EXHIBIT 99.2
SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT (this "Agreement") is dated as of April 10,
2003, by and between 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 purchasers listed on Schedule I (each a, "Purchaser" and
collectively, the "Purchasers").
RECITALS
WHEREAS, on March 4, 2003, 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 plan of reorganization (the "Plan") to be filed in the Chapter 11
Cases;
WHEREAS, the Company, the subsidiary guarantors party thereto, the lender
parties party thereto (the "Lenders") and Wachovia Bank, National Association
(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 Lenders have agreed to 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 evidence to the Agent that at least
$75 million of new financing will be in place on the effective date of the 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 under the Exit Facility) the
revolving loans then outstanding under 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");
WHEREAS, upon the terms and subject to the conditions set forth in the Plan
Support Agreement, dated as of April 10, 2003 and attached as Exhibit A hereto
(the "Plan Support Agreement"), among the Company and the lenders party thereto,
the Company and such lenders have reached certain agreements with respect to a
Plan (and disclosure statement) that includes the following terms (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 (the "Exit Facility"); (ii) 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) the
outstanding hedge agreements dated as of September 14, 2000 and September 15,
2000 with Wachovia Securities and Sun Trust Equitable Securities, respectively
(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
capital leases having an aggregate net present value of approximately
$10,149,000 and such other capital leases as may be agreed upon by the
Purchasers and the Company (the "Permitted Capital Leases"); (iii) on the Plan
Effective Date, the reorganized Debtors have no indebtedness for borrowed money
other than (A) the Exit Facility, (B) the Convertible Notes (as defined below),
(C) the Permitted Hedge Agreements, (D) the Permitted RUS/RTB Loans, (E) the
Permitted FCC Loans, and (F) the Permitted Capital Leases; and (iv) the purchase
by the Purchasers, severally and not jointly, on the Plan Effective Date of not
less than $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 C attached hereto (the "Convertible Notes");
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 (S) 1102(a)(1) of the Bankruptcy Code (the "Creditors Committee");
WHEREAS, the Purchasers are willing to commit that they will purchase,
severally and not jointly, from the Company not less than $75 million in
aggregate principal amount of Convertible Notes upon the terms and conditions
set forth in this Agreement (the "Investment");
WHEREAS, the purchase by the Purchasers of the Convertible Notes is
fundamental to the Debtors' efforts to effect a confirmable Plan; and
WHEREAS, the Agent on behalf of the Lenders is relying on the commitments
of each of the Purchasers set forth herein in making the full DIP Facility
available to the Company and is an intended third party beneficiary of this
Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, the parties hereto agree as follows:
SECTION 1. Subscription.
(a) Subject to the terms and conditions of this Agreement, at the
Closing (as defined below), the Company shall sell to each Purchaser, and
each Purchaser shall purchase from the Company, Convertible Notes in the
aggregate principal amount set forth opposite such Purchaser's name on
Schedule I.
(b) Subject to the terms and conditions of this Agreement, at the
Closing, the Company shall issue to each Purchaser, for no additional
consideration, shares of the common stock of the reorganized Company (the
"New Common Stock") having an aggregate value equal to the value set forth
opposite such Purchaser's name on Schedule I, which represents 1.0% of the
aggregate principal amount of the Convertible Notes purchased by such
Purchaser (such shares of New Common Stock, together with the Convertible
Notes, the "Securities").
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(c) Notwithstanding anything to the contrary set forth herein,
if any Purchaser shall fail at the Closing to purchase from the Company
Convertible Notes in the aggregate principal amount set forth opposite such
Purchaser's name on Schedule I (such Purchaser being referred to as a
"Defaulting Purchaser"), the Company shall offer to each Purchaser who is
not a Defaulting Purchaser (the "Non-Defaulting Purchasers") the right (but
without any obligation) to increase further the aggregate principal amount
of Convertible Notes (and number of shares of New Common Stock) that such
Non-Defaulting Purchaser agreed to purchase as set forth opposite such
Non-Defaulting Purchaser's name on Schedule I, pro rata in accordance with
the aggregate principal amount of Convertible Notes (and number of shares
of New Common Stock) that all of the Non-Defaulting Purchasers agreed to
purchase as set forth opposite such Non-Defaulting Purchasers' names on
Schedule I (with the right to increase proportionately their respective
shares in the event that one or more of the Non-Defaulting Purchasers
declines such offer), in an aggregate amount equal to the aggregate
principal amount of Convertible Notes (and number of shares of New Common
Stock) that such Defaulting Purchaser failed to purchase.
(d) Subject to the terms and conditions of this Agreement, the
closing of the purchase and sale of the Securities (the "Closing") shall
take place on the Plan Effective Date.
SECTION 2. Representations and Warranties.
(a) The Company represents and warrants to each Purchaser that
(i) the Company has the requisite corporate power and authority to enter
into this Agreement and, upon the satisfaction of the condition set forth
in Section 3(c), will have the requisite corporate power and authority to
consummate the transactions contemplated hereby to be consummated by the
Company, (ii) the execution and delivery of this Agreement by the Company
have been and, upon the satisfaction of the condition set forth in Section
3(c), the consummation by the Company of the transactions contemplated
hereby will be, duly authorized by all necessary corporate action of the
Company, (iii) this Agreement has been duly and validly executed and
delivered by the Company, (iv) this Agreement constitutes a valid and
binding agreement of the Company enforceable against the Company in
accordance with its terms and (v) the execution and delivery of this
Agreement by the Company does not and, upon the satisfaction of the
condition set forth in Section 3(c), the consummation by the Company of the
transactions contemplated hereby will 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.
(b) Each Purchaser represents and warrants, severally and not
jointly, to the Company as follows:
(a) Such Purchaser has sufficient knowledge and
experience in financial and business matters and information relating
to the business,
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operations, financial condition and prospects of the Company to
evaluate the merits and risks of its investment in the Securities and
in the New Common Stock issuable upon conversion of the Convertible
Notes (the Securities and such New Common Stock together, the
"Investment Securities"). Such Purchaser is an "accredited investor"
within the meaning of Rule 501(a) of Regulation D promulgated under
the Securities Act of 1933, as amended (the "Securities Act"). Such
Purchaser will acquire the Investment Securities solely for its own
account and for investment and not with a view to, or for sale in
connection with, the distribution of the Investment Securities in any
transaction that would be in violation of the Securities Act or any
applicable state securities laws. Such Purchaser understands that the
Investment Securities have not been and will not be registered under
the Securities Act or any applicable state securities laws and that
the Securities may be resold, pledged, hypothecated, transferred or
otherwise disposed of only if registered under the Securities Act and
applicable state securities laws or if an exemption from such
registration requirements is available, and subject, nevertheless, to
the disposition of its property being at all times within its control.
(b) (I) Such Purchaser has the requisite corporate,
partnership or limited liability company power and authority to enter
into this Agreement and to consummate the transactions contemplated
hereby to be consummated by such Purchaser, (II) the execution and
delivery of this Agreement by such Purchaser and, upon the
satisfaction of the condition set forth in Section 3(c), the
consummation by such Purchaser of the transactions contemplated hereby
have been duly authorized by all necessary corporate, partnership or
limited liability company action of such Purchaser, (III) this
Agreement has been duly and validly executed and delivered by such
Purchaser, (IV) this Agreement constitutes a valid and binding
agreement of such Purchaser enforceable against such Purchaser in
accordance with its terms, (V) the execution and delivery of this
Agreement by such Purchaser does not and, upon the satisfaction of the
condition set forth in Section 3(c), the consummation by such
Purchaser of the transactions contemplated hereby will not (A) violate
any provision of law, rule or regulation applicable to it or any of
its subsidiaries, (B) violate its certificate of incorporation,
bylaws, or other organizational documents or those of any of its
subsidiaries, or (C) 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 and (VI)
such Purchaser has, and will have as of the Closing, sufficient funds
to pay the purchase price for all of the Convertible Notes that it is
obligated to purchase pursuant to Section 1.
SECTION 3. Conditions to Obligations of the Purchasers.
