EXHIBIT 1.2
$125,000,000
HORIZON PCS ESCROW COMPANY
HORIZON PCS, INC.
11 3/8% SENIOR NOTES DUE 2012
PURCHASE AGREEMENT
July 8, 2004
CREDIT SUISSE FIRST BOSTON LLC
XXXXXX BROTHERS INC.,
c/o Credit Suisse First Boston LLC,
Xxxxxx Xxxxxxx Xxxxxx,
Xxx Xxxx, X.X. 10010-3629
Dear Ladies and Gentlemen:
1. Introductory. Horizon PCS Escrow Company, a Delaware corporation
(the "ESCROW COMPANY"), proposes, subject to the terms and conditions stated
herein, to issue and sell to Credit Suisse First Boston LLC ("CSFB") and Xxxxxx
Brothers Inc. (the "PURCHASERS") U.S.$125,000,000 principal amount of its 11
-3/8% Senior Notes due 2012 (the "OFFERED SECURITIES") to be issued under an
indenture (the "INDENTURE"), dated as of the Closing Date (as defined herein),
among the Escrow Company, the Company (as defined below), the Guarantors (as
defined below) and U.S. Bank National Association, as Trustee (the "TRUSTEE"),
on a private placement basis pursuant to an exemption under Section 4(2) of the
U.S. Securities Act of 1933, as amended (the "SECURITIES ACT").
The Company and its subsidiaries previously filed voluntary petitions for
relief (Case Nos. 03-62424, 03-62425 and 03-62426) with the United States
Bankruptcy Court for the Southern District of Ohio (the "BANKRUPTCY COURT"). On
June 27, 2004, the Company and its subsidiaries filed a plan of reorganization
pursuant to Chapter 11 of the U.S. Bankruptcy Code. The issuance and sale of the
Offered Securities pursuant to this Agreement is part of a series of
transactions designed to reorganize the ownership and capital structure of
Horizon PCS, Inc., a Delaware corporation (the "COMPANY" and, together with the
Escrow Company, the "NOTE ISSUERS"). Such transactions are referred to herein as
the "REORGANIZATION." As part of the consummation of the Reorganization, the
Escrow Company will merge with and into Horizon PCS Escrow Holding Company, a
Delaware corporation (the "HOLDING COMPANY"), which will in turn, merge with and
into the Company, with the Company being the surviving entity (the "MERGERS").
Upon consummation of the Reorganization and the Mergers, the Company will
succeed to the obligations of the Escrow Company hereunder and under the
Indenture and the Offered Securities and the Company's obligations under the
Registration Rights Agreement (as defined herein) will become operative. In
addition, upon consummation of the Mergers, the Offered
Securities will become fully and unconditionally guaranteed (the "GUARANTEES")
as to payment of principal and interest and premium and liquidated damages, if
any, on an unsecured senior basis, jointly and severally, by all of the
Company's subsidiaries (after giving effect to the Reorganization) listed on
Schedule A hereto (collectively, the "GUARANTORS" and, together with the Note
Issuers, the "ISSUERS").
At the Closing Date, the Escrow Company will deposit the net proceeds from
the offering of the Offered Securities, and the Company will deposit such
additional amounts equal to accrued and unpaid interest on the Offered
Securities to but not including the 120th day after the issuance of the Offered
Securities (expected to be November 16, 2004), in an escrow account (the "ESCROW
ACCOUNT") pursuant to an Escrow Agreement to be dated the Closing Date (the
"ESCROW AGREEMENT") among the Escrow Company, the Company and U.S. Bank National
Association, as Escrow Agent (the "ESCROW AGENT"). The funds in the Escrow
Account will be used on or before November 16, 2004 (the "MERGER DATE") to
consummate the Reorganization on the terms described in the Escrow Agreement or,
in the event of a Special Mandatory Redemption (as defined in the Offering
Document), released to finance the purchase price in connection therewith.
The holders of the Offered Securities will be entitled to the benefits of
a Registration Rights Agreement dated as of the Closing Date among the Issuers
and the Purchasers (the "REGISTRATION RIGHTS AGREEMENT"), pursuant to which the
Company and the Guarantors agree to file a registration statement with the
Securities Exchange Commission (the "COMMISSION") registering the resale of the
Offered Securities under the Securities Act.
This Agreement, the Offered Securities, the Guarantees, the Indenture, the
Registration Rights Agreement and the Escrow Agreement are hereinafter referred
to collectively as the Transaction Documents.
The Issuers hereby agree with the several Purchasers as follows:
2. Representations and Warranties of the Issuers. The Issuers, jointly
and severally, represent and warrant to, and agree with, the several Purchasers
that:
(a) A preliminary offering circular and an offering circular
relating to the Offered Securities to be offered by the Purchasers have
been prepared by the Issuers. Such preliminary offering circular (the
"PRELIMINARY OFFERING CIRCULAR") and offering circular (the "OFFERING
CIRCULAR"), as supplemented as of the date of this Agreement, are
hereinafter collectively referred to as the "OFFERING DOCUMENT." On the
date of this Agreement, the Offering Document does not include any untrue
statement of a material fact or omit to state any material fact or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The preceding
sentence does not apply to statements in or omissions from the Offering
Document based upon written information furnished to the Issuers by any
Purchaser through CSFB specifically for use therein, it being understood
and agreed that the only such information is that described as such in
Section 7(b) hereof.
2
(b) The Escrow Company (i) has been duly incorporated and is an
existing corporation in good standing under the laws of the State of
Delaware and (ii) as of the date hereof does not have, and as of the
Closing Date will not have, any operations, subsidiaries, assets (other
than nominal amounts representing the sale of equity), indebtedness,
liabilities or obligations, other than the Offered Securities and any
obligations pursuant to this Agreement, the Merger Agreements and the
other Transaction Documents.
(c) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware, with
the corporate or such similar power and authority to own its properties
and conduct its business as described in the Offering Document; and the
Company is duly qualified to do business as a foreign corporation in good
standing in all other jurisdictions in which its ownership or lease of
property or the conduct of its business requires such qualification,
except where the failure to be so qualified would not have a Material
Adverse Effect (as defined below);.
(d) Each subsidiary of the Company has been duly incorporated or
organized, as the case may be, and is an existing corporation or limited
liability company in good standing under the laws of the jurisdiction of
its incorporation or organization, as the case may be, with the corporate
or such other similar power and authority to own its properties and
conduct its business as described in the Offering Document; and each
subsidiary of the Company is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions in which its
ownership or lease of property or the conduct of its business requires
such qualification, except where the failure to be so qualified would not
have a Material Adverse Effect; all of the issued and outstanding capital
stock, or capital units, as the case may be, of each subsidiary of the
Company has been duly authorized and validly issued and is fully paid and
nonassessable; and, except as disclosed in the Offering Document, the
capital stock, or capital units, as the case may be, of each subsidiary
owned by the Company, directly or through subsidiaries, is owned, and
after giving effect to the Reorganization, will be owned, free from liens,
encumbrances and defects.
(e) Upon consummation of the Reorganization, the Company will have
no subsidiaries other than the entities listed on Schedule A attached
hereto.
(f) Upon consummation of the Reorganization, except as disclosed
in the Offering Document, there will not be any outstanding subscriptions,
rights, warrants, calls, commitments of sale or options to acquire, or
instruments convertible into or exchangeable for, any capital stock or
other equity interest of Escrow Company, the Company or any of the
Company's subsidiaries.
(g) The Indenture has been duly authorized by each of the Issuers;
the Offered Securities have been duly authorized by each of the Note
Issuers; and when the Offered Securities are delivered and paid for
pursuant to this Agreement on the Closing Date and the Indenture will have
been duly executed and delivered, such Offered Securities will have been
duly executed, authenticated, issued and delivered and will conform in all
material respects to the description thereof contained in the Offering
Document and on
3
the Closing Date, the Indenture and such Offered Securities will
constitute the valid and legally binding obligations of each of the Note
Issuers, enforceable in accordance with their terms, subject to (i)
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights, (ii) to general equity principles and (iii) public
policy considerations.
(h) On the Closing Date, the Indenture will conform in all
material respects to the requirements of the Trust Indenture Act of 1939,
as amended (the "TIA" or "TRUST INDENTURE ACT"), and the rules and
regulations of the Commission applicable to an indenture which is
qualified thereunder.
(i) Except as disclosed in the Offering Document, there are no
contracts, agreements or understandings between the Issuers (including
after giving effect to the Reorganization) and any person that would give
rise to a valid claim against the Issuers or any Purchaser for a brokerage
commission, finder's fee or other like payment.
