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EXHIBIT 10.4
VOTING AGREEMENT
VOTING AGREEMENT, dated as of July 5, 1998, between Samstock, L.L.C., a
Delaware limited liability company ("Samstock"), and Peoples Telephone Company,
Inc., a New York corporation ("Peoples").
WHEREAS, Peoples, Davel Communications Group, Inc., an Illinois
corporation ("Parent"), and Davel Holdings, Inc., a Delaware corporation
("Holdings"), have entered into an Agreement and Plan of Merger and
Reorganization dated as of July 5, 1998 (the "Merger Agreement"), pursuant to
which (a) a newly formed company ("Newco") will be organized as a New York
corporation and a direct, wholly owned subsidiary of Parent (or if the
Davel/PhoneTel Merger has, by the time of such formation, been consummated, of
Holdings) and (b) Newco will be merged (the "Peoples Merger") with and into
Peoples pursuant to the Merger Agreement.
WHEREAS, the consummation of the Peoples Merger and the other
transactions contemplated by the Merger Agreement (the "Transaction") will be
subject to certain conditions, including the approval of the Merger Agreement
and the Peoples Merger by the stockholders of Parent (or, if applicable,
Holdings), if required by applicable law or regulation or the rules of the
Nasdaq Stock Market.
WHEREAS, Samstock is the record and beneficial owner of 1,623,900
shares of Parent Common Stock (which number excludes 350,000 shares of Parent
Common Stock that may be acquired by Samstock pursuant to warrants (the
"Warrants") issued by Parent and David R. Hill ("Hill")), representing
approximately 28.1% of the shares of Parent Common Stock outstanding on the date
hereof (such 1,623,900 shares, together with any other shares of capital stock
of Parent acquired by Samstock after the date hereof and during the term of this
Agreement, being collectively referred to herein as the "Shares"). If the
Davel/PhoneTel Merger is consummated, the term "Shares" shall refer to shares of
Holdings Common Stock.
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement, the parties hereby agree
as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Terms used but not defined herein shall have the respective
meanings given to such terms in the Merger Agreement.
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ARTICLE II
COVENANTS OF SAMSTOCK
Section 2.1 Agreement to Vote. At any meeting of the shareholders of
Parent held prior to the Termination Date (as defined in Section 5.4 hereof),
however called, and at every reconvened meeting following any adjournment
thereof prior to the Termination Date, or in connection with any written consent
of the shareholders of Parent executed prior to the Termination Date, Samstock
shall vote the Shares in favor of the approval of the Merger Agreement and each
of the actions contemplated by the Merger Agreement to be performed by Parent in
connection with the Transaction and any actions required in furtherance thereof.
After the date hereof and prior to the Termination Date and subject to Section
2.3 hereof, Samstock shall not enter into any agreement or understanding with
any person, directly or indirectly, to vote, grant any proxy or give
instructions with respect to the voting of the Shares in any manner inconsistent
with the preceding sentence.
Section 2.2 Proxies. (a) Samstock hereby revokes any and all previous
proxies granted with respect to matters set forth in Section 2.1 for the Shares.
(b) After the date hereof and prior to the Termination Date, Samstock
shall not grant any proxies or powers of attorney with respect to matters set
forth in Section 2.1, deposit any of the Shares into a voting trust or enter
into a voting agreement, other than this Agreement, the Stock Purchase
Agreement, dated May 14, 1998, by and between Hill and Samstock, L.L.C., the
Stock Purchase Agreement, dated May 14, 1998, by and between Parent and
Samstock, L.L.C., the Agreement, dated May 14, 1998, between Hill and Samstock,
L.L.C. (the "Hill/Samstock Voting Agreement"), the Investment Agreement, dated
June 29, 1998, by and among Hill, Parent and Samstock, L.L.C. (the "Investment
Agreement"), the Shareholders Agreement, dated as of June 29, 1998, by and among
Hill, Samstock, L.L.C. and, solely for purposes of Sections 2(a), 2(b), 3, 4, 6
and 8 through 19 thereof, Parent (the "Shareholders Agreement"), and the Pledge
Agreement, dated July __, 1998, between Hill and Samstock, L.L.C., with respect
to any of the Shares, in each case with respect to such matters.
Section 2.3 Transfer of Shares by Samstock. After the date hereof and
prior to the Termination Date, Samstock shall not (a) transfer, sell, exchange
or otherwise dispose of any Shares unless such transferee, purchaser or acquiror
enters into a voting agreement with Peoples containing substantially the same
terms as this Agreement or (b) pledge or place any encumbrance on any Shares,
other than pursuant to this Agreement and other than a pledge or encumbrance of
any Shares to any bank or other financial institution in connection with any
bona fide financing transaction by Samstock or any such transferee, purchaser or
acquiror, provided that such bank or financial institution, as a condition to
exercising its rights to seize and vote such Shares, enters into a voting
agreement with Peoples containing substantially the same terms as this
Agreement.
