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EXHIBIT (c) 4.
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EXECUTION COPY
THIRD AMENDMENT TO CREDIT AGREEMENT
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THIS THIRD AMENDMENT TO CREDIT AGREEMENT (the "AMENDMENT"), dated as of
August 1, 1996, among PHONETEL TECHNOLOGIES, INC., an Ohio corporation (the
"BORROWER"), INTERNATIONALE NEDERLANDEN (U.S.) CAPITAL CORPORATION, a Delaware
corporation ("ING") and CERBERUS PARTNERS, L.P., a Delaware limited partnership
("CERBERUS"), constituting all of the Lenders under the Credit Agreement
referenced below, and ING in its capacity as Agent for the Lenders.
W I T N E S S E T H:
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RECITALS:
A. The Borrower, the Lenders and the Agent have entered into a certain
Credit Agreement, dated as of March 15, 1996, as amended to the date hereof (the
"CREDIT AGREEMENT"). Capitalized terms used herein and not otherwise defined
shall have the meanings ascribed to such terms in the Credit Agreement.
B. The Borrower has requested an amendment to the Credit Agreement to
permit the creation of PhoneTel III, Inc., an Ohio corporation ("PHONETEL III")
and a wholly-owned subsidiary of the Borrower, which will purchase all of the
capital stock of Payphones of America, Inc., a Tennessee corporation ("POA"),
pursuant to an Amended and Restated Share Purchase Agreement dated as of August
1, 1996, among PhoneTel III, POA and all of the shareholders of POA (the "POA
PURCHASE AGREEMENT"), and to permit such purchase by PhoneTel III.
C. The Lenders are agreeable to amending the Credit Agreement on the
terms and conditions set forth herein.
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. AMENDMENT TO SECTION 1.1. Section 1.1 of the Credit
Agreement is hereby amended by inserting the following definitions in the
appropriate alphabetical order:
"PHONETEL III" means PhoneTel III, Inc., an Ohio corporation and
a wholly-owned subsidiary of Borrower."
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"PHONETEL III NOTE" means the promissory note dated as of
August 1, 1996 in a principal amount of $250,000 payable by PhoneTel
III to the order of the Borrower, which note matures on August 31,
2001, accrues interest on the unpaid principal balance at a per annum
rate of interest of 12%, provides for payments of interest only through
December 31, 1997, thereafter provides for equal monthly installments
of principal and interest in the amount of $4,449, and is pledged to
the Agent for the benefit of the Lenders pursuant to the Borrower
Pledge Agreement.
"POA" means Payphones of America, Inc., a Tennessee
corporation.
"POA ACQUISITION" means the purchase by PhoneTel III of all of
the capital stock of POA pursuant to the terms and conditions of the
POA Purchase Agreement.
"POA DOCUMENTS" means, collectively, the POA Purchase
Agreement, the POA Lease, the POA Management Agreement, any other
agreement or instrument evidencing or governing any POA Indebtedness,
and any other instrument or agreement executed by the Borrower or any
of its Subsidiaries in connection with the POA transaction.
"POA GROUP" means, collectively, PhoneTel III and its
Subsidiaries.
"POA INDEBTEDNESS" means, collectively, (i) Indebtedness of
POA owing to Berthel Fisher Company Leasing, Inc. under the POA Lease
in an aggregate principal amount not to exceed $7,750,000, (ii)
Indebtedness in an outstanding principal amount not to exceed $195,636
evidenced by a note payable by POA to the order of Pay-Tele
Communications, Inc., d/b/a Midwest Telecom, (iii) Indebtedness of
PhoneTel III in the aggregate principal amount of $3,634,113.28,
evidenced by one or more Promissory Notes in the form of Exhibit L to
the POA Purchase Agreement, and (iv) the PhoneTel III Note, PROVIDED,
in the case of Indebtedness described in clauses (i) and (iii), that
the obligee with respect to such Indebtedness has expressly waived
recourse to the Borrower and its Subsidiaries (other than the POA
Group) in respect of such Indebtedness in form and substance
satisfactory to the Lenders.
