shall incur no liability to the
Borrower in acting upon) any request made by a person identifying himself or
herself as one of the persons authorized by the Borrower to request advances
hereunder, so long as any funds advanced are wired to an account previously
designated by the Borrower.
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MLA No. ML0743
SECTION 3. Notes and Payments. The Borrower's obligation to repay the
Loans made under each Supplement shall be evidenced by a promissory note (which
may be part of such Supplement) in form and content acceptable to CoBank (such
notes, as they may be amended, modified, supplemented, extended, restated or
replaced from time to time, collectively, the "Notes", and each a "Note"). The
Borrower shall make each payment which it is required to make under the terms of
this Agreement, each Supplement, the Notes and all security and other
instruments and documents relating hereto and thereto (such agreements,
Supplements, Notes, instruments and documents, as they may be amended from time
to time, collectively, at any time, the "Loan Documents") by wire transfer of
immediately available funds or by check. Wire transfers shall be made to ABA No.
307088754 for advice to and credit of CoBank (or to such other account as CoBank
may direct by notice). The Borrower shall give CoBank telephonic notice no later
than 12:00 noon Eastern time of its intent to pay by wire. Funds received by
wire before 3:00 p.m. Eastern time shall be credited on the day received and
funds received by wire after 3:00 p.m. Eastern time shall be credited on the
next Business Day. Checks shall be mailed to CoBank, at Department 167, Denver,
Colorado 80291-0167 (or to such other place as CoBank may direct by notice).
Credit for payment by check will not be given until the later of: (i) the day on
which CoBank receives immediately available funds; or (ii) the next Business Day
after receipt of the check. If any date on which a payment is due under any Loan
Document is not a Business Day, then such payment shall be made on the next
Business Day and such extension of time shall be included in the calculation of
interest due.
SECTION 4. Security. The Borrower's obligations under the Loan Documents
shall be secured by a statutory first lien on all equity interests in CoBank
which the Borrower may now own or hereafter acquire or be allocated. In
addition, the Borrower's obligations under this Agreement, any Supplement or
Note may be secured as provided in such Supplement or Note, and may be
guaranteed as provided in any future Supplement. The Borrower agrees to take
such steps (including the execution of such instruments and documents) as CoBank
may from time to time reasonably require to enable CoBank to obtain, perfect and
maintain its security interests in such property as is described in the
Supplements.
SECTION 5. Conditions Precedent.
(A) Conditions to Initial Supplement. CoBank's obligation to extend
credit under the initial Supplement is subject to the conditions precedent that
CoBank receive, in form and substance satisfactory to CoBank, each of the
following:
(1) This Agreement, Etc. A duly executed original of this
Agreement and all instruments and documents contemplated hereby.
(2) Delegation Form. A duly completed and executed original of
a CoBank Delegation and Wire Transfer Authorization form.
(B) Conditions to Each Supplement. CoBank's obligations, if any, to
extend credit under, each Supplement, including the initial Supplement, is
subject to the conditions precedent that CoBank receive, in form and content
satisfactory to CoBank, each of the following:
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(1) Supplement. A duly executed original of such Supplement,
the Note relating thereto, and all other instruments and documents
contemplated by such Supplement.
(2) Evidence of Authority. Such certified board resolutions,
evidence of incumbency, and other evidence that CoBank may require that
the Supplement, the Note relating thereto and all other instruments and
documents executed in connection therewith, and, in the case of the
initial Supplement, this Agreement and all instruments and documents
executed in connection herewith, have been duly authorized and executed.
(3) Consents and Approvals. Such evidence as CoBank may
require that all required regulatory and other consents and approvals have
been obtained and are in full force and effect.
(4) Fees and Other Charges. All fees and other charges
provided for herein or in the Supplement.
(5) Insurance. Such evidence as CoBank may require that the
Borrower is in compliance with Subsection 7(E) hereof.
(6) Evidence of Perfection, Etc. Such evidence as CoBank may
require that CoBank has a duly perfected first priority security interest
in all collateral contemplated by the Supplement.
(7) Opinions of Counsel. Opinions of counsel to the Borrower
and any other entity party to the Loan Documents relating to such
Supplement acceptable to CoBank.
(C) Conditions to Each Advance. CoBank's obligation under each
Supplement to make any Loan or advance to the Borrower thereunder is subject to
the further conditions set forth in such Supplement and that no Event of Default
(as defined in Section 9 hereof) or event which with the giving of notice and/or
the passage of time would become an Event of Default hereunder (a "Potential
Default"), shall have occurred and be continuing.
SECTION 6. Representations and Warranties. The execution by the Borrower
of each Supplement and each request for an advance thereunder shall constitute a
representation and warranty to CoBank that:
(A) Organization; Powers; Etc. The Borrower and each of its
subsidiaries (collectively, the "Subsidiaries") (i) is duly organized, validly
existing, and in good standing under the laws of its state of incorporation or
formation, as the case may be; (ii) is duly qualified to do business and is in
good standing in each jurisdiction in which the character of its properties or
the nature of its business requires such qualification; (iii) has all requisite
legal and corporate power to own and operate its assets and to carry on its
business and to enter into and perform its obligations under the Loan Documents
to which it is a party; and (iv) has duly and lawfully
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obtained and maintained all franchises, licenses, certificates, permits,
authorizations, approvals, and the like which are necessary in the conduct of
its business.
(B) Due Authorization; No Violations; Etc. The execution and
delivery by the Borrower of, and the performance by the Borrower of its
obligations under, the Loan Documents to which it is a party have been duly
authorized by all requisite corporate action and do not and will not (i) violate
its articles of incorporation, its bylaws, any provision of any law, rule or
regulation, any judgment, order or ruling of any court or Governmental
Authority, any agreement, indenture, mortgage, or other instrument to which the
Borrower is a party or by which the Borrower or any of its property is bound, or
(ii) be in conflict with, result in a breach of, or constitute with the giving
of notice or lapse of time, or both, a default under any such agreement,
indenture, mortgage, or other instrument. All actions, if any, on the part of
the shareholders of the Borrower necessary in connection with the execution and
delivery by the Borrower of, and the performance by the Borrower of its
obligations under, the Loan Documents to which it is a party have been taken and
remain in full force and effect.
(C) Binding Agreement. Each of the Loan Documents to which the
Borrower is a party is, or when executed and delivered will be, the legal,
valid, and binding obligation of the Borrower, enforceable against the Borrower
in accordance with its terms, subject only to limitations on enforceability
imposed by (i) applicable bankruptcy, insolvency, reorganization, moratorium, or
similar laws affecting creditors' rights generally, and (ii) general equitable
principles.
