UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June 22, 1999
WIRELESS ONE, INC.
(Exact name of Registrant as Specified in Charter)
Delaware 0-26836 72-1300837
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
2506 Lakeland Drive, Jackson, Mississippi 39208
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (601) 936-1515
1080 River Oaks Drive, Suite A150, Jackson, Mississippi
(Former Name or Former Address, if Changed Since Last Report)
INFORMATION TO BE INCLUDED IN THE REPORT
ITEM 5. OTHER EVENTS.
On June 23, 1999, Wireless One, Inc. (the "Company") issued a press
release attached as exhibit 99.1 hereto and incorporated herein by reference
announcing that the Company has received a commitment letter from MCI
Worldcom, Inc. to provide a debtor-in-possession financing facility (the
"DIP Facility"). The DIP Facility commitment letter is attached as exhibit
99.2 hereto and is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits.
99.1 Press Release dated June 23, 1999.
99.2 DIP Facility Commitment Letter from MCI Worldcom, Inc. dated
June 22, 1999.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undesigned hereunto duly authorized.
WIRELESS ONE, INC.,
a Delaware corporation
Date: June 25, 1999 /s/ Henry G. Schopfer, III
---------------------------
Henry G. Schopfer, III
Executive Vice President,
Chief Financial Officer, and
Secretary
EXHIBIT INDEX
Exhibits
- --------
(c) Exhibits.
99.1 Press Release dated June 23, 1999.
99.2 DIP Facility Commitment Letter from MCI Worldcom, Inc. dated June 22,
1999.
COMPANY LOGO
CONTACT: Henry G. Schopfer, III
Executive V.P. & Chief Financial Officer
2506 Lakeland Drive
Jackson, MS 39208
601.936.1515
FOR IMMEDIATE RELEASE
WIRELESS ONE, INC. ANNOUNCES MORE FAVORABLE TERMS OF $36 MILLION FINANCING
COMMITMENT
JACKSON, MISS., June 23, 1999 - Wireless One, Inc. (OTC Bulletin Board:
WIRL) announced today its agreement to a $36 million financing commitment
on more favorable terms than previously announced. The Company has signed
a commitment letter (the "Commitment Letter") from MCI Worldcom, Inc.
("MCI") to provide the financing. MCI is the Company's current debtor-in-
possession lender and has stated it is the holder of at least two-thirds
(in amount) of the Company's outstanding senior notes.
Henry Burkhalter, President and CEO stated, "On May 18, 1999, Wireless One
announced that the Company had received a commitment for $36 million of
financing from Cerberus Capital Management, L.P. ("Cerberus") that would
provide the Company with the funds needed to implement a plan of
reorganization and enable the Company to exit bankruptcy a stronger, more
viable company. Thereafter, MCI indicated that it would be willing to
provide similar financing on more favorable terms to the Company. The
Company then sought the best financing terms from both Cerberus and MCI and
is most appreciative of the efforts put forth by each of those companies.
As a result of those efforts, the interest rate will be 10 percent annually
payable, at the Company's option, either quarterly or at maturity, fees
will be one percent of the loan amount and there is no provision for
warrants to acquire equity in the Company."
The Commitment Letter contemplates that the financing would mature two
years from the closing date, except in certain circumstances, and thus
would provide the funds needed by the Company to repay the approximately
$20 million of existing debtor-in-possession financing and to fund the
future working capital needs of the Company. Yesterday, the Company
received authorization from the United States Bankruptcy Court for the
District of Delaware to enter into the Commitment Letter.
Upon consummation of the financing and so long as it is not repaid, MCI, as
lender, would have the right to approve any revisions to the proposed plan
of reorganization that the Company filed with the Bankruptcy Court on March
15, 1999, except for any revisions to the allocation of the equity of the
reorganized Company. As announced on May 14, 1999 and described in the
Company's Quarterly Report on Form 10-Q for the quarter ended March 31,
1999, the Company is reviewing the appropriateness of the provisions of the
plan of reorganization proposed by the Company in light of recent
developments in the Company's industry.
The closing of the financing is subject to a number of conditions,
including negotiation of final documentation and approval by the Bankruptcy
Court. A hearing on the approval of the financing is scheduled for July
20, 1999.
