Exhibit 10.8
CREDIT AGREEMENT
AMONG
MOBILEPRO CORP.,
DAVEL ACQUISITION CORP.
-AND-
AIRLIE OPPORTUNITY MASTER FUND, LTD.
DATED AS OF NOVEMBER 15, 2004
$15,200,000
TABLE OF CONTENTS
SECTION 1 THE LOAN............................................................................................... 1
1.01 Loan ....................................................................................................... 1
1.02 Closing..................................................................................................... 1
1.03 The Note and Credit and Security Documents.................................................................. 2
1.04 Interest.................................................................................................... 2
1.05 Collateral.................................................................................................. 3
SECTION 2 FEES AND WARRANTS...................................................................................... 4
2.01 Closing Fees................................................................................................ 4
2.02 Due Diligence Fee........................................................................................... 4
2.03 [Intentionally Omitted]..................................................................................... 4
2.04 Early Termination Fee....................................................................................... 4
2.05 Loan Extension Fee and Cash Interest Prepayment............................................................. 5
2.06 Warrants.................................................................................................... 5
SECTION 3 PREPAYMENT, PREPAYMENT PREMIUM AND OTHER COMPENSATION.................................................. 6
3.01 Voluntary Prepayments....................................................................................... 6
3.02 Prepayment Premium.......................................................................................... 6
3.03 Method and Place of Payment................................................................................. 6
3.04 Net Payments................................................................................................ 7
3.05 Increased Costs and Reduced Return.......................................................................... 7
3.06 Joint and Several Liability of the Borrowers and Davel Credit Parties....................................... 8
SECTION 4 CONDITIONS PRECEDENT TO LOAN........................................................................... 9
4.01 Conditions Precedent to Effectiveness....................................................................... 9
SECTION 5 REPRESENTATIONS, WARRANTIES AND AGREEMENTS ........................................................... 12
5.01 Status..................................................................................................... 13
5.02 Power and Authority........................................................................................ 13
5.03 No Violation .............................................................................................. 13
5.04 Litigation................................................................................................. 13
5.05 Margin Regulations......................................................................................... 13
5.06 Governmental Approvals..................................................................................... 14
5,07 Investment Company Act..................................................................................... 14
5.08 Public Utility Holding Company Act......................................................................... 14
5.09 True and Complete Disclosure............................................................................... 14
5.10 Financial Condition; Financial Statements.................................................................. 14
5.11 Security Interests......................................................................................... 15
5.12 Material Contracts and Davel Acquisition Documents......................................................... 16
5.13 Tax Returns and Payments................................................................................... 16
5.14 Compliance with ERISA...................................................................................... 16
5.15 Subsidiaries............................................................................................... 17
5.16 Intellectual Property...................................................................................... 17
5.17 Environmental Matters...................................................................................... 17
5.18 Properties ................................................................................................ 18
5.19 Capitalization............................................................................................. 18
5.20 Labor Relations............................................................................................ 18
5.21 Compliance with Statutes, etc.............................................................................. 19
5.22 Permits, etc............................................................................................... 19
5.23 [Intentionally Omitted].................................................................................... 19
5.24 Taxes, Etc................................................................................................. 19
5.25 Regulations T, U and X..................................................................................... 19
5.26 Adverse Agreements, Etc.................................................................................... 19
5.27 Full Disclosure............................................................................................ 19
5.28 Operative Lease Obligations................................................................................ 20
5.29 Solvency................................................................................................... 20
5.30 Location of Bank Accounts.................................................................................. 20
5.31 Customers and Suppliers.................................................................................... 20
5.32 No Bankruptcy Filing....................................................................................... 20
5.33 Existence.................................................................................................. 20
5.34 Name; Jurisdiction of Organization; Organizational ID Number; Chief Place of Business; Chief Executive
Office; FEIN............................................................................................... 20
5.35 Patents and Tradenames..................................................................................... 20
5.36 Locations of Collateral.................................................................................... 21
5.37 Security Interests......................................................................................... 21
5.38 The SEDA................................................................................................... 21
5.39 Schedules.................................................................................................. 21
5.40 Representations and Warranties in Documents; No Default.................................................... 21
SECTION 6 AFFIRMATIVE COVENANTS................................................................................. 21
6.01 Information Covenants...................................................................................... 21
6.02 Books, Records and Inspections............................................................................. 23
6.03 Insurance.................................................................................................. 23
6.04 Payment of Taxes........................................................................................... 24
6.05 Corporate Franchises....................................................................................... 24
6.06 Compliance with Statutes, etc.............................................................................. 24
6.07 ERISA...................................................................................................... 24
6.08 Good Repair................................................................................................ 25
6.09 Maintenance of Fiscal Year and Fiscal Quarters............................................................. 25
6.10 Additional Security; Further Assurances.................................................................... 25
6.11 Compliance with Environmental Laws......................................................................... 26
6.12 Use of Proceeds............................................................................................ 26
6.13 Locations, Etc............................................................................................. 27
6.14 Payment and Allocation of Extraordinary Receipts........................................................... 27
6.15 Master Depositary Account.................................................................................. 27
6.16 The Registrable Securities................................................................................. 28
6.17 Joinder Agreement.......................................................................................... 28
6.18 Other Matters.............................................................................................. 29
6.19 Post Closing Obligations................................................................................... 29
SECTION 7 NEGATIVE COVENANTS.................................................................................... 29
7.01 Changes in Business........................................................................................ 29
7.02 Consolidation, Merger, Sale or Purchase of Assets, etc..................................................... 29
7.03 Liens...................................................................................................... 31
7.04 Indebtedness............................................................................................... 32
7.05 Limitation of Total Indebtedness and Capital Expenditures.................................................. 33
7.06 Advances, Investments and Loans............................................................................ 33
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7.07 Limitation on Creation of Subsidiaries..................................................................... 34
7.08 Prepayments; Modifications................................................................................. 35
7.09 Dividends and Distributions, etc........................................................................... 35
7.10 Transactions with Affiliates............................................................................... 36
7.11 Consolidated EBITDA of Davel Group......................................................................... 36
7.12 Tangible Net Worth......................................................................................... 37
7.13 Minimum Consolidated EBITDA of MobilePro................................................................... 37
SECTION 8 EVENTS OF DEFAULT..................................................................................... 37
8.01 Payments................................................................................................... 37
8.02 Representations, etc....................................................................................... 37
8.03 Covenants.................................................................................................. 38
8.04 Default under Other Agreements............................................................................. 38
8.05 Bankruptcy, etc............................................................................................ 38
8.06 ERISA...................................................................................................... 38
8.07 Credit and Security Documents.............................................................................. 39
8.08 Guaranty................................................................................................... 39
8.09 Judgments.................................................................................................. 39
8.10 Litigation................................................................................................. 39
8.11 Change of Control.......................................................................................... 39
8.12 Change in Management....................................................................................... 39
SECTION 9. DEFINITIONS.......................................................................................... 40
SECTION 10. MISCELLANEOUS ...................................................................................... 49
10.01 Payment of Expenses, etc.................................................................................. 49
10.02 Right of Setoff........................................................................................... 50
10.03 Notices................................................................................................... 50
10.04 Benefit of Agreement...................................................................................... 50
10.05 No Waiver; Remedies Cumulative............................................................................ 51
10.06 Governing Law; Submission to Jurisdiction; Venue; Waiver of Jury Trial.................................... 51
10.07 Counterparts.............................................................................................. 52
10.08 Effectiveness............................................................................................. 52
10.09 Headings Descriptive...................................................................................... 52
10.10 Amendment or Waiver....................................................................................... 52
10.11 Survival.................................................................................................. 52
10.12 Domicile of Loan.......................................................................................... 52
10.13 Confidentiality........................................................................................... 52
10.14 Insurance................................................................................................. 53
10.15 Construction.............................................................................................. 53
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EXHIBITS:
EXHIBIT A Schedule of Additional Davel Credit Parties
EXHIBIT B Form of Note
EXHIBIT C Form of MobilePro Pledge Agreement
EXHIBIT D Form of Purchaser Pledge Agreement
EXHIBIT E Form of Collateral Debt and Security Assignment Agreement
EXHIBIT F-1 Form of Existing MobilePro Subsidiaries Guaranty
EXHIBIT F-2 Form of Borrowers Security Agreement
EXHIBIT G Form of Davel Credit Parties Guaranty
EXHIBIT H Form of Davel Credit Parties Security Agreement
EXHIBIT I Form of Intellectual Property Assignment Agreement
EXHIBIT J Form of Intercreditor Agreement
EXHIBIT K Form of Cornell Assignment Agreement
EXHIBIT L Form of Warrant
EXHIBIT M Form of Forbearance Agreement
EXHIBIT N Form of Legal Opinion
EXHIBIT O Form of Registration Rights Agreement
EXHIBIT P Form of Depositary Account Agreement
EXHIBIT Q Form of Joinder Agreement
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT ("AGREEMENT" or "CREDIT AGREEMENT") dated as of
November 15, 2004, is made and entered into by and among MOBILEPRO CORP., a
Delaware corporation ("MOBILEPRO"); DAVEL ACQUISITION CORP., a Delaware
corporation (the "PURCHASER") and AIRLIE OPPORTUNITY MASTER FUND, LTD., a Cayman
Islands company ("AIRLIE" or the "LENDER"). MobilePro and the Purchaser are
hereinafter collectively referred to as the "BORROWERS." Unless otherwise
defined herein, all capitalized terms used herein and defined in Section 9 are
used herein as so defined. Pursuant to the Joinder Agreement to be executed
immediately following the Closing Date, this Agreement shall also applicable to
and binding upon each of DAVEL COMMUNICATIONS, INC., a Delaware corporation
("DAVEL"); DAVEL FINANCING COMPANY LLC, a Delaware limited liability company
("DAVEL FINANCING"); PHONETEL TECHNOLOGIES, INC., an Ohio corporation
("PHONETEL"); CHEROKEE COMMUNICATIONS, INC., a Texas corporation ("CHEROKEE").
Davel, Davel Financing, Phonetel, Cherokee and each direct and indirect domestic
Subsidiary of Davel, Davel Financing, Phonetel and Cherokee listed on EXHIBIT A
annexed hereto, are hereinafter individually referred to as a "DAVEL CREDIT
PARTY" and collectively referred to as the "DAVEL CREDIT PARTIES."
WITNESSETH:
WHEREAS, Foothill Capital Corporation ("FOOTHILL"), as agent and the other
lenders (collectively, with Foothill, the "SELLING LENDERS") and the Davel
Credit Parties are parties to (a) an amended, restated and consolidated credit
agreement, dated as of July 24, 2004, as amended on March 31, 2003, February 24,
2004 and August 11, 2004 (the "SELLING LENDERS CREDIT AGREEMENT"), (b) an
amended, restated and consolidated security agreement, dated as of July 24, 2002
among (the "SELLING LENDERS SECURITY AGREEMENT"), and (c) other documents and
instruments associated with the Selling Lenders Credit Agreement and Selling
Lenders Security Agreement (together with the Selling Lenders Credit Agreement
and Selling Lenders Security Agreement, the "SELLING LENDERS LOAN DOCUMENTS");
and
WHEREAS, the Selling Lenders own shares of the common stock, $0.01 par value per
share (the "DAVEL COMMON STOCK"); which such shares of Davel Common Stock (the
"DAVEL SUBJECT SHARES") represents 95.2% of the issued and outstanding shares of
Davel Common Stock; and
WHEREAS, the Purchaser, a wholly-owned Subsidiary of MobilePro, wishes (i) to
purchase from the Selling Lenders all of the obligations of the Davel Credit
Parties that are owed to the Selling Lenders under the Selling Lenders Loan
Documents (the "DAVEL CREDIT PARTIES DEBT"); (ii) to purchase from the Selling
Lenders the "CERBERUS SUBORDINATED DEBT" (as defined in Section 9 hereof); and
(iii) subject to the agreement among MobilePro, the Davel Credit Parties and the
Purchaser, to be assigned all of the Davel Subject Shares; and
WHEREAS, the Borrowers have requested that the Lender make a loan to the
Borrowers as provided by this Agreement in accordance with the terms and
provisions hereof with a view to facilitating the Purchaser's acquisition of the
Davel Credit Parties Debt, the Cerberus Subordinated Debt and the Davel Subject
Shares; and
NOW, THEREFORE, in consideration of the promises and of the mutual covenants,
representations, warranties and agreements contained herein, the parties hereto
agree as follows:
SECTION 1. THE LOAN.
1.01 Loan. Subject to and upon the terms and conditions herein set forth, the
Lender shall make a term loan to the Borrowers, in an aggregate amount of
$15,200,000 (the "LOAN"). On the Closing Date, the principal amount of the Loan
shall be made by the Lender hereunder and shall accrue interest, at the Interest
Rate described in Section 1.04 below, from the "Closing Date" (as hereinafter
defined). Once repaid in whole or in part, the Loan or any part thereof repaid
hereunder may not be reborrowed.
1.02 Closing. No later than 3:00 P.M. (New York time) on the Closing Date, the
Lender will make available the amount of the Loan in the manner provided below.
All such amounts shall be made available to the Borrowers in
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U.S. Dollars and by wire transfer of immediately available funds to such
accounts as shall be requested by the Borrowers and approved by the Lender,
pursuant to a mutually acceptable pay proceeds instruction letter (the "PAY
PROCEEDS LETTER"). Subject to satisfaction of all of the conditions precedent to
the Loan specified in Section 4 of this Credit Agreement, the Lender shall make
the Loan to the Borrowers on the Closing Date referred to in Section 4.01 below;
being a date that shall be on the same day and immediately following the date on
which the Purchaser shall have consummated the purchase of the Davel Credit
Parties Debt, the Cerberus Subordinated Debt and the Davel Subject Shares
pursuant to the terms of the Davel Acquisition Documents.
1.03 The Note and Credit and Security Documents.
(a) The principal amount of the Loan made to the Borrowers by the
Lender and all accrued and unpaid interest thereon shall repaid in two
installments: (i) as to $2,200,000 (the "INITIAL INSTALLMENT"), on the earlier
of (A) receipt by the Borrowers or any of the Davel Credit Parties of the cash
portion of the "MCI/DeutcheTelcom Payment" (as defined), or (B) November 30,
2004, and (ii) as to the balance of $13,000,000 (the "FINAL INSTALLMENT"), on
November 15, 2005 (the "MATURITY DATE"). The Maturity Date for payment of the
$13,000,000 Final Installment shall be subject to Borrowers right to extend such
Maturity Date to May 15, 2006, as permitted in Section 2.05 hereof, after
payment of the Loan Extension Fee and subject to Borrowers' compliance with all
applicable terms and conditions set forth therein. The Loan shall be evidenced
by the term promissory note of the Borrowers, substantially in the form of
EXHIBIT B annexed hereto and made a part hereof (the "NOTE"). The due date for
payment of the Initial Installment may not be extended by the Company for any
reason.
(b) All of the Obligations of the Borrowers to the Lender shall be
evidenced by the Note, this Agreement and the other Credit and Security
Documents executed and delivered by the Borrowers and the other Davel Credit
Parties on the Closing Date.
1.04 Interest. The Loan shall bear interest from the Closing Date until the
Maturity Date of the Note (whether by acceleration or otherwise) at a rate per
annum equal to the Cash Interest Rate and the PIK Interest Rate which shall
equal 23% per annum (the "TOTAL INTEREST RATE"). Interest on the Loan shall be
payable as set forth in this Section 1.04 below.
(a) Cash Interest. The Note shall bear interest, payable by the
Borrowers only in cash (the "CASH INTEREST") at the rate of 15% per annum (the
"CASH INTEREST RATE"), payable quarterly in an amount equal to 3.75% per quarter
on the total outstanding principal amount of the Note (inclusive of accrued PIK
Interest referred to in Section 1.04(b) below); provided, that in the event of a
partial repayment of the Note prior to any Interest Payment Date, the interest
payment due on the next Interest Payment Date shall be calculated on a 360 day
year basis based on the average daily outstanding balance of the Note during
such quarterly period. Such Cash Interest shall be paid on each of February 15,
2005, May 15, 2005, August 15, 2005 and November 15, 2005, and (if the Maturity
Date under the Note shall be extended as provided herein and in the Note) on the
15th day of each subsequent February, May, August and November thereafter, until
the Note and all other Obligations to the Lender shall have been paid in full
(each an "INTEREST PAYMENT DATE").
(b) PIK Interest. In addition to the Cash Interest, on each Interest
Payment Date, interest at the rate of 8% per annum compounded quarterly (the
"PIK INTEREST") shall accrue and be added to the outstanding principal amount of
the Loan and the Note on each Interest Payment Date in an amount equal to 2% per
quarter on all outstanding principal amount of the Note (inclusive of accrued
PIK Interest); provided, that in the event of a partial repayment of the Note
prior to any Interest Payment Date, the interest payment due on the next
Interest Payment Date shall be calculated on a 360 day year basis based on the
average daily outstanding balance of the Note during such quarterly period.
Except as otherwise provided in Section 2.05 hereof, all PIK Interest shall be
paid in full in cash on the date of payment in full of the Note and all other
Obligations to the Lender, whether on the Maturity Date or Final Maturity Date
of the Loan, in connection with the prepayment of all Obligations, or as a
result of the occurrence of an Event of Default, as hereinafter provided.
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1.05 Collateral. As collateral security to secure payment and performance of all
of the Obligations of the Borrowers and the other Davel Credit Parties to the
Lender, on the Closing Date, the Borrowers, the "Existing MobilePro
Subsidiaries" (hereinafter defined) and the other Davel Credit Parties shall
grant to the Lender (and any successor-in-interest, as provided in the
Intercreditor Agreement, described below), as collateral agent, for (i) itself,
(ii) any subsequent Lender under the Loan Documents, and (iii) Cornell Capital
Partners, L.P. ("CORNELL CAPITAL"), a first priority Lien and security interest
in and to all of the assets and securities described below (the "COLLATERAL");
provided, however, that, when used in this Credit Agreement and in any of the
"Credit and Security Documents" described below in this Section 1.05, the term
"Collateral" shall NOT mean or include those specific Liens and security
interests securing the obligations set forth in paragraphs one through six on
Schedule 5.11 annexed hereto and made a part hereof (the "EXCLUDED COLLATERAL"):
(a) MobilePro shall (i) grant to the Lender, as collateral agent, a
first priority Lien and security interest, and pledge directly to the Lender
100% of the issued and outstanding shares of capital stock of the Purchaser; and
(ii) cause each of MobilePro's Subsidiaries to grant to the Lender, as
collateral agent, a first priority Lien and security interest, and pledge to the
Lender, 100% of the issued and outstanding shares of capital stock of each of
the following direct and indirect Subsidiaries of MobilePro: (A) DFW Internet
Services, Inc.; (B) The River Internet Access Co.; (C) WorldTrade Network, Inc.;
(D) C.L.Y.K., Inc., d/b/a Affinity Telecom; (E) CloseCall America, Inc., (F)
Ticon net, Inc.; (G) NeoReach, Inc.; (H) Internet Express, Inc.; (I) ShreveNet,
Inc.; (J) Clover Computer Corporation; (K) US One Acquisition Corp. d/b/a US1
Telecommunications, Inc., and (L) August-Net Services, Inc. (collectively, the
"EXISTING MOBILEPRO SUBSIDIARIES"), all pursuant to the terms and conditions of
the pledge agreement in the form of EXHIBIT C annexed hereto and made a part
hereof (the "MOBILEPRO PLEDGE AGREEMENT");
(b) The Purchaser shall grant to the Lender, as collateral agent, a
first priority Lien and security interest, and pledge direct to the Lender (i)
all of the Davel Subject Shares purchased from the Selling Lenders pursuant to
the Davel Acquisition Documents, (ii) all additional shares of Davel Common
Stock that the Purchaser, MobilePro or any of their Affiliates may subsequently
acquire, by merger, tender offer, open market purchases or otherwise, and (iii)
all of the shares of capital stock of each of the Davel Credit Parties, now or
hereafter issued or acquired, all pursuant to the terms and conditions of the
pledge agreement in the form of EXHIBIT D annexed hereto and made a part hereof
(the "PURCHASER PLEDGE AGREEMENT");
(c) The Purchaser shall collaterally assign to the Lender, with the
consent and approval of each of the Selling Lenders, all of the Davel Credit
Parties Debt and the Cerberus Subordinated Debt to be acquired from the Selling
Lenders under the Davel Acquisition Documents, including all of the rights of
the Selling Lenders under the Selling Lenders Credit Agreement, the Selling
Lenders Security Agreement and other Selling Lenders Loan Documents, all
pursuant to the Collateral Assignment of Debt Obligations, Credit Agreement and
Security Agreement annexed hereto as EXHIBIT E hereto and made a part hereof
(the "COLLATERAL DEBT AND SECURITY ASSIGNMENT Agreement");
(d) Each of the Existing MobilePro Subsidiaries shall unconditionally
and irrevocably guaranty (i) to Cornell Capital all of the Cornell Capital
Obligations, and (ii) to the Lenders all of the Obligations of the Borrowers
under this Credit Agreement and the other Loan Documents, pursuant to the
guaranty in the form of EXHIBIT F-1 annexed hereto and made a part hereof (the
"EXISTING MOBILEPRO SUBSIDIARIES GUARANTY");
(e) In order to: (i) secure their Obligations under this Credit
Agreement and the Cornell Capital Obligations, the Borrowers shall grant to the
Lender, as collateral agent, a first priority Lien and security interest on all
of the assets and properties of MobilePro; and (ii) secure their obligations and
covenants under the Existing MobilePro Subsidiaries Guaranty, each of the
Existing MobilePro Subsidiaries shall grant to the Lender, as collateral agent,
a first priority Lien and security interest on all of the assets and properties
of such Existing MobilePro Subsidiaries; all in accordance with the security
agreement between Lender, Cornell Capital, the Borrowers and the Existing
MobilePro Subsidiaries, in the form of EXHIBIT F-2 annexed hereto and made a
part hereof (the "BORROWERS SECURITY AGREEMENT");
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(f) In consideration for the Lender entering into the "DAVEL CREDIT
PARTIES FORBEARANCE AGREEMENT" (hereinafter defined), each of the Davel Credit
Parties shall unconditionally and irrevocably guaranty all of the Obligations of
the Borrowers pursuant to the guarantees in the form of EXHIBIT G annexed hereto
and made a part hereof (the "DAVEL CREDIT PARTIES GUARANTY");
(g) To secure the Obligations of the Davel Credit Parties under the
Davel Credit Parties Guaranty, the Davel Credit Parties shall grant to the
Lender, as collateral agent, a first priority Lien and security interest on all
of the assets and properties of the Davel Credit Parties, all in accordance with
the security agreement between Lender and the Borrowers, in the form of EXHIBIT
H annexed hereto and made a part hereof (the "DAVEL CREDIT PARTIES SECURITY
AGREEMENT");
(h) The Borrowers shall collaterally assign to the Lender, as
collateral agent, individually for itself, any subsequent Lender under the Loan
Documents and for Cornell Capital, all of the United States and foreign Letters
Patent, patent applications, trademarks and other intellectual property of
Borrower and each of its direct and indirect Subsidiaries, including all
licenses in respect thereof, all in accordance with the Intellectual Property
Collateral Assignment Agreement in the form of EXHIBIT I annexed hereto and made
a part hereof (the "INTELLECTUAL PROPERTY ASSIGNMENT AGREEMENT");
(i) The Lender shall enter into an intercreditor and collateral agency
agreement with Cornell Capital and the Borrowers, all in accordance with the
intercreditor agreement in the form of EXHIBIT J annexed hereto and made a part
hereof (the "INTERCREDITOR AGREEMENT"); and
(j) MobilePro shall assign to the Lender all of MobilePro's rights to
request and receive "Advances" from Cornell Capital, pursuant to the Standby
Equity Distribution Agreement, dated May 13, 2004, between MobilePro and Cornell
Capital (the "CORNELL EQUITY AGREEMENT"), subject to the terms and conditions
set forth in the form of Assignment Agreement annexed hereto as EXHIBIT K and
made a part hereof (the "CORNELL ASSIGNMENT AGREEMENT").
All of the foregoing agreements and instruments referred to in Sections 1.05(a)
through (i) above, are collectively referred to herein as the "CREDIT AND
SECURITY DOCUMENTS."
SECTION 2. FEES AND WARRANTS.
2.01 Closing Fees. On the Closing Date, the Borrowers shall pay to the Lender
and/or its designees a closing fee of $333,333 (the "CLOSING FEE"), which
Closing Fee shall be deemed fully earned when paid.
2.02 Due Diligence Fee. MobilePro shall pay to the Lender a $110,000 due
diligence fee (the "DUE DILIGENCE FEE"), to reimburse the Lender for fees and
costs incurred in connection with certain of the legal, documentation and
financial due diligence expenses of the Lender in connection with the
transactions contemplated hereby, which Due Diligence Fee shall be deemed fully
earned. MobilePro has paid to Lender $100,000 of such Due Diligence Fee; receipt
of which is hereby acknowledged by Lender. In addition, to payment of the
$10,000 balance of such Due Diligence Fee, on the Closing Date, the Borrowers
shall reimburse the Lender for all of its actual out-of-pocket costs and
expenses paid or payable in connection with obtaining lien searches and filing
the Uniform Commercial Code ("UCC") financing statements contemplated by this
Agreement.
2.03 [Intentionally omitted].
2.04 Early Termination Fee. If this Agreement is terminated and all Obligations
are paid in full at any time prior the Maturity Date for any reason, including,
without limitation, (A) as a result of the occurrence of an Event of Default,
(B) foreclosure and sale of Collateral, (C) sale of the Collateral in any
Insolvency Proceeding, or (D) restructure, reorganization, or compromise of the
Obligations by the confirmation of a plan of reorganization or any other plan of
compromise, restructure, or arrangement in any Insolvency Proceeding, then the
Borrowers shall
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pay the Prepayment Premium to the Lender contemplated by Section 3.02 below, as
though such payment in full were a Voluntary Prepayment subject to the
provisions of Section 3.02.
