EXHIBIT 2.2
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EXCHANGE AGREEMENT
Dated as of February 19, 2002
Among
DAVEL COMMUNICATIONS, INC.,
DAVEL FINANCING COMPANY, L.L.C.,
DF MERGER CORP.
and
PHONETEL TECHNOLOGIES, INC.,
CHEROKEE COMMUNICATIONS, INC.
and
THE PERSONS IDENTIFIED HEREIN AS THE DAVEL LENDERS
and
THE PERSONS IDENTIFIED HEREIN AS THE PHONETEL LENDERS
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TABLE OF CONTENTS
RECITALS:.........................................................................................................1
ARTICLE I DEFINITIONS.............................................................................................3
Section 1.1 Defined Terms................................................................................3
Section 1.2 Interpretation...............................................................................7
ARTICLE II DEBT FOR EQUITY EXCHANGES..............................................................................7
Section 2.1 Davel Debt for Equity Exchange...............................................................7
Section 2.2 PhoneTel Debt for Equity Exchange............................................................8
Section 2.3 Closing of Debt for Equity Exchanges.........................................................8
Section 2.4 Further Assurances...........................................................................9
ARTICLE III REPRESENTATIONS AND WARRANTIES........................................................................9
Section 3.1 Representations and Warranties of the Davel Parties..........................................9
Section 3.2 Representations and Warranties of the PhoneTel Parties......................................13
Section 3.3 Representations and Warranties of the Davel Lenders.........................................16
Section 3.4 Representations and Warranties of the PhoneTel Lenders......................................17
ARTICLE IV COVENANTS.............................................................................................18
Section 4.1 Davel Covenants.............................................................................18
Section 4.2 PhoneTel Covenants..........................................................................20
ARTICLE V CONDITIONS TO CLOSING..................................................................................21
Section 5.1 Conditions to the Obligations of the Lenders................................................21
Section 5.2 Conditions to the Obligations of Davel and PhoneTel.........................................22
ARTICLE VI MISCELLANEOUS.........................................................................................23
Section 6.1 Notices.....................................................................................23
Section 6.2 Entire Agreement; Amendments; Waiver........................................................24
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Section 6.3 No Relationship.............................................................................25
Section 6.4 Successors and Assigns; Survival............................................................25
Section 6.5 Termination.................................................................................25
Section 6.6 Expenses....................................................................................25
Section 6.7 Counterpart and Telecopier Execution........................................................25
Section 6.8 Governing Law; Submission to Jurisdiction...................................................26
Section 6.9 TRIAL BY JURY...............................................................................26
Section 6.10 Severability...............................................................................26
Section 6.11 Captions...................................................................................26
List of Schedules, Exhibits and Annexes to
Exchange Agreement
Schedules
Schedule 2.1 - List of Exchanged Davel Loans and Davel Debt
Exchange Shares
Schedule 2.2 - List of Exchanged PhoneTel Loans and PhoneTel
Debt Exchange Shares
Schedule 2.3(A) - List of promissory notes, instruments of
assignment and other closing documents to be delivered by
Davel Lenders to Davel Financing
Schedule 2.3(B) - List of stock certificates, officers'
certificates, promissory notes and other closing documents to
be delivered by Davel Financing to the Davel Lenders
Schedule 2.3(C) - List of promissory notes, instruments of
assignment and other closing documents to be delivered by
PhoneTel Lenders to PhoneTel
Schedule 2.3(D) - List of stock certificates, officers'
certificates, promissory notes and other closing document to
be delivered by PhoneTel to the PhoneTel Lenders
Schedule 3.1(E) - Davel Governmental Approvals
Schedule 3.1(F)(1) - Authorized and Issued Capital Stock of
Davel as of Date of Execution
Schedule 3.1(F)(2) - Authorized and Issued Capital Stock of
Davel after the Davel Effective Time; Schedule of Rights to
Purchase Capital Stock of Davel after the Davel Effective Time
Schedule 3.1(F)(3) - Authorized and Issued Capital Stock of
Davel after the PhoneTel Effective Time; Schedule of Rights to
Purchase Capital Stock of Davel after the PhoneTel Effective
Time
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Schedule 3.1(F)(5) - Pre-emptive Rights
Schedule 3.1(F)(6) - Authorized and Issued Capital Stock of D
Sub
Schedule 3.1(K) - Certain Fees
Schedule 3.2(E) - PhoneTel Governmental Approvals
Schedule 3.2(F)(1) - Authorized and Issued Capital Stock of
PhoneTel as of Date of Execution
Schedule 3.2(F)(2) - Authorized and Issued Capital Stock of
PhoneTel after PhoneTel Debt for Equity Exchange but before
Davel Effective Time and the PhoneTel Effective Time
Schedule 3.2(F)(4) - Pre-emptive Rights
Schedule 3.2(K) - Certain Fees Schedule 3.3(E) - Disclosure
relating to Government Approvals
Schedule 3.3(F) - Disclosure relating to ownership of the
Davel Loans
Schedule 3.4(E) - Disclosure relating to Government Approvals
Schedule 3.4(F) - Disclosure relating to ownership of the
PhoneTel Loans
Exhibits
Exhibit A - Commitment Letter
Exhibit B - Registration Rights Agreement
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THIS
EXCHANGE AGREEMENT (this "Agreement"), dated as of the
19th day of February, 2002, is being entered into by and among DAVEL
COMMUNICATIONS, INC., a Delaware corporation ("Davel"), DAVEL FINANCING COMPANY,
L.L.C., a Delaware limited liability company wholly owned by Davel ("Davel
Financing"), DF MERGER CORP., a Delaware corporation and a wholly-owned
subsidiary of Davel Financing ("D Sub"), PHONETEL TECHNOLOGIES, INC., an Ohio
corporation ("PhoneTel" and, together with Davel, the "Companies"), CHEROKEE
COMMUNICATIONS, INC., a Texas corporation and a wholly owned subsidiary of
PhoneTel ("Cherokee"), the persons identified on the signature pages to this
Agreement as the "Davel Lenders" (the "Davel Lenders"), and the persons
identified on the signature pages to this Agreement as the "PhoneTel Lenders"
(the "PhoneTel Lenders" and, together with the Davel Lenders, the "Lenders").
RECITALS:
▇. ▇▇▇▇▇ Financing (as the borrower), Davel and certain
subsidiaries of Davel (as guarantors) and the Davel Lenders are parties to a
Credit Agreement dated as of December 23, 1998 (as amended and modified by the
First Amendment to Credit Agreement and Consent and Waiver dated as of April 8,
1999, the Second Amendment to Credit Agreement dated as of March 9, 2000, the
Third Amendment to Credit Agreement dated as of June 22, 2000, the Fourth
Amendment to Credit Agreement dated as of September 28, 2000, the Fifth
Amendment to Credit Agreement and Waiver dated as of November 29, 2000, the
Sixth Amendment to Credit Agreement and Waiver dated as of March 23, 2001 and
the Seventh Amendment to Credit Agreement and Consent and Waiver dated as of
February 19, 2002 and as may be further amended or modified from time to time,
the "Davel Credit Agreement") providing for a senior secured credit facility
(the "Davel Credit Facility") in a maximum aggregate amount of $280,000,000
consisting of "Term A Loans", "Term B Loans" and "Revolving Loans" (each as
defined in the Davel Credit Agreement and, collectively, the "Davel Loans"). As
of the date hereof, the following Davel Loans are outstanding: $109,492,354 in
principal amount of Term A Loans, $93,379,558 in principal amount of Term B
Loans and $34,383,088 in principal amount of Revolving Loans, in each case
excluding any outstanding fees, interest and expenses.
B. PhoneTel and Cherokee (as the borrowers) are parties to a
Loan and Security Agreement dated as of November 17, 1999 (as amended by
Amendments Numbers One through Eight, most recently dated February 19, 2002 and
as may be further amended or modified from time to time, the "PhoneTel Credit
Agreement") providing for a senior secured credit facility (the "PhoneTel Credit
Facility") in a maximum aggregate amount of $46,000,000 consisting of revolving
credit loans (the "PhoneTel Loans"). As of December 31, 2001, $62,634,745 in
principal amount (including capitalized fees, interest and expenses) of PhoneTel
Loans were outstanding.
C. In connection with the formation of D Sub, Davel Financing
contributed to D Sub a promissory note dated February 19, 2002 in the principal
amount of $342,551.46 (the "D Sub Note") in exchange for 1,000 shares of common
stock of D Sub, having no par value ("D Sub Common Stock"), constituting all the
issued and outstanding capital stock of D Sub.
D. PhoneTel, Davel, Davel Financing, D Sub and PT Merger
Corp., a Delaware corporation and a wholly owned subsidiary of Davel Financing
("P Sub"), are parties to an Agreement and Plan of Reorganization and Merger
dated as of February 19, 2002 (the "Merger Agreement") providing for (i) the
merger of P Sub with and into PhoneTel (the "PhoneTel Merger"), with PhoneTel
surviving as a wholly owned subsidiary of Davel Financing, and (ii) the merger
of D Sub with and into Davel Financing, with Davel Financing as the surviving
entity (the "Davel Merger" and, together with the PhoneTel Merger, the
"Mergers"). The Merger Agreement provides that, in connection with the PhoneTel
Merger: (i) the shares of common stock of PhoneTel common stock, par value $.01
per share ("PhoneTel Common Stock"), outstanding after giving effect to the
transactions contemplated by Paragraph F below, will be converted into a number
of fully paid and nonassessable shares of common stock of Davel, par value $.01
per share ("Davel Common Stock"), as more fully set forth in the Merger
Agreement (with the number of shares of Davel Common Stock into which each share
of PhoneTel Common Stock is so converted being sometimes referred to herein as
the "PhoneTel Merger Exchange Ratio"), (ii) each outstanding option to purchase
PhoneTel Common Stock (a "PhoneTel Option") will be converted into an option (an
"Adjusted PhoneTel Option") to purchase a corresponding number of shares of
Davel Common Stock, with Davel assuming the obligations under such Adjusted
PhoneTel Options, and (iii) each outstanding warrant to purchase PhoneTel Common
Stock (a "PhoneTel Warrant") will be converted into a warrant (an "Adjusted
PhoneTel Warrant") to purchase a corresponding number of shares of Davel Common
Stock, with Davel assuming the obligations under such Adjusted PhoneTel
Warrants, with the aggregate of (i), (ii) and (iii) representing 36.5% of the
number of shares of Davel Common Stock that will be outstanding on a
fully-diluted basis (without giving effect to the intended reservation of Davel
Common Stock for issuance in respect of stock options and warrants of Davel that
is referred to in Section 3.1(f)(ii)) immediately after the Mergers. The Merger
Agreement further provides that, in connection with the Davel Merger, the
outstanding shares of D Sub Common Stock will be converted into a number of
fully paid and nonassessable shares of common stock of Davel Common Stock
representing 59.06% of the number of shares of Davel Common Stock that will be
outstanding on a fully-diluted basis (after giving effect to the intended
reservation of Davel Common Stock for issuance in respect of stock options and
warrants of Davel that is referred to in Section 3.1(f)(ii)) immediately after
the Mergers (with the number of shares of Davel Common Stock into which each
share of D Sub Common Stock is so converted being sometimes referred to herein
as the "Davel Merger Exchange Ratio").
