EXHIBIT 2.1
Execution Copy
AGREEMENT AND PLAN OF REORGANIZATION AND MERGER
dated
February 19, 2002
by and among
Davel Communications, Inc.,
Davel Financing Company, L.L.C.,
DF Merger Corp.,
PT Merger Corp.
and
PhoneTel Technologies, Inc.
EXHIBIT 2.1
TABLE OF CONTENTS
Page
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ARTICLE I THE RESTRUCTURING.............................................. 2
Section 1.01 Changes to PhoneTel Indebtedness....................................... 2
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Section 1.02 Changes to PhoneTel Equity Capitalization.............................. 2
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Section 1.03 Changes to Davel Indebtedness.......................................... 2
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Section 1.04 Changes to Davel Equity Capitalization................................. 3
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ARTICLE II THE PHONETEL MERGER........................................... 3
Section 2.01 Effectuation of the PhoneTel Merger.................................... 3
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Section 2.02 Conversion of PhoneTel Shares.......................................... 3
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Section 2.03 Exchange of PhoneTel Shares............................................ 4
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Section 2.04 Certain PhoneTel Adjustments........................................... 7
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Section 2.05 Stock Options and Warrants............................................. 7
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Section 2.06 Dissenter's Rights..................................................... 9
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Section 2.07 PhoneTel Articles of Incorporation..................................... 9
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Section 2.08 PhoneTel Code of Regulations........................................... 10
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Section 2.09 Directors and Officers................................................. 10
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ARTICLE III THE DAVEL MERGER............................................. 10
Section 3.01 Effectuation of Davel Merger........................................... 10
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Section 3.02 Conversion of D Sub Shares............................................. 10
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Section 3.03 Exchange of Davel Shares............................................... 11
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Section 3.04 Davel Financing Surviving Company
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Certificate of Formation............................................... 13
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Section 3.05 Davel Financing Surviving Company
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Limited Liability Company Agreement.................................... 13
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Section 3.06 Davel Financing Surviving Company Sole Managing Member................. 13
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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PHONETEL....................................... 13
Section 4.01 Corporate Organization................................................. 13
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Section 4.02 Authorization.......................................................... 14
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Section 4.03 Capital Stock.......................................................... 14
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Section 4.04 Subsidiaries........................................................... 15
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Section 4.05 Consents and Approvals; No Violation................................... 15
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Section 4.06 SEC Reports and Financial Statements................................... 16
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Section 4.07 Absence of Undisclosed Liabilities..................................... 16
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Section 4.08 Changes................................................................ 17
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Section 4.09 Investigations; Litigation............................................. 17
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Section 4.10 Contracts and Commitments.............................................. 18
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Section 4.11 Environmental Matters.................................................. 18
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EXHIBIT 2.1
Section 4.12 Taxes............................................. 19
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Section 4.13 Employment Agreements............................. 19
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Section 4.14 Change of Control Provisions...................... 19
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Section 4.15 Employee Benefit Plans............................ 20
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Section 4.16 Licenses.......................................... 21
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Section 4.17 Real Estate Leases................................ 21
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Section 4.18 Intellectual Property............................. 21
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Section 4.19 Compliance with Other Instruments and Laws........ 22
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Section 4.20 Employees......................................... 22
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Section 4.21 Information Supplied.............................. 22
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Section 4.22 Certain Fees...................................... 22
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Section 4.23 Opinion of Financial Advisor...................... 23
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Section 4.24 Voting Requirements............................... 23
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Section 4.25 State Takeover Statutes........................... 23
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Section 4.26 Payphones......................................... 23
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Section 4.27 Average Net Revenue............................... 23
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ARTICLE V REPRESENTATIONS AND WARRANTIES OF DAVEL...................... 23
Section 5.01 Corporate Organization............................ 23
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Section 5.02 Authorization..................................... 24
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Section 5.03 Capital Stock..................................... 24
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Section 5.04 Subsidiaries...................................... 25
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Section 5.05 Consents and Approvals; No Violations............. 25
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Section 5.06 SEC Reports and Financial Statements.............. 26
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Section 5.07 Absence of Undisclosed Liabilities................ 26
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Section 5.08 Changes........................................... 26
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Section 5.09 Investigations; Litigation........................ 27
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Section 5.10 Contracts and Commitments......................... 28
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Section 5.11 Environmental Matters............................. 28
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Section 5.12 Taxes............................................. 28
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Section 5.13 Employment Agreements............................. 29
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Section 5.14 Change of Control Provisions...................... 29
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Section 5.15 Employee Benefit Plans............................ 29
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Section 5.16 Licenses.......................................... 30
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Section 5.17 Compliance with Other Instruments and Laws........ 31
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Section 5.18 Employees......................................... 31
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Section 5.19 Information Supplied.............................. 31
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Section 5.20 State Takeover Statutes........................... 32
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Section 5.21 Certain Fees...................................... 32
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Section 5.22 Opinion of Financial Advisor...................... 32
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Section 5.23 Voting Requirements............................... 32
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Section 5.24 Payphones......................................... 32
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Section 5.25 Average Net Revenue............................... 32
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EXHIBIT 2.1
ARTICLE VI COVENANTS OF PHONETEL............................. 32
Section 6.01 Conduct of Business by PhoneTel Pending
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the PhoneTel Merger....................................... 32
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Section 6.02 Stockholders' Meeting..................................... 34
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Section 6.03 Access to Information..................................... 34
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Section 6.04 No Solicitation........................................... 34
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Section 6.05 Corporate Organization.................................... 35
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Section 6.06 Warrants.................................................. 35
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Section 6.07 Confidentiality........................................... 35
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ARTICLE VII COVENANTS OF DAVEL.............................. 35
Section 7.01 Conduct of Business by Davel Pending the Davel Merger..... 35
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Section 7.02 Confidentiality........................................... 37
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Section 7.03 Obligations of D Sub and P Sub............................ 37
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Section 7.04 Indemnification........................................... 37
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Section 7.05 Davel Stockholders' Meeting............................... 38
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Section 7.06 Amendment of Certificate of Incorporation................. 38
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Section 7.07 Employee Matters.......................................... 38
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ARTICLE VIII COVENANTS OF THE PARTIES.......................... 39
Section 8.01 Reasonable Best Efforts................................... 39
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Section 8.02 Certain Filings........................................... 39
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Section 8.03 Public Announcements...................................... 40
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Section 8.04 Further Assurances........................................ 40
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Section 8.05 Notices of Certain Events................................. 40
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Section 8.06 Preparation of the Form S-4 and the Proxy Statement....... 40
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Section 8.07 Letters of Accountants.................................... 41
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Section 8.08 Affiliates................................................ 41
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Section 8.09 Representations........................................... 41
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ARTICLE IX CONDITIONS TO THE MERGERS........................... 42
Section 9.01 Conditions to the Obligations of Each Party............... 42
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Section 9.02 Conditions to the Obligations of Davel,
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Davel Financing, D Sub and P Sub.......................... 42
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Section 9.03 Conditions to the Obligations of PhoneTel................. 43
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ARTICLE X TERMINATION AND WAIVER............................. 43
Section 10.01 Termination............................................... 43
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Section 10.02 Waiver................................................... 44
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Section 10.03 Effect of Termination.................................... 44
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ARTICLE XI MISCELLANEOUS................................. 45
Section 11.01 Closing.................................................. 45
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Section 11.02 Notices.................................................. 45
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EXHIBIT 2.1
Section 11.03 Survival of Representations and Warranties 46
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Section 11.04 Amendments; No Waivers 46
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Section 11.05 Expenses 46
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Section 11.06 Successors and Assigns 46
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Section 11.07 Governing Law; Jurisdiction 46
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Section 11.08 Counterparts; Effectiveness 47
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Section 11.09 Headings; Interpretation 47
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Section 11.10 No Third Party Beneficiaries 47
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Section 11.11 Entire Agreement 47
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DEFINED TERMS
Page
2002 Credit Facility....................................................... 2
Acquisition Proposal....................................................... 34
Adjusted PhoneTel Option................................................... 7
Adjusted PhoneTel Warrant.................................................. 8
Affected Employee.......................................................... 38
Affiliate List............................................................. 41
Agreement.................................................................. 1
Amended Plan............................................................... 8
Average Net Revenue........................................................ 23
Closing.................................................................... 45
Closing Date............................................................... 45
Code....................................................................... 2
Confidentiality Agreement.................................................. 35
D Sub...................................................................... 1
D Sub Certificates......................................................... 11
D Sub Stock................................................................ 3
Davel...................................................................... 1
Davel 10-K................................................................. 26
Davel Benefit Plans........................................................ 30
Davel Common Stock......................................................... 4
Davel Contracts............................................................ 28
Davel Disclosure Letter.................................................... 23
Davel Effective Time....................................................... 10
Davel Exchange Fund........................................................ 11
Davel Financing............................................................ 1
Davel Financing Certificate of Merger...................................... 10
Davel Financing Surviving Company.......................................... 10
Davel Investigation........................................................ 27
Davel Lenders.............................................................. 1
Davel Material Adverse Effect.............................................. 24
Davel Merger............................................................... 1
Davel Merger Consideration................................................. 10
Davel Options.............................................................. 24
Davel Reports.............................................................. 26
Davel Restructuring........................................................ 1
Davel Site Location Agreements............................................. 28
Davel Stock Option Plans................................................... 8
Davel Stockholder Approval................................................. 24
Davel Stockholders Meeting................................................. 38
Davel Subsidiaries......................................................... 25
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Davel Subsidiary............................................................ 25
Davel Voting Agreements..................................................... 2
Davel Warrants.............................................................. 24
Delaware Law................................................................ 10
Delaware LLC Act............................................................ 10
Disclosure Document......................................................... 40
Dissenting Shares........................................................... 9
Environmental and Safety Laws............................................... 28
Environmental Laws.......................................................... 18
ERISA....................................................................... 20
Exchange Act................................................................ 15
Exchange Agent Agreement.................................................... 4
Exchange Agreement.......................................................... 2
Exchange Ratio.............................................................. 4
Filed Davel Reports......................................................... 26
Filed PhoneTel Reports...................................................... 17
Form S-4.................................................................... 22
GAAP........................................................................ 16
Governmental Entity......................................................... 15
Indemnified Parties......................................................... 37
Indemnifying Parties........................................................ 37
Intellectual Property....................................................... 21
Investigation............................................................... 17
Licenses.................................................................... 21
Location Owners............................................................. 18
Mergers..................................................................... 1
New Plan.................................................................... 8
Ohio Law.................................................................... 3
P Sub....................................................................... 1
PhoneTel.................................................................... 1
PhoneTel 10-K............................................................... 16
PhoneTel Certificate of Merger.............................................. 3
PhoneTel Certificates....................................................... 4
PhoneTel Common Stock....................................................... 3
PhoneTel Contracts.......................................................... 18
PhoneTel Disclosure Letter.................................................. 14
PhoneTel Effective Time..................................................... 3
PhoneTel Exchange Fund...................................................... 4
PhoneTel Lenders............................................................ 1
PhoneTel Material Adverse Effect............................................ 14
PhoneTel Merger............................................................. 1
PhoneTel Merger Consideration............................................... 4
PhoneTel Options............................................................ 7
PhoneTel Reports............................................................ 16
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Page
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PhoneTel Restructuring...................................................... 1
PhoneTel Site Location Agreements........................................... 18
PhoneTel Stock Option Plans................................................. 8
PhoneTel Stockholder Approval............................................... 14
PhoneTel Stockholders Meeting............................................... 34
PhoneTel Subsidiaries....................................................... 15
PhoneTel Subsidiary......................................................... 15
PhoneTel Voting Agreements.................................................. 2
PhoneTel Warrants........................................................... 8
Plans....................................................................... 20
Proxy Statement............................................................. 15
SEC......................................................................... 8
Securities Act.............................................................. 16
Servicing Agreement......................................................... 1
Surviving Corporation....................................................... 3
Trading Day................................................................. 6
Transactions................................................................ 1
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AGREEMENT AND PLAN OF REORGANIZATION AND MERGER
This AGREEMENT AND PLAN OF REORGANIZATION AND MERGER (this
"Agreement") is made and entered into as of February 19, 2002, by and among
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Davel Communications, Inc., a Delaware corporation ("Davel"), Davel Financing
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Company, L.L.C., a Delaware limited liability company ("Davel Financing"), DF
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Merger Corp., a Delaware corporation and a wholly owned subsidiary of Davel
Financing ("D Sub"), PT Merger Corp., an Ohio corporation and a wholly owned
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subsidiary of Davel Financing ("P Sub"), and PhoneTel Technologies, Inc., an
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Ohio corporation ("PhoneTel").
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RECITALS
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WHEREAS, the Boards of Directors of Davel and PhoneTel deem it
advisable and in the best interests of the stockholders of such corporations to
effect (i) a restructuring of Davel's and PhoneTel's senior secured indebtedness
and (ii) a business combination of Davel and PhoneTel through the transactions
provided for herein (collectively, the "Transactions"), as a result of which
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PhoneTel shall become a wholly owned subsidiary of Davel Financing;
WHEREAS, Davel and PhoneTel have executed a letter of intent, dated
June 12, 2001, as amended from time to time, pursuant to which Davel and
PhoneTel have expressed their mutual intent to enter into this Agreement and to
consummate the Transactions;
WHEREAS, Davel and PhoneTel have executed a Servicing Agreement, dated
as of June 12, 2001, as amended from time to time, designed to commence cost
savings initiatives in advance of the closing of the Transactions (the
"Servicing Agreement");
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WHEREAS, the senior secured lenders of Davel listed in Section 1.03 of
the Davel Disclosure Letter (the "Davel Lenders") have agreed with Davel, and
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the senior secured lenders of PhoneTel listed in Section 1.01 of the PhoneTel
Disclosure Letter (the "PhoneTel Lenders") have agreed with PhoneTel, to the
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respective debt restructurings referenced in Article I hereof (the "Davel
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Restructuring" and "PhoneTel Restructuring," as applicable);
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WHEREAS, in order to effect the Transactions, P Sub shall be merged
with and into PhoneTel with PhoneTel surviving as a wholly owned subsidiary of
Davel Financing (the "PhoneTel Merger") and D Sub shall be merged with and into
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Davel Financing with Davel Financing surviving as a wholly owned subsidiary of
Davel (the "Davel Merger" and collectively with the PhoneTel Merger, the
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"Mergers"), in each case pursuant to this Agreement;
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WHEREAS, the respective Boards of Directors of Davel, PhoneTel, D Sub
and P Sub, and the sole managing member of Davel Financing, have approved the
Transactions and unanimously resolved to recommend that the Transactions be
approved by their respective stockholders;
WHEREAS, concurrently with the execution and delivery of this
Agreement and as a condition and inducement to the willingness of Davel to enter
into this Agreement, each person set forth on Exhibit A, attached hereto, has
entered into Voting Agreements with Davel dated the date of this Agreement
(collectively, the "PhoneTel Voting Agreements");
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WHEREAS, concurrently with the execution and delivery of this
Agreement and as a condition and inducement to PhoneTel's willingness to enter
into this Agreement, each person set forth on Exhibit B, attached hereto, has
entered into Voting Agreements with PhoneTel, dated the date of this Agreement
(collectively, the "Davel Voting Agreements"); and
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WHEREAS, Davel, PhoneTel, Davel Financing, D Sub and P Sub desire, for
Federal income tax purposes, that the Mergers qualify as tax-free
reorganizations under the provisions of Section 368(a) of the Internal Revenue
Code of 1986, as amended (the "Code") and that this Agreement be adopted as a
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plan of reorganization under the provisions of Section 368(a) of the Code;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
representations, warranties, covenants and agreements set forth herein, the
parties agree as follows:
ARTICLE I
THE RESTRUCTURING
Section 1.01 Changes to PhoneTel Indebtedness. As more fully set
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forth in Section 2.2 of the Exchange Agreement (the "Exchange Agreement"), dated
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as of the date hereof, by and among PhoneTel, Cherokee Communications, Inc., a
Texas corporation and a wholly owned subsidiary of PhoneTel, Davel, Davel
Financing, D Sub, the PhoneTel Lenders and the Davel Lenders, the PhoneTel
Lenders have agreed to exchange for shares of PhoneTel Common Stock a sufficient
amount of PhoneTel's consolidated senior indebtedness outstanding so that
PhoneTel will, as of immediately prior to the PhoneTel Effective Time, have
outstanding senior secured indebtedness (other than any secured indebtedness
outstanding under that certain Credit Agreement, dated February 19, 2002 (the
"2002 Credit Facility")) not exceeding $36.5 million in the aggregate, all of
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which will constitute principal and not accrued interest, consisting of two
tranches of $18.25 million each bearing such terms and conditions as are set
forth in the Commitment Letter.
Section 1.02 Changes to PhoneTel Equity Capitalization. As more fully
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set forth in Section 2.2 of the Exchange Agreement, PhoneTel shall issue to the
PhoneTel Lenders 112,246,511 shares of PhoneTel Common Stock. Such shares of
PhoneTel Common Stock shall be converted in the PhoneTel Merger for shares of
Davel Common Stock in accordance with the provisions of Article II hereof.
Section 1.03 Changes to Davel Indebtedness. As more fully set forth
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in Section 2.1 of the Exchange Agreement, dated as of the date hereof, by and
among Davel, PhoneTel, Davel Financing, the other Subsidiaries of Davel named
therein, the Davel Lenders and the PhoneTel
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Lenders, the Davel Lenders have agreed to exchange that portion of Davel's
outstanding consolidated senior indebtedness (other than any secured
indebtedness outstanding under the 2002 Credit Facility) in excess of $63.5
million in the aggregate (all of which $63.5 million will constitute principal
and not accrued interest and thereafter consist of two tranches of $31.75
million each bearing such terms and conditions as are set forth in the Exchange
Agreement) in return for all of the outstanding shares of D Sub's Common Stock,
no par value per share (the "D Sub Stock").
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Section 1.04 Changes to Davel Equity Capitalization. As contemplated
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in Section 2.1 of the Exchange Agreement, Davel shall, in accordance with
Article III below, issue to the Davel Lenders in the Davel Merger 380,612,730
shares of Davel Common Stock.
ARTICLE II
THE PHONETEL MERGER
Section 2.01 Effectuation of the PhoneTel Merger.
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(a) On the terms and subject to the conditions hereof, on the Closing
Date, the parties shall effect the PhoneTel Merger, pursuant to which P Sub
shall be merged with and into PhoneTel in accordance with the provisions of
Section 1701.78 of the Ohio General Corporation Law ("Ohio Law"), whereupon the
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separate corporate existence of P Sub shall cease, and PhoneTel shall be the
surviving corporation (the "Surviving Corporation"), with all of its outstanding
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capital stock then being held by Davel Financing.
