As filed with the Securities and Exchange Commission on May 8, 1998
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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<TABLE>
<S> <C> <C>
PRICE COMMUNICATIONS
CORPORATION NEW YORK 13-2991700
(Exact name of Registrant as (State or other jurisdiction of (I.R.S. employer identification number)
specified in its charter) incorporation or organization)
</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)
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Copies to:
RICHARD D. TRUESDELL, JR. DAVIS POLK & WARDWELL
450 LEXINGTON AVENUE, NEW YORK, NEW YORK 10017 (212) 450-4000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this Registration Statement becomes effective.
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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>
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AMOUNT OF AGGREGATE AGGREGATE
TITLE OF EACH CLASS OF SECURITIES TO BE SECURITIES TO PRICE PER UNIT AMOUNT OF REGISTRATION
REGISTERED BE REGISTERED OFFERING PRICE FEE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Warrants to purchase common stock, par value
$0.01 per share............................. 153,400 warrants (1) (1) (1)
- -------------------------------------------------------------------------------------------------------------------------
Common stock par value $.01 per share (2).... 1,030,656 shares $12.65 13,012,032(3) 3,838.55
- -------------------------------------------------------------------------------------------------------------------------
Total....................................... $ 3,838.55
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- ----------
(1) No additional consideration will be paid by the purchasers of such
securities. Pursuant to Rule 457 under the Securities Act of 1933, no
separate fee is payable therefor.
(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 6.719 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.
</TABLE>
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE
WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE
COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),MAY DETERMINE.
==============================================================================
SUBJECT TO COMPLETION, DATED MAY 8, 1998
PROSPECTUS
MAY __, 1998
[PCC LOGO] 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 153,400 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:
each unit consisted of one 13 1/2% Series A Senior Secured Discount Note due
2007 and one warrant to purchase 6.719 shares of Common Stock at an exercise
price of $0.01, as adjusted. The Original Offering was made to certain
initial purchasers (the "Initial Purchasers") and 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
Company is responsible for payment of all other expenses incident to the offer
and sale of the Offered Securities, unless shares of Common Stock are issued
to any person other than the registered holder of the Warrants so exercised or
transferred]. 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 "Special note regarding forward looking statements" and
"risk factors" for a description of certain risk factors 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.
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.
Each Warrants 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 3.44 (currently
adjusted to 6.719) 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,"
the Boston Stock Exchange (the "BSE") under the symbol "PR.B," the Chicago
Stock Exchange (the "CSE") under the symbol "PR.m" and the Pacific Stock
Exchange ("PSE") under the symbol "PR.P." On May 7, 1998, the reported last
sale price of the Common Stock on the AMEX Composite Tape was $12.75 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.
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," the
Boston Stock Exchange (the "BSE") under the symbol "PR.B," the Chicago Stock
Exchange (the "CSE") under the symbol "PR.m" and the Pacific Stock Exchange
(the "PSE") under the symbol "PR.P." Reports, proxy statements and other
information filed by the Company may be inspected at the offices of the AMEX
and at the offices of the PSE at 301 Pine Street, San
Francisco, California 94104.
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: PCC's Annual Report on Form 10-K for
the year ended December 31, 1997.
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.
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.
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, PCW 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 December 31, 1997, the Company
provided cellular telephone service to 309,606 subscribers in Georgia, Alabama
and Florida 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.
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 seven-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 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.
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.
Securities Offered.................. 153,400 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................ 153,400
Common Stock Outstanding............ As of December 31, 1997, 6,994,435
shares of Common Stock were
outstanding. On April 30, 1998, the
Company paid a stock split in the form
of a 25% stock dividend.
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."
Description of the Warrants
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 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").
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.
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 and Liquidity.
The Company is highly leveraged which 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's only committed source of
liquidity is the New Credit Facility, under which $87 million of revolving
loans remain available. The Company expects to have sufficient availability
under the New Credit Facility to meet its liquidity needs for the next 12
months. The Company intends to use the availability under the New Credit
Facility for general corporate purposes and, if the Company's tax planning
strategy is unsuccessful, to finance the $50.5 million tax payment which may
be due with respect to the Fort Myers Sale and Georgia Sale. See "Notes to
Consolidated Financial Statements." Borrowings under the New Credit Facility
are 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 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 Discount Notes, the Senior Subordinated Notes or the New Credit
Facility will not restrict or prohibit any such debt financing.
The Company's ability to meet its debt service requirements
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 and borrowings under the New Credit Facility. 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. See "Description of New
Credit Facility" in the Company's Annual Report on Form 10-K.
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 New 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
New 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
New Credit Facility and/or other financing agreements and in the event of any
such default, the lenders under the New 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. See
"Description of New Credit Facility."
Net Losses.
For the second half of 1997, the Company incurred net losses of
approximately $9.5 million. There can be no assurance that the Company's
future operations will generate sufficient earnings to pay its obligations. The
Company expects to incur net losses for several years. See "Selected
Consolidated Financial Data" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations."
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 the
other licensee authorized to serve each cellular market in which the Company
operates, as well as from resellers of cellular service. Competition for
subscribers between cellular licensees 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 and paging services. 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. It
is expected that broadband PCS will involve 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 they
will offer, additional services not offered by cellular providers. PCS
subscribers could have dedicated personal telephone numbers and would
communicate using small digital radio handsets that could be 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,
such services and features. 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. See "--Competition."
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 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. See
"--Regulation."
Fluctuations in Market Value of License.
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 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 to market its services. The Company's use of this service mark is
governed by five-year contracts between the Company and Cellular One Group,
the owner of the service mark. See "-Description of Cellular One Agreements."
If these agreements are not renewed upon expiration and the Company therefore
is no longer permitted to use the CELLULARONE service mark, the Company's
ability both to attract new subscribers and to retain existing subscribers
could be materially affected. In addition, if for some reason beyond the
Company's control, the name CELLULARONE 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 service mark,
has significantly reduced its use of the service mark as a primary service
mark. There can be no assurance that such reduction in use by AT&T Wireless
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. Robert Price, a Director, the President, Chief Executive
Officer and Treasurer of PCC, also serves as a Director and Chairman of
PriCellular Corporation ("PriCellular"), another operator of cellular
telephone systems. The Company believes that Mr. Price's positions with the
Company and PriCellular complement one another and benefit both companies
because the systems they operate are similar but do not directly compete with
one another. Mr. Price's employment agreement with PriCellular provides that he
may not be an employee of or have an ownership interest in any company engaged
in the operation of cellular telephone systems in the United States other than
PriCellular and that any such other company may not acquire any additional
cellular telephone system within the United States, in each case, without the
unanimous consent of the executive committee of the Board of Directors of
PriCellular. The executive committee of the Board of Directors of PriCellular
has approved the acquisition of Palmer by PCC. Although the Company and
PriCellular historically have not imposed inconsistent demands on Mr. Price's
availability, there can be no assurances that such conflicts will not arise in
the future. In March 1998, PriCellular entered into an agreement to be sold.
Upon consummation of such sale, the restrictions imposed upon Mr. Price's
activities by said employment agreement would terminate.
PCW entered into employment contracts with William J. Ryan and
M. Wayne Wisehart to remain as officers of PCW and also entered into
employment contracts with other key employees of Palmer prior to the
consummation of the Acquisition. 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. Effective April 1, 1998, Mr. Ryan commenced
to serve as Chairman of the Board and Mr. Wisehart as President and Chief
Executive Officer of PCW.
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 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 million in umbrella liability coverage. This insurance would cover any
liability suits with respect to human exposure to radio frequency emissions.
The Company believes that this coverage is adequate to cover potential
liabilities.
Fraudulent Conveyance Statutes.
Various laws enacted for the protection of creditors may apply
to the incurrence of indebtedness and other obligations by the Company and
certain of its subsidiaries in connection with the acquisition of Palmer. If a
court were to find in a lawsuit by an unpaid creditor or representative of
creditors of the Company or any such subsidiary that the Company or such
subsidiary did not receive fair consideration or reasonably equivalent value
for incurring such indebtedness or other obligation and, at the time of such
incurrence, the Company or such subsidiary (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 or such
subsidiary 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 or
such subsidiary.
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 or a subsidiary thereof 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 become absolute and
matured. On the basis of the Company's historical financial information, its
recent operating history and other factors, the Company's management believes
that, after giving effect to indebtedness incurred in connection with the
acquisition of Palmer and the other related financings, the Company and its
subsidiaries will not be rendered insolvent, they will have sufficient capital
for the businesses in which they will be engaged and they will be able to pay
their debts as they mature; however, management has not obtained any
independent opinion regarding such issues. There can be no assurances as to
what standard a court would apply in making such determinations.
To the extent that a subsidiary is deemed to have undertaken
indebtedness or other obligations for the benefit of a parent corporation or
shareholder, such indebtedness or other obligation also may be subject to
review under relevant federal and state fraudulent conveyance and similar
statutes in a bankruptcy or reorganization case or a lawsuit by or on behalf
of creditors of such subsidiary. In such case, the analysis set forth above
would generally apply, except that the indebtedness or other obligation could
also be subject to the claim that, since the indebtedness or other obligation
was incurred for the benefit of the parent corporation or shareholder, the
obligations of the subsidiary thereunder were incurred for less than
reasonably equivalent value or fair consideration. A court could, among other
things, avoid the subsidiary's obligation or subordinate the obligation to
other indebtedness of the subsidiary.
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.
Potential Antitakeover Effect of Class A and Class B 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 and Series B 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 and Series B 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. In addition, the votes cast by such shares
of Preferred Stock (a total of 1,422,133 votes, or 13.9% of the total votes
cast by all outstanding shares of Common Stock and Preferred Stock as of April
1, 1998 (after giving effect to a five-for-four stock split of PCC Common
Stock, payable in the form of a stock dividend on April 1, 1998)) would make
it more difficult for a bidder to elect directors or enact shareholder
proposals opposed by management of the Company.
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.
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.
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 following table sets forth certain information as of
[ ], 1998, with respect to the number of Warrants and Warrant Shares
held by each Selling Security Holder. None of the Selling Security Holders
has a material relationship with the Company within the past three years other
than as a result of the ownership of the Warrants and the Warrant Shares
except as noted herein. The Warrants and the Warrant Shares offered by this
Prospectus may be offered form time to time by the Selling Security Holders
named below or their pledgees, donees, transferees, or other successors:
Security Holder
[to come]
The Selling Security Holders may offer all or some of the
Warrants that they hold and the Common Stock issuable upon the exercise of
such warrants pursuant to the offering contemplated by this Prospectus at
various times. Therefore, no estimate can be given as to the amount of
Warrants or Warrant Shares that will be held by the Selling Security Holders
upon completion of such offerings.
DESCRIPTION OF THE WARRANTS
General
In the Original Offering, PCC issued an aggregate of 153,400
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 6.719 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 the date hereof 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 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.
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 6,994,435 were outstanding as of December
31, 1997, 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, of which no shares are currently 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.
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.
