Exhibit 10.19
AMENDED, RESTATED, AND CONSOLIDATED CREDIT AGREEMENT
Dated as of July 24, 2002
among
DAVEL FINANCING COMPANY, L.L.C.,
PHONETEL TECHNOLOGIES, INC.,
and
CHEROKEE COMMUNICATIONS, INC,.
as Borrowers,
DAVEL COMMUNICATIONS, INC.
and
THE NON-BORROWER DOMESTIC SUBSIDIARIES OF DAVEL COMMUNICATIONS, INC.,
as Guarantors,
FOOTHILL CAPITAL CORPORATION,
as Agent
and
THE LENDERS NAMED HEREIN
TABLE OF CONTENTS
Page
ARTICLE I - DEFINITIONS ..........................................................................................2
Section 1.01 Certain Defined Terms.......................................................................2
Section 1.02 Computation of Time Periods................................................................20
Section 1.03 Terms Generally............................................................................20
Article II - AMOUNT AND TERMS OF THE LOANs.......................................................................20
Section 2.01 The Loans........................................................ERROR! BOOKMARK NOT DEFINED.
Section 2.02 Conversion of Existing Indebtedness........................................................20
Section 2.03 Interest; Fees, and Repayment..............................................................20
Section 2.04 Prepayments................................................................................22
Section 2.05 Payments and Computations..................................................................24
Section 2.06 Evidence of Indebtedness; Registered Notes.................................................25
Section 2.07 Joint and Several Liability of Borrowers...................................................26
Section 2.08 Cash Management............................................................................28
Article III - GUARANTY ..........................................................................................29
Section 3.01 Guaranty of Payment........................................................................29
Section 3.02 Obligations Unconditional..................................................................29
Section 3.03 Modifications..............................................................................30
Section 3.04 Waiver of Rights...........................................................................30
Section 3.05 Reinstatement..............................................................................30
Section 3.06 Remedies...................................................................................30
Section 3.07 Limitation of Guaranty.....................................................................31
Section 3.08 Rights of Contribution.....................................................................31
Article IV - CONDITIONS OF LENDING...............................................................................31
Section 4.01 Conditions Precedent to the Loans..........................................................31
Article V - REPRESENTATIONS AND WARRANTIES OF THE CREDIT PARTIES.................................................35
Section 5.01 Representations and Warranties of the Credit Parties.......................................35
Article VI - COVENANTS OF THE credit parties.....................................................................42
Section 6.01 Affirmative Covenants......................................................................42
Section 6.02 Negative Covenants.........................................................................49
Article VII - EVENTS OF DEFAULT..................................................................................53
Section 7.01 Events of Default..........................................................................53
Section 7.02 Acceleration; Remedies.....................................................................56
Section 7.03 Allocation of Payments After Event of Default..............................................57
Article VIII - AGENT; THE LENDERS................................................................................57
i
Section 8.01 Appointment and Authorization of Agent.....................................................57
Section 8.02 Delegation of Duties.......................................................................58
Section 8.03 Liability of Agent.........................................................................58
Section 8.04 Reliance by Agent..........................................................................59
Section 8.05 Notice of Default or Event of Default......................................................59
Section 8.06 Credit Decision............................................................................59
Section 8.07 Costs and Expenses; Indemnification........................................................60
Section 8.08 Agent in Individual Capacity...............................................................60
Section 8.09 Successor Agent............................................................................61
Section 8.10 Lender in Individual Capacity..............................................................61
Section 8.11 Withholding Taxes..........................................................................61
Section 8.12 Collateral Matters.........................................................................63
Section 8.13 Restrictions on Actions by Lenders; Sharing of Payments....................................64
Section 8.14 Agency for Perfection......................................................................65
Section 8.15 Payments by Agent to the Lenders...........................................................65
Section 8.16 Concerning the Collateral and Related Loan Documents.......................................65
Section 8.17 Field Audits and Examination Reports; Confidentiality; Disclaimers by Lenders; Other
Reports and Information....................................................................65
Section 8.18 Several Obligations; No Liability..........................................................66
Section 8.19 Legal Representation of Agent..............................................................67
Article IX - MISCELLANEOUS ......................................................................................67
Section 9.01 Amendments, Etc............................................................................67
Section 9.02 Notices....................................................................................68
Section 9.03 No Waiver; Remedies........................................................................69
Section 9.04 Benefit of Agreement.......................................................................69
Section 9.05 Payment of Expenses; Indemnification.......................................................71
Section 9.06 Counterparts/Telecopy......................................................................72
Section 9.07 Headings...................................................................................72
Section 9.08 Survival of Indemnification and Representations and Warranties.............................72
Section 9.09 Governing Law, Jurisdiction, Waiver Of Jury Trial, Etc.....................................72
Section 9.10 Time.......................................................................................73
Section 9.11 Severability...............................................................................73
Section 9.12 Further Assurances.........................................................................73
Section 9.13 Confidentiality............................................................................74
Section 9.14 Entirety...................................................................................73
Section 9.15 Binding Effect; Continuing Agreement.......................................................74
Schedules
Schedule 1.01(a) - Agent's Account
Schedule 1.01(b) Domestic Subsidiaries
Schedule 1.01(c) - Loan Percentages
Schedule 1.01(d) - Existing Investments
Schedule 1.01(e) - Existing Liens
Schedule 4.01(j) - Officer's Certificates
ii
Schedule 5.01(a) Non-Qualification
Schedule 5.01(f) - Default Under Contracts, Leases, Etc.
Schedule 5.01(h) - Existing Indebtedness
Schedule 5.01(i) - Litigation
Schedule 5.01(l) - ERISA
Schedule 5.01(m) - Subsidiaries
Schedule 5.01(p) - Intellectual Property
Schedule 5.01(q) - Investments
Schedule 5.01(r)(i) - Real Property Locations
Schedule 5.01(r)(ii) - Chief Executive Office; Principal Place of Business
Schedule 5.01(w) - Asset Sales
Schedule 6.01(g) - Insurance
Schedule 6.02(i) - Affiliate Transactions
Exhibits
Exhibit A - Budget
Exhibit 6.01(a) - Form of Officer's Certificate
Exhibit 6.01(k) - Form of Joinder Agreement
Exhibit 9.04(b) - Form of Assignment Agreement
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AMENDED, RESTATED, AND CONSOLIDATED CREDIT AGREEMENT
AMENDED, RESTATED, AND CONSOLIDATED CREDIT AGREEMENT dated as of July
24, 2002 (the "Agreement"), among Davel Financing Company, L.L.C., a Delaware
limited liability company ("Davel"), PhoneTel Technologies, Inc., an Ohio
corporation ("PhoneTel"), Cherokee Communications, Inc., a Texas corporation
("Cherokee", and together with Davel and PhoneTel, individually, a "Borrower"
and, collectively, the "Borrowers"), Davel Communications, Inc., a Delaware
corporation ("Parent"), each of the Domestic Subsidiaries (as defined herein) of
Parent or any Borrower, each of the lenders that is signatory to this Agreement
(together with its successors and permitted assigns, individually, a "Lender",
and, collectively, the "Lenders"), Foothill Capital Corporation, a California
corporation ("Foothill"), as agent for the Lenders (in such capacity, together
with its successors, if any, in such capacity, the "Agent").
RECITALS
WHEREAS, Davel (as a borrower), Parent and certain subsidiaries of
Parent (as guarantors), and the Davel Lenders are parties to the Existing Davel
Credit Agreement;
WHEREAS, PhoneTel and Cherokee (as borrowers) and the PhoneTel Lenders
are parties to the Existing PhoneTel Credit Agreement;
WHEREAS, Parent, Davel, PhoneTel, PT Merger Corp., and DF Merger Corp.
are parties to the Merger Agreements, pursuant to which certain transactions
have been consummated resulting in, among other things, PhoneTel becoming a
wholly-owned subsidiary of Davel and Cherokee becoming a wholly-owned indirect
subsidiary of Davel;
WHEREAS, Parent, ▇▇▇▇▇, ▇▇ Merger Corp., PhoneTel, Cherokee, the Davel
Lenders, and the PhoneTel Lenders are parties to the Exchange Agreement,
pursuant to which (i) the Davel Lenders have assigned to Davel a portion of the
debt owing under the Existing Davel Credit Agreement in exchange for the
transfer by Davel to the Davel Lenders of all the issued and outstanding shares
of DF Merger Corp.'s common stock (the "Davel Debt for Equity Exchange"), which
shares have been converted, pursuant to the Merger Agreements, into shares of
Parent's common stock, and (ii) the PhoneTel Lenders have assigned to Phonetel a
portion of the debt owing under the Existing PhoneTel Credit Agreement in
exchange for the issuance by PhoneTel to the PhoneTel Lenders of shares of
PhoneTel's common stock (the "PhoneTel Debt for Equity Exchange"), which shares
have been converted, pursuant to the Merger Agreements, into shares of Parent's
common stock;
WHEREAS, concurrently herewith and as reflected in this Agreement, the
Lenders and the Credit Parties have effected (i) the assignment of a portion of
the Reduced Davel Debt by the Davel Lenders to the PhoneTel Lenders and the
assumption of the obligations under the Existing Davel Credit Agreement by
PhoneTel and Cherokee, and (ii) the assignment of a portion of the Reduced
PhoneTel Debt by the PhoneTel Lenders to the Davel Lenders and the assumption of
the obligations under the Existing PhoneTel Credit Agreement by Davel; and
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WHEREAS, the parties to this Agreement have agreed to amend, restate,
and consolidate the Existing Davel Credit Agreement and the Existing PhoneTel
Credit Agreement, as set forth herein.
NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree to amend, restate, and consolidate the
Existing Davel Credit Agreement and the Existing PhoneTel Credit Agreement as
follows:
ARTICLE I - DEFINITIONS
SECTION 1.01 CERTAIN DEFINED TERMS. All capitalized terms used in, or
incorporated by reference into, this Agreement but not otherwise defined herein
shall be used herein as set forth below (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):
"ADDITIONAL CREDIT PARTY" means each Person that becomes a Guarantor
after the Closing Date, as provided in SECTION 6.01(k).
"ADJUSTED EBITDA" means, for any period, EBITDA for such period minus
all Regulatory Receipts received by any Credit Party with respect to such
period.
"AFFILIATE" means, with respect to any Person, any other Person
directly or indirectly controlling (including but not limited to all directors
and officers of such Person), controlled by or under direct or indirect common
control with such Person. A Person shall be deemed to control a corporation if
such Person possesses, directly or indirectly, the power (a) to vote 10% or more
of the securities having ordinary voting power for the election of directors or
trustees of such corporation or (b) to direct or cause direction of the
management and policies of such corporation, whether through the ownership of
voting securities, by contract or otherwise.
"AGENT" has the meaning specified in the preamble to this Agreement.
"AGENT'S ACCOUNT" means the account identified on SCHEDULE 1.01(A).
"AGENT-RELATED PERSONS" means Agent together with its Affiliates,
officers, directors, employees, and agents.
"APPROVED FUND" means, with respect to any Lender that is a fund or
trust that makes, buys or invests in commercial loans, any other fund or trust
that makes, buys or invests in commercial loans and is managed by the same
investment advisor as such Lender or an Affiliate thereof.
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"ASSET DISPOSITION" means the disposition of any or all of the assets
of a Credit Party or any of its Subsidiaries whether by sale, lease, transfer,
condemnation or otherwise, other than transfers of assets permitted by SECTION
6.02(e).
"BANKRUPTCY CODE" means the Bankruptcy Code in Title 11 of the United
States Code, as amended, modified, succeeded or replaced from time to time.
"BASE RATE" means, the rate of interest announced within ▇▇▇▇▇ Fargo
Bank, National Association, at its principal office in San Francisco as its
"prime rate", with the understanding that the "prime rate" is one of ▇▇▇▇▇
Fargo's base rates (not necessarily the lowest of such rates) and serves as the
basis upon which effective rates of interest are calculated for those loans
making reference thereto and is evidenced by the recording thereof after its
announcement in such internal publication or publications as ▇▇▇▇▇ Fargo may
designate.
"BUDGET" means the Credit Parties' projected financial statements for
each year-to-date period ending on the last day of each calendar month, until
the Maturity Date, a copy of which is attached hereto as EXHIBIT A.
"BORROWER" and "BORROWERS" have the meanings specified in the preamble
to this Agreement.
"BUSINESS DAY" means any day other than a Saturday, a Sunday, a legal
holiday or any other day on which banking institutions are required or
authorized by law or other governmental action to be closed in Los Angeles,
California.
"CAPITAL EXPENDITURES" means all expenditures (other than expenditures
incurred in connection with a Permitted Acquisition) of the Credit Parties and
their Subsidiaries which, in accordance with GAAP, would be classified as
capital expenditures, including, without limitation, Capital Leases.
"CAPITAL LEASE" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
accordance with GAAP, is or should be accounted for as a capital lease on the
balance sheet of that Person and the amount of such obligation shall be the
capitalized amount thereof determined in accordance with GAAP.
"CAPITAL STOCK" means (a) in the case of a corporation, all classes of
capital stock of such corporation, (b) in the case of a partnership, partnership
interests (whether general or limited), (c) in the case of a limited liability
company, membership interests and (d) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.
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"CASH EQUIVALENTS" means (a) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than twelve months from the date of acquisition, (b) U.S. dollar denominated
time and demand deposits and certificates of deposit of (i) any Lender, (ii) any
domestic commercial bank having capital and surplus in excess of $500,000,000 or
(iii) any bank whose short-term commercial paper rating from S&P is at least A-1
or the equivalent thereof or from ▇▇▇▇▇'▇ is at least P-1 or the equivalent
thereof (any such bank being an "APPROVED BANK"), in each case with maturities
of not more than twelve months from the date of acquisition, (c) commercial
paper and variable or fixed rate notes issued by any Approved Bank (or by the
parent company thereof) or any variable rate notes issued by, or guaranteed by,
any domestic corporation rated A-1 (or the equivalent thereof) or better by S&P
or P-1 (or the equivalent thereof) or better by Moody's and maturing within
twelve months of the date of acquisition, (d) repurchase agreements with a bank
or trust company (including any of the Lenders) or recognized securities dealer
having capital and surplus in excess of $500,000,000 for direct obligations
issued by or fully guaranteed by the United States of America in which the
Borrower shall have a perfected first priority security interest (subject to no
other Liens) and having, on the date of purchase thereof, a fair market value of
at least 100% of the amount of the repurchase obligations and (e) Investments,
classified in accordance with GAAP as current assets, in money market investment
programs registered under the Investment Company Act of 1940, as amended, which
are administered by reputable financial institutions having capital of at least
$500,000,000 and the portfolios of which are limited to Investments of the
character described in the foregoing subdivisions (a) through (d).
"CASH IN BANK" means, with respect to any Person, all cash of such
Person, located in bank accounts (other than the proceeds of the Loans and cash
in accounts securing letter of credit obligations), including without limitation
all cash in any depository account, concentration account or otherwise in the
direct or indirect possession of such Person.
"CASH MANAGEMENT BANK" has the meaning specified in SECTION 2.08.
"CASH MANAGEMENT ACCOUNT" has the meaning specified in SECTION 2.08.
"CASH MANAGEMENT AGREEMENT" means a certain cash management services
agreement, in form and substance satisfactory to the Agent, which is among the
Borrowers, the Agent, and one of the Cash Management Banks.
"CHANGE OF CONTROL" means any of the following occurring after the date
hereof: (a) Parent shall cease to own and control 100% of the membership or
limited liability company interests of Davel (other than due to a transfer of
such interests to a Person wholly-owned by Parent); (b) Davel shall cease to own
and control 100% of the Voting Stock of PhoneTel (other than due to a transfer
of such Voting Stock to a Person wholly-owned by Parent); (c) PhoneTel shall
cease to own and control 100% of the Voting Stock of Cherokee (other than due to
a transfer of such Voting Stock to a Person wholly-owned by Parent); (d) with
respect to any
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Guarantor, Parent or Davel, as the case may be, shall cease to own 100% of the
Voting Stock of such Guarantor; or (e) with respect to Parent, (i) any "person"
or "group" (within the meaning of Section 13(d) or 14(d) of the Exchange Act)
shall become, directly or indirectly, the "beneficial owner" (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act except that a Person shall be
deemed to have "beneficial ownership" of all shares that any such Person has the
right to acquire, whether such right is exercisable immediately or only after
the passage of time), by way of merger, consolidation or otherwise, of 40% or
more of the Voting Stock of Parent on a fully-diluted basis, after giving effect
to the conversion and exercise of all outstanding warrants, options and other
securities of Parent (whether or not such securities are then currently
convertible or exercisable), or (ii) during any period of two consecutive
calendar years, commencing after the Merger is consummated, individuals who at
the beginning of such period constituted the board of directors of Parent shall
cease for any reason to constitute a majority of the directors of Parent then in
office unless such new directors were elected or designated by the directors of
Parent who constituted the board of directors of Parent at the beginning of such
period or such directors were elected by shareholders to fill vacant seats for
resigning or retiring directors that were not replaced at the time of such
resignation or retirement.
"CHEROKEE" has the meaning specified in the preamble to this Agreement.
"CLOSING DATE" means the date on which the Loans are made in accordance
with Article II and Article IV.
"CLOSING FEE" has the meaning specified in SECTION 2.03(b).
"CODE" means the Internal Revenue Code of 1986, as amended, and any
successor statute thereto, as interpreted by the rules and regulations
promulgated thereunder, in each case as in effect from time to time. References
to sections of the Code should be construed to also refer to any successor
sections.
"COLLATERAL" has the meaning specified in the Security Agreement.
"COLLATERAL DOCUMENTS" means the Security Agreement, and such other
documents executed and delivered in connection with the attachment and
perfection of the Lenders' security interests in the assets of the Credit
Parties, including without limitation, the Mortgage Policies, UCC financing
statements and patent and trademark filings.
"COLLECTIONS" means all cash, checks, notes, instruments, and other
items of payment (including insurance proceeds, proceeds of cash sales, rental
proceeds, and tax refunds) of the Borrowers.
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"COMMUNICATIONS LAW" means the Communications Act of 1934, as amended
(including, without limitation, the Telecommunications Act of 1996), and all
rules and regulations thereunder, or any successor statute or statutes, and all
rules and regulations of the FCC or any other applicable Governmental Authority
related to the provision of communication or broadcast services, each as amended
or supplemented from time to time.
"CREDIT PARTIES" means the Borrowers, the Guarantors and any Additional
Credit Parties.
"DAVEL" has the meaning specified in the preamble to this Agreement.
"DAVEL DEBT FOR EQUITY EXCHANGE" has the meaning specified in the
recitals to this Agreement.
"DAVEL LENDERS" has the meaning specified in the Exchange Agreement.
"DEBT ISSUANCE" means the issuance of any Indebtedness for borrowed
money by a Credit Party or any of its Subsidiaries, other than Indebtedness
permitted by SECTION 6.02(a).
"DEFAULT" means any Event of Default or any event, act or condition
that would constitute an Event of Default but for the requirement that notice be
given or time elapse or both.
"DEFAULTING LENDER RATE" means (a) the Base Rate for the first 3 days
from and after the date the relevant payment is due, and (b) thereafter, a rate
equal to the Base Rate plus 2 percentage points.
"DOLLARS" and "$" means dollars in lawful currency of the United States
of America.
"DOMESTIC SUBSIDIARY" means each direct and indirect Subsidiary of any
Borrower that is incorporated or organized under the laws of any state of the
United States or the District of Columbia whether existing as of the date hereof
or hereafter created or acquired. As of the Closing Date, the Domestic
Subsidiaries are as set forth on SCHEDULE 1.01(B).
"EBITDA" means,with respect to Parent and its Subsidiaries on a
consolidated basis an amount equal to (A) Net Income for such period (excluding
the effect of any extraordinary or other non-recurring gains (including any gain
from the sale of property not in the ordinary course of business) or non-cash
losses) PLUS (B) an amount which, in the determination of Net Income for such
period, has been deducted for (1) Interest Expense (inclusive of amortization of
deferred financing fees and any original issue discount) for such
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period, (2) total Federal, state, foreign or other income or franchise taxes for
such period, (3) all depreciation and amortization for such period, all as
determined in accordance with GAAP, (4) any non-cash charges related to the
issuance of stock, warrants or options to management (or the exercise of such
warrants or options), (5) any purchase accounting adjustments required or
permitted by FASB 141 and FASB 142 and (6) other non-cash charges to the extent
reflected in Net Income other than write-offs related to accounts receivable in
connection with dial-around revenues recognized subsequent to the Closing Date
MINUS (C) any cash expenditures relating to the non-cash charges set forth in
clause (B) above (whether for such period or a prior period).
"ELIGIBLE ASSIGNEE" means (a) any Lender; (b) any Approved Fund of a
Lender, (c) an Affiliate of a Lender; (d) a commercial bank organized under the
laws of the United States, or any state thereof, and having total assets in
excess of $250,000,000; (e) a commercial bank organized under the laws of any
other country which is a member of the Organization for Economic Cooperation and
Development or under the laws of a political subdivision of any such country and
which has total assets in excess of $250,000,000, provided that such bank is
acting through a branch or agency located in the United States; (f) a finance
company, insurance company, or other financial institution or fund that is
engaged in making, purchasing, or otherwise investing in commercial loans in the
ordinary course of its business and having (together with its Affiliates) total
assets in excess of $250,000,000; and (g) any other Person approved by the other
Lenders and the Borrowers (such approval not to be unreasonably withheld or
delayed); PROVIDED THAT (i) the Borrowers' consent is not required during the
existence and continuation of an Event of Default and (ii) approval by the
Borrowers shall be deemed given if no objection is received by the Lenders and
from the Borrowers within five Business Days after notice of such proposed
assignment has been received by the Borrowers.
"ENVIRONMENTAL CLAIM" means any written notice, notice of violation,
written demand, written allegation, action, suit, injunction, judgment, order,
consent decree, penalty, fine, lien, proceeding, or written claim (whether
administrative, judicial, or private in nature) arising (a) pursuant to, or in
connection with, an actual or alleged violation of, any Environmental Law, (b)
in connection with any Hazardous Material, (c) from any assessment, abatement,
removal, remedial, corrective, or other response action in connection with an
Environmental Law or (d) from any actual or alleged damage, injury, threat, or
harm to occupational health or safety, natural resources, or the environment.
"ENVIRONMENTAL LAWS" means any current or future legal requirement of
any Governmental Authority pertaining to (a) the protection of occupational
health or safety, and the environment, (b) the protection of natural resources
and wildlife, (c) the protection or use of surface water and groundwater or (d)
the management, manufacture, possession, presence, use, generation,
transportation, treatment, storage, disposal, release, threatened release,
abatement, removal, remediation or handling of, or exposure to, any hazardous or
toxic substance or material or (e) pollution (including any release to land
surface water and groundwater) and includes, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 USC
9601 et seq., Solid Waste Disposal Act, as amended by the Resource
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Conservation and Recovery Act of 1976 and Hazardous and Solid Waste Amendments
of 1984, 42 USC 6901 et seq., Federal Water Pollution Control Act, as amended by
the Clean Water Act of 1977, 33 USC 1251 et seq., Clean Air Act of 1966, as
amended, 42 USC 7401 et seq., Toxic Substances Control Act of 1976, 15 USC 2601
et seq., Hazardous Materials Transportation Act, 49 USC App. 1801 et seq.,
Occupational Safety and Health Act of 1970, as amended, 29 USC 651 et seq., Oil
Pollution Act of 1990, 33 USC 2701 et seq., Emergency Planning and Community
Right-to-Know Act of 1986, 42 USC 11001 et seq., National Environmental Policy
Act of 1969, 42 USC 4321 et seq., Safe Drinking Water Act of 1974, as amended,
42 USC 300(f) et seq., any analogous implementing or successor law, and any
amendment, rule, regulation, order, or directive issued thereunder.
"EQUITY ISSUANCE" means any issuance by a Credit Party to any Person
(other than the Hill Group, Samstock L.L.C., EGI-DM Investments, L.L.C. or their
Affiliates or any Credit Party) of (a) shares of its Capital Stock, (b) any
shares of its Capital Stock pursuant to the exercise of options or warrants or
(c) any shares of its Capital Stock pursuant to the conversion of any debt
securities to equity; provided that Equity Issuance shall not include (i) the
issuance of Capital Stock or options as compensation in the ordinary course to
management or pursuant to any director or employee option plan or incentive or
restrictive stock plan or (ii) any issuance of shares of Capital Stock pursuant
to the Exchange Agreement or the Merger Agreements.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto, as interpreted by the rules and
regulations thereunder, all as the same may be in effect from time to time.
References to sections of ERISA shall be construed also to refer to any
successor sections.
"ERISA AFFILIATE" means an entity, whether or not incorporated, which
is under common control with any Credit Party or any of its Subsidiaries within
the meaning of Section 4001(a)(14) of ERISA, or is a member of a group which
includes any Credit Party or any of its Subsidiaries and which is treated as a
single employer under Sections 414(b), (c), (m), or (o) of the Code.
"EVENT OF DEFAULT" has the meaning specified in SECTION 7.01.
