News Column

NTS, INC. FILES (8-K) Disclosing Entry into a Material Definitive Agreement, Termination of a Material Definitive Agreement, Completion of Acquisition or Disposition of Assets, Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing, Material Modification to Rights of Security Holders, Change in Directors or Principal Officers, Amendments to Articles of Inc. or Bylaws; Change in Fiscal Year, Financial Statements and Exhibits

June 6, 2014

Item 1.01 Entry into a Material Definitive Agreement.

1. Senior Secured Credit Facilities

General



On June 6, 2014, in connection with the Merger (as defined below), NTS, Inc. a Nevada corporation ("NTS"), entered into a credit agreement and related security and other agreements with Goldman Sachs BDC, Inc., as administrative agent and collateral agent, that provides senior secured financing (the "Credit Facilities") of up to $45 million, consisting of (a) a term loan facility in an aggregate principal amount of $40 million, with a maturity of five years; and (b) a revolving credit facility in an aggregate principal amount of up to $5 million, with a maturity of five years. In addition, NTS may request one or more incremental term loan facilities up to the sum of $20 million, subject to certain conditions and receipt of commitments by existing or additional lenders.

Proceeds of the term loans drawn on the closing date were used to consummate the Merger (as defined below), to pay off NTS' existing credit facility and to pay fees and expenses relating to the consummation of the Merger and the Credit Facilities. The revolving facility was undrawn as of the closing date of the Merger.

Interest Rates and Fees



Borrowings under the Credit Facilities bear interest at a rate equal to (a) a LIBOR rate determined by reference to the costs of funds for Eurodollar deposits for the interest period relevant to such borrowing, adjusted for certain additional costs, subject to a 1.25% floor in the case of term loans or (b) in the event that a lender determines that changes in market conditions or law make it impracticable to fund or maintain its portion or the loans at the LIBOR rate, a base rate determined by reference to the highest of (i) 2.25%, (ii) the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System plus 0.50% and (iii) the "Prime Rate" as published by the Wall Street Journal, in each case plus an applicable margin. The applicable margin for borrowings is (a) 9.0% with respect to Eurodollar rate borrowings and 8.0% with respect to base rate borrowings under the term loan facility and the revolving credit facility.

In addition to paying interest on outstanding principal under the Credit Facilities, NTS is required to pay customary agency fees, closing fees and fees on the unused portion of the revolving credit facility.

Amortization and Prepayments



The term loan will require scheduled quarterly payments of $100,000 beginning with the fiscal quarter ending June 30, 2014, with the balance paid at maturity. In addition, NTS is required to prepay outstanding term loan borrowings, subject to certain exceptions, with:

• 75% (which percentage will be reduced to 25% if NTS attains a certain leverage

ratio) of NTS' annual excess cash flow (as defined under the Credit Facilities);



• 100% of the net cash proceeds of certain non-ordinary course asset sales,

dispositions of property or casualty events, in each case subject to certain

exceptions and provided that NTS may reinvest such proceeds within 360 days,

subject to certain conditions; . . .



Item 1.02 Termination of a Material Definitive Agreement.

On June 6, 2014, in connection with the closing of the Merger (as defined below), NTS terminated the Term Loan, Guarantee and Security Agreement, dated as of October 6, 2011, by and among ICON Agent, LLC (as agent for the lenders signatory thereto), Xfone, Inc. (as a guarantor), Xfone USA, Inc., NTS Communications, Inc., Gulf Coast Utilities, Inc., ExPeTel Communications, Inc., NTS Construction Company, Garey M. Wallace Company, Inc., Midcom of Arizona, Inc., Communications Brokers, Inc., and NTS Management Company, LLC (as the borrower), and the other credit parties signatory thereto (the "Credit Agreement"). In connection with such termination, the borrowers under the Credit Agreement are required to pay a prepayment fee of 3% of the principal amount of the loan thereunder.

Item 2.01 Completion of Acquisition or Disposition of Assets.

On June 6, 2014, T3 North Intermediate Holdings, Inc. (f/k/a T3 North Intermediate Holdings, LLC, "Holdings"), an affiliate of Tower Three Partners LLC ("Tower Three") completed the previously announced acquisition of NTS through the merger of North Merger Sub, Inc., a Nevada corporation and a wholly-owned subsidiary of Holdings ("Merger Sub"), with and into NTS (the "Merger"), with NTS continuing as the surviving corporation and becoming a direct wholly owned subsidiary of Holdings, pursuant to the Agreement and Plan of Merger, dated as of October 20, 2013, by and among Holdings, NTS and Merger Sub (as amended, the "Merger Agreement"). The Merger Agreement was approved and adopted by NTS' stockholders at a special meeting held on February 26, 2014.

