EXHIBIT 1.1
EXECUTION COPY
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PURCHASE AGREEMENT
$200,000,000
10% SERIES A SENIOR SUBORDINATED NOTES DUE 2007
of
CCPR SERVICES, INC.
As Fully and Unconditionally Guaranteed by
CELLULAR COMMUNICATIONS OF PUERTO RICO, INC.
Dated as of January 28, 1997
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation
Salomon Brothers Inc
Xxxxxxxxxxx Xxxxxxx Securities, Inc.
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January 28, 1997
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
SALOMON BROTHERS INC
XXXXXXXXXXX XXXXXXX SECURITIES, INC.
c/x Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
CCPR Services, Inc., a Delaware corporation (the "Company" or "Services"),
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proposes to issue and sell an aggregate of $200,000,000 in principal amount of
10% Series A Senior Subordinated Notes due 2007 (the "Series A Notes") of the
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Company, to Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation ("DLJ"), Salomon
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Brothers Inc and Xxxxxxxxxxx Xxxxxxx Securities, Inc. (collectively, the
"Initial Purchasers"). The payment of principal, premium, interest and
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liquidated damages, if any, on the Series A Notes will be fully and
unconditionally guaranteed (the "Guarantee") by Cellular Communications of
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Puerto Rico, Inc., a Delaware corporation (the "Guarantor"), on a senior
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subordinated basis with respect to all other indebtedness of the Guarantor. The
Series A Notes will be issued pursuant to an indenture (the "Indenture"), to be
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dated the Closing Date (as defined herein), among the Company, the Guarantor and
The Chase Manhattan Bank, as trustee (the "Trustee"). Capitalized terms used
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herein and not otherwise defined shall the meaning assigned to them in the
Indenture.
1. ISSUANCE OF SECURITIES. The Series A Notes will be offered and sold to
the Initial Purchasers pursuant to an exemption from the registration
requirements under the Securities Act of 1933, as amended (the "Securities
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Act"). The Company has prepared a preliminary offering memorandum, dated
January 9, 1997 (including the documents incorporated by reference therein, the
"Preliminary Offering Memorandum"), and a final offering memorandum, dated
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January 28, 1997 (including the documents incorporated by reference therein, the
"Offering Memorandum" and, together with the Preliminary Offering Memorandum,
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the "Offering Documents"), relating to the Company, the Guarantor and the
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Series A Notes.
Upon original issuance thereof, and until such time as the same is no
longer required under the applicable requirements of the Securities Act, the
Series A Notes (and all securities issued in exchange therefor or in
substitution thereof) shall bear the following legend:
THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR
ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
REGISTRATION AND SUBJECT TO COMPLIANCE WITH OTHER APPLICABLE LAWS. THE
HOLDER OF THIS SECURITY BY ITS ACCEPTANCE
HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO
THE DATE WHICH IS THREE YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE
HEREOF AND THE LAST DATE ON WHICH SERVICES OR ANY AFFILIATE OF SERVICES WAS
THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) (THE
"RESALE RESTRICTION TERMINATION DATE"), ONLY (A) TO SERVICES OR TO THE
GUARANTOR, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT
THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS
AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN
THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH
(A)(1),(2),(3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS
ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A
VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
OTHERWISE IN COMPLIANCE WITH OTHER APPLICABLE LAWS, SUBJECT TO SERVICES'
AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT
TO CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND
DELIVERY BY THE TRANSFEROR TO THE COMPANY AND THE TRUSTEE OF A TRANSFER
NOTICE, THE FORM OF WHICH MAY BE OBTAINED FROM THE TRUSTEE AND, IN THE CASE
OF THE FOREGOING CLAUSE (E), DELIVERY BY THE TRANSFEROR OF A LETTER OF
REPRESENTATION SIGNED BY SUCH TRANSFEREE, THE FORM OF WHICH MAY BE OBTAINED
FROM THE TRUSTEE. THE LEGEND WILL BE REMOVED UPON THE REQUEST OF A HOLDER
AFTER THE RESALE RESTRICTION TERMINATION DATE.
2. AGREEMENTS TO SELL AND PURCHASE. On the basis of the representations
and warranties contained in, and subject to the terms and conditions of, this
Agreement, (i) the Company agrees to issue and sell the Series A Notes to the
Initial Purchasers and (ii) the Initial Purchasers, severally, but not jointly,
agree to purchase the Series A Notes from the Company at a purchase price of
97.25% of the principal amount of the Series A Notes (the "Purchase Price") in
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the amount set forth opposite the name of such Initial Purchaser on Schedule I
hereto.
3. TERM OF OFFERING. The Initial Purchasers have advised the Company that
the Initial Purchasers will make offers (the "Exempt Resales") of the Series A
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Notes purchased by the Initial Purchasers hereunder on the terms set forth in
the Offering Memorandum, as amended or supplemented, solely to (i) persons which
the Initial Purchasers reasonably believe to be "qualified institutional buyers"
as defined in Rule 144A under the Securities Act ("QIBs") in transactions under
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Rule 144A, (ii) a limited number of other institutional "accredited investors,"
as defined in Rule 501(a) (1), (2), (3) and (7) under
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the Securities Act, that make certain representations and agreements to the
Company (each, an "Accredited Institution"), in private sales exempt from
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registration under the Securities Act and, (iii) non-U.S. persons outside the
United States in reliance upon Regulation S ("Regulation S") under the
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Securities Act (such persons specified in clauses (i), (ii) and (iii) being
referred to herein as the "Eligible Purchasers"). The Initial Purchasers will
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offer the Series A Notes to Eligible Purchasers initially at a price equal to
the purchase price set forth on the cover of the Offering Memorandum. Such
price may be changed at any time without notice.
Holders (including subsequent transferees) of the Series A Notes will have
the registration rights set forth in the registration rights agreement (the
"Registration Rights Agreement"), to be dated the Closing Date, in substantially
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the form of Exhibit A hereto, for so long as such Series A Notes constitute
"Transfer Restricted Securities" (as defined in the Registration Rights
Agreement). Pursuant to the Registration Rights Agreement, the Company and the
Guarantor will agree to file with the Securities and Exchange Commission (the
"Commission") under the circumstances set forth therein, (i) a registration
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statement under the Securities Act (the "Exchange Offer Registration Statement")
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relating to (A) the Company's 10% Series B Senior Subordinated Notes due 2007
(the "Series B Notes" and, together with the Series A Notes, the "Notes") to be
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offered in exchange for the Series A Notes (such offer to exchange being
referred to as the "Exchange Offer"), and (ii) a shelf registration statement
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pursuant to Rule 415 under the Securities Act (the "Shelf Registration
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Statement" and together with the Exchange Offer Registration Statement, the
"Registration Statements") relating to the resale by certain holders of the
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Series A Notes, and to use their best efforts to cause any such Registration
Statement to be declared effective. This Agreement, the Indenture, the
Registration Rights Agreement, the Notes and the Guarantee are hereinafter
referred to collectively as the "Operative Documents."
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4. DELIVERY AND PAYMENT. Delivery to the Initial Purchasers by the
Company of, and payment by the Initial Purchasers for, the Series A Notes shall
be made at 9:00 a.m., New York City time, on January 31, 1997 (the "Closing
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Date") at the offices of Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, or at such other time or place as the Initial Purchasers and the Company
shall designate.
One or more Series A Notes in definitive form, registered in the name of
Cede & Co., as nominee of The Depository Trust Company ("DTC"), or such other
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names as the Initial Purchasers may request upon at least one business days'
notice to the Company, having an aggregate principal amount corresponding to the
aggregate principal amount of Series A Notes sold pursuant to Exempt Resales to
QIBs and to Accredited Institutions, shall be delivered by the Company to the
Initial Purchasers, against payment by the Initial Purchasers of the purchase
price thereof by wire transfer of immediately available funds to the Company's
account or as the Company may direct. The Global Notes in definitive form shall
be made available to the Initial Purchasers for inspection not later than 9:30
a.m. on the business day immediately preceding the Closing Date.
5. AGREEMENTS OF THE COMPANY AND THE GUARANTOR. The Company and the
Guarantor agree with the Initial Purchasers:
(a) To advise the Initial Purchasers promptly and, if requested by the
Initial Purchasers within the period of time referred to in paragraph (d)
below, to confirm such advice in writing, (i) of receipt of any
notification with respect to the issuance by any state securities
commission of any stop order suspending the qualification or exemption from
qualification of any of the Series A Notes for offering or sale in any
jurisdiction designated by the Initial Purchasers
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pursuant to Section 5(f) hereof, or the initiation of any proceeding for
such purpose by any state securities commission or other regulatory
authority, and (ii) of the happening of any event that makes any statement
of a material fact made in the Offering Documents (or any amendment or
supplement thereto) untrue or that requires the making of any additions to
or changes in the Offering Documents (or any amendment or supplement
thereto) in order to make the statements therein, in the light of the
circumstances in which they are made, not misleading. The Company and the
Guarantor shall use their best efforts to prevent the issuance of any stop
order or order suspending the qualification or exemption from qualification
of the Series A Notes under any state securities or Blue Sky laws, and, if
at any time any state securities commission or other regulatory authority
shall issue any stop order or order suspending the qualification or
exemption from qualification of any of the Series A Notes under any state
securities or Blue Sky laws, the Company and the Guarantor shall use their
best efforts to obtain the withdrawal or lifting of such order at the
earliest possible time.
(b) Subject to paragraph (e) below, during the time period mentioned
in paragraph (d) below, to furnish to the Initial Purchasers, without
charge, as many copies of the Offering Documents, and any amendments or
supplements thereto, as the Initial Purchasers may reasonably request. The
Company and the Guarantor consent to the use of the Offering Documents, and
any amendments or supplements thereto, by the Initial Purchasers in
connection with Exempt Resales.
(c) Not to amend or supplement the Offering Memorandum, whether before
or after the Closing Date, unless (i) the Initial Purchasers have been
previously advised thereof, and (ii) the Initial Purchasers have not
reasonably objected thereto within five business days of being furnished a
copy thereof (unless in the opinion of counsel to the Company such
amendment or supplement is required by law); and to prepare, promptly upon
the Initial Purchasers' reasonable request, any amendment or supplement to
the Offering Memorandum that the Initial Purchasers deem necessary or
advisable in connection with Exempt Resales.
(d) Subject to paragraph (e) below, if, after the date hereof and
prior to the completion of any Exempt Resale by the Initial Purchasers, in
the opinion of counsel for the Initial Purchasers, any event shall occur as
a result of which it becomes necessary to amend or supplement the Offering
Memorandum to comply with any law or to make the statements therein, in the
light of the circumstances at the time that the Offering Memorandum is
delivered to an Eligible Purchaser which is a prospective purchaser, not
misleading, the Company and the Guarantor agree to promptly (i) prepare an
appropriate amendment or supplement to the Offering Memorandum and (ii)
furnish the Initial Purchasers with such number of copies of the Offering
Memorandum, as amended or supplemented, as the Initial Purchasers may
reasonably request.
(e) Prior to the consummation of the Exchange Offer or the
effectiveness of the Shelf Registration Statement if, in the reasonable
judgment of the Initial Purchasers, the Initial Purchasers or any of their
affiliates (as such term is defined in the rules and regulations under the
Securities Act) are required to deliver an offering memorandum in
connection with sales of, or market-making activities with respect to, the
Notes, subject to the terms of the Registration Rights Agreement, the
Company and the Guarantor agree (A) to periodically amend or supplement the
Offering Memorandum so that the information contained in the Offering
Memorandum complies with the requirements of Rule 144A of the Securities
Act, (B) to amend or supplement the Offering Memorandum when necessary to
reflect any material changes in the
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information provided therein so that the Offering Memorandum will not
contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in light
of the circumstances existing as of the date the Offering Memorandum is so
delivered, not misleading and (C) to provide the Initial Purchasers with
such number of copies of each such amended or supplemented Offering
Memorandum, as the Initial Purchasers may reasonably request.
Following the consummation of the Exchange Offer or the effectiveness
of the Shelf Registration Statement and for so long as the Notes are
outstanding if, in the reasonable judgment of the Initial Purchasers, the
Initial Purchasers or any of their affiliates (as such term is defined in
the rules and regulations under the Securities Act) are required to deliver
a prospectus in connection with sales of, or market-making activities with
respect to, the Notes, (A) to periodically amend the applicable
registration statement so that the information contained therein complies
with the requirements of Section 10(a) of the Securities Act, (B) to amend
the applicable registration statement or supplement the related prospectus
or the documents incorporated therein when necessary to reflect any
material changes in the information provided therein so that the
registration statement and the prospectus will not contain any untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in light of the circumstances
existing as of the date the prospectus is so delivered, not misleading and
(C) to provide the Initial Purchasers with such number of copies of each
amendment or supplement filed and such other documents, including, as
provided in the Registration Rights Agreement, opinions of counsel and
"comfort" letters, as the Initial Purchasers may reasonably request.
The Company and the Guarantor hereby expressly acknowledge that the
indemnification and contribution provisions of Section 8 hereof are
specifically applicable and relate to each offering memorandum,
registration statement, prospectus, amendment or supplement referred to in
this Section 5(e).
(f) To cooperate with the Initial Purchasers and counsel for the
Initial Purchasers in connection with the qualification of the Series A
Notes for offer and sale by the Initial Purchasers under the state
securities or Blue Sky laws of such jurisdictions as the Initial Purchasers
may reasonably request, to continue such qualification in effect so long as
reasonably required for Exempt Resales of the Series A Notes and to file
such consents to service of process or other documents as may be necessary
in order to effect such qualification; provided, however, that the Company
and the Guarantor shall not be required to qualify as a foreign corporation
where they are not now so qualified or to take any action which would
subject them to the service of process in suits or to taxation, other than
as to matters and transactions relating to the offer and sale of the Notes,
in any jurisdiction where they are not now so subject.
(g) So long as any of the Notes are outstanding, to deliver to the
Initial Purchasers, promptly upon their becoming available, (i) copies of
all current, regular and periodic reports filed by the Company and the
Guarantor with any securities exchange or with the Commission or any
governmental authority succeeding to any of the Commission's functions, and
(ii) copies of each report or other publicly available information of the
Company and the Guarantor mailed to the holders of Notes and such other
publicly available information concerning the Company, the Guarantor and
their direct and indirect subsidiaries (each, a "Subsidiary" and,
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collectively, the "Subsidiaries") as the Initial Purchasers may reasonably
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request.
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(h) To use the proceeds from the sale of the Series A Notes
substantially in the manner specified in the Offering Documents (and any
amendments or supplements thereto) under the caption "Use of Proceeds."
(i) Whether or not the transactions contemplated by this Agreement are
consummated or this Agreement becomes effective or is terminated, to pay
all costs, expenses, fees and taxes incident to and in connection with:
(1) the preparation, printing, filing and distribution under the
Securities Act of the Offering Documents (including, without
limitation, financial statements and exhibits) and all amendments and
supplements to any of them;
(2) the printing and delivery of the Operative Documents, the
preliminary and supplemental Blue Sky memoranda and all other
agreements, memoranda, correspondence and other documents printed and
delivered in connection herewith and with the Exempt Resales
(including in each case any reasonable disbursements of counsel to the
Initial Purchasers relating to such printing and delivery);
(3) the issuance and delivery by the Company of the Series A
Notes to the Initial Purchasers;
(4) the registration or qualification of the Series A Notes for
offer and sale under the securities or Blue Sky laws of the several
states (including, without limitation, the reasonable fees and
disbursements of counsel to the Initial Purchasers relating to such
registration or qualification and memoranda relating thereto);
(5) furnishing such copies of the Offering Documents (including
all documents incorporated by reference therein) and all amendments
and supplements thereto as may be reasonably requested for use in
connection with the Exempt Resales;
(6) the rating of the Notes by rating agencies, if any;
(7) all expenses and listing fees in connection with the
application for quotation of the Series A Notes in the National
Association of Securities Dealers, Inc. Automated Quotation System -
PORTAL ("PORTAL");
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(8) all fees and expenses (including fees and expenses of
counsel) of the Company in connection with approval of the Notes by
DTC for "book-entry" transfer; and
(9) the performance by the Company and the Guarantor of their
obligations under this Agreement (including, without limitation, the
fees of the Trustee, the cost of its personnel and other internal
costs, the cost of printing and engraving the certificates
representing the Notes and all expenses and taxes incident to the sale
and delivery of the Notes to the Initial Purchasers other than any
transfer taxes on resales by the Initial Purchasers).
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(j) Prior to the Closing Date, to furnish to the Initial Purchasers,
as soon as they have been prepared by the Company and the Guarantor, a copy
of any consolidated financial statements of the Company and the Guarantor
for any period subsequent to the period covered by the financial statements
appearing in the Offering Documents.
(k) Not to distribute prior to the Closing Date any offering material
in connection with the offering and sale of the Series A Notes other than
the Offering Documents.
(l) Not to sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in the Securities Act)
that would be integrated with the sale of the Series A Notes in a manner
that would require the registration under the Securities Act of the sale to
the Initial Purchasers or the Eligible Purchasers of Series A Notes.
(m) For so long as Notes remain outstanding or until all of the Notes
may be sold pursuant to Rule 144(k) under the Securities Act, and during
any period in which the Company is not subject to Section 13 or 15(d) of
the Exchange Act, to make available to any Eligible Purchaser or beneficial
owner of Notes in connection with any sale thereof and any prospective
purchaser of such Notes from such Eligible Purchaser or beneficial owner,
the information required by Rule 144A(d)(4) under the Securities Act.
(n) To comply with their agreements in the Registration Rights
Agreement, and all agreements set forth in the representation letters of
the Company to DTC relating to the approval of the Series A Notes by DTC
for "book-entry" transfer.
(o) To use their best efforts to effect the inclusion of the Series A
Notes in PORTAL.
(p) To use their best efforts to do and perform all things required or
necessary to be done and performed under this Agreement by the Company and
the Guarantor prior to the Closing Date and to satisfy all conditions
precedent to the delivery of the Series A Notes and the issuance of the
Guarantee.
(q) Not to engage in any directed selling efforts with respect to the
Notes within the meaning of Regulation S, and that the Company, the
Guarantor and each person acting on their behalf has complied and will
comply with the offering restrictions requirement of Regulation S.
(r) During the period beginning from the date hereof and continuing to
and including the date that is 60 days after the Closing Date, not to
offer, sell, contract to sell or otherwise dispose of, except as provided
hereunder, any securities of the Company (other than the Series B Notes)
that are substantially similar to the Series A Notes including but not
limited to any securities that are convertible into or exchangeable for, or
that represent the right to receive, Series A Notes or any such
substantially similar securities (other than pursuant to employee or
director stock option plans existing on, or upon the conversion or exchange
of convertible or exchangeable securities outstanding as of, the date of
this Agreement, in each case as described in the Offering Memorandum under
the heading "Capitalization" or in the financial statements included
therein), without the prior written consent of DLJ, on behalf of the
Initial Purchasers.
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(s) Not to cause any advertisement of the Series A Notes to be
published in any newspaper or periodical or posted in any public place and
not to issue any circular relating to the Series A Notes, without the prior
approval of DLJ.
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE GUARANTOR. The
Company and the Guarantor, jointly and severally, represent and warrant to the
Initial Purchasers that:
(a) The Offering Documents have been prepared in connection with the
Exempt Resales. The Preliminary Offering Memorandum as of its date did
not, and the Offering Memorandum as of its date does not and as of the
Closing Date will not, and any amendment or supplement thereto will not,
contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading, except
that the representations and warranties contained in this paragraph (a)
shall not apply to statements or omissions in the Offering Documents (or
any amendment or supplement thereto) based upon information relating to the
Initial Purchasers furnished to the Company in writing by or on behalf of
any Initial Purchaser through such Initial Purchaser expressly for use
therein. No stop order preventing the use of the any of the Offering
Documents, or any amendment or supplement thereto, or any order asserting
that any of the transactions contemplated by this Agreement are subject to
the registration requirements of the Securities Act, have been issued.
(b) Each of the Company, the Guarantor and the Subsidiaries is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization, has all corporate or partnership power and
authority to carry on its business as it is currently being conducted and
to own its properties as described in the Offering Documents, and is duly
qualified and in good standing as a foreign corporation authorized to do
business in each jurisdiction in which the nature of its business or its
ownership or leasing of property legally requires such qualification,
except where the failure to be so qualified or in good standing is not
reasonably likely to have a material adverse effect on the business,
condition (financial or other), results of operations or properties of the
Company, the Guarantor and the Subsidiaries taken as a whole (a "Material
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Adverse Effect"). All of the outstanding shares of capital stock of, or
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other equity interests in, each of the Subsidiaries have been duly
authorized and validly issued, are fully paid and nonassessable, are not
subject to preemptive or similar rights and, except as described in the
Offering Memorandum, all of the shares of capital stock or other equity
interests in, the Subsidiaries are owned directly or indirectly by the
Company or the Guarantor, free and clear of any security interest, claim,
lien or encumbrance (each, a "Lien"), except as described in the Offering
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Memorandum, and (ii) there are no outstanding rights, warrants or options
to acquire, or instruments or securities convertible into or exchangeable
for, any shares of capital stock or other equity interest in any such
Subsidiary.
(c) All the outstanding shares of capital stock of the Company and the
Guarantor have been duly authorized and validly issued and are fully paid,
non-assessable and not subject to any preemptive or similar rights.
(d) Neither the Company, the Guarantor nor any of the Subsidiaries is
(i) in violation of its respective articles or certificate of incorporation
or by-laws or other governing documents or (ii) in default in the
performance of any obligation, agreement or condition contained in any
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bond, debenture, note or any other evidence of indebtedness or in any
indenture or other agreement to which it is a party or by which it is bound
or to which any of its properties is subject, except as may be described in
the Offering Memorandum and except where such default would not have a
Material Adverse Effect or (iii) in violation of any law, statute, rule,
regulation applicable to the Company, the Guarantor or any of the
Subsidiaries or of any decree of any court having jurisdiction over the
Company, the Guarantor or any of the Subsidiaries, except where such
violation or violations, individually or in the aggregate, would not have a
Material Adverse Effect. The (i) execution, delivery and performance of
the Operative Documents by the Company and the Guarantor, (ii) compliance
by the Company and the Guarantor with all provisions of the Operative
Documents, and (iii) the consummation of the transactions contemplated
hereby and thereby will not conflict with, or constitute a breach or a
violation of any of the terms or provisions of, or a default under, (A) the
articles or certificate of incorporation or by-laws or other governing
documents of the Company, the Guarantor or any of the Subsidiaries, or (B)
any obligation, agreement or condition contained in any bond, debenture,
note or any other evidence of indebtedness or in any indenture or other
material agreement to which it is a party or by which it is bound or to
which any of its properties is subject, except as may be disclosed in the
Offering Memorandum and except any such conflicts, breaches, violations or
defaults which are not reasonably likely to have a Material Adverse Effect
or (C) any law, statute, rule, regulation, judgment or court decree
applicable to the Company, the Guarantor or any of the Subsidiaries other
than any violation or violations which, individually or in the aggregate,
is not reasonably likely to have a Material Adverse Effect. Except as
required under the Securities Act and applicable state securities or Blue
Sky laws, no consent, authorization, approval or order of, or filing or
registration with, or notice to, any court or governmental agency or body
which has not been made or obtained is required for the execution, delivery
and performance of the Operative Documents and the valid issuance, sale and
performance of the Notes and the Guarantee.
(e) The Company and the Guarantor have all requisite corporate power
and authority to enter into and perform their obligations under the
Operative Documents and to issue and deliver the Notes and the Guarantee as
provided herein. This Agreement has been duly authorized, executed and
delivered by the Company and the Guarantor and is a valid and legally
binding obligation of the Company and the Guarantor, enforceable against
the Company and the Guarantor in accordance with their terms, except as
such enforceability may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
creditor's rights generally, (ii) general principles of equity (regardless
of whether enforcement is considered in a proceeding in equity or at law),
and except as rights to indemnity and contribution hereunder may be limited
by state or federal laws relating to securities or by the policies
underlying such laws.
(f) The Indenture has been duly authorized by each of the Company and
the Guarantor and, upon the execution and delivery by the Company and the
Guarantor (and assuming the due authorization, execution and delivery by
the Trustee), will constitute a legally valid and binding agreement of the
Company and the Guarantor, as applicable, enforceable against the Company
and the Guarantor in accordance with their terms, except as such
enforceability may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
creditor's rights generally and (ii) general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity
or at law), and the Indenture will conform in all material respects to the
description thereof in the Offering Memorandum.
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(g) The Company has duly authorized the Series A Notes and, when executed
by the Company and authenticated by the Trustee in accordance with the
terms of the Indenture and delivered to and paid for by the Initial
Purchasers in accordance with the terms hereof, will be the legally valid
and binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as such enforceability may be limited
by (i) bankruptcy, insolvency, reorganization, moratorium and other similar
laws relating to or affecting creditor's rights generally and (ii) general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law), and the Series A Notes will conform in all
material respects to the description thereof in the Offering Memorandum.
(h) The Guarantor has duly authorized the Guarantee to be endorsed on
the Series A Notes and, when executed by the Guarantor and authenticated by
the Trustee in accordance with the terms of the Indenture and delivered to
and paid for by the Initial Purchasers in accordance with the terms hereof,
the Guarantee will be the legally valid and binding obligation of the
Guarantor, enforceable against it in accordance with its terms, except as
such enforceability may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
creditor's rights generally and (ii) general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity
or at law), and the Guarantee will conform in all material respects to the
description thereof in the Offering Memorandum.
(i) The Company has duly authorized the Series B Notes and, if
executed by the Company and authenticated by the Trustee in accordance with
the terms of the Exchange Offer and the Indenture, will be the legally
valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms, except as such enforceability may
be limited by (i) bankruptcy, insolvency, reorganization, moratorium and
other similar laws relating to or affecting creditor's rights generally and
(ii) general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law), and the Series B Notes
will conform in all material respects to the description thereof in the
Offering Memorandum.
(j) The Guarantor has duly authorized the Guarantee to be endorsed on
the Series B Notes and, if executed by the Guarantor and authenticated by
the Trustee in accordance with the terms of the Exchange Offer and the
Indenture, the Guarantee will be the legally valid and binding obligation
of the Guarantor, enforceable against it in accordance with its terms,
except as such enforceability may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
creditor's rights generally and (ii) general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity
or at law), and the Guarantee will conform in all material respects to the
description thereof in the Offering Memorandum.
(k) The Registration Rights Agreement has been duly authorized by each
of the Company and the Guarantor and, upon the execution and delivery by
the Company and the Guarantor and (assuming the due authorization,
execution and delivery thereof by the Initial Purchasers) will be a legally
valid and binding agreement of the Company and the Guarantor, enforceable
against each of them in accordance with its terms, except as such
enforceability may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
creditor's rights generally and (ii) general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity
or at law).
10
(l) Except as set forth in the Offering Memorandum, there is no legal
or governmental proceeding pending or, to the knowledge of the Company or
the Guarantor, threatened to which the Company, the Guarantor or any of the
Subsidiaries is a party or of which any of them or their respective
properties is subject which, if adversely determined, is reasonably likely
to cause a Material Adverse Effect. No material contract, agreement,
instrument or document of a character required to be described in the
Offering Memorandum is not so described.
(m) Except as disclosed in the Offering Memorandum, no holder of any
security of the Company has or will have any right to require registration
of any security of the Company by virtue of any transaction contemplated by
this Agreement.
(n) Except as otherwise set forth in the Offering Documents, the
Company, the Guarantor and each of the Subsidiaries has (i) good title to
all of the properties and assets described in the Offering Documents as
owned by it, free and clear of all liens (other than liens for taxes not
yet due and payable), charges, encumbrances or restrictions, except such as
are described in the Offering Documents or that are not reasonably likely
to have a Material Adverse Effect and (ii) all governmental licenses,
certificates permits, authorizations, approvals, franchises or other rights
necessary to engage in the business currently conducted by it, except as
such that are not reasonably likely to have a Material Adverse Effect. All
leases to which the Company, the Guarantor or any of the Subsidiaries is a
party are valid and binding against the Company, the Guarantor or such
Subsidiary and no default by the Company, the Guarantor or any of the
Subsidiaries has occurred and is continuing thereunder except such defaults
that are not reasonably likely to have a Material Adverse Effect.
(o) No labor dispute with the employees of the Company, the Guarantor
or any of the Subsidiaries exists or, to the knowledge of the Company or
the Guarantor, is imminent that is reasonably likely to have a Material
Adverse Effect.
(p) The Company, the Guarantor and each of the Subsidiaries maintain
reasonably adequate insurance for the conduct of their respective
businesses and the value of their respective properties or otherwise self-
insure in a manner consistent with industry practice or prudent business
practice.
(q) The financial statements of the Company and the consolidated
financial statements of the Guarantor, together with the related schedules
and notes, set forth in the Offering Documents (and any amendment or
supplement thereto), present fairly the financial condition, results of
operations and cash flows of the Company and the Guarantor and its
consolidated Subsidiaries at the respective dates and for the respective
periods indicated; such financial statements and related schedules and
notes have been prepared in accordance with generally accepted accounting
principles ("GAAP") consistently applied throughout such periods, except as
----
described in the Offering Documents and except that the unaudited interim
financial statements are subject to normal year-end adjustments; and the
selected financial data included in the Offering Documents or in any
supplement thereto or amendment thereof present fairly the information
shown therein and have been compiled on a basis consistent with that of the
audited financial statements included in the Offering Documents.
11
(r) Since the respective dates as of which information is given in the
Offering Documents, except as otherwise stated in the Offering Documents,
(i) there have been no transactions entered into by the Company, the
Guarantor or the Subsidiaries, other than those in the ordinary course of
business, which are material with respect to the Company, the Guarantor and
the Subsidiaries taken as a whole, (ii) there has not been any material
adverse change, or any development involving a prospective material adverse
change, in the capital stock or in the long-term debt of the Company, the
Guarantor and the Subsidiaries, (iii) there has been no dividend or
distribution of any kind declared, paid or made by the Company or the
Guarantor on any class of their capital stock, and (iv) there are no
liabilities or obligations of the Company, the Guarantor or the
Subsidiaries, direct or indirect, contingent or matured, which are material
to the Company, the Guarantor and the Subsidiaries taken as a whole, other
than those reflected in the Offering Documents.
(s) The Company, the Guarantor and the Subsidiaries possess the right
to use the service xxxx CELLULARONE(R) and neither the Company, the
Guarantor nor any of the Subsidiaries has received any notice of
infringement of or conflict with asserted rights of others with respect to
such service xxxx which, if the subject of an unfavorable decision, ruling
or finding, would result in any Material Adverse Effect.
(t) Prior to and after the issuance of the Series A Notes and the
Guarantee, (i) the present fair salable value of the assets of each the
Company, the Guarantor and the Subsidiaries, taken as a whole, exceeded and
will exceed the amount that will be required to be paid on or in respect of
the existing debts and other liabilities (including the maximum amount of
liability that may reasonably be expected to result from contingent
liabilities) of the Company, the Guarantor and the Subsidiaries as they
become absolute and matured, (ii) the assets of the Company, the Guarantor
and the Subsidiaries, taken as a whole, do not constitute and will not
constitute unreasonably small capital to carry out their business as
conducted or as proposed to be conducted, (iii) the Company and the
Guarantor do not intend to, or believe that they will, incur debts beyond
their ability to pay such debts as they mature and (iv) the Company and the
Guarantor do not intend to permit any of the Subsidiaries to, and does not
believe any of the Subsidiaries will, incur debts or other liabilities
beyond their respective ability to pay such debts and liabilities as they
mature.
(u) None of the Company, the Guarantor or any agent thereof (other
than an Initial Purchaser or any agent, employee or representative thereof)
acting on behalf of either of them has taken and none of them will take,
any action that might cause this Agreement or the issuance or sale of the
Series A Notes or the Guarantee to violate Regulation G (12 C.F.R. Part
207), Regulation T (12 C.F.R. Part 220), Regulation U (12 C.F.R. Part 221)
or Regulation X (12 C.F.R. Part 224) of the Board of Governors of the
Federal Reserve System, in each case as in effect now or as the same may
hereafter be in effect on the Closing Date.
(v) Ernst & Young LLP are independent auditors with respect to the
Company, the Guarantor and the Subsidiaries as required by the Securities
Act.
(w) Neither the Company nor the Guarantor is an "investment company"
or a company "controlled" by an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
12
(x) The Company, the Guarantor and all of their affiliates have
complied with all applicable provisions of Section 517.075 of the Florida
Statutes relating to doing business with the government of Cuba or with any
person or affiliate located in Cuba.
(y) Each certificate signed by any officer of the Company or the
Guarantor and delivered to the Initial Purchasers or counsel for the
Initial Purchasers shall be deemed to be a representation and warranty by
the Company or the Guarantor, as the case may be, to each Initial Purchaser
as to the matters covered thereby.
(z) When the Series A Notes are issued and delivered pursuant to this
Agreement, such Series A Notes will not be of the same class (within the
meaning of Rule 144A under the Securities Act) as securities of the Company
that are listed on a national securities exchange registered under Section
6 of the Exchange Act or that are quoted in a United States automated
inter-dealer quotation system.
(aa) Assuming (i) that the representations and warranties of the
Initial Purchasers in Section 7 hereof are true, (ii) that the
representations of the Accredited Institutions set forth in the
certificates of such Accredited Institutions in the form set forth in Annex
A to the Offering Memorandum are true, (iii) compliance by the Initial
Purchasers with their covenants set forth in Section 7 hereof and (iv) that
each of the Eligible Purchasers is a QIB or an Accredited Institution, the
purchase and resale of the Series A Notes pursuant hereto (including
pursuant to the Exempt Resales) is exempt from the registration
requirements of the Securities Act. No form of general solicitation or
general advertising was used by the Company or the Guarantor or any of
their representatives (other than the Initial Purchasers, as to whom the
Company and the Guarantor make no representation) in connection with the
offer and sale of the Series A Notes, including, but not limited to,
articles, notices or other communications published in any newspaper (other
than any press release issued in connection with the Offering issued in
accordance with Rule 135 of the Securities Act), magazine, or similar
medium or broadcast over television or radio, or any seminar or meeting
whose attendees have been invited by any general solicitation or general
advertising. No securities of the same class as the Series A Notes have
been issued and sold by the Company within the six-month period immediately
prior to the date hereof.
(ab) The execution and delivery of this Agreement, the other Operative
Documents and the sale of the Series A Notes to be purchased by the
Eligible Purchasers will not involve any prohibited transaction within the
meaning of Section 406 of ERISA or Section 4975 of the Internal Revenue
Code of 1986, as amended (the "Code"). The representation made in the
----
preceding sentence is made in reliance upon and subject to the accuracy of,
and compliance with, the representations and covenants made or deemed made
by the Eligible Purchasers as set forth in the Offering Documents under the
section entitled "Notice to Investors."
(ac) None of the Company, the Guarantor, the Subsidiaries or any of
their affiliates or any person acting on their behalf has engaged or will
engage in any directed selling efforts within the meaning of Regulations S
with respect to the Notes, and the Company, the Guarantor, the Subsidiaries
and their affiliates and all persons acting on their behalf have complied
with and will comply with the offering restrictions requirements of
Regulation S in connection with the offering of the Notes outside the
United States.
13
(ad) There is no "substantial U.S. market interest" as defined in rule
902(n) of Regulation S for the Notes or any security of the same class as
the Notes.
(ae) The sale of the Series A Notes in offshore transactions pursuant
to Regulation S is not part of a plan or scheme to evade the registration
provisions of the Securities Act.
7. REPRESENTATIONS AND WARRANTIES OF THE INITIAL PURCHASERS. Each Initial
Purchaser, severally and not jointly, represents and warrants as follows:
(a) It is a QIB or an Accredited Institution with such knowledge and
experience in financial and business matters as is necessary in order to
evaluate the merits and risks of an investment in the Series A Notes.
(b) It (i) is not acquiring the Series A Notes with a view to any
distribution thereof or with any present intention of offering or selling
any of the Series A Notes in a transaction that would violate the
Securities Act or the securities laws of any State of the United States or
any other applicable jurisdiction and (ii) will be reoffering and reselling
the Series A Notes only to QIBs in reliance on the exemption from the
registration requirements of the Securities Act provided by Rule 144A and
to a limited number of Accredited Institutions that execute and deliver a
letter containing certain representations and agreements in the form
attached as Annex A to the Offering Documents and pursuant to offers and
sales that occur outside the United States in compliance with Regulation S.
(c) It understands that the Company and the Guarantor, and, for
purposes of the opinions to be delivered to the Initial Purchasers pursuant
to Sections 9(e), (f), (g), (h) and (i) hereof, counsel to the Company and
counsel to the Initial Purchasers will rely upon the accuracy and truth of
the foregoing representations and the Initial Purchasers hereby consent to
such reliance.
(d) Each of the Initial Purchasers agrees that, in connection with the
Exempt Resales, each Initial Purchaser will solicit offers to buy the
Series A Notes only from, and will offer to sell the Series A Notes only
to, the Eligible Purchasers. Each of the Initial Purchasers further agrees
that it will offer to sell the Series A Notes only to, and will solicit
offers to buy the Series A Notes only from, persons who in purchasing such
Series A Notes will be deemed to have represented and agreed (1) if such
Eligible Purchaser is a QIB, that it is purchasing the Series A Notes for
its own account or an account with respect to which it exercises sole
investment discretion and that it or such accounts are QIBs, (2) that such
Series A Notes will not have been registered under the Securities Act and
may be resold, pledged or otherwise transferred, only (A) (I) inside the
United States to a person who the seller reasonably believes is a QIB
within the meaning of Rule 144A under the Securities Act in a transaction
meeting the requirements of Rule 144A, (II) in a transaction meeting the
requirements of Rule 144 under the Securities Act, (III) outside the United
States to a foreign person in a transaction meeting the requirements of
Rule 904 under the Securities Act or (IV) in accordance with another
exemption from the registration requirements of the Securities Act (and
based upon an opinion of counsel if the Company so requests), (B) to the
Company or the Guarantor or (C) pursuant to an effective registration
statement under the Securities Act, in each case, in accordance with any
applicable securities laws of any State of the United States or any other
applicable jurisdiction, and (3) that the holder will, and each subsequent
holder is required to, notify any purchaser from it of the Series A Note
14
evidenced thereby of the resale restrictions set forth in (2) above.
Accordingly, each of the Initial Purchasers agrees that neither it, its
affiliates nor any persons acting on its or their behalf has engaged or
will engage in any directed selling efforts within the meaning of Rule
901(b) of Regulation S with respect to the Notes, and it, its affiliates
and all persons acting on its or their behalf have complied and will comply
with the offering restrictions requirements of Regulation S.
(e) Each of the Initial Purchasers represents and agrees that the
Notes offered and sold in reliance on Regulation S have been and will be
offered and sold only in offshore transactions and that such securities
have been and will be represented upon issuance by a global security that
may not be exchanged for definitive securities until the expiration of the
restricted period (as defined in Regulation S) (except to the extent of any
beneficial owners thereof who acquired an interest therein pursuant to
another exemption from registration under the Securities Act and who will
take delivery of a beneficial ownership interest in a Rule 144A Global Note
(as defined in the Indenture), as contemplated by the Indenture) and only
upon certification of beneficial ownership of the securities by a non-U.S.
person or a U.S. person who purchased such securities in a transaction that
was exempt from the registration requirements of the Securities Act.
(f) Each of the Initial Purchasers agrees that, at or prior to
confirmation of a sale of Notes (other than a sale pursuant to Rule 144A,
to Accredited Institutions in accordance with Section 3 of this Agreement
or pursuant to paragraph (i) of this Section 7), it will have sent to each
distributor, dealer or person receiving a selling concession, fee or other
remuneration that purchases Notes from it during the Restricted Period a
confirmation or notice to substantially the following effect:
"The Securities covered hereby have not been registered under the
Securities Act and may not be offered and sold within the United
States or to, or for the account or benefit of, U.S. persons (i) as
part of their distribution at any time or (ii) otherwise until 40 days
after the later of the commencement of the offering and the closing
date, except in either case in accordance with Regulation S (or Rule
144A if available) under the Securities Act. Terms used above have
the meaning given to them by Regulation S."
(g) Each of the Initial Purchasers further agrees that it has not
entered and will not enter into any contractual arrangement with respect to
the distribution or delivery of the Notes, except with its affiliates or
with the prior written consent of the Company.
(h) Notwithstanding the foregoing, Notes in registered form may be
offered, sold and delivered by the Initial Purchasers in the United States
and to U.S. persons pursuant to Section 3 of this Agreement without
delivery of the written statement required by paragraph (f) of this Section
7.
(i) Each of the Initial Purchasers further represents and agrees that
(i) it has not offered or sold and will not offer or sell any Notes to
persons in the United Kingdom prior to the expiry of the period of six
months from the issue date of the Notes, except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their businesses or
otherwise in circumstances which have not resulted and will not result in
an offer to the public in the United Kingdom within the
15
meaning of the Public Offers of Securities Regulations 1995, (ii) it has
complied and will comply with all applicable provisions of the Financial
Services Xxx 0000 with respect to anything done by it in relation to the
Notes in, from or otherwise involving the United Kingdom, and (iii) it has
only issued or passed on and will only issue or pass on in the United
Kingdom any document received by it in connection with the issuance of the
Notes to a person who is of a kind described in Article 11(3) of the
Financial Services Xxx 0000 (Investment Advertisements) (Exemptions) Order
1996 or is a person to whom the document may otherwise lawfully be issued
or passed on.
(j) Each of the Initial Purchasers agrees that it will not offer, sell
or deliver any of the Notes in any jurisdiction outside the United States
except under circumstances that will result in compliance with the
applicable laws thereof, and that it will take at its own expense whatever
action is required to permit its purchase and resale of the Notes in such
jurisdictions. Each of the Initial Purchasers understands that no action
has been taken to permit a public offering in any jurisdiction outside the
United States where action would be required for such purpose.
(k) Each of the Initial Purchasers agrees not to cause any
advertisement of the Notes to be published in any newspaper or periodical
or posted in any public place and not to issue any circular relating to the
Notes, without the prior approval of the Company.
(l) The sale of the Series A Notes in offshore transactions pursuant
to Regulation S is not part of a plan or scheme to evade the registration
provisions of the Securities Act.
Terms used in this Section 7 that have meanings assigned to them in
Regulation S are used herein as so defined.
8. INDEMNIFICATION.
(a) The Company and the Guarantor, jointly and severally, agree to
indemnify and hold each of the Initial Purchasers and each person, if any, who
controls or is under common control with any of the Initial Purchasers within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act harmless from and against any and all losses, claims, damages, liabilities,
actions or judgments (including, without limiting the foregoing, the reasonable
legal and other expenses incurred in connection with any action, suit or
proceeding or any claim asserted) caused by any untrue statement or alleged
untrue statement of any material fact contained in the Offering Documents, or
any amendment or supplement thereto, or arise out of or are caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
provided, however, that the Company and the Guarantor will not be liable in any
such case to the extent that any such loss, claim, damage or liability arises
out of or is based upon an untrue statement or alleged untrue statement in or
omission or alleged omission (i) in reliance upon and in conformity with written
information furnished to the Company or the Guarantor by any Initial Purchaser
specifically for use therein or (ii) made in the Preliminary Offering
Memorandum, if a copy of the Offering Memorandum (as amended or supplemented, if
the Company or Guarantor shall furnish the amendment or supplement thereto) was
not sent or given by or on behalf of the Initial Purchasers to the person
asserting any such loss, claim or liability, if required by law so to have been
delivered, at or prior to the written confirmation of the sale of the Notes as
required by the Securities Act and the Offering Memorandum (as so amended or
supplemented) would have corrected in all material respects such untrue
statement or omission.
16
(b) In case any action or proceeding (including any governmental or
regulatory investigation or proceeding) shall be brought against any Initial
Purchaser or any person controlling or under common control with such Initial
Purchaser, based upon the Offering Documents or any amendment or supplement
thereto and with respect to which indemnity may be sought against the Company or
the Guarantor, such Initial Purchaser or any person controlling or under common
control with such Initial Purchaser shall promptly notify the Company or the
Guarantor in writing and the Company or the Guarantor shall assume the defense
thereof, including the employment of counsel reasonably satisfactory to such
Initial Purchaser and payment of all reasonable fees and expenses. Such Initial
Purchaser or any such controlling person shall have the right to employ separate
counsel in any such action or proceeding and participate in the defense thereof,
but the fees and expenses of such counsel shall be at such Initial Purchaser's
expense or at the expense of any such controlling person unless (i) the
employment of such counsel has been specifically authorized in writing by the
Company or the Guarantor, (ii) neither the Company nor the Guarantor has assumed
the defense and employed counsel reasonably satisfactory to such Initial
Purchaser within a reasonable time after notice of commencement of such action,
or (iii) the named parties to any such action or proceeding (including any
impleaded parties) include both an Initial Purchaser or such controlling person
and the Company or the Guarantor and such Initial Purchaser or such controlling
person shall have been advised in writing by such counsel (with a copy to the
Company or the Guarantor) that there may be one or more legal defenses available
to such Initial Purchaser or such controlling person which are different from or
additional to those available to the Company or the Guarantor (in which case the
Company and the Guarantor shall not have the right to assume the defense of such
action or proceeding on behalf of such Initial Purchaser or on behalf of such
controlling person, it being understood, however, that the Company and the
Guarantor shall not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances be liable for the reasonable fees
and expenses of more than one separate firm of attorneys (in addition to any
local counsel) for the Initial Purchasers and such controlling persons, which
firm shall be designated in writing by DLJ, and that all such fees and expenses
shall be reimbursed as they are incurred upon written request and presentation
of reasonably satisfactory invoices). The Company and the Guarantor shall not
be liable for any settlement of any such action effected without the written
consent of the Company or the Guarantor, which shall not be unreasonably
withheld, but if settled with the written consent of the Company or the
Guarantor or if there is a final judgment for the plaintiff, the Company and the
Guarantor agree to indemnify and hold harmless such Initial Purchaser and any
such controlling person from and against any loss or liability by reason of such
settlement or judgment. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is a party and
indemnity has been sought hereunder by such indemnified party, unless such
settlement includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such proceeding.
(c) Each Initial Purchaser agrees, severally but not jointly, to
indemnify and hold harmless the Company, the Guarantor and their respective
directors, officers, and any person controlling the Company or the Guarantor
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the indemnity from the Company or the
Guarantor to each Initial Purchaser, but only with reference to information
relating to such Initial Purchaser furnished in writing by or on behalf of such
Initial Purchaser expressly for use in the Offering Documents or any supplement
or amendment to any thereof. In case any action shall be brought against the
Company, the Guarantor or any of their directors, any such officers, or any such
controlling person based on the Offering Documents and in respect of which
indemnity may be sought against any or all of the Initial Purchasers, such
Initial Purchasers shall have the rights and duties given to the Company and the
Guarantor (except
17
that if the Company or the Guarantor as provided in Section 8(b) hereof shall
have assumed the defense thereof such Initial Purchasers shall not be required
to do so, but may employ separate counsel therein and participate in the defense
thereof but the fees and expenses of such counsel shall be at such Initial
Purchaser's expense), and the Company, the Guarantor and their directors, any
such officers, and any such controlling person shall have the rights and duties
given to the Initial Purchasers by Section 8(b) hereof.
(d) If the indemnification provided for in this Section 8 is
unavailable to an indemnified party in respect of any losses, claims, damages,
liabilities or judgments referred to herein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages, liabilities and judgments (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Guarantor on the
one hand and the Initial Purchasers on the other from the offering of the Notes,
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company and the Guarantor on the one hand and the Initial Purchasers on the
other hand in connection with the statements or omissions that resulted in such
losses, claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Guarantor on the one hand and the Initial Purchasers on the other hand shall be
deemed to be in the same proportions as the total proceeds from the offering
(net of underwriting discounts and commissions but before deducting expenses)
received by the Company and the Guarantor, and the total underwriting discounts
and commissions received by the Initial Purchasers, bear to the total proceeds
from the offering of the Notes, in each case as set forth in the table on the
cover page of the Offering Memorandum. The relative fault of the Company and
the Guarantor on the one hand and the Initial Purchasers on the other hand shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the Company and the Guarantor or by the
Initial Purchasers and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim.
The Company, the Guarantor and the Initial Purchasers agree that it
would not be just and equitable if contribution pursuant to this Section 8(d)
were determined by pro rata allocation (even if the Initial Purchasers were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of this Section
8(d), in no event shall any Initial Purchaser be required to contribute any
amount in excess of the amount by which the total fees received by such Initial
Purchaser with respect to the Notes purchased by such Initial Purchaser exceeds
the amount of any damages which such Initial Purchaser has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Initial Purchasers' obligations to contribute pursuant
to this Section 8(d) are several and not joint and are in proportion to the
respective underwriting obligations hereunder.
18
(e) The statements with respect to the Initial Purchasers and with
respect to the offering of the Notes under the caption "Plan of Distribution,"
in the last paragraph on page 4 relating to stabilization and in the last
paragraph on the cover page of the Offering Documents constitute the only
information heretofore furnished to the Company and the Guarantor in writing on
behalf of or by the Initial Purchasers expressly for use in the Offering
Documents or any amendment or supplement thereto.
(f) The obligations of the Company and the Guarantor under this
Section 8 shall be in addition to any liability that the Company and the
Guarantor may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any of the Initial Purchasers
within the meaning of the Securities Act; and the obligations of the Initial
Purchasers under this Section 8 shall be in addition to any liability that each
respective Initial Purchaser may otherwise have and shall extend, upon the same
terms and conditions, to each director and officer of the Company and the
Guarantor and to each person, if any, who controls the Company or the Guarantor
within the meaning of the Securities Act.
9. CONDITIONS OF THE INITIAL PURCHASERS' OBLIGATIONS. The several
obligations of the Initial Purchasers to purchase the Series A Notes under this
Agreement are subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company and the
Guarantor contained in this Agreement shall be true and correct on the date
hereof and the Closing Date, with the same force and effect as if made on
and as of the date hereof and the Closing Date, respectively. The Company
and the Guarantor shall have performed or complied with all of the
agreements herein contained and required to be performed or complied with
by the Company or the Guarantor on or prior to the Closing Date.
(b) (1) The Offering Memorandum shall have been printed and copies
distributed to the Initial Purchasers not later than 9:00 a.m., New York
City time, on January 30, 1997, or at such later date and time as the
Initial Purchasers may approve in writing;
(2) no injunction, restraining order or order of any nature by a
federal or state court of competent jurisdiction shall have been
issued as of the Closing Date which would prevent the issuance of the
Series A Notes; and
(3) at the Closing Date, no stop order preventing the use of the
Offering Documents, or any amendment or supplement thereto, or
suspending the qualification or exemption from qualification of any of
the Series A Notes for sale in any jurisdiction designated by the
Initial Purchasers pursuant to Section 5(f) hereof shall have been
issued and no proceedings for that purpose shall have been commenced
or shall be pending before or, to the knowledge of the Company or the
Guarantor, be contemplated.
(c) (1) Since the date hereof or since the dates as of which
information is given in the Offering Memorandum, there shall not have been
any event that had a Material Adverse Effect, or any development involving
a prospective change that would have a Material Adverse Effect, whether or
not arising in the ordinary course of business; (2) since the date of the
latest balance sheet included in the Offering Memorandum, there has not
been any change that would have a Material Adverse Effect, or any
development involving a prospective change that would have a Material
Adverse Effect, in the capital stock or in the long-term debt of the
Company, the
19
Guarantor or any of the Subsidiaries from that set forth in the Offering
Memorandum; (3) the Company, the Guarantor and the Subsidiaries shall have
no liability or obligation, direct or contingent, that is required to be
disclosed on a balance sheet in accordance with GAAP and that is not
disclosed on the latest balance sheet included in (or otherwise disclosed
in) the Offering Memorandum; and (4) the Company, the Guarantor and the
Subsidiaries shall have no material liability or obligation, direct or
contingent, other than those reflected in the Offering Memorandum.
(d) The Initial Purchasers shall have received certificates of the
Company and the Guarantor (satisfactory to the Initial Purchasers and
counsel to the Initial Purchasers), dated the Closing Date, executed on
behalf of each of the Company and the Guarantor by the President or any
Vice President and a principal financial or accounting officer of the
Company and the Guarantor, confirming, as of the Closing Date, all matters
set forth in Section 9(a), (b), and (c).
(e) The Initial Purchasers shall have received on the Closing Date an
opinion (substantially in the following form), dated the Closing Date, of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for the Company and the
Guarantor, to the effect that:
(i) Each of the Company, the Guarantor and their subsidiaries
which are listed on Exhibit A to such opinion and incorporated in Delaware
(the "Delaware Subsidiaries") has been duly incorporated and is validly
---------------------
existing as a corporation and in good standing under the laws of the State
of Delaware. The Company and the Guarantor have the corporate power and
authority to execute and deliver the Notes and the Guarantee, respectively,
and to enter into and perform their respective obligations under the
Operative Documents.
(ii) The execution and delivery by the Company of the Notes, the
execution by the Guarantor of the Guarantee and the execution, delivery and
performance by the Company and the Guarantor of their respective
obligations under each of the Operative Documents do not (a) (i) conflict
with the certificate of incorporation or by-laws or other governing
documents of the Company, the Guarantor and each of the Delaware
Subsidiaries, or (ii) constitute a violation of or default under the terms
of any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company, the Guarantor or any of the
Subsidiaries which is listed on Exhibit B to such opinion is a party or
bound (except that such counsel need not express an opinion as to any
covenant, restriction or provision with respect to financial covenants,
ratios or tests or any aspect of the financial condition or results of
operations of the Company, the Guarantor or any of the Subsidiaries and
such counsel may assume that all such agreements or instruments are
governed by the law of New York or Delaware), or (iii) result in any
violation of any provision of any Applicable Laws (as hereinafter defined),
or (iv) result in a violation of any judgment, order or decree of any
court, regulatory body, administrative agency or governmental body or
arbitrator (collectively, "Orders") of the United States, the State of New
------
York and the State of Delaware having jurisdiction over the Company, the
Guarantor or any of the Subsidiaries or any of their properties or assets.
Such counsel's opinion expressed in clause (iv) of this paragraph (e)(ii)
may be based on its review of those Orders specifically identified to such
counsel by the Company and the Guarantor as being Orders to which they are
subject. In addition, such counsel need express no opinion with respect to
any federal or state securities or Blue Sky laws or the matters on which
opinions are rendered in paragraph (xi) below. "Applicable Laws" shall
mean those laws, rules and regulations of the State of New York, the
general corporate law of the State of Delaware and of the United States of
America which, in
20
such counsel's experience, are normally applicable to transactions of the
type contemplated by this Agreement and the other Operative Documents, but
without having made any special investigation concerning any other laws,
rules or regulations.
(iii) This Agreement has been duly authorized, executed and
delivered by the Company and the Guarantor.
(iv) The Indenture has been duly authorized, executed and
delivered by the Company and the Guarantor, and, assuming due
authorization, execution and delivery by the Trustee, constitutes a valid
and binding obligation of the Company and the Guarantor enforceable against
the Company and the Guarantor in accordance with its terms, except as such
enforceability may be limited by (A) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally, (B) general principles of equity
(regardless of whether enforceability is considered in a proceeding at law
or in equity), (C) the waiver contained in Section 4.04 of the Indenture
may be deemed unenforceable and (D) the enforceability, under certain
circumstances, of provisions imposing a payment obligation if the Company
and the Guarantor are unable to comply timely with their respective
registration obligations under the Registration Rights Agreement may be
limited by applicable law.
(v) The Company has duly authorized the Series A Notes and, when
issued and authenticated in accordance with the terms of the Indenture and
delivered to and paid for by the Initial Purchasers in accordance with the
terms hereof, the Series A Notes will conform to the description thereof in
the Offering Memorandum, and will be the valid and binding obligations of
the Company, enforceable against the Company in accordance with their terms
and entitled to the benefits of the Indenture, except as such
enforceability may be limited by (A) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally, (B) general principles of equity
(regardless of whether enforceability is considered in a proceeding at law
or in equity), (C) the waiver contained in Section 4.04 of the Indenture
may be deemed unenforceable and (D) the enforceability, under certain
circumstances, of provisions imposing a payment obligation if the Company
and the Guarantor are unable to comply timely with their respective
registration obligations under the Registration Rights Agreement may be
limited by applicable law.
(vi) The Guarantor has duly authorized the Guarantee to be
endorsed on the Series A Notes and, when executed and delivered in
accordance with the terms of the Indenture and when the Series A Notes have
been issued and authenticated in accordance with the terms of the Indenture
and delivered to and paid for by the Initial Purchasers in accordance with
the terms hereof, the Guarantee will conform to the description thereof in
the Offering Memorandum, and will be the valid and binding obligation of
the Guarantor, enforceable against the Guarantor in accordance with its
terms, except as such enforceability may be limited by (A) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditor's rights generally, (B) general
principles of equity (regardless of whether enforceability is considered in
a proceeding at law or in equity), (C) the waiver contained in Section 4.04
of the Indenture may be deemed unenforceable and (D) the enforceability,
under certain circumstances, of provisions imposing a payment obligation if
the Company and the Guarantor are unable to comply timely with their
respective registration obligations under the Registration Rights Agreement
may be limited by applicable law.
21
(vii) The Registration Rights Agreement has been duly authorized by
the Company and the Guarantor and constitutes a valid and binding agreement
of the Company and the Guarantor enforceable against the Company and the
Guarantor in accordance with its terms, except as such enforceability may
be limited by (A) bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to creditors' rights
generally, (B) general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law), (C) the
enforceability of indemnification and contribution provisions may be
limited by federal and state securities laws and the policies underlying
such laws, (D) the waiver contained in Section 4.04 of the Indenture may be
deemed unenforceable and (E) the enforceability, under certain
circumstances, of provisions imposing a payment obligation if the Company
and the Guarantor are unable to comply timely with their respective
registration obligations under the Registration Rights Agreement may be
limited by applicable law.
(viii) The Company and the Guarantor are not required to be
registered, as an "investment company" as such term is defined under the
Investment Company Act of 1940, as amended.
(ix) The statements made in the Offering Memorandum under the
headings "Description of the Notes" and "Certain Relationships and Related
Transactions," insofar as they purport to constitute statements of law or
legal conclusions (and assuming that the documents referred to therein are
governed by the law of New York or Delaware) have been reviewed by such
counsel and fairly present the information disclosed therein in all
material respects.
(x) No Governmental Approval (as hereinafter defined), which has
not been obtained or taken and is not in full force and effect, is required
to authorize or is required in connection with the execution, delivery or
performance of any of the Operative Documents by the Company and the
Guarantor, except such as have been obtained and made under the Securities
Act and such as may be required under state Blue Sky or securities laws.
"Governmental Approval" means any consent, approval, license, registration
with, any governmental authority pursuant to Applicable Laws.
(xi) Assuming, without independent investigation, (1) the
accuracy of the representations and warranties of the Company, the
Guarantor and the Initial Purchasers set forth herein, (2) the due
performance by the Company and the Guarantor of the agreements set forth
herein and the due performance by the Initial Purchasers of the agreements
set forth herein, (3) compliance by the Initial Purchasers with the
offering and transfer procedures and restrictions described elsewhere in
this Agreement and in the Offering Memorandum, (4) the accuracy of the
representations made in accordance with this Agreement and the Offering
Memorandum of the purchasers to whom the Initial Purchasers initially
resell Notes and (5) that the purchasers to whom the Initial Purchasers
initially resell Notes receive a copy of the Offering Memorandum, neither
the registration of the Notes under the Securities Act, nor the
qualification of the Indenture under the Trust Indenture Act of 1939, as
amended, with respect thereto, is required for the offer, sale and initial
resale of the Notes in the manner contemplated by this Agreement and the
Offering Memorandum, it being understood that such counsel expresses no
opinion as to any subsequent resale of any Note.
In addition, such counsel shall also state that such counsel has
participated in conferences with directors, officers and other
representatives of the Company and the Guarantor,
22
representatives of the independent public accountants for the Company and
the Guarantor, representatives of the Initial Purchasers and
representatives of their counsel, at which conferences the contents of the
Offering Memorandum and related matters were discussed, and, although such
counsel is not passing upon and does not assume responsibility for, the
accuracy, completeness or fairness of the statements contained in the
Offering Memorandum and have made no independent check or verification
thereof (except as stated in paragraph (ix) hereof), on the basis of the
foregoing, no facts have come to such counsel's attention which have led
such counsel to believe that on the date of this Agreement and on the
Closing Date the Offering Memorandum contained or contains an untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (it being
understood that such counsel need express no opinion or belief with respect
to the financial statements and related notes and other financial,
statistical and accounting data included in or excluded from the Offering
Memorandum).
Such opinion may be limited to the General Corporation Law of the
State of Delaware and the laws of the State of New York and the federal
laws of the United States. In rendering such opinion, such counsel may
rely as to matters involving the application of laws of any jurisdiction
other than the State of New York, the State of Delaware or the United
States, to the extent they deem proper and specified in such opinion, upon
the opinion of other counsel who are satisfactory to counsel for the
Initial Purchasers.
(f) The Initial Purchasers shall have received on the Closing Date an
opinion (substantially in the following form), dated the Closing Date, of
special Puerto Rico counsel for the Company and the Guarantor, who shall be
reasonably acceptable to the Initial Purchasers, to the effect that:
(i) The issuance and sale of the Notes by the Company, the
issuance of the Guarantee by the Guarantor and the execution, delivery and
performance by the Company and the Guarantor of the Operative Documents
does not result in any violation of any statute, rule or regulation of the
Commonwealth of Puerto Rico or any order of any court or governmental
agency or body of the Commonwealth of Puerto Rico having jurisdiction over
the Company, the Guarantor or any of the Subsidiaries or any of their
properties or assets. Such counsel's opinion expressed in this paragraph
may be based on its review of those statutes, rules and regulations which,
in its experience, are normally applicable to transactions of the type
provided for in this Agreement, but without having made any special
investigation concerning any other statutes, rules and regulations, and
those orders of the type described above specifically identified to such
counsel by the Company and the Guarantor as being orders to which they are
subject. In addition, such counsel need express no opinion with respect to
any state securities or Blue Sky laws;
(ii) All payments made under the Notes to persons who are not
residents of the Commonwealth of Puerto Rico and that are not engaged in
business in the Commonwealth of Puerto Rico, apart from holding the Notes,
will not be subject to a required withholding of tax under the laws of the
Commonwealth of Puerto Rico; and
(iii) The issuance and sale of the Notes by the Company, the
issuance of the Guarantee by the Guarantor and the execution, delivery and
performance by the Company and the Guarantor of this Agreement and the
Indenture do not constitute a breach of or default under
23
the terms of any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument known to him to which the Company, the
Guarantor or any of the Subsidiaries is a party or by which the Company,
the Guarantor or any of the Subsidiaries is bound or to which any of the
property or assets of the Company, the Guarantor or any of the Subsidiaries
is subject or any statute, law, ordinance, rule, regulation, judgment,
order or decree of any court or governmental authority of the Commonwealth
of Puerto Rico having jurisdiction over the Company, the Guarantor or any
of the Subsidiaries or any of their respective assets known to him to be
applicable to the Company, the Guarantor or any of the Subsidiaries.
(g) The Initial Purchasers shall have received on the Closing Date an
opinion (substantially in the following form), dated the Closing Date, from
Xxxxxxxxx Xxxxx, Counsel for the Company, to the effect that:
To the best of his knowledge, no notice has been issued and no
investigation or review is pending or threatened by any governmental
authority with respect to any alleged violation by the Company, the
Guarantor or any of the Subsidiaries of any statute, law, ordinance, rule,
regulation, judgment, order or decree of any court or governmental
authority of the Commonwealth of Puerto Rico having jurisdiction over the
Company, the Guarantor or any of the Subsidiaries or any of their
respective assets which would (individually or in the aggregate) be
reasonably expected to have a Material Adverse Effect.
(h) The Initial Purchasers shall have received on the Closing Date an
opinion (substantially in the following form), dated the Closing Date, from
Xxxxxxx X. Xxxxxxx, Senior Vice President-General Counsel and Secretary of
the Company and the Guarantor, to the effect that:
(i) The Company and the Guarantor have the requisite power and
authority to own and to operate their businesses as described in the
Offering Memorandum. The Company, the Guarantor and each of the
Subsidiaries is duly qualified to do business and is in good standing under
the laws of each jurisdiction where it is required to be so qualified,
except where the failure to be so qualified would not individually or in
the aggregate have a Material Adverse Effect.
(ii) To the best of his knowledge, all of or a majority of the
outstanding capital stock or other equity interests of each of the
Subsidiaries is owned, directly or indirectly, by the Company or the
Guarantor, free and clear of any perfected security interest, claim, lien
or encumbrance, other than any such security interests which may be
described in the Offering Memorandum; to the best of his knowledge, there
are no outstanding rights, warrants or options to acquire, or instruments
convertible into or exchangeable for, any shares of capital stock or other
equity interest in any Subsidiary, except as may be described in the
Offering Memorandum.
(iii) To the best of his knowledge, except for matters that are
disclosed in the Offering Documents, there are no actions, suits,
investigations or other proceedings pending against the Company or the
Guarantor or of which any property of the Company or the Guarantor is the
subject (a) (i) in which an injunction or order has been entered preventing
the issuance or sale of the Notes or the Guarantee or the execution,
delivery or performance of this Agreement or the Indenture, or (ii) which
seeks to restrain, enjoin or prevent the issuance of the Notes or the
Guarantee or the execution, delivery or performance of this Agreement or
the Indenture, or
24
(iii) which questions the legality or validity of any transaction
contemplated by this Agreement or which seeks to recover damages or obtain
other relief in connection with any such transaction, (b) which would be
reasonably expected to have a Material Adverse Effect, or (c) which is
required to be described in the Offering Documents and is not so described.
(iv) (a) None of the Company, the Guarantor or any of the
Subsidiaries (i) is in violation of its respective certificate of
incorporation or by-laws, or (ii) to the best of his knowledge, is in
default (and no event has occurred which with notice or lapse of time, or
both, would constitute such a default) under any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument known to him to
which the Company, the Guarantor or any of the Subsidiaries is a party or
to which any of their respective property or assets is subject and, (b) to
the best of his knowledge, no notice has been issued and no investigation
or review is pending or threatened by any governmental authority with
respect to any alleged violation by the Company, the Guarantor or any of
the Subsidiaries of any statute, law, ordinance, rule, regulation,
judgment, order or decree of any court or governmental authority of the
United States or the State of New York having jurisdiction over the
Company, the Guarantor or any of the Subsidiaries or any of their
respective assets which, with respect to clauses (a) and (b), would
(individually or in the aggregate) be reasonably expected to have a
Material Adverse Effect.
(v) All of the outstanding capital stock of each of the
Subsidiaries has been validly authorized and issued and is fully paid and
non-assessable.
In rendering such opinion, Xxxxxxx X. Xxxxxxx may rely as to factual
matters upon certificates or written statements from officers or other
appropriate representatives of the Company, the Guarantor and the
Subsidiaries or upon certificates of public officials and need not express
any opinion with regard to the laws of any jurisdiction other than the
federal law of the United States, the General Corporation Law of the State
of Delaware and the law of the State of New York.
(i) The Initial Purchasers shall have received on the Closing Date an
opinion, dated the Closing Date, of Xxxxxx & Xxxxxxx, counsel for the
Initial Purchasers, in form and substance satisfactory to the Initial
Purchasers.
(j) The Initial Purchasers shall have received letters from Ernst &
Young LLP, independent public accountants, on the date hereof as well as on
the Closing Date, substantially in the form previously approved by the
Initial Purchasers, with respect to the financial statements and certain
financial information contained in Offering Memorandum.
(k) Xxxxxx & Xxxxxxx shall have been furnished with such documents and
opinions, in addition to those set forth above, as they may reasonably
require for the purpose of enabling them to review or pass upon the matters
referred to in this Section 9 and in order to evidence the accuracy,
completeness or satisfaction in all material respects of any of the
representations, warranties or conditions herein contained.
(l) The Company and the Guarantor shall have in all material respects
performed or complied with any of the agreements herein contained and
required to be performed or complied with by the Company and the Guarantor
on or prior to the Closing Date.
25
(m) The Company, the Guarantor and the Trustee shall have entered into
the Operative Documents to which they are a party and the Initial
Purchasers shall have received counterparts, conformed as executed,
thereof.
(n) On the Closing Date no condition exists that would constitute a
default (or an event that with notice or the lapse of time, or both, would
constitute a default) under the Indenture.
(o) At or prior to the Closing Date, all FCC approvals required in
connection with the Restructuring (as defined in the Offering Memorandum)
shall have been obtained and the Company and the Guarantor shall have
delivered to the Initial Purchasers evidence satisfactory to the Initial
Purchasers that such FCC approvals have been obtained.
10. DEFAULT BY AN INITIAL PURCHASER. If one or more of the Initial
Purchasers shall fail or refuse to purchase and pay for any of the Notes which
it or they have agreed to purchase hereunder and the aggregate amount of Notes
which such defaulting Initial Purchaser or Initial Purchasers, as the case may
be, failed or refused to purchase is not more than one-tenth of the total amount
of Notes to be purchased and such failure to purchase shall constitute a default
in the performance of its or their obligations under this Agreement, the
remaining Initial Purchasers shall be obligated severally to take up and pay for
the Notes which the defaulting Initial Purchaser or Initial Purchasers have
agreed but failed to purchase, in the proportion which the amount of Notes set
forth opposite such Initial Purchaser's name in Schedule I hereto bears to the
total amount of Notes which all non-defaulting Initial Purchasers have agreed to
purchase, or in such other proportion as the non-defaulting Initial Purchasers
shall specify; provided, however, that in the event that the aggregate principal
-------- -------
amount of Notes which the defaulting Initial Purchaser or Initial Purchasers
have agreed but failed to purchase shall exceed 10% of the aggregate principal
amount of Notes set forth in Schedule I hereto, the remaining Initial Purchasers
shall have the right to purchase all, but shall not be under any obligation to
purchase any, of the Notes, and if such non-defaulting Initial Purchaser does
not purchase all the Notes, this Agreement will terminate without liability to
any non-defaulting Initial Purchaser, the Company or the Guarantor. In the
event of a default by any Initial Purchaser as set forth in this Section 10, the
Closing Date shall be postponed for such period, not exceeding seven days, as
the remaining Initial Purchasers shall determine in order that the required
changes in the Offering Memorandum or in any other documents or arrangements may
be effected. Nothing contained in this Agreement shall relieve any defaulting
Initial Purchaser of its liability, if any, to the Company, the Guarantor or any
non-defaulting Initial Purchaser for damages occasioned by its default
hereunder.
11. EFFECTIVE DATE OF AGREEMENT AND TERMINATION. This Agreement shall
become effective at the time that the Company, the Guarantor and the Initial
Purchasers execute this Agreement.
(a) DLJ, on behalf of the Initial Purchasers, may terminate this Agreement
at any time prior to the Closing Date by notice to the Company if any of the
following has occurred:
(i) since the respective dates as of which information is given in
the Offering Memorandum and except as disclosed or contemplated therein,
any adverse change or development involving a prospective adverse change
which would cause a Material Adverse Effect, whether or not arising in the
ordinary course of business, which would, in DLJ's sole judgment make it
impracticable or inadvisable to market the Series A Notes;
26
(ii) any outbreak or escalation of hostilities or other national or
international calamity or crisis or material adverse change in the
financial markets of the United States, or any other substantial national
or international calamity or emergency, if the effect of such outbreak,
escalation, calamity, crisis, change or emergency would, in DLJ's sole
judgment, make it impracticable or inadvisable to market the Series A Notes
or to enforce contracts for the sale of securities;
(iii) any suspension or limitation of trading in securities on the
New York Stock Exchange, the American Stock Exchange or the Nasdaq National
Market or general limitation on prices for securities on any such exchange
or the Nasdaq National Market if the effect of such suspension or
limitation would, in DLJ's sole judgment, make it impracticable or
inadvisable to market the Series A Notes;
(iv) the enactment, publication, decree or other promulgation of any
federal or state statute, regulation, rule or order of any court or other
governmental authority which in DLJ's sole judgment causes or will cause a
Material Adverse Effect;
(v) the declaration of a general banking moratorium by either federal
or New York State authorities;
(vi) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs which in
DLJ's sole judgment has a material adverse effect on the financial markets
in the United States and makes it impracticable or inadvisable to sell the
Series A Notes;
(vii) any of the Company's or the Guarantor's securities shall have
been downgraded or placed on any "watch list" for possible downgrading by
any nationally recognized statistical rating organization, provided that in
the case of such "watch list" placement, termination shall be permitted
only if such placement would, in the judgment of DLJ, make it impracticable
or inadvisable to market the Series A Notes or to enforce contracts for the
sale of the Series A Notes or materially impair the investment quality of
the Series A Notes;
(b) The respective indemnities and contribution provisions and the other
agreements, representations and warranties of the Company and the Guarantor,
their respective officers and directors and of the Initial Purchasers set forth
in or made pursuant to this Agreement shall remain operative and in full force
and effect, and will survive delivery of and payment for the Series A Notes,
regardless of (i) any investigation, or statement as to the results thereof,
made by or on behalf of the Initial Purchasers or any person controlling any of
the Initial Purchasers or by or on behalf of the Company or the Guarantor, their
respective officers or directors or any person controlling the Company or the
Guarantor, (ii) acceptance of the Series A Notes and payment for them hereunder
and (iii) termination of this Agreement; and
(c) If this Agreement shall be terminated by the Initial Purchasers
pursuant to clause (i) of Section 11(a) or because of the failure or refusal on
the part of the Company or the Guarantor to comply with the terms or to fulfill
any of the conditions of this Agreement, the Company and the Guarantor agree to
reimburse the Initial Purchasers for all out-of-pocket expenses (including the
fees and disbursements of counsel) reasonably incurred by the Initial
Purchasers. Notwithstanding any termination of this
27
Agreement, the Company and the Guarantor shall be liable for all expenses which
they have agreed to pay pursuant to Section 5(i) hereof.
12. NOTICES. Notices given pursuant to any provision of this Agreement
shall be addressed as follows: (i) if to the Company or the Guarantor, to CCPR
Services, Inc., 000 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Chief Financial Officer and (ii) if to the Initial Purchasers, c/x
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation, 000 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, and Attention: Syndicate Department, and in each case, with a
copy to Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Xxxxxx X. Xxxxxxx, Esq. and Xxxxxx & Xxxxxxx, 000
Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx X.
Xxxxxxxx, Esq., or in any case to such other address as the person to be
notified may have requested in writing.
13. SUCCESSORS. Except as otherwise provided, this Agreement has been and
is made solely for the benefit of and shall be binding upon the Company, the
Guarantor, the Initial Purchasers, any indemnified person referred to herein and
their respective successors and assigns, all as and to the extent provided in
this Agreement, and no other person shall acquire or have any right under or by
virtue of this Agreement. The term "successors and assigns" shall not include a
purchaser of any of the Series A Notes from the Initial Purchasers merely
because of such purchase.
14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED,
INTERPRETED AND THE RIGHTS OF THE PARTIES DETERMINED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK AS APPLIED TO CONTRACTS MADE AND
PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS CHOICE
OF LAW PROVISIONS.
15. JURISDICTION. Each party to this Agreement hereby irrevocably
consents to the personal jurisdiction of the courts of the State of New York
located in the borough of Manhattan and of the United States of America sitting
in the Southern District of New York, in any action to enforce, interpret or
construe any provision of this Agreement, and also hereby irrevocably waives any
defense of improper venue or forum non conveniens to any such action brought in
either of those courts. Each party further irrevocably agrees that any action
to enforce, interpret or construe any provision of this Agreement will be
brought only in either of those courts and not in any other court.
16. COUNTERPARTS. This Agreement may be signed in various counterparts
which together shall constitute one and the same instrument.
[Signature Page Follows]
28
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the Guarantor and the Initial Purchasers.
Very truly yours,
CCPR SERVICES, INC.
By: ______________________________
Name: Title:
CELLULAR COMMUNICATIONS OF
PUERTO RICO, INC.
By: ______________________________
Name: Title:
Accepted and Agreed to:
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
SALOMON BROTHERS INC
XXXXXXXXXXX XXXXXXX SECURITIES, INC.
By: Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation
By: ________________________________
Name:
Title:
SCHEDULE I
Amount of
Series A Notes
Initial Purchasers to be Purchased
------------------ ---------------
Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation........................... $100,000,000
Salomon Brothers Inc.............................. 80,000,000
Xxxxxxxxxxx Xxxxxxx Securities, Inc............... 20,000,000
------------
Total........................................... $200,000,000
============
30
EXHIBIT A
Registration Rights Agreement
31
