FIRST AMENDMENT
TO
AGREEMENT AND PLAN OF MERGER
by and among
PHONETEL TECHNOLOGIES, INC.,
PHONETEL ACQUISITION CORP.
and
COMMUNICATIONS CENTRAL INC.
dated as of
May 15, 1997
FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER
FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER (hereinafter referred
to as this "First Amendment"), dated as of May 15, 1997, by and among PhoneTel
Technologies, Inc., an Ohio corporation ("Parent"), PhoneTel Acquisition Corp.,
a Georgia corporation and a wholly owned subsidiary of Parent (the "Purchaser"),
and Communications Central Inc., a Georgia corporation (the "Company").
WHEREAS, Parent, the Purchaser and the Company entered into an
Agreement and Plan of Merger dated as of March 14, 1997 (the "Agreement"); and
WHEREAS, Parent, the Purchaser and the Company desire to amend the
Agreement upon the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements set forth herein, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. Capitalized terms used and not otherwise
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defined herein shall have the respective meanings assigned to them in the
Agreement.
ARTICLE II
AMENDMENTS TO ARTICLE I OF THE AGREEMENT
Section 2.1 Amendment to Section 1.1 of the Agreement. The first
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clause (i) of subsection (a) of Section 1.1 of the Agreement is hereby amended
and restated in its entirety to read as follows:
"(i) there being validly tendered and not withdrawn prior to the
expiration of the Offer, that number of Shares which represents at least
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seventy-five percent (75%) of the Shares outstanding (but in no event less
than 50.1% of the Shares outstanding on a fully diluted basis) (the
"Minimum Condition"), "
Section 2.2 Amendment to Section 1.4 of the Agreement. Section 1.4
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of the Agreement is hereby amended and restated in its entirety to read as
follows:
"Section 1.4 The Merger. Upon the terms and subject to the
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conditions of this Agreement, at the Effective Time, (i) the Purchaser
shall be merged with and into the Company (the "Merger") and the separate
corporate existence of the Purchaser shall cease, (ii) the Company shall be
the successor or surviving corporation in the Merger (sometimes hereinafter
referred to as the "Company Surviving Corporation" or the "Surviving
Corporation") and shall continue to be governed by the laws of the State of
Georgia, and (iii) the separate corporate existence of the Company with
all its rights, priv ileges, immunities, powers and franchises shall
continue unaffected by the Merger, except as set forth in this Section 1.4.
Pursuant to the Merger, (x) the Articles of Incorporation shall be amended
in its entirety to read as the Arti cles of Incorporation of the Purchaser,
in effect immediately prior to the Effective Time, except that Article
FIRST thereof shall read as follows: "FIRST: The name of the corporation
is Communications Central Inc." and, as so amended, shall be the Articles
of Incorporation of the Company Surviving Corporation until thereafter
amended as provided by law and such Articles of Incorporation, except that
if the Purchaser shall acquire less than seventy-five percent of the
outstanding Shares pursuant to the Offer or otherwise, the Articles of
Incor poration, as in effect immediately prior to the Effective Time, shall
be the Articles of Incor poration of the Company Surviving Corporation
until thereafter amended as provided by law and such Articles of
Incorporation, and (y) the By-Laws of the Purchaser (the "By-laws"), as in
effect immediately prior to the Effective Time, shall be the By-laws of the
Company Surviving
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Corporation until thereafter amended as provided by law, by the Articles
of Incorporation of the Company Surviving Corporation or by such By-laws,
except that if the Purchaser shall acquire less than seventy-five percent
of the outstanding Shares pursuant to the Offer, the By-laws of the
Company, as in effect immediately prior to the Effective Time, shall be
the By-laws of the Company Surviving Corporation until thereafter amended
as provided by law, by the Articles of Incorporation of the Company
Surviving Corporation or by such By-laws. The Merger shall have the
effects specified in the GBCC."
Section 2.3 Amendment to Section 1.9 of the Agreement. Section 1.9
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of the Agreement is hereby deleted in its entirety.
Section 2.4 Amendment to Section 1.10 of the Agreement. Section 1.10
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of the Agreement is hereby amended by deleting the last two sentences thereof.
ARTICLE III
AMENDMENT TO ARTICLE II OF THE AGREEMENT
Section 3.1 Amendment to Section 2.1 of the Agreement. Subsection
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(a) of Section 2.1 of the Agree ment is hereby amended and restated in its
entirety to read as follows:
"(a) The Purchaser Common Stock. Each issued and outstanding share
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of the Purchaser Common Stock shall be converted into and become one fully
paid and nonassessable share of common stock of the Company Surviving
Corporation and shall constitute the only outstanding shares of capital
stock of the Surviving Corpo ration."
