Exhibit 99.1
PLAN SUPPORT AGREEMENT
THIS PLAN SUPPORT AGREEMENT (this "Agreement") is dated as of April 10,
2003, among NTELOS Inc., Debtor in Possession, a Virginia corporation with its
principal place of business at 401 Spring Lane, Suite 300, P.O. Box 1990,
Waynesboro, Virginia 22980 (together with the reorganized company, the
"Company"), and the undersigned lenders (the "Supporting Lenders", together with
the Company the "Parties") party to the credit agreement dated as of July 26,
2000 among the Company, the subsidiary guarantors party thereto, the lender
parties party thereto, and Wachovia Bank, National Association as Administrative
Agent and Collateral Agent (as amended, the "Pre-Petition Credit Agreement").
RECITALS
WHEREAS, on March 4, 2003 (the "Petition Date"), the Company and certain of
its subsidiaries (collectively, the "Debtors") filed in the United States
Bankruptcy Court for the Eastern District of Virginia, Richmond Division (the
"Bankruptcy Court"), petitions for relief under chapter 11 of title 11 of the
United States Code (the "Chapter 11 Cases") and have continued in possession of
their assets as debtors in possession.
WHEREAS, the Debtors intend to consummate a financial restructuring
pursuant to a Conforming Plan (as defined below) to be filed in the Chapter 11
Cases;
WHEREAS, the Company, the Supporting Lenders and certain of the Company's
other material creditors have previously held discussions, subject to Rule 408
of the Federal Rules of Evidence, relating to the terms of a possible
pre-negotiated plan of reorganization;
WHEREAS, the discussions and negotiations among such parties have resulted
in preliminary agreement among the Company, the Supporting Lenders and certain
of the Company's other material creditors with respect to the terms of a
Conforming Plan
WHEREAS, the Company, the subsidiary guarantors party thereto, the lender
parties party thereto (the "DIP Lenders"), and Wachovia Bank, National
Association as Administrative Agent and Collateral Agent (the "Agent") have
entered into a Revolving Credit and Guaranty Agreement dated as of March 6, 2003
(as may be amended, the "DIP Facility") pursuant to which the DIP Lenders may
provide up to $35 million (the "DIP Commitment") of debtor-in-possession
financing to the Company;
WHEREAS, it is a condition precedent to the Company having full access to
the DIP Commitment that the Company provide written evidence acceptable to the
Agent in its sole discretion that at least $75 million of new unsecured
financing will be in place on the effective date of the Conforming Plan (the
"Plan Effective Date"), a portion of which shall be used to pay in full the
unpaid balance of the DIP Facility on the Plan Effective Date and to pay in full
(subject to the Company's right to reborrow) 100% of the revolving loans then
outstanding under the Pre-Petition Credit Agreement;
WHEREAS, as part of a Conforming Plan, the Company anticipates selling to
certain
investors (the "Purchasers") $75 million of 9.0% senior unsecured convertible
notes due 2013 of the reorganized Company conforming in all material respects
with the terms set forth on Exhibit A attached hereto (the "Convertible Notes");
WHEREAS, it is a condition precedent to the Purchasers' obligations to
purchase the Convertible Notes that the Purchasers have assurances that the
Supporting Lenders will make the Exit Facility (as hereinafter defined)
available to the Company on the Plan Effective Date; and
WHEREAS, on March 13, 2003, the United States Trustee appointed an official
committee of creditors holding unsecured claims in the Chapter 11 Cases pursuant
to ss. 1102(a)(1) of the Bankruptcy Code (the "Creditors Committee").