(D) Financial Statements, Budgets, Projections, Etc. All financial
statements of the Borrower and any of the Subsidiaries submitted to CoBank in
connection with the Loans present fairly in all material respects the financial
condition of such entity to which such statements relate and the results of such
entity's operations for the periods covered thereby, and are prepared in
accordance with generally accepted accounting principles ("GAAP") consistently
applied (except, in the case of unaudited financial statements, for the omission
of footnotes, other schedules and the effect of normal year-end audit
adjustments). All budgets, projections, feasibility studies, and other
documentation submitted to CoBank in connection with the Loans, by or on behalf
of the Borrower or any of the Subsidiaries were based upon assumptions that were
believed to be reasonable at the time submitted, and as of the date of such
Supplement or request for advance, no fact has come to the attention of the
Borrower, and no event or transaction has occurred, which would cause any
assumption made therein not to be reasonable.
(E) Consents and Approvals. No consent, permission, authorization,
order or license of any Governmental Authority is necessary in connection with
the execution, delivery, performance or enforcement of the Loan Documents to
which the Borrower is a party or the creation and perfection of the liens and
security interests granted thereby, except as such have been obtained and are in
full force and effect.
(F) Compliance with Laws. The Borrower and each of the Subsidiaries
is in compliance in all material respects with all federal, state and local
laws, rules, regulations, ordinances, codes and orders (collectively, "Laws"),
the failure to comply with which could reasonably be expected to have a Material
Adverse Effect. The term "Material Adverse
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Effect" shall mean a material adverse effect on the condition, financial or
otherwise, operations, properties or business of the Borrower and the
Subsidiaries, taken as a whole, or on the ability of the Borrower to perform its
obligations under the Loan Documents.
(G) Environmental Compliance. Without limiting the provisions of
Subsection 6(F), all property owned or leased by the Borrower or any of the
Subsidiaries and all operations conducted by them are in compliance in all
material respects with all Laws relating to environmental protection, the
failure to comply with which could reasonably be expected to have a Material
Adverse Effect.
(H) Litigation. There are no pending legal, arbitration, or
governmental actions or proceedings to which the Borrower or any of the
Subsidiaries is a party or to which any of their respective property is subject
which could reasonably be expected to have a Material Adverse Effect, and to the
best of the Borrower's knowledge, no such actions or proceedings are threatened
or contemplated.
(I) Principal Place of Business; Records. The principal place of
business and chief executive office of the Borrower and the place where the
records required by Subsection 7(G) are kept is at the address of the Borrower
shown in Section 14.
(J) Employee Benefit Plans. The Borrower and each of the
Subsidiaries is in compliance in all material respects with the applicable
provisions of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and the regulations and published interpretations thereunder, the
failure to comply with which could reasonably be expected to have a Material
Adverse Effect.
(K) Taxes. The Borrower and each of the Subsidiaries has filed or
caused to be filed all federal, state and local tax returns that are required to
be filed, and has paid all taxes as shown on such returns or on any assessment
received by them to the extent such taxes have become due, except where the
payment of such tax or assessment is being contested by the Borrower or such
Pledged Subsidiary in good faith and by appropriate proceedings and then only if
and to the extent reserves required by GAAP have been set aside on the
Borrower's or such Pledged Subsidiary's books therefor.
(L) Investment Company Act; Public Utility Holding Company Act. The
Borrower is not an "investment company" as that term is defined in, or otherwise
subject to regulation under, the Investment Company Act of 1940, as amended. The
Borrower is not a "holding company" as that term is defined in, or otherwise
subject to regulation under, the Public Utility Holding Company Act of 1935, as
amended.
(M) Use of Proceeds. The funds to be borrowed under this Agreement
and each Supplement are being borrowed for use only as contemplated thereby. No
part of such funds are being borrowed to purchase any "margin securities" or
otherwise in violation of the regulations of the Federal Reserve System.
(N) Subsidiaries. The Borrower has no direct subsidiaries other than
as set forth on Schedule 6(N) to this Agreement. The Borrower is the registered
(if applicable) and
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beneficial owner, directly or indirectly, of the specified percentage of the
shares of issued and outstanding capital stock or the membership interest, as
applicable, of each of the Subsidiaries as set forth on Schedule 6(N), which
stock or membership interest is owned free and clear of all liens, warrants,
options, rights to purchase, rights of first refusal and other interests of any
person (except for liens granted to CoBank under the Loan Documents) and which
has been duly authorized and validly issued and is fully paid and
non-assessable.
(O) Licenses; Permits; Etc. The Borrower and each of the
Subsidiaries is the valid holder of all franchises, licenses, certificates,
permits, authorizations, approvals and the like which are material to the
conduct of its business and which may be required by law, including, without
limitation, all licenses and permits of the Federal Communications Commission
(the "FCC"), the Virginia State Corporation Commission (the "PUC"), the public
utility commissions of any other states in which the Borrower operates and all
required cable television franchises and all such franchises, licenses,
certificates, permits, authorizations, approvals, and the like are in full force
and effect on the date hereof.
(P) Business Neither the Borrower nor any of the Subsidiaries is
engaged in any business activity or operation other than the provision of
wireline telephone, cellular telephone, cable television and personal
communications services, other telecommunications services and other services
related to such businesses.
SECTION 7. Affirmative Covenants. Unless otherwise agreed to in writing by
CoBank, which consent shall not be unreasonably withheld, so long as this
Agreement shall remain in effect or the obligations hereunder shall be unpaid or
otherwise unsatisfied, the Borrower will, and (except for Subsections 7(I)(1)
and (2), 7(J), 7(K), 7(L) and 7(M)) will cause each of the Subsidiaries to
(provided that following its acquisition, any Pledged Subsidiary, including,
without limitation, NTC Communications, LLC, shall have 90 days to be in
compliance with the affirmative covenants applicable to it):
(A) Existence. Preserve and keep in full force and effect its
corporate or limited liability company existence and good standing in the
jurisdiction of its incorporation or formation, and its qualification to
transact business and its good standing in all places in which the character of
its properties or the nature of its business requires such qualification.
(B) Compliance with Laws and Agreements. Comply in all material
respects with all Laws and agreements, indentures, mortgages, and other
instruments to which it is a party or by which it or any of its property is
bound, the failure to comply with which could reasonably be expected to have a
Material Adverse Effect.
(C) Compliance with Environmental Laws. Without limiting the
provisions of Subsection 7(B), comply in all material respects with, and cause
all persons occupying or present on any properties owned or leased by it to so
comply with, all Laws relating to environmental protection, the failure to
comply with which could reasonably be expected to have a Material Adverse
Effect.
(D) Licenses; Permits; Etc. Duly and lawfully obtain and maintain in
full force and effect all franchises, licenses, certificates, permits,
authorizations, approvals, and the
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like which are material to the conduct of its business or which may be required
by applicable Laws, including without limitation, all FCC licenses and permits,
all licenses and permits of the PUC, and all required cable television
franchises, which the failure to so obtain or maintain could reasonably be
expected to have a Material Adverse Effect.
(E) Insurance. Maintain insurance with insurance companies or
associations acceptable to CoBank in such amounts and covering such risks as are
usually carried by companies engaged in the same or similar business and
similarly situated, and make such increases in the type or amount of coverage as
CoBank may reasonably request.
