EXHIBIT 10.11
SECOND AMENDMENT AND WAIVER TO
AMENDED, RESTATED, AND CONSOLIDATED CREDIT AGREEMENT
This SECOND AMENDMENT AND WAIVER TO AMENDED, RESTATED, AND
CONSOLIDATED CREDIT AGREEMENT entered into as of this 24th day of February, 2004
(this "Second Amendment"), is hereby entered into among Davel Financing Company,
L.L.C., a Delaware limited liability company ("Davel"), PhoneTel Technologies,
Inc., an Ohio corporation ("PhoneTel"), Cherokee Communications, Inc., an Ohio
corporation ("Cherokee", and together with Davel and PhoneTel, "Borrowers"),
each of the guarantors under the Amended, Restated, and Consolidated Credit
Agreement that is a signatory hereto (the "Guarantors", and together with
Borrowers, the "Credit Parties"), each of the lenders under the Amended,
Restated, and Consolidated Credit Agreement that is a signatory hereto (the
"Lenders"), and Xxxxx Fargo Foothill, Inc., formerly known as Foothill Capital
Corporation, a California corporation, as agent for the Lenders ("Agent").
RECITALS
WHEREAS, the Credit Parties, the Lenders, and Agent have
entered into that certain Amended, Restated, and Consolidated Credit Agreement
(as amended and otherwise modified from time to time, the "Credit Agreement")
dated as of July 24, 2002;
WHEREAS, as of the date hereof, the outstanding principal
balance of Term Loan A is $57,419,376.91, and the outstanding principal balance
of Term Loan B is $57,009,423.65;
WHEREAS, certain Events of Default have occurred under the
Credit Agreement as set forth on Schedule 1 attached hereto (the "Existing
Defaults");
WHEREAS, the Credit Parties have requested, and the Lenders
have agreed, that Lenders waive the Existing Defaults, but only to the extent
set forth pursuant to the terms and conditions set forth herein; and
WHEREAS, the Credit Parties have requested, and the Lenders
have agreed, that certain terms of the Credit Agreement be amended.
NOW, THEREFORE, for good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, and upon the terms and
conditions set forth herein the Credit Parties, the Lenders and Agent hereby
agree as follows:
SECTION 1. RELATION TO THE CREDIT AGREEMENT; DEFINITIONS.
1.1 RELATION TO CREDIT AGREEMENT. This Second Amendment
constitutes an integral part of the Credit Agreement and shall be deemed to be a
Loan Document for all purposes. Upon the effectiveness of this Second Amendment,
on and after the date hereof each reference in the Credit Agreement to "this
Agreement," "hereunder," "hereof," or words of like import referring to the
Credit Agreement, and each reference in the other Loan Documents to "the Credit
Agreement," "thereunder," "thereof" or words of like import referring to the
Credit Agreement, shall mean and be a reference to the Credit Agreement as
amended hereby.
EXHIBIT 10.11
1.2 CAPITALIZED TERMS. For all purposes of this Second
Amendment, capitalized terms used herein without definition shall have the
meanings specified in the Credit Agreement.
SECTION 2. AMENDMENT TO CREDIT AGREEMENT.
2.1 AMENDMENT TO SECTION 1.01. Section 1.01 of the Credit
Agreement is hereby amended by deleting the defined term "Regulatory Receipts
Account".
2.2 AMENDMENT TO SECTION 2.03(e).
(a) Section 2.03(e) of the Credit Agreement is
hereby amended by deleting it in its entirety and substituting the following
therefor:
(e) Scheduled Repayment of Term Loan A. The
Borrowers shall make monthly payments in respect of principal and
interest on Term Loan A to the Lenders in accordance with the schedule
set forth below. All such payments shall be applied first to interest
and fees owing, with the balance to principal. On the Maturity Date,
the unpaid balance of Term Loan A and all accrued and unpaid interest
shall be due and payable in full.