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, the Parties agree as follows:
SECTION 1. Proposal of a Conforming Plan. So long as no Termination
Event (as hereinafter defined) shall have occurred, the Company shall have the
following obligations pursuant to this Agreement:
(a) to have filed, solicited votes and conducted a confirmation
hearing before the Bankruptcy Court on or before September 30, 2003 on a
plan of reorganization that includes the terms set forth below (a
"Conforming Plan"):
(i) an exit financing facility in replacement of the Pre-Petition
Credit Agreement conforming in all material respects with the terms set
forth on Exhibit B, with such amendments, changes or modifications as may
be agreed upon by the Supporting Lenders in their sole discretion (the
"Exit Facility");
(ii) other than as set forth in (i) above, the cancellation of
all existing senior notes, subordinated notes, indentures, other debt for
borrowed money, preferred stock, common stock, options and other equity
securities of the Company (provided that some or all of the holders of the
foregoing may receive equity securities of the reorganized Debtors) other
than (A) the Exit Facility, (B) any outstanding hedge agreements entered
into in September 2000 with lender parties to the Pre-Petition Credit
Agreement (the "Permitted Hedge Agreements"), (C) the existing RUS/RTB
loans having an aggregate principal amount of approximately $6,712,000 (the
"Permitted RUS/RTB Loans"), (D) the existing FCC loans having an aggregate
principal amount of approximately $8,180,000 (the "Permitted FCC Loans"),
and (E) the existing JLL permitted capital leases having an aggregate net
present value of $10,149,000 and such other capital leases as may be agreed
upon by the Agent and the Company (the "Permitted Capital Leases");
(iii) on the Plan Effective Date, the reorganized Debtors shall
have no indebtedness for borrowed money other than (A) the Exit Facility,
(B) the Convertible Notes, (C) the Permitted Hedge Agreements, (D) the
Permitted RUS/RTB Loans, (E) the Permitted FCC Loans, and (F) the Permitted
Capital Leases;
(iv) the purchase by the Purchasers of not less than $75 million
of Convertible Notes on the Plan Effective Date; and
(v) the payment in full in cash of the DIP Facility and the
revolving loans under the Pre-Petition Credit Agreement (subject to
reborrowing under the Exit Facility) on the Plan Effective Date.
(b) to use all commercially reasonable efforts to expedite the
Chapter 11 Cases whenever possible and obtain confirmation and consummation
of a Conforming Plan as soon as reasonably practicable; and
(c) to refrain from taking any action that could reasonably be
expected to prevent, delay or impede the successful restructuring of the
Company in accordance with the terms of a Conforming Plan.
SECTION 2. Support of a Conforming Plan. So long as no Termination
Event shall have occurred, each Supporting Lender shall have the following
obligations pursuant to this Agreement:
(a) to refrain from proposing a plan of reorganization or
supporting, consenting to or participating in the formulation of any plan
of reorganization proposed by any other constituency in the Chapter 11
Cases other than a Conforming Plan;
(b) not to object to accurate disclosure by the Company of the
contents of this Agreement in a disclosure statement describing a
Conforming Plan; and
(c) to refrain from (i) objecting to confirmation of a Conforming
Plan or (ii) commencing any proceeding to oppose or alter a Conforming Plan
or any of the documents to implement the same in any way inconsistent with
this Agreement.
SECTION 3. Representations and Warranties of the Parties. Each Party
represents and warrants as to itself that the following statements are true,
correct and complete as of the date hereof:
(a) Corporate Power and Authority. It has all requisite corporate,
partnership, or limited liability company power and authority to enter into
this Agreement and to carry out the transactions contemplated by, and
perform its respective obligations under, this Agreement. The execution and
delivery of this Agreement and the performance of its obligations hereunder
have been duly authorized by all necessary corporate, partnership or
limited liability company action on its part.
(b) No Conflicts. The execution, delivery and performance by the
Parties of this Agreement does not and shall not: (i) violate any provision
of law, rule or regulation applicable to it or any of its subsidiaries;
(ii) violate its certificate of incorporation, bylaws, or other
organizational documents or those of any of its subsidiaries; or (iii)
conflict with, result in a breach of or constitute (with due notice or
lapse of time or both) a default under any material contractual obligation
to which it is a party.
(c) Governmental Consents. The execution, delivery and performance
by the Supporting Lenders or the Company of this Agreement does not and
shall not require any registration or filing with, consent or approval of,
or notice to, or other action to, with or by, any federal, state or other
governmental authority or regulatory body, other than the approval of the
Bankruptcy Court, in the case of the Debtors.
SECTION 4. Representations and Warranties of the Supporting Lenders.
Each Supporting Lender represents and warrants as to itself that it owns the
Revolving Loans, Tranche A Term Loans, Tranche B Term Loans, Tranche C Term
Loans and participations in Letters of Credit under the Pre-Petition Credit
Agreement as set forth on Exhibit C.