"EXCESS CASH FLOW" means, for any period, an amount equal to (a) EBITDA
for such period, minus (b) Capital Expenditures for such period to the extent
permitted under SECTION 6.02(N), except to the extent financed with Indebtedness
(other than Indebtedness under the Loan Documents) or pursuant to a Capital
Lease, minus (c) cash Interest Expense of the Credit Parties for such period,
minus (d) Federal, state and other income or franchise taxes actually paid
during such period, minus (e) payments of principal made in respect of the Loans
during such period, minus (f) voluntary prepayments made during such period with
respect to the Loans minus (g) increases in (or plus any decreases in) Working
Capital during such period, minus (h) non-cash charges for non-current
liabilities added in calculating EBITDA for such period in which the cash
expenditures in
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connection with such non-cash charges are going to be required to be repaid in
the immediate succeeding annual period minus (i) mandatory prepayments made
pursuant to SECTION 2.04(B)(I), (v) or (vii) during such period with respect to
the Loans.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder, as amended, modified,
succeeded or replaced from time to time.
"EXCHANGE AGREEMENT" means the Exchange Agreement, dated as of February
19, 2002, between Parent, ▇▇▇▇▇, ▇▇ Merger Corp., Phonetel, Cherokee, the Davel
Lenders and the PhoneTel Lenders.
"EXISTING DAVEL CREDIT AGREEMENT" means the Credit Agreement, dated as
of December 23, 1998, by and among Davel, the Davel Guarantors, the Existing
Davel Lenders, the Administrative Agent, (as defined therein) and the other
parties thereto, as amended and otherwise modified by the First Amendment to
Credit Agreement and Consent and Waiver dated as of April 8, 1999, the Second
Amendment to Credit Agreement dated as of March 9, 2000, the Third Amendment to
Credit Agreement dated as of June 22, 2000, the Fourth Amendment to Credit
Agreement dated as of September 28, 2000, the Fifth Amendment dated as of
November 29, 2000, the Sixth Amendment to Credit Agreement dated as of March 23,
2001 and the Seventh Amendment to Credit Agreement and Consent and Waiver dated
as of February 19, 2002.
"EXISTING PHONETEL CREDIT AGREEMENT" means the Loan and Security
Agreement, dated as of November 19, 1999 by and among Phonetel, Cherokee, the
financial institutions that are signatories thereto and Foothill Capital Corp.
as agent, as amended by Amendment Number One to Loan and Security Agreement
dated as of December 31, 1999, Amendment Number Two to Loan and Security
Agreement dated November 13, 2000, Amendment Number Three to Loan and Security
Agreement dated as of February 1, 2001, Amendment Number Four to Loan and
Security Agreement dated as of March 1, 2001 Amendment Number Five to Loan and
Security Agreement dated as of April 1, 2001, Amendment Number Six to Loan and
Security Agreement dated as of May 1, 2001, Amendment Number Seven to Loan and
Security Agreement dated as of August 13, 2001, Amendment Number Eight to Loan
and Security Agreement dated as of February 19, 2002, and Amendment Number Nine
to Loan and Security Agreement dated as of May 14, 2002.
"FCC LICENSE" means any of the licenses, permits or other
authorizations issued by the FCC relating to the Payphones owned and operated by
the Credit Parties and all other licenses, authorizations, waivers and permits
required under Communications Law for the Credit Parties to own and operate such
Payphones and to carry on their business.
-9-
"FEDERAL FUNDS RATE" means for any day the rate of interest per annum
equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published by the Federal Reserve Bank of New York
on the Business Day next succeeding such day; provided that (a) if such day is
not a Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Business Day and (b) if no such rate is
so published on such next preceding Business Day, the Federal Funds Rate for
such day shall be the last such rate in effect.
"FIRST TIER FOREIGN SUBSIDIARY" means each Foreign Subsidiary in which
any one or more of the Credit Parties owns directly more than 50%, in the
aggregate, of the Voting Stock of such Foreign Subsidiary.
"FOOTHILL" has the meaning specified in the preamble to this Agreement.
"FOREIGN SUBSIDIARY" means any Subsidiary of any Borrower or any other
Credit Party that is not a Domestic Subsidiary.
"FUNDED DEBT" means, without duplication, the sum of (a) all
outstanding Indebtedness of the Credit Parties and their Subsidiaries for
borrowed money, (b) all purchase money Indebtedness of the Credit Parties and
their Subsidiaries, (c) the principal portion of all obligations of the Credit
Parties and their Subsidiaries under Capital Leases, (d) all obligations,
contingent or otherwise, relative to the face amount of all letters of credit
(other than letters of credit supporting inventory purchases in the ordinary
course of business), whether or not drawn, and banker's acceptances issued for
the account of a Credit Party or its Subsidiaries (it being understood that, to
the extent an undrawn letter of credit supports another obligation consisting of
Indebtedness, in calculating aggregated Indebtedness only such other obligation
shall be included), (e) all Guaranty Obligations of the Credit Parties and their
Subsidiaries with respect to Funded Debt of another Person, (f) all Funded Debt
of another entity to the extent secured by a Lien on any property of the Credit
Parties and their Subsidiaries whether or not such Funded Debt has been assumed
by a Credit Party or any of its Subsidiaries, (g) all Funded Debt of any
partnership or unincorporated joint venture to the extent a Credit Party or one
of its Subsidiaries is legally obligated or has a reasonable expectation of
being liable with respect thereto, net of any assets of such partnership or
joint venture and (h) the principal balance outstanding under any synthetic
lease, tax retention operating lease, off-balance sheet loan or similar
off-balance sheet financing product where such transaction is considered
borrowed money indebtedness for tax purposes but is classified as an operating
lease in accordance with GAAP.
"GAAP" means generally accepted accounting principles in the United
States applied on a consistent basis.
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"GOVERNMENTAL APPROVALS" means all authorizations, consents, approvals,
permits, licenses and exemptions of, registrations and filings with, and reports
to, all Governmental Authorities, including without limitation all FCC Licenses
and State Licenses.
"GOVERNMENTAL AUTHORITY" means any Federal, state, local, provincial or
foreign court, governmental agency, authority, instrumentality or regulatory
body, or any securities exchange or self-regulatory organization.
"GUARANTORS" means Parent, each of the Domestic Subsidiaries of Parent
(other than the Borrowers), and each Additional Credit Party which has executed
a joinder agreement or otherwise become a Guarantor hereunder.
"GUARANTY OBLIGATIONS" means, with respect to any Person, without
duplication, any obligations (other than endorsements in the ordinary course of
business of negotiable instruments for deposit or collection and standard
contractual indemnities entered into in the ordinary course of business)
guaranteeing any Indebtedness of any other Person in any manner, whether direct
or indirect, and including without limitation any obligation, whether or not
contingent, (a) to purchase any such Indebtedness or other obligation or any
property constituting security therefor, (b) to advance or provide funds or
other support for the payment or purchase of such Indebtedness or obligation or
to maintain working capital, solvency or other balance sheet condition of such
other Person (including, without limitation, maintenance agreements, comfort
letters, take or pay arrangements, put agreements or similar agreements or
arrangements) for the benefit of the holder of Indebtedness of such other
Person, (c) to lease or purchase property, securities or services primarily for
the purpose of assuring the owner of such Indebtedness or (d) to otherwise
assure or hold harmless the owner of such Indebtedness or obligation against
loss in respect thereof. The amount of any Guaranty Obligation hereunder shall
(subject to any limitations set forth therein) be deemed to be an amount equal
to the outstanding principal amount (or maximum principal amount, if larger) of
the Indebtedness in respect of which such Guaranty Obligation is made unless
such primary obligation in respect of which such Guaranty Obligation is made is
not stated or determinable, in which case the amount of such Guaranty Obligation
shall be the maximum reasonably anticipated liability in respect thereof
(assuming the guaranteeing person is required to perform).
"HAZARDOUS MATERIALS" means any substance, material or waste defined as
such in or regulated under any Environmental Laws.
"HILL GROUP" means ▇▇▇▇▇ ▇. ▇▇▇▇, his spouse and descendants and any
corporation, partnership, limited liability company, trust or other entity
controlled by ▇▇▇▇▇ ▇. ▇▇▇▇ and wholly-owned beneficially and of record by ▇▇▇▇▇
▇. ▇▇▇▇ and/or his spouse, children, grandchildren, parents, siblings, in-laws,
nephews and/or nieces or a trust established for any of their benefit, provided
such trust is controlled by ▇▇▇▇▇ ▇. ▇▇▇▇ or his representative, principal heir
or legatee.
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"INDEBTEDNESS" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, or upon
which interest payments are customarily made (c) all obligations of such Person
under conditional sale or other title retention agreements relating to property
purchased by such Person to the extent of the value of such property (other than
customary reservations or retentions of title under agreements with suppliers
entered into in the ordinary course of business), (d) all obligations, other
than intercompany items, of such Person issued or assumed as the deferred
purchase price of property or services purchased by such Person which would
appear as liabilities on a balance sheet of such Person, (e) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on, or payable out of
the proceeds of production from, property owned or acquired by such Person,
whether or not the obligations secured thereby have been assumed, (f) all
Guaranty Obligations of such Person, (g) the principal portion of all
obligations of such Person under (i) Capital Leases and (ii) any synthetic
lease, tax retention operating lease, off-balance sheet loan or similar
off-balance sheet financing product of such Person where such transaction is
considered borrowed money indebtedness for tax purposes but is classified as an
operating lease in accordance with GAAP, (h) all net obligations of such Person
in respect of hedging agreements, foreign currency exchange obligations, and
commodity futures agreements, (i) the maximum amount of all performance and
standby letters of credit issued or bankers' acceptances facilities created for
the account of such Person and, without duplication, all drafts drawn thereunder
(to the extent unreimbursed), (j) all preferred stock issued by such Person and
required by the terms thereof to be redeemed, or for which mandatory sinking
fund payments are due by a fixed date, (k) the aggregate amount of uncollected
accounts receivable of such Person subject at such time to a sale of receivables
(or similar transaction) regardless of whether such transaction is effected
without recourse to such Person or in a manner that would not be reflected on
the balance sheet of such Person in accordance with GAAP, and (l) all
obligations of such Person to repurchase any securities which repurchase
obligation is related to the issuance thereof, including, without limitation,
obligations commonly known as residual equity appreciation potential shares. The
Indebtedness of any Person shall include the Indebtedness of any partnership or
unincorporated joint venture in which such Person is legally obligated.
"INTERCREDITOR AGREEMENT" means the Intercreditor and Subordination
Agreement, dated as of February 19, 2002, by and among the Senior Lenders, the
Davel Lenders, the Administrative Agent (as defined in the Existing Davel Credit
Agreement), the PhoneTel Lenders, and the Agent (as defined in the Existing
PhoneTel Credit Agreement), and acknowledged and agreed by the Credit Parties.
"INTEREST EXPENSE" means, for any period, with respect to any Person,
all interest expense (paid or accrued to be paid), including the interest
component under Capital Leases, of such Person and its Subsidiaries determined
on a consolidated basis in accordance with GAAP.
"INVESTMENT" in any Person means (a) the acquisition (whether for cash,
property, services, assumption of Indebtedness, securities or otherwise) of
assets, shares of Capital Stock, bonds, notes, debentures, partnership, joint
ventures or other ownership interests or other securities
-12-
of such other Person or (b) any deposit with, or advance, loan or other
extension of credit to, such Person (other than deposits made in connection with
the purchase of equipment or other assets or to secure the performance of leases
in the ordinary course of business) or (c) any other capital contribution to or
investment in such Person, including, without limitation, any Guaranty
Obligation (including any support for a Letter of Credit issued on behalf of
such Person) incurred for the benefit of such Person.
"JOINDER AGREEMENT" means a Joinder Agreement substantially in the form
of EXHIBIT 6.01(K).
"LENDER" has the meaning specified in the preamble to this Agreement.
"LIEN" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, security interest, encumbrance, lien (statutory or otherwise),
preference, priority or charge of any kind, including, without limitation, any
agreement to give any of the foregoing, any conditional sale or other title
retention agreement, and any lease in the nature thereof.
"LOAN PERCENTAGE" means, with respect to each Lender, the percentage
identified as its Loan Percentage on SCHEDULE 1.01(C), as such percentage may be
modified in connection with any assignment made in accordance with the
provisions of SECTION 9.04.
"LOAN DOCUMENTS" means this Agreement, the Notes, if any, the Security
Agreement and the Intercreditor Agreement.
"LOANS" means the loans made by the Lenders to the Borrowers pursuant
to Article II.
"LOCATION CONTRACT" means an agreement between a Credit Party and an
owner or operator of a facility pursuant to which such Credit Party has
installed one or more Payphones at such facility. All Location Contracts with
the same owner or operator (or any Affiliates or franchises controlled by such
owner or operator thereof) shall be considered to be one Location Contract.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
operations, business, assets or financial condition of the Credit Parties and
their Subsidiaries, taken as a whole, (b) the ability of any of the Credit
Parties to perform any of its obligations under this Agreement or any of the
other Loan Documents to which it is a party, or (c) the validity or
enforceability of this Agreement or any of the other Loan Documents or any of
the rights and remedies of the Lenders hereunder or thereunder taken as a whole,
(d) the priority of the Agent's Liens with respect to the Collateral as a result
of the action or failure to act of any Credit Party or
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(e) the value of the Collateral or the amount the Lenders would be likely to
receive after giving consideration to delays in payment and costs of enforcement
as a result of the liquidation of the Collateral.
"MATERIAL FIRST TIER FOREIGN SUBSIDIARY" means any First Tier Foreign
Subsidiary that, together with its Subsidiaries, owns assets in excess of
$1,000,000.
"MATURITY DATE" means December 31, 2005.
"MERGER" means the business combination, debt exchange and related
transactions contemplated by the Merger Agreements and the Exchange Agreement.
"MERGER AGREEMENTS" means the Agreement and Plan of Reorganization and
Merger dated February 19, 2002, by and among Parent, ▇▇▇▇▇, ▇▇ Merger Corp., PT
Merger Corp. and PhoneTel and all other agreements, instruments and other
documents regarding the Merger executed and delivered by the Credit Parties
pursuant thereto.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc., or any successor or
assignee of the business of such company in the business of rating securities.
"MULTIEMPLOYER PLAN" means a Plan covered by Title IV of ERISA which is
a multiemployer plan as defined in Section 3(37) or 4001(a)(3) of ERISA.
"MULTIPLE EMPLOYER PLAN" means a Single Employer Plan to which any
Credit Party or any of its Subsidiaries or any ERISA Affiliate and at least one
employer other than a Credit Party or any of its Subsidiaries or any ERISA
Affiliate are contributing sponsors.
"NET CASH PROCEEDS" means the aggregate cash proceeds (including,
without limitation, insurance and condemnation proceeds) received from an Asset
Disposition, an Equity Issuance or a Debt Issuance net of (a) actual transaction
costs payable to third parties, (b) taxes paid or a good faith estimate of the
taxes payable with respect to such proceeds, and (c) in connection with an Asset
Disposition only, (i) any reserve for adjustment of the sale price of such asset
or assets established in accordance with GAAP; provided that any subsequent
reversal or reduction of such reserves shall constitute additional Net Cash
Proceeds, and (ii) any amounts paid to holders of existing Permitted Liens on
any such assets to satisfy and discharge such Permitted Liens.
"NET INCOME" means, for any period, with respect to any Person, the net
income after taxes for such period of such Person and its Subsidiaries,
determined on a consolidated basis in accordance with GAAP.
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"NOTES" means any promissory notes representing or evidencing the
Loans, including any Registered Note.
"OBLIGATIONS" means any and all indebtedness, obligations and
liabilities of the Borrowers to the Lenders (whether now existing or hereafter
arising, voluntary or involuntary, whether jointly or not jointly owned with
others, direct or indirect, absolute or contingent, liquidated or unliquidated,
and whether or not from time to time decreased or extinguished and later
increased, created or incurred) arising out of or related to any or all of the
Loan Documents.
"PAYPHONE" means a microprocessor-based, non-cellular telephone through
which a user may initiate a call payable only by coins or by credit card,
collect or third-number billing procedures, which has been installed for
operation and which is owned by a Credit Party.
"PARENT" has the meaning specified in the preamble to this Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA and any successor thereto.
"PERMITTED INVESTMENTS" means Investments which are (a) cash or Cash
Equivalents, (b) accounts receivable created, acquired or made in the ordinary
course of business and payable or dischargeable in accordance with customary
trade terms, (c) inventory, raw materials and general intangibles acquired in
the ordinary course of business, (d) Investments by a Credit Party in or to
another Credit Party and Investments by a Foreign Subsidiary in or to another
Foreign Subsidiary, (e) Investments in Capital Expenditures to the extent
permitted under SECTION 6.02(N), (f) investments acquired in the
bankruptcy/reorganization of suppliers or customers of a Credit Party, and (g)
Investments existing as of the Closing Date and set forth on Schedule 1.01(d).
"PERMITTED LIENS" means (a) Liens securing Obligations, (b) Liens for
taxes not yet due or Liens for taxes being contested in good faith by
appropriate proceedings for which adequate reserves determined in accordance
with GAAP have been established (and as to which the property subject to any
such Lien is not yet subject to foreclosure, sale, collection, levy or loss on
account thereof), (c) Liens in respect of property imposed by law arising in the
ordinary course of business such as materialmen's, mechanics', warehousemen's,
carrier's, landlords' and other nonconsensual statutory Liens which are not yet
due and payable or which are being contested in good faith by appropriate
proceedings for which adequate reserves determined in accordance with GAAP have
been established (and as to which the property subject to any such Lien is not
yet subject to foreclosure, sale or loss on account thereof), (d) pledges or
deposits made in the ordinary course of business to secure payment of worker's
compensation insurance, unemployment insurance, pensions or social security
programs, (e) Liens arising from good faith deposits in connection with or to
secure performance of (i) tenders, bids, leases, government contracts,
performance and return-of-money bonds and other similar obligations or (ii)
leases of real property, in each case incurred in the ordinary course of
business (other than obligations in respect of the payment of borrowed money),
-15-
(f) Liens arising from good faith deposits in connection with or to secure
performance of statutory obligations and surety and appeal bonds, (g) easements,
rights-of-way, restrictions (including zoning restrictions), matters of plat,
minor defects or irregularities in title and other similar charges or
encumbrances not, in any material respect, impairing the use of the encumbered
property for its intended purposes, (h) judgment Liens that would not constitute
an Event of Default, (i) Liens in connection with Indebtedness permitted by
SECTION 6.02(A)(III), (j) Liens arising by virtue of any statutory or common law
provision relating to banker's liens, rights of setoff or similar rights as to
deposit accounts or other funds maintained with a creditor depository
institution, (k) [intentionally omitted] (l) Liens existing on the date hereof
and identified on SCHEDULE 1.01(E); PROVIDED that, no such Lien shall extend to
any property other than the property subject thereto on the Closing Date, (m)
any precautionary filings of financing statements under the UCC made in relation
to leases of equipment which leases are otherwise permitted by this Agreement,
(n) Liens of a collecting bank arising under Section 4-210 of the UCC on items
in the course of collection, (o) any interest of a licensor, licensee, lessor,
lessee, sublessor or sublessee in the ordinary course to the extent such
interest could be characterized as a Lien, and (p) Liens securing the Senior
Debt.
"PERSON" means any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust, fund or other
enterprise (whether or not incorporated), or any Governmental Authority.
"PLAN" means any defined employee plan (as defined in Section 3(3) of
ERISA) which is covered by ERISA and with respect to which any Credit Party or
any of its Subsidiaries or any ERISA Affiliate is (or, if such plan were
terminated at such time, would under Section 4069 of ERISA be deemed to be) an
"employer" within the meaning of Section 3(5) of ERISA.
"PHONETEL" has the meaning specified in the preamble to this Agreement.
"PHONETEL DEBT FOR EQUITY EXCHANGE" has the meaning specified in the
recitals to this Agreement.
"PHONETEL LENDERS" has the meaning specified in the Exchange Agreement.
"PROPERTY" means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
"REAL PROPERTIES" means the real properties that the Credit Parties may
own, operate or lease (as lessee or sublessee) from third parties from time to
time.
"REDUCED DAVEL DEBT" means an amount of Indebtedness owing by Davel to
the Davel Lenders equal to $63,500,000.
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"REDUCED PHONETEL DEBT" means an amount of Indebtedness owing by
PhoneTel and Cherokee to the PhoneTel Lenders equal to $36,500,000.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of July 24, 2002, among Parent and the Lenders.
"REGISTER" has the meaning specified in SECTION 2.07(D).
"REGISTERED LOAN" has the meaning specified in SECTION 2.07(D).
"REGISTERED NOTE" has the meaning specified in SECTION 2.07(D).
"REGULATION D, U, OR X" means Regulation D, U or X, respectively, of
the Board of Governors of the Federal Reserve System as from time to time in
effect and any successor to all or a portion thereof.
"REGULATORY RECEIPTS" means any and all payments (net of reasonable
costs of recovery not reflected in the Budget) received by any of the Credit
Parties and their Subsidiaries from any judgment or settlement with respect to,
or otherwise in connection with those regulatory actions commonly referred to as
the Dial-Around Compensation Recovery Proceedings, the New Service Test
Proceedings and the End User Common Line Charge Proceedings and any other
similar proceeding resulting in payments to any of the Credit Parties and their
Subsidiaries which are not reflected in the Budget.
"REGULATORY RECEIPTS ACCOUNT" has the meaning specified in SECTION
2.04(B).
"REPORT" has the meaning specified in SECTION 8.17(A).
"REPORTABLE EVENT" means a "reportable event" as defined in Section
4043 of ERISA with respect to which the 30-day notice requirements to the PBGC
have not been waived.
"REQUIRED LENDERS" means two or more Lenders whose aggregate Loan
Percentages are equal to at least 66 2/3%.
"REQUIREMENT OF LAW" means, as to any Person, the articles or
certificate of incorporation and by-laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or final,
non-appealable determination of an arbitrator or a court or
-17-
other Governmental Authority, in each case applicable to or binding upon such
Person or to which any of its material property is subject.
"RESPONSIBLE OFFICER" means the chief executive officer, president,
chief financial officer, treasurer, or any other senior officer of a Credit
Party designated as such to the Lenders by such Credit Party.
"S&P" means Standard & Poor's Rating Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. or any successor or assignee of the business of such
division in the business of rating securities.
"SCHEDULED FUNDED DEBT PAYMENTS" means, as of the end of each fiscal
quarter of the Borrowers, the sum, without duplication, of all scheduled
payments of principal on Funded Debt for the applicable period ending on such
date (including the principal component of payments due on Capital Leases during
the applicable period ending on such date), it being understood that Scheduled
Funded Debt Payments shall not include voluntary prepayments or the mandatory
prepayments required pursuant to SECTION 2.04.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"SECURITY AGREEMENT" means the Security Agreement dated as of July 24,
2002 made by the Credit Parties to the Agent.
"SENIOR DEBT" means the Indebtedness owing to the Senior Lenders under
the Senior Debt Agreements.
"SENIOR DEBT AGREEMENTS" means the Credit Agreement, dated as of
February 19, 2002, among ▇▇▇▇▇▇▇▇▇ L.L.C. and ARK CLO 2000-1, Limited, and the
Credit Parties and the other loan documents ancillary thereto, as the same may
be amended, restated, or supplemented from time to time.
"SENIOR LENDERS" means ▇▇▇▇▇▇▇▇▇ L.L.C., ARK CLO 2000-1, Limited, and
ARK Investment Partners II, L.P. and their assignees.
"SERVICING FEE" has the meaning specified in SECTION 2.03(C).
"SINGLE EMPLOYER PLAN" means any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
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"STATE LICENSE" means any of the licenses, permits or other
authorizations issued by any state relating to the Payphones owned and operated
by the Credit Parties and all other licenses, authorizations, waivers, and
permits required under state law for the Credit Parties to own and operate such
Payphones and to carry on their business.
"SUBSIDIARY" means, as to any Person, (a) any corporation more than 50%
of whose stock of any class or classes having by the terms thereof ordinary
voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time, any class or classes of such
corporation shall have or might have voting power by reason of the happening of
any contingency) is at the time owned by such Person directly or indirectly
through Subsidiaries, and (b) any partnership, association, joint venture or
other entity in which such person directly or indirectly through Subsidiaries
has more than a 50% equity interest at any time.
"TERM LOAN A" means the Loan described in SECTION 2.02.
"TERM LOAN B" means the Loan described in SECTION 2.02.
"TERM LOANS" means, individually and collectively, Term Loan A and Term
Loan B.
"TERMINATION EVENT" means (a) with respect to any Single Employer Plan,
the occurrence of a Reportable Event or the substantial cessation of operations
(within the meaning of Section 4062(e) of ERISA); (b) the withdrawal of any
Credit Party or any of its Subsidiaries or any ERISA Affiliate from a Multiple
Employer Plan during a plan year in which it was a substantial employer (as such
term is defined in Section 4001(a)(2) of ERISA), or the termination of a
Multiple Employer Plan; (c) the distribution of a notice of intent to terminate
or the actual termination of a Plan pursuant to Section 4041(a)(2) or 4041A of
ERISA; (d) the institution of proceedings to terminate or the actual termination
of a Plan by the PBGC under Section 4042 of ERISA; (e) any event or condition
which is reasonably expected to constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any Plan;
or (f) the complete or partial withdrawal of any Credit Party or any of its
Subsidiaries or any ERISA Affiliate from a Multiemployer Plan.