Payment Date Payment Amount
------------ --------------
July 1, 2003 $ 1,041,666.67
August 1, 2003 $ 1,041,666.67
September 1, 2003 $ 1,041,666.67
October 1, 2003 $ 1,041,666.67
November 1, 2003 $ 1,041,666.67
December 1, 2003 $ 100,000.00
January 1, 2004 $ 100,000.00
February 1, 2004 $ 100,000.00
March 1, 2004 $ 100,000.00
April 1, 2004 $ 100,000.00
May 1, 2004 $ 100,000.00
June 1, 2004 $ 100,000.00
July 1, 2004 $ 100,000.00
August 1, 2004 $ 100,000.00
September 1, 2004 $ 100,000.00
October 1, 2004 $ 100,000.00
November 1, 2004 $ 100,000.00
December 1, 2004 $ 100,000.00
January 1, 2005 $ 100,000.00
February 1, 2005 $ 100,000.00
March 1, 2005 $ 100,000.00
April 1, 2005 $ 100,000.00
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EXHIBIT 10.11
Payment Date Payment Amount
------------ --------------
May 1, 2005 $ 100,000.00
June 1, 2005 $ 100,000.00
July 1, 2005 $ 100,000.00
August 1, 2005 $ 100,000.00
September 1, 2005 $ 100,000.00
October 1, 2005 $ 100,000.00
November 1, 2005 $ 100,000.00
December 1, 2005 $ 100,000.00
2.3 AMENDMENT TO SECTION 2.04(b)(i).
(a) Section 2.04(b)(i) of the Credit Agreement
is hereby amended by deleting it in its entirety and substituting the following
therefor:
(i) Regulatory Receipts. Immediately upon
receipt by a Credit Party or any of its Subsidiaries of any Regulatory
Receipts, the Borrowers promptly shall remit 100% of such Regulatory
Receipts to Agent and Agent shall apply the amounts received as a
prepayment of the Loans; provided that so long as no Default or Event
of Default has occurred and is continuing, the Credit Parties shall be
entitled to deduct amounts paid to AT&T in respect of the "Dial-Around
True-Up" from the total amount of Regulatory Receipts received prior to
remitting same to Agent.
2.4 AMENDMENT TO SECTION 6.01(b)(ii).
(a) Section 6.01(b)(ii) of the Credit Agreement
is hereby amended by deleting it in its entirety and substituting the following
therefor:
(ii) Minimum EBITDA. The Credit Parties shall not
permit EBITDA for any fiscal period set forth below, taken as one
accounting period, to be less than the amount set forth opposite such
period below:
Period EBITDA
------ ----------
4/1/02-3/31/03 2,500,000
7/1/02-6/30/03 2,100,000
10/1/02-9/30/03 5,700,000
1/1/03-12/31/03 8,300,000
1/1/04-3/31/04 150,000
1/1/04-6/30/04 2,500,000
1/1/04-9/30/04 5,700,000
1/1/04-12/31/04 13,000,000
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EXHIBIT 10.11
2.5 AMENDMENT TO SECTION 6.01(b)(iii).
(a) Section 6.01(b)(iii) of the Credit Agreement
is hereby amended by deleting it in its entirety and substituting the following
therefor:
(iii) Minimum Adjusted EBITDA. The Credit Parties
shall not permit Adjusted EBITDA for any fiscal period set forth below,
taken as one accounting period, to be less than the amount set forth
opposite such period below:
Period EBITDA
--------------- -----------
4/1/02-3/31/03 700,000
7/1/02-6/30/03 1,500,000
10/1/02-9/30/03 5,100,000
1/1/03-12/31/03 7,600,000
1/1/04-3/31/04 <1,250,000>
1/1/04-6/30/04 <300,000>
1/1/04-9/30/04 1,200,000
1/1/04-12/31/04 1,500,000
The Credit Parties, Lenders, and Agent agree that the
financial covenants in Sections 6.01(b)(ii) and (iii) for time periods ending
during 2005 will be negotiated by the parties in good faith prior to January 31,
2005, based on the Credit Parties' annual business plan and budget delivered to
Lenders pursuant to Section 6.01(a)(iv) and will be incorporated into this
Agreement by amendment; it being understood and agreed that in no event will the
financial covenant levels for such time periods be less restrictive for the
Credit Parties than those in effect for time periods ending on December 31,
2004. If the Credit Parties, Lenders, and Agent are unable to agree on the
financial covenant levels for time periods ending during 2005 after negotiating
in good faith, the applicable covenant levels shall be those in effect for the
time periods ending on December 31, 2004.
SECTION 3. WAIVER.
3.1 WAIVER OF EXISTING DEFAULTS. Subject to the
satisfaction of (i) all of the conditions precedent contained in Section 5 of
this Second Amendment, and (ii) Section 3.2 below, Lenders hereby waive the
Existing Defaults.
