SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Sections 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) December 23, 1994
VANGUARD CELLULAR SYSTEMS, INC.
(Exact Name of Registrant as Specified in its Charter)
North Carolina 0-16560 56-1549590
(State or other Jurisdiction (Commission File (IRS Employer
of Incorporation) Number) Identification
No.)
2002 Pisgah Church Road, Suite 300, Greensboro, NC 27455
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (910) 282-3690
Item 2. Acquisition or Disposition of Assets
On December 23, 1994, the Registrant completed the closing of a $675
million credit facility, pursuant to an Amended and Restated Loan
Agreement (the "1994 Credit Facility") with various lenders led by The
Toronto-Dominion Bank and The Bank of New York (collectively referred
to herein as the "Lenders"). The 1994 Credit Facility refinanced the
Registrant's then existing $390 million credit facility (the "1993 Loan
Agreement"). The participating Lenders are enumerated in Schedule A
below together with their share of each separate facility contemplated
under the 1994 Credit Facility. Under the terms of a Security
Agreement and a Master Subsidiary Security Agreement, the Registrant
and its wholly owned subsidiaries, who are guarantors of the
Registrant's obligations under the 1994 Credit Facility, granted the
Lenders security interests in substantially all of the tangible and
intangible assets of the Registrant and its wholly owned subsidiaries.
These pledged assets include, without limitation, the stock of the
wholly owned subsidiaries of the Registrant and all of the tangible and
intangible assets of the Registrant and its wholly owned subsidiaries.
The 1994 Credit Facility consists of a "Term Loan" and a "Revolving
Loan." The Term Loan, in the amount of $325 million, is to refinance
the Registrant's existing borrowings under the 1993 Loan Agreement.
The Revolving Loan, in the amount of up to $350 million, is available
for capital expenditures, to make acquisitions of and investments in
cellular and other wireless communication interests, and for other
general corporate purposes.
The 1994 Credit Facility requires maintenance of certain covenants
including but not limited to maintenance of certain financial ratios,
insurance, compliance with all applicable laws, and prescribed amounts
of interest rate protection. Additionally, the 1994 Credit Facility
restricts, among other things, the creation of certain additional
indebtedness, disposition of certain assets, payment of cash dividends,
capital expenditures and cellular acquisitions and other wireless
communications investments. These restrictions generally permit
borrowings to consummate the Company's pending acquisition of Sunshine
Cellular (the Federal Communications Commission license holder for the
nonwireline cellular telephone system in the Pennsylvania 8-Union rural
service area) and up to $75 million of acquisitions and investments
(including up to $35 million of investments in noncellular wireless
communications and in cellular markets that are not continguous to the
Registrant's existing markets). Capital expenditure restrictions are
based on the number of the Registrant's cellular subscribers in
decreasing amounts over the term of the facility (approximately $150
million in 1995). The requirements of the 1994 Credit Facility were
established in relation to the Registrant's projected capital and
financing needs and projected results of operations. These
requirements generally were designed to require continued improvement
in the registrant's operating performance such that its operating cash
flow would be sufficient to begin servicing the debt as repayments are
required.
The Term Loan and the Revolving Loan bear interest at a rate equal to
the Registrant's choice of the Prime Rate or Eurodollar Rate plus an
applicable margin based upon a leverage ratio for the most recent
fiscal quarter. The leverage ratio, which is computed as the ratio of
Total Debt (as defined) to Adjusted Cash Flow (as defined), currently
is at such a level as to cause the applicable margins on the borrowings
to be 0.375% and 1.625% per annum for the Prime Rate and Eurodollar
Rate, respectively.
The outstanding amount of the Term Loan as of March 30, 1998 is to be
repaid in increasing quarterly installments commencing on March 31,
1998 and terminating at its maturity date of December 31, 2003. The
quarterly installment payments begin at 1.875% of the outstanding
principal amount at March 30, 1998 and gradually increases to 5.625% at
March 31, 2003. The available borrowings under the Revolving Loan
shall be reduced on a quarterly basis also commencing on March 31, 1998
and terminating on December 31, 2003. The quarterly reduction begins
at 1.875% of the Revolving Loan Commitment at March 30, 1998 and
gradually increases to 5.625% on March 31, 2003.
