<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 31, 1998
REGISTRATION NO. 333-52269
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
------------------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------------
<TABLE>
<S> <C> <C>
PRICE COMMUNICATIONS NEW YORK 13-2991700
CORPORATION (State or other jurisdiction of (I.R.S. employer identification number)
(Exact name of Registrant as incorporation or organization)
specified in its charter)
</TABLE>
------------------------------
45 ROCKEFELLER PLAZA,
NEW YORK, NY 10020
(212) 757-5600
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------------
ROBERT PRICE, PRICE COMMUNICATIONS CORPORATION
45 ROCKEFELLER PLAZA, NEW YORK, NY 10020
(212) 757-5600
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
------------------------------
COPIES TO:
RICHARD D. TRUESDELL, JR.
DAVIS POLK & WARDWELL
450 Lexington Avenue,
New York, New York 10017
(212) 450-4000
------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: FROM TIME TO
TIME AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
------------------------------
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities being offered only in connection with dividend or
interest reinvestment plans, please check the following box. /X/
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
------------------------------
<TABLE>
<CAPTION>
AMOUNT OF AGGREGATE
TITLE OF EACH CLASS OF SECURITIES TO AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED PRICE PER UNIT OFFERING PRICE
<S> <C> <C> <C>
Warrants to purchase common stock, par value $0.01 per
share.................................................... 527,696 warrants (1) (1)
Common stock par value $.01 per share (2)................. 1,030,656 shares $12.65 13,012,032(3)
Total.....................................................
<CAPTION>
TITLE OF EACH CLASS OF REGISTRATION
SECURITIES TO BE REGISTERED FEE
<S> <C>
Warrants to purchase common stock, par value $0.01 per
share.................................................... (1)
Common stock par value $.01 per share (2)................. $3,838.55(4)
Total..................................................... $3,838.55(4)
</TABLE>
(1) Pursuant to Rule 457(g) under the Securities Act of 1933, the registration
fee is based on the common stock issuable upon the exercise of the Warrants
and no separate fee is payable in respect of the Warrants.
(2) 1,030,656 shares of Common Stock of the Company ("Common Stock") are
issuable initially upon exercise of the Warrants being registered hereunder,
at a rate of 1.95312 shares of Common Stock for each Warrant. An
indeterminate number of shares of Common Stock as may be issuable upon
exercise of the Warrants are registered hereunder, including such shares as
may be issuable pursuant to antidilution adjustments. The Common Stock
issuable upon exercise of the Warrants, if issued, will be issued for no
additional consideration.
(3) In accordance with Rule 457(c) and 457(g) under the Securities Act of 1933,
the price used for calculating the registration fee is the average of the
high and low sales price of the Company's Common Stock as reported on the
AMEX as of May 6, 1998, $12.625 per share.
(4) The registration fee of $3,838.5 was paid on the initial filing of the
Registration Statement on May 8, 1998.
------------------------------
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<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
SUBJECT TO COMPLETION, DATED JULY 31, 1998
PROSPECTUS JULY , 1998
PRICE COMMUNICATIONS CORPORATION
WARRANTS TO PURCHASE FOR $0.01 1,030,656 SHARES OF COMMON STOCK
1,030,656 SHARES OF COMMON STOCK, $0.01 PAR VALUE PER SHARE
This Prospectus relates to the resale of 527,696 warrants (the "Warrants")
to purchase an aggregate of 1,030,656 shares of Common Stock, par value $0.01
per share ("Common Stock"), of Price Communications Corporation, a New York
corporation ("PCC" or the "Company") from time to time for the accounts of
certain security holders of the Company named herein or in a supplement hereto
(the "Selling Security Holders"). Additionally, the 1,030,656 shares of Common
Stock (the "Warrant Shares") that may be purchased upon the exercise of the
Warrants by the Selling Security Holders will be offered and sold from time to
time.
The Warrants were issued and sold (the "Original Offering") on August 11,
1997 (the "Original Offering Date") in a sale of 153,400 units (the "Units"):
each unit consisted of one 13 1/2% Series A Senior Secured Discount Note due
2007 of Price Communications Holdings, Inc., a subsidiary of PCC, and warrants
to purchase 1.953125 shares of Common Stock at an exercise price of $0.01 per
share, as adjusted for stock splits. The Original Offering was made to certain
initial purchasers (the "Initial Purchasers") and the Units were simultaneously
sold by the Initial Purchasers in transactions exempt from the registration
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
in the United States to persons reasonably believed by the Initial Purchasers to
be qualified institutional buyers ("Qualified Institutional Buyers") as defined
in Rule 144A under the Securities Act or institutional accredited investors as
defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act
("Institutional Accredited Investors") and outside the United States to non-U.S.
persons in offshore transactions in reliance on Regulation S under the
Securities Act.
The Warrants and the Warrant Shares in respect of which this Prospectus is
being delivered (the "Offered Securities") may be offered and sold from time to
time by the Selling Security Holders pursuant to this Prospectus as
supplemented. The Offered Securities may be sold by the Selling Holders from
time to time directly to purchasers or through agents, underwriters or dealers.
See "Plan of Distribution" and "Selling Security Holders." If required, the
names of any such agents or underwriters involved in the sale of the Offered
Securities and the applicable agent's commission, dealer's purchase price or
underwriter's discount, if any, will be set forth in an accompanying supplement
to this Prospectus (the "Prospectus Supplement"). The Selling Security Holders
will receive all of the net proceeds from the sale of the Offered Securities and
will pay all underwriting discounts and selling commissions, if any, applicable
to any such sale. The Selling Security Holders and any broker-dealers, agents or
underwriters which participate in the distribution of the Offered Securities may
be deemed to be "underwriters" within the meaning of the Securities Act, and any
commission received by them and any profit on the resale of the Offered
Securities purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act. See "Plan of Distribution" for a description
of indemnification arrangements.
SEE "RISK FACTORS" BEGINNING ON PAGE 3 HEREOF FOR CERTAIN INFORMATION THAT
SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
Each Warrant is exercisable in the manner described herein at the option of
the holder, at any time prior to 5:00 p.m., New York City time, on August 1,
2007, into Common Stock at the initial rate of 1.0 (currently adjusted to
1.953125) shares of Common Stock for each Warrant, subject to adjustment in
certain circumstances. See "Description of the Warrants--Exercise Rights." Prior
to this offering there has been no public market for the Warrants and the
Company does not intend to apply for listing or quotation of the Warrants on any
securities exchange or stock market. The Common Stock is listed on the American
Stock Exchange (the "AMEX") under the symbol "PR." On July 27, 1998, the
reported last sale price of the Common Stock on the AMEX Composite Tape was
$17.88 per share.
No person has been authorized to give any information or to make any
representations other than those contained or incorporated by reference in this
Prospectus in connection with the offer made hereby and if given or made such
information or representation must not be relied upon as having been authorized
by the Company or any other person. Neither the delivery of this Prospectus nor
any sale made hereunder shall, under any circumstances, create any implication
that there has been no change in the affairs of the Company since the date
hereof or that the information contained or incorporated by reference herein is
correct as of any time subsequent to its date. This Prospectus does not
constitute an offer to sell or a solicitation of an offer to buy the securities
offered hereby by anyone in any jurisdiction in which such offer or solicitation
is not authorized or in which the person making such offer or solicitation is
not qualified to do so or to anyone to whom it is unlawful to make such offer or
solicitation.
<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 (the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities Act"),
for the registration of the Warrants and the Warrant Shares offered hereby. This
Prospectus, which constitutes a part of the Registration Statement, does not
contain all of the information set forth in the Registration Statement, certain
items of which are contained in exhibits and schedules to the Registration
Statement as permitted by the rules and regulations of the Commission. For
further information with respect to Warrants and the Warrant Shares, reference
is made to the Registration Statement, including the exhibits thereto, and the
financial statements and notes filed as a part thereof. Statements made in this
Prospectus concerning the contents of any contract, agreement or other document
referred to herein are not necessarily complete. With respect to each such
contract, agreement or other document filed with the Commission as an exhibit,
reference is made to the exhibit for a more complete description of the matter
involved, and each such statement shall be deemed qualified in its entirety by
such reference.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Commission. The reports, proxy statements and other information filed by the
Company with the Commission may be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's regional offices
at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661
and 7 World Trade Center, 13th Floor, New York, New York 10048. Copies of such
material may be obtained from the Public Reference Section of the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C., 20549, at prescribed
rates. The Common Stock is listed on the American Stock Exchange (the "AMEX")
under the symbol "PR." Reports, proxy statements and other information filed by
the Company may be inspected at the offices of the AMEX at 86 Trinity Place, New
York, NY 10006.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
PCC hereby incorporates in this Prospectus by reference thereto and makes a
part hereof the following documents, heretofore filed with the Commission
pursuant to the Exchange Act: (1) PCC's Annual Report on Form 10-K for the year
ended December 31, 1997; (2) PCC's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1998; and (3) the description of PCC's Common Stock, par value
$0.01, contained in PCC's Registration Statement on Form 8-A (Registration No.
1-08309) filed on December 29, 1992.
All documents filed by PCC pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act subsequent to the date of this Prospectus and prior to
termination of the offering being made hereby shall be deemed to be incorporated
in the Prospectus by reference and to be a part hereof from the respective dates
of the filing of such documents. Any statement contained herein or in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any subsequently filed document which also is,
or is deemed to be, incorporated by reference herein, modifies or supersedes
such statement. Any statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
PCC hereby undertakes to provide without charge to each person to whom a
copy of this Prospectus has been delivered, upon written or oral request of any
such person, a copy of any and all of the documents referred to above which have
been or may be incorporated in this Prospectus by reference, other than exhibits
to such documents which are not specifically incorporated by reference into such
documents. Requests for such copies should be directed to Robert Price,
President, Price Communications Corporation, 45 Rockefeller Plaza, New York, New
York 10020, telephone (212) 757-5600.
i
<PAGE>
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Prospectus contains statements which constitute forward looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. Those statements appear in a number of places in this Prospectus and
include statements regarding the intent, belief or current expectations of PCC,
their directors or their officers primarily with respect to the future operating
performance of PCC. Prospective purchasers of the Warrants and Warrant Shares
are cautioned that any such forward looking statements are not guarantees of
future performance and may involve risks and uncertainties, and that actual
results may differ from those in the forward looking statements as a result of
factors, many of which are outside the control of PCC. The accompanying
information contained in this Prospectus, including without limitation the
information set forth below, identifies important factors that could cause such
differences.
ii
<PAGE>
PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION INCLUDED ELSEWHERE IN THIS PROSPECTUS. EACH PROSPECTIVE INVESTOR IS
URGED TO READ THIS PROSPECTUS IN ITS ENTIRETY.
THE COMPANY
The Company has historically been a nationwide communications company owning
and then disposing of a number of television, radio, newspaper, cellular
telephone and other communications and related properties. The Company's
business strategy is to acquire communications properties at prices it considers
attractive, finance such properties on terms satisfactory to it, manage such
properties in accordance with its operating strategy and dispose of them if and
when the Company determines such dispositions to be in its best interests. Prior
to 1997 the Company owned a number of television, radio, newspaper and other
media and related properties which were disposed of pursuant to the Company's
long-standing policy of buying and selling media properties at times deemed
advantageous by the Company's Board of Directors. On October 6, 1997, Price
Communications Wireless, Inc. ("PCW"), an indirect subsidiary of PCC, acquired
Palmer in the acquisition described below.
The Company is currently engaged through PCW in the construction,
development, management and operation of cellular telephone systems in the
southeastern United States. At March 31, 1998, the Company provided cellular
telephone service to 326,721 subscribers in Georgia, Alabama, Florida and South
Carolina in a total of 16 licensed service areas composed of eight Metropolitan
Statistical Areas ("MSAs") and eight Rural Service Areas ("RSAs"), with an
aggregate estimated population of 3.3 million. The Company sells its cellular
telephone service as well as a full line of cellular products and accessories
principally through its network of retail stores. The Company markets all of its
products and services under the nationally recognized service mark
CELLULARONE-Registered Trademark-.
The Company has developed its business through the acquisition and
integration of cellular telephone systems, clustering multiple systems in order
to provide broad areas of uninterrupted service and achieve certain economies of
scale, including centralized marketing and administrative functions as well as
multi-system capital expenditures. The Company devotes considerable attention to
engineering, maintenance and improvement of its cellular telephone systems in an
effort to deliver high-quality service to its subscribers and to implement new
technologies as soon as economically practicable. Through its participation in
the North American Cellular Network ("NACN"), the Company is able to offer
ten-digit dialing access to its subscribers when they travel outside the
Company's service areas, providing them with convenient roaming access
throughout large areas of the United States, Canada, Mexico and Puerto Rico
served by other NACN participants. By marketing its products and services under
the CELLULARONE-Registered Trademark- name, the Company also enjoys the benefits
of association with a nationally recognized service mark.
PCC was organized in New York in 1979 and began active operations in 1981.
Its principal executive offices are located at 45 Rockefeller Plaza, New York,
New York 10020, and its telephone number is (212) 757-5600.
1
<PAGE>
THE OFFERING
The following summary description of the Warrants is qualified in its
entirety by the more detailed information set forth under the caption
"Description of the Warrants" contained elsewhere in this Prospectus.
<TABLE>
<S> <C>
Securities Offered........................... 527,696 Warrants, which, when exercised at
the current ratio, would entitle the holders
thereof to purchase, in the aggregate,
1,030,656 shares of Common Stock issuable
upon the exercise of such warrants.
Warrants Outstanding......................... 527,696
Common Stock Outstanding..................... As of March 31, 1998, 8,909,686 shares of
Common Stock were outstanding. On April 30,
1998, the Company declared a five for four
stock split.
Use of Proceeds.............................. There will be no proceeds to the Company from
the sale of the Warrants or the Warrant
Shares by the Selling Security Holders. Upon
the exercise of the Warrants, the Company
will receive $0.01 per common share, which
will not cover the related registration
expenses. See "Use of Proceeds."
Expiration of the Warrants................... August 1, 2007 (the "Expiration Date").
Exercise..................................... The Warrants will be exercisable at a price
of $0.01 per share of Common Stock or in a
cashless exercise in exchange for Warrants
with a value equal to the exercise price of
the Warrants to be exercised. See
"Description of the Warrants."
Antidilution................................. The number of shares of Common Stock for
which, and the price per share at which, a
Warrant is exercisable are subject to
adjustment upon the occurrence of certain
events described in the warrant agreement
(the "Warrant Agreement"), dated August 7,
1997, by and between PCC and Bank of Montreal
Trust Company, as warrant agent (the "Warrant
Agent").
</TABLE>
For additional information concerning the Warrants, see "Description of the
Warrants."
RISK FACTORS
See "Risk Factors" for certain factors relating to an investment in the
Warrants that should be considered by prospective investors.
2
<PAGE>
RISK FACTORS
An investment in the Warrants and the Warrant Shares offered hereby involves
a high degree of risk. The following risk factors, together with the other
information included or incorporated by reference in this Prospectus should be
considered when evaluating an investment in the Company.