(F) Property Maintenance. Maintain and preserve at all times its
property and each and every part and parcel thereof necessary to the proper
functioning of its business in good repair, working order, and condition,
ordinary wear and tear excepted, and in compliance in all material respects with
all applicable Laws.
(G) Books and Records. Keep adequate records and books of account in
accordance with GAAP consistently applied and any system of accounts to which it
is subject.
(H) Inspection. Permit CoBank or its agents, at CoBank's expense,
upon reasonable notice and during normal business hours or at such other times
as the parties may agree, to (i) examine its properties, books, and records,
(ii) discuss its affairs, finances, operations, and accounts with its officers,
directors, and independent certified public accountants and (iii) with the prior
consent of, and in the presence of, an officer of the Borrower in each instance,
which consent shall not be unreasonably withheld, discuss its affairs, finances,
operations, and accounts with one or more of its employees.
(I) Reports and Notices. Furnish, or cause to be furnished, to
CoBank:
(1) Annual Financial Statements. As soon as available, but in
no event later than 120 days after the end of each fiscal year of the
Borrower occurring during the term hereof, annual financial statements of
the Borrower prepared on a Consolidated Basis (as hereafter defined) in
accordance with GAAP consistently applied and in a format that
demonstrates any accounting or formatting change that may be required by
the various jurisdictions in which the business of the Borrower is
conducted (to the extent not inconsistent with GAAP). Such financial
statements shall: (i) be audited by independent certified public
accountants selected by the Borrower and reasonably acceptable to CoBank;
(ii) be accompanied by a report of such accountants containing an
unqualified opinion or an opinion otherwise acceptable to CoBank; (iii) be
prepared in reasonable detail, and set forth in comparative form
corresponding figures for the preceding fiscal year; and (iv) include a
balance sheet, a statement of income, a statement of retained earnings, a
statement of cash flows, and all notes and schedules relating thereto. In
addition, each of such audited consolidated annual financial statements
shall be accompanied by separate unaudited annual financial statements for
each of the subsidiaries of the Borrower whose accounts are, in accordance
with GAAP, consolidated with the Borrower, consisting of a balance sheet
and a statement of income.
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(2) Quarterly Financial Statements. As soon as available but
in no event later than 60 days after the end of each of the first three
fiscal quarters of each fiscal year of the Borrower occurring during the
term hereof, unaudited quarterly financial statements of the Borrower, in
each case, prepared on a Consolidated Basis in accordance with GAAP
consistently applied (except for the omission of footnotes and for the
effect of normal year-end audit adjustments) and in a format that
demonstrates any accounting or formatting change that may be required by
various jurisdictions in which the business of the Borrower is conducted
(to the extent not inconsistent with GAAP). Each of such financial
statements shall (i) be prepared in reasonable detail and set forth in
comparative form corresponding figures for the corresponding period of the
preceding fiscal year, and (ii) include a balance sheet, a statement of
income for such quarter and for the period year-to-date, a statement of
cash flows and such other quarterly statements as CoBank may specifically
request, which quarterly statements shall include any and all supplements
thereto; provided, however, that the Borrower shall not be obligated to
provide any quarterly consolidating financial statements if such
statements have not been prepared for any other purpose.
(3) Notice of Default. Promptly after becoming aware thereof,
notice of (i) the occurrence of any Potential Default or Event of Default
under any of the Loan Documents; provided, however, that the failure to
give such notice shall not affect the right and power of CoBank to
exercise any and all of the remedies specified herein.
(4) Notice of Non-Environmental Litigation. Promptly after the
commencement thereof, notice of the commencement of all actions, suits, or
proceedings before any court, arbitrator, or governmental department,
commission, board, bureau, agency, or instrumentality affecting it which
could reasonably be expected to have a Material Adverse Effect.
(5) Notice of Environmental Litigation. Without limiting the
provisions of Subsection 7(I)(4), promptly after receipt or becoming aware
thereof, notice of the receipt of all pleadings, orders, complaints,
indictments, or other communications (i) alleging a condition that may
require it to undertake or to contribute to a cleanup or other response
under Laws relating to environmental protection, or which seek penalties,
damages, injunctive relief, or criminal sanctions related to alleged
violations of such Laws, or which claim personal injury or property damage
to any person as a result of environmental factors or conditions and (ii)
which could reasonably be expected to have a Material Adverse Effect.
(6) Regulatory and Other Notices. Promptly after filing,
receipt or becoming aware thereof, copies of any filings or communications
sent to and notices or other communications received by it from any
Governmental Authority, including, without limitation, the Securities and
Exchange Commission, the FCC, the PUC, any cable television franchisor or
any other state utility commission relating to any material noncompliance
by it with any Laws or with respect to any matter or proceeding the effect
of which, if adversely determined, could reasonably be expected to have a
Material Adverse Effect.
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(7) Material Adverse Change. Prompt notice of any matter which
has had or could reasonably be expected to have a Material Adverse Effect.
(8) Compliance Certificates. Concurrently with each statement
required to be furnished pursuant to Subsection 7(I)(1) or (2), a
compliance certificate in the form attached hereto as Exhibit A executed
by the President or chief financial officer of the Borrower.
(9) ERISA Reportable Events. Within 30 days after it becomes
aware of the occurrence of any Reportable Event (as defined in Section
4043 of ERISA) applicable to it, a statement describing such Reportable
Event and the actions it proposes to take in response to such Reportable
Event.
(10) Other Information. Such other information regarding the
condition, financial or otherwise, or operations of the Borrower and the
Subsidiaries as CoBank may, from time to time, reasonably request.
(J) Total Leverage Ratio. Achieve as of the last day of each fiscal
quarter of the Borrower (each a "Quarterly Date"), a Total Leverage Ratio (as
hereinafter defined), determined in accordance with GAAP consistently applied of
the Borrower and all subsidiaries whose accounts are, at the time of
determination, in accordance with GAAP, consolidated (on a "Consolidated Basis")
with the Borrower, not exceeding 2.50:1.00. The term "Total Leverage Ratio"
shall mean the ratio of Indebtedness to Operating Cash Flow (as such terms are
hereinafter defined). The term "Indebtedness" shall mean (i) obligations for
borrowed money, (ii) obligations representing the deferred purchase price of
property or services other than accounts payable arising in connection with the
purchase of goods or services on terms customary in the trade, (iii)
obligations, whether or not assumed, secured by liens or payable out of the
proceeds or production from property now or hereafter owned or acquired, (iv)
obligations which are evidenced by notes, acceptances or other instruments, (v)
leases of real or personal property which are required to be capitalized under
GAAP or which are treated as operating leases under regulations applicable to
them but which otherwise would be required to be capitalized under GAAP (each a
"Capital Lease"), (vi) fixed rate hedging obligations that are due (after giving
effect to any period of grace or notice requirement applicable thereto) and
remain unpaid, and (vii) fixed payment obligations under guarantees that are due
and remain unpaid. For purposes of this Agreement, the term "Operating Cash
Flow" (i) shall mean the sum of (a) net income or deficit, as the case may be,
excluding extraordinary gains and the write-up of any asset, (b) total interest
expense (including non-cash interest), (c) depreciation and amortization expense
and other similar non-cash expense and (d) federal, state and/or local income
taxes and (ii) shall be measured for the then most recently completed four
fiscal quarters, adjusted to give effect to any acquisition, sale or other
disposition of any operation or business (or any portion thereof) during the
period of calculation as if such acquisition, sale or other disposition occurred
on the first day of such period of calculation.