"TOTAL ASSETS" means, with respect to any Person, all items which in
accordance with GAAP would be classified as assets of such Person and its
Subsidiaries on a consolidated basis.
"VOTING STOCK" of a corporation means all classes of the capital stock
of such corporation then outstanding and normally entitled to vote in the
election of directors.
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"WORKING CAPITAL" means, with respect to any Person, the excess of
current assets (excluding cash and Cash Equivalents and deferred taxes) of such
Person and its Subsidiaries on a consolidated basis over current liabilities
(excluding the current portion of Funded Debt and deferred taxes) of such Person
and its Subsidiaries on a consolidated basis, as determined in accordance with
GAAP.
SECTION 1.02 COMPUTATION OF TIME PERIODS. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding."
SECTION 1.03 TERMS GENERALLY. Unless the context requires otherwise:
(a) any definition of or reference to any agreement, instrument or
other document herein shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or
otherwise modified (subject to any restrictions on such amendments, supplements
or modifications set forth herein);
(b) any reference herein to any Person shall be construed to
include such Person's successors and assigns;
(c) the words "herein", "hereof" and "hereunder", and words of
similar import, shall be construed to refer to this Agreement in its entirety
and not to any particular provision hereof; and
(d) all references herein to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and Exhibits
and Schedules to, this Agreement.
ARTICLE II - AMOUNT AND TERMS OF THE LOANS
SECTION 2.01 [Intentionally omitted]
SECTION 2.02 CONVERSION OF EXISTING INDEBTEDNESS; TERM LOANS. On the
Closing Date, the Reduced Davel Debt under the Existing Davel Credit Agreement
and the Reduced PhoneTel Debt under the Existing Phonetel Credit Agreement,
subject to the effect of the Davel Debt for Equity Exchange and the PhoneTel
Debt for Equity Exchange set forth in the Exchange Agreement, shall be deemed to
be consolidated and converted hereunder into a term loan in the aggregate
principal amount of $50,000,000 ("TERM LOAN A") and a term loan in the aggregate
principal amount of $50,000,000 ("TERM LOAN B"), it being understood that no
repayment of the Reduced Davel Debt or the Reduced PhoneTel Debt is being
effected hereby, but merely a consolidation, amendment, restatement, and renewal
in accordance with the terms hereof. Effective on and after the Closing Date,
the terms and provisions of the Existing PhoneTel Credit Agreement and the
Existing Davel Credit Agreement shall be deemed to be replaced in their entirety
by the terms and provisions of this Agreement.
SECTION 2.03 INTEREST; FEES, AND REPAYMENT.
(a) INTEREST. Interest shall accrue on the aggregate unpaid
principal amount of the Loans from the Closing Date until such aggregate
principal amount is paid in full
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at the rate of 10% per annum. With respect to Term Loan A, interest shall be
payable in kind through July 31, 2003, and, during such period, shall be added
to the principal amount of Term Loan A on a monthly basis and thereafter treated
as principal for all purposes (including the accrual of interest thereon).
Commencing on August 1, 2003, interest on Term Loan A shall be payable as set
forth in SECTION 2.03(E). With respect to Term Loan B, interest shall be payable
in kind and shall be added to the principal amount of Term Loan B on a monthly
basis and thereafter treated as principal for all purposes (including the
accrual of interest thereon). Upon the occurrence and during the continuance of
an Event of Default, any principal of and, to the fullest extent permitted by
law, interest on the Loans and all other amounts payable hereunder shall bear
interest, payable on demand, at an interest rate per annum equal at all times to
14%.
(b) CLOSING FEE. The Borrowers shall pay to the Agent, for
the ratable benefit of the Lenders, on the Closing Date, a fee in the amount of
$1,000,000 (the "Closing Fee"). The Closing Fee shall be paid in the form of
interest payable in kind and added to the principal balance of Term Loan B as of
the Closing Date. Thereafter, such amount shall be treated as principal for all
purposes (including the accrual of interest thereon).
(c) SERVICING FEE. The Borrowers shall pay to the Agent in
cash, for the sole and separate account of the Agent, a monthly fee of $30,000
(the "Servicing Fee"). The Servicing Fee shall be due and payable monthly in
advance for each month or portion thereof in which any Obligations are
outstanding on either of the Term Loans (including after the Maturity Date).
(d) AUDIT, APPRAISAL, AND VALUATION CHARGES. The Borrowers
shall pay to the Agent, for the sole and separate account of Agent, audit,
appraisal, and valuation fees and charges as follows, (i) a fee of $750 per day,
per auditor, plus out-of-pocket expenses for each financial audit of a Borrower
performed by personnel employed by the Agent, (ii) if implemented, a one time
charge of $3,000, plus out-of-pocket expenses for the establishment of
electronic collateral reporting systems, (iii) a fee of $1,500 per day per
appraiser, plus out-of-pocket expenses, for each appraisal of the Collateral
performed by personnel employed by the Agent, and (iv) the actual charges paid
or incurred by the Agent if it elects to employ the services of one or more
third Persons to perform financial audits of the Borrowers, to appraise the
Collateral, or any portion thereof, or to assess a Borrower's business
valuation.
(e) SCHEDULED REPAYMENT OF TERM LOAN A. The Borrowers shall
make monthly payments in respect of principal and interest on Term Loan A to the
Lenders in accordance with the schedule set forth below. All such payments shall
be applied first to interest and fees owing, with the balance to principal. On
the Maturity Date, the unpaid balance of Term Loan A and all accrued and unpaid
interest shall be due and payable in full.
PAYMENT DATE PAYMENT AMOUNT
------------ --------------
August 1, 2003 $1,250,000
September 1, 2003 $1,250,000
October 1, 2003 $1,250,000
November 1, 2003 $1,250,000
December 1, 2003 $1,250,000
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January 1, 2004 $1,250,000
February 1, 2004 $1,250,000
March 1, 2004 $1,250,000
April 1, 2004 $1,250,000
May 1, 2004 $1,250,000
June 1, 2004 $1,250,000
July 1, 2004 $1,250,000
August 1, 2004 $1,250,000
September 1, 2004 $1,250,000
October 1, 2004 $1,250,000
November 1, 2004 $1,250,000
December 1, 2004 $1,250,000
January 1, 2005 $1,500,000
February 1, 2005 $1,500,000
March 1, 2005 $1,500,000
April 1, 2005 $1,500,000
May 1, 2005 $1,500,000
June 1, 2005 $1,500,000
July 1, 2005 $1,500,000
August 1, 2005 $1,500,000
September 1, 2005 $1,500,000
October 1, 2005 $1,500,000
November 1, 2005 $1,500,000
December 1, 2005 $1,500,000
(f) REPAYMENT OF TERM LOAN B. On the Maturity Date, the
unpaid balance of Term Loan B and all accrued and unpaid interest shall be due
and payable in full.
SECTION 2.04 PREPAYMENTS.
(a) VOLUNTARY PREPAYMENTS. The Borrowers may, upon at least
one day's notice to the Lenders stating the proposed date and principal amount
of the prepayment, and if such notice is given the Borrowers shall, prepay the
outstanding principal amount of the Loans in whole or in part, with accrued
interest to the date of such prepayment on the amount prepaid; PROVIDED that
each partial prepayment shall be in a principal amount of not less than $500,000
or an integral multiple of $250,000 in excess thereof.
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(b) MANDATORY PREPAYMENTS. After payment in full of the
Senior Debt, the Borrowers shall make the following mandatory prepayments to the
Lenders which will be applied to amounts owing under Term Loan B until it is
paid in full and then to amounts owing under Term Loan A. Mandatory prepayments
shall be applied first to accrued interest and then to principal. Mandatory
prepayments that are applied to Term Loan A shall be applied in inverse order of
payment date.
(i) REGULATORY RECEIPTS. Immediately upon receipt by a Credit
Party or any of its Subsidiaries of any Regulatory Receipts that results in the
total amount of Regulatory Receipts received by the Credit Parties and their
Subsidiaries in any month to exceed 120% of the amount set forth for such
category in the Budget for such month, the Borrowers shall deposit an amount
equal to such excess in a deposit account maintained by the Agent for such
purpose with a commercial bank designated by the Agent to the Borrowers (the
"Regulatory Receipts Account"). Promptly after the last day of each of the
second and fourth fiscal quarters of each fiscal year of the Borrowers, the
Agent may, and upon the request of the Borrowers the Agent shall, withdraw all
amounts then in the Regulatory Receipts Account that in the aggregate exceed
120% of the amount set forth for such category in the Budget for such two
quarter period and apply such amounts as a prepayment of the Loans.
(ii) ASSET SALES. Immediately upon receipt by a Credit Party or
any of its Subsidiaries of proceeds from any Asset Disposition, the Borrowers
shall forward an amount equal to 100% of the Net Cash Proceeds of such Asset
Disposition to the Lenders as a prepayment of the Loans.
(iii) ISSUANCES OF EQUITY. Immediately upon receipt by a Credit
Party or any of its Subsidiaries of proceeds from any Equity Issuance, the
Borrowers shall forward 75% of the Net Cash Proceeds of such Equity Issuance to
the Lenders as prepayment of the Loans.
(iv) ISSUANCE OF DEBT. Immediately upon receipt by a Credit
Party or any of its Subsidiaries of proceeds from any Debt Issuance, the
Borrowers shall forward 100% of the Net Cash Proceeds of such Debt Issuance to
the Lenders as a prepayment of the Loans.
(v) MONTHLY POSITIVE NET CASH. Within thirty days following the
end of each calendar month for which EBITDA exceeds 120% of the projected EBITDA
set forth in the Budget for such calendar month, Borrowers shall make a
prepayment of the Loans in an amount equal to the excess, if any, of (A) Cash In
Bank of the Credit Parties and their Subsidiaries as of the last day of such
calendar month, minus (B) the sum of (1) $1,500,000 and (2) without duplication
to the extent deducted in determining Cash In Bank, the aggregate amount of
checks drawn by Credit Parties and the Subsidiaries as of the last day of such
calendar month but not yet then debited to the deposit accounts on which such
checks were drawn, for the payment of each of Borrowers' and their respective
Subsidiaries' liabilities and expenses in accordance with the Budget (to the
extent payment thereof is not prohibited by this Agreement or any other Loan
Document).
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(vi) EXCESS CASH FLOW. Within 30 days after the end of each
fiscal quarter of each fiscal year of the Credit Parties, the Borrowers shall
make a prepayment of the Loans in an amount equal to 50% of the Excess Cash Flow
with respect to the immediately preceding fiscal quarter.
(vii) EXTRAORDINARY RECEIPTS, ETC. Immediately upon receipt by
a Credit Party or any of its Subsidiaries of any cash not in the ordinary course
of business and not otherwise included in any of the foregoing subsections of
this SECTION 2.04, including, without limitation, tax refunds, indemnity
payments, deposits and other payments with respect to general intangibles, but
excluding Regulatory Receipts and the proceeds of insurance otherwise governed
by the Security Agreement (collectively, "Extraordinary Receipts"), the
Borrowers shall forward 100% of such cash Extraordinary Receipts to the Lenders
as a prepayment of the Loans; PROVIDED, HOWEVER, that so long as no Default
shall have occurred and be continuing, the Borrowers may retain and use such
Extraordinary Receipts for general working capital purposes constituting up to
(A) $1,000,000 of New York State tax refunds and (B) up to $50,000 of all other
Extraordinary Receipts.
SECTION 2.05 PAYMENTS AND COMPUTATIONS
(a) Except as otherwise expressly provided herein, all
payments by Borrowers shall be made to Agent's Account for the account of the
Lenders and shall be made in immediately available funds, no later than 11:00
a.m. (California time) on the date specified herein. Whenever any payment
hereunder shall be stated to be due on a day other than a Business Day, such
payment shall be made on the next succeeding Business Day, and such extension of
time shall in such case be included in the computation of interest. Except as
provided in SECTION 7.03, all payments and prepayments of the Term Loans shall
be made to the Lenders on a pro rata basis in accordance with their respective
Loan Percentages.
(b) Unless Agent receives notice from Borrowers prior to the
date on which any payment is due to the Lenders that Borrowers will not make
such payment in full as and when required, Agent may assume that Borrowers have
made (or will make) such payment in full to Agent on such date in immediately
available funds and Agent may (but shall not be so required), in reliance upon
such assumption, distribute to each Lender on such due date an amount equal to
the amount then due such Lender. If and to the extent Borrowers do not make such
payment in full to Agent on the date when due, each Lender severally shall repay
to Agent on demand such amount distributed to such Lender, together with
interest thereon at the Defaulting Lender Rate for each day from the date such
amount is distributed to such Lender until the date repaid.
(c) All computations of interest shall be made by the
Lenders on the basis of a year of 360 days for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such interest is payable.
(d) The receipt of any payment item by Agent shall not be
considered a payment on account unless such payment item is a wire transfer of
immediately available federal funds made to the Agent's Account or unless and
until such payment item is honored when presented for payment. Should any
payment item not be honored when presented for
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payment, then Borrowers shall be deemed not to have made such payment and
interest shall be calculated accordingly. Anything to the contrary contained
herein notwithstanding, any payment item shall be deemed received by Agent only
if it is received into the Agent's Account on a Business Day on or before 11:00
a.m. (California time). If any payment item is received into the Agent's Account
on a non-Business Day or after 11:00 a.m. (California time) on a Business Day
(except in cases where the payment item would have been received by Agent prior
to 11:00 a.m. if not for delays arising within Agent's control, it shall be
deemed to have been received by Agent as of the opening of business on the
immediately following Business Day and any applicable interest or fee shall
continue to accrue until such following Business Day. From and after the Closing
Date, Agent shall be entitled to charge Borrowers for 2 Business Days of
`clearance' or `float' at the rate applicable to the Term Loans under SECTION
2.03(A) after Agent establishes a collection system pursuant to SECTION 2.08, on
all Collections that are received by Borrowers. This across-the-board 2 Business
Day clearance or float charge on all Collections shall be in cash and is
acknowledged by the parties to constitute an integral aspect of the pricing of
the financing of Borrowers and shall apply irrespective of whether there are any
outstanding monetary Obligations; the effect of such clearance or float charge
being the equivalent of charging 2 Business Days of interest on such
Collections. The parties acknowledge and agree that the economic benefit of the
foregoing provisions shall be for the exclusive benefit of Agent.
SECTION 2.06 EVIDENCE OF INDEBTEDNESS; REGISTERED NOTES.
(a) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the Indebtedness of the Borrowers to
such Lender resulting from each Loan made by such Lender, including the amounts
of principal and interest payable and paid to such Lender from time to time
hereunder.
(b) The entries made in the accounts maintained pursuant to
paragraph (a) of this Section shall be PRIMA FACIE evidence of the existence and
amounts of the obligations recorded therein and, absent manifest error, prima
facie evidence of the accuracy of the information recorded therein; PROVIDED
that the failure of any Lender to maintain such accounts or any error therein
shall not in any manner affect the obligation of the Borrowers to repay the
Loans in accordance with the terms of this Agreement.
(c) Any Lender may request that Loans made by it be
evidenced by a Note. In such event, each of the Borrowers shall execute and
deliver to such Lender a Note payable to the order of such Lender (or, if
requested by such Lender, to such Lender and its registered assigns) in a form
furnished by the Agent and reasonably acceptable to the Borrowers. Thereafter,
the Loans evidenced by such Note and interest thereon shall at all times
(including after assignment pursuant to SECTION 9.04) be represented by one or
more Notes in such form payable to the order of the payee named therein (or, if
such Note is a Registered Note, to such payee and its registered assigns).
(d) Each of the Borrowers agrees to record on a register
maintained by it (the "REGISTER") each Loan and each repayment of principal of
and each payment of interest on each Loan. Each Loan recorded on the Register (a
"REGISTERED LOAN") may, at the election of any Lender, be evidenced by a Note (a
"REGISTERED NOTE"). Upon the registration of any Loan, any Note (other than a
Registered Note) evidencing the same shall be null and void and shall be
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promptly returned to such Borrower. Each of the Borrowers agrees at the request
of any Lender, to execute and deliver to such Lender a Registered Note to
evidence such Registered Loan, payable to such Lender and otherwise duly
completed. Once recorded on the Register, the Loan or Loans evidenced by such
Registered Note may not be removed from the Register so long as it remains
outstanding, and a Registered Note may not be exchanged for a Note that is not a
Registered Note. An assignment pursuant to SECTION 9.04(B) of a Registered Note
may be effected only by the surrender of the Registered Note by the Assignor to
the Borrower issuing such Registered Note and either the reissuance of the
Registered Note to the assignee or by the issuance of a new Registered Note to
the assignee.
SECTION 2.07 JOINT AND SEVERAL LIABILITY OF BORROWERS.
(a) Each of the Borrowers, in consideration of the financial
accommodations to be provided by the Lenders under this Agreement, for the
mutual benefit, directly and indirectly, of each of the Borrowers and in
consideration of the undertakings of the other Borrowers to accept joint and
several liability for the Obligations, jointly and severally, hereby irrevocably
and unconditionally accepts, not merely as a surety but also as a co-debtor,
joint and several liability with the other Borrowers, with respect to the
payment and performance of all of the Obligations (including, without
limitation, any Obligations arising under this SECTION 2.07), it being the
intention of the parties hereto that all the Obligations shall be the joint and
several obligations of each Borrower without preferences or distinction among
them.
(b) If and to the extent that any Borrower shall fail to
make any payment with respect to any of the Obligations as and when due or to
perform any of the Obligations in accordance with the terms thereof, then in
each such event the other Borrowers will make such payment with respect to, or
perform, such Obligation.
(c) The Obligations of each Borrower under the provisions of
this SECTION 2.07 constitute the absolute and unconditional, full recourse
Obligations of each Borrower enforceable against each such Borrower to the full
extent of its properties and assets, irrespective of the validity, regularity or
enforceability of this Agreement or any other circumstances whatsoever.
(d) Except as otherwise expressly provided in this
Agreement, each Borrower hereby waives notice of acceptance of its joint and
several liability, notice of the occurrence of any Default or Event of Default,
notice of any demand for any payment under this Agreement, notice of any action
at any time taken or omitted by Lenders under or in respect of any of the
Obligations, any requirement of diligence or to mitigate damages and, generally,
to the extent permitted by applicable law, all demands, notices and other
formalities of every kind in connection with this Agreement (except as otherwise
provided in this Agreement). Each Borrower hereby assents to, and waives notice
of, any extension or postponement of the time for the payment of any of the
Obligations, the acceptance of any payment of any of the Obligations, the
acceptance of any partial payment thereon, any waiver, consent or other action
or acquiescence by Lenders at any time or times in respect of any default by any
Borrower in the performance or satisfaction of any term, covenant, condition or
provision of this Agreement, any and all other indulgences whatsoever by Lenders
in respect of any of the Obligations, and the taking, addition, substitution or
release, in whole or in part, at any time or times, of any security
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for any of the Obligations or the addition, substitution or release, in whole or
in part, of any Borrower. Without limiting the generality of the foregoing, each
Borrower assents to any other action or delay in acting or failure to act on the
part of any Lender with respect to the failure by any Borrower to comply with
any of its respective Obligations, including, without limitation, any failure
strictly or diligently to assert any right or to pursue any remedy or to comply
fully with applicable laws or regulations thereunder, which might, but for the
provisions of this SECTION 2.07 afford grounds for terminating, discharging or
relieving any Borrower, in whole or in part, from any of its Obligations under
this SECTION 2.07, it being the intention of each Borrower that, so long as any
of the Obligations hereunder remain unsatisfied, the Obligations of such
Borrower under this SECTION 2.07 shall not be discharged except by performance
and then only to the extent of such performance. The Obligations of each
Borrower under this SECTION 2.07 shall not be diminished or rendered
unenforceable by any winding up, reorganization, arrangement, liquidation,
reconstruction or similar proceeding with respect to any Borrower or any Lender.
The joint and several liability of the Borrowers hereunder shall continue in
full force and effect notwithstanding any absorption, merger, amalgamation or
any other change whatsoever in the name, constitution or place of formation of
any of the Borrowers or any Lender.
(e) The provisions of this SECTION 2.07 are made for the
benefit of the Lenders and their respective successors and assigns, and may be
enforced by them from time to time against any or all Borrowers as often as
occasion therefor may arise and without requirement on the part of any such
Lender, successor or assign first to marshal any of its or their claims or to
exercise any of its or their rights against any Borrower or to exhaust any
remedies available to it or them against any Borrower or to resort to any other
source or means of obtaining payment of any of the Obligations hereunder or to
elect any other remedy. The provisions of this SECTION 2.07 shall remain in
effect until all of the Obligations shall have been paid in full or otherwise
fully satisfied. If at any time, any payment, or any part thereof, made in
respect of any of the Obligations, is rescinded or must otherwise be restored or
returned by any Lender upon the insolvency, bankruptcy or reorganization of any
Borrower, or otherwise, the provisions of this SECTION 2.07 will forthwith be
reinstated in effect, as though such payment had not been made.
(f) Each Borrower hereby agrees that, after the occurrence
and during the continuance of any Default or Event of Default, the payment of
any amounts due with respect to the indebtedness owing by any Borrower to any
other Borrower is hereby subordinated to the prior payment in full in cash of
the Obligations unless such subordination is waived by Required Lenders. Each
Borrower hereby agrees that after the occurrence and during the continuance of
any Default or Event of Default, such Borrower will not demand, ▇▇▇ for or
otherwise attempt to collect any indebtedness of any other Borrower owing to
such Borrower until the Obligations shall have been paid in full in cash. If,
notwithstanding the foregoing sentence, such Borrower shall collect, enforce or
receive any amounts in respect of such indebtedness, such amounts shall be
collected, enforced and received by such Borrower as trustee for Lenders, and
such Borrower shall deliver any such amounts to Lenders for application to the
Obligations in accordance with SECTION 2.04(B).
(g) The Borrowers agree among themselves that, in connection
with payments made hereunder, each Borrower shall have contribution rights
against the other
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Borrowers as permitted under applicable law. Such contribution rights shall be
subordinate and subject in right of payment to the obligations of the Borrowers
under the Loan Documents, unless such subordination is waived by Required
Lenders, and no Borrower shall exercise such rights of contribution until all
Obligations (other than any such obligations which by the terms thereof are
stated to survive termination of the Loan Documents) have been paid in full.
SECTION 2.08 CASH MANAGEMENT. After the occurrence of an Event of
Default and the payment in full of the Senior Debt, the Borrowers, at the
request of the Agent, shall establish a cash management system as follows:
(a) The Borrowers shall (i) establish and maintain cash
management services of a type and on terms satisfactory to the Agent at one or
more banks acceptable to the Agent (each a "Cash Management Bank"), and shall
request in writing and otherwise take such reasonable steps to ensure that all
of its account debtors forward payment of the amounts owed by them directly to
such Cash Management Bank, and (ii) deposit or cause to be deposited promptly,
and in any event no later than the first Business Day after the date of receipt
thereof, all Collections (including those sent directly by account debtors to a
Cash Management Bank) into a bank account in the Agent's name (a "Cash
Management Account") at one of the Cash Management Banks.
(b) Each Cash Management Bank shall establish and maintain
Cash Management Agreements with the Agent and the Borrowers, in form and
substance acceptable to the Agent. Each Cash Management Agreement shall provide,
among other things, that (i) all items of payment deposited in such Cash
Management Account and proceeds thereof are held by such Cash Management Bank as
agent or bailee-in-possession for the Agent, (ii) the Cash Management Bank has
no rights of setoff or recoupment or any other claim against the applicable Cash
Management Account, other than for payment of its service fees and other charges
directly related to the administration of such Cash Management Account and for
returned checks or other items of payment, and (iii) it immediately will forward
by daily sweep all amounts in the applicable Cash Management Account to the
Agent's Account.
(c) The Borrowers shall close any of their Cash Management
Accounts (and establish replacement cash management accounts) promptly and in
any event within 30 days of notice from Agent that the creditworthiness of any
Cash Management Bank is no longer acceptable in the Agent's reasonable judgment,
or as promptly as practicable and in any event within 60 days of notice from the
Agent that the operating performance, funds transfer, or availability procedures
or performance of the Cash Management Bank with respect to Cash Management
Accounts or the Agent's liability under any Cash Management Agreement with such
Cash Management Bank is no longer acceptable in the Agent's reasonable judgment.
(d) The Cash Management Accounts shall be cash collateral
accounts, with all cash, checks and similar items of payment in such accounts
securing payment of the Obligations, and in which the Borrowers are hereby
deemed to have granted a Lien to the Agent.
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ARTICLE III - GUARANTY
SECTION 3.01 GUARANTY OF PAYMENT. Subject to SECTION 3.07, each of the
Guarantors hereby, jointly and severally, unconditionally guarantees to each
Lender the prompt payment of the Obligations in full when due (whether at stated
maturity, as a mandatory prepayment, by acceleration or otherwise). This
guaranty (the "Guaranty") is a guaranty of payment and not of collection and is
a continuing guaranty and shall apply to all Obligations whenever arising.
