UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
December 31, 2012
Date of report (Date of earliest event reported)
NEW ULM TELECOM, INC.
(Exact name of registrant as specified in its charter)
Minnesota | 0-3024 | 41-0440990 |
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
27 North Minnesota Street
New Ulm, MN 56073
(Address of principal executive offices, including zip code)
507-354-4111
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2):
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01 Entry into a Material Definitive Agreement
In connection with the closing of the Hector Spin-Off, the Company entered in the Agreement dated as of December 31, 2012 regarding Amendments to Stock Pledge Agreement and Security Agreements, as described below.
Item 2.01 Completion of Acquisition or Disposition of Assets
Completion of Hector Communications Corporation Spin-off and New Ulm Telecom, Inc. Acquisition of Sleepy Eye Telephone Company
As previously disclosed¸ New Ulm Telecom, Inc. (the “Company” or “New Ulm”), Arvig Enterprises, Inc. and Blue Earth Valley Communications, Inc. are equal one-third owners in Hector Communications Corporation (“Hector”), a diversified telecommunications company. On November 15, 2012 Hector and its three owners/shareholders entered into a spin-off agreement under which Hector agreed to distribute its independent local exchange company subsidiaries to its three owners/shareholders (“Spin–Off”). Hector and its shareholders determined that by spinning-off these local exchange telephone companies to its constituent shareholders, these individual shareholders would be able to take advantage of their geographical proximity to these local exchange telephone companies to (i) continue to provide continued and uninterrupted service to customers of these local exchange telephone companies; (ii) more fully integrate these local exchange telephone companies into their current operations and existing operating businesses and (iii) allow more efficient branding and delivery of services to these customers.
The Spin-off was completed on December 31, 2012.
Under the Spin-Off, New Ulm received all of the stock of Sleepy Eye Telephone Company (“SETC”). SETC currently serves customers in southern Minnesota. New Ulm anticipates that Hector will wind down its existing operations and distribute its other operating and non-operating assets to its three owners.
In connection with the Company’s acquisition of SETC and the Spin-off, the Company entered into the following agreements with CoBank, ACB (“CoBank”) on December 19, 2012 and December 31, 2012:
1. | Third Supplement dated December 19, 2012 to Master Loan Agreement dated January 4, 2008 as amended; |
2. | $4.5 million Term Promissory Note; |
3. | Agreement dated as of December 19, 2012 to the Loan Documents between New Ulm Telecom, Inc. and its subsidiaries and CoBank; and |
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4. | Agreement dated as of December 31, 2012 regarding Amendments to Stock Pledge Agreement and Security Agreements between New Ulm Telecom, Inc. and its subsidiaries and CoBank. |
In connection with the completion of the Spin-Off and the Company’s acquisition of SETC, the Company and CoBank completed the funding of the $4.5 million loan on December 31, 2012. In connection with the funding, the Company’s newly acquired subsidiary SETC entered into a guarantee, mortgage and security agreements with CoBank similar to those entered in by the Company’s other subsidiaries and the Company pledged the stock of SETC to secure its indebtedness to CoBank.
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Item 9.01 – Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired
The Company will file the financial statements of Sleepy Eye Telephone Company as an amendment to this Form 8-K within 71 calendar days after the due date of this report on Form 8-K, or alternatively, will include the financial statements in its Form 10-K for the year ended December 31, 2012, if filed by that due date.
(b) Pro Forma Financial Information
The Company will file any required pro forma financial information in an amendment to this Form 8-K within 71 calendar days after the due date of this report on Form 8-K, or alternatively, will include the pro forma financial information in its Form 10-K for the year ended December 31, 2012 if filed by that due date.
(d) Exhibits
The following exhibits are filled with this Form 8-K:
Exhibit No. | Description |
10.1 | Third Supplement dated December 19, 2012 To The Master Loan Agreement dated January 4, 2008 between New Ulm Telecom, Inc. and CoBank, ACB. |
10.2 | New Ulm Telecom, Inc. Term Promissory Note dated December 19, 2012. |
10.3 | Agreement dated as of December 19, 2012 regarding Amendments to the Loan Documents between New Ulm Telecom, Inc. and its subsidiaries and CoBank, ACB. |
10.4 | Agreement dated as of December 31, 2012 regarding Amendments to the Stock Pledge Agreement and Security Agreements between New Ulm Telecom, Inc. and its subsidiaries and CoBank, ACB. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: January 7, 2013 | New Ulm Telecom, Inc. | |
By: | /s/Curtis O. Kawlewski | |
Curtis O. Kawlewski Its: Chief Financial Officer |
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Exhibit 10.1
EXECUTION COPY
Loan No. RX0583-T3
THIRD SUPPLEMENT
TO THE MASTER LOAN AGREEMENT
This THIRD SUPPLEMENT TO THE MASTER LOAN AGREEMENT (as the same may be amended, modified, supplemented, extended or restated from time to time, this “Third Supplement”), is entered into as of December 19, 2012, between COBANK, ACB (“CoBank”) and NEW ULM TELECOM, INC. (the “Borrower”), and supplements that certain Master Loan Agreement, dated as of January 4, 2008, between CoBank and the Borrower (as amended by that certain letter agreement, dated March 27, 2009, by that certain letter agreement, dated September 14, 2009, by that certain letter agreement, dated March 25, 2011, by that certain letter agreement, dated May 2, 2012, and as the same may further be amended, modified, supplemented, extended or restated from time to time, the “MLA”). Capitalized terms used and not otherwise defined in this Third Supplement shall have the meanings assigned to them in the MLA.
SECTION 1. The Term Loan. On the terms and conditions set forth in the MLA and this Third Supplement, CoBank agrees to make a loan to the Borrower (the “Loan”), by means of a single advance during the Availability Period (as hereinafter defined in Section 3 of this Third Supplement), in an aggregate principal amount not to exceed $4,500,000 (the “Commitment”). Under the Loan, amounts borrowed and later repaid or prepaid may not be re-borrowed. The Commitment shall expire on the earlier to occur of (A) the advance to the Borrower of the Loan, and (B) at 12:00 noon Mountain time on the last day of the Availability Period, or such later date as CoBank in its sole discretion shall provide in writing. Amounts advanced to the Borrower under this Third Supplement that are later repaid or prepaid may not be re-borrowed.
SECTION 2. Purpose. The proceeds of the Loan shall be used by the Borrower (A) to finance the acquisition by the Borrower of all of the outstanding equity interests of Sleepy Eye Telephone Company (“Sleepy Eye”), (B) to repay all Indebtedness of Hector Communications Corporation allocated to Sleepy Eye, (C) to finance the acquisition of certain cellular telephone towers from Arvig Enterprises, Inc., (D) to pay taxes attributable to the transactions contemplated by that certain Spin-Off Agreement, dated November 15, 2012 (the “Spin-Off Agreement”), and (E) to pay fees and expenses associated with the Loan. The Borrower agrees that the proceeds of the Loan shall be used only for the purposes set forth in this Section 2.
SECTION 3. Availability. Subject to Sections 2 and 6 of the MLA and Section 8 of this Third Supplement, during the period commencing on the date of this Third Supplement (the “Closing Date”) and ending on December 31, 2012 (the “Availability Period”), the Loan will be advanced in a single advance on the date on which all conditions precedent to the Loan are satisfied.
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SECTION 4. Interest.
(A) Rate Options; Etc. The unpaid principal balance of the Loan shall accrue, and the Borrower agrees to pay interest at the rate or rates determined or selected by the Borrower in accordance with this Subsection 4(A).
(1) | 7-Day LIBOR Index Rate (Variable Rate Option). As to any portion of the unpaid principal balance of the Loan selected by the Borrower (any such portion, and any portion selected pursuant to Subsection 4(A)(2) or 4(A)(3) of this Third Supplement, is hereinafter referred to as a “Portion” of the Loan), interest shall accrue pursuant to this variable rate option at a rate (rounded upward to the nearest 1/100th and adjusted for reserves required on Eurocurrency Liabilities (as hereinafter defined in this Subsection 4(A)(1)) for banks subject to FRB Regulation D (as hereinafter defined in this Subsection 4(A)(1)) or required by any other federal law or regulation) per annum (the “Variable Rate”) equal at all times to the annual rate quoted by the British Bankers Association (the “BBA”) at 11:00 a.m. London time for the offering of seven-day U.S. dollar deposits, as published by Bloomberg or another major information vendor listed on BBA’s official website on the first U.S. Banking Day (as hereinafter defined in this Subsection 4(A)(1)) in each week with such rate to change weekly on such day plus a margin (the “LIBOR Margin”) equal to the percentage determined from time to time in accordance with Subsection 4(B) of this Third Supplement. The rate shall be reset automatically, without the necessity of notice being provided to the Borrower or any other party, on the first U.S. Banking Day of each succeeding week, and each change in the rate shall be applicable to all balances subject to this option. Information about the then-current rate shall be made available upon telephonic request. “U.S. Banking Day” means a day on which CoBank is open for business and banks are open for business in New York, New York. “Eurocurrency Liabilities” has the meaning as set forth in FRB Regulation D. “FRB Regulation D” means Regulation D as promulgated by the Board of Governors of the Federal Reserve System, 12 CFR Part 204, as amended from time to time. |
(2) | LIBOR Option. As to any Portion or Portions of the Loan selected by the Borrower, interest will accrue pursuant to this LIBOR option at a fixed rate per annum equal to LIBOR (as hereinafter defined in this Subsection 4(A)(2)) plus the LIBOR Margin. Under this option: (i) rates may be fixed for Interest Periods (as hereinafter defined in this Subsection 4(A)(2)) of one, two, three, six, nine or 12 months, as selected by the Borrower; (ii) amounts fixed shall be in increments of $100,000 or multiples thereof; and (iii) rates may only be fixed on a Banking Day (as hereinafter defined in this Subsection 4(A)(2)) on three Banking Days’ prior written notice. “LIBOR” means the rate (rounded upward to the nearest sixteenth and adjusted for reserves required on Eurocurrency Liabilities for banks subject to FRB Regulation D or required by any other federal law or regulation) quoted by BBA at 11:00 a.m. London time two Banking Days before the commencement of the Interest Period for the offering of U.S. dollar deposits in the London interbank market for the Interest Period designated by Borrower, as published by Bloomberg or another major information vendor listed on BBA’s official website. “Banking Day” shall mean a day on which CoBank is open for business, dealings in U.S. dollar deposits are being carried out in the London interbank market, and banks are open for business in New York City and London, England. “Interest Period” shall mean the time period chosen by the Borrower during which the chosen fixed rate is to apply to a Portion of the Loan, which period commences on the day a rate fixed under Subsection 4(A)(2) or 4(A)(3) of this Third Supplement becomes effective. The Interest Period for Portions accruing interest at the LIBOR option shall end on the day in the next calendar month or in the month that is two, three, six, nine or 12 months thereafter which corresponds numerically with the day the Interest Period commences; provided, however, that: (a) in the event such ending day is not a Banking Day, such period shall be extended to the next Banking Day unless such next Banking Day falls in the next calendar month, in which case it shall end on the preceding Banking Day; and (b) if there is no numerically corresponding day in the month, then such period shall end on the last Banking Day in the relevant month. No Interest Period shall extend beyond the Maturity Date (as defined in Section 6 of this Third Supplement). |
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Upon the occurrence and during the continuance of any Event of Default, as the Interest Periods for Portions of the Loan accruing interest at a LIBOR option expire, at CoBank’s option, such Portions of the Loan shall be converted to the Variable Rate option, and the LIBOR option will not be available to the Borrower until any such Events of Default have been waived.
