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Xxxxxxxxxxxxxx Xxxxxxxxxxx (X.X.) Cerberus Partners, L.P.
Capital Corporation 000 Xxxxx Xxxxxx
000 Xxxxxxxx Xxxxxxx, X.X. 00xx Xxxxx
Xxxxx #000 Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxx, Xxxxxxx 00000
Ladies and Gentlemen:
Reference is hereby made to the Warrant Purchase Agreement (the
"Warrant Agreement") entered into as of March 15, 1996 by and between PhoneTel
Technologies, Inc., an Ohio corporation, (the "Company"), Internationale
Nederlanden (U.S.) Capital Corporation, a Delaware corporation ("ING"), and
Cerberus Partners, L.P., a Delaware limited partnership ("Cerberus", and
together with ING, the "Purchasers"), whereby in connection with the
Purchasers' initial extensions of credit to the Company under the Term Loan,
the Revolving A Loan Commitment and the Revolving B Loan Commitment as set
forth in the Credit Agreement, the Company has agreed to sell to each of ING
and Cerberus, and ING and Cerberus have each agreed to purchase from the
Company, warrants to purchase 204,824 shares of Series A Special Preferred
Stock (the "Warrants"), which is intended by the parties hereto to represent
the right of each of ING and Cerberus, upon exercise of the Warrants, to
acquire 15.12% of the outstanding shares of common stock of the Company on a
fully-diluted basis as of the Closing Date (but without taking into account the
Term Notes and the Series B Preferred Stock). Furthermore, in the event the
Company shall borrow in excess of One Million Five Hundred Thousand Dollars
($1,500,000) under the Revolving B Loan Commitment, the Company shall issue
Warrants to each of ING and Cerberus each of ING and Cerberus in an amount
equal to the amount necessary to result in each of ING and Cerberus having the
right to acquire an additional 0.31% of the outstanding shares of common stock
of the Company on a fully-diluted basis as of the Closing Date (but without
taking into account the Term Notes and the Series B Preferred Stock).
The Company hereby represents that it has used its best efforts to
determine that the number of Warrants issued or to be issued to each of ING and
Cereberus in the instances described above shall represent the percentage of
the outstanding shares of common stock of the Company, the Purchasers are
entitled to receive as described above. In the event that it is determined
after the Closing that the number of Warrants issued to the Purchasers shall
not represent the percentage of the outstanding
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Internationale Nederlanden (U.S.)
Capital Corporation
Cerberus Partners, L.P.
March , 1996
Page 2
shares of common stock of the Company that the parties intend that the
Purchasers are entitled to receive as set forth above, then the parties hereby
agree that (i) if the number of Warrants issued to the Purchasers was
insufficient to satisfy the intended percentage interests described above, the
Company shall issue an additional number of Warrants to make the number of
Warrants received by the Purchasers equal to the intended percentages or (ii)
if the number of Warrants issued to the Purchasers shall exceed the percentage
interest described above, the Purchasers shall surrender to the Company the
number of excess Warrants that the Purchasers received.
Capitalized terms used herein shall have their respective meanings
ascribed to them in the Warrant Agreement unless otherwise defined herein.
Very truly yours,
PHONETEL TECHNOLOGIES, INC.
By: /s/ Xxxxx Xxxx
------------------------
Name: Xxxxx Xxxx
Title: Chairman
Agreed and Accepted:
INTERNATIONALE NEDERLANDEN (U.S.)
CAPITAL CORPORATION
By: /s/
----------------------------
Name:
Title:
CERBERUS PARTNERS, L.P.
By: CERBERUS ASSOCIATES, L.P., Its General Partner
By: /s/ Xxxxxxx Xxxxxxxx
-----------------------
Name: Xxxxxxx Xxxxxxxx
Title: General Partner
