EXHIBIT 10.1
VIA FACSIMILE AND U.S. MAIL
February 19, 2002
Board of Directors
PHONETEL TECHNOLOGIES, INC.
North Point Tower, 7th Floor
1001 Lakeside Avenue
Cleveland, Ohio 44114-1195
Board of Directors
DAVEL COMMUNICATIONS, INC.
10120 Windhorst Road
Tampa, Florida 33619
Re: PROPOSED COMBINATION OF PHONETEL AND DAVEL -DEBT RESTRUCTURE COMMITMENT
Ladies and Gentlemen:
This commitment letter is directed to the board of directors of
PhoneTel Technologies, Inc. ("PhoneTel") and the board of directors of Davel
Communications, Inc. ("Davel") (the "Boards") with respect to the proposed
strategic combination (the "Davel/PhoneTel Combination") of PhoneTel and Davel,
which strategic combination includes (i) the merger of PT Merger Corp., a wholly
owned subsidiary of Davel with and into PhoneTel (the "PhoneTel Merger"), with
PhoneTel surviving as a wholly owned subsidiary of Davel, and (ii) the
restructuring of the existing secured indebtedness of Davel and PhoneTel to be
accomplished in connection with the Davel/PhoneTel Combination, which
restructuring includes the consummation of a merger (the "Davel Merger" and,
together with the PhoneTel Merger, the "Mergers"), immediately prior to the
PhoneTel Merger, of DF Merger Corp., a Delaware corporation and a wholly owned
subsidiary of Davel Financing ("D Sub"), with and into Davel Financing L.L.C., a
Delaware limited liability company and a wholly owned subsidiary of Davel
("Davel Financing", and together with D Sub, the "Davel Subsidiaries"), with
Davel Financing surviving as a wholly owned subsidiary of Davel. In the Davel
Merger, shares of Davel common stock will be issued to the shareholders of D
Sub. The Mergers will be governed by a single merger agreement to be dated as of
the date hereof (the "Merger Agreement"), which shall be in form and substance
reasonably satisfactory to the PhoneTel Lenders (as defined below) and to the
Davel Lenders (as defined below).
Foothill Capital Corporation is the Agent to the financial institutions
(collectively, the "PhoneTel Lenders") that are signatories to that certain Loan
and Security Agreement dated as of
Board of Directors of PhoneTel and Davel
February 19, 2002
Page 2
November 17, 1999, between the PhoneTel Lenders and PhoneTel (together with the
security agreements and other documents executed and delivered in connection
therewith by PhoneTel and its subsidiaries in favor of the PhoneTel Lenders, the
"PhoneTel Loan Documents"). PNC Bank N.A. is the Agent to the financial
institutions (collectively the "Davel Lenders" and collectively with the
PhoneTel Lenders, the "Lenders") that are signatories to that certain Credit
Agreement dated as of December 23, 1998, between the Davel Lenders and Davel and
various subsidiaries of Davel (together with the security agreements and other
documents and amendments executed and delivered in connection therewith by Davel
and its subsidiaries in favor of the Davel Lenders, the "Davel Loan Documents").
Both Davel and PhoneTel have obtained further financing from Madeleine
L.L.C. and ARK CLO 2000-1, Limited (the "Senior Lenders") secured by liens and
security interests senior in priority to those of Lenders (the "Senior
Facility").
In accordance with our recent discussions, Lenders are pleased to issue
this financial restructuring commitment to the Boards. Subject to the
satisfactory completion of each of the conditions contained herein, each of the
undersigned Lenders agrees to the following financial restructuring:
I. PHONETEL DEBT FOR EQUITY EXCHANGE
On the Closing Date (as defined in the Merger Agreement), immediately
prior to the PhoneTel Effective Time and the Davel Effective Time (as
such terms are defined in the Merger Agreement), and subject to the
completion of the Mergers, the obligations of PhoneTel to the PhoneTel
Lenders would be reduced to a principal amount of $36,500,000 in
exchange for the PhoneTel Lenders receiving 112,246,511 shares of
common stock of PhoneTel (equal to 87% of all PhoneTel common stock on
a pre-Mergers fully diluted basis, assuming the deemed reservation of
4% of PhoneTel common stock to be issued in respect of stock options
and warrants of PhoneTel from and after the date of the exchange).
II. DAVEL DEBT FOR EQUITY EXCHANGE
On the Closing Date, immediately prior to the PhoneTel Effective Time
and the Davel Effective Time, and subject to the completion of the
Mergers, pursuant to an agreement among the Davel Lenders, the PhoneTel
Lenders, Davel, Davel Financing, D Sub, PhoneTel and Cherokee (as
defined below) dated as of the date hereof (the "Exchange Agreement"),
the obligations of Davel Financing to the Davel Lenders, which are
fully guaranteed by, among others, Davel, would be reduced to a
principal amount of $63,500,000 in exchange for the Davel Lenders
receiving from Davel Financing 100% of the outstanding shares of common
stock of D Sub. The sole asset of D Sub would be a note issued by Davel
Financing in an aggregate principal amount equal to $342,551.46.
Board of Directors of PhoneTel and Davel
February 19, 2002
Page 3
III. THE MERGERS AND THE EQUITY CONVERSIONS
At the PhoneTel Effective Time, all of the PhoneTel common stock of the
PhoneTel Lenders will, pursuant to the PhoneTel Merger, be
automatically converted into 31.76% (after giving effect to the Davel
Equity Conversion defined below) of all common stock plus stock options
and warrants of Davel issued and outstanding at such time (the
"PhoneTel Equity Conversion").
At the Davel Effective Time, all of the D Sub common stock of the Davel
Lenders will, pursuant to the Davel Merger, be automatically converted
into 59.06% (after giving effect to the PhoneTel Equity Conversion) of
all shares of common stock plus stock options and warrants of Davel
issued and outstanding at such time (the "Davel Equity Conversion").
IV. CROSS-ASSIGNMENT OF DEBT AMONG LENDERS
On the Closing Date, the PhoneTel Lenders would assign 63.5% of the
$36,500,000 of the reduced PhoneTel debt to the Davel Lenders on a pro
rata basis according to the interest each Davel Lender has in the Davel
debt owing to the Davel Lenders. On the Closing Date, the Davel Lenders
would assign 36.5% of the $63,500,000 of the reduced Davel debt to the
PhoneTel Lenders on a pro rata basis according to the interest each
PhoneTel Lender has in the PhoneTel debt owing to the PhoneTel Lenders.
V. CROSS-ASSUMPTION OF DEBT AMONG BORROWERS
On the Closing Date, PhoneTel would assume the obligations owing by
Davel and its subsidiaries to the Lenders and would confirm that the
liens and security interests in the assets of PhoneTel secure the
obligations owing by Davel and its subsidiaries to the Lenders. On the
Closing Date, Davel would assume the obligations owing by PhoneTel to
the Lenders and would confirm that the liens and security interests in
the assets of Davel and its subsidiaries secure the obligations owing
by PhoneTel to the Lenders.
Board of Directors of PhoneTel and Davel
February 19, 2002
Page 4
VI. RESTRUCTURE OF $100 MILLION CREDIT FACILITY
On the Closing Date, PhoneTel, PhoneTel's subsidiary Cherokee
Communications, Inc. ("Cherokee"), Davel and the Davel Subsidiaries
(hereinafter collectively referred to as the "Borrowers") and the
Lenders would enter into definitive documentation for the restructured
credit facility described below which would amend and restate the
PhoneTel Loan Documents and Davel Loan Documents and consolidate such
agreements into a unitary set of loan and security agreements, which,
among other things, would confirm that each Borrower would thereafter
be jointly and severally liable to Lenders for the indebtedness
outstanding thereunder, which definitive documentation would provide
for the following terms and conditions, among others:
A. APPOINTMENT OF FOOTHILL AS AGENT. Foothill Capital Corporation would
be appointed by Borrowers and Lenders as the agent ("Agent") for the
Lenders pursuant to agency provisions contained in Foothill's standard
loan documentation and acceptable to Foothill and the Lenders.
