SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 7, 1999
PAGING NETWORK, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-19494 04-2740516
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
14911 Quorum Drive
Dallas, Texas 75240
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including are code: (972) 801-8000
Not Applicable
(Former name or former address, if changed since last report)
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Item 1. Changes in Control of Registrant.
On November 7, 1999, Paging Network, Inc., a Delaware corporation
(the "Company"), Arch Communications Group, Inc., a Delaware corporation
("Arch") and St. Louis Acquisition Corp., a Delaware corporation and wholly
owned subsidiary of Arch ("Merger Sub"), entered into an Agreement and Plan
of Merger (the "Merger Agreement"), pursuant to which Merger Sub will be
merged with and into the Company (the "Merger") with the Company as the
corporation surviving in the Merger. Pursuant to the terms, and subject to
the conditions of the Merger Agreement, each share of common stock, $0.01
par value per share, of the Company outstanding at the effective time of
the Merger will be converted into 0.1247 shares of common stock, $0.01 par
value per share, of Arch. The Merger Agreement also requires a
recapitalization of the combined company. The recapitalization will
include: (i) the conversion of $1.2 billion of the Company's (A) 10% senior
subordinated notes due 2008, (B) 10.125% senior subordinated notes due
2007, and (C) 8.875% senior subordinated notes due 2006; (ii) approximately
$384 million (accreted value as of September 30, 1999) of Arch 10 7/8%
senior discount notes due 2008; and (iii) $28 million (as of September 30,
1999) of Arch Series C Preferred Shares into common stock of the combined
company.
In connection with the Merger, the Board of Directors ("Board") of
the Company has approved an amendment to its Rights Agreement, dated as of
September 8, 1994, as amended by Amendment Number 1, dated as of March 16,
1999, each by and between the Company and the First National Bank of Boston
, as rights agent (the "Rights Agreement"). The amendment renders the
Rights Agreement inapplicable to the Merger and the transactions
contemplated by the Merger Agreement, and provides that (i) neither Arch
nor Merger Sub shall be deemed an Acquiring Person (as defined in the
Rights Agreement), (ii) no Distribution Date (as defined in the Rights
Agreement) shall be deemed to have occurred as a result of the Merger
Agreement or the transactions contemplated thereby, and (iii) the rights
issuable pursuant to the Rights Agreement will not separate from the
Company's common stock as a result of the approval, execution and delivery
of the Merger Agreement or the consummation of the transactions
contemplated thereby.
The preceding is qualified in its entirety by reference to the
Merger Agreement, Amendment Number 2 to Rights Agreement and the joint
press release announcing the signing of the Merger Agreement, copies of
which are attached hereto as Exhibits 2 , 99.1 and 99.2 respectively, and
which are incorporated herein by reference.
Item 7. Exhibits
2. Agreement and Plan of Merger, dated as of November 7, 1999, by and
among the Company, Arch and Merger Sub.
99.1 Amendment Number 2 to Rights Agreement, dated as of November 7,
1999, by and between the Company and the Rights Agent. (1)
99.2 Text of Joint Press Release, dated as of November 8, 1999, issued
by the Company and Arch.
- -------------------------
(1) Previously filed as an exhibit to the Registrant's Quarterly
Report on Form 10-Q for the Quarterly period ended September 30,
1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
Dated: November 17, 1999 PAGING NETWORK, INC.
By: /s/ Ruth Williams
----------------------
Ruth Williams
Senior Vice President and
General Counsel
3
AGREEMENT AND PLAN OF MERGER
among
PAGING NETWORK, INC.,
ARCH COMMUNICATIONS GROUP, INC.
and
ST. LOUIS ACQUISITION CORP.
Dated as of November 7, 1999
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Table of Contents
ARTICLE I.
The Merger; Closing; Effective Time
1.1. The Merger.........................................................1
1.2. Closing............................................................2
1.3. Effective Time.....................................................2
ARTICLE II.
Certificate of Incorporation and Bylaws of the Surviving Corporation
2.1. The Certificate of Incorporation...................................2
2.2. The Bylaws.........................................................2
ARTICLE III.
