Exhibit 10.1
November 15, 2004
MobilePro Corp.
Davel Acquisition Corp.
6701 Democracy Blvd., Suite 300
Bethesda, MD 20817
Davel Communications
200 Public Square
Suite 700
Cleveland, OH 44114
Re: Reimbursement Regarding Gammino v. Cellco Partnership d/b/a Verizon
Wireless, et al., Amendment of Loan Purchase Agreement and Transfer and
Assignment of Shares and Amendment of Agreement to Exchange Indebtedness
for Personal Property
Ladies and Gentlemen:
Reference is made to: (i) the Loan Purchase Agreement and Transfer and
Assignment of Shares (the "Purchase Agreement"), dated as of September 3, 2004,
by and among MobilePro Corp., a Delaware corporation ("Parent"), Davel
Acquisition Corp., a Delaware corporation and wholly-owned subsidiary of Parent
(the "Buyer"), Davel Communications, Inc., a Delaware corporation (the
"Company"), and the undersigned holders of the Company's senior secured debt
(collectively, the "Selling Lenders"); (ii) the civil action captioned, Gammino
v. Cellco Partnership d/b/a Verizon Wireless, et al., Civil Action No. 04-4303,
filed in the United States District Court for the Eastern District of
Pennsylvania (the "Litigation"), to which the Company is a party; and (iii) the
Agreement to Exchange Indebtedness for Personal Property (the "Exchange
Agreement"), dated as of November 11, 2004, by and among the Company, Davel
Financing Company, L.L.C., a Delaware limited liability company, PhoneTel
Technologies, Inc., an Ohio corporation ("PhoneTel"), Cherokee Communications,
Inc., a Texas corporation ("Cherokee"), certain of their subsidiaries and the
Selling Lenders. Capitalized terms used, but not otherwise defined, herein have
the meanings given to them in the Purchase Agreement.
Parent, the Buyer, the Company and the Selling Lenders hereby agree as follows:
1. The first sentence of Section 1.3 of the Purchase Agreement hereby is
amended and restated to read in its entirety as follows:
"The purchase price (the "PURCHASE PRICE") for the Company Debt will be
$13,550,000 in the aggregate, plus the Additional Adjustment Amount (as
hereinafter defined) to be paid to each of the Selling Lenders."
2. Section 1.1 of the Exchange Agreement hereby is amended by adding at
the end thereof the following:
"The first $693,500 of Regulatory Receipts collected from time to time
by the Company or any of the other Credit Parties after November 11,
2004 shall be
retained by the Company to satisfy a portion of the Company's liability
to AT&T in respect of the "Dial-Around True-Up" and will not be deemed
to be Assigned Regulatory Receipts. The next $18 million of Regulatory
Receipts thereafter collected from time to time by the Company or any
of the other Credit Parties shall be deemed to be Assigned Regulatory
Receipts and shall be paid to the Selling Lenders in accordance with
the terms hereof. None of the approximately $2.54 million in cash and
stock that the Company expects to receive from MCI, Inc., as
dial-around compensation on or about November 11, 2004 (the "MCI
Payment") shall be deemed to be Regulatory Receipts, and the Selling
Lenders will not have any right or claim to such amount of cash and
stock regardless of when the Company receives it."
3. The Selling Lenders agree, as an accommodation to Parent and Buyer
under the Purchase Agreement, that all of the Assigned Regulatory
Receipts collected from time to time by the Company after the Closing
(up to $18 million) (the "Escrow Fund") shall be placed by the Company,
on behalf of the Selling Lenders, into an escrow account with a
third-party escrow agent (the "Escrow Agent") pursuant to an escrow
agreement in the form agreed by the parties hereto (the "Escrow
Agreement"). The Escrow Fund shall be used to reimburse the Company for
any and all losses, claims, damages, liabilities, costs and expenses,
including reasonable attorneys' fees and expenses of investigation and
defense, incurred or suffered by the Company as a result of the
Litigation (collectively, the "Reimbursable Obligations"). Except for
the deposit of the Escrow Fund with the escrow agent under the Escrow
Agreement, the Selling Lenders shall not have any liability, either
jointly or severally, to the Company, Parent or Buyer for any
Reimbursable Obligations.
