EXHIBIT 10.35
AGREEMENT
This Agreement (this "Agreement") is entered into as of the 5th day of
June, 2004, by and among West Virginia PCS Alliance, L.C., Virginia PCS
Alliance, L.C. (collectively, "NTELOS"), and Horizon Personal Communications,
Inc., as debtor-in-possession ("Horizon").
WHEREAS, NTELOS and Horizon entered into a Network Services Agreement,
dated as of August 12, 1999, as amended (the "NSA");
WHEREAS, Horizon, Horizon PCS, Inc. and Bright Personal Communications,
Inc. (collectively, the "Horizon Parties") filed for protection under Chapter 11
of the United States Bankruptcy Code on August 15, 2003 (the "Chapter 11 Case")
in the United States Bankruptcy Court for the Southern District of Ohio (the
"Bankruptcy Court");
WHEREAS, the Horizon Parties filed a motion in the Chapter 11 Case to
reject the NSA, with such rejection to be effective upon the closing of a series
of transactions (the "Sprint Transaction") contemplated by a Settlement
Agreement and Mutual Release, dated as of May 12, 2004, by and among the Horizon
Parties and Sprint Corporation and several of its affiliated companies (the
effective date of such closing, the "Rejection Date");
WHEREAS, the parties hereto are the parties to an arbitration proceeding
pending before the American Arbitration Association (the "AAA"), in Atlanta,
Georgia (the "Arbitration Proceeding"), whereby the parties are seeking, among
other things, a determination by the arbitrator as to the appropriate pricing
for services rendered by NTELOS pursuant to the NSA from January 1, 2004 through
the Rejection Date;
WHEREAS, upon the terms and conditions herein and subject to approval of
the Bankruptcy Court, the parties desire to release and settle all post-petition
disagreements and claims between the parties which relate to the period of
August 15, 2003 through the Rejection Date, including without limitation the
parties' disagreements with respect to the pricing and payment terms for all
services rendered by NTELOS pursuant to the NSA from January 1, 2004 through the
Rejection Date.
NOW THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, agree as follows:
1. Payment for 2004 Services. Subject to Section 6 below, the parties
hereby agree that the total monthly payment due from Horizon to NTELOS for each
calendar month in 2004 (through the Rejection Date) shall be $3,866,700 (the
"Monthly Settlement Amount"), for all voice, data and other services rendered by
NTELOS
pursuant to the NSA, and all other charges billed by NTELOS to Horizon,
in each such calendar month. The payment of such amounts by Horizon shall be
made or credited as set forth below:
(a) January and February Services. The parties agree that the amounts
paid by Horizon to NTELOS on or about March 10, 2004 and April 10, 2004
constitute payment in full of the Monthly Settlement Amount for the months of
January and February 2004.
(b) March Services. Horizon has forwarded a payment of $3,866,700 for
March services under the NSA. Upon NTELOS' receipt of such payment, Horizon will
have satisfied the Monthly Settlement Amount for March services.
(c) April and May Services. Horizon represents that, pursuant to its
current Cash Collateral Order in the Chapter 11 Case, it has the right to make a
payment of $3,866,700 on each of June 10, 2004 and July 10, 2004 to NTELOS with
respect to the services rendered by NTELOS in April and May. Horizon agrees that
it shall make each of such two payments to NTELOS on such dates, as payment of
the applicable Monthly Settlement Amounts, notwithstanding that the Rejection
Date may occur prior to such payments.
(d) June Services. Horizon agrees to use its best efforts to seek a
new Cash Collateral Order from the Bankruptcy Court which would approve the
payment for June services on July 30, 2004. The amount to be paid for June
services shall be equal to the product of (a) the number of days that elapse
from June 1, 2004 through the Rejection Date, multiplied by $128,890,
representing the appropriate Monthly Settlement Amount for the partial month of
June 2004.
2. Remedies for Non-Payment. Subject to Section 6 below, in the event that
Horizon fails to pay the Monthly Settlement Amount for either March services or
April services when due in accordance with this Agreement, NTELOS shall have the
right, in addition to all other rights and remedies which it may have at law, in
equity or otherwise, to assert in an appropriate court proceeding, arbitration
proceeding or otherwise that the amount due for the services rendered by NTELOS
during the period from January 1, 2004 through the Rejection Date should be an
amount higher than the Monthly Settlement Amount. Subject to Section 6 below in
the event that Horizon fails to pay the Monthly Settlement Amount for either May
services or June services when due in accordance with this Agreement, NTELOS
shall have the right, in addition to all other rights and remedies which it may
have at law, in equity or otherwise with respect to such non-payment, to assert
in an appropriate court proceeding, arbitration proceedings or otherwise that
the amount due for the services rendered by NTELOS during the monthly period
subject to such non-payment (but no other months) should be an amount higher
than the Monthly Settlement Amount. NTELOS shall also have the right to assert
that any such non-payment will constitute an administrative claim in the Chapter
11 Case. Horizon agrees that such non-payment will constitute an allowed
administrative claim in the Chapter 11 Case and will support such payment
amount.
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3. Arbitration Proceeding. Subject to Section 6 below, Horizon and NTELOS
agree that, promptly after execution of this Agreement, they will notify the AAA
of the parties' agreement to stay all proceedings regarding a determination of
the 2004 rates under the NSA and any other claims before the AAA arising from
post-petition matters. The parties agree that such stay will not stay, delay or
otherwise affect the parties' demands, claims and defenses with respect to
pre-petition matters, including without limitation (a) Horizon's claim for the
refund of amounts which it alleges were unauthorized charges by NTELOS and (b)
NTELOS' claim for unpaid invoices for pre-petition voice services, it being the
intent and agreement of the parties that this Agreement shall not affect, delay
or impair any pre-petition claims that one party hereto may have against
another.