E. It is contemplated that, prior to the Mergers, the
Certificate of Incorporation of Davel will be amended to increase the authorized
number of shares of common stock of Davel to 1,000,000,000 (one billion) shares.
F. In contemplation of the Mergers, PhoneTel and Davel, on the
one hand, and the Davel Lenders and the PhoneTel Lenders, on the other hand,
are, simultaneously with the execution of this Agreement, executing a commitment
letter in the form attached hereto as Exhibit A (the "Commitment Letter"), which
Commitment Letter contemplates that, in connection with and contingent upon the
consummation of the Mergers: (i) the Davel Lenders will assign to Davel
Financing a portion of the Davel Loans in exchange for the transfer by Davel
Financing to the Davel Lenders of all the issued and outstanding shares of D Sub
Common Stock (such exchange being referred to herein as the "Davel Debt for
Equity Exchange"), which shares are to be converted pursuant to the Davel Merger
into shares of Davel Common Stock,
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(ii) the PhoneTel Lenders will assign to PhoneTel a portion of the PhoneTel
Loans in exchange for the issuance by PhoneTel to the PhoneTel Lenders of shares
of PhoneTel Common Stock (such exchange being referred to herein as the
"PhoneTel Debt for Equity Exchange"), which shares are to be converted into
shares of Davel Common Stock upon consummation of the Merger and (iii) the Davel
Loans not so exchanged for D Sub Common Stock (the "Retained Davel Loans") and
the PhoneTel Loans not so converted into PhoneTel Common Stock (the "Retained
PhoneTel Loans") will be consolidated into a single restructured credit facility
(the "New Credit Facility"), to be governed by a credit agreement to be executed
on or before the Effective Time of the Mergers.
G. This Agreement is being entered into pursuant to the
Commitment Letter in order to set forth the terms and conditions on which the
Davel Debt for Equity Exchange and the PhoneTel Debt for Equity Exchange are to
be effected and the respective obligations of the parties with regard thereto.
NOW, THEREFORE, in consideration of these premises and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Defined Terms. Except as otherwise specified herein or as
the context may otherwise require, the following terms have the respective
meanings set forth below for all purposes of this Agreement. Except as otherwise
specified herein, the terms set out in the preamble and Recitals hereto shall
have the respective meanings set forth therein for all purposes of this
Agreement.
"Adjusted PhoneTel Option" has the meaning set forth in
Recital D hereto.
"Adjusted PhoneTel Warrant" has the meaning set forth in
Recital D hereto.
"Agreement" has the meaning set forth in the preamble hereto.
"Board of Directors" means, as applicable, the board of
directors of Davel from time to time, or the board of directors of PhoneTel from
time to time.
"Cherokee" has the meaning set forth in the preamble hereto.
"Combined Proxy Statement" means the joint proxy statement,
contemplated by the Merger Agreement, to be prepared jointly by PhoneTel and
Davel and sent to their respective stockholders relating to the meetings of such
stockholders to be held in connection with the Merger Agreement.
"Commitment Letter" has the meaning set forth in Recital F
hereto.
"Companies" has the meaning set forth in the preamble hereto.
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"Consent" in relation to the Davel Lenders means the consent
of Davel Lenders holding not less than 75% in aggregate principal amount of the
Davel Loans and in relation to the PhoneTel Lenders means the consent of
PhoneTel Lenders holding not less than 75% in aggregate principal amount of the
PhoneTel Loans.
"Converted Davel Debt Exchange Shares" means the shares of
Davel Common Stock to be issued to the Davel Lenders pursuant to the Davel
Merger in respect of the Davel Debt Exchange Shares, as described in Section 2.1
hereof.
"Converted PhoneTel Debt Exchange Shares" means the shares of
Davel Common Stock to be issued to the PhoneTel Lenders pursuant to the PhoneTel
Merger in respect of the PhoneTel Debt Exchange Shares, as described in Section
2.2 hereof.
"Davel" has the meaning set forth in the preamble hereto.
"Davel Common Stock" has the meaning set forth in Recital D
hereto.
"Davel Credit Agreement" has the meaning set forth in Recital
A hereto.
"Davel Credit Facility" has the meaning set forth in Recital A
hereto.
"Davel Debt Exchange Shares" means the shares of D Sub Common
Stock to be received by the Davel Lenders pursuant to the Davel Debt for Equity
Exchange, as described in Section 2.1 hereof.
"Davel Debt for Equity Exchange" has the meaning set forth in
Recital F hereto.
"Davel Effective Time" means the Davel Effective Time as
determined pursuant to the Merger Agreement.
"Davel Financing" has the meaning set forth in the preamble
hereto.
"Davel Lenders" has the meaning set forth in the preamble
hereto.
"Davel Loans" has the meaning set forth in Recital A hereto.
"Davel Material Adverse Effect" means 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 or the
Lenders to realize substantially all of the benefits of the Transactions.
"Davel Merger" has the meaning set forth in Recital D hereto.
"Davel Merger Exchange Ratio" has the meaning set forth in
Recital D hereto.
"Davel Parties" means Davel, Davel Financing and D Sub.
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"Davel Subsidiary" means a Davel Subsidiary as defined in the
Merger Agreement.
"Davel Syndicate Agent" means PNC Bank N.A., as agent to the
Davel Lenders under the Davel Credit Facility.
"Debt for Equity Exchanges" means, collectively, the Davel
Debt for Equity Exchange and the PhoneTel Debt for Equity Exchange.
"D Sub" has the meaning set forth in the preamble.
"D Sub Common Stock" has the meaning set forth in Recital C
hereto.
"D Sub Note" has the meaning set forth in Recital C hereto.
"Effective Time of the Exchanges" has the meaning set forth in
Section 2.3 hereof.
"Effective Time of the Mergers" means the earlier of the Davel
Effective Time and the PhoneTel Effective Time, it being understood that,
pursuant to Section 11.01 of the Merger Agreement, it is contemplated that the
Davel Effective Time and the PhoneTel Effective Time will take place
substantially contemporaneously, with the Davel Effective Time immediately
preceding the PhoneTel Effective Time.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Closing" means the closing of the Davel Debt for
Equity Exchange and the PhoneTel Debt for Equity Exchange, as described in
Section 2.3 hereof.
"Exchanged Davel Loans" means the Davel Loans assigned by each
Davel Lender to Davel Financing in exchange for the D Sub Common Stock, as
described in Section 2.1 hereof.
"Exchanged PhoneTel Loans" means the PhoneTel Loans assigned
by each PhoneTel Lender to PhoneTel in exchange for the PhoneTel Debt Exchange
Shares, as described in Section 2.2 hereof.
"Governmental Entity" means any federal, state, local, foreign
or other governmental department, commission, board, bureau, agency or
instrumentality.
"Lenders" has the meaning set forth in the preamble hereto.
"Letter of Intent" means the Letter of Intent dated as of June
12, 2001 between Davel and PhoneTel, as amended from time to time through
January 31, 2002.
"Merger Agreement" has the meaning set forth in Recital D
hereto.
"Mergers" has the meaning set forth in Recital D hereto.
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"New Credit Facility" has the meaning set forth in Recital F
hereto.
"PhoneTel" has the meaning set forth in the preamble hereto.
"PhoneTel Common Stock" has the meaning set forth in Recital D
hereto.
"PhoneTel Credit Agreement" has the meaning set forth in
Recital B hereto.
"PhoneTel Credit Facility" has the meaning set forth in
Recital B hereto.
"PhoneTel Debt Exchange Shares" means the shares of PhoneTel
Common Stock to be received by the PhoneTel Lenders pursuant to the PhoneTel
Debt for Equity Exchange, as described in Section 2.2 hereof.
"PhoneTel Debt for Equity Exchange" has the meaning set forth
in Recital F hereto.
"PhoneTel Effective Time" means the PhoneTel Effective Time as
determined pursuant to the Merger Agreement.
"PhoneTel Lenders" has the meaning set forth in the preamble
hereto.
"PhoneTel Loans" has the meaning set forth in Recital B
hereto.
"PhoneTel Material Adverse Effect" means 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, financial condition or results of operations, a material
adverse effect on the ability of Davel and its stockholders or the Lenders to
realize substantially all of the benefits of the Transactions.
"PhoneTel Merger" has the meaning set forth in Recital D
hereto.
"PhoneTel Merger Exchange Ratio" has the meaning set forth in
Recital D hereto.
"PhoneTel Option" has the meaning set forth in Recital D
hereto.
"PhoneTel Parties" means PhoneTel and Cherokee.
"PhoneTel Subsidiary" means a PhoneTel Subsidiary as defined
in the Merger Agreement.
"PhoneTel Syndicate Agent" means Foothill Capital Corporation,
as agent to the PhoneTel Lenders under the PhoneTel Credit Facility.
"PhoneTel Warrant" has the meaning set forth in Recital D
hereto.
"P Sub" has the meaning set forth in Recital D hereto.
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"Registration Rights Agreement" means the Registration Rights
Agreement described in Section 5.1(j) hereof.
