EXHIBIT 99.7
VOTING AGREEMENT
This VOTING AGREEMENT, dated June 11, 1998, between Cerberus
Partners, L.P., a Delaware limited partnership ("Cerberus"), and Davel
Communications Group, Inc., an Illinois corporation (the "Company").
WHEREAS, concurrently with the execution and delivery of this
Agreement, PhoneTel Technologies, Inc., an Ohio corporation ("PhoneTel"),
the Company, Davel Holdings, Inc., a Delaware corporation and a wholly
owned subsidiary of the Company ("New Davel"), D Subsidiary, Inc., an
Illinois corporation and a wholly owned subsidiary of New Davel ("D Sub"),
and PT Merger Corp., an Ohio corporation and a wholly owned subsidiary of
New Davel ("P Sub"), have entered into an Agreement and Plan of Merger and
Reorganization (the "Merger Agreement"), dated the date hereof, pursuant to
which (i) D Sub will be merged with and into the Company with the Company
surviving as a wholly owned subsidiary of New Davel (the "Davel Merger")
and (ii) P Sub will be merged with and into PhoneTel with PhoneTel
surviving as a wholly owned subsidiary of New Davel (the "PhoneTel
Merger").
WHEREAS, the consummation of the PhoneTel Merger, and the other
transactions contemplated by the Merger Agreement (the "Transaction"), is
subject to certain conditions, including the approval of the Merger
Agreement and the PhoneTel Merger by the holders of at least a majority of
the outstanding shares of common stock, par value $.01 per share, of
PhoneTel ("PhoneTel Common Stock").
WHEREAS, Cerberus is the holder of warrants (the "Warrants") to
purchase shares of Series A Special Convertible Preferred Stock, par value
$.20 per share (the Preferred Stock), of PhoneTel at an exercise price of
$.20 per share of Preferred Stock.
WHEREAS, the Preferred Stock is convertible into an aggregate of
1,798,240 shares of PhoneTel Common Stock (such shares, upon acquisition
thereof by Cerberus, being herein referred to as the "Warrant Shares").
WHEREAS, under the terms of the Warrant Purchase Agreement dated March
15, 1996 (the "Warrant Agreement") between PhoneTel and Cerberus pursuant
to which the Warrants were issued, the Warrants are immediately exercisable
for the Preferred Stock; and, under the terms of the Preferred Stock, as
set forth in the Articles of Incorporation of PhoneTel, upon issuance, the
Preferred Stock will be immediately convertible into the Shares.
WHEREAS, Cerberus is the record and beneficial owner of 124,300 shares
of PhoneTel Common Stock (such shares being herein referred to as the
"Currently Held Shares" and, together with the Warrant Shares and any other
shares of capital stock of PhoneTel acquired by Cerberus after the date
hereof and during the term of this Agreement being collectively herein
referred to as the "Shares"), which shares collectively represent
approximately 8.0% of the Shares of PhoneTel Common Stock outstanding as of
June 1, 1998.
WHEREAS, as a condition to the willingness of the Company to enter
into the Merger Agreement, and as an inducement to it to do so, Cerberus
has agreed for the benefit of the Company as set forth in this Agreement.
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement, the parties hereby
agree as follows:
ARTICLE I
COVENANTS OF CERBERUS
Section 1.1 Agreement to Exercise Warrants. Cerberus covenants and
agrees with the Company that, prior to the record date for the PhoneTel
Shareholders Meeting (as hereinafter defined), Cerberus will exercise the
Warrants for all of the shares of Preferred Stock issuable upon exercise of
the Warrants and will pay the exercise price payable in respect thereof.
Section 1.2 Agreement to Convert Preferred Stock. Cerberus
covenants and agrees with the Company that, prior to the record date for
the PhoneTel Stockholders Meeting, Cerberus will convert the Preferred
Stock into all of the shares of PhoneTel Common Stock issuable upon
conversion of the Preferred Stock and will continue to hold the Shares
through such record date so that Cerberus is a holder of record of PhoneTel
Common Stock entitled to vote the Shares at the PhoneTel Stockholders
meeting.
Section 1.3 Agreement to Vote. At any meeting of the shareholders
of the Company held prior to the Termination Date (as hereinafter defined),
however called ("PhoneTel Shareholders Meeting"), and at every reconvened
meeting following any adjournment or postponement thereof prior to the
Termination Date, or in connection with any written consent of the
shareholders of the Company executed prior to the Termination Date,
Cerberus shall vote the Shares in favor of the approval of the Merger
Agreement, the PhoneTel Merger and each of the actions contemplated by the
Merger Agreement to be performed by PhoneTel in connection with the
Transaction and any actions required in furtherance thereof. Prior to the
Termination Date and subject to Section 2.5, Cerberus shall not enter into
any agreement or understanding with any person, directly or indirectly, to
vote, grant any proxy or give instructions with respect to the voting of
the Shares in any manner inconsistent with the preceding sentence.
Section 1.4 Proxies. (a) Cerberus hereby revokes any and all
previous proxies granted with respect to matters set forth in Section 1.3
for the Shares.
