20200422Application.pdf

RECEIVED
2020 April22,PM12:19
IDAHO PUBLIC
UTILITIES COMMISSIONStephen M. Frinsko, ISB No. 8432
HAWLEY TRO)GLL ENMS & HAWLEY LLP
877 MunStreet, Suite 1000
P.O. Box 1617
Boise,ID 83701-1617
Telephone: [phone]
Facsimile: 208-954'5261
Email: [e-mail]
Attorneys for Westel, LLC
IN TTIE MATTER OF TTM APPLICATION
OF WESTELLLC FOR AUTHORITY TO
GUARANTY LOAN TO INVOLTA, LLC IN
AN AGGREGATE AMOTJNTNOT TO
EXCEED $147,000,000.
BEFORE TIIE IDAHO PUBLIC UTILITIES COMNflSSION
Case No. WSC-T-20-01
APPLTCATTON OF WESTEL, LLC
Westel, LLC ("Applicant") makes this Application under Idaho Code $ 6l-901 and
IDAPA $$31.0.01.141-t47 for authority to become a Subsidiary Guarantor by executing a
joinder to that certain Credit Agreement, dated as of Aprit 14,2020, a joinder to that certain
Security Agreement, dated as of April 14, 2020, and related loan documents, in each case in
favor of Toronto Dominion (Texas) LLC and the other Lenders party thereto (collectively,
"Lendey''), under which Applicant will guaranty payment oi and will pledge its collateral as
security for (collectively, the "Guaranty''), certain term loans, revolving loans, and letters of
credit (collectively, the "Loan") to be made or issued to Applicant's indirect parent, Involta, LLC
("Involta"). The Loan will consist of four separate credit facilities: (i) one or more Term Loans
in a principal amount equal to $92,500,000; (ii) one or more Delayed Draw Term Loans in an
aggregate principal amount not to exceed $42,000,000; (iii) one or more Revolving Loans in an
aggregate principal amount not to exceed $10,000,000; and (iv) one or more Letters of Credit in
Appr.rcarroN oF WEsrEL, LLC Q020 Loeu Guenn'rrv)- I
46220.0006.127 7 49?2.2
an aggregate principal amount not to exceed $2,500,000. [n support of its Application, Applicant
states as follows:
1. Applicant is a certificated telephone corporation organized under the laws of the
State of Idaho providing telecommunication services including local exchange service within the
state of Idaho under a Second Amended Certificate of Public Convenience and Necessity,
Certificate No. 401 (the "Certificate"). Applicant acquired the Certificate through a 2074
acquisition, as described in more detail below. In July 2002, the Commission issued Order No.
29084 Santing WestCom LLC dba Digital Easy Chair a Certificate of Public Convenience and
Necessity, and in August 2002 the Commission issued Certificate No. 401 to WestCom. In
January 2006, the Commission issued Order No. 29965 granting a name change from WestCom
LLC dba Digital Easy Chair to WestCom,LLC dba WestTelFiber ("WestCom"). Effective July
15, 20t4, Applicant acquired the assets of WestCom, which included the Certificate. The
Commission approved of that tansfer and the resulting name change to Westel, LLC by Order
No. 33121 in CaseNo. WSC-T-05-1.