"Registration Statement" means the Registration Statement to
be filed on Securities Act Form S-4 pursuant to Section 8.06 of the Merger
Agreement in respect of the shares of Davel Common Stock to be issued in the
Mergers, including, without limitation, the Converted Davel Debt Exchange Shares
and the Converted PhoneTel Debt Exchange Shares.
"Retained Davel Loans" has the meaning set forth in Recital F
hereto.
"Retained PhoneTel Loans" has the meaning set forth in Recital
F hereto.
"Securities Act" means the Securities Act of 1933, as amended.
"Servicing Agreement" means the Servicing Agreement dated as
of June 12, 2001 between Davel and PhoneTel as amended from time to time through
December 31, 2001.
"Transaction Agreements" means, collectively, this Agreement,
the Merger Agreement, the Commitment Letter, the Registration Rights Agreement
and any other agreement or instrument executed and delivered pursuant to any of
the foregoing (including, without limitation, any documentation relating to the
New Credit Facility).
"Transactions" means all the transactions contemplated by the
Transaction Agreements.
Section 1.2 Interpretation. Whenever used in this Agreement, except as
otherwise expressly provided or unless the context otherwise requires, any noun
or pronoun shall be deemed to include the plural as well as the singular and to
cover all genders. Unless otherwise specified, the terms "hereof" and "herein"
and similar terms refer to this Agreement as a whole (including the exhibits and
schedules hereto), and references herein to Articles, Sections and subsections
are to Articles, Sections and subsections of this Agreement unless otherwise
specified. All terms defined in this Agreement shall have the defined meanings
when used in any notice or other document made or delivered pursuant hereto,
unless otherwise defined therein.
ARTICLE II
DEBT FOR EQUITY EXCHANGES
Section 2.1 Davel Debt for Equity Exchange. Immediately prior to the
Effective Time of the Mergers, subject to the fulfillment of the applicable
conditions set forth in Article V below, each Davel Lender shall assign to Davel
Financing the Davel Loans listed in Column A of Schedule 2.1 hereto opposite the
name of such Davel Lender (collectively, the "Exchanged Davel Loans") in
exchange for the transfer by Davel Financing to such Davel Lender (or its
designated affiliate) of the number of fully paid and nonassessable shares of D
Sub Common Stock set forth opposite such Davel Lender's name in Column B of
Schedule 2.1 (collectively, the "Davel Debt Exchange Shares"). Immediately
following the assignment of the Exchanged Davel Loans to Davel Financing, such
loans shall be cancelled by Davel Financing. At the
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Davel Effective Time, the Davel Debt Exchange Shares will be converted pursuant
to the Davel Merger into such number of shares of Davel Common Stock (the
"Converted Davel Debt Exchange Shares") as is equal to the number of such Davel
Debt Exchange Shares multiplied by the Davel Merger Exchange Ratio, subject to
the provisions of the Merger Agreement regarding fractional shares.
Section 2.2 PhoneTel Debt for Equity Exchange. Immediately prior to the
Effective Time of the Mergers, subject to the fulfillment of the applicable
conditions set forth in Article V below, each PhoneTel Lender shall assign to
PhoneTel the PhoneTel Loans listed in Column A of Schedule 2.2 hereto opposite
the name of such PhoneTel Lender (collectively, the "Exchanged PhoneTel Loans")
in exchange for the issuance by PhoneTel to such PhoneTel Lender (or its
designated affiliate) of the number of fully paid and nonassessable shares of
PhoneTel Common Stock (which may include fractional shares) set forth opposite
such PhoneTel Lender's name in Column B of Schedule 2.2 (collectively, the
"PhoneTel Debt Exchange Shares"). Upon the assignment of such Exchanged PhoneTel
Loans to PhoneTel, such loans shall be cancelled. At the PhoneTel Effective
Time, the PhoneTel Debt Exchange Shares issued to each PhoneTel Lender shall be
converted pursuant to the PhoneTel Merger into such number of shares of Davel
Common Stock (the "Converted PhoneTel Debt Exchange Shares") as is equal to the
number of such PhoneTel Debt Exchange Shares multiplied by the PhoneTel Merger
Exchange Ratio, subject to the provisions of the Merger Agreement regarding
fractional shares.
Section 2.3 Closing of Debt for Equity Exchanges. (a) Subject to the
fulfillment of the applicable conditions precedent set forth in Article V below,
the consummation of the Davel Debt for Equity Exchange and the PhoneTel Debt for
Equity Exchange and the related actions provided for herein (the "Exchange
Closing") shall take place immediately prior to the Effective Time of the
Mergers at the offices of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (with the date and time of such transactions being sometimes
referred to herein as the "Effective Time of the Exchanges").
At the Exchange Closing: (i) the Davel Lenders shall deliver to Davel Financing
the promissory notes, instruments of assignment and other closing documents
listed on Schedule 2.3(A) hereto, (ii) Davel Financing shall deliver to the
Davel Lenders the stock certificates, officers' certificates, promissory notes
and other closing documents listed on Schedule 2.3(B) hereto, and to the Davel
Lenders and the PhoneTel Lenders, the legal opinions, addressed to the Lenders,
referred to in the Commitment Letter, (iii) the PhoneTel Lenders shall deliver
to PhoneTel the promissory notes, instruments of assignment and other closing
documents listed on Schedule 2.3(C) hereto and (iv) PhoneTel shall deliver to
the PhoneTel Lenders the stock certificates, officers' certificates, promissory
notes and other closing documents listed on Schedule 2.3(D) hereto, and to the
PhoneTel Lenders and the Davel Lenders, the legal opinions, addressed to the
Lenders, referred to in the Commitment Letter.
(b) In the event that either Merger has not become effective
by 12:00 midnight (Eastern time) on the day of the Effective Time of the
Exchanges, the Davel Debt for Equity Exchange and the PhoneTel Debt for Equity
Exchange may, by notice given to Davel and PhoneTel by the Davel Syndicate Agent
and/or the PhoneTel Syndicate Agent, be rescinded and, in such case, such Debt
For Equity Exchanges shall be without any force or effect and the Exchanged
Davel Loans and the Exchanged PhoneTel Loans shall be reinstated. In the event
of
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any such rescission: (i) Davel Financing shall promptly redeliver to the Davel
Lenders the promissory notes and instruments of assignment relating to the
Exchanged Davel Loans, (ii) the Davel Lenders shall promptly surrender to Davel
Financing the stock certificates representing the Davel Debt Exchange Shares,
(iii) PhoneTel shall promptly redeliver to the PhoneTel Lenders the promissory
notes and instruments of assignment relating to the Exchanged PhoneTel Loans and
(iv) the PhoneTel Lenders shall promptly surrender to PhoneTel the stock
certificates representing the PhoneTel Debt Exchange Shares.
Section 2.4 Further Assurances. From time to time following the Davel
Effective Time and the PhoneTel Effective Time, upon the reasonable request of
the Lenders, each of Davel, Davel Financing and/or PhoneTel, as applicable,
shall execute and deliver, or cause to be executed and delivered, to the Lenders
such other instruments and take such other action as may be reasonably necessary
to more effectively vest in the Lenders and the Lenders put in possession of the
shares of Davel Common Stock which the Lenders are entitled to receive pursuant
to the transactions contemplated by this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES.
Section 3.1 Representations and Warranties of the Davel Parties.
The Davel Parties, jointly and severally, represent and
warrant to the other parties hereto, and acknowledge that the other parties
hereto are relying on such representations and warranties in entering into this
Agreement and completing the transactions contemplated herein notwithstanding
any investigation made by or on behalf of any of such other parties, that:
(a) Organization and Standing. Davel and D Sub is each duly
incorporated, validly existing and in good standing as a domestic corporation
under the laws of the State of Delaware, and has all requisite corporate power
and authority to own its properties and assets and to carry on its business as
it is at such time being conducted. Davel Financing is duly formed, validly
existing and in good standing as a domestic limited liability company under the
laws of the State of Delaware and has all requisite limited liability company
power and authority to own its properties and assets and to carry on its
business as it is being conducted on the date of this Agreement.
(b) Authorization. Davel and D Sub each has full corporate
power and authority, and has taken all corporate action necessary, to execute
and deliver this Agreement and to fulfill its obligations hereunder and to
consummate the transactions contemplated hereby. Davel Financing has full
limited liability company power and authority, and has taken all action
necessary, to execute and deliver this Agreement and to fulfill its obligations
hereunder and to consummate the transactions contemplated hereby.
(c) No Violation. Neither the execution and delivery of this
Agreement nor the consummation by the parties of the transactions contemplated
hereby will (i) violate any provision of the organizational documents of any
Davel Party, (ii) violate, conflict with or result in a default (or any event
that, with notice or lapse of time or both, would constitute a default)
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under, or give rise to any right of termination, cancellation or acceleration
under, any of the terms, conditions or provisions of or result in the creation
of any encumbrance upon the capital stock or the assets of Davel or any of its
subsidiaries (including, without limitation, Davel Financing) under any
indenture, note, mortgage, other evidence of indebtedness, guarantee, license,
agreement, lease or other contract or instrument or obligation to which Davel or
any subsidiary thereof (including, without limitation, Davel Financing) is a
party or by which Davel or any subsidiary thereof (including, without
limitation, Davel Financing) or any of its assets may be bound, or (iii) violate
any order, injunction, decree, statute, rule or regulation applicable to Davel
or any subsidiary thereof (including, without limitation, Davel Financing) and
in the case of clauses (ii) and (iii), which would have a Davel Material Adverse
Effect).
(d) Enforceability. This Agreement has been duly executed and
delivered by each of Davel, Davel Financing and D Sub and constitutes such
party's legal, valid and binding obligation, enforceable against such party in
accordance with its terms (except to the extent that the enforceability hereof
may be limited by bankruptcy, insolvency or other similar laws of general
applicability affecting the enforcement of creditor's rights generally and by a
court's discretion in relation to equitable remedies).