(3) | Quoted Fixed Rate Option. As to any Portion or Portions of the Loan selected by the Borrower, interest shall accrue pursuant to this quoted rate option at a fixed annual interest rate (the “Quoted Rate”) to be quoted by CoBank in its sole and absolute discretion in each instance. Under this option, the interest rate on such Portion or Portions of the Loan may be fixed for such Interest Periods as may be agreeable to CoBank in its sole and absolute discretion in each instance; provided, however, that (i) such Interest Period shall not extend beyond the Maturity Date and such Interest Period may only expire on a Business Day, (ii) the minimum fixed period shall be one year, and (iii) amounts fixed shall be in increments of $100,000 or multiples thereof. |
Upon the occurrence and during the continuance of any Event of Default, as the Interest Periods for Portions of the Loan accruing interest at the Quoted Rate option expire, such Portions of the Loan shall be converted to the Variable Rate option, and the Quoted Rate option will not be available to the Borrower until any such Events of Default have been waived.
(4) | Rate Combinations. Notwithstanding the foregoing, at any one time there may be no more than an aggregate of five Portions of the Loan and any loan under any other Supplement to the MLA accruing interest pursuant to the LIBOR option and no more than an aggregate of five Portions of the Loan and any loan under any other Supplement to the MLA accruing interest pursuant to the Quoted Rate option. |
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(5) | Selection and Changes of Rates. The Borrower shall select the rate option or options applicable to the Loan at the time it requests the Loan. Thereafter, with respect to Portions of the Loan accruing interest at the Variable Rate, the Borrower may, on any Business Day, subject to Subsections 4(A)(2), 4(A)(3) and 4(A)(4) of this Third Supplement, elect to have one of the fixed rate options apply to such Portion. In addition, with respect to any Portion of the Loan accruing interest pursuant to a fixed rate option, the Borrower may, subject to Subsections 4(A)(2), 4(A)(3) and 4(A)(4), on the last day of the Interest Period for such Portion, elect to fix the interest rate accruing on such Portion for another Interest Period pursuant to one of the fixed rate options. From time to time the Borrower may elect, on a Business Day prior to the expiration of the Interest Period for any Portion of the Loan accruing interest pursuant to a fixed rate option, and upon payment of the applicable Surcharge (as defined in, and calculated pursuant to, Section 5 hereof) to convert all, but not part, of such Portion of the Loan so that it accrues interest at the Variable Rate or a combination of the Variable Rate and a fixed rate option, for a new Interest Period or Interest Periods selected in accordance with Subsections 4(A)(2), 4(A)(3) and 4(A)(4) of this Third Supplement. Except for the initial selection, all interest rate selections provided for herein shall be made by telephonic or written request of an authorized employee of the Borrower by 12:00 noon, Central time, on the relevant day. 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 the Loan or select interest rates hereunder so long as any funds advanced are wired to an account previously designated by the Borrower. Notwithstanding the foregoing, rates may not be fixed in such a manner as to cause the Borrower to have to break any fixed rate balance in order to pay any installment of principal. |
(6) | Accrual of Interest. Interest shall accrue pursuant to the fixed rate options from and including the first day of the applicable Interest Period to but excluding the last day of the Interest Period. If the Borrower elects to re-fix the interest rate on any Portion of the Loan accruing interest pursuant to one of the fixed rate options pursuant to Subsection 4(A)(5) of this Third Supplement, the first day of the new Interest Period shall be the last day of the preceding Interest Period. In the absence of any such election, interest shall accrue on such Portion at the Variable Rate from and including the last day of such Interest Period. If the Borrower elects to convert from a fixed rate option to the Variable Rate option pursuant to Subsection 4(A)(5) upon payment of the applicable Surcharge as provided in Section 5, interest at the applicable fixed rate shall accrue through the day before such conversion and either (i) the first day of any new Interest Period shall be the date of such conversion, or (ii) interest at the Variable Rate shall accrue on the Portion of the Loan so converted from and including the date of conversion. |
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(B) Margins. Initially, and continuing through the day immediately preceding the first Adjustment Date (as hereinafter defined in this Subsection 4(B)) occurring on or after March 31, 2013 on which the Borrower demonstrates that a change in the LIBOR Margin is warranted and requests such change, the applicable LIBOR Margin shall be 3.00%. Commencing on such Adjustment Date, the LIBOR Margin shall be determined based on the consolidated Total Leverage Ratio of the Borrower, determined in accordance with Subsection 8(I)(1) of the MLA, on the last day of each fiscal quarter of the Borrower, as set forth in the following table:
Consolidated Total Leverage Ratio | LIBOR Margin |
Greater than or equal to 3.50:1.00 | 3.50% |
Less than 3.50:1.00 and greater than | |
or equal to 3.00:1.00 | 3.25% |
Less than 3.00:1.00 and greater than | |
or equal to 2.50:1.00 | 3.00% |
Less than 2.50:1.00 and greater than | |
or equal to 2.00:1.00 | 2.75% |
Less than 2.00:1.00 | 2.50% |
The LIBOR Margin shall be (i) increased, if warranted, beginning on the date which is the fifth Business Day following CoBank’s receipt of the financial statements required pursuant to Subsections 8(H)(1) and 8(H)(2) of the MLA, and the compliance certificate required pursuant to Subsection 8(H)(9) of the MLA and (ii) decreased, if warranted, beginning on the date which is the fifth Business Day following CoBank’s receipt of such financial statements and compliance certificate and the Borrower’s written request to decrease such margin (each such date described in (i) and (ii), an “Adjustment Date”). In the event that CoBank shall not receive when due such financial statements and compliance certificate, then from such due date and until the fifth Business Day following CoBank’s receipt of such overdue financial statements and compliance certificate (and in the event a decrease in the applicable margin is then warranted, receipt of the Borrower’s written request to decrease such margin), or upon the occurrence of any Event of Default, then at the option of CoBank the LIBOR Margin shall be 3.50%.
(C) Payment and Calculation. The Borrower shall pay interest on the Loan monthly in arrears on the 20th day (or such other day as CoBank shall elect in writing) of each month, upon any prepayment of a fixed rate Portion (whether due to acceleration or otherwise) and on the Maturity Date; provided, however, at the election of CoBank with respect to the Portions accruing interest under the LIBOR option, rather than on a monthly basis interest shall be payable at the maturity of an Interest Period, or, if such Interest Period exceeds three months, in arrears on each three-month anniversary of the beginning date of such Interest Period and at the maturity of such Portion and upon any prepayment (whether due to acceleration or otherwise). Interest shall be calculated on the actual number of days the Loan, or any part thereof, is outstanding on the basis of a year consisting of 360 days. In calculating accrued interest, the date the Loan is made shall be included and the date any principal amount of the Loan is repaid or prepaid shall be excluded as to such amount. If any date for the payment of interest is not a Business Day, then the interest payment then due shall be paid on the next Business Day.
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SECTION 5. Repayment, Prepayment and Surcharge. The Borrower may, (i) on any Business Day, prepay in full or in part any Portion of the Loan accruing interest at the Variable Rate option, and (ii) on three Business Days’ prior, irrevocable written notice, prepay in full or in part any Portion of the Loan accruing interest pursuant to a fixed rate option. All voluntary prepayments pursuant to this Section 5 shall be applied to scheduled principal installments under Subsection 6(A) of this Third Supplement in the inverse order of their maturities and to such Portions of the Loan as the Borrower specifies in writing, or in the absence of such direction, as CoBank specifies. Notwithstanding the foregoing, the Borrower’s right to prepay any amount accruing interest pursuant to a fixed rate option shall be conditioned upon the payment of a prepayment Surcharge as defined and calculated below. For purposes of calculating the Surcharge provided for in this Section 5, early conversion of a Portion of the Loan accruing interest pursuant to a fixed rate option so that it accrues interest at a different rate pursuant to Subsection 4(A)(5) shall be deemed a prepayment in full of that Portion of the Loan. Upon any such early conversion, any repayment required hereunder or under the MLA, any prepayment of any Portion of the Loan accruing interest pursuant to a fixed rate option, and as a condition to any voluntary prepayment (whether such conversion, repayment, prepayment or payment is made voluntarily, as a result of an acceleration, or otherwise), the Borrower shall pay to CoBank, on the date of such repayment, prepayment, payment or early conversion, a surcharge (“Surcharge”) in an amount equal to the greater of (i) $300 and (ii) the present value of any funding losses incurred or imputed by CoBank to have been incurred as a result of such repayment, prepayment, payment or conversion for the period such amount was scheduled to have been outstanding at such fixed rate (which, if less than $0, shall be deemed to be $0), plus, in the case of the repayment, prepayment, payment or conversion of any Portion of the Loan accruing interest pursuant to the Quoted Rate option, an amount equal to 0.5% of the amount repaid, prepaid or converted. Such Surcharge, including the amount of any funding losses incurred by CoBank, shall be determined and calculated in accordance with methodology established by CoBank.
SECTION 6. Repayment.
(A) Scheduled Repayments. Commencing on June 30, 2013, and on each September 30, December 31, March 31 and June 30 occurring thereafter (each such date a “Payment Date”), through and including December 31, 2014 (the “Maturity Date”), the outstanding principal balance of the Loan shall be repaid in consecutive quarterly equal principal payments of $225,000 on each such date. On the Maturity Date, the amount of the then unpaid principal balance of the Loan and any and all other amounts due and owing hereunder or under any other Loan Document relating to this Loan shall be due and payable. If any Payment Date is not a Business Day, then the installment then due shall be paid on the next Business Day and shall continue to accrue interest until paid.
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(B) Applications of Repayments; Related Interest and Surcharge Payments. All repayments made pursuant to this Section 6 will be applied to such Portions of the Loan as the Borrower directs in writing and, in the absence of such direction, as CoBank specifies. At the time of each repayment pursuant to this Section 6, the Borrower must pay any applicable Surcharge (as defined in and as calculated in Section 5 of this Third Supplement).
SECTION 7. Security. The Loan is guaranteed and secured by those certain guarantees, pledge agreements, security agreements, mortgages and other security documents (collectively, the “Collateral Documents”) described in Section 7 of that certain First Supplement to the Master Loan Agreement, dated as of January 4, 2008, between the Borrower and CoBank, as such Collateral Documents are amended by that certain Agreement Regarding Amendments to Loan Documents and Reaffirmation, dated as of the date hereof, between the Borrower, each of the other Loan Parties, and CoBank, and as the same have otherwise been and may further be amended, modified, supplemented, extended or restated from time to time. In addition, following the Borrower’s acquisition of Sleepy Eye, the Loan and each other Loan made by CoBank to the Borrower will be guaranteed and secured by (i) that certain Joinder to Continuing Guaranty, dated on or about December 31, 2012, by Sleepy Eye in favor of CoBank (as the same may be amended, modified, supplemented, extended or restated from time to time, the “Guaranty Joinder”), (ii) that certain Security Agreement, dated on or about December 31, 2012, between Sleepy Eye and CoBank (as the same may be amended, modified, supplemented, extended or restated from time to time, individually, the “Sleepy Eye Security Agreement”), pursuant to which Sleepy Eye will grant to CoBank a first-priority lien and security interest in substantially all of its then owned or thereafter acquired personal property, and (iii) that certain Mortgage and Security Agreement and Fixture Financing Statement, dated on or about December 31, 2012, between Sleepy Eye and CoBank (as the same may be amended, modified, supplemented, extended or restated from time to time, the “Sleepy Eye Mortgage”), pursuant to which Sleepy Eye will grant to CoBank a first-priority lien on certain of its then owned or thereafter acquired real property.
The Borrower agrees, and agrees to cause each Loan Party, to take such steps, including, without limitation, the execution and filing and recordation of security agreements, financing statements, irrevocable stock power and collateral assignments, and amendments to any of the foregoing, and such other 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 and the payment of any applicable documentary stamp or similar taxes. Furthermore, the Borrower agrees, and agrees to cause each Loan Party, to take such steps, including the execution and recordation and filing of any mortgage agreements, or any fixture filings, and amendments to the foregoing, and such other instruments and documents, as CoBank may reasonably request from time to time to enable CoBank to obtain, perfect, and maintain a lien on any real property interests of such entity as CoBank shall determine in its reasonable discretion, and the payment of any applicable mortgage recording tax, documentary stamp taxes or similar taxes.
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SECTION 8. Additional Conditions Precedent.
