Exhibit 2.4
August 9, 2002
Mr. ▇▇▇▇▇▇ ▇▇▇▇▇
Price Communications Corporation
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear Mr. Price:
Re: New LP Financing
We refer to (i) the Transaction Agreement dated as of December 18, 2001
(as amended by an amendment dated April 15, 2002 and the letter agreement dated
July 16, 2002) among Price Communications Corporation, Price Communications
Cellular Inc., Price Communications Cellular Holdings, Inc., Price
Communications Wireless, Inc., Cellco Partnership and Verizon Wireless of the
East LP (the "Transaction Agreement") and (ii) the Exchange Agreement dated as
of December 18, 2001 among Price Communications Corporation, Price
Communications Cellular Inc., Price Communications Cellular Holdings, Inc.,
Price Communications Wireless, Inc., Verizon Communications Inc., Verizon
Wireless Inc., Cellco Partnership and Verizon Wireless of the East LP (the
"Exchange Agreement"). Capitalized terms used and not defined herein shall have
the meanings given to such terms in the Transaction Agreement and the Exchange
Agreement.
Notwithstanding the terms set forth in the Transaction Agreement and the
Exchange Agreement, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree that:
(1) The definition of "Excess Financing Cost" contained in Section 1.01(a)
of the Transaction Agreement is hereby amended and restated in its entirety as
follows:
""Excess Financing Cost" means all reasonable out-of-pocket fees and
other costs and expenses incurred by New LP in connection with the
proposed financing by ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners L.P. and the New LP
Financing."
(2) Section 1.01(a) of the Transaction Agreement is hereby amended to
insert the following new definition:
"VCI" means Verizon Communications Inc., a Delaware corporation, and
its successors.""
(3) Section 1.01(b) of the Transaction Agreement is hereby amended to
insert the following terms in appropriate alphabetical order:
Company Guarantee 14.02(q)
Lender Security Agreement 14.02(s)
New Lender 2.06(c)
New LP Preamble
New LP Refinancing 2.06(c)
Price Parent Guarantee 14.02(r)
Vodafone 2.06(a)
VZW Notes 2.06(b)
(4) Section 2.06 of the Transaction Agreement is hereby amended and
restated in its entirety as follows:
"SECTION 2.06. New LP Financing. (a) Immediately prior to the
Closing, New LP will, and Cellco will cause New LP to, obtain debt
financing in an amount equal to $350 million (the "New LP Financing")
from VCI or a wholly-owned Subsidiary of VCI (the "Lender"); provided
that (i) the definitive documentation relating to the New LP Financing
shall be reasonably satisfactory to Price Parent and (ii) the New LP
Financing (A) shall be non-recourse to the partners of New LP (other
than pursuant to the Company Guarantee or the Price Parent Guarantee)
and (B) shall not obligate New LP to repay such financing or any
portion thereof (other than upon an event of default based upon any
bankruptcy or insolvency related event) prior to four years and six
months after the Closing Date, except in the event of a VCI Call
Exchange, in which case, not prior to six months after the date of
such VCI Call Exchange. The New LP Financing shall bear interest at an
annual rate as determined in Section 2.06(b), and such interest shall
be payable in cash quarterly in arrears.
(b) Cellco shall solicit bid and ask secondary market
quotations from an unaffiliated securities dealer selected by Cellco
for $10 million principal amount of its outstanding 5.375% Notes due
2006 (the "VZW Notes") as of approximately 4:00 p.m., New York time,
on each of the five trading days immediately preceding the Closing
Date. The annual rate of interest payable on the New LP Financing
shall be the annual yield on the VZW Notes implied by the simple
average of the midpoints of such bid and ask quotations, and such rate
shall be the annual rate of interest referred to in clause (i)(A) of
the definition of "Rate Adjustment Percentage" in Section 1.01(a) of
the New LP Agreement.
(c) Prior to VCI taking any action (including, without
limitation, as a result of or in response to the exercise by Vodafone
Group Plc ("Vodafone") of its rights under the Investment Agreement
dated as of April 3, 2000 among Vodafone (formerly Vodafone AirTouch
Plc), Verizon Communications Inc. (formerly ▇▇▇▇ Atlantic Corporation)
and Cellco, as amended from time to time, to require the purchase or
repurchase of all or a portion of Vodafone's interests in Cellco)
which would increase its interest in Cellco and result in it owning,
directly
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or indirectly, 80% or more of the capital or profits interest
in Cellco, Cellco and New LP will use their commercially reasonable
efforts to obtain, immediately prior to VCI taking such action, debt
financing in an amount equal to $350 million (the "New LP
Refinancing") from such Person or Persons (such Person or Persons, the
"New Lender") on such terms and conditions as are determined by New
LP, and the proceeds of any such New LP Refinancing shall be used to
refinance the New LP Financing; provided that (i) the New Lender shall
not be related to any partner of New LP within the meaning of Treasury
regulation Section 1.752-4(b)) and (ii) the New LP Refinancing (A)
shall be non-recourse to the partners of New LP and Persons related to
any such partners within the meaning of Treasury regulation Section
1.752-4(b) and (B) shall not obligate New LP to repay such financing
or any portion thereof (other than upon an event of default) prior to
four years and six months after the Closing Date."
