Registration No. 33-58607
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 2 TO
FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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PEOPLES TELEPHONE COMPANY, INC.
(Exact name of registrant as specified in its charter)
NEW YORK 13-2626435
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
2300 N.W. 89th Place, Miami, Florida 33172
(Address of principal executive offices) (Zip Code)
Robert D. Rubin copy to:
President Ira N. Rosner, P.A.
Peoples Telephone Company, Inc. Steel Hector & Davis
2300 N.W. 89th Place 200 South Biscayne Boulevard
Miami, Florida 33172 Suite 4000
(305) 593-9667 Miami, Florida 33131-2398
(Name, address, including ZIP Code, (305) 577-2919
and telephone number, including
area code, of agent for service)
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 offered only in connection with dividend or interest
reinvestment plans, please check the following box. [X]
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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.
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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.
SUBJECT TO COMPLETION, DATED JULY 28, 1995
PROSPECTUS
1,585,076 SHARES
PEOPLES TELEPHONE COMPANY, INC.
COMMON STOCK
All of the 1,585,076 shares of common stock, par value $.01 per share (the
"Common Stock") of Peoples Telephone Company, Inc. (the "Company") offered
hereby are being sold by certain shareholders of the Company (collectively, the
"Selling Shareholders"). The Company will receive none of the proceeds from the
sale of shares offered hereby. See "Selling Shareholders." The Common Stock is
included in the National Market System of the National Association of Securities
Dealers, Inc., under the symbol PTEL.
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SEE "RISK FACTORS" (PAGE 4) FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND 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.
It is anticipated that the Selling Shareholders may sell the shares of Common
Stock offered hereby from time to time in open market transactions or privately
negotiated sales that may be based primarily on market prices. On July 24, 1995,
the last reported sale price of the Common Stock in the NASDAQ National Market
System was $4.25 per share. The Selling Shareholders may engage the services of
brokers or other agents to arrange for the sale of the shares offered hereby.
The Company has agreed to indemnify the Selling Shareholders against certain
liabilities, including liabilities under the Securities Act of 1933, as amended
(the "Securities Act"). See "Plan of Distribution." Although the Company will
receive none of the proceeds from the sale of shares offered hereby, the Company
is contractually obligated to bear the expenses of this Offering, estimated at
$50,000.
THE DATE OF THIS PROSPECTUS IS JULY __, 1995.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Exchange
Act of 1934, as amended (the "Exchange Act"), and in accordance therewith, files
reports, proxy and information statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports 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 450 Fifth
Street, N.W., Washington, D.C. 20549, and are also available for inspection and
copying at the regional offices of the Commission located at 500 West Madison
Street, Chicago, Illinois 60661 and at 7 World Trade Center, New York, New York
10048. Copies of such information can also be obtained in person from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549 at prescribed rates.
This Prospectus constitutes part of a Registration Statement on Form S-3
(together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act, filed by the Company with the Commission.
This Prospectus does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. For further information, reference
is made to the Registration Statement, which may be examined without charge at
the public reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549. Copies thereof may be obtained from the
Commission upon payment of the prescribed fees.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following Company documents filed with the Commission are incorporated
by reference in this Prospectus:
(1) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994, as amended by the Form 10-K/A No. 1, Form 10-K/A
No. 2 and Form 10-K/A No. 3 relating thereto.
(2) The Company's Quarterly Report on Form 10-Q for the quarter ended March
31, 1995, as amended by the Form 10-Q/A No. 1 and Form 10-Q/A No. 2
relating thereto.
(3) The Company's Current Report on Form 8-K dated February 15, 1995, as
amended by the Form 8-K/A No. 1 and Form 8-K/A No. 2 relating thereto.
(4) The Company's Form 10-Q/A No. 1 and Form 10-Q/A No. 2 relating to the
Company's Quarterly Report on Form 10-Q for the quarter ended March 31,
1994.
(5) The Company's Form 10-Q/A No. 1 and Form 10-Q/A No. 2 relating to the
Company's Quarterly Report on Form 10-Q for the quarter ended June 30,
1994.
(6) The Company's Current Report on Form 8-K dated May 10, 1995.
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(7) The Company's Current Report on Form 8-K dated June 19, 1995.
(8) The Company's Current Report on Form 8-K dated July 19, 1995.
(9) The Company's Form 8-K/A No. 2 relating to the Company's Current Report
on Form 8-K dated June 23, 1994.
(10) Proxy Statement dated July 25, 1995 for the Annual Meeting of
Shareholders to be held on August 25, 1995.
All documents filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the Common Stock
covered by this Prospectus shall be deemed to be incorporated by reference
herein and to be a part hereof from the date of filing such documents. Any
statement contained herein, in a Prospectus Supplement 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, in a Prospectus Supplement or in any subsequently
filed document which is incorporated by reference herein modifies or supersedes
such statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The description of the Common Stock contained in the Company's Registration
Statement on Form 10 dated January 20, 1988 (Commission File No. 0-16479), as
filed with the Commission under the Exchange Act, including any amendments or
reports filed after the date of this Prospectus for the purpose of updating such
description, is hereby incorporated by reference into this Prospectus and shall
be deemed a part hereof.
The Company will provide without charge to each person to whom a copy of this
Prospectus has been delivered, on the written or oral request of such person, a
copy of any or 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 unless such exhibits are specifically incorporated by reference in
such documents. Written or oral requests should be directed to Bonnie S. Biumi
at the principal executive office of the Company at 2300 N.W. 89th Place, Miami,
Florida 33172; telephone number (305) 593-9667.
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RISK FACTORS
Each prospective purchaser of the shares of Common Stock offered hereby should
carefully examine all information contained in this Prospectus and should give
particular consideration to the following factors before deciding to purchase
such shares.
LEVERAGED POSITION OF THE COMPANY; PLEDGED ASSETS; ABILITY TO SATISFY DEBT
SERVICE; RESTRICTIONS IMPOSED BY LENDERS
During July, 1995, the Company completed a refinancing of its bank and other
acquisition related debt (approximately $103.7 million in the aggregate) by
repaying such debt with the proceeds of the sale of $100.0 million aggregate
principal amount of the Company's 12-1/4% Senior Notes due 2002 (the "Senior
Notes") and the sale of 150,000 shares of the Company's Series C Cumulative
Convertible Preferred Stock (the "Preferred Stock") for $15.0 million.
Simultaneously with the sale of the Senior Notes and the Preferred Stock, the
Company also entered into a Fourth Amended and Restated Loan and Security
Agreement, dated as of July 19, 1995 (the "New Credit Agreement"), with
Creditanstalt-Bankverein ("Creditanstalt"), which replaced the Company's prior
credit agreements with Creditanstalt and certain other lenders (collectively,
the "Prior Credit Agreement").
During 1994, the Company's total interest expense amounted to $7.9 million.
The majority of such expense was attributable to interest payable in connection
with borrowings made under the Company's Prior Credit Agreement. A significant
portion of the Company's cash flow will be expended in connection with the
payment of interest expense under the Senior Notes and dividends on the
Preferred Stock.
On a pro forma basis, after giving effect to the Refinancing, the Company
would have had, as of March 31, 1995, total long-term debt of approximately
$103.5 million and the ability to borrow, under the borrowing base formula of
the New Credit Agreement, approximately an additional $40.0 million. In
addition, on a pro forma basis, after giving effect to the Refinancing, the
Company's earnings would have been insufficient to cover fixed charges by
approximately $15.0 million and $1.2 million for the year ended December 31,
1994 and the quarter ended March 31, 1995, respectively. Although the indenture
pursuant to which the Senior Notes were issued (the "Indenture"), will limit the
incurrence of additional indebtedness in the future, the Company may be
permitted to incur substantial additional indebtedness, which may bear interest
at variable rates and contain significant restrictions on the Company's
activities. Such indebtedness may be incurred in the ordinary course of
business or otherwise, including in connection with acquisitions.
The degree to which the Company is leveraged could have important consequences
to the holders of shares of Common Stock, including, among other things, the
following: (i) the impairment of the Company's ability to obtain financing in
the future for working capital, capital expenditures, acquisitions, general
corporate or other purposes; (ii) the dedication of a substantial portion of the
Company's cash flow from operations for the payment of principal and interest on
its indebtedness and dividends on the Preferred Stock; (iii) the vulnerability
of the Company to economic downturns and competitive pressures due to its high
degree of leverage; and (iv) difficulties in satisfying its obligations in
respect of indebtedness.
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Substantially all of the Company's assets are pledged as collateral to secure
the Company's borrowings under the New Credit Agreement, which pledge limits the
Company's ability to secure additional financing in the future.
During 1994 and 1995, the Company was not in compliance from time to time with
various financial covenants contained in the Prior Credit Agreement and
defaulted in the payment of certain acquisition related indebtedness. Such non-
compliances and defaults required the Company to seek waivers and negotiate
amendments to its Prior Credit Agreement. Such debt has been repaid in full
with the proceeds of the Refinancing and the New Credit Agreement has been
entered into. While the Company believes that the Refinancing has addressed the
liquidity issues which faced the Company, there can be no assurance that the
Company will not default under its indebtedness in the future or have future
liquidity problems and that holders of shares of Common Stock will not be
materially adversely affected thereby.
