Delaware |
1-32362 |
52-2126395 |
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(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
o |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item
1.01. |
Entry into a Material Definitive Agreement. |
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lenders (the Consenting Term Loan Lenders) representing all of the outstanding principal term loan obligations under that certain Second Amended and Restated Credit Agreement, dated as of October 20, 2008 (the Credit Agreement), by and among Otelco, as borrower, the other credit parties signatory thereto, as credit parties, the lenders signatory thereto from time to time, as lenders, General Electric Capital Corporation (the Agent), as administrative agent, agent and lender, GE Capital Markets, Inc., as lead arranger and sole bookrunner, and CoBank, ACB, as co-lead arranger and lender; and |
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lenders (the Consenting Revolving Loan Lenders and, together with the Consenting Term Loan Lenders, the Plan Support Parties) representing all of the revolving loan commitments under the Credit Agreement. |
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approximately $162 million of outstanding principal term loan obligations under the Credit Agreement will be reduced to a maximum of $142 million (or such higher amount that is agreed to in writing by the Agent and the holders of more than 50% in number and 66 2/3% in amount of the outstanding principal term loan obligations under the Credit Agreement) through a cash payment; |
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the maturity of the outstanding principal term loan obligations under the Credit Agreement will be extended to April 30, 2016; |
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the holders of the outstanding principal term loan obligations under the Credit Agreement will receive their pro rata share of Otelcos new Class B common stock, which new Class B common stock will represent 7.5% of the total economic and voting interests in Otelco immediately following the consummation of the Restructuring, subject to dilution on account of the issuance of equity interests in Otelco pursuant to a management equity plan to be adopted by Otelco concurrently with the consummation of the Restructuring (the Management Equity Plan); |
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certain revolving loan commitments under the Credit Agreement will be reinstated, with availability of up to $5 million; |
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the outstanding Notes, including the outstanding Notes constituting part of Otelcos Income Deposit Securities (IDSs), will be cancelled and the holders of outstanding Notes, including Notes held through IDSs, will receive their pro rata share of Otelcos new Class A common stock, which new Class A common stock will represent 92.5% of the total economic and voting interests in Otelco immediately following the consummation of the Restructuring, subject to dilution on account of the issuance of equity interests in Otelco pursuant to the Management Equity Plan; and |
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the outstanding shares of Otelcos existing common stock, all of which currently constitute part of the IDSs, will be cancelled. |
Item
2.02. |
Results of Operations and Financial Condition. |
Item
8.01. |
Other Events. |
Item
9.01. |
Financial Statements and Exhibits. |
Exhibit No. |
Description |
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10.1 |
Restructuring Support Agreement, dated as of January 31, 2013, by and among Otelco, each of Otelcos direct and indirect
subsidiaries, the Consenting Term Loan Lenders and the Consenting Revolving Loan Lenders |
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99.1 |
Press Release of Otelco, dated as of February 1, 2013 |
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99.2 |
Presentation of Otelco, dated as of February 1, 2013 |
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99.3 |
Disclosure Statement (including the Exhibits thereto) |
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99.4 |
Letter from Otelco to the holders of IDSs |
OTELCO INC. |
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(Registrant) |
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Date: February 1, 2013 |
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By: |
/s/ Curtis L. Garner, Jr. |
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Name: Curtis L. Garner, Jr. Title: Chief Financial Officer |
Section
1. |
Restructuring, Term Sheet and Definitive Documentation. |
1.1 |
Support of the Restructuring, Term Sheet and Definitive Documentation. |
(a)
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Until the Termination Date (as defined below), the Company and the Plan Support Parties, severally and not jointly, agree (i) to support and consummate the Restructuring contemplated by the Term Sheet, including cooperating in a commercially reasonable manner in obtaining requisite regulatory approvals, including the timely provision of necessary information for any required regulatory submissions or other governmental filings, (ii) that the Company shall solicit the Term Loan Lenders for acceptances of the Restructuring, and (iii) that the Company shall solicit holders of Notes (each, a Noteholder and, collectively, the Noteholders) for acceptances of the Restructuring through the Chapter 11 Cases (as defined herein). |
(b)
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Until the Termination Date, the Company, jointly and severally, agrees: (i) to take any and all necessary and appropriate actions in furtherance of all of the restructuring transactions contemplated under this Support Agreement, the Plan (as defined below) and the Term Sheet (the Restructuring), including but not limited to taking all steps reasonably necessary and appropriate to obtain any and all required regulatory and/or third-party approvals for the Restructuring, (ii) to commence a solicitation for acceptances of a prepackaged chapter 11 plan of reorganization for the Company in accordance with the terms of this Support Agreement and the Term Sheet (the Solicitation) no later than February 14, 2013, (iii) to commence reorganization cases (the Chapter 11 Cases) for the Company by filing voluntary petitions under chapter 11 of title 11 of the United States Code (the Bankruptcy Code) in the United States Bankruptcy Court for the District of Delaware (the Bankruptcy Court) as soon as practicable after the completion of the deadline to submit votes to accept or reject the Plan (as defined below) pursuant to the Solicitation, and in any event no later than April 3, 2013 (the date which the Chapter 11 Cases are commenced, the Petition Date), (iv) to file and seek approval on an interim and final (to the extent applicable) basis of first day motions (including a motion seeking consensual use of cash pledged as collateral to the Lenders and providing adequate protection to the Lenders in connection therewith), (v) to file with the |
Bankruptcy Court on the Petition Date a prepackaged chapter 11 plan of reorganization in the form and substance attached hereto as Exhibit C (the Plan) and a related disclosure statement (the Disclosure Statement), in form and substance reasonably satisfactory to the Agent and to Consenting Lenders that hold at least 66-2/3% of the amount of the principal term loan obligations under the Credit Agreement and constitute more than fifty percent of the Term Loan Lenders under the Credit Agreement (the Required Consenting Lenders), (vi) to seek approval of the Disclosure Statement and confirmation of the Plan at the earliest practicable date, which in any event shall be no later than seventy (70) days after the Petition Date, (vii) not to take any action not otherwise required by law that is inconsistent with this Support Agreement, the Plan and the Term Sheet, (viii) not, nor encourage any other person or entity, to interfere with, delay, impede, appeal or take any other negative action, directly or indirectly, in any respect regarding the Term Sheet or the overall Restructuring, (ix) to otherwise use commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective the transactions contemplated by the Support Agreement and the Term Sheet; (x) not to file a motion with the Bankruptcy Court pursuant to section 363(b) of the Bankruptcy Code, including any motion pertaining to employee benefits or compensation, without the consent of the Required Lenders; (xi) prior to the Effective Date (as defined in the Plan), not make any cash payments to the holders of the Notes on account of the obligations evidenced by the Notes or to any holders of any equity interests in the Company; (xii) operate in the ordinary course of business consistent with past practice and use commercially reasonable efforts to keep intact the assets, operations and relationships of the business, and the Company shall inform the Required Lenders as soon as reasonably practicable about all occurrences which may have a material adverse effect on the assets, operations or relationships of the Companys business; (xiii) to pay all reasonable, actual and documented fees of the Agent incurred in connection with the Restructuring; and (xiv) to promptly notify the Agent and deliver to the Agent any expressions of interest, letters of intent, or any proposals received from a potential acquirer with respect to any proposed restructuring alternative that, in the Board of Directors exercise of its fiduciary obligations as described in Section 3 hereof, is bona fide, based on adequate financial wherewithal, and worthy of evaluation; provided, however, that all obligations of the Company under this subsection shall be subject to the terms of Section 3 below. |
(c)
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Until the Termination Date, each Lender, severally and not jointly, agrees to (i) when solicited, and subject to the acknowledgements set forth in Section 7 hereof, vote each claim (as defined in section 105(a) of title 11 of the United States Code) (a Claim) or interest it holds (in any capacity) in favor of the Plan and not change or withdraw (or cause to be changed or withdrawn) such vote, provided, however, that such vote shall be immediately revoked and deemed void ab initio upon the occurrence of the Termination Date, (ii) at the sole cost of the Company, use its reasonable efforts to support confirmation of the Plan and approval of the Disclosure Statement, and not object to, or support any other persons efforts to oppose or object to, confirmation of the Plan, (iii) at the sole cost of the Company, use its reasonable efforts to support (and not object to) the first day motions and other motions consistent with this Support Agreement filed by the Company in furtherance of the Restructuring, (iv) to consent to the Companys request for approval on an interim and final basis (to the extent applicable) of consensual use of cash pledged as collateral to the Lenders and providing adequate protection to the Lenders in connection therewith, (v) refrain from taking any action that is materially inconsistent with, or that would materially delay or impede approval, confirmation or consummation of the Restructuring, the Plan, or that is otherwise inconsistent with the terms of this Support Agreement and the Term Sheet, and (vi) not, directly or indirectly, propose, support, solicit, encourage, or participate in the formulation of any restructuring for the Company, including any plan of reorganization or liquidation in the Chapter 11 Cases other than the Restructuring. |
(d)
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Until the Termination Date, each Consenting Noteholder, severally and not jointly, in its capacity as a holder of Notes, a holder of Otelcos common stock, or in any other capacity, hereby agrees to (i) when solicited, and subject to the acknowledgements set forth in Section 7 hereof, vote all Claims or interests it holds (in any capacity) in favor of the Plan and not change or withdraw (or cause to be changed or withdrawn) such vote(s), (ii) at the sole cost of the Company, use its |
reasonable efforts to support confirmation of the Plan and approval of the Disclosure Statement, and not object to, or support any other persons efforts to oppose or object to, confirmation of the Plan, (iii) at the sole cost of the Company, use its reasonable efforts to support (and not object to) the first day motions and other motions consistent with this Support Agreement filed by the Company in furtherance of the Restructuring, including any motion to preserve or extend exclusivity, if applicable, (iv) refrain from taking any action that is materially inconsistent with, or that would materially delay or impede approval, confirmation or consummation of the Restructuring, the Plan, or that is otherwise inconsistent with the terms of this Support Agreement and the Term Sheet, and (v) not, directly or indirectly, propose, support, solicit, encourage, or participate in the formulation of any restructuring for the Company, including any plan of reorganization or liquidation in the Chapter 11 Cases other than the Restructuring contemplated by this Support Agreement and the Term Sheet. |
(e)
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Without limiting any other provision hereof, until the Termination Date, the Company and the Consenting Lenders hereby agree to negotiate in good faith each of the definitive agreements, documents, motions and other pleadings referenced in, or reasonably necessary or desirable to effectuate the transactions contemplated by, the Term Sheet and the Plan. Such definitive agreements and documents may include, without limitation: (i) the Plan, articles of formation and bylaws, certificates of formation and operating agreements, as applicable, of Otelco and each of its subsidiaries, shareholders agreement and registration rights agreement, all of which shall be in the form attached to the Term Sheet, with any modifications thereto to be in form and substance satisfactory to the Agent and the Required Lenders in their sole discretion; and (ii) the Disclosure Statement, guaranties, collateral agreements and all motions, including but not limited to the first-days, the Plan and the Disclosure Statement motions, all of which shall be consistent in all respects with and incorporate, as applicable, the terms of the Term Sheet, in form and substance reasonably satisfactory to the Agent and the Required Lenders (both (i) and (ii), collectively, the Definitive Documentation). |
(f)
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Each of the Parties agrees, severally and not jointly, that it will not take any action that would interfere with, delay, or postpone the effectuation of the Restructuring contemplated by this Support Agreement and the Term Sheet and, if necessary, confirmation and consummation of the Plan and implementation of the restructuring transactions contemplated thereunder. |
Section
2. |
Termination Events. |
2.1 |
Lender Termination Events. |
(a)
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11:59 p.m. (EST) on February 14, 2013, unless the Solicitation has commenced; |
(b)
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11:59 p.m. (EST) on the date that is forty-five (45) days from the date that Solicitation commences, unless the Chapter 11 Cases have commenced in the Bankruptcy Court and the Plan and Disclosure Statement have been filed with the Bankruptcy Court; |
(c)
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seventy-five (75) calendar days after the Petition Date, unless the Bankruptcy Court has entered an order confirming the Plan and approving the Disclosure Statement (the Confirmation Order); |
(d)
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eight (8) Business Days after the date of the commencement of the Chapter 11 Cases, unless the Bankruptcy Court enters an interim order in form and substance reasonably satisfactory to the Agent, authorizing the Company to use cash collateral, granting adequate protection to the Lenders, and scheduling a final hearing with respect to such matters; |
(e)
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forty-five (45) calendar days after the Petition Date, unless the Bankruptcy Court enters a final order, in form and substance reasonably satisfactory to the Agent, authorizing the Company to use cash collateral and granting adequate protection to the Lenders; |
(f)
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thirty-five (35) calendar days after the date upon which the Confirmation Order is entered, unless the Company has substantially consummated the Plan pursuant to its terms prior thereto (the |
Effective Date Deadline), provided, however, that the Effective Date Deadline shall be automatically extended by an additional sixty calendar days if the Company has not yet obtained the requisite clearances or approvals under any applicable laws or regulations for the consummation of the Plan, and the requests for such clearances or approvals are still pending;
(g)
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any court of competent jurisdiction (including the Bankruptcy Court) or other competent governmental or regulatory authority enters an order that any material provision of this Support Agreement is unenforceable in whole or in part; |
(h)
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any court of competent jurisdiction (including the Bankruptcy Court) or other competent governmental or regulatory authority issues a final, non-appealable order making illegal or otherwise preventing or prohibiting the consummation of the Restructuring contemplated in the Term Sheet or any of the Definitive Documentation in a way that cannot be reasonably remedied by the Company; |
(i)
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the occurrence of any material breach of this Support Agreement (to the extent not otherwise cured or waived in accordance with the terms hereof); |
(j)
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the Chapter 11 Cases shall be dismissed or converted to a chapter 7 case, or a chapter 11 trustee with plenary powers, or an examiner with enlarged powers relating to the operation of the businesses of the Company (powers beyond those set forth in section 1106(a)(3) and (4) of the Bankruptcy Code) shall be appointed in any of the Chapter 11 Cases or the Company shall file a motion or other request for such relief; |
(k)
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the Company takes any action that is materially inconsistent with the Companys obligations pursuant to Section 1.1 hereof or materially adverse to the Consenting Lenders, including, but not limited to, withdrawing the Plan, publicly announcing its intention not to support the Plan, filing any plan of reorganization and/or disclosure statement that is not consistent with the Term Sheet or seeking to sell all or substantially all of its assets under section 363 of the Bankruptcy Code; |
(l)
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a filing by the Company of any motion, application or adversary proceeding challenging the validity, enforceability, perfection or priority of or seeking avoidance of the liens securing the obligations referred to in the Credit Agreement or the documents related thereto (collectively, the Secured Obligations) or, other than as contemplated by the Restructuring, any other cause of action against and/or seeking to restrict the rights of the Lenders with respect to the Secured Obligations, or the prepetition liens securing such Secured Obligations; |
(m)
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the amendment or modification of the Disclosure Statement or any documents related to the Plan, notices, exhibits or appendices, which amendment or modification is (i) materially inconsistent with this Support Agreement or the Term Sheet, or (ii) materially adverse to the Consenting Lenders; |
(n)
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the board of directors of Otelco (the Board of Directors) terminates this Support Agreement pursuant to Section 3 hereof (a Board Termination); |
(o)
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the failure by the Company to have substantially consummated the Restructuring pursuant to the terms of this Support Agreement and the Term Sheet prior to June 30, 2013; provided, however, that such date shall be automatically extended by an additional sixty calendar days if the Company has not yet obtained the requisite clearances or approvals under any applicable laws or regulations for the consummation of the Plan, and the requests for such clearances or approvals are still pending; |
(p)
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any representation or warranty that the Company made in Section 5 herein is incorrect in any material respect on, or as of, the date made, and such default (unless it is a willful misrepresentation) shall continue unremedied for a period of ten (10) days after the earlier of (i) the date upon which the Company knew of such failure or (ii) the date upon which written notice thereof is given by any Party to the Company; |
(q)
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the Plan or any document attached to the Term Sheet is not in the form attached to the Term Sheet with any modifications thereto to be in the form and substance satisfactory to the Agent and Required Consenting Lenders in their sole discretion; |
(r)
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the Disclosure Statement, the order confirming the Plan, or any document that is part of the Plan Supplement (as defined by the Plan) and not attached to the Term Sheet are not in the form and substance reasonably acceptable to the Agent and Required Consenting Lenders; |
(s)
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prior to the Effective Date, the Company makes any payment to any holder of a Note on account of the obligations under the Notes other than professional fees, if any, that may be paid to Consenting Noteholders under this Support Agreement, without the consent of the Agent and the Required Consenting Lenders; |
(t)
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prior to the Effective Date, the Company makes any dividend or other payment to equity holders of the Company without the consent of the Agent and the Required Consenting Lenders; |
(u)
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the occurrence of a material adverse change with respect to the financial condition, collateral, operations, business or prospects of the Company, taken as a whole, provided, however, that none of the following shall constitute a material adverse change: (i) changes resulting from the filing or announcement of the Chapter 11 Cases of the type that customarily occur as a result of the commencement of a case under chapter 11 of the Bankruptcy Code; or (ii) any suspension in trading or de-listing of the securities of Otelco on any exchange on which such securities are listed; |
(v)
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an Event of Default (as defined in the Credit Agreement) other than an Event of Default set forth on Exhibit E occurs and is continuing; |
(w)
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the Bankruptcy Court enters an order invalidating, subordinating, recharacterizing or disallowing in any respect, as applicable, either the enforceability, perfection, priority, or validity of the liens or claims of the Lenders under the Credit Agreement and all other related credit documents; |
(x)
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the Bankruptcy Court grants relief that is materially inconsistent with this Support Agreement, the Plan or the Term Sheet; |
(y)
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unless previously agreed to by the Agent, the Bankruptcy Court grants relief terminating, annulling, or modifying the automatic stay (as set forth in section 362 of the Bankruptcy Code) with regard to any assets having an aggregate value in excess of $500,000; or |
(z)
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the Company files a motion to reject this Support Agreement. |
2.2 |
Noteholder Termination Events. |
(a)
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the Chapter 11 Cases shall be dismissed or converted to a chapter 7 case, or a chapter 11 trustee with plenary powers, or an examiner with enlarged powers relating to the operation of the businesses of the Company (powers beyond those set forth in section 1106(a)(3) and (4) of the Bankruptcy Code) shall be appointed in any of the Chapter 11 Cases or the Company shall file a motion or other request for such relief; |