4. In the event that the Company incurs Reimbursable Obligations, the
Company shall be reimbursed for such Reimbursable Obligations from time
to time as and when incurred solely from the Escrow Fund in accordance
with the terms of the Escrow Agreement. To the extent that the Company
incurs Reimbursable Obligations in excess of the lesser of (i) $18
million and (ii) the amount of Assigned Regulatory Receipts actually
collected by the Company, such excess Reimbursable Obligations shall be
obligations solely of the Company.
5. Following the termination of the Selling Lenders' obligations as
provided in paragraph 10 of this letter agreement, the Escrow Fund
shall be terminated in accordance with the procedure described in the
Escrow Agreement. Upon termination of the Escrow Fund, (i) each of the
Selling Lenders shall be entitled to its pro rata share of any property
remaining in the Escrow Fund after subtracting (A) such amount that in
the reasonable judgment of the Company is necessary to satisfy any then
pending and unsatisfied Reimbursable Obligations (the "Pending
Reimbursable Obligations") specified in any Reimbursement Officer's
Certificate (as defined in the Escrow Agreement) delivered to the
Escrow Agent prior to the Termination Date (as defined below) and (B)
all amounts payable to the Selling Lenders' representative in respect
of the representative's accrued compensation and out-of-pocket expenses
incurred under the Escrow Agreement, which pro rata share shall be
determined by multiplying the aggregate value of such property by such
Selling Lender's percentage allocation of the Purchase Price as set
forth on Exhibit
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B to the Purchase Agreement (the "Proportionate Share"), and (ii) any
Assigned Regulatory Receipts thereafter collected by the Company shall
be paid over to the Selling Lenders in accordance with the terms of the
Exchange Agreement. Upon the date on which all of the Pending
Reimbursable Obligations have been paid or otherwise resolved, each of
the Selling Lenders shall be entitled to its Proportionate Share of any
property remaining in the Escrow Fund after subtracting any remaining
amounts payable to the Selling Lenders' representative in respect of
the representative's accrued compensation and out-of-pocket expenses
incurred under the Escrow Agreement.
6. In the event that the Company fails to (i) assume the defense of the
Litigation, (ii) employ counsel reasonably satisfactory to the Selling
Lenders holding more than 66% of the Company Debt immediately prior to
the Closing (a "Majority of the Selling Lenders"), or (iii) conduct the
defense of the Litigation in a manner that is reasonably satisfactory
to a Majority of the Selling Lenders, the Selling Lenders shall notify
the Company in writing of their objection to the manner in which the
Litigation is then being defended, including the basis for such
objection. As soon as practicable after the Company's receipt of such
notice, the Company and the Selling Lenders' Representative (as defined
in the Escrow Agreement) shall meet (in person or by telephone) and
attempt to resolve the Selling Lenders' objection. In the event that
the Company and the Selling Lenders' Representative are not able to
resolve the objection in a manner reasonably satisfactory to a Majority
of the Selling Lenders, the Selling Lenders shall have the right,
exercisable by a Majority of the Selling Lenders, to participate in,
and, to the extent that they may wish, assume and control the defense
of the Litigation with counsel selected by a Majority of the Selling
Lenders, which counsel shall be reasonably satisfactory to the Company
and the Board of Directors of Parent. In the event that the Selling
Lenders exercise their right to participate in or assume and control
the defense of the Litigation, the Selling Lenders shall be entitled to
reimbursement from the Escrow Fund for all costs and expenses,
including reasonable attorneys' fees and expenses of investigation,
incurred by on behalf of the Selling Lenders in connection with such
defense. If the Selling Lenders assume the defense of the Litigation,
(i) no compromise or settlement thereof may be effected by the Selling
Lenders without the Company's prior written consent (which consent
shall not unreasonably be withheld, conditioned or delayed) unless (A)
there is no finding or admission of any violation of law by or on
behalf of the Company, including, without limitation, any finding or
admission that the Company had, or shall in the future have, an
obligation to license any technology affected by the Litigation, (B)
the relief provided is to be paid or satisfied in full from the Escrow
Fund and (C) the compromise or settlement includes, as an unconditional
term thereof, plaintiff giving the Company a release, in form and
substance reasonably satisfactory to the Company, from all liability in
respect of the claims asserted in the Litigation, and (ii) the Company
shall have no liability with respect to any compromise or settlement
thereof effected without its consent.
