UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 25, 2004
AIRGATE PCS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 027455 58-2422929
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
Harris Tower, 233 Peachtree Street, N.E.
Suite 1700
Atlanta, Georgia 30303
(Address of Principal
Executive Offices)
(404) 525-7272
(Registrant's telephone number, including area code)
None
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligations of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement
On October 25, 2004, AirGate PCS, Inc. (the "Company") issued and sold $175
million First Priority Senior Secured Floating Rate Notes due 2011 (the "Notes")
through a private placement to qualified institutional buyers pursuant to Rule
144A and in offshore transactions pursuant to Regulation S, promulgated under
the Securities Act of 1933, as amended (the "Securities Act"). The Notes were
initially sold pursuant to a purchase agreement, dated October 7, 2004, among
the Company, its subsidiaries, Banc of America Securities LLC and Credit Suisse
First Boston LLC. Interest on the Notes will accrue at a floating rate, reset
quarterly, equal to LIBOR (as defined in the Indenture) plus 3.75% per year,
payable quarterly in cash in arrears on January 15, April 15, July 15 and
October 15 of each year commencing January 15, 2004. The Notes are guaranteed by
all of the Company's subsidiaries and are secured on a first priority basis by
substantially all of the Company's and its subsidiaries' assets.
An indenture, dated as of October 25, 2004 (the "Indenture"), among the company,
its subsidiaries and The Bank of New York Trust Company, N.A., as trustee (the
"Trustee"), governs the Notes. The Indenture contains covenants which, subject
to certain exceptions, limit the ability of the Company and its subsidiaries to
incur additional indebtedness or issue preferred stock, engage in certain asset
sales, make certain types of restricted payments, engage in transactions with
affiliates and create liens on assets of the Company or its subsidiaries. Upon a
change of control (as defined in the Indenture), the Indenture requires the
Company to make an offer to repurchase the Notes at 101% of their principal
amount, plus accrued and unpaid interest. Furthermore, if the Company sells
certain assets or experiences certain events of loss and does not reinvest the
net proceeds in compliance with the Indenture, then the Company must offer to
repurchase the Notes at 100% of their principal amount, plus accrued and unpaid
interest.
The Indenture allows the Company to redeem the Notes at redemption prices of
102.0%, 101.0% and 100.0% of the principal amount, plus accrued and unpaid
interest, during the 12-month period beginning on October 15 of the years ended
2006, 2007 and 2008 and thereafter, respectively. Prior to October 1, 2006, the
Company may at its option use the net cash proceeds of one or more equity
offerings to redeem up to 35% of the principal amount of the Notes at a
redemption price equal to 100% of the principal amount so redeemed plus a
premium equal to the interest rate per annum applicable on the date on which the
notice of redemption is given, plus accrued and unpaid interest.
Upon a continuing event of default, the trustee or the holders of 25% in
principal amount of the Notes may declare the principal of and accrued and
unpaid interest on all the Notes to be immediately due and payable, except that
an event of default resulting from a bankruptcy or similar proceeding will
automatically cause the Notes to become due and payable. Events of default
include, without limitation:
o default continuing for 30 days in the payment of any installment of
interest;
o default in the payment of principal or premium;
o failure to repurchase Notes in the event of a change of control or an
asset sale;
o default in the payment of principal, premium or interest which causes
the acceleration of any other debt of the Company or any of its
restricted subsidiaries, and the principal amount of such debt is
greater than $10.0 million;
o failure by the Company or any of its restricted subsidiaries to
pay final judgments aggregating in excess of $10.0 million or more;
and
o the occurrence of an event of default under the indenture, dated as of
February 4, 2004, by and among the Company, the subsidiary guarantors a
party thereto and The Bank of New York.
In connection with the issuance of the Notes, the Company and its subsidiaries
entered into the Registration Rights Agreement, the Security Agreements and the
Pledge Agreements (each of which are described below).