(b)
|
the Company takes any action that is materially inconsistent with the Companys obligations pursuant to Section 1.1 hereof or materially adverse to the Consenting Noteholders, including, but not limited to, withdrawing the Plan, publicly announcing its intention not to support the Plan or filing any plan of reorganization and/or disclosure statement that is not consistent with the Term Sheet; |
(c)
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the amendment or modification of the Plan, the Disclosure Statement or any documents related to the Plan, notices, exhibits or appendices, which amendment or modification is (i) materially inconsistent with this Support Agreement or the Term Sheet, or (ii) materially adverse to the Consenting Noteholders; or |
(d)
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any court of competent jurisdiction or other competent governmental or regulatory authority issues a final, non-appealable order making illegal or otherwise preventing or prohibiting the consummation |
of the Restructuring contemplated in the Term Sheet or any of the Definitive Documentation in a way that cannot be reasonably remedied by the Company. |
2.3 |
Company Termination Events. |
(a)
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any Board Termination; |
(b)
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the Consenting Term Loan Lenders at any time (i) hold less than 66-2/3% of the amount of all Term Loan Lender Claims arising under the Credit Agreement, or (ii) consist of less than a majority of Term Loan Lenders under the Credit Agreement; |
(c)
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the Consenting Revolving Loan Lenders at any time (i) hold less than 66-2/3% of the amount of all Revolving Loan Lender Claims arising under the Credit Agreement, or (ii) consist of less than a majority of Revolving Loan Lenders under the Credit Agreement; |
(d)
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one or more Consenting Term Loan Lenders materially breaches its obligations under this Support Agreement, such that the non-breaching Consenting Term Loan Lenders at any time (i) hold less than 66-2/3% of the amount of all Term Loan Lender Claims arising under the Credit Agreement, or (ii) consist of less than a majority of Revolving Loan Lenders under the Credit Agreement; |
(e)
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one or more Consenting Revolving Loan Lenders materially breaches its obligations under this Support Agreement, such that the non-breaching Consenting Revolving Loan Lenders at any time (i) hold less than 66-2/3% of the amount of the Revolving Loan Lender Claims arising under the Credit Agreement, or (ii) consist of less than a majority of Revolving Loan Lenders under the Credit Agreement; |
(f)
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any court of competent jurisdiction or other competent governmental or regulatory authority issues a final, non-appealable order making illegal or otherwise preventing or prohibiting the consummation of the Restructuring contemplated in the Term Sheet or any of the Definitive Documentation in a way that cannot be reasonably remedied by the Company; or |
(g)
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the failure by the Company to have substantially consummated the Restructuring pursuant to the terms of this Support Agreement and the Term Sheet prior to June 30, 2013; provided, however, that such date shall be automatically extended by an additional sixty calendar days if the Company has not yet obtained the requisite clearances or approvals under any applicable laws or regulations for the consummation of the Plan, and the requests for such clearances or approvals are still pending. |
2.4 |
Consensual Termination. |
2.5 |
Termination Event Procedures. |
(a)
|
Termination Event Procedures. Upon the occurrence of a Termination Event set forth in Sections 2.1 (a), (b), (c), (d), (e), (f), (h), (j), (l), (q) and (s) this Support Agreement shall automatically terminate. Upon the occurrence of any other applicable Termination Event, a Plan Support Party may effect termination through delivery of written notice (Termination Notice) to counsel to (i) the Consenting Lenders, (ii) the Company and (iii) the Consenting Noteholders (the date of the effectiveness of any such termination, the Termination Date). Except in the case of a Board Termination or any Termination Event set forth in Sections 2.1(a), (b), (c), (d), (e), (f), (h), (j), (l), (q) and (s), any Plan Support Party who receives a Termination Notice shall have three (3) Business Days to cure the noticed Termination Event. The automatic stay arising pursuant to section 362 of the Bankruptcy Code shall be deemed waived or modified solely for purposes of providing notice hereunder. |
(b)
|
Effect of Termination. Subject to the terms of Section 2.5(a) hereof, the delivery of a Termination Notice by the Company or the Required Consenting Lenders shall terminate this Support Agreement and all obligations hereunder other than those contained in Sections 6, 7, 8.2, 8.5, 8.6, 8.7, 8.8, 8.9 and 8.10 shall terminate and be of no further force and effect in its entirety. The delivery of a Termination Notice by a Consenting Lender or Consenting Noteholder shall only terminate this Support Agreement with respect to the applicable Consenting Lender or Consenting Noteholder providing such Termination Notice. Upon termination of this Support Agreement, each Consenting Lender may, acting individually and of their own accord, withdraw or revoke its vote in support of the Plan. Notwithstanding anything to the contrary contained herein, termination of this Support Agreement shall not relieve any Plan Support Party that breaches this Support Agreement from liability for such breach except as described in Section 6. |
2.6 |
Limitation on Termination. |
Section
3. |
The Companys Fiduciary Obligations. |
Section
4. |
Condition Precedent to Support Agreement. |
Section
5. |
Representations, Warranties and Covenants. |
5.1 |
Power and Authority. |
5.2 |
Enforceability. |
5.3 |
Governmental Consents. |
5.4 |
Ownership. |
(a)
|
Each Consenting Lender, severally and not jointly, represents, warrants and covenants to the Company for itself that (i) such Party is the holder of Claims against the Company in the principal amounts indicated on such Consenting Lenders signature page or has and shall maintain the power and authority to bind the legal and beneficial owner(s) of such Claims to the terms of this Support Agreement, (ii) such Consenting Lender (a) has and shall maintain full power and authority to vote on and consent to or (b) has received direction from the party having full power and authority to vote on and consent to such matters concerning its pro rata share of the Claims and to exchange, assign and transfer such Claims, and (iii) other than pursuant to this Support Agreement, such Claims are and shall continue to be free and clear of any pledge, lien, security interest, charge, claim, equity, option, proxy, voting restriction, right of first refusal or other limitation on disposition, or encumbrances of any kind, that would materially and adversely affect in any way such Consenting Lenders performance of its obligations contained in this Support Agreement. |
(b)
|
Each Consenting Noteholder, severally and not jointly, represents, warrants and covenants to the Company that (i) such Party is the holder of the Claims against the Company in the principal amounts indicated on such Consenting Noteholders signature page hereto, or has and shall maintain the power and authority to bind the legal and beneficial owner(s) of such Claims to the terms of this Support Agreement, (ii) such Consenting Noteholder (a) has and shall maintain full power and authority to vote on and consent to or (b) has received direction from the party having full power and authority to vote on and consent to such matters concerning its pro rata share of the Claims and to exchange, assign and transfer such Claims, and (iii) other than pursuant to this Support Agreement, such Claims are and shall continue to be free and clear of any pledge, lien, security interest, charge, claim, equity, option, proxy, voting restriction, right of first refusal or other limitation on disposition, or encumbrances of any kind, that would materially and adversely affect in any way such Consenting Noteholders performance of its obligations contained in this Support Agreement. |
5.5 |
Other Support Agreements. |
Section
6. |
Remedies. |
Section
7. |
Acknowledgement. |
Section
8. |
Miscellaneous Terms. |
8.1 |
Assignment; Transfer Restrictions. |
(a)
|
Each Plan Support Party hereby agrees, severally and not jointly, for so long as this Support Agreement shall remain in effect, not to sell, assign, transfer, hypothecate or otherwise dispose of any Claim under the Credit Agreement, any Notes or any other Claim against or interest in the Company unless, as a condition precedent to any such transaction, the transferee thereof executes and delivers a Joinder (as defined in Section 8.1(c) hereof) to the Company at least two (2) Business Days prior to the relevant transfer. Thereafter, such transferee shall be deemed to be a Plan Support Party, for purposes of this Support Agreement. |
(b)
|
Any sale, assignment, transfer, hypothecation or other disposition of any Claim under the Credit Agreement, any Note or any other Claim against or interest in the Company that either (i) does not comply with the procedures set forth in subsection 8.1(a) hereof; or (ii) acts to delay or otherwise materially effects any regulatory approvals required for the consummation of the Restructuring, shall be deemed void ab initio. |
(c)
|
Any person that receives or acquires any Claims under the Credit Agreement, any Notes or any other Claim against or interest in the Company pursuant to a sale, assignment, transfer, hypothecation or other disposition of such Notes or Claims by a Plan Support Party hereby agrees to be bound by all of the terms of this Support Agreement (as the same may be hereafter amended, restated or otherwise modified from time to time) (a Joining Party) by executing and delivering a joinder in the form of Exhibit D hereto (the Joinder). The Joining Party shall thereafter be deemed to be a Plan Support Party for all purposes under this Support Agreement. |
(d)
|
With respect to the Claims under the Credit Agreement, Notes or any other Claim against or interest in the Company held by any Joining Party upon consummation of the sale, assignment, transfer, hypothecation or other disposition of such Notes or Claims, the Joining Party hereby makes the representations and warranties of the Plan Support Parties, set forth in Section 5 of this Support Agreement to the Company. |
(e)
|
This Support Agreement shall in no way be construed to preclude any Plan Support Party from acquiring additional Claims under the Credit Agreement, Notes or any other Claim against or interest in the Company; provided that any such Claims under the Credit Agreement, Notes or Claim |
against or interest in the Company, shall automatically be deemed to be subject to the terms of this Support Agreement. |
8.2 |
No Third Party Beneficiaries. |
8.3 |
Entire Agreement. |
8.4 |
Counterparts. |
8.5 |
Settlement Discussions. |
8.6 |
Reservation of Rights. |
8.7 |
Governing Law; Waiver of Jury Trial. |
(a)
|
The Parties waive all rights to trial by jury in any jurisdiction in any action, suit, or proceeding brought to resolve any dispute between the Parties arising out of this Support Agreement, whether sounding in contract, tort or otherwise. |
(b)
|
This Support Agreement shall be governed by and construed in accordance with the laws of the State of New York and the Bankruptcy Code, without regard to any conflicts of law provision which would require the application of the law of any other jurisdiction. By its execution and delivery of this Support Agreement, each Party hereby irrevocably and unconditionally agrees for itself that, |
subject to Section 8.7(c) hereof, any legal action, suit or proceeding against it with respect to any matter under or arising out of or in connection with this Support Agreement or for recognition or enforcement of any judgment rendered in any such action, suit or proceeding, may be brought in any state or federal court of competent jurisdiction in New York County, State of New York, and by execution and delivery of this Support Agreement, each of the Parties hereby irrevocably accepts and submits itself to the nonexclusive jurisdiction of such court, generally and unconditionally, with respect to any such action, suit or proceedings. |
(c)
|
Notwithstanding the foregoing, if the Chapter 11 Cases are commenced, nothing in subsections 8.7(a) or (b) hereof shall limit the authority of the Bankruptcy Court to hear any matter related to or arising out of this Support Agreement. |
8.8 |
Successors. |
8.9 |
Nature of Obligations. |
8.10 |
Acknowledgment of Counsel. |
8.11 |
Amendments, Modifications, Waivers. |
8.12 |
Severability of Provisions. |
8.13 |
Notices. |
Otelco Inc. 505 Third Avenue East Oneconta, Alabama 35121 |
||||||||||
Attention: |
Michael D. Weaver |
|||||||||
with copies to (for informational purposes only): |
||||||||||
Willkie Farr & Gallagher LLP 787 Seventh Avenue New York, New York 10019 |
||||||||||
Attention: |
Rachel C. Strickland, Esq. Jack M. Tracy II, Esq. |
|||||||||
Telecopy: |
(212) 728-8111 |
|||||||||
E-mail: |
rstrickland@willkie.com jtracy@willkie.com |
|||||||||
Young Conaway Stargatt & Taylor, LLP Rodney Square 1000 North King Street Wilmington, Delaware 19801 |
||||||||||
Attention: |
Edmon L. Morton, Esq. |
|||||||||
Telecopy: |
(302) 571-1253 |
|||||||||
E-mail: |
emorton@ycst.com |
|||||||||
Dorsey & Whitney LLP 51 West 52nd Street New York, New York 10019 |
||||||||||
Attention: |
Steven Khadavi, Esq. |
|||||||||
Telecopy: |
(646) 390-6549 |
|||||||||
E-mail: |
khadavi.steven@dorsey.com |
King & Spalding 1180 Peachtree Street, NE Atlanta, GA 30309 |
||||||||||
Attention: |
Sarah Borders, Esq. |
|||||||||
Telecopy: |
(404) 572-5100 |
|||||||||
E-mail: |
sborders@kslaw.com |
OTELCO INC., |
||||||||||
By: |
/s/ Michael D. Weaver |
|||||||||
Name: Michael D. Weaver Title: Chief Executive Officer |
||||||||||
BLOUNTSVILLE TELEPHONE LLC, |
||||||||||
By: |
/s/ Michael D. Weaver |
|||||||||
Name: Michael D. Weaver Title: Chief Executive Officer |
||||||||||
BRINDLEE MOUNTAIN TELEPHONE LLC, |
||||||||||
By: |
/s/ Michael D. Weaver |
|||||||||
Name: Michael D. Weaver Title: Chief Executive Officer |
||||||||||
COMMUNICATIONS DESIGN ACQUISITION LLC, |
||||||||||
By: |
/s/ Michael D. Weaver |
|||||||||
Name: Michael D. Weaver Title: Chief Executive Officer |
||||||||||
CRC COMMUNICATIONS LLC, |
||||||||||
By: |
/s/ Michael D. Weaver |
|||||||||
Name: Michael D. Weaver Title: Chief Executive Officer |
||||||||||
GRANBY TELEPHONE LLC, |
||||||||||
By: |
/s/ Michael D. Weaver |
|||||||||
Name: Michael D. Weaver Title: Chief Executive Officer |
HOPPER TELECOMMUNICATIONS LLC, |
||||||||||
By: |
/s/ Michael D. Weaver |
|||||||||
Name: Michael D. Weaver Title: Chief Executive Officer |
||||||||||
MID-MAINE TELECOM LLC, |
||||||||||
By: |
/s/ Michael D. Weaver |
|||||||||
Name: Michael D. Weaver Title: Chief Executive Officer |
||||||||||
MID-MAINE TELPLUS LLC, |
||||||||||
By: |
/s/ Michael D. Weaver |
|||||||||
Name: Michael D. Weaver Title: Chief Executive Officer |
||||||||||
OTELCO MID-MISSOURI LLC, |
||||||||||
By: |
/s/ Michael D. Weaver |
|||||||||
Name: Michael D. Weaver Title: Chief Executive Officer |
||||||||||
I-LAND INTERNET SERVICES LLC, |
||||||||||
By: |
/s/ Michael D. Weaver |
|||||||||
Name: Michael D. Weaver Title: Chief Executive Officer |
||||||||||
OTELCO TELECOMMUNICATIONS LLC, |
||||||||||
By: |
/s/ Michael D. Weaver |
|||||||||
Name: Michael D. Weaver Title: Chief Executive Officer |
OTELCO TELEPHONE LLC, |
||||||||||
By: |
/s/ Michael D. Weaver |
|||||||||
Name: Michael D. Weaver Title: Chief Executive Officer |
||||||||||
PINE TREE TELEPHONE LLC, |
||||||||||
By: |
/s/ Michael D. Weaver |
|||||||||
Name: Michael D. Weaver Title: Chief Executive Officer |
||||||||||
SACO RIVER TELEPHONE LLC, |
||||||||||
By: |
/s/ Michael D. Weaver |
|||||||||
Name: Michael D. Weaver Title: Chief Executive Officer |
||||||||||
SHOREHAM TELEPHONE LLC, |
||||||||||
By: |
/s/ Michael D. Weaver |
|||||||||
Name: Michael D. Weaver Title: Chief Executive Officer |
||||||||||
WAR TELEPHONE LLC, |
||||||||||
By: |
/s/ Michael D. Weaver |
|||||||||
Name: Michael D. Weaver Title: Chief Executive Officer |
Borrower: |
Otelco Inc., a Delaware corporation |
|||||
Other Credit Parties: |
Substantially all of the Borrowers subsidiaries and the other Credit Parties have guaranteed the Obligations under the Existing
Credit Agreement and have granted a first priority security interest in substantially all of their respective assets as security for the Obligations.
As part of the Restructuring, such subsidiaries and the other Credit Parties will guaranty all of the Obligations under the Amended Credit Agreement
and grant a first priority security interest in substantially all of their assets as security for the Obligations. |
|||||
Existing Credit Facility: |
As of January 31, 2013, the Existing Credit Facility consists of the following principal amounts: (a) $0 in outstanding Revolving
Loans and (b) a $162,000,000 Term Loan (Existing Term Loan). |
|||||
Conversion of Existing Credit Facility: |
On the date that the Restructuring closes (the Closing Date), (i) the Borrower shall use all available cash above
$5 million, to make a cash payment to the Agent and Senior Lenders in an amount which is expected to reduce the principal amount of the Existing Term
Loan to $142,000,000; provided, however, that such payment shall not be less than $20,000,000 (the Closing Date Payment) and such
Closing Date Payment shall be a condition to the undertakings of the Agent and Senior Lenders to enter into the Restructuring pursuant to the
Definitive Documentation, (ii) the Existing Term Loan, less the Closing Date Payment, shall remain outstanding as the restructured term loan (the
Restructured Term Loan), (iii) the Revolving Loan Commitment shall be reduced to $5,000,000 (the Restructured Revolving
Credit Facility, together with the Restructured Term Loan, the Restructured Credit Facility) and (iv) as consideration for
the amendments and accommodations contemplated by the proposed restructuring, including the extension of maturity of the obligations under the Existing
Credit Agreement, the Senior Lenders shall collectively receive limited voting shares of Borrower (the Class B Shares), representing
7.5% of the total economic interests in the Borrower, subject to dilution by the Management Equity Plan. On the date that all of the Obligations under
the Amended Credit Agreement have been paid in full (including the cash collateralization of any outstanding letters of credit) and the commitments
thereunder have terminated, the Class B Shares shall automatically convert into Class A Shares (as defined below) with the same economic and voting
interests as were in effect immediately prior to such date. |
|||||
Subordinated Debt: |
The Subordinated Debt, plus all accrued interest thereon and all other amounts due and owing in respect thereof, shall be converted
on the Closing Date into 100% of the Class A voting shares of the Borrower (the Class A Shares), representing 92.5% of the total
economic and voting interests in the Borrower, subject to dilution by the Management Equity Plan. |
|||||
Existing Equity: |
All equity interests in the Borrower, including any right, warrant or option to acquire any equity interest in the Borrower, shall be
cancelled and extinguished on the Closing Date. |
Closing Date Cash on Hand: |
The Borrower shall have not less than $5,000,000 in cash on hand on the Closing Date. |
|||||
Restructured Revolving Credit Facility: |
On the Closing Date, the Restructured Revolving Credit Facility will be reduced to $5,000,000 in principal amount. Any portion of the
Restructured Revolving Credit Facility which may be repaid from time to time may be reborrowed, subject the applicable provisions of the Amended Credit
Agreement. The proceeds of any new Revolving Loans may be used to finance Borrowers working capital and capital expenditure needs and to finance
transaction costs and expenses related to the Restructuring. |
|||||
Restructured Term Loan: |
On the Closing Date, and after application of the Closing Date Payment Amount, the principal amount of the Restructured Term Loan
shall be not more than $142,000,000. Amounts paid on the Restructured Term Loan may not be reborrowed. |
|||||
Excess Cash Flow Payment: |
The Restructured Term Loans shall be subject to quarterly mandatory prepayments equal to 75% of the Borrowers Excess Cash
commencing with the fiscal quarter ending March 31, 2013; provided, however, that each such mandatory prepayment shall be reduced to an amount equal to
50% of the Borrowers Excess Cash if on the applicable quarterly payment date the Borrowers Consolidated Total Leverage Ratio is less than
or equal to 2.25:1.00. |
|||||
Amortization of Restructured Term Loan: |
Straight-line amortization at 5.0% per annum commencing the first quarter after the Closing Date, payable quarterly in
arrears. |
|||||
Maturity Date: |
April 30, 2016 |
|||||
Financial Covenants: |
The Amended Credit Agreement will include financial covenants substantially similar to those in the Existing Credit Agreement but
modified to reflect the Borrowers projected financial performance. |
|||||
Sale Covenant: |
The Amended Credit Agreement and the Borrowers Articles will include a sale covenant acceptable to the Agent and the Senior
Lenders which shall be triggered in the event that (x) the Borrowers Consolidated Total Leverage Ratio (to be measured at the end of each fiscal
quarter) exceeds 4.25:1.0 or (y) there is a payment default under the Amended Credit Agreement (each, a Trigger Event). The sale
covenant shall require the Borrower to sell all of the equity interests or all or substantially all of the assets of the Credit Parties (the
Sale Covenant) within one hundred eighty days after the occurrence of a Trigger Event (the Initial Outside Date)
and shall include progress milestones acceptable to the Agent and Requisite Senior Lenders and in any event shall include selection of an investment
banker acceptable to the Agent and Requisite Senior Lenders. Provided, however, if final regulatory approvals from the FCC and/or applicable PUCs has
not been obtained by the Initial Outside Date, and the Company is working in good faith to obtain such approvals then the Company may extend the
Initial Outside Date, solely to the extent necessary to enable the Company to obtain such approvals, by up to 120 days by giving notice of such
extension to the Seniors Lenders. |
|||||
Any waiver or amendment of the Sale Covenant shall require the consent of Requisite Lenders with respect to any amendment of the Sale
Covenant in the Amended Credit Agreement and the consent of the majority of holders of |
Class B Shares with respect to any amendment of the Sale Covenant in the Borrowers Articles. The Borrower shall no longer be
required to comply with the Sale Covenant (and the Sale Covenant contained in the Borrowers Articles may be deemed to expire or be inoperative)
if, and after, all of the Obligations under the Amended Credit Agreement have been paid in full (including the cash collateralization of any
outstanding letters of credit) and the commitments thereunder have terminated. |
||||||
Restricted Payments: |
None permitted. |
|||||
Interest: |
Interest on the Revolving Loans and the Restructured Term Loan will be payable in cash in arrears on the applicable Interest Payment
Dates and bear interest at the following rates: (i) with respect to the Revolving Loans or Restructured Term Loans which are designated as Index Rate
Loans, the Index Rate (not less than 4.25% per annum) plus 3.25% per annum or (ii) with respect to the Revolving Loans or Restructured Term Loans which
are designated as LIBOR Rate Loans, the LIBOR Rate (not less than 3.0% per annum) plus 3.5% per annum. |
|||||
Unused Commitment Fee: |
The unused commitment fee payable with respect to the Restructured Revolving Credit Facility will be 0.50% per
annum. |
|||||
Prepayment Requirements and Commitment Reductions: |
Except as otherwise provided in this Term Sheet, prepayment requirements and commitment reduction terms shall conform to requirements
