Exhibit 4.2
EXECUTION COPY
ALASKA COMMUNICATIONS SYSTEMS HOLDINGS, INC.
$150,000,000
9 3/8% Senior Subordinated Notes due 2009
PURCHASE AGREEMENT
May 11, 1999
Chase Securities Inc.
CIBC World Markets Corp.
Credit Suisse First Boston Corporation
c/o Chase Securities Inc.
000 Xxxx Xxxxxx, 0xx xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Alaska Communications Systems Holdings, Inc. (formerly known as ALEC
Acquisition Corporation), a Delaware corporation (the "Company"), proposes to
issue and sell $150,000,000 aggregate principal amount of its 9 3/8% Senior
Subordinated Notes due 2009 (the "Securities"). The Securities will be issued
pursuant to an Indenture to be dated as of May 14, 1999 (the "Indenture"), among
the Company, the Guarantors (as defined below) and IBJ Whitehall Bank & Trust
Company, as trustee (the "Trustee"). The Securities will be guaranteed on an
unsecured senior subordinated basis by (i) ALEC Holdings, Inc., a Delaware
corporation ("Holdings"), (ii) each of Telephone Utilities of Alaska, Inc.,
Telephone Utilities of the Northland, Inc., PTI Communications of Alaska, Inc.,
Pacific Telecom of Alaska PCS, Inc. and Pacific Telecom Cellular of Alaska, Inc.
(collectively, "PTI"), (iii) each of ATU Communications, Inc., MACtel, Inc.,
MACtel Fairbanks, Inc., ATU Long Distance, Inc., Peninsula Cellular Services,
Inc. and Prudhoe Communications, Inc. (collectively, "ATU") and (iv) each of
Alaska Communications Systems, Inc., a wholly owned subsidiary of the Company
("ACS"), ALEC Acquisition Sub Corp., a wholly owned subsidiary of the Company
("ALEC Sub"), MACtel License Sub, Inc., MACtel Fairbanks License Sub, Inc. and
PTINet, Inc. (collectively, the "Acquiring Guarantors", and, together with
Holdings, PTI and ATU, the "Guarantors"). The Company, Holdings and the
Acquiring Guarantors hereby confirm their agreement with Chase Securities Inc.
("CSI"), CIBC World Markets Corp. and Credit Suisse First Boston Corporation
(together with CSI, the "Initial Purchasers") concerning the purchase of the
Securities from the Company by the several Initial Purchasers.
2
The Securities will be offered and sold to the Initial Purchasers
without being registered under the Securities Act of 1933, as amended (the
"Securities Act"), in reliance upon an exemption therefrom. The Company has
prepared a preliminary offering memorandum dated April 23, 1999 (the
"Preliminary Offering Memorandum") and will prepare an offering memorandum dated
the date hereof (the "Offering Memorandum") setting forth information concerning
the Company and the Securities. Copies of the Preliminary Offering Memorandum
have been, and copies of the Offering Memorandum will be, delivered by the
Company to the Initial Purchasers pursuant to the terms of this Agreement. Any
references herein to the Preliminary Offering Memorandum and the Offering
Memorandum shall be deemed to include all amendments and supplements thereto,
unless otherwise noted. The Company hereby confirms that it has authorized the
use of the Preliminary Offering Memorandum and the Offering Memorandum in
connection with the offering and resale of the Securities by the Initial
Purchasers in accordance with Section 2.
Holders of the Securities (including the Initial Purchasers and
their direct and indirect transferees) will be entitled to the benefits of an
Exchange and Registration Rights Agreement, substantially in the form attached
hereto as Annex A (the "Registration Rights Agreement"), pursuant to which the
Company and the Guarantors will agree to file with the Securities and Exchange
Commission (the "Commission") (i) a registration statement under the Securities
Act (the "Exchange Offer Registration Statement") registering an issue of senior
subordinated notes of the Company (the "Exchange Securities") which are
identical in all material respects to the Securities (except that the Exchange
Securities will not contain terms with respect to transfer restrictions) and
(ii) under certain circumstances, a shelf registration statement pursuant to
Rule 415 under the Securities Act (the "Shelf Registration Statement").
The Securities are being offered in conjunction with the Company's
acquisition of (a) all the capital stock of each of the entities comprising PTI
for $408,500,000 (subject to certain adjustments) pursuant to the Purchase
Agreement (the "PTI Purchase Agreement") dated as of August 14, 1998, as amended
as of April 22, 1999, among ALEC Sub (as assignee of the Company), CenturyTel of
the Northwest, Inc. (formerly known as Pacific Telecom, Inc.) and CenturyTel
Wireless, Inc. (formerly known as Century Cellunet, Inc.) and (b) certain of the
assets and liabilities of the Anchorage Telephone Utility, all the capital stock
of each of the entities comprising ATU and certain minority interests in Alaska
Network Systems, Inc., Alaskan Choice Television, L.L.C. and Internet Alaska,
Inc. for $295,000,000 (subject to certain adjustments) pursuant to the Asset
Purchase Agreement (the "ATU Purchase Agreement") dated as of October 20, 1998,
between ACS and the Municipality of Anchorage.
Capitalized terms used but not defined herein shall have the meanings
given to such terms in the Offering Memorandum.
1. Representations, Warranties and Agreements of the Company and the
Guarantors. The Company, Holdings and each of the Acquiring Guarantors represent
and warrant to, and agree with, the several Initial Purchasers on and as of the
date hereof that:
(a) Each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its respective date, did not, and on the Closing Date
(as defined in Section 3) the Offering Memorandum will not, contain any
untrue statement of a material
3
fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that
the Company, Holdings and the Acquiring Guarantors make no representation
or warranty as to information contained in or omitted from the Preliminary
Offering Memorandum or the Offering Memorandum in reliance upon and in
conformity with written information relating to the Initial Purchasers
furnished to the Company by or on behalf of any Initial Purchaser
specifically for use therein (the "Initial Purchasers' Information").
(b) Each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its respective date, contains all of the information
that, if requested by a prospective purchaser of the Securities, would be
required to be provided to such prospective purchaser pursuant to Rule
144A(d)(4) under the Securities Act.
(c) Assuming the accuracy of the representations and warranties of
the Initial Purchasers contained in Section 2 and their compliance with
the agreements set forth therein, it is not necessary, in connection with
the issuance and sale of the Securities to the Initial Purchasers and the
offer, initial resale and delivery of the Securities by the Initial
Purchasers in the manner contemplated by this Agreement and the Offering
Memorandum, to register the Securities under the Securities Act or to
qualify the Indenture under the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act").
(d) The Company and each of the Guarantors have been duly
incorporated and are validly existing as corporations in good standing
under the laws of their respective jurisdictions of incorporation, are
duly qualified to do business and are in good standing as foreign
corporations in each jurisdiction in which their respective ownership or
lease of property or the conduct of their respective businesses requires
such qualification, and have all power and authority necessary to own or
hold their respective properties and to conduct the businesses in which
they are engaged, except where the failure to so qualify or have such
power or authority could not, singularly or in the aggregate, be
reasonably expected to have a material adverse effect on the condition
(financial or otherwise), results of operations or business of the Company
and the Guarantors taken as a whole (a "Material Adverse Effect").
(e) As of the Closing Date, the Company will have an authorized
capitalization as set forth in the Offering Memorandum under the heading
"Capitalization"; all of the outstanding shares of capital stock of the
Company have been duly and validly authorized and issued and are fully
paid and non-assessable; and the capital stock of the Company conforms in
all material respects to the description thereof contained in the Offering
Memorandum. All of the outstanding shares of capital stock of each of the
Guarantors have been duly and validly authorized and issued and are fully
paid and non-assessable; all of the shares of capital stock of the Company
are owned by Holdings, and Holdings engages in no business other than
holding the outstanding shares of capital stock of the Company; as of the
Closing Date, all of the shares of capital stock of each of the Guarantors
other than Holdings will be owned directly or indirectly by the Company,
free and clear of any lien, charge, encumbrance, security interest,
restriction upon voting or transfer (except for regulatory restrictions
created under the Communications Act of 1934,
4
as amended by the Telecommunications Act of 1996, as amended (the
"Communications Act"), and the rules and regulations of the Federal
Communications Commission (the "FCC") and the Alaska Public Utilities
Commission) or any other claim of any third party, except as created
pursuant to the Credit Agreement (the "Credit Agreement") to be entered
into among Holdings, the Company, the lenders named therein, The Chase
Manhattan Bank, as Administrative Agent and Collateral Agent, Credit
Suisse First Boston Corporation, as Documentation Agent, and Canadian
Imperial Bank of Commerce, as Syndication Agent. As of the Closing Date,
the Company will have no subsidiaries other than those entities listed on
Exhibit A hereto.
(f) The Company, Holdings and each of the Acquiring Guarantors have
full right, power and authority to execute and deliver this Agreement, and
the Company, Holdings and each of the Guarantors have full power and
authority to execute and deliver the Indenture, the Registration Rights
Agreement, the Securities (in the case of the Company only), the PTI
Purchase Agreement, the ATU Purchase Agreement, the Credit Agreement and
related agreements and the Closing Date Letter Agreement (as defined in
Section 5(r)) (collectively, the "Transaction Documents") and to perform
their respective obligations hereunder and thereunder; and all corporate
action required to be taken for the due and proper authorization,
execution and delivery of each of the Transaction Documents and the
consummation of the transactions contemplated thereby have been, or, in
the case of the entities comprising PTI and ATU, will be as of the Closing
Date, duly and validly taken.
(g) This Agreement has been duly authorized, executed and delivered
by the Company, Holdings and each of the Acquiring Guarantors and
constitutes a valid and legally binding agreement of the Company, Holdings
and each of the Acquiring Guarantors, and, as of the Closing Date, will be
duly authorized by each of the entities comprising PTI and ATU, and will
constitute a valid and legally binding agreement of each of such entities
upon the execution and delivery of the Closing Date Letter Agreement.
(h) The Indenture has been duly authorized by the Company, Holdings
and each of the Acquiring Guarantors, and, as of the Closing Date will be
duly authorized by each of the entities comprising PTI and ATU, and, when
duly executed and delivered in accordance with its terms by each of the
parties thereto, will constitute a valid and legally binding agreement of
the Company and each of the Guarantors enforceable against the Company and
each of the Guarantors in accordance with its terms, except as may be
limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and by general equitable principles (whether considered
in a proceeding in equity or at law). On the Closing Date, the Indenture
will conform in all material respects to the requirements of the Trust
Indenture Act and the rules and regulations of the Commission applicable
to an indenture which is qualified thereunder.
(i) The Securities have been duly authorized by the Company,
Holdings and each of the Acquiring Guarantors, and, as of the Closing Date
will be duly authorized by each of the entities comprising PTI and ATU,
and, when duly executed, authenticated, issued
5
and delivered as provided in the Indenture and paid for as provided
herein, will have been duly and validly issued and outstanding and will
constitute valid and legally binding obligations of the Company as issuer,
and each of the Guarantors, as guarantors, entitled to the benefits of the
Indenture and enforceable against the Company, as issuer, and each of the
Guarantors, as guarantors, in accordance with their terms, except as may
be limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and by general equitable principles (whether considered
in a proceeding in equity or at law).
(j) The Registration Rights Agreement has been duly authorized by
the Company, Holdings and each of the Acquiring Guarantors, and, as of the
Closing Date will be duly authorized by each of the entities comprising
PTI and ATU, and, when duly executed and delivered in accordance with its
terms by each of the parties thereto, will constitute a valid and legally
binding agreement of the Company and each of the Guarantors enforceable
against the Company and each of the Guarantors in accordance with its
terms, except as may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
affecting creditors' rights generally and by general equitable principles
(whether considered in a proceeding in equity or at law) and except to the
extent that the indemnification or contribution provisions contained
therein may be unenforceable.
(k) The PTI Purchase Agreement and the ATU Purchase Agreement have
been duly authorized, executed and delivered by the Company and each of
the Guarantors party thereto and each such agreement constitutes a valid
and legally binding agreement of the Company and each of the Guarantors
party thereto, enforceable against the Company and each of the Guarantors
party thereto in accordance with its terms, except as may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting creditors' rights generally
and by general equitable principles (whether considered in a proceeding in
equity or at law). The Credit Agreement and related agreements have been
duly authorized by the Company, Holdings and each of the Acquiring
Guarantors party thereto, and, as of the Closing Date, will be duly
authorized by each of the entities comprising PTI and ATU party thereto,
and, when duly executed and delivered in accordance with its terms by each
of the parties thereto, each such agreement will constitute a valid and
legally binding agreement of the Company and each of the Guarantors party
thereto, enforceable against the Company and each of the Guarantors party
thereto in accordance with its terms, except as may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting creditors' rights generally
and by general equitable principles (whether considered in a proceeding in
equity or at law).
(l) The Closing Date Letter Agreement has been or, as of the Closing
Date, will be, duly authorized by each of the entities comprising PTI and
ATU and, when duly executed and delivered in accordance with its terms by
each of the parties thereto, will constitute a valid and legally binding
agreement of each of the entities comprising PTI and ATU enforceable
against each such entity in accordance with its terms, except as may be
limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and by general
6
equitable principles (whether considered in a proceeding in equity or at
law) and except to the extent that the indemnification or contribution
provisions contained therein may be unenforceable.
(m) Each Transaction Document conforms in all material respects to
the description thereof contained in the Offering Memorandum.
(n) The execution, delivery and performance by the Company and each
of the Guarantors of each of the Transaction Documents to which each is a
party, the issuance, authentication, sale and delivery of the Securities
and compliance by the Company and each of the Guarantors with the terms
thereof and the consummation of the transactions contemplated by the
Transaction Documents will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, or, except as created pursuant to the Credit Agreement, result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of the Guarantors pursuant to any
material indenture, mortgage, deed of trust, loan agreement or other
material agreement or instrument to which the Company or any of the
Guarantors is a party or by which the Company or any of the Guarantors is
bound or to which any of the property or assets of the Company or any of
the Guarantors is subject, nor will such actions result in any violation
of the provisions of the charter or by-laws of the Company or any of the
Guarantors or any statute or any judgment, order, decree, rule or
regulation of any court or arbitrator or governmental agency or body
having jurisdiction over the Company or any of the Guarantors or any of
their properties or assets; and no consent, approval, authorization or
order of, or filing or registration with, any such court or arbitrator or
governmental agency or body under any such statute, judgment, order,
decree, rule or regulation is required for the execution, delivery and
performance by the Company and each of the Guarantors of each of the
Transaction Documents to which each is a party, the issuance,
authentication, sale and delivery of the Securities and compliance by the
Company and each of the Guarantors with the terms thereof and the
consummation of the transactions contemplated by the Transaction
Documents, except for such consents, approvals, authorizations, filings,
registrations or qualifications (i) which shall have been obtained or made
prior to the Closing Date, (ii) as may be required to be obtained or made
under the Securities Act and applicable state securities laws as provided
in the Registration Rights Agreement and (iii) the failure of which to
obtain would not materially restrain, prevent or impose material
burdensome conditions on any of the transactions contemplated by any of
the Transaction Documents.
(o) Deloitte & Touche LLP are independent certified public
accountants with respect to the Company and the Guarantors within the
meaning of Rule 101 of the Code of Professional Conduct of the American
Institute of Certified Public Accountants (the "AICPA") and the
interpretations and rulings thereunder. The historical financial
statements (including the related notes) contained in the Offering
Memorandum comply in all material respects with the requirements
applicable to a registration statement on Form S-1 under the Securities
Act (except that certain supporting schedules are omitted); such financial
statements have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods covered
thereby and fairly present the financial position of the entities
purported to be covered thereby at the
7
respective dates indicated and the results of their operations and their
cash flows for the respective periods indicated; and the financial
information contained in the Offering Memorandum under the headings
"Summary--Summary Pro Forma Combined Financial and Operating Data",
"Summary--Summary Combined Historical and Financial Data--PTI Alaska",
"Summary--Summary Historical Consolidated Financial Data--ATU", "Pro Forma
Combined Financial and Operating Data", "Selected Historical Combined
Financial Data--PTI Alaska", "Selected Historical Consolidated Financial
Data--ATU" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" are derived from the accounting
records of the Company, PTI and ATU and fairly present the information
purported to be shown thereby. The pro forma financial information
contained in the Offering Memorandum has been prepared on a basis
consistent with the historical financial statements contained in the
Offering Memorandum (except for the pro forma adjustments specified
therein), includes all material adjustments to the historical financial
information required by Rule 11-02 of Regulation S-X under the Securities
Act and the Securities Exchange Act of 1934 (the "Exchange Act") to
reflect the transactions described in the Offering Memorandum, gives
effect to assumptions made on a reasonable basis and fairly presents the
historical and proposed transactions contemplated by the Offering
Memorandum and the Transaction Documents; provided that no representation
is made with respect to the compliance of the calculation of "Adjusted
EBITDA" with the requirements of Rule 11-02 of Regulation S-X under the
Exchange Act. The other historical financial and statistical information
and data included in the Offering Memorandum are, in all material
respects, fairly presented in accordance with generally accepted
accounting principles.
(p) There are no legal or governmental proceedings pending to which
the Company or any of the Guarantors is a party or of which any property
or assets of the Company or any of the Guarantors is the subject which,
(i) except as disclosed in the Offering Memorandum, singularly or in the
aggregate, if determined adversely to the Company or any of the
Guarantors, could reasonably be expected to have a Material Adverse Effect
or (ii) question the validity or enforceability of any of the Transaction
Documents or any action taken or to be taken pursuant thereto; and to the
best knowledge of the Company, Holdings and the Acquiring Guarantors, no
such proceedings are threatened or contemplated by governmental
authorities or threatened by others.
(q) No action has been taken and no statute, rule, regulation or
order has been enacted, adopted or issued by any governmental agency or
body which prevents the issuance of the Securities or suspends the sale of
the Securities in any jurisdiction; no injunction, restraining order or
order of any nature by any federal or state court of competent
jurisdiction has been issued with respect to the Company or any of the
Guarantors which would prevent or suspend the issuance or sale of the
Securities or the use of the Preliminary Offering Memorandum or the
Offering Memorandum in any jurisdiction; no action, suit or proceeding is
pending against or, to the best knowledge of the Company, Holdings and
each of the Acquiring Guarantors, threatened against or affecting the
Company or any of the Guarantors before any court or arbitrator or any
governmental agency, body or official, domestic or foreign, which could
reasonably be expected to interfere with or adversely affect the issuance
of the Securities or in any manner draw into question the validity or
enforceability of any of the Transaction
8
Documents or any action taken or to be taken pursuant thereto; and neither
the Company nor any of the Guarantors has received any requests by any
securities authority in any jurisdiction for additional information to be
included in the Preliminary Offering Memorandum and the Offering
Memorandum.
(r) Neither the Company nor any of the Guarantors is (i) in
violation of its charter or by-laws, (ii) in default in any respect, and
no event has occurred which, with notice or lapse of time or both, would
constitute such a default, in the due performance or observance of any
term, covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which it is a
party or by which it is bound or to which any of its property or assets is
subject, other than any such default as would not, singularly or in the
aggregate, be reasonably expected to have a Material Adverse Effect or
(iii) in violation in any respect of any law, ordinance, governmental
rule, regulation or court decree to which it or its property or assets are
be subject, other than any such violation as would not, singularly or in
the aggregate, be reasonably expected to have a Material Adverse Effect.