THE COMPANY
Wireless One, Inc.'s exclusive licenses in the MMDS and WCS spectrums
enable the Company to provide digital broadband (i.e., high-capacity)
wireless access (commonly known as "BWA") services (such as high-speed
Internet connection, data transmission and telephone). In addition, the
Company provides analog wireless multichannel subscription television
programming (commonly known as "wireless cable") services primarily in
small to mid-size markets in the southern and southeastern United States.
The Company has an eCommerce partnership with Netgateway, Inc. whereby
Netgateway has created an electronic mall at www.wirelessonemall.com. The
mall allows businesses to set up economical eCommerce "storefronts" to offer
products and services and gives consumers a convenient, no charge and secure
place to shop on the Internet.
The Company also has a marketing alliance with DIRECTV, Inc. that enables
it to provide expanded television programming via Direct Broadcast
Satellite signal.
FORWARD-LOOKING STATEMENTS
Certain statements made in this press release, including statements that
are not a statement of historical fact, may constitute "forward-looking"
statements as defined in the Securities Act of 1933, as amended. Such
statements include, without limitation, statements regarding future
liquidity, cash needs and alternatives to address capital needs, and are
indicated by words or phrases such as "anticipate," "estimate," "plans,"
"projects," "continuing," "ongoing," "expects," "management believes," "the
Company believes," "the Company intends," "we believe, "we intend," and
similar words or phrases.
Important factors that could cause actual results to differ materially from
the Company's expectations include, without limitation, the final terms and
conditions of the proposed financing, Bankruptcy Court approval and any
other approvals required for the proposed financing, any other matters
requiring Bankruptcy Court or other approvals, the future amount of the
Company's negative cash flow, the future results of the Company's
operations, resolution of the Company's supply need for modems used in the
Company's high speed Internet product, business opportunities that may be
presented to and pursued by the Company, changes in laws or regulations,
uncertainty of the Company's ability to obtain FCC authorizations,
competition, physical limitations of wireless cable transmission, changes
in general business and economic conditions in the Company's operation
regions and issues arising from Year 2000 information technology matters,
many of which are beyond the control of the Company. Further information
regarding these and other factors that might cause future results to differ
from those projected in the forward-looking statements is described in more
detail under the heading "Factors That May Affect Future Results of the
Company" in the Company's Form 10-K for the year ended December 31, 1998
and under the heading "Management's Discussion and Analysis" in the
Company's Form 10-Q for the quarter ended March 31, 1999.
# # #
Editors Note: More information about Wireless One is available on the
Internet at www.wirelessone.com.
MCI WORLDCOM, INC.
June 22, 1999
Henry Burkhalter
President and Chief Executive Officer
Wireless One, Inc.
1080 River Oaks Drive
Jackson, Mississippi 39208
Re: DIP FINANCING COMMITMENT
------------------------
Dear Henry:
On June 17, the Debtor Wireless One, Inc. stated that the Debtor
had serious short-term cash financing needs that must be resolved within a
very short period of time. As an alternative to the Debtor locking itself
into the $36 Million DIP Financing/Exit Financing facility presently being
pursued by the Debtor, MCI WORLDCOM would be willing to facilitate an
immediate increase in its existing DIP financing facility with the Debtor
by an additional $5 Million to a maturity date for the entire DIP financing
facility that would be mutually acceptable to the Debtor and MCI WORLDCOM.
This obviously would have significant benefits to the Debtor and
its reorganization process, including the Debtor's announced desire to
maintain "flexibility" as to post-Chapter 11 capital structures that,
according to the Debtor's public filings, are not yet even defined. As you
know, MCI WORLDCOM is very concerned with the Debtor's continuing delays in
proceeding to prompt confirmation of a plan of reorganization and exit from
Chapter 11, particularly in light of the significant level of the Debtor's
continuing operating losses.
Nevertheless, if the Debtor insists on proceeding with locking
itself into post-Chapter 11 financing at this time, MCI WORLDCOM proposes
the following.