and terms set forth in the Existing Credit Agreement. |
|||||
Collateral: |
All Obligations under the Amended Credit Agreement shall be secured by first priority security interests on all existing and after
acquired assets of the Credit Parties (subject to mutually agreed exceptions and exclusions), including, without limitation, a pledge of the
Borrowers Subsidiaries. |
|||||
Events of Default: |
Events of Default in the Amended Credit Agreement shall be substantially the same as in the Existing Credit Agreement, and shall also
include Events of Default arising from defaults under the Restructuring Documents. A Change in Control Event shall constitute an Event of Default under
the Amended Credit Agreement. Change of Control Event means (i) any sale of all or substantially all of the assets of the Borrower
or any of its Subsidiaries; (ii) a merger of Borrower or any of its Subsidiaries; (iii) any direct or indirect acquisition of securities of the
Borrower or any of its Subsidiaries that results in any Person (or Persons acting together as a group) acquiring securities representing 50% or more of
the voting power of all outstanding voting securities of the Borrower (or any of its Subsidiaries) in a transaction or series of transactions after the
date hereof; or (iv) any other similar transaction or series of transactions that results in any Person (or Persons acting together as a group)
acquiring 50% or more of the voting power of all outstanding voting securities of the Borrower (or any of its Subsidiaries) after the date
hereof. |
|||||
Collections/Cash Management: |
Cash management system, including blocked account/control agreements, acceptable to the Agent. |
Documentation: |
The Existing Credit Agreement shall be amended in the form of the Amended Credit Agreement, which Amended Credit Agreement shall be
in the form attached to this Term Sheet, with any modifications thereto to be in form and substance satisfactory to the Agent and the Requisite Lenders
in their sole discretion. All guarantees, pledge agreements and security documents will be reaffirmed or amended and restated. |
|||||
Reporting Requirements: |
Reporting requirements in the Amended Credit Agreement shall be amended to require monthly reporting and shall include an increased
level of detail, as acceptable to the Senior Lenders. |
|||||
Conditions to Closing: |
The Existing Credit Agreement shall be amended to contain such conditions to funding as are customary for senior secured credit
facilities of the type described herein and as are acceptable to the Agent and the Senior Lenders. All extensions of credit under the Amended Credit
Agreement will be subject to the continuing accuracy of representations and warranties and the absence of defaults. |
|||||
It is anticipated that the conditions to the effectiveness of the Amended Credit Agreement would include, but not be limited to, the
following, each of which must be satisfied or waived as determined by the Agent and the Senior Lenders in their sole
discretion: |
||||||
On the Closing Date, the Articles and the Bylaws of the Borrower will be amended and restated to the extent necessary or appropriate
to effectuate the provisions of the Restructuring (including, without limitation, an amendment to the Borrowers organizational documents to
provide for the creation and issuance of the Class B Shares, to provide for the Sale Covenant and such further amendments as described
below). |
||||||
No material adverse change with respect to the financial condition, collateral, operations, business or prospects of the Borrower and
its subsidiaries, taken as a whole; provided, however, that none of the following shall constitute a material adverse change: (i) changes
resulting from the filing or announcement of the Reorganization Cases of the type that customarily occur as a result of the commencement of a case
under chapter 11 of the Bankruptcy Code; or (ii) any suspension in trading or de-listing of the securities of the Borrower on any exchange on which
such securities are listed. |
||||||
Any third-party and regulatory approvals and consents necessary to consummate the transactions contemplated by the Restructuring
shall have been obtained. |
||||||
The (i) Plan, (ii) Amended Credit Agreement, (iii) Articles and Bylaws, certificates of formation and operating agreements, as
applicable, of the reorganized Borrower and each of its subsidiaries, (iv) registration rights agreement of the Borrower, and (v) shareholders
agreement of the reorganized Borrower shall each be in the form attached hereto, with any modifications thereto to be in form and substance
satisfactory to the Agent and the Requisite Lenders in their sole discretion. The (i) motions filed by the Company in furtherance of the Restructuring,
including first day motions, (ii) order confirming the Plan, and (iii) all other Definitive Documentation evidencing the transactions
contemplated by the Restructuring shall be consistent with this Term Sheet and shall be in form and substance reasonably satisfactory
to |
the Agent and the Requisite Lenders. All Definitive Documentation evidencing the transactions (collectively, the
Restructuring Documents) shall have been executed and delivered by all of the parties thereto and all such transactions shall have
been consummated on the Closing Date. |
||||||
The Agent and the Senior Lenders shall have received such resolutions, consents, certificates, legal opinions and other documents as
they shall have requested with respect to the execution and delivery of the Amended Credit Agreement and the Restructuring Documents, and all related
transactions and performance of the obligations created thereunder. |
||||||
All fees and expenses of the Agent to be paid at closing. |
||||||
Purchase of Senior Lenders Class B Shares: |
Within fifteen days after the indefeasible payment in cash in full of the Borrowers Obligations under the Amended Credit
Agreement (including the cash collateralization of any outstanding letters of credit) and termination of the Commitments thereunder, the Borrower may
elect, at its option, to purchase the Senior Lenders Class B Shares for an amount equal to (i) 2.5% of the outstanding principal obligations
under the Amended Credit Agreement as of the Closing Date, if the repurchase is effected on or before March 31, 2014; (ii) 5% of the outstanding
principal obligations under the Restructured Credit Agreement as of the Closing Date if the repurchase is effected after March 31, 2014 and on or
before March 31, 2015; or (iii) 7.5% of the outstanding principal obligations under the Restructured Credit Agreement as of the Closing Date, if the
repurchase is effected after March 31, 2015 and on or before March 31, 2016. The Borrowers right to purchase the Class B Shares shall terminate
on March 31, 2016. |
|||||
Expenses: |
Borrower shall pay all reasonable, actual out-of-pocket legal fees and other reasonable, actual out-of-pocket expenses of the Agent
related to the arrangement, documentation and closing of the Restructuring or otherwise outstanding, documented in summary form consistent with past
practice. |
|||||
Releases: |
The Borrower will agree to release the Agent, the Senior Lenders who vote in favor of the Plan of Reorganization (as defined below)
and their affiliates from any and all claims relating to the Existing Credit Facility and the transactions contemplated by this Term
Sheet. |
|||||
Required Consents: |
The Borrower and other Credit Parties shall file voluntary petitions under Chapter 11 of the Bankruptcy Code in the United States
Bankruptcy Court for the District of Delaware and seek to effect the Restructuring under a plan of reorganization (Plan of
Reorganization). |
|||||
Governing Law: |
New York |
Issuer: |
Otelco Inc. |
|||||
Equity Ownership Split1: |
Senior Lenders 7.5% Subordinated Lenders 92.5% Management Equity Plan stock options to the Reorganized Companys senior management for a percentage of Class A Shares not to exceed 10% of the total voting and economic interest of the Reorganized Company. |
|||||
Transfer Rights Class B Shares: |
The Amended Credit Agreement will provide that prior to the payment in full of the Borrowers obligations under the Restructured
Credit Facility (including the cash collateralization of any outstanding letters of credit) and termination of commitments thereunder, the Senior
Lenders and their affiliates will not transfer the Class B Shares unless they transfer a ratable portion of their respective rights and obligations
under the Amended Credit Agreement. |
|||||
Board of Directors: |
The Borrower shall have a seven-member board of directors (the Board of Directors) consisting of: the CEO of
Borrower (the CEO); three directors elected by the holders of the Class A Shares (the Class A Appointees); and
three directors elected by the holders of the Class A Shares who a majority of the holders of the Class B Shares have confirmed are acceptable to such
holders as to experience, qualifications, disinterestedness, independence and integrity (the Special Directors). The
disinterestedness requirement for each Special Director shall include that such Special Director shall not have any material business or close personal
relationships or any history of any material business or close personal relationships with any or all of the Senior Agent, the Senior Lenders, the
Subordinated Debt Holders, management, the Borrower and their respective Affiliates Any replacement director for a Special Director must also be
satisfactory to a majority of the holders of Class B Shares (until and unless such shares are converted to Class A Shares) as to qualifications,
experience, integrity, independence and disinterestedness. |
|||||
Decisions of the Board of Directors shall be made based upon a majority of votes. |
||||||
Initially, all directors will each have one (1) vote. |
||||||
Following the occurrence of any Trigger Event, the Class A Appointees and the CEO will each have one (1) vote, and the Special
Directors will each have two (2) votes. If there is any vacancy among the Special Directors, then the votes of the remaining Special Directors shall be
increased on a pro rata basis such that the Special Directors shall be entitled to cast nine votes in the aggregate. |
1 |
In each case, subject to dilution by the Management Equity Plan. |
After the indefeasible payment in cash in full of the Borrowers Obligations under the Amended Credit Agreement (including the
cash collateralization of any outstanding letters of credit) and termination of the Commitments thereunder, then all of the members of the Board of
Directors of Borrower shall be determined by the holders of a majority of the total voting interests of Borrower. |
||||||
Any voluntary bankruptcy filing must be approved by Special Directors holding at least 2/3 of the votes then entitled to be cast by
all of the Special Directors. |
||||||
Board Observation Rights: |
A holder of Class B Shares will have a right to appoint a board observer, as long as it continues to hold at least 15% of the number
of shares acquired by the Senior Lenders in the Restructuring.2 |
|||||
Drag Rights: |
The shares of the Borrower will be subject to a shareholders agreement with drag-along rights in favor of holders of (a) Class
A Shares prior to a Trigger Event provided that the Amended Credit Agreement is paid in full and all commitments thereunder terminated and (b) Class B
Shares following a Trigger Event. Notwithstanding the foregoing, in connection with the enforcement of drag-along rights, (i) no shareholder shall be
required to (a) make any representations or warranties regarding the Borrower or any Credit Party or (b) agree to enter into any non-solicitation or
non-compete agreement; (ii) any representations and warranties by a shareholder shall be on a several and not joint basis and limited to fundamental
matters pertaining to such shareholder (e.g., ownership and due authorization); (iii) each shareholder shall only be liable for its pro rata share of
any indemnification obligation (which in the case of a breach by a shareholder of certain fundamental representations pertaining to such shareholder,
is 100% of the indemnification obligation arising therefrom); and (iv) the indemnification obligations of each shareholder shall be several, not joint,
and capped at the amount of net proceeds it receives or less in connection with the transaction (other than indemnification for breach of certain
fundamental representations pertaining to such shareholder). |
|||||
Preemptive Rights: |
The holders of Class B Shares will have customary preemptive rights with respect to any new issuance of equity securities by the
Borrower, subject to customary exceptions |
|||||
Information Rights: |
Holders of Class B Shares will be entitled to customary information rights. |
|||||
Registration Rights: |
Holders of the Class B Shares will be entitled to customary registration rights. |
|||||
Governing Law: |
Delaware |
2 |
Company will not be required to pay costs associated with observers. |
X |
||||||||||
In re |
: |
Chapter 11 |
||||||||
: |
||||||||||
Otelco Inc., et al. |
: |
Case No. [] ([]) |
||||||||
: |
||||||||||
Debtors. |
: |
(Jointly Administered) |
||||||||
X |
WILLKIE FARR & GALLAGHER LLP 787 Seventh Avenue New York, New York 10019-6099 (212) 728-8000 |
||||||
-and- |
||||||
YOUNG CONAWAY STARGATT & TAYLOR, LLP Rodney Square 1000 North King Street Wilmington, Delaware 19801 (302) 856-6600 |
||||||
Counsel for Debtors and Debtors in Possession |
Page |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
ARTICLE I DEFINITIONS AND INTERPRETATIONS |
1 | ||||||||||
ARTICLE II METHOD OF CLASSIFICATION OF CLAIMS AND INTERESTS AND GENERAL PROVISIONS |
8 | ||||||||||
2.1 |
General Rules of Classification |
8 | |||||||||
2.2 |
Settlement |
9 | |||||||||
2.3 |
Substantive Consolidation of Debtors for Purposes of Voting, Confirmation and Distribution |
9 | |||||||||
2.4 |
Administrative, Fee and Priority Tax Claims |
9 | |||||||||
2.5 |
Deadline for Filing Fee Claims |
9 | |||||||||
2.6 |
U.S. Trustee Fees |
10 | |||||||||
ARTICLE III CLASSIFICATION OF CLAIMS AND INTERESTS |
10 | ||||||||||
ARTICLE IV TREATMENT OF UNIMPAIRED CLASSES |
10 | ||||||||||
4.1 |
Administrative Claims |
10 | |||||||||
4.2 |
Priority Tax Claims |
10 | |||||||||
4.3 |
Fee Claims |
11 | |||||||||
4.4 |
Other Secured Claims Class 3 |
11 | |||||||||
4.5 |
Other Priority Claims Class 4 |
11 | |||||||||
ARTICLE V TREATMENT OF IMPAIRED CLASSES |
11 | ||||||||||
5.1 |
Senior Secured Term Loan Claims Class 1 |
11 | |||||||||
5.2 |
Senior Secured Revolving Loan Claims Class 2 |
11 | |||||||||
5.3 |
Subordinated Notes Claims Class 5 |
12 | |||||||||
5.4 |
510(b) Subordinated Notes Claims Class 6 |
12 | |||||||||
5.5 |
General Unsecured Claims Class 7 |
12 | |||||||||
5.6 |
Existing Equity Interests Class 8 |
12 | |||||||||
ARTICLE VI NEW COMMON STOCK |
12 | ||||||||||
6.1 |
Authorization and Issuance of New Common Stock |
12 | |||||||||
6.2 |
New Stockholders Agreement and New Registration Rights Agreement |
12 | |||||||||
ARTICLE VII MEANS OF IMPLEMENTATION |
12 | ||||||||||
7.1 |
Restructuring Transaction |
12 | |||||||||
7.2 |
Corporate Action |
13 | |||||||||
7.3 |
Effectuating Documents and Further Transactions |
13 | |||||||||
7.4 |
Intercompany Claims and Interests |
13 | |||||||||
7.5 |
Managers and Officers of the Reorganized Debtors |
14 | |||||||||
7.6 |
Directors of the Reorganized Debtors |
14 | |||||||||
7.7 |
Management Equity Plan |
14 | |||||||||
7.8 |
General Distribution Mechanics |
14 | |||||||||
7.9 |
Withholding Taxes |
16 | |||||||||
7.10 |
Exemption from Certain Transfer Taxes |
16 | |||||||||
7.11 |
Exemption from Securities Laws |
16 | |||||||||
7.12 |
Setoffs and Recoupments |
16 | |||||||||
7.13 |
Insurance Preservation and Proceeds |
16 | |||||||||
7.14 |
Solicitation of Debtors |
16 | |||||||||
7.15 |
No Change of Control |
16 | |||||||||
Page | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
ARTICLE VIII EFFECT OF THE PLAN ON CLAIMS AND INTERESTS |
17 | ||||||||||
8.1 |
Discharge |
17 | |||||||||
8.2 |
Vesting and Retention of Causes of Action |
18 | |||||||||
8.3 |
Survival of Certain Indemnification Obligations |
18 | |||||||||
8.4 |
Release of Claims |
18 | |||||||||
8.5 |
Objections to Claims and Interests |
21 | |||||||||
8.6 |
Amendments to Claims |
22 | |||||||||
8.7 |
Estimation of Claims |
22 | |||||||||
ARTICLE IX EXECUTORY CONTRACTS |
22 | ||||||||||
9.1 |
Executory Contracts and Unexpired Leases |
22 | |||||||||
9.2 |
Bar Date for Rejection Damages |
23 | |||||||||
9.3 |
Cure |
23 | |||||||||
ARTICLE X CONDITIONS PRECEDENT TO CONFIRMATION AND CONSUMMATION OF THE PLAN |
23 | ||||||||||
10.1 |
Conditions Precedent to Confirmation |
23 | |||||||||
10.2 |
Conditions to the Effective Date |
23 | |||||||||
10.3 |
Waiver of Conditions Precedent |
24 | |||||||||
10.4 |
Effect of Non-Occurrence of the Conditions to Consummation |
24 | |||||||||
10.5 |
Withdrawal of the Plan |
24 | |||||||||
10.6 |
Cramdown |
25 | |||||||||
ARTICLE XI ADMINISTRATIVE PROVISIONS |
25 | ||||||||||
11.1 |
Retention of Jurisdiction |
25 | |||||||||
11.2 |
Governing Law |
26 | |||||||||
11.3 |
Time |
26 | |||||||||
11.4 |
Monetary Figures |
27 | |||||||||
11.5 |
Retiree Benefits |
27 | |||||||||
11.6 |
Amendments |
27 | |||||||||
11.7 |
Successors and Assigns |
27 | |||||||||
11.8 |
Controlling Documents |
27 | |||||||||
11.9 |
Creditors Committee |
27 | |||||||||
11.10 |
Termination of Professionals |
28 | |||||||||
11.11 |
Hart-Scott-Rodino Antitrust Improvements Act |
28 | |||||||||
11.12 |
Notices |
28 | |||||||||
11.13 |
Reservation of Rights |
29 |
EXHIBITS IN THE PLAN SUPPLEMENT |
|||||||||||
Exhibit 1 |
New Senior Secured Credit Facility Agreement |
||||||||||
Exhibit 2 |
New Stockholders Agreement |
||||||||||
Exhibit 3 |
List of Officers and Directors |
||||||||||
Exhibit 4 |
Certificate of Incorporation of Otelco Inc. |
||||||||||
Exhibit 5 |
Bylaws of Otelco Inc. |
||||||||||
Exhibit 6 |
Management Equity Plan |
||||||||||
Exhibit 7 |
New Registration Rights Agreement |
A.
|
Definitions. |
B.
|
Interpretation; Application of Definitions and Rules of Construction. |
C.
|
Appendices and Plan Documents. |
2.1
|
General Rules of Classification. |
2.3
|
Substantive Consolidation of Debtors for Purposes of Voting, Confirmation and Distribution. |
2.4
|
Administrative, Fee and Priority Tax Claims. |
2.5
|
Deadline for Filing Fee Claims. |
2.6
|
U.S. Trustee Fees. |
Class |
Designation |
Impairment |
Entitled to Vote |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Class 1 |
Senior Secured Term Loan Claims |
Yes |
Yes |
|||||||||||
Class 2 |
Senior Secured Revolving Loan Claims |
Yes |
Yes |
|||||||||||
Class 3 |
Other Secured Claims |
No |
No (Deemed to accept) |
|||||||||||
Class 4 |
Other Priority Claims |
No |
No (Deemed to accept) |
|||||||||||
Class 5 |
Subordinated Note Claims |
Yes |
Yes |
|||||||||||
Class 6 |
510(b) Subordinated Notes Claims |
Yes |
No (Deemed to reject) |
|||||||||||
Class 7 |
General Unsecured Claims |
No, unless Class 5 Subordinated Note Claims vote to reject the Plan |
No |
|||||||||||
Class 8 |
Existing Equity Interests |
Yes |
No (Deemed to reject) |
4.1
|
Administrative Claims. |
4.2
|
Priority Tax Claims. |
4.3
|
Fee Claims. |
4.4
|
Other Secured Claims Class 3. |
4.5
|
Other Priority Claims Class 4. |
5.1
|
Senior Secured Term Loan Claims Class 1. |
(a)
|
the New Term Loan Obligations under the New Senior Secured Credit Facility; |
(b)
|
the Senior Secured Term Loan Payment; and |
(c)
|
the New Class B Common Stock, subject to dilution on account of the Management Equity Plan, as a fee for the extended maturity of the New Senior Secured Credit Facility. |
5.2
|
Senior Secured Revolving Loan Claims Class 2. |
5.3
|
Subordinated Notes Claims Class 5. |
5.4
|
510(b) Subordinated Notes Claims Class 6. |
5.5
|
General Unsecured Claims Class 7. |
5.6
|
Existing Equity Interests Class 8. |
6.1
|
Authorization and Issuance of New Common Stock. |
6.2
|
New Stockholders Agreement and New Registration Rights Agreement. |
7.1
|
Restructuring Transaction. |
7.2
|
Corporate Action. |
7.3
|
Effectuating Documents and Further Transactions. |
7.4
|
Intercompany Claims and Interests. |
7.5
|
Managers and Officers of the Reorganized Debtors. |
7.6
|
Directors of the Reorganized Debtors. |
7.7
|
Management Equity Plan. |
7.8
|
General Distribution Mechanics. |
7.9
|
Withholding Taxes. |
7.10
|
Exemption from Certain Transfer Taxes. |
7.11
|
Exemption from Securities Laws. |
7.12
|
Setoffs and Recoupments. |
7.13
|
Insurance Preservation and Proceeds. |
7.14
|
Solicitation of Debtors. |
7.15
|
No Change of Control. |
8.1
|
Discharge. |
8.2
|
Vesting and Retention of Causes of Action. |
8.3
|
Survival of Certain Indemnification Obligations. |
8.4
|
Release of Claims. |
judgments, damages, demands, rights, causes of action, remedies and liabilities whatsoever, (other than all rights, remedies and privileges to enforce the Plan, the Plan Supplement and the contracts, instruments, releases, indentures and other agreements or documents (including, without limitation, the Plan Documents) delivered thereunder) whether liquidated or unliquidated, fixed or contingent, matured or unmatured, known or unknown, foreseen or unforeseen, existing or hereafter arising, in law, equity or otherwise that are based on, related to, or in any manner arising from, in whole or in part, any act, omission, transaction, event or other occurrence taking place on or prior to the Effective Date in any way relating to the Debtors, the Reorganized Debtors, the subject matter of, or the transactions or events giving rise to, any Claim or Interest that is treated in the Plan, the business or contractual arrangements between any Debtor and any Released Party, the restructuring of Claims or Interests prior to or in the Reorganization Cases, the parties released pursuant to this Section 8.4(b), the Reorganization Cases, the Plan or the Disclosure Statement, or any related contracts, instruments, releases, agreements and documents, or upon any other act or omission, transaction, agreement, event or other occurrence taking place on or before the Effective Date , and that could have been asserted by or on behalf of the Debtors, the debtors in possession or their Estates, or any of their affiliates, whether directly, indirectly, derivatively or in any representative or any other capacity, individually or collectively, in their own right or on behalf of the holder of any Claim or Interest or other entity, against any Released Party; provided, however, that in no event shall anything in this Section 8.4(b) be construed as a release of any (i) Intercompany Claim or (ii) Persons fraud, gross negligence, or willful misconduct, as determined by a Final Order, for matters with respect to the Debtors.
and Interests, (iii) fair, equitable, and reasonable, (iv) approved after due notice and opportunity for hearing, and (v) a bar to any of the Releasing Parties asserting any claim or cause of action released by the Releasing Parties against any of the Debtors and the other Released Parties or their respective property.
the Debtors, the Reorganized Debtors, or the Estates or any of their property, or any direct or indirect transferee of any property of, or successor in interest to, any of the foregoing Persons; (iv) acting or proceeding in any manner, in any place whatsoever, that does not conform to or comply with the provisions of the Plan to the full extent permitted by applicable law; (v) asserting any right of setoff, subrogation or recoupment of any kind against any obligation due from the Debtors, the Reorganized Debtors, the Estates or any of their property, or any direct or indirect transferee of any property of, or successor in interest to, any of the foregoing Persons; (vi) commencing or continuing, in any manner or in any place, any action that does not comply with or is inconsistent with the provisions of the Plan; provided, further, that the Releasing Parties are, with respect to Claims or Interests held by such parties, permanently enjoined after the Confirmation Date from taking any actions referred to in clauses (i) through (vi) above against the Released Parties or any direct or indirect transferee of any property of, or direct or indirect successor in interest to, any of the Released Parties or any property of any such transferee or successor; provided, however, that nothing contained herein shall preclude any Person from exercising its rights, or obtaining benefits, directly and expressly provided to such entity pursuant to and consistent with the terms of the Plan, the Plan Supplement and the contracts, instruments, releases, agreements and documents delivered in connection with the Plan.