3.2 EFFECTIVENESS OF WAIVER. The waiver provided in
Section 3.1 above shall terminate automatically without further action by Agent
or any Lender in the event that the nature or extent of the Existing Defaults
should prove to be in excess of the nature or extent as disclosed to Lenders
prior to the date hereof.
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EXHIBIT 10.11
SECTION 4. REPRESENTATIONS, WARRANTIES AND ACKNOWLEDGMENTS.
4.1 REPRESENTATIONS.
Each of the Credit Parties hereby represents and
warrants to Agent and Lenders that:
(a) Such Credit Party is a limited liability
company or corporation, as applicable, duly organized and existing and in good
standing under the laws of its jurisdiction of formation and is duly qualified
to do business and in good standing in every jurisdiction in which the nature of
the business done or the property owned by it would make such qualification
necessary; provided that Teleleasing Enterprises, Inc. is not in good standing
in the State of Illinois as of the date hereof due to the rejection of the most
recent annual report filed with the State of Illinois;
(b) Such Credit Party has all requisite power
and authority to own and operate its properties, and to conduct its business as
currently conducted and as currently proposed to be conducted. Such Credit Party
has all requisite power and authority necessary to enter into this Second
Amendment and to perform its respective obligations under this Second Amendment;
(c) Such Credit Party has taken all limited
liability company or corporate, as applicable, action necessary to be taken by
it to authorize the execution and delivery of this Second Amendment. This Second
Amendment has been duly executed and delivered by such Credit Party and
constitutes its legal, valid and binding obligations, enforceable against it in
accordance with its terms;
(d) After giving effect to the amendments and
waivers herein, no event has occurred and no condition exists which constitutes
a Default or an Event of Default under the Credit Agreement or the other Loan
Documents; and
(e) The Credit Agreement and all other Loan
Documents and all representations, warranties, terms and conditions therein
remain in full force and effect, and such Credit Party hereby confirms and
ratifies each of the provisions of the Credit Agreement and the other Loan
Documents applicable to it.
SECTION 5. CONDITIONS TO EFFECTIVENESS.
5.1 CONDITIONS TO EFFECTIVENESS. The amendments contained
in Section 2 above shall become effective as of the date hereof when, and only
when duly executed counterparts of this Second Amendment have been executed and
delivered by the Lenders, Agent and each Credit Party.
SECTION 6. MISCELLANEOUS.
6.1 CROSS-REFERENCES. References in this Second Amendment
to any Section (or "Section.") are, unless otherwise specified, to such Section
(or "Section") of this Second Amendment.
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EXHIBIT 10.11
6.2 SUCCESSORS AND ASSIGNS. This Second Amendment shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.
6.3 COUNTERPARTS. This Second Amendment may be executed
by one or more of the parties hereto on any number of separate counterparts,
each of which shall be deemed an original and all of which, taken together,
shall be deemed to constitute one and the same instrument. Delivery of an
executed counterpart of this Second Amendment by facsimile transmission shall be
as effective as delivery of an originally executed counterpart hereof.
6.4 GOVERNING LAW. THIS SECOND AMENDMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF CALIFORNIA,
WITHOUT REGARD TO ANY CONFLICT OF LAWS PRINCIPLES.
6.5 OUTSTANDING INDEBTEDNESS.
(a) Each of the Credit Parties hereby
acknowledges and agrees that as of the date hereof, the aggregate outstanding
principal amount due under the Credit Agreement is $114,428,800.56 and that such
principal amount is payable pursuant to the Credit Agreement as amended hereby
without defense, offset, withholding, counterclaim or deduction of any kind.
