<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
-----------------------------------------
SCHEDULE 13D
Under the Securities Exchange Act of 1934
PRICELLULAR CORPORATION
(Name of issuer)
Class A Common Stock, Par Value $.01 Per Share
---------------------------
(Title of class of securities)
741504 10 4
(CUSIP number)
Brion Applegate Edward Grinacoff
Spectrum Equity Investors, L.P. Sandler Capital Management
245 Lytton Avenue, Suite 175 767 5th Avenue, 45th Floor
Palo Alto, CA 94301 New York, New York 10153
(415) 464-4600 (212) 754-8100
With a copy to: With a copy to:
Scott R. Haber, Esq. Joseph Young, Esq.
Latham & Watkins Baker & Botts, L.L.P.
505 Montgomery Street, Suite 1900 599 Lexington Avenue
San Francisco, CA 94111 New York NY 10022
(415) 391-0600 (212) 705-5088
----------------------------------------------
(Name, address and telephone number of person
authorized to receive notices and communications)
March 5, 1998
--------------------------------------------------
(Date of event which requires filing of this statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
statement because of Rule 13d-1(b)(3) or (4), check the following box: [ ]
Page 1 of 33 Pages
<PAGE> 2
SCHEDULE 13D
CUSIP No. 741504 10 4
1. Name of Reporting Person
SPECTRUM EQUITY INVESTORS, L.P.
2. Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [X]
3. SEC Use Only
4. Source of Funds
WC
5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
6. Citizenship or Place of Organization
Delaware
7. Sole Voting Power
-0-
Number of
Shares 8. Shared Voting Power
Beneficially 3,378,943
Owned By
Each
Reporting 9. Sole Dispositive Power
Person -0-
With
10. Shared Dispositive Power
3,378,943
11. Aggregate Amount Beneficially Owned by Each Reporting Person
3,378,943
12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares[ ]
13. Percent of Class Represented by Amount in Row (11)
13.4%
14. Type of Reporting Person
PN
Page 2 of 33 Pages
<PAGE> 3
SCHEDULE 13D
CUSIP No. 741504 10 4
1. Name of Reporting Person
SPECTRUM EQUITY ASSOCIATES, L.P.
2. Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [X]
3. SEC Use Only
4. Source of Funds
AF
5. Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) [ ]
6. Citizenship or Place of Organization
Delaware
7. Sole Voting Power
-0-
Number of
Shares 8. Shared Voting Power
Beneficially 3,378,943
Owned By
Each
Reporting 9. Sole Dispositive Power
Person -0-
With
10. Shared Dispositive Power
3,378,943
11. Aggregate Amount Beneficially Owned by Each Reporting Person
3,378,943
12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares[ ]
13. Percent of Class Represented by Amount in Row (11)
13.4%
14. Type of Reporting Person
PN
Page 3 of 33 Pages
<PAGE> 4
SCHEDULE 13D
CUSIP No. 741504 10 4
1. Name of Reporting Person
SPECTRUM EQUITY INVESTORS II, L.P.
2. Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [X]
3. SEC Use Only
4. Source of Funds
OO
5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
6. Citizenship or Place of Organization
Delaware
7. Sole Voting Power
-0-
Number of
Shares 8. Shared Voting Power
Beneficially -0- (See Item 5 below)
Owned By
Each
Reporting 9. Sole Dispositive Power
Person -0-
With
10. Shared Dispositive Power
-0- (See Item 5 below)
11. Aggregate Amount Beneficially Owned by Each Reporting Person
-0- (See Item 5 below)
12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares[ ]
13. Percent of Class Represented by Amount in Row (11)
0%
14. Type of Reporting Person
PN
Page 4 of 33 Pages
<PAGE> 5
SCHEDULE 13D
CUSIP No. 741504 10 4
1. Name of Reporting Person
SPECTRUM EQUITY ASSOCIATES II, L.P.
2. Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [X]
3. SEC Use Only
4. Source of Funds
OO
5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
6. Citizenship or Place of Organization
Delaware
7. Sole Voting Power
-0-
Number of
Shares 8. Shared Voting Power
Beneficially -0- (See Item 5 below)
Owned By
Each
Reporting 9. Sole Dispositive Power
Person -0-
With
10. Shared Dispositive Power
-0- (See Item 5 below)
11. Aggregate Amount Beneficially Owned by Each Reporting Person
-0- (See Item 5 below)
12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares[ ]
13. Percent of Class Represented by Amount in Row (11)
0%
14. Type of Reporting Person
PN
Page 5 of 33 Pages
<PAGE> 6
SCHEDULE 13D
CUSIP No. 741504 10 4
1. Name of Reporting Person
WILLIAM P. COLLATOS
2. Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [X]
3. SEC Use Only
4. Source of Funds
AF
5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
6. Citizenship or Place of Organization
United States
7. Sole Voting Power
-0-
Number of
Shares 8. Shared Voting Power
Beneficially 3,378,943
Owned By
Each
Reporting 9. Sole Dispositive Power
Person -0-
With
10. Shared Dispositive Power
3,378,943
11. Aggregate Amount Beneficially Owned by Each Reporting Person
3,378,943
12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares[ ]
13. Percent of Class Represented by Amount in Row (11)
13.4%
14. Type of Reporting Person
IN
Page 6 of 33 Pages
<PAGE> 7
SCHEDULE 13D
CUSIP No. 741504 10 4
1. Name of Reporting Person
BRION B. APPLEGATE
2. Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [X]
3. SEC Use Only
4. Source of Funds
AF
5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
6. Citizenship or Place of Organization
United States
7. Sole Voting Power
-0-
Number of
Shares 8. Shared Voting Power
Beneficially 3,378,943
Owned By
Each
Reporting 9. Sole Dispositive Power
Person -0-
With
10. Shared Dispositive Power
3,378,943
11. Aggregate Amount Beneficially Owned by Each Reporting Person
3,378,943
12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares[ ]
13. Percent of Class Represented by Amount in Row (11)
13.4%
14. Type of Reporting Person
IN
Page 7 of 33 Pages
<PAGE> 8
SCHEDULE 13D
CUSIP No. 741504 10 4
1. Name of Reporting Person
KEVIN MARONI
2. Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [X]
3. SEC Use Only
4. Source of Funds
OO
5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
6. Citizenship or Place of Organization
United States
7. Sole Voting Power
-0-
Number of
Shares 8. Shared Voting Power
Beneficially -0- (See Item 5 below)
Owned By
Each
Reporting 9. Sole Dispositive Power
Person -0-
With
10. Shared Dispositive Power
-0- (See Item 5 below)
11. Aggregate Amount Beneficially Owned by Each Reporting Person
-0- (See Item 5 below)
12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares[ ]
13. Percent of Class Represented by Amount in Row (11)
0%
14. Type of Reporting Person
IN
Page 8 of 33 Pages
<PAGE> 9
SCHEDULE 13D
CUSIP No. 741504 10 4
1. Name of Reporting Person
SANDLER CAPITAL MANAGEMENT
2. Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [X]
3. SEC Use Only
4. Source of Funds
WC
5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
6. Citizenship or Place of Organization
New York
7. Sole Voting Power
-0-
Number of
Shares 8. Shared Voting Power
Beneficially 367,168
Owned By
Each
Reporting 9. Sole Dispositive Power
Person -0-
With
10. Shared Dispositive Power
367,168
11. Aggregate Amount Beneficially Owned by Each Reporting Person
367,168
12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares[ ]
13. Percent of Class Represented by Amount in Row (11)
1.7%
14. Type of Reporting Person
PN
Page 9 of 33 Pages
<PAGE> 10
SCHEDULE 13D
CUSIP No. 741504 10 4
1. Name of Reporting Person
21ST CENTURY COMMUNICATIONS PARTNERS, L.P.
2. Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [X]
3. SEC Use Only
4. Source of Funds
OO
5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
6. Citizenship or Place of Organization
Delaware
7. Sole Voting Power
-0-
Number of
Shares 8. Shared Voting Power
Beneficially -0- (See Item 5 below)
Owned By
Each
Reporting 9. Sole Dispositive Power
Person -0-
With
10. Shared Dispositive Power
-0- (See Item 5 below)
11. Aggregate Amount Beneficially Owned by Each Reporting Person
-0- (See Item 5 below)
12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares[ ]
13. Percent of Class Represented by Amount in Row (11)
0%
14. Type of Reporting Person
PN
Page 10 of 33 Pages
<PAGE> 11
SCHEDULE 13D
CUSIP No. 741504 10 4
1. Name of Reporting Person
21ST CENTURY COMMUNICATIONS PARTNERS T-E, L.P.
2. Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [X]
3. SEC Use Only
4. Source of Funds
OO
5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
6. Citizenship or Place of Organization
Delaware
7. Sole Voting Power
-0-
Number of
Shares 8. Shared Voting Power
Beneficially -0- (See Item 5 below)
Owned By
Each
Reporting 9. Sole Dispositive Power
Person -0-
With
10. Shared Dispositive Power
-0- (See Item 5 below)
11. Aggregate Amount Beneficially Owned by Each Reporting Person
-0- (See Item 5 below)
12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares[ ]
13. Percent of Class Represented by Amount in Row (11)
0%
14. Type of Reporting Person
PN
Page 11 of 33 Pages
<PAGE> 12
SCHEDULE 13D
CUSIP No. 741504 10 4
1. Name of Reporting Person
21ST CENTURY COMMUNICATIONS FOREIGN PARTNERS, L.P.
2. Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [X]
3. SEC Use Only
4. Source of Funds
OO
5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
6. Citizenship or Place of Organization
Delaware
7. Sole Voting Power
-0-
Number of
Shares 8. Shared Voting Power
Beneficially -0- (See Item 5 below)
Owned By
Each
Reporting 9. Sole Dispositive Power
Person -0-
With
10. Shared Dispositive Power
-0- (See Item 5 below)
11. Aggregate Amount Beneficially Owned by Each Reporting Person
-0- (See Item 5 below)
12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares[ ]
13. Percent of Class Represented by Amount in Row (11)
0%
14. Type of Reporting Person
PN
Page 12 of 33 Pages
<PAGE> 13
SCHEDULE 13D
CUSIP No. 741504 10 4
1. Name of Reporting Person
SANDLER CAPITAL PARTNERS IV, L.P.
2. Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [X]
3. SEC Use Only
4. Source of Funds
OO
5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
6. Citizenship or Place of Organization
Delaware
7. Sole Voting Power
-0-
Number of
Shares 8. Shared Voting Power
Beneficially -0- (See Item 5 below)
Owned By
Each
Reporting 9. Sole Dispositive Power
Person -0-
With
10. Shared Dispositive Power
-0- (See Item 5 below)
11. Aggregate Amount Beneficially Owned by Each Reporting Person
-0- (See Item 5 below)
12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares[ ]
13. Percent of Class Represented by Amount in Row (11)
0%
14. Type of Reporting Person
PN
Page 13 of 33 Pages
<PAGE> 14
SCHEDULE 13D
CUSIP No. 741504 10 4
1. Name of Reporting Person
SANDLER CAPITAL PARTNERS IV, FTE, L.P.
2. Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [X]
3. SEC Use Only
4. Source of Funds
OO
5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
6. Citizenship or Place of Organization
Delaware
7. Sole Voting Power
-0-
Number of
Shares 8. Shared Voting Power
Beneficially -0- (See Item 5 below)
Owned By
Each
Reporting 9. Sole Dispositive Power
Person -0-
With
10. Shared Dispositive Power
-0- (See Item 5 below)
11. Aggregate Amount Beneficially Owned by Each Reporting Person
-0- (See Item 5 below)
12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares[ ]
13. Percent of Class Represented by Amount in Row (11)
0%
14. Type of Reporting Person
PN
Page 14 of 33 Pages
<PAGE> 15
SCHEDULE 13D
CUSIP No. 741504 10 4
1. Name of Reporting Person
SANDLER INVESTMENT PARTNERS, L.P.
2. Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [X]
3. SEC Use Only
4. Source of Funds
OO
5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
6. Citizenship or Place of Organization
Delaware
7. Sole Voting Power
-0-
Number of
Shares 8. Shared Voting Power
Beneficially -0- (See Item 5 below)
Owned By
Each
Reporting 9. Sole Dispositive Power
Person -0-
With
10. Shared Dispositive Power
-0- (See Item 5 below)
11. Aggregate Amount Beneficially Owned by Each Reporting Person
-0- (See Item 5 below)
12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares[ ]
13. Percent of Class Represented by Amount in Row (11)
0%
14. Type of Reporting Person
PN
Page 15 of 33 Pages
<PAGE> 16
SCHEDULE 13D
CUSIP No. 741504 10 4
1. Name of Reporting Person
MICHAEL J. MAROCCO
2. Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [X]
3. SEC Use Only
4. Source of Funds
AF
5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
6. Citizenship or Place of Organization
United States
7. Sole Voting Power
-0-
Number of
Shares 8. Shared Voting Power
Beneficially 664,068
Owned By
Each
Reporting 9. Sole Dispositive Power
Person -0-
With
10. Shared Dispositive Power
664,068
11. Aggregate Amount Beneficially Owned by Each Reporting Person
664,068
12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares[ ]
13. Percent of Class Represented by Amount in Row (11)
3.0%
14. Type of Reporting Person
IN
Page 16 of 33 Pages
<PAGE> 17
SCHEDULE 13D
CUSIP No. 741504 10 4
1. Name of Reporting Person
JOHN KORNREICH
2. Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [X]
3. SEC Use Only
4. Source of Funds
AF
5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
6. Citizenship or Place of Organization
United States
7. Sole Voting Power
-0-
Number of
Shares 8. Shared Voting Power
Beneficially 664,068
Owned By
Each
Reporting 9. Sole Dispositive Power
Person -0-
With
10. Shared Dispositive Power
664,068
11. Aggregate Amount Beneficially Owned by Each Reporting Person
664,068
12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares[ ]
13. Percent of Class Represented by Amount in Row (11)
3.0%
14. Type of Reporting Person
IN
Page 17 of 33 Pages
<PAGE> 18
SCHEDULE 13D
CUSIP No. 741504 10 4
1. Name of Reporting Person
HARVEY SANDLER
2. Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [X]
3. SEC Use Only
4. Source of Funds
PF, AF
5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
6. Citizenship or Place of Organization
United States
7. Sole Voting Power
214,022
Number of
Shares 8. Shared Voting Power
Beneficially 701,568
By
Each
Reporting 9. Sole Dispositive Power
Person 214,022
With
10. Shared Dispositive Power
701,568
11. Aggregate Amount Beneficially Owned by Each Reporting Person
915,590
12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares[ ]
13. Percent of Class Represented by Amount in Row (11)
4.2%
14. Type of Reporting Person
IN
Page 18 of 33 Pages
<PAGE> 19
SCHEDULE 13D
CUSIP No. 741504 10 4
1. Name of Reporting Person
ANDREW SANDLER
2. Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [X]
3. SEC Use Only
4. Source of Funds
AF
5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
6. Citizenship or Place of Organization
United States
7. Sole Voting Power
-0-
Number of
Shares 8. Shared Voting Power
Beneficially 664,068
Owned By
Each
Reporting 9. Sole Dispositive Power
Person -0-
With
10. Shared Dispositive Power
664,068
11. Aggregate Amount Beneficially Owned by Each Reporting Person
664,068
12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares[ ]
13. Percent of Class Represented by Amount in Row (11)
3.0%
14. Type of Reporting Person
IN
Page 19 of 33 Pages
<PAGE> 20
SCHEDULE 13D
CUSIP No. 741504 10 4
1. Name of Reporting Person
PHYLLIS SANDLER
2. Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [X]
3. SEC Use Only
4. Source of Funds
PF, OO
5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
6. Citizenship or Place of Organization
United States
7. Sole Voting Power
37,500
Number of
Shares 8. Shared Voting Power
Beneficially 214,022
Owned By
Each
Reporting 9. Sole Dispositive Power
Person 37,500
With
10. Shared Dispositive Power
214,022
11. Aggregate Amount Beneficially Owned by Each Reporting Person
251,522
12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares[ ]
13. Percent of Class Represented by Amount in Row (11)
1.2%
14. Type of Reporting Person
IN
Page 20 of 33 Pages
<PAGE> 21
ITEM 1. SECURITY AND ISSUER
This statement relates to the Class A Common Stock, par value $.01 per
share (the "Class A Common Stock"), of PriCellular Corporation, a Delaware
corporation (the "Company"). The principal executive offices of the Company are
located at 711 Westchester Avenue, White Plains, New York 10604.
ITEM 2. IDENTITY AND BACKGROUND
This Schedule 13D is being filed by Spectrum Equity Investors, L.P., a
Delaware limited partnership, Spectrum Equity Associates, L.P., a Delaware
limited partnership, Spectrum Equity Investors II, L.P., a Delaware limited
partnership, Spectrum Equity Associates II, L.P., a Delaware limited
partnership, William P. Collatos, Brion B. Applegate and Kevin Maroni
(collectively, the "Spectrum Reporting Persons"), and by Sandler Associates, a
New York limited partnership, Sandler Capital Management, a registered
investment adviser and a New York general partnership, 21st Century
Communications Partners, L.P., a Delaware limited partnership, 21st Century
Communications T-E, L.P., a Delaware limited partnership, 21st Century
Communications Foreign Partners, L.P., a Delaware limited partnership, Sandler
Capital Partners IV, L.P., a Delaware limited partnership, Sandler Capital
Partners IV, FTE, L.P., a Delaware limited partnership, Sandler Investment
Partners, L.P., a Delaware limited partnership, Michael J. Marocco, John
Kornreich, Harvey Sandler, Andrew Sandler and Phyllis Sandler (collectively, the
"Sandler Reporting Persons," and together with the Spectrum Reporting Persons,
the "Reporting Persons"). The following sets forth, for each Reporting Person,
its:
(a) Name;
(b) Residence or business address;
(c) Present principal occupation or employment;
(d) Whether or not, during the last five years, such person has been
convicted in a criminal proceeding;
(e) Whether or not, during the last five years, such person was a party to a
civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order; and
(f) Citizenship (in the case of natural persons).
1. (a) Spectrum Equity Investors, L.P., a Delaware limited partnership
("SEI")
(b) 245 Lytton Avenue, Suite 175
Palo Alto, CA 94301
(c) Holding, directly or through partnerships, investments in
companies
(d) No
(e) No
2. (a) Spectrum Equity Associates, L.P., a Delaware limited partnership
("SEA"). SEA is the sole general partner of SEI.
(b) 245 Lytton Avenue, Suite 175
Palo Alto, CA 94301
(c) Holding, through partnerships, investments in companies
(d) No
(e) No
3. (a) Spectrum Equity Investors II, L.P., a Delaware limited
partnership ("SEI2")
(b) 245 Lytton Avenue, Suite 175
Palo Alto, CA 94301
(c) Holding, directly or through partnerships, investments in
companies
(d) No
(e) No
Page 21 of 33 Pages
<PAGE> 22
4. (a) Spectrum Equity Associates II, L.P., a Delaware limited
partnership ("SEA2"). SEA2 is the sole general partner of SEI2.
(b) 245 Lytton Avenue, Suite 175
Palo Alto, CA 94301
(c) Holding, through partnerships, investments in companies
(d) No
(e) No
5. (a) William P. Collatos, is a general partner of SEA and SEA2
(b) One International Place
Boston, MA 02110
(c) General Partner of partnerships engaged in the investment
business
(d) No
(e) No
(f) United States
6. (a) Brion Applegate, is a general partner of SEA and SEA2
(b) 245 Lytton Avenue,
Suite 175
Palo Alto, CA 94301
(c) General Partner of partnerships engaged in the investment
business
(d) No
(e) No
(f) United States
7. (a) Kevin Maroni, is a general partner of SEA2
(b) One International Place
Boston, MA 02110
(c) General Partner of partnerships engaged in the investment
business
(d) No
(e) No
(f) United States
8. (a) Sandler Associates, a New York limited partnership ("SA")
(b) 767 Fifth Avenue, 45th Floor
New York, NY 10153
(c) Investments
(d) No
(e) No
9. (a) Sandler Capital Management, a registered investment adviser and
a New York general partnership. ("SCM"). SCM holds shares on
behalf of certain managed accounts with respect to which SCM
exercises investment and voting discretion. SCM is also a
general partner of SIP (as defined below), which is a general
partner of 21st Domestic, 21st TE, 21st FP, SCP, SCPFTE (all as
defined below).
(b) 767 Fifth Avenue, 45th Floor
New York, NY 10153
(c) Investments
(d) No
(e) No
Page 22 of 33 Pages
<PAGE> 23
10. (a) 21st Century Communications Partners, L.P., a Delaware limited
partnership ("21st Domestic")
(b) 767 Fifth Avenue, 45th Floor
New York, NY 10153
(c) Investments
(d) No
(e) No
11. (a) 21st Century Communications T-E, L.P., a Delaware limited
partnership ("21st TE")
(b) 767 Fifth Avenue, 45th Floor
New York, NY 10153
(c) Investments
(d) No
(e) No
12. (a) 21st Century Communications Foreign Partners, L.P., a Delaware
limited partnership ("21st FP")
(b) 767 Fifth Avenue, 45th Floor
New York, NY 10153
(c) Investments
(d) No
(e) No
13. (a) Sandler Capital Partners IV, L.P., a Delaware limited partnership
("SCP")
(b) 767 Fifth Avenue, 45th Floor
New York, NY 10153
(c) Investments
(d) No
(e) No
14. (a) Sandler Capital Partners IV, FTE, L.P. a Delaware limited
partnership ("SCPFTE")
(b) 767 Fifth Avenue, 45th Floor
New York, NY 10153
(c) Investments
(d) No
(e) No
15. (a) Sandler Investment Partners, L.P., a Delaware limited partnership
("SIP"). SIP is the general partner of each of 21st Domestic,
21st TE, 21st FP, SCP and SCPFTE.
(b) 767 Fifth Avenue, 45th Floor
New York, NY 10153
(c) General Partner of partnerships engaged in the investment
business
(d) No
(e) No
16. (a) Michael J. Marocco, is the sole shareholder of MJDM Corp., a
general partner of SCM, and a general partner of SA.
(b) 767 Fifth Avenue, 45th Floor
New York, NY 10153
(c) General Partner of partnerships engaged in the investment
business
(d) No
(e) No
Page 23 of 33 Pages
<PAGE> 24
(f) United States
17. (a) John Kornreich, is the majority shareholder of Four JK Corp., a
general partner of SCM, and a general partner of SA.
(b) 767 Fifth Avenue, 45th Floor New York, NY 10153
(c) General Partner of partnerships engaged in the investment
business
(d) No
(e) No
(f) United States
18. (a) Harvey Sandler is the sole shareholder of ARH Corp., a general
partner of SCM, and a general partner of SA. Harvey Sandler is
the husband of Phyllis Sandler and the father of Andrew Sandler.
(b) 767 Fifth Avenue, 45th Floor
New York, NY 10153
(c) General Partner of partnerships engaged in the investment
business
(d) No
(e) No
(f) United States
19. (a) Andrew Sandler, is the majority member of ALSI, LLC, a general
partner of SCM, and a general partner of SA. Andrew Sandler is
the son of Harvey Sandler and Phyllis Sandler.
(b) 767 Fifth Avenue, 45th Floor
New York, NY 10153
(c) General Partner of partnerships engaged in the investment
business
(d) No
(e) No
(f) United States
20. (a) Phyllis Sandler is the wife of Harvey Sandler and the mother of
Andrew Sandler. (b) 767 Fifth Avenue, 45th Floor New York,
NY 10153
(c) Investor
(d) No
(e) No
(f) United States
21. (a) MJDM Corp., a New York corporation, is a general partner of SCM
(b) 767 Fifth Avenue, 45th Floor
New York, NY 10153
(c) Corporation engaged in the investment business
(d) No
(e) No
22. (a) Four JK Corp., a Delaware corporation, is a general partner of
SCM
(b) 767 Fifth Avenue, 45th Floor
New York, NY 10153
(c) Corporation engaged in the investment business
(d) No
(e) No
Page 24 of 33 Pages
<PAGE> 25
23. (a) ARH Corp., a Delaware corporation, is a general partner of SCM
(b) 767 Fifth Avenue, 45th Floor
New York, NY 10153
(c) Corporation engaged in the investment business
(d) No
(e) No
24. (a) ALSI, LLC., a Delaware corporation, is a general partner of SCM
(b) 767 Fifth Avenue, 45th Floor
New York, NY 10153
(c) Limited Liability Company engaged in the investment business
(d) No
(e) No
ITEM 3. SOURCE AND AMOUNT OF CONSIDERATION.
Spectrum Reporting Persons:
The 3,378,943 shares of Class A Common Stock beneficially owned by the
Spectrum Reporting Persons are comprised of (i) 2,055,988 shares of Class A
Common Stock issuable upon conversion of 2,055,988 shares of Class B Common
Stock, $.01 par value ("Class B Common Stock") held by SEI, and (ii) 724,464
shares of Class A Common Stock issuable upon conversion of the Series A
Cumulative Convertible Preferred Stock, $.01 par value ("Series A Preferred
Stock") held by SEI. The number of shares of Class A Common Stock issuable upon
conversion of the Series A Preferred Stock assumes the occurrence of a voluntary
conversion on December 31, 1997. The source and amount of funds for the
acquisition of the shares of Class B Common Stock was the general working
capital of SEI. Such shares of Class B Common Stock were acquired for an
aggregate of $7,022,915, and such shares of Series A Preferred Stock were
acquired for an aggregate of $5,000,000.
Sandler Reporting Persons:
The source and amount of funds for the acquisition of the shares of
Class A Common Stock was the general working capital of SA, SCM and the working
capital in the personal investment accounts of Harvey and Phyllis Sandler. In
the aggregate 1,162,140 shares of the Class A Common Stock were acquired for a
total purchase prices of $10,142,108.
<TABLE>
<CAPTION>
Name No. of Shares Purchase Price
- ---- ------------- --------------
<S> <C> <C>
Sandler Associates 448,750 $3,711,962
Accounts Managed by SCM 461,868 $4,416,743
Harvey Sandler 214,022 $1,702,840
Phyllis Sandler 37,500 $ 310,563
</TABLE>
ITEM 4. PURPOSE OF THE TRANSACTION
On March 5, 1998, SEI2 and 21st Domestic, 21st TE, 21st FP, SCP and
SCPFTE (together, the "Sandler Investors"), other investors (and together with
SEI2 and the Sandler Investors, the "Investors") and American Cellular
Corporation, a newly-formed Delaware corporation ("ACC"), entered into a Stock
Purchase Agreement (the "Stock Purchase Agreement") pursuant to which the
Investors agreed to purchase for cash Class A Common Stock in ACC in an
aggregate amount of $25 million upon execution of the Merger Agreement (as
defined below) and series A preferred stock in ACC in an aggregate amount of
$325 million upon consummation of the Merger (as defined below).