(K) Debt Service Coverage Ratio. Achieve as of each Quarterly Date,
a Debt Service Coverage Ratio (as hereinafter defined), determined in accordance
with GAAP consistently applied and calculated on a Consolidated Basis, greater
than or equal to 2.00:1.00. The term "Debt Service Coverage Ratio" shall mean
the ratio of (i) Operating Cash Flow minus
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cash taxes to (ii) the aggregate of principal and interest payments due on
Indebtedness during the applicable period. Debt Service Coverage Ratio shall be
measured for the then most recently completed four fiscal quarters, adjusted to
give effect to any acquisition, sale or other disposition of any operation or
business (or any portion thereof) during the period of calculation as if such
acquisition, sale or other disposition occurred on the first day of such period
of calculation.
(L) Equity to Total Assets Ratio. Achieve as of each Quarterly Date,
an Equity to Total Assets Ratio (as hereinafter defined), determined in
accordance with GAAP consistently applied and calculated on a Consolidated
Basis, greater than or equal to 35.0%. The term "Equity to Total Assets Ratio"
shall mean the percentage derived by dividing (i) the amount derived by
subtracting total liabilities from total assets by (ii) total assets, each as of
the last day of the applicable period.
(M) Capitalization. The Borrower agrees to purchase such equity in
CoBank as CoBank may from time to time require in accordance with its bylaws and
capital plan; provided, however, that CoBank may not require the Borrower to
purchase equity in CoBank in an amount greater than 13% of the portion of
CoBank's five-year average risk-adjusted asset base attributable to loans made
by CoBank to the Borrower. In connection with the foregoing, the Borrower hereby
acknowledges receipt, prior to the execution of this Agreement, of CoBank's
bylaws, a written description of the terms and conditions under which the equity
is issued, CoBank's Loan-Based Capital Plan, CoBank's most recent annual report,
and if more recent than CoBank's latest annual report, its latest quarterly
report. The Borrower hereby consents and agrees that the amount of any
distributions with respect to its patronage with CoBank that are made in
qualified written notices of allocation (as defined in 26 U.S.C. ss. 1388) and
that are received by the Borrower from CoBank, will be taken into account by the
Borrower at the stated dollar amounts whether the distribution is evidenced by a
Participation Certificate or other form of written notice that such distribution
has been made and recorded in the name of the Borrower on the records of CoBank.
All such investments and all other equities in CoBank which the Borrower may now
own or hereafter acquire or be allocated shall be subject to a statutory first
lien in favor of CoBank.
SECTION 8. Negative Covenants.
(A) Borrower. Unless otherwise consented to in writing by CoBank,
which consent shall not be unreasonably withheld, the Borrower covenants and
agrees with CoBank that, so long as this Agreement shall remain in effect or the
obligations hereunder shall be unpaid or otherwise unsatisfied, the Borrower
will not:
(1) Borrowings. Create, incur, assume, or allow to exist,
directly or indirectly, any Indebtedness except for (i) Indebtedness to
CoBank, (ii) Indebtedness under purchase money security agreements and
Capital Leases ("Purchase Money Indebtedness") not to exceed $5,000,000 in
the aggregate for the Borrower and its subsidiaries at any one time, (iii)
obligations to any Pledged Subsidiary, and (iv) other unsecured
Indebtedness (including, for purposes of this clause (iv), Indebtedness to
SunTrust Bank pursuant to that certain Commercial Note, dated as of May 8,
2001 (the "SunTrust Note"), from the Borrower to SunTrust Bank) not to
exceed $5,000,000 in the aggregate for the Borrower and its subsidiaries
at any one time.
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(2) Liens. Create, incur, assume, or allow to exist any
mortgage, deed of trust, deed to secure debt, pledge, lien (including the
lien of an attachment, judgment, or execution), security interest, or
other encumbrance of any kind upon any of its property, real or personal.
The foregoing restrictions shall not apply to (i) liens in favor of
CoBank; (ii) liens for taxes, assessments, or governmental charges that
are not past due, unless the same are being contested in good faith and by
appropriate proceedings and then only if and to the extent reserves
required by GAAP have been set aside therefor; (iii) liens, pledges, and
deposits under workers' compensation, unemployment insurance, social
security and similar laws; (iv) liens, deposits, and pledges to secure the
performance of bids, tenders, contracts (other than contracts for the
payment of money), and like obligations arising in the ordinary course of
its business as conducted on the date hereof; (v) liens imposed by law in
favor of mechanics, materialmen, warehousemen, lessors and like persons
that secure obligations that are not past due, unless the same are being
contested in good faith and by appropriate proceedings and then only if
and to the extent reserves required by GAAP have been set aside therefor;
(vi) liens constituting encumbrances in the nature of zoning restrictions,
easements and rights or restrictions of record on the use of real property
of the Borrower that, in the sole judgment of CoBank, do not materially
detract from the value of such real property or impair the use thereof in
the Borrower's business; (vii) purchase money security interests and
equipment leases securing Purchase Money Indebtedness permitted under
Subsection 8(A)(1)(ii), provided that such security interests and leases
do not encumber any property other than the items purchased with the
proceeds thereof or leased thereby and any proceeds thereof; (viii) the
"Collateral" as defined in the SunTrust Note, without giving effect to any
amendments of such SunTrust Note after the date hereof; and (ix) liens on
capital stock of any subsidiary of the Borrower that is not a Pledged
Subsidiary, provided that CoBank shall have consented to the related
borrowing as required under Subsection 8(A)(1).
(3) Fundamental Changes. (i) merge or consolidate with any
other entity, acquire all or substantially all of the assets of any person
or entity, provided that the Borrower and the Pledged Subsidiaries may
without the consent of CoBank acquire, in the aggregate, all or
substantially all of the assets of any person or person or entity or
entities in an amount up to $20,000,000 over the term of the Loans, so
long as after giving effect to such asset acquisitions, the Borrower in
each case is in compliance on a pro forma basis with the covenants set
forth in Subsections 7(J) through 7(L) hereof, (ii) form or create any
subsidiary or affiliate other than in compliance with the provisions of
Section 2 of the Second Amended and Restated Pledge Agreement, dated as of
even date herewith), by and between CoBank and the Borrower (the "Pledge
Agreement"), or (iii) commence operations under any other name,
organization, or entity, including any joint venture.
