-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Q8xosyQRANxkzCoEsr+gNtqRKKBiDXVZllwboZppi1rmYm7UG/4DPhZAzWCeSrjv GPzLuwNZ4xC7vQBDahwriQ== 0000950130-96-001596.txt : 19960510 0000950130-96-001596.hdr.sgml : 19960510 ACCESSION NUMBER: 0000950130-96-001596 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 19960509 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CELLULAR COMMUNICATIONS OF PUERTO RICO INC CENTRAL INDEX KEY: 0000881817 STANDARD INDUSTRIAL CLASSIFICATION: RADIO TELEPHONE COMMUNICATIONS [4812] IRS NUMBER: 133517074 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-03389 FILM NUMBER: 96558633 BUSINESS ADDRESS: STREET 1: 110 EAST 59TH STREET STREET 2: 26TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 212-906-8440 MAIL ADDRESS: STREET 1: 110 EAST 59TH STREET STREET 2: 26TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 S-3 1 FORM S-3 As filed with the Securities and Exchange Commission on May 8, 1996 Registration No. 333-_______ ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 CELLULAR COMMUNICATIONS OF PUERTO RICO, INC. (Exact name of registrant as specified in its charter) DELAWARE 13-3517074 (State or other jurisdiction (I.R.S. employer of incorporation or organization) identification number) 110 East 59th Street New York New York 10022 (212) 355-3466 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) RICHARD J. LUBASCH, ESQ. Senior Vice President, General Counsel and Secretary Cellular Communications of Puerto Rico, Inc. 110 East 59th Street New York New York 10022 (212) 906-8470 (Name, address, including zip code, and telephone number, including area code, of agent for service) Copies of all communications to: THOMAS H. KENNEDY, ESQ. Skadden, Arps, Slate, Meagher & Flom 919 Third Avenue New York, New York 10022 (212) 735-2526 APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to time following the date this Registration Statement is declared effective. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [X] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]________ If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]_______________ If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF TITLE OF SHARES TO BE OFFERING PRICE AGGREGATE REGISTRATION TO BE REGISTERED REGISTERED PER SHARE OFFERING PRICE FEE - --------------------------------------- ---------- ----------------- ----------------- ------------- Common Stock, $.01 par value (in- 820,404 $27.125(2) $22,253,459.00(2) $7,673.61(2) cluding Series A Junior Participating shares Preferred Stock Purchase Rights) (1)
(1) Prior to the occurrence of certain events, the Series A Junior Participating Preferred Stock Purchase Rights will not be evidenced separately from shares of Common Stock. (2) Estimated pursuant to Rule 457(c) of the Securities Act of 1933 solely for the purpose of computing the amount of the registration fee. THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. ================================================================================ 2 INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. SUBJECT TO COMPLETION, MAY 8, 1996 PROSPECTUS - ---------- 820,404 SHARES CELLULAR COMMUNICATIONS OF PUERTO RICO, INC. COMMON STOCK ----------- This Prospectus relates to the sale by Henry Zachs, Judith Zachs, Newton Brenner, Christopher Jenkins, Waring Partridge, David Abel, Estate of Danny Arnold, Estate of Robert Austin, The Ed and Natalie Friendly Trust, Nathan Golden, Jeffrey Gordon, Eugene Goodwin, Rabbi Leon Kahane, Frank Kilpatrik, Lawrence Family Trust, Perry Leff, Donald Meaders, George Newhart, Kenneth Newmark, Susan Newmark, Pierce O'Donnell, Don Rickles, Barbara Rickles, Ronald Rizzo, Anne Roberts, Larry Scharf, Bart Sokolow, Ronald Shlensky, Anthony Thompson and Tayemi Thompson, (all of the foregoing parties are hereinafter referred to as the "Selling Stockholders" ) of a maximum 820,404 shares of Common Stock, par value $.01 per share (the "Common Stock"), of Cellular Communications of Puerto Rico, Inc., a Delaware corporation (the "Company") (and associated Series A Junior Participating Preferred Stock Purchase Rights (the "Rights")). Such Common Stock was originally issued by the Company as consideration in certain acquisition transactions. See "RECENT DEVELOPMENTS." The Company will not receive any proceeds from the sale of the shares of Common Stock offered by this Prospectus. See "SELLING STOCKHOLDERS" and "PLAN OF DISTRIBUTION." The Common Stock is quoted on the National Association of Securities Dealers Automated Quotations/National Market System ("Nasdaq National Market") under the symbol CCPR. On May 7, 1996 the last reported sale price of the Common Stock on the Nasdaq National Market was $26.75 per share. Prospective purchasers of the Common Stock are urged to obtain current information as to market prices of the Common Stock. ----------- SEE "RISK FACTORS" ON PAGES 4 THROUGH 7 FOR CERTAIN FACTORS RELEVANT TO AN INVESTMENT IN THE COMMON STOCK OFFERED HEREBY. ----------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THE DATE OF THIS PROSPECTUS IS MAY __, 1996 AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith, files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Such reports, proxy statements and other information filed by the Company with the Commission can be inspected and copied at the public reference facilities maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 and at the following Regional Offices of the Commission: Chicago Regional Office, Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661; and New York Regional Office, 7 World Trade Center, 13th Floor, New York, New York 10048. Copies of such material can be obtained from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. Such reports, proxy statements and other information can also be inspected at the offices of the Nasdaq National Market, Reports Section, 1735 K Street, N.W., Washington, D.C., 20006 on which certain securities of the Company are listed and traded. The Company has filed with the Commission a Registration Statement on Form S-3 (which together with all amendments and exhibits is referred to herein as the "Registration Statement"). This Prospectus does not contain all information set forth in the Registration Statement and the exhibits and schedules filed thereunder, certain parts of which are omitted in accordance with the rules and regulations of the Commission. For further information, reference is hereby made to the Registration Statement which may be inspected and copied in the manner and at the sources described above. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents filed by the Company with the Commission pursuant to the Exchange Act are hereby incorporated by reference herein: 1. The Company's Annual Report on Form 10-K for the year ended December 31, 1995 (File No. 0-19869). 2. The Company's Current Report on Form 8-K, dated April 23, 1996 (File No. 0-19869). 3. The description of the Common Stock which is contained in the registration statements filed by the Company to register such securities under Section 12 of the Securities Act of 1933, as amended (the "Securities Act"), including any amendments or reports filed for the purpose of updating such description (File No. 0-19869). All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to the termination of the offering of the shares of Common Stock hereunder shall be deemed to be incorporated by reference herein and to be part hereof from the date of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is incorporated or deemed to be incorporated by reference herein 2 modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. THE COMPANY HEREBY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM THIS PROSPECTUS IS DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF SUCH PERSON, A COPY OF ANY AND ALL OF THE DOCUMENTS INCORPORATED BY REFERENCE IN THIS PROSPECTUS (OTHER THAN EXHIBITS TO SUCH DOCUMENTS UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE INTO THE DOCUMENTS THAT THIS PROSPECTUS INCORPORATES). WRITTEN OR ORAL REQUESTS FOR SUCH COPIES SHOULD BE DIRECTED TO RICHARD J. LUBASCH, SECRETARY, CELLULAR COMMUNICATIONS OF PUERTO RICO, INC., 110 EAST 59TH STREET, NEW YORK, NEW YORK 10022, TELEPHONE (212) 906-8470. 3 RISK FACTORS Ownership of the Common Stock offered hereby involves certain risks. Prospective owners of the Common Stock, prior to engaging in any transaction which would result in the ownership thereby of the Common Stock, should carefully consider the following factors, in addition to all other information contained in this Prospectus or incorporated herein by reference. COMPETITION Federal Communications Commission ("FCC") regulations provide that two licensees will be authorized to provide cellular service in each cellular service area. In the Commonwealth of Puerto Rico, the Company's wholly or majority-owned subsidiaries, or other affiliates, face significant competition from the Puerto Rico Telephone Company ("PRTC"), the other licensee for such service area and which is also the sole landline telephone service provider in Puerto Rico. PRTC is owned by the government of the Commonwealth of Puerto Rico. PRTC is significantly larger and better capitalized than the Company and enjoyed more than a five-year head start in fully marketing its cellular telephone service. The Company believes that PRTC presently provides service to approximately 61% of the subscribers to cellular telephone service in the Commonwealth of Puerto Rico. In the U.S. Virgin Islands, the Company and its wholly or majority owned subsidiaries, or other affiliates, face significant competition from VitelCellular, Inc. ("VitelCellular"). VitelCellular is an affiliate of Virgin Islands Telephone Company, which is the provider of landline telephone service in the U.S. Virgin Islands and is also the other licensee in each U.S. Virgin Islands cellular service area. The Company believes that VitelCellular is significantly larger and better capitalized than the Company. The Company believes that VitelCellular currently provides service to approximately 45% of the subscribers of cellular service on the U.S. Virgin Islands. Furthermore, the Company's cellular and paging operations are dependent upon interconnection with these local landline telephone service providers for the origination and termination of calls that constitute a large proportion of the Company's mobile service operations. The Telecommunications Act of 1996 contains certain provisions regarding such interconnection; however, it is still premature to predict the effect of such legislation on the Company's business. Significant competition can also be expected from the other cellular licensee in each other service area in which the Company's wholly or majority- owned subsidiaries, or other affiliates, now, or in the future, might compete. Alternative communications technologies now existing, in the process of development, or to be developed in the future may also provide competition. These include, without limitation, landline telephone service, conventional mobile radio systems, specialized mobile radio systems, paging services, microcell-based cordless telephones, mobile satellite services and personal communications services ("PCS"). The FCC has recently awarded PCS licenses for Puerto Rico and the U.S. Virgin Islands to AT&T and Centennial Cellular Corp. ("Centennial"). AT&T is the largest telecommunications company in the United States; Centennial is an experienced cellular service provider in the U.S. mainland and has affiliates that offer cable television services and fiber- optic based telecommunications services in Puerto Rico. Both AT&T and Centennial are expected to provide strong competition in the mobile telecommunications market in Puerto Rico. The FCC will award four additional PCS authorizations through competitive bidding in each area where the Company provides cellular service. The Company is eligible to bid for and acquire at least one of these authorizations in each such area. PCS is expected to utilize digital technology which may provide better sound quality and ancillary functions not currently available in the Company's system. 4 Accordingly, PCS will provide significant competition to the Company's cellular and paging operations and may render current cellular technology obsolete. FRAUD The cellular industry continues to be subject to fraudulent activity. Cloning, which is one form of fraud, refers to the use of scanners and other electronic devices to illegally obtain telephone numbers and electronic serial numbers during cellular transmission. These stolen telephone and serial number combinations can be programmed into a cellular phone and used to obtain fraudulent access to cellular networks. Roaming fraud occurs when a phone programmed with a number stolen from the Company's customer is used to place a fraudulent call from another carrier's market, resulting in a roaming fee charged to the Company that cannot be collected from the customer. The Company continues to work to reduce the negative impacts of fraud through investment in new technologies and the deployment of other measures. In its own markets, the Company has had significant success in detecting and reducing fraudulent usage of numbers stolen from the Company's customers. The cost of cellular fraud could have a significant impact on the Company's operating results for the foreseeable future. REGULATORY UNCERTAINTIES The licensing, construction, operation, acquisition and sale of cellular telephone systems are regulated at the federal level by the FCC and, to some extent, the Federal Aviation Administration ("FAA"). In addition, certain aspects of cellular telephone operations are or may be subject to public utility regulation at the state, commonwealth or local level. Future changes in the laws and regulations governing such aspects of cellular telephone operations, either at the federal, state, commonwealth or local level, may have a material adverse impact on the cellular telephone operations of the Company. FLUCTUATIONS IN THE VALUE OF WIRELESS LICENSES; RENEWAL OF FCC LICENSES A substantial portion of the Company's assets consists of interests in entities holding cellular licenses, the value of which will depend upon the success of the operations of such entities and the growth and future direction of the cellular industry generally. Values of licenses also have been affected by fluctuations in the level of supply and demand for such licenses. In addition, the infrequency with which licenses are traded or sold may increase the difficulty of establishing values for the Company's license interests. Any transfer of control of an entity holding a domestic license is subject to prior FCC approval. Where licenses are held by partnerships, transfers of ownership interests in such entities are often subject to contractual restrictions. In addition, investment returns from acquisitions of interests in existing entities holding wireless licenses or from licenses acquired through auctions may be lower than those resulting from the Company's early license awards because of the substantial purchase prices required to acquire such interests. Also, under current FCC regulations, each license is subject to renewal. Because it is possible that there will be competition for the licenses upon the expiration of their initial ten-year terms, there can be no assurance that any such license will be renewed in favor of the Company. 5 LACK OF GEOGRAPHIC DIVERSIFICATION The Company's business as of the date of this Prospectus is confined to the operation of cellular telephone and paging systems in the Commonwealth of Puerto Rico and the U.S. Virgin Islands. As such, it is highly dependent on trends in the use of cellular telephone and paging services and is subject to economic, social, political and governmental conditions in the Commonwealth of Puerto Rico and in the U.S. Virgin Islands. RADIO FREQUENCY EMISSIONS CONCERNS Media reports have suggested that certain radio frequency ("RF") emissions from portable cellular telephones might be linked to cancer. The Company has collected and reviewed relevant scientific information and, based on such information, is not aware of any credible evidence linking the usage of portable cellular telephones with cancer. The FCC currently has a rulemaking proceeding pending to update the guidelines and methods it uses for evaluating RF emissions in radio equipment, including cellular telephones. While the proposal would impose more restrictive standards on RF emissions from low-power devices such as portable cellular telephones, it is anticipated that all cellular telephones currently marketed and in use will comply with those standards. The Telecommunications Act of 1996 requires that the FCC complete action in that rulemaking proceeding within 180 days after February 7, 1996. Additional concerns have been expressed about the safety of emissions from cellular facilities which transmit calls to customers' telephone handsets. The Company's facilities are licensed by the FCC and comply with the exposure levels set by the FCC. The Telecommunications Act of 1996 provides that state and local governments may not regulate the placement, construction or modification of personal wireless service facilities on the basis of the environmental effects of RF emissions as long as such facilities comply with the FCC's regulations concerning such emissions. However, local authorities still have jurisdiction over zoning and permitting of such facilities. DIVIDEND POLICY The Company has never paid cash dividends on the Common Stock and does not anticipate paying any cash dividends in the foreseeable future. The Company anticipates that it will retain earnings, if any, for use in the operation and expansion of its business and does not anticipate paying any cash dividends in the foreseeable future. Additionally, the terms of a $200,000,000 revolving credit facility into which the Company and one of its subsidiaries have entered contains provisions that restrict the payment of cash dividends on the Common Stock. HOLDING COMPANY STRUCTURE As a holding company, the Company is ultimately dependent upon cash distributions from the entities in which it owns interests to fund operations and to pay the principal and interest on the Company's indebtedness. While there are presently no material contractual restrictions on the ability of the Company's operating entities to make payments or other distributions to the Company, there can be no assurances that such restrictions will not exist at any time in the future. 6 CONFLICTS OF INTEREST Certain directors and/or officers of Cellular Communications, Inc. ("CCI") are also directors and/or officers of the Company. When such persons act in their capacity as directors and/or officers of the Company, they have a fiduciary duty to the Company and its stockholders, which includes a duty of loyalty to the Company and its stockholders. If a conflict of interest were to emerge between CCI and the Company, however, there would be no assurance that the interests of the Company would be fully protected in such instance or that any such conflict would necessarily be resolved in favor of the Company. CERTAIN ANTI-TAKEOVER PROVISIONS Certain provisions of the Company's Restated Certificate of Incorporation (the "Restated Certificate of Incorporation") and the Company's By-laws (the "By-laws") as well as the Rights Agreement (as hereinafter defined), and certain instruments of indebtedness of the Company, as well as Section 203 of the Delaware General Corporation Law which prohibits certain persons from engaging in business combinations with the Company, may be considered to have anti-takeover effects and may delay, defer or prevent a change in the control of the Company that might otherwise be beneficial to the Company's stockholders. The foregoing may also adversely affect prevailing market prices for the Common Stock. See "PURPOSES AND EFFECTS OF CERTAIN PROVISIONS OF THE RESTATED CERTIFICATE OF INCORPORATION, BYLAWS AND THE RIGHTS AGREEMENT." 7 THE COMPANY The Company is a Delaware corporation which was originally organized under the name EC Acquisition, Inc. on May 18, 1988. The Company, through wholly and majority-owned entities, or other affiliates, holds licenses from the FCC to own and operate cellular telephone and paging systems and conduct other related operations. The only markets served by the entities in which the Company has an interest are in the Commonwealth of Puerto Rico and the U.S. Virgin Islands. Prior to February 28, 1992, the Company was a wholly-owned subsidiary of CCI. The Company's principal executive offices are located at 110 East 59th Street, New York, New York 10022 and its telephone number at such address is (212) 906-8470. RECENT DEVELOPMENTS On December 26, 1995 the Company and CCPR Services, Inc. ("CCPR"), a wholly owned subsidiary of the Company, entered into an Agreement and Plan of Reorganization (the "HMZ Reorganization Agreement") with HMZ San Juan Inc., a Connecticut corporation ("HMZ"), and Henry Zachs, Newton Brenner and Christopher Jenkins, all of the stockholders of HMZ (collectively, the "HMZ Stockholders"). The HMZ Reorganization Agreement provides, among other things, for the purchase by CCPR of a 2.6627% interest in San Juan Cellular Telephone Company, a general partnership ("San Juan Cellular"), subject to certain regulatory approvals. Pursuant to the HMZ Reorganization Agreement, on February 7, 1996, the Company issued 350,000 shares of Common Stock and the associated Rights to HMZ in exchange for such interest in San Juan Cellular. San Juan Cellular provides, pursuant to authorization by the FCC, cellular radio and related communications services in Puerto Rico. HMZ subsequently distributed the 350,000 shares of Common Stock and the associated Rights to the HMZ Stockholders and to Judith Zachs. On December 26, 1995, the Company and CCPR entered into an Agreement and Plan of Reorganization (the "NTC Reorganization Agreement") with National Telephone Company, a Delaware corporation ("NTC"), and Waring Partridge, the sole stockholder of NTC (the "Sole Stockholder"). The NTC Reorganization Agreement provides, among other things, for the purchase by CCPR of a 2.6627% interest in San Juan Cellular, subject to certain regulatory approvals. Pursuant to the NTC Reorganization Agreement, on February 7, 1996, the Company issued 350,000 shares of Common Stock and the associated Rights to NTC in exchange for such interest in San Juan Cellular. NTC subsequently distributed the 350,000 shares of Common Stock and the associated Rights to the Sole Stockholder. . On December 26, 1995 the Company and CCPR entered into an Agreement (the "PCT Reorganization Agreement" and, collectively with the HMZ Reorganization Agreement and the NTC Reorganization Agreement, the "Reorganization Agreements") with Pacific Cellular Telephone Systems, a California limited partnership ("PCT") and David Abel, Estate of Danny Arnold, Estate of Robert Austin, The Ed and Natalie Friendly Trust, Nathan Golden, Jeffrey Gordon, Eugene Goodwin, Rabbi Leon Kahane, Frank Kilpatrik, Lawrence Family Trust, Perry Leff, Donald Meaders, George Newhart, Kenneth Newmark, Susan Newmark, Pierce O'Donnell, Don Rickles, Barbara Rickles, Ronald Rizzo, Anne Roberts, Larry Scharf, Bart Sokolow, Ronald Shlensky, Anthony Thompson and Tayemi Thompson, the foregoing being all of the limited and general partners of PCT (collectively, the "Partners"). The PCT Reorganization Agreement provides, among other things, for the purchase by CCPR of a .902% interest in San Juan Cellular, subject to certain regulatory approvals. Pursuant to the PCT Reorganization Agreement, on February 8, 1996, the Company issued 120,404 shares of Common Stock and the associated Rights to PCT in exchange for such interest in San Juan Cellular. PCT subsequently distributed the 120,404 shares of Common Stock and the associated Rights to the Partners. As a result of the consummation of the transactions contemplated by each of the Reorganization Agreements, the Company has a 100% interest in San Juan Cellular. 