(b) Prior to the Termination Date, Cerberus shall not grant any
proxies or powers of attorney with respect to matters set forth in Section
1.3, deposit any of the Shares into a voting trust or enter into a voting
agreement, other than this Agreement, with respect to any of the Shares, in
each case with respect to such matters.
Section 1.5 Transfer of Shares by Cerberus. Prior to the
Termination Date, Cerberus shall not (a) pledge or place any encumbrance on
any Shares, other than pursuant to this Agreement, or (b) transfer, sell,
exchange or otherwise dispose of any Shares, in each case unless the
pledgee, encumbrance holder, transferee, purchaser or acquiror of such
Shares enters into a Voting Agreement with the Company containing
substantially the same terms as this Agreement.
Section 1.6 Action in Shareholder Capacity Only. Cerberus makes no
agreement or understanding herein in any capacity other than its capacity
as a record holder of the Warrants and Currently Held Shares and a
beneficial owner of the Warrants, the Preferred Stock and the Shares, and
nothing herein shall limit or affect any actions taken in any other
capacity.
ARTICLE II
REPRESENTATIONS, WARRANTIES AND
ADDITIONAL COVENANTS OF Cerberus
Cerberus represents, warrants and covenants to the Company that:
Section 2.1 Ownership. As of the date hereof, Cerberus has the
right, under the terms of the Warrants and the Preferred Stock, to acquire,
in the aggregate, the 1,798,240 Warrant Shares. Cerberus is the beneficial
and record owner of the Currently Held Shares and, upon exercise of the
Warrants and subsequent conversion of the Preferred Stock, Cerberus will be
the beneficial and record owner of the Warrant Shares and, subject to
Section 1.3, Cerberus will have the sole right to vote the Warrant Shares
and the Currently Held Shares and there will be no restrictions on rights
of disposition or other liens pertaining to the Warrant Shares or the
Currently Held Shares. Cerberus has not agreed to subject any Shares to
any voting trust or other agreement, arrangement or restriction with
respect to the voting of the Shares.
Section 2.2 Authority and Non-Contravention. Cerberus has the
right, power and authority to enter into this Agreement and, subject to the
issuance to Cerberus of the Warrant Shares, to consummate the transactions
contemplated by this Agreement. The execution and delivery of this
Agreement by Cerberus and the consummation of the transactions contemplated
by this Agreement have been duly authorized by all necessary action on the
part of Cerberus. This Agreement has been duly executed and delivered by
Cerberus and constitutes a valid and binding obligation of Cerberus,
enforceable against Cerberus in accordance with its terms, subject to
general principles of equity and as may be limited by bankruptcy,
insolvency, moratorium, or similar laws affecting creditors' rights
generally. Neither the execution and delivery of this Agreement by
Cerberus nor the consummation by Cerberus of the transactions contemplated
hereby will (i) materially violate, or require any consent, approval or
notice under, any provision of any judgment, order, decree, statute, law,
rule or regulation applicable to Cerberus or, upon issuance thereof to
Cerberus, the Shares or (ii) violate or conflict with the certificate of
incorporation or bylaws of Cerberus or constitute a material violation of
or default under any contract, commitment, agreement, understanding,
arrangement or other restriction of any kind to which Cerberus is a party
or by which Cerberus or its assets are bound.
Section 2.3 Total Shares. As of the date hereof, other than the
Currently Held Shares, Cerberus does not own, beneficially (other than
through ownership of the Warrants) or of record, any shares of capital
stock of the Company. Other than the Warrants, Cerberus does not have any
option to purchase or right to subscribe for or otherwise acquire any
securities of the Company and has no other interest in or voting rights
with respect to any other securities of the Company.
Section 2.4 Notifications. Prior to the Termination Date, Cerberus
will notify the Company promptly of the number of any shares of capital
stock of PhoneTel acquired by Cerberus after the date hereof.
Section 2.5 Pooling. Cerberus agrees not to take any action that
would cause the Transaction not to qualify for pooling-of-interests
treatment for accounting purposes.
ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS OF
THE COMPANY
The Company represents, warrants and covenants to Cerberus that:
Section 3.1 Authority and Non-Contravention. The Company has the
right, power and authority to enter into this Agreement and to consummate
the transactions contemplated by this Agreement. The execution and
delivery of this Agreement by the Company and the consummation of the
transactions contemplated by this Agreement have been duly authorized by
all necessary action on the part of the Company. This Agreement has been
duly executed and delivered by the Company and constitutes a valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms, subject to general principles of equity and as
may be limited by bankruptcy, insolvency, moratorium or similar laws
affecting creditors' rights generally. Neither the execution and delivery
of this Agreement nor the consummation by the Company of the transactions
contemplated hereby will (i) materially violate, or require any consent,
approval or notice under, any provision of any judgment, order, decree,
statute, law, rule or regulation applicable to the Company or (ii) violate
or conflict with the certificate of incorporation or by laws of the Company
or constitute a material violation of or default under any contract,
commitment, agreement, understanding, arrangement or other restriction of
any kind to which the Company is a party or by which the Company or its
assets are bound.