The Company's New Credit Agreement contains significant financial and
operating covenants, including, among other things, requirements that the
Company maintain minimum net worth and cash flow levels, maintain certain
financial ratios, prohibitions on the ability of the Company to incur certain
additional indebtedness and restrictions on its ability to make capital
expenditures, to incur or suffer to exist certain liens, to pay dividends or
take certain other corporate actions. Amounts will only be available under the
New Credit Agreement if such financial maintenance and other covenants are
satisfied and the borrowing base calculation (which is based upon the amount of
eligible accounts receivable and eligible installed public pay telephones) are
satisfied. There can be no assurance that the Company will be able to comply
with such covenants or that such covenants will not adversely affect the
Company's ability to conduct its operations, finance its capital needs or
successfully pursue its business strategies. The Company has in the past failed
to comply with its covenants under its Prior Credit Agreement and other
indebtedness and there can be no assurance that it will not do so in the future.
Any such non-compliance may have a material adverse effect on holders of Common
Stock.
The Indenture governing the Senior Notes contains certain covenants,
including, but not limited to, covenants with respect to the following matters:
limitations on additional indebtedness, limitations on restricted payments,
including the payment of dividends on the Common Stock, limitations on the
incurrence of liens, limitations on transactions with affiliates, the
application of the proceeds of certain asset sales, restrictions on the
issuance of preferred stock of certain subsidiaries, limitations on the
creation of restrictions on the ability of certain subsidiaries to make certain
distributions and payments to the Company and other subsidiaries, and
limitations on the merger, consolidation or transfer of all or substantially all
of the assets of the Company and certain subsidiaries with or to another person.
Holders of Senior Notes will also have the right to require the Company to
repurchase Senior Notes in the event of certain changes in control. The Senior
Notes are senior unsecured obligations of the Company and rank pari passu with
other Senior indebtedness of the Company.
Although the Company believes that the terms of the New Credit Agreement and
the Indenture provide it with adequate liquidity and flexibility to comply with
the financial and other covenants contained therein and to pursue its business
strategies, there can be no assurance that the Company will
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comply with such covenants or not be materially restricted by the terms of the
New Credit Agreement and the Indenture. In addition, changes in economic or
business conditions or other factors beyond the Company's control may adversely
affect the Company's ability to comply with such covenants or pursue its
business strategies. A failure to satisfy any financial or other covenant in
the New Credit Agreement or the Indenture could permit the lenders under the New
Credit Agreement or holders of Senior Notes to accelerate such indebtedness,
which would materially adversely affect holders of Common Stock. Substantially
all of the assets of the Company are pledged to secure the Company's obligations
under the New Credit Agreement.
RECENT LOSSES
The Company incurred a loss from continuing operations in 1994 and the first
quarter of 1995 of approximately $7.6 million and $0.4 million, respectively,
including losses from the Company's prepaid calling card business and
international telephone center operations of approximately $5.5 million in 1994.
In addition, the Company had a loss from discontinued operations in 1994 of
approximately $10.8 million. Losses from continuing operations were primarily
the result of increased operating expenses attributable to the Company's
vertical integration strategy, the integration of an acquisition of a
significant number of public pay telephones in the latter half of 1993 and
approximately $2.7 million of 1994 charges to net income after taxes taken
during 1994, which management believes are one-time charges. These charges
included, among other things, amounts reserved for settling disputes with
service providers, severance charges, lease termination charges and costs
incurred in connection with an abandoned merger transaction. There can be no
assurance as to the future profitability of the Company's continuing or
discontinued operations or as to the Company's ability to dispose of the
discontinued operations on favorable terms or on the terms contemplated by the
Company's consolidated financial statements.
RISKS ASSOCIATED WITH BUSINESS STRATEGIES AND DISCONTINUED OPERATIONS
In recent years, the Company attempted to vertically integrate its public pay
telephone business and has entered into a variety of complementary niche
telecommunications businesses, including its inmate telephone and cellular
telephone rental operations (collectively, the "Discontinued Operations") and
prepaid calling card and international telephone centers. The capital
requirements and management attention required by these businesses diverted the
Company from its core public pay telephone business. Accordingly, in December
1994, the Company decided to focus on its core public pay telephone business and
divest itself of the prepaid calling card and international telephone center
operations and the Discontinued Operations. The Company's business strategies
for growing its public pay telephone business include growth through
acquisitions and new installations. In general, the Company has been able to
integrate acquired public pay telephones without significant costs or management
issues; however, in 1994, it experienced difficulties in integrating one of its
large acquisitions, which were exacerbated by management's focus on the prepaid
calling card and international telephone center operations and the Discontinued
Operations. While the Company has refocused on its core public pay telephone
business and effected a work force reduction during 1994 (collectively the "1994
Operational Restructuring"), and made efforts to improve the quality of its
management infrastructure and systems, there can be no assurance that the 1994
Operational Restructuring will be a successful strategy or that
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the Company will be able to expand its core public pay telephone business either
through acquisitions or through internal growth, successfully integrate acquired
public pay telephones, hire qualified new employees to meet the requirements of
its business or obtain the capital necessary to permit it to pursue its business
strategies.
In connection with the sale of the Preferred Stock, the Company has agreed to
certain affirmative and negative covenants with respect to the conduct of its
business, among other matters. In particular, absent approval of 75% of the
members of the Board of Directors of the Company (which would effectively
require the approval of a director elected by the holders of such Preferred
Stock), the Company will be restricted from entering into a number of
transactions outside the ordinary course of business (including acquisitions and
dispositions of assets other than the sale of the Discontinued Operations or the
international telephone center operations, involving aggregate consideration of
more than $5.0 million). The foregoing restriction may prevent the Company from
entering into certain acquisitions in furtherance of its business strategy.
In order to focus on the Company's core public pay telephone business, it will
be necessary to complete the divestiture of the Discontinued Operations and the
international telephone center operations. The Company's cellular telephone
rental operations are not currently profitable and its inmate telephone business
is subject to increasing competitive pressures and the risks attendant to having
a significant number of its contracts subject to renewal in the next 24 months.
There can be no assurance as to whether the Company will be successful in
renewing existing inmate telephone contracts or that the inmate telephone
business will not be adversely affected by the Company's announcement of its
decision to divest the inmate telephone business. As a result, there can be no
assurance as to the Company's future profitability or as to the Company's
ability to dispose of the Discontinued Operations or the international telephone
center operations on favorable terms or on the terms contemplated by the
Company's consolidated financial statements. If the Company disposes of any of
the Discontinued Operations for consideration that is less than the book value
of such operation, the Company will have to take a charge against net income for
any such difference.
The process of identifying attractive public pay telephone acquisition
opportunities and expanding through internal growth may be subject to unforeseen
difficulties. Moreover, there can be no assurance that the Company will
continue to be able to identify and acquire businesses on a basis which permits
it to satisfy its projected rates of return and other criteria for acquisitions.
Nor can there be any assurance that the Company will be able to locate favorable
new sites for internal growth, hire qualified new employees to meet the
requirements of its expanding business, obtain the capital necessary to permit
it to pursue its business strategies or continue to access developing
technologies at satisfactory costs to provide those service enhancements
demanded by consumers and customers in its existing and future businesses.
Consequently, there can be no assurance that the Company's business strategy
will prove to be successful, that the Company will be able to sell certain of
its operations or that expansion of the Company's business will not have a
material adverse impact on the Company.
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GOING CONCERN OPINION; RESTATEMENT OF FINANCIAL STATEMENTS; AUDIT COMMITTEE
REPORT
The report of the Company's independent accountants on the Company's
consolidated financial statements incorporated by reference in this Prospectus
contains an explanatory paragraph relating to the Company's ability to continue
as a going concern, as described in Note 18 to the Company's consolidated
financial statements incorporated by reference herein. Management believes
that, as a result of the Refinancing and the use of proceeds to repay
outstanding indebtedness, the bases for the explanatory paragraph relating to
the Company's ability to continue as a going concern no longer exist. However,
no assurance has been or can be given by the Company or by its independent
accountants that such explanatory paragraph will be removed from the independent
accountant's report.
In May 1995, the Company discovered that its interest in Global Link Teleco
Corporation ("Global Link") was 28.8% instead of the intended 19.99%. To
correct this error, the Company reduced its share ownership to the 19.99% level.
This caused the Company and its independent accountants to reevaluate the
accounting for its interest in Global Link (formerly known as Phone Zone Teleco
Corporation). Such review resulted in a determination that the equity method of
accounting for its Global Link investment was appropriate. Consequently, the
Company has restated its consolidated financial statements for fiscal 1994 and
the first quarter of 1995 to reflect the revision in accounting treatment for
the Global Link investment.
The Company has also restated its financial statements for the quarters ended
March 31 and June 30, 1994, as set forth in Form 10-Q's for such periods, to
reflect the timing of approximately $2.7 million in adjustments. These
adjustments, which include additional reserves for changes in estimates of
uncollectible receivables and vendor claims and the write-off of certain
acquisition costs, were originally recorded during the quarter ended June 30,
1994 and have now been reflected in the quarter ended March 31, 1994 to more
accurately reflect the timing of such adjustments. The restated quarterly
financial statements also reflect the $2.0 million gain on the March 31, 1994
sale of the Company's two telecommunications centers in New York to Phone Zone
Teleco Corporation in the second quarter of 1994 (when initial payment for the
centers was received) rather than the first quarter (when Phone Zone Teleco
Corporation took control of the centers on the basis of an agreement in
principle). These changes had no impact on net income or cash flow for the year
ended December 31, 1994.