2. All notices and communications with regard to this Application should be served
upon:
Steve Frinsko
HAWLEY TROXELL ENNIS & HAWLEY LLP
877 ManStreet, Suite 1000 (ZP 83702)
P.O. Box 1617
Boise, Idalro 837 01 -l 617
[e-mail]
Telephone: [phone]
Facsimile : 208 -9 5 4-5261
and
il
il
il
il
ApplrcarroN oF WESTEL ,LLC (2020 LoaN Guan e.Nw) - 2
46220.00/06.12'174922.2
Randall Rings
Chief Administrative Officer and Corporate Secretary
lnvolta, LLC
460lzthAvenue SE
Suite 100
Cedar Rapids, Iowa 52401
[e-mail]
Telephone: 3 l9-261 -3000
The Guaranty is a condition of the Loan. The Loan proceeds will be used to pay
for, and partially reimburse general funds to: (a) in part to repay existing indebtedness for
bonowed money of tnvolta and its subsidiaries and affiliates; (b) in part for working capital and
general corporate purposes, including to effect certain acquisitions, direct and indirect
investments in other parties, capital expenditures, redemption of certain equity interests in
Involta's parent entity, and any other hansaction not prohibited under the Loan agreement. The
Loan documents do not allow for any proceeds of revolving loans to be used to finance a
dividend. The material terms of the Loan and more details regarding permitted uses of Loan
proceeds are set forth in the Engagement Letter dated March 16,2020, from Lender to Involta
(.'Commitment Letter") and in the Credit Agreement and Security Agreement. Copies of the
Commitment Letter, the Credit Agreement, and the Security Agreement, which are to be deemed
Exhibit A to this Applicatiorl are being submitted with this Application under separate cover as
Westel's confidential information for Commission and Commission Staffreview.
4. Applicant is required to provide a guaranty of the Loan and to pledge its collateral
as security for the Loan. Applicant's affiliates and parent companies, including Involta (as both a
the borrower and as a guarantor), Involta Holdings, LLC, lnvolta Real Estate, LLC, Eastern Iowa
Data Center,LLC,InvoltaOne,LLC, and Broadrband.com, LLC, are also required to guaranty
the Loan and pledge their respective collateral as security for the Loan.
3
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46220.W06.12774922.2
5. The proposed transaction is consistent with the public interest. The Loan will be
used to refinance existing credit lines and will fund Applicant's operations and capital
expenditures, which will ultimately improve service for Applicant's customers and make it
possible for Applicant to meet new service demands.
6. A copy of the Applicant's most recent Annual Report showing the authorized and
outstanding classes of Applicant's securities is on file with the Commission, and the Applicant
respectfully requests the Commission take ofEcial notice thereof.
7. A certified copy of Applicant's Manager's resolution authorizing the proposed
transaction is attached hereto as Exhibit B.
8. A Proposed Order granting this Application is attached hereto as Exhibit C.
9. Notice of this Application will be published within seven (7) days nThe ldaho
Statesman @oise) and the ldaho Business Review (Boise). A copy of this Notice is attached as
ExhibitD.
10. Applicant submits that the public interest does not require a hearing on this matter
and it requests that the Commission process this Application and determine this matter by
Modified Procedure, pursuant to Rule 144 of the Commission's Rule of Practice and Procedure.
In the event the Commission determines that forrnal proceedings on this Application are
necessary, Applicant stands ready for immediate hearing.
I 1. One hundred percent (100%) of Applicant's total book value is located in Idaho.
Applicant has therefore attached its filing fee, calculated pursuant to Idatro Code Section 61-905,
in the amount of $1000.
12. In order to enable it to meet Lender-imposed deadlines, Applicant requests that
the Commission issue its Order approving the foregoing Application on or before May 15, 2020.
AppuceuoN oF WESTEL, LLC Q020 LoeN Guenc.NTY) * 4
46?20.m,06.12774922.2
WHEREFORE, Applicant respectfirlty requests an Order of this Cornmission:
l. Cranting the foregoing Application of Wes'tel, LLC for Authority to Guaranty
Loan to Involtg LLC in an Amount of up to $147,000,000; and
2. Crranting zuoh other relief as the Commission deems just and rrasonable in this
matter.
Dated: Api122,2020 & HAWLEY LLP
\
By:
Frinsko,ISB No. 8432
Attorneys for Westel, LLC
HA
AppucmoN oF WEsTEL ,LLC Q020 LoaN Gueurrv) - 5
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CERTIT'ICATE OF SERVICE
I HEREBY CERTIFY that on this 22nd day of April,2020,I caused to be served a true
and correct copy of the foregoing document by the method indicated below, aod addressed to the
following:
Ms. Diane Hanian, Secretary
Idaho Public Utilities Commission
P.O. Box 83720 Boise,ID 83720-0074
ll33l W. Chinden Blvd.
