<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A/A
(Amendment No. 2)*
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
VANGUARD CELLULAR SYSTEMS, INC.
[CAPTION]
<TABLE>
<CAPTION>
NORTH CAROLINA 56-1549590
<S> <C>
(I.R.S. Employer Identification
(State of incorporation) No.)
</TABLE>
2002 PISGAH CHURCH ROAD, SUITE 300
GREENSBORO, NORTH CAROLINA 27455
(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
<TABLE>
<S> <C>
NAME OF EACH EXCHANGE ON WHICH
EACH CLASS IS TO BE REGISTERED
TITLE OF EACH CLASS TO BE SO
REGISTERED
None None
</TABLE>
Securities to be registered pursuant to Section 12(g) of the Act:
CLASS A COMMON STOCK
(Title of Class)
PLEASE ADDRESS ALL CORRESPONDENCE TO:
DORIS R. BRAY, ESQ.
SCHELL BRAY AYCOCK ABEL & LIVINGSTON L.L.P.
POST OFFICE BOX 21847
GREENSBORO, NORTH CAROLINA 27420
(910) 370-8800
*Pursuant to Rule 12b-15 of the Securities Exchange Act of 1934, this
Amendment is filed for the purpose of updating the description of the
Class A Common Stock of the Registrant.
<PAGE>
ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
The statements made under this item include summaries of certain provisions
contained in the Company's Articles of Incorporation and bylaws. These
statements do not purport to be complete and are qualified in their entirety by
reference to such Articles of Incorporation and bylaws.
The authorized capital stock of the Company consists of 250,000,000 shares
of Class A Common Stock par value $.01 per share, 30,000,000 shares of Class B
Common Stock, par value $.01 per share, and the Preferred Stock. As of June 30,
1995, 41,190,848 shares of Class A Common Stock were issued and outstanding in
the names of approximately 1,200 holders of record, and no shares of Class B
Common Stock were issued and outstanding.
CLASS A COMMON STOCK
Holders of the Company's Class A Common Stock are entitled ratably, share
for share, to such dividends as may be declared upon the Class A Common Stock by
the Board of Directors and, upon any liquidation of the Company, to participate
ratably in the distribution of any corporate assets remaining after payment of
all debts and the liquidation preferences, if any, of Preferred Stock that then
may be issued and outstanding. However, the Company has entered into a loan
agreement which substantially prohibits the payment of dividends or other
distributions with respect to the Class A Common Stock.
Holders of the Company's Class A Common Stock are entitled to one vote per
share on all matters submitted to a vote of holders of Class A Common Stock. No
holder of Class A Common Stock of the Company is entitled as a matter of right
to subscribe for or to purchase any shares of stock or any security convertible
into shares of stock of any class of the Company. Each outstanding share of
Class A Common Stock is validly issued, fully paid and nonassessable.
CLASS B COMMON STOCK AND PREFERRED STOCK
The Board of Directors has the authority, without any vote or action by the
shareholders, to issue Class B Common Stock and/or Preferred Stock. The
Company's Articles of Incorporation provide that the Class B Common Stock would
have the same characteristics as the Class A Common Stock, except that the
holders of Class B Common Stock would be entitled to one-tenth of one vote per
share, voted as a single class with the Class A Common Stock, except as required
by law. Under North Carolina law, the holders of Class B Common Stock generally
would have the right to vote as a separate voting group on (i) certain
amendments to the Articles of Incorporation, including amendments that would
increase or decrease the authorized number of shares of the class, effect an
exchange or reclassification of their shares for shares of another class, or
change the rights of the class, (ii) a plan of merger if the plan contains a
provision that, if contained in a proposed amendment in the Articles of
Incorporation, would give rise to the right to vote, except where the
consideration to be received in exchange for the shares consists solely of cash,
and (iii) a plan of share exchange if the shares are to be acquired in the
exchange. Issuance of Class B Common Stock could have the effect of acting as an
anti-takeover device to delay or prevent a change of control of the Company.
The Board of Directors of the Company is authorized to issue in one or more
series up to a maximum of 1,000,000 shares of preferred stock, par value $.01
per share. The shares can be issued with such designations, preferences,
qualifications, privileges, limitations, restrictions, options, conversion or
exchange rights and other special or relative rights as the Board of Directors
shall from time to time fix by resolution, which could adversely affect the
voting powers of the holders of Common Stock. Issuance of the Preferred Stock
could have the effect of acting as an anti-takeover device to delay or prevent a
change of control of the Company. The Company currently has no shares of
Preferred Stock outstanding.
CERTAIN PROVISIONS OF THE ARTICLES OF INCORPORATION AND BYLAWS
A provision of the Company's Articles of Incorporation requires the holders
of at least 66 2/3% of the outstanding shares of stock of the Company then
entitled to vote in elections of directors or a majority of the "disinterested"
members of the Board of Directors to approve certain major corporate
transactions involving the Company and a holder of 10% or more of any class of
equity security of the Company ("Interested Shareholder") or the affiliate of an
Interested Shareholder, including a merger or consolidation with the Interested
Shareholder or the sale, lease or exchange of substantially all of the assets of
the Company or of the Interested Shareholder to the other, or any dissolution of
the Company. "Disinterested" directors are directors who are neither Interested
Shareholders nor affiliated with any Interested Shareholder. In addition, the
Company's bylaws permit (i) directors to be removed only for cause and only upon
the affirmative vote of the holders of at least 66 2/3% of the outstanding
shares of the Company's capital stock entitled to vote generally in the election
of directors and (ii) newly created directorships and vacancies caused by any
reason to be filled only by the vote of the majority of directors then in office
or by the shareholders. Both the Articles of Incorporation and the bylaws
require the affirmative vote of the holders of
1
<PAGE>
at least 66 2/3% of the outstanding shares of capital stock of the Company
entitled to vote generally in the election of directors to amend these
provisions. These provisions could make it more difficult for a third party to
acquire control of the Company.
The Board of Directors of the Company is divided into three classes, with
one class elected annually by the shareholders to a three-year term. The effect
of the staggered Board of Directors is to negate substantially the possibility
of minority shareholders' obtaining representation on the Board of Directors.
The holders of common stock of the Company do not have the right to vote
cumulatively in the election of directors.
FCC RESTRICTIONS
The transfer of shares of Class A and Class B Common Stock may, in certain
circumstances, be subject to provisions of the Communications Act of 1934, as
amended, and rules and policies requiring prior FCC approval of the transfer of
control of cellular, microwave and other licensees, restricting the percentage
of alien ownership of such licensees, limiting the ownership of interests in
cellular systems serving the same area, and establishing other licensee
qualifications.
TRANSFER AGENT AND REGISTRAR
First Union National Bank, Charlotte, North Carolina, is the transfer agent
and registrar for the Class A Common Stock.
ITEM 2. EXHIBITS.
(1) Articles of Incorporation of the Registrant as amended through July 25,
1995.
(2) Bylaws of Registrant, as amended (compilation of July 25, 1995).
*(3) Specimen Common Stock Certificate, filed as Exhibit 4(a) to the
Registrant's Registration Statement on Form S-1 (File No. 33-18067).
*(4) Amended and Restated Loan Agreement between the Registrant and various
lenders led by The Bank of New York and The Toronto-Dominion Bank as agents,
dated as of December 23, 1994, filed as Exhibit 2(a) to the Registrant's Current
Report on Form 8-K dated as of December 23, 1994.
*(5) Security Agreement between the Registrant and various lenders led by
The Bank of New York and The Toronto-Dominion Bank, as Secured Party, dated as
of December 23, 1994, filed as Exhibit 2(b) to the Registrant's Current Report
on Form 8-K dated as of December 23, 1994.
*(6) Master Subsidiary Security Agreement between the Registrant, certain
of its subsidiaries and various lenders led by The Bank of New York and The
Toronto-Dominion Bank, as Secured Party, dated as of December 23, 1994, filed as
Exhibit 2(c) to the Registrant's Current Report on Form 8-K dated as of December
23, 1994.
* Incorporated by reference to the registration statement or report
indicated.
2
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, Registrant has duly caused this amendment to the registration statement
to be signed on its behalf by the undersigned, thereunto duly authorized.
VANGUARD CELLULAR SYSTEMS, INC.
By: /s/ STEPHEN L. HOLCOMBE
STEPHEN L. HOLCOMBE,
SENIOR VICE PRESIDENT
AND CHIEF FINANCIAL OFFICER
Date: July 25, 1995
Exhibit 1
ARTICLES OF INCORPORATION
OF
VC SYSTEMS, INC.
The undersigned person of the age of eighteen years or more,
for the purpose of establishing a business corporation under the
laws of the State of North Carolina, as contained in Chapter 55
of the General Statutes of North Carolina, entitled "Business
Cor- poration Act" and the several amendments thereto, and to
that end does hereby set forth:
I.
The name of the corporation is VC SYSTEMS, INC.
II.
The period of duration of the corporation shall be perpetual.
III.
The purpose for which the corporation is organized is to
engage in any lawful act or activity for which corporations may
be organized under Chapter 55 of the General Statutes of North
Carolina.
IV.
The number of shares which the corporation shall have
authority to issue is twenty million (20,000,000) shares of Class
A Common Stock with par value of $0.01 per share, and ten million
(10,000,000) shares of Class B Common Stock with par value of
$0.01 per share. There shall be no distinction whatsoever
between the Class A Common Stock and The Class B Common Stock of
the corporation, except that the holders of shares of Class A
Common Stock shall have the exclusive right to vote for the
election of directors of the corporation and for all other
purposes, each holder of Class A Common Stock of the corporation
being entitled to one (1) vote for each share thereof held, and
the holders of shares of Class B Common Stock of the corporation
shall have no voting rights whatsoever for any purpose, except as
otherwise expressly required by North Carolina law.
The Board of Directors of the corporation shall have
authority to issue shares of Class B Common Stock of the
corporation which are convertible into shares of Class A Common
Stock of the corporation on such terms and conditions as are set
forth in a resolution adopted by the Board of Directors.
<PAGE>
V.
The minimum amount of consideration for its shares to be
received by the corporation before it shall commence business is
Three Dollars ($3.00) in cash or property of equivalent value.
VI.
No shareholder of the corporation shall, because of his
ownership of stock, have a preemptive or other right to purchase,
subscribe for or take any part of any stock or any part of the
notes, debentures, bonds or other securities convertible into or
carrying options or warrants to purchase stock of the corporation
issued, optioned or sold by it after its incorporation. Any part
of the stock and any part of the notes, debentures, bonds or
other securities convertible into or carrying options or warrants
to purchase stock of the corporation authorized by these Articles
of Incorporation may at any time be issued, optioned for sale and
sold or disposed of by the corporation pursuant to resolution of
the Board of Directors, to such persons and upon such terms as
may to such Board seem proper, without first offering such stock
or securities or any part thereof to existing shareholders.
VII.
The address of the initial registered office of the corpora-
tion is No. 1 North Pointe, 3101 North Elm Street, Suite 370,
Greensboro, Guilford County, North Carolina, and the name of the
initial registered agent at such address is Stephen R. Leeolou.
VIII.
The number of directors of the corporation may be fixed by
the bylaws. The number of directors constituting the initial
Board of Directors shall be ten (10), and the names and addresses
of the persons who are to serve as directors until the first
meeting of shareholders or until their successors are elected and
qualified are:
Name Address
Haynes G. Griffin No. 1 North Pointe
3101 North Elm Street
Suite 370
Greensboro, N.C. 27408
Stephen R. Leeolou No. 1 North Pointe
3101 North Elm Street
Suite 370
Greensboro, N.C. 27408
<PAGE>
L. Richardson Preyer, Jr. No. 1 North Pointe
3101 North Elm Street
Suite 370
Greensboro, N.C. 27408
Charles T. Hagel 4024 N. 24th Road
Arlington, Virginia 22207
L. Richardson Preyer, Sr. 603 Sunset Drive
Greenboro, N.C. 27408
Stuart Smith Richardson 32 Bibbons Road
Easton, Connecticut 06425
John F. Dille, Jr. 1 Holly Lane
Elkhardt, Indiana 46514
William L. Collins, III 10824 Anita Drive
Lorton, Virginia 22079
Donald M. Clarke 6838 Camus Place
Springfield, Virginia 22152
Robert A. Silverberg 1777 Larimer Street
Denver, Colorado 80202
IX.
The name and address of the incorporator is:
Name Address
Thomas C. Watkins 500 NCNB Building
101 W. Friendly Avenue
Greensboro, N. C. 27401
IN WITNESS WHEREOF have hereunto set my hand, this the 13th
day of November, 1986.
/s/ Thomas C. Watins
Incorporator
<PAGE>
NORTH CAROLINA
GUILFORD COUNTY
THIS IS TO CERTIFY, that on the 13th day of November, 1986,
before me a Notary Public, personally appeared Thomas C. Watkins,
who I am satisfied is the person named in and who executed the
foregoing Articles of Incorporation, and I having first made
known to him the contents thereof, he did acknowledge that he
signed and delivered the same as his voluntary act and deed for
the uses and purposes therein expressed.
IN WITNESS WHEREOF, I have hereunto set my hand and seal the
13th day of November, 1986.
/s/ Betty McRary
Notary Public
My Commission Expires:
Oct. 4, 1989
<PAGE>
ARTICLES OF MERGER
OF
VANGUARD CELLULAR SYSTEMS, INC.
INTO VC SYSTEMS, INC.
The undersigned foreign and domestic corporations hereby
execute these Articles of Merger for the purpose of merging
Vanguard Cellular Systems, Inc., a Delaware corporation into VC
Systems, Inc., a North Carolina corporation:
ARTICLE I
The Plan of Merger approved by the Board of Directors and
stockholders of Vanguard Cellular Systems, Inc. pursuant to
Section 251 of the General Corporation Law of the State of
Delaware and by the Board of Directors and shareholders of VC
Systems, Inc. pursuant to Sections 55-106 and 55-108 of the North
Carolina Business Corporation Act is attached hereto and made a
part hereof.
ARTICLE II
This merger is permitted by the laws of the State of
Delaware, which are laws under which Vanguard Cellular Systems,
Inc. is organized.
ARTICLE III
(a) The number of shares of Vanguard Cellular Systems, Inc.
Class A capital stock outstanding is 6,129,567 shares of Class A
common stock, par value $.01 per share, and 161,735 of Class B
common stock, par value $.01 per share. The Class A common stock
of Vanguard Cellular Systems, Inc. is the only class of stock
entitled to vote.
(b) The number of shares of VC Systems, Inc. capital stock
outstanding is 3 shares of Class A common stock, par value $.01
per share, which is the only class of stock entitled to vote.
ARTICLE IV
(a) By action of the stockholders of Vanguard Cellular
Systems, Inc. duly taken as of December 3, 1986, the Plan of
Merger was approved by a vote of 5,623,984 shares of Class A
common stock for and 38,812 shares of Class A common stock were
voted against said Plan of Merger.
(b) By joint action of the Board of Directors and share-
holders of VC Systems, Inc. duly taken as of December 3, 1986,
the Plan of Merger was approved by the written consent of the
holders of all 3 shares of Class A common stock. No shares were
voted against said Plan of Merger.
<PAGE>
IN WITNESS WHEREOF, the Articles of Merger are signed by the
President and Secretary of each of the undersigned corporations,
this 3rd day of December, 1986.
VANGUARD CELLULAR SYSTEMS, INC.
By: /s/ Haynes G. Griffin
Haynes G. Griffin
President
By: /s/ Stephen R. Leeolou
Stephen R. Leeolou
Secretary
VC SYSTEMS, INC.
By: /s/ Haynes G. Griffin
Haynes G. Griffin
President
By: /s/ Stephen R. Leeolou
Stephen R. Leeolou
Secretary
-2-
<PAGE>
PLAN OF MERGER
ARTICLE I
The corporate existence of VCS, with all its purposes, powers
and objects, shall continue unaffected and unimpaired by the
merger, and the corporate identity and existence of Vanguard (the
"Merging Corporation") shall be merged into the VCS, which shall
be the Surviving Corporation and which is sometimes referred to
herein as the "Surviving Corporation."
ARTICLE II
The name of the Surviving Corporation shall be Vanguard
Cellular Systems, Inc.
ARTICLE III
The terms and conditions of the merger shall be as follows:
(a) The Articles of Incorporation of VCS as of the
effective time of the merger shall be the Articles of
Incorporation of the Surviving Corporation until changed as
provided by law, except that the name of the Surviving
Corporation shall be as set forth in Article II hereof.
(b) The bylaws of VCS as of the effective time of the
merger shall be the bylaws of the Surviving Corporation until
altered, amended, or repealed as provided herein.
(c) The directors of Vanguard as of the effective time of
the merger shall be the directors of the Surviving Corporation
until their successors are elected or appointed according to the
bylaws of the Surviving Corporation.
(d) The officers of Vanguard as of the effective time of
the merger shall be the officers of the Surviving Corporation
until their successors are elected or appointed according to the
bylaws of the Surviving Corporation.
(e) Except insofar as the same may be continued by law or
in order to carry out the purposes of this Plan of Merger, and
except as continued in and merged into the Surviving
Corporation, the separate existence of the Merging Corporation
shall cease as of the effective time of the merger and the
Surviving Corporation shall have and possess all the rights,
privileges, powers, immunities and franchises and all property of
the Merging Corporation, and shall be responsible and liable for
all debts, duties, contracts, liabilities and obligations of the
Merging Corporation.
ARTICLE IV
The manner and basis of converting the shares of the
corporations participating in the merger shall be as follows:
<PAGE>
(a) Each share of Class A (voting) common stock, par value
$.01 per share, of Vanguard outstanding as of the effective time
of the merger shall automatically and without further action of
the holder thereof be converted into one share of Class A
(voting) common stock, par value $.01 per share, of the Surviving
Corporation.
(b) Each share of Class B (nonvoting) common stock, par
value $.01 per share, of Vanguard outstanding as of the effective
time of the merger shall automatically and without further action
of the holder thereof be converted into one share of Class B
(nonvoting) common stock, par value $.01 per share of the
Surviving Corporation.
(c) Certificates evidencing shares of Class A (voting)
common stock and Class B (nonvoting) of Vanguard outstanding as
of the effective time of the merger shall be deemed for all
purposes to evidence ownership of, and to represent, shares of
the Class A (voting) common stock and Class B (nonvoting) com mon
stock, respectively, of the Surviving Corporation into which the
shares of Class A (voting) common stock and Class B (nonvoting)
common stock of Vanguard formerly evidenced by such certificates
have been converted as herein provided.
(d) Each share of Class A (voting) common stock and Class B
(nonvoting) common stock of Vanguard that is held by Vanguard as
treasury stock, if any, shall be cancelled and retired and shall
thereafter cease to exist.
(e) Each share of common stock, par value $.01 per
share of VCS, outstanding as of the effective time of the merger
shall be automatically and without further action on the part of
the holder thereof be converted into the right to receive $.01 in
cash.
ARTICLE V
The Surviving Corporation may be served with process in the
State of Delaware in any proceeding for enforcement of any
obligation of Vanguard, as well as for enforcement of any
obligation of the Surviving Corporation arising from the merger,
including any suit or other proceeding to enforce the right of
any stockholder as determined in appraisal proceedings pursuant
to the provisions of Section 262 of the General Corporation Law
of the State of Delaware, and it does hereby irrevocably appoint
the Secretary of State of Delaware as its agent to accept service
of process in any such suit or other proceeding. The address to
which a copy of such process shall be mailed by the Secretary of
State of Delaware is c/o Stephen R. Leeolou, One North Pointe,
Suite 370, 3101 North Elm Street, Greensboro, North Carolina
27408, until the Surviving Corporation shall have hereafter
designated in writing to said Secretary of State a different
address for such purpose.
<PAGE>
ARTICLE VI
The merger shall be effective upon the filing of Articles of
Merger with the Secretary of State of North Carolina and the
Agreement and Plan of Merger under Section 252 of the General
Corporate Law of the State of Delaware with the Secretary of
State of Delaware. This Plan of Merger may be terminated and the
merger abandoned at any time prior to the effective time of the
Merger by the mutual consent of the Board of Directors of
Vanguard and VCS, or by the Board of Directors of Vanguard if any
holders of the outstanding Class A (voting) common stock and the
outstanding Class B (nonvoting) common stock of Vanguard shall
have made a written demand for appraisal of their shares prior to
the vote by the stockholders of Vanguard on the Merger, have not
voted in favor of or consented to the Merger, and have demanded
in writing the appraisal of their shares in accordance with
Section 262 of the Delaware General Corporation Laws.
<PAGE>
ARTICLES OF AMENDMENT TO THE CHARTER OF
VANGUARD CELLULAR SYSTEMS, INC.
The undersigned corporation hereby executes these Articles of
Amendment for the purpose of amending its charter:
I.
The name of the corporation is Vanguard Cellular Systems, Inc.
II.
The shareholders of Vanguard Cellular Systems, Inc. have duly adopted the
following resolution:
RESOLVED, that the following amendments to the Articles of
Incorporation of the corporation be and hereby are approved and
adopted:
Articles VII, VIII and IX are hereby renumbered IX, X and XI and a
new Article VII and Article VIII are hereby inserted as follows:
VII.
(A) As used in this Article VII, the term "Person"
includes any person, firm or corporation; any person, firm or
corporation controlling that Person, controlled by that
Person, or under common control with that Person; and any
group of which that Person or any of the foregoing persons,
firms or corporations are members, or any other group
controlling that Person, controlled by that Person, or under
common control with that Person. As used herein the term
"group" includes persons, firms and corporations acting in
concert, whether or not as a formal group. The term "equity
security" means any shares of stock or similar security, any
security convertible, with or without consideration, into such
a security, or carrying any warrant or right to subscribe to
or to purchase such a security; or any such warrant or right.
(B) Except as authorized by section (D) of this
Article VII, if, as of the record date for the
determination of the identity of the
<PAGE>
shareholders of the corporation entitled to notice and to
vote on such transaction, any Person is the record or
benefici al owner, directly or indirectly, of more than ten
per cent (10%) of any class of equity security of the
corporat ion, the affirmat ive vote of the holders of
two-thirds (66-2/3% ) of the shares of stock of the
corporation then entitled to vote in elections of directors
shall be required for (1) the merger or consolidation of
the corporat ion with that Person; or (2) the sale, lease,
or exchange of substant ially all of the assets of the
corporat ion or of that Person to the other; or (3) any
dissolution of the corporation. This affirmative vote is in
addition to any vote otherwise required by North Carolina
law or by any agreement between the corporation and any
national securities exchange.
(C) The Board of Directors of the corporation
shall have the power and duty to determine for purposes
of this Article VII, on the basis of information known
to the corporation, whether (1) the purported holder of
record or beneficial owner of any class of equity
security of the corporation is a "Person" within the
meaning of section (A); (2) whether such Person in fact
holds of record or owns beneficially more than ten per
cent (10%) of any class of equity security of the
corporation; and (3) whether the approval of the Board
of Directors referred to in section (D) has been
obtained. Any such determination by the Board of
Directors shall be conclusive and binding for all
purposes of this Article VII.
(D) The provisions of this Article VII shall not
apply to (1) any one of the transactions specified in
section (B) if the Board of Directors of the corporation
shall by resolution, by a vote of a majority of its
members then in office other than such Person, have
approved such transaction and recommended its approval
by the shareholders; or (2) any merger or consolidation
of the corporation with, or any sale, lease or exchange
to the corporation or any of its subsidiaries of any of
the assets of, any corporation of which a majority of
the outstanding shares of stock entitled to vote in
elections of directors of such other corporation is
owned of record or beneficially by the corporation and
its subsidiaries.
-2-
<PAGE>
(E) No amendment of the Articles of Incorporation
of the corporation shall amend, alter, repeal or change
any of the provisions of this Article VII, unless the
amendment effecting such amendment, alteration, change
or repeal shall receive the affirmative vote of the
holders of two-thirds (66-2/3%) of the shares of capital
stock of the corporation then entitled to vote in
elections of directors.
VIII.
Notwithstanding any other provision of the
Articles of Incorporation or the Bylaws of the
corporation, the Board of Directors of the corporation
shall have the power to adopt, amend or repeal the
bylaws of the corporation except to the extent limited
by law. The shareholders of the corporation may
exercise their power to adopt, amend or repeal the
bylaws of the corporation only by the affirmative vote
of the holders of at least two-thirds (66-2/3%) of the
outstanding shares of capital stock of the corporation
entitled to vote generally in the election of directors
(considered for this purpose as one class and
notwithstanding that some lesser percentage may be
permitted by law, or permitted or required by the
Articles of Incorporation or the bylaws of the
corporation).
No amendment of the Articles of Incorporation of
the corporation shall amend, alter, repeal or change any
of the provisions of this Article VIII, unless the
amendment effecting such amendment, alteration, change
or repeal shall receive the affirmative vote of the
holders of two-thirds (66-2/3%) of the shares of capital
stock of the corporation then entitled to vote in
elections of directors.