(s) The Company and each of the Guarantors possess all licenses,
certificates, authorizations and permits issued by, and have made all
declarations and filings with, the appropriate federal, state or foreign
regulatory agencies or bodies which are necessary or, in the reasonable
judgment of the Company, desirable for the ownership of their respective
properties or the conduct of their respective businesses as described in
the Offering Memorandum, except where the failure to possess or make the
same would not, singularly or in the aggregate, have a Material Adverse
Effect, and, except as disclosed in the Offering Memorandum, neither the
Company nor any of the Guarantors has received notification of any
revocation or modification of any such license, certificate, authorization
or permit or has any reason to believe that any such license, certificate,
authorization or permit will not be renewed in the ordinary course.
(t) The Company and each of the Guarantors have filed all federal,
state, local and foreign income and franchise tax returns required to be
filed through the date hereof and have paid all taxes due thereon (other
than those taxes being contested in good faith or those taxes currently
payable without penalty or interest, in each case for which adequate
reserves have been provided in accordance with generally accepted
accounting principles, and other than to the extent the failure to do so
could not reasonably be expected to result in a Material Adverse Effect),
and no tax deficiency has been determined adversely to the Company or any
of the Guarantors which has had (nor does the Company, Holdings or any of
the Acquiring Guarantors have any knowledge of any tax deficiency which,
if determined adversely to the Company or any of the Guarantors, could
reasonably be expected to have) a Material Adverse Effect.
(u) None of the Company or any of the Guarantors is (i) an
"investment company" or a company "controlled by" an investment company
within the meaning of the Investment Company Act of 1940, as amended (the
"Investment Company Act"), and the rules and regulations of the Commission
thereunder or (ii) a "holding company" or a "subsidiary company" of a
holding company or an "affiliate" thereof within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
9
(v) The Company and each of the Guarantors maintain a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general
or specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(w) The Company and each of the Guarantors have insurance covering
their respective properties, operations, personnel and businesses, which
insurance is in amounts and insures against such losses and risks as are,
in the reasonable judgment of the Company, adequate to protect the
Company, the Guarantors and their respective businesses. None of the
Company or any of the Guarantors has received notice from any insurer or
agent of such insurer that capital improvements or other expenditures are
required or necessary to be made in order to continue such insurance.
(x) The Company and each of the Guarantors own or possess adequate
rights to use all material patents, patent applications, trademarks,
service marks, trade names, trademark registrations, service mark
registrations, copyrights, licenses and know-how (including trade secrets
and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures) necessary for the conduct of their
respective businesses; and the conduct of their respective businesses will
not conflict in any respect with, and the Company and the Guarantors have
not received any notice of any claim of conflict with, any such rights of
others which conflict, singularly or in the aggregate, if the subject of
an unfavorable decision, ruling or finding, would result in a Material
Adverse Effect.
(y) The Company and each of the Guarantors have good and marketable
title in fee simple to, or have valid rights to lease or otherwise use,
all items of real and personal property which are material to the business
of the Company and the Guarantors, in each case free and clear of all
liens, encumbrances, claims and defects and imperfections of title except
such as (i) do not materially interfere with the use made and proposed to
be made of such property by the Company and the Guarantors, (ii) could not
reasonably be expected to have a Material Adverse Effect, (iii) arise
under the Credit Agreement or (iv) are permitted under the Indenture.
(z) No labor disturbance by or dispute with the employees of the
Company or any of the Guarantors exists or, to the best knowledge of the
Company, Holdings and the Acquiring Guarantors, is contemplated or
threatened.
(aa) No "prohibited transaction" (as defined in Section 406 of the
Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"), or Section
4975 of the Internal Revenue Code of 1986, as amended from time to time
(the "Code")) or "accumulated funding deficiency" (as defined in Section
302 of ERISA) or any of the events set forth in
10
Section 4043(b) of ERISA (other than events with respect to which the
30-day notice requirement under Section 4043 of ERISA has been waived) has
occurred with respect to any employee benefit plan of the Company or any
of the Guarantors which could reasonably be expected to have a Material
Adverse Effect; each such employee benefit plan is in compliance in all
material respects with applicable law, including ERISA and the Code; the
Company and each of the Guarantors have not incurred and do not expect to
incur liability under Title IV of ERISA with respect to the termination
of, or withdrawal from, any pension plan for which the Company or any of
the Guarantors would have any liability; and each such pension plan 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 could reasonably be expected to cause
the loss of such qualification.
(bb) There has been no storage, generation, transportation,
handling, treatment, disposal, discharge, emission or other release of any
kind of toxic or other wastes or other hazardous substances by, due to or
caused by the Company or any of the Guarantors (or, to the best knowledge
of the Company, Holdings and the Acquiring Guarantors, any other entity
(including any predecessor) for whose acts or omissions the Company or any
of the Guarantors is or could reasonably be expected to be liable) upon
any of the property now or previously owned or leased by the Company or
any of the Guarantors, or upon any other property, in violation of any
statute or any ordinance, rule, regulation, order, judgment, decree or
permit or which would, under any statute or any ordinance, rule (including
rule of common law), regulation, order, judgment, decree or permit, give
rise to any liability, except for any violation or liability that could
not reasonably be expected to have, singularly or in the aggregate with
all such violations and liabilities, a Material Adverse Effect; and there
has been no disposal, discharge, emission or other release of any kind
onto such property or into the environment surrounding such property of
any toxic or other wastes or other hazardous substances with respect to
which the Company, Holdings or any of the Acquiring Guarantors has
knowledge, except for any such disposal, discharge, emission or other
release of any kind which could not reasonably be expected to have,
singularly or in the aggregate with all such discharges and other
releases, a Material Adverse Effect.
(cc) None of the Company or, to the best knowledge of the Company,
Holdings and each of the Acquiring Guarantors, any director, officer,
agent, employee or other person associated with or acting on behalf of the
Company or any of the Guarantors has (i) used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expense
relating to political activity; (ii) made any unlawful payment to any
foreign or domestic government official or employee from corporate funds;
(iii) violated or is in violation of any provision of the Foreign Corrupt
Practices Act of 1977; or (iv) made any unlawful bribe, rebate, payoff,
influence payment, kickback or other unlawful payment.
(dd) On and immediately after the Closing Date, the Company and each
of the Guarantors (after giving effect to the issuance of the Securities
and to the other transactions related thereto as described in the Offering
Memorandum) will be Solvent. As used in this paragraph, the term "Solvent"
means, with respect to a particular date, that
11
on such date (i) the fair value and present fair saleable value of the
assets of the Company or such Guarantor, as the case may be, exceeds: (x)
the total liabilities (including contingent, subordinated, unmatured and
unliquidated liabilities) of the Company or such Guarantor, as the case
may be, and (y) the amount required to pay such liabilities as they become
absolute and matured in the normal course of business; (ii) the Company or
such Guarantor, as the case may be, has the ability to pay its debts and
liabilities (including contingent, subordinated, unmatured and
unliquidated liabilities) as they become absolute and matured in the
normal course of business; and (iii) neither the Company nor such
Guarantor, as the case may be, has an unreasonably small amount of capital
with which to conduct its business after giving due consideration to the
prevailing practice in the industry in which the Company or such
Guarantor, as the case may be, is engaged. In computing the amount of such
contingent liabilities at any time, it is intended that such liabilities
will be computed at the amount that, in the light of all the facts and
circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
(ee) Except as described in the Offering Memorandum, there are no
outstanding subscriptions, rights, warrants, calls or options to acquire,
or instruments convertible into or exchangeable for, or agreements or
understandings with respect to the sale or issuance of, any shares of
capital stock of or other equity or other ownership interest in the
Company or any of the Guarantors other than those provided in the
agreement dated as of April 8, 1999, by and among Chamer Corporation, Fox
Xxxxx & Company, LLC and Holdings, as amended.
(ff) None of the Company or any of the Guarantors owns any "margin
securities" as that term is defined in Regulation U of the Board of
Governors of the Federal Reserve System (the "Federal Reserve Board"), and
none of the proceeds of the sale of the Securities will be used, directly
or indirectly, for the purpose of purchasing or carrying any margin
security, for the purpose of reducing or retiring any indebtedness which
was originally incurred to purchase or carry any margin security or for
any other purpose which would cause any of the Securities to be considered
a "purpose credit" within the meanings of Regulation T, U or X of the
Federal Reserve Board.
(gg) None of the Company or any of the Guarantors is a party to any
contract, agreement or understanding with any person that would give rise
to a valid claim against the Company, the Guarantors or the Initial
Purchasers for a brokerage commission, finder's fee or like payment in
connection with the offering and sale of the Securities.
(hh) The Securities satisfy the eligibility requirements of Rule
144A(d)(3) under the Securities Act.
(ii) None of the Company, any of the Guarantors, any of their
respective affiliates or any person (other than the Initial Purchasers or
their affiliates) acting on its or their behalf has engaged or will engage
in any directed selling efforts (as such term is defined in Regulation S
under the Securities Act ("Regulation S")), and all such persons have
complied and will comply with the offering restrictions requirement of
Regulation S to the extent applicable.
12
(jj) None of the Company, any of the Guarantors or any of their
respective affiliates has, directly or through any agent, sold, offered
for sale, solicited offers to buy or otherwise negotiated in respect of,
any security (as such term is defined in the Securities Act), which is or
will be integrated with the sale of the Securities in a manner that would
require registration of the Securities under the Securities Act.
(kk) None of the Company, any of the Guarantors or any of their
respective affiliates or any other person acting on its or their behalf
has engaged, in connection with the offering of the Securities, in any
form of general solicitation or general advertising within the meaning of
Rule 502(c) under the Securities Act.
(ll) There are no securities of the Company or the Guarantors
registered under the Exchange Act, or listed on a national securities
exchange or quoted in a U.S. automated inter-dealer quotation system.
(mm) None of the Company or any of the Guarantors has taken or will
take, directly or indirectly, any action prohibited by Regulation M under
the Exchange Act in connection with the offering of the Securities.
(nn) No forward-looking statement (within the meaning of Section 27A
of the Securities Act and Section 21E of the Exchange Act) contained in
the Preliminary Offering Memorandum or the Offering Memorandum has been
made or reaffirmed without a reasonable basis or has been disclosed other
than in good faith.