Building 8, Suite 201-A
Boise, D 83714
e-mail : [e-mail]. gov
[ ] U.S. Mail
[ ] Hand Delivered
[ ] Overnight Mail
[ ] Facsimile
[X] E-mail pursuant to IPUC Order No. 34602
M. Frinsko
ApprrcnrroN oF WESTEL, LLC (2020 Loau Guanexrv) - 6
4A20.00r,6.12774922.2
DGIIBITA
COMMITMENT LETTER AI{D LOA}I DOCI.'MENTS
lsubmitt ed under s epu ate c oy er as Applicant's confidenttal informationl
Appr,tc.lttoN oF WEsrEL, LLC QA20 LoeN Guenalrrv) - ErctnIr A
45220.0mr^12174922.2
HffiIBTTB
APPLICANT' S IvIANAGER'S RESOLUTION
ApplrceuoN or Wrsrtl, LLC QA20 LoaN Guener.r'ry) - Exunr B
&220.WJn74vX22
wEsTEL, LLC
JOINT WRITTEN CONSENT OF
SOLE MEMBER AND SOLE TVIANAGER
Aprit 20,2020
The undersigned as the sole member and sole manager (collectively, the "Manager") of
Westel, LLC, an Idaho limited liability company ("Company"), waives any requirements of
notice and a meeting, pursuant to Idaho Code Section 30-25-101, et. seq., and consents to the
adoption of the following resolutions, effective as of the date set forth above.
As used in this Consent, "Authorized Representatives" means Bruce E. Lehrman,
James Buie, and Randall Rings, and any other employee of a Company acting at the written
direction of such individual. Capitalized terms used but not defined in this Consent have the
meanings given to them in the Credit Agreement referenced below.
The Manager deems it advisable and in the best interests of the Company to take the
actions and to consummate the transactions described below.
Credit Aqreement
RESOLVED: That it is advisable and in the best interest of the Company, and that the
Company is authorized to negotiate, enter into, execute, and deliver, and hereby is authorized to
perform the Credit Agreement (the "Credit Agreement") among Involta, LLC, an Iowa limited
liability company and sole member of the Company ("Involta"), Toronto Dominion (Texas)
LLC, as administrative agent for the Lenders and collateral agent for the Secured Parties (in such
capacities, the "Agenf'), T1',. Toronto-Dominion Bank, New York Branch, as a Swing Line
Lender and as Issuing Bank, and the other parties thereto, pursuant to which (i) Involta will
borrow the aggregate arnount of $92,500,000 in term loans, up to an aggegate $42,000,000 in
detayed draw term loans and up to an aggregate $10,000,000 in revolving loans (which will
include up to an aggregate $2,000,000 in Swing Line Loans) and (ii) the Issuing Bank will issue
one or more Letters of Credit to Involta from time to time in an aggregate undrawn face amount
plus any unreimbursed drawn amounts not in excess of $2,500,000; and that the Credit Agreement
be, and hereby is, ratified, approved and adopted; and that the Authorized Representatives are,
and each of them acting singly is, authorized in the name and on behalf of each Company to
execute and deliver the Credit Agreement, with such changes as the Authorized Representative or
Authorized Representatives executing the same may, in such Authorized Representative's or
Authorized Representatives' discretion, deem appropriate, the execution and delivery thereof to
be conclusive evidence of such determination and of the due authorization of the Company.
Credit Ancillarv Documents
RESOLVED: That it is advisable and in the best interesl of the Company, and that the
Company is authorized to negotiate, enter into, execute and deliver, and hereby is authorized to
perform the Loan Documents to which the Company is a party, including, without limitation, the
Notes, the Security Documents, ild any other documents, agreements and certificates
contemplated by the Loan Documents to which the Company is a party, all as described in the
Credit Agreement (the "Credit Ancillary Documents", and together with the Credit Agreement,
JorNr WRTmEN CoNSENT FoR CRFDTT AGREEMENT - I
4 6220.0006. t 27 88622. I
the "Credit Documents"); and that each Credit Ancillary Document be, and hereby is, ratified,
approved and adopted; and that the Authorized Representatives are, and each of them acting
shgly is, authorized in the name and on behalf of the Company to execute and deliver the Credit
Ancillary Documents to which the Company is a party in such forms as such Authorized
Representative executing the same may, in such Authorizrd Representative's discretion, deem
appropriate, the execution and delivery thereof to be conclusive evidence of such determination
and of the due authorization of the Company.