In connection with their 1993 and 1994 audits of the Company, Price Waterhouse
LLP ("Price Waterhouse") issued letters to the Company's Audit Committee
indicating a number of reportable conditions in the Company's system of internal
accounting procedures, one of which constituted a material weakness relating to
the proper cut-off of quarterly financial information. Management believes that
it adequately addressed this material weakness prior to the end of fiscal 1994.
There were no disagreements as of the date of Price Waterhouse's audit report
incorporated by reference in this Prospectus with Price Waterhouse on any matter
of accounting principles or practices, financial statement disclosure or
auditing scope or procedure which, if not resolved to Price Waterhouse's
satisfaction, would have caused them to make reference to the subject matter of
the disagreement in connection with their report. The report contains
explanatory paragraphs relating to the Company's ability to continue as a going
concern and for certain litigation matters as described therein.
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COMPETITION
The Company's businesses are, and can be expected to remain, highly
competitive. The markets in which the Company operates are fragmented, but
include certain large, well-capitalized providers of telecommunications services
with substantially greater resources than the Company. The Company's principal
competition in its public pay telephone business comes from local exchange
carriers ("LECs") operated by the regional Bell operating companies (the
companies that were formed as a result of the divestiture of American Telephone
& Telegraph Company ("AT&T")), GTE Corporation ("GTE"), a number of independent
providers of public pay telephones services, major operator service providers
and interexchange carriers. A LEC is the exclusive line service provider in a
given geographical region. For example, Southern Bell and Pacific Bell are LECs
owned by regional Bell operating companies. The Company's competition in its
inmate telephone business is from LECs, interexchange carriers and independent
providers of pay telephone systems. In the cellular rental business, the Company
competes with GTE and other providers that contract cellular rental services
through hotels and automobile rental agencies. The Company also competes with
many other non-LEC telecommunication companies which offer products and services
similar to those of the Company. Increased competition from these sources is
causing the Company to pay higher commissions on revenues generated by the
public pay telephones to those persons who own or lease the location on which
the public pay telephones are located. Such higher commissions could have a
material adverse effect on the Company by increasing its expenses without a
corresponding increase in revenue and by preventing the Company from obtaining
or maintaining desirable locations for its public pay telephones.
The Company's public pay telephone business is also materially affected by
competition in other segments of the telecommunications industry and related
regulatory issues. For example, since 1992, AT&T and MCI Communications, Inc.
("MCI") have aggressively promoted the use of access codes to encourage callers
to "dial around" the selected operator service provider at public pay
telephones. Dial around calls are attractive to the caller because the caller
pays the long distance rates of the operator service provider selected by the
caller as opposed to the often inflated per minute rates and surcharges imposed
by many operator service providers selected at public pay telephones. Prior to
January 1, 1995, the Company only received a fixed amount per telephone as
compensation for all interstate and, in some cases, intrastate dial around calls
placed at its public pay telephones regardless of how many dial around calls
were actually placed at such telephones. Effective January 1, 1995, the Company
will receive from AT&T a fixed amount per telephone call for each interstate and
interLATA intrastate AT&T dial around call placed at its public pay telephones
while it continues to receive the fixed amount per telephone from other
carriers. The amount for which the Company is compensated for dial around calls
is substantially below the amount it is compensated for 0+ calls made at its
public pay telephone through its selected operator service providers. The
Company has seen a steady decline in the number of 0+ calls completed at its
public pay telephones which has adversely affected the Company's non-coin
revenues.
In order to address the impact of dial around calls, as well as pursue new
business opportunities, the Company entered into an agreement with AT&T which
provides for the Company to receive competitive commission payments for all 0+
and AT&T dial around calls. There can be no assurance that such agreement will
be a financially beneficial means of addressing dial around issues given the
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dynamic nature of the domestic telecommunications industry and the evolving
regulatory framework, or, if successful, it can be renewed. In addition, there
can be no assurance that there are not or will not be other competitive trends
in other segments of the telecommunications industry that may materially
adversely affect the Company.
REGULATORY FACTORS
Most aspects of the Company's business are subject to regulation by the
Federal Communications Commission, the agency that administers the interstate
common carriage of telecommunications (the "FCC"), and by the state utility
commissions, or both. Changes in existing laws and regulations, as well as new
laws and regulations, applicable to the activities of the Company or other
telecommunications businesses, may materially adversely impact the operations,
revenues and expenses of the Company (including the extent of competition, the
charges of providers of interexchange and operator services and the
implementation of new technologies).
State regulatory commissions are primarily responsible for regulating the
rates, terms and conditions for intrastate public pay telephones and inmate
telephone services. Neither state nor federal regulation focuses on the
competitive aspects of the business environment on which the Company operates.
The Company is also subject to state regulation of operator services and, to a
limited extent, cellular resale services. Such regulations may include notice
and identification requirements, maximum price limitations, interconnection
rates, reporting requirements and prohibitions on handling certain local and
long-distance calls. Public pay telephones in the United States are owned and
operated by LECs or by independent operators such as the Company. However,
alternative competitive providers of local and intrastate services are beginning
to emerge. There are four states in which it is illegal to provide certain
intrastate services using non-LEC pay telephones: Alaska, Connecticut, Hawaii
and Oklahoma. Connecticut, however, has proceedings underway to implement
public pay telephone competition within that state.
The Company's operations are significantly influenced by the regulation of
public pay telephone, inmate telephone, long-distance reseller services and
other telecommunication services. Authority for regulation of these services is
concurrently vested in the FCC, and the various state public service
commissions. Regulatory jurisdiction is determined by the interstate or
intrastate character of the subject service and the degree of regulatory
oversight exercised varies among jurisdictions. While most matters affecting the
Company's operations fall within the administrative purview of these regulatory
agencies, state and federal legislatures and the federal district court
administering the divestiture consent decree for AT&T are also involved in
establishing certain rules and requirements governing aspects of these services.
Changes in existing laws and regulations, as well as new laws and regulations,
applicable to the activities of the Company or other telecommunications
businesses, may materially adversely impact the operations, revenues and
expenses of the Company (including the extent of competition, the charges of
providers of interexchange and operator services and the implementation of new
technologies).
On April 9, 1992, the FCC proposed a new access plan for operator assisted
interstate calls dialed on 0+ basis. Currently, 0+ calls are sent directly by
the LEC to the operator service provider selected by the host location. Under
the proposed access plan, known as "Billed Party Preference," 0+ calls
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would be sent instead to the operator service provider chosen by the party
paying for the call. Billed Party Preference allows a telephone user to bill a
call to the user's pre-established carrier at the user's home or office, thereby
bypassing the opportunity for the pre-subscribed carrier of the public pay
telephone provider to handle and receive revenues from the call. The FCC has
tentatively concluded that a nationwide Billed Party Preference system for
interstate assisted calls is in the public interest. Under a Billed Party
Preference system, the billed party could by-pass the Company entirely, allowing
0+ calls to be made on the Company's telephones without the payment of any
compensation to the Company. If the Company does not receive revenue for 0+
calls, the Company will be unable to pay commissions for such calls to owners of
locations at which public pay telephones are installed, correctional facilities
at which inmate telephones are located, and potentially, car rental companies at
which cellular telephones are rented. The FCC has requested and received public
comment on the question of compensation to pay telephone companies under Billed
Party Preference. The proposal remains under consideration at present and the
outcome is uncertain. If implemented, Billed Party Preference could have a
significant adverse impact on the Company.
TECHNOLOGICAL CHANGE AND NEW SERVICES
The telecommunications industry has been characterized by rapid technological
advancements, frequent new service introductions and evolving industry
standards. In the future, the Company's business could be impacted by the
introduction of new technology, such as improved wireless communications,
cellular telephone service and other personal communications systems. The
Company believes that its future success will depend on its ability to
anticipate and respond to changes and new technology. There can be no assurance
that the Company will not be materially adversely affected by the introduction
and acceptance of new technology.
SERVICE INTERRUPTIONS; EQUIPMENT FAILURES
The Company's long-distance operations require that its switching equipment
and the equipment of its long-distance service providers be operational 24 hours
per day, 365 days per year. As is case with other telecommunications companies,
the Company's long-distance operations may experience temporary service
interruptions or equipment failures, which may result from causes beyond the
Company's control. Any such event could have a material adverse effect on the
Company.
VOTING POWER OF THE PREFERRED STOCK; RESTRICTIONS IMPOSED BY PREFERRED STOCK
The Preferred Stock is immediately convertible, at the option of the holders,
into approximately 2,857,143 shares of Common Stock (or approximately 15.1% of
the outstanding Common Stock as of June 30, 1995 determined in accordance with
Rule 13d-3 under the Exchange Act), at a conversion price of $5.25 per share,
subject to reduction pursuant to antidilution adjustments in connection with,
among other things, certain issuances of shares of, or rights to acquire, Common
Stock at less than the conversion price of the Preferred Stock.
The holders of the Preferred Stock are entitled to elect two members of the
six member Board of Directors of the Company. The Preferred Stock is also
entitled to vote on all other matters submitted
11
<PAGE>
to the stockholders for a vote together with the holders of the Common Stock
voting as a single class with each share of Preferred Stock entitled to one vote
for each share of Common Stock issuable upon conversion. Accordingly, the
holders of the Preferred Stock may have a significant effect on the outcome of
any matter on which the holders of the Common Stock are entitled to vote.