(oo) None of the Company or any of the Guarantors does business with
the government of Cuba or with any person or affiliate located in Cuba
within the meaning of Florida Statutes Section 517.075.
(pp) The Company has conducted a complete systems assessment of the
risk that the computer hardware and software used by the Company and the
Guarantors may be unable to recognize and properly execute date-sensitive
functions involving certain dates prior to and any dates after December
31, 1999 (the "Year 2000 Problem"), and has determined that such risk will
be remedied by September 30, 1999 without material expense; and the
Company believes, after due inquiry, that each supplier, vendor, customer
or financial service organization used or serviced by the Company and the
Guarantors has remedied or will remedy on a timely basis the Year 2000
Problem, although the failure of any supplier, vendor, customer or
financial service organization that has a material relationship with the
Company to remedy the Year 2000 Problem on a timely basis could have a
Material Adverse Effect.
(qq) Since the date as of which information is given in the Offering
Memorandum, except as otherwise stated therein, (i) there has been no
material adverse change or any development involving a material adverse
change in the condition, financial or otherwise, or in the earnings,
business affairs or management of the Company and the Guarantors, taken as
a whole, whether or not arising in the ordinary course of business, (ii)
the Company and the Guarantors, have not incurred any material liability
or obligation, direct or contingent, other than in the ordinary course of
business, (iii) the
13
Company and the Guarantors, taken as a whole, have not entered into any
material transaction other than in the ordinary course of business and
(iv) there has not been any change in the capital stock or long-term debt
of the Company or any of the Guarantors, or any dividend or distribution
of any kind declared, paid or made by the Company or any of the Guarantors
on any class of their respective capital stock.
(rr) Except with respect to any matter that, singularly or in the
aggregate, could not reasonably be expected to result in a Material
Adverse Effect, none of the Company or any of the Guarantors (i) has
failed to comply with any law, rule, regulation, code, ordinance, order,
decree, judgment, injunction, notice or binding agreement issued,
promulgated or entered into by any governmental authority (including but
not limited to the FCC and the Alaskan Public Utilities Commission)
relating in any way to the offering or provision of communications
(collectively, "Communications Laws") or to obtain, maintain or comply
with any permit, license or other approval required under any
Communications Law, (ii) has become subject to any liability, contingent
or otherwise (including any liability for damages, costs, fines, penalties
or indemnities) directly or indirectly resulting from or based upon (w)
the violation of any Communications Law, (x) the generation or use of
communications, (y) exposure to communications or radio frequency
emissions or (z) any contract, agreement or other consensual agreement
pursuant to which liability is assumed or imposed with respect to any of
the foregoing (collectively, "Communication Liabilities"), (iii) has
received notice of any claim with respect to any Communication Liability
or (iv) knows of any basis for any Communication Liability.
2. Purchase and Resale of the Securities. (a) On the basis of the
representations, warranties and agreements contained herein, and subject to the
terms and conditions set forth herein, the Company agrees to issue and sell to
each of the Initial Purchasers, severally and not jointly, and each of the
Initial Purchasers, severally and not jointly, agrees to purchase from the
Company, the principal amount of Securities set forth opposite the name of such
Initial Purchaser on Schedule 1 hereto at a purchase price equal to 97% of the
principal amount thereof. The Company shall not be obligated to deliver any of
the Securities except upon payment for all of the Securities to be purchased as
provided herein.
(b) The Initial Purchasers have advised the Company that they
propose to offer the Securities for resale upon the terms and subject to the
conditions set forth herein and in the Offering Memorandum. Each Initial
Purchaser, severally and not jointly, represents, warrants and agrees that (i)
it is purchasing the Securities pursuant to a private sale exempt from
registration under the Securities Act, (ii) it has not solicited offers for, or
offered or sold, and will not solicit offers for, or offer or sell, the
Securities by means of any form of general solicitation or general advertising
within the meaning of Rule 502(c) of Regulation D under the Securities Act
("Regulation D") or in any manner involving a public offering within the meaning
of Section 4(2) of the Securities Act and (iii) it has solicited and will
solicit offers for the Securities only from, and has offered or sold and will
offer, sell or deliver the Securities, as part of their initial offering, only
(A) within the United States to persons whom it reasonably believes to be
qualified institutional buyers ("Qualified Institutional Buyers"), as defined in
Rule 144A under the Securities Act ("Rule 144A"), or if any such person is
buying for one or more institutional accounts for which such person is acting as
fiduciary or agent, only when such person has
14
represented to it that each such account is a Qualified Institutional Buyer to
whom notice has been given that such sale or delivery is being made in reliance
on Rule 144A and in each case, in transactions in accordance with Rule 144A and
(B) outside the United States to persons other than U.S. persons in reliance on
Regulation S.
(c) In connection with the offer and sale of Securities in reliance
on Regulation S, each Initial Purchaser, severally and not jointly, represents,
warrants and agrees that:
(i) the 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 pursuant to an exemption from,
or in transactions not subject to, the registration requirements of the
Securities Act;
(ii) such Initial Purchaser has offered and sold the Securities, and
will offer and sell the Securities, (A) as part of their distribution at
any time and (B) otherwise until 40 days after the later of the
commencement of the offering of the Securities and the Closing Date, only
in accordance with Regulation S or Rule 144A or any other available
exemption from registration under the Securities Act;
(iii) none of such Initial Purchasers or any of its affiliates or
any other person acting on its or their behalf has engaged or will engage
in any directed selling efforts with respect to the Securities, and all
such persons have complied and will comply with the offering restriction
requirements of Regulation S;
(iv) at or prior to the confirmation of sale of any Securities sold
in reliance on Regulation S, it will have sent to each distributor, dealer
or other person receiving a selling concession, fee or other remuneration
that purchases 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, as amended (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 commencement of the offering of the Securities and the
date of original issuance of the Securities, except in accordance
with Regulation S or Rule 144A or any other available exemption from
registration under the Securities Act. Terms used above have the
meanings given to them by Regulation S."; and
(v) it has not and will not enter into any contractual arrangement
with any distributor with respect to the distribution of the Securities,
except with its affiliates or with the prior written consent of the
Company.
Terms used in this Section 2(c) have the meanings given to them by Regulation S.
(d) Each Initial Purchaser, severally and not jointly, represents,
warrants and agrees that (i) it has not offered or sold and prior to the date
six months after the Closing Date will not offer or sell any Securities to
persons in the United Kingdom except to persons whose
15
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 complied and will comply with
all applicable provisions of the Financial Services Act 1986 and the Public
Offers of Securities Regulations 1995 with respect to anything done by it in
relation to the Securities in, from or otherwise involving the United Kingdom;
and (iii) it has only issued or passed on and will only issue or pass on in the
United Kingdom any document received by it in connection with the issue of the
Securities to a person who is of a kind described in Article 11(3) of the
Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1996
or is a person to whom such document may otherwise lawfully be issued or passed
on.
(e) Each Initial Purchaser, severally and not jointly, agrees that,
prior to or simultaneously with the confirmation of sale by such Initial
Purchaser to any purchaser of any of the Securities purchased by such Initial
Purchaser from the Company pursuant hereto, such Initial Purchaser shall furnish
to that purchaser a copy of the Offering Memorandum (and any amendment or
supplement thereto that the Company shall have furnished to such Initial
Purchaser prior to the date of such confirmation of sale). In addition to the
foregoing, each Initial Purchaser acknowledges and agrees that the Company and,
for purposes of the opinions to be delivered to the Initial Purchasers pursuant
to Sections 5(d) and 5(e), counsel for the Company and for the Initial
Purchasers, respectively, may rely upon the accuracy of the representations and
warranties of the Initial Purchasers and their compliance with their agreements
contained in this Section 2, and each Initial Purchaser hereby consents to such
reliance.
(f) The Company, Holdings and each of the Acquiring Guarantors
acknowledges and agrees, and, as of the Closing Date, pursuant to the Closing
Date Letter Agreement, each of the entities comprising PTI and ATU acknowledges
and agrees, that the Initial Purchasers may sell Securities to any affiliate of
an Initial Purchaser and that any such affiliate may sell Securities purchased
by it to an Initial Purchaser.
3. Delivery of and Payment for the Securities. (a) Delivery of and
payment for the Securities shall be made at the offices of Wachtell, Lipton,
Xxxxx & Xxxx, New York, New York, or at such other place as shall be agreed upon
by the Initial Purchasers and the Company, at 10:00 a.m., New York City time, on
May 14, 1999, or at such other time or date, not later than seven full business
days thereafter, as shall be agreed upon by the Initial Purchasers and the
Company (such date and time of payment and delivery being referred to herein as
the "Closing Date").
(b) On the Closing Date, payment of the purchase price for the
Securities shall be made to the Company by wire or book-entry transfer of
same-day funds to such account or accounts as the Company shall specify prior to
the Closing Date or by such other means as the parties hereto shall agree prior
to the Closing Date against delivery to the Initial Purchasers of the
certificates evidencing the Securities. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a further
condition of the obligations of the Initial Purchasers hereunder. Upon delivery,
the Securities shall be in global form, registered in such names and in such
denominations as CSI on behalf of the Initial Purchasers shall have requested in
writing not less than two full business days prior to the Closing Date. The
Company agrees to
16
make one or more global certificates evidencing the Securities available for
inspection by CSI on behalf of the Initial Purchasers in New York, New York at
least 24 hours prior to the Closing Date.