(e) Governmental Approvals. Except as set forth in Schedule
3.1(E) hereto, all approvals, authorizations or other actions by, or filings
with, any governmental authority necessary for the validity or enforceability of
the obligations of the Davel Parties and P Sub under the Transaction Agreements
have been obtained, and neither the execution and delivery of this Agreement nor
the consummation by the parties of the transactions contemplated hereby will
require any filing with, or the obtaining of any permit, authorization, consent
or approval of, any governmental or regulatory authority whether within or
outside the United States.
(f) Capitalization.
(i) The (A) authorized and (B) issued fully
diluted capital stock of Davel as of the
date of execution hereof is as set forth in
Schedule 3.1(F)(1) hereto.
(ii) The (A) authorized and (B) issued fully
diluted capital stock of Davel immediately
after the Davel Effective Time will be as
set forth in Schedule 3.1(F)(2) hereto.
Immediately after the Davel Effective Time,
the Converted Davel Debt Exchange Shares
will represent 93% of the outstanding Davel
Common Stock calculated on a fully diluted
basis (taking into account the intended
reservation of Davel Common Stock for
issuance in respect of stock options and
warrants of Davel from and after the
Effective Time of the Exchanges). Schedule
3.1(F)(2) also sets forth a schedule of any
stock options, warrants or other rights
exercisable for the purchase of shares of
capital stock of Davel that will be
outstanding immediately following the Davel
Effective Time.
10
(iii) The (A) authorized and (B) issued fully
diluted capital stock of Davel immediately
after the PhoneTel Effective Time will be as
set forth in Schedule 3.1(F)(3) hereto.
Immediately after the PhoneTel Effective
Time, the Converted Davel Debt Exchange
Shares will represent 59.06% of the
outstanding Davel Common Stock calculated on
a fully diluted basis (taking into account
the intended reservation of Davel Common
Stock for issuance in respect of stock
options and warrants of Davel from and after
the Effective Time of the Exchanges) and the
Converted PhoneTel Debt Exchange Shares will
represent 31.76% of the outstanding Davel
Common Stock calculated on a fully diluted
basis (taking into account the intended
reservation of Davel Common Stock for
issuance in respect of stock options and
warrants of Davel from and after the
Effective Time of the Exchanges). Schedule
3.1(F)(3) also sets forth a schedule of any
stock options, warrants or other rights
exercisable for the purchase of shares of
capital stock of Davel that will be
outstanding immediately following the
PhoneTel Effective Time (including the
exercise price thereof).
(iv) As of (A) the date of this Agreement and (B)
immediately following each of (1) the Davel
Effective Time and (2) the PhoneTel
Effective Time, all of the outstanding
shares of Davel's capital stock are (or will
be) duly and validly authorized and issued,
fully paid and nonassessable, have been (or
will have been) issued in compliance with
all federal and state securities laws, and
were not issued (and will not have been
issued) in violation of or subject to any
preemptive rights.
(v) Except as otherwise disclosed or
contemplated in any of the Transaction
Agreements or as disclosed in Schedule
3.1(F)(5) hereto, as of (A) the date of this
Agreement and (B) immediately following each
of (1) the Debt For Equity Exchanges and (2)
the Mergers, neither Davel nor any Davel
Subsidiary, and, to the best knowledge of
Davel (without investigation other than a
review of publicly available information),
no other person holding more than 5% of the
Davel Common Stock (determined without
giving effect to the Transactions), is or
will be a party to any put option, call
option, voting trust, voting agreement,
irrevocable proxy or agreement providing for
tag-along rights, drag-along rights, rights
of first offer or refusal, registration
rights or any other rights relating to the
sale, purchase, transfer or other
acquisition or disposition or voting of
shares of Davel Common Stock.
11
(vi) The authorized and issued fully diluted D
Sub Common Stock immediately prior to the
Davel Debt for Equity Exchange will be as
set forth in Schedule 3.1(F)(6) hereto, all
of which will be held by Davel Financing.
All of such D Sub Common Stock will be duly
and validly authorized and issued, fully
paid and nonassessable, will have been
issued in compliance with all federal and
state securities laws, and will not have
been issued in violation of or subject to
any preemptive rights.
(g) Litigation. There is no action, suit, arbitration,
inquiry, proceedings or investigation by or before any authority of any nature,
civil, criminal, regulatory or otherwise, pending or to the knowledge of the
Davel Parties, threatened against or involving any Davel Party, P Sub or any
Davel Subsidiary in connection with the Debt for Equity Exchanges or the Mergers
or the execution or performance of any of the Transaction Agreements.
(h) Accuracy of Representations and Warranties. All
representations and warranties of any Davel Party set forth in the Merger
Agreement are accurate, true and correct in all material respects as of the date
hereof (unless another date is specified in the Merger Agreement, in which case
the applicable representations and warranties were true and correct as of such
other date).
(i) Disclosure Documents.
(A) The portions of the Registration Statement based
on information provided by Davel and, to the best
knowledge of Davel, all other portions of the
Registration Statement, will not, at the time such
Registration Statement is filed with the Securities
and Exchange Commission and 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, and it will comply as to form in all
material respects with the requirements of the
Securities Act.
(B) The portions of the Combined Proxy Statement
based on information provided by Davel and, to the
best knowledge of Davel, all other portions of the
Combined Proxy Statement, will not, at the date it is
first mailed to the stockholders of PhoneTel and
Davel, respectively, and at the time of each meeting
of such stockholders relating to the Mergers, 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, and it will comply as to form in all
material respects with the requirements of the
Exchange Act.
12
(j) Anti-Takeover Provisions. No takeover statute or
applicable anti-takeover provision in Davel's Certificate of Incorporation or By
Laws is, or at the Davel Effective Time and the PhoneTel Effective Time will be,
applicable to the Debt for Equity Exchanges, the Mergers or any of the other
transactions contemplated by the Transaction Agreements. Davel does not have and
at the Davel Effective Time and the PhoneTel Effective Time will not have, in
effect any "poison pill" or "shareholders rights plan".
(k) Certain Fees. Except as contemplated by the Commitment
Letter or as set forth in Schedule 3.1(K), no Davel Party nor P Sub nor any of
their respective officers, directors or employees has employed any broker or
finder or incurred any liability for any brokerage fees or commissions or
finders' fees in connection with the Debt for Equity Exchanges, the Mergers or
any of the other transactions contemplated by the Transaction Agreements.
Section 3.2 Representations and Warranties of the PhoneTel Parties.
The PhoneTel Parties, jointly and severally, represent and
warrant to the other parties hereto, and acknowledge that the other parties
hereto are relying on such representations and warranties in entering into this
Agreement and completing the transactions contemplated herein notwithstanding
any investigation made by or on behalf of any of such other parties, that:
(a) Organization and Standing. PhoneTel is duly incorporated,
validly existing and in good standing as a domestic corporation under the laws
of the State of Ohio, and has all requisite corporate power and authority to own
its properties and assets and to carry on its business as it is being conducted
on the date of this Agreement. Cherokee is duly incorporated, validly existing
and in good standing as a domestic corporation under the laws of the State of
Texas, and has all requisite corporate power and authority to own its properties
and assets and to carry on its business as it is being conducted on the date of
this Agreement.
(b) Authorization. PhoneTel and Cherokee each has full
corporate power and authority, and has taken all corporate action necessary, to
execute and deliver this Agreement and to fulfill its obligations hereunder and
to consummate the transactions contemplated hereby.
(c) No Violation. Neither the execution and delivery of this
Agreement nor the consummation by the parties of the transactions contemplated
hereby will (i) violate any provision of any PhoneTel Party's organizational
documents, (ii) violate, conflict with or result in a default (or any event
that, with notice or lapse of time or both, would constitute a default) under,
or give rise to any right of termination, cancellation or acceleration under,
any of the terms, conditions or provisions of or result in the creation of any
encumbrance upon the capital stock or the assets of PhoneTel or any of its
subsidiaries under any indenture, note, mortgage, other evidence of
indebtedness, guarantee, license, agreement, lease or other contract or
instrument or obligation to which PhoneTel or any subsidiary thereof is a party
or by which PhoneTel or any subsidiary thereof or any of its assets may be
bound, or (iii) violate any order, injunction, decree, statute, rule or
regulation applicable to PhoneTel or any subsidiary thereof, and in the case of
clauses (ii) and (iii), which would have a PhoneTel Material Adverse Effect.
13
(d) Enforceability. This Agreement has been duly executed and
delivered by each of PhoneTel and Cherokee and constitutes such party's legal,
valid and binding obligation, enforceable against such party in accordance with
its terms (except to the extent that the enforceability hereof may be limited by
bankruptcy, insolvency or other similar laws of general applicability affecting
the enforcement of creditor's rights generally and by a court's discretion in
relation to equitable remedies).
(e) Governmental Approvals. Except as set forth in Schedule
3.2(E) hereto, all approvals, authorizations or other actions by, or filings
with, any governmental authority necessary for the validity or enforceability of
the obligations of the PhoneTel Parties under the Transaction Agreements have
been obtained, and neither the execution and delivery of this Agreement nor the
consummation by the parties of the transactions contemplated hereby will require
any filing with, or the obtaining of any permit, authorization, consent or
approval of, any governmental or regulatory authority whether within or outside
the United States.
(f) Capitalization.
(i) The authorized and issued fully diluted
capital stock of PhoneTel as of the date of
execution hereof is as set forth in Schedule
3.2(F)(1) hereto.
(ii) The authorized and issued fully diluted
capital stock of PhoneTel immediately after
giving effect to the PhoneTel Debt for
Equity Exchange but immediately prior to the
PhoneTel Effective Time will be as set forth
in Schedule 3.2(F)(2) hereto.
(iii) As of (A) the date of this Agreement and (B)
immediately after the PhoneTel Debt for
Equity Exchange (but before the PhoneTel
Effective Time), all of the outstanding
shares of PhoneTel's capital stock are (or
will be) duly and validly authorized and
issued, fully paid and nonassessable, have
been (or will have been) issued in
compliance with all federal and state
securities laws, and were not issued (and
will not have been issued) in violation of
or subject to any preemptive rights.