8 SELLING STOCKHOLDERS All of the shares of Common Stock offered hereby are being sold by the Selling Stockholders. As of the date of this Prospectus, the Selling Stockholders beneficially owned all of the shares of Common Stock offered hereby and other than the shares of Common Stock offered hereby, the Selling Stockholders, other than Judith Zachs and Henry Zachs, did not own any other shares of Common Stock or any other shares of the capital stock of the Company. As of the date of this Prospectus, Judith Zachs owned an additional 625 shares of Common Stock of the Company and Henry Zachs owned an additional 3,000 shares of Common Stock of the Company. Immediately after the sale of all of the shares of Common Stock offered hereby, the Selling Stockholders, other than Judith Zachs and Henry Zachs, will not own any other shares of Common Stock or any other shares of the capital stock of the Company (assuming the Selling Stockholders do not acquire any other such shares after the date of this Prospectus). Immediately after the sale of all of the shares of Common Stock offered hereby, Judith Zachs will own 625 shares of Common Stock of the Company and Henry Zachs will own 3,000 shares of Common Stock of the Company. Pursuant to the Reorganization Agreements, the Company acquired an aggregate interest of 6.146% in San Juan Cellular and, in connection therewith, the Company issued the shares of Common Stock offered hereby. Pursuant to the registration rights provisions of the Reorganization Agreements, the Company has, among other things, filed with the Commission the Registration Statement of which this Prospectus is a part, and has agreed to use all reasonable efforts to cause such Registration Statement to become effective as soon as reasonably practicable. Additionally, pursuant to such provisions, the Selling Stockholders have agreed that if a Selling Stockholder is deemed to be an affiliate of the Company, then that Selling Stockholder will furnish all information and take such other actions as may reasonably be requested by the Company to assist the Company in fulfilling the obligations of the Company referred to in the previous sentence. The Company will not receive any cash proceeds or other amounts from the sale of the shares of Common Stock offered hereby. To the best knowledge of the Company, none of the Selling Stockholders nor any of their respective affiliates are, or have in the past three years been, a director or officer of the Company or any of the Company's affiliates. Except for the transactions contemplated pursuant to this Prospectus or the Reorganization Agreements, to the best knowledge of the Company, there is not, and there has not in the past three years been, any material relationship between the Company and its affiliates, on the one hand, and any of the Selling Stockholders, on the other. PLAN OF DISTRIBUTION The shares of Common Stock offered hereby may be sold from time to time in one or more transactions to purchasers either directly by the Selling Stockholders, through agents designated by the Selling Stockholders or through brokers, dealers or underwriters to be designated by the Selling Stockholders, at such prices (whether at fixed offering prices, prevailing market prices, varying prices determined at the time of sale or otherwise) and on such terms as may be determined by the Selling Stockholders at the time of sale; additionally, such sales may be made on the Nasdaq National Market or in the over-the-counter market or otherwise. Such agents, brokers, dealers or underwriters will likely receive commissions or discounts from the Selling Stockholders in customary and ordinary amounts to be negotiated immediately prior to the sale. The Selling Stockholders and any agents, dealers or underwriters that participate with the Selling Stockholders in the distribution of the shares of Common Stock offered hereby may be deemed to be "underwriters" within the meaning of the Securities Act and any commissions received by them and any profit on the resale of the shares of Common Stock purchased by them may be deemed underwriting commissions or discounts under the Securities Act. To the extent required under the Securities Act, the aggregate amount of shares of Common Stock being offered and the terms of the offering, the names of any such agents, brokers, 9 dealers or underwriters and any applicable commission with respect to a particular offer will be set forth in an accompanying Prospectus supplement. The aggregate proceeds to the Selling Stockholders from the sale of the shares of Common Stock offered hereby will be the selling price of the shares of Common Stock sold less the aggregate commissions and discounts thereon, if any, and other expenses of issuance and distribution. None of the proceeds from the sale of the shares of Common Stock offered hereby will be received by the Company. USE OF PROCEEDS The Company will not receive any of the net proceeds from the sale of shares of Common Stock offered hereby. DESCRIPTION OF CAPITAL STOCK AUTHORIZED CAPITAL STOCK The authorized capital stock of the Company consists of 32,500,000 shares, of which 2,500,000 are shares of Preferred Stock, par value $.01 per share (the "Preferred Stock"), and 30,000,000 are shares of Common Stock. No shares of Preferred Stock are issued and outstanding, although 80,000 shares of Series A Junior Participating Preferred Stock have been designated and reserved for issuance in connection with the exercise, upon certain events, of the Rights in accordance with the Rights Agreement (as hereinafter defined). For a description of the Rights and the Series A Junior Participating Preferred Stock, see "PURPOSES AND EFFECTS OF CERTAIN PROVISIONS OF THE RESTATED CERTIFICATE OF INCORPORATION, THE BY-LAWS AND THE RIGHTS AGREEMENT--Stockholder Rights Plan." The following description is qualified in all respects by reference to the Restated Certificate of Incorporation and the By-laws, which are incorporated by reference herein and copies of which may be obtained as described under "AVAILABLE INFORMATION." COMMON STOCK All shares of Common Stock (1) participate equally in dividends payable to holders of Common Stock when and as declared by the Company's Board of Directors and in net assets available for distribution to holders of Common Stock on liquidation or dissolution (subject to any prior rights of any class of Preferred Stock which may be issued by the Company in the future), (2) have one vote per share on all matters submitted to a vote of the Company's stockholders and (3) do not have cumulative voting rights in the election of directors. All issued and outstanding shares of the Common Stock are fully paid and nonassessable. The shares of Common Stock are neither redeemable nor convertible, and the holders thereof have no preemptive or subscription rights to purchase any securities of the Company. Upon any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, the remaining net assets, if any, of the Company shall be distributed pro rata to the holders of the Common Stock. The Restated Certificate of Incorporation, the By-laws and the Rights Agreement contain certain provisions that are intended to enhance the likelihood of continuity and stability in the composition of the Company's Board of Directors and which may have the effect of delaying, 10 deferring or preventing a future takeover or change in control of the Company unless such takeover or change of control is approved by the Company's Board of Directors. Such provisions may also render the removal of the current Board of Directors and of management more difficult. See "PURPOSES AND EFFECTS OF CERTAIN PROVISIONS OF THE RESTATED CERTIFICATE OF INCORPORATION, THE BY-LAWS AND THE RIGHTS AGREEMENT." PREFERRED STOCK The Board of Directors is authorized to provide for the issuance of shares of Preferred Stock in one or more series, and to fix for each such series such voting powers, full or limited, or no voting powers, and such designations, preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions thereof, as are stated in a Certificate of Designation adopted by the Board of Directors providing for the issue of such series and as are permitted by the Delaware General Corporation Law (the "DGCL"). TRANSFER AGENT Continental Stock Transfer & Trust Company is the transfer agent and registrar for the Company's Common Stock. PURPOSES AND EFFECTS OF CERTAIN PROVISIONS OF THE RESTATED CERTIFICATE OF INCORPORATION, THE BY-LAWS AND THE RIGHTS AGREEMENT GENERAL Certain provisions contained in the Restated Certificate of Incorporation, the By-laws and the Rights Agreement, dated as of January 24, 1992, between the Company and Continental Stock Transfer & Trust Company (the "Rights Agreement"), could make the acquisition of control of the Company by means of a tender offer, open market purchases, a proxy contest, or otherwise, more difficult. Set forth below is a description of such provisions contained in the Restated Certificate of Incorporation, the By-laws and the Rights Agreement. Such description is intended as a summary only and is qualified in its entirety by reference to the Restated Certificate of Incorporation, the By- laws and the Rights Agreement, which are incorporated by reference herein and copies of which may be obtained as described under "AVAILABLE INFORMATION". CLASSIFIED BOARD OF DIRECTORS The Restated Certificate of Incorporation and the By-laws provide that the Board of Directors be divided into three classes of directors, with the classes to be as nearly equal in number as possible. One class of directors is elected each year for a three-year term. The Company believes that including a classified board provision in the Restated Certificate of Incorporation is advantageous to the Company and its stockholders because it enhances the likelihood of continuity and stability in the composition of the Board of Directors and in the policies formulated by the Board of Directors. The Company believes that this, in turn, permits the board to represent more effectively the interests of all stockholders. 11 With a classified Board of Directors, it will generally take a majority stockholder two annual meetings of stockholders to elect a majority of the Board of Directors. As a result, the classified board may discourage proxy contests for the election of directors or purchases of a substantial block of stock because its provisions could operate to prevent obtaining control of the board in a relatively short period of time. The classification provisions could also have the effect of discouraging a third party from making a tender offer or otherwise attempting to obtain control of the Company, even though such an attempt might be beneficial to the Company and its stockholders. In addition, because under the Restated Certificate of Incorporation directors may be removed only for cause, a classified board would delay stockholders who do not agree with the policies of the Board of Directors from replacing a majority of the Board of Directors for two years, unless they can demonstrate the directors should be removed for cause and obtain the requisite vote. NUMBER OF DIRECTORS; REMOVAL; FILLING VACANCIES The Restated Certificate of Incorporation and the By-laws provide that the number of directors be fixed from time to time exclusively by the Board of Directors, but consist of not more than fifteen nor less than three directors. In addition, the Restated Certificate of Incorporation and the By-laws provide that, subject to any rights of holders of any shares of Preferred Stock, if any, a majority of the Board of Directors then in office may fill any vacancies on the Board of Directors. Accordingly, the Board of Directors could temporarily prevent any stockholder from obtaining majority representation on the board by enlarging the size of the board and filling the new directorships with its own nominees. Under the DGCL and the Restated Certificate of Incorporation, a director serving on a classified board may be removed by the stockholders only for cause. Moreover, the Restated Certificate of Incorporation provides that directors may be removed only by the affirmative vote of holders of at least a majority of the voting power of all the then outstanding shares of stock entitled to vote generally in the election of directors (the "Voting Stock"), voting together as a single class. NO STOCKHOLDER ACTION BY WRITTEN CONSENT; SPECIAL MEETINGS The Restated Certificate of Incorporation provides that stockholder action can be taken only at an annual or special meeting of stockholders and prohibits stockholder action by written consent in lieu of a meeting. The Restated Certificate of Incorporation and the By-laws provide that, subject to the rights of holders of any series of Preferred Stock, special meetings of stockholders can be called only by the Board of Directors, the Chairman of the Board of Directors or the President. Stockholders are not permitted to call a special meeting or to require that the Board of Directors call a special meeting of stockholders. Moreover, the business permitted to be conducted at any special meeting of stockholders is limited to the purpose or purposes specified in the written notice of such meeting. The provisions of the Restated Certificate of Incorporation prohibiting stockholder action by written consent may have the effect of delaying consideration of a stockholder proposal until the next annual meeting unless a special meeting is called by the Board of Directors, the Chairman of the Board of Directors or the President. These provisions would also prevent the holders of a majority of the voting power of the Voting Stock from using the written consent procedure to take stockholder action and from taking action by consent without giving all the stockholders of the Company entitled to vote on a proposed action the opportunity to participate in determining such proposed action. Moreover, a stockholder could not force stockholder consideration of a proposal over the opposition 12 of the Board of Directors, the Chairman of the Board of Directors or the President by calling a special meeting of stockholders prior to the time the Board of Directors, the Chairman of the Board of Directors or the President believes such consideration to be appropriate. ADVANCE NOTICE PROVISIONS FOR STOCKHOLDER NOMINATIONS AND STOCKHOLDER PROPOSALS The By-laws establish an advance notice procedure with regard to the nomination, other than by or at the direction of the Board of Directors, of candidates for election as directors (the "Nomination Procedure") and with regard to business to be brought before an annual or special meeting of stockholders of the Company (the "Business Procedure"). The Nomination Procedure provides that, subject to the rights of holders of any series of Preferred Stock, if any, only persons who are nominated by, or at the direction of, the Board of Directors or by a stockholder who has given timely written notice to the Secretary prior to the meeting at which directors are to be elected, will be eligible for election as directors of the Company. The Business Procedure provides that at an annual or special meeting only such business may be conducted as has been specified in the notice of meeting, brought before the meeting by or at the direction of the Board of Directors or by a stockholder who has given timely written notice to the Secretary of such stockholder's intention to bring such business before the meeting. Under the Nomination Procedure or the Business Procedure, to be timely, notice must be received by the Company not less than 75 days nor more than 90 days prior to the annual or special meeting of stockholders, provided, however, that in the event that less than 90 days' notice or prior public disclosure of the meeting date is given or made to stockholders, notice by the stockholder to be timely must be received not later than the fifteenth day following the day on which such notice of the date of the meeting was mailed or such public disclosure was made, whichever first occurs. Under the Nomination Procedure, a stockholder's notice to the Company proposing to nominate a person for election as a director must contain certain information (i) about each proposed nominee, including, without limitation, (a) the name, age, business address and residence address of the nominee, (b) the principal occupation or employment of the nominee, (c) the class, series and number of shares of capital stock of the Company which are beneficially owned by the nominee, and (d) any other information relating to the nominee that is required to be disclosed in solicitations of proxies for election of directors pursuant to the Rules and Regulations of the Commission under the Exchange Act (including such person's written consent to being named in the proxy statement as a nominee and to serving as director if elected) and (ii) about the stockholder proposing to nominate such person, including, without limitation, the name and record address of the stockholder and the class, series and number of shares of capital stock of the Company which are beneficially owned by the stockholder. The Company may require any proposed nominee to furnish such other information as may reasonably be required by the Company to determine the eligibility of such proposed nominee to serve as a director of the Company. Under the Business Procedure, a stockholder's notice relating to the conduct of business other than the nomination of directors at an annual meeting must contain certain information about such business and about the proposing stockholder including, without limitation, a brief description of the business desired to be brought before the meeting, the name and record address of the proposing stockholder, the class, series and number of shares of capital stock of the Company owned by the proposing stockholder and a description of any material interest of the stockholder in such business. If the officer presiding at a meeting determines that a person was not nominated in accordance with the Nomination Procedure, such person will not be eligible for election as a director and such nomination shall be disregarded. If such presiding officer determines that 13 business was not properly brought before such meeting in accordance with the Business Procedure, such business will not be transacted at such meeting. By requiring advance notice of nominations by stockholders, the Nomination Procedure will afford the Board of Directors a meaningful opportunity to consider the qualifications of the proposed nominees and, to the extent deemed necessary or desirable by the Board of Directors, to inform stockholders about such qualification. By requiring advance notice of proposed business, the Business Procedure will provide a more orderly procedure for conducting annual meetings of stockholders and, to the extent deemed necessary or desirable by the Board of Directors, will provide the Board of Directors with a meaningful opportunity to inform stockholders, prior to such meetings, of any business proposed to be conducted at such meetings, together with any recommendation of the Board of Directors' position as to action to be taken with respect to such business, so as to enable stockholders better to determine whether they desire to attend such a meeting or grant a proxy to the Board of Directors as to the disposition of any such business. Although the Restated Certificate of Incorporation and the By-laws do not give the Board of Directors any power to approve or disapprove stockholder nominations for the election of directors or proposals for action, they may have the affect of precluding a contest for the election of directors or the consideration of stockholder proposals if the proper procedures are not followed, and of discouraging or deterring a third party from conducting a solicitation of proxies to elect its own slate of directors or to approve its proposal without regard to whether consideration of such nominees or proposals might be harmful or beneficial to the Company and its stockholders. PREFERRED STOCK The Restated Certificate of Incorporation authorizes the Board of Directors to issue one or more series of Preferred Stock and to determine, with respect to any series of Preferred Stock, the powers, designations, preferences, optional or other rights, if any, and the qualifications, limitations or restrictions thereof. The Company believes that the ability of the Board of Directors to issue one or more series of Preferred Stock will provide increased flexibility in structuring possible future financings and acquisitions, and in meeting other corporate needs which might arise. The authorized shares of Preferred Stock, as well as shares of Common Stock, will be available for issuance without further action by the Company's stockholders, unless such action is required by applicable law or the rules of any stock exchange on which the Company's securities may be listed or applicable rules of any self-regulatory organization. If the approval of the Company's stockholders is not required for the issuance of shares of Preferred Stock or Common Stock, the Board of Directors does not intend to seek stockholder approval. The Board of Directors will make any determination to issue such shares based on its judgment as to the best interests of the Company and its stockholders. The Board of Directors, in so acting, could issue Preferred Stock having terms that could discourage an acquisition attempt or other transaction that some or a majority of the stockholders might believe to be in their best interests or in which stockholders might receive a premium for their stock over the then current market price of such stock. The Company has no present plan to issue any shares of the Preferred Stock, although 80,000 shares of Series A Junior Preferred Stock have been designated and reserved for future issuance pursuant to the Rights Agreement. 14 AMENDMENT OF THE BY-LAWS AND CERTAIN PROVISIONS OF THE RESTATED CERTIFICATE OF INCORPORATION Under the DGCL, the stockholders have the right to adopt, amend or repeal the by-laws of a corporation. In addition, if the certificate of incorporation so provides, the by-laws may be amended by the board of directors. The By-laws provide that they may be amended by the Board of Directors or stockholders, provided that if the amendment is to be adopted by the stockholders, the affirmative vote of the holders of at least 66 2/3 percent of the Voting Stock, voting together as a single class, is required. Other provisions set forth in the Restated Certificate of Incorporation relate to the election and the term of directors, the prohibition of stockholder action without a meeting, calling a stockholders' meeting, the elimination of personal liability of directors and the amendment of the By-laws only by the affirmative vote of the holders of at least 66 2/3 percent of the Voting Stock, voting together as a single class. ANTI-TAKEOVER STATUTE Section 203 of the DGCL prohibits certain transactions between a Delaware corporation and an "interested stockholder," which is defined therein as a person who, together with any affiliates and/or associates of such person, beneficially owns, directly or indirectly, 15 percent or more of the outstanding voting shares of a Delaware corporation. This provision prohibits certain business combinations (defined broadly to include mergers, consolidations, sales or other dispositions of assets having an aggregate value in excess of 10 percent of the consolidated assets of the corporation, and certain transactions that would increase the interested stockholder's proportionate share ownership in the corporation) between an interested stockholder and a corporation for a period of three years after the date the interested stockholder acquired its stock unless (i) the business combination is approved by the corporation's Board of Directors prior to the date the interested stockholder acquired shares, (ii) the interested stockholder acquired at least 85 percent of the voting stock of the corporation in the transaction in which it became an interested stockholder or (iii) the business combination is approved by a majority of the board of directors and by the affirmative vote of 66 2/3 percent of the votes entitled to be cast by disinterested stockholders at an annual or special meeting. The Restated Certificate of Incorporation and By-laws do not exclude the Company from the restrictions imposed under Section 203 of the DGCL. STOCKHOLDER RIGHTS PLAN The following description of the Rights Agreement is qualified in its entirety by reference to the Rights Agreement, which has been incorporated by reference herein and a copy of which may be obtained as described under "AVAILABLE INFORMATION." At a meeting held on January 23, 1992 the Board of Directors adopted the Rights Agreement. The Rights Agreement provides that one Right will be issued with each share of the Common Stock issued (whether originally issued or from the Company's treasury) on or after the date of the Distribution and prior to the Rights Distribution Date (as hereinafter defined). The Rights are not exercisable until the Rights Distribution Date and will expire at the close of business on February 28, 2002 unless previously redeemed by the Company as described below. When exercisable, each Right entitles the owner to purchase from the Company one-hundredth of a share of Series A Junior Participating Preferred Stock at a purchase price of $100. 