Exhibit 10.40.3
THIRD AMENDMENT TO CREDIT AGREEMENT AND WAIVER
THIS THIRD AMENDMENT TO CREDIT AGREEMENT AND WAIVER, dated as of November
26, 2001 (this "Third Amendment"), is entered into by and among HORIZON PERSONAL
COMMUNICATIONS, INC., an Ohio corporation (the "Company"), BRIGHT PERSONAL
COMMUNICATIONS SERVICES, LLC, an Ohio limited liability company ("Bright") (each
of the Company and Bright, individually a "Borrower" and collectively, the
"Borrowers"), HORIZON PCS, INC., a Delaware corporation (the "Parent"), those
Subsidiaries of the Parent listed on the signature pages hereto (together with
the Parent, individually a "Guarantor" and collectively the "Guarantors"; the
Guarantors, together with the Borrowers, individually a "Credit Party" and
collectively the "Credit Parties"), the lenders party hereto (the "Lenders"),
FIRST UNION NATIONAL BANK, as Administrative Agent (the "Administrative Agent"),
WESTDEUTSCHE LANDESBANK GIROZENTRALE, as Syndication Agent and Arranger (the
"Syndication Agent"), and FORTIS CAPITAL CORP., as Documentation Agent (the
"Documentation Agent").
W I T N E S S E T H
WHEREAS, the Borrowers, the Guarantors, the Administrative Agent, the
Syndication Agent, the Documentation Agent and the Lenders are parties to that
certain Credit Agreement dated as of September 26, 2000 (as previously amended
and as amended, modified, supplemented or restated from time to time, the
"Credit Agreement"; capitalized terms used herein shall have the meanings
ascribed thereto in the Credit Agreement unless otherwise defined herein);
WHEREAS, the Credit Parties intend for the Parent to issue up to $200
million in additional debt securities (the "New Debt Issuance");
WHEREAS, in connection with the New Debt Issuance the Credit Parties have
requested certain amendments and waivers to the Credit Agreement; and
WHEREAS, the Required Lenders have agreed to such amendments and waivers
subject to the terms and conditions set forth herein.
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
AMENDMENTS
1.1 Definition of Permitted Parent Debt Documents. The definition of
"Permitted Parent Debt Documents" set forth in Section 1.1 of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:
"Permitted Parent Debt Documents" shall mean (i) that certain
Indenture dated as of September 26, 2000 among the Parent, the Subsidiaries
of the Parent party thereto, as guarantors and Xxxxx Fargo Bank, a national
banking association, as Trustee and those certain notes dated as of
September 26, 2000 issued by the Parent in connection therewith and all
other documents executed pursuant thereto, and all exchange notes issued
pursuant to such indenture, in each case in form and substance satisfactory
to the Lenders as of the Closing Date and as from time to time amended,
restated, supplemented or otherwise modified in accordance with Section
9.11 herein and (ii) that certain Indenture to be entered into in December
2001 and those certain notes issued in connection therewith and due as of
December 2011 and all other documents executed pursuant thereto and all
exchange notes issued in connection therewith and as from time to time
amended, restated, supplemented or otherwise modified in accordance with
Section 9.11 herein; provided that the Indebtedness issued pursuant to the
indenture mentioned in clause (ii) above (i) shall have a market rate of
interest at the time of pricing, (ii) shall not have any scheduled
amortization prior to the date which is six (6) months after the Term Loan
B Maturity Date and (iii) shall have terms and conditions (including with
respect to covenants, guaranties and subordination provisions) and related
documentation that are substantially the same as those set forth in the
Indenture dated as of September 26, 2000 (but to include an Interest Escrow
Account as permitted under Section 9.3(h)).
1.2 Definition of Interest Escrow Account. Section 1.1 of the Credit
Agreement is hereby amended by the addition of the following definition in the
appropriate alphabetical order:
"Interest Escrow Account" shall have the meaning set forth in Section
9.3(h).
1.3 Stage 1 Financial Covenants. Sections 8.1(a) and (g) of the Credit
Agreement are hereby amended and restated in their entirety to read as follows:
(a) Total Debt to Total Capitalization Ratio: As of any date of
determination, permit the ratio of (i) Total Debt of the Parent and its
Subsidiaries on such date to (ii) Total Capitalization of the Parent and
its Subsidiaries on such date to be greater than .80 to 1.0.