The obligations of the Purchasers to consummate the transactions
contemplated by this Agreement are subject to the satisfaction or waiver at
or prior to the Closing Date of the following conditions:
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(a) the Company shall not have failed to perform any of its obligations
hereunder and shall not have breached any of the agreements set forth herein;
(b) a Conforming Plan and an accompanying disclosure statement (i)
containing the terms set forth in the recitals hereto, (ii) providing for the
Exit Facility as the plan treatment of Lenders under the Pre-Petition Credit
Agreement as set forth on Exhibit B and (iii) in all other respects reasonably
acceptable to the Purchasers, shall 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 Purchasers shall have been
approved by the Bankruptcy Court on or before August 15, 2003;
(c) a Conforming Plan shall have been confirmed by a final order of the
Bankruptcy Court (which final order shall be reasonably acceptable to the
Purchasers) on or before September 30, 2003 and the Plan Effective Date shall
have occurred on or before October 15, 2003;
(d) the Conforming Plan shall provide (i) for 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) the Permitted Hedge Agreements, (C) the Permitted RUS/RTB Loans, (D) the
Permitted FCC Loans, and (E) Permitted Capital Leases, and (ii) that 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) Permitted Capital Leases;
(e) the Bankruptcy Court shall not have denied at any time 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);
(f) there shall not have been 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 or the Purchasers) not acceptable to the
Purchasers in their sole discretion;
(g) no Debtor and no committee appointed by the Bankruptcy Court or the
United States Trustee (a "Committee"): (i) shall have filed a plan of
reorganization or plan of liquidation that is not a Conforming Plan, (ii) shall
have filed 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 or the Purchasers), (iii) shall have filed a motion seeking,
and the Bankruptcy Court shall not have entered, an order appointing a trustee,
responsible officer or an examiner with powers beyond the
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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;
(h) no Event of Default shall have occurred under the DIP Facility that
was not waived by the Lenders;
(i) the Plan Support Agreement shall have been entered into by and
among the Company and the supporting lenders parties thereto on or before the
date hereof and shall not have been amended, modified or supplemented in a
manner adverse to the Company or the Purchasers without the prior written
consent of the Purchasers;
(j) the amendment and restatement of or substitution for the
Pre-Petition Credit Facility with the Exit Facility, on terms conforming in all
material respects with the terms set forth on Exhibit B attached hereto, which
shall have become effective on the Plan Effective Date;
(k) the Convertible Notes to be purchased and sold at the Closing shall
conform in all material respects with the terms set forth on Exhibit C;
(l) the Company and the Purchasers shall have executed and delivered
such other documents as are customary for transactions such as the Investment,
including, without limitation, a purchase agreement (the "Purchase Agreement")
containing customary representations, warranties, covenants (including, without
limitation, covenants of the Company providing for securities registration
rights with respect to the Securities) and closing conditions (with customary
exceptions relating to the filing and continuation of the Chapter 11 Case) which
documents, when delivered, shall be in form and substance satisfactory to the
Purchasers and the Company;
(m) no preliminary or permanent injunction or other order by any
governmental entity which prevents the consummation of the transactions
contemplated by this Agreement shall have been issued and remain in effect;
(n) no statute, rule, regulation or other law shall have been enacted
by any governmental entity which would prevent or make illegal the consummation
of the transactions contemplated by this Agreement;
(o) all necessary or required consents, orders, approvals or
authorizations of, notifications or submissions to, filings with, licenses or
permits from, or exemptions or waivers by, any governmental entity, stock
exchange or other person shall have been made or obtained, except where the
failure by a party to make or obtain any of the foregoing would not have a
material adverse effect on (i) the properties, assets, operations, business,
prospects, results of operations or financial condition of the Debtors, taken as
a whole, or (ii) such party's ability to perform its obligations under this
Agreement;
(p) the Purchasers shall have purchased, severally and not jointly, at
least $65,000,000 in aggregate principal amount of Convertible Notes upon the
terms and subject to the conditions set forth herein; and
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(q) since December 31, 2002, there shall not have occurred any event,
there shall not exist any condition or set of circumstances and there shall have
been no damage to or destruction or loss of any property or asset of the Debtors
that, individually or in the aggregate, could have or has had a material adverse
effect on the properties, assets, operations, business, prospects, results of
operations or financial condition of the Debtors, taken as a whole, or on the
ability of the Company to perform its obligations under this Agreement (a
"Material Adverse Change"); provided, however, that no Material Adverse Change
shall be deemed to exist solely as a result of (i) the commencement of the
Chapter 11 Cases, (ii) the items specifically identified and reflected in the
financial projections made available to the Purchasers prior to the date hereof,
(iii) the taking of any non-cash writedowns or impairment charge-offs disclosed
in writing to the Purchasers prior to the date hereof, (iv) restructuring and
reorganization costs expensed in the last quarter of fiscal year 2002 and in
fiscal year 2003 or (v) any going concern qualification or explanation by the
Company's auditors in connection with the Company's consolidated financial
statements for the fiscal year ended December 31, 2002 or for any subsequent
reporting period after the Petition Date.
