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Exhibit 10.4
SIXTH AMENDMENT TO CREDIT AGREEMENT
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THIS SIXTH AMENDMENT TO CREDIT AGREEMENT (the "AMENDMENT"), dated as of
October 8, 1996, among PHONETEL TECHNOLOGIES, INC., an Ohio corporation (the
"BORROWER"), INTERNATIONALE NEDERLANDEN (U.S.) CAPITAL CORPORATION, a Delaware
corporation ("ING") and CERBERUS PARTNERS, L.P., a Delaware limited partnership
("CERBERUS"), constituting all of the Lenders under the Credit Agreement
referenced below, and ING in its capacity as Agent for the Lenders.
W I T N E S S E T H:
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RECITALS:
A. The Borrower, the Lenders and the Agent have entered into a certain
Credit Agreement, dated as of March 15, 1996 (as amended to the date hereof, the
"CREDIT AGREEMENT"). Capitalized terms used herein and not otherwise defined
shall have the meanings ascribed to such terms in the Credit Agreement.
B. The Borrower has requested an amendment to the Credit Agreement to
revise certain financial covenants and other provisions.
C. The Lenders are agreeable to amending the Credit Agreement on the
terms and conditions set forth herein.
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. AMENDMENT TO SECTION 1.1. Section 1.1 of the Credit
Agreement is hereby amended by deleting the definition of "Current Ratio" in its
entirety and inserting in lieu thereof the following:
"'CURRENT RATIO' means, at any date, the ratio at such date of
(A) current assets at such date, to (B) current liabilities at such
date (except that the current portion of indebtedness under the Credit
Agreement shall be excluded in determining current liabilities in
calculating the current ratio), determined on a consolidated basis for
the Borrower and its Subsidiaries (other than the POA Group) in
accordance with GAAP."
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SECTION 2. AMENDMENT TO SECTION 1.1. Section 1.1 of the Credit
Agreement is hereby amended by deleting the definition of "EBITDA" in its
entirety and inserting in lieu thereof the following:
"'EBITDA' means, for any period, an amount equal to Net Income
PLUS (to the extent deducted in determining Net Income) interest
expense, the effects of accretion, if any, of the right to put any
warrants for stock and the effect of original issue discount, if any,
which is attributable to indebtedness as the result of the issuance of
warrants in connection therewith, provisions for income taxes,
depreciation, amortization of intangible assets and other non-cash
charges, MINUS (to the extent included in determining Net Income)
non-cash credits and revenues (other than non-cash revenues from the
Intellicall Agreement, dated March, 1996, and similar arrangements), in
each case for the Borrower and its Subsidiaries (other than the POA
Group) on a consolidated basis."
SECTION 3. AMENDMENT TO SECTION 1.1. Section 1.1 of the Credit
Agreement is hereby amended by deleting the definition of "Fixed Charges" in its
entirety and inserting in lieu thereof the following:
"'FIXED CHARGES' means, for any period, the sum of (a)
Interest Expense during such period, PLUS (b) scheduled principal
repayments of Indebtedness (including, without limitation, scheduled
payments of principal in respect of Capitalized Lease Liabilities but
excluding scheduled repayments of the Obligations) during such period,
PLUS (c) Consolidated Capital Expenditures by the Borrower and its
Subsidiaries (other than the POA Group) during such period, PLUS (d)
provisions for income taxes for such period, MINUS (e) decreases in the
Borrower's and its Subsidiaries' (other than the POA Group) working
capital (excluding changes in cash, Cash Equivalent Investments and
current maturities of Indebtedness) during such period, and PLUS (f)
increases in Borrower's and its Subsidiaries' (other than the POA
Group) working capital (excluding changes in cash, Cash Equivalent
Investments and current maturities of Indebtedness) during such
period."
SECTION 4. AMENDMENT TO SECTION 3.3.4(e). Section 3.3.4(e) of the
Credit Agreement is hereby amended by deleting said section in its entirety and
substituting in lieu thereof the following:
"(e) The Revolving B Loan Commitment (and the Revolving B
Commitment Amount) shall be permanently reduced on each Monthly
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Payment Date set forth below by the amount set forth opposite such
Monthly Payment Date:
Monthly Payment Date In: Amount
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April, 1997 $ 2,972,222
May, 1997 $ 222,222
June, 1997 $ 222,222
July, 1997 $ 222,222
August, 1997 $ 222,222
September, 1997 $ 222,222
October, 1997 $ 222,222
November, 1997 $ 222,222
December, 1997 $ 222,224."
SECTION 5. AMENDMENT TO SECTION 6.2.4. Section 6.2.4 of the Credit
Agreement is hereby amended by deleting paragraphs (c) and (d) in their entirety
and inserting in lieu thereof the following:
"(c) CURRENT RATIO. The Borrower will not permit the Current
Ratio of the Borrower and its Subsidiaries on the last day of the
Fiscal Quarter ending on September 30, 1996 to be less than 0.3 and on
the last day of each Fiscal Quarter thereafter to be less than 0.6.
(d) TANGIBLE NET WORTH. The Borrower will not permit
its Tangible Net Worth on the last day of any Fiscal Quarter to be
less than the amount set forth opposite such Fiscal Quarter:
Fiscal Quarter Ending: Amount
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June 30, 1996 ($9,775,000)
September 30, 1996 (19,250,000)
December 31, 1996 (17,200,000)
March 31, 1997 (15,300,000)
June 30, 1997 (12,700,000)
September 30, 1997 (10,450,000)
December 31, 1997 (7,500,000)
March 31, 1998 (2,750,000)
June 30, 1998 650,000
September 30, 1998 4,454,000
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December 31, 1998 9,928,000
March 31, 1999 11,936,000
June 30, 1999 16,170,000."
