EXHIBIT 10.1
EXECUTION COPY
SEVENTH AMENDMENT TO CREDIT AGREEMENT
AND CONSENT AND WAIVER
This SEVENTH AMENDMENT TO CREDIT AGREEMENT AND CONSENT AND WAIVER
(this "Amendment") is entered into as of February 19, 2002 among DAVEL FINANCING
COMPANY, L.L.C., a Delaware limited liability company (the "Borrower"); DAVEL
COMMUNICATIONS, INC., a Delaware corporation (the "Parent"); the Parent and the
Domestic Subsidiaries of the Borrower, as Guarantors; the Lenders party to the
"Credit Agreement" (referred to and defined below) and PNC BANK, NATIONAL
ASSOCIATION, as Administrative Agent for the Lenders (the "Administrative
Agent"). Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Credit Agreement.
RECITALS
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WHEREAS, the Borrower, the Guarantors, the Lenders, the Administrative
Agent, BancBoston Robertson Stephens, Inc., as Syndication Agent and The Chase
Manhattan Bank, as Documentation Agent, entered into that certain Credit
Agreement, dated as of December 23, 1998 (as amended and modified by that
certain First Amendment to Credit Agreement and Consent and Waiver dated as of
April 8, 1999 among the Borrower, the Parent, the Domestic Subsidiaries of the
Borrower, the Lenders and Bank of America, N.A., as the administrative agent,
that certain Second Amendment to Credit Agreement dated as of March 9, 2000
among such parties, that certain Third Amendment to Credit Agreement dated as of
June 22, 2000 among such parties, that certain Fourth Amendment to Credit
Agreement dated as of September 28, 2000, that certain Fifth Amendment to Credit
Agreement and Wavier dated as of November 29, 2000 among such parties, and that
certain Sixth Amendment to Credit Agreement dated as of March 23, 2001 among
such parties, and as may be further amended or modified from time to time, the
"Credit Agreement");
WHEREAS, the Borrower has failed to make the scheduled principal
payments due and payable on July 15, 2001, October 15, 2001 and January 11, 2002
pursuant to Section 2.1(f) of the Credit Agreement (the "Payment Defaults");
WHEREAS, the Borrower has failed to comply with its Minimum Cumulative
EBITDA covenant set forth in Section 7.2(a) of the Credit Agreement with respect
to the months of May through December of 2001 (collectively the "Covenant
Violations");
WHEREAS, the Borrower has failed to comply with its representations
and warranties pursuant to Section 6.2 (No Material Change), Section 6.3
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(Organization and Good Standing), Section 6.8 (No Default) and Section 6.20
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(Solvency) of the Credit Agreement (collectively the "Representations and
Warranties Defaults");
WHEREAS, the Borrower has requested that the Lenders consent to the
transactions contemplated by and the execution of (i) Agreement and Plan of
Reorganization and Merger dated February 19, 2002 by and among the Parent, the
Borrower, DF Merger Corp., PT Merger
Corp., and PhoneTel Technologies, Inc.("PhoneTel") (the "Merger Agreement"),
(ii) Exchange Agreement dated as of February 19, 2002 among the Parent, the
Borrower, DF Merger Corp., PhoneTel, Cherokee Communications, Inc. ("Cherokee"),
and the persons identified therein as the Davel Lenders and the PhoneTel
Lenders, respectively (the "Exchange Agreement"), (iii) Credit Agreement dated
as of February 19, 2002 among the Borrower, PhoneTel and Cherokee, as borrowers,
the Parent and the domestic subsidiaries of the Borrower and the Parent as
guarantors and the Lenders named therein (the "Bridge Credit Agreement" and
along with the Loan Documents (as defined in the Bridge Credit Agreement) the
"Bridge Financing Documents"), and (iv) the post-merger financing commitment
letter dated as February 19, 2002 by Foothill Capital Corporation and Cerberus
Capital Partners, L.P. (the "Commitment Letter"), in each case in substantially
the form attached hereto as Exhibits I through IV, as applicable.
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WHEREAS, the Borrower has requested that the Lenders agree to (i) an
extension of the July 15, 2001, October 15, 2001 and January 11, 2002 principal
payments to August 31, 2002, (ii) waive the Payment Defaults, Covenant
Violations and the Representations and Warranties Defaults which have occurred
prior to the date hereof, (iii) amend the mandatory prepayment requirements
under the Credit Agreement to temporarily suspend such prepayments during the
term of the financing under the Bridge Credit Agreement, and (iv) consent to
the transactions contemplated by the Merger Agreement, Exchange Agreement,
Bridge Financing Documents and Commitment Letter and, subject to the terms and
conditions of this Amendment, the Lenders have agreed to such extension, waivers
and consents; and
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
AGREEMENT
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1. Amendments. Effective as of the date hereof, upon satisfaction of each of
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the conditions set forth in Paragraph 4 hereof, the Credit Agreement is hereby
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amended as follows (section and exhibit references used below refer to sections
of and exhibits to the Credit Agreement):
(a) The definition of Revolving Loan Maturity Date in Section 1.1 is
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deleted in its entirety and replaced with the following:
""Revolving Loan Maturity Date" means, as to the Revolving Loans,
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Letters of Credit (and the related LOC Obligations) and Tranche A Term
Loans, August 31, 2002."
(b) The definition of Tranche B Term Loan Maturity Date in Section 1.1
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is deleted in its entirety and replaced with the following:
""Tranche B Term Loan Maturity Date" means August 31, 2002."
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(c) Amortization of Revolving Loans. Section 2.1(f) is deleted in its
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entirety and replaced with the following provision:
"(f) All Loans shall be repaid, and the Borrower shall deliver cash
collateral to the Agent for the outstanding LOC Obligations, on the
Revolving Loan Maturity Date."
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(d) Interest Payments. The first sentence of Section 3.1(c) is
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deleted in its entirety and replaced with the following sentence:
Interest on Loans shall be due and payable in arrears on each Interest
Payment Date; provided, however, that (i) all interest otherwise due and
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payable on each Interest Payment Date occurring after June 30, 2000 and
before the Revolving Loan Maturity Date shall continue to accrue on the
applicable Loans from and after such Interest Payment Date and shall become
due and payable in arrears on the Revolving Loan Maturity Date subject to
the other provisions of this Agreement regarding payments stated as to be
made on days which are not Business Days and (ii) notwithstanding the
provisions of the immediately foregoing clause (i) of this subsection, in
no event is any interest being forgiven with respect to any period of
accrual hereunder.
(e) Section 3.3(b) is amended to add the following new provision to
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such section immediately following existing clause (vi) thereof:
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"Notwithstanding anything to the contrary contained in this Section
3.3(b), for so long as any obligations are outstanding or commitments in
effect under the Credit Agreement dated as of February 19, 2002 among the
Borrower and PhoneTel Technologies, Inc., as borrowers, the Parent and the
domestic subsidiaries of the Borrower and the Parent as guarantors and the
lenders named therein (the "Bridge Credit Agreement") and the other Loan
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Documents (as defined in the Bridge Credit Agreement), no prepayments of
the Loans shall be required under this section."
(f) Minimum Cumulative EBITDA. Section 7.2 is deleted in its
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entirety and replaced with the following provisions:
7.2 Minimum Cumulative EBITDA. The Credit Parties and their
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Subsidiaries shall have EBITDA for each period set forth below in an
amount not less than the applicable minimum amount set forth below:
Period Commencing
January 1, 2002 and
Ending on the Last Day Minimum
of the Following Month Cumulative EBITDA
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January, 2002 $ (600,000)
February, 2002 $ (700,000)
March, 2002 $ 200,000
April, 2002 $ 600,000
May, 2002 $1,000,000
June, 2002 $1,400,000
July, 2002 $2,300,000
August, 2002 $3,300,000
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2. Waiver. Upon satisfaction of the conditions set forth in Paragraph 4
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hereof, (a) the Lenders hereby waive the Payment Defaults, effective as of the
respective dates such payments were due, (b) the Lenders hereby waive each of
the Covenant Violations, effective as of the respective dates, of such
violations and (c) the Lenders hereby waive the Representations and Warranties
Defaults that have occurred prior to the date hereof, effective as of the date
hereof.
3. Consents. Upon satisfaction of the conditions set forth in Paragraph 4
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hereof, (a) the Lenders hereby consent to the transactions contemplated by and
the execution by the Credit Parties of, in the forms attached hereto, (a) the
Merger Agreement, (b) the Exchange Agreement, (c) the Bridge Financing
Documents, and (d) subject to definitive documentation approved by the Required
Lenders and the Administrative Agent, the loan transactions contemplated by the
Commitment Letter.
4. Conditions Precedent. The effectiveness of the provisions of Paragraphs 1,
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2 and 3 of this Amendment is subject to the receipt by the Administrative Agent
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of (a) counterparts to this Amendment duly executed by each of the Credit
Parties and each of the Lenders, (b) fully executed copies of each of the Merger
Agreement, the Exchange Agreement, the Bridge Financing Documents and the
Commitment Letter, and (c) evidence acceptable to the Administrative Agent that
the financial institutions party to, as lenders, the Loan and Security Agreement
dated as of November 17, 1999, as amended, for PhoneTel and Cherokee, have
executed an amendment, waiver or forbearance with respect to all matured and
unmatured defaults which are continuing on the date hereof or are reasonably
expected to occur prior to the Revolving Loan Maturity Date (as to be amended
hereby).
5. Ratification of Credit Agreement. The Credit Agreement, as heretofore
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amended, is hereby ratified and confirmed and shall remain in full force and
effect according to its terms, including, without limitation, the liens granted
pursuant to the Collateral Documents. Except as expressly described herein,
nothing contained in this Amendment shall constitute a waiver of any Default or
Event of Default which may have occurred, whether or not known to the
Administrative Agent or any Lender, or any right or remedy of the Administrative
Agent or any Lender with respect to any such Default or Event of Default, all of
which rights and remedies are hereby reserved by the Administrative Agent and
the Lenders. It is expressly understood and agreed by the Borrower that nothing
contained within this Amendment is intended to or should be construed in any
manner as constituting a forgiveness of debt or of any of the obligations under
the Credit Agreement and that the provisions of Section 1(a) hereof effect
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merely an extension of the due date of certain payments to the Revolving Loan
Maturity Date (as to be amended hereby).
6. Authority/Enforceability. Each of the Credit Parties, the Administrative
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Agent and the Lenders represents and warrants as follows:
(a) It has taken all necessary action to authorize the execution,
delivery and performance of this Amendment.
(b) This Amendment has been duly executed and delivered by such Person
and constitutes such Person's legal, valid and binding obligations,
enforceable in
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accordance with its terms, except as such enforceability may
be subject to (i) bankruptcy, insolvency, reorganization, fraudulent
conveyance or transfer, moratorium or similar laws affecting creditors'
rights generally and (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding at law or in
equity).
(c) No consent, approval, authorization or order of, or filing,
registration or qualification with, any court or governmental authority or
third party is required in connection with the execution, delivery or
performance by such Person of this Amendment (other than that which may
have been previously obtained).
7. No Default. The Credit Parties represent and warrant to the Lenders that,
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after giving effect to the waivers contemplated in Paragraph 2 of this
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Amendment, (a) the representations and warranties of the Credit Parties set
forth in Section 4 of the Credit Agreement are true and correct in all material
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respects as of the date hereof and (b) no event has occurred and is continuing
which constitutes a Default or an Event of Default.
8. Release. Each Credit Party hereby unconditionally and irrevocably
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remises, acquits, and fully and forever releases and discharges each Lender, the
Administrative Agent and the Issuing Lender, and all affiliates, subsidiaries,
officers, employees, agents, attorneys, principals, directors and shareholders
of such Persons, and their respective heirs, legal representatives, successors
and assigns (collectively, the "Releases") from any and all claims, demands,
causes of action, obligations, remedies, suits, damages and liabilities of any
nature whatsoever, whether now known, suspected or claimed, whether arising
under common law, in equity or under statute, which such Credit Party ever had
or now has against any of the Releases and which may have arisen at any time on
or prior to the effective date hereof and which were in any manner related to
this Amendment or any Credit Document or the enforcement or attempted or
threatened enforcement by any of the Releases of any of their respective rights,
remedies or recourse related thereto (such claims being hereinafter referred to
collectively as the "Released Claims"). Each Credit Party covenants and agrees
never to commence, voluntarily aid in any way, prosecute or cause to be
commenced or prosecuted against any of the Releases any action or other
proceeding based upon any of the Released Claims.