15 Except as described below, the Rights will be evidenced by all the Common Stock certificates and will be transferred with the Common Stock certificates, and no separate Rights certificates will be distributed. The Rights will separate from the Common Stock and a "Rights Distribution Date" will occur upon the earlier of (i) 10 days following a public announcement that a person or group of affiliated or associated persons (an "Acquiring Person") has acquired, or obtained the right to acquire, beneficial ownership of 15 percent or more of the outstanding shares of the Common Stock (the "Stock Acquisition Date") and (ii) 10 business days following the commencement of a tender offer or exchange offer that would result in a person or group becoming an Acquiring Person. After the Rights Distribution Date, Rights certificates will be mailed to holders of record of the Common Stock as of the Rights Distribution Date and thereafter the separate Rights certificates alone will represent the Rights. The Series A Junior Participating Preferred Stock issuable upon exercise of the Rights will be entitled to a minimum preferential quarterly dividend payment of $.01 per share and will be entitled to an aggregate dividend of 100 times the dividend, if any, declared per share of Common Stock. In the event of liquidation, the holders of the Series A Junior Participating Preferred Stock will be entitled to a minimum preferential liquidation payment of $1 per share and will be entitled to an aggregate payment of 100 times the payment made per share of the Common Stock. Each share of Series A Junior Participating Preferred Stock will have 100 votes and will vote together with the Common Stock. In the event of any merger, consolidation or other transaction in which shares of the Common Stock are changed or exchanged, each share of Series A Junior Participating Preferred Stock will be entitled to receive 100 times the amount received per share of the Common Stock. These rights are protected by customary antidilution provisions. Because of the nature of the Series A Junior Participating Preferred Stock's dividend, liquidation and voting rights, the value of a share of Series A Junior Participating Preferred Stock purchasable upon exercise of each Right should approximate the value of one share of the Common Stock. In the event that a person becomes an Acquiring Person (except pursuant to a tender offer or an exchange offer for all outstanding shares of the Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company and who are not representatives, nominees, affiliates or associates of an Acquiring Person, to be (i) at a price which is fair to the Company stockholders and (ii) otherwise in the best interests of the Company and its stockholders (a "Qualifying Offer")), each holder of a Right will thereafter have the right to receive, upon the exercise thereof at the then current exercise price, the Common Stock (or, in certain circumstances, cash, property or other securities of the Company) having a value equal to two times the exercise price of the Right. Notwithstanding any of the foregoing, following occurrence of any such event, all Rights that are or (under certain circumstances specified in the Rights Agreement) were beneficially owned by any Acquiring Person (or certain related parties) will be null and void. However, Rights are not exercisable following the occurrence of the event set forth above until such time as the Rights are no longer redeemable by the Company as set forth below. In the event that, at any time following the Stock Acquisition Date, (i) the Company is acquired in a merger or other business combination transaction in which the Company is not the surviving entity or the Common Stock is changed or exchanged (other than a merger which follows a Qualifying Offer and satisfies certain other requirements) or (ii) 50 percent or more of the Company's assets or earning power is sold or transferred, each holder of a Right (except Rights which previously have been voided as set forth above) shall thereafter have the right to receive, upon the exercise 16 thereof at the then current exercise price common stock of the acquiring company having a value equal to two times the exercise price of the Right. At any time until 10 days following the Stock Acquisition Date, the Company may redeem the Rights in whole, but not in part, at a price of $.01 per Right. Immediately upon the action of the Board of Directors ordering redemption of the Rights, the Rights will terminate and the only right of the holders of the Rights will be to receive the $.01 redemption price. Until a Right is exercised, the holder thereof, as such, will have no rights as a stockholder of the Company, including without limitation, the right to vote or to receive dividends. While the distribution of the Rights will not be taxable to stockholders or to the Company, stockholders may, depending upon the circumstances, recognize taxable income in the event that the Rights become exercisable for the Common Stock (or other consideration) or for common stock of the acquiring company as set forth above. Other than those provisions relating to the principal economic terms of the Rights, any of the provisions of the Rights Agreement may be amended by the Board of Directors prior to the Rights Distribution Date. After the Rights Distribution Date, the provisions of the Rights Agreement may be amended by the Board of Directors in order to cure any ambiguity, to make changes which do not adversely affect the interests of holders of Rights (excluding the interests of any Acquiring Person) or to shorten or lengthen any time period under the Rights Agreement, provided that no amendment to adjust the time period governing redemption shall be made at such time as the Rights are not redeemable. The Rights have certain anti-takeover effects as they will cause substantial dilution to a person or group that acquires a substantial interest in the Company without the prior approval of the Board of Directors. Among the effects is that the Rights could discourage a takeover attempt that might otherwise allow the holders of Common Stock to sell such Common Stock at a premium to the then current market price or which might otherwise be beneficial to stockholders. LEGAL MATTERS The validity of the shares of Common Stock and the associated Rights offered hereby will be passed upon for the Company by Richard J. Lubasch, Senior Vice President, General Counsel and Secretary of the Company. Mr. Lubasch owns shares of the Company's capital stock and options to acquire additional shares of the Company's capital stock. EXPERTS The consolidated financial statements of the Company appearing in the Company's Annual Report (Form l0-K) for the year ended December 31, 1995 have been audited by Ernst & Young, LLP, independent auditors, as set forth in their report thereon included therein and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such report given upon the authority of such firm as experts in accounting and auditing. 17 - -------------------------------------------------------------------------------- NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES OTHER THAN THOSE TO WHICH IT RELATES OR AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, TO ANY PERSON IN ANY JURISDICTION WHERE SUCH AN OFFER OR SOLICITATION WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF. ----------- TABLE OF CONTENTS
Page - ------------------------------------------------ Available Information........................... 2 Incorporation of Certain Documents by Reference..................................... 2 Risk Factors.................................... 4 The Company..................................... 7 Recent Developments............................. 8 Selling Stockholders............................ 9 Plan of Distribution............................ 9 Use of Proceeds................................. 10 Description of Capital Stock.................... 10 Purposes and Effects of Certain Provisions of the Restated Certificate of Incorporation, the By-laws and the Rights Agreement............... 11 Legal Matters................................... 17 Experts......................................... 17
- -------------------------------------------------------------------------------- 820,404 SHARES CELLULAR COMMUNICATIONS OF PUERTO RICO, INC. COMMON STOCK ___________________ PROSPECTUS ___________________ May __, 1996 ================================================================== PART II INFORMATION NOT REQUIRED IN THE PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION ------------------------------------------- Securities and Exchange Commission filing fee $ 7,673.61 Exchange Listing Fees $ 16,500.00* Legal fees and expenses $ 20,000.00 Accounting Fees and Expenses $ 5,000.00 Miscellaneous $ 10,000.00* ----------- Total $ 59,173.61 =========== _____________ * Estimated. ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS ----------------------------------------- Section 145 of the General Corporation Law of the State of Delaware (the "DGCL") grants each corporation organized thereunder, such as the Registrant, the power to indemnify its directors and officers against liabilities for certain of their acts. Article VIII of the Registrant's By-laws provides for indemnification of directors and officers of the Registrant to the full extent permitted by the DGCL. Section 102(b) (7) of the DGCL permits a provision in the certificate of incorporation of each corporation organized thereunder, such as the Registrant, eliminating or limiting, with certain exceptions, the personal liability of a director to the corporation or its stockholders for monetary damages for certain breaches of fiduciary duty as a director. Article TENTH of the Registrant's Restated Certificate of Incorporation eliminates the personal liability of directors to the full extent permitted by the DGCL. The foregoing statements are subject to the detailed provisions of Sections 145 and 102(b) (7) of the DGCL and Article TENTH of the Registrant's Restated Certificate of Incorporation and Article VIII of the Registrant's By- laws. ITEM 16. EXHIBITS -------- 2.1 Agreement and Plan of Reorganization, dated December 26, 1995, by and among Registrant and its successors and assigns, HMZ San Juan Inc., a Connecticut corporation, and its successors and assigns, Henry Zachs, Newton Brenner, Christopher Jenkins, and CCPR Services, Inc., a Delaware corporation, and its successors and assigns 2.2 Agreement and Plan of Reorganization, dated December 26, 1995, by and among Registrant and its successors and assigns, National Telephone Company, a Delaware corporation, and its successors and assigns, Waring Partridge, and CCPR Services, Inc., a Delaware corporation, and its successors and assigns 2.3 Agreement, dated December 26, 1995, by and among Registrant and its successors and assigns, Pacific Cellular Telephone Systems, a California limited partnership, and its successors and assigns, David Abel, Estate of Danny Arnold, Estate of Robert Austin, The Ed and Natalie Friendly Trust, Nathan Golden, Jeffrey Gordon, Eugene Goodwin, Rabbi Leon Kahane, Frank Kilpatrick, Lawrence Family Trust, Perry Leff, Donald Meaders, George Newhart, Kenneth Newmark, Susan Newmark, Pierce O'Donnell, Don Rickles, Barbara Rickles, Ronald Rizzo, Anne Roberts, Larry Scharf, Bart Sokolow, Ronald Shlensky, Anthony Thompson, Tayemi Thompson and CCPR Services, Inc., a Delaware corporation, and its successors and assigns 3.1 Registrant's Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to Registrant's Registration Statement on Form S- 1, File No. 33-44420) 3.2 Registrant's By-Laws (incorporated by reference to Exhibit 3.2 to Registrant's Registration Statement on Form S-1, File No. 33-44420) 3.3 Certificate of Designation with respect to Series A Junior Participating Preferred Stock of the Registrant (incorporated by reference to Exhibit 4.1 to Registrant's Registration Statement on Form S-1, File No. 33-44420) 4.1 Specimen of Common Stock Certificate (incorporated by reference to Exhibit 4.1, to Registrant's Annual Report on Form 10-K for the year ended December 31, 1991, File No. 0-19869) 4.2 Rights Agreement, dated as of January 24, 1992, by and between Registrant and Continental Stock Transfer & Trust Company, as Rights Agent (incorporated by reference to Exhibit 4.2 to Registrant's Registration Statement on Form S-1, File No. 33-44420) 5.1 Opinion of Richard J. Lubasch, Esq., General Counsel to Registrant, regarding the legality of the shares being registered hereby 23.1 Consent of Ernst & Young, LLP, independent auditors to the Registrant 23.2 Consent of Richard J. Lubasch, Esq., General Counsel to Registrant (included in Exhibit 5.1) 24.1 Powers of Attorney (included on signature page) ITEM 17. UNDERTAKINGS ------------ (a) The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement to include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-2 (c) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. II-3 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF NEW YORK, STATE OF NEW YORK, ON MAY 8, 1996. CELLULAR COMMUNICATIONS OF PUERTO RICO, INC. (Registrant) By: /s/ Richard J. Lubasch --------------------------------- Richard J. Lubasch Senior Vice President, General Counsel and Secretary POWER OF ATTORNEY We, the undersigned directors and officers of Cellular Communications of Puerto Rico, Inc. and each of us, do hereby constitute and appoint George S. Blumenthal and Richard J. Lubasch our true and lawful attorneys-in-fact and agents, with power of substitution, to do any and all acts and things in our name and behalf in our capacities as directors and officers and to execute any and all instruments for us and in our names in the capacities indicated above, which said attorneys-in-fact and agents may deem necessary or advisable to enable said corporation to comply with the Securities Act of 1933, as amended, and any rules, regulations, and requirements of the Securities and Exchange Commission in connection with this Registration Statement, including specifically, but without limitation, power and authority to sign for us or any of us in our names in the capacities indicated below, and any and all amendments (including post-effective amendments) hereto, and we do hereby ratify and confirm all that the said attorneys-in-fact and agents, or their substitute or substitutes, shall do or cause to be done by virtue hereof. PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED.
Name Title Date - ---------------------- ------------------------------ -------------------- /s/ George S. Blumenthal Chief Executive Officer, May 8, 1996 - ------------------------ Treasurer and Director George S. Blumenthal (Principal Executive Officer) /s/ J. Barclay Knapp President and Director May 8, 1996 - ------------------------ (Principal Operating and J. Barclay Knapp Financial Officer)
II-4 /s/ Gregg Gorelick Vice President - Con- May 8, 1996 - ----------------------- troller (Principal Gregg Gorelick Accounting Officer) /s/ Sidney R. Knafel Director May 8, 1996 - ----------------------- Sidney R. Knafel /s/ Ted H. McCourtney Director May 8, 1996 - ----------------------- Ted H. McCourtney /s/ Del Mintz Director May 8, 1996 - ----------------------- Del Mintz /s/ Alan J. Patricof Director May 8, 1996 - ----------------------- Alan J. Patricof /s/ Warran Potash Director May 8, 1996 - ----------------------- Warren Potash
II-5 EXHIBIT INDEX Exhibit Description Page No. - ------- ----------- -------- 2.1 Agreement and Plan of Reorganization, dated December 26, 1995, by and among Registrant and its successors and assigns, HMZ San Juan Inc., a Connecticut corporation, and its successors and assigns, Henry Zachs, Newton Brenner, Christopher Jenkins, and CCPR Services, Inc., a Delaware corporation, and its successors and assigns 2.2 Agreement and Plan of Reorganization, dated December 26, 1995, by and among Registrant and its successors and assigns, National Telephone Company, a Delaware corporation, and its successors and assigns, Waring Partridge, and CCPR Services, Inc., a Delaware corporation, and its successors and assigns 2.3 Agreement, dated December 26, 1995, by and among Registrant and its successors and assigns, Pacific Cellular Telephone Systems, a California limited partnership, and its successors and assigns, David Abel, Estate of Danny Arnold, Estate of Robert Austin, The Ed and Natalie Friendly Trust, Nathan Golden, Jeffrey Gordon, Eugene Goodwin, Rabbi Leon Kahane, Frank Kilpatrick, Lawrence Family Trust, Perry Leff, Donald Meaders, George Newhart, Kenneth Newmark, Susan Newmark, Pierce O'Donnell, Don Rickles, Barbara Rickles, Ronald Rizzo, Anne Roberts, Larry Scharf, Bart Sokolow, Ronald Shlensky, Anthony Thompson, Tayemi Thompson and CCPR Services, Inc., a Delaware corporation, and its successors and assigns 3.1 Registrant's Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to Registrant's Registration Statement on Form S-1, File No. 33-44420) 3.2 Registrant's By-Laws (incorporated by reference to Exhibit 3.2 to Registrant's Registration Statement on Form S-1, File No. 33-44420) 3.3 Certificate of Designation with respect to Series A Junior Participating Preferred Stock of the Registrant (incorporated by reference to Exhibit 4.1 to Registrant's Registration Statement on Form S-1, File No. 33- 44420) 4.1 Specimen of Common Stock Certificate (incorporated by reference to Exhibit 4.1, to Registrant's Annual Report on Form 10-K for the year ended December 31, 1991, File No. 0-19869) 4.2 Rights Agreement, dated as of January 24, 1992, by and between Registrant and Continental Stock Transfer & Trust Company, as Rights Agent (incorporated by reference to Exhibit 4.2 to Registrant's Registration Statement on Form S-1, File No. 33-44420) 5.1 Opinion of Richard J. Lubasch, Esq., General Counsel to Registrant, regarding the legality of the shares being registered hereby 23.1 Consent of Ernst & Young, LLP, independent auditors to the Registrant 23.2 Consent of Richard J. Lubasch, Esq., General Counsel to Registrant (included in Exhibit 5.1) 24.1 Powers of Attorney (included on signature page) II-6 EX-2.1 2 FORM OF AGREEMENT-HMZ SAN JUAN INC. EXHIBIT 2.1 122695 AGREEMENT AND PLAN OF REORGANIZATION ------------------------------------ This Agreement and Plan of Reorganization (the "Agreement") is made and entered into as of December 26, 1995, by and among HMZ San Juan Inc., a Connecticut corporation, its successors and assigns ("Assignor"), Henry Zachs (owning 98% of Assignor), Newton Brenner (owning 1% of Assignor), Christopher Jenkins (owning 1% of Assignor), (each a "Stockholder"), Cellular Communications of Puerto Rico, Inc., a Delaware corporation, its successors and assigns ("Cellular") and CCPR Services, Inc., a Delaware corporation, its successors and assigns ("CCPR"). Recitals -------- WHEREAS, Assignor owns a 2.622% interest as a partner (the "Interest"), which constitutes all or substantially all of the assets of Assignor, in San Juan Cellular Telephone Company, a general partnership (the "Partnership") which holds the license from the Federal Communications Commission and the Puerto Rico Telephone Regulatory Commission to operate the nonwireline Block A cellular communications system for the San Juan-Caguas, Puerto Rico Metropolitan Statistical Area. WHEREAS, Assignor wishes to transfer and assign the Interest to CCPR in exchange for shares of Common Stock of Cellular ("Shares") pursuant and subject to the terms and conditions of this Agreement. THEREFORE, in consideration of the mutual obligations set forth in this Agreement, and subject to all conditions set forth herein, the parties agree as follows: 1. Assignment of Interest: (a) On the Closing Date (as defined in ---------------------- Section 2), Assignor shall assign and transfer to CCPR all of Assignor's right, title and interest to the Interest, free and clear of all encumbrances, liens, pledges, charges, claims, security interests and liabilities ("Liens") other than those expressly assumed herein by CCPR. The assignment shall include, without being limited to, Assignor's entire interest in the Partnership, including but not limited to the Interest, including the associated capital account in the Partnership and all related rights with regard to Partnership voting, profits, losses, and distributions. (b) In consideration for the assignment contemplated by this Agreement, CCPR shall deliver a stock certificate evidencing 350,000 Shares registered in the name of Assignor. In the event that on or prior to the Closing Date (a) Cellular shall pay any dividend or make any other distribution respecting its shares of common stock or (b) the holders of its shares of common stock shall be entitled or required to exchange their shares for other securities or consideration, by reason of a reorganization transaction with another entity or otherwise, then Assignor shall be entitled to receive (i) in addition to the 350,000 Shares, such dividend or other distribution as would be payable with respect to the foregoing 350,000 Shares or (ii) such other securities or consideration as would be exchanged for the foregoing 350,000 Shares, in each case to the effect that Assignor shall receive the funds, securities and consideration that Assignor would have received had it held the Shares to be issued at the Closing as at the date hereof. (c) This Agreement and Plan of Reorganization is intended to constitute a Plan of Reorganization within the meaning of Section 368 of the Internal Revenue Code of 1986, as amended (the "Code"), and the transactions contemplated hereby are intended to qualify as a "reorganization" within the meaning of subsection (a) of such Section 368. 2. Closing Date and Place. The closing of the transactions contemplated by ---------------------- this Agreement (the "Closing") shall occur as promptly as practicable after the execution of this Agreement and satisfaction of the conditions set forth in Section 8 hereof, at the offices of CCPR, 110 East 59th Street, 26th Floor, New York, New York 10022. 3. Mutual Representations and Warranties. Each of Cellular and CCPR -------------------------------------- represent and warrants to Assignor and each Stockholder and each of Assignor and each Stockholder represents and warrants to CCPR and Cellular that: (a) Each (if not a natural person) is duly formed, validly existing, and in good standing under the state and local laws to which it is subject; (b) Each has the right, power and unconditional authority, and has taken all necessary action, including all necessary actions on the part of its stockholders, to execute, deliver, and fully perform its obligations under this Agreement; (c) This Agreement is binding and enforceable against the warranting party; and (d) The execution, delivery and performance of the obligations under this Agreement do not constitute a material violation, breach or default under any law, regulation, ordinance, judgment, order, agreement, charter, articles or certificate of incorporation, by-laws, or other instrument or obligation to which the warranting party is subject. 4. Consent to Partnership Agreement. In accordance with Section 9.1 (d) of --------------------------------- the Partnership's Partnership Agreement (the "Partnership Agreement"), CCPR consents to its admission to the Partnership on the Closing Date as a Substitute Partner with respect to the interest of the Assignor. CCPR confirms that upon such admission it shall be bound by all of the terms and provisions to the Partnership Agreement, as the same has been and may be amended. 5. Assumption of Assignor's Obligations. CCPR shall assume and be bound on ------------------------------------- the Closing Date to perform all of the obligations, terms, covenants and conditions of the Assignor under the Partnership Agreement, whether arising before or after the Closing Date, with respect to each Interest assigned. 6. Assiqnor's and Stockholder's Representations and Warranties. Each of ----------------------------------------------------------- Assignor and each Stockholder represents and warrants to CCPR and Cellular that: (a) Assignor is the lawful owner of the Interest, free and clear of all encumbrances, liens, pledges, charges, claims, security interests and liabilities; (b) The Information (as defined in Section 10), if any, as of the date of its delivery to CCPR and as of the date of any Prospectus Delivery (as defined in Section 10) will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made in the Information not misleading; (c) It is not aware of any material adverse information concerning the Interest or the Partnership or its business, financial condition or otherwise that has not been disclosed to CCPR; (d) Each Stockholder, with respect to himself, is acquiring the Shares solely for its own account, for investment and not with a view to any resale, distribution or public offering thereof; (e) Each Stockholder, with respect to himself, understands that Cellular's transfer agent or other agent will be given appropriate instruction prohibiting any transfer of the Shares which would violate the Securities Act of 1933, as amended (the "Securities Act") and that the certificates for the Shares will bear the following legend: "The security represented by this certificate has not been regis- tered under the Securities Act of 1933, as amended, or under state securities laws. The security represented by this certificate may not be resold or transferred unless registered or exempt from registration under the Securities Act of 1933, as amended, and applicable state securities laws."; (f) Each Stockholder, with respect to himself, understands that it must hold the Shares indefinitely unless it is registered under the Securities Act, or an exemption from registration becomes available; (g) Each Stockholder, with respect to himself, has had ample opportunity to ask questions of, and receive answers from, officers of Cellular and CCPR concerning CCPR, Cellular and their respective businesses, and to obtain any additional information it might request with respect to CCPR, Cellular and their respective businesses, and each Stockholder acknowledges that CCPR and Cellular have made available to it all documents and information relating to the Shares, requested by or on behalf of each Stockholder, including but not limited to, Cellular's annual report on Form 10-K for the-year ended 1994 and its quarterly reports on Form 10-Q for the quarters ended March 31, June 30 and September 30, 1995; (h) Each Stockholder, with respect to himself, understands that (i) the offering and sale of the Shares is intended to be exempt from registration under the Securities Act as a private placement and (ii) there is no existing public or other market for the Shares, and there can be no assurance that each Stockholder will be able to sell or dispose of the Shares; (i) Each Stockholder, with respect to himself, either alone or together with its advisors has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of its investment in the Shares, and each Stockholder is capable of bearing the economic risk of such investment, including a complete loss of its investment; and (j) Each Stockholder, with respect to himself, is not a representative of an alien, a corporation organized under the laws of any foreign government, a corporation of which any officer or director is an alien or more than one fifth of its capital stock is owned or voted by any of the foregoing, or a corporation directly or indirectly controlled by another corporation of which any officer or more than one-fourth of the directors are aliens or of which more than one- fourth of its capital stock is owned or voted by the foregoing, within the meaning of Section 310 of the Communications Act of 1934, as amended. 7. CCPR's Representation and Warranties. (a) CCPR and Cellular each ------------------------------------ represents and warrants to the Stockholders that the Registration Statement, when filed, will not contain any untrue statement of a material fact or omit to state a material fact required to be stated or necessary in order to make this statement therein not misleading. (b) CCPR and Cellular represent that Cellular is 100% direct parent of CCPR and CCPR shall make no transfer or disposition of the Interest which would impair the transaction from meeting the requirements of a reorganization under Section 368(a) of the Code. (c) CCPR and Cellular each represent and warrant that each has adequate information concerning the interest in the Partnership, its business and financial condition and is not relying on any representation of any Stockholder respecting the business of the Partnership; that CCPR is acquiring the Interest solely for its own account for investment and not with a view to any resale, distribution or public offering thereof. 