8.5
|
Objections to Claims and Interests. |
8.6
|
Amendments to Claims. |
8.7
|
Estimation of Claims. |
9.1
|
Executory Contracts and Unexpired Leases. |
9.2
|
Bar Date for Rejection Damages. |
9.3
|
Cure. |
10.1
|
Conditions Precedent to Confirmation. |
(b)
|
the Plan Documents having been filed in substantially final form prior to the Confirmation Hearing, which Plan Documents shall be in form and substance reasonably satisfactory to the Debtors, the Senior Secured Credit Facility Agent and the Required Lenders. |
10.2
|
Conditions to the Effective Date. |
10.3
|
Waiver of Conditions Precedent. |
10.4
|
Effect of Non-Occurrence of the Conditions to Consummation. |
10.5
|
Withdrawal of the Plan. |
10.6
|
Cramdown. |
11.1
|
Retention of Jurisdiction. |
11.2
|
Governing Law. |
11.3
|
Time. |
11.4
|
Monetary Figures. |
11.5
|
Retiree Benefits. |
11.6
|
Amendments. |
11.7
|
Successors and Assigns. |
11.8
|
Controlling Documents. |
11.9
|
Creditors Committee. |
11.10
|
Termination of Professionals. |
11.11
|
Hart-Scott-Rodino Antitrust Improvements Act. |
11.12
|
Notices. |
Otelco Inc. 505 Third Avenue East Oneconta, Alabama 35121 |
||||||||||
Attention: |
Chief Executive Officer |
|||||||||
with copies to: |
||||||||||
Willkie Farr & Gallagher LLP 787 Seventh Avenue New York, New York 10019 |
||||||||||
Attention: |
Rachel C. Strickland, Esq. Jack M. Tracy II, Esq. |
|||||||||
Telecopy: |
(212) 728-8111 |
|||||||||
E-mail: |
rstrickland@willkie.com jtracy@willkie.com |
|||||||||
Young Conaway Stargatt & Taylor, LLP Rodney Square 1000 North King Street Wilmington, Delaware 19801 |
||||||||||
Attention: |
Edmon L. Morton, Esq. |
|||||||||
Telecopy: |
(302) 571-1253 |
|||||||||
E-mail: |
emorton@ycst.com |
General Electric Capital Corporation 201 Merritt 7 Norwalk, CT 06851 |
||||||||||
Attention: |
Tom Costello |
|||||||||
E-mail: |
thomas.costello@ge.com |
with copies to: |
||||||||||
King & Spalding 1180 Peachtree Street, NE Atlanta, GA 30309 |
||||||||||
Attention: |
Sarah Borders, Esq. |
|||||||||
Telecopy: |
(404) 572-5100 |
|||||||||
E-mail: |
sborders@kslaw.com |
11.13
|
Reservation of Rights. |
Respectfully submitted, |
||||||||||
OTELCO INC., a Delaware corporation, on behalf of itself and its subsidiaries |
||||||||||
By: |
||||||||||
Name: Michael Weaver Title: Chief Executive Officer |
Name of Institution: |
||||||||||
Address: |
||||||||||
By: |
||||||||||
Name: |
||||||||||
Title: |
||||||||||
Telephone: |
||||||||||
Facsimile: |
||||||||||
E-mail: |
Contact: |
Curtis Garner Chief Financial Officer Otelco Inc. 205-625-3571 Curtis@otelcotel.com |
Exhibit 99.2
Otelco Investor Presentation February 1, 2013 Otelco Inc. (NASDAQ: OTT; TSX: OTT.un)
Safe Harbor Statement Some of the statements included herein include forward-looking statements which reflect the Company's current views with respect to future events and financial performance. Statements which include the words expect, intend, plan," believe, project, anticipate and similar statements of a future or forward-looking nature identify forward-looking statements for the purposes of the federal securities laws or otherwise. The financial projections included herein are also forward-looking statements. All forward-looking statements address matters that involve risks and uncertainties. Accordingly, there are or will be important factors that could cause actual results to differ materially from those indicated in these statements.
2 Overview On February 1, 2013, Otelco announced its plan to file a pre-packaged plan of reorganization with the support of its senior lenders As a result of FCC reforms and the expiration of the Time Warner Cable contract, EBITDA is expected to decline from approximately $45 million in 2012 to approximately $30 million in the coming years Currently, the Company is over-levered with $270 million in total debt, $162 million of which is senior debt that matures in October 2013 The restructuring plan will reduce Otelco's debt and simplify its capital structure by: Amending and extending the Company's Senior Credit Facility Converting $108 million of 13% Subordinated Notes due in 2019(1) to new Class A shares of common stock Significantly reducing the Company's total debt burden from $270 million to $135 million(2) Reducing the Company's blended interest rate from 7.9% to 6.5% The Company's $32 million in cash on hand will provide sufficient funding to implement the restructuring 1) Excludes deferred interest 2) Paydown estimate based on assumed effective date of June 30, 2013 and plan acceptance by holders of Subordinated Notes; subject to minimum $20 million paydown
Overview (continued) IDS Unit holders will benefit from: Equity ownership of over 85% of the earnings power and value of the Company, which is substantially similar to the current ownership structure A deleveraged balance sheet which enables the Company to be more competitive Potential upside from future strategic transactions The restructuring is a crucial step in ensuring the continuing viability of the Company and IDS Unit holders are encouraged to support the proposed plan with a yes vote 3
Transaction Details I Has I Gets Senior Credit Facility(2) Subordinated Notes(5) IDS Units Bachelor Bonds Debt $162 $108 $99 $9 100.0% 100.0% Cash $27(3) Debt $135(3) Equity(1) 7.5%(4) 92.5% 85.2% 7.3% Total Leverage(6j ......... -- ..... , $270 , I \ , 8.2x ... ..... _--- 100.0% $27 ; .... --- ...... ... , , $135 '100.0% , I \ , 4.1x ... ' ..... _--.,. 1) Subject to dilution by the Management Incentive Plan 2) Represents term loan balance as revolver undrawn 3) Paydown estimate based on assumed effective date of June 30,2013 and plan acceptance by holders of Subordinated Notes; subject to minimum $20 million paydown 4) As a substitute for an amendment and extension fee 5) Excludes deferred interest 6) Based on 2013E EBITDA of $32.5 million 4
5 Key Terms of Amended Senior Credit Facility Commitment: Revolver: $5.0 million Term Loan: $135 million pro forma for $27 million paydown(1) from balance sheet cash Pricing: L1BOR + 3.5%; L1BOR floor of 3.0% Amortization: Fixed: 1.25% per quarter Variable: 75% excess cash flow sweep quarterly Amendment I Extension Fee: 7.5% of equity Maturity: April 30, 2016 Other Terms: Sale covenant upon Triggering Event(2) Approval right of certain Board members(3) 1) Paydown estimate based on assumed effective date of June 30,2013 and plan acceptance by holders of Subordinated Notes; subject to minimum $20 million paydown 2) Defined as either (a) Consolidated Total Leverage Ratio ::: 4.25x or (b) payment default 3) Three of six independent directors (the Special Directors) to meet disinterestedness requirements set by majority of senior lenders. Special Directors to have six votes out often upon Triggering Event
Financial Projections .! Revenue I EBITDA(1) 2012E 2013E 2014E 2015E 2016E 2017E $120 $100 $80 $60 $40 $20 $0 $.9.8...4 $82.3 $82.3 $81.1 $80.2 $79.8 ...... - I \ V 10% $50 0% ~ $40 0 :E ~ ::; (10%) $30 (20%) $20 $45.2 ,..3l, $32.5 $31.7 ....... ........ $30.1 $29.3 $28.6 ....... ....... r- 2012E 2013E 2014E 2015E 2016E 2017E 50% 20% Capex I EBITDA(1) less Capex $8 $7 $6 $5 $4 $7.1 $7.0 $7.0 $7.0 $7.0 ~4/ r- I~ 10% $50 $40 8% ;;: $30 ~ $20 6%::J $10 4% $0 $38.8 r- I ,$~4 $24.7 $23.1 r- .... $.2..2..3 $21.6 ....... 50% 40% ;;: .a 30%::J 20% 2012E 2013E 2014E 2015E 2016E 2017E 2012E 2013E 2014E 2015E 2016E 2017E 1) Defined as consolidated net income (loss) plus interest expense, depreciation and amortization, income taxes and certain non-recurring fees, expenses or charges and other non-cash charges reducing consolidated net income 6
Next Steps Detailed documents will be mailed to IDS Unit holders of record after February 8, 2013 to solicit support of the transaction Plan of reorganization Disclosure statement Ballot IDS Unit holders urged to read these documents carefully and submit their ballot on time Voting deadline of March 15,2013 A transaction closing date of late Spring 2013 is anticipated, subject to Court confirmation of the plan of reorganization and requisite regulatory approvals 7
Otelco
1. |
The last four digits of the taxpayer identification numbers of the Debtors follow in parentheses: (i) Otelco Inc. (6395); (ii) Blountsville Telephone LLC (6561); (iii) Brindlee Mountain Telephone LLC (9793); (iv) CRC Communications LLC (9369); (v) Communications Design Acquisition LLC (7873); (vi) Granby Telephone LLC (3490); (vii) Hopper Telecommunications LLC (2708); (viii) I-Land Internet Services LLC (0112); (ix) Mid-Maine Telecom LLC (9925); (x) Mid-Maine Telplus LLC (0180); (xi) Otelco Mid-Missouri LLC (7122); (xii) Otelco Telecommunications LLC (6385); (xiii) Otelco Telephone LLC (6398); (xiv) Pine Tree Telephone LLC (0670); (xv) Saco River Telephone LLC (7377); (xvi) Shoreham Telephone LLC (6940); and (xvii) War Telephone LLC (9858). The Debtors executive headquarters address is 505 Third Avenue East, Oneonta, AL 35121. |
|
each holder of the Senior Secured Term Loan Claims shall receive its pro rata share of (i) term loan obligations of the Company under the New Senior Secured Credit Facility of not more than $142 million, maturing on April 30, 2016, (ii) a cash payment of no less than $20 million, and (iii) the New Class B Common Stock representing 7.5% of the total economic and voting interest in Reorganized Otelco, subject to dilution on account of the Management Equity Plan, with (i) or (ii) subject to modification in the sole and absolute discretion of the Senior Secured Credit Facility Agent and holders of more than fifty percent in number and two-thirds in amount of the Senior Secured Term Loan Claims; |
|
the reinstatement of Allowed Senior Secured Revolving Loan Claims, as amended, with availability of up to $5 million, pursuant to the New Senior Secured Credit Facility Agreement; |
|
each holder of the Companys outstanding Subordinated Notes shall receive its pro rata share of the New Class A Common Stock, subject to dilution on account of the Management Equity Plan; |
|
the Reinstatement of Allowed General Unsecured Claims in full, provided, that, if holders of Class 5 Subordinated Notes Claims vote to reject the Plan pursuant to the thresholds for plan acceptance provided in section 1126(c) of the Bankruptcy Code, holders of Allowed General Unsecured Claims shall receive a Cash payment equal to 40.5% of the Allowed amount of such General Unsecured Claim; and |
|
the cancellation of all of the Existing Equity Interests. |
INTEND, BELIEVE AND OTHER WORDS AND TERMS OF SIMILAR MEANING IN CONNECTION WITH ANY DISCUSSION OF THE TIMING OR NATURE OF FUTURE OPERATING OR FINANCIAL PERFORMANCE OR OTHER EVENTS. THESE FORWARD-LOOKING STATEMENTS ARE BASED ON ASSUMPTIONS THAT THE COMPANY HAS MADE IN LIGHT OF ITS EXPERIENCE IN THE INDUSTRY IN WHICH IT OPERATES, AS WELL AS ITS PERCEPTIONS OF HISTORICAL TRENDS, CURRENT CONDITIONS, EXPECTED FUTURE DEVELOPMENTS AND OTHER FACTORS IT BELIEVES ARE APPROPRIATE UNDER THE CIRCUMSTANCES. ALTHOUGH THE COMPANY BELIEVES THAT THESE FORWARD-LOOKING STATEMENTS ARE BASED ON REASONABLE ASSUMPTIONS, YOU SHOULD BE AWARE THAT MANY FACTORS COULD AFFECT THE COMPANYS ACTUAL FINANCIAL CONDITION OR RESULTS OF OPERATIONS AND CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE IN THE FORWARD-LOOKING STATEMENTS. THESE FACTORS INCLUDE, AMONG OTHER THINGS, THOSE DISCUSSED IN ARTICLE XI OF THIS DISCLOSURE STATEMENT TITLED CERTAIN RISK FACTORS TO BE CONSIDERED.
Q: |
What is the purpose of the Restructuring Transaction? |
A: |
The Company believes that a financial restructuring is necessary to provide it with a tenable long-term capital structure and sufficient liquidity to conduct its operations. The timing of the restructuring is important in light of the impending maturity of its Senior Secured Term Loan on October 31, 2013. Overall, the purpose of the Restructuring Transaction is to reduce the Companys debt leverage and better position the Company to compete in the telecommunications industry. |
|
The $162 million Senior Secured Term Loan, which matures on October 31, 2013, will be reduced to no higher than $142 million, or such higher amount agreed to in writing by the Senior Secured Credit Facility Agent and holders of more than fifty percent in number and two-thirds in amount of the Senior Secured Term Loan Claims in their sole and absolute discretion, through a cash payment and maturity will be extended to April 30, 2016. Holders of Senior Secured Term Loan Claims will also receive the New Class B Common Stock in Reorganized Otelco, which will represent 7.5% of the total economic and voting interests in Reorganized Otelco (subject to future dilution by equity issued to senior management under the Management Equity Plan). |
|
Otelcos Subordinated Notes, including the Subordinated Notes held through Otelcos Income Deposit Securities, will be cancelled. Each holder of the Companys outstanding Subordinated Notes, including Subordinated Notes held through Income Deposit Securities, shall receive its pro rata share of the New Class A Common Stock, representing 92.5% of the total economic and voting interest in Reorganized Otelco, subject to dilution on account of the Management Equity Plan. |
|
Otelcos existing Class A Common Stock, held through Otelcos Income Deposit Securities, will be cancelled, and holders of equity interests will not receive a distribution under the Plan. |
|
The Senior Secured Revolving Loan will be reinstated, as amended, with availability of up to $5 million, pursuant to the New Senior Secured Credit Facility Agreement. |
|
The recovery of holders of unsecured claims against the Company that arose prior to the bankruptcy may be paid in full. However, if the holders of Subordinated Notes vote against the Plan, then unsecured creditors will receive a 40.5% recovery on their claims. |
Q: |
What is chapter 11 bankruptcy? |
A: |
Chapter 11 is the principal business reorganization chapter of the Bankruptcy Code. It allows a company to continue to manage and operate its business while restructuring its debt, without the need to liquidate and go out of business. In chapter 11 bankruptcies, the debtor formulates a plan of reorganization that includes the companys proposed new debt and capital structure. The chapter 11 plan is then voted on by the companys creditors, and will be approved by the bankruptcy court if it meets certain criteria under the Bankruptcy Code. Once the chapter 11 plan is approved, and the conditions to consummating the |
chapter 11 plan are met, the company can exit bankruptcy with the new capital structure that was approved as part of its chapter 11 plan. |
Q: |
What is the Plan? |
A: |
The Plan attached to this Disclosure Statement as Exhibit 1 is the Companys means for implementing the Restructuring Transaction described above. |
Q: |
Why does the Company need to file bankruptcy in order to restructure? |
A: |
The documents that govern the Companys debt, such as the Senior Secured Credit Facility Agreement and the Subordinated Notes Indenture, would require unanimous consent from all holders of Senior Secured Term Loan Claims and Subordinated Notes in order to complete the Restructuring Transaction. |
Q: |
Why does the recovery of trade creditors depend on whether holders of Subordinated Notes vote in favor of the Plan? |
A: |
If the class of holders of Subordinated Notes does not vote to accept the Plan, then in order to obtain nonconsensual confirmation of the Plan, it must be demonstrated to the Bankruptcy Court that the Plan does not discriminate unfairly and is fair and equitable with respect to holders of Subordinated Notes. A plan of reorganization does not discriminate unfairly with respect to a non-accepting class if the value of the cash and/or securities to be distributed to the non-accepting class is equal to, or |
otherwise fair when compared to, the value of the distributions to other classes whose legal rights are the same as those of the non-accepting class. Since holders of unsecured claims against the Company, such as trade creditors, have similar legal rights as holders of the Subordinated Notes, the Company may not be allowed by the Bankruptcy Code to pay unsecured creditors in full if the class of holders of Subordinated Notes votes to reject the Plan. Because of this, the Plan provides that if the class of Subordinated Notes rejects the Plan, holders of unsecured claims, such as trade creditors, will receive a 40.5% recovery on their prepetition claims against the Company. Whether such holders accept or reject the Plan, holders of Subordinated Notes will receive the same recovery under the Plan. |
Q: |
I hold Subordinated Notes (including Subordinated Notes held through Income Deposit Securities). Why should I vote in favor of the Plan? |
A: |
The Company is required by law to satisfy the claims of the lenders under the Senior Secured Credit Facility before it may distribute anything to unsecured creditors. Once those senior claims are satisfied, the Subordinated Notes and trade creditors are entitled to the rest of the value of the Company. |
Q: |
What are the expected results of the Restructuring Transaction? |
A: |
The Company expects that the Restructuring Transaction, if successful, will reduce its debt leverage and better position the Company to compete in the telecommunications industry. Specifically, upon the completion of the Restructuring Transaction, the Company expects that its indebtedness, including accrued and unpaid interest, will be reduced from an estimated $270 million as of September 30, 2012 to |
an estimated $142 million at the closing of the Restructuring Transaction, consisting of approximately $142 million in principal amount of the New Term Loan Obligations, or such higher amount agreed to in writing by the Senior Secured Credit Facility Agent and holders of more than fifty percent in number and two-thirds in amount of the Senior Secured Term Loan Claims in their sole and absolute discretion, and $5 million in New Revolving Loan Obligations. |
Q: |
What is the Plan Support Agreement? |
A: |
The Plan Support Agreement is a contract that the Company entered into with several of its largest stakeholders, whereby the parties agreed to support the Plan on the terms described. These supporting creditors include holders of 100% in dollar amount of Senior Secured Term Loan Claims and 100% in dollar amount of Senior Secured Revolving Loan Claims that have agreed to, among other things, vote all of their Claims against the Debtors in favor of the Plan, to support the terms of the Plan and to take all reasonable actions necessary and appropriate to consummate the Plan in a timely manner, so long as certain restructuring milestones set forth in the Plan Support Agreement are met. Such milestones include a deadline for consummation of the Plan by June 30, 2013, which will be automatically extended for an additional sixty days if the Company has not obtained certain necessary regulatory approvals, as may be further extended with the consent of the Plan Support Parties. The Plan Support Agreement is attached to this Disclosure Statement as Exhibit 2, which also includes a term sheet for the Restructuring Transaction. Other parties have the ability to sign the Plan Support Agreement in accordance with its terms. |
Q: |
Why is it important that I vote to accept the Plan? |
A: |
The Company believes that the Restructuring Transaction will reduce its debt leverage and better position the Company to compete in the telecommunications industry. If the Company does not complete the Restructuring Transaction, because the conditions to the Plan have not been satisfied, the Company believes that the value of the business will erode due to the uncertainty surrounding the Companys ability to meet its obligations under the Senior Secured Term Loan, which matures on October 31, 2013. As a result, the Companys value may decrease to an amount below the amount outstanding under the Senior Secured Credit Facility, and the Company would not have sufficient liquidity to meet its obligations under the Subordinated Notes. |
Q: |
I am a holder of Otelcos Income Deposit Securities. How will I be affected by the Plan and the Restructuring Transaction? |
A: |
Each of Otelcos Income Deposit Securities represent one share of Class A Common Stock in Otelco, and $7.50 in principal amount of Subordinated Notes. Under the Plan, the Class A Common Stock will be cancelled. In exchange, for the Subordinated Notes held through their Income Deposit Securities, existing holders of Otelcos Income Deposit Securities will receive their pro rata share of the New Class A Common Stock in Reorganized Otelco, representing 92.5% of the economic and voting interest in Reorganized Otelco (subject to dilution by equity issued under the Management Equity Plan). |
Q: |
What risks should I consider in deciding whether or not to vote in favor of the Plan? |
A: |
In deciding whether to vote in favor of the Plan, you should carefully consider the discussion of risks and uncertainties affecting the Company, the Plan, the New Senior Secured Credit Facility and the New |
Common Stock described in Article XI of this Disclosure Statement titled Certain Risk Factors to be Considered, which do not represent the only risks that the Company faces. Additional risks and uncertainties not currently known to the Company, or that the Company currently deems immaterial, may also affect your investment decision and/or impair the Companys business operations. You should carefully consider the other information and data included in this Disclosure Statement and information and data contained in the Companys public filings for other risks that may affect you. |