(b) On the Closing Date, in order to effectuate the PhoneTel Merger,
PhoneTel and P Sub shall file a certificate of merger with the Secretary of
State of the State of Ohio (the "PhoneTel Certificate of Merger") and make all
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other filings or recordings required by Ohio Law in connection with the PhoneTel
Merger. The PhoneTel Merger shall become effective at 5:00 p.m., E.S.T., on the
Closing Date, which time shall be specified as the effective time on the
PhoneTel Certificate of Merger (the "PhoneTel Effective Time").
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(c) From and after the PhoneTel Effective Time, the Surviving
Corporation shall possess all of the assets, rights, privileges, powers and
franchises and be subject to all of the liabilities, restrictions, disabilities
and duties of PhoneTel and P Sub, all as provided under Ohio Law.
Section 2.02 Conversion of PhoneTel Shares.
(a) At the PhoneTel Effective Time and by virtue of the PhoneTel
Merger and without any action on the part of the holders thereof:
(i) each share of common stock, par value $0.01 per share, of
PhoneTel ("PhoneTel Common Stock") held by PhoneTel as treasury stock, or
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owned by Davel or any Davel Subsidiary, if any, immediately prior to the
PhoneTel Effective Time shall be canceled, and no payment shall be made
with respect thereto; provided, however, that any shares of PhoneTel Common
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Stock as to which PhoneTel or any PhoneTel
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Subsidiary is or may be required to act as a fiduciary or in a similar
capacity shall not be canceled but, instead, shall be treated as set forth
in Section 2.02(a)(iii) below;
(ii) each share of capital stock of P Sub outstanding
immediately prior to the PhoneTel Effective Time shall be converted into
and become one share of capital stock of the Surviving Corporation with the
same rights and privileges as the shares so converted and shall constitute
the only outstanding shares of capital stock of the Surviving Corporation;
and
(iii) subject to Sections 2.03(e) and 2.06 hereof, each share of
PhoneTel Common Stock outstanding immediately prior to the PhoneTel
Effective Time shall, except as otherwise provided in clause (i) of this
subsection, be converted into the right to receive 1.8233 (the "Exchange
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Ratio") fully paid and nonassessable shares of common stock, par value $.01
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per share (the "Davel Common Stock"), of Davel (the "PhoneTel Merger
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Consideration"). As of the PhoneTel Effective Time, all such shares of
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PhoneTel Common Stock shall no longer be outstanding and shall
automatically be canceled and retired and shall cease to exist, and each
holder of a certificate representing any such PhoneTel Common Stock shall
cease to have any rights with respect thereto, except the right to receive
the PhoneTel Merger Consideration and any cash in lieu of fractional shares
of Davel Common Stock to be issued or paid in consideration therefor upon
surrender of such certificate in accordance with Section 2.03(e) hereof,
without interest.
Section 2.03 Exchange of PhoneTel Shares.
(a) Prior to the PhoneTel Effective Time, Davel shall enter into an
agreement (the "Exchange Agent Agreement") with ChaseMellon Shareholder
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Services, L.L.C., as exchange agent for the PhoneTel Merger, which shall provide
that, in addition to the matters described in Section 3.03 below, Davel shall
deposit with the Exchange Agent prior to the PhoneTel Effective Time, for the
benefit of the holders of shares of PhoneTel Common Stock, for exchange in
accordance with this Article II, through the Exchange Agent, certificates
representing the shares of Davel Common Stock issuable pursuant to Section 2.02
hereof in exchange for outstanding shares of PhoneTel Common Stock (such shares
of Davel Common Stock, together with any dividends or distributions with respect
thereto payable to such holder in accordance with Section 2.03(c) hereof, and
any cash payable in lieu of any fractional shares of Davel Common Stock in
accordance with Section 2.03(e) hereof, being herein referred to as the
"PhoneTel Exchange Fund").
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(b) As soon as reasonably practicable after the PhoneTel Effective
Time, the Exchange Agent shall mail to each holder of record of a certificate or
certificates which immediately prior to the PhoneTel Effective Time represented
outstanding shares of PhoneTel Common Stock (the "PhoneTel Certificates") whose
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shares of PhoneTel Common Stock were converted into the right to receive the
PhoneTel Merger Consideration pursuant to Section 2.02 hereof (i) a letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the PhoneTel Certificates shall pass, only upon delivery of
the PhoneTel Certificates to the Exchange Agent and shall be in such form and
have such other provisions typical in transactions of
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this type as Davel may reasonably specify) and (ii) instructions for use in
surrendering the PhoneTel Certificates, if in physical form, in exchange for the
PhoneTel Merger Consideration, as applicable. Upon surrender of a PhoneTel
Certificate for cancellation to the Exchange Agent, together with such letter of
transmittal, duly executed, and such other documents as may reasonably be
required by the Exchange Agent, the holder of such PhoneTel Certificate shall be
entitled to receive in exchange therefor a certificate representing that number
of whole shares of Davel Common Stock which such holder has the right to receive
pursuant to the provisions of this Article II, any dividends or other
distributions with respect thereto payable to such holder in accordance with
Section 2.03(c) hereof and any cash payable in lieu of any fractional share of
Davel Common Stock in accordance with Section 2.03(e) hereof, and the PhoneTel
Certificate so surrendered shall forthwith be canceled. In the event of a
transfer of ownership of shares of PhoneTel Common Stock which is not registered
in the transfer records of PhoneTel, a certificate representing the proper
number of shares of Davel Common Stock may be issued to a person other than the
person in whose name the PhoneTel Certificate so surrendered is registered if
such PhoneTel Certificate, if in physical form, is properly endorsed or
otherwise in proper form for transfer and the person requesting such issuance
pays any transfer or other taxes required by reason of the issuance of shares of
Davel Common Stock to a person other than the registered holder of such PhoneTel
Certificate or establishes to the satisfaction of Davel that such tax has been
paid or is not applicable. Until surrendered as contemplated by this Section
2.03, each PhoneTel Certificate shall be deemed at any time after the PhoneTel
Effective Time to represent only the right to receive upon such surrender that
number of whole shares of Davel Common Stock which the holder thereof has the
right to receive pursuant to the provisions of this Article II, any dividends or
other distributions payable to the holder thereof in accordance with Section
2.03(c) hereof and cash in lieu of any fractional share of Davel Common Stock in
accordance with Section 2.03(e) hereof. No interest shall be paid or shall
accrue on any cash payable to holders of PhoneTel Certificates pursuant to the
provisions of this Article II.
(c) No dividends or other distributions with respect to Davel Common
Stock with a record date after the PhoneTel Effective Time shall be paid to the
holder of any unsurrendered PhoneTel Certificate, if in physical form, with
respect to the shares of Davel Common Stock obtainable upon surrender thereof,
and no cash payment in lieu of a fractional share of Davel Common Stock shall be
paid to any such holder pursuant to Section 2.03(e) hereof, in each case until
the surrender of such PhoneTel Certificate in accordance with this Article II,
and all such dividends, other distributions and cash in lieu of fractional
shares of Davel Common Stock shall be paid by Davel to the Exchange Agent and
shall be included in the PhoneTel Exchange Fund only after a proper surrender of
the PhoneTel Certificate has been made. Subject to the effect of applicable
escheat or similar laws, following surrender of any such PhoneTel Certificate,
there shall be paid to the holder of the certificate representing whole shares
of Davel Common Stock issued in exchange therefor, without interest, (i) at the
time of such surrender, the amount of dividends or other distributions with a
record date after the PhoneTel Effective Time theretofore paid with respect to
such whole shares of Davel Common Stock, and the amount of any cash payable in
lieu of a fractional share of Davel Common Stock to which such holder is
entitled pursuant to Section 2.03(e) hereof, and (ii) at the appropriate payment
date, the amount of dividends or other distributions with a record date after
the PhoneTel Effective Time but prior to such surrender and with a payment date
subsequent to such surrender payable with respect to such whole shares of Davel
Common Stock.
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(d) All shares of Davel Common Stock issued upon the surrender for
exchange of PhoneTel Certificates in accordance with the terms of this Article
II (including any cash paid in lieu of fractional shares of Davel Common Stock
pursuant to this Article II) shall be deemed to have been issued (and paid) in
full satisfaction of all rights pertaining to PhoneTel Common Stock theretofore
represented by such PhoneTel Certificates, subject, however, to the Surviving
Corporation's obligation to pay any dividends or make any other distributions
with a record date prior to the PhoneTel Effective Time which may have been
declared or made by PhoneTel on such shares of PhoneTel Common Stock which
remain unpaid at the PhoneTel Effective Time, and there shall be no further
registration of transfers on the stock transfer books of the Surviving
Corporation of the shares of PhoneTel Common Stock which were outstanding
immediately prior to the PhoneTel Effective Time. If, after the PhoneTel
Effective Time, PhoneTel Certificates are presented to the Surviving Corporation
or the Exchange Agent for any reason, they shall be canceled and exchanged as
provided in this Article II, except as otherwise provided by law.
(e) No certificates or scrip representing fractional shares of Davel
Common Stock shall be issued upon the surrender for exchange of PhoneTel
Certificates, no dividend or distribution of Davel shall relate to such
fractional share interests and such fractional share interests shall not entitle
the owner thereof to vote or to any rights of a stockholder of Davel.
(i) Davel shall pay or cause to be paid to each former holder
of PhoneTel Common Stock an amount in cash equal to the product obtained by
multiplying (A) the fractional share interest to which such former holder
(after taking into account all shares of PhoneTel Common Stock held at the
PhoneTel Effective Time by such holder) would otherwise be entitled by (B)
the average of the closing bid prices on the Nasdaq OTC market during the
ten consecutive Trading Days ending on the second Trading Day prior to the
date of the PhoneTel Stockholders Meeting. For purposes of this Agreement,
"Trading Day" shall mean any day on which the Nasdaq OTC market is open for
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trading.
(ii) As soon as practicable after the determination of the
amount of cash, if any, to be paid to holders of PhoneTel Certificates
formerly representing PhoneTel Common Stock with respect to any fractional
share interests, the Exchange Agent shall make available such amounts to
such holders of PhoneTel Certificates formerly representing shares of
PhoneTel Common Stock subject to and in accordance with the terms of
Section 2.03(c) hereof.
(f) Any portion of the PhoneTel Exchange Fund which remains
undistributed to the holders of PhoneTel Certificates six months after the
Closing Date shall be delivered to Davel, upon demand, and any holders of the
PhoneTel Certificates who have not theretofore surrendered their PhoneTel
Certificates in accordance with this Article II shall thereafter look only to
Davel for payment of their claims for PhoneTel Merger Consideration, any
dividends or distributions with respect to Davel Common Stock, as applicable,
and any cash in lieu of fractional shares of Davel Common Stock.
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(g) None of Davel, PhoneTel or the Exchange Agent shall be liable to
any person in respect of any shares of Davel Common Stock, any dividends or
distributions with respect thereto, or any cash in lieu of fractional shares of
Davel Common Stock, in each case, delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law. If any PhoneTel
Certificate in physical form shall not have been surrendered prior to the date
on which any PhoneTel Merger Consideration, any dividends or distributions
payable to the holder of such PhoneTel Certificate or any cash payable to the
holder of such PhoneTel Certificate formerly representing PhoneTel Common Stock
pursuant to this Article II would otherwise escheat to or become the property of
any Governmental Entity, any such PhoneTel Merger Consideration, dividends or
distributions in respect of such PhoneTel Certificate or any such cash shall, to
the extent permitted by applicable law, become the property of the Surviving
Corporation, free and clear of all claims or interest of any person previously
entitled thereto.
(h) The Exchange Agent shall invest any cash included in the PhoneTel
Exchange Fund in investment grade securities or U.S. government obligations, as
directed by Davel, on a daily basis. Any interest and other income resulting
from such investments shall be paid to Davel.
(i) If any PhoneTel Certificate in physical form shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by the
person claiming such PhoneTel Certificate to be lost, stolen or destroyed and,
if required by the Surviving Corporation, the posting by such person of a bond
in such reasonable amount as the Surviving Corporation may direct as indemnity
against any claim that may be made against it with respect to such PhoneTel
Certificate, the Exchange Agent shall issue in exchange for such lost, stolen or
destroyed PhoneTel Certificate the PhoneTel Merger Consideration and, if
applicable, any unpaid dividends and distributions on shares of Davel Common
Stock deliverable in respect thereof and any cash in lieu of any fractional
share, in each case, due to such person pursuant to this Agreement.
Section 2.04 Certain PhoneTel Adjustments. If, after the date hereof
and on or prior to the PhoneTel Effective Time, the outstanding shares of Davel
Common Stock or PhoneTel Common Stock shall (other than as contemplated by
Article I hereof) be changed into a different number, class or series of shares
or any other security by reason of any reclassification, recapitalization,
reorganization, merger, business combination, split-up, stock split, combination
or exchange of shares, or any dividend payable in stock or other securities
shall be declared thereon with a record date within such period, or any similar
event shall occur, the Exchange Ratio (and/or the security or securities to be
issued to the holders of PhoneTel Common Stock) shall be appropriately adjusted
to provide the effects contemplated by this Agreement prior to such
reclassification, recapitalization, reorganization, merger, business
combination, split-up, stock split, combination, exchange or dividend or similar
event.
Section 2.05 Stock Options and Warrants.
(a) As of the PhoneTel Effective Time, (i) each outstanding option to
purchase PhoneTel Common Stock (collectively, the "PhoneTel Options") shall be
----------------
converted into an
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option (an "Adjusted PhoneTel Option") to purchase the number of shares of Davel
------------------------
Common Stock equal to the number of shares of PhoneTel Common Stock subject to
such options immediately prior to the PhoneTel Effective Time multiplied by the
Exchange Ratio (rounded to the nearest whole number of shares of Davel Common
Stock), at an exercise price per share equal to the exercise price for each such
share of PhoneTel Common Stock subject to such option divided by the Exchange
Ratio (rounded down to the nearest whole cent), and all references in each such
option to PhoneTel shall be deemed to refer to Davel, where appropriate;
provided, however, that the adjustments provided in this clause (i) with respect
-------- -------
to any options which are "incentive stock options" (as defined in Section 422 of
the Code) or which are described in Section 423 of the Code shall be effected so
as not to constitute a modification, extension or renewal of such option under
Section 424(a) of the Code, (ii) Davel shall assume the obligations of PhoneTel
under the PhoneTel Options, (iii) each outstanding warrant to purchase PhoneTel
Common Stock (the "PhoneTel Warrants") shall be converted into a warrant (an
-----------------
"Adjusted PhoneTel Warrant") to purchase the number of shares of Davel Common
-------------------------
Stock equal to the number of shares of PhoneTel Common Stock subject to such
PhoneTel Warrants immediately prior to the PhoneTel Effective Time multiplied by
the Exchange Ratio (rounded to the nearest whole number of shares of Davel
Common Stock), at an exercise price per share equal to the exercise price for
each such share of PhoneTel Common Stock subject to such PhoneTel Warrant
divided by the Exchange Ratio (rounded to the nearest whole cent), and all
references in each such PhoneTel Warrant to PhoneTel shall be deemed to refer to
Davel, where appropriate and (iv) Davel shall assume the obligations of PhoneTel
under the PhoneTel Warrants. The other terms of each Adjusted PhoneTel Option
and Adjusted PhoneTel Warrant, and the plans or agreements under which they were
issued, if any, shall continue to apply in accordance with their terms. The date
of grant of each Adjusted PhoneTel Option and Adjusted PhoneTel Warrant shall be
the date on which the corresponding PhoneTel Option or PhoneTel Warrant was
granted.
(b) PhoneTel and Davel agree that each of the applicable PhoneTel
equity-based compensation plans (the "PhoneTel Stock Option Plans"), programs or
---------------------------
agreements and each of the applicable Davel equity-based compensation plans (the
"Davel Stock Option Plans") shall be amended, to the extent necessary, to
------------------------
reflect the transactions contemplated by this Agreement, including, without
limitation, the conversion of each share of PhoneTel Common Stock held or to be
awarded or paid pursuant to such plans, programs or agreements into shares of
Davel Common Stock on a basis consistent with the transactions contemplated by
this Agreement. PhoneTel and Davel shall submit such amendments to the Davel
Stock Option Plans or such PhoneTel Stock Option Plans, programs or agreements
to their respective stockholders, if such submission is determined to be
necessary by counsel to PhoneTel or Davel after consultation with one another to
preserve the benefits of the PhoneTel Options; provided, however, that such
-------- -------
approval shall not be a condition to the consummation of the Transactions. No
options or other awards shall have been made under any Davel Stock Option Plan,
including the Davel Communications, Inc. 2000 Long-Term Equity Incentive Plan
(in accordance with the following sentence, the "New Plan"), or any PhoneTel
--------
Stock Option Plan at or prior to the PhoneTel Effective Time. Pursuant to
Section 7.05 below, the New Plan shall be amended, as of the PhoneTel Effective
Time, in substantially the form attached hereto as Exhibit C (the "Amended
-------
Plan") to increase the number of options reserved and available for grant under
----
such plan, as necessary to permit four percent (4%) of the shares of Davel
Common Stock
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outstanding immediately after the PhoneTel Effective Time, on a fully-diluted
basis, and including all shares reserved for grant under the Amended Plan.
(c) As of the PhoneTel Effective Time, Davel shall (i) reserve for
issuance the number of shares of Davel Common Stock that shall become subject to
the Adjusted PhoneTel Warrants and Adjusted PhoneTel Options and (ii) issue or
cause to be issued the appropriate number of shares of Davel Common Stock
pursuant to the Adjusted PhoneTel Warrants and Adjusted PhoneTel Options, upon
the exercise or maturation of rights existing thereunder on the PhoneTel
Effective Time or as thereafter granted or awarded. No later than the PhoneTel
Effective Time, Davel shall prepare and file with the Securities and Exchange
Commission (the "SEC") a registration statement on Form S-8 (or other
---
appropriate form) registering a number of shares of Davel Common Stock necessary
to fulfill Davel's obligations under this Section 2.05. Such registration
statement shall be kept effective (and the current status of the prospectus
required thereby shall be maintained), if then required by the SEC, for at least
as long as any Adjusted PhoneTel Options remain outstanding.