On the terms and subject to the conditions set forth in the Merger Agreement: (1) each share of common stock, par value $0.001 per share, of NTS (the "NTS Common Stock") issued and outstanding immediately prior to the effective time of the Merger (other than the Rollover Shares (as defined below), shares of NTS Common Stock owned by NTS or any of its subsidiaries as treasury stock or shares of NTS Common Stock owned directly by Holdings, Merger Sub or any affiliate of Holdings) was cancelled and ceased to have any rights except the right to receive $2.00 per share in cash without interest and less any applicable tax withholding; (2) each option to acquire NTS Common Stock outstanding and unexercised immediately prior to the effective time of the Merger was cancelled and extinguished and converted into the right to receive cash consideration equal to the product of (a) the total number of shares of NTS Common Stock previously subject to such option, and (b) the excess, if any, of $2.00 per share over the exercise price per share of NTS Common Stock previously subject to such option, less any applicable tax withholding; and (3) all warrants to purchase NTS Common Stock outstanding immediately prior to the effective time of the Merger were cancelled, and extinguished and converted into the right to receive cash consideration equal to the product of (x) the total number of shares of NTS Common Stock previously subject to such warrant, and (y) the excess, if any, of $2.00 per share over the exercise price per share of NTS Common Stock previously subject to such warrant, less any applicable tax withholding.

Pursuant to the terms of a rollover agreement entered into in connection with the execution of the Merger Agreement, certain shares of NTS Common Stock beneficially owned by Guy Nissenson, the Company's President and Chief Executive Officer (the "Rollover Shares") were, prior to the effective time of the Merger, exchanged by Mr. Nissenson for shares of capital stock of an affiliate of Holdings.

Trading in NTS Common Stock on the NYSE MKT LLC (f/k/a NYSE Amex LLC, the "NYSE MKT") has been suspended as of the close of trading on June 6, 2014. Trading in NTS Common Stock on the Tel Aviv Stock Exchange Ltd. will be suspended as of the opening of trading on June 8, 2014.

The foregoing description of the Merger Agreement and the Merger does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement. A copy of the Merger Agreement was filed as Exhibit 2.1 to NTS's Current Report on Form 8-K filed with the Securities and Exchange Commission (the "SEC") on October 21, 2013. The first amendment to the . . .

Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or

Standard; Transfer of Listing.



The information set forth in Item 2.01 is incorporated herein by reference.

On June 6, 2014, in connection with the Merger, NTS notified the NYSE MKT that the Merger had been completed and requested that trading of NTS Common Stock on the NYSE MKT be suspended as of the close of trading on June 6, 2014. NTS also requested that the NYSE MKT file with the SEC an application on Form 25 to delist NTS Common Stock and deregister NTS Common Stock under Section 12(b) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). NTS intends to file with the SEC a Form 15 to suspend NTS's reporting obligations under Sections 13 and 15(d) of the Exchange Act as promptly as practicable.

Item 3.03 Material Modifications to Rights of Security Holders.

The information set forth in Items 2.01 and 5.03 is incorporated by reference herein.

Effective upon the closing of the Merger, NTS's stockholders immediately prior to the effective time of the Merger ceased to have any rights as stockholders of NTS (other than their right to receive the applicable merger consideration).

Item 5.02 Departure of Directors or Certain Officers; Election of Directors;

Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.



In connection with the Merger, each of the following members of the board of directors of NTS resigned from the board of directors of NTS, and all committees thereof: Guy Nissenson, Shemer S. Schwarz, Arie Rosenfeld, Timothy M. Farrar, Alan L. Bazaar, Don Carlos Bell III, Andrew J. MacMillan, Jeffrey E. Eberwein and Richard K. Coleman, Jr. As of the effective time of the Merger, Holdings, as the sole stockholder of NTS, elected William D. Forrest as the sole member of NTS' board of directors.

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal

Year.



Effective upon the closing of the Merger, the articles of incorporation and bylaws of NTS were amended and restated in their entirety. The Amended and Restated Articles of Incorporation and the Amended and Restated Bylaws of NTS are attached hereto as Exhibits 3.1 and 3.2, respectively, and are incorporated by reference herein.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits. Exhibit Number Description 3.1 Amended and Restated Articles of Incorporation of NTS, Inc. 3.2 Amended and Restated Bylaws of NTS, Inc.



*Incorporated by reference.


For more stories on investments and markets, please see HispanicBusiness' Finance Channel



Source: Edgar Glimpses


Story Tools






HispanicBusiness.com Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters