<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-Q
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTER ENDED MARCH 31, 1999.
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
COMMISSION FILE NUMBERS: 333-57715 and 333-57715-01 through 06
TRITON PCS, INC.
TRITON PCS OPERATING COMPANY L.L.C.*
TRITON PCS LICENSE COMPANY L.L.C.*
TRITON PCS EQUIPMENT COMPANY L.L.C.*
TRITON PCS PROPERTY COMPANY L.L.C.*
TRITON PCS HOLDINGS COMPANY L.L.C.*
TRITON MANAGEMENT COMPANY, INC.*
375 TECHNOLOGY DRIVE
MALVERN, PA 19355
(610) 651-5900
DELAWARE 23-2930873
(State or other Jurisdiction (I.R.S. Employer Identification
Of Incorporation or Organization) Number)
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: None
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: None
Indicate by a check mark whether the registrant (1) has filed all reports
required to be filed by section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.
Yes |X| No |_|
*The registrants meet the conditions set forth in General Instruction H(i)(a)
and (b) to the Form 10-Q and are therefore filing with the reduced disclosure
format.
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TRITON PCS, INC.
FIRST QUARTER REPORT
Table of Contents
PART I Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets at March 31, 1999 (unaudited) and
December 31, 1998
Consolidated Statements of Operations (unaudited) for the three
months ended March 31, 1999 and 1998
Consolidated Statements of Cash Flows (unaudited) for the three
months ended March 31, 1999 and 1998
Notes to the Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
PART II Other Information
Item 6. Exhibits and Reports on Form 8-K
Signatures
<PAGE>
PART I. Financial Information
Item I. Financial Statements (unaudited)
TRITON PCS, INC.
CONSOLIDATED BALANCE SHEETS
($000's)
December 31, March 31,
1998 1999
(unaudited)
ASSETS:
Current assets:
Cash and cash equivalents $ 146,172 $ 100,152
Marketable securities 23,612 53,087
Due from related party 951 1,427
Accounts receivable net of allowance for doubtful
accounts of $1,071 and $555 respectively 3,102 7,638
Inventory 1,433 6,739
Prepaid expenses and other current assets 4,369 5,425
--------- ---------
Total current assets 179,639 174,468
Property, plant, and equipment:
Land 313 313
Network infrastructure and equipment 34,147 170,558
Office furniture and equipment 17,642 26,769
Capital lease asset 2,263 2,263
Construction in progress 145,667 31,734
--------- ---------
200,032 231,637
Less accumulated depreciation (1,079) (3,396)
--------- ---------
Net property and equipment 198,953 228,241
Intangible assets, net 307,361 304,120
Deferred transaction costs 906 1,074
Other non current assets -- 2,000
--------- ---------
Total assets $ 686,859 $ 709,903
========= =========
LIABILITIES AND SHAREHOLDER'S EQUITY:
Current liabilities:
Accounts payable $ 25,256 $ 33,553
Accrued payroll and related expenses 3,719 3,197
Accrued expenses 3,646 1,184
Accrued interest 545 933
Capital lease obligations 281 280
--------- ---------
Total current liabilities 33,447 39,147
Long-term debt 463,648 472,488
Capital lease obligations 2,041 1,997
Deferred income taxes 11,744 11,744
Shareholder's Equity:
Common stock, $.01 par value, 1,000 shares
authorized, 100 shares issued and outstanding -- --
Additional paid-in capital 211,560 248,604
Accumulated deficit (35,581) (64,077)
--------- ---------
Total shareholder's equity 175,979 184,527
--------- ---------
Total liabilities and shareholder's equity $ 686,859 $ 709,903
========= =========
See accompanying notes to consolidated financial statements.
<PAGE>
TRITON PCS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
($000's)
Three Months
Ended
March 31,
1998 1999
(unaudited) (unaudited)
Revenues:
Service revenues $ -- $ 9,315
Equipment revenues -- 2,225
-------- --------
Total revenue -- 11,540
Expenses:
Cost of service -- 5,402
Cost of equipment -- 3,604
Operations 592 3,478
Selling and marketing -- 6,659
General and administrative 2,091 6,502
Depreciation and amortization -- 5,511
-------- --------
Loss from operations 2,683 19,616
Interest expense, net of capitalized interest 306 10,000
Interest income -- (1,076)
Other income, net -- (44)
-------- --------
Loss before taxes 2,989 28,496
Tax benefit (2,847) --
-------- --------
Net loss $ 142 $ 28,496
======== ========
See accompanying notes to consolidated financial statements.
<PAGE>
TRITON PCS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
($000's)
Three Months
Ended
March 31,
1998 1999
(unaudited) (unaudited)
Cash flows from operating activities:
Net loss $ (142) $ (28,496)
Adjustments to reconcile net loss to cash
used in operating activities:
Depreciation and amortization 557 5,511
Amortization of bond discount -- 151
Deferred income taxes (2,847) --
Accretion of interest -- 8,691
Change in operating assets and liabilities:
Accounts receivable -- (4,536)
Inventory -- (5,306)
Prepaid expenses and other current assets (17) (1,057)
Other noncurrent assets -- (2,228)
Accounts payable 1,410 (4,651)
Accrued expenses (182) (2,986)
Accrued interest (1,228) 663
--------- ---------
Net cash used in operating activities (2,449) (34,244)
Cash flows from investing activities:
Capital expenditures (3,842) (18,657)
Purchase of marketable securites -- (29,475)
Escrow deposit (8,000) --
--------- ---------
Net cash used in investing activities (11,842) (48,132)
Cash flows from financing activities:
Borrowings under credit facility 67,956 --
Capital contributions from parent 41,255 37,044
Payment of deferred transaction costs (1,855) (168)
Advances to related party, net (45) (475)
Principal payments under capital lease obligations -- (45)
--------- ---------
Net cash provided by financing activities 107,311 36,356
--------- ---------
Net increase (decrease) in cash 93,020 (46,020)
Cash and cash equivalents, beginning of period 11,362 146,172
--------- ---------
Cash and cash equivalents, end of period $ 104,382 $ 100,152
========= =========
See accompanying notes to consolidated financial statements.
<PAGE>
TRITON PCS, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1999
(Unaudited)
(1) Basis of Presentation
The accompanying consolidated financial statements are unaudited and have
been prepared by management. In the opinion of management, these
consolidated financial statements contain all of the adjustments,
consisting of normal recurring adjustments, necessary to present fairly,
in summarized form, the financial position and the results of operations
of the Company. The results of operations for the three months ended March
31, 1999 are not indicative of the results that may be expected for the
year ending December 31, 1999. The financial information presented herein
should be read in conjunction with the combined financial statements for
the year ended December 31, 1998 which include information and disclosures
not included herein.
The consolidated accounts of the Company include Triton PCS, Inc; Triton
PCS Holdings Company L.L.C.; Triton Management Company, Inc.; Triton PCS
Property Company L.L.C., Triton PCS Equipment Company L.L.C.; Triton PCS
Operating Company L.L.C.; Triton PCS License Company L.L.C. ("License
Company"); and Triton PCS Investment Company L.L.C.. All significant
intercompany accounts or balances have been eliminated in consolidation.
(2) Potential Exchange
On March 24, 1998, the Company entered into a non-binding letter of intent
related to certain transactions with AT&T Wireless PCS, Inc. ("AT&T"),
including the potential acquisition of 1.9 million additional net
incremental Pops. The arrangement between the parties has been modified to
only include the exchange by License Company of 512,000 Pops located in
the Hagerstown, MD and Cumberland, MD BTAs for 517,000 Pops of AT&T
located in certain counties in the Savannah, GA and Athens, GA BTAs, all
of which are contiguous to the Company's existing service area. Due to the
difference in value per Pop of the BTAs exchanged, consideration of
approximately $9.7 million, all of which is expected to be represented by
non-cash equity interests in Triton PCS Holdings, Inc. ("Holdings") will
be issued to AT&T. The transaction is subject to execution of a definitive
exchange agreement and closing conditions typical in transactions of the
nature contemplated thereby. The networks relating to the Savannah and
Athens Pops have not been built. However, the Company expects that the
Pops will be included in the current build-out plan developed for the
Company's existing footprint.
(3) Capital Contributions
On February 4, 1998, pursuant to a securities purchase agreement,
Holdings issued $140.0 million of Series C Preferred Stock to certain
institutional investors and management stockholders. The securities
purchase agreement requires the institutional investors and management
stockholders to fund their unconditional and irrevocable obligations in
installments in accordance with the following schedule:
Date Due Amount
($Millions)
Initial closing (funded February 4, 1998) $ 45.0
First anniversary of initial closing (funded February 4, 1999) 35.0
Second anniversary of initial closing 35.0
Third anniversary of initial closing 25.0
------
Total $140.0
======
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TRITON PCS, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1999 and 1998
(unaudited)
The securities purchase agreement provided that the initial cash
contributions and the unfunded commitments to be made to Holdings.
Holdings has directed that all cash contributions subsequent to the
initial cash contribution be made directly to the Company.
As of March 31, 1999, Holdings received $51.4 million of additional equity
contributions, of which $35.0 million related to the acquisition of the
Myrtle Beach System and $16.4 million related to the Norfolk Acquisition.
These funds were concurrently contributed to the Company.
(4) Myrtle Beach Acquisition
On June 30, 1998, the Company acquired an existing cellular system for a
purchase price of approximately $164.5 million from Vangard Cellular
Systems. The following unaudited pro forma information has been prepared
assuming that this acquisition had taken place on January 1, 1998. The pro
forma information includes adjustments to interest expense that would have
been incurred to finance the purchase, additional depreciation based on
the fair market value of the property, plant and equipment acquired, and
the amortization of intangibles arising from the transaction.
<TABLE>
<CAPTION>
For the Three Months Ended March 31,
($000)
1998 1999
<S> <C> <C>
Revenues $ 6,000 11,540
Net Income (loss) $(13,031) $(28,496)
</TABLE>
<PAGE>
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS
When used in this Form 10-Q and in future filings by the Company with the SEC,
in the Company's press releases and in oral statements made with the approval of
an authorized executive officer of the Company, the words or phrases "will
likely result," "management expects" or "the Company expects," "will continue,"
"is anticipated," "estimated" or similar expressions (including confirmations by
an authorized executive officer of the Company or any such expressions made by a
third party with respect to the Company) are intended to identify
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance
on any such forward-looking statements, each of which speaks only as of the date
made. Such statements are subject to certain risks and uncertainties that could
cause actual results to differ materially from historical results and those
presently anticipated or projected. The Company has no obligation to release
publicly the result of any revisions which may be made to any forward-looking
statements to reflect anticipated or unanticipated events or circumstances
occurring after the date of such statements.
GENERAL
The following discussion and analysis is based upon the consolidated financial
statements of the Company for the periods presented herein, and should be read
in conjunction with the combined financial statements as of December 31, 1998
and for the year then ended.
OVERVIEW
The Company intends to become a leading provider of wireless broadband personal
communications services ("PCS") in the southeastern United States. The Company
was established by Michael Kalogris, Steven Skinner and other former executives
of Horizon Cellular Group, along with various equity investors, with the intent
to develop and operate a leading PCS network in the Southeast.
The Company has entered into a joint venture with AT&T Wireless PCS, Inc.
("AT&T"), whereby the Company is positioned as the exclusive provider of
wireless mobility services under the AT&T consumer brand name in the
southeastern United States. The Company is also party to agreements with AT&T
that allow the Company to benefit from AT&T's nationwide wireless footprint, as
well as promotional and marketing efforts, and provide the Company with
favorable roaming and long distance rates for services on AT&T's wireless and
long distance networks.
The Company provides services in a contiguous area covering approximately 13
million Pops in the southeastern United States, including such major population
and business centers as Charleston, SC, Columbia, SC, Greenville/Spartanburg,
SC, Norfolk, VA, Richmond, VA and Augusta, GA, as well as major resort
destinations such as Myrtle Beach, SC, Hilton Head, SC and Kiawah Island, SC.
To date, the Company has incurred expenditures in connection with the
establishment of its business, raising capital, the initial design and
construction of its PCS network, and engineering, marketing, administrative and
other start-up related expenses. The Company launched commercial service in
eight markets serving approximately 5 million Pops during the first quarter of
1999. Upon completion of the initial buildout, the Company intends to target the
remaining cities, connecting highway corridors and counties along the
interstates with population densities of 50 or more per square mile. The Company
expects to extend its coverage to approximately 80% of the Pops in its licensed
area by the end of the fourth quarter of 2002, which the Company believes will
generally provide greater coverage than current cellular operators in such
markets. The extent to which the Company is able to generate operating revenues
and earnings is dependent on a number of business factors, including
construction of the network at or below its estimated costs, successful
deployment of the PCS network and attainment of profitable levels of market
demand for the Company's products and services.
POTENTIAL EXCHANGE
On March 24, 1998, the Company entered into a non-binding letter of intent with
AT&T related to certain transactions, including the potential acquisition of 1.9
million additional net incremental Pops. The arrangement has been modified to
only include the exchange by Triton PCS License Company L.L.C. ("License
Company") of 512,000 Pops located in the Hagerstown, MD and Cumberland, MD BTAs
for 517,000 Pops of AT&T located in certain counties in the Savannah, GA and
Athens, GA BTAs, all of which are contiguous to the Company's existing service
area. Due to
<PAGE>
the difference in value per Pop of the BTAs exchanged, consideration of
approximately $9.7 million, all of which is expected to be represented by non-
cash equity interests in Holdings, will be issued to AT&T. The transaction is
subject to execution of a definitive exchange agreement and closing conditions
typical in transactions of this nature. The networks relating to the Savannah
and Athens Pops have not been built. However, the Company expects that the Pops
will be included in the current build-out plan developed for the Company's
existing footprint.
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1999 COMPARED TO THE THREE MONTHS ENDED MARCH 31,
1998
Revenues for the three months ended March 31, 1999 were $11.5 million related
exclusively to services launched in eight markets during the first quarter 1999
and ongoing services provided in the Myrtle Beach area. At March 31, 1999,
subscribers totaled 43,741, representing an incremental increase of 9,897 for
the three-month period, resulting primarily from the service launches. Service
revenues were $9.3 million. The average revenue per subscriber was $47.30,
reflecting average minutes of use per subscriber of 186. Included in service
revenues were roaming revenues of $2.8 million, reflecting total roaming minutes
of use of approximately 7.3 million, generated primarily from the newly launched
markets.
Costs of services includes the cost of interconnection, cell site costs, roaming
validation, toll costs, and supplementary services. Costs of services were $5.4
million for the three months ended March 31, 1999, resulting exclusively from
the eight market launches and existing operations in Myrtle Beach.
Equipment margins were a loss of $1.4 million for the three months ended March
31, 1999. The Company expects to continue subsidizing the cost of handsets to
consumers for the foreseeable future.
Operations costs, which include the costs of maintaining the network systems,
were $3.5 million for the three months ended March 31, 1999, an increase of
$2.9 million over the same period in 1998, primarily as a result of commencing
operations of the initial network build-out.
Selling and marketing costs were $6.7 million for the three months ended March
31, 1999. The costs were incurred exclusively due to advertising and promotional
activities related to the launch of eight markets in the first quarter and the
establishment of the Company's distribution channels.
General and administrative expenses were $6.5 million for the three months ended
March 31, 1999, an increase of $4.4 million over the same period in 1998,
primarily as a result of increased employee headcount, costs associated with the
Company's corporate and regional administrative offices, and costs associated
with commencment of operations in two regional call centers.
For the three months ended March 31, 1999, depreciation and amortization expense
was $5.5 million. This amount relates exclusively to depreciation on network
equipment and the amortization of licenses put into service during the first
quarter related to the market launches and amortization attributable to certain
agreements acquired in the AT&T transaction.
For the three months ended March 31, 1999, interest expense was $10.0 million,
net of capitalized interest of $3.0 million, an increase of $9.7 million over
the same period in 1998. The increase is attributable to increased borrowings of
$472.5 million as compared to $75.0 million in the same period in 1998. The
Company's weighted average interest rate was 10.07%.
For the three months ended March 31, 1999, interest income was $1.1 million.
This amount relates primarily to interest income on the Company's cash and cash
equivalents. The average available cash balance for the three months ended March
31, 1999 was $161.5 million, as compared to the $101.0 million for the same
period in 1998. The available cash balance is due primarily from cash generated
throughout the last 12 months from net proceeds of $291 million from the
issuance of subordinated debt, borrowings of $150 million under the Company's
bank credit facility, and $119.7 million of capital contributions, offset by
capital expenditures related to the network build-out.
<PAGE>
For the three months ended March 31, 1999, the net loss was $28.5 million as
compared to $0.1 million for the same period in 1998. The net loss increased
$28.4 million, resulting primarily from the items discussed above.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 1999, the Company had $100.2 million in cash and cash
equivalents, as compared to $146.2 million in cash and cash equivalents at
December 31, 1998. Net working capital was $135.3 million at March 31, 1999 and
$146.2 million at December 31, 1998.
Net Cash Used in Operating Activities
Cash used by operating activities of $34.2 million arose primarily from an
increase in sales, marketing and operating activities related to launching eight
new markets and the commencing of operations in two regional call centers.
Net Cash Used in Investing Activities
Cash used by investing activities of $48.1 million arose from the purchase of
marketable securities of $29.4 million and capital expenditures related to the
network build-out of $18.7 million.
Net Cash Provided by Financing Activities
Cash provided by financing activities of $36.4 arose primarily from $37.0
million in capital contributions from Holdings related to funding of capital
commitments by the cash equity investors.
Liquidity
The build-out of the Company's PCS network and the marketing of the Company's
PCS services will require substantial capital. As it completes its build-out,
the Company will be highly leveraged. The Company currently estimates that its
capital requirements (including capital expenditures, working capital, debt
service requirements and anticipated operating losses) for the period from
inception through year-end 2002 (assuming substantial completion of the
Company's network build-out to cover 80% of the Pops in its licensed area by
such time) will total approximately $743.3 million. Actual amounts of the funds
required may vary materially from these estimates.
As part of the Company's network build-out, the Company expects to spend $272.0
million in 1999 related to the completion of the build-out of its initial
coverage area and its continued build-out of the Company's licensed area toward
coverage of 80% which is expected by year-end 2002. The build-out of the initial
coverage area included the installation of two switches and the lease or
acquisition of approximately 1,200 cell sites, as well as spectrum clearing
costs, retail store fitout, and administrative systems. The preceding capital
forecasts exclude internal engineering and capitalized interest costs.
The cash equity investors and certain management stockholders have severally
made irrevocable commitments to contribute $140 million in cash to Holdings
through February 2001 in exchange for 1.4 million shares of Holding's Series C
Preferred Stock. Holdings, in turn, has contributed and will contribute all cash
received on account thereof to the Company. The cash equity investors and
certain management stockholders, have contributed $80 million on account of
these commitments and are obligated to contribute the balance as follows: $35
million on February 4, 2000 and $25 million on February 4, 2001. In addition,
Holdings has received additional equity contributions of $35.0 million and $16.5
million from the cash equity investors (who contributed such amounts to the
Company) related to the Myrtle Beach and Norfolk acquisitions, respectively.
On February 3, 1998, the Company entered into a bank credit facility. This
credit facility provides for (i) a $175 million, eight and one-half year Tranche
A term loan, (ii) a $150 million, nine and one-quarter year Tranche B term loan
and (iii) a $100 million, eight and one-half year revolving credit facility. The
commitment to make revolving credit loans is reduced automatically beginning on
August 3, 2004 and the term loans must be repaid beginning on February 3, 2002.
In addition, the credit facility requires the Company to make mandatory
prepayments of outstanding borrowings under the credit facility commencing with
the fiscal year ending December 31, 2001 based on a percentage of excess cash
flow, and contains customary financial and other covenants. To date, $150
million of the Tranche B term loans have been drawn by the Company, which are
expected to fund the Company's future operations. Borrowings under the
facilities are secured by a first priority pledge of all assets of the Company,
including the capital stock of the Company and its subsidiaries that hold the
PCS licenses.
On May 7, 1998, the Company completed an offering of $512 million aggregate
principal amount at maturity of 11% senior subordinated discount notes due 2008,
pursuant to Rule 144A of the Securities Act of 1933, as amended. The proceeds of
the offering (after deducting an initial purchaser's discount of $9 million)
were $291 million. The
<PAGE>
Company has used or intends to use the net proceeds from the offering, together
with the capital contributions and borrowings under the credit facility, to
fund: (i) capital expenditures, including the build-out of its PCS network; (ii)
the acquisition of the Myrtle Beach system; (iii) the Norfolk acquisition; (iv)
working capital as required; (v) operating losses; (vi) general corporate
purposes; and (vii) potential acquisitions.
The Company believes that the proceeds from the notes, together with the
availability under the credit facility and the equity committed equity
contributions, provide the Company with funds sufficient to complete the
build-out of the Company's planned network within the licensed area.
INTEREST RATE RISK MANAGEMENT POLICIES
The Company's interest rate risk management program focuses on minimizing
exposure to interest rate movements, setting an optimal mixture of floating and
fixed rate debt, and minimizing liquidity risk. To the extent possible, the
Company manages interest rate exposure and the floating and fixed ratio through
its borrowings, but sometimes uses interest rate swaps to adjust its risk
profile. The Company selectively enters into interest rate swaps to manage
interest rate exposure only.
YEAR 2000 DISCLOSURE
The Year 2000 issue is the result of computer programs being written using two
digits rather than four digits to define the applicable year. Computer programs
that have time-sensitive software may recognize a date using "00" as the year
1900 rather than the year 2000. This could result in a system failure or
miscalculations causing disruptions of operations, a temporary inability to
process transactions, send invoices, or engage in normal business activities.
Currently, the Company is actively taking measures to eliminate or mitigate the
impact of any issues associated with the Year 2000. To that end, a project team
with senior management sponsorship has been established to provide centralized
coordination for the Company's Year 2000 related activities.
This team is currently conducting the inventory and assessment phase of the
program. Although the majority of the software, hardware and firmware deployed
as part of our start-up operation was procured to the latest revision levels and
believed to be year 2000 capable, our process requires a re-verification of the
Year 2000 readiness capabilities with the vendors, suppliers and third party
providers. All suppliers and third-party vendors deemed critical to the function
of the Company are being surveyed to ensure readiness and non-disruption to the
Company's operations. Through this assessment and surveying process, we are
identifying those remediation efforts necessary to ensure our systems and
applications will continue to operate without interruption prior to, during and
after the Year 2000. However, we can provide no assurance that the information
provided by the vendors, suppliers and third party providers, upon whom we rely
for our services, is accurate. As such, we can make no guarantee that inaccurate
information provided to us could not have a material effect upon our company.
To date, our assessments have shown that the Company's main switching and
transmission equipment, with the exception of the Myrtle Beach operational
systems, is capable of correctly recognizing and processing date sensitive
information. This capability was further demonstrated through inter-operability
testing conducted by the Cellular Telecommunications Industry Association. In
addition to the wireless operational infrastructure, initial assessments of
support system providers have revealed some products and applications that are
not currently in a conforming status. In all identified instances to date, the
supplier(s) of those products or applications have identified that their
product(s) will be compliant by the end of the second quarter of 1999. However,
there can be no guarantee that the systems of other companies which the Company
relies on will be converted on a timely basis, or that a failure to convert by
another company would not have a material adverse effect on the Company.
As part of the Myrtle Beach acquisition, the operational and financial systems
were to be migrated to the systems being deployed as part of the Company's PCS
start-up plan. The Myrtle Beach financial systems were successfully migrated to
those systems in the first quarter of 1999. Additionally, the Company is
developing plans to upgrade or replace the existing operational systems with
compliant versions. This remediation effort is expected to be completed by the
end of the third quarter of 1999. The failure to upgrade the Myrtle Beach
operational systems to a compliant version could have a material adverse effect
on the Company.
Initial assessments of our information technology have shown that our network
hardware, software and firmware was procured and deployed at a compliant version
level. Some previously deployed information technology hardware in the Myrtle
Beach markets is non-compliant. However, these non-compliant applications are
planned for upgrade, and given the nature of the Company's operations, potential
failures of these applications are not expected to have a material adverse
effect on the Company.
<PAGE>
The Company has not yet fully developed a comprehensive contingency plan to
address situations that may result if the Company is unable to achieve Year 2000
readiness of its critical operations. There can be no assurance that the Company
will be able to develop a contingency plan that will adequately address issues
that may arise in the year 2000. The failure of the Company to successfully
resolve such issues could result in a disruption of the Company's service and
operations, which could have a material adverse effect on the Company.
The costs associated with the Year 2000 issues are estimated to be approximately
$200,000, of which $88,000 has been spent to date. These costs are not material
to the Company's business operations or financial position. The costs of the
plan and the date on which the Company believes it will complete the Year 2000
modification are based on management's best estimates, which were derived
utilizing numerous assumptions regarding future events, including the continued
availability of certain resources, third-party modification plans and other
factors. There can be no assurance that these estimates will be achieved and
actual results could differ materially from those anticipated.
INFLATION
The Company does not believe that inflation has had a material impact on
operations.
REGULATORY UPDATE
On January 25, 1999, the United States Supreme Court reversed the United States
Court of Appeals for the Eighth Circuit's decisions regarding the FCC's
jurisdiction over interconnection provisions of the Telecommunications Act. The
Court upheld the FCC's exercise of jurisdiction over local interconnection
matters and on all other respects material to the Company's operations.
On February 8, 1999, the FCC extended the deadline for CMRS providers to comply
with telephone number portability rules to November 24, 2002, subject to any
later determination that an earlier phase-in of number portability is necessary
to conserve telephone numbers.
On April 15, 1999, the FCC completed its re-auction of 347 C, E, and F block
broadband PCS licenses, including licenses for markets in the Company's Licensed
Area, and applications for these licenses are pending.
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
4.1 First Supplemental Indenture, dated as of March 30,
1999, to the Indenture dated as of May 4, 1998.
10.1 Fourth Amendment, dated as of March 29, 1999, to Credit
Agreement, dated as of February 3, 1998
27 Financial Date Schedule
(b) Reports on Form 8-K
None
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, as amended,
the Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Malvern,
State of Pennsylvania on May 13, 1999.
Triton PCS, Inc.
By: /s/ Michael Kalogris
-------------------------------------
Sole Director and Chief Executive Officer
By: /s/ David Clark
-------------------------------------
Senior Vice President, Chief Financial
Officer, and Secretary
Triton Management Company, Inc.
By: /s/ Michael Kalogris
-------------------------------------
Sole Director and Chief Executive Officer
By: /s/ David Clark
-------------------------------------
Senior Vice President, Chief Financial
Officer, and Secretary
Triton PCS Holdings Company L.L.C.
By: Triton Management Company, Inc., its manager
By: /s/ Michael Kalogris
-------------------------------------
Sole Director and Chief Executive Officer
By: /s/ David Clark
-------------------------------------
Senior Vice President, Chief Financial
Officer, and Secretary
Triton PCS Property Company L.L.C., Inc.
By: Triton Management Company, Inc., its manager
By: /s/ Michael Kalogris
-------------------------------------
Sole Director and Chief Executive Officer
By: /s/ David Clark
-------------------------------------
Senior Vice President, Chief Financial
Officer, and Secretary
Triton PCS Equipment Company L.L.C.
By: Triton Management Company, Inc., its manager
BY: /s/ Michael Kalogris
-------------------------------------
Sole Director and Chief Executive Officer
By: /s/ David Clark
-------------------------------------
Senior Vice President, Chief Financial
Officer, and Secretary
Triton PCS Operating Company L.L.C.
By: Triton Management Company, Inc., its manager
By: /s/ Michael Kalogris
-------------------------------------
Sole Director and Chief Executive Officer
By: /s/ David Clark
-------------------------------------
Senior Vice President, Chief Financial
Officer, and Secretary
Triton PCS License Company L.L.C
By: Triton Management Company, Inc., its manager
By: /s/ Michael Kalogris
-------------------------------------
Sole Director and Chief Executive Officer
By: /s/ David Clark
-------------------------------------
Senior Vice President, Chief Financial
Officer, and Secretary
<PAGE>
Exhibit 4.1
FORM OF:
TRITON PCS, INC., as Issuer,
TRITON PCS INVESTMENT COMPANY L.L.C.,
as Guarantor,
and
CHASE MANHATTAN TRUST COMPANY, NATIONAL ASSOCIATION, as Trustee
-----------------
FIRST SUPPLEMENTAL INDENTURE
Dated as of March 30, 1999
TO
INDENTURE,
Dated as of May 4, 1998
Debt Securities
-----------------
================================================================================
<PAGE>
FIRST SUPPLEMENTAL INDENTURE
THIS FIRST SUPPLEMENTAL INDENTURE, dated as of March 30, 1999, by and
among TRITON PCS, INC., a corporation duly organized and existing under the laws
of the State of Delaware (hereinafter called the "Company"), TRITON PCS
INVESTMENT COMPANY L.L.C., a limited liability company duly organized and
existing under the laws of the State of Delaware (the "Guarantor"), and CHASE
MANHATTAN TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association
organized under laws of the United States of America, as trustee (hereinafter
called the "Trustee"). Capitalized terms used but not defined herein shall have
the meanings ascribed to them in the Indenture (as defined below).
WITNESSETH:
WHEREAS, the Company and the Trustee are parties to that certain
Indenture, dated as of May 4, 1998 (the "Indenture"), relating to $450,000,000
gross proceeds of the Company's 11% Senior Subordinated Discount Notes due 2008;
and
WHEREAS, the Guarantor was organized as a Delaware limited liability
company on February 26, 1999 and, as of the date hereof, the Guarantor is a
Subsidiary of the Company; and
WHEREAS, in connection with the Company's Credit Agreement, the Guarantor
entered into a guarantee of the indebtedness under the Company's Credit
Agreement on March 30, 1999; and
WHEREAS, in accordance with Section 4.18 of the Indenture, the Company is
required to cause the Guarantor, until the Guarantor ceases to be a direct or
indirect obligor (including as guarantor) under, or in respect of all of the
Company's Credit Facilities, to become a Guarantor and to fully and
unconditionally guarantee all of the Company's obligations under the Securities
and the Indenture by executing and delivering to the Trustee this First
Supplemental Indenture; and
WHEREAS, Section 10.01(x) of the Indenture provides that the Company and
the Trustee may amend or supplement the Indenture or the Securities without
notice to or consent of any Securityholder to add a Guarantor pursuant to the
requirements of Section 4.18 of the Indenture; and
WHEREAS, the Company, the Guarantor and the Trustee desire to enter into,
execute and deliver this First Supplemental Indenture in compliance with the
provisions of the Indenture; and
WHEREAS, all things prescribed by law and by the terms of the Indenture
necessary to make this First Supplemental Indenture, when duly executed and
delivered by the Company, the
<PAGE>
Guarantor and the Trustee a valid and binding instrument, enforceable in
accordance with its terms, and otherwise to effectuate the amendment of the
Indenture, have been done and performed, and the execution and delivery of this
First Supplemental Indenture have been in all respects duly authorized;
NOW, THEREFORE, in consideration of the above premises, the Company, the
Guarantor and the Trustee covenant and agree as follows:
ARTICLE ONE
Supplemental Indenture
Section 1.01. This First Supplemental Indenture is a supplement to the
Indenture and does and shall be deemed to form a part of, and shall be construed
in connection with and as a part of, the Indenture for any and all purposes,
including but not limited to satisfaction and discharge of the Indenture as
provided in Article 9 of the Indenture.
Section 1.02. This First Supplemental Indenture shall become effective
immediately upon execution and delivery by each of the Company, the Guarantor
and the Trustee.
ARTICLE TWO
Guarantee
Section 2.01. Subject to section 11.04 of the Indenture, until the
Guarantor ceases to be a direct or indirect obligor (including as guarantor)
under, or in respect of all of the Company's Credit Facilities, the Guarantor
hereby unconditionally, jointly and severally, guarantees to each Holder of a
Security authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns that: the principal of, premium, if any, and interest on
the Securities will be promptly paid in full when due, subject to any applicable
grace period, whether at maturity, by acceleration or otherwise, and interest on
the overdue principal and interest on any overdue interest on the Securities and
all other obligations of the Company to the Holders or the Trustee under the
Indenture or under the Securities will be promptly paid in full or performed,
all in accordance with the terms of the Indenture and of the Securities. The
Guarantor hereby further agrees to be bound by all other provisions of the
Indenture that are applicable to a "Guarantor" and the guarantee of the
Guarantor set forth in this First Supplemental Indenture shall be subject to
release upon the terms set forth in the Indenture.
<PAGE>
Section 2.02. The Company hereby expressly ratifies, adopts, renews,
confirms and continues in full force and effect, without limitation, except as
hereby amended, each and every covenant, agreement, condition and provision
applicable to it contained in the Indenture.
Section 2.03. The Company and the Guarantor covenant that the recitals of
fact and statements contained in this First Supplemental Indenture are true and
that, upon the execution and delivery of this First Supplemental Indenture, the
Company is not in default in any respect under any of the provisions of the
Indenture or of the Securities.
ARTICLE THREE
Additional Provisions
Section 3.01. Except to the extent supplemented by Article Two of this
First Supplemental Indenture, the Indenture remains in full force and effect in
accordance with its terms. It shall not be necessary in connection with any
future reference to the Indenture to also make reference to this First
Supplemental Indenture.
Section 3.02. The cover page of this First Supplemental Indenture and all
article and description headings are inserted for convenience of reference only
and are not to be taken to be any part of this First Supplemental Indenture or
to control or affect the meaning, construction or effect of the same.
Section 3.03. The laws of the State of New York shall govern this First
Supplemental Indenture without regard to principles of conflicts of law.
Section 3.04. This First Supplemental Indenture shall be simultaneously
executed in several counterparts, and all such counterparts executed and
delivered each as an original shall constitute but one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental
Indenture to be duly executed as of the date first written above.
TRITON PCS, INC.
By:
---------------------------------------
Name: Michael E. Kalogris
Title: Chief Executive Officer
TRITON PCS INVESTMENT COMPANY L.L.C.
By: Triton Management Company, Inc., as
Manager
By:
---------------------------------
Name: David Clark
Title:
CHASE MANHATTAN TRUST COMPANY, NATIONAL
ASSOCIATION
as Trustee
By:
---------------------------------------
Authorized Signatory
<PAGE>
Exhibit 10.1
FOURTH AMENDMENT, WAIVER AND CONSENT, dated as of March 29, 1999 (this
"Amendment"), to the Credit Agreement, dated as of February 3, 1998 (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
among TRITON PCS, INC., a corporation organized under the laws of the State of
Delaware (the "Borrower"), TRITON PCS HOLDINGS, INC., a corporation organized
under the laws of the State of Delaware ("Holdings"), the several banks and
other financial institutions and entities from time to time parties thereto (the
"Lenders"), and THE CHASE MANHATTAN BANK, as administrative agent (the
"Administrative Agent") for the Lenders.
WHEREAS, pursuant to the Credit Agreement, the Lenders have agreed
to make certain loans to the Borrower; and
WHEREAS the Borrower has requested that certain provisions of the
Credit Agreement be modified in the manner provided for in this Amendment, and
the Lenders are willing to agree to such modifications as provided for in this
Amendment.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Defined Terms. Capitalized terms used and not defined herein
shall have the meanings given to them in the Credit Agreement, as amended
hereby.