For so long as 25% of the shares of Preferred Stock or the Common Stock into
which such Preferred Stock is convertible remain outstanding and have not been
sold publicly, the Company has agreed to observe certain negative covenants,
including but not limited to covenants with respect to the following matters:
(a) amendment of the Company Certificate of Incorporation or bylaws,
issuances of Common Stock, effectuation of a fundamental change, including the
sale or transfer of more than 40% of the consolidated assets of the Company and
its subsidiaries and certain mergers and consolidations and (b) without the
approval of 75% of the members of the Board of Directors (which would require
the vote of at least one member of the Board of Directors elected by the
Preferred Stock), engaging in certain transactions with stockholders, directors,
officers, employees or defined affiliates, issuing debt securities with equity
features or capital stock or other equity securities senior to or on a parity
with the Preferred Stock, merging or consolidating or, except for certain
permitted acquisitions or dispositions, allowing a subsidiary to merge or
consolidate, selling, leasing or otherwise disposing of assets of the Company or
its subsidiaries involving consideration greater than $5.0 million, liquidating,
dissolving or effecting a recapitalization or reorganization, acquiring an
interest in or assets of any other company involving aggregate consideration
greater than $5.0 million, owning, managing or operating any business other than
the domestic pay telephone business, or hiring, electing or replacing the
Company's Chief Executive Officer, President, Chief Financial Officer or Chief
Operating Officer or change the terms of employment or compensation thereof.
Notwithstanding the foregoing, the Company may sell certain discontinued
operations and borrow under the New Credit Agreement.
DIVIDEND POLICY
The Company has never paid cash dividends on its Common Stock and does not
anticipate paying cash dividends in the foreseeable future. The Company's credit
facility restricts the payment of cash dividends to its shareholders. No
dividends may be paid which would otherwise cause the Company to breach its
obligations under the credit facility or while the Company is in default of its
obligation under the credit facility. Furthermore, so long as any shares of the
Preferred Stock remain outstanding, without the prior consent of the holders of
a majority of the then outstanding shares of Preferred Stock, the Company is
prohibited from paying or declaring any dividend or making any distribution on
any other capital stock of the Company (other than dividends payable solely in
the securities in respect of which such dividends are paid).
RELIANCE ON KEY PERSONNEL
The Company is heavily dependent on the efforts of certain of its officers and
other management personnel, including: Jeffrey Hanft, the Company's Chairman of
the Board and Chief Executive Officer; Robert D. Rubin, the Company's President;
Richard F. Militello, the Company's Chief Operating
12
<PAGE>
Officer; Bonnie S. Biumi, the Company's Chief Financial Officer; Bruce W.
Renard, the Company's Vice President of Regulatory Affairs and its General
Counsel; and Lawrence T. Ellman, President of the Company's Payphone Division.
The loss of the services of one or more of these individuals could have a
material adverse effect on the Company. In addition, the failure of the Company
to attract and retain additional management to support its business strategy
could also have a material adverse effect on the Company. The Company does not
maintain key man insurance on the named individuals.
13
<PAGE>
SELLING SHAREHOLDERS
All of the shares of Common Stock of the Company offered hereby are being sold
by the Selling Shareholders named below. The Company will receive none of the
proceeds from the sale of shares offered hereby. Some of the shares of Common
Stock are subject to indemnification obligations owed by such Selling
Shareholders to the Company and may be transferred by such Selling Shareholders
to the Company. To the best of the Company's knowledge, the following table
sets forth certain information with respect to the Selling Shareholders as of
March 31, 1995:
<TABLE>
<CAPTION>
No. of
Shares Beneficially Owned Shares Shares Beneficially Owned
Before this Offering to be Sold After this Offering
------------------------- ---------- -------------------------
Name of Selling Shareholder Number Percentage(1) Number Percentage(1)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
George E. Livingston(2) 70,577 * 70,577 0 *
John W. Madden, Jr.(2) 17,151 * 17,151 0 *
Willis M. McFarlane(2) 17,151 * 17,151 0 *
John Metcalfe(2) 1,336 * 1,336 0 *
Roger Smith(2) 1,336 * 1,336 0 *
Greg L. Livingston(2) 91 * 91 0 *
Ascom Communications, Inc.(3) 500,000 3.1% 500,000 0 *
Jacquith & Company(4) 150,000 * 150,000 0 *
Telecorp Funding, Inc. 126,324 * 126,324 0 *
Gilbert A. Mendelson(5) 62,068 * 62,068 0 *
David T. Magrish(5) 62,068 * 62,068 0 *
Harvey Ostrow(5) 8,863 * 8,863 0 *
Luis Schwartz(5) 17,727 * 17,727 0 *
Howard Siegel(5) 9,843 * 9,843 0 *
Creditanstalt Corporate Finance,
Inc.(6) 540,541 3.3% 540,541 0 *
TOTAL 1,585,076 1,585,076 0
<FN>
_____________________
(1) Represents the percentage of the Company's issued and outstanding Common
Stock owned by such person, based on 16,051,875 shares issued and
outstanding as of April 30, 1995. Does not include shares of Common Stock
issuable upon the exercise of outstanding warrants, options or other rights
to acquire the Company's Common Stock, unless such warrants, options or
other rights have been issued to such persons or entities listed in the
above table and are currently exercisable. No percentage of beneficial
ownership is indicated for persons or entities with less than one percent
beneficial ownership.
(2) Represents shares issued to such individual in connection with the
Company's acquisitions of the assets of Silverado Communications Corp.
_____________________
Footnotes Continued Next Page
14
<PAGE>
_____________________
(3) Represents shares issued to such Selling Shareholder in connection with the
Company's acquisitions of the assets of such Selling Shareholder.
(4) Represents shares issued to such Selling Shareholder, an affiliate of
Creditanstalt, in connection with the Company's senior revolving credit
facility.
(5) Represents shares issued to such Selling Shareholder in connection with the
Company's acquisition of the assets of Telecoin Communications, Ltd.
pursuant to an Agreement and Plan of Merger by and among the Company, the
Selling Shareholder and other parties, dated October 21, 1994. The number
of shares to be issued to such Selling Shareholders is based upon the
lesser of the average closing price for one share of Common Stock for the
five days preceding October 21, 1994 or the day immediately preceding the
date this Registration Statement becomes effective.
(6) Represents shares which may be issued to such Selling Shareholder, an
affiliate of Creditanstalt, upon conversion by such Selling Shareholder of
the aggregate outstanding principal indebtedness as of December 1, 1995
under the $2.5 million note owed by PTC Cellular, Inc. in favor of such
Selling Shareholder in accordance with an Exchange Agreement between such
Selling Shareholder and the Company.
</FN>
</TABLE>
PLAN OF DISTRIBUTION
The shares of Common Stock, $.01 par value per share, of the Company covered
by this Prospectus are outstanding shares that are being sold by the Selling
Shareholders named herein. See "Selling Shareholders." The Company will not
receive any of the proceeds from the sale of the shares offered hereby.
The Selling Shareholders may sell any shares of Common Stock offered hereby
from time to time in one or more transactions (including block transactions in
which a Selling Shareholder is the seller) in the over-the-counter market or
otherwise. The Selling Shareholders may also sell shares of Common Stock in
special offerings, exchange distributions or secondary distributions in
accordance with the rules of the National Association of Securities Dealers,
Inc., in negotiated transactions, including through the writing of options on
shares of the Common Stock (whether such options are listed on an options
exchange or otherwise), or otherwise. The Selling Shareholders may effect such
transactions by selling shares of Common Stock to or through underwriters,
dealers, brokers or agents. Such underwriters, dealers, brokers or agents may
sell such shares of Common Stock to purchasers in one or more transactions
(including block transactions) in the over the counter market or otherwise. Any
sales may be made at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices. Without
limiting the foregoing, brokers may act as dealers by purchasing any and all
shares of Common Stock either as agents for others or as principals for their
own accounts and reselling such shares pursuant to this Prospectus. Such
brokers will receive compensation from the Selling Shareholders in the form of
commissions or discounts and may receive compensation from purchasers of the
shares of Common Stock for whom they may act as agent or to whom they may sell
as principal in the form of commissions or discounts. The Selling Shareholders
and any underwriters, dealers, brokers or agents that participate in the sale of
such shares of Common Stock may be deemed to be underwriters, and any profit on
the sale of such shares of Common Stock by the Selling Shareholders and any
discounts, commissions or concessions received by any such underwriter, dealer,
broker or agent may be deemed to be underwriting discounts or commissions under
the Securities Act. The Company has agreed to indemnify the Selling Shareholders
against certain liabilities, including liabilities under the Securities Act.
In addition, Telecorp Funding, Inc. may distribute shares of Company Common
Stock held by it to the shareholders thereof.
15
<PAGE>
There can be no assurances that the Selling Shareholders will sell any or all
of the shares of Common Stock offered hereunder.
Sales of shares of Common Stock at less than the market prices thereof may
depress the market price of the Company's Common Stock. Moreover, it is
possible that a significant number of shares of Common Stock could be sold at
the same time, which may also depress the market price of the Company's Common
Stock.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby has been passed
upon for the Company by Zack, Sparber, Kosnitzky, Truxton, Spratt & Brooks,
P.A., Miami, Florida.