III.
The Amendments to the Articles of Incorporation of Vanguard Cellular
Systems, Inc. set forth in the preceding resolution were duly adopted by
the shareholders on the 22nd day of April, 1987 in the manner prescribed
by law and by the Bylaws of the corporation.
IV.
The total number of shares of the corporation
-3-
<PAGE>
outstanding at the time of such amendments was 8,346,542 shares of
Class A (voting) Common Stock; and the number of shares entitled to vote
thereon was 8,346,542.
V.
All outstanding shares of the corporation are of one class.
VI.
The number of shares voted for such amendments was 6,444,088; and
the number of shares voted against such amendments was zero.
VII.
No exchange, reclassification or cancellation of issued shares will
be effected as a result of these amendments.
VIII.
No change in the amount of stated capital of the corporation will be
effected by these amendments.
IX.
The amendments herein effected do not give rise to dissenters'
rights to payment for the reason that the only effect of the amendments
is to change the vote requirements for approval of certain business
combinations and for amending the bylaws.
IN WITNESS WHEREOF, these Articles of Amendment are signed by the
President and Secretary of the corporation this 18th day of May, 1987.
VANGUARD CELLULAR SYSTEMS, INC.
By: /s/ Haynes G. Griffin
Haynes G. Griffin, President
By: /s/ Stephen R. Leeolou
Stephen R. Leeolou, Secretary
-4-
<PAGE>
NORTH CAROLINA
GUILFORD COUNTY
I, Deborah D. Brown, a Notary Public, do hereby certify
that on this 18th day of May, 1987, personally appeared before me Haynes
G. Griffin and Stephen R. Leeolou, each of whom being by me first duly
sworn, declared that he signed the foregoing document in the capacity
indicated, that he was authorized so to sign, and that the statements
therein contained are true.
Deborah D. Brown
Notary Public
My Commission Expires:
November 20, 1990
-5-
<PAGE>
ARTICLES OF AMENDMENT TO THE CHARTER OF
VANGUARD CELLULAR SYSTEMS, INC.
The undersigned corporation hereby executes these Articles of
Amendment for the purpose of amending its charter:
1. The name of the corporation is Vanguard Cellular Systems, Inc.
2. On October 12, 1987, the shareholders duly approved and adopted the
following resolutions amending the Articles of Incorporation of Vanguard
Cellular Systems, Inc. in the manner prescribed by law and by the bylaws
of the corporation:
RESOLVED, that Article IV of the Articles of Incorporation of
Vanguard Cellular Systems, Inc. be and the same are hereby amended
to read in its entirety as follows:
IV.
The aggregate number of shares which the corporation shall
have authority to issue is 31,000,000 divided into two classes.
The designation and number of shares of each class and the par
value of the shares of each class are as follows:
Class No. of Shares Par Value Per Share
Common 30,000,000 $.01
Preferred 1,000,000 $.01
The preferences, limitations and relative rights of the class
of preferred stock or any series thereof hereinabove authorized
shall be fixed and the voting rights may be limited or denied (to
the extent permitted by law) by the Board of Directors of the
corporation.
RESOLVED FURTHER, that the Articles of Incorporation of
Vanguard Cellular Systems, Inc. be and the same are hereby further
amended to add a new Article X to read in its entirety as follows:
<PAGE>
X.
No director of this corporation shall be liable for monetary
damages for breach of his duty as a director arising out of any
legal action whether by or in the right of the corporation or
otherwise, except (i) acts or omissions not made in good faith that
the director at the time of such breach knew or believed were in
conflict with the best interest of the corporation, (ii) any
liability under Section 55-32 of the General Statutes of North
Carolina, (iii) any transaction from which the director derived an
improper personal benefit, or (iv) acts or omissions occurring
prior to the date of the effectiveness of these Articles of
Amendment.
3. The total number of shares of the corporation outstanding at the
time such amendments were adopted was 9,223,849 shares of Class A common
stock, par value $.01 per share; and the number of shares entitled to
vote thereon was 9,223,849 shares of Class A common stock. No shares
were entitled to vote as a class.
4. The number of shares of Class A common stock voted for such
amendments was 6,316,002 and the number of shares voted against such
amendments was 47,226; 195,101 shares abstained from voting.
5. As a result of these amendments, each of the issued and outstanding
shares of the corporation's Class A common stock, par value $.01 per
share, shall be redesignated one share of common stock, par value $.01
per share, of the corporation without further action by the corporation
or the shareholders. Holders of the Class A common stock will not be
required to surrender their certificates in exchange for new
certificates, and said certificates shall hereafter represent shares of
the corporation's common stock, par value $.01 per share. The rights
and privileges of common stock shall be identical to the rights and
privileges of Class A common stock.
6. No change in the amount of stated capital of the corporation will
be effected by these amendments.
7. The amendments herein effected do not give rise to dissenters'
rights to payment for the reason that the only effect of the amendments
is to eliminate an authorized class of nonvoting common stock, none of
which has ever been issued; to redesignate the present class of Class A
common stock to common
<PAGE>
stock without changing the rights or preferences thereof, said change
being made to clarify that only one class of common stock will be
authorized following effectiveness of this Amendment; to authorize
additional common stock and a new class of preferred stock; and to add a
provision limiting directors' liability.
IN WITNESS WHEREOF, these Articles of Amendment are signed by the
Vice President and Assistant Secretary of the corporation this 19th day
of October, 1987.
VANGUARD CELLULAR SYSTEMS, INC.
By: /s/ L. Richardson Preyer, Jr.
L. Richardon Preyer, Jr.
Vice President
By: /s/ Richard C. Rowlenson
Richard C. Rowlenson
Assistant Secretary
NORTH CAROLINA
GUILFORD COUNTY
I, Sybil M. Moss, a Notary Public, do hereby certify that on this
19 day of October, 1987, personally appeared before me L. Richardson
Preyer, Jr. and Richard C. Rowlenson, each of whom being by me first
duly sworn, declared that he signed the foregoing document in the
capacity indicated, that he was authorized so to sign, and that the
statements therein contained are true.
Sybil M. Moss
Notary Public
My Commission Expires:
SYBIL M. MOSS
NOTARY PUBLIC
GUILFORD COUNTY,NC
Commission Expires 3/27/88
-3-
<PAGE>
ARTICLES OF MERGER
OF
FINCH COMMUNICATIONS CORPORATION
INTO
VANGUARD CELLULAR SYSTEMS, INC.
The undersigned foreign and domestic corporations hereby
execute these Articles of Merger for the purpose of merging Finch
Communications Corporation, a South Carolina corporation, into
Vanguard Cellular Systems, Inc., a North Carolina corporation:
ARTICLE I
The Plan of Merger approved by the Board of Directors and the
shareholders of Finch Communications Corporation pursuant to
Section 33-17-30 of the South Carolina Business Corporations Act
and by the Board of Directors of Vanguard Cellular Systems, Inc.
pursuant to Sections 55-106 and 55-108 of the North Carolina
Business Corporation Act is attached hereto and made a part hereof
as Appendix A.
ARTICLE II
This merger is permitted by the laws of the State of South
Carolina, which are the laws under which Finch Communications
Corporation is organized.
ARTICLE III
The number of shares of Finch Communications Corporation
capital stock outstanding is 764.34 shares of common stock, par
value $100.00 per share, which is the only class of stock entitled
to vote. The number of shares of Vanguard Cellular Systems, Inc.
outstanding is 9,873,773 shares of common stock, par value $.01 per
share.
ARTICLE IV
(a) By action of the Board of Directors of Finch
Communications Corporation duly taken as of February 11, 1986, as
Supplemented by the action of said Board taken November 27, 1987,
and by action of the shareholders of Finch Communications
Corporation duly taken as of February 11, 1986, as supplemented by
the action of said shareholders taken November 27, 1987, the Plan
<PAGE>
of Merger was approved by a vote of 764.34 shares of common stock
for and no shares against said Plan of Merger.
(b) By action of the Board of Directors of Vanguard Cellular
Systems, Inc. duly taken as of February 11, 1986, as supplemented
by later action of said Board, the Plan of Merger was approved.
Pursuant to Section 55-108.1(b) of the General Statutes of North
carolina, no approval of the Plan of Merger by the shareholders of
Vanguard Cellular Systems, Inc. was required for the reason that
(i) the Plan of Merger does not provide for any changes in the
charter of Vanguard Cellular Systems, Inc., (ii) each share of
Vanguard Cellular Systems, Inc. outstanding immediately prior to
the merger becoming effective shall remain outstanding immediately
after the merger as an identical share of Vanguard Cellular
Systems, Inc., (iii) no shares, securities or obligations
convertible into common shares of Vanguard Cellular Systems, Inc.
are to be issued or delivered under the Plan of Merger, and (iv)
the authorized unissued common shares of Vanguard Cellular Systems,
Inc. to be issued or delivered under the Plan of Merger do not
exceed twenty percent (20%) of the common shares of Vanguard
Cellular Systems, Inc. outstanding immediately prior to the
effective date of the merger.
IN WITNESS WHEREOF, the Articles of Merger are signed by the
President and Secretary of each of the undersigned corporations,
this 3rd day of November, 1987.
FINCH COMMUNICATIONS
CORPORATION
By: /s/ Raymon R. Finch, Jr.
Raymon R. Finch, Jr.
President
By: /s/ Michael T. Finch
Michael T. Finch
Secretary
VANGUARD CELLULAR SYSTEMS, INC.
By: /s/ Haynes G. Griffin
Haynes G. Griffin
President
By: /s/ Stephen R. Leeolou
Stephen R. Leeolou
Secretary
-2-
<PAGE>
STATE OF NORTH CAROLINA
COUNTY OF GUILFORD
Haynes G. Griffin and Stephen R. Leeolou, President and
Secretary, respectively, of Vanguard Cellular Systems, Inc., being
first duly sworn, each deposes and says that he signed the
foregoing Articles of Merger in the capacity indicated, that he was
authorized so to sign, and that the statements therein contained
are true.
/s/ Haynes G. Griffin
Haynes G. Griffin, President
/s/ Stephen R. Leeolou
Stephen R. Leeolou, Secretary
Subscribed and sworn to before me
this 3rd day of December, 1987.
Notary Public
My Commission Expires:
STATE OF SOUTH CAROLINA
COUNTY OF CHARLESTON
Raymon R. Finch, Jr. and Michael T. Finch, President and
Secretary, respectively, of Finch Communications Corporation, being
first duly sworn, each deposes and says that he signed the
foregoing Articles of Merger in the capacity indicated, that he was
authorized so to sign, and that the statements therein contained
are true.
/s/ Raymon R. Finch
Raymon R. Finch, Jr. President
/s/ Michael T. Finch
Michael T. Finch, Secretary
Subscribed and sworn to before me
this 27th day of November, 1987.
/s/
Notary Public for South Carolina
My Commission Expires: 6/19/96
-3-
<PAGE>
APPENDIX A
PLAN OF MERGER
OF
FINCH COMMUNICATIONS CORPORATION
INTO
VANGUARD CELLULAR SYSTEMS, INC.
The following Plan of Merger provides for the merger of Finch
Communications Corporation, a South Carolina corporation (the "Company"), into
Vanguard Cellular Systems, Inc., a North Carolina corporation ("Vanguard").
I.
The corporate existence of Vanguard, with all its purposes, powers and
objects, shall continue unaffected and unimpaired by the merger, and the
corporate identity and existence of the Company (sometimes referred to herein
as the "Merging Corporation") shall be merged into Vanguard, which shall be
the surviving corporation and which is sometimes referred to herein as the
"Surviving Corporation."
II.
The name of the Surviving Corporation shall be Vanguard Cellular
Systems, Inc., and it shall be a corporation governed by the laws of the State
of North Carolina.
III.
The terms and conditions of the merger shall be as follows:
(a) The Articles of Incorporation and bylaws of Vanguard as of
the effective time of the merger shall be the Articles of Incorporation and
bylaws of the Surviving Corporation until altered, amended or repealed as
provided therein.
(b) The directors of Vanguard as of the effective time of the
merger shall be the directors of the Surviving Corporation until their
successors are elected or appointed according to the bylaws of the
Surviving Corporation.
(c) The officers of Vanguard as of the effective time of the
merger shall be the officers of the Surviving Corporation until their
successors are elected or appointed according to the bylaws of the
Surviving Corporation.
<PAGE>
(d) Except insofar as the same may be continued by law or in
order to carry out the purposes of this Plan of Merger, and except as
continued in and merged into the Surviving Corporation, the separate
existence of the Merging Corporation shall cease as of the effective
time of the merger and the Surviving Corporation shall have and possess
all of the rights, privileges, powers, immunities and franchises and all
property of the Merging Corporation, and shall be responsible and liable
for all debts, duties, contracts, liabilities and obligations of the
Merging Corporation.
IV.
The manner and basis of converting the shares of the corporations
participating in the merger shall be as follows:
(a) Each share of common stock, par value $.01 per share, of
Vanguard, outstanding as of the effective time of the merger,
shall be unchanged as a result of the merger and shall remain one
(1) outstanding share of common stock, par value $.01 per share,
of the Surviving Corporation.
(b) Each share of Common Stock, par value $100.00 per share,
of the Company, outstanding as of the effective time of the
merger, shall automatically and without further action of the
holder thereof be converted into 52.332731 shares of Common Stock,
par value $.01 per share, of Vanguard.
(c) No fractional shares shall be issued in the merger. Any
shareholder of the Merging Corporation who would otherwise be
entitled to receive a fractional share shall receive an additional
whole share of common stock, par value $.01 per share, of
Vanguard, if he would be entitled to five-tenths (.5) or more of a
fractional share; and any such shareholder who would receive less
than five-tenths (.5) of a fractional share shall not receive any
consideration for his fractional interest.
V.
As soon as practicable after the effective date of the merger, each
holder of a certificate or certificates that prior thereto represented validly
issued and outstanding shares of the capital stock of the Merging Corporation
shall surrender such certificate or certificates to Vanguard and shall receive
in exchange therefor a certificate representing the number of shares of
Vanguard common stock into which the shares of capital stock theretofore
represented by the surrendered certificate or certificates shall have been
converted pursuant to the merger. Until so surrendered, each certificate
that, as of such effective date, represents issued and outstanding shares of
capital stock of the Merging Corporation shall be deemed for all corporate
purposes to evidence ownership of the number of shares of Vanguard common
stock into which the shares of such Company's capital stock shall have been
<PAGE>
converted in the merger; provided, however, that no dividends or other
distributions declared with respect to Vanguard common stock shall be paid to
the holder of any unsurrendered certificate for the capital stock of the
Merging Corporation until such holder shall surrender such certificate, at
which time the holder shall be paid the amount of dividends and other
distributions, without interest, which theretofore became payable with respect
to the shares of Vanguard common stock issuable upon surrender of such
certificate.
VI.
This Plan of Merger may be terminated and the merger provided for herein
may be abandoned upon termination of the Agreement and Plan of Merger dated
February 12, 1986, as extended and amended, among the parties hereto.
<PAGE>
ARTICLES OF MERGER
OF NATIONAL CELLULAR COMMUNICATIONS CORP.
INTO
VANGUARD CELLULAR SYSTEMS, INC.
The undersigned domestic and foreign corporations hereby
execute these Articles of merger for the purpose of merging them
into one of such coporations:
ARTICLE I
The name of each of the undersigned corporations and the
state in which it is organized are as follows:
Name of Corporation State
Vanguard Cellular Systems, Inc. North Carolina
National Cellular Communications Corp. Delaware
Article II
The laws of the state of Delaware under which National
Cellular Communications Corp. is organized permit such merger.
Article III
The name of the surviving corporation shall be Vanguard
Cellular Systems, Inc., and it shall be governed by the laws of
the State of North Carolina.
Article IV
The Plan of Merger attached hereto as Appendix A was duly
adopted by the Board of Directors of Vanguard Cellular Systems,
Inc., a certified copy of which is attached as Exhibit 1, in the
manner prescribed by the North Carolina business Corporation Act
(1955, c. 1371, s. 1.). The Plan of Merger does not provide for
any changes in the charter of, or the issuance of any shares by,
Vanguard Cellular Systems, Inc., and each share of Vanguard
Cellular Systems, Inc., outstanding immediately prior to the
merger becoming effective will remain outstanding immediately
after the merger as an identical share of the surviving
corporation. Accordingly, pursuant to Section 55-lO8.l(b) of the
North Carolina Business Corporation Act, no shareholder approval
by the shareholders of Vanguard Cellular Systems, Inc., of the
Plan of Merger was required.
<PAGE>
Article V
The Plan of Merger was approved by the Board of Directors of
National Cellular Communications Corp., a certified copy of which
is attached as Exhibit 2. Pursuant to Section 253(a) of the
Delaware General Corporation Law, no shareholder approval by the
shareolders Of National Cellular Communications Corp. Was
required.
IN WITNESS WHEREOF, these Articles of Merger are signed by on
behalf of each of the undersigned corporations, as of the 23rd
day of June 1988.
VANGUARD CELLULAR SYSTEMS, INC.
By: /s/ Haynes G. Griffin
Haynes G. Griffin
President
(Corporate Seal)
ATTEST:
/s/ Stephen R. Leeolou
Stephen R. Leeolou, Secretary
NATIONAL CELLULAR COMMUNICATIONS CORP.
By: /s/ Haynes G. Griffin
Haynes G. Griffin
President
(Corporate Seal)
ATTEST:
/s/ Stephen R. Leeolou
Stephen R. Leeolou, Secretary
State of North Carolina
County of Guilford
This is to certify that on this 23rd day of June, 1988, before
me, a notary public, personnally appeared Haynes G. Griffin and
Stephen R. Leeolou, each of whom, being by me sworn, declared that
he signed the foregoing document in the capacity indicated, that he
was authorized so to sign, and that the statements therein
contained are true.
Witness my hand and official seal, this 23rd day of June 1988.
Ellen K. Baldwin
Notary Public 10-4-91
(Seal)
<PAGE>
APPENDIX A
AGREEMENT
AND
PLAN OF MERGER
OF
NATIONAL CELLULAR COMMUNICATIONS CORP.
INTO
VANGUARD CELLULAR SYSTEMS, INC.
The following Plan of Merger provides for the merger
of National Cellular Communications Corp., a Delaware
corporation ( NCC ), into Vanguard Cellular Systems, Inc., a
North Carolina corporation ( Vanguard ). NCC is a
wholly-owned subsidiary of Vanguard.
Article I
The corporate existence of Vanguard, with all its
purposes, powers and objects, shall continue unaffected and
unimpaired by the merger. The corporate identity and
existence of NCC shall be merged into Vanguard.
Article II
The name of the Surviving Corporation shall be
Vanguard Cellular Systems, Inc.
Article III
The terms and conditions of the merger shall be as
follows:
(a) The bylaws of Vanguard as of the effective date
of the merger shall be the bylaws of the Surviving
Corporation until altered, amended or repealed as provided
therein.
(b) The directors of Vanguard as of the effective
time of the merger shall be the directors of the Surviving
Corporation until their successors are elected or appointed
according to the bylaws of the Surviving Corporation.
(c) The officers of Vanguard as of the effective
time of the merger shall be the officers of the Surviving
Corporation until their successors are elected or appointed
according to the bylaws of the Surviving Corporation.
(d) Except insofar as the same may be continued by
law or in order to carry out the purposes of this Plan of
Merger, and except as continued in and merged into the
Surviving Corporation, the separate existence of NCC shall
cease as of the effective time of the merger and the
Surviving Corporation shall have and possess all of the
rights, privileges, powers, immunities and franchises and
all property of NCC, and shall be responsible and liable for
all debts, duties, contracts, liabilities and obligations of
NCC.
<PAGE>
-2-
Article IV
The Surviving Corporation may be served with process
in the State of Delaware in any proceeding for enforcement
of any obligation of Vanguard, as well as for enforcement of
any obligation of the Surviving Corporation arising from the
merger, including any suit or other proceeding to enforce
the right of any stockholder as determined in appraisal
proceedings pursuant to the provisions of Section 262 of the
General Corporation Law of the State of Delaware, and it
does hereby irrevocably appoint the Secretary of State of
Delaware as its agent to accept service of process in any
such suit or other proceeding. The address to which a copy
of such process shall be mailed by the Secretary of State of
Delaware is c/o Stephen R. Leeolou, One North Pointe, Suite
300, 3101 North Elm Street, Greensboro, North Carolina
27408, until the Surviving Corporation shall have hereafter
designated in writing to said Secretary of State a different
address for such purpose.
Article V
Vanguard makes no provision for conversion of the
common stock of NCC into Vanguard. Vanguard as the sole
shareholder of NCC agrees to the cancellation of certificate
No. 1 issued to Vanguard Cellular Systems, Inc. in the
amount of One Thousand (1,000) shares of the common stock of
NCC, par value One Dollar ($1.00) per share.
IN WITNESS WHEREOF, this Plan of Merger is signed by
and on behalf of each of the undersigned corporations as of
the 23rd day of June 1988.
VANGUARD CELLULAR SYSTEMS, INC.
By: /s/ Haynes G. Griffin
Haynes G. Griffin, President
(Corporate Seal)
ATTEST:
/s/ Stephen R. Leeolou
Stephen R. Leeolou, Secretary
NATIONAL CELLULAR COMMUNICATIONS CORP.
By: /s/ Haynes G. Griffin
Haynes G. Griffin, President
(Corporate Seal)
ATTEST:
/s/ Stephen R. Leeolou
Stephen R. Leeolou, Secretary
<PAGE>
-3-
State of North Carolina
County of Guilford
This is to certify that on this 23rd day of June,
1988, before me, a notary public, personally appeared Haynes
Griffin and Stephen Leeolou, each of whom, being by me
sworn, declared that he signed the foregoing document in the
capacity indicated, that he was authorized so to sign, and
that the statements therein contained are true. Witness my
hand and official seal, this 23rd day of June, 1988.
/s/ Ellen K. Baldwin
Notary Public 10/4/91
(Seal)
<PAGE>
Exhibit 1
CERTIFICATE OF THE SECRETARY
OF
VANGUARD CELLULAR SYSTEMS, INC.
(a North Carolina Corporation)
I, Stephen R. Leeolou, the Secretary of Vanguard
Cellular Systems, Inc., hereby certify that the Agreement
and Plan of Merger to which this certificate is attached,
after having been first duly signed on behalf of the
corporation by the President and Secretary under the
corporate seal of said corporation, was duly approved and
adopted at a meeting of the Board of Directors of Vanguard
Cellular Systems, Inc., held on June 23, 1988.
WITNESS my hand and seal of said Vanguard Cellular
Systems, Inc. this 23rd day of June, 1988.
/s/ Stephen R. Leeolou
Secretary
(CORPORATE SEAL)
State of North Carolina
County of Guilford
This is to certify that on this 23rd day of June, 1988,
before me, a notary public, personally appeared Stephen R.
Leeolou who, being by me sworn, declared that he signed the
foregoing document in the capacity indicated, that he was
authorized so to sign, and that the statements therein
contained are true. Witness my hand and official seal, this
23rd day of June, 1988.
/s/ Ellen K. Baldwin
Notary Public 10/4/91
(Seal)
<PAGE>
Exhibit 2
RESOLUTION OF BOARD OF DIRECTORS
OF
NATIONAL CELLULAR COMMUNICATIONS CORP.
(A Delaware Corporation)
The following action was taken by the Board of
Directors of National Cellular Communications Corp. ( NCC )
by this written consent thereto signed by all of the
directors.
RESOLVED, that NCC adopts the Agreement and Plan of
Merger of National Cellular Communications Corp., into
Vanguard Cellular Systems, Inc., and that the officers of
NCC be and hereby are authorized and directed to execute
such documents and instruments, and to take such other
action, as in their judgment may appear necessary or
desirable in order to affect such merger.
Date: June 23, 1988
/s/ Haynes G. Griffin
Haynes G. Griffin, Director
/s/ Stephen R. Leeolou
Stephen R. Leeolou, Director
/s/ L. Richardson Preyer, Jr.
L. Richardson Preyer, Jr., Director
State of North Carolina
County of Guilford
This is to certify that on this 23rd day of June, 1988, a
notary public personally appeared L. Richardson Preyer, Jr.,
Haynes G. Griffin and Stephen R. Leeolou, each of whom,
being by me first duly sworn, declared that he signed the
foregoing document in the capacity indicated, that he was
authorized so to sign, and that the statements therein
contained are true. Witness my hand and official seal, this
23rd day of June, 1988.
/s/ Ellen K. Baldwin
Notary Public
(Seal)
<PAGE>
ARTICLES OF AMENDMENT TO THE CHARTER
OF
VANGUARD CELLULAR SYSTEMS, INC
The undersigned corporation hereby executes these Articles of
Amendment for the purpose of amending its charter:
1. The name of the corporation is Vanguard Cellular Systems,
Inc.