(A) Conditions to Effectiveness of Third Supplement. In addition to the conditions precedent set forth in the MLA, the effectiveness of this Third Supplement is subject to the satisfaction of the following conditions precedent:
(1) | Opinions. That CoBank receive, in form and content reasonably acceptable to CoBank, opinions of counsel (who shall be reasonably acceptable to CoBank) for each Loan Party; |
(2) | No Material Adverse Change. That from December 31, 2011 to the date of this Third Supplement there has not occurred any event which has had or could reasonably be expected to have a Material Adverse Effect on the business or prospects of any Loan Party; |
(3) | Representations and Warranties. That the representations and warranties of each Loan Party contained in the MLA, this Third Supplement and any other Loan Document to which they are party be true and correct in all material respects on and as of the date of this Third Supplement, as though made on and as of such date; |
(4) | Closing Certificate. That CoBank receive a certificate, in the form of Exhibit A attached hereto, dated as of the date of this Third Supplement, from the President of the Borrower as to, among other things, the continuing truth and accuracy of the representations and warranties of each Loan Party under the Loan Documents to which it is a party and the satisfaction of each of the conditions applicable to the effectiveness of this Third Supplement; and |
(5) | Other Information. That CoBank receive such other information regarding the condition, financial or otherwise, and operations of each Loan Party as CoBank shall request and such other opinions, certificates or documents as CoBank shall reasonably request. |
(B) Conditions to Advance of Loan. In addition to the conditions precedent set forth in the MLA, and subject to the effectiveness of this Third Supplement as set forth in Subsection 8(A), CoBank’s obligation to make the Loan is subject to the satisfaction of the following conditions precedent on or before the date of such advance:
(1) | Consummation of Spin-Off Transaction. That CoBank receive evidence satisfactory to it that the transactions contemplated by the Spin-Off Agreement will be fully consummated concurrently with the disbursement of the Loan on terms and conditions consistent with the Spin-Off Agreement; |
(2) | Sleepy Eye Security Documents. That Sleepy Eye execute and deliver to CoBank copies of the Guaranty Joinder, the Sleepy Eye Security Agreement and the Sleepy Eye Mortgage, each in form and substance reasonable acceptable to CoBank; |
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(3) | Opinions. That CoBank receive, in form and content reasonably acceptable to CoBank, opinions of counsel (who shall be reasonably acceptable to CoBank) for Sleepy Eye and the Borrower; |
(4) | Advance Certificate. That CoBank receive a certificate, in the form of Exhibit B attached hereto, dated as of the date of the requested advance of the Loan, from the President of the Borrower as to, among other things, the continuing truth and accuracy of the representations and warranties of each Loan Party under the Loan Documents to which it is a party and the satisfaction of each of the conditions applicable to the making of the Loan; |
(5) | No Material Adverse Change. That from December 31, 2011 to the date of the Loan there has not occurred any event which has had or could reasonably be expected to have a Material Adverse Effect on the business or prospects of any Loan Party (including Sleepy Eye); |
(6) | Representations and Warranties. That the representations and warranties of each Loan Party contained in the MLA, this Third Supplement and any other Loan Document to which they are party be true and correct in all material respects on and as of the date of the Loan, as though made on and as of such date; and |
(7) | Other Information. That CoBank receive such other information regarding the condition, financial or otherwise, and operations of each Loan Party (including Sleepy Eye) as CoBank shall request and such other opinions, certificates or documents as CoBank shall reasonably request. |
[Signatures Follow on Next Page]
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IN WITNESS WHEREOF, the Borrower has caused this Agreement to be executed and delivered, and CoBank has caused this Agreement to be executed and delivered, each by its respective duly authorized officer as of the date first shown above.
NEW ULM TELECOM, INC. | ||
By: | ||
Curtis Kawlewski Chief Financial Officer |
[Signatures Continue on Next Page]
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[Signatures Continued from Previous Page]
COBANK, ACB | ||
By: | ||
Nick Heslip Vice President |
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EXHIBIT A
CLOSING CERTIFICATE - LOAN NO. RX0583-T3
THIS CLOSING CERTIFICATE is given by [Name], [President] of New Ulm Telecom, Inc. (the “Borrower”), pursuant to Subsection 8(A)(4) of that certain Third Supplement to the Master Loan Agreement, dated as of December 19, 2012 (the “Third Supplement”), and under Section 6 of that certain Master Loan Agreement, dated as of January 4, 2008 (as the same has been and may further be amended, modified, supplemented, extended or restated from time to time, the “MLA”), each between CoBank, ACB and the Borrower. Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to them in the MLA and in the Third Supplement.
I hereby certify as follows:
1. | I am the [President] of the Borrower and as such possess the knowledge and authority to certify to the matters herein set forth, and the matters herein set forth are true and accurate to the best of my present knowledge, information and belief after due inquiry; |
2. | The representations and warranties of each of the Loan Parties contained in the MLA and the other Loan Documents are true and correct in all material respects on and as of the date hereof; |
3. | There has not occurred since December 31, 2011 through the date hereof any event which has had or could reasonably be expected to have a Material Adverse Effect on any Loan Party; |
4. | No Potential Default or Event of Default exists as of the date hereof; and |
5. | Each of the conditions specified in Section 6 of the MLA and Section 8(A) of the Third Supplement required to be satisfied on or prior to the date of the effectiveness of the Third Supplement has been fulfilled as of the date hereof. |
IN WITNESS WHEREOF, I have executed this Closing Certificate as of December __, 2012.
[Name], [President] New Ulm Telecom, Inc. |
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EXHIBIT B
ADVANCE CERTIFICATE - LOAN NO. RX0583-T3
THIS ADVANCE CERTIFICATE is given by [Name], [President] of New Ulm Telecom, Inc. (the “Borrower”), pursuant to Subsection 8(B)(4) of that certain Third Supplement to the Master Loan Agreement, dated as of December 19, 2012 (the “Third Supplement”), and under Section 6 of that certain Master Loan Agreement, dated as of January 4, 2008 (as the same has been and may further be amended, modified, supplemented, extended or restated from time to time, the “MLA”), each between CoBank, ACB and the Borrower. Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to them in the MLA and in the Third Supplement.
I hereby certify as follows:
1. | I am the [President] of the Borrower and as such possess the knowledge and authority to certify to the matters herein set forth, and the matters herein set forth are true and accurate to the best of my present knowledge, information and belief after due inquiry; |
2. | The representations and warranties of each of the Loan Parties contained in the MLA and the other Loan Documents are true and correct in all material respects on and as of the date hereof; |
3. | There has not occurred since December 31, 2011 through the date hereof any event which has had or could reasonably be expected to have a Material Adverse Effect on any Loan Party; |
4. | No Potential Default or Event of Default exists as of the date hereof; |
5. | The transactions contemplated by the Spin-Off Agreement are being fully consummated concurrently herewith on terms and conditions consistent with the Spin-Off Agreement; and |
6. | Each of the conditions specified in Section 6 of the MLA and Section 8(B) of the Third Supplement required to be satisfied on or prior to the making of the Loan has been fulfilled as of the date hereof. |
IN WITNESS WHEREOF, I have executed this Closing Certificate as of December __, 2012.
[Name], [President] New Ulm Telecom, Inc. |
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Exhibit 10.2
Loan No. RX0583-T3
PROMISSORY NOTE
NEW ULM TELECOM, INC.
$4,500,000 | Dated: December 19, 2012 |
FOR VALUE RECEIVED, the undersigned unconditionally promises to pay to COBANK, ACB (the “Payee”), or its order, at the times and in the manner set forth in that certain Master Loan Agreement, dated as of January 4, 2008, among the undersigned and Payee, as it has been and may further be amended, modified, supplemented, extended or restated from time to time, (the “MLA”), and in that certain Third Supplement to the Master Loan Agreement, dated as of the date hereof, among the undersigned and Payee, as it may be amended, modified, supplemented, extended or restated from time to time (the “Third Supplement”; and together with the MLA, collectively, the “Loan Agreement”), the principal sum of FOUR MILLION FIVE HUNDRED THOUSAND UNITED STATES DOLLARS ($4,500,000) or such lesser amount as may be advanced hereunder, together with interest on the unpaid principal balance hereof at the rate or rates set forth in the Loan Agreement.
This note is given for the loan to be made by the Payee to the undersigned pursuant to the Loan Agreement, all of the terms and provisions of which (including, without limitation, provisions regarding acceleration of the maturity hereof and application of default interest and of a surcharge to payments hereunder) are hereby incorporated by reference. Accrued interest and payments shall be posted by the Payee upon an appropriate accounting record, which record (and all computer printouts thereof) shall constitute prima facie evidence of the outstanding principal and interest on the loan. Any amount of principal hereof which is not paid when due, whether at stated maturity, by acceleration or otherwise, shall bear interest from the date when due until said principal amount is paid in full, payable on demand, at a rate per annum set forth in Section 11(D) of the MLA.
The makers or endorsers hereof hereby waive presentment for payment, demand, protest, and notice of dishonor and nonpayment of this note, and all defenses on the ground of delay or of any extension of time for the payment hereof which may be hereafter given by the holder or holders hereof to them or either of them or to anyone who has assumed the payment of this note, and it is specifically agreed that the obligations of said makers or endorsers shall not be in anywise affected or altered to the prejudice of the holder or holders hereof by reason of the assumption of payment of the same by any other person or entity.
Should this note be placed in the hands of an attorney for collection or the services of any attorney become necessary in connection with enforcing its provisions, the undersigned agrees to pay reasonable attorneys' fees, together with all costs and expenses incident thereto, to the extent allowed by law. Except to the extent governed by applicable federal law, this note shall be governed by and construed in accordance with the laws of the State of Colorado, without reference to choice of law doctrine. Whenever possible, each provision of this note shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this note shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this note. Whenever in this note reference is made to the Payee or the undersigned, such reference shall be deemed to include, as applicable, a reference to their respective successors and assigns. The provisions of this note shall be binding upon and shall inure to the benefit of such successors and assigns. The undersigned’s successors and assigns shall include, without limitation, a receiver, trustee or debtor in possession of or for the undersigned.
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IN WITNESS WHEREOF, the undersigned has caused this note to be executed and delivered by its duly authorized officer as of the date first shown above.
NEW ULM TELECOM, INC. | ||
By: | ||
Curtis Kawlewski Chief Financial Officer |
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Exhibit 10.3
EXECUTION COPY
Loan Nos. RX0583 and RX0584
AGREEMENT REGARDING AMENDMENTS TO LOAN DOCUMENTS
This AGREEMENT REGARDING AMENDMENTS TO LOAN DOCUMENTS (this “Amendment Agreement”), dated as of December 19, 2012, is between (i) NEW ULM TELECOM, INC. (the “Borrower”), (ii) Western Telephone Company (“WTC”), Peoples Telephone Company (“PTC”), New Ulm Phonery, Inc. (“Phonery”), New Ulm Cellular #9, Inc. (“Cellular”), New Ulm Long Distance, Inc. (“Long Distance”), Hutchinson Telephone Company (“Hutchinson Telephone”), Hutchinson Cellular, Inc. (“Hutchinson Cellular”), and Hutchinson Telecommunications, Inc. (“Hutchinson Telecom” and, together with WTC, PTC, Phonery, Cellular, Long Distance, Hutchinson Telephone, Hutchinson Cellular, and Hutchinson Telecom, each a “Subsidiary Guarantor” and, collectively, the “Subsidiary Guarantors”; the Subsidiary Guarantors, together with the Borrower, each a “Loan Party” and, collectively, the “Loan Parties”), and (iii) COBANK, ACB (“CoBank”).
