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EXHIBIT 10.89
SECOND AMENDMENT TO CREDIT AGREEMENT AND WAIVER
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THIS SECOND AMENDMENT TO CREDIT AGREEMENT AND WAIVER (the "AMENDMENT"),
dated as of March 31, 1998, among PHONETEL TECHNOLOGIES, INC., an Ohio
corporation (the "BORROWER"), ING (U.S.) CAPITAL CORPORATION, a Delaware
corporation ("ING"), TRANSAMERICA BUSINESS CREDIT CORPORATION, a Delaware
corporation ("TRANSAMERICA"), FINOVA CAPITAL CORPORATION, a Delaware corporation
("FINOVA"), and AMERICAN NATIONAL BANK, a national banking association
("AMERICAN"), constituting all of the Lenders under the Credit Agreement
referenced below, ING in its capacity as Agent for the Lenders and Transamerica
and Finova in their capacity as Co-Agents for the Lenders.
RECITALS:
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A. The Borrower, the Lenders, the Agent and the Co-Agents have entered
into a certain Credit Agreement, dated as of May 30, 1997, as amended by a
certain First Amendment to Credit Agreement dated as of February 24, 1998 (as so
amended, the "CREDIT AGREEMENT"). Capitalized terms used herein and not
otherwise defined shall have the meanings ascribed to such terms in the Credit
Agreement.
B. The Borrower has requested that certain covenants and provisions in
the Credit Agreement be amended or waived as set forth herein.
C. The Lenders are agreeable to amending the Credit Agreement on the
terms and conditions set forth herein.
NOW, THEREFORE, the parties hereto agree as follows:
1. AMENDMENT TO SECTION 6.2.4. Section 6.2.4 of the Credit Agreement is
hereby amended by replacing subsections (b) and (d) of such Section
with the following:
(b) DEBT TO EBITDA RATIO. The Borrower will not permit the
Debt to EBITDA Ratio of the Borrower and its Subsidiaries for
the twelve-month period ending on the last day of any Fiscal
Quarter to be more than the ratio set forth opposite such
Fiscal Quarter (for the Fiscal Quarter ending on March 31,
1998, such ratio shall be calculated as provided in clause (e)
of this SECTION 6.2.4):
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Fiscal Quarter Ending: Ratio
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March 31, 1998 10.7
June 30, 1998 7.5
September 30, 1998 6.6
December 31, 1998 5.5
March 31, 1999 5.0
June 30, 1999 5.0
September 30, 1999 5.0
December 31, 1999 4.5
March 31, 2000 4.5
June 30, 2000 4.0
(d) INTEREST COVERAGE RATIO. The Borrower will not permit the
Interest Coverage Ratio of the Borrower and its Subsidiaries
for the twelve-month period ending on the last day of any
Fiscal Quarter to be less than the ratio set forth opposite
such Fiscal Quarter (for the Fiscal Quarter ending on March
31, 1998, such ratio to be calculated as provided in clause
(e) of this SECTION 6.2.4.):
Fiscal Quarter Ending: Ratio
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March 31, 1998 1.1
June 30, 1998 1.2
September 30, 1998 1.3
December 31, 1998 1.5
March 31, 1999 1.7
June 30, 1999 1.8
September 30, 1999 1.8
December 31, 1999 1.9
March 31, 2000 1.9
June 30, 2000 1.9
2. AMENDMENT TO SECTION 6.2.4. Section 6.2.4 of the Credit Agreement is
hereby amended by adding thereto the following subsection (f):
(f) ROUNDING FACTOR. For purposes of determining compliance
with subsections (a) through (d) of this SECTION 6.2.4, all
amounts shall be rounded to the nearest decimal set forth in
the respective subsection using customary rounding methods.
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3. WAIVER OF SECTION 6.1.1(a). The Lenders hereby waive any Event of
Default arising as a result of the qualification taken by Price
Waterhouse LLP in footnote 2 of the consolidated financial statements
of the Borrower and its Subsidiaries as of December 31, 1997 and for
the Fiscal Year ending on such date. Nothing herein shall be construed
to waive any requirements of Sections 6.1.1 with respect to any
financial statements of the Borrower and its Subsidiaries, other than
the financial statements as at December 31, 1997 and for the Fiscal
Year ending on such date, or with respect to any other matter set forth
in such financial statements other than footnote 2 of such financial
statements.
4. LENDERS' AUDIT AND INSPECTION OF BOOKS AND RECORDS. In consideration of
the amendments and waivers set forth herein, the Borrower acknowledges
and agrees that, pursuant to Section 6.1.7 of the Credit Agreement, the
Agent and the Lenders shall have access to and shall be permitted to
conduct an inspection and audit of the books, records and business of
the Borrower and its Subsidiaries (such examination may include review
of the Borrower's business, prospects and financial position by
independent consultants), and that the Borrower shall pay any fees and
expenses, including, without limitation, any fees of the Agent's and
the Lenders' in-house or outside auditors incurred in connection with
such inspection and audit. Notwithstanding the foregoing, the Agent and
the Lenders agree that no such inspection and audit shall be commenced
prior to April 15, 1998.