The Board of Directors of PCC has also authorized the
designation of 4,130,000 shares of PIK Preferred Stock, 1,129,000 shares of
which are currently outstanding. Each share of PIK Preferred Stock has a
liquidation preference of $25.00 per share. The PIK Preferred Stock accrues
dividends payable in kind or in cash at an initial rate per annum of 15% of
the liquidation preference per share payable quarterly until January 15, 1998,
such rate to increase over and above the stated rate at a rate of 0.50% per
annum each quarter following January 15, 1998, subject to a maximum rate of
20% per annum plus certain additional dividends if applicable. PCC will be
required to redeem the PIK Preferred Stock on July 15, 2004. Holders of PIK
Preferred Stock do not currently vote with the Common Stock. However, PCC must
obtain the consent of a majority of the holders of PIK Preferred Stock before
it issues any capital stock that ranks on parity with PIK Preferred Stock or
it engages in acts that adversely affect their holders' rights. In addition,
holders of PIK Preferred Stock may elect two directors to the board of
directors during any period in which the dividend rate is greater than or
equal to 20% per annum of the liquidation preference 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.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
[ TO BE FILED BY AMENDMENT ]
LEGAL MATTERS
The validity of the Warrants and the Warrant Shares and certain
matters relating thereto and certain U.S. federal income taxation matters will
be passed on for the Company by Davis Polk & Wardwell, New York, New York.
EXPERTS
The consolidated financial statements and schedule of PCC, as
of December 31, 1997 and 1996 and the related consolidated statements of
operations, shareholders' equity and cash flows for each of the three years in
the period ended December 31, 1997 incorporated by reference herein, 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 herein, 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 sheets of Palmer Wireless, Inc. and
subsidiaries as of December 31, 1996 and the consolidated statements of
operations, stockholders' equity and cash flows for the year 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.
[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- ) 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.
Dated: Very truly yours,
--------------------------------
Name:
By:
----------------------------
(Authorized Signature)]
==============================================================================
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
Page
----
Available Information .................................................
Incorporation of Certain Documents
by Reference
Summary
Use of Proceeds.......................................................?
Plan of Distribution..................................................?
Selling Security Holders..............................................?
Description of Warrants...............................................?
Description of Capital Stock..........................................?
Certain Federal Income Tax Considerations ............................?
Legal Matters.........................................................?
Independent Public Accountants........................................?
Annex A - Notice of Transfer Pursuant
to Registration Statement...........................................A-1
==============================================================================
PRICE
COMMUNICATIONS
CORPORATION
Warrants
to Purchase
1,030,656 Shares
of Common Stock
and 1,030,656 Shares
of Common Stock,
$.01 par value per share
----------------------
PROSPECTUS
MAY , 1998
----------------------
==============================================================================
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:
SEC Registration Fee $ 3,838.55
Legal Fees and Expenses $ *
Accounting Fees and Expenses $ *
Miscellaneous $ *
--------
Total $ *
========
- ------------
* To be filed by amendment.
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.
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 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."
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE
REGISTRANT HAS DULY CAUSED THIS 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 MAY 8, 1998.
PRICE COMMUNICATIONS CORPORATION
By: /s/ Robert Price
-------------------------------------
ROBERT PRICE
DIRECTOR, PRESIDENT, CHIEF EXECUTIVE
OFFICER AND TREASURER
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints Robert Price, his true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement on Form S-1 including any amendment
increasing or decreasing the amount of the securities for which registration
is being sought or any registration statement for the same offering filed in
accordance with Rule 462(b) under the Act, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting upon said attorneys-in-fact and
agents, each of them, full power and authority to do and perform each and
every act and thing requisite or necessary to be done in and about the
premises, as fully and to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, or their or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933,
THIS REGISTRATION STATEMENT ON FORM S-3 HAS BEEN SIGNED BY THE FOLLOWING
PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Robert Price Director, President and Treasurer May 8, 1998
- -------------------------- (Principal Executive Officer,
ROBERT PRICE Financial Officer and Accounting
Officer)
/s/ Kim I. Pressman Executive Vice-President, May 8, 1998
- -------------------------- Secretary and Assistant Treasurer
KIM I. PRESSMAN (Principal Executive Officer)
Director May 8, 1998
- --------------------------
GEORGE E. CADGENE
/s/ Robert F. Ellsworth Director May 8, 1998
- --------------------------
ROBERT F. ELLSWORTH
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
4.1 Warrant Agreement dated as of August 11, 1997, between Price
Communications Holdings, Inc., Price Communications Corporationa
nd 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)
- ------------
+ to be filed by amendment
WARRANT AGREEMENT
Dated as of
August 11, 1997
between
PRICE COMMUNICATIONS CELLULAR HOLDINGS INC.
PRICE COMMUNICATIONS CORPORATION
and
BANK OF MONTREAL TRUST COMPANY,
as the Warrant Agent
-------------------------------------------------------------
Warrants for
Common Stock of
Price Communications Corporation
-------------------------------------------------------------
TABLE OF CONTENTS
Page
----
ARTICLE I. Definitions............................................. 2
SECTION 1.1 Definitions................................... 2
SECTION 1.2 Other Definitions............................. 5
SECTION 1.3 Rules of Construction......................... 6
ARTICLE II. Warrant Certificates.................................... 6
SECTION 2.1 Form of Warrant Certificates.................. 6
SECTION 2.2 Legends....................................... 7
SECTION 2.3 Execution and Delivery of Warrant Certificates 8
SECTION 2.4 Loss or Mutilation............................ 9
ARTICLE III. Exercise Terms......................................... 9
SECTION 3.1 Exercise Price................................ 9
SECTION 3.2 Exercise Period............................... 10
SECTION 3.3 Expiration.................................... 10
SECTION 3.4 Manner of Exercise............................ 10
SECTION 3.5 Issuance of Warrant Shares.................... 11
SECTION 3.6 Fractional Warrant Shares..................... 11
SECTION 3.7 Reservation of Warrant Shares................. 11
SECTION 3.8 Compliance with Law........................... 12
ARTICLE IV. Antidilution Provisions................................. 13
SECTION 4.1 Changes in Common Stock....................... 13
SECTION 4.2 Cash Dividends and Other Distributions........ 13
SECTION 4.3 Rights Issue.................................. 14
SECTION 4.4 Combination; Liquidation...................... 15
SECTION 4.5 Other Events.................................. 16
SECTION 4.6 Superseding Adjustment........................ 17
SECTION 4.7 Minimum Adjustment............................ 17
SECTION 4.8 Notice of Adjustment.......................... 18
SECTION 4.9 Notice of Certain Transactions................ 18
SECTION 4.10 Adjustment to Warrant Certificate............ 19
ARTICLE V. Transferability......................................... 19
SECTION 5.1 Transfer and Exchange of Warrants............. 19
SECTION 5.2 Registration of Transfers and Exchanges....... 21
SECTION 5.3 Surrender of Warrant Certificates............. 22
ARTICLE VI. Company's Special Right of Repurchase................... 23
SECTION 6.1................................................ 23
ARTICLE VII. Warrant Agent.......................................... 24
SECTION 7.1 Appointment of Warrant Agent................. 24
SECTION 7.2 Rights and Duties of Warrant Agent........... 24
SECTION 7.3 Individual Rights of Warrant Agent........... 26
SECTION 7.4 Warrant Agent's Disclaimer................... 26
SECTION 7.5 Compensation and Indemnity................... 26
SECTION 7.6 Successor Warrant Agent...................... 27
ARTICLE VIII. Miscellaneous.......................................... 29
SECTION 8.1 Company Resales.............................. 29
SECTION 8.2 SEC Reports and Other Information............ 29
SECTION 8.3 Persons Benefitting.......................... 29
SECTION 8.4 Rights of Holders............................ 29
SECTION 8.5 Amendment.................................... 29
SECTION 8.6 Notices...................................... 30
SECTION 8.7 Governing Law................................ 31
SECTION 8.8 Successors................................... 31
SECTION 8.9 Multiple Originals........................... 31
SECTION 8.10 Table of Contents............................ 32
SECTION 8.11 Severability................................. 32
SECTION 8.12 Further Assurances........................... 32
WARRANT AGREEMENT (this "Agreement") dated as of August 8,
1997, between PRICE COMMUNICATIONS CELLULAR HOLDINGS, INC. ("Holdings"),
PRICE COMMUNICATIONS CORPORATION, a New York corporation (together with its
permitted successors and assigns, the "Company"), and Bank of Montreal
Trust Company, as Warrant Agent (together with its permitted successors and
assigns, the "Warrant Agent").
WHEREAS, the Company, Holdings and Price Communications
Cellular, Inc. ("Cellular") have entered into a purchase agreement, dated July
31, 1997, with NatWest Capital Markets Limited ("NatWest") and Wasserstein
Perella Securities, Inc. (together with NatWest, the "Purchasers"), in which
Holdings has agreed to sell to the Purchasers 153,400 Units each consisting of
$1,000 aggregate principal amount at maturity of 13 1/2% Senior Secured
Discount Notes due 2007 (the "Notes") of Holdings and 3.44 Warrants (the
"Warrants"), each Warrant to purchase one share of Common Stock, par value
$.01 per share (the "Common Stock"), of the Company. The Notes will be issued
under an indenture dated as of August 11, 1997 (the "Indenture"), between
Cellular, Holdings and Bank of Montreal Trust Company, as trustee (the
"Trustee"). Each Warrant entitles the person in whose name the Warrant is
registered (each a "Holder"), upon exercise to receive from the Company, as
adjusted as provided herein, one fully paid and nonassessable share of Common
Stock at the Exercise Price (as defined in Section 3.1 herein); and
WHEREAS, the Notes will be detachable from the Warrants and
upon re-sale by the Purchasers will be immediately separated.
WHEREAS, the Company further desires the Warrant Agent to act on
behalf of the Company in connection with the issuances, division, transfer,
exchange, substitution and exercise of the Warrants, and the Warrant Agent is
willing to so act.
Each party agrees as follows for the benefit of the other party
and for the equal and ratable benefit of the holders of Warrants:
ARTICLE I.
Definitions
SECTION 1.1 Definitions. "Affiliate" of any specified Person
means (i) any other Person which, directly or indirectly, is controlling or
controlled by or under direct or indirect common control with such specified
Person, or (ii) any other Person who is a director or executive officer (A) of
such Person, (B) of any subsidiary of such specified Person, or (C) of any
Person described in clause (i) above. For purposes of this definition,
"control," when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing. Affiliate shall also mean any beneficial owner of shares
representing 10% or more of the total voting power of the Voting Stock (on a
fully diluted basis) of the Company or warrants to purchase such Voting Stock
(whether or not currently exercisable) and any Person who would be an
Affiliate of any such beneficial owner pursuant to the first sentence hereof.
"Board" means the Board of Directors of the Company or any
committee thereof duly authorized to act on behalf of such Board of Directors.
"Business Day" means each day that is not a Saturday, a Sunday
or a day on which banking institutions are not required to be open in New York
City or in the city where the Warrant Agent's principal corporate trust office
is located.
"Certificated Warrants" means certificated Warrants in fully
registered definitive form.
"Change of Control" shall have the meaning provided in the
Indenture provided that the Corporate Change shall not be deemed to be a
Change of Control.
"Combination" means an event in which the Company consolidates
with, merges with or into, or sells all or substantially all its property and
assets to another Person provided that the Corporate Change shall not be
deemed to be a Combination.
"Common Stock" has the meaning ascribed thereto in the preamble
to this Agreement.