ARTICLE IV
MISCELLANEOUS
Section 4.1 Expenses. All costs and expenses incurred in
connection with this Agreement shall be paid by the party incurring such
costs or expenses; provided, however, that the Company shall pay reasonable
fees and expenses of counsel to Cerberus incurred in connection with the
negotiation and execution of this Agreement.
Section 4.2 Further Assurances. From time to time, at the request
of the Company, in the case of Cerberus, or at the request of Cerberus, in
the case of the Company, and without further consideration, each party
shall execute and deliver or cause to be executed and delivered such
additional documents and instruments and take all such further action as
may be reasonably necessary or desirable to consummate the transactions
contemplated by this Agreement.
Section 4.3 Specific Performance. Cerberus agrees that the Company
would be irreparably damaged if for any reason Cerberus fails to perform
any of Cerberus' obligations under this Agreement, and that the Company
would not have an adequate remedy at law for money damages in such event.
Accordingly, the Company shall be entitled to seek specific performance and
injunctive and other equitable relief to enforce the performance of this
Agreement by Cerberus. This provision is without prejudice to any other
rights that the Company may have against Cerberus for any failure to
perform its obligations under this Agreement.
Section 4.4 Amendments, Termination. This Agreement may not be
modified or amended except by an instrument or instruments in writing
signed by each party hereto. The representations, warranties, covenants
and agreements set forth in Article I, Article II and Article III shall
terminate, except with respect to liability for prior breaches thereof,
upon the earliest to occur of (i) December 7, 1998, (ii) termination of the
Merger Agreement in accordance with its terms, (iii) the Closing Date and
(iv) the date, if any, upon which PhoneTel's Board of Directors withdraws,
modifies or changes its recommendation or approval of the Merger Agreement
or the PhoneTel Merger in a manner adverse to the Company (the "Termination
Date").
Section 4.5 Assignment. Subject to Section 1.5 hereof, neither
this Agreement nor any of the rights, interests or obligations under this
Agreement shall be assigned, in whole or in part, by operation of law or
otherwise by any of the parties without the prior written consent of the
other parties. Subject to the preceding sentence, this Agreement shall be
binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns.
Section 4.6 Certain Events. Cerberus agrees that this Agreement
and the obligations hereunder shall attach to the Warrants, Preferred
Stock, Currently Held Shares and Shares and shall be binding upon any
person to which legal or beneficial ownership of such shares shall pass,
whether by operation of law or otherwise.
Section 4.7 Entire Agreement. This Agreement (including the
documents referred to herein) (a) constitutes the entire agreement, and
supersedes all prior agreements and understanding, both oral and written
between the parties with respect to the subject matter of this Agreement
and (b) is not intended to confer upon any person other than the parties
hereto any rights or remedies.
Section 4.8 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered
personally, sent by documented overnight delivery service or telecopied
with confirmation of receipt, to the parties at the addresses specified
below (or at such other address or telecopy or telex number for a party as
shall be specified by like notice):
If to the Company, to:
Davel Communications Group, Inc.
1429 Massaro Boulevard
Tampa, Florida 33619
Attention: Theodore C. Rammelkamp, Jr., Esq.
Facsimile: (813) 626-9610
with a copy to:
Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
Attention: R. Scott Falk, Esq.
Facsimile: (312) 861-2200
If to Cerberus, to:
Cerberus Partners L.P.
450 Park Avenue
28th Floor
New York, NY 10022
Attention: Mr. Seth Plattus
Facsimile: (212) 750-5212
with a copy to:
Lowenstein, Sandler P.C.
65 Livingston Avenue
Roseland, NJ 07068
Attention: Robert G. Minion, Esq.
Facsimile: (973) 597-2425
Section 4.9 Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of New York
regardless of the laws that might otherwise govern under applicable
principles of conflicts of laws thereof.
Section 4.10 Counterparts. This Agreement may be executed in two or
more counterparts, all of which shall be considered one and the same
agreement, and, shall become effective when one or more counterparts have
been signed by each of the parties and delivered to the other parties in
original or facsimile form.
Section 4.11 Interpretation. The headings contained in this
Agreement are inserted for convenience of reference only and shall not
affect in any way the meaning or interpretation of this Agreement.
Section 4.12 Severability. Any provision hereof which is invalid or
unenforceable shall be ineffective to the extent of such invalidity or
unenforceability, without affecting in any way the remaining provisions
hereof.
Section 4.13 Consent to Jurisdiction. Each party hereto irrevocably
submits to the nonexclusive jurisdiction of (a) the state courts of the
State of New York and (b) the United States federal district courts located
in the State of New York for the purposes of any suit, action or other
proceeding arising out of this Agreement or any transaction contemplated
hereby.
Section 4.14 Attorney's Fees. If any action at law or in equity is
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.
IN WITNESS WHEREOF, this Agreement has been signed by or on behalf of
each of the parties as of the date first above written.
CERBERUS PARTNERS, L.P.
By:________________________________
Name:
Title:
DAVEL COMMUNICATIONS GROUP, INC.
By:________________________________
Name:
Title: