Exhibit 10.1
SECOND AMENDMENT TO THE FOURTH AMENDED
AND RESTATED LOAN AND SECURITY AGREEMENT
THIS SECOND AMENDMENT TO THE FOURTH AMENDED AND RESTATED LOAN
AND SECURITY AGREEMENT (this "Amendment")is made and entered into as
of this 4th day of April, 1996,by and among PEOPLES TELEPHONE
COMPANY, INC., a New York corporation("Borrower"), each of the
Lenders signatory hereto (hereinafter referred to individually as a
"Lender" and collectively as the "Lenders"), and
CREDITANSTALT-BANKVEREIN, an Austrian banking corporation, as agent
for the Lenders (in such capacity, together with its successors and
assigns in such capacity, hereinafter referred to as the "Agent");
W I T N E S S E T H:
WHEREAS, on March 12, 1990, Borrower entered into a certain Loan
and Security Agreement, dated as of March 12, 1990, as amended (as so
amended, the "Original Loan Agreement"), among Borrower, the banks
party thereto and the Agent, pursuant to which such banks made
available to Borrower a revolving credit facility; and
WHEREAS, the Original Loan Agreement was superseded by that
certain Amended and Restated Loan and Security Agreement, dated as of
May 4, 1992 (the "First Restated Agreement") among the Borrower, the
banks party thereto and the Agent; and
WHEREAS, the First Restated Agreement was superseded by that
certain Second Amended and Restated Loan and Security Agreement,
dated as of March 29, 1993 (the "Second Restated Agreement") among
Borrower and PTC Cellular, Inc., a Delaware corporation, as
borrowers, the banks party thereto and the Agent; and
WHEREAS, the Second Restated Agreement was superseded by that
certain Third Amended and Restated Loan and Security Agreement, dated
as of February 17, 1994 (the "Third Restated Agreement") among the
Borrower, the lenders party thereto and the Agent; and
WHEREAS, the Third Restated Agreement was superseded by that
certain Fourth Amended and Restated Loan and Security Agreement,
dated as of July 19, 1995 (the "Fourth Restated Agreement") among
the Borrower, the lenders party thereto (the "Lenders") and the
Agent; and
WHEREAS, the Fourth Restated Agreement was amended on November
29, 1995 pursuant to that certain Waiver and First Amendment to
Fourth Amended and Restated Loan Agreement;
WHEREAS, Borrower was in default in certain financial covenants
as of the fiscal quarter ending December 31, 1995 and has requested
that the Lenders and the Agent waive such Events of Default;
WHEREAS, the Lenders and the Agent are willing to waive such
Events of Default on the condition that the Fourth Restated Agreement
is amended as set forth herein;
NOW, THEREFORE, for and in consideration of the foregoing
premises, the mutual promises, covenants and agreements contained
herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. Definitions. All capitalized terms used herein and not
expressly defined herein shall have the same respective meanings
given to such terms in the Fourth Restated Agreement.
2. Definitions. The Fourth Restated Agreement is hereby
amended by deleting the definitions of "Borrowing Base," "Commitment"
and "Maturity Date" in their entirety and by substituting therefor
the following new definitions of "Borrowing Base," "Commitment" and
"Maturity Date" to read as follows:
"Borrowing Base" shall mean, as of any date, up to (a)
seventy-five percent (75%) of the net amount of Borrower's Eligible
Accounts plus (b) an amount equal to $1,200 multiplied by the number
of Eligible Pay Telephones.
"Commitment" shall mean the aggregate obligation of
the Lenders to make Loans to Borrower, subject to the terms and
conditions hereof, up to an aggregate principal amount not to exceed
at any one time outstanding as to all the Lenders equal to Ten
Million Dollars ($10,000,000), subject to reduction as set forth in
Section 2.10 hereof.
"Maturity Date" shall mean October 4, 1997.
3. Borrowing Procedures. The Fourth Restated Agreement is
hereby further amended by deleting the first sentence of Subsection
2.2(b) thereof in its entirety and by substituting therefor a new
sentence to read as follows:
Unless the Agent shall have been notified by any Lender not
later than 11:00 a.m. (New York time) on the date any Loan is to be
made, that such Lender does not intend to make available to the Agent
such Lender's Commitment Percentage of such Loan, the Agent may
assume that such Lender has made such amount available to the Agent
on the date of such Loan and the Agent may, in reliance upon such
assumption, make available to Borrower a corresponding amount.
4. Pro Rata. The Fourth Restated Agreement is hereby further
amended by deleting Subsection 2.9(c) thereof in its entirety and by
substituting therefor a Subsection 2.9(c) to read as follows:
(c) the making of Loans shall be made prorata among the
relevant Lenders according to their Commitment Percentage of the
Commitment;
5. Notices. The Fourth Restated Agreement is hereby further
amended by deleting Section 2.12 thereof in its entirety and by
substituting therefor a new Section 2.12 to read as follows:
All notices given by Borrower to the Agent of terminations
or reductions of the Commitment, or of borrowings, or prepayments of
Loans hereunder shall either be oral, with prompt written onfirmation
by telecopy, or in writing, with such written confirmation or
writing, in the case of a borrowing, to be substantially in the form
of Exhibit B attached hereto (a "Notice of Borrowing"); shall be
irrevocable; shall be effective only if received by Agent prior to
10:00 a.m. (New York time) on a Business Day which is: (a) at least
fifteen (15) days prior to such termination or reduction of the
Commitment; (b) not later than the date such Loan is to be made;
and (c) not later than the date of any such prepayment, in the case
of a prepayment of a Base Rate Loan. Each such notice to reduce the
Commitment or to prepay the Loans shall specify the amount of the
Commitment to be reduced or of the Loans to be prepaid and the date
of such reduction or prepayment. Each such notice of borrowing shall
specify: (1) the amount of such borrowing (which shall be an
integral multiple of $100,000); that the amount of the Loan to be
made, when aggregated with all other Loans to be outstanding
following the funding of such Loan, does not exceed the Borrowing
Base; and the date such Loan is to be made (which shall be a
Business Day). Each request for a borrowing of a Loan or for any
other financial accommodation by Borrower pursuant to this Agreement
or the other Loan Documents shall constitute (x) an automatic
warranty and representation by Borrower to each Lender that there
does not then exist a Default or Event of Default or any
event or condition which, with the making of such Loan, would
constitute a Default or Event of Default and (y) an affirmation that
as of the date of such request all of the representations and
warranties of Borrower contained in this Agreement and the
other Loan Documents are true and correct in all material respects,
both before and after giving effect to the application of the
proceeds of the Loan except for such changes in such representations
and warranties which do not constitute a Default or Event of Default
hereunder, which do not, individually or in the aggregate, have a
Material Adverse Effect and which have, to the extent required, been
disclosed to the Agent and the Lenders pursuant to Section 6.2 hereof
or otherwise.
6. Interest Rate. The Fourth Restated Agreement is hereby
further amended by deleting Sections 3.1, 3.2 and 3.3 thereof in
their entirety and by substituting therefor new Sections 3.1, 3.2 and
3.3 to read as follows:
3.1 Interest.
(a) Subject to modification pursuant to
Subsection (b) below and Section 10.1 hereof, the average daily
outstanding principal amount of the Loans and all other sums payable
by Borrower hereunder shall bear interest from the date thereof until
paid in full at a fluctuating rate per annum equal to the Base
Lending Rate plus two percent (2%), calculated daily on the basis
of a 360-day year and actual days elapsed.
(b) Accrued interest shall be payable (i) in the
case of any Loan, monthly on the first day of each month hereafter
for the previous month, commencing with the first such day following
the Effective Date; (ii) in the case of any Loan, upon the payment or
prepayment thereof; (iii) in the case of any other sum payable
hereunder as set forth elsewhere in this Agreement or, if not so set
forth, on demand; and (iv) in the case of interest payable at the
Default Rate, on demand.
3.2 [Intentionally Deleted]
3.3 Conversions and Continuations. Commencing on
April 4th, 1996, Borrower shall no longer have the right to Convert
Base Rate Loans to Eurodollar Loans or to Continue Eurodollar Loans
as Eurodollar Loans. Upon the expiration of each Interest Period
outstanding on April 4th, 1996, the Eurodollar Loan relating
thereto shall automatically convert to a Base Rate Loan.
7. Investments. The Fourth Restated Agreement is hereby
further amended by deleting Section 7.5 thereof in its entirety and
by substituting therefor a new Section 7.5 to read as follows:
7.5 Investments. Borrower shall not, and shall not
permit any of its Subsidiaries to make any Investment in any Person
except for investments in (a) certificates of deposit issued by
commercial banks located in the United States (including foreign
banks with a United States Federal Branch) having combined capital
and surplus in excess of Five Hundred Million Dollars ($500,000,000),
and having a maturity date within one year after the date such
investment is made; (b) readily marketable commercial paper of a
domestic issuer rated at least "A-1" by Standard & Poor's Corporation
or "P-1" by Moody's Investors Service, Inc.; and (c) direct
obligations of the United States of America or agencies thereof or
obligations fully guaranteed by the United States of America.
8. Financial Covenants. The Fourth Restated Agreement is
hereby further amended by deleting Sections 8.1 and 8.2 thereof in
their entirety and by substituting therefor new Sections 8.1 and 8.2
to read as follows:
8.1 Net Worth. Borrower shall maintain at all times
during the applicable periods set forth below a Net Worth of not less
than the sum of the amount set forth opposite each such applicable
period:
Applicable Period Amount
01/01/96 - 03/31/96 $19,000,000
04/01/96 - 06/30/96 $14,000,000
07/01/96 - 09/30/96 $10,000,000
At all times thereafter $ 8,000,000
Notwithstanding the foregoing, in the event that Borrower
completes an offering of its equity securities, the amount set forth
above for each applicable period, commencing with the applicable
period in which such issuance occurs, shall be increased by an amount
equal to seventy-five percent (75%) of the amount by which Borrower's
shareholders' equity is increased as a result of the issuance of
equity securities as a part of such offering.
8.2 Interest Coverage Ratio. Borrower shall
maintain as of the end of each fiscal quarter of Borrower during the
applicable periods set forth below an Interest Coverage Ratio of not
less than the ratio set forth opposite each such applicable period:
Applicable Period Ratio
01/01/96 - 03/31/96 0.75:1.00
Each Fiscal Quarter thereafter 1.00:1.00
9. Other Financial Covenants. The Fourth Restated Agreement
is hereby further amended by deleting Sections 8.3, 8.4 and 8.5
thereof in their entirety.
10. Schedules. The Fourth Restated Agreement is hereby further
amended by deleting Schedules 5.5, 5.15, 5.21, 5.22 and 5.23 thereof
in their entirety and by substituting therefor new Schedules 5.5,
5.15, 5.21, 5.22 and 5.23 in the form attached to this Amendment.
11. Waiver. The Agent and the Lenders hereby waive any
Default or Event of Default arising under the Loan Agreement solely
as a result of Borrower's failure, for the fiscal quarter of Borrower
ending December 31, 1995, to maintain (a) the minimum Net Worth
required by Section 8.1 of the Loan Agreement (as in effect prior to
this Amendment); (b) the minimum Leverage Ratio required by Section
8.2 of the Loan Agreement (as in effect prior to this Amendment); (c)
the minimum Operating Cash Flow required by Section 8.4 of the Loan
Agreement (as in effect prior to this Amendment); or (d) the minimum
Interest Coverage Ratio required by Section 8.5 of the Loan Agreement
(as in effect prior to this Amendment).
12. Fee. In consideration of the waivers and amendments set
forth herein, Borrower agrees to pay to each Lender a fee (the "Fee")
of $200,000, which Fee shall be due and payable on the date of
execution hereof. Such fee shall be fully earned on payment thereof
and shall not be subject to proration or rebate for any reason.
13. Conditions Precedent. This Amendment shall not become
effective unless and until the following conditions have been met, to
the sole and complete satisfaction of the Lenders, the Agent and
their respective counsel:
(a) Fee. Borrower shall have paid to Lender the Fee
required by Section 12 of this Amendment.
(b) Representations and Warranties. Giving effect to
this Amendment, all of the representations and warranties made by
Borrower under the Fourth Restated Agreement and the Loan Documents
shall be true and correct in all material respects as of the date
hereof with the same force and effect as if made on and as the date
hereof except for such changes in such representations and warranties
which do not constitute a Default or Event of Default, which do not,
individually or in the aggregate, have a Material Adverse Effect and
which have, to the extent required, been disclosed to the Agent and
the Lenders pursuant to Section 6.2 or 6.8 of the Fourth Restated
Agreement or otherwise;
(c) No Material Adverse Change. Since December 31,
1995, there shall not have occurred any material adverse change in
the assets, liabilities, business, operations or condition (financial
or otherwise) of the Borrower, or any event, condition, or state of
facts which would be expected to have a Material Adverse Effect
subsequent to the date hereof;
(d) Documentation. The Agent and the Lenders shall
have received the following documents, each duly executed and
delivered to the Agent and the Lenders, and each to be satisfactory
in form and substance to Agent and its counsel:
(I) this Amendment;
(ii) the Note;
(iii) an amendment to the Second Amended and
Restated Warrant Agreement (the "Warrant Agreement Amendment");
(iv) the Warrant Certificates required pursuant
to the Warrant Agreement Amendment;
(v) a certificate signed by the President or the Chief
Financial Officer of Borrower, stating that, giving effect to this
Amendment, the representations and warranties set forth in Article 5
of the Fourth Restated Agreement, are true and correct in all
material respects on the date hereof, stating that Borrower is on the
date hereof in compliance with all the terms and conditions set forth
in the Fourth Restated Agreement, as amended hereby, and the Loan
Documents on its part to be observed and performed, and stating that
on the date hereof, after giving effect to this Amendment, no Default
or Event of Default has occurred or is continuing;
(vi) a certificate of the Secretary of Borrower
certifying (i) that attached thereto is a true and correct copy of
the resolutions adopted by its Board of Directors, authorizing the
execution, delivery and performance of this Amendment, the Note and
the other documents contemplated hereby, and (ii) as the incumbency
and genuineness of its officers executing this Amendment, the Note
and the other documents contemplated hereby;
(vii) the written opinion of Steel, Hector &
Davis, counsel to Borrower, in the form and substance satisfactory to
Lenders and Agent;
(viii) such other documents, instruments and
agreements with respect to the transactions contemplated by this
Amendment, in each case in such form and containing such additional
terms and conditions as may be reasonably satisfactory to the
Majority Lenders, and containing, without limitation, representations
and warranties which are customary and usual in such documents.
