EXHIBIT 10.40.6
FOURTH AMENDMENT TO CREDIT AGREEMENT
THIS FOURTH AMENDMENT TO CREDIT AGREEMENT, dated as of June 26, 2002 (this
"Fourth 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"),
WACHOVIA BANK, NATIONAL ASSOCIATION (successor to 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 Borrowers have requested certain amendments to the Credit
Agreement; and
WHEREAS, the Required Lenders have agreed to such amendments 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 APPLICABLE PERCENTAGE. The tables set forth in the
definition of "Applicable Percentage" in Section 1.1 of the Credit Agreement are
hereby amended and restated in their entirety to read as follows:
STAGE 1 COVENANT PERIOD
-------------------------- ----------------------- ------------------------ -----------------------
LIBOR Rate
Alternate Base Margin for
Rate Margin for Revolving Loans
Revolving Loans Alternate Base and the Term LIBOR Rate
and the Term Rate Margin for Loan A; Letter of Margin for the
Loan A the Term Loan B Credit Fees Term Loan B
-------------------------- ----------------------- ------------------------ -----------------------
3.00% 3.50% 4.00% 4.50%
-------------------------- ----------------------- ------------------------ -----------------------
STAGE 2 COVENANT PERIOD
------------- ------------------------ -------------- -------------- ---------------- ----------------
LIBOR Rate
Alternate Margin
Base Rate for
Margin for Alternate Revolving
Revolving Base Rate Loans and the
Loans and Margin for Term Loan A; LIBOR Rate
Leverage the Term the Term Letter of Margin for the
Level Ratio Loan A Loan B Credit Fees Term Loan B
------------- ------------------------ -------------- -------------- ---------------- ----------------
I greater than 3.00% 3.50% 4.00% 4.50%
12.0 to 1.0
------------- ------------------------ -------------- -------------- ---------------- ----------------
II less than or equal to 2.75% 3.50% 3.75% 4.50%
12.0 to 1.0 but
greater than or equal to
10.0 to 1.0
------------- ------------------------ -------------- -------------- ---------------- ----------------
III less than 2.50% 3.50% 3.50% 4.50%
10.0 to 1.0 but
greater than or equal to
8.0 to 1.0
------------- ------------------------ -------------- -------------- ---------------- ----------------
IV less than 2.25% 3.50% 3.25% 4.50%
8.0 to 1.0 but
greater than or equal to
7.0 to 1.0
------------- ------------------------ -------------- -------------- ---------------- ----------------
V less than 2.00% 3.50% 3.00% 4.50%
7.0 to 1.0 but
greater than or equal to
6.0 to 1.0
------------- ------------------------ -------------- -------------- ---------------- ----------------
VI less than 1.75% 3.50% 2.75% 4.50%
6.0 to 1.0 but
greater than or equal to
5.0 to 1.0
------------- ------------------------ -------------- -------------- ---------------- ----------------
VII less than 5.0 to 1.0 1.50% 3.50% 2.50% 4.50%
------------- ------------------------ -------------- -------------- ---------------- ----------------
1.2 DEFINITION OF CONSOLIDATED EBITDA. The definition of "Consolidated
EBITDA" in Section 1.1 of the Credit Agreement is hereby amended and restated in
its entirety to read as follows:
"Consolidated EBITDA" shall mean, for any period, Consolidated Net
Income plus, to the extent the following items are deducted in calculating
Consolidated Net Income, the sum of the following (without duplication):
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(a) Consolidated Interest Expense, plus (b) all provisions for any Federal,
state, local and foreign income, franchise, withholding, value added and
similar taxes for such period, plus (c) depreciation, amortization and
other non-cash charges for such period, plus (d) extraordinary losses for
such period as approved by the Administrative Agent, minus (e)
extraordinary gains and interest income for such period, of any Person and
its Subsidiaries on a Consolidated basis.
1.3 DEFINITION OF FIRST UNION. All references to "First Union" and "First
Union National Bank" in the Credit Documents shall hereafter refer to "Wachovia"
and "Wachovia Bank, National Association (successor to First Union National
Bank)", respectively. The definition of "First Union" in Section 1.1 of the
Credit Agreement is hereby amended and restated in its entirety to read as
follows:
"Wachovia" shall mean Wachovia Bank, National Association (successor
to First Union National Bank), a national banking association.
1.4 NEW DEFINITIONS. The following new definitions are hereby added to
Section 1.1 of the Credit Agreement to read as follows:
"Annualized Consolidated EBITDA" shall mean: (i) for the fiscal
quarter ending June 30, 2004, the product of Consolidated EBITDA for the
two fiscal quarter period then ending multiplied by 2 and (ii) for the
fiscal quarter ending September 30, 2004, the product of Consolidated
EBITDA for the three fiscal quarter period then ending multiplied by 1 1/3.
"Annualized Consolidated Interest Expense" shall mean: (i) for the
fiscal quarter ending June 30, 2004, the product of Consolidated Interest
Expense for the two fiscal quarter period then ending multiplied by 2 and
(ii) for the fiscal quarter ending September 30, 2004, the product of
Consolidated Interest Expense for the three fiscal quarter period then
ending multiplied by 1 1/3.