FURTIIER RESOLVED: That the Authorized Representatives are, and each of them
acting singly is, authorized in the name and on behalf of the Company to execute and deliver
any amendments, supplements or other modifications to the Credit Documents to which the
Company is a party and any agreements, instruments, or other documents in connection with
the transactions contemplated by the Credit Documents on such terms and conditions as the
Authorized Representatives may deem appropriate, the execution and delivery thereof to be
conclusive evidence of such determination and of the due authorization of the Company.
FT RTIIER RESOLVED: That the Company is authorized to unconditionally
guarantee the Loans and grant a security interest and lien to the Lenders in any and all of the
Company's assets pursuant to the Credit Documents, which security interest and lien shall
s€cure all of the Company's obligations to the Lenders under the Credit Documents.
FURTIIER RESOLVED: That the Company is authorized and directed to execute,
deliver and/or file (or authorize the filing of) financing statements and any other documents
necessary under the Uniform Commercial Code or under any other applicable statutes in order to
perfect, complete, or record the liens and security interests granted under or pursuant to the
Credit Documents.
IPUC Approval
RESOLVED: That the Company is authorized and directed to apply to the Idaho Public
Utilities Commission ("IPUC") under Idaho Code $ 6l-901 and IDAPA $$ 31.0.01.141-147 for
authority to execute the Credit Documents.
FURTHER RESOLVED: That the authorizations granted under this Consent are in all
respects conditioned upon IPUC issuing an order authorizing the Company to execute the Credit
Documents.
General Authoritv
RESOLVED: That the Authorized Representatives are, and each of them acting singly
is, authorized from time to time, in the name of and on behalf of the Company, if necessary, to
execute, make oath to, acknowledge and deliver any and all such orders, directions, certificates,
agreements, and documents, and to do or cause to be done any and all such other acts and things,
as may, in his, her, or their judgment, be necessary, desirable, appropriate, or convenient in
connection with the consurnmation of the transactions contemplated by the foregoing resolutions.
FURTHER RESOLVED: That any acts on behalf of the Company in funherance of the
foregoing resolutions and any orders, directions, certificates, agreements, and documents
JoNr WRrrrEN CoNsEMr Fon CREDIT AGREEMTT{T - 2
46220.0006.1 ?1 E8622. t
previously executed on behalf of the Company by the Authorized Representatives in fi,rtherance
of the foregoing resolutions be, and they hereby are, authorized, ratified, confirrred, ild
approved in all respects as the true asts and deeds of the Company with the same force and effect
as if each such act, tansaction, order, direction, certificate, agreement or docunent had bcen
specifically authorized in advance by resolution of the Company.
The undersigned further directs that this Consent will take effect immediately as of the
date first above written and shall be filed in the minute books of the Company.
SOLE MEMBERAND SOLE MANAGER:
IrwoLTA, LLC
By:
Rings
Chief Administrative Offrcer and
Corporate Secretary
JoINT WRTTTE{ CONSENT FOR CREDTTAGITEFJB{T- 3
46220.0006.t278ffi22.t
E)(HIBITC
PROPOSED ORDER
AppncmoN or Wesrel ,LLC Q020 LoeN Guenexrv) - Exuptr C
46X20-trJn6..tn?49tt2
Stephen M. Frinsko,ISB No. 8432
HAWLEY TROXELL ENNIS & HAWLEY LLP
877 Main Street, Suite 1000
P.O. Box l617
Boise,lD 83701-16t7
Telephone: [phone]
Facsimile: 208-954-5261
Email: [e-mail]
Attorneys for Westel, LLC
IN THE MATTER OF THE APPLICATION
OF WESTELLLC FOR AUTHORITY TO
GUARANTY LOAN TO INVOLTA, LLC IN
AN AGGREGATE AMOUNT NOT TO
EXCEED S147,000,000.