5. REPRESENTATIONS, WARRANTIES AND COVENANTS. In order to induce the
Lenders, the Agent and the Co-Agents to enter into this Amendment and
to consummate the transactions contemplated herein, the Borrower hereby
represents, warrants and covenants to and with the Agent, the Co-Agents
and each Lender as follows:
(a) as of the date hereof, all representations and warranties
set forth in Article 5 of the Credit Agreement and in all other
Loan Documents are true and correct in all material respects,
except to the extent described in Section 15 of that certain
First Amendment to Credit Agreement dated as of February 24,
1998 among the Borrower, ING, Transamerica, Finova and
American;
(b) as of the date hereof and after giving effect to this
Amendment, no Default or Event of Default exists under the
Credit Agreement; and
(c) the breach of any representation, warranty or covenant set
forth in this Section 5 shall constitute an Event of Default
under the Credit AgreemenT.
6. EFFECTIVENESS. This Amendment shall become effective only upon receipt
by the Agent of a copy of this Amendment, duly executed by each of the
Borrower, the Lenders, the Agent and the Co-Agents, and duly
acknowledged and consented to by the Subsidiaries of the Borrower in
the form attached to this Amendment.
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7. CONTINUING EFFECTIVENESS OF CREDIT AGREEMENT. The Credit Agreement and
each of the other Loan Documents shall remain in full force and effect
in accordance with their respective terms, except as expressly amended
or modified by this Amendment.
8. COST AND EXPENSES. The Borrower agrees to pay all reasonable
out-of-pocket expenses of the Agent and each of the Lenders party to
this Amendment for the negotiation, preparation, execution and delivery
of this Amendment (including reasonable fees and expenses of counsel to
the Agent and such Lenders).
9. HEADINGS. The various headings of this Amendment are inserted for
convenience only and shall not affect the meaning or interpretation of
this Amendment or any provision hereof.
10. COUNTERPARTS. This Amendment may be executed by the parties hereto in
several counterparts, each of which shall be executed by the Borrower,
the Lenders and the Agent and shall be deemed to be an original and all
of which shall constitute together but one and the same agreement.
11. GOVERNING LAW. THIS AMENDMENT SHALL BE DEEMED TO BE A CONTRACT MADE
UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK.
12. SUCCESSORS AND ASSIGNS. This Amendment shall be binding upon and shall
inure to the benefit of the parties hereto and their respective
successors and assigns; PROVIDED, HOWEVER, that the Borrower may not
assign or transfer its rights or obligations hereunder or under the
Credit Agreement except in accordance with the terms of the Credit
Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
PHONETEL TECHNOLOGIES, INC.
By:/s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
Secretary
[CORPORATE SEAL]
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Percentage: 26.6666667% ING (U.S.) CAPITAL CORPORATION, in its
capacity as Agent and Lender
By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
Vice President
Percentage: 26.6666667% TRANSAMERICA BUSINESS CREDIT CORPORATION,
in its capacity as Co-Agent and Lender
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: Senior Account Executive
Percentage: 26.6666667% FINOVA CAPITAL CORPORATION, in its capacity
as Co-Agent and Lender
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: Vice President
Percentage: 20.0% AMERICAN NATIONAL BANK, in its capacity as
Lender
By: /s/ Xxxxxxx Xxxxxxxx
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Name: Xxxxxxx Xxxxxxxx
Title: Vice President
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ACKNOWLEDGMENT AND CONSENT
The undersigned hereby acknowledge receipt of a copy of the foregoing
Amendment, consent to the terms and provisions set forth therein, and agree that
the Subsidiary Guaranty dated as of May 30, 1997 (the "SUBSIDIARY GUARANTY")
made by each of the undersigned, jointly and severally, in favor of ING (U.S.)
Capital Corporation ("ING"), the other lenders as are, or may from time to time
become, parties to the Credit Agreement (as defined in the Subsidiary Guaranty)
and ING in its capacity as Agent for such Lenders, will continue in full force
and effect without diminution or impairment notwithstanding the execution and
delivery of the Amendment. The undersigned further acknowledge and agree that,
upon effectiveness of the Amendment and from and after the date thereof, each
reference to the Credit Agreement in the Subsidiary Guaranty and each other Loan
Document (as such term is defined in the Credit Agreement) to which any of the
undersigned is a party shall mean and be a reference to the Credit Agreement as
amended by this Amendment.
CHEROKEE COMMUNICATIONS, INC.
By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
Secretary
[CORPORATE SEAL]
PHONETEL V, INC.
By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
Secretary
[CORPORATE SEAL]
PHONETEL ACQUISITION CORP.
By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
Secretary
[CORPORATE SEAL]
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