"Available Cash" shall mean, as of any date of determination, the sum
of (a) the unused Revolving Commitments on such date plus (b) all amounts
that, in conformity with GAAP, would be included on a Consolidated balance
sheet of the Credit Parties as cash or Cash Equivalents (other than
Restricted Cash) on such date.
"Excess Cash" shall have the meaning set forth in Section 3.3(b)(vii).
"Exempt Accounts" shall have the meaning set forth in Section 7.18(a).
"Fourth Amendment Effective Date" shall mean June 26, 2002.
"Restricted Cash" shall mean the cash and Cash Equivalents held in the
Interest Escrow Account.
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"Term Loan A Deposit Accounts" shall have the meaning set forth in
Section 7.17.
1.5 SECTION 2.1(A). Section 2.1(a) of the Credit Agreement is hereby
amended and restated in its entirety to read as follows:
SECTION 2.1 REVOLVING LOANS.
(a) Revolving Commitment. During the Commitment Period, subject to the
terms and conditions hereof, each Lender severally agrees to make revolving
credit loans ("Revolving Loans") to the Borrowers from time to time for the
purposes hereinafter set forth; provided, however, that (i) with regard to
each Lender individually, the sum of such Lender's share of outstanding
Revolving Loans plus such Lender's Revolving Commitment Percentage of
Swingline Loans plus such Lender's LOC Commitment Percentage of LOC
Obligations shall not exceed such Lender's Revolving Commitment Percentage
of the aggregate Revolving Committed Amount, (ii) with regard to the
Lenders collectively, the sum of the aggregate amount of outstanding
Revolving Loans plus Swingline Loans plus LOC Obligations shall not exceed
the aggregate Revolving Committed Amount then in effect, (iii) the
Borrowers shall not request, nor shall the Lenders be obligated to provide,
Revolving Loans (A) prior to May 16, 2003 or (B) on or after May 16, 2003
if (x) prior to any Revolving Loan borrowing request the Credit Parties
collectively hold cash and Cash Equivalents (other than Restricted Cash) in
excess of $10,000,000 or (y) after giving effect to any Revolving Loan
borrowing request the Credit Parties collectively hold cash and Cash
Equivalents (other than Restricted Cash) in excess of $20,000,000 or (z)
the Credit Parties have failed to furnish to the Administrative Agent and
the Lenders any financial information or notice required to be furnished
pursuant to Article VI, including without limitation, the most recent
Officer's Compliance Certificate demonstrating compliance with each of the
financial covenants set forth in Article VIII and (iv) after the Fourth
Amendment Effective Date the aggregate amount of Revolving Loans
outstanding shall not exceed the following amounts on or prior to the
following dates:
----------------------------------------- ------------------
Maximum Amount
Date of Revolving Loans
----------------------------------------- ------------------
June 30, 2003 $16,000,000
----------------------------------------- ------------------
September 30, 2003 $26,000,000
----------------------------------------- ------------------
December 31, 2003 $33,000,000
----------------------------------------- ------------------
March 31, 2004 $52,000,000
----------------------------------------- ------------------
For purposes hereof, the aggregate amount available hereunder shall be
NINETY-FIVE MILLION DOLLARS ($95,000,000) (as such aggregate maximum amount
may be reduced from time to time as provided in Section 3.2, the "Revolving
Committed Amount"). Revolving Loans may consist of Alternate Base Rate
Loans or LIBOR Rate Loans, or a combination thereof, as the Borrowers may
request, and may be repaid and reborrowed in accordance with the provisions
hereof.
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************
1.6 SECTION 3.3(B). Section 3.3(b) of the Credit Agreement is hereby
amended and restated in its entirety to read as follows:
SECTION 3.3 PREPAYMENTS.
************
(b) Mandatory Prepayments.
(i) Revolving Committed Amount. If at any time the sum of the
aggregate principal amount of outstanding Revolving Loans plus Swingline
Loans plus LOC Obligations shall exceed the Revolving Committed Amount, the
Borrowers immediately shall prepay the Revolving Loans and (after all
Revolving Loans have been repaid) cash collateralize the LOC Obligations,
in an amount sufficient to eliminate such excess.
(ii) Asset Dispositions. Within ten (10) Business Days following any
Asset Disposition, the Borrowers shall prepay the Loans in an aggregate
amount equal to one hundred percent (100%) of the Net Cash Proceeds derived
from such Asset Disposition (such prepayment to be applied as set forth in
clause (viii) below); provided, however, that such Net Cash Proceeds shall
not be required to be so applied to the extent that the Company delivers to
the Administrative Agent a certificate certifying that the Credit Parties
intend to reinvest such Net Cash Proceeds in replacement assets within 180
days of the receipt of such Net Cash Proceeds and completes such
reinvestment within such 180-day period. Notwithstanding anything to the
contrary contained herein, after the occurrence and during the continuance
of an Event of Default, the Required Lenders shall have the option to
require such Net Cash Proceeds to be applied immediately to prepay the
Loans in accordance with clause (viii) below.
(iii) Debt Issuance. Within ten (10) Business Days following any Debt
Issuance, the Borrowers shall prepay the Loans in an aggregate amount equal
to one hundred percent (100%) of the Net Cash Proceeds derived from such
Debt Issuance (such prepayment to be applied as set forth in clause (viii)
below).