***********
(g) Maximum Capital Expenditures: Permit Capital Expenditures made
during each fiscal year occurring during the Stage 1 Covenant Period to
exceed the corresponding amount set forth below:
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Fiscal Year Amount
--------------------------------- ---------------------------------
2000 $128,900,000
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2001 $94,300,000
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2002 $72,000,000
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2003 $23,800,000
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; provided, however, if any portion of the annual Capital Expenditure
limitation is not used during any fiscal year referred to above, such
unused amount may be carried forward (the "Carry-Forward Amount") and used
in the next fiscal year only; provided, further, that with respect to any
fiscal year, Capital Expenditures made during such fiscal year shall be
deemed to be made first with respect to the applicable limitation for such
year and then with respect to any Carry-Forward Amount to the extent
applicable.
1.4 Stage 2 Financial Covenants. Sections 8.2(a) of the Credit Agreement is
hereby amended and restated in its entirety to read as follows:
(a) Leverage Ratio: As of any fiscal quarter end during the applicable
period set forth below, permit the ratio of (i) Total Debt of the Credit
Parties and their Subsidiaries to (ii) the product of Consolidated EBITDA
of the Credit Parties and their Subsidiaries for the six-month period
ending on such fiscal quarter end multiplied by two (2) (the "Leverage
Ratio") to exceed the corresponding ratio set forth below:
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Period Ratio
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June 30, 2004 through 10.75 to 1.0
December 31, 2004
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March 31, 2005 through 8.50 to 1.0
June 30, 2005
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September 30, 2005 through 6.25 to 1.0
December 31, 2005
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March 31, 2006 through 5.25 to 1.0
June 30, 2006
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September 30, 2006 through December 31, 2006 4.25 to 1.0
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March 31, 2007 and thereafter 3.50 to 1.0
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1.5 Permitted Parent Debt. Section 9.1(c) of the Credit Agreement is hereby
amended and restated in its entirety to read as follows:
(b) Indebtedness of the Parent arising under the Permitted Parent Debt
Documents in an original aggregate issue principal amount not to exceed
$350,000,000 (such Indebtedness, the "Permitted Parent Debt");
1.6 Limitation on Liens. Section 9.3 is hereby amended by deleting the word
"and" at the end of clause (f), inserting the word "and" at the end of clause
(g) and inserting a new clause (h) as follows:
(h) Liens on cash and Cash Equivalents in connection with an interest
escrow account (the "Interest Escrow Account") securing obligations in
respect of the Indebtedness referred to in the definition of Permitted
Parent Debt Documents, provided that (A) such account is established at the
time of the issuance of the Indebtedness referred to in clause (ii) of such
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definition and (B) such Liens extend only to net proceeds of such issuance
deposited in such account in an amount not exceeding the amount of the
initial four semi-annual interest payments on such Indebtedness, and to
earnings thereon and proceeds thereof.
1.7 Limitations on Dividends and Distributions. Section 9.7 of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:
Section 9.7 Limitations on Dividends and Distributions.
Declare or pay any dividends upon any of its Capital Stock or other
equity interests; purchase, redeem, retire or otherwise acquire, directly
or indirectly, any shares of its Capital Stock or other equity interests;
return capital of the Borrowers to the Parent; or make any distribution of
cash, property or assets among the holders of shares of its Capital Stock
or make other payments or distributions to any Affiliate of any Credit
Party or any of its Subsidiaries, in each case with respect to its Capital
Stock or in its capacity as holder of Capital Stock; provided that (a) each
Credit Party may make dividends payable solely in the same class of Capital
Stock of such Person, (b) each Credit Party may make dividends or other
distributions payable to the Borrowers and (c) if no Default or Event of
Default has occurred and is continuing nor would occur as a result thereof
(i) the Borrowers may make payments to the Parent to pay (A) corporate
overhead or administrative costs in an aggregate amount not to exceed
$150,000 during any fiscal year and (B) amounts necessary to pay liquidated
damages payable by the Parent as a result of a Registration Default (as
defined in the Warrant Registration Rights Agreement dated as of the
Closing Date among the Parent and the initial purchasers named therein and
the Note Registration Rights Agreement dated as of the Closing Date among
the Parent, the subsidiary guarantors named therein and the initial
purchasers named therein) such amounts not to exceed $1,000,000 in the
aggregate, (ii) a Credit Party may repurchase shares of its Capital Stock
pursuant to the exercise of rights of first refusal granted in connection
with a proposed sale of such Capital Stock by an option-holder who has
exercised stock options pursuant to an option plan approved by the board of
directors of such Credit Party in an aggregate amount not to exceed
$3,000,000 during any fiscal year, (iii) a Credit Party may make payments
as required pursuant to the contracts set forth on Schedule 9.9 as in
effect on the Closing Date and in the amounts stated on such Schedule, (iv)
the Borrowers may make distributions to the Parent to make regularly
scheduled payments of interest on Permitted Parent Debt; provided, however,
that no such distributions shall be permitted hereunder with respect to
interest obligations relating to the Indebtedness referred to in clause
(ii) of the definition of Permitted Parent Debt Documents until the
depletion in full of all amounts deposited in the Interest Escrow Account
in respect of such Indebtedness, (v) the Company may dividend or distribute
shares of Horizon Telcom, Inc. that it owns to the Parent and the Parent
may dividend or distribute such shares of Horizon Telcom, Inc. to its
shareholders and (vi) at any time prior to April 30, 2001, the Parent may
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redeem its Series A-1 Convertible Preferred Capital Stock in an aggregate
amount not to exceed $86,000,000 pursuant to Article 4, Subpart C,
Subsection F(2)(i) of the Parent's Amended and Restated Articles of
Incorporation with proceeds of an initial public offering of the Parent's
Capital Stock in an aggregate amount yielding proceeds of not less than
$86,000,000 in the aggregate.