8. Conditions to Closing. (a) The following are conditions precedent to --------------------- each party's obligation to close the transactions contemplated by this Agreement: (i) All required authorizations, orders, grants, consents, permissions or approvals ("Approvals") of any governmental entity with jurisdiction over the transactions contemplated by this Agreement ("Governmental Agencies") shall have been received and shall remain in effect; (ii) The other parties' representations and warranties shall be true and correct, and each other party shall have performed all of its covenants and obligations due to be performed as of the Closing in accordance with this Agreement; (iii) The consummation of the transactions contemplated by this Agreement shall not be in violation of any law, rule or regulation and shall not be subject to any injunction or restraining order; and (iv) Any waiting period (and any extension thereof) applicable to the consummation of the transaction contemplated by this Agreement under the Hart-Scott-Rodino Antitrust Improvements Act (the "HSR Act") shall have expired or been terminated; (b) It shall be a condition precedent to CCPR's obligation to close the transactions contemplated by this Agreement that (i) it and its counsel have had an opportunity to conduct due diligence as to the representations set forth in this Agreement and CCPR shall be satisfied as to the accuracy of such representations and (ii) that CCPR shall have entered into certain agreements with National Telephone Company and Pacific Cellular Telephone Systems dated as of the date hereof, and all conditions to closing such agreements shall have been satisfied. (c) It shall be a condition precedent to Stockholders' obligation to close the transactions contemplated by this Agreement that (i) Cellular have provided to Stockholders and their counsel an opportunity to conduct due diligence as to the material accuracy of the financial representations set forth in operating reports of San Juan Telephone Company heretofore delivered to Assignor or any of the Stockholders; and (ii) Cellular shall not have agreed upon or engaged in a transaction which would transfer control or equity interests in all or a material part of the San Juan Cellular Telephone Company, except pursuant to this Agreement or similar agreements with Pacific Cellular Telephone Systems and National Telephone Company or as part of a transaction which would involve transfer of control of Cellular or the transfer or exchange of equity interest in Cellular. 9. Governmental Filings. Each of the parties hereto shall (i) make promptly -------------------- its respective filings, and thereafter make any other required submissions, under the HSR Act or otherwise, with respect to the transactions contemplated by this Agreement and (ii) use its reasonable best efforts to take, or cause to be taken, all appropriate action, and to do or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective such transactions, including, without limitation, using its reasonable best efforts to obtain all Approvals of Governmental Agencies as are required for the consummation of such transactions and to fulfill the conditions to the Agreement. Each of the parties hereto will use its reasonable efforts to lift or rescind any injunction or restraining order described in clause (a)(iii) under Section 8. 10. Registration Statement. (a) Following the Closing, Cellular will use ---------------------- all reasonable efforts to cause to be filed and declared effective as soon as reasonably practicable a Registration Statement to permit the public resale of the Shares acquired by the Stockholders pursuant hereto (the "Resale"). Any obligation to permit the Resale under the Registration Statement shall expire on the earliest of (i) the date on which all Shares acquired hereunder have been disposed of by the Stockholders, (ii) the date on which all Shares acquired pursuant hereto may be freely sold to the public without restriction under the Securities Act or (iii) the date which is two years after the Closing (or, in the event that the holding period under Rule 144(d) of the Securities Act is extended, such later date as to correspond with such extended holding period) (the "Expiration"). If a Stockholder is deemed to be an "affiliate" of CCPR, such Stockholder will provide all information necessary with respect to the Stockholders and any proposed Resale necessary for the Registration Statement ("Information") and will comply with the prospectus delivery requirements of the Securities Act and rules promulgated thereunder ("Prospectus Delivery"). (b) If at any time prior to the filing of the Registration Statement or the Expiration, (i) counsel to Cellular has determined in good faith that the compliance by Cellular with its disclosure obligations in connection with the Registration Statement would require the disclosure of material information which Cellular has a bona fide business purpose for preserving as confidential ---- ---- or (ii) Cellular then is unable to comply with its disclosure obligations or SEC requirements in connection with the Registration Statement, then in either such case Cellular shall not be required to file the Registration Statement or maintain the effectiveness thereof or amend or supplement the Registration Statement for a period (an "Information Delay Period") expiring upon the earlier to occur of (A) the date on which such material information is disclosed to the public or ceases to be material or Cellular is able to so comply with its disclosure obligations and SEC requirements or (B) 30 days, in the case of clause (i) above, or 45 days, in the case of clause (ii) above, after counsel to Cellular makes such good faith determination. (c) Cellular will give prompt written notice to Stockholders of the commencement of an Information Delay Period (and duration). Each Stockholder, by his acceptance of any Shares, agrees that, upon receipt of such notice it will forthwith discontinue disposition of the Shares pursuant to the Registration Statement, and will not deliver any prospectus forming a part thereof in connection with any sale of Shares until the expiration of an Information Delay Period. (d) Notwithstanding anything in this Agreement to the contrary, if the Registration Statement referred to in this Section 10 has not been declared effective by July 1, 1996, then Cellular shall issue to Assignor (or its assigns) a stock certificate or stock certificates evidencing an aggregate of such number of additional Shares as shall equal 5% of the amount set forth in Section 1(b) hereof. If the Registration Statement referred to in this Section 10 has not been declared effective by December 1, 1996, then Assignor (or its assigns) shall have the right by giving written notice to Cellular to require Cellular to purchase from Assignor in 1996 up to 100,000 Shares that were issued to Assignor pursuant to this Agreement. The price per share in any such redemption shall be equal to the average of the daily closing price on NASDAQ (or any exchange or other securities trading market which is the principal place of trading for Cellular's common stock at the time) for the seven trading days immediately preceding the date on which notice of the redemption is given. Payment for such Shares shall be made not later than three business days following delivery of such notice. (e) If at any time Cellular shall file an amendment to the Registration Statement, Cellular shall promptly deliver copies of such amendment to the Stockholders . 11. Indemnification bv the Stockholder. Cellular, CCPR and its affiliates ---------------------------------- shall jointly and severally be indemnified and held harmless by Assignor and each Stockholder against any and all losses, expenses, damages, injuries, judgments, claims and liabilities, including reasonable attorney's fees and litigation expenses ("Losses"), arising from (a) Assignor's ownership of its Interest prior to the Closing; (b) any material misrepresentation, breach of warranty, or nonperformance of any obligation hereunder on the part of Assignor or any Stockholder; (c) any other act or omission on the part of Assignor or any Stockholder, its agents or representatives in connection with its Interest in any Partnership; (d) any agreement, commitment or obligation of Assignor or any Stockholder undertaken in connection with the Interest or the Partnership (and, in the case of Assignor, arising prior to the Closing) which CCPR does not expressly and specifically assume either hereunder or in writing prior to the Closing, (e) Assignor's ownership, operation or conduct of any asset or business other than the Interest, (f) any liability for any federal, state or local tax (including interest, penalty or addition thereto) of Assignor incurred on or prior to the Closing, or (g) based on an untrue statement of fact in the Information or alleged omission to state therein a material fact necessary to make the statements therein not misleading, or the failure of any Stockholder to effect a Prospectus Delivery; provided, that no indemnification shall be due to Cellular or any of its affiliates for any Loss resulting solely from an action taken by Cellular in its capacity as managing general partner of the Partnership. Notwithstanding anything in this Agreement to the contrary, each of Cellular, CCPR and its affiliates will only seek indemnity for losses hereunder from each Stockholder in proportion to his ownership percentage set forth on the first page hereof . 12. Indemnification by Cellular and CCPR. Assignor and each Stockholder ------------------------------------ shall be indemnified and held harmless by Cellular and CCPR against any and all losses, arising from (a) CCPR's ownership of the Interest; (b) any material misrepresentation, breach of warranty, or nonperformance of any obligation hereunder on the part of Cellular or CCPR; (c) any other act or omission on the part of CCPR or its affiliates in connection with its interest in the Partnership or (d) arising out of or based upon an untrue statement of fact in the Registration Statement or arising out of or based upon the omission or alleged omission to state therein a material fact necessary to make the statements therein not misleading, other than those arising out of any Information. 13. Continuing Effectiveness. Each party's representations shall be true ------------------------ and correct, and each party's warranties and indemnifications shall be in full force and effect on the date that the party executes this Agreement and, to the extent the same are applicable at Closing, as if made on the date and time of such Closing. Each party's representations, warranties and indemnifications shall survive the Closing and shall be fully actionable and enforceable thereafter. In the event that a party becomes aware of any information, occurrence or omission which would alter any of its representations or would impair its ability to perform any of its warranties, indemnifications, or obligations hereunder, or would possibly lead to any right to indemnification, then the party shall notify the other party immediately of such information, occurrence or omission and shall disclose all relevant facts. The other party shall have the opportunity to defend itself, if necessary, in any resulting proceeding. The settlement of any such proceeding or threatened proceeding shall be subject to the other party's prior consent if the other party is to be subject to any obligation to indemnify against the cost of the settlement. 14. Expenses. Cellular, CCPR, Assignor and each Stockholder shall each bear -------- their own legal and other fees and expenses associated with the preparation, execution and consummation of this Agreement and the filing and prosecution of any required Governmental Agency submissions, provided that CCPR shall pay any HSR filing fees to the extent applicable. CCPR will bear all costs associated with the preparation of the Registration Statement except that each Stockholder shall bear broker's fees or discounts associated with a resale of the Shares acquired by such Stockholder pursuant hereto. 15. Termination as of Right. Notwithstanding any other provision herein or ----------------------- termination, this Agreement may be terminated, without liability of any kind, at the option of either Assignor or CCPR, upon written notice to the other if there is no Closing in accordance with all the terms of this Agreement on or before March 31, 1996. 16. Brokers Fees. Each party represents and warrants that it has not ------------ engaged any broker or finder with respect to this transaction and that no brokerage fee, commission, or finder's fee shall be due in connection with the transaction. 17. Notices. All notices or other communications to parties under this ------- Agreement shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by cable, telecopy, facsimile or other standard form of telecommunications, or by registered or certified mail or Federal Express delivery, postage prepaid, return receipt requested, addressed as follows: If to Assignor or the Stockholders: c/o Brenner, Saltzman & Wallman 271 Whitney Avenue New Haven, CT 06511 Att: Newton Brenner, Esq. If to Cellular or CCPR: 110 East 59th Street, 26th Floor New York, New York 10022 Attention: Richard J. Lubasch 18. Governing Law. This Agreement shall be interpreted, enforced and ------------- governed in accordance with the laws of New York (without regard to the provisions thereof on the conflict of laws). 19. Binding Effect. This Agreement shall bind and benefit the parties, -------------- their representatives, and their permitted assignees and successors in interest. 20. Most Favored Treatment. In the event that at any time in 1996, ---------------------- Cellular, CCPR, the Partnership or an affiliate, enters into transaction with any person or entity that owns a minority interest in the Partnership, on more favorable economic terms than provided for in this Agreement (including by way of illustration, but not by way of limitation, a greater number of Shares) then this Agreement shall be amended in such manner as is necessary to incorporate such more favorable terms. Any such amendment shall be deemed effective as of the date of this Agreement. 21. Entire Agreement. This Agreement constitutes the entire agreement ---------------- between the parties governing this Transaction. No prior agreement or representation, whether verbal or written, shall have any force or effect. This Agreement may be modified, superseded or cancelled only in writing signed by each of the parties to be affected. IN WITNESS WHEREOF, this Agreement has been duly executed as of the first date above written. CCPR SERVICES, INC. By: /s/ ---------------------------- Senior Vice President CELLULAR COMMUNICATIONS OF PUERTO RICO, INC. By: /s/ --------------------------- Senior Vice President HMZ SAN JUAN, INC. By: /s/ --------------------------- President STOCKHOLDERS /s/ ------------------------------- Henry Zachs /s/ ------------------------------- Newton Brenner /s/ ------------------------------- Christopher Jenkins HMZ San Juan Inc. c/o Brenner, Saltzman & Wallman 271 Whitney Avenue New Haven, CT 06511 December 26, 1995 Cellular Communications Of Puerto Rico, Inc. 110 East 59th Street 26th Floor New York, NY 10022 Dear Sir: The undersigned, HMZ San Juan Inc. (the "Seller"), a Connecticut corporation and Henry Zachs, Christopher Jenkins and Newton Brenner, all of the stockholders thereof desire to exchange a partnership interest in San Juan Cellular Telephone Company (the "Interest") for common stock of Cellular Communications of Puerto Rico, Inc. (the "Corporation"). The undersigned acknowledge, and understand that the Corporation is relying upon such acknowledgement, that (i) undersigned are sophisticated with knowledge of, and an opportunity to inquire with respect to, the cellular industry generally and the Corporation's financial position, business, operation and prospects and (ii) the Corporation is in possession of additional nonpublic information (collectively, the "Company Information") with respect to the Corporation's business, financial condition, operations and prospects, including potential transactions which may involve a change of control ("Potential Control Transactions"). The Corporation has assured the undersigned that none of the Company Information relates to a potential transaction which would transfer control or equity interests in all or a material part of the San Juan Cellular Telephone Company, except pursuant to an agreement with the undersigned or similar agreements with Pacific Cellular Telephone Systems and National Telephone Company or as part of a transaction which would involve transfer of control of Cellular or the transfer or exchange of equity interests in the Corporation. Subject to and in reliance upon the foregoing assurances, each of the undersigned acknowledges that, after careful consideration and the opportunity to consult with its counsel and other advisors, he and it is prepared to exchange the Interests for stock of Corporation without receipt of the Company's information. Very truly yours, HMZ San Juan, Inc. By: /s/ ----------------------------- Its President /s/ /s/ - ----------------------- --------------------------------- Christopher Jenkins Henry Zachs /s/ --------------------------------- Newton Brenner ESCROW AGREEMENT THIS AGREEMENT made and entered into as of the 27th day of December 1995 by and among: Brenner, Saltzman & Wallman, with offices at 271 Whitney Avenue, New Haven, Connecticut 06511 (the "Escrow Agent"); and Henry M. Zachs, with offices at 40 Woodland Street, Hartford, Connecticut 06105 ("Mr. Zachs"); Newton D. Brenner, with offices at 271 Whitney Avenue, New Haven, Connecticut 06511 ("Mr. Brenner"); and Christopher W. Jenkins, with offices at 49 Woodland Street, Hartford, Connecticut 06105 ("Mr. Jenkins"); and Cellular Communications of Puerto Rico, Inc., a Delaware corporation with offices at 110 East 59th Street, 26th Floor, New York City, New York 10022 ("Cellular"); Mr. Zachs, Mr. Brenner, and Mr. Jenkins may be referred to hereinafter individually as the "Shareholder" and/or collectively as the "Shareholders". W I T N E S S E T H : WHEAREAS, Cellular and the Shareholders have entered into a letter agreement dated December 26, 1995 (the "Letter Agreement") pursuant to which certain funds are to be held in escrow from time to time; and WHEREAS, Escrow Agent has agreed to act as escrow agent hereunder upon the terms and conditions hereinafter set forth. NOW THEREFORE, in consideration of the premises and the mutal promises herein made the parties hereto hereby agree as follows: 1. CERTAIN DEFINITIONS - ---------------------- All capitalized terms not otherwise specifically defined herein shall have the meanings ascribed to them in the Letter Agreement. 2. APPOINTMENT OF ESCROW AGENT - ------------------------------ The parties hereto hereby jointly appoint Escrow Agent to act as the escrow agent hereunder, and the Escrow Agent hereby accepts the duties of escrow agent in accordance with the terms and conditions of this Agreement. 3. ESCROW FUND - -------------- Pursuant to the Letter Agreement, the parties hereto have caused there to be deposited $450,000 with the Escrow Agent simultaneously with the execution of this Agreement. 4. TERM - -------- The term of this Agreement shall commence on the date hereof and it shall remain in full force and effect until the Escrow Agent has distributed all of the Escrow Fund in its possession in accordance with the terms hereof, whereupon all obligations of the Escrow Agent hereunder shall immediately terminate; but the obligations of the other parties hereto pursuant to Sections 7, 8, 10, 11, and 12 hereof shall remain in full force and effect. 5. DUTIES OF ESCROW AGENT; DISTRIBUTIONS - ---------------------------------------- The Escrow Agent shall hold the Escrow Fund in escrow until authorized hereunder to deliver the same as described in the Letter Agreement. The Escrow Agent may, in its discretion, require written authorization from each of the other parties hereto prior to making any distribution. 6. DUTIES OF THE ESCROW AGENT; INVESTMENT - ----------------------------------------- The Escrow Agent shall invest the Escrow Fund held pursuant to this Agreement without delay and keep such cash invested and reinvested in interest bearing accounts in banks having insurance from the Federal Deposit Insurance Corporation. 7. DUTIES OF ESCROW AGENT; RELIANCE - ----------------------------------- (a) The obligations and duties of the Escrow Agent hereunder are purely ministerial and shall be limited to the safekeeping of the Escrow Fund and the actions herein specified in accordance with the provisions hereof; accordingly, the Escrow Agent shall not be responsible for any of the agreements referred to herein, but shall be obligated only for the performance of such duties as are specifically set forth herein and no implied duties or obligations of the Escrow Agent shall be imposed by virtue of this Agreement. (b) The Escrow Agent may act in reliance upon any writing or instrument or signature which it, in good faith, believes to be genuine; may assume the validity and accuracy of any statements or assertions contained in such writing or instrument; and may assume that any person purporting to give any writing, notice, advice or instruction in connection with the provisions hereof has been duly authorized to do so. Except for the Escrow Agent's liability arising from its gross negligence or fraud, the Escrow Agent shall not be liable in any manner for the sufficiency or correctness as to form, manner of execution, or validity of any written instructions, documents or papers deposited or called for hereunder or delivered to it, nor as to the identity, authority or rights of any person executing or delivering, or purporting to execute or deliver the same (c) The Escrow Agent may consult counsel satisfactory to it. The Escrow Agent shall not be personally liable or responsible for any act it may do or omit to do hereunder while acting in good faith and any acts done or omitted by it pursuant to the advice of its own counsel shall be conclusive evidence of such good faith, absent fraud or gross negligence on the part such counsel. In no event shall the Escrow Agent be liable for indirect, private, special, or consequential damages. (d) The Escrow Agent is hereby expressly authorized to disregard any and all warnings given by any of the parties hereto or by any other person or corporation, excepting only orders or process of courts of law, and is hereby expressly authorized to comply with and obey orders, judgments or decrees of any court, or agreements stipulated to by the other parties hereto. In the event the Escrow Agent obeys or complies with any such order, judgment or decree of any court, it shall not be liable to any of the parties hereto or any other person, firm or corporation by reason of such compliance, notwithstanding any such order, judgment or decree being subsequently reversed, modified, annulled, set aside, vacated or found to have been ordered without jurisdiction. 8. INTERPLEADER - --------------- Notwithstanding any provisions contained herein to the contrary, in the event of disagreement about the interpretation of this Agreement, or about the rights or obligations of the parties hereto, or the propriety of any action contemplated by the Escrow Agent hereunder, the Escrow Agent, may in its sole discretion, file an action in interpleader to resolve said disagreement. The Escrow Agent shall be indemnified pursuant to the provisions of Section 11 hereof for all costs and attorneys' fees incurred by it in its capacity as Escrow Agent in connection with any such interpleader action, shall be fully protected in suspending all or part of its activities under this Agreement until a final judgment in the interpleader action has been issued, and upon the filing of such interpleader action, shall resign as Escrow Agent hereunder, at the request of any party hereto. 9. SUCCESSOR ESCROW AGENT - ------------------------- The Escrow Agent may resign at any time upon the giving of 10 days written notice to the other parties to this Agreement or, in the event of any litigation involving this Agreement, shall resign upon the request of the parties hereto, in which case the Escrow Agent's duties hereunder shall terminate and the Escrow Agent shall be relieved and discharged of all obligations, responsibilities and liabilities hereunder. Upon any such resignation or a resignation under Section 8 hereof, the other parties hereto shall jointly appoint a successor escrow agent, who shall assume the duties of Escrow Agent hereunder. The Escrow Agent shall immediately deposit all Escrow Funds with the successor escrow agent so appointed. If a successor Escrow Agent is not appointed within 10 days after notice of resignation, the Escrow Agent may petition any court of competent jurisdiction to name a successor Escrow Agent and may deposit the Escrow Fund with such court. 10. ADDITIONAL INSTRUCTIONS - --------------------------- The parties hereto at their respective cost and expense shall cooperate with and assist the Escrow Agent as reasonably requested by the Escrow Agent in connection with the Escrow Agent's performance of its obligations hereunder. Specifically, but not in limitation of the generality of the foregoing, the parties hereto shall furnish the Escrow Agent with other and further documents or instruments reasonably requested by the Escrow Agent in connection with this Agreement or its obligations with respect hereto. 11. IDEMNIFICATION - ------------------ The other parties hereto shall reimburse the Escrow Agent for all reasonable expenses incurred by the Escrow Agent in connection with its duties hereunder, unless and until the Escrow Agent is determined by a court of competent jurisdiction to have discharged any of its duties hereunder in a grossly negligent manner or to have been guilty of willful misconduct with regard to any of its duties hereunder. Except for the Escrow Agent's liability arising from its gross negligence or fraud, each of the other parties hereto shall jointly and severally indemnify and hold the Escrow Agent harmless from any and all claims, liabilities, losses, damages, penalties, claims, actions, suits, proceedings at law or equity, or any other expenses, fees, or charges of any nature whatsoever which it may incur or with which it may be threatened by reason of its acting as Escrow Agent under this Agreement; and in connection therewith to indemnify the Escrow Agent against any and all expenses including attorneys' fees and the cost of defending any action, suit or proceeding or resisting any claim in such capacity; provided, however, that in the event of a dispute among the other parties hereto, the nonprevailing party shall indemnify and hold the prevailing party harmless against any and all costs and expenses (including reasonable attorneys' fees) incurred by the prevailing party pursuant to the provisions hereof. 12. REPRESENTATION - ------------------ The parties hereto acknowledge and agree that the Escrow Agent has acted, and may continue to act, as counsel to the Shareholders in connection with the negotiation of the Letter Agreement and the consummation of the transactions contemplated thereby and that the Escrow Agent may represent the Shareholders in the future including, without limitation with respect to (a) disputes arising under the terms of the Letter Agreement (or any other agreement, document, or instrument executed and delivered in accordance therewith or contemplated thereby); or (b) disputes that may involve the rights or obligations of the other parties hereto hereunder. Cellular hereby waives any claim of conflict of interest which may arise from the actions of the Escrow Agent hereunder and its representation of the Shareholders, and agrees that the Escrow Agent shall not be disqualified or otherwise estopped from representing the Shareholders in any matter in the future. Cellular hereby waives any claim of conflict of interest which may arise from the fact that one of the Shareholders is affiliated with the Escrow Agent. 13. MISCELLANEOUS - ----------------- (a) Notices. Any notice, request, acknowledgement, consent, or other -------- communication which any party hereto is required or permitted to give to another party shall be in writing and shall be delivered personally, sent by registered or certified mail, return receipt requested, or sent by a recognized overnight delivery service, in any such case to the recipient at his or its address first stated above or at such other address of which he or it shall have given the other party or parties due notice hereunder. Any such notice shall be deemed to have been delivered, given, and received for all purposes as of the date so delivered. (b) Waiver. The failure of any party to insist in any one or more instances ------ upon the performance of any of the terms and conditions of this Agreement shall not be construed as a waiver or relinquishment of any right granted hereunder, or of the future performance of any such term or condition. (c) Entire Agreement. This Agreement sets forth the entire understanding of the ---------------- parties hereto with respect to the subject matter hereof and supersedes any prior understandings or agreements among the parties, whether written or oral, to the extent related to the subject matter hereof. (d) Further Acts. Each of the parties hereto shall execute and deliver all such ------------ additional documents or legal instruments, and shall perform or cause to be performed all such further acts and things, as may be necessary or desirable to carry out the purposes and intent of this Agreement. (e) Amendment. This Agreement may not be amended, modified or altered in any --------- manner, except pursuant to the terms of a written instrument signed by each of the parties hereto. (f) Invalid Provision. The invalidity or unenforceability of any particular ----------------- provision of this Agreement shall not affect the other provisions hereof, and this Agreement shall thereafter be construed in all respects as if such invalid or unenforceable provisions were omitted. (g) Governing Law. This Agreement shall be governed by and construed in ------------- accordance with the domestic laws of the State of Connecticut without giving any effect to any choice or conflict of law provision or rule (whether of the State of Connecticut or of any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Connecticut. (h) Binding Nature. This Agreement shall be binding upon and inure to the -------------- benefit of the parties hereto and their successors, personal representatives, heirs, devisees, guardians and assigns. (i) Counterparts. This Agreement may be executed in any number of counterparts ------------ and all of such counterparts taken together shall for all purposes constitute one agreement binding upon all of the parties. (j) Headings. The headings contained in this Agreement are for reference -------- purposes only and shall not affect the meaning or interpretation of this Agreement. (k) Usage. In construing this Agreement, feminine or neuter pronouns shall be ------ substituted for those of the masculine form, and the plural for the singular, and vice versa, in any case in which the context may require. The capitalized terms used in this Agreement shall have the meaning first applied to their first usage in this Agreement unless otherwise indicated. (l) Third Parties. Nothing contained in this Agreement is intended or shall be ------------- construed to give any person, corporation or other entity, other than the parties hereto and their respective successors and assigns, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained, this Agreement being intended to be and being for the sole and exclusive benefit of the parties hereto and their respective successors and assigns. IN WITNESS WHEREOF, the parties have duly executed this Agreement on and as of the date first above written: BRENNER, SALTZMAN & WALLMAN By:________________________ ___________________________ Henry M. Zachs ____________________________ Newton D. Brenner _____________________________ Christopher W. Jenkins CELLULAR COMMUNICATIONS OF PUERTO RICO, INC. By:/s/ -------------------------- Its Senior Vice President (j) Headings. The headings contained in this Agreement are for reference --------- purposes only and shall not affect the meaning or interpretation of this Agreement. (k) Usage. In construing this Agreement, feminine or neuter pronouns shall ------ be substituted for those of the masculine form, and the plural for the singular, and vice versa, in any case in which the context may require. The capitalized terms used in this Agreement shall have the meaning first applied to their first usage in this Agreement unless otherwise indicated. (l) Third Parties. Nothing contained in this Agreement is intended or shall -------------- be construed to give any person, corporation or other entity, other than the parties hereto and their respective successors and assigns, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained, this Agreement being intended to be and being for the sole and exclusive benefit of the parties hereto and their respective successors and assigns. IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement on and as of the date first above written: BRENNER, SALTZMAN & WALLMAN By: /s/ ----------------------------- /s/ -------------------------------- Henry M. Zachs /s/ -------------------------------- Newton D. Brenner /s/ ------------------------------- Christopher W. Jenkins CELLULAR COMMUNICATIONS OF PUERTO RICO, INC. By: ---------------------------- Its Henry M. Zachs Newton D. Brenner Christopher W. Jenkins 40 Woodland Street Hartford, Connecticut 06105 December 26, 1995 Cellular Communications of Puerto Rico, Inc. 110 E. 59th Street, 26th floor New York, New York 10025 Re: San Juan Cellular Telephone Company Gentlemen: On or shortly before the date of this letter, San Juan Cellular Telehphone Company has made a distribution of $500,000 which after tax withholding will result in $450,000 to HMZ San Juan, Inc., a Connecticut corporation ("HMZ"), one of the partners of San Juan Cellular Telephone Company. HMZ has, in turn, made a distribution of that amount to its shareholders. On or shortly before the date of this letter, HMZ and the undersigned individuals have entered into an Agreement and Plan of Reorganization with Cellular Communications of Puerto Rico, Inc. ("Cellular") and CCPR Services, Inc. (the "Reorganization Agreement"), providing for, among other things, the acquisition of all or substantially all of the assets of HMZ in exchange for shares of stock of Cellular. In the event that the closing of the transactions contemplated by the Reorganization Agreement has not occurred by March 31, 1996, the undersigned individuals will make a capital contribution of $450,000, increased by any interest earned on the Escrow Fund (as hereinafter defined), to HMZ, and will cause HMZ to make a capital contribution in that amount to San Juan Cellular Telephone Company. Cellular Communications of Puerto Rico, Inc. December 26, 1995 Page 2. In order to ensure the contribution of the undersigned individuals to HMZ, and the contribution of HMZ to San Juan Cellular Telephone Company, $450,000 will be deposited as an Escrow Fund with Brenner, Saltzman & Wallman as Escrow Agent. Upon the closing of the transactions contemplated by the Reorganization Agreement on or before March 31, 1996, the escrow will be terminated and the Escrow Fund will be distributed to Mr. Zachs. In the event that the closing of the transactions contemplated by the Reorganization Agreement has not occurred by March 31, 1996, the escrow will be terminated and the Escrow Fund will be distributed to San Juan Cellular Telephone Company, in satisfaction of the obligations of the undersigned individuals and HMZ as described above. Except in the event that there is any dispute regarding the Escrow Fund, the fees of the Escrow Agent shall be borne by the undersigned individuals. In the event that there is a dispute regarding the Escrow Fund, the fees of the Escrow Agent shall be borne 50% by the undersigned individuals and 50% by Cellular. Please indicate your agreement to the foregoing by executing this letter in the space provided below. Very truly yours, /s/ -------------------------------- Henry M. Zachs /s/ -------------------------------- Newton D. Brenner /s/ -------------------------------- Christopher W. Jenkins Accepted, acknowledged and agreed to: CELLULAR COMMUNICATIONS OF PUERTO RICO, INC. By: /s/ ---------------------------------- Its Senior Vice President EX-2.2 3 FORM OF AGREEMENT-NATIONAL TELEPHONE COMPANY EXHIBIT 2.2 122695 AGREEMENT AND PLAN OF REORGANIZATION ------------------------------------ This Agreement and Plan of Reorganization (the "Agreement") is made and entered into as of December 26, 1995, by and among National Telephone Company, a Delaware corporation, its successors and assigns ("Assignor"), Waring Partridge, the sole stockholder of Assignor ("Stockholder"), Cellular Communications of Puerto Rico, Inc., a Delaware corporation, its successors and assigns ("Cellular") and CCPR Services, Inc., a Delaware corporation, its successors and assigns ("CCPR"). Recitals -------- WHEREAS, Assignor owns a 2.622% interest as a partner (the "Interest"), which constitutes all or substantially all of the assets of Assignor, in San Juan Cellular Telephone Company, a general partnership (the "Partnership") which holds the license from the Federal Communications Commission and the Puerto Rico Telephone Regulatory Commission to operate the nonwireline Block A cellular communications system for the San Juan-Caguas, Puerto Rico Metropolitan Statistical Area. WHEREAS, Assignor wishes to transfer and assign the Interest to CCPR in exchange for shares of Common Stock of Cellular ("Shares") pursuant and subject to the terms and conditions of this Agreement. THEREFORE, in consideration of the mutual obligations set forth in this Agreement, and subject to all conditions set forth herein, the parties agree as follows: 1. Assignment of Interest: (a) On the Closing Date (as defined in ----------------------- Section 2), Assignor shall assign and transfer to CCPR all of Assignor's right, title and interest to the Interest, free and clear of all encumbrances, liens, pledges, charges, claims, security interests and liabilities ("Liens") other than those expressly assumed herein by CCPR. The assignment shall include, without being limited to, Assignor's entire interest in the Partnership, including but not limited to the Interest, including the associated capital account in the Partnership and all related rights with regard to Partnership voting, profits, losses, and distributions. (b) In consideration for the assignment contemplated by this Agreement, CCPR shall deliver a stock certificate evidencing 350,000 Shares registered in the name of Assignor. In the event that on or prior to the Closing Date (a) Cellular shall pay any dividend or make any other distribution respecting its shares of common stock or (b) the holders of its shares of common stock shall be entitled or required to exchange their shares for other securities or consideration, by reason of a reorganization transaction with another entity or otherwise, then Assignor shall be entitled to receive (i) in addition to the 350,000 Shares, such dividend or other distribution as would be payable with respect to the foregoing 350,000 Shares or (ii) such other securities or consideration as would be exchanged for the foregoing 350,000 Shares, in each case to the effect that Assignor shall receive the funds, securities and consideration that Assignor would have received had it held the Shares to be issued at the Closing as at the date hereof. (c) This Agreement and Plan of Reorganization is intended to constitute a Plan of Reorganization within the meaning of Section 368 of the Internal Revenue Code of 1986, as amended (the "Code"), and the transactions contemplated hereby are intended to qualify as a "reorganization" within the meaning of subsection (a) of such Section 368. 2. Closing Date and Place. The closing of the transactions contemplated by ----------------------- this Agreement (the "Closing") shall occur as promptly as practicable after the execution of this Agreement and satisfaction of the conditions set forth in Section 8 hereof, at the offices of CCPR, 110 East 59th Street, 26th Floor, New York, New York 10022. 3. Mutual Representations and Warranties. Each of Cellular and CCPR -------------------------------------- represent and warrants to Assignor and Stockholder and each of Assignor and Stockholder represents and warrants to CCPR and Cellular that: (a) Each (if not a natural person) is duly formed, validly existing, and in good standing under the state and local laws to which it is subject; (b) Each has the right, power and unconditional authority, and has taken all necessary action, including all necessary actions on the part of its stockholder, to execute, deliver, and fully perform its obligations under this Agreement; (c) This Agreement is binding and enforceable against the warranting party; and (d) The execution, delivery and performance of the obligations under this Agreement do not constitute a material violation, breach or default under any law, regulation, ordinance, judgment, order, agreement, charter, articles or certificate of incorporation, by-laws, or other instrument or obligation to which the warranting party is subject. 4. Consent to Partnership Agreement. In accordance with Section 9.1(d) of --------------------------------- the Partnership's Partnership Agreement (the "Partnership Agreement"), CCPR consents to its admission to the Partnership on the Closing Date as a Substitute Partner with respect to the interest of the Assignor. CCPR confirms that upon such admission it shall be bound by all of the terms and provisions to the Partnership Agreement, as the same has been and may be amended. 5. Assumption of Assiqnor's Obligations. CCPR shall assume and be bound on ------------------------------------- the Closing Date to perform all of the obligations, terms, covenants and conditions of the Assignor under the Partnership Agreement, whether arising before or after the Closing Date, with respect to each Interest assigned. 6. Assiqnor's and Stockholder's Representations and Warranties. Each of ----------------------------------------------------------- Assignor and Stockholder represents and warrants to CCPR and Cellular that: (a) Assignor is the lawful owner of the Interest, free and clear of all encumbrances, liens, pledges, charges, claims, security interests and liabilities; (b) The Information (as defined in Section 10), if any, as of the date of its delivery to CCPR and as of the date of any Prospectus Delivery (as defined in Section 10) will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made in the Information not misleading; (c) It is not aware of any material adverse information concerning the Interest or the Partnership or its business, financial condition or otherwise that has not been disclosed to CCPR; (d) Stockholder, with respect to himself, is acquiring the Shares solely for its own account, for investment and not with a view to any resale, distribution or public offering thereof; (e) Stockholder, with respect to himself, understands that Cellular's transfer agent or other agent will be given appropriate instruction prohibiting any transfer of the Shares which would violate the Securities Act of 1933, as amended (the "Securities Act") and that the certificates for the Shares will bear the following legend: "The security represented by this certificate has not been registered under the Securities Act of 1933, as amended, or under state securities laws. The security represented by this certificate may not be resold or transferred unless registered or exempt from registration under the Securities Act of 1933, as amended, and applicable state securities laws."; (f) Stockholder, with respect to himself, understands that it must hold the Shares indefinitely unless it is registered under the Securities Act, or an exemption from registration becomes available; (g) Stockholder, with respect to himself, has had ample opportunity to ask questions of, and receive answers from, officers of Cellular and CCPR concerning CCPR, Cellular and their respective businesses, and to obtain any additional information it might request with respect to CCPR, Cellular and their respective businesses, and Stockholder acknowledges that CCPR and Cellular have made available to it all documents and information relating to the Shares, requested by or on behalf of Stockholder, including but not limited to, Cellular's annual report on Form 10-K for the year ended 1994 and its quarterly reports on Form 10-Q for the quarters ended March 31, June 30 and September 30, 1995; (h) Stockholder, with respect to himself, understands that (i) the offering and sale of the Shares is intended to be exempt from registration under the Securities Act as a private placement and (ii) there is no existing public or other market for the Shares, and there can be no assurance that Stockholder will be able to sell or dispose of the Shares; (i) Stockholder, with respect to himself, either alone or together with its advisors has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of its investment in the Shares, and Stockholder is capable of bearing the economic risk of such investment, including a complete loss of its investment; and (j) Stockholder, with respect to himself, is not a representative of an alien, a corporation organized under the laws of any foreign government, a corporation of which any officer or director is an alien or more than one-fifth of its capital stock is owned or voted by any of the foregoing, or a corporation directly or indirectly controlled by another corporation of which any officer or more than one-fourth of the directors are aliens or of which more than one- fourth of its capital stock is owned or voted by the foregoing, within the meaning of Section 310 of the Communications Act of 1934, as amended. 7. CCPR's Representation and Warranties. (a) CCPR and Cellular each ------------------------------------ represents and warrants to the Stockholder that the Registration Statement, when filed, will not contain any untrue statement of a material fact or omit to state a material fact required to be stated or necessary in order to make this statement therein not misleading. (b) CCPR and Cellular represent that Cellular is 100% direct parent of CCPR and CCPR shall make no transfer or disposition of the Interest which would impair the transaction from meeting the requirements of a reorganization under Section 368(a) of the Code. (c) CCPR and Cellular each represent and warrant that each has adequate information concerning the interest in the Partnership, its business and financial condition and is not relying on any representation of any Stockholder respecting the business of the Partnership; the CCPR is acquiring the Interest solely for its own account for investment and not with a view to any resale, distribution or public offering thereof. 8. Conditions to Closing. (a) The following are conditions precedent to each --------------------- party's obligation to close the transactions contemplated by this Agreement: (i) All required authorizations, orders, grants, consents, permission or approvals ("Approvals") of any governmental entity with jurisdiction over the transactions contemplated by this Agreement ("Governmental Agencies") shall have been received and shall remain in effect; (ii) The other parties' representations and warranties shall be true and correct, and each other party shall have performed all of its covenants and obligations due to be performed as of the Closing in accordance with this Agreement; (iii) The consummation of the transactions contemplated by this Agreement shall not be in violation of any law, rule or regulation and shall not be subject to any injunction or restraining order; and (iv) Any waiting period (and any extension thereof) applicable to the consummation of the transaction contemplated by this Agreement under the Hart-Scott-Rodino Antitrust Improvements Act (the "HSR Act") shall have expired or been terminated; (b) It shall be a condition precedent to CCPR's obligation to close the transactions contemplated by this Agreement that (i) it and its counsel have had an opportunity to conduct due diligence as to the representations set forth in this Agreement and CCPR shall be satisfied as to the accuracy of such representations and (ii) that CCPR shall have entered into certain agreements with National Telephone Company and Pacific Cellular Telephone Systems dated as of the date hereof, and all conditions to closing such agreements shall have been satisfied. (c) It shall be a condition precedent to Stockholder's obligation to close the transactions contemplated by this Agreement that (i) Cellular have provided to Stockholder and their counsel an opportunity to conduct due diligence as to the material accuracy of the financial representations set forth in operating reports of San Juan Telephone Company heretofore delivered to Assignor or any of the Stockholder; and (ii) Cellular shall not have agreed upon or engaged in a transaction which would transfer control or equity interests in all or a material part of the San Juan Cellular Telephone Company, except pursuant to this Agreement or similar agreements with Pacific Cellular Telephone Systems and National Telephone Company or as part of a transaction which would involve transfer of control of Cellular or the transfer or exchange of equity interest in Cellular. 9. Governmental Filings. Each of the parties hereto shall (i) make promptly --------------------- its respective filings, and thereafter make any other required submissions, under the HSR Act or otherwise, with respect to the transactions contemplated by this Agreement and (ii) use its reasonable best efforts to take, or cause to be taken, all appropriate action, and to do or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective such transactions, including, without limitation, using its reasonable best efforts to obtain all Approvals of Governmental Agencies as are required for the consummation of such transactions and to fulfill the conditions to the Agreement. Each of the parties hereto will use its reasonable efforts to lift or rescind any injunction or restraining order described in clause (a)(iii) under Section 8. 10. Registration Statement. (a) Following the Closing, Cellular will use ----------------------- all reasonable efforts to cause to be filed and declared effective as soon as reasonably practicable a Registration Statement to permit the public resale of the Shares acquired by the Stockholder pursuant hereto (the "Resale"). Any obligation to permit the Resale under the Registration Statement shall expire on the earliest of (i) the date on which all Shares acquired hereunder have been disposed of by the Stockholder, (ii) the date on which all Shares acquired pursuant hereto may be freely sold to the public without restriction under the Securities Act or (iii) the date which is two years after the Closing (or, in the event that the holding period under Rule 144(d) of the Securities Act is extended, such later date as to correspond with such extended holding period) (the "Expiration"). If a Stockholder is deemed to be an "affiliate" of CCPR, such Stockholder will provide all information necessary with respect to the Stockholder and any proposed Resale necessary for the Registration Statement ("Information") and will comply with the prospectus delivery requirements of the Securities Act and rules promulgated thereunder ("Prospectus Delivery"). (b) If at any time prior to the filing of the Registration Statement or the Expiration, (i) counsel to Cellular has determined in good faith that the compliance by Cellular with its disclosure obligations in connection with the Registration Statement would require the disclosure of material information which Cellular has a bona fide business purpose for preserving as confidential ---- ---- or (ii) Cellular then is unable to comply with its disclosure obligations or SEC requirements in connection with the Registration Statement, then in either such case Cellular shall not be required to file the Registration Statement or maintain the effectiveness thereof or amend or supplement the Registration Statement for a period (an "Information Delay Period") expiring upon the earlier to occur of (A) the date on which such material information is disclosed to the public or ceases to be material or Cellular is able to so comply with its disclosure obligations and SEC requirements or (B) 30 days, in the case of clause (i) above, or 45 days, in the case of clause (ii) above, after counsel to Cellular makes such good faith determination. (c) Cellular will give prompt written notice to Stockholder of the commencement of an Information Delay Period (and duration). Stockholder, by his acceptance of any Shares, agrees that, upon receipt of such notice it will forthwith discontinue disposition of the Shares pursuant to the Registration Statement, and will not deliver any prospectus forming a part thereof in connection with any sale of Shares until the expiration of an Information Delay Period. (d) Notwithstanding anything in this Agreement to the contrary, if the Registration Statement referred to in this Section 10 has not been declared effective by July 1, 1996, then Cellular shall issue to Assignor (or its assigns) a stock certificate or stock certificates evidencing an aggregate of such number of additional Shares as shall equal 5% of the amount set forth in Section 1(b) hereof. If the Registration Statement referred to in this Section 10 has not been declared effective by December 1, 1996, then Assignor (or its assigns) shall have the right by giving written notice to Cellular to require Cellular to purchase from Assignor in 1996 up to 100,000 Shares that were issued to Assignor pursuant to this Agreement. The price per share in any such redemption shall be equal to the average of the daily closing price on NASDAQ (or any exchange or other securities trading market which is the principal place of trading for Cellular's common stock at the time) for the seven trading days immediately preceding the date on which notice of the redemption is given. Payment for such Shares shall be made not later than three business days following delivery of such notice. (e) If at any time Cellular shall file an amendment to the Registration Statement, Cellular shall promptly deliver copies of such amendment to the Stockholder. 