Directors & Officers
3.1. Directors of Arch..................................................3
3.2. Directors of the Surviving Corporation.............................3
3.3. Officers of the Surviving Corporation..............................3
ARTICLE IV.
Effect of the Merger on Capital Stock; Exchange of Certificates
4.1. Effect on Capital Stock.............................................3
4.2. Exchange of Certificates for Shares.................................4
4.3. Dissenters' Rights..................................................7
4.4. Adjustments to Prevent Dilution.....................................7
4.4. Alternate Transaction Structure.....................................7
ARTICLE V.
Representations and Warranties
5.1. Representations and Warranties of PageNet, Arch and Merger Sub.....8
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ARTICLE VI.
Covenants
6.1. Interim Operations.................................................23
6.2. Acquisition Proposals..............................................28
6.3. The Certificate Amendments.........................................30
6.4. Information Supplied...............................................30
6.5. Stockholders Meetings..............................................31
6.6. Filings; Other Actions; Notification...............................33
6.7. Access; Consultation...............................................35
6.8. Affiliates.........................................................35
6.9. Stock Exchange Listing.............................................35
6.10. Publicity..........................................................36
6.11. Benefits...........................................................36
6.12. Expenses...........................................................37
6.13. Indemnification; Directors' and Officers' Insurance................37
6.14. Takeover Statute...................................................39
6.15. Confidentiality....................................................39
6.16. Tax-Free Reorganization............................................39
6.17. Senior Credit Facilities...........................................39
6.18. The Exchange Offers................................................40
6.19. Bankruptcy Provisions..............................................45
6.20. Rights Agreement...................................................51
6.21. Preferred Stock....................................................51
6.22. Spinoff ...........................................................52
ARTICLE VII.
Conditions
7.1. Conditions to Each Party's Obligation to Effect the Merger.........52
7.2. Conditions to Obligations of Arch and Merger Sub...................54
7.3. Conditions to Obligation of PageNet................................56
ARTICLE VIII.
Termination
8.1. Termination by Mutual Consent......................................57
8.2. Termination by Either Arch or PageNet..............................58
8.3. Termination by PageNet.............................................58
8.4. Termination by Arch................................................58
8.5. Effect of Termination and Abandonment..............................59
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ARTICLE IX.
Miscellaneous and General
9.1. Survival...........................................................61
9.2. Modification or Amendment..........................................61
9.3. Waiver of Conditions...............................................62
9.4. Counterparts.......................................................62
9.5. Governing Law and Venue; Waiver of Jury Trial......................62
9.6. Notices............................................................63
9.7. Entire Agreement...................................................64
9.8. No Third Party Beneficiaries.......................................64
9.9. Obligations of Arch and of PageNet.................................64
9.10. Severability.......................................................65
9.11. Interpretation.....................................................65
9.12. Captions...........................................................65
9.13. Assignment.........................................................65
Exhibits
Certificate of Incorporation of the Surviving Corporation............Exhibit A
Arch Rights Agreement Amendment......................................Exhibit B
PageNet Affiliates Agreement.........................................Exhibit C
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Index of Defined Terms
Section
Term
Acquisition Proposal.....................................................6.2(a)
Agreement..............................................................preamble
Alternative Merger..........................................................4.5
Alternative Merger Notice...................................................4.5
Arch...................................................................preamble
Arch Class B Common Stock............................................5.1(b)(ii)
Arch Common Stock........................................................4.1(a)
Arch Companies...........................................................4.1(a)
Arch Conditions to the Prepackaged Plan....................................6.19
Arch Disclosure Letter......................................................5.1
Arch Exchange Offer.....................................................6.18(a)
Arch Exchange Prospectus................................................6.18(d)
Arch Exchange Registration Statement....................................6.18(d)
Arch Minimum Condition..................................................6.18(b)
Arch Notes..............................................................6.18(a)
Arch Preferred Shares................................................5.1(b)(ii)
Arch Required Consents................................................5.1(d)(i)
Arch Requisite Vote..................................................5.1(c)(ii)