(j) Except as disclosed in the Offering Document and except as may
be required under the Securities Act, state securities and blue sky laws
in connection with the transactions contemplated by the Registration
Rights Agreement, no consent, approval, authorization, or order of, or
filing with, any governmental agency or body or any court is required for
(including after giving effect to the Reorganization) (i) the consummation
of the transactions contemplated by the Transaction Documents and (ii) the
consummation by the Escrow Company or the Company of the transactions
described in the Offering Document under the captions "The Reorganization"
or "Use of Proceeds."
(k) Except as disclosed in the Offering Document, none of the
Issuers is in violation of its respective charter or by-laws (or other
similar constituent document) or in default in the performance of any
obligation, agreement, covenant or condition contained in any indenture,
loan agreement, mortgage, lease or other agreement or instrument that is
material to the Company and its subsidiaries, taken as a whole, to which
the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries or their respective property is bound.
(l) The (i) execution, delivery and performance of each of the
Transaction Documents by each of the Issuers (to the extent a party
thereto) and the issuance and sale of the Offered Securities and
compliance with the terms and provisions thereof and (ii) the consummation
by the Escrow Company or the Company of the transactions described in the
Offering Document under the captions "The Reorganization" and "Use of
Proceeds" will not result in a breach or violation of any of the terms and
provisions of, or constitute a default under (including after giving
effect to the Reorganization), (x) any statute, any rule, regulation or
order of any governmental agency or body or any court, domestic or
foreign, having jurisdiction over the Escrow Company, the Company or any
subsidiary of the Company or any of their respective properties, or any
agreement or instrument to which the Escrow Company, the Company or any
such subsidiary is a party or by which the Escrow Company, the Company or
any such subsidiary is bound or to which any of the properties of the
Escrow Company, the Company or any such subsidiary is subject, (y) the
Communications Act of 1934, as amended (the "Communications
4
Act"), and the rules, regulations and policies of the Federal
Communications Commission (the "FCC") or (z) the charter or by-laws (or
other similar constituent document) of the Escrow Company, the Company or
any such subsidiary.
(m) This Agreement has been duly authorized, executed and
delivered by each of the Issuers.
(n) The Registration Rights Agreement has been duly authorized by
each of the Issuers and will be executed and delivered by each of the
Issuers on the Closing Date. When the Registration Rights Agreement has
been duly executed and delivered, the Registration Rights Agreement will
be a valid and legally binding agreement of each of the Issuers,
enforceable against each of the Issuers in accordance with its terms,
subject to (i) bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights, (ii) general equity principles
and (iii) public policy considerations.
(o) Each of the Issuers has all requisite corporate or such other
similar power and authority to execute, deliver and perform its
obligations under this Agreement and each of the other Transaction
Documents to which it is, or will become, a party and to consummate the
transactions contemplated hereby and thereby, including, without
limitation, the corporate or such other similar power and authority to
issue, sell and deliver the Offered Securities (if a Notes Issuer) and to
issue and deliver the related Guarantees (if a Guarantor) as provided
herein and therein.
(p) The Escrow Agreement has been duly authorized each of the Note
Issuers and will be duly executed and delivered by each of the Note
Issuers on the Closing Date. When the Escrow Agreement has been duly
executed and delivered, the Escrow Agreement will be a valid and legally
binding agreement of each of the Note Issuers, enforceable against each of
the Note Issuers in accordance with its terms, subject to (i) bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors' rights
and (ii) general equity principles. The Offering Document contains a
summary of the terms of the Escrow Agreement that fairly presents and
summarizes in all material respects the terms of the Escrow Agreement.
(q) The Guarantees of the Offered Securities have been duly and
validly authorized for issuance by each of the Guarantors and, upon
consummation of the Mergers, when executed and delivered in accordance
with the terms of the Indenture and when the Offered Securities have been
issued and authenticated in accordance with the terms of the Indenture,
will be the valid and binding obligations of each of the Guarantors,
enforceable against each of them in accordance with its terms subject to
(i) bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights, (ii) general equity principles and (iii)
public policy considerations.
(r) On the Closing Date, the Exchange Notes (as defined in the
Registration Rights Agreement) will have been duly and validly authorized
for issuance by the
5
Company and, when the Exchange Notes are issued, executed and
authenticated in accordance with the terms of the Exchange Offer and the
Indenture, the Exchange Notes will be the valid and binding obligations of
the Company enforceable in accordance with their terms subject to (i)
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights, (ii) general equity principles and (iii) public policy
considerations.
(s) On the Closing Date, the Guarantees to be endorsed on the
Exchange Notes by each Guarantor have been duly authorized by such
Guarantor; and, when issued, will have been duly executed and delivered by
each such Guarantor and will conform to the description thereof in the
Offering Document. When the Exchange Notes have been issued, executed and
authenticated in accordance with the terms of the Exchange Offer and the
Indenture, the Guarantee of each Guarantor endorsed thereon will
constitute valid and legally binding obligations of such Guarantor,
enforceable in accordance with its terms subject to (i) bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors' rights,
(ii) general equity principles and (iii) public policy considerations.
(t) The Agreement of Merger of the Escrow Company with and into
Holding Company and the Agreement of Merger of Holding Company with and
into the Company (collectively, the "MERGER AGREEMENTS") as of the Closing
Date will be duly and validly authorized, executed and delivered by each
of the parties thereto and will be, as of the Closing Date, a valid and
binding agreement of each of the parties thereto, enforceable against each
of them in accordance with its terms subject to (i) bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors' rights,
(ii) general equity principles and (iii) public policy considerations.
(u) Except as disclosed in the Offering Document, the Company and
its subsidiaries have, and after giving effect to the Reorganization will
have, good and marketable title to all real properties and all other
properties and assets owned by them, in each case free from liens,
encumbrances and defects that would materially affect the value thereof or
materially interfere with the use made or to be made thereof by them; and
except as disclosed in the Offering Document, the Company and its
subsidiaries hold, and after giving effect to the Reorganization will
hold, any leased real or personal property under valid and enforceable
leases with only such exceptions as would not materially interfere with
the use made or to be made thereof by them.
(v) The Company and its subsidiaries possess, and after giving
effect to the Reorganization will possess, adequate certificates,
authorities or permits issued by appropriate governmental agencies or
bodies necessary to conduct the business now and then operated by them and
have not received any notice of proceedings relating to the revocation or
modification of any such certificate, authority or permit that, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a material adverse effect on the
condition (financial or other), business,
6
properties or results of operations of the Company and its subsidiaries
taken as a whole ("MATERIAL ADVERSE EFFECT").
(w) No labor dispute with the employees of the Company or any
subsidiary exists or, to the knowledge of the Company, is imminent that
would individually or in the aggregate have a Material Adverse Effect.
(x) The Company and its subsidiaries own, possess or can acquire
on reasonable terms, and after giving effect to the Reorganization will
own, possess or be able to acquire or use on reasonable terms, adequate
trademarks, trade names and other rights to inventions, know-how, patents,
copyrights, confidential information and other intellectual property
(collectively, "INTELLECTUAL PROPERTY RIGHTS") necessary to conduct the
business now and then operated by them, or presently employed by them, and
have not received any notice of infringement of or conflict with asserted
rights of others with respect to any intellectual property rights that, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect.
(y) Except as disclosed in the Offering Document, neither the
Company nor any of its subsidiaries is in violation of any statute, any
rule, regulation, decision or order of any governmental agency or body or
any court, domestic or foreign, relating to the use, disposal or release
of hazardous or toxic substances or relating to the protection or
restoration of the environment or human exposure to hazardous or toxic
substances (collectively, "ENVIRONMENTAL LAWS"), owns or operates any real
property contaminated with any substance that is subject to any
environmental laws, is liable for any off-site disposal or contamination
pursuant to any environmental laws, or is subject to any claim relating to
any environmental laws, which violation, contamination, liability or claim
would individually or in the aggregate have a Material Adverse Effect; and
the Company is not aware of any pending investigation which might lead to
such a claim.
(z) Except as disclosed in the Offering Document, there are no
pending actions, suits or proceedings against or affecting the Escrow
Company, the Company, any of its subsidiaries or any of their respective
properties that (i), if determined adversely to the Escrow Company, the
Company or any of its subsidiaries, would individually or in the aggregate
have a Material Adverse Effect, (ii) challenge in any respect or seeks to
delay or prevent the issuance and sale of the Offered Securities, the
Reorganization or the Mergers, or (iii) would materially and adversely
affect the ability of the Escrow Company or the Company to perform each of
their respective obligations under the Transaction Documents, or which are
otherwise material in the context of the sale of the Offered Securities;
and no such actions, suits or proceedings are threatened or, to the Escrow
Company or the Company's knowledge, contemplated.
(aa) (i) KPMG LLP ("KPMG"), who have audited the financial
statements of the Company and its consolidated subsidiaries as of and for
the years ended December 31, 2002 and 2003 included in the Offering
Document, are and (ii) Xxxxxx Xxxxxxxx LLP ("XXXXXXXX"), who have audited
the financial statements of the Company and its consolidated subsidiaries
as of and for the year ended December 31, 2001 included in the
7
Offering Document were, as of June 26, 2002, independent auditors with
respect to the Company and its consolidated subsidiaries in each case
within the meaning of Rule 101 of the Code of Professional Conduct of the
American Institute of Certified Public Accountants and its interpretations
and rulings thereunder and, at all times relevant to the preparation of
the historical financial statements, KPMG and Xxxxxxxx were such
independent certified public accountants. The financial statements
included in the Offering Document present fairly the financial position of
the Company and its consolidated subsidiaries as of the dates shown and
their results of operations and cash flows for the periods shown, and,
except as otherwise disclosed in the Offering Document, such financial
statements have been prepared in conformity with the generally accepted
accounting principles in the United States applied on a consistent basis;
the assumptions used in preparing the pro forma financial statements
included in the Offering Document provide a reasonable basis for
presenting the significant effects directly attributable to the
transactions or events described therein; the related pro forma
adjustments give appropriate effect to those assumptions, and the pro
forma columns therein reflect the proper application of those adjustments
to the corresponding historical financial statement amounts.
(bb) Except as disclosed in the Offering Document, since the date
of the latest audited financial statements included in the Offering
Document there has been no material adverse change, nor any development or
event involving a prospective material adverse change, in the condition
(financial or other), business, properties or results of operations of the
Company and its subsidiaries taken as a whole, and, except as disclosed in
or contemplated by the Offering Document, there has been no dividend or
distribution of any kind declared, paid or made by the Company on any
class of its capital stock.
(cc) None of the Issuers is, or after giving effect to the issuance
and sale of the Offered Securities and the Reorganization and applying the
net proceeds as described in the Offering Document under the caption "Use
of Proceeds" will at that time be, an open-end investment company, unit
investment trust or face-amount certificate company that is or is required
to be registered under Section 8 of the United States Investment Company
Act of 1940 (the "INVESTMENT COMPANY ACT"); and none of the Issuers is, or
after giving effect to the issuance and sale of the Offered Securities and
the Reorganization and applying the net proceeds as described in the
Offering Document under the caption "Use of Proceeds" will at that time
be, an "investment company" as defined in the Investment Company Act.
(dd) No securities of the same class (within the meaning of Rule
144A(d)(3) under the Securities Act) as the Offered Securities are listed
on any national securities exchange registered under Section 6 of the
United States Securities Exchange Act of 1934 ("EXCHANGE ACT") or quoted
in a U.S. automated inter-dealer quotation system.
(ee) No registration under the Securities Act of the Offered
Securities or the Guarantees is required for the sale of the Offered
Securities and the Guarantees to the Purchasers as contemplated hereby or
for the resales of the Offered Securities by the several Purchasers in the
manner contemplated by this Agreement assuming the accuracy of the
Purchasers' representations in Section 4 hereof.
8
(ff) None of the Issuers, nor any of their respective affiliates,
nor any person acting on behalf of any of them (other than the Purchasers,
as to whom the Issuers make no representation) (i) has, within the
six-month period prior to the date hereof, offered or sold in the United
States or to any U.S. person (as such terms are defined in Regulation S
under the Securities Act) the Offered Securities, or any security of the
same class or series as the Offered Securities or (ii) has offered or will
offer or sell the Offered Securities (A) in the United States by means of
any form of general solicitation or general advertising within the meaning
of Rule 502(c) under the Securities Act or (B) with respect to any such
securities sold in reliance on Rule 903 of Regulation S ("REGULATION S")
under the Securities Act, by means of any directed selling efforts within
the meaning of Rule 902(c) of Regulation S. Each of the Issuers, their
affiliates and any person acting on their respective behalves have
complied and will comply with the offering restrictions requirement of
Regulation S. None of the Issuers have entered or will enter into any
contractual arrangement with respect to the distribution of the Offered
Securities except for this Agreement.
(gg) None of the Issuers nor any agent thereof acting on the behalf
of them has taken, and none of them will take, any action that might cause
this Agreement or the issuance or sale of the Offered Securities to
violate Regulation T, Regulation U or Regulation X of the Board of
Governors of the Federal Reserve System.
(hh) The Company, the Guarantors and each of their respective
subsidiaries carry, or are covered by, insurance in such amounts and
covering such risks as is adequate for the conduct of their respective
businesses and the value of their respective properties and as is
customary for companies engaged in similar businesses in similar
industries.
(ii) There are no contracts, agreements or understandings between
any Issuer and any person granting such person the right to require any
Issuer to file a registration statement under the Securities Act with
respect to any securities of any Issuer, except (i) as contemplated by the
Registration Rights Agreement, (ii) with respect to the common stock of
the Company to be issued in connection with the Reorganization and (iii)
registration rights that will be terminated upon consummation of the
Reorganization, or to require any Issuer to include such securities with
the Offered Securities and the Guarantees registered pursuant to any
Registration Statement.
(jj) No "nationally recognized statistical rating organization" as
such term is defined for purposes of Rule 436(g)(2) under the Securities
Act (i) has imposed (or has informed the Company or any Guarantor that it
is considering imposing) any condition (financial or otherwise) on the
Company's or any Guarantor's retaining any rating assigned to the Company
or any Guarantor, any securities of the Company or any Guarantor or (ii)
has indicated to the Company or any Guarantor that it is considering (a)
the downgrading, suspension, or withdrawal of, or any review for a
possible change that does not indicate the direction of the possible
change in, any rating so assigned or (b) any change in the outlook for any
rating of the Company, any Guarantor or any securities of the Company or
any Guarantor.
9
(kk) No form of general solicitation or general advertising (as
defined in Regulation D under the Securities Act) was used by any Issuer
or any of their respective representatives (other than the Purchasers, as
to whom the Issuers make no representation) in connection with the offer
and sale of the Offered Securities contemplated hereby, including, but,
not limited to, articles, notices or other communications published in any
newspaper, 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 Offered Securities have been issued and sold by the Note
Issuers within the six-month period immediately prior to the date hereof.
(ll) None of the Issuers nor any of their respective affiliates or
any person acting on their behalf (other than the Purchasers, as to whom
the Issuers make no representation) has engaged or will engage in any
directed selling efforts within the meaning of Regulation S with respect
to the Offered Securities or the Guarantees.
(mm) The Offered Securities offered and sold in reliance on
Regulation S have been offered and will be offered and sold only in
offshore transactions.
(nn) The sale of the Offered Securities pursuant to Regulation S is
not part of a plan or scheme to evade the registration provisions of the
Securities Act.
(oo) The Company maintains and will maintain disclosure controls
and procedures (as defined in Rule 13a-15 of the Exchange Act) designed to
ensure that information required to be disclosed by the Company in the
reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported in accordance with the Exchange Act and
the rules and regulations thereunder. The Company has carried out and will
carry out evaluations, under the supervision and with the participation of
the Company's management, of the effectiveness of the design and operation
of the Company's disclosure controls and procedures in accordance with
Rule 13a-15 of the Exchange Act.
(pp) None of the Issuers, nor any director, officer, agent, employee
or other person associated with or acting on behalf of any Issuer, has
used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expense relating to political activity;
made any direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; violated or is in
violation of any provision of the Foreign Corrupt Practices Act of 1977;
or made any bribe, rebate, payoff, influence payment, kickback or other
unlawful payment.
(qq) The Company is in compliance in all material respects with all
presently applicable provisions of ERISA; no "reportable event" (as
defined in ERISA), has occurred with respect to any "pension plan" (as
defined in ERISA), for which the Company would have any liability; the
Company has not incurred and does not expect to incur liability under (i)
Title IV of ERISA with respect to termination of, or withdrawal from, any
"pension plan" or (ii) Sections 412 or 4971 of the Internal Revenue Code
of 1986, as amended, including the regulations and published
interpretations thereunder (the
10
"CODE"); and each "pension plan" for which the Company would have any
liability that is intended to be qualified under Section 401(a) of the
Code is so qualified in all material respects and nothing has occurred,
whether by action or by failure to act, which would cause the loss of such
qualification.