14. Representations and Warranties; No Default. Borrower
hereby represents and warrants to the Agent and the Lenders that
giving effect to the amendments set forth in Section 10 of this
Amendment, all of Borrower's representations and warranties contained
in the Fourth Restated Agreement and the other Loan Documents are
true and correct on and as of the date of Borrower's execution of
this Agreement; except in respect of the covenants referenced in
Section 10 hereof, no Default or Event of Default has occurred and is
continuing as of such date under any Loan Document; Borrower has the
power and authority to enter into this Agreement and to perform all
of its obligations hereunder; the execution, delivery and
performance of this Agreement have been duly authorized by all
necessary corporate action on the part of Borrower; and the
execution and delivery of this Agreement and performance thereof by
Borrower does not and will not violate the Articles of Incorporation,
By-laws or other organizational documents of the Borrower and does
not and will not violate or conflict with any law, order, writ,
injunction, or decree of any court, administrative agency or other
governmental authority applicable to Borrower or its properties.
15. Expenses. Borrower agrees to pay, immediately upon demand
by the Agent, all costs, expenses, attorneys' fees and other charges
and expenses actually incurred by the Agent in connection with the
negotiation, preparation, execution and delivery of this Agreement
and any other instrument, document, agreement or amendment executed
in connection with this Agreement.
16. Defaults Hereunder. The breach of any representation,
warranty or covenant contained herein or in any document executed in
connection herewith, or the failure to serve or comply with any term
or agreement contained herein shall constitute a Default or Event of
Default under the Fourth Restated Agreement and the Agent and the
Lenders shall be entitled to exercise all rights and remedies they
may have under the Fourth Restated Agreement, any other documents
executed in connection therewith and applicable law.
17. References. All references in the Fourth Restated
Agreement and the Loan Documents to the Fourth Restated Agreement
shall hereafter be deemed to be references to the Fourth Restated
Agreement as amended hereby and as the same may hereafter be amended
from time to time.
18. Limitation of Agreement. Except as especially set forth
herein, this Agreement shall not be deemed to waive, amend or modify
any term or condition of the Fourth Restated Agreement, each of which
is hereby ratified and reaffirmed and which shall remain in full
force and effect, nor to serve as a consent to any matter prohibited
by the terms and conditions thereof.
19. Counterparts. This Agreement may be executed in any number
of counterparts, and any party hereto may execute any counterpart,
each of which, when executed and delivered, will be deemed to be an
original and all of which, taken together will be deemed to be but
one and the same agreement.
20. Further Assurances. Borrower agrees to take such further
action as the Agent or the Majority Lenders shall reasonably request
in connection herewith to evidence the amendments herein contained to
the Fourth Restated Agreement.
21. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the successors and permitted assigns
of the parties hereto.
22. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York,
without regard to principles of conflicts of law.
23. No Claim. Borrower hereby represents, warrants,
acknowledges and agrees to end with the Lenders and Agent that (a)
Borrower neither holds nor claims any right of action, claim, cause
of action or damages, either at law or in equity, against the Lenders
and Agent which arises from, may arise from, allegedly arise from,
are based upon or are related in any manner whatsoever to the Fourth
Restated Agreement and the Loan Documents or which are based upon
acts or omissions of the Lenders or Agent in connection therewith and
(b) the Obligations are absolutely owed to the Lenders and Agent,
without offset, deduction or counterclaim.
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment under seal as of the date first written above.
"BORROWER"
PEOPLES TELEPHONE COMPANY, INC.
By: __________________________
Bonnie S. Biumi
Chief Financial Officer
Attest:_______________________
Francis J. Harkins
Secretary
[CORPORATE SEAL]
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"AGENT"
CREDITANSTALT-BANKVEREIN
By:___________________________
Robert M. Biringer
Senior Vice President
By:___________________________
Joseph P. Longosz
Vice President
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"LENDER"
CREDITANSTALT-BANKVEREIN
By:___________________________
Robert M. Biringer
Senior Vice President
By:___________________________
Joseph P. Longosz
Vice President