SECTION 3.02 OBLIGATIONS UNCONDITIONAL. The obligations of the
Guarantors hereunder are absolute and unconditional, irrespective of the value,
genuineness, validity, regularity or enforceability of any of the Loan
Documents, or any other agreement or instrument referred to therein, to the
fullest extent permitted by applicable law, irrespective of any other
circumstance whatsoever which might otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor. Each Guarantor agrees that this
Guaranty may be enforced by the Lenders without the necessity at any time of
resorting to or exhausting any other security or collateral and without the
necessity at any time of having recourse to the Notes or any other of the Loan
Documents or any collateral, if any, hereafter securing the Obligations or
otherwise and each Guarantor hereby waives the right to require the Lenders to
proceed against any Borrower or any other Person (including a co-guarantor) or
to require the Lenders to pursue any other remedy or enforce any other right.
Each Guarantor further agrees that it shall have no right of subrogation,
indemnity, reimbursement or contribution against any Borrower or any other
Guarantor of the Obligations for amounts paid under this Guaranty until such
time as the Lenders have been paid in full and no Person or Governmental
Authority shall have any right to request any return or reimbursement of funds
from the Lenders in connection with monies received under the Loan Documents.
Each Guarantor further agrees that nothing contained herein shall prevent any
Lender from suing on any Notes or any of the other Loan Documents or the Agent
from foreclosing its security interest in or Lien on any collateral, if any,
securing the Obligations or from exercising any other rights available to it
under this Agreement, the Notes, any other of the Loan Documents, or any other
instrument of security, if any, and the exercise of any of the aforesaid rights
and the completion of any foreclosure proceedings shall not constitute a
discharge of any of any Guarantor's obligations hereunder; it being the purpose
and intent of each Guarantor that its obligations hereunder shall be absolute,
independent and unconditional under any and all circumstances. Neither any
Guarantor's obligations under this Guaranty nor any remedy for the enforcement
thereof shall be impaired, modified, changed or released in any manner
whatsoever by an impairment, modification, change, release or limitation of the
liability of any Borrower or by reason of the bankruptcy or insolvency of any
Borrower. Each Guarantor waives any and all notice of the creation, renewal,
extension or accrual of any of the Obligations and notice of or proof of
reliance by the Agent or any Lender upon this Guaranty or acceptance of this
Guaranty. The Obligations, and any of them, shall conclusively be deemed to have
been created, contracted or incurred, or renewed, extended, amended or waived,
in reliance upon this Guaranty. All dealings between any of the Borrowers and
the Guarantors, on the one hand, and the Agent and the Lenders, on the other
hand, likewise shall be conclusively presumed to have been had or consummated in
reliance upon this Guaranty. The Guarantors further agree to all rights of
set-off held by the Agent or the Lenders.
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SECTION 3.03 MODIFICATIONS. Each Guarantor agrees that (a) all or any
part of the Collateral now or hereafter held for the Obligations, if any, may be
exchanged, compromised or surrendered from time to time; (b) the Lenders shall
not have any obligation to protect, perfect, secure or insure any such security
interests, liens or encumbrances now or hereafter held, if any, for the
Obligations or the properties subject thereto; (c) the time or place of payment
of the Obligations may be changed or extended, in whole or in part, to a time
certain or otherwise, and may be renewed or accelerated, in whole or in part;
(d) any Borrower and any other party liable for payment under the Loan Documents
may be granted indulgences generally; (e) any of the provisions of the Notes or
any of the other Loan Documents may be modified, amended or waived; (f) any
party (including any co-guarantor) liable for the payment thereof may be granted
indulgences or be released; and (g) any deposit balance for the credit of any
Borrower or any other party liable for the payment of the Obligations or liable
upon any security therefor may be released, in whole or in part, at, before or
after the stated, extended or accelerated maturity of the Obligations, all
without notice to or further assent by such Guarantor, which shall remain bound
thereon, notwithstanding any such exchange, compromise, surrender, extension,
renewal, acceleration, modification, indulgence or release.
SECTION 3.04 WAIVER OF RIGHTS. Each Guarantor expressly waives to the
fullest extent permitted by applicable law: (a) notice of acceptance of this
Guaranty by the lenders and of all extensions of credit to the Borrowers by the
Lenders; (b) presentment and demand for payment or performance of any of the
Obligations; (c) protest and notice of dishonor or of default (except as
specifically required in this Agreement) with respect to the Obligations or with
respect to any security therefor; (d) notice of the Lenders obtaining, amending,
substituting for, releasing, waiving or modifying any security interest, lien or
encumbrance, if any, hereafter securing the Obligations, or the Lenders'
subordinating, compromising, discharging or releasing such security interests,
liens or encumbrances, if any; (e) all other notices to which such Guarantor
might otherwise be entitled; and (f) demand for payment under this Guaranty.
SECTION 3.05 REINSTATEMENT. The obligations of each Guarantor under
this Article III shall be automatically reinstated if and to the extent that for
any reason any payment by or on behalf of any Person in respect of the
Obligations is rescinded or must be otherwise restored by any holder of any of
the Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
each Lender promptly upon demand for all reasonable costs and expenses
(including, without limitation, reasonable fees of counsel) incurred by such
Lender in connection with such rescission or restoration, including any such
costs and expenses incurred in defending against any claim alleging that such
payment constituted a preference, fraudulent transfer or similar payment under
any bankruptcy, insolvency or similar law. Upon the request of the Borrowers, a
Lender will provide written support for any claim made pursuant to this SECTION
3.05; PROVIDED that failure to provide such written support shall not impair a
Lender's claim hereunder.
SECTION 3.06 REMEDIES. Each Guarantor agrees that, as between it, on
the one hand, and the Lenders, on the other hand, the Obligations may be
declared to be forthwith due and payable as provided in SECTION 7.02 (and shall
be deemed to have become automatically due and payable in the circumstances
provided in SECTION 7.02) notwithstanding any stay, injunction or other
prohibition preventing such declaration (or preventing such
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Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or such Obligations being
deemed to have become automatically due and payable), such Obligations (whether
or not due and payable by any other Person) shall forthwith become due and
payable by such Guarantor. Each Guarantor acknowledges and agrees that its
obligations hereunder are secured in accordance with the terms of the Security
Agreement and that the Lenders may exercise their remedies thereunder in
accordance with the terms thereof.
SECTION 3.07 LIMITATION OF GUARANTY. Notwithstanding any provision to
the contrary contained herein or in any of the other Loan Documents, to the
extent the obligations of any Guarantor shall be adjudicated to be invalid or
unenforceable for any reason (including, without, limitation, because of any
applicable state or federal law relating to fraudulent conveyances or transfers)
then the obligations of such Guarantor hereunder shall be limited to the maximum
amount that is permissible under applicable law (whether federal or state and
including, without limitation, the Bankruptcy Code).
SECTION 3.08 RIGHTS OF CONTRIBUTION. The Credit Parties agree among
themselves that, in connection with payments made hereunder, each Credit Party
shall have contribution rights against the other Credit Parties as permitted
under applicable law. Such contribution rights shall be subordinate and subject
in right of payment to the obligations of the Credit Parties under the Loan
Documents and no Credit Party shall exercise such rights of contribution until
all Obligations (other than any such obligations which by the terms thereof are
stated to survive termination of the Loan Documents) have been paid in full.
ARTICLE IV - CONDITIONS OF LENDING
SECTION 4.01 CONDITIONS PRECEDENT TO THE LOANS. The obligation of the
Lenders to consolidate, amend, restate, and renew the Loans to the Borrowers is
subject to the satisfaction on a date on or before August 31, 2002 of each of
the following conditions precedent:
(a) EXECUTED LOAN DOCUMENTS. Receipt by the Lenders of duly
executed copies of this Agreement and each of the other Loan Documents, each in
form and substance reasonably acceptable to the Lenders.
(b) AUTHORITY DOCUMENTS.
(i) With respect to each Credit Party that is a corporation,
receipt by the Lenders of the following:
(A) Charter Documents. Copies of the articles or
certificates of incorporation or other charter documents of such Credit Party
certified to be true and complete as of a recent date by the appropriate
Governmental Authority of the state or other jurisdiction of its incorporation
and certified by a secretary or assistant secretary of such Credit Party to be
true and correct as of the Closing Date.
(B) Bylaws. A copy of the bylaws of such Credit Party
certified by a secretary or assistant secretary of such Credit Party to be true
and correct as of the Closing Date.
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(C) Resolutions. Copies of resolutions of the Board of
Directors of such Credit Party approving and adopting the Loan Documents to
which it is a party, the transactions contemplated therein and authorizing
execution and delivery thereof, certified by a secretary or assistant secretary
of such Credit Party to be true and correct and in force and effect as of the
Closing Date.
(D) Good Standing. Copies of certificates of good
standing, existence or its equivalent with respect to such Credit Party
certified as of a recent date by the appropriate Governmental Authorities of the
state or other jurisdiction of incorporation.
(E) Incumbency. An incumbency certificate of such Credit
Party certified by a secretary or assistant secretary of such Credit Party to be
true and correct as of the Closing Date.
(ii) With respect to each Credit Party that is a limited
liability company, receipt by the Lenders of the following:
(A) Certificate of Formation. A copy of the Certificate of
Formation of such Credit Party certified to be true and complete as of a recent
date by the appropriate Governmental Authority of the state or other
jurisdiction of its formation and certified by the sole or managing member of
such Credit Party to be true and correct as of the Closing Date.
(B) LLC Agreement. A copy of the limited liability company
agreement or operating agreement of such Credit Party certified by the sole or
managing member of such Credit Party to be true and correct as of the Closing
Date.
(C) Resolutions. Copies of resolutions approving and
adopting the Loan Documents to which it is a party, the transactions
contemplated therein and authorizing execution and delivery thereof, certified
by the sole or managing member of such Credit Party to be true and correct and
in force and effect as of the Closing Date.
(D) Good Standing. Copies of certificates of good
standing, existence or its equivalent with respect to such Credit Party
certified as of a recent date by the appropriate Governmental Authorities of the
state or other jurisdiction of organization.
(E) Incumbency. An incumbency certificate of such Credit
Party certified by the sole or managing member of such Credit Party to be true
and correct as of the Closing Date.
(c) OPINION OF COUNSEL. Receipt by the Lenders of one
opinion from ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ and one opinion from ▇▇▇▇, ▇▇▇▇▇▇ & Parks LLP, in
form and substance reasonably satisfactory to the Lenders, addressed to the
Lenders and dated the Closing Date.
(d) FINANCIAL STATEMENTS. Receipt by the Lenders of such
financial information regarding the Credit Parties and their Subsidiaries as
they may request, including, but not limited to, (i) the Form 10-K filed with
the Securities Exchange Commission by each of
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(x) Parent and (y) PhoneTel, in each case for the year ended December 31, 2001,
(ii) interim unaudited monthly financial statements for each of (x) Parent and
its Subsidiaries, and (y) PhoneTel and Cherokee, in each case prepared in
accordance with GAAP (subject to normal year-end adjustments and the absence of
footnotes), for the trailing twelve-months ended as of the most recently
available month end prior to the Closing Date, (iii) pro forma projected monthly
financial statements of Parent and its Subsidaries on a consolidated basis for
the first eighteen (18) months following the Closing Date, which (A) give effect
to the Merger and related transactions and (B) reflect estimated accounting
adjustments as a consequence thereof, and (iv) projections of cash flow for each
of the Credit Parties and their Subsidiaries for the thirteen weeks following
the Closing Date.
(e) OWNERSHIP AND CAPITAL STRUCTURE. Receipt of evidence and
information satisfactory to the Lenders regarding (i) the documentation to be
entered into by and among the Credit Parties, their shareholders, and/or any
officers, directors or managers of any Credit Parties in connection with this
Agreement, and (ii) the capital and ownership structure of the Credit Parties
and their Subsidiaries after giving effect to the Merger.
(f) PERSONAL PROPERTY COLLATERAL. The Agent shall have
received, in form and substance reasonably satisfactory to the Agent:
(i) searches of Uniform Commercial Code ("UCC") filings in the
jurisdiction of the chief executive office of each Credit Party and each
jurisdiction where any Collateral is located and where a filing would need to be
made in order to perfect the Lenders' security interest in the Collateral,
copies of the financing statements on file in such jurisdictions and evidence
that no Liens exist other than Permitted Liens;
(ii) a letter from the Credit Parties (acknowledged by the
Senior Lenders and Agent) authorizing Agent to file UCC financing statements in
each appropriate jurisdiction as is necessary, in the Agent's sole discretion,
to perfect the Agent's security interest in the Collateral;
(iii) a letter from PNC Bank, National Association and Bank of
America authorizing Agent to file assignments of existing UCC financing
statements which are filed against the Davel Credit Parties; and
(iv) searches of ownership of intellectual property in the
appropriate governmental offices as requested by the Agent and such patent,
trademark and copyright filings as requested by the Agent.
(g) EVIDENCE OF INSURANCE. Receipt by the Agent of copies of
certificates of insurance of the Credit Parties evidencing liability and
casualty insurance meeting the requirements set forth in the Loan Documents,
including, but not limited to, naming the Agent as additional insured or loss
payee on behalf of the Lenders.
(h) CONSENTS. Receipt by the Lenders of evidence that (i)
all governmental, shareholder and third party consents and approvals necessary
in connection with the financings and transactions contemplated hereby have been
received, and (ii) no condition or
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Requirement of Law exists which could reasonably be likely to restrain, prevent
or impose any material adverse conditions on the financings or other
transactions contemplated hereby.
(i) LITIGATION. Except as set forth on SCHEDULE 5.01(I),
there shall not exist any pending or, to the knowledge of any Credit Party,
threatened action, suit, investigation or proceeding against a Credit Party or
any of its Subsidiaries.
(j) OFFICER'S CERTIFICATES. The Lenders shall have received
certificates executed by a Responsible Officer of each of the Borrowers as of
the Closing Date stating that, except as set forth on SCHEDULE 4.01(J), (i) the
Credit Parties and each of their Subsidiaries are in compliance with all
existing material financial obligations after giving effect to the transactions
contemplated hereby, (ii) no action, suit, investigation or proceeding is
pending or, to the knowledge of any Credit Party, threatened in any court or
before any arbitrator or governmental instrumentality that purports to affect
the Credit Parties, any of their Subsidiaries or any transaction contemplated by
the Loan Documents, if such action, suit, investigation or proceeding could
reasonably be expected to have a Material Adverse Effect, (iii) the financial
statements and information delivered to the Lenders on or before the Closing
Date were prepared in good faith and in accordance with GAAP (subject, for
financial statements other than year-end financial statements, to normal
year-end adjustments and the absence of footnotes), (iv) since December 31,
2001, there has been no development or event relating to or affecting a Credit
Party or any of its Subsidiaries which has had or would be reasonably expected
to have a Material Adverse Effect; and (v) immediately after giving effect to
this Agreement, the other Loan Documents and all the transactions contemplated
therein to occur on such date, (A) no Default or Event of Default exists, and
(B) all representations and warranties contained herein and in the other Loan
Documents are true and correct in all material respects.
(k) FEES AND EXPENSES. The Borrowers shall have paid to the
Agent all fees and expenses due and payable under SECTION 9.05.
(l) MATERIAL ADVERSE EFFECT. Except as set forth on SCHEDULE
4.01(J), no Material Adverse Effect and no material adverse change in the facts
and information regarding the Credit Parties and their Subsidiaries provided to
the Lenders shall have occurred since February 19, 2002.
(m) CONSUMMATION OF DEBT FOR EQUITY EXCHANGES AND MERGER.
The Davel Debt For Equity Exchange and the PhoneTel Debt For Equity Exchange
shall have been consummated substantially in accordance with the Exchange
Agreement. The Merger shall have been consummated substantially in accordance
with the Merger Agreements.
(n) REAFFIRMATION OF INTERCREDITOR AGREEMENT. The Lenders
and the Senior Lenders shall have reaffirmed their respective obligations under
the Intercreditor Agreement.
(o) REGISTRATION RIGHTS AGREEMENT. Parent and the Lenders
shall have entered into the Registration Rights Agreement, in form and substance
satisfactory to the Lenders.
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(p) ISSUANCE AND DELIVERY OF COMMON STOCK. Parent and PhoneTel
shall have issued and delivered to each Davel Lender and PhoneTel Lender, as
applicable, the appropriate number of shares of Parent's common stock and
PhoneTel's common stock, as applicable, in accordance with the terms of the
Exchange Agreement.
(q) REAFFIRMATION OF CERBERUS LIEN SUBORDINATION. Cerberus
Partners, L.P. shall have reaffirmed the subordination of its liens and security
interests in the assets of PhoneTel and Cherokee as set forth in that certain
Subordinated Promissory Note and Security Agreement, dated as of November 17,
1999, made by PhoneTel and Cherokee in favor of Cerberus Partners, L.P.
(r) OTHER. Receipt and satisfactory review by the Lenders
and their counsel of such other documents, instruments, agreements or
information as reasonably and timely requested by any Lender or its counsel,
including, but not limited to, shareholder agreements and information regarding
management of the Credit Parties and their Subsidiaries, litigation, tax,
accounting, labor, insurance, pension liabilities (actual or contingent), real
estate leases, material contracts, debt agreements, property ownership and
contingent liabilities of the Credit Parties and their Subsidiaries.
ARTICLE V - REPRESENTATIONS AND WARRANTIES OF THE CREDIT PARTIES
SECTION 5.01 REPRESENTATIONS AND WARRANTIES OF THE CREDIT PARTIES. Each
of the Credit Parties hereby represents and warrants to the Lenders as follows
with respect to itself and its Subsidiaries:
(a) ORGANIZATION AND GOOD STANDING. Each Credit Party (i) is
a corporation or limited liability company duly incorporated or organized,
validly existing and in good standing under the laws of the State (or other
jurisdiction) of its incorporation or organization, (ii) except as set forth in
SCHEDULE 5.01(A), is duly qualified and in good standing as a foreign
corporation or limited liability company and authorized to do business in every
jurisdiction unless the failure to be so qualified, in good standing or
authorized could reasonably be expected to have a Material Adverse Effect, and
(iii) has the requisite corporate or limited liability company power and
authority to own its properties and to carry on its business as now conducted
and as proposed to be conducted.
(b) DUE AUTHORIZATION. Each Credit Party (i) has the
requisite corporate or limited liability company power and authority to execute,
deliver and perform this Agreement and the other Loan Documents to which it is a
party and to incur the obligations herein and therein provided for and (i) is
duly authorized to, and has been authorized by all necessary corporate or
limited liability company action, to execute, deliver and perform this Agreement
and the other Loan Documents to which it is a party.
(c) NO CONFLICTS. Neither the execution and delivery of the
Loan Documents, nor the consummation of the transactions contemplated therein,
nor performance of and compliance with the terms and provisions thereof by such
Credit Party will (i) violate or conflict with any provision of its articles or
certificate of incorporation, operating agreement, articles of organization or
bylaws, (ii) violate, contravene or materially conflict with any
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Requirement of Law or any other law, regulation (including, without limitation,
Regulation U, Regulation T or Regulation X), order, writ, judgment, injunction,
decree or permit applicable to it, (iii) violate, contravene or conflict with
contractual provisions of, or cause an event of default under, any indenture,
loan agreement, mortgage, deed of trust, contract or other agreement or
instrument to which it is a party or by which it may be bound, the violation of
which could reasonably be expected to have a Material Adverse Effect, or (iv)
result in or require the creation of any Lien (other than those contemplated in
or created in connection with the Loan Documents) upon or with respect to its
properties.
(d) CONSENTS. Except for consents, approvals, authorizations
and filings and registrations which have been obtained, no consent, approval,
authorization or order of, or filing, registration or qualification with, any
court or Governmental Authority or third party in respect of any Credit Party is
required in connection with the execution, delivery or performance of this
Agreement or any of the other Loan Documents by such Credit Party.
(e) ENFORCEABLE OBLIGATIONS. This Agreement and the other Loan
Documents have been duly executed and delivered and constitute legal, valid and
binding obligations of each Credit Party enforceable against such Credit Party
in accordance with their respective terms, except as may be limited by
bankruptcy, insolvency, reorganization or moratorium laws or similar laws
relating to or affecting creditors' rights generally or by general equitable
principles.
(f) NO DEFAULT. Except as set forth on SCHEDULE 5.01(F), no
Credit Party, nor any of their Subsidiaries, is in default in any respect under
any contract, lease, loan agreement, indenture, mortgage, security agreement or
other agreement or obligation to which it is a party or by which any of its
properties is bound which default could reasonably be expected to have a
Material Adverse Effect. No Default or Event of Default has occurred or exists
except as previously disclosed in writing to the Lenders.
(g) OWNERSHIP. Each Credit Party, and each of its
Subsidiaries, is the owner of, and has good and marketable title to, or has a
valid license or lease to use all of its respective assets (including, without
limitation, its Intellectual Property (as defined in SECTION 5.01(P))) and none
of such assets is subject to any Lien other than Permitted Liens.
(h) INDEBTEDNESS. The Credit Parties and their Subsidiaries
have no Indebtedness except (i) as disclosed in the financial statements
referenced in SECTION 6.01(A), (ii) as set forth on SCHEDULE 5.01(H) and (iii)
as otherwise permitted by this Agreement.
(i) LITIGATION. There are no actions, suits or legal,
equitable, arbitration or administrative proceedings, pending or, to the
knowledge of any Credit Party, threatened against, any Credit Party or any of
its Subsidiaries which could reasonably be expected to have a Material Adverse
Effect except as set forth and described on SCHEDULE 5.01(I).
(j) TAXES. Each Credit Party, and each of its Subsidiaries,
has filed, or caused to be filed, all material tax returns (federal, state,
local and foreign) required to be filed and paid or caused to be paid (i) all
material amounts of taxes shown thereon to be due and payable (including
interest and penalties) and (ii) all material other taxes, fees, assessments
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and other governmental charges (including mortgage recording taxes, documentary
stamp taxes and intangibles taxes) that are due and payable, except for such
taxes (A) which are not yet delinquent or (B) that are being contested in good
faith and by proper proceedings, and against which adequate reserves are being
maintained in accordance with GAAP. To the knowledge of the Credit Parties,
there are no material amounts claimed to be due against any of them by any
Governmental Authority.
(k) COMPLIANCE WITH LAW. Each Credit Party, and each of its
Subsidiaries, is in compliance with all Requirements of Law and all other laws,
rules, regulations, orders and decrees (including without limitation
Environmental Laws) applicable to it, or to its properties, unless such failure
to comply could not reasonably be expected to have a Material Adverse Effect.
(l) ERISA. Except as would not result or be reasonably
expected to result in a Material Adverse Effect:
(i) During the five-year period prior to the date on which this
representation is made or deemed made: (A) no Termination Event has occurred,
and, to the knowledge of the Credit Parties, no event or condition has occurred
or exists as a result of which any Termination Event is reasonably expected to
occur, with respect to any Plan; (B) no "accumulated funding deficiency," as
such term is defined in Section 302 of ERISA and Section 412 of the Code,
whether or not waived, has occurred with respect to any Plan; (C) each Plan has
been maintained, operated, and funded in compliance with its own terms and in
material compliance with the provisions of ERISA, the Code, and any other
applicable federal or state laws; and (D) no lien in favor or the PBGC or a Plan
has arisen or is reasonably expected to arise on account of any Plan.
(ii) The actuarial present value of all "benefit liabilities"
(within the meaning of Section 4001 of ERISA) under each Single Employer Plan
(determined, utilizing the actuarial assumptions used to fund such Plans),
whether or not vested, did not, as of the last annual valuation date prior to
the date on which this representation is made or deemed made, exceed the fair
market current value as of such date of the assets of such Plan allocable to
such accrued liabilities.
(iii) Except as described in SCHEDULE 5.01(L), none of the
Borrowers nor any ERISA Affiliate has incurred, or, to the knowledge of the
Credit Parties, is reasonably expected to incur, any withdrawal liability under
ERISA to any Multiemployer Plan or Multiple Employer Plan. None of the Borrowers
nor any ERISA Affiliate has received any notification pursuant to ERISA that any
Multiemployer Plan is in reorganization (within the meaning of Section 4241 of
ERISA), is insolvent (within the meaning of Section 4245 of ERISA), or has been
terminated (within the meaning of Title IV of ERISA), and, to the best knowledge
of the Credit Parties, no Multiemployer Plan is reasonably expected to be in
reorganization, insolvent, or terminated.
(iv) No nonexempt prohibited transaction (within the meaning of
Section 406 of ERISA or Section 4975 of the Code) or breach of fiduciary
responsibility has occurred with respect to a Plan which has subjected or is
reasonably expected to subject any
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Borrower or any ERISA Affiliate to any liability under Sections 406, 409,
502(i), or 502(l) of ERISA or Section 4975 of the Code, or under any agreement
or other instrument pursuant to which any Borrower or any ERISA Affiliate has
agreed or is required to indemnify any person against any such liability.
(v) The present value of the liability of each of the Borrowers
and their respective Subsidiaries and each ERISA Affiliate for post-retirement
welfare benefits to be provided to their current and former employees under
Plans which are welfare benefit plans (as defined in Section 3(1) of ERISA), net
of all assets under all such Plans allocable to such benefits, are reflected on
the Financial Statements in accordance with FASB 106.
(vi) Each Plan which is a welfare plan (as defined in Section
3(1) of ERISA) to which Sections 601-609 of ERISA and Section 4980B of the Code
apply has been administered in material compliance with such sections.