2. Amendments to the Credit Agreement.
(a) Section 1.01 of the Credit Agreement is hereby amended by:
(i) adding in the appropriate alphabetical order the following
definitions:
"'ABC' means ABC Wireless, L.L.C., a Delaware limited
liability company."
<PAGE>
"'ABC Documents' means (i) the Promissory Note of ABC to the
Bidding Entity dated as of March 1, 1999 and any additional
promissory notes substantially in the form thereof and collaterally
assigned to the Collateral Agent for the benefit of the Secured
Parties, (ii) the Security Agreement, dated as of March 1, 1999,
made by ABC in favor of AT&T Wireless Services, Inc., as a lender
thereunder and as collateral agent for the lenders specified
therein, (iii) the Guaranty and Pledge Agreement, dated as of March
1, 1999, made by ABC in favor of AT&T Wireless Services, Inc., as a
lender thereunder and as collateral agent for the lenders specified
therein, (iv) the Closing Agreement dated as of March 1, 1999 among
ABC, AT&T Wireless Services, Inc., Tritel Holding Corp. and the
Bidding Entity, and (v) the Bidding Plan and Business Arrangements
Agreement dated as of March 1, 1999 by and among ABC, AT&T Wireless
Services, Inc., the Bidding Entity and Tritel Holding Corp."
"'AW License Exchange and Acquisition Agreement' means the
License Exchange and Acquisition Agreement executed by AW, Holdings
and Triton PCS License Company, L.L.C. substantially in the form of
Exhibit A hereto provided that any modifications from such form in
the executed version of such agreement are not adverse to the
interests of the Lenders."
"'AW Pops Swap' means the acquisition by one or more of the
Borrower and the Subsidiaries of 20 MHz of the 30 MHz of PCS
licenses owned by AW covering the Savannah, Georgia, BTA and the
Athens, Georgia BTA (collectively, the "AW Swap Licenses"), in
exchange for the 20 MHz of PCS licenses owned by the Borrower and
its Subsidiaries covering the Cumberland, Maryland BTA and the
Hagerstown, Maryland BTA (collectively, the "Exchanged Licenses")
and the issuance to AW of approximately 53,881.64 shares of Series A
Preferred Stock and approximately 42,738.98 shares of Series D
Preferred Stock in connection therewith in accordance with the terms
of the AW License Exchange and Acquisition Agreement and in
connection therewith the issuance of
<PAGE>
approximately 4,748.78 shares of common stock of Holdings to the
current holders of common stock.";
"'Bidding Entity' means Lafayette Communications Company,
L.L.C., a Delaware limited liability company."
"'Bidding Entity-Related Default' means the occurrence of any
of the following: (i) an event of default (as defined therein) under
the Bidding Entity Note, (ii) any event or circumstance or any
action or failure to act by the Bidding Entity which, if the Bidding
Entity were a Subsidiary designated as a License Subsidiary under
this Agreement, would result in an Event of Default, (iii) the
making of any Restricted Payment by the Bidding Entity other than a
Restricted Payment made (x) to the Borrower or a Wholly Owned
Subsidiary or (y) in shares of Capital Stock of Holdings or (iv) the
Bidding Entity shall hold or acquire any assets other than (v) its
rights under the ABC Documents, (w) cash contributed by the Borrower
in an amount not to exceed $8,000,000 less any payments made by the
Bidding Entity to the FCC or to ABC, (x) Licenses obtained by the
Bidding Entity in the PCS C Block Auction, (y) rights under a
management agreement entered into with the Borrower or a Wholly
Owned Subsidiary and (z) other assets with an aggregate value not in
excess of $10,000; provided, that none of (a) the ownership of not
more than 51% of the Capital Stock of the Bidding Entity
(representing not more than 75% of the total ordinary voting power
of the Bidding Entity) by James Akerhielm, (b) the failure of the
Bidding Entity to enter into a Special Purpose Subsidiary Funding
Agreement, (c) the issuance of the Bidding Entity Note or (d) the
entering into and performance under the ABC Documents by the Bidding
Entity shall constitute a Bidding Entity-Related Default under
clause (ii) above."
"'Bidding Entity Note' a promissory note of the Bidding Entity
payable to the Borrower or a Wholly Owned Subsidiary in an amount
equal to the funds invested in the Bidding Entity by the Borrower
and any Subsidiary and otherwise in form
<PAGE>
and substance satisfactory to the Administrative Agent."
"'Marketing Affiliate' means a limited liability company owned
1/3 by the Borrower, 1/3 by Telecorp PCS, Inc. and 1/3 by TriTel
PCS, Inc., which engages in no significant activity other than the
registering, holding, maintenance and protection of trademarks and
the licensing thereof to its members."
"'PCS C Block Auction' means the reauction conducted by the
FCC for the sale of Licenses in the C block as set forth in parts 1
and 24 of Title 47 of the Code of Federal Regulations, scheduled to
commence on or about March 23, 1999."
(ii) deleting the definition of "Contributed Equity" in its entirety
and inserting in lieu thereof the following:
"'Contributed Equity' means at any time or for any period, the
aggregate amount which shall have been received by the Borrower
and/or Holdings prior to such time or during such period as
consideration for the issuance of Capital Stock of Holdings (valued
(i) in the case of the AW Licenses, at $109,850,200, the agreed
value of the AW Licenses in the Securities Purchase Agreement, (ii)
in the case of the Additional AW Licenses, at $31,873,528, the
agreed amount by which the value of the Additional AW Licenses
exceeds the value of the Exchanged Licenses in the Preferred Stock
Agreement and (iii) in the case of the AW Swap Licenses, at
approximately $9,662,062, the agreed amount by which the value of
the AW Swap Licenses exceeds the value of the Exchanged Licenses)
less (x) any amounts contributed to any Unrestricted Subsidiary by
Holdings and (y) any amounts paid by Holdings in connection with the
Equity Swap.";
(iii) deleting the phrase "clauses (a) and (b)" in clause (a) of the
definition of "Prepayment Event" and substituting "clauses (a), (b), (d),
(e) and (f)" therefor.
<PAGE>
(iv) inserting at the end of clause (c) of the definition of
"Prepayment Event" the following:
"or (vii) such equity is the approximately 53,881.64 shares of
Series A Preferred Stock and approximately 42,738.98 shares of
Series D Preferred Stock of Holdings issued to AW or the
approximately 4,748.78 shares of common stock issued to the current
holders of common stock in connection with the consummation of the
AW Pops Swap; or";
(b) Section 3.14 of the Credit Agreement is hereby amended by
inserting the phrase "or, in the case of Licenses acquired in the PCS C Block
Auction, the Bidding Entity" after the words "License Subsidiary" in clause (ii)
thereof.
(c) Section 3.16 and 5.11 of the Credit Agreement are hereby amended
by inserting the phrase ", the investment in the Bidding Entity permitted by
Section 6.05(i)" before the words "and subscriber acquisition costs" in the
first sentence of each such Section.
(d) Section 5.01(e) of the Credit Agreement is hereby amended by
deleting the parenthetical therefrom and substituting the following therefor:
"(including (i) a projected summary statement of operations, (ii) a
projected statement of capital expenditures and (iii) a projected
statement of Indebtedness, as of the end and for each such fiscal
quarter)"
(e) Section 6.04(a) of the Credit Agreement is hereby amended by:
(i) deleting the word "and" at the end of clause (ii) thereof and
substituting therefor a comma; and
(ii) inserting immediately before the period at the end thereof the
following "and (iv) the Bidding Entity may merge with or into any License
Subsidiary in a transaction in which a Wholly Owned License Subsidiary is
the surviving corporation".
<PAGE>
(f) Section 6.05 of the Credit Agreement is hereby amended by
deleting "and" at the end of clause (f) thereof and deleting "." and adding the
following at the end of clause (g) thereof:
"; (h) the acquisition of the AW Swap Licenses in connection with
the consummation of the AW Pops Swap;
(i) the investment of up to $8,000,000 in the Bidding Entity;
provided that (i) all Capital Stock and debt securities of the
Bidding Entity owned by a Loan Party are pledged pursuant to the
Pledge Agreement and (ii) all agreements entered into between the
Bidding Entity and any Loan Party are assigned to the Lenders as
collateral; and
(j) investments in the Capital Stock of the Marketing Affiliate the
consideration for which consists of the transfer of the SunCom
trademark; provided that (i) all such Capital Stock is pledged
pursuant to the Pledge Agreement and (ii) all agreements entered
into between the Marketing Affiliate and any Loan Party are assigned
to the Lenders as collateral; provided, further, that if an Event of
Default exists the Lenders may enforce the Loan Parties' rights with
respect to such Capital Stock and agreements but may transfer such
Capital Stock and assign such agreements to third parties only after
obtaining any required consents from the equity holders (other than
any Loan Party) in the Marketing Affiliate, such consents not to be
unreasonably withheld."
(g) Section 6.06 of the Credit Agreement is hereby amended by
deleting "and" at the end of clause (c) thereof, deleting the proviso at the end
of Section 6.06 in its entirety and substituting in lieu thereof the following:
"(e) the sale to AW of the Exchanged Licenses contemplated by the
definition of AW Pops Swap; and
(f) the transfer of the SunCom trademark to the Marketing Affiliate;
<PAGE>
provided that all sales, transfers, leases and other dispositions
permitted hereby (other than those permitted in clauses (d), (e) and
(f) above) shall be made for fair value and solely for cash
consideration."
(h) Section 6.09 of the Credit Agreement is hereby amended by
deleting the phrase "and (d)" and inserting in lieu thereof the phrase ", (d)
the AW Pops Swap" and (e)"
(i) Article VII of the Credit Agreement is hereby amended by
deleting "or" after clause (t) thereof and inserting the following clauses (v)
and (w) immediately after clause (u) thereof:
"(v) The Bidding Entity shall fail to reimburse promptly after its
receipt thereof from ABC substantially all funds invested in it by
Holdings, the Borrower or any Subsidiary which have not been used to
purchase Licenses during the PCS C Block Auction or shall fail to exercise
its contractual right to require ABC to request the FCC to release such
funds and repay such amounts to the Bidding Entity promptly following the
termination of the PCS C Block Auction;
(w) Any Bidding Entity-Related Default shall occur; or
(x) The Bidding Entity shall agree to any amendment or modification
of any ABC Document or shall waive or fail to enforce any of its rights
under any ABC Document in each case in a manner adverse to the Lenders."
(j) Schedule 3.14 of the Credit Agreement is hereby amended by
deleting such schedule and substituting Schedule 3.14 set forth as Exhibit B
hereto therefor.
3. Consent. The Lenders hereby consent to (a) the release by the
Collateral Agent under the Security Documents of the Collateral necessary to (i)
consummate the AW Pops Swap in accordance with the terms of the definition
thereof and (ii) the transfer the SunCom trademark to the Marketing Affiliate
and (b) the amendment of the Pledge Agreement to reflect the procedures
described in the second proviso in clause (j) of Section 6.05.
<PAGE>
4. Waiver. The Lenders hereby expressly waive any rights or remedies
in connection with any breach of or failure to comply with Sections 3.13, 6.01
and 6.13 of the Credit Agreement to the extent, and only to the extent, any such
provision is breached by the issuance by any Special Purpose Subsidiary of a
guarantee of the 11% Senior Subordinated Discount Notes due 2008 of the Borrower
described in the Offering Memorandum of the Borrower dated April 29, 1998.
5. No Other Amendments, Waivers or Consents; Confirmation. Except as
expressly amended, waived, modified and supplemented hereby, the provisions of
the Credit Agreement are and shall remain in full force and effect.
6. Representations and Warranties. Each of Borrower and Holdings
hereby represents and warrants to the Administrative Agent and the Lenders as of
the date hereof:
(a) After giving pro forma effect to this Amendment, no Default or
Event of Default has occurred and is continuing.
(b) The execution, delivery and performance by each of Borrower and
Holdings of this Amendment have been duly authorized by all necessary corporate
and other action and do not and will not require any registration with, consent
or approval of, notice to or action by, any person (including any governmental
agency) in order to be effective and enforceable. The Credit Agreement as
amended by this Amendment constitutes the legal, valid and binding obligation of
each of Borrower and Holdings, enforceable against each in accordance with its
terms, subject only to the operation of the Bankruptcy Code and other similar
statutes for the benefit of debtors generally and to the application of general
equitable principles.
(c) After giving pro forma effect to this Amendment, all
representations and warranties of the Borrower and Holdings contained in the
Credit Agreement (other than representations or warranties expressly made only
on and as of an earlier date) are true and correct in all material respects as
of the date hereof.
<PAGE>
7. Effectiveness. This Amendment shall become effective only upon
the satisfaction in full of the following conditions precedent:
(a) The Administrative Agent shall have received counterparts
hereof, duly executed and delivered by the Borrower, Holdings and the
Requisite Lenders;
(b) The Administrative Agent shall have received such opinions and
certificates from the Borrower and Holdings and their counsel as it may
reasonably request in form reasonably satisfactory to its counsel;
(c) The Administrative Agent shall have received each of the
following from the Borrower and Holdings:
(i) A copy of resolutions passed by the board of directors of
the Borrower and Holdings, certified by the Secretary or an
Assistant Secretary of the Borrower and Holdings, as the case may
be, as being in full force and effect on the date hereof,
authorizing the execution, delivery and performance of this
Amendment;
(ii) A certificate as to the name and signature of each
officer of the Borrower and Holdings authorized to sign this
Amendment;
(iii) A certificate of the chief financial officer of the
Borrower to the effect that (x) after giving pro forma effect to
this Amendment, all representations and warranties contained in this
Amendment are true and correct in all material respects as of the
date hereof, (y) since February 4, 1998, there has been no material
adverse change in the business, assets, operations, prospects,
condition (financial or otherwise) of the Borrower and its
Subsidiaries taken as a whole, and (z) after giving pro forma effect
to this Amendment, no event has occurred and is continuing which,
under the terms hereof, is an Event of Default or would, with the
lapse of time or notice or both, become an Event of Default.
(d) The Bidding Entity shall execute the Guarantee Agreement, and
such other of the Security Document as
<PAGE>
the Administrative Agent reasonably requests, with such amendments thereto
as are necessary to permit an entity that is not a Subsidiary to execute
such agreements.
(e) The Borrower and/or a Wholly owned Subsidiary shall own not less
than 49% of the Capital Stock of the Bidding Entity representing not less
than 25% of the ordinary voting power. James W. Akerhielm shall own the
remainder of the common stock of the Bidding Entity representing the
remainder of the ordinary voting power. The Bidding Entity shall have no
other outstanding stock. All such Capital Stock shall be pledged as
security for the payment and performance of the Obligations.
(f) The Administrative Agent shall have received an executed copy of
the Bidding Entity Note which, among other things, shall require the
Bidding Entity to repay to the Borrower or a Wholly Owned Subsidiary all
funds contributed to it by the Borrower or any Subsidiary which are not
used to purchase C Block Licenses on terms satisfactory to the
Administrative Agent.
(g) The Administrative Agent shall have received an executed copy of
each ABC Document and all of the Bidding Entity's rights under each ABC
Document shall have been collaterally assigned to the Collateral Agent,
for the benefit of the Secured Parties.
8. Expenses. The Borrower agrees to reimburse the Administrative
Agent for its out-of-pocket expenses in connection with this Amendment,
including the reasonable fees, charges and disbursements of Cravath, Swaine &
Moore, counsel for the Administrative Agent.
9. Governing Law; Counterparts. (a) This Amendment and the rights
and obligations of the parties hereto shall be governed by, and construed and
interpreted in accordance with, the laws of the State of New York.
<PAGE>
(b) This Amendment may be executed by one or more of the parties to
this Amendment on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. This Amendment may be delivered by facsimile transmission of the
relevant signature pages hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered by their respective proper and duly authorized
officers as of the day and year first above written.
TRITON PCS, INC.,
by
/s/ Daniel E. Hopkins
-------------------------------------
Name: Daniel E. Hopkins
Title: Vice President & Treasurer
TRITON PCS HOLDINGS, INC.,
by
/s/ Daniel E. Hopkins
-------------------------------------
Name: Daniel E. Hopkins
Title: Vice President & Treasurer
THE CHASE MANHATTAN BANK,
individually and as Administrative
Agent,
by
/s/ Tracey Navin Ewing
-------------------------------------
Name: Tracey Navin Ewing
Title: Vice President
<PAGE>
BANK OF HAWAII,
by
/s/ Eric N. Pelletier
-------------------------------------
Name: Eric N. Pelletier
Title: Vice President
BALANCED HIGH-YIELD FUND I LTD.,
BY: BHF-BANK AKTIENGESELLSCHAFT,
acting through its New York Branch
as attorney-in-fact,
by
/s/ Dan Dobrjanskyj
-------------------------------------
Name: Dan Dobrjanskyj
Title: Assistant Vice President
by
/s/ Michael T. Pellerito
-------------------------------------
Name: Michael T. Pellerito
Title: Assistant Treasurer
BHF-BANK AKTIENGESELLSCHAFT,
by
/s/ Dan Dobrjanskyj
-------------------------------------
Name: Dan Dobrjanskyj
Title: Assistant Vice President
by
/s/ Michael T. Pellerito
-------------------------------------
Name: Michael T. Pellerito
Title: Assistant Treasurer
BANK OF TOKYO-MITSUBISHI TRUST
COMPANY,
by
/s/ Julie Silver
-------------------------------------
Name: Julie Silver
Title: Assistant Vice-President
<PAGE>
BANKBOSTON, N.A.,
by
/s/ Jonathan D. Sharkey
-------------------------------------
Name: Jonathan D. Sharkey
Title: Vice President
<PAGE>
BARCLAYS BANK PLC,
by
/s/ Daniele Iacovone
-------------------------------------
Name: Daniele Iacovone
Title: Associate Director
BAYERISCHE HYPO-UND VEREINSBANK AG,
NEW YORK BRANCH,
by
-------------------------------------
Name:
Title:
by
-------------------------------------
Name:
Title:
THE CIT GROUP/EQUIPMENT FINANCING, INC.,
by
/s/ J.E. Palmer
-------------------------------------
Name: J.E. Palmer
Title: Assistant Vice President
CREDIT LYONNAIS NEW YORK BRANCH,
by
/s/ Mark D. Thorsheim
-------------------------------------
Name: Mark D. Thorsheim
Title: Vice President
<PAGE>
FIRST UNION NATIONAL BANK OF NORTH CAROLINA,
by
-------------------------------------
Name:
Title:
THE FUJI BANK, LIMITED
New York Branch,
by
/s/ Teiji Teramoto
-------------------------------------
Name: Teiji Teramoto
Title: Vice President & Manager
GENERAL ELECTRIC CAPITAL CORPORATION,
by
/s/ Mark F. Mylon
-------------------------------------
Name: Mark F. Mylon
Title: Manager-Operations
LEHMAN COMMERCIAL PAPER, INC.,
by
/s/ William J. Gallagher
-------------------------------------
Name: William J. Gallagher
Title: Authorized Signatory
MERRILL LYNCH SENIOR FLOATING RATE FUND
by
-------------------------------------
Name:
Title:
<PAGE>
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
by
/s/ Gery Sampere
-------------------------------------
Name: Gery Sampere
Title: Vice President
<PAGE>
TORONTO DOMINION (TEXAS), INC.,
by
/s/ Anne C. Favoriti
-------------------------------------
Name: Anne C. Favoriti
Title: Vice President
UNION BANK OF CALIFORNIA, N.A.,
by
/s/ Jenny Dongo
-------------------------------------
Name: Jenny Dongo
Title: Assistant Vice President
VAN KAMPEN PRIME RATE INCOME TRUST,
by
/s/ Jeffrey W. Maillet
-------------------------------------
Name: Jeffrey W. Maillet
Title: Senior Vice President &
Director
VAN KAMPEN SENIOR INCOME TRUST,
by
/s/ Jeffrey W. Maillet
-------------------------------------
Name: Jeffrey W. Maillet
Title: Senior Vice President &
Director
VAN KAMPEN CLO II, LIMITED
BY: VAN KAMPEN MANAGEMENT, INC.
as Collateral Manager,
by
/s/ Jeffrey W. Maillet
-------------------------------------
Name: Jeffrey W. Maillet
Title: Senior Vice President &
Director
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1999
<PERIOD-START> JAN-01-1998 JAN-01-1999
<PERIOD-END> MAR-31-1998 MAR-31-1999
<CASH> 146,172 100,152
<SECURITIES> 23,612 53,087
<RECEIVABLES> 8,423 15,045
<ALLOWANCES> 1 555
<INVENTORY> 1,433 6,734
<CURRENT-ASSETS> 179,639 174,468
<PP&E> 200,032 231,637
<DEPRECIATION> 1,079 3,396
<TOTAL-ASSETS> 686,859 709,903
<CURRENT-LIABILITIES> 33,447 39,147
<BONDS> 300,000 300,000
0 0
0 0
<COMMON> 0 0
<OTHER-SE> 353,412 370,756
<TOTAL-LIABILITY-AND-EQUITY> 686,859 709,903
<SALES> 0 2,225
<TOTAL-REVENUES> 0 11,540
<CGS> 0 3,604
<TOTAL-COSTS> 0 9,006
<OTHER-EXPENSES> 2,683 22,150
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 306 10,000
<INCOME-PRETAX> 0 1,120
<INCOME-TAX> (2,847) 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (142) (28,496)
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0
</TABLE>