(iv) Except as otherwise disclosed or
contemplated in any of the Transaction
Agreements or as disclosed in Schedule
3.2(F)(4) hereto, as of (A) the date of this
Agreement and (B) immediately after the
PhoneTel Debt For Equity Exchange neither
PhoneTel nor any PhoneTel subsidiary, and,
to the best knowledge of PhoneTel (without
investigation other than a review of
publicly available information), no other
person holding more than 5% of the PhoneTel
Common Stock (determined without giving
effect to the Transactions), is or will be a
party to any put option, call option, voting
trust, voting agreement, irrevocable proxy
or agreement providing for tag-along rights,
drag-along rights, rights of first offer or
14
refusal, registration rights or any other
rights relating to the sale, purchase,
transfer or other acquisition or disposition
or voting of shares of PhoneTel Common
Stock.
(g) Litigation. There is no action, suit, arbitration,
inquiry, proceedings or investigation by or before any authority of any nature,
civil, criminal, regulatory or otherwise, pending or to the knowledge of the
PhoneTel Parties, threatened against or involving any PhoneTel Party or any
PhoneTel Subsidiary in connection with any of the Transactions or the execution
or performance of any of the Transaction Agreements.
(h) Accuracy of Representations and Warranties. All
representations and warranties of any PhoneTel Party set forth in the Merger
Agreement are accurate, true and correct in all material respects as of the date
hereof (unless another date is specified in the Merger Agreement, in which case
the applicable representations and warranties were true and correct as of such
other date).
(i) Disclosure Documents.
(A) The portions of the Registration Statement based
on information provided by PhoneTel and, to the best
knowledge of PhoneTel, all other portions of the
Registration Statement, will not, at the time such
Registration Statement is filed with the Securities
and Exchange Commission and 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, and it will comply as to form in all
material respects with the requirements of the
Securities Act.
(B) The portions of the Combined Proxy Statement
based on information provided by PhoneTel and, to the
best knowledge of PhoneTel, all other portions of the
Combined Proxy Statement, will not, at the date it is
first mailed to the stockholders of PhoneTel and
Davel, respectively, and at the time of each meeting
of such stockholders relating to the Mergers, 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, and it will comply as to form in all
material respects with the requirements of the
Exchange Act.
(j) Anti-Takeover Provisions. No takeover statute or
applicable anti-takeover provision in PhoneTel's Certificate of Incorporation or
By Laws is, or at the Effective Time of the Exchanges will be, applicable to the
PhoneTel Debt for Equity Exchange or the other transactions contemplated by this
Agreement. As of the date hereof, PhoneTel has not, and at the Effective Time of
the Exchanges will not have, adopted any "poison pill" or "shareholders rights
plan".
15
(k) Certain Fees. Except as contemplated by the Commitment
Letter or as set forth in Schedule 3.2(K), no PhoneTel Party nor any of their
respective officers, directors or employees has employed any broker or finder or
incurred any liability for any brokerage fees or commissions or finders' fees in
connection with Debt for Equity Exchanges, the Mergers or any of the other
transactions contemplated by the Transaction Agreements.
Section 3.3 Representations and Warranties of the Davel Lenders.
Each of the Davel Lenders, by its signature hereto, severally
but not jointly and each as to itself, represents and warrants to the other
parties hereto that:
(a) Organization. Such Davel Lender is duly organized, validly
existing, and in good standing under the laws of the jurisdiction in which it is
organized.
(b) Authorization. Such Davel Lender has full corporate or
limited liability company or limited partnership power and authority, as the
case may be, and has taken all action necessary, to execute and deliver this
Agreement and to fulfill its obligations hereunder and to consummate the
transactions contemplated hereby.
(c) No Violation. The making and performance of this Agreement
by such Davel Lender does not and will not violate any law or regulation of the
jurisdiction under which it exists, any other law or regulation applicable to
it, any other agreement to which it is a party or by which it is bound or to
which any of its assets are subject, or any provision of its organizational
documents.
(d) Enforceability. This Agreement has been duly executed and
delivered by such Davel Lender and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms (except to the
extent that the enforceability hereof may be limited by bankruptcy, insolvency
or other similar laws of general applicability affecting the enforcement of
creditor's rights generally and by a court's discretion in relation to equitable
remedies).
(e) Governmental Approvals. Except as set forth in Schedule
3.3(E) hereto, all approvals, authorizations or other actions by, or filings
with, any governmental authority necessary for the validity or enforceability of
the obligations of such Davel Lender under this Agreement have been obtained.
(f) Ownership of the Davel Loans. Except as disclosed in
Schedule 3.3(F) hereto, as of the date of this Agreement such Davel Lender is
the sole legal owner of the Davel Loans to be exchanged by it in the Davel Debt
for Equity Exchange. Between the date hereof and the Effective Time of the
Exchanges, such Davel Lender will not transfer any such Davel Loan to any other
person unless the transferee has first agreed in a form reasonably satisfactory
to Davel to be bound by the obligations of such Davel Lender under this
Agreement with respect to such transferred loans.
(g) Certain Fees. Neither such Davel Lender nor any of its
officers, directors or employees has employed any broker or finder or incurred
any liability for any
16
brokerage fees or commissions or finders' fees in connection with the Davel Debt
for Equity Exchange or any of the other transactions contemplated by this
Agreement.
(h) Investment Intent. Subject to the contemplated conversion
of the Davel Debt Exchange Shares into shares of Davel Common Stock pursuant to
the Davel Merger, such Davel Lender will be acquiring such Davel Debt Exchange
Shares for investment only (whether for its own account or for one or more
separate accounts maintained by it for the account of one or more pension or
trust funds) and not with a view to the distribution thereof.
(i) Accredited Investor. Each Davel Lender is an accredited
investor within the meaning of Rule 501 of the Securities Act.
Section 3.4 Representations and Warranties of the PhoneTel Lenders.
Each of the PhoneTel Lenders, by its signature hereto,
severally but not jointly and each as to itself, represents and warrants to the
other parties hereto that:
(a) Organization. Such PhoneTel Lender is duly organized,
validly existing, and in good standing under the laws of the jurisdiction in
which it is organized.
(b) Authorization. Such PhoneTel Lender has full corporate or
limited liability company or limited partnership power and authority, as the
case may be, and has taken all action necessary, to execute and deliver this
Agreement and to fulfill its obligations hereunder and to consummate the
transactions contemplated hereby.
(c) No Violation. The making and performance of this Agreement
by such PhoneTel Lender does not and will not violate any law or regulation of
the jurisdiction under which it exists, any other law or regulation applicable
to it, any other agreement to which it is a party or by which it is bound or to
which any of its assets are subject, or any provision of its organizational
documents.
(d) Enforceability. This Agreement has been duly executed and
delivered by such PhoneTel Lender and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms (except to the
extent that the enforceability hereof may be limited by bankruptcy, insolvency
or other similar laws of general applicability affecting the enforcement of
creditor's rights generally and by a court's discretion in relation to equitable
remedies).
(e) Governmental Approvals. Except as set forth in Schedule
3.4(E) hereto, all approvals, authorizations or other actions by, or filings
with, any governmental authority necessary for the validity or enforceability of
the obligations of such PhoneTel Lender under this Agreement have been obtained.
(f) Ownership of the PhoneTel Loans. Except as disclosed in
Schedule 3.4(F) hereto, as of the date of this Agreement, such PhoneTel Lender
is the sole legal owner of the PhoneTel Loans to be exchanged by it in the
PhoneTel Debt for Equity Exchange. Between the date hereof and the Effective
Time of the Exchanges, such PhoneTel Lender shall not transfer any such PhoneTel
Loan to any other person unless the transferee has first agreed in a form
17
reasonably satisfactory to PhoneTel to be bound by the obligations of such
PhoneTel Lender under this Agreement with respect to such transferred loans.
(g) Certain Fees. Neither such PhoneTel Lender nor any of its
officers, directors or employees has employed any broker or finder or incurred
any liability for any brokerage fees or commissions or finders' fees in
connection with the PhoneTel Debt for Equity Exchange or any of the other
transactions contemplated by this Agreement.
(h) Investment Intent. Subject to the contemplated conversion
of the PhoneTel Debt Exchange Shares into shares of Davel Common Stock pursuant
to the Davel Merger, such PhoneTel Lender will be acquiring such PhoneTel Debt
Exchange Shares for investment only (whether for its own account or for one or
more separate accounts maintained by it for the account of one or more pension
or trust funds) and not with a view to the distribution thereof.
(i) Accredited Investor. Each PhoneTel Lender is an accredited
investor within the meaning of Rule 501 of the Securities Act.
ARTICLE IV
COVENANTS
Section 4.1 Davel Covenants. Unless otherwise authorized in writing by
the Davel Syndicate Agent with the Consent of the Davel Lenders and by the
PhoneTel Syndicate Agent with the Consent of the PhoneTel Lenders, and except as
otherwise expressly contemplated in this Agreement:
(a) Each Davel Party shall use its best efforts to consummate
the Mergers and to cause each of the conditions precedent to the obligations of
the Lenders to effect the Debt for Equity Exchanges to be met, and shall keep
the Lenders fully informed of all matters relating to the Mergers.
(b) Davel shall, pursuant to the provisions of the Securities
Act, use its reasonable best efforts to cause the Registration Statement to
become effective prior to the closing of the Debt for Equity Exchanges.
(c) In the event that any shares of Davel Common Stock are or
become listed on any securities exchange or automated quotation system, Davel
shall promptly cause the Converted PhoneTel Debt Exchange Shares and the
Converted Davel Debt Exchange Shares to be so listed.
(d) Each Davel Party shall use its reasonable best efforts to
obtain any other governmental approvals and contractual consents necessary or
required in order to complete the Davel Debt for Equity Exchange, the Mergers
and the other transactions contemplated by the Transaction Agreements.