Arch Rights Agreement................................................5.1(b)(ii)
Arch Series B Preferred Share........................................5.1(b)(ii)
Arch Series C Preferred Share........................................5.1(b)(ii)
Arch Stock Plans.....................................................5.1(b)(ii)
Arch Stockholders Approval...............................................6.5(b)
Arch Stockholders Meeting................................................6.5(b)
Arch Termination Fee.....................................................8.5(c)
Audit Date...............................................................5.1(f)
Bankruptcy and Equity Exception.......................................5.1(c)(i)
Bankruptcy Case............................................................6.19
Bankruptcy Code............................................................6.19
Bankruptcy Court...........................................................6.19
Bylaws......................................................................2.2
Certificate..............................................................4.1(a)
Certificate Amendments.................................................recitals
Certificate of Merger.......................................................1.3
Charter.....................................................................2.1
Closing.....................................................................1.2
Closing Date................................................................1.2
Code...................................................................recitals
Communications Act....................................................5.1(d)(i)
Compensation and Benefit Plans........................................5.1(h)(i)
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Confidentiality Agreement..................................................6.15
Contracts............................................................5.1(d)(ii)
Costs...................................................................6.13(a)
Current Premium.........................................................6.13(c)
D&O Insurance...........................................................6.13(c)
Delaware Courts..........................................................9.5(a)
DGCL........................................................................1.1
Disclosure Letter...........................................................5.1
Dismissal Order......................................................6.19(a)(v)
Distributed Interests......................................................6.22
Distributed Subsidiary.....................................................6.22
Effective Time..............................................................1.3
Environmental Law........................................................5.1(n)
ERISA.................................................................5.1(h)(i)
ERISA Affiliate.......................................................5.1(h)(i)
Exchange Act..........................................................5.1(b)(i)
Exchange Agent...........................................................4.2(a)
Exchange Offers.........................................................6.18(a)
Exchange Offers Expiration Date.........................................6.18(h)
Exchange Ratio...........................................................4.1(a)
Exchange Prospectus.....................................................6.18(d)
Exchange Registration Statements........................................6.18(d)
Excluded PageNet Shares..................................................4.1(a)
Exclusivity Provision...................................................6.19(d)
Exit Financing.............................................................6.19
Extended Determination Date........................................6.19(a)(iii)
FCC...................................................................5.1(d)(i)
FCC Regulations.......................................................5.1(d)(i)
Final Confirmation Order...................................................6.19
Final Order..............................................................7.1(c)
GAAP.....................................................................5.1(e)
Governmental Entity...................................................5.1(d)(i)
Governmental Regulations..............................................5.1(d)(i)
Hazardous Substance......................................................5.1(n)
HSR Act...............................................................5.1(d)(i)
Indemnified Parties.....................................................6.13(a)
Indenture Amendments....................................................6.18(c)
Initial Determination Date.................................................6.19
Initial Merger Motion...................................................6.19(d)
Initial Merger Order....................................................6.19(d)
Interim Financing..........................................................6.19
Involuntary Insolvency Event.........................................6.19(a)(v)
Involuntary Insolvency Event Date....................................6.19(a)(v)
IRS..................................................................5.1(h)(ii)
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Knowledgeable Executives.................................................5.1(g)
Laws.....................................................................5.1(i)
Material Adverse Effect..................................................5.1(a)
Merger.................................................................recitals
Merger Consideration.....................................................4.1(a)
Merger Sub.............................................................preamble
NASDAQ......................................................................6.9
Note Consents...........................................................6.18(b)
Note Waivers............................................................6.18(c)