Contemporaneously therewith, ACC and the Investors also entered into a
Stockholders Agreement (the "Stockholders Agreement") which provides for certain
transfer restrictions and rights with respect
Page 25 of 33 Pages
<PAGE> 26
to the shares of capital stock of ACC held by the Investors. Pursuant to the
Stockholders Agreement, certain actions of ACC shall require the prior approval
of five of ACC's eight Directors, and in some cases, the supermajority vote of
ACC's stockholders. Pursuant to the Stock Purchase Agreement, SEI2 and the
Sandler Investors have agreed to purchase 14.3% and 12.9%, respectively, of the
capital stock of ACC. Pursuant to the Stockholders Agreement, SEI2 has the right
to appoint two, and SCM has the right to appoint one, of ACC's eight directors.
SEI2 has appointed Brion B. Applegate and Kevin Maroni, and SCM has appointed
Michael Marocco, to ACC's Board of Directors. ACC's stockholders have appointed
Brion B. Applegate as Chairman, Chief Executive Officer and Treasurer. Upon
consummation of the Merger (as defined below), Mr. Applegate shall resign from
such positions.
On March 6, 1998, the Company and ACC entered into an Agreement and Plan
of Merger (the "Merger Agreement"). Pursuant to the Merger Agreement and subject
to the terms and condition set forth therein, ACC will be merged with and into
the Company, with the Company being the surviving corporation of such merger
(the "Merger"). At the Effective Time (as defined in the Merger Agreement) of
the Merger, each issued and outstanding share of Class A Common Stock and Class
B Common Stock of the Company will, in each case, be converted into the right to
receive $14.00 in cash, without interest (the "Merger Consideration"), and each
issued and outstanding share of Series A Cumulative Convertible Preferred Stock,
par value $0.01 per share (the "Series A Preferred Stock"), of the Company will
be converted into the right to receive the product of the Merger Consideration
and the number of Class A Shares into which each such share of Series A
Preferred Stock is convertible at such time in connection with a change of
control. The consummation of the Merger is subject to certain conditions,
including adoption and approval of the Merger and the Merger Agreement by the
stockholders of the Company, and receipt of all required regulatory consents or
approvals.
In connection with the execution of the Merger Agreement, AT&T Wireless,
Inc., The Thomas H. Lee Company, Steven Price and Eileen Farbman (collectively,
the "Principal Shareholders") entered into a Voting Agreement with ACC. Pursuant
to the Voting Agreement, the Principal Shareholders, the beneficial owners of
approximately 39% of the outstanding Common Stock and Preferred Stock of the
Company (or 57% of the fully diluted voting power of the Company), agreed to
vote their shares in favor of the approval and adoption of the Merger Agreement.
The Voting Agreement will terminate upon termination of the Merger Agreement.
Pursuant to a Side Letter (the "Side Letter") dated March 6, 1998, SEI agreed
not to exercise its right (if any) to require the Company to redeem any or all
of its Series A Preferred Stock and to vote to approve and adopt an amendment to
the Certificate of Designation of the Series A Preferred Stock providing that
the holders of the Company's Series A Preferred Stock shall have no rights under
Section 5(b) of such Certificate of Designation, to the extent that such rights
would have otherwise arisen solely from board of director or shareholder
approval of the Merger, the execution by the Company of the Merger Agreement,
the execution of the Voting Agreement or the consummation of the Merger.
These summaries of the (i) Stock Purchase Agreement, (ii) Stockholders
Agreement, (iii) Merger Agreement, (iv) Voting Agreement, and (v) Side Letter
are qualified in their entirety by reference to such agreements, copies of which
are attached as Exhibits 2 to 6 hereto (or incorporated herein by reference to
the Company's Report on Form 8-K filed on March 9,1998). Each such agreement is
hereby incorporated herein by reference.
No Reporting Person currently has any plans or proposals relating to the
activities described in paragraphs (a) - (j) of Item 4 of this Schedule 13D.
Page 26 of 33 Pages
<PAGE> 27
ITEM 5. INTEREST IN SECURITIES OF THE COMPANY
(a) The following list sets forth the aggregate number and percentage
(based on 21,824,566 shares of Class A Common Stock outstanding as of March 6,
1998) of outstanding shares of Class A Common Stock which each person named in
Item 2 beneficially owns or may be deemed to beneficially own as of March 16,
1998:
<TABLE>
<CAPTION>
Shares of Class A Common Percentage of Shares of
Stock Class A Common Stock
Name Beneficially Owned Beneficially Owned
---- ------------------------ -----------------------
<S> <C> <C>
Sandler Capital Management 367,168 (1) 1.7%
Sandler Investment Partners, L.P. 0 0%
21st Century Communications Partners, L.P. 0 0%
21st Century Communications T-E, L.P. 0 0%
21st Century Communications Foreign 0 0%
Partners, L.P.
Sandler Capital Partners IV, L.P. 0 0%
Sandler Capital Partners IV, FTE, L.P. 0 0%
MJDM Corp. 0 0%
Four JK Corp. 0 0%
ARH Corp. 0 0%
ALSI, LLC 0 0%
Michael J. Marocco 664,068 (1,2,5) 3%
John Kornreich 664,068 (1,2,5) 3.0%
Harvey Sandler 915,590 (1,2,3,4,5) 4.2%
Andrew Sandler 664,068 (1,2,5) 3.0%
Phyllis Sandler 251,522 (3,4,5) 1.2%
Spectrum Equity Investors, L.P. 3,378,943 (5,6) 13.4%
Spectrum Equity Associates 3,378,943 (5,6) 13.4%
Spectrum Equity Investors II, L.P. 0 0%
Spectrum Equity Associates II, L.P. 0 0%
William P. Collatos 3,378,943 (5,6) 13.4%
Brion B. Applegate 3,378,943 (5,6) 13.4%
Kevin Maroni 0 0%
</TABLE>
- ----------
1. Includes 367,168 shares of Class A Common Stock held for accounts
managed by SCM.
2. Includes 296,900 shares of Class A Common Stock owned by Sandler
Associates.
Page 27 of 33 Pages
<PAGE> 28
3. Includes 37,500 shares of Class A Common Stock owned by Phyllis Sandler.
4. Includes 214,022 shares of Class A Common Stock owned by Harvey Sandler.
5. The reporting person disclaims beneficial ownership of these securities,
except to the extent of his/her/its equity interest benefits
6. The 3,378,943 shares of Class A Common Stock beneficially owned by the
Spectrum Reporting Persons are comprised of (i) 2,055,988 shares of
Class a Common Stock issuable upon conversion of 2,055,988 shares of
Class B Common Stock held by SEI and (ii) 724,464n shares of Class A
Common Stock issuable upon conversion of the Series A Preferred Stock
held by SEI. The number of shares of Class A Common Stock issuable upon
conversion of the Series A Preferred Stock assumes the occurrence of a
voluntary conversion on December 31, 1997.
(b) By virtue of being the sole stockholder of MJDM Corp., and a general
partner or SA, Michael J. Marocco may be deemed to have shared power to vote and
dispose of 664,068 shares of Class A Common Stock, representing approximately
3.0% of the outstanding Class A Common Stock.
By virtue of being the majority stockholder of Four JK Corp., and a
general partner of SA, John Kornreich may be deemed to have shared power to vote
and to dispose of 664,068 shares of Class A Common Stock, representing
approximately 3.0% of the outstanding Class A Common Stock.
By virtue of being the sole stockholder of ARH Corp., a general
partner of SA, and the husband of Phyllis Sandler, Harvey Sandler may be deemed
to have shared power to vote and to dispose of 701,568 shares of Class A Common
Stock, representing approximately 3.2% of the outstanding Class A Common Stock.
Harvey Sandler has sole power to vote and to dispose of 214,022 shares of Class
A Common Stock, representing approximately 1.0% of the outstanding Class A
Common Stock.
By virtue of being the majority member of ALSI, LLC, and a general
partner of SA, Andrew Sandler may be deemed to have shared power to vote and to
dispose of 664,068 shares of Class A Common Stock, representing approximately
3.0% of the outstanding Class A Common Stock.
Phyllis Sandler has sole power to vote and to dispose of 37,500
shares of Class A Common Stock, representing approximately 0.2% of the
outstanding Class A Common Stock. By virtue of being the wife of Harvey Sandler,
Phyllis Sandler may be deemed to have shared power to vote and to dispose of
214,022 shares of Class A Common Stock, representing approximately 1.0% of the
outstanding Class A Common Stock.
By virtue of being a general partner of SEA, William P. Collatos and
Brion B. Applegate each may be deemed to have shared power to vote and dispose
of 3,378,943 shares of Class A Common Stock, representing approximately 13.4% of
the outstanding Class A Common Stock.
By virtue of the ownership of shares of ACC by SEI2 and the Sandler
Investors, the Sandler Reporting Persons and the Spectrum Reporting Persons may
be deemed to be a group with respect to the shares of Class A Common Stock
beneficially owned by them. The Sandler Reporting Persons and the Spectrum
Reporting Persons do not affirm the existence of such a group.
(c) During the past sixty days, there have been no transactions of Class
A Common Stock of the Issuer by the persons identified in Item 2 of this
Schedule 13D.
(d) No other person has the right to receive or the power to direct the
receipt of dividends from, or the proceeds from the sale of such securities.
(e) Not applicable.
Page 28 of 33 Pages
<PAGE> 29
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER.
The information contained in Item 4 which describes (i) the Stock
Purchase Agreement, (ii) the Stockholders Agreement, (iii) the Merger Agreement,
(iv) the Voting Agreement and (v) the Side Letter is incorporated herein by
reference. A copy of each of such agreements is filed herewith as Exhibit 2,
Exhibit 3, Exhibit 4, Exhibit 5 and Exhibit 6, respectively, (or incorporated by
reference to the Company's Report on Form 8-K filed on March 9, 1998) and are
incorporated herein by reference in their entirety.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit 1 Joint Filing Agreement, dated March 6, 1998.
Exhibit 2 Stock Purchase Agreement, dated as of March 5, 1998 by and
among American Cellular Corporation and the Investors party
thereto.
Exhibit 3 Stockholders Agreement, dated as of March 5, 1998 by and among
American Cellular Corporation and the Investors party thereto.
Exhibit 4 Agreement and Plan of Merger dated as of March 6, 1998 between
the Company and American Cellular Corporation (schedules
omitted).*
Exhibit 5 Voting Agreement dated as of March 6, 1998 among American
Cellular Corporation, the Company and the shareholders party
thereto.*
Exhibit 6 Side Letter dated March 6, 1998 addressed to the Company and
signed by Spectrum Equity Investors, L.P.
- ----------
* Incorporated herein by reference to the Company's Report on Form 8K
filed on March 9, 1998
Page 29 of 33 Pages
<PAGE> 30
SIGNATURE
After reasonable inquiry and to the best of the undersigned's knowledge
and belief, the undersigned certify that the information set forth in this
statement is true, complete and correct.
Dated: March 16, 1998 SPECTRUM EQUITY INVESTORS, L.P.
By: Spectrum Equity Associates, L.P.,
its general partner
By: /s/ Brion B. Applegate
--------------------------------------
BRION B. APPLEGATE, General Partner
SPECTRUM EQUITY ASSOCIATES, L.P.
By: /s/ Brion B. Applegate
---------------------------------
BRION B. APPLEGATE,
General Partner
SPECTRUM EQUITY INVESTORS II, L.P.
By: Spectrum Equity Associates II., L.P.,
its general partner
By: /s/ Brion B. Applegate
---------------------------------
BRION B. APPLEGATE, General Partner
SPECTRUM EQUITY ASSOCIATES II, L.P.
By: /s/ Brion B. Applegate
--------------------------------
BRION B. APPLEGATE, General Partner
By: /s/ William P. Collatos
--------------------------------
WILLIAM P. COLLATOS
By: /s/ Brion B. Applegate
--------------------------------
BRION B. APPLEGATE
By: /s/ Kevin Maroni
--------------------------------
KEVIN MARONI
SANDLER ASSOCIATES
By: /s/ Michael Marocco
-------------------------------
MICHAEL MAROCCO, General Partner
SANDLER CAPITAL MANAGEMENT
By: ARH Corporation,
By: /s/ Edward Grinacoff
-------------------------------
EDWARD GRINACOFF, Secretary
and Treasurer
Page 30 of 33 Pages
<PAGE> 31
21st CENTURY COMMUNICATIONS PARTNERS, L.P.
By: Sandler Investment Partners, L.P.
General Partner
By: Sandler Capital Management
General Partner
By: MJDM CORP., a General Partner
By: /s/ Edward Grinacoff
-------------------------------
Name: Edward Grinacoff
Title: President
21st CENTURY COMMUNICATIONS T-E, L.P.
By: Sandler Investment Partners, L.P.
General Partner
By: Sandler Capital Management
General Partner
By: MJDM CORP., a General Partner
By: /s/ Edward Grinacoff
-------------------------------
Name: Edward Grinacoff
Title: President
21st CENTURY COMMUNICATIONS FOREIGN PARTNERS, L.P.