(d) As soon as practicable after the PhoneTel Effective Time, Davel
shall deliver to the holders of PhoneTel Options and PhoneTel Warrants
appropriate notices setting forth (i) such holders' rights pursuant to the
respective plans and agreements evidencing the grants of the related PhoneTel
Options and PhoneTel Warrants, (ii) the number of Shares of Davel Common Stock
for which such holder's Adjusted PhoneTel Options or Adjusted PhoneTel Warrants
are then exercisable and the exercise price therefor, and (iii) that such
PhoneTel Options and PhoneTel Warrants and the related plans, programs and
agreements shall be assumed by Davel and shall continue in effect on the same
terms and conditions (subject to the adjustments required by this Section 2.05
after giving effect to the PhoneTel Merger).
Section 2.06 Dissenter's Rights.
(a) Any PhoneTel Common Stock as to which dissenting shareholders'
rights are perfected under Sections 1701.84 and 1701.85 of the Ohio Law
("Dissenting Shares") shall not be converted into or represent a right to
-----------------
receive the PhoneTel Merger Consideration. Holders of Dissenting Shares shall be
entitled only to the rights of a dissenting shareholder under Section 1701.85 of
the Ohio Law, and such PhoneTel Common Stock shall be canceled and retired and
shall cease to exist.
(b) If the rights of any holder who has made a demand for dissenting
shareholders' rights under Section 1701.85 of the Ohio Law are terminated for
any reason other than the purchase by the Surviving Corporation or Davel of the
PhoneTel Common Stock subject to the demand, the shares subject to the demand
shall be converted into and represent only the right to receive the PhoneTel
Merger Consideration, without interest thereon, upon surrender of the
certificates representing the shares, and such shares shall be canceled and
retired and shall cease to exist.
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(c) PhoneTel shall give Davel (i) prompt notice and copies of any
demands for dissenting shareholders' rights under Sections 1701.84 and 1701.85
of the Ohio Law and of any withdrawals of any such demands and (ii) the right to
direct all negotiations and proceedings with respect to any such demands.
PhoneTel shall not, except with the prior written consent of Davel, voluntarily
make any payment with respect to any such demands or any offer to settle any
such demands and PhoneTel's board of directors shall not waive any failure by
any dissenting shareholder to comply with Section 1701.85 of the Ohio Law.
Section 2.07 PhoneTel Articles of Incorporation. The articles of
incorporation of P Sub in effect at the PhoneTel Effective Time shall, without
further action, become (and shall be specified by the PhoneTel Certificate of
Merger to be) the articles of incorporation of the Surviving Corporation until
amended in accordance with applicable law, except that the name of the Surviving
Corporation shall be "PhoneTel Technologies, Inc."
Section 2.08 PhoneTel Code of Regulations. The code of regulations of
P Sub in effect at the PhoneTel Effective Time shall, without further action,
become (and shall be specified by the PhoneTel Certificate of Merger to be) the
code of regulations of the Surviving Corporation until amended in accordance
with applicable law.
Section 2.09 Directors and Officers. From and after the PhoneTel
Effective Time, until successors are duly elected or appointed in accordance
with applicable law, (a) the directors of P Sub at the PhoneTel Effective Time
shall constitute all of the directors of the Surviving Corporation, and (b) the
officers of PhoneTel at the PhoneTel Effective Time shall be the officers of the
Surviving Corporation.
ARTICLE III
THE DAVEL MERGER
Section 3.01 Effectuation of Davel Merger.
(a) On the terms and subject to the conditions hereof, on the Closing
Date, the parties shall effect the Davel Merger, pursuant to which D Sub shall
be merged with and into Davel Financing in accordance with the Delaware General
Corporation Law ("Delaware Law") and with the Delaware Limited Liability Company
------------
Act ("Delaware LLC Act"), whereupon the separate corporate existence of D Sub
----------------
shall cease, and Davel Financing shall be the surviving company (the "Davel
-----
Financing Surviving Company"), with all of its outstanding membership interests
---------------------------
then being held by Davel.
(b) On the Closing Date, in order to effectuate the Davel Merger,
Davel Financing and D Sub shall file a certificate of merger with the Secretary
of State of the State of Delaware (the "Davel Financing Certificate of Merger")
-------------------------------------
and make all other filings or recordings required by the Delaware Law and
Delaware LLC Act in connection with the Davel Merger. The
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Davel Merger shall become effective at 4:59 p.m., E.S.T., on the Closing Date,
which time shall be specified as the effective time on the Davel Financing
Certificate of Merger (the "Davel Effective Time").
--------------------
(c) From and after the Davel Effective Time, the Davel Financing
Surviving Company shall possess all of the assets, rights, privileges, powers
and franchises and be subject to all of the liabilities, restrictions,
disabilities and duties of Davel Financing, all as provided by the Delaware Law
and Delaware LLC Act.
Section 3.02 Conversion of D Sub Shares. At the Davel Effective Time,
by virtue of the Davel Merger and without any action on the part of the holders
thereof, each share (and each fractional share) of D Sub Stock outstanding
immediately prior to the Davel Effective Time shall be converted into the right
to receive fully paid and nonassessable shares of Davel Common Stock (the
"Davel Merger Consideration") in the ratio of 380,612.73 shares of Davel Common
Stock to each share of D Sub Stock (provided that, notwithstanding the foregoing
conversion ratio, to the extent that the application of such conversion ratio to
any holder of D Sub Stock would (after aggregating all such shares, and
fractions thereof, then held by such holder and being so converted) result in
such holder being entitled to receive a fractional share of Davel Common Stock,
then such holder shall be entitled (a) to receive only the highest whole number
of shares to which such holder would be entitled (and such fractional share
shall not be issued or paid to such holder in any other form) in the case in
which such fractional share constitutes less than one-half (1/2) of a share) or
(b) to receive the sum of the highest whole number of shares to which such
holder would be entitled plus one additional share (and such fractional share
shall not be issued or paid to such holder in any other form) in the case in
which such fractional share constitutes one-half (1/2) or more of a share). Each
such share (and fractional share) of D Sub Stock so converted shall cease to be
outstanding (and shall automatically be canceled and retired and shall cease to
exist), and each holder of a certificate representing any such shares, or
fractions thereof, of D Sub Stock shall cease to have any rights with respect
thereto, except the right to receive the Davel Merger Consideration to be issued
in consideration therefor upon surrender of such certificate in accordance with
Section 3.03 hereof, without interest.
Section 3.03 Exchange of Davel Shares.
(a) Pursuant to the Exchange Agent Agreement, Davel shall deposit
with the Exchange Agent prior to the Davel Effective Time, for the benefit of
the holders of shares of D Sub Stock, for exchange in accordance with this
Article III, through the Exchange Agent, certificates representing the shares of
Davel Common Stock issuable pursuant to Section 3.02 hereof in exchange for
outstanding shares, or fractions thereof, of D Sub Stock (such shares of Davel
Common Stock, together with any dividends or distributions with respect thereto
payable to such holder in accordance with Section 3.03(c) hereof being herein
referred to as the "Davel Exchange Fund").
-------------------
(b) As soon as reasonably practicable after the Davel Effective Time,
the Exchange Agent shall mail to each holder of record of a certificate or
certificates which immediately prior to the Davel Effective Time represented
outstanding shares of D Sub Stock (including any book entry in lieu thereof, the
"D Sub Certificates") whose shares of D Sub Stock, or fractions thereof,
------------------
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were converted into the right to receive the Davel Merger Consideration pursuant
to Section 3.02 hereof, (i) a letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the D Sub Certificates
shall pass, only upon, if applicable, delivery of the D Sub Certificates to the
Exchange Agent and shall be in such form and have such other provisions typical
in transactions of this type as Davel may reasonably specify) and (ii)
instructions for use in surrendering the D Sub Certificates, if in physical
form, in exchange for the Davel Merger Consideration, as applicable. Upon
surrender of a D Sub Certificate for cancellation to the Exchange Agent,
together with such letter of transmittal, duly executed, and such other
documents as may reasonably be required by the Exchange Agent, the holder of
such D Sub Certificate shall be entitled to receive in exchange therefor a
certificate representing that number of shares of Davel Common Stock which such
holder has the right to receive pursuant to the provisions of this Section 3.02
hereof, together with any dividends or other distributions with respect thereto
payable to such holder in accordance with Section 3.03(c) hereof, and each D Sub
Certificate so surrendered shall forthwith be canceled. In the event of a
transfer of ownership of shares of D Sub Stock, or fractions thereof, which is
not registered in the transfer records of D Sub, a certificate representing the
proper number of shares of Davel Common Stock may be issued to a person other
than the person in whose name the D Sub Certificate so surrendered is registered
if such D Sub Certificate, if in physical form, is properly endorsed or
otherwise in proper form for transfer and the person requesting such issuance
pays any transfer or other taxes required by reason of the issuance of shares of
Davel Common Stock to a person other than the registered holder of such D Sub
Certificate or establishes to the satisfaction of Davel that such tax has been
paid or is not applicable. Until surrendered as contemplated by this Section
3.03, each D Sub Certificate shall be deemed at any time after the Davel
Effective Time to represent only the right to receive upon such surrender that
number of shares of Davel Common Stock which the holder thereof has the right to
receive pursuant to the provisions of this Article III and any dividends or
other distributions payable to the holder thereof in accordance with Section
3.03(c) hereof. No interest shall be paid or shall accrue on any cash payable to
holders of D Sub Certificates pursuant to the provisions of this Article III.
(c) No dividends or other distributions with respect to D Sub Stock
with a record date after the Davel Effective Time shall be paid to the holder of
any unsurrendered D Sub Certificate, if in physical form, with respect to the
shares of D Sub Stock represented thereby, and all such dividends and other
distributions shall be paid by Davel to the Exchange Agent and shall be included
in the Davel Exchange Fund, in each case, until the surrender of such D Sub
Certificate in accordance with this Article III. Subject to the effect of
applicable escheat or similar laws, following surrender of any such D Sub
Certificate, there shall be paid to the holder of the certificate representing
shares of Davel Common Stock issued in exchange therefor, without interest, (i)
at the time of such surrender, the amount of dividends or other distributions
with a record date after the Davel Effective Time theretofore paid with respect
to such whole shares of Davel Common Stock, and (ii) at the appropriate payment
date, the amount of dividends or other distributions with a record date after
the Davel Effective Time but prior to such surrender and with a payment date
subsequent to such surrender payable with respect to such whole shares of Davel
Common Stock.
(d) All shares of Davel Common Stock issued upon the surrender for
exchange of D Sub Certificates in accordance with the terms of this Article III
shall be deemed to
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have been issued (and paid) in full satisfaction of all rights pertaining to
shares (or fractional shares) of D Sub Stock theretofore represented by such D
Sub Certificates, subject, however, to the Davel Financing Surviving Company's
obligation to pay any dividends or make any other distributions with a record
date prior to the Davel Effective Time which may have been declared or made by
Davel Financing on such shares, or fractional shares, of D Sub Stock which
remain unpaid at the Davel Effective Time, and there shall be no further
registration of transfers on the stock transfer books of the Davel Financing
Surviving Company of D Sub Stock which were outstanding immediately prior to the
Davel Effective Time. If, after the Davel Effective Time, D Sub Certificates are
presented to the Davel Financing Surviving Company or the Exchange Agent for any
reason, they shall be canceled and exchanged as provided in this Article III,
except as otherwise provided by law.
(e) Any portion of the Davel Exchange Fund which remains
undistributed to the holders of the D Sub Certificates six months after the
Closing Date shall be delivered to Davel, upon demand, and any holders of the D
Sub Certificates who have not theretofore surrendered their D Sub Certificates
in accordance with this Article III shall thereafter look only to Davel for
payment of their claims for Davel Merger Consideration and any dividends or
distributions with respect to Davel Common Stock.
(f) None of Davel, D Sub or the Exchange Agent shall be liable to any
person in respect of any shares of Davel Common Stock, any dividends or
distributions with respect thereto, in each case, delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law. If any D
Sub Certificate in physical form shall not have been surrendered prior to the
date on which any Davel Merger Consideration, any dividends or distributions
payable to the holder of such D Sub Certificate or any cash payable to the
holder of such D Sub Certificate formerly representing D Sub Stock pursuant to
this Article III would otherwise escheat to or become the property of any
Governmental Entity, any such Davel Merger Consideration, dividends or
distributions in respect of such D Sub Certificate or such cash shall, to the
extent permitted by applicable law, become the property of the Davel Financing
Surviving Company, free and clear of all claims or interest of any person
previously entitled thereto.
(g) The Exchange Agent shall invest any cash included in the Davel
Exchange Fund, as directed by Davel, on a daily basis. Any interest and other
income resulting from such investments shall be paid to Davel.
(h) If any D Sub Certificate in physical form shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming such D Sub Certificate to be lost, stolen or destroyed and, if required
by Davel, the posting by such person of a bond in such reasonable amount as
Davel may direct as indemnity against any claim that may be made against it with
respect to such D Sub Certificate, the Exchange Agent shall issue in exchange
for such lost, stolen or destroyed D Sub Certificate the Davel Merger
Consideration and, if applicable, any unpaid dividends and distributions on
shares of Davel Common Stock deliverable in respect thereof, in each case, due
to such person pursuant to this Agreement.
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Section 3.04 Davel Financing Surviving Company Certificate of
Formation. The certificate of formation of Davel Financing in effect at the
Davel Effective Time shall continue to be the certificate of formation of the
Davel Financing Surviving Company until amended in accordance with applicable
law.
Section 3.05 Davel Financing Surviving Company Limited Liability
Company Agreement. The limited liability company agreement of Davel Financing in
effect at the Davel Effective Time shall continue to be the limited liability
company agreement of the Davel Financing Surviving Company until amended in
accordance with applicable law.
Section 3.06 Davel Financing Surviving Company Sole Managing Member.
From and after the Davel Effective Time, until successors are duly elected or
appointed in accordance with applicable law, the sole managing member of Davel
Financing at the Davel Effective Time shall continue to be the sole managing
member of the Davel Financing Surviving Company.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PHONETEL
PhoneTel represents and warrants to Davel that:
Section 4.01 Corporate Organization. PhoneTel is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Ohio, and has all requisite corporate power and authority to own, operate and
lease its properties and assets and to carry on its business as it is now being
conducted. Except as set forth in Section 4.01 of the disclosure letter
delivered by PhoneTel to Davel with the execution of this Agreement (the
"PhoneTel Disclosure Letter"), PhoneTel is duly qualified to do business and is
in good standing in each jurisdiction in which the character of its properties
owned or held under lease or the nature of its activities makes such
qualification necessary, except where the failure to be so qualified or to be in
good standing would not, individually or in the aggregate, have a PhoneTel
Material Adverse Effect. As used herein, "PhoneTel Material Adverse Effect"
shall mean a material adverse effect on the ability of PhoneTel to consummate
the Transactions or, as a result of any event, change, circumstance or effect
arising from or having an impact on PhoneTel's business, assets, financial
condition or results of operations, a material adverse effect on the ability of
Davel and its stockholders to realize substantially all of the benefits of the
Transactions.
Section 4.02 Authorization. PhoneTel has the necessary corporate
power and authority to enter into this Agreement and, subject to the approval of
the Transactions, including, but not limited to, the PhoneTel Restructuring, the
PhoneTel Merger and this Agreement (and the transactions and amendments, if any,
to its charter documents contemplated hereby) by the affirmative vote of the
holders of a majority of the outstanding shares of PhoneTel Common Stock on the
applicable record date at the PhoneTel Stockholders Meeting ("PhoneTel
Stockholder Approval"), to carry out its obligations hereunder. The execution
and delivery of this Agreement by PhoneTel, the performance by PhoneTel of its
obligations hereunder and the consummation by PhoneTel of the Transactions have
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been duly and validly authorized by PhoneTel's Board of Directors, have been
unanimously approved by the PhoneTel Board of Directors prior to Davel becoming
an "interested shareholder" (as defined in Section 1704.01(C)(8) of Ohio Law)
and have been approved by PhoneTel's Board of Directors as otherwise required by
PhoneTel's articles of incorporation. Except for PhoneTel Stockholder Approval,
no other corporate proceeding on the part of PhoneTel is necessary for the
execution and delivery of this Agreement by PhoneTel, the performance by
PhoneTel of its obligations hereunder or the consummation by PhoneTel of the
Transactions. This Agreement has been duly and validly executed and delivered by
PhoneTel and is a legal, valid and binding obligation of PhoneTel, enforceable
against PhoneTel in accordance with its terms, except as such enforceability may
be limited by applicable bankruptcy, insolvency, moratorium, reorganization or
other laws affecting creditors' rights generally or by the availability of
equitable remedies generally.
Section 4.03 Capital Stock. The authorized capital stock of PhoneTel
consists of 45,000,000 shares of PhoneTel Common Stock, of which 10,189,684
shares were issued and outstanding and no shares are held in PhoneTel's
treasury. All of the outstanding shares of capital stock of PhoneTel have been
validly issued and are fully paid, nonassessable and free of preemptive rights
with no personal liability attaching to the ownership thereof. Except for (i)
options to acquire up to 345,000 shares of PhoneTel Common Stock and (ii)
warrants to acquire up to 1,077,024 shares of PhoneTel Common Stock, there are
no outstanding subscriptions, options, warrants, rights, contracts or other
arrangements or commitments obligating PhoneTel to issue any shares of its
capital stock or any securities convertible into or exchangeable for shares of
its capital stock. Section 4.03 of PhoneTel's Disclosure Letter sets forth a
list of each PhoneTel Option and PhoneTel Warrant to issue shares of PhoneTel
Common Stock outstanding on the date hereof, together with each such option or
warrant's term, exercise price, the number of shares subject thereto and, as
applicable, the name of the PhoneTel Stock Option Plan under which such PhoneTel
Option or PhoneTel Warrant was granted.
Section 4.04 Subsidiaries. Section 4.04 of the PhoneTel Disclosure
Letter lists all direct and indirect subsidiaries of PhoneTel (each, a "PhoneTel
Subsidiary" and, collectively, the "PhoneTel Subsidiaries"). Except for the
PhoneTel Subsidiaries and as listed in Section 4.04 of the PhoneTel Disclosure
Letter, PhoneTel does not directly or indirectly own any interest in any other
corporation, partnership, joint venture or other business association or entity.
Each PhoneTel Subsidiary is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation and has
all requisite corporate power and authority to own, operate and lease its
properties and assets and to carry on its business as it is now being conducted.