"Corporate Change" shall mean a corporate change, subject to
approval of the Company's shareholders, pursuant to which the Company would
become a wholly owned subsidiary of the Holding Company in a transaction in
which each share of capital stock and each option and warrant to purchase
capital stock of the Company (including the Warrants) outstanding immediately
prior to the consummation of such Corporate Change will be automatically
converted into a share of capital stock, option or warrant, as the case may
be, in each case with identical rights and an identical economic interest in
the Holding Company.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the SEC pursuant thereto.
"Extraordinary Cash Dividend" means that portion, if any, of the
aggregate amount of all dividends or distributions (including by way of tender
or exchange offer to any of its equity holders) paid by the Company on its
Common Stock in any fiscal year that exceeds $1.0 million.
"Fair Market Value" means, with respect to any asset or
property, the price which could be negotiated in an arm's-length free market
transaction, for cash, between a willing seller and a willing buyer, neither
of whom is under undue pressure or compulsion to complete the transaction.
Fair Market Value will be determined, except as otherwise provided, (i) if
such property or asset has a Fair Market Value of less than $5 million, by any
Officer of the Company or (ii) if such property or asset has a Fair Market
Value in excess of $5 million, by a majority of the Board of Directors of the
Company and evidenced by a Board Resolution, dated within 30 days of the
relevant transaction.
"Holding Company" shall mean a newly organized holding company
with a substantially identical certificate of incorporation, by-laws and
capital structure to those of the Company immediately prior to the
consummation of the Corporate Change.
"Institutional Accredited Investor" shall mean an institutional
"accredited investor" (as defined in rule 501(a)(1), (2), (3) or (7) of
Regulation D under the Securities Act.
"Issue Date" means the date on which Warrants are initially
issued.
"Market Value" means, in respect of one share of the Common
Stock of the Company (i) the average closing price per share for such Common
Stock for the thirty consecutive trading days immediately prior to the
Triggering Date on the New York Stock Exchange or such other United States
national securities exchange on which such Common Stock is listed and
principally traded or, if such securities are not listed on any national
securities exchange, as reported by the Nasdaq Stock Market, Inc. or, if not
so reported by the Nasdaq Stock Market, Inc., the average of the high bid and
low asked quotations for one share of such Common Stock as reported by the
National Quotations Bureau Incorporated or similar organization or (ii) if the
closing price for such Common Stock cannot be calculated in the manner
specified in clause (i) at the relevant time, the Fair Market Value of one
share of such Common Stock (without giving effect to any discount for lack of
liquidity or to the fact that shares of such Common Stock may not be
registered under the Exchange Act) as of the Business Day immediately
preceding the Triggering Date as determined in an opinion letter delivered and
addressed to the Warrant Agent by an independent appraisal firm appointed by
the Company (or by a majority of the holders of the Warrants or related Warrant
Shares, as the case may be, if the Company fails to appoint one) reasonably
acceptable to the Warrant Agent.
"Merger" shall have the meaning provided in the Indenture.
"Officer" means the Chairman of the Board, the Chief Executive
Officer, the President, the Chief Financial Officer, any Executive Vice
President or the Treasurer of the Company.
"Parent" means any Person who beneficially owns, directly or
indirectly, all of the Voting Stock of the Company.
"Person" means any individual, corporation, company
(including any limited liability company), partnership, joint venture,
trust, unincorporated organization, government or any agency or political
subdivision thereof.
"Redeemable Stock" means, with respect to any Person, any
capital stock that by its terms (or by the terms of any security into which it
is convertible or exchangeable) or otherwise (i) matures or is mandatorily
redeemable pursuant to a sinking fund obligation or otherwise, (ii) is or may
become redeemable or repurchasable at the option of the holder thereof, in
whole or in part, or (iii) is convertible or exchangeable for indebtedness.
"Repurchase Price" means $8.00 per Warrant, subject to
adjustment as provided herein.
"Restricted Warrant" means a Restricted Certificated Warrant.
"Rule 144A" means Rule 144A under the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Triggering Date" shall mean the date on which a holder
exercises any Warrant pursuant to Article III.
"Voting Stock" means all classes of capital stock of such
corporation then outstanding and normally entitled to vote in the election of
directors.
"Warrant Shares" means the Common Stock (and other securities)
issuable upon the exercise of the Warrants.
SECTION 1.2 Other Definitions.
Defined in
Term Section
"Certificate Register".................. 5.1
"Company"............................... Recitals
"Exercise Price"........................ 3.1
"Expiration Date"....................... 3.2
"Holders"............................... Recitals
"Repurchase Date"....................... 6.1
"Successor Company"..................... 4.4(a)
"Warrants".............................. Recitals
"Warrant Agent"......................... Recitals
"Warrant Certificates".................. 2.1
SECTION 1.3 Rules of Construction. Unless the text otherwise
requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles as in effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including, without limitation; and
(v) words in the singular include the plural and words in
the plural include the singular.
ARTICLE II.
Warrant Certificates
SECTION 2.1 Form of Warrant Certificates. Certificates
representing the Warrants (the "Warrant Certificates") shall be in registered
form only and substantially in the form attached hereto as Exhibit A. The
Warrant Certificates shall be dated the date on which countersigned by the
Warrant Agent and shall have such insertions as are appropriate or required or
permitted by this Agreement and may have such letters, numbers or other marks
of identification and such legends and endorsements typed, stamped, printed,
lithographed or engraved thereon as the Company may deem appropriate and as
are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any law or with any rule or regulation pursuant
thereto, or to conform to usage. The Company shall approve the form of the
Warrant Certificates and any notation, legend or endorsement on them.
The terms and provisions contained in the form of the Warrant
Certificate annexed hereto as Exhibit A shall constitute, and are hereby
expressly made, a part of this Agreement.
The definitive Warrant Certificates shall be typed, printed,
lithographed or engraved or produced by any combination of these methods, all
as determined by the officer of the Company executing such Warrant
Certificates, as evidenced by such officer's execution of such Warrant
Certificates.
Pending the preparation of definitive Warrant Certificates,
temporary Warrant Certificates may be issued, which may be printed,
lithographed, typewritten, mimeographed or otherwise produced, and which will
be substantially of the tenor of the definitive Warrant Certificates in lieu
of which they are issued.
If temporary Warrant Certificates are issued, the Company will
cause definitive Warrant Certificates to be prepared without unreasonable
delay. After the preparation of definitive Warrant Certificates, the
temporary Warrant Certificates shall be exchangeable for definitive
Warrant Certificates upon surrender of the temporary Warrant Certificates
to the Warrant Agent, without charge to the Holder. Until so exchanged the
temporary Warrant Certificates shall in all respects be entitled to the
same benefits under this Agreement as definitive Warrant Certificates.
SECTION 2.2 Legends. Unless and until the Warrants and the
Warrant Shares are included in an effective registration statement under the
Securities Act, each Warrant Certificate (and all Warrant Certificates issued
in exchange therefor or substitution thereof) and each certificate
representing the Warrant Shares shall bear a legend in substantially the
following form (with any appropriate modification for the Warrant Shares):
THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT")
AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT
OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER (1)
REPRESENTS THAT (A) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE
SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR") OR (B) IT IS
NOT A U.S. PERSON, IS NOT ACQUIRING THIS SECURITY FOR THE ACCOUNT OR
BENEFIT OF A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (2)
AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD REFERRED TO UNDER RULE
144(k) (TAKING INTO ACCOUNT THE PROVISIONS OF RULE 144(d) UNDER THE
SECURITIES ACT, IF APPLICABLE) UNDER THE SECURITIES ACT AS IN EFFECT ON
THE DATE OF THE TRANSFER OF THIS SECURITY, RESELL OR OTHERWISE TRANSFER
THIS SECURITY EXCEPT (A) TO PRICE COMMUNICATIONS CORPORATION (THE
"COMPANY") OR ANY SUBSIDIARY THEREOF, (B) OUTSIDE THE UNITED STATES IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT,
(C) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE, BASED UPON AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY), (D) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR (E) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND
BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY) AND, IN EACH
CASE, IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, AND (3) AGREES
THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY OR AN INTEREST
HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S
PERSON" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER
THE SECURITIES ACT. THE WARRANT AGREEMENT CONTAINS A PROVISION REQUIRING
THE WARRANT AGENT TO REFUSE TO REGISTER TRANSFER OF THIS SECURITY IN
VIOLATION OF THE FOREGOING RESTRICTIONS.
SECTION 2.3 Execution and Delivery of Warrant Certificates.
Warrant Certificates evidencing Warrants to purchase initially an aggregate
of up to 527,696 Warrant Shares may be executed, on or after the Issue
Date, by the Company and delivered to the Warrant Agent for
countersignature, and the Warrant Agent shall thereupon countersign and
deliver such Warrant Certificates upon the written order and at the
direction of the Company to the purchasers thereof on the date of issuance.
The Warrant Agent is hereby authorized to countersign and deliver Warrant
Certificates as required by this Section 2.3 or by Section 2.4, 3.4, 5.3 or
5.4.
The Warrant Certificates shall be executed on behalf of the
Company by its President or any Executive Vice President or any Vice
President, either manually or by facsimile signature printed thereon. The
Warrant Certificates shall be countersigned manually by the Warrant Agent and
shall not be valid for any purpose unless so countersigned. In case any
officer of the Company whose signature shall have been placed upon any of the
Warrant Certificates shall cease to be such officer of the Company before
countersignature by the Warrant Agent and issuance and delivery thereof, such
Warrant Certificates may, nevertheless, be countersigned by the Warrant Agent
and issued and delivered with the same force and effect as though such person
had not ceased to be such officer of the Company.
SECTION 2.4 Loss or Mutilation. Upon receipt by the Company
and the Warrant Agent of evidence satisfactory to them of the ownership and
the loss, theft, destruction or mutilation of any Warrant Certificate and
of indemnity satisfactory to them and (in the case of mutilation) upon
surrender and cancellation thereof, then, in the absence of notice to the
Company or the Warrant Agent that the Warrants represented thereby have
been acquired by a bona fide purchaser, the Company shall execute and the
Warrant Agent shall countersign and deliver to the registered Holder of the
lost, stolen, destroyed or mutilated Warrant Certificate, in exchange for
or in lieu thereof, a new Warrant Certificate of the same tenor and for a
like aggregate number of Warrants. Upon the issuance of any new Warrant
Certificate under this Section 2.4, the Company may require the payment of
a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and other expenses (including the reasonable
fees and expenses of the Warrant Agent and of counsel to the Company) in
connection therewith. Every new Warrant Certificate executed and delivered
pursuant to this Section 2.4 in lieu of any lost, stolen or destroyed
Warrant Certificate shall constitute a contractual obligation of the
Company, whether or not the allegedly lost, stolen or destroyed Warrant
Certificates shall be at any time enforceable under applicable law, and
shall be entitled to the benefits of this Agreement equally and
proportionately with any and all other Warrant Certificates duly executed
and delivered hereunder. The provisions of this Section 2.4 are exclusive
and shall preclude (to the extent lawful) all other rights or remedies with
respect to the replacement of mutilated, lost, stolen or destroyed Warrant
Certificates.
