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 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 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withdrawn prior to the expiration of the Offer,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
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 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 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,
privileges, 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
Articles 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
Incorporation, as in effect immediately prior
to the Effective Time, shall be the Articles of
Incorporation 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
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 of the Agreement is hereby
deleted in its entirety.
Section 2.4 Amendment to Section 1.10 of the
Agreement. Section 1.10 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 (a) of Section 2.1 of the
Agreement is hereby amended and restated in its entirety
to read as follows:
"(a) The Purchaser Common Stock. Each
issued and outstanding share 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 Corporation."
ARTICLE IV
AMENDMENTS TO ARTICLES III AND V OF THE AGREEMENT
Section 4.1 Amendment to Section 3.20 of the
Agreement. The first sentence of Section 3.20 of the
Agreement shall be amended to be restated as follows:
"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 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
Surviving 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 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 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
hereof is intended to prohibit Parent or the
Purchaser from (a) soliciting, evaluating and
making proposals regarding such purchases and
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
aggregate."
Section 4.4 Addition of Section 5.15. Article
V of the Agreement is hereby amended by adding a new
Section 5.15 to read in its entirety as follows:
"5.15 Credit Agreement Extension. Parent
and the Company shall, and 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 respect 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 subsection (b) of Section 7.1
of the Agreement is hereby amended to delete the
reference 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
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 (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 (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.
(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 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 respect 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 execution 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.
(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 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 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, 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 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
Amendment shall be governed by and construed in
accordance with the laws of the State of Georgia without
giving effect to the principles of conflicts of law
thereof.
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 /s/ Xxxxx X. Xxxx
Name: Xxxxx X. Xxxx
Title: Chief Executive
Officer
PHONETEL ACQUISITION CORP.
By /s/ X.X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Secretary
COMMUNICATIONS CENTRAL INC.
By /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: President and Chief
Executive Officer