4. Further Agreements of the Company and the Guarantors. The
Company, Holdings and each of the Acquiring Guarantors agree, and, as of the
Closing Date, pursuant to the Closing Date Letter Agreement, each of the
entities comprising PTI and ATU agrees, with each of the several Initial
Purchasers:
(a) at all times prior to completion of the resale of the Securities
by the Initial Purchasers, to advise the Initial Purchasers promptly and,
if reasonably requested, confirm such advice in writing, of the happening
of any event which makes any statement of a material fact made in the
Offering Memorandum untrue or which requires the making of any additions
to or changes in the Offering Memorandum (as amended or supplemented from
time to time) in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; to advise the
Initial Purchasers promptly of any order preventing or suspending the use
of the Preliminary Offering Memorandum or the Offering Memorandum, of any
suspension of the qualification of the Securities for offering or sale in
any jurisdiction and of the initiation or threatening of any proceeding
for any such purpose; and to use its reasonable best efforts to prevent
the issuance of any such order preventing or suspending the use of the
Preliminary Offering Memorandum or the Offering Memorandum or suspending
any such qualification and, if any such suspension is issued, to use its
reasonable best efforts to obtain the lifting thereof at the earliest
possible time;
(b) to furnish promptly to each of the Initial Purchasers and
counsel for the Initial Purchasers, without charge, as many copies of the
Preliminary Offering Memorandum and the Offering Memorandum (and any
amendments or supplements thereto) as may be reasonably requested;
(c) prior to making any amendment or supplement to the Offering
Memorandum, to furnish a copy thereof to each of the Initial Purchasers
and counsel for the Initial Purchasers and not to effect any such
amendment or supplement to which the Initial Purchasers shall reasonably
object by notice to the Company after a reasonable period to review;
(d) if, at any time prior to completion of the resale of the
Securities by the Initial Purchasers, any event shall occur or condition
exist as a result of which it is necessary, in the opinion of counsel for
the Initial Purchasers or counsel for the Company, to amend or supplement
the Offering Memorandum in order that the Offering Memorandum will not
include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of
the circumstances existing at the time it is delivered to a purchaser, not
misleading, or if it is necessary to amend or supplement the Offering
Memorandum to comply with applicable law, to promptly prepare such
amendment or supplement as may be necessary to correct such untrue
statement or omission or so that the Offering Memorandum, as so amended or
supplemented, will comply with applicable law;
17
(e) for so long as the Securities are outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act, to furnish to holders of the Securities and prospective
purchasers of the Securities designated by such holders, upon request of
such holders or such prospective purchasers, the information required to
be delivered pursuant to Rule 144A(d)(4) under the Securities Act, unless
the Company is then subject to and in compliance with Section 13 or 15(d)
of the Exchange Act (the foregoing agreement being for the benefit of the
holders from time to time of the Securities and prospective purchasers of
the Securities designated by such holders);
(f) until such time as the Company becomes subject to Section 13 or
15(d) of the Exchange Act, to furnish to the Initial Purchasers copies of
any annual reports, quarterly reports and current reports filed by the
Company or Holdings with the Commission on Forms 10-K, 10-Q and 8-K, or
such other similar forms as may be designated by the Commission, and such
other documents, reports and information as shall be furnished by the
Company or Holdings to the Trustee or to the holders of the Securities
pursuant to the Indenture or the Exchange Act or any rule or regulation of
the Commission thereunder;
(g) to promptly take from time to time such actions as the Initial
Purchasers may reasonably request to qualify the Securities for offering
and sale under the securities or Blue Sky laws of such jurisdictions as
the Initial Purchasers may designate and to continue such qualifications
in effect for so long as required for the resale of the Securities; and to
arrange for the determination of the eligibility for investment of the
Securities under the laws of such jurisdictions as the Initial Purchasers
may reasonably request; provided that the Company and the Guarantors shall
not be obligated to qualify as foreign corporations in any jurisdiction in
which they are not so qualified or to file a general consent to service of
process in any jurisdiction;
(h) to provide such assistance as the Initial Purchasers may
reasonably request in arranging for the Securities to be designated
Private Offerings, Resales and Trading through Automated Linkages
("PORTAL") Market securities in accordance with the rules and regulations
adopted by the National Association of Securities Dealers, Inc. ("NASD")
relating to trading in the PORTAL Market and for the Securities to be
eligible for clearance and settlement through The Depository Trust Company
("DTC");
(i) not to, and to cause its affiliates not to, sell, offer for sale
or solicit offers to buy or otherwise negotiate in respect of any security
(as such term is defined in the Securities Act) which could be integrated
with the sale of the Securities in a manner which would require
registration of the Securities under the Securities Act;
(j) except following the effectiveness of the Exchange Offer
Registration Statement or the Shelf Registration Statement, as the case
may be, not to, and to cause its affiliates not to, and not to authorize
or knowingly permit any person acting on their behalf to, solicit any
offer to buy or offer to sell the Securities by means of any form of
general solicitation or general advertising within the meaning of
Regulation D or in any manner involving a public offering within the
meaning of Section 4(2) of the Securities Act; and not to offer, sell,
contract to sell or otherwise dispose of, directly or indirectly, any
securities under circumstances where such offer, sale, contract or
disposition would
18
cause the exemption afforded by Section 4(2) of the Securities Act to
cease to be applicable to the offering and sale of the Securities as
contemplated by this Agreement and the Offering Memorandum;
(k) for a period of 180 days from the date of the Offering
Memorandum, not to offer for sale, sell, contract to sell or otherwise
dispose of, directly or indirectly, or file a registration statement for,
or announce any offer, sale, contract for sale of or other disposition of
any debt securities issued or guaranteed by the Company or any of the
Guarantors (other than the Securities, the Exchange Securities and the
Holdings Discount Debentures) without the prior written consent of the
Initial Purchasers;
(l) during the period from the Closing Date until two years after
the Closing Date, without the prior written consent of the Initial
Purchasers, not to, and not permit any of its affiliates (as defined in
Rule 144 under the Securities Act) to, resell any of the Securities that
have been reacquired by them, except for Securities purchased by the
Company or any of its affiliates and resold in a transaction registered
under the Securities Act;
(m) not to, for so long as the Securities are outstanding, be or
become, or be or become owned by, 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, and to not
be or become, or be or become owned by, a closed-end investment company
required to be registered, but not registered thereunder;
(n) in connection with the offering of the Securities, until CSI on
behalf of the Initial Purchasers shall have notified the Company of the
completion of the resale of the Securities, not to, and to cause its
affiliated purchasers (as defined in Regulation M under the Exchange Act)
not to, either alone or with one or more other persons, bid for or
purchase, for any account in which it or any of its affiliated purchasers
has a beneficial interest, any Securities, or attempt to induce any person
to purchase any Securities; and not to, and to cause its affiliated
purchasers not to, make bids or purchase for the purpose of creating
actual, or apparent, active trading in or of raising the price of the
Securities;
(o) in connection with the offering of the Securities, to make its
officers, employees, independent accountants and legal counsel reasonably
available upon reasonable request by the Initial Purchasers;
(p) to furnish to each of the Initial Purchasers on the date hereof
a copy of each of the independent accountants' reports included in the
Offering Memorandum signed by the accountants rendering such report;
(q) to do and perform all things required to be done and performed
by it under this Agreement that are within its control prior to or after
the Closing Date, and to use its best efforts to satisfy all conditions
precedent on its part to the delivery of the Securities;
(r) not to take any action prior to the execution and delivery of
the Indenture which, if taken after such execution and delivery, would
have violated any of the covenants contained in the Indenture;
19
(s) prior to the Closing Date, not to issue any press release or
other communication directly or indirectly or hold any press conference
with respect to the condition, financial or otherwise, or earnings,
business affairs or business prospects of the Company or the Guarantors,
as the case may be (except for routine oral marketing communications in
the ordinary course of business and consistent with the past practices of
the Company or the Guarantors, as the case may be, and of which the
Initial Purchasers are notified), without the prior written consent of the
Initial Purchasers, unless in the judgment of the Company or the
Guarantors and their counsel, and after notification to the Initial
Purchasers, such press release or communication is required by law; and
(t) to apply the net proceeds from the sale of the Securities as set
forth in the Offering Memorandum under the heading "Use of Proceeds".
5. Conditions of Initial Purchasers' Obligations. The respective
obligations of the several Initial Purchasers hereunder are subject to the
accuracy, on and as of the date hereof and the Closing Date, of the
representations and warranties of the Company, Holdings and each of the
Acquiring Guarantors contained herein, to the accuracy, on and as of the Closing
Date, of the representations and warranties of each of the entities comprising
PTI and ATU contained in the Closing Date Letter Agreement, to the accuracy of
the statements of the Company and each of the Guarantors and their respective
officers made in any certificates delivered pursuant hereto, to the performance
by the Company and each of the Guarantors of their respective obligations
hereunder, and to each of the following additional terms and conditions:
(a) The Offering Memorandum (and any amendments or supplements
thereto) shall have been printed and copies distributed to the Initial
Purchasers as promptly as practicable on or following the date of this
Agreement or at such other date and time as to which the Company and the
Initial Purchasers may agree; and no stop order suspending the sale of the
Securities in any jurisdiction shall have been issued and no proceeding
for that purpose shall have been commenced or shall be pending or
threatened.
(b) None of the Initial Purchasers shall have discovered and
disclosed to the Company on or prior to the Closing Date that the Offering
Memorandum or any amendment or supplement thereto contains an untrue
statement of a fact which is material or omits to state any fact which is
material and is required to be stated therein or is necessary to make the
statements therein not misleading.
(c) All corporate proceedings and other legal matters incident to
the authorization, form and validity of each of the Transaction Documents
and the Offering Memorandum, and all other legal matters relating to the
Transaction Documents and the transactions contemplated thereby, shall be
reasonably satisfactory in all material respects to the Initial
Purchasers, and the Company and the Guarantors shall have furnished to the
Initial Purchasers all documents and information that they or their
counsel may reasonably request to enable them to pass upon such matters.