ARTICLE III
Exercise Terms
SECTION 3.1 Exercise Price. Each Warrant shall initially
entitle the Holder thereof, subject to adjustment pursuant to the terms of
this Agreement, to purchase one share of Common Stock for an exercise price of
$0.01 per share of Common Stock (the "Exercise Price"). The Exercise Price
will be payable at the Holder's' option by certified or cashier's check
payable to the order of the Company, 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 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.
SECTION 3.2 Exercise Period. (a) Subject to the terms and
conditions set forth herein, the Warrants will be exercisable upon the earlier
to occur of (i) the consummation of the Merger (provided that if the Merger
does not occur prior to December 31, 1997, the Warrants will be subject to
special redemption as provided in Section 6.1) and (ii) the occurrence of a
Change of Control (the "Exercise Date").
(b) No Warrant shall be exercisable after 5:00 p.m., New
York City time, on August 1, 2007 (the "Expiration Date").
SECTION 3.3 Expiration. A Warrant shall terminate and become
void as of the earlier of (i) 5:00 p.m., New York City time on the Expiration
Date or (ii) the date such Warrant is exercised. The Company shall give
notice not less than 90, and not more than 120, days prior to the Expiration
Date to the Holders of all then outstanding Warrants to the effect that the
Warrants will terminate and become void as of the close of business on the
Expiration Date; provided, however, that notwithstanding that the Company may
fail to give notice as provided in this Section 3.3, the Warrants will
terminate and become void on the Expiration Date.
SECTION 3.4 Manner of Exercise. Warrants may be exercised upon
surrender to the Warrant Agent of the Warrant Certificates, together with the
form of election to purchase Common Stock on the reverse thereof duly filled
in and signed by the Holder thereof. Subject to Section 3.2, the rights
represented by the Warrants shall be exercisable at the election of the
Holders thereof either in full at any time or from time to time in part and in
the event that a Warrant Certificate is surrendered for exercise in respect of
less than all the Warrant Shares purchasable on such exercise at any time
prior to the expiration of the Exercise Period a new Warrant Certificate
exercisable for the remaining Warrant Shares will be issued. The Warrant
Agent shall countersign and deliver the required new Warrant Certificates, and
the Company, at the Warrant Agent's request, shall supply the Warrant Agent
with Warrant Certificates duly signed on behalf of the Company for such
purpose.
SECTION 3.5 Issuance of Warrant Shares. Upon the surrender of
Warrant Certificates, as set forth in Section 3.4, the Warrant Agent will
requisition from the Company, and the Company shall issue and cause the
transfer agent for the Common Stock ("Stock Transfer Agent") to countersign
and deliver to or upon the written order of the Holder and in such name or
names as the Holder may designate, a certificate or certificates for the
number of full Warrant Shares so purchased upon the exercise of such Warrants
or other securities or property to which it is entitled, registered or
otherwise, to the Person or Persons entitled to receive the same, together
with cash as provided in Section 3.6 in respect of any fractional Warrant
Shares otherwise issuable upon such exercise. Such certificate or
certificates shall be deemed to have been issued and any Person so designated
to be named therein shall be deemed to have become a holder of record of such
Warrant Shares as of the date of the surrender of such Warrant Certificates and
payment of the per share Exercise Price, as aforesaid.
SECTION 3.6 Fractional Warrant Shares. The Company shall
not be required to issue fractional Warrant Shares on the exercise of
Warrants. If more than one Warrant shall be exercised in full at the same
time by the same Holder, the number of full Warrant Shares which shall be
issuable upon such exercise shall be computed on the basis of the aggregate
number of Warrant Shares purchasable pursuant thereto. If any fraction of
a Warrant Share would, except for the provisions of this Section 3.6, be
issuable on the exercise of any Warrant (or specified portion thereof), the
Company shall pay an amount in cash equal to the Market Value for one
Warrant Share on the trading day immediately preceding the date the Warrant
is exercised, multiplied by such fraction, computed to the nearest whole
cent.
SECTION 3.7 Reservation of Warrant Shares. The Company
shall at all times keep reserved out of its authorized shares of Common
Stock, a number of shares of Common Stock sufficient to provide for the
exercise of all outstanding Warrants. The registrar for the Common Stock
(the "Registrar") shall at all times until the expiration of the Exercise
Period reserve such number of authorized shares as shall be required for
such purpose. The Company will keep a copy of this Agreement on file with
its Stock Transfer Agent. The Company will supply such Stock Transfer
Agent with duly executed stock certificates for such purpose and will
itself provide or otherwise make available any cash which may be payable as
provided in Section 3.6. The Company will furnish to such Stock Transfer
Agent a copy of all notices of adjustments and certificates related thereto
transmitted to each Holder.
Before taking any action which would cause an adjustment
pursuant to Article IV to reduce the Exercise Price below the then par value
(if any) of the Common Stock, the Company shall take any and all corporate
action which may, in the opinion of its counsel, be necessary in order that
the Company may validly and legally issue fully paid and nonassessable shares
of Common Stock at the Exercise Price as so adjusted.
The Company covenants that all shares of Common Stock which may
be issued upon exercise of Warrants will, upon issue, be fully paid,
nonassessable, free of preemptive rights, free from all taxes and free from
all liens, charges and security interests, created by or through the Company,
with respect to the issue thereof.
SECTION 3.8 Compliance with Law. (a) Notwithstanding
anything in this Agreement to the contrary, in no event shall a Holder be
entitled to exercise a Warrant, unless (i) a registration statement filed
under the Securities Act in respect of the issuance of the Warrant Shares
is then effective or (ii) in the opinion of counsel addressed to the
Warrant Agent and the Company an exemption from the registration
requirements is available under the Securities Act for the issuance of the
Warrant Shares (and the delivery of any other securities for which the
Warrants may at the time be exercisable) at the time of such exercise.
(b) If any shares of Common Stock required to be reserved for
purposes of exercise of Warrants require, under any other Federal or state law
or applicable governing rule or regulation of any national securities exchange,
registration with or approval of any governmental authority, or listing on any
such national securities exchange before such shares may be issued upon
exercise, the Company will in good faith and as expeditiously as possible
endeavor also to cause such shares to be duly registered or approved by such
governmental authority or listed on the relevant national securities exchange,
as the case may be.
ARTICLE IV.
Antidilution Provisions
SECTION 4.1 Changes in Common Stock. In the event that at any
time or from time to time the Company shall (i) pay a dividend or make a
distribution on its Common Stock in shares of its Common Stock or the right to
receive or convert into additional shares of Common Stock in each case, (ii)
subdivide its outstanding shares of Common Stock into a larger number of
shares of Common Stock, (iii) combine its outstanding shares of Common Stock
into a smaller number of shares of Common Stock, or (iv) increase or decrease
the number of shares of Common Stock outstanding by reclassification of its
Common Stock, then the number of shares of Common Stock purchasable upon
exercise of each Warrant immediately prior to the happening of such event
shall be adjusted so that, after giving effect to such adjustment, the holder
of each Warrant shall be entitled to receive the number of shares of Common
Stock upon exercise of such Warrant that such holder would have owned or have
been entitled to receive had such Warrants been exercised immediately prior to
the happening of the events described above (or, in the case of a dividend or
distribution of Common Stock, immediately prior to the record date therefor).
An adjustment made pursuant to this Section 4.1 shall become effective
immediately after the effective date, retroactive to the record date therefor
in the case of a dividend or distribution in shares of Common Stock, and shall
become effective immediately after the effective date in the case of a
subdivision, combination or reclassification.
SECTION 4.2 Cash Dividends and Other Distributions. In
case at any time or from time to time the Company shall distribute to
holders of Common Stock (i) any dividend or other distribution (including
any dividend or distribution made in connection with a consolidation or
merger in which the Company is the continuing corporation) of cash,
evidences of its indebtedness, assets, shares of its capital stock or any
other properties or securities or (ii) any options, warrants or other
rights to subscribe for or purchase any of the foregoing (other than, in
the case of clauses (i) and (ii) above, (x) any dividend or distribution
described in Section 4.1, (y) any rights, options, warrants or securities
described in Section 4.3 and (z) a cash dividend that is not an
Extraordinary Cash Dividend), then the number of shares of Common Stock
purchasable upon the exercise of each Warrant immediately after the record
date for the determination of stockholders entitled to receive such
dividend or distribution shall be increased to a number determined by
multiplying the number of shares of Common Stock purchasable upon the
exercise of such Warrant immediately prior to such record date for any such
dividend or distribution by a fraction, the numerator of which shall be the
Market Value per share of Common Stock as of the record date for such
distribution plus the fair market value (as determined by the Board of
Directors of the Company acting in good faith, whose determination shall be
evidenced by a board resolution, dated within 30 days of the relevant
record date) as of such record date of such Extraordinary Cash Dividend,
the evidences of indebtedness, shares of capital stock or other assets,
properties or securities, or any options, warrants or rights to subscribe
for or purchase any of the foregoing, to be dividended or distributed in
respect of one share of Common Stock, and the denominator of which shall be
such Market Value per share of Common Stock as of such record date; and the
Exercise Price shall be adjusted to a number determined by dividing the
Exercise Price immediately prior to such record date by the above fraction.
Such adjustments shall be made, and shall only become effective, whenever
any dividend or distribution is made; provided, however, that the Company
is not required to make an adjustment pursuant to this Section 4.2 if at
the time of such distribution the Company makes the same distribution to
Holders of Warrants as it makes to holders of Common Stock pro rata based
on the number of shares of Common Stock for which such Warrants are
exercisable (whether or not currently exercisable). No adjustment shall be
made pursuant to this Section 4.2 which shall have the effect of decreasing
the number of shares of Common Stock purchasable upon exercise of each
Warrant or increasing the Exercise Price.
SECTION 4.3 Rights Issue. In the event that at any time or
from time to time the Company shall issue rights, options or warrants to
acquire, or securities convertible or exchangeable into, Common Stock to
all holders of Common Stock, entitling such holders to subscribe for or
purchase shares of Common Stock at a price per share that is less than the
Market Value per share of Common Stock as of the record date for the
determination of stockholders entitled to receive such rights, options,
warrants or securities, the number of shares of Common Stock purchasable
upon the exercise of each Warrant immediately after such record date shall
be determined by multiplying the number of shares of Common Stock
purchasable upon exercise of each Warrant immediately prior to such record
date by a fraction, the numerator of which shall be the number of shares of
Common Stock outstanding on a fully-diluted basis as of the close of
business on the record date for the issuance of such rights, options,
warrants or securities plus the number of additional shares of Common Stock
offered for subscription or purchase or into which such securities are
convertible or exchangeable, and the denominator of which shall be the
number of shares of Common Stock outstanding on a fully-diluted basis as of
the close of business on the record date for the issuance of such rights,
options, warrants or securities plus the total number of shares of Common
Stock which the aggregate consideration expected to be received by the
Company upon the exercise, conversion or exchange of such rights, options,
warrants or securities (as determined by the Board of Directors of the
Company acting in good faith, whose determination shall be evidenced by a
board resolution) would purchase at the Market Value per share of Common
Stock as of the record date. In the event of any such adjustment, the
Exercise Price shall be adjusted to a number determined by dividing the
Exercise Price immediately prior to such date of issuance by the
aforementioned fraction. Such adjustment shall be made, and shall only
become effective, whenever such rights, options, warrants or securities are
issued. No adjustment shall be made pursuant to this Section 4.3 which
shall have the effect of decreasing the number of shares of Common Stock
purchasable upon exercise of each Warrant or of increasing the Exercise
Price. Notwithstanding the foregoing no adjustment will be made pursuant
to this Section 4.3 on account of any dividend or interest reinvestment
plan or any employee stock purchase plan providing for the purchase of
shares of Company Common Stock at a discount from the Market Value;
provided, however, that such plans shall have a valid business purpose.