EXPERTS
The financial statements incorporated in this Prospectus by reference to the
Company's Annual Report on Form 10-K for the Company and its subsidiaries for
the fiscal year ended December 31, 1994, as amended by Form 10-K/A No. 1, Form
10-K/A No. 2 and Form 10-K/A No. 3 relating thereto, have been so incorporated
in reliance on the report of Price Waterhouse LLP, independent certified public
accountants, given on the authority of said firm as experts in auditing and
accounting.
16
<PAGE>
No dealer, salesperson or other individual has been authorized to give any
information or to make any representation not contained or incorporated by
reference in this Prospectus in connection with the offering made by this
Prospectus. If given or made, such information or representation must not be
relied upon as having been authorized by the Company or the Selling
Shareholders. This Prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy, the shares of Common Stock offered hereby by
anyone in any jurisdiction where, or to any person to whom, it is unlawful to
make such offer or solicitation or in which the person making such offer or
solicitation is not qualified to do so. 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 facts set forth in this
Prospectus or the affairs of the Company since the date hereof.
TABLE OF CONTENTS
Page
Available Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Incorporation of Certain Documents by Reference. . . . . . . . . . . . . . . 2
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Selling Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
1,585,076 SHARES
PEOPLES TELEPHONE COMPANY, INC.
COMMON STOCK
------------
PROSPECTUS
------------
JULY __, 1995
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION*
<TABLE>
<S> <C>
SEC Registration Fee. . . . . . . . . . . . . . . . $2,527.92
NASD Registration Fee . . . . . . . . . . . . . . . $1,233.10
Cost of Printing and Engraving. . . . . . . . . . . $2,500.00
Legal Fees and Expenses . . . . . . . . . . . . . .$20,000.00
Accounting Fees and Expenses. . . . . . . . . . . . $5,500.00
Blue Sky Fees and Expenses. . . . . . . . . . . . .$15,000.00
Transfer Agent Fees and Expenses. . . . . . . . . . $2,000.00
Miscellaneous . . . . . . . . . . . . . . . . . . . $1,238.98
----------
TOTAL. . . . . . . . . . . . . . . . . . .$50,000.00
==========
<FN>
___________________________
* Estimated, except for SEC Registration Fee and NASD Fee.
</FN>
</TABLE>
All of the above issuance and distribution expenses are to be paid by the
Company.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Paragraph Tenth of the Company's Certificate of Incorporation provides that
the Company will indemnify and reimburse the officers and directors of the
Company to the fullest extent provided by law. Paragraph Tenth of the Company's
Certificate of Incorporation also provides that the provisions regarding
indemnification and advancement of expenses as provided by law shall not be
exclusive of any other right which any officer or director of the Company may
have or acquire thereafter under any provision of the Company's Certificate of
Incorporation or By-laws or by any agreement, vote of shareholders or
disinterested directors of the Company or otherwise, provided, that no
indemnification may be made to or on behalf of any officer or director if a
judgment or other final adjudication adverse to such officer or director
establishes that his acts were committed in bad faith or were the result of
active and 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.
A director shall not be liable to the Company or its shareholders for damages
for any breach of duty in such director's capacity as a director unless (I) a
judgment or other final adjudication adverse to the director establishes that
his acts or omissions were in bad faith or involved intentional misconduct or a
knowing violation of law or that he personally gained in fact a financial profit
or other advantage to which he was not legally entitled or that his acts
violated section 719 of the Business Corporation Law of New York or (ii) the
liability of any director for any act or omission occurred prior to the adoption
of this indemnification provision by the Company.
II-1
<PAGE>
In addition, the Company carries insurance permitted by the laws of New York
on behalf of directors and officers which may cover, among other things,
liabilities under the Securities Act.
ITEM 16. EXHIBITS.
circle4.1 Amended and Restated Certificate of Incorporation of the Company,
adopted on November 30, 1987, and filed with the Commission as an
exhibit to the Company's Registration Statement on Form 10 on
January 20, 1988, Registration No. 0-16479 (the "Form 10
Registration Statement"), is hereby incorporated herein by
reference.
circle4.2 Amendments to Certificate of Incorporation, adopted on March 8,
1990, and March 15, 1990, respectively, and filed with the
Commission as an exhibit to the Company's Annual Report on Form
10-K for the year ended December 31, 1989 (File No. 0-16470), are
hereby incorporated herein by reference.
circle4.3 Amendment to Certificate of Incorporation, adopted on June 29,
1990, and filed with the Commission as an Exhibit to the Company's
Form 10-K for the year ended December 31, 1990 (File No. 0-16470),
is hereby incorporated herein by reference.
4.4 Amendment to Certificate of Incorporation, adopted on July 19,
1995, and filed with the Commission as Exhibit 3 to the Company's
Form 8-K dated July 19, 1995 (File No. 0-16479) is hereby
incorporated herein by reference.
4.5 Restated Bylaws of the Company, adopted on November 30, 1987, and
filed as an exhibit to the Form 10 Registration Statement, is
hereby incorporated herein by reference.
5 Opinion of Zack, Sparber, Kosnitzky, Truxton, Spratt & Brooks, P.A.
10 AT&T Commission Agreement dated April 20, 1995 by and between AT&T
Communications, Inc. and the Company.
23.1 Consent of Price Waterhouse LLP.
23.2 Consent of Zack, Sparber, Kosnitzky, Truxton, Spratt & Brooks, P.A.
(included in its opinion filed as Exhibit 5).
circle24 Powers of Attorney (included on page II-5 of this Registration
Statement).
_____________________________
circle Previously filed.
II-2
<PAGE>
ITEM 17. UNDERTAKINGS.
(a) The undersigned Company 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 this 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 this Registration Statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this Registration Statement
or any material change to such information in this Registration
Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Company pursuant to
section 13 or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, 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 Company hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the Company's
annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act
that is incorporated by reference in this Registration Statement 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.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Company pursuant to the foregoing provisions, or otherwise, the Company
has been advised that in the opinion of the 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 Company of expenses incurred or paid
by a director, officer or controlling person of the Company in the successful
II-3
<PAGE>
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
Company 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.
(d) The undersigned Company hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act,
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 Company 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; and
(2) For the purposes of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Company certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-3 and has duly caused this Amendment No. 2
to the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized in the City of Miami, State of Florida, on July 26,
1995.
PEOPLES TELEPHONE COMPANY, INC.
By: /s/ Jeffrey Hanft
------------------------------------
Jeffrey Hanft, Chairman of the Board
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons on behalf of the
Company in the capacities and on the date indicated:
DATE SIGNATURE TITLE
- ---- --------- -----
July 26, 1995 /s/ Jeffrey Hanft Chairman of the Board,
------------------------ Chief Executive Officer
Jeffrey Hanft and Director
July 26, 1995 /s/ Robert D. Rubin President and Director
------------------------
Robert D. Rubin
July 26, 1995 /s/ Richard F. Militello Chief Operating Officer
------------------------
Richard F. Militello
July 26, 1995 /s/ Bonnie S. Biumi Chief Financial Officer
------------------------
Bonnie S. Biumi
July 26, 1995 /s/ Denise Gordon Controller
------------------------
Denise Gordon
II-5
<PAGE>
July 26, 1995 Director
------------------------
Richard Whitman
July 26, 1995 Director
------------------------
Charles J. Delaney
Robert E. Lund, Jody Frank Directors*
*By: /s/ Jeffrey Hanft
----------------------------------
Jeffrey Hanft (attorney-in-fact)
II-6
<PAGE>
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
circle4.1 Amended and Restated Certificate of Incorporation of the Company,
adopted on November 30, 1987, and filed with the Commission as an
exhibit to the Company's Registration Statement on Form 10 on
January 20, 1988, Registration No. 0-16479 (the "Form 10
Registration Statement"), is hereby incorporated herein by
reference.
circle4.2 Amendments to Certificate of Incorporation, adopted on March 8,
1990, and March 15, 1990, respectively, and filed with the
Commission as an exhibit to the Company's Annual Report on Form
10-K for the year ended December 31, 1989 (File No. 0-16479), are
hereby incorporated herein by reference.
circle4.3 Amendment to Certificate of Incorporation, adopted on June 29,
1990, and filed with the Commission as an Exhibit to the Company's
Form 10-K for the year ended December 31, 1990 (File No. 0-16479),
is hereby incorporated herein by reference.
4.4 Amendment to Certificate of Incorporation, adopted on July 19, 1995
and filed with the Commission as Exhibit 3 to the Company's Form
8-K, dated July 19, 1995 (File No. 0-16479), is hereby incorporated
herein by reference.
4.5 Restated Bylaws of the Company, adopted on November 30, 1987, and
filed as an exhibit to the Form 10 Registration Statement, is
hereby incorporated herein by reference.
5 Opinion of Zack, Sparber, Kosnitzky, Truxton, Spratt & Brooks, P.A.
10 AT&T Commission Agreement dated April 20, 1995 by and between AT&T
Communications, Inc. and the Company.
23.1 Consent of Price Waterhouse LLP.
23.2 Consent of Zack, Sparber Kosnitzky, Truxton, Spratt & Brooks, P.A.
(included in its opinion filed as Exhibit 5).
circle24 Powers of Attorney (included on page II-5 of this Registration
Statement).
_____________________________
circle Previously filed.
II-7
Exhibit 5
ZACK, SPARBER, KOSNITZKY, TRUXTON, SPRATT & BROOKS, P.A.
