Exhibit 10.8
FIRST AMENDMENT AND WAIVER TO
AMENDED, RESTATED, AND CONSOLIDATED CREDIT AGREEMENT
This FIRST AMENDMENT AND WAIVER TO AMENDED, RESTATED, AND
CONSOLIDATED CREDIT AGREEMENT entered into as of this 31st day of March, 2003
(this "First Amendment"), is hereby entered into among Davel Financing Company,
L.L.C., a Delaware limited liability company ("Davel"), PhoneTel Technologies,
Inc., an Ohio corporation ("PhoneTel"), Cherokee Communications, Inc., an Ohio
corporation ("Cherokee", and together with Davel and PhoneTel, "Borrowers"),
each of the guarantors under the Amended, Restated, and Consolidated Credit
Agreement that is a signatory hereto (the "Guarantors", and together with
Borrowers, the "Credit Parties"), each of the lenders under the Amended,
Restated, and Consolidated Credit Agreement that is a signatory hereto (the
"Lenders"), and Foothill Capital Corporation, a California corporation, as agent
for the Lenders ("Agent").
RECITALS
WHEREAS, the Credit Parties, the Lenders, and Agent have entered
into that certain Amended, Restated, and Consolidated Credit Agreement (the
"Amended, Restated, and Consolidated Credit Agreement") dated as of July 24,
2002 pursuant to which, among other things, the parties thereto amended,
restated, and consolidated the Existing Davel Credit Agreement and the Existing
PhoneTel Credit Agreement;
WHEREAS, as of the date hereof, the outstanding principal
balance of Term Loan A is $53,177,029.15, and the outstanding principal balance
of Term Loan B is $$54,200,366.64;
WHEREAS, the Credit Parties are in Default under (i) Section
7.01(c) of the Amended, Restated, and Consolidated Credit Agreement for failing
to (a) comply with the financial covenant regarding cash expenses set forth in
Section 6.01(b)(i) of the Amended, Restated, and Consolidated Credit Agreement
for the accounting period ending on January 31, 2003, (b) maintain a minimum
EBITDA in compliance with the financial covenant set forth in Section
6.01(b)(ii) of the Amended, Restated, and Consolidated Credit Agreement for the
accounting period beginning on August 1, 2002 and ending on December 31, 2002,
and (c) maintain a minimum Adjusted EBITDA in compliance with the financial
covenant set forth in Section 6.01(b)(iii) of the Amended, Restated, and
Consolidated Credit Agreement for the accounting period beginning on August 1,
2002 and ending on December 31, 2002; and (ii) Section 7.01(g) of the Amended,
Restated, and Consolidated Credit Agreement for failing to comply with their
respective financial covenants under the Senior Debt Agreements by failing to
comply with the financial covenant thereunder regarding cash expenses for the
measuring period ending on January 31, 2003 and for failing to maintain the
requisite minimum EBITDA and minimum Adjusted EBITDA (as such terms are defined
in the Senior Debt Agreements) for the measuring periods ending on December 31,
2002 and January 31, 2003 (the existing defaults set forth in clauses (i) and
(ii) above, collectively, the "Existing Defaults"); and
WHEREAS, the Credit Parties have requested, and the Lenders have
agreed, that Lenders waive the Existing Defaults, but only to the extent set
forth pursuant to the terms and conditions set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, and upon the terms and conditions
set forth herein the Credit Parties, the Lenders and Agent hereby agree as
follows:
SECTION 1. RELATION TO THE AMENDED, RESTATED, AND CONSOLIDATED CREDIT
AGREEMENT; DEFINITIONS.
1.1 RELATION TO AMENDED, RESTATED, AND CONSOLIDATED CREDIT
AGREEMENT. This First Amendment constitutes an integral part of the Amended,
Restated, and Consolidated Credit Agreement and shall be deemed to be a Loan
Document for all purposes. Upon the effectiveness of this First Amendment, on
and after the date hereof each reference in the Amended, Restated, and
Consolidated Credit Agreement to "this Agreement," "hereunder," "hereof," or
words of like import referring to the Amended, Restated, and Consolidated Credit
Agreement, and each reference in the other Loan Documents to "the Amended,
Restated, and Consolidated Credit Agreement," "thereunder," "thereof" or words
of like import referring to the Amended, Restated, and Consolidated Credit
Agreement, shall mean and be a reference to the Amended, Restated, and
Consolidated Credit Agreement as amended hereby.
1.2 CAPITALIZED TERMS. For all purposes of this First
Amendment, capitalized terms used herein without definition shall have the
meanings specified in the Amended, Restated, and Consolidated Credit Agreement.
SECTION 2. AMENDMENT TO AMENDED, RESTATED, AND CONSOLIDATED CREDIT
AGREEMENT.
2.1 AMENDMENT TO SECTION 2.03(e).
(a) Section 2.03(e) of the Amended, Restated, and
Consolidated Credit Agreement is hereby amended by deleting it in its entirety
and substituting the following therefor:
(e) Scheduled Repayment of Term Loan A. The
Borrowers shall make monthly payments in respect of principal and
interest on Term Loan A to the Lenders in accordance with the schedule
set forth below. All such payments shall be applied first to interest
and fees owing, with the balance to principal. On the Maturity Date, the
unpaid balance of Term Loan A and all accrued and unpaid interest shall
be due and payable in full.
Payment Date Payment Amount
------------ --------------
July 1, 2003 $1,041,666.67
August 1, 2003 $1,041,666.67
September 1, 2003 $1,041,666.67
October 1, 2003 $1,041,666.67
November 1, 2003 $1,041,666.67
December 1, 2003 $1,041,666.67
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Payment Date Payment Amount
------------ --------------
January 1, 2004 $1,250,000.00
February 1, 2004 $1,250,000.00
March 1, 2004 $1,250,000.00
April 1, 2004 $1,250,000.00
May 1, 2004 $1,250,000.00
June 1, 2004 $1,250,000.00
July 1, 2004 $1,250,000.00
August 1, 2004 $1,250,000.00
September 1, 2004 $1,250,000.00
October 1, 2004 $1,250,000.00
November 1, 2004 $1,250,000.00
December 1, 2004 $1,250,000.00
January 1, 2005 $1,500,000.00
February 1, 2005 $1,500,000.00
March 1, 2005 $1,500,000.00
April 1, 2005 $1,500,000.00
May 1, 2005 $1,500,000.00
June 1, 2005 $1,500,000.00
July 1, 2005 $1,500,000.00
August 1, 2005 $1,500,000.00
September 1, 2005 $1,500,000.00
October 1, 2005 $1,500,000.00
November 1, 2005 $1,500,000.00
December 1, 2005 $1,500,000.00
2.2 AMENDMENT TO SECTION 6.01(b)(ii).
(a) Section 6.01(b)(ii) of the Amended, Restated,
and Consolidated Credit Agreement is hereby amended by deleting it in its
entirety and substituting the following therefor:
(ii) Minimum EBITDA. The Credit Parties shall not
permit EBITDA for any fiscal period set forth below, taken as one
accounting period, to be less than the amount set forth opposite such
period below:
Period EBITDA
------ ------
4/1/02-3/31/03 2,500,000
7/1/02-6/30/03 2,100,000
10/1/02-9/30/03 5,700,000
1/1/03-12/31/03 12,900,000
4/1/03-3/31/04 17,400,000
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Period EBITDA
------ ------
7/1/03-6/30/04 18,200,000
10/1/03-9/30/04 19,000,000
1/1/04-12/31/04 19,700,000
4/1/04-3/31/05 20,100,000
7/1/04-6/30/05 20,400,000
10/1/04-9/30/05 20,600,000
1/1/05-12/31/05 20,000,000
2.3 AMENDMENT TO SECTION 6.01(b)(iii).
(a) Section 6.01(b)(iii) of the Amended, Restated,
and Consolidated Credit Agreement is hereby amended by deleting it in its
entirety and substituting the following therefor:
(iii) Minimum Adjusted EBITDA. The Credit Parties
shall not permit Adjusted EBITDA for any fiscal period set forth below,
taken as one accounting period, to be less than the amount set forth
opposite such period below:
Period EBITDA
------ ------
4/1/02-3/31/03 700,000
7/1/02-6/30/03 1,500,000
10/1/02-9/30/03 5,100,000
1/1/03-12/31/03 7,600,000
4/1/03-3/31/04 13,300,000
7/1/03-6/30/04 15,500,000
10/1/03-9/30/04 17,700,000
SECTION 3. WAIVER.
3.1 WAIVER OF CERTAIN DEFAULTS. Subject to the satisfaction
of (i) all of the conditions precedent contained in Section 5 of this First
Amendment, and (ii) Section 3.2 below, Lenders hereby waive the Existing
Defaults under Sections 7.01(c) and 7.01(g) of the Amended, Restated, and
Consolidated Credit Agreement.
3.2 EFFECTIVENESS OF WAIVERS. Notwithstanding the foregoing,
the waivers provided in Section 3.1 above shall terminate automatically without
further action by Agent or any Lender in the event that the nature or extent of
the Existing Defaults should prove to be in excess of the nature or extent as
disclosed to Lenders prior to the date hereof.
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SECTION 4. REPRESENTATIONS, WARRANTIES AND
ACKNOWLEDGMENTS.
4.1 REPRESENTATIONS.
Each of the Credit Parties hereby represents and
warrants to Lenders that:
(a) Such Credit Party is a limited liability company
or corporation, as applicable, duly organized and existing and in good standing
under the laws of its jurisdiction of formation and is duly qualified to do
business and in good standing in every jurisdiction in which the nature of the
business done or the property owned by it would make such qualification
necessary;
(b) Such Credit Party has all requisite power and
authority to own and operate its properties, and to conduct its business as
currently conducted and as currently proposed to be conducted. Such Credit Party
has all requisite power and authority necessary to enter into this First
Amendment and to perform its respective obligations under this First Amendment;
(c) Such Credit Party has taken all limited
liability company or corporate, as applicable, action necessary to be taken by
it to authorize the execution and delivery of this First Amendment. This First
Amendment has been duly executed and delivered by such Credit Party and
constitutes its legal, valid and binding obligations, enforceable against it in
accordance with its terms;
(d) After giving effect to the amendments and
waivers herein, no event has occurred and no condition exists which constitutes
a Default or an Event of Default under the Amended, Restated, and Consolidated
Credit Agreement or the other Loan Documents; and
(e) The Amended, Restated, and Consolidated Credit
Agreement and all other Loan Documents and all representations, warranties,
terms and conditions therein remain in full force and effect, and such Credit
Party hereby confirms and ratifies each of the provisions of the Amended,
Restated, and Consolidated Credit Agreement and the other Loan Documents
applicable to it.
SECTION 5. CONDITIONS TO EFFECTIVENESS.
5.1 CONDITIONS TO EFFECTIVENESS. The amendments contained in
Section 2 above shall become effective as of the date hereof when, and only when
duly executed counterparts of this First Amendment have been executed and
delivered by the Lenders, Agent and each Credit Party.
SECTION 6. MISCELLANEOUS.
6.1 CROSS-REFERENCES. References in this First Amendment to
any Section (or "Section ") are, unless otherwise specified, to such Section (or
"Section ") of this First Amendment.
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6.2 SUCCESSORS AND ASSIGNS. This First Amendment shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
6.3 COUNTERPARTS. This First Amendment may be executed by
one or more of the parties hereto on any number of separate counterparts, each
of which shall be deemed an original and all of which, taken together, shall be
deemed to constitute one and the same instrument. Delivery of an executed
counterpart of this First Amendment by facsimile transmission shall be as
effective as delivery of an originally executed counterpart hereof.
6.4 GOVERNING LAW. THIS FIRST AMENDMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF CALIFORNIA, WITHOUT
REGARD TO ANY CONFLICT OF LAWS PRINCIPLES.
6.5 OUTSTANDING INDEBTEDNESS.
(a) Each of the Credit Parties hereby acknowledges
and agrees that as of the date hereof, the aggregate outstanding principal
amount due under the Amended, Restated, and Consolidated Credit Agreement is
$107,377,395.79 and that such principal amount is payable pursuant to the
Amended, Restated, and Consolidated Credit Agreement as amended hereby without
defense, offset, withholding, counterclaim or deduction of any kind.
(b) Each of the Credit Parties, each of their
respective successors-in-title, legal representatives and assignees and, to the
extent the same is claimed by right of, through or under such Credit Party, for
its past, present and future employees, agents, representatives, officers,
directors, shareholders, and trustees, does hereby forever remise, release and
discharge each of the Lenders and Agent, and each of their respective
successors-in-title, legal representatives and assignees, past, present and
future officers, directors, shareholders, trustees, agents, employees,
consultants, experts, advisors, attorneys and other professionals and all other
persons and entities to whom such Lender or Agent would be liable if such
persons or entities were found to be liable to the Credit Parties, or any of
them (collectively hereinafter the "Lender Parties"), from any and all manner of
action and actions, cause and causes of action, claims, charges, demands,
counterclaims, suits, debts, dues, sums of money, accounts, reckonings, bonds,
bills, specialties, covenants, contracts, controversies, damages, judgments,
expenses, executions, liens, claims of liens, claims of costs, penalties,
attorneys' fees, or any other compensation, recovery or relief on account of any
liability, obligation, demand or cause of action of whatever nature relating to,
arising out of or in connection with the Amended, Restated, and Consolidated
Credit Agreement or any other Loan Document, including but not limited to, acts,
omissions to act, actions, negotiations, discussions and events resulting in the
finalization and execution of this First Amendment, as, among and between the
Credit Parties and the Lender Parties, such claims whether now accrued and
whether now known or hereafter discovered, from the beginning of time through
the date hereof.
Each Credit Party hereby knowingly, voluntarily, intentionally
and expressly waives and relinquishes any and all rights and benefits that it
may have under Section 1542 of the California Civil Code, or any other similar
provision of any other jurisdiction, as against the Lender Parties. Section 1542
of the Civil Code of California provides:
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"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
Each Credit Party hereby acknowledges that the foregoing waiver
of the Section 1542 of the California Civil Code was separately bargained for.
Each Credit Party knowingly, voluntarily, intentionally and expressly waives any
and all rights and benefits conferred by Section 1542, or by any law of the any
state or territory of the United States or any foreign country or principle of
common law that is similar or analogous to Section 1542 and agrees and
acknowledges that this waiver is an essential term of this First Amendment,
without which the consideration would not have been given by the Lenders to the
Credit Parties.
6.6 RATIFICATION. Except as expressly amended or waived
herein, all of the representations, warranties, terms, covenants and conditions
of the Amended, Restated, and Consolidated Credit Agreement and the other Loan
Documents shall remain unamended and unwaived and shall continue to be, and
shall remain, in full force and effect in accordance with their respective
terms. The amendments set forth herein shall be limited precisely as provided
for herein to the provisions expressly amended herein and shall not be deemed to
be a waiver of, amendment of, consent to or modification of any other term or
provision of any other document or of any transaction or further action on the
part of any Credit Party which would require the consent of the Lenders under
the Amended, Restated, and Consolidated Credit Agreement.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this First
Amendment to be executed and delivered as of the date first above written.
BORROWERS: DAVEL FINANCING COMPANY, L.L.C.,
a Delaware limited liability company
By: DAVEL COMMUNICATIONS, INC.,
its sole managing member
By: /s/ Xxxx X. Xxxxxxxxxx
------------------------
Xxxx X. Xxxxxxxxxx
Chief Executive Officer
PHONETEL TECHNOLOGIES, INC.,
an Ohio corporation
By: /s/ Xxxx X. Xxxxxxxxxx
------------------------
Xxxx X. Xxxxxxxxxx
Chief Executive Officer
CHEROKEE COMMUNICATIONS, INC.,
a Texas corporation
By: /s/ Xxxx X. Xxxxxxxxxx
------------------------
Xxxx X. Xxxxxxxxxx
Chief Executive Officer
PARENT GUARANTOR:DAVEL
COMMUNICATIONS, INC.,
a Delaware corporation
By: /s/ Xxxx X. Xxxxxxxxxx
------------------------
Xxxx X. Xxxxxxxxxx
Chief Executive Officer
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SUBSIDIARY GUARANTORS: DAVEL COMMUNICATIONS GROUP, INC.,
an Illinois corporation
ADTEC COMMUNICATIONS, INC.,
a Florida corporation
CENTRAL PAYPHONE SERVICES, INC.,
a Georgia corporation
COMMUNICATIONS CENTRAL, INC.,
a Georgia corporation
COMMUNICATIONS CENTRAL OF
GEORGIA, INC.,
a Georgia corporation
DAVEL MEDIA, INC.,
a Delaware corporation
DAVEL MEXICO, LTD.,
an Illinois corporation
DAVELTEL, INC.,
an Illinois corporation
INTERSTATE COMMUNICATIONS, INC.,
a Georgia corporation
INVISION TELECOM, INC.,
a Georgia corporation
PEOPLES ACQUISITION CORPORATION,
a Pennsylvania corporation
PEOPLES COLLECTORS, INC.,
a Delaware corporation
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PEOPLES TELEPHONE COMPANY, INC.,
a New York corporation
PEOPLES TELEPHONE COMPANY, INC.,
a New Hampshire corporation
PTC CELLULAR, INC.,
a Delaware corporation
PTC SECURITY SYSTEMS, INC.,
a Florida corporation
SILVERADO COMMUNICATIONS CORP.,
a Colorado corporation
TELALEASING ENTERPRISES, INC.,
an Illinois corporation
T.R.C.A., INC.,
an Illinois corporation
By: /s/ Xxxx X. Xxxxxxxxxx
------------------------
Xxxx X. Xxxxxxxxxx
Chief Executive Officer
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AGENT: FOOTHILL, CAPITAL CORPORATION,
as Agent and Lender
By: /s/ Xxx Xxx
------------------------------------
Name: Xxx Xxx
Title: Vice President
LENDERS: FOOTHILL PARTNERS III, L.P.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing General Partner
ABLECO FINANCE LLC,
as Lender and agent for its affiliate assigns
By: /s/ Xxxxx Xxxxx
------------------------------------
Name: Xxxxx Xxxxx
Title: Sr. V.P./Chief Credit Officer
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Xxxxxxx X. Xxxxxxx, Xx.
------------------------------------
Name: Xxxxxxx X. Xxxxxxx, Xx.
Title: Vice President
U.S. BANK NATIONAL ASSOCIATION
By: /s/ Xxxxx Xxxxx
------------------------------------
Name: Xxxxx Xxxxx
Title: Assistant Vice President
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ARK CLO 2000-1, LIMITED
By: Patriarch Partners, LLC
its Collateral Manager
By: /s/ Xxxx Xxxxxx
---------------------------
Name: Xxxx Xxxxxx
Title: Manager
CERBERUS PARTNERS, L.P.
By: Cerberus Associates, LLC, as General
Partner
By: /s/ Xxxxx Xxxxx
---------------------------
Name: Xxxxx Xxxxx
Title: Managing Director
BNP PARIBAS
By: /s/ Xxx Xxxxxxxxx
------------------------------
Name: Xxx Xxxxxxxxx
Title: Director
XXXXXX XXXXXXX PRIME INCOME TRUST
By: /s/ Xxxxxx Xxxxxxxx
------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Executive Director
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AVENUE SPECIAL SITUATIONS FUND II, LP
By: Avenue Capital Partners II, LLC,
as General Partner
By: GLS Partners, LLC,
Managing Member of the General
Partner
By: Xxxxx X. Xxxxxxx
-------------------------
Name: XXXXX X. XXXXXXX
Title: Managing Member
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