Notes...................................................................6.18(a)
Notes Exchange Agent....................................................6.18(i)
Order....................................................................7.1(d)
PageNet................................................................preamble
PageNet Affiliates Agreement................................................6.8
PageNet Conditions to the Prepackaged Plan.................................6.19
PageNet Disclosure Letter...................................................5.1
PageNet Exchange Offer..................................................6.18(a)
PageNet Exchange Prospectus.............................................6.18(d)
PageNet Minimum Condition...............................................6.18(b)
PageNet Notes...........................................................6.18(a)
PageNet Option.......................................................6.11(a)(i)
PageNet Required Consents.............................................5.1(d)(i)
PageNet Rights Agreement..............................................5.1(b)(i)
PageNet Secured Creditors..................................................6.17
PageNet Share............................................................4.1(a)
PageNet Stock Plans...................................................5.1(b)(i)
PageNet Stockholders Approval............................................6.5(a)
PageNet Stockholders Meeting.............................................6.5(a)
PageNet Termination Fee..................................................8.5(b)
Pension Plan.........................................................5.1(h)(ii)
Permits..................................................................5.1(i)
Person...................................................................4.2(a)
Prepackaged Plan...........................................................6.19
Prospectus/Proxy Statement..................................................6.4
PUC...................................................................5.1(d)(i)
Reports..................................................................5.1(e)
Representatives..........................................................6.2(a)
Requisite Bankruptcy Vote of the PageNet Notes.............................6.19
Requisite Bankruptcy Vote of the PageNet Secured Creditors.................6.19
Requisite Conditions to the Prepackaged Plan...............................6.19
Rule 145 Affiliates.........................................................6.8
S-4 Registration Statement..................................................6.4
SEC......................................................................5.1(e)
Section 16 Person .................................................6.11(a)(iii)
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Securities Act........................................................5.1(d)(i)
Series C Consent Agreement .............................................6.21(a)
Series C Consideration .................................................6.21(a)
Series C Exchange Ratio ................................................6.21(a)
Significant Investees ...............................................5.1(d)(ii)
Significant Subsidiaries..............................................5.1(b)(i)
Spinoff....................................................................6.22
Spinoff Dividend...........................................................6.22
Spinoff Record Date........................................................6.22
State Laws............................................................5.1(d)(i)
Subsidiary...............................................................5.1(a)
Substitute Option....................................................6.11(a)(i)
Superior Proposal........................................................6.2(a)
Surviving Corporation.......................................................1.1
Takeover Statute.........................................................5.1(j)
Tax......................................................................5.1(l)
Tax Return...............................................................5.1(l)
Taxable..................................................................5.1(l)
Termination Date............................................................8.2
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AGREEMENT AND PLAN OF MERGER
----------------------------
This AGREEMENT AND PLAN OF MERGER ("Agreement"), dated as of
November 7, 1999, is among PAGING NETWORK, INC., a Delaware corporation
("PageNet"), ARCH COMMUNICATIONS GROUP, INC., a Delaware corporation
("Arch"), and ST. LOUIS ACQUISITION CORP., a Delaware corporation that is a
wholly owned subsidiary of Arch ("Merger Sub").
RECITALS
WHEREAS, the respective Boards of Directors of each of Arch,
Merger Sub and PageNet have approved, recommended and declared advisable
this Agreement and the merger of Merger Sub with and into PageNet (the
"Merger") upon the terms and subject to the conditions set forth in this
Agreement;
WHEREAS, the parties hereto intend, by executing and delivering
this Agreement, to adopt a plan of reorganization within the meaning of
Section 368(a) of the Internal Revenue Code of 1986, as amended (the
"Code"), and to cause the Merger and the other transactions which are part
of this plan of reorganization to qualify as a "reorganization" as therein
defined;
WHEREAS, the Arch Board of Directors has approved, recommended and
declared advisable certain amendments to its Certificate of Incorporation
to effectuate the actions described herein (the "Certificate Amendments"),
contemporaneously upon and in connection with the Merger;
WHEREAS, Arch, Merger Sub and PageNet desire to make certain
representations, warranties, covenants and agreements in connection with
this Agreement.
NOW, THEREFORE, in consideration of the premises, and of the
representations, warranties, covenants and agreements contained in this
Agreement, the parties hereto agree as follows:
ARTICLE I.