Q: |
Has the board of directors adopted a position on the Plan? |
A: |
Yes. The Companys board of directors has voted in favor of pursuing the Plan. |
Q: |
Who is soliciting votes on the Plan? |
A: |
The Company is soliciting votes on the Plan. |
Q: |
Who is eligible to vote for the Plan? |
A: |
Generally, holders of claims or interests in classes that are impaired (other than classes that receive no distribution under the Plan and are, therefore, deemed to reject the Plan) are eligible to vote on the Plan. As more fully explained in this Disclosure Statement, a claim or equity interest is impaired, generally speaking, if its treatment under a plan of reorganization alters the terms of, or rights associated with, that claim or interest. The holders of the Senior Secured Term Loan Claims, the holders of Senior Secured Revolving Loan Claims and the holders of Subordinated Notes (including holders of Subordinated Notes held through Otelcos Income Deposit Securities) are all deemed to be impaired and, consequently, may vote on the Plan. |
Q: |
What will I receive under the Plan if it is confirmed and consummated? |
A: |
Each holder of the Senior Secured Term Loan Claims shall receive its pro rata share of (i) term loan obligations of the Company under the New Senior Secured Credit Facility of not more than $142 million, or such higher amount agreed to in writing by the Senior Secured Credit Facility Agent and holders of more than fifty percent in number and two-thirds in amount of the Senior Secured Term Loan Claims in their sole and absolute discretion, maturing on April 30, 2016, (ii) the Senior Secured Term Loan Payment, and (iii) the New Class B Common Stock representing 7.5% of the total economic and voting interest in Reorganized Otelco, subject to dilution on account of the Management Equity Plan. |
Q: |
What vote is needed to confirm the Plan? |
A: |
The Bankruptcy Code provides that only holders of claims and interests entitled to vote and who actually cast a ballot will be counted for purposes of determining whether acceptances from a sufficient number of holders of impaired claims or interests in an impaired class have been received to allow the Plan to be confirmed under the Bankruptcy Code, including confirmation through the nonconsensual cramdown provisions of section 1129(b) of the Bankruptcy Code with respect to non-accepting impaired classes. Failure by a holder to deliver an original, duly completed and signed Ballot will not be counted as a vote to accept or reject the Plan. |
Q: |
When is the deadline for submitting Ballots? |
A: |
The Ballots must be received by the Voting Agent by 5:00 p.m. (Eastern Prevailing Time) on March 15, 2013, unless the Company extends the date until which Ballots will be accepted. Except to the extent the Company so determines in its sole discretion or as permitted by the Bankruptcy Court, Ballots that are received after the Voting Deadline will not be counted or otherwise used by the Company in connection with the Companys request for confirmation of the Plan (or any permitted modification thereof). |
Q: |
How do I vote on the Plan? |
You may also consult your broker, dealer, commercial bank, trust company or other nominee for assistance. |
Only the holders of Senior Secured Term Loan Claims, Senior Secured Revolving Loan Claims and Subordinated Notes (including holders of Income Deposit Securities) as of February 8, 2013 are eligible to vote on the Plan. |
Q: |
Can I revoke my vote? |
A: |
Any party that has previously submitted a properly completed Ballot to the Voting Agent before the Voting Deadline may revoke such Ballot and change its vote by submitting to the Voting Agent, before the Voting Deadline, a subsequent properly completed Ballot for acceptance or rejection of the Plan. However, Plan Support Parties are restricted in their ability to revoke their vote pursuant to the terms of the Plan Support Agreement. |
Q: |
Whom do I call if I have any questions about how to submit Ballots or any other questions relating to the Plan? |
A: |
Questions and requests for assistance with respect to the procedures for voting on the Plan, as well as requests for additional copies of this Disclosure Statement and the Ballot, may be directed to the Voting Agent at its address and telephone number set forth in this Disclosure Statement. |
Page |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
ARTICLE I. INTRODUCTION |
1 | ||||||||||
1.1 |
General |
1 | |||||||||
1.2 |
The Confirmation Hearing |
2 | |||||||||
1.3 |
Classification of Claims and Interests |
2 | |||||||||
1.4 |
Voting; Holders of Claims Entitled to Vote |
2 | |||||||||
1.5 |
Important Matters |
4 | |||||||||
ARTICLE II. SUMMARY OF PLAN AND CLASSIFICATION AND TREATMENT OF CLAIMS AND INTERESTS THEREUNDER |
4 | ||||||||||
ARTICLE III. BUSINESS DESCRIPTION AND CIRCUMSTANCES THAT LED TO THE SOLICITATION |
6 | ||||||||||
3.1 |
General |
6 | |||||||||
3.2 |
Industry Overview |
7 | |||||||||
3.3 |
Products and Services |
8 | |||||||||
3.4 |
Service Agreements with Carriers |
9 | |||||||||
3.5 |
Facilities |
9 | |||||||||
3.6 |
Employees |
9 | |||||||||
3.7 |
Regulation |
9 | |||||||||
3.8 |
The Companys Capital Structure |
9 | |||||||||
ARTICLE IV. EVENTS LEADING TO THE SOLICITATION |
10 | ||||||||||
4.1 |
Events Leading to the Solicitation |
10 | |||||||||
4.2 |
The Plan Support Agreement |
11 | |||||||||
ARTICLE V. REASONS FOR THE SOLICITATION |
11 | ||||||||||
ARTICLE VI. THE PLAN |
12 | ||||||||||
6.1 |
Anticipated Events in a Chapter 11 Case |
12 | |||||||||
6.2 |
Summary of Distributions under the Plan |
13 | |||||||||
6.3 |
Settlement |
16 | |||||||||
6.4 |
Post-Confirmation Capital Structure of the Reorganized Debtors |
16 | |||||||||
6.5 |
Means for Implementation |
17 | |||||||||
6.6 |
Discharge |
21 | |||||||||
6.7 |
Vesting and Retention of Causes of Action |
21 | |||||||||
6.8 |
Survival of Certain Indemnification Obligations |
22 | |||||||||
6.9 |
Release, Injunction and Related Provisions |
22 | |||||||||
6.10 |
Objections to Claims and Interest |
26 | |||||||||
6.11 |
Executory Contracts |
26 | |||||||||
6.12 |
Conditions Precedent to Confirmation and Consummation of the Plan |
27 | |||||||||
6.13 |
Retention of Jurisdiction |
28 | |||||||||
6.14 |
Amendments |
29 | |||||||||
ARTICLE VII. CONFIRMATION OF THE PLAN |
29 | ||||||||||
7.1 |
Confirmation Hearing |
29 | |||||||||
7.2 |
Confirmation |
29 | |||||||||
7.3 |
Classification of Claims and Interests |
33 | |||||||||
7.4 |
Consummation |
34 | |||||||||
Page | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
ARTICLE VIII. ALTERNATIVES TO CONFIRMATION AND CONSUMMATION OF THE PLAN |
34 | ||||||||||
8.1 |
Alternative Plan(s) of Reorganization |
34 | |||||||||
8.2 |
Liquidation Under the Bankruptcy Code |
34 | |||||||||
8.3 |
Inaction/Maintenance of Status Quo |
34 | |||||||||
ARTICLE IX. SUMMARY OF VOTING PROCEDURES |
35 | ||||||||||
9.1 |
The Solicitation Package |
35 | |||||||||
9.2 |
Voting Deadline |
35 | |||||||||
9.3 |
Voting and Revocation Instructions |
35 | |||||||||
9.4 |
Note to Holders of Claims in the Voting Classes |
37 | |||||||||
9.5 |
Voting Tabulation |
38 | |||||||||
ARTICLE X. THE REORGANIZATION CASES |
38 | ||||||||||
10.1 |
Continuation of Business After the Petition Date |
38 | |||||||||
10.2 |
First Day Relief |
38 | |||||||||
10.3 |
Case Administration |
39 | |||||||||
ARTICLE XI. CERTAIN RISK FACTORS TO BE CONSIDERED |
40 | ||||||||||
11.1 |
Certain Bankruptcy Considerations |
40 | |||||||||
11.2 |
Risks Relating to the New Senior Secured Credit Facility Agreement and the New Common Stock |
45 | |||||||||
11.3 |
Risks Associated with the Business |
48 | |||||||||
ARTICLE XII. SECURITIES LAW MATTERS |
52 | ||||||||||
12.1 |
General |
52 | |||||||||
12.2 |
Issuance and Resale of the New Common Stock Under the Plan |
52 | |||||||||
12.3 |
Where You Can Find More Information |
53 | |||||||||
ARTICLE XIII. CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN |
53 | ||||||||||
13.1 |
Introduction |
53 | |||||||||
13.2 |
Federal Income Tax Consequences to the Company |
55 | |||||||||
13.3 |
Federal Income Tax Consequences to U.S. Holders of Certain Claims |
57 | |||||||||
13.4 |
Federal Income Tax Consequences to Non-U.S. Holders of Subordinated Notes Claims |
61 | |||||||||
13.5 |
Information Reporting and Backup Withholding |
62 | |||||||||
ARTICLE XIV. CONCLUSION |
63 |
|
Plan (Exhibit 1); |
|
Plan Support Agreement (Exhibit 2); |
|
Prepetition Organizational Chart (Exhibit 3); |
|
Audited Consolidated Financial Statements for the Company for the fiscal year ended December 31, 2011 (Exhibit 4); |
|
Liquidation Analysis (Exhibit 5); |
|
Reorganized Companys Projected Financial Information (Exhibit 6); and |
|
Valuation Analysis (Exhibit 7). |
1.1 |
General. |
1.2 |
The Confirmation Hearing. |
|
determine whether the solicitation of votes on the Plan was in compliance with section 1126 of the Bankruptcy Code; |
|
determine whether the Plan has been accepted by a sufficient number and amount of Class 1 Claims and 5 Claims; |
|
determine whether this Disclosure Statement contains adequate information within the meaning of section 1125(a) of the Bankruptcy Code; |
|
hear and determine objections, if any, to confirmation of the Plan that have not been previously disposed of; |
|
determine whether the Plan meets the confirmation requirements of the Bankruptcy Code; and |
|
determine whether to confirm the Plan. |
1.3 |
Classification of Claims and Interests. |
Class |
Designation |
Impairment |
Entitled to Vote |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Class 1 |
Senior Secured Term Loan Claims |
Yes |
Yes |
|||||||||||
Class 2 |
Senior Secured Revolving Loan Claims |
Yes |
Yes |
|||||||||||
Class 3 |
Other Secured Claims |
No |
No (Deemed to accept) |
|||||||||||
Class 4 |
Other Priority Claims |
No |
No (Deemed to accept) |
|||||||||||
Class 5 |
Subordinated Note Claims |
Yes |
Yes |
|||||||||||
Class 6 |
510(b) Subordinated Notes Claims |
Yes |
No (Deemed to reject) |
|||||||||||
Class 7 |
General Unsecured Claims |
No, unless Class 5 Subordinated Note Claims vote to reject the Plan |
No |
|||||||||||
Class 8 |
Existing Equity Interests |
Yes |
No (Deemed to reject) |
1.4 |
Voting; Holders of Claims Entitled to Vote. |
|
Claims in Classes 1, 2 and 5 are impaired and the holders of such Claims will receive distributions under the Plan. As a result, holders of Claims in Classes 1, 2 and 5 are entitled to vote to accept or reject the Plan; |
|
Claims in Classes 3 and 4 are unimpaired. As a result, holders of Claims in those Classes are deemed to have accepted the Plan and are not entitled to vote to accept or reject the Plan; |
|
Claims and Interests in Classes 6 and 8 are impaired and the holders of such Claims and Interests will not receive any distribution on account of such Interests. As a result, the holders of Claims and Interests in those Classes are deemed to have rejected the Plan and are not entitled to vote to accept or reject the Plan; and |
|
Claims in Class 7 are unimpaired unless Class 5 votes to reject the Plan. As a result, holders of Class 7 Claims will either be deemed to have accepted the Plan or be deemed to have rejected the Plan. If Class 5 votes to reject the Plan, the Debtors will seek confirmation of the Plan over the rejection of Class 5 and Class 7 pursuant to the provisions of section 1129(b) of the Bankruptcy Code. |
1.5 |
Important Matters. |
Class |
Claims and Interests |
Treatment |
Status |
Voting Rights |
Estimated Allowed Amount |
Projected Recovery |
|||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Class 1 |
Senior Secured Term Loan Claims |
Each holder of an Allowed Senior Secured Term Loan Claim shall retain its liens on its collateral which shall continue to secure the
New Term Loan Obligations and shall receive, in full and final satisfaction of its Allowed Senior Secured Term Loan Claims its Pro Rata share of: (a)
the New Term Loan Obligations under the New Senior Secured Credit Facility; (b) the Senior Secured Term Loan Payment; and (c) the New Class B Common
Stock, subject to dilution on account of the Management Equity Plan, as a fee for the extended maturity of the New Senior Secured Credit
Facility. |
Impaired |
Entitled to Vote |
$162.1 million |
100% |
|||||||||||||||||||||
Class |
Claims and Interests |
Treatment |
Status |
Voting Rights |
Estimated Allowed Amount |
Projected Recovery | |||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Class 2 |
Senior Secured Revolving Loan Claims |
In satisfaction of each Allowed Senior Secured Revolving Loan Claim, each Allowed Senior Secured Revolving Loan Claim shall either
be: (a) reinstated and amended on the Effective Date pursuant to the New Senior Secured Credit Facility Agreement; or (b) paid in full in Cash on the
relevant Distribution Date. |
Impaired |
Entitled to Vote |
$17,500 |
100% |
|||||||||||||||||||||
Class 3 |
Other Secured Claims |
Subject to the provisions of sections 502(b)(3) and 506(d) of the Bankruptcy Code, each holder of an Allowed Other Secured Claim
shall receive, at the Reorganized Debtors option: (a) the Reinstatement of such Claim; (b) payment in full in Cash of the Allowed amount of such
Other Secured Claim; (c) the delivery of the collateral securing any such Other Secured Claim and payment of any interest required under section 506(b)
of the Bankruptcy Code; (d) such other treatment rendering such Other Secured Claim Unimpaired; or (e) such other, less favorable treatment as may be
agreed between such holder and the Reorganized Debtors. |
Not Impaired |
Not Entitled to Vote (Deemed to Accept) |
$0 |
100% |
|||||||||||||||||||||
Class 4 |
Other Priority Claims |
In satisfaction of each Allowed Other Priority Claim, each holder thereof shall receive the following, at the option of the
Reorganized Debtors: (a) payment in full in Cash; (b) other treatment rendering such Other Priority Claim Unimpaired; or (c) such other, less favorable
treatment as may be agreed between such holder and the Reorganized Debtors. |
Not Impaired |
Not Entitled to Vote (Deemed to Accept) |
$7.6 million |
100% |
|||||||||||||||||||||
Class 5 |
Subordinated Notes Claims |
On the Effective Date, each holder of an Allowed Subordinated Notes Claim shall receive, in full and final satisfaction of its
Allowed Subordinated Notes Claim, its Pro Rata share of the Subordinated Notes Equity Distribution, subject to dilution on account of the Management
Equity Plan. |
Impaired |
Entitled to Vote |
$117.9 million |
40.5% |
|||||||||||||||||||||
Class 6 |
510(b) Subordinated Notes Claims |
On the Effective Date, all 510(b) Subordinated Notes Claims shall be cancelled. Holders of 510(b) Subordinated Notes Claims shall
receive no distribution on account of such Claims. |
Impaired |
Not Entitled to Vote (Deemed to Reject) |
$0 |
0% |
|||||||||||||||||||||
Class |
Claims and Interests |
Treatment |
Status |
Voting Rights |
Estimated Allowed Amount |
Projected Recovery | |||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Class 7 |
General Unsecured Claims |
In the event that holders of Class 5 Subordinated Notes Claims vote to accept the Plan, Class 7 General Unsecured Claims shall be an
unimpaired class under the Plan and each Allowed General Unsecured Claim shall, at the discretion of the Reorganized Debtors, be: (a) Reinstated as of
the Effective Date as an obligation of the Reorganized Debtors, and paid in accordance with the ordinary course terms for such Claim; (b) paid in full
in Cash on the relevant Distribution Date; or (c) receive such other treatment as may be agreed between such holder and the Reorganized Debtors. In the event that holders of Class 5 Subordinated Notes Claims vote to reject the Plan, Class 7 General Unsecured Claims shall be an impaired class under the Plan. Each Allowed General Unsecured Claim shall receive payment in Cash equal to 40.5% of the Allowed amount of such General Unsecured Claim in full and final satisfaction of such Allowed General Unsecured Claim. |
Unimpaired, unless Class 5 Subordinated Note Claims Vote to Reject the Plan |
Not Entitled to Vote |
$1.1 million2 |
100% or 40.5% |
|||||||||||||||||||||
Class 8 |
Existing Equity Interests |
On the Effective Date, all Existing Equity Interests shall be cancelled. Holders of Existing Equity Interests shall receive no
distribution on account of such Interests. |
Impaired |
Not Entitled to Vote (Deemed to Reject) |
N/A |
$0 |
2 |
As described in Section 10.2 hereof, the Company believes that the amount of General Unsecured Claims as of the Effective Date will be substantially less than the amount expressed herein. |
3.1 |
General. |
3.2 |
Industry Overview. |
(a) |
Local Services. |
(b) |
Competition from Cable Television Providers. |
(c) |
Competition from Internet Service Providers. |
(d) |
Competition for Transport Services. |
3.3 |
Products and Services. |
(a) |
Local Services. |
(b) |
Network Access. |
(c) |
Cable Television. |
(d) |
Internet. |
(e) |
Transport Services. |
3.4 |
Service Agreements with Carriers. |
3.5 |
Facilities. |
3.6 |
Employees. |
3.7 |
Regulation. |
3.8 |
The Companys Capital Structure. |
(a) |
Senior Secured Credit Facility. |
(b) |
Income Deposit Securities. |
(1) |
Subordinated Notes. |
(2) |
Class A Common Stock. |
4.1 |
Events Leading to the Solicitation. |
4.2 |
The Plan Support Agreement. |
(a) |
Additional Agreements. |
(b) |
Fiduciary Duties. |
6.1 |
Anticipated Events in a Chapter 11 Case. |
|
consult with the trustee or debtor in possession concerning the administration of the chapter 11 case; |
|
investigate the acts, conduct, assets, liabilities and financial condition of the debtor, the operation of the debtors business and the desirability of the continuance of such business and any other matter relevant to the case or to the formulation of a plan; |
|
participate in the formulation of a plan, advise those represented by such committee of such committees determinations as to any plan formulated and collect and file with the court acceptances or rejections of a plan; |
|
request the appointment of a trustee or examiner under section 1104 of the Bankruptcy Code; and |
|
perform such other services as are in the interest of those represented by the committee. |
6.2 |
Summary of Distributions under the Plan. |
(a) |
Treatment of Unclassified Claims. |
(1) |
Administrative Claims. |
(2) |
Priority Tax Claims. |
(3) |
Fee Claims. |
(b) |
Treatment of Classified Claims. |
(1) |
Class 1 Senior Secured Term Loan Claims. |
(2) |
Class 2 Senior Secured Revolving Loan Claims. |
(3) |
Class 3 Other Secured Claims. |
(4) |
Class 4 Other Priority Claims. |
(5) |
Class 5 Subordinated Notes Claims. |
(6) |
Class 6 510(b) Subordinated Notes Claims. |
(7) |
Class 7 General Unsecured Claims. |
(8) |
Class 8 Existing Equity Interests. |
6.3 |
Settlement. |
6.4 |
Post-Confirmation Capital Structure of the Reorganized Debtors. |
(a) |
The New Senior Secured Credit Facility. |
(1) |
New Term Loan Obligations. |
(2) |
New Revolving Loan Obligations. |
(b) |
Authorization and Issuance of New Common Stock. |
(c) |
New Stockholders Agreement and New Registration Rights Agreement. |
6.5 |
Means for Implementation. |
(a) |
Restructuring Transaction. |
(b) |
Corporate Action. |
(c) |
Effectuating Documents and Further Transactions. |
(d) |
Intercompany Claims and Interests. |
(e) |
Managers and Officers of the Reorganized Debtors. |
(f) |
Directors of the Reorganized Debtors. |
(g) |
Management Equity Plan. |
(h) |
General Distribution Mechanics. |
(i) |
Withholding Taxes. |
(j) |
Exemption from Certain Transfer Taxes. |
(k) |
Exemptions from Securities Laws. |
(l) |
Setoffs and Recoupments. |
(m) |
Insurance Preservation and Proceeds. |
(n) |
No Change of Control. |
6.6 |
Discharge. |
(a) |
Scope. |
(b) |
Injunction. |
(c) |
Releases of Liens. |
(d) |
Cancellation of Stock/Instruments. |
6.7 |
Vesting and Retention of Causes of Action. |
6.8 |
Survival of Certain Indemnification Obligations. |
6.9 |
Release, Injunction and Related Provisions. |
(a) |
Satisfaction of Claims and Interests. |
(b) |
Debtor Releases. |
(c) |
Releases by Holders of Claims and Interests. |
in any manner arising from, in whole or in part, any act or omission, transaction, event or other occurrence taking place on or prior to the Effective Date in any way relating to the Debtors, the Reorganized Debtors, the Reorganization Cases, the purchase or sale or rescission of the purchase or sale of any security of the Debtors or the Reorganized Debtors, the subject matter of, or the transactions or events giving rise to, any Claim or Interest that is treated in the Plan, the business or contractual arrangements between any Debtor and any Releasing Party, the restructuring of Claims or Interests prior to or in the Reorganization Cases, the Plan or the Disclosure Statement or any related contracts, instruments, releases, agreements and documents; provided, however, that in no event shall anything in Section 8.4(c) of the Plan be construed as a release of any (i) Intercompany Claim or (ii) Persons fraud, gross negligence, or willful misconduct, as determined by a Final Order, for matters with respect to the Debtors.
