AMENDMENT NO. 1 TO THE
AGREEMENT AND PLAN OF MERGER
AMONG
AT&T CORP.,
WINSTON, INC.
AND
VANGUARD CELLULAR SYSTEMS, INC.,
DATED AS OF NOVEMBER 4, 1998.
This AMENDMENT NO. 1 to the Agreement and Plan of Merger (this
"Amendment No. 1") is entered into as of this 4th day of November, 1998 by and
among AT&T Corp., a New York corporation ("Parent"), Winston, Inc., a Delaware
corporation and a wholly owned subsidiary of Parent ("Merger Sub"), and Vanguard
Cellular Systems, Inc., a North Carolina corporation (the "Company", and
together with Parent and Merger Sub, the "Parties").
WHEREAS, the Parties have entered into an Agreement and Plan of
Merger, dated as of October 2, 1998 (the "Original Merger Agreement" and, as
amended by this Amendment No. 1, the "Merger Agreement");
WHEREAS, the Parties desire to make certain amendments to the
Original Merger Agreement in contemplation of a proposed tender offer and
consent solicitation for the Debentures;
WHEREAS, the Parties desire that, except as set forth herein, the
Original Merger Agreement shall remain in full force and effect; and
WHEREAS, capitalized terms used herein and not defined herein shall
have the respective meanings given in the Original Merger Agreement;
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained herein, the Parties agree as follows:
SECTION 1. Section 3.1(m) of the Original Merger Agreement is
amended to add the words "and, if the Company makes the election in Section
5.9(2), NationsBanc Xxxxxxxxxx Securities LLC" to the end of the first sentence
and to add the words ", and a true and complete copy of the engagement letter of
NationsBanc Xxxxxxxxxx Securities LLC in the form attached to Schedule 5.9 shall
have been delivered to Parent prior to the commencement of the Tender Offer if
the Company makes the election in Section 5.9(2)".
SECTION 2. Section 3.1 of the Original Merger Agreement is amended
to add the following:
(w) Authority; No Conflicts.
(i) The Company has all requisite corporate power and
authority to execute and deliver Amendment No. 1 and to
consummate the transactions contemplated by Amendment No. 1
(which shall include, for all purposes hereunder, without
limitation, the making and consummation of the Tender Offer (as
defined herein) and all transactions contemplated thereby, the
making of the Deposit (as defined herein) and the execution,
delivery and performance of the Supplemental Indenture (as
defined herein)). The execution, delivery and performance of
Amendment No. 1 and the consummation of the transactions
contemplated by Amendment No. 1 have been duly authorized by the
Board of Directors of the Company and all neces-
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sary corporate
action on the part of the Company. Amendment No. 1 has been duly
executed and delivered by the Company and constitutes the legal,
valid and binding obligation of the Company, enforceable against
it in accordance with its terms, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization,
moratorium and similar laws relating to or affecting creditors
generally, by general equity principles (regardless of whether
such enforceability is considered in a proceeding in equity or
at law) or by an implied covenant of good faith and fair
dealing.
(ii) The execution and delivery of Amendment No. 1 does not
and the consummation of the transactions contemplated by
Amendment No. 1 will not cause or result in any Violation
pursuant to: (A) any provision of the Organizational Documents
of the Company or any of its Subsidiaries (B) (x) any Company
Material Contract or (y) any other contract, agreement or
binding obligation to which the Company or any Subsidiary is a
party or to which any of its or their assets are bound or (C)
any Law.
(iii) No consent, waiver, permit, approval, order or
authorization of, or registration, declaration or filing with,
any Governmental Entity (other than those which have been
obtained or made) is required by or with respect to the Company
or any of its Subsidiaries in connection with the execution and
delivery of Amendment No. 1 by the Company or the consummation
by the Company of the transactions contemplated by Amendment No.
1.
(iv) Upon execution and delivery by the Company and the
Trustee under the Indenture (the "Trustee") of the Supplemental
Indenture in accordance with the Tender Offer, the Majority
Covenants (as defined herein) will not apply to the Company or
any of its affiliates. The Company has reviewed the Supplemental
Indentures with its counsel, the Trustee and such Trustee's
counsel, and is aware of no reason that, assuming receipt of the
Requisite Consents (as defined herein), the Supplemental
Indenture would not be executed by the Trustee.
(x) Tender Offer Matters. The consummation of the
transactions contemplated by Amendment No. 1 shall comply with all
applicable laws including, without limitation, all federal and state
securities laws. None of the offer to purchase or any of the related
materials to be sent or delivered by the Company in connection with the
Tender Offer shall contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The
supplemental
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indenture (the "Supplemental Indenture") to be entered
into in connection with the Tender Offer, upon execution by the Company
and the Trustee, shall be valid and enforceable and in full force and
effect, and neither the Company nor any of its Subsidiaries shall
violate any provision of, or commit or fail to perform any act which,
with or without notice, lapse of time, or both, could reasonably be
expected to constitute a default under the provisions of, any such
Supplemental Indenture.
SECTION 3. Section 5.9 of the Original Merger Agreement is amended
and restated in its entirety to read as follows:
5.9 DEBENTURES. (a) Subject to compliance with this Section 5.9, the
Company may, at its election, commence a tender offer and consent
solicitation (the "Tender Offer") to purchase the Company's outstanding 9
3/8% Debentures due 2006 (the "Debentures") on the terms and conditions
set forth in Schedule 5.9 hereto, which shall effect the deletion of
substantially all of the covenants in the related Indenture, dated as of
April 1, 1996, as amended by the First Supplemental indenture thereto,
dated as of April 1, 1996 (as so amended, the "Indenture"), which may be
deleted therefrom with the consent (the "Requisite Consent") of a majority
in principal amount of outstanding Debentures, as set forth in Schedule
5.9 (the "Majority Covenants").
(b) The Tender Offer shall be commenced as promptly as
practicable following the date of Amendment No. 1, and, in any event,
within three days following such date (the "Third Day"). Except as may be
required by law, the Company shall not extend the consent date or
expiration date of, or amend or waive any terms or conditions of, the
Tender Offer, or deem any condition thereof not to be satisfied, without
Parent's prior written consent (in its sole discretion), provided that, on
any scheduled consent date under the Tender Offer prior to November 25,
1998, the Company may extend such consent date, for one business day, if
on such consent date the Requisite Consent has not been received.
(c) All documentation delivered in connection with the Tender
Offer shall be acceptable to Parent (in its sole discretion), and Parent
shall be provided all such documentation sufficiently in advance of the
anticipated date of use of such documentation to meaningfully review and
comment on such documentation. The Company shall provide Parent with (i)
opinions of North Carolina and New York counsel to the Company, addressed
to both the Company and Parent, in form and substance satisfactory to
Parent (in its sole discretion) and as set forth in Schedule 5.9 hereto
respecting the commencement and consummation of the Tender Offer and the
execution and delivery of the Supplemental Indenture and (ii) reliance
letters permitting Parent and the Company to rely on any legal opinions or
certificates delivered in connection therewith.
(d) If the Tender Offer is commenced (x) upon the receipt of
the Requisite Consent, the Company shall execute and use its best efforts
to cause the
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Trustee to execute, the Supplemental Indenture at the Consent
Time (as defined in the Tender Offer) and (y) upon the expiration of the
period for tendering Debentures under the Tender Offer, if the conditions
to consummation of the Tender Offer have been satisfied, the Company shall
accept for payment and purchase all Debentures validly tendered thereunder
and shall deliver such Debentures to the Trustee under the Indenture for
cancellation.
(e) Promptly following the expiration of the period for
tendering Debentures under the Tender Offer without Debentures being
purchased thereunder, or upon the Third Day if the Tender Offer shall not
have been commenced by such day, the Company shall make the deposit (the
"Deposit") contemplated by Section 6.1A(1) of the Indenture and shall use
its best efforts to satisfy all other conditions to the covenant
defeasance provisions of Sections 6.1 and 6.1A of the Indenture so that
such covenant defeasance shall become effective with respect to all
Debentures as promptly as practicable thereafter.
SECTION 4. Section 6.2(k) of the Original Merger Agreement is
amended and restated in its entirety to read as follows:
(k) Debentures. Either (i) all Debentures shall have been
covenant defeased (and all conditions thereto satisfied) in accordance
with the covenant defeasance provisions of Sections 6.1 and 6.1A of the
Indenture or (ii) the Supplemental Indenture shall have become effective
and the provisions thereof shall have become operative and the Majority
Covenants shall no longer apply to or restrict the operations of the
Company and its successors.
SECTION 5. Sections 7.2(f) and (g) of the Original Merger Agreement
are amended and restated in their entirety to read as follows:
(f) If this Agreement is terminated pursuant to Section 7.1(h) and
the Company prior to the date of such termination consummated the Tender
Offer, then Parent will pay the Company an amount equal to the product of
(x) $3.5 million and (y) the percentage of outstanding Debentures
purchased under the Tender Offer, plus all Company Expenses which may be
owed pursuant to Section 7.2(c). If this Agreement is terminated pursuant
to Section 7.1(h) and the Company prior to the date of such termination
irrevocably made the Deposit pursuant to Section 5.9(e) hereof, then
Parent will pay the Company an amount equal to $4.5 million.
(g) If this Agreement is terminated pursuant to Section 7.1(b) and
the Company prior to the date of such termination consummated the Tender
Offer, then Parent will pay the Company an amount equal to the product of
(x) $1.75 million and (y) the percentage of outstanding Debentures
purchased under the Tender Offer, plus all Company Expenses which may be
owed pursuant to Section 7.2(c). If this Agreement is terminated pursuant
to Section 7.1(b) and the Company prior to the date of such termination
irrevocably made the Deposit pur-
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suant to Section 5.9(e) hereof, then Parent will pay the Company an
amount equal to $2.25 million.
SECTION 6. Except as set forth herein, the Original Merger
Agreement shall remain in full force and effect. All references to "this
Agreement" in the Original Merger Agreement shall be references to the Original
Merger Agreement as amended pursuant to this Amendment No. 1.
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IN WITNESS WHEREOF, the parties below have caused this Amendment No.
1 to be duly executed by persons duly authorized, all as of the date first
written above.
AT&T CORP.
By:
Name:
Title:
WINSTON, INC.
By:
Name:
Title:
VANGUARD CELLULAR SYSTEMS, INC.
By:
Name:
Title:
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