The Merger; Closing; Effective Time
-----------------------------------
1.1. The Merger. Upon the terms and subject to the conditions set
forth in this Agreement, at the Effective Time (as defined in Section 1.3),
Merger Sub shall be merged with and into PageNet and the separate corporate
existence of Merger Sub shall thereupon cease. PageNet shall be the
surviving corporation in the Merger (sometimes referred to as the
"Surviving Corporation") and shall continue to be governed by the laws of
the State of Delaware, and the separate corporate existence of PageNet with
all its rights, privileges, immunities, powers and franchises shall
1
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continue unaffected by the Merger, except as set forth in Article III of
this Agreement. The Merger shall have the effects specified in the Delaware
General Corporation Law, as amended (the "DGCL").
1.2. Closing. The closing of the Merger (the "Closing") shall take
place: (i) at the offices of Hale and Dorr LLP, 60 State Street, Boston,
Massachusetts, at 9:00 A.M., local time, on the second business day after
the date on which the last to be fulfilled or waived of the conditions set
forth in Article VII (other than those conditions that by their nature are
to be satisfied at the Closing, but subject to the fulfillment or waiver of
those conditions) shall be satisfied or waived in accordance with this
Agreement; or (ii) at such other place and time and/or on such other date
as Arch and PageNet may agree in writing (the "Closing Date").
1.3. Effective Time. At the Closing, Arch and PageNet will cause a
Certificate of Merger (the "Certificate of Merger") to be executed,
acknowledged, and filed with the Secretary of State of the State of
Delaware as provided in Section 251 of the DGCL. The Merger shall become
effective at the time when the Certificate of Merger has been duly filed
with the Secretary of State of the State of Delaware or such other later
time as shall be agreed upon by the parties and set forth in the
Certificate of Merger in accordance with the DGCL (the "Effective Time").
ARTICLE II.
Certificate of Incorporation and Bylaws of the Surviving Corporation
--------------------------------------------------------------------
2.1. The Certificate of Incorporation. The certificate of
incorporation of PageNet, amended and restated in its entirety as set forth
in Exhibit A, shall be the certificate of incorporation of the Surviving
Corporation (the "Charter"), until duly amended as provided therein or by
applicable law.
2.2. The Bylaws. The bylaws of Merger Sub, as in effect
immediately prior to the Effective Time, shall be the bylaws of the
Surviving Corporation (the "Bylaws"), until thereafter amended as provided
therein or by applicable law.
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ARTICLE III.
Directors & Officers
--------------------
3.1. Directors of Arch Arch shall take all actions necessary
(subject to applicable law and any necessary stockholder approval) to
cause, at the Effective Time, the number of directors comprising the full
Board of Directors of Arch to be comprised of twelve directors, six of
which shall be nominated by the Board of Directors of Arch, and six of
which shall be nominated by the Board of Directors of PageNet, each such
person to serve from the Effective Time until his or her successor has been
duly elected and qualified, or until his or her earlier death, resignation,
or removal in accordance with the Charter and the Bylaws; provided,
however, that of the six directors nominated by the Board of Directors of
PageNet, one shall be designated by each of the three holders of PageNet
Notes holding the greatest percentage in aggregate principal amount of the
PageNet Notes; and if and to the extent that any such holder declines to
make such designation, the number of directors nominated by the Board of
Directors of PageNet shall be decreased and the number of directors
nominated by the Board of Directors of Arch shall be increased. The
directors nominated by PageNet shall be divided as nearly evenly as is
possible among the classes of directors of Arch.
3.2. Directors of the Surviving Corporation. The directors of
Merger Sub at the Effective Time shall, from and after the Effective Time,
be the directors of the Surviving Corporation until his or her successor
has been duly elected and qualified, or until his or her earlier death,
resignation, or removal in accordance with the Charter and the Bylaws;
3.3. Officers of the Surviving Corporation. The officers of
PageNet at the Effective Time shall at the Effective Time, be the officers
of the Surviving Corporation until his or her successor has been duly
elected and qualified, or until their earlier death, resignation, or
removal in accordance with the Charter and the Bylaws.
ARTICLE IV.