Debtors and Reorganized Debtors; or (D) enjoins a governmental unit from asserting or enforcing outside this Court any liability described in this paragraph.
(d) |
Injunction. |
(e) |
Exculpation. |
(f) |
Injunction Related to Exculpation. |
(g) |
Exclusive Jurisdiction. |
6.10 |
Objections to Claims and Interest. |
6.11 |
Executory Contracts. |
(a) |
Executory Contracts and Unexpired Leases. |
(b) |
Bar Date for Rejection Damages. |
(c) |
Cure. |
6.12 |
Conditions Precedent to Confirmation and Consummation of the Plan. |
(a) |
Conditions Precedent to Confirmation. |
(b) |
Conditions to the Effective Date. |
(c) |
Waiver of Conditions Precedent. |
(d) |
Effect of Non-Occurrence of the Conditions to Consummation. |
(e) |
Withdrawal of Plan. |
(f) |
Cramdown. |
6.13 |
Retention of Jurisdiction. |
6.14 |
Amendments. |
7.1 |
Confirmation Hearing. |
7.2 |
Confirmation. |
(a) |
Confirmation Requirements. |
|
the plan complies with the applicable provisions of the Bankruptcy Code; |
|
the proponent of the plan has complied with the applicable provisions of the Bankruptcy Code; |
|
the plan has been proposed in good faith and not by any means forbidden by law; |
|
any plan payment made or to be made by the proponent under the plan for services or for costs and expenses in, or in connection with, the chapter 11 case, or in connection with the plan and incident to the case, has been approved by, or is subject to the approval of, the Bankruptcy Court as reasonable; |
|
the proponent has disclosed the identity and affiliations of any individual proposed to serve, after confirmation of the plan, as a director, officer, or voting trustee of the debtor, an affiliate of the debtor participating in the plan with the debtor, or a successor to the debtor under the plan. The appointment to, or continuance in, such office by such individual must be consistent with the interests of creditors and equity security holders and with public policy and the proponent must have disclosed the identity of any insider that the reorganized debtor will employ or retain, and the nature of any compensation for such insider; |
|
with respect to each impaired class of claims or interests, either each holder of a claim or interest of such class has accepted the plan, or will receive or retain under the plan, on account of such claim or interest, property of a value, as of the effective date of the plan, that is not less than the amount that such holder would receive or retain if the debtor were liquidated on such date under chapter 7 of the Bankruptcy Code; |
|
each class of claims or interests has either accepted the plan or is not impaired under the plan; |
|
except to the extent that the holder of a particular claim has agreed to a different treatment of such claim, the plan provides that allowed administrative expenses and priority claims will be paid in full on the effective date; |
|
if a class of claims is impaired, at least one (1) impaired class of claims has accepted the plan, determined without including any acceptance of the plan by any insider holding a claim in such class; and |
|
confirmation of the plan is not likely to be followed by the liquidation, or the need for further financial reorganization, of the debtor or any successor to the debtor under the plan, unless such liquidation or reorganization is proposed in the plan. |
|
the Plan satisfies all of the statutory requirements of chapter 11 of the Bankruptcy Code; |
|
the Debtors have complied or will have complied with all of the requirements of chapter 11 of the Bankruptcy Code; and |
|
the Plan has been proposed in good faith. |
(1) |
Acceptance. |
(2) |
Unfair Discrimination and Fair and Equitable Test. |
(3) |
Feasibility; Financial Projections; Valuation. |
(b) |
Valuation of the Reorganized Debtors. |
(c) |
Best Interests Test. |
7.3 |
Classification of Claims and Interests. |
7.4 |
Consummation. |
8.1 |
Alternative Plan(s) of Reorganization. |
THE COMPANY BELIEVES THAT CONFIRMATION OF THE PLAN IS PREFERABLE TO ANY ALTERNATIVE PLAN OR TRANSACTION BECAUSE THE PLAN MAXIMIZES THE AMOUNT OF DISTRIBUTIONS TO ALL HOLDERS OF CLAIMS AND INTERESTS AND ANY ALTERNATIVE TO CONFIRMATION OF THE PLAN WILL RESULT IN SUBSTANTIAL DELAYS IN THE DISTRIBUTION OF ANY RECOVERIES. |
8.2 |
Liquidation Under the Bankruptcy Code. |
8.3 |
Inaction/Maintenance of Status Quo. |
9.1 |
The Solicitation Package. |
|
the applicable Ballots and applicable voting instructions; |
|
a pre-addressed, postage pre-paid return envelope; and |
|
the Disclosure Statement with all exhibits, including the Plan and any other supplements or amendments to these documents. |
9.2 |
Voting Deadline. |
9.3 |
Voting and Revocation Instructions. |
(a) |
Instructions for Beneficial Owners of Subordinated Notes. |
|
If your Ballot has already been signed (or prevalidated) by your nominee (as described below), you can vote on the Plan by completing the information requested on the Ballot, indicating your vote on the Ballot, and returning the completed original Ballot in the enclosed, pre-addressed, postage pre-paid envelope so that it is actually received by the Voting Agent before the Voting Deadline. |
|
If your Ballot has not been signed (or prevalidated) by your nominee, you can vote on the Plan by completing the information requested on the Ballot, indicating your vote on the Ballot, and returning the completed original Ballot to your nominee in sufficient time for your nominee then to process the Ballot and return it to the Voting Agent so that it is actually received by the Voting Agent before the Voting Deadline. If no pre-addressed, postage pre-paid envelope was enclosed for this purpose, the nominee must be contacted for instructions. |
(b) |
Instructions for Nominees of Holders of Subordinated Notes. |
|
If you have signed (or prevalidated) a Ballot by: (1) signing the Ballot; (2) indicating on the Ballot the name of the registered holder and the amount of securities held by the nominee; and (3) forwarding such Ballot together with the solicitation package and other materials requested to be forwarded, to the beneficial owner for voting, then the beneficial owner must vote on the Plan by completing the information requested on the Ballot, indicating its vote on the Ballot, and returning the completed original Ballot in the enclosed, pre-addressed, postage pre-paid envelope so that it is actually received by the Voting Agent before the Voting Deadline. A list of the beneficial owners to whom pre-validated Ballots were delivered should be maintained by the nominee for inspection for at least one year from the Voting Deadline. |
|
If you have not signed (or prevalidated) the appropriate Ballot, then you, as nominee, may obtain the votes of beneficial owners by forwarding to the beneficial owners the unsigned Ballots, together with this Disclosure Statement, a return envelope provided by, and addressed to, the nominee, and other materials requested to be forwarded. Each such beneficial owner may vote on the Plan by completing the information requested on the Ballot, indicating its vote on the Ballot, and returning the completed original Ballot to you, as nominee. After collecting the Ballots, you, as nominee, should, in turn, complete a master Ballot compiling the votes and other information from the Ballot, execute the master Ballot, and deliver the master Ballot to the Voting Agent so that it is actually received by the Voting Agent before the Voting Deadline. All Ballots returned by beneficial owners should either be forwarded to the Voting Agent (along with the master Ballot) or be retained by nominees for inspection for at least one year from the Voting Deadline. |
(c) |
Releases under the Plan. |
(d) |
Withdrawal or Revocation of a Ballot. |
|
be received prior to the Voting Deadline by the Voting Agent at its address; |
|
specify the name and/or customer account number of the beneficial owner whose vote on the Plan is being withdrawn or revoked; |
|
contain the description of the Claim as to which a vote on the Plan is withdrawn or revoked; and |
|
be signed by the beneficial owner of the Claim who executed the Ballot reflecting the vote being withdrawn or revoked, or by the nominee who executed the master Ballot reflecting the vote being withdrawn or revoked, as applicable, in each case in the same manner as the original signature on the Ballot or master Ballot, as the case may be. |
9.4 |
Note to Holders of Claims in the Voting Classes. |
|
the holder has received and reviewed a copy of the Disclosure Statement and Solicitation Package and acknowledges that the solicitation is being made pursuant to the terms and conditions set forth therein; |
|
the holder has cast the same vote with respect to all Claims in the same respective class; and |
|
no other Ballots with respect to the same Claim have been cast, or, if any other Ballots have been cast with respect to such Claims, then any such Ballots are thereby revoked. |
9.5 |
Voting Tabulation. |
10.1 |
Continuation of Business After the Petition Date. |
10.2 |
First Day Relief. |
|
an order authorizing the Debtors to use cash claimed as collateral; |
|
an order authorizing the Debtors (i) to continue the Debtors current cash management system, (ii) to maintain prepetition bank accounts, (iii) to continue use of existing business forms and existing books and records and (iv) to continue their current investment guidelines and invest their available cash in the customary manner and consistent with past practices; |
|
an order authorizing the Debtors to pay (i) prepetition employee wages, salaries and other compensation, (ii) prepetition employee business expenses, and (iii) other miscellaneous employee expenses and employee benefits; |
|
an order authorizing the Debtors to pay prepetition obligations to certain independent sales agents; and |
|
such other orders as are typical in reorganization cases or that may be necessary for the preservation of the Debtors assets or for confirmation of the Plan. |
10.3 |
Case Administration. |
(a) |
Joint Administration of the Reorganization Cases. |
(b) |
Scheduling of Combined Disclosure Statement and Confirmation Hearing and Approval of Prepetition Solicitation Procedures. |
(c) |
Schedules and Statement of Financial Affairs. |
(d) |
Retention of Professionals. |
11.1 |
Certain Bankruptcy Considerations. |
(a) |
General. |
(b) |
Failure to Confirm the Plan. |
(c) |
Improper Solicitation of Acceptances. |
|
the plan of reorganization be transmitted to substantially all creditors and other interest holders entitled to vote; |
|
the time prescribed for voting is not unreasonably short; and |
|
the solicitation of votes is in compliance with any applicable non-bankruptcy law, rule or regulation governing the adequacy of disclosure in such solicitation or, if no such law, rule or regulation exists, votes be solicited only after the disclosure of adequate information. |
(d) |
Failure to Receive Bankruptcy Court Approval of the Compromises and Settlements Contemplated by the Plan. |
(e) |
Alternative Plans of Reorganization May Be Proposed. |
(f) |
Failure to Consummate the Plan. |
(g) |
Failure of Class 5 to Accept the Plan. |
(h) |
Extended Stay in Bankruptcy Proceeding. |
|
customers could seek alternative sources of products and services from the Companys competitors, including competitors that have comparatively greater financial resources and that are in little or no relative financial or operational distress; |
|
employees could be distracted from performance of their duties or more easily attracted to other career opportunities; and |
|
vendors, suppliers or agents and other business partners could terminate their relationship with the Company or require financial assurances or enhanced performance. |
(i) |
Failure to Receive Bankruptcy Court Approval of Use of Cash Collateral. |
(j) |
Changes, Amendments, Modification or Withdrawal of the Plan. |
(k) |
Termination of the Plan Support Agreement in Certain Circumstances. |
(l) |
Distributions Will Be Delayed. |
(m) |
Objections to Classification of Claims and Interests. |
(n) |
Failure to Assume Executory Contracts and Unexpired Leases. |
(o) |
Failure to Receive Bankruptcy Court Approval of First Day Orders. |
(p) |
Failure to Receive Requisite Regulatory Approvals. |
11.2 |
Risks Relating to the New Senior Secured Credit Facility Agreement and the New Common Stock. |
(a) |
Variances from Financial Projections. |
(b) |
Substantial Leverage. |
|
make it more difficult for the Reorganized Company to satisfy current and future debt obligations; |
|
make it more difficult for the Reorganized Company to obtain additional financing for working capital, capital expenditures, acquisitions or general corporate purposes; |
|
require the Reorganized Company to dedicate a substantial portion of cash flows from operating activities to the payment of principal and interest on the indebtedness, thereby reducing the funds available to the Reorganized Company for working capital, capital expenditures, acquisitions and general corporate purposes; |
|
place the Reorganized Company at a competitive disadvantage to its competitors that are not as highly leveraged as the Reorganized Company; |
|
make the Reorganized Company vulnerable to interest rate fluctuations, if it incurs any indebtedness that bears interest at variable rates; |
|
impair the Reorganized Companys ability to adjust to changing industry and market conditions; and |
|
make the Reorganized Company more vulnerable in the event of a downturn in general economic conditions or in its business or changing market conditions or regulations. |
(c) |
Ability to Service Debt. |
(d) |
Value of the New Common Stock. |
(e) |
The New Common Stock will be Subordinated to the New Senior Secured Credit Facility. |
(f) |
Issuance of New Common Stock. |
|
the number of holders of the New Common Stock; |
|
the Reorganized Companys operating performance and financial condition; |
|
the market for similar securities; |
|
the Reorganized Companys credit rating; and |
|
the interest of securities dealers in making a market in the New Common Stock. |
(g) |
Dividend Policies. |
11.3 |
Risks Associated with the Business. |
(a) |
The Reorganization Cases May Negatively Impact the Reorganized Companys Future Operations. |
(b) |
Competitiveness of the Telecommunications Industry. |
(c) |
Changes in the Regulation of the Telecommunications Industry. |
(d) |
Restrictive Covenants in the New Senior Secured Credit Facility Agreement Will Limit Operating Flexibility. |
|
incur additional indebtedness and issue preferred stock and certain redeemable capital stock; |
|
make certain types of restricted payments, including investments and acquisitions; |
|
pay dividends on the New Common Stock; |
|
sell certain assets; |
|
enter into specified transactions with affiliates; |
|
create a number of liens; |
|
consolidate, merge or transfer all or substantially all of the Companys assets; and |
|
change the nature of its business. |
(e) |
Ability to Integrate New Technologies and Provide New Services. |
(f) |
Network and Infrastructure Disruptions. |
|
the Companys territories could have significant weather events that physically damage access lines and network infrastructure; |
|
the Companys rural geography creates the risk of security breaches, break-ins and sabotage; |
|
power surges and outages, computer viruses and hacking and software and hardware defects that are beyond the Companys control; and |
|
unusual spikes in demand and capacity limitations in the Companys or its suppliers networks. |
(g) |
Misappropriation, Misuse, Leakage, Falsification and Accidental Release or Loss of Information Maintained in the Companys Information Technology Systems. |
(h) |
Geographic Concentration. |
(i) |
Retaining Key Personnel. |
(j) |
Loss of Access Lines. |
(k) |
Changes in Economic and Non-Economic Conditions. |
(l) |
Decreases in Network Access Charges or Rates for Local Services. |
(m) |
Reduction in Universal Service Fund High Cost Loop Support. |
(n) |
Loss of Protected Status Under Interconnection Rules. |
12.1 |
General. |
12.2 |
Issuance and Resale of the New Common Stock Under the Plan. |
12.3 |
Where You Can Find More Information. |
13.1 |
Introduction. |
13.2 |
Federal Income Tax Consequences to the Company. |
(a) |
Cancellation of Indebtedness and Reduction of Tax Attributes. |
(b) |
Section 382 Limitation on NOLs. |
(c) |
Alternative Minimum Tax. |
13.3 |
Federal Income Tax Consequences to U.S. Holders of Certain Claims. |
(a) |
Tax Securities. |
(b) |
U.S. Holders of Senior Secured Term Loan Claims (Class 1). |
(1) |
Exchange of Senior Secured Term Loan Claims for New Term Loan Obligations, Senior Secured Term Loan Payment and New Common Stock. |
(2) |
New Term Loan Obligations. |
(3) |
New Common Stock. |
(c) |
U.S. Holders of Senior Secured Revolving Loan Claims (Class 2). |
(d) |
U.S. Holders of Subordinated Notes Claims (Class 5). |
(1) |
Exchange of Subordinated Notes, including Subordinated Notes Held Through Existing Income Deposit Securities, for New Common Stock. |
(2) |
Cancellation of Common Stock for No Consideration. |
(3) |
New Common Stock. |
(e) |
Other Considerations. |
13.4 |
Federal Income Tax Consequences to Non-U.S. Holders of Subordinated Notes Claims. |
(a) |
Consequences to Non-U.S. Holders of the Exchange. |
|
such Non-U.S. Holder does not own, actually or constructively,
10% or more of the total combined voting power of all classes of the voting stock of the Company, is not a controlled foreign corporation related,
directly or indirectly, to the Company through stock ownership, and is not a bank receiving interest described in Section 881(c)(3)(A) of the
IRC; |
|
the statement requirement set forth in Section 871(h) or Section
881(c) of the IRC has been fulfilled with respect to the beneficial owner, as discussed below; |
|
such Non-U.S. Holder is not an individual who is present in the
United States for 183 days or more in the taxable year of disposition or who is subject to special rules applicable to former citizens and residents of
the United States; and |
|
such gain or interest income is not effectively connected with the conduct by such Non-U.S. Holder of a trade or business in the United States. |
(b) |
Consequences to Non-U.S. Holders of Holding the New Common Stock. |
(1) |
Dividends on New Common Stock. |
(2) |
Gain on Disposition of New Common Stock. |
|
such Non-U.S. Holder is an individual who is present in the
United States for 183 days or more in the taxable year of disposition or who is subject to special rules applicable to former citizens and residents of
the United States; or |
|
the Company is or has been during a specified testing period a
U.S. real property holding corporation for U.S. federal income tax purposes. |
13.5 |
Information Reporting and Backup Withholding. |
Respectfully submitted, |
||||||||||
Otelco Inc. on behalf of itself and its Affiliates |
||||||||||
By: |
/s/ Michael Weaver |
|||||||||
Michael Weaver President and Chief Executive Officer |
|
Plan (Exhibit 1) |
|
Plan Support Agreement (Exhibit 2) |
|
Prepetition Organizational Chart (Exhibit 3) |
|
Audited Consolidated Financial Statements for the Company for the fiscal year ended December 31, 2011 (Exhibit 4) |
|
Liquidation Analysis (Exhibit 5) |
|
Reorganized Companys Projected Financial Information (Exhibit 6) |
|
Valuation Analysis (Exhibit 7) |
X |
||||||||||
In re |
: |
Chapter 11 |
||||||||
: |
||||||||||
Otelco Inc., et al. |
: |
Case No. [] ([]) |
||||||||
: |
||||||||||
Debtors. |
: |
(Jointly Administered) |
||||||||
X |
WILLKIE FARR & GALLAGHER LLP 787 Seventh Avenue New York, New York 10019-6099 (212) 728-8000 |
||||||
-AND- |
||||||
YOUNG CONAWAY STARGATT & TAYLOR, LLP Rodney Square 1000 North King Street Wilmington, Delaware 19801 (302) 856-6600 |
||||||
Counsel for Debtors and Debtors in Possession |
Page |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
ARTICLE I DEFINITIONS AND INTERPRETATIONS |
1 | ||||||||||
ARTICLE II METHOD OF CLASSIFICATION OF CLAIMS AND INTERESTS AND GENERAL PROVISIONS |
8 | ||||||||||
2.1 |
General Rules of Classification |
8 | |||||||||
2.2 |
Settlement |
9 | |||||||||
2.3 |
Substantive Consolidation of Debtors for Purposes of Voting, Confirmation and Distribution |
9 | |||||||||
2.4 |
Administrative, Fee and Priority Tax Claims |
9 | |||||||||
2.5 |
Deadline for Filing Fee Claims |
9 | |||||||||
2.6 |
U.S. Trustee Fees |
10 | |||||||||
ARTICLE III CLASSIFICATION OF CLAIMS AND INTERESTS |
10 | ||||||||||
ARTICLE IV TREATMENT OF UNIMPAIRED CLASSES |
10 | ||||||||||
4.1 |
Administrative Claims |
10 | |||||||||
4.2 |
Priority Tax Claims |
10 | |||||||||
4.3 |
Fee Claims |
11 | |||||||||
4.4 |
Other Secured Claims Class 3 |
11 | |||||||||
4.5 |
Other Priority Claims Class 4 |
11 | |||||||||
ARTICLE V TREATMENT OF IMPAIRED CLASSES |
11 | ||||||||||
5.1 |
Senior Secured Term Loan Claims Class 1 |
11 | |||||||||
5.2 |
Senior Secured Revolving Loan Claims Class 2 |
11 | |||||||||
5.3 |
Subordinated Notes Claims Class 5 |
12 | |||||||||
5.4 |
510(b) Subordinated Notes Claims Class 6 |
12 | |||||||||
5.5 |
General Unsecured Claims Class 7 |
12 | |||||||||
5.6 |
Existing Equity Interests Class 8 |
12 | |||||||||
ARTICLE VI NEW COMMON STOCK |
12 | ||||||||||
6.1 |
Authorization and Issuance of New Common Stock |
12 | |||||||||
6.2 |
New Stockholders Agreement and New Registration Rights Agreement |
12 | |||||||||
ARTICLE VII MEANS OF IMPLEMENTATION |
13 | ||||||||||
7.1 |
Restructuring Transaction |
13 | |||||||||
7.2 |
Corporate Action |
13 | |||||||||
7.3 |
Effectuating Documents and Further Transactions |
13 | |||||||||
7.4 |
Intercompany Claims and Interests |
14 | |||||||||
7.5 |
Managers and Officers of the Reorganized Debtors |
14 | |||||||||
7.6 |
Directors of the Reorganized Debtors |
14 | |||||||||
7.7 |
Management Equity Plan |
14 | |||||||||
7.8 |
General Distribution Mechanics |
14 | |||||||||
7.9 |
Withholding Taxes |
16 | |||||||||
7.10 |
Exemption from Certain Transfer Taxes |
16 | |||||||||
7.11 |
Exemption from Securities Laws |
16 | |||||||||
7.12 |
Setoffs and Recoupments |
16 | |||||||||
7.13 |
Insurance Preservation and Proceeds |
16 | |||||||||
7.14 |
Solicitation of Debtors |
16 | |||||||||
7.15 |
No Change of Control |
17 | |||||||||
Page | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
ARTICLE VIII EFFECT OF THE PLAN ON CLAIMS AND INTERESTS |
17 | ||||||||||
8.1 |
Discharge |
17 | |||||||||
8.2 |
Vesting and Retention of Causes of Action |
18 | |||||||||
8.3 |
Survival of Certain Indemnification Obligations |
18 | |||||||||
8.4 |
Release of Claims |
18 | |||||||||
8.5 |
Objections to Claims and Interests |
21 | |||||||||
8.6 |
Amendments to Claims |
22 | |||||||||
8.7 |
Estimation of Claims |
22 | |||||||||
ARTICLE IX EXECUTORY CONTRACTS |
22 | ||||||||||
9.1 |
Executory Contracts and Unexpired Leases |
22 | |||||||||
9.2 |
Bar Date for Rejection Damages |
23 | |||||||||
9.3 |
Cure |
23 | |||||||||
ARTICLE X CONDITIONS PRECEDENT TO CONFIRMATION AND CONSUMMATION OF THE PLAN |
23 | ||||||||||
10.1 |
Conditions Precedent to Confirmation |
23 | |||||||||
10.2 |
Conditions to the Effective Date |
24 | |||||||||
10.3 |
Waiver of Conditions Precedent |
24 | |||||||||
10.4 |
Effect of Non-Occurrence of the Conditions to Consummation |
24 | |||||||||
10.5 |
Withdrawal of the Plan |
25 | |||||||||
10.6 |
Cramdown |
25 | |||||||||
ARTICLE XI ADMINISTRATIVE PROVISIONS |
25 | ||||||||||
11.1 |
Retention of Jurisdiction |
25 | |||||||||
11.2 |
Governing Law |
27 | |||||||||
11.3 |
Time |
27 | |||||||||
11.4 |
Monetary Figures |
27 | |||||||||
11.5 |
Retiree Benefits |
27 | |||||||||
11.6 |
Amendments |
27 | |||||||||
11.7 |
Successors and Assigns |
27 | |||||||||
11.8 |
Controlling Documents |
28 | |||||||||
11.9 |
Creditors Committee |
28 | |||||||||
11.10 |
Termination of Professionals |
28 | |||||||||
11.11 |
Hart-Scott-Rodino Antitrust Improvements Act |
28 | |||||||||
11.12 |
Notices |
28 | |||||||||
11.13 |
Reservation of Rights |
29 |
EXHIBITS IN THE PLAN SUPPLEMENT |
||||||||||
Exhibit 1 |
New Senior Secured Credit Facility Agreement |
|||||||||
Exhibit 2 |
New Stockholders Agreement |
|||||||||
Exhibit 3 |
List of Officers and Directors |
|||||||||
Exhibit 4 |
Certificate of Incorporation of Otelco Inc. |
|||||||||
Exhibit 5 |
Bylaws of Otelco Inc. |
|||||||||
Exhibit 6 |
Management Equity Plan |
|||||||||
Exhibit 7 |
New Registration Rights Agreement |
|||||||||
A.