(4) Transfer of Assets. Sell, transfer, lease, enter into any
contract for the sale, transfer or lease of, or otherwise dispose of, any
of its operating assets, except in the ordinary course of its business;
provided, however, that the Borrower may sell, transfer, lease or other
disposition of assets which in the aggregate for the Borrower and its
subsidiaries do not exceed $5,000,000 in any fiscal year or exceed
$25,000,000 over the term of the Loans so long as no Potential Default or
Event of Default exists
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before such disposition and no violation of Subsections 7(J) though 7(L)
hereof will result after giving affect to such disposition.
(5) Loans and Investments. After the date hereof, make any
loan or advance to, invest in, purchase or make any commitment to purchase
any commercial paper, stock, bonds, notes, or other securities of any
person or entity (each, whether made directly or indirectly, an
"Investment") other than a Pledged Subsidiary other than:
(a) commercial paper maturing not in excess of one
year from the date of acquisition and rated "P1" by Moody's
Investors Service, Inc., or "A1" by Standard & Poor's Corporation on
the date of acquisition;
(b) certificates of deposit in North American
commercial banks rated "C" or better by Keefe, Bruyette & Woods,
Inc., or "3" or better by Cates Consulting Analysts, maturing not in
excess of one year from the date of acquisition;
(c) securities or deposits issued, guaranteed, or
fully insured as to payment by the United States government or any
agency thereof, and Class C stock or stock or other securities of,
or investments in CoBank or CoBank investment services or programs;
(d) repurchase agreements of any bank or trust
company incorporated under the laws of the United States of America
or any state thereof and fully secured by a pledge of obligations
issued or fully and unconditionally guaranteed by the United States
government;
(e) money market funds maintained by nationally
recognized investment firms or financial institutions, which funds
are from time to time invested only in securities of the type
described in (a) through (d) above and other securities having a
rating of "A" or better by a nationally recognized rating agency;
provided that the aggregate amount invested in such money market
funds shall not at any time exceed $3,000,000 for any one such fund
and $5,000,000 for any one such investment firm or financial
institution; and
(f) commercial paper, stocks, bonds, notes, other
securities and other ownership interests that are excluded from the
scope of (a) through (e) and are issued by corporations or other
entities incorporated or organized under the laws of the United
States of America or any state thereof (collectively "Other
Investments"); provided that:
(i) the aggregate amount (calculated as the lower of cost or
market value) of all Other Investments made by the
Borrower and the Subsidiaries at any one time shall not
in any event exceed 15% of the Borrower's total assets
calculated on a Consolidated Basis, and
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(ii) the Borrower will provide CoBank with a schedule of all
Other Investments (including valuations) at the end of
each fiscal quarter and more frequently upon CoBank's
request.
The Borrower acknowledges that CoBank is not in any way acting as an advisor to
it with respect to its or the Subsidiaries investments or otherwise and shall
have no responsibility to it in connection with CoBank's rights under this
Subsection or Subsection 8(B)(5), whether or not CoBank exercises any right to
review investments or makes any recommendation concerning the advisability of
any Other Investment, and the Borrower agrees that the Borrower and the
Subsidiaries will be solely responsible for all decisions made by the Borrower
or any of the Subsidiaries with respect to their respective investments.
(6) Change in Business. Engage in any business activity or
operation different from or unrelated to the business activities and
operations described in Subsection 6(P).
(7) Guarantees. Guarantee, assume, or otherwise become
obligated or liable with respect to the indebtedness or other obligations
of any person or entity, other than (i) guaranties made in favor of
CoBank, (ii) the endorsement of checks, and (iii) guaranties made pursuant
to that certain Performance Guaranty, dated as of November 5, 1999, made
by the Borrower for the benefit of Sprint PCS with respect to obligations
of Shenandoah Personal Communications Company in connection with the
construction and lease of a PCS system in FCC designated basic trading
areas 179, 479, 183, 12, 181 and 483.
(8) Distributions. Make, declare or pay, directly or
indirectly, any dividend or other distribution of assets to shareholders
of the Borrower, or retire, redeem, purchase or otherwise acquire for
value any capital stock of the Borrower; provided, that the Borrower may
declare or pay a dividend or other distribution of assets, or retire,
redeem, purchase or otherwise acquire capital stock of the Borrower in any
fiscal year in an aggregate amount equal to the greater of (i) $10,000,000
or (ii) 100% of the immediately preceding fiscal year's aggregate
after-tax consolidated net income of the Borrower if, and only if, no
Potential Default or Event of Default then exists and no violation of
Sections 7(J) through 7(L) hereof will result after giving effect to such
dividend, distribution, retirement, redemption, purchase or other
acquisition.
(9) Salaries; Wages; Compensation. Pay any wages, salaries or
other compensation to any officer, director, stockholder, or partner (or
relative of any thereof) of the Borrower or any of the Subsidiaries unless
such compensation shall be (i) reasonable and comparable with compensation
paid by companies of like nature, similarly situated, and (ii) payment for
services actually rendered.
(B) The Subsidiaries. Unless otherwise consented to in writing by
CoBank, which consent shall not be unreasonably withheld, the Borrower covenants
and agrees with CoBank that, so long as this Agreement shall remain in effect or
the obligations hereunder shall be unpaid or otherwise unsatisfied, none of the
Subsidiaries will (provided that following its
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acquisition, any Pledged Subsidiary, including, without limitation, NTC
Communications, LLC, shall have 90 days to be in compliance with these negative
covenants):
(1) Borrowings. Create, incur, assume, or allow to exist,
directly or indirectly, any Indebtedness except for (i) Indebtedness to
CoBank, (ii) Purchase Money Indebtedness, the aggregate amount of which
does not exceed $5,000,000 for the Borrower and its subsidiaries at any
one time, (iii) Indebtedness to the Borrower or any other Pledged
Subsidiary, and (iv) Indebtedness of Shenandoah Telephone Company to the
Rural Utilities Service (the "RUS") and the Rural Telephone Bank (the
"RTB") outstanding on the date hereof or incurred pursuant to any RUS loan
commitment in effect on the date hereof.
(2) Liens. Create, incur, assume, or allow to exist any
mortgage, deed of trust, deed to secure debt, pledge, lien (including the
lien of an attachment, judgment, or execution), security interest, or
other encumbrance of any kind upon any of its property, real or personal.