(5) Section 14.01 of the Transaction Agreement is hereby amended by
deleting clause (g) thereof.
(6) Section 14.02 of the Transaction Agreement is hereby amended by
inserting the following clauses (q), (r) and (s):
"(q) The Company shall have irrevocably and unconditionally
guaranteed the New LP Financing on terms reasonably satisfactory to
New LP (the "Company Guarantee") and delivered to New LP all documents
it may reasonably request evidencing such guarantee; it being agreed
that the terms of such Company Guarantee shall require that, prior to
the Company being obligated to make payment under the Company
Guarantee, the Lender shall have (i) demanded payment from New LP in
accordance with the terms of the New LP Financing and (ii) exhausted
all remedies against New LP. It is understood and agreed that the
Company Guarantee shall not prevent the liquidation of the Company or
the merger of the Company with or into any other Price Corporation;
provided that the obligations of the Company under the Company
Guarantee are assumed in full by any other Price Corporation effective
upon such liquidation or merger.
(r) Price Parent shall have irrevocably and unconditionally
guaranteed the Company's obligations under the Company Guarantee as
and when due on terms reasonably satisfactory to New LP (the "Price
Parent Guarantee") and delivered to New LP all documents it may
reasonably request evidencing such guarantee.
(s) Price Parent shall have entered into a security agreement
(the "Lender Security Agreement") with the Lender, in form and
substance reasonably satisfactory to New LP, securing Price Parent's
obligations under the Price Parent Guarantee and pursuant thereto have
deposited at least $70 million in cash or other property (other than
the ELP Interest or any security issued by a Person that has a direct
or indirect interest in the ELP Interest) in a collateral account in
which the Lender shall have a perfected first priority security
interest; it being agreed that the Lender Security Agreement shall (i)
permit Price Parent to deposit
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additional collateral (other than the ELP Interest or any security
issued by a Person that has a direct or indirect interest in the ELP
Interest) in the collateral account at any time (with Price Parent
having the right to control the investment of the assets in the
collateral account, provided that such investments shall in no event
include the ELP Interest or any security issued by a Person that has
a direct or indirect interest in the ELP Interest), (ii) not permit
Price Parent to obtain the release of any collateral held in the
collateral account other than (A) an aggregate of up to $5 million of
collateral as needed to satisfy its ordinary operating expenses and
(B) any cash interest or ordinary cash dividends paid in respect of
cash or cash equivalents or marketable securities held in the
collateral account; (iii) require that any assets held by the Price
Corporations as of the Closing Date (other than the ELP Interest,
rights under this Agreement and the Ancillary Agreements, and an
amount of cash reserved for liabilities of the Price Corporations
existing and known to be existing as of the Closing Date), which
shall include, without limitation, not less than $2 million of cash
in the aggregate, and any assets received in respect of the sale,
pledge or other disposition of any such assets, or any assets
acquired, directly or indirectly, with the proceeds of any such sale,
pledge or other disposition, shall be retained by the Price
Corporations for so long as the Price Parent Guarantee is outstanding
and shall not be distributed or otherwise disposed of by the Price
Corporations (other than to Price Parent or pursuant to an
arms-length sale (or similar transaction) with a third party where
the proceeds of such sale are retained pursuant to this clause (iii))
and (iv) provide (A) that Price Parent shall immediately pay Lender,
as liquidated damages, if it distributes or otherwise disposes of
assets in breach of clause (iii) of this Section 14.02(s) (subject to
a grace period of 10 days), an amount of cash equal to the amount of
such distribution or other disposition in breach of such clause
(provided that payment of such liquidated damages shall not affect
Price Parent's obligations under clause (iii) of this Section
14.02(s)) and (B) that Price Parent agrees that such liquidated
damages are reasonable under the circumstances."
(7) Section 14.03(c) of the Transaction Agreement is hereby amended by
inserting the following immediately after "has not been withdrawn":
"and containing a revised analysis of the allocation of the
liability with respect to the New LP Financing leading to the
conclusion that, although the matter is not free from doubt, such
liability should be allocated to the Company"
(8) Section 14.03 of the Transaction Agreement is hereby amended by
inserting the following clause (j):
"(j) The definitive documentation relating to the Company
Guarantee, the Price Parent Guarantee and the Lender Security
Agreement shall be reasonably satisfactory to Price Parent."