The registration rights agreement, dated October 25, 2004 (the "Registration
Rights Agreement"), among the Company, its subsidiaries, Banc of America
Securities LLC and Credit Suisse First Boston LLC requires the Company to
register under the Securities Act Notes having substantially identical terms
within specified time periods and to complete an exchange of the privately
placed Notes for the publicly registered Notes or, if the exchange cannot be
effected, to file and keep effective a shelf registration statement for resale
of the privately placed Notes. Failure of the Company to comply with the
registration and exchange requirements in the Registration Rights Agreement
within specified time periods would require the Company to pay as liquidated
damages additional interest on the privately placed Notes until the failure to
comply is cured.
Under the security agreements, each dated October 25, 2004 (the "Security
Agreements"), among the Company and its subsidiaries on the one hand and the
Trustee on the other hand, the Company and its subsidiaries pledged and granted
to the Trustee for the Trustee's benefit and for the benefit of the holders of
the Notes a security interest in substantially all their assets. Furthermore,
pursuant to three pledge agreements, each dated October 25, 2004 (the "Pledge
Agreements"), between the Company and the Trustee, the Company pledged its
shares or membership interests, as applicable, in the Company's subsidiaries to
the Trustee for the benefit of the holders of the Notes.
The Bank of New York Trust Company, N.A., the trustee under the Indenture, is an
affiliate of The Bank of New York, which is the trustee under the indenture,
dated as of February 4, 2004, by and among the Company, the subsidiary
guarantors a party thereto and The Bank of New York.
The foregoing descriptions of the Notes, the Indenture, Registration Rights
Agreement, Security Agreements and the Pledge Agreements are qualified by
reference in their entirety to copies of such documents or forms of such
documents which are filed herewith as exhibits and incorporated in this Item
1.01 by reference.
Item 1.02 Termination of a Material Definitive Agreement
On October 25, 2004, the Company used approximately $132.4 million of the
proceeds received from the offering of the Notes (described in Item 1.01 above)
to repay and terminate the Credit Agreement, dated as of August 16, 1999 (as
amended, supplemented or otherwise modified, the "Credit Facility"), by and
among the Company, the lenders party thereto, Lehman Commercial Paper, Inc., as
administrative agent and US Bank, NA, as collateral agent. The amounts
outstanding under the Credit Facility consisted of two tranches. The Credit
Facility contained covenants requiring the Company to maintain certain financial
ratios and various covenants customary in such financial arrangements. The
Credit Facility was secured by the assets of the Company and its subsidiaries.
As a result of the repayment and termination of the Credit Facility, the Consent
and Agreement, dated as of August 16, 1999, among Sprint Spectrum L.P.,
Sprintcom, Inc., Sprint Communications Company, L.P., Wirelessco, L.P. and
Lucent Technologies (as the former administrative agent under the Credit
Facility) terminated.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation
under an Off-Balance Sheet Arrangement
The disclosure contained in Item 1.01 is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits
4.1 Indenture, dated as of October 25, 2004, by and among AirGate
PCS, Inc., its subsidiaries party thereto and The Bank of New
York Trust Company, N.A.
4.2 Form of First Priority Senior Secured Floating Rate Note due
2011 (included in Exhibit 4.1)
4.3 Registration Rights Agreement, dated October 25, 2004, by and
among AirGate PCS, Inc., its subsidiaries party thereto, Banc
of America Securities LLC and Credit Suisse First Boston LLC
4.4 Form of Pledge Agreement
4.5 Form of Security Agreement
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 hereunto duly authorized.
AIRGATE PCS, INC.
Date: October 29, 2004 By: /s/ Thomas M. Dougherty
Thomas M. Dougherty
President and Chief Executive
Officer
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
4.1 Indenture, dated as of October 25, 2004, by and among AirGate
PCS, Inc., its subsidiaries party thereto and The Bank of New
York Trust Company, N.A.
4.2 Form of First Priority Senior Secured Floating Rate Note due
2011 (included in Exhibit 4.1)
4.3 Registration Rights Agreement, dated October 25, 2004, by and
among AirGate PCS, Inc., its subsidiaries party thereto, Banc
of America Securities LLC and Credit Suisse First Boston LLC
4.4 Form of Pledge Agreement
4.5 Form of Security Agreement