"POA LEASE" means, collectively, (a) the Amended and Restated
Lease Agreement (Lease # 076-17370-015), effective September 13, 1996
between Berthel Fisher & Company Leasing, Inc., agent for
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Telecommunications Income Fund X, L.P., and POA, in the form attached
as Exhibit B-1 to the Third Amendment, (b) the Amended and Restated
Lease Agreement (Lease # 074-17370-016), effective September 13, 1996
between Berthel Fisher & Company Leasing, Inc., agent for
Telecommunications Income Fund IX, L.P., and POA, in the form attached
as Exhibit B-2 to the Third Amendment, and (c) the Amended and Restated
Lease Agreement (Lease # 063-17370-017), effective September 13, 1996
between Berthel Fisher & Company Leasing, Inc. and POA, in the form
attached as Exhibit B-3 to the Third Amendment.
"POA MANAGEMENT AGREEMENT" means the Management Agreement
dated as of August 1, 1996 between the Borrower and POA, in the form of
Exhibit C to the Third Amendment.
"POA PURCHASE AGREEMENT" means that certain Amended and
Restated Share Purchase Agreement, dated as of August 1, 1996, among
the Borrower, PhoneTel III and the holders of all of the capital stock
of POA, the form of which is attached as Exhibit A to the Third
Amendment.
"REVOLVING B OVERADVANCE AMOUNT" means an amount equal to
$50,000, provided that from and after the earlier of January 1, 1997 or
the Amtel Closing Date, such amount shall be reduced to zero.
"THIRD AMENDMENT" means the Third Amendment to Credit
Agreement dated as of August 1, 1996, among the Borrower, ING, Cerberus
and ING in its capacity as Agent.
SECTION 2. AMENDMENT TO CERTAIN TERMS IN SECTION 1.1. Whenever any
reference is made to "the Borrower and its Subsidiaries" or "the Borrower and
any of its Subsidiaries," as the case may be, in the definitions of Cash Flow,
Current Ratio, EBITDA, Eligible Telephones, Excess Cash Flow, Fixed Charges,
Interest Expense, Maximum Overhead Expense, Net Income, Tangible Net Worth, OSP
Agreement, and Telephone Placement Agreement, and wherever such reference is
made in Schedule 3 to the Credit Agreement, such reference shall not include the
POA Group or any of its Subsidiaries.
SECTION 3. AMENDMENT TO SECTION 1.1. Section 1.1 of the Credit
Agreement is hereby further amended by deleting the existing definition of
"Revolving B Loan Availability" and substituting in lieu thereof the following:
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"'REVOLVING B LOAN AVAILABILITY' means, on any date,
an amount equal to the excess of (a) the lesser of (i) the
Revolving B Loan Commitment Amount or (ii) the Borrowing Base
for Revolving B Loans over (b) the then aggregate principal
amount of all outstanding Revolving B Loans less the Revolving
B Overadvance Amount on such date."
SECTION 4. AMENDMENT TO SECTION 2.1.4(a). Section 2.1.4(a) of the
Credit Agreement is hereby amended by deleting clause (2) thereof in its
entirety and substituting in lieu thereof the following:
"(2) the then aggregate outstanding
principal amount of all Revolving B Loans, MINUS the
Revolving B Overadvance Amount, would exceed the
Borrowing Base for Revolving B Loans; or".
SECTION 5. AMENDMENT TO SECTION 2.1.4(b). Section 2.1.4(b) of the
Credit Agreement is hereby amended by deleting clause (2) thereof in its
entirety and substituting in lieu thereof the following:
"(2) the then aggregate outstanding
principal amount of all Revolving B Loans, MINUS the
Revolving B Overadvance Amount, would exceed the
Borrowing Base for Revolving B Loans; or".