RECITALS
WHEREAS, the Borrower and CoBank are parties to that certain Master Loan Agreement, dated as of January 4, 2008 (as amended by that certain letter agreement, dated March 27, 2009, that certain letter agreement, dated September 14, 2009, that certain letter agreement, dated March 25, 2011, that certain letter agreement, dated May 2, 2012, and as the same may further be amended, modified, supplemented, extended or restated from time to time, the “MLA”), as supplemented by that certain First Supplement to the Master Loan Agreement, dated as of January 4, 2008, providing for a term loan in the amount of $15,000,000 (as amended, modified, supplemented, extended or restated from time to time, the “First Supplement”), and as supplemented by that certain Second Supplement to the Master Loan Agreement, dated as of January 4, 2008, providing for a revolving loan in an aggregate principal amount outstanding at any one time not to exceed $10,000,000 (as amended, modified, supplemented, extended or restated from time to time, the “Second Supplement”);
WHEREAS, the Borrower and CoBank are entering into that Third Supplement to the Master Loan Agreement, dated as of even date herewith, providing for a term loan in the amount of $4,500,000 (as amended, modified, supplemented, extended or restated from time to time, the “Third Supplement”; the MLA, as supplemented by the First Supplement, the Second Supplement and the Third Supplement, collectively, the “Loan Agreement”);
WHEREAS, the Borrower has also executed and delivered to CoBank that certain Security Agreement, dated as of January 4, 2008 (as amended, modified, supplemented, extended or restated from time to time, the “Borrower Security Agreement”), pursuant to which the Borrower granted to CoBank a security interest in and lien on substantially all of its then owned or thereafter acquired tangible and intangible personal property, and that certain Stock Pledge Agreement, dated as of January 4, 2008 (as amended, modified, supplemented, extended or restated from time to time, the “Borrower Pledge Agreement”), pursuant to which the Borrower granted to CoBank a security interest in and lien on the equity interests described therein;
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WHEREAS, the Loan Parties have executed and delivered to CoBank that certain Continuing Guaranty, dated as of January 4, 2008 (as amended, modified, supplemented, extended or restated from time to time, the “Guaranty”), pursuant to which, among other things, the Subsidiary Guarantors guaranteed all then existing or thereafter arising obligations of the Borrower to CoBank under the Loan Agreement or otherwise;
WHEREAS, each Subsidiary Guarantor has executed and delivered to CoBank a separate Security Agreement, each dated as of January 4, 2008 (as amended, modified, supplemented, extended or restated from time to time, each a “Subsidiary Guarantor Security Agreement” and, collectively, the “Subsidiary Guarantor Security Agreements”), pursuant to which each Subsidiary Guarantor granted to CoBank as security for its obligations under the Guaranty a security interest in substantially all of its then owned or thereafter acquired tangible and intangible personal property;
WHEREAS, Hutchinson Telephone has executed and delivered to CoBank that certain Stock Pledge Agreement, dated as of January 4, 2008 (as amended, modified, supplemented, extended or restated from time to time, the “Hutchinson Telephone Pledge Agreement”), pursuant to which Hutchinson Telephone granted to CoBank as security for its obligations under the Guaranty a security interest in and lien on the equity interests described therein, and Hutchinson Cellular has executed and delivered to CoBank that certain Stock Pledge Agreement, dated as of January 4, 2008 (as amended, modified, supplemented, extended or restated from time to time, the “Hutchinson Cellular Pledge Agreement” and, together with the Hutchinson Telephone Pledge Agreement, collectively, the “Hutchinson Pledge Agreements”), pursuant to which Hutchinson Cellular granted to CoBank as security for its obligations under the Guaranty a security interest in and lien on the equity interests described therein;
WHEREAS, the Borrower has executed and delivered to CoBank that certain Real Estate Mortgage, Assignment of Rents and Profits, Security Agreement and Fixture Financing Statement, dated as of May 14, 2008 (as amended, modified, supplemented, extended or restated from time to time, the “Borrower Mortgage”), and recorded in the Office of County Recorder, Brown County, Minnesota on June 6, 2008, as document number 366501, the Office of the County Recorder, Nicollet County, Minnesota on June 17, 2008, as document number 279148, and in the Office of the County Recorder, Redwood Falls, Minnesota on June 18, 2008, as document number 327975;
WHEREAS, WTC has executed and delivered to CoBank that certain Real Estate Mortgage, Assignment of Rents and Profits, Security Agreement and Fixture Financing Statement, dated as of May 14, 2008 (as amended, modified, supplemented, extended or restated from time to time, the “WTC Mortgage”), and recorded in the Office of County Recorder, Brown County, Minnesota on June 6, 2008, as document number 366500, and the Office of the County Recorder, Redwood Falls, Minnesota on June 18, 2008, as document number 327976;
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WHEREAS, PTC has executed and delivered to CoBank that certain Real Estate Mortgage, Assignment of Rents and Profits, Security Agreement and Fixture Financing Statement, dated as of January 5, 2009 (as amended, modified, supplemented, extended or restated from time to time, the “PTC Mortgage”), and recorded with the Recorder, Cherokee, Iowa on January 29, 2009, at Book 2009, Page 0160;
WHEREAS, Hutchinson Telephone has executed and delivered to CoBank that certain Real Estate Mortgage, Assignment of Rents and Profits, Security Agreement and Fixture Financing Statement, dated as of May 14, 2008 (as amended, modified, supplemented, extended or restated from time to time, the “Hutchinson Telephone Mortgage”), and recorded in the Office of the County Recorder, McLeod County, Minnesota on June 6, 2008, as document number A-377660, and the Office of Registrar of Titles, McLeod County, Minnesota on June 6, 2008, as document number T-48118;
WHEREAS, Hutchinson Telecom has executed and delivered to CoBank that certain Real Estate Mortgage, Assignment of Rents and Profits, Security Agreement and Fixture Financing Statement, dated as of May 14, 2008 (as amended, modified, supplemented, extended or restated from time to time, the “Hutchinson Telecom Mortgage” and, together with the Borrower Mortgage, the WTC Mortgage, the PTC Mortgage and the Hutchinson Telephone Mortgage, each a “Mortgage” and, collectively, the “Mortgages”), and recorded in the Office of County Recorder, Meeker County, Minnesota on June 6, 2008, as document number 353708; and
WHEREAS, in connection with the Third Supplement, the Borrower, the Subsidiary Guarantors and CoBank have agreed to certain amendments to the Borrower Security Agreement, the Borrower Pledge Agreement, the Guaranty, the Subsidiary Guarantor Security Agreements, the Hutchinson Pledge Agreements and the Mortgages, as set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the agreements set forth in this Amendment Agreement, the Borrower, the Subsidiary Guarantors and CoBank each hereby agrees as follows:
SECTION 1. Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to them in the MLA.
SECTION 2. Section 2 of the Borrower Security Agreement is hereby amended by amending and restating such section to read in its entirety as follows:
SECTION 2. Obligations. The grant of the security interest hereunder shall secure the following obligations (the “Obligations”): (i) the payment and performance of all obligations of the Debtor, whether now existing or hereafter arising, under that certain Continuing Guaranty, dated as of January 4, 2008, between the Debtor, certain other guarantors from time to time party thereto, and the Secured Party, as amended by that certain Agreement Regarding Amendments to Loan Documents, dated as of December 19, 2012, and as the same may further be amended, modified, supplemented, extended or restated from time to time (the “Guaranty”); (ii) the payment and performance of all obligations of the Debtor, whether now existing or hereafter arising, under that certain Master Loan
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Agreement, dated as of January 4, 2008, between the Debtor and the Secured Party, as amended by that certain letter agreement, dated March 27, 2009, that certain letter agreement, dated September 14, 2009, that certain letter agreement, dated March 25, 2011, that certain letter agreement, dated May 2, 2012, and as the same may further be amended, modified, supplemented, extended or restated from time to time (the “New Ulm MLA”), and all other Loan Documents to which the Debtor is a party, including, without limitation, that certain First Supplement to the Master Loan Agreement, dated as of January 4, 2008, as the same may be amended, modified, supplemented, extended or restated from time to time (the “New Ulm First Supplement”), that certain Second Supplement to the Master Loan Agreement, dated as of January 4, 2008, as the same may be amended, modified, supplemented, extended or restated from time to time (the “New Ulm Second Supplement”), and that certain Third Supplement to the Master Loan Agreement, dated as of December 19, 2012, as the same may be amended, modified, supplemented, extended or restated from time to time (the “New Ulm Third Supplement” and, together with the New Ulm MLA, the New Ulm First Supplement and the New Ulm Second Supplement, the “New Ulm Loan Agreement”), and the related Notes, as the same may be amended, modified, supplemented, extended or restated from time to time; (iii) the payment and performance of all obligations of Hutchinson Telephone Company as successor by merger to Hutchinson Acquisition Corp. (“Hutchinson”; and, together with the Debtor, the “Borrowers”), whether now existing or hereafter arising, under that certain Master Loan Agreement, dated as of January 4, 2008, between Hutchinson and the Secured Party, as amended by that certain letter agreement, dated June 9, 2009, that certain letter agreement, dated September 14, 2009, by that certain letter agreement, dated March 25, 2011, and as the same may further be amended, modified, supplemented, extended or restated from time to time (the “Hutchinson MLA”), and all other Loan Documents to which Hutchinson is a party, including, without limitation, that certain First Supplement to the Master Loan Agreement, dated as of January 4, 2008, as the same may be amended, modified, supplemented, extended or restated from time to time (the “Hutchinson First Supplement”), that certain Second Supplement to the Master Loan Agreement, dated as of January 4, 2008, as the same may be amended, modified, supplemented, extended or restated from time to time (the “Hutchinson Second Supplement”), and that certain Third Supplement to the Master Loan Agreement, dated as of January 4, 2008, as the same may be amended, modified, supplemented, extended or restated from time to time (the “Hutchinson Third Supplement” and, together with the Hutchinson MLA, the Hutchinson First Supplement and the Hutchinson Second Supplement, the “Hutchinson Loan Agreement”; the Hutchinson Loan Agreement, together with the New Ulm Loan Agreement, the “Loan Agreements”), and the related Notes, as the same may be amended, modified, supplemented, extended or restated from time to time; and (iv) the payment of all other indebtedness and the performance of all other obligations of the Borrowers to the Secured Party of every type and description, whether now existing or hereafter arising, fixed or contingent, as primary obligor or as guarantor or surety, acquired directly or by assignment or otherwise,
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liquidated or unliquidated, regardless of how they arise or by what agreement or instrument they may be evidenced, including, without limitation, all loans, advances, Interest Rate Agreements provided by the Secured Party and other extensions of credit and all covenants, agreements, and provisions contained in all loan and other agreements between the parties.
SECTION 3. Subsection 8(H) of the Borrower Security Agreement is hereby amended by amending and restating such subsection to read in its entirety as follows:
(H) Continuing Effect. This Security Agreement, the security interest of the Secured Party, in the Collateral, and all other documents or instruments contemplated hereby shall continue in full force and effect until all of the Obligations have been satisfied in full and each of the Guaranty, New Ulm MLA, New Ulm First Supplement, New Ulm Second Supplement, New Ulm Third Supplement, and each other Supplement under the New Ulm MLA, Hutchinson MLA, Hutchinson First Supplement, Hutchinson Second Supplement, Hutchinson Third Supplement and each other Supplement under the Hutchinson MLA, the related Notes, and the other Loan Documents has been terminated in accordance with their respective terms and any preference period applicable to payments made on or security given for the Obligations has expired under applicable Law.