2. The following amendment to the charter of the corporation
was adopted by its shareholders on the 2nd day of May, l989 in the
manner prescribed by law:
RESOLVED, that the charter of this corporation shall be
amended by deleting Article IV in its entirety and inserting
therefor a new Article IV to read as follows:
"IV.
(A) The aggregate number of shares which the corporation
shall have authority to issue is 91,000,000 divided into three
classes. The designation and number of shares of each class and
par value of the shares of each class are as follows:
Class No. of Shares Par Value Per Share
Class A 60,000,000 $.01
Common Stock
Class B 30,000,000 $.01
Common Stock
Preferred Stock 1,000,000 $.01
(B) Except as otherwise set forth below, the rights and
privileges of the Class A Common Stock and the Class B Common Stock
shall be identical in all respects:
(1) Voting. Holders of Class A Common Stock and Class B
Common Stock shall be entitled to vote on all matters to be voted
on by the shareholders of the corporation as follows:
<PAGE>
(i) At any meeting of the shareholders of the corporation,
holders of Class A Common Stock shall be entitled to cast One (1)
vote for each share of Class A Common Stock held of record on the
record date for such meeting on all matters to be voted on by the
shareholders of the corporation at the meeting.
(ii) Except as provided in subparagraph (iii) below, at any
meeting of the shareholders of the corporation, holders of
Class B Common Stock shall be entitled to cast One Tenth (l/lOth)
of one vote for each share of Class B Common Stock held of record
on the record date for such meeting on all matters to be voted on
by the shareholders of the corporation at the meeting.
(iii) Notwithstanding subparagraph (ii) above, at any
meeting of the shareholders of the corporation, holders of Class
B Common Stock shall be entitled to cast One (1) vote for each
share of Class B Common Stock held of record on the record date for
such meeting on such matters to be voted on by the
shareholders of the corporation at the meeting, if any, as to
which, under the North Carolina Business Corporation Act, holders
of Class B Common Stock shall be entitled to cast One (1) vote for
each share of Class B Common Stock held.
(iv) Except as required by law, the holders of Class A
Common Stock and the holders of Class B Common Stock shall vote as
a single class on all matters to be voted on by the shareholders of
the corporation in the manner provided in subparagraphs (i)
through (iii) above.
(2) Dividends. No dividend shall be payable to the holders
of either Class A Common Stock or Class B Common Stock unless at
the same time a dividend equal in kind and amount on a per share
basis shall be payable to the holders of shares of the other class;
provided, however, that dividends to the holders of Class A Common
Stock consisting of Class A Common Stock and dividends to the
holders of Class B Common Stock consisting of Class B Common Stock
shall be deemed to be equal in kind and amount if the number of
shares is equal on a per share basis.
<PAGE>
(C) The preferences, limitations and relative rights of the
class of preferred stock or any series thereof hereinabove
authorized shall be fixed and the voting rights may be limited or
denied (to the extent permitted by law) by the Board of Directors
of the corporation."
3. The number of shares of capital stock of the corporation
outstanding at the time of the adoption of such amendment was
20,430,000 of common stock, par value $0.01 per share; and the
number of shares entitled to vote thereon was 20,430,000.
4. The number of shares voted for such amendment was
13,763,127. The number of shares voted against such amendment was
866,077.
5. Upon the effectiveness of these Articles of Amendment, all
outstanding shares of common stock, par value $.01 per share, shall
be redesignated shares of Class A Common Stock, par value $.01 per
share, and all certificates evidencing common stock, par value $.01
per share, shall be deemed to evidence shares of Class A Common
Stock, par value $.01 per share, without any action by the holder
thereof.
6. The amendment herein effected does not give rise to
dissenter's rights to payment pursuant to Section 55-101(b) of the
General Statutes of North Carolina, for the reason that the
amendment does not change the corporation into a nonprofit
corporation or cooperative organization or adversely affect the
shares of any shareholder.
IN WITNESS WHEREOF, these Articles of Amendment are signed by
the President and Secretary of the corporation, this 10th day of
May, 1989.
VANGUARD CELLULAR SYSTEMS, INC.
By: /s/ Haynes G. Griffin
Haynes G. Griffin
President
By: /s/ Stephen R. Leeolou
Stephen R. Leeolou
Secretary
<PAGE>
NORTH CAROLINA
GUILFORD COUNTY
Haynes G. Griffin and Stephen R. Leeolou, President and
Secretary, respectively, of Vanguard Cellular Systems, Inc.,
Being first duly sworn, each desposes and says that he signed the
foregoing Articles of Amendment in the capacity indicated, that he
was authorized so to sign, and that the statements therein
contained are true.
/s/ Haynes G. Griffin
Haynes G. Griffin
/s/ Stephen R. Leeolou
Stephen R. Leeolou
Sworn to and subscribed
before me this 10th day of
May, 1989.
Jean A. Jones
Notary Public
My Commission Expires:
2-13-94
<PAGE>
CERTIFICATE OF CHANGE OF LOCATION
OF REGISTERED OFFICE
For the Corporations Listed Below
The undersigned, Stephen R. Leeolou, being the registered agent of
each of the corporations listed below, does hereby certify as follows:
1. The name of each domestic corporation represented by the
undersigned registered agent is as follows:
VANGUARD CELLULAR SYSTEMS, INC.
VANGUARD CELLULAR SYSTEMS OF PENNSYLVANIA, INC.
2. The address at which the undersigned registered agent has
heretofore maintained a registered office for each of the corporations
listed in paragraph 1 above is: No. 1 North Pointe, Suite 370, 3101
North Elm Street, Greensboro, Guilford County, North Carolina 27408.
3. Upon the filing of this Certificate in the office of the
Secretary of State of North Carolina, the registered office for each of
the corporation listed in paragraph 1 above will be transferred to the
following address, and such registered office will thereafter be
maintained at such address:
2002 Pisgah Church Road, Suite 300
Greensboro, Guilford County, North Carolina 27408
IN WITNESS WHEREOF, the undersigned has executed this Certificate,
this the 16th day of July, 1989.
/s/ Stephen R. Leeolou
Stephen R. Leeolou
<PAGE>
State of North Carolina
Department of the Secretary of State
ARTICLES OF MERGER OR SHARE EXCHANGE
Pursuant to (section mark)55-11-05 of the General Statutes of
North Carolina, the undersigned corporation as the surviving
corporation in a merger or the acquiring corporation in a
share exchange, as the case may be, hereby submits the
following Articles of Merger or Share Exchange.
1. The name of the surviving or acquiring corporation is
Vanguard Cellular Systems, Inc., a corporation
organized under the laws of North Carolina; the name
of the merged or acquired corporation is Vanguard
Cellular Systems of Coastal Carolina, Inc., a
corporation organized under the laws of North
Carolina.
2. Attached is a copy of the Plan of Merger or Share
Exchange that was duly adopted in the manner
prescribed by law by the board of directors of each of
the corporations participating in the merger or share
exchange. See Exhibit A
3. With respect to the surviving/acquiring corporation
(check either a or b, whichever is applicable):
a. X Shareholder approval was not required for the
merger or share exchange;
b. Shareholder approval was required for the merger or
share exchange, and was as follows:*
(i) The designation, number of outstanding
shares, and number of votes entitled to be
cast by each voting group entitled to vote
separately on the Plan of Merger or Share
Exchange were as follows;
<TABLE>
<CAPTION>
Designation of Number of Number of Votes
Class or Series Outstanding Shares Entitled to be Cast
<S> <C> <C>
</TABLE>
(ii) (Complete either (a) or (b))
(a) The total number of votes cast for
and against the Plan of Merger or Share
Exchange by each voting group entitled to
vote on the merger or share exchange was
as follows:
Designation of Number of Votes Cast
Class or Series For Against
(b) The total number of undisputed votes
cast for the Plan of Merger or Share
Exchange by each voting group was
sufficient for approval by that
voting group, and was as follows:
Designation of Number of Undisputed
Class or Series Votes Cast For
<PAGE>
ARTICLES OF MERGER OR SHARE EXCHANGE
Page 2
4. With respect to the merged/acquired corporation (check
either a or b, whichever is applicable):
a) Shareholder approval was not required for the
merger or share exchange;
b) X Shareholder approval was required for the merger
or share exchange, and was as follows:
(i) The designation, number of outstanding
shares, and number of votes entitled to
be cast by each voting group entitled to
vote separately on the Plan of Merger or
Share Exchange were as follows:*
Designation of Number of Number of Votes
Class or Series Outstanding Shares Entitled to be Cast
Common 1,000 1,000
(ii) (Complete either (a) or (b))
(a) The total number of votes cast for
and against the Plan of Merger or
Share Exchange by each voting group
entitled to vote on the merger or
share exchange was as follows:
Designation of Number of Votes Cast
Class or Series For Against
Common 1,000 -0-
(b) The total number of undisputed votes
cast for the Plan of Merger or Share
Exchange by each voting group was
sufficient for approval by that
voting group, and was as follows:
Designation of Number of Undisputed
Class or Series Votes Cast For
5. These articles will be effective upon filing, unless a
date and/or time is specified: N/A
This the 30th day of November, 1990
Vanguard Cellular Systems, Inc.
Name of Corporation
/s/ Haynes G. Griffin
Signature
Haynes G. Griffin
Type or Print Name and Title
NOTES:
1. Filing fee is $50. One executed original and one exact or conformed
copy of these articles must be filed with the Secretary of State.
2. Certificate(s) of Merger must be filed pursuant to the requirements
of NCGS (section mark)47-18.1.
* If more than one voting group (defined at NCGS (section mark)55-1-40(26))
exist, attach a schedule setting forth the required information for each
voting group.
<PAGE>
EXHIBIT A
PLAN OF MERGER
A. CORPORATIONS PARTICIPATING IN MERGER
Vanguard Cellular Systems, Inc. and Vanguard Cellular
Systems of Coastal Carolina, Inc. propose to merge.
Vanguard Cellular Systems, Inc. will be the surviving
corporation (the Surviving Corporation ).
B. NAME OF SURVIVING CORPORATION
After the merger, the Surviving Corporation will have
the name Vanguard Cellular Systems, Inc.
C. MERGER
Pursuant to the terms and conditions of this Plan,
Vanguard Cellular Systems of Coastal Carolina, Inc. (the
Merging Corporation ) will merge into the Surviving
Corporation. Upon the merger s becoming effective, the
corporate existence of the Merging Corporation will cease,
and the corporate existence of the Surviving Corporation
will continue. The time when the merger becomes effective
is hereinafter referred to as the Effective Date.
D. CONVERSION AND EXCHANGE OF SHARES
On the Effective Date, the outstanding shares of the
Merging Corporation and the Surviving Corporation will be
converted and exchanged as follows:
1. Surviving Corporation. The outstanding
shares of the Surviving Corporation will not be converted or
altered in any manner as a result of the merger and will
remain outstanding as shares of the Surviving Corporation.
2. Merging Corporation. Each outstanding share
of the Merging Corporation will be cancelled.
3. Surrender of Certificates of Merging
Corporation. Each holder of a certificate of the Merging
Corporation will surrender such certificate to the Merging
Corporation on or before the Effective Date, and such
certificates shall be cancelled.
E. ABANDONMENT
After the approval of this Plan of Merger by the board
of directors of the Merging Corporation and the Surviving
Corporation and the shareholders of the Merging Corporation
and at any time prior to filing of the Articles of Merger
with the Secretary of State of North Carolina, the directors
of the Surviving Corporation may, in their discretion,
abandon the merger.
<PAGE>
ARTICLES OF MERGER
of
Sybarite Communications, Inc.,
a South Carolina corporation,
Cellular Nonwireline West Virginia One, Inc.,
a Florida corporation,
Cellular Nonwireline Maine Four, Inc.,
a Florida corporation
Into
Vanguard Cellular Systems, Inc.,
A North Carolina corporation
Pursuant to Section 55-11-03 of the North Carolina Business Corporation
Act, Vanguard Cellular Systems, Inc. (The Surviving Corporation ), hereby
submits these Articles of Merger for the purpose of merging Sybarite
Communication, Inc. ( Sybarite ), Cellular Nonwireline West Virginia One, Inc.
( CNWVOI ) and Cellular Nonwireline Maine Four, Inc. ( CNMFI ) (collectively
the Merging Corporations ) each into the Surviving Corporation:
I. An Agreement and Plan of Merger was duly approved in the manner
prescribed by law by the corporations participating in the merger and is
attached hereto as Exhibit 1.
II. As to the Merging Corporations, the designation and number of shares
outstanding of, and the number of votes entitled to be cast by, each voting
group entitled to vote separately on such Plan were as follows:
Number of Number of
Designation of Shares Votes Entitled
Voting Group Outstanding to be Cast
Sybarite Common Stock 1,078.945 1,078.945
CNWVOI Common Stock 100 100
CNMFI Common Stock 100 100
III. The total number of undisputed votes cast for such Plan by each
voting group of the Merging Corporation were as follows:
Total
Voting Group Voted For
Sybarite Common Stock 1,078.945
CNWVOI Common Stock 100.
CNMFI Common Stock 100.
The number of votes cast for such Plan by each voting group of each of
the listed Merging Corporations were sufficient for approval by that
voting group.
<PAGE>
IV. The effective date of the merger herein provided for in the Plan of
Merger shall be the date of filing.
Dated this the 19th day of October 1994.
Vanguard Cellular Systems, Inc.
By: /s/ Haynes G. Griffin
Haynes G. Griffin,
President
By: /s/ Richard C. Rowlenson
Richard C. Rowlenson,
Assistant Secretary
<PAGE>
_____________________________________________
AGREEMENT AND PLAN OF MERGER
AMONG
SYBARITE COMMUNICATIONS, INC.,
a South Carolina corporation,
CELLULAR NONWIRELINE WEST VIRGINIA ONE, INC.,
a Florida corporation,
CELLULAR NONWIRELINE MAINE FOUR, INC.,
a Florida corporation,
and
RAYMON R. FINCH, JR.,
ROBERT B. BLOW, AND
MARK R. WARNER, AS SHAREHOLDERS
and
VANGUARD CELLULAR SYSTEMS, INC.,
a North Carolina corporation,
AS THE SURVIVING CORPORATION
DATED AS OF JULY 5, 1994
_____________________________________________
<PAGE>
_____________________________________________
AGREEMENT AND PLAN OF MERGER
AMONG
SYBARITE COMMUNICATIONS, INC.,
a South Carolina corporation,
CELLULAR NONWIRELINE WEST VIRGINIA ONE, INC.,
a Florida corporation,
CELLULAR NONWIRELINE MAINE FOUR, INC.,
a Florida corporation,
and
RAYMON R. FINCH, JR.,
ROBERT B. BLOW, AND
MARK R. WARNER, AS SHAREHOLDERS
and
VANGUARD CELLULAR SYSTEMS, INC.,
a North Carolina corporation,
AS THE SURVIVING CORPORATION
DATED AS OF JULY 5, 1994
_____________________________________________
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Section 1. The Mergers . . . . . . . . . . . . . . . . . . . . . . .
2
A. The Mergers . . . . . . . . . . . . . . . . . . . . . . .
2
B. Effect of the Mergers . . . . . . . . . . . . . . . . . .
2
C. Consummation of the Mergers . . . . . . . . . . . . . . .
3
D. Articles of Incorporation; Bylaws; Directors and Officers
3
E. Conversion of Securities . . . . . . . . . . . . . . . . .
3
F. Exchange of Certificates . . . . . . . . . . . . . . . . .
6
Section 2. Representations and Warranties of Sybarite, CNWVO and CNMF
7
A. Organization and Qualification . . . . . . . . . . . . . .
7
B. Authority Relative to this Agreement . . . . . . . . . . .
8
C. Capitalization . . . . . . . . . . . . . . . . . . . . . .
9
D. Litigation . . . . . . . . . . . . . . . . . . . . . . . .
10
E. Compliance with Law . . . . . . . . . . . . . . . . . . .
10
F. Changes . . . . . . . . . . . . . . . . . . . . . . . . .
10
G. Material Misstatements Or Omissions . . . . . . . . . . .
11
H. Financial Statements . . . . . . . . . . . . . . . . . . .
12
I. Absence of Undisclosed Liabilities . . . . . . . . . . . .
12
J. Title to Assets . . . . . . . . . . . . . . . . . . . . .
12
K. Title to Real Property . . . . . . . . . . . . . . . . . .
12
L. Authorizations . . . . . . . . . . . . . . . . . . . . . .
13
M. Labor Matters . . . . . . . . . . . . . . . . . . . . . .
13
N. Proprietary Rights . . . . . . . . . . . . . . . . . . . .
13
O. Contracts . . . . . . . . . . . . . . . . . . . . . . . .
14
P. Environmental Matters . . . . . . . . . . . . . . . . . .
14
Q. Partnerships Matters . . . . . . . . . . . . . . . . . . .
15
R. Tax Matters . . . . . . . . . . . . . . . . . . . . . . .
17
S. Employee Benefit Plans . . . . . . . . . . . . . . . . . .
20
T. Related Party Indebtedness . . . . . . . . . . . . . . . .
20
Section 3. Representations and Warranties of the Shareholders . . . .
20
A. Foreign Person . . . . . . . . . . . . . . . . . . . . . .
20
B. No Withholding . . . . . . . . . . . . . . . . . . . . . .
20
Section 4. Representations and Warranties of the Company. . . . . . .
21
A. Organization and Qualification . . . . . . . . . . . . . .
21
B. Capitalization . . . . . . . . . . . . . . . . . . . . . .
21
C. Authority Relative to Agreement . . . . . . . . . . . . .
21
D. Compliance . . . . . . . . . . . . . . . . . . . . . . . .
22
E. Litigation . . . . . . . . . . . . . . . . . . . . . . . .
22
F. Licensee Qualifications . . . . . . . . . . . . . . . . .
22
G. Continuity of Business Enterprise . . . . . . . . . . . .
22
H. Material Misstatements or Omissions . . . . . . . . . . . 23
i
<PAGE>
I. SEC Reports . . . . . . . . . . . . . . . . . . . . . . . 23
Section 5. Conduct of Business Pending the Mergers . . . . . . . . . 23
Section 6. Additional Agreements . . . . . . . . . . . . . . . . . . 26
A. NovATel Debt . . . . . . . . . . . . . . . . . . . . . . . 26
B. Closing Location and Date . . . . . . . . . . . . . . . . 27
C. Fees and Expenses . . . . . . . . . . . . . . . . . . . . 27
D. Other Actions . . . . . . . . . . . . . . . . . . . . . . 27
E. No Mergers, Consolidations, Sale of Equity . . . . . . . . 28
F. Preserve Accuracy of Representations and Warranties . . . 28
G. Access to Information . . . . . . . . . . . . . . . . . . 28
H. Mason County System . . . . . . . . . . . . . . . . . . . 29
I. Indemnification . . . . . . . . . . . . . . . . . . . . . 29
J. Confidential Information . . . . . . . . . . . . . . . . . 30
K. Closing of Acquisitions . . . . . . . . . . . . . . . . . 30
L. Sterling Debt . . . . . . . . . . . . . . . . . . . . . . 31
Section 7. Conditions. . . . . . . . . . . . . . . . . . . . . . . . 31
A. Conditions to Obligation of Each Party to Effect the Mergers 31
B. Conditions to Obligation of the Company to Effect the Mergers 31
C. Conditions to Obligation of Sybarite, CNWVO and CNMF to Effect
the Mergers . . . . . . . . . . . . . . . . . . . . . . . 32
Section 8. Default and Remedies . . . . . . . . . . . . . . . . . . . 33
A. Opportunity to Cure . . . . . . . . . . . . . . . . . . . 33
B. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 9. Termination, Amendment and Waiver . . . . . . . . . . . . 34
A. Termination . . . . . . . . . . . . . . . . . . . . . . . 34
B. Amendment . . . . . . . . . . . . . . . . . . . . . . . . 34
C. Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 10. General Provisions . . . . . . . . . . . . . . . . . . . . 34
A. Public Statements . . . . . . . . . . . . . . . . . . . . 34
B. Notices . . . . . . . . . . . . . . . . . . . . . . . . . 34
C. Interpretation . . . . . . . . . . . . . . . . . . . . . . 35
D. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . 35
E. Consent to Jurisdiction . . . . . . . . . . . . . . . . . 36
F. Counterparts; Facsimile Execution . . . . . . . . . . . . 36
ii
<PAGE>
Exhibits
Exhibit A Mason County Assets
Exhibit B March Balance Sheets
Exhibit C Operating and Capital Budgets
Exhibit D Indemnification Agreement
iii
<PAGE>
THIS AGREEMENT AND PLAN OF MERGER (the
"Agreement"), dated as of July 5, 1994, is among Sybarite
Communications, Inc., a South Carolina corporation ("Sybarite"),
Cellular Nonwireline West Virginia One, Inc., a Florida corporation
("CNWVO"), Cellular Nonwireline Maine Four, Inc., a Florida corporation
("CNMF"), Raymon R. Finch, Jr., a resident of the State of Florida
("Finch"), Robert B. Blow, a resident of the State of Tennessee
("Blow"), Mark R. Warner, a resident of the State of Virginia ("Warner")
(Finch, Blow and Warner are sometimes referred to herein as the
"Shareholders") and Vanguard Cellular Systems, Inc., a North Carolina
corporation (the "Company").
RECITALS
a. The respective Boards of Directors of Sybarite, CNWVO,
CNMF and the Company have approved the mergers of Sybarite,
CNWVO, CNMF with and into the Company (each, a "Merger,"
collectively, the "Mergers"), in accordance with the North
Carolina Business Corporation Act (the "North Carolina Act").
b. Sybarite is (i) a limited partner of West Virginia One
Nonwireline Cellular Limited Partnership, a Georgia limited
partnership ("West Virginia One"), owning a 61.2% limited
partnership interest therein, and (ii) a limited partner of
Maine Four Nonwireline Cellular Limited Partnership, a
Georgia limited partnership ("Maine Four"), owning a 73.8%
limited partnership interest therein (West Virginia One and
Maine Four are sometimes hereinafter singularly referred to
as "Partnership" and collectively as the "Partnerships").
The Partnerships own, respectively, among other assets,
licenses issued by the Federal Communications Commission (the
"FCC") to operate non-wireline cellular telephone systems in
the West Virginia 1 - Mason RSA, Market No. 701A operating
under call sign KNKN831 (such system, exclusive of the Mason
County System (as defined herein) is sometimes hereinafter
referred to as the "West Virginia System") and the Maine 4 -
Washington RSA, Market No. 466A operating under call sign
KNKN848 (the "Maine System") (collectively, the "Systems").
c. CNWVO is the sole general partner of West Virginia One
with a 1% general partnership interest therein.
d. CNMF is the sole general partner of Maine Four with a
1% general partnership interest therein.
e. Finch, Blow and Warner own 100% of the issued and
outstanding common stock of Sybarite.
f. Finch owns 100% of the issued and outstanding common
stock of CNWVO.
g. Finch owns 100% of the issued and outstanding common
stock of CNMF.
<PAGE>
h. Prior to the Effective Time (as defined in Section 1(C)
hereof), West Virginia One shall convey to Great Seal
Cellular Limited Partnership ("Great Seal") the
FCC-apportioned Block A cellular telephone license in the
West Virginia County of Mason and the assets listed on
Exhibit A hereto (collectively, the "Mason County System").
i. Concurrently with the Mergers, a wholly owned
subsidiary of the Company will acquire from Sterling Cellular
Limited Partnership, a Delaware limited partnership
("Sterling"), (i) a 37.8% limited partnership interest in
West Virginia One, and (ii) a 25.2% limited partnership
interest in Maine Four (collectively, the transactions set
forth in clauses (i) and (ii) are referred to herein as the
"Acquisitions").
j. For federal income tax purposes, it is intended that
each of the Mergers shall qualify as a reorganization within
the meaning of Section 368(a)(1)(A) of the Internal Revenue
Code of 1986, as amended (the "Code").
k. The parties expect that the Mergers will further
certain of their business objectives, including, without
limitation consolidation of ownership of the non-wireline
cellular system serving the West Virginia 1 and Maine 4 RSAs.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, Sybarite, CNWVO, CNMF,
Finch, Blow, Warner and the Company hereby agree as follows:
Section 1. The Mergers
A. The Mergers. At the Effective Time, in accordance with
this Agreement and the North Carolina Act and the South Carolina
Business Corporation Act (as to Sybarite) (the "South Carolina Act") and
the Florida General Corporation Act (as to CNWVO and CNMF) (the "Florida
Act"), Sybarite, CNWVO and CNMF shall each be merged with and into the
Company, the separate existence of Sybarite, CNWVO and CNMF (except as
may be continued by operation of law) shall cease, and the Company shall
continue as the surviving corporation under the corporate name it
possesses immediately prior to the Effective Time. The Company is
sometimes hereinafter referred to as the "Surviving Corporation."