(m) SUBSIDIARIES. Set forth on SCHEDULE 5.01(M) is a complete
and accurate list of all Subsidiaries of each Credit Party. Information on
SCHEDULE 5.01(M) includes jurisdiction of incorporation or organization, the
organizational identification number (if available), the number of shares of
each class of Capital Stock or other equity interests outstanding, the number
and percentage of outstanding shares of each class owned (directly or
indirectly) by such Credit Party; and the number and effect, if exercised, of
all outstanding options, warrants, rights of conversion or purchase and all
other similar rights with respect thereto. The outstanding Capital Stock and
other equity interests of all such Subsidiaries is validly issued, fully paid
and, with respect to any Subsidiary that is a corporation, non-assessable and is
owned by each such Credit Party, directly or indirectly, free and clear of all
Liens (other than those arising under or contemplated in connection with the
Loan Documents). Other than as set forth in SCHEDULE 5.01(M), neither any Credit
Party nor any Subsidiary thereof has outstanding any securities convertible into
or exchangeable for its Capital Stock nor does any such Person have outstanding
any rights to subscribe for or to purchase or any options for the purchase of,
or any agreements providing for the issuance (contingent or otherwise) of, or
any calls, commitments or claims of any character relating to its Capital Stock.
SCHEDULE 5.01(M) may be updated from time to time by the Borrowers by giving
written notice thereof to the Lenders.
(n) GOVERNMENT REGULATION.
(i) No part of the proceeds of the Loans will be used, directly
or indirectly, for the purpose of purchasing or carrying any "margin stock"
within the meaning of Regulation U, or for the purpose of purchasing or carrying
or trading in any securities. If requested by any Lender, each of the Borrowers
will furnish to each Lender a statement to the foregoing effect in conformity
with the requirements of FR Form U-1 referred to in Regulation U. No
Indebtedness being reduced or retired out of the proceeds of the Loans was or
will be incurred for the purpose of purchasing or carrying any margin stock
within the meaning of Regulation U or any "margin security" within the meaning
of Regulation T. "Margin stock" within the meaning of Regulation U does not
constitute more than 25% of the value of the consolidated assets of the Credit
Parties and their Subsidiaries. None of the transactions contemplated by the
Loan Documents (including, without limitation, the direct or indirect use of
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the proceeds of the Loans) will violate or result in a violation of the
Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as
amended, or regulations issued pursuant thereto, or Regulation T, U or X.
(ii) No Credit Party, nor any of their Subsidiaries, is subject
to regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act or the Investment Company Act of 1940, each as amended. In addition,
no Credit Party, nor any of their Subsidiaries, is (A) an "investment company"
registered or required to be registered under the Investment Company Act of
1940, as amended, and is not controlled by such a company, or (B) a "holding
company", or a "subsidiary company" of a "holding company", or an "affiliate" of
a "holding company" or of a "subsidiary" of a "holding company", within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
(iii) No director, executive officer or principal shareholder
of any Credit Party or any of their Subsidiaries, except ▇▇▇▇▇ ▇. Genda, is a
director, executive officer or principal shareholder of any Lender. For the
purposes hereof the terms "director", "executive officer" and "principal
shareholder" (when used with reference to any Lender) have the respective
meanings assigned thereto in Regulation O issued by the Board of Governors of
the Federal Reserve System.
(iv) Each Credit Party and each Subsidiary of a Credit Party is
current with all material reports and documents, if any, required to be filed
with any state or federal securities commission or similar agency and is in full
compliance in all material respects with all applicable rules and regulations of
such commissions.
(o) ENVIRONMENTAL MATTERS. Except as would not cause or reasonably
be expected to cause a Material Adverse Effect:
(i) Each of the Credit Parties is in compliance with all
applicable Environmental Laws.
(ii) Each of the Real Properties that a Credit Party owns or
leases and all operations at such Real Properties is in compliance with all
applicable Environmental Laws, and there is no violation of any Environmental
Law with respect to such Real Properties or the businesses operated by the
Credit Parties or any of their Subsidiaries (the "BUSINESSES"), and there are no
conditions relating to the Businesses or such Real Properties that would
reasonably be expected to give rise to liability under any applicable
Environmental Laws.
(iii) No Credit Party has received any written notice of, or
inquiry from any Governmental Authority regarding, any violation, alleged
violation, non-compliance, liability or potential liability regarding Hazardous
Materials or compliance with Environmental Laws with regard to any of the Real
Properties or the businesses, nor, to the knowledge of a Credit Party or any of
its Subsidiaries, is any such notice being threatened.
(iv) Hazardous Materials have not been transported or disposed
of from the Real Properties that a Credit Party owns or leases, or generated,
treated, stored or disposed of at, on or under any of such Real Properties or
any other location, in each case by, or
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on behalf or with the permission of, a Credit Party or any of its Subsidiaries
in a manner that would give rise to liability under any applicable Environmental
Laws.
(v) No judicial proceeding or governmental or administrative
action is pending or, to the knowledge of a Credit Party or any of its
Subsidiaries, threatened, under any Environmental Law to which a Credit Party or
any of its Subsidiaries is or will be named as a party, nor are there any
consent decrees or other decrees, consent orders, administrative orders or other
orders, or other administrative or judicial requirements outstanding under any
Environmental Law with respect to a Credit Party or any of its Subsidiaries, or
the Real Properties.
(vi) There has been no release (including, without limitation,
disposal) or threat of release of Hazardous Materials at or from the Real
Properties that a Credit Party owns or leases, or arising from or related to the
operations of a Credit Party or any of its Subsidiaries in connection with such
Real Properties or otherwise in connection with the Businesses where such
release constituted a violation of, or would give rise to liability under, any
applicable Environmental Laws.
(vii) None of the Real Properties that a Credit Party owns or
leases contains, or has previously contained, any Hazardous Materials at, on or
under such Real Properties in amounts or concentrations that, if released,
constitute or constituted a violation of, or could give rise to liability under,
Environmental Laws.
(viii) No Credit Party, nor any of its Subsidiaries, has
assumed any liability of any Person (other than another Credit Party, or one of
its Subsidiaries) under any Environmental Law.
(p) INTELLECTUAL PROPERTY. Each Credit Party owns, or has the legal
right to use, all patents, trademarks, tradenames, copyrights, technology,
know-how and processes (the "INTELLECTUAL PROPERTY") necessary for each of them
to conduct its business as currently conducted except for those the failure to
own or have such legal right to use would not have or be reasonably expected to
have a Material Adverse Effect. Except as could not reasonably be expected to
have a Material Adverse Effect, (i) no holding, decision or judgment has been
rendered by any Governmental Authority which would limit, cancel or question the
validity of any Intellectual Property and (ii) no action or proceeding is
pending seeking to limit, cancel or question the validity of any Intellectual
Property, or which, if adversely determined, would have a Material Adverse
Effect on the value of any Intellectual Property. Set forth on SCHEDULE 5.01(P)
is a list of all patents, registered and material unregistered trademarks,
tradenames and registered copyrights owned by each Credit Party or that any
Credit Party has the right to use. Except as provided on SCHEDULE 5.01(P), no
claim has been asserted against any Credit Party or its Subsidiaries in writing
and is pending by any Person challenging a Credit Party's right to use any
Intellectual Property, which is owned by such Credit Party or its Subsidiaries
or that such Credit Party or its Subsidiaries has a right to use, or the
validity of any such Intellectual Property, nor does any Credit Party have
knowledge of any such claim, and to the Credit Parties' knowledge, neither the
Credit Parties nor any of their Subsidiaries infringes any Intellectual Property
of any other Person, except for such claims that in the aggregate, could
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not reasonably be expected to have a Material Adverse Effect. SCHEDULE 5.01(P)
may be updated from time to time by the Borrowers by giving written notice
thereof to the Lenders.
(q) INVESTMENTS. All Investments of each Credit Party and its
Subsidiaries are (i) as set forth on SCHEDULE 5.01(Q) or (ii) other Permitted
Investments.
(r) LOCATION OF COLLATERAL. Set forth on SCHEDULE 5.01(R)(I) is a
list of all Real Properties with street address, county and state where located.
Set forth on SCHEDULE 5.01(R)(II) is a list of the chief executive office,
principal place of business and jurisdiction of organization of each Credit
Party. All personal property of the Credit Parties is located within the fifty
states of the United States and the District of Columbia unless a Credit Party
informs the Lenders in writing otherwise. SCHEDULES 5.01(R)(I) and 5.01(R)(II)
may be updated from time to time by the Borrowers by giving written notice
thereof to the Lenders. As of the Closing Date, none of the Credit Parties owns
any Real Properties.
(s) DISCLOSURE. Neither this Agreement nor any financial statements
delivered to the Lenders nor any other document, certificate or statement
furnished to the Lenders by or on behalf of any Credit Party in connection with
the transactions contemplated hereby contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
contained therein or herein, taken as a whole, not misleading in light of the
circumstances under which such information was provided.
(t) LICENSES, ETC. The Credit Parties have obtained and hold in
full force and effect, all franchises, licenses, permits, certificates,
authorizations, qualifications, accreditations, easements, rights of way and
other rights, consents and approvals which are necessary for the operation of
their respective businesses as presently conducted, except where the failure to
obtain same could not reasonably be expected to have a Material Adverse Effect.
(u) COLLATERAL DOCUMENTS. The Collateral Documents create valid
security interests in, and Liens on, the Collateral purported to be covered
thereby, which security interests and Liens are currently (or will be, upon the
filing of appropriate financing statements in favor of the Lenders) perfected
security interests and Liens, prior to all other Liens other than Permitted
Liens.
(v) FINANCIAL CONDITION. The financial statements delivered to the
Lenders prior to the Closing Date and pursuant to SECTION 4.01(D): (i) have been
prepared in accordance with GAAP (subject, in the case of financial statements
other than year-end financial statements, to normal year-end adjustments and the
absence of footnotes), and (ii) present fairly in all material respects (on the
basis disclosed in the footnotes to such financial statements, if any) the
consolidated and consolidating (as applicable) financial condition, results of
operations and cash flows of each of Parent and its Subsidiaries (prior to the
effectiveness of the Merger) and PhoneTel and Cherokee, as applicable, as of
such date and for such periods. No Material Adverse Effect has occurred since
the date of such financial statements.
(w) SALE OF ASSETS. Except as set forth on SCHEDULE 5.01(W), since
September 30, 2001, there has been no sale, transfer or other disposition by any
Credit Party or any of their Subsidiaries of any material part of the business
or Property of the Credit Parties,
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taken as a whole, and no purchase or other Acquisition by any of them of any
business or Property (including any Capital Stock of any other Person) material
in relation to the consolidated financial condition of the Credit Parties, taken
as a whole, in each case which is not (i) reflected in the most recent financial
statements delivered to the Lenders pursuant to SECTION 4.01(D) or in the notes
thereto or (ii) otherwise permitted by the terms of this Agreement and
communicated to the Lenders.
(x) SENIOR DEBT. The Senior Debt is outstanding in the amount of
$10,000,000 plus accrued and unpaid interest as of the Closing Date. No
"Default" or "Event of Default", as defined in the Senior Debt Agreements, has
occurred and is continuing.
(y) BROKERS FEES. Other than fees owing to Ladenburg ▇▇▇▇▇▇▇ & Co.
as disclosed in the Exchange Agreement or schedules thereto, the Borrowers have
not incurred any obligation for a brokerage commission or finder's fee in
connection with any of the Borrower's transactions with any of the Lenders.
ARTICLE VI - COVENANTS OF THE CREDIT PARTIES
SECTION 6.01 AFFIRMATIVE COVENANTS. Each Credit Party hereby
covenants and agrees that from the date of this Agreement and, thereafter, so
long as all of the Obligations have not been paid in full:
(a) INFORMATION COVENANTS. The Credit Parties will furnish, or
cause to be furnished, to each of the Lenders:
(i) ANNUAL FINANCIAL STATEMENTS. As soon as available, and in
any event within 90 days after the close of each fiscal year of the Borrowers,
beginning with the fiscal year ended December 31, 2002, a consolidated balance
sheet and income statement of Parent and its Subsidiaries, as of the end of such
fiscal year, together with related consolidated statements of cash flows for
such fiscal year, setting forth in comparative form, if practical, consolidated
figures for the preceding fiscal year, all such consolidated financial
information described above to be in reasonable form and detail and audited by
independent certified public accountants reasonably acceptable to the Lenders
and whose opinion shall be to the effect that such financial statements have
been prepared in accordance with GAAP (except for changes with which such
accountants concur) and shall not be limited as to the scope of the audit or
qualified in any manner other than such qualification that may have been
included in the opinion rendered by Aidman Pieser & Co. with respect to the
Borrowers' financial statements for the fiscal year ended December 31, 2001.
(ii) INTERIM FINANCIAL STATEMENTS. As soon as available, and in
any event within 45 days after the close of each fiscal quarter of the Borrowers
and within 30 days after the end of each calendar month, a consolidated balance
sheet and income statement of Parent and its Subsidiaries, as of the end of such
fiscal quarter or calendar month, as the case may be, together with related
consolidated statements of cash flows for such fiscal quarter or calendar month,
as applicable, in the case of the income statement and statement of cash flow
setting forth in comparative form, if practical, consolidated figures for the
corresponding period of the preceding fiscal year and in the case of the balance
sheet setting forth in comparative form,
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if practical, consolidated figures for the corresponding last date of the prior
fiscal year, all such financial information described above to be in reasonable
form and detail and reasonably acceptable to the Lenders, and accompanied by a
certificate of the chief financial officer of the Borrowers to the effect that
such quarterly financial statements fairly present in all material respects the
financial condition of Parent and its Subsidiaries and have been prepared in
accordance with GAAP (subject to normal year-end adjustments and the absence of
footnotes).
(iii) OFFICER'S CERTIFICATE. At the time of delivery of the
financial statements provided for in SECTIONS 6.01(A)(I) AND 6.01(A)(II) above,
a certificate of the chief financial officer of the Borrowers, substantially in
the form of EXHIBIT 6.01(A), (i) demonstrating compliance with the financial
covenants contained in SECTION 6.01(B) by calculation thereof as of the end of
each such period, (ii) demonstrating compliance with any other terms of this
Agreement as reasonably requested by the Lenders and (iii) stating that no
Default or Event of Default exists, or if any Default or Event of Default does
exist, specifying the nature and extent thereof and what action the Borrowers
propose to take with respect thereto. If necessary, the Borrowers shall deliver
financial statements prepared in accordance with GAAP as of the Closing Date, to
the extent GAAP has changed since the Closing Date, in order to show compliance
with the terms of this Agreement, including SECTION 6.01(B).
(iv) ANNUAL BUSINESS PLAN AND BUDGETS. As soon as available,
and in any event within 90 days after the end of each fiscal year of the
Borrowers, an annual business plan and budget of the Credit Parties and their
Subsidiaries on a combined and consolidated basis, as applicable, containing,
among other things, pro forma monthly financial projections for the next fiscal
year.
(v) ACCOUNTANT'S CERTIFICATE. Within the period for delivery of
the annual financial statements provided in SECTION 6.01(A)(I), a certificate of
the accountants conducting the annual audit stating that they have reviewed this
Agreement and stating further whether, in the course of their audit, they have
become aware of any Default or Event of Default of a financial nature and, if
any such Default or Event of Default exists, specifying the nature and extent
thereof.
(vi) AUDITOR'S REPORTS. Promptly upon receipt thereof, a copy
of any "management letter" submitted by independent accountants to any of the
Credit Parties or their Subsidiaries in connection with any annual, interim or
special audit of the books of any such Person.
(vii) REPORTS. Promptly upon transmission or receipt thereof,
(A) copies of any public filings and registrations with, and reports to or from,
the Securities and Exchange Commission, or any successor agency, and copies of
all financial statements, proxy statements, notices and reports as any of the
Credit Parties and their Subsidiaries shall send to their shareholders generally
in their capacity as shareholders and (b) upon the written request of the
Lenders, all material reports and written information to and from the United
States Environmental Protection Agency, or any state or local agency responsible
for environmental matters, the United States Occupational Health and Safety
Administration, or any state or local agency responsible for health and safety
matters, or any successor agencies or authorities concerning material
environmental, health or safety matters.
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(viii) NOTICES. Promptly (and in any event within five
Business Days) after a Responsible Officer of a Credit Party obtains knowledge
thereof, notice of (A) the occurrence of an event or condition consisting of a
Default or Event of Default, specifying the nature and existence thereof and
what action the Credit Parties propose to take with respect thereto, and (B) the
occurrence of any of the following with respect to a Credit Party or any
Subsidiary of a Credit Party: (1) the pendency or commencement of any
litigation, arbitral or governmental proceeding against a Credit Party or any of
its Subsidiaries which if adversely determined could reasonably be expected to
have a Material Adverse Effect, (2) the institution of any proceedings against a
Credit Party or any of its Subsidiaries with respect to, or the receipt of
written notice by such Person of potential liability or responsibility for
violation, or alleged violation of any federal, state or local law, rule or
regulation (including but not limited to, Environmental Laws) the violation of
which could reasonably be expected to have a Material Adverse Effect, (3) any
loss of or damage to any Property of a Credit Party or its Subsidiaries or the
commencement of any proceeding for the condemnation or other taking of any
Property of a Credit Party or its Subsidiaries, if such loss, damage or
proceeding has had or could reasonably be expected to have a Material Adverse
Effect, (4) if it could cause or be reasonably expected to cause a Material
Adverse Effect, any (x) non-renewal, cancellation, termination, revocation,
suspension, impairment or material modification of any FCC License or State
License or the occurrence of any event or the existence of any circumstances
which, in the reasonable judgment of a Credit Party, is likely to lead to any
non-renewal, cancellation, termination, revocation, suspension, impairment or
material modification of any FCC License or State License, (y) default or
forfeiture with respect to any FCC License or State License or (z) hearing
designation order concerning any FCC or State application filed by any Credit
Party or any FCC License or State License held by any Credit Party or (5) any
order or decision by the FCC that would have a significant impact on the
business of the Credit Parties and their Subsidiaries, taken as a whole.
(ix) ERISA. Promptly (and in any event within five Business
Days) after any of the Credit Parties or any of their Subsidiaries or any ERISA
Affiliate obtains knowledge thereof, notice of (A) any event or condition,
including, but not limited to, any Reportable Event, that constitutes, or is
reasonably expected to result in, a Termination Event; (B) with respect to any
Multiemployer Plan, the receipt of notice as prescribed in ERISA or otherwise of
any withdrawal liability assessed against the Credit Parties or any of their
Subsidiaries or any of their ERISA Affiliates, or of a determination that any
Multiemployer Plan is in reorganization or insolvent (both within the meaning of
Title IV of ERISA); (C) the failure to make full payment on or before the due
date (including extensions) thereof of all amounts which a Credit Party or any
of its Subsidiaries or any of its ERISA Affiliates is required to contribute to
each Plan pursuant to such Plan's terms and as required to meet the minimum
funding standard set forth in Section 302 of ERISA and Section 412 of the Code
with respect thereto; or (D) any change in the funding status of any Plan that
could have a Material Adverse Effect; together, with a description of any such
event or condition or a copy of any such notice and a statement by the principal
financial officer of the Borrowers briefly setting forth the details regarding
such event, condition, or notice, and the action, if any, which has been or is
being taken or is proposed to be taken by the Credit Parties or any of their
Subsidiaries with respect thereto. Promptly upon request, the Credit Parties or
any of their Subsidiaries shall furnish each of the Lenders with such additional
information concerning any Plan as may be reasonably requested by the Lenders,
including, but not limited to, copies of each annual report/return (Form
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5500 series), as well as all schedules and attachments thereto required to be
filed with the Department of Labor and/or the Internal Revenue Service pursuant
to ERISA and the Code, respectively, for each "plan year" (within the meaning of
Section 3(39) of ERISA).
(x) ENVIRONMENTAL.
(A) Subsequent to a notice from any Governmental Authority
where the subject matter of such notice could reasonably be expected to have a
Material Adverse Effect, or during the existence of an Event of Default, upon
the reasonable written request of Lenders, furnish, at the Credit Parties'
expense, a report of an environmental assessment of reasonable scope, form and
depth, including, where appropriate, invasive soil or groundwater sampling, by a
consultant reasonably acceptable to the Lenders addressing the subject of such
notice or, if during the existence of an Event of Default, regarding any release
or threat of release of Hazardous Materials on any Real Property and the
compliance by the Credit Parties with Environmental Laws. If the Credit Parties
fail to deliver such an environmental report within sixty (60) days after
receipt of such written request, then the Lenders may arrange for same, and the
Credit Parties hereby grant to the Lenders and its representatives reasonable
access to the Real Properties and a license of a scope reasonably necessary to
undertake such an assessment (including, where appropriate, invasive soil or
groundwater sampling). The reasonable cost of any assessment arranged for by the
Lenders pursuant to this provision will be payable by the Credit Parties on
demand and added to the obligations secured by the Collateral Documents.
(B) Each Credit Party will conduct and complete all
investigations, studies, sampling, and testing and all remedial, removal, and
other actions required under the Environmental Laws to address all Hazardous
Materials on, from, or affecting any Real Property to the extent necessary to be
in compliance with all Environmental Laws and all other applicable federal,
state and local laws, regulations, rules and policies and with the orders and
directives of all Governmental Authorities exercising jurisdiction over such
real property to the extent any failure would have or be reasonably expected to
have a Material Adverse Effect.
(xi) COIN VOLUME REPORT. Within 30 days after the end of each
month, a report showing the total coin volume and the average coin volume by
phone for the prior month, together with a comparison of such total coin volume
and individual coin volume for the same month during the prior fiscal year, in
each case in a form reasonably acceptable to the Lenders.
(xii) BI-WEEKLY CASH FLOW FORECASTS. On the fifth Business Day
of every other week, a week-by-week forecast of the projected cash flows of the
Credit Parties and their Subsidiaries on a consolidated and combined basis, as
applicable, for the thirteen (13) week period commencing as of the first
Business Day of such week, including without limitation, (A) the total coin
volume and (B) weighted-average coin volume by phone (in each case, based on
daily bank deposits) for such period and cumulative from the Closing Date,
together with a statement of the historical cash flows of the Credit Parties and
their Subsidiaries including without limitation, (A) the total coin volume and
(B) weighted-average coin volume by phone for such period and cumulative from
the Closing Date (in each case, based on daily bank
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deposits), and a reconciliation to the then most recently delivered forecast
pursuant to this clause for the period commencing on the first Business Day of
such recently delivered forecast and ending on the last Business Day of the then
most recently ended week, each such forecast, historical cash flow statement and
reconciliation report to be in a form reasonably acceptable to the Lenders.
(xiii) OTHER INFORMATION. With reasonable promptness upon any
such request, such other information regarding the business, properties or
financial condition of the Credit Parties and their Subsidiaries as the Lenders
may reasonably request.
(b) FINANCIAL COVENANTS.
(i) BUDGET COMPLIANCE. The Credit Parties shall not pay
expenses in cash, nor shall they permit their Subsidiaries to pay expenses in
cash, during any year-to-date period ending as of the last day of any calendar
month, in amounts which would cause the aggregate amount of expenses paid for in
cash with respect to any category set forth in the Budget for such year-to-date
period to exceed the amount set forth in the Budget (designated therein as
"Cumulative") and corresponding to such category for such period by an amount in
excess of 10% of such amount set forth in the Budget.
(ii) MINIMUM EBITDA. The Credit Parties shall not permit EBITDA
for any fiscal period set forth below, taken as one accounting period, to be
less than the amount set forth opposite such period below:
PERIOD EBITDA
------ ------
8/1/02-12/31/02 8,500,000
8/1/02-3/31/03 11,200,000
8/1/02-6/30/03 15,900,000
10/1/02-9/30/03 17,100,000
1/1/03-12/31/03 16,600,000
4/1/03-3/31/04 17,400,000
7/1/03-6/30/04 18,200,000
10/1/03-9/30/04 19,000,000
1/1/04-12/31/04 19,700,000
4/1/04-3/31/05 20,100,000
7/1/04-6/30/05 20,400,000
10/1/04-9/30/05 20,600,000
1/1/05-12/31/05 20,000,000
(iii) MINIMUM ADJUSTED EBITDA. The Credit Parties shall not
permit Adjusted EBITDA for any fiscal period set forth below, taken as one
accounting period, to be less than the amount set forth opposite such period
below:
PERIOD ADJUSTED EBITDA
------ ---------------
8/1/02-12/31/02 4,300,000
8/1/02-3/31/03 5,800,000
8/1/02-6/30/03 9,100,000
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10/1/02-9/30/03 10,400,000
1/1/03-12/31/03 11,300,000
4/1/03-3/31/04 13,300,000
7/1/03-6/30/04 15,500,000
10/1/03-9/30/04 17,700,000
(c) PRESERVATION OF EXISTENCE AND FRANCHISES. Each of the Credit
Parties will do all things necessary to preserve and keep in full force and
effect its existence, rights, franchises and authority except as permitted by
SECTION 6.02(D).
(d) BOOKS AND RECORDS. Each of the Credit Parties will, and will
cause its Subsidiaries to, keep complete and accurate books and records of its
transactions in accordance with GAAP (including the establishment and
maintenance of appropriate reserves).