1 International Place
Suite 2800
Miami, Florida 33131-2144
July 26, 1995
Peoples Telephone Company, Inc.
2300 Northwest 89th Place
Miami, Florida 33126
RE: PEOPLES TELEPHONE COMPANY, INC. --
REGISTRATION STATEMENT ON FORM S-3 REGISTRATION NO. 33-58607
Gentlemen:
We have acted as special legal counsel to Peoples Telephone Company, Inc.,
a New York corporation (the "Company"), in connection with the issuance of this
opinion for the purposes of filing the above-referenced Registration Statement
on Form S-3 (the "Registration Statement") with the United States Securities and
Exchange Commission relating to the registration of 1,585,076 shares (the
"Shares") of common stock, par value of $.01 per share, of the Company (the
"Common Stock"), which Shares have been or will be issued as contemplated in the
Registration Statement.
Based upon our examination of such documents and records as we have deemed
relevant and necessary and upon a certificate of an officer of the Company, we
are of the opinion that the Shares are duly authorized, and are either validly
issued, fully paid and non-assessable shares of Common Stock if previously
issued or will be validly issued, fully paid and non-assessable shares of Common
Stock upon issuance by the Company if such shares of Common Stock have not been
previously issued.
We hereby consent to the filing of this opinion letter as Exhibit 5 to the
Registration Statement and to the use of our name under the heading "Legal
Matters" in the related Prospectus.
Sincerely yours,
ZACK, SPARBER, KOSNITZKY,
TRUXTON, SPRATT & BROOKS, P.A.
/s/ Michael Kosnitzky, Esq.
- ---------------------------
Michael Kosnitzky, Esq.
For the Firm
Exhibit 10
AT&T COMMISSION AGREEMENT
This Agreement is entered into between AT&T Communications, Inc.,
(hereinafter "AT&T"), and Peoples Telephone Company, Inc., a New York
corporation with offices at 2300 N. W. 89th Place Miami, Florida 33172, an
Independent Payphone Provider (hereinafter "Peoples").
WHEREAS, AT&T desires to promote telephone calling convenience for
customers who wish to make telephone calling card calls and other types of
operator assisted calls from public telephones at independent payphone
provider locations; and
WHEREAS, Peoples wishes to participate in and to make available to
other qualified Independent Payphone Providers ("IPP[s]"), a program which
provides commissions on AT&T Non-Sent Paid calls placed from public
telephones at their locations ("Locations").
NOW, THEREFORE, in consideration of the mutual benefits accruing to
each party, the parties hereby covenant and agree as follows:
1.0 DEFINITIONS
1.1 "AT&T Revenues" - means billed domestic and international revenues
for AT&T Non-Sent Paid Calls (including 0+,00, 800 OPERATOR, 800 CALL ATT ,
800-321-0288, and 10-288-0 calls but excluding 500, 700, 900, Directory
Assistance and all other 800 calls), originated from Qualifying IPP
Provider Telephones. AT&T Revenues for Qualifying IPP Provider Telephones
located in areas where tracking of AT&T Non-Sent Paid Calls is not
available shall be calculated pursuant to the Commission Payment Plan set
forth in Attachment B hereto.
1.2 "Sent Paid Calls" - means coin calls made from IPP Provider
Telephones.
1.3 "Non-Sent Paid Calls" - means collect calls, calls billed to a
third telephone number and calls billed to telephone calling cards and
commercial credit cards, but does not include "0-" calls.
1.4 "AT&T Non-Sent Paid Calls" - means Non Sent Paid Calls that are
carried on the AT&T Network.
1.5 "AT&T Undesignated Non-Sent Paid Calls" - means Non-Sent Paid Calls
handled through AT&T's operator services systems and carried on the AT&T
Network without dialing 800 OPERATOR, 800 CALL ATT, 800-321-0288.
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1.6 "AT&T Undesignated Non-Sent Paid Revenues" - means billed domestic
and international revenues for AT&T Undesignated Non-Sent Paid Calls
originated from Qualifying IPP Provider Telephones. AT&T Undesignated
Non-Sent Paid Revenues for Qualifying IPP Provider Telephones located in
areas where tracking of AT&T Undesignated Non-Sent Paid Calls is not
available shall be calculated pursuant to the Commission Payment Plan set
forth in Attachment B hereto.
1.7 "IPP Provider(s)" - means independent private payphone providers to
whom Peoples makes available, according to the terms of this Agreement, a
program which provides commissions on AT&T Non-Sent Paid Calls or AT&T
Undesignated Non-Sent Paid Calls placed from public telephones at the
independent payphone providers' locations.
1.8 "IPP Provider Telephone(s)" - means coin or coinless pay telephone
stations operated by Peoples or an IPP Provider which are listed in
Attachments A-1, A-2, A-3 and A-4, which Attachments may be modified by
the mutual consent of the parties during the term of this Agreement.
1.9 "Qualifying IPP Provider Telephone(s)" - means IPP Provider
Telephone(s) that meets all of the requirements of Section 3. herein, which
must be met and adhered to qualify and be eligible to receive commissions.
1.10 "Locations" - means, collectively, Peoples Locations and IPP
Provider Locations.
1.11 Embedded Base Contracts -means contracts which are in existence on
the date this Agreement becomes effective, pursuant to which Peoples
provides public telephones to its customers or aggregates the inter and/or
intraLATA traffic of other IPP Providers.
1.12 New Contracts - means contracts which become effective after the
date this Agreement becomes effective, pursuant to which Peoples provides
public telephones to its customers or aggregates the inter and/or intraLATA
traffic of other IPP Providers.
1.13 Exhibit 1 to this Agreement is an example of the terms and
conditions to be set forth in a separate agreement between Peoples and
other IPP Providers, as stated in Section 2.
1.14 Attachment(s) A are identified as follows, and additional
Attachment(s) As may be added during the Term of this Agreement.:
A-1 Peoples Embedded Base Contract(s) Locations
A-2 Peoples New Contract(s) Locations
A-3 IPP Provider Embedded Base Contract(s) Locations
A-4 IPP Provider New Contract(s) Locations
A-5 McDonald's Locations
A-6 Atlantic Telco Locations subject to an AT&T/Atlantic
Telco agreement, dated April 21, 1994*
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* All other Atlantic Telco telephones subject to this agreement shall be
treated as Peoples' Telephones under A-1.
2.0 REPRESENTATIONS AND WARRANTIES
2.1 Peoples represents and warrants that it has entered into a separate
agreement with each IPP Provider that has a Location(s) listed on
Attachments A-3 and/or A-4 and that such agreement is for the benefit of
Peoples and AT&T. The terms and conditions of such agreement shall be
substantially the same as those set forth in Exhibit 1 or as mutually
agreed upon by the parties hereto.
2.2 Peoples represents and warrants that it is authorized to operate
each of its Qualifying IPP Provider Telephone stations at the Locations
listed in Attachment A-1 and A-2, and that it owns or controls more than a
fifty percent (50%) asset or equity interest in each entity which operates
the telephones that are included within Attachment A-1 and A-2. Peoples
further represents and warrants that it has complied and will comply with
all state and federal regulatory requirements relating to the operation of
such stations.
2.3 Peoples represents and warrants that it is authorized to choose the
operator services provider for each Qualifying IPP Provider Telephone
listed in Attachment A-1 and A-2 for which Peoples is authorized to direct
traffic to AT&T.
2.4 Peoples represents and warrants that it shall be responsible for
the acquisition, installation, maintenance and coin collection for its
Qualifying IPP Provider Telephones listed in Attachment A-1 and A-2; for
the payment of all Local Exchange Company (LEC) access line and usage
charges; and for the handling of refunds on Sent Paid Calls associated with
the operation of such stations.
2.5 AT&T represents and warrants that its rates, terms and conditions
of service shall comply with all applicable state and federal regulations.
3.0 QUALIFYING IPP PROVIDER TELEPHONES
3.1 Each Qualifying IPP Provider Telephone Station shall be connected
to an MTS, 1MB, LEC Customer-Owned Coin Operated Telephone (COCOT) or other
approved public telephone tariffed access line.
3.2 All undesignated Non-Sent Paid interLATA calls from the Qualifying
IPP Provider Telephones shall be handled through AT&T's Operator Services
Systems and carried on the AT&T Network. Nothing in this Agreement shall
affect Peoples or IPP's right to arrange for the provision of Sent-Paid
calls from the Qualifying IPP Provider Telephones or 0- calls, where such
calls are not required to be sent to AT&T under this Agreement. Peoples or
IPP Provider shall not utilize any manual or mechanical procedure to (a)
divert undesignated Non-Sent Paid interLATA calls to any other carrier or
to convert such calls
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into Sent-Paid ("1+") calls, (b) divert AT&T "800" access calls to any
other carrier or to convert such calls into Sent-Paid ("1+") calls or (c)
divert any AT&T "800" access call to the AT&T "10288" access code.
3.3 Each Qualifying IPP Provider Telephone station shall have call
screening capability (where available from the LEC) to identify the station
to operators as a privately owned public telephone.
3.4 Peoples and IPP Provider shall make all necessary arrangements so
that each Qualifying IPP Provider Telephone allows access to the 800, 950,
and 10XXX access code numbers of other providers of operator services, as
required by the Telephone Operator Consumer Services Improvement Act of
1990, the Federal Communications Commission, or any applicable state law or
regulation. Nothing herein is intended to increase Peoples' liability from
that which it may have under applicable law or regulation for any IPP
Provider violation with reference to the foregoing.