B. Effect of the Mergers. At the Effective Time, the
Surviving Corporation shall thereupon and thereafter possess all the
rights, privileges, immunities and franchises, of a public as well as of
a private nature, of each of Sybarite, CNWVO, CNMF and the Company (the
"Constituent Corporations"); all property, real, personal and mixed, and
all debts due on whatever account and all choses in action, and all and
every other interest, of or belonging to or due each of the Constituent
Corporations shall be vested in the Surviving Corporation without
further act or deed; and the title to any real estate, or any interest
therein, vested in Sybarite, CNWVO, CNMF, the Company or the Surviving
Corporation shall not revert or be in any way impaired by reason of the
Mergers. The Surviving Corporation shall thenceforth be responsible and
liable for all the liabilities and
2
<PAGE>
obligations of each of the Constituent Corporations so merged; any claim
existing or action or proceeding pending by or against any of the
Constituent Corporations may be prosecuted as if the Mergers had not
taken place, or the Surviving Corporation may be substituted in its
place. The Surviving Corporation shall have all the rights, privileges,
immunities and powers and shall be subject to all the duties and
liabilities of a corporation organized under the North Carolina Act, and
neither the rights of creditors nor any liens upon the respective
properties of the Constituent Corporations and the Surviving Corporation
shall be impaired by the Mergers; all with the effect set forth in the
North Carolina Act.
C. Consummation of the Mergers. As soon as is practicable
after the satisfaction or waiver of the conditions hereinafter set
forth, the parties hereto will cause the Mergers to be consummated by
filing with the Secretary of State of North Carolina, the Secretary of
State of South Carolina and the Secretary of State of Florida
certificates of merger in such form as is required by, and executed in
accordance with, the relevant provisions of the North Carolina Act (the
time of the last of such filings being the "Effective Time"). The
parties shall use their best efforts to ensure that the Effective Time
is the same day as the Closing Date.
D. Articles of Incorporation; Bylaws; Directors and
Officers. The Articles of Incorporation and Bylaws of the Surviving
Corporation shall be the Articles of Incorporation and Bylaws of the
Company, as in effect immediately prior to the Effective Time, until
thereafter amended as provided therein and under the North Carolina Act.
The directors of the Company immediately prior to the Effective Time
will be the initial directors of the Surviving Corporation, and the
officers of the Company immediately prior to the Effective Time will be
the initial officers of the Surviving Corporation, in each case until
their successors are elected and qualified.
E. Conversion of Securities.
1. Merger Consideration. a. Sybarite. At the
Effective Time, by virtue of the Merger and without any action on the
part of Sybarite, the Company, the Surviving Corporation or any of the
holders of any of the common stock of Sybarite, each share of common
stock of Sybarite issued and outstanding immediately prior to the
Effective Time (the "Sybarite Shares") shall be cancelled and
extinguished and be converted into and become solely a right to receive
a pro rata share, based on Sybarite's respective percentage interests in
the Partnerships, of (a) One Million Eight Hundred Thousand Dollars
($1,800,000) in cash and (b) common stock of the Company ("Common
Stock") that is registered under the Securities Act of 1933, as amended,
and which (i) is not subject to any trading restrictions, but (ii) may
be subject to delivery of a prospectus which will be provided by the
Company at the Company's sole expense upon the request of Finch, and
which has a value of Three Million Three Hundred Forty Thousand Two
Hundred Forty Dollars ($3,340,240) (the consideration set forth in
clauses (a) and (b), as adjusted below, collectively being the "Sybarite
Merger Consideration"). For purposes of this Agreement, the value of
each share of Common Stock will equal the average of the high and low
sales prices of the Common Stock for each day during the twenty trading
days ending two trading days prior to the closing (the "Closing") of the
Merger (the "Closing Price").
3
<PAGE>
b. CNWVO. At the Effective Time, by virtue of the
Merger and without any action on the part of CNWVO, the Company, the
Surviving Corporation or any of the holders of any of the common stock
of CNWVO, each share of common stock of CNWVO issued and outstanding
immediately prior to the Effective Time (the "CNWVO Shares") shall be
cancelled and extinguished and be converted into and become solely a
right to receive a pro rata share, based on CNWVO's percentage interest
in West Virginia One, of (a) One Million Eight Hundred Thousand Dollars
($1,800,000) in cash and (b) Common Stock that is registered under the
Securities Act of 1933, as amended, and which (i) is not subject to any
trading restrictions, but (ii) may be subject to delivery of a
prospectus which will be provided by the Company at the Company's sole
expense upon the request of Finch, and which has a value of Three
Million Three Hundred Forty Thousand Two Hundred Forty Dollars
($3,340,240) (the consideration set forth in clauses (a) and (b), as
adjusted below, collectively being the "CNWVO Merger Consideration").
For purposes of this Agreement, the value of each share of Common Stock
will equal the Closing Price.
c. CNMF. At the Effective Time, by virtue of the
Merger and without any action on the part of CNMF, the Company, the
Surviving Corporation or any of the holders of any of the common stock
of CNMF, each share of common stock of CNMF issued and outstanding
immediately prior to the Effective Time (the "CNMF Shares" and
collectively, the Sybarite Shares, the CNWVO Shares and the CNMF Shares
are referred to as the "Shares") shall be cancelled and extinguished and
be converted into and become solely a right to receive a pro rata share,
based on CNMF's percentage interest in Maine Four, of (a) One Million
Eight Hundred Thousand Dollars ($1,800,000) in cash and (b) Common Stock
that is registered under the Securities Act of 1933, as amended, and
which (i) is not subject to any trading restrictions, but (ii) may be
subject to delivery of a prospectus which will be provided by the
Company at the Company's sole expense upon the request of Finch, and
which has a value of Three Million Three Hundred Forty Thousand Two
Hundred Forty Dollars ($3,340,240) (the consideration set forth in
clauses (a) and (b), as adjusted below, collectively being the "CNMF
Merger Consideration," and collectively, the Sybarite Merger
Consideration, the CNWVO Merger Consideration and the CNMF Merger
Consideration are referred to as the "Merger Consideration"). For
purposes of this Agreement, the value of each share of Common Stock will
equal the Closing Price.
d. Balance Sheet Adjustment. (1) The Merger
Consideration will be adjusted (the "Balance Sheet Adjustment") as
described herein to reflect (i) 62.2% of the change in the net balance
of Current Assets and Current Liabilities of West Virginia One, and (ii)
74.8% of the change in the net balance of Current Assets and Current
Liabilities of Maine Four, as shown on their respective balance sheets
as of the Closing Date from the amounts reflected on their respective
balance sheets at March 31, 1994 (the "March Balance Sheets" -- the
March Balance Sheets and all subsequent balance sheets for each
Partnership prepared in accordance with this Agreement are sometimes
hereinafter singularly and collectively referred to as "Balance
Sheets"), copies of which are attached hereto as Exhibit B. "Current
Assets" shall be defined as the items of the same categories as those
current assets on the March Balance Sheets and "Current Liabilities"
shall be defined as the items of the same categories as those current
liabilities on the March Balance Sheets; provided, however, that to the
extent a Partnership acquires after March 31, 1994 assets with a
4
<PAGE>
purchase price not exceeding $30,000 in the aggregate (or greater than
$30,000 upon the consent of the Company, in its sole discretion, and
which shall be acquired by payment of cash) that are included on its
Final Closing Date Balance Sheets (as hereinafter defined) but not
classified as Current Assets thereon, such assets shall be treated as
Current Assets for purposes of calculating the Balance Sheet Adjustment.
The Balance Sheets shall be prepared by Sterling in accordance with the
terms of this Section.
(2) The Balance Sheet Adjustment shall initially
be determined on the Closing Date (the "Tentative Balance Sheet
Adjustment") based on the Balance Sheets as of the last day of the
calendar month immediately preceding the Closing Date (the "Tentative
Closing Date Balance Sheets"). The cash component of the Merger
Consideration will be increased or decreased at Closing to reflect the
Tentative Balance Sheet Adjustment and shall be paid to or borne by the
Shareholders in accordance with the Written Instructions (as defined in
Section 1(F)(1) hereof). The Balance Sheet Adjustment will be finally
determined (the "Final Balance Sheet Adjustment") based on the Balance
Sheets as of the Closing Date (the "Final Closing Date Balance Sheets"),
which shall be delivered to the Company within forty-five (45) days of
the Closing Date. The Company agrees to cooperate fully with Sterling
to allow Sterling access to information necessary for the preparation of
the Final Closing Date Balance Sheets. On or before ten (10) days
following the Company's receipt of the Final Closing Date Balance Sheets
(i) the Company shall pay to the Shareholders in accordance with the
Written Instructions the positive change in the Final Closing Date
Balance Sheets of either or both of the Partnerships from the Tentative
Closing Date Balance Sheets of such Partnership or Partnerships, or (ii)
the Shareholders shall pay to the Company in accordance with the Written
Instructions the negative change in the Final Closing Date Balance
Sheets of either or both of the Partnerships from the Tentative Closing
Date Balance Sheets of such Partnership or Partnerships.
(3) If the Company reasonably believes the
Tentative Balance Sheet Adjustment is materially incorrect, the Closing
shall proceed as scheduled, except that the Company shall, if the
Company does not pay the Shareholders the full amount of the Tentative
Balance Sheet Adjustment at Closing, place an amount equal to the
disputed amount of the Tentative Balance Sheet Adjustment into an
interest-bearing escrow account until the parties have agreed upon the
Tentative Balance Sheet Adjustment or have resolved the dispute pursuant
to subsection (4) below. Any interest earned on the escrow account
shall be divided between the Company, on the one hand, and the
Shareholders, on the other hand, pro rata with the principal amount.
(4) If the Company reasonably disputes the
accuracy of the Final Balance Sheet Adjustment, the Company shall
promptly inform Finch and Sterling of the disputed amount and the basis
for the Company's dispute in reasonable detail. If Sybarite and
Sterling do not agree to modify the Final Balance Sheet Adjustment in
accordance with the Company's position regarding such disputed amount,
the Company, Finch and Sterling shall within ten (10) days submit such
dispute to Arthur Andersen & Co. (the "Referee") for arbitration. Each
of the Company, Sybarite and Sterling shall use all reasonable efforts
to achieve a decision by such Referee as soon as practicable, which
decision shall be final, conclusive and binding on the parties. Any
amounts found owing to a party by the Referee,
5
<PAGE>
plus interest thereon at a rate of eight percent (8%) per annum from the
date such amount would have been paid if there had been no dispute shall
be paid within ten (10) days of the Referee's decision. Each party
shall be responsible for its own fees and expenses in connection with
such arbitration. The fees and expenses of the Referee shall be borne
one half by the Company and one-half by Finch and Sterling.
(5) The Balance Sheets (x) have been and shall
have been maintained in the ordinary course of each Partnership's trade
or business, (y) are and shall be in accordance with generally accepted
accounting principles consistently applied, and (z) do and shall fairly
present the financial positions of the respective Partnerships. The
Balance Sheets shall be prepared consistently with the March Balance
Sheets. The Balance Sheet Adjustment shall be calculated separately for
each of West Virginia One and Maine Four and any such amount relating to
a Partnership shall be paid to or borne by the Shareholders in
accordance with the Written Instructions. The parties hereto
acknowledge and agree that under no circumstances shall the Balance
Sheet Adjustment relating to one Partnership offset or reduce the
consideration paid to any party in connection with the other
Partnership. Any adjustment made in the Merger Consideration will
increase or decrease the cash component of the Merger Consideration.
2. Treasury Shares. As of the Effective Time, (a) all
shares of common stock of Sybarite that are owned by Sybarite as
treasury shares shall be canceled and retired and shall cease to exist;
(b) all shares of common stock of CNWVO that are owned by CNWVO as
treasury shares shall be canceled and retired and shall cease to exist;
and (c) all shares of common stock of CNMF that are owned by CNMF as
treasury shares shall be canceled and retired and shall cease to exist.
3. Waiver of Dissenter's Rights. As the sole shareholders
of Sybarite, each of Finch, Blow and Warner hereby agrees to vote in
favor of the merger of Sybarite into and with the Company and to waive
any and all of his respective rights under Chapter 13 of the South
Carolina Act relating to dissenting shareholders. As the sole
shareholder of CNWVO, Finch hereby agrees to vote in favor of the merger
of CNWVO into and with the Company and to waive any and all of his
rights under Section 607.247 of the Florida Act relating to dissenting
shareholders . As the sole shareholder of CNMF, Finch hereby agrees to
vote in favor of the merger of CNMF into and with the Company and to
waive any and all of his rights under Section 607.247 of the Florida Act
relating to dissenting shareholders.
F. Exchange of Certificates.
1. The Shareholders shall authorize one or more persons to
act as exchange agent (the "Exchange Agent") in effecting the exchange
for the Merger Consideration of certificates (the "Certificates") which,
prior to the Effective Time, represented all the issued and outstanding
Shares. On or before the Effective Time, the Company shall deposit with
the Exchange Agent the Merger Consideration in trust for the benefit of
the holders of the Shares. Upon the surrender of each such Certificate
and the issuance and delivery by the Exchange Agent of the Merger
Consideration in exchange therefor, such Certificates shall forthwith be
cancelled. Until so surrendered and exchanged, each such Certificate
shall
6
<PAGE>
represent solely the right to receive the pro rata share of the Merger
Consideration for the number of Shares represented by such Certificate.
Upon the surrender and exchange of such an outstanding Certificate, the
holder shall receive the amount and type of the Merger Consideration,
without any interest thereon, in accordance with written instructions
executed by all of the Shareholders (the "Written Instructions"). In
addition, upon the written request of any Shareholder (a "Written
Request"), the Merger Consideration otherwise to be paid to such
Shareholder shall be paid or issued by the Exchange Agent to persons
identified by such Shareholder pursuant to a Written Request. Payment of
the Merger Consideration to the Shareholders and a subsequent
distribution on behalf of such Shareholders in accordance with the
Written Instructions shall be considered to be a pro rata distribution
of the Merger Consideration by the Exchange Agent. The Exchange Agent
is entitled to rely on the Written Instructions and any Written Request
in calculating the Merger Consideration to be paid to the Shareholders
or their respective designees. If any cash is to be paid to a name
other than the name in which the Certificate representing Shares
surrendered in exchange therefor is registered, it shall be a condition
to such payment or exchange that the person requesting such payment or
exchange shall pay to the Exchange Agent any transfer or other taxes
required by reason of the payment of such cash to a name other than that
of the registered holder of the Certificate surrendered, or such person
shall establish to the satisfaction of the Exchange Agent that such tax
has been paid or is not applicable. Notwithstanding the foregoing,
neither the Exchange Agent nor any party thereto shall be liable to a
holder of Shares for any Merger Consideration or interest or other
payments made with respect to the Merger Consideration delivered to a
public official pursuant to applicable abandoned property laws.
2. No certificates representing fractional shares of Common
Stock shall be issued upon the surrender for exchange of the
Certificates pursuant to this Section 1(F). In lieu of any such
fractional securities, each holder of Shares who would otherwise have
been entitled to a fraction of a share of Common Stock upon surrender of
Certificates pursuant to this Section 1(F) will be paid cash upon such
surrender in an amount equal to the product of such fraction multiplied
by the Closing Price.
Section 2. Representations and Warranties of Sybarite, CNWVO and
CNMF
Each of Sybarite, CNWVO and CNMF represents and warrants to
the Company, as of the date hereof and at the Effective Time, as
follows:
A. Organization and Qualification. Sybarite is a
corporation duly organized, validly existing and in good standing under
the laws of the State of South Carolina and has the requisite corporate
power to carry on its business as now conducted. Each of CNWVO and CNMF
is a corporation duly organized, validly existing and in good standing
under the laws of the State of Florida and has the requisite corporate
power to carry on its respective business as now conducted. Each of
Sybarite, CNWVO and CNMF is duly qualified as a foreign corporation to
do business, and is in good standing, in each jurisdiction where the
character of its properties owned or leased or the nature of its
activities makes such qualification necessary, except for failures to be
so qualified or in good standing which would not, in the aggregate, have
a material adverse effect on such corporations. Copies of
7
<PAGE>
the Articles of Incorporation and Bylaws of Sybarite, CNWVO and CNMF
delivered to the Company are accurate and complete.
B. Authority Relative to this Agreement.
1. Each of Sybarite, CNWVO and CNMF has the requisite
corporate power and authority to enter into this Agreement and to
perform its respective obligations hereunder. The execution and
delivery of this Agreement by each of Sybarite, CNWVO and CNMF and the
consummation by each of Sybarite, CNWVO and CNMF of the transactions
contemplated hereby have been duly authorized by the respective
shareholders and Boards of Directors of Sybarite, CNWVO and CNMF and no
other corporate proceeding on the part of Sybarite, CNWVO and CNMF,
respectively, is necessary to authorize the execution, delivery and
performance of this Agreement and the transactions contemplated hereby.
This Agreement has been duly executed and delivered by each of Sybarite,
CNWVO and CNMF and constitutes a valid and binding obligation of each of
them, enforceable against each of them in accordance with its terms,
except to the extent that its enforceability may be limited by
applicable bankruptcy, insolvency, reorganization or other laws
affecting the enforcement of creditors' rights generally or by general
equitable principles.
2. Neither the execution and delivery of this Agreement by
any of Sybarite, CNWVO or CNMF nor the consummation of the transactions
contemplated hereby nor compliance by any of Sybarite, CNWVO or CNMF
with any of the provisions hereof will (i) violate, conflict with, or
result in a breach of any provision of, or constitute a default (or an
event which, with notice or lapse of time or both, would constitute a
default) under, or result in the termination of, or accelerate the
performance required by, or result in a right of termination or
acceleration under, or result in the creation of any lien, security
interest, charge or encumbrance upon any of the properties or assets of
Sybarite, CNWVO and CNMF, respectively, under, any of the terms,
conditions or provisions of (x) the Articles of Incorporation or Bylaws
of Sybarite, CNWVO or CNMF, respectively, or (y) any material note,
bond, mortgage, indenture, deed of trust, license, lease, agreement or
other instrument or obligation to which any of Sybarite, CNWVO and CNMF
is a party, or to which any of them, or any of their respective
properties or assets, may be subject other than the NovAtel Debt
(defined in Section 6(A) below) and the Sterling Debt (defined in
Section 6(L) below), or (ii) subject to compliance with the statutes and
regulations referred to in the next paragraph, violate any judgment,
ruling, order, writ, injunction, decree, statute, rule or regulation
applicable to any of Sybarite, CNWVO or CNMF or any of their respective
properties or assets, except, in the case of each of clauses (i) and
(ii) above, for such violations, conflicts, breaches, defaults,
terminations, accelerations or creations of liens, security interests,
charges or encumbrances, which, in the aggregate, would not have a
material adverse effect on the condition (financial or other), business
or operations of any of them.
3. No notice to, filing with, or authorization, consent or
approval of, any domestic or foreign public body or authority, other
than the Assignment Applications (as defined in Section 5(A) below) is
necessary for the consummation by any of Sybarite, CNWVO or CNMF of the
transactions contemplated by this Agreement, except where failure
8
<PAGE>
to give such notice, make such filings, or obtain authorizations,
consents or approvals would, in the aggregate, not have a material
adverse effect on the condition (financial or other), business or
operations of Sybarite, CNWVO or CNMF, respectively.
C. Capitalization.
1. The authorized capital stock of Sybarite consists of
100,000 shares of common stock, 1,078.945 of which are validly issued
and outstanding, fully paid and nonassessable. The list of shareholders
of Sybarite set forth on Schedule 2(C)(1) hereto is true and complete as
of the date hereof and shall be true and complete at the Effective Time.
There are no other shares of capital stock, or other equity securities
of Sybarite outstanding, and no other outstanding options, warrants,
rights to subscribe to (including any preemptive rights), calls or
commitments of any character whatsoever to which Sybarite is a party or
may be bound, requiring the issuance or sale of, shares of any capital
stock or other equity securities of Sybarite or securities or rights
convertible into or exchangeable for such shares or other equity
securities, and there are no contracts, commitments, understandings or
arrangements by which Sybarite is or may become bound to issue
additional shares of its capital stock or other equity securities or
options, warrants or rights to purchase or acquire any additional shares
of its capital stock or other equity securities or securities
convertible into or exchangeable for such shares or other equity
securities.
2. The authorized capital stock of CNWVO consists of 1,000
shares of common stock, 100 of which are validly issued and outstanding,
fully paid and nonassessable. The list of shareholders of CNWVO set
forth on Schedule 2(C)(2) hereto is true and complete as of the date
hereof and shall be true and complete at the Effective Time. There are
no other shares of capital stock, or other equity securities of CNWVO
outstanding, and no other outstanding options, warrants, rights to
subscribe to (including any preemptive rights), calls or commitments of
any character whatsoever to which CNWVO is a party or may be bound,
requiring the issuance or sale of, shares of any capital stock or other
equity securities of CNWVO or securities or rights convertible into or
exchangeable for such shares or other equity securities, and there are
no contracts, commitments, understandings or arrangements by which CNWVO
is or may become bound to issue additional shares of its capital stock
or other equity securities or options, warrants or rights to purchase or
acquire any additional shares of its capital stock or other equity
securities or securities convertible into or exchangeable for such
shares or other equity securities.
3. The authorized capital stock of CNMF consists of 1,000
shares of common stock, 100 of which are validly issued and outstanding,
fully paid and nonassessable. The list of shareholders of CNMF set
forth on Schedule 2(C)(3) hereto is true and complete as of the date
hereof and shall be true and complete at the Effective Time. There are
no other shares of capital stock, or other equity securities of CNMF
outstanding, and no other outstanding options, warrants, rights to
subscribe to (including any preemptive rights), calls or commitments of
any character whatsoever to which CNMF is a party or may be bound,
requiring the issuance or sale of, shares of any capital stock or other
equity securities of CNMF or securities or rights convertible into or
exchangeable for such shares or other equity securities, and there are
no contracts, commitments, understandings or
9
<PAGE>
arrangements by which CNMF is or may become bound to issue additional
shares of its capital stock or other equity securities or options,
warrants or rights to purchase or acquire any additional shares of its
capital stock or other equity securities or securities convertible into
or exchangeable for such shares or other equity securities.
D. Litigation. Other than as set forth on Schedule 2(D),
there is no action, order, writ, injunction, judgment or decree
outstanding or any action, other than proceedings affecting the cellular
telephone industry generally, pending or, to the best knowledge of any
of Sybarite, CNWVO or CNMF, threatened or anticipated against, related
to or affecting (i) any of Sybarite, CNWVO or CNMF or any shareholder of
any of them, (ii) the transactions contemplated by this Agreement; or,
to the best knowledge of any of Sybarite, CNWVO or CNMF, (iii) any
assets of any of them. None of Sybarite, CNWVO or CNMF is in default
with respect to or subject to any judgment, order, writ, injunction or
decree of any court or governmental agency, and there are no unsatisfied
judgments against any of Sybarite, CNWVO or CNMF.
E. Compliance with Law. None of Sybarite, CNWVO or CNMF
has violated or failed to comply with any statute, law, ordinance,
regulation, rule or order of any foreign, federal, state or local
government or any other governmental department or agency, or any
judgment, decree or order of any court, applicable to its business or
operations except where any such violation or failure to comply would
not have a material adverse effect on any of Sybarite, CNWVO or CNMF;
and the conduct of the business of each of Sybarite, CNWVO and CNMF is
in conformity with all energy, public utility, zoning, building code,
health, OSHA and environmental requirements and all other foreign,
federal, state and local governmental and regulatory requirements except
where any such non-conformity would not have a material adverse effect
on any of Sybarite, CNWVO or CNMF. None of Sybarite, CNWVO or CNMF has
received any notice asserting a failure to comply with any such statute,
law, ordinance, regulation, rule, judgment, decree or order. Each of
Sybarite, CNWVO and CNMF has all material permits, licenses and
franchises from governmental agencies required to conduct its respective
present business as now be conducted.