2.05 Loan Extension Fee and Cash Interest Prepayment. In the event that: (i) no
Event of Default under this Credit Agreement, any Credit and Security Document
or other Loan Document shall have occurred, and (ii) the Borrowers notify the
Lender in writing on a date that shall be not earlier than August 15, 2005 and
not later than September 15, 2005 of their intention to extend the Maturity Date
of the Final Installment (the "EXTENSION NOTICE"), such Maturity Date of the
Loan and the Principal Amount of the Note, together with all accrued and unpaid
PIK Interest thereon, may be extended to a date specified in the Extension
Notice which date shall be not later than May 15, 2006 (the FINAL MATURITY
DATE"); PROVIDED, THAT, on November 15, 2005 (the Business Day immediately
following the November 15, 2005 Maturity Date), the Borrowers shall pay to the
Lender either: (a) $246,795; or (b) such lesser amount as shall represent one
and one-half percent (1.5%) of the then outstanding principal amount of the Note
inclusive of all accrued PIK Interest on the Note (the "LOAN EXTENSION FEE"). In
addition, simultaneous with payment of such Loan Extension Fee, the Borrowers
shall pay to the Lender such additional cash amount as shall represent a
prepayment of the two (2) quarterly installments of Cash Interest on the then
outstanding Principal Amount that are due on the two consecutive Interest
Payment Dates immediately following the date of the Extension Notice.
2.06 Warrants. On the Closing Date, MobilePro shall issue to the Lender and to
Scion Capital, LLC ("SCION"), and/or their designees (collectively, the "WARRANT
HOLDERS") seven year warrants (the "WARRANTS") entitling the Lender or its
designees to purchase not less than 1,866,667 shares, and Scion or its designees
to purchase not less than 3,733,333 shares (collectively, the "WARRANT SHARES")
of the common stock, $0.001 per share, of MobilePro (the "MOBILEPRO COMMON
STOCK"). Such Warrants:
(a) shall be exercisable at an exercise price of $0.20 per share (the
"EXERCISE PRICE");
(b) may, at the option of the Warrant Holder, be exercised on a
"cashless exercise" basis, for shares of MobilePro Common Stock, so that if the
Current Market Price (as defined below) is greater than the Exercise Price (at
the date of calculation, as set forth below), the Warrant Holder may elect to
receive, without the payment of any additional consideration, shares of
MobilePro Common Stock equal to the value of the "spread" or "profit," in which
event MobilePro shall issue to the Warrant Holder a number of shares of
MobilePro Common Stock computed using the following formula:
X = Y x (CMP-EP)
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CMP
Where: X = the number of shares of MobilePro Common Stock to be issued to
the Holder pursuant to the cashless exercise
Y = the number of shares of MobilePro Common Stock purchasable
under the Warrant or, if only a portion of the Warrant is
being exercised, that portion of the Warrant requested to be
exercised
CMP = the Current Market Price (as of the date of such calculation)
of one share of MobilePro Common Stock
EP = the Exercise Price (as adjusted as of the date of such
calculation).
The "CURRENT MARKET PRICE" of one share of MobilePro Common Stock as of a
particular date shall be determined by (i) the volume weighted average trading
price of the MobilePro Common Stock (the "VWAP"), or (ii) if there is no VWAP
then available, the average of the low bid and high ask intra-day prices of the
Company Common Stock (the "BID AND ASK PRICE"), as traded on any national
securities exchange (or if not then so traded, as traded on the over-the-counter
pink sheets), as reported by Bloomberg or a similar reputable market information
provider, for the
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five trading days immediately prior to the date of any full or partial exercise
of the Warrant (or if no reported sales took place on such day, the last date on
which any such sales took place prior to the date of Notice of Exercise);
(c) shall be exercisable, commencing on the EARLIEST to occur of: (i)
May 15, 2006; (ii) payment in full of the Note and all Obligations to the
Lender; (iii) the occurrence on an Event of Default; (iv) June 16, 2005, if a
current registration statement covering the Warrants and the Warrant Shares has
not been declared effective by the SEC or, subsequent to June 16, 2005, there
shall exist any stop order in connection with such Registration Statement; or
(v) at any time after the VWAP is equal to or greater than $0.30 per share for a
period of not less than five consecutive trading days; and
(d) shall be in the form of Warrant annexed hereto as EXHIBIT L and
made a part hereof.
SECTION 3. PREPAYMENT, PREPAYMENT PREMIUM AND OTHER COMPENSATION.
3.01 Voluntary Prepayments. Subject at all times to the provisions of Section
3.02 below, the Borrowers shall have the right to prepay the Loan in whole or in
part, from time to time on the following terms and conditions: (i) the Borrowers
shall give the Lender at the Notice Office written notice (or telephonic notice
promptly confirmed in writing) of its intent to prepay the Loan, which notice
shall be given by the Borrowers not more than fifteen (15) Business Days and not
less than three (3) Business Days prior to the date of such prepayment (the
"PREPAYMENT NOTICE"); (ii) any partial prepayment of the Loan shall be in an
aggregate principal amount of at least $250,000.
3.02 Prepayment Premium.
(a) The Loan and the Obligations may not be voluntarily prepaid, in
whole or in part (a "VOLUNTARY PREPAYMENT") prior to May 15, 2005.
(b) In the event that any Voluntary Prepayment shall occur after May
15, 2005 and prior to the Maturity Date, the Borrowers shall pay to the Lender
the entire principal amount of the Note being prepaid, together with all Cash
Interest and PIK Interest on such principal amount, accrued to the date of
prepayment, calculated on a 360 day year basis. In addition, simultaneous with
any one or more Voluntary Prepayments, the Borrowers shall pay to the Lender an
additional amount (the "PREPAYMENT PREMIUM") that shall be equal to the product
of (i) three and one-half percent (3.5%) and (ii) the sum of (A) the outstanding
principal amount of the Note being prepaid, and (B) all PIK Interest on such
amount accrued since the Interest Payment Date immediately preceding such
Voluntary Prepayment and which has not been added to the principal amount of the
Note , calculated on a 360 day year basis.
3.03 Method and Place of Payment. Except as otherwise specifically provided
herein, all payments under this Agreement shall be made to the Lender, not later
than 1:00 P.M. (New York time) on the date when due and shall be made in
immediately available funds and in lawful money of the United States of America
by bank wire transfer to one or more accounts designated by the Lender. Any
payments under this Agreement which are made later than 1:00 P.M. (New York
time) shall be deemed to have been made on the next succeeding Business Day.
Whenever any payment to be made hereunder shall be stated to be due on a day
which is not a Business Day, the due date thereof shall be extended to the next
succeeding Business Day and, with respect to payments of principal, interest
shall be payable during such extension at the applicable rate in effect
immediately prior to such extension.
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3.04 Net Payments
(a) Except as set forth in Section 3.04(b) below, all payments made by
the Borrowers hereunder, under any Note or under any other Credit Document will
be made without setoff, counterclaim or other defense. All such payments will be
made free and clear of, and without deduction or withholding for, any present or
future taxes, levies, imposts, duties, fees, assessments or other charges of
whatever nature now or hereafter imposed by any jurisdiction or by any political
subdivision or taxing authority thereof or therein with respect to such payments
(but excluding any tax imposed on or measured by the net income or net profits
of a Lender imposed on it pursuant to the laws of the jurisdiction in which it
is organized or the jurisdiction in which the principal office or applicable
lending office of the Lender is located).
(b) If any deduction or withholding for any Tax of whatever nature is
imposed or levied by or on behalf of any jurisdiction (or any political
subdivision or taxing authority of or in such jurisdiction) (hereinafter a
"TAXING JURISDICTION") in respect of any amounts to be paid by MobilePro or any
of its Subsidiaries under this Agreement, the Note or any other Loan Document,
MobilePro or such Subsidiary may deduct from such amount to be paid under this
Agreement, the Term Note or any other Loan Document and pay to the relevant
Taxing Jurisdiction the full amount required to be withheld, deducted or
otherwise paid before penalties attach thereto or interest accrues thereon. For
the purposes hereof "TAX" means any tax (whether income, documentary, sales,
stamp, registration, issue, capital, property, excise or otherwise), duty,
assessment, levy, impost, fee, compulsory loan, charge or withholding.
3.05 Increased Costs and Reduced Return. If the Lender shall have sold the Note
and the Loan to any Person permitted hereunder and shall have determined that
the adoption or implementation of, or any change in, any law, rule, treaty or
regulation, or any policy, guideline or directive of, or any change in, the
interpretation or administration thereof by, any court, central bank or other
administrative or Governmental Authority, or compliance such Person controlling
the Loan with any directive of, or guideline from, any central bank or other
Governmental Authority or the introduction of, or change in, any accounting
principles applicable to the Lender (in each case, whether or not having the
force of law), shall (i) subject any Person controlling the Loan to any tax,
duty or other charge with respect to this Agreement or the Loan made by the
Lender, or change the basis of taxation of payments to the Person controlling
the Loan of any amounts payable hereunder (except for taxes on the overall net
income of the Lender or any Person controlling the Loan), (ii) impose, modify or
deem applicable any reserve, special deposit or similar requirement against the
Loan or against assets of or held by, or deposits with or for the account of, or
credit extended by, any Person controlling the Loan or (iii) impose on any
Person controlling the Loan any other condition regarding this Agreement or the
Loan, and the result of any event referred to in clauses (i), (ii) or (iii)
above shall be to increase the cost to such Person of accepting the Loan or
agreeing to accept the Loan, or to reduce any amount received or receivable by
the such Person hereunder, then, upon demand by the Loan, the Borrowers shall
pay to the Person controlling the Note and the Loan such additional amounts as
will compensate such Person for such increased costs or reductions in amount.
If the Lender shall have determined that any capital guideline or the adoption
or implementation of, or any change in, any capital guideline by the
Governmental Authority charged with the interpretation or administration
thereof, or compliance by any Person controlling the Lender with any capital
guideline or with any request or directive of any such Governmental Authority
with respect to any capital guideline, or the implementation of, or any change
in, any applicable accounting principles (in each case, whether or not having
the force of law), either (i) affects or would affect the amount of capital
required or expected to be maintained by any Person controlling the Lender, and
the Lender determines that the amount of such capital is increased as a direct
or indirect consequence of the Loans made or maintained, or any such other
controlling Person's other obligations hereunder, or (ii) has or would have the
effect of reducing the rate of return on the Lender's or any such other
controlling Person's capital to a level below that which the Lender or such
controlling Person could have achieved but for such circumstances as a
consequence of the Loans made or maintained or any agreement to make Loans or
the Lender's or such other controlling Person's other obligations hereunder (in
each case, taking into consideration, the Lender's or such other controlling
Person's policies with respect to capital adequacy), then, upon demand by the
Lender, the Borrowers shall pay to the Lender or such controlling Person from
time to time such additional amounts as will compensate the Lender or such
controlling Person for such
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cost of maintaining such increased capital or such reduction in the rate of
return on such Lender's or such other controlling Person's capital.
All amounts payable under this Section 3.05 shall bear interest from the date
that is ten (10) days after the date of demand by the Lender until payment in
full to the Lender at the Cash Interest Rate. A certificate of the Lender
claiming compensation under this Section 3.05, specifying the event herein above
described and the nature of such event shall be submitted by the Lender to the
Borrowers, setting forth the additional amount due and an explanation of the
calculation thereof, and such Lender's reasons for invoking the provisions of
this Section 3.05, and shall be final and conclusive absent manifest error.
Section 3.06 Joint and Several Liability of the Borrowers and Davel Credit
Parties.
(a) Notwithstanding anything in this Agreement or any other Loan
Document to the contrary, each of the Borrowers and each of the Davel Credit
Parties do hereby accept joint and several liability hereunder and under the
other Loan Documents in consideration of the financial accommodations to be
provided by the Lender and the Lenders under this Agreement and the other Loan
Documents, for the mutual benefit, directly and indirectly, of each of the
Borrowers and Davel Credit Parties and in consideration of the undertakings of
the other Borrowers and Davel Credit Parties to accept joint and several
liability for the Obligations. Each of the Borrowers and the Davel Credit
Parties, jointly and severally, hereby irrevocably and unconditionally accepts,
not merely as a surety but also as a co-debtor, joint and several liability with
the other Borrowers and Davel Credit Parties, with respect to the payment and
performance of all of the Obligations (including, without limitation, any
Obligations arising under this Section 3.06), it being the intention of the
parties hereto that all of the Obligations shall be the joint and several
obligations of each of the Borrowers and Davel Credit Parties without
preferences or distinction among them. If and to the extent that any of the
Borrowers or Davel Credit Parties shall fail to make any payment with respect to
any of the Obligations as and when due or to perform any of the Obligations in
accordance with the terms thereof, then in each such event, the other Borrowers
and Davel Credit Parties will make such payment with respect to, or perform,
such Obligation. Subject to the terms and conditions hereof, the Obligations of
each of the Borrowers and Davel Credit Parties under the provisions of this
Section 3.06 constitute the absolute and unconditional, full recourse
Obligations of each of the Borrowers and Davel Credit Parties, enforceable
against each such Person to the full extent of its properties and assets,
irrespective of the validity, regularity or enforceability of this Agreement,
the other Loan Documents or any other circumstances whatsoever.
(b) The provisions of this Section 3.06 are made for the benefit of the
Lender and its successors and assigns, and may be enforced by them from time to
time against any or all of the Borrowers and Davel Credit Parties as often as
occasion therefor may arise and without requirement on the part of the Lender or
such successors or assigns first to marshal any of its or their claims or to
exercise any of its or their rights against any of the other Borrowers or Davel
Credit Parties, or to exhaust any remedies available to it or them against any
of the other Borrowers or Davel Credit Parties, or to resort to any other source
or means of obtaining payment of any of the Obligations hereunder or to elect
any other remedy. The provisions of this Section 3.06 shall remain in effect
until all of the Obligations shall have been paid in full or otherwise fully
satisfied.
(c) Each of the Borrowers and Davel Credit Parties hereby agrees that
it will not enforce any of its rights of contribution or subrogation against the
other Borrowers with respect to any liability incurred by it hereunder or under
any of the other Loan Documents, any payments made by it to the Lender with
respect to any of the Obligations or any Collateral, until such time as all of
the Obligations have been paid in full in cash. Any claim which any Borrower and
Davel Credit Parties may have against any other Borrower or Davel Credit Parties
with respect to any payments to the Lender hereunder or under any other Loan
Documents are hereby expressly made subordinate and junior in right of payment,
without limitation as to any increases in the Obligations arising hereunder or
thereunder, to the prior payment in full in cash of the Obligations.
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SECTION 4. CONDITIONS PRECEDENT TO LOAN.
4.01 Conditions Precedent to Effectiveness. This Agreement shall become
effective as of the Business Day (the "CLOSING DATE") when each of the following
conditions precedent shall have been satisfied in a manner satisfactory to the
Lender:
(a) Closing of Purchase of Davel Credit Parties Debt, Cerberus
Subordinated Debt and Davel Subject Shares. The Purchaser shall have consummated
the purchase of the Davel Credit Parties Debt, the Cerberus Subordinated Debt
and the Davel Subject Shares pursuant to the terms of the Davel Acquisition
Documents, or as otherwise approved by the Lender. In connection therewith and
as part of the Davel Acquisition Documents, the Selling Lenders shall provide to
the Borrowers an indemnification (in form and content satisfactory to Lender)
with respect to the litigation currently pending in the United States District
Court for the Eastern District of Pennsylvania, entitled Xxxx X. Xxxxxxx v.
Cellco Partnership d/b/a Verizon Wireless, et. al.
(b) Payment of Fees, Etc. The Borrowers shall have paid on or before
the Closing Date all fees, costs and expenses then payable pursuant to Section 2
above, and shall issue to the Warrant Holders designated by Lender the Warrants.
(c) Representations and Warranties; No Event of Default. The following
statements shall be true and correct: (i) the representations and warranties
contained in Section 5 and in each other Loan Document, certificate or other
writing delivered to the Lender pursuant hereto or thereto on or prior to the
Closing Date are true and correct on and as of the Closing Date as though made
on and as of such date and (ii) no Default or Event of Default shall have
occurred and be continuing on the Closing Date or would result from this
Agreement or the other Loan Documents becoming effective in accordance with its
or their respective terms.
(d) Legality. The making of the Loan shall not contravene any law, rule
or regulation applicable to the Lender or any Affiliate.
(e) Delivery of Documents and Instruments. The Lender shall have
received on or before the Closing Date the following, each in form and substance
satisfactory to the Lender and, unless indicated otherwise, dated the Closing
Date:
(i) The Note, duly executed by the Borrowers;
(ii) the MobilePro Pledge Agreement, duly executed by
MobilePro and the Existing MobilePro Subsidiaries, together with the original
stock certificates representing all of the shares of capital stock of the
Purchaser and each of the Existing MobilePro Subsidiaries, in each case,
accompanied by undated stock powers executed in blank and other proper
instruments of transfer;
(iii) the Purchaser Pledge Agreement, duly executed by the
Purchaser and MobilePro, together with the original stock certificates
representing all of the Davel Subject Shares purchased from the Selling Lenders
under the Davel Acquisition Documents and all shares of capital stock of the
other Davel Credit Parties, in each case, accompanied by undated stock powers
executed in blank and other proper instruments of transfer;
(iv) the Collateral Debt and Security Assignment Agreement,
duly executed by the Borrowers and by each of the Selling Lenders;
(v) the Existing MobilePro Subsidiaries Guaranty, duly
executed by each of the Existing MobilePro Subsidiaries;
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(vi) the Borrowers Security Agreement, duly executed by each
of the Borrowers, the Existing MobilePro Subsidiaries and Cornell Capital,
authorizing the Lender to file, as collateral agent for itself, any subsequent
Lender under the Loan Documents and Cornell Capital:
(A) all Form UCC-1 Financing Statements in
appropriate form for filing under the UCC of each jurisdiction as may
be necessary to perfect the security interests purported to be created
by the Borrowers Security Agreement;
(B) certified copies of requests for information
(Form UCC-11), or equivalent lien search reports, each of recent date
listing all effective financing statements that name any Borrower as
debtor and that are filed in the jurisdictions referred to in clause
(A), together with copies of such financing statements (none of which
shall cover the Collateral except (x) those with respect to which
appropriate termination statements executed by the secured lender
thereunder have been filed or delivered in form for filing to the
Lender and (y) to the extent evidencing Permitted Liens);
(C) evidence of the completion of all other
recordings and filings of, or with respect to, the Security Agreement
as may be necessary or, in the reasonable opinion of Lender, desirable
to perfect the security interests intended to be created by the
Security Agreement; and
(D) evidence that all other actions necessary or, in
the reasonable opinion of Lender, desirable to perfect and protect the
security interests purported to be created by the Security Agreement
have been taken.
(vii) the Davel Credit Parties Guarantees, duly executed by
each of the Davel Credit Parties;
(viii) the Davel Credit Parties Security Agreement, duly
executed by each of the Davel Credit Parties and Cornell Capital, authorizing
the Lender to file, as collateral agent for itself, any subsequent Lender under
the Loan Documents and Cornell Capital:
(A) all Form UCC-1 Financing Statements in
appropriate form for filing under the UCC of each jurisdiction as may
be necessary to perfect the security interests purported to be created
by the Security Agreement;
(B) certified copies of requests for information
(Form UCC-11), or equivalent lien search reports, each of recent date
listing all effective financing statements that name any Davel Credit
Party as debtor and that are filed in the jurisdictions referred to in
clause (A), together with copies of such financing statements (none of
which shall cover the Collateral except (x) those with respect to which
appropriate termination statements executed by the secured lender
thereunder have been filed or delivered in form for filing to the
Lender and (y) to the extent evidencing Permitted Liens);
(C) evidence of the completion of all other
recordings and filings of, or with respect to, the Security Agreement
as may be necessary or, in the reasonable opinion of Lender, desirable
to perfect the security interests intended to be created by the
Security Agreement; and
(D) evidence that all other actions necessary or, in
the reasonable opinion of Lender, desirable to perfect and protect the
security interests purported to be created by the Security Agreement
have been taken
(ix) the Cornell Assignment Agreement, duly executed by the
Borrowers and accompanied by the consent to such Cornell Assignment Agreement,
duly executed by Cornell and in form and content satisfactory to the Lender;
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(x) the Intellectual Property Assignment Agreement, duly
executed by the Borrowers, the Davel Credit Parties and each other holder of
Intellectual Property;
(xi) the Intercreditor Agreement, duly executed by each of the
Borrowers, the Davel Credit Parties, Cornell Capital and the Lender;
(xii) the Cornell Assignment Agreement, duly executed by
MobilePro and Cornell Capital;
(xiii) a forebearance agreement, duly executed by each of the
Borrowers, the Davel Credit Parties and the Lender, pursuant to which the Lender
and Borrowers shall covenant and agree with the Davel Credit Parties that, for
so long as no Default or Event of Default in respect of the Obligations under
this Agreement or any other Loan Documents shall have occurred, until the
Maturity Date, neither the Lender nor the Borrowers shall demand payment of, or
seek to enforce any remedies in respect of, the Davel Credit Parties Debt or the
Cerberus Subordinated Debt, all in the form of EXHIBIT M annexed hereto and made
a part hereof (the "FORBEARANCE AGREEMENT");
(xiv) the Depositary Account Agreement referred to in Section
6.15, duly executed by each of the Borrowers, the Davel Credit Parties and the
Lender;
(xv) the Warrants registered in the names of the Lender, Scion
or their designees, duly executed by MobilePro;
(xvi) an authorization letter, duly executed by each Borrower,
the Existing MobilePro Subsidiaries and the Davel Credit Parties (the "UCC
FILING AUTHORIZATION LETTER"), authorizing the Lender to electronically file
appropriate UCC Financing Statements in the States of Maryland, Texas, Louisiana
and in such other jurisdictions or offices as may be necessary or, in the
opinion of the Lender, desirable to perfect the security interests purported to
be created by each Security Agreement and each Pledge Agreement included in the
Credit and Security Documents;
(xvii) certified copies of request for copies of information
on Form UCC-11, listing all effective financing statements which name as debtor
MobilePro and all MobilePro Subsidiaries (other than the Davel Group Credit
Parties) and which are filed in the offices referred to in paragraph (viii)
above, together with copies of such financing statements, none of which, except
as otherwise agreed in writing by the Lender, shall cover any of the Collateral
and the results of searches for any tax Lien and judgment Lien filed against
such Person or its property, which results, except as otherwise agreed to in
writing by the Lender, shall not show any such Liens;
(xviii) a copy of the resolutions of each Borrower and Davel
Credit Party, certified as of the Closing Date by an Authorized Officer thereof,
authorizing (A) the borrowings by the Borrowers hereunder and the transactions
contemplated by the Loan Documents to which such Borrower or Davel Credit Party
is or will be a party, and (B) the execution, delivery and performance by such
Borrower and Davel Credit Party of each Loan Document to which such Borrower and
Davel Credit Party is or will be a party and the execution and delivery of the
other documents to be delivered by such Person in connection herewith and
therewith;
(xix) a certificate of an Authorized Officer of each Borrower
and Davel Credit Party, certifying the names and true signatures of the
representatives of such Borrower and Davel Credit Party authorized to sign each
Loan Document to which such Borrower and Davel Credit Party is or will be a
party and the other documents to be executed and delivered by such Borrower and
Davel Credit Party in connection herewith and therewith, together with evidence
of the incumbency of such authorized officers;
(xx) the Borrowers shall obtain and deliver to the Lender a
certificate of the appropriate official(s) of the state of organization and each
state of foreign qualification of each Borrower and Davel Credit Party
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dated as of a recent date not more than 10 days prior to the Closing Date
certifying as to the subsistence or good standing of, and the payment of taxes
by, such Borrower and Davel Credit Party in such states;
(xxi) the Borrowers shall obtain and deliver to the Lender a
true and complete copy of the charter, certificate of formation, certificate of
limited partnership or other publicly filed organizational document of each
Borrower and Davel Credit Party certified as of a recent date not more than 30
days prior to the Closing Date by an appropriate official of the state of
organization of such Davel Credit Party which shall set forth the same complete
name of such Borrower and Davel Credit Party as is set forth herein and the
organizational number of such Borrower and Davel Credit Party, if an
organizational number is issued in such jurisdiction;
(xxii) the Borrowers shall deliver to the Lender a copy of the
charter and by-laws, limited liability company agreement, operating agreement,
agreement of limited partnership or other organizational document of each
Borrower and Davel Credit Party, together with all amendments thereto, certified
as of the Closing Date by an Authorized Officer of such Borrower and Davel
Credit Party;
(xxiii) an opinion of Xxxxxx Xxxxxx, LLP, counsel to the
Borrowers, substantially in the form of EXHIBIT N and as to such other matters
as the Lender may reasonably request;
(xxiv) a certificate of an Authorized Officer of each Davel
Credit Party, certifying as to the matters set forth in subsection (c) of this
4.01;
(xxv) a copy of the Financial Statements referred to in
Section 5.10 hereof, certified as of the Closing Date as true and correct by an
Authorized Officer of the Administrative Borrower;
(xxvi) evidence of the insurance coverage required by this
Agreement and the terms of each Security Agreement and such other insurance
coverage with respect to the business and operations of the Borrowers and the
Davel Credit Parties as presently in existence or as may be increased or
supplemented to the extent the Lender may reasonably request, with such
endorsements as to the named insureds or loss payees thereunder as the Lender
may request and providing that such policy may be terminated or canceled (by the
insurer or the insured thereunder) only upon 30 days' prior written notice to
the Lender and each such named insured or loss payee, together with evidence of
the payment of all premiums due in respect thereof for such period as the Lender
may request;
(xxvii) the Borrowers shall deliver to the Lender, true and
complete copies of (A) all Davel Acquisition Documents, duly executed by the
parties thereto, and (B) a certificate of an authorized officer of Borrowers
stating that the Davel Acquisition Documents and all other Material Contracts
(as defined in 5.12 below) as in effect on the Closing Date remains in full
force and effect, and that neither MobilePro and its Subsidiaries, and (to the
knowledge of such officer) the Davel Credit Parties has breached or defaulted in
any of its or their material obligations under such Material Contracts;
(xxviii) a registration rights agreement, pursuant to which
MobilePro shall agree to register for resale under the Securities Act of 1933,
as amended, the Warrants issued to the Lender and Scion or their designated
assigns, and all shares of Common Stock of MobilePro issuable upon exercise of
such Warrants, all pursuant to the terms and conditions of the registration
rights agreement in the form of EXHIBIT O annexed hereto and made a part hereof
(the "REGISTRATION RIGHTS AGREEMENT");
(xxix) amended and restated Cornell Capital Notes, in such
form and content as is contemplated by the Intercreditor Agreement; and
(xxx) such other agreements, instruments, approvals, opinions
and other documents, each satisfactory to the Lender in form and substance, as
the Lender may reasonably request.