Section 2.4 Action in Shareholder Capacity Only. Samstock makes no
agreement or understanding herein in any capacity other than in its capacity as
a record holder and beneficial owner of the Shares, and nothing herein shall
limit or affect any actions taken in any other capacity.
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ARTICLE III
REPRESENTATIONS, WARRANTIES AND
ADDITIONAL COVENANTS OF SAMSTOCK
Samstock represents, warrants and covenants to Peoples that:
Section 3.1 Ownership. Samstock is, as of the date hereof, the
beneficial and record owner of 1,623,900 shares of Parent Common Stock (which
number excludes 350,000 shares of Parent Common Stock that may be acquired by
Samstock pursuant to the Warrants), and has the sole right to vote such shares,
and, except as set forth in (i) the Hill/Samstock Voting Agreement, (ii) the
Voting Agreement dated June 14, 1998 between Samstock and PhoneTel Technologies,
Inc. (collectively, the "Voting Agreements"), (iii) the Investment Agreement and
(iv) the Shareholders Agreement, there are no restrictions on rights of
disposition or other liens pertaining to such shares. None of such shares is
subject to any voting trust or other agreement, arrangement or restriction with
respect to the voting of such shares other than pursuant to the Voting
Agreements, the Investment Agreement and the Shareholders Agreement.
Section 3.2 Authority and Non-Contravention. Samstock has the right,
power and authority to enter into this Agreement and to consummate the
transactions contemplated by this Agreement. The execution and delivery of this
Agreement by Samstock and the consummation of the transactions contemplated by
this Agreement have been duly authorized by all necessary action on the part of
Samstock. This Agreement has been duly executed and delivered by Samstock and
constitutes a valid and binding obligation of Samstock, enforceable against
Samstock in accordance with its terms, subject to general principles of equity
and as may be limited by bankruptcy, insolvency, moratorium, or similar laws
affecting creditors' rights generally. Neither the execution and delivery of
this Agreement by Samstock nor the consummation by Samstock of the transactions
contemplated hereby will (i) materially violate, or require any consent,
approval or notice under, any provision of any judgment, order, decree, statute,
law, rule or regulation applicable to Samstock or the Shares or (ii) violate or
conflict with the limited liability company agreement of Samstock or constitute
a material violation of or default under any contract, commitment, agreement,
understand ing, arrangement or other restriction of any kind to which Samstock
is a party or by which Samstock or its assets are bound.
Section 3.3 Total Shares. Except as contemplated by the Shareholders
Agreement, the Investment Agreement and the Warrants, Samstock does not have any
option to purchase or right to subscribe for or otherwise acquire any securities
of Parent and has no other interest in or voting rights with respect to any
other securities of Parent.
Section 3.4 Reasonable Efforts. Prior to the Termination Date, Samstock
shall use reasonable efforts to take, or cause to be taken, all actions, and to
do, or cause to be done, and to assist and cooperate with Parent in doing, all
things reasonably necessary, proper or advisable to consummate and make
effective, in the most expeditious manner reasonably practicable, the
Transaction.
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ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS OF
PEOPLES
Peoples represents, warrants and covenants to Samstock that:
Section 4.1 Authority and Non-Contravention. Peoples has the right,
power and authority to enter into this Agreement and to consummate the
transactions contemplated by this Agreement. The execution and delivery of this
Agreement by Peoples and the consummation of the transactions contemplated by
this Agreement have been duly authorized by all necessary action on the part of
Peoples. This Agreement has been duly executed and delivered by Peoples and
constitutes a valid and binding obligation of Peoples, enforceable against
Peoples in accordance with its terms, subject to general principles of equity
and as may be limited by bankruptcy, insolvency, moratorium or similar laws
affecting creditors' rights generally. Neither the execution and delivery of
this Agreement nor the consummation by Peoples of the transactions contemplated
hereby will (i) materially violate, or require any consent, approval or notice
under, any provision of any judgment, order, decree, statute, law, rule or
regulation applicable to Peoples or (ii) violate or conflict with the
certificate of incorporation or bylaws of Peoples or constitute a material
violation of or default under any contract, commitment, agreement,
understanding, arrangement or other restriction of any kind to which Peoples is
a party or by which Peoples or its assets are bound.
ARTICLE V
MISCELLANEOUS
Section 5.1 Expenses. All costs and expenses incurred in connection
with this Agreement shall be paid by the party incurring such costs or expenses.
Section 5.2 Further Assurances. From time to time, at the request of
Peoples, in the case of Samstock, or at the request of Samstock, in the case of
Peoples, and without further consideration, each party shall execute and deliver
or cause to be executed and delivered such additional documents and instruments
and take all such further action as may be reasonably necessary or desirable to
consummate the transactions contemplated by this Agreement.