SECTION 2
WAIVER
2.1 Waiver. The Required Lenders hereby waive the Borrowers' obligation,
pursuant to Section 3.3(b)(iii) of the Credit Agreement, to prepay the Loans
with Net Cash Proceeds derived from the New Debt Issuance. Except for the
specific, one-time waiver set forth above, nothing set forth herein or
contemplated hereby is intended to constitute a waiver of (i) any rights or
remedies available to the Lenders or the Administrative Agent under the Credit
Agreement or any other Credit Document or under applicable law (all of which
rights and remedies are hereby expressly reserved by the Lenders and the
Administrative Agent) or (ii) the Credit Parties' obligation to comply fully
with any duty, term, condition, obligation or covenant contained in the Credit
Agreement and the other Credit Documents.
SECTION 3
CLOSING CONDITIONS
3.1 Closing Conditions.
This Third Amendment shall be effective as of the date first above written
(the "Third Amendment Effective Date") at such time as the following conditions
shall have been satisfied (in form and substance reasonably acceptable to the
Administrative Agent):
(a) Third Amendment. Receipt by the Administrative Agent of a copy of
this Third Amendment duly executed by each of the Credit Parties and the
Required Lenders.
(b) Resolutions. Receipt by the Administrative Agent of copies of
resolutions of the Board of Directors of each of the Credit Parties
approving and adopting this Third Amendment, the transactions contemplated
herein and authorizing execution and delivery hereof, certified by a
secretary or assistant secretary of such Credit Party to be true and
correct and in force and effect as of the date hereof.
(c) Amendment Fee. Receipt by the Administrative Agent, on behalf of
each Lender that executes this Third Amendment by 5:00 pm EDT on November
26, 2001, of an amendment fee equal to the fee set forth in the fee letter
dated as of the date hereof.
(d) New Debt Issuance. This Third Amendment shall become effective
(the "Amendment Effective Date") only upon the satisfaction of the
following conditions prior to December 31, 2001: (i) the Administrative
Agent shall have reviewed and approved in its sole discretion all of the
Permitted Debt Documents relating to the New Debt Issuance (the "New Debt
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Issuance Documents"), (ii) the Parent shall have received gross cash
proceeds from the New Debt Issuance of at least $150,000,000 and shall have
contributed to the Borrower the entire net proceeds thereof less an amount
equal to the interest obligations owing in respect of the first four
semi-annual payments which shall be deposited in the Interest Escrow
Account. The Administrative Agent shall have received a copy, certified by
an officer of the Borrowers to be true and complete, of each New Debt
Issuance Document as originally executed and delivered, together with all
exhibits and schedules thereto.
(e) Legal Opinion. Receipt by the Administrative Agent of an opinion
or opinions from counsel to the Credit Parties relating to this Third
Amendment and the transactions contemplated herein, in form and substance
satisfactory to the Administrative Agent, addressed to the Administrative
Agent on behalf of the Lenders and dated as of the date hereof.
(f) Fees and Expenses. The Borrowers shall have paid in full all
reasonable fees and expenses of the Administrative Agent in connection with
the preparation, execution and delivery of this Third Amendment, including,
without limitation, the fees and expenses of Xxxxx & Xxx Xxxxx, PLLC.
SECTION 4
MISCELLANEOUS
4.1 Amended Terms. The term "Credit Agreement" as used in each of the
Credit Documents shall hereafter mean the Credit Agreement as amended by this
Third Amendment. Except as specifically amended hereby or otherwise agreed, the
Credit Agreement is hereby ratified and confirmed and shall remain in full force
and effect according to its terms.
4.2 Representations and Warranties of Credit Parties. Each of the Credit
Parties represents and warrants as follows:
(a) It has taken all necessary action to authorize the execution,
delivery and performance of this Third Amendment.
(b) This Third Amendment has been duly executed and delivered by such
Person and constitutes such Person's legal, valid and binding obligations,
enforceable in accordance with its terms, except as such enforceability may
be subject to (i) bankruptcy, insolvency, reorganization, fraudulent
conveyance or transfer, moratorium or similar laws affecting creditors'
rights generally and (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding at law or in
equity).
(c) No consent, approval, authorization or order of, or filing,
registration or qualification with, any court or governmental authority or
third party is required in connection with the execution, delivery or
performance by such Person of this Third Amendment.
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(d) The representations and warranties set forth in Article V of the
Credit Agreement are, subject to the limitations set forth therein, true
and correct in all material respects as of the date hereof (except for
those which expressly relate to an earlier date).
4.3 Acknowledgment of Guarantors. The Guarantors acknowledge and consent to
all of the terms and conditions of this Third Amendment and agree that this
Third Amendment and all documents executed in connection herewith do not operate
to reduce or discharge the Guarantors' obligations under the Credit Documents.
4.4 Credit Document. This Third Amendment shall constitute a Credit
Document under the terms of the Credit Agreement.
4.5 Entirety. This Third Amendment and the other Credit Documents embody
the entire agreement between the parties hereto and supersede all prior
agreements and understandings, oral or written, if any, relating to the subject
matter hereof.
4.6 Counterparts; Telecopy. This Third Amendment may be executed in any
number of counterparts, each of which when so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument.
Delivery of an executed counterpart to this Third Amendment by telecopy shall be
effective as an original and shall constitute a representation that an original
will be delivered.
4.7 General Release. In consideration of the Required Lenders entering into
this Third Amendment, the Credit Parties hereby release the Administrative
Agent, the Lenders, and the Administrative Agent's and the Lenders' respective
officers, employees, representatives, agents, counsel and directors from any and
all actions, causes of action, claims, demands, damages and liabilities of
whatever kind or nature, in law or in equity, now known or unknown, suspected or
unsuspected to the extent that any of the foregoing arises from any action or
failure to act under the Credit Agreement on or prior to the date hereof.
4.8 GOVERNING LAW. THIS THIRD AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES UNDER THIS THIRD AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NORTH CAROLINA.
4.9 Consent to Jurisdiction; Service of Process; Arbitration. The
jurisdiction, services of process and arbitration provisions set forth in
Sections 12.5 and 12.6 of the Credit Agreement are hereby incorporated by
reference, mutatis mutandis.
[Signature Pages to Follow]
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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this Third Amendment to be duly executed and delivered as of the date first
above written.
BORROWERS: HORIZON PERSONAL COMMUNICATIONS, INC.
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
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Title: CFO
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BRIGHT PERSONAL COMMUNICATIONS SERVICES, LLC
By: /s/ Xxxxxx X. Xxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxx
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Title: Secretary/Treasurer
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GUARANTORS: HORIZON PCS, INC.
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
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Title: CFO
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ADMINISTRATIVE AGENT/ LENDERS: FIRST UNION NATIONAL BANK,
as Administrative Agent and as a Lender
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
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Title: SVP
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LENDERS (continued): WESTDEUTSCHE LANDESBANK GIROZENTRALE, NEW YORK
BRANCH, as Syndication Agent and Arranger and
as a Lender
By: /s/ Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
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Title: Managing Director
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By: /s/ Xxxxx Xxxxxxxxx
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Name: Xxxxx Xxxxxxxxx
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Title: Director
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LENDERS (continued): FORTIS CAPITAL CORP.,
as Documentation Agent and as a Lender
By: /s/ Xxxx X. XxXxxxxxx
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Name: Xxxx X. XxXxxxxxx
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Title: Managing Director
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By: /s/ Xxxx Xxxxx
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Name: Xxxx Xxxxx
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Title: Assistant Vice President
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LENDERS (continued): COBANK, ACB
By: /s/ Xxxxxxxxxxx X. Xxxx
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Name: Xxxxxxxxxxx X. Xxxx
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Title: V.P.
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LENDERS (continued): MOTOROLA CREDIT CORPORATION
By:
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Name:
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Title:
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LENDERS (continued): NATIONAL CITY BANK
By: /s/ Xxxxx Xxxxxxxx
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Name: Xxxxx Xxxxxxxx
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Title: Senior Vice President
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LENDERS (continued): BANK OF TOKYO-MITSUBISHI TRUST COMPANY
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
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Title: Vice President
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LENDERS (continued): CIT LENDING SERVICES CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
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Title: Vice President
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LENDERS (continued): IBM CREDIT CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
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Title: Manager of Credit
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