(b) Each of the Credit Parties, each of their
respective successors-in-title, legal representatives and assignees and, to the
extent the same is claimed by right of, through or under such Credit Party, for
its past, present and future employees, agents, representatives, officers,
directors, shareholders, and trustees, does hereby forever remise, release and
discharge each of the Lenders and Agent, and each of their respective
successors-in-title, legal representatives and assignees, past, present and
future officers, directors, shareholders, trustees, agents, employees,
consultants, experts, advisors, attorneys and other professionals and all other
persons and entities to whom such Lender or Agent would be liable if such
persons or entities were found to be liable to the Credit Parties, or any of
them (collectively hereinafter the "Lender Parties"), from any and all manner of
action and actions, cause and causes of action, claims, charges, demands,
counterclaims, suits, debts, dues, sums of money, accounts, reckonings, bonds,
bills, specialties, covenants, contracts, controversies, damages, judgments,
expenses, executions, liens, claims of liens, claims of costs, penalties,
attorneys' fees, or any other compensation, recovery or relief on account of any
liability, obligation, demand or cause of action of whatever nature relating to,
arising out of or in connection with the Credit Agreement or any other Loan
Document, including but not limited to, acts, omissions to act, actions,
negotiations, discussions and events resulting in the finalization and execution
of this Second Amendment, as, among and between the Credit Parties and the
Lender Parties, such claims whether now accrued and whether now known or
hereafter discovered, from the beginning of time through the date hereof.
Each Credit Party hereby knowingly, voluntarily, intentionally
and expressly waives and relinquishes any and all rights and benefits that it
may have under Section 1542 of the California Civil Code, or any other similar
provision of any other jurisdiction, as against the Lender Parties. Section 1542
of the Civil Code of California provides:
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EXHIBIT 10.11
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH
THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME
OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
Each Credit Party hereby acknowledges that the foregoing
waiver of the Section 1542 of the California Civil Code was separately bargained
for. Each Credit Party knowingly, voluntarily, intentionally and expressly
waives any and all rights and benefits conferred by Section 1542, or by any law
of any state or territory of the United States or any foreign country or
principle of common law that is similar or analogous to Section 1542 and agrees
and acknowledges that this waiver is an essential term of this Second Amendment,
without which the consideration would not have been given by the Lenders to the
Credit Parties.
6.6 RATIFICATION. Except as expressly amended or waived
herein, all of the representations, warranties, terms, covenants and conditions
of the Credit Agreement and the other Loan Documents shall remain unamended and
unwaived and shall continue to be, and shall remain, in full force and effect in
accordance with their respective terms. The amendments set forth herein shall be
limited precisely as provided for herein to the provisions expressly amended
herein and shall not be deemed to be a waiver of, amendment of, consent to or
modification of any other term or provision of any other document or of any
transaction or further action on the part of any Credit Party which would
require the consent of the Lenders under the Credit Agreement.
[Remainder of page intentionally left blank.]
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EXHIBIT 10.11
IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment to be executed and delivered as of the date first above written.
BORROWERS: DAVEL FINANCING COMPANY, L.L.C.,
a Delaware limited liability company
By: DAVEL COMMUNICATIONS, INC.,
its sole managing member
By: /s/ XXXXXX XXXXXXXX
-------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Chief Financial Officer
PHONETEL TECHNOLOGIES, INC.,
an Ohio corporation
By: /s/ XXXXXX XXXXXXXX
-------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Chief Financial Officer
CHEROKEE COMMUNICATIONS, INC.,
a Texas corporation
By: /s/ XXXXXX XXXXXXXX
-------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Chief Financial Officer
PARENT GUARANTOR: DAVEL COMMUNICATIONS, INC.,
a Delaware corporation
By: /s/ XXXXXX XXXXXXXX