SECTION 5. Termination. This Agreement shall immediately terminate
upon the earlier to occur of (x) the Plan Effective Date or (y) the occurrence
of any of the following events (each a "Termination Event"):
(i) the Company shall fail to perform any of its obligations
hereunder or shall have breached any of the agreements set forth herein;
(ii) any of the subscription agreements of even date hereof under
which the Purchasers have agreed to purchase $75 million in the aggregate
of Convertible Notes shall have been amended, modified, supplemented or
terminated in a manner adverse to the Debtors, the Supporting Lenders or
the DIP Lenders without the prior written consent of the Supporting
Lenders;
(iii) a Conforming Plan and an accompanying disclosure statement (i)
containing the terms set forth in Section 1(a) above, (ii) providing for
the Exit Facility as the plan treatment of the Lenders under the
Pre-Petition Credit Agreement and (iii) in all other respects reasonably
acceptable to the Supporting Lenders, shall not have been filed with the
Bankruptcy Court on or before May 31, 2003 and a disclosure statement in
respect of the filed Conforming Plan and reasonably acceptable to the
Supporting Lenders shall not have been approved by the Bankruptcy Court on
or before August 15, 2003;
(iv) a Conforming Plan shall not have, on or before September 30,
2003, been confirmed by a final order of the Bankruptcy Court reasonably
acceptable to the Supporting Lenders;
(v) the Plan Effective Date and the "Closing Date" of the Exit
Facility (as defined on Exhibit B hereof) shall not have occurred on or
before October 15, 2003;
(vi) the Bankruptcy Court at any time denies confirmation of a
Conforming Plan (other than in a fashion that reasonably admits of or
leaves open the possibility that a Conforming Plan can still be confirmed
and effective prior to September 30, 2003);
(vii) there shall be any material modification of a Conforming Plan
(other than one that could not reasonably be expected to have an adverse
impact on the reorganized Debtors, the DIP Lenders or the lenders under the
Pre-Petition Credit Facility) not acceptable to the Supporting Lenders in
their sole discretion;
(viii) (i) an order, ruling or administrative decision of any state
regulatory authority is entered at any time that has the practical effect
of preventing the confirmation or consummation of a Conforming Plan or (ii)
a permanent injunction or other order shall have been entered by any
governmental entity that prevents the consummation of the transactions
contemplated by this Agreement or (iii) a statute, rule, regulation or
other law shall have been enacted by any governmental entity that would
prevent or make illegal the consummation of the transactions contemplated
by this Agreement;
(ix) any one of the Debtors or any committee appointed by the
Bankruptcy Court or the United States Trustee (a "Committee"): (i) files a
plan of reorganization or plan of liquidation that is not a Conforming
Plan, (ii) files any motion or other pleading materially inconsistent with
the confirmation and consummation of a Conforming Plan (other than as to
provisions thereof that could not reasonably be expected to have an adverse
impact on the reorganized Debtors, the DIP Lenders or the lenders under the
Pre-Petition Credit Facility), (iii) files a motion seeking, or the
Bankruptcy Court enters, an order appointing a trustee, responsible officer
or an examiner with powers beyond the duty to investigate and report, as
set forth in subclauses (3) and (4) of clause (a) of section 1106 of the
Bankruptcy Code, in the Chapter 11 Cases;
(x) an Event of Default shall have occurred under the DIP
Facility; or
(xi) there shall have occurred (i) any adverse change to, or any of
the Debtors default upon, the adequate protection obligations set forth in
the DIP Orders or (ii) any material adverse change in the business,
condition (financial or otherwise), operations, performance or properties
of the Debtors taken as a whole provided that no material adverse change
shall be deemed to exist solely as a result of (A) the commencement of the
Chapter 11 Cases, (B) the items specifically identified and reflected in
the financial projections made available to the Supporting Lenders prior to
the Petition Date, (C) the taking of any non-cash writedowns or impairment
charge-offs disclosed to the Supporting Lenders prior to the Petition Date,
(D) restructuring and reorganization costs expensed in the last quarter of
fiscal year 2002 and in fiscal year 2003 and (E) any going concern
qualification or explanation by the Company's auditors in connection with
the Company's consolidated financial statements for the fiscal year ending
December 31, 2002 or for any subsequent reporting period after the Petition
Date.
In event of the termination of this Agreement pursuant to this Section 5,
then, (i) the Parties hereto fully reserve any and all of their rights; (ii) the
provisions of this Agreement and all of the obligations of the Parties hereunder
shall be of no further force and effect and (iii) nothing contained herein shall
be deemed to be an admission or concession, or be in any way binding upon, any
of the Parties in any way, including but not limited to in connection with the
Chapter 11 Cases.
SECTION 6. No Solicitation of Plan Approval. The Company and each of
the Supporting Lenders agree that neither the negotiation nor the execution and
delivery of this Agreement is intended by the Company to be a solicitation of
the approval of any plan of reorganization within the meaning of section 1125 of
the Bankruptcy Code. No Supporting
Lender will be solicited before it has received a disclosure statement in
accordance with applicable law.