BEFORE THE IDAIIO PUBLIC UTILITIES COMMISSION
CaseNo. WSC-T-20-01
PROPOSED ORDER
On April 22, 2020, Westel, LLC ('Applicant"), filed an Application for authority to
execute a Credit Agreement, Security Agreemen! and related loan documents in favor of
Toronto Dominion (Texas) LLC and the other Lenders party thereto (collectively, "Lendero'),
under which Applicant will guaranty payment of, and will pledge its collateral as security for
(collectively, the "Guaran!/"), certain term loans, revolving loans, and letters of credit
(collectively, the "Loan") to be made or issued to Applicant's indirect parent, Involta, LLC
("Involta"), in an aggregate amount not to exceed $147,000,000.
In support of that Application, Applicant states that the proceeds of the Loan will be used
to pay for, and partially reimburse general funds to: (a) in part, repay existing indebtedness for
borrowed money of Involta and its subsidiaries and affiliates; (b) in part, fund working capital
and general corporate pu{poses (including to effect certain acquisitions, direct and indirect
AppLrceuoN oF WESTEL, LLC (2020 LoaN GueRaNrv) - E><uur C
46220.0006. r27 7 4y)2.2
investments in other parties, capital expenditues, redemption of certain equity interests in
Involta's parent entity, and any other transaction not prohibited under the Loan agreement.
After examining the Application and supporting documents and being fully advised in the
premises, the Commission hereby finds that a hearing in this matler is not required, and that the
proposed transaction is consistent with the public interest and the Applicant's proper
performance of its duties as a public utility.
IT IS THEREFORE ORDERED that the Application of Westel, LLC for authority to
execute a Credit Agreement, Security Agteement, and related loan documents in favor of
Toronto Dominion (Texas) LLC and the other Lenders party thereto, in an amount not to exceed
$147,000,000 be, and the same is hereby granted.
DONE by Order of the Idatro Public Utilities Commission this day of
2020.
Paul Kj ellander, President
Eric Anderson, Commissioner
Kristine Raper, Commissioner
ATTEST:
Diane Hanian
Commission Secretary
AppucenoN oF WEsrEL, LLC (2020 LonN GunnlNrv)-Exuntr C
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HffiIBITD
NOTICE OF TTtrS APPLICATION
ApplrclrroN oF WEsTEL ,LLC (2020 LoaN GUARAI'{TY) - Exsntr D
46220.0006.127749?22
LEGAL NOTICE OF WESTEL, LLC'S
APPLrcArroN -8lJ;rffii,ff ARANTY LOAN
NOTICE IS HEREBY GIVEN that on Api|22,2020, Westel, LLC completed and filed
with the Idaho Public Utilities Commission an Application for authority Application for
authority to execute a Credit Agreement, Security Agreement, and related loan documents in
favor of Toronto Dominion (Texas) LLC and the other Lenders party thereto in connection with
certain loans to be made to Applicant's indirect parent company, Involtq LLC.
The Application is on file and is available for public inspection at the Idaho Public
Utilities Commission. Any person desiring to comment on said Application must file petitions or
protests with the Idaho Public Utilities Commission within fourteen (14) days of the filing date.
if no protests are received within this time limit, the Commission may consider the Application
and enter its Order without setting the matter for hearing. If written protests are filed with the
Commission within the time limit set, the Commission will consider the sarte, and in its
discretion, may set a hearing. Petitions or protests must be filed with: Diane Hanian, Secretary,
Idaho Public Utilities Commission, 11331 W. Chinden Boulevard, Building 8, Suite 201-A,
Boise,Idaho 83714.
Diane Hanian, Secretary
Idaho Public Utilities Commission
ApplrcanoN oF WEsrEL, LLC Q020 LonN GuanaNrv) - ExHBrr D
4A20.0006.t2774922..2