B. TERM LOANS. On the Closing Date, both of the existing credit
facilities would be amended and restated as two term loans (the "Term
Loans"): (i) a $50 million principal amount cash-pay term loan ("Term
Loan A") with interest to be payable in kind monthly through May 31,
2003, and thereafter to be paid monthly in cash from a required payment
of $1,250,000 commencing on July 1, 2003, with such payment increasing
to $1,500,000 with the payment due and owing on January 1, 2005, which
amount will be applied first to interest and fees owing, with the
balance applied to principal, with such payments continuing until and
including the Maturity Date (as defined below) on which date the unpaid
balance of Term Loan A and any accrued and unpaid interest would be due
and payable in full; and (ii) a $50 million principal amount
payment-in-kind term loan (the "PIK Term Loan") to be repaid in full on
the Maturity Date, subject to earlier repayment as set forth below from
Excess Cash Flow of Borrowers.
C. INTEREST RATES. Amounts outstanding under the Term Loans would
accrue interest from and after the Closing Date at the rate of ten
(10%) percent per annum, calculated based upon a year of 360 days for
actual days elapsed. Interest on the PIK Term Loan would accrue from
the Closing Date and would be payable in kind. All interest payable in
kind would be added to the principal amount of the respective Term Loan
on a monthly basis and thereafter treated as principal for all purposes
(including the accrual of interest upon such amounts). Upon the
occurrence and during the continuation of an Event of Default, all
interest would be increased by 4 percentage points above the per annum
rate otherwise applicable thereto. All collections received by Borrower
would be subject to a two (2) business day clearance charge for the
sole and separate account of Agent.
Board of Directors of PhoneTel and Davel
February 19, 2002
Page 5
D. LOCKBOX COLLECTIONS. After the occurrence of an Event of Default,
and after payment of the Senior Facility in full, Lenders would have
the non-exclusive right and remedy to require that Borrowers each
establish one or more deposit accounts at financial institutions
acceptable to Lenders and require Borrowers to direct all collections
or other proceeds of collateral to the depository accounts, to be
applied to reduce the balance of the Term Loans. The terms and
conditions of the agreements relative to such depository accounts would
be acceptable to Lenders and would provide Agent with dominion and
control over any funds deposited into such deposit accounts.
E. CLOSING FEE. Borrowers would agree to pay to Agent additional
interest on the Closing Date, for the ratable benefit of the Lenders,
in the form of a fee (the "Closing Fee") in the amount of $1,000,000,
which would be fully earned and non-refundable on the Closing Date. In
lieu of payment in cash, this additional interest shall be paid in the
form of payment-in-kind interest that would be added to the principal
amount of the PIK Term Loan on the Closing Date and thereafter treated
as principal for all purposes (including the accrual of interest upon
such amount).
F. SERVICING FEE. Borrowers would agree to pay to Agent a fee (the
"Servicing Fee") for the sole and separate account of Agent of $30,000
per month for each month or portion thereof in which any amounts are
outstanding on either of the Term Loans (including after the Maturity
Date). The Servicing Fee would be due and payable monthly in advance.
G. AGENT AND LENDER EXPENSES. Borrowers would agree to reimburse Agent
for all of Agent's reasonable out-of-pocket costs and expenses relating
to the establishment, negotiation, documentation and administration of
this financing transaction, including, but not limited to, search fees,
filing and recording fees, attorneys fees and expenses, other
professional expenses, and financial examination and collateral
appraisal fees and expenses (collectively, "Agent Expenses"). In
addition, after the occurrence and during the continuation of an Event
of Default, Borrowers would agree to reimburse the each Lender for its
reasonable out-of-pocket costs and expenses incurred in connection with
such default, including, but not limited to, attorneys fees and
expenses and other professional expenses. Without limiting the
foregoing, Borrowers would be required to pay (a) a fee of $750 per
day, per auditor, plus out-of-pocket expenses for each financial audit
of Borrowers performed by personnel employed by Agent, (b) if
implemented, a one time charge of $3,000 plus out-of-pocket expenses
for expenses for the establishment of electronic collateral reporting
systems, (c) a fee of $1,500 per day per appraiser, plus out-of-pocket
expenses, for each appraisal of Borrowers' collateral performed by
personnel employed by Agent, and (d) the actual charges paid or
incurred by Agent if Agent elects to employ the services of one or more
third parties to perform financial audits of Borrowers, to appraise
Borrowers' collateral, or to assess Borrowers' business valuation.
Board of Directors of PhoneTel and Davel
February 19, 2002
Page 6
H. CLOSING DATE. The "Closing Date" would be a date on or before August
31, 2002, when all of the conditions precedent set forth herein and
contained in the definitive documentation for the restructured credit
facility have been satisfied or waived by the Lenders. If the financial
restructuring contemplated by this letter is not consummated on or
before August 31, 2002, then, without any requirement of notice or
other formality, no party hereto would have any obligation to pursue
the financial restructuring outlined in this letter; provided, however,
that prior thereto Borrowers agree to use their respective reasonable
best efforts to cause the financial restructuring to be consummated on
or before such date.
I. MATURITY DATE. The "Maturity Date" would be December 31, 2005.
Borrowers would have the right to prepay the Term Loans, in whole or in
part, at any time, without penalty or premium.
J. COLLATERAL. All obligations owed to Lenders would be secured by the
existing liens and security interests and would also be secured by a
first priority perfected security interest (subject to the terms of
that certain Intercreditor Agreement between Lenders and Senior
Lenders, which provides, among other things, that the Senior Lenders
will have liens and security interests senior in priority to those of
Lenders) in all of Borrowers' and their subsidiaries' now owned or
hereafter acquired property and assets, including, but not limited to,
Borrower's inventory, accounts, equipment, real estate, chattel paper,
documents, instruments, copyrights, trademarks, and patents and related
rights, general intangibles, deposit accounts, cash and cash
equivalents, and investment property (including interests in
subsidiaries), together with all books and records relating to the
foregoing, and all proceeds and products thereof (collectively, the
"Collateral"). In addition, to the extent necessary to obtain first
priority perfected security interests in the Collateral, Lenders shall
receive such third party agreements or consents as Lenders may
reasonably require.
K. COVENANTS. Borrowers would agree that any change of the composition
of its senior management team would require the written consent of
Lenders. The definitive loan documentation would include other usual
affirmative and negative covenants required by Lenders in similar
credits, and in addition would contain the following financial
covenants (all of which financial covenants would be calculated without
reference to any payment-in-kind interest):
Board of Directors of PhoneTel and Davel
February 19, 2002
Page 7
1. Minimum EBITDA. Borrowers will not permit their cumulative
consolidated EBITDA for the periods set forth below, measured at the end of each
Fiscal Quarter, to be less than the amounts set forth opposite such period:
<Table>
<Caption>
========================================================= =======================================
PERIOD CUMULATIVE EBITDA
- --------------------------------------------------------- ---------------------------------------
July 1, 2002 - September 30, 2002 $ 5.8 million
- --------------------------------------------------------- ---------------------------------------
July 1, 2002 - December 31, 2002 $13.3 million
- --------------------------------------------------------- ---------------------------------------
July 1, 2002 - March 31, 2003 $16.7 million
- --------------------------------------------------------- ---------------------------------------
Four quarter period ending June 30, 2003 $21.6 million
- --------------------------------------------------------- ---------------------------------------
Four quarter period ending September 30, 2003 $21.3 million
- --------------------------------------------------------- ---------------------------------------
Four quarter period ending December 31, 2003 $18.6 million
- --------------------------------------------------------- ---------------------------------------
Four quarter period ending March 31, 2004 $17.9 million
- --------------------------------------------------------- ---------------------------------------
Four quarter period ending June 30, 2004 $17.1 million
- --------------------------------------------------------- ---------------------------------------
Four quarter period ending September 30, 2004 $16.3 million
- --------------------------------------------------------- ---------------------------------------
Four quarter period ending December 31, 2004 $15.5 million
- --------------------------------------------------------- ---------------------------------------
Four quarter period ending March 31, 2005 $15.9 million
- --------------------------------------------------------- ---------------------------------------
Four quarter period ending June 30, 2005 $16.2 million
- --------------------------------------------------------- ---------------------------------------
Four quarter period ending September 30, 2005 $16.4 million
- --------------------------------------------------------- ---------------------------------------
Four quarter period ending December 31, 2005 $16.6 million
========================================================= =======================================
</Table>
Board of Directors of PhoneTel and Davel
February 19, 2002
Page 8
2. Minimum Adjusted EBITDA. Borrowers will not permit their
cumulative consolidated EBITDA for the periods set forth below, measured at the
end of each Fiscal Quarter, adjusted to eliminate Regulatory Receipts (as
defined in the loan documents for the Senior Facility), to be less than the
amounts set forth opposite such period:
<Table>
<Caption>
- --------------------------------------------------------- ---------------------------------------
PERIOD CUMULATIVE EBITDA
- --------------------------------------------------------- ---------------------------------------
July 1, 2002 - September 30, 2002 $ 3.6 million
- --------------------------------------------------------- ---------------------------------------
July 1, 2002 - December 31, 2002 $ 6.6 million
- --------------------------------------------------------- ---------------------------------------
July 1, 2002 - March 31, 2003 $ 8.7 million
- --------------------------------------------------------- ---------------------------------------
Four quarter period ending June 30, 2003 $12.3 million
- --------------------------------------------------------- ---------------------------------------
Four quarter period ending September 30, 2003 $12.8 million
- --------------------------------------------------------- ---------------------------------------
Four quarter period ending December 31, 2003 $13.3 million
- --------------------------------------------------------- ---------------------------------------
</Table>
3. Limitation Upon Capital Expenditures. Borrowers will not
permit their commitments for capital expenditures or the amounts paid and
incurred for capital expenditures to exceed $3,000,000 for any fiscal year.
4. Mandatory Prepayment. After payment in full of the Senior
Facility, Borrowers will prepay amounts owing on the PIK Term Loan from (a) the
net proceeds of any asset disposition and (b) the proceeds of any Regulatory
Receipts (as defined in the loan documents for the Senior Facility) received by
Borrowers that exceeds 120% of the amount set forth for such category in the
Budget (as defined in the loan documents for the Senior Facility).
5. Excess Cash Flow Sweep. After payment in full of the Senior
Facility, Borrowers will prepay amounts owing on the PIK Term Loan from fifty
percent (50%) of quarterly Excess Cash Flow (as defined in the loan documents
for the Senior Facility).
L. CONDITIONS PRECEDENT. The following would be conditions precedent,
among other usual conditions, to the obligation of Lenders to enter
into the restructured credit facility:
1. Receipt by Agent of evidence that each Borrower is a
corporation, or with respect to Davel Financing L.L.C., a limited liability
company, in good standing in the jurisdiction of its incorporation and qualified
to do business in any other jurisdiction where such qualification is necessary
or appropriate to its business;
Board of Directors of PhoneTel and Davel
February 19, 2002
Page 9
2. The Term Loans would need to be made pursuant to, and
subject to, the terms of restated and amended definitive loan agreements, and
other financing documents in form, scope and substance reasonably satisfactory
to each Lender (the "Loan Documents") executed and delivered by Borrowers on or
prior to the Closing Date. The Loan Documents would contain various
representations, warranties, and covenants (affirmative, reporting and negative)
events of default and other provisions as are customary, in Lenders' experience,
for a transaction of this type. The Loan Documents would include such guaranties
and pledges of collateral from any surviving or newly created affiliates of
Borrowers as Lenders deem necessary;
3. In addition to the Loan Documents, Borrowers shall have
executed and delivered, or caused to be executed and delivered, to Agent prior
to the Closing Date, restated and amended definitive security agreements,