(iv) Equity Issuance. Within ten (10) Business Days following any
Equity Issuance, the Borrowers shall prepay the Loans in an aggregate
amount equal to fifty percent (50%) of the Net Cash Proceeds derived from
such Equity Issuance (such prepayment to be applied as set forth in clause
(viii) below); provided, however, that such Net Cash Proceeds shall not be
required to be so applied to the extent that the Company (A) delivers to
the Administrative Agent a certificate that the Credit Parties intend to
use such Net Cash Proceeds to (x) redeem up to 35% of the outstanding
principal amount of the Permitted Parent Debt and pay any penalties,
premiums or accrued interest with respect thereto, and/or (y) acquire
5
additional telecommunications assets within 18 months of the receipt of
such Net Cash Proceeds, so long as such additional telecommunications
assets are useful in its business in accordance with the provisions of
Section 7.10 and as permitted pursuant to Section 9.4 and (B) uses such Net
Cash Proceeds for the purposes set forth in clause (x) above within a
reasonable period of time and/or for the purposes set forth in clause (y)
above within 18 months of the receipt of such Net Cash Proceeds.
Notwithstanding anything to the contrary contained herein, after the
occurrence and during the continuance of an Event of Default, the Required
Lenders shall have the option to require such Net Cash Proceeds to be
applied immediately to prepay the Loans in accordance with clause (viii)
below.
(v) Recovery Event. Within ten (10) Business Days following the
receipt of insurance proceeds in connection with a Recovery Event, the
Borrowers shall prepay the Loans in an aggregate amount equal to one
hundred percent (100%) of such insurance proceeds (such prepayment to be
applied as set forth in clause (viii) below); provided, however, that such
insurance proceeds shall not be required to be so applied to the extent
that the Company delivers to the Administrative Agent a certificate
certifying that the Credit Parties intend to reinvest such insurance
proceeds in replacement assets within 180 days of the receipt of such
insurance proceeds and completes such reinvestment within such 180-day
period. Notwithstanding anything to the contrary contained herein, after
the occurrence and during the continuance of an Event of Default, the
Required Lenders shall have the option to require such insurance proceeds
to be applied immediately to prepay the Loans in accordance with clause
(viii) below.
(vi) Excess Cash Flow. Within ninety (90) days after the end of each
fiscal year (commencing with the fiscal year ending December 31, 2003), the
Borrowers shall prepay the Loans in an amount equal to fifty percent (50%)
of the Excess Cash Flow earned during such prior fiscal year. Any payments
of Excess Cash Flow shall be applied as set forth in clause (viii) below.
(vii) Excess Cash and Cash Equivalents. On the next Business Day
following any period of five consecutive Business Days in which the Credit
Parties collectively hold cash and Cash Equivalents (other than Restricted
Cash) in excess of $20,000,000 (the "Excess Cash"), the Borrowers shall
prepay the Revolving Loans by an amount equal to such Excess Cash (such
prepayment to be applied as set forth in clause (viii) below).
(viii) Application of Mandatory Prepayments. All amounts required to
be paid pursuant to this Section 3.3(b) shall be applied as follows: (A)
with respect to all amounts prepaid pursuant to Section 3.3(b)(i) and
Section 3.3(b)(vii), to Revolving Loans and (after all Revolving Loans have
been repaid) to a cash collateral account (held by the Administrative Agent
for the ratable benefit of the Lenders) in respect of LOC Obligations and
6
(B) with respect to all amounts prepaid pursuant to Sections
3.3(b)(ii)-(vi), (1) first pro rata to the Term Loan A and the Term Loan B
(ratably to the remaining principal installments thereof); provided that
one or more holders of the Term Loan B may decline to accept a mandatory
prepayment under Section 3.3(b)(ii) - (vi) to the extent there is a
sufficient portion of the Term Loan A outstanding to be paid with such
prepayment, in which case such declined prepayments shall be allocated, on
a pro rata basis, to the holders of the Term Loan A and the holders of the
Term Loan B accepting such prepayments, and (2) second pro rata to the
Revolving Loans and (after all Revolving Loans have been repaid) to a cash
collateral account in respect of LOC Obligations. Within the parameters of
the applications set forth above, prepayments shall be applied first to
Alternate Base Rate Loans and then to LIBOR Rate Loans in direct order of
Interest Period maturities. All prepayments under this Section 3.3(b) shall
be subject to Section 3.13 and be accompanied by interest on the principal
amount prepaid to the date of prepayment. Amounts prepaid on Swingline
Loans and Revolving Loans may be reborrowed in accordance with the terms
hereof. Amounts prepaid on the Term Loans may not be reborrowed.
1.7 SECTION 3.5(B). Section 3.5(b) of the Credit Agreement is hereby
amended and restated in its entirety to read as follows:
SECTION 3.5 INTEREST; INTEREST PAYMENT DATES.