(rr) The Company and each Guarantor (i) makes and keeps accurate
books and records and (ii) maintains internal accounting controls that
provide reasonable assurance that (A) transactions are executed in
accordance with management's authorization, (B) transactions are recorded
as necessary to permit preparation of its financial statements and to
maintain accountability for its assets, (C) access to its assets is
permitted only in accordance with management's authorization and (D) the
reported accountability for its assets is compared with existing assets at
reasonable intervals.
(ss) Except as disclosed in the Offering Document, the Company and
the Guarantors have filed all federal, state and local income and
franchise tax returns required to be filed through the date hereof and
have paid all taxes due thereon, and no tax deficiency has been determined
adversely to the Company, the Guarantors or any of their respective
subsidiaries which has had (nor does the Company or the Guarantors have
any knowledge of any tax deficiency which, if determined adversely to the
Company, the Guarantors or any of their respective subsidiaries, would
have) individually or in the aggregate, a Material Adverse Effect on the
Company, the Guarantors and their respective subsidiaries.
(tt) Prior to the date hereof, neither the Company nor any of its
affiliates has taken any action which is designed to or that has
constituted or that might have been expected to cause or result in
stabilization or manipulation of the price of any security of the Company
in connection with the offering of the Offered Securities.
(uu) The Offering Document contains all the information specified
in, and meets the requirements of, Rule 144A(d)(4) under the Securities
Act.
(vv) No relationship, direct or indirect, required to be described
under Item 404 of Regulation S-K exists between or among the Issuers on
the one hand, and the directors, officers or stockholders of any Issuer on
the other hand, that is not described in the Offering Document.
(ww) The market-related and subscriber-related data and estimates
included in the Offering Document are based on or derived from sources
which the Company believes to be accurate and reliable.
3. Purchase, Sale and Delivery of Offered Securities. The Escrow
Company will deliver against payment of the purchase price the Offered
Securities in the form of one or more permanent global Securities in definitive
form (the "GLOBAL SECURITIES") deposited with the Trustee as custodian for The
Depository Trust Company ("DTC") and registered in the name of Cede & Co., as
nominee for DTC. Interests in any permanent Global Securities will be held only
in book-entry form through DTC, except in the limited circumstances described in
the Offering Document. Payment for the Offered Securities shall be made by the
Purchasers in Federal (same
11
day) funds by official check or checks or wire transfer to an account at a bank
acceptable to CSFB on July 19, 2004, or at such other time not later than seven
full business days thereafter as CSFB and the Company determine, such time being
herein referred to as the "CLOSING DATE", against delivery to the Trustee as
custodian for DTC of the Global Securities representing all of the Securities.
The Global Securities will be made available for checking at the office of
O'Melveny & Xxxxx LLP, Times Square Tower, 0 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 at least 24 hours prior to the Closing Date.
As compensation for the Purchasers' commitments, the Company will pay to
the Purchasers for their proportionate accounts the sum of 97% of the aggregate
principal amount of the Offered Securities purchased by the Purchasers on the
Closing Date as commissions for sale of the Offered Securities under this
Agreement; provided, however that no such compensation will be due to Purchaser
in the event of a Special Mandatory Redemption. Such payment will be made on the
Merger Date, with respect to the Offered Securities purchased on the Closing
Date.
4. Representations by Purchasers; Resale by Purchasers. (a) Each
Purchaser severally represents and warrants to the Escrow Company and the
Company that it is an "accredited investor" within the meaning of Regulation D
under the Securities Act.
(b) Each Purchaser severally acknowledges that the Offered
Securities have not been registered under the Securities Act and may not
be offered or sold within the United States or to, or for the account or
benefit of, U.S. persons except in accordance with Regulation S or
pursuant to an exemption from the registration requirements of the
Securities Act. Each Purchaser severally represents and agrees that it has
offered and sold the Offered Securities and will offer and sell the
Offered Securities (i) as part of their distribution at any time and (ii)
otherwise until the later of the commencement of the offering and the
Closing Date, only in accordance with Rule 144A ("RULE 144A") or Rule 903
under the Securities Act. Accordingly, neither such Purchaser nor its
affiliates, nor any persons acting on its or their behalf, have engaged or
will engage in any directed selling efforts with respect to the Offered
Securities, and such Purchaser, its affiliates and all persons acting on
its or their behalf have complied and will comply with the offering
restrictions requirement of Regulation S. Each Purchaser severally agrees
that, at or prior to confirmation of sale of the Offered Securities, other
than a sale pursuant to Rule 144A, such Purchaser will have sent to each
distributor, dealer or person receiving a selling concession, fee or other
remuneration that purchases the Offered Securities 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
U.S. Securities Act of 1933 (the "SECURITIES ACT") and may not be
offered or 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 date 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
meanings given to them by Regulation S."
Terms used in this subsection (b) have the meanings given to them by
Regulation S.
12
(c) Each Purchaser severally agrees that it and each of its
affiliates has not entered and will not enter into any contractual
arrangement with respect to the distribution of the Offered Securities
except for any such arrangements with the other Purchasers or affiliates
of the other Purchasers or with the prior written consent of the Company.
(d) Each Purchaser severally agrees that it and each of its
affiliates will not offer or sell the Offered Securities in the United
States by means of any form of general solicitation or general advertising
within the meaning of Rule 502(c) under the Securities Act, including, but
not limited to (i) any advertisement, article, notice or other
communication published in any newspaper, magazine or similar media or
broadcast over television or radio, or (ii) any seminar or meeting whose
attendees have been invited by any general solicitation or general
advertising. Each Purchaser severally agrees, with respect to resales made
in reliance on Rule 144A of any of the Offered Securities, to deliver
either with the confirmation of such resale or otherwise prior to
settlement of such resale a notice to the effect that the resale of such
Offered Securities has been made in reliance upon the exemption from the
registration requirements of the Securities Act provided by Rule 144A.
(e) Each of the Purchasers severally represents and agrees that
(i) it has not offered or sold and prior to the expiry of a period of six
months from the closing date, will not offer or sell any Offered
Securities to persons in the United Kingdom 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
meaning of the Public Offers of Securities Regulations 1995; (ii) it has
only communicated or caused to be communicated and will only communicate
or cause to be communicated any invitation or inducement to engage in
investment activity (within the meaning of section 21 of the Financial
Services and Markets Act 2000 (the "FSMA")) received by it in connection
with the issue or sale of any Offered Securities in circumstances in which
section 21(1) of the FSMA does not apply to the Escrow Company, the
Company or any Guarantor; and (iii) it has complied and will comply with
all applicable provisions of the FSMA with respect to anything done by it
in relation to the Offered Securities in, from or otherwise involving the
United Kingdom.
5. Certain Agreements of the Issuers. The Issuers each agree with the
several Purchasers that:
(a) The Issuers will advise CSFB promptly of any proposal to amend
or supplement the Offering Document and will not effect such amendment or
supplementation without CSFB's consent. If, at any time prior to the
completion of the resale of the Offered Securities by the Purchasers, any
event occurs as a result of which the Offering Document as then amended or
supplemented would include an untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, upon becoming aware of such event, the Issuers promptly will
notify CSFB
13
of such event and promptly will prepare, at their own expense, an
amendment or supplement which will correct such statement or omission.
Neither CSFB's consent to, nor the Purchasers' delivery to offerees or
investors of, any such amendment or supplement shall constitute a waiver
of any of the conditions set forth in Section 6.
(b) The Issuers will furnish to the Purchasers copies of any
preliminary offering circular, the Offering Document and all amendments
and supplements to such documents, in each case as soon as available and
in such quantities as the Purchasers reasonably request, and the Issuers
will furnish to CSFB on the date hereof three copies of the Offering
Document signed by a duly authorized officer of the Escrow Company, one of
which will include the independent accountants' reports therein manually
signed by such independent accountants. At any time when the Company is
not subject to Section 13 or 15(d) of the Exchange Act, the Company will
promptly furnish or cause to be furnished to CSFB (and, upon request, to
each of the other Purchasers) and, upon request of holders and prospective
purchasers of the Offered Securities, to such holders and purchasers,
copies of the information required to be delivered to holders and
prospective purchasers of the Offered Securities pursuant to Rule
144A(d)(4) under the Securities Act (or any successor provision thereto)
in order to permit compliance with Rule 144A in connection with resales by
such holders of the Offered Securities. The Issuers will pay the expenses
of printing and distributing to the Purchasers all such documents.
(c) The Issuers will arrange for the qualification of the Offered
Securities for sale and the determination of their eligibility for
investment under the laws of such jurisdictions in the United States and
Canada as CSFB designates and will continue such qualifications in effect
so long as required for the resale of the Offered Securities by the
Purchasers; provided that none of the Issuers will be required to qualify
as a foreign corporation or to file a general consent to service of
process in any such state.
