AMENDMENT NO. 6
This Amendment No. 6 entered into as of March 31, 1999 (this "Amendment")
by and among GALAXY TELECOM, L.P., ("GTLP"), GALAXY TELECOM CAPITAL CORP.
("Capital Corp."; and together with GTLP, the "Borrower"), the financial
institutions party to the Amended and Restated Loan Agreement referred to below
(the "Lenders"), and FLEET NATIONAL BANK ("Fleet"), a national banking
association organized under the laws of the United States of America, as agent
for itself and the other Lenders (the "Agent"). Capitalized terms used but not
otherwise expressly defined herein shall have the meanings assigned thereto in
the Loan Agreement (as such term is defined below).
PRELIMINARY STATEMENTS:
WHEREAS, the Borrower, the Lenders, and the Agent have entered into an
Amended and Restated Loan Agreement dated as of September 28, 1995, as
amended by Amendment No. 1 dated as of October 21,1996, Amendment No. 2 dated
as of March 28, 1997, Amendment No. 3 dated as of November 14, 1997,
Amendment No. 4 dated as of March 27, 1998 and Amendment No. 5 dated as of
August 31, 1998 (as amended, the "Loan Agreement"). Capitalized terms used
herein and not otherwise defined shall have the meanings specified in the
Loan Agreement;
WHEREAS, the Borrower has requested that the Lenders amend certain
provisions of the Loan Agreement;
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto hereby agree as follows:
1. Amendment. The parties hereto agree that the Loan Agreement is
hereby amended as follows:
(a) Total Indebtedness and Senior Indebtedness Coverage. Effective
as of the date hereof, Section 5.1.10 of the Loan Agreement is
hereby amended by replacing the required ratio for the period
from April 1, 1999 through June 30, 1999 and the period from
July 1, 1999 through December 31, 1999 with the period and
ratios set forth below opposite such period:
Total Senior
Indebtedness
Indebtedness
Ratio Ratio
April 1, 1999 through 6.75:1.00
2.00:1.00
December 31, 1999
(b) Total Indebtedness per Subscriber. Effective as of the date
hereof, clause (B) of Section 5.1.11 of the Loan Agreement is
hereby amended to read as follows:
"(B) $1,100:1.00 for the period from September 30, 1998
through December 31, 1998 and $1,175 for the period from January 1,
1999 through December 31, 1999,"
(c) Interest Coverage. Effective as of the date hereof, Section
5.1.12 of the Loan Agreement is hereby amended by deleting the
period "July 1, 1999 through December 31, 1999" and the ratio
for such period and by substituting the following in place
thereof:
July 1, 1999 through 1.25:1.00
December 31, 1999
2. Minimum Ratio of Operating Cash Flow to Total Debt Service. Effective
as of the date hereof, it is agreed that, to the extent that the Borrower makes
principal payments on the Loans in accordance with Sections 2.1.2(b) or
2.1.7.2(b) of the Loan Agreement during 1999, such principal payments shall not
be included in calculating Total Debt Service for 1999.
3. Principal Amortization. Notwithstanding anything to the contrary set
forth in the Loan Agreement, (i) the net cash proceeds (after reasonable
expenses) of all System Asset Sales occurring from the date hereof until the
close of business on December 31, 1999, and (ii) the net cash proceeds (after
reasonable expenses) received by the Borrower, GTI and/or LLC from any equity
investment in, or Indebtedness for Borrowed Money incurred by, any of the
Borrower, GTI and/or LLC, shall be applied in the following manner: (A) with
respect to any such System Asset Sale, equity investment or Indebtedness
incurrence occurring prior to the Conversion Date, such net cash proceeds shall
be paid to the Agent and held by the Agent in escrow until July 1, 1999 and then
applied on July 1, 1999 to prepay the principal amortization of the Loans due on
September 30, 1999 and December 31, 1999, (B) with respect to any such System
Asset Sale, equity investment or Indebtedness incurrence occurring on or after
July 1, 1999, such net cash proceeds shall be immediately paid to the Agent and
immediately applied to prepay the principal amortization of the Loans due on
September 30, 1999 and December 31, 1999 and (C) with respect to any such System
Asset Sale, equity investment or Indebtedness incurrence the net cash proceeds
of which are in excess of the amounts to be applied as provided in (A) and (B)
above, such excess net cash proceeds shall be applied to prepay the Loans in the
inverse order of maturity and with respect to any such prepayment of the Loans
occurring prior to the Conversion Date, the Commitment shall be permanently
reduced by a like amount. Any amendment to or waiver of the terms of the
foregoing sentence shall be deemed to require the consent of all of the Lenders
as provided for under Section 9.5(vii) of the Loan Agreement. In addition to the
foregoing, in the event that the Loans have not been repaid in full and the
Commitment terminated on or before June 30, 1999, it shall constitute an Event
of Default under the Loan Agreement if the amount of Management Fees actually
paid by the Borrower to the Manager during any fiscal quarter, commencing with
the fiscal quarter commencing on July 1, 1999, shall exceed an amount equal 3%
of the Gross Revenues of the Borrower (other than from the sale or other
disposition of a capital asset) during such fiscal quarter.
