Celadon Group Completes $165 Million in New Long-Term Financing

• Facility Size:  $60.0 million
• Interest Rate:  LIBOR + 3.50%
• Borrowing Base:  90% of eligible U.S and Canadian accounts receivable
• Financial Covenants:  fixed charge ratio, leverage ratio, minimum liquidity, maximum capital expenditures

Term Loans
Highlights of the term loans include the following:

• Facility Size:  $105.0 million, including capitalized fees; senior and junior tranches
• Interest Rate:  LIBOR + 10.25%
• Amortization:  zero first year, 5.0% second year, 7.5% third year
• Financial Covenants:  fixed charge ratio, leverage ratio, minimum liquidity, maximum capital expenditures

Equity Warrants
The junior tranche term loan provider is receiving the warrants in the transaction.  Highlights of the warrants include the following:

• Warrant Shares:  Warrants to purchase 16.0 million common shares (or convertible preferred shares) are exercisable immediately, and warrants to purchase approximately 5.5 million shares become exercisable only in a change of control
• Fully Diluted Percentage:  Aggregate warrants equal approximately 33% of the Company's fully diluted equity; When added to shares currently owned, the holder's fully diluted position will be approximately 49.9%
• Strike Price:  One cent per share
• Other:  Board observer rights, registration rights, requirement to hold a stockholders' meeting to approve an increase in authorized common stock, and the Company's Board of Directors granted an exemption for the transaction to avoid triggering the Company's stockholder rights plan

The Company will provide additional information concerning the credit facilities on a Form 8-K to be filed with the United States Securities and Exchange Commission (the "SEC").

Advisors
Celadon Group, Inc. engaged AlixPartners LLP as financial and operating advisor and Evercore LLC as its investment bank.  Scudder Law Firm, P.C., L.L.O. served as legal counsel for the financing and DLA Piper LLP served as special counsel.

About Celadon
Celadon Group, Inc. (www.celadongroup.com), through its subsidiaries, provides long haul, regional, local, dedicated, intermodal, temperature-protect, and expedited freight service across the United States, Canada, and Mexico.

Forward Looking Statements
This press release contains certain statements that may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such statements are subject to the safe harbor created by those sections and the Private Securities Litigation Reform Act of 1995, as amended. Such statements may be identified by their use of terms or phrases, including "anticipates," "will," "intended," "believes," and similar terms and phrases. Forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, which could cause future events and actual results to differ materially from those set forth in, contemplated by, or underlying the forward-looking statements.  In this press release, statements relating to our fleet refresh, future cost savings, the completion of audited financial statements, relisting on a stock exchange, and other expressions of future activities or intent are forward-looking statements.  Actual results may differ from those set forth in the forward-looking statements.  Readers should review and consider factors that could cause actual results to differ from expectations, such as the ability to obtain tractor deliveries on the anticipated terms and schedule; the ability to obtain financing for the tractors included in the fleet refresh including lease purchase financing for independent contractors for a portion of the tractors; the ability to attract and retain drivers, including independent contractors; the realization of the anticipated cost savings, safety improvements, and productivity enhancements from the fleet refresh; delays or inability to complete the financial statement audit or relisting of the common stock; and the risks and other disclosures by the Company in its press releases, stockholder reports, and filings with the SEC.

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SOURCE Celadon Group, Inc.