(d) During the period of two years after the Closing Date, the
Company will, upon request, furnish to CSFB, each of the other Purchasers
and any holder of the Offered Securities a copy of the restrictions on
transfer applicable to the Offered Securities.
(e) During the period of two years after the Closing Date, the
Company will not, and will not permit any of its affiliates (as defined in
Rule 144 under the Securities Act) to, resell any of the Offered
Securities that have been reacquired by any of them.
(f) During the period of two years after the Closing Date, none of
the Issuers will be or become, an open-end investment company, unit
investment trust or face-amount certificate company that is or is required
to be registered under Section 8 of the Investment Company Act.
(g) Each of the Issuers jointly and severally agree to pay all
expenses incidental to the performance of its obligations under the
Transaction Documents, including (i) the fees and expenses of the Trustee
and its professional advisers and the Escrow Agent and its professional
advisers; (ii) all expenses in connection with the
14
execution, issue, authentication, packaging and initial delivery of the
Offered Securities and, as applicable, the Exchange Securities (as defined
in the Registration Rights Agreement), the preparation and printing of the
Transaction Documents, the Offering Document and amendments and
supplements thereto, and any other document relating to the issuance,
offer, sale and delivery of the Offered Securities and as applicable, the
Exchange Securities; (iii) the cost of listing the Offered Securities and
qualifying the Offered Securities for trading in The Portal(SM) Market
("PORTAL") and any expenses incidental thereto; (iv) the cost of any
advertising approved by the Company in connection with the issue of the
Offered Securities; (v) for any expenses (including reasonable fees and
disbursements of counsel) incurred in connection with qualification of the
Offered Securities or the Exchange Securities for sale under the laws of
such jurisdictions in the United States and Canada as CSFB designates and
the printing of memoranda relating thereto; (vi) for any fees charged by
investment rating agencies for the rating of the Offered Securities or the
Exchange Securities and (vii) for expenses incurred in distributing
preliminary offering circulars and the Offering Document (including any
amendments and supplements thereto) to the Purchasers. The Issuers agree,
jointly and severally, to pay or reimburse the Purchasers (to the extent
incurred by them) for all travel expenses of the Purchasers and the
Issuers' officers and employees and any other expenses of the Purchasers
and the Issuers in connection with attending or hosting meetings with
prospective purchasers of the Offered Securities from the Purchasers.
(h) In connection with the offering, until CSFB shall have
notified the Note Issuers and the other Purchasers of the completion of
the resale of the Offered Securities, none of the Escrow Company, the
Company nor any of their affiliates has or will, either alone or with one
or more other persons, bid for or purchase for any account in which it or
any of its affiliates has a beneficial interest any Offered Securities or
attempt to induce any person to purchase any Offered Securities; and
neither it nor any of its affiliates will make bids or purchases for the
purpose of creating actual, or apparent, active trading in, or of raising
the price of, the Offered Securities.
(i) Except for the filing of a registration statement contemplated
by the Registration Rights Agreement, for a period of 180 days after the
date of the initial offering of the Offered Securities by the Purchasers,
the Escrow Company and the Company will not offer, sell, contract to sell,
pledge or otherwise dispose of, directly or indirectly, or file with the
Commission a registration statement under the Securities Act relating to,
any United States dollar-denominated debt securities issued or guaranteed
by any of the Issuers and having a maturity of more than one year from the
date of issue, or publicly disclose the intention to make any such offer,
sale, pledge, disposition or filing, without the prior written consent of
CSFB. The Company will not at any time offer, sell, contract to sell,
pledge or otherwise dispose of, directly or indirectly, any securities
under circumstances where such offer, sale, pledge, contract or
disposition would cause the exemption afforded by Section 4(2) of the
Securities Act or the safe harbor of Regulation S thereunder to cease to
be applicable to the offer and sale of the Offered Securities.
(j) The Escrow Company, the Company and the Guarantors will use
the proceeds from the sale of the Offered Securities in the manner
described in the Offering Document under the caption "Use of Proceeds,"
unless the Escrow Company redeems the
15
Offered Securities pursuant to a Special Mandatory Redemption (as defined
in the Offering Document).
(k) The Escrow Company will deposit the gross proceeds from the
offering of the Offered Securities and the Company will deposit such
additional funds (which together with the proceeds deposited by the Escrow
Company will equal 100% of the aggregate principal amount of the Offered
Securities plus accrued interest on the Offered Securities up to but not
including the 120th day after the issuance of the Offered Securities
(expected to be November 16, 2004) plus $650,000 for the reimbursement of
out-of-pocket expenses of the Purchasers as contemplated by Section 9 of
this Agreement), in the Escrow Account and will comply with all their
respective agreements set forth in the Escrow Agreement.
(l) The Issuers will use their best efforts to permit the Offered
Securities to be designated PORTAL securities in accordance with the rules
and regulations adopted by the National Association of Securities Dealers,
Inc. relating to trading in PORTAL and to permit the Offered Securities to
be eligible for clearance and settlement through DTC.
(m) The Issuers agree 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 Offered Securities in a manner that would require the registration
under the Securities Act of the sale to the Purchasers or the resale of
the Offered Securities.
(n) The Issuers agree to comply with all the terms and conditions
of the Transaction Documents (to the extent they are parties thereto) and
all agreements set forth in the representation letter of the Escrow
Company to DTC relating to the approval of the Offered Securities by DTC
for "book entry" transfer.
(o) The Issuers will use their commercially reasonable best
efforts to do and perform all things required or necessary to be done and
performed by them prior to the Closing Date under this Agreement, and to
satisfy all conditions precedent to the Purchasers' obligations hereunder
to purchase the Offered Securities.
6. Conditions of the Obligations of the Purchasers. The obligations of
the several Purchasers to purchase and pay for the Offered Securities will be
subject to the accuracy of the representations and warranties on the part of the
Escrow Company, the Company and the Guarantors herein, to the accuracy of the
statements of officers of the Escrow Company, the Company and the Guarantors
made pursuant to the provisions hereof, to the performance by the Escrow
Company, the Company and the Guarantors of their respective obligations
hereunder and to the following additional conditions precedent:
(a) The Purchasers shall have received a letter, dated the date of
this Agreement, from KPMG, confirming that they are independent public
accountants within the meaning of the Securities Act and the applicable
published rules and regulations thereunder ("RULES AND REGULATIONS") and
to the effect that:
16
(i) in their opinion the consolidated financial statements
examined by them and included in the Offering Document comply as to
form in all material respects with the applicable accounting
requirements of the Securities Act and the related published Rules
and Regulations;
(ii) they have performed the procedures specified by the
American Institute of Certified Public Accountants for a review of
interim financial information as described in Statement of Auditing
Standards No. 100, Interim Financial Information, on the unaudited
consolidated financial statements included in the Offering Document;
(iii) on the basis of the review referred to in clause (ii)
above, a reading of the latest available interim consolidated
financial statements of the Company, inquiries of officials of the
Company who have responsibility for financial and accounting matters
and other specified procedures, nothing came to their attention that
caused them to believe that:
(A) the unaudited consolidated financial statements
included in the Offering Document do not comply as to form in
all material respects with the applicable accounting
requirements of the Securities Act and the related published
Rules and Regulations or any material modifications should be
made to such unaudited consolidated financial statements for
them to be in conformity with generally accepted accounting
principles;
(B) at March 31, 2004, there was any change in the
capital stock or any increase in short-term indebtedness or
long-term debt or decrease in consolidated net current assets
or stockholder's equity of the Company and its consolidated
subsidiaries as compared with amounts shown in the audited
December 31, 2003 balance sheet included in the Offering
Document or, for the period from January 1, 2004 to March 31,
2004, there was any decreases compared with the corresponding
period of the previous year, in consolidated revenue, net
operating income, consolidated net income or in the ratio of
earnings to fixed charges, except in all cases for changes,
increases or decreases which the Offering Document disclose
have occurred or may occur or which are described in such
letter; and
(iv) for the period subsequent to March 31, 2004, they have
inquired of certain officials of the Company who have responsibility
for financial and accounting matters whether (a) at the date not
more than three business days prior to the date of this Agreement,
there was any change in the capital stock, increase in short-term
debt, long-term debt or any decreases in consolidated net current
assets or stockholders' equity as compared with amounts shown on the
March 31, 2004 unaudited condensed consolidated balance sheet
included in the Offering Document or (b) for the period from April
1, 2004 to a date not more than three business days prior to the
date of this Agreement, there were any increases or decreases, as
compared to the corresponding period in the preceding year, in
consolidated revenue or in the total amounts of income before
extraordinary items
17
or of net income. On the basis of these inquiries and their reading
of the Company's minutes, nothing came to their attention that
caused them to believe that there was any such change, increase or
decrease, except for changes, increases or decreases which the
Offering Document disclose have occurred or may occur; and
(v) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial
information contained in the Offering Document (in each case to the
extent that such dollar amounts, percentages and other financial
information are derived from the general accounting records of the
Company and its subsidiaries subject to the internal controls of the
Company's accounting system or are derived directly from such
records by analysis or computation) with the results obtained from
inquiries, a reading of such general accounting records and other
procedures specified in such letter and have found such dollar
amounts, percentages and other financial information to be in
agreement with such results.
