EXHIBIT 10.2.1
First Amendment to
Agreement and Plan of Merger
This First Amendment ("First Amendment") to the Agreement and Plan of
Merger dated May 9, 1999 ("Agreement") is made and entered into this 2/nd/ day
of July, 1999 between Madison River Telephone Company, LLC, a Delaware limited
liability company, ("Buyer") and Gulf Coast Services, Inc., an Alabama
corporation, ("GCSI"). All capitalized terms not defined herein shall have the
meaning as set forth in the Agreement.
Whereas the Parties have entered into the Agreement; and
Whereas Parties wish to amend the Agreement to further define certain
understandings and obligations of the Parties.
NOW, THEREFORE, in consideration of the promises and mutual covenants and
agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which hereby is acknowledged, Buyer and GCSI hereby
amend the Agreement as follows:
Agreement is amended by replacing the defined terms in Article I with the
following:
"Additional Merger Consideration" means the sum of (i) the reimbursement
not to exceed $10 million for the Capital Expenditures of GCSI specifically
for Group I Fiber Projects made after the Agreement Date and on or prior to
the Effective Time and (ii) the Incentive Payment.
"Adjusted Long Term Debt" means Long Term Debt less (i) the Employee Stock
Ownership Plan loan guarantee, (ii) cash and cash equivalents of GCSI and
its Subsidiaries in excess of the Minimum Cash Amount determined on a
consolidated basis and in accordance with GAAP, consistently applied, as of
the Effective Time, and (iii) the excess, if any, of the Capital
Expenditures of GCSI specifically for Group II Fiber Projects over $5
million.
"Merger Consideration" means the sum of (i) $3 10 million reduced by (A)
Adjusted Long Term Debt as of the Closing Date and (B) the excess, if any,
of $17,394,347 over the capital expenditures of GCSI for Group I Fiber
Projects (paid or recorded as a liability), made after December 31, 1998
and on or prior to the Closing Date, (11) the sales price of the Non-
Business Real Estate as provided in Section 6.9, and (iii) the sales price
of the DigiPH Stock as provided in Article Ix.
Agreement is further amended by inserting the following to the defined terms in
Article 1:
Under the definition of Incentive Payment, "Lighted Sheath Miles at the
Effective Time" is amended to "Lighted Sheath Miles for Group I Fiber
Projects at the Effective Time".
Agreement is further amended by adding the following defined terms to Article 1:
"AS400 Billing System" has the meaning set forth in Section 6.11.
"Capital Expenditures of GCSI" means amounts Paid or Disbursed by GCSI or
any of its Subsidiaries in connection with or for use in fiber projects.
"Group I Fiber Projects" means fiber optic cable, electronics (repeaters,
FOTs, and/or OC 48 multiplexing), rack space necessary to mount optics
equipment, permits, and easements (between Xxxxxxxxxx and Billingsley,
Alabama and relating to Eglin Air Force Base) owned by or subject to an IRU
in the name of GCSI or one of its Subsidiaries and as more fully described
by City Pairings, Route Miles and Strand Count on Exhibit F.
"Group II Fiber Projects" means fiber optic cable, electronics (repeaters,
FOTs, and/or OC 48 multiplexing), rack space necessary to mount optics
equipment, permits, and easements -(between New Orleans and Xxxxxxx,
Louisiana) owned by or subject to an IRU in the name of GCSI or one of its
Subsidiaries and as more fully described by City Pairings, Route Miles and
Strand Count on Exhibit G.
"Minimum Cash Amount" means cash and cash equivalents (investments with a
maturity of three months or less at the date of purchase) in the amount of
$1.5 million plus the $500,000 amount in Section 6.11.
"Paid or Disbursed" means GCSI must have paid for that portion of the work
and/or material purchases giving rise to the Capital Expenditures of GCSI
that is then completed or invoiced.
Agreement is further amended as follows:
Replace Section 2.6 (d) with the following: "(i) Immediately following the
Effective Time, the Paying Agent shall first pay the expenses described in
Section 8.3(b); (ii) thereafter, upon surrender to Paying Agent of the
certificate(s) representing GCSI Shares (other than Dissenting Shares),
Paying Agent shall pay to the GCSI Stockholder surrendering such
certificate(s) a prorata share (based on the number of issued and
outstanding GCSI Shares immediately prior to the Effective Time) of an
amount equal to (A) the Merger Consideration; plus (B) the estimated
Capital Expenditures of GCSI specifically for Group I Fiber Projects, made
after the Agreement Date and on or prior to the Effective Time not to
exceed $10 million; less (C) the expenses paid pursuant to clause (i)
above, for each GCSI Share represented by the surrendered certificate(s),
which amount shall be paid by Paying Agent within one (1) business day of
its receipt of the surrendered certificate(s) by bank check or other
immediately available funds; and (iii) upon receipt of a disbursement
notice signed by Buyer and Xxxxxxxx X. Xxxxx, anticipated to be not later
than fifteen (15) days after the Closing, the Paying Agent shall pay to
each GCSI Stockholder that has previously surrendered, or subsequently
surrenders, such certificate(s) (other than certificates representing
Dissenting Shares) a prorata share (based on the number of issued and
outstanding GCSI Shares immediately
prior to the Effective Time) of the estimated Incentive Payment, reduced by
any overestimate, or increased by any underestimate, of Capital
Expenditures of GCSI specifically for Group I Fiber Projects made after the
Agreement Date and on or prior to the Effective Time (with the amount of
any increase not to exceed $ 10 million when aggregated with the amounts in
(ii)(B) above), as reflected in said joint disbursement notice, for each
GCSI Share represented by the surrendered certificate(s), which amount
shall be paid by Paying Agent within one (1) business day of receipt of the
joint disbursement notice or, in the case of a subsequently surrendered
certificate, within one (1) business day of its receipt of the subsequently
surrendered certificate, by bank check or other immediately available
funds."
In Section 7.1 last sentence by inserting "except (i) above" so as to read:
"Buyer may waive any condition specified in this Section 7.1 except
(i) above by a writing so stating delivered to GCSI at or prior to
Closing."
Agreement is further amended by adding the following new Sections to the
Agreement:
6.4.1 GCSI shall (a) provide to Buyer regular reports at least twice
monthly on the progress of Group II Fiber Projects; and (b) obtain from
Buyer prior written approval on any capital expenditures for Group II Fiber
Projects in excess of $ 10,000, provided that Buyer shall use its best
efforts to respond in a timely fashion to such requests for approval.
6.11 Billing Software and System. GCSI shall no longer pursue the
---------------------------
conversion of the AS400 billing system currently being used by GCSI (AS400
Billing System) to a new billing software and system. GCSI shall use all
due diligence and make every effort to make the AS400 Billing System Year
2000 compliant. GCSI shall increase the Minimum Cash Amount by $500,000 to
an aggregate of $2 million. GCSI shall provide to Buyer regular reports at
least twice monthly on the progress of making the AS400 Billing System Year
2000 compliant.
7.1 (i) GCSI and its Subsidiaries shall possess the Minimum Cash Amount
after the payment of all fees and expenses of Section 8.3)(a).
Agreement is further amended by replacing Section 8.3 with the following:
Fees and Expenses. Except as otherwise provided herein, the reasonable
costs, fees and expenses incurred in connection with the negotiation,
drafting and execution of this Agreement and the consummation of the
transactions contemplated hereby (including the reasonable fees and
expenses of counsel, accountants and appraisers) shall be paid by the Party
incurring such fees or expenses; provided that (a) up to $1.5 million of
such costs, fees and expenses incurred by or on behalf of GCSI by the GCSI
stockholders and the ESOP may be paid by GCSI and any portion paid shall be
made no later than the Closing Date and any unpaid portion shall not be a
liability to or on the books of GCSI or Buyer and (b) any unpaid portion in
(a) above or any excess of such costs, fees and
expenses incurred by or on behalf of GCSI in excess of $1.5 million shall
be paid by the Paying Agent as provided in Section 2.6 (d)(i).
Agreement is further amended by the incorporation of the attached Exhibit F and
Exhibit G.
IN WITNESS WHEREOF, the Parties hereto have executed this First Amendment to the
Agreement on the date first written.
Madison River Telephone Company, LLC Gulf Coast Services, Inc.
By: XXXX X. XXXX By: XXXXXXXX X. XXXXX
---------------------------------- ------------------------------
Its: Managing Director & CFO Its: President & CEO
---------------------------------- ------------------------------
Attested by: Attested by:
XXXXX XXXXXX XXX XXXX, SECRETARY
--------------------------------------- -----------------------------------