(e) Davel shall promptly notify the Davel Syndicate Agent and
the PhoneTel Syndicate Agent of:
18
(i) any notice or other communication received
by any Davel Party or P Sub (other than a
communication relating to a consent
identified in the Davel Disclosure Letter
(as defined in the Merger Agreement)) from
any person alleging that the consent of such
person is or may be required in connection
with the Debt for Equity Exchanges, the
Mergers or any of the other transactions
contemplated by the Transaction Agreements;
(ii) any notice or other communication received
by any Davel Party or P Sub (other than a
communication relating to a consent
identified in the Davel Disclosure Letter
(as defined in the Merger Agreement)) from
any Governmental Entity in connection with
the Debt for Equity Exchanges, the Mergers
or any of the other transactions
contemplated by the Transaction Agreements;
(iii) any actions, suits, claims, investigations
or proceedings commenced or, to the
knowledge of any Davel Party, threatened
against, relating to or involving or
otherwise affecting any Davel Party or any
subsidiary thereof that relates to the
consummation of the Debt for Equity
Exchanges, the Mergers or any of the other
transactions contemplated by the Transaction
Agreements; and
(iv) any action, event or occurrence that would
constitute a breach of any representation,
warranty, covenant or agreement of any Davel
Party set forth in this Agreement, the
Commitment Letter, the Merger Agreement or
any other Transaction Agreement.
(f) No Davel Party shall agree to any material amendment of
the Merger Agreement without the prior written authorization of the Davel
Syndicate Agent with the Consent of the Davel Lenders and the PhoneTel Syndicate
Agent with the Consent of the PhoneTel Lenders.
(g) The Davel Parties shall consult with the Davel Syndicate
Agent and the PhoneTel Syndicate Agent before issuing any press release or
making any public statement with respect to this Agreement (or any other
transaction contemplated hereby, including, without limitation, the Mergers)
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.
(h) Each Davel Party shall use its reasonable best efforts to
obtain all approvals, authorizations or other actions by any governmental
authority, and shall make all filings, necessary for the validity or
enforceability of its obligations under this Agreement.
19
(i) Each Davel Party shall use its best efforts to obtain all
contractual approvals necessary to enable it to comply with its obligations
under this Agreement, the Merger Agreement and the other Transaction Agreements.
Section 4.2 PhoneTel Covenants. Unless otherwise authorized in writing
by the Davel Syndicate Agent with the Consent of the Davel Lenders and by the
PhoneTel Syndicate Agent with the Consent of the PhoneTel Lenders, and except as
otherwise expressly contemplated in this Agreement:
(a) Each PhoneTel Party shall use its best efforts to
consummate the PhoneTel Merger and to cause each of the conditions precedent to
the obligations of the PhoneTel Lenders to effect the PhoneTel Debt for Equity
Exchanges to be met, and shall keep the Lenders fully informed of all matters
relating to the PhoneTel Merger.
(b) Each PhoneTel Party shall use its reasonable best efforts
to obtain any other governmental approvals and contractual consents necessary or
required in order to complete the PhoneTel Debt for Equity Exchange, the
PhoneTel Merger and the other transactions contemplated by the Transaction
Agreements.
(c) PhoneTel shall promptly notify the Davel Syndicate Agent
and the PhoneTel Syndicate Agent of:
(i) any notice or other communication received
by any PhoneTel Party (other than a
communication relating to a consent
identified in the PhoneTel Disclosure Letter
(as defined in the Merger Agreement)) from
any person alleging that the consent of such
person is or may be required in connection
with the Debt for Equity Exchanges, the
Mergers or any of the other transactions
contemplated by the Transaction Agreements;
(ii) any notice or other communication received
by any PhoneTel Party (other than a
communication relating to a consent
identified in the PhoneTel Disclosure Letter
(as defined in the Merger Agreement)) from
any Governmental Entity in connection with
the Debt for Equity Exchanges, the Mergers
or any of the other transactions
contemplated by the Transaction Agreements;
(iii) any actions, suits, claims, investigations
or proceedings commenced or, to the
knowledge of any PhoneTel Party, threatened
against, relating to or involving or
otherwise affecting any PhoneTel Party or
any subsidiary thereof that relates to the
consummation of the Debt for Equity
Exchanges, the Mergers or any of the other
transactions contemplated by the Transaction
Agreements; and
(iv) any action, event or occurrence that would
constitute a breach of any representation,
warranty, covenant or agreement of any
20
PhoneTel Party set forth in this Agreement,
the Commitment Letter, the Merger Agreement
or any other Transaction Agreement.
(d) No PhoneTel Party shall agree to any material amendment of
the Merger Agreement without the prior written authorization of the Davel
Syndicate Agent with the Consent of the Davel Lenders and the PhoneTel Syndicate
Agent with the Consent of the PhoneTel Lenders.
(e) The PhoneTel Parties shall consult with the Davel
Syndicate Agent and the PhoneTel Syndicate Agent before issuing any press
release or making any public statement with respect to this Agreement (or any
other transaction contemplated hereby, including, without limitation, the
Mergers) 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.
(f) Each PhoneTel Party shall use its reasonable best efforts
to obtain all approvals, authorizations or other actions by any governmental
authority, and shall make all filings, necessary for the validity or
enforceability of its obligations under this Agreement.
(g) Each PhoneTel Party shall use its best efforts to obtain
all contractual approvals necessary to enable it to comply with its obligations
under this Agreement, the Merger Agreement and the other Transaction Agreements.
ARTICLE V
CONDITIONS TO CLOSING
Section 5.1 Conditions to the Obligations of the Lenders. The
obligations of each of the Lenders to consummate the Debt for Equity Exchanges
are subject to the satisfaction or waiver of the following conditions:
(a) The representations and warranties of each Davel Party and
PhoneTel Party contained in this Agreement, the Commitment Letter, the Merger
Agreement and each other Transaction Agreement shall be true and correct in all
material respects as of the Effective Time of the Exchanges as if made on and as
of such date (unless another date is specified in the applicable agreement, in
which case the applicable representations and warranties shall have been true
and correct as of such other date).
(b) Each Davel Party and PhoneTel Party 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
Davel Effective Time, and the Certificate of Incorporation of PhoneTel will have
been amended to increase the authorized capital stock of PhoneTel as set forth
in Schedule 3.2(F)(2).
(c) No fact, circumstance or event shall have occurred between
January 1, 2002 and the Effective Time of the Exchanges that has had or would
reasonably be expected to have either a Davel Material Adverse Effect or a
PhoneTel Material Adverse Effect.
21
(d) A certificate of an authorized officer of each of Davel
and PhoneTel shall have been delivered to both the Davel Syndicate Agent and the
PhoneTel Syndicate Agent stating that the conditions set forth in Section
5.1(a), (b) and (c) above have been met.
(e) All material applicable governmental approvals and
contractual consents shall have been obtained.
(f) Except for the consummation of the Debt for Equity
Exchanges, each of the conditions to the closing of the Mergers set forth in the
Merger Agreement shall have been met, provided that any waiver of any condition
to closing of the Mergers by one or more of the parties to the Merger Agreement
shall not be deemed to constitute the meeting of such condition for the purposes
of this Agreement unless such waiver has been authorized in writing by each of
(a) the Davel Syndicate Agent with the Consent of the Davel Lenders and (b) the
PhoneTel Syndicate Agent with the Consent of the PhoneTel Lenders.
(g) No litigation, arbitration, or adversarial proceeding
shall be pending or threatened against any party to this Agreement or any other
Transaction Agreement seeking to enjoin or challenge either of the Mergers,
either of the Debt for Equity Exchanges or any other transaction contemplated
hereby or thereby.
(h) The Registration Statement shall have become effective and
shall not be subject to any stop order, and any state securities laws filings or
authorizations required in connection with the issuance of the Converted Davel
Debt Exchange Shares or the Converted PhoneTel Debt Exchange Shares shall have
been made or obtained.
(i) No appraisal rights shall have been asserted by any
stockholder of Davel or PhoneTel in connection with the Mergers, the Debt for
Equity Exchanges or any of the other transactions contemplated by the
Transaction Agreements.
(j) Davel shall have entered into a Registration Rights
Agreement with the Lenders in the form attached hereto as Exhibit B (the
"Registration Rights Agreement").
(k) The Lenders shall have received the legal opinions
referred to in Section 2.3 hereof.
(l) Definitive Agreements effecting the financial
restructuring shall have been executed between the Lenders and Davel, as more
fully contemplated in the Commitment Letter.
Each of the conditions to the obligations of the Lenders to
consummate the Debt for Equity Exchanges may be waived by each of (a) the Davel
Syndicate Agent with the Consent of the Davel Lenders and (b) the PhoneTel
Syndicate Agent with the Consent of the PhoneTel Lenders.
Section 5.2 Conditions to the Obligations of Davel and PhoneTel.
The obligations of the Davel Parties and the PhoneTel Parties
to consummate the Debt for Equity Exchanges are subject to the satisfaction or
waiver of the following conditions:
22
(a) The representations and warranties of the Davel Lenders
and of the PhoneTel Lenders set forth in this Agreement shall be true and
correct in all material respects as of the date of this Agreement and as of the
Closing Date as though made on and as of the Closing Date.
(b) No litigation, arbitration, or adversarial proceeding is
pending against it or, to its knowledge, threatened against it, seeking to
enjoin or challenge the Mergers, the Davel Debt for Equity Exchange, the
PhoneTel Debt for Equity Exchange or any other transaction contemplated hereby,
and no court or governmental entity of competent jurisdiction shall have
enacted, issued, promulgated, enforced or entered any law, statute, ordinance,
rule, regulation, judgment, decree, injunction or other order (whether
temporary, preliminary or permanent) that is in effect and restrains, enjoins or
otherwise prohibits consummation of the Mergers, the Davel Debt for Equity
Exchange, the PhoneTel Debt for Equity Exchange or the other transactions
contemplated hereby, and no proceeding shall have been commenced therefor.
(c) Except for the consummation of the Debt for Equity
Exchanges, each of the conditions to the closing of the Mergers set forth in the
Merger Agreement shall have been met or waived.
(d) The Registration Statement shall have become effective and
shall not be subject to any stop order and any state securities laws filings or
authorizations required in connection with the issuance of the Converted
PhoneTel Debt Exchange Shares and the Converted Davel Debt Exchange Shares shall
be effective.
ARTICLE VI
MISCELLANEOUS.
Section 6.1 Notices.
All notices and communications between the parties hereto
shall be given or confirmed in writing, delivered to the address indicated below
(or such replacement address given by like notice or communication by the
applicable party), and shall be effective when received.