Except as set forth in Section 4.04 of the PhoneTel Disclosure Letter, each
PhoneTel Subsidiary is duly qualified to do business and is in good standing in
each jurisdiction in which the character of its properties owned or held under
lease or the nature of its activities makes such qualification necessary, except
where the failure to be so qualified or to be in good standing would not,
individually or in the aggregate, be reasonably expected to have a PhoneTel
Material Adverse Effect. Except as set forth in Section 4.04 of the PhoneTel
Disclosure Letter, all outstanding shares of capital stock of each PhoneTel
Subsidiary are validly issued, fully paid and nonassessable and are owned by
PhoneTel or another PhoneTel Subsidiary free and clear of any liens, claims or
encumbrances.
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Section 4.05 Consents and Approvals; No Violation. Except as set
forth in Section 4.05 of the PhoneTel Disclosure Letter and except for (a)
applicable requirements of the Securities Exchange Act of 1934, as amended, and
the rules and regulations thereunder (the "Exchange Act"), including the filing
with and clearing by the SEC of a joint proxy statement relating to the PhoneTel
Stockholders Meeting and the Davel Stockholders Meeting, as amended or
supplemented from time to time (the "Proxy Statement"), (b) the filing of the
PhoneTel Certificate of Merger as required by Ohio Law, (c) such filings and
consents as may be required under any environmental law pertaining to any
notification, disclosure or required approval triggered by the Transactions, (d)
filings with the SEC with respect to the deregistration of the shares of
PhoneTel Common Stock and (e) such consents, approvals, orders, authorizations,
notifications, registrations, declarations and filings as may be required by
state public utility or public service commissions or under the corporation,
takeover or blue sky laws of various states, no filing with or prior notice to,
and no permit, authorization, consent or approval of, any Federal, state, local,
foreign or other governmental department, commission, board, bureau, agency or
instrumentality (each, a "Governmental Entity") is necessary for the
consummation by PhoneTel of the Transactions. Neither the execution and delivery
of this Agreement by PhoneTel nor the consummation by PhoneTel of the
Transactions, nor compliance by PhoneTel with any of the provisions hereof, will
(i) conflict with or result in any violation of any provision of the articles of
incorporation or bylaws, or comparable organizational documents, of PhoneTel or
any PhoneTel Subsidiary, (ii) except as set forth in Section 4.05 of the
PhoneTel Disclosure Letter, result in a violation or breach of, or constitute
(with or without due notice or lapse of time or both) a default (or give rise to
any right of termination, cancellation or acceleration) under, any note, bond,
mortgage, indenture, license, agreement or other instrument or obligation to
which PhoneTel or any PhoneTel Subsidiary is a party or by which any of them or
any of their properties or assets may be bound, or, (iii) subject to the
governmental filings and other matters referred to above in this Section 4.05,
violate any Federal, state, local or foreign order, writ, injunction, decree,
statute, rule or regulation applicable to PhoneTel, any PhoneTel Subsidiary or
any of their properties or assets, excluding from the foregoing clauses (ii) and
(iii) violations, breaches or defaults which, either individually or in the
aggregate, would not reasonably be expected to have a PhoneTel Material Adverse
Effect or impair materially PhoneTel's ability to perform its obligations
hereunder or prevent or materially delay the consummation of the Transactions.
The Ohio Control Share Acquisition Act (Section 1701.831et seq. of the Ohio Law)
does not apply to the execution and delivery of this Agreement or the
consummation of the Transactions.
Section 4.06 SEC Reports and Financial Statements.
(a) Since November 17, 1999, PhoneTel has filed all required forms,
reports and documents with the SEC required to be filed by it pursuant to the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder (the "Securities Act") and the Exchange Act (hereinafter collectively
--------------
referred to as the "PhoneTel Reports"), all of which have complied in all
----------------
material respects with all applicable requirements of the Securities Act and the
Exchange Act.
(b) None of the PhoneTel Reports, including, without limitation, any
financial statements or schedules included therein, at the time filed, contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order
-16-
to make the statements therein, in light of the circumstances under which they
were made, not misleading.
(c) The consolidated balance sheets and the related consolidated
statements of operations, stockholders' equity and changes in financial position
(including, without limitation, the related notes thereto) of PhoneTel and the
PhoneTel Subsidiaries included in the financial statements contained in
PhoneTel's Annual Report on Form 10-K for the year ended December 31, 2000 (the
"PhoneTel 10-K") and in PhoneTel's Quarterly Report on Form 10-Q for the quarter
-------------
ended September 30, 2001 present fairly the consolidated financial position of
PhoneTel and the PhoneTel Subsidiaries as of their respective dates, and the
results of consolidated operations and changes in consolidated financial
position for the periods then ended, all in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis, except as
----
otherwise noted therein, and subject in the case of unaudited interim financial
statements to normal year-end audit adjustments and the absence of footnotes.
Section 4.07 Absence of Undisclosed Liabilities. Neither PhoneTel nor
any PhoneTel Subsidiary has any liabilities (whether absolute, accrued or
contingent), except: (a) liabilities, obligations or contingencies that are
accrued and reserved against in the consolidated balance sheet of PhoneTel and
the PhoneTel Subsidiaries as of December 31, 2000 or reflected in the notes
thereto, (b) liabilities incurred since December 31, 2000 in the ordinary course
of business, (c) liabilities disclosed in Section 4.07 of the PhoneTel
Disclosure Letter, (d) any liabilities which, individually or in the aggregate,
have not had, and would not reasonably be expected to have, a PhoneTel Material
Adverse Effect or (e) liabilities relating to or arising from the Servicing
Agreement or PhoneTel's performance thereof.
Section 4.08 Changes. Since the date of the PhoneTel 10-K, and except
as set forth in the PhoneTel Reports filed prior to the date of this Agreement
(as amended to the date hereof, the "Filed PhoneTel Reports"), and except as
otherwise disclosed in Section 4.08 of the PhoneTel Disclosure Letter or as
otherwise provided by this Agreement:
(a) there has been no PhoneTel Material Adverse Effect;
(b) except as expressly permitted or otherwise contemplated by this
Agreement, there has been no direct or indirect redemption, purchase or other
acquisition of any shares of PhoneTel's capital stock, or any declaration,
setting aside or payment of any dividend or other distribution by PhoneTel in
respect of PhoneTel's capital stock, or any issuance of any shares of capital
stock of PhoneTel (other than pursuant to the exercise of options and warrants
pursuant to their terms), or any granting to any person of any option to
purchase or other right to acquire shares of capital stock of PhoneTel or any
stock split or other change in PhoneTel's capitalization, or any repricing or
other modification to the terms of any such option or right to acquire;
(c) neither PhoneTel nor any PhoneTel Subsidiary has entered into or
agreed to enter into any new or amended contract with any labor unions
representing employees of PhoneTel or any PhoneTel Subsidiary;
-17-
(d) neither PhoneTel nor any PhoneTel Subsidiary has entered
into or agreed to enter into any new or amended contract with any of the
officers thereof or otherwise increased the compensation payable to the officers
or directors of any such entity;
(e) neither PhoneTel nor any PhoneTel Subsidiary has (i) entered
into or amended any bonus, incentive compensation, deferred compensation, profit
sharing, retirement, pension, group insurance or other benefit plan except as
required by law or regulation or (ii) made any contribution to any such plan
except for contributions specifically required by law or pursuant to the terms
of such plans; and
(f) neither PhoneTel nor any PhoneTel Subsidiary has made any
change in accounting methods, principles or practices materially and adversely
affecting its assets, liabilities or business.
Section 4.09 Investigations; Litigation.
(a) Except as described in Section 4.09(a) of the PhoneTel
Disclosure Letter, there are no pending or, to the knowledge of PhoneTel,
threatened investigations, reviews or inquiries by any Governmental Entity with
respect to PhoneTel or any PhoneTel Subsidiary or with respect to the activities
of any officer, director or, to the knowledge of PhoneTel, employee of PhoneTel
(an "Investigation"), other than Investigations which, if the resolution thereof
-------------
were adverse, would not, individually or in the aggregate, reasonably be
expected to have a PhoneTel Material Adverse Effect. For the purpose of this
Agreement, "knowledge of PhoneTel" shall be deemed to mean the actual knowledge,
---------------------
after reasonable inquiry, of Xxxx X. Xxxxxxxxxx or Xxxxxxx X. Xxxxxx.
(b) Except as described in Section 4.09(b) of the PhoneTel
Disclosure Letter, (i) there are no actions or proceedings pending or, to the
knowledge of PhoneTel, threatened against PhoneTel or any PhoneTel Subsidiary
before any court or before any administrative agency or administrative officer
or executive, whether Federal, state, local or foreign, which seek to enjoin the
PhoneTel Merger or which, if adversely determined, would, individually or in the
aggregate, reasonably be expected to have a PhoneTel Material Adverse Effect,
(ii) there are no outstanding domestic or foreign judgments, decrees or orders
against PhoneTel or any PhoneTel Subsidiary that, individually or in the
aggregate, would reasonably be expected to have a PhoneTel Material Adverse
Effect, (iii) neither PhoneTel nor any PhoneTel Subsidiary is in violation of,
and none of them has received any claim or notice that it is in violation of,
any Federal, state, local or foreign laws, statutes, rules, regulations or
orders promulgated or judgments entered by any Governmental Entity, which
violations, individually or in the aggregate, would reasonably be expected to
have a PhoneTel Material Adverse Effect; and (iv) there are no actions pending
or, to the knowledge of PhoneTel, threatened against the directors or any
director of PhoneTel alleging a breach of such directors' or director's
fiduciary duties (except such actions which may arise as a result of the
Transactions).
Section 4.10 Contracts and Commitments.
(a) Except as are attached as exhibits to any Filed PhoneTel
Report or as set forth in Section 4.10 of the PhoneTel Disclosure Letter,
PhoneTel is not, nor is any PhoneTel
-18-
Subsidiary, with respect to its business, a party to any contracts or agreements
(other than site location agreements between PhoneTel or a PhoneTel Subsidiary
(the "PhoneTel Site Location Agreements") and location providers (the "Location
--------------------------------- --------
Owners")) that are material to the business, properties, assets or financial
------
condition of PhoneTel and the PhoneTel Subsidiaries, either individually or
taken as a whole (together with all amendments, exhibits, attachments, waivers
or other changes thereto, the "PhoneTel Contracts").
------------------
(b) PhoneTel has supplied or made available to Davel valid
copies of all PhoneTel Contracts and PhoneTel Site Location Agreements.
(c) Since January 1, 2001, except as set forth in Section 4.10
of the PhoneTel Disclosure Letter, PhoneTel has not altered its payment
practices with regard to amounts payable to local exchange carriers in respect
of payphone services or with regard to amounts payable to Location Owners in
respect of commissions, which alteration would result in a material breach of
the contractual duties of PhoneTel to such local exchange carriers in the
aggregate or to such Location Owners in the aggregate.
Section 4.11 Environmental Matters. Except as described in the Filed PhoneTel
Reports, (a) PhoneTel and each of the PhoneTel Subsidiaries are in compliance
with all applicable Federal, state, local and foreign laws and regulations and
all judicial and administrative orders and determinations relating to pollution
or protection of the environment or of human health (including, without
limitation, ambient air, surface water, ground water, land surface or subsurface
strata) (collectively, "Environmental Laws"), except for non-compliance that
would not, individually or in the aggregate, reasonably be expected to have a
PhoneTel Material Adverse Effect, which compliance includes, but is not limited
to, the possession by PhoneTel and each of the PhoneTel Subsidiaries of permits
and other governmental authorizations required under applicable Environmental
Laws, and compliance with the terms and conditions thereof; (b) neither PhoneTel
nor any of the PhoneTel Subsidiaries has received written notice of, or, to the
knowledge of PhoneTel, is the subject of, any actions, causes of action, claims,
investigations, demands or notices by any person alleging liability under or
non-compliance with any Environmental Law that would, individually or in the
aggregate, reasonably be expected to have a PhoneTel Material Adverse Effect;
and (c) there has not been by PhoneTel or any of the PhoneTel Subsidiaries any
treatment, storage, disposal or release of any hazardous or toxic material,
substance or waste or of petroleum, or any fractions or by-products thereof, at
any of their current or, to the knowledge of PhoneTel, former properties or
facilities or any current or, to the knowledge of PhoneTel, former offsite
properties and facilities used in the business of PhoneTel or the PhoneTel
Subsidiaries (in each case, other than properties or facilities where payphones
are located pursuant to PhoneTel Site Location Agreements) in a manner or at
levels that require or is reasonably likely to require investigation, removal or
remediation under Environmental Laws that would, either individually or in the
aggregate, reasonably be expected to have a PhoneTel Material Adverse Effect.
Section 4.12 Taxes. Each of PhoneTel and the PhoneTel Subsidiaries has filed
all tax returns and reports required to be filed by it and all such returns and
reports are complete and correct in all materials respects, or requests for
extensions to file such returns or reports have been timely filed, granted and
have not expired, except to the extent that such failures to file, to be
complete or
-19-
correct or to have extensions granted that remain in effect individually or in
the aggregate would not reasonably be expected to have a PhoneTel Material
Adverse Effect. Each of PhoneTel and the PhoneTel Subsidiaries has timely paid
(or PhoneTel has paid on its behalf) all taxes that have become due and payable,
except to the extent the failure to pay such taxes individually or in the
aggregate would not reasonably be expected to have a PhoneTel Material Adverse
Effect, and the most recent financial statements contained in the PhoneTel
Reports reflect an adequate provision in accordance with GAAP for all taxes
payable by PhoneTel and the PhoneTel Subsidiaries for all taxable periods and
portions thereof accrued through the date of such financial statements. No
taxing authority has given written notice of any proposal, assertion or
assessment of any tax deficiencies against PhoneTel or any of the PhoneTel
Subsidiaries that are not adequately reserved for, except for deficiencies that
individually or in the aggregate would not reasonably be expected to have a
PhoneTel Material Adverse Effect. There is no action, suit, taxing authority
proceeding or audit now in progress, pending, or, to the knowledge of PhoneTel,
threatened against or with respect to PhoneTel or any of the PhoneTel
Subsidiaries.
Section 4.13 Employment Agreements. Except as disclosed in Section 4.13 of the
PhoneTel Disclosure Letter, there are no employment, consulting, severance or
indemnification contracts or agreements between PhoneTel or any PhoneTel
Subsidiary, on the one hand, and any directors, officers or other employees of
PhoneTel or any PhoneTel Subsidiary, on the other hand. PhoneTel is not a party
to any collective bargaining agreement.
Section 4.14 Change of Control Provisions. Except as disclosed in Section 4.14
of the PhoneTel Disclosure Letter, none of the contracts or agreements set forth
in Section 4.13 of the PhoneTel Disclosure Letter and none of PhoneTel's or any
PhoneTel Subsidiary's employee benefit plans, programs or arrangements contains
any provision that would become operative as the result of a change of control
of PhoneTel or that would become operative as a result of the PhoneTel Merger or
the Transactions.
Section 4.15 Employee Benefit Plans.
(a) Except as set forth in Section 4.15(a) of the PhoneTel
Disclosure Letter, all of the (i) Plans and (ii) other bonus, insurance,
pension, profit sharing, retirement, health, and other benefit plans, stock
option plans and stock purchase or ownership plans currently maintained by
PhoneTel or any of the PhoneTel Subsidiaries or to which PhoneTel or any of the
PhoneTel Subsidiaries is a party may be terminated by the Surviving Corporation
following the PhoneTel Effective Time without financial penalty or premium and
there shall be no obligation of the Surviving Corporation or Davel following the
PhoneTel Effective Time to issue any shares of their respective capital stock
pursuant to any of the foregoing or otherwise following the PhoneTel Effective
Time. Except as set forth in Section 4.15(a) of the PhoneTel Disclosure Letter,
no payment by PhoneTel or any of the PhoneTel Subsidiaries to any person
(payable or distributable pursuant to the foregoing agreements and plans or this
Agreement) shall be nondeductible by PhoneTel or any of the PhoneTel
Subsidiaries for Federal income tax purposes because of Section 280G of the
Code.
(b) Since December 31, 2000, all employee benefit plans within
the meaning of Section 3(3) of the Employment Retirement Income Security Act of
1974, as amended
-20-
("ERISA"), maintained by PhoneTel or any of the PhoneTel Subsidiaries
-----
(collectively, the "Plans") are in material compliance with, and have been
-----
administered and operated in accordance with, the terms of such Plans and
applicable law, and the Internal Revenue Service has determined that each such
Plan which is intended to be "qualified" within the meaning of Section 401(a) of
the Code is so qualified and that each related trust is exempt from tax under
Section 501(a) of the Code. No event which constitutes a "reportable event" as
defined in Section 4043 of ERISA has occurred and is continuing with respect to
any Plan subject to Title IV of ERISA. No material liability under any statutes,
orders, governmental rules or regulations applicable to any Plan, including,
without limitation, ERISA and the Code, has been or may reasonably be expected
to be incurred with respect to any Plan (other than liabilities for the payment
of contributions and benefits in the ordinary course). No Plan has been
terminated pursuant to Title IV of ERISA. No event has occurred and no condition
exists with respect to any Plan which presents a risk of termination or partial
termination of any Plan which could reasonably be anticipated to result in
liability on the part of PhoneTel or any of the PhoneTel Subsidiaries. Full
payment has been made, or provision has been made therefor, of all amounts which
PhoneTel or any of the PhoneTel Subsidiaries were required under the terms of
the Plans to have paid as contributions to such Plans on or prior to the date
hereof and no Plan which is subject to Part 3 of Subtitle B of Title I of ERISA
has incurred any "accumulated funding deficiency" (within the meaning of Section
302 of ERISA or Section 412 of the Code), whether or not waived. Neither
PhoneTel nor any of the PhoneTel Subsidiaries nor, to the knowledge of PhoneTel,
any other "disqualified person" or "party in interest" (as defined in Section
4975 of the Code and Section 3(14) of ERISA, respectively) has engaged in any
nonexempt prohibited transactions in connection with any Plan (or its related
trust) with respect to which PhoneTel, any of the PhoneTel Subsidiaries, or any
officer, director, employee of PhoneTel or any of the PhoneTel Subsidiaries or,
to the knowledge of PhoneTel, any trustee, administrator or other fiduciary of
any Plan, would be subject to either a penalty pursuant to Section 502(i) of
ERISA or a material tax imposed by Section 4975 of the Code nor, to the
knowledge of PhoneTel, shall the consummation of the Transactions constitute
such a transaction. Except as disclosed in Section 4.15(b) of the PhoneTel
Disclosure Letter, no claim, action or litigation, has been made, commenced or,
to the knowledge of PhoneTel, threatened with respect to any Plan (other than
claims for benefits made in the ordinary course). No Plan or related trust owns
any securities in violation of Section 407 of ERISA. No withdrawal by PhoneTel
or any of the PhoneTel Subsidiaries, partial or complete, within the meaning of
Title IV of ERISA, has occurred or may be reasonably expected to occur with
respect to any Plan which is a multiemployer plan which would create a material
liability not adequately reserved against by PhoneTel. With respect to each
employee pension benefit plan (as defined in Section 3(2) of ERISA) which is a
defined benefit plan and is not a multiemployer plan, the assets of such Plan
available to meet the accrued liabilities of such Plan would exceed such
liabilities, based on the actuarial assumptions used for plan termination.