11. Indemnification by the Stockholder. Cellular, CCPR and its affiliates ----------------------------------- shall jointly and severally be indemnified and held harmless by Assignor and Stockholder against any and all losses, expenses, damages, injuries, judgments, claims and liabilities, including reasonable attorney's fees and litigation expenses ("Losses"), arising from (a) Assignor's ownership of its Interest prior to the Closing; (b) any material misrepresentation, breach of warranty, or nonperformance of any obligation hereunder on the part of Assignor or any Stockholder; (c) any other act or omission on the part of Assignor or any Stockholder, its agents or representatives in connection with its Interest in any Partnership; (d) any agreement, commitment or obligation of Assignor or any Stockholder undertaken in connection with the Interest or the Partnership (and, in the case of Assignor, arising prior to the Closing) which CCPR does not expressly and specifically assume either hereunder or in writing prior to the Closing, (e) Assignor's ownership, operation or conduct of any asset or business other than the Interest, (f) any liability for any federal, state or local tax (including interest, penalty or addition thereto) of Assignor incurred on or prior to the Closing, or (g) based on an untrue statement of fact in the Information or alleged omission to state therein a material fact necessary to make the statements therein not misleading, or the failure of any Stockholder to effect a Prospectus Delivery; provided, that no indemnification shall be due to Cellular or any of its affiliates for any Loss resulting solely from an action taken by Cellular in its capacity as managing general partner of the Partnership. Notwithstanding anything in this Agreement to the contrary, each of Cellular, CCPR and its affiliates will only seek indemnity for losses hereunder from Stockholder in proportion to his ownership percentage set forth on the first page hereof. 12. Indemnification by Cellular and CCPR. Assignor and Stockholder shall be ------------------------------------- indemnified and held harmless by Cellular and CCPR against any and all losses, arising from (a) CCPR's ownership of the Interest; (b) any material misrepresentation, breach of warranty, or nonperformance of any obligation hereunder on the part of Cellular or CCPR; (c) any other act or omission on the part of CCPR or its affiliates in connection with its interest in the Partnership or (d) arising out of or based upon an untrue statement of fact in the Registration Statement or arising out of or based upon the omission or alleged omission to state therein a material fact necessary to make the statements therein not misleading, other than those arising out of any Information. 13. Continuing Effectiveness. Each party's representations shall be true ------------------------- and correct, and each party's warranties and indemnifications shall be in full force and effect on the date that the party executes this Agreement and, to the extent the same are applicable at Closing, as if made on the date and time of such Closing. Each party's representations, warranties and indemnifications shall survive the Closing and shall be fully actionable and enforceable thereafter. In the event that a party becomes aware of any information, occurrence or omission which would alter any of its representations or would impair its ability to perform any of its warranties, indemnifications, or obligations hereunder, or would possibly lead to any right to indemnification, then the party shall notify the other party immediately of such information, occurrence or omission and shall disclose all relevant facts. The other party shall have the opportunity to defend itself, if necessary, in any resulting proceeding. The settlement of any such proceeding or threatened proceeding shall be subject to the other party's prior consent if the other party is to be subject to any obligation to indemnify against the cost of the settlement. 14. Expenses. Cellular, CCPR, Assignor and Stockholder shall each bear --------- their own legal and other fees and expenses associated with the preparation, execution and consummation of this Agreement and the filing and prosecution of any required Governmental Agency submissions, provided that CCPR shall pay any HSR filing fees to the extent applicable. CCPR will bear all costs associated with the preparation of the Registration Statement except that Stockholder shall bear broker's fees or discounts associated with a resale of the Shares acquired by such Stockholder pursuant hereto. 15. Termination as of Right. Notwithstanding any other provision herein or ------------------------ termination, this Agreement may be terminated, without liability of any kind, at the option of either Assignor or CCPR, upon written notice to the other if there is no Closing in accordance with all the terms of this Agreement on or before March 31, 1996. 16. Brokers Fees. Each party represents and warrants that it has not ------------- engaged any broker or finder with respect to this transaction and that no brokerage fee, commission, or finder's fee shall be due in connection with the transaction. 17. Notices. All notices or other communications to parties under this -------- Agreement shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by cable, telecopy, facsimile or other standard form of telecommunications, or by registered or certified mail or Federal Express delivery, postage prepaid, return receipt requested, addressed as follows: If to Assignor or the Stockholder: Waring Partridge P.O. Drawer B Kingsville, TX 78364 with a copy to Brenner, Saltzman & Wallman 271 Whitney Avenue New Haven, CT 06511 Att: Newton Brenner, Esq. If to Cellular or CCPR: 110 East 59th Street, 26th Floor New York, New York 10022 Attention: Richard J. Lubasch 18. Governing Law. This Agreement shall be interpreted, enforced and -------------- governed in accordance with the laws of New York (without regard to the provisions thereof on the conflict of laws). 19. Binding Effect. This Agreement shall bind and benefit the parties, --------------- their representatives, and their permitted assignees and successors in interest. 20. Most Favored Treatment. In the event that at any time in 1996, Cellular ----------------------- CCPR, the Partnership or an affiliate, enters into transaction with any person or entity that owns a minority interest in the Partnership, on more favorable economic terms than provided for in this Agreement (including by way of illustration, but not by way of limitation, a greater number of Shares) then this Agreement shall be amended in such manner as is necessary to incorporate such more favorable terms. Any such amendment shall be deemed effective as of the date of this Agreement. 21. Entire Agreement. This Agreement constitutes the entire agreement ----------------- between the parties governing this Transaction. No prior agreement or representation, whether verbal or written, shall have any force or effect. This Agreement may be modified, superseded or cancelled only in writing signed by each of the parties to be affected. IN WITNESS WHEREOF, this Agreement has been duly executed as of the first date above written. CCPR SERVICES, INC. By: /s/ ----------------------- Senior Vice President CELLULAR COMMUNICATIONS OF PUERTO RICO, INC. By: /s/ ----------------------- Senior Vice President NATIONAL TELEPHONE COMPANY By: /s/ ----------------------- Newton Brenner, Attorney-in-Fact for Waring Partridge /s/ ----------------------- Newton Brenner, Attorney-in-Fact for Waring Partridge December 26, 1995 Cellular Communications Of Puerto Rico, Inc. 110 East 59th Street 26th Floor New York, NY 10022 Dear Sir: The undersigned, National Telephone Company (the "Seller"), a Delaware corporation and its sole stockholder, Waring Partridge, desire to exchange a partnership interest in San Juan Cellular Telephone Company (the "Interest") for common stock of Cellular Communications of Puerto Rico, Inc. (the "Corporation"). The undersigned acknowledge, and understand that the Corporation is relying upon such acknowledgement, that (i) undersigned are sophisticated with knowledge of, and an opportunity to inquire with respect to, the cellular industry generally and the Corporation's financial position, business, operation and prospects and (ii) the Corporation is in possession of additional nonpublic information (collectively, the "Company Information") with respect to the Corporation's business, financial condition, operations and prospects, including potential transactions which may involve a change of control ("Potential Control Transactions"). The Corporation has assured the undersigned that none of the Company Information relates to a potential transaction which would transfer control or equity interests in all or a material part of the San Juan Cellular Telephone Company, except pursuant to an agreement with the undersigned or similar agreements with Pacific Cellular Telephone Systems and National Telephone Company or as part of a transaction which would involve transfer of control of Cellular or the transfer or exchange of equity interests in the Corporation. Subject to and in reliance upon the foregoing assurances, each of the undersigned acknowledges that, after careful consideration and the opportunity to consult with its counsel and other advisors, he and it is prepared to exchange the Interests for stock of Corporation without receipt of the Company Information. Very truly yours, National Telephone Company By: /s/ ----------------------------- Newton Brenner Attorney-in Fact /s/ ----------------------------- Newton Brenner Attorney-in-Fact for Waring Partridge ESCROW AGREEMENT THIS AGREEMENT made and entered into as of the 27th day of December 1995 by and among: Brenner, Saltzman & Wallman, with offices at 271 Whitney Avenue, New Haven, Connecticut 06511 (the "Escrow Agent"); and Waring Partridge having an address at P.O. Drawer B, Kingsville, Texas 78364 ("Shareholder"); and Cellular Communications of Puerto Rico, Inc., a Delaware corporation with offices at 110 East 59th Street, 26th Floor, New York City, New York 10022 ("Cellular"); W I T N E S S E T H : WHEAREAS, Cellular and the Shareholder have entered into a letter agreement dated December 26, 1995 (the "Letter Agreement") pursuant to which certain funds are to be held in escrow from time to time; and WHEREAS, Escrow Agent has agreed to act as escrow agent hereunder upon the terms and conditions hereinafter set forth. NOW THEREFORE, in consideration of the premises and the mutual promises herein made the parties hereto hereby agree as follows: 1. CERTAIN DEFINITIONS - ---------------------- All capitalized terms not otherwise specifically defined herein shall have the meanings ascribed to them in the Letter Agreement. 2. APPOINTMENT OF ESCROW AGENT - ------------------------------ The parties hereto hereby jointly appoint Escrow Agent to act as the escrow agent hereunder, and the Escrow Agent hereby accepts the duties of escrow agent in accordance with the terms and conditions of this Agreement. 3. ESCROW FUND - -------------- Pursuant to the Letter Agreement, the parties hereto have caused there to be deposited $450,000 with the Escrow Agent simultaneously with the execution of this Agreement. 4. TERM - ------- The term of this Agreement shall commence on the date hereof and it shall remain in full force and effect until the Escrow Agent has distributed all of the Escrow Fund in its possession in accordance with the terms hereof, whereupon all obligations of the Escrow Agent hereunder shall immediately terminate; but the obligations of the other parties hereto pursuant to Sections 7, 8, 10, 11, and 12 hereof shall remain in full force and effect. 5. DUTIES OF ESCROW AGENT: DISTRIBUTIONS - --------------------------------------- The Escrow Agent shall hold the Escrow Fund in escrow until authorized hereunder to deliver the same as described in the Letter Agreement. The Escrow Agent may, in its discretion, require written authorization from each of the other parties hereto prior to making any distribution. 6. DUTIES OF THE ESCROW AGENT: INVESTMENT - ----------------------------------------- The Escrow Agent shall invest the Escrow Fund held pursuant to this Agreement without delay and keep such cash invested and reinvested in interest bearing accounts in banks having insurance from the Federal Deposit Insurance Corporation. 7. DUTIES OF ESCROW AGENT: RELIANCE - ----------------------------------- (a) The obligations and duties of the Escrow Agent hereunder are purely ministerial and shall be limited to the safekeeping of the Escrow Fund and the actions herein specified in accordance with the provisions hereof, accordingly, the Escrow Agent shall not be responsible for any of the agreements referred to herein, but shall be obligated only for the performance of such duties as are specifically set forth herein and no implied duties or obligations of the Escrow Agent shall be imposed by virtue of this Agreement. (b) The Escrow Agent may act in reliance upon any writing or instrument or signature which it, in good faith, believes to be genuine; may assume the validity and accuracy of any statements or assertions contained in such writing or instrument; and may assume that any person purporting to give any writing, notice, advice or instruction in connection with the provisions hereof has been duly authorized to do so. Except for the Escrow Agent's liability arising from its gross negligence or fraud, the Escrow Agent shall not be liable in any manner for the sufficiency or correctness as to form, manner of execution, or validity of any written instructions, documents or papers deposited or called for hereunder or delivered to it, nor as to the identity, authority or rights of any person executing or delivering, or purporting to execute or deliver the same. (c) The Escrow Agent may consult counsel satisfactory to it. The Escrow Agent shall not be personally liable or responsible for any act it may do or omit to do hereunder while acting in good faith and any acts done or omitted by it pursuant to the advice of its own counsel shall be conclusive evidence of such good faith, absent fraud or gross negligence on the part such counsel. In no event shall the Escrow Agent be liable for indirect, private, special, or consequential damages. (d) The Escrow Agent is hereby expressly authorized to disregard any and all warnings given by any of the parties hereto or by any other person or corporation, excepting only orders or process of courts of law, and is hereby expressly authorized to comply with and obey orders, judgments or decrees of any court, or agreements stipulated to by the other parties hereto. In the event the Escrow Agent obeys or complies with any such order, judgment or decree of any court, it shall not be liable to any of the parties hereto or any other person, firm or corporation by reason of such compliance, notwithstanding any such order, judgment or decree being subsequently reversed, modified, annulled, set aside, vacated or found to have been ordered without jurisdiction. 8. INTERPLEADER - --------------- Notwithstanding any provisions contained herein to the contrary, in the event of disagreement about the interpretation of this Agreement, or about the rights or obligations of the parties hereto, or the propriety of any action contemplated by the Escrow Agent hereunder, the Escrow Agent, may in its sole discretion, file an action in interpleader to resolve said disagreement. The Escrow Agent shall be indemnified pursuant to the provisions of Section 11 hereof for all costs and attorneys' fees incurred by it in its capacity as Escrow Agent in connection with any such interpleader action, shall be fully protected in suspending all or part of its activities under this Agreement until a final judgment in the interpleader action has been issued, and upon the filing of such interpleader action, shall resign as Escrow Agent hereunder, at the request of any party hereto. 9. SUCCESSOR ESCROW AGENT - ------------------------- The Escrow Agent may resign at any time upon the giving of 10 days written notice to the other parties to this Agreement or, in the event of any litigation involving this Agreement, shall resign upon the request of the parties hereto, in which case the Escrow Agent's duties hereunder shall terminate and the Escrow Agent shall be relieved and discharged of all obligations, responsibilities and liabilities hereunder. Upon any such resignation or a resignation under Section 8 hereof, the other parties hereto shall jointly appoint a successor escrow agent, who shall assume the duties of Escrow Agent hereunder. The Escrow Agent shall immediately deposit all Escrow Funds with the successor escrow agent so appointed. If a successor Escrow Agent is not appointed within 10 days after notice of resignation, the Escrow Agent may petition any court of competent jurisdiction to name a successor Escrow Agent and may deposit the Escrow Fund with such court. 10. ADDITIONAL INSTRUCTIONS - --------------------------- The parties hereto at their respective cost and expense shall cooperate with and assist the Escrow Agent as reasonably requested by the Escrow Agent in connection with the Escrow Agent's performance of its obligations hereunder. Specifically, but not in limitation of the generality of the foregoing, the parties hereto shall furnish the Escrow Agent with other and further documents or instruments reasonably requested by the Escrow Agent in connection with this Agreement or its obligations with respect hereto. 11. IDEMNIFICATION - ------------------ The other parties hereto shall reimburse the Escrow Agent for all reasonable expenses incurred by the Escrow Agent in connection with its duties hereunder, unless and until the Escrow Agent is determined by a court of competent jurisdiction to have discharged any of its duties hereunder in a grossly negligent manner or to have been guilty of willful misconduct with regard to any of its duties hereunder. Except for the Escrow Agent's liability arising from its gross negligence or fraud, each of the other parties hereto shall jointly and severally indemnify and hold the Escrow Agent harmless from any and all claims, liabilities, losses, damages, penalties, claims, actions, suits, proceedings at law or equity, or any other expenses, fees, or charges of any nature whatsoever which it may incur or with which it may be threatened by reason of its acting as Escrow Agent under this Agreement; and in connection therewith to indemnify the Escrow Agent against any and all expenses including attorneys' fees and the cost of defending any action, suit or proceeding or resisting any claim in such capacity; provided, however, that in the event of a dispute among the other parties hereto, the nonprevailing party shall indemnify and hold the prevailing party harmless against any and all costs and expenses (including reasonable attorneys' fees) incurred by the prevailing party pursuant to the provisions hereof. 12. REPRESENTATION - ------------------ The parties hereto acknowledge and agree that the Escrow Agent has acted, and may continue to act, as counsel to the Shareholder in connection with the negotiation of the Letter Agreement and the consummation of the transactions contemplated thereby and that the Escrow Agent may represent the Shareholder in the future including, without limitation with respect to (a) disputes arising under the terms of the Letter Agreement (or any other agreement, document, or instrument executed and delivered in accordance therewith or contemplated thereby); or (b) disputes that may involve the rights or obligations of the other parties hereto hereunder. Cellular hereby waives any claim of conflict of interest which may arise from the actions of the Escrow Agent hereunder and its representation of the Shareholder, and agrees that the Escrow Agent shall not be disqualified or otherwise estopped from representing the Shareholder in any matter in the future. Cellular hereby waives any claim of conflict of interest which may arise from the fact that the Shareholder is affiliated with the Escrow Agent. 13. MISCELLANEOUS - ----------------- (a) Notices. Any notice, request, acknowledgement, consent, or other -------- communication which any party hereto is required or permitted to give to another party shall be in writing and shall be delivered personally, sent by registered or certified mail, return receipt requested, or sent by a recognized overnight delivery service, in any such case to the recipient at his or its address first stated above or at such other address of which he or it shall have given the other party or parties due notice hereunder. Any such notice shall be deemed to have been delivered, given, and received for all purposes as of the date so delivered. (b) Waiver. The failure of any party to insist in any one or more instances ------ upon the performance of any of the terms and conditions of this Agreement shall not be construed as a waiver or relinquishment of any right granted hereunder, or of the future performance of any such term or condition. (c) Entire Agreement. This Agreement sets forth the entire understanding of the ---------------- parties hereto with respect to the subject matter hereof and supersedes any prior understandings or agreements among the parties, whether written or oral, to the extent related to the subject matter hereof. (d) Further Acts. Each of the parties hereto shall execute and deliver all such ------------ additional documents or legal instruments, and shall perform or cause to be performed all such further acts and things, as may be necessary or desirable to carry out the purposes and intent of this Agreement. (e) Amendment. This Agreement may not be amended, modified or altered in any --------- manner, except pursuant to the terms of a written instrument signed by each of the parties hereto. (f) Invalid Provision. The invalidity or unenforceability of any particular ----------------- provision of this Agreement shall not affect the other provisions hereof, and this Agreement shall thereafter be construed in all respects as if such invalid or unenforceable provisions were omitted. (g) Governing Law. This Agreement shall be governed by and construed in ------------- accordance with the domestic laws of the State of Connecticut without giving any effect to any choice or conflict of law provision or rule (whether of the State of Connecticut or of any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Connecticut. (h) Binding Nature. This Agreement shall be binding upon and inure to the -------------- benefit of the parties hereto and their successors, personal representatives, heirs, devisees, guardians and assigns. (i) Counterparts. This Agreement may be executed in any number of counterparts ------------ and all of such counterparts taken together shall for all purposes constitute one agreement binding upon all of the parties. (j) Headings. The headings contained in this Agreement are for reference -------- purposes only and shall not affect the meaning or interpretation of this Agreement. (k) Usage. In construing this Agreement, feminine or neuter pronouns shall be ------ substituted for those of the masculine form, and the plural for the singular, and vice versa, in any case in which the context may require. The capitalized terms used in this Agreement shall have the meaning first applied to their first usage in this Agreement unless otherwise indicated. (l) Third Parties. Nothing contained in this Agreement is intended or shall be ------------- construed to give any person, corporation or other entity, other than the parties hereto and their respective successors and assigns, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained, this Agreement being intended to be and being for the sole and exclusive benefit of the parties hereto and their respective successors and assigns. IN WITNESS WHEREOF, the parties have duly executed this Agreement on and as of the date first above written: BRENNER, SALTZMAN & WALLMAN By:/s/ --------------------------- /s/ ----------------------------- Waring Partridge CELLULAR COMMUNICATIONS OF PUERTO RICO, INC. By: /s/ ------------------------- Its Senior Vice President Waring Partridge National Telephone Company P.O. Drawer B Kingsville, TX 78364 December 26, 1995 Cellular Communications of Puerto Rico, Inc. 110 E. 59th Street, 26th Floor New York, New York 10025 Re: San Juan Cellular Telephone Company Gentlemen: On or shortly before the date of this letter, San Juan Cellular Telephone Company has made a distribution of $500,000 which after tax withholding will result in $450,000 to National Telephone Company, A Delaware corporation ("National"), one of the partners of San Juan Cellular Telephone Company. National has, in turn, made a distribution of that amount to its shareholders. On or shortly before the date of this letter, National and the undersigned have entered into an Agreement and Plan of Reorganization with Cellular Communications of Puerto Rico, Inc. ("Cellular") and CCPR Services, Inc. (the "Reorganization Agreement"), providing for, amount other things, the acquisition of all or substantially all of the assets of National is exchange for shares of stock of Cellular. In the event that the closing of the transactions contemplated by the Reorganization Agreement has not occurred by March 31, 1996, the undersigned will make a capital contribution of $450,000, increased by any interest earned on the Escrow Fund (as hereinafter defined), to National, and will cause National to make a capital contribution in that amount to San Juan