If to Davel, Davel Financing or D Sub: Davel Communications, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: R. ▇▇▇▇▇ ▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
23
If to PhoneTel or Cherokee: PhoneTel Technologies, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
with a copy to: ▇▇▇▇, ▇▇▇▇▇▇ & Parks LLP
▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇
Attention: F. ▇▇▇▇▇▇ ▇'▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Davel Lenders: c/o PNC Bank N.A.
Davel Syndicate Agent
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇-▇▇▇▇-▇▇-▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation: (▇▇▇) ▇▇▇-▇▇▇▇
If to the PhoneTel Lenders: c/o Foothill Capital Corporation
PhoneTel Syndicate Agent
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation: (▇▇▇) ▇▇▇-▇▇▇▇
Section 6.2 Entire Agreement; Amendments; Waiver.
This Agreement, together with the other Transaction Agreements
constitute the entire agreement of the parties hereto and thereto with respect
to the subject matter hereof and thereof and supersede all prior or
contemporaneous negotiations, promises, covenants, agreements, or
representations (including, without limitation, the Letter of Intent). This
Agreement may not be amended, modified or supplemented, except by an instrument
in writing executed by each of the parties hereto. Any provision of this
Agreement may be waived (either generally or in a particular instance and either
retrospectively or prospectively) if, and only if, such waiver is in writing and
signed by each party against whom the waiver is to be effective. No failure or
delay by any party in exercising any right, power or privilege under this
Agreement shall operate as a waiver of such right, power or privilege nor shall
any single or partial exercise of any such right, power or privilege preclude
any other or further exercise of such right, power or privilege or the exercise
of any other right, power or privilege.
24
Section 6.3 No Relationship.
Nothing contained in this Agreement shall establish any
fiduciary, partnership, joint venture, or similar relationship between or among
the parties hereto.
Section 6.4 Successors and Assigns; Survival.
The representations and warranties contained herein shall
survive the execution of this Agreement and the transactions contemplated
hereby. The terms of this Agreement shall be binding upon, and shall inure to
the benefit of each of the parties hereto and their respective successors and
permitted assigns.
Section 6.5 Termination.
The rights and obligations of the parties hereunder shall
terminate upon any termination of the Merger Agreement. Notwithstanding the
foregoing, no such termination of this Agreement shall affect any party's rights
in respect of any breach by any other party of any provision hereof occurring
prior to such termination.
Section 6.6 Expenses.
(a) Davel and PhoneTel, jointly and severally, shall pay all
of the reasonable expenses, including, without limitation, reasonable attorneys
fees and expenses, incurred by the Davel Syndicate Agent in connection with the
preparation, review, negotiation, execution and delivery of this Agreement and
the other Transaction Agreements and the consummation of the transactions
contemplated herein and therein, whether or not any of such transactions fail to
be consummated or are rescinded. Similarly, Davel and PhoneTel, jointly and
severally, shall pay all of the reasonable expenses, including, without
limitation, reasonable attorneys fees and expenses, incurred by the PhoneTel
Syndicate Agent in connection with the preparation, review, negotiation,
execution and delivery of this Agreement and the other Transaction Agreements
and the consummation of the transactions contemplated herein and therein,
whether or not any of such transactions fail to be consummated or are rescinded.
(b) Except as provided in Subsection (a) above or elsewhere in
any of the Transaction Agreements, each party to this Agreement shall bear its
own expenses incurred in connection with the preparation, review, negotiation,
execution and delivery of this Agreement and the other Transaction Agreements
and the consummation of the transactions contemplated herein and therein.
Section 6.7 Counterpart and Telecopier Execution.
This Agreement may be executed in any number of counterparts,
each of which, when so executed and delivered, shall be an original, but all of
which together shall constitute one agreement binding on the parties hereto.
Transmission by telecopier of an executed counterpart of this Agreement shall be
deemed to constitute due and sufficient delivery of such counterpart, provided
that the party so delivering such counterpart shall, promptly after such
delivery, deliver the original of such counterpart to the other parties hereto.
25
Section 6.8 Governing Law; Submission to Jurisdiction.
This Agreement shall be governed by, and construed in
accordance with, the laws of the State of
New York including, without
limitation, Title 14, Section 5-1401 of the
New York General Obligations Law,
without giving effect to any choice of law or conflict of law rules or
provisions (whether of the State of
New York or of any other jurisdiction) that
would cause the application of the laws of any jurisdiction other than the State
of
New York. Each party hereto irrevocably submits to the non-exclusive
jurisdiction of any state or federal court located in the Borough of Manhattan,
New York City,
New York for the purposes of any suit, action or other proceeding
arising out of or to enforce, interpret, or construe any provision of this
Agreement.
Section 6.9 TRIAL BY JURY.
EACH PARTY HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR ANY TRANSACTION AND ACKNOWLEDGES THAT THIS WAIVER IS A
MATERIAL INDUCEMENT TO EACH OTHER PARTY ENTERING INTO THIS AGREEMENT.
Section 6.10 Severability.
If any provision of this Agreement is held to be invalid,
illegal or unenforceable in any jurisdiction, that provision shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions of this Agreement; and the invalidity of a particular
provision in a particular jurisdiction shall not invalidate such provision in
any other jurisdiction.
Section 6.11 Captions.
The captions and headings hereunder are for convenience only
and shall not affect the interpretations or construction of this Agreement.
26
IN WITNESS WHEREOF, this
Exchange Agreement has been duly
executed as of the date first above written.
DAVEL COMMUNICATIONS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Authorized Signatory
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
DAVEL FINANCING COMPANY, L.L.C.
By: DAVEL COMMUNICATIONS, INC., its
sole managing member
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Authorized Signatory
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
DF MERGER CORP.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Authorized Signatory
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
PHONETEL TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------------------
Authorized Signatory
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: President and Chief Executive Officer
CHEROKEE COMMUNICATIONS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------------------
Authorized Signatory
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: President and Chief Executive Officer
DAVEL SYNDICATE AGENT: PNC BANK, N.A.
in its capacities as the Davel Syndicate Agent
and as a Davel Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. VP
------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Title: Vice President
DAVEL LENDERS: ARK CLO 2000-1, Limited
By: Patriarch Partners, LLC
Its Collateral Manager
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Signatory
U.S. BANK, NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇ FINANCIAL, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇
Title: Assistant Vice President
BNP PARIBAS
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PRIME INCOME TRUST
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Executive Director
CERBERUS PARTNERS, L.P.
By: Cerberus Associates, L.L.C., as General
Partner
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Managing Member
AMROC INVESTMENTS, LLC
By: /s/ ▇▇▇▇ ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Senior Managing Director
PHONETEL SYNDICATE AGENT: FOOTHILL CAPITAL CORPORATION
in its capacities as the PhoneTel Syndicate
Agent and as a PhoneTel Lender
By: /s/ ▇▇▇ ▇▇▇
----------------------------------------
Name: ▇▇▇ ▇▇▇
Title: Vice President
PHONETEL LENDERS: FOOTHILL PARTNERS III, L.P.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Member
ABLECO FINANCE LLC, as a PhoneTel Lender
and as agent for its affiliate assigns
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: SVP & Chief Credit Officer
Schedule 2.1
List of Exchanged Davel Loans and Davel Debt Exchange Shares(1)
COLUMN A - Exchanged COLUMN B - ▇▇▇▇▇
▇▇▇▇▇ Lender % Davel Loans Debt Exchange Shares
PNC BANK, N.A. 6.57% 11,422,803 65.7408574905
ARK CLO 2000-I, LIMITED 14.09% 24,479,122 140.8829771154
U.S. BANK, NATIONAL ASSOCIATION 6.57% 11,422,803 65.7408574905
▇▇▇▇▇▇ FINANCIAL, INC. 3.73% 6,478,771 37.2868200484
BNP PARIBAS 6.57% 11,422,803 65.7408574905
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ 3.11% 5,398,976 31.0723498577
PRIME INCOME TRUST
CERBERUS PARTNERS, L.P. 46.24% 80,339,185 462.3704949491
AMROC INVESTMENTS, LLC 13.12% 22,790,537 131.1647854315
----------- --------------
173,754,999 1,000
----------- --------------
----------
(1) Amounts in Column A represent the total principal amount of the Davel Loans
(excluding any accrued interest and fees, and all accrued interest and fees as
of the date hereof will be added to Column A as of immediately prior to the
Effective Time of the Exchanges) of $237,254,999 as of February 19, 2002 less
$63,500,000.00. The actual amounts to be assigned to Davel Financing at the
Effective Time of the Exchanges will include any additional capitalized and any
additional accrued interest and fees on all the Davel Loans through the
Effective Time of the Exchanges.
Schedule 2.2
List of Exchanged PhoneTel Loans and PhoneTel Debt Exchange Shares(2)
COLUMN A - Exchanged COLUMN B - PhoneTel
PhoneTel Lender % PhoneTel Loans Debt Exchange Shares
Foothill Capital
Corporation 37.5% $10,563,422.66 42,092,442
Foothill Partners III, L.P. 37.5% $10,563,422.66 42,092,442
Ableco Finance, LLC 25% $ 7,042,281.78 28,061,627
-------------- -----------
$28,169,127.10 112,246,511
-------------- -----------
----------
(2) Amounts in Column A represent the total PhoneTel Loans (including accrued
interest and fees) of $64,669,127.10 as of February 14, 2002 less
$36,500,000.00. The actual amounts to be assigned to PhoneTel at the Effective
Time of the Exchanges will include any additional capitalized and any additional
accrued interest and fees on all the PhoneTel Loans through the Effective Time
of the Exchanges.
Schedule 2.3(A)
List of promissory notes, instruments of assignment and other closing documents
to be delivered by Davel Lenders to Davel Financing
1. Promissory Notes in respect of the Exchanged Davel Loans described in Column
A of Schedule 2.1 hereto.
2. Assignment Agreement in mutually agreeable form, which shall provide for an
assignment of all the capitalized and all the accrued interest, fees and
expenses required to be assigned together with principal amount of the Exchanged
Davel Loans.