LEVERAGE, LIQUIDITY AND ABILITY TO MEET REQUIRED DEBT SERVICE
On a pro forma basis, after giving effect to the Holdings Offering (as
defined below) and the PCW Offering (as defined below), in each case, including
the application of the net proceeds therefrom, and the Acquisition (as defined
below) and related financing, the Company's ratio of EBITDA to cash interest
expense would have been 0.94 to 1.00 for the year ended December 31, 1997 and
1.09 to 1.00 for the three months ended March 31, 1998. The Company's high
degree of leverage could limit significantly its ability to make acquisitions,
withstand competitive pressures or adverse economic conditions, obtain necessary
financing or take advantage of business opportunities that may arise.
The Company used the net proceeds of the PCW Offering to retire the Credit
Facility (as defined below). Accordingly, the Company has no credit facility in
place and currently does not intend to enter into a new credit facility. In
addition, borrowings under a new credit facility may be subject to significant
conditions, including compliance with certain financial ratios and the absence
of any material adverse change. In addition, the Company intends to pursue
opportunities to acquire additional cellular telephone systems which, if
successful, will require the Company to issue or obtain additional equity or
debt financing to fund such acquisitions. There can be no assurances as to the
availability or terms of any such financing or that the terms of the PIK Notes
(as defined below), the PCW Notes or any credit facility will not restrict or
prohibit any such debt financing.
The Company's ability to meet its debt service requirements, including those
represented by the Notes, will require significant and sustained growth in the
Company's cash flow. In addition, the Company expects to fund its growth
strategy from cash from operations. There can be no assurance that the Company
will be successful in improving its cash flow by a sufficient magnitude or in a
timely manner or in raising additional equity or debt financing to enable the
Company to meet its debt service requirements or to sustain its growth strategy.
There can be no assurances that the Company would be successful in procuring any
such financing.
LIMITATIONS ON ACCESS TO CASH FLOW OF SUBSIDIARIES.
The Company does not have, and may not in the future have, any assets other
than the common stock of its subsidiaries. The Credit Facility and other
financing instruments to which the Company and its subsidiaries are or may in
the future be a party impose, and in the future may impose, substantial
restrictions on the ability of the Company's subsidiaries to pay dividends to
the Company. Any payment of dividends to the Company is subject to the
satisfaction of certain financial conditions set forth in the Credit Facility
and other financing documents as well as restrictions under applicable state
corporation law. The Company has not in the past paid any dividends to its
common shareholders, and does not expect to pay any dividends to common
shareholders in the foreseeable future. The ability of the Company and its
subsidiaries to comply with the conditions of its financial obligations may be
affected by events that are beyond the control of the Company. The breach of any
such conditions could result in a default under the Credit Facility and/or other
financing agreements and in the event of any such default, the lenders under the
Credit Facility or the holders of certain other indebtedness could elect to
accelerate the maturity of the loans under such facility or such other
indebtedness. In the event of such acceleration, all such outstanding debt would
be required to be paid in full before any cash could be distributed to the
Company. There can be no assurance that the assets of the Company and its
subsidiaries would be sufficient to repay all outstanding indebtedness or meet
other financial obligations.
3
<PAGE>
NET LOSSES
On a pro forma basis after giving effect to the Holdings Offering and the
PCW Offering, in each case, including the application of the net proceeds
therefrom, and the Acquisition and related financing, the Company would have
incurred accounting net losses of approximately $44.4 million for the year ended
December 31, 1997 and $10.0 million for the three months ended March 31, 1998.
There can be no assurance that the Company's future operations will generate
sufficient cash flow to pay its obligations. The Company expects to incur
accounting net losses for several years.
COMPETITION
Although current policies of the FCC authorize only two licensees to operate
cellular telephone systems in each cellular market, there is, and the Company
expects there will continue to be, competition from various wireless technology
licensees authorized to serve each market in which the Company operates, as well
as from resellers of cellular service. Competition for subscribers between the
two cellular licensees in each market is based principally upon the services and
enhancements offered, the technical quality of the cellular telephone system,
customer service, system coverage and capacity and price. The Company competes
with a wireline licensee in each of its cellular markets, some of which are
larger and have access to more substantial capital resources than the Company.
The Company also faces competition from other existing communications
technologies such as conventional mobile telephone service, specialized mobile
radio ("SMR") and enhanced specialized mobile radio ("ESMR") systems, paging
services and, to a limited extent, satellite systems for mobile communications.
ESMR is a digital transmission system providing for "cellular-like"
communications service. The Company also faces limited competition from and may
in the future face increased competition from PCS. Broadband PCS involves a
network of small, low-powered transceivers placed throughout a neighborhood,
business complex, community or metropolitan area to provide customers with
mobile and portable voice and data communications. PCS may be capable of
offering, and PCS operators claim to offer additional services not offered by
cellular providers. PCS subscribers could have dedicated personal telephone
numbers and communicate using small digital radio handsets carried in a pocket
or purse. There can be no assurances that the Company will be able to provide
nor that it will choose to pursue, depending on the economics thereof, all such
services and features. The FCC has also completed or announced plans for
auctions in wireless services such as narrowband PCS, local multipoint
multichannel distribution service ("LMDS"), interactive video distribution
service ("IVDS"), wireless communications service ("WCS") and general wireless
communications service ("GWCS") spectrum. Some of this spectrum might be used
for services competitive in some manner with cellular service. The Company
cannot predict the effect of these proceedings and auctions on the Company's
business. However, the Company currently believes that traditional tested
cellular is economically proven unlike many of these other technologies and
therefore does not intend to pursue such other technologies.
Although the Company believes that the technology, financing and engineering
of these other technologies is not as advanced as their publicity would suggest,
there can be no assurance that one or more of the technologies currently
utilized by the Company in its business will not become obsolete at some time in
the future.
The Company also faces competition from "resellers." The FCC requires all
cellular licensees to provide service to resellers. A reseller provides wireless
service to customers but does not hold an FCC license or own facilities.
Instead, the reseller buys blocks of wireless telephone numbers and capacity
from a licensed carrier and resells service through its own distribution network
to the public.
POTENTIAL FOR REGULATORY CHANGES AND NEED FOR REGULATORY APPROVALS
The licensing, construction, operation, acquisition, assignment and transfer
of cellular telephone systems, as well as the number of licensees permitted in
each market, are regulated by the FCC. Changes
4
<PAGE>
in the regulation of cellular activities could have a material adverse effect on
the Company's operations. In addition, all cellular licenses in the United
States are granted for an initial term of up to 10 years and are subject to
renewal. The Company's cellular licenses expire in the following years with
respect to the following number of service areas: 1998 (three); 2000 (two); 2001
(four); 2002 (two); 2006 (one); and 2007 (four). While the Company believes that
each of these licenses will be renewed based upon FCC rules establishing a
renewal expectancy in favor of licensees that have complied with their
regulatory obligations during the relevant license period, there can be no
assurance that all of the Company's licenses will be renewed in due course. In
the event that a license is not renewed, the Company would no longer have the
right to operate in the relevant service area. The non-renewal of licenses could
have a material adverse effect on the Company's results of operations.
FLUCTUATIONS IN MARKET VALUE OF LICENSES
A substantial portion of the Company's assets consists of its interests in
cellular licenses. The assignment of interests in such licenses is subject to
prior FCC approval and may also be subject to contractual restrictions, future
competition and the relative supply and demand for radio spectrum. The future
value of the Company's interests in its cellular licenses will depend
significantly upon the success of the Company's business. While there is a
current market for the Company's licenses, such a market may not exist in the
future or the values obtainable may be significantly lower than at present. As a
consequence, in the event of the liquidation or sale of the Company's assets,
there can be no assurance that the proceeds would be sufficient to pay the
Company's obligations, and a significant reduction in the value of the licenses
could require a charge to the Company's results of operations.
RELIANCE ON USE OF THIRD-PARTY SERVICE MARK
The Company currently uses the registered service mark
CELLULARONE-Registered Trademark- to market its services. The Company's use of
this service mark is, and has historically been, governed by separate five-year
contracts between the Company and Cellular One Group, the owner of the service
mark, for each of the markets in which the Company operates. Such contracts
currently in effect expire at different times, ranging from April 18, 1999 to
June 9, 2003. If for some reason beyond the Company's control, the name
CELLULARONE-Registered Trademark- were to suffer diminished marketing appeal,
the Company's ability both to attract new subscribers and retain existing
subscribers could be materially affected. AT&T Wireless Services, Inc., which
has been the single largest user of the CELLULARONE-Registered Trademark-
service mark, has significantly reduced its use of the service mark as a primary
service mark, as has Centennial Cellular. There can be no assurance that such
reduction in use by any of such parties will not have an adverse effect on the
marketing appeal of the brand name.
DEPENDENCE ON KEY PERSONNEL
The Company's affairs are managed by a small number of key management and
operating personnel, the loss of whom could have an adverse impact on the
Company. The success of the Company's operations and expansion strategy depends
on its ability to retain and to expand its staff of qualified personnel in the
future.
RADIO FREQUENCY EMISSION CONCERNS
Media reports have suggested that certain radio frequency ("RF") emissions
from portable cellular telephones may be linked to certain types of cancer. In
addition, recently a limited number of lawsuits have been brought, not involving
the Company, alleging a connection between cellular telephone use and certain
types of cancer. Concerns over RF emissions and interference may have the effect
of discouraging the use of cellular telephones, which could have an adverse
effect upon the Company's business. As required by the Telecom Act, in August
1996, the FCC adopted new guidelines and methods for evaluating RF emissions
from radio equipment, including cellular telephones. While the new guidelines
impose more
5
<PAGE>
restrictive standards on RF emissions from low power devices such as portable
cellular telephones, the Company believes that all cellular telephones currently
marketed and in use comply with the new standards.
The Company carries $4.0 million in general liability insurance and $25.0
million in umbrella liability coverage. This insurance would cover (subject to
coverage limits) any liability suits with respect to human exposure to radio
frequency emissions.
FRAUDULENT CONVEYANCE STATUTES
Various laws enacted for the protection of creditors may apply to the
Company's incurrence of indebtedness and other obligations in connection with
the Acquisition, including the issuance of the PIK Notes. If a court were to
find in a lawsuit by an unpaid creditor or representative of creditors of the
Company that the Company did not receive fair consideration or reasonably
equivalent value for incurring such indebtedness or obligation and, at the time
of such incurrence, the Company (i) was insolvent; (ii) was rendered insolvent
by reason of such incurrence; (iii) was engaged in a business or transaction for
which the assets remaining in the Company constituted unreasonably small
capital; or (iv) intended to incur or believed it would incur obligations beyond
its ability to pay such obligations as they mature, such court, subject to
applicable statutes of limitation, could determine to invalidate, in whole or in
part, such indebtedness and obligations as fraudulent conveyances or subordinate
such indebtedness and obligations to existing or future creditors of the
Company.
The measure of insolvency for purposes of the foregoing will vary depending
on the law of the jurisdiction which is being applied. Generally, however, the
Company would be considered insolvent at a particular time if the sum of its
debts was then greater than all of its property at a fair valuation or if the
present fair saleable value of its assets was then less than the amount that
would be required to pay its probable liabilities on its existing debts as they
became absolute and matured. On the basis of its historical financial
information, its recent operating history as discussed in "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
other factors, the Company's management believes that, after giving effect to
indebtedness incurred in connection with the Offering, the Company will not be
rendered insolvent, it will have sufficient capital for the businesses in which
it was not engaged and it will be able to pay its debts as they mature; however,
management has not obtained any independent opinion regarding such issues. There
can be no assurance as to what standard a court would apply in making such
determinations.
EQUIPMENT FAILURE; NATURAL DISASTER
Although the Company carries "business interruption" insurance, a major
equipment failure or a natural disaster affecting any one of the Company's
central switching offices or certain of its cell sites could have a significant
adverse effect on the Company's operations.
YEAR 2000
The Company and its consultants have reviewed the possible effect of the
Year 2000 on the computer systems currently in use, including the software that
is an integral part of the Company's switches and the related billing
information. Preliminary estimates indicate that the costs for Year 2000
compliance will be less than $2 million; however, the Company is unable to
predict whether its third-party billing provider or its principal sources of
puchased or leased cellular equipment have made sufficient modifications to
address the potential problems of the Year 2000 software shortcomings on their
computer systems. Any additional costs of this nature, to the extent they are
passed on to the Company or affect or delay the Company's business, bill
collection or cellular equipment installation, could have a material adverse
effect upon the Company's business or results of operations.
6
<PAGE>
POTENTIAL ANTITAKEOVER EFFECT OF CLASS A PREFERRED STOCK.
Although the Board of Directors and Compensation Committee of the Company
believe that the provisions of the Company's Series A Preferred Stock provide
the Company's President and Chief Executive Officer with incentive to maximize
shareholder value by providing such officer with significant profit upon the
consummation of various business combination transactions providing the holders
of the Common Stock with a payment per share (or upon the Common Stock trading
at such prices for certain periods) significantly in excess of the market price
of the Company's Common Stock at the time such Preferred Stock was issued, the
Series A Preferred Stock may be viewed as having the potential effect of
discouraging a bidder's proposal to acquire control of or merge with the Company
in that such Preferred Stock would increase the cost to a bidder of certain of
such transactions.
USE OF PROCEEDS
There will be no proceeds to the Company form the sale of the Warrants or
the Warrant Shares by the Selling Security Holders. Upon the exercise of the
Warrants, the Company will receive $0.01 per warrant exercised, which will not
cover related registration expenses.
RECENT DEVELOPMENTS
In June 1998, PCW issued to certain initial purchasers $525.0 million
aggregate principal amount of 9 1/8% Senior Secured Notes due 2006 (the "Secured
Notes") in an offering exempt from the Securities Act pursuant to Rule 144A and
Regulation S (the "PCW Offering"). The impact of the issurance of the Secured
Notes on PCC's consolidated financial position is reflected in the pro forma
financial statements included elsewhere in this Prospectus. See "Unaudited Pro
Forma Condensed Consolidated Financial Statements."
The Secured Notes are guaranteed (the "Guarantees") by certain of PCW's
subsidiaries (the "Guarantors") and the Secured Notes and the Guarantees are
secured by a first priority lien, subject to certain permitted liens, on (a) the
capital stock of certain subsidiaries and certain other assets of PCW and such
subsidiaries as can be perfected by the filing of a UCC-1 financing statement
with filing offices in the relevant jurisdictions and (b) certain cash
collateral and eligible investments from time to time pledged by PCW or the
Guarantors. There is no sinking fund with respect to the Secured Notes. The
Secured Notes will rank (i) senior in right of payment to all subordinated
indebtedness of PCW and (ii) effectively senior in right of payment to all
unsecured indebtedness of PCW to the extent of the value of the collateral
available for the payment of the Secured Notes. The PCW Offering has not been
registered under the Securities Act. However, PCW is under an obligation to use
its best efforts to cause a registration statement to be declared effective with
respect to an offer to exchange the Secured Notes within 150 days of the
original issuance of the Secured Notes. If such registration statement has not
been declared effective within such 150-day period, or PCW has not consummated
the exchange offer within 180 days after the original issuance of the Secured
Notes, then in such case, PCW will be required to pay liquidated damages to the
holders of the Secured Notes.