3.5 In jurisdictions where AT&T is authorized to provide intraLATA
service, each Qualifying IPP Provider Telephone station will, at AT&T's
request and where technically feasible, permit callers to access the
"10288" dialing code to place intraLATA AT&T calls.
3.6 At such time as AT&T has regulatory authority to handle
undesignated intraLATA and/or local Non-Sent Paid Calls through AT&T's
Operator Services Systems and to carry such calls on the AT&T Network, AT&T
may elect to handle such calls from Qualifying IPP Provider Telephones by
giving written notice to Peoples. Peoples shall, in turn, transmit such
notice to any other IPP Providers participating in the commission program
established by this Agreement. AT&T may make this election with respect to
all or any part of the Qualifying IPP Provider Telephones. Peoples shall
implement, for its own telephones, and cause other participating IPP
Providers to implement, any such election within thirty (30) days after
receipt of AT&T's notice by causing all undesignated intraLATA and/or local
Non-Sent Calls on Qualifying IPP Provider Telephones subject to the
election to be routed to AT&T's Operator Services Systems for carriage on
the AT&T Network. This election shall not apply to Qualifying IPP Provider
Telephones (1) covered by a binding contractual commitment requiring such
undesignated, intraLATA and/or local Non-Sent Paid Calls to be delivered to
another carrier, until such commitment expires or can be terminated without
a breach of contract or payment of termination charges, provided that AT&T
pays commissions to Peoples subject to Attachment B of this Agreement, or
(2) located in a state which has in effect, upon execution of this
agreement, a "Set Use Fee" or a "Pay Station Service Charge", until such
time as AT&T bills and remits to Peoples any applicable charges or fees.
3.7 Peoples and IPP Provider shall provide dialing instructions at or
near each Qualifying IPP Provider Telephone which will inform callers how
to make AT&T Non-Sent Paid Calls from such telephones.
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3.8 Peoples and IPP Provider shall be the customer of record for the
local service in connection with its Qualifying IPP Provider Telephones.
In the event that the line number of a telephone listed in Attachments A-1,
A-2 A- 3, A-5 or A-6 is shown in AT&T's records to belong to a party other
than the party listed in those Attachments, AT&T may request Peoples to
provide AT&T with the appropriate LEC bill or LEC Verification indicating
that the customer of record for such station is the party shown on the
applicable Attachment. If Peoples fails to provide such information within
ten (10) days of AT&T's request, AT&T shall not be required to pay
commissions on such stations from the date of AT&T's request through the
date AT&T receives the requested information. AT&T shall not be required to
pay commissions for those stations listed in Attachment A-4 relating to any
Qualifying IPP Provider Telephone station unless Peoples, prior to the
effective date of this Agreement and prior to the effective date of any
modification of or addition to Attachment A-4 has provided AT&T with the
appropriate LEC bill or LEC Letter of Verification indicating that the IPP
Provider is the customer of record for such station.
4.0 PEOPLES RESPONSIBILITIES
4.1 Peoples shall have each IPP sign a statement directing AT&T to make
commission payments for their respective Locations directly to Peoples.
Peoples shall submit a copy of any such statement to AT&T immediately upon
receipt.
4.2 Peoples will use its best efforts to retain its Locations in
Attachments A-1, A-2, A-5 and A-6 hereto and/or IPP Provider Locations in
Attachments- A-3 and A-4 during the term of this Agreement.
4.3 No private pay telephones managed or operated by an IPP Provider
which are currently under an AT&T Individual Commission Agreement
("ICA")for "0+" service may be brought under this Agreement, until such ICA
has been terminated or has expired. Neither Peoples nor any IPP Provider
shall induce, or attempt to induce, encourage or counsel the manager,
operator or employee of any private pay telephone currently covered by an
ICA to terminate, discontinue or not renew an ICA. Peoples or IPP Provider
shall seek verification from AT&T as to whether a private pay telephone is
covered by an ICA.
4.4 Peoples must inform AT&T of the telephone line numbers for each of
those Qualifying IPP Provider Telephones listed in Attachment A-1, A-2,
A-3, A-4, A-5 and A-6, and of all changes or additions to those numbers.
AT&T is not obligated to pay commissions described in Section 5, below,
unless and until it has been provided with correct line numbers for all of
the Qualifying IPP Provider Telephones listed in Attachments A-1 A-2, A-3,
A-4, A-5 and A-6.
5.0. AT&T RESPONSIBILITIES
5.1 AT&T agrees to pay to Peoples, and as may be directed by the other
IPPs, a monthly commission at the rate as set forth in Attachment B on the
AT&T Revenues for
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AT&T Non-Sent Paid Calls placed from Qualifying IPP Provider Telephones
Locations listed in Attachments A-1, A-3 A-5 and A-6, provided that Peoples
complies with all requirements of this Agreement and IPP Provider complies
with all of the requirements set forth in the IPP's agreement with Peoples
including, but not limited to, the access requirements of the Telephone
Operator Consumer Services Improvement Act of 1990. No commission shall be
due from AT&T for AT&T Non-Sent Paid Calls for any Qualifying IPP Provider
Telephone for any period that it fails to meet such requirements.
5.2 AT&T agrees to pay to Peoples, and as may be directed by the IPPs,
a monthly commission at the rate as set forth in Attachment B on the AT&T
revenues for AT&T Undesignated Non-Sent Paid Calls placed from Qualifying
IPP Provider Telephones at Locations listed in Attachments A-2 and A-4,
provided that Peoples complies with all requirements of this Agreement and
IPP Provider complies with all of the requirements set forth in the IPP's
agreement with Peoples including, but not limited to, the access
requirements of the Telephone Operator Consumer Services Improvement Act of
1990. No commission shall be due from AT&T for AT&T Undesignated Non-Sent
Paid Calls for any Qualifying IPP Provider Telephone for any period that it
fails to meet such requirements.
5.3 AT&T agrees that it will accurately record all data necessary to
assure that all calls are properly rated and that all commissions are
properly calculated.
5.4 AT&T, in its sole discretion, reserves the right to exclude or
remove a Location and/or telephone station from inclusion under this
Agreement, but shall continue to pay applicable commissions through the
date the station is removed from this Agreement. In the event of such
exclusion Peoples has the right to select an alternative carrier for the
excluded station.
5.5 AT&T Non-Sent Paid Revenues will be calculated based on a monthly
period beginning on the 16th day of each calendar month and ending on the
15th day of the following month.
5.6 AT&T shall have the right to conduct up to four (4) compliance
audits per year of the telephones subject to this Agreement. Up to ten
percent (10%) of the total number of telephones subject to this Agreement
may be audited under a single audit. AT&T shall provide Peoples with a
written summary of the results of each such audit, specifying by telephone
number and location, each telephone not in compliance and the specifics of
non-compliance. To be "in-compliance" a telephone must meet all the
requirements set forth in Section 3.0 (QUALIFYING IPP PROVIDER TELEPHONES)
above. Peoples shall have ten (10) days from date of receipt of the audit
results to bring the non-complying telephones into compliance, and so
notify AT&T in writing. AT&T may, at its option, cease paying commissions
on any non-compliant stations.
6.0 SIGNAGE
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6.1 Peoples and IPP Provider shall post on or near each Qualifying IPP
Provider Telephone, in plain view of consumers, a notice identifying AT&T
as the provider of operator services for such telephone, together with all
other information required to be provided under any applicable federal or
state law or regulation and the Telephone Operator Consumer Services
Improvement Act of 1990. Peoples and IPP Provider shall not make use of
AT&T's logo without obtaining AT&T's prior written consent. Peoples
further agrees:
6.1.1 AT&T is the only interLATA "0+" long distance company whose
name or logo appears on the Qualifying IPP Provider Telephones and their
associated enclosures;
6.1.2 If AT&T provides any AT&T signage, all such signage remains
the property of AT&T and will be removed by Peoples and/or IPP Provider and
returned to AT&T by Peoples upon the deletion of any Qualifying IPP
Provider Telephone(s) from this Agreement during its term or at the
termination of this Agreement; and
6.1.3 Peoples and IPP Provider shall make no other advertising,
marketing, publicity, or other like uses of AT&T's name and/or logos
without obtaining AT&T's prior written consent.
7.0 TERM AND TERMINATION
7.1 This Agreement shall become effective as of the 16th day of April,
1995 and will remain in effect for a period of twenty-four (24) months
("Initial Term"). Thereafter, this Agreement shall be automatically renewed
for additional one (1) year term(s) ("Renewal Term") unless either party
gives the other written notice of non-renewal at least thirty (30) days
prior to end of the Initial Term or any Renewal Term. Effective on the
effective date of this Agreement, this Agreement will automatically
supersede and replace in its entirety the Commission Agreement entered into
October 11, 1991 by Peoples and AT&T, and those portions of the AT&T
PRIVATE PAYPHONE OWNER INDIVIDUAL COMMISSION AGREEMENT entered into by AT&T
and Atlantic Telco, Inc. April 21 1994, and the AGREEMENT dated September
30, 1992 between Peoples and AT&T (covering provision of telephones at
certain locations of the McDonald's Corporation) which are inconsistent
with the terms and conditions of this Agreement, provided, however, nothing
herein shall relieve AT&T of any financial obligations it may have accrued
under the October 11, 1991 Commission Agreement, as amended
7.2 If, without reasonable cause, either party fails to meet any
material term of this agreement, either party may issue a Notice of
Default. Upon receipt of such Notice of Default, defaulting Party shall
have thirty (30) days to cure said default. If defaulting Party does not
cure such default within thirty (30) days after the date of the Notice of
Default, the other Party may terminate this Agreement. The terminating
party shall not be liable for any damages relating to its termination
pursuant to this Section, provided, however, that AT&T shall be liable to
Peoples for all commissions earned pursuant to Section 5. above until the
date of termination.