Cellular Telephone Company. Cellular Communications of Puerto Rico, Inc. December 26, 1995 Page 2. In order to ensure the contribution of the undersigned individual to National, and the contribution of National to San Juan Cellular Telephone Company, $450,000 will be deposited as an Escrow Fund with Brenner, Saltzman & Wallman as Escrow Agent. Upon the closing of the transactions contemplated by the Reorganization Agreement on or before March 31, 1996, the escrow will be terminated and the Escrow Fund will be distributed to Mr. Partridge. In the event that the closing of the transactions contemplated by the Reorganization Agreement has not occurred by March 31, 1996, the escrow will be terminated and the Escrow Fund will be distributed to San Juan Cellular Telephone Company, in satisfaction of the obligations of the undersigned individual and National as described above. Except in the event that there is any dispute regarding the Escrow Fund, the fees of the Escrow Agent shall be borne by the undersigned. In the event that there is a dispute regarding the Escrow Fund, the fees of the Escrow Agent shall be borne 50% by the undersigned individual and 50% by Cellular. Please indicate your agreement to the foregoing by executing this letter in the space provided below. Very truly yours, /s/ --------------------------- Waring Partridge Accepted, acknowledged and agreed to: CELLULAR COMMUNICATIONS OF PUERTO RICO, INC. By:/s/ ----------------------- Its Senior Vice President POWER OF ATTORNEY The undersigned, Waring Partridge, also known as Benjamin Waring Partridge, and National Telephone Company, a Delaware corporation ("Principals") having addresses at P.O. Drawer B, Kingsville, Texas 78364 hereby nominate, constitute and appoint Newton D. Brenner of 271 Whitney Avenue, New Haven, Connecticut 06511 as our true and lawful attorney-in-fact for each of the undersigned who is authorized in my and our name, place and stead to take all necessary action which appears to said agent to be advisable under the circumstances in connection with the interest of the undersigned National Telephone Company in a partnership known as San Juan Telephone Company and in connection with the interest of the undersigned Waring Partridge as stockholder, officer or director of National Telephone Company as respects its interest in San Juan Telephone Company, specifically authorizing said agent to execute agreements with Cellular Communications of Puerto Rico, Inc. or its affiliates respecting said interest, which agreements are substantially identical in form and substance to agreements entered into between Cellular Communications of Puerto Rico, Inc. or its affiliates with Henry M. Zachs, Christopher Jenkins, Newton Brenner, and HMZ San Juan, Inc. respecting their interests in San Juan Telephone Company. Any party may rely upon a copy of this Power of Attorney to the same effect as if it were an original document. This Power of Attorney shall expire 12:01 a.m. January 1, 1996 provided that any action undertaken by attorney-in-fact prior to such expiration shall remain fully valid and binding as act of the undersigned for all purposes. This Power of Attorney shall not be affected by any disability of the undersigned. IN WITNESS WHEREOF the undersigned have caused this Power of Attorney to be subscribed and acknowledged this day of December, 1995. WARNING PARTRIDGE a/k/a Benjamin Waring Partridge /s/ ---------------------------------- NATIONAL TELEPHONE COMPANY By:/s/ ------------------------------- ACKNOWLEDGEMENT State of New Jersey } } Ss: County of Morris } The foregoing instrument was acknowledge before the this 23 day of December -- -------- 1996 Waring Partridge. -- /s/ ----------------------------------- Notary Public My Commission Expires: May 10, 1999 ------------ ACKNOWLEDGEMENT State of New Jersey } } Ss: County of Morris } The foregoing instrument was acknowledged before me this 23 day of December 1995 by Waring Partridge, the President of National Telephone Company, a Delaware corporation on behalf of said corporation. /s/ ----------------------------- Notary Public My Commission Expires: May 10, 1999 EX-2.3 4 FORM OF AGREEMENT-PACIFIC CELLULAR TELEPHONE SYSTEMS EXHIBIT 2.3 122695(R) - --------- AGREEMENT --------- This Agreement (the "Agreement") is made and entered into as of December 26, 1995, by and among Pacific Cellular Telephone Systems, a California limited partnership, its successors and assigns ("Assignor"), each of the general and limited partners of Assignor (the names of the limited partners are listed on the signature pages that are Exhibit A of this Agreement) (each, a "Partner" and collectively the "Partners"), Cellular Communications of Puerto Rico, Inc., a Delaware corporation, its successors and assigns ("Cellular") and CCPR Services, Inc., a Delaware corporation, its successors and assigns ("CCPR"). Recitals -------- WHEREAS, Assignor owns a .902% interest as a partner (the "Interest") in San Juan Cellular Telephone Company, a general partnership (the "Partnership") which holds the license from the Federal Communications Commission and the Puerto Rico Telephone Regulatory Commission to operate the nonwireline Block A cellular communications system for the San Juan-Caguas, Puerto Rico Metropolitan Statistical Area. WHEREAS, Assignor wishes to sell and assign the Interest to CCPR in exchange for shares of Common Stock of Cellular ("Shares") pursuant and subject to the terms and conditions of this Agreement. THEREFORE, in consideration of the mutual obligations set forth in this Agreement, and subject to all conditions set forth herein, the parties agree as follows: 1. Assignment of Interest: (a) On the Closing Date (as defined in Section ----------------------- 2), Assignor shall assign and transfer to CCPR all of Assignor's right, title and interest to the Interest, free and clear of all encumbrances, liens, pledges, charges, claims, security interests and liabilities ("Liens") other than those expressly assumed herein by CCPR. The assignment shall include, without being limited to, Assignor's entire interest in the Partnership, including but not limited to the Interest, including the associated capital account in the Partnership and all related rights with regard to Partnership voting, profits, losses, and distributions. (b) In consideration for the assignment contemplated by this Agreement, CCPR shall deliver at Assignor's option, either a stock certificate evidencing 120,404 Shares in the aggregate registered in the name of Assignor, or stock certificates evidencing 120,404 Shares in the aggregate, for the amounts and registered in the names set forth in a schedule to be provided by Assignor. If Assignor elects to have the initial stock certificates in the name of Assignor, upon Assignor's request, CCPR or its transfer agent shall subsequently substitute that stock certificate for stock certificates evidencing 120,404 Shares in the aggregate, for the amounts and registered in the names set forth in a schedule to be provided by the Assignor. In the event that on or prior to the Closing Date (a) Cellular shall pay any dividend or make any other distribution respecting the Shares or (b) the holders of Shares shall be entitled or required to exchange their Shares for other securities or consideration, then Assignor (or, as aforesaid, the names set forth in the schedule) shall be entitled to receive (i) such dividend or other distribution as would be payable with respect to the foregoing 120,404 Shares or (ii) such other securities or consideration as would be exchanged for the foregoing 120,404 Shares. 2. Closing Date and Place. The closing of the transactions contemplated by ----------------------- this Agreement (the "Closing") shall occur as promptly as practicable after the execution of this Agreement and satisfaction of the conditions set forth in Section 8 hereof, at the offices of CCPR, 110 East 59th Street, 26th Floor, New York, New York 10022. 3. Mutual Representations and Warranties. Each of Cellular and CCPR ------------------------------------- represent and warrants to Assignor and the Partners and each of Assignor and each Partner represents and warrants to CCPR and Cellular that: (a) Each (if not a natural person) is duly formed, validly existing, and in good standing under the state and local laws to which it is subject; (b) Each has the right, power and unconditional authority, and has taken all necessary action, including all necessary actions on the part of its stockholders and partners, to execute, deliver, and fully perform its obligations under this Agreement; (c) This Agreement is binding and enforceable against the warranting party; and (d) The execution, delivery and performance of the obligations under this Agreement do not constitute a material violation, breach or default under any law, regulation, ordinance, judgment, order, agreement, charter, articles or certificate of incorporation, bylaws, or other instrument or obligation to which the warranting party is subject. 4. Consent to Partnership Agreement. In accordance with Section 9.1(d) of -------------------------------- the Partnership's Partnership Agreement (the "Partnership Agreement"), CCPR consents to its admission to the Partnership on the Closing Date as a Substitute Partner with respect to the interest of the Assignor. CCPR confirms that upon such admission it shall be bound by all of the terms and provisions to the Partnership Agreement, as the same has been and may be amended. 5. Assumption of Assignor's Obligations. CCPR shall assume and be bound on ------------------------------------- the Closing Date to perform all of the obligations, terms, covenants and conditions of the Assignor under the Partnership Agreement, whether arising before or after the Closing Date, with respect to each Interest assigned. 6. Assignor's and Partner's Representations and Warranties. Each of ------------------------------------------------------- Assignor and each Partner represents and warrants to CCPR and Cellular that: (a) Assignor is the lawful owner of the Interest, free and clear of all encumbrances, liens, pledges, charges, claims, security interests and liabilities; (b) The information (as defined in Section 10), if any, as of the date of its delivery to CCPR and as of the date of any Prospectus Delivery (as defined in Section 10) will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made in the Information not misleading; (c) It is not aware of any material adverse information concerning the Interest or the Partnership or its business, financial condition or otherwise that has not been disclosed to CCPR; (d) Each Partner, with respect to himself, is acquiring the Shares solely for its own account, for investment and not with a view to any resale, distribution or public offering thereof; (e) Each Partner, with respect to himself, understands that Cellular's transfer agent or other agent will be given appropriate instruction prohibiting any transfer of the Shares which would violate the Securities Act of 1933, as amended (the "Securities Act") and that the certificates for the Shares will bear the following legend: "The security represented by this certificate has not been registered under the Securities Act of 1933, as amended, or under state securities laws. The security represented by this certificate may not be resold or transferred unless registered or exempt from registration under the Securities Act of 1933, as amended, and applicable state securities laws."; (f) Each Partner, with respect to himself, understands that it must hold the Shares indefinitely unless it is registered under the Securities Act, or an exemption from registration becomes available or they can be sold on the market pursuant to Rule 144 of the Securities Act; (g) Each Partner, with respect to himself, has had ample opportunity to ask questions of, and receive answers from, officers of Cellular and CCPR concerning CCPR, Cellular and their respective businesses, and to obtain any additional information it might request with respect to CCPR, Cellular and their respective businesses, and each Partner acknowledges that CCPR and Cellular have made available to it all documents and information relating to the Shares, requested by or on behalf of each Partner, including but not limited to, Cellular's annual report on Form 10-K for the year ended 1994 and its quarterly reports on Form 10-Q for the quarters ended March 31, June 30 and September 30, 1995; (h) Each Partner, with respect to himself, understands that (i) the offering and sale of the Shares is intended to be exempt from registration under the Securities Act as a private placement and (ii) there is no existing public or other market for the Shares, and there can be no assurance that each Partner will be able to sell or dispose of the Shares; (i) Each Partner, with respect to himself, either alone or together with its advisors has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of its investment in the Shares, and each Partner is capable of bearing the economic risk of such investment, including a complete loss of its investment; and (j) Each Partner, with respect to himself, is not a representative of an alien, a corporation organized under the laws of any foreign government, a corporation of which any officer or director is an alien or more than one fifth of its capital stock is owned or voted by any of the foregoing, or a corporation directly or indirectly controlled by another corporation of which any officer or more than one-fourth of the directors are aliens or of which more than one- fourth of its capital stock is owned or voted by the foregoing, within the meaning of Section 310 of the Communications Act of 1934, as amended. 7. CCPR's Representation and Warranties. (a) CCPR and Cellular each ------------------------------------ represents and warrants to the Partners that the Registration Statement, when filed, will not contain any untrue statement of a material fact or omit to state a material fact required to be stated or necessary in order to make the statements therein not misleading. (b) CCPR and Cellular each represents and warrants that each has adequate information concerning the interest in the Partnership, its business and financial condition and is not relying on any representation of any Partner respecting the business of the Partnership; that CCPR is acquiring the Interest solely for its own account for investment and not with a view to any resale, distribution or public offering thereof. 8. Conditions to Closing. (a) The following are conditions precedent to --------------------- each party's obligation to close the transactions contemplated by this Agreement: (i) All required authorizations, orders, grants, consents, permissions or approvals ("Approvals") of any governmental entity with jurisdiction over the transactions contemplated by this Agreement ("Governmental Agencies") shall have been received and shall remain in effect; (ii) The other parties' representations and warranties shall be true and correct, and each other party shall have performed all of its covenants and obligations due to be performed as of the Closing in accordance with this Agreement; (iii) The consummation of the transactions contemplated by this Agreement shall not be in violation of any law, rule or regulation and shall not be subject to any injunction or restraining order; and (iv) Any waiting period (and any extension thereof) applicable to the consummation of the transaction contemplated by this Agreement under the Hart-Scott-Rodino Antitrust Improvements Act (the "HSR Act") shall have expired or been terminated; (b) It shall be a condition precedent to CCPR's obligation to close the transactions contemplated by this Agreement that (i) it and its counsel have had an opportunity to conduct due diligence as to the representations set forth in this Agreement and CCPR shall be satisfied as to the accuracy of such representations and (ii) that CCPR shall have entered into certain agreements with National Telephone Company and HMZ San Juan, Inc. dated as of the date hereof, and all conditions to closing such agreements shall have been satisfied. (c) It shall be a condition precedent to Assignor's obligation to close the transactions contemplated by this Agreement that (i) Cellular has provided to Assignor and its counsel an opportunity to conduct due diligence as to the material accuracy of the financial representations set forth in operating reports of San Juan Telephone Company hereto delivered to Assignor or any of the Partners; and (ii) Cellular shall not have agreed upon or engaged in a transaction which would transfer control or equity interests in all or a material part of the San Juan Cellular Telephone Company, except pursuant to this Agreement or similar agreements with HMZ San Juan Inc. and National Telephone Company or as part of a transaction which would involve transfer of control of Cellular or the transfer or exchange of equity interest in Cellular. 9. Governmental Filings. Each of the parties hereto shall (i) -------------------- make promptly its respective filings, and thereafter make any other required submissions, under the HSR Act or otherwise, with respect to the transactions contemplated by this Agreement and (ii) use its reasonable best efforts to take, or cause to be taken, all appropriate action, and to do or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective such transactions, including, without limitation, using its reasonable best efforts to obtain all Approvals of Governmental Agencies as are required for the consummation of such transactions and to fulfill the conditions to the Agreement. Each of the parties hereto will use its reasonable efforts to lift or rescind any injunction or restraining order described in clause (a)(iii) under Section 8. 10. Registration Statement. (a) Following the Closing, Cellular will use ---------------------- all reasonable efforts to cause to be filed and declared effective as soon as reasonably practicable (but in any event not later than 90 days after Closing) a Registration Statement to permit the public resale of the Shares acquired by Assignor or the Partners pursuant hereto (the "Resale"). Any obligation to permit the Resale under the Registration Statement shall expire on the earliest of (i) the date on which all Shares acquired hereunder have been disposed of by the Partners, (ii) the date on which all Shares acquired pursuant hereto may be freely sold to the public without restriction under the Securities Act or (iii) the date which is two years after the Closing (or, in the event that the holding period under Rule 144(d) of the Securities Act is extended, such later date as to correspond with such extended holding period) (the "Expiration"). If a Partner is deemed to be an "affiliate" of CCPR, such Partner will provide all information necessary with respect to the Partners and any proposed Resale necessary for the Registration Statement ("Information") and will comply with the prospectus delivery requirements of the Securities Act and rules promulgated thereunder ("Prospectus Delivery"). (b) If at any time prior to the filing of the Registration Statement or the Expiration, (i) counsel to Cellular has determined in good faith that the compliance by Cellular with its disclosure obligations in connection with the Registration Statement would require the disclosure of material information which Cellular has a bona fide business purpose for preserving as confidential ---- ---- or (ii) Cellular then is unable to comply with its disclosure obligations or SEC requirements in connection with the Registration Statement, then in either such case Cellular shall not be required to file the Registration Statement or maintain the effectiveness thereof or amend or supplement the Registration Statement for a period (an "Information Delay Period") expiring upon the earlier to occur of (A) the date on which such material information is disclosed to the public or ceases to be material or Cellular is able to so comply with its disclosure obligations and SEC requirements or (B) 30 days, in the case of clause (i) above, or 45 days, in the case of clause (ii) above, after counsel to Cellular makes such good faith determination. (c) Cellular will give prompt written notice to Assignor and the Partners of the commencement of an Information Delay Period (and duration). Assignor and each Partner, by its or his acceptance of any Shares, agrees that, upon receipt of such notice it will forthwith discontinue disposition of the Shares pursuant to the Registration Statement, and will not deliver any prospectus forming a part thereof in connection with any sale of Shares until the expiration of an Information Delay Period. (d) Notwithstanding anything in this Agreement to the contrary, if the Registration Statement referred to in this Section 10 has not been declared effective by July 1, 1996, then Cellular shall issue to Assignor (or its assigns) a stock certificate or stock certificates evidencing an aggregate of such number of additional Shares as shall equal 5% of the amount set forth in Section 1 (b) hereof. If the Registration Statement referred to in this Section 10 has not been declared effective by December 1, 1996, then Assignor (or its assigns) shall have the right by giving written notice to Cellular to require Cellular to purchase from Assignor in 1996 up to 34,401 Shares that were issued to Assignor pursuant to this Agreement. The price per share in any such redemption shall be equal to the average of the daily closing price on NASDAQ (or any exchange or other securities trading market which is the principal place of trading for Cellular's common stock at the time) for the seven trading days immediately preceding the date on which notice of the redemption is given. (e) If at any time Cellular shall file an amendment to the Registration Statement, Cellular shall promptly deliver copies of such amendment to Assignor or the Partners. 11. Indemnification by the Partners. Cellular, CCPR and its affiliates ------------------------------- shall jointly and severally be indemnified and held harmless by Assignor and each Partner against any and all losses, expenses, damages, injuries, judgments, claims and liabilities, including reasonable attorney's fees and litigation expenses ("Losses"), arising from (a) Assignor's ownership of its Interest prior to the Closing; (b) any material misrepresentation, breach of warranty, or nonperformance of any obligation hereunder on the part of Assignor or any Partner; (c) any other act or omission on the part of Assignor or any Partner, its agents or representatives in connection with its Interest in any Partnership; (d) any agreement, commitment or obligation of Assignor or any Partner undertaken in connection with the Interest or the Partnership (and, in the case of Assignor, arising prior to the Closing) which CCPR does not expressly and specifically assume either hereunder or in writing prior to the Closing, (e) Assignor's ownership, operation or conduct of any asset or business other than the Interest, (f) any liability for any federal, state or local tax (including interest, penalty or addition thereto) of Assignor incurred on or prior to the Closing, or (g) based on an untrue statement of fact in the Information or alleged omission to state therein a material fact necessary to make the statements therein not misleading, or the failure of any Partner to effect a Prospectus Delivery; provided, that no indemnification shall be due to Cellular or any of its affiliates for any Loss resulting solely from an action taken by Cellular in its capacity as managing general partner of the Partnership. 12. Indemnification by Cellular and CCPR. Assignor and each Partner shall ------------------------------------- be indemnified and held harmless by Cellular and CCPR against any and all losses, arising from (a) CCPR's ownership of the Interest; (b) any material misrepresentation, breach of warranty, or nonperformance of any obligation hereunder on the part of Cellular or CCPR; (c) any other act or omission on the part of CCPR or its affiliates in connection with its interest in the Partnership or (d) arising out of or based upon an untrue statement of fact in the Registration Statement or arising out of or based upon the omission or alleged omission to state therein a material fact necessary to make the statements therein not misleading, other than those arising out of any Information. 13. Continuing Effectiveness. Each party's representations shall be true ------------------------- and correct, and each party's warranties and indemnifications shall be in full force and effect on the date that the party executes this Agreement and, to the extent the same are applicable at Closing, as if made on the date and time of such Closing. Each party's representations, warranties and indemnifications shall survive the Closing and shall be fully actionable and enforceable thereafter. In the event that a party becomes aware of any information, occurrence or omission which would alter any of its representations or would impair its ability to perform any of its warranties, indemnifications, or obligations hereunder, or would possibly lead to any right to indemnification, then the party shall notify the other party immediately of such information, occurrence or omission and shall disclose all relevant facts. The other party shall have the opportunity to defend itself, if necessary, in any resulting proceeding. The settlement of any such proceeding or threatened proceeding shall be subject to the other party's prior consent if the other party is to be subject to any obligation to indemnify against the cost of the settlement. 14. Expenses. Cellular, CCPR, Assignor and each Partner shall each bear -------- their own legal and other fees and expenses associated with the preparation, execution and consummation of this Agreement and the filing and prosecution of any required Governmental Agency submissions, provided that CCPR shall pay any HSR filing fees to the extent applicable. CCPR will bear all costs associated with the preparation of the Registration Statement and, to the extent of the fees and expenses of Cellular's transfer agent or the like, the possible transfer of Shares from Assignor to the Partners. Each Partner shall bear broker's fees or discounts associated with a resale of the Shares acquired by such Partner pursuant hereto. 