(9) Exhibit I to the Transaction Agreement is hereby amended by (i)
amending the definition of "Transaction Documents" to also include (x) the
Company Guarantee,
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(y) the Price Parent Guarantee and (z) the Lender Security
Agreement and (ii) inserting as a new paragraph number (9) a new paragraph that
is the same as paragraph number (8) except that all references to "Pledge
Agreement" shall instead be references to the "Lender Security Agreement".
(10) Section 1.01(a) of the New LP Agreement is hereby amended to
insert the following definitions in appropriate alphabetical order:
""Excess Interest" means, for any period, the excess, if any, of
the interest expense incurred during such period by the Partnership
under any New LP Refinancing over the amount of interest expense that
New LP would have incurred during such period under the New LP
Financing."
""Partnership Financing" means the New LP Financing or any New
LP Refinancing."
(11) The definition of "Profits" and "Losses" in Section 1.01(a) of
the New LP Agreement is hereby amended by inserting "(other than pursuant to
Section 4.03(f))" immediately after "pursuant to Section 4.03 hereof" in clause
(v) of such definition.
(12) The definition of "Quarterly Distribution Amount" in Section
1.01(a) of the New LP Agreement is hereby amended and restated in its entirety
as follows:
""Quarterly Distribution Amount" means, subject to Section
5.01(c), (i) with respect to each of the first, second and third
quarters of any fiscal year, an amount of cash estimated in good
faith by the Managing General Partner to be equal to 50.00% of Price
LP's share of any Profit for such fiscal quarter which would be
allocated to Price LP's Capital Account pursuant to Sections 4.01(b)
and 4.03 if such allocation were made on a quarterly basis, and (ii)
with respect to the fourth quarter of any fiscal year, an amount of
cash equal to (A) if the Price Profit Allocation for such fiscal year
is less than the Threshold Profit Allocation for such fiscal year, an
amount of cash equal to (x) the Price Profit Allocation minus (y) the
sum of the Quarterly Distribution Amounts for the first, second and
third quarters of such fiscal year, or (B) if the Price Profit
Allocation for such fiscal year is greater than or equal to the
Threshold Profit Allocation for such fiscal year, an amount of cash
equal to (x) the Threshold Profit Allocation minus (y) the sum of the
Quarterly Distribution Amounts for the first, second and third
quarters of such fiscal year."
(13) Section 4.03 of the New LP Agreement is hereby amended by
inserting the following new clause:
"(f) Excess Refinancing Costs. All Excess Interest and all
reasonable fees and other costs and expenses (other than interest)
incurred by New LP in connection with any New LP Refinancing obtained
under the circumstances contemplated by Section 2.06(c) of the
Transaction Agreement shall be allocated to Price LP.
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(14) Section 4.04 of the New LP Agreement is hereby amended and
restated in its entirety as follows:
"SECTION 4.04. Allocation of Liabilities. Except to the extent
that Code Section 752 or Regulations thereunder are amended following
the date hereof, and based on the facts in existence as of the date
hereof, (i) liability of the Partnership for the New LP Financing
shall be allocated solely for federal income tax purposes to the
Price LP and (ii) liability of the Partnership for the New LP
Refinancing shall be allocated solely for federal income tax purposes
to the Company Contributed Assets and, therefore, to Price LP. The
Partnership shall file all Partnership tax returns consistent with
the foregoing allocation and shall not take a position inconsistent
therewith as long as the allocation is permitted under Code Section
752 and the Regulations thereunder. Notwithstanding the foregoing, if
the Managing General Partner determines in good faith that such
allocation is not permitted under Code Section 752 and the
Regulations thereunder (as interpreted from time to time by the U.S.
courts, including the Tax Court, and by official pronouncements of
the Internal Revenue Service or the Treasury department, such as
revenue rulings, revenue procedures and notices), (i) the Partnership
shall inform the Partners about the conclusion of the Managing
General Partner and shall provide the Partners with an explanation
underlying such conclusion, and (ii) the Partnership shall no longer
be required to file its tax returns in accordance with such
allocation. The Partners agree that allocating liability of the
Partnership for the New LP Financing and the New LP Refinancing, if
any, to Price LP is permitted based on the law and the facts in
existence as of the date hereof."
(15) Section 5.01(a) of the New LP Agreement is hereby amended by
deleting "the second anniversary of".