SECTION 6. AMENDMENT TO SECTION 6.2.4. Section 6.2.4 of the Credit
Agreement is hereby amended by deleting paragraph (i) in its entirety and
inserting in lieu thereof the following:
"(i) LIMITATIONS ON ADDITIONS TO PROPERTY, PLANT AND
EQUIPMENT AND PURCHASE OF INTANGIBLE ASSETS. The Borrower will not
permit the aggregate amount of additions to property, plant and
equipment plus the aggregate amount of additions to intangible
assets for the Borrower and its Subsidiaries during any calendar
month ending after September 30, 1996 and on or prior to December
31, 1997 to exceed $75,000."
SECTION 7. AMENDMENT TO SECTION 7.1.11. Section 7.1.11 of the Credit
Agreement is hereby amended by deleting said section in its entirety and
inserting the following in lieu thereof:
"SECTION 7.1.11. MATERIAL ADVERSE CHANGE. A Material Adverse
Change shall occur at any time; PROVIDED, HOWEVER, that any Material
Adverse Change occurring prior to December 31, 1997 shall be deemed to
occur on December 31, 1997 unless previously cured."
SECTION 8. EFFECTIVENESS. This Amendment shall become effective upon
receipt by the Agent of a copy of this Amendment, duly executed by each of the
Borrower, the Lenders and the Agent, and duly acknowledged and consented to by
the Subsidiaries of the Borrower in the form attached to this Amendment.
SECTION 9. CONTINUING EFFECTIVENESS OF CREDIT AGREEMENT. The Credit
Agreement and each of the other Loan Documents shall remain in full force and
effect in accordance with their respective terms, except as expressly amended or
modified by this Amendment.
SECTION 10. COST AND EXPENSES. The Borrower agrees to pay all
reasonable out-of-pocket expenses of the Agent and each of the Lenders party to
this Amendment for the negotiation, preparation, execution and delivery of this
Amendment (including reasonable fees and expenses of counsel to the Agent and
such Lenders).
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SECTION 11. HEADINGS. The various headings of this Amendment are
inserted for convenience only and shall not affect the meaning or interpretation
of this Amendment or any provision hereof.
SECTION 12. COUNTERPARTS. This Amendment may be executed by the parties
hereto in several counterparts, each of which shall be executed by the Borrower,
the Lenders and the Agent and shall be deemed to be an original and all of which
shall constitute together but one and the same agreement.
SECTION 13. GOVERNING LAW. THIS AMENDMENT SHALL BE DEEMED TO
BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS
OF THE STATE OF NEW YORK.
SECTION 14. SUCCESSORS AND ASSIGNS. This Amendment shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns; PROVIDED, HOWEVER, that the Borrower may not assign or
transfer its rights or obligations hereunder or under the Credit Agreement
except in accordance with the terms of the Credit Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
PHONETEL TECHNOLOGIES, INC.
By: /s/ Xxxxx X. Xxxx
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Name: Xxxxx Xxxx
Title: Chairman & CEO
[CORPORATE SEAL]
INTERNATIONALE NEDERLANDEN
(U.S.) CAPITAL CORPORATION, in its
capacity as Agent and Lender
By: /s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
Managing Director
CERBERUS PARTNERS, L.P.
By: CERBERUS ASSOCIATES, L.P.,
its General Partner
By: /s/ Xxxxxxx Xxxxxxxx
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Xxxxxxx Xxxxxxxx, General Partner
(SIGNATURE PAGE TO THE SIXTH AMENDMENT TO CREDIT AGREEMENT)
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ACKNOWLEDGMENT AND CONSENT
The undersigned hereby acknowledge receipt of a copy of the foregoing
Amendment, consent to the terms and provisions set forth therein, and agree that
the Subsidiary Guaranty dated as of March 15, 1996 (the "SUBSIDIARY GUARANTY")
made by each of the undersigned, jointly and severally, in favor of
Internationale Nederlanden (U.S.) Capital Corporation ("ING") and such other
Lenders as are, or may from time to time become, parties to the Credit
Agreement, and ING as Agent for such Lenders, will continue in full force and
effect without diminution or impairment notwithstanding the execution and
delivery of the Amendment. The undersigned further acknowledge and agree that,
upon effectiveness of the Amendment and from and after the date thereof, each
reference to the Credit Agreement in the Subsidiary Guaranty and each other Loan
Document (as such term is defined in the Credit Agreement) to which any of the
undersigned is a party shall mean and be a reference to the Credit Agreement as
amended by this Amendment.
PUBLIC TELEPHONE CORPORATION
By: /s/ Xxxxx X. Xxxx
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Name: Xxxxx Xxxx
Title: Chairman
[CORPORATE SEAL]
WORLD COMMUNICATIONS, INC.
By: /s/ Xxxxx X. Xxxx
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Name: Xxxxx Xxxx
Title: Chairman
[CORPORATE SEAL]
(ACKNOWLEDGMENT AND CONSENT TO SIXTH AMENDMENT)
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NORTH FLORIDA TELEPHONE CORPORATION
By: /s/ Xxxxx X. Xxxx
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Name: Xxxxx Xxxx
Title: Chairman
[CORPORATE SEAL]
PARAMOUNT COMMUNICATIONS SYSTEMS, INC.
By: /s/ Xxxxx X. Xxxx
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Name: Xxxxx Xxxx
Title: Chairman
[CORPORATE SEAL]
PAYPHONES OF AMERICA, INC.
By: /s/ Xxxxx X. Xxxx
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Name: Xxxxx Xxxx
Title: Chairman
[CORPORATE SEAL]
(ACKNOWLEDGMENT AND CONSENT TO SIXTH AMENDMENT)