Effect of the Merger on Capital Stock; Exchange of Certificates
---------------------------------------------------------------
4.1. Effect on Capital Stock. At the Effective Time, the Merger
shall have the following effects on the capital stock of Arch, Merger Sub
and PageNet, without any action on the part of the holder of any capital
stock of Arch, Merger Sub or PageNet:
(a) Merger Consideration. Each share of common stock, par
value $0.01 per share, of PageNet (each, a "PageNet Share") issued
and outstanding immediately prior to the Effective Time (excluding
PageNet Shares (collectively, "Excluded PageNet Shares") that are
owned by Arch, Merger Sub or any direct or indirect, wholly owned
subsidiary of Arch or Merger Sub (collectively, the "Arch
Companies")), shall be converted into and become exchangeable for
0.1247 of a share (the "Exchange Ratio") of common stock, par
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value $0.01 per share, of Arch (the "Arch Common Stock"), subject
to adjustment as provided in Section 4.4, (the "Merger
Consideration"). At the Effective Time, all PageNet Shares shall
no longer be outstanding, shall be canceled and retired and shall
cease to exist, and each certificate (a "Certificate") formerly
representing any of such PageNet Shares (other than Excluded
PageNet Shares) shall thereafter represent only the right to receive
the Merger Consideration and the right, if any, to receive a
distribution or dividend pursuant to Section 4.2(b)(i), in each case
without interest, or to vote pursuant to Section 4.2(b)(ii).
(b) Cancellation of Excluded PageNet Shares. At the
Effective Time, each Excluded PageNet Share shall no longer be
outstanding, shall be canceled and retired without payment of any
consideration therefor, and shall cease to exist.
(c) Merger Sub Capital Stock. At the Effective Time, each
share of Common Stock, par value $0.01 per share, of Merger Sub
issued and outstanding immediately prior to the Effective Time
shall be converted into one share of common stock of the Surviving
Corporation, and the Surviving Corporation shall thereby become a
wholly owned subsidiary of Arch.
4.2. Exchange of Certificates for Shares.
(a) Exchange Procedures. Promptly after the Effective
Time, Arch shall cause its transfer agent or another exchange
agent selected by Arch with PageNet's prior approval (the
"Exchange Agent"), which shall not be unreasonably withheld, to
mail to each holder of record as of the Effective Time of a
Certificate: (i) a letter of transmittal specifying that delivery
of the Certificates shall be effected, and that risk of loss and
title to the Certificates shall pass, only upon delivery of the
Certificates (or affidavits of loss in lieu thereof) to the
Exchange Agent in accordance with the terms and conditions of such
letter of transmittal, such letter of transmittal to be in such
form and have such other provisions as Arch and PageNet may
reasonably agree; and (ii) instructions for exchanging the
Certificates for: (A) certificates representing shares of Arch
Common Stock; and (B) any unpaid dividends and other distributions
due to such holder with respect to such shares, including, with
respect to holders of PageNet Shares at the Spinoff Record Date
(as defined in Section 6.22), the Distributed Interests (as
defined in Section 6.22). Subject to Section 4.2(g), upon proper
surrender of a Certificate for cancellation (or affidavits of loss
in lieu thereof) to the Exchange Agent together with such letter
of transmittal, duly executed, the holder of such Certificate
shall be entitled to receive in exchange therefor: (x) a
certificate representing that number of shares of Arch Common
Stock that such holder is entitled to receive pursuant to this
Article IV and, with respect to PageNet Shares at the Spinoff
Record Date, certificates representing the Distributed Interests
that such holder is entitled pursuant to Section 6.22; and (y) a
check in the amount (after giving effect to any required tax
withholdings) of any dividends or other distributions that such
holder has the right to receive pursuant to the provisions of this
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Article IV. The Certificate so surrendered shall forthwith be
canceled. No interest will be paid or accrued on any amount
payable upon due surrender of any Certificate. In the event of a
transfer of ownership of PageNet Shares that is not registered in
the transfer records of PageNet, a certificate representing the
proper number of shares of Arch Common Stock and, with respect to
PageNet Shares at the Spinoff Record Date, certificates
representing the Distributed Interests, together with a check for
any dividends or distributions with respect thereto, may be issued
and/or paid to such a transferee if the Certificate formerly
representing such PageNet Shares is presented to the Exchange
Agent, accompanied by all documents required to evidence and
effect such transfer and to evidence that all applicable stock
transfer taxes have been paid. If any certificate for shares of
Arch Common Stock is to be issued in a name other than that in
which the Certificate surrendered in exchange therefor is
registered, it shall be a condition of such exchange that the
Person (as defined below) requesting such exchange shall pay all
transfer and other taxes required by reason of the issuance of
certificates for shares of Arch Common Stock and/or Distributed
Interests in a name other than that of the registered holder of
the Certificate surrendered, or shall establish to the
satisfaction of Arch or the Exchange Agent that such tax has been
paid or is not applicable.