SECTION 4.4 Combination; Liquidation. (a) Except as
provided in Section 4.4(b), in the event of a Combination, the Holders
shall 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 entitled to receive upon or as a result of such
Combination had such Warrant been exercised immediately prior to such
event. Unless paragraph (b) is applicable to a Combination or in the event
the Corporate Change is consummated, the Company shall provide that the
surviving or acquiring Person (the "Successor Company") in such Combination
or Corporate Change will enter into an agreement with the Warrant Agent
confirming the Holders' rights pursuant to this Agreement and providing for
adjustments, which shall be as nearly equivalent as may be practicable to
the adjustments provided for in this Article IV. The provisions of this
Section 4.4(a) shall similarly apply to successive Combinations involving
any Successor Company.
(b) In the event of (i) a Combination 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 the Company, 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.
In case of any Combination described in this Section 4.4(b),
the surviving or acquiring Person and, in the event of any dissolution,
liquidation or winding-up of the Company, the Company shall 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 shall make payment to the Holders 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 or Persons as it may be
directed in writing by the holders surrendering such Warrants.
SECTION 4.5 Other Events. (a) If any event occurs as to which
the foregoing provisions of this Article IV are not strictly applicable or, if
strictly applicable, would not, in the good faith judgment of the Board,
fairly and adequately protect the purchase rights of the Warrants in
accordance with the essential intent and principles of such provisions, then
such Board shall make such adjustments in the application of such provisions,
in accordance with such essential intent and principles, as shall be
reasonably necessary, in the good faith opinion of such Board, to protect such
purchase rights as aforesaid, but in no event shall any such adjustment have
the effect of increasing the Exercise Price or decreasing the number of shares
or aggregate percentage of Common Stock subject to purchase upon exercise of
this Warrant.
(b) In the event the Corporate Change is consummated: (i) the
Holding Company will comply with the second sentence of Section 4.4(a) and
will enter into an agreement with the Warrant Agent whereby it will expressly
assume all of the obligations of the Company in connection with the Warrants
and this Agreement and (ii) the Warrants will be automatically converted into
warrants with identical rights and an identical economic interest in the
Holding Company.
SECTION 4.6 Superseding Adjustment. Upon the expiration of
any rights, options, warrants or conversion or exchange privileges which
resulted in the adjustments pursuant to this Article IV, if any thereof
shall not have been exercised, the number of Warrant Shares purchasable
upon the exercise of each Warrant shall be readjusted as if (A) the only
shares of Common Stock issuable upon exercise of such rights, options,
warrants, conversion or exchange privileges were the shares of Common
Stock, if any, actually issued upon the exercise of such rights, options,
warrants or conversion or exchange privileges and (B) shares of Common
Stock actually issued, if any, were issuable for the consideration actually
received by the Company upon such exercise plus the aggregate
consideration, if any, actually received by the Company for the issuance,
sale or grant of all such rights, options, warrants or conversion or
exchange privileges whether or not exercised and the Exercise Price shall
be readjusted inversely; provided, however, that no such readjustment shall
(except by reason of an intervening adjustment under Section 4.1) have the
effect of decreasing the number, or aggregate percentage, of Warrant Shares
purchasable upon the exercise of each Warrant or increasing the Exercise
Price by an amount in excess of the amount of the adjustment initially made
in respect of the issuance, sale or grant of such rights, options, warrants
or conversion or exchange privileges.
SECTION 4.7 Minimum Adjustment. The adjustments required by
the preceding Sections of this Article IV shall be made whenever and as
often as any specified event requiring an adjustment shall occur, except
that no adjustment of the Exercise Price or the number of shares of Common
Stock purchasable upon exercise of Warrants that would otherwise be
required shall be made (except in the case of a subdivision or combination
of shares of Common Stock, as provided for in Section 4.1) unless and until
such adjustment either by itself or with other adjustments not previously
made increases or decreases by at least 1% of the number of shares of
Common Stock purchasable upon exercise of Warrants immediately prior to the
making of such adjustment. Any adjustment representing a change of less
than such minimum amount shall be carried forward and made as soon as such
adjustment, together with other adjustments required by this Article IV and
not previously made, would result in a minimum adjustment. For the purpose
of any adjustment, any specified event shall be deemed to have occurred at
the close of business on the date of its occurrence. In computing
adjustments under this Article IV, fractional interests in Common Stock
shall be taken into account to the nearest one-hundredth of a share.
SECTION 4.8 Notice of Adjustment. Whenever the Exercise
Price or the number of shares of Common Stock and other property, if any,
purchasable upon exercise of Warrants is adjusted, as herein provided, the
Company shall deliver to the Warrant Agent a certificate of a firm of
independent accountants selected by the Board (who may be the regular
accountants employed by the Company) setting forth, in reasonable detail,
the event requiring the adjustment and the method by which such adjustment
was calculated (including a description of the basis on which the Board of
Directors of the Company determined the fair market value of any evidences
of indebtedness, other securities or property or warrants or other
subscription or purchase rights), and specifying the Exercise Price and the
number of shares of Common Stock purchasable upon exercise of Warrants
after giving effect to such adjustment. The Company shall promptly cause
the Warrant Agent to mail a copy of such certificate to each Holder in
accordance with Section 8.6. The Warrant Agent shall be entitled to rely
on such certificate and shall be under no duty or responsibility with
respect to any such certificate, except to exhibit the same from time to
time, to any Holder desiring an inspection thereof upon reasonable notice
during business hours. The Warrant Agent shall not at any time be under
any duty or responsibility to any Holder to determine whether any facts
exist which may require any adjustment of the Exercise Price or the number
of shares of Common Stock or other stock or property, purchasable on
exercise of the Warrants, or with respect to the nature or extent of any
such adjustment when made, or with respect to the method employed in making
such adjustment or the validity or value of any shares of Common Stock.
SECTION 4.9 Notice of Certain Transactions. In the event that
the Company shall propose (a) to pay any dividend payable in securities of any
class to the holders of its Common Stock or to make any other distribution to
the holders of its Common Stock, (b) to offer the holders of its Common Stock
rights to subscribe for or to purchase any securities convertible into shares
of Common Stock or shares of stock of any class or any other securities,
rights or options, (c) to effect any capital reorganization, consolidation or
merger (including the Corporate Change) or (d) to effect the voluntary or
involuntary dissolution, liquidation or winding-up of the Company, the Company
shall within 5 days send to the Warrant Agent and the Warrant Agent shall
within 5 days send the Holders a notice (in such form as shall be furnished to
the Warrant Agent by the Company) of such proposed action or offer, such
notice to be mailed by the Warrant Agent to the Holders at their addresses as
they appear in the Certificate Register, which shall specify the record date
for the purposes of such dividend, distribution or rights, or the date such
issuance or event is to take place and the date of participation therein by
the holders of Common Stock, if any such date is to be fixed, and shall
briefly indicate the effect of such action on the Common Stock and on the
number and kind of any other shares of stock and on other property, if any,
and the number of shares of Common Stock and other property, if any,
purchasable upon exercise of each Warrant and the Exercise Price after giving
effect to any adjustment which will be required as a result of such action.
Such notice shall be given as promptly as possible and, in the case of any
action covered by clause (a) or (b) above, at least 20 days prior to the
record date for determining holders of the Common Stock for purposes of such
action and, in the case of any other such action, at least 30 days prior to
the date of the taking of such proposed action or the date of participation
therein by the holders of Common Stock, whichever shall be the earlier.
SECTION 4.10 Adjustment to Warrant Certificate. The form of
Warrant Certificate need not be changed because of any adjustment made
pursuant to this Article IV, and Warrant Certificates issued after such
adjustment may state the same Exercise Price and the same number of shares of
Common Stock as are stated in the Warrant Certificates initially issued
pursuant to this Agreement. The Company, however, may at any time in its sole
discretion make any change in the form of Warrant Certificate that it may deem
appropriate to give effect to such adjustments and that does not affect the
substance of the Warrant Certificate, and any Warrant Certificate thereafter
issued or countersigned, whether in exchange or substitution for an
outstanding Warrant Certificate or otherwise, may be in the form as so changed.
ARTICLE V.
Transferability
SECTION 5.1 Transfer and Exchange of Warrants. The Warrant
Certificates shall be issued in registered form only. The Warrant Agent shall
from time to time, subject to the limitations of Section 5.4, register the
transfer of any outstanding Warrants upon the records to be maintained by it
(the "Certificate Register") for that purpose, upon surrender thereof duly
endorsed or accompanied (if so required by it) by a written instrument or
instruments of transfer in form satisfactory to the Warrant Agent, duly
executed by the registered Holder or Holders thereof or by the duly appointed
legal representative thereof or by a duly authorized attorney. Subject to the
terms of this Agreement, each Warrant Certificate may be exchanged for another
certificate or certificates entitling the Holder thereof to purchase a like
aggregate number of Warrant Shares as the certificate or certificates
surrendered then entitle each Holder to purchase. Any Holder desiring to
exchange a Warrant Certificate or Certificates shall make such request in
writing delivered to the Warrant Agent, and shall surrender, duly endorsed or
accompanied (if so required by the Warrant Agent) by a written instrument or
instruments of transfer in form satisfactory to the Warrant Agent, the Warrant
Certificate or Certificates to be so exchanged.
Upon registration of transfer, the Warrant Agent shall
countersign and deliver by certified mail a new Warrant Certificate or
Certificates to the persons entitled thereto. The Warrant Certificates may be
exchanged at the option of the Holder thereof, when surrendered at the office
or agency of the Company maintained for such purpose, which initially will
be the corporate trust office of the Warrant Agent in New York, New York
for another Warrant Certificate, or other Warrant Certificates of different
denominations, of like tenor and representing in the aggregate the right to
purchase a like number of Warrant Shares. All Warrant Certificates issued
upon any registration of transfer or exchange of Warrant Certificates shall
be the valid obligations of the Company, evidencing the same obligations,
and entitled to the same benefit under this Agreement, as the Warrant
Certificates surrendered for such registration of transfer or exchange.
To permit registrations of transfer and exchanges, the Company
shall, upon request of the Warrant Agent, make available to the Warrant Agent
a sufficient number of executed Warrant Certificates to effect such
registrations of transfers and exchanges. No service charge shall be made
for any exchange or registration of transfer of Warrant Certificates, but
the Company may require payment of a sum sufficient to cover any stamp or
other tax or other governmental charge that is imposed in connection with
any such exchange or registration of transfer.
SECTION 5.2 Registration of Transfers and Exchanges.