SECTION 6. AMENDMENT TO SECTION 3.9(b). Section 3.9(b) of the Credit
Agreement is hereby amended by deleting clause (iii) thereof in its entirety and
substituting in lieu thereof:
"(iii) the Revolving B Loans made after the Closing Date to finance the
funding of a $250,000 loan to be made by the Borrower to PhoneTel III
to be evidenced by the PhoneTel III Note and to finance its continuing
working capital needs, provided, however, that the Revolving B Loans
shall not be used to repay any other outstanding Loan."
SECTION 7. AMENDMENT TO SECTION 5.21. Section 5.21 of the Credit
Agreement is hereby amended by deleting the first sentence thereof in its
entirety and substituting the following in lieu thereof:
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"Set forth in ITEM 14 ("Contracts") of the Disclosure Schedule
is an accurate and complete list of all material Contractual
Obligations of the Borrower and its Subsidiaries as of the
Closing Date."
SECTION 8. AMENDMENT TO ARTICLE 5. Article 5 of the Credit Agreement is
hereby amended by inserting the following Section 5.34 at the end of such
article:
"SECTION 5.34. POA DOCUMENTS. A true and complete copy
of the POA Purchase Agreement, the POA Lease and each other POA
Document (in each case including all exhibits, schedules and
amendments thereto) have been delivered to the Agent."
SECTION 9. AMENDMENT TO SECTION 6.1.1. Clauses (a) and (b) of Section
6.1.1 of the Credit Agreement are hereby amended by deleting said clauses in
their entirety and inserting in lieu thereof the following:
"(a) (i) promptly when available and in any event within
ninety (90) days after the close of each Fiscal Year, a consolidated
balance sheet, a consolidating balance sheet, and a consolidated
balance sheet for the Borrower and its Subsidiaries other than the POA
Group at the close of such Fiscal Year, and related consolidated and
consolidating statements of operations, retained earnings, and cash
flows for such Fiscal Year, of Borrower and its Subsidiaries (with
comparable information at the close of and for the prior Fiscal Year),
certified (in the case of consolidated statements) without
qualification by Price Waterhouse LLP or other independent public
accountants reasonably satisfactory to the Agent, together with a
report containing a description of projected business prospects
(including capital expenditures) and management's discussion and
analysis of financial condition and results of operation of Borrower
and its Subsidiaries;
(ii) promptly when available and in any event within
ninety (90) days after the close of each Fiscal Year, a letter
report of such independent public accountants at the close of
such Fiscal Year to the effect that they have reviewed the
provisions of this Agreement and the most recent Compliance
Certificate being furnished pursuant to clause (a)(iii) and are
not aware of any miscalculation in such Compliance Certificate
relating to the financial tests set forth in SECTION 6.2.4 or of
any default in the performance by the Borrower or any of its
Subsidiaries to be performed by such Loan Parties hereunder or
under any other Loan Document, except such miscalculation or
default, if any, as may be disclosed in such statement; and
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(iii) promptly when available and in any event within
ninety (90) days after the close of each Fiscal Year, a
Compliance Certificate calculated as of the computation date at
the close of such Fiscal Year; and
(b) promptly when available and in any event within (x)
forty-five (45) days after the close of each calendar month of the 1996
Fiscal Year, or (y) thirty (30) days after the close of each calendar
month of each Fiscal Year other than the 1996 Fiscal Year:
(i) a consolidated balance sheet, a consolidating
balance sheet, and a consolidated balance sheet for the Borrower
and its Subsidiaries other than the POA Group at the close of
such month, and consolidated and consolidating statements of
operations, retained earnings, and cash flows for such month and
for the period commencing at the close of the previous Fiscal
Year and ending with the close of such month, of Borrower and
Subsidiaries (with comparable information at the close of and
for the corresponding month of the prior Fiscal Year and for the
corresponding portion of such prior Fiscal Year and with
comparable information set forth in the Projections for the
relevant period, PROVIDED, HOWEVER, that the Borrower shall not
be required to deliver comparisons to the prior Fiscal Year for
all financial statements relating to a calendar month ending on
or prior to December 31, 1996), certified by the principal
accounting or chief financial Authorized Officer of the
Borrower, together with a description of projected business
prospects (including Consolidated Capital Expenditures) and a
brief report containing management's discussion and analysis of
the financial condition and results of operations of the
Borrower and its Subsidiaries (including a discussion and
analysis of any changes compared to prior results and the
Projections);
(ii) updates to the business plan described in clause
(e) hereof for the remaining term of Borrower's then current
Fiscal Year; and
SECTION 10. AMENDMENT TO SECTION 6.1.5. Section 6.1.5 of the Credit
Agreement is hereby amended by adding thereto at the end of said section the
following sentence:
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"Notwithstanding the foregoing, policies of casualty or liability
insurance owned and maintained by the POA Group shall not be required
to show or name the Agent or any Lender as loss payee or additional
insured."