SECTION 4. The second, third and sixth WHEREAS clauses of the Borrower Pledge Agreement are hereby amended by amending and restating such clauses to read in their entirety as follows:
WHEREAS, the Secured Party and the Pledgor have entered into that certain Master Loan Agreement, dated as of January 4, 2008 (as amended by that certain letter agreement, dated March 27, 2009, that certain letter agreement, dated September 14, 2009, that certain letter agreement, dated March 25, 2011, that certain letter agreement, dated May 2, 2012, and as the same may further be amended, modified, supplemented, extended or restated from time to time, the “New Ulm MLA”), that certain First Supplement to the Master Loan Agreement, dated as of January 4, 2008 (as the same may be amended, modified, supplemented, extended or restated from time to time, the “New Ulm First Supplement”), providing for a term loan of up to $15,000,000 (the “First New Ulm Term Loan”), that certain Second Supplement to the Master Loan Agreement, dated as of January 4, 2008 (as the same may be amended, modified, supplemented, extended or restated from time to time, the “New Ulm Second Supplement”), providing for a revolving loan in an aggregate principal amount outstanding at any one time not to exceed $10,000,000 (the “New Ulm Revolver Loan”), and that certain Third Supplement to the Master Loan Agreement, dated as of December 19, 2012 (as the same may be amended, modified, supplemented, extended or restated from time to time, the “New Ulm Third Supplement” and, together with the New Ulm MLA, the New Ulm First Supplement, and the New Ulm Second Supplement, the “New Ulm Loan Agreement”), providing for a term loan of up to $4,500,000 (the “Second New Ulm Term Loan”); and
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WHEREAS, the Secured Party and Hutchinson have entered into that certain Master Loan Agreement, dated as of January 4, 2008 (as amended by that certain letter agreement, dated June 9, 2009, that certain letter agreement, dated September 14, 2009, by that certain letter agreement, dated March 25, 2011, and as the same may further be amended, modified, supplemented, extended or restated from time to time, the “Hutchinson MLA”), that certain First Supplement to the Master Loan Agreement, dated as of January 4, 2008 (as the same may be amended, modified, supplemented, extended or restated from time to time, the “Hutchinson First Supplement”), providing for a term loan of up to $29,700,000 (the “Hutchinson Term Loan”), that certain Second Supplement to the Master Loan Agreement, dated as of January 4, 2008 (as the same may be amended, modified, supplemented, extended or restated from time to time, the “Hutchinson Second Supplement”), providing for a revolving loan in an aggregate principal amount outstanding at any one time not to exceed $2,000,000 (the “Hutchinson Revolver Loan”), and that certain Third Supplement to the Master Loan Agreement, dated as of January 4, 2008 (as the same may be amended, modified, supplemented, extended or restated from time to time, the “Hutchinson Third Supplement”; and, together with the Hutchinson MLA, the Hutchinson First Supplement and the Hutchinson Second Supplement, the “Hutchinson Loan Agreement”; the Hutchinson Loan Agreement and the New Ulm Loan Agreement, each a “Loan Agreement” and, collectively, the “Loan Agreements”), providing for a term loan of up to $3,000,000 (the “Hutchinson Bridge Loan”; and, together with the First New Ulm Term Loan, the New Ulm Revolver Loan, the Second New Ulm Term Loan, the Hutchinson Term Loan and the Hutchinson Revolver Loan, the “Loans”); and
WHEREAS, as an inducement to the Secured Party to enter into the Loan Agreements and to make the Loans provided for therein and to secure the Pledgor’s and Hutchinson’s obligations to the Secured Party under the Loan Agreements and the Pledgor’s obligations to the Secured Party under that certain Continuing Guaranty, dated as of January 4, 2008 (as amended by that certain Agreement Regarding Amendments to Loan Documents, dated as of December 19, 2012 (the “Amendment Agreement”), and as the same may further be amended, modified, supplemented, extended or restated from time to time, the “Guaranty”), the Pledgor has agreed to pledge to the Secured Party the hereinafter defined Pledged Collateral on the terms and conditions set forth in this Pledge Agreement; and
SECTION 5. The WHEREAS clauses of the Borrower Pledge Agreement are hereby amended by inserting the following as a new seventh WHEREAS clause:
WHEREAS, as an inducement to CoBank to enter into the Third Supplement and to make the Loan provided for therein, the Pledgor has agreed to amend this Pledge Agreement and certain other Loan Documents as described in the Amendment Agreement.
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SECTION 6. The last paragraph of Section 2 of the Borrower Pledge Agreement is hereby amended by amending and restating such paragraph to read in its entirety as follows:
The lien and security interest granted hereunder shall secure the following obligations (collectively, the “Secured Obligations”): (i) the payment and performance of all obligations of the Pledgor and Hutchinson under the Loan Agreements and any other Loan Document, including, without limitation, the payment of all principal, interest and other amounts becoming due and payable under that certain Promissory Note, dated as of even date herewith, made by the Pledgor to the Secured Party in the principal face amount of $15,000,000, as the same may be amended, modified, supplemented, extended, restated, renewed or replaced from time to time, that certain Promissory Note, dated as of even date herewith, made by the Pledgor to the Secured Party in the principal face amount of $10,000,000, as the same may be amended, modified, supplemented, extended, restated, renewed or replaced from time to time, that certain Promissory Note, dated as of December 19, 2012, made by the Pledgor to the Secured Party in the principal face amount of $4,500,000, as the same may be amended, modified, supplemented, extended, restated, renewed or replaced from time to time, that certain Promissory Note, dated as of even date herewith, made by Hutchinson to the Secured Party in the principal face amount of $29,700,000, as the same may be amended, modified, supplemented, extended, restated, renewed or replaced from time to time, that certain Promissory Note, dated as of even date herewith, made by Hutchinson to the Secured Party in the principal face amount of $2,000,000, as the same may be amended, modified, supplemented, extended, restated, renewed or replaced from time to time, and that certain Promissory Note, dated as of even date herewith, made by Hutchinson to the Secured Party in the principal face amount of $3,000,000, as the same may be amended, modified, supplemented, extended, restated, renewed or replaced from time to time; (ii) all payments and performances to be made by the Pledgor under the Guaranty; (iii) all payments and performances to be made by the Pledgor or Hutchinson under all other Loan Documents; (iv) the payment of all other indebtedness and the performance of all other obligations of the Pledgor and Hutchinson to the Secured Party of every type and description, whether now existing or hereafter arising, fixed or contingent, as primary obligor or as guarantor or surety, acquired directly or by assignment or otherwise, liquidated or unliquidated, regardless of how they arise or by what agreement or instrument they may be evidenced, including, without limitation, all loans, advances, Interest Rate Agreements provided by the Secured Party and other extensions of credit and all covenants, agreements, and provisions contained in all loan and other agreements between the Pledgor or Hutchinson and the Secured Party; and (v) the payment of any and all additional advances made or costs or expenses incurred by the Secured Party to protect or preserve the Pledged Collateral or the security title, lien and security interest created hereby or for any other purpose provided herein (whether or not the Pledgor remains the owner of the Pledged Collateral at the time such advances are made or costs or expenses are incurred).
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SECTION 7. The first and second WHEREAS clauses of the Guaranty are hereby amended by amending and restating such clauses to read in their entirety as follows:
WHEREAS, CoBank and New Ulm Telecom, Inc. (“New Ulm”) have entered into that certain Master Loan Agreement, dated as of January 4, 2008 (as amended by that certain letter agreement, dated March 27, 2009, that certain letter agreement, dated September 14, 2009, that certain letter agreement, dated March 25, 2011, that certain letter agreement, dated May 2, 2012, and as the same may further be amended, modified, supplemented, extended or restated from time to time, the “New Ulm MLA”), that certain First Supplement to the Master Loan Agreement, dated as of January 4, 2008 (as the same may be amended, modified, supplemented, extended or restated from time to time, the “New Ulm First Supplement”), providing for a term loan of up to $15,000,000, that certain Second Supplement to the Master Loan Agreement, dated as of January 4, 2008 (as the same may be amended, modified, supplemented, extended or restated from time to time, the “New Ulm Second Supplement”), and that certain Third Supplement to the Master Loan Agreement, dated as of December 19, 2012 (as the same may be amended, modified, supplemented, extended or restated from time to time, the “New Ulm Third Supplement”; the New Ulm MLA, as supplemented by the New Ulm First Supplement, the New Ulm Second Supplement, and the New Ulm Third Supplement, the “New Ulm Loan Agreement”), providing for a term loan of up to $4,500,000;
WHEREAS, CoBank and Hutchinson Acquisition Corp. (“Hutchinson”; and, together with New Ulm, and their successors, each a “Borrower” and, collectively, the “Borrowers”) have entered into that certain Master Loan Agreement, dated as of January 4, 2008 (as amended by that certain letter agreement, dated June 9, 2009, that certain letter agreement, dated September 14, 2009, by that certain letter agreement, dated March 25, 2011, and as the same may further be amended, modified, supplemented, extended or restated from time to time, the “Hutchinson MLA”), that certain First Supplement to the Master Loan Agreement, dated as of January 4, 2008 (as the same may be amended, modified, supplemented, extended or restated from time to time, the “Hutchinson First Supplement”), providing for a term loan of up to $29,700,000, that certain Second Supplement to the Master Loan Agreement, dated as of January 4, 2008 (as the same may be amended, modified, supplemented, extended or restated from time to time, the “Hutchinson Second Supplement”), providing for a revolving loan in an aggregate principal amount outstanding at any one time not to exceed $2,000,000, and that certain Third Supplement to the Master Loan Agreement, dated as of January 4, 2008 (as the same may be amended, modified, supplemented, extended or restated from time to time, the “Hutchinson Third Supplement”; the Hutchinson MLA, as supplemented by the Hutchinson First Supplement, the Hutchinson Second Supplement and the Hutchinson Third Supplement, collectively, the “Hutchinson Loan Agreement”; the Hutchinson Loan Agreement, together with the New Ulm Loan Agreement, collectively, the “Loan Agreements”), providing for a term loan of up to $3,000,000;
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SECTION 8. The WHEREAS clauses of the Guaranty are hereby amended by inserting the following as a new eighth WHEREAS clause:
WHEREAS, as an inducement to CoBank to enter into the New Ulm Third Supplement and make the Loan provided for therein, the Guarantors have agreed to amend this Guaranty and certain other Loan Documents as described in that certain Agreement Regarding Amendments to Loan Documents, dated as of December 19, 2012;
SECTION 9. Section 2 of each Subsidiary Guarantor Security Agreement is hereby amended by amending and restating such section to read in its entirety as follows:
SECTION 2. Obligations. The grant of the security interest hereunder shall secure the following obligations (the “Obligations”): (i) the payment and performance of all obligations of the Debtor, whether now existing or hereafter arising, under that certain Continuing Guaranty, dated as of January 4, 2008, between the Debtor, certain other guarantors from time to time party thereto, and the Secured Party, as amended by that certain Agreement Regarding Amendments to Loan Documents, dated as of December 19, 2012, and as the same may further be amended, modified, supplemented, extended or restated from time to time (the “Guaranty”); (ii) the payment and performance of all obligations of New Ulm Telecom, Inc. (“New Ulm”), whether now existing or hereafter arising, under that certain Master Loan Agreement, dated as of January 4, 2008, between New Ulm and the Secured Party, as amended by that certain letter agreement, dated March 27, 2009, that certain letter agreement, dated September 14, 2009, that certain letter agreement, dated March 25, 2011, that certain letter agreement, dated May 2, 2012, and as the same may further be amended, modified, supplemented, extended or restated from time to time (the “New Ulm MLA”), and all other Loan Documents to which New Ulm is a party, including, without limitation, that certain First Supplement to the Master Loan Agreement, dated as of January 4, 2008, as the same may be amended, modified, supplemented, extended or restated from time to time (the “New Ulm First Supplement”), that certain Second Supplement to the Master Loan Agreement, dated as of January 4, 2008, as the same may be amended, modified, supplemented, extended or restated from time to time (the “New Ulm Second Supplement”), and that certain Third Supplement to the Master Loan Agreement, dated as of December 19, 2012, as the same may be amended, modified, supplemented, extended or restated from time to time (the “New Ulm Third Supplement” and, together with the New Ulm MLA, the New Ulm First Supplement and the New Ulm Second Supplement, the “New Ulm Loan Agreement”), and the related Notes, as the same may be amended, modified, supplemented, extended or restated from time to time; (iii) the payment and performance of all obligations of Hutchinson Telephone Company as successor by merger to Hutchinson Acquisition Corp. (“Hutchinson”; and, together with New Ulm, the “Borrowers”), whether now existing or hereafter arising, under that certain Master Loan Agreement, dated as of January 4, 2008, between Hutchinson and the Secured Party, as amended by that certain letter agreement, dated June 9, 2009, that certain letter agreement, dated September 14,
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2009, by that certain letter agreement, dated March 25, 2011, and as the same may further be amended, modified, supplemented, extended or restated from time to time (the “Hutchinson MLA”), and all other Loan Documents to which Hutchinson is a party, including, without limitation, that certain First Supplement to the Master Loan Agreement, dated as of January 4, 2008, as the same may be amended, modified, supplemented, extended or restated from time to time (the “Hutchinson First Supplement”), and that certain Second Supplement to the Master Loan Agreement, dated as of January 4, 2008, as the same may be amended, modified, supplemented, extended or restated from time to time (the “Hutchinson Second Supplement”), and that certain Third Supplement to the Master Loan Agreement, dated as of January 4, 2008, as the same may be amended, modified, supplemented, extended or restated from time to time (the “Hutchinson Third Supplement”; and, together with the Hutchinson MLA, the Hutchinson First Supplement and the Hutchinson Second Supplement, the “Hutchinson Loan Agreement”; the Hutchinson Loan Agreement, together with the New Ulm Loan Agreement, the “Loan Agreements”), and the related Notes, as the same may be amended, modified, supplemented, extended or restated from time to time; and (iv) the payment of all other indebtedness and the performance of all other obligations of the Debtor or the Borrowers to the Secured Party of every type and description, whether now existing or hereafter arising, fixed or contingent, as primary obligor or as guarantor or surety, acquired directly or by assignment or otherwise, liquidated or unliquidated, regardless of how they arise or by what agreement or instrument they may be evidenced, including, without limitation, all loans, advances, Interest Rate Agreements provided by the Secured Party and other extensions of credit and all covenants, agreements, and provisions contained in all loan and other agreements between the parties.