The proceeds of the PCW Offering were applied to retire all the outstanding
indebtedness under the PCW's Credit Facility.
In July 1998, Price Communications Cellular Holdings, Inc. ("Holdings"), a
subsidiary of PCC, issued $200.0 million aggregate principal amount of Senior
Exchangeable Payable-in-Kind Notes due 2008 (the "PIK Notes") in an offering
registered under the Securities Act (the "Holdings Offering"). The PIK Notes
will initially bear interest at a rate of 11 1/4% per annum. Such interest rate
will be permanently reduced by 0.50% once cash interest begins to accrue on the
PIK Notes. Cash interest will begin to accrue on the PIK Notes on February 15,
2003; provided that at any time prior to February 15, 2003, Holdings may make an
election on any interest payment date to commence the accrual of cash interest
from and after such interest payment date. The impact of the issuance of the PIK
Notes on PCC's consolidated financial
7
<PAGE>
position is reflected in the pro forma financial statements included elsewhere
in this Prospectus. See "Unaudited Pro Forma Condensed Consolidated Financial
Statements."
The PIK Notes rank senior to all subordinated indebtedness of Holdings. In
the event that the daily high price of PCC Common Stock equals or exceeds 115%
of the exchange price (initially $40) for ten out of 15 consecutive trading
days, then each outstanding $1,000 aggregate principal amount of PIK Notes will
be mandatorily exchanged into 25 shares of PCC Common Stock, subject to
adjustment for certain events.
The proceeds of the Holdings Offering will be used by Holdings to redeem all
of the outstanding 13 1/2% Senior Secured Discount Notes due 2007 (the "13 1/2%
Holdings Notes") and for general corporate purposes.
8
<PAGE>
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma condensed consolidated balance sheet of
PCC as of March 31, 1998 gives effect to the Holdings Offering and the PCW
Offering as if the Offerings had occurred on such date. The unaudited pro forma
condensed consolidated statements of operations for the year ended December 31,
1997 and the three month period ended March 31, 1998 of PCC give effect to the
following transactions as if they occurred at the beginning of the relevant
period:
(i) The Acquisition of Palmer. On October 6, 1997, Holdings acquired
Palmer, with Palmer as the surviving corporation (the "Acquisition").
Pursuant to the merger agreement, PCC acquired each issued and outstanding
share of common stock of Palmer for a purchase price of $17.50 per share in
cash and purchased outstanding options and rights under employee and
director stock purchase plans for an aggregate price of $486.4 million. In
addition, the Holdings assumed the palmer existing indebtedness. As a
result, the aggregate purchase price was approximately $880.0 million. The
Acquisition was recorded pursuant to the purchase method of accounting. The
excess of cost over the fair value of Palmer's assets and liabilities has
been allocated to the FCC licenses. Certain of the acquired assets related
to the Fort Myers and Georgia operations were sold pursuant to the Fort
Myers and Georgia-1 Sales. These assets have been assigned values based on
the net proceeds from such sales.
(ii) The Fort Myers Sale (the proceeds of which were used to pay a
portion of the palmer existing indebtedness). On October 6, the Fort Myers
Sale was consummated and generated proceeds of approximately $166.0 million.
(iii) The Georgia-1 Sale. On December 30, 1997, the Company sold
substantially all of the assets used or useful in the operation of the
non-wireline cellular telephone system serving Georgia-1. A portion of the
$25.0 million in proceeds was used to retire a portion of the debt used to
fund the acquisition of Palmer.
(iv) The following transactions represent the proceeds raised for the
acquisition of Palmer:
1. The issuance and sale by PCW of 11 3/4% Senior Subordinated Notes
due 2007.
2. The financing of PCW under a credit facility, which provides for
term loan borrowings in the aggregate principal amount of $325.0 million
and revolving loan borrowings of $200.0 million (the "Credit Facility").
On October 6, 1997, PCW borrowed all term loans available thereunder and
approximately $120.0 million of revolving loans. In June 1998, PCW used
the net proceeds of the PCW Offering to retire amounts outstanding under
the Credit Facility.
3. The issuance and sale by Holdings of 153,400 Units. The Units
consisted of $153.4 million in aggregate principal amount at maturity of
the 13 1/2% Holdings Notes, together with Warrants to purchase 1,030,656
shares of PCC Common Stock.
4. The PCC equity contribution, a $44.0 million contribution from
PCC in the form of cash and common stock of Palmer, was contributed by
PCC to fund a portion of the acquisition of Palmer.
(v) The sale of the Secured Notes in the PCW Offering, at an interest
rate of 9 1/8%, including application of approximately $426.6 million of the
net proceeds to retire the outstanding indebtedness under the Credit
Facility, including accrued interest, which amounts were outstanding as of
March 31, 1998.
(vi) The sale of the PIK Notes in the Holdings Offering, at an interest
rate of 11 1/4%.
(vii) The repayment of the 13 1/2% Holdings Notes.
9
<PAGE>
The unaudited pro forma condensed consolidated financial statements have
been prepared by management of PCC. The unaudited pro forma data is not designed
to represent and does not represent what the results of operations or financial
position of PCC would have been had the above transactions been completed on or
as of the dates assumed, and are not intended to project results of operations
of PCC for any future period or as of any future date. The unaudited pro forma
condensed consolidated financial statements should be read in conjunction with
the audited and unaudited consolidated financial statements and notes of PCC,
incorporated by reference in this Prospectus.
10
<PAGE>
PRICE COMMUNICATIONS CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
MARCH 31, 1998
(IN THOUSANDS)
<TABLE>
<CAPTION>
PRO FORMA
PRO FORMA ADJUSTMENTS FOR
ADJUSTMENTS FOR THE HOLDINGS PRO FORMA
PCC PCW OFFERING OFFERING PCC
------------ --------------- -------------------- ------------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents...................... $ 8,629 $ 81,421(a) $ 94,201(g) $ 184,251
Accounts receivable, net....................... 18,478 18,478
Investment Securities:
Available-for-sale securities.................. 33,512 33,512
Inventory...................................... 2,005 2,005
Deferred income taxes.......................... 4,807 4,807
Prepaid expenses and other current assets...... 2,234 2,234
------------ --------------- -------- ------------
Total current assets........................... 69,665 81,421 94,201 245,287
Property, plant and equipment, net............. 147,112 147,112
Cellular licenses, net......................... 911,923 911,923
Other intangible assets (net) and other
assets....................................... 23,866 4,802(b) (401)(i) 28,267
------------ --------------- -------- ------------
Total assets................................... $ 1,152,566 $ 86,223 $ 93,800 $ 1,332,589
------------ --------------- -------- ------------
------------ --------------- -------- ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses.......... $ 40,238 $ (679)(d) $ 39,559
Current portion of long-term debt.............. 2,250 (2,250)(c) --
Other current liabilities...................... 4,578 4,578
------------ --------------- -------- ------------
Total current liabilities...................... 47,066 (2,929) 44,137
Long-term debt................................. 681,624 101,350(e) 117,026(j) 900,000
Accrued income taxes long-term................. 48,571 48,571
Deferred taxes (1)............................. 306,359 306,359
Other long-term liabilities.................... 7,812 7,812
------------ --------------- -------- ------------
Total liabilities.............................. 1,091,432 98,421 117,026 1,306,879
Redeemable preferred stock..................... 35 35
Stockholders' equity........................... 61,099 (12,198)(f) (23,226)(l) 25,675
------------ --------------- -------- ------------
Total liabilities and stockholders' equity..... $ 1,152,566 $ 86,223 $ 93,800 $ 1,332,589
------------ --------------- -------- ------------
------------ --------------- -------- ------------
</TABLE>
- ------------------------
(l) This accounting line represents the future tax consequences, if any,
attributable to the currently reported differences between the financial
statement carrying amounts of existing assets and their tax bases. These
assets (largely intangibles) will be amortized by the Company and offset
against this deferred tax balance without any cash consequences. This amount
less the amortization would become due only if the assets are sold by the
Company in a taxable transaction.
11
<PAGE>
PRICE COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(IN THOUSANDS)
For purposes of determining the pro forma effect of the transactions
described above on the condensed consolidated balance sheet of PCC as of March
31, 1998, the following adjustments have been made:
<TABLE>
<S> <C> <C>
(A) CASH AND CASH EQUIVALENTS
Proceeds from the PCW 9 1/8% Senior Secured Notes due 2006................... $ 525,000
Cash used to pay estimated transaction fees and expenses..................... (17,000)
Cash used to pay accrued interest on Credit Facility......................... (679)
Cash used to retire outstanding indebtedness under the Credit Facility,
including current portion.................................................. (425,900)
---------
$ 81,421
---------
---------
(B) OTHER INTANGIBLE AND OTHER ASSETS, NET
Write-off of unamortized deferred finance fees related to Credit Facility.... $ (10,198)
Estimated fees and expenses related to the PCW Offering...................... 15,000
---------
$ 4,802
---------
---------
(C) CURRENT PORTION OF LONG-TERM DEBT
Payment of current portion of long-term debt from proceeds of the PCW
Offering................................................................... $ (2,250)
---------
---------
(D) OTHER CURRENT LIABILITIES
Payment of accrued interest on Credit Facility from proceeds of the PCW
Offering................................................................... $ (679)
---------
---------
(E) LONG-TERM DEBT
The PCW 9 1/8% Senior Secured Notes due 2006................................. $ 525,000
Repayment of Credit Facility................................................. (423,650)
---------
$ 101,350
---------
---------
(F) STOCKHOLDER'S EQUITY
Write-off of existing unamortized deferred financing fees related to the
Credit Facility............................................................ $ (10,198)
Expenses related to cancellation of interest swap and cap contracts.......... (2,000)
---------
$ (12,198)
---------
---------
(G) CASH AND CASH EQUIVALENTS
Proceeds from Senior Exchangeable PIK Notes due 2008......................... $ 200,000
Repayment of 13 1/2% Holdings Notes as of March 31, 1998..................... (82,974)
Cash used to pay 20% premium on redemption of 13 1/2% Holdings Notes. The
premium is based upon the accreted value of the 13 1/2% Holdings Notes at
August 1, 1998 (approximately $91.0 million), the earliest date permitted
for redemption............................................................. (18,200)
Cash used to pay estimated transaction fees and expenses..................... (4,625)
---------
$ 94,201
---------
---------
(H) OTHER INTANGIBLE ASSETS, NET - HOLDINGS
Estimated fees and expenses in connection with the offering.................. $ 4,625
Write-off of existing unamortized deferred financing fees related to the
13 1/2% Holdings Notes..................................................... (2,276)
---------
$ 2,349
---------
---------
(I) OTHER INTANGIBLE ASSETS, NET - PCC
</TABLE>
12
<PAGE>
PRICE COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(IN THOUSANDS)
<TABLE>
<S> <C> <C>
Write-off of existing unamortized deferred financing fees related to the
13 1/2% Holdings Notes on books of PCC..................................... $ (2,750)
Holdings' Other Intangible Assets (Note h)................................... 2,349
---------
$ (401)
---------
---------
(J) LONG-TERM DEBT
Senior Exchangeable PIK Notes due 2008....................................... $ 200,000
Repayment of 13 1/2% Holdings Notes.......................................... (82,974)
---------
$ 117,026
---------
---------
(K) STOCKHOLDER'S EQUITY - HOLDINGS
Write-off of existing unamortized deferred financing fees related to the
13 1/2% Holdings Notes..................................................... $ (2,276)
20% premium on redemption of 13 1/2% Holdings Notes (based upon accreted
value as of August 1, 1998)................................................ (18,200)
---------
$ (20,476)
---------
---------
(L) STOCKHOLDERS' EQUITY - PCC
Write-off of existing unamortized deferred financing fees related to the
13 1/2% Holdings Notes on books of PCC..................................... $ (2,750)
Holdings' stockholder's equity (Note k)...................................... (20,476)
---------
$ (23,226)
---------
---------
</TABLE>
13
<PAGE>
PRICE COMMUNICATIONS CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
(IN THOUSANDS)
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
ADJUSTMENTS ADJUSTMENTS
FOR THE FOR THE
FORT MYERS ACQUISITION
FORT MYERS SALE AND AND THE
SALE AND GEORGIA-1 RELATED PALMER AS
PALMER(1) GEORGIA-1 SALE(2) SALE FINANCING ADJUSTED
--------- ----------------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Revenues........................... $141,736 $23,980 $ $ $117,756
Cost and expenses:
Cost of cellular service/operating
expenses......................... 23,301 4,395 18,906
Cost of equipment.................. 16,112 3,102 13,010
Selling, general and
administrative................... 41,014 5,836 2,440(a) 37,618
Depreciation and amortization...... 25,498 2,521 8,930(c) 31,907
--------- ------- ----------- ------------ -----------
Operating income (loss)............ 35,811 8,126 (2,440) (8,930) 16,315
Other income (expense):
Interest income (expense) (net).... (24,467) 332 (23,375)(d) (48,174)
Other, net......................... 208 1 207
--------- ------- ----------- ------------ -----------
Total other income (expense)....... (24,259) 333 (23,375) (47,967)
Minority interest share of
income........................... (1,310) (1,310)
--------- ------- ----------- ------------ -----------
Income (loss) before income tax
expense.......................... 10,242 8,459 (2,440) (32,305) (32,962)
Income tax expense (benefit)(4).... 4,153 3,430 (988) (b) (11,958)(e) (12,223)
--------- ------- ----------- ------------ -----------
Net income (loss).................. $ 6,089 $ 5,029 $(1,452) $(20,347) $(20,739)
--------- ------- ----------- ------------ -----------
--------- ------- ----------- ------------ -----------
Per share data:
Basic and diluted (loss) earnings
per share........................
Weighted average shares
outstanding......................
Deficiency of earnings to fixed
charges..........................
<CAPTION>
PRO FORMA PRO FORMA
ADJUSTMENT ADJUSTMENT
FOR THE FOR THE
PCW HOLDINGS PRO FORMA
PCC(3) OFFERING OFFERING PCC
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Revenues........................... $ 43,713 $ $ $ 161,469
Cost and expenses:
Cost of cellular service/operating
expenses......................... 5,978 24,884
Cost of equipment.................. 5,259 18,269
Selling, general and
administrative................... 16,750 54,368
Depreciation and amortization...... 11,107 43,014
---------- ---------- ---------- ----------
Operating income (loss)............ 4,619 20,934
Other income (expense):
Interest income (expense) (net).... (20,063) (12,341)(f) (11,304)(h) (91,882 )
Other, net......................... 1400 -- 1,607
---------- ---------- ---------- ----------
Total other income (expense)....... (18,663) (12,341) (11,304) (90,275 )
Minority interest share of
income........................... (414) -- (1,724 )
---------- ---------- ---------- ----------
Income (loss) before income tax
expense.......................... (14,458) (12,341) (11,304) (71,065 )
Income tax expense (benefit)(4).... (5,509) (4,653)(i) (4,262)(i) (26,647 )
---------- ---------- ---------- ----------
Net income (loss).................. $ (8,949) $ (7,688) $ (7,042) $ (44,418 )
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Per share data:
Basic and diluted (loss) earnings
per share........................ $ (.91) $ (4.53 )
---------- ----------
---------- ----------
Weighted average shares
outstanding...................... 9,812,905 9,812,905
---------- ----------
---------- ----------
Deficiency of earnings to fixed
charges.......................... $ (44,418 )
----------
----------
</TABLE>
- ------------------------
(1) Includes the results and operations of Palmer for the nine months ended
September 30, 1997. The Company purchased Palmer on October 6, 1997.