7. No admission of liability with respect to, no settlement or compromise
of, and no consent to the entry of any judgment with respect to the
Litigation shall be made by the Company, except with the consent of a
Majority of the Selling Lenders, which consent shall not be
unreasonably withheld, conditioned or delayed. The Company shall not be
entitled to reimbursement from the Escrow Fund for any Reimbursable
Obligations incurred, directly or indirectly, as a result of any such
admission, settlement or
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compromise, or consent to entry of judgment effected without the
requisite consent from a Majority of the Selling Lenders. In addition,
the Company shall neither take, nor refrain from taking, any material
action with respect to the Litigation, except with the consent of a
Majority of the Selling Lenders, which consent shall not be
unreasonably withheld, conditioned or delayed.
8. The reimbursement provided for herein shall be the exclusive remedy of
Parent and the Buyer with respect to (i) any claim or cause of action
that such parties would otherwise have against any of the Selling
Lenders under the Purchase Agreement or otherwise as a result of the
Litigation or (ii) any losses, claims, damages, liabilities, costs and
expenses incurred or suffered by either Parent or the Buyer as a result
of the Litigation.
9. No party hereto may assign any of its rights or obligations hereunder
without the prior written consent of the other parties hereto. This
letter agreement will be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns.
The internal laws of the State of Delaware (irrespective of its choice
of law principles) will govern the validity of this letter agreement,
the construction of its terms, and the interpretation and enforcement
of the rights and duties of the parties hereto. This letter agreement
may be executed in any number of counterparts, each of which will be an
original as regards any party whose signature appears thereon and all
of which together will constitute one and the same instrument.
10. Notwithstanding any other provision of this letter agreement to the
contrary, all of the Selling Lenders' obligations hereunder shall
terminate and be of no further force or effect upon the date of entry
of a final, non-appealable order dismissing with prejudice, settling or
otherwise terminating (without right to re-file) the Litigation with
respect to the Company (the "Termination Date").
11. Except for the changes set forth herein, the Purchase Agreement and the
Exchange Agreement shall remain in full force and effect, unamended as
of the date hereof.
[This space intentionally left blank; signature pages follow.]
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If the foregoing is in accordance with your understanding and is agreed to by
you, please confirm your acceptance by signing the enclosed copy of this letter
agreement at the place indicated and returning the same to the undersigned.
WELLS FARGO FOOTHILL, INC. 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 General Partner
ARK CLO 2000-1, LIMITED CERBERUS PARTNERS, L.P.
By: Patriarch Partners, LLC, By: Cerberus Associates, LLC, as General
its Collateral Manager Partner
By: /S/ LYNN TILTON By: /S/ KEVIN GENDA
-------------------------------- --------------------------------------
Name: Lynn Tilton Name: Kevin Genda
Title: Manager Title: Managing Director
ABLECO FINANCE LLC PNC BANK, NATIONAL ASSOCIATION
By: /S/ KEVIN GENDA By: /S/ WILLIAM R. BREISCH
-------------------------------- --------------------------------------
Name: Kevin Genda Name: William R. Breisch
Title: S. V. P. Title: Senior Vice President
U.S. BANK NATIONAL ASSOCIATION MORGAN STANLEY PRIME INCOME TRUST
By: /S/ DANIEL J. FALSTAD By: /S/ KEVIN EGAN
-------------------------------- --------------------------------------
Name: Daniel J. Falstad Name: Kevin Egan
Title: Vice President Title: V. P.
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AVENUE SPECIAL SITUATIONS FUND II, LP BNP PARIBAS
By: /S/ SONIA E. GARDNER By: /S/ FLETCHER DUKE
-------------------------------- --------------------------------------
Name: Sonia E. Gardner Name: Fletcher Duke
Title: Member Title: Director
By: Avenue Capital Partners
II, LLC, General Partner /S/ BROCK T. HARRIS
By: GL Partners II, LLC, Brock T. Harris
Managing Member of the General Director
Partner
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Accepted and agreed to as of November __, 2004.
DAVEL ACQUISITION CORP.
By: /S/ JAY O. WRIGHT
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Name: Jay O. Wright
Title: President and Chief Executive Officer
MOBILEPRO CORP.
By: /S/ JAY O. WRIGHT
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Name: Jay O. Wright
Title: President and Chief Executive Officer
DAVEL COMMUNICATIONS, INC.
By: /S/ WOODY M. MCGEE
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Name: Woody M. McGee
Title: President
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