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7.3 Either party may terminate this Agreement with respect to any or
all Qualifying IPP Provider Telephones listed in Attachments A-1, A-2, A-3,
A-4, A-5 and A-6 by sending prior written notice to the other party if the
Federal Communications Commission, a State Public Utilities Commission or a
court of competent jurisdiction issues an order or ruling which contains
terms or conditions which materially and adversely affect this Agreement,
its profitability to the party, or the party's ability to perform its
obligations as set forth herein. In addition, if applicable rules and
regulations change, so that Peoples and/or IPP Provider is not permitted to
select the interexchange carrier for all "0+" dialed interLATA calls from
the covered telephones, Peoples and/or IPP Provider's duty to route all
such calls to AT&T will end, and AT&T may terminate this Agreement.
Termination of this Agreement under this paragraph will not give either
party any right to seek damages as long as the parties comply with their
obligations up to the date of termination.
8.0 INDEMNIFICATION
8.1 Peoples shall indemnify and hold AT&T harmless against any loss,
cost, claim, injury, expense or liability, including reasonable attorney's
fees resulting from:
8.1.1 Any breach of the warranties set forth in Section 2. above;
8.1.2 Any claim by any third party for injury to person or
property arising out of Peoples and/or IPP Provider's
ownership or operation of the Qualifying IPP Provider
Telephones and associated equipment, except insofar as such
injury is exclusively the result of the negligence of AT&T
or its agents; and
8.1.3 Any claims against AT&T by any third party for commissions
relating to the Qualifying IPP Provider Telephones, except
where AT&T has unlawfully withheld payment of commissions
to Peoples for such claimant's phones.
8.2 AT&T shall indemnify and hold Peoples harmless against any loss,
cost claim or injury, expense or liability, including reasonable attorney's
fees resulting from AT&T's breach of any warranty it gave pursuant to
Section 2. above.
9.0 LIMITATION OF LIABILITY
9.1 Except in cases involving willful or wanton conduct, AT&T's
liability to Peoples and/or IPP Providers is limited to its obligations to
pay commissions as described above. NEITHER PEOPLES NOR AT&T SHALL BE
LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE
LOSS OR DAMAGE OF ANY KIND, INCLUDING LOST PROFITS (WHETHER OR NOT PEOPLES
OR AT&T HAD BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSS OR DAMAGE), BY
REASON OF ANY ACT OR OMISSION IN ITS PERFORMANCE UNDER THIS AGREEMENT
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10.0 ASSIGNMENT
10.1 Any assignment by Peoples of any right, obligation or duty, in
whole or in part, or of any other interest hereunder, without the prior
written consent of AT&T shall be void. All obligations and duties of
either party under this Agreement shall be binding on all successors in
interest or assigns of such party.
11.0 INSOLVENCY
11.1 AT&T shall have the right immediately to terminate this Agreement
if Peoples commences any proceeding under Chapter 7 or 11 of the United
States Bankruptcy Code or any other proceeding seeking relief from
creditors or the reorganization or composition of debts or the liquidation
and distribution of assets, including but not limited to, any assignment
for the benefit of creditors or the making of a proposal for the
composition of debts. AT&T shall also have the right immediately to
terminate this Agreement if any third party commences a proceeding against
Peoples of the nature described above, and such proceeding shall not have
been dismissed within sixty (60) days of the commencement of such
proceeding.
12.0 PROPRIETARY INFORMATION
12.1 The parties expressly agree that all information relating to AT&T
Non-Sent Paid Calls remains the property of AT&T and must be kept
confidential by Peoples and IPP Providers.
12.2 Other information deemed to be proprietary which is provided by one
party to the other in connection with this Agreement shall be marked in a
manner to indicate that it is considered proprietary or otherwise subject
to limited distribution. If such information is provided orally, the
disclosing party shall clearly identify it as proprietary at the time of
disclosure and reduce such information to tangible form within ten (10)
business days.
12.3 With respect to the proprietary information defined in Sections
13.1 and 13.2 above, the party receiving such information shall hold the
information in confidence and protect it in accordance with the security
restrictions by which it protects its own proprietary or confidential
information which it does not wish to disclose; restrict disclosure of such
information to its employees or agents with a need to know and not disclose
it to any other parties; advise those employees ad agents of their
obligations with respect to such information; and use such information only
for the purposes of this Agreement, except as may otherwise be agreed upon
in writing.
12.4 The party receiving such information shall have no obligation to
preserve the proprietary nature of any information which: was previously
known to it free of any obligation to keep it confidential; or is disclosed
to third parties by the other party without any restriction; or is or
becomes publicly available other than by unauthorized disclosure; or is
independently developed by it.
12.5 This Section 13 and the confidentiality obligations imposed
hereunder shall survive and remain in effect notwithstanding the
termination of this Agreement.
13.0 NOTICES
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13.1 All notices which may be given by any party to the other party
shall be in writing and shall be deemed to have been duly given on the date
delivered in person, transmitted electronically by facsimile deposited,
postage prepaid, in the United States mail via Certified Mail, return
receipt requested, or sent, postage prepaid, by overnight delivery service,
return receipt requested and addressed as follows:
To: Peoples Telephone Company, Inc.
2300 N. W. 89th Place
Miami, Florida 33172
Fax: 305-477-9890
ATTN: Mr. Robert Rubin
To: AT&T Communications, Inc.
1989 South Club Drive
West Palm Beach, FL 33414
Fax: 407 791-2869
ATTN: Ms. Gayle Jennings
If personal delivery is selected as the method of giving notice under this
Section, a receipt of such delivery shall be obtained.
13.2 The address to which notices are to be given by either party may be
changed by written notice given by such party to the other party pursuant
to this Section.
14.0 FORCE MAJEURE
14.1 Either party's delay in, or failure of, performance under this
Agreement shall be excused where such delay or failure is caused by an act
of God, fire or other catastrophe, electrical, computer or mechanical
failure, work stoppage, delays or failure to act of any carrier or agent or
any other cause beyond a party's direct control.
15.0 NO WAIVER
15.1 The failure of either party at any time to enforce any right or
remedy available to it under this Agreement with respect to any breach or
failure by the other party shall not be construed to be a waiver of such
right or remedy with respect to any other breach or failure by the other
party.
16.0 NO THIRD PARTY BENEFICIARIES
16.1 This Agreement shall not provide any person not a party to this
Agreement with any remedy, claim, liability, reimbursement, commission,
cause of action or other right in excess of those existing without
reference to this Agreement.
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17.0 INDEPENDENT CONTRACTOR
17.1 The parties are entering into this Agreement as independent
contractors. This Agreement is not intended to create, nor shall it be
construed as creating, any type of partnership, joint venture, or franchise
relationship between AT&T and Peoples.
18.0 GOVERNING LAW AND VENUE
18.1 This Agreement shall be governed by and interpreted in accordance
with the domestic laws of the State of Florida, and the parties expressly
subject themselves to such jurisdiction for the purposes of any legal
action brought pursuant to this Agreement. Any action filed to enforce or
interpret this Agreement shall be solely lodged in a State of Florida Court
located in Miami, Florida or the Federal District Court for the Southern
District of Florida.
19.0 SEVERABILITY
19.1 If any provision of this Agreement is held invalid, unenforceable
or void, the remainder of the Agreement shall not be affected thereby and
shall continue in full force and effect.
20.0 ENTIRE AGREEMENT; AMENDMENTS
20.1 This Agreement and any Attachments and Exhibits hereto constitute
the entire understanding between Peoples and AT&T, and supersedes all
prior understandings, oral or written representations, statements,
negotiations, proposals and undertakings with respect to the subject matter
hereof. All amendments to this Agreement must be in writing, must refer
specifically to this Agreement, and must be signed by authorized
representatives of the parties.
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22.0 HEADINGS
22.1 The headings in this Agreement are included for convenience only
and shall not be construed to define or limit any of the provisions
contained herein.
IN WITNESS WHEREOF, the parties have set their hands as of the day
and year first above written, acting through their authorized
representatives.
PEOPLES TELEPHONE COMPANY, INC. AT&T COMMUNICATIONS, INC.
_________________________________ _________________________________
Authorized Signature Authorized Signature
_________________________________ _________________________________
Typed or Printed Name Typed or Printed Name
_________________________________ _________________________________
Title Title
_________________________________ _________________________________
Date Date
_________________________________
Federal Tax ID
12
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Amendment No. 2 to Form S-3
of our report dated March 28, 1995, except as to the second paragraph of Note
17 and as to Note 18, which are as of May 31, 1995, appearing on page 32 of
Peoples Telephone Company, Inc.'s Annual Report on Form 10-K/A No. 2 amending
the Company's Annual Report on Form 10-K for the year ended December 31, 1994.
We also consent to the reference to us under the heading "Experts" in such
Prospectus.
/s/ PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP
Miami, Florida
July 26, 1995
