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Exhibit 10.18a
CONSENT, WAIVER AND AMENDMENT
March 28, 1997
Xx. Xxxxx X. Xxxxxx
Chief Financial Officer
Sygnet Communications, Inc.
0000-X Xxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Dear Xxxxx:
Reference is made to the Credit Agreement dated as of October 9, 1996 (the
"CREDIT AGREEMENT") entered into by and among Sygnet Communications, Inc. (the
"BORROWER"), the lenders which are parties thereto (the "LENDERS"), Toronto
Dominion (Texas), Inc. (the "ADMINISTRATIVE AGENT") and PNC Bank, National
Association (the "DOCUMENTATION AGENT" and the "COLLATERAL AGENT").
Capitalized terms used in this Consent, Waiver and Amendment as defined terms
shall have the meanings given them in the Credit Agreement, unless otherwise
defined herein.
The Borrower has informed the Agents and the Lenders that it wishes to engage
in the following transactions for the following purposes:
(i) Make a dividend or a loan, or repay prior loans or advances, of
up to $10,000,000 (the "FIRST DIVIDEND") to Sygnet Wireless, Inc.
("WIRELESS"), the parent company of the Borrower. The First Dividend will be
invested by Wireless in a newly-created, wholly-owned subsidiary of Wireless
that will probably be known as Sygnet Redemption Corp. ("NEWSUB"). NewSub will
then purchase shares of Series A Senior Cumulative Nonvoting Preferred Stock
(the "PREFERRED STOCK") of Wireless (the "FIRST PREFERRED STOCK PURCHASE").
The First Preferred Stock Purchase is scheduled to occur on or about April 9,
1997.
(ii) Make a second dividend or a loan, or repay prior loans or
advances, to Wireless of up to $15,000,000 plus any amounts described in
clause (i) above that were not actually paid by the Borrower to Wireless (the
"SECOND DIVIDEND"). If the Second Dividend is made, it may be used by Wireless
only to purchase or redeem, directly or indirectly, all or a portion of the
remaining outstanding Preferred Stock from the holder thereof (the "SECOND
PREFERRED STOCK
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PURCHASE") and only if (A) Wireless is not prevented from doing so under the
terms of the Structurally Subordinated Indebtedness Documents or any other
document or instrument to which Wireless is a party or by which it is bound or
subject, and (B) no default or event of default under the Structurally
Subordinated Indebtedness Documents or any other such document or instrument
is then in existence or would result from such purchase or redemption.
The Borrower intends to fund the First Dividend and the Second Dividend using
either cash available from operations or proceeds of an advance or advances
under the Credit Agreement.
The Borrower has also informed the Agents and the Lenders that Wireless has in
the past made loans or advances of funds available to the Borrower in excess
of amounts permitted to be advanced under the Credit Agreement.
The Borrower has in addition informed the Agents and the Lenders that the
Borrower and Wireless plan to enter into the Management Agreement that is
contemplated by the Credit Agreement; except that the Management Agreement
will provided that such fees may not exceed (i) $500,000 in any Fiscal Year or
(ii) $250,000 during the four consecutive Fiscal Quarters after an Event of
Default and during the continuance thereof, without the express written
consent of the Agents. Section 6.5(iii) of the Credit Agreement permits the
Borrower to pay management fees pursuant to the Management Agreement if no
Event of Default is existing or would be caused thereby.
The Borrower is prohibited from making either the First Dividend or the Second
Dividend pursuant to the terms of Sections 6.5 and 6.10 of the Credit
Agreement and is also prohibited from using the proceeds of advances under the
Credit Agreement to fund the First Dividend and the Second Dividend. The loans
and advances made by Wireless to the Borrower violate Section 6.1 of the
Credit Agreement. The Credit Agreement does not permit the repayment of
indebtedness by the Borrower to Wireless. The Credit Agreement requires that
the Management Agreement must be reasonably satisfactory to the Required
Lenders.