By: Sandler Investment Partners, L.P.
General Partner
By: Sandler Capital Management
General Partner
By: MJDM CORP., a General Partner
By: /s/ Edward Grinacoff
--------------------------------------
Name: Edward Grinacoff
Title: President
SANDLER CAPITAL PARTNERS IV, L.P.
By: Sandler Investment Partners, L.P.
General Partner
By: Sandler Capital Management
General Partner
By: MJDM CORP., a General Partner
By: /s/ Edward Grinacoff
-------------------------------------
Name: Edward Grinacoff
Title: President
Page 31 of 33 Pages
<PAGE> 32
SANDLER CAPITAL PARTNERS IV, FTE, L.P.
By: Sandler Investment Partners, L.P.
General Partner
By: Sandler Capital Management
General Partner
By: MJDM CORP., a General Partner
By: /s/ Edward Grinacoff
-----------------------------------
Name: Edward Grinacoff
Title: President
SANDLER INVESTMENT PARTNERS, L.P.
By: Sandler Capital ;Management
General Partner
By: MJDM, Corp., a General Partner
By: /s/ Edward Grinacoff
---------------------------------
Name: Edward Grinacoff
Title: President
By: /s/ Harvey Sandler
---------------------------------
HARVEY SANDLER
By: /s/ Michael Marocco
---------------------------------
MICHAEL MAROCCO
By: /s/ John Kornreich
---------------------------------
JOHN KORNREICH
By: /s/ Andrew Sandler
---------------------------------
ANDREW SANDLER
By: /s/ Phyllis Sandler
---------------------------------
PHYLLIS SANDLER
Page 32 of 33 Pages
<PAGE> 33
EXHIBIT INDEX
Exhibit 1 Joint Filing Agreement, dated March 16, 1998.
Exhibit 2 Stock Purchase Agreement, dated as of March 5, 1998 by and among
American Cellular Corporation and the Investors party thereto.
Exhibit 3 Stockholders Agreement, dated as of March 5, 1998 by and among
American Cellular Corporation and the Investors party thereto.
Exhibit 4 Agreement and Plan of Merger dated as of March 6, 1998 between
the Company and American Cellular Corporation (schedules
omitted).*
Exhibit 5 Voting Agreement dated as of March 6, 1998 among American
Cellular Corporation, the Company and the shareholders party
thereto.*
Exhibit 6 Side Letter dated March 6, 1998 addressed to the Company and
signed by Spectrum Equity Investors, L.P.
- ----------
* Incorporated herein by reference to the Company's Report on Form 8K
filed on March 9, 1998
Page 33 of 33 Pages
<PAGE> 1
Exhibit 1
JOINT FILING AGREEMENT
In accordance with Rule 13d-1(g) of the Securities Exchange Act
of 1934, as amended, the undersigned agree to the joint filing on behalf of each
of them a Statement on Schedule 13D (including any and all amendments thereto)
with respect to the Class A Common Stock of PriCellular Corporation and further
agree that this Agreement shall be included as an Exhibit to such joint filings.
The undersigned further agree that each party hereto is
responsible for timely filing of such Statement on Schedule 13D and any
amendments thereto, and for the completeness and accuracy of the information
concerning such party contained therein; provided that no party is responsible
for the completeness or accuracy of the information concerning the other party,
unless such party knows or has reason to believe that such information is
inaccurate.
This Agreement may be executed in one or more counterparts, each
of which shall be deemed to be an original instrument, but all of such
counterparts together shall constitute but one agreement.
In evidence thereof, the undersigned, being duly authorized,
hereby execute this Agreement this 16th Day of March, 1998.
SPECTRUM EQUITY INVESTORS, L.P.
By: Spectrum Equity Associates, L.P.,
its general partner
By: /s/ Brion B. Applegate
-----------------------------------
BRION B. APPLEGATE, General Partner
SPECTRUM EQUITY ASSOCIATES, L.P.
By: /s/ Brion B. Applegate
-----------------------------------
BRION B. APPLEGATE, General Partner
SPECTRUM EQUITY INVESTORS II, L.P.
By: Spectrum Equity Associates II., L.P.,
its general partner
By: /s/ Brion B. Applegate
-----------------------------------
BRION B. APPLEGATE, General Partner
SPECTRUM EQUITY ASSOCIATES II, L.P.
By: /s/ Brion B. Applegate
-----------------------------------
BRION B. APPLEGATE, General Partner
By: /s/ William P. Collatos
-----------------------------------
WILLIAM P. COLLATOS
<PAGE> 2
By: /s/ Brion B. Applegate
-----------------------------------
BRION B. APPLEGATE
By: /s/ Kevin Maroni
-----------------------------------
KEVIN MARONI
SANDLER ASSOCIATES
By: /s/ Michael Marocco
-----------------------------------
MICHAEL MAROCCO, General Partner
SANDLER CAPITAL MANAGEMENT
By: ARH Corporation,
By: /s/ Edward Grinacoff
-----------------------------------
EDWARD GRINACOFF, Secretary and
Treasurer
21st CENTURY COMMUNICATIONS PARTNERS, L.P.
By: Sandler Investment Partners, L.P.
General Partner
By: Sandler Capital Management
General Partner
By: MJDM CORP., a General Partner
By: /s/ Edward Grinacoff
-----------------------------------
Name: Edward Grinacoff
Title: President
21st CENTURY COMMUNICATIONS T-E, L.P.
By: Sandler Investment Partners, L.P.
General Partner
By: Sandler Capital Management
General Partner
By: MJDM CORP., a General Partner
By: /s/ Edward Grinacoff
-----------------------------------
Name: Edward Grinacoff
Title: President
<PAGE> 3
21st CENTURY COMMUNICATIONS FOREIGN
PARTNERS, L.P.
By: Sandler Investment Partners, L.P.
General Partner
By: Sandler Capital Management
General Partner
By: MJDM CORP., a General Partner
By: /s/ Edward Grinacoff
-----------------------------------
Name: Edward Grinacoff
Title: President
SANDLER CAPITAL PARTNERS IV, L.P.
By: Sandler Investment Partners, L.P.
General Partner
By: Sandler Capital Management
General Partner
By: MJDM CORP., a General Partner
By: /s/ Edward Grinacoff
-----------------------------------
Name: Edward Grinacoff
Title: President
SANDLER CAPITAL PARTNERS IV, FTE, L.P.
By: Sandler Investment Partners, L.P.
General Partner
By: Sandler Capital Management
General Partner
By: MJDM CORP., a General Partner
By: /s/ Edward Grinacoff
-----------------------------------
Name: Edward Grinacoff
Title: President
<PAGE> 4
SANDLER INVESTMENT PARTNERS, L.P.
By: Sandler Capital Management
General Partner
By: MJDM, Corp., a General Partner
By: /s/ Edward Grinacoff
-----------------------------------
Name: Edward Grinacoff
Title: President
By: /s/ Harvey Sandler
----------------------------------------------
HARVEY SANDLER
By: /s/ Michael Marocco
----------------------------------------------
MICHAEL MAROCCO
By: /s/ John Kornreich
----------------------------------------------
JOHN KORNREICH
By: /s/ Andrew Sandler
----------------------------------------------
ANDREW SANDLER
By: /s/ Phyllis Sandler
----------------------------------------------
PHYLLIS SANDLER
<PAGE> 1
Exhibit 2
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of
March 5, 1998, is made by and among American Cellular Corporation, a Delaware
corporation (the "Company"), and the parties listed on Exhibit A to this
Agreement (the "Purchasers").
RECITALS
A. Each Purchaser desires to invest in the Company the aggregate
sum set forth opposite each Purchaser's name on Exhibit A through the purchase
of shares of the Company's Class A Common Stock, par value $0.01 per share (the
"Class A Common Stock"), and shares of the Company's Series A Preferred Stock,
par value $0.01 per share (the "Series A Preferred Stock"). Subject to the terms
of this Agreement, the Purchasers shall initially purchase an aggregate of
250,000 shares of Class A Common Stock (the "Initial Shares") and shall, at the
request of the Company, purchase an aggregate of 325,000 shares of Series A
Preferred Stock (the "Committed Shares" and, collectively with the Initial
Shares, the "Shares"), in each case in the respective amounts set forth opposite
each Purchaser's name on Exhibit A. The Series A Preferred Stock shall have the
rights set forth in the form of the Certificate of Designations of the Series A
Preferred Stock of American Cellular Corporation, attached hereto as Exhibit B
(the "Certificate").
B. Simultaneously with the execution of this Agreement, the
Purchasers and the Company will enter into (a) the Stockholders Agreement (the
"Stockholders Agreement") in the form attached hereto as Exhibit C, and (b) the
Registration Rights Agreement (the "Registration Rights Agreement") in the form
attached hereto as Exhibit D.
C. This Agreement, the Stockholders Agreement and the
Registration Rights Agreement are being entered into in contemplation of the
merger (the "Merger") of the Company with and into PriCellular Corporation, a
Delaware corporation ("PCC"), pursuant to an Agreement and Plan of Merger to be
executed by the Company and PCC (the "Merger Agreement"), which provides for,
among other things, a merger price of $14.00 per share of common stock of PCC.
D. The proceeds from the Purchasers' purchase of the Initial
Shares and the Committed Shares shall be used solely to consummate the Merger,
and the transactions relating thereto, and to pay any Transaction Costs (as
defined in Section 4.2).
AGREEMENT
NOW, THEREFORE, in consideration of the mutual agreements
contained herein and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties agree as follows:
<PAGE> 2
ARTICLE I.
ISSUANCE OF SHARES
Each Purchaser, severally and not jointly, hereby agrees as follows:
1.1. Purchase and Sale of Initial Shares. At the Initial Closing (as
defined below), the Company shall sell to each Purchaser, and such Purchaser
shall purchase from the Company, the Initial Shares, at a purchase price of $100
per share in the respective amount set forth in Exhibit A. The purchase and sale
of all the Initial Shares by the Purchasers is referred to herein as the
"Initial Purchase."
1.2. Initial Closing. The closing for the Initial Purchase (the "Initial
Closing") shall take place upon the 15th day after delivery to each of the
Purchasers of an Initial Funding Notice, executed by an officer of the Company,
which certifies that on the date of such notice, the Company and PCC have
entered into the Merger Agreement. If such 15th day is not a Business Day, the
Initial Closing shall occur on the next succeeding Business Day. As used in this
Agreement, the defined term "Initial Closing" shall refer to both the event as
well as the date of such closing.
1.3. Deliveries at the Initial Closing. At the Initial Closing each
Purchaser shall deliver to the Company the purchase price for the respective
Initial Shares to be acquired by such Purchaser by wire transfer of immediately
available funds, and the Company shall deliver to such Purchaser one or more
certificates representing its respective Initial Shares, which certificates
shall be duly registered in such name as the Purchaser shall have specified to
the Company prior to the Initial Closing.
1.4. Subsequent Purchase of Committed Shares. Upon receipt by each
Purchaser of written notice from the Company (the "Drawdown Notice"), stating
that the Company anticipates that the Merger is reasonably expected to be
consummated within 20 days, such Purchaser shall, within 15 days after its
receipt of the Drawdown Notice, purchase at a purchase price of $1,000 per
share, all of the Committed Shares to be acquired by such Purchaser, as set
forth on Exhibit A. The purchase of all the Committed Shares by all the
Purchasers is referred to herein as the "Subsequent Purchase," and the
consummation of the Subsequent Purchase is referred to herein as the "Subsequent
Closing."
1.5. Certificate of Designations; HSR Filing. On or prior to the
Subsequent Closing, (a) the Company shall have duly adopted and filed with the
Secretary of State of the State of Delaware the Certificate, and (b) any waiting
period, if applicable, under the Hart Scott Rodino Antitrust Improvements Act of
1976, as amended (the "HSR Act"), shall have terminated or expired.
1.6. Deliveries at Subsequent Closing. At the Subsequent Closing:
1.6.1. The Company shall deliver to each Purchaser one or more
certificates representing its respective Committed Shares;
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1.6.2. The Company shall deliver to each Purchaser a certificate,
executed by the Secretary of the Company, dated the date of the Subsequent
Closing, which certifies the resolutions adopted by the directors of the Company
duly authorizing all transactions contemplated at the Subsequent Closing; and
1.6.3. Each Purchaser shall deliver to the Company the purchase
price for such Purchaser's respective Committed Shares by wire transfer of
immediately available funds.
For purposes of this Agreement, the Initial Closing and
Subsequent Closing are sometimes referred to herein individually as a "Closing"
and collectively as the "Closings."
ARTICLE II.
CERTAIN REPRESENTATIONS, WARRANTIES
AND AGREEMENTS OF THE PURCHASERS
Each Purchaser, severally and not jointly, hereby represents, warrants
and agrees as follows:
2.1. Transfer Restrictions and Stock Legend.
2.1.1. Acknowledgment. Such Purchaser understands that (a) a
transfer of any of the Shares to be purchased by it hereunder will not be valid
unless a Registration Statement under the Securities Act of 1933, as amended
(together with the rules and regulations promulgated thereunder, the "Act") is
in effect as to such transfer or in the opinion of counsel for the Company such
registration is unnecessary in order for such transfer to comply with the Act;
and (b) such Shares shall bear the legends set forth in the Stockholders
Agreement.