The foregoing restrictions shall not apply to (i) liens in favor of
CoBank; (ii) liens for taxes, assessments, or governmental charges that
are not past due, unless the same are being contested in good faith and by
appropriate proceedings and then only if and to the extent reserves
required by GAAP have been set aside therefor; (iii) liens, pledges, and
deposits under workers' compensation, unemployment insurance, and social
security laws; (iv) liens, deposits, and pledges to secure the performance
of bids, tenders, contracts (other than contracts for the payment of
money), and like obligations arising in the ordinary course of its
business as conducted on the date hereof; (v) liens imposed by law in
favor of mechanics, materialmen, warehousemen, lessors and like persons
that secure obligations that are not past due, unless the same are being
contested in good faith and by appropriate proceedings and then only if
and to the extent reserves required by GAAP have been set aside therefor;
(vi) liens constituting encumbrances in the nature of zoning restrictions,
easements and rights or restrictions of record on the use of real property
of a Pledged Subsidiary that, in the sole judgment of CoBank, do not
materially detract from the value of such real property or impair the use
thereof in the business of such Pledged Subsidiary; (vii) purchase money
security interests and equipment leases securing Purchase Money
Indebtedness permitted under Subsection 8(B)(1)(ii), provided that such
security interests and leases do not encumber any property other than the
items purchased or leased thereby and any proceeds thereof; and (viii)
liens granted by Shenandoah Telephone Company from time to time in favor
of the RUS and the RTB granted pursuant to that certain Restated Mortgage,
Security Agreement and Financing Statement, dated as of February 1, 1991,
by and among Shenandoah Telephone Company, the United States of America,
acting through the Administrator of the RUS (as successor to the Rural
Electrification Administration) and the RTB, or any amendment or
supplement thereto, but only to the extent such liens secure indebtedness
of Shenandoah Telephone Company to the RUS and the RTB outstanding on the
date hereof or incurred pursuant to any RUS loan commitment in effect on
the date hereof.
(3) Fundamental Changes. (i) Merge or consolidate with any
other entity, or acquire all or substantially all of the assets of any
person or entity, provided that
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the Borrower and the Pledged Subsidiaries may without the consent of
CoBank acquire, in the aggregate, all or substantially all of the assets
of any person or person or entity or entities in an amount up to
$20,000,000 over the term of the Loans, so long as after giving effect to
such asset acquisitions, the Borrower in each case is in compliance on a
pro forma basis with the covenants set forth in Subsections 7(J) through
7(L) hereof, (ii) form or create any subsidiary other than in compliance
with the provisions of Section 2 of the Pledge Agreement, or (iii)
commence operations under any other name, organization, or entity,
including any joint venture, or issue any additional capital stock other
than to the Borrower or any Pledged Subsidiary.
(4) Transfer of Assets. Sell, transfer, lease, enter into any
contract for the sale, transfer or lease of, or otherwise dispose of, any
of its operating assets, except in the ordinary course of its business;
provided, however, that a Pledged Subsidiary may sell, transfer, lease or
other disposition of assets which in the aggregate for the Borrower and
its subsidiaries do not exceed $5,000,000 in any fiscal year or exceed
$25,000,000 over the term of the Loans so long as no Potential Default or
Event of Default exists before such disposition and no violation of
Subsections 7(J) though 7(L) hereof will result after giving affect to
such disposition.
(5) Loans and Investments. After the date hereof, make any
Investment in any person or entity other than the Borrower or any other
Pledged Subsidiary, other than
(a) commercial paper maturing not in excess of one year
from the date of acquisition and rated "P1" by Moody's Investors
Service, Inc., or "A1" by Standard & Poor's Corporation on the date
of acquisition;
(b) certificates of deposit in North American commercial
banks rated "C" or better by Keefe, Bruyette & Woods, Inc., or "3"
or better by Cates Consulting Analysts, maturing not in excess of
one year from the date of acquisition;
(c) securities or deposits issued, guaranteed, or fully
insured as to payment by the United States government or any agency
thereof, and Class C Stock or other securities of CoBank;
(d) repurchase agreements of any bank or trust company
incorporated under the laws of the United States of America or any
state thereof and fully secured by a pledge of obligations issued or
fully and unconditionally guaranteed by the United States
government;
(e) money market funds maintained by nationally
recognized investment firms or financial institutions, which funds
are from time to time invested only in securities of the type
described in Subsections (a) through (d) above, and other securities
having a rating of "A" or better by a nationally recognized rating
agency; provided that the aggregate amount invested in such
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money market funds shall not at any time exceed $3,000,000 for any
one such fund and $5,000,000 for any one such investment firm or
financial institution; and
(f) Other Investments, provided that:
(i) the aggregate amount (calculated as the lower
of cost or market value) of all Other Investments made
by the Borrower and the Subsidiaries shall not in any
event exceed 15% of the Borrower's total assets
calculated on a Consolidated Basis, and
(ii) the Borrower will provide CoBank with a
schedule of all Other Investments (including valuations)
at the end of each fiscal quarter and more frequently
upon CoBank's request.
(6) Change in Business. Engage in any business activity or
operation different from or unrelated to its current business activities
or operations.
(7) Salaries; Wages; Compensation. Pay any wages, salaries or
other compensation to any officer, director, stockholder, or partner (or
relative of any thereof) of the Borrower or any of the Subsidiaries unless
such compensation shall be (i) reasonable and comparable with compensation
paid by companies of like nature, similarly situated, and (ii) payment for
services actually rendered.
SECTION 9. Events of Default. Each of the following shall constitute an
"Event of Default" under this Agreement:
(A) Payment Default. The failure by the Borrower to make any payment
or investment required to be made hereunder, under the Note, or under any other
Loan Document to which it is a party when due (other than any such required
investment the payment of which is entirely within the control of CoBank).
(B) Representations and Warranties. Any representation or warranty
made by the Borrower herein or in any other Loan Document, or any factual
statement made in any certificate delivered in connection with the Loan, shall
prove to have been false or misleading in any material respect on or as of the
date made and the Borrower fails to commence and diligently pursue action to
remedy such inaccuracy within 10 days after written notice thereof shall have
been delivered by CoBank to the Borrower or such inaccuracy is not remedied
within 60 days after receipt by the Borrower of such notice or CoBank shall
determine that the Borrower intentionally made such false or misleading
representation, warranty or factual statement with knowledge of its false or
misleading nature.
(C) Covenants and Agreements. The failure by the Borrower or any
Pledged Subsidiary to perform or comply with any other covenant or agreement
contained herein (other than covenants in Subsections 7(A), 7(I)(3) through
7(I)(7) and 7(I)(9) hereof) or any other Loan Document, and the Borrower fails
to commence and diligently pursue action to remedy such default within 10 days
after written notice thereof shall have been delivered by CoBank to the
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MLA No. ML0743
Borrower or such default is not remedied within 60 days after receipt by the
Borrower of such notice.
(D) Other Covenants. The failure by the Borrower to perform or
comply with any covenant excluded under Subsection (C).
(E) Cross-Default. The occurrence, after giving effect to any
applicable notice and grace period, of any breach, default, or event of default
under any agreement (other than the Loan Documents) between either the Borrower
or any Pledged Subsidiary and CoBank, including, without limitation, any
guaranty, loan agreement, security agreement, mortgage, deed to secure debt, or
deed of trust.
(F) Other Indebtedness. The occurrence of any breach, default, event
of default, or event which with the giving of notice or lapse of time, or both,
could become a default or event of default under any agreement, indenture,
mortgage, or other instrument by which the Borrower, or any of the Subsidiaries
or any of their respective property is bound or affected (other than the Loan
Documents) if the effect of such breach, default, event of default, or event is
to accelerate, or to permit the acceleration of, the maturity of any
indebtedness under such agreement, indenture, mortgage, or other instrument and
the aggregate amount of indebtedness the maturity of which has been accelerated
or is then subject to acceleration by reason of any one or more such breach,
default, event of default or other event under any such agreement, indenture,
mortgage or instrument equals or exceeds at any one time $500,000 in the
aggregate.
