EXHIBIT 10.3
VOTING AGREEMENT
This VOTING AGREEMENT, dated June 11, 1998, between Cerberus Partners,
L.P., a Delaware limited partnership ("Cerberus"), and Davel Communications
Group, Inc., an Illinois corporation (the "Company").
WHEREAS, concurrently with the execution and delivery of this Agreement,
PhoneTel Technologies, Inc., an Ohio corporation ("PhoneTel"), the Company,
Davel Holdings, Inc., a Delaware corporation and a wholly owned subsidiary of
the Company ("New Davel"), D Subsidiary, Inc., an Illinois corporation and a
wholly owned subsidiary of New Davel ("D Sub"), and PT Merger Corp., an Ohio
corporation and a wholly owned subsidiary of New Davel ("P Sub"), have entered
into an Agreement and Plan of Merger and Reorganization (the "Merger
Agreement"), dated the date hereof, pursuant to which (i) D Sub will be merged
with and into the Company with the Company surviving as a wholly owned
subsidiary of New Davel (the "Davel Merger") and (ii) P Sub will be merged with
and into PhoneTel with PhoneTel surviving as a wholly owned subsidiary of New
Davel (the "PhoneTel Merger").
WHEREAS, the consummation of the PhoneTel Merger, and the other
transactions contemplated by the Merger Agreement (the "Transaction"), is
subject to certain conditions, including the approval of the Merger Agreement
and the PhoneTel Merger by the holders of at least a majority of the outstanding
shares of common stock, par value $.01 per share, of PhoneTel ("PhoneTel Common
Stock").
WHEREAS, Cerberus is the holder of warrants (the "Warrants") to purchase
shares of Series A Special Convertible Preferred Stock, par value $.20 per share
(the Preferred Stock), of PhoneTel at an exercise price of $.20 per share of
Preferred Stock.
WHEREAS, the Preferred Stock is convertible into an aggregate of 1,798,240
shares of PhoneTel Common Stock (such shares, upon acquisition thereof by
Cerberus, being herein referred to as the "Warrant Shares").
WHEREAS, under the terms of the Warrant Purchase Agreement dated March 15,
1996 (the "Warrant Agreement") between PhoneTel and Cerberus pursuant to which
the Warrants were issued, the Warrants are immediately exercisable for the
Preferred Stock; and, under the terms of the Preferred Stock, as set forth in
the Articles of Incorporation of PhoneTel, upon issuance, the Preferred Stock
will be immediately convertible into the Shares.
WHEREAS, Cerberus is the record and beneficial owner of 124,300 shares of
PhoneTel Common Stock (such shares being herein referred to as the "Currently
Held Shares" and, together with the Warrant Shares and any other shares of
capital stock of PhoneTel acquired by Cerberus after the date hereof and during
the term of this Agreement being collectively herein referred to as the
"Shares"), which shares collectively represent approximately 8.0% of the Shares
of PhoneTel Common Stock outstanding as of June 1, 1998.
WHEREAS, as a condition to the willingness of the Company to enter into the
Merger Agreement, and as an inducement to it to do so, Cerberus has agreed for
the benefit of the Company as set forth in this Agreement.
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement, the parties hereby agree
as follows:
ARTICLE I
COVENANTS OF CERBERUS
Section 1.1 Agreement to Exercise Warrants. Cerberus covenants and
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agrees with the Company that, prior to the record date for the PhoneTel
Shareholders Meeting (as hereinafter defined), Cerberus will exercise the
Warrants for all of the shares of Preferred Stock issuable upon exercise of the
Warrants and will pay the exercise price payable in respect thereof.
Section 1.2 Agreement to Convert Preferred Stock. Cerberus covenants
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and agrees with the Company that, prior to the record date for the PhoneTel
Stockholders Meeting, Cerberus will convert the Preferred Stock into all of the
shares of PhoneTel Common Stock issuable upon conversion of the Preferred Stock
and will continue to hold the Shares through such record date so that Cerberus
is a holder of record of PhoneTel Common Stock entitled to vote the Shares at
the PhoneTel Stockholders meeting.
Section 1.3 Agreement to Vote. At any meeting of the shareholders of
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the Company held prior to the Termination Date (as hereinafter defined), however
called ("PhoneTel Shareholders Meeting"), and at every reconvened meeting
following any adjournment or postponement thereof prior to the Termination Date,
or in connection with any written consent of the shareholders of the Company
executed prior to the Termination Date, Cerberus shall vote the Shares in favor
of the approval of the Merger Agreement, the PhoneTel Merger and each of the
actions contemplated by the Merger Agreement to be performed by PhoneTel in
connection with the Transaction and any actions required in furtherance thereof.
Prior to the Termination Date and subject to Section 2.5, Cerberus shall not
enter into any agreement or understanding with any person, directly or
indirectly, to vote, grant any proxy or give instructions with respect to the
voting of the Shares in any manner inconsistent with the preceding sentence.
Section 1.4 Proxies. (a) Cerberus hereby revokes any and all previous
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proxies granted with respect to matters set forth in Section 1.3 for the Shares.
(b) Prior to the Termination Date, Cerberus shall not grant any proxies or
powers of attorney with respect to matters set forth in Section 1.3, deposit any
of the Shares into a voting trust or enter into a voting agreement, other than
this Agreement, with respect to any of the Shares, in each case with respect to
such matters.
Section 1.5 Transfer of Shares by Cerberus. Prior to the Termination
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Date, Cerberus shall not (a) pledge or place any encumbrance on any Shares,
other than pursuant to this Agreement, or (b) transfer, sell, exchange or
otherwise dispose of any Shares, in each case unless the pledgee,
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encumbrance holder, transferee, purchaser or acquiror of such Shares enters into
a Voting Agreement with the Company containing substantially the same terms as
this Agreement.
Section 1.6 Action in Shareholder Capacity Only. Cerberus makes no
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agreement or understanding herein in any capacity other than its capacity as a
record holder of the Warrants and Currently Held Shares and a beneficial owner
of the Warrants, the Preferred Stock and the Shares, and nothing herein shall
limit or affect any actions taken in any other capacity.
ARTICLE II
REPRESENTATIONS, WARRANTIES AND
ADDITIONAL COVENANTS OF Cerberus
Cerberus represents, warrants and covenants to the Company that:
Section 2.1 Ownership. As of the date hereof, Cerberus has the right,
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under the terms of the Warrants and the Preferred Stock, to acquire, in the
aggregate, the 1,798,240 Warrant Shares. Cerberus is the beneficial and record
owner of the Currently Held Shares and, upon exercise of the Warrants and
subsequent conversion of the Preferred Stock, Cerberus will be the beneficial
and record owner of the Warrant Shares and, subject to Section 1.3, Cerberus
will have the sole right to vote the Warrant Shares and the Currently Held
Shares and there will be no restrictions on rights of disposition or other liens
pertaining to the Warrant Shares or the Currently Held Shares. Cerberus has not
agreed to subject any Shares to any voting trust or other agreement, arrangement
or restriction with respect to the voting of the Shares.
Section 2.2 Authority and Non-Contravention. Cerberus has the right,
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power and authority to enter into this Agreement and, subject to the issuance to
Cerberus of the Warrant Shares, to consummate the transactions contemplated by
this Agreement. The execution and delivery of this Agreement by Cerberus and
the consummation of the transactions contemplated by this Agreement have been
duly authorized by all necessary action on the part of Cerberus. This
Agreement has been duly executed and delivered by Cerberus and constitutes a
valid and binding obligation of Cerberus, enforceable against Cerberus in
accordance with its terms, subject to general principles of equity and as may be
limited by bankruptcy, insolvency, moratorium, or similar laws affecting
creditors' rights generally. Neither the execution and delivery of this
Agreement by Cerberus nor the consummation by Cerberus of the transactions
contemplated hereby will (i) materially violate, or require any consent,
approval or notice under, any provision of any judgment, order, decree, statute,
law, rule or regulation applicable to Cerberus or, upon issuance thereof to
Cerberus, the Shares or (ii) violate or conflict with the certificate of
incorporation or bylaws of Cerberus or constitute a material violation of or
default under any contract, commitment, agreement, understanding, arrangement or
other restriction of any kind to which Cerberus is a party or by which Cerberus
or its assets are bound.
Section 2.3 Total Shares. As of the date hereof, other than the Currently
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Held Shares, Cerberus does not own, beneficially (other than through ownership
of the Warrants) or of record, any shares of capital stock of the Company.
Other than the Warrants, Cerberus does not have any option to purchase or right
to subscribe for or otherwise acquire any securities of the Company and has no
other interest in or voting rights with respect to any other securities of the
Company.
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Section 2.4 Notifications. Prior to the Termination Date, Cerberus will
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notify the Company promptly of the number of any shares of capital stock of
PhoneTel acquired by Cerberus after the date hereof.
Section 2.5 Pooling. Cerberus agrees not to take any action that would
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cause the Transaction not to qualify for pooling-of-interests treatment for
accounting purposes.
ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS OF
THE COMPANY
The Company represents, warrants and covenants to Cerberus that:
Section 3.1 Authority and Non-Contravention. The Company has the right,
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power and authority to enter into this Agreement and to consummate the
transactions contemplated by this Agreement. The execution and delivery of this
Agreement by the Company and the consummation of the transactions contemplated
by this Agreement have been duly authorized by all necessary action on the part
of the Company. This Agreement has been duly executed and delivered by the
Company and constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject to general
principles of equity and as may be limited by bankruptcy, insolvency, moratorium
or similar laws affecting creditors' rights generally. Neither the execution
and delivery of this Agreement nor the consummation by the Company of the
transactions contemplated hereby will (i) materially violate, or require any
consent, approval or notice under, any provision of any judgment, order, decree,
statute, law, rule or regulation applicable to the Company or (ii) violate or
conflict with the certificate of incorporation or by laws of the Company or
constitute a material violation of or default under any contract, commitment,
agreement, understanding, arrangement or other restriction of any kind to which
the Company is a party or by which the Company or its assets are bound.
ARTICLE IV
MISCELLANEOUS
Section 4.1 Expenses. All costs and expenses incurred in connection with
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this Agreement shall be paid by the party incurring such costs or expenses;
provided, however, that the Company shall pay reasonable fees and expenses of
counsel to Cerberus incurred in connection with the negotiation and execution of
this Agreement.
Section 4.2 Further Assurances. From time to time, at the request of the
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Company, in the case of Cerberus, or at the request of Cerberus, in the case of
the Company, and without further consideration, each party shall execute and
deliver or cause to be executed and delivered such additional documents and
instruments and take all such further action as may be reasonably necessary or
desirable to consummate the transactions contemplated by this Agreement.
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Section 4.3 Specific Performance. Cerberus agrees that the Company would
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be irreparably damaged if for any reason Cerberus fails to perform any of
Cerberus' obligations under this Agreement, and that the Company would not have
an adequate remedy at law for money damages in such event. Accordingly, the
Company shall be entitled to seek specific performance and injunctive and other
equitable relief to enforce the performance of this Agreement by Cerberus. This
provision is without prejudice to any other rights that the Company may have
against Cerberus for any failure to perform its obligations under this
Agreement.
Section 4.4 Amendments, Termination. This Agreement may not be modified
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or amended except by an instrument or instruments in writing signed by each
party hereto. The representations, warranties, covenants and agreements set
forth in Article I, Article II and Article III shall terminate, except with
respect to liability for prior breaches thereof, upon the earliest to occur of
(i) December 7, 1998, (ii) termination of the Merger Agreement in accordance
with its terms, (iii) the Closing Date and (iv) the date, if any, upon which
PhoneTel's Board of Directors withdraws, modifies or changes its recommendation
or approval of the Merger Agreement or the PhoneTel Merger in a manner adverse
to the Company (the "Termination Date").
Section 4.5 Assignment. Subject to Section 1.5 hereof, neither this
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Agreement nor any of the rights, interests or obligations under this Agreement
shall be assigned, in whole or in part, by operation of law or otherwise by any
of the parties without the prior written consent of the other parties. Subject
to the preceding sentence, this Agreement shall be binding upon, and inure to
the benefit of, the parties hereto and their respective successors and assigns.
Section 4.6 Certain Events. Cerberus agrees that this Agreement and the
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obligations hereunder shall attach to the Warrants, Preferred Stock, Currently
Held Shares and Shares and shall be binding upon any person to which legal or
beneficial ownership of such shares shall pass, whether by operation of law or
otherwise.
Section 4.7 Entire Agreement. This Agreement (including the documents
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referred to herein) (a) constitutes the entire agreement, and supersedes all
prior agreements and understanding, both oral and written between the parties
with respect to the subject matter of this Agreement and (b) is not intended to
confer upon any person other than the parties hereto any rights or remedies.
Section 4.8 Notices. All notices and other communications hereunder shall
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be in writing and shall be deemed given if delivered personally, sent by
documented overnight delivery service or telecopied with confirmation of
receipt, to the parties at the addresses specified below (or at such other
address or telecopy or telex number for a party as shall be specified by like
notice):
If to the Company, to:
Davel Communications Group, Inc.
0000 Xxxxxxx Xxxxxxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxxxxxx, Xx., Esq.
Facsimile: (000) 000-0000
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with a copy to:
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: R. Xxxxx Xxxx, Esq.
Facsimile: (000) 000-0000
If to Cerberus, to:
Cerberus Partners L.P.
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xx. Xxxx Xxxxxxx
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxxxxx, Xxxxxxx P.C.
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
Section 4.9 Governing Law. This Agreement shall be governed by, and
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construed in accordance with, the laws of the State of New York regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
Section 4.10 Counterparts. This Agreement may be executed in two or more
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counterparts, all of which shall be considered one and the same agreement, and,
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties in original or facsimile form.
Section 4.11 Interpretation. The headings contained in this Agreement
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are inserted for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement.
Section 4.12 Severability. Any provision hereof which is invalid or
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unenforceable shall be ineffective to the extent of such invalidity or
unenforceability, without affecting in any way the remaining provisions hereof.
Section 4.13 Consent to Jurisdiction. Each party hereto irrevocably
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submits to the nonexclusive jurisdiction of (a) the state courts of the State of
New York and (b) the United States
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federal district courts located in the State of New York for the purposes of any
suit, action or other proceeding arising out of this Agreement or any
transaction contemplated hereby.
Section 4.14 Attorney's Fees. If any action at law or in equity is
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necessary to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to reasonable attorneys' fees, costs and necessary
disbursements, in addition to any other relief to which such party may be
entitled.
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IN WITNESS WHEREOF, this Agreement has been signed by or on behalf of each
of the parties as of the date first above written.
CERBERUS PARTNERS, L.P.
By: /s/ Xxxx Xxxxxxx
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Name: Xxxx Xxxxxxx
Title: Managing Director
DAVEL COMMUNICATIONS GROUP, INC.
By: /s/ Xxxxxxxx X. Xxxxxxxxxx, Xx.
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Name: Xxxxxxxx X. Xxxxxxxxxx, Xx.
Title: Senior Vice President
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