PhoneTel has paid, or has set up an adequate reserve for, all liabilities under
each Plan.
Section 4.16 Licenses. PhoneTel and the PhoneTel Subsidiaries have obtained
all permits, concessions, grants, franchises, licenses and other federal, state,
local or foreign governmental authorizations and approvals (collectively,
"Licenses") material, individually or in the aggregate, to the conduct of the
business of PhoneTel and the PhoneTel Subsidiaries taken as a whole. All such
Licenses are in full force and effect and, to the knowledge of PhoneTel, will
not be impaired or adversely affected by the Transactions in a manner or to a
degree that would reasonably be expected
-21-
to have a PhoneTel Material Adverse Effect. There is not pending or, to the
knowledge of PhoneTel, threatened any domestic or foreign suit or proceeding
with respect to the suspension, revocation, cancellation, modification or non-
renewal of any of such Licenses, and, except as set forth in Section 4.16 of the
PhoneTel Disclosure Letter, no event under the control of PhoneTel has occurred
that (whether with notice or lapse of time, or both) would reasonably be
expected to result in a suspension or revocation of or failure to renew any of
such Licenses, the loss of which would reasonably be expected to have a PhoneTel
Material Adverse Effect.
Section 4.17 Real Estate Leases. Section 4.17 of the PhoneTel Disclosure
Letter sets forth a list of (a) all leases and subleases under which PhoneTel
and the PhoneTel Subsidiaries is lessor or lessee of any real property, together
with all amendments, supplements, nondisturbance agreements and other agreements
pertaining thereto, (b) all options held by PhoneTel and the PhoneTel
Subsidiaries or contractual obligations on the part of PhoneTel and the PhoneTel
Subsidiaries to purchase or acquire any interest in real property and (c) all
options granted by PhoneTel and the PhoneTel Subsidiaries or contractual
obligations on the part of PhoneTel and the PhoneTel Subsidiaries to sell or
dispose of any interest in real property, in each case, other than PhoneTel Site
Location Agreements between PhoneTel or any of the PhoneTel Subsidiaries and
Location Owners.
Section 4.18 Intellectual Property. All of the patents, registered trademarks,
registered service marks, registered copyrights, applications for any of the
foregoing and unregistered trademarks, service marks, copyrights, trade names
and corporate names material to the conduct of the business of PhoneTel and the
PhoneTel Subsidiaries (collectively, "Intellectual Property") are set forth in
Section 4.18 of the PhoneTel Disclosure Letter. To the knowledge of PhoneTel and
except as set forth in Section 4.18 of the PhoneTel Disclosure Letter, (i)
PhoneTel or one of the PhoneTel Subsidiaries owns and possesses all right, title
and interest in and to, or possesses the valid right to use, the Intellectual
Property; (ii) neither PhoneTel nor any PhoneTel Subsidiary has received any
notice of any potential claim of any, infringement of or misappropriation from
any third party with respect to any material item of Intellectual Property;
(iii) each item of Intellectual Property is valid and enforceable; and (iv)
neither PhoneTel nor any of the PhoneTel Subsidiaries is currently infringing
and, except as set forth in Section 4.18 of the PhoneTel Disclosure Letter, has
not infringed any intellectual property of any other person. To the knowledge of
PhoneTel, the PhoneTel Merger and the Transactions will not impair any item of
Intellectual Property.
Section 4.19 Compliance with Other Instruments and Laws. Except as set forth
in Section 4.19 of the PhoneTel Disclosure Letter, neither PhoneTel nor any
PhoneTel Subsidiary is in violation of any term of its articles of incorporation
or code of regulations or comparable organizational documents, or in violation
of any PhoneTel Contract or of any judgment, decree or order which names
PhoneTel or any PhoneTel Subsidiary or in violation of any term of any other
material instrument, contract or agreement (other than any PhoneTel Site
Location Agreement) to which it is a party or by which it or any of its
properties or assets is bound, except to the extent that any such violation
would not reasonably be expected to have a PhoneTel Material Adverse Effect.
Except as set forth in Section 4.19 of the PhoneTel Disclosure Letter,
PhoneTel's and each PhoneTel Subsidiary's businesses are in compliance with all
Federal, state, local and foreign statutes, laws, ordinances, rules,
governmental regulations, permits, concessions, grants, franchises, licenses or
other governmental authorizations or approvals applicable to the operation of
such business, except to the extent that the
-22-
failure to be in compliance would not reasonably be expected to have a PhoneTel
Material Adverse Effect.
Section 4.20 Employees. Without limiting the generality of Section 4.19
hereof, PhoneTel has complied in all material respects with all laws relating to
the employment of labor, including provisions thereof relating to wages, hours,
equal opportunity, collective bargaining, civil rights, workers compensation,
WARN statutes, severance, termination, record keeping, labor relations and
family and/or medical leave and, to the knowledge of PhoneTel, it does not have
any material labor relations problems (including, without limitation, actual or
threatened strikes or work stoppages or material grievances).
Section 4.21 Information Supplied. None of the information supplied or to be
supplied by PhoneTel for inclusion or incorporation by reference in (i) the
registration statement on Form S-4 to be filed with the SEC by Davel in
connection with the issuance of Davel Common Stock in the Transactions (the
"Form S-4") shall, at the time the Form S-4 is filed with the SEC or at the time
it becomes effective under the Securities Act, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading or (ii) the Proxy Statement shall, at the
date it is first mailed to PhoneTel's stockholders or at the time of the
PhoneTel Stockholders Meeting, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The Proxy Statement shall comply as to form in
all material respects with the requirements of the Exchange Act, except that no
representation or warranty is made by PhoneTel with respect to statements made
or incorporated by reference therein based on information supplied by Davel for
inclusion or incorporation by reference in the Proxy Statement.
Section 4.22 Certain Fees. Except in connection with the engagement of
Ladenburg Xxxxxxxx & Co. Inc. and as otherwise set forth in Section 4.22 of the
PhoneTel Disclosure Letter, neither PhoneTel nor any PhoneTel Subsidiary has
employed any broker or finder or incurred any liability for any financial
advisory, brokerage or finders' fees or commissions in connection with the
Transactions. The fees payable by PhoneTel to Ladenburg Xxxxxxxx & Co. Inc. in
connection with the Transactions are set forth in Section 4.22 of the PhoneTel
Disclosure Letter.
Section 4.23 Opinion of Financial Advisor. PhoneTel has received the opinion
of Ladenburg Xxxxxxxx & Co. Inc., dated the date hereof, attached hereto as
Exhibit E.
Section 4.24 Voting Requirements. Except as contemplated by Article I hereof,
PhoneTel Stockholder Approval is the only vote of the holders of any class or
series of PhoneTel's capital stock necessary to adopt this Agreement and the
PhoneTel Merger.
Section 4.25 State Takeover Statutes. The Board of Directors of PhoneTel has
approved this Agreement and the consummation of the PhoneTel Merger and the
Transactions, and such approval constitutes approval of the PhoneTel Merger by
the Board of Directors of PhoneTel under the provisions of Section 1704 of Ohio
Law such that Section 1704 of Ohio Law does not apply to the
-23-
Transactions. To the knowledge of PhoneTel, no "fair price," "moratorium,"
"control share acquisition" or other similar anti-takeover statute or regulation
enacted under state or Federal law applicable to PhoneTel is applicable to the
Transactions.
Section 4.26 Payphones. As of January 18, 2002, PhoneTel has good and
marketable title to at least 29,987 installed payphones, all of which, except
for those specifically described in Section 4.26 of the PhoneTel Disclosure
Letter, are operational and which, except for those payphones further
specifically described in Section 4.26 of the PhoneTel Disclosure Letter, are
subject to enforceable PhoneTel Site Location Agreements. PhoneTel's good faith
estimate of the average remaining term of the PhoneTel Site Location Agreements
is 46 months.
Section 4.27 Average Net Revenue. The Average Net Revenue is at least
$23.77 per payphone in operation by PhoneTel and the PhoneTel Subsidiaries as of
the date hereof. For purposes of this Agreement, "Average Net Revenue" for such
payphones shall mean the average of the monthly gross revenues (excluding dial-
around compensation) minus telephone bills (including accrued sales tax but
excluding operator service provider fees) and commissions for the 3 months prior
to November 30, 2001.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF XXXXX
Xxxxx represents and warrants to PhoneTel that:
Section 5.01 Corporate Organization. Each of Davel and P Sub is a corporation
duly organized, validly existing and in good standing under the laws of the
state of its incorporation, with all requisite corporate power and authority to
own, operate and lease its properties and assets and to carry on its businesses
as now being conducted. Except as set forth in Section 5.01 of the disclosure
letter delivered by Davel to PhoneTel concurrently with the execution of this
Agreement (the "Davel Disclosure Letter"), Davel and P Sub are duly qualified to
do business and are in good standing in each jurisdiction in which the character
of their properties owned or held under lease or the nature of their activities
makes such qualification necessary except where the failure to be so qualified
or to be in good standing would not, individually or in the aggregate, have a
Davel Material Adverse Effect. As used herein, "Davel Material Adverse Effect"
shall mean a material adverse effect on the ability of Davel to consummate the
Transactions or, as a result of any event, change, circumstance or effect
arising from or having an impact on Davel's business, assets, financial
condition or results of operations, a material adverse effect on the ability of
PhoneTel and its stockholders to realize substantially all of the benefits of
the Transactions.
Section 5.02 Authorization. Each of Davel and P Sub has the necessary
corporate power and authority to enter into this Agreement and, subject to
approval of the Transactions, including, but not limited to, the Davel
Restructuring, the Mergers and this Agreement (and the transactions and
amendments, if any, to its charter documents contemplated hereby) by the
affirmative vote of the holders of a majority of the outstanding shares of Davel
Common Stock on the applicable record date
-24-
at the Davel Stockholders Meeting("Davel Stockholder Approval"), to carry out
its obligations hereunder. The execution and delivery of this Agreement by Davel
and P Sub, the performance by Davel and P Sub of their respective obligations
hereunder and the consummation by Davel and P Sub of the Transactions have been
duly and validly authorized by the respective Boards of Directors of Davel and P
Sub, have been approved by the Boards of Directors of Davel and P Sub as
otherwise required by their respective articles of incorporation or comparable
organizational documents, and have been approved by Davel as the sole
stockholder of P Sub. Except for Davel Stockholder Approval, no other corporate
proceeding on the part of Davel or P Sub is necessary for the execution and
delivery of this Agreement by Davel and P Sub, the performance of their
obligations hereunder and the consummation by Davel and P Sub of the
Transactions. This Agreement has been duly and validly executed and delivered by
Davel and P Sub and is a legal, valid and binding obligation of Davel and P Sub,
enforceable against each of them in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, moratorium,
reorganization or other laws affecting creditors' rights generally or by the
availability of equitable remedies generally.
Section 5.03 Capital Stock. The authorized capital stock of Davel consists of:
(a) 50,000,000 shares of Davel Common Stock, of which 11,169,440 shares were
issued and outstanding and no shares were held in Davel's treasury and (b)
1,000,000 shares of preferred stock, par value $.01 per share, of which no
shares are issued and outstanding. All of the outstanding shares of capital
stock of Davel have been validly issued and are fully paid, nonassessable and
free of preemptive rights with no personal liability attaching to the ownership
thereof. Except for options to acquire not more than 681,067 shares of Davel
Common Stock (the "Davel Options") and warrants to acquire not more than 427,323
shares of Davel Common Stock (the "Davel Warrants"), there are no outstanding
subscriptions, options, warrants, rights, contracts or other arrangements or
commitments obligating Davel to issue any shares of its capital stock or any
securities convertible into or exchangeable for shares of its capital stock.
Section 5.03 of Davel's Disclosure Letter sets forth a list of each Davel Option
and Davel Warrant to issue shares of Davel Common Stock outstanding on the date
hereof, together with each such Davel Option or Davel Warrant's term, exercise
price, and the number of shares subject thereto, and as applicable, the name of
the Davel Stock Option Plan under which such Davel Option or Davel Warrant was
granted.
Section 5.04 Subsidiaries. Section 5.04 of the Davel Disclosure Letter lists
all direct and indirect subsidiaries of Davel (each, a "Davel Subsidiary"and,
collectively, the "Davel Subsidiaries"). Except for the Davel Subsidiaries and
as listed in Section 5.04 of the Davel Disclosure Letter, Davel does not
directly or indirectly own any interest in any other corporation, partnership,
joint venture or other business association or entity. Each Davel Subsidiary is
a corporation (or, in the case of Davel Financing, a limited liability company)
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has all requisite corporate or company
power and authority to own, operate and lease its properties and assets and to
carry on its business as it is now being conducted. Except as set forth in
Section 5.04 of the Davel Disclosure Letter, each Davel Subsidiary is duly
qualified to do business and is in good standing in each jurisdiction in which
the character of its properties owned or held under lease or the nature of its
activities makes such qualification necessary, except where the failure to be so
qualified or to be in good standing would not, individually or in the aggregate,
be reasonably expected to have a Davel Material Adverse Effect. Except as set
forth in Section 5.04 of the Davel Disclosure Letter, all outstanding shares of
capital
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stock of each Davel Subsidiary are validly issued, fully paid and nonassessable
and are owned by Davel or another Davel Subsidiary free and clear of any liens,
claims or encumbrances.
Section 5.05 Consents and Approvals; No Violations. Except for (a) applicable
requirements of the Securities Act and the Exchange Act, including the filing
with and clearing by the SEC of the Form S-4, (b) the filing of the Davel
Financing Certificate of Merger as required by the Delaware Law and Delaware LLC
Act, (c) the filing of the PhoneTel Certificate of Merger as required by Ohio
Law, (d) such filings and consents as may be required under any environmental
law pertaining to any notification, disclosure or required approval triggered by
the Transactions, and (e) such consents, approvals, orders, authorizations,
notifications, registrations, declarations and filings as may be required by
state public utility or public service commissions or under the corporation,
takeover or blue sky laws of various states, no filing with or prior notice to,
and no permit, authorization, consent or approval of any Governmental Entity is
necessary for the consummation by Davel or P Sub of the Transactions. Except as
set forth in Section 5.05 of the Davel Disclosure Letter, neither the execution
and delivery of this Agreement by Davel or P Sub, nor the consummation by Davel
or P Sub of the Transactions nor compliance by Davel or P Sub with any of the
provisions hereof, will (i) conflict with or result in any violation of any
provision of the articles of incorporation or bylaws, or comparable
organizational documents, of Davel or any Davel Subsidiary, (ii) at the Davel
Effective Time, result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation or acceleration) under, any note, bond,
mortgage indenture, license, agreement or other instrument or obligation to
which Davel or any Davel Subsidiary is a party or by which any of them or any of
their respective properties or assets may be bound, or (iii) subject to the
governmental filings and other matters referred to above in this Section 5.05,
violate any Federal, state, local or foreign order, writ, injunction, decree,
statute, rule or regulation applicable to Davel or any Davel Subsidiary or any
of their properties or assets, excluding from the foregoing clauses (ii) and
(iii) violations, breaches or defaults which would not, individually or in the
aggregate, be reasonably expected to have a Davel Material Adverse Effect.
Section 5.06 SEC Reports and Financial Statements.
(a) Since December 31, 1999, Davel has filed all required forms,
reports and documents with the SEC required to be filed by it pursuant to the
Securities Act and the Exchange Act (hereinafter collectively referred to as the
"Davel Reports"), all of which have complied in all material respects with all
-------------
applicable requirements of the Securities Act and the Exchange Act.
(b) None of the Davel Reports, including, without limitation,
any financial statements or schedules included therein, at the time filed,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(c) The consolidated balance sheets and the related consolidated
statements of operations, stockholders' equity and changes in financial position
(including, without limitation, the related notes thereto) of Davel and the
Davel Subsidiaries included in the financial statements
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contained in Davel's Annual Report on Form 10-K for the year ended December 31,
2000 (the "Davel 10-K") and in Davel's Quarterly Report on Form 10-Q for the
----------
quarter ended September 30, 2001 present fairly the consolidated financial
position of Davel and the Davel Subsidiaries as of their respective dates, and
the results of consolidated operations and changes in consolidated financial
position for the periods then ended, all in conformity with GAAP applied on a
consistent basis, except as otherwise noted therein, and subject in the case of
unaudited interim financial statements to normal year-end audit adjustments and
the absence of footnotes.
Section 5.07 Absence of Undisclosed Liabilities. Neither Davel nor any Davel
Subsidiary has any liabilities (whether absolute, accrued or contingent),
except: (a) liabilities, obligations or contingencies that are accrued and
reserved against in the consolidated balance sheet of Davel and the Davel
Subsidiaries as of December 31, 2000 or reflected in the notes thereto, (b)
liabilities incurred since December 31, 2000 in the ordinary course of business,
(c) liabilities disclosed in Section 5.07 of the Davel Disclosure Letter, (d)
any liabilities which, individually or in the aggregate, have not had, and would
not reasonably be expected to have, a Davel Material Adverse Effect or (e)
liabilities relating to or arising from the Servicing Agreement or Davel's
performance thereof.
Section 5.08 Changes. Since the date of the Davel 10-K, and except as set
forth in the Davel Reports filed prior to the date of this Agreement (as amended
to the date hereof, the "Filed Davel Reports"), and except as otherwise
disclosed in Section 5.08 of the Davel Disclosure Letter or as otherwise
provided by this Agreement:
(a) there has been no Davel Material Adverse Effect;
(b) except as expressly permitted or otherwise contemplated by
this Agreement, there has been no direct or indirect redemption, purchase or
other acquisition of any shares of Davel's capital stock, or any declaration,
setting aside or payment of any dividend or other distribution by Davel in
respect of Davel's capital stock, or any issuance of any shares of capital stock
of Davel, or any granting to any person of any option to purchase or other right
to acquire shares of capital stock of Davel or any stock split or other change
in Davel's capitalization, or any repricing or other modification to the terms
of any such option or right to acquire;
(c) neither Davel nor any Davel Subsidiary has entered into or
agreed to enter into any new or amended contract with any labor unions
representing employees of Davel or any Davel Subsidiary;
(d) neither Davel nor any Davel Subsidiary has entered into or
agreed to enter into any new or amended contract with any of the officers
thereof or otherwise increased the compensation payable to the officers or
directors of any such entity;
(e) neither Davel nor any Davel Subsidiary has (i) entered into
or amended any bonus, incentive compensation, deferred compensation, profit
sharing, retirement, pension, group insurance or other benefit plan except as
required by law or regulation or (ii) made any contribution to any such plan
except for contributions specifically required by law or pursuant to the terms
of such plans; and
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(f) neither Davel nor any Davel Subsidiary has made any change
in accounting methods, principles or practices materially and adversely
affecting its assets, liabilities or business.