ARTICLE IV
AMENDMENTS TO ARTICLES III AND V OF THE AGREEMENT
Section 4.1 Amendment to Section 3.20 of the Agreement. The first
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sentence of Section 3.20 of the Agreement shall be amended to be restated as
follows:
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"The Average Net Revenue shall be (i) at least $90 per pay telephone
(excluding prison phones) as of the date hereof and as of the Closing Date
and (ii) at least $135 per prison phone in operation as of the date hereof
and as of June 30, 1997."
Section 4.2 Amendment to Section 5.8(b) of the Agreement. Section
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5.8(b) of the Agreement is hereby amended by restating the second and third
provisos of such section as follows:
"; provided, further, however, that in no event shall Parent be
required to pay aggregate annual premiums for insurance under this Section
5.8(b) in excess of $103,250; and provided, further, that if the Parent or
the Surviv ing Corporation is unable to obtain the amount of insurance
required by this Section 5.8(b) for such aggregate annual premium, Parent
or the Surviving Corporation shall obtain as much insurance as can be
obtained for an annual premium of $103,250."
Section 4.3 Addition of Section 5.14. Article V of the Agreement is
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hereby amended by adding a new Section 5.14 to read in its entirety as follows:
"5.14 Acquisitions by Parent. Except for those purchases and other
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acquisitions set forth in Section 5.14 of the Parent Disclosure Schedule,
without the prior written consent of the Company, from and after May 15,
1997 and prior to the purchase by the Purchaser of Shares pursuant to the
Offer, Parent shall not, directly or indirectly, consummate the purchase or
other acquisition of, or enter into any agreement or make any commitment or
undertaking to purchase or acquire, all or substantially all of the
outstanding capital stock, or all or substantially all of the assets, of
any public pay phone operator, whether by stock purchase, asset purchase,
share exchange, merger or otherwise; provided, however, that no provision
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hereof is intended to prohibit Parent or the Purchaser from (a) soliciting,
evaluating and making proposals regarding such purchases and
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acquisitions or (b) entering into agreements for the purchase of not more
than 250 pay phones in any one or more related transactions, or more than
1,250 pay phones in the aggre gate."
Section 4.4 Addition of Section 5.15. Article V of the Agreement is
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hereby amended by adding a new Sec tion 5.15 to read in its entirety as follows:
"5.15 Credit Agreement Extension. Parent and the Company shall, and
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the Company shall use its best efforts to cause First Union National Bank
of Georgia, as lender (the "Lender") under the Amended and Restated Credit
Agreement dated as of August 15, 1996, as amended (the "Credit Agreement"),
to negotiate an amendment, in form and substance reasonably satisfactory to
Parent (the "Extension"), to the Credit Agreement for the purpose, among
others, of extending the due date for the required $12 million principal
payment thereunder from July 1, 1997 until no sooner than July 1, 1998.
From and after May 15, 1997 through and including the date on which the
Extension is executed and delivered by the Company and the Lender, the
Company shall (x) provide Parent with true, correct and complete copies of
all correspondence with the Lender, and (y) notify and consult with Parent
and its advisors regarding the Company's meetings and other discussions
with the Lender, in each case, regarding the Credit Agreement, including
with re spect to the Extension."
ARTICLE V
AMENDMENTS TO ARTICLES VII AND VIII OF THE AGREEMENT
Section 5.1 Amendment to Section 7.1 of the Agreement. Clause (i) of
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subsection (b) of Section 7.1 of the Agreement is hereby amended to delete the
refer ence therein to "May 19, 1997" and to insert in lieu thereof "August 20,
1997, provided that such right to terminate shall arise on July 21, 1997 if, on
or before such date, Parent has not delivered to the Company a commitment
(subject only to the consummation of the Offer
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and other customary conditions, but not subject to due diligence) for $25
million or more of equity capital to finance the Offer and the Merger;".
Section 5.2 Amendment to Section 8.1(b) of the Agreement. Clause
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(iii) of subsection (b) of Section 8.1 of the Agreement is hereby amended to be
restated as follows:
"(iii) either the Company or Parent terminates this Agreement
pursuant to Section 7.1(b)(i), there shall have been a failure of the
Minimum Condition and prior thereto there shall have been publicly
announced another Acquisition Proposal or an event set forth in paragraph
(h) of Annex A shall have occurred,"
Section 5.3 Amendment to Section 8.1(c)(i) of the Agreement. Clause
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(i) of subsection (c) of Section 8.1 of the Agreement is hereby amended to be
restated as follows:
"(i) Section 7.1(b) and the only condition to the purchase of Shares
in the Offer that has not been satisfied is the Financing Condition (except
if the sole reason for Parent's failure to satisfy the Financing Condition
is the failure of the Company to satisfy its obligations under Section
5.13 hereof), or"
ARTICLE VI
MISCELLANEOUS
Section 6.1 Escrow Amendment; Effect.