***********
(b) Upon the occurrence, and during the continuance of an Event of
Default, the principal of and, to the extent permitted by law, interest on
(i) LIBOR Rate Loans shall bear interest, payable on demand, at a per annum
rate equal to the LIBOR Rate plus the highest Applicable Percentage for
LIBOR Rate Loans (e.g., during the Stage 2 Covenant Period, Level I pricing
in the definition of Applicable Percentage) plus 4% until the end of the
applicable Interest Period and thereafter at a per annum rate equal to the
Alternate Base Rate plus the highest Applicable Percentage for Alternate
Base Rate Loans (e.g., during the Stage 2 Covenant Period, Level I pricing
in the definition of Applicable Percentage) plus 4% and (ii) Alternate Base
Rate Loans, fees and other amounts due and payable hereunder and under the
other Credit Documents shall bear interest, payable on demand, at a per
annum rate equal to the Alternate Base Rate plus the highest Applicable
Percentage for Alternate Base Rate Loans (e.g., during the Stage 2 Covenant
Period, Level I pricing in the definition of Applicable Percentage) plus
4%.
***********
1.8 NEW SECTION 6.1(E). A new Section 6.1(e) is hereby added to the Credit
Agreement to read as follows:
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SECTION 6.1 FINANCIAL STATEMENTS AND PROJECTIONS.
**********
(e) Monthly Financial Statements. As soon as practicable and in any
event within thirty (30) days after the end of each fiscal month of each
Fiscal Year, an unaudited Consolidated and consolidating balance sheet of
the Parent and its Subsidiaries and the Company and its Subsidiaries as of
the close of such fiscal month and unaudited Consolidated and consolidating
statements of income, retained earnings and cash flows for the fiscal month
then ended and that portion of the Fiscal Year then ended, all in
reasonable detail setting forth in comparative form the corresponding
figures for the preceding Fiscal Year and the corresponding figures from
the annual budget for such month and prepared by the Parent or the Company,
as applicable, in accordance with GAAP and certified by a Responsible
Officer to present fairly in all material respects the financial condition
of the Parent and its Subsidiaries or the Company and its Subsidiaries, as
applicable, as of their respective dates and the results of operations of
the Parent and its Subsidiaries or the Company and its Subsidiaries, as
applicable, for the respective periods then ended.
1.9 NEW SECTION 7.17. A new Section 7.17 is hereby added to the Credit
Agreement to read as follows:
SECTION 7.17 TERM LOAN A DEPOSIT ACCOUNTS.
(a) Prior to or on the Fourth Amendment Effective Date, the Borrowers
and the Parent shall collectively have on deposit in account numbers
CP-36484-16 and CP-36293 with UBS PaineWebber, Inc. or other accounts
approved by the Administrative Agent (the "Term Loan A Deposit Accounts")
an amount not less than $105,000,000 in the aggregate. At any time after
the Fourth Amendment Effective Date, the Borrowers and the Parent shall
promptly provide (but in any event within twenty-four (24) hours of receipt
of any request) the Administrative Agent with such reports, documentation
and other information requested thereby to the extent deemed necessary by
the Administrative Agent to verify and/or monitor the Term Loan A Deposit
Accounts.
(b) The Borrowers and the Parent shall maintain the following required
aggregate balances in the Term Loan A Deposit Accounts during the periods
corresponding thereto in the table below. If the Borrowers have not
delivered to the Administrative Agent and the Lenders the most recent
quarterly financial statements required pursuant to Section 6.1(a) and the
corresponding Officer's Compliance Certificate demonstrating compliance
with the financial covenants set forth in Article VIII on or prior to the
last day of each period indicated in the table below, the required
aggregate balance corresponding to such period shall remain in effect after
the end of such period until such time as the Borrowers have delivered to
the Administrative Agent and the Lenders such quarterly financial
statements and such Officer's Compliance Certificate, at which time the
8
required aggregate balance in the Term Loan A Deposit Accounts shall be the
required aggregate balance corresponding to the next period (if any) set
forth in the table below.
------------------------------------------------------------------- --------------------------
REQUIRED AGGREGATE
PERIOD BALANCE
------------------------------------------------------------------- --------------------------
From the Fourth Amendment Effective Date
through June 30, 2002 $105,000,000
------------------------------------------------------------------- --------------------------
From July 1, 2002 through August 15, 2002 $88,000,000
------------------------------------------------------------------- --------------------------
From August 16, 2002 through September 30, 2002 $71,000,000
------------------------------------------------------------------- --------------------------
From October 1, 2002 through November 15, 2002 $63,000,000
------------------------------------------------------------------- --------------------------
From November 16, 2002 through December 31, 2002 $55,000,000
------------------------------------------------------------------- --------------------------
From January 1, 2003 through February 15, 2003 $33,000,000
------------------------------------------------------------------- --------------------------
From February 16, 2003 through March 31, 2003 $11,000,000
------------------------------------------------------------------- --------------------------
From April 1, 2003 through May 15, 2003 $5,500,000
------------------------------------------------------------------- --------------------------
1.10 NEW SECTION 7.18. A new Section 7.18 is hereby added to the Credit
Agreement to read as follows:
SECTION 7.18 DEPOSIT AND SECURITIES ACCOUNTS.
(a) At all times after May 15, 2003 to the extent any Revolving Loan
has been made under Section 2.1, the Borrowers shall maintain (i) each of
their deposit accounts with the Administrative Agent and (ii) each of their
securities accounts with any Lender that has entered into an account
control agreement in form and substance satisfactory to the Administrative
Agent, in each case except for those accounts used by the Borrowers for
routine functions such as disbursements in the ordinary course of business
(the "Exempt Accounts").