Section 5.3 Specific Performance. Samstock agrees that Peoples would be
irreparably damaged if for any reason Samstock fails to perform any of
Samstock's obligations under this Agreement, and that Peoples would not have an
adequate remedy at law for money damages in such event. Accordingly, Peoples
shall be entitled to seek specific performance and injunctive and other
equitable relief to enforce the performance of this Agreement by Samstock. This
provision is without prejudice to any other rights that Peoples may have against
Samstock for any failure to perform its obligations under this Agreement.
Section 5.4 Amendments, Termination. This Agreement may not be modified
or amended except by an instrument or instruments in writing signed by each
party hereto. The representations, warranties, covenants and agreements set
forth in Article II, Article III and Article IV shall terminate,
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except with respect to liability for prior breaches thereof, upon the earliest
to occur of (i) termination of the Merger Agreement in accordance with its
terms, (ii) the Closing Date and (iii) the date, if any, upon which Peoples's
Board of Directors withdraws, modifies or changes its recommendation or approval
of the Merger Agreement or the Peoples Merger in a manner adverse to Parent (the
"Termination Date").
Section 5.5 Assignment. Subject to Section 2.3 hereof, neither this
Agreement nor any of the rights, interests or obligations under this Agreement
shall be assigned, in whole or in part, by operation of law or otherwise by any
of the parties without the prior written consent of the other parties. Subject
to the preceding sentence, this Agreement shall be binding upon, and inure to
the benefit of, the parties hereto and their respective successors and assigns.
Section 5.6 Certain Events. Samstock agrees that this Agreement and the
obligations hereunder shall attach to the Shares and shall be binding upon any
person to which legal or beneficial ownership of such shares shall pass, whether
by operation of law or otherwise.
Section 5.7 Entire Agreement. This Agreement (including the documents
referred to herein) (a) constitutes the entire agreement, and supersedes all
prior agreements and understanding, both oral and written between the parties
with respect to the subject matter of this Agreement and (b) is not intended to
confer upon any person other than the parties hereto any rights or remedies.
Section 5.8 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally, sent by
documented overnight delivery service or telecopied with confirmation of
receipt, to the parties at the addresses specified below (or at such other
address or telecopy or telex number for a party as shall be specified by like
notice):
If to Peoples, to:
Peoples Telephone Company, Inc.
2300 N.W. 89th Place
Miami, Florida 33172
Attention: General Counsel
Telecopy number: (305) 593-6116
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with a copy to:
Steel Hector & Davis LLP
200 South Biscayne Blvd.
Miami, Florida 33131-2398
Attention: Ira N. Rosner, P.A.
Facsimile: (305) 577-7001
and
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
Attention: John Madden, Esq.
Facsimile: (212) 848-7179
If to Samstock, to:
Samstock, L.L.C.
Two North Riverside Plaza
Chicago, Illinois 60606
Attention: Mr. F. Philip Handy
Telecopy number: (312) 454-1671
with a copy to:
Rosenberg & Liebentritt, P.C.
Two North Riverside Plaza
Chicago, Illinois 60606
Attention: Walter S. Lowry, Esq.
Telecopy number: (312) 454-0335
Section 5.9 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Illinois regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
Section 5.10 Counterparts. This Agreement may be executed in two or
more counterparts, all of which shall be considered one and the same agreement,
and, shall become effective when one or more counterparts have been signed by
each of the parties and delivered to the other parties in original or facsimile
form.
Section 5.11 Interpretation. The headings contained in this Agreement
are inserted for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement.
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Section 5.12 Severability. Any provision hereof which is invalid or
unenforceable shall be ineffective to the extent of such invalidity or
unenforceability, without affecting in any way the remaining provisions hereof.
Section 5.13 Consent to Jurisdiction. Each party hereto irrevocably
submits to the nonexclusive jurisdiction of (a) the state courts of the State of
Illinois and (b) the United States federal district courts located in the State
of Illinois for the purposes of any suit, action or other proceeding arising out
of this Agreement or any transaction contemplated hereby.
Section 5.14 Attorney's Fees. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to reasonable attorneys' fees, costs and necessary
disbursements, in addition to any other relief to which such party may be
entitled
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IN WITNESS WHEREOF, this Agreement has been signed by or on behalf of
each of the parties as of the date first above written.
SAMSTOCK, L.L.C.
By SZ Investments, L.L.C., its sole member
By Zell General Partnership, Inc., its managing member
By: /s/ Donald J. Liebentritt
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Name: Donald J. Liebentritt
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Title: Vice President
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PEOPLES TELEPHONE COMPANY, INC.
By: /s/ E. Craig Sanders
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Name: E. Craig Sanders
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Title: CEO/President
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