SECTION 7. Transfer or Acquisition of Claims, Interests and
Securities. This Agreement shall not in any way restrict the right or ability of
any Supporting Lender to sell, assign, transfer or otherwise dispose of any of
its claims against the Debtors or any of its affiliates under the Pre-Petition
Credit Agreement (the "Claims"), provided, however, that such transfer or
assignment shall not be effective unless and until the transferee or assignee
delivers to the transferor or assignor, the Administrative Agent and the
Company, at the time of such transfer or assignment pursuant to Section 9.07 of
the Pre-Petition Credit Agreement, a written agreement containing the provisions
set forth in the form attached hereto as Exhibit D pursuant to which such
transferee or assignee shall assume, and be bound by, the obligations of the
transferor or assignor hereunder in respect of the Claims transferred. In
addition, this Agreement shall in no way be construed to preclude any Supporting
Lender from acquiring additional Claims. However, any such additional Claims so
acquired shall automatically be deemed to be subject to the terms of this
Agreement.
SECTION 8. No Waiver of Participation. Each Party hereto expressly
acknowledges and agrees that, except as expressly provided in this Agreement,
nothing herein is intended to, or does, in any manner waive, limit, impair or
restrict the ability of any Supporting Lender to protect and to preserve all of
its rights, remedies and interests, including, without limitation, with respect
to any of its claims against the Debtors, or its full participation in any of
the Chapter 11 Cases. Nothing herein shall be deemed to affect any of the rights
and obligations of any of the Supporting Lenders in any other capacity they may
have in the Chapter 11 Cases or otherwise.
SECTION 9. Obligations Several and Not Joint. The obligations,
agreements, representations and warranties of each of the Supporting Lenders are
several and not joint. Any breach of this Agreement by any Supporting Lender
shall not result in liabilities for any other Supporting Lender.
SECTION 10. Consideration. It is hereby acknowledged by the Parties
that no consideration, other than the Company's obligations under this
Agreement, shall be due or paid to any Supporting Lender for its agreements
hereunder.
SECTION 11. Specific Performance. It is understood and agreed by the
Parties that money damages would not be an appropriate or sufficient remedy for
any breach of this Agreement by any Party and each non-breaching Party shall be
entitled to the sole and exclusive remedy of specific performance and injunctive
or other equitable relief, as a remedy for any such breach, and each Party
agrees to waive any requirement for the securing or posting of a bond in
connection with such remedy.
SECTION 12. Miscellaneous Provisions.
(a) The provisions of this Agreement, including the provisions
of this sentence, may not be amended, modified or supplemented, and waivers
or consents to
departures from the provisions hereof may not be given, without the written
consent thereto of the Company and the Supporting Lenders.
(b) This Agreement shall be binding upon, and inure to the
benefit of, the Parties. No rights or obligations of any Party under this
Agreement may be assigned or transferred to any other person or entity,
except as provided in Section 5 hereof. Nothing in this Agreement, express
or implied, shall give to any party or entity other than the Parties, any
benefit or any legal or equitable right, remedy or claim under this
Agreement.
(c) This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
(d) All notices, demands, requests, consents or other
communications to be given or delivered under or by reason of the
provisions of this Agreement shall be in writing and shall be deemed to
have been given when (i) delivered personally to the recipient, (ii)
telecopied to the recipient (with hard copy sent to the recipient by
reputable overnight courier service (charges prepaid) that same day) if
telecopied before 5:00 p.m. New York City time on a business day, and
otherwise on the next business day, or (iii) one business day after being
sent to the recipient by reputable overnight courier service (charges
prepaid) . Such notices, demands, requests, consents and other
communications shall be sent to the following addresses:
(a) if to the Company:
NTELOS Inc.
401 Spring Lane, Suite 300
P.O. Box 1990
Waynesboro, Virginia 22980
Attention: Michael B. Moneymaker
Telecopier: (540) 946-3595
with a copy to:
Hunton & Williams
Bank of America Plaza, Suite 4100
600 Peachtree Street, N.E.
Atlanta, Georgia 30308
Attention: David M. Carter, Esq.
Telecopier: (404) 888-4190
(b) if to the Supporting Lenders:
Wachovia Bank, National Association
301 South College Street
Charlotte, NC 28288-0537
Attention: Kathy Harkness
Telecopier: 704-383-6249
with a copy to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, NY 10017
Attention: Marshall S. Huebner, Esq.
Telecopier: 212-450-3099
or to such other address or to the attention of such other person as the
receiving party has specified by prior written notice to the sending party.