F. Changes. Except as otherwise contemplated by this
Agreement, since March 31, 1994, none of the following has occurred:
1. any material adverse change in the financial condition,
balance sheets or business as a going concern of any of Sybarite, CNWVO
or CNMF, including the effects of a change in regulations that
materially impairs the business of the Partnerships as a going concern;
provided, however, that "material adverse change" shall not include
changes as a result of (a) activity of United States stock markets, (b)
changes in the price of Vanguard Stock, (c) changes in general economic
conditions in the United States, or (d) changes to the extent completely
covered by the Balance Sheet Adjustment;
10
<PAGE>
2. any damage, destruction or loss materially adversely
affecting the condition (financial or other), business or operations of
any of Sybarite, CNWVO or CNMF;
3. any adoption of a plan of liquidation or resolutions
providing for the liquidation, dissolution, merger, consolidation or
other reorganization of any of Sybarite, CNWVO or CNMF (except as
contemplated by this Agreement);
4. any declaration, set aside or payment of any dividend or
other distribution in respect of the capital stock of any of Sybarite,
CNWVO or CNMF or any direct or indirect redemption, purchase or other
acquisition of any shares of the capital stock of any of Sybarite, CNWVO
or CNMF or any payment to any of its respective shareholders;
5. any issuance or sale of any shares of the capital stock
of any of Sybarite, CNWVO or CNMF or any options, warrants or other
rights to purchase such shares or any securities convertible into or
exchangeable for such shares or any action to reclassify or recapitalize
or split up its respective capital stock;
6. any mortgage, pledge or other lien, lease, security
interest, encumbrance or other restriction of any of the properties or
assets of any of Sybarite, CNWVO or CNMF except in the ordinary and
usual course of its respective business and consistent with past
practice or with respect to the NovAtel Debt or the Sterling Debt;
7. any acquisition or disposal of any interest in any
material asset or material property of any of Sybarite, CNWVO or CNMF
except the purchase of materials and supplies and the sale of inventory
in the ordinary and usual course of its respective business and
consistent with past practice or as contemplated by this Agreement;
8. any material amendment or termination of any material
contract, agreement, or lease of any of Sybarite, CNWVO or CNMF;
9. any sale, grant or transfer to any party or parties of
any contract or license, or grant of an option to acquire a license, to
manufacture or sell any of the products of any of Sybarite, CNWVO or
CNMF, or to use any trademark, service mark, trade name, copyright,
patent or any pending application for any of the foregoing, or any trade
secret or know-how of any of Sybarite, CNWVO or CNMF; or
10. any agreement by any of Sybarite, CNWVO or CNMF to do
any of the things described in the preceding clauses (1) through (10).
G. Material Misstatements Or Omissions. No
representations or warranties by any of Sybarite, CNWVO or CNMF in this
Agreement contain any untrue statement of a material fact, or omit to
state any material fact necessary to make the statements or facts
contained therein, in light of the circumstances under which they were
made, not materially misleading.
11
<PAGE>
H. Financial Statements. Each of Sybarite, CNWVO and CNMF
has provided to the Company true and complete copies of its respective
statements of income and loss for the period ended of March 31, 1994 and
its respective balance sheet dated as of March 31, 1994 (the "Financial
Statements"). The Financial Statements have been prepared on the basis
of accounting used in the preparation of the income tax returns for such
corporation. No event has occurred since the preparation of the
Financial Statements that would make such Financial Statements
misleading in any respect except as set forth in Section 2(T) below.
I. Absence of Undisclosed Liabilities. Except for (i)
liabilities or obligations which are specifically identified as accrued
or reserved against in the Financial Statements of Sybarite, CNWVO or
CNMF, respectively, or which were incurred after March 31, 1994 in the
ordinary course of business and consistent with past practice including
the Sterling Debt and the Related Party Indebtedness (as defined below),
and (ii) liabilities or obligations of such corporations for
professional fees which shall be satisfied at Closing, none of Sybarite,
CNWVO or CNMF has any liabilities or obligations (whether absolute,
accrued, contingent or otherwise) of a nature required by generally
accepted accounting principles to be reflected in a corporate balance
sheet.
J. Title to Assets. Except as otherwise provided pursuant
to the NovAtel Debt and the Sterling Debt, each of Sybarite, CNWVO and
CNMF has good, valid and marketable title to, or a valid leasehold
interest in, all of its properties and assets (real, personal and mixed,
tangible and intangible), including without limitation its respective
interests in the Partnerships and all the properties and assets
reflected in their respective balance sheets dated as of March 31, 1994.
None of such properties or assets are subject to any liability,
obligation, claim, lien, mortgage, pledge, security interest,
conditional sale agreement, charge or encumbrance of any kind (whether
absolute, accrued, contingent or otherwise) (other than the NovAtel Debt
and the Sterling Debt).
K. Title to Real Property. None of Sybarite, CNWVO or
CNMF own any real property. All of the material real property presently
occupied or used by any of Sybarite, CNWVO or CNMF and the owners of
such material real property (the "Owners") are identified in Schedule
2(K) hereto (the "Premises"). Owners who include Shareholders or in
which a Shareholder has an interest are designated as "Affiliated
Owners" in such Schedule. The real estate leases referred to in
Schedule 2(K) hereto ("Leases") constitute all of the material leases
under which any of Sybarite, CNWVO or CNMF holds a leasehold interest in
real estate and such Leases are valid, binding and in full force and
effect. There are no other leases or subleases affecting the Premises
except those listed on Schedule 2(K). The Affiliated Owners own a fee
simple estate in the Premises, subject to no mortgage, pledge, lien,
option, conditional sale agreement, security interest, encumbrance or
any other restriction except as disclosed in Schedule 2(K). To the best
knowledge of each of Sybarite, CNWVO and CNMF, and except as identified
in Schedule 2(K) hereto, the Premises, and all improvements located
thereon, comply in all material respects with all zoning, land use,
building, health, safety and fire laws, codes, rules, orders, ordinances
and regulations. All of the improvements (including but not limited to
the foundations, walls, roofs, floors and subfloors comprising such
improvements) located on the Premises are in good condition and
12
<PAGE>
are free from all structural defects (latent and patent). All
mechanical systems serving the Premises and the improvements located
thereon, including, but not limited to the heating, ventilation, air
conditioning, plumbing, electrical and elevator systems, are in good
working order, reasonable wear and tear excepted. There is adequate
access to the Premises from public roads. All water, sewer, gas,
electric, telephone and drainage facilities and all other utilities
required for the use and operation of the Premises are available.
L. Authorizations. Set forth on Schedule 2(L) are all of
the authorizations, permits and licenses issued by the FCC, the West
Virginia Public Service Commission (the "PSC"), and the Maine Public
Utilities Commission to the Partnerships in respect of the construction,
ownership or operation of the Systems and all applications for
modification, extension or renewal thereof (the "Authorizations").
There are no pending or, to the knowledge of each of Sybarite, CNWVO and
CNMF, threatened proceedings by or before the FCC which would result in
the revocation, cancellation, suspension or adverse modification of any
FCC Authorization, nor are there any facts that would give rise to, or
form the basis for such a proceeding. On the Closing Date, each of
Sybarite, CNWVO and CNMF will have the absolute and unrestricted right,
power and authority under the Communications Act of 1934, as amended, to
transfer control of the Authorizations to the Company upon consummation
of the transaction contemplated hereby. None of Sybarite, CNWVO or CNMF
(a) has engaged in any course of conduct which would impair either of
the Partnership's abilities to remain the holder of the Authorizations,
and (b) is aware of any reason why (i) those of the Authorizations
subject to expiration might not be renewed in the ordinary course or
(ii) any of the Authorizations might be revoked.
M. Labor Matters. None of Sybarite, CNWVO or CNMF is a
party to, or bound by, any collective bargaining agreement, contract or
other agreement or understanding with a labor union or labor
organization. There is no unfair labor practice or labor arbitration
proceeding pending, or to the best knowledge of each of Sybarite, CNWVO
and CNMF, threatened against any of Sybarite, CNWVO or CNMF. To the
best knowledge of Sybarite, CNWVO and CNMF, there are no organizational
efforts with respect to the formation of a collective bargaining unit
presently being made or threatened involving employees of any of
Sybarite, CNWVO or CNMF.
N. Proprietary Rights. Schedule 2(N) hereto contains a
brief description of all material patents, trademarks, service marks,
trade names, copyrights (including any pending applications for any of
the foregoing), inventions and any other material intellectual or
intangible rights owned or used by any of Sybarite, CNWVO or CNMF
(collectively referred to as "Proprietary Rights"). The foregoing are
not subject to any outstanding licenses, liens, encumbrances, claims or
other restrictions or rights of others and there are no pending or
threatened challenges to any of the Proprietary Rights. The business of
Sybarite, CNWVO, CNMF does not infringe or constitute, and has not
infringed or constituted, an unlawful invasion of any rights of any
person and no notice of any such infringement or invasion has been
received by any of Sybarite, CNWVO, CNMF or either of the Partnerships,
other than alleged infringements raised by Peter Tsakanikas.
13
<PAGE>
O. Contracts. None of Sybarite, CNWVO, CNMF or either of
the Partnerships is a party to or subject to any oral or written
agreement, contract or commitment (including, without limitation, leases
of real property) (the "Contracts") except as described in Schedule 2(O)
hereto and with respect to the Related Party Indebtedness. The
Contracts are valid, binding and in full force and effect and none of
Sybarite, CNWVO, CNMF or either of the Partnerships, as the case may be,
is in material default or alleged to be in default thereunder and, to
the knowledge of Sybarite, CNWVO and CNMF, no other party thereto is in
material default. Nothing has occurred which, with or without the
passage of time or giving of notice or both, would constitute a material
default by any of Sybarite, CNWVO, CNMF or either of the Partnerships,
or, to the knowledge of any of them, by any other party under such
Contract. None of Sybarite, CNWVO or CNMF has any reason to believe
that any material renewable Contract will not be renewed and has not
received any notification that any such Contract is not likely to be
renewed. Except for the Sterling Debt and the NovAtel Debt, the Mergers
will not create a default under or permit the termination of or
otherwise adversely affect any Contract in a manner that will have a
material adverse effect on the Company.
P. Environmental Matters. Except as consistent with
applicable Environmental Laws, and except as identified in Schedule 2(P)
hereto, to the best knowledge of Sybarite, CNWVO and CNMF, no Hazardous
Substances are emitted, discharged or released from the Premises or
improvements located thereon, directly or indirectly, into the
atmosphere, soil, ground water or surface water. Except for those
matters identified in Schedule 2(P) hereto, to the best knowledge of
Sybarite, CNWVO and CNMF, neither the Partnerships nor any predecessor
thereof nor any present or former owner or operator of all or a portion
of the Premises, has been determined to be or has the potential to be,
liable for cleanup or response costs with respect to the emission,
discharge, or release of any Hazardous Substance or for any other matter
arising under the Environmental Laws due to its ownership, lease, use or
operation of all or a portion of the Premises or the generation,
handling, treatment, storage, transportation or disposal of any
Hazardous Substance. Any "underground storage tank" (as that term is
defined in the Environmental Laws) that is located in or at the Premises
is identified on Schedule 2(P) hereto, and except as identified on such
Schedule, all such tanks are in compliance with the Environmental Laws.
As used in this Agreement, (i) "Hazardous Substances" shall mean waste,
substance, materials, smoke, gas or particulate matter defined or
regulated as hazardous, toxic or dangerous under any Environmental Law
and (ii) "Environmental Law" or "Environmental Laws" shall mean the
Comprehensive Environmental Response Compensation and Liability Act of
1980, as amended by the Superfund Amendments and Reauthorization Act of
1986 ("CERCLA"), 42 U.S.C. (Section Mark) 9601 et seq.; the Toxic
Substance Control Act ("TSCA"), 15 U.S.C. (Section Mark) 2601 et seq.;
the Hazardous Materials Transportation Act, 49 U.S.C. (Section Mark)
1802; the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C.
(Section Mark) 9601 et seq.; the Clean Water Act ("CWA"), 33 U.S.C.
(Section Mark) 1251 et seq.; the Safe Drinking Water Act, 42 U.S.C.
(Section Mark) 300f et seq.; the Clean Air Act ("CAA"), 42 U.S.C.
(Section Mark) 7401 et seq.; or any similar state law; and the plans,
rules, regulations or ordinances adopted, or other criteria and
guidelines promulgated pursuant to the preceding laws or other similar
laws, regulations, rules or ordinances in effect as of the Closing Date.
14
<PAGE>
Q. Partnerships Matters.
1. Each of the Partnerships is a duly formed limited
partnership validly existing under the laws of the state of its
formation and has complied with all requirements with each proper
governmental authority necessary to establish the limited liability of
the limited partners thereof.
2. The partnership interests issued by each of the
Partnerships to any of Sybarite, CNWVO or CNMF are free and clear of all
liens, other than the NovAtel Debt and the Sterling Debt.
3. Sybarite owns a 61.2% limited partnership interest in
West Virginia One and a 73.8% limited partnership interest in Maine
Four, in each case free and clear of any claims, charges, liens or other
encumbrances (other than with respect to the NovAtel Debt and the
Sterling Debt).
4. CNWVO owns a 1% general partnership interest in West
Virginia One, free and clear of any claims, charges, liens or other
encumbrances (other than with respect to the NovAtel Debt and the
Sterling Debt).
5. CNMF owns a 1% general limited partnership interest in
Maine Four, free and clear of any liens or encumbrances (other than with
respect to the NovAtel Debt and the Sterling Debt).
6. Together with the limited partnership interests to be
acquired pursuant to the Acquisitions, the interests of Sybarite, CNWVO
and CNMF comprise 100% of the partnership interests in the Partnerships
and there are no other interests, options, warrants or rights to acquire
interests in the Partnerships issued by either of the Partnerships or
any of Sybarite, CNWVO or CNMF.
7. As of the Closing Date, none of Sybarite, CNWVO or CNMF
will have any assets or any liabilities other than (i) with regard to
the ownership of their respective partnership interests in Maine Four
and West Virginia One, or (ii) liabilities for professional fees that
will be satisfied at Closing.
8. As of March 31, 1994 and as of the Effective Time, except
as provided herein, each of the Partnerships has or shall have no
material current liabilities and no long-term liabilities other than
those set forth on the applicable Balance Sheets.
9. Except as contemplated by this Agreement, since March 31,
1994, none of the following has occurred with respect to either of the
Partnerships:
a. any material adverse change in the financial
condition, Balance Sheets or business as a going concern, including the
effects of a change in regulations that materially impairs the business
of the Partnerships as a going concern; provided, however, that
"material adverse change" shall not include changes as a result of (a)
activity of United
15
<PAGE>
States stock markets, (b) changes in the price of Vanguard Stock, (c)
changes in general economic conditions in the United States, or (d)
changes to the extent completely covered by the Balance Sheet
Adjustment;
b. any physical damage, destruction or loss (not
covered by insurance) materially adversely affecting the condition
(financial or other), business or operations;
c. any adoption of a plan of liquidation or
resolutions providing for the liquidation, dissolution, merger,
consolidation or other reorganization (except as contemplated by this
Agreement);
d. any distribution with respect to a partnership
interest or any direct or indirect redemption, purchase or other
acquisition of any partnership interests or any payment to any of its
respective partners;
e. any issuance or sale by either of the Partnerships,
Sybarite, CNWVO or CNMF of any partnership interests or any options,
warrants or other rights to purchase such interests or any securities
convertible into or exchangeable for such interests;
f. any mortgage, pledge or other lien, lease, security
interest, encumbrance or other restriction of any of the properties or
assets except in the ordinary and usual course of its respective
business and consistent with past practice;
g. any acquisition or disposal of any interest in any
material asset or material property except the purchase of materials and
supplies and the sale of inventory in the ordinary and usual course of
its respective business and consistent with past practice;
h. any material amendment or termination of any
material contract, agreement, or lease except in the ordinary course of
business or with respect to agency contracts;
i. any sale, grant or transfer to any party or parties
of any contract or license, or grant of an option to acquire a license,
to manufacture or sell any of the products or to use any trademark,
service mark, trade name, copyright, patent or any pending application
for any of the foregoing, or any trade secret or know-how; or
j. any agreement to do any of the things described in
the preceding clauses (a) through (i).
10. No litigation or proceeding against the either of the
Partnerships or their respective general partners is pending before any
court, administrative agency or other governmental authority, other than
proceedings affecting the cellular industry generally, which would, if
adversely determined, have a material adverse effect on either of the
Partnerships, the general partners of such Partnerships or their
respective business or operations.
16
<PAGE>
11. Neither of the Partnerships is in violation of any laws,
rules or regulations applicable to it such that the violation would have
a material adverse effect on the condition or prospects of such
Partnership.
12. Other than the NovAtel Debt, the Sterling Debt, an
encumbrance for Taxes, assessments or other government charges or levies
that are not yet due and payable, as of the Effective Time, or a lien or
encumbrance that will be released no later than the Closing, each of the
Partnerships shall own good and marketable fee simple title to its
assets, free and clear of liens, claims and encumbrances.
13. Each of the Partnerships is properly treated as a
partnership for federal income tax purposes and not as an association or
publicly traded partnership taxable as a corporation.
14. West Virginia One is the owner of 100% of the West
Virginia System.
15. Maine Four is the owner of 100% of the Maine System.
16. The West Virginia One Partnership Agreement, a copy of
which has been provided to the Company, and the Maine Four Partnership
Agreement, a copy of which has been provided to the Company, are the
complete agreements governing the Partnerships in effect on the date
hereof and have not been modified or amended, which agreements will be
certified by Sybarite at the Closing.
R. Tax Matters.
1. Filing of Tax Returns. Each of Sybarite, CNWVO, CNMF and
the Partnerships have timely filed with the appropriate taxing
authorities all returns (including without limitation information
returns and other material information) in respect of Taxes (as defined
below) required to be filed through the date hereof and will timely file
any such returns required to be filed on or prior to the Closing Date.
The returns and other information filed (or to be filed) are complete
and accurate in all material respects. None of Sybarite, CNWVO, CNMF or
either of the Partnerships has requested any extension of time within
which to file returns (including without limitation information returns)
in respect of any Taxes that have not been filed prior to the Closing
Date.
2. Payment of Taxes. All Taxes of each of Sybarite, CNWVO,
CNMF and the Partnerships (or for which each of them is or could be
liable) in respect of periods ending on before the Closing Date, have
been timely paid, or will be timely paid prior to the Closing Date or
will be properly reserved for on the Final or Tentative Closing Date
Balance Sheets (as the case may be) as Current Liabilities, and none of
Sybarite, CNWVO, CNMF or either of the Partnerships has any material
liability for Taxes in excess of the amounts so paid or reserved. All
Taxes that each such corporation or partnership has been required to
collect or withhold have been duly collected or withheld and, to the
extent required when due, have been or will be (prior to the Closing
Date) duly paid to the proper taxing authority
17
<PAGE>
or will be properly reserved for on the Final or Tentative Closing Date
Balance Sheets (as the case may be) as Current Liabilities.
3. Audits, Investigations or Claims. Except as set forth on
Schedule 2(R), no deficiencies for Taxes of either Partnership,
Sybarite, CNWVO or CNMF have been claimed, proposed or assessed in
writing by any taxing or other governmental authority. There are no
pending or, to the best knowledge of any of Sybarite, CNWVO or CNMF,
threatened audits, investigations or claims for or relating to any
liability in respect of Taxes of either Partnership, Sybarite, CNWVO or
CNMF, and there are no matters under discussion by either Partnership,
Sybarite, CNWVO or CNMF with any governmental authorities with respect
to Taxes of either Partnership, Sybarite, CNWVO or CNMF. Audits of
federal, state and local returns for Taxes by the relevant taxing
authorities have been completed for the periods set forth on Schedule
2(R). None of the Partnerships, Sybarite, CNWVO or CNMF has been
notified that any taxing authority intends to audit a return for any
other period. No extension of a statute of limitations relating to
Taxes is in effect with respect to either Partnership, Sybarite, CNWVO
or CNMF.
4. Lien. There are no liens for Taxes (other than for
current Taxes not yet due and payable) on any assets of Sybarite, CNWVO,
CNMF or either of the Partnerships. No Taxes due and owing by either of
the Partnerships, Sybarite, CNWVO or CNMF on account of business
transactions by either of the Partnerships, Sybarite, CNWVO or CNMF
through the Closing Date will become a lien on the Assets of either of
the Partnerships in excess of any amount reserved therefor on the
Closing Date Balance Sheets.
5. S-Corporation. Each of Sybarite, CNWVO and CNMF is a
duly qualified S-corporation (within the meaning of Section 1361(a)(1)
of the Code) for federal income tax purposes and has been properly so
treated since the time of its organization.
6. Tax Elections
a. All elections with respect to Taxes affecting each of
Sybarite, CNWVO and CNMF as of the date hereof are set forth on Schedule
2(R). All elections with respect to Taxes affecting the Partnerships
are set forth on the Partnership's federal income tax returns previously
provided to the Company.
b. None of Sybarite, CNWVO, CNMF and the Partnerships have
made an election, and none of them are required, to treat any asset as
owned by another person or as tax-exempt bond financed property or
tax-exempt use property within the meaning of section 168 of the Code or
under any comparable state or local income tax or other tax provision.
c. None of Sybarite, CNWVO, CNMF and the Partnerships are a
party to or bound by any binding tax sharing, tax indemnity or tax
allocation agreement or other similar arrangement with any other party.
18
<PAGE>
d. None of Sybarite, CNWVO and CNMF have filed a consent
pursuant to the collapsible corporation provisions of Section 341(f) of
the Code (or any corresponding provision of state or local law) or
agreed to have Section 341(f)(2) of the Code (or any corresponding
provision of state or local law) apply to any disposition of any asset
owned by it.
7. Affiliated Group. None of Sybarite, CNWVO and CNMF have
ever been a member of an affiliated group of corporations, within the
meaning of Section 1504 of the Code.
8. Section 481(a). None of Sybarite, CNWVO, CNMF and the
Partnerships are required to make, any adjustment under Section 481(a)
of the Code by reason of a change in accounting method or otherwise for
the current or future taxable years.
9. Excess Parachute Payments. None of Sybarite, CNWVO, CNMF
and the Partnerships are a party to any agreement, contract, arrangement
or plan that has resulted or would result, separately or in the
aggregate, in the payment of any "excess parachute payments" within the
meaning of Section 280G of the Code.
10. No Joint Venture. None of Sybarite, CNWVO, CNMF and the
Partnerships is a party to any joint venture, partnership, or other
arrangement or contract which could be treated as a partnership for
federal income tax purposes (except that each of Sybarite, CNWVO, and
CNMF are partners in the Partnerships and that West Virginia One entered
into the Site Sharing Agreement, dated August 1, 1992 with Great Seal
and which concerns the Mason County System).
11. Work Papers. (a) Each of Sybarite, CNWVO and CNMF has
prepared and made available (or, in the case of a portion of a period
ending on the Closing Date, will prepare and make available at the
Closing or as soon as practicable thereafter) to the Company books and
working papers, if any.
(b) Each of the Partnerships has prepared and made
available (or, in the case of a portion of a period ending on the
Closing Date, will prepare and make available at the Closing or as soon
as practicable thereafter) to the Company books and working papers which
fairly reflect the income and expenses of such partnership for any
period or any portion of a period ending on the Closing Date.
12. Adjusted Tax Basis. Each of Sybarite's, CNWVO's and
CNMF's adjusted tax basis in its assets, as well as the amount of its
earnings and profits (if any) is set forth on Schedule 2(R) for the year
ending December 31, 1993, which adjusted tax basis shall be updated as
of the Closing Date within 90 days of the Closing.
13. Business Line. Each of Sybarite, CNWVO and CNMF operate
at least one significant historic business line, or own at least a
significant portion of its historic business assets, in each case within
the meaning of Treasury Regulation Section 1.368-1(d).
19
<PAGE>
14. Definition of "Taxes". "Taxes" means all taxes,
charges, fees, levies or other assessments, including without
limitation, income, excise, use, transfer, payroll, occupancy, property,
sales, franchise, unemployment and withholding taxes, imposed by the
United States or any state, county, local or foreign government or
subdivision or agency thereof, and any assessments against real
property, as the case may be, together with any interest, penalties or
additional taxes attributable to such taxes and other assessments.
S. Employee Benefit Plans. Each of Sybarite, CNWVO, CNMF
and each of the Partnerships shall have provided to the Company as of
the Closing a written description of the terms of (i) each "Employee
Benefit Plan," as that term is defined under Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
(ii) each other deferred compensation or incentive plan, arrangement or
program, (iii) any vacation policy and (iv) any other employee
compensation or fringe benefit program or arrangement maintained by any
of Sybarite, CNWVO, CNMF or either of the Partnerships or under which
any of them has any obligations in respect of any of the current or
former officers or employees of its respective business, or their
beneficiaries (hereinafter individually referred to as an "Employee
Plan"). None of Sybarite, CNWVO, CNMF or either of the Partnerships
currently maintains or contributes to, nor at any time previously have
any of them maintained or contributed to, any defined benefit plan, as
defined in Section 3(35) of ERISA. No Employee Plan is a "multiemployer
plan," as defined in Section 3(37) of ERISA and none of Sybarite, CNWVO,
CNMF or either of the Partnerships has made any contributions to or
participated in any "multiemployer plan" within the last five years.
T. Related Party Indebtedness. Notwithstanding anything
to the contrary herein, the Company hereby acknowledges and agrees that,
prior to the Effective Time, all of that certain indebtedness (i) owed
to Finch by Sybarite, (ii) owed by Finch to CNWVO and CNMF, (iii) owed
to CNWVO and CNMF by Sybarite, and (iv) owed by CNWVO and CNMF to
Sybarite (all of such debts are sometimes hereinafter referred to as the
"Related Party Indebtedness") will be discharged or otherwise satisfied
and that the discharge or satisfaction of such indebtedness in any
manner deemed appropriate by Finch, in his sole discretion, shall not be
deemed to be a misrepresentation or otherwise constitute a default
hereunder.
Section 3. Representations and Warranties of the Shareholders.