4. Amendment Fee. The Borrower agrees to pay an amendment fee for the Pro
Rata account of each Lender in an aggregate amount equal to $139,750. The Pro
Rata portion of such fee due to State Street Bank and Trust Company shall be
paid directly to State Street Bank and Trust Company on the date hereof. The
remaining portion of such fee shall be paid to the Agent for the Pro Rata
accounts of the other Lenders on June 1, 1999, provided that if the Loans are
refinanced and the Commitment is terminated on or before June 1, 1999, the
payment of such remaining portion shall be deemed to be waived.
5. Conditions. This Amendment is subject to the provisions of Section 9.5
of the Loan Agreement, and shall become effective, as of the date first above
written, upon the satisfaction of the following conditions precedent:
(a)receipt by the Agent of counterparts of this Amendment
executed by the Borrowers and the Lenders, and counterparts
of the Consent appended hereto executed by the Guarantors;
(b)such other items or documents as may be requested by the
Agent or the Lenders.
6. Miscellaneous. This Amendment shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts. All parts of the
Loan Agreement not affected by this Amendment are hereby ratified and affirmed
in all respects, provided that if any provision of the Loan Agreement shall
conflict or be inconsistent with this Amendment, the terms of this Amendment
shall supersede and prevail. Upon and after the date of this Amendment all
references to the Loan Agreement in that document, or in any Financing Document,
shall mean the Loan Agreement as amended by this Amendment. Except as expressly
provided in this Amendment, the execution and delivery of this Amendment does
not and will not amend, modify or supplement any provision of, or constitute a
consent to or a waiver of any noncompliance with the provisions of the Loan
Agreement, and, except as specifically provided in this Amendment, the Loan
Agreement shall remain in full force and effect.
7. Representations and Warranties. The Borrower hereby represents and
warrants to the Lenders and the Agent that the representations and warranties
set forth in Section 4 of the Loan Agreement are true and correct in all
material respects as of the date hereof. The Borrower hereby agrees to indemnify
and hold the Lenders and the Agent harmless from and against any claim, cost,
damage (including without limitation consequential damages), expense (including
without limitation reasonable attorneys' fees and expenses), loss, liability, or
judgment now or hereafter arising as a result of any claim against the Borrower,
the Lenders and/or the Agent arising out of the transactions contemplated by
this Amendment. The provisions of this Section shall continue in effect and
shall survive (among other events) any termination of this Agreement,
foreclosure, a deed in lieu transaction, payment and satisfaction of the Note
and other obligations of the Borrower hereunder, and release of any collateral
for the Loans.
8. Counterparts. This Amendment may be executed in one or more
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same agreement. Delivery of an executed counterpart of a signature page to this
Amendment by telecopier shall be effective as delivery of a manually executed
counterpart of this Amendment.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the day and year first above written, under seal.
BORROWERS:
GALAXY TELECOM, L.P.
By: Galaxy Telecom, Inc., its
general partner
By:____________________________
Name:
Title:
GALAXY TELECOM CAPITAL CORP.
By:_______________________
Name:
Title:
LENDERS:
FLEET NATIONAL BANK, as Agent and
as a Lender
By:____________________________
Name:
Title:
STATE STREET BANK AND TRUST COMPANY
By:____________________________
Name:
Title:
UNION BANK
By:____________________________
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO
By:____________________________
Name:
Title:
CONSENT
Dated as of March 31, 1999
Each of GALAXY TELECOM , INC., as Guarantor under an Unlimited Guaranty
dated as of December 23, 1994 (as amended, the "General Partner Guaranty"), as
Grantor under a Security Agreement dated as of December 23, 1994, and as
Assignor under a Collateral Assignment of Contracts, Leases, Licenses,
Easements, Permits and Franchises, a Collateral Assignment of Easements, and a
Collateral Assignment and Pledge of Partnership Interest, each dated as of
December 23, 1994 (as amended, collectively, the "General Partner Security
Documents") , and GALAXY TELECOM INVESTMENTS, L.L.C., as Guarantor under an
Unlimited Guaranty dated as of December 23, 1994 (as amended, the "Investments
Guaranty"), as Grantor under a Security Agreement dated as of December 23, 1994,
and as Assignor under a Collateral Assignment and Pledge of Partnership Interest
dated as of December 23, 1994 (as amended, collectively, the "Investments
Security Documents"), hereby consents to the foregoing Amendment No. 6 to the
Loan Agreement, and hereby confirms and agrees that (i) the General Partner
Guaranty and the Investments Guaranty, and each of the General Partner Security
Documents and the Investments Security Documents is, and shall continue to be,
in full force and effect and is hereby ratified and confirmed in all respects
except that, upon the effectiveness of and on and after the date of Amendment
No. 6, each reference in such Guaranty to the Loan Agreement shall mean and be a
reference to the Loan Agreement as amended by Amendment No. 6, and (ii) each of
the General Partner Security Documents and the Investments Security Documents
and all of the collateral described therein do, and shall continue to, secure
the payment of all of the Obligations (as defined therein). LLC agrees to be
bound by and comply with the provisions of Section 3 of Amendment No. 6, to the
extent the same applies to LLC.
GALAXY TELECOM, INC.
By:_______________________________________
Name:
Title:
GALAXY TELECOM INVESTMENTS, L.L.C.
By:_______________________________________
Name:
Title:
