IdleAire successfully concludes consent solicitation for 13% notes

By Angela McDaniels

Seattle, Sept. 17 - IdleAire Technologies Corp. said the consent solicitation for its $320 million 13% senior discount notes due 2012 was successful and the note indenture has been amended.

The consent solicitation expired on Friday, pushed back from Thursday.

On Friday, the company said it received the required consents to amend the warrant agreement for the 320,000 warrants issued with the notes. The consent solicitation for the warrants expired on Thursday.

On Aug. 15, the company began a consent solicitation for the units comprising its $320 million of restricted old and registered new 13% senior secured discount notes due 2012 and 320,000 warrants to purchase common stock.

The units were issued in December 2005, and the old notes and warrants became separable as of June 30, 2006.

The warrants were exercisable into shares representing 30% of IdleAire's common stock on a fully diluted basis.

Under the note indenture, on June 15, 2009, the company is required to issue and deliver to noteholders additional warrants to purchase up to 10% of its outstanding common stock if the consolidated cash flow of IdleAire for the fiscal year ending Dec. 31, 2008 does not equal or exceed $40 million.

The consents allowed the company to amend the note indenture to:

• Add a provision requiring the company, upon closing of its initial public offering of common stock, to raise net proceeds of at least $100 million on or before June 30, 2008;

• Require IdleAire to issue and deliver to an escrow account 7,204,835 shares of common stock, representing about 5% of IdleAire's shares outstanding on the record date, for beneficial owners of the notes; and

• Amend the cash flow provision so that IdleAire is no longer obligated to deliver the contingent warrants if the restricted common shares are delivered upon a qualified public offering.

The consents also allowed IdleAire to modify the warrant agreement to provide for a 180-day lock-up of the existing warrants and the underlying shares following the IPO.

To make the amendments, the company needed consents from holders of two-thirds of the notes and a majority of the warrants.

Upon completion of the IPO, IdleAire will issue restricted common shares and the cash flow provision will become null and void.

The company's offer to issue new notes in exchange for the restricted old notes expired on Aug. 14.

Jefferies & Co. (203 708-5831) was the information agent for the consent solicitation, and Wells Fargo Bank, NA (612 667-9825) was the tabulation agent.

Based in Knoxville, Tenn., IdleAire is a privately held research and development company that provides products and services for the long-haul trucking freight industry.

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