Each of the Shareholders represents and warrants to the Company, as of
the date hereof and as of the Effective Time, as follows:
A. Foreign Person. None of Sybarite, CNWVO, CNMF, Finch, Blow or
Warner is a Person other than a United States person within the meaning
of the Code.
B. No Withholding. The transaction contemplated hereby is
not subject to the tax withholding provisions of Section 3406 of the
Code, or of Subchapter A of Chapter 3 of the Code or of any other
provision of law.
20
<PAGE>
C. No Intentions. Each of Finch, Blow and Warner have no
present plan, intention, or arrangement to dispose of any of the Common
Stock of the Company received in the Mergers if such disposition would
reduce the fair value of the Common Stock of the Company (measured as of
the Effective Time) retained by each such Shareholder to an amount less
than 50% of the fair value of the Sybarite, CNWVO, and CNMF stock held
by each such Shareholder immediately before the Mergers.
Section 4. Representations and Warranties of the Company.
The Company represents and warrants to each of Sybarite,
CNWVO and CNMF the following:
A. Organization and Qualification. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the
State of North Carolina and has the requisite corporate power to carry
on its business as it is now being conducted. The Company is duly
qualified as a foreign corporation to do business, and is in good
standing, in each jurisdiction where the character of its properties
owned or leased or the nature of its activities makes such qualification
necessary, except for failures to be so qualified or in good standing
which would not, in the aggregate, have a material adverse effect on the
Company and its subsidiaries, taken as a whole. Copies of the Articles
of Incorporation and Bylaws of the Company heretofore delivered to
Sybarite are accurate and complete as of the date hereof.
B. Capitalization. As of May 10, 1994, the authorized
capital stock of the Company consists of (i) 60,000,000 shares of Class
A common stock, 1(cent) par value, 25,603,650 of which are validly issued and
outstanding, fully paid and nonassessable; (ii) 30,000,000 shares of
Class B common stock, 1(cent) par value, none of which are issued and
outstanding; and (iii) 1,000,000 shares of preferred stock, 1(cent) par
value, none of which are issued and outstanding.
C. Authority Relative to Agreement. The Company has the
requisite corporate power and authority to enter into this Agreement, to
perform its obligations hereunder and to consummate the transactions
contemplated hereunder. No other corporate proceedings on the part of
the Company are necessary to authorize this Agreement and the
transactions contemplated hereby. This Agreement has been duly executed
and delivered by the Company and constitutes a valid and binding
obligation of the Company, enforceable against the Company in accordance
with its terms, except to the extent that its enforceability may be
limited by applicable bankruptcy, insolvency, reorganization or other
laws affecting the enforcement of creditors rights generally or by
general equitable principles. The Board of Directors of the Company has
duly approved and adopted this Agreement and the Mergers as contemplated
herein on the terms and conditions set forth herein.
21
<PAGE>
D. Compliance.
1. Neither the execution and delivery of this Agreement by
the Company, nor the consummation of the transactions contemplated
hereby, nor compliance by the Company with any of the provisions hereof
will (i) violate, conflict with, or result in a breach of any provisions
of, or constitute a default (or an event which, with notice or lapse of
time or both, would constitute a default) under, or result in the
termination of, or accelerate the performance required by, or result in
a right of termination or acceleration under, or result in the creation
of any lien, security interest, charge or encumbrance upon any of the
properties or assets of the Company or any of its Subsidiaries under,
any of the terms, conditions or provisions of (x) their respective
articles of incorporation or bylaws or (y) any material note, bond,
mortgage, indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which the Company or any such Subsidiary is
a party or to which they or any of their respective properties or assets
may be subject, or (ii) violate any judgment, ruling, order, writ,
injunction, decree, statute, rule or regulation applicable to the
Company and its subsidiaries or any of their respective properties or
assets; except, in the case of each of clauses (i) and (ii) above, for
such violations, conflicts, breaches, defaults, etc., which, in the
aggregate, would not have a material adverse effect on the condition
(financial or other), business or operations of the Company and its
subsidiaries, taken as a whole.
2. Other than consent by the FCC and the PSC to the
assignment of the Authorizations by the Partnerships to the Company, no
notice to, filing with, or authorization, consent or approval of, any
domestic or foreign public body or authority is necessary for the
consummation by the Company of the transactions contemplated by this
Agreement, except where failures to give such notices, make such filings
or obtain authorizations, consents or approvals would, in the aggregate,
not have a material adverse effect on the condition (financial or
other), business or operations of the Company and its subsidiaries,
taken as a whole.
E. Litigation. There are no actions, suits or proceedings
pending or, to the best knowledge of the Company, threatened against the
Company or any of its subsidiaries, nor is the Company or any of its
subsidiaries subject to any order, judgment, writ, injunction or decree,
except in either case for matters which, in the aggregate, would impact
on the ability of the Company to effect the Mergers or the Acquisitions.
F. Licensee Qualifications. The Company is qualified
under all applicable laws to own and operate the Systems and it is not
aware of any facts or circumstances applicable to the Company which
would prevent the Company under applicable law from engaging in the
transaction contemplated hereunder. The Company has the financial
wherewithal to consummate the transaction contemplated by this
Agreement.
G. Continuity of Business Enterprise. It is the present
intention of the Company to continue at least one significant historic
business line of each of Sybarite, CNWVO and CNMF, or to use at least a
significant portion of each such corporation's assets in a business, in
each case within the meaning of Treasury Regulation Section 1.368-1(d).
22
<PAGE>
H. Material Misstatements or Omissions. No
representations or warranties by the Company in this Agreement, nor any
document, exhibit, statement, certificate or schedule furnished to any
of Sybarite, CNWVO or CNMF pursuant hereto, contains or will contain any
untrue statement of fact or omits or will omit to state any material
fact necessary to make the statements or facts contained therein not
materially misleading.
I. SEC Reports. The Company has furnished to Sybarite
complete copies of all reports, statements and schedules required to be
filed by the Company with the Securities and Exchange Commission (the
"SEC") pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act") since January 1, 1992 (collectively, the "SEC Reports").
As of their respective dates, the SEC Reports complied in all material
respects with all applicable requirements of the Exchange Act and did
not contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements made therein, in
light of the circumstances under which they were made, not misleading.
Since January 1, 1994, other than as a result of this Agreement and
other than as disclosed in the SEC Reports, the Company has not
undergone or suffered any adverse change in its business condition which
has been, individually or in the aggregate, material.
Section 5. Conduct of Business Pending the Mergers
Each of the parties hereto covenants and agrees that, prior
to the Effective Time:
A. The parties shall each diligently and expeditiously take
all steps reasonably necessary to prosecute the applications filed with
the FCC and the PSC requesting their written consent to the assignment
of the Authorizations from the Partnerships to the Company (the
"Assignment Applications"), to obtain the FCC's determination that grant
of the Assignment Applications will serve the public interest,
convenience or necessity, and to obtain any necessary determination of
the PSC. The failure by either party to diligently prosecute its
portions of the Assignment Applications as required by this Section
shall be a material breach of this Agreement. All fees charged by the
FCC in connection with filing the Assignment Applications shall be paid
one-half by the Company and one-half by Finch and Sterling.
Each of Sybarite, CNWVO and CNMF covenants and agrees that,
prior to the Effective Time:
A. Each of Sybarite, CNWVO and CNMF (and the Company, as
applicable) shall use its reasonable efforts to cause the Partnerships
to commence, as soon as practicable, all action required to obtain all
other consents, waivers, approvals and authorizations and to give all
other notices to and make all other filings with any third parties,
including governmental authorities, necessary to authorize, approve or
permit the full and complete exchange, assignment or transfer of the
interests in each of the Partnerships as herein contemplated and the
parties shall cooperate with each other, with respect thereto; provided,
however, that neither party shall be required to agree to any materially
unfavorable modification of any existing contract or agreement in order
to obtain such consent. In
23
<PAGE>
addition, subject to the terms and conditions herein provided, each of
the parties covenants and agrees to use its reasonable efforts to take,
or cause to be taken, all action or do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated hereby and
to cause the fulfillment of such party's respective obligations
hereunder.
B. In order to assist in the transition from the current
operation of the Systems to the Company's operation of such Systems,
each of Sybarite, CNWVO and CNMF shall grant to the Company all access
reasonably requested by the Company to the assets, properties,
facilities, personnel and operations of the business of the Partnerships
during the period commencing on the date hereof and continuing up to and
including the Closing Date for the purpose of performing inspections and
technical analysis of the Systems, and performing any other tasks
necessary to enable the Company to smoothly assume its operational
responsibilities for the Systems as of the Closing Date. The Company
shall use its best efforts not to disrupt or otherwise interfere with
the Partnership's operation of the Systems.
C. Each of Sybarite, CNWVO and CNMF shall cause each of
the Partnerships at all times prior to Closing to (i) cause the Systems
to be operated in the ordinary course of its respective business, (ii)
to use its reasonable efforts to cause the Systems to be operated in
accordance in all material respects with the operating and capital
budgets attached hereto as Exhibit C, (iii) to use its reasonable good
faith efforts to maintain the present character and quality of its
respective business and Assets, and (iv) to use its reasonable good
faith efforts to maintain in all material respects the present
customers, market share and business relations of the Systems. Without
limiting the generality of the foregoing, prior to the Closing, each of
Sybarite, CNWVO and CNMF shall cause each of the Partnerships to make
all filings required to be made pursuant to the Communications Act.
D. Except as otherwise provided in Section 2(T) hereof,
none of Sybarite, CNWVO or CNMF shall directly or indirectly do any of
the following: (i) issue, sell, pledge, dispose of or encumber any
capital stock of any of Sybarite, CNWVO or CNMF; (ii) sell, pledge,
dispose of or encumber any assets of any of Sybarite, CNWVO or CNMF
(including without limitation, any indebtedness owed to them or any
claims held by them); (iii) amend or propose to amend its respective
charter, regulations or bylaws or similar organizational documents; (iv)
split, combine or reclassify any shares of its respective capital stock;
(v) redeem, purchase or otherwise acquire or offer to redeem, purchase
or otherwise acquire any of its respective capital stock; (vi) transfer
the stock of any subsidiary to any other subsidiary or any assets or
liabilities to any new subsidiary or to any existing subsidiary; (vii)
adopt a plan of liquidation or resolutions providing for the
liquidation, dissolution, merger, consolidation or other reorganization
of any of Sybarite, CNWVO or CNMF; or (viii) authorize or propose any of
the foregoing, or enter into any contract, agreement, commitment or
arrangement to do any of the foregoing.
E. None of Sybarite, CNWVO or CNMF shall cause either of
the Partnerships to directly or indirectly do any of the following: (i)
issue, sell, pledge, dispose of or encumber any partnership interests of
the Partnerships; (ii) sell, pledge, dispose of or
24
<PAGE>
encumber any assets of any of the Partnerships (including without
limitation, any indebtedness owed to, or any claims held by, the
Partnerships) other than in the ordinary course of business; (iii) amend
or propose to amend its respective Certificate of Limited Partnership or
partnership agreements; (iv) adopt a plan of liquidation or resolutions
providing for the liquidation, dissolution, merger, consolidation or
other reorganization of the Partnerships; (v) authorize or propose any
of the foregoing, or enter into any contract, agreement, commitment or
arrangement to do any of the foregoing; or (vi) distribute any monies or
assets to any of its respective partners.
F. Except as otherwise provided in Section 2(T) hereof,
none of Sybarite, CNWVO or CNMF shall, directly or indirectly, (i)
issue, sell, pledge or dispose of, or authorize, propose or agree to the
issuance, sale, pledge or disposition of, any shares of, or any options,
warrants or rights of any kind to acquire any shares of or any
securities convertible into or exchangeable for any shares of, its
capital stock of any class or any other equity securities; (ii) acquire
(by merger, consolidation or acquisition of stock or assets) any
corporation, partnership or other business organization or division
thereof or make any material investment either by purchase of stock or
securities, contributions to capital, property transfer or purchase of
any material amount of property or assets, in any other individual or
entity; (iii) incur any indebtedness for borrowed money or issue any
debt securities or assume, guarantee, endorse or otherwise as an
accommodation become responsible for, the obligations of any other
individual or entity, or make any loans or advances, except in the
ordinary course of business and consistent with past practice, other
than the NovAtel Debt, the Sterling Debt or the Related Party
Indebtedness; or (iv) authorize, recommend or propose any material
change in its capitalization or any release or relinquishment of any
material contract right; (v) authorize or propose any of the foregoing,
or enter into or modify any contract, agreement, commitment or
arrangement to do any of the foregoing; (vi) distribute any monies or
assets to any of its respective shareholders; or (vii) permit any
material adverse changes (including incurring any long-term liabilities)
in its respective financial condition as compared to its position on
March 31, 1994.
G. None of Sybarite, CNWVO or CNMF shall cause either of
the Partnerships to, directly or indirectly, (i) acquire (by merger,
consolidation or acquisition of stock or assets) any corporation,
partnership or other business organization or division thereof or make
any material investment either by purchase of stock or securities,
contributions to capital, property transfer or purchase of any material
amount of property or assets, in any other individual or entity; (ii)
incur any indebtedness for borrowed money or issue any debt securities
or assume, guarantee, endorse or otherwise as an accommodation become
responsible for, the obligations of any other individual or entity, or
make any loans or advances, except in the ordinary course of business
other than the NovAtel Debt, the Sterling Debt or the Related Party
Indebtedness; (iii) authorize, recommend or propose any release or
relinquishment of any material contract right, other than in the
ordinary course of business or with respect to agency contracts or
contracts involving promotional activities; or (iv) authorize or propose
any of the foregoing, or enter into or modify any contract, agreement,
commitment or arrangement to do any of the foregoing.
25
<PAGE>
H. None of Sybarite, CNWVO or CNMF shall, nor shall any of
them cause either of the Partnerships to, take any action other than in
the ordinary course of business with respect to the grant of any
severance or termination pay or with respect to any increase of benefits
payable under its severance or termination pay policies or agreements in
effect on the date hereof.
I. None of Sybarite, CNWVO or CNMF shall, nor shall any of
them cause either of the Partnerships to, adopt or amend any bonus,
profit sharing, compensation, stock option, pension, retirement,
deferred compensation, employment or other employee benefit plan,
agreement, trust, fund or other arrangement for the benefit or welfare
of any employee or increase in any manner the compensation or fringe
benefits of any employee or pay any benefit not required by any existing
plan, arrangement or agreement (except for salary increases or other
employee benefit arrangements in the ordinary course of business).
J. Prior to a termination of this Agreement, none of
Sybarite, CNWVO or CNMF shall, nor shall any of them cause either of the
Partnerships to, make or change any tax election or settle or compromise
any material federal, state, local or foreign income tax liability
without the prior written consent of the Company.
Section 6. Additional Agreements
A. NovATel Debt. The Company shall assume or cause to be
assumed the NovAtel Debt (as defined below) from the Partnerships and
shall, at Closing, pay the NovAtel Debt; provided, however, that the
West Virginia NovAtel Debt (as defined below) as of the Closing is no
more than One Million Three Hundred Seventy Thousand Eight Hundred
Eighty Seven Dollars ($1,370,887); and provided, further, that the Maine
NovAtel Debt (as defined below) as of the Closing Date is no more than
One Million Five Hundred Thirty Nine Thousand Four Hundred Eighty One
Dollars ($1,539,481). If the amount of the West Virginia NovAtel Debt
or the Maine Four NovAtel Debt is greater that the respective amounts
set forth in the preceding sentence, the Company shall satisfy the full
amount of the NovAtel Debt and shall offset 62.2% of such additional
amount relating to the West Virginia One NovAtel Debt and/or 74.8% of
such additional amount relating to the Maine Four NovAtel Debt paid
pursuant to this sentence against the applicable Merger Consideration.
If the amount of the West Virginia NovAtel Debt assumed
and satisfied by the Company at Closing is less than One Million Three
Hundred Seventy Thousand Eight Hundred Eighty Seven Dollars
($1,370,887), at Closing the Company shall pay cash, as an adjustment to
purchase price, in an amount equal to 62.2% of such difference to the
Shareholders in accordance with the Written Instructions and any Written
Request. If the amount of the Maine NovAtel Debt assumed and satisfied
by the Company at Closing is less than One Million Five Hundred Thirty
Nine Thousand Four Hundred Eighty One Dollars ($1,539,481), at Closing
the Company shall pay cash, as an adjustment to purchase price, in an
amount equal to 74.8% of such difference to the Shareholders in
accordance with the Written Instructions and any Written Request. The
"NovAtel Debt" means, collectively, the West Virginia NovAtel Debt and
the Maine NovAtel Debt. The "West Virginia NovAtel Debt" means that
certain indebtedness of West Virginia One to NovAtel, Inc. The "Maine
NovAtel Debt" means that certain indebtedness of Maine Four to NovAtel,
Inc.
26
<PAGE>
B. Closing Location and Date. The Closing shall be held
at 10:00 a.m. at the offices of Latham & Watkins, 1001 Pennsylvania
Avenue, N.W., Washington, D.C. 20004, on the later of (i) August 31,
1994, (ii) ten (10) days after the consent of the FCC to the transfer of
the licenses to the Company from the Partnerships has become a Final
Order (as defined below), or (iii) such other date upon which the
parties may agree, but no later than December 31, 1994 (sometimes
referred to herein as the "Closing Date"); provided, however, that if
the FCC's consent to the transfer of the Mason County System to Great
Seal has not become a Final Order (which may be waived by Finch in his
sole discretion) (the "Mason County Consent"), the Closing hereunder
shall be extended to a date ten (10) days following the date of the
Mason County Consent; it being understood that the Closing Date shall
not occur prior to receipt of the Mason County Consent. "Final Order"
means an order, action or decision of the FCC (or subsequent court order
or judgment) that has not been reversed, stayed, enjoined, modified or
amended and as to which the time to appeal, petition for certiorari or
seek reargument or rehearing or administrative reconsideration or review
has expired and as to which no appeal, reargument, petition for
certiorari or rehearing or petition for reconsideration or application
for review is pending or as to which any right to appeal, reargue,
petition for certiorari or rehearing or reconsideration or review has
been waived in writing by each party having such a right or, if any
appeal, reargument, petition for certiorari or rehearing or
reconsideration or review thereof has been sought, the order or judgment
of the court or FCC has been affirmed by the highest court (or the
administrative entity or body) to which the order was appealed or from
which the argument or rehearing or reconsideration or review was sought,
or certiorari has been denied, and the time to take any further appeal
or to seek certiorari or further reargument or rehearing, or
reconsideration or review, has expired.
C. Fees and Expenses. Sybarite, CNWVO and CNMF shall be
collectively responsible for any sales Taxes, transfer Taxes and
recording and transfer fees arising from the Merger. Except as
otherwise provided in this Agreement, each party will be liable for its
own legal, engineering and other costs and expenses, incurred in
connection with the negotiation, preparation, execution or performance
of this Agreement and the Mergers. Other than the broker retained by
Finch, no broker or finder has been retained by the parties in
connection with the transaction contemplated hereunder, it being
understood that each party shall be solely responsible for (and shall
indemnify the other party for costs, expenses (including without
limitation attorneys' fees), claims, liabilities or losses relating to)
any brokerage or finder's claims arising from the transaction
contemplated hereunder which is claimed through that party, other than
the Fifty Thousand Dollars ($50,000) finder's fee to be paid to Columbia
Capital Corporation by the Company.
D. Other Actions. Subject to the terms and conditions
herein provided, each of the parties hereto agrees to use all reasonable
efforts to take, or cause to be taken, all actions and to do, or cause
to be done, all things necessary, proper or advisable to consummate and
make effective as promptly as practicable the transactions contemplated
by this Agreement and to cooperate with each other in connection with
the foregoing, including using reasonable efforts (i) to obtain all
necessary waivers, consents and approvals from other parties to material
loan agreements, leases and other contracts, (ii) to obtain all
necessary consents, approvals and authorizations as are required to be
obtained under any
27
<PAGE>
federal, state or foreign law or regulations, (iii) to defend all
lawsuits or other legal proceedings challenging this Agreement, or the
consummation of the transactions contemplated hereby, and thereby, (iv)
to lift or rescind any injunction or restraining order or other order
adversely affecting the ability of the parties to consummate the
transactions contemplated hereby, and (v) to fulfill all conditions to
this Agreement.
E. No Mergers, Consolidations, Sale of Equity. Each of
Sybarite, CNWVO and CNMF covenants that, from and after the date hereof
and continuing until the earlier of the Closing Date or the termination
of this Agreement, neither it nor any of its officers, directors,
representatives, employees, agents or affiliates will, directly or
indirectly, solicit, initiate, encourage or participate in contacts,
discussions or negotiations with respect to, or furnish or cause or
permit to be furnished any information to any person (other than such
parties' respective affiliates or their representatives) in connection
with any inquiry or offer for any purchase or sale of the assets of any
of them except in the ordinary course of business or their respective
interests in the Partnerships, or any acquisition, combination or
similar transactions involving either of the Partnerships or any
substantial part of its Assets.
F. Preserve Accuracy of Representations and Warranties.
Each of the parties hereto shall refrain from taking any action which
would render any representation or warranty contained in Sections 2, 3
or 4 of this Agreement inaccurate in any material respect as of the
Closing Date; provided, however, that the parties hereto may make such
representations and warranties at Closing with respect to updated
schedules that include information listed therein not prohibited under
this Agreement occurring between the date hereof and the Closing Date.
The Company shall give prompt notice to each of Sybarite, CNWVO and
CNMF, and each of Sybarite, CNWVO and CNMF shall, and shall cause each
of the Partnerships to, give prompt notice to the Company, of (i) the
occurrence, or failure to occur, of any event which occurrence or
failure would be likely to cause any representation or warranty
contained in this Agreement or in any Schedule hereto to be untrue or
inaccurate in any material respect at any time from the date hereof to
the Effective Time, and (ii) any material failure of the Company, or any
of Sybarite, CNWVO, CNMF or either of the Partnerships, as the case may
be, or of any officer, director, partner, employee or agent thereof, to
comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it under this Agreement or the Schedules
hereto; provided, however, that no such notification shall affect the
representations or warranties of the parties or the conditions to the
obligations to the parties hereunder. Furthermore, each party shall
promptly notify the other (a) of any action, suit or proceeding that may
be instituted or threatened against such party to restrain, prohibit or
otherwise challenge the legality of any transaction contemplated by this
Agreement and (b) of any lawsuit, claim, proceeding or investigation
that may be threatened, brought, asserted or commenced against such
party which would have been disclosed if such lawsuit, claim, proceeding
or investigation had arisen prior to the date hereof.
G. Access to Information.
1. Each of Sybarite, CNWVO and CNMF shall, and shall cause
each of the Partnerships and its and their respective officers,
directors, employees and agents to, afford
28
<PAGE>
the officers, employees and agents of the Company complete access at all
reasonable times to, from the date hereof to the Effective Time, its
respective officers, employees, agents, properties, books, records and
contracts, and shall furnish the Company all financial, operating and
other data and information as the Company, through its officers,
employees or agents, may reasonably request. The Company shall, and
shall use its best efforts to cause its officers, employees and agents
to, hold in confidence all such nonpublic information until such time as
such information is otherwise publicly available, and, if this Agreement
is terminated, the Company will, and will use its best efforts to cause
its officers, employees and agents to, deliver to Sybarite, CNWVO, CNMF
or either of the Partnerships, as the case may be, all documents, work
papers and other material (including copies, extracts and summaries
thereof) obtained by or on behalf of any of them directly or indirectly
from any of Sybarite, CNWVO, CNMF or either of the Partnerships as a
result of this Agreement or in connection herewith, whether so obtained
before or after the execution hereof.
2. The Company shall, and shall cause its subsidiaries,
officers, directors, employees and agents to, provide the officers,
employees and agents of Sybarite with such information concerning the
Company as may be necessary for Sybarite to ascertain the accuracy and
completeness of the information supplied by the Company to verify the
performance of and compliance with its representations, warranties,
covenants and conditions herein contained. Each of Sybarite, CNWVO and
CNMF shall, and shall use its and their best efforts to cause each of
the Partnerships and its and their respective officers, directors,
partners, employees and agents to, hold in confidence all such nonpublic
information until such time as such information is otherwise publicly
available and, upon termination of this Agreement, each of Sybarite,
CNWVO and CNMF will, and will use its and their best efforts to cause
each of the Partnerships and its and their respective officers,
directors, partners, employees and agents to, deliver to the Company all
documents, work papers and other material (including copies, extracts
and summaries thereof) obtained by or on behalf of any of them, directly
or indirectly from the Company, as a result of this Agreement or in
connection herewith, whether so obtained before or after the execution
hereof.
3. No investigation pursuant to this Section 6(G) shall
affect any representations or warranties of the parties herein or the
conditions to the obligations of the parties hereto.