SECTION 4. Covenants.
(a) At any time or from time to time after the date of this Agreement,
each party agrees to execute and deliver any further instruments or documents
and to take, or cause to be taken, and to do, or cause to be done, and to assist
and cooperate with the other party in doing, all things necessary, proper,
desirable or advisable to evidence or effectuate the consummation of the
transactions contemplated by this Agreement and otherwise to carry out the
intent of the parties hereunder.
(b) The Company and each of the Purchasers agree that the
confidentiality agreement previously entered into by the Company and such
Purchaser (as amended, modified or supplemented from time to time) shall remain
in full force and effect between the Company and such Purchaser pursuant to the
terms thereof.
(c) The Company agrees to pay all out-of-pocket fees and expenses of
Paul, Weiss, Rifkind, Wharton & Garrison LLP, counsel to the Purchasers,
reasonably incurred by the Purchasers in connection with this Agreement and the
consummation of the transactions contemplated hereby up to $150,000 or such
greater amount as may be approved by the Bankruptcy Court or consented to by the
Agent and the Creditors Committee.
SECTION 5. Termination.
(a) This Agreement shall automatically terminate upon the termination
of the Plan Support Agreement.
(b) In event of the termination of this Agreement pursuant to this
Section 5, then, (i) each of the Purchasers and the Company fully reserves any
and all of its rights; (ii) the provisions of this Agreement and all of the
obligations of each of the Purchasers and the Company shall be of no further
force and effect and (iii) nothing
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contained herein shall be deemed to be an admission or concession, or be in
any way binding upon, any of the Purchasers or the Company in any way,
including but not limited to in connection with the Chapter 11 Cases.
SECTION 6. No Waiver of Participation. Each of the Company and each of
the Purchasers 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 of the Purchasers 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 Purchasers in
any other capacity it may have in the Chapter 11 Cases or otherwise.
SECTION 7. 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
(i) the prior written consent thereto of the Company and the Purchasers who
have committed to purchase at least 66 2/3% aggregate principal amount of
Convertible Notes, except that any amendment, modification or supplement to
the terms of the Convertible Notes set forth on Exhibit C shall require the
consent thereto of the Company and each of the Purchasers, and (ii) if such
amendments, modifications, supplements, waivers or consents have an adverse
impact on the Company or the Lenders, the prior written consent thereto of
the Agent for the benefit of the Lenders as intended third party
beneficiaries. The Company agrees to provide advance notice of and,
promptly following execution, a copy of any such amendment, modification,
supplement, waiver or consent specified in clause (i) of this Section 7(a)
to the Agent.
(b) Except as set forth in the next succeeding sentence, neither
this Agreement nor any rights which may accrue to either party hereunder
may be transferred or assigned without the prior written consent of the
other party. From and after the date of this Agreement, each of the
Purchasers shall have the right, without the prior written consent of the
Company, to assign all or a portion of its rights, obligations and
liabilities under this Agreement to a single direct or indirect wholly
owned subsidiary of such Purchaser or to another Purchaser, provided that
no such assignment shall relieve such Purchaser of its obligations or
liabilities under this Agreement. As a condition of any such assignment to
such subsidiary of such Purchaser, such assignee subsidiary shall be deemed
to have made all of the representations and warranties of such Purchaser
set forth in this Agreement. From and after the effective date of any such
assignment, all references in this Agreement to such Purchaser shall be to
such assignee subsidiary or such Purchaser unless the context requires
otherwise. Nothing in this Agreement, express or implied, shall give to any
party or entity, other than the Company, each of the Purchasers and the
Agent for the benefit of the Lenders, any benefit or any legal or equitable
right, remedy or claim under this Agreement.