(d) Xxxxxxxx, Lipton, Xxxxx & Xxxx shall have furnished to the
Initial Purchasers their written opinion, as counsel for the Company,
Holdings and the Acquiring Guarantors, addressed to the Initial Purchasers
and dated the Closing Date, in form and
20
substance reasonably satisfactory to the Initial Purchasers, substantially
in the form set forth in Annex B-1 hereto. Xxxxx, Xxxxxx, Xxxxxxx & Xxxxxx
shall have furnished to the Initial Purchasers their written opinion, as
counsel for PTI and ATU, addressed to the Initial Purchasers and dated the
Closing Date, in form and substance reasonably satisfactory to the Initial
Purchasers, substantially in the form set forth in Annex B-2 hereto. Xxxxx
& Xxxxxxx, L.L.P. shall have furnished to the Initial Purchasers their
written opinion, as special FCC counsel for the Company and the
Guarantors, addressed to the Initial Purchasers and dated the Closing
Date, in form and substance reasonably satisfactory to the Initial
Purchasers, substantially in the form set forth in Annex B-3 hereto.
Xxxxxxx Xxxxxxx, Esq., shall have furnished to the Initial Purchasers her
written opinion, as General Counsel for the Company, addressed to the
Initial Purchasers and dated the Closing Date, in form and substance
reasonably satisfactory to the Initial Purchasers, substantially in the
form set forth in Annex B-4 hereto.
(e) The Initial Purchasers shall have received from Cravath, Swaine
& Xxxxx, counsel for the Initial Purchasers, such opinion or opinions,
dated the Closing Date, with respect to such matters as the Initial
Purchasers may reasonably require, and the Company and the Guarantors
shall have furnished to such counsel such documents and information as
they reasonably request for the purpose of enabling them to pass upon such
matters.
(f) The Company shall have furnished to the Initial Purchasers:
(i) a letter (the "D&T Initial Letter") of Deloitte & Touche,
LLP, addressed to the Initial Purchasers and dated the date hereof,
in form and substance reasonably satisfactory to the Initial
Purchasers, substantially in the form set forth in Annex C-1 hereto;
(ii) a letter (the "KPMG (Shreveport) Initial Letter") of KPMG
LLP, addressed to the Initial Purchasers and dated the date hereof,
in form and substance reasonably satisfactory to the Initial
Purchasers, substantially in the form set forth in Annex C-2 hereto;
and
(iii) a letter (the "KPMG (Anchorage) Initial Letter") of KPMG
LLP, addressed to the Initial Purchasers and dated the date hereof,
in form and substance reasonably satisfactory to the Initial
Purchasers, substantially in the form set forth in Annex C-3 hereto.
(g) The Company shall have furnished to the Initial Purchasers:
(i) a letter (the "D&T Bring-Down Letter") of Deloitte &
Touche, LLP, addressed to the Initial Purchasers and dated the
Closing Date (A) confirming that they are independent public
accountants with respect to (1) the Company, (2) PTI as of December
31, 1997 and for the year ended December 31, 1996, the eleven months
ended November 30, 1997 and the one month ended December 31, 1997
and (3) Telephone Fund of Fairbanks Municipal Utilities Services
(the "Fund") as of and for the period ending October 6, 1997 and for
the year ended December 31, 1996, in each case within the meaning of
Rule 101 of the Code of Professional
21
Conduct of the AICPA and the interpretations and rulings thereunder,
(B) stating, as of the Closing Date (or, with respect to matters
involving changes or developments since the respective dates as of
which specified financial information is given in the Offering
Memorandum, as of a date not more than three business days prior to
the Closing Date), that the conclusions and findings of such
accountants with respect to the financial information and other
matters relating to the Company covered by the D&T Initial Letter
are accurate and (C) confirming in all material respects the
conclusions and findings set forth in the D&T Initial Letter;
(ii) a letter (the "KPMG (Shreveport) Bring-Down Letter") of
KPMG LLP, addressed to the Initial Purchasers and dated the Closing
Date (A) confirming that they are independent public accountants
with respect to PTI as of December 31, 1998 and for the year then
ended within the meaning of Rule 101 of the Code of Professional
Conduct of the AICPA and the interpretations and rulings thereunder,
(B) stating, as of the Closing Date (or, with respect to matters
involving changes or developments since the respective dates as of
which specified financial information is given in the Offering
Memorandum, as of a date not more than three business days prior to
the Closing Date), that the conclusions and findings of such
accountants with respect to the financial information and other
matters covered by the KPMG (Shreveport) Initial Letter are accurate
and (C) confirming in all material respects the conclusions and
findings set forth in the KPMG (Shreveport) Initial Letter; and
(iii) a letter (the "KPMG (Anchorage) Bring-Down Letter") of
KPMG LLP, addressed to the Initial Purchasers and dated the Closing
Date (A) confirming that they are independent public accountants
with respect to ATU as of December 31, 1998 and 1997 and for each of
the years in the three-year period ended December 31, 1998 within
the meaning of Rule 101 of the Code of Professional Conduct of the
AICPA and the interpretations and rulings thereunder, (B) stating,
as of the Closing Date (or, with respect to matters involving
changes or developments since the respective dates as of which
specified financial information is given in the Offering Memorandum,
as of a date not more than three business days prior to the date of
the Closing Date), that the conclusions and findings of such
accountants with respect to the financial information and other
matters covered by the KPMG (Anchorage) Initial Letter are accurate
and (C) confirming in all material respects the conclusions and
findings set forth in the KPMG (Anchorage) Initial Letter.
(h) The representations and warranties of the Company, Holdings and
each of the Acquiring Guarantors contained herein shall be true and
correct as of the date of this Agreement and as of the Closing Date as
though made on the Closing Date. The Company and the Guarantors shall have
furnished to the Initial Purchasers a certificate, dated the Closing Date,
of the Company's Chief Executive Officer and Chief Financial Officer
stating that (i) such officers have carefully examined the Offering
Memorandum, (ii) in their opinion, the Offering Memorandum, as of its
date, did not include any untrue statement of a material fact and did not
omit to state a material fact required to be stated
22
therein or necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading, and since
the date of the Offering Memorandum, no event has occurred which should
have been set forth in a supplement or amendment to the Offering
Memorandum so that the Offering Memorandum (as so amended or supplemented)
would not include any untrue statement of a material fact and would not
omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading, (iii) as of the Closing Date,
the representations and warranties of the Company, Holdings and the
Acquiring Guarantors in this Agreement are true and correct in all
material respects as though such representations and warranties are made
as of the Closing Date, with the same effect as if made on the Closing
Date, the Company, Holdings and each of the Acquiring Guarantors have
complied with all agreements and satisfied all conditions on their part to
be performed or satisfied hereunder on or prior to the Closing Date and
(iv) subsequent to the date of the most recent financial statements
contained in the Offering Memorandum, there has been no material adverse
change in the financial position or results of operations of the Company
and the Guarantors, taken as a whole, or any material change, or any
material development, in or affecting the condition (financial or
otherwise), results of operations or business of the Company and the
Guarantors, taken as a whole.
(i) The Initial Purchasers shall have received a counterpart of the
Registration Rights Agreement which shall have been executed and delivered
by a duly authorized officer of the Company and the Guarantors.
(j) The Indenture shall have been duly executed and delivered by the
Company, the Guarantors and the Trustee, and the Securities shall have
been duly executed and delivered by the Company and duly authenticated by
the Trustee.
(k) The Securities shall have been approved by the NASD for trading
in the PORTAL Market.
(l) If any event shall have occurred that requires the Company under
Section 4(d) to prepare an amendment or supplement to the Offering
Memorandum, such amendment or supplement shall have been prepared, the
Initial Purchasers shall have been given a reasonable opportunity to
comment thereon, and copies thereof shall have been delivered to the
Initial Purchasers reasonably in advance of the Closing Date.
(m) There shall not have occurred any invalidation of Rule 144A
under the Securities Act by any court or any withdrawal or proposed
withdrawal of any rule or regulation under the Securities Act or the
Exchange Act by the Commission or any amendment or proposed amendment
thereof by the Commission which in the judgment of the Initial Purchasers
would materially impair the ability of the Initial Purchasers to purchase,
hold or effect resales of the Securities as contemplated hereby.
(n) Subsequent to the execution and delivery of this Agreement or,
if earlier, the dates as of which information is given in the Offering
Memorandum (exclusive of any amendment or supplement thereto), there shall
not have been any change in the capital
23
stock or long-term debt or any change, or any development involving a
change, in or affecting the condition (financial or otherwise), results of
operations or business of the Company and the Guarantors taken as a whole,
the effect of which, in any such case described above, is, in the judgment
of the Initial Purchasers, so material and adverse as to make it
impracticable or inadvisable to proceed with the sale or delivery of the
Securities on the terms and in the manner contemplated by this Agreement
and the Offering Memorandum (exclusive of any amendment or supplement
thereto).
(o) No action shall have been taken and no statute, rule, regulation
or order shall have been enacted, adopted or issued by any governmental
agency or body which would, as of the Closing Date, prevent the issuance
or sale of the Securities; and no injunction, restraining order or order
of any other nature by any federal or state court of competent
jurisdiction shall have been issued as of the Closing Date which would
prevent the issuance or sale of the Securities.
(p) Subsequent to the execution and delivery of this Agreement (i)
no downgrading shall have occurred in the rating accorded the Securities
or any other debt securities or preferred stock of the Company or Holdings
by any "nationally recognized statistical rating organization", as such
term is defined by the Commission for purposes of Rule 436(g)(2) of the
rules and regulations of the Commission under the Securities Act and (ii)
no such organization shall have publicly announced that it has under
surveillance or review (with negative implications), its rating of the
Securities or any other debt securities or preferred stock of the Company
or Holdings.
(q) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange, the American Stock Exchange or
the over-the-counter market shall have been suspended or limited, or
minimum prices shall have been established on any such exchange or market
by the Commission, by any such exchange or by any other regulatory body or
governmental authority having jurisdiction, or trading in any securities
of the Company or Holdings on any exchange or in the over-the-counter
market shall have been suspended or (ii) any moratorium on commercial
banking activities shall have been declared by federal or New York state
authorities or (iii) an outbreak or escalation of hostilities or a
declaration by the United States of a national emergency or war or (iv) a
material adverse change in general economic, political or financial
conditions (or the effect of international conditions on the financial
markets in the United States shall be such) the effect of which, in the
case of this clause (iv), is, in the reasonable judgment of the Initial
Purchasers, so material and adverse as to make it impracticable or
inadvisable to proceed with the sale or the delivery of the Securities on
the terms and in the manner contemplated by this Agreement and in the
Offering Memorandum (exclusive of any amendment or supplement thereto).