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(f) Due Diligence. The Lender shall have conducted a due diligence
review of the Borrowers and the Davel Credit Parties (which shall include but
not be limited to, collateral audit, legal, regulatory, management and
governance, background checks, review of the Borrowers' combined business plan
and projections, etc.) and the results of such review shall have met with the
complete satisfaction of the Lender in its sole and absolute discretion.
SECTION 5. REPRESENTATIONS, WARRANTIES AND AGREEMENTS. In order to induce the
Lender to enter into this Agreement and to make and/or acquire the Loan, each of
the Borrowers and the Davel Credit Parties do hereby jointly and severally make
the following representations and warranties to, and agreements with, the
Lender, all of which shall survive the execution and delivery of this Agreement
and the making of the Loan.
5.01 Status. Except as set forth on Schedule 5.15 hereto, each of the Borrowers,
each Subsidiary of the Borrowers and each Davel Credit Party (i) is a duly
organized and validly existing corporation in good standing under the laws of
the jurisdiction of its organization and has the power and authority to own its
property and assets and to transact the business in which it is engaged and
presently proposes to engage and (ii) has duly qualified and is authorized to do
business and is in good standing in all jurisdictions where the failure to be so
qualified could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
5.02 Power and Authority. Each of the Borrowers and each Davel Credit Party has
the power and authority to execute, deliver and carry out the terms and
provisions of the Credit and Security Documents and all other Loan Documents to
which it is a party and as at the Closing Date has taken all necessary corporate
action, to authorize the execution, delivery and performance of the Credit and
Security Documents and the other Loan Documents to which it is a party. Each
Borrower and each Davel Credit Party has duly executed and delivered each
Collateral and Security Document and each other Loan Document to which it is a
party and each such Collateral and Security Document and other Loan Document
constitutes the legal, valid and binding obligation of such Person enforceable
in accordance with its terms, subject to the effects of bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, and general equitable principles (regardless of
whether enforcement is sought in equity or at law).
5.03 No Violation. Neither the execution, delivery and performance by any
Borrower or Davel Credit Party of the Credit and Security Documents and other
Loan Documents to which it is a party nor the compliance with the terms and
provisions thereof, nor the consummation of the transactions contemplated
therein (i) will contravene any applicable provision of any law, statute, rule,
regulation, order, writ, injunction or decree of any court or governmental
instrumentality, (ii) will conflict or be inconsistent with or result in any
breach of, any of the material terms, covenants, conditions or provisions of, or
constitute a default under, or (other than pursuant to the Credit and Security
Documents and Loan Documents) result in the creation or imposition of (or the
obligation to create or impose) any Lien upon any of the property or assets of
any Borrower or Davel Credit Party pursuant to the terms of any indenture,
mortgage, deed of trust, agreement or other instrument to which any Borrower or
any Davel Credit Party is a party or by which it or any of the property or
assets of any Borrower or any Davel Credit Party are bound or to which any
Borrower or any Davel Credit Party may be subject or (iii) will violate any
provision of the certificate of incorporation, or by-laws of any Borrower or any
Davel Credit Party.
5.04 Litigation. Except as disclosed on Schedule 5.04 annexed hereto or in the
Securities Filings (as defined in Section 5.12), there are no actions, suits or
proceedings pending or, to the best of the knowledge of MobilePro, threatened
against any Borrower, any Subsidiary of MobilePro or any Davel Credit Party or
with respect to the assets of any Borrower, any MobilePro Subsidiary or any
Davel Credit Party (i) that, if determined adversely, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect or
(ii) that could reasonably be expected to have a Material Adverse Effect on the
rights or remedies of the Lender or on the ability of Borrowers and the Davel
Credit Parties taken as a whole to perform their obligations under this
Agreement or any of the Credit and Security Documents or other Loan Documents.
5.05 Margin Regulations. Neither the making of the Loan hereunder, nor the use
of the proceeds thereof, will violate the provisions of Regulation T, U or X of
the Board of Governors of the Federal Reserve System and no part
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of the proceeds of the Loan will be used to purchase or carry any Margin Stock
or to extend credit for the purpose of purchasing or carrying any Margin Stock.
5.06 Governmental Approvals. Except as set forth on Schedule 5.06 hereto, and
for filings and recordings in connection with the Credit and Security Documents
and other Loan Documents, no order, consent, approval, license, authorization,
or validation of, or filing, recording or registration with, or exemption by,
any foreign or domestic governmental or public body or authority, or any
subdivision thereof that has not been obtained or made, is required to authorize
or is required in connection with (i) the execution, delivery and performance of
any Credit and Security Documents and other Loan Document, or (ii) the legality,
validity, binding effect or enforceability of Credit and Security Documents and
other Loan Document.
5.07 Investment Company Act. No Borrower is an "investment company" or a company
"controlled" by an "investment company," within the meaning of the Investment
Company Act of 1940, as amended.
5.08 Public Utility Holding Company Act, No Borrower, MobilePro Subsidiary or
Davel Credit Party is a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company," within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
5.09 True and Complete Disclosure. Except as set forth on Schedule 5.09 and with
respect to projections and pro forma financial information, all factual
information (taken as a whole) heretofore or contemporaneously furnished by or
on behalf of the Borrowers or any other Davel Credit Party in writing to the
Lender for purposes of or in connection with this Agreement or any transaction
contemplated herein is, and all other such factual information (taken as a
whole) hereafter furnished by or on behalf of any such Person in writing to the
Lender hereunder will be, true and accurate in all material respects on the date
as of which such information is dated or certified and not incomplete by
omitting to state any material fact necessary to make such information (taken as
a whole) not misleading at such time in light of the circumstances under which
such information was provided. There is no fact known to the Borrowers which
could reasonably be expected to have a Material Adverse Effect, which has not
been disclosed herein or in such other documents, certificates and statements
furnished to the Lender do or before the Closing Date for use in connection with
the transactions contemplated hereby. On the Closing Date, each of the Chief
Executive Officer and Chief Financial Officer of MobilePro shall certify to the
best of their knowledge to the accuracy of the foregoing representation and
warranty.
5.10 Financial Condition; Financial Statements.
(a) On and as of the Closing Date, on a pro forma basis after giving
effect to all Indebtedness incurred, and to be incurred, and Liens created, and
to be created, by the Borrowers and each Davel Credit Party in connection
therewith, (x) the sum of the assets (including, without limitation, goodwill),
at a fair valuation, of MobilePro and its Subsidiaries (on a consolidated basis)
will exceed its debts, (y) each of MobilePro and its Subsidiaries will not have
incurred or intended to, or believe that it will, incur debts beyond its ability
to pay such debts as such debts mature and (z) neither MobilePro nor any of its
Subsidiaries will not have unreasonably small capital with which to conduct its
business. For purposes of this Section 5.10(a), "debt" means any liability on a
claim, and "claim" means (i) right to payment whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured; or (ii)
right to an equitable remedy for breach of performance if such breach gives rise
to a payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured. In computing the amount of contingent or unliquidated liabilities
at any time, such liabilities will be computed at the amount which, in light of
all the facts and circumstances existing at such time, represents the amount
that can reasonably be expected to become an actual or matured liability.
(b) MobilePro has furnished to the Lender and Lender acknowledges
receipt of: (i) the audited consolidated balance sheet of MobilePro and its
Subsidiaries at March 31, 2004 and the related consolidated statement of income
and cash flows of MobilePro and its Subsidiaries for such fiscal year then
ended, (ii) a
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consolidating balance sheet of MobilePro and its Subsidiaries at March 31, 2004
and the related consolidating statement of income and cash flows of MobilePro
and its Subsidiaries for such fiscal year then ended, and (iii) the consolidated
and consolidating balance sheet of MobilePro and its Subsidiaries as of
September 30, 2004 and the consolidated and consolidating statement of income
and cash flows for the nine months then ended, in each case, after elimination
of intercompany transactions and in the case of the twelve month consolidated
financial statement, audited by Bagell, Josephs & Company, L.L.C. Such financial
statements present, in all material respects, the consolidated financial
position of MobilePro and its Subsidiaries at the dates of said statements and
the results of operations for the periods covered thereby in accordance with
GAAP, except to the extent provided in the notes to said financial statements
and, in the case of the September 30, 2004 financial statements, subject to
normal and recurring year-end audit adjustments. All such financial statements
have been prepared in accordance with GAAP and practices consistently applied
except to the extent provided in the notes to said financial statements.
(c) MobilePro has furnished to the Lender and Lender acknowledges
receipt of: (i) the audited consolidated balance sheet of Davel and its
Subsidiaries at December 31, 2003 and the related consolidated statement of
income and cash flows of Davel and its Subsidiaries for such fiscal year then
ended, and (ii) the consolidated balance sheet of Davel and its Subsidiaries as
of June 30, 2004 and the consolidated statement of income and cash flows for the
six months then ended, in each case, after elimination of intercompany
transactions and in the case of the twelve month consolidated financial
statement , audited by Aidman Xxxxx & Company, P.A. Such financial statements
present, in all material respects, the consolidated financial position of Davel
and its Subsidiaries at the dates of said statements and the results of
operations for the periods covered thereby in accordance with GAAP, except to
the extent provided in the notes to said financial statements and, in the case
of the June 30, 2004 financial statements, subject to normal and recurring
year-end audit adjustments. All such financial statements have been prepared in
accordance with GAAP and practices consistently applied except to the extent
provided in the notes to said financial statements.
(d) The pro forma combined consolidated balance sheet and combined
consolidated statement of income of MobilePro, Davel and their respective direct
and indirect Subsidiaries as of June 30, 2004 (the "PROFORMA FINANCIAL
STATEMENTS"), a copy of which has heretofore been furnished to the Lender,
presents a good faith estimate of the pro forma consolidated financial condition
and result of operations of MobilePro and its Subsidiaries, on a combined
pro-forma basis after giving effect to (i) the assignment to the Purchaser of
the Davel Subject Shares, the Davel Credit Parties Debt, pursuant to the Davel
Acquisition Documents, and (ii) the funding of Loan to the Borrowers
contemplated hereby (collectively, the "DAVEL TRANSACTION").
(e) Except as set forth on Schedule 5.10 hereto, nothing has occurred
since June 30, 2004 (both prior to and after giving effect to the Transaction)
that has had or could reasonably be expected to have a Material Adverse Effect.
(f) Except as reflected in the financial statements and the notes
thereto described in this Section 5.10, there were as of the Closing Date no
liabilities or obligations with respect to MobilePro, Davel or any of their
direct or indirect Subsidiaries of a nature (whether absolute, accrued,
contingent or otherwise and whether or not due) which, either individually or in
aggregate, would be material to MobilePro and its Subsidiaries taken as a whole,
except as incurred in the ordinary course of business consistent with past
practices subsequent to June 30, 2004.
5.11 Security Interests. On and after the Closing Date, each of the Credit and
Security Documents creates in favor of the Lender, as collateral agent, for
itself, any other Lender under the Loan Documents and Cornell Capital, as
security for the Obligations and Cornell Capital Obligations purported to be
secured thereby: (a) a valid and enforceable, and upon filing of the relevant
financing statements with respect to security interests that can be so
perfected, a perfected security interest in and Lien on all of the Collateral
subject thereto, superior to and prior to all Liens or other rights of all third
Persons; and (b) subject to no other Liens (other than Permitted Liens), except
as otherwise set forth on Schedule 5.11 hereto. No filings or recordings are
required in order to perfect the security interests created under any Credit and
Security Document with respect to security interests in Collateral that can be
perfected by the filing of Form UCC-1 Financing Statements, except for filings
or recordings required in connection with any such Credit and Security Document
(other than the MobilePro Pledge Agreement or Purchaser Pledge
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Agreement) which shall have been made upon or prior to (or are the subject of
arrangements, reasonably satisfactory to Lender, for filing on or promptly after
the date of the execution and delivery thereof) the date hereof in the States in
which Form UCC-1 Financing Statements will be filed and with the United States
Patent and Trademark Office.
5.12 Material Contracts and Davel Acquisition Documents.
(a) All material contracts, agreements and undertakings that are
binding upon either of the Borrowers, any of the MobilePro Subsidiaries and/or
any of the Davel Credit Partiesas at the date hereof (collectively, "MATERIAL
CONTRACTS") have been filed as exhibits to filings under the Securities Act of
1933, as amended, or the Securities Exchange Act of 1934, as amended
(collectively, the "SECURITIES FILINGS"), by MoblePro or Davel; all of which
Material Contracts have been made available to the Lender.
(b) All representations and warranties of the Davel Credit Parties set
forth in the Davel Acquisition Documents and, to the knowledge of the Borrowers,
all representations and warranties of the Selling Lenders set forth in the Davel
Acquisition Documents were true and correct in all material respects as of the
Closing Date as if made on and as of such date. Except as expressly set forth in
the Davel Acquisition Documents and Loan Documents, none of the Davel Credit
Parties is assuming any Indebtedness, obligations, claims or liabilities of the
Borrowers or any Affiliate thereof.
5.13 Tax Returns and Payments. Except as otherwise set forth on Schedule 5.13
hereto, each of the Borrowers, each MobilePro Subsidiary and each Davel Credit
Party has filed all Federal income tax returns and all other material tax
returns, domestic and foreign, required to be filed by it and has paid all taxes
and assessments payable by it which have become due, except for those contested
in good faith and adequately disclosed and fully provided for on the
consolidated financial statements of such person in accordance with GAAP. Each
Borrower, each MobilePro Subsidiary and each Davel Credit Party has provided
adequate reserves in accordance with GAAP for the payment of all unpaid Federal,
state and foreign income taxes applicable for all prior fiscal years and for the
current fiscal year to date. There is no action, suit, proceeding,
investigation, audit, or claim now pending or, to the knowledge of the
Borrowers, threatened by any authority regarding any taxes relating to any
Borrower, any MobilePro Subsidiary or any Davel Credit Party which, individually
or in the aggregate, could reasonably be expected to have a Material Adverse
Effect. As of the Closing Date, no Borrower, MobilePro Subsidiary or Davel
Credit Party has entered into an agreement or waiver or been requested to enter
into an agreement or waiver extending any statute of limitations relating to the
payment or collection of taxes of any Borrower, MobilePro Subsidiary or Davel
Credit Parry, and the Borrowers are not aware of any circumstances that would
cause the taxable years or other taxable periods of any Borrower, MobilePro
Subsidiary or any Davel Credit Party not to be subject to the normally
applicable statute of limitations. All federal and state withholding taxes have
been paid when due and none of the Borrowers, any MobilePro Subsidiary or Davel
Credit Party is in arrears in the payment of any such withholding taxes.
5.14 Compliance with ERISA. As of the Closing Date, no Borrower, MobilePro
Subsidiary or Davel Credit Party or any ERISA Affiliate of any Borrower,
MobilePro Subsidiary or any Davel Credit Party maintains, contributes to or is
required to contribute to any Multiemployer Plan. Except to the extent that all
events and obligations described in the following sentence of this Section 5.14
could not in the aggregate be reasonably be expected to have a Material Adverse
Effect, each Plan (and each related trust; insurance contract or fund) is in
compliance with its terms and with all applicable laws, including, without
limitation, ERISA and the Code; neither any Borrower, MobilePro Subsidiary or
any Davel Credit Party nor any ERISA Affiliate of any Borrower, MobilePro
Subsidiary or any Davel Credit Party has incurred or reasonably expects to
incur, and to the knowledge of the Borrowers, no condition exists which presents
a material risk to any Borrower, MobilePro Subsidiary or any Davel Credit Party
or any ERISA Affiliate of any Borrower, MobilePro Subsidiary or any Davel Credit
Party of incurring, any liability, nor has a lien been imposed against the
assets of any Borrower, MobilePro Subsidiary or any Davel Credit Party or any
ERISA Affiliate of any Borrower, MobilePro Subsidiary or any Davel Credit Party,
on account of a Plan or Multiemployer Plan under the Code or ERISA; each Plan
(and each related trust, if any) which is intended to be qualified under Section
401 (a) of the Code has received a determination letter from the Internal
Revenue Service to the effect that it meets the requirements of Sections 401 (a)
and 501 (a) of the Code; no
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Reportable Event has occurred; to the knowledge of MobilePro, no Multiemployer
Plan is insolvent or in reorganization; no Plan has an Unfunded Current
Liability; no Plan which is subject to section 412 of the Code or Section 302 of
ERISA has an accumulated funding deficiency, within the meaning of such Sections
of the Code or ERISA, or has applied for or received a waiver of an accumulated
finding deficiency or an extension of any amortization period, within the
meaning of Section 412 of the Code or Section 303 or 304 of ERISA; no
proceedings have been instituted to terminate or appoint a trustee to administer
any Plan which is subject to Title IV of ERISA; no action, suit, proceeding,
hearing or audit, and to the knowledge of MobilePro, no investigation, with.
respect to the administration, operation or the investment of assets of any Plan
(other than routine claims for benefits) is pending or, to the knowledge of
MobilePro, expected or threatened. To the knowledge of MobilePro, the aggregate
liabilities which would be payable in any fiscal year of Borrowers, MobilePro
Subsidiary or the Davel Credit Parties and the ERISA Affiliates of any Borrower,
MobilePro Subsidiary or any Davel Credit Party to all Plans which are
multiemployer plans (as defined in Section 4001(a)(3) of ERISA) in the event of
a complete withdrawal therefrom, as of the close of the most recent fiscal year
of each such Plan ended prior to the date of the most recent Credit Event, would
not result in any liability to any Borrower, MobilePro Subsidiary or any Davel
Credit Party or any ERISA Affiliate of any Borrower, MobilePro Subsidiary or any
Davel Credit Party; and no Borrower, MobilePro Subsidiary or Davel Credit Party
maintains or contributes to any (i) employee welfare benefit plan (as defined in
Section 3(1) of ERISA) which provides benefits to retired employees or other
former employees (other than as required by Section 601 of ERISA) the
obligations with respect to which as a consequence of any termination or other
extraordinary event (other than benefits in the ordinary course) could
reasonably be expected to have a Material Adverse Effect or (ii) Plan, the
obligations with respect to which could reasonably be expected to have a
Material Adverse Effect.
5.15 Subsidiaries. On and as of the Closing Date, MobilePro has no direct or
indirect Subsidiaries other than as set forth on Schedule 5.15. Schedule 5.15
accurately sets forth the ownership and capital structure of MobilePro and its
Subsidiaries, as at the date hereof and on the Closing Date, after giving effect
to consummation of the transactions contemplated by the Davel Acquisition
Agreements.
5.16 Intellectual Property. Except except as otherwise set forth on Schedule
5.16 hereto, or where the ownership or lack of enforceable rights could not be
reasonably excepted to have a Material Adverse Effect and each Borrower,
MobilePro Subsidiary and each Davel Credit Party owns or has all necessary
enforceable rights to use all patents, trademarks, service marks, trade names,
copyrights, licenses and other rights, free from Liens (except Liens in favor of
the Lender), including, but not limited to, burdensome restrictions, that are
necessary for the operation of their businesses as presently conducted and as
proposed to be conducted.
5.17 Environmental Matters. Except as set forth on Schedule 5.17 or as could
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect: (i) each Borrower, MobilePro Subsidiary and Davel Credit Party
is in compliance with all Environmental Laws and Permits applicable to its
business or operations, including, but not limited to, the use, storage or
disposal of Hazardous Material used by it; (ii) each Borrower, MobilePro
Subsidiary and Davel Credit Parties have all Permits required for their business
or operations; (iii) no Borrower, MobilePro Subsidiary or Davel Credit Party,
with respect to any of its properties or operations, (A) has entered into or
been a party to, and is subject to continuing liabilities, obligations or claims
in connection with, any litigation, judicial order, consent decree, compliance
order or administrative order or private settlement with respect to any
Environmental Laws or with respect to any alleged contamination by or damage or
injury caused by any Hazardous Material; (B) has received any written notice,
demand letter or administrative complaint with respect to any alleged violation
of Environmental Laws or with respect to any alleged contamination by or damage
or injury caused by any Hazardous Material; or (C) has been or is currently
subject to any governmental or third party enforcement action commenced under
any Environmental Laws; (iv) there has been no Release of any Hazardous
Materials in reportable quantities from the operations of any Borrower,
MobilePro Subsidiary or any Davel Credit Party in violation of any Environmental
Laws; (v) there are no Hazardous Materials in violation of any Environmental
Laws on, in or under any Real Property owned or operated by any Borrower,
MobilePro Subsidiary or any Davel Credit Party; (vi) no Lien has been imposed
or, to the knowledge of MobilePro, threatened on any Real Property of any
Borrower, MobilePro Subsidiary or any Davel Credit Party by any Governmental
Agency or other third person in connection with the presence or Release of any
Hazardous Material; (vii) there are no underground or
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aboveground storage tanks located on any Real Property owned by any Borrower,
MobilePro Subsidiary or any Davel Credit Party or for which any Borrower,
MobilePro Subsidiary or Davel Credit Party bears responsibility under any lease
which are not in compliance with Environmental Laws; (viii) no Hazardous
Material generated by the operations of any Borrower, MobilePro Subsidiary or
any Davel Credit Party has been disposed of by any Borrower or any Davel Credit
Party (A) in violation of any Environmental Laws or (B) at any location which
appears on the National Priority List promulgated under CERCLA or any similar
list promulgated pursuant to state or local law; (ix) no information request
issued pursuant to Section 104 of CERCLA or other Environmental Law or any
similar state or local or foreign Environmental Laws has been received by any
Borrower, MobilePro Subsidiary or any Davel Credit Party with respect to any
transaction of any Borrower, MobilePro Subsidiary or any Davel Credit Party or
in connection with the operations of any Borrower, MobilePro Subsidiary or any
Davel Credit Party; and (x) no Hazardous Material has been generated,
manufactured, refined, transported, treated, stored, handled, transferred,
produced, or processed by any Borrower, MobilePro Subsidiary or any Davel Credit
Party in violation of any Environmental Law.
5.18 Properties. Each Borrower, MobilePro Subsidiary and each Davel Credit Party
has good and valid title to all properties and assets owned by it, including all
properties reflected in the consolidated balance sheet of MobilePro and each of
its Subsidiaries at June 30, 2004 referred to in Section 5.10(b), free and clear
of all Liens, other than (i) as referred to in such balance sheet or in the
notes thereto, (ii) Inventory or worn out or obsolete equipment sold and
accounts receivable collected upon in the ordinary course of business since such
date (iii) Permitted Liens, or (iv) as otherwise set forth on Schedule 5.11
annexed hereto. Schedule 5.18 annexed hereto, sets forth a brief description of
all Real Property owned or leased by the Borrowers, MobilePro Subsidiary and the
Davel Credit Parties. The Borrowers have furnished Lender with a true and
complete list (setting forth the monthly rents, percentage rents (if any) term
and name of lessor and leasee) of each lease of Real Property to which any
Borrower, MobilePro Subsidiary or any Davel Credit Party is a party as of the
Closing Date. Each such Lease is valid and enforceable in accordance with its
terms in all material respects and is in full force and effect. No consent or
approval of any landlord or other third party in connection with any such Lease
is necessary for any Borrower, MobilePro Subsidiary or Davel Credit Party to
enter into and execute the Loan Documents to which it is a party, except as set
forth on Schedule 5.18. To the best knowledge of any Borrower, MobilePro
Subsidiary or Davel Credit Party, no other party to any such Lease is in default
of its obligations thereunder, and no Borrower, MobilePro Subsidiary or Davel
Credit Party (or any other party to any such Lease) has at any time delivered or
received any notice of default which remains uncured under any such Lease and,
as of the Effective Date, no event has occurred which, with the giving of notice
or the passage of time or both, would constitute a default under any such Lease;
which, in any such case or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.
5.19 Capitalization. On the Closing Date, the authorized and outstanding capital
stock of MobilePro and each of its Subsidiaries is held as set forth on Schedule
5.19. Except as set forth on Schedule 5.19, on the Closing Date no Borrower,
MobilePro Subsidiary or Davel Credit Party has outstanding any securities
convertible into or exchangeable for its capital stock or outstanding any rights
to subscribe for or to purchase, or any options for the purchase of, or any
agreements providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to, its capital stock.
5.20 Labor Relations. No Borrower, MobilePro Subsidiary or Davel Credit Party is
engaged in any unfair labor practice that could reasonably be expected to have a
Material Adverse Effect. There is (i) no unfair labor practice complaint pending
against any Borrower, MobilePro Subsidiary or any Davel Credit Party or, to the
best knowledge of the Borrowers, threatened against any of them, before the
National Labor Relations Board nor, to the best knowledge of the Borrowers, is
there any basis for such complaint, and no grievance or arbitration proceeding
arising out of or under any collective bargaining agreement is so pending
against any Borrower, MobilePro Subsidiary or any Davel Credit Party or, to the
best knowledge of the Borrowers, threatened against any of them, (ii) no strike,
labor dispute, slowdown or stoppage pending against any Borrower, MobilePro
Subsidiary or any Davel Credit Party or, to the best knowledge of the Borrowers,
threatened against any Borrower, MobilePro Subsidiary or any Davel Credit Party
and (iii) no union representation question existing with respect to the
employees of any Borrower, MobilePro Subsidiary or any Davel Credit Party and,
to the best knowledge of the Borrowers, no union organizing activities are
taking place, except with respect to any matter specified in clause (i), (ii) or
(iii) above,
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either individually or in the aggregate, such as could not reasonably be
expected to have a Material Adverse Effect (after giving effect to the
Transaction).
5.21 Compliance with Statutes, etc. Each Borrower, MobilePro Subsidiary and each
Davel Credit Party is in compliance with all applicable statutes, regulations
and orders of, and all applicable restrictions imposed by. all governmental
bodies, domestic or foreign, in respect of the conduct of its business and the
ownership of its property, except such noncompliance as could not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
5.22. Permits, Etc. Except as set forth on Schedule 5.22, each Borrower,
MobilePro Subsidiary and Davel Credit Party has, and is in compliance with, all
permits, licenses, authorizations, approvals, entitlements and accreditations
required for such Person lawfully to own, lease, manage or operate, or to
acquire, each business currently owned, leased, managed or operated, or to be
acquired, by such Person. No condition exists or event has occurred which, in
itself or with the giving of notice or lapse of time or both, would result in
the suspension, revocation, impairment, forfeiture or non-renewal of any such
permit, license, authorization, approval, entitlement or accreditation, and
there is no claim that any thereof is not in full force and effect, except such
conditions or events which could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
5.23 [intentionally omitted]
5.24 Taxes, Etc. Except as disclosed on Schedule 5.24 annexed hereto, all
Federal, state and local tax returns and other reports required by applicable
law to be filed by any Borrower, MobilePro Subsidiary or Davel Credit Party have
been filed, or extensions have been obtained, and all taxes, assessments and
other governmental charges imposed upon any Borrower, MobilePro Subsidiary or
Davel Credit Party or any property of any Borrower, MobilePro Subsidiary or
Davel Credit Party and which have become due and payable on or prior to the date
hereof have been paid, except to the extent contested in good faith by proper
proceedings which stay the imposition of any penalty, fine or Lien resulting
from the non-payment thereof and with respect to which adequate reserves have
been set aside for the payment thereof on the Financial Statements in accordance
with GAAP.
5.25 Regulations T, U and X. No Borrower, MobilePro Subsidiary or Davel Credit
Party is or will be engaged in the business of extending credit for the purpose
of purchasing or carrying margin stock (within the meaning of Regulation T, U or
X), and no proceeds of the Loan will be used to purchase or carry any margin
stock or to extend credit to others for the purpose of purchasing or carrying
any margin stock.
5.26 Adverse Agreements, Etc. No Borrower, MobilePro Subsidiary or Davel Credit
Party has knowledge that it is a party to any agreement or instrument, or
subject to any charter, limited liability company agreement, partnership
agreement or other corporate, partnership or limited liability company
restriction or any judgment, order, regulation, ruling or other requirement of a
court or other Governmental Authority, which could reasonably be expected to
have a Material Adverse Effect.
5.27 Full Disclosure. Each Borrower, MobilePro Subsidiary and Davel Credit Party
has disclosed to the Lender all agreements, instruments and corporate or other
restrictions to which it is subject, and all other matters known to it, that,
individually or in the aggregate, could result in a Material Adverse Effect.
None of the other reports, financial statements, certificates or other
information furnished by or on behalf of any Borrower, MobilePro Subsidiary or
Davel Credit Party to the Lender in connection with the negotiation of this
Agreement or delivered hereunder (as modified or supplemented by other
information so furnished) contains any material misstatement of fact or omits to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which it was made, not misleading; provided that,
with respect to projected financial information, each Borrower, MobilePro
Subsidiary and Davel Credit Party represents only that such information was
prepared in good faith based upon assumptions believed to be reasonable at the
time. There is no contingent liability or fact that may have a Material Adverse
Effect which has not been set forth in a footnote included in the Financial
Statements or a Schedule hereto.
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5.28 Operating Lease Obligations. On the Effective Date, none of the Borrowers,
MobilePro Subsidiaries or Davel Credit Parties has any obligations or
liabilities under any operating lease for rents in excess of $25,000 per year
("OPERATING LEASE OBLIGATIONS") other than the Operating Lease Obligations set
forth on Schedule 5.28. All operating leases are in full force and effect and no
event has occurred which, with the passage of time or giving of notice, would
constitute a default under such operating leases by any of the Borrowers,
MobilePro Subsidiaries or Davel Credit Parties or, to their knowledge, the other
parties thereto, except such events which could not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
5.29 Solvency. After giving effect to the Davel Transaction and the transactions
contemplated by this Agreement and before and after giving effect to the Loan
(a) the fair value of the assets of the Borrowers, MobilePro Subsidiaries and
Davel Credit Parties on a consolidated basis exceeds the liabilities and
obligations of such Persons on a consolidated basis, and (b) each Borrower,
MobilePro Subsidiary or Davel Credit Party is, and the Borrowers, MobilePro
Subsidiaries and Davel Credit Parties on a consolidated basis are, solvent and
able to pay their debts and obligations as they become due.
5.30 Location of Bank Accounts. Schedule 5.30 sets forth a complete and accurate
list as of the Effective Date of all deposit, checking and other bank accounts,
all securities and other accounts maintained with any broker dealer and all
other similar accounts maintained by each Borrower, MobilePro Subsidiary and
Davel Credit Party, together with a description thereof (i.e., the bank or
broker dealer at which such deposit or other account is maintained and the
account number and the purpose thereof).
5.31 Customers and Suppliers. There exists no actual or threatened termination,
cancellation or limitation of, or modification to or change in, the business
relationship between (i) any Borrower, MobilePro Subsidiary or Davel Credit
Party, on the one hand, and any customer or any group thereof, on the other
hand, whose agreements with any Borrower, MobilePro Subsidiary or Davel Credit
Party are individually or in the aggregate material to the business or
operations of such Borrower, MobilePro Subsidiary or Davel Credit Party, or (ii)
any Borrower, MobilePro Subsidiary or Credit Party, on the one hand, and any
material supplier thereof, on the other hand; and there exists no present state
of facts or circumstances that could give rise to or result in any such
termination, cancellation, limitation, modification or change.
5.32 No Bankruptcy Filing. No Borrower, MobilePro Subsidiary or Davel Credit
Party is contemplating either an Insolvency Proceeding or the liquidation of all
or a major portion of such Borrower, MobilePro Subsidiary or Davel Credit
Party's assets or property, and no Borrower, MobilePro Subsidiary or Davel
Credit Party has any knowledge of any Person contemplating an Insolvency
Proceeding against it.
5.33 Existence. All customary formalities regarding the corporate existence of
each Borrower, MobilePro Subsidiary and Davel Credit Party has been at all times
since its formation and will continue to be observed. To the knowledge of the
Borrowers, each Borrower, MobilePro Subsidiary and Davel Credit Party has at all
times since its formation accurately maintained, and will continue to accurately
maintain, its financial statements, accounting records and other organizational
documents.
5.34 Name; Jurisdiction of Organization; Organizational ID Number; Chief Place
of Business; Chief Executive Office; FEIN. Schedule 5.34 sets forth a complete
and accurate list as of the date hereof of (i) the exact legal name of each
Borrower, MobilePro Subsidiary or Davel Credit Party, (ii) the jurisdiction of
organization of each Borrower, MobilePro Subsidiary and Davel Credit Party,
(iii) the organizational identification number of each Borrower, MobilePro
Subsidiary and Davel Credit Party (or indicates that such Credit Party has no
organizational identification number), (iv) each place of business of each
Borrower, MobilePro Subsidiary and Davel Credit Party, (v) the chief executive
office of each Borrower, MobilePro Subsidiary and Davel Credit Party and (vi)
the federal employer identification number of each Borrower, MobilePro
Subsidiary and Davel Credit Party.
5.35 Patents and Tradenames. Schedule 5.35 hereto sets forth a complete and
accurate list as of the Effective Date of all letters patent, patent
applications, tradenames and trademark applications used or being applied for by
each Borrower, MobilePro Subsidiary and Davel Credit Party.
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5.36 Locations of Collateral. There is no location at which any Borrower or
Davel Credit Party has any Collateral other than (i) those locations listed on
Schedule 5.36 and (ii) any other locations approved in writing by the Lender
from time to time.
5.37 Security Interests. The Security Agreement and other Credit and Security
Documents creates in favor of the Lender, as collateral agent for itself, any
subsequent Lender under the Loan Documents and Cornell Capital, a legal, valid
and enforceable security interest in the Collateral secured thereby. Upon the
filing of the Form UCC-1 financing statements described herein and the recording
of the Collateral Assignments for Security referred to in each Security
Agreement in the United States Patent and Trademark Office and the United States
Copyright Office, as applicable, such security interests in and Liens on the
Collateral granted thereby which can be perfected by such filings shall
represent perfected, first priority security interests (subject only to
Permitted Liens and the terms of the Credit and Security Documents and the
Intercreditor Agreement), and no further recordings or filings are or will be
required in connection with the creation, perfection or enforcement of such
security interests and Liens, other than (i) the filing of continuation
statements in accordance with applicable law, (ii) the recording of the
Collateral Assignments for Security pursuant to each Security Agreement in the
United States Patent and Trademark Office and the United States Copyright
Office, as applicable, with respect to after-acquired U.S. patent and trademark
applications and registrations and U.S. copyrights and (iii) the recordation of
appropriate evidence of the security interest in the appropriate foreign
registry with respect to all foreign intellectual property.
5.38 The SEDA. The Standby Equity Distribution Agreement, dated May 13, 2004
with Cornell Capital (the "SEDA") remains in full force and effect, and no event
which with the passage of time, the giving of notice or otherwise, would
constitute a default or event of default under the SEDA has occurred or is
continuing; MobilePro's registration statement with respect to the resale of the
"Registrable Securities" (as defined in the SEDA) has been declared effective by
the SEC and is current; all conditions to the Advance of funds by Cornell
Capital under the SEDA, including those set forth in Section 2.5 of the SEDA
have been met by MobilePro; and MobilePro has complied with and will continue to
comply with all of the representations, warranties, covenants and agreement on
its part to be observed or performed under the SEDA.
5.39 Schedules. All of the information which is required to be scheduled to this
Agreement is set forth on the Schedules attached hereto, is correct and accurate
and does not omit to state any information material thereto.
5.40 Representations and Warranties in Documents; No Default. All
representations and warranties set forth in this Agreement and the other Loan
Documents are true and correct in all respects at the time as of which such
representations were made and on the Effective Date. No Event of Default has
occurred and is continuing and no condition exists which constitutes a Default
or an Event of Default.
SECTION 6. AFFIRMATIVE COVENANTS. The Borrowers hereby covenant and agree that
for so long as this Agreement is in effect, and until the Note, the Loan, and
all Interest, Fees and all other Obligations owed to the Lender (other than
Obligations relating solely to the Warrants and any Common Stock issued upon
exercise thereof) shall have been paid or performed in full:
6.01 Information Covenants. The Borrowers will furnish to the Lender:
(a) Annual Financial Statements. Within 90 days after the close of each
fiscal year of the Borrowers, the audited consolidated balance sheet of
MobilePro and its Subsidiaries, as at the end of such fiscal year and the
related consolidated statements of income and retained earnings and of cash
flows for such fiscal year, and with respect to any fiscal year ending on or
after March 31, 2005, setting forth comparative consolidated figures for the
preceding fiscal year, and examined by independent certified public accountants
of recognized national standing whose opinion shall not be qualified as to the
scope of audit or as to the status of MobilePro or any of its Subsidiaries as a
going concern, together with a certificate of such accounting firm stating that
in the course of its regular audit of the business of MobilePro and its
Subsidiaries, which audit was conducted in accordance with generally accepted
auditing standards, such accounting firm has obtained no knowledge of any
Default or Event
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of Default which has occurred and is continuing or, if in the judgment of such
accounting firm such a Default or Event of Default has occurred and is
continuing, a statement as to the nature thereof (it being agreed that such
accounting firm shall have no liability to the Lender by reason of any failure
to obtain knowledge of a Default or Event of Default).
(b) Monthly Reports. As soon as practicable, and in any event within 30
calendar days, after the end of each monthly accounting period of each fiscal
year (other than the last monthly accounting period in such fiscal year)
beginning with the month of November 2004 the unaudited consolidated balance
sheet of MobilePro and its Subsidiaries, as at the end of such period. and the
related unaudited consolidated statements of income and cash flows for such
period and the year to date, setting forth comparative figures for the
corresponding period (including year to date) of the previous year together with
an analysis in reasonable detail of any variances of 5% more from the prior
month or the corresponding period of the previous year, all of which shall be
certified by the chief financial officer of respective entity subject to changes
resulting from audit and normal year-end audit adjustments (each, a "MONTHLY
REPORT"). As soon as practicable, and in any event no later than October 29,
2004, the Monthly Reports for the months of July 2004, August 2004 and September
2004 shall be provided to the Lender.
(c) Business Plan, etc. By May 15, 2005 and May 15, 2006, if
applicable, a consolidated Business Plan of MobilePro and its Subsidiaries
(including all Davel Credit Parties) in reasonable detail (substantially similar
to the detail provided in the business plan previously provided to Lender in
connection with the Lender's credit review of the Loan) for each of the four
quarters of the most recently ended fiscal year of MobilePro. Together with each
delivery of consolidated financial statements pursuant to Sections 6.01 (a) and
(b), a comparison of the current year-to-date financial results against the
budgets required to be submitted pursuant to this Section 6.01(c) shall be
presented. In addition, prior to the end of fiscal year 2005 and 2006, if
applicable, MobilePro shall furnish the Lender with a draft of such annual
Business Plan.
(d) Officer's Certificates. At the time of the delivery of the
financial statements provided for in Sections 6.01(a) and (b), a certificate of
an Authorized Officer of MobilePro to the effect that, to the best of his
knowledge, no Default or Event of Default exists or, if any Default or Event of
Default does exist, specifying the nature and extent thereof, which certificate
(x) in the case of the certificate to be delivered at the time of the delivery
of the financial statements provided for in Sections 6.01(a) and (b), shall set
forth the calculations required to establish whether MobilePro and its
Subsidiaries were in compliance with the provisions of Sections 7.11 through
7.17, inclusive, as at the end of such fiscal period or year, as the case may
be.
(e) Notice of Default or Litigation. Promptly, and in any event within
three Business Days after any officer of the Borrowers obtains knowledge
thereof, notice of (x) the occurrence of any event which constitutes a Default
or Event of Default which notice shall specify the nature thereof, the period of
existence thereof and what action the Borrowers propose to take with respect
thereto and (y) the commencement of, or any significant development in, any
litigation or governmental proceeding pending against or commenced by any
Borrower or any Davel Credit Party which, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect (after giving
effect to the Transactions) or could reasonably be expected to have a material
adverse effect on the ability of any Borrower or any Davel Credit Party to
perform its obligations hereunder or under any other Loan Document.
(f) Environmental Matters. Promptly after obtaining knowledge of any of
the following, but only to the extent that any of the following could reasonably
be expected to (x) have a Material Adverse Effect, either individually or in the
aggregate, or (y) result in an aggregate remedial cost to the Davel Credit
Parties in excess of $25,000 written notice of:
(i) any pending or threatened Environmental Claim against any
Borrower or any Davel Credit Party or any Real Property owned or operated by any
Borrower or any Davel Credit Party;
(ii) any condition or occurrence on any Real Property owned or
operated by any Borrower or any Davel Credit Party that (x) results in
noncompliance by any Borrower or any Davel Credit Party with any
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applicable Environmental Law or (y) would reasonably be anticipated to result in
an Environmental Claim against any Borrower or any Davel Credit Party or any
such Real Property;
(iii) any condition or occurrence on any Real Property owned
or operated by any Borrower or any Davel Credit Party that would reasonably be
anticipated to result in such Real Property being subject to any restrictions on
the ownership, occupancy, use or transferability by any Borrower or any Davel
Credit Party of its interest in such Real Property under any Environmental Law;
and
(iv) the taking of any removal or remedial action in response
to the actual or alleged presence of any Hazardous Material on any Real Property
owned or operated by any Borrower or any Davel Credit Party.
All such notices shall describe in reasonable detail the nature of the
claim, investigation, condition, occurrence or removal or remedial action and
the relevant Davel Credit Party's response or proposed response thereto. In
addition, the Borrowers agree to provide the Lender with copies of all material
communications by any Borrower or any Davel Credit Party with any Person,
government or governmental agency relating to any of the matters set forth in
clauses (i) through (iv), inclusive, above, and such detailed reports relating
to any of the matters set forth in clauses (i) through (iv), inclusive, above as
may reasonably be requested by the Lender.
(g) Management Discussion and Analysis. Together with each delivery of
consolidated financial statements pursuant to Section 6.01 (a) and the delivery
of financial statements pursuant to Section 6.01(b) at the end of each quarterly
accounting period of each fiscal year, a comparison of the current year to date
financial results against the budgets required to be submitted pursuant to
Section 6.01(c), which comparison shall include a summary, in reasonable detail,
describing the year to date consolidated results of operations of each of (i)
MobilePro and all of its consolidated Subsidiaries, and (ii) the year to date
consolidated results of operations of the Purchaser, each of the Davel Credit
Parties and their respective existing and future Subsidiaries (collectively, the
"DAVEL GROUP").
(h) Other Information. Promptly following the filing or delivery
thereof, (i) copies of any filings and registrations with, and reports to, the
Securities and Exchange Commission or any successor thereto (the "SEC") by any
Borrower or any of the Davel Group, and (ii) copies of all financial statements,
proxy statements, notices and reports as any Borrower or any of the Davel Group
shall send generally to analysts or stockholders and with reasonable promptness,
such other information or documents (financial or otherwise) as the Lender may
reasonably request from time to time.
6.02 Books, Records and Inspections. At MobilePro's reasonable cost and expense
(provided that unless an Event of Default shall have occurred and be continuing,
then not more than two times in any period of 12 consecutive months), MobilePro
will, and will cause its Subsidiaries to, permit, upon reasonable notice to the
Authorized Officer of MobilePro, officers and designated representatives of the
Lender to visit and inspect any of the properties or assets of MobilePro and any
of its Subsidiaries in whomsoever's possession, and to examine the books of
account of MobilePro and any of its Subsidiaries (including the Davel Group) and
discuss the affairs, finances and accounts of MobilePro and of any of its
Subsidiaries with, and be advised as to the same by, its and their senior
executive officers and independent accountants, all at such reasonable times and
intervals and to such reasonable extent as the Lender may desire.
6.03 Insurance. MobilePro will, and will cause each of its Subsidiaries to, at
all times maintain in full force and effect the insurance set forth on Schedule
6.03, and if not so set forth, such other business interruption or related
insurance as may be reasonably requested by Lender, all in such amounts,
covering such risks and liabilities and with such deductibles or self-insured
retentions as are in accordance with normal industry practice for businesses of
similar size operating in similar industries and markets. MobilePro will, and
will cause each of its Subsidiaries to, furnish to the Lender on the Closing
Date and thereafter, upon request of the Lender, a summary of the insurance
carried together with certificates of insurance and other evidence of such
insurance, if any, naming Lender as an additional insured and/or additional loss
payee.
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6.04 Payment of Taxes. MobilePro will pay and discharge, and will cause each of
its Subsidiaries to pay and discharge, all taxes, assessments and governmental
charges or levies imposed upon it or upon its income or profits, or upon any
properties belonging to it, prior to the date on which penalties attach thereto,
and all lawful claims which, if unpaid, might become a Lien or charge upon any
properties of any Borrower or any member of the Davel Group, provided that
neither MobilePro nor any of its Subsidiaries shall be required to pay any such
tax, assessment, charge, levy or claim which is being contested in good faith
and by proper proceedings if it has maintained adequate reserves with respect
thereto in accordance with GAAP or when such failure to pay and discharge such
tax, assessment, charge, levy or claim, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect or would not have a
material adverse effect on the ability of any Borrower or any member of the
Davel Group to perform its obligations under any Credit Document to which it is
a party.
6.05 Corporate Franchises. MobilePro will do, and will cause each of its
Subsidiaries to do, or cause to be done, all things reasonably necessary to
preserve and keep in full force and effect its existence and to preserve its
existence and its material rights and material franchises, provided that any
transaction permitted by Section 7.02 will not constitute a breach of this
Section 6.05.
6.06 Compliance with Statutes, etc. MobilePro will, and will cause each of its
Subsidiaries to, comply with all applicable statutes, regulations and orders of,
and all applicable restrictions imposed by, all governmental bodies and all
stock exchanges and governing bodies (including the NASD), domestic or foreign,
in respect of the conduct of its business and the ownership of its property
other than those the non-compliance with which, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect or
would not have a material adverse effect on the ability of any Borrower or any
Credit Party to perform its obligations under any Credit Document to which it is
a party.
6.07 ERISA. As soon as possible and, in any event, within 15 days after an
executive officer of MobilePro, or within 20 days after the chief financial
officer or chief executive officer of MobilePro or any ERISA Affiliate of
MobilePro, knows or has reason to know of the occurrence of any of the following
events (but in each case, only to the extent that it is reasonably likely that
the aggregate liability of the MobilePro or any of its Subsidiaries attributable
to such event or events will be at least $50,000), MobilePro will deliver to the
Lender sufficient copies for the Lender a certificate of MobilePro, as
applicable, setting forth a description of such occurrence in reasonable detail
and the action, if any, that MobilePro or such ERISA Affiliate is required or
proposes to take in respect of such occurrence, together with any notices
required or proposed to be given to or filed with or by MobilePro or any ERISA
Affiliate of MobilePro, the PBGC, a Plan or Multiemployer Plan participant or
the Plan or the Multiemployer Plan administrator with respect thereto: that a
Reportable Event has occurred; that an accumulated funding deficiency, within
the meaning of Section 412 of the Code or Section 302 of ERISA, has been
incurred or an application may reasonably be expected to be or has been made for
a waiver or modification of the minimum funding standard (including any required
installment payments) or an extension of any amortization period under Section
412 of the Code or Section 303 or 304 of ERISA with respect to a Plan or
Multiemployer Plan; that any contribution required to be made by MobilePro or
any ERISA Affiliate of MobilePro with respect to a Plan or Multiemployer Plan
that is subject to the funding requirements of Section 412 of the Code or
Section 302 of ERISA has not been timely made; that a Plan or Multiemployer Plan
has been or may reasonably be expected to be terminated, reorganized,
partitioned or declared insolvent under Title 1V of ERISA; or that some action
has been taken or proceedings have been instituted which would be reasonably
likely to cause any such termination, reorganization, partition or declaration
or result in the filing of any such application; that a Plan has an Unfunded
Current Liability; that proceedings may reasonably be expected to be or have
been instituted to appoint a trustee to administer a Plan which is subject to
Title IV of ERISA; that a proceeding has been instituted pursuant to Section 515
of ERISA to collect a delinquent contribution to a Multiemployer Plan; that any
Borrower or any direct or indirect Subsidiary of a Borrower, including a member
of the Davel Group, or any ERISA Affiliate of any Borrower or any member of the
Davel Group will or may reasonably be expected to incur any liability to or on
account of the termination of or withdrawal from a Plan under Section 4062,
4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with respect to a Plan or
Multiemployer Plan under Section 401(a)(29), 4971, 4975 or 4980 of the Code or
Section 409 or 502(1) or 502(1) of ERISA or with respect to a group health plan
(as defined in Section 607(1) of ERISA or
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Section 4980B(g)(2) of the Code) under Section 4980E of the Code; or that
MobilePro has incurred or is reasonably likely to incur any liability as a
consequence of any termination or other extraordinary event (other than benefits
in the ordinary course) in connection with any employee welfare benefit plan (as
defined in Section 3(l) of ERISA) that provides benefits to retired employees or
other former employees (other than as required by Section 601 of ERISA) or any
Plan or Multiemployer Plan. Upon the request of the Lender, MobilePro will
deliver to the Lender a complete copy of the annual report (on Internal Revenue
Service Form 5500-series) of each Plan (including, to the extent required, the
related financial and actuarial statements and opinions and other supporting
statements, certifications, schedules and information) most recently required to
be filed with the Internal Revenue Service. In addition to any certificates or
notices delivered to the Lender pursuant to the first sentence hereof, MobilePro
will deliver to the Lender copies of any material notices received by MobilePro
or any ERISA Affiliate of MobilePro (i) from any government agency with respect
to any Plan or (ii) received from any government agency or Plan administrator or
sponsor or trustee with respect to any Multiemployer Plan shall be delivered to
the Lender as soon as practicable, but in no event later than 20 days, after
such request is received.
6.08 Good Repair. MobilePro will, and will cause each of its Subsidiaries to,
ensure that its properties and equipment necessary in the operation of its
business are kept in good repair, working order and condition, normal wear and
tear excepted, and, subject to Section 7.05, that from time to time there are
made in such properties and equipment all needful and proper repairs, renewals,
replacements, extensions, additions, betterments and improvements thereto, to
the extent and in the manner useful or customary for companies in similar
businesses.