(16) Section 6.09(c) of the New LP Agreement is hereby amended and
restated in its entirety as follows:
"(c) The Partnership shall not until the earlier of two days
after the Exchange Closing Date (as defined in the Exchange
Agreement) and four years and six months after the Closing Date,
voluntarily prepay the Partnership Financing, effect a defeasance
with respect to the Partnership Financing (other than a defeasance
that does not affect the treatment of the liability under Code
Section 752), or intentionally take any action or fail to take any
action with the objective of causing an acceleration of New LP's
obligation to repay the Partnership Financing; provided that nothing
in this Section 6.09(c) shall prevent New LP from refinancing the New
LP Financing pursuant to Section 2.06(c) of the Transaction
Agreement."
(17) Section 2.01(b) of the Exchange Agreement is hereby amended by
inserting the following sentence at the end thereof:
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"At the VWI Exchange Closing, VCI shall, or shall cause the
Lender to, as the case may be, fully and unconditionally release (i)
the Company from any and all of its obligations under the Company
Guarantee and (ii) Price Parent from any and all of its obligations
under the Price Parent Guarantee and the Lender Security Agreement."
(18) Section 2.02(a) of the Exchange Agreement is hereby amended by
inserting the following two sentences at the end thereof:
"At the time of consummation of the VCI Mandatory Exchange,
provided that New LP has a minimum net worth (defined as total assets
minus total liabilities, in each case, as reflected on the financial
statements most recently delivered pursuant to Section 7.02 of the
New LP Agreement) of at least $500 million, VCI shall, or shall cause
the Lender to, as the case may be, fully and unconditionally release
(i) the Company from any and all of its obligations under the Company
Guarantee and (ii) Price Parent from any and all of its obligations
under the Price Parent Guarantee and the Lender Security Agreement.
If New LP does not have a minimum net worth of at least $500 million
at such time, then (i) the Company shall not be released from its
obligations under the Company Guarantee, (ii) Price Parent shall not
be released from its obligations under the Price Parent Guarantee or
the Lender Security Agreement and (iii) for so long as the Company
remains obligated under the Company Guarantee or Price Parent remains
obligated under the Price Parent Guarantee (A) New LP shall not take
any of the actions set forth in Section 6.04(b)(ii) through (xv) of
the New LP Agreement without Price Parent's prior written consent and
(B) New LP will use its best efforts to repay the New LP Financing
within six months after the VCI Mandatory Exchange or as soon
thereafter as practicable."
(19) Section 2.02(b) of the Exchange Agreement is hereby amended by
inserting the following two sentences at the end thereof:
"At the VCI Call Exchange Closing, provided that New LP has a
minimum net worth (defined as total assets minus total liabilities,
in each case, as reflected on the financial statements most recently
delivered pursuant to Section 7.02 of the New LP Agreement) of at
least $500 million, VCI shall, or shall cause the Lender to, as the
case may be, fully and unconditionally release (i) the Company from
any and all of its obligations under the Company Guarantee and (ii)
Price Parent from any and all of its obligations under the Price
Parent Guarantee and the Lender Security Agreement. If New LP does
not have a minimum net worth of at least $500 million at such time,
then (i) the Company shall not be released from its obligations under
the Company Guarantee, (ii) Price Parent shall not be released from
its obligations under the Price Parent Guarantee or the Lender
Security Agreement and (iii) for so long as the Company remains
obligated under the Company Guarantee or Price Parent remains
obligated under the Price Parent Guarantee (A) New LP shall not take
any of the actions set forth in Section 6.04(b)(ii) through (xv) of
the New LP Agreement without Price Parent's prior written consent and
(B) New LP will use its best efforts to repay the
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New LP Financing within six months after the VCI Call Exchange
Closing or as soon thereafter as practicable."
This letter agreement shall be governed by and construed in accordance
with the law of the State of New York.
Please confirm your agreement with the foregoing by signing and
returning to the undersigned the duplicate copy of this letter enclosed
herewith.
Very truly yours,
CELLCO PARTNERSHIP
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President - Business Development
VERIZON WIRELESS OF THE EAST LP
By: Verizon Wireless of Georgia LLC, as
General Partner
By: Cellco Partnership, as sole member of
Verizon Wireless of Georgia LLC
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President - Business Development
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VERIZON COMMUNICATIONS INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President
Strategy, Development, Planning
VERIZON WIRELESS INC.
By: /s/ S. ▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
Name: S. ▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President and Secretary
Accepted and agreed as of the
date first written above:
PRICE COMMUNICATIONS CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title:
PRICE COMMUNICATIONS CELLULAR INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title:
PRICE COMMUNICATIONS CELLULAR HOLDINGS, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title:
PRICE COMMUNICATIONS WIRELESS, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title:
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