SECTION 11. AMENDMENT TO SECTION 6.1. Section 6.1 of the Credit
Agreement is hereby amended by adding thereto a new Section 6.1.18 as follows:
"SECTION 6.1.18. CERTAIN PROVISIONS REGARDING THE POA
GROUP. The Borrower shall cause the POA Group to:
(a) maintain separate books, financial records and
accounts, including, without limitation, checking and other bank
accounts separate and apart from the books, financial records
and accounts of the Borrower and its other Subsidiaries;
(b) maintain its books, financial records and accounts
in a manner so that it will not be difficult or costly to
segregate, ascertain or otherwise identify the assets and
liabilities of the POA Group;
(c) not commingle any of its assets, funds, liabilities
or business functions with the assets, funds, liabilities or
business functions of the Borrower and its other Subsidiaries,
except that the POA Group may have its Telephones managed (but
may not have its assets, funds, or liabilities commingled)
pursuant to and in accordance with the POA Management Agreement;
(d) observe all corporate procedures and formalities of
POA, including, without limitation, the holding of periodic and
special meetings of its shareholders and board of directors, the
recordation and maintenance of minutes of such meetings, and the
recordation and maintenance of resolutions adopted at such
meetings;
(e) have at least one of director of PhoneTel III and of
POA that is not and will not be a director, officer, employee or
holder of one percent (1%) or more of the common stock of the
Borrower or any of its other Subsidiaries;
(f) pay its liabilities and losses from its own separate
assets;
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(g) transact all business with third parties in the name
of the POA Group as entities separate and distinct from the
Borrower and its other Subsidiaries;
(h) maintain its principal place of business and chief
executive office separate and apart from the principal place of
business and chief executive office of the Borrower and its
other Subsidiaries;
(i) cause all representatives, employees and agents of
the POA Group, when acting as such, to hold themselves out to
third parties as being representatives, employees or agents, as
the case may be, of the POA Group and not of the Borrower and
its other Subsidiaries;
(j) utilize business cards, letterhead, purchase orders,
invoices, telephone numbers and listings and the like, solely in
the name of the POA Group or the relevant entity within such POA
Group and not in the name of Borrower or any of its other
Subsidiaries;
(k) to the extent that the Borrower or any of its
Subsidiaries (other than the POA Group) share the same officers
or other employees, the salaries of and expenses related to such
officers and other employees will be reasonably allocated among
the Borrower and its Subsidiaries (other than the POA Group) on
the one hand, and the POA Group, on the other hand in a manner
that is reasonable, not arbitrary, and will result in each
bearing its fair share of the salary and benefit costs
associated with all such common and shared officers or other
employees;
(l) not enter into any consulting agreement or
management agreement other than the POA Management Agreement and
not compensate any Affiliate of the POA Group other than
pursuant to the terms of the POA Management Agreement;
(m) to the extent that the Borrower and its Subsidiaries
(other than the POA Group), on the one hand, and the POA Group,
on the other hand, jointly contract to do business with vendors
or service providers or share overhead expenses, the cost and
expenses
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incurred in so doing shall be reasonably allocated among them,
shall not be arbitrary and the result in each bearing its fair
share of all such costs and expenses; and
(n) to pay and bear its own cost of preparation of its
own financial statements regardless of whether such statements
(whether audited or unaudited) are prepared internally or by a
certified public accounting firm that prepares financial
statements for the Borrower and its other Subsidiaries.