6.09 Maintenance of of Fiscal Year and Fiscal Quarters. MobilePro will, and will
cause each of its Subsidiaries to, maintain for financial reporting purposes a
fiscal year and fiscal quarters on the same basis as are maintained by the
Borrowers and the Davel Credit Parties on the Closing Date. In the event that
MobilePro shall elect to change its fiscal year from March 31st to December
31st, it shall provide the Lender with not less than 30 days prior advance
notice of such change to enable the Lender and the Borrowers to review this
Credit Agreement and, if deemed appropriate by Lender, modify the financial
covenants and other applicable provisions contained herein. MobilePro shall not
change its fiscal year without the prior written consent of Lender; which
consent, subject to the foregoing modifications, if any, deemed acceptable by
Lender, shall not be unreasonably withheld or delayed.
6.10 Additional Security; Further Assurances.
(a) Except to the extent prohibited in connection with any Transaction
Indebtedness permitted to be incurred in connection with one or more
Acquisitions permitted pursuant to Section 7.02(c), at the request of the
Lender, MobilePro, at its expense, will, and will cause each other member of the
Davel Group to, grant to the Lender security interests and mortgages in all real
property and personal property acquired after the Closing Date (in the case of
real property, collectively, the "ADDITIONAL MORTGAGES"). All such security
interests and mortgages shall be granted pursuant to documentation reasonably
satisfactory in form and substance to the Lender and shall constitute valid and
enforceable Liens superior to and prior to the rights of all third Persons and
subject to no other Liens except as are permitted by Section 7.03. The
Additional Mortgages, additional security documentation or instruments related
thereto shall have been duly recorded or filed in such manner and in such places
as are required by law to establish, perfect, preserve and protect the Liens in
favor of the Lender required to be granted pursuant to the Additional Mortgages
and additional security documentation and all taxes, fees and other charges
payable in connection therewith shall have been paid in full.
(b) Except to the extent prohibited in connection with any Transaction
Indebtedness permitted to be incurred in connection with one or more
Acquisitions permitted pursuant to Section 7.02(c), MobilePro, at its expense,
will, and will cause each other Davel Credit Party to, at the expense of
MobilePro, make, execute, endorse, acknowledge, file and/or deliver to Lender
from time to time such agreements, documents, vouchers, invoices, schedules,
confirmatory assignments, conveyances, financing statements, transfer
endorsements, powers of attorney, certificates, real property surveys, reports
and other assurances or instruments and take such further steps relating to the
collateral covered by any of the Credit and Security Documents as Lender may
reasonably require (collectively, the "ADDITIONAL CREDIT AND SECURITY
DOCUMENTS"), Furthermore, MobilePro shall cause to be delivered to Lender
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such opinions of counsel, title insurance and other related documents as may be
reasonably requested by the Lender to assure itself that Sections 6.10 and 7.07
have been complied with.
(c) Each action required by this Section 6.10 shall be completed as
soon as possible, but in no event later than 30 days after such action is
requested to be taken by the Lender.
6.11 Compliance with Environmental Laws.
(a) (i) MobilePro will comply, and will cause each of its Subsidiaries
to comply, in all material respects, with all Environmental Laws applicable to
the ownership, lease or use of all Real. Property now or hereafter owned, leased
or operated by MobilePro or its Subsidiaries, will timely pay or cause to be
paid all costs and expenses, incurred in connection with such compliance, and
will keep or cause to be kept all such Real Property free and clear of any Liens
imposed pursuant to such Environmental Laws (or contest the imposition of such
Liens in good faith and by appropriate proceedings) and (ii) MobilePro will not,
and MobilePro will cause each of its Subsidiaries not to, generate, use, treat,
store, release or dispose of, or permit the generation, use, treatment, storage,
release or disposal of Hazardous Materials on any Real Property now or hereafter
owned, leased or operated by MobilePro or any of its Subsidiaries, or transport
or permit the transportation of Hazardous Materials to or from any such Real
Property, except to the extent that the failure to comply with the requirements
specified in clause (i) or (ii) above, either individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect. If required
to do so under any applicable directive or order of any governmental agency,
MobilePro agrees to undertake, and to cause each of its Subsidiaries to
undertake, any cleanup, removal, remedial or other action necessary to remove
and clean up any Hazardous Materials from any Real Property owned, leased or
operated by MobilePro or any of its Subsidiaries in accordance with, in all
material respects, the requirements of all applicable Environmental Laws and in
accordance with, in all material respects, such orders and directives of all
governmental authorities, except to the extent that MobilePro or such Subsidiary
is contesting such order or directive in good faith and by appropriate
proceedings and for which adequate reserves have been established to the extent
required by GAAP; provided that it will not constitute a breach of this Section
6.11 if a Person other than MobilePro and its Subsidiaries takes such action on
behalf of any of MobilePro or its Subsidiaries.
(b) At the request of the Lender at any time and from time to time upon
the reasonable belief by the Lender that MobilePro or any of its Subsidiaries
has breached any representation or covenant herein with respect to any
environmental matters affecting any Mortgaged Property and such breach or
breaches, individually or in the aggregate, could reasonably be expected to have
a Material Adverse Effect and are continuing and/or a notice has been provided
under Section 6.01(f), MobilePro will provide, at its sole cost and expense (or
will cause its relevant Subsidiaries to provide at their sole cost and expense),
an environmental site assessment report reasonable in scope concerning the
environmental matters affecting such Mortgaged Property that is the subject of
the breach or notice under Section 6.01(f) of MobilePro, or any of its
Subsidiaries, prepared by an environmental consulting firm reasonably acceptable
to the Lender, indicating the presence or Release of Hazardous Materials on or
from any such Mortgaged Property and the potential cost of any removal or
remedial action in connection with any Hazardous Materials on such Mortgaged
Property. If MobilePro or any Subsidiary fails to provide the same after 30
days' notice, the Lender may order the same, MobilePro shall grant and hereby
grants, and shall cause each of its Subsidiaries to grant, to the Lender and its
agents access to such mortgaged Property and specifically grants the Lender an
irrevocable nonexclusive license to undertake such an assessment all at
MobilePro's expense, which assessments, if obtained, will be provided to
MobilePro
6.12 Use of Proceeds. The Borrowers shall use the proceeds of the Loan only for
the purpose of purchasing the Davel Credit Parties Debt, the Cerberus
Subordinated Note and the Davel Subject Shares from the Selling Lenders and for
general working capital purposes.
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6.13 Locations, Landlord Waiver Agreements.
(a) MobilePro will give the Lender and Lender not less than 30 days
prior written notice of any change the state of incorporation of MobilePro or
any Subsidiary of MobilePro (provided, that no such change shall adversely
affect Lender's rights and remedies under this Agreement, the Note, the Credit
and Security Agreements or other Loan Documents) or in the location of any of
the Collateral and of any new location of any of the Collateral, other than
locations set forth on Schedule 5.36 hereto or locations at which Lender has
fully perfected its Liens in respect of Collateral located at such locations,
and (b) take all action reasonably requested by Lender to grant to Lender a
perfected first priority Lien on such Inventory.
(b) MobilePro shall use its best efforts to obtain for the Lender, by a
date that shall be not later than 30 days following the Closing Date, a landlord
waiver, no-offset and access agreement (the "LANDLORD WAIVER AGREEMENT") in form
and substance satisfactory to Lender, from the lessor(s) of the location(s)
listed on Schedule 6.13 hereto (the "KEY INVENTORY LOCATION") where the
Borrowers and/or MobilePro Subsidiaries (including Davel Credit Parties)
maintain Inventory in excess of $100,000. In addition, if otherwise requested by
Lender, the Borrowers will use their commercially reasonable best efforts to
furnish to Lender similar Landlord Waiver Agreements from other landlords,
warehousemen or other Persons in possession of Inventory of the Borrowers,
MobilePro Subsidiaries or Davel Credit Parties.
6.14 Payment and Allocation of Extraordinary Receipts. Annexed hereto as
Schedule 6.14 is a list of payments currently scheduled to be paid by certain
telecommunications providers in settlement of claims previously asserted by
Davel Credit Parties or otherwise required by Applicable Law (the "EXTRAORDINARY
RECEIPTS") that are not reflected as accounts receivable or other assets on the
balance sheets of the Davel Credit Parties, and do not represent or constitute
regulatory receipts, dial around revenue receipts, or other collections or
revenues incurred in the ordinary cause of the business of the Davel Credit
Parties. Such Extraordinary Receipts set forth on Schedule 6.14 include, without
limitation, (i) a $2,540,000 payment scheduled to be received by the Davel
Credit Parties from MCI/DeutcheTelcom on or before November 30, 2004 (the
"MCI/DEUTCHETELECOM PAYMENT"); and (ii) a $693,500 payment balance scheduled to
be paid by AT&T and recouped by the Davel Credit Parties under the Davel
Acquisition Documents (the "AT&T PAYMENT"). The Borrowers and each of the Davel
Group do hereby jointly and severally covenant and agree that they shall, within
twenty-four (24) hours of receipt thereof:
(a) apply $2,200,000 of the cash proceeds of the MCI/DeutcheTelcom
Payment, and/or any other Extraordinary Receipts that may be received by them
prior to receipt of the DeutcheTelecom Payment, to the payment of the Initial
Installment of the principal amount of the Loan;
(b) deposit the balance of the cash proceeds from the MCI/DeutcheTelcom
Payment and 100% of the AT&T Payment into the Master Depositary Account referred
to in Section 6.15 below, unless otherwise agreed to in writing by the Lender;
and
(c) deposit all other Extraordinary Receipts set forth on Schedule 6.14
not represented by the MCI/Deutche Telecom Payment or the AT&T Payment (the
"ADDITIONAL EXTRAORDINARY RECEIPTS") into the Master Depositary Account referred
to in Section 6.15 below; provided, that if no Default or Event of Default shall
then have occurred and be continuing, on a quarterly basis, commencing December
31, 2004, fifty percent (50%) of each such Additional Extraordinary Receipts may
be remitted from such Master Depositary Account to MobilePro.
6.15 Master Depositary Account. On the Closing Date, the Lender, the Borrowers
and the Davel Credit Parties shall enter into a depositary account agreement in
the form of EXHIBIT P annexed hereto and made a part hereof (the "DEPOSITARY
ACCOUNT AGREEMENT"), pursuant to which, INTER ALIA, (i) each of the Borrowers
and the Davel Credit Parties shall establish a new master bank account at Bank
of America (the "MASTER DEPOSITARY ACCOUNT"); (ii) the Borrowers and each Davel
Credit Party shall irrevocably and unconditionally instruct Coinmach Corporation
("COINMACH") and the Association of Payphone Collection Clearing House ("APCC")
for dial around revenue payments to remit all coin and other cash collections
and payments otherwise payable to any member of the Davel Group, the Borrowers
or any other MobilePro Subsidiary, as the case may be, to the Master Depositary
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Account; (iii) all operating services and other cash receipts by each member of
the Davel Group shall be remitted directly to such Master Depositary Account;
and (iv) a representative of the Lender shall be a required party signatory for
any one or more disbursements in excess of $250,000 made from such Master
Depositary Account. In addition, upon the occurrence and during the continuation
of any Event of Default, the Lender is authorized to withdraw for its sole
benefit in reduction of the Obligations all amounts then existing in such Master
Depositary Account; provided, however, that the Lender shall not withdraw funds
then existing in such Master Depositary Account if such Event of Default shall
be limited solely to (x) a violation by MobilePro or the Davel Group of any one
or more of its or their financial covenants set forth in Section 7 of this
Credit Agreement, on one occasion only, if MobilePro or the Davel Group shall be
in compliance with such financial covenant(s) in the next succeeding fiscal
quarter or other measuring period; or (y) an Event of Default specified in
Section 8.12 of this Credit Agreement, unless the Lender, in the exercise of its
reasonable commercial judgment, shall determine that such Event of Default is
likely to have a Material Adverse Effect.
6.16 The Registrable Securities.
(a) Following the Closing Date, and in no event later than June 15,
2005, pursuant to the Registration Rights Agreement, MobilePro shall file with
the SEC a registration statement on Form SB-2 (or other appropriate form for
registering securities) to register on behalf of the Lender, Scion or their
designees all of the following securities (collectively, the "REGISTRABLE
SECURITIES") under the Securities Act of 1933, as amended (the "SECURITIES
ACT"): (i) the Warrants; and (ii) the Warrant Shares.
(b) In addition, MobilePro shall grant to the holders of the Warrants
piggyback registration rights to enable such Warrant holders to include their
Registrable Securities in any registration statement that shall be filed by
MobilePro with the SEC under the Securities Act for the benefit of any other
holders of MobilePro securities.
(c) The Warrants shall provide, and each of the Warrant Holders shall
agree, that, without the prior written consent of MobilePro, such Warrant
Holders shall not consummate any public sale or distribution of the Registrable
Securities until November 15, 2005. Thereafter, such Warrant Holders may effect
one or more public sales and distributions of the Registrable Securities;
provided, that, if and for so long as following November 15, 2005 any Cornell
Capital Obligations are outstanding and MobilePro is then requesting and
receiving Advances under the Equity Line of Credit Agreement, public sales and
distributions of Registrable Securities by the Warrant Holders shall be limited
to 10% of the then daily, weekly or monthly trading volume of MobilePro common
stock on any securities exchange.
6.17 The Joinder Agreement. On the Closing Date, immediately following (a) the
consummation of the Purchaser's acquisition of the Davel Credit Party Debt,
Cerberus Subordinated Debt and Davel Subject Shares pursuant to the Davel
Acquisition Documents, and (b) the funding of the Loan by the Lender, the
Borrowers shall cause each of the Davel Credit Parties to execute and deliver to
the Lender a joinder agreement in the form of EXHIBIT Q annexed hereto and made
a part hereof (the "JOINDER AGREEMENT"), pursuant to which each of the Davel
Credit Parties shall covenant and agree to be bound by all of the terms and
conditions of this Credit Agreement, including all covenants and agreements of
the Borrowers contained herein, as though each such Davel Credit Party were an
original party signatory hereto. Any failure of any of the Davel Credit Parties
to duly execute and deliver such Joinder Agreement on the Closing Date shall be
deemed an Event of Default under this Agreement and the Note.
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6.18 Other Matters.
(a) Syndication. Lender shall be allowed to communicate and syndicate
the Loan with, or sell the Loan to, other potential participants in the Loan,
including but not limited to entities or funds affiliated the Lender. The
Borrowers shall cooperate with Lender in any syndication, transfer or sale
efforts, including providing presentation and descriptive materials about
MobilePro and its Subsidiaries, and making management and data available for
presentations to, and due diligence by, the syndication participants or
potential purchasers or transferees, in all cases on a commercially reasonable
basis. Any other Person to whom a portion of the Loan shall be syndicated or
assigned is hereby deemed to be a "Lender" for all purposes of this Agreement,
all Credit and Security Documents and other agreements and instruments executed
in connection with the transactions contemplated by this Agreement.
(b) Appointment of Airlie. Each of the Borrowers and the Davel Credit
Parties agree and acknowledge that Lender, acting in concert with the Lender,
shall have the right to appoint an administrative agent (the "ADMINISTRATIVE
LENDER") who shall have such rights and responsibilities as are customarily
associated with such appointments for purposes of a Loan of this type, which
rights and responsibilities are to be determined by Airlie in its sole
discretion.
6.19 Post-Closing Obligations. The Borrowers have been unable to deliver to the
Lender on the Closing Date, (a) the Collateral Debt and Security Assignment
Agreement, duly executed by ALL of the Selling Lenders, and (b) physical
possession of all of the stock certificates evidencing all securities and
investment property pledged to Lender, as collateral agent, under the Credit and
Security Documents. The Borrowers do hereby covenant and agree that they shall,
by a date that shall be not later than December 15, 2004, obtain and deliver to
the Lender (i) the signatures of all remaining Selling Lenders to such
Collateral Debt and Security Assignment Agreement, and (ii) physical possession
of all remaining certificates evidencing such securities and investment property
pledged to Lender, as collateral agent. The Parties hereto do hereby acknowledge
that a delivery of the foregoing signatures and instruments represent material
Credit and Security Documents and deliveries to the Lender. Accordingly, and
notwithstanding anything to the contrary, express or implied, contained in this
Credit Agreement or any other Loan Document, if the Borrowers shall, for any
reason or no reason, fail or refuse by December 15, 2004 to deliver to the
Lender either a fully executed Collateral Debt and Security Assignment Agreement
(or counterparts thereof), or physical possession of the stock certificates
evidencing all securities and investment property pledged to Lender, as
collateral agent, under the Credit and Security Documents, an Event of Default
hereunder and under all Loan Documents shall be deemed to have occurred.
SECTION 7. NEGATIVE COVENANTS. The Borrowers and the Davel Credit Parties do
hereby jointly and severally covenant and agree that for so long as this
Agreement is in effect, and until the Note, the Loan, and all Interest, Fees and
all other Obligations owed to the Lender (other than Obligations relating solely
to the Warrants and any Common Stock issued upon exercise thereof) shall have
been paid or performed in full:
7.01 Changes in Business, None of the Borrowers nor any of the MobilePro
Subsidiaries or the Davel Credit Parties alter, in any material respect, the
character of their respective businesses from those conducted on the Closing
Date and reasonable extensions thereof.
7.02 Consolidation, Merger, Sale of Assets, Acquisitions, etc. MobilePro and the
Davel Group shall not, nor will the Borrowers or the Davel Credit Parties permit
any of its or their Subsidiaries (including the Purchaser, the Existing
MobilePro Subsidiaries, any other direct or indirect Subsidiaries of MobilePro
or any member of the Davel Group) to (i) wind up, liquidate or dissolve its
affairs, or enter into any transaction of merger or consolidation, (ii) sell or
otherwise dispose of all or any part of its property or assets (other than
Inventory or financial instruments, in the ordinary course of business and stock
dividends pursuant to spinout transactions as set forth on Schedule 7.02), or
(iii) except for purchases of Inventory, leases, or Equipment in the ordinary
course of business, purchase, lease or otherwise acquire (whether by purchase of
securities or assets, merger, consolidation or like combination) all or any part
of the securities, assets or property of any Person (individually or
collectively, an "ACQUISITION"), or agree to do any of the foregoing at any
future time, except that the following shall be permitted:
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(a) any member of the Davel Group may be merged or consolidated with or
into, or be liquidated into, another member of the Davel Group, or all or any
part of the business, properties and assets of any one member of the Davel Group
may be conveyed, leased, sold or transferred to any other member of the Davel
Group;
(b) any Existing MobilePro Subsidiary (other than a member of the Davel
Group) or any Subsidiary of an Existing MobilePro Subsidiary (other than a
member of the Davel Group) may be merged or consolidated with or into, or be
liquidated into, another Existing MobilePro Subsidiary (other than a member of
the Davel Group), or all or any part of the business, properties and assets of
any one Existing MobilePro Subsidiary or Subsidiary of an Existing MobilePro
Subsidiary (other than a member of the Davel Group) may be conveyed, leased,
sold or transferred to any other Existing MobilePro Subsidiary (other than a
member of the Davel Group);
(c) MobilePro, any Existing MobilePro Subsidiary or any newly formed
MobilePro Subsidiary, including any member of the Davel Group (each, an
"ACQUIROR") may consummate an Acquisition of any Person (the "ACQUIRED ENTITY"),
if, and only if, ALL of the following conditions shall be satisfied:
(i) each Acquired Entity shall have operated profitably for at
least six (6) months prior to the date of such Acquisition; and
(ii) such Acquisition shall be accretive to Consolidated
Operating Cash Flow and Consolidated EBITDA of MobilePro and its direct or
indirect Subsidiaries; and
(iii) the aggregate consideration payable, including
"Transaction Indebtedness" (as defined below) incurred or assumed in connection
with such Acquisition, shall not exceed (A) five (5) times the trailing EBIT or
Consolidated EBIT of the Acquired Entity, and (B) six (6) times the trailing
EBITDA or Consolidated EBITDA of the Acquired Entity; in each case, for the
twelve (12) consecutive months ending on the month immediately preceding the
date of such Acquisition; and
(iv) after giving effect to such Acquisition (A) the aggregate
amount of Indebtedness incurred or assumed by such Acquiror and the Acquired
Entity in connection with such Acquisition (individually or collectively,
"TRANSACTION INDEBTEDNESS") does not exceed three (3) times the Consolidated
Operating Cash Flow of the Acquiror and the Acquired Entity for the twelve (12)
consecutive months ending on the month immediately preceding the date of such
Acquisition; and (B) on a proforma basis, after giving effect to such
Acquisition, MobilePro and its consolidated Subsidiaries (including the Acquired
Entity) shall be in compliance with all other financial covenants and agreements
set forth in this Section 7;
(d) capital expenditures to the extent permitted and within the
limitations set forth in Section 7.05 hereof;
(e) the investments, acquisitions and transfers or dispositions of
properties to the extent permitted pursuant to Section 7.06;
(f) MobilePro and each of its Subsidiaries (including any Existing
MobilePro Subsidiary or member of the Davel Group) may lease (as lessee) real or
personal property in the ordinary course of business (so long as such lease does
not create a Capitalized Lease Obligation not otherwise permitted by Section
7.04(e));
(g) licenses or sublicenses by MobilePro and its Subsidiaries of
intellectual property in the ordinary course of business not prohibited by
Section 7.01, provided that such licenses or sublicenses shall not interfere
with the business of either of (i) MobilePro and any of its Subsidiaries, or
(ii) any member of the Davel Group; and
(h) sales or dispositions of assets for their fair market value and to
the extent that the aggregate Net Cash Proceeds received from all such sales and
dispositions permitted by this Section 7.02(h) shall not exceed $50,000 in any
fiscal year (except for stock dividends pursuant to spinout transactions as set
forth on Schedule
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7.02); provided that (x) each such sale shall be in an amount at least equal to
the fair market value thereof, (y) at least 100% of the proceeds from such sale
or disposition shall be in the form of cash and (z) the Net Cash Proceeds of any
such sale are applied to repay the Loan without Prepayment Premium.
Notwithstanding the foregoing provisions of this Section 7.02 or any other
provision of this Credit Agreement to the contrary, without the express prior
written consent of the Lender: (i) neither MobilePro nor any Existing MobilePro
Subsidiary may be merged or consolidated with or into any member of the Davel
Group, (ii) no member of the Davel Group may be merged or consolidated with or
into MobilePro or any Existing MobilePro Subsidiary, (iii) the assets and
properties of any Existing MobilePro Subsidiary may not be transferred to or
commingled with the assets and properties of any member of the Davel Group, (iv)
the assets and properties of any member of the Davel Group may not be
transferred to or commingled with the assets and properties of MobilePro or any
of the Existing MobilePro Subsidiaries, and (v) the sale or disposition of any
of the shares of capital stock of any direct or indirect Subsidiary of MobilePro
(including any Existing MobilePro Subsidiary or any of the members of the Davel
Group) shall be prohibited.
7.03 Liens. MobilePro shall not, nor will MobilePro permit any of its direct or
indirect Subsidiaries (including any Existing MobilePro Subsidiary, the
Purchaser or any of the members of the Davel Group) to, create, incur, assume or
suffer to exist any Lien upon or with respect to any property or assets of any
kind (real or personal, tangible or intangible) of MobilePro, any Existing
MobilePro Subsidiary, the Purchaser, any of the members of the Davel Group, or
any of their direct or indirect Subsidiaries, whether now owned or hereafter
acquired, or sell any such property or assets subject to an understanding or
agreement, contingent or otherwise, to repurchase such property or assets
(including sales of accounts receivable, notes or financial instruments with
recourse to MobilePro, any Existing MobilePro Subsidiary, any member of the
Davel Group or any of their direct or indirect Subsidiaries) or assign any right
to receive income, except for the following (collectively, "PERMITTED LIENS"):
(a) Liens for taxes, assessments and other governmental charges or
levies not yet due or Liens for taxes, assessments and other governmental
charges or levies being contested in good faith and by appropriate proceedings
for which adequate reserves (in the good faith judgment of the management of
MobilePro) have been established;
(b) Liens in respect of property or assets of MobilePro, any Existing
MobilePro Subsidiary, the Davel Group or any of their Subsidiaries imposed by
law which were incurred in the ordinary course of business, such as carriers',
warehousemen's and mechanics' Liens, statutory landlords' Liens, and other
similar Liens arising in the ordinary course of business, and (x) which do not
individually or in the aggregate materially detract from the value of such
property or assets or materially impair the use thereof in the operation of the
business of MobilePro, any Existing MobilePro Subsidiary, the Davel Group or any
of their Subsidiaries or (y) which are being contested in good faith by
appropriate proceedings, which proceedings have the effect of preventing the
forfeiture or sale of the property or asset subject to such Lien;
(c) Liens created by or pursuant to the Selling Lenders Loan Documents,
(d) Liens created under the Cornell Security Agreements, as superceded
by the Credit and Security Documents, in favor of Cornell Capital securing the
Cornell Obligations, but EXCLUDING obligations of MobilePro under the Equity
Line of Credit Agreements;
(e) Liens in favor of the Lender created by or pursuant to this
Agreement or the other Credit and Security Documents;
(f) Liens created pursuant to Capital Leases permitted by Section
7.04(d);
(g) Liens arising from judgments, decrees or attachments and Liens
securing appeal bonds arising from judgments, in each case in circumstances not
constituting an Event of Default under Section 8.09;
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(h) Liens (other than any Lien imposed by ERISA) incurred or deposits
made in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of social security,
governmental insurance or government benefits or to secure the performance of
tenders, statutory obligations, surety and appeal bonds, bids, leases,
government contracts, performance and return-of-money bonds and other similar
obligations incurred in the ordinary course of business (exclusive of
obligations in respect of the payment for borrowed money);
(i) Easements, rights-of-way, restrictions, minor defects or
irregularities in title and other similar charges or encumbrances not
interfering in any material respect with the ordinary conduct of the business of
MobilePro or its Subsidiaries;
(j) Purchase money Liens securing payables arising from the purchases
by the Borrowers, any MobilePro Subsidiary or any member of the Davel Group of
any equipment or goods in the normal course of business, provided that such
payables do not constitute Indebtedness;
(k) Any interest or title of a lessor under any lease permitted by this
Agreement;
(l) Liens incurred in connection with Transaction Indebtedness, to the
extent permitted pursuant to Section 7.04(f) of this Credit Agreement;
(m) Liens arising pursuant to purchase money mortgages or security
interests securing Indebtedness representing the purchase price of assets
acquired by any of the Borrowers, MobilePro Subsidiaries or member of the Davel
Group after the Closing Date, provided that any such Liens attach only to the
assets so acquired and that all Indebtedness secured by Liens created pursuant
to this clause (m) shall not exceed, at any time, an amount equal to $50,000
less the aggregate Capitalized Lease Obligations under Capital Leases then
outstanding; and
(m) other Liens existing on the Closing Date which are set forth on
Schedule 5.11 annexed hereto (collectively, "EXISTING LIENS").
