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EXHIBIT 10.86
PHONETEL TECHNOLOGIES, INC.,
AS ISSUER
THE SUBSIDIARY GUARANTORS
NAMED ON SCHEDULE I HERETO
AND
MARINE MIDLAND BANK,
AS TRUSTEE
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THIRD SUPPLEMENTAL INDENTURE
DATED AS OF DECEMBER 30, 1997
SUPPLEMENTING THE INDENTURE,
DATED AS OF DECEMBER 18, 1997,
AS SUPPLEMENTED BY THE FIRST SUPPLEMENTAL INDENTURE
DATED AS OF JANUARY 3, 1997,
AND THE SECOND SUPPLEMENTAL INDENTURE
DATED AS OF MAY 29, 1997,
AMONG PHONETEL TECHNOLOGIES, INC.,
THE SUBSIDIARY GUARANTORS NAMED ON SCHEDULE I THERETO
AND MARINE MIDLAND BANK, AS TRUSTEE
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$125,000,000
12% SENIOR NOTES DUE 2006
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THIS THIRD SUPPLEMENTAL INDENTURE, dated as of December
30, 1997, (the "Third Supplemental Indenture"), to the Indenture, dated as of
December 18, 1996, (as amended, modified or supplemented from time to time in
accordance therewith, the "Indenture"), among PhoneTel Technologies, Inc., a
corporation duly organized and existing under the laws of the State of Ohio,
(the "Company"), having its principal office at 0000 Xxxxxxxx Xxxxxx, Xxxxx
Xxxxx Xxxxx, 0xx Xxxxx, Xxxxxxxxx, Xxxx 00000-0000, the Subsidiary Guarantors
named on Schedule I hereto, and Marine Midland Bank, (the "Trustee").
RECITALS
WHEREAS, the Company has heretofore executed and delivered to
the Trustee the Indenture, providing for, among other things, the creation and
issuance by the Company of its 12% Senior Notes due 2006 (the "Notes"); and
WHEREAS, Section 9.02 of the Indenture provides that the
Company, when authorized by a resolution of its Board of Directors, and the
Trustee, together with the written consent of the Holders of at least a majority
in aggregate principal amount of the then outstanding Notes, may amend the
Indenture, subject to certain exceptions specified in Section 9.02 of the
Indenture; and
WHEREAS, the parties hereto are entering into this Third
Supplemental Indenture to (i) amend certain of the definitions contained in
Article One of the Indenture and (ii) amend certain of the provisions contained
in Article Four of the Indenture (collectively, the "Proposed Amendments"); and
WHEREAS, the Holders of at least a majority in aggregate
principal amount of the then outstanding Notes have duly consented to the
Proposed Amendments; and
WHEREAS, the conditions set forth in the Indenture for the
execution and delivery of this Third Supplemental Indenture have been complied
with; and
WHEREAS, the Company has heretofore delivered or is delivering
contemporaneously herewith to the Trustee (i) a copy of resolutions of the Board
of Directors of the Company, (ii) evidence of the written consent of the Holders
of Notes described in the immediately preceding clause and (iii) an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent and covenants, if any, provided for in the Indenture relating to the
execution and delivery of the Third Supplemental Indenture have been complied
with; and
WHEREAS, all other acts and things necessary to make this
Third Supplemental Indenture a valid agreement of the Company and the Trustee,
in accordance with its terms, and a valid amendment of, and supplement to, the
Indenture have been done;
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NOW THEREFORE:
In consideration of the premises, the parties have executed
and delivered this Third Supplemental Indenture, and the Company hereby
covenants and agrees with the Trustee, for the equal and proportionate benefit
of all Holders of the Notes, that the Indenture is supplemented and amended, to
the extent and for the purposes expressed herein, as follows:
SECTION 1. DEFINITIONS. For all purposes of this Third
Supplemental Indenture, except as otherwise expressly provided or unless the
context otherwise requires, terms used herein shall have the meanings assigned
to them in the Indenture.
SECTION 2. AMENDMENT OF SECTION 1.01 OF THE INDENTURE. The
definition of "Consolidated Net Income" in Section 1.01 is amended to read in
its entirety as follows:
"Consolidated Net Income" means, with respect to any period,
the net income (or loss) of the Company and its Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP consistently applied,
adjusted, to the extent included in calculating such net income (or loss), by
excluding, without duplication, (i) all extraordinary gains and losses (net of
fees and expenses relating to the transaction giving rise thereto), (ii) the
portion of net income (or loss) of the Company and its Subsidiaries allocable to
interests in unconsolidated Persons, except to the extent of the amount of
dividends or distributions actually paid to the Company or its Subsidiaries by
such other Person during such period, (iii) net income (or loss) of any Person
combined with the Company or any of its Subsidiaries on a "pooling of interests"
basis attributable to any period prior to the date of combination, (iv) net gain
but not losses in respect of Asset Sales, (v) the net income of any Subsidiary
of the Company to the extent that the declaration of dividends or similar
distributions by that Subsidiary of that income to the Company is not at the
time permitted, directly or indirectly, by operation of the terms of its charter
or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary or its stockholders, (vi)
non-recurring expenses of $6,000,000 incurred in the quarter ended September 30,
1997 in connection with the proposed acquisition of Communications Central Inc.,
(vii) non-recurring charges of $2,361,000 incurred in the quarter ended
September 30, 1997 in connection with dial-around compensation, (viii) all other
non-recurring, non-operating charges which may be incurred after January 1,
1998, other than any such charges incurred in connection with dial-around
compensation, and (ix) all expenses and fees paid in connection with the
solicitation of any consent to amend this Indenture.