9. Counterparts/Telecopy. This Amendment may be executed in any number of
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counterparts, each of which when so executed and delivered shall be an original,
but all of which shall constitute one and the same instrument. Delivery of
executed counterparts of this Amendment by telecopy shall be effective as an
original and shall constitute a representation that an original shall be
delivered.
10. GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
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PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
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IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Amendment to be duly executed and delivered and this
Amendment shall be effective as of the date first above written.
BORROWER: DAVEL FINANCING COMPANY, L.L.C.,
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a Delaware limited liability company
By: DAVEL COMMUNICATIONS, INC.,
its sole managing member
By: /s/ Bruce W. Renard
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Name: Bruce W. Renard
Title: President
PARENT GUARANTOR: DAVEL COMMUNICATIONS, INC.,
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a Delaware corporation
By: /s/ Bruce W. Renard
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Name: Bruce W. Renard
Title: President
SUBSIDIARY GUARANTORS: DAVEL COMMUNICATIONS GROUP, INC.,
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an Illinois corporation
PEOPLES TELEPHONE COMPANY, INC.,
a New York corporation
PEOPLES TELEPHONE COMPANY, INC.,
a New Hampshire corporation
PEOPLES COLLECTORS, INC.,
a Delaware corporation
PTC CELLULAR, INC.,
a Delaware corporation
PTC SECURITY SYSTEMS, INC.,
a Florida corporation
SILVERADO COMMUNICATIONS CORP.,
a Colorado corporation
PEOPLES ACQUISITION CORP.,
a Pennsylvania corporation
TELALEASING ENTERPRISES, INC.,
an Illinois corporation
ADTEC COMMUNICATIONS, INC.,
a Florida corporation
INTERSTATE COMMUNICATIONS, INC.,
a Georgia corporation
T.R.C.A., INC.,
an Illinois corporation
DAVELTEL, INC.,
an Illinois corporation
DAVEL MEXICO, LTD.,
an Illinois corporation
COMMUNICATIONS CENTRAL INC.,
a Georgia corporation
CENTRAL PAYPHONE SERVICES, INC.,
a Georgia corporation
COMMUNICATIONS CENTRAL
OF GEORGIA, INC.,
a Georgia corporation
INVISION TELECOM, INC.,
a Georgia corporation
By: /s/ Bruce W. Renard
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Name: Bruce W. Renard
Title: President
ADMINISTRATIVE AGENT: PNC BANK, NATIONAL ASSOCIATION, in its
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capacities as a Lender and
Administrative Agent and Collateral
Agent
By: /s/ Michael A. Valerio, Jr.
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Name: Michael A. Valerio, Jr.
Title: Vice President
LENDERS: U.S. BANK NATIONAL ASSOCIATION
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By: /s/ David C. Larsen
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Name: David C. Larsen
Title: Vice President
ARK CLO 2000 I, Limited
By: /s/ Lynn Tilton
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Name: Lynn Tilton
Title: Authorized Signatory
HELLER FINANCIAL, INC.
By: /s/ Craig Thistlethwaite
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Name: Craig Thistlethwaite
Title: Assistant Vice President
BNP PARIBAS
By: /s/ Edward V. Canale
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Name: Edward V. Canale
Title: Managing Director
By: /s/ Kathryn B. Quinn
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Name: Kathryn B. Quinn
Title: Vice President
MORGAN STANLEY DEAN WITTER
PRIME INCOME TRUST
By: /s/ Sheila Finnerty
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Name: Sheila Finnerty
Title: Executive Director
CERBERUS PARTNERS, L.P.
By: Cerberus Associates, L.L.C., as General
Partner
By: /s/ Stephen Feinberg
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Name: Stephen Feinberg
Title: Managing Member
AMROC INVESTMENTS, LLC
By: /s/ Marc Lasry
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Name: Marc Lasry
Title: Senior Managing Director