* * * * * * *
Wireless One, Inc. (the "Parent"), debtor and debtor-in-
possession under Title 11 of the United States Code (the "Bankruptcy
Code"), and its subsidiaries and affiliates (together with the Parent each
a "Company" and collectively, the "Companies") (i) have advised MCI
WORLDCOM, Inc. that the Parent will require debtor-in-possession financing
to repay the existing debtor in possession financing indebtedness of the
Parent to MCI WORLDCOM, Inc. and for general working capital purposes of
the Companies, and (ii) have requested that MCI WORLDCOM, Inc. or an
affiliate (the "Lender") provide such financing. The Lender is pleased to
advise you that the Lender is willing to provide the Companies with a term
loan facility of $36,050,000 (the "Financing Facility") substantially on
the terms and conditions set forth in the Outline of Proposed Terms and
Conditions attached hereto as Exhibit A (the "Term Sheet"). The
obligations of the Companies under the financing Facility will be secured
by substantially all assets of the Companies including, without limitation,
all accounts receivable, inventory, equipment, general intangibles and all
other assets of the Companies. The Lender's commitment to provide the
Financing Facility is subject in all respects to satisfaction of the terms
and conditions contained in this commitment letter and in the Term Sheet.
The Lender understands that the Bankruptcy Code and the
applicable Bankruptcy Rules require the approval of, and entry of an order
by, the United States Bankruptcy Court (the "Bankruptcy Court") having
jurisdiction over the chapter 11 case of the Parent (the "Case") and at
least 15 days' notice for approval of such financing pursuant to a final
order by the Bankruptcy Court (the "Final Order") in form and substance
satisfactory to the Lender.
The Parent acknowledges that the Term Sheet is intended as an
outline only and does not purport to summarize all the conditions,
covenants, representations, warranties and other provisions which would be
contained in definitive legal documentation for the Financing Facility.
The loan documentation for the Financing Facility will include, in addition
to the provisions that are summarized in this commitment letter and the
Term Sheet, provisions that, in the opinion of the Lender, are customary or
typical for this type of financing transaction and are not inconsistent
with the terms herein and in the Term Sheet.
By its execution hereof and its acceptance of the commitment
contained herein, the Parent agrees to indemnify and hold harmless the
Lender and each of its assignees, its affiliates and its directors,
officers, employees and agents (each an "Indemnified Party") from and
against any and all losses, claims, damages, liabilities or other expenses
to which such Indemnified Party become subject, insofar as such losses,
claims, damages, liabilities (or actions or other proceedings commenced or
threatened in respect thereof) or other expenses arise out of or in any way
relate to or result from, this letter, or in any way arise from any use or
intended use of this letter, and the Parent agrees to reimburse each
Indemnified Party for any legal or other expenses incurred in connection
with investigating, defending or participating in any such loss, claim,
damage, liability or action or other proceeding (whether or not such
Indemnified Party is a party to any action or proceeding out of which
indemnified expenses arise), but excluding therefrom the fees of the
Lender's in-house counsel and other in-house advisors and all expenses,
losses, claims, damages and liabilities which are finally determined in a
non-appealable decision of a court of competent jurisdiction to have
resulted from the gross negligence or willful misconduct of the Indemnified
Party; PROVIDED HOWEVER, that in the event that the Financing Facility does
not close, the Companies' liability to the Lender in connection herewith
shall be limited to the payment of the Commitment Fee (as defined below)
and of the Lender's expenses as set forth below. In the event of any
litigation or dispute involving this commitment letter, the Lender shall
not be responsible or liable to any Company or any other person for any
special, indirect, consequential, incidental or punitive damages. In
addition, the Parent agrees to reimburse the Lender for all reasonable fees
and expenses (the "Expenses") incurred by or on behalf of the Lender in
connection with the negotiation, preparation, execution and delivery of
this commitment letter, the Term Sheet and any and all definitive
documentation relating hereto and thereto, including, but not limited to,
the reasonable fees and expenses of counsel to the Lender and the fees and
expenses incurred by the Lender in connection with any due diligence,
collateral reviews and field examinations. The obligations of the Parent
under this paragraph shall remain effective whether or not definitive
documentation is executed and notwithstanding any termination of this
commitment letter.
There is no requirement of a $100,000 deposit for the Lender's
out-of-pocket expenses. A non-refundable commitment fee (the "Commitment
Fee") in an amount equal to one percent (1%) of the amount of the
Financing Facility, shall be earned in full on the date on which the Parent
accepts this commitment letter and such Commitment Fee is approved by the
Bankruptcy Court, shall constitute an allowed administrative expense in the
Case under section 503(b) of the Bankruptcy Code and shall be payable on
the earlier of (i) the Closing Date and (ii) the date of substantial
consummation (as defined in section 1101(2a) of the Bankruptcy Code) of a
plan of reorganization in the Case.