|
Definitions. |
B.
|
Interpretation; Application of Definitions and Rules of Construction. |
C.
|
Appendices and Plan Documents. |
2.1
|
General Rules of Classification. |
2.2
|
Settlement. |
2.3.
|
Substantive Consolidation of Debtors for Purposes of Voting, Confirmation and Distribution. |
2.4
|
Administrative, Fee and Priority Tax Claims. |
2.5
|
Deadline for Filing Fee Claims. |
2.6
|
U.S. Trustee Fees. |
Class |
Designation |
Impairment |
Entitled to Vote |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Class 1 |
Senior Secured Term Loan Claims |
Yes |
Yes |
|||||||||||
Class 2 |
Senior Secured Revolving Loan Claims |
Yes |
Yes |
|||||||||||
Class 3 |
Other Secured Claims |
No |
No (Deemed to accept) |
|||||||||||
Class 4 |
Other Priority Claims |
No |
No (Deemed to accept) |
|||||||||||
Class 5 |
Subordinated Note Claims |
Yes |
Yes |
|||||||||||
Class 6 |
510(b) Subordinated Notes Claims |
Yes |
No (Deemed to reject) |
|||||||||||
Class 7 |
General Unsecured Claims |
No, unless Class 5 Subordinated Note Claims vote to reject the Plan |
No |
|||||||||||
Class 8 |
Existing Equity Interests |
Yes |
No (Deemed to reject) |
4.1
|
Administrative Claims. |
4.2
|
Priority Tax Claims. |
4.3
|
Fee Claims. |
4.4
|
Other Secured Claims Class 3. |
4.5
|
Other Priority Claims Class 4. |
5.1
|
Senior Secured Term Loan Claims Class 1. |
(a)
|
the New Term Loan Obligations under the New Senior Secured Credit Facility; |
(b)
|
the Senior Secured Term Loan Payment; and |
(c)
|
the New Class B Common Stock, subject to dilution on account of the Management Equity Plan, as a fee for the extended maturity of the New Senior Secured Credit Facility. |
5.2
|
Senior Secured Revolving Loan Claims Class 2. |
5.3
|
Subordinated Notes Claims Class 5. |
5.4
|
510(b) Subordinated Notes Claims Class 6. |
5.5
|
General Unsecured Claims Class 7. |
(a)
|
In the event that holders of Class 5 Subordinated Notes Claims vote to accept the Plan, Class 7 General Unsecured Claims shall be an unimpaired class under the Plan and each Allowed General Unsecured Claim shall, at the discretion of the Reorganized Debtors, be: (i) Reinstated as of the Effective Date as an obligation of the Reorganized Debtors, and paid in accordance with the ordinary course terms for such Claim; (ii) paid in full in Cash on the relevant Distribution Date; or (iii) receive such other treatment as may be agreed between such holder and the Reorganized Debtors. |
(b)
|
In the event that holders of Class 5 Subordinated Notes Claims vote to reject the Plan, Class 7 General Unsecured Claims shall be an impaired class under the Plan. Each Allowed General Unsecured Claim shall receive payment in Cash equal to 40.5% of the Allowed amount of such General Unsecured Claim in full and final satisfaction of such Allowed General Unsecured Claim. |
5.6
|
Existing Equity Interests Class 8. |
6.1
|
Authorization and Issuance of New Common Stock. |
6.2
|
New Stockholders Agreement and New Registration Rights Agreement. |
7.1
|
Restructuring Transaction. |
7.2
|
Corporate Action. |
7.3
|
Effectuating Documents and Further Transactions. |
7.4
|
Intercompany Claims and Interests. |
7.5
|
Managers and Officers of the Reorganized Debtors. |
7.6
|
Directors of the Reorganized Debtors. |
7.7
|
Management Equity Plan. |
7.8
|
General Distribution Mechanics. |
7.10
|
Exemption from Certain Transfer Taxes. |
7.11
|
Exemption from Securities Laws. |
7.12
|
Setoffs and Recoupments. |
7.13
|
Insurance Preservation and Proceeds. |
7.14
|
Solicitation of Debtors. |
7.15
|
No Change of Control. |
8.1
|
Discharge. |
8.2
|
Vesting and Retention of Causes of Action. |
8.3
|
Survival of Certain Indemnification Obligations. |
8.4
|
Release of Claims. |
successor to the Debtors, or any representative of the Debtors estates appointed or selected pursuant to sections 1103, 1104, or 1123(b)(3) of the Bankruptcy Code or under chapter 7 of the Bankruptcy Code) all claims (as such term claim is defined in section 101(5) of the Bankruptcy Code), obligations, debts, suits, judgments, damages, demands, rights, causes of action, remedies and liabilities whatsoever, (other than all rights, remedies and privileges to enforce the Plan, the Plan Supplement and the contracts, instruments, releases, indentures and other agreements or documents (including, without limitation, the Plan Documents) delivered thereunder) whether liquidated or unliquidated, fixed or contingent, matured or unmatured, known or unknown, foreseen or unforeseen, existing or hereafter arising, in law, equity or otherwise that are based on, related to, or in any manner arising from, in whole or in part, any act, omission, transaction, event or other occurrence taking place on or prior to the Effective Date in any way relating to the Debtors, the Reorganized Debtors, the subject matter of, or the transactions or events giving rise to, any Claim or Interest that is treated in the Plan, the business or contractual arrangements between any Debtor and any Released Party, the restructuring of Claims or Interests prior to or in the Reorganization Cases, the parties released pursuant to this Section 8.4(b), the Reorganization Cases, the Plan or the Disclosure Statement, or any related contracts, instruments, releases, agreements and documents, or upon any other act or omission, transaction, agreement, event or other occurrence taking place on or before the Effective Date , and that could have been asserted by or on behalf of the Debtors, the debtors in possession or their Estates, or any of their affiliates, whether directly, indirectly, derivatively or in any representative or any other capacity, individually or collectively, in their own right or on behalf of the holder of any Claim or Interest or other entity, against any Released Party; provided, however, that in no event shall anything in this Section 8.4(b) be construed as a release of any (i) Intercompany Claim or (ii) Persons fraud, gross negligence, or willful misconduct, as determined by a Final Order, for matters with respect to the Debtors.
constitute the Bankruptcy Courts finding that such releases are (i) in exchange for the good and valuable consideration provided by the Debtors and the other Released Parties, representing good faith settlement and compromise of the claims released herein, (ii) in the best interests of the Debtors and all holders of Claims and Interests, (iii) fair, equitable, and reasonable, (iv) approved after due notice and opportunity for hearing, and (v) a bar to any of the Releasing Parties asserting any claim or cause of action released by the Releasing Parties against any of the Debtors and the other Released Parties or their respective property.
or any of their property, or any direct or indirect transferee of any property of, or direct or indirect successor in interest to, any of the foregoing Persons, or any property of any such transferee or successor; (iii) creating, perfecting or otherwise enforcing in any manner, directly or indirectly, any encumbrance of any kind against the Debtors, the Reorganized Debtors, or the Estates or any of their property, or any direct or indirect transferee of any property of, or successor in interest to, any of the foregoing Persons; (iv) acting or proceeding in any manner, in any place whatsoever, that does not conform to or comply with the provisions of the Plan to the full extent permitted by applicable law; (v) asserting any right of setoff, subrogation or recoupment of any kind against any obligation due from the Debtors, the Reorganized Debtors, the Estates or any of their property, or any direct or indirect transferee of any property of, or successor in interest to, any of the foregoing Persons; (vi) commencing or continuing, in any manner or in any place, any action that does not comply with or is inconsistent with the provisions of the Plan; provided, further, that the Releasing Parties are, with respect to Claims or Interests held by such parties, permanently enjoined after the Confirmation Date from taking any actions referred to in clauses (i) through (vi) above against the Released Parties or any direct or indirect transferee of any property of, or direct or indirect successor in interest to, any of the Released Parties or any property of any such transferee or successor; provided, however, that nothing contained herein shall preclude any Person from exercising its rights, or obtaining benefits, directly and expressly provided to such entity pursuant to and consistent with the terms of the Plan, the Plan Supplement and the contracts, instruments, releases, agreements and documents delivered in connection with the Plan.
8.5
|
Objections to Claims and Interests. |
8.6
|
Amendments to Claims. |
8.7
|
Estimation of Claims. |
9.1
|
Executory Contracts and Unexpired Leases. |
9.2
|
Bar Date for Rejection Damages. |
9.3
|
Cure. |
10.1
|
Conditions Precedent to Confirmation. |
10.2
|
Conditions to the Effective Date. |
10.3
|
Waiver of Conditions Precedent. |
10.4
|
Effect of Non-Occurrence of the Conditions to Consummation. |
10.5
|
Withdrawal of the Plan. |
10.6
|
Cramdown. |
11.1
|
Retention of Jurisdiction. |
11.2
|
Governing Law. |
11.3
|
Time. |
11.4
|
Monetary Figures. |
11.5
|
Retiree Benefits. |
11.6
|
Amendments. |
11.7
|
Successors and Assigns. |
11.8
|
Controlling Documents. |
11.9
|
Creditors Committee. |
11.10
|
Termination of Professionals. |
11.11
|
Hart-Scott-Rodino Antitrust Improvements Act. |
11.12
|
Notices. |
(a)
|
if to the Debtors: |
Otelco Inc. 505 Third Avenue East Oneconta, Alabama 35121 |
||||||||||
Attention: |
Chief Executive Officer |
|||||||||
with copies to: |
||||||||||
Willkie Farr & Gallagher LLP 787 Seventh Avenue New York, New York 10019 |
||||||||||
Attention: |
Rachel C. Strickland, Esq. Jack M. Tracy II, Esq. |
|||||||||
Telecopy: |
(212) 728-8111 |
|||||||||
E-mail: |
rstrickland@willkie.com jtracy@willkie.com |
|||||||||
Young Conaway Stargatt & Taylor, LLP Rodney Square 1000 North King Street Wilmington, Delaware 19801 |
||||||||||
Attention: |
Edmon L. Morton, Esq. |
|||||||||
Telecopy: |
(302) 571-1253 |
|||||||||
E-mail: |
emorton@ycst.com |
(b) |
if to the Senior Secured Credit Facility Lenders or the Senior Credit Facility Agent: |
General Electric Capital Corporation 201 Merritt 7 Norwalk, CT 06851 |
||||||||||
Attention: |
Tom Costello |
|||||||||
E-mail: |
thomas.costello@ge.com |
|||||||||
with copies to: |
||||||||||
King & Spalding 1180 Peachtree Street, NE Atlanta, GA 30309 |
||||||||||
Attention: |
Sarah Borders, Esq. |
|||||||||
Telecopy: |
(404) 572-5100 |
|||||||||
E-mail: |
sborders@kslaw.com |
11.13
|
Reservation of Rights. |
Respectfully submitted, |
||||||||||
OTELCO INC., a Delaware corporation, on behalf of itself and its subsidiaries |
||||||||||
By: |
||||||||||
Name: Michael Weaver Title: Chief Executive Officer |
Page |
||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
1 |
AMOUNT AND TERMS OF CREDIT |
2 | ||||||||||||
1.1 |
Credit Facilities |
2 | ||||||||||||
1.2 |
[Intentionally Omitted] |
4 | ||||||||||||
1.3 |
Prepayments |
4 | ||||||||||||
1.4 |
Use of Proceeds |
6 | ||||||||||||
1.5 |
Interest and Applicable Margins |
6 | ||||||||||||
1.6 |
[Intentionally Omitted] |
7 | ||||||||||||
1.7 |
[Intentionally Omitted] |
7 | ||||||||||||
1.8 |
Cash Management Systems |
7 | ||||||||||||
1.9 |
Fees |
8 | ||||||||||||
1.10 |
Receipt of Payments |
8 | ||||||||||||
1.11 |
Application and Allocation of Payments |
8 | ||||||||||||
1.12 |
Loan Account and Accounting |
8 | ||||||||||||
1.13 |
Indemnity |
9 | ||||||||||||
1.14 |
Access |
9 | ||||||||||||
1.15 |
Taxes |
10 | ||||||||||||
1.16 |
Capital Adequacy; Increased Costs; Illegality |
10 | ||||||||||||
1.17 |
Single Loan |
12 | ||||||||||||
2 |
CONDITIONS PRECEDENT |
12 | ||||||||||||
2.1 |
Conditions to the Effectiveness of this Agreement |
12 | ||||||||||||
2.2 |
Further Conditions to Each Loan |
13 | ||||||||||||
3 |
REPRESENTATIONS AND WARRANTIES |
14 | ||||||||||||
3.1 |
Corporate Existence; Compliance with Law |
14 | ||||||||||||
3.2 |
Executive Offices, Collateral Locations, FEIN |
15 | ||||||||||||
3.3 |
Corporate Power, Authorization, Enforceable Obligations |
15 | ||||||||||||
3.4 |
Financial Statements and Projections |
15 | ||||||||||||
3.5 |
[Intentionally Omitted] |
16 | ||||||||||||
3.6 |
Ownership of Property; Liens |
16 | ||||||||||||
3.7 |
Labor Matters |
16 | ||||||||||||
3.8 |
Ventures, Subsidiaries and Affiliates; Outstanding Stock and Indebtedness |
17 | ||||||||||||
3.9 |
Government Regulation |
17 | ||||||||||||
3.10 |
Margin Regulations |
17 | ||||||||||||
3.11 |
Taxes |
17 | ||||||||||||
3.12 |
ERISA |
18 | ||||||||||||
3.13 |
No Litigation |
19 | ||||||||||||
3.14 |
Brokers |
19 | ||||||||||||
3.15 |
Intellectual Property |
19 | ||||||||||||
3.16 |
Full Disclosure; Perfection of Liens |
19 | ||||||||||||
3.17 |
Environmental Matters |
19 | ||||||||||||
3.18 |
Insurance |
20 | ||||||||||||
3.19 |
Accounts |
20 | ||||||||||||
3.20 |
Government Contracts |
20 |
Page | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
3.21 |
Customer and Trade Relations |
20 | ||||||||||||
3.22 |
Agreements and Other Documents |
20 | ||||||||||||
3.23 |
Solvency |
21 | ||||||||||||
3.24 |
[Intentionally Omitted] |
21 | ||||||||||||
3.25 |
[Intentionally Omitted] |
21 | ||||||||||||
3.26 |
[Intentionally Omitted] |
21 | ||||||||||||
3.27 |
Capitalization |
21 | ||||||||||||
3.28 |
OFAC |
21 | ||||||||||||
3.29 |
Patriot Act |
21 | ||||||||||||
4 |
FINANCIAL STATEMENTS AND INFORMATION |
22 | ||||||||||||
4.1 |
Reports and Notices |
22 | ||||||||||||
4.2 |
Communication with Accountants |
22 | ||||||||||||
5 |
AFFIRMATIVE COVENANTS |
22 | ||||||||||||
5.1 |
Maintenance of Existence and Conduct of Business |
22 | ||||||||||||
5.2 |
Payment of Charges |
22 | ||||||||||||
5.3 |
Books and Records |
23 | ||||||||||||
5.4 |
Insurance; Damage to or Destruction of Collateral |
23 | ||||||||||||
5.5 |
Compliance with Laws |
24 | ||||||||||||
5.6 |
Supplemental Disclosure |
24 | ||||||||||||
5.7 |
Intellectual Property |
25 | ||||||||||||
5.8 |
Environmental Matters |
25 | ||||||||||||
5.9 |
Landlords Agreements, Mortgagee Agreements, Bailee Letters and Real Estate Purchases |
25 | ||||||||||||
5.10 |
[Intentionally Omitted] |
26 | ||||||||||||
5.11 |
CoBank Capital |
26 | ||||||||||||
5.12 |
Further Assurances |
26 | ||||||||||||
5.13 |
Subsidiaries and Collateral |
26 | ||||||||||||
5.14 |
[Intentionally Omitted] |
26 | ||||||||||||
5.15 |
Change of Law Applicable to Mid-Maine Telecom |
26 | ||||||||||||
5.16 |
Change of Law Applicable to War Telephone |
27 | ||||||||||||
5.17 |
Post-Closing Regulatory Deliverables |
27 | ||||||||||||
5.18 |
Sale Covenant |
28 | ||||||||||||
6 |
NEGATIVE COVENANTS |
29 | ||||||||||||
6.1 |
Mergers, Subsidiaries, Etc. |
29 | ||||||||||||
6.2 |
Investments; Loans and Advances |
30 | ||||||||||||
6.3 |
Indebtedness |
31 | ||||||||||||
6.4 |
Employee Loans and Affiliate Transactions |
32 | ||||||||||||
6.5 |
Capital Structure and Business |
32 | ||||||||||||
6.6 |
Guaranteed Indebtedness |
33 | ||||||||||||
6.7 |
Liens |
33 | ||||||||||||
6.8 |
Sale of Stock and Assets |
34 | ||||||||||||
6.9 |
ERISA |
34 | ||||||||||||
6.10 |
Financial Covenants |
34 | ||||||||||||
6.11 |
Hazardous Materials |
34 |
Page | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
6.12 |
Sale/Leasebacks |
35 | ||||||||||||
6.13 |
Cancellation of Indebtedness |
35 | ||||||||||||
6.14 |
Restricted Payments |
35 | ||||||||||||
6.15 |
Change of Corporate Name or Location; Change of Fiscal Year |
35 | ||||||||||||
6.16 |
No Impairment of Intercompany Transfers |
35 | ||||||||||||
6.17 |
No Speculative Transactions |
36 | ||||||||||||
6.18 |
[Intentionally Omitted] |
36 | ||||||||||||
6.19 |
Changes Relating to Material Contracts |
36 | ||||||||||||
6.20 |
[Intentionally Omitted] |
36 | ||||||||||||
6.21 |
Designated Senior Debt |
36 | ||||||||||||
6.22 |
Limitations on Accumulation of Funds |
36 | ||||||||||||
6.23 |
Limitations on Creation of Subsidiaries |
36 | ||||||||||||
6.24 |
Financial Advisors |
37 | ||||||||||||
7 |
TERM |
37 | ||||||||||||
7.1 |
Termination |
37 | ||||||||||||
7.2 |
Survival of Obligations Upon Termination of Financing Arrangements |
37 | ||||||||||||
8 |
EVENTS OF DEFAULT; RIGHTS AND REMEDIES |
37 | ||||||||||||
8.1 |
Events of Default |
37 | ||||||||||||
8.2 |
Remedies |
39 | ||||||||||||
8.3 |
Waivers by Credit Parties |
39 | ||||||||||||
9 |
ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT |
39 | ||||||||||||
9.1 |
Assignment and Participations |
39 | ||||||||||||
9.2 |
Appointment of Agent |
41 | ||||||||||||
9.3 |
Agents Reliance, Etc. |
41 | ||||||||||||
9.4 |
GE Capital and Affiliates |