(b) Subsequent to the execution and delivery of this Agreement,
except as contemplated in connection with the Reorganization, there shall
not have occurred (i) any change, or any development or event involving a
prospective change, in the condition (financial or other), business,
properties or results of operations of the Escrow Company or the Company
and its subsidiaries taken as one enterprise that, in the judgment of a
majority in interest of the Purchasers, including CSFB, is material and
adverse and makes it impractical or inadvisable to proceed with completion
of the offering or the sale of and payment for the Offered Securities;
(ii) any downgrading in the rating of any debt securities of the Escrow
Company or the Company by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Securities
Act), or any public announcement that any such organization has under
surveillance or review its rating of any debt securities of the Escrow
Company or the Company (other than an announcement with positive
implications of a possible upgrading, and no implication of a possible
downgrading, of such rating) or any announcement that the Escrow Company
or the Company has been placed on negative outlook; (iii) any change in
U.S. or international financial, political or economic conditions or
currency exchange rates or exchange controls as would, in the judgment of
a majority in interest of the Purchasers including CSFB, be likely to
prejudice materially the success of the proposed issue, sale or
distribution of the Offered Securities, whether in the primary market or
in respect of dealings in the secondary market, (iv) any material
suspension or material limitation of trading in securities generally on
the New York Stock Exchange, or any setting of minimum prices for trading
on such exchange; (v) any suspension of trading of any securities of the
Escrow Company or the Company on any exchange or in the over-the-counter
market; (vi) any banking moratorium declared by U.S. Federal or New York
authorities; (vii) any major disruption of settlements of securities or
clearance services in the United States or (viii) any attack on, outbreak
or escalation of hostilities or act of terrorism involving, the United
States or any declaration of war by Congress or any other national or
international calamity or emergency if, in the judgment of a majority in
interest of the Purchasers including CSFB, the effect of any such attack,
outbreak, escalation, act, declaration, calamity or emergency makes it
18
impractical or inadvisable to proceed with completion of the offering or
sale of and payment for the Offered Securities.
(c) The Purchasers shall have received an opinion, dated the
Closing Date, of Xxxxxx Xxxxxx Xxxxxxx LLP, counsel for the Issuers, that:
(i) Each of the Note Issuers has been duly incorporated and
is an existing corporation in good standing under the laws of the
State of Delaware, with corporate power and authority to own its
properties and conduct its business as described in the Offering
Document; and each of the Note Issuers is duly qualified to do
business as a foreign corporation in good standing in all other
jurisdictions in which its ownership or lease of property or the
conduct of its business requires such qualification, except where
the failure to be so qualified would not have a Material Adverse
Effect;
(ii) Each subsidiary of the Company is duly qualified to do
business as a foreign corporation or limited liability company, as
the case may be, in good standing in all other jurisdictions in
which its ownership or lease of property or the conduct of its
business requires such qualification, except where the failure to be
so qualified would not have a Material Adverse Effect and except
that Horizon Personal Communications, Inc. ("PerCom") is not in good
standing in Tennessee due to the nonpayment of taxes which PerCom is
prohibited from paying as a result of its filing a plan of
reorganization pursuant to Chapter 11 of the U.S. Bankruptcy Code;
such plan of reorganization contemplates that PerCom will pay all
amounts owed for such taxes upon consummation of the Reorganization;
all of the issued and outstanding capital stock, or capital units,
as the case may be, of each subsidiary of the Company has been duly
authorized and validly issued and is fully paid and nonassessable;
and except as disclosed in the Offering Document the capital stock,
or capital units, as the case may be, of each subsidiary owned by
the Company, directly or through subsidiaries, is owned free from
liens, encumbrances and defects.
(iii) Each of the Note Issuers has all requisite corporate
power and authority to enter into the Transaction Documents to which
it is a party and each of the Note Issuers has full power and
authority to authorize, issue and sell the Offered Securities, as
contemplated by this Agreement;
(iv) The Indenture has been duly and validly authorized,
executed and delivered by each of the Note Issuers; the Offered
Securities have been duly authorized by the Company and have been
duly authorized, executed, authenticated, issued and delivered by
the Escrow Company and conform in all material respects to the
description thereof contained in the Offering Document; and the
Indenture constitutes the valid and legally binding obligation of
the Issuers and the Offered Securities constitute valid and legally
binding obligations of the Escrow Company enforceable in accordance
with their terms, in each case subject to (a) bankruptcy,
insolvency, fraudulent transfer, reorganization,
19
moratorium and similar laws of general applicability relating to or
affecting creditors' rights, (b) general equity principles and (c)
public policy considerations.
(v) The Indenture conforms in all material respects to the
requirements of the TIA and, the rules and regulations of the
Commission applicable to an indenture which is qualified thereunder.
(vi) This Agreement has been duly and validly authorized,
executed and delivered by each of the Note Issuers.
(vii) The Registration Rights Agreement has been duly
authorized, executed and delivered by each of the Note Issuers and
constitutes the valid and legally binding obligation of each of the
Issuers, enforceable against each of the Issuers in accordance with
its terms, subject to (a) bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditor's rights, (b)
general equity principles and (c) public policy considerations.
(viii) The Escrow Agreement has been duly and validly
authorized, executed and delivered by each of the Note Issuers and,
assuming due execution by the Escrow Agent, constitutes the valid
and legally binding obligation of each of the Note Issuers,
enforceable against each of the Note Issuers in accordance with its
terms, subject to (a) bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditor's rights, (b) general equity
principles and (c) public policy considerations.
(ix) Upon consummation of the Mergers, when executed and
delivered in accordance with the terms of the Indenture, the
Guarantees will constitute the valid and legally binding obligations
of each of the Guarantors, enforceable against each of the
Guarantors in accordance with their terms, subject to (a)
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditor's rights, (b) general equity principles and (c)
public policy considerations.
(x) When issued, the Guarantees to be endorsed on the
Exchange Notes by each of the Guarantors will conform in all
material respects to the description thereof contained in the
Offering Document. When the Exchange Notes have been issued,
executed and authenticated in accordance with the terms of the
Exchange Offer and the Indenture, the Guarantee of each Guarantor
endorsed thereon will constitute the valid and legally binding
obligations of such Guarantor, enforceable in accordance with its
terms, subject to (a) bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditor's rights, (b) general equity
principles and (c) public policy considerations.
20
(xi) The Exchange Notes have been duly and validly authorized
for issuance by the Company and, when the Exchange Notes are issued,
executed and authenticated in accordance with the terms of the
Exchange Offer and the Indenture, the Exchange Notes will constitute
the valid and legally binding obligations of the Company,
enforceable against it in accordance with its terms subject to (a)
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights, (b) general equity principles and (c)
public policy considerations.
(xii) The Merger Agreements will be, as of the Closing Date,
duly and validly authorized, executed and delivered by each of the
parties thereto and will be, as of the Closing Date, a valid and
binding agreement of each of the parties thereto, enforceable
against each of them in accordance with their terms subject to (a)
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights, (b) general equity principles and (c)
public policy considerations.
(xiii) None of the Issuers is and, after giving effect to the
offering and sale of the Offered Securities and the application of
the proceeds thereof as described in the Offering Document and
consummation of the Reorganization, will at that time be an
"investment company" as defined in the Investment Company Act.
(xiv) Except as disclosed in the Offering Document, none of
the Note Issuers is in violation of its respective charter or
by-laws and none of the Issuers are in default in the performance of
any obligation, agreement, covenant or condition contained in any
indenture, loan agreement, mortgage, lease or other agreement or
instrument to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries or their
respective property is bound, which violation or default may
reasonably be expected to have a Material Adverse Effect.
(xv) Except (i) for the Registration Rights Agreement, (ii)
as disclosed in the Offering Document and (iii) registration rights
which, to the knowledge of such counsel, after due inquiry, will be
terminated upon consummation of the Reorganization, to the knowledge
of such counsel, after due inquiry, there are no contracts,
agreements or understandings between any Issuer and any person
granting such person the right to require any Issuer to file a
registration statement under the Securities Act with respect to any
securities of any Issuer or to require any Issuer to include such
securities with the Offered Securities and the Guarantees registered
pursuant to any Registration Statement.
(xvi) Except as disclosed in the Offering Document, no
consent, approval, authorization or order of, or filing with, any
governmental agency or body or any court is required for (i) the
consummation of the transactions contemplated by the Transaction
Documents and (ii) the consummation by the Escrow Company and the
Company of the transactions described in the Offering
21
Document under the captions "The Reorganization," or "Use of
Proceeds," except such as may be required under state securities
laws and except for the order of the Commission declaring the
Exchange Offer Registration Statement or the Shelf Registration
Statement effective.
(xvii) Except as disclosed in the Offering Document, to the
knowledge of such counsel, after due inquiry, there are no pending
actions, suits or proceedings against the Company, any of its
subsidiaries or any of their respective properties that, (i) if
determined adversely to the Company or any of its subsidiaries,
would individually or in the aggregate have a Material Adverse
Effect, (ii) challenge in any respect or seek to delay or prevent
the issuance and sale of the Offered Securities, the Reorganization
or the Mergers, or (iii) would reasonably be expected to materially
and adversely affect the ability of the Company to perform its
obligations under the Transaction Documents, which are otherwise
material in the context of the sale of the Offered Securities; and
no such actions, suits or proceedings are, to such counsel's
knowledge, threatened.
(xviii)To the knowledge of such counsel, after due inquiry,
the (i) execution, delivery and performance of each of the
Transaction Documents by each of the Issuers (to the extent a party
thereto), and the issuance and sale of the Offered Securities and
compliance with the terms and provisions thereof and (ii) the
consummation by the Escrow Company and the Company of the
transactions described in the Offering Document under the captions
"The Reorganization" and "Use of Proceeds" will not result in a
breach or violation of any of the terms and provisions of, or
constitute a default under (including after giving effect to the
Reorganization), (x) any statute, any rule, regulation or order of
any governmental agency or body or any court, domestic or foreign,
having jurisdiction over the Escrow Company, the Company or any
subsidiary of the Company or any of their respective properties, or
any agreement or instrument to which the Escrow Company, the Company
or any such subsidiary is a party or by which the Escrow Company,
the Company or any such subsidiary is bound or to which any of the
properties of the Escrow Company, the Company or any such subsidiary
is subject, (y) the Communications Act, and the rules, regulations
and policies of the FCC or (z) the charter or by-laws (or other
similar constituent document) of the Escrow Company, the Company or
any such subsidiary.
(xix) It is not necessary in connection with (i) the offer,
sale and delivery of the Offered Securities by the Escrow Company to
the several Purchasers pursuant to this Agreement or (ii) the
resales of the Offered Securities by the several Purchasers in the
manner contemplated by this Agreement, to register the Offered
Securities under the Securities Act or to qualify an indenture in
respect thereof under the Trust Indenture Act.
(xx) The statements contained in the Offering Document under
the caption "Description of Notes" insofar as they purport to
constitute a summary of the terms of the Indenture, the Offered
Securities and the Guarantees and under the captions "Offering
Circular Summary - Recent Developments - The Sprint
22
Transaction," "Related Party Transactions" and "Important United
States Federal Tax Considerations," insofar as they describe the
laws and documents referred therein, are accurate in all material
respects.
(xxi) Nothing has come to the attention of such counsel that
caused them to believe that the Offering Circular, or any amendment
or supplement thereto, as of the date hereof and as of the Closing
Date, contained any untrue statement of a material fact or omitted
to state any material fact necessary to make the statements therein
not misleading; the descriptions in the Offering Circular of
statutes, legal and governmental proceedings and contracts and other
documents are accurate in all material respects and fairly present
the information required to be shown; it being understood that such
counsel need express no opinion as to the financial statements or
other financial data contained in the Offering Circular;
(d) The Purchasers shall have received an opinion, dated the
Closing Date, of Xxxxxx Xxxxxx Xxxxxx & Xxxxxx XXX, Ohio counsel for the
Issuers, that:
(i) Each of the Guarantors is an existing corporation in
good standing or limited liability company in full force and effect
under the laws of the State of Ohio, with the corporate or such
other similar power and authority to own its properties and conduct
its business as described in the Offering Document.
(ii) Each of the Guarantors has all requisite corporate or
such other similar power and authority to enter into the Transaction
Documents to which it is a party and each of the Guarantors has full
corporate or other such similar power and authority to authorize and
issue the Guarantees, as contemplated by this Agreement.
(iii) The Indenture has been duly and validly authorized,
executed and delivered by each of the Guarantors.
(iv) This Agreement has been duly and validly authorized,
executed and delivered by each of the Guarantors.
(v) The Registration Rights Agreement has been duly
authorized, executed and delivered by each of the Guarantors.
(vi) The Guarantees to be endorsed on the Offered Securities
have been duly and validly authorized for issuance by each of the
Guarantors.
(vii) The Guarantees to be endorsed on the Exchange Notes by
each Guarantor have been duly authorized by such Guarantor; and,
when issued, will have been duly executed and delivered by each such
Guarantor.
(viii) To the knowledge of such counsel, after due inquiry,
none of the Guarantors is in violation of its respective charter or
regulations (or other similar constituent document).
23
(e) The Purchasers shall have received from O'Melveny & Xxxxx LLP,
counsel for the Purchasers, such opinion or opinions, dated the Closing
Date, with respect to the incorporation of the Note Issuers, the validity
of the Offered Securities, the Offering Circular, the exemption from
registration for the offer and sale of the Offered Securities by the
Escrow Company to the several Purchasers and the resales by the several
Purchasers as contemplated hereby and other related matters as CSFB may
require, and the Issuers shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon
such matters.
(f) The Purchasers shall have received a certificate, dated the
Closing Date, of the President or any Vice President and a principal
financial or accounting officer of each Issuer in which such officers, to
the best of their knowledge after reasonable investigation, shall state
that the representations and warranties of the Issuers in this Agreement
are true and correct, that the Issuers have complied with all agreements
and satisfied all conditions on their part to be performed or satisfied
hereunder at or prior to the Closing Date, and that, subsequent to the
date of the most recent financial statements in the Offering Document
there has been no material adverse change, nor any development or event
involving a prospective material adverse change, in the condition
(financial or other), business, properties or results of operations of the
Escrow Company or the Company and its subsidiaries taken as a whole except
as set forth in the Offering Document.
(g) The Purchasers shall have received a certificate, dated the
date of this Agreement, of the Chief Financial Officer of the Company in
which such officer shall state that such officer has performed certain
procedures to confirm the accuracy of certain financial information
contained in the Offering Document and that such information was correct
in all material respects.
(h) The Purchasers shall have received a certificate, dated the
date of this Agreement, of the President and Chief Executive Officer and
Chief Financial Officer of the Company relating to, among other things,
certain network cost savings of the Company.
(i) The Purchasers shall have received a certificate, dated the
date of this Agreement, of the Chief Financial Officer of the Company
relating to, among other things, the accuracy of certain pro forma
financial information contained in the Offering Document.
(j) The Purchasers shall have received a letter, dated the Closing
Date, of KPMG which meets the requirements of subsection (a) of this
Section, except that the specified date referred to in such subsection
will be a date not more than three days prior to the Closing Date for the
purposes of this subsection.
(k) On the Closing Date, each Transaction Document will conform,
as to legal matters, in all material respects to the description thereof
contained in the Offering Circular.
24
(l) As of the Closing Date, the representations and warranties
contained in the Transaction Documents will be true and correct in all
material respects.
The Issuers will furnish the Purchasers with such conformed copies of such
opinions, certificates, letters and documents as the Purchasers reasonably
request. CSFB may in its sole discretion waive on behalf of the Purchasers
compliance with any conditions to the obligations of the Purchasers hereunder.
7. Indemnification and Contribution. (a) Each Issuer will, jointly and
severally, indemnify and hold harmless each Purchaser, its officers, partners,
members, directors and each person, if any, who controls such Purchaser within
the meaning of Section 15 of the Securities Act, against any losses, claims,
damages or liabilities, joint or several, to which such Purchaser may become
subject, under the Securities Act or the Exchange Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the Offering Document, or any amendment or
supplement thereto, or any related preliminary offering circular, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, including any
losses, claims, damages or liabilities arising out of or based upon any Issuer's
failure to perform its obligations under Section 5(a) of this Agreement, and
will reimburse each Purchaser for any legal or other expenses reasonably
incurred by such Purchaser in connection with investigating or defending any
such loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that none of the Issuers will 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 from any of such documents in reliance upon and in conformity
with written information furnished to the Company by any Purchaser through CSFB
specifically for use therein, it being understood and agreed that the only such
information consists of the information described as such in subsection (b)
below.