(a) Transfer and Exchange. When Warrant Certificates are
presented to the Warrant Agent with a request:
(i) to register the transfer of the Warrants
Certificates; or
(ii) to exchange such Warrant Certificates for an
equal number of Warrant Certificates of other authorized
denominations, the Warrant Agent shall register the transfer
or make the exchange as requested if the requirements under
this Agreement as set forth in this Section 5.2 for such
transactions are met; provided, however, that the Warrant
Certificates presented or surrendered for registration of
transfer or exchange:
(I) shall be duly endorsed or accompanied by a
written instrument of transfer in form satisfactory to
the Warrant Agent, duly executed by the Holder thereof
or his attorney duly authorized in writing; and
(II) in the case of Warrants the offer and sale of
which have not been registered under the Securities Act
of 1933, as amended (the "Security Act"), such Warrants
shall be accompanied by the following additional
information and documents, as applicable:
(A) if such Warrant Certificates are being
delivered to the Warrant Agent by a holder
for registration in the name of such
holder, without transfer, a certification
from such holder to that effect (in
substantially the form of Exhibit B
hereto); or
(B) if such Warrant Certificates are being
transferred to an Institutional
Accredited Investor delivery of a
certification to that effect (in
substantially the form of Exhibit B
hereto) and a Transferee Certificate
for Institutional Accredited Investors
in substantially the form of Exhibit C
hereto; or
(C) if such Warrant Certificates are being
transferred in reliance on Regulation S
under the Securities Act ("Regulation
S"), delivery of a certification to
that effect (in substantially the form
of Exhibit B hereto) and a Transferee
Certificate for Regulation S Transfers
in substantially the form of Exhibit D
hereto and an Opinion of Counsel
reasonably satisfactory to the Company
to the effect that such transfer is in
compliance with the Securities Act; or
(D) if such Warrant Certificates are being
transferred in reliance on another
exemption from the registration
requirements of the Securities Act, a
certification to that effect (in
substantially the form of Exhibit B
hereto) and an opinion of counsel
reasonably satisfactory to the Company
to the effect that such transfer is in
compliance with the Securities Act.
(b) General. By its acceptance of any Warrants represented
by a Warrant Certificate bearing the legend in Section 2.2, each Holder of
such Warrants acknowledges the restrictions on transfer of such Warrants
set forth in this Agreement and in the legend and agrees that it will
transfer such Warrants only as provided in this Agreement. The Warrant
Agent shall not register a transfer of any Warrants unless such transfer
complies with the requirements of this Section 5.2.
(c) Records. The Warrant Agent shall retain copies of all
letters, notices and other written communications received pursuant to
Section 5.1 hereof or this Section 5.2. The Company shall have the right
to inspect and make copies of all such letters, notices or other written
communications at any reasonable time upon the giving of reasonable written
notice to the Warrant Agent.
SECTION 5.3 Surrender of Warrant Certificates. Any Warrant
Certificate surrendered for registration of transfer, exchange, exercise or
repurchase of the Warrants represented thereby shall, if surrendered to the
Company, be delivered to the Warrant Agent, and all Warrant Certificates
surrendered or so delivered to the Warrant Agent shall be promptly canceled by
the Warrant Agent and shall not be reissued by the Company and, except as
provided in this Article V in case of an exchange or in Article III hereof in
case of the exercise or repurchase of less than all the Warrants represented
thereby or in case of a mutilated Warrant Certificate, no Warrant Certificate
shall be issued hereunder in lieu thereof. The Warrant Agent shall deliver to
the Company from time to time or otherwise dispose of such canceled Warrant
Certificates as the Company may direct in writing.
ARTICLE VI.
Company's Special Right of Repurchase
SECTION 6.1 If the Merger is not consummated on or before
December 31, 1997 or if it appears, in the sole judgment of Holdings, that the
Merger will not be consummated by December 31, 1997, then, on, or at any time
prior to, December 31, 1997, the Company shall have the right to repurchase
the Warrants by paying to the Warrant Agent for the benefit of the Holders of
Warrants the Repurchase Price. Upon such payment, all the Warrants shall be
cancelled.
(a) Notice of Warrant Repurchase. As promptly as practicable
following December 31, 1997 or, at any time prior thereto, the date Holdings
determines that the Merger will not be consummated by December 31, 1997 (in
either case the "Repurchase Date") Holdings on behalf of the Company shall give
notice of the terms of the Warrant Repurchase (a "Repurchase Notice") to each
Holder, as of the Repurchase Date, of then outstanding Warrants. Each
Repurchase Notice: (i) shall be given by Holdings on behalf of the Company
directly to all Holders of the Warrants, with a copy to the Warrant Agent and
(ii) shall be given within five Business Days after the Repurchase Date and
shall specify (A) the manner in which Warrants shall be surrendered to the
Warrant Agent for repurchase by the Company, (B) the Repurchase Price at which
the Warrants will be repurchased by the Company, and (C) that payment of the
Repurchase Price will be made by the Warrant Agent.
(b) Payment for Warrants. (i) To receive payment for any
Warrants pursuant to this Section 6.1, each Holder thereof shall, except as
otherwise provided herein, surrender to the Warrant Agent the Warrant
Certificates evidencing such Holder's Warrants.
(ii) As promptly as practicable (and in any event within 10
days) following the Repurchase Date, the Company shall deposit with the
Warrant Agent funds sufficient to make payment for all unexercised
Warrants. After receipt of such deposit from the Company, the Warrant
Agent shall make payment to each Holder, by delivering a check in an amount
equal to the Repurchase Price for each Warrant surrendered by such Holder
in accordance with this Section 6.1, to such Person or Persons as it may be
directed in writing by any Holder surrendering Warrant Certificates, net of
any transfer taxes required to be paid in the event that the check is to be
delivered to a Person other than the Holder. Any funds not used to pay for
Warrants within one year after the Repurchase Date shall be promptly
returned to the Company and the Holders thereafter shall look solely to the
Company for payment for their Warrants.
(c) Compliance with Laws. Notwithstanding anything
contained in this Section 6.1, if Holdings or the Company is required to
comply with laws or regulations in connection with the making of the
Warrant Repurchase, such laws or regulations shall govern the making of
such Warrant Repurchase. Holdings shall immediately notify the Warrant
Agent in writing if any such laws or regulations shall require Holdings to
supplement or amend this Agreement or to modify or amend the procedures or
manner of such repurchase or any other provisions set forth herein and the
Warrant Agent shall not be responsible or liable for making any such
determination, complying with any such laws or regulations or for the
failure of the Company to so notify the Warrant Agent.
ARTICLE VIII.
Warrant Agent
SECTION 7.1 Appointment of Warrant Agent. The Company and
Holdings hereby appoint the Warrant Agent to act as agent for the Company and
Holdings in accordance with provisions of this Agreement and the Warrant Agent
hereby accepts such appointment.
SECTION 7.2 Rights and Duties of Warrant Agent. (a) Agent
for the Company and Holdings. In acting under this Warrant Agreement and
in connection with the Warrant Certificates, the Warrant Agent is acting
solely as agent of the Company and Holdings and does not assume any
obligation or relationship or agency or trust for or with any of the
Holders of Warrant Certificates or beneficial owners of Warrants.
(b) Counsel. The Warrant Agent may consult with counsel
satisfactory to it, and the advice of such counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in accordance with the advice of
such counsel.
(c) Documents. The Warrant Agent shall be protected and shall
incur no liability for or in respect of any action taken or thing suffered by
it in reliance upon any Warrant Certificate, notice, direction, consent,
certificate, affidavit, statement or other paper or document reasonably
believed by it to be genuine and to have been presented or signed by the
proper parties.
(d) No Implied Obligations. The Warrant Agent shall be
obligated to perform only such duties as are herein and in the Warrant
Certificates specifically set forth and no implied duties or obligations shall
be read into this Agreement or the Warrant Certificates against the Warrant
Agent. The Warrant Agent shall not be under any obligation to take any action
hereunder which may tend to involve it in any expense or liability for which
it does not receive indemnity if such indemnity is reasonably requested. The
Warrant Agent shall not be accountable or under any duty or responsibility for
the use by the Company of any of the Warrant Certificates countersigned by the
Warrant Agent and delivered by it to the Holders or on behalf of the Holders
pursuant to this Agreement or for the application by the Company of the
proceeds of the Warrants. The Warrant Agent shall have no duty or
responsibility in case of any default by the Company in the performance of its
covenants or agreements contained herein or in the Warrant Certificates or in
the case of the receipt of any written demand from a Holder with respect to
such default, including any duty or responsibility to initiate or attempt to
initiate any proceedings at law or otherwise.
(e) Not Responsible for Adjustments or Validity of Stock. The
Warrant Agent shall not at any time be under any duty or responsibility to any
Holder to determine whether any facts exist that may require an adjustment of
the number of shares of Common Stock purchasable upon exercise of each Warrant
or the Exercise Price, or with respect to the nature or extent of any
adjustment when made, or with respect to the method employed, or herein or in
any supplemental agreement provided to be employed, in making the same. The
Warrant Agent shall not be accountable with respect to the validity or value
of any shares of Common Stock or of any securities or property which may at
any time be issued or delivered upon the exercise of any Warrant or upon any
adjustment pursuant to Article IV, and it makes no representation with respect
thereto. The Warrant Agent shall not be responsible for any failure of the
Company or Holdings to make any cash payment or to issue, transfer or deliver
any shares of Common Stock or stock certificates upon the surrender of any
Warrant Certificate for the purpose of exercise or upon any adjustment
pursuant to Article IV, or to comply with any of the covenants of the Company
contained in Article IV.
SECTION 7.3 Individual Rights of Warrant Agent.
The Warrant Agent and any stockholder, director, officer or
employee of the Warrant Agent may buy, sell or deal in any of the Warrants or
other securities of the Company or Holdings or its affiliates or become
pecuniarily interested in transactions in which the Company or its affiliates
may be interested, or contract with or lend money to the Company or its
affiliates or otherwise act as fully and freely as though it were not the
Warrant Agent under this Agreement. Nothing herein shall preclude the Warrant
Agent from acting in any other capacity for the Company or for any other legal
entity.
SECTION 7.4 Warrant Agent's Disclaimer. The Warrant Agent
shall not be responsible for and makes no representation as to the validity
or adequacy of this Agreement or the Warrant Certificates and it shall not
be responsible for any statement in this Agreement or the Warrant
Certificates other than its countersignature thereon.
SECTION 7.5 Compensation and Indemnity. The Company agrees to
pay the Warrant Agent from time to time reasonable compensation for its
services and to reimburse the Warrant Agent upon request for all reasonable
out-of-pocket expenses incurred by it, including the reasonable compensation
and expenses of the Warrant Agent's counsel. The Company shall indemnify the
Warrant Agent against any loss, liability or expense (including reasonable
attorneys' fees and expenses) incurred by it without negligence or bad faith
on its part arising out of or in connection with the acceptance or performance
of its duties under this Agreement. The Warrant Agent shall notify the
Company promptly of any claim for which it may seek indemnity. The Company
need not reimburse any expense or indemnify against any loss or liability
incurred by the Warrant Agent through willful misconduct, negligence or bad
faith. The Company's payment obligations pursuant to this Section 7.5 shall
survive the termination of this Agreement.
To secure the Company's payment obligations under this
Agreement, the Warrant Agent shall have a lien prior to the Warrant Holders on
all money or property held or collected by the Warrant Agent.