The Lender's commitment to provide the Financing Facility is
subject to (i) the negotiation, execution and delivery of definitive loan
documentation in form and substance reasonably satisfactory to Lender and
its counsel, (ii) the satisfaction of the Lender that since the date hereof
there has not occurred or become known to the Lender any material adverse
change with respect to the condition, financial or otherwise, business,
operations, assets, liabilities or prospects of the Parent and the
Companies, taken as a whole, other than the events resulting in the filing
of the Case, as determined by the Lender in its sole discretion (a
"Material Adverse Change"), (iii) such other conditions as are customary in
transactions similar to the Financing Facility and are not inconsistent
with the terms hereof and the Term Sheet and (iv) the entry of the Final
Order. If at any time the Lender shall determine (in its sole and absolute
discretion) that either (A) the Companies are unable to fulfill any
condition set forth in this commitment letter or in the Term Sheet or (B)
any Material Adverse Change has occurred, the Lender may terminate this
letter by giving five days' prior written notice thereof to the Parent
(subject to the obligation of the Parent to pay all fees, costs, expenses
and other payment obligations expressly assumed by the Parent hereunder,
which shall survive the termination of this letter).
The Parent represents and warrants that (i) subject to clause
(ii) below, all written information and other materials concerning the
Parent and the Companies (collectively, the "Information") which has been,
or is hereafter, made available by, or on behalf of the Parent or any
Company is, or when delivered will be, when considered as a whole, complete
and correct in all material respects and does not, or will not when
delivered, contain any untrue statement of material fact or omit to state a
material fact necessary in order to make the statements contained therein
not misleading in light of the circumstances under which such statement has
been made and (ii) to the extent that any such Information contains
projections, such projections were prepared in good faith on the basis of
(A) assumptions, methods and tests stated therein which are believed by the
Parent and the Companies to be reasonable and (B) information believed by
the Parent and the Companies to have been accurate based upon the
information available to the Parent or the Companies at the time such
projections were furnished to the Lender.
This commitment letter is delivered to the Parent upon the
condition, that prior to the filing of this commitment letter with the
Bankruptcy Court, neither the existence of this commitment letter or the
Term Sheet, nor any of their contents, shall be disclosed by the Parent or
any Company, except as may be compelled to be disclosed in a judicial or
administrative proceeding or as otherwise required by law (including as may
be required by the Bankruptcy Court) or, on a confidential and "need to
know" basis, to the directors, officers, employees, advisors and agents of
the Parent. The Parent agrees that (other than disclosure required by the
Bankruptcy Court or otherwise by law) it will (i) consult with the Lender
prior to the making of any filing in which reference is made to the Lender
or the commitment contained herein, and (ii) obtain the prior approval
(which approval shall not be unreasonably withheld) of the Lender before
releasing any public announcement in which reference is made to the Lender
or to the commitment contained herein. The Parent acknowledges that the
Lender and its affiliates may now or hereafter provide financing or obtain
other interests in other companies in respect of which the Parent or its
affiliates may be business competitors, and that the Lender and its
affiliates will have no obligation to provide to the Parent or any of its
affiliates any confidential information obtained from such other companies.
The offer made by the Lender in this commitment letter shall
expire, unless otherwise agreed by the Lender in writing, at 5:00 p.m. (New
York City time) on June 22 1999, unless prior thereto (A) the Bankruptcy
Court has entered an order, in form and substance satisfactory to the
Lender, authorizing and directing the Parent to execute this Commitment
Letter and to be bound by the terms hereof (the "Commitment Order") and (B)
the Lender has received a copy of this commitment letter, signed by the
Parent accepting the terms and conditions of this commitment letter and the
Term Sheet. The commitment by the Lender to provide the Financing Facility
shall expire at 5:00 p.m. (New York City time) on July 21, 1999, unless on
or prior to such date, definitive loan documentation shall have been agreed
to in writing by all parties, and all conditions thereunder shall have been
satisfied or waived by the Lender.
Should the terms and conditions of the offer contained herein
meet with your approval, please indicate your acceptance by signing and
returning a copy of this letter to the Lender.
This commitment letter, including the attached Term Sheet (i)
supersedes all prior discussions, agreements, commitments, arrangements,
negotiations or understandings, whether oral or written, of the parties
with respect thereto, (ii) shall be governed by the law of the State of New
York, without giving effect to the conflict of laws provisions thereof,
(iii) shall be binding upon the parties and their respective successors and
assigns, (iv) may not be relied upon or enforced by any other person or
entity, and (v) may be signed in multiple counterparts, each of which shall
be deemed an original and all of which together shall constitute one and
the same instrument. If this commitment letter becomes the subject of a
dispute, each of the parties hereto hereby waives trial by jury. This
commitment letter may be amended, modified or waived only in a writing
signed by the parties hereto.