(b) Each Purchaser will severally and not jointly indemnify and
hold harmless each Issuer, and its respective directors and officers (or
members and managers, as the case may be) and each person, if any, who
controls such Issuer within the meaning of Section 15 of the Securities
Act, against any losses, claims, damages or liabilities to which such
Issuer may become subject, under the Securities Act or the Exchange Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in
the Offering Document, or any amendment or supplement thereto, or any
related preliminary offering circular, or arise out of or are based upon
the omission or the alleged omission to state therein a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, in each case to
the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance upon
and in conformity with written information furnished to the Company by
such Purchaser through CSFB specifically for use therein, and will
reimburse any legal or other expenses reasonably incurred by such Issuer
in connection with investigating or defending any such loss, claim,
damage, liability or action as such
25
expenses are incurred, it being understood and agreed that the only such
information furnished by any Purchaser consists of the following
information in the Offering Document furnished on behalf of each
Purchaser: under the caption "Plan of Distribution" the ninth and tenth
paragraphs; provided, however, that the Purchasers shall not be liable for
any losses, claims, damages or liabilities arising out of or based upon
any Issuer's failure to perform its obligations under Section 5(a) of this
Agreement.
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under subsection (a) or (b) above, notify the
indemnifying party of the commencement thereof; but the failure to notify
the indemnifying party shall not relieve it from any liability that it may
have under subsection (a) or (b) above except to the extent that it has
been materially prejudiced (through the forfeiture of substantive rights
or defenses) by such failure; and provided further that the failure to
notify the indemnifying party shall not relieve it from any liability that
it may have to an indemnified party otherwise than under subsection (a) or
(b) above. In case any such action is brought against any indemnified
party and it notifies the indemnifying party of the commencement thereof,
the indemnifying party will be entitled to participate therein and, to the
extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party),
and after notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof, the indemnifying party will
not be liable to such indemnified party under this Section for any legal
or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party unless such settlement includes (i) an unconditional
release of such indemnified party from all liability on any claims that
are the subject matter of such action and (ii) does not include a
statement as to or an admission of fault, culpability or failure to act by
or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute
to the amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities referred to in subsection (a) or
(b) above (i) in such proportion as is appropriate to reflect the relative
benefits received by the Issuers on the one hand and the Purchasers on the
other from the offering of the Offered Securities 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 Issuers on the one hand and the Purchasers on the other in connection
with the statements or omissions which resulted in such losses, claims,
damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Issuers on the one
hand and the Purchasers on the other shall be deemed to be in the same
26
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Issuers bear to the total discounts and
commissions received by the Purchasers from the Issuers under this
Agreement. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates
to information supplied by the Issuers or the Purchasers and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The amount paid by
an indemnified party as a result of the losses, claims, damages or
liabilities referred to in the first sentence of this subsection (d) shall
be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any
action or claim which is the subject of this subsection (d).
Notwithstanding the provisions of this subsection (d), no Purchaser shall
be required to contribute any amount in excess of the amount by which the
total discount, fees and commissions received by such Purchaser exceeds
the amount of any damages which such Purchaser has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. The Purchasers' obligations in this subsection (d) to
contribute are several in proportion to their respective purchase
obligations and not joint.
(e) The obligations of the Issuers under this Section shall be in
addition to any liability which the Issuers may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Purchaser within the meaning of the Securities Act or the
Exchange Act; and the obligations of the Purchasers under this Section
shall be in addition to any liability which the respective Purchasers may
otherwise have and shall extend, upon the same terms and conditions, to
each person, if any, who controls any Issuer within the meaning of the
Securities Act or the Exchange Act.
8. Default of Purchasers. If any Purchaser or Purchasers default in
their obligations to purchase Offered Securities hereunder and the aggregate
principal amount of Offered Securities that such defaulting Purchaser or
Purchasers agreed but failed to purchase does not exceed 10% of the total
principal amount of Offered Securities, CSFB may make arrangements satisfactory
to the Escrow Company for the purchase of such Offered Securities by other
persons, including any of the Purchasers, but if no such arrangements are made
by the Closing Date, the non-defaulting Purchasers shall be obligated severally,
in proportion to their respective commitments hereunder, to purchase the Offered
Securities that such defaulting Purchasers agreed but failed to purchase. If any
Purchaser or Purchasers so default and the aggregate principal amount of Offered
Securities with respect to which such default or defaults occur exceeds 10% of
the total principal amount of Offered Securities and arrangements satisfactory
to CSFB and the Company for the purchase of such Offered Securities by other
persons are not made within 36 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Purchaser or the
Escrow Company and the Company, except as provided in Section 9. As used in this
Agreement, the term "Purchaser" includes any person substituted for a Purchaser
under this Section. Nothing herein will relieve a defaulting Purchaser from
liability for its default.
27
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Issuers or their respective officers and of the several Purchasers set forth in
or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation, or statement as to the results thereof, made by
or on behalf of any Purchaser, the Issuers or any of their respective
representatives, officers or directors or any controlling person, and will
survive delivery of and payment for the Offered Securities. If this Agreement is
terminated pursuant to Section 8 or if for any reason the purchase of the
Offered Securities by the Purchasers is not consummated, the Issuers shall
remain responsible for the expenses to be paid or reimbursed by it pursuant to
Section 5 and the respective obligations of the Issuers and the Purchasers
pursuant to Section 7 shall remain in effect. If the purchase of the Offered
Securities by the Purchasers is not consummated for any reason, the Issuers
shall have no obligation to reimburse the Purchasers for any out-of-pocket
expenses (including fees and disbursements of counsel) incurred by them in
connection with the offering of the Offered Securities. In addition, in the
event of a Special Mandatory Redemption, the Purchasers will be entitled to
receive from the Escrow Account reimbursement for all out-of-pocket expenses
(including fees and disbursements of counsel) reasonably incurred by them in
connection with the offering of the Offered Securities, up to a maximum of
$650,000, prior to any release of funds in the Escrow Account to the Company.
10. Notices. All communications hereunder will be in writing and, if
sent to the Purchasers will be mailed, delivered or telegraphed and confirmed to
the Purchasers, c/o Credit Suisse First Boston LLC, Xxxxxx Xxxxxxx Xxxxxx, Xxx
Xxxx, X.X. 10010-3629, Attention: Transactions Advisory Group, or, if sent to
the Issuers, will be mailed, delivered or telegraphed and confirmed to them at
Horizon PCS, Inc., 00 Xxxx Xxxx Xxxxxx, Xxxxxxxxxxx, XX 00000, Attention: Chief
Financial Officer; provided, however, that any notice to a Purchaser pursuant to
Section 7 will be mailed, delivered or telegraphed and confirmed to such
Purchaser.
11. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
controlling persons referred to in Section 7, and no other person will have any
right or obligation hereunder, except that holders of Offered Securities shall
be entitled to enforce the agreements for their benefit contained in the second
and third sentences of Section 5(b) hereof against the Issuers as if such
holders were parties hereto.
12. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
13. Applicable Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York without regard to
principles of conflicts of laws.
The Issuers hereby submit to the non-exclusive jurisdiction of the Federal
and state courts in the Borough of Manhattan in The City of New York in any suit
or proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby.
28
If the foregoing is in accordance with the Purchasers' understanding of our
agreement, kindly sign and return to us one of the counterparts hereof,
whereupon it will become a binding agreement among the Issuers and the several
Purchasers in accordance with its terms.
Very truly yours,
Horizon PCS Escrow Company
By__________________________________________
Horizon PCS, Inc.
By__________________________________________
Horizon Personal Communications, Inc.
By__________________________________________
Bright Personal Communications Services, LLC
By__________________________________________
The foregoing Purchase Agreement
is hereby confirmed and accepted
as of the date first above written.
CREDIT SUISSE FIRST BOSTON LLC
XXXXXX BROTHERS INC.
By CREDIT SUISSE FIRST BOSTON LLC
By______________________
[Insert title]
29
SCHEDULE A
Horizon Personal Communications, Inc.
Bright Personal Communications Services, LLC
30
SCHEDULE B
PRINCIPAL AMOUNT OF
MANAGER OFFERED SECURITIES
------- -------------------
Credit Suisse First Boston LLC....................... $ 75,000,000
Xxxxxx Brothers Inc.................................. $ 50,000,000
------------
Total..................... $125,000,000