7.04 Indebtedness. MobilePro shall not, nor will MobilePro permit any of its
direct or indirect Subsidiaries (including the Purchaser, any Existing MobilePro
Subsidiary or any member of the Davel Group) to, contract, create, incur, assume
or suffer to exist any Indebtedness; provided, that subject at all time to
compliance with the provisions of Section 7.05 below, the following Indebtedness
shall be permitted (collectively, "PERMITTED INDEBTEDNESS"):
(a) Indebtedness incurred pursuant to this Agreement and the other
Credit and Security Documents;
(b) Indebtedness for money borrowed or Capitalized Lease Obligations
outstanding as at the Closing Date that is owed by (i) MobilePro, (ii) any
Existing MobilePro Subsidiary, (iii) the Purchaser, or (iv) any of the Davel
Credit Parties, other than Davel Credit Parties Debt, the Cerberus Subordinated
Debt or the Cornell Capital Obligations (collectively, the "EXISTING DEBT"),
including any refinancing, refunding, renewal or replacement of such Existing
Debt; provided, that such refinancing, refunding, renewal or replacement of
Existing Debt shall not result in any Lien on assets or properties not
theretofore subject to a Lien pursuant to such Indebtedness and such
refinancing, refunding, renewal or replacement shall not constitute Indebtedness
or other obligations in amounts in excess existing on Closing Date (as reduced
after the Closing Date pursuant to payments thereon);
(c) the Davel Credit Parties Debt and the Cerberus Subordinated Debt;
(d) the Cornell Capital Obligations including any refinancing,
refunding, renewal or replacement thereof, provided, that such refinancing,
refunding, renewal or replacement of the Cornell Capital Obligations shall (i)
be subject to the Intercreditor Agreement and the Cornell Assignment, and (ii)
not result in any Lien on assets or properties not theretofore subject to a Lien
pursuant to such Indebtedness and such refinancing, refunding, renewal
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or replacement shall not constitute Indebtedness or other obligations in amounts
in excess existing on Closing Date (as reduced after the Closing Date pursuant
to payments thereon);
(e) Capitalized Lease Obligations pursuant to purchase money mortgages
or security interests permitted by Section 7.03(j) and unsecured Indebtedness
under this clause (e) of the Borrowers or the Davel Group, provided that the
aggregate Capitalized Lease Obligations under all Capital Leases, all
Indebtedness pursuant to purchase money mortgages or security interests
permitted by Section 7.03(j) and all unsecured Indebtedness under this clause
(e), in any case, entered into or incurred after the Closing Date shall not
exceed $100,000, individually or in the aggregate; or
(f) Transaction Indebtedness incurred in connection with one or more
Acquisitions permitted pursuant to Section 7.02(c) above (a "PERMITTED
ACQUISITION"); PROVIDED, THAT, such Transaction Indebtedness:
(i) if secured Indebtedness, shall be secured only by Liens on
the specific assets and properties of the Acquired Entity;
(ii) is not guaranteed by MobilePro or any other MobilePro
Subsidiary, including any Existing MobilePro Subsidiary or member of the Davel
Group; and
(iii) is not cross collateralized by Liens on any other assets
or properties of MobilePro or any other MobilePro Subsidiary, including any
Existing MobilePro Subsidiary or member of the Davel Group.
7.05 Limitation of Total Indebtedness and Capital Expenditures. MobilePro shall
not, nor will it permit any of its direct or indirect Subsidiaries (including
any Existing MobilePro Subsidiary or member of the Davel Group) to contract,
create, incur, assume or suffer to exist, as at the end of any fiscal quarter of
MobilePro, with respect to EACH OF (i) MobilePro and all MobilePro Subsidiaries
(including Existing MobilePro Subsidiaries and the Davel Group); and (ii) the
Davel Group, on an independent stand alone basis:
(a) Consolidated Debt (inclusive of Consolidated Capital Expenditures)
which, after giving effect to the incurrence thereof (including Permitted
Indebtedness contemplated by Section 7.04(f)), would cause such Consolidated
Debt to exceed three (3) times Consolidated Operating Cash Flow for the 12
consecutive months ending in the month immediately preceding the date of
determination; provided, that, for purposes of this Section 7.05(a),
Consolidated Debt and Consolidated Operating Cash Flow shall be calculated on a
proforma basis after giving effect to any Acquisition permitted pursuant to this
Credit Agreement; or
(b) Consolidated Debt (inclusive of Consolidated Capital Expenditures)
which, after giving effect to the incurrence thereof (including Permitted
Indebtedness contemplated by Section 7.04(f)), would cause the Consolidated
Interest Coverage Ratio of either (i) MobilePro and all of its Subsidiaries, as
a consolidated whole, or (ii) the Davel Group, as an independent group of
entities, to be less than 3.0:1 as at March 31, 2005 or any fiscal quarter
thereafter; or
(c) Consolidated Capital Expenditures of either (i) MobilePro and all
of its Subsidiaries, as a consolidated whole, or (ii) the Davel Group, as an
independent group of entities, during the twelve (12) month period ending
November 15, 2005 to exceed $100,000; provided if the maximum amount which is
permitted to be expended in respect of Consolidated Capital Expenditures is not
fully expended during the twelve month period ending November 15, 2005, the
maximum amount which may be expended during the immediately succeeding period
pursuant to Section 7.05(b) shall be increased by such unutilized amount.
7.06 Advances, Investments and Loans. MobilePro will not, nor will MobilePro
permit any of its Subsidiaries (including any member of the Davel Group) to,
lend money or credit or make advances to any Person, or purchase, acquire or
invest in any stock, obligations or securities of, or any other interest in, or
make any capital contribution to, or purchase or otherwise acquire all or
substantially all of the assets or business of, or a division or product line
of, any Person, except:
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(a) MobilePro and any of its Subsidiaries may invest in cash and Cash
Equivalents;
(b) MobilePro and any of its Subsidiaries may acquire and hold
receivables owing to them, if created or acquired in the ordinary course of
business and payable or dischargeable in accordance with customary trade terms;
(c) in connection with Acquisitions permitted under Section 7.02 and
the intercompany Indebtedness permitted by Section 7.04(b);
(d) loans and advances to officers, directors and employees in the
ordinary course of business in an aggregate principal amount not to exceed
$25,000 at any time outstanding;
(e) MobilePro and any of its Subsidiaries may acquire and own
investments (including debt obligations) received in connection with the
bankruptcy or reorganization of suppliers and customers and in settlement of
delinquent obligations of, and other disputes with, customers and suppliers
arising in the ordinary course of business;
(f) MobilePro and any of the Existing MobilePro Subsidiaries may make
equity contributions to the capital of MobilePro or any other Existing MobilePro
Subsidiary; and
(g) the acquisition of financial instruments acquired in the ordinary
course of business.
7.07 Limitation on Creation of Subsidiaries. MobilePro will not, nor will
MobilePro permit any of its Subsidiaries (including the Davel Credit Parties)
to, establish, create or acquire any Subsidiary; provided that, MobilePro, any
Existing MobilePro Subsidiary or any of the Davel Credit Parties shall be
permitted to establish or create, but not acquire (other than Acquisitions
permitted under Section 7.02), Wholly-Owned Subsidiaries so long as immediately
following such creation:
(a) 100% of the capital stock, membership interests or other equity or
ownership interests of such new Subsidiary (i) if a direct or indirect
Subsidiary of an Existing MobilePro Subsidiary, is pledged to the Lender, for
itself and as collateral agent for the primary benefit of Cornell Capital
pursuant to the MobilePro Pledge Agreement, (ii) if a direct or indirect
Subsidiary of Purchaser or a member of the Davel Group or a newly formed
MobilePro Subsidiary, is pledged to the Lender for itself and as collateral
agent for the secondary benefit of Cornell Capital under the Purchaser Pledge
Agreement, as applicable, and the certificates representing such stock,
membership interests or other equity or ownership interests, together with
powers duly executed in blank, are delivered to the Lender, for itself and as
collateral agent for Cornell Capital under the MobilePro Pledge Agreement or the
Purchaser Pledge Agreement; and
(b) such new Subsidiary executes a counterpart of the Davel Credit
Parties Guaranties, the MobilePro Pledge Agreement, the Purchaser Pledge
Agreement, the Borrowers Security Agreement or the Davel Credit Parties Security
Agreement, as applicable, and an Additional Mortgage, if applicable, in each
case on the same basis (and to the same extent) as such Subsidiary would have
executed such Credit and Security Documents if it were a Davel Credit Party on
the Closing Date.
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7.08 Prepayments; Modifications.
(a) For so long as Cornell Capital Obligations and the Obligations to
the Lender are outstanding, neither MobilePro nor any MobilePro Subsidiary shall
voluntarily prepay any of the Cornell Capital Obligations or any of the
Obligations to the Lender on any occasion(s) prior to the Maturity Dates or
Final Maturity Dates thereof, without, in each instance, the prior written
consent of both Airlie and Cornell Capital, and any such prepayment so made
without such joint written consent of both Airlie and Cornell Capital shall be
held in trust by the recipient for the benefit of the other. Notwithstanding the
foregoing, in the event that:
(i) no Default or Event of Default under this Credit Agreement
shall have occurred, MobilePro shall have the right to request and receive
Advances from Cornell Capital under the Equity Line of Credit Agreements and use
the proceeds from the sale of its Common Stock to Cornell Capital to pay and
reduce the Cornell Capital Obligations or as otherwise permitted pursuant to the
Cornell Assignment Agreement or Section 7.09 of this Credit Agreement; and
(ii) any Default or Event of Default under this Credit
Agreement shall have occurred, pursuant to the Cornell Assignment Agreement,
Airlie shall succeed to all of MobilePro's rights under the Equity Line of
Credit Agreements, and 50% of all additional Advances under such Equity Line of
Credit Agreements in excess of $5.0 million, individually or in the aggregate,
shall be paid to Airlie in reduction of the Obligations under the Loan
Documents, and (A) 100% of such additional Advances up to $5.0 million in the
aggregate, and (B) 50% of such Advances after the initial $5.0 million shall be
credited by Cornell Capital in reduction of the Cornell Capital Obligations.
(b) MobilePro will not, nor will MobilePro permit any of its
Subsidiaries (including any member of the Davel Group) to (i) amend, modify or
change in any manner any provisions of any certificate of incorporation
(including, without limitation, by the filing of any certificate of
designation), limited liability company agreement, limited partnership agreement
or by-laws of the Borrowers, the Existing MobilePro Subsidiaries or any member
of the Davel Group, or any agreement with respect to the capital stock, equity
or ownership interests of the Borrowers, the Existing MobilePro Subsidiaries or
any member of the Davel Group, if such amendment, modification, or change would
reasonably be expected to have a material adverse effect on the ability of the
Lender to enforce its rights and remedies provided by any of the Loan Documents,
or (ii) modify or amend the terms any of the Equity Line of Credit Agreements or
Cornell Capital Obligations (as extended pursuant to the Intercreditor
Agreement).
7.09 Issuances of Capital Stock. MobilePro will not, nor will MobilePro permit
any of its direct or indirect Subsidiaries (including any Existing MobilePro
Subsidiary or member of the Davel Group) to sell or issue, or enter into any new
agreement with respect to the sale or issuance of, any shares of capital stock
of MobilePro or any of its direct or indirect Subsidiaries; PROVIDED, however,
that MobilePro shall have the right to issue directly shares of the capital
stock of MobilePro (but no direct or indirect Subsidiary of MobilePro), if (and
only if) the net proceeds of any of such new issuances of capital stock, after
customary fees and transaction expenses ("CAPITAL STOCK NET PROCEEDS") shall be
used solely:
(a) to reduce the Obligations to the Lender, except that, prior to May
15, 2005 (other than amounts paid in respect of accrued Cash Interest, when
due), shall be held in a special interest bearing escrow account (in form and
content acceptable to the Lender) for the sole benefit of Lender and remitted to
Lender as a prepayment of the Loan within three (3) Business Days following May
15, 2005;
(b) to reduce the Cornell Capital Obligations; or
(c) for so long as no Default or Event of Default shall have occurred,
to finance Acquisitions permitted under Section 7.02(c) of this Credit
Agreement, or be applied to working capital or other general corporate purposes.
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From and after the occurrence of any Default or Event of Default, all Capital
Stock Net Proceeds shall (unless otherwise agreed in writing by the Lender) be
used solely to reduce the Obligations to the Lender and the Cornell Capital
Obligations, on a pari passu basis, calculated based upon the amount by which
the then outstanding Obligations to the Lender and the Cornell Capital
Obligations bear to each other.
7.10 Dividends and Distributions, etc.
(a) Except for (i) the stock dividend to be declared and paid by
MobilePro, as described on Schedule 7.10 hereto, (ii) a one-time payment of
$561,000 from the Davel Credit Parties to be paid to MobilePro or the Purchaser
on the Closing Date, and (iii) Additional Extraordinary Receipts, but only to
the extent permitted pursuant to Section 6.14 of this Credit Agreement,
MobilePro will not, nor will it permit any of its Subsidiaries (including the
Existing MobilePro Subsidiaries or any member of the Davel Group) to, declare or
pay any management fees, corporate charges, dividends or return any capital to,
its stockholders or members, as applicable, or authorize or make any other
payment, distribution or delivery of property (including cash) to MobilePro or
its stockholders or members, as applicable, as such, or redeem, retire, purchase
or otherwise acquire, directly or indirectly, for any consideration, any shares
of any class of its capital stock, or other equity or ownership interests now or
hereafter outstanding (or any warrants for or options, convertible or
exchangeable securities or stock appreciation or other rights in respect of any
of such shares or interests), or set aside any funds for any of the foregoing
purposes (all of the foregoing "DIVIDENDS AND DISTRIBUTIONS"). Notwithstanding
the foregoing, for so long as no Default or Event of Default shall have occurred
and be continuing, the Davel Group may pay cash Dividends and Distributions to
MobilePro to the extent that the aggregate amount of Dividends and Distributions
so paid in any one month shall not exceed the sum of (i) the Cash Interest
payable to the Lender under the Note, plus (ii) $50,000. All other Dividends and
Distributions otherwise payable by any member of the Davel Group shall at all
times be remitted only to the Master Depositary Account referred to in Section
6.15 of this Credit Agreement, and paid from such Master Depositary Account only
as contemplated by the Depositary Account Agreement and Section 6.14 of this
Credit Agreement.
(b) MobilePro will not, nor will it permit any of its Subsidiaries
(including the Existing MobilePro Subsidiaries or members of the Davel Group)
to, create or otherwise cause or suffer to exist any encumbrance or restriction
which prohibits or otherwise restricts (A) the ability of any Subsidiary of
MobilePro to (a) pay Dividends or Distributions or pay any Indebtedness of such
Subsidiary owed to MobilePro or any of its Subsidiaries, (b) make loans or
advances to MobilePro or any of its Subsidiaries, (c) transfer any of its
properties or assets to MobilePro or any of its Subsidiaries or (B) the ability
of MobilePro or any of its Subsidiaries to create, incur, assume or suffer to
exist any Lien upon its property or assets to secure the Obligations, other
than, in the cases of both clauses (A) and (B) above, prohibitions or
restrictions existing under or by reason of: (i) this Agreement and the other
Credit and Security Documents and the Davel Acquisition Documents; (ii)
applicable law; (iii) customary non-assignment provisions entered into in the
ordinary course of business and consistent with past practices; (iv) any
restriction or encumbrance with respect to MobilePro of any of its Subsidiaries
imposed pursuant to an agreement which has been entered into for the sale or
disposition of all or substantially all of the capital stock or assets of such
Subsidiary, so long as such sale or disposition is permitted under this
Agreement; and (v) Liens permitted under Section 7.03 and Liens securing
permitted Transaction Indebtedness) and any documents or instruments governing
the terms of any Indebtedness or other obligations secured by any such Liens,
provided that such prohibitions or restrictions apply only to the assets subject
to such Liens.
7.11 Transactions with Affiliates. MobilePro will not, nor will it permit any of
its Subsidiaries (including the Existing MobilePro Subsidiaries or any member of
the Davel Group) to, enter into any transaction or series of transactions,
whether or not in the ordinary course of business, with any Affiliate of any of
the Borrowers, any Existing MobilePro Subsidiaries or the Davel Group other than
on terms and conditions at least as favorable to MobilePro or such Subsidiary as
would be obtainable by MobilePro or such Subsidiary at the time in a comparable
arm's-length transaction with a Person other than an Affiliate of any of the
Borrowers, an Existing MobilePro Subsidiary or the Davel Group, provided that
such transaction or series of transactions would not otherwise be prohibited by
any Loan Documents.
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7.12 Consolidated EBITDA of Davel Group. MobilePro will not permit, as of the
last day of any fiscal quarter or month set forth below, the Consolidated EBITDA
of the Davel Group for any measuring period ending on the last day of any such
fiscal quarter, to be less than the amount set forth below opposite such fiscal
quarter:
Month Amount
----- ------
December 31, 2004 $600,000
Fiscal Quarter Amount
-------------- ------
March 31, 2005 $2,550,000
June 30, 2005 $2,550,000
September 30, 2005 $2,850,000
December 31, 2005 $2,750,000
March 31, 2006 $2,650,000
7.13 Tangible Net Worth. MobilePro will not permit the Consolidated Tangible Net
Worth of MobilePro and its Consolidated MobilePro Subsidiaries (including the
Existing MobilePro Subsidiaries and the Davel Group) as at the last day of any
fiscal quarter to be less than negative sixteen million nine hundred fifty
thousand dollars ($16,950,000).
7.14 Minimum Consolidated EBITDA of MobilePro. MobilePro will not permit, as of
the last day of any fiscal quarter or month set forth below, Consolidated EBITDA
of MobilePro and its Consolidated MobilePro Subsidiaries (including the Existing
MobilePro Subsidiaries and the Davel Group) for any period ending on the last
day of any such fiscal quarter, to be less than the amount set forth below
opposite such fiscal quarter
Month Amount
----- ------
December 31, 2004 ($900,000)
Fiscal Quarter Amount
-------------- ------
March 31, 2005 $3,350,000
June 30, 2005 $3,600,000
September 30, 2005 $4,050,000
December 31, 2005 $4,400,000
March 31, 2006 $4,600,000
SECTION 8. EVENTS OF DEFAULT. The occurrence and continuation (beyond any
applicable grace period of cure specified below) of any of the following
specified events, shall constitute an Event of Default under this Agreement
(each, an "EVENT OF DEFAULT"):
8.01 Payments. The Borrowers shall (i) default in the payment when due of the
Initial Installment or the Final Installment of the Loan, when due, or (ii)
default, and such default shall continue for three (3) or more Business Days, in
the payment when due, any Interest on the Loan or any Fees or any other amounts
owing hereunder or under any other Credit and Security Document; or
8.02 Representations, etc. Any representation, warranty or statement made by any
Borrower or any Davel Credit Party herein or in any other Loan Document or in
any statement or certificate delivered or required to be delivered pursuant
hereto or thereto shall prove to be untrue in any material respect on the date
as of which made or deemed made; or
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8.03 Covenants. Any Borrower or Davel Credit Party shall (a) default in the due
and timely performance or observance by it of any term, covenant or agreement
contained in Section 6 or Section 7 of this Agreement (including, without
limitation (i) the covenant and agreement of Borrowers to deliver a duly
executed Joinder Agreement of the Davel Credit Parties, as set forth in Section
6.17 above, and (ii) the post-closing obligations, if any, described in Section
6.19 above), or (b) default, in any material respect, in the due performance or
observance by it of any term, covenant or agreement (other than those referred
to in Section 8.01, 8.02, or clause (a) of this Section 8.03) contained in any
Collateral and Security Document or other Loan Document; and such default shall
continue unremedied for a period of at least 20 days after any Borrower or Davel
Credit Party obtains knowledge thereof including, without limitation, as a
result of written notice to the defaulting party by the Lender.
8.04 Default under Other Agreements. (a) Any Borrower, MobilePro Subsidiary or
member of the Davel Group shall (i) default in any payment with respect to any
Indebtedness (other than the Obligations) with an outstanding principal amount
in excess of $100,000, individually or in the aggregate, beyond the period of
grace, if any, applicable thereto or (ii) default in the observance or
performance of any agreement or condition relating to any Indebtedness (other
than the Obligations) with an outstanding principal amount in excess of
$100,000, individually or in the aggregate, or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness
(or a trustee or agent on behalf of such holder or holders) to cause, any such
Indebtedness to become due prior to its stated maturity; or (b) any Indebtedness
with an outstanding principal amount in excess of $100,000, individually or in
the aggregate, of any Borrower, MobilePro Subsidiary or any member of the Davel
Group shall be declared to be due and payable prior to the stated maturity
thereof; or
8.05 Bankruptcy, etc. Any Borrower, MobilePro Subsidiary or member of the Davel
Group shall commence a voluntary case concerning itself under Title 11 of the
United States Code entitled "Bankruptcy," as now or hereafter in effect, or any
successor thereto (the "BANKRUPTCY CODE"); or an involuntary case is commenced
against any Borrower, MobilePro Subsidiary or any member of the Davel Group and
the petition is not controverted within 10 days, or is not dismissed within 60
days, after commencement of the case; or a custodian (as defined in the
Bankruptcy Code) is appointed for, or takes charge of, all or substantially all
of the property of any Borrower, MobilePro Subsidiary or any member of the Davel
Group; or any Borrower, MobilePro Subsidiary or any member of the Davel Group
commences any other proceeding under any reorganization, arrangement, adjustment
of debt, relief of debtors; dissolution, insolvency or liquidation or similar
law of any jurisdiction whether now or hereafter in effect relating to MobilePro
or its Subsidiaries; or there is commenced against any Borrower, MobilePro
Subsidiary or any member of the Davel Group any such proceeding which remains
undismissed for a period of 60 days; or any Borrower, MobilePro Subsidiary or
any member of the Davel Group is adjudicated insolvent or bankrupt; or any order
of relief or other order approving any such case or proceeding is entered; or
any Borrower, MobilePro Subsidiary or any member of the Davel Group makes a
general assignment for the benefit of creditors; or any corporate action is
taken by any Borrower, MobilePro Subsidiary or any member of the Davel Group for
the purpose of effecting any of the foregoing; or
8.06 ERISA. (a) Any Plan or Multiemployer Plan shall fail to satisfy the minimum
funding standard required for any plan year or part thereof under Section 412 of
the Code or Section 302 of ERISA or a waiver of such standard or extension of
any amortization period is sought or granted under Section 412 of the Code or
Section 303 or 304 of ERISA, a Reportable Event shall have occurred, any Plan
which is subject to Title IV of ERISA shall have had or is likely to have a
trustee appointed to administer such Plan, any Plan or Multiemployer Plan which
is subject to Title IV of ERISA is, shall have been or is likely to be
terminated or to be the subject of termination proceedings under ERISA, any Plan
shall have an Unfunded Current Liability, a contribution required to be made by
any Borrower, MobilePro Subsidiary or any member of the Davel Group or any ERISA
Affiliate of any Borrower, MobilePro Subsidiary or any member of the Davel Group
with respect to a Plan or Multiemployer Plan that is subject to the funding
requirements of Section 412 of the Code or Section 302 of ERISA has not been
timely made, any Borrower, MobilePro Subsidiary or any member of the Davel Group
or any ERISA Affiliate of any Borrower or any member of the Davel Group has
incurred or is likely to incur any liability to or on account of a Plan under
Section 409, 502(1), 502(I), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of
ERISA or Section 401(a)(29), 4971 or 4975 of the Code or on account of 'a group
health plan (as defined in Section 607(1) of ERISA or Section
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4980B(g)(2) o f the Code) under Section 4980B of the Code, or any Borrower,
MobilePro Subsidiary or member of the Davel Group has incurred or is likely to
incur liabilities pursuant to one or more employee welfare benefit plans (as
defined in Section 3(1) of ERISA) that provide benefits to retired employees or
other former employees (other than as required by Section 601 of ERISA) or Plans
or Multiemployer Plans; (b) there shall result from any such event or events the
imposition of a Lien, the granting of a security interest, or a liability or a
material risk of incurring a liability; and (c) such lien, security interest or
liability, individually, and/or in the aggregate, in the reasonable opinion of
the Lender, could reasonably be expected to have, a Material Adverse Effect; or
8.07 Credit and Security Documents. (a) Any Credit or Security Document shall
cease to be in full force and effect, or shall cease to give Lender the Liens or
any of the rights, powers and privileges purported to be created thereby in
favor of Lender, or (b) any Borrower, MobilePro Subsidiary or any Davel Credit
Party shall default beyond any applicable period of grace in the due performance
or observance of any term, covenant or agreement on its part to be performed or
observed pursuant to any such Security Document and (i) such default (other than
a default arising from the failure to deliver collateral) shall continue
unremedied for a period of at least 20 days after written notice to the
defaulting party by Lender or (ii) such default arises from the failure to
deliver collateral; or
8.08 Guaranty. Any Guaranty or any provision thereof shall cease to be in full
force and effect, or any Guarantor or any Person acting by or on behalf of such
Guarantor shall deny or disaffirm such Guarantor's obligations under the
Guaranty to which it is a party or any Guarantor shall default in the due
performance or observance of any term, covenant or agreement on its part to be
performed or observed pursuant to the Guaranty and such default (other than a
payment default) shall continue unremedied for a period of at least 20 days
after written notice to the defaulting party by the Lender; or
8.09 Judgments. One or more judgments or decrees shall be entered against any
Borrower, MobilePro Subsidiary or any member of the Davel Group involving a
liability of $100,000 or more in the case of any one such judgment or decree and
$250,000 or more in the aggregate for all such judgments and decrees for all
Borrowers, MobilePro Subsidiaries or any member of the Davel Group, (to the
extent not covered by insurance with respect to which such Borrower, MobilePro
Subsidiary or member of the Davel Group shall have delivered to the Lender a
written acknowledgment from the applicable insurance carrier of its
unconditional liability to pay such judgment and related costs) and any such
judgments or decrees shall not have been vacated, discharged or stayed or bonded
pending appeal within 60 days from the entry thereof; or
8.10 Litigation. Any action, suit or proceeding is commenced against any
Borrower, MobilePro Subsidiary or any member of the Davel Group that, in the
exercise of the Lender's reasonable commercial judgment, could be expected to
have a Material Adverse Effect on the rights or remedies of the Lender under
this Agreement or any of the other Credit and Security Documents or other Loan
Documents; or
8.11 Change of Control. A Change of Control has occurred, or for any other
reason the Purchaser or any Davel Credit Party fails to be a direct or indirect
Wholly Owned Subsidiary of MobilePro; or
8.12 Change in Management. In the event Xxx X. Xxxxxx or any of the other
Persons listed on Schedule 8.12 annexed hereto shall, for any reason, cease to
be full-time executive officers of MobilePro and/or the MobilePro Subsidiaries.