Schedule 2.3(B)
List of stock certificates, officers' certificates, promissory notes and other
closing documents to be delivered by Davel Financing to the Davel Lenders
1. The stock certificates with respect to D Sub described in Column B of
Schedule 2.1 hereto and representing the Davel Debt Exchange Shares.
Schedule 2.3(C)
List of promissory notes, instruments of assignment and other closing documents
to be delivered by PhoneTel Lenders to PhoneTel
1. Promissory Notes in respect of the Exchanged PhoneTel Loans described in
Column A of Schedule 2.2 hereto.
2. Assignment Agreement in mutually agreeable form, which shall provide for an
assignment of all the capitalized and all the accrued interest, fees and
expenses required to be assigned together with principal amount of the Exchanged
PhoneTel Loans.
Schedule 2.3(D)
List of stock certificates, officers' certificates, promissory notes and other
closing document to be delivered by PhoneTel to the PhoneTel Lenders
1. The stock certificates with respect to PhoneTel described in Column B of
Schedule 2.2 hereto and representing the PhoneTel Debt Exchange Shares.
Schedule 3.1(E) - Disclosure relating to Davel Governmental Approvals
(a) applicable requirements of the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder and the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder, 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;
(b) the filing of the Certificate of Merger as required by Delaware 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
Transaction;
(d) filings with the SEC with respect to the deregistration of the shares of
PhoneTel Common Stock or the registration of Davel Common Stock in connection
with the Amended Plan (as such term is defined in the Merger Agreement); 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 is necessary for the consummation by Davel of the Transaction.
Schedule 3.1(F)(1) - Authorized and Issued Capital Stock of Davel
as of Date of Execution(3)
Authorized Number of Davel Common Stock Issued Number of Davel Common Stock
50,000,000 12,277,830
Authorized Number of Davel Preferred Stock Issued Number of Davel Preferred Stock
1,000,000 0
----------
(3) The issued number of Davel Common Stock is given on a fully diluted basis
with respect to existing options and warrants but without giving effect to the
intended reservation of Davel Common Stock for issuance in respect of stock
options and warrants of Davel referred to in Section 3.1(f)(ii) of the
Exchange
Agreement.
Schedule 3.1(F)(2) - Authorized and Issued Capital Stock of Davel after the
Davel Effective Time; Schedule of Rights to Purchase Capital Stock of Davel
after the Davel Effective Time(4)
Authorized Number of Davel Common Stock Issued Number of Davel Common Stock
1,000,000,000 392,890,560
Authorized Number of Davel Preferred Stock Issued Number of Davel Preferred Stock
1,000,000 0
Schedule of current options and warrants for Davel Capital Stock attached
hereto.
----------
(4) The issued number of Davel Common Stock is given on a fully diluted basis
with respect to existing options and warrants but without giving effect to the
intended reservation of Davel Common Stock for issuance in respect of stock
options and warrants of Davel referred to in Section 3.1(f)(ii) of the
Exchange
Agreement. The Schedule of Rights to Purchase Capital Stock of Davel after the
Davel Effective Time reflects the position without giving effect to the intended
reservation of Davel Common Stock for issuance in respect of stock options and
warrants of Davel referred to in Section 3.1(f)(ii) of the
Exchange Agreement.
Schedule 3.1(F)(3) - Authorized and Issued Capital Stock of Davel after the
PhoneTel Effective Time; Schedule of Rights to Purchase Capital Stock of Davel
after the PhoneTel Effective Time(5)
Authorized Number of Davel Common Stock Issued Number of Davel Common Stock
1,000,000,000 618,721,250
Authorized Number of Davel Preferred Stock Issued Number of Davel Preferred Stock
1,000,000 0
Schedule of Adjusted PhoneTel Options and Adjusted PhoneTel Warrants (both as
defined in the Merger Agreement) attached hereto. In addition see Schedule
3.1(F)(2).
----------
(5) The issued number of Davel Common Stock is given on a fully diluted basis
with respect to existing options and warrants but without giving effect to the
intended reservation of Davel Common Stock for issuance in respect of stock
options and warrants of Davel referred to in Section 3.1(f)(ii) of the
Exchange
Agreement. The Schedule of Rights to Purchase Capital Stock of Davel after the
PhoneTel Effective Time reflects the position without giving effect to the
intended reservation of Davel Common Stock for issuance in respect of stock
options and warrants of Davel referred to in Section 3.1(f)(ii) of the
Exchange
Agreement.
Schedule 3.1(F)(5) - Disclosure relating to Pre-emptive Rights
Investment Agreement, dated April 19, 1999, as amended to date, by and among
Davel, Samstock, L.L.C., a Delaware limited liability company, EGI-Davel
Investors n/k/a EGI-DM Investors, L.L.C., ▇▇▇▇▇ ▇. ▇▇▇▇ and Davel Communications
Group., an Illinois corporation.
Shareholders Agreement, dated as of December 22, 1998, as amended to date, by
and among Davel, Samstock, L.L.C., a Delaware limited liability company,
EGI-Davel Investors n/k/a EGI-DM Investments, L.L.C., ▇▇▇▇▇ ▇. ▇▇▇▇ and Davel
Communications Group, Inc., an Illinois corporation.
Amended and Restated Corporate Governance, Liquidity and Voting Agreement, dated
as of December 22, 1998, by and among UBS Capital II LLC, Davel Communications
Group, Inc., an Illinois corporation, Davel Holdings, Inc., a Delaware
corporation, and Peoples Telephone, Inc., a
New York corporation.
Schedule 3.1(F)(6) - Authorized and Issued Capital Stock of D Sub
Authorized Number of D Sub Stock Issued Number of D Sub Stock
1,000 1,000
Schedule 3.1(K) - Disclosure of Certain Fees
1. By letter agreement dated November 12, 2001, Davel paid to PhoneTel
$17,500, representing one-half of the $35,000 engagement fee paid by PhoneTel to
Ladenburg ▇▇▇▇▇▇▇▇ & Co Inc. ("Ladenburg"). Davel is also obligated to pay 50%
of Ladenburg's fees and expenses, if any, incurred in connection with such
agreement.
2. Davel has paid ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ $72,000 for certain financial
services in connection with the Merger.
Schedule 3.2(E) - PhoneTel Governmental Approvals
(a) applicable requirements of the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder and the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder, 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;
(b) the filing of the 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
Transaction;
(d) filings with the SEC with respect to the deregistration of the shares of
PhoneTel Common Stock or the registration of Davel Common Stock in connection
with the Amended Plan (as such term is defined in the Merger Agreement); 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 is necessary for the consummation by PhoneTel of the
Transaction.
Schedule 3.2(F)(1) - Authorized and Issued Capital Stock of PhoneTel
as of Date of Execution(6)
45,000,000 shares of PhoneTel Common Stock are authorized and 11,611,708 shares
of PhoneTel common stock are currently outstanding, on a fully diluted basis.
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(6) The issued number of PhoneTel Capital Stock is given on a fully diluted
basis with respect to existing options and warrants but without giving effect to
the deemed reservation of 4% of PhoneTel Common Stock for issuance in respect of
stock options and warrants of PhoneTel (which deemed reservation is referred to
in Section I of the Commitment Letter in the form of Exhibit A attached to the
Exchange Agreement).
Schedule 3.2(F)(2) - Authorized and Issued Capital Stock of PhoneTel after
PhoneTel Debt for Equity Exchange but before Davel Effective Time and the
PhoneTel Effective Time(7)
123,858,219 shares of PhoneTel common stock will be outstanding after the Equity
Exchange but prior to the Effective Time of the PhoneTel Merger, on a fully
diluted basis. PhoneTel will seek approval of its stockholders to increase its
authorized capital stock to an amount in excess of 123,858,219 shares in advance
of the such Effective Time.
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(7) The issued number of PhoneTel Capital Stock is given on a fully diluted
basis with respect to existing options and warrants but without giving effect to
the deemed reservation of 4% of PhoneTel Common Stock for issuance in respect of
stock options and warrants of PhoneTel (which deemed reservation is referred to
in Section I of the Commitment Letter in the form of Exhibit A attached to the
Exchange Agreement).
Schedule 3.2(F)(4) - Disclosure relating to Pre-emptive Rights
None.
Schedule 3.2(K) - Disclosure of Certain Fees
The fees owed pursuant to an the agreement dated January 8, 2001 with Ladenburg
▇▇▇▇▇▇▇▇ & Co., Inc. in connection with the Transaction will equal 1-1/4% of the
Aggregate Consideration paid by Davel including retainer amounts and amounts
paid pursuant to the issuance of a fairness opinion by Ladenburg ▇▇▇▇▇▇▇▇ & Co.,
Inc. For purposes of the Transaction, Aggregate Consideration is defined as the
total sale proceeds and all other consideration received by PhoneTel and/or
holders of PhoneTel's stock, options and warrants upon the consummation of the
Transaction, inclusive of cash, debt and equity securities, notes, property,
shareholder payables and indebtedness assumed, plus the total value of any
interest-bearing and long-term liabilities assumed or retired and the aggregate
amount of any dividends or other distributions paid by the Company to its
stockholders after the date of the engagement letter.
As discussed above, Ladenburg ▇▇▇▇▇▇▇▇ & Co., Inc. is entitled to receive
$175,000 for the issuance of a fairness opinion to the Board of Directors in
connection with the Transaction.
By letter agreement dated November 12, 2001, PhoneTel engaged Ladenburg,
▇▇▇▇▇▇▇▇ & Co. to assist in obtaining receivables-backed debt financing for
PhoneTel and Davel for a fixed fee of $35,000. In a separate letter agreement
dated November 12, 2001, Davel has agreed to pay one half of the fixed fee and
out-of-pocket expenses. The $35,000 fee has been paid, and Davel has reimbursed
the Company for half of such fee.
Schedule 3.3(E) - Disclosure relating to Government Approvals
Schedule 3.3(F) - Disclosure relating to ownership of the Davel Loans
Schedule 3.4(E) - Disclosure relating to Government Approvals
Schedule 3.4(F) - Disclosure relating to ownership of the PhoneTel Loans
Exhibit A
Commitment Letter
Exhibit B
Registration Rights Agreement