(b) At all times after May 15, 2003 the aggregate balance in all of
the Exempt Accounts shall not exceed $10,000,000.
1.11 STAGE 1 FINANCIAL COVENANTS. Sections 8.1(d) and (e) of the Credit
Agreement are hereby amended and restated in their entirety to read as follows
and a new Section 8.1(h) is hereby added to the Credit Agreement to read as
follows:
SECTION 8.1 STAGE 1 COVENANTS.
Until all of the Credit Party Obligations (other than inchoate
indemnity Credit Party Obligations) have been paid and satisfied in full
and the Credit Facilities have been terminated, unless consent has been
obtained in the manner set forth in Section 12.11 hereof, during the Stage
1 Covenant Period the Credit Parties will not:
***********
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(d) EBITDA. As of the last day of each fiscal quarter occurring during
the Stage 1 Covenant Period, permit the Consolidated EBITDA for the
Borrowers on a combined basis for such fiscal quarter to be less than the
required Consolidated EBITDA amount set forth below opposite such date;
provided that only for purposes of determining compliance with this Section
8.1(d) for any fiscal quarter during the Stage 1 Covenant Period ending
after July 1, 2002, Consolidated EBITDA for such fiscal quarter shall be
increased by an amount (such amount not to exceed $3,000,000) equal to the
excess, if any, by which Consolidated EBITDA for either or both of the
immediately preceding two fiscal quarters exceeded the benchmark
Consolidated EBITDA for such fiscal quarters as set forth in the table
below (but only to the extent such excess has not been used to increase the
Consolidated EBITDA for any other fiscal quarter):
------------------------------ -------------------------- -------------------------
Required Consolidated Benchmark Consolidated
Fiscal Quarter Ended EBITDA Amount EBITDA Amount
------------------------------ -------------------------- -------------------------
September 30, 2000 ($13,000,000) N/A
------------------------------ -------------------------- -------------------------
December 31, 2000 ($20,000,000) N/A
------------------------------ -------------------------- -------------------------
March 31, 2001 ($13,250,000) N/A
------------------------------ -------------------------- -------------------------
June 30, 2001 ($19,631,000) N/A
------------------------------ -------------------------- -------------------------
September 30, 2001 ($25,135,000) N/A
------------------------------ -------------------------- -------------------------
December 31, 2001 ($36,105,000) N/A
------------------------------ -------------------------- -------------------------
March 31, 2002 ($16,600,000) N/A
------------------------------ -------------------------- -------------------------
June 30, 2002 ($17,900,000) ($14,900,000)
------------------------------ -------------------------- -------------------------
September 30, 2002 ($21,400,000) ($18,400,000)
------------------------------ -------------------------- -------------------------
December 31, 2002 ($22,600,000) ($19,600,000)
------------------------------ -------------------------- -------------------------
March 31, 2003 ($9,200,000) ($6,200,000)
------------------------------ -------------------------- -------------------------
June 30, 2003 ($7,200,000) ($4,200,000)
------------------------------ -------------------------- -------------------------
September 30, 2003 ($8,300,000) ($5,300,000)
------------------------------ -------------------------- -------------------------
December 31, 2003 ($11,300,000) ($8,300,000)
------------------------------ -------------------------- -------------------------
March 31, 2004 $8,600,000 $12,600,000
------------------------------ -------------------------- -------------------------
(e) Minimum Total Revenues. As of the last day of each fiscal quarter
occurring during the Stage 1 Covenant Period, permit Total Revenues to be
equal to or less than the amount set forth below opposite such date:
---------------------------- --------------------------
Fiscal Quarter Ended Amount
---------------------------- --------------------------
September 30, 2000 $4,311,000
---------------------------- --------------------------
December 31, 2000 $6,416,000
---------------------------- --------------------------
March 31, 2001 $8,500,000
---------------------------- --------------------------
June 30, 2001 $12,900,000
---------------------------- --------------------------
September 30, 2001 $16,000,000
---------------------------- --------------------------
December 31, 2001 $20,300,000
---------------------------- --------------------------
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---------------------------- --------------------------
March 31, 2002 $40,000,000
---------------------------- --------------------------
June 30, 2002 $41,600,000
---------------------------- --------------------------
September 30, 2002 $46,000,000
---------------------------- --------------------------
December 31, 2002 $53,800,000
---------------------------- --------------------------
March 31, 2003 $57,000,000
---------------------------- --------------------------
June 30, 2003 $60,800,000
---------------------------- --------------------------
September 30, 2003 $66,500,000
---------------------------- --------------------------
December 31, 2003 $76,100,000
---------------------------- --------------------------
March 31, 2004 $79,300,000
---------------------------- --------------------------
************
(h) Minimum Available Cash. At all times during the Stage 1 Covenant
Period, permit Available Cash to be less than the amount set forth below
opposite such date:
---------------------------- --------------------------
Fiscal Quarter Ended Amount
---------------------------- --------------------------
June 30, 2002 $203,000,000
---------------------------- --------------------------
September 30, 2002 $168,000,000
---------------------------- --------------------------
December 31, 2002 $152,000,000
---------------------------- --------------------------
March 31, 2003 $108,000,000
---------------------------- --------------------------
June 30, 2003 $97,000,000
---------------------------- --------------------------
September 30, 2003 $87,000,000
---------------------------- --------------------------
December 31, 2003 $80,000,000
---------------------------- --------------------------
March 31, 2004 $61,000,000
---------------------------- --------------------------
1.12 STAGE 2 FINANCIAL COVENANTS. Sections 8.2(a), (b) and (c) of the
Credit Agreement are hereby amended and restated in their entirety to read as
follows:
(a) Leverage Ratio: (i) As of the end of the fiscal quarters ending
June 30, 2004 and September 30, 2004, permit the ratio of (A) Total Debt of
the Credit Parties and their Subsidiaries to (B) Annualized Consolidated
EBITDA of the Credit Parties and their Subsidiaries to exceed the
corresponding ratio set forth below and (ii) after September 30, 2004, as
of any fiscal quarter end during the applicable period set forth below,
permit the ratio of (A) Total Debt of the Credit Parties and their
Subsidiaries to (B) Consolidated EBITDA of the Credit Parties and their
Subsidiaries for the period of four (4) consecutive fiscal quarters ending
on or immediately prior to such date to exceed the corresponding ratio set
forth below (the ratio set forth in clauses (i) and (ii) above collectively
referred to herein as the "Leverage Ratio"):
-------------------------------------- ----------------------
Period Ratio
-------------------------------------- ----------------------
June 30, 2004 through 14.50 to 1.0
December 31, 2004
-------------------------------------- ----------------------
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-------------------------------------- ----------------------
March 31, 2005 13.50 to 1.0
-------------------------------------- ----------------------
June 30, 2005 through 9.00 to 1.0
September 30, 2005
-------------------------------------- ----------------------
December 31, 2005 through 6.25 to 1.0
March 31, 2006
-------------------------------------- ----------------------
June 30, 2006 through 5.25 to 1.0
September 30, 2006
-------------------------------------- ----------------------
December 31, 2006 through 4.25 to 1.0
March 31, 2007
-------------------------------------- ----------------------
June 30, 2007 and thereafter 3.50 to 1.0
-------------------------------------- ----------------------
(b) Senior Leverage Ratio: (i) As of the end of the fiscal quarters
ending June 30, 2004 and September 30, 2004, permit the ratio of (A) Senior
Debt to (B) Annualized Consolidated EBITDA of the Borrowers and their
Subsidiaries to exceed the corresponding ratio set forth below and (ii)
after September 30, 2004, as of any fiscal quarter end during the
applicable period set forth below, permit the ratio of (A) Senior Debt to
(B) Consolidated EBITDA of the Borrowers and their Subsidiaries for the
period of four (4) consecutive fiscal quarters ending on or immediately
prior to such date to exceed the corresponding ratio set forth below:
-------------------------------------- ----------------------
Period Ratio
-------------------------------------- ----------------------
June 30, 2004 through 3.75 to 1.0
March 31, 2005
-------------------------------------- ----------------------
June 30, 2005 through 3.00 to 1.0
September 30, 2005
-------------------------------------- ----------------------
December 31, 2005 through 2.50 to 1.0
March 31, 2006
-------------------------------------- ----------------------
June 30, 2006 and thereafter 2.00 to 1.0
-------------------------------------- ----------------------
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(c) Interest Coverage Ratio: (i) As of the end of the fiscal quarters
ending June 30, 2004 and September 30, 2004, permit the ratio of (A)
Annualized Consolidated EBITDA of the Credit Parties and their Subsidiaries
to (B) Annualized Consolidated Interest Expense of the Credit Parties and
their Subsidiaries to be less than the corresponding ratio set forth below
and (ii) after September 30, 2004, as of any fiscal quarter end during the
applicable period set forth below, permit the ratio of (A) Consolidated
EBITDA of the Credit Parties and their Subsidiaries for the period of four
(4) consecutive fiscal quarters ending on or immediately prior to such date
to (B) Consolidated Interest Expense of the Credit Parties and their
Subsidiaries for the period of four (4) consecutive fiscal quarters ending
on or immediately prior to such date to be less than the corresponding
ratio set forth below:
-------------------------------------- ----------------------
Period Ratio
-------------------------------------- ----------------------
June 30, 2004 through 1.00 to 1.0
December 31, 2004
-------------------------------------- ----------------------
March 31, 2005 1.25 to 1.0
-------------------------------------- ----------------------
June 30, 2005 through 1.50 to 1.0
March 31, 2006
-------------------------------------- ----------------------
June 30, 2006 through 1.75 to 1.0
March 31, 2007
-------------------------------------- ----------------------
June 30, 2007 through 2.25 to 1.0
March 31, 2008
-------------------------------------- ----------------------
June 30, 2008 and thereafter 2.75 to 1.0
-------------------------------------- ----------------------
************
1.13 SCHEDULE 2.1(B)(I). Schedule 2.1(b)(i) to the Credit Agreement is
hereby amended and replaced in its entirety by the Schedule 2.1(b)(i) attached
hereto.
SECTION 2
CLOSING CONDITIONS
2.1 CLOSING CONDITIONS.
This Fourth Amendment shall be effective on the Fourth Amendment Effective
Date upon satisfaction of the following conditions (in form and substance
reasonably acceptable to the Administrative Agent):
(a) Fourth Amendment. Receipt by the Administrative Agent of a copy of
this Fourth 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 Fourth Amendment, the transactions contemplated
13
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) Incumbency Certificate. Receipt by the Administrative Agent of an
incumbency certificate with respect to each of the Credit Parties.
(d) Fees. (i) Receipt by the Administrative Agent, (A) on behalf of
each Lender that executes this Fourth Amendment by 12:00 p.m. EDT on June
27, 2002, of an amendment fee equal 0.75% of such Lender's aggregate
Commitments and (B) on behalf of each Lender that executes this Fourth
Amendment after 12:00 p.m. EDT on June 27, 2002 and before 5:00 p.m. EDT on
June 27, 2002, of an amendment fee equal to 0.625% of such Lender's
aggregate Commitments and (ii) receipt by Wachovia of all fees due and
payable pursuant to that certain fee letter, dated as of May 31, 2002,
among the Borrowers and Wachovia.
(e) Term Loan A Deposit Accounts. The Borrowers and the Parent shall
have deposited not less than $105,000,000 into the Term Loan A Deposit
Accounts.
(f) Legal Opinion. Receipt by the Administrative Agent of an opinion
from counsel to the Credit Parties relating to this Fourth Amendment and
the transactions contemplated herein and therein, in form and substance
satisfactory to the Administrative Agent, addressed to the Administrative
Agent and the Lenders and dated as of the Fourth Amendment Effective Date.
(g) 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 Fourth Amendment,
including, without limitation, the fees and expenses of Xxxxx & Xxx Xxxxx,
PLLC.
SECTION 3
MISCELLANEOUS
3.1 AMENDED TERMS. The term "Credit Agreement" as used in each of the
Credit Documents shall hereafter mean the Credit Agreement as amended by this
Fourth 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.
14
3.2 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 Fourth Amendment.
(b) This Fourth 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 Fourth Amendment.
(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).
3.3 ACKNOWLEDGMENT OF GUARANTORS. The Guarantors acknowledge and consent to
all of the terms and conditions of this Fourth Amendment and agree that this
Fourth Amendment and all documents executed in connection herewith do not
operate to reduce or discharge the Guarantors' obligations under the Credit
Documents.
3.4 CREDIT DOCUMENT. This Fourth Amendment shall constitute a Credit
Document under the terms of the Credit Agreement.
3.5 ENTIRETY. This Fourth 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.
3.6 COUNTERPARTS; TELECOPY. This Fourth 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 Fourth Amendment by telecopy shall
be effective as an original and shall constitute a representation that an
original will be delivered.
3.7 GENERAL RELEASE. In consideration of the Required Lenders entering into
this Fourth 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
15
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.
3.8 GOVERNING LAW. THIS FOURTH AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES UNDER THIS FOURTH AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NORTH CAROLINA.
3.9 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]
16
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this Fourth Amendment to be duly executed and delivered as of the date first
above written.
BORROWERS: HORIZON PERSONAL COMMUNICATIONS, INC.
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxx X. Xxxxxxx
--------------------------------
Title: CFO
--------------------------------
BRIGHT PERSONAL COMMUNICATIONS SERVICES, LLC
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxx X. Xxxxxxx
--------------------------------
Title: CFO
--------------------------------
GUARANTORS: HORIZON PCS, INC.
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxx X. Xxxxxxx
--------------------------------
Title: CFO
--------------------------------
ADMINISTRATIVE AGENT/LENDERS: WACHOVIA BANK, NATIONAL ASSOCIATION
(successor to First Union National Bank),
as Administrative Agent and as a Lender
By: /s/ Xxxx X. Xxxxxx
----------------------------------------
Name: Xxxx X. Xxxxxx
--------------------------------
Title: Vice President
--------------------------------
LENDERS (CONTINUED): WESTDEUTSCHE LANDESBANK GIROZENTRALE,
NEW YORK BRANCH, as Syndication Agent and
Arranger and as a Lender
By: /s/ Xxxxx Derveldy
----------------------------------------
Name: Xxxxx Derveldy
--------------------------------
Title: Associate Director
--------------------------------
By: /s/ Xxxxx Xxxxxxxxx
----------------------------------------
Name: Xxxxx Xxxxxxxxx
--------------------------------
Title: Director
--------------------------------
LENDERS (CONTINUED): FORTIS CAPITAL CORP.,
as Documentation Agent and as a Lender
By: /s/ Xxxx X. XxXxxxxxx
----------------------------------------
Name: Xxxx X. XxXxxxxxx
--------------------------------
Title: Managing Director
--------------------------------
By: /s/ X. Xxxxxx
----------------------------------------
Name: X. Xxxxxx
--------------------------------
Title: Managing Director
--------------------------------
LENDERS (CONTINUED): COBANK, ACB
By: /s/ Xxxx Xxxxxxx
----------------------------------------
Name: Xxxx Xxxxxxx
--------------------------------
Title: Vice President
--------------------------------
LENDERS (CONTINUED): MOTOROLA CREDIT CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx, III
----------------------------------------
Name: Xxxxxx X. Xxxxxxx, III
--------------------------------
Title: V.P. and Director
--------------------------------
LENDERS (CONTINUED): NATIONAL CITY BANK
By: /s/ Xxxxx Xxxxxxxx
----------------------------------------
Name: Xxxxx Xxxxxxxx
--------------------------------
Title: Senior Vice President
--------------------------------
LENDERS (CONTINUED): BANK OF TOKYO-MITSUBISHI TRUST COMPANY
By:
----------------------------------------
Name:
--------------------------------
Title:
--------------------------------
LENDERS (CONTINUED): CIT LENDING SERVICES CORPORATION
By: /s/ Xxxx Tarnburro
----------------------------------------
Name: Xxxx Tarnburro
--------------------------------
Title: Vice President
--------------------------------
LENDERS (CONTINUED): IBM CREDIT CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxx
--------------------------------
Title: Manager of Credit
--------------------------------
Schedule 2.1(b)(i)
FORM OF NOTICE OF BORROWING
[Date]
First Union National Bank, as Administrative Agent
000 Xxxxx Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Syndication Agency Services
Ladies and Gentlemen:
Pursuant to subsection [2.1(b)][2.2][2.4(c)] of the Credit Agreement (as
amended, restated, supplemented or otherwise modified from time to time, the
"Credit Agreement") dated as ________ among Horizon Personal Communications,
Inc., an Ohio corporation (the "Company"), Bright Personal Communications
Services, LLC, an Ohio limited liability company ("Bright") (individually, each
of the Company and Bright, a "Borrower" and collectively, the "Borrowers") the
other Credit Parties identified therein, the several banks and other financial
institutions from time to time parties thereto and First Union National Bank, as
Administrative Agent, the Company hereby requests that the following Loans be
made on [date] as follows (the "Proposed Borrowing"):
I. Revolving Loans requested:
(1) Total Amount of Revolving Loans $ ----------------
(2) Amount of (1) to be allocated
to LIBOR Rate Loans $ ----------------
(3) Amount of (1) to be allocated
to Alternate Base Rate Loans. $ ----------------
(4) Interest Periods and amounts to be allocated
thereto in respect of the LIBOR Rate Loans
referenced in (2) (amounts must total (2)):
(i) one month. $ ----------------
(ii) two months $ ----------------
(iii) three months $ ----------------
(iv) six months $ ----------------
Total LIBOR Rate Loans $ ================
NOTE: BORROWINGS MUST BE IN MINIMUM AMOUNTS OF (A) WITH RESPECT TO LIBOR RATE
LOANS $2,000,000 AND $500,000 INCREMENTS IN EXCESS THEREOF AND (B) WITH
RESPECT TO ALTERNATE BASE RATE LOANS, $500,000 AND $250,000 INCREMENTS IN
EXCESS THEREOF.
II. Swingline Loans requested:
(1) Total Amount of Loans --------------------------
NOTE: SWINGLINE LOAN BORROWINGS MUST BE IN MINIMUM AMOUNTS OF $250,000 AND IN
INTEGRAL AMOUNTS OF $50,000 IN EXCESS THEREOF.
III. Portion of Term Loan A requested:
(1) Total Amount of Term Loan A requested $ ----------------
(2) Amount of (1) to be allocated
to LIBOR Rate Loans $ ----------------
(3) Amount of (1) to be allocated
to Alternate Base Rate Loans. $ ----------------
(4) Interest Periods and amounts to be allocated
thereto in respect of the LIBOR Rate Loans
referenced in (2) (amounts must total (2)):
(i) one month. $ ----------------
(ii) two months $ ----------------
(iii) three months $ ----------------
(iv) six months $ ----------------
Total LIBOR Rate Loans $ ================
NOTE: BORROWINGS MUST BE IN MINIMUM AMOUNT OF $5,000,000. AND $5,000,000
INCREMENTS IN EXCESS THEREOF.
Terms defined in the Credit Agreement shall have the same meanings when
used herein.
The undersigned hereby certifies that the following statements are true on
the date hereof and will be true on the date of the Proposed Borrowing:
(A) the representations and warranties made by the Credit Parties in
the Credit Agreement and in the other Credit Documents are and will be true
and correct in all material respects, both before and after giving effect
to the Proposed Borrowing and to the application of the proceeds thereof,
with the same effect as though such representations and warranties had been
made on and as of the date of such Proposed Borrowing (it being understood
that any representation or warranty which by its terms is made as of a
specified date shall be required to be true and correct in all material
respects only as of such specified date);
(B) no Default or Event of Default has occurred and is continuing, or
would result from such Proposed Borrowing or from the application of the
proceeds thereof;
(C) prior to giving effect to such Proposed Borrowing the Credit
Parties do not collectively hold cash and Cash Equivalents (other than
Restricted Cash) in excess of $10,000,000;
(D) after giving effect to such Proposed Borrowing the Credit Parties
will not collectively hold cash and Cash Equivalents (other than Restricted
Cash) in excess of $20,000,000;
(E) the Credit Parties have furnished to the Administrative Agent and
the Lenders all financial information and notices required to be furnished
pursuant to Article VI of the Credit Agreement, including without
limitation, the most recent Officer's Compliance Certificate demonstrating
compliance with each of the financial covenants set forth in Article VIII
of the Credit Agreement; and
(F) after giving effect to such Proposed Borrowing the aggregate
amount of Revolving Loans outstanding will not exceed the maximum amount
permitted under Section 2.1(a).
Very truly yours,
HORIZON PERSONAL COMMUNICATIONS, INC.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
1487449v1