2.1.2. Removal. The Company will remove the restrictive legends
referenced above upon request of such Purchaser provided that the restrictions
described in such legends are no longer applicable and such Purchaser has
provided the Company with evidence satisfactory to the Company that the
conditions to the termination of such restrictions have been met.
2.2. Securities Unregistered. Such Purchaser acknowledges that it has
been advised that (a) the Shares to be acquired by it have not been registered
under the Act, (b) such Shares must be held indefinitely, and such Purchaser
must continue to bear the economic risk of the investment in such Shares, unless
such Shares are registered under the Act or an exemption from such registration
is available, (c) when and if such Shares may be disposed of without
registration in reliance on Rule 144 under the Act, such disposition can be made
only in limited amounts in accordance with the terms and conditions of said Rule
144, and (d) a notation shall be made in the appropriate records of the Company
indicating that such Shares are subject to restrictions on transfer and, subject
to applicable provisions of this Agreement and the Stockholders Agreement, if
the Company engages the services of a stock transfer agent for the Shares,
appropriate stop transfer restrictions will be issued to such transfer agent
with respect to the Shares.
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2.3. Investment Representations. Such Purchaser (a) is acquiring the
Shares for investment for its own account and not with a view to, or for resale
in connection with, the distribution or other disposition thereof, except in
compliance with applicable laws regulating securities; (b) was not organized for
the purpose of acquiring the Shares; (c) does not have any contract,
undertaking, agreement or arrangement with any Person (as defined below) to
sell, transfer or grant participations to such Person or to any third Person,
with respect to the Shares; (d) is an "Accredited Investor" as that term is
defined in Rule 501 of Regulation D under the Act, (e) has been given the
opportunity to obtain any information or documents relating to, and to ask
questions and receive answers about, the Company and the business and prospects
of the Company which it deems necessary to evaluate the risks and merits related
to its investment in the Shares, and (f) has a financial condition such that it
can afford to bear the economic risk of holding the unregistered Shares for an
indefinite period of time and has adequate means for providing for its current
needs and contingencies. For purposes of this Agreement, "Person" shall mean any
individual, partnership, limited liability company, corporation, joint venture,
trust, unincorporated organization, or any other entity, or a government or any
department, agency or political subdivision thereof.
2.4. Authority; Authorization; No Conflicts. (i) Such Purchaser has full
organizational power and authority to enter into this Agreement, the
Stockholders Agreement and the Registration Rights Agreement, that such
agreements have been duly authorized, executed and delivered by it, that all
organizational action on the part of such Purchaser or its shareholders,
partners or members necessary for the authorization, execution, delivery and
performance of such agreements and the consummation of the transactions
contemplated hereby and thereby have been taken, and that such agreements are
the legal valid and binding obligations of such Purchaser, enforceable in
accordance with their respective terms; and (ii) the execution, delivery and
performance by such Purchaser of this Agreement, the Stockholders Agreement and
the Registration Rights Agreement will not result in any violation of and will
not conflict with, or result in a breach of any of the terms of or constitute a
default under, any provision of federal or state law to which such Purchaser is
subject, such Purchaser's governing documents or any mortgage, indenture,
agreement, instrument, judgment, decree, order, rule or regulation or other
restriction to which such Purchaser is a party or by which it is bound or result
in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of
its properties or its other assets.
2.5. Brokers, Intermediaries and Finder's Fees. No finder, broker,
agent, financial adviser or other intermediary has acted on behalf of such
Purchaser in connection with the purchase of the Shares to be acquired by it
pursuant to this Agreement or the negotiation or consummation of this Agreement.
2.6. Survival of Purchaser' Representations and Warranties. The
representations and warranties set forth in this Article 2 shall survive the
Closings.
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ARTICLE III.
CERTAIN REPRESENTATIONS, WARRANTIES
AND AGREEMENTS OF THE COMPANY
The Company represents and warrants to the Purchasers as follows:
3.1. Organization, Standing, etc. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. The Company has all requisite corporate power and authority to own and
operate its properties and its other assets and to carry on its business as
currently conducted, and to enter into this Agreement, the Registration Rights
Agreement and the Stockholders Agreement. Attached hereto as Schedule 3.1A is a
complete and correct copy of the Certificate of Incorporation of the Company,
and all amendments thereto, as the Certificate of Incorporation will be in
effect at the Initial Closing, and attached hereto as Schedule 3.1B is a
complete and correct copy of the By-laws of the Company as they will be in
effect at the Initial Closing. Except for the Certificate, as of the Initial
Closing, no further amendment or modification of the Certificate of
Incorporation or By-laws of the Company not set forth in Schedule 3.1A or
Schedule 3.1B has been authorized by the stockholders or Board of Directors of
the Company or is otherwise contemplated by the Company. As of the Initial
Closing, the Company holds no equity interest in any Person. Since the date of
its incorporation, the Company has not engaged in any activities other than in
connection with negotiating the terms of the Merger Agreement and the
transactions contemplated thereby and in connection with arranging the financing
required to consummate the Merger and the other transactions contemplated by the
Merger Agreement.
3.2. Qualification. The Company is duly qualified or licensed and in
good standing as a foreign corporation authorized to transact business in each
jurisdiction where the conduct of its business or the ownership of its
properties or other assets requires such qualification and the failure to be so
qualified or licensed would have a material adverse effect on the assets,
condition or business of the Company.
3.3. Authorization; No Conflicts. All corporate action on the part of
the Company, its directors and stockholders necessary for the authorization,
execution, delivery and performance by the Company of this Agreement, the
Stockholders Agreement and the Registration Rights Agreement and for the
authorization, offer, issuance and delivery of the Initial Shares has been taken
and with respect to the Committed Shares, will be taken on or prior to the
Subsequent Closing. Prior to the Subsequent Closing, the Company shall duly
adopt and file the Certificate with the Secretary of State of Delaware. Each of
this Agreement, the Stockholders Agreement and the Registration Rights Agreement
has been duly authorized, executed and delivered by the Company and each such
agreement is the valid and binding obligation of the Company, enforceable in
accordance with its terms. The execution, delivery and performance by the
Company of this Agreement, the Stockholders Agreement and the Registration
Rights Agreement, and the offer, issuance and delivery of the Shares will not
result in any violation of, and will not conflict with or result in a breach of,
any of the terms of, or constitute a default under, any provision of federal or
state law to which the Company or any of its properties or its other assets is
subject, the Company's Certificate of Incorporation (upon filing of the
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<PAGE> 6
Certificate), the Company's By-laws or any mortgage, indenture, instrument or
material agreement, or judgment, decree, order, rule or regulation or other
restriction to which the Company is a party or by which it is bound or result in
the creation of any mortgage, pledge, lien, encumbrance or charge upon any of
its properties or its other assets.
3.4. Capitalization. The authorized capital stock of the Company
consists of 500,000 shares of common stock and 1,000,000 shares of preferred
stock. Two classes of Common Stock have been authorized, being 475,000 shares of
Class A Common Stock and 25,000 shares of Class B Common Stock. At the Initial
Closing, no option, warrant or other right for the purchase of any shares of
capital stock, or any security convertible or exchangeable therefor, of the
Company is outstanding, except as contemplated by this Agreement and the
Stockholders Agreement. All of the issued and outstanding shares of capital
stock of the Company have been offered, issued and sold in compliance with the
Act and all applicable state securities laws.
3.5. Authority and Validity of Issuance of Shares. The Shares, when
issued and delivered in accordance with the terms hereof, will be duly
authorized and validly issued, fully paid and nonassessable and free of
preemptive rights.
3.6. The Offering. Neither the Company nor anyone acting on behalf of
the Company has directly or indirectly offered the Shares to be delivered to the
Purchasers, any part thereof, or any similar security of the Company for
delivery to, or solicited any offer from, anyone other than the Purchasers and
other investors to whom such offers can be made without requiring the
registration of the Shares under the Act or state securities laws.
3.7. Consents. No consent, approval, order or authorization of, or
registration, qualification, designation, declaration or filing with, any Person
is required in connection with the offer, sale or issuance of the Shares, or the
consummation of any other transaction contemplated hereby, other than filings
pursuant to state and federal securities laws and the HSR Act and the filing of
the Certificate with the Secretary of State of the State of Delaware.
3.8. Brokers, Intermediaries and Finder's Fees. No finder, broker,
agent, financial adviser or other intermediary has acted on behalf of the
Company in connection with the offering of the Shares pursuant to this Agreement
or the negotiation or consummation of this Agreement. The Company hereby agrees
to indemnify and to hold the Purchasers harmless of any claim, demand, liability
or action for any commission or compensation in the nature of a finder's,
broker's, advisory or placement fee payable to any Person for which the Company
or any of its respective officers, directors, employees, partners, stockholders,
agents or representatives are responsible and for the costs and expenses of
defending against such liability or asserted liability.
3.9. Registration Rights. Other than pursuant to the Stockholders
Agreement and the Registration Rights Agreement, the Company is not, as of the
Initial Closing, under any obligation to register under the Act or state
securities laws any of its then outstanding securities or any of its securities
that may subsequently be issued pursuant to any then existing convertible or
exercisable securities.
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3.10. Stockholders Agreements. Other than pursuant to this Agreement,
the Stockholders Agreement and agreements with employees or prospective
employees of the Company, as of the Initial Closing, there are no agreements
among the Company and any of the Company's stockholders, in their capacities as
such, or, to the knowledge of the Company, among any of the Company's
stockholders.
3.11. Other Equity Securities. The Company has not issued or agreed to
issue any equity securities to any Person except (i) to the Purchasers as
contemplated by this Agreement and (ii) issuances of equity securities
(including rights to purchase equity securities) to employees or prospective
employees of the Company on terms and conditions set forth on Schedule 3.11 (as
such terms and conditions as may be amended from time to time in accordance with
the Stockholders Agreement) or otherwise in accordance with the Stockholders
Agreement.
ARTICLE IV.
COVENANTS OF THE COMPANY AND THE PURCHASERS
4.1. Other Purchases; Most Favored Nation. Prior to the Merger, the
Company will not issue any equity securities to any Person, except for (i)
issuances of Class A Common Stock and Series A Preferred Stock on the same terms
and at the same price or a greater price as the Initial Shares are being issued,
or the Committed Shares will be issued, pursuant to this Agreement, (ii)
issuances of equity securities (including rights to purchase equity securities)
to employees or prospective employees of the Company on terms set forth on
Schedule 3.11 (as such terms may be amended from time to time in accordance with
the Stockholders Agreement) or (iii) issuances in accordance with the
Stockholders Agreement; provided that the Company may issue Class A Common Stock
and Series A Preferred Stock at a lesser price than the Class A Common Stock and
Series A Preferred Stock, as the case may be, if the Company pays the Purchasers
the difference between the price paid pursuant to this Agreement and such lower
price multiplied by the number of Initial Shares or Committed Shares, as the
case may be, purchased by them.
4.2. Fees and Expenses; Break-Up Fees. The Purchasers agree that the
Company may pay all fees and expenses incurred by or on behalf of the Company in
connection with this Agreement, the Merger Agreement or the transactions
contemplated hereby or thereby, including, without limitation, the fees and
expenses of counsel, accountants, consultants, financial advisors, any costs
relating to the settlement or litigation of any disputes and other
administrative costs ("Transaction Costs"). Each Purchaser shall be entitled to
receive from the Company its pro rata, based on such Purchaser's dollar
investments in the Company at the Initial Closing, share of the net amount of
any break-up fee or damages received by the Company as a result of a breach or
termination of the Merger Agreement.
4.3. Publicity. Except as required by applicable law, the Company shall
at no time use the name of any Purchaser or of any of its respective Affiliates
in any press release or public statement without obtaining the prior written
consent of such Purchaser. If such disclosure is required by applicable law,
then the Company shall inform such Purchaser prior to such disclosure.
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ARTICLE V.
MISCELLANEOUS
5.1. Termination. This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time:
5.1.1. by either the Company or any Purchaser (as to itself but
not other Purchasers), if by March 9, 1998, Persons agreeing hereunder to
purchase an aggregate of at least $25 million in Series A Common Stock and $325
million in Series A Preferred Stock have not then yet executed this Agreement;
5.1.2. by either the Company or any Purchaser (as to itself but
not other Purchasers) if the Merger Agreement shall not have been entered into
by March 9, 1998; or
5.1.3. by either the Company or any Purchaser (as to itself but
not other Purchasers) if the Merger Agreement shall have been terminated.
5.2. Effect of Termination. In the event of the termination of this
Agreement pursuant to Section 5.1, the Purchasers shall have no obligation to
purchase the Committed Shares and this Agreement shall otherwise forthwith
become void, and except for this Section 5.2, there shall be no liability on the
part of any party. Upon the termination of this Agreement, the Company shall be
dissolved and liquidated in accordance with Section 7.3 of the Stockholders
Agreement.
5.3. No Assignment; Effect of Merger. No party may assign any of its
rights or obligations under this Agreement without the prior written consent of
the other parties hereto, except as permitted under the Stockholders Agreement.
Nothing expressed or referred to in this Agreement will be construed to give any
Person other than the parties to this Agreement any legal or equitable right,
remedy or claims under or with respect to this Agreement or any provision of
this Agreement (other than a Person which has incurred Transaction Costs).
Following consummation of the Merger, the term "Company" shall refer to the
surviving corporation of the Merger.