Schedule A
Term Loan Revolving Loan
Lender Commitment Commitment
MANAGING AGENTS
The Toronto-Dominion Bank $28,888,888.89 $31,111,111.11
The Bank of New York 26,722.222.21 28,777.777.79
CO-AGENTS
NationsBank of
North Carolina, N.A. 21,666,666.67 23,333,333.33
LTCB Trust Company 21,666,666.67 23,333,333.33
Canadian Imperial Bank
of Commerce 21,666,666.67 23,333,333.33
The Bank of Nova Scotia 17,935,185.19 19,314,814.81
First National Bank 17,935,185.19 19,314,814.81
of Boston
LENDERS
Barclays Bank plc 16,851,851.85 18,148,148.15
The Bank of Montreal 12,037,037.04 12,962,962.96
Banque Nationale De Paris 12,037,037.04 12,962,962.96
Credit Lyonnais Cayman
Island Branch 12,037,037.04 12,962,962.96
First National Bank of
Maryland 12,037,037.04 12,962,962.96
First Union National
Bank of North Carolina 12,037,037.04 12,962,962.96
Fleet National Bank 12,037,037.04 12,962,962.96
The Bank of Tokyo
Trust Company 9,629,629.63 10,370,370.37
Societe Generale 9,629,629.63 10,370,370.37
ABN-AMRO Bank N.V. 7,222,222.22 7,777,777.78
Bank of Hawaii 7,222,222.22 7,777,777.78
CoreStates Bank, N.A. 7,222,222.22 7,777,777.78
Meridian Bank 7,222,222.22 7,777,777.78
National Westminster Bank, USA 7,222,222.22 7,777,777.78
Royal Bank of Canada 7,222,222.22 7,777,777.78
The Sumitomo Trust & 7,222,222.22 7,777,777.78
Banking Co., Ltd.,
The Bank of California, N.A. 4,814,814.81 5,185,185.19
Shawmut Bank Connecticut, N.A. 4,814,814.81 5,185,185.19
$325,000,000.00 $350,000,000.00
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of Business Acquired. Not Applicable.
(b) Pro Forma Financial Information. Not Applicable.
(c) The Exhibits furnished in connection with this report are as follows:
2(a) Amended and Restated Loan Agreement dated as of December 23,
1994
2(b) Security Agreement dated as of December 23, 1994
2(c) Master Subsidiary Security Agreement dated as of December 23, 1994
The following schedules to the Loan Agreement, filed as Exhibit 2(a)
hereto, have been omitted. The Registrant hereby undertakes to furnish
supplementally a copy of any such omitted schedule to the Commission
upon request.
Exhibit A Form of Assignment of Rights by Partner
Exhibit B Form of Borrower Pledge Agreement
Exhibit C Form of Certificate of Financial Condition
Exhibit D Form of Term Loan Note
Exhibit E Form of Revolving Loan Note
Exhibit F-1 Form of Request for Advance - Initial Advance
Exhibit F-2 Form of Request for Advance - Advances Subsequent to the
Agreement Date
Exhibit G Form of Security Agreement
Exhibit H Form of Subsidiary Guaranty
Exhibit I Form of Subsidiary Pledge Agreement
Exhibit J Form of Subsidiary Security Agreement
Exhibit K Form of Use of Proceeds Letter
Exhibit L Form of Borrower's Loan Certificate
Exhibit M Form of Subsidiary Loan Certificate
Exhibit N Form of Performance Certificate
Exhibit O Form of Assignment and Assumption Agreement
Schedule 1 Licenses
Schedule 2 Liens of Record as of the Agreement Date
Schedule 3 Subsidiaries
Schedule 4 Litigation
Schedule 5 Agreements with Affiliates
Schedule 6 Investments
The following schedules to the Security Agreement, filed as Exhibit 2(b)
hereto, have been omitted. The Registrant hereby undertakes to furnish
supplementally a copy of such omitted Schedule to the Commission upon
request.
Exhibit A Licenses
Exhibit B Contracts
Exhibit C Leases
The following schedules to the Master Subsidiary Security Agreement,
filed as Exhibit 2(c) hereto, have been omitted. The Registrant hereby
undertakes to furnish supplementally a copy of any such omitted Schedule
to the Commission upon request.
Exhibit A Licenses
Exhibit B Contracts
Exhibit C Leases
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
VANGUARD CELLULAR SYSTEMS, INC.
By:
Stephen L. Holcombe, Senior Vice
President and Chief Financial
Officer
Date: January , 1995
INDEX TO EXHIBITS
Exhibit
No. Exhibit Page
2(a) Amended and Restated Loan Agreement dated
as of December 23, 1994.
2(b) Security Agreement dated as of December 23, 1994.
2(c) Master Subsidiary Security Agreement dated as of
December 23, 1994.