INDEMNIFICATION AGREEMENT
This INDEMNIFICATION AGREEMENT dated as of October 1, 1998 is made and
entered into by and between Vanguard Cellular Systems, a North Carolina
corporation (the "Company"), and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇.
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Jr., ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Piedmont Harbor - Piedmont
Associates Limited Partnership and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Foundation, Inc. (each, a
"Shareholder" and, collectively, the "Shareholders").
WHEREAS, the Company's Board of Directors has approved an Agreement and
Plan of Merger dated as of October 2, 1998 pursuant to which the Company will
merge with and into a wholly owned subsidiary of AT&T Corp. ("AT&T") (the
"Merger Agreement"); and
WHEREAS, AT&T has required in the Merger Agreement that each
Shareholder enter into a Voting Agreement pursuant to which such Shareholder
will agree to vote in favor of the transaction contemplated by the Merger
Agreement at the meeting of shareholders of the Company to consider such
transaction and will grant to AT&T an option to acquire his shares at a price
equal to $23.00 per share, which option is exercisable upon the occurrence of
certain events (with respect to each Shareholder, a "Voting Agreement"); and
WHEREAS, in order to induce each Shareholder to enter into his Voting
Agreement, the Company agreed to indemnify and hold harmless the Shareholders
against certain litigation costs incurred in connection with any action brought
or threatened to be brought against the Shareholders as a result of their
entering into their respective Voting Agreements.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
INDEMNIFICATION
Section 1.1 Indemnification. The Company shall indemnify and hold
harmless each Shareholder from and against expenses, including, without
limitation, reasonable attorneys' fees, as and when incurred in connection with
the defense of any actual or threatened action, suit, proceeding or claim
arising out of or in connection with such Shareholder's Voting Agreement (a
"Proceeding"); provided, that (i) the Company shall not be liable for any
settlement of any Proceeding or for any judgment or award resulting from any
Proceeding, (ii) the aggregate amount of expenses that the Company shall be
obligated to pay to or on behalf of all Shareholders in the aggregate pursuant
to this Agreement is One Million Dollars ($1,000,000) and (iii) the Company
shall not be obligated to the extent that any indemnification payment hereunder
is prohibited by law.
Section 1.2 Procedure. In case any Proceeding shall be instituted involving
any Shareholder in respect of which indemnity may be sought pursuant to Section
1.1, such
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Shareholder shall promptly notify the Company in writing, and the Company, upon
request of the Shareholder, shall retain counsel reasonably satisfactory to the
Shareholder to represent the Shareholder and any others (including other
Shareholders) that the Company may designate in such Proceeding and the Company
shall pay the fees and disbursements of such counsel related to such Proceeding
and other reasonable expenses incurred by the Shareholder in connection with
such Proceeding, subject to the limitations contained in Section 1.1; provided,
however, that if such Shareholder shall object to the selection of counsel after
having been advised by such counsel that there may be one or more legal defenses
available to him which are different from or additional to those available
others that are defendants in the same Proceeding, the Company shall designate
other counsel reasonably satisfactory to the Shareholder (provided that the
Shareholders as a group shall be represented by the same counsel unless such
counsel has advised that there may be one or more legal defenses available to
one Shareholder which are different from or additional to those available the
other Shareholders). In any such proceeding, any Shareholder shall have the
right to retain its own counsel, but the fees and expenses of such counsel shall
be at the expense of such Shareholder unless the Company and such Shareholder
shall have mutually agreed to the retention of such counsel and the Company
shall have agreed to pay such counsel.
ARTICLE II
MISCELLANEOUS
Section 2.1 Notices. All notices, requests and other communications
hereunder must be in writing and will be deemed to have been duly given if
delivered personally or by facsimile transmission or mailed (first class postage
prepaid) to the Company at Vanguard Cellular Systems, Inc., ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇, Attn:_____________
with a copy to ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇, P.L.L.C., ▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Facsimile No.: (▇▇▇)▇▇▇- ▇▇▇▇, Attn:
▇▇▇▇▇ ▇. ▇▇▇▇ or to a Shareholder at the address or facsimile number listed
below such Shareholder's name on the signature page hereto. All such notices,
requests and other communications will (i) if delivered personally to the
address as provided in this Section, be deemed given upon delivery, (ii) if
delivered by facsimile transmission to the facsimile number as provided in this
Section, be deemed given upon receipt, and (iii) if delivered by mail in the
manner described above to the address as provided in this Section, be deemed
given upon receipt (in each case regardless of whether such notice, request or
other communication is received by any other Person to whom a copy of such
notice is to be delivered pursuant to this Section). Any party from time to time
may change its address, facsimile number or other information for the purpose of
notices to that party by giving written notice specifying such change to the
other parties hereto.
Section 2.2 Waiver. Any term or condition of this Agreement may be
waived at any time by the party that is entitled to the benefit thereof, but no
such waiver shall be effective unless set forth in a written instrument duly
executed by or on behalf of the party waiving
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such term or condition. No waiver by any party of any term or condition of this
Agreement, in any one or more instances, shall be deemed to be or construed as a
waiver of the same or any other term or condition of this Agreement on any
future occasion. All remedies, either under this Agreement or by Law or
otherwise afforded, will be cumulative and not alternative.
Section 2.3 Amendment. This Agreement may be amended, supplemented or
modified only by a written instrument duly executed by or on behalf of each
party hereto.
Section 2.4 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of North Carolina applicable
to a contract executed and performed in such state, without giving effect to the
conflicts of laws principles thereof.
Section 2.5 Invalid Provisions. If any provision of this Agreement is
held to be illegal, invalid or unenforceable under any present or future Law,
and if the rights or obligations of any party hereto under this Agreement will
not be materially and adversely affected thereby, (a) such provision will be
fully severable, (b) this Agreement will be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof
and (c) the remaining provisions of this Agreement will remain in full force and
effect and will not be affected by the illegal, invalid or unenforceable
provision or by its severance herefrom.
Section 2.6 No Assignment; Binding Effect. Neither this Agreement nor
any right, interest or obligation hereunder may be assigned by any party hereto
without the prior written consent of the other party hereto and any attempt to
do so will be void, except for assignments and transfers by operation of law.
Subject to the preceding sentence, this Agreement is binding upon, inures to the
benefit of and is enforceable by the parties hereto and their respective
successors and assigns.
Section 2.7 Headings. The headings used in this Agreement have been
inserted for convenience of reference only and do not define or limit the
provisions hereof.
Section 2.8 Counterparts. This Agreement may be executed in any number
of counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
COMPANY:
VANGUARD CELLULAR SYSTEMS, INC.
By:___________________________
Name:
Title:
SHAREHOLDERS:
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Address for Notices:
[Address]
Facsimile No.:
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Address for Notices:
[Address]
Facsimile No.:
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▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, JR.
Address for Notices:
[Address]
Facsimile No.:
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▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Address for Notices:
[Address]
Facsimile No.:
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PIEDMONT HARBOR - PIEDMONT
ASSOCIATES LIMITED PARTNERSHIP
By:_________________________
General Partner
Address for Notices:
[Address]
Facsimile No.:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ FOUNDATION, INC.
By:_________________________
President
Address for Notices:
[Address]
Facsimile No.:
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