The Borrower shall cause its consolidated financial statements to
contain a narrative description of the separate assets, liabilities,
business functions, operations and existence of the POA Group to insure
that such separate assets, liabilities, business functions, operations
and existence are readily distinguishable by any person or entity
receiving or relying upon a copy of such consolidated financial
statements. Promptly upon consummation of the POA Acquisition, the
Borrower shall cause PhoneTel III to change its name such that the name
of PhoneTel III shall no longer include the word "PhoneTel"."
SECTION 12. AMENDMENT TO SECTION 6.2.2. Section 6.2.2 of the Credit
Agreement is hereby amended by deleting the "and" immediately following clause
(i) thereof, by deleting subsection (j) thereof in its entirety and by inserting
the following clauses (j) and (k) at the end of such section:
"(i) the POA Indebtedness;
(j) extensions, refinancings, replacements and renewals of any
of the foregoing items described in clauses (a) through (i) above,
provided that the principal amount thereof is not increased or the terms
thereof are not modified to impose more burdensome covenants, rates of
interest, payment or repayment terms or events of default upon the
Borrower or its Subsidiaries, as the case may be; and
(k) other Indebtedness not otherwise covered by clauses (a)
through (j) above not to exceed $100,000 in aggregate amount outstanding
during the term of this Agreement."
SECTION 13. AMENDMENT TO SECTION 6.2.3. Section 6.2.3 of the Credit
Agreement is hereby amended by deleting the "and" immediately following clauses
(k)
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thereof, by deleting clause (l) thereof in its entirety, and by adding the
following clauses (l) and (m) at the end of such section:
"(l) Liens on assets of POA securing Indebtedness described in
clauses (i), (ii) and (iii) of the definition of POA Indebtedness; and
(m) extensions, renewals or replacements of any Lien referred to
in paragraphs (a) through (l) above provided that the principal amount
of the obligation secured thereby is not increased and that any such
extension, renewal or replacement is limited to the property originally
encumbered thereby.
SECTION 14. AMENDMENT TO SECTION 6.2.5. Section 6.2.5 of the Credit
Agreement is hereby amended by deleting said section in its entirety and
substituting the following in lieu thereof:
"SECTION 6.2.5. CAPITAL EXPENDITURES. The Borrower will not,
and will not permit any Subsidiary to, make or commit to make any
Consolidated Capital Expenditures, except that the Borrower and its
Subsidiaries (other than the POA Group) may make Consolidated Capital
Expenditures during any Fiscal Year provided (x) no Default or Event of
Default has occurred and is continuing and (y) the aggregate amount of
Consolidated Capital Expenditures made during such Fiscal Year does not
exceed the amount set forth below opposite such Fiscal Year (in the
case of the 1996 Fiscal Year, for the period commencing on the Closing
Date to the end of such Fiscal Year, without giving effect to the Amtel
Purchase):
FISCAL YEAR AMOUNT
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1996 $3,300,000
1997 $4,000,000
1998 $4,250,000
1999 $4,325,000
PROVIDED, HOWEVER, that the Borrower and its Subsidiaries shall not
make or incur Consolidated Capital Expenditures prior to May 1, 1996 in
excess of $350,000 in the aggregate; PROVIDED, FURTHER, HOWEVER, that
POA may incur Capitalized Lease Liabilities pursuant to the POA Lease,
and POA may make and incur capital expenditures but only to the extent
necessary to maintain or replace Telephones and related equipment in
operation as of
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September 13, 1996; PROVIDED, FURTHER, HOWEVER, that the Borrower and
its Subsidiaries (other than the POA Group) may not make or incur
Consolidated Capital Expenditures in the calendar month immediately
following any calendar month where the Borrower and the Subsidiaries
(other than the POA Group) experience negative cash flow on a
consolidated basis (I.E., cash expenditures exceed cash revenues during
such calendar month); PROVIDED, FURTHER, HOWEVER, that expenditures from
insurance proceeds received upon the occurrence of a Loss which are made
to replace or repair damage to destroyed assets will not be included in
the following calculation for the Fiscal Year such replacement or repair
was made."