4. Releases.
(a) NTELOS Release. Subject to Section 6 below, each of Virginia PCS
Alliance, LC and West Virginia PCS Alliance, LC, on its behalf and on behalf of
all of its affiliates, hereby releases and forever discharges the Horizon
Parties, and each of their respective officers, directors, shareholders,
members, employees, agents, attorneys, professional advisors and representatives
(the "Horizon Released Parties") from all liabilities, claims, attorneys' fees,
damages, injuries, causes of action, and losses of any kind that NTELOS ever
had, now has, may assert or may in the future claim to have against any of the
Horizon Released Parties by reason of any act, failure to act, occurrence or
event occurring from and after August 15, 2003 through the date of this
Agreement which relates to or arises from the NSA or the parties' obligations or
operations thereunder, including without limitation all claims for payments
relating to data, voice and other services rendered from and after August 15,
2003 and all breach, damage or other claims arising from or relating to
Horizon's rejection of the NSA (collectively, the "NTELOS Claims"); provided,
however, that NTELOS does not release any claims arising out of a breach of the
obligations or covenants contained in this Agreement.
(b) Horizon Release. Subject to Section 6 below, Horizon, on its
behalf and on behalf of all of its affiliates, hereby releases and forever
discharges NTELOS and each of their respective officers, directors,
shareholders, members, employees, agents, attorneys, professional advisors and
representatives (the "NTELOS Released Parties") from all liabilities, claims,
attorneys' fees, damages, injuries, causes of action, and losses of any kind
that Horizon ever had, now has, may assert or may in the future claim to have
against any of the NTELOS Released Parties by reason of any act, failure to act,
occurrence or event occurring from and after August 15, 2003 through the date of
this Agreement which relates to or arises from the NSA or the parties'
obligations or operations thereunder, including without limitation all claims
for refunds of payments relating to data, voice and other services rendered from
and after August 15, 2003 (collectively, the "Horizon Claims"; together with the
NTELOS Claims, collectively referred to as the "Released Claims"); provided,
however, that Horizon does not release
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any claims arising out of a breach of the obligations or covenants contained in
this Agreement.
(c) Full Settlement. Subject to Section 6 below, and except as
expressly provided in this Section 4, this Agreement constitutes the complete
compromise, settlement, accord and satisfaction of all of the Released Claims.
No party will (i) commence or in any manner seek relief against another party in
any suit or proceeding based upon any Released Claim, or (ii) become a party to
any suit or proceeding arising from or in connection with an attempt by or on
behalf of any third party to enforce or collect an amount based on any Released
Claim.
(d) No Admission. It is expressly understood and agreed that this
Agreement is a compromise of disputed claims and that the execution of, making
of payments under, and performing of obligations under this Agreement are not to
be construed as an admission of liability on the part of any party.
5. Covenants. Subject to Section 6 below, in return for the payment
obligations of Horizon set forth herein, NTELOS agrees that (a) it will not
object to, challenge, appeal or take any action with respect to the Orders
entered by the Bankruptcy Court in connection with the court hearing in the
Chapter 11 Case conducted on June 1, 2004, (b) it consents to the rejection of
the NSA, effective as of the Rejection Date, (c) it will continue to provide
service under the NSA in the ordinary course of business, consistent with past
practice through and including the Rejection Date. Subject to Section 6 below,
in return for the acceptance by NTELOS of the payments set forth herein, Horizon
agrees that it will conduct its business in the markets covered by the NSA in
the ordinary course of business, consistent with past practice through and
including the Rejection Date. Each party agrees that no party will have any
obligations under the NSA relating to periods after the Rejection Date. Horizon
agrees to consider in good faith a means to accelerate the timing of the payment
for the June services, consistent with the then current Cash Collateral Order.
6. Bankruptcy Court Approval. Within two business days of the execution of
this Agreement, Horizon will file the necessary Motion to seek approval of this
Agreement by the Bankruptcy Court. If, at the court hearing which addresses the
Motion, the Bankruptcy Court fails or declines to approve this Agreement, the
covenants contained in Sections 1, 2, 4 and 5 shall be null and void and of no
further force and effect; provided, however, that (a) NTELOS shall, subject to
clause (b) below, be entitled to retain the payments it received under this
Agreement, (b) both parties shall reserve all post-petition rights and claims,
including without limitation Horizon's right to seek a refund of the payments
made hereunder, and (c) either party may, by written notice to AAA and to the
other party, terminate the stay in the Arbitration Proceedings relating to
post-petition claims.
7. Miscellaneous. This Agreement is not intended to constitute an
assumption of the Agreement pursuant to Section 365 of the Bankruptcy Code or a
new contract between the parties, and each party specifically acknowledges that
nothing in
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this Agreement shall affect any pre-petition claim which the other party may
have against such party arising out of the NSA or the provision of services
under the NSA, including, without limitation, the provision of voice services or
services for the transmission of text or other data messages. Each of the
Horizon Released Parties and NTELOS Released Parties are intended to be third
party beneficiaries of this Agreement and have the right to assert the
provisions hereof in any legal proceedings.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
through their duly authorized officers, as of the date first written above.
HORIZON PERSONAL COMMUNICATIONS, INC. WEST VIRGINIA PCS ALLIANCE, L.C.
By: By:
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Name: Name:
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Its: Its:
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VIRGINIA PCS ALLIANCE, L.C.
By:
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Name:
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Its:
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