SECTION 7.6 Successor Warrant Agent. (a) The Company To
Provide Warrant Agent. The Company agrees for the benefit of the Holders
that there shall at all times be a Warrant Agent hereunder until all the
Warrants have been exercised or are no longer exercisable.
(b) Resignation and Removal. The Warrant Agent may at any time
resign by giving written notice to the Company of such intention on its part,
specifying the date on which its desired resignation shall become effective;
provided, however, that such date shall not be less than 60 days after the
date on which such notice is given unless the Company otherwise agrees. The
Warrant Agent hereunder may be removed at any time by the filing with it of an
instrument in writing signed by or on behalf of the Company and specifying such
removal and the date when it shall become effective, which date shall not be
less than 30 days after such notice is given unless the Warrant Agent
otherwise agrees. Any removal under this Section 7.6 shall take effect upon
the appointment by the Company as hereinafter provided of a successor Warrant
Agent (which shall be a bank or trust company authorized under the laws of the
jurisdiction of its organization to exercise corporate trust powers) and
the acceptance of such appointment by such successor Warrant Agent.
(c) The Company To Appoint Successor. In case at any time the
Warrant Agent shall resign, or shall be removed, or shall become incapable of
acting, or shall be adjudged a bankrupt or insolvent, or shall commence a
voluntary case under the Federal bankruptcy laws, as now or hereafter
constituted, or under any other applicable Federal or state bankruptcy,
insolvency or similar law or shall consent to the appointment of or taking
possession by a receiver, custodian, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Warrant Agent or its property
or affairs, or shall make an assignment for the benefit of creditors, or shall
admit in writing its inability to pay its debts generally as they become due,
or shall take corporate action in furtherance of any such action, or a decree
or order for relief by a court having jurisdiction in the premises shall have
been entered in respect of the Warrant Agent in an involuntary case under the
Federal bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal or state bankruptcy, insolvency or similar law; or a decree
order by a court having jurisdiction in the premises shall have been entered
for the appointment of a receiver, custodian, liquidator, assignee, trustee,
sequestrator (or similar official) of the Warrant Agent or of its property or
affairs, or any public officer shall take charge or control of the Warrant
Agent or of its property or affairs for the purpose of rehabilitation,
conservation, winding up of or liquidation, a successor Warrant Agent,
qualified as aforesaid, shall be appointed by the Company by an instrument
in writing, filed with the successor Warrant Agent. Upon the appointment
as aforesaid of a successor Warrant Agent and acceptance by the successor
Warrant Agent of such appointment, the Warrant Agent shall cease to be
Warrant Agent hereunder; provided, however, that in the event of the
resignation of the Warrant Agent under this subsection (c), such
resignation shall be effective on the earlier of (i) the date specified in
the Warrant Agent's notice of resignation and (ii) the appointment and
acceptance of a successor Warrant Agent hereunder.
(d) Successor Expressly To Assume Duties. Any successor
Warrant Agent appointed hereunder shall execute, acknowledge and deliver to
its predecessor and to the Company an instrument accepting such appointment
hereunder, and thereupon such successor Warrant Agent, without any further
act, deed or conveyance, shall become vested with all the rights and
obligations of such predecessor with like effect as if originally named as
Warrant Agent hereunder, and such predecessor, upon payment of its charges
and disbursements then unpaid, shall thereupon become obligated to
transfer, deliver and pay over, and such successor Warrant Agent shall be
entitled to receive, all monies, securities and other property on deposit
with or held by such predecessor, as Warrant Agent hereunder.
(e) Successor by Merger. Any Person into which the Warrant
Agent hereunder may be merged or consolidated, or any Person resulting from
any merger or consolidation to which the Warrant Agent shall be a party, or
any Person to which the Warrant Agent shall sell or otherwise transfer all
or substantially all of its corporate trust business; provided that it
shall be qualified as aforesaid, shall be the successor Warrant Agent under
this Agreement without the execution or filing of any paper or any further
act on the part of any of the parties hereto.
ARTICLE VIII.
Miscellaneous
SECTION 8.1 Company Resales. The Company hereby agrees with
each Holder, that the Company shall not resell any Warrants or Warrant
Shares it acquires, by purchase or otherwise, except pursuant to an
effective registration statement.
SECTION 8.2 SEC Reports and Other Information.
Notwithstanding that the Company may not be subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, the Company shall,
for all periods ending after the date of this Warrant Agreement, file with
the SEC and thereupon provide the Warrant Agent and Holders with such
annual reports and such information, documents and other reports as are
specified in Sections 13 and 15(d) of the Exchange Act and applicable to a
U.S. corporation subject to such Sections, such information, documents and
other reports to be so filed and provided at the times specified for the
filing of such information, documents and reports under such Sections.
SECTION 8.3 Persons Benefitting. Nothing in this Agreement is
intended or shall be construed to confer upon any Person other than the
Company, the Warrant Agent and the Holders any right, remedy or claim under or
by reason of this agreement or any part hereof.
SECTION 8.4 Rights of Holders. Except as expressly
contemplated herein, Holders of unexercised Warrants are not entitled (i)
to receive dividends or other distributions, (ii) to receive notice of or
vote at any meeting of the stockholders, (iii) to consent to any action of
the stockholders, (iv) to exercise any preemptive right or to receive
notice of any other proceedings of the Company or (v) to exercise any other
rights whatsoever as stockholders of the Company.
SECTION 8.5 Amendment. This Agreement may be amended by the
parties hereto without the consent of any Holder for the purpose of curing any
ambiguity, or of curing, correcting or supplementing any defective provision
contained herein or making any other provisions with respect to matters or
questions arising under this Agreement as the Company and the Warrant Agent
may deem necessary or desirable; provided, however, that the Company
determines, and the Warrant Agent may rely on such determination, that such
action shall not affect adversely the rights of the Holders. Any amendment or
supplement to this Agreement that has a material adverse effect on the
interests of the Holders shall require the written consent of the Holders of a
majority of the then outstanding Warrants. The consent of each Holder
affected shall be required for any amendment pursuant to which the Exercise
Price would be increased or the number of Warrant Shares purchasable upon
exercise of Warrants would be decreased (other than pursuant to adjustments
provided in Article IV as of the Issue Date of the Warrants). In determining
whether the Holders of the required number of Warrants have concurred in any
direction, waiver or consent, Warrants owned by the Company or by any Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with the Company shall be disregarded and deemed not
to be outstanding, except that, for the purpose of determining whether the
Warrant Agent shall be protected in relying on any such direction, waiver or
consent, only Warrants which the Warrant Agent knows are so owned shall be so
disregarded. Also, subject to the foregoing, only Warrants outstanding at the
time shall be considered in any such determination.
SECTION 8.6 Notices. Any notice or communication shall be in
writing and delivered in Person or mailed by first-class mail addressed as
follows:
if to the Company:
Price Communications Corporation
45 Rockefeller Plaza, Suite 3200
New York, NY 10020
Attention: President
with a copy to:
Proskauer Rose LLP
1585 Broadway
New York, NY 10036
Attention: Peter G. Samuels
if to the Warrant Agent:
The Bank of Montreal Trust Company
77 Water Street, 4th Floor
New York, New York 10005
Attention: Corporate Trust Administration
The Company or the Warrant Agent by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed to a Holder shall be
mailed to the Holder at the Holder's address as it appears on the register
in which the Company shall provide for the registration of Warrants and
Warrant Shares and of transfers and exchanges of Warrants and Warrant
Shares and shall be sufficiently given if so mailed within the time
prescribed.
Failure to mail a notice or communication to a Holder or any
defect in it shall not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above, it is
duly given, whether or not the addressee receives it.
SECTION 8.7 Governing Law. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW
YORK AS APPLIED TO CONTRACTS MADE AND PERFORMED ENTIRELY WITHIN THE STATE
OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. THE
COMPANY, ON BEHALF OF ITSELF, HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF THE FEDERAL AND NEW YORK STATE COURTS LOCATED IN THE CITY
OF NEW YORK IN CONNECTION WITH ANY SUIT, ACTION OR PROCEEDING RELATED TO
THIS AGREEMENT OR ANY OF THE MATTERS CONTEMPLATED HEREBY, IRREVOCABLY
WAIVES ANY DEFENSE OF LACK OF PERSONAL JURISDICTION AND IRREVOCABLY AGREES
THAT ALL CLAIMS IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING MAY BE HEARD
AND DETERMINED IN ANY SUCH COURT. THE COMPANY, ON BEHALF OF ITSELF,
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER
APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
SECTION 8.8 Successors. All agreements of the Company in this
Agreement and the Warrant Certificates shall bind its successors. All
agreements of the Warrant Agent in this Agreement shall bind its successors.
SECTION 8.9 Multiple Originals. The parties may sign any
number of copies of this Agreement. Each signed copy shall be an original,
but all of them together represent the same agreement. One signed copy is
enough to prove this Agreement.
SECTION 8.10 Table of Contents. The table of contents and
headings of the Articles and Sections of this Agreement have been inserted for
convenience of reference only, are not intended to be considered a part hereof
and shall not modify or restrict any of the terms or provisions hereof.
SECTION 8.11 Severability. The provisions of this Agreement
are severable, and if any clause or provision shall be held invalid,
illegal or unenforceable in whole or in part in any jurisdiction, then such
invalidity or unenforceability shall affect in that jurisdiction only such
clause or provision, or part thereof, and shall not in any manner affect
such clause or provision in any other jurisdiction or any other clause or
provision of this Agreement in any jurisdiction.
SECTION 8.12 Further Assurances. From time to time on and
after the date hereof, the Company shall deliver or cause to be delivered
to the Warrant Agent such further documents and instruments and shall do
and cause to be done such further acts as the Warrant Agent shall
reasonably request (it being understood that the Warrant Agent shall have
no obligation to make such request) to carry out more effectively the
provisions and purposes of this Agreement, to evidence compliance herewith
or to assure itself that it is protected hereunder.
IN WITNESS WHEREOF, the parties have caused this Agreement
to be duly executed as of the date first written above.
PRICE COMMUNICATIONS CORPORATION
By:
------------------------------------
Name:
Title:
PRICE COMMUNICATIONS CELLULAR
HOLDINGS INC.
By:
------------------------------------
Name:
Title:
BANK OF MONTREAL TRUST COMPANY,
By:
------------------------------------
Name:
Title:
EXHIBIT A
---------
[FORM OF FACE OF WARRANT CERTIFICATE]
THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT")
AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT
OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER (1)
REPRESENTS THAT (A) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE
SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR") OR (B) IT IS
NOT A U.S. PERSON, IS NOT ACQUIRING THIS SECURITY FOR THE ACCOUNT OR
BENEFIT OF A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (2)
AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD REFERRED TO UNDER RULE
144(k) (TAKING INTO ACCOUNT THE PROVISIONS OF RULE 144(d) UNDER THE
SECURITIES ACT, IF APPLICABLE) UNDER THE SECURITIES ACT AS IN EFFECT ON
THE DATE OF THE TRANSFER OF THIS SECURITY, RESELL OR OTHERWISE TRANSFER
THIS SECURITY EXCEPT (A) TO PRICE COMMUNICATIONS CORPORATION (THE
"COMPANY") OR ANY SUBSIDIARY THEREOF, (B) OUTSIDE THE UNITED STATES IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT,
(C) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE, BASED UPON AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY), (D) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR (E) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND
BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY) AND, IN EACH
CASE, IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, AND (3) AGREES
THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY OR AN INTEREST
HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S
PERSON" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER
THE SECURITIES ACT. THE WARRANT AGREEMENT CONTAINS A PROVISION REQUIRING
THE WARRANT AGENT TO REFUSE TO REGISTER TRANSFER OF THIS SECURITY IN
VIOLATION OF THE FOREGOING RESTRICTIONS.