(G) Judgments. Any judgment, decree or order for the payment of
money shall be rendered against the Borrower or judgments, decrees, or orders
for the payment of money in an aggregate amount for the Borrower and the
Subsidiaries in excess of $500,000 at any one time shall be rendered against the
Borrower or any of the Subsidiaries and either (1) enforcement proceedings shall
have been commenced; or (2) such judgments, decrees, and orders shall continue
unsatisfied and in effect for a period of 30 consecutive days without being
vacated, discharged, satisfied, or stayed pending appeal.
(H) Insolvency, Etc. Any of the Borrower or any of the Subsidiaries
(1) shall become insolvent or shall generally not, or shall be unable to, or
shall admit in writing its inability to, pay its debts as they come due; or (2)
shall suspend its business operations or a material part thereof or make an
assignment for the benefit of creditors; (3) shall apply for, consent to, or
acquiesce in the appointment of a trustee, receiver, or other custodian for it
or any of its property or, in the absence of such application, consent, or
acquiescence, a trustee, receiver, or other custodian is so appointed; (iv)
shall commence with respect to it any proceeding under any bankruptcy,
reorganization, arrangement, readjustment of debt, dissolution, or liquidation
law or statute of any jurisdiction; or (v) shall have commenced against it any
such proceeding and such proceeding is not dismissed within 90 days of its
commencement.
(I) Security. The Pledge Agreement or the filings contemplated
thereby shall for any reason fail to create a valid and perfected first-priority
lien, security interest, or security title (subject only to such exceptions as
are therein permitted) on any of the property identified therein.
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SECTION 10. Remedies Upon Event of Default.
(A) Automatic Acceleration. Upon the occurrence of an Event of
Default under Subsection 9(H), the entire unpaid principal balance of the Loans,
all accrued interest thereon, and all other amounts payable under this
Agreement, all Supplements, all Notes, and all other agreements between CoBank
and the Borrower shall become immediately due and payable without protest,
presentment, demand, or further notice of any kind, all of which are hereby
expressly waived by the Borrower.
(B) Acceleration; Etc. Upon the occurrence of an Event of Default
other than under Subsection 9(H), upon notice to the Borrower, CoBank may
declare the entire unpaid principal balance of all Loans, all accrued interest
thereon, and all other amounts payable under this Agreement, all Supplements and
all other agreements between CoBank and the Borrower, to be immediately due and
payable. Upon such a declaration, the unpaid principal balance of all Loans and
all such other amounts shall become immediately due and payable, without
protest, presentment, demand, or further notice of any kind, all of which are
hereby expressly waived by the Borrower.
(C) Enforcement. Upon the occurrence of an Event of Default, CoBank
may proceed to protect, exercise, and enforce such rights and remedies as may be
provided by agreement or under law including, without limitation, the rights and
remedies provided for in this Agreement and any of the other Loan Documents.
Each and every one of such rights and remedies shall be cumulative and may be
exercised from time to time, and no failure on the part of CoBank to exercise,
and no delay in exercising, any right or remedy shall operate as a waiver
thereof, nor shall any single or partial exercise of any right or remedy
preclude any other or future exercise thereof, or the exercise of any other
right. In addition, CoBank may hold and/or set off and apply against the
Borrower's indebtedness any and all cash, accounts, securities, or other
property in CoBank's possession or under its control.
(D) Application of Payments. After acceleration of the Loans, all
amounts received by CoBank shall be applied to the amounts owing hereunder, the
Supplements, under the Notes, and the other Loan Documents in whatever order and
manner as CoBank shall elect.
(E) Regulatory Approvals. Upon any action by CoBank to commence the
exercise of remedies hereunder or under the Pledge Agreement, the Borrower
hereby undertakes and agrees to cooperate and join with CoBank in any
application to the PUC, the FCC, the SEC or any other regulatory body,
administrative agency, court or other forum (any such entity, a "Governmental
Authority") with respect thereto and to provide such assistance in connection
therewith as CoBank may request, including, without limitation, the preparation
of filings and appearances of officers and employees of the Borrower before such
Governmental Authority, in each case in support of any such application made by
CoBank, and the Borrower shall not, directly or indirectly, oppose any such
action by CoBank before any such Governmental Authority.
(F) Default Rate. If prior to maturity the Borrower fails to make
any payment or investment required to be made under the terms of any Note or
Supplement (except to extent the making of such required investment is entirely
within the control of CoBank) or
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Master Loan Agreement/Shenandoah Telecommunications Company
MLA No. ML0743
following the occurrence of an Event of Default then, at CoBank's option in each
instance, such payment or investment shall accrue interest at 2% per annum in
excess of the interest rate otherwise applicable to such Loan until such amount,
including interest accrued thereon in accordance with the terms hereof, is paid
in full. After maturity, whether by reason of acceleration or otherwise, the
unpaid principal balance of the Loan shall automatically accrue interest at 2%
per annum in excess of the interest rate otherwise applicable to such Loan. All
interest provided for in this Subsection 10 (F) shall be payable on demand and
shall be calculated from and including the date such payment or investment was
due to but excluding the date paid on the basis of a year consisting of 360
days.
SECTION 11. Complete Agreement, Amendments. The Loan Documents are
intended by the parties to be a complete and final expression of their
agreement. No amendment, modification, or waiver of any provision of this
Agreement or the other Loan Documents, and no consent to any departure by the
Borrower herefrom or therefrom, shall be effective unless approved by CoBank and
contained in a writing signed by or on behalf of CoBank, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given. In the event this Agreement is amended or restated,
each such amendment or restatement shall be applicable to all Supplements
hereto. Each Supplement shall be deemed to incorporate all of the terms and
conditions of this Agreement as if fully set forth therein. Without limiting the
foregoing, any capitalized term utilized in any Supplement (or in any amendment
to this Agreement or Supplement) and not otherwise defined in the Supplement (or
amendment) shall have the meaning set forth herein.
SECTION 12. Other Types of Credit. From time to time, CoBank may issue
letters of credit or extend other types of credit to or for the account of the
Borrower. In the event the parties desire to do so under the terms of this
Agreement, such extensions of credit may be set forth in any Supplement and this
Agreement shall be applicable thereto.
SECTION 13. Applicable Law. Except to the extent governed by applicable
federal law, this Agreement and each Supplement shall be governed by and
construed in accordance with the laws of the Commonwealth of Virginia, without
reference to choice of law doctrine.