(e) COMPLIANCE WITH LAW AND LICENSES. Each of the Credit Parties
will, and will cause its Subsidiaries to, (i) comply with all laws, rules,
regulations and orders, and all applicable restrictions imposed by all
Governmental Authorities, applicable to it and its property (including, without
limitation, Environmental Laws), and (b) comply with and maintain all FCC
Licenses and State Licenses, unless such noncompliance or nonmaintenance could
not reasonably be expected to have a Material Adverse Effect.
(f) PAYMENT OF TAXES AND CLAIMS. Each of the Credit Parties will
pay, settle or discharge (i) all taxes, assessments and governmental charges or
levies imposed upon it, or upon its income or profits, or upon any of its
properties, before they shall become delinquent and (ii) all lawful claims
(including claims for labor, materials and supplies) which, if unpaid, might
give rise to a Lien upon any of its properties; PROVIDED, HOWEVER, that a Credit
Party shall not be required to pay any such tax, assessment, charge, levy, claim
or Indebtedness which is being contested in good faith by appropriate
proceedings and as to which adequate reserves therefor have been established in
accordance with GAAP, unless the failure to make any such payment (A) would give
rise to an immediate right to foreclose or collect on a Lien securing such
amounts or (B) could reasonably be expected to have a Material Adverse Effect.
(g) INSURANCE. Each of the Credit Parties will at all times
maintain in full force and effect insurance (including worker's compensation
insurance, liability insurance, casualty insurance and business interruption
insurance) from insurance companies having a rating of at least A by Best's
Rating Services, in such amounts, covering such risks and liabilities and with
such deductibles or self-insurance retentions as are in accordance with normal
industry practice. The present insurance coverage of the Credit Parties and
their Subsidiaries is outlined as to carrier, policy number, expiration date,
type and amount on SCHEDULE 6.01(G). SCHEDULE 6.01(G) shall be amended and
updated by the Credit Parties on an annual basis or upon the request of the
Lenders.
(h) MAINTENANCE OF PROPERTY. Each of the Credit Parties will
maintain and preserve its properties and equipment in good repair, working order
and condition, normal wear and tear excepted (subject to casualty events), and
will make, or cause to be made, in such properties and equipment from time to
time all repairs, renewals, replacements, extensions,
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additions, betterments and improvements thereto as may be needed or proper, to
the extent and in the manner customary for companies in similar businesses.
(i) COLLATERAL.
(i) If, subsequent to the Closing Date, a Credit Party shall
(A) acquire any real property, any patented, registered or applied for
intellectual property or any securities or (B) acquire any other personal
property required to be delivered to the Agent as Collateral hereunder or under
any of the Collateral Documents, the Borrowers shall immediately notify the
Agent of same.
(ii) Each Credit Party shall (within 30 days of such request)
take such action, as reasonably requested by the Agent and at its own expense,
to ensure that the Lenders have a perfected Lien in all owned real property and
such personal property of the Credit Parties as set forth in the Security
Agreement (whether now owned or hereafter acquired), subject only to Permitted
Liens. Such actions to be required by the Agent may include, but are not limited
to, delivery of mortgages, real estate title insurance policies, surveys, flood
certificates, zoning certificates, environmental reports, valuations, UCC
financing statements, patent, trademark or copyright filings and legal opinions
with respect thereto. Upon the request of the Agent, the Borrowers shall provide
such information as to the location of the personal property of the Credit
Parties as reasonably requested by the Agent.
(j) AUDITS/INSPECTIONS. Upon reasonable notice and during normal
business hours, each Credit Party will permit representatives of the Agent or
any Lender, including, without limitation, in-house auditors and appraisers,
independent accountants, agents, attorneys and appraisers to visit and inspect
such Credit Party's property, including its books and records, its accounts
receivable and inventory, its facilities and its other business assets, and to
make photocopies or photographs thereof and to write down and record any
information such representative obtains and shall permit the Agent or any Lender
or their representatives to investigate and verify the accuracy of information
provided to the Agent and the Lenders, including, without limitation, the
performance of collateral valuation reviews from time to time and to discuss all
such matters with the officers, employees and representatives of the Credit
Parties. The Credit Parties shall pay the Agent's fees in connection with all
such audits and inspections in accordance with the terms of SECTION 2.03(D).
(k) ADDITIONAL CREDIT PARTIES. At the time any Person becomes a
Subsidiary of a Credit Party, the Borrowers shall so notify the Lenders and
promptly thereafter (but in any event within 30 days after the date thereof)
shall cause such Person to (i) if it is a Domestic Subsidiary, execute a Joinder
Agreement, (ii) cause all of the Capital Stock of such Person (if it is a
Domestic Subsidiary) or 65% of the Capital Stock of such Person (if it is a
Material First Tier Foreign Subsidiary) to be delivered to the Agent (together
with undated stock powers signed in blank) and pledged to the Agent pursuant to
an appropriate pledge agreement (or a joinder to the existing Security
Agreement) and otherwise in a form reasonably acceptable to the Agent, (iii) if
such Person is a Domestic Subsidiary, pledge all of its assets to the Agent
pursuant to a security agreement in substantially the form of the Security
Agreement (or a joinder to the existing Security Agreement) and otherwise in a
form reasonably acceptable to the Agent, (iv) if such Person is a Domestic
Subsidiary and has any Subsidiaries, (A) deliver all of
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the Capital Stock of such Domestic Subsidiaries owned by it and 65% of the stock
of the Material First Tier Foreign Subsidiaries owned by it (together with
undated stock powers signed in blank) to the Agent and (B) execute a pledge
agreement (or a joinder to the existing Security Agreement) and otherwise in a
form acceptable to the Agent, (v) if such Person is a Domestic Subsidiary and
owns or leases any real property, execute any and all necessary mortgages, deeds
of trust, deeds to secure debt or other appropriate real estate collateral
documentation in a form acceptable to the Agent (or, if reasonably requested by
the Agent, cause to be delivered in a commercially reasonable manner a landlord
waiver or estoppel letter with respect thereto in a form acceptable to the
Agent), (vi) deliver such other documentation as the Agent may reasonably
request in connection with the foregoing, including, without limitation,
appropriate UCC-1 financing statements, real estate title insurance policies,
surveys, environmental reports, valuations, flood certificates, zoning
certificates, certified resolutions and other organizational and authorizing
documents of such Person and favorable opinions of counsel to such Person (which
shall cover, among other things, the legality, validity, binding effect and
enforceability of the documentation referred to above), all in form, content and
scope reasonably satisfactory to the Agent and (vii) provide to the Lenders (x)
a new SCHEDULE 5.01(M) which shall reflect the information regarding such new
Subsidiary required by SECTION 5.01(M), and (y) if applicable, a new SCHEDULE to
the Security Agreement which shall reflect the pledge of the Capital Stock of
such new Subsidiary.
(l) LOCATION CONTRACTS. The Borrowers shall notify the Agent if at
any time a Location Contract evidences more than seven and one-half percent (7
1/2%) of the consolidated revenues of the Credit Parties and their Subsidiaries.
The Borrowers shall take such action as reasonably requested by the Agent to
ensure that either (a) any such Location Contract is assignable or (b) the land
owner or operator that is party to such Location Contract has consented in
writing to the security interest of the Lenders therein.
(m) BROKERS FEES. Any brokerage commission or finder's fee payable
in connection with the financing arrangements provided herein will be payable by
the Borrowers, and the Lenders shall have no obligation with respect thereto.
SECTION 6.02 NEGATIVE COVENANTS. Each Credit Party hereby
covenants and agrees that from the date of this Agreement and, thereafter, so
long as all of the Obligations have not been paid in full:
(a) INDEBTEDNESS. No Credit Party will, nor will it permit any of
its Subsidiaries to, contract, create, incur, assume or permit to exist any
Indebtedness, except:
(i) Indebtedness arising under this Agreement and the other
Loan Documents;
(ii) Indebtedness existing as of the Closing Date as referenced
in SECTION 5.01(H) (and renewals, refinancings, replacements or extensions
thereof on terms and conditions no more favorable, in the aggregate, to such
creditor than such existing Indebtedness and in a principal amount not in excess
of that outstanding as of the date of such renewal, refinancing, replacement or
extension);
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(iii) purchase money Indebtedness (including Capital Leases) to
finance the purchase of fixed assets (including equipment); PROVIDED that (i)
the total of all such Indebtedness for all such Persons taken together shall not
exceed an aggregate principal amount of $2,000,000 at any one time outstanding
(in addition to any such Indebtedness referred to in subsection (ii) above);
(ii) such Indebtedness when incurred shall not exceed the purchase price of the
asset(s) financed; and (iii) no such Indebtedness shall be refinanced for a
principal amount in excess of the principal balance outstanding thereon at the
time of such refinancing;
(iv) Indebtedness in respect of current accounts payable and
accrued expenses incurred in the ordinary course of business and to the extent
not current, accounts payable and accrued expenses that are subject to bona fide
dispute;
(v) Indebtedness owing by (A) a Credit Party to another Credit
Party, (B) a Credit Party to a Foreign Subsidiary, (C) a Foreign Subsidiary to
another Foreign Subsidiary or (D) a Foreign Subsidiary to a Credit Party if it
constitutes a Permitted Investment;
(vi) Indebtedness arising from judgments that do not cause an
Event of Default;
(vii) Indebtedness evidencing the financing of insurance
premiums not to exceed $1,000,000 at any one time; and
(viii) Indebtedness in respect of the Senior Debt in an amount
not to exceed that which is permitted under the Intercreditor Agreement.
(b) LIENS. No Credit Party will, nor will it permit any of its
Subsidiaries to, contract, create, incur, assume or permit to exist any Lien
with respect to any of its property or assets of any kind (whether real or
personal, tangible or intangible), whether now owned or after acquired, except
for Permitted Liens.
(c) NATURE OF BUSINESS. No Credit Party will, nor will it permit
any of its Subsidiaries to, alter the character of its business from that
conducted as of the Closing Date or engage in any business other than the
business conducted as of the Closing Date and activities which are substantially
similar or related thereto or logical extensions thereof.
(d) CONSOLIDATION AND MERGER. Except for the Merger, no Credit
Party will, nor will it permit any of its Subsidiaries to, enter into any
transaction of merger or consolidation or liquidate, wind up or dissolve itself;
PROVIDED that a Credit Party or a Subsidiary of a Credit Party may merge or
consolidate with or into another Credit Party if the following conditions are
satisfied:
(i) the Lenders are given prior written notice of such action;
(ii) the Person formed by such consolidation or into which a
Credit Party is merged shall either (A) be such Credit Party or (B) be a
Domestic Subsidiary and expressly assume in writing all of the obligations of
such Credit Party under the Loan
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Documents; provided that if the transaction is between a Borrower and another
Person, such Borrower must be the surviving entity;
(iii) the Credit Parties execute and deliver such documents,
instruments and certificates as the Lenders may reasonably request (including,
if necessary, to maintain its perfection and priority in the Collateral pledged
pursuant to the Collateral Documents);
(iv) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing; and
(v) the Borrowers deliver to the Lenders an officer's
certificate demonstrating compliance with clause (ii) above and an opinion of
counsel stating that such consolidation or merger and any written agreement
entered into in connection therewith, comply with this SECTION 6.02(D).
(e) SALE OR LEASE OF ASSETS. No Credit Party will, nor will it
permit any of its Subsidiaries to, convey, sell, lease, transfer or otherwise
dispose of, in one transaction or a series of transactions, all or any part of
its business or assets whether now owned or hereafter acquired, including,
without limitation, inventory, receivables, equipment, real property interests
(whether owned or leasehold), and securities, other than (i) any inventory sold
or otherwise disposed of in the ordinary course of business; (ii) the sale,
lease, transfer or other disposal by a Credit Party (other than the Borrowers
and Parent) of any or all of its assets to another Credit Party; (iii) obsolete,
slow-moving, idle or worn-out assets no longer used or useful in its business or
the trade in of equipment for equipment in better condition or of better
quality, in each case in the ordinary course of business and consistent with
prior practices of the Borrowers and their respective Subsidiaries; (iv) the
transfer of assets which constitute a Permitted Investment; (v) subject to the
prepayment provisions in SECTION 2.04, the issuance of Capital Stock by a Credit
Party; (vi) the lease or sublease of real property interests in the ordinary
course of business; (vii) the license of intellectual property in the ordinary
course of business; and (viii) the discount in the ordinary course of business
of an account receivable from an account debtor of a Credit Party.
Upon a sale of assets permitted by this SECTION 6.02(E), the
Agent shall promptly deliver to the Borrowers, upon the Borrowers' request and
at the Borrowers' expense, such documentation as is reasonably necessary to
evidence the release of the Lenders' security interest in such assets,
including, without limitation, amendments or terminations of UCC financing
statements and if applicable, the return of such assets if they are in the
possession of the Agent.
(f) SALE LEASEBACKS. No Credit Party will, nor will it permit any
of its Subsidiaries to, directly or indirectly become or remain liable as lessee
or as guarantor or other surety with respect to any lease of any property
(whether real or personal or mixed), whether now owned or hereafter acquired,
(i) which such Credit Party or its Subsidiary has sold or transferred or is to
sell or transfer to any other Person other than a Credit Party or (ii) which
such Credit Party or its Subsidiary intends to use for substantially the same
purpose as any other
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property which has been sold or is to be sold or transferred by such Credit
Party to any Person in connection with such lease.
(g) INVESTMENTS. No Credit Party will, nor will it permit any of
its Subsidiaries to, make any Investments except for Permitted Investments.
(h) RESTRICTED PAYMENTS. No Credit Party will, nor will it permit
any of its Subsidiaries to, directly or indirectly, (i) declare or pay any
dividends or make any other distribution upon any shares of its Capital Stock of
any class (other than dividends payable solely in Capital Stock), (ii) purchase,
redeem or otherwise acquire or retire or make any provisions for redemption,
acquisition or retirement of any shares of its Capital Stock of any class or any
warrants or options to purchase any such shares; provided that (x) any
Subsidiary of a Borrower may pay dividends to its parent, (y) Davel may pay
dividends to Parent (A) for general and administrative expenses in the ordinary
course and (B) for the payment of taxes owing by Parent, and (z) a Credit Party
may redeem the Capital Stock of a member of management in the case of death,
disability or termination of such member of management, not to exceed, in the
aggregate, $2,500,000 during the term of this Agreement or (iii) make any
prepayment of Indebtedness (except in connection with refinancing such
Indebtedness) other than Indebtedness arising under this Agreement and the other
Loan Documents.
(i) TRANSACTIONS WITH AFFILIATES. Except as set forth on SCHEDULE
6.02(I) and other than transactions between or among Credit Parties, no Credit
Party will, nor will it permit any of its Subsidiaries to, enter into any
transaction or series of transactions, whether or not in the ordinary course of
business, with any officer, director, shareholder, Subsidiary or Affiliate other
than on terms and conditions substantially as favorable as would be obtainable
in a comparable arm's-length transaction with a Person other than an officer,
director, shareholder, Subsidiary or Affiliate.
(j) FISCAL YEAR; ORGANIZATIONAL DOCUMENTS. No Credit Party will,
nor will it permit any of its Subsidiaries to, (i) change its fiscal year or
(ii) in any manner that would reasonably be likely to materially adversely
affect the rights of the Lenders, change its articles or certificate of
incorporation, operating agreement, articles of organization or its bylaws.
(k) NO LIMITATIONS. No Credit Party will, nor will it permit any of
its Subsidiaries to, directly or indirectly, create or otherwise cause, incur,
assume, suffer or permit to exist or become effective any consensual encumbrance
or restriction of any kind on the ability of any such Person to (i) pay
dividends or make any other distribution on any of such Person's Capital Stock,
(ii) pay any Indebtedness owed to any other Credit Party, (iii) make loans or
advances to any other Credit Party or (iv) transfer any of its property to any
other Credit Party, except for encumbrances or restrictions existing under or by
reason of (u) applicable law, (v) customary restrictions restricting assignment
of any licensing agreement, (w) customary non-assignment or net worth provisions
in any lease governing a leasehold interest, (x) any agreement or other
instrument of a Person existing at the time it becomes a Subsidiary of a Credit
Party; PROVIDED that such encumbrance or restriction is not applicable to any
other Person, or any property of any other Person, other than such Person
becoming a Subsidiary of a Credit Party and was not entered into in
contemplation of such Person becoming a Subsidiary of a Credit Party, (y)
customary financial covenant provisions in any agreement entered into in
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connection with the Indebtedness permitted by SECTION 6.02(A)(III) as long as
such financial covenants are not more restrictive than the financial covenants
set forth in this Agreement and (z) this Agreement and the other Loan Documents.
(l) NO OTHER NEGATIVE PLEDGES. No Credit Party will, nor will it
permit any of its Subsidiaries to, enter into, assume or become subject to any
agreement prohibiting or otherwise restricting the creation or assumption of any
Lien upon its properties or assets, whether now owned or hereafter acquired, or
requiring the grant of any security for such obligation if security is given for
some other obligation except (i) as set forth in the Loan Documents and (ii)
agreements entered into in connection with Indebtedness permitted by SECTION
6.02(A)(III) as long as such agreements do not prohibit Liens in favor of the
Lenders.
(m) LIMITATION ON FOREIGN OPERATIONS. The Credit Parties will not,
nor will they permit any of their Subsidiaries to, allow the Foreign
Subsidiaries to own assets which in the aggregate constitute more than five
percent (5%) of Total Assets of the Credit Parties at any time.
(n) CAPITAL EXPENDITURES. The Credit Parties will not permit the
amount of their Capital Expenditures plus commitments for future Capital
Expenditures to be paid within the then current fiscal year to exceed $3,000,000
during any fiscal year.
(o) PARENT. Parent will not, except to the extent necessary to
consummate the Merger in accordance with the Merger Agreements, engage in any
business activity or operation other than (i) owning and holding the Capital
Stock of Davel, (ii) guaranteeing the Obligations, (iii) pledging all of its
Property (including without limitation the Capital Stock of Davel) to the Agent,
on behalf of the Lenders, pursuant to the Collateral Documents, (iv) issuing
equity securities, (v) preparing filings required by the Securities Act or the
Exchange Act, (vi) preparing tax filings required by federal or state law and
(vii) other miscellaneous legal, tax and accounting activities related to the
foregoing. Furthermore, Parent will not, except to the extent necessary to
consummate the Merger in accordance with the Merger Agreements, (A) sell,
transfer or otherwise dispose of any shares of Capital Stock of Davel, (B) merge
with or into any other Person, (C) hold any Property other than (x) the Capital
Stock of Davel, and (y) such amounts allowed to be transferred to Parent
pursuant to SECTION 6.02(H), or (D) possess any liabilities other than the
liabilities under the Loan Documents, tax liabilities and other liabilities in
the ordinary course of business.
ARTICLE VII - EVENTS OF DEFAULT
SECTION 7.01 EVENTS OF DEFAULT. An Event of Default shall
exist upon the occurrence, and during the continuance, of any of the following
specified events (each an "Event of Default"):
(a) PAYMENT. Any Credit Party shall default in the payment (i) when
due of any principal of the Loans or (ii) within three Business Days of when due
of any interest on the Loans or any fees or other amounts owing hereunder, under
any of the other Loan Documents or in connection herewith.
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(b) REPRESENTATIONS. Any representation, warranty or statement made
or deemed to be made by any Credit Party herein, in any of the other Loan
Documents, or in any statement or certificate delivered or required to be
delivered pursuant hereto or thereto shall prove untrue in any material respect
on the date as of which it was made or deemed to have been made.
(c) COVENANTS. Any Credit Party shall:
(i) default in the due performance or observance of any term,
covenant or agreement contained in SECTIONS 6.01(B), (C), (E), (I), (J), (K) OR
SECTION 6.02;
(ii) default in the due performance or observance by it of any
term, covenant or agreement contained in SECTION 6.01(A) OR (L) and such default
shall continue unremedied for a period of five Business Days;
(iii) default in the due performance or observance by it of
any term, covenant or agreement (other than those referred to in subsections
(a), (b) or (c)(i) or (ii) of this SECTION 7.01) contained in this Agreement and
such default shall continue unremedied for a period of at least 30 days after
the earlier of a Credit Party becoming aware of such default or a Credit Party's
receipt of notice thereof from any Lender.
(d) OTHER LOAN DOCUMENTS. (i) Any Credit Party shall default in the
due performance or observance of any term, covenant or agreement in any of the
other Loan Documents and such default shall continue unremedied for a period of
at least 30 days after the earlier of a Credit Party becoming aware of such
default or notice thereof given by any Lender, or (ii) other than because of
acts or failure to act by any Lender or the Agent, any Loan Document shall fail
to be in full force and effect or any Credit Party shall so assert or any Loan
Document shall fail to give the Agent or any Lender the security interests,
liens, rights, powers and privileges purported to be created thereby.
(e) GUARANTIES. The Guaranty given by the Credit Parties hereunder
or by any Additional Credit Party hereafter or any provision thereof shall cease
to be in full force and effect, or any guarantor thereunder or any Person acting
by or on behalf of such guarantor shall deny or disaffirm such Guarantor's
obligations under such Guaranty.
(f) BANKRUPTCY, ETC. The occurrence of any of the following: (i) a
court or governmental agency having jurisdiction in the premises shall enter a
decree or order for relief in respect of any Credit Party or any of its
Subsidiaries in an involuntary case under any applicable bankruptcy, insolvency
or other similar law now or hereafter in effect, or appoint a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official of
any Credit Party or any of its Subsidiaries or for any substantial part of its
property or ordering the winding up or liquidation of its affairs; or (ii) an
involuntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect is commenced against any Credit Party or any of
its Subsidiaries and such petition remains unstayed and in effect for a period
of 60 consecutive days; or (iii) any Credit Party or any of its Subsidiaries
shall commence a voluntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or consent to the entry of an
order for relief in an involuntary case under any such law, or
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consent to the appointment or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of such Person or
any substantial part of its property or make any general assignment for the
benefit of creditors; or (iv) any Credit Party or any of its Subsidiaries shall
admit in writing its inability to pay its debts generally as they become due or
any action shall be taken by such Person in furtherance of any of the aforesaid
purposes.
(g) DEFAULTS UNDER OTHER AGREEMENTS.
(i) An Event of Default (as defined in the Senior Debt
Agreements) shall occur or exist or a Default (as defined in the Senior Debt
Agreements) shall occur or exist;
(ii) A Credit Party or any of its Subsidiaries shall default in
the due performance or observance (beyond the applicable grace period with
respect thereto) of any material obligation or condition of any other contract
or lease to which it is a party (excluding any default under the Loan Documents,
the Senior Debt Agreements, and any default in existence prior to the Closing
Date under any contract or Lease listed on SCHEDULE 5.01(F)), and such default
could reasonably be expected to have a Material Adverse Effect; or
(iii) With respect to any Indebtedness (other than Indebtedness
outstanding under this Agreement or the Senior Debt Agreements) of a Credit
Party or any of its Subsidiaries in a principal amount in excess of $100,000
individually, or $250,000 in the aggregate (A) such Person shall (x) default in
any payment (beyond the applicable grace period with respect thereto, if any)
with respect to any such Indebtedness, or (y) default (after giving effect to
any applicable grace period) in the observance or performance relating to such
Indebtedness or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event or condition shall occur or condition
exist, the effect of which default or other event or condition is to cause or
permit the holder or holders of such Indebtedness (or trustee or agent on behalf
of such holders) to cause (determined without regard to whether any notice or
lapse of time is required) any such Indebtedness to become due prior to its
stated maturity; or (B) any such Indebtedness shall be declared due and payable,
or required to be prepaid other than by a regularly scheduled required
prepayment prior to the stated maturity thereof; or (C) any such Indebtedness
shall mature and remain unpaid.
(h) JUDGMENTS. One or more judgments, orders, or decrees
(including, without limitation, any judgment, order, or decree with respect to
any litigation disclosed pursuant to the Loan Documents) shall be entered
against any one or more of the Credit Parties and its Subsidiaries involving a
liability of $250,000 or more, in the aggregate, (to the extent not paid or
covered by insurance provided by a carrier who has acknowledged coverage) and
such judgments, orders or decrees (i) are the subject of any enforcement
proceeding commenced by any creditor or (ii) shall continue unsatisfied,
undischarged and unstayed for a period ending on the first to occur of (A) the
last day on which such judgment, order or decree becomes final and unappealable
or (B) 60 days.
(i) ERISA. The occurrence of any of the following events or
conditions which could reasonably be expected to have a Material Adverse Effect:
(A) any "accumulated funding deficiency," as such term is defined in Section 302
of ERISA and Section
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412 of the Code, whether or not waived, shall exist with respect to any Plan, or
any Lien shall arise on the assets of any Credit Party or any ERISA Affiliate in
favor of the PBGC or a Plan; (B) a Termination Event shall occur with respect to
a Single Employer Plan, which is likely to result in the termination of such
Plan for purposes of Title IV of ERISA; (C) a Termination Event shall occur with
respect to a Multiemployer Plan or Multiple Employer Plan, which is likely to
result in (i) the termination of such Plan for purposes of Title IV of ERISA, or
(ii) any Credit Party or any ERISA Affiliate incurring any liability in
connection with a withdrawal from, reorganization of (within the meaning of
Section 4241 of ERISA), or insolvency (within the meaning of Section 4245 of
ERISA) of such Plan; or (D) any prohibited transaction (within the meaning of
Section 406 of ERISA or Section 4975 of the Code) or breach of fiduciary
responsibility shall occur which may subject any Credit Party or any ERISA
Affiliate to any liability under Sections 406, 409, 502(i), or 502(l) of ERISA
or Section 4975 of the Code, or under any agreement or other instrument pursuant
to which any Credit Party or any ERISA Affiliate has agreed or is required to
indemnify any person against any such liability.
(j) OWNERSHIP. There shall occur a Change of Control.
(k) MATERIAL LOSS OF COLLATERAL. There shall occur any loss, theft,
damage or destruction of any item or items of Collateral which either (i) has
had or is reasonably expected to have a Material Adverse Effect or (ii)
materially and adversely affects the operation of the Credit Parties' business,
taken as a whole, and is not covered by insurance as required herein.
SECTION 7.02 ACCELERATION; REMEDIES. Upon the occurrence and during the
continuance of an Event of Default and at any time thereafter unless and until
such Event of Default has been waived in writing by the Required Lenders (or all
of the Lenders as may be required hereunder), the Required Lenders may authorize
and instruct the Agent to do any one or more of the following and in such event
the Agent shall give written notice thereof to the Borrowers:
(a) [Intentionally Omitted]
(b) ACCELERATION OF LOANS. Declare the unpaid principal of and any
accrued interest on the Loans and any and all other indebtedness or obligations
of any and every kind owing by a Credit Party to any of the Lenders hereunder to
be due whereupon the same shall be immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Credit Parties.
(c) ENFORCEMENT OF RIGHTS. Enforce any and all rights and interests
created and existing under the Loan Documents, including, without limitation,
all rights and remedies existing under the Security Agreement, all rights and
remedies against a Guarantor and all rights of set-off.
Notwithstanding the foregoing, if an Event of Default
specified in SECTION 7.01(F) shall occur, then all Loans, all accrued interest
thereon, and all accrued and unpaid fees and other indebtedness or obligations
owing to the Lenders hereunder shall immediately become due and
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payable without the giving of any notice or other action by the Lenders, which
notice or other action is expressly waived by the Credit Parties.
Each Lender has, to the extent permitted by law, a separate right of
payment and shall be considered a separate 'creditor' holding a separate 'claim'
within the meaning of Section 101(5) of the Bankruptcy Code or any other
insolvency statute.
SECTION 7.03 ALLOCATION OF PAYMENTS AFTER EVENT OF DEFAULT.
Notwithstanding any other provisions of this Agreement and subject to
the terms of the Intercreditor Agreement, after the occurrence and during the
continuance of an Event of Default, all amounts collected or received by the
Agent or any Lender on account of amounts outstanding under any of the Loan
Documents or in respect of the Collateral shall be paid over or delivered as
follows:
FIRST, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation reasonable attorneys' fees) of the Agent
and the Lenders in connection with enforcing the rights of the Agent and the
Lenders under the Loan Documents and any protective advances made by the Agent
or any of the Lenders with respect to the Collateral under or pursuant to the
terms of the Collateral Documents;
SECOND, to payment of any fees owed to any Lender under the
Loan Documents;
THIRD, to payment of all accrued interest payable to the
Lenders hereunder and all other obligations (other than those obligations to be
paid pursuant to clause "FOURTH" below) which shall have become due and payable
under the Loan Documents and not repaid pursuant to clauses "FIRST" and "SECOND"
above;
FOURTH, to the payment of the outstanding principal amount of
the Loans, pro rata as set forth below; and
FIFTH, the payment of the surplus, if any, to whoever may be
lawfully entitled to receive such surplus.
In carrying out the foregoing, (a) amounts received shall be applied
in the numerical order provided until exhausted prior to application to the next
succeeding category; and (b) each of the Lenders shall receive an amount equal
to its pro rata share (based on the proportion that the then outstanding Loans
held by such Lender bears to the aggregate then outstanding Loans) of amounts
available to be applied.
ARTICLE VIII - AGENT; THE LENDERS.
SECTION 8.01 APPOINTMENT AND AUTHORIZATION OF AGENT. Each Lender hereby
designates and appoints Foothill as its representative under this Agreement and
the other Loan Documents and each Lender hereby irrevocably authorizes Agent to
take such action on its behalf under the provisions of this Agreement and each
other Loan Document and to exercise such powers and perform such duties as are
expressly delegated to Agent by the terms of this
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Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Agent agrees to act as such on the express
conditions contained in this ARTICLE VIII. The provisions of this ARTICLE VIII
are solely for the benefit of Agent and the Lenders, and Borrowers shall have no
rights as a third party beneficiary of any of the provisions contained herein.
Any provision to the contrary contained elsewhere in this Agreement or in any
other Loan Document notwithstanding, Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall Agent have
or be deemed to have any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or any other Loan Document or otherwise exist
against Agent; it being expressly understood and agreed that the use of the word
"Agent" is for convenience only, that Foothill is merely the representative of
the Lenders, and only has the contractual duties set forth herein. Except as
expressly otherwise provided in this Agreement, Agent shall have and may use its
sole discretion with respect to exercising or refraining from exercising any
discretionary rights or taking or refraining from taking any actions that Agent
expressly is entitled to take or assert under or pursuant to this Agreement and
the other Loan Documents. Without limiting the generality of the foregoing, or
of any other provision of the Loan Documents that provides rights or powers to
Agent, Lenders agree that Agent shall have the right to exercise the following
powers as long as this Agreement remains in effect: (a) maintain, in accordance
with its customary business practices, ledgers and records reflecting the status
of the Obligations, the Collateral, the Collections, and related matters, (b)
execute or file any and all financing or similar statements or notices,
amendments, renewals, supplements, documents, instruments, proofs of claim, and
notices with respect to the Loan Documents, (c) exclusively receive, apply, and
distribute the Collections as provided in the Loan Documents, (d) open and
maintain such bank accounts and cash management accounts as Agent deems
necessary and appropriate in accordance with the Loan Documents for the
foregoing purposes with respect to the Collateral and the Collections, (e)
perform, exercise, and enforce any and all other rights and remedies of the
Lenders with respect to Borrowers, the Obligations, the Collateral, the
Collections, or otherwise related to any of same as provided in the Loan
Documents, and (f) incur and pay such expenses as Agent may deem necessary or
appropriate for the performance and fulfillment of its functions and powers
pursuant to the Loan Documents.
SECTION 8.02 DELEGATION OF DUTIES. Agent may execute any of
its duties under this Agreement or any other Loan Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. Agent shall not be responsible
for the negligence or misconduct of any agent or attorney-in-fact that it
selects as long as such selection was made without gross negligence or willful
misconduct.
SECTION 8.03 LIABILITY OF AGENT. None of the Agent-Related
Persons shall (i) be liable for any action taken or omitted to be taken by any
of them under or in connection with this Agreement or any other Loan Document or
the transactions contemplated hereby (except for its own gross negligence or
willful misconduct), or (ii) be responsible in any manner to any of the Lenders
for any recital, statement, representation or warranty made by any Borrower or
any Subsidiary or Affiliate of any Borrower, or any officer or director thereof,
contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for in,
or received by Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness,
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genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document, or for any failure of any Borrower or any other party to any Loan
Document to perform its obligations hereunder or thereunder. No Agent-Related
Person shall be under any obligation to any Lender to ascertain or to inquire as
to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
books or records or properties of Borrowers or any of Borrowers' Subsidiaries or
Affiliates.
SECTION 8.04 RELIANCE BY AGENT. Agent shall be entitled to
rely, and shall be fully protected in relying, upon any writing, resolution,
notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or
telephone message, statement or other document or conversation believed by it to
be genuine and correct and to have been signed, sent, or made by the proper
Person or Persons, and upon advice and statements of legal counsel (including
counsel to Borrowers or counsel to any Lender), independent accountants and
other experts selected by Agent. Agent shall be fully justified in failing or
refusing to take any action under this Agreement or any other Loan Document
unless Agent shall first receive such advice or concurrence of the Lenders as it
deems appropriate and until such instructions are received, Agent shall act, or
refrain from acting, as it deems advisable. If Agent so requests, it shall first
be indemnified to its reasonable satisfaction by the Lenders against any and all
liability and expense that may be incurred by it by reason of taking or
continuing to take any such action. Agent shall in all cases be fully protected
in acting, or in refraining from acting, under this Agreement or any other Loan
Document in accordance with a request or consent of the Lenders and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all of the Lenders.
SECTION 8.05 NOTICE OF DEFAULT OR EVENT OF DEFAULT. Agent
shall not be deemed to have knowledge or notice of the occurrence of any Default
or Event of Default, except with respect to defaults in the payment of
principal, interest, fees, and expenses required to be paid to Agent for the
account of the Lenders, except with respect to Events of Default of which Agent
has actual knowledge, unless Agent shall have received written notice from a
Lender or Borrower referring to this Agreement, describing such Default or Event
of Default, and stating that such notice is a "notice of default." Agent
promptly will notify the Lenders of its receipt of any such notice or of any
Event of Default of which Agent has actual knowledge. If any Lender obtains
actual knowledge of any Event of Default other than from the Agent, such Lender
promptly shall notify the other Lenders and Agent of such Event of Default. Each
Lender shall be solely responsible for giving any notices to its participants,
if any. Subject to SECTION 8.04, Agent shall take such action with respect to
such Default or Event of Default as may be requested by the Required Lenders in
accordance with SECTION 7.02; PROVIDED, HOWEVER, that unless and until Agent has
received any such request, Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable.
SECTION 8.06 CREDIT DECISION. Each Lender acknowledges that
none of the Agent-Related Persons has made any representation or warranty to it,
and that no act by Agent hereinafter taken, including any review of the affairs
of Borrowers and their Subsidiaries or Affiliates, shall be deemed to constitute
any representation or warranty by any Agent-Related Person to any Lender. Each
Lender represents to Agent that it has, independently and without reliance upon
any Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects,
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operations, property, financial and other condition and creditworthiness of
Borrowers and any other Person (other than the Lenders) party to a Loan
Document, and all applicable bank regulatory laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement and
to extend credit to Borrowers. Each Lender also represents that it will,
independently and without reliance upon any Agent-Related Person and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of Borrowers and any other Person (other than the Lenders)
party to a Loan Document. Except for notices, reports, and other documents
expressly herein required to be furnished to the Lenders by Agent, Agent shall
not have any duty or responsibility to provide any Lender with any credit or
other information concerning the business, prospects, operations, property,
financial and other condition or creditworthiness of Borrowers and any other
Person party to a Loan Document that may come into the possession of any of the
Agent-Related Persons.
SECTION 8.07 COSTS AND EXPENSES; INDEMNIFICATION. Agent may
incur and pay expenses to the extent Agent reasonably deems necessary or
appropriate for the performance and fulfillment of its functions, powers, and
obligations pursuant to the Loan Documents, including court costs, reasonable
attorneys fees and expenses, costs of collection by outside collection agencies
and auctioneer fees and costs of security guards or insurance premiums paid to
maintain the Collateral, whether or not Borrowers are obligated to reimburse
Agent or Lenders for such expenses pursuant to this Agreement or otherwise.
Agent is authorized and directed to deduct and retain sufficient amounts from
Collections received by Agent to reimburse Agent for such out-of-pocket costs
and expenses prior to the distribution of any amounts to Lenders. In the event
Agent is not reimbursed for such costs and expenses from Collections received by
Agent, each Lender hereby agrees that it is and shall be obligated to pay to or
reimburse Agent for the amount of such Lender's Pro Rata Share thereof. Whether
or not the transactions contemplated hereby are consummated, the Lenders shall
indemnify upon demand the Agent-Related Persons (to the extent not reimbursed by
or on behalf of Borrowers and without limiting the obligation of Borrowers to do
so), according to their pro rata shares, from and against any and all
indemnified liabilities; PROVIDED, HOWEVER, that no Lender shall be liable for
the payment to any Agent-Related Person of any portion of such indemnified
liabilities resulting solely from such Person's gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender shall reimburse
Agent upon demand for such Lender's ratable share of any costs or out-of-pocket
expenses (including reasonable attorneys fees and expenses) incurred by Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment, or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein, to the extent that Agent is not
reimbursed for such expenses by or on behalf of Borrowers. The undertaking in
this Section shall survive the payment of all Obligations hereunder and the
resignation or replacement of Agent.
SECTION 8.08 AGENT IN INDIVIDUAL CAPACITY. Foothill and its
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity
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interests in, and generally engage in any kind of banking, trust, financial
advisory, underwriting, or other business with Borrowers and their Subsidiaries
and Affiliates and any other Person (other than the Lenders) party to any Loan
Documents as though Foothill were not Agent hereunder, and, in each case,
without notice to or consent of the other Lenders. The other Lenders acknowledge
that, pursuant to such activities, Foothill or its Affiliates may receive
information regarding Borrowers or their Affiliates and any other Person (other
than the Lenders) party to any Loan Documents that is subject to confidentiality
obligations in favor of such other Person and that prohibit the disclosure of
such information to the Lenders, and the Lenders acknowledge that, in such
circumstances (and in the absence of a waiver of such confidentiality
obligations, which waiver Agent will use its reasonable best efforts to obtain),
Agent shall not be under any obligation to provide such information to them. The
terms "Lender" and "Lenders" include Foothill in its individual capacity.
SECTION 8.09 SUCCESSOR AGENT. Agent may resign as Agent upon
45 days notice to the Lenders. If Agent resigns under this Agreement, the
Required Lenders shall appoint a successor Agent for the Lenders. If no
successor Agent is appointed prior to the effective date of the resignation of
Agent, Agent may appoint, after consulting with the Lenders, a successor Agent.
If Agent has materially breached or failed to perform any material provision of
this Agreement or of applicable law, the Required Lenders may agree in writing
to remove and replace Agent with a successor Agent from among the Lenders. In
any such event, upon the acceptance of its appointment as successor Agent
hereunder, such successor Agent shall succeed to all the rights, powers, and
duties of the retiring Agent and the term "Agent" shall mean such successor
Agent and the retiring Agent's appointment, powers, and duties as Agent shall be
terminated. After any retiring Agent's resignation hereunder as Agent, the
provisions of this ARTICLE VIII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement. If
no successor Agent has accepted appointment as Agent by the date which is 45
days following a retiring Agent's notice of resignation, the retiring Agent's
resignation shall nevertheless thereupon become effective and the Lenders shall
perform all of the duties of Agent hereunder until such time, if any, as the
Lenders appoint a successor Agent as provided for above.
SECTION 8.10 LENDER IN INDIVIDUAL CAPACITY. Any Lender and its
respective Affiliates may make loans to, issue letters of credit for the account
of, accept deposits from, acquire equity interests in and generally engage in
any kind of banking, trust, financial advisory, underwriting or other business
with Borrowers and their Subsidiaries and Affiliates and any other Person (other
than the Lenders) party to any Loan Documents as though such Lender were not a
Lender hereunder without notice to or consent of the other Lenders. The other
Lenders acknowledge that, pursuant to such activities, such Lender and its
respective Affiliates may receive information regarding Borrowers or their
Affiliates and any other Person (other than the Lenders) party to any Loan
Documents that is subject to confidentiality obligations in favor of Borrowers
or such other Person and that prohibit the disclosure of such information to the
Lenders, and the Lenders acknowledge that, in such circumstances (and in the
absence of a waiver of such confidentiality obligations, which waiver such
Lender will use its reasonable best efforts to obtain), such Lender not shall be
under any obligation to provide such information to them.
SECTION 8.11 WITHHOLDING TAXES.
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(a) If any Lender is a "foreign corporation, partnership or trust"
within the meaning of the IRC and such Lender claims exemption from, or a
reduction of, U.S. withholding tax under Sections 1441 or 1442 of the IRC, such
Lender agrees with and in favor of Agent and Borrowers, to deliver to Agent and
Borrowers:
(i) if such Lender claims an exemption from withholding tax
pursuant to its portfolio interest exception, (a) a statement of the Lender,
signed under penalty of perjury, that it is not a (I) a "bank" as described in
Section 881(c)(3)(A) of the IRC, (II) a 10% shareholder (within the meaning of
Section 881(c)(3)(B) of the IRC), or (III) a controlled foreign corporation
described in Section 881(c)(3)(C) of the IRC, and (B) a properly completed IRS
Form W-8BEN, before the first payment of any interest under this Agreement and
at any other time reasonably requested by Agent or Borrowers;
(ii) if such Lender claims an exemption from, or a reduction
of, withholding tax under a United States tax treaty, properly completed IRS
Form W-8BEN before the first payment of any interest under this Agreement and at
any other time reasonably requested by Agent or Borrowers;
(iii) if such Lender claims that interest paid under this
Agreement is exempt from United States withholding tax because it is effectively
connected with a United States trade or business of such Lender, two properly
completed and executed copies of IRS Form W-8ECI before the first payment of any
interest is due under this Agreement and at any other time reasonably requested
by Agent or Borrowers;
(iv) such other form or forms as may be required under the IRC
or other laws of the United States as a condition to exemption from, or
reduction of, United States withholding tax.
Such Lender agrees promptly to notify Agent and Borrowers of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction.
(b) If any Lender claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS Form W-8BEN
and such Lender sells, assigns, grants a participation in, or otherwise
transfers all or part of the Obligations of Borrowers to such Lender, such
Lender agrees to notify Agent of the percentage amount in which it is no longer
the beneficial owner of Obligations of Borrowers to such Lender. To the extent
of such percentage amount, Agent will treat such Lender's IRS Form W-8BEN as no
longer valid.
(c) If any Lender is entitled to a reduction in the applicable
withholding tax, Agent may withhold from any interest payment to such Lender an
amount equivalent to the applicable withholding tax after taking into account
such reduction. If the forms or other documentation required by subsection (a)
of this Section are not delivered to Agent, then Agent may withhold from any
interest payment to such Lender not providing such forms or other documentation
an amount equivalent to the applicable withholding tax.
(d) If the IRS or any other Governmental Authority of the United
States or other jurisdiction asserts a claim that Agent did not properly
withhold tax from amounts paid to
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or for the account of any Lender (because the appropriate form was not
delivered, was not properly executed, or because such Lender failed to notify
Agent of a change in circumstances which rendered the exemption from, or
reduction of, withholding tax ineffective, or for any other reason) such Lender
shall indemnify and hold Agent harmless for all amounts paid, directly or
indirectly, by Agent as tax or otherwise, including penalties and interest, and
including any taxes imposed by any jurisdiction on the amounts payable to Agent
under this Section, together with all costs and expenses (including attorneys
fees and expenses). The obligation of the Lenders under this subsection shall
survive the payment of all Obligations and the resignation or replacement of
Agent.
(e) All payments made by Borrowers hereunder or under any Note or
other Loan Document will be made without setoff, counterclaim, or other defense,
except as required by applicable law other than for Taxes (as defined below).
All such payments will be made free and clear of, and without deduction or
withholding for, any present or future taxes, levies, imposts, duties, fees,
assessments or other charges of whatever nature now or hereafter imposed by any
jurisdiction (other than the United States) or by any political subdivision or
taxing authority thereof or therein (other than of the United States) with
respect to such payments (but excluding, any tax imposed by any jurisdiction or
by any political subdivision or taxing authority thereof or therein (i) measured
by or based on the net income or net profits of a Lender, or (ii) to the extent
that such tax results from a change in the circumstances of the Lender,
including a change in the residence, place of organization, or principal place
of business of the Lender, or a change in the branch or lending office of the
Lender participating in the transactions set forth herein) and all interest,
penalties or similar liabilities with respect thereto (all such non-excluded
taxes, levies, imposts, duties, fees, assessments or other charges being
referred to collectively as "Taxes"). If any Taxes are so levied or imposed,
each Borrower agrees to pay the full amount of such Taxes, and such additional
amounts as may be necessary so that every payment of all amounts due under this
Agreement or under any Note, including any amount paid pursuant to this SECTION
8.11(E) after withholding or deduction for or on account of any Taxes, will not
be less than the amount provided for herein; PROVIDED, HOWEVER, that Borrowers
shall not be required to increase any such amounts payable to Agent or any
Lender (i) that is not organized under the laws of the United States, if such
Person fails to comply with the other requirements of this SECTION 8.11, or (ii)
if the increase in such amount payable results from Agent's or such Lender's own
willful misconduct or gross negligence. Borrowers will furnish to Agent as
promptly as possible after the date the payment of any Taxes is due pursuant to
applicable law certified copies of tax receipts evidencing such payment by
Borrowers.
SECTION 8.12 COLLATERAL MATTERS.
(a) The Lenders hereby irrevocably authorize Agent, at its option
and in its sole discretion, to release any Lien on any Collateral (i) upon the
payment and satisfaction in full by Borrowers of all Obligations, (ii)
constituting property being sold or disposed of if a release is required or
desirable in connection therewith and if Borrowers certify to Agent that the
sale or disposition is permitted under SECTION 6.02(E) of this Agreement or the
other Loan Documents (and Agent may rely conclusively on any such certificate,
without further inquiry), (iii) constituting property in which no Borrower owned
any interest at the time the security interest was granted or at any time
thereafter, or (iv) constituting property leased to a Borrower
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under a lease that has expired or is terminated in a transaction permitted under
this Agreement. Except as provided above, Agent will not execute and deliver a
release of any Lien on any Collateral without the prior written authorization of
(y) if the release is of all or substantially all of the Collateral, all of the
Lenders, or (z) otherwise, the Required Lenders. Upon request by Agent or
Borrowers at any time, the Lenders will confirm in writing Agent's authority to
release any such Liens on particular types or items of Collateral pursuant to
this SECTION 8.12; PROVIDED, HOWEVER, that (1) Agent shall not be required to
execute any document necessary to evidence such release on terms that, in
Agent's opinion, would expose Agent to liability or create any obligation or
entail any consequence other than the release of such Lien without recourse,
representation, or warranty, and (2) such release shall not in any manner
discharge, affect, or impair the Obligations or any Liens (other than those
expressly being released) upon (or obligations of Borrowers in respect of) all
interests retained by Borrowers, including, the proceeds of any sale, all of
which shall continue to constitute part of the Collateral.
(b) Agent shall have no obligation whatsoever to any of the Lenders
to assure that the Collateral exists or is owned by Borrowers or is cared for,
protected, or insured or has been encumbered, or that the Agent's Liens have
been properly or sufficiently or lawfully created, perfected, protected, or
enforced or are entitled to any particular priority, or to exercise at all or in
any particular manner or under any duty of care, disclosure or fidelity, or to
continue exercising, any of the rights, authorities and powers granted or
available to Agent pursuant to any of the Loan Documents, it being understood
and agreed that in respect of the Collateral, or any act, omission, or event
related thereto, subject to the terms and conditions contained herein, Agent may
act in any manner it may deem appropriate, in its sole discretion given Agent's
own interest in the Collateral in its capacity as one of the Lenders and that
Agent shall have no other duty or liability whatsoever to any Lender as to any
of the foregoing, except as otherwise provided herein.
SECTION 8.13 RESTRICTIONS ON ACTIONS BY LENDERS; SHARING OF PAYMENTS.
(a) Each of the Lenders agrees that it shall not, without the
express consent of Agent, and that it shall, to the extent it is lawfully
entitled to do so, upon the request of Agent, set off against the Obligations,
any amounts owing by such Lender to a Credit Party or any deposit accounts of a
Credit Party now or hereafter maintained with such Lender. Each of the Lenders
further agrees that it shall not, unless specifically requested to do so by
Agent, take or cause to be taken any action, including, the commencement of any
legal or equitable proceedings, to foreclose any Lien on, or otherwise enforce
any security interest in, any of the Collateral the purpose of which is, or
could be, to give such Lender any preference or priority against the other
Lenders with respect to the Collateral.
(b) If, at any time or times any Lender shall receive (i) by
payment, foreclosure, setoff, or otherwise, any proceeds of Collateral or any
payments with respect to the Obligations arising under, or relating to, this
Agreement or the other Loan Documents, except for any such proceeds or payments
received by such Lender from Agent pursuant to the terms of this Agreement, or
(ii) payments from Agent in excess of such Lender's ratable portion of all such
distributions by Agent, such Lender promptly shall (1) turn the same over to
Agent, in kind, and with such endorsements as may be required to negotiate the
same to Agent, or in immediately available funds, as applicable, for the account
of all of the Lenders and for application to the
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Obligations in accordance with the applicable provisions of this Agreement, or
(2) purchase, without recourse or warranty, an undivided interest and
participation in the Obligations owed to the other Lenders so that such excess
payment received shall be applied ratably as among the Lenders in accordance
with their pro rata shares; provided, however, that if all or part of such
excess payment received by the purchasing party is thereafter recovered from it,
those purchases of participations shall be rescinded in whole or in part, as
applicable, and the applicable portion of the purchase price paid therefor shall
be returned to such purchasing party, but without interest except to the extent
that such purchasing party is required to pay interest in connection with the
recovery of the excess payment.
SECTION 8.14 AGENCY FOR PERFECTION. Agent hereby appoints each
other Lender as its agent (and each Lender hereby accepts such appointment) for
the purpose of perfecting the Agent's Liens in assets which, in accordance with
Article 9 of the UCC can be perfected only by possession. Should any Lender
obtain possession of any such Collateral, such Lender shall notify Agent
thereof, and, promptly upon Agent's request therefor shall deliver such
Collateral to Agent or in accordance with Agent's instructions.