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(a) Simultaneously with the execution and delivery of this First
Amendment, the Company, Parent and the Escrow Agent are entering into a Release
and Termination of the Escrow Agreement, in the form attached to this First
Amendment as Exhibit A (the "Release and Termination") pursuant to which the
Escrow Amount is being released to the Company. The Company shall retain $3.5
million of such funds in a separate account, and shall not spend or commit to
spend such funds without the prior written consent of Parent until the earlier
of the (i) purchase of Shares in the Offer or (ii) termination of the Agreement.
(b)(i) The Company hereby acknowledges and agrees that the release to
the Company of the Escrow Amount pursuant to the Release and Termination shall
constitute liquidated damages, and the Company shall have no
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other right or remedy under the Agreement or the Escrow Agreement (or any
agreement, document or instrument entered into in connection herewith or
therewith) with re spect to (A) any action of Parent or Purchaser through the
date hereof or (B) the failure of the Minimum Condition or the Financing
Condition, or both, and (ii) in furtherance of the foregoing, from and after the
execu tion and delivery of this First Amendment and the Release and Termination
by each of the parties hereto and thereto, the Company hereby irrevocably
releases Parent and the Purchaser from any and all liabilities and obligations,
including under the Agreement, arising out of or relating to the failure of the
Minimum Condition or the Financing Condition, or both.
(c)(i) Each of Parent and Purchaser hereby acknowledges and agrees
that the Escrow Amount is being released from escrow without any further
recourse against the Company, and neither Parent nor Purchaser shall have any
right or remedy under the Agreement or the Escrow Agreement (or any agreement,
document or instrument entered into in connection herewith or therewith) with
respect to the Company's obligation to facilitate the Financing Condition, or
any other action, of the Company through the date hereof, and (ii) in
furtherance of the foregoing, from and after the execution and delivery of this
First Amendment and the Release and Termination by each of the parties hereto
and thereto, each of Parent and Purchaser hereby irrevocably releases the
Company from any and all liabilities and obligations, including under the
Agreement, through the date hereof.
Section 6.2 Payment.
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(a) Simultaneously with the execution and delivery of this First
Amendment, Parent is paying to the Company as additional consideration to the
Company for entering into this First Amendment, the amount of $1 million (the
"Payment"); provided that the Company shall utilize the Payment for the sole
purpose of paying a portion of the principal amount due under the Credit
Agreement.
(b) In the event that the Agreement is terminated for any reason and,
at the time of such termination the Extension has not been executed, the Company
shall
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pay to Parent the amount of $1 million within two business days following such
termination.
(c) In the event the Agreement is terminated by reason of the failure
of the Minimum Condition or any of the conditions set forth in paragraphs (d),
(e), (f) and (g) of Annex A to the Agreement, the Company shall pay to Parent
the amount of $1 million within two business days following such termination.
Section 6.3 Amendment. All references in the Agreement (and in the
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other agreements, documents and instruments entered into in connection
therewith) to the "Agreement" shall be deemed for all purposes to refer to the
Agreement, as amended by this First Amendment.
Section 6.4 Limited Effect. Except as expressly modified herein,
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the Agreement shall continue to be, and shall remain, in full force and effect
and the valid and binding obligation of the parties thereto in accordance with
its terms.
Section 6.5 Counterparts. This First Amendment may be executed in
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two or more counterparts, each of which shall be considered one and the same
agreement and shall become effective when two or more counterparts have been
signed by each of the parties and delivered to the other parties.
Section 6.6 Governing Law. This First Amend ment shall be governed
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by and construed in accordance with the laws of the State of Georgia without
giving effect to the principles of conflicts of law thereof.
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IN WITNESS WHEREOF, Parent, the Purchaser and the Company have caused
this First Amendment to be signed by their respective officers thereunto duly
authorized as of the date first written above.
PHONETEL TECHNOLOGIES, INC.
By
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Name:
Title:
PHONETEL ACQUISITION CORP.
By
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Name:
Title:
COMMUNICATIONS CENTRAL INC.
By
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Name:
Title:
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Section 5.14 of Disclosure Schedule
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Planned Acquisitions and/or Stock Mergers
1. London Communications, Inc.
2. Advance Pay Systems, Inc.
3. American Public Telephone Corporation
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