Notwithstanding anything herein in this commitment letter or the
Term Sheet to the contrary, the obligations of the Parent and the Companies
under their existing debtor in possession financing agreement with Lender
shall not be modified, altered or otherwise affected by this commitment
letter or the Term Sheet.
Very truly yours,
MCI WORLDCOM, INC.
By: /S/ SCOTT D. SULLIVAN
--------------------------
Name:
Title:
Agreed and accepted on this
22nd day of June, 1999:
WIRELESS ONE, INC., debtor and
debtor-in-possession
By: /S/ HENRY BURKHALTER
--------------------------
Name:
Title:
EXHIBIT A
WIRELESS ONE, INC.
OUTLINE OF PROPOSED TERMS AND CONDITIONS FOR FINANCING FACILITY
This outline of Proposed Terms and Conditions is part of the commitment
letter, dated June 22, 1999 (the "Commitment Letter"), addressed to Wireless
One, Inc., a debtor-in-possession under Chapter 11 of the Bankruptcy Code
(the "Parent"), by MCI WORLDCOM, Inc. and is subject to the terms and
conditions of the Commitment Letter. Capitalized terms used herein shall
have the meanings set forth in the Commitment Letter unless otherwise defined
herein.
BORROWERS: The Parent and each direct and indirect subsidiary
of the Parent (collectively, the "Borrowers").
LENDER: MCI WORLDCOM, Inc. or an affiliate thereof, to be
designated at closing. References to Lender herein
shall relate solely to MCI WORLDCOM's status as the
proposed Lender herein and shall in no event relate
to, restrict or affect any other rights,
relationships or claims, including the existing
debtor-in-possession financing facility, that MCI
WORLDCOM has or may have with or against the
Borrowers.
FINANCING FACILITY: A term loan of $36,050,000, all of which shall be
borrowed, and the proceeds of which shall be paid
to the Parent, in a single borrowing on the Closing
Date (as defined below).
TERM: The Financing Facility is to be repaid in full at
the earlier of (i) the date which is two years
following the Closing Date and (ii) the substantial
consummation (as defined in 11 U.S.C. <section>1101
(2)) of a plan of reorganization (a "Plan") in the
Case which has not been approved by the Lender as
set forth below (such earlier date, the "Maturity
Date"). Any confirmation order entered in the Case
shall not discharge or otherwise affect in any way
any of the joint and several obligations of the
Borrowers to the Lender or any other term, provision
or condition of the Financing Facility, other than
after the payment in full and in cash to the Lender
of all obligations under the Financing Facility in
accordance with the terms hereof, on or before the
effective date of the Plan.
The Lender shall have the right to approve, or
withhold approval of, the Plan in its sole and
absolute discretion; PROVIDED HOWEVER, that the
Lender shall have no approval rights with respect to
the allocation of the equity of the reorganized
Parent; PROVIDED FURTHER, that, subject to the
negotiation of financial covenants reasonably
acceptable to the Lender with respect to periods
after substantial consummation of the Plan, the
Lender approves the Plan most recently submitted to
the Bankruptcy Court.
MANDATORY AND Proceeds from the sale or other disposition of any
OPTIONAL PREPAYMENT: assets of the Borrowers outside the ordinary course
of business, in excess of $6,000,000 in the aggregate,
shall be paid to the Lender to reduce the amounts
outstanding under the Financing Facility. Borrowers
shall be permitted to prepay the Financing Facility
in whole or in part at any time without penalty or
premium other than the Facility Fee (as defined
below).
CLOSING DATE: The first date (the "Closing Date") on which all
definitive loan documentation satisfactory to the
Lender (the "Loan Documents") is executed by the
Borrowers and the Lender, and all conditions precedent
set forth therein, including entry by the Bankruptcy
Court of the Final Order in form and substance
satisfactory to the Lender, shall have been satisfied
or waived by the Lender, which date shall not be later
than July 21, 1999.
The Lender will provide drafts of loan documentation
on or prior to June 25, 1999. The parties agree to
diligently negotiate the loan documentation. The
Company agrees to promptly seek Bankruptcy Court
approval of the loan documentation and work diligently
toward the entry of the Final Order.
COLLATERAL: Prior to the substantial consummation of the Plan, all
obligations of Parent to the Lender shall be: (X)
entitled to super-priority administrative expense
claim status pursuant to 11 U.S.C. <section>364(c)(1)
in the Case, subject only to (i) the payment of
allowed professional fees and disbursements incurred
by the Parent and any official committees appointed in
the Case, in an aggregate amount not in excess of
$2,000,000 at any time outstanding, provided that,
only professional fees and disbursements actually made
after the occurrence and during the continuance of an
Event of Default shall reduce such amount described in
this clause (i) on a dollar-for-dollar basis and (ii)
the payment of fees pursuant to 28 U.S.C.
<section>1930 (collectively, the "Carve-Out Expenses")
PROVIDED HOWEVER that the Carve-out Expenses shall not
include professional fees and disbursements incurred
in connection with any claims or causes of action
against the Lender challenging the Lender's rights
under the Financing Facility or asserting any claims
against the Lender related thereto, and (Y) secured
pursuant to 11 U.S.C. <section>364(c)(2) and (c)(3)
by a security interest in and lien on all now owned
or hereafter acquired assets and property of the
estate (as defined in the Bankruptcy Code), real and
personal, of the Parent, including all of the stock
of each domestic subsidiary of the Parent. The
security interests in and liens on all unencumbered
assets and property of the estate of the Parent
shall be first priority, not subject to subordination
(unless agreed to by the Lender). The Lender will
have a lien on the Parent's FCC licenses to the
extent permitted by law.
All obligations of the Borrowers (including the
reorganized Parent) to the Lender shall be secured by
a perfected first priority (unless agreed to by the
Lender) security interest in and lien on all now owned
or hereafter acquired property and assets of the
Borrowers, real and personal, tangible and intangible,
including, without limitation, all receivables,
contract rights, inventory, machinery, equipment,
furniture, fixtures, leaseholds, real estate, general
intangibles (including patents, trademarks, licenses
and other intellectual property and tax refunds), the
stock of each of the Borrowers' direct and indirect
domestic subsidiaries, and all books and records
related thereto and all proceeds thereof. The Lender
will have a lien on the Borrowers' FCC licenses to the
extent permitted by law.
No liens will be released until all amounts due under
the Financing Facility have been paid in full in cash,
except for (i) the sale or other disposition of
obsolete or other assets in the ordinary course of
business and (ii) the sale of assets not in the
ordinary course of business of up to $6,000,000 in
aggregate proceeds.
INTEREST: The Financing Facility shall bear interest at a rate
per annum equal to ten percent (10%), which shall, at
the option of the Borrowers (i) be payable quarterly
in arrears; or (ii) accrue (i.e., pay-in-kind) monthly
in arrears. All calculations shall be based upon a
360 day year for the actual number of days elapsed.
FEES: Commitment Fee: One percent (1%) of the amount of the
Financing Facility actually funded on
the Closing Date, earned in full on
the date on which the Parent accepts
the Commitment Letter and such
Commitment Fee is approved by the
Bankruptcy Court, and payable on the
earlier of (i) the Closing Date and
(ii) the date of substantial
consummation of a plan of
reorganization in the Case.
Facility Fee: None
USE OF PROCEEDS: To repay at Closing all existing debtor in possession
financing indebtedness of the Borrowers to MCI
WORLDCOM, Inc., as assignee of Merrill Lynch Global
Allocation Fund, and to fund working capital in the
ordinary course of business of the Borrowers
(including capital contributions to Wireless One of
North Carolina, in amounts consistent with past
practice).
CONDITIONS PRECEDENT: The obligation of Lender to extend credit or to make
any advances under the Financing Facility will be
subject to customary conditions precedent including,
without limitation, the following:
(a) Lender's completion of its due diligence, with
results satisfactory to the Lender.
(b) Execution and delivery of appropriate legal
documentation in form and substance satisfactory
to Lender, and the satisfaction of the conditions
precedent contained therein.
(c) Termination of existing financing facility
including release of all liens and security
interests.
(d) No material adverse change in the financial
condition, business, prospects, profitability,
assets or operations of the Borrowers.
(e) Entry of the Final Order by the Bankruptcy
Court, satisfactory in form and substance to
the Lender, no later than July 21,1999, which
Final Order shall approve the transactions
contemplated herein, grant the superpriority
administrative expense claim status and liens
referred to above and which Final Order shall
not have been reversed, modified, amended or
stayed.
(f) The Lender shall have been granted a perfected
lien on all Collateral and shall have received
UCC, tax and judgment lien searches evidencing
the absence of any liens on the Collateral,
except existing and other liens reasonably
acceptable to the Lender.
(g) Opinions from the Borrowers' counsel as to such
matters as the Lender and its counsel may
reasonably request.
(h) The Lender's satisfaction with all ERISA,
environmental tax and labor matters.
(i) The Borrowers shall have obtained all required
approvals, governmental and otherwise.
(j) The Borrower shall have insurance, satisfactory
to the Lender, such insurance with respect to
the Collateral to name the Lender as loss payee.
(k) Such other conditions as may be required by the
Lender in its reasonable discretion and which
are customary in transactions of this nature.
REPRESENTATIONS Usual representations and warranties in a debtor-in-
AND WARRANTIES: possession financing, including, but not limited to,
corporate existence and good standing, authority to
enter into loan documentation, occurrence of the
Closing Date, validity of the Final Order,
governmental approvals, financial statements,
litigation, compliance with environmental, pension and
other laws, taxes, insurance, absence of material
adverse change, absence of default or unmatured
default and priority of the Lender's liens.
COVENANTS: Usual covenants, including, but not limited to,
provision of financial statements, notices of
litigation, defaults and unmatured defaults
and other information (including pleadings,
motions, applications and other documents
filed with the Bankruptcy Court or distributed
to any official committee approved in the Case),
compliance with laws, inspection of properties, books
and records, maintenance of insurance, Year 2000
compliance, limitations with respect to liens and
encumbrances, dividends and retirement of capital
stock, guarantees, sale and lease back transactions,
consolidations and mergers, investments, capital
expenditures, loans and advances, indebtedness,
compliance with pension, environmental and other
laws, operating leases, transactions with affiliates
and prepayment of other indebtedness, in each case
subject to exceptions acceptable to the Lender.
Financial covenants to include minimum gross revenue
and EBITDA tested both quarterly and cumulatively.
EVENTS OF DEFAULT: Usual events of default, including, but not limited
to, payment, cross-default, violation of covenants,
breach of representations or warranties, judgment,
ERISA, environmental and change of control.
In addition, an Event of Default shall occur if:
(i)(A) the Case shall be dismissed or converted to a
chapter 7 case; a chapter 11 trustee or an examiner
with enlarged powers shall be appointed; any other
superpriority administrative expense claim which is
senior to or PARI PASSU with the Lender's claims,
shall be granted; the Final Order shall be stayed,
amended, modified, reversed or vacated; a Plan shall
be confirmed in the Case which does not provide for
payment in full in cash of the Borrowers' obligations
thereunder on the Maturity Date, and the survival of
all terms, provisions and conditions set forth in the
definitive documentation for the Financing Facility;
or an order shall be entered which dismisses the Case
and which order does not provide for termination of
the Financing Facility and payment in full in cash of
all obligations thereunder or (B) the Borrowers shall
take any action, including the filing of an
application, in support of any of the foregoing or
any person other than the Borrowers shall do so and
such application is not contested in good faith by
Borrowers and the relief requested is granted in an
order that is not stayed pending appeal; or
(ii) the Bankruptcy Court shall enter an order
granting relief from the automatic stay to the holder
of any security interest in any asset of the Borrowers
having a book value in an amount equal to or exceeding
$100,000 in the aggregate.
Materiality for purposes of the Financing Facility
will generally be considered as $100,000 with respect
to any one incident or transaction or $1,000,000 in a
series of related incidents or transactions.
DOCUMENTATION: Borrowers' and Lender's counsel shall consult with
one another and make a joint determination, whether
to amend the existing credit facility to reflect the
terms stated herein or to create a new credit
facility. If counsel cannot agree on which approach
to use, Lender shall make the final decision.
GOVERNING LAW: All documentation in connection with the Financing
Facility shall be governed by the laws of the State
of New York applicable to agreements made and
performed in such State except as governed by the
Bankruptcy Code.
OUT-OF-POCKET All fees, including reasonable legal fees, and all
EXPENSES: reasonable out-of-pocket expenses associated with the
transaction are to be paid by the Borrowers at Closing
(other than the fees of Lender's in-house counsel and
other in-house advisors).