SECTION 10. Subsection 8(H) of each Subsidiary Guarantor Security Agreement is hereby amended by amending and restating such subsection to read in its entirety as follows:
(H) Continuing Effect. This Security Agreement, the security interest of the Secured Party, in the Collateral, and all other documents or instruments contemplated hereby shall continue in full force and effect until all of the Obligations have been satisfied in full and each of the Guaranty, New Ulm MLA, New Ulm First Supplement, New Ulm Second Supplement, New Ulm Third Supplement, and each other Supplement under the New Ulm MLA, Hutchinson MLA, Hutchinson First Supplement, Hutchinson Second Supplement, Hutchinson Third Supplement and each other Supplement under the Hutchinson MLA, the related Notes, and the other Loan Documents has been terminated in accordance with their respective terms and any preference period applicable to payments made on or security given for the Obligations has expired under applicable Law.
SECTION 11. The second, fourth and sixth WHEREAS clauses of the Hutchinson Pledge Agreements are hereby amended by amending and restating such clauses to read in their entirety as follows:
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WHEREAS, the Secured Party and Hutchinson Acquisition Corp. (“Hutchinson”) have entered into that certain Master Loan Agreement, dated as of January 4, 2008 (as amended by that certain letter agreement, dated June 9, 2009, that certain letter agreement, dated September 14, 2009, by that certain letter agreement, dated March 25, 2011, and as the same may further be amended, modified, supplemented, extended or restated from time to time, the “Hutchinson MLA”), that certain First Supplement to the Master Loan Agreement, dated as of January 4, 2008 (as the same may be amended, modified, supplemented, extended or restated from time to time, the “Hutchinson First Supplement”), providing for a term loan of up to $29,700,000 (the “Hutchinson Term Loan”), that certain Second Supplement to the Master Loan Agreement, dated as of January 4, 2008 (as the same may be amended, modified, supplemented, extended or restated from time to time, the “Hutchinson Second Supplement”, providing for a revolving loan in an aggregate principal amount outstanding at any one time not to exceed $2,000,000 (the “Hutchinson Revolver Loan”), and that certain Third Supplement to the Master Loan Agreement, dated as of January 4, 2008 (as the same may be amended, modified, supplemented, extended or restated from time to time, the “Hutchinson Third Supplement”; and, together with the Hutchinson MLA, the Hutchinson First Supplement and the Hutchinson Second Supplement, the “Hutchinson Loan Agreement”), providing for a term loan of up to $3,000,000 (the “Hutchinson Bridge Loan”); and
WHEREAS, the Secured Party and New Ulm have entered into that certain Master Loan Agreement, dated as of January 4, 2008 (as amended by that certain letter agreement, dated March 27, 2009, that certain letter agreement, dated September 14, 2009, that certain letter agreement, dated March 25, 2011, that certain letter agreement, dated May 2, 2012, and as the same may further be amended, modified, supplemented, extended or restated from time to time, the “New Ulm MLA”), that certain First Supplement to the Master Loan Agreement, dated as of January 4, 2008 (as the same may be amended, modified, supplemented, extended or restated from time to time, the “New Ulm First Supplement”), providing for a term loan of up to $15,000,000 (the “First New Ulm Term Loan”), that certain Second Supplement to the Master Loan Agreement, dated as of January 4, 2008 (as the same may be amended, modified, supplemented, extended or restated from time to time, the “New Ulm Second Supplement”), providing for a reducing revolving loan in an aggregate principal amount outstanding at any one time not to exceed $10,000,000 (the “New Ulm Revolver Loan”), and that certain Third Supplement to the Master Loan Agreement, dated as of December 19, 2012 (as the same may be amended, modified, supplemented, extended or restated from time to time, the “New Ulm Third Supplement” and, together with the New Ulm MLA, the New Ulm First Supplement and the New Ulm Second Supplement, the “New Ulm Loan Agreement”; the New Ulm Loan Agreement together with the Hutchinson Loan Agreement, each a “Loan Agreement” and, collectively, the “Loan Agreements”), providing for a term loan of up to $4,500,000 (the “Second New Ulm Term Loan” and, together with the Hutchinson Term Loan, the Hutchinson Revolver Loan, the Hutchinson Bridge Loan, the First New Ulm Term Loan and the New Ulm Revolver Loan, the “Loans”); and
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WHEREAS, as an inducement to the Secured Party to enter into the Loan Agreements and to make the Loans provided for therein and to secure Hutchinson’s and New Ulm’s obligations to the Secured Party under the Loan Agreements and the Pledgor’s obligations to the Secured Party under that certain Continuing Guaranty, dated as of January 4, 2008 (as amended by that certain Agreement Regarding Amendments to Loan Documents, dated as of December 19, 2012 (the “Amendment Agreement”), and as the same may further be amended, modified, supplemented, extended or restated from time to time, the “Guaranty”), the Pledgor has agreed to pledge to the Secured Party the hereinafter defined Pledged Collateral on the terms and conditions set forth in this Pledge Agreement; and
SECTION 12. The WHEREAS clauses of the Hutchinson Pledge Agreements are hereby amended by inserting the following as a new seventh WHEREAS clause:
WHEREAS, as an inducement to CoBank to enter into the Third Supplement and to make the Loan provided for therein, the Pledgor has agreed to amend this Pledge Agreement and certain other Loan Documents as described in the Amendment Agreement.
SECTION 13. The last paragraph of Section 2 of the Hutchinson Pledge Agreements is hereby amended by amending and restating such paragraph to read in its entirety as follows:
The lien and security interest granted hereunder shall secure the following obligations (collectively, the “Secured Obligations”): (i) the payment and performance of all obligations of Hutchinson and New Ulm under the Loan Agreements and any other Loan Document, including, without limitation, the payment of all principal, interest and other amounts becoming due and payable under that certain Promissory Note, dated January 4, 2008, made by Hutchinson to the Secured Party in the principal face amount of $29,700,000, as the same may be amended, modified, supplemented, extended, restated, renewed or replaced from time to time; that certain Promissory Note, dated January 4, 2008, made by Hutchinson to the Secured Party in the principal face amount of $2,000,000, as the same may be amended, modified, supplemented, extended, restated, renewed or replaced from time to time; that certain Promissory Note, dated January 4, 2008, made by Hutchinson to the Secured Party in the principal face amount of $3,000,000, as the same may be amended, modified, supplemented, extended, restated, renewed or replaced from time to time; that certain Promissory Note, dated January 4, 2008, made by New Ulm to the Secured Party in the principal face amount of $15,000,000, as the same may be amended, modified, supplemented, extended, restated, renewed or replaced from time to time, that certain Promissory Note, dated January 4, 2008, made by New Ulm to the Secured Party in the principal face amount of $10,000,000, as the same may be amended, modified, supplemented, extended, restated, renewed or replaced from
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time to time, and that certain Promissory Note, dated December 19, 2012, made by New Ulm to the Secured Party in the principal face amount of $4,500,000, as the same may be amended, modified, supplemented, extended, restated, renewed or replaced from time to time; (ii) all payments or performances to be made by the Pledgor under the Guaranty; (iii) all payments or performances to be made by the Pledgor, Hutchinson or New Ulm under all other Loan Documents; (iv) the payment of all other indebtedness and the performance of all other obligations of the Pledgor, Hutchinson and New Ulm to the Secured Party of every type and description, whether now existing or hereafter arising, fixed or contingent, as primary obligor or as guarantor or surety, acquired directly or by assignment or otherwise, liquidated or unliquidated, regardless of how they arise or by what agreement or instrument they may be evidenced, including, without limitation, all loans, advances, Interest Rate Agreements provided by the Secured Party and other extensions of credit and all covenants, agreements, and provisions contained in all loan and other agreements between the Pledgor, Hutchinson or New Ulm and the Secured Party parties; and (v) the payment of any and all additional advances made or costs or expenses incurred by the Secured Party to protect or preserve the Pledged Collateral or the security title, lien and security interest created hereby or for any other purpose provided herein (whether or not the Pledgor remains the owner of the Pledged Collateral at the time such advances are made or costs or expenses are incurred).
SECTION 14. Appendix A of each Mortgage is hereby amended by amending and restating part 1 of such Appendix describing the “Credit Agreements” referred to in Section 1.01 of such Mortgage to read in its entirety as follows:
1. | The “Credit Agreements” referred to in Section 1.01 are as follows: |
The Master Loan Agreement, dated as of January 4, 2008, between New Ulm Telecom, Inc., as the borrower (the “Borrower”), and CoBank, ACB, as the lender (the “Lender”), as amended by that certain letter agreement, dated March 27, 2009, that certain letter agreement, dated September 14, 2009, that certain letter agreement, dated March 25, 2011, that certain letter agreement, dated May 2, 2012, and as the same may further be amended, restated, supplemented or otherwise modified from time to time, and as supplemented by (i) the First Supplement to the Master Loan Agreement, dated as of January 4, 2008, between the Borrower and the Lender, as amended, restated, supplemented or otherwise modified from time to time, (ii) the Second Supplement to the Master Loan Agreement, dated as of January 4, 2008, between the Borrower and the Lender, as amended, restated, supplemented or otherwise modified from time to time, and (iii) the Third Supplement to the Master Loan Agreement, dated as of December 19, 2012, between the Borrower and the Lender, as amended, restated, supplemented or otherwise modified from time to time.
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The Promissory Note, dated January 4, 2008, made by the Borrower to the Lender in the principal face amount of $15,000,000, as the same may be amended, modified, supplemented, extended, restated, renewed or replaced from time to time, the Promissory Note, dated January 4, 2008, made by the Borrower to the Lender in the principal face amount of $10,000,000, as the same may be amended, modified, supplemented, extended, restated, renewed or replaced from time to time, and the Promissory Note, dated December 19, 2012, made by the Borrower to the Lender in the principal face amount of $4,500,000, as the same may be amended, modified, supplemented, extended, restated, renewed or replaced from time to time.
The Master Loan Agreement, dated as of January 4, 2008, between Hutchinson Telephone Company, as the borrower (as successor by merger to Hutchinson Acquisition Corporation, the “Subsidiary Borrower”), and the Lender, as amended by that certain letter agreement, dated June 9, 2009, that certain letter agreement, dated September 14, 2009, by that certain letter agreement, dated March 25, 2011, and as the same may further be amended, restated, supplemented or otherwise modified from time to time, and as supplemented by (i) that certain First Supplement to the Master Loan Agreement, dated as of January 4, 2008, between the Subsidiary Borrower and the Mortgagee, as amended, restated, supplemented or otherwise modified from time to time, (ii) that certain Second Supplement to the Master Loan Agreement, dated as of January 4, 2008, between the Subsidiary Borrower and the Mortgagee, as amended, restated, supplemented or otherwise modified from time to time, and (iii) that certain Third Supplement to the Master Loan Agreement, dated as of January 4, 2008, between the Subsidiary Borrower and the Mortgagee, as amended, restated, supplemented or otherwise modified from time to time.