Section 5.09 Investigations; Litigation.
(a) Except as described in Section 5.09(a) of the Davel
Disclosure Letter, there are no pending or, to the knowledge of Davel,
threatened investigations, reviews or inquiries by any Governmental Entity with
respect to Davel or any Davel Subsidiary or with respect to the activities of
any officer, director or, to the knowledge of Davel, employee of Davel (a "Davel
-----
Investigation"), other than Davel Investigations which, if the resolution
-------------
thereof were adverse, would not, individually or in the aggregate, reasonably be
expected to have a Davel Material Adverse Effect. For the purpose of this
Agreement, "knowledge of Davel" shall be deemed to mean the actual knowledge,
------------------
after reasonable inquiry, of Xxxxx X. Xxxxxx or Xxxx X. Xxxxxxxx.
(b) Except as described in Section 5.09(b) of the Davel
Disclosure Letter, (i) there are no actions or proceedings pending or, to the
knowledge of Davel, threatened against Davel or any Davel Subsidiary before any
court or before any administrative agency or administrative officer or
executive, whether Federal, state, local or foreign, which seek to enjoin the
Mergers or which, if adversely determined, would, individually or in the
aggregate, reasonably be expected to have a Davel Material Adverse Effect, (ii)
there are no outstanding domestic or foreign judgments, decrees or orders
against Davel or any Davel Subsidiary that, individually or in the aggregate,
would reasonably be expected to have a Davel Material Adverse Effect, (iii)
neither Davel nor any Davel Subsidiary is in violation of, and none of them has
received any claim or notice that it is in violation of, any federal, state,
local or foreign laws, statutes, rules, regulations or orders promulgated or
judgments entered by any Governmental Entity, which violations, individually or
in the aggregate, would reasonably be expected to have a Davel Material Adverse
Effect; and (iv) there are no actions pending or, to the knowledge of Davel,
threatened against the directors or any director of Davel alleging a breach of
such directors' or director's fiduciary duties (except such actions which may
arise as a result of the Transactions).
Section 5.10 Contracts and Commitments.
(a) Except as are attached as exhibits to any Filed Davel Report
or as set forth in Section 5.10 of the Davel Disclosure Letter, Davel is not,
nor is any Davel Subsidiary, with respect to its business, a party to any
contracts or agreements (other than site location agreements between Davel or a
Davel Subsidiary (the "Davel Site Location Agreements") and Location Owners)
------------------------------
that are individually material to the business, properties, assets or financial
condition of Davel and the Davel Subsidiaries, taken as a whole (together with
all amendments, exhibits, attachments, waivers or other changes thereto, the
"Davel Contracts").
---------------
(b) Davel has supplied or made available to PhoneTel valid
copies of all Davel Contracts and Davel Site Location Agreements.
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(c) Since January 1, 2001, except as set forth in Section
5.10 of the Davel Disclosure Letter, Davel has not altered its payment practices
with regard to amounts payable to local exchange carriers in respect of payphone
services or with regard to amounts payable to Location Owners in respect of
commissions, which alteration would result in a material breach of the
contractual duties of Davel to such local exchange carriers in the aggregate or
to such Location Owners in the aggregate.
Section 5.11 Environmental Matters. Except as described in the Filed
Davel Reports, (a) Davel and each of the Davel Subsidiaries are in compliance
with all applicable Environmental Laws, except for non-compliance that would
not, individually or in the aggregate, reasonably be expected to have a Davel
Material Adverse Effect, which compliance includes, but is not limited to, the
possession by Davel and each of the Davel Subsidiaries of permits and other
governmental authorizations required under applicable Environmental Laws, and
compliance with the terms and conditions thereof; (b) neither Davel nor any of
the Davel Subsidiaries has received written notice of, or, to the knowledge of
Davel, is the subject of, any actions, causes of action, claims, investigations,
demands or notices by any person alleging liability under or non-compliance with
any Environmental Law that would, individually or in the aggregate, reasonably
be expected to have a Davel Material Adverse Effect; and (c) there has not been
by Davel or any of the Davel Subsidiaries any treatment, storage, disposal or
release of any hazardous or toxic material, substance or waste or of petroleum,
or any fractions or by-products thereof, at any of their current or, to the
knowledge of Davel, former properties or facilities or any current or, to the
knowledge of Davel, former offsite properties and facilities used in the
business of Davel or the Davel Subsidiaries (in each case, other than properties
or facilities where payphones are located pursuant to agreements with Location
Owners) in a manner or at levels that require or is reasonably likely to require
investigation, removal or remediation under Environmental Laws that would,
either individually or in the aggregate, reasonably be expected to have a Davel
Material Adverse Effect.
Section 5.12 Taxes.
(a) Each of Davel and the Davel Subsidiaries has filed all
tax returns and reports required to be filed by it and all such returns and
reports are complete and correct in all materials respects, or requests for
extensions to file such returns or reports have been timely filed, granted and
have not expired, except to the extent that such failures to file, to be
complete or correct or to have extensions granted that remain in effect
individually or in the aggregate would not reasonably be expected to have a
Davel Material Adverse Effect. Each of Davel and the Davel Subsidiaries has
timely paid (or Davel has paid on its behalf) all taxes that have become due and
payable, except to the extent the failure to pay such taxes individually or in
the aggregate would not reasonably be expected to have a Davel Material Adverse
Effect, and the most recent financial statements contained in the Davel Reports
reflect an adequate provision in accordance with GAAP for all taxes payable by
Davel and the Davel Subsidiaries for all taxable periods and portions thereof
accrued through the date of such financial statements.
(b) No taxing authority has given written notice of any
proposal, assertion, or assessment of any tax deficiencies against Davel or any
of the Davel Subsidiaries that are not adequately reserved for, except for
deficiencies that individually or in the aggregate would not
-29-
reasonably be expected to have a Davel Material Adverse Effect. Except as set
forth in Section 5.12 of the Davel Disclosure Letter, there is no action, suit,
taxing authority proceeding or audit now in progress, pending, or, to the
knowledge of Davel, threatened against or with respect to Davel or any of the
Davel Subsidiaries.
Section 5.13 Employment Agreements. Except as disclosed in Section
5.13 of the Davel Disclosure Letter, there are no employment, consulting,
severance or indemnification contracts or agreements between Davel or any Davel
Subsidiary, on the one hand, and any directors, officers or other employees of
Davel or any Davel Subsidiary, on the other hand. Davel is not a party to any
collective bargaining agreement.
Section 5.14 Change of Control Provisions. Except as disclosed in
Section 5.14 of the Davel Disclosure Letter, none of the contracts or agreements
set forth in Section 5.13 of the Davel Disclosure Letter and none of Davel's or
any Davel Subsidiary's employee benefit plans, programs or arrangements contains
any provision that would become operative as the result of the Mergers or the
Transactions.
Section 5.15 Employee Benefit Plans.
(a) Except as set forth in Section 2.05 hereof or Section 5.15(a) of
the Davel Disclosure Letter, all of the (i) Davel Benefit Plans and (ii) other
bonus, insurance, pension, profit sharing, retirement, health, and other benefit
plans, stock option plans and stock purchase or ownership plans currently
maintained by Davel or any of the Davel Subsidiaries or to which Davel or any of
the Davel Subsidiaries is a party may be terminated at Davel's election, without
financial penalty or premium and there shall be no obligation of Davel following
the Davel Effective Time, to issue any shares of its capital stock pursuant to
any of the foregoing or otherwise following the Davel Effective Time. Except as
set forth in Section 5.15(a) of the Davel Disclosure Letter, no payment by Davel
or any of the Davel Subsidiaries to any person (payable or distributable
pursuant to the foregoing agreements and plans or this Agreement) shall be
nondeductible by Davel or any of the Davel Subsidiaries for Federal income tax
purposes because of Section 280G of the Code.
(b) Since December 31, 2000, all employee benefit plans within the
meaning of Section 3(3) of ERISA maintained by Davel or any of the Davel
Subsidiaries (collectively, the "Davel Benefit Plans") are in material
-------------------
compliance with, and have been administered and operated in accordance with, the
terms of such Davel Benefit Plans and applicable law, and the Internal Revenue
Service has determined that each such Davel Benefit Plan which is intended to be
"qualified" within the meaning of Section 401(a) of the Code is so qualified and
that each related trust is exempt from tax under Section 501(a) of the Code. No
event which constitutes a "reportable event" as defined in Section 4043 of ERISA
has occurred and is continuing with respect to any Davel Benefit Plan subject to
Title IV of ERISA. No material liability under any statutes, orders,
governmental rules or regulations applicable to any Davel Benefit Plan,
including, without limitation, ERISA and the Code, has been or may reasonably be
expected to be incurred with respect to any Davel Benefit Plan (other than
liabilities for the payment of contributions and benefits in the ordinary
course). No Davel Benefit Plan has been terminated pursuant to Title IV of
ERISA. No event has occurred and no condition exists with respect to any Davel
Benefit Plan which presents a risk of termination or partial
-30-
termination of any Davel Benefit Plan which could reasonably be anticipated to
result in liability on the part of Davel or any of the Davel Subsidiaries. Full
payment has been made, or provision has been made therefor, of all amounts which
Davel or any of the Davel Subsidiaries were required under the terms of the
Davel Benefit Plans to have paid as contributions to such Davel Benefit Plans on
or prior to the date hereof and no Davel Benefit Plan which is subject to Part 3
of Subtitle B of Title I of ERISA has incurred any "accumulated funding
deficiency" (within the meaning of Section 302 of ERISA or Section 412 of the
Code), whether or not waived. Neither Davel nor any of the Davel Subsidiaries
nor, to the knowledge of Davel, any other "disqualified person" or "party in
interest" (as defined in Section 4975 of the Code and Section 3(14) of ERISA,
respectively) has engaged in any nonexempt prohibited transactions in connection
with any Davel Benefit Plan (or its related trust) with respect to which Davel,
any of the Davel Subsidiaries, or any officer, director, employee of Davel or
any of the Davel Subsidiaries or, to the knowledge of Davel, any trustee,
administrator or other fiduciary of any Davel Benefit Plan, would be subject to
either a penalty pursuant to Section 502(i) of ERISA or a material tax imposed
by Section 4975 of the Code nor, to the knowledge of Davel, shall the
consummation of the Transactions constitute such a transaction. Except as
disclosed in Section 5.15(b) of the Davel Disclosure Letter, no claim, action or
litigation, has been made, commenced or, to the knowledge of Davel, threatened
with respect to any Davel Benefit Plan (other than claims for benefits made in
the ordinary course). No Davel Benefit Plan or related trust owns any securities
in violation of Section 407 of ERISA. No withdrawal by Davel or any of the Davel
Subsidiaries, partial or complete, within the meaning of Title IV of ERISA, has
occurred or may be reasonably expected to occur with respect to any Davel
Benefit Plan which is a multiemployer plan which would create a material
liability not adequately reserved against by Davel. With respect to each
employee pension benefit plan (as defined in Section 3(2) of ERISA) which is a
defined benefit plan and is not a multiemployer plan, the assets of such Plan
available to meet the accrued liabilities of such Plan would exceed such
liabilities, based on the actuarial assumptions used for plan termination. Davel
has paid, or has set up an adequate reserve for, all liabilities under each
Davel Benefit Plan.
Section 5.16 Licenses. Davel and the Davel Subsidiaries have
obtained all Licenses material, individually or in the aggregate, to the conduct
of the business of Davel and the Davel Subsidiaries taken as a whole. All of
such Licenses are in full force and effect and, to the best of Davel's
knowledge, will not be impaired or adversely affected by the Transactions in a
manner or to a degree that would reasonably be expected to have a Davel Material
Adverse Effect. There is not pending or, to the knowledge of Davel, threatened
any domestic or foreign suit or proceeding with respect to the suspension,
revocation, cancellation, modification or non-renewal of any of such Licenses,
and, except as set forth in Section 5.16 of the Davel Disclosure Letter, no
event under the control of Davel has occurred that (whether with notice or lapse
of time, or both) would reasonably be expected to result in a suspension or
revocation of or failure to renew any of such Licenses, the loss of which would
reasonably be expected to have a Davel Material Adverse Effect.
Section 5.17 Compliance with Other Instruments and Laws. Except as
set forth in Section 5.17 of the Davel Disclosure Letter, neither Davel nor any
Davel Subsidiary is in violation of any term of its articles of incorporation or
bylaws or comparable organizational documents, or in violation of any Davel
Contract or of any judgment, decree or order which names Davel or any Davel
Subsidiary or in violation of any term of any other material instrument,
contract or agreement (other than any
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Davel Site Location Agreement) to which it is a party or by which it or any of
its properties or assets is bound, except to the extent that any such violation
would not reasonably be expected to have a Davel Material Adverse Effect. Except
as set forth in Section 5.17 of the Davel Disclosure Letter, Davel's and each
Davel Subsidiary's businesses are in compliance with all Federal, state, local
and foreign statutes, laws, ordinances, rules, governmental regulations,
permits, concessions, grants, franchises, licenses or other governmental
authorizations or approvals applicable to the operation of such business, except
to the extent that the failure to be in compliance would not reasonably be
expected to have a Davel Material Adverse Effect.
Section 5.18 Employees. Without limiting the generality of Section
5.17 hereof, Davel has complied in all material respects with all laws relating
to the employment of labor, including provisions thereof relating to wages,
hours, equal opportunity, collective bargaining, civil rights, workers
compensation, WARN statutes, severance, termination, record keeping, labor
relations and family and/or medical leave and, to the knowledge of Davel, it
does not have any material labor relations problems (including, without
limitation, actual or threatened strikes or work stoppages or material
grievances).
Section 5.19 Information Supplied. None of the information supplied
or to be supplied by Davel for inclusion or incorporation by reference in (i)
the Form S-4 shall, at the time the Form S-4 is filed with the SEC or at the
time it becomes effective under the Securities Act, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading or (ii) the Proxy
Statement shall, at the date it is first mailed to Davel's stockholders or at
the time of the Davel Stockholders Meeting, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Form S-4 shall
comply as to form in all material respects with the requirements of the
Securities Act, except that no representation or warranty is made by Davel with
respect to statements made or incorporated by reference in either the Form S-4
or the Proxy Statement based on information supplied by PhoneTel for inclusion
or incorporation by reference therein.
Section 5.20 State Takeover Statutes. To the knowledge of Davel, no
"fair price," "moratorium," "control share acquisition" or other similar anti-
takeover statute or regulation enacted under state or Federal law applicable to
Davel is applicable to the Transactions.
Section 5.21 Certain Fees. Except in connection with the engagement
of Xxxxxxxx & Xxxxxxx and as otherwise set forth in Section 5.21 of the Davel
Disclosure Letter, neither Davel nor any Davel Subsidiary has employed any
broker or finder or incurred any liability for any financial advisory, brokerage
or finders' fees or commissions in connection with the Transactions. The fees
payable by Davel to Xxxxxxxx & Xxxxxxx in connection with the Transactions are
set forth in Section 5.21 of the Davel Disclosure Letter.
Section 5.22 Opinion of Financial Advisor. Davel has received the
opinion of Xxxxxxxx & Xxxxxxx, dated the date hereof, attached hereto as Exhibit
F.
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Section 5.23 Voting Requirements. Except as contemplated by Article
I hereof, Davel Stockholder Approval is the only vote of the holders of any
class or series of Davel's capital stock necessary to adopt this Agreement and
approve the Transactions.
Section 5.24 Payphones. As of January 10, 2002, Davel has good and
marketable title to at least 54,000 installed payphones, all of which, except
for those specifically described in Section 5.24 of the Davel Disclosure Letter,
are operational and which, except for those payphones further specifically
described in Section 5.24 of the Davel Disclosure Letter, are subject to
enforceable Davel Site Location Agreements with Location Owners. Davel's good
faith estimate of the average remaining term of the Davel Site Location
Agreements is 24 months.
Section 5.25 Average Net Revenue. The Average Net Revenue is at
least $29.38 per payphone in operation by Davel and the Davel Subsidiaries as of
the date hereof.