SECTION 8.15 PAYMENTS BY AGENT TO THE LENDERS. All payments to
be made by Agent to the Lenders shall be made by bank wire transfer or internal
transfer of immediately available funds pursuant to such wire transfer
instructions as each party may designate for itself by written notice to Agent.
SECTION 8.16 CONCERNING THE COLLATERAL AND RELATED LOAN
DOCUMENTS. Each Lender authorizes and directs Agent to enter into this Agreement
and the other Loan Documents relating to the Collateral, for the benefit of such
Lender. Each Lender agrees that any action taken by Agent in accordance with the
terms of this Agreement or the other Loan Documents relating to the Collateral
and the exercise by Agent of its powers set forth therein or herein, together
with such other powers that are reasonably incidental thereto, shall be binding
upon all of the Lenders.
SECTION 8.17 FIELD AUDITS AND EXAMINATION REPORTS;
CONFIDENTIALITY; DISCLAIMERS BY LENDERS; OTHER REPORTS AND INFORMATION. By
becoming a party to this Agreement, each Lender:
(a) is deemed to have requested that Agent furnish such Lender,
promptly after it becomes available, a copy of each field audit or examination
report (each a "REPORT" and collectively, "REPORTS") prepared by Agent, and
Agent shall so furnish each Lender with such Reports,
(b) expressly agrees and acknowledges that Agent does not (i) make
any representation or warranty as to the accuracy of any Report, and (ii) shall
not be liable for any information contained in any Report,
(c) expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that Agent or other party performing any
audit or examination will inspect only specific information regarding Borrowers
and will rely significantly upon the Borrowers' books and records, as well as on
representations of Borrowers' personnel,
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(d) agrees to keep all Reports and other material, non-public
information regarding Borrowers and their Subsidiaries and their operations,
assets, and existing and contemplated business plans in a confidential manner;
it being understood and agreed by Borrowers that in any event such Lender may
make disclosures (i) to counsel for and other advisors, accountants, and
auditors to such Lender, (ii) reasonably required by any bona fide potential or
actual assignee or participant in connection with any contemplated or actual
assignment or transfer by such Lender of an interest herein or any participation
interest in such Lender's rights hereunder, (iii) of information that has become
public by disclosures made by Persons other than such Lender, its Affiliates,
assignees, transferees, or participants, or (iv) as required or requested by any
court, governmental or administrative agency, pursuant to any subpoena or other
legal process, or by any law, statute, regulation, or court order; PROVIDED,
HOWEVER, that, unless prohibited by applicable law, statute, regulation, or
court order, such Lender shall notify Borrowers of any request by any court,
governmental or administrative agency, or pursuant to any subpoena or other
legal process for disclosure of any such non-public material information
concurrent with, or where practicable, prior to the disclosure thereof, and
(e) without limiting the generality of any other indemnification
provision contained in this Agreement, agrees: (i) to hold Agent and any such
other Lender preparing a Report harmless from any action the indemnifying Lender
may take or conclusion the indemnifying Lender may reach or draw from any Report
in connection with any loans or other credit accommodations that the
indemnifying Lender has made or may make to Borrowers, or the indemnifying
Lender's participation in, or the indemnifying Lender's purchase of, a loan or
loans of Borrowers; and (ii) to pay and protect, and indemnify, defend and hold
Agent, and any such other Lender preparing a Report harmless from and against,
the claims, actions, proceedings, damages, costs, expenses, and other amounts
(including, reasonable attorneys fees and costs) incurred by Agent and any such
other Lender preparing a Report as the direct or indirect result of any third
parties who might obtain all or part of any Report through the indemnifying
Lender.
In addition to the foregoing: (y) any Lender may from time to time request of
Agent in writing that Agent provide to such Lender a copy of any report or
document provided by Borrowers to Agent that has not been contemporaneously
provided by Borrowers to such Lender, and, upon receipt of such request, Agent
shall provide a copy of same to such Lender, (z) to the extent that Agent is
entitled, under any provision of the Loan Documents, to request additional
reports or information from Borrowers, any Lender may, from time to time,
reasonably request Agent to exercise such right as specified in such Lender's
notice to Agent, whereupon Agent promptly shall request of Borrowers the
additional reports or information reasonably specified by such Lender, and, upon
receipt thereof from Borrowers, Agent promptly shall provide a copy of same to
such Lender.
SECTION 8.18 SEVERAL OBLIGATIONS; NO LIABILITY. Nothing
contained herein shall confer upon any Lender any interest in, or subject any
Lender to any liability for, or in respect of, the business, assets, profits,
losses, or liabilities of any other Lender. Each Lender shall be solely
responsible for notifying its participants of any matters relating to the Loan
Documents to the extent any such notice may be required, and no Lender shall
have any obligation, duty, or liability to any participant of any other Lender.
Except as provided in
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SECTION 8.7, no Lender shall have any liability for the acts of any other
Lender. No Lender shall be responsible to any Borrower or any other Person for
any failure by any other Lender to fulfill its obligations to take any action on
its behalf hereunder or in connection with the financing contemplated herein.
SECTION 8.19 LEGAL REPRESENTATION OF AGENT. In connection with
the negotiation, drafting, and execution of this Agreement and the other Loan
Documents, or in connection with future legal representation relating to loan
administration, amendments, modifications, waivers, or enforcement of remedies,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP ("▇▇▇▇▇▇▇") only has represented and only shall
represent Foothill in its capacity as Agent and as a Lender. Each other Lender
hereby acknowledges that ▇▇▇▇▇▇▇ does not represent it in connection with any
such matters.
RTICLE IX - MISCELLANEOUS
SECTION 9.01 AMENDMENTS, ETC. Neither this Agreement nor any
other Loan Document nor any of the terms hereof or thereof may be amended,
changed, waived, discharged or terminated unless such amendment, change, waiver,
discharge or termination is in writing and signed by the Required Lenders and
the Borrowers; PROVIDED that no such amendment, change, waiver, discharge or
termination shall without the consent of each Lender:
(a) extend the Maturity Date or postpone or extend or waive any
scheduled payment of any Loan or any portion thereof;
(b) reduce the rate or extend the time of payment of interest
(other than as a result of waiving the applicability of any post-default
increase in interest rates) thereon or fees hereunder;
(c) reduce or waive the principal amount of any Loan;
(d) subordinate the Agent's Liens in all or substantially all of
the Collateral;
(e) release all or substantially all of the Collateral securing the
Obligations hereunder (provided that the Agent may, without consent from any
other Lender, release any Collateral that is sold or transferred by a Credit
Party in conformance with SECTION 6.02(E));
(f) release any of the Borrowers from their obligations or release
all or substantially all of the other Credit Parties from their respective
obligations under the Loan Documents;
(g) amend, modify or waive any provision of this Section;
(h) reduce any percentage specified in, or otherwise modify, the
definition of Required Lenders;
(i) consent to the assignment or transfer by any of the Borrowers
of any of their rights and obligations under (or in respect of) the Loan
Documents; or
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(j) amend, modify or waive SECTION 2.04(b) or any of the provisions
of this Agreement requiring pro rata reatment of payments.
Notwithstanding the fact that the consent of all the Lenders is required in
certain circumstances as set forth above, (x) each Lender is entitled to vote as
such Lender sees fit on any reorganization plan that affects the Loans, and each
Lender acknowledges that the provisions of Section 1126(c) of the Bankruptcy
Code supersede the unanimous consent provisions set forth herein and (y) the
Required Lenders may consent to allow a Credit Party to use cash collateral in
the context of a bankruptcy or insolvency proceeding.
SECTION 9.02 NOTICES. Unless otherwise provided in this
Agreement, all notices or demands by the Credit Parties or Agent to the other
relating to this Agreement or any other Loan Document shall be in writing and
(except for financial statements and other informational documents which may be
sent by first-class mail, postage prepaid) shall be personally delivered or sent
by registered or certified mail (postage prepaid, return receipt requested),
overnight courier, electronic mail (at such email addresses as the Credit
Parties or Agent, as applicable, may designate to each other in accordance
herewith), or telefacsimile to the Credit Parties or to Agent, as the case may
be, at its address set forth below:
If to the Credit Parties:
DAVEL COMMUNICATIONS, INC.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ - ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Fax No. ▇▇▇.▇▇▇.▇▇▇▇
with copies to: ▇▇▇▇ ▇▇▇▇▇▇ & PARKS LLP
▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇'▇▇▇▇▇, Esq.
Fax No. ▇▇▇.▇▇▇.▇▇▇▇
If to Agent: FOOTHILL CAPITAL CORPORATION
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇, Vice President
Fax No. ▇▇▇.▇▇▇.▇▇▇▇
with copies to: ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇ Hilson, Esq.
Fax No. ▇▇▇.▇▇▇.▇▇▇▇
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Agent and the Credit Parties may change the address at which they are to receive
notices hereunder, by notice in writing in the foregoing manner given to the
other party. All notices or demands sent in accordance with this SECTION 9.02,
other than notices by Agent in connection with enforcement rights against the
Collateral under the provisions of the Code, shall be deemed received on the
earlier of the date of actual receipt or 3 Business Days after the deposit
thereof in the mail. Each Credit Party acknowledges and agrees that notices sent
by the Lenders in connection with the exercise of enforcement rights against
Collateral under the provisions of the Code shall be deemed sent when deposited
in the mail or personally delivered, or, where permitted by law, transmitted by
telefacsimile or any other method set forth above.
SECTION 9.03 NO WAIVER; REMEDIES. No failure on the part of
any Lender to exercise, and no delay in exercising, any right, power or
privilege hereunder or under any other Loan Document and no course of dealing
between any Borrower or any Credit Party and any Lender shall operate as a
waiver thereof; nor shall any single or partial exercise of any other right,
power or privilege hereunder or under any other Loan Document preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege hereunder or thereunder. The remedies herein provided are cumulative
and not exclusive of any rights or remedies which any Lender would otherwise
have. No notice to or demand on any Credit Party in any case shall entitle any
Credit Party to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of any Lender to any other or
further action in any circumstances without notice or demand.
SECTION 9.04 BENEFIT OF AGREEMENT.
(a) GENERALLY. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the respective successors and assigns of
the parties hereto; provided that none of the Credit Parties may assign and
transfer any of its interests without the prior written consent of the Lenders;
and provided further that the rights of each Lender to transfer, assign or grant
participations in its rights and/or obligations hereunder shall be limited as
set forth below in this SECTION 9.04.
(b) ASSIGNMENTS. Each Lender may assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Loans and its Notes);
PROVIDED, HOWEVER, that:
(i) each such assignment shall be to an Eligible Assignee;
(ii) except in the case of an assignment to another Lender or
an Approved Fund or Affiliate of any Lender or an assignment of all of a
Lender's rights and obligations under this Agreement, any such partial
assignment shall be in an amount at least equal to $1,000,000 (or, if less, the
remaining amount of the Loans being assigned by such Lender) or an integral
multiple of $500,000 in excess thereof;
(iii) each such assignment by a Lender shall be of a constant,
and not varying, percentage of all of its rights and obligations under this
Agreement and the Notes; and
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(iv) the parties to such assignment shall execute and deliver
to the remaining Lenders an assignment agreement in the form attached as EXHIBIT
9.04(B) hereto.
Upon execution, delivery and acceptance of such assignment
agreement, the assignee thereunder shall be a party hereto and, to the extent of
such assignment, have the obligations, rights, and benefits of a Lender
hereunder and the assigning Lender shall, to the extent of such assignment,
relinquish its rights and be released from its obligations under this Agreement.
Upon the consummation of any assignment pursuant to this SECTION 9.04(B), the
assignor, the Lenders and the Borrowers shall make appropriate arrangements so
that, if requested by such assigning Lender or its assignee, new Notes are
issued to the assignor and the assignee. If the assignee is not incorporated
under the laws of the United States of America or a state thereof, it shall
deliver to the Borrowers and the Lenders certification as to exemption from
deduction or withholding of taxes.
By executing and delivering an assignment agreement in accordance with
this SECTION 9.04, the assigning Lender thereunder and the assignee thereunder
shall be deemed to confirm to and agree with each other and the other parties
hereto as follows: (A) such assigning Lender warrants that it is the legal and
beneficial owner of the interest being assigned thereby free and clear of any
adverse claim and the assignee warrants that it is an Eligible Assignee; (B)
except as set forth in clause (A) above, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement, any of the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement, any of the
other Loan Documents or any other instrument or document furnished pursuant
hereto or thereto or the financial condition of any Credit Party or the
performance or observance by any Credit Party of any of its obligations under
this Agreement, any of the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto; (C) such assignee represents and
warrants that it is legally authorized to enter into such assignment agreement;
(D) such assignee confirms that it has received a copy of this Agreement, the
other Loan Documents and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
assignment agreement; (E) such assignee will independently and without reliance
upon such assigning Lender or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement and the
other Loan Documents; and (F) such assignee agrees that it will perform in
accordance with their terms all the obligations which by the terms of this
Agreement and the other Loan Documents are required to be performed by it as a
Lender.
(c) PARTICIPATIONS. Each Lender may sell participations to one or
more Persons in all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Loans); PROVIDED, HOWEVER, that (i)
such Lender's obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, and (iii) the Borrowers shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement, and such Lender shall retain the sole right to
enforce the obligations of the
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Borrowers relating to their Loans and to approve any amendment, modification, or
waiver of any provision of this Agreement (other than amendments, modifications,
or waivers decreasing the amount of principal of or the rate at which interest
is payable on such Loans, or extending any scheduled principal payment date or
date fixed for the payment of interest on such Loans).
(d) NONRESTRICTED ASSIGNMENTS. Notwithstanding any other provision
set forth in this Agreement, (i) any Lender may at any time assign and pledge
all or any portion of its Loans to any Federal Reserve Bank as collateral
security pursuant to Regulation A and any Operating Circular issued by such
Federal Reserve Bank and (ii) any Lender which is an investment fund that
invests in Loans may assign or pledge all or any portion of its Loans or the
other Obligations owed to such Lender to its trustee or any other representative
of holders of obligations owed or securities issued by such Lender as security
for such obligations or securities. The foregoing assignments and pledges shall
not be subject to the provisions of SECTION 9.04(B). No such assignment or
pledge shall release the assigning Lender from its obligations hereunder.
(e) INFORMATION. Any Lender may furnish any information concerning
the Credit Parties or any of their Subsidiaries in the possession of such Lender
from time to time to assignees and participants (including prospective assignees
and participants), subject, however, to the provisions of SECTION 9.13.
SECTION 9.05 PAYMENT OF EXPENSES; INDEMNIFICATION. The Credit
Parties agree to: (a) pay all reasonable out-of-pocket costs and expenses of the
Agent (including, without limitation, search fees, filing and recording fees,
financial examination and collateral appraisal fees and expenses, professional
fees and expenses, including the reasonable fees and expenses of ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, special counsel to the Agent, and any other special counsel
to the Agent) in connection with (i) the negotiation, preparation, execution and
delivery and administration of this Agreement and the other Loan Documents and
the documents and instruments referred to therein, and (ii) any amendment,
waiver or consent relating hereto and thereto including, but not limited to, any
such amendments, waivers or consents resulting from or related to any work-out,
renegotiation or restructure relating to the performance by the Credit Parties
under this Agreement; (b) after the occurrence and during the continuation of an
Event of Default, reimburse the Agent and each Lender for its reasonable
out-of-pocket costs and expenses incurred in connection with such Event of
Default, including, without limitation, reasonable attorneys fees and expenses
and other professional expenses; and (c) indemnify each Lender, its officers,
directors, trustees, investment advisors, employees, representatives and agents
from and hold each of them harmless against any and all losses, liabilities,
claims, damages or expenses incurred by any of them as a result of, or arising
out of, or in any way related to, or by reason of, any investigation, litigation
or other proceeding (whether or not any Lender is a party thereto) related to
(i) the entering into and/or performance of any Loan Document or the use of
proceeds of any Loans (including other extensions of credit) hereunder or the
consummation of any other transactions contemplated in any Loan Document,
including, without limitation, claims for brokerage commissions or finder's fees
and the reasonable fees and disbursements of counsel incurred in connection with
any such investigation, litigation or other proceeding, (ii) any Environmental
Claim, and (iii) any claims for Non-Excluded Taxes (but excluding in the case of
(i), (ii) and (iii) above, any such losses, liabilities, claims, damages or
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expenses to the extent it is finally judicially determined that such losses,
liabilities, claims, damages or expenses were incurred by reason of bad faith,
gross negligence or willful misconduct on the part of the Person to be
indemnified).
SECTION 9.06 COUNTERPARTS/TELECOPY. This Agreement may be
executed in any number of counterparts, each of which where so executed and
delivered shall be an original, but all of which shall constitute one and the
same instrument. Delivery of executed counterparts by telecopy shall be as
effective as an original and shall constitute a representation that an original
will be delivered.
SECTION 9.07 HEADINGS. The headings of the sections and
subsections hereof are provided for convenience only and shall not in any way
affect the meaning or construction of any provision of this Agreement.
SECTION 9.08 SURVIVAL OF INDEMNIFICATION AND REPRESENTATIONS
AND WARRANTIES. All indemnities set forth herein and all representations and
warranties made herein shall survive the execution and delivery of this
Agreement, the making of the Loans, and the repayment of the Loans and other
Obligations.
SECTION 9.09 GOVERNING LAW, JURISDICTION, WAIVER OF JURY TRIAL, ETC.
(a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT
OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT
HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH
RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR
THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF CALIFORNIA.
(b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN
CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND
LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF LOS
ANGELES, STATE OF CALIFORNIA, PROVIDED, HOWEVER, THAT ANY SUIT SEEKING
ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT'S
OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING SUCH
ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. THE CREDIT
PARTIES AND THE LENDERS WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY
RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT
TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION
9.09(B).
THE CREDIT PARTIES AND THE LENDERS HEREBY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
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BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE
TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS,
BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. THE CREDIT
PARTIES AND THE LENDERS REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE
FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
SECTION 9.10 TIME. All references to time herein shall be
references to Pacific Standard Time or Pacific Daylight Time, as the case may
be, unless specified otherwise.
SECTION 9.11 SEVERABILITY. If any provision of any of the Loan
Documents is determined to be illegal, invalid or unenforceable, such provision
shall be fully severable and the remaining provisions shall remain in full force
and effect and shall be construed without giving effect to the illegal, invalid
or unenforceable provisions.
SECTION 9.12 FURTHER ASSURANCES. The Credit Parties agree,
upon the request of the Lenders, to promptly take such actions, as reasonably
requested, as is necessary to carry out the intent of this Agreement and the
other Loan Documents, including, but not limited to, such actions as are
necessary to ensure that the Lenders have a perfected security interest in the
Collateral subject to no Liens other than Permitted Liens.
SECTION 9.13 CONFIDENTIALITY. Each Lender agrees that it will
use its reasonable best efforts to keep confidential any non-public information
from time to time supplied to it under any Loan Document; PROVIDED, HOWEVER,
that nothing herein shall prevent the disclosure of any such information to (a)
the extent a Lender in good faith believes such disclosure is required by
Requirement of Law, (b) counsel for a Lender or to its accountants, (c) bank
examiners or auditors or comparable Persons, (d) any affiliate of a Lender, (e)
any other Lender, or any assignee, transferee or participant, or any potential
assignee, transferee or participant, of all or any portion of any Lender's
rights under this Agreement who is notified of the confidential nature of the
information and agrees to be bound by the provisions of this SECTION 9.13, (f)
any other Person in connection with any litigation to which any one or more of
the Lenders is a party, provided that such Lender takes reasonable steps to
obtain the agreement of such person or a protective order requiring such person
to maintain confidentiality of such information, or (g) to any direct or
indirect contractual counterparty in any swap agreement or such contractual
counterparty's professional advisor (so long as such contractual counterparty or
professional advisor to such contractual counterparty agrees to be bound by the
provisions of this SECTION 9.13); and provided further that no Lender shall have
any obligation under this SECTION 9.13 to the extent any such information
becomes available on a non-confidential basis from a source other than a Credit
Party or that any information becomes publicly available other than by a breach
of this SECTION 9.13 by any Lender or representative thereof.
SECTION 9.14 ENTIRETY. This Agreement together with the other
Loan Documents represent the entire agreement of the parties hereto and thereto,
and supersede all prior agreements and understandings, oral or written, if any,
including any commitment letters or correspondence relating to the Loan
Documents or the transactions contemplated herein and therein.
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SECTION 9.15 BINDING EFFECT; CONTINUING AGREEMENT.
(a) This Agreement shall become effective at such time when
all of the conditions set forth in SECTION 4.01 have been satisfied or waived by
the Required Lenders and it shall have been executed by the Borrowers, the
Guarantors and the Lenders, and thereafter this Agreement shall be binding upon
and inure to the benefit of the Borrowers, the Guarantors, and each Lender and
their respective successors and assigns.
(b) This Agreement shall be a continuing agreement and shall
remain in full force and effect until all Loans, interest, fees and other
Obligations (other than any obligations which by the terms thereof are stated to
survive the termination of the Loan Documents) have been paid in full. Upon
termination, the Credit Parties shall have no further obligations (other than
the indemnification provisions that survive) under the Loan Documents and the
Agent shall, at the request and expense of the Borrowers, deliver all Collateral
in its possession to the Borrowers and release all Liens on Collateral; provided
that should any payment, in whole or in part, of the Obligations be rescinded or
otherwise required to be restored or returned by any Lender, whether as a result
of any proceedings in bankruptcy or reorganization or otherwise, then the Loan
Documents shall automatically be reinstated and all Liens of the Lenders shall
reattach to the Collateral and all amounts required to be restored or returned
and all costs and expenses incurred by the Agent or any Lender in connection
therewith shall be deemed included as part of the Obligations.
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IN WITNESS WHEREOF, each of the Credit Parties and the Lenders
has caused this Agreement to be executed by its officer thereunto duly
authorized, as of the date first above written.
BORROWERS: DAVEL FINANCING COMPANY, L.L.C.,
a Delaware limited liability company
By: DAVEL COMMUNICATIONS, INC.,
its sole managing member
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
PHONETEL TECHNOLOGIES, INC.,
an Ohio corporation
By: /s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
CHEROKEE COMMUNICATIONS, INC.,
a Texas corporation
By: /s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
PARENT GUARANTOR: DAVEL COMMUNICATIONS, INC.,
a Delaware corporation
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
SUBSIDIARY GUARANTORS: DAVEL COMMUNICATIONS GROUP, INC.,
an Illinois corporation
ADTEC COMMUNICATIONS, INC.,
a Florida corporation
CENTRAL PAYPHONE SERVICES, INC.,
a Georgia corporation
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COMMUNICATIONS CENTRAL INC.,
a Georgia corporation
COMMUNICATIONS CENTRAL OF GEORGIA, INC.,
a Georgia corporation
DAVEL MEDIA, INC.,
a Delaware corporation
DAVEL MEXICO, LTD.,
an Illinois corporation
DAVELTEL, INC.,
An Illinois corporation
INTERSTATE COMMUNICATIONS, INC.,
a Georgia corporation
INVISION TELECOM, INC.,
a Georgia corporation
PEOPLES ACQUISITION CORPORATION,
a Pennsylvania corporation
PEOPLES COLLECTORS, INC.,
a Delaware corporation
PEOPLES TELEPHONE COMPANY, INC.,
a New York corporation
PEOPLES TELEPHONE COMPANY, INC.,
a New Hampshire corporation
PTC CELLULAR, INC.,
a Delaware corporation
PTC SECURITY SYSTEMS, INC.,
a Florida corporation
SILVERADO COMMUNICATIONS CORP.,
a Colorado corporation
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TELALEASING ENTERPRISES, INC.,
an Illinois corporation
T.R.C.A., INC.
an Illinois corporation
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
By: __________________
Name:
Title:
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AGENT: FOOTHILL CAPITAL CORPORATION, as
Agent and Lender
By: /s/▇▇▇ ▇▇▇
------------------------------
Name: ▇▇▇ ▇▇▇
Title: Vice President
LENDERS: FOOTHILL PARTNERS III, L.P.
-------
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Member
ABLECO FINANCE LLC, as
Lender and agent for its
affiliate assigns
By: /s/▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Sr. V.P./Chief Operating Officer
PNC BANK, NATIONAL ASSOCIATION
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇ Vp
---------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Title: Vice President
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U.S. BANK NATIONAL ASSOCIATION
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Assistant Vice President
ARK CLO 2000-1, LIMITED
BY: PATRIARCH PARTNERS, LLC
ITS COLLATERAL MANAGER
By: /s/▇▇▇▇ ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Signatory
CERBERUS PARTNERS, L.P.
BY: CERBERUS ASSOCIATES, LLC, AS
GENERAL PARTNER
By: /s/▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: V.P.
BNP PARIBAS
By: /s/▇▇▇▇▇▇ ▇▇▇▇▇ By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------ -----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Director Title: Managing Director
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PRIME INCOME TRUST
By: /s/▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Executive Director
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▇▇▇▇▇▇ FINANCIAL, INC.
By: /s/▇. ▇▇▇▇▇
` ------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: SVP
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