The term "Person" means any individual, corporation (including
not-for-profit), general or limited partnership, limited liability company,
joint venture, estate, trust, association, organization, Governmental
Entity (as defined in Section 5.1(d)(i)), or other entity of any kind or
nature.
(b) Distributions With Respect To Unexchanged Shares; Voting.
(i) Whenever a dividend or other distribution is
declared by Arch with respect to Arch Common Stock, the record
date for which is at or after the Effective Time, that declaration
shall include dividends or other distributions with respect to all
shares of Arch Common Stock issuable pursuant to this Agreement.
No dividends or other distributions with respect to such Arch
Common Stock shall be paid to any holder of any unsurrendered
Certificate until such Certificate is surrendered for exchange in
accordance with this Article IV. Subject to the effect of
applicable Laws, following surrender of any such Certificate,
there shall be issued or paid to the holder of the certificates
representing shares of Arch Common Stock issued in exchange
therefor, without interest: (A) at the time of such surrender, the
dividends or other distributions with a record date after the
Effective Time and a payment date on or prior to the date of
issuance of such shares of Arch Common Stock and not previously
paid; and (B) at the appropriate payment date, the dividends or
other distributions payable with respect to such shares of Arch
Common Stock with a record date after the Effective Time and prior
to the date of issuance of such shares of Arch Common Stock but
with a payment date subsequent to surrender. For purposes of
dividends or other distributions with respect to shares of Arch
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Common Stock, all such shares to be issued pursuant to the Merger
shall be deemed issued and outstanding as of the Effective Time.
(ii) At any meeting of stockholders of Arch with
a record date at or after the Effective Time, registered holders
of unsurrendered Certificates shall be entitled to vote the number
of shares of Arch Common Stock represented by such Certificates,
regardless of whether such holders have exchanged their
Certificates; provided, however, that any such vote shall be at
the times, upon the conditions, and in the manner prescribed by
the certificate of incorporation and bylaws of Arch.
(c) Transfers. From and after the Effective Time, there
shall be no transfers of PageNet Shares or Arch Series C Preferred
Shares that were outstanding immediately prior to the Effective
Time recorded on the stock transfer books of PageNet or Arch, as
the case may be.
(d) Fractional Shares. Notwithstanding any other
provision of this Agreement to the contrary, no certificates or
scrip representing fractional shares of Arch Common Stock will be
issued in the Merger, but in lieu thereof, each holder of
Certificates otherwise entitled to a fractional share of Arch
Common Stock will be entitled to receive, from the Exchange Agent
in accordance with the provisions of this Section 4.2(d), a cash
payment in lieu of such fractional shares of Arch Common Stock
determined by multiplying such fraction (rounded to the nearest
one-hundredth of a share) by the average closing price of a share
of Arch Common Stock, as reported in The Wall Street Journal, New
York City edition, on the ten (10) days immediately prior to the
Effective Time. As soon as practicable after the determination of
the amount of cash, if any, to be paid to the holders of
Certificates in lieu of any fractional shares of Arch Common
Stock, the Exchange Agent shall make available such amounts of
cash to such holders of Certificates, without interest thereon.