(2) Represents the elimination of the operating results of the Fort Myers and
Georgia-1 operations for the nine months ended September 30, 1997. These
operations were sold in the fourth quarter of 1997. The amounts are net of
the operating results for one month of the GA-13 RSA operations acquired by
Palmer on January 31, 1997.
(3) Includes the results of operations after the Acquisition (the period October
1, 1997 through December 31, 1997).
(4) Calculated using an effective tax rate of approximately 38%.
14
<PAGE>
PRICE COMMUNICATIONS CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1998
(IN THOUSANDS)
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
ADJUSTMENT ADJUSTMENT
FOR THE FOR THE
PCW HOLDINGS PRO FORMA
PCC OFFERING OFFERING PCC
---------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues................................................. $ 43,275 $ $ $ 43,275
Cost and expenses:
Cost of cellular service/operating expenses.............. 6,751 6,751
Cost of equipment........................................ 5,496 5,496
Selling, general and administrative...................... 12,341 12,341
Depreciation and amortization............................ 12,017 12,017
---------- ----------- ----------- -----------
Operating income (loss).................................. 6,670 6,670
Other income (expense):
Interest expense (net)................................... (17,254) (2,331)(f) (2,739)(h) (22,324)
Other, net............................................... 183 -- 183
---------- ----------- ----------- -----------
Total other income (expense)............................. (17,071) (2,331) (2,739) (22,141)
Minority interest share of income........................ (460) -- (460)
---------- ----------- ----------- -----------
Income (loss) before income tax expense.................. (10,861) (2,331) (2,739) (15,931)
Income tax expense (benefit)............................. (4,016) (856)(g) (1,034)(i) (5,906)
---------- ----------- ----------- -----------
Net income (loss)........................................ $ (6,845) $ (1,475) $ (1,705) $ (10,025)
---------- ----------- ----------- -----------
---------- ----------- ----------- -----------
Per Share Data
Basic and diluted earnings (loss) per share............ $ (0.63) $ (0.92)
Weighted average shares outstanding.................... 10,950,869 10,950,869
Deficiency of earnings to fixed charges.................. $ (10,025)
-----------
-----------
</TABLE>
15
<PAGE>
PRICE COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS)
For purposes of determining the pro forma effect of the transactions
described above on the condensed consolidated statements of operations of PCC
for the three months ended March 31, 1998 and the year ended December 31, 1997,
the following adjustments have been made:
<TABLE>
<CAPTION>
FOR THE
PERIOD
ENDED FOR THE YEAR
MARCH 31, ENDED
1998 DECEMBER 31, 1997
------------- -----------------
<S> <C> <C> <C>
(a) SELLING, GENERAL AND ADMINISTRATIVE
Represents a portion of the operating expenses charged to Fort Myers and
Georgia-1 operations by Palmer which might not be eliminated upon the
Fort Myers Sale and the Georgia-1 Sale................................. $ -- $ 2,440
------------- --------
------------- --------
(b) INCOME TAX BENEFIT
Represents the tax impact of the adjustment to selling general and
administrative expenses indicated above $ -- $ (988)
------------- --------
------------- --------
(c) DEPRECIATION AND AMORTIZATION
Represents the excess of the purchase price over the historical cost of
the assets acquired allocated to FCC licenses and amortized over 40
years for nine months.................................................. $ -- $ 8,930
------------- --------
------------- --------
(d) INTEREST EXPENSE, NET
Interest expense on $425 million of Indebtedness under the Credit
Facility at an assumed interest rate of 8 1/2% per annum............... $ -- $ 36,125
Interest expense on $175 million of the 11 3/4% PCW Notes at an interest
rate of 11 3/4% per annum.............................................. -- 20,563
Interest expense on $80 million of the 13 1/2% Holdings Notes at an
interest rate of 13 1/2%............................................... -- 10,617
Interest expense related to the accretion of 13 1/2% Holdings Notes due
to Warrant value*...................................................... -- 579
Represents current amortization expense related to deferred debt
financing costs........................................................ -- 2,156
Elimination of previously recorded interest expense for Palmer (9
months)................................................................ -- (24,467)
Elimination of previously recorded interest expense for the Company
(3 months)............................................................. (22,198)
------------- --------
$ -- $ 23,375
------------- --------
------------- --------
(e) INCOME TAX EXPENSE (BENEFIT)
To record deferred tax benefit resulting from the amortization of the
acquired FCC licenses and the additional benefit arising from the pro
forma adjustments...................................................... $ -- $ (11,958)
------------- --------
------------- --------
(f) INTEREST EXPENSE, NET
To record interest for the PCW Offering at an interest rate of 9 1/8%.... $ 11,977 $ 47,906
Less interest previously reflected as pro forma adjustment related to the
Credit Facility........................................................ (9,786) (36,125)
------------- --------
Net adjustment related to the PCW Offering............................... 2,191 11,781
To record additional amortization of deferred financing costs associated
with the PCW Offering.................................................. 140 560
------------- --------
$ 2,331 $ 12,341
------------- --------
------------- --------
(g) INCOME TAX EXPENSE (BENEFIT)
To record tax benefit arising from the pro forma adjustments regarding
the PCW Offering....................................................... $ (856) $ (4,653)
------------- --------
------------- --------
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
FOR THE
PERIOD
ENDED FOR THE YEAR
MARCH 31, ENDED
1998 DECEMBER 31, 1997
------------- -----------------
(h) INTEREST EXPENSE, NET
<S> <C> <C> <C>
To record interest for the Holdings Offering............................. $ 5,625 $ 22,500
Less interest previously reflected as a pro forma adjustment related to
the 13 1/2% Holdings Notes including interest attributable to the
Warrant value.......................................................... -- (11,196)
Interest included in actual results related to the 13 1/2% Holdings Notes
including interest attributable to the warrant value................... (2,886) --
------------- --------
2,739 11,304
Difference in amortization of deferred financing charges between actual
amount and pro forma amount is not significant......................... -- --
------------- --------
$ 2,739 $ 11,304
------------- --------
------------- --------
(i) INCOME TAX EXPENSE (BENEFIT)
To record tax benefit arising from the pro forma adjustments regarding
the Offering........................................................... $ (1,034) $ (4,262)
------------- --------
------------- --------
</TABLE>
- ------------------------
* Represents the accretion over 10 years of the 13 1/2% Holdings Notes
resulting from the allocation of proceeds of that offering between the
13 1/2% Holdings Notes and the Warrants.
17
<PAGE>
DESCRIPTION OF THE WARRANTS
GENERAL
In the Original Offering, PCC issued an aggregate of 527,696 Warrants to the
purchasers of units, all of which are presently outstanding. The Warrants were
issued pursuant to a Warrant Agreement dated as of August 11, 1997 (the "Warrant
Agreement"), between PCC and Bank of Montreal Trust Company, as Warrant Agent
(the "Warrant Agent"). The Warrants are subject to all the terms in the Warrant
Agreement and holders of Warrants are referred to the Warrant Agreement, a copy
of which is filed as an exhibit to the Registration Statement of which this
Prospectus is a part, for a complete statement of such terms. The following
description of the Warrants does not purport to be complete and is qualified in
its entirety by the provisions of the Warrant Agreement. PCC, however, believes
that the following summarizes all material provisions of the Warrant Agreement.
Each Warrant entitles the registered owner thereof to purchase Common Stock
at a per share exercise price of $0.01, subject to adjustment as specified below
(the "Exercise Price"). The Warrants will expire at 5:00 p.m., New York City
time, on August 1, 2007. The number of shares of Common Stock for which each
Warrant will be exercisable shall be 1.953125 shares (representing, in the
aggregate for all holders of Warrants, approximately 9% of the common equity of
PCC on a fully diluted basis (including the Warrants) as of March 31, 1998 after
giving effect to such exercise).
Holders of Warrants are not entitled, by virtue of being such holders, to
any of the rights of holders of shares of Common Stock. The Warrants are not
subject to optional redemption.
EXERCISE OF WARRANTS
Warrants may be exercised by surrendering to the Warrant Agent a signed
Warrant certificate indicating the Warrant holder's election to exercise all or
a portion of the Warrants evidenced by such certificate. Surrendered Warrant
certificates must be accompanied by payment of the aggregate Exercise Price. The
Exercise Price will be payable at the holder's option by certified or cashier's
check payable to the order of PCC, or by any combination thereof. The Exercise
Price may be paid, without a payment in cash or check being required, for such
number of Warrant Shares equal to the product of (i) the number of Warrant
Shares for which such Warrant is exercisable as of the date of exercise (if the
Exercise Price were being paid in cash) and (ii) the Cashless Exercise Ratio.
The Cashless Exercise Ratio shall equal a fraction the numerator of which is the
Market Value (as defined in the Warrant Agreement) per share of Common Stock on
the date of exercise minus the Exercise Price per share as of the date of
exercise and the denominator of which is the Market Value per share on the date
of exercise.
PCC has reserved for issuance a number of shares of Common Stock sufficient
to provide for the exercise of the Warrants. When delivered, such shares will be
fully paid and nonassessable.
PCC will bear the cost of any documentary stamp tax payable in connection
with the issuance of shares of Common Stock upon the exercise of the Warrants,
but will not be responsible for the payment of any such taxes upon the issuance
of such shares to any person other than the registered holder of the Warrants so
exercised or upon the transfer of the Warrants.
PCC is not required to issue fractional shares upon the exercise of
Warrants. In lieu of any fractional share to which a holder would otherwise be
entitled upon exercise of any Warrant, PCC will pay to such holder an amount in
cash equal to the value of such fractional interests based upon the then current
market price of a full share of Common Stock.
Except as provided below, in the event that PCC consolidates with, merges
with or into, or sells all or substantially all of its property and assets to
another person (any such transaction, an "Extraordinary Transaction"), the
holders of the Warrants will have the right to receive upon exercise of the
Warrants such number of shares of capital stock or other securities or property
which such holder would have been
18
<PAGE>
entitled to receive upon or as a result of such Extraordinary Event had such
Warrant been exercised immediately prior to such event; provided, however, that
the corporate change described under the section "Business of Price
Communications Corporation" will not constitute an Extraordinary Transaction.
The Warrant Agreement will provide that the surviving or acquiring person (the
"Surviving Person") will enter into an agreement with the warrant agent
confirming the holders' rights under the Warrant Agreement and providing for
adjustments, which will be as nearly equivalent as may be practicable to the
adjustments provided for in the Warrant Agreement.
Notwithstanding the foregoing in the event of (i) an Extraordinary
Transaction where consideration to the holders of Common Stock in exchange for
their shares is payable solely in cash, or (ii) the dissolution, liquidation or
winding-up of PCC, then the holders of the Warrants will be entitled to receive
distributions on an equal basis with the holders of Common Stock or other
securities issuable upon exercise of the Warrants, as if the Warrants had been
exercised immediately prior to such event. The Surviving Person and, in the
event of any dissolution, liquidation or winding-up of PCC, PCC will deposit
promptly with the warrant agent the funds, if any, necessary to pay to the
holders of the Warrants the amounts to which they are entitled as described
above. After such funds and the surrendered Warrant Certificates are received,
the warrant agent will make payment to the holders of the Warrants by delivering
a check in such amount as is appropriate (or, in the case of consideration other
than cash, such other consideration as is appropriate) to such person as it may
be directed in writing by the holders surrendering such Warrants.
ANTI-DILUTION AND WARRANT PRICE ADJUSTMENTS
The number of shares of Common Stock purchasable upon the exercise of each
Warrant and the Exercise Price are subject to adjustment upon the occurrence of
certain events affecting the Common Stock, including, without limitation, (i)
payment of a dividend or the making of a distribution on the shares of Common
Stock which is paid or made in shares of Common Stock or other securities of PCC
or in certain rights to purchase Common Stock or other securities of PCC, (ii)
subdivision of the outstanding shares of Common Stock into a greater number of
shares, (iii) combination of the outstanding shares of Common Stock into a
smaller number of shares, (iv) issuance of certain rights or warrants to the
holders of the shares of Common Stock, entitling them to subscribe for or
purchase shares of Common Stock, or of securities convertible into or
exchangeable for Common Stock, at a price less than the current market price,
(v) reclassification of the shares of Common Stock, (vi) distribution to the
holders of the shares of Common Stock of evidences of indebtedness or assets
(excluding any dividend or distribution paid in cash out of retained earnings),
and (vii) extraordinary cash dividends on the Common Stock, subject to the
limitation that no adjustment in the number of shares acquirable upon exercise
of the Warrants will be required until cumulative adjustments require an
adjustment of at least 1% thereof. No adjustment will be made on account of any
dividend or interest reinvestment plan or any employee stock purchase plan
providing for the purchase of shares of Common Stock at a discount from market
price.
REGISTRATION RIGHTS
The Company is required under the terms of the Warrant Registration Rights
Agreement (the "Warrant Registration Rights Agreement") to file a shelf
registration statement under the Securities Act covering the issuance and resale
of the Warrant Shares and to use its reasonable efforts to cause such shelf
registration statement to be declared effective on or before the first
anniversary of the Issue Date and to remain effective until the earlier of (i)
such time as all Warrants have been exercised and (ii) the second anniversary of
the Issue Date.
The Company will, upon the filing of this Registration Statement, provided
to each holder of Warrants or Warrant Shares copies of the prospectus which is a
part of this Registration Statement, notify each such holder when this
Registration Statement has become effective and take certain other action as are
required to permit unrestricted sales of the Warrant Shares.
19
<PAGE>
Each holder of Warrants that sells such Warrants pursuant to this
Registration Statement generally will be required to be named as a selling
security holder in the related prospectus and to deliver a prospectus to the
purchaser, will be subject to certain of the civil liability provisions under
the Securities Act in connection with such sales and will be bound by certain
provisions of the Warrant Agreement which are applicable to such holder
(including certain indemnification obligations). In addition, each holder of
Warrants will be required to deliver information to be used in connection with
the Warrant Shelf Registration Statement in order to have its Warrants included
in the Warrant Shelf Registration Statement.
During any consecutive 365-day period, the Company shall be entitled to
suspend the availability of the shelf registration statement for up to 60
consecutive days (except for the 30 consecutive-day period immediately prior to
the Expiration Date) if the Board of Directors determines in the exercise of its
reasonable judgment that there is a valid business purpose for such suspension
and provides notice that such determination was made to the holders of the
Warrants. There can be no assurance that PCC will be able to file, cause to be
declared effective, or keep a registration statement continuously effective
until all of the Warrants have been exercised or have expired.