(e) This Agreement, including all Exhibits hereto and thereto,
contains the entire agreement of the Parties with respect to the subject
matter of this Agreement, and no Party shall be liable or bound to any
other Party in any manner by any representations, warranties, covenants and
agreements except as specifically set forth herein.
(f) This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original and all of which taken together
shall constitute one and the same instrument. Delivery of an executed
counterpart of a signature page to this Agreement by telecopier shall be
effective as delivery of an original executed counterpart of this
Agreement.
IN WITNESS WHEREOF, the Parties have duly executed and delivered this
Agreement as of the date first above written.
Company:
NTELOS INC., Debtor in Possession
By: ____________________________
Name:
Title:
Supporting Lenders:
[Lenders]
By: ____________________________
Name:
Title:
Exhibit A
Summary of Proposed Terms of Senior Convertible Notes
Issuer: Reorganized NTELOS Inc. ("Reorganized NTELOS"),
the successor to NTELOS Inc., Debtor in Possession
Issue: Senior Convertible Notes (the "Convertible Notes")
Principal Amount: $75 million
Ranking: Unsecured; otherwise pari passu with all other
senior debt.
Maturity: Ten (10) years
Interest: 9.0%, payable semi-annually in cash. Interest
shall accrue and be cumulative from the date of
issuance of the Convertible Notes.
Covenants: Customary for instruments of this type (including,
among others, certain incurrence covenants and
excluding financial maintenance covenants).
Optional Redemption: Redeemable by Reorganized NTELOS for the first two
(2) years at a redemption price of 109% of the
face value of note, for the third year at a
redemption price of 104.5% of the face value of
the note, and redeemable thereafter at the option
of Reorganized NTELOS at any time with 60 days
notice at a redemption price of 100% of the face
value of the note. Any redemption of the
Convertible Notes shall permit the holders to
exercise their conversion rights within a notice
of period of not less than 60 days.
Conversion: Convertible Notes will be convertible at holders'
option into New Common Stock.
Backstop Consideration: In consideration for purchasing the Convertible
Notes, the Purchasers will receive shares of New
Common Stock valued at 1.0% of the purchase price
provided by the Purchasers.
Expenses: The Company or Reorganized NTELOS shall pay all
out-of-pocket fees and expenses of Paul, Weiss,
Rifkind, Wharton & Garrison LLP, counsel to the
holders, reasonably incurred by the holders up to
$150,000 or such greater amount approved by the
Bankruptcy Court or consented to by the Agent and
the Creditors Committee in connection with the
negotiation, preparation, execution, delivery and
performance of the definitive Purchase Agreement
and related documents for the Convertible Notes.
Exhibit B
EXIT FACILITY
Summary of Terms and Conditions
I. Parties
Borrower: Ntelos Inc. ("Ntelos" or the "Borrower").
Guarantors: Each of the Borrower's present and future
domestic subsidiaries (the "Guarantors") will
guarantee (a "Guarantee") the Borrower's
obligations under the Facility, up to the
maximum amount possible without violating
applicable fraudulent conveyance laws.
Lead Arranger Wachovia Securities Inc. ("WSI").
and Bookrunner:
Administrative Agent: Wachovia Bank, National Association (in such
capacity, the "Administrative Agent").
Lenders: A syndicate of banks, financial institutions
and other entities, including Wachovia Bank,
National Association, arranged by the Lead
Arranger (collectively, the "Lenders") with any
institutions not currently lenders to the
Borrower reasonably acceptable to the Borrower.
Purpose: The proceeds of the Revolving Credit Loans
(defined below) shall be used for general
corporate purposes of the Borrower and its
subsidiaries in the ordinary course of business.
II. Revolving Credit Facility
Type and Amount of
Facility: Revolving credit facility (the "Revolving Credit
Facility") in the amount of $36,000,000 (the
loans thereunder, the "Revolving Credit Loans").
Availability: The Revolving Credit Facility shall be available
on a revolving basis during the period
commencing on the Closing Date and ending on
July 25, 2007 (the "Revolving Credit Termination
Date").
Letters of Credit: A portion of the Revolving Credit Facility not
in excess of $5 million shall be available for
the issuance of letters of credit (the
"Letters of Credit") by Wachovia Bank, National
Association (in such capacity, the "Issuing
Lender"). No Letter of Credit shall have an
expiration date after the earlier of (a) one
year after the date of issuance and (b) five
business days prior to the Revolving Credit
Termination Date, provided that any Letter of
Credit with a one-year tenor may provide for the
renewal thereof for additional one-year periods
(which shall in no event extend beyond the date
referred to in clause (b) above).