SECTION 15. AMENDMENT TO SECTION 6.2.6. Section 6.2.6 of the Credit
Agreement is hereby amended by deleting said section in its entirety and
substituting the following in lieu thereof:
"SECTION 6.2.6. LEASE OBLIGATIONS. The Borrower will not, and
will not permit any Subsidiary to, create or suffer to exist any
obligation for the payment of rent for any property under any operating
lease or agreement to lease having a term of one year or more, except
for (a) leases in existence on the Closing Date and described in ITEM 20
("Leases") of the Disclosure Schedule, (b) any lease of real property
entered into by the Borrower or any Subsidiary after the Closing Date in
the ordinary course of business, (c) the POA Lease, and (d) any capital
lease provided the Capitalized Lease Liabilities incurred thereunder are
permitted under Section 6.2.2(g); PROVIDED, HOWEVER, that no such lease
shall, to the best of the Borrower's knowledge, subject the Borrower or
any Subsidiary to Environmental Liabilities and Costs and that the
aggregate amount of payments due from the Borrower and its Subsidiaries
for all leases referred to in clauses (a) and (b) of this Section 6.2.6,
during each Fiscal Year set forth below, is less than the amount set
forth below opposite such Fiscal Year (in the case of the 1996 Fiscal
Year, for the period commencing on the Closing Date to the end of such
Fiscal Year):
FISCAL YEAR AMOUNT
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1996 $100,000
1997 $100,000
1998 $100,000
1999 $100,000."
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SECTION 16. AMENDMENT TO SECTION 6.2.7. Section 6.2.7 of the Credit
Agreement is hereby amended by deleting the "and" immediately following clause
(f) thereof, deleting the period immediately following clause (g) thereof and
inserting in lieu thereof a semicolon, and by inserting the following clauses
(h) and (i) at the end of such section:
"(h) all of the capital stock of (i) PhoneTel III, and (ii)
POA provided that such capital stock of POA is acquired pursuant to and
in accordance with the terms of the POA Purchase Agreement; and
(i) the PhoneTel III Note."
SECTION 17. AMENDMENT TO SECTION 6.2.8. Section 6.2.8 of the Credit
Agreement is hereby amended by inserting the following proviso immediately prior
to the period appearing at the end of such section:
"except that Borrower may permit the lessors under the POA Lease to
convert up to $1,000,000 of Indebtedness under the POA Lease to Common
Stock."
SECTION 18. AMENDMENT TO SECTION 6.2.10. Section 6.2.10(a) of the
Credit Agreement is hereby amended by inserting the following proviso
immediately prior to the semicolon appearing at the end of such section:
", PROVIDED FURTHER HOWEVER, that PhoneTel III may purchase all of the
capital stock of POA pursuant to and on the terms and conditions set
forth in the POA Purchase Agreement"
SECTION 19. AMENDMENT TO SECTION 6.2.10. Section 6.2.10(b) of the
Credit Agreement is hereby amended by inserting the following proviso
immediately prior to the period appearing at the end of such section:
"; PROVIDED, HOWEVER, that Borrower may create PhoneTel III, Inc. a
wholly-owned subsidiary of Borrower, in order to acquire POA"
SECTION 20. AMENDMENT TO SECTION 6.2.13. Section 6.2.13 of the Credit
Agreement is hereby amended by inserting at the end of clause (a) thereof
immediately preceding the semicolon "except that the Borrower and POA may enter
into the POA Management Agreement".
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SECTION 21. AMENDMENT TO SECTION 6.2.18. Section 6.2.18 of the Credit
Agreement is hereby amended by deleting the period at the end of said Section
and adding the following at the end of such Section:
"; PROVIDED, HOWEVER, that POA may create or otherwise cause or suffer
to exist or become effective any such encumbrance or restriction on the
ability of POA pursuant to the POA Lease."
SECTION 22. NEW SECTION 6.2.21. Section 6.2 of the Credit Agreement is
hereby amended by adding thereto a new Section 6.2.21 as follows:
"SECTION 6.2.21. POA DOCUMENTS. Neither Borrower nor any of
its Subsidiaries shall execute and deliver any agreement relating to
the purchase of capital stock or assets of POA or any of its
Subsidiaries except in the form attached as Exhibit A to the Third
Amendment. Neither Borrower nor any of its Subsidiaries shall amend,
modify or supplement any term or provision of any POA Document or waive
any condition set forth therein, without the prior written consent of
the Required Lenders."
SECTION 23. AMENDMENT TO SECTION 7.1. Section 7.1 of the Credit
Agreement is hereby amended by adding a new Section 7.1.13 as follows:
"SECTION 7.1.13. CERTAIN EVENTS WITH RESPECT TO THE POA GROUP.
POA shall have failed to pay when due any management fees to the
Borrower under the POA Management Agreement and within 30 days of such
failure Borrower shall have failed to give POA notice of termination of
the POA Management Agreement, or the Borrower shall continue to provide
services to the POA Group upon termination of the POA Management
Agreement."
SECTION 24. WAIVER OF ONE BUSINESS DAY'S NOTICE OF BORROWING. The
Lenders agree that, upon satisfaction of the conditions set forth in Section 27
and notwithstanding the provisions of Section 3.1 of the Credit Agreement,
Revolving B Loans requested to finance the funding of the loan to be evidenced
by the PhoneTel III Note shall be made on the Business Day of receipt of a
Borrowing Request with respect to such Revolving B Loans provided such Borrowing
Request is received no later than 2:00 p.m., New York City time, on such
Business Day.
SECTION 25. CONTINUING EFFECTIVENESS OF CREDIT AGREEMENT. The Credit
Agreement and each of the other Loan Documents shall remain in full force and
effect in
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accordance with their respective terms, except as expressly amended or
modified by this Amendment.
SECTION 26. COST AND EXPENSES. The Borrower agrees to pay all
reasonable out-of-pocket expenses of the Agent and each of the Lenders party to
this Amendment for the negotiation, preparation, execution and delivery of this
Amendment (including reasonable fees and expenses of counsel to the Agent and
such Lenders).
SECTION 27. EFFECTIVENESS. This Amendment shall become effective only
upon (i) receipt by the Agent of a copy of this Amendment, duly executed by each
of the Borrower, the Lenders and the Agent, and duly acknowledged and consented
to by the Subsidiaries of the Borrower in the form attached to this Amendment,
(ii) receipt by the Agent of a copy of a supplement to the Borrower Pledge
Agreement, in form and substance satisfactory to the Lenders and the Agent,
pursuant to which the Borrower pledges to the Agent for the benefit of the
Lenders all of the capital stock of PhoneTel III, Inc. and the $250,000
promissory note executed by PhoneTel III in favor of the Borrower, (iii) receipt
by the Agent of a copy of a Stock Pledge Agreement, executed by PhoneTel III in
form and substance satisfactory to the Lenders and the Agent, pursuant to which,
upon and simultaneously with the POA Purchase, PhoneTel III pledges to the Agent
for the benefit of the Lenders all of the capital stock of POA, (iv) receipt by
the Agent of a copy of a supplement to the Subsidiary Guaranty, executed by
PhoneTel III in favor of the Lenders, in form and substance satisfactory to the
Lenders and the Agent, (v) receipt by the Agent of a copy of a supplement to the
Security Agreement executed by PhoneTel III in form and substance satisfactory
to the Lenders and the Agent, pursuant to which PhoneTel III grants to the Agent
for the benefit of the Lenders a first priority security interest in all of the
assets of PhoneTel III, and (vi) receipt by the Lenders and the Agent of an
opinion letter, dated the date hereof, from Skadden, Arps, Slate, Meagher &
Flom, counsel to the Borrower and its Subsidiaries, and Tammy L. Martin, General
Counsel to Borrower and its Subsidiaries, in the form of EXHIBIT D and EXHIBIT E
hereto, respectively.