42 | ||||||||||||
9.5 |
Lender Credit Decision |
42 | ||||||||||||
9.6 |
Indemnification |
42 | ||||||||||||
9.7 |
Successor Agent |
42 | ||||||||||||
9.8 |
Setoff and Sharing of Payments |
43 | ||||||||||||
9.9 |
Advances; Payments; Non-Funding Lenders; Information; Actions in Concert |
43 | ||||||||||||
10 |
SUCCESSORS AND ASSIGNS |
46 | ||||||||||||
10.1 |
Successors and Assigns |
46 | ||||||||||||
11 |
MISCELLANEOUS |
46 | ||||||||||||
11.1 |
Complete Agreement; Modification of Agreement |
46 | ||||||||||||
11.2 |
Amendments and Waivers; Joinder Agreement |
46 | ||||||||||||
11.3 |
Fees and Expenses |
48 | ||||||||||||
11.4 |
No Waiver |
49 | ||||||||||||
11.5 |
Remedies |
49 | ||||||||||||
11.6 |
Severability |
49 | ||||||||||||
11.7 |
Conflict of Terms |
49 | ||||||||||||
11.8 |
Confidentiality |
49 |
Page | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
11.9 |
GOVERNING LAW |
50 | ||||||||||||
11.10 |
Notices |
50 | ||||||||||||
11.11 |
Section Titles |
51 | ||||||||||||
11.12 |
Counterparts |
51 | ||||||||||||
11.13 |
WAIVER OF JURY TRIAL |
51 | ||||||||||||
11.14 |
Press Releases and Related Matters |
51 | ||||||||||||
11.15 |
Reinstatement |
51 | ||||||||||||
11.16 |
Advice of Counsel |
51 | ||||||||||||
11.17 |
No Strict Construction |
51 | ||||||||||||
11.18 |
Effect of Amendment and Restatement of the Existing Credit Agreement |
51 |
Annex A (Recitals) |
|
Definitions |
||||||||
Annex B (Section 1.2) |
|
[Intentionally Omitted] |
||||||||
Annex C (Section 1.8) |
|
Cash Management System |
||||||||
Annex D (Section 2.1(a)) |
|
Closing Checklist |
||||||||
Annex E (Section 4.1(a)) |
|
Financial Statements and Projections Reporting |
||||||||
Annex F (Section 4.1(b)) |
|
Collateral Reports |
||||||||
Annex G (Section 6.10) |
|
Financial Covenants |
||||||||
Annex H (Section 9.9(a)) |
|
Lenders Wire Transfer Information |
||||||||
Annex I (Section 11.10) |
|
Notice Addresses |
||||||||
Annex J (from Annex A |
||||||||||
Commitments definition) |
|
Commitments as of Third Restatement Closing Date |
||||||||
Exhibit 1.1(a)(i) |
|
Form of Notice of Revolving Credit Advance |
||||||||
Exhibit 1.1(a)(ii) |
|
Form of Revolving Note |
||||||||
Exhibit 1.1(b) |
|
Form of Term Note |
||||||||
Exhibit 1.1(c)(i) |
|
Form of Notice of Swing Line Advance |
||||||||
Exhibit 1.1(c)(ii) |
|
Form of Swing Line Note |
||||||||
Exhibit 1.5(e) |
|
Form of Notice of Conversion/Continuation |
||||||||
Exhibit 6.3(a)(viii) |
|
Form of Subordinated Intercompany Note |
||||||||
Exhibit 6.23 |
|
Form of Joinder Agreement |
||||||||
Exhibit 9.1(a) |
|
Form of Assignment Agreement |
||||||||
Schedule A |
|
Consolidated EBITDA, Capital Expenditures and Interest Expense 2007/2008 |
||||||||
Schedule D-1 |
|
Execution Regulatory Approvals |
||||||||
Schedule D-2 |
|
Closing Regulatory Approvals |
||||||||
Schedule 1.1 |
|
Agents Representatives |
||||||||
Disclosure Schedule 1.4 |
|
Sources and Uses; Funds Flow Memorandum |
||||||||
Disclosure Schedule 3.1 |
|
Type of Entity; State of Organization; Telecommunications Approvals |
||||||||
Disclosure Schedule 3.2 |
|
Executive Offices, Collateral Locations, FEIN |
||||||||
Disclosure Schedule 3.4(a) |
|
Financial Statements |
||||||||
Disclosure Schedule 3.4(b) |
|
Pro Forma |
||||||||
Disclosure Schedule 3.6 |
|
Real Property |
||||||||
Disclosure Schedule 3.7 |
|
Labor Matters |
||||||||
Disclosure Schedule 3.8 |
|
Ventures, Subsidiaries and Affiliates; Outstanding Stock |
||||||||
Disclosure Schedule 3.11 |
|
Tax Matters |
||||||||
Disclosure Schedule 3.12 |
|
ERISA Plans |
||||||||
Disclosure Schedule 3.13 |
|
Litigation |
||||||||
Disclosure Schedule 3.14 |
|
Brokers |
||||||||
Disclosure Schedule 3.15 |
|
Intellectual Property |
||||||||
Disclosure Schedule 3.17 |
|
Hazardous Materials |
||||||||
Disclosure Schedule 3.18 |
|
Insurance |
||||||||
Disclosure Schedule 3.19 |
|
Accounts |
||||||||
Disclosure Schedule 3.20 |
|
Government Contracts |
||||||||
Disclosure Schedule 3.22 |
|
Material Agreements |
||||||||
Disclosure Schedule 3.25 |
|
Conditions to Governmental Authority Approvals of the Country Road Acquisition Agreement |
Disclosure Schedule 3.27 |
|
Capitalization |
||||||||
Disclosure Schedule 6.2 |
|
Investments |
||||||||
Disclosure Schedule 6.3 |
|
Indebtedness |
||||||||
Disclosure Schedule 6.4(a) |
|
Transactions with Affiliates |
||||||||
Disclosure Schedule 6.6 |
|
Guaranteed Indebtedness |
||||||||
Disclosure Schedule 6.7 |
|
Existing Liens |
1 |
AMOUNT AND TERMS OF CREDIT |
1.1
|
Credit Facilities. |
(a)
|
Revolving Credit Facility. |
(b)
|
Term Loan. |
(c)
|
Swing Line Facility. |
1.2
|
[Intentionally Omitted]. |
1.3
|
Prepayments. |
(a)
|
Voluntary Prepayments. Borrower may at any time on at least three (3) days prior notice to Agent and Lenders voluntarily prepay all of the Term Loan. In addition, subject to the following sentence, Borrower may at any time on at least three (3) days prior written notice to Agent and Lenders voluntarily prepay part of the Term Loan; provided that any such partial prepayment shall be in a minimum amount of $500,000. In addition, Borrower may at any time on at least 10 days prior written notice to Agent terminate the Revolving Loan Commitment; provided that upon such termination, all Revolving Loans and other Obligations shall be immediately due and payable in full. Any such voluntary prepayment and any such termination of the Revolving Loan Commitment must be accompanied by the payment of any LIBOR funding breakage costs in accordance with Section 1.13(b). Upon any such termination of the Revolving Loan Commitment, Borrowers right to request Revolving Credit Advances shall simultaneously be terminated. |
(b)
|
Mandatory Prepayments. |
1.5
|
Interest and Applicable Margins. |
1 |
An amount equal to 5% per annum |
1.11
|
Application and Allocation of Payments. |
1.13
|
Indemnity. |
1.15
|
Taxes. |
1.16
|
Capital Adequacy; Increased Costs; Illegality. |
2 |
CONDITIONS PRECEDENT |
2.2
|
Further Conditions to Each Loan. |
3 |
REPRESENTATIONS AND WARRANTIES |
3.12
|
ERISA. |
3.17
|
Environmental Matters. |
4.1
|
Reports and Notices. |
5.2
|
Payment of Charges. |
5.4
|
Insurance; Damage to or Destruction of Collateral. |
5.14
|
[Intentionally Omitted]. |
5.15
|
Change of Law Applicable to Mid-Maine Telecom. |
5.16
|
Change of Law Applicable to War Telephone. |
5.17
|
Post-Closing Regulatory Deliverables. |
5.18
|
Sale Covenant. |
provided that each Asset Sale pursuant to the foregoing clauses of this Section 6.8 (other than clauses (j) and (k)) shall be for Fair Market Value and (other than Section 6.8(i)) for proceeds consisting of at least 75% cash or, solely in the case of Section 6.8(m), 100% cash. With respect to any Asset Sale permitted by this Section 6.8 (other than Sections 6.8(h), (j) and (k)), subject to Section 1.3(b), Agent agrees on reasonable prior written notice to release its Lien on such assets or other properties in order to permit the applicable Credit Party to effect such disposition and shall execute and deliver to Borrower, at Borrowers expense, appropriate documentation to acknowledge the release of Lien in respect thereof as reasonably requested by Borrower. |
OTELCO INC. |
||||||||||
By: |
||||||||||
Name: Curtis L. Garner, Jr. |
||||||||||
Title: Chief Financial Officer |
||||||||||
OTELCO TELECOMMUNICATIONS LLC |
||||||||||
By: |
||||||||||
Name: Curtis L. Garner, Jr. |
||||||||||
Title: Chief Financial Officer |
||||||||||
OTELCO TELEPHONE LLC |
||||||||||
By: |
||||||||||
Name: Curtis L. Garner, Jr. |
||||||||||
Title: Chief Financial Officer |
||||||||||
HOPPER TELECOMMUNICATIONS LLC |
||||||||||
By: |
||||||||||
Name: Curtis L. Garner, Jr. |
||||||||||
Title: Chief Financial Officer |
||||||||||
BRINDLEE MOUNTAIN TELEPHONE LLC |
||||||||||
By: |
||||||||||
Name: Curtis L. Garner, Jr. |
||||||||||
Title: Chief Financial Officer |
BLOUNTSVILLE TELEPHONE COMPANY LLC |
||||||||||
By: |
||||||||||
Name: Curtis L. Garner, Jr. |
||||||||||
Title: Chief Financial Officer |
||||||||||
MID-MAINE TELECOM LLC |
||||||||||
By: |
||||||||||
Name: Curtis L. Garner, Jr. |
||||||||||
Title: Chief Financial Officer |
||||||||||
MID-MINE TELPLUS LLC |
||||||||||
By: |
||||||||||
Name: Curtis L. Garner, Jr. |
||||||||||
Title: Chief Financial Officer |
||||||||||
I-LAND INTERNET SERVICES LLC |
||||||||||
By: |
||||||||||
Name: Curtis L. Garner, Jr. |
||||||||||
Title: Chief Financial Officer |
||||||||||
COMMUNICATIONS DESIGN ACQUISITION LLC |
||||||||||
By: |
||||||||||
Name: Curtis L. Garner, Jr. |
||||||||||
Title: Chief Financial Officer |
||||||||||
CRC
COMMUNICATIONS LLC |
||||||||||
By: |
||||||||||
Name: Curtis L. Garner, Jr. |
||||||||||
Title: Chief Financial Officer |
||||||||||
SHOREHAM TELEPHONE LLC |
||||||||||
By: |
||||||||||
Name: Curtis L. Garner, Jr. |
||||||||||
Title: Chief Financial Officer |
||||||||||
SACO
RIVER TELEPHONE LLC |
||||||||||
By: |
||||||||||
Name: Curtis L. Garner, Jr. |
||||||||||
Title: Chief Financial Officer |
PINE
TREE TELEPHONE LLC |
||||||||||
By: |
||||||||||
Name: Curtis L. Garner, Jr. |
||||||||||
Title: Chief Financial Officer |
||||||||||
WAR
TELEPHONE LLC |
||||||||||
By: |
||||||||||
Name: Curtis L. Garner, Jr. |
||||||||||
Title: Chief Financial Officer |
||||||||||
OTELCO MID-MISSOURI LLC |
||||||||||
By: |
||||||||||
Name: Curtis L. Garner, Jr. |
||||||||||
Title: Chief Financial Officer |
||||||||||
GRANBY TELEPHONE LLC |
||||||||||
By: |
||||||||||
Name: Curtis L. Garner, Jr. |
||||||||||
Title: Chief Financial Officer |
||||||||||
GENERAL ELECTRIC CAPITAL CORPORATION, as Agent and a Lender |
||||||||||
By: |
||||||||||
Duly Authorized Signatory |
||||||||||
COBANK, ACB, as a Lender |
||||||||||
By: |
||||||||||
Name: |
||||||||||
Title: |
||||||||||
RAYMOND JAMES BANK, FSB, as a Lender |
||||||||||
By: |
||||||||||
Name: |
||||||||||
Title: |
||||||||||
UNION
BANK OF CALIFORNIA, N.A., as a Lender |
||||||||||
By: |
||||||||||
Name: |
||||||||||
Title: |
WEBSTER BANK, NATIONAL ASSOCIATION, as a Lender |
||||||||||
By: |
||||||||||
Name: |
||||||||||
Title: |
||||||||||
CIBC,
INC., as a Lender |
||||||||||
By: |
||||||||||
Name: |
||||||||||
Title: |
(A) |
If to Agent or GE Capital, at |
|||||
General Electric Capital Corporation 201 Merritt 7 Norwalk, CT 06851 Attention: Scott Javor, Account Manager Telecopier No.: 203-749-4166 Telephone No.: 203-956-4102 |
||||||
with a copy to: |
||||||
King & Spalding LLP 1180 Peachtree Street Atlanta, GA 30309Attention: Carolyn Z. Alford, Esq. Telecopier No.: 404-572-3551 Telephone No.: 404-572-5128 |
||||||
and |
||||||
General Electric Capital Corporation 201 Merritt 7 Norwalk, CT 06851 Attention: Corporate Counsel-Global Media & Communications Telecopier No.: 203-956-4258 Telephone No.: 203-956-4785 |
||||||
(B) |
If to CoBank, ACB, at |
|||||
CoBank, ACB 5500 South Quebec Street Greenwood Village, Colorado 80111 Attention: Communications and Energy Banking Group Telecopier No.: 303-224-2639 |
||||||
(C) |
If to Raymond James, FSB, at: |
|||||
Raymond James, FSB 710 Carrillon Parkway St. Petersburg, Florida 33716 Attention: Andrew D. Hahn Telecopier No.: 727-567-8830 Telephone No.: 727-567-7762 |
||||||
with a copy to: |
||||||
Raymond James, FSB 710 Carrillon Parkway St. Petersburg, Florida 33716 Attention: Loan Operations Administrator Telecopier No.: 866-597-4002 Telephone No.: 727-567-1815 |
(D) |
If to Union Bank of California, N.A., at: |
|||||
Union Bank of California, N.A 445 South Figueroa Street Los Angeles, California 90071 Attention: Richard Vian, Vice President Telecopier No.: 213-236-5747 Telephone No.: 213-236-6515 |
||||||
with a copy to: |
||||||
Union Bank of California, N.A 445 South Figueroa Street Los Angeles, California 90071 Attention: David Hill, Assistant Vice President Telecopier No.: 213-236-5747 Telephone No.: 213-236-6516 |
||||||
(E) |
If to Webster Bank, N.A. at: |
|||||
Webster Bank, N.A. City Place II 185 Asylum Street, 5th Floor Hartford, Connecticut 06103-3494 Attention: Madeliene Follett Telecopier No.: 860-692-1604 Telephone No.: 860-692-1603 |
||||||
with a copy to: |
||||||
Emmet, Marvin & Martin, LLP 120 Broadway, 32nd Floor New York, New York 10271 Telecopier No.: 212-238-3100 Telephone No.: 212-238-3127 |
||||||
(F) |
If to CIBC, at: |
|||||
CIBC, INC. 300 Madison Avenue, 4th floor New York, NY 10017 Attention: Michael Gewirtz, Director, CIBC World Markets Telephone No.: 212-856-3562 Telecopier No.: 212-856-3991 |
||||||
with a copy to: |
||||||
CIBC, INC. 300 Madison Avenue, 4th floor New York, NY 10017 Attention: Zhen Ma, Analyst, CIBC World Markets Telephone No.: 212-856-6766 Telecopier No.: 212-856-3991 |
(G) |
If to Borrower, at |
|||||
Otelco Inc. 505 3rd Avenue East Oneonta, Alabama 35121 Attention: President Telecopier No.: 205-274-8999 Telephone No.: 205-625-3574 |
||||||
with a copy to: |
||||||
Dorsey & Whitney LLP 51 West 52nd Street New York, New York 10019-6119 Attention: Steven Khadavi Telecopier No.: 646-390-6549 Telephone No.: 212-415-9200 |
||||||
(H) |
If to any other Credit Party, at |
|||||
c/o Otelco Inc. 505 3rd Avenue East Oneonta, Alabama 35121 Attention: President Telecopier No.: 205-274-8999 Telephone No.: 205-625-3574 |
||||||
with a copy to: |
||||||
Dorsey & Whitney LLP 51 West 52nd Street New York, New York 10019-6119 Attention: Steven Khadavi Telecopier No.: 646-390-6549 Telephone No.: 212-415-9200 |
Revolving Loan Commitment: |
$5,000,000 |
|||||
Total Term Loan Commitment: |
$[142,000,000] |
Revolving Loan Commitment (including a Swing Line Commitment of $1,500,000): |
$ |
|||||
Total Term Loan Commitment: |
$ |
Revolving Loan Commitment: |
$ |
|||||
Total Term Loan Commitment: |
$ |
Revolving Loan Commitment: |
$ |
|||||
Total Term Loan Commitment: |
$ |
Revolving Loan Commitment: |
$ |
|||||
Total Term Loan Commitment: |
$ |
Total Term Loan Commitment: |
$ |
(a) |
If to GE Capital: |
|||||||||
GE Capital Equity Investments, Inc. |
||||||||||
201 Merritt 7 |
||||||||||
Norwalk, CT 06851 |
||||||||||
Attention: Otelco Account Manager |
||||||||||
Telecopier No.: (513) 770-5332 |
||||||||||
with a copy to: |
||||||||||
King & Spalding LLP |
||||||||||
1180 Peachtree Street NE |
||||||||||
Atlanta, GA 30309 |
||||||||||
Attention: William G. Roche |
||||||||||
Telecopier No.: (404) 572-5133 |
||||||||||
Email: broche@kslaw.com |
||||||||||
(b) |
If to [ ]: |
|||||||||
[ ] |
||||||||||
(c) |
If to the Company: |
|||||||||
Otelco Inc. |
||||||||||
505 Third Avenue East |
||||||||||
Oneonta, AL 35121 |
||||||||||
Attention: Chief Financial Officer |
||||||||||
Telecopier No.: (205) 625-3523 |
||||||||||
Email: curtis@otelcotel.com |
||||||||||
with a copy to: |
||||||||||
Dorsey & Whitney LLP |
||||||||||
51 West 52nd Street |
||||||||||
New York, NY 10019 |
||||||||||
Attention: Steven Khadavi |
||||||||||
Telecopier No.: (646) 390-6549 |
||||||||||
Email: khadavi.steven@dorsey.com |
||||||||||
(d) |
if to any other Stockholder: |
|||||||||
at the address for such Person set forth on Schedule I hereto. |
OTELCO
INC. |
||||||||||
By: |
______________________________ |
|||||||||
Name: |
||||||||||
Title: |
||||||||||
GE
CAPITAL EQUITY INVESTMENTS, INC. |
||||||||||
By: |
______________________________ |
|||||||||
Name: |
||||||||||
Title: |
||||||||||
COBANK,
ACB |
||||||||||
By: |
______________________________ |
|||||||||
Name: |
||||||||||
Title: |
||||||||||
RAYMOND
JAMES BANK, FSB |
||||||||||
By: |
______________________________ |
|||||||||
Name: |
||||||||||
Title: |
||||||||||
UNION
BANK OF CALIFORNIA, N.A. |
||||||||||
By: |
______________________________ |
|||||||||
Name: |
||||||||||
Title: |
||||||||||
WEBSTER
BANK, NATIONAL ASSOCIATION |
||||||||||
By: |
______________________________ |
|||||||||
Name: |
||||||||||
Title: |
||||||||||
CIBC,
INC. |
||||||||||
By: |
______________________________ |
|||||||||
Name: |
||||||||||
Title: |
Stockholder |
Shares of Class B Common Stock |
|||||
GE Capital Equity Investments, Inc. |
||||||
CoBank, ACB |
||||||
Raymond James Bank, FSB |
||||||
Union Bank of California, N.A. |
||||||
Webster Bank, National Association |
||||||
CIBC, Inc. |
B.
|
Class A Common Stock. |
C.
|
Class B Common Stock. |
A.
|
Number and Election of Directors. |
B.
|
Director Voting. |
C.
|
Approval Rights. |
OTELCO
INC., a Delaware corporation |
||||||||||
By: |
__________________________________ |
|||||||||
Name: |
||||||||||
Title: |
1.1 |
Registered Office. |
1.2 |
Principal Office. |
1.3 |
Other Offices. |
2.1 |
Annual Meetings. |
2.2 |
Special Meetings. |
2.3 |
Notice of Meetings. |
2.4 |
Quorum. |
2.5 |
Organization. |
2.6 |
Order of Business. |
2.7 |
Voting. |
2.8 |
Inspection. |
2.9 |
List of Stockholders. |