Maturity: The Revolving Credit Termination Date.
III. Term Loan Facility
Tranche A: Up to $50,000,000 term loan, to be reduced by
the aggregate amount of principal payments
received from the Borrower during the bankruptcy
case and applied to the Tranche A loan under the
Pre-Petition Credit Agreement. The Tranche A
commitment will expire at the close of business
on the Closing Date and the Tranche A loans will
mature on July 25, 2007.
Tranche B: Up to $99,500,000 term loan, to be reduced by
the aggregate amount of principal payments
received from the Borrower during the bankruptcy
case and applied to the Tranche B loan under the
Pre-Petition Credit Agreement. The Tranche B
commitment will expire at the close of business
on the Closing Date and the Tranche B loans will
mature on July 25, 2008.
Tranche C: Up to $75,000,000 term loan, to be reduced by
the aggregate amount of principal payments
received from the Borrower during the bankruptcy
case and applied to the Tranche C loan under the
Pre-Petition Credit Agreement. The Tranche C
commitment will expire at the close of business
on the Closing Date and the Tranche C loans will
mature on July 25, 2008.
IV. Security The Borrower's obligations under the Facility
and any hedging arrangements with any Lender or
affiliate of any Lender and each guarantee will
be secured by perfected liens on substantially
all assets of the Borrower or the relevant
guarantor, as the case may be, including, but
not limited to, receivables, inventory,
equipment, real estate, leases, licenses,
patents, brand names, trademarks, contracts,
securities and stock of domestic subsidiaries
and 65% of the stock of any first tier foreign
subsidiary.
V. Certain Payment Provisions
Fees and Interest Rates: As set forth on Annex I.
Scheduled Amortization
and Commitment Reductions: Tranche A, B & C loans will be amortized
according to the terms set forth in the
Pre-Petition Credit Agreement (defined below).
Contingent Mandatory
Prepayments: In addition to scheduled amortization payments,
the following amounts will be applied, first, to
prepay a proportionate part of the Tranche A
loans and, to the extent the Tranche B Lenders
and Tranche C Lenders so elect, the Tranche B
loans and Tranche C loans (pro rata on the basis
of the aggregate principal amount of loans of
each tranche subject to prepayment), second, to
prepay any remaining Tranche B loans and Tranche
C loans (once all the Tranche A loans have been
paid in full) and, third, to reduce the Revolving
Credit commitment (and to repay and/or cash
collateralize exposure under the Revolving Credit
Facility in an amount equal to the excess of such
exposure over the Revolving Credit commitment as
reduced).
1. 50% of excess cash flow for any fiscal year
(discuss revised definition of excess cash flow).
2. A percentage of the net proceeds from asset
sales by the Borrower and its subsidiaries equal
to (i) 25% with respect to the first $20,000,000
of aggregate net proceeds and (ii) 75% with
respect to aggregate net proceeds in excess of
$20,000,000.
3. 100% of the net proceeds from the issuance of
indebtedness by the Borrower and its subsidiaries
(other than the (i) amounts raised through the
issuance of Convertible Notes on the Closing Date
that are in excess of the Revolver outstandings
on the Closing Date and (ii) permitted capital
leases).
The above mandatory prepayments will be applied
in reverse order to scheduled amortization of
term loans of such tranche held by lenders in
such tranche on a pro-rata basis.
Optional Prepayments and
Commitment Reductions: Loans may be prepaid and commitments may be
reduced by the Borrower in a minimum amount of
$500,000 or integral multiples of $100,000.
Optional prepayments of the term loans will be
applied, first, to prepay the Tranche A loans
and, to the extent the Tranche B Lenders and
Tranche C Lenders so elect, the Tranche B loans
and the Tranche C loans, and, second, to prepay
any remaining Tranche B loans or Tranche C loans
(once all Tranche A loans have been paid in
full). Optional prepayments of term loans of any
tranche held by any Lender will be applied to
subsequent scheduled amortization on a pro-rata
basis.
VI. Certain Conditions
Initial Conditions: The availability of the Facility shall be
conditioned upon satisfaction of certain
conditions substantially similar to those set
forth in the $325 million credit agreement dated
as of
July 26, 2000 among Ntelos, as borrower, Wachovia
Bank, National Association, as successor
administrative agent, collateral agent and
issuing bank, and the lenders and guarantors
party thereto (as amended, the "Pre-Petition
Credit Agreement"), with such modifications as
the parties shall agree. In addition,
availability of the Facility will be subject to
(a) each lender with Working Capital Commitments
(as defined in the Pre-Petition Credit Agreement)
having agreed to provide commitments under the
Revolving Credit Facility equal to their pro-rata
share of the Working Capital Facility (as defined
in the Pre-Petition Credit Agreement) (b) the
execution and delivery of satisfactory definitive
financing documentation with respect to the
Credit Facility (the "Credit Documentation"), (c)
the sale by the Borrower of senior unsecured
convertible notes (the "Convertible Notes") with
an aggregate principal amount of not less than
$75,000,000, on terms (i) reasonably satisfactory
to the Administrative Agent and (ii) consistent
with the terms therefor set forth in the Plan
Support Agreement dated April 10, 2003, (d) the
effectiveness of a plan of reorganization that
is: (i) acceptable to the Administrative Agent in
its sole discretion as to the treatment of the
lenders under the Pre-Petition Credit Agreement
and is otherwise reasonably acceptable to the
Administrative Agent, (ii) the subject of a
confirmation order that has become a final order,
is acceptable to the Administrative Agent in its
sole discretion and provides for the consummation
of the transactions contemplated thereby and
(iii) consistent with terms therefor set forth in
the Plan Support Agreement dated April 10, 2003,
(e) cash on the balance sheet on the Closing Date
minus the sum of all unpaid administrative
claims, priority claims and secured claims (other
than (x) claims under the Pre-Petition Credit
Agreement, Permitted Hedge Agreements, Permitted
RUS/RTB Loans, Permitted FCC Loans and Permitted
Capital Leases and (y) obligations not due and
payable as of the Effective Date that are
incurred in the ordinary course of operations
including under any assumed leases or pension
plans) that are allowed, expected to be allowed
or otherwise expected to be due and payable,
shall not be less than $5 million and (f) payment
in full of the Reinstatement Fee described in
Annex I hereto. For the purpose hereof, the
"Closing Date" shall be the date upon which all
such conditions precedent shall be satisfied.
On-Going Conditions: The making of each extension of credit shall be
subject to conditions substantially similar to
those set forth in the Pre-Petition Credit
Agreement, with such modifications as the parties
shall agree.
VII. Certain Documentation Matters
Representations and
Warranties, Covenants,
Events of Default: The Credit Documentation shall contain
representations, warranties, covenants and events
of default substantially similar
to those set forth in the Pre-Petition Credit
Agreement, with such modifications as the parties
may agree including (i) the amount of Investments
(as defined in the Pre-Petition Credit Agreement)
made by the Borrower and the Guarantors shall be
not greater than the amount of net proceeds from
asset sales permitted to be retained by the
Borrower; provided, that in no event may the
Borrower or Guarantors make any individual
Investment exceeding $2.5 million or make
aggregate Investments exceeding (y) $10 million
in any twelve month period or (z) $20 million
prior to June 25, 2008; provided further, that
aggregate Investments made by the Borrower or
Guarantors resulting in the ownership of less
than 51% of an entity's equity interests shall
not exceed $1 million in any twelve month period
and (ii) that the maximum cash balance covenant
contained in the Pre-Petition Credit Agreement
shall not apply so long as there are no
outstanding borrowings under the Revolving
Facility.
Financial Covenants: As set forth on Annex II.
Other Documentary
Matters: The Credit Documentation shall contain terms as
to voting, assignments, yield protection,
expenses and indemnification substantially
similar to those set forth in the Pre-Petition
Credit Agreement, with such modifications as the
parties shall agree.
Governing Law and Forum: State of New York.
Counsel to the
Administrative Agent
and the Lead Arranger: Davis Polk & Wardwell.
Annex I
Interest and Certain Fees
Interest Rate Options: The Borrower may elect that the Loans comprising
each borrowing bear interest at a rate per annum
equal to:
[X] the Base plus the Applicable Margin; or
[X] the Eurodollar Rate plus the Applicable
Margin.
As used herein:
"Base Rate" means the highest of (i) the rate of
interest publicly announced by the Administrative
Agent as its prime rate in effect at its principal
office in Charlotte, North Carolina (the "Prime
Rate"), and (ii) the federal funds effective rate
from time to time plus 0.5%.
"Eurodollar Rate" means the rate at which eurodollar
deposits in the London interbank market for one
month, two months, three months, or, if commercially
available to all Lenders, six months (as selected by
the Borrower) are quoted on the Telerate screen as
adjusted for statutory reserve requirements for
eurocurrency liabilities.
"Applicable Margin" means the percentage margin
determined in accordance with the Pricing Schedule.
