T3 Intermediate FCC

LETTER submitted by T3 North Intermediate Holdings, LLC

Letter

2013-12-11

This document pretains to ITC-T/C-20131105-00295 for Transfer of Control on a International Telecommunications filing.

IBFS_ITCTC2013110500295_1030080

Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of ) ) NTS, Inc., Transferor ) ) File Nos. ITC-T/C-2013_______ and ) ITC-T/C-2013_______ ) T3 North Intermediate Holdings, LLC, Transferee ) WC Docket No. _______ ) Consolidated Application for Consent ) to Transfer Control of NTS, Inc., and Subsidiaries ) Possessing Blanket Domestic and International ) Section 214 Authority ) To: International Bureau Wireline Competition Bureau CONSOLIDATED APPLICATION FOR CONSENT TO TRANSFER OF CONTROL Pursuant to Section 214 of the Communications Act of 1934, as amended, 47 U.S.C. § 214 (the “Act”), and Section 63.03, 63.04 and 63.24(e) of the Commission’s Rules, 47 C.F.R. § 63.03, 63.04 and 63.24(e), NTS, Inc. (“NTS” or “Transferor”), and T3 North Intermediate Holdings, LLC (“T3 Intermediate” or “Transferee” and, together with NTS, the “Applicants”), hereby respectfully request the authority necessary to consummate a transaction (the “Transaction”) whereby T3 Intermediate will acquire direct control of NTS and indirect control of NTS’s subsidiaries. Two NTS subsidiaries — NTS Communications, Inc., and Xfone USA, Inc. — hold international Section 214 authorizations, and these and other subsidiaries (the “Subsidiary Licensees,” and collectively with NTS the “Licensees”) hold domestic Section 214 authorizations as set forth herein. NTS is a holding and managing company providing, through its subsidiaries, integrated communications services, which include voice, video and data, over its Fiber-To-The-Premises (“FTTP”) and other networks.

Application for Transfer of Control of NTS, Inc., and Subsidiaries Page 2 The Applicants respectfully request streamlined treatment of the Application pursuant to Sections 63.03 and 63.12 of the Rules. This Application is eligible for streamlined processing of domestic transfer of control applications pursuant to Section 63.03(b)(1) of the Rules because Transferee is not a telecommunications provider. This Application also is eligible for streamlined treatment pursuant to Section 63.03(b)(2)(i) of the Rules because (1) following consummation of the proposed Transaction, Transferee and its affiliates (as defined in Section 3(2) of the Act) will have less than a 10 percent share of the interstate, interexchange market and will provide competitive telephone exchange services exclusively in areas served by a dominant local carrier not a party to the Transaction; and (2) none of the Applicants or any of their affiliates are regulated as dominant with respect to any service. This Application is eligible for streamlined processing pursuant to Section 63.12(c) of the Rules because Transferee is not a foreign carrier itself and is not (and upon consummation of the Transaction would not be) affiliated with any foreign carrier or any dominant U.S. carrier. I. DESCRIPTION OF THE TRANSACTION Applicants have entered into an Agreement and Plan of Merger (“Agreement”) dated as of October 20, 2013, pursuant to which T3 Intermediate intends to acquire direct ownership and control of NTS and indirect control of NTS’s subsidiaries. T3 Intermediate is a Nevada limited liability company and a wholly owned subsidiary of T3 North Holdings, LLC (“T3 Holdings”), a Delaware limited liability company. Tower Three Partners Fund II LP (“T3P II”), a Delaware limited partnership, holds all of the direct ownership interests in, and exercises voting control of, T3 Holdings. Prior to closing, T3 Holdings will be converted to a Delaware

Application for Transfer of Control of NTS, Inc., and Subsidiaries Page 3 corporation wholly owned by T3P II, and T3 Intermediate will be converted to a Nevada corporation wholly owned by T3 Holdings. The proposed Transaction will be accomplished by the merger of North Merger Sub, Inc. (“Merger Sub”), a Nevada corporation wholly owned by T3 Intermediate, with and into NTS, with NTS surviving the merger as a direct, wholly owned subsidiary of T3 Intermediate. Immediately prior to the effective time of the merger, each share of NTS’s common stock (excluding the Rollover Shares described below) will be cancelled, with the holders of such shares being entitled to receive $2.00 per share. Guy Nissenson, NTS’s Chairman, President and Chief Executive Officer, has entered into a separate rollover agreement whereby certain shares of NTS common stock beneficially owned by Mr. Nissenson will be rolled over into shares of T3 Holdings. T3P II will continue to hold greater than 90 percent of the direct ownership and voting interests in T3 Holdings; Mr. Nissenson’s interest in T3 Holdings will be well under 10 percent. The business and affairs of T3 Holdings will be managed by its board of directors, which is expected to consist of William D. Forrest, Daniel Bellissimo, Michael Nold, and Guy Nissenson. Mr. Forrest and Mr. Nold are U.S. citizens. Mr. Bellissimo is a Canadian citizen. Mr. Nissenson is a British, Argentinian, and Israeli citizen. The business and affairs of T3 Intermediate is expected to be managed by its president, Mr. Forrest. Upon closing, it is likely that there will be outstanding warrants for the purchase of 450,000 shares of NTS, Inc., common stock. These warrants may not be exercised later than May 1, 2014. In the event that the warrants are exercised, T3 Intermediate will effect a short form merger under Nevada law, whereby T3 Intermediate will merge with and into NTS, Inc., with NTS, Inc. then becoming a wholly owned direct subsidiary of T3 North Holdings, Inc. Applicants certify that this post-closing reorganization, should it take place, will not result in any


Document Created: 2013-12-11 14:44:31
Document Modified: 2013-12-11 14:44:31
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