The Borrower has therefore requested the following:
(i) that the Lenders consent to the First Dividend and the
Second Dividend (and use of the proceeds of an advance or advances under the
Credit Agreement for such purposes, if requested), for use by Wireless and
NewSub as set forth above;
(ii) that the Lenders waive any Defaults or Events of
Default which may arise under Sections 6.5, 6.10 and 6.12 relating to the
First Dividend and the Second Dividend;
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(iii) that the Lenders waive, effective as of October 9,
1996, any Defaults or Events of Default which have arisen under Sections 6.1,
6.5, 6.10 or 6.12 of the Credit Agreement as a result of advances or loans
made by Wireless to the Borrower or any repayment thereof prior to the date
hereof;
(iv) that the Credit Agreement be amended to permit existing
and future advances or loans by Wireless to the Borrower in an amount not to
exceed $67,000,000, which will be unsecured and subordinated to the
Obligations owed to the Lenders under the Credit Agreement, and to permit the
Borrower to repay principal of this subordinated indebtedness only to the
extent it is now permitted to pay dividends to Wireless and to expressly
recognize that such subordinated indebtedness is not included within Total
Indebtedness or Debt Service; and
(v) that the Lenders approve, effective as of October 9,
1996, the Management Services Agreement dated as of October 9, 1996 entered
into by and between Wireless and the Borrower, which provides for, among other
things, the payment by the Borrower to Wireless (notwithstanding the existence
or causing of any Event of Default) of management fees not to exceed (i)
$500,000 in any Fiscal Year or (ii) $250,000 during the four consecutive
Fiscal Quarters after an Event of Default and during the continuance thereof,
without the express written consent of the Agents.
PNC Bank, National Association, in its capacity as Documentation Agent and for
and on behalf of and with the consent of the Required Lenders, hereby agrees
as follows:
a. the Borrower may make the First Dividend and the Second
Dividend on the terms set forth above, and the Lenders, if requested by the
Borrower, will make a Loan or Loans to the Borrower in an aggregate principal
amount of up to $25,000,000 (subject to all other terms and conditions of the
Credit Agreement), to be used by the Borrower to fund the First Dividend and
the Second Dividend, as described above;
b. any Default or Event of Default which would result from
the violation of Sections 6.5, 6.10 or 6.12 of the Credit Agreement as a
result of making either the First Dividend or the Second Dividend to Wireless
(or the use of the proceeds from such Loans to fund the First Dividend and the
Second Dividend) is hereby waived;
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c. any Default or Event of Default which has arisen as a
result of loans or advances being made by Wireless to the Borrower (or any
repayments thereof by the Borrower prior to the date hereof) in violation of
Sections 6.1, 6.5, 6.10 or 6.12 of the Credit Agreement is hereby waived,
effective as of October 9, 1996;
d. the Management Services Agreement referred to above is
approved, effective as of October 9, 1996; such Management Services Agreement
constitutes the "Management Agreement", as defined in the Credit Agreement,
and is subject to all applicable terms and provisions of the Credit Agreement;
and
e. The following amendments are hereby made to the Credit
Agreement:
(i) The definition of the term "Loan Document" set
forth in Section 1.1 is hereby amended and restated to read as follows:
LOAN DOCUMENT: Any of this Agreement, any
Revolving Credit Note, any Security Document, any Subsidiary
Guaranty Agreement, any Fee Letter, any Interest Hedge
Agreement entered into with a Lender, the Management
Agreement, any subordination agreement entered into in
connection with any Subordinated Indebtedness, and all other
agreements, documents and instruments executed and delivered
to govern, evidence or secure the Obligations, and the
statements, reports, certificates and other documents
required by, or related to, any of the foregoing, together
with all extensions, renewals, amendments, substitutions and
replacements to and of any of the foregoing.
(ii) Section 6.1 of the Credit Agreement is hereby
amended by (1) deleting the word "and" at the end of item (iii) thereof; (2)
deleting the period at the end of item (iv) thereof and replacing it with ";
and" and (3) adding the following new item (v) immediately following item
(iv):
(v) Existing and future Indebtedness owed
to Wireless from time to time in an outstanding principal
amount not to exceed $67,000,000 at any one time; PROVIDED
(A) that such Indebtedness is unsecured, (B) that the
obligation to repay such Indebtedness is evidenced by a
promissory note satisfactory to the
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Agents and clearly stating that the obligations evidenced by
such note are subordinated to the Obligations and (C) that
the Borrower, Wireless and the Agents, for and on behalf of
the Lenders, enter into a subordination agreement with
respect to such Indebtedness which must be satisfactory to
the Agents in all respects. Indebtedness permitted to be
outstanding pursuant to this item (v) shall be considered
"Subordinated Indebtedness" but not a part of "Total
Indebtedness" for purposes of this Agreement, and any
repayment thereof will not be included in Debt Service.