(r) Substantially simultaneously with the sale of the Securities
hereunder, (i) the acquisitions of PTI and ATU shall have been consummated
on the terms described in the Offering Memorandum, (ii) the Credit
Agreement shall have been executed and delivered and the initial
borrowings thereunder shall have been made, (iii) the Initial Purchasers
shall have received a counterpart of the letter agreement, substantially
in the form of
24
Annex D attached hereto (the "Closing Date Letter Agreement") which shall
have been executed and delivered by a duly authorized officer of each of
the entities comprising PTI and ATU whereby, among other things, such
entities will become parties to this Agreement and be subject to all
obligations hereunder including, but not limited to, the obligations under
Section 4, 9, 10, 11, 12 and 13. All conditions precedent to the
consummation of the acquisitions of PTI and ATU, other than the payment of
the consideration therefore, shall have been satisfied or waived (any such
waiver only with the prior written consent of the Initial Purchasers),
prior to or on the Closing Date.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Initial Purchasers.
6. Termination. The obligations of the Initial Purchasers hereunder
may be terminated by the Initial Purchasers, in their absolute discretion, by
notice given to and received by the Company prior to delivery of and payment for
the Securities if, prior to that time, any of the events described in Section
5(m), (n), (o), (p), (q) or (r) shall have occurred and be continuing.
7. Defaulting Initial Purchasers. (a) If, on the Closing Date, any
Initial Purchaser defaults in the performance of its obligations under this
Agreement, the non-defaulting Initial Purchasers may make arrangements for the
purchase of the Securities which such defaulting Initial Purchaser agreed but
failed to purchase by other persons satisfactory to the Company and the
non-defaulting Initial Purchasers, but if no such arrangements are made within
36 hours after such default, this Agreement shall terminate without liability on
the part of the non-defaulting Initial Purchasers or the Company, except that
the Company and the Guarantors will continue to be liable for the payment of
expenses to the extent set forth in Sections 8 and 12 and except that the
provisions of Sections 9 and 10 shall not terminate and shall remain in effect.
As used in this Agreement, the term "Initial Purchasers" includes, for all
purposes of this Agreement unless the context otherwise requires, any party not
listed in Schedule 1 hereto that, pursuant to this Section 7, purchases
Securities which a defaulting Initial Purchaser agreed but failed to purchase.
(b) Nothing contained herein shall relieve a defaulting Initial
Purchaser of any liability it may have to the Company or any non-defaulting
Initial Purchaser for damages caused by its default. If other persons are
obligated or agree to purchase the Securities of a defaulting Initial Purchaser,
either the non-defaulting Initial Purchasers or the Company may postpone the
Closing Date for up to seven full business days in order to effect any changes
that in the opinion of counsel for the Company or counsel for the Initial
Purchasers may be necessary in the Offering Memorandum or in any other document
or arrangement, and the Company agrees to promptly prepare any amendment or
supplement to the Offering Memorandum necessary to effect any such changes.
8. Reimbursement of Initial Purchasers' Expenses. If (a) this
Agreement shall have been terminated pursuant to Section 6 or 7, (b) the Company
shall fail to tender the Securities for delivery to the Initial Purchasers for
any reason permitted under this Agreement or (c) the Initial Purchasers shall
decline to purchase the Securities for any reason permitted under this
Agreement, the Company and the Guarantors shall reimburse the Initial Purchasers
for such out-of-pocket expenses (including reasonable fees and disbursements of
counsel) as shall have
25
been reasonably incurred by the Initial Purchasers in connection with this
Agreement and the proposed purchase and resale of the Securities. If this
Agreement is terminated pursuant to Section 7 by reason of the default of one or
more of the Initial Purchasers, the Company and the Guarantors shall not be
obligated to reimburse any defaulting Initial Purchaser on account of such
expenses.
9. Indemnification. (a) The Company and each of the Guarantors shall
jointly and severally indemnify and hold harmless each Initial Purchaser, its
affiliates, their respective officers, directors, employees, representatives and
agents, and each person, if any, who controls any Initial Purchaser within the
meaning of the Securities Act or the Exchange Act (collectively referred to for
purposes of this Section 9(a) and Section 10 as an "Initial Purchaser"), from
and against any loss, claim, damage or liability, joint or several, or any
action in respect thereof (including, without limitation, any loss, claim,
damage, liability or action relating to purchases and sales of the Securities),
to which that Initial Purchaser may become subject, whether commenced or
threatened, under the Securities Act, the Exchange Act, any other federal or
state statutory law or regulation, at common law or otherwise, insofar as such
loss, claim, damage, liability or action arises out of, or is based upon, (i)
any untrue statement or alleged untrue statement of a material fact contained in
the Preliminary Offering Memorandum or the Offering Memorandum or in any
amendment or supplement thereto or in any information provided by the Company
pursuant to Section 4(e) or (ii) the omission or alleged omission to state
therein a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, and shall reimburse each Initial Purchaser promptly
upon demand for any legal or other expenses reasonably incurred by that Initial
Purchaser in connection with investigating or defending or preparing to defend
against or appearing as a third party witness in connection with any such loss,
claim, damage, liability or action as such expenses are incurred; provided,
however, that the Company and the Guarantors shall not be liable in any such
case to any Initial Purchaser to the extent that any such loss, claim, damage,
liability or action 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 any Initial Purchasers'
Information furnished by that Initial Purchaser; and provided, further, that
with respect to any such untrue statement in or omission from the Preliminary
Offering Memorandum, the indemnity agreement contained in this Section 9(a)
shall not inure to the benefit of any Initial Purchaser to the extent that the
sale to the person asserting any such loss, claim, damage, liability or action
was an initial resale by such Initial Purchaser and any such loss, claim,
damage, liability or action of or with respect to such Initial Purchaser results
from the fact that both (i) a copy of the Offering Memorandum was not sent or
given to such person at or prior to the written confirmation of the sale of such
Securities to such person and (ii) the untrue statement in or omission from the
Preliminary Offering Memorandum was corrected in the Offering Memorandum unless,
in either case, such failure to deliver the Offering Memorandum was a result of
non-compliance by the Company with Section 4(b).
(b) Each Initial Purchaser, severally and not jointly, shall
indemnify and hold harmless the Company and the Guarantors, their affiliates,
their respective officers, directors, employees, representatives and agents, and
each person, if any, who controls the Company or any Guarantor within the
meaning of the Securities Act or the Exchange Act (collectively referred to for
purposes of this Section 9(b) and Section 10 as the "Company"), from and against
any loss,
26
claim, damage or liability, joint or several, or any action in respect thereof,
to which the Company may become subject, whether commenced or threatened, under
the Securities Act, the Exchange Act, any other federal or state statutory law
or regulation, at common law or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in the Preliminary
Offering Memorandum or the Offering Memorandum or in any amendment or supplement
thereto or (ii) the omission or alleged omission to state therein a material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, but in each case only to the extent that the untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with any Initial Purchasers' Information furnished by
such Initial Purchaser, and shall reimburse the Company for any legal or other
expenses reasonably incurred by the Company in connection with investigating or
defending or preparing to defend against or appearing as a third party witness
in connection with any such loss, claim, damage, liability or action as such
expenses are incurred.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party pursuant to Section 9(a) or 9(b), notify the indemnifying
party in writing of the claim or the commencement of that action; provided,
however, that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have under this Section 9 or otherwise except to
the extent that it has been materially prejudiced by such failure. If any such
claim or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 9 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that an
indemnified party shall have the right to employ its own counsel in any such
action, but the fees, expenses and other charges of such counsel for the
indemnified party will be at the expense of such indemnified party unless (i)
the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (ii) the indemnified party has reasonably
concluded (based upon advice of counsel to the indemnified party) that there may
be legal defenses available to it or other indemnified parties that are
different from or in addition to those available to the indemnifying party,
(iii) a conflict or potential conflict exists (based upon advice of counsel to
the indemnified party) between the indemnified party and the indemnifying party
(in which case the indemnifying party will not have the right to direct the
defense of such action on behalf of the indemnified party) or (iv) the
indemnifying party has not in fact employed counsel reasonably satisfactory to
the indemnified party to assume the defense of such action within a reasonable
time after receiving notice of the commencement of the action, in each of which
cases the reasonable fees, disbursements and other charges of counsel will be at
the expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm of attorneys (in
addition to any local counsel) at any one time for all such
27
indemnified party or parties. Each indemnified party, as a condition of the
indemnity agreements contained in Sections 9(a) and 9(b), shall use all
reasonable efforts to cooperate with the indemnifying party in the defense of
any such action or claim. No indemnifying party shall be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with its written
consent or if there be a final judgment for the plaintiff in any such action,
the indemnifying party agrees to indemnify and hold harmless any indemnified
party from and against any loss or liability by reason of such settlement or
judgment. No indemnifying party shall, without the prior written consent of the
indemnified party (which consent shall not be unreasonably withheld), effect any
settlement of any pending or threatened proceeding 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 an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding and does not include a statement
as to, or an admission of, fault, culpability or a failure to act, by or on
behalf of any indemnified party.
The obligations of the Company, the Guarantors and the Initial
Purchasers in this Section 9 and in Section 10 are in addition to any other
liability that the Company, the Guarantors or the Initial Purchasers, as the
case may be, may otherwise have, including in respect of any breaches of
representations, warranties and agreements made herein by any such party.