SECTION 3. AMENDMENT OF SECTION 4.07(b)(i) OF THE INDENTURE.
Section 4.07(b)(i) is amended to read in its entirety as follows:
(i) Indebtedness of the Company incurred under the Credit
Facility in an aggregate principal amount at any time outstanding not to exceed
the sum of (1) 80% of the net amount of accounts receivable (as determined under
GAAP) of the Company and the Subsidiaries plus (2) an
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amount equal to $1,300 multiplied by the number of Eligible Pay Telephones, in
each case as determined in good faith by the Company at the time of each
incurrence of Indebtedness under the Credit Facility; provided that in no event
shall the aggregate principal amount of Indebtedness outstanding at any one time
under the Credit Facility permitted pursuant to this clause (i) exceed the sum
of (A) $20 million for business expansion, less the aggregate amount of any
other principal payments thereunder constituting permanent reductions of such
Indebtedness pursuant to and in accordance with the covenant described under
Section 4.13; plus (B) $20 million for working capital purposes.
SECTION 4. OPERATION OF PROPOSED AMENDMENTS. Upon the
execution and delivery of this Third Supplemental Indenture by the Trustee and
the Company, the Proposed Amendments contained herein will become effective but
will not become operative until Consents are accepted and paid for by PhoneTel
Technologies, Inc. pursuant to the Consent Solicitation Statement dated December
16, 1997 and subsequent Amended Consent Statement dated December 19, 1997 and
the related Consent Form (in each case, as the same may be amended, modified or
supplemented from time to time in accordance therewith).
SECTION 5. RECITALS. The recitals of fact contained herein
shall be taken as the statements of the Company, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or adequacy of this Third Supplemental
Indenture or the due execution hereof by the Company.
SECTION 6. RATIFICATION AND CONFIRMATION OF INDENTURE. Except
as hereby expressly amended, the Indenture is in all respects ratified and
confirmed and all the terms, provisions and conditions thereof shall be and
remain in full force and effect.
SECTION 7. GOVERNING LAW. This Third Supplemental Indenture
shall be governed by and construed in accordance with the law of the state of
New York but without giving effect to applicable principles of conflicts of law
to the extent that the application of the laws of another jurisdiction would be
required thereby.
SECTION 8. SUCCESSORS. All agreements of the Company and the
Subsidiary Guarantors in this Third Supplemental Indenture shall bind their
respective successors. All agreements of the Trustee in this Third Supplemental
Indenture shall bind its successors.
SECTION 9. DUPLICATE ORIGINALS. The parties may sign any
number of copies of this Third Supplemental Indenture. Each signed copy shall be
an original, but all of them together represent the same agreement.
SECTION 10. SEVERABILITY. In case any provision in this Third
Supplemental Indenture shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
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SECTION 11. HEADINGS. The Article and Section headings of this
Third Supplemental Indenture have been inserted for convenience of reference
only, are not to be considered a part of this Third Supplemental Indenture and
shall in no way modify or restrict any of the terms or provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Third
Supplemental Indenture to be duly executed as of the day and year first above
written.
PHONETEL TECHNOLOGIES, INC.
By: /s/ Xxxxx X. Xxxxxx
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Signature
Name: Xxxxx X. Xxxxxx
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Title: Chief Administrative Officer & General Counsel
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THE SUBSIDIARY GUARANTORS:
PUBLIC TELEPHONE CORPORATION
WORLD COMMUNICATIONS, INC.
PARAMOUNT COMMUNICATION SYSTEMS, INC.
NORTHERN FLORIDA TELEPHONE CORPORATION
PAYPHONES OF AMERICA, INC.
CHEROKEE COMMUNICATIONS INC.
(A TEXAS CORPORATION AND AS SUCCESSOR BY MERGER WITH
PHONETEL CCI, INC.)
CHEROKEE COMMUNICATIONS INC.
(A SOUTH DAKOTA CORPORATION)
CHEROKEE COMMUNICATIONS INC.
(A NEVADA CORPORATION)
PHONETEL ACQUISITION CORPORATION
PHONETEL V, INC.
For Each of the Above
By: /s/ Xxxxx X. Xxxxxx
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Signature
Name: Xxxxx X. Xxxxxx
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Title: Chief Administrative Office & General Counsel
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MARINE MIDLAND BANK, AS TRUSTEE
By: /s/ Xxxxxx Xxxxxxxxx
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Signature
Name: Xxxxxx Xxxxxxxxx
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Title: Assistant Vice President
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