-------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Chief Financial Officer
SUBSIDIARY GUARANTORS: DAVEL COMMUNICATIONS GROUP, INC.,
an Illinois corporation
ADTEC COMMUNICATIONS, INC.,
a Florida corporation
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EXHIBIT 10.11
CENTRAL PAYPHONE SERVICES, INC.,
a Georgia corporation
COMMUNICATIONS CENTRAL, INC.,
a Georgia corporation
COMMUNICATIONS CENTRAL OF GEORGIA, INC.,
a Georgia corporation
DAVEL MEDIA, INC.,
a Delaware corporation
DAVEL MEXICO, LTD.,
an Illinois corporation
DAVELTEL, INC.,
an Illinois corporation
INTERSTATE COMMUNICATIONS, INC.,
a Georgia corporation
INVISION TELECOM, INC.,
a Georgia corporation
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EXHIBIT 10.11
PEOPLES ACQUISITION CORPORATION,
a Pennsylvania corporation
PEOPLES COLLECTORS, INC.,
a Delaware corporation
PEOPLES TELEPHONE COMPANY, INC.,
a New York corporation
PEOPLES TELEPHONE COMPANY, INC.,
a New Hampshire corporation
PTC CELLULAR, INC.,
a Delaware corporation
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EXHIBIT 10.11
PTC SECURITY SYSTEMS, INC.,
a Florida corporation
SILVERADO COMMUNICATIONS CORP.,
a Colorado corporation
TELALEASING ENTERPRISES, INC.,
an Illinois corporation
T.R.C.A., INC.,
an Illinois corporation
By: /s/ XXXXXX XXXXXXXX
----------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Chief Financial Officer
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EXHIBIT 10.11
AGENT: XXXXX FARGO FOOTHILL, INC.,
as Agent and as a Lender
By: /s/ XXX XXX
----------------------------------
Name: Xxx Xxx
Title: Vice President
LENDERS: FOOTHILL PARTNERS III, L.P. as a Lender
By: /s/ XXXXXX X. XXXXXX
----------------------------------
Name: Xxxxxx Xxxxxx
Title: Managing General Partner
ABLECO FINANCE LLC,
as a Lender and agent for its affiliate
assigns
By: /s/ XXXXX XXXXX
----------------------------------
Name: Xxxxx Xxxxx
Title: Senior Vice President &
Chief Credit Officer
CERBERUS PARTNERS, L.P., as a Lender
By: Cerberus Associates, LLC, as General
Partner
By: /s/ XXXXX XXXXX
--------------------------------
Name: Xxxxx Xxxxx
Title: Managing Director
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EXHIBIT 10.11
ARK CLO 2000-1, LIMITED, as a Lender
By: Patriarch Partners, LLC
its Collateral Manager
By: /s/ XXXX XXXXXX
--------------------------------
Name: Xxxx Xxxxxx
Title: Manager
PNC BANK, NATIONAL ASSOCIATION,
as a Lender
By: /s/ XXXXXXX X. XXXXXXX XX.
----------------------------------
Name: Xxxxxxx X. Xxxxxxx Xx.
Title: Vice President
U.S. BANK NATIONAL ASSOCIATION,
as a Lender
By: /s/ XXXXX X. XXXXX
----------------------------------
Name: Xxxxx X. Xxxxx
Title: Assistant Vice President
BNP PARIBAS, as a Lender
By: /s/ XXXXX XXXXXX /s/ XXXXXXX XXXXXXXX
----------------------------------------
Name: Xxxxx Xxxxxx Xxxxxxx Xxxxxxxx
Title: Director Vice President
XXXXXX XXXXXXX PRIME INCOME TRUST,
as a Lender
By: /s/ XXXXX XXXX
----------------------------------
Name: Xxxxx Xxxx
Title: Vice President
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EXHIBIT 10.11
AVENUE SPECIAL SITUATIONS FUND II, LP,
as a Lender
By: /s/ XXXXX X. XXXXXXX
----------------------------------
Name: Xxxxx X. Xxxxxxx
Title:
By: Avenue Capital Partners II, LLC, General
Partner
By: GL Partners II, LLC, Managing
Member of the General Partner
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EXHIBIT 10.11
SCHEDULE 1
Events of Default
THE FOLLOWING EVENTS OF DEFAULT HAVE OCCURRED UNDER THE CREDIT AGREEMENT:
Under Section 2.03(e) of the Credit Agreement for failure to
make the payment of $1,041,666.67 under Term Loan A due on July 1, 2003.
Under Section 2.03(e) of the Credit Agreement for failure to
make the payment of $1,041,666.67 under Term Loan A due on August 1, 2003.
Under Section 2.03(e) of the Credit Agreement for failure to
make the payment of $1,041,666.67 under Term Loan A due on September 1, 2003.
Under Section 2.03(e) of the Credit Agreement for failure to
make the payment of $1,041,666.67 under Term Loan A due on October 1, 2003.
Under Section 2.03(e) of the Credit Agreement for failure to
make the payment of $1,041,666.67 under Term Loan A due on November 1, 2003.
Under Section 6.01(b)(iii) of the Credit Agreement for failure
to achieve minimum Adjusted EBITDA of at least $1,500,000 for the period
7/1/02-6/30/03.
Under Section 6.01(b)(iii) of the Credit Agreement for failure
to achieve minimum Adjusted EBITDA of at least $5,100,000 for the period
10/1/02-9/30/03.
Under Section 6.01(b)(iii) of the Credit Agreement for failure
to achieve minimum Adjusted EBITDA of at least $7,600,000 for the period
1/1/03-12/31/03.
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