10. Contribution. If the indemnification provided for in Section 9
is unavailable or insufficient to hold harmless an indemnified party under
Section 9(a) or 9(b), then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of such loss, claim, damage or liability, or
action in respect thereof, (i) in such proportion as shall be appropriate to
reflect the relative benefits received by the Company and the Guarantors on the
one hand and the Initial Purchasers on the other from the offering of the
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 Company and the Guarantors on the one hand and the Initial
Purchasers on the other with respect to the statements or omissions that
resulted in such loss, claim, damage or liability, or action in respect thereof,
as well as any other relevant equitable considerations. The relative benefits
received by the Company and the Guarantors on the one hand and the Initial
Purchasers on the other with respect to such offering shall be deemed to be in
the same proportion as the total net proceeds from the offering of the
Securities purchased under this Agreement (before deducting expenses) received
by or on behalf of the Company and the Guarantors, on the one hand, and the
total discounts and commissions received by the Initial Purchasers with respect
to the Securities purchased under this Agreement, on the other, bear to the
total gross proceeds from the sale of the Securities 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 the Company or information
supplied by the Company and the Guarantors on the one hand or to any Initial
Purchasers' Information on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The Company, the Guarantors and the Initial
Purchasers agree that it would not be just and equitable if contributions
pursuant to this Section 10 were to be determined by pro rata allocation (even
if the Initial Purchasers were treated as one entity for such purpose) or by any
other method of allocation that does not take into account the equitable
28
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section 10 shall be deemed to include, for
purposes of this Section 10, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending or
preparing to defend any such action or claim. Notwithstanding the provisions of
this Section 10, no Initial Purchaser shall be required to contribute any amount
in excess of the amount by which the total discounts and commissions received by
such Initial Purchaser with respect to the Securities purchased by it under this
Agreement exceeds the amount of any damages which such Initial Purchaser has
otherwise paid or become liable to pay by reason of any untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Initial Purchasers' obligations to contribute
as provided in this Section 10 are several in proportion to their respective
purchase obligations and not joint.
11. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Initial Purchasers, the Company,
the Guarantors and their respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except as
provided in Sections 9 and 10 with respect to affiliates, officers, directors,
employees, representatives, agents and controlling persons of the Company, the
Guarantors and the Initial Purchasers and in Section 4(e) with respect to
holders and prospective purchasers of the Securities. Nothing in this Agreement
is intended or shall be construed to give any person, other than the persons
referred to in this Section 11, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
12. Expenses. The Company and the Guarantors agree with the Initial
Purchasers to pay (a) the costs incident to the authorization, issuance, sale,
preparation and delivery of the Securities and any taxes payable in that
connection; (b) the costs incident to the preparation, printing and distribution
of the Preliminary Offering Memorandum, the Offering Memorandum and any
amendments or supplements thereto; (c) the costs of reproducing and distributing
each of the Transaction Documents; (d) the costs incident to the preparation,
printing and delivery of the certificates evidencing the Securities, including
stamp duties and transfer taxes, if any, payable upon issuance of the
Securities; (e) the fees and expenses of the Company's counsel and independent
accountants; (f) the fees and expenses of qualifying the Securities under the
securities laws of the several jurisdictions as provided in Section 4(g) and of
preparing, printing and distributing Blue Sky Memoranda (including reasonable
fees and expenses of counsel for the Initial Purchasers); (g) any fees charged
by rating agencies for rating the Securities; (h) the fees and expenses of the
Trustee and any paying agent (including reasonable fees and expenses of any
counsel to such parties); (i) all expenses and application fees incurred in
connection with the application for the inclusion of the Securities on the
PORTAL Market and the approval of the Securities for book-entry transfer by DTC;
and (j) all other costs and expenses incident to the performance of the
obligations of the Company under this Agreement which are not otherwise
specifically provided for in this Section 12; provided, however, that except as
provided in this Section 12 and Section 8, the Initial Purchasers shall pay
their own costs and expenses.
13. Survival. The respective indemnities, rights of contribution,
representations, warranties and agreements of the Company, the Guarantors and
the Initial Purchasers contained in
29
this Agreement or made by or on behalf of the Company, the Guarantors or the
Initial Purchasers pursuant to this Agreement or any certificate delivered
pursuant hereto shall survive the delivery of and payment for the Securities and
shall remain in full force and effect, regardless of any termination or
cancelation of this Agreement or any investigation made by or on behalf of any
of them or any of their respective affiliates, officers, directors, employees,
representatives, agents or controlling persons.
14. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Initial Purchasers, shall be delivered or sent by mail
or telecopy transmission to Chase Securities Inc., 000 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Xxxxx X. Xxxxx (telecopier no.: (000) 000-0000); or
(b) if to the Company, shall be delivered or sent by mail or
telecopy transmission to the address of the Company set forth in the Offering
Memorandum, Attention: Xxxxxxx X. Xxxxxxxxx (telecopier no.: (000) 000-0000);
provided that any notice to an Initial Purchaser pursuant to Section 9(c) shall
also be delivered or sent by mail to such Initial Purchaser at its address set
forth on the signature page hereof. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made on behalf of the Initial Purchasers by CSI.
15. Definition of Terms. For purposes of this Agreement, (a) the
term "business day" means any day on which the New York Stock Exchange, Inc. is
open for trading, (b) the term "subsidiary" has the meaning set forth in Rule
405 under the Securities Act and (c) except where otherwise expressly provided,
the term "affiliate" has the meaning set forth in Rule 405 under the Securities
Act.
16. Initial Purchasers' Information. The parties hereto acknowledge
and agree that, for all purposes of this Agreement, the Initial Purchasers'
Information consists solely of the following information in the Preliminary
Offering Memorandum and the Offering Memorandum: the statements concerning the
Initial Purchasers contained in the third, fifth (but only the third sentence
thereof), sixth, ninth, tenth (but only the third and fourth sentences thereof)
and eleventh paragraphs under the heading "Plan of Distribution".
17. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
18. Counterparts. This Agreement may be executed in one or more
counterparts (which may include counterparts delivered by telecopier) and, if
executed in more than one counterpart, the executed counterparts shall each be
deemed to be an original, but all such counterparts shall together constitute
one and the same instrument.
30
19. Amendments. No amendment or waiver of any provision of this
Agreement, nor any consent or approval to any departure therefrom, shall in any
event be effective unless the same shall be in writing and signed by the parties
hereto.
20. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us a counterpart hereof, whereupon this
instrument will become a binding agreement between the Company, the Guarantors
and the several Initial Purchasers in accordance with its terms.
Very truly yours,
ALASKA COMMUNICATIONS SYSTEMS
HOLDINGS, INC.,
by /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Senior Vice President and
Chief Financial Officer
ALEC HOLDINGS, INC.,
by /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Senior Vice President and
Chief Financial Officer
TELEPHONE UTILITIES OF ALASKA, INC.,
by /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Senior Vice President and
Chief Financial Officer
TELEPHONE UTILITIES OF THE NORTHLAND, INC.,
by /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Senior Vice President and
Chief Financial Officer
PTI COMMUNICATIONS OF ALASKA, INC.,
by /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Senior Vice President and
Chief Financial Officer
PACIFIC TELECOM OF ALASKA PCS, INC.,
by /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Senior Vice President and
Chief Financial Officer
PACIFIC TELECOM CELLULAR OF ALASKA, INC.,
by /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Senior Vice President and
Chief Financial Officer
ATU COMMUNICATIONS, INC.,
by /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Senior Vice President and
Chief Financial Officer
MACTEL, INC.,
by /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Senior Vice President and
Chief Financial Officer
MACTEL FAIRBANKS, INC.,
by /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Senior Vice President and
Chief Financial Officer
ATU LONG DISTANCE, INC.,
by /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Senior Vice President and
Chief Financial Officer
PENINSULA CELLULAR SERVICES, INC.,
by /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Senior Vice President and
Chief Financial Officer
PRUDHOE COMMUNICATIONS, INC.,
by /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Senior Vice President and
Chief Financial Officer
ALASKA COMMUNICATIONS SYSTEMS, INC.,
by /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Senior Vice President and
Chief Financial Officer
ALEC ACQUISITION SUB CORP.,
by /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Senior Vice President and
Chief Financial Officer
MACTEL LICENSE SUB, INC.,
by /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Senior Vice President and
Chief Financial Officer
MACTEL FAIRBANKS LICENSE SUB, INC.,
by /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Senior Vice President and
Chief Financial Officer
PTINET, INC.,
by /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Senior Vice President and
Chief Financial Officer
Accepted:
CHASE SECURITIES INC.,
by /s/ Authorized Signatory
------------------------
Authorized Signatory
Address for notices pursuant to Section 9(c):
0 Xxxxx Xxxxx, 00xx xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Legal Department
CIBC WORLD MARKETS CORP.,
by
----------------------
Authorized Signatory
Address for notices pursuant to Section 9(c):
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Legal Department
CREDIT SUISSE FIRST BOSTON CORPORATION,
by
----------------------
Authorized Signatory
Address for notices pursuant to Section 9(c):
00 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Investment Banking Department Transactions Advisory Group
Accepted:
CHASE SECURITIES INC.,
by
----------------------
Authorized Signatory
Address for notices pursuant to Section 9(c):
0 Xxxxx Xxxxx, 00xx xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Legal Department
CIBC WORLD MARKETS CORP.
by /s/ Authorized Signatory
------------------------
Authorized Signatory
Address for notices pursuant to Section 9(c):
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Legal Department
CREDIT SUISSE FIRST BOSTON CORPORATION,
by
----------------------
Authorized Signatory
Address for notices pursuant to Section 9(c):
00 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Investment Banking Department Transactions Advisory Group
Accepted:
CHASE SECURITIES INC.,
by
----------------------
Authorized Signatory
Address for notices pursuant to Section 9(c):
0 Xxxxx Xxxxx, 00xx xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Legal Department
CIBC WORLD MARKETS CORP.,
by
----------------------
Authorized Signatory
Address for notices pursuant to Section 9(c):
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Legal Department
CREDIT SUISSE FIRST BOSTON CORPORATION,
by /s/ Authorized Signatory
------------------------
Authorized Signatory
Address for notices pursuant to Section 9(c):
00 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Investment Banking Department Transactions Advisory Group