15. Termination as of Right. Notwithstanding any other provision herein or ----------------------- termination, this Agreement may be terminated, without liability of any kind, at the option of either Assignor or CCPR, upon written notice to the other if there is no Closing in accordance with all the terms of this Agreement on or before March 31, 1996. 16. Brokers Fees. Each party represents and warrants that it has not ------------- engaged any broker or finder. Assignor agrees to be solely responsible for any compensation it may owe for any underlying services in connection with this transaction, and agrees to hold CCPR and Cellular harmless. Each party represents and warrants that no other broker or finder has been engaged with respect to this transaction and that no other brokerage fee, commission, or finder's fee shall be due in connection with the transaction. 17. Notices. All notices or other communications to parties under this -------- Agreement shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by cable, telecopy, facsimile or other standard form of telecommunications, or by registered or certified mail or Federal Express delivery, postage prepaid, return receipt requested, addressed as follows: If to Assignor or the Partners: Pacific Cellular Telephone Systems c/o Perry Leff 444 North Faring Road Los Angeles, CA 90077 with a copy to: Anne Roberts, Esq. 18 Latimer Road Santa Monica, CA 90402 If to Cellular or CCPR: 110 East 59th Street, 26th Floor New York, New York 10022 Attention: Richard J. Lubasch 18. Governing Law. This Agreement shall be interpreted, enforced and ------------- governed in accordance with the laws of New York (without regard to the provisions thereof on the conflict of laws). 19. Binding Effect. This Agreement shall bind and benefit the parties, --------------- their representatives, and their permitted assignees and successors in interest. 20. Most Favored Treatment. In the event that at any time in 1996, Cellular ---------------------- CCPR, the Partnership or an affiliate, enters into transaction with any person or entity that owns a minority interest in the Partnership, on more favorable economic terms than provided for in this Agreement (including by way of illustration, but not by way of limitation, a greater number of Shares) then this Agreement shall be amended in such manner as is necessary to incorporate such more favorable terms. Any such amendment shall be deemed effective as of the date of this Agreement. 21. Entire Agreement; Counterparts. This Agreement constitutes the entire ------------------------------ agreement between the parties governing this Transaction. No prior agreement or representation, whether verbal or written, shall have any force or effect. This Agreement may be modified, superseded or cancelled only in writing signed by each of the parties to be affected. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and any of the parties hereto may execute this Agreement by signing any of such counterparts. IN WITNESS WHEREOF, this Agreement has been duly executed as of the first date above written. CCPR SERVICES, INC. By: /s/ --------------------------- Senior Vice President CELLULAR COMMUNICATIONS OF PUERTO RICO, INC. By: /s/ ------------------------ Senior Vice President PACIFIC CELLULAR COMPANY By: Pac-Cell Partners, Inc. its general Partner By: /s/ ------------------------ Perry Leff Chief Executive Officer Pacific Cellular Telephone Systems 18 Latimer Road Santa Monica, CA 90402 December 26, 1995 Cellular Communications of Puerto Rico, Inc. 110 East 59th Street 26th Floor New York, NY 10022 Dear Sir: The undersigned, Pacific Cellular Telephone Systems, and all of its partners desire to exchange a partnership interest in San Juan Cellular Telephone Company (the "Interest") for common stock of Cellular Communications of Puerto Rico, Inc. (the "Corporation"). The undersigned, on behalf of itself and all of the limited partners, acknowledges, and understands that the Corporation is relying upon such acknowledgement, that (i) undersigned, on behalf of itself and all of the limited partners, are sophisticated with knowledge of, and an opportunity to inquire with respect to, the cellular industry generally and the Corporation's financial position, business, operation and prospects and (ii) the Corporation is in possession of additional nonpublic information (collectively, the "Company Information") with respect to the Corporation's business, financial condition, operations and prospects, including potential transactions which may involve a change of control ("Potential Control Transactions"). The Corporation has assured the undersigned, on behalf of itself and all of the limited partners, that none of the Company Information relates to a potential transaction which would transfer control or equity interests in all or a material part of the San Juan Cellular Telephone Company, except pursuant to an agreement with the undersigned, on behalf of itself and all of the limited partners, or similar agreements with HMZ San Juan Inc. and National Telephone Company or as part of a transaction which would involve transfer of control of Cellular or the transfer or exchange of equity interests in the Corporation. Subject to and in reliance upon the foregoing assurances, the undersigned, on behalf of itself and all of the limited partners, acknowledges that, after careful consideration and the opportunity to consult with its counsel and other advisors, the undersigned, on behalf of itself and all of the limited partners, is prepared to exchange the Interests for stock of Corporation without receipt of the Company Information. Very truly yours, PACIFIC CELLULAR TELEPHONE SYSTEMS By: Pac-Cell Partners, Inc. its general Partner By: /s/ ------------------------------ Perry Leff Chief Executive Officer ESCROW AGREEMENT THIS AGREEMENT made and entered into as of the 26th day of December 1995 by and among: Law Offices of Anne B. Roberts, with offices at 18 Latimer Road, Santa Monica, California 90402 (the "Escrow Agent"); and Pacific Cellular Telephone Systems withoffices at 18 Latimer Road, Santa Monica, California 90402 ("Pacific Cellular"); and Cellular Communications of Puerto Rico, Inc., a Delaware corporation with offices at 110 East 59th Street, 26th Floor, New York City, New York 10022 ("Cellular"). W I T N E S S E T H : WHEAREAS, Cellular and Pacific Cellular have entered into a letter agreement dated December 26, 1995 (the "Letter Agreement") pursuant to which certain funds are to be held in escrow from time to time; and WHEREAS, Escrow Agent has agreed to act as escrow agent hereunder upon the terms and conditions hereinafter set forth. NOW THEREFORE, in consideration of the premises and the mutal promises herein made the parties hereto hereby agree as follows: 1. CERTAIN DEFINITIONS - ---------------------- All capitalized terms not otherwise specifically defined herein shall have the meanings ascribed to them in the Letter Agreement. 2. APPOINTMENT OF ESCROW AGENT - ------------------------------ The parties hereto hereby jointly appoint Escrow Agent to act as the escrow agent hereunder, and the Escrow Agent hereby accepts the duties of escrow agent in accordance with the terms and conditions of this Agreement. 3. ESCROW FUND - -------------- Pursuant to the Letter Agreement, the parties hereto have caused there to be deposited $154,805.00 with the Escrow Agent simultaneously with the execution of this Agreement. 4. TERM - -------- The term of this Agreement shall commence on the date hereof and it shall remain in full force and effect until the Escrow Agent has distributed all of the Escrow Fund in its possession in accordance with the terms hereof, whereupon all obligations of the Escrow Agent hereunder shall immediately terminate; but the obligations of the other parties hereto pursuant to Sections 7, 8, 10, 11, and 12 hereof shall remain in full force and effect. 5. DUTIES OF ESCROW AGENT; DISTRIBUTIONS - ---------------------------------------- The Escrow Agent shall hold the Escrow Fund in escrow until authorized hereunder to deliver the same as described in the Letter Agreement. The Escrow Agent may, in its discretion, require written authorization from each of the other parties hereto prior to making any distribution. 6. DUTIES OF THE ESCROW AGENT; INVESTMENT - ----------------------------------------- The Escrow Agent shall invest the Escrow Fund held pursuant to this Agreement without delay and keep such cash invested and reinvested in interest bearing accounts in banks having insurance from the Federal Deposit Insurance Corporation. 7. DUTIES OF ESCROW AGENT; RELIANCE - ----------------------------------- (a) The obligations and duties of the Escrow Agent hereunder are purely ministerial and shall be limited to the safekeeping of the Escrow Fund and the actions herein specified in accordance with the provisions hereof; accordingly, the Escrow Agent shall not be responsible for any of the agreements referred to herein, but shall be obligated only for the performance of such duties as are specifically set forth herein and no implied duties or obligations of the Escrow Agent shall be imposed by virtue of this Agreement. (b) The Escrow Agent may act in reliance upon any writing or instrument or signature which it, in good faith, believes to be genuine; may assume the validity and accuracy of any statements or assertions contained in such writing or instrument; and may assume that any person purporting to give any writing, notice, advice or instruction in connection with the provisions hereof has been duly authorized to do so. Except for the Escrow Agent's liability arising from its gross negligence or fraud, the Escrow Agent shall not be liable in any manner for the sufficiency or correctness as to form, manner of execution, or validity of any written instructions, documents or papers deposited or called for hereunder or delivered to it, nor as to the identity, authority or rights of any person executing or delivering, or purporting to execute or deliver the same . (c) The Escrow Agent may consult counsel satisfactory to it. The Escrow Agent shall not be personally liable or responsible for any act it may do or omit to do hereunder while acting in good faith and any acts done or omitted by it pursuant to the advice of its own counsel shall be conclusive evidence of such good faith, absent fraud or gross negligence on the part such counsel. In no event shall the Escrow Agent be liable for indirect, private, special, or consequential damages. (d) The Escrow Agent is hereby expressly authorized to disregard any and all warnings given by any of the parties hereto or by any other person or corporation, excepting only orders or process of courts of law, and is hereby expressly authorized to comply with and obey orders, judgments or decrees of any court, or agreements stipulated to by the other parties hereto. In the event the Escrow Agent obeys or complies with any such order, judgment or decree of any court, it shall not be liable to any of the parties hereto or any other person, firm or corporation by reason of such compliance, notwithstanding any such order, judgment or decree being subsequently reversed, modified, annulled, set aside, vacated or found to have been ordered without jurisdiction. 8. INTERPLEADER - --------------- Notwithstanding any provisions contained herein to the contrary, in the event of disagreement about the interpretation of this Agreement, or about the rights or obligations of the parties hereto, or the propriety of any action contemplated by the Escrow Agent hereunder, the Escrow Agent, may in its sole discretion, file an action in interpleader to resolve said disagreement. The Escrow Agent shall be indemnified pursuant to the provisions of Section 11 hereof for all costs and attorneys' fees incurred by it in its capacity as Escrow Agent in connection with any such interpleader action, shall be fully protected in suspending all or part of its activities under this Agreement until a final judgment in the interpleader action has been issued, and upon the filing of such interpleader action, shall resign as Escrow Agent hereunder, at the request of any party hereto. 9. SUCCESSOR ESCROW AGENT - ------------------------- The Escrow Agent may resign at any time upon the giving of 10 days written notice to the other parties to this Agreement or, in the event of any litigation involving this Agreement, shall resign upon the request of the parties hereto, in which case the Escrow Agent's duties hereunder shall terminate and the Escrow Agent shall be relieved and discharged of all obligations, responsibilities and liabilities hereunder. Upon any such resignation or a resignation under Section 8 hereof, the other parties hereto shall jointly appoint a successor escrow agent, who shall assume the duties of Escrow Agent hereunder. The Escrow Agent shall immediately deposit all Escrow Funds with the successor escrow agent so appointed. If a successor Escrow Agent is not appointed within 10 days after notice of resignation, the Escrow Agent may petition any court of competent jurisdiction to name a successor Escrow Agent and may deposit the Escrow Fund with such court. 10. ADDITIONAL INSTRUCTIONS - --------------------------- The parties hereto at their respective cost and expense shall cooperate with and assist the Escrow Agent as reasonably requested by the Escrow Agent in connection with the Escrow Agent's performance of its obligations hereunder. Specifically, but not in limitation of the generality of the foregoing, the parties hereto shall furnish the Escrow Agent with other and further documents or instruments reasonably requested by the Escrow Agent in connection with this Agreement or its obligations with respect hereto. 11. IDEMNIFICATION - ------------------ The other parties hereto shall reimburse the Escrow Agent for all reasonable expenses incurred by the Escrow Agent in connection with its duties hereunder, unless and until the Escrow Agent is determined by a court of competent jurisdiction to have discharged any of its duties hereunder in a grossly negligent manner or to have been guilty of willful misconduct with regard to any of its duties hereunder. Except for the Escrow Agent's liability arising from its gross negligence or fraud, each of the other parties hereto shall jointly and severally indemnify and hold the Escrow Agent harmless from any and all claims, liabilities, losses, damages, penalties, claims, actions, suits, proceedings at law or equity, or any other expenses, fees, or charges of any nature whatsoever which it may incur or with which it may be threatened by reason of its acting as Escrow Agent under this Agreement; and in connection therewith to indemnify the Escrow Agent against any and all expenses including attorneys' fees and the cost of defending any action, suit or proceeding or resisting any claim in such capacity; provided, however, that in the event of a dispute among the other parties hereto, the nonprevailing party shall indemnify and hold the prevailing party harmless against any and all costs and expenses (including reasonable attorneys' fees) incurred by the prevailing party pursuant to the provisions hereof. 12. REPRESENTATION - ------------------ The parties hereto acknowledge and agree that the Escrow Agent has acted, and may continue to act, as counsel to Pacific Cellular in connection with the negotiation of the Letter Agreement and the consummation of the transactions contemplated thereby and that the Escrow Agent may represent Pacific Cellular in the future including, without limitation with respect to (a) disputes arising under the terms of the Letter Agreement (or any other agreement, document, or instrument executed and delivered in accordance therewith or contemplated thereby); or (b) disputes that may involve the rights or obligations of the other parties hereto hereunder. Cellular hereby waives any claim of conflict of interest which may arise from the actions of the Escrow Agent hereunder and its representation of Pacific Cellular, and agrees that the Escrow Agent shall not be disqualified or otherwise estopped from representing Pacific Cellular in any matter in the future. Cellular hereby waives any claim of conflict of interest which may arise from the fact that the Escrow Agent is a Limited Partner of Pacific Cellular. 13. MISCELLANEOUS - ----------------- (a) Notices. Any notice, request, acknowledgement, consent, or other -------- communication which any party hereto is required or permitted to give to another party shall be in writing and shall be delivered personally, sent by registered or certified mail, return receipt requested, or sent by a recognized overnight delivery service, in any such case to the recipient at his or its address first stated above or at such other address of which he or it shall have given the other party or parties due notice hereunder. Any such notice shall be deemed to have been delivered, given, and received for all purposes as of the date so delivered. (b) Waiver. The failure of any party to insist in any one or more instances ------ upon the performance of any of the terms and conditions of this Agreement shall not be construed as a waiver or relinquishment of any right granted hereunder, or of the future performance of any such term or condition. (c) Entire Agreement. This Agreement sets forth the entire understanding of the ---------------- parties hereto with respect to the subject matter hereof and supersedes any prior understandings or agreements among the parties, whether written or oral, to the extent related to the subject matter hereof. (d) Further Acts. Each of the parties hereto shall execute and deliver all such ------------ additional documents or legal instruments, and shall perform or cause to be performed all such further acts and things, as may be necessary or desirable to carry out the purposes and intent of this Agreement. (e) Amendment. This Agreement may not be amended, modified or altered in any --------- manner, except pursuant to the terms of a written instrument signed by each of the parties hereto. (f) Invalid Provision. The invalidity or unenforceability of any particular ----------------- provision of this Agreement shall not affect the other provisions hereof, and this Agreement shall thereafter be construed in all respects as if such invalid or unenforceable provisions were omitted. (g) Governing Law. This Agreement shall be governed by and construed in ------------- accordance with the domestic laws of the State of California without giving any effect to any choice or conflict of law provision or rule (whether of the State of California or of any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of California. (h) Binding Nature. This Agreement shall be binding upon and inure to the -------------- benefit of the parties hereto and their successors, personal representatives, heirs, devisees, guardians and assigns. (i) Counterparts. This Agreement may be executed in any number of counterparts ------------ and all of such counterparts taken together shall for all purposes constitute one agreement binding upon all of the parties. (j) Headings. The headings contained in this Agreement are for reference -------- purposes only and shall not affect the meaning or interpretation of this Agreement. (k) Usage. In construing this Agreement, feminine or neuter pronouns shall be ------ substituted for those of the masculine form, and the plural for the singular, and vice versa, in any case in which the context may require. The capitalized terms used in this Agreement shall have the meaning first applied to their first usage in this Agreement unless otherwise indicated. (l) Third Parties. Nothing contained in this Agreement is intended or shall be ------------- construed to give any person, corporation or other entity, other than the parties hereto and their respective successors and assigns, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained, this Agreement being intended to be and being for the sole and exclusive benefit of the parties hereto and their respective successors and assigns. IN WITNESS WHEREOF, the parties have duly executed this Agreement on and as of the date first above written: LAW OFFICES OF ANNE B. ROBERTS By: /s/ --------------------------- PACIFIC CELLULAR TELEPHONE SYSTEMS By: /s/ --------------------------- Chief Executive Officer of Pac-Cell Partners, Inc. General Partner of Pacific Cellular CELLULAR COMMUNICATIONS OF PUERTO RICO, INC. By: /s/ ------------------------------- Its Senior Vice President Pacific Cellular Telephone Systems 18 Latimer Road Santa Monica, California 90402 December 26, 1995 Cellular Communications of Puerto Rico, Inc. 110 E. 59th Street, 26th Floor New York, New York 10025 Re: San Juan Cellular Telephone Company Gentlemen: On or shortly before the date of this letter, San Juan Cellular Telephone Company has made a distribution of $172,006.00 which after tax withholding will result in $154,805.00 to Pacific Cellular Telephone Systems, a California Limited Partnership ("Pacific Cellular"), one of the partners of San Juan Cellular Telephone Company. On or shortly before the date of this letter, Pacific Cellular and its partners have entered into an Agreement with Cellular Communications of Puerto Rico, Inc. ("Cellular") and CCPR Services, Inc. (the "Agreement"), providing for, among other things, the acquisition of all or substantially all of the assets of Pacific Cellular in exchange for shares of stock of Cellular. In the event that the closing of the transaction contemplated by the Agreement has not occurred by March 31, 1996, Pacific Cellular will make a capital contribution of $154,805.00 to San Juan Cellular Telephone Company. In order to ensure the contribution of Pacific Cellular to San Juan Cellular Telephone Company, $154,805.00 will be deposited as an Escrow Fund with the Law Offices of Anne B. Roberts as Escrow Agent. Upon the closing of the transactions contemplated by the Agreement on or before March 31, 1996, the escrow will be terminated and the Escrow Fund will be distributed to Pacific Cellular. In the event that the closing of the transactions contemplated by the Agreement has not occurred by March 31, 1996, the escrow will be terminated and the Escrow Funds will be distributed to San Juan Cellular Telephone Company, in satisfaction of the obligations of Pacific Cellular as described above. Except in the event that there is any dispute regarding the Escrow Fund, the fees of the Escrow Agent shall be borne by Pacific Cellular. In the event that there is a dispute regarding the Escrow Fund, the fees of the Escrow Agent shall be borne 50% by Pacific Cellular and 50% by Cellular. Cellular Communications of Puerto Rico, Inc. December 26, 1995 Page two Please indicate your agreement to the foregoing by executing this letter in the space provided below. Sincerely, /s/ Perry Leff, Chief Executive Officer Pac-Cell Partners, Inc. General Partner of Pacific Cellular Telephone Systems Accepted, acknowledged and agreed to: CELLULAR COMMUNICATIONS OF PUERTO RICO, INC. By: /s/ ---------------------------------- Its Senior Vice President EX-5.1 5 OPINION OF RICHARD J. LUBASCH EXHIBIT 5.1 [CCPR letterhead] May 8, 1996 Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549 Gentlemen: I am Senior Vice President, General Counsel and Secretary of Cellular Communications of Puerto Rico, Inc., a Delaware corporation (the "Company"), and I or members of my staff have represented the Company in connection with the Company's Registration Statement on Form S-3 (the "Registration Statement") being filed by the Company with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the "Securities Act"), providing for the registration for sale of up to 820,404 shares of the Company's Common Stock, par value $.01 per share (the "Shares"), and associated Series A Junior Participating Preferred Stock Purchase Rights (the "Rights") issued pursuant to the transactions described in the Registration Statement relating to San Juan Cellular Telephone Company (the "Transactions"). This opinion is delivered in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Securities Act. In connection with this opinion, I or members of my staff have examined and are familiar with originals or copies, certified or otherwise identified to our satisfaction, of (i) the Registration Statement, (ii) the documents and agreements relating to the Transactions and the Rights, (iii) the resolutions adopted by the Board of Directors of the Company relating, among other things, to the issuance and registration of the Shares in the Transactions (v) the Restated Certificate of Incorporation of the Company, as amended, (vi) the By- laws of the Company as currently in effect, and (vii) such other corporate records or documents as we have deemed necessary to enable me to express the opinion hereinafter set forth. In our examination, I or members of my staff have assumed the legal capacity of all natural persons, the genuineness of all signatures, the authenticity of all documents submitted to us as certified or photostatic copies and the authenticity of the originals of such latter documents. I am a member of the Bar in the State of New York and I do not express any opinion as the laws of any other jurisdiction other than Delaware general corporation law and the laws of the United States of America. Based upon and subject to the foregoing, I am of the opinion that the Shares and the Rights issued in the Transactions are duly authorized and validly issued, fully paid and nonassessable Shares. I hereby consent to the reference to me under the heading "Legal Matters" in the prospectus which constitutes a part of the Registration Statement and the filing of this opinion as Exhibit 5 to the Registration Statement. Very truly yours, /s/ Richard J. Lubasch Richard J. Lubasch Senior Vice President, General Counsel and Secretary EX-23.1 6 CONSENT OF ERNST & YOUNG, LLP Exhibit 23.1 We consent to the reference to our firm under the caption "Experts" in the Registration Statement (Form S-3) and related Prospectus of Cellular Communications of Puerto Rico, Inc. for the registration of 820,404 shares of its common stock and to the incorporation by reference therein of our report dated February 23, 1996, with respect to the consolidated financial statements of Cellular Communications of Puerto Rico, Inc. included in its Annual Report (Form 10-K) for the year ended December 31, 1995, filed with the Securities and Exchange Commission. /s/ ERNST & YOUNG LLP San Juan, Puerto Rico May 8, 1996 -----END PRIVACY-ENHANCED MESSAGE-----