SECTION 28. HEADINGS. The various headings of this Amendment are
inserted for convenience only and shall not affect the meaning or interpretation
of this Amendment or any provision hereof.
SECTION 29. COUNTERPARTS. This Amendment may be executed by the parties
hereto in several counterparts, each of which shall be executed by the Borrower,
the Lenders and the Agent and shall be deemed to be an original and all of which
shall constitute together but one and the same agreement.
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SECTION 30. GOVERNING LAW. THIS AMENDMENT SHALL BE DEEMED TO
BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS
OF THE STATE OF NEW YORK.
SECTION 31. SUCCESSORS AND ASSIGNS. This Amendment shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns; PROVIDED, HOWEVER, that the Borrower may not assign or
transfer its rights or obligations hereunder or under the Credit Agreement
except in accordance with the terms of the Credit Agreement.
-15-
17
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
PHONETEL TECHNOLOGIES, INC.
By:_______________________________
Name:
Title:
[CORPORATE SEAL]
INTERNATIONALE NEDERLANDEN
(U.S.) CAPITAL CORPORATION, in its
capacity as Agent and Lender
By:_______________________________
James W. Latimer
Managing Director
CERBERUS PARTNERS, L.P.
By: CERBERUS ASSOCIATES, L.P.,
Its General Partner
By:_________________________
Name: Stephen Feinberg
Title: General Partner
(SIGNATURE PAGE TO THIRD AMENDMENT TO CREDIT AGREEMENT)
18
ACKNOWLEDGMENT AND CONSENT
The undersigned hereby acknowledge receipt of a copy of the foregoing
amendment, consent to the terms and provisions set forth therein, and agree that
the Subsidiary Guaranty dated as of March 15, 1996 (the "SUBSIDIARY GUARANTY")
made by each of the undersigned, jointly and severally, in favor of
Internationale Nederlanden (U.S.) Capital Corporation ("ING") and such other
Lenders as are, or may from time to time become, parties to the Credit
Agreement, and ING as Agent for such Lenders, will continue in full force and
effect without diminution or impairment notwithstanding the execution and
delivery of the amendment. The undersigned further acknowledge and agree that,
upon effectiveness of the amendment and from and after the date thereof, each
reference to the Credit Agreement in the Subsidiary Guaranty and each other Loan
Document (as such term is defined in the Credit Agreement) to which any of the
undersigned is a party shall mean and be a reference to the Credit Agreement as
amended by the foregoing amendment.
PUBLIC TELEPHONE CORPORATION
By:_______________________________
Name:
Title:
[CORPORATE SEAL]
WORLD COMMUNICATIONS, INC.
By:_______________________________
Name:
Title:
[CORPORATE SEAL]
NORTH FLORIDA TELEPHONE CORPORATION
19
By:_______________________________
Name:
Title:
[CORPORATE SEAL]
PARAMOUNT COMMUNICATIONS SYSTEMS, INC.
By:_______________________________
Name:
Title:
[CORPORATE SEAL]
20
EXHIBIT A
---------
[POA Purchase Agreement]
21
EXHIBITS B-1 THROUGH B-3
------------------------
[POA Lease]
22
EXHIBIT C
---------
[POA Management Agreement]
23
EXHIBIT D
---------
[Form of Opinion of Skadden, Arps, Slate, Meagher & Flom]
24
EXHIBIT E
---------
[Form of Opinion of Tammy L. Martin]