SECTION 14. Notices. All notices hereunder or under any Supplement shall
be in writing and shall be deemed to be duly given upon delivery if personally
delivered or sent by telegram or facsimile transmission, or 3 days after mailing
if sent by express, certified or registered mail, to the parties at the
following addresses (or such other address for a party as shall be specified by
like notice):
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Master Loan Agreement/Shenandoah Telecommunications Company
MLA No. ML0743
If to CoBank, as follows:
If to the Borrower, as follows:
CoBank, ACB
900 Circle 75 Parkway Shenandoah Telecommunications Company
Suite 1400 124 South Main Street
Atlanta, Georgia 30339 P.O. Box 459
Attn: Communications and Energy Edinburg, Virginia 22824
Banking Group Attn: Vice President - Finance
Fax No.: (770) 618-3202 Fax No.: (540) 984-8192
SECTION 15. Costs, Expenses and Taxes. To the extent allowed by law, the
Borrower agrees to reimburse all reasonable out-of-pocket costs and expenses
(including the fees and expenses of counsel retained by CoBank) incurred by
CoBank in connection with the origination, negotiation, documentation,
administration, collection, and enforcement of this Agreement and the other Loan
Documents, including, without limitation, all costs and expenses incurred in
perfecting, maintaining, determining the priority of, and releasing any security
for the Borrower's obligations to CoBank, and any stamp, intangible, transfer,
or like tax payable in connection with this Agreement or any other Loan Document
or the recording hereof or thereof.
SECTION 16. Effectiveness and Severability. This Agreement shall continue
in effect until all indebtedness and obligations of the Borrower under this
Agreement, all Supplements, all Notes and all other Loan Documents shall have
been fully and finally paid or satisfied and CoBank has no commitment to extend
credit to or for the account of the Borrower under any Supplement. Any provision
of this Agreement or any other Loan Document which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof or thereof.
SECTION 17. Obligations Absolute. The obligation of the Borrower to make
all payments required to be made under this Agreement shall be absolute and
unconditional and shall be independent of any action by the PUC or the FCC with
respect to rates and/or disallowance of debt.
SECTION 18. Successors and Assigns. This Agreement, each Supplement, and
the other Loan Documents shall be binding upon and inure to the benefit of the
Borrower and CoBank and their respective successors and assigns, except that the
Borrower may not assign or transfer its rights or obligations under this
Agreement, any Supplement or any other Loan Document without the prior written
consent of CoBank. Without the consent of, but with confirmed notice to, the
Borrower, CoBank may (a) sell participations to one or more banks or other
entities in all or a portion of its rights and obligations under this Agreement,
or (b) assign to one or more banks or other entities all or a portion of its
rights and obligations under this Agreement.
SECTION 19. Counterparts. This Agreement, each Supplement and any other
Loan Document may be executed in any number of counterparts and by the different
parties hereto in separate counterparts, each of which when executed shall be
deemed to be an original and shall
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MLA No. ML0743
be binding upon all parties and their respective permitted successors and
assigns, and all of which taken together shall constitute one and the same
agreement.
[Signatures follow on next page.]
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Master Loan Agreement/Shenandoah Telecommunications Company
MLA No. ML0743
IN WITNESS WHEREOF, the Borrower has caused this Agreement to be executed
and attested under seal and delivered, and CoBank has caused this Agreement to
be executed and delivered, each by their respective duly authorized officers as
of the date first shown above.
SHENANDOAH TELECOMMUNICATIONS COMPANY
By:________________________________,
Name:____________________________
Title:___________________________
Attest:________________________________
Name:___________________________
Title:__________________________
[CORPORATE SEAL]
[Signatures continue on next page.]
[Signature Page to Amended and Restated Master Loan Agreement]
Master Loan Agreement/Shenandoah Telecommunications Company
MLA No. ML0743
[Signatures continue from previous page.]
COBANK, ACB
By:_________________________________
John P. Cole, Vice President
[Signature Page to Amended and Restated Master Loan Agreement]
Master Loan Agreement/Shenandoah Telecommunications Company
MLA No. ML0743
EXHIBIT A
COMPLIANCE CERTIFICATE - MLA NO. ML0743
THIS COMPLIANCE CERTIFICATE is given by [Name], [President or
chief financial officer] of Shenandoah Telecommunications Company (the
"Borrower"), pursuant to Subsection 7(I)(8) of that certain Second Amended and
Restated Master Loan Agreement, dated as of November 30, 2004 (the "MLA"), by
and between the Borrower and CoBank, ACB.
Capitalized terms used herein and not otherwise defined herein shall have
the meanings ascribed to them in the MLA.
I hereby certify as follows:
1. I am the [President or chief financial officer] of the Borrower and as
such possess the knowledge and authority to certify to the matters set
forth in this Compliance Certificate;
2. Attached hereto as Annex A are the [audited/unaudited] [annual/quarterly]
financial statements of the Borrower for the fiscal [year/quarter] ended
______________, as required by Subsection [7(I)(1)/(2)] of the MLA. The
attached consolidated financial statements present fairly in all material
respects to the financial condition of the Borrower, during the periods
covered thereby and as of the dates thereof, and were prepared on a
Consolidated Basis, and all attached financial statements were prepared in
accordance with GAAP consistently applied and any system of accounts to
which the Borrower is subject (except, in the case of unaudited financial
statements, for the omission of footnotes, other schedules and the effect
of normal year-end audit adjustments);
3. As of the date of such financial statements, the Borrower is in compliance
with the covenants set forth in Subsections 7(J) through (L) of the MLA.
Attached hereto as Annex B are calculations which demonstrate the
compliance by the Borrower with such covenants;
4. I have reviewed the Loan Documents and the activities of the Borrower and
the Subsidiaries during the fiscal [year/quarter] ended ________________
in a manner reasonably designed to determine whether there exists a
Potential Default or Event of Default under the MLA. As of the date of
this Compliance Certificate, to the best of my knowledge on the basis of
such review, there exists no condition, event or act which would
constitute a Potential Default or Event of Default under the MLA, except
as disclosed on Annex C hereto.
Master Loan Agreement/Shenandoah Telecommunications Company
MLA No. ML0743
IN WITNESS WHEREOF, I have executed this Compliance Certificate as of
_____________, _____.
____________________________________
[Name], [Title] of Shenandoah
Telecommunications Company
Master Loan Agreement/Shenandoah Telecommunications Company
MLA No. ML0743
Schedule 6(N)
SUBSIDIARIES
Number of Percentage of Total
Shares or Other Interests Outstanding Shares or Other
Entity Owned by the Borrower Interests Owned by the Borrower
------ --------------------- -------------------------------
NTC Communications, LLC ___ 100%
Shenandoah Cable Television Company 3,610 100%
ShenTel Service Company 4,800 100%
Shenandoah Personal
Communications Company 18 100%
Shenandoah Valley Leasing Company 1,500 100%
Shenandoah Mobile Company 5,000 100%
Shenandoah Long Distance Company 50 100%
ShenTel Communications Company 1 100%
Shenandoah Network Company 712 100%
Shenandoah Telephone Company 5,000 100%
Shentel Management Company 1 100%
Shentel Converged Services, Inc. 1 100%