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing beyond any applicable grace period for cure, the Lender
may, by written notice to the Borrowers, take any or all of the following
actions, without prejudice to the rights of any Lender to enforce its claims
against any Borrower or any Davel Credit Party, except as otherwise specifically
provided for in this Agreement (provided that, if an Event of Default specified
in Section 8.05 shall occur with respect to any Borrower, MobilePro Subsidiary
or any member of the Davel Group, the result which would occur upon the giving
of written notice by the Lender as specified in clauses (i) and (ii) below shall
occur automatically without the giving of any such notice): (i) declare the
principal of and any accrued Cash Interest and PIK Interest in respect of Loan
and the Note and all obligations owing hereunder and thereunder to be, whereupon
the same shall become, forthwith due and payable without presentment, demand,
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protest or other notice of any kind, all of which are hereby waived by the
Borrowers and each Davel Credit Party, and (ii) enforce any or all of the Liens
and security interests created pursuant to the Credit and Security Documents.
SECTION 9. DEFINITIONS. In addition to the other terms hereinabove defined, as
used herein, the following terms shall have the meanings herein specified unless
the context otherwise requires. Defined terms in this Agreement shall include in
the singular number the plural and in the plural the singular:
"Affiliate" shall mean, with respect to any Person, any other Person directly or
indirectly controlling (including but not limited to all directors, managers and
officers of such Person), controlled by, or under direct or indirect common
control with such Person. A Person shall be deemed to control a corporation or a
limited liability company if such Person possesses, directly or indirectly, the
power (i) to vote 10% or more of the securities (including membership interests
in the case of a limited liability company) having ordinary voting power for the
election of directors (or equivalent) of such corporation or a limited liability
company or (ii) to direct or cause the direction of the management and policies
of such corporation or a limited liability company, whether through the
ownership of voting securities (including membership interests in the case of a
limited liability company), by contract or otherwise, In no event will any
Lender be deemed an Affiliate of any Borrower or any Davel Credit Party.
"Agreement" shall mean this Credit Agreement, as the same may be from time to
time further modified, amended and/or supplemented.
"Asset Sale" shall mean (x) the sale, transfer or other disposition by MobilePro
or any of its Subsidiaries to any Person other than any Borrower or any
Subsidiary Guarantor of any asset of the applicable Borrower or any of its
Subsidiaries (other than (i) sales, transfers or other dispositions of Inventory
in the ordinary course of business and (ii) sales, transfers or other
dispositions of Equipment in the ordinary course of business and which MobilePro
or such Subsidiary has determined is obsolete or no longer used or useful in the
conduct of its business) and (y) the receipt of casualty insurance and/or
condemnation proceeds in all cases in excess of $100,000 in the aggregate in any
year.
"Authorized Officer" of MobilePro shall mean any senior officer of such Borrower
designated as such in writing to the Lender by MobilePro, in each case,
acceptable to the Lender.
"Bankruptcy Code" shall have the meaning provided in Section 8.05.
"Borrowers" shall have the meaning provided in the first paragraph of this
Agreement.
"Business Day" shall mean any day excluding Saturday, Sunday and any day which
shall be in The City of
New York a legal holiday or a day on which banking
institutions are authorized by law or other governmental actions to close.
Unless specifically designated as a Business Day in this Credit Agreement, all
days shall be deemed to be calendar days.
"Capital Lease" as applied to any Person shall mean any lease of any property
(whether real, personal or mixed) by that Person as lessee which, in conformity
with GAAP, is accounted for as a capital lease on the balance sheet of that
Person.
"Capital Stock" shall mean any stock of MobilePro, whether Preferred Stock,
$0.001 par value per share or Common Stock, $0.001 par value per share, of
MobilePro.
"Capitalized Lease Obligations" shall mean all obligations under Capital Leases
of MobilePro or any of its Subsidiaries in each case taken at the amount thereof
accounted for as liabilities in accordance with GAAP.
"Cash Equivalents" shall mean (i) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than six months from the date of acquisition,
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(ii) Dollar denominated time deposits, certificates of deposit and bankers'
acceptances of (x) any domestic commercial bank of recognized standing having
capital and surplus in excess of $500.000,000 or(y) any bank (or the parent
company of such bank) whose short-term commercial paper rating from Standard &
Poor's Ratings Services, a division of XxXxxx-Xxxx, Inc. ("S&P") is at least A-1
or the equivalent thereof or from Xxxxx'x Investors Service, Inc. ("XXXXX'X") is
at least P-1 or the equivalent thereof (any such bank an "APPROVED BANK"), in
each case with maturities of not more than six months from the date of
acquisition, (iii) repurchase obligations with a term of not more than seven
days for underlying securities of the types described in clause (i) above
entered into with any bank meeting the qualifications specified in clause (ii)
above, (iv) commercial paper issued by any Approved Bank or by the parent
company of any Approved Bank and commercial paper issued by, or guaranteed by,
any industrial or financial company with a short-term commercial paper reading
of at least A-I or the equivalent thereof by S&P or at least P-I or the
equivalent thereof by Moody's, or guaranteed by any industrial company with a
long term unsecured debt rating of at least A or A2, or the equivalent of each
thereof, from S&P or Moody's, as the case may be, and in each case maturing
within six months after the date of acquisition (v) securities with maturities
of one year or less from the date of acquisition issued or fully guaranteed by
any state, commonwealth or territory of the United States, by any political
subdivision or taxing authority of any such state, commonwealth or territory or
by any foreign government, the securities of which state, commonwealth or
territory, political subdivision, taxing authority or foreign government, as the
case may be, are rated at least A by S&P or A by Moody's, (vi) securities with
maturities of one year or less from the date of acquisition backed by standby
letters of credit issued by any Approved Bank and (vii) investments in money
market mutual funds substantially all of whose assets are comprised of
securities of the type described in clauses (i) through (vi) above.
"CERCLA" shall mean the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, 42 U.S.C. Sections 9601 et seq.
"Cerberus Subordinated Debt" shall mean the 5% $1,000,000 promissory note of
PhoneTel Technologies, Inc., an Ohio corporation, and Cherokee Communications,
Inc., a Texas corporation, as makers and debtors, in favor of Cerberus Partners,
L.P., issued pursuant to the subordinated promissory note and security
agreement, dated as of November 17, 1999.
"Closing Date" shall have the meaning provided in Section 4.01.
"Change of Control" shall mean one or more transactions or series of
transactions, whether pursuant to (i) a sale of all or substantially all of the
assets and properties of either MobilePro and its Subsidiaries or the members of
the Davel Group, or (ii) the sale, transfer or exchange of capital stock of
MobilePro, or (iii) any merger, consolidation or like combination, or (iv) any
tender offer or proxy contest, or (v) any other event whereby pursuant to such
transaction or transactions under (i), (ii), (iii), (iv) and/or (v) hereof (A)
the current MobilePro stockholders no longer own a majority of the outstanding
voting capital stock of the resulting or surviving Person, or (B) the power to
elect a majority of the members of the board of directors of MobilePro or the
Davel Group shall be vested in Persons who are not the current members of the
board of directors of MobilePro.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time to
time and the regulations promulgated and the rulings issued thereunder. Section
references to the Code are to the Code, as in effect at the Closing Date and any
subsequent provisions of the Code, amendatory thereof, supplemental thereto or
substituted therefor.
"Collateral" shall mean all of the Collateral for the Obligations as defined in
Section 1.05 of this Agreement and in each of the Credit and Security Documents.
"Consolidated Capital Expenditures" shall mean, for any period, the aggregate of
all cash expenditures (including in all. events all amounts expended under
Capital Leases but excluding any amount representing capitalized interest) by
MobilePro and its Subsidiaries during that period that, in conformity with GAAP,
are or are required to be included in the property, plant or equipment reflected
in the consolidated balance sheet of MobilePro, provided that Consolidated
Capital Expenditures shall in any event (x) include the purchase price paid in
cash in connection with
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the acquisition of any Person (including through the purchase of all of the
capital stock or other ownership interests of such Person or through merger or
consolidation) to the extent allocable to property, plant and equipment and (y)
exclude amounts expended to acquire capital equipment used to replace outmoded
or obsolete equipment.
"Consolidated Current Assets" shall mean, as to any Person at any time, the
current assets of such Person and its Subsidiaries as would appear on a balance
sheet determined on a consolidated basis in accordance with GAAP.
"Consolidated Current Liabilities" shall mean, as to any Person at any time, the
current liabilities of such Person and its Subsidiaries as would appear on a
balance sheet determined on a consolidated basis in accordance with GAAP,
including all short-term Indebtedness for borrowed money and the current portion
of long-term Indebtedness of such Person or its Subsidiaries, in each case to
the extent otherwise included therein.
"Consolidated Debt" shall mean, as of any date of determination, the aggregate
stated balance sheet amount of all Indebtedness of MobilePro and its direct and
indirect Subsidiaries, the Davel Group or any other applicable Person(s) on a
consolidated basis as determined in accordance with GAAP plus, without
duplication, any Indebtedness for borrowed money of any other Person as to which
such applicable Person(s) has created a guarantee or other Contingent
Obligation.
"Consolidated EBIT" shall mean for MobilePro and its direct and indirect
Subsidiaries, the Davel Group or any other applicable Person(s), for any period,
(i) the sum (without duplication) of the amounts for such period of (i)
Consolidated Net Income, (ii) provisions for taxes, and (iii) Consolidated
Interest Expense.
"Consolidated EBITDA" shall mean for MobilePro and its direct and indirect
Subsidiaries, the Davel Group or any other applicable Person(s), for any period,
(i) the sum (without duplication) of the amounts for such period of (i)
Consolidated Net Income, (ii) provisions for taxes, (iii) Consolidated Interest
Expense, (iv) depreciation expenses, (v) amortization expense and other non-cash
charges, and (vi) amortization or write-off of deferred financing costs to the
extent deducted in determining Consolidated Net Income, all as determined on a
consolidated basis in accordance with GAAP.
"Consolidated Fixed Charges" shall mean, for any period, the sum, without
duplication, of (i) Consolidated Interest Expense for such period (ii) the
scheduled principal amount of all amortization payments on all Indebtedness
(including, without limitation, the principal component of all Capitalized Lease
Obligations), and (iii) 100% of all rental costs on operating leases, of
MobilePro and its Subsidiaries, the Davel Group or other applicable Person(s)
for such period (as determined on the first day of the respective period).
"Consolidated Interest Coverage Ratio" means, as of the date of the transaction
giving rise to the need to calculate the Consolidated Interest Coverage Ratio
(the "Transaction Date"), the ratio of (i) the aggregate amount of Consolidated
EBITDA of MobilePro and its direct and indirect Subsidiaries, the Davel Group,
or any other applicable Person(s) for the four calendar quarters immediately
prior to the Transaction Date to (ii) the aggregate Consolidated Interest
Expense of MobilePro and its direct and indirect Subsidiaries, the Davel Group,
or any other applicable Person(s) that is anticipated to accrue during a period
consisting of the fiscal quarter in which the Transaction Date occurs and the
three fiscal quarters immediately subsequent thereto (based upon the pro forma
amount and maturity of, and interest payments in respect of, Indebtedness of
MobilePro and its direct and indirect Subsidiaries, the Davel Group, or any
other applicable Person(s) expected by MobilePro to be outstanding on the
Transaction Date), assuming for the purposes of this measurement continuation of
market interest rates prevailing on the Transaction Date and base interest rates
in effect of floating interest rate obligations equal to the base interest rates
on such obligations in effect on the Transaction Date; provided, however, that
if the transaction giving rise to the need to calculate the Consolidated
Interest Coverage Ratio would have the effect of increasing or decreasing EBITDA
in the future, EBITDA shall be calculated on a pro forma basis as if such
transaction had occurred on the first day of the four fiscal quarters referred
to in this definition, calculated in good faith and agreed to by the Lender.
"Consolidated Interest Expense" shall mean, with respect to any Person for any
period, without duplication, the sum of (a) the aggregate amount of cash and
noncash interest expense (including, without limitation, any portion of such
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interest expense that is attributable to (x) Capital Leases in accordance with
GAAP, (y) any PIK Interest, or any (z) increase in Indebtedness relating to zero
coupon interest, PIK Interest or original issue discount) in respect of all
outstanding Indebtedness of such Person(s) on a consolidated basis, including,
without limitation (i) the amortization of any debt discount, (ii) the interest
portion of any deferred payment obligation, (iii) all commissions, discounts,
commitment fees, origination fees and other Fees incurred in connection with
this Credit Agreement or other loan agreement to which any of such Persons is or
are a party, and (b) the portion of any rental obligation of such Person(s) in
respect of any sale and leaseback transaction allocable to interest expense
(determined as if such obligation were treated as a Capitalized Lease
Obligation), in each case, after elimination of intercompany accounts among such
Person(s), as determined in accordance with GAAP.
"Consolidated Net Income" shall mean for any period, the net income (or loss) of
(a) MobilePro and all of its Subsidiaries (including the Davel Group), or (b)
the Davel Group, as applicable, each on a consolidated basis for such period
taken as a single accounting period determined in conformity with GAAP; PROVIDED
that there shall be EXCLUDED from the calculation thereof (without duplication):
(i) the income (or loss) of any Person (other than MobilePro or
Subsidiaries of MobilePro, including the Davel Group), in which any other
Person(s) has a joint or participating interest (including a credit, security or
regulatory interest that restricts the distribution of income or payment of
dividends from any MobilePro Subsidiary to MobilePro), which joint or
participating interest does not cause the net income of such other Person to be
consolidated with the net income of MobilePro or Subsidiaries of MobilePro,
including the Davel Group in accordance with GAAP); provided, that the amount of
cash Dividends and Distributions, if any, actually paid to MobilePro or any
Subsidiary of MobilePro by such other Person during such period shall be
included in Consolidated Net Income;
(ii) the income (or loss) of any Person accrued prior to the date it
becomes a direct or indirect Subsidiary of MobilePro or the Davel Group, or is
merged into or consolidated with MobilePro or any Subsidiary or the Davel Group
or that Person's assets are acquired by MobilePro or any of its Subsidiaries or
the Davel Group, as the case may be;
(iii) any restoration of any contingency reserve, except to the extent
that provision for such reserve was made out of income during such period;
(iv) any net gains or losses on the sale or other disposition of
Investments and/or other assets (other than Inventories sold in the ordinary
course of business); provided, that there shall also be excluded any related
charges for taxes thereon;
(v) any net gain arising from the collection of the proceeds of any
insurance policy; (vi) any amounts deducted for the amortization of good-will or
depreciation to the extent resulting from the write-up of any asset(s),
(vii) any amounts deducted for any payments prohibited by this Credit
Agreement, and
(viii) the income of any MobilePro Subsidiary or the Davel Group, as
applicable, to the extent that the declaration or payment of dividends or
similar distributions by that Subsidiary of that income is not at the time
permitted by operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation applicable to
that Subsidiary.
"Consolidated Operating Cash Flow" shall mean for any applicable Person(s) for
any period, Consolidated EBITDA: (a) less the sum of (i) any Capital
Expenditures incurred (ii) any increase in Consolidated Working Capital from the
immediately preceding period, (iii) the amount of any losses on sales of assets
(excluding sales of Inventory in the ordinary course of business), or (iv) other
extraordinary gains or losses; and (b) plus, any decrease in Consolidated
Working Capital from the immediately preceding period, all as determined on a
consolidated basis in accordance with GAAP.
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"Consolidated Subsidiary" shall mean, with respect to any Person, any Subsidiary
of such Person that would be consolidated with such Person for financial
reporting purposes under GAAP.
"Consolidated Tangible Net Worth" shall mean, with respect to any Person and its
Consolidated Subsidiaries at any time, the excess of (i) the aggregate net book
value of the assets (other than goodwill, unamortized noncompete agreements,
organization costs, capitalized financing costs and other intangible assets
classified as such in accordance with GAAP) of such Person and its Consolidated
Subsidiaries on a consolidated basis after adjustments in accordance with GAAP
(including, without limitation, reserves for doubtful receivables, obsolescence,
depreciation and amortization and any valuation allowance against tax assets)
over (ii) the Consolidated Total Liabilities of such Person and its Consolidated
Subsidiaries on a consolidated basis, in each case computed and consolidated in
accordance with GAAP.
"Consolidated Total Liabilities" shall mean, for any Person and its Consolidated
Subsidiaries at any time, all obligations which in conformity with GAAP would be
included in determining total liabilities as shown on the liabilities side of a
balance sheet of such Person and its Consolidated Subsidiaries.
"Consolidated Working Capital" shall mean, for any Person and its Consolidated
Subsidiaries at any time (a) all accounts receivable, inventories, and prepaid
expenses (other than expenses relating to financings and deferred taxes), less
(b) all accounts payable and accrued liabilities due within one year (other than
interest and taxes payable), all as carried as current assets or current
liabilities on a balance sheet prepared in accordance with GAAP.
"Contingent Obligations" shall mean as to any Person any obligation of such
Person guaranteeing or intending to guarantee any Indebtedness, leases,
dividends or other obligations ("PRIMARY OBLIGATIONS") of any other Person in
any manner, whether directly or indirectly, including, without limitation, any
obligation of such Person, whether or not contingent, (a) to purchase any such
primary obligation or any property constituting direct or indirect security
therefor, (b) to advance or supply funds (i) for the purchase or payment of any
such primary obligation or (ii) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (c) to purchase property, securities or services primarily for
the purpose of assuring the owner of any such primary obligation of the ability
of the primary obligor to make payment of such primary obligation or (d)
otherwise to assure or hold harmless the owner of such primary obligation
against lass in respect thereof; provided, however, that the term Contingent
Obligation shall not include endorsements of instruments for deposit or
collection in the ordinary course of business. The amount of any Contingent
Obligation shall be deemed to be an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Contingent Obligation
is made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such Person is required to perform
thereunder) as determined by such Person in good faith.
"Cornell Capital Loans" shall mean (i) a six month loan made on August 22, 2004
by Cornell Capital to MobilePro in the amount of $700,000, (ii) a six month
additional loan made on August 25, 2004 by Cornell Capital to MobilePro in the
amount of $300,000, (iii) a loan made on August 27, 2004 by Cornell Capital to
MobilePro in the amount of $8,500,000, and (iv) a loan made on September 22,
2004 by Cornell Capital to MobilePro in the amount of $3,700,000, of which an
aggregate of $13,200,000 of such Cornell Capital Loans remains unpaid and
outstanding; which Cornell Capital Loans are secured pursuant to separate
security agreements, dated August 23, 2004, August 25, 2004, August 27, 2004 and
September 22, 2004 (the "Cornell Capital Security Agreements").
"Cornell Capital Obligations" shall mean the collective reference to (a) the
obligation to pay, when due, all principal amount of, and accrued interest and
fees payable on, the maximum $13,200,000 principal amount of Cornell Capital
Loans, and (b) all other covenants and agreements of the Borrowers, the Existing
MobilePro Subsidiaries and the Davel Credit Parties, set forth in the Cornell
Capital Security Agreements, as superceded by the MobilePro Pledge Agreement,
the Purchaser Pledge Agreement, the Borrowers Security Agreement, the Davel
Credit Parties Security Agreement, and the Intercreditor Agreement. The term
"Cornell Capital Obligations" shall not, however, mean or include any of the
obligations of MobilePro to Cornell Capital under the Equity Line of Credit
Agreements.
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"Credit and Security Documents" shall have the meaning defined in Section 1.05
of this Agreement.
"Davel Acquisition Documents" shall mean the collective reference to (i) the
Loan Purchase Agreement and Transfer and Assignment of Shares, dated of even
date, among the Purchaser, MobilePro and the Selling Lenders, (ii) the Transfer
and Assignment of Debt Obligations, Credit Agreement and Security Agreement,
dated of even date, among the Purchaser, MobilePro and the Selling Lenders, and
(iii) all exhibits, schedules and other documents delivered in connection with
the transactions contemplated by the agreement referred to in clauses (i) and
(ii) hereof.
"Davel Credit Parties" shall mean the collective reference to the Purchaser,
Davel, Davel Financing, Phonetel, Cherokee and each direct and indirect
Subsidiary of Davel, Davel Financing, Phonetel and Cherokee listed on EXHIBIT A
annexed hereto.
"Davel Group" shall mean the collective reference to the Purchaser, all of the
other Davel Credit Parties and any existing or future direct or indirect
Subsidiary of the Purchaser or any of the Davel Credit Parties.
"Default" shall mean any event, act or condition which with notice or lapse of
time, or both, would constitute an Event of Default.
"Dividends" shall have the meaning provided in Section 7.09.
"Dollars" and the sign "$" shall each mean freely transferable lawful money of
the United States.
"EBIT" shall mean for any applicable Person for any period, (i) the sum (without
duplication) of the amounts for such period of (i) Net Income, (ii) provisions
for taxes, and (iii) Interest Expense.
"EBITDA" shall mean for any applicable Person for any period, (i) the sum
(without duplication) of the amounts for such period of (i) Net Income, (ii)
provisions for taxes, (iii) Interest Expense, (iv) depreciation expense, (v)
amortization expense and other non-cash charges, and (vi) amortization or
write-off of deferred financing costs to the extent deducted in determining Net
Income, all as determined on a consolidated basis in accordance with GAAP.
"Eligible Transferee" shall mean and include a commercial bank, financial
institution or other institutional "accredited investor" as defined in SEC
Regulation D.
"Environmental Claims" means any and all administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of noncompliance
or violation, investigations (other than reports prepared by or on behalf of
MobilePro or any of its Subsidiaries and not in response to any third party
action or request of any kind) or proceedings relating in anyway to any
Environmental Law or any permit issued, or any approval given, under any such
Environmental Law (hereafter, "CLAIMS"), including, without limitation. (a) any
and all Claims by governmental or regulatory authorities for enforcement,
cleanup, removal. response, remedial or other actions or damages pursuant to any
applicable Environmental Law, and (b) any and all Claims by any third party
seeking damages, contribution, indemnification. cost recovery, compensation or
injunctive relief resulting from Hazardous Materials arising from alleged injury
or threat of injury to health, safety or the environment.
"Environmental Law" means any applicable Federal, state, foreign or local
statute, law, rule, regulation, ordinance, code and rule of common law now or
hereafter in effect and in each case as amended, and any binding judicial or
administrative interpretation thereof, including any binding judicial or
administrative order, consent decree or judgment, relating to the environment or
Hazardous Materials, including, without limitation, CERCLA; RCA; the Federal
Water Pollution Control Act, as amended, 33 U.S.C" Sections 1251 et seq.; the
Toxic Substances Control Act, 15 U.S.C. Sections 7401 et seq; the CleanAir Act,
42 U.S.C. Sections 7401 et seq; the Safe Drinking Water Act, 42 U.S.C. Sections
3808 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. Sections 2701 et seq. and
any applicable state and local or foreign counterparts or equivalents.
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"Equity Line of Credit Agreements" means the collective reference to (a) an
equity line of credit agreement, dated February 6, 2003, and (b) a separate
standby equity distribution agreement, dated May 13, 2004.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to ERISA are to ERISA, as in effect as of the
Closing Date and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each "person" (as defined in Section 3(9) of ERISA)
which together with MobilePro, a Subsidiary of MobilePro or any other Davel
Credit Party would be deemed to be a "single employer" within the meaning of
Sections 414(b), (c), (m) and (o) of the Code.
"Equipment" of any Person shall mean "Equipment" of such Person as defined in
the Security Agreement.