The Promissory Note, dated January 4, 2008, made by the Subsidiary Borrower to the Lender in the principal face amount of $29,700,000, as the same may be amended, modified, supplemented, extended, restated, renewed or replaced from time to time, the Promissory Note, dated January 4, 2008, made by the Subsidiary Borrower to the Lender in the principal face amount of $2,000,000, as the same may be amended, modified, supplemented, extended, restated, renewed or replaced from time to time, and the Promissory Note, dated January 4, 2008, made by the Subsidiary Borrower to the Lender in the principal face amount of $3,000,000, as the same may be amended, modified, supplemented, extended, restated, renewed or replaced from time to time.
The Security Agreement, dated as of January 4, 2008, between the Borrower and the Lender, as amended by that certain Agreement Regarding Amendments to Loan Documents, dated as of December 19, 2012, and as the same may further be amended, modified, supplemented, extended, restated, renewed or replaced from time to time.
The Security Agreement, dated as of January 4, 2008, between the Subsidiary Borrower and the Lender, as amended by that certain Agreement Regarding Amendments to Loan Documents, dated as of December 19, 2012, and as the same may further be amended, modified, supplemented, extended, restated, renewed or replaced from time to time.
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The Security Agreement, dated as of January 4, 2008, between Western Telephone Company and the Lender, as amended by that certain Agreement Regarding Amendments to Loan Documents, dated as of December 19, 2012, and as the same may further be amended, modified, supplemented, extended, restated, renewed or replaced from time to time.
The Security Agreement, dated as of January 4, 2008, between Peoples Telephone Company and the Lender, as amended by that certain Agreement Regarding Amendments to Loan Documents, dated as of December 19, 2012, and as the same may further be amended, modified, supplemented, extended, restated, renewed or replaced from time to time.
The Security Agreement, dated as of January 4, 2008, between New Ulm Phonery, Inc. and the Lender, as amended by that certain Agreement Regarding Amendments to Loan Documents, dated as of December 19, 2012, and as the same may further be amended, modified, supplemented, extended, restated, renewed or replaced from time to time.
The Security Agreement, dated as of January 4, 2008, between New Ulm Cellular #9 and the Lender, as amended by that certain Agreement Regarding Amendments to Loan Documents, dated as of December 19, 2012, and as the same may further be amended, modified, supplemented, extended, restated, renewed or replaced from time to time.
The Security Agreement, dated as of January 4, 2008, between New Ulm Long Distance, Inc. and the Lender, as amended by that certain Agreement Regarding Amendments to Loan Documents, dated as of December 19, 2012, and as the same may further be amended, modified, supplemented, extended, restated, renewed or replaced from time to time.
The Security Agreement, dated as of January 4, 2008, between Hutchinson Telephone Company and the Lender, as amended by that certain Agreement Regarding Amendments to Loan Documents, dated as of December 19, 2012, and as the same may further be amended, modified, supplemented, extended, restated, renewed or replaced from time to time.
The Security Agreement, dated as of January 4, 2008, between Hutchinson Cellular, Inc. and the Lender, as amended by that certain Agreement Regarding Amendments to Loan Documents, dated as of December 19, 2012, and as the same may further be amended, modified, supplemented, extended, restated, renewed or replaced from time to time.
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The Security Agreement, dated as of January 4, 2008, between Hutchinson Telecommunications, Inc. and the Lender, as amended by that certain Agreement Regarding Amendments to Loan Documents, dated as of December 19, 2012, and as the same may further be amended, modified, supplemented, extended, restated, renewed or replaced from time to time.
The Continuing Guaranty, dated as of January 4, 2008, by the Borrower, the Subsidiary Borrower, Western Telephone Company, Peoples Telephone Company, New Ulm Phonery, Inc., New Ulm Cellular #9, Inc., New Ulm Long Distance, Inc., Hutchinson Cellular, Inc. and Hutchinson Telecommunications, Inc. in favor of the Lender, as amended by that certain Agreement Regarding Amendments to Loan Documents, dated as of December 19, 2012, and as the same may further be amended, modified, supplemented, extended, restated, renewed or replaced from time to time.
The Stock Pledge Agreement, dated as of January 4, 2008, by the Borrower in favor of the Lender, as amended by that certain Agreement Regarding Amendments to Loan Documents, dated as of December 19, 2012, and as the same may further be amended, modified, supplemented, extended, restated, renewed or replaced from time to time.
The Stock Pledge Agreement, dated as of January 4, 2008, by the Subsidiary Borrower in favor of the Lender, as amended by that certain Agreement Regarding Amendments to Loan Documents, dated as of December 19, 2012, and as the same may further be amended, modified, supplemented, extended, restated, renewed or replaced from time to time.
The Stock Pledge Agreement, dated as of January 4, 2008, by Hutchinson Cellular, Inc. in favor of the Lender, as amended by that certain Agreement Regarding Amendments to Loan Documents, dated as of December 19, 2012, and as the same may further be amended, modified, supplemented, extended, restated, renewed or replaced from time to time.
All other Loan Documents to which the Borrower or the Subsidiary Borrower is a party.
SECTION 15. Neither this Amendment Agreement nor any prior amendment to the Loan Agreement or other Loan Documents shall constitute a novation of the Loan Agreement or the other Loan Documents. The Loan Parties acknowledge and expressly agree that this Amendment Agreement is limited to the extent expressly set forth herein and shall not constitute a modification of the Loan Agreement or any other Loan Documents or a course of dealing at variance with the terms of the Loan Agreement or any other Loan Documents (other than as expressly set forth above) so as to require further notice by CoBank, of its intent to require strict adherence to the terms of the Loan Agreement and the other Loan Documents in the future. All of the terms, conditions, provisions and covenants of the Loan Agreement and the other Loan Documents shall remain unaltered and in full force and effect except as expressly modified by this Amendment Agreement. The Loan Agreement and each other Loan Document shall be deemed modified hereby solely to the extent necessary to effect the amendments contemplated hereby.
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SECTION 16. All references to the Borrower Security Agreement, the Borrower Pledge Agreement, the Guaranty, the Subsidiary Guarantor Security Agreements, the Hutchinson Telephone Pledge Agreement and the Mortgages (collectively, the “Amended Documents”) in any of the Amended Documents, or in any other documents, instruments or agreements executed or delivered in connection therewith, shall be deemed a reference to such Amended Document as amended by this Amendment Agreement. Except as expressly provided in this Amendment Agreement, the execution and delivery of this Amendment Agreement does not and will not amend, modify or supplement any provision of, or constitute a consent to or a waiver of any noncompliance with the provisions of, the Loan Agreement or the other Loan Documents, and, except as specifically provided in this Amendment Agreement, the Loan Agreement and the other Loan Documents shall remain in full force and effect.
SECTION 17. Each of the Loan Parties hereby represents and warrants to CoBank as follows:
(a) | such entity has the right and power, and has taken all necessary action to authorize it, to execute, deliver and perform this Amendment Agreement in accordance with its terms. This Amendment Agreement has been duly executed and delivered by such entity and is a legal, valid and binding obligation of it, enforceable against it in accordance with its terms; |
(b) | the execution, delivery and performance of this Amendment Agreement in accordance with its terms do not and will not, by the passage of time, the giving of notice or otherwise, |
(i) | require any governmental approval or violate any applicable Law relating to such entity; |
(ii) | conflict with, result in a breach of or constitute a default under the organizational documents of such entity, any material provision of any indenture, agreement or other instrument to which it is a party or by which it or any of its properties may be bound or any governmental approval relating to it; or |
(iii) | result in or require the creation or imposition of any lien (except as permitted by the Loan Agreement and the other Loan Documents) upon or with respect to any property now owned or hereafter acquired by such entity; |
(c) | that, after giving effect to the amendments set forth in this Amendment Agreement, the representations and warranties of such entity set forth in the Loan Agreement and the other Loan Documents are true and correct as of the date hereof as if made on the date hereof; and |
(d) | no Potential Default or Event of Default under the Loan Agreement and the other Loan Documents has occurred and is continuing as of this date. |
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SECTION 18. The Borrower, as the maker of the Borrower Security Agreement, the Borrower Pledge Agreement, the Guaranty and certain other Loan Documents, each Subsidiary Guarantor, as the maker of the Guaranty, the Subsidiary Guarantor Security Agreements and certain other Loan Documents, and Hutchinson Telephone, as the maker of the Hutchinson Telephone Pledge Agreement, hereby confirms and agrees that (a) each such document, as amended hereby, as applicable, is and shall continue to be in full force and effect, and (b) the obligations secured by each such document include any and all obligations of the Borrower to CoBank under the Loan Agreement.
SECTION 19. This Amendment Agreement shall become effective as of its date. All obligations and rights of the Loan Parties and CoBank arising out of or relating to the period commencing on the effective date hereof shall be governed by the terms and provisions of the Loan Agreement as amended by this Amendment Agreement; the obligations of and rights of the Loan Parties and CoBank arising out of or relating to the period prior to the date hereof shall continue to be governed by the Loan Agreement without giving effect to the amendments provided for herein.
SECTION 20. The Borrower agrees to pay CoBank, on demand, all out-of-pocket costs and expenses incurred by CoBank, including, without limitation, the reasonable fees and expenses of counsel retained by CoBank, in connection with the negotiation, preparation, execution and delivery of this Amendment Agreement and all other instruments and documents contemplated hereby.
SECTION 21. This Amendment Agreement may be executed in any number of counterparts and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original and shall be binding upon all parties and their respective permitted successors and assigns, and all of which taken together shall constitute one and the same agreement.
SECTION 22. Except to the extent governed by applicable federal law, this Amendment Agreement shall be governed by and construed in accordance with the laws of the Colorado, without reference to choice of law doctrine.
[Signatures comment on following page.]
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IN WITNESS WHEREOF, the Loan Parties have caused this Amendment Agreement to be executed and delivered, and CoBank has caused this Amendment Agreement to be executed and delivered, each by their respective duly authorized officers as of the date first shown above.
NEW ULM TELECOM, INC. | ||
as the Borrower | ||
By: | ||
Curtis Kawlewski Chief Financial Officer | ||
HUTCHINSON TELEPHONE COMPANY, NEW ULM LONG DISTANCE, INC., NEW ULM CELLULAR #9, INC., NEW ULM PHONERY, INC., PEOPLES TELEPHONE COMPANY, WESTERN TELEPHONE COMPANY, HUTCHINSON TELECOMMUNICATIONS, INC., and HUTCHINSON CELLULAR, INC., | ||
each as a Subsidiary Guarantor | ||
By: | ||
Curtis Kawlewski Chief Financial Officer |
[Signatures continue on following page.]
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[Signatures continued from previous page.]
COBANK, ACB | ||
By: | ||
Nick Heslip Vice President |
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Exhibit 10.4
Loan Nos. RX0583 and RX0584
AGREEMENT REGARDING AMENDMENTS TO STOCK
PLEDGE AGREEMENT
AND SECURITY AGREEMENTS
This AGREEMENT REGARDING AMENDMENTS TO STOCK PLEDGE AGREEMENT AND SECURITY AGREEMENTS (this “Amendment Agreement”), dated as of December 31, 2012, is between (i) NEW ULM TELECOM, INC. (the “Borrower”), (ii) Western Telephone Company (“WTC”), Peoples Telephone Company (“PTC”), New Ulm Phonery, Inc. (“Phonery”), New Ulm Cellular #9, Inc. (“Cellular”), New Ulm Long Distance, Inc. (“Long Distance”), Hutchinson Telephone Company (“Hutchinson Telephone”), Hutchinson Cellular, Inc. (“Hutchinson Cellular”), and Hutchinson Telecommunications, Inc. (“Hutchinson Telecom” and, together with WTC, PTC, Phonery, Cellular, Long Distance, Hutchinson Telephone, Hutchinson Cellular, and Hutchinson Telecom, each a “Subsidiary Guarantor” and, collectively, the “Subsidiary Guarantors”; the Subsidiary Guarantors, together with the Borrower, each a “Loan Party” and, collectively, the “Loan Parties”), and (iii) COBANK, ACB (“CoBank”).