H. Mason County System. Each of Sybarite, CNWVO and CNMF
shall use its reasonable efforts to cause West Virginia One to convey
the Mason County System to Great Seal on or prior to August 31, 1994; it
being understood that West Virginia One shall not be required to convey
the Mason County System to Great Seal prior to receiving the Mason
County Consent.
I. Indemnification. Each of Sybarite, CNWVO, CNMF and
Finch hereby agrees to the provisions contained in the Indemnification
Agreement attached hereto as Exhibit D. To the extent a provision in
the Indemnification Agreement conflicts with any other provision in this
Agreement, the provision in the Indemnification Agreement shall control.
29
<PAGE>
J. Confidential Information.
1. Each of the Company, Sybarite, CNWVO and CNMF on behalf
of itself, and its Representatives and Affiliates, agrees to maintain
the confidentiality of data and other proprietary information concerning
the others and/or its or their Affiliates which has been made or will be
made available or disclosed to it in connection with Mergers, except (i)
as required by any party to enforce the rights of such party under this
Agreement; (ii) as required to obtain any Consent; (iii) in connection
with any disclosures required in connection with any efforts to obtain
financing; or (iv) in connection with any disclosures required by law.
Notwithstanding the foregoing, each party may disclose any such
information to its partners, officers, directors, employees, lenders,
Representatives and agents, and such persons shall be informed of the
confidential nature of such information and shall be directed and shall
agree to treat such information confidentially.
2. In the event of the termination of this Agreement for any
reason whatsoever, each party shall return to the other all documents,
work papers and other material (including all copies thereof) obtained
in connection with the transactions contemplated hereby and will use all
reasonable efforts, including instructing any of its employees and
others who have had access to such information, to keep confidential and
not to use any such information, unless such information is now, or is
hereafter disclosed, through no act or omission of such party, in any
manner making it available to the general public.
3. The provisions of this Section 6(J) do not apply to
information received by one party in connection with the transactions
contemplated hereby which (i) is or becomes generally available to the
public other than as a result of a disclosure by such party or its
Representatives, (ii) was within such party's possession prior to its
being furnished to such party by or on behalf of the other party in
connection with the transactions contemplated hereby, provided that the
source of such information was not known by such party to be bound by a
confidentiality agreement with or other contractual, legal or fiduciary
obligation of confidentiality to the other party or any other person
with respect to such information or (iii) becomes available to such
party on a non-confidential basis from a source other than the other
party or any of its Representatives, provided that such source is not
bound by a confidentiality agreement with or other contractual, legal or
fiduciary obligation of confidentiality to the other party or any other
person with respect to such information.
K. Closing of Acquisitions. The Company shall use its
reasonable efforts to bring about the consummation of the Acquisitions
pursuant to the Partnership Interest Purchase Agreement, dated as of
July 5, 1994, by and between the Company and Sterling (the "Purchase
Agreement") and to cause such consummation to occur concurrently with
the Closing hereunder. The Company hereby acknowledges and agrees that
it will be in default hereunder if this Agreement is terminated or the
Closing does not occur due to the Company's failure to consummate the
Acquisitions due to a material breach of the Purchase Agreement by the
Company. The Company further acknowledges and agrees that, absent the
prior written consent of Sybarite, the Company will not consent to any
amendment, change or modification to the Purchase Agreement.
30
<PAGE>
L. Sterling Debt. Finch owes certain indebtedness to
Sterling, with a principal balance as of March 31, 1994 of approximately
$1,461,725 and which is secured by the partnership interests in Maine
Four and West Virginia One owned by Sybarite, CNWVO and CNMF (the
"Sterling Debt"). The Written Instructions shall contain a directive
that a portion of the cash consideration otherwise to be paid to Finch
hereunder shall be used to satisfy in full the Sterling Debt.
Section 7. Conditions.
A. Conditions to Obligation of Each Party to Effect the
Mergers. The respective obligations of each party to effect the Mergers
shall be subject to the fulfillment at or prior to the Effective Time of
the following conditions:
1. The transfer of control of the licenses issued by the FCC
in the name of and held by the Partnerships to the Company shall have
been consented to by the FCC by a Final Order and by the PSC; and
2. No preliminary or permanent injunction or other order,
decree or ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission nor any
statute, rule, regulation or executive order promulgated or enacted by
any governmental authority shall be in effect, which would make the
acquisition or holding by Sybarite, CNWVO or CNMF of the shares of
Common Stock of the Surviving Corporation illegal or otherwise prevent
the consummation of the Mergers; provided, however, that the parties
shall have used their reasonable efforts to prevent such event.
B. Conditions to Obligation of the Company to Effect the
Mergers. The obligation of the Company to effect the Mergers shall be
subject to the satisfaction at or prior to the Effective Time of the
following additional conditions that:
1. each of Sybarite, CNWVO and CNMF shall have performed in
all material respects its respective obligations under this Agreement
required to be performed by it and them at or prior to the Effective
Time;
2. the representations and warranties of each of Sybarite,
CNWVO and CNMF shall be true and correct in all material respects at and
as of the Effective Time as if made at and as of such time;
3. Sybarite shall have delivered to the Company an opinion
of counsel to Sybarite, dated as of the Closing Date, in form and
substance reasonably satisfactory to the Company, to the effect that:
(a) Sybarite is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of South
Carolina. Each of CNWVO and CNMF is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of
Florida;
31
<PAGE>
(b) Each of Sybarite, CNWVO and CNMF has all requisite
corporate power and authority to execute and deliver this Agreement and
to consummate the Mergers and all requisite corporate action has been
taken by each of Sybarite, CNWVO and CNMF to authorize the execution,
delivery and performance of this Agreement by each of them,
respectively;
(c) This Agreement has been duly executed and delivered by
each of Sybarite, CNWVO and CNMF and is the valid and binding obligation
of each of them enforceable against each of them in accordance with its
terms, except as limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to creditors' rights generally
or by equitable principles (whether considered in an action at law or in
equity) and other customary limitations reasonably satisfactory to the
Company's counsel;
(d) Neither the execution and delivery of this Agreement by
Sybarite, CNWVO or CNMF, respectively, nor the consummation by any of
Sybarite, CNWVO or CNMF of the Mergers (i) will violate, conflict with,
or constitute a default under (1) the West Virginia One Partnership
Agreement; (2) the Maine Four Partnership Agreement; (3) the Articles of
Incorporation or Bylaws of any of Sybarite, CNWVO or CNMF or (4) to the
best knowledge of such counsel, any United States federal law or
regulation applicable to Seller or any agreement identified to such
counsel to which any of Sybarite, CNWVO or CNMF is a party; or (ii)
requires any authorization, consent, order, permit or approval of, or
filing with, any United States federal governmental body under any
statute or rule known to such counsel for the consummation by any of
Sybarite, CNWVO or CNMF of the Mergers, other than the Assignment
Applications;
(e) Each of Sybarite, CNWVO and CNMF is a duly qualified S-
corporation (within the meaning of Section 1361(a)(1) of the Code) for
federal income tax purposes and has been properly so treated since the
time of its organization;
4. the Company shall have consummated the Acquisitions; and
5. each of Finch, Blow and Warner shall have delivered to
the Company an affidavit stating in each case, under penalty of perjury,
that the indicated number is his or its United States taxpayer
identification number and that he or it is not a foreign person,
pursuant to Section 1445(b)(2) of the Code.
C. Conditions to Obligation of Sybarite, CNWVO and CNMF to
Effect the Mergers. The obligation of Sybarite, CNWVO and CNMF to
effect the Mergers shall be subject to the satisfaction at or prior to
the Effective Time of the following additional conditions that:
1. the Company shall have performed in all material respects
its obligations under this Agreement required to be performed by it at
or prior to the Effective Time;
2. the representations and warranties of the Company shall
be true and correct in all material respects at and as of the Effective
Time as if made at and as of such time;
32
<PAGE>
3. the Mason County System shall have been transferred to
Great Seal;
4. the Company shall have consummated the Acquisitions;
5. the Company shall be ready, willing and able, to the
reasonable satisfaction of the Shareholders, to satisfy and extinguish
fully the NovAtel Debt immediately after the consummation of the
Mergers; and
6. the Company shall cause its counsel to deliver an opinion
to Sybarite to the effect that the Common Stock can be validly issued,
will not result in a violation of the Bylaws or the Articles of
Incorporation of the Company or any other agreement to which the Company
is a party.
Section 8. Default and Remedies
A. Opportunity to Cure. If a party believes another party
to be in material default or breach hereunder, the former party shall
provide the other with written notice specifying in reasonable detail
the nature of such default. If the default has not been cured by the
earlier of (i) the Closing Date, or (ii) within fourteen (14) days after
delivery of such notice, then the party giving such notice may terminate
this Agreement and/or exercise the remedies available to such party
pursuant to this Section 8, subject to the right of the other party to
contest such action through appropriate proceedings, and provided that
the terminating party is not in material default hereunder, and provided
further that, if it is determined that the noticed party was not in
default, the party terminating the Agreement under this Section 8(A)
shall be in material default under and shall have breached this
Agreement.
B. Remedies. Each of Sybarite, CNWVO and CNMF agrees that
such corporations represent unique property that cannot be readily
obtained on the open market and that the Company will be irreparably
injured if this Agreement is not specifically enforced. Therefore, the
Company shall have the right to obtain decree(s) of specific performance
entitling it to a temporary restraining order, preliminary injunction,
or permanent injunction to specifically enforce and require specific
performance of the terms and provisions of this Agreement, and each
other agreement, document or instrument contemplated herein. Each of
Sybarite, CNWVO and CNMF agrees that notice shall be adequate for the
entry of a decree of specific performance in respect of any matter (i)
in the case of a temporary restraining order, upon twenty-four (24)
hours' prior notice of the hearing thereof and (ii) in the case of any
other proceeding, upon ten (10) days' prior notice of the hearing
thereof, and hereby waives all requirements and demand that the Company
give any greater notice of such hearings and further waives all
requirements and demands that the Company post a bond or other surety
arrangement in connection with the issuance of any such decree, and
further waives the defense in any such suit that the Company has an
adequate remedy at law and agrees to interpose no opposition, legal or
otherwise, as to the propriety of specific performance as a remedy.
Prior to Closing, in addition to the foregoing, if any party hereto is
in default of its obligations hereunder, the nonbreaching party may seek
whatever relief may be available to such nonbreaching party under
applicable
33
<PAGE>
law or in equity. After Closing, indemnification shall be the sole
remedy available to any of the parties hereunder pursuant to the
Indemnification Agreement.
Section 9. Termination, Amendment and Waiver
A. Termination. This Agreement may be terminated at any
time prior to the Effective Time by mutual written consent of the Board
of Directors of each of Sybarite, CNWVO, CNMF and the Company, subject
to the limitations of any agreement any party hereto has with Sterling.
Upon the request of any party, and except as limited by Section 6(B), if
not terminated sooner, this Agreement shall terminate on December 31,
1994 at 11:59 p.m. E.S.T. unless the Closing has occurred by that time.
Any termination of this Agreement shall not affect the rights and
abilities of a party to seek remedies at law or in equity from a party
that has breached this Agreement. Notwithstanding the foregoing, the
Closing Date hereunder may occur after December 31, 1994 if the Mason
County Consent has not been received, but no later than March 31, 1995.
B. Amendment. This Agreement may not be amended except by
action of the Board of Directors of each of the parties hereto set forth
in an instrument in writing signed on behalf of each of the parties
hereto, subject to the limitations of any agreement any party hereto has
with Sterling.
C. Waiver. At any time prior to the Effective Time, any
party hereto may extend the time for the performance of any of the
obligations or other acts of any other party hereto or waive compliance
with any of the agreements of any other party or with any conditions to
its own obligations. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party by a duly
authorized officer.
Section 10. General Provisions.
A. Public Statements. The parties agree to consult with
each other prior to issuing any public announcement or statement with
respect to the Mergers.
B. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly
given if delivered personally or sent by cable, telegram, telecopies,
overnight courier or telex to the parties at the following addresses or
at such other addresses as shall be specified by the parties by like
notice:
34
<PAGE>
1. If to Sybarite, CNWVO, CNMF, Finch, Blow or Warner:
Sybarite Communications, Inc.
Cellular West Virginia One Nonwireline, Inc.
Cellular Maine Four Nonwireline, Inc.
2100 Emerald Dunes
West Palm Beach, FL 33411
Attention: Raymon R. Finch, Jr.
with a copy to:
Cherry & Spencer
1665 Palm Beach Lakes Blvd.,
Suite 600
West Palm Beach, FL 33401
Attention: Richard G. Cherry, Esq.
2. If to the Company:
Vanguard Cellular Systems, Inc.
2002 Pisgah Church Road, Suite 300
Greensboro, NC 27455
Attention: Richard C. Rowlenson, Senior Vice President
with a copy to:
Latham & Watkins
1001 Pennsylvania Avenue, N.W.,
Suite 1300
Washington, D.C. 20004
Attention: Eric A. Stern, Esq.
C. Interpretation. The headings contained in this
Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement.
D. Miscellaneous. This Agreement and the Indemnification
Agreement (including any Schedules attached hereto and thereto) (i)
constitutes the entire agreement and supersedes all other prior
agreements and undertakings, both written and oral, among the parties,
or any of them, with respect to the subject matter hereof; (ii) is not
intended to confer upon any other person any rights or remedies
hereunder; (iii) shall not be assigned; and (iv) shall be governed in
all respects, including validity, interpretation and effect, by the
internal laws of the North Carolina, without giving effect to the
principles of conflict of laws thereof. This Agreement may be executed
in one or more counterparts which together shall constitute a single
agreement.
35
<PAGE>
E. Consent to Jurisdiction. The parties hereby
irrevocably (i) submit to the jurisdiction of the United States District
Court sitting in the Middle District of North Carolina with respect to
any suit, action or proceeding relating to this Agreement or any other
agreement entered into in connection with the transactions contemplated
hereby, and agree that any such action, suit or proceeding shall be
brought only in such jurisdiction and court, (ii) waive any objection
which they may now or hereafter have to the laying of venue of any such
suit, action or proceeding brought in such court and any claim that any
such suit action or proceeding brought in such court has been brought in
an inconvenient forum, (iii) waive the right to object that such court
does not have jurisdiction over them, and (iv) consent to the service of
process in any such suit, action or proceeding by the mailing of copies
of such process to the parties by certified mail to the addresses
indicated in this Agreement or at such other addresses of which any of
the parties, as the case may be, shall have received written notice.
Nothing herein shall preclude any party from enforcing any judgment
obtained in the United States District Court for the Middle District of
North Carolina in any other jurisdiction.
F. Counterparts; Facsimile Execution. This Agreement may
be executed in one or more counterparts, each of which shall be deemed
an original, but all of which together shall constitute one and the same
instrument. Any execution may be by telefacsimile transmission and any
such execution shall have the same force and effect as an original
execution.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first written above by their
respective officers thereunder duly authorized.
Attest: VANGUARD CELLULAR SYSTEMS, INC.
Richard C. Rowlenson By: L. Richardson Preyer
Name: Richard C. Rowlenson Its: Executive Vice President
Title: Assistant Secretary
Attest: SYBARITE COMMUNICATIONS, INC.
_____________________________ By: ______________________________
Name: Its:
Title:
Attest: CELLULAR NONWIRELINE WEST VIRGINIA
ONE, INC.
_____________________________ By: ______________________________
Name: Its:
Title:
36
<PAGE>
Attest: CELLULAR NONWIRELINE MAINE FOUR,
INC.
_____________________________ By: _____________________________
Name: Its:
Title:
Witness:
_____________________________ Raymon R. Finch, Jr.
Name: Raymon R. Finch, Jr.
Witness:
Kelley Fletcher Robert B. Blow
Name: Robert B. Blow
Witness:
_____________________________ Mark R. Warner
Name: Mark R. Warner
37
<PAGE>
ARTICLES OF AMENDMENT
OF
VANGUARD CELLULAR SYSTEMS, INC.
The undersigned corporation hereby submits these Articles of Amendment
for the purpose of amending its Articles of Incorporation:
1. The name of the corporation is Vanguard Cellular Systems, Inc.
2. The following amendment to the Articles of Incorporation was
adopted in the manner prescribed by law:
Section A of Article IV was amended to read in its entirety as follows:
"IV.
(A) The aggregate number of shares which the corporation shall
have authority to issue is 281,000,000 divided into three classes. The
designation and number of shares of each class and par value of the
shares of each class are as follows:
Class No. of Shares Par Value Per Share
Class A
Common Stock 250,000,000 $.01
Class B
Common Stock 30,000,000 $.01
Preferred
Stock 1,000,000 $.01"
3. The amendment was approved by the Shareholders of the corporation
on May 10, 1995.
4. Shareholder approval of the amendment was obtained as required by
Chapter 55 of the General Statutes of North Carolina.
VANGUARD CELLULAR SYSTEMS, INC.
By: /s/ Haynes G. Griffin
Haynes G. Griffin, President
</TABLE>
Exhibit 2
COMPOSITE COPY
July 25, 1995
BYLAWS
OF
VANGUARD CELLULAR SYSTEMS, INC.
ARTICLE I
Offices
1. Principal Office. The principal office of the corporation
shall be located at such place as the Board of Directors may determine.
2. Other Offices. The corporation may have offices at such other
places, either within or without the State of North Carolina, as the
Board of Directors may from time to time determine, or as the affairs of
the corporation may require.
ARTICLE II
Shareholders' Meetings
1. Place of Meetings. All meetings of the shareholders shall be
held at the principal office of the corporation, or at such other place,
either within or without the State of North Carolina, as shall be
designated in the notice of the meeting or agreed upon by a majority of
the shareholders entitled to vote thereat.
2. Annual Meetings. The annual meeting of shareholders shall be
held in May of each year on a date to be determined by the Board of
Directors for the purpose of electing directors of the corporation and
for the transaction of such other business as may be properly brought
before the meeting.
3. Substitute Annual Meetings. If the annual meeting shall not be
held on the day designated by these bylaws, a substitute annual meeting
may be called in accordance with the provisions of Section 4 of this
Article. A meeting so called shall be designated and treated for all
purposes as the annual meeting.
4. Special Meetings. Special meetings of the shareholders may be
called at any time by the Chairman, President, Secretary or Board of
Directors of the corporation.
5. Notice of Meetings. Written or printed notice stating the time
and place of the meeting shall be delivered no fewer than 10 nor more
than 60 days before the date thereof, either personally or by mail, by
or at the direction of the President, the Secretary, or other person
calling the meeting, to each
<PAGE>
shareholder of record entitled to vote at such meeting and to each
nonvoting shareholder entitled to notice of the meeting. If the
corporation is required by law to give notice of proposed action to
nonvoting shareholders and the action is to be taken without a meeting
pursuant to Section 9 of this Article, written notice of such proposed
action shall be delivered to such shareholders not less than 10 days
before such action is taken.
If notice is mailed, such notice shall be effective when deposited
in the United States mail with postage thereon prepaid and correctly
addressed to the shareholder's address shown in the corporation's
current record of shareholders.
In the case of an annual or substitute annual meeting, the notice
of meeting need not specifically state the business to be transacted
thereat unless it is a matter with respect to which specific notice to
the shareholders is expressly required by the provisions of the North
Carolina Business Corporation Act. In the case of a special meeting the
notice of meeting shall specifically state the purpose or purposes for
which the meeting is called.
When a meeting is adjourned for more than 120 days after the date
fixed for the original meeting or if a new record date for the adjourned
meeting is fixed, notice of the adjourned meeting shall be given as in
the case of an original meeting. When a meeting is adjourned for 120
days or less and no new record date for the adjourned meeting is fixed,
it is not necessary to give notice of the adjourned meeting other than
by announcement at the meeting at which the adjournment is taken.
6. Waiver of Notice. A shareholder may waive any notice required
by law, the Articles of Incorporation, or these bylaws before or after
the date and time stated in the notice. Such waiver must be in writing,
be signed by the shareholder entitled to the notice, and be delivered to
the corporation for inclusion in the minutes or filing with the
corporate records. A shareholder's attendance at a meeting waives
objection to lack of notice or defective notice of the meeting, unless
the shareholder at the beginning of the meeting objects to holding the
meeting or transacting business at the meeting. A shareholder's
attendance at a meeting also waives objection to consideration of a
particular matter at the meeting that is not within the purpose or
purposes described in the notice of meeting, unless the shareholder
objects to considering the matter before it is voted upon.
7. Quorum. Shares representing a majority of the outstanding
votes entitled to vote upon a particular matter within each voting group
represented in person or by proxy shall constitute a quorum at meetings
of shareholders. If there is no quorum at the opening of a meeting of
shareholders, such meeting may be adjourned from time to time by a vote
of a majority of the
-2-
<PAGE>
votes on the motion to adjourn; at any adjourned meeting at which a
quorum is present, any business may be transacted which might have been
transacted at the original meeting unless a new record date is or must
be set for the adjourned meeting.
Once a share is represented for any purpose at a meeting, it is
deemed present for quorum purposes for the remainder of the meeting and
for any adjournment of that meeting unless a new record date is set for
that adjourned meeting.
8. Voting of Shares. Except to the extent the Articles of
Incorporation provide for multiple or fractional votes per share for
certain classes of capital stock, each outstanding share having voting
rights shall be entitled to one vote on each matter submitted to a vote
at a meeting of the shareholders. Except in the election of directors, a
majority of the votes cast on any matter at a meeting of shareholders at
which a quorum is present shall be the act of the shareholders on that
matter, unless a greater vote is required by law, by the Articles of
Incorporation or by a bylaw adopted by the shareholders of the
corporation.
9. Informal Action by Shareholders. Any action which is required
or permitted to be taken at a meeting of the shareholders may be taken
without a meeting if a consent in writing, setting forth the action so
taken, shall be signed, either before or after the time the action which
is the subject of the shareholder approval is taken, by all of the
persons who would be entitled to vote upon such action at a meeting and
delivered to the corporation for inclusion in the minutes or filing with
the corporate records. Unless otherwise fixed by law or these bylaws,
the record date for determining the shareholders entitled to take action
without a meeting shall be the date the first shareholder signs the
consent.
10. Voting Lists. After fixing a record date for a meeting, the
corporation shall prepare an alphabetical list of the names of all the
shareholders entitled to notice of such meeting, arranged by voting
group and within each voting group by class or series of shares, with
the address of and number of shares held by each shareholder. Such list
shall be available for inspection by any shareholder, beginning two
business days after notice is given of the meeting for which the list
was prepared and continuing through the meeting, at the corporation's
principal office or at a place identified in the meeting notice in the
city where the meeting will be held. A shareholder, or his agent or
attorney, is entitled on written demand to inspect and, subject to the
requirements of North Carolina law, to copy the list, during regular
business hours and at his expense, during the period it is available for
inspection. This list shall also be produced and kept open at the time
and place of the meeting and shall be subject to inspection by any
shareholder, or his agent or attorney, during the whole time of the
meeting or any adjournment.
-3-
<PAGE>
11. Proxies. Shares may be voted either in person or by one or
more agents authorized by a written appointment form executed by the
shareholder or by his duly authorized attorney in fact. An appointment
form is valid for 11 months from the date of its execution, unless a
different period is expressly provided in the appointment form. An
appointment is revocable by the shareholder unless the appointment form
conspicuously states that it is irrevocable and the appointment is
coupled with an interest.
12. Shares Held by Nominees. The corporation may establish a
procedure by which the beneficial owner of shares that are registered in
the name of a nominee is recognized by the corporation as a shareholder.
The extent of this recognition may be determined in the procedure.
ARTICLE III
Directors
1. General Powers. Subject to the Articles of Incorporation, all
corporate powers shall be exercised by or under the authority of, and
the business and affairs of the corporation be managed under the
direction of, its Board of Directors.
2. Number, Term and Qualifications. The number of directors of
the corporation shall be not less than nine nor more than seventeen.
The exact number of directors shall be eleven or such other number
within the foregoing range as shall be determined from time to time by
the Board of Directors. Directors need not be residents of the State of
North Carolina or shareholders of the corporation.
3. Term and Election. The Board of Directors shall be divided
into classes, as nearly equal in number as the then total number of
directors constituting the entire Board permits, designated as Class I
Directors, Class II Directors and Class III Directors, respectively, at
the time of their election and shall have the terms of office as
follows: The term of office of Class I Directors shall expire at the
1988 Annual Meeting of Shareholders; the term of office of Class II
Directors shall expire at the 1989 Annual Meeting of Shareholders; and
the term of office of Class III Directors shall expire at the 1990
Annual Meeting of Shareholders; with the members of each class of
directors to hold office until their successors are elected and
qualified. At each Annual Meeting of the Shareholders subsequent to the
1987 Annual Meeting of Shareholders, directors elected to succeed those
whose terms are expiring shall be elected for a term of office to expire
at the third succeeding Annual Meeting of Shareholders and until their
respective successors are elected and qualified. Persons who receive a
plurality of the votes cast at any election of directors shall be deemed
to have been elected.