ARTICLE VI
COVENANTS OF PHONETEL
Section 6.01 Conduct of Business by PhoneTel Pending the PhoneTel
Merger. PhoneTel covenants and agrees that, prior to the PhoneTel Effective Time
or the date, if any, on which this Agreement is earlier terminated pursuant to
Section 10.01 hereof, unless Davel shall otherwise consent in writing or except
as otherwise contemplated by this Agreement or the Servicing Agreement:
(a) the businesses of PhoneTel and the PhoneTel Subsidiaries shall be
conducted only in the ordinary and usual course; to the extent consistent
therewith, PhoneTel shall use its best efforts to, and shall cause each PhoneTel
Subsidiary to, preserve intact their respective business organizations and
goodwill, keep available the services of their respective officers and employees
and maintain satisfactory relationships with their respective suppliers,
distributors, customers and others having business relationships with them; and
PhoneTel shall notify Davel as promptly as practicable of any event or
occurrence or emergency not in the ordinary and usual course of the business of
PhoneTel or any PhoneTel Subsidiary and material to the business of PhoneTel and
the PhoneTel Subsidiaries, taken as a whole;
(b) neither PhoneTel nor any PhoneTel Subsidiary shall (i) amend its
articles of incorporation or code of regulations or comparable organizational
documents or (ii) split, combine or reclassify the outstanding PhoneTel Common
Stock or declare, set aside or pay any dividend payable in cash, stock or
property with respect to the PhoneTel Common Stock;
(c) neither PhoneTel nor any PhoneTel Subsidiary shall (i) issue or
agree to issue any additional shares of, or rights of any kind to acquire shares
of, its capital stock of any class other than the issuance of shares of capital
stock of a PhoneTel Subsidiary to PhoneTel or, with respect to PhoneTel,
PhoneTel Common Stock issuable upon exercise of PhoneTel Options or PhoneTel
Warrants, or (ii) modify or agree to modify any term of any option, warrant or
other right to acquire shares of its capital stock;
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(d) neither PhoneTel nor any PhoneTel Subsidiary shall enter into or
agree to enter into, or amend, any contract or agreement with any labor unions
representing employees of PhoneTel or any PhoneTel Subsidiary;
(e) PhoneTel shall not authorize, recommend, propose or announce an
intention to authorize, recommend or propose, or enter into an agreement in
principle or an agreement with respect to any merger, consolidation or business
combination (other than the Transactions), any acquisition or disposition of a
material amount of assets or securities (including, without limitation, the
assets or securities of any PhoneTel Subsidiary) or any change in its
capitalization, or enter into, other than in the ordinary course of business, a
material contract or any release or relinquishment of any material contract
rights;
(f) PhoneTel shall not, and shall not permit any PhoneTel Subsidiary
to, (i) enter into or amend any employment, severance or change-in-control
agreement, or any bonus, incentive compensation, deferred compensation, profit
sharing, retirement, pension, group insurance or other benefit plan except as
required by law or regulation or as expressly provided by this Agreement or (ii)
make any contribution to any such plan except for contributions specifically
required by law or pursuant to the terms of such plans;
(g) PhoneTel shall not (i) create, incur or assume any long-term debt
(including, without limitation, obligations in respect of capital leases) or,
except in the ordinary course of business under existing lines of credit or
except to fund out-of-pocket costs incurred in connection with the Transactions,
create, incur, assume, maintain or permit to exist any short-term debt; (ii)
assume, guarantee, endorse or otherwise become liable or responsible (whether
directly, contingently or otherwise) for the obligations of any other person
except wholly owned PhoneTel Subsidiaries in the ordinary course of business and
consistent with past practices; or (iii) make any loans, advances or capital
contributions to, or investments in, any other person other than a wholly owned
PhoneTel Subsidiary (other than customary advances to employees and short-term
investments pursuant to customary cash management systems of PhoneTel in the
ordinary course and consistent with past practice);
(h) neither PhoneTel nor any PhoneTel Subsidiary shall declare or
make any dividend or distribution of cash, securities or other property to their
respective stockholders or existing senior secured lenders, except as may be
agreed to in writing by each party and their respective senior secured lenders;
and
(i) neither PhoneTel nor any PhoneTel Subsidiary shall agree in
writing or otherwise to take (i) any action that it is prohibited from taking by
this Section 6.01 or (ii) any action that would constitute or is likely to cause
or result in a breach of any representation or warranty set forth herein or a
breach in any material respect of any covenant or agreement set forth herein.
Section 6.02 Stockholders' Meeting. PhoneTel shall cause a meeting
of its stockholders to be duly called and held as soon as reasonably practicable
for the purpose of obtaining PhoneTel Stockholder Approval (the "PhoneTel
Stockholders Meeting"). The Board of Directors of PhoneTel
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shall (i) unanimously recommend the Transactions and adoption of this Agreement
by PhoneTel's stockholders and (ii) use reasonable best efforts to obtain
PhoneTel Stockholder Approval.
Section 6.03 Access to Information. Subject to the terms of Section
7.02 hereof, PhoneTel shall give Davel and its directors, employees, counsel,
financial advisors, auditors, lenders and other authorized representatives full
access during normal business hours throughout the period prior to the Closing
Date to all of the offices, properties, business and marketing plans, books,
files and records of PhoneTel and the PhoneTel Subsidiaries, shall furnish to
Davel and its directors, employees, counsel, financial advisors, auditors,
lenders and other authorized representatives such financial, tax, accounting and
operating data and other information as such persons may reasonably request and
shall instruct PhoneTel's employees, counsel and financial advisors to cooperate
with Davel in its preparation for integration into the business of Davel of the
business of PhoneTel and the PhoneTel Subsidiaries. Throughout the period prior
to the Closing Date, PhoneTel shall furnish promptly to Davel (i) a copy of each
report, schedule and other document filed or received by it pursuant to the
requirements of Federal or state securities laws, and (ii) all such other
information concerning its business, properties and personnel as Davel may
reasonably request; provided that no investigation pursuant to this Section 6.03
shall affect any representation or warranty contained herein or the conditions
to the obligations of the parties to consummate the Transactions.
Section 6.04 No Solicitation.
(a) PhoneTel shall not, and shall use reasonable best efforts to
cause its officers, directors, employees, investment bankers, attorneys,
accountants and other agents retained by it not to, initiate, solicit or
encourage any inquiries relating to, or the making of any, Acquisition Proposal
or engage in negotiations or discussions with, or furnish any information to,
any third party relating to any Acquisition Proposal. As used herein,
"Acquisition Proposal" shall mean any proposal made by a third party, other than
--------------------
by Davel or P Sub with respect to the PhoneTel Common Stock, to acquire,
directly or indirectly, (x) more than 25% of the shares and/or voting power of
the PhoneTel Common Stock or the Davel Common Stock, as the case may be, then
outstanding pursuant to a merger, consolidation or other business combination,
purchase of shares, tender offer or exchange offer or similar transaction,
including, without limitation, any single or multi-step transaction or series of
related transactions or (y) all or a substantial portion of the business or
assets of PhoneTel and the PhoneTel Subsidiaries or of Davel and the Davel
Subsidiaries, as the case may be.
(b) PhoneTel shall advise Davel in writing of its receipt, directly
or indirectly, of any inquiries relating to an Acquisition Proposal promptly
following such receipt. Following its receipt, directly or indirectly, of any
Acquisition Proposal (or any inquiry referred to above), PhoneTel shall furnish
to Davel either a copy of such Acquisition Proposal (or such inquiry) or a
written summary of such Acquisition Proposal (or such inquiry).
Section 6.05 Corporate Organization. Notwithstanding anything to the
contrary contained in this Agreement or in the PhoneTel Disclosure Letter,
PhoneTel and each PhoneTel Subsidiary shall take all reasonable actions
necessary in order to remain duly qualified and in good standing until the
PhoneTel Effective Time in each jurisdiction in which the character of its
properties owned or held under lease or the nature of its activities makes such
qualification necessary.
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Section 6.06 Warrants. On or prior to the Closing Date, PhoneTel
shall take all actions necessary to allow the PhoneTel Warrants to be exercised
by the holders thereof.
Section 6.07 Confidentiality. PhoneTel shall hold, and shall cause
the PhoneTel Subsidiaries to hold, and shall use their respective, reasonable
best efforts to cause their officers, directors, employees, consultants,
advisors, lenders and agents to hold, in confidence, all trade secrets and
confidential information concerning Davel and the Davel Subsidiaries furnished
to PhoneTel in connection with the Transactions in accordance with the
Confidentiality Agreement, dated October 20, 2000, by and between Davel and
PhoneTel (the "Confidentiality Agreement"), which Confidentiality Agreement
shall survive any termination of this Agreement.
ARTICLE VII
COVENANTS OF DAVEL
Section 7.01 Conduct of Business by Davel Pending the Davel Merger.
Davel covenants and agrees that, prior to the Davel Effective Time or the date,
if any, on which this Agreement is earlier terminated pursuant to Section 10.01
hereof, unless PhoneTel shall otherwise consent in writing or except as
otherwise contemplated by this Agreement or the Servicing Agreement:
(a) the businesses of Davel and the Davel Subsidiaries shall be
conducted only in the ordinary and usual course; to the extent consistent
therewith, Davel shall use its best efforts to, and shall cause each Davel
Subsidiary to, preserve intact their respective business organizations and
goodwill, keep available the services of their respective officers and employees
and maintain satisfactory relationships with their respective suppliers,
distributors, customers and others having business relationships with them; and
Davel shall notify PhoneTel as promptly as practicable of any event or
occurrence or emergency not in the ordinary and usual course of the business of
Davel or any Davel Subsidiary and material to the business of Davel and the
Davel Subsidiaries, taken as a whole;
(b) neither Davel nor any Davel Subsidiary shall (i) amend its
certificate of incorporation or bylaws or comparable organizational documents or
(ii) split, combine or reclassify the outstanding Davel Common Stock or declare,
set aside or pay any dividend payable in cash, stock or property with respect to
the Davel Common Stock;
(c) neither Davel nor any Davel Subsidiary shall (i) issue or agree
to issue any additional shares of, or rights of any kind to acquire shares of,
its capital stock of any class other than the issuance of shares of capital
stock of a Davel Subsidiary to Davel or, with respect to Davel, Davel Common
Stock issuable upon exercise of Davel Options or Davel Warrants, or (ii) modify
or agree to modify any term of any option, warrant or other right to acquire
shares of its capital stock;
(d) neither Davel nor any Davel Subsidiary shall enter into or agree
to enter into, or amend, any contract or agreement with any labor unions
representing employees of Davel or any Davel Subsidiary;
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(e) Davel shall not authorize, recommend, propose or announce an
intention to authorize, recommend or propose, or enter into an agreement in
principle or an agreement with respect to any merger, consolidation or business
combination (other than the Transactions), any acquisition or disposition of a
material amount of assets or securities (including, without limitation, the
assets or securities of any Davel Subsidiary) or any change in its
capitalization, or enter into, other than in the ordinary course of business, a
material contract or any release or relinquishment of any material contract
rights;
(f) Davel shall not, and shall not permit any Davel Subsidiary to,
(i) enter into or amend any employment, severance or change-in-control
agreement, or any bonus, incentive compensation, deferred compensation, profit
sharing, retirement, pension, group insurance or other benefit plan except as
required by law or regulation or as expressly provided by this Agreement or (ii)
make any contribution to any such plan except for contributions specifically
required by law or pursuant to the terms of such plans;
(g) Davel shall not (i) create, incur or assume any long-term debt
(including, without limitation, obligations in respect of capital leases) or,
except in the ordinary course of business under existing lines of credit or
except to fund out-of-pocket costs incurred in connection with the Transactions,
create, incur, assume, maintain or permit to exist any short-term debt; (ii)
assume, guarantee, endorse or otherwise become liable or responsible (whether
directly, contingently or otherwise) for the obligations of any other person
except wholly owned Davel Subsidiaries in the ordinary course of business and
consistent with past practices; or (iii) make any loans, advances or capital
contributions to, or investments in, any other person other than a wholly owned
Davel Subsidiary (other than customary advances to employees and short-term
investments pursuant to customary cash management systems of Davel in the
ordinary course and consistent with past practice);
(h) neither Davel nor any Davel Subsidiary shall declare or make any
dividend, distribution or payment of cash, securities or other property to their
respective stockholders or existing senior secured lenders, except as may be
agreed to in writing by each party and their respective senior secured lenders;
and
(i) neither Davel nor any Davel Subsidiary shall agree in writing or
otherwise to take (i) any action that it is prohibited from taking by this
Section 7.01 or (ii) any action that would constitute or is likely to cause or
result in a breach of any representation or warranty set forth herein or a
breach in any material respect of any covenant or agreement set forth herein.
Section 7.02 Confidentiality. Davel shall hold, and shall cause the
Davel Subsidiaries to hold, and shall use their respective reasonable best
efforts to cause their officers, directors, employees, consultants, advisors,
lenders and agents to hold, in confidence, all trade secrets and confidential
information concerning PhoneTel and the PhoneTel Subsidiaries furnished to Davel
in connection with the Transactions in accordance with the Confidentiality
Agreement.
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Section 7.03 Obligations of D Sub and P Sub. Davel shall cause both D
Sub and P Sub to perform their obligations under this Agreement and to
consummate the Transactions on the terms and conditions set forth in this
Agreement.
Section 7.04 Indemnification.
(a) Davel shall and shall cause each of its direct or indirect
subsidiaries, including PhoneTel, successors or assigns (the "Indemnifying
------------
Parties") to indemnify, to the fullest extent permitted under the applicable law
-------
of the state of incorporation of each such Indemnifying Party, each person who
was or is or becomes prior to the PhoneTel Effective Time, a director, officer
or trustee of any such entity (the "Indemnified Parties") for costs and expenses
-------------------
incurred in respect of actions taken prior to and including the PhoneTel
Effective Time in connection with their duties as directors, officers or
trustees of the Indemnifying Parties (including with respect to the
Transactions) for a period of not less than six years from the PhoneTel
Effective Time; provided that, in the event any claim or claims are asserted or
--------
made within such six-year period, all rights to indemnification in respect of
any such claim or claims shall continue until final disposition of any and all
such claims. Without limitation of the foregoing, in the event any Indemnified
Party becomes involved in such capacity in any pending or threatened action,
proceeding or investigation in connection with any matter or event, including
with respect to the Transactions, occurring prior to and including the PhoneTel
Effective Time, the Surviving Corporation, to the fullest extent permitted and
on such conditions as may be required by applicable law, shall make advances for
or reimburse such Indemnified Party for his or her legal and other out-of-pocket
expenses (including the cost of any investigation and preparation) as incurred
in connection therewith. In addition, during such six-year period the charter
and by-laws of each of the Indemnifying Parties and their successors or assigns
shall continue to contain provisions no less favorable to the present and former
directors and officers of such corporation's charter or bylaws as in effect as
of immediately prior to the PhoneTel Effective Time.
(b) For not less than six years after the PhoneTel Effective Time,
the Indemnifying Parties shall maintain in effect directors' and officers'
liability insurance covering the Indemnified Parties who are currently covered
by the Indemnifying Parties' existing directors' and officers' liability
insurance. The Indemnifying Parties will maintain such insurance with policy
limits at least equal to the greater of (i) those in effect with respect to
Davel and its subsidiaries and (ii) those in effect with respect to PhoneTel and
its subsidiaries, in each case as of the date of this Agreement, and with
deductible and retention amounts no greater than the lesser of (x) those in
effect with respect to Davel and its subsidiaries and (y) those in effect with
respect to PhoneTel and its subsidiaries, in each case as of the date of this
Agreement.
Section 7.05 Davel Stockholders' Meeting. Davel shall cause a meeting
of its stockholders to be duly called and held as soon as reasonably practicable
for the purpose of obtaining Davel Stockholder Approval for the transactions
contemplated hereby, as well as stockholder approval of the Amended Plan (the
"Davel Stockholders Meeting"). The Board of Directors of Davel shall (a)
unanimously approve the Transactions and the Amended Plan and recommend approval
of this Agreement and the Amended Plan and (b) use reasonable best efforts to
obtain Davel Stockholder Approval and stockholder approval of the Amended Plan.
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Section 7.06 Amendment of Certificate of Incorporation. Subject to
Davel Stockholder Approval, at the Closing, (a) the Certificate of Incorporation
of Davel shall be amended to increase the authorized number of shares of Davel
Common Stock to 1,000,000,000 and (b) Davel shall have reserved for issuance
upon exercise of Adjusted PhoneTel Options and Adjusted PhoneTel Warrants an
aggregate number of shares of Davel Common Stock sufficient to comply fully with
the terms thereof.
Section 7.07 Employee Matters.
(a) Davel agrees that individuals who are employed by PhoneTel or any
of the PhoneTel Subsidiaries immediately prior to the Closing Date shall remain
employees of the Surviving Corporation or its subsidiaries as of the Closing
Date (each such employee, an "Affected Employee"); provided, however, that
----------------- -------- -------
nothing contained herein shall confer upon any Affected Employee the right to
continued employment by PhoneTel or any of the PhoneTel Subsidiaries for any
period of time after the Closing Date which is not otherwise required by law.
(b) Davel shall, or shall cause the Surviving Corporation or one of
the Davel Subsidiaries to give Affected Employees full credit for purposes of
eligibility and vesting under any employee benefit plans or arrangements
maintained by Davel, PhoneTel or any of the Davel Subsidiaries for such Affected
Employees' service with Davel, PhoneTel or any affiliate thereof to the same
extent recognized immediately prior to the Closing Date.
(c) Davel shall, no later than the PhoneTel Effective Time, enter
into an employment agreement with Xx. Xxxx X. Xxxxxxxxxx to serve as chief
executive officer of Davel and an employment agreement with Xx. Xxxxx X. Xxxxxx
to serve as president of Davel.
(d) Davel shall cause the Surviving Corporation to continue to honor
all employment, severance, separation and other compensation agreements existing
as of the Closing Date between PhoneTel or any of the PhoneTel Subsidiaries with
any officer or employee thereof, which are set forth on Section 7.07(d) of the
PhoneTel Disclosure Letter.
Section 7.08 Access to Information. Subject to the terms of Section
6.07 hereof, Davel shall give PhoneTel, its directors, employees, counsel,
financial advisors, auditors, lenders and other authorized representatives full
access during normal business hours throughout the period prior to the Closing
Date to all of the offices, properties, business and marketing plans, books,
files and records of Davel and the Davel Subsidiaries, shall furnish to PhoneTel
and its directors, employees, counsel, financial advisors, auditors, lenders and
other authorized representatives such financial, tax, accounting and operating
data and other information as such persons may reasonably request and shall
instruct Davel's employees, counsel and financial advisors to cooperate with
PhoneTel in its preparation for integration into the business of Davel and the
Davel Subsidiaries of the business of PhoneTel. Throughout the period prior to
the Closing Date, Davel shall furnish promptly to PhoneTel (a) a copy of each
report, schedule and other document filed or received by it pursuant to the
requirements of Federal or state securities laws and (b) all such other
information concerning its business, properties and personnel as PhoneTel may
reasonably request; provided that no
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investigation pursuant to this Section 7.08 shall affect any representation or
warranty contained herein or the conditions to the obligations of the parties to
consummate the Transactions.
Section 7.09 No Solicitation.
(a) Davel shall not, and shall use reasonable best efforts to cause
its officers, directors, employees, investment bankers, attorneys, accountants
and other agents retained by it not to, initiate, solicit or encourage any
inquiries relating to, or the making of any, Acquisition Proposal or engage in
negotiations or discussions with, or furnish any information to, any third party
relating to any Acquisition Proposal.
(b) Davel shall advise PhoneTel in writing of its receipt, directly
or indirectly, of any inquiries relating to an Acquisition Proposal promptly
following such receipt. Following its receipt, directly or indirectly, of any
Acquisition Proposal (or any inquiry referred to above), Davel shall furnish to
PhoneTel either a copy of such Acquisition Proposal (or such inquiry) or a
written summary of such Acquisition Proposal (or such inquiry).