5.4. Survival. The representations and warranties made by the parties
shall survive the Closings. Except as otherwise expressly provided herein, the
respective covenants of the parties hereto shall survive until the later of such
time as all of the Shares cease to be outstanding or the termination of the
Stockholders Agreement in accordance with its terms. All statements as to
factual matters contained in any certificate or exhibit delivered by or on
behalf of the Company pursuant hereto shall be deemed to be the representations
and warranties of the Company hereunder as of such date of such certificate or
exhibit.
5.5. Delays or Omissions. No delay or omission to exercise any right,
power or remedy accruing to a party, upon any breach or default of the other
party under this Agreement, shall impair any such right, power or remedy of the
party nor shall it be construed to be a waiver of any such breach or default, or
an acquiescence therein, or of any similar breach or default thereafter
occurring; nor shall any waiver of any single breach or default be deemed a
waiver of
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<PAGE> 9
any other breach or default theretofore or thereafter occurring. All remedies,
either under this Agreement, or by law or otherwise afforded to any holder,
shall be cumulative and not alternative.
5.6. Notices. Any notice required or permitted hereunder shall be given
in writing and shall be conclusively deemed effectively given (a) upon personal
delivery to the person to be notified, (b) when sent by confirmed facsimile if
sent during normal business hours of the recipient; if not, then on the next
business day, (c) five (5) days after deposit in the United States mail, by
registered or certified mail, postage prepaid, or (d) one (1) day after deposit
with a nationally recognized overnight courier, specifying next day delivery,
with written verification of receipt addressed as follows:
(a) If to the Company, to:
American Cellular Corporation
c/o Spectrum Equity Investors II, L.P.
245 Lytton Avenue, Suite 175
Palo Alto, CA 94301
Phone: 650/464-4600
Fax: 650/464-4601
Attn: Brion Applegate
with a copy to:
Latham & Watkins
505 Montgomery Street, Suite 1900
San Francisco, CA 94111
Phone: 415/391-0600
Fax: 415/395-8095
Attn: Scott R. Haber, Esq.
or at such other addresses as the Company shall have
specified by notice in writing to Purchasers; and
(b) If to a Purchaser, delivered to the addresses set forth on
the signature page hereto or at such other addresses as such
Purchaser shall have specified by notice in writing to the
Company.
5.7. Entire Agreement; Amendment. This Agreement and the documents
referred to herein constitute the full and entire understanding and agreement
between the parties with regard to the subjects hereof and thereof and no party
shall be liable or bound to any other party in any manner by any warranties,
representations, or covenants except as specifically set forth herein or
therein. Neither this Agreement nor any term hereof may be amended, waived,
discharged or terminated other than by a written instrument signed by the party
against whom enforcement of any such amendment, waiver, discharge or termination
is sought.
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5.8. Specific Performance. Each Purchaser and the Company acknowledges
that any violation of this Agreement will result in irreparable injury to the
non-breaching party, the exact amount of which will be difficult to ascertain,
and that the remedies at law for any such violation would not be reasonable or
adequate compensation to the non-breaching party for such a violation.
Accordingly, each Purchaser and the Company agrees that if any of the Purchasers
and/or the Company violates any provision of this Agreement, in addition to any
other remedy which may be available at law or in equity, the non-breaching party
shall be entitled to specific performance and injunctive relief, without posting
bond or other security, and without the necessity of proving actual damages.
5.9. Severability. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without such provision; provided that no such severability shall be effective if
it materially changes the economic benefit of this agreement to any party.
5.10. Cross-References; Titles and Subtitles. Unless expressly indicated
to the contrary, all references in this Agreement to enumerated Articles,
Sections, Schedules and Exhibits are to the respective Articles and Sections of,
and Schedules and Exhibits to, this Agreement. All such Schedules and Exhibits
are integral parts of this Agreement. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
5.11. Non-Business Days. If the last day for performance of any act or
the exercising of any right, as provided in this Agreement, shall not be a
Business Day, such act may be performed or right exercised on the next
succeeding Business Day, with the same force and effect as if done on the
nominal day provided in this Agreement. For purposes of this Agreement,
"Business Day" means a day other than a Saturday, Sunday or legal holiday or a
day on which banking institutions in New York City are required or authorized by
law to close.
5.12. Applicable Law. The laws of the State of Delaware shall govern the
interpretation, validity and performance of the terms of this Agreement,
regardless of the law that might be applied under principles of conflicts of
law.
5.13. Attorneys' Fees. If any legal action or any arbitration or other
proceeding is brought for the enforcement of this Agreement, the successful or
prevailing party shall be entitled to recover reasonable attorneys' fees and
other costs incurred in that action or proceeding, in addition to any other
relief to which it may be entitled.
5.14. Counterparts; Effectiveness. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original and all
of which together shall be deemed to be one and the same instrument. This
Agreement shall become a legally binding and effective obligation of each
Purchaser upon such Purchaser's execution and delivery of this Agreement and the
execution and delivery of the Merger Agreement.
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Exhibit 3
STOCKHOLDERS AGREEMENT
THIS STOCKHOLDERS AGREEMENT (the "Agreement") dated as of March
5, 1998 is made by and among American Cellular Corporation, a Delaware
corporation, and the parties listed on Exhibit A to this Agreement
(collectively, the "Stockholders").
RECITALS
The parties hereto have entered into a Stock Purchase Agreement
(the "Stock Purchase Agreement") dated as of March 5, 1998 with respect to the
purchase by the Stockholders of Shares and Preferred Shares (each as defined
below). The parties hereto desire to provide for certain transfer restrictions
and rights and board election rights with respect to the shares of capital stock
of the Company (as defined below) held by the Stockholders, as well as certain
other matters, all according to the terms of this Agreement.
AGREEMENT
NOW, THEREFORE, the parties to this Agreement, intending to be
legally bound hereby, agree as follows:
1. Certain Definitions.
As used in this Agreement, the following terms shall have the
following respective meanings:
(a) "Affiliate" shall mean, with respect to any Person, a Person
directly or indirectly controlling, controlled by, or under common control with,
such Person. For the purposes of such definitions, "control" when used with
respect to any Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
(b) "Board" shall mean the board of directors of the Company.
(c) "Change of Control" shall mean (i) any sale, Transfer or
other conveyance, whether direct or indirect, of a majority of the fair market
value of the assets of the Company, in one transaction or a series of related
transactions, to any "person" or "group" (as such terms are used for purposes of
Section 13(d) of the Exchange Act, whether or not applicable), (ii) any "person"
or "group" (as such terms are used for purposes of Section 13(d) of the Exchange
Act, whether or not applicable) is or becomes the "beneficial owner," directly
or indirectly, of more than 50% of the total equity in the aggregate of all
classes of capital stock of the Company then outstanding normally entitled to
vote in elections of directors, or (iii) during any period of 12 consecutive
months after an Initial Public Offering, individuals who at the beginning of any
such 12-month period constituted the Board (together with any new directors
whose election by such Board or whose nomination for election by the
shareholders of the Company was approved by a vote of a majority of the
<PAGE> 2
directors then still in office who were either directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board then in
office. The Merger shall not constitute a Change of Control.
(d) "Charter Documents" shall mean the Company's Certificate of
Incorporation and Bylaws.
(e) "Company" shall mean American Cellular Corporation, a
Delaware corporation, and any corporation into which it is merged or
consolidated, including the surviving corporation in the Merger.
(f) "Convertible Securities" shall mean (i) any indebtedness or
securities of the Company, convertible into or exchangeable for Shares, and (ii)
any rights, warrants or options to subscribe for or purchase Shares.
(g) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
(h) "Initial Public Offering" shall mean the initial sale of
shares of the Company's Common Stock to the public pursuant to a registration
statement under the Securities Act which has been declared effective by the
Securities and Exchange Commission (other than a registration statement on Form
S-8 or Form S-4 or any successor to such Form, or any other similar form) which
results in an active trading market in shares of Common Stock.
(i) "Merger" shall mean the merger of the Company with and into
PriCellular Corporation, a Delaware corporation ("PCC"), pursuant to the Merger
Agreement.
(j) "Merger Agreement" shall mean the Agreement and Plan of
Merger to be entered into between the Company and PCC, which provides, among
other things, for a merger price of $14.00 per share of the common stock of PCC.
(k) "New Securities" shall mean any Shares or Convertible
Securities, whether now authorized or not; provided that "New Securities" shall
not include: (i) Shares issuable upon exercise or conversion of any previously
issued options, warrants, rights or securities convertible or exchangeable for
Shares; (ii) securities offered by the Company to the public generally pursuant
to a registration statement under the Securities Act; (iii) securities issued
pursuant to the acquisition of a business, whether pursuant to a merger,
consolidation, the purchase of assets or otherwise; (iv) any securities issued
to the officers, directors, employees or consultants of the Company as approved
by the Board (other than any officer, director or employer who is an affiliate
of any Stockholder); (v) Shares issued in connection with any stock split,
reclassification, recapitalization or stock dividend of the Company; (vi) Shares
or Convertible Securities issued to commercial lenders, investment banking firms
or other institutions for services rendered in connection with a debt financing
for the Company or it Affiliates.
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(l) "Outstanding Voting Shares" shall mean, with respect to a
particular matter, the aggregate of all shares of the Company's capital stock
outstanding from time to time which pursuant to the Charter Documents are
entitled to vote on such matter.
(m) "Permitted Transfer" shall mean (i) a Stockholder's Transfer
to the Company of Shares or Preferred Shares or a direct or indirect interest in
Shares or Preferred Shares pursuant to a contractual right of repurchase granted
by the Company at the time such Shares or Preferred Shares were issued; (ii) a
Stockholder's Transfer of all or a portion of its Shares or Preferred Shares to
any Affiliate of such Stockholder or any Person that is a successor to such
Stockholder by merger, consolidation, reorganization or transfer of all, or
substantially all, of its assets; or (iii) if a Stockholder is a partnership,
such Stockholder's Transfer of all or a portion of its Shares or Preferred
Shares to any of its partners.
(n) "Person" shall mean any individual, partnership, limited
liability company, corporation, joint venture, trust, unincorporated
organization, or any other entity, or a government or any department, agency or
political subdivision thereof.
(o) "Preferred Shares" shall mean the shares of Series A
Preferred Stock of the Company.
(p) "Securities Act" shall mean the Securities Act of 1933, as
amended from time to time.
(q) "Shares" means shares of Class A Common Stock, par value
$0.01 per share, of the Company.
(r) "Transfer" means any direct or indirect transfer, sale,
assignment, pledge, hypothecation or other disposition.
2. Right of Co-Sale.
2.1. Definition. In the event that a Stockholder or Stockholders holding
Shares or Preferred Shares which represent a majority of the Shares (or
Preferred Shares) then held by all Stockholders (the "Transferor") proposes to,
directly or indirectly, Transfer (in a single transaction or a series of related
transactions) a direct or indirect interest in Shares (or Preferred Shares)
owned by such Stockholders (the "Transferor Securities") to any Person or group
(as such term is used for purposes of Section 13(d) of the Exchange Act) for
value (the "Transferee"), each remaining Stockholders (a "Remaining
Stockholder") shall have a right of co-sale (the "Right of Co-Sale") to sell the
amount equal to a fraction, the numerator of which is the number of Shares (or
Preferred Shares) owned by such Remaining Stockholder and the denominator of
which is the aggregate number of Shares (or Preferred Shares) owned by all the
Stockholders, multiplied by the number of Shares (or Preferred
Shares)represented by the Transferor Securities (such product, the "Right of
Co-Sale Amount") on the same terms and at the same time as the Transferor, all
as described in this Section 2.
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2.2. Right of Co-Sale Amount. Each Remaining Stockholder shall have the
right to sell that number of Shares (or Preferred Shares) held by such
Stockholder to the Transferee (or, upon the unwillingness of any Transferee to
purchase directly from such Stockholder, to the Transferor simultaneously with
the closing of the sale by the Transferor to the Transferee) up to its
respective Right of Co-Sale Amount determined as of the date the Transfer Notice
(as defined below) is delivered to the such Stockholder, upon the terms and
subject to the conditions pursuant to which the Transferor sells its Transferor
Securities to the Transferee.
2.3. Mechanics of Sale.
(a) Exercise by the Stockholders.
If the Transferor proposes to Transfer any Transferor Securities
in a transaction subject to this Section 2, then it shall promptly notify, or
cause to be notified, the Remaining Stockholders, in writing, of each such
proposed Transfer (the "Transfer Notice"). Such Transfer Notice shall set forth:
(i) the name of the Transferee and the number of Transferor Securities proposed
to be Transferred, and (ii) the proposed amount and form of consideration and
terms and conditions of payment offered by the Transferee (the "Transferee
Terms"). The Right of Co-Sale may be exercised by the Remaining Stockholders
delivering a written notice to the Transferor (the "Co-Sale Notice") within
thirty (30) calendar days following receipt of the Transfer Notice. The Co-Sale
Notice shall state the number of Shares (or Preferred Shares) that each
Remaining Stockholder wishes to include in such Transfer to the Transferee,
which number may not exceed its Right of Co-Sale Amount. Upon the giving of a
Co-Sale Notice, a Stockholder shall be irrevocably obligated to sell the number
of Shares or (Preferred Shares) set forth in its Co-Sale Notice to the
Transferee (or the Transferor, if applicable) on the Transferee Terms.
(b) Assignment of Interest.
If a Stockholder exercises its respective Co-Sale Rights, then
the Transferor shall assign to such Stockholder as much of its interest in the
agreement of sale with the Transferee as such Stockholder shall be entitled to,
and such Stockholder shall be obligated to provide the representations,
warranties and covenants to the Transferee reasonably equivalent to those
provided by the Transferor under such agreement of sale. To the extent that any
Transferee prohibits such assignment or otherwise refuses to purchase Shares (or
Preferred Shares) from a Stockholder exercising its Right of Co-Sale hereunder,
then the Transferor shall not sell to such Transferee any Transferor Securities
unless and until, simultaneously with such sale, the Transferor shall purchase
such Shares (or Preferred Shares) from such Stockholder for the same
consideration per share and on the same terms and subject to the same conditions
as the proposed Transfer described in the Transfer Notice.
(c) Failure to Exercise Right of Co-Sale; Additional Transfers.
If no Stockholder elects to exercise its Right of Co-Sale, then
the Transferor may, not later than 60 calendar days following delivery to the
Remaining Stockholders of the Transfer
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Notice, conclude a Transfer of not less than all of the Transferor Securities
covered by the Transfer Notice on terms and subject to conditions not more
favorable to the Transferor than those described in the Transfer Notice. Any
proposed Transfer of more securities by the Transferor shall again be subject to
the Right of Co-Sale and shall require compliance by the Transferor with the
procedures described in this Section 2.
2.4. Exceptions to Right of Co-Sale. The Right of Co-Sale shall not
apply to Permitted Transfers.
3. Drag-Along Right.
3.1. In the event that a Stockholder or Stockholders holding Shares or
Preferred Shares which represent a majority of the Shares (or Preferred Shares)
then held by all Stockholders (the "Majority Stockholders") desire to pursue
discussions with any third party regarding a potential Transfer of all of the
Shares (or Preferred Shares) then held by the Majority Stockholders to such
third party at any time, the Majority Stockholders shall, prior to pursuing such
discussions, disclose to the Board their intentions with respect thereto.
3.2. In the event that the Majority Stockholders shall agree to
Transfer, in a bona fide arm's length transaction for value (either in a single
transaction or a series of related transactions), a direct or indirect interest
in all of the Shares (or Preferred Shares) owned by the Majority Stockholders to
any Person or "group" (as such term is used for purposes of Section 13(d) of the
Exchange Act) (the "Buyer"), which Buyer desires also to purchase all of the
Shares (or Preferred Shares) then owned by the Remaining Stockholders or their
successors or assigns for the same price per share as the Buyer contemplates
purchasing the Majority Stockholders' Shares (or Preferred Shares), the Majority
Stockholders shall notify the Remaining Stockholders and the Company in writing
(such notice, a "Drag-Along Notice") of its intention to effectuate such
contemplated transaction, setting forth in such Drag-Along Notice the identity
of the Buyer, the aggregate purchase price which the Buyer shall pay for all of
the Shares or Preferred Shares and the intended date on which such transaction
shall close; and the Remaining Stockholders shall, on the basis of such
notification, fully cooperate in such transaction and sell all of their Shares
or Preferred Shares to such Buyer, for the same price and otherwise in
accordance with identical terms and conditions as those on which the Majority
Stockholders shall sell their Shares or Preferred Shares to such Buyer. The
Drag-Along Notice shall be delivered no more than 90 nor fewer than 15 days
prior to the intended date of the closing of such transaction, and such
transaction shall not, in fact, close more than 270 calendar days after the
delivery of the Drag-Along Notice.
3.3. Exceptions to Drag-Along Right. The drag-along rights set forth in
this Article 3 shall not apply to Permitted Transfers.
4. Transfer Rights.
4.1. General. Transfers of Shares and Preferred Shares are strictly
prohibited, except for (i) Permitted Transfers and (ii) Transfers consummated in
accordance with Section 2 or Section 3 hereof. Any attempt to Transfer any
Shares or Preferred Shares
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not in accordance with this Agreement shall be null and void and neither the
Company nor any transfer agent of such securities shall give any effect to such
attempted Transfer in its records. Prior to consummation of any Transfer
permitted under the first sentence of this Section 4.1, the transferor shall
cause the transferee to execute an agreement in form and substance reasonably
satisfactory to the Board, providing that such transferee shall be bound by all
the terms and provisions of, and entitled (subject to Section 7.1) to all the
rights and benefits under, this Agreement, which are or theretofore had been
applicable to the transferor of the securities in question.
4.2. Legend. Any certificate representing outstanding Shares or
Preferred Shares which are held by a party to this Agreement or otherwise
subject to the terms hereof shall bear the following legend, in addition to any
other legend required by law or otherwise:
"THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR UNDER THE BLUE SKY LAWS OF ANY JURISDICTION. NO SALE OR
TRANSFER OF THESE SHARES MAY BE MADE WITHOUT REGISTRATION UNDER SAID ACT OR
COMPLIANCE WITH EXEMPTIONS THEREFROM AND COMPLIANCE WITH APPLICABLE BLUE SKY
LAWS OR EXEMPTIONS THEREFROM."
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE GOVERNED BY
THE TERMS OF THAT CERTAIN STOCKHOLDERS AGREEMENT (THE "STOCKHOLDERS AGREEMENT")
DATED AS OF MARCH 5, 1998, A COPY OF WHICH IS ON FILE AT THE OFFICES OF THE
COMPANY. ANY ATTEMPT TO TRANSFER OR ENCUMBER ANY INTEREST IN THE SHARES
REPRESENTED BY THIS CERTIFICATE NOT IN ACCORDANCE WITH SUCH STOCKHOLDERS
AGREEMENT SHALL BE NULL AND VOID AND NEITHER THE COMPANY NOR ANY TRANSFER AGENT
OF SUCH SECURITIES SHALL GIVE ANY EFFECT TO SUCH ATTEMPTED TRANSFER OR
ENCUMBRANCE IN ITS SHARE RECORDS. THE HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE
OF IT, AGREES TO BE BOUND BY THE TERMS OF THE STOCKHOLDERS AGREEMENT."
5. Management of the Company; Voting.
5.1. Board Composition.
(a) Subject to the provisions of this Section 5, each Stockholder
agrees to take such action as may be necessary, in its capacity as a stockholder
of the Company, to nominate and recommend to the stockholders of the Company as
the proposed members of the Board, at any annual or special meeting of
stockholders called for the purpose of voting on the election of directors, or
by consensual action of stockholders with respect to the election of directors,
as follows: (i) John D. Fujii; (ii) Brian McTernan; (iii) two (2) individuals
designated in writing to the Company by Spectrum Equity Investors II, L.P., (iv)
two (2) individuals designated in writing to the Company by Providence Equity
Partners L.P., (v) one (1) individual designated in writing to the Company by
Sandler Capital Management and (vi)
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one (1) individual designated in writing to the Company by Triumph Partners III,
L.P. The individuals to be designated initially by the foregoing entities are
set forth on Schedule 5.1. The right to designate nominees shall be reduced as
follows:
(A) From and after such time as any entity having the
right to designate two (2) nominees owns, together with its Affiliates, less
than 75% of the Shares purchased by such entity and its Affiliates pursuant to
the Stock Purchase Agreement, such entity shall forfeit its respective right to
designate one (1) nominee for election to the Board of Directors (excluding for
purposes hereof any decrease due to a reverse stock split, Transfer, or other
change affecting all Stockholders on a substantially proportionate basis). This
clause (A), if applicable, shall apply to the exclusion of clause (B) below.
(B) From and after such time as any entity having the
right to designate one nominees owns, together with its Affiliates, less than
50% of the Shares purchased by such entity and its Affiliates pursuant to the
Stock Purchase Agreement, such entity shall forfeit its respective right to
designate any individual for election to the Board of Directors (excluding for
purposes hereof any decrease due to a reverse stock split, Transfer, or other
change affecting all Stockholders on a substantially proportionate basis).
(b) Except as otherwise provided in this Section 5, each of the
Stockholders further agrees (i) to appear in person or by proxy at any annual or
special meeting of stockholders of the Company for the purpose of obtaining a
quorum and to vote all voting securities of the Company now or hereafter
directly or beneficially owned by such Stockholder, either in person or by
proxy, at any such meeting of the stockholders of the Company called for the
purpose of voting on the election of directors, and (ii) to execute a written
consent pursuant to any consensual action with respect to the election of
directors (to the extent permitted by law), in each case (1) in favor of the
election of the directors nominated in accordance with designations made
pursuant to Section 5.1(a), 5.2 or 5.4 and (2) in favor of the removal of any
director required to be removed in accordance with Section 5.3.
5.2. Filling Vacancies. If, at any time during which Stockholders are
entitled to designate directors pursuant to Section 5.1, a vacancy is created on
the Board by the death, removal or resignation of any one of the directors
designated by a Stockholder pursuant to Section 5.1(a)(iii)-(a)(vi), then the
Stockholder that had designated such director, if then entitled to designate
such director pursuant to Section 5.1, shall designate another individual to be
elected to the Board, and the Stockholders shall take such action as may be
necessary to cause, within ten (10) days after such designation occurs, the
election of such designated individual to the Board.
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5.3. Removal of Directors Designated by Stockholder Entitled to
Designate Directors. The Stockholders shall take such action as may be necessary
to cause any director to be removed from the Board for any reason at the request
of the Stockholder that had designated such individual to be a director pursuant
to this Section 5. No Stockholder shall vote its voting securities of the
Company to remove any director designated by a Stockholder except as requested
in writing by the Stockholder who designated that director.
5.4. Replacement Nominees; Regulatory Restrictions.
(a) If, prior to an individual's election to the Board pursuant
to Section 5.1 or 5.2, any individual designated by a Stockholder to serve as a
director shall be unable or unwilling to serve as a director, the Stockholder
who nominated any such individual to serve as a director shall be entitled to
nominate a replacement and the Stockholders shall take all necessary action to
elect such nominee to the Board.
(b) Each Stockholder holding the right to designate a director
pursuant to Section 5.1 shall nominate an individual who, to the best of such
Stockholder's knowledge, does not have any attributable interests in any Person
who then owns or operates property subject to regulation by the Federal
Communications Commission ("Regulated Property") which would likely prohibit the
Company from acquiring or operating any interest in any Regulated Property. If
circumstances should change subsequent to a designee's election to the Board
such that maintaining such designee as a director would likely prohibit the
Company from acquiring or operating any interest in any Regulated Property, the
Stockholder who designated any such individual for election to the Board shall
promptly request the director's removal in accordance with Section 5.3 and
nominate a replacement designee in accordance with Section 5.2.
5.5. Voting of Board.
(a) The vote of the majority of the directors shall decide any
matter brought before the Board, unless the matter is one upon which by express
provision of law, the Charter Documents or this Agreement, a different vote is
required, in which case such express provision shall govern and control.
(b) Notwithstanding the provisions of Section 5.5(a), the
affirmative vote of each director designated by a Stockholder (as set forth on
Schedule 5.1 or any replacement director designated in accordance with this
Section), shall be required for the Company to take, and each such Stockholder
shall exercise all voting rights and other powers of control available to it in
relation to the Company and the directors so as to ensure that the Company shall
not without such approval take, the following actions:
(i) authorize the execution, delivery and performance
of the Merger Agreement by the Company; and
(ii) waive any material condition in, or authorize any
material modification or amendment of the Merger Agreement by the Company
(provided that the Board
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of Directors may not approve any amendment to the Merger Agreement which would
raise the merger price above $14.00 per share).
The Stockholders referenced in the first sentence of this Section 5.5(b) shall
exercise all voting rights and other powers of control available to them in
relation to the Company and the directors to cause the directors to authorize
the delivery of a Drawdown Notice at such time as such Stockholders have a
reasonable basis to expect that the conditions to the Company's obligation to
consummate the Merger and the transactions contemplated by the Merger Agreement
will be satisfied or waived and the delivery of such Drawdown Notice is then
necessary to allow for the timely funding of the purchase of the Committed
Shares (as defined in the Stock Purchase Agreement).
(c) Notwithstanding the provisions of Section 5.5(a) and even if
a vote of the Board may not be required under applicable law for any of the
following, the affirmative vote (or the prior written consent) of five directors
shall be required for the Company to take, and the Stockholders shall exercise
all voting rights and other powers of control available to them in relation to
the Company and the directors so as to ensure that the Company shall not without
such approval take, the following actions:
(i) the disposition of assets (in a single transaction
or a series of related transactions) in an amount in excess of $5,000,000;
(ii) the entry into any transaction which would result in
a Change of Control;
(iii) subject to Section 7.3, the approval of the
dissolution or liquidation of the Company;
(iv) the declaration or payment of any dividends on, or
the incurrence of any obligation to make any other distribution in respect of,
outstanding equity interests of the Company;
(v) the incurring of, entry into or commitment to any
indebtedness, in an aggregate principal amount in excess of $5,000,000 (except
for incurrence of indebtedness to finance the Merger) in a single transaction or
series of related transactions;
(vi) any acquisition of assets (in a single transaction or
a series of related transactions) in an amount in excess of $5,000,000;
(vii) any amendment to the Charter Documents;
(viii) the repurchase or redemption of the Company's
capital stock from a Stockholder in an amount not equal to such Stockholder's
pro rata ownership of such capital stock;
(ix) any change in the number of directors;
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(x) the removal or appointment of any senior
executives, including the Chief Executive Officer, Chief Operating Officer and
Chief Financial Officer;
(xi) any issuance of additional shares of capital stock of
the Company or any rights, options, warrants or other instruments convertible or
exchangeable therefor, other than the issuance of shares of capital stock
contemplated by the Stock Purchase Agreement;
(xii) any transaction with an Affiliate with a value in
excess of $250,000;
(xiii) entering into any other contract or arrangement
material to the Company; and
(xiv) any amendment to Schedule 3.11 of the Stock Purchase
Agreement.
5.6. Voting of Stockholders.
(a) The vote of the holders of a majority of the Outstanding
Voting Shares entitled to vote shall decide any matters brought before any
meeting of Stockholders, unless the matter is one upon which by express
provision of law, the Charter Documents or this Agreement, a different vote is
required, in which case such express provision shall govern and control.
(b) Notwithstanding the provisions of Section 5.6(a) and even if
a vote of the Stockholders may not be required under applicable law for any of
the following, the vote or prior written consent of Stockholders then holding
Outstanding Voting Shares representing 66-2/3% of the Outstanding Voting Shares
held by all Stockholders shall be required before the Company may take, and the
Stockholders shall exercise all voting rights and other powers of control
available to them in relation to the Company and the directors so as to ensure
that the Company shall not without such approval take, the following actions:
(i) the sale of all or substantially all of the assets
of the Company by sale, assignment, merger, reorganization, or by any other
manner;
(ii) the entry into any transaction which would result in
a Change of Control; and
(iii) any amendment to the Company's Charter Documents.
5.7. Approval of Merger. Notwithstanding any provision herein to the
contrary, upon approval by the Board of the Merger and the Merger Agreement,
each Stockholder shall vote, or act by written consent, and hereby gives its
written consent (subject only to such Board approval), in favor of the approval
and authorization of the Merger, the Merger Agreement and the transactions
contemplated thereby and shall execute all documents requested by the Board
necessary to effectuate such approval and authorization. Each Stockholder agrees
that it will not
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exercise, and hereby waives, any and all rights that it may have to dissent or
seek appraisal, arising from the Merger under the Delaware General Corporation
Law or any other principle of law with respect to any of its shares of capital
stock of the Company.
5.8. Officers of the Company. Each Stockholder agrees to cause its
nominees to the Board to take such action as may be necessary to appoint Brion
Applegate as Chairman, Chief Executive Officer and Treasurer, and Jonathan
Nelson as President and Secretary of the Company effective on or about the date
hereof. Effective upon consummation of the Merger, Brion Applegate and Jonathan
Nelson shall resign from their respective officer positions. Effective upon
consummation of the Merger, each Stockholder agrees to cause its nominees to the
Board to take such action as may be necessary to appoint John D. Fujii and Brian
McTernan as Officers of the Company.
5.8.1. Board Observer. During such time as a Stockholder holds
Shares and Preferred Shares for which such Stockholder paid, or has committed to
pay, at least $10 million pursuant to the Stock Purchase Agreement (and has not
defaulted with respect to any such payment obligations), such Stockholder shall
have the right to designate one representative as a Board observer and as an
observer of any committee of the Board. In addition, each such Stockholder shall
have the right to designate one representative as an observer of the board of
directors of any wholly-owned subsidiary ("Subsidiary") of the Company which
does not consist solely of employees of the Company or its Subsidiaries and any
committees thereof. The Company shall provide notice of board and committee
meetings to any duly designated observer at such time and in such manner as it
provides notice to directors and such observer shall have the right to attend
such board and committee meetings. The observer shall be entitled to receive
written materials distributed to the relevant board or committee members. The
Company shall cause each Subsidiary subject to this Section 5.8.1 to comply with
the aforementioned notice and information requirements. Except for the rights
described herein, the observer shall not have any other rights of a board or
committee member, including the right to vote as a member thereof, and shall not
represent to any party that he is a director. The Company and each Subsidiary
subject hereto shall have the right to require any board or committee observer
to execute a confidentiality agreement as a precondition to his being a board or
committee observer.
5.9. Inspection Rights. During such time as a Stockholder shall have
the right to appoint a designee for election to the Board pursuant to Section
5.1 or to designate a Board observer pursuant to Section 5.9, such Stockholder
shall have the right to inspect the books, records and premises of the Company
during normal business hours upon reasonable notice.
6. Right of First Refusal on Issuance of New Securities by the Company.
6.1. Generally. The Company hereby grants to each Stockholder the right
of first refusal to purchase such Stockholder's pro rata share of New Securities
which the Company may from time to time propose to sell and issue. For purposes
of this right of first refusal, a Stockholder's pro rata share (the "Section 6
Pro Rata Share") shall be that
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proportion which the number of shares of Shares then held by such Stockholder
bears to the aggregate number of Shares then held by all Stockholders.
6.2. Notice of New Issues. In the event the Company proposes to
undertake an issuance of New Securities, it shall give each Stockholder written
notice (the "Section 6 Notice") of its intention, describing the type of New
Securities, the price, and the principal terms upon which the Company proposes
to issue the same. Each Stockholder shall have twenty (20) days from the
delivery date of any Section 6 Notice to agree, irrevocably, to purchase up to
the Stockholder's Section 6 Pro Rata Share of such New Securities for the price
and upon the terms specified in the Section 6 Notice by giving written notice to
the Company and stating therein the quantity of New Securities to be purchased.
6.3. Failure to Exercise Right. In the event a Stockholder fails to
agree to purchase all of such Stockholder's Section 6 Pro Rata Share pursuant to
Section 6.2, the Company shall give a Section 6 Notice to the other Stockholders
of such failure pursuant to Section 6.2, and the other Stockholders shall have
the right to purchase all such shares in the manner set forth in Section 6.2. In
the event any shares of New Securities are still not purchased after the
foregoing procedures have been effected, the Company shall have ninety (90) days
after the last date on which any Stockholder's right to purchase lapsed to sell
or enter into an agreement (pursuant to which the sale of New Securities covered
thereby shall be closed, if at all, within ninety (90) days from the date of
said agreement) to sell the New Securities in respect of which such
Stockholder's option was not exercised, at or above the price and upon terms not
more favorable to the purchasers of such securities than the terms specified in
the initial Section 6 Notice given in connection with such sale. In the event
the Company has not sold the New Securities or entered into an agreement to sell
the New Securities within said ninety-day period (or sold and issued New
Securities in accordance with the foregoing within ninety (90) days from the
date of said agreement), the Company shall not thereafter issue or sell any New
Securities without first offering such New Securities to the Stockholders in the
manner provided in this Section 6.
6.4. Waiver. Messrs. Fujii and McTernan agree to waive their respective
rights of first refusal under this Section 6 if the other Stockholders shall
have waived their rights under this Section.
7. Miscellaneous.
7.1. Entire Agreement; Successors and Assigns. This Agreement
constitutes the entire agreement between the Company and the Stockholders
concerning the subject matter hereof. Any previous agreement between the Company
and the Stockholders concerning the subject matter hereof is superseded by this
Agreement. Subject to Section 4.1 hereof, the terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
executors, administrators, heirs, successors and permitted assigns of the
parties. Notwithstanding the foregoing or the definition of "Permitted
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Transfers", the rights of the Stockholders set forth in Section 5.1 shall not be
transferable to any Person except to an Affiliate of a Stockholder upon a
Permitted Transfer by such Stockholder of all of its Shares to such Affiliate.
7.2. Termination. Sections 2, 3, 4.1 and 6 shall automatically terminate
upon an Initial Public Offering which raises at least $50,000,000 in proceeds to
the Company and is underwritten pursuant to a firm commitment underwriting by
nationally recognized underwriters. Section 5 shall terminate as provided
therein. Notwithstanding any provision hereof, this entire Agreement shall
terminate at such time as the Stockholders hold in the aggregate less than 20%
of the Outstanding Voting Shares.
7.3. Termination of Stock Purchase Agreements; Dissolution of the
Company. Upon the termination of the Stock Purchase Agreement, the Board shall
take all action to effect the prompt dissolution and liquidation of the Company
in accordance with applicable law.
7.4. Governing Law. This Agreement shall be governed by and construed in
accordance with the substantive laws of the State of Delaware, without reference
to any choice of law rules that would require the application of the laws of any
other jurisdiction.
7.5. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
7.6. Headings. The headings of the sections of this Agreement are for
convenience and shall not by themselves determine the interpretation of this
Agreement.
7.7. Notices. Any notice required or permitted hereunder shall be given
in writing and shall be conclusively deemed effectively given (a) upon personal
delivery to the person to be notified, (b) when sent by confirmed facsimile if
sent during normal business hours of the recipient; if not, then on the next
business day, (c) five (5) days after deposit in the United States mail, by
registered or certified mail, postage prepaid, or (d) one (1) day after deposit
with a nationally recognized overnight courier, specifying next day delivery,
with written verification of receipt addressed as set forth on the signature
page of this Agreement, or at such other address as a party may designate by ten
(10) days' advance written notice to the other party.
7.8. Effectiveness; Amendment of Agreement. Any provision of this
Agreement may be amended only by a written instrument signed by Stockholders
then holding Shares representing 66-2/3% of the Shares then held by the
Stockholders; provided that Sections 2, 3, 4 and 7 (and related definitions) may
be amended only by a written instrument signed by each of the Stockholders which
then hold any Shares or any Preferred Shares. In addition to the foregoing, any
amendment to Section 5 must be approved by the affirmative vote (or prior
written consent) of five directors; provided that Section 5.5(b) may be amended
only by a written instrument signed by each of the Stockholders which then hold
any Shares; and, provided further, that no Stockholder shall as a result of any
amendment to Section 5.1 lose its right, if any, to designate a director
pursuant thereto, unless such Stockholder and its Affiliates hold less than 20%
of the Shares that such Stockholder and its affiliates purchased pursuant to the
Stock
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Purchase Agreement. Notwithstanding the foregoing, Exhibit A may be amended by
the Company as necessary to reflect the addition of new Stockholders pursuant to
the terms hereof, or to reflect the addition of parties hereto as contemplated
by this Agreement; and further provided that no amendment which adversely
affects any Stockholder other than in the same manner that such amendment
affects each other Stockholder on a pro rata basis will be effective without
such first Stockholder's written consent.
7.9. Waiver; Severability. The waiver by one party hereto of any breach
by the other (the "Breaching Party") of any provision of this Agreement shall
not operate or be considered as a waiver of any other (prior or subsequent)
breach by the Breaching Party, and the waiver of a breach of a provision in one
instance shall not be deemed a waiver of such provision in any other
circumstance. If any term or provision of this Agreement or the application
thereof to any Person, property or circumstance shall to any extent be invalid
or unenforceable, the remainder of this Agreement, or the application of such
term or provision to persons, property or circumstances other than those as to
which it is invalid or unenforceable, shall not be affected thereby, and each
term and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
7.10. Ownership. Each Stockholder represents and warrants that it is the
sole legal and beneficial owner of those Shares and Preferred Shares it
currently holds subject to this Agreement and that no other Person has any
interest (other than a community property interest) in such Shares or Preferred
Shares.
7.11. Attorneys' Fees. In the event that any dispute among the parties
to this Agreement should result in litigation, the prevailing party in such
dispute shall be entitled to recover from the losing party all fees, costs and
expenses of enforcing any right of such prevailing party under or with respect
to this Agreement, including without limitation, such reasonable fees and
expenses of attorneys and accountants, which shall include, without limitation,
all fees, costs and expenses of appeals.
7.12. Specific Performance. Each of the Stockholders and the Company
acknowledge that any violation of this Agreement will result in irreparable
injury to the non-breaching party, the exact amount of which will be difficult
to ascertain, and that the remedies at law for any such violation would not be
reasonable or adequate compensation to the non-breaching party for such a
violation. Accordingly, the Stockholders and the Company agree that if any of
the Stockholders and/or the Company violates any provision of this Agreement, in
addition to any other remedy which may be available at law or in equity, the
non-breaching party shall be entitled to specific performance and injunctive
relief, without posting bond or other security, and without the necessity of
proving actual damages.
7.13. Regulated Stockholders. At the request of any Regulated
Stockholder, the Company will exchange (on a share-for-share basis) shares of
voting securities of the Company held by such Regulated Stockholder, or will
issue to such Regulated Stockholder in lieu of voting securities otherwise
issuable to such Regulated Stockholder pursuant to Section 6, shares of other
securities which (a) do not have voting rights (or which have such limited
voting rights as such
14
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Regulated Stockholder may reasonably request), (b) are convertible into such
voting securities on a share-for-share basis (subject to such limitations as
such Regulated Stockholder may request), and (c) are otherwise identical to such
voting securities. Any such non-voting or limited-voting securities will
constitute "Shares" for purposes of this Agreement. "Regulated Stockholder"
means any direct or indirect majority-owned subsidiary of a bank holding
company, or any bank holding company.
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Exhibit 6
March 6, 1998
PriCellular Corporation
711 Westchester Avenue
White Plains, NY 10604
Dear Sirs:
This will confirm that we hereby agree to be bound by Section 4.05 of the
Voting Agreement dated as of the date hereof by and among American Cellular
Corporation, and the holders of PriCellular Corporation ("PriCellular") but
only with respect to the shares of PriCellular Series A Preferred Stock we own.
SPECTRUM EQUITY INVESTORS, L.P.
By: Spectrum Equity Associates, L.P.
its general Partner
By: /s/ Brion Applegate
------------------------------
Name: Brion Applegate
Title: General Partner