RECITALS
WHEREAS, the Borrower and CoBank are parties to that certain Master Loan Agreement, dated as of January 4, 2008 (as amended by that certain letter agreement, dated March 27, 2009, that certain letter agreement, dated September 14, 2009, that certain letter agreement, dated March 25, 2011, that certain letter agreement, dated May 2, 2012, and as the same may further be amended, modified, supplemented, extended or restated from time to time, the “MLA”), as supplemented by that certain First Supplement to the Master Loan Agreement, dated as of January 4, 2008, providing for a term loan in the amount of $15,000,000 (as amended, modified, supplemented, extended or restated from time to time, the “First Supplement”), as supplemented by that certain Second Supplement to the Master Loan Agreement, dated as of January 4, 2008, providing for a revolving loan in an aggregate principal amount outstanding at any one time not to exceed $10,000,000 (as amended, modified, supplemented, extended or restated from time to time, the “Second Supplement”), and as supplemented by that certain Third Supplement to the Master Loan Agreement, dated as of December 18, 2012, providing for a term loan in the amount of $4,500,000 (as amended, modified, supplemented, extended or restated from time to time, the “Third Supplement”; the MLA, as supplemented by the First Supplement, the Second Supplement and the Third Supplement, collectively, the “Loan Agreement”);
WHEREAS, the Borrower has also executed and delivered to CoBank that certain Security Agreement, dated as of January 4, 2008 (as amended by that certain Agreement Regarding Amendments to Loan Documents, dated as of December 18, 2012, and as the same may further be amended, modified, supplemented, extended or restated from time to time, the “Borrower Security Agreement”), pursuant to which the Borrower granted to CoBank a security interest in and lien on substantially all of its then owned or thereafter acquired tangible and intangible personal property, and that certain Stock Pledge Agreement, dated as of January 4, 2008 (as amended by that certain Agreement Regarding Amendments to Loan Documents, dated as of December 18, 2012, and as the same may further be amended, modified, supplemented, extended or restated from time to time, the “Borrower Pledge Agreement”), pursuant to which the Borrower granted to CoBank a security interest in and lien on the equity interests described therein;
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WHEREAS, the Loan Parties have executed and delivered to CoBank that certain Continuing Guaranty, dated as of January 4, 2008 (as amended by that certain Agreement Regarding Amendments to Loan Documents, dated as of December 18, 2012, and as the same may further be amended, modified, supplemented, extended or restated from time to time, the “Guaranty”), pursuant to which, among other things, the Subsidiary Guarantors guaranteed all then existing or thereafter arising obligations of the Borrower to CoBank under the Loan Agreement or otherwise;
WHEREAS, each Subsidiary Guarantor has executed and delivered to CoBank a separate Security Agreement, each dated as of January 4, 2008 (as amended by that certain Agreement Regarding Amendments to Loan Documents, dated as of December 18, 2012, and as the same may further be amended, modified, supplemented, extended or restated from time to time, each a “Subsidiary Guarantor Security Agreement” and, collectively, the “Subsidiary Guarantor Security Agreements”; the Subsidiary Guarantor Security Agreements together with the Borrower Security Agreement, each a “Security Agreement and, collectively, the “Security Agreements”), pursuant to which each Subsidiary Guarantor granted to CoBank as security for its obligations under the Guaranty a security interest in substantially all of its then owned or thereafter acquired tangible and intangible personal property;
WHEREAS, the Borrower has entered into that certain Spin-Off Agreement, dated as of November 15, 2012, between the Borrower, Arvig Enterprises, Inc., Blue Earth Valley Communications, Inc. and Hector Communications Corporation (“Hector”), pursuant to which the Borrower will acquire from Hector on or about the date hereof all of the outstanding membership interests in Sleepy Eye Telephone Company (“Sleepy Eye”); and
WHEREAS, in connection with the Borrower’s acquisition of the membership interests in Sleepy Eye, the Borrower, the Subsidiary Guarantors and CoBank have agreed to certain amendments to the Borrower Pledge Agreement and the Security Agreements, as set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the agreements set forth in this Amendment Agreement, the Borrower, the Subsidiary Guarantors and CoBank each hereby agrees as follows:
SECTION 1. Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to them in the MLA.
SECTION 2. The “Collateral” description in Section 1 of each of the Security Agreements is hereby amended by adding the following as a new clause (xii) immediately following clause “(xi) commercial tort claims”, and by renumbering clause (xii) as clause (xiii):
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(xii) demand, time, savings, passbook, or similar account maintained with any bank or other depository institution (collectively, the “Deposit Accounts”), including, any such account listed on Schedule C attached hereto and made a part hereof; and
SECTION 3. Subsection 3(D) of each of the Security Agreements is hereby amended by amending and restating such subsection to read in its entirety as follows:
(D) Location of Collateral; Accounts. All locations at which the Collateral is located (other than vehicles and property attached thereto) are specified on Schedule A attached hereto and made a part hereof. All Deposit Accounts and securities accounts owned by the Debtor are set forth in Schedule C, including, with respect to each such account: (i) the name and address of the bank, depository institution or securities intermediary, (ii) the account name and number, (iii) the type of account, and (iv) a description of the assets in such account, if applicable.
SECTION 4. Section 4 of each of the Security Agreements is hereby amended by adding the following as a new Subsection 4(P) at the end of such section:
(P) Change in Accounts. The Debtor agrees not to acquire or open any Deposit Account or securities account other than as provided on Schedule C unless it shall have given the Secured Party 30 days’ prior written notice of its intention to acquire or open any such account, delivered to the Secured Party an updated Schedule C, and, if requested by the Secured Party, prior to the date on which the Debtor proposes to acquire or open any such account, the Debtor will, at its own cost and expense, cause to be delivered to the Secured Party any account control agreements, financing statements, financing statement amendments, lien search results, or any other instruments or documents as the Secured Party may request from time to time.
SECTION 5. Each of the Security Agreements is hereby amended by adding the Schedule C attached as Exhibit 1 to this Amendment Agreement as a new Schedule C at the end of each Security Agreement.
SECTION 6. Schedule 1 of the Borrower Pledge Agreement is hereby amended and restated in its entirety by replacing such schedule with Schedule 1 attached as Exhibit 2 to this Amendment Agreement.
SECTION 7. Neither this Amendment Agreement nor any prior amendment to the Loan Agreement or other Loan Documents shall constitute a novation of the Loan Agreement or the other Loan Documents. The Loan Parties acknowledge and expressly agree that this Amendment Agreement is limited to the extent expressly set forth herein and shall not constitute a modification of the Loan Agreement or any other Loan Documents or a course of dealing at variance with the terms of the Loan Agreement or any other Loan Documents (other than as expressly set forth above) so as to require further notice by CoBank, of its intent to require strict adherence to the terms of the Loan Agreement and the other Loan Documents in the future. All of the terms, conditions, provisions and covenants of the Loan Agreement and the other Loan Documents shall remain unaltered and in full force and effect except as expressly modified by this Amendment Agreement. The Loan Agreement and each other Loan Document shall be deemed modified hereby solely to the extent necessary to effect the amendments contemplated hereby.
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SECTION 8. All references to the Borrower Pledge Agreement and the Security Agreements (collectively, the “Amended Documents”) in any of the Amended Documents, or in any other documents, instruments or agreements executed or delivered in connection therewith, shall be deemed a reference to such Amended Document as amended by this Amendment Agreement. Except as expressly provided in this Amendment Agreement, the execution and delivery of this Amendment Agreement does not and will not amend, modify or supplement any provision of, or constitute a consent to or a waiver of any noncompliance with the provisions of, the Loan Agreement or the other Loan Documents, and, except as specifically provided in this Amendment Agreement, the Loan Agreement and the other Loan Documents shall remain in full force and effect.
SECTION 9. Each of the Loan Parties hereby represents and warrants to CoBank as follows:
(a) | such entity has the right and power, and has taken all necessary action to authorize it, to execute, deliver and perform this Amendment Agreement in accordance with its terms. This Amendment Agreement has been duly executed and delivered by such entity and is a legal, valid and binding obligation of it, enforceable against it in accordance with its terms; |
(b) | the execution, delivery and performance of this Amendment Agreement in accordance with its terms do not and will not, by the passage of time, the giving of notice or otherwise, |
(i) | require any governmental approval or violate any applicable Law relating to such entity; |
(ii) | conflict with, result in a breach of or constitute a default under the organizational documents of such entity, any material provision or any indenture, agreement or other instrument to which it is a party or by which it or any of its properties may be bound or any governmental approval relating to it; or |
(iii) | result in or require the creation or imposition of any lien (except as permitted by the Loan Agreement and the other Loan Documents) upon or with respect to any property now owned or hereafter acquired by such entity; |
(c) | that, after giving effect to the amendments set forth in this Amendment Agreement, the representations and warranties of such entity set forth in the Loan Agreement and other Loan Documents are true and correct as of the date hereof as if made on the date hereof; and |
(d) | no Potential Default or Event of Default under the Loan Agreement and the other Loan Documents has occurred and is continuing as of this date. |
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SECTION 10. The Borrower, as the maker of the Borrower Security Agreement, the Borrower Pledge Agreement and certain other Loan Documents, and each Subsidiary Guarantor, as the maker of the Subsidiary Guarantor Security Agreements and certain other Loan Documents, hereby confirms and agrees that (a) each such document, as amended hereby, as applicable, is and shall continue to be in full force and effect, and (b) the obligations secured by each such document include any and all obligations of the Borrower to CoBank under the Loan Agreement.
SECTION 11. This Amendment Agreement shall become effective as of its date. All obligations and rights of the Loan Parties and CoBank arising out of or relating to the period commencing on the effective date hereof shall be governed by the terms and provisions of the Loan Agreement as amended by this Amendment Agreement; the obligations of and rights of the Loan Parties and CoBank arising out of or relating to the period prior to the date hereof shall continue to be governed by the Loan Agreement without giving effect to the amendments provided for herein.
SECTION 12. The Borrower agrees to pay CoBank, on demand, all out-of-pocket costs and expenses incurred by CoBank, including, without limitation, the reasonable fees and expenses of counsel retained by CoBank, in connection with the negotiation, preparation, execution and delivery of this Amendment Agreement and all other instruments and documents contemplated hereby.
SECTION 13. This Amendment Agreement may be executed in any number of counterparts and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original and shall be binding upon all parties and their respective permitted successors and assigns, and all of which taken together shall constitute one and the same agreement.
SECTION 14. Except to the extent governed by applicable federal law, this Amendment Agreement shall be governed by and construed in accordance with the laws of the Colorado, without reference to choice of law doctrine.
[Signatures comment on following page.]
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IN WITNESS WHEREOF, the Loan Parties have caused this Amendment Agreement to be executed and delivered, and CoBank has caused this Amendment Agreement to be executed and delivered, each by their respective duly authorized officers as of the date first shown above.
NEW ULM TELECOM, INC. | ||
as the Borrower | ||
By: | ||
Curtis Kawlewski Chief Financial Officer | ||
HUTCHINSON TELEPHONE COMPANY, NEW ULM LONG DISTANCE, INC., NEW ULM CELLULAR #9, INC., NEW ULM PHONERY, INC., PEOPLES TELEPHONE COMPANY, WESTERN TELEPHONE COMPANY, HUTCHINSON TELECOMMUNICATIONS, INC., and HUTCHINSON CELLULAR, INC., | ||
each as a Subsidiary Guarantor | ||
By: | ||
Curtis Kawlewski Chief Financial Officer |
[Signatures continue on following page.]
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[Signatures continued from previous page.]
COBANK, ACB | ||
By: | ||
Nick Heslip Vice President |
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