EXHIBIT 10.9
THIRD AMENDMENT AND WAIVER
TO THE CREDIT AGREEMENT
THIRD AMENDMENT AND WAIVER, dated as of April 2, 2003 (this "Amendment
and Waiver"), to the Credit Agreement, dated as of February 19, 2002 (as
amended, to date, the "Credit Agreement"), by and 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, collectively the
"Borrowers" and individually a "Borrower"), Davel Communications, Inc., a
Delaware corporation ("Davel Parent") and certain other affiliates of Davel and
Davel Parent, as guarantors (collectively, the "Guarantors" and together with
the Borrowers, collectively the "Credit Parties" and individually a "Credit
Party"), ▇▇▇▇▇▇▇▇▇ L.L.C., a Delaware limited liability company ("▇▇▇▇▇▇▇▇▇"),
ARK CLO 2000-1, Limited, a Cayman Islands entity, and ARK Investment Partners
II, L.P., a Delaware limited partnership (collectively, "ARK" and together with
▇▇▇▇▇▇▇▇▇ and each of their respective successors and permitted assigns, the
"Lenders").
The Credit Parties have requested that the Lenders: (a) waive any
"Default" or "Event of Default" (as defined in the Credit Agreement) that would
otherwise arise under the Credit Agreement from (i) any noncompliance by the
Credit Parties with the financial covenant set forth in Section 6.01(b)(i) for
the year-to-date period ended on January 31, 2003; (ii) any noncompliance by the
Credit Parties with the financial covenant set forth in Section 6.01(b)(ii) for
the fiscal periods ended December 31, 2002 and January 31, 2003, and (iii) any
noncompliance by the Credit Parties with the financial covenants set forth in
Sections 6.01(b)(iii) for the fiscal periods ended December 31, 2002 and January
31, 2003; and (b) amend the "EBITDA" and "Adjusted EBITDA" (as defined in the
Credit Agreement) financial covenants as set forth in Section 6.01(b) of the
Credit Agreement for the fiscal periods ended February 28, 2003 through July 30,
2003.
The Lenders are willing to agree to the requested amendments and
waivers, subject to the terms and conditions set forth below.
1. Incorporated Definitions. Any capitalized term used herein which is
defined in the Credit Agreement and not otherwise defined herein shall have the
meaning assigned to it in the Credit Agreement.
2. Waivers. Pursuant to Section 8.01 of the Credit Agreement and in
reliance on the representations and warranties set forth below, and subject to
the conditions precedent set forth in Section 3 hereof, the Required Lenders
hereby waive any Default or Event of Default that would otherwise arise under:
(a) Section 6.01(b)(i) of the Credit Agreement, solely by reason of the Credit
Parties having paid expenses in cash for the year-to-date period ended January
31, 2003 in an amount in excess of 110% of the amount allocated for any category
of expenses set forth in the Budget for such period; (b) Section 6.01(b)(ii) of
the Credit Agreement, solely by reason of the Credit Parties having EBITDA in an
amount less than (i) $10,186,000, for the fiscal period beginning on January 1,
2002 and ended on December 31, 2002, and (ii) $10,701,000, for the fiscal period
beginning on January 1, 2002 and ended on January 31, 2003; or (c) Section
6.01(b)(iii) of the Credit Agreement, solely by reason of the Credit Parties
having Adjusted EBITDA in an amount less than (i) $1,733,000, for the fiscal
period beginning on January 1, 2002 and ended on December 31, 2002 and (ii)
$2,248,000 for the fiscal period beginning on
January 1, 2002 and ended on January 31, 2003 (collectively, the "Waived
Defaults"); provided, however, that the waivers contained in this Section 2
shall be effective only in this specific instance and for the specific purposes
set forth herein and do not allow for any other or further departure from the
terms and conditions of the Credit Agreement or any other Loan Document, which
terms and conditions shall remain in full force and effect.
3. Amendments. (a) Section 6.01(b)(ii) of the Credit Agreement is hereby
amended by deleting it in its entirety and substituting the following therefor:
"(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:
Fiscal Period EBITDA
-------------- ------
3/1/2002 - 2/28/2003 $ 2,327,000
4/1/2002 - 3/31/2003 3,406,000
5/1/2002 - 4/30/2003 4,065,000
6/1/2002 - 5/31/2003 4,939,000
7/1/2002 - 6/30/2003 5,982,000
(b) Section 6.01(b)(iii) of the Credit Agreement is hereby amended by
deleting it in its entirety and substituting the following therefor:
"(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:
Fiscal Period Adjusted EBITDA
-------------- ---------------
3/1/2002 - 2/28/2003 $ (2,498,000)
4/1/2002 - 3/31/2003 (1,998,000)
5/1/2002 - 4/30/2003 (1,339,000)
6/1/2002 - 5/31/2003 (465,000)
7/1/2002 - 6/30/2003 577,000"
4. Conditions. This Amendment and Waiver shall become effective only upon
satisfaction in full of the following conditions precedent (the first date upon
which all such conditions shall have been satisfied being herein called the
"Amendment and Waiver Effective Date"):
(a) The representations and warranties contained in this Amendment and
Waiver and in Article V of the Credit Agreement and each other Loan Document
shall be correct in all material respects on and as of the Amendment and Waiver
Effective Date as though made on and as of such date (except where such
representations and warranties relate to an earlier date in which case such
representations and warranties shall be true and correct as of such earlier
date);
(b) No Default or Event of Default (other than the Waived Defaults)
shall have occurred and be continuing on the Amendment and Waiver Effective Date
or result from this Amendment and Waiver becoming effective in accordance with
its terms;
(c) The Lenders shall have executed this Amendment and Waiver and
shall have received counterparts of this Amendment and Waiver which bear the
signatures of each of the Credit Parties;
(d) The Lenders shall have received such other agreements,
instruments, and other documents as the Lenders may reasonably request in
respect of the transactions contemplated hereby; and
(e) All legal matters incident to this Amendment and Waiver shall be
satisfactory to the Lenders and their counsel.