(iii) Paragraph (i) of Section 6.5 is hereby
amended and restated in their entirety to read as follows:
(i) The Borrower may from time to time
declare and pay dividends to Wireless, make loans to
Wireless or repay principal of Subordinated Indebtedness
owed to Wireless, which shall not at any time exceed amounts
required to make scheduled payments of interest on the
Structurally Subordinated Indebtedness; PROVIDED, HOWEVER,
that no Event of Default or Material Default exists or would
be caused by the declaration of or the payment of such
dividend, the making of such loan or the repayment of such
Subordinated Indebtedness.
(iv) Paragraph (ii) of Section 6.5 is hereby
amended by restating the introductory clause thereof as follows:
(ii) The provisions of the preceding item
(i) of this Section 6.5 to the contrary notwithstanding, the
Borrower, if Events of Default have occurred and are
continuing, may declare and pay dividends to Wireless, make
loans to Wireless or repay principal of Subordinated
Indebtedness to Wireless, in an amount which shall not
exceed (A) amounts then required to make any past due
payment of interest on the Structurally Subordinated
Indebtedness, which payment of interest is past due by
reason of item (i) above, and (B) the next scheduled payment
of interest on the Structurally Subordinated Indebtedness;
PROVIDED:
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The making of the Loans contemplated in this Consent, Waiver and Amendment are
expressly conditioned upon the satisfaction by the Borrower of all conditions
to lending set forth in the Credit Agreement. In addition, both the First
Dividend and the Second Dividend, as well as the First Preferred Stock
Purchase and the Second Preferred Stock Purchase, are expressly conditioned
upon the prior receipt by the Documentation Agent of a certificate signed by
the Borrower and Wireless, satisfactory to the Agent, stating that the funding
of such dividend and the use by Wireless of such dividend has not and will not
result in a Default or an Event of Default under the Credit Agreement or under
any of the other Loan Documents that has not been waived in this Consent,
Waiver and Amendment, or a default or event of default under any of the
Structurally Subordinated Indebtedness Documents or any other document or
instrument to which either the Borrower or Wireless is a party or is bound or
subject, and the Documentation Agent's satisfaction that this certification is
correct. Finally, the effectiveness of this Consent, Waiver and Amendment is
specifically conditioned upon receipt by the Documentation Agent of a fully
executed subordination agreement, as referred to above, a copy of the
subordinated promissory note referred to above, and a certificate signed by
the Borrower and Wireless stating that the making of such loans and advances
by Wireless to the Borrower and the incurrence of such Subordinated
Indebtedness by the Borrower has not and will not result in a Default or an
Event of Default under the Credit Agreement or any of the other Loan Documents
that has not been waived in this Consent, Waiver and Amendment, or a default
or event of default under any of the Structurally Subordinated Indebtedness
Documents or any other document or instrument to which either the Borrower or
Wireless is a party or is bound or subject, and the Documentation Agent's
satisfaction that this certification is correct, all of the foregoing to be
satisfactory to the Agents.
Except as expressly described above, this Consent, Waiver and Amendment shall
not constitute (i) a modification or an alteration of the terms, conditions or
covenants of the Credit Agreement or any other Loan Documents or (ii) a
waiver, release or limitation upon any Agent's or any Lender's exercise of any
of its rights and remedies thereunder, all of which are hereby expressly
reserved. This Consent, Waiver and Amendment shall not relieve or release the
Borrower in any way from any of its duties, obligations, covenants or
agreements under the Credit Agreement or any of the other Loan Documents or
from the consequences of any Event of Default thereunder, except as expressly
described above. This Consent, Waiver and Amendment shall not obligate any
Agent or any Lender, or be construed to require any Agent or any Lender, to
waive any other Events of Default or Defaults, whether now existing or which
may occur after the date hereof.
This Consent, Waiver and Amendment may be executed in multiple counterparts,
and by the parties hereto on separate counterparts, each complete set of
which, when so executed and
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delivered, shall constitute an original, but all such counterparts shall
constitute but one and the same instrument.
Please execute this Consent, Waiver and Amendment where indicated below and
return it to me in order for it to be effective.
Very truly yours,
PNC BANK, NATIONAL ASSOCIATION,
as Documentation Agent
By: /s/ XXXXXX X. XXXXXXX
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Xxxxxx X. Xxxxxxx
Vice President
Accepted and agreed to as of the date set forth above.
SYGNET COMMUNICATIONS, INC.
By: /s/ XXXXX X. XXXXXX
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Xxxxx X. Xxxxxx
Chief Financial Officer