(e) Termination of Exchange Period; Unclaimed Stock. Any
shares of Arch Common Stock, and any portion of the dividends or
other distributions with respect to the Arch Common Stock
deposited by Arch with the Exchange Agent (including the proceeds
of any investments thereof) that remain unclaimed by the holders
of Certificates 180 days after the Effective Time shall be
re-delivered to Arch. Any holders of Certificates who have not
theretofore complied with this Article IV shall thereafter be
entitled to look only to the Surviving Corporation for exchange of
shares of Arch Common Stock, and any dividends and other
distributions with respect thereto issuable and/or payable
pursuant to Section 4.1, Section 4.2(b), and Section 4.2(d) upon
due surrender of their Certificates (or affidavits of loss in lieu
thereof), in each case, without any interest thereon.
Notwithstanding the foregoing, none of Arch, the Exchange Agent,
nor any other Person shall be liable to any former holder of
Certificates for any amount properly delivered to a public
official pursuant to applicable abandoned property, escheat or
similar laws.
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(f) Lost, Stolen or Destroyed Certificates. In the event
any Certificate shall have been lost, stolen or destroyed, upon
the making of an affidavit of that fact by the Person claiming
such Certificate to be lost, stolen or destroyed, and the posting
by such Person of a bond in the form customarily required by Arch
as indemnity against any claim that may be made against it with
respect to such Certificate, Arch will issue the shares of Arch
Common Stock and the Exchange Agent will issue stock and any
dividends and other distributions with respect thereto issuable or
payable in exchange for such lost, stolen, or destroyed
Certificate pursuant to Section 4.1, Section 4.2(b) and Section
4.2(d), in each case, without interest.
(g) Affiliates. Notwithstanding anything in this
Agreement to the contrary, Certificates surrendered for exchange
by any Rule 145 Affiliate (as determined pursuant to Section 6.8)
of PageNet shall not be exchanged until Arch has received a
written agreement from such Person as provided in Section 6.8.
4.3. Dissenters' Rights. In accordance with Section 262 of the
DGCL, no appraisal rights will be available to holders of PageNet Shares in
connection with the Merger.
4.4. Adjustments to Prevent Dilution. In the event that prior to
the Effective Time, solely as a result of a distribution, reclassification,
stock split (including a reverse split), stock dividend or stock
distribution, or other similar transaction, there is a change in the number
of PageNet Shares, Arch Series C Preferred Shares, Arch Common Stock, or
securities convertible or exchangeable into, or exercisable for, PageNet
Shares, Arch Series C Preferred Shares or Arch Common Stock issued and
outstanding, the Exchange Ratio and the Series C Exchange Ratio shall be
equitably adjusted to eliminate the effects of such event.
4.5. Alternate Transaction Structure. At any time prior to the
effectiveness of the S-4 Registration Statement (as defined herein), either
Arch or PageNet may notify the other party (the "Alternative Merger
Notice") that it desires to restructure the Merger or the other
transactions contemplated hereby in a manner contemplated to (i) increase
the likelihood that the Merger would be treated as a tax-free
reorganization within the meaning of Section 368(a) of the Code, (ii)
decrease any potential tax liability of PageNet, Arch or the Surviving
Corporation after the Effective Time, (iii) provide greater operational
flexibility to Arch and the Surviving Corporation after the Effective Time,
or (iv) increase the number of PageNet Shares (or Distributed Interests)
offered to holders of PageNet Notes or the number of shares of Arch Common
Stock offered to holders of Arch Notes in the Exchange Offers (with a
corresponding reduction in the number of shares offered to the holders of
PageNet Shares (or Distributed Interests) or the holders of Arch Common
Stock, respectively). Upon delivery of the Alternative Merger Notice, the
parties to this Agreement shall cooperate with each other and use their
respective reasonable best efforts to determine the manner in which the
Merger, the Agreement and the transactions contemplated hereby shall be
restructured (the Merger, restructured as contemplated by the parties
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pursuant to this Section 4.5, shall be referred to herein as the
"Alternative Merger"). With the written consent of each of the parties to
this Agreement (such consent not to be unreasonably withheld), the Merger,
this Agreement and the other transactions contemplated hereby may be
modified to reflect the