DESCRIPTION OF CAPITAL STOCK
GENERAL
The Notes are exchangeable for shares of PCC Common Stock. The authorized
capital stock of PCC consists of 60,000,000 shares of Common Stock, par value
$0.01 per share, of which 8,909,686 were outstanding as of March 31, 1998, and
held of record by holders other than PCC and 18,907,801 shares of preferred
stock (the "Preferred Stock"), par value $0.01 per share, issuable in series. As
of July 2, 1998 728,133 shares of Series A Preferred Stock were outstanding. The
following is a summary of certain of the rights and privileges pertaining to
Common Stock. For a full description of PCC's capital stock, reference is made
to PCC's Amended and Restated Certificate of Incorporation currently in effect,
a copy of which is on file with the Commission.
COMMON STOCK
VOTING RIGHTS
The holders of Common Stock are entitled to one vote per share at every
meeting of the shareholders of PCC. There is no provision for cumulative voting
with respect to the election of directors. Accordingly, the holders of more than
50% of the shares of Common Stock can, if they choose to do so, elect the Board
of Directors of PCC and determine most matters on which stockholders are
entitled to vote.
DIVIDEND RIGHTS
Subject to the preferential rights of holders of outstanding shares of
Preferred Stock, holders of Common Stock are entitled to share ratably in any
dividends that might be declared and paid by the Board of Directors of PCC out
of funds legally available therefor.
LIQUIDATION RIGHTS
In the event of any liquidation, dissolution or winding up of the affairs of
PCC, voluntary or involuntary, the holders of the shares of Common Stock are
entitled to share ratably in the net assets of PCC legally available for
distribution after payment of liabilities, subject to the rights of the holders
of outstanding shares of Preferred Stock. Holders of Common Stock have no
conversion, redemption or preemptive rights.
20
<PAGE>
PREFERRED STOCK
PCC's Amended and Restated Certificate of Incorporation provides that the
Board of Directors of PCC has the authority, without further action by the
holders of the outstanding Common Stock, to issue up to 18,907,801 shares of
Preferred Stock from time to time in one or more series, and to fix the terms of
any such series, including voting powers, designations, preferences and
relative, participating, optional or other special rights. The Board of
Directors of PCC has authorized the issuance of 728,133 shares of Series A
Preferred Stock and 364,066 shares of Series B Preferred Stock. Each share of
Series A and B Preferred Stock is entitled to receive 1% of the dividends and
liquidation distributions payable with respect to a share of Common Stock. Each
share of Series A Preferred Stock is entitled to one vote per share and each
share of Series B Preferred Stock is entitled to one vote per share.
Section 912 of the Business Corporation Law of the State of New York
PCC is a New York corporation and is subject to Section 912 of the Business
Corporation Law of the State of New York. Section 912 prohibits a company from
entering into a business combination (e.g., a merger, consolidation, sale of 10%
or more of a company's assets, or issuance of securities with an aggregate
market value of 5% or more of the aggregate market value of all of the company's
outstanding capital stock) with a beneficial owner of 20% or more of a company's
securities (a "20% shareholder") for a period of five years following the date
such beneficial owner became a 20% shareholder (the "stock acquisition date"),
unless, among other things, such business combination or the purchase of stock
resulting in the 20% shareholder's beneficial ownership was approved by the
company's board of directors prior to the stock acquisition date or the business
combination is approved by the affirmative vote of the holders of a majority of
the outstanding voting stock exclusive of the stock beneficially owned by the
20% shareholder. The applicability of this provision to PCC may discourage
unsolicited takeover bids by third parties.
PLAN OF DISTRIBUTION
The Warrants and the Warrant Shares may be sold from time to time to
purchasers directly by any of the Selling Security Holders or their pledges,
donees, transferees or other successors. Alternatively, the Selling Security
Holders may sell the Warrant Shares through agents, dealers or underwriters in
the over-the-counter market or on The Nasdaq Stock Market, or otherwise, on
terms and conditions and at prices determined at the time of sale by the Selling
Security Holders. Sales of the Warrants or Warrant Shares may also be made
pursuant to Rule 144A adopted under the Securities Act.
The Selling Security Holders and any agents, dealers or underwriters that
participate in the distribution of the Warrants or Warrant Shares may be deemed
to be underwriters, and any profit on the sale of other Warrants or Warrant
Shares by them and any discounts, commissions or concessions received by any
such agents, dealers or underwriters might be deemed to be underwriting
discounts and commissions under the Securities Act.
At the time a particular offer of Warrant Shares is made, to the extent
required, a prospectus supplement will be distributed which will set forth the
aggregate amount of the Warrants or Warrant Shares being offered and the terms
of the offering, including the name or names of any agents, dealers or
underwriters, any discounts and commissions and other items constituting
compensation from the Selling Security Holders and any discounts, commissions or
concessions allowed or reallowed or paid to dealers.
No underwriting arrangements exist as of the date of this Prospectus for
sales by any Selling Security Holders. There is currently no public trading
market for the Warrants and the Company does not anticipate that a public market
will develop.
21
<PAGE>
SELLING SECURITY HOLDERS
Certain Selling Security Holders may sell their Warrants and Warrant Shares
on a delayed or continuous basis. The Registration Statement has been filed
pursuant to Rule 415 under the Securities Act to afford holders of the Company's
outstanding warrants that were acquired in the Original Offering and the Common
Stock issuable upon the exercise of such Warrants the opportunity to sell such
securities in public transactions rather than pursuant to exemptions from the
registration and prospectus delivery requirements of Securities Act.
The holders listed below and the beneficial owners of Warrants and their
transferees, pledgees, donees and other successors, if not identified hereunder
then so identified in supplements to this Prospectus, are the Selling Security
Holders under this Prospectus. The information provided below was supplied by
the holders of the Warrants. Warrants held by the holders listed below are
registered under this Prospectus.
<TABLE>
<CAPTION>
SELLING SECURITY HOLDERS WARRANTS OWNED PERCENTAGE OWNED
- ---------------------------------------------------------- --------------- -------------------
<S> <C> <C>
IDS Life Special Income Fund.............................. 23,048 4.4%
IDS Life Income Advantage Fund............................ 4,472 0.8%
High Yield Portfolio...................................... 41,280 7.8%
Evergreen High Income Fund................................ 25,800 4.9%
</TABLE>
None of the foregoing Selling Security Holders has, or within the past three
years has had, any position or office with, been employed by or otherwise has
had a material relationship with the Company or any of its affiliates.
Because the Selling Security Holders may, pursuant to this Prospectus, offer
all or some portion of the Warrants or the Warrant Shares issuable upon exercise
of the Warrants, no estimate can be given as to the amount of the Warrants or
the Warrant Shares issuable upon exercise of the Warrants that will be held by
the Selling Security Holders upon termination of any such sales. In addition,
the Selling Security Holders identified above may have sold, transferred or
otherwise disposed of all or a portion of their Warrants, since the date of
which they provided the information regarding their Warrants, in transactions
exempt from the registration requirements of the Securities Act.
Only Selling Security Holders identified above who beneficially own the
Warrants set forth opposite each such Selling Security Holder's name in the
foregoing table on the effective date of the Registration Statement of which
this Prospectus forms a part may sell such Warrants pursuant to the Registration
Statement. Prior to any use of this Prospectus in connection with an offering of
the Warrants not identified above or of any of the Warrant Shares issuable upon
exercise of the Warrants, this Prospectus will be supplemented to set forth the
name and number of shares beneficially owned by the Selling Security Holder
intending to sell such Warrants and/or Warrant Shares and the number of Warrants
and/or Warrant Shares to be offered. The Prospectus Supplement will also
disclose whether any Selling Security Holder selling in connection with such
Prospectus Supplement has held any position or office with, been employed by or
otherwise has had a material relationship with, the Company or any of its
affiliates during the three years prior to the date of the Prospectus Supplement
if such information has not been disclosed herein.
LEGAL MATTERS
The validity of the Warrants and the Warrant Shares and certain matters
relating thereto will be passed on for the Company by Davis Polk & Wardwell, New
York, New York.
22
<PAGE>
EXPERTS
The consolidated financial statements and schedule of PCC, as of December
31, 1997 and 1996 incorporated by reference in this Prospectus and elsewhere in
the registration statement and the consolidated statements of operations,
stockholders' equity and cash flows of Palmer Wireless, Inc. for the nine months
ended September 30, 1997, incorporated by reference in this Prospectus and
elsewhere in the registration statement have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their report with respect
thereto, and are incorporated herein in reliance upon the authority of said firm
as experts in accounting and auditing in giving said reports.
The consolidated balance sheet of Palmer Wireless, Inc. and subsidiaries as
of December 31, 1996 and the consolidated statements of operations,
stockholders' equity and cash flows for each of the years in the two years ended
December 31, 1996, incorporated by reference herein, have been audited by KPMG
Peat Marwick LLP, independent auditors, as indicated in their report with
respect thereto, and are incorporated herein in reliance upon the authority of
said firm as experts in accounting and auditing in giving said reports.
23
<PAGE>
APPENDIX A
NOTICE OF TRANSFER
PURSUANT TO REGISTRATION STATEMENT
Price Communications Corporation
45 Rockefeller Center
New York, NY 10020
Attention: General Counsel
Re: Price Communications Corporation (the "Company") Warrants
Dear Sirs:
Please be advised that has transferred Warrants, (or
shares of Common Stock of the Company, issued in exchange for the
Warrants) pursuant to an effective Registration Statement on Form S-3 (File No.
333-52269) filed by the Company.
We hereby certify that the prospectus delivery requirements, if any, of the
Securities Act of 1933, as amended, have been satisfied and that the above-named
beneficial owner of the transferred securities is named as a "Selling Security
Holder" in the Prospectus dated May , 1998, or in supplements thereto, and
that the aggregate amount of the securities transferred are (or are included in)
the securities listed in such Prospectus opposite such owner's name.
<TABLE>
<S> <C> <C>
Dated: Very truly yours,
------------------------------------------------
Name:
------------------------------------------
By: (Authorized Signature)
</TABLE>
A-1
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL
OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH IT RELATES OR AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY CIRCUMSTANCES OR IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE
MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE
HAS NOT BEEN ANY CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR
THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
ITS DATE.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
Available Information........................... i
Incorporation of Certain Documents by
Reference..................................... i
Summary......................................... 1
Risk Factors.................................... 3
Use of Proceeds................................. 7
Recent Developments............................. 7
Unaudited Pro Forma Consolidated Financial
Statements.................................... 9
Description of Warrants......................... 18
Description of Capital Stock.................... 20
Plan of Distribution............................ 21
Selling Security Holders........................ 22
Legal Matters................................... 22
Experts......................................... 23
Annex A--Notice of Transfer Pursuant to
Registration Statement........................ A-1
</TABLE>
PRICE
COMMUNICATIONS
CORPORATION
WARRANTS
TO PURCHASE
1,030,656 SHARES
OF COMMON STOCK
AND
1,030,656 SHARES
OF COMMON STOCK
(ISSUABLE UPON THE EXERCISE
OF THE WARRANTS)
---------------------
PROSPECTUS
---------------------
JULY , 1998
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses in connection with the issuance and distribution of
the securities being registered, other than underwriting compensation, are:
<TABLE>
<S> <C>
SEC Registration Fee........................................... $ 3,838.55
Legal Fees and Expenses........................................ $50,000.00
Accounting Fees and Expenses................................... $20,000.00
Miscellaneous.................................................. $71,161.45
----------
Total.......................................................... $145,000.00
----------
----------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 721 of the New York Business Corporation Law provides that the
indemnification and advancement of expenses of directors and officers may be
provided by the certificate of incorporation or by-laws of a corporation, or
when authorized by the certificate of incorporation or by-laws, a resolution of
shareholders, a resolution of directors or an agreement providing for
indemnification (except in cases where a judgment or other final adjudication
establishes that such acts were committed in bad faith or were the result of
active or deliberate dishonesty and were material to the cause of action so
adjudicated or that he personally gained in fact a financial profit or other
advantage to which he was not legally entitled.
Section 722 of the New York Business Corporation Law provides that a
corporation may indemnify any person, made, or threatened to be made, a party of
an action or proceeding other than one by or in the right of the corporation to
procure a judgment in its favor, whether civil or criminal, including an action
by or in the right of any other corporation, partnership, joint venture, trust,
employee benefit plan or other entity which any director or officer of the
corporation served in any capacity at the request of the corporation, by reason
of the fact that he was a director or officer of the corporation, or served such
other corporation, partnership, joint venture, trust, employee benefit plan or
other entity in any other capacity, against judgments, fines, amounts paid in
settlement and reasonable expenses if such director or officer acted, in good
faith, for a purpose which he reasonably believed to be in, or in the case of
service for any other corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise, not opposed to, the best interests of the
corporation and, in criminal acts or proceedings, in addition, had no reasonable
cause to believe that his conduct was unlawful.
Section 722 of the New York Business Corporation Law also states that a
corporation may indemnify any person made, or threatened to be made, a party to
an action by or in the right of the corporation to procure a judgment in its
favor by reason of the fact that he is or was a director or officer of the
corporation or any other corporation, partnership, joint venture, trust,
employee benefit plan or other entity at the request of the corporation, against
amounts paid in settlement and reasonable expenses actually and necessarily
incurred by him in connection with the defense or settlement of such action, or
in connection with an appeal therein if such director or officer acted, in good
faith, for a purpose which he reasonably believed to be in, or in the case of
service for any other corporation, partnership, joint venture, employee benefit
plan or other entity, not opposed to, the best interests of the corporation,
except that no indemnification shall be made in respect to a threatened or
pending action which is settled or otherwise disposed of, or any claim, issue or
matter as to which such person shall have been adjudged to be liable to the
corporation, unless the court determines the person is fairly and reasonably
entitled to indemnity for such portion of the settlement amount and expenses as
the court deems proper.
II-1
<PAGE>
Section 726 of the New York Business Corporation Law provides that a
corporation shall have the power to purchase and maintain insurance for
indemnification of directors and officers. However, no insurance may provide for
any payment, other than cost of defense, to or on behalf of any director or
officer for a judgment or a final adjudication adverse to the insured director
or officer if (i) a judgment or other final adjudication establishes that his
acts of active and deliberate dishonesty were material to the cause of action
adjudicated or that he personally gained a financial profit or other advantage
to which he was not legally entitled or (ii) if prohibited under the insurance
law of New York.
Section 724 of the New York Business corporation Law provides that
indemnification shall be awarded by a court to the extent authorized under
Sections 722 and 723(a) of the New York Business Corporation Law notwithstanding
the failure of a corporation to provide indemnification, and despite any
contrary resolution of the board or of the shareholders.
The Certificate of Incorporation and By-laws of PCC exonerates directors of
PCC from personal liability to PCC or Holdings, as the case may be, and their
respective stockholders, for monetary damages for breach of the fiduciary duty
of care as a director, but it does not eliminate or limit liability for any
breach of the directors' duty of loyalty for acts or omissions not in good faith
or which involve intentional misconduct or knowing violations of law, for any
improper declaration of dividends or for any transaction from which the
directors derived an improper personal benefit. The Certificate of Incorporation
does not eliminate a stockholder's right to seek nonmonetary, equitable
remedies, such as an injunction or rescission, to redress an action taken by the
directors. However, as a practical matter, equitable remedies may not be
available in all situations, and there may be instances in which no effective
remedy is available.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits (see index to exhibits at E-1)
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes;
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high and of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered
II-2
<PAGE>
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to Section 13(a) of 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(c) The undersigned registrant hereby undertakes to deliver or cause to
be delivered with the prospectus, to each person to whom the prospectus is
sent or given, the latest annual report, to security holders that is
incorporated by reference in the prospectus and furnished pursuant to and
meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities
Exchange Act of 1934; and, where interim financial information required to
be presented by Article 3 of Regulation S-X is not set forth in the
prospectus, to deliver, or cause to be delivered to each person to whom the
prospectus is sent or given, the latest quarterly report that is
specifically incorporated by reference in the prospectus to provide such
interim financial information.
(d) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrants pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the registrants will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
(e) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrants in reliance upon rule 430A and contained in
a form of prospectus filed by the registrants pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof."
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this Amendment to the Registration Statement on this Form S-3 to
be signed on its behalf by the undersigned, hereunto duly authorized, in the
City of New York, New York, on July 31, 1998.
<TABLE>
<S> <C> <C>
PRICE COMMUNICATIONS CORPORATION
By: /s/ ROBERT PRICE
-----------------------------------------
Robert Price
DIRECTOR, PRESIDENT, CHIEF EXECUTIVE
OFFICER AND TREASURER
</TABLE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
TO THE REGISTRATION STATEMENT ON FORM S-3 HAS BEEN SIGNED BY THE FOLLOWING
PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED.
SIGNATURE TITLE DATE
- ------------------------------ -------------------------- -------------------
Director, President and
/s/ ROBERT PRICE Treasurer (Principal
- ------------------------------ Executive Officer and July 31, 1998
Robert Price Accounting Officer)
Executive Vice-President,
* Secretary and Chief
- ------------------------------ Financial Officer July 31, 1998
Kim I. Pressman (Principal Executive
Officer)
*
- ------------------------------ Director
George E. Cadgene
*
- ------------------------------ Director July 31, 1998
Robert F. Ellsworth
*By: /s/ ROBERT PRICE
- ------------------------------
Robert Price
Attorney-in-fact
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ------------- -----------------------------------------------------------------------------------------------------
<C> <S>
4.1 Warrant Agreement dated as of August 11, 1997, between Price Communications Holdings, Inc., Price
Communications Corporation and Bank of Montreal Trust Company, as the Warrant Agent*
4.2 Warrant Registration Rights Agreement dated as of August 11, 1997, between Price Communications
Corporation and Natwest Capital Markets Limited on behalf of the Purchasers
4.3 Form of Warrant (see exhibit 4.1)
5.1 Opinion of Davis Polk & Wardwell regarding the validity of the Warrants and the Common Stock
23.1 Consent of KPMG Peat Marwick LLP relating to the financial statements of Palmer
23.2 Consent of Arthur Andersen LLP
23.3 Consent of Davis Polk & Wardwell (see exhibit 5.1)
24.1 Powers of Attorney for the Company (included on signature page)*
</TABLE>
- ------------------------
*Previously filed.
<PAGE>
Exhibit 4.2
PRICE COMMUNICATIONS CORPORATION
WARRANT REGISTRATION RIGHTS AGREEMENT
August 11, 1997
NATWEST CAPITAL MARKETS LIMITED
WASSERSTEIN PERELLA SECURITIES
c/o NatWest Capital Markets Limited
135 Bishopsgate
London, England
Ladies and Gentlemen:
Price Communications Corporation (the "Company"), a New York
corporation, proposes to issue and sell to Natwest Capital Markets Limited
("NatWest") and Wasserstein Perella Securities, Inc. (together with NatWest,
the "Purchasers"), upon the terms set forth in a purchase agreement, dated
July 31, 1997 (the "Purchase Agreement") , among the Purchasers, Price
Communications Cellular Holdings, Inc. ("Holdings"), Price communications
Cellular Inc. and the Company, 153,400 units (the "Units") each consisting of
$1,000 principal amount at maturity of Holdings' 13 1/2% Senior Secured
Discount Notes due 2007 and warrants to purchase 527,696 shares of Common
Stock, $.01 par value per share, of the Company (such warrants, the "Warrants").
As an inducement to the Purchasers to enter into the Purchase Agreement and in
satisfaction of a condition to the obligations of the Purchasers thereunder,
the Company agrees with the Purchasers, (i) for the benefit of the Purchasers
and (ii) for the benefit of the holders from time to time of the Warrants and
the common shares for which such warrants are exercisable initially (the
"Warrant Shares"), as follows:
1. Definitions. Capitalized terms used herein without definition shall
have their respective meanings set forth in the Purchase Agreement. As used in
this Agreement, the following capitalized defined terms shall have the
following meanings:
Affiliate: Of any specified person means any other person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with such specified person. For purposes of this definition, control
of a person means the power, direct or indirect, to direct or cause the
direction of the management and policies of such person whether by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
Business Day: Any day except Saturday, Sunday and any day which shall
be a legal holiday or a day on which banking institutions in the State of New
York generally are authorized or required by law or other government actions to
close.
Commission: Means the United States Securities and Exchange Commission.
DTC: Means The Depository Trust Company.
Effective Date: Shall mean August 11, 1998.
<PAGE>
Effectiveness Period: Means the period from the effectiveness of the
Shelf Registration Statement (as defined) , through and including the earlier
of (a) August 11, 2007 and (b) the date when, in the written opinion of
counsel to the Company, all outstanding Warrant Shares held by Persons who are
not affiliates of the Company may be resold without registration under the
Securities Act pursuant to Rule 144(k) thereunder or any successor provision
thereto.
Exchange Act: Means the Securities Exchange Act of 1934, as amended.
Holders: Means the Persons with a beneficial interest from time to
time in the Warrant Shares.
Issue Date: Means the date of issuance of the Warrants.
Majority Holders: Means the Holders of a majority of the aggregate
amount of outstanding Warrant Shares (or, if prior to the date any Warrants
have been exercised, the Holders of a majority of the outstanding Warrants).
Managing Underwriters: Means the investment banker or investment
bankers and manager or managers that shall administer an underwritten
offering, if any, as set forth in Section 6 hereof.
Officer's Certificate: Means a certificate signed by any one of the
Chairman, any vice Chairman, any Chief Executive Officer, any President, any
Senior Vice President, any Executive Vice President or the Chief Financial
Officer.
Person: Shall mean an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
Prospectus: Means the prospectus included in any Shelf Registration
statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Act), as amended
or supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Securities.
Registration Statement: Any registration statement of the Company that
covers any of the Warrant Shares pursuant to the provisions of this Agreement,
including the Prospectus, amendments and supplements to such registration
statement or Prospectus, including pre- and post-effective amendments, all
exhibits thereto, and all material incorporated by reference or deemed to be
incorporated by reference, if any, in such registration statement.
Rule 144: Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission as a replacement
thereto having substantially the same effect as such Rule.
Rule 144A: Rule 144A promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission as a replacement thereto
having substantially the same effect as such Rule.
<PAGE>
Rule 158: Rule 158 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission as a replacement
thereto having substantially the same effect as such Rule.
Rule 174: Rule 174 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission as a replacement
thereto having substantially the same effect as such Rule.
Rule 415: Rule 415 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission as a replacement
thereto having substantially the same effect as such Rule.
Rule 424: Rule 424 promulgated by the commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission as a replacement
thereto having substantially the same effect as such Rule.
Securities Act: The Securities Act of 1933, as amended, and the rules
and regulations promulgated by the Commission thereunder.
Shelf Registration: As defined in Section 2 hereof.
Special Counsel: At any time, the special counsel to the Holders of
Transfer Restricted Securities, the fees and expenses of which will be
reimbursed to such Holders pursuant to this Agreement.
Shelf Registration Statement: Means the shelf registration statement
of the Company pursuant to the provisions of Section 2 hereof filed with the
Commission which covers some or all of the Warrant Shares, as applicable, on an
appropriate form under Rule 415 under the Securities Act, or any similar rule
that may be adopted by the Commission, amendments and supplements to such regis
tration statement, including post-effective amendments, in each case including
the Prospectus contained therein, all exhibits thereto and all material
incorporated by reference therein.
Transfer Restricted Securities: The Warrant Shares upon original
issuance thereof, and at all times subsequent thereto, until, in the case of
any such Warrant Share, (i) the date on which such Warrant Share has been
registered effectively pursuant to the Securities Act and disposed of in
accordance with the registration statement relating to it, (ii) the date on
which such Warrant Share is distributed to the public pursuant to Rule 144 (or
any similar provisions then in effect) or is saleable pursuant to Rule 144(k)
promulgated by the Commission pursuant to the Securities Act or (iii) the date
on which such Warrant Share ceases to be outstanding.
Underwriter: Means any underwriter of Registrable securities in
connection with an offering thereof under a Shelf Registration Statement.
2. Shelf Registration: (a) The Company shall (i) within 270 days
following the Issue Date, file with the Commission the Shelf Registration
Statement relating to the issuance and resale of the Warrant Shares (including
securities deemed registered pursuant to Rule 416 under the Securities Act) by
the Holders from time to time in accordance with the methods of distribution
elected by the Majority Holders and set forth in the Shelf Registration
<PAGE>
Statement and, thereafter, (ii) use its reasonable best efforts to cause the
Shelf Registration Statement to be declared effective under the Securities Act
within 365 days following the Issue Date; provided, however, that no Holder
shall be entitled to have the Warrant Shares held by it covered by the Shelf
Registration Statement unless such Holder furnishes to the Company in writing,
within 15 Business Days after receipt of a request therefor, such information
as the Company may reasonably request for use in connection with any Shelf
Registration Statement or Prospectus or preliminary prospectus included
therein. Each Holder as to which any Shelf Registration Statement is being
effected agrees to furnish promptly to the Company all information required to
be disclosed in order to make the information previously furnished to the
Company by such Holder not materially misleading. The Company shall be deemed
not to have used its reasonable efforts to cause the Shelf Registration
Statement to be declared effective unless the Company determines in good faith
that any actions taken to do so (i) would violate any applicable law to which
it was then subject or (ii) would require the Company to disclose an otherwise
confidential, material financing, acquisition or other corporate transaction
and management shall have determined in good faith as evidenced by an
Officer's Certificate that such disclosure is not in the best interest of the
Company and its shareholders; provided, however, that no delay in
effectiveness pursuant to clause (i) or (ii) above may exceed 45 days.
(b) The Company shall use its reasonable efforts to cause the Shelf
Registration Statement to remain continuously effective until the earlier of
(i) such time as all Warrants have been exercised and (ii) the second
anniversary of the Issue Date.
(c) During any consecutive 365-day period, the Company may suspend the
availability of the Shelf Registration Statement for up to 60 consecutive days
(except for the 30 consecutive-day period immediately prior to August 8, 2007)
if the Board of Directors of the Company determines in the exercise of its
reasonable judgment that there is a valid business purpose for such suspension
and provides notice that such determination was made to the Holders; provided,
however, that in no event shall the Company be required to disclose the
business purpose for such suspension if the company determines in good faith
that such business purpose must remain confidential.
3. Registration Procedures. In connection with the Shelf Registration
Statement, the following provisions shall apply:
(a) No fewer than five Business Days prior to the initial filing of a
Registration Statement or Prospectus and no fewer than two Business Days
prior to the filing of any amendment or supplement thereto (including any
document that would be incorporated or deemed to be incorporated therein by
reference) , furnish to the Holders of the Transfer Restricted Securities,
their Special Counsel and the managing underwriters, if any, copies of all
such documents proposed to be filed, which documents (other than those
incorporated or deemed to be incorporated by reference) will be subject to
the review of such Holders, their special counsel and such underwriters, if
any, and cause the officers and directors of the Company, counsel to the
Company and independent certified public accountants to the Company to
respond to such inquiries as shall be necessary, in the opinion of
respective counsel to such Holders and such underwriters, to conduct a
reasonable investigation within the meaning of the Securities Act; provided,
however, that the Company shall not be deemed to have kept a Registration
Statement effective during the applicable period if it voluntarily takes or
fails to take any action that results in selling Holders of the Transfer
<PAGE>
Restricted Securities covered thereby not being able to sell such Transfer
Restricted Securities pursuant to Federal securities laws during that
period. The Company shall not file any such Shelf Registration Statement or
related Prospectus or any amendments or supplements thereto to which the
Holders of a majority o-f the Transfer Restricted Securities, their Special
Counsel, or the managing underwriters, if any, shall reasonably object on a
timely basis;
(b) Prepare and file with the Commission such amendments, including
post-effective amendments, to each Registration Statement as may be
necessary to keep such Registration Statement continuously effective for the
applicable time period; cause the related Prospectus to be supplemented by
any required Prospectus supplement, and as so supplemented to be filed
pursuant to Rule 424 (or any similar provisions then in force) under the
Securities Act; and comply with the provisions of the Securities Act and the
Exchange Act with respect to the disposition of all securities covered by
such Registration Statement during such period in accordance with the
intended methods of disposition by the sellers thereof set forth in such
Registration Statement as so amended or in such Prospectus as so
supplemented;
(c) Notify the Holders of Transfer Restricted Securities to be sold,
their Special Counsel and the managing underwriters, if any, promptly (and
in the case of an event specified by clause (i) (A) of this paragraph in no
event fewer than two Business Days prior to such filing), and (if requested
by any such Person), confirm such notice in writing, (i) (A) when a
Prospectus or any Prospectus supplement or post-effective amendment is
proposed to be filed, and, (B) with respect to a Registration Statement or
any post-effective amendment, when the same has become effective, (ii) in
the case of a Shelf Registration, of any request by the Commission or any
other Federal or state governmental authority for amendments or supplements
to a Registration Statement or related Prospectus or for additional
information, (iii) of the issuance by the Commission, any state securities
commission, any other governmental agency or any court of any stop order,
order or injunction suspending or enjoining the use or the effectiveness of
a Registration Statement or the initiation of any proceedings for that
purpose, (iv) if at any time any of the representations and warranties of
either the Company contained in any agreement (including any underwriting
agreement) contemplated hereby cease to be true and correct in all material
respects, (v) of the receipt by the Company of any notification with respect
to the suspension of the qualification or exemption from qualification of
any of the Transfer Restricted Securities for sale in any jurisdiction, or
the initiation or threatening of any proceeding for such purpose, and (vi)
in the case of a Shelf Registration, of the happening of any event that
makes any statement made in such Registration Statement or related
Prospectus or any document incorporated or deemed to be incorporated therein
by reference untrue in any material respect or that requires the making of
any changes in such Registration Statement, Prospectus or documents so that,
in the case of the Registration Statement, it will not contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein, not
misleading, and that in the case of the Prospectus, it will not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading;
(d) Use its reasonable best efforts to avoid the issuance of, or, if
<PAGE>
issued, obtain the withdrawal of any order enjoining or suspending the use
or effectiveness of a Registration Statement or the lifting of any
suspension of the qualification (or exemption from qualification) of any of
the Transfer Restricted Securities for sale in any jurisdiction, at the
earliest practicable moment;
(e) If requested by the managing underwriters, if any, or the Holders of
a majority in aggregate principal amount of the Transfer Restricted
Securities being sold in connection with such offering, (i) promptly
incorporate in a Prospectus supplement or post-effective amendment such
information as the managing underwriters, if any, and such Holders agree
should be included therein, and (ii) make all required filings of such
Prospectus supplement or such post-effective amendment as soon as
practicable after the Company has received notification of the matters to be
incorporated in such Prospectus supplement or post-effective amendment;
provided, however, that the Company shall not be required to take any action
pursuant to this Section 3(e) that would, in the opinion of counsel for the
Company, violate applicable law;
(f) Furnish to each Holder of Transfer Restricted Securities, their
Special Counsel and each managing underwriter, if any, without ' charge, at
least one conformed copy of each Registration Statement and each amendment
thereto, including financial statements and schedules, all documents
incorporated or deemed to be incorporated therein by reference, and all
exhibits to the extent requested by each Holder (including those previously
furnished or incorporated by reference) as soon as practicable after the
filing of such documents with the Commission;
(g) Deliver to each Holder of Transfer Restricted Securities, their
Special Counsel, and the underwriters, if any, without charge, as many
copies of the Prospectus or Prospectuses (including each form of prospectus)
and each amendment or supplement thereto as such Persons reasonably request;
and the Company hereby consents to the use of such Prospectus and each
amendment or supplement thereto by each of the selling Holders of Transfer
Restricted Securities and the underwriters, if any, in connection with the
offering and sale of the Transfer Restricted Securities covered by such
Prospectus and any amendment or supplement thereto;
(h) Prior to any public offering of Transfer Restricted Securities, use
its reasonable best efforts to register or qualify or cooperate with the
Holders of Transfer Restricted Securities to be sold or tendered for, the
underwriters, if any, and their respective counsel in connection with the
registration or qualification (or exemption from such registration or
qualification) of such Transfer Restricted Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions within the
United States as any Holder or underwriter reasonably requests in writing;
keep each such registration or qualification (or exemption therefrom)
effective during the period such Registration Statement is required to be
kept effective and do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of the Transfer
Restricted Securities covered by the Shelf Registration Statement; provided,
however, that the Company shall not be required to qualify generally to do
business in any jurisdiction where they are not then so qualified or to take
any action that would subject them to general service of process in any such
jurisdiction where they are not then so subject or subject the Company to
any tax in any such jurisdiction where it is not then so subject;
<PAGE>
(i) In connection with any sale or transfer of Transfer Restricted
Securities that will result in such securities no longer being Transfer
Restricted securities, cooperate with the Holders and the managing
underwriters, if any, to facilitate the timely preparation and delivery of
certificates representing Transfer Restricted Securities to be sold, which
certificates shall not bear any restrictive legends and shall be in a form
eligible for deposit with The Depository Trust Company and to enable such
Transfer Restricted Securities to be in such denominations and registered in
such names as the managing underwriters, if any, or Holders may request at
least two Business Days prior to any sale of Transfer Restricted Securities;
(j) Use its reasonable best efforts to cause the offering of the Transfer
Restricted Securities covered by the Registration Statement to be registered
with or approved by such other governmental agencies or authorities within
the United States, except as may be required as a consequence of the nature
of such selling Holder's business, in which case the Company will cooperate
in all reasonable respects with the filing of such Registration Statement
and the granting of such approvals as may be necessary to enable the seller
or sellers thereof or the underwriters, if any, to consummate the
disposition of such Transfer Restricted securities; provided, however, that
the Company shall not be required to register the Transfer Restricted
Securities in any jurisdiction that would subject them to general service of
process in any such jurisdiction where it is not then so subject or subject
the Company to any tax in any such jurisdiction where it is not then so
subject or to require the Company to qualify to do business in any
jurisdiction where it is not then so qualified;
(k) Upon the occurrence of any event contemplated by Paragraph 3 (c) (vi)
, as promptly as practicable, prepare a supplement or amendment, including,
if appropriate, a post-effective amendment, to each Registration Statement
or a supplement to the related Prospectus or any document incorporated or
deemed to be incorporated therein by reference, and file any other required
document so that, as thereafter delivered, such Prospectus will not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading;
(1) Prior to the effective date of the first Registration Statement
relating to the Transfer Restricted Securities, as applicable, to provide a
CUSIP number for the Transfer Restricted Securities;
(m) Enter into such agreements (including an underwriting agreement in
form, scope and substance as is customary in underwritten offerings) and
take all such other reasonable actions in connection therewith (including
those reasonably requested by the managing underwriters, if any, or the
Holders of a majority in aggregate principal amount of the Transfer
Restricted securities being sold) in order to expedite or facilitate the
disposition of such Transfer Restricted Securities, and in such connection,
whether or not an underwriting agreement is entered into and whether or not
the registration is an underwritten registration, (i) make such
representations and warranties to the Holders of such Transfer Restricted
Securities and the underwriters, if any, with respect to the business of the
Company and its subsidiaries (including with respect to businesses or assets
acquired or to be acquired by any of them), and the Registration Statement,
Prospectus and documents, if any, incorporated or deemed to be incorporated
by reference therein, in each case, in form, substance and scope as are
customarily made by issuers to underwriters in underwritten offerings, and
<PAGE>
confirm the same if and when requested; (ii) obtain opinions of counsel to
the Company and updates thereof (which counsel and opinions (in form, scope
and substance) shall be reasonably satisfactory to the managing
underwriters, if any, and Special Counsel to the Holders of the Transfer
Restricted Securities being sold), addressed to each selling Holder of
Transfer Restricted Securities and each of the underwriters, if any,
covering the matters customarily covered in opinions requested in
underwritten offerings and such other matters as may be reasonably requested
by such Special Counsel and underwriters; (iii) use its best efforts to
obtain customary "cold comfort" letters and updates thereof from the
independent certified public accountants of the Company (and, if necessary,
any other independent certified public accountants of any business which may
hereafter be acquired by the Company for which financial statements and
financial data are required to be included in the Registration Statement),
addressed (where reasonably possible) to each selling Holder of Transfer
Restricted Securities and each of the underwriters, if any, such letters to
be in customary form and covering matters of the type customarily covered in
"cold comfort" letters in connection with underwritten offerings; (iv) if an
underwriting agreement is entered into, the same shall contain
indemnification provisions and procedures no less favorable to the selling
holders and the underwriters, if any, than those set f orth in Section 8
hereof (or such other provisions and procedures acceptable to Holders of a
majority in aggregate principal amount of Transfer Restricted Securities
covered by such Registration Statement and the managing underwriters); and
(v) deliver such documents and certificates as may be reasonably requested
by the Holders of a majority in aggregate principal amount of the Transfer
Restricted Securities being sold, their Special Counsel and the managing
underwriters, if any, to evidence the continued validity of the
representations and warranties made pursuant to clause 3 (m) (i) above and
to evidence compliance with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company;
(n) Make available for inspection by a representative of the Holders of
Transfer Restricted Securities being sold, any underwriter participating in
any such disposition of Transfer Restricted Securities, if any, and any
attorney, consultant or accountant retained by such selling Holders or
underwriter, at the offices where normally kept, during reasonable business
hours, all pertinent financial and other records, pertinent corporate
documents and properties of the Company and its subsidiaries (including with
respect to business and assets acquired or to be acquired to the extent that
such information is available to the Company) and cause its subsidiaries
(including with respect to business and assets acquired or to be acquired to
the extent that such information is ~available to the Company) to supply
such pertinent information in each case reasonably requested by any such
representative, underwriter, attorney, consultant or accountant in
connection with such Shelf Registration, provided, however, that such
Persons shall first agree in writing with the Company that any information
that is reasonably and in good faith designated by the Company in writing as
confidential at the time of delivery of such information shall be kept
confidential by such Persons, unless (i) disclosure of such information is
required by court or administrative order or is necessary to respond to
inquiries of regulatory authorities, (ii) disclosure of such information is
required by law (including any disclosure requirements pursuant to Federal
Securities Laws in connection with the filing of any Registration Statement
or the use of any prospectus referred to in this Agreement), (iii) such
information becomes generally available to the public other than as a result
of a disclosure or failure to safeguard by such Person or (iv) such
<PAGE>
information becomes lawfully available to such Person from a source other
than the Company and such source obtained such information lawfully and is
not otherwise bound by a confidentiality agreement.
(o) The company will use its reasonable best efforts to cause the Warrant
Shares issuable upon exercise of the Warrants to be quoted or listed on any
exchange upon which the Company's Common Stock is then quoted or listed, on
or prior to the Effective Date.
(p) Comply with all applicable rules and regulations of the Commission and
make generally available to their securityholders earning statements
satisfying the provisions of Section 11(a) of the Securities Act and Rule
158 thereunder (or any similar rule promulgated under the Securities Act) ,
no later than 45 days after the end of any 12-month period (or 90 days after
the end of any 12-month period if such period is a fiscal year) (i)
commencing at the end of any fiscal quarter in which Transfer Restricted
Securities are sold to underwriters in a firm commitment or reasonable
efforts underwritten offering and (ii) if not sold to underwriters in such
an offering, commencing on the first day of the first fiscal quarter after
the effective date of a Registration Statement, which statement shall cover
said period, consistent with the requirements of Rule 158; and
(q) The company will use its reasonable best efforts to take all other
steps necessary to effect the registration, offering and sale of the Warrant
Shares covered by the Shelf Registration Statement.
The Company may require each seller of Transfer Restricted Securities
as to which any registration is being effected to furnish to the Company such
information regarding the distribution of such Transfer Restricted Securities
as is required by law to be disclosed in the applicable Registration Statement
and the Company may exclude from such registration the Transfer Restricted
Securities of any seller who unreasonably fails to furnish such information
within a reasonable time after receiving such request.
If any such Registration Statement refers to any holder by name or
otherwise as the holder of any securities of the Company, then such holder
shall have the right to require (i) the insertion therein of language, in form
and substance reasonably satisfactory to such holder, to the effect that the
holding by such holder of such securities is not to be construed as a
recommendation by such holder of the investment quality of the Company's
securities covered thereby and that such holding does not imply that such
holder will assist in meeting any future financial requirements of the
Company, or (ii) in the event that such reference to such holder by name or
otherwise is not required by the Securities Act or any similar Federal statute
then in force, the deletion of the reference to such holder in any amendment
or supplement to the Registration Statement filed or prepared subsequent to
the time that such reference ceases to be required.
Each Holder of Transfer Restricted securities agrees by acquisition of
such Transfer Restricted Securities that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 3
(c)(ii), 3(c)(iii), 3(c)(v) or 3(c)(vi) hereof, such Holder will forthwith
discontinue disposition of such Transfer Restricted Securities covered by such
Registration Statement or Prospectus until such Holder's receipt of the copies
of the supplemented or amended Prospectus contemplated by Section 3(k) hereof,
or until it is advised in writing (the "Advice") by the Company that the use
of the applicable Prospectus may be resumed, and, in either case, has received
<PAGE>
copies of any additional or supplemental filings that are incorporated or
deemed to be incorporated by reference in such Prospectus. If the Company
shall give any such notice, the Effectiveness Period shall be extended by the
number of days during such period from and including the date of the giving of
such notice to and including the date when each seller of Transfer Restricted
Securities covered by such Registration Statement shall have received (x) the
copies of the supplemented or amended Prospectus contemplated by Section 3(k)
hereof or (y) the Advice, and, in either case, has received copies of any
additional or supplemental filings that are incorporated or deemed to be
incorporated by reference in such Prospectus.
4. Registration Expenses. (a) All fees and expenses incident to the
performance of or compliance with this Agreement by the Company shall be borne
by it whether or not any Registration Statement is filed or becomes effective
and whether or not any securities are issued or sold pursuant to any
Registration Statement. The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing
fees (including, without limitation, fees and expenses (A) with respect to
filings required to be made with the National Association of Securities
Dealers, Inc. and (B) in compliance with securities or Blue Sky laws
(including, without limitation and in addition to that provided for in (b)
below, fees and disbursements of counsel for the underwriters or Holders in
connection with Blue Sky qualifications of the Transfer Restricted Securities
and determination of the eligibility of the Transfer Restricted Securities for
investment under the laws of such jurisdictions as the managing underwriters,
if any, or Holders of a majority of Transfer Restricted securities may
designate) , (ii) printing expenses (including, without limitation, expenses
of printing certificates for Transfer Restricted securities in a form eligible
for deposit with The Depository Trust Company and of printing Prospectuses if
the printing of Prospectuses is requested by the managing underwriters, if
any, or by the Holders of a majority of the Transfer Restricted Securities
included in any Registration Statement), (iii) messenger, telephone and
delivery expenses, (iv) fees and disbursements of counsel for the Company and
Special Counsel for the Holders (plus any local counsel, deemed appropriate by
the Holders of a majority in aggregate principal amount of the Transfer
Restricted Securities) , in accordance with the provisions of Section 4(b)
hereof, (v) fees and disbursements of all independent certified public
accountants referred to in Section 3(m)(iii) (including, without limitation,
the expenses of any special audit and "cold comfort" letters required by or
incident to such performance) , (vi) Securities Act liability insurance, if
the Company so desires such insurance, and (vii) fees and expenses of all
other persons retained by the Company. In addition, the Company shall pay its
internal expenses (including, without limitation, all salaries and expenses of
their officers and employees performing legal or accounting duties), the
expense of any annual audit, and the fees and expenses incurred in connection
with the listing of the securities to be registered on any securities exchange.
Notwithstanding the foregoing or anything in this Agreement to the contrary,
each Holder shall pay all underwriting discounts and commissions of any
underwriters with respect to any Warrant Shares sold by it.
(b) In connection with any Registration hereunder, the Company shall
reimburse the Holders of the Transfer Restricted Securities being registered in
such registration for the reasonable fees and disbursements of not more than
one firm of attorneys representing the selling Holders (in addition to any
local counsel) chosen by the Holders of a majority of the Transfer Restricted
Securities.