-4-
<PAGE>
4. Removal. Notwithstanding any other provision of the bylaws of
the corporation, any director or the entire Board of Directors of the
corporation may be removed at any time, but only for cause and only by
the affirmative vote of the holders of at least two-thirds (66-2/3%) of
the outstanding shares of capital stock of the corporation entitled to
vote generally in elections of directors (considered for this purpose as
a single class). If any directors are so removed, new directors may be
elected at the same meeting.
A director may not be removed by the shareholders at a meeting
unless the notice of the meeting states that the purpose, or one of the
purposes, of the meeting is removal of the director.
5. Vacancies. Unless the Articles of Incorporation provide
otherwise, if a vacancy occurs on the Board of Directors, including,
without limitation, a vacancy resulting from an increase in the number
of directors or from the failure by the shareholders to elect the full
authorized number of directors, the vacancy may be filled by the
shareholders or the Board of Directors. If the directors remaining in
office constitute fewer than a quorum of the Board of Directors,
vacancies may be filled by the affirmative vote of a majority of all the
directors, or by the sole remaining director. A vacancy that will occur
at a specific later date may be filled before the vacancy occurs but the
new director may not take office until the vacancy occurs. A director
elected to fill a vacancy shall serve for the unexpired term of his
predecessor in office and until his successor is elected and qualified.
6. Chairman. There may be a Chairman of the Board of Directors
elected by the directors from their number at any meeting of the Board.
The Chairman shall preside at all meetings of the Board of Directors and
perform such other duties as may be directed by the Board. The Board of
Directors may designate the Chairman of the Board or any Vice-Chairman
of the Board as an officer of the corporation.
7. Compensation. The Board of Directors may compensate a director
for his services as such and may provide for the payment of all expenses
incurred by a director in attending regular and special meetings of the
Board or in otherwise fulfilling his duties as a director.
8. Executive and Other Committees. Unless otherwise provided in
the Articles of Incorporation or the bylaws, the Board of Directors, by
resolution adopted by a majority of the number of directors then in
office, may designate from among its members an executive committee and
one or more other committees, each consisting of two or more directors.
To the extent specified by the Board of Directors or in the Articles of
-5-
<PAGE>
Incorporation of the corporation, such committees shall have and may
exercise all of the authority of the Board of Directors in the
management of the business and affairs of the corporation, except that a
committee may not authorize distributions; approve or propose to
shareholders action that North Carolina law requires be approved by
shareholders; fill vacancies on the Board of Directors or on any
committee; amend the Articles of Incorporation; adopt, amend, or repeal
bylaws; approve a plan of merger not requiring shareholder approval;
authorize or approve reacquisition of shares of capital stock of the
corporation, except according to a formula or method prescribed by the
Board of Directors; or authorize or approve the issuance or sale or
contract for sale of shares, or determine the designation and relative
rights, preferences, and limitations of a class or series of shares,
except that the Board of Directors may authorize a committee (or a
senior executive officer of the corporation) to do so within limits
specifically prescribed by the Board of Directors.
ARTICLE IV
Meetings of Directors
1. Regular Meetings. A regular meeting of the Board of Directors
shall be held immediately after, and at the same place as, the annual
meeting of the shareholders. The Board of Directors may also provide,
by resolution, the time and place, either within or without the State of
North Carolina, for the holding of additional regular meetings.
2. Special Meetings. Special meetings of the Board of Directors
may be called by or at the request of the Chairman of the Board, the
President or any two directors. Such meetings may be held within or
without the State of North Carolina.
3. Notice of Meetings. Regular meetings of the Board of Directors
may be held without notice.
The person or persons calling a special meeting of the Board of
Directors shall, at least two days before the meeting, give notice
thereof by any usual means of communication. Such notice need not
specify the purpose for which the meeting is called.
4. Waiver of Notice. Any director may waive any required notice
before or after the date and time stated in the notice. Attendance at
or participation by a director in a meeting shall constitute a waiver of
notice of such meeting, unless the director at the beginning of the
meeting (or promptly upon his arrival) objects to holding the meeting or
transacting any business at the meeting and does not thereafter vote for
or assent to action taken at the meeting.
-6-
<PAGE>
5. Quorum. A majority of the number of directors prescribed, or,
if no number is prescribed, the number in office immediately before the
meeting begins, shall constitute a quorum for the transaction of
business at any meeting of the Board of Directors.
6. Manner of Acting. Except as otherwise provided by law, the
Articles of Incorporation or these bylaws, an act of the majority of the
directors present at a meeting at which a quorum is present shall be the
act of the Board of Directors.
The vote of a majority of the directors then holding office shall
be required to adopt, amend or repeal a bylaw, if otherwise permissible.
Approval of a transaction in which one or more directors have an adverse
interest shall require a majority, not less than two, of the
disinterested directors then in office, even though less than a quorum.
7. Presumption of Assent. A director of the corporation who is
present at a meeting of the Board of Directors or a committee of the
Board of Directors when corporate action is taken shall be deemed to
have assented to the action taken unless his contrary vote is recorded;
he objects at the beginning of the meeting (or promptly upon his
arrival) to holding it or transacting business at the meeting; his
dissent or abstention is entered in the minutes of the meeting; or he
files written notice of dissent or abstention with the presiding officer
of the meeting before its adjournment or with the corporation
immediately after the adjournment of the meeting. The right of dissent
or abstention is not available to a director who voted in favor of such
action.
8. Informal Action by Directors and Attendance by Telephone.
Action taken by a majority of the directors without a meeting is
nevertheless Board action if written consent to the action in question,
describing the action taken, is signed by all the directors and filed
with the minutes of the proceedings of the Board or with the corporate
records, whether done before or after the action so taken. Such action
shall be effective when the last director signs the consent, unless the
consent specifies a different effective date. The Board of Directors
may permit any or all directors to participate in a regular or special
meeting by, or conduct the meeting through the use of, any means of
communication by which all directors participating may simultaneously
hear each other during the meeting. A director participating in a
meeting by this means is deemed to be present in person at the meeting.
9. Loans to Directors. Except as otherwise provided by law, the
corporation shall not directly or indirectly lend money to or guarantee
the obligation of a director of the corporation unless the particular
loan or guarantee is approved by a majority of the votes represented by
the outstanding voting shares of all classes, voting as a single voting
group, except the votes of
-7-
<PAGE>
shares owned by or voted under control of the benefited director, or
unless the corporation's Board of Directors determines that the loan or
guarantee benefits the corporation and either approves the specific loan
or guarantee or a general plan authorizing loans and guarantees. The
fact that a loan or guarantee is made in violation of this Section does
not affect the borrower's liability on the loan.
ARTICLE V
Officers
1. Designation and Number of Officers. The officers of the
corporation shall consist of Executive Officers and Nonexecutive
Officers. The Executive Officers of the corporation shall consist of
the Chairman, the President, any Executive Vice Presidents and Senior
Vice Presidents, the Secretary, the Treasurer, any Vice Presidents in
charge of a principal business unit, division or function (such as
sales, administration or finance), and any other officer designated an
Executive Officer by the Board of Directors. Nonexecutive Officers are
all officers other than Executive Officers including, without
limitation, Assistant Vice Presidents, Assistant Secretaries, Assistant
Treasurers and Vice Presidents not in charge of a principal unit,
division or function.
The Board of Directors may designate any Executive Officer as Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer,
Chief Accounting Officer or Chief Technology Officer, which officer
shall have such authority as the Board of Directors may designate. Any
two or more offices may be held by the same person, except the offices
of President and Secretary, but no officer may act in more than one
capacity where action of two or more officers is required. It shall not
be necessary for any officer to be a shareholder of the corporation.
2. Election or Appointment and Term. The Executive Officers of
the corporation shall be elected by the Board of Directors. Such
election may be held at any regular or special meeting of the Board.
Unless otherwise determined by the Board of Directors, the Chief
Executive Officer may appoint Nonexecutive Officers. Appointments by
the Chief Executive Officer shall become effective upon the Chief
Executive Officer's executing minutes of appointment and inserting such
minutes into the corporation's minute book. Each Executive and
Nonexecutive Officer shall hold office until his death, resignation,
retirement, removal, disqualification or until his successor is elected
or appointed and qualified.
3. Removal. Any officer or agent of the corporation may be
removed by the Board with or without cause. Any officer or agent
appointed by the Chief Executive Officer may be removed by him with or
without cause. The removal of an officer or agent
-8-
<PAGE>
pursuant to this section shall be without prejudice to the contract
rights, if any, of the person so removed.
4. Compensation. The compensation of all Executive Officers shall
be fixed by the Board of Directors. Unless otherwise determined by the
Board, the compensation of Nonexecutive Officers appointed by the Chief
Executive Officer of the corporation shall be fixed by him. No officer
shall serve the corporation in any other capacity and receive
compensation therefor unless such additional compensation be authorized
by the Board of Directors.
5. Chairman. The Chairman shall preside at all meetings of the
Board of Directors and of the shareholders and shall perform such other
duties as may be assigned to him by the Board.
6. President. The President shall, unless otherwise determined by
the Board of Directors, be the Chief Executive Officer of the
corporation and, subject to the control of the Board of Directors, shall
supervise and control the management of the corporation according to
these bylaws. He shall, in the absence of the Chairman, preside at all
meetings of the shareholders. He shall sign, with any other proper
officer, certificates for shares of the corporation, and any deeds,
mortgages, bonds, contracts or other instruments that may lawfully be
executed on behalf of the corporation, except where required or
permitted by law to be otherwise signed and executed and except where
the signing and execution thereof shall be delegated by the Board of
Directors to some other officer or agent; and, in general, he shall
perform all duties incident to the office of President and such other
duties as may be prescribed by the Board of Directors from time to time.
7. Vice Presidents. The Vice Presidents shall perform such duties
and shall have such other powers as the Board of Directors or the
President shall prescribe. The Board of Directors may designate one or
more Vice Presidents as Executive or Senior Vice President, or any other
title that the Board of Directors deems appropriate, and may rank the
Vice Presidents in order of authority. The Vice President, or, if more
than one, the highest ranking available Vice President, shall, in the
absence or disability of the President, perform the duties and exercise
the powers of that office.
8. Secretary. The Secretary shall keep accurate records of the
acts and proceedings of all meetings of shareholders and directors. He
shall give all notices required by law and by these bylaws. He shall
have general charge of the corporate records and books and of the
corporate seal, and he shall affix the corporate seal to any lawfully
executed instruments requiring it. He shall have general charge of the
stock transfer books of the Corporation and shall keep, at the
registered or principal office of the Corporation, a record of
shareholders showing the
-9-
<PAGE>
name and address of each shareholder and the number and class of the
shares held by each. He shall sign such instruments as may require his
signature, and in general, shall perform all duties incident to the
office of Secretary and such other duties as may be assigned to him from
time to time by the President or by the Board of Directors.
9. Treasurer. The Treasurer shall have custody of all funds and
securities belonging to the Corporation and shall receive, deposit or
disburse the same under the direction of the Board of Directors and the
President. He shall keep full and accurate records of the finances of
the Corporation in books especially provided for the purpose; and he
shall prepare or cause to be prepared, for each fiscal year, annual
financial statements of the corporation including a balance sheet as of
the end of the fiscal year, an income statement for that year, and a
statement of cash flows for the year, all in reasonable detail,
including particulars as to convertible securities then outstanding,
which financial statements or written notice of their availability shall
be mailed to each shareholder within 120 days after the close of each
fiscal year. The Treasurer shall, in general, perform all duties
incident to his office and such other duties as may be assigned to him
from time to time by the President or by the Board of Directors.
10. Assistant Officers. The Assistant Vice Presidents,
Secretaries and Treasurers shall, in the absence or disability of their
superiors, perform the duties and exercise the powers of those offices
and shall, in general, perform such other duties as shall be assigned to
them by the President or by the respective officers to whom they report.
11. Internal Auditor. The Chief Executive Officer may appoint one
or more internal auditors with the concurrence of the Audit Committee of
the Board of Directors. Any internal auditors so appointed may not be
dismissed without the concurrence of the Audit Committee.
12. Contract Rights. The appointment of an officer does not
itself create contract rights in the office.
13. Bonds. The Board of Directors may by resolution require any
or all officers, agents and employees of the corporation to give bond to
the corporation, with sufficient sureties, conditioned on the faithful
performance of the duties of their respective offices or positions, and
to comply with such other conditions as may from time to time be
required by the Board of Directors.
-10-
<PAGE>
ARTICLE VI
Contracts, Checks and Deposits
1. Contracts. The Board of Directors may authorize any officer or
officers, agent or agents, to enter into any contract or execute and
deliver any instrument on behalf of the corporation, and such authority
may be general or confined to specific instances.
2. Checks and Drafts. All checks, drafts or orders for the
payment of money issued in the name of the corporation shall be signed
by such officer or officers, agent or agents of the corporation and in
such manner as shall from time to time be determined by resolution of
the Board of Directors.
3. Deposits. All funds of the corporation not otherwise employed
shall be deposited from time to time to the credit of the corporation in
such depositories as the Board of Directors shall direct.
ARTICLE VII
Certificates for Shares and Transfer Thereof
1. Certificates for Shares. The Chairman or the President and the
Secretary or the Treasurer or any other two officers designated by the
Board of Directors shall sign (either manually or in facsimile) share
certificates. Shares may but need not be represented by certificates.
Unless otherwise provided by law, the rights and obligations of
shareholders are identical whether or not their shares are represented
by certificates. If shares are issued without certificates, the
corporation shall, within a reasonable time after such issuance, send
the shareholder a written statement of the information required on
certificates by law. At a minimum each share certificate or information
statement shall state on its face the following information: the name
of the corporation and that it is organized under the law of North
Carolina; the name of the person to whom issued; the number and class of
shares and the designation of the series, if any, the certificate or
information statement represents; if the corporation is authorized to
issue different classes of shares or different series within a class, a
summary of, or alternatively, a conspicuous statement on the back or
front of the certificate or contained in the information statement that
the corporation will furnish in writing and without charge, the
designations, relative rights, preferences, and limitations applicable
to each class and the variations in rights, preferences, and limitations
determined for each series (and the authority of the Board of Directors
to determine variations for future series); and, a conspicuous statement
of any restrictions on the transfer or registration of transfer of the
shares.
-11-
<PAGE>
2. Transfer of Shares. Transfer of shares of the corporation
evidenced by certificates shall be made only on the stock transfer books
of the corporation by the holder of record thereof, or by his legal
representative, who shall furnish proper evidence of authority to
transfer, or by his attorney thereunto authorized by power of attorney
duly executed and filed with the Secretary or other officer or agent
designated by the Board of Directors, and on surrender for cancellation
of the certificate for such shares. Transfer of shares of the
corporation not evidenced by certificates shall be made upon delivery to
the corporation of such documentation as the corporation shall require.
3. Fixing Record Date. For the purpose of determining the
shareholders entitled to notice of a meeting of shareholders, to vote,
to take any other action, or to receive a dividend with respect to their
shares, the Board of Directors may fix in advance a date as the record
date for any such determination of shareholders. Such record date fixed
by the Board of Directors under this Section shall not be more than 70
days before the meeting or action requiring a determination of
shareholders.
If no record date is fixed for the determination of shareholders
entitled to notice of or to vote at a meeting of shareholders, or
shareholders entitled to a dividend, the close of the business day
before the first notice is delivered to shareholders or the date on
which the Board of Directors authorizes the dividend, as the case may
be, shall be the record date for such determination of shareholders.
When a determination of shareholders entitled to vote at any
meeting of shareholders has been made as provided in this Section, such
determination shall apply to any adjournment thereof unless the Board of
Directors fixes a new record date, which it must do if the meeting is
adjourned to a date more than 120 days after the date fixed for the
original meeting.
4. Lost Certificates. If a shareholder claims that a certificated
security has been lost, apparently destroyed or wrongfully taken, the
corporation shall issue a new certificated security or, at the option of
the corporation, an equivalent noncertificated security in place of the
original security, if the shareholder so requests before the corporation
has notice that the security has been acquired by a bona fide purchaser,
files with the corporation a sufficient indemnity bond if so required by
the corporation, and satisfies any other reasonable requirements imposed
by the corporation.
5. Holder of Record. The corporation may treat as absolute owner
of shares the person in whose name the shares stand of record on its
books just as if that person had full competency, capacity and authority
to exercise all rights of ownership irrespective of any knowledge or
notice to the contrary or any
-12-
<PAGE>
description indicating a representative, pledge or other fiduciary
relation or any reference to any other instrument or to the rights of
any other person appearing upon its record or upon the share
certificates except that any person furnishing to the corporation proof
of his appointment as a fiduciary shall be treated as if he were a
holder of record of its share.
The corporation may reject a vote, consent, waiver, or proxy
appointment if the Secretary or other officer or agent authorized to
tabulate votes, acting in good faith, has reasonable basis for doubt
about the validity of the signature on it or about the signatory's
authority to sign for the shareholder.
6. Reacquired Shares. The corporation may acquire its own shares
and shares so acquired constitute authorized but unissued shares.
7. Rights, Options and Warrants. The corporation may issue
rights, options or warrants for the purchase of shares of the
corporation. The Board of Directors shall determine the terms upon
which the rights, options or warrants are issued, their form and
content, and the consideration for which the shares are to be issued.
Without limitation, the Board of Directors may include on such rights,
options and warrants restrictions or conditions that preclude or limit
the exercise, transfer or receipt of such rights, options or warrants by
the holder or holders, or beneficial owner or owners, of a specified
number or percentage of the outstanding voting shares of the corporation
or by any transferee of such holder or owner, or that invalidate or void
such rights, options or warrants held by any such holder or owner or by
such transferee. In addition, the Board of Directors may implement
rights plans that create purchase or conversion rights that are not
exercisable by a hostile bidder involved in a hostile takeover of the
corporation.
ARTICLE VIII.
Indemnification
1. Extent. In addition to the indemnification otherwise provided
by law, the corporation shall indemnify and hold harmless its directors
and Indemnified Officers (as hereinafter defined) against liability and
expenses in any proceeding, including reasonable attorneys' fees,
arising out of their status as directors or officers or their activities
in any of such capacities or in any capacity in which any of them is or
was serving, at the corporation's request, in another corporation,
partnership, joint venture, trust or other enterprise, and the
corporation shall indemnify and hold harmless those directors and
officers who are deemed to be fiduciaries of the corporation's present
and future employee pension and welfare benefit plans as defined under
the Employee Retirement Income Security Act of 1974
-13-
<PAGE>
("ERISA fiduciaries") against liability and expenses in any proceeding,
including reasonable attorneys' fees, arising out of their status or
activities as ERISA fiduciaries; provided, however, that the corporation
shall not indemnify a director or Indemnified Officer against liability
or litigation expense that he may incur on account of his activities
that at the time taken were known or reasonably should have been known
by him to be clearly in conflict with the best interests of the
corporation, and the corporation shall not indemnify an ERISA fiduciary
against any liability or litigation expense that he may incur on account
of his activities that at the time taken were known or reasonably should
have been known by him to be clearly in conflict with the best interests
of the employee benefit plan to which the activities relate. The
corporation shall also indemnify the director, Indemnified Officer, and
ERISA fiduciary for reasonable costs, expenses and attorneys' fees in
connection with the enforcement of rights to indemnification granted
herein, if it is determined in accordance with Section 2 of this Article
that the director, Indemnified Officer and ERISA fiduciary is entitled
to indemnification hereunder.
2. Determination. Any indemnification under Section 1 of this
Article shall be paid by the corporation in any specific case only after
a determination that the director, Indemnified Officer or ERISA
fiduciary did not act in a manner, at the time the activities were
taken, that was known or reasonably should have been known by him to be
clearly in conflict with the best interests of the corporation, or the
employee benefit plan to which the activities relate, as the case may
be. Such determination shall be made (a) by the affirmative vote of a
majority (but not less than two) of directors who are or were not
parties to such action, suit or proceeding or against whom any such
claim is asserted ("disinterested directors") even though less than a
quorum, or (b) if a majority (but not less than two) of disinterested
directors so direct, by independent legal counsel in a written opinion,
or (c) if there are less than two disinterested directors, by the
affirmative vote of all of the directors, or (d) by the vote of a
majority of all of the voting shares other than those owned or
controlled by directors or officers who were parties to such action,
suit or proceeding or against whom such claim is asserted, or by a
unanimous vote of all of the voting shares, or (e) by a court of
competent jurisdiction.
3. Advanced Expenses. Expenses incurred by a director,
Indemnified Officer or ERISA fiduciary in defending a civil or criminal
claim, action, suit or proceeding may, upon approval of a majority (but
not less than two) of the disinterested directors, even though less than
a quorum, or, if there are less than two disinterested directors, upon
unanimous approval of the Board of Directors, be paid by the corporation
in advance of the final disposition of such claim, action, suit or
proceeding upon receipt of an undertaking by or on behalf of the
director,
-14-
<PAGE>
Indemnified Officer or ERISA fiduciary to repay such amount unless it
shall ultimately be determined that he is entitled to be indemnified
against such expenses by the corporation.
4. Corporation. For purposes of this Article, references to
directors or officers of the "corporation" shall be deemed to include
directors, officers and ERISA fiduciary of Vanguard Cellular Systems,
Inc., its subsidiaries, and all constituent corporations absorbed into
Vanguard Cellular Systems, Inc. or any of its subsidiaries by a
consolidation or merger.
5. Indemnified Officer. For purposes of this Article,
"Indemnified Officer" shall mean all officers of the corporation who are
elected by the Board of Directors.
6. Reliance and Consideration. Any director, Indemnified Officer
or ERISA fiduciary who at any time after the adoption of this Bylaw
serves or has served in any of the aforesaid capacities for or on behalf
of the corporation shall be deemed to be doing or to have done so in
reliance upon, and as consideration for, the right of indemnification
provided herein. Such right shall inure to the benefit of the legal
representatives of any such person and shall not be exclusive of any
other rights to which such person may be entitled apart from the
provision of this Bylaw. No amendment, modification or repeal of this
Article VIII shall adversely affect the right of any director,
Indemnified Officer or ERISA fiduciary to indemnification hereunder with
respect to any activities occurring prior to the time of such amendment,
modification or repeal.
7. Insurance. The corporation may purchase and maintain insurance
on behalf of its directors, officers, employees and agents and those
persons who were serving at the request of the corporation as a
director, officer, partner, trustee, employee, or agent of, or in some
other capacity in, another corporation, partnership, joint venture,
trust, employee benefit plan, or other enterprise against any liability
asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the corporation would
have the power to indemnify him against such liability under the
provisions of this Article or otherwise. Any full or partial payment
made by an insurance company under any insurance policy covering any
director, officer, employee or agent made to or on behalf of a person
entitled to indemnification under this Article shall relieve the
corporation of its liability for indemnification provided for in this
Article or otherwise to the extent of such payment, and no insurer shall
have a right of subrogation against the corporation with respect to such
payment.
-15-
<PAGE>
ARTICLE IX
General Provisions
1. Dividends. The Board of Directors may from time to time
declare, and the corporation may pay, dividends on its outstanding
shares in such manner and upon such terms and conditions as are
permitted by law and by its Articles of Incorporation.
2. Waiver of Notice. Whenever any notice is required to be given
to any shareholder or director under the provisions of the North
Carolina Business Corporation Act or under the provisions of the
Articles of Incorporation or bylaws of the corporation, a waiver thereof
in writing signed by the person or persons entitled to such notice,
whether before or after the time stated therein, shall be equivalent to
such notice.
3. Fiscal Year. Unless otherwise ordered by the Board of
Directors, the fiscal year of the corporation shall be the calendar
year.
4. Inspection of Records by Shareholders. The shareholders shall
not be entitled to inspect or copy any accounting records of the
corporation or any records of the corporation with respect to any matter
which the corporation determines in good faith may, if disclosed,
adversely affect the corporation in the conduct of its business or may
constitute material nonpublic information at the time the shareholder's
notice of demand to inspect and copy is received by the corporation.
5. Amendments. Notwithstanding any other provision of the
Articles of Incorporation or the Bylaws of the corporation, the Board of
Directors of the corporation shall have the power to adopt, amend or
repeal the bylaws of the corporation except to the extent limited by
laws. The shareholders of the corporation may exercise their power to
adopt, amend or repeal the bylaws of the corporation only by the
affirmative vote of the holders of at least two-thirds (66-2/3%) of the
outstanding shares of capital stock of the corporation entitled to vote
generally in the election of directors (considered for this purpose as
one class and notwithstanding that some lesser percentage may be
permitted by law, or permitted or required by the Articles of
Incorporation or the bylaws of the corporation).
6. Inapplicability of Article 9. Article 9 of Chapter 55 of the
General Statutes of North Carolina entitled, "The North Carolina
Shareholder Protection Act," shall not apply to this corporation.
7. Inapplicability of Article 9A. Article 9A of Chapter 55 of the
General Statutes of North Carolina, entitled "Control Share Acquisition
Act," shall not apply to this corporation.
-16-
<PAGE>