financing statements, fixture filings, deeds of trust, mortgages, and chattel
mortgages, title insurance policies and endorsements, lock box and depositary
account agreements, copies of leases, landlord waivers, bailee agreements, and
other agreements affecting the Collateral, insurance certificates and
endorsements, and other documentation relative to the liens and security
interest in the Collateral as Lenders reasonably may request and in form, scope
and substance acceptable to each Lender (the "Security Documents"). Each of the
Loan Documents and the Security Documents (the "Documents") would be governed by
the law of the State of New York and would be in form and substance reasonably
satisfactory to Agent and its counsel;
4. Since the date hereof, no material adverse change shall
have occurred in any of Borrowers' financial condition, operations, business,
assets, or in the value of any Borrower's Collateral;
5. Receipt by Agent of such opinions of Borrowers' counsel and
such advice of Agent's local counsel as Agent reasonably requires, which
opinions and/or advice would be satisfactory to Agent and its counsel as to both
form and substance;
6. Payment of all accrued and unpaid Agent's Expenses;
7. Receipt by Agent of such documentation as is necessary and
appropriate, in the opinion of Agent's counsel, to continue the deep
subordination of the liens and security interests of Cerberus Partners L.P. in
the assets of PhoneTel;
8. Receipt by Lenders on or before February 19, 2002, of
evidence satisfactory to Lenders that the Merger Agreement has been executed by
the parties thereto;
9. Receipt by Lenders on or before February 19, 2002, of
evidence satisfactory to Lenders that the Senior Facility has closed and that
Senior Lenders have made commitments to lend no less than $10 million under the
Senior Facility;
Board of Directors of PhoneTel and Davel
February 19, 2002
Page 10
10. Receipt by Lenders on or before February 19, 2002, of
evidence satisfactory to Lenders that the Exchange Agreement has been executed
by the parties thereto; and
11. Receipt by Agent of such documentation as is necessary and
appropriate, in the opinion of Agent's counsel, to confirm the consummation and
effectiveness of the Mergers and the other restructuring transactions described
in sections I through V above.
M. BROKERS' FEES. Any brokerage commission or finder's fees payable in
connection with the financing arrangement outlined herein will be
payable by Borrowers and not by Lenders. Other than reasonable fees
owed to Ladenburg Thalman & Co., the Borrowers represent and warrant to
Lenders that they has not incurred any obligation for a brokerage
commission or a finder's fee in connection with any of Borrowers'
transactions with any of Lenders. Borrowers agrees to indemnify,
defend, and hold Lenders harmless from and against any claim of any
broker or finder arising out of the financing arrangement outlined
herein.
N. COMPLETE AGREEMENT; NO ORAL MODIFICATIONS. This commitment letter
embodies the entire agreement between the parties hereto with respect
to the subject matter hereof and supersedes all prior proposals,
negotiations, or agreements whether written or oral, relating to the
subject matter hereof including any letter of intent. This letter may
not be modified, amended, supplemented, or otherwise changed, except by
a document in writing signed by the parties hereto.
O. GOVERNING LAW; JURY WAIVER. THIS LETTER SHALL BE DEEMED TO HAVE BEEN
MADE IN THE STATE OF NEW YORK AND THE VALIDITY OF THIS LETTER, AND THE
CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF, AND THE RIGHTS OF
THE PARTIES HERETO RELATING TO CLAIMS OR CAUSES OF ACTION ARISING IN
CONNECTION HEREWITH SHALL BE DETERMINED UNDER, GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
BORROWERS AND LENDERS HEREBY EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY JURY
OF ANY CLAIM, DEMAND, ACTION, CAUSE OF ACTION, OR PROCEEDING ARISING
UNDER OR RESPECT TO THIS LETTER, OR IN ANY WAY RELATED OR INCIDENTAL TO
THE DEALINGS OF THE PARTIES HERETO WITH RESPECT TO THIS LETTER, OR THE
TRANSACTIONS CONTEMPLATED HEREBY, IN EACH CASE WHETHER OR NOW OR
HEREAFTER ARISING, IRRESPECTIVE OF WHETHER SOUNDING IN CONTRACT, TORT,
OR OTHERWISE. BORROWERS AND LENDERS HEREBY AGREE THAT ANY SUCH CLAIM,
DEMAND, ACTION, CAUSE OF ACTION, OR PROCEEDING SHALL BE DECIDED BY A
COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS
Board of Directors of PhoneTel and Davel
February 19, 2002
Page 11
SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE OTHER
PARTY HERETO TO WAIVE ITS RIGHT TO TRIAL BY JURY.
If you wish to proceed on the basis outlined above, please execute this
letter in the space provided below and return it to the undersigned no later
than 5:00 p.m., California time, on or before February 19, 2002. If you fail to
do so by such date and time, this letter shall expire automatically. This letter
may be provided to the Boards and Borrowers prior to the execution of this
letter by all of the Lenders, however, this letter shall be of no force or
effect unless and until it is executed by each and every Lender. This letter is
being provided to the Boards and Borrowers on a confidential basis and is not
for the benefit of, nor should it be relied upon by, any third party.
Sincerely,
FOOTHILL CAPITAL CORPORATION FOOTHILL PARTNERS III, L.P.
By: /s/ Amy Lam By: /s/ Dennis R. Ascher
---------------------------------- ------------------------------
Name: Amy Lam Name: Dennis R. Ascher
Title: Vice President Title: Managing Member
ABLECO FINANCE LLC, as Lender and
agent for its affiliate assigns
By: /s/ Kevin Genda
Name: Kevin Genda
Title: Senior Vice President and
Chief Credit Officer
Board of Directors of PhoneTel and Davel
February 19, 2002
Page 12
PNC BANK, NATIONAL ASSOCIATION ARK CLO 2000 I, LIMITED
By: /s/ Michael A. Valerio, Jr. By: Patriarch Partners, LLC,
------------------------------ its Collateral Manager
Name: Michael A. Valerio, Jr. By: /s/ Lynn Tilton
Title: Vice President ---------------------------
Name: Lynn Tilton
Title: Authorized Signatory
U.S. BANK NATIONAL ASSOCIATION BNP PARIBAS
By: /s/ David C. Larsen By: /s/ Edward V. Canale
------------------------------ ------------------------------
Name: David C. Larsen Name: Edward V. Canale
Title: Vice President Title: Managing Director
By: /s/ Kathryn B. Quinn
------------------------------
Name: Kathryn B. Quinn
Title: Vice President
HELLER FINANCIAL, INC. MORGAN STANLEY DEAN WITTER
PRIME INCOME TRUST
By: /s/ Craig Thistlethwaite By: /s/ Sheila Finnerty
------------------------------ ------------------------------
Name: Craig Thistlethwaite Name: Sheila Finnerty
Title: Assistant Vice President Title: Executive Director
CERBERUS PARTNERS, L.P. AMROC INVESTMENTS, LLC
By : Cerberus Associates, L.L.C., By: /s/ Marc Lasry
as General Partner ------------------------------
Name: Marc Lasry
By: /s/ Stephen Feinberg Title: Senior Managing Director
---------------------
Name: Stephen Feinberg
Title: Managing Member
Board of Directors of PhoneTel and Davel
February 19, 2002
Page 13
THE FOREGOING TERMS AND CONDITIONS ARE HEREBY ACCEPTED AND AGREED TO AS OF
FEBRUARY 19, 2002.
<Table>
PHONETEL TECHNOLOGIES, INC. DAVEL COMMUNICATIONS, INC.
By: /s/ John D. Chichester By: /s/ Bruce W. Renard
---------------------------------------- ----------------------------------------
Name: John D. Chichester Name: Bruce W. Renard
Title: President and Chief Executive Officer Title: President
DAVEL FINANCING COMPANY, L.L.C. CHEROKEE COMMUNICATIONS, INC.
By: /s/ Bruce W. Renard By: /s/ John D. Chichester
---------------------------------------- ----------------------------------------
Name: Bruce W. Renard Name: John D. Chichester
Title: President Title: President and Chief Executive Officer
</Table>