No. [ ] Certificate for _______ Warrants
WARRANTS TO PURCHASE COMMON STOCK OF
PRICE COMMUNICATIONS CORPORATION
THIS CERTIFIES THAT, [ ], or its
registered assigns, is the registered holder of the number of Warrants set
forth above (the "Warrants"). Each Warrant entitles the holder thereof (the
"Holder"), at its option and subject to the provisions contained herein and in
the Warrant Agreement referred to below, to purchase from Price Communications
Corporation, a New York corporation ("the Company"), one share of Common
Stock, $0.01 par value, of the Company (the "Common Stock") at the per share
exercise price of $0.01 (the "Exercise Price"). This Warrant Certificate
shall terminate and become void as of the close of business on August 1, 2007
(the "Expiration Date") or upon the exercise hereof as to all the shares of
Common Stock subject hereto. The number of shares purchasable upon exercise
of the Warrants and the Exercise Price per share shall be subject to
adjustment from time to time as set forth in the Warrant Agreement.
This Warrant Certificate is issued under and in accordance with
a Warrant Agreement dated as of August 7, 1997 (the "Warrant Agreement"),
between the Company and The Bank of Montreal Trust Company (the "Warrant
Agent," which term includes any successor Warrant Agent under the Warrant
Agreement), and is subject to the terms and provisions contained in the
Warrant Agreement, to all of which terms and provisions the Holder of this
Warrant Certificate consents by acceptance hereof. The Warrant Agreement is
hereby incorporated herein by reference and made a part hereof. Reference is
hereby made to the Warrant Agreement for a full statement of the respective
rights, limitations of rights, duties and obligations of the Company, the
Warrant Agent and the Holders of the Warrants. Capitalized terms used but not
defined herein shall have the meanings ascribed thereto in the Warrant
Agreement. A copy of the Warrant Agreement may be obtained for inspection by
the Holder hereof upon written request to the Warrant Agent at Bank of
Montreal Trust Company, 77 Water Street, New York, New York 10005, attention
of Corporate Trust Administration.
Subject to the terms of the Warrant Agreement, the Warrants may
be exercised in whole or in part by presentation of this Warrant Certificate.
As provided in the Warrant Agreement and subject to the terms
and conditions therein set forth, the Warrants shall be exercisable at any
time or from time to time on any Business Day only on or after the earlier to
occur of (i) the consummation of the Merger (as defined in the Warrant
Agreement) (provided that if the Merger does not occur prior to December 31,
1997, the Warrants will be subject to the Company's special right of
repurchase, as provided in the Warrant Agreement) and (ii) the occurrence of a
Change of Control (as defined in the Warrant Agreement); provided, however,
that no Warrant shall be exercisable after August 1, 2007.
In the event the Company enters into a Combination (as defined
in the Warrant Agreement), the Holder hereof will be entitled to receive the
shares of capital stock or other securities or other property of such
surviving entity as the Holder would have received had the Holder exercised
its Warrants immediately prior to such Combination; provided, however, that in
the event that, in connection with such Combination, consideration to holders
of Common Stock in exchange for their shares is payable solely in cash or in
the event of the dissolution, liquidation or winding-up of the Company, the
Holder hereof will be entitled to receive cash distributions as the Holder
would have received had the Holder exercised its Warrants immediately prior to
such Combination.
The Company may require payment of a sum sufficient to pay all
taxes, assessments or other governmental charges in connection with the
transfer or exchange of the Warrant Certificates pursuant to Section 5.2 of
the Warrant Agreement but not for any exchange or original issuance (not
involving a transfer) with respect to temporary Warrant Certificates, the
exercise of the Warrants or the Warrant Shares.
Upon any partial exercise of the Warrants, there shall be
countersigned and issued to the Holder hereof a new Warrant Certificate in
respect of the shares of Common Stock as to which the Warrants shall not have
been exercised. This Warrant Certificate may be exchanged at the office of
the Warrant Agent by presenting this Warrant Certificate properly endorsed
with a request to exchange this Warrant Certificate for other Warrant
Certificates evidencing an equal number of Warrants. No fractional Warrant
Shares will be issued upon the exercise of the Warrants, but the Company shall
pay an amount in cash equal to the Market Value for one Warrant Share on the
trading day immediately preceding the date the Warrant is exercised,
multiplied by the fraction of a Warrant Share that would be issuable on the
exercise of any Warrant.
All shares of Common Stock issuable by the Company upon the
exercise of the Warrants shall, upon such issue, be duly and validly issued
and fully paid and nonassessable.
The Holder in whose name the Warrant Certificate is registered
may be deemed and treated by the Company and the Warrant Agent as the absolute
owner of the Warrant Certificate for all purposes whatsoever and neither the
Company nor the Warrant Agent shall be affected by notice to the contrary.
The Warrants do not entitle any holder hereof to any of the
rights of a stockholder of the Company.
This Warrant Certificate shall not be valid or obligatory
for any purpose until it shall have been countersigned by the Warrant
Agent.
PRICE COMMUNICATIONS CORPORATION
By:
------------------------------------
Title:
DATED:
Countersigned:
BANK OF MONTREAL TRUST COMPANY
By:
------------------------------------
Authorized Signatory
EXHIBIT B
---------
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF WARRANTS
Re: Warrants to purchase
Common Stock (the "Securities"), of
Price Communications Corporation
-----------------------------------
This Certificate relates to __________ Securities held in the
form of Warrant Certificates by ____________ (the "Transferor").
The Transferor:*
/ / has requested that the Warrant Agent by written order to
exchange or register the transfer of a Warrant Certificate or Warrant
Certificates.
In connection with such request and in respect of each such
Security, the Transferor does hereby certify that the Transferor is familiar
with the Warrant Agreement relating to the above captioned Securities and the
restrictions on transfers thereof as provided in Section 5 of such Warrant
Agreement, and that the transfer of these Securities does not require
registration under the Securities Act of 1933, as amended (the "Act") because*:
/ / Such Security is being acquired for the Transferor's own
account, without transfer.
/ / Such Security is being transferred to an institutional
"accredited investor" (within the meaning of subparagraphs (a)(1), (2), (3) or
(7) of Rule 501 under the Act.
/ / Such Security is being transferred in reliance on
Regulation S under the Act.
/ / Such Security is being transferred in reliance on Rule 144
under the Act.
/ / Such Security is being transferred in reliance on and in
compliance with an exemption from the registration requirements of the Act
other than Rule 144A or Rule 144 or Regulation S under the Act to a person
other than an institutional "accredited investor."
------------------------------------
(INSERT NAME OF TRANSFEROR)
By:
--------------------------------
(Authorized Signatory)
Date:
- -------------------------
*Check applicable box.
EXHIBIT C
---------
Form of Certificate to Be
Delivered in Connection with
Transfers to Institutional Accredited Investors
[Date]
Bank of Montreal Trust Company
77 Water Street
New York, New York 10005
Attention: Corporate Trust Administration
Re: Price Communications Corporation
(the "Company") Warrants to purchase
Common Stock (the "Securities")
------------------------------------
Ladies and Gentlemen:
In connection with our proposed purchase of Securities, of the
Company, we confirm that:
(1) We have received such information as we deem necessary in
order to make our investment decision.
(2) We understand that any subsequent transfer of the
Securities is subject to certain restrictions and conditions set forth in
the Warrant Agreement and the undersigned agrees to be bound by, and not to
resell, pledge or otherwise transfer the Securities except in compliance
with, such restrictions and conditions and the Securities Act of 1933, as
amended (the "Securities Act").
(3) We understand that the offer and sale of the Securities
have not been registered under the Securities Act, and that the Securities
may not be offered or sold within the United States or to, or for the
account or benefit of, U.S. persons except as permitted in the following
sentence. We agree, on our own behalf-and on behalf of any accounts for
which we are acting as hereinafter stated, that if we should sell any
Securities, we will do so only (A) to the Company or any subsidiary
thereof, (B) inside the United States to an institutional "accredited
investor" (as defined below) that, prior to such transfer, furnishes (or
has furnished on its behalf by a U.S. broker-dealer) to the Warrant Agent a
signed letter substantially in the form hereof, (C) outside the United
States in accordance with Regulation S under the Securities Act, (D)
pursuant to the exemption from registration provided by Rule 144 under the
Securities Act (if available), or (E) pursuant to an effective registration
statement under the Securities Act, and we further agree to provide to any
person purchasing Securities from us a notice advising such purchaser that
resales of the Securities are restricted as stated herein.
(4) We understand that, on any proposed resale of
Securities, we will be required to furnish to the Warrant Agent and the
Company, such certification, legal opinions and other information as the
Warrant Agent and the Company may reasonably require to confirm that the
proposed sale complies with the foregoing restrictions. We further
understand that the Securities purchased by us will bear a legend to the
foregoing effect.
(5) We are an institutional "accredited investor" (as
defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the
Securities Act) and have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of our
investment in the Securities, and we and any accounts for which we are
acting are each able to bear the economic risk of our or their investment,
as the case may be.
6. We are acquiring the Securities purchased by us for our
account or for one or more accounts (each of which is an institutional
"accredited investor") as to each of which we exercise sole investment
discretion.
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.
Very truly yours,
(Name of Transferor)
By:
----------------------------
(Authorized Signatory)
EXHIBIT D
---------
Form of Certificate to Be
Delivered in Connection
with Regulation S Transfers
[Date]
Bank of Montreal Trust Company
77 Water Street
New York, New York 10005
Attention: Corporate Trust Administration
Re: Price Communications Corporation
(the "Company") Warrants to purchase
Common Stock (the "Securities")
------------------------------------
Dear Sirs:
In connection with our proposed sale of ________ of the
Securities, we confirm that such sale has been effected pursuant to and in
accordance with Regulation S under the Securities Act of 1933, as amended (the
"Securities Act"), and, accordingly, we represent that:
1. the offer of the Securities was not made to a person in the
United States;
2. either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on our
behalf reasonably believed that the transferee was outside the United States,
or (b) the transaction was executed in, on or through the facilities of a
designated off-shore securities market and neither we nor any person acting on
our behalf knows that the transaction has been prearranged with a buyer in the
United States;
3. no directed selling efforts have been made in the United
States in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable;
4. the transaction is not part of a plan or scheme to evade
the registration requirements of the Securities Act; and
5. we have advised the transferee of the transfer restrictions
applicable to the Securities.
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official
inquiry with respect to the matters covered hereby. Defined terms used herein
without definition have the respective meanings provided in Regulation S.
Very truly yours,
(Name of Transferor)
By:
----------------------------
(Authorized Signatory)
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
statements 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 heading
"Experts" in the Form S-3.
KPMG Peat Marwick LLP
Des Moines, Iowa
May 8, 1998
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.
ARTHUR ANDERSEN LLP
New York, New York
May 8, 1998