<PAGE>
5. Indemnification: (a) The Company agrees to indemnify and hold
harmless (i) each of the Purchasers, each Holder - of Transfer Restricted
Securities and (ii) each person, if any, who controls (within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act) any of the foregoing
(any of the persons referred to in this clause (ii) being hereinafter referred
to as a "controlling person"), and (iii) the respective officers, directors,
partners, employees, representatives and agents of the Purchasers, each Holder
of Transfer Restricted Securities, each Participating Broker-Dealer or any
controlling person (any person referred to in clause (i), (ii) or (iii) may
hereinafter be referred to as an "Indemnified Person") , from and against any
and all losses, claims, damages, liabilities and judgments caused by any
untrue statement or alleged untrue statement of a material fact contained in
any Registration Statement, Prospectus or form of Prospectus or in any
amendment or supplement thereto or in any preliminary Prospectus, or caused by
any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein (in the case of
any Prospectus or form of Prospectus or supplement thereto, in light of the
circumstances under which they were made) not misleading, except insofar as
such losses, claims, damages, liabilities or judgments are caused by any such
untrue statement or omission or alleged untrue statement or omission based
upon information relating to any Indemnified Person furnished in writing to
the Company by or on behalf of such Indemnified Person expressly for use
therein; provided that the foregoing indemnity with respect to any preliminary
prospectus shall not inure to the benefit of any Indemnified Person from whom
the person asserting such losses, claims, damages, liabilities and judgments
purchased securities if such untrue statement or omission or alleged untrue
statement or omission made in such preliminary prospectus is eliminated or
remedied in the Prospectus and a copy of the Prospectus shall not have been
furnished to such person in a timely manner due to the wrongful action or
wrongful inaction of such Indemnified Person.
(b) In case any action shall be brought against any Indemnified
Person, based upon any Registration Statement or any such Prospectus or any
amendment or supplement thereto and with respect to which indemnity may be
sought against the Company or Holdings, such Indemnified Person shall promptly
notify the Company in writing and the Company shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to such Indemnified
Person and payment of all fees and expenses. Any Indemnified Person shall have
the right to employ separate counsel in any such action and participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Person, unless (i) the employment of such counsel
shall have been specifically authorized in writing by the company, (ii) the
Company shall have failed to assume the defense and employ counsel or (iii)
the named parties to any such action (including any impleaded parties) include
both such Indemnified Person and the Company and such Indemnified Person shall
have been advised by counsel that there may be one or more legal defenses
available to it which are different from or additional to those available to
the Company (in which case the Company shall not have the right to assume the
defense of such action on behalf of such Indemnified Person, it being
understood, however, that the Company shall not, in connection with any one
such action or separate but substantially similar or related actions in the
same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel) for all such
Indemnified Persons, which firm shall be designated in writing by such
Indemnified Persons, and that all such fees and expenses shall be reimbursed
as they are incurred). The Company and Holdings shall not be liable for any
<PAGE>
settlement of any such action effected without its written consent but if
settled with the written consent of the Company, the Company agrees to
indemnify and hold harmless any Indemnified Person from and against any loss or
liability by reason of such settlement. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement of
any pending or threatened proceeding in respect of which any indemnified party
is or could have been a party and indemnity could have been sought hereunder
by such indemnified party, unless such settlement includes an unconditional
release of such indemnified party from all liability on claims that are the
subject matter of such proceeding.
(c) In connection with any Registration Statement in which a Holder
of Transfer Restricted Securities is participating, such Holder of Transfer
Restricted Securities agrees, severally and not jointly, to indemnify and hold
harmless the Company, its directors, its officers, employees, representatives
and agents and any person controlling the Company within the meaning of
section 15 of the Act or Section 20 of the Exchange Act, to the same extent as
the foregoing indemnity from the Company to each Indemnified Person but only
with reference to information relating to such Indemnified Person furnished in
writing by or on behalf of such Indemnified Person expressly for use in such
Registration Statement. In case any action shall be brought against the
Company, any of its directors, any such officer, employees, representatives or
agents or any person controlling the Company or Holdings based on such
Registration Statement and in respect of which indemnity may be sought against
any Indemnified Person, the Indemnified Person shall have the rights and
duties given to the Company (except that if the Company shall have assumed the
defense thereof, such Indemnified Person shall not be required to do so, but
may employ separate counsel therein and participate in defense thereof but the
fees and expenses of such counsel shall be at the expense of such Indemnified
Person), and the Company, its directors, any such officers, employees,
(representatives or agents) and any person controlling the Company shall have
the rights and duties given to the Indemnified Person, by Section 5(b) hereof.
(d) If the indemnification provided for in this Section 5 is
unavailable to an indemnified party in respect of any losses, claims, damages,
liabilities or judgments referred to therein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages, liabilities and judgments (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company and Holdings on the one
hand and each Indemnified Person on the other hand from the offering of the
Warrants or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i)' above but also the
relative fault of the Company and Holdings and each such Indemnified Person in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative fault of the Company and Holdings and
each such Indemnified Person shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
the omission to state a material fact relates to information supplied by -the
Company or Holdings or such Indemnified Person and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company and the Purchasers agree that it would
not be just and equitable if contribution pursuant to this Section 5(d) were
determined by pro rata allocation (even if the Indemnified Person were treated
as one entity for such purpose) or by any other method of allocation which
<PAGE>
does not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, liabilities or judgments
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 5, no Indemnified Person shall be required to contribute any amount in
excess of the amount by which the total net prof it received by it in
connection with the sale of the Notes pursuant to this Agreement exceeds the
amount of any damages which such Indemnified Person has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Indemnified Persons' obligations to contribute pursuant
to this Section 7(d) are several in proportion to the respective amount of
Warrant Shares included in any such Registration Statement by each Indemnified
Person and not joint.
6. Rules 144 and 144A. The Company shall use its reasonable best
efforts to file the reports required to be filed by it under the Securities
Act and the Exchange Act in a timely manner and, if at any time it is not
required to file such reports but in the past had been required to or did file
such reports, it will, upon the request of any Holder of Transfer Restricted
Securities, make available other information as required. by, and so long as
necessary to permit, sales of its Transfer Restricted Securities pursuant to
Rule 144A. Notwithstanding the foregoing, nothing in this Section 6 shall be
deemed to require the Company to register any of its securities pursuant to
the Exchange Act.
7. Underwritten Registrations. If any of the Transfer Restricted
Securities covered by any Shelf Registration Statement are to be sold in an
underwritten offering, the investment banker or investment bankers and manager
or managers that will administer the offering will be selected by the Holders
of a majority in aggregate principal amount of such Transfer Restricted
Securities included in such offering, subject to the consent of the Company
(which will not be unreasonably withheld or delayed).
No person may participate in any underwritten registration hereunder
unless such person (i) agrees to sell such person's Transfer Restricted
Securities on the basis reasonably provided in any underwriting arrangements
approved by the persons entitled hereunder to approve such arrangements and
(ii) completes and executes all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents required under the
terms of such underwriting arrangements.
` 8. Miscellaneous.
(a) Remedies. In the event of a breach by the Company, or by
a Holder of Transfer Restricted Securities, of any of their obligations
under this Agreement, each Holder of Transfer Restricted Securities or the
Company, as the case may be, in addition to being entitled to exercise all
rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement. The Company and
each Holder of Transfer Restricted Securities agree that monetary damages
would not be adequate compensation for any loss incurred by reason of a
<PAGE>
breach by it of any of the provisions of this Agreement and hereby further
agrees that, in the event of any action for specific performance in
respect of such breach, it shall waive the defense that a remedy at law
would be adequate.
(b) No Inconsistent Agreements. The Company will not enter
into any agreement with respect to its securities that is inconsistent
with the rights granted to the Holders of Transfer Restricted Securities
in this Agreement or otherwise conflicts with the provisions hereof. The
Company has not previously entered into any agreement granting any
registration rights with respect to any of its equity securities to any
person except for agreements with holders of registration rights granted
prior to the date hereof (from whom all necessary consents or waivers have
been obtained). Without limiting the generality of the foregoing, without
the written consent of the Holders of a majority of the then outstanding
Transfer Restricted Securities, the Company shall not grant to any person
the right to request it to register' any of its equity securities under
the Securities Act unless the rights so granted are subject in all
respects to the prior rights of the Holders of Transfer Restricted
Securities set forth herein, and are not otherwise in conflict or
inconsistent with the provisions of this Agreement.
(c) No Piggyback on Registrations. The Company shall not
grant to any of its securityholders (other than the Holders of Transfer
Restricted Securities in such capacity) the right to include any
securities of the Company in any Shelf Registration other than Transfer
Restricted Securities.
(d) Amendments and Waivers. The provisions of this
Agreement, including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless they have obtained the written
consent of the Holders of a majority of the then outstanding Transfer
Restricted Securities; provided, however, that, for the purposes of this
Agreement, Transfer Restricted Securities that are owned, directly or
indirectly, by the Company or an Affiliate of the Company are not deemed
outstanding. Notwithstanding the foregoing, a waiver or consent to depart
from the provisions hereof with respect to a matter that relates
exclusively to the rights of Holders of Transfer Restricted Securities
whose securities are being sold pursuant to a Registration Statement and
that does not directly or indirectly affect the rights of other Holders of
Transfer Restricted Securities may be given by Holders of a majority in
amount of the Transfer Restricted Securities being sold by such Holders
pursuant to such Registration Statement; provided, however, that the
provisions of this sentence may not be amended, modified, or supplemented
except in accordance with the provisions of the immediately preceding
sentence.
(e) Notices. All notices and other communications provided for
herein shall be made in writing by hand delivery, next-day air courier,
certified first-class mail, return receipt requested, telex or facsimile:
(i) if to the Company, as provided in the Purchase
Agreement,
(ii) if to the Purchasers, as provided in the Purchase
Agreement, or
<PAGE>
(iii) if to any other person who is then the registered
Holder of any Transfer Restricted Securities, to the address
of such Holder as it appears in the Share register of the
Company.
Except as otherwise provided in this Agreement, all such communications
shall be deemed to have been duly given: when delivered by hand, if personally
delivered; one business day after being timely delivered to a next-day air
courier; five business days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; and when receipt is
acknowledged by the recipient's telecopier machine, if telecopied.
(f) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of
each of the parties and shall inure to the benefit of each Holder of
Transfer Restricted securities. The Company may not assign its rights or
obligations hereunder without the prior written consent of each Holder of
any Transfer Restricted Securities. Notwithstanding the foregoing, no
transferee shall have any of the rights granted under this Agreement until
such transferee shall acknowledge its rights and obligations hereunder by
a signed written statement of such transferee's acceptance of such rights
and obligations.
(g) Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same Agreement.
(h) Governing Law; Submission to Jurisdiction: Waiver of Jury
Trial. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND
PERFORMED WITHIN THE STATE OF NEW YORK. THE COMPANY AND HOLDINGS HEREBY
IRREVOCABLY SUBMIT TO THE JURISDICTION OF ANY NEW YORK STATE COURT SITTING
IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL COURT
SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF
ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT, AND IRREVOCABLY ACCEPT FOR THEMSELVES AND IN RESPECT OF THEIR
PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID
COURTS.
(i) Severability. The remedies provided herein are cumulative
and not exclusive of any remedies provided by law. If any term, provision,
covenant or restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, illegal, void or unenforceable, the remainder
of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their reasonable
efforts to find and employ an alternative means to achieve the same or
substantially the same result as that contemplated by such term,
provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including
any of such that may be hereafter declared invalid, illegal, void or
unenforceable.
(j) Headings. The headings in this Agreement are for
<PAGE>
convenience of reference only. and shall not limit or otherwise affect the
meaning hereof. All references made in this Agreement to "Section" and
"paragraph" refer to such Section or paragraph of this Agreement, unless
expressly stated otherwise.
(k) Attorneys' Fees. In any action or proceeding brought to
enforce any provision of this Agreement, or where any provision hereof or
thereof is validly asserted as a defense, the prevailing party, as
determined by the court, shall be entitled to recover reasonable
attorneys' fees in addition to any other available remedy.
Please confirm that the foregoing correctly sets forth the agreement
between the Company and you.
Very truly yours,
PRICE COMMUNICATIONS
CORPORATION
By:
------------------------
Name:
Title:
The foregoing Warrant Registration Rights Agreement is hereby
confirmed and accepted as of the date first above written.
NATWEST CAPITAL MARKETS LIMITED
on behalf of the Purchasers
By:
----------------------------------
Name:
Title:
Please confirm that the foregoing correctly sets forth the agreement
between the Company and you.
Very truly yours,
PRICE COMMUNICATIONS
CORPORATION
By:
------------------------
Name: Robert Price
Title: President
The foregoing Warrant Registration Rights Agreement is hereby
confirmed and accepted as of the date first above written.
<PAGE>
NATWEST CAPITAL MARKETS LIMITED
on behalf of the Purchasers
By:
----------------------------------
Name: Gregory B. Bowles
Title: Managing Director
<PAGE>
Exhibit 5.1
[LETTERHEAD OF DAVIS POLK & WARDWELL]
July 31, 1998
Price Communications Corporation
45 Rockefeller Plaza
New York, New York 10020
Ladies and Gentlemen:
We have acted as special counsel to Price Communications Corporation (the
"Company") in connection with the Company's registration of 527,696 warrants
(the "Warrants") to purchase an aggregate of 1,030,656 shares of common stock
(the "Common Stock") of the Company and the Company's registration of the
issuance and subsequent resale of 1,030,656 shares of Common Stock (the
"Warrant Shares") that may be purchased upon the exercise of the Warrants.
We have examined originals or copies, certified or otherwise identified to
our satisfaction, of such documents, corporate records, certificates of
public officials and other instruments as we have deemed necessary or
advisable for the purpose of rendering this opinion.
Upon the basis of the foregoing, we are of the opinion that the Warrants
are valid and binding obligations of the Company and the Warrant Shares have
been duly authorized and, upon issuance against payment of the exercise
price therefor and in accordance with the terms of the Warrants, will be
validly issued, fully paid and non-assessable.
We are members of the Bar of the State of New York and the foregoing
opinion is limited to the laws of the State of New York, the federal laws of
the United States of America and the General Corporation Law of the State of
Delaware.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement relating to the Warrants and Warrant Shares. We also
consent to the reference to us under the caption "Legal Matters" in the
Prospectus contained in such Registration Statement.
<PAGE>
This opinion may not be relied upon by you for any other purpose or relied
upon or furnished to any other person without our prior written consent.
Very truly yours
/s/ Davis Polk & Wardwell
--------------------------------
2
<PAGE>
EXHIBIT 23.1
CONSENT OF KPMG PEAT MARWICK LLP
The Board of Directors
Price Communications Wireless, Inc.
(formerly Palmer Wireless, Inc.):
We consent to incorporation by reference in this registration statement on Form
S-3 of Price Communications Corporation of our report dated January 30, 1997,
relating to the consolidated balance sheet of Palmer Wireless, Inc. and
subsidiaries as of December 31, 1996, and the related consolidated statement of
operations, stockholders' equity, and cash flows for each of the years in the
two-year period ended December 31, 1996, which report appears in the December
31, 1997 annual report on Form 10-K of Price Communications Corporation and to
the reference to our firm under the heading "Experts" in the Form S-3.
/s/ KPMG PEAT MARWICK LLP
--------------------------------------
KPMG Peat Marwick LLP
Des Moines, Iowa
July 31, 1998
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated March 17, 1998
included in Price Communication Corporation's Form 10-K for the year ended
December 31, 1997 and to all references to our Firm included in this
registration statement.
/s/ ARTHUR ANDERSEN LLP
----------------------------------------
ARTHUR ANDERSEN LLP
New York, New YOrk
July 31, 1998