5. Representations and Warranties; No Event of Default. Each Credit Party
represents and warrants that, after giving effect to the amendments and waivers
set forth in this Amendment and Waiver, the representations and warranties
contained in Article V of the Credit Agreement and in each other Loan Document,
certificate or other writing delivered on or behalf of such Credit Party to
▇▇▇▇▇▇▇▇▇, as collateral agent ("Collateral Agent"), or any Lender pursuant to
the Credit Agreement or any other Loan Document on or prior to the Amendment and
Waiver Effective Date are true and correct on the Amendment and Waiver Effective
Date as though made on and as of such date (except where such representations
and warranties relate to an earlier date in which case such representations and
warranties shall be true and correct as of such earlier date) and, except for
the Waived Defaults, no Default or Event of Default has occurred or is
continuing on the Amendment and Waiver Effective Date or would result from this
Amendment and Waiver becoming effective in accordance with its terms.
6. Costs and Expenses. The Credit Parties agree to pay upon demand all
reasonable expenses, including reasonable attorneys' and legal assistants' fees,
all recording fees and charges, or other fees or charges incurred by the Lenders
in connection with the preparation, negotiation and execution of this Amendment
and Waiver and all documents related thereto and any document required to be
furnished herewith.
7. Continued Effectiveness of the Credit Agreement and Loan Documents. Each
Credit Party hereby (a) acknowledges and consents to this Amendment and Waiver,
(b) confirms and agrees that each Loan Document to which it is a party is, and
shall continue to be, in full force and effect and is hereby ratified and
confirmed in all respects except that on and after the date hereof all
references in any such Loan Document to "the Credit Agreement", "thereto",
"thereof", "thereunder" or words of like import referring to the Credit
Agreement shall mean the Credit Agreement as amended by this Amendment and
Waiver, and (c) confirms and agrees that to the extent that any such Loan
Document purports to assign or pledge to the Collateral Agent, or to grant a
security interest in or lien on, any collateral as security for the obligations
of the Credit Parties from time to time existing in respect of the Credit
Agreement, such pledge, assignment or grant of the security interest or lien is
hereby ratified and confirmed in all respects.
8. Miscellaneous.
(a) The Credit Parties hereby acknowledge and agree that this
Amendment and Waiver constitutes a "Loan Document" under the Credit Agreement.
Accordingly, it shall be
an Event of Default under the Credit Agreement if (a) any representation or
warranty made by the Credit Parties under or in connection with this Amendment
and Waiver shall have been untrue, false or misleading in any material respect
when made, or (b) the Credit Parties shall fail to perform or observe any term,
covenant or agreement contained in this Amendment and Waiver.
(b) This Amendment and Waiver may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which shall be deemed to be an original, but all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart by
telefacsimile shall be equally effective as delivery of an original executed
counterpart of this Amendment and Waiver. Any party delivering an executed
counterpart of this Amendment and Waiver also shall deliver an original executed
counterpart of this Amendment and Waiver, but the failure to deliver an original
executed counterpart shall not affect the validity, enforceability and binding
effect of this Amendment and Waiver.
(c) Section and paragraph headings herein are included for convenience
of reference only and shall not constitute a part of this Amendment and Waiver
for any other purpose.
(d) THIS AMENDMENT AND WAIVER SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND TO BE PREPARED IN THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW
PRINCIPLES.
(e) Any provision of this Amendment and Waiver that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining portions hereof or affecting the validity or enforceability of such
provision in any other jurisdiction.
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment and
Waiver to be executed and delivered as of the date set forth on the first page
hereof.
BORROWERS: DAVEL FINANCING COMPANY, L.L.C.,
a Delaware limited liability company
By: DAVEL COMMUNICATIONS, INC.,
its sole managing member
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
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
DAVEL PARENT GUARANTOR: DAVEL COMMUNICATIONS, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
SUBSIDIARY GUARANTORS: DAVEL COMMUNICATIONS GROUP, INC.,
an Illinois corporation
ADTEC COMMUNICATIONS, INC.,
a Florida corporation
CENTRAL PAYPHONE SERVICES, INC.,
a Georgia corporation
COMMUNICATIONS CENTRAL INC.,
a Georgia corporation
COMMUNICATIONS CENTRAL OF
GEORGIA, INC.,
a Georgia corporation
DAVEL COMMUNICATIONS GROUP, INC.,
an Illinois corporation
DAVEL MEDIA, INC.,
a Delaware corporation
DAVEL MEXICO, LTD.,
an Illinois corporation
DAVELTEL, INC.,
An Illinois corporation
DF MERGER CORP.,
a Delaware 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
PT MERGER CORP.,
an Ohio corporation
PTC CELLULAR, INC.,
a Delaware corporation
PTC SECURITY SYSTEMS, INC.,
a Florida corporation
SILVERADO COMMUNICATIONS
CORP.,
a Colorado corporation
TELALEASING ENTERPRISES, INC.,
an Illinois corporation
T.R.C.A., INC.
an Illinois corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
By
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Name:
Title:
LENDERS: ▇▇▇▇▇▇▇▇▇ L.L.C.
By /s/ ▇▇▇▇▇ ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
ARK CLO 2000-1, LIMITED
BY: PATRIARCH PARTNERS, LLC
ITS COLLATERAL MANAGER
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Manager
ARK INVESTMENT PARTNERS II, L.P.
BY: PATRIARCH PARTNERS III, LLC
ITS INVESTMENT ADVISOR
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Manager