ARTICLE VIII
COVENANTS OF THE PARTIES
Section 8.01 Reasonable Best Efforts. Subject to the terms and
conditions of this Agreement, each party shall use its reasonable best efforts
to take, or cause to be taken, all action and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate the Transactions. PhoneTel and Davel shall each furnish to one
another and to one another's counsel all such information as may be required in
order to accomplish the foregoing actions, subject to the terms and conditions
of this Agreement. In connection with and without limiting the foregoing,
PhoneTel and Davel shall (a) take all reasonable action necessary to ensure that
no state takeover statute or similar statute or regulation is or becomes
applicable to the Transactions and (b) if any state takeover statute or similar
statute or regulation becomes applicable to the Transactions, take all
reasonable action necessary to ensure that the Transactions may be consummated
as promptly as practicable on the terms contemplated by this Agreement and
otherwise to minimize the effect of such statute or regulation on the
Transactions.
Section 8.02 Certain Filings. PhoneTel and Davel shall cooperate with
one another (a) in connection with the preparation of the Form S-4, the Proxy
Statement and any other disclosure document filed after the date hereof pursuant
to the Securities Act, the Exchange Act or any state securities law (each a
"Disclosure Document"), (b) in determining whether any other action by or in
respect of, or filing with, any Governmental Entity or any actions, consents,
approvals or waivers are required to be obtained from parties to any material
contracts in connection with the consummation of the Transactions and (c) in
seeking any such actions, consents, approvals or waivers or making any such
filings, furnishing information required in connection therewith or with the
Form S-4, the Proxy Statement and the Disclosure Documents and seeking timely to
obtain any such actions, consents, approvals or waivers.
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Section 8.03 Public Announcements. Davel and PhoneTel shall consult
with each other before issuing any press release or making any public statement
with respect to this Agreement or the Transactions and, except as may be
required by applicable law or any listing agreement with any national securities
exchange, shall not issue any such press release or make any such public
statement prior to such consultation.
Section 8.04 Further Assurances. Upon the terms and subject to the
satisfaction of the conditions contained in this Agreement, each of the parties
hereto shall use its reasonable best efforts to take, or cause to be taken, all
appropriate action, and to do or cause to be done, all things necessary, proper
or advisable under applicable laws and regulations to consummate and make
effective the Transactions.
Section 8.05 Notices of Certain Events. PhoneTel and Davel shall
promptly notify the other of:
(a) any notice or other communication from any person alleging that
the consent of such person is or may be required in connection with the
Transactions;
(b) any notice or other communication from any Governmental Entity in
connection with the Transactions;
(c) any actions, suits, claims, investigations or proceedings
commenced or, to the best of its knowledge, threatened against, relating to or
involving or otherwise affecting PhoneTel or any PhoneTel Subsidiary, on the one
hand, or Davel or any Davel Subsidiary, on the other hand, which relate to the
consummation of the Transactions; and
(d) any action, event or occurrence that would constitute a breach of
any representation, warranty, covenant or agreement of it set forth in this
Agreement.
Section 8.06 Preparation of the Form S-4 and the Proxy Statement. As
soon as practicable following the date of this Agreement, PhoneTel and Davel
shall jointly prepare and file with the SEC the Proxy Statement and PhoneTel and
Davel shall prepare, and Davel shall file, with the SEC the Form S-4, in which
the Proxy Statement shall be included as a prospectus. Each of PhoneTel and
Davel shall use reasonable best efforts to have the Form S-4 declared effective
under the Securities Act as promptly as practicable after such filing. PhoneTel
and Davel shall use their respective reasonable best efforts to cause the Proxy
Statement to be mailed to their respective stockholders as promptly as
practicable after the Form S-4 is declared effective under the Securities Act.
No filing of, or amendment or supplement to, the Form S-4 shall be made by Davel
or to the Proxy Statement shall be made by PhoneTel or Davel without providing
the other party the opportunity to review and comment thereon. Davel shall
advise PhoneTel, promptly after it receives notice thereof, of the time when the
Form S-4 has become effective or any supplement or amendment has been filed, the
issuance of any stop order, the suspension of the qualification of the Davel
Common Stock issuable in connection with the Transactions for offering or sale
in any jurisdiction, or any request by the SEC for amendment of the Proxy
Statement or the Form S-4 or comments thereon and responses thereto or requests
by the SEC for additional information. If at any time prior to the Closing Date
any
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information relating to PhoneTel or Davel, or any of its affiliates, officers or
directors, should be discovered by PhoneTel or Davel which should be set forth
in an amendment or supplement to any of the Form S-4 or the Proxy Statement, so
that any of such documents would not include any misstatement of a material fact
or omit to state any material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, the party
which discovers such information shall promptly notify the other party hereto
and an appropriate amendment or supplement describing such information shall be
promptly filed with the SEC and, to the extent required by law, disseminated to
the stockholders of PhoneTel and Davel.
Section 8.07 Letters of Accountants. Each of Davel and PhoneTel shall use its
reasonable best efforts to cause to be delivered to the other party two letters
from its respective independent accountants, one dated a date within two
business days before the date on which the Form S-4 shall become effective and
one dated a date within two business days before the Closing Date, each
addressed to the other party, in form and substance reasonably satisfactory to
Davel and PhoneTel and customary in scope and substance for comfort letters
delivered by independent public accountants in connection with registration
statements similar to the Form S-4.
Section 8.08 Affiliates. As soon as reasonably practicable after the date
hereof (but in no event later than 45 days prior to the PhoneTel Effective
Time), PhoneTel shall deliver to Davel a list (the "Affiliate List") identifying
all persons who are, in the reasonable judgment of PhoneTel, "affiliates" of
PhoneTel for purposes of Rule 145 of the Securities Act. PhoneTel shall use all
commercially reasonable efforts to deliver or cause to be delivered to Davel an
agreement, substantially in the form attached hereto as Exhibit D, (i) executed
by each person listed on the Affiliate List no later than 30 days prior to the
PhoneTel Effective Time and (ii) executed by each person who becomes an
"affiliate" of PhoneTel for purposes of Rule 145 of the Securities Act after
delivery of the Affiliate List as soon as reasonably practicable thereafter and
prior to the PhoneTel Effective Time.
Section 8.09 Representations. Each of PhoneTel and Davel shall (a) use its
reasonable best efforts to take all action necessary to render true and correct
as of the Closing Date its representations and warranties contained in this
Agreement, (b) refrain from taking any action that would render any such
representation or warranty untrue or incorrect as of such time, and (c) perform
or cause to be satisfied each agreement, covenant or condition to be performed
or satisfied by it.
Section 8.10 Davel Board of Directors. Each of PhoneTel and Davel, and their
respective Lenders, will cooperate in good faith to determine the nominees for
the Board of Directors of Davel following the Mergers.
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ARTICLE IX
CONDITIONS TO THE MERGERS
Section 9.01 Conditions to the Obligations of Each Party. The
obligations of PhoneTel, Davel, Davel Financing, D Sub and P Sub to consummate
the Transactions are subject to the satisfaction or waiver of the following
conditions:
(a) the Transactions, including, but not limited to, the PhoneTel
Restructuring, this Agreement and the PhoneTel Merger shall have been approved
and adopted by the stockholders of PhoneTel in accordance with Ohio Law;
(b) the Transactions, including but not limited to, the Davel
Restructuring, this Agreement and the Mergers shall have been approved by the
stockholders of Davel in accordance with applicable law;
(c) no Governmental Entity shall have issued any judgment,
injunction, order or decree or taken any other action permanently enjoining,
restraining or otherwise prohibiting the Transactions, which judgment,
injunction, order or decree or other action shall have become final and
nonappealable;
(d) the Form S-4 shall have become effective under the Securities Act
and shall not be the subject of any stop order or proceedings seeking a stop
order;
(e) the PhoneTel Restructuring and the Davel Restructuring shall have
been consummated; and
(f) the 2002 Credit Facility, in an amount of no less that $10
million, shall continue to be available to Davel no later than the PhoneTel
Effective Time.
Section 9.02 Conditions to the Obligations of Davel, Davel Financing,
D Sub and P Sub. The obligations of Davel, Davel Financing, D Sub and P Sub to
consummate the Transactions are subject to the satisfaction of the following
additional conditions:
(i) that the representations and warranties of PhoneTel as set
forth in this Agreement shall be true and correct in all material respects
as if made on and as of the Closing Date (other than those representations
and warranties which address matters only as of a certain date, which shall
be true and correct in all material respects as of such certain date) and
PhoneTel shall have complied with or performed in all material respects all
agreements and covenants required to be complied with or performed by it
under this Agreement at or prior to the Closing Date; provided, that, for
--------
purposes of determining whether the condition set forth in this Section
9.02(a) has been satisfied, no representation or warranty of PhoneTel shall
be deemed untrue, incorrect, not complied with or not performed as a
consequence of the existence or absence of any fact, circumstance or event
unless such fact, circumstance or event, individually or when taken
together with all other facts, circumstances
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or events inconsistent with the representations or warranties of PhoneTel,
has had or would reasonably be expected to have a PhoneTel Material Adverse
Effect (disregarding for this purpose any materiality qualification
contained in such representations or warranties); and
(ii) The PhoneTel Merger shall have been contemporaneously
consummated in the manner set forth in Section 2.01.
Section 9.03 Conditions to the Obligations of PhoneTel. The obligations of
PhoneTel to consummate the Transactions are subject to the satisfaction of the
following additional conditions:
(a) the representations and warranties of Davel as set forth in
this Agreement shall be true and correct in all material respects as if made on
and as of the Closing Date (other than those representations and warranties
which address matters only as of a certain date, which shall be true and correct
in all material respects as of such certain date) and Davel and P Sub shall have
complied with or performed in all material respects all agreements and covenants
required to be complied with or performed by them under this Agreement at or
prior to the Closing Date; provided, that, for purposes of determining whether
--------
the condition set forth in this Section 9.03(a) has been satisfied, no
representation or warranty of Davel shall be deemed untrue, incorrect, not
complied with or not performed as a consequence of the existence or absence of
any fact, circumstance or event unless such fact, circumstance or event,
individually or when taken together with all other facts, circumstances or
events inconsistent with the representations or warranties of Davel, has had or
would reasonably be expected to have a Davel Material Adverse Effect
(disregarding for this purpose any materiality qualification contained in such
representations or warranties); and
(b) The Davel Merger shall have been contemporaneously
consummated in the manner set forth in Section 3.01.
ARTICLE X
TERMINATION AND WAIVER
Section 10.01 Termination. This Agreement may be terminated and the
Transactions may be abandoned at any time prior to the Closing Date
(notwithstanding any approval of this Agreement and the PhoneTel Merger by the
stockholders of PhoneTel or any approval of this Agreement by the stockholders
of Davel as provided herein):
(a) by mutual written consent of PhoneTel and Davel;
(b) by either PhoneTel or Davel, if the Transactions have not
been consummated by August 31, 2002; provided that no party may terminate this
--------
Agreement pursuant to this subsection if such party's failure to fulfill any of
its obligations under this Agreement shall have been the reason that the Closing
shall not have occurred on or before such date;
(c) by either PhoneTel or Davel, if there shall be adopted or
enacted after the date hereof any law or regulation that makes consummation of
the Transactions illegal or
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otherwise prohibited or if any judgment, injunction, order or decree enjoining
Davel or PhoneTel from consummating the Transactions is entered and such
judgment, injunction, order or decree shall have become final and nonappealable;
(d) by either PhoneTel or Davel, if (i) PhoneTel Stockholder Approval
shall not have been obtained at the PhoneTel Stockholders Meeting or any
adjournment or postponement thereof or (ii) if Davel Stockholder Approval shall
not have been obtained at the Davel Stockholders Meeting or any adjournment or
postponement thereof;
(e) by Davel (provided that Davel is not then in breach of its
obligations hereunder in any material respect), if PhoneTel shall have breached
in any material respect any of its representations, warranties, covenants or
agreements contained herein (determined in accordance with Section 9.02(a)
hereof) and shall not have cured such breach within 30 days after PhoneTel
receives written notice of such breach from Davel; or
(f) by PhoneTel (provided that PhoneTel is not then in breach of its
obligations hereunder in any material respect), if Davel shall have breached in
any material respect any of its representations, warranties, covenants or
agreements contained herein (determined in accordance with Section 9.03(a)
hereof) and shall not have cured such breach within 30 days after Davel receives
written notice of such breach from PhoneTel.
Such right of termination shall be exercised by written notice of termination
given by the terminating party to the other parties hereto in the manner
hereinafter provided. Any such right of termination shall not be an exclusive
remedy hereunder but shall be in addition to any other legal or equitable
remedies that may be available to any non-defaulting party hereto arising out of
any default hereunder by any other party hereto.
Section 10.02 Waiver. At any time prior to the Closing Date, the
parties hereto, by action taken by or pursuant to resolutions of their
respective Boards of Directors, may (a) extend the time for the performance of
any of the obligations or other acts of the parties hereto, (b) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto, and (c) except for obtaining PhoneTel
Stockholder Approval and Davel Stockholder Approval, waive compliance with any
of the agreements or conditions contained herein; provided, however, that no
waiver by PhoneTel shall be effective unless consented to in writing by the
PhoneTel Lenders. Any agreement on the part of a party hereto to any such
extension or waiver shall be valid if set forth in an instrument in writing
signed on behalf of such party.
Section 10.03 Effect of Termination. If this Agreement is terminated
pursuant to Section 10.01 hereof, this Agreement shall become void and of no
effect with no liability on the part of any party hereto, except that the
agreements contained in Sections 6.07, 7.02, 11.05 and 11.07 hereof shall
survive the termination hereof and except that no such termination shall relieve
any party from liability for breach of this Agreement or failure by it to
perform its obligations hereunder.
ARTICLE XI
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MISCELLANEOUS
Section 11.01 Closing. The closing of the Mergers (the "Closing") shall
occur at the Davel Effective Time and the PhoneTel Effective Time, respectively.
The date on which the PhoneTel Effective Time and the Davel Effective Time
occurs is referred to herein as the "Closing Date".
Section 11.02 Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including facsimile, telex or similar
writing) and shall be given,
If to Davel, Davel Financing, D Sub or P Sub, to:
Davel Communications, Inc.
00000 Xxxxxxxxx Xxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: R. Xxxxx Xxxx, Esq.
Facsimile: (000) 000-0000
if to PhoneTel, to:
PhoneTel Technologies, Inc.
0000 Xxxxxxxx Xxxxxx, 0/xx/ Xxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxx X. Xxxxxxxxxx
Facsimile: (000) 000-0000
with a copy to:
Xxxx Xxxxxx & Parks LLP
0000 XX Xxxxx
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000
Attn: F. Xxxxxx X'Xxxxx, Esq.
Facsimile: (000) 000-0000
or such other address, telecopy or telex number as such party may hereafter
specify for the purpose by notice to the other parties hereto. Each such notice,
request or other communication shall be effective
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(a) if given by facsimile or telex, upon confirmation of receipt, or (b) if
given by any other means, when delivered at the address specified in this
Section 11.02.
Section 11.03 Survival of Representations and Warranties. The
representations and warranties contained herein shall not survive the Closing
Date.
Section 11.04 Amendments; No Waivers.
(a) Any provision of this Agreement may be amended or
waived prior to the Closing (whether before or after approval of this Agreement
by the stockholders of Davel or PhoneTel, if, and only if, such amendment or
waiver is in writing and signed, in the case of an amendment, by all of the
parties hereto or in the case of a waiver, by the party against whom the waiver
is to be effective; provided, however, that no waiver by PhoneTel shall be
--------
effective unless consented to in writing by the PhoneTel Lenders; provided,
--------
further, that after any such approval by the stockholders of Davel or PhoneTel,
no such amendment or waiver shall, without the further approval of such
stockholders, alter or change (i) the amount or kind of consideration to be
received in exchange for any shares of capital stock of Davel or PhoneTel, (ii)
any term of the articles of incorporation of the Surviving Corporation (except
that alterations or changes may be made that could otherwise be adopted by the
Board of Directors of the Surviving Corporation) or (iii) any of the terms or
conditions of this Agreement if such alteration or change would adversely affect
the holders of any class or series of shares of capital stock of Davel or
PhoneTel.
(b) No failure or delay by any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
Section 11.05 Expenses. Each party shall pay its own costs and expenses
relating to this Agreement and the Transactions, except that each of Davel and
PhoneTel shall bear and pay one-half of the costs and expenses incurred in
connection with the printing and mailing of the Proxy Statement.
Section 11.06 Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of the other parties hereto.
Section 11.07 Governing Law; Jurisdiction. All provisions of this
Agreement relating to the PhoneTel Merger shall be construed in accordance with
and governed by Ohio Law. In all other respects, this Agreement shall be
construed in accordance with and governed by the law of the State of Delaware,
without giving effect to any choice of law or conflict of law rules or
provisions (whether of the State of Delaware or any other jurisdiction) that
would cause the application of the laws of any jurisdiction other than the State
of Delaware. Each party hereto irrevocably submits to the nonexclusive
jurisdiction of (a) the state courts of Delaware and (b) the federal district
courts located
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in the State of Delaware for the purposes of any suit, action or other
proceeding arising out of this Agreement or any transaction contemplated hereby.
Section 11.08 Counterparts; Effectiveness. This Agreement may be signed in
any number of counterparts (including by means of telecopied signature pages),
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument. This Agreement shall become
effective when each party hereto shall have received counterparts hereof signed
by all of the other parties hereto.
Section 11.09 Headings; Interpretation. Section headings used in this
Agreement are for convenience only and shall be ignored in the construction and
interpretation hereof. The use of the word "including" herein shall mean
"including without limitation."
Section 11.10 No Third Party Beneficiaries. Except for Section 7.04
hereof, no provision of this Agreement is intended to, or shall, confer any
third party beneficiary or other rights or remedies upon any person other than
the parties hereto.
Section 11.11 Entire Agreement. This Agreement and the Confidentiality
Agreement (including the documents and the instruments referred to herein and
therein) constitute the entire agreement and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
DAVEL COMMUNICATIONS, INC.
By: /s/ Xxxxx X. Xxxxxx
---------------------
Name: Xxxxx X. Xxxxxx
Title: President
DAVEL FINANCING COMPANY, L.L.C.
By: Davel Communications, Inc.
Its: Sole Managing Member
By: /s/ Xxxxx X. Xxxxxx
---------------------
Name: Xxxxx X. Xxxxxx
Title: President
DF MERGER CORP.
By: /s/ Xxxxx X. Xxxxxx
---------------------
Name: Xxxxx X. Xxxxxx
Title: President
PT MERGER CORP.
By: /s/ Xxxxx X. Xxxxxx
---------------------
Name: Xxxxx X. Xxxxxx
Title: President
PHONETEL TECHNOLOGIES, INC.
By: /s/ Xxxx X. Xxxxxxxxxx
------------------------
Name: Xxxx X. Xxxxxxxxxx
Title: President & Chief Executive Officer