Interest Payment Dates: In the case of Loans bearing interest based upon the
Base Rate ("Base Rate Loans"), monthly in arrears.
In the case of Loans bearing interest based upon the
Eurodollar Rate ("Eurodollar Loans"), on the last
day of each relevant interest period.
Commitment Fees: The Borrower shall pay a fee calculated at 1/2 of 1%
per annum on the average daily amount of the unused
Revolving Credit Facility, payable quarterly in
arrears.
Letter of Credit Fees: The Borrowers shall pay a commission on all
outstanding Letters of Credit at a per annum rate
equal to the Applicable Margin then in effect with
respect to Eurodollar Loans on the face amount of
each such Letter of Credit.
A fronting fee equal to 1/4 of 1% per annum on the
face amount of each Letter of Credit shall be
payable quarterly in arrears to the Issuing Lender
for its own account. In addition, customary
administrative, issuance, amendment, payment and
negotiation charges shall be payable to the Issuing
Lender for its own account.
Reinstatement Fee: On the Closing Date, Borrower shall pay to the
Administrative Agent, for the benefit of the lenders
under the Revolver, Tranche A and Tranche B loans a
reinstatement fee in an amount equal to 0.25% (the
"Fee Rate") on the aggregate Revolver, Tranche A and
Tranche B loans.
Default Rate: If a Default has occurred and is continuing, all
amounts due under the Facility shall bear interest
at 2% above the rate otherwise applicable thereto.
Rate and Fee Basis: All per annum rates shall be calculated on the basis
of a year of 360 days (or 365/366 days, in the case
of Base Rate Loans the interest rate payable on
which is then based on the Prime Rate) for actual
days elapsed.
Pricing Schedule
- -----------------------------------------------------------------------------------------------------
Revolving Loans Tranche A Loans Tranche B Loans Tranche C Loans
- -----------------------------------------------------------------------------------------------------
Eurodollar Loans 3.25% 3.25% 4.00% 2.75%
- -----------------------------------------------------------------------------------------------------
Base Rate Loans 2.25% 2.25% 3.00% 1.75%
- -----------------------------------------------------------------------------------------------------
On and after the day that is 3 months after closing, the margins indicated above
shall be reduced by 25 bps for each of the Revolving, Tranche A and Tranche B
Loans when and during such time as the Borrower's total leverage ratio is less
than 3.0:1.0. Such margin reduction shall take effect upon receipt by the
Administrative Agent of a quarterly or annual report accompanied by a
certificate of the Chief Financial Officer attesting that the Borrower's total
leverage ratio is less than 3.0:1.0.
Annex II
Proposed Covenants under Exit Facility
- -----------------------------------------------------------------------------------------------------------------
EBITDA / (Taxes +
Minimum Maximum Senior Leverage Leverage Interest Coverage Interest
EBITDA CapEx Ratio Ratio Ratio + Sch Amort)
------------------------------------------------------------------------------------------------
9/30/03 74,000 3.50x 4.50x 2.50x 1.50x
12/31/03 72,000 70,000 3.50x 4.50x 2.50x 1.50x
3/31/04 72,000 3.50x 4.25x 2.75x 1.50x
6/30/04 75,000 3.25x 4.25x 2.75x 1.50x
9/30/04 3.00x 4.00x 2.75x 1.75x
12/31/04 70,000 2.75x 4.00x 2.75x 1.75x
3/31/05 2.75x 3.50x 3.00x 1.75x
6/30/05 2.75x 3.50x 3.00x 1.75x
9/30/05 2.75x 3.50x 3.00x 1.75x
12/31/05 70,000 2.75x 3.50x 3.00x 2.00x
12/31/06 60,000 2.50x 3.50x 3.00x 2.25x
12/31/07 60,000 2.50x 3.50x 3.00x 2.50x
12/31/08 55,000 2.50x 3.50x 3.00x 0.50x
Notes:
1) Minimum EBITDA calculated on an LTM basis and excludes results from Cable
Business for 3Q & 4Q 2003.
2) Maximum CapEx calculated on an annual basis.
3) Senior Leverage Ratio includes Bank Debt, R&B, FCC and Capital Leases over
LTM EBITDA.
4) Leverage Ratio includes debt in Senior Leverage Ratio plus $75MM in new
Convertible Notes over LTM EBITDA.
5) Calculated on a buildup basis from emergence date and includes only cash
interest assuming the $75MM Convertible Note interest is paid semi-annually on
6/30 and 12/31.
6) Calculated on a buildup basis from emergence date.