"Event of Default" shall have the meaning provided in Section 8.
"Existing MobilePro Subsidiaries" shall have the meaning as is defined in
Section 1.05(a) of this Credit Agreement; provided, that the term "Existing
MobilePro Subsidiaries" shall not mean or include the Purchaser.
"Facility" shall mean any of the credit facilities established under this
Agreement.
"Federal Funds Effective Rate" shall mean for any period, a fluctuating interest
rate equal for each day during such period to the weighted average of the rates
on overnight Federal Funds transactions with members of the Federal Reserve
System arranged by Federal Funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of
New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for such day on such
transactions received by Lender from three Federal Funds brokers of recognized
standing selected by Lender.
"Fees" shall mean all amounts payable pursuant to, or referred to in, Section
2.01, 2.02, 2.03, 2.04 and 2.05.
"GAAP" shall mean generally accepted accounting principles in the United States
of America as in effect on the date of this Agreement."
Governmental Agency" shall mean any Federal, state, local or municipal, foreign
or other government or subdivision, branch, department or agency thereof and any
governmental or quasi-governmental authority of any nature, including any court
or other tribunal.
"Hazardous Materials" shall mean (a) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, transformers or other equipment that
contains, electric fluid containing levels of polychlorinated biphenyls, and
radon gas and (b) any chemicals, materials or substances defined as or included
in the definition of "hazardous substances," "hazardous waste," "hazardous
materials," "extremely hazardous waste," "restricted hazardous waste, "toxic
substances," "toxic pollutants," "contaminants, " or "pollutants," or words of
similar import, under any applicable Environmental Law.
"Indebtedness" of any Person shall mean, without duplication, (i) all
indebtedness of such Person for borrowed money, (ii) the deferred purchase price
of assets, services, capital stock or other ownership interest or a
business(es), whether denominated as earn-out payments, contingent or adjusted
purchase price, or otherwise, (iii) the face amount of all letters of credit
issued for the account of such Person and, without duplication, all drafts drawn
thereunder,(iv) all indebtedness of a second Person secured by any Lien on any
property owned by such first Person, whether or not such indebtedness has been
assumed, (v) all Capitalized Lease Obligations of such Person, (vi) all
obligations of such Person to pay a specified purchase price for goods or
services whether or not delivered or accepted, i.e., take-or-pay and similar
obligations and (vii) all Contingent Obligations of such Person, (other than
Contingent Obligations arising from the guaranty by such Person of the
obligations of MobilePro or any of its
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Subsidiaries to the extent such guaranteed obligations do not constitute
Indebtedness and are otherwise permitted hereunder), provided that Indebtedness
shall not include trade payables and accrued expenses, in each case arising in
the ordinary course of business.
"Leasehold" of any Person means all of the right, title and interest of such
Person as lessee or licensee in, to and under leases or licenses of land,
improvements and/or fixtures.
"Lender" shall have the meaning provided in the first paragraph of this
Agreement.
"Lender Register" shall have the meaning provided in Section 11. 16.
"Lien" shall mean any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind (including any agreement to give any of the foregoing, any
conditional sale or other title retention agreement or any lease in the nature
thereof).
"Loan" shall have the meaning provided in Section 1.01, including, without
limitation, any assignments or successive assignments of any portion of the Loan
pursuant to Section 11.04.
"Loan Documents" shall mean the collective reference to this Agreement, the
Note, all Credit and Security Documents, the Registration Rights Agreement,
Depositary Account Agreement, the Forbearance Assignment, the Legal Opinion, the
Warrant, the Joinder Agreement, and all other certificates, financing
statements, instruments and securities executed and delivered in connection with
the Loan and the transactions contemplated hereby.
"Margin Stock" shall have the meaning provided in Regulation U.
"Material Adverse Effect" shall mean a material adverse effect on the business,
assets, liabilities, operations or condition (financial or otherwise) of either
(a) MobilePro and its Subsidiaries (excluding the Davel Group), (b) the Davel
Credit Parties, and (c) MobilePro and its Subsidiaries (including the Davel
Group), after giving effect to the Transactions, each taken as a consolidated
whole.
"MobilePro" shall mean MobilePro Corp., a Delaware corporation.
"Mortgaged Property" shall mean the Real Property listed on Annex IV and
designated as "Mortgaged Property" therein."
Multiemployer Plan" shall mean a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA which (i) is contributed to or required to be contributed to
by any Borrower or any Davel Credit Party or any ERISA Affiliate of any Borrower
or any Davel Credit Party or (ii) was so contributed to by any Borrower or any
Davel Credit Party or any ERISA Affiliate of any Borrower or any Davel Credit
Party in respect of which any Borrower or any Davel Credit Party or an ERISA
Affiliate of any Borrower or any Davel Credit Party could have liability.
"Net Cash Proceeds" shall mean, with respect to any sale or disposition of
assets, including, without limitation, any Asset Sale, the aggregate cash
payments (including any cash received by way of deferred payment pursuant to a
note receivable issued in connection with such sale or disposition, other than
the portion of such deferred payment constituting interest, but only as and when
so received) received by MobilePro or any of its Subsidiaries from such sale or
disposition net of (i) fees, commissions and other out-of-pocket expenses
incurred in connection with such sale and paid or payable to Persons who are not
Affiliates (unless such fees. commissions and expenses are usual and customary
and no less favorable to such Affiliate than would be obtained in a similar
aims-length transaction) of any Borrower or any Davel Credit Party (including
payment of principal of and premium and interest on Indebtedness secured by the
assets the subject of such sale or disposition which is required to be, and
which is, repaid under the terms thereof as a result of such sale or
disposition) (ii) incremental taxes paid or payable as a result thereof (as
reasonably estimated by a senior financial or accounting officer of the seller,
giving effect to the overall tax position of the seller), (iii) the amount of
any reasonable reserve established in accordance with GAAP against
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any liabilities retained by the seller (other than taxes deducted, as aforesaid)
associated with the asset disposed of, including, without limitation, accrued
liabilities in respect of such asset and liabilities under any indemnification
obligations associated with such asset, until such time as such reserve is no
longer necessary (at which time any remaining amounts shall be deemed Net Cash
Proceeds to be allocated in accordance with provisions of Section 2.02(a)(iii))
and (iv) all distributions and other payments made to minority interest holders
in connection with such asset disposition.
"Note" shall have the meaning provided in Section 1.03(a).
"Notice Office" shall mean the principal offices of the Lender, currently
located at 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxx 00000, or any other
location designated by the Lender in writing.
"Obligations" shall mean the collective reference to: (a) all principal and
interest due and payable under the Note, and all other amounts, direct or
indirect, contingent or absolute, of every type or description, at any time
existing and owing by the Borrowers and all direct and indirect MobilePro
Subsidiaries, including the members of the Davel Group, to the Lender; and (b)
all other covenants, agreements and undertakings of the Borrowers and all direct
and indirect MobilePro Subsidiaries, including the members of the Davel Group,
set forth in this Agreement, the Note, the Credit and Security Documents and any
other Loan Documents.
"Participant" shall have the meaning provided in Section 2.05(a).
"Payment Office" shall mean the office of the Lender at 000 Xxxx Xxxxxx Xxxxxx,
Xxx 00, Xxxxxxxxx, XX 00000, or such other office as Lender may designate to
MobilePro in writing from time to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established pursuant
to Section 4002 of ERISA, or any successor thereto.
"Permit" shall mean any permit, license, approval, consent or authorization
issued by a Governmental Agency under any Environmental Laws.
"Permitted Liens" shall mean Liens permitted under Section 7.03.
"Person" shall mean any individual, partnership, joint venture. firm,
corporation, limited liability company, association, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality thereof.
"Plan" shall mean any pension plan as defined in Section 3(2) of ERISA. which
(i) is maintained or contributed to by (or to which there is an obligation to
contribute of) any Borrower or any Davel Credit Party or an ERISA Affiliate of
any Borrower or any Davel Credit Party or (ii) was so maintained or contributed
to by any Borrower or any Davel Credit Party or an ERISA Affiliate of any
Borrower or any Davel Credit Party in respect of which any Borrower or any Davel
Credit Party or an ERISA Affiliate of any Credit party could have liability
under Section 4069 or Section 4212 of ERISA.
"RCRA" shall mean the Resource Conservation and Recovery Act, as amended, 42
USC. Sections 6901 et seq.
"Real Property" of any Person shall mean all of the right, title and interest of
such Person in and to land, improvements and fixtures, including Leaseholds.
"Release" means any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping, disposing or migration into
the environment.
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"Reportable Event" shall mean an event described in Section 4043(c) of ERISA
with respect to a Plan that is subject to Title IV of ERISA other than those
events as to which the 30-day notice period is waived under PBGG regulations.
"SEC" shall mean the United States Securities and Exchange Commission.
"SEC Regulation D" shall mean Regulation D as promulgated under the Securities
Act of 1933, as amended, as the same may be in effect from time to time.
"Secured Creditor" shall mean and include any Secured Creditor as defined in any
Security Document.
"Subsidiary" of any Person shall mean and include (i) any corporation more than
50% of whose stock of any class or classes having by the terms thereof ordinary
voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person directly or
indirectly through Subsidiaries and (ii) any limited liability company,
partnership, association, joint venture or other entity in which such Person
directly or indirectly through Subsidiaries, has more than a 50% equity or
ownership interest at the time. Unless otherwise expressly provided, all
references herein to "Subsidiary" shall mean and include any direct Subsidiary
of MobilePro or the Purchaser, any Subsidiary of a Davel Credit Party, or any
direct or indirect Subsidiary of any of such Persons.
"UCC" shall mean the Uniform Commercial Code.
"Unfunded Current Liability" of any Plan shall mean the amount, if any, by which
the actuarial present value of the accumulated plan benefits under the Plan as
of the close of its most recent plan year exceeds the fair market value of the
assets allocable thereto, each determined in accordance with Statement of
Financial Accounting Standards No. 87, based upon the actuarial assumptions used
by the Plan's actuary in the most recent annual valuation of the Plan.
"U.S." shall mean the United States of America.
"Wholly Owned Subsidiary" of any Person shall mean any Subsidiary of such Person
to the extent all of the capital stock, membership interests or other equity or
ownership interests in such Subsidiary, other than directors' qualifying shares,
is owned directly or indirectly by such Person.
"Working Capital" shall mean the excess of Consolidated Current Assets over
Consolidated Current Liabilities.
"Written" or "in writing" shall mean any form of written communication or a
communication by means of telex, facsimile transmission, telegraph or cable.
SECTION 10. MISCELLANEOUS.
10.01 Payment of Expenses. etc. MobilePro agrees to: (i) whether or not the
transactions herein contemplated are consummated, pay all reasonable
out-of-pocket costs and expenses of the Lender in connection with the
negotiation, preparation, execution, delivery and administration of the Credit
and Security Documents and the documents and instruments referred to therein and
any amendment, waiver, consent or additional document relating thereto
(including, without limitation, the reasonable fees and disbursements of
Xxxxxxx, Savage, Kaplowitz, Wolf & Marcus, LLP, but not more than one law firm
for all Lenders) in connection with the administration and/or enforcement of the
Credit and Security Documents and the documents and instruments referred to
therein; (ii) pay and hold each of the Lender harmless from and against any and
all present and future stamp and other similar taxes with respect to the
foregoing matters and save each of the Lender harmless from and against any and
all liabilities with respect to or resulting from any delay or omission (other
than to the extent attributable to the Lender) to pay such taxes; and (iii)
indemnify the Lender and its officers, directors, employees, representatives and
agents from and hold each of them harmless against any and all losses,
liabilities, claims, damages or expenses incurred by any of
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them as a result of, or arising out of, or in any way related to, or by reason
of, any investigation, litigation or other proceeding (whether or not any Lender
is a party thereto and whether or not any such investigation, litigation or
other proceeding is between or among any Lender, any Borrower or any Davel
Credit Party or any third Person or otherwise) related to the entering into
and/or performance of any Credit Document or the use of the proceeds of the Loan
hereunder or the Transaction or the consummation of any transactions
contemplated in any Credit Document, including, without limitation, any such
investigation, litigation or other proceeding relating to the violation of,
noncompliance with or liability under, any Environmental Law applicable to the
operations of any Borrower or any Davel Credit Party or any Real Property owned
or operated by them, and in each case, including, without limitation, the
reasonable fees and disbursements of counsel incurred in connection with any
such investigation, litigation or other proceeding (but excluding any such
losses, liabilities, claims, damages or expenses solely to the extent incurred
by reason of the gross negligence or willful misconduct of the Person to be
indemnified).
10.02 Right of Setoff. In addition to any rights now or hereafter granted under
applicable law or otherwise, and not by way of limitation of any such rights, if
an Event of Default then exists, the Lender is hereby authorized at any time or
from time to time, without presentment, demand, protest or other notice of any
kind to any Borrower or any Davel Credit Party or to any other Person. any such
notice being hereby expressly waived, to set off and to appropriate and apply
any and all deposits (general or special) and any other Indebtedness at any time
held or owing by the Lender (including, without limitation, by branches and
agencies of the Lender wherever located) to or for the credit or the account of
any Borrower or any Davel Credit Party against and on account of the Obligations
and liabilities of such Credit parry to the Lender under this Agreement or under
any of the other Credit and Security Documents, including, without limitation,
all interests in Obligations of such Davel Credit Party acquired by the Lender,
and all other claims of any nature or description arising out of or connected
with this Agreement or any other Credit Document, irrespective of whether or not
the Lender shall have made any demand hereunder and although said Obligations,
liabilities or claims, or any of them, shall be contingent or unmatured.
10.03 Notices. Except as otherwise expressly provided herein, all notices and
other communications provided for hereunder shall be in writing (including
telegraphic. telex, telecopier, facsimile or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered, if to any Borrower or any
Davel Credit Party, at the address specified opposite its signature below or in
the other relevant Credit and Security Documents, as the case may be; if to any
Lender, at its address specified for the Lender on the signature page hereto;
or, at such other address as shall be designated by any parry in a written
notice to the other parties hereto. Any notice or other communication required
to be or otherwise provided to the Lender will be deemed to have been provided
to the Lender if delivered as provided above to Lender. All such notices and
communications shall be mailed, telegraphed, telexed, telecopied, delivered or
cabled or sent by overnight courier, and shall be effective when received.
10.04 Benefit of Agreement.
(a) This Agreement shall be binding upon and inure to the benefit of
and be enforceable by the respective successors and assigns of the parties
hereto, provided, that no Borrower may assign or transfer any of its rights or
obligations hereunder without the prior written consent of the Lender. The
Lender may at any time grant participation in any of its rights hereunder or
under the Note to another financial institution that is not a competitor of
MobilePro or any Subsidiary, provided that in the case of any such
participation, the participant shall not have any rights under this Agreement or
any of the other Credit and Security Documents (the participant's rights against
the Lender in respect of such participation to be those set forth in the
agreement executed by the Lender in favor of the participant relating thereto)
and all amounts payable by the Borrowers hereunder shall be determined as if the
Lender had not sold such participation, except that the participant shall be
entitled to the benefits of Sections 1.09 and 3.04 of this Agreement to the
extent that the Lender would be entitled to such benefits if the participation
had not been entered into or sold, and provided further that no Lender shall
transfer, grant or assign any participation under which the participant shall
have rights to approve any amendment to or waiver of this Agreement or any other
Credit Document except to the extent such amendment or waiver would (i) extend
the Maturity Date or reduce the rate or extend the time of payment of interest
or Fees thereon (except in connection with a waiver of the applicability of any
post-default increase in interest rates), or reduce the principal amount
thereof, or increase such participant's participating interest in the Loan over
the amount thereof then in effect (it being understood that a
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waiver of any Default or Event of Default or of a mandatory reduction in the
Loan, or a mandatory prepayment, shall not constitute a change in the terms of
the Loan),(ii) release all or substantially all of the Collateral or (iii)
consent to the assignment or transfer by any Borrower or any Davel Credit Party
of any of its rights and obligations under this Agreement or any other Credit
Document.
(b) Notwithstanding the foregoing, (x) any Lender may assign all or a
portion of the Loan and its rights and obligations hereunder to one or more
Lenders, and (y) any Lender may assign all or a portion of its outstanding Loan
and its rights and obligations hereunder to one or more Eligible Transferees .
No assignment pursuant to the immediately preceding sentence shall, to the
extent such assignment represents an assignment to an institution other than one
or more Lenders hereunder, be in an aggregate amount less than $500,000 unless
the entire Loan of the assigning Lender is so assigned. If any Lender so sells
or assigns all or a part of its rights hereunder or under the Note, any
reference in this Agreement or the Note to such assigning Lender shall
thereafter refer to the Lender and to the respective assignee to the extent of
their respective interests and the respective assignee shall have, to the extent
of such assignment (unless otherwise provided therein), the same rights and
benefits as it would if it were such assigning Lender. Each assignment pursuant
to this Section 10.04(b) shall be effected by the assigning Lender and the
assignee Lender executing an Assignment Agreement and giving Lender and the
Borrowers written notice thereof. At the time of any such assignment, (i) Annex
I shall be deemed to be amended to reflect the Loan of the respective assignee
(which shall result in a direct reduction to the Loan of the assigning Lender)
and of the other Lenders, and (ii) if requested by the assignee Lender, the
Borrowers will issue a new Note to the respective assignee and to the assigning
Lender in conformity with the requirements of Section 1.12. To the extent of any
assignment pursuant to this Section 10.04(b) to a Person which is not already a
Lender hereunder and which is not a United States Person (as such term is
defined in Section 7701(a)(30) of the Code) for Federal income tax purposes, the
respective assignee Lender shall provide to the Borrowers and Lender the
appropriate Internal Revenue Service Forms (and, if applicable, a Section 3.04
Certificate) described in Section 3.04(b). The Lenders and the Borrowers agree
to execute such documents (including without limitation amendments to this
Agreement and the other Credit and Security Documents) as shall be necessary to
effect the foregoing. Nothing in this clause (b) shall prevent or prohibit any
Lender from pledging its Note or Loan to a Federal Reserve Bank in support of
borrowings made by the Lender from such Federal Reserve Bank.
(c) Notwithstanding any other provisions of this Section 10.04, no
transfer or assignment of the interests or obligations of any Lender hereunder
or any grant of participation therein shall be permitted if such transfer,
assignment or grant would require MobilePro to file a registration statement
with the SEC or to qualify the Loan under the "Blue Sky" laws of any State.
(d) The Lender initially party to this Agreement hereby represents, and
each Person that became a Lender pursuant to an assignment permitted by this
Section 10 will. upon its becoming party to this Agreement, represent that it is
an Eligible Transferee which makes loans in the ordinary course of its business
and that it will make or acquire all or a portion of the Loan for its own
account in the ordinary course of such business, provided that subject to the
preceding clauses (a) and (b), the disposition of any promissory notes or other
evidences of or interests in Indebtedness held by the Lender shall at all times
be within its exclusive control.
10.05 No Waiver; Remedies Cumulative, No failure or delay on the part of any
Lender in exercising any right, power or privilege hereunder or under any other
Credit Document and no course of dealing between any Borrower or any Davel
Credit Party and any Lender shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege hereunder or under
any other Credit Document preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder or thereunder. The
rights and remedies herein expressly provided are cumulative and not exclusive
of any rights or remedies which any Lender or Davel Credit Party would otherwise
have. No notice to or demand on any such party in any case shall entitle any
Borrower or any Davel Credit Party to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the rights of the
Lender to any other or further action in any circumstances without notice or
demand.
10.06 Governing Law; Submission to Jurisdiction; Venue; Waiver of Jury Trial.
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(a) This Agreement and the other Loan Documents and the rights and
obligations of the parties hereunder and thereunder shall be construed in
accordance with and be governed by the internal laws of the State of
New York.
Any legal action or proceeding with respect to this Agreement or any other Loan
Document may be brought in the courts of the State of
New York sitting in the
Borough of Manhattan or of the United States for the Southern District of
New
York, and, by execution and delivery of this Agreement; MobilePro hereby
irrevocably accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. MobilePro further
irrevocably consents to the service of process out of any of the aforementioned
courts in any such action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, to MobilePro located outside the
City of
New York, at its address for notices pursuant to Section 10.03, such
service to become effective 10 days after such mailing. Nothing herein shall
affect the right of any Lender to serve process in any other manner permitted by
law or to commence legal proceedings or otherwise proceed against MobilePro in
any other jurisdiction.
(b) MobilePro hereby irrevocably waives any objection which it may now
or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement or any other
Credit Document brought in the courts referred to in clause (a) above and hereby
further irrevocably waives and agrees not to plead or claim in any such court
that any such action or proceeding brought in any such court has been brought in
an inconvenient forum.
(c) Each of the parties to this Agreement hereby irrevocably waives all
right to a trial by jury in any action, proceeding or counterclaim arising out
of or relating to this Agreement, the other Credit and Security Documents or the
transactions contemplated hereby or thereby.
10.07 Counterparts. This Agreement may be executed in any number of counterparts
and by the different parties hereto on separate counterparts, each of which when
so executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument. A set of counterparts executed by all
the parties hereto shall be lodged with MobilePro and the Lender.
10.08 Effectiveness. This Agreement shall become effective on the Closing Date
when the Borrowers and the Lender shall have signed a copy hereof (whether the
same or different copies) and shall have delivered the same to Lender at its
offices located at 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx.
10.09 Headings Descriptive. The headings of the several Sections and subsections
of this Agreement are inserted for convenience only and shall not in any way
affect the meaning or construction of any provision of this Agreement.
10.10 Amendment or Waiver. Neither this Agreement nor any other Credit Document
nor any terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing signed by the respective Davel Credit Parties party thereto and the
Lender.
10.11 Survival. All indemnities set forth herein shall survive the execution and
delivery of this Agreement and the making and repayment of the Loan.
10.12 Domicile of Loan. The Lender may transfer and carry its Loan at, to or for
the account of any branch office, subsidiary or affiliate of the Lender,
provided that the Borrowers shall not be responsible for costs arising under
Section 3.04 resulting from any such transfer (other than a transfer pursuant to
Section 1.11 to the extent not otherwise applicable to the Lender prior to such
transfer).
10.13 Confidentiality, Subject to Section 10.04, the Lender shall hold as
confidential all non-public information obtained pursuant to the requirements of
this Agreement in accordance with its customary procedure for handling
confidential information of this nature and in any event may make disclosure to
its Affiliates, employees, auditors, advisors, or counsel or as reasonably
required by any bona fide transferee or participant in connection with the
contemplated transfer of the Loan or participation therein (so long as such
transferee or participant agrees to be
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bound by the provisions of this Section 10.15) or as required or requested by
any governmental agency or representative thereof or pursuant to legal process,
provided that, unless specifically prohibited by applicable law or court order,
the Lender shall notify the Borrowers of any request by any governmental agency
or representative thereof (other than any such request in connection with an
examination of the financial condition of the Lender by such governmental
agency) for disclosure of any such non-public information prior to disclosure of
such information, and provided further that in no event shall any Lender be
obligated or required to return any materials furnished by or on behalf of any
Borrower or any Davel Credit Party.
10.14 Insurance. The Borrowers agree that unless it provides the Lender with
evidence of the insurance coverage required by the Credit and Security Documents
(including Section 6.03 hereof) the Lender may purchase insurance at the
Borrowers' expense to protect its interests in the Collateral. This insurance
may, but need not, protect the Davel Credit Parties' interests. The coverage
that is so purchased may not pay any claim that any Borrower or any Davel Credit
Party makes or any claim that is made by any Borrower or any Davel Credit Party
in connection with the Collateral. The Borrowers may later cancel any insurance
so purchased, but only after providing the Lender with evidence that the
Borrowers have obtained insurance as required by the Credit and Security
Documents (including Section 6.03 hereof). If insurance is so purchased by the
Lender, the Borrowers shall be responsible for the cost of such insurance,
including interest and any other charges that the Lender may impose in
connection with the placement of such insurance, until the effective date of
such cancellation. The costs of such insurance may be added to the Obligations.
The costs of such insurance may be more than the cost of insurance that any
Borrower or any Davel Credit Party may be able to obtain on its own.
10.15 Construction. The parties hereto agree that this Agreement is the product
of negotiations among sophisticated parties, ail of whom were represented by
counsel, and each of whom had an opportunity to participate in, and did
participate in, the drafting of each provision hereof. Accordingly, ambiguities
in this Agreement, if any, shall not be construed strictly or in favor of or
against any party hereto but rather shall be given a fair and reasonable
construction without regard to the rule of contra proferentem.
* * *
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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Agreement to be duly executed and delivered as of the date first above
written.
MOBILEPRO CORP.
By: /S/ XXX X. XXXXXX
--------------------------------------------
Name: Xxx X. Xxxxxx
Title: Chairman and Chief Executive Officer
Address for MobilePro:
0000 Xxxxxxxxx Xxxx., Xxxxx 000
Xxxxxxxx, XX 00000
Telecopy:
Attention: President
DAVEL ACQUISITION CORP.
By /S/ XXX X. XXXXXX
--------------------------------------------
Name: Xxx X. Xxxxxx
Title: President and Chief Executive Officer
Address for Davel Acquisition Corp.
0000 Xxxxxxxxx Xxxx., Xxxxx 000
Xxxxxxxx, XX 00000
Telecopy:
Attention: President
AIRLIE OPPORTUNITY MASTER FUND, LTD.
By: /S/ XXXXXX XXXXX
-----------------------------------------
Name: Xxxxxx Xxxxx
Title:
Address for Airlie Opportunity Master Fund, Ltd.
000 Xxxx Xxxxxx Xxxxxx, Xxx 00
Xxxxxxxxx XX 00000
Telecopy: (000) 000-0000
Attention: Xxxx Xxxxxxx, President
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