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(c) 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 parties at 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
Telecopier: (404) 888-4190
Attention: David M. Carter, Esq.
with a copy to:
Hunton & Williams
Riverfront Plaza, East Tower
951 East Byrd Street
Richmond, Virginia 23219
Attention: J. Waverly Pulley, III
Telecopier: (804) 788-8218
with a copy to:
The Creditors Committee
c/o Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Telecopier: (212) 403-2000
Attention: Richard G. Mason, Esquire
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(b) if to any of the Purchasers:
To the address or telecopier set forth
opposite such Purchaser's name on
Schedule I
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, New York 10019-6064
Attention: Bruce A. Gutenplan, Esq. and
Andrew N. Rosenberg, Esq.
Telecopier: (212) 757-3990
(c) if to the Agent:
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
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.
(d) This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts
executed and to be performed wholly within such state.
(e) Any process against either party in, or in connection with,
any suit, action or proceeding arising out of or relating to this Agreement
or the transactions contemplated hereby may be served personally or by
certified mail pursuant to the notice provision set forth in Section 7(c)
with the same effect as though served on it personally. Each party hereby
irrevocably submits in any suit, action or proceeding arising out of or
relating to this Agreement or any of the transactions contemplated hereby
to the exclusive jurisdiction and venue of the Bankruptcy Court and
irrevocably waives any and all objections to exclusive jurisdiction and
review of venue that any such party may have under the laws of the
Commonwealth of Virginia or the United States of America.
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Without limiting the other remedies, this Agreement shall be enforceable by
specific performance.
(f) Each of the Company and each of the Purchasers hereby waives
any rights it may have to a trial by jury in respect of any suit, action or
proceeding directly or indirectly arising out of, under or in connection
with this Agreement.
(g) The descriptive headings in this Agreement are for
convenience of reference only and shall not be deemed to alter or affect
the meaning or interpretation of any provision of this Agreement. The
parties to this Agreement have participated jointly in the negotiation and
drafting of this Agreement. If an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties hereto, and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any
of the provisions of this Agreement.
(h) Whenever required by the context, any pronoun used in this
Agreement shall include the corresponding masculine, feminine or neuter
forms, and the singular forms of nouns, pronouns and verbs shall include
the plural, and vice versa.
(i) This Agreement, including Schedule I, Exhibit A, Exhibit B
and Exhibit C hereto, contains the entire agreement of the parties with
respect to any subject matter of this Agreement, and no party shall be
liable or bound to the other party in any manner by any representations,
warranties, covenants and agreements except as specifically set forth
herein.
(j) 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.
(k) Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be invalid or
unenforceable in any respect, such invalidity or unenforceability shall not
render invalid or unenforceable any other provision of this Agreement.
(l) This Agreement, the agreements referred to herein, and each
other agreement or instrument entered into in connection herewith or
therewith or contemplated hereby or thereby, and any amendments hereto or
thereto, to the extent signed and delivered by means of a facsimile
machine, shall be treated in all manner and respects as an original
agreement or instrument and shall be considered to have the same binding
legal effect as if it were the original signed version thereof delivered in
person. At the request of any party hereto or to any such agreement or
instrument, the other parties hereto or thereto shall re-execute original
forms thereof and deliver them to the other party. No party hereto or to
any such agreement or instrument shall raise the use of a facsimile machine
to deliver a signature or the fact that any signature or agreement or
instrument was transmitted or communicated through the use of a facsimile
machine as a
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defense to the formation or enforceability of a contract, and each party
forever waives any such defense.
(m) This Agreement shall be binding upon each party hereto and
such party's successors and permitted assigns.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the date first above written.
Company
NTELOS INC., Debtor in Possession
By:__________________________________
[Purchasers]
By:__________________________________
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Exhibit A
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 (S) 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 re0verse 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:
the Base plus the Applicable Margin; or
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.
EXHIBIT B
Outline of Certain Key Terms of Exit Facility
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:
the Base plus the Applicable Margin; or
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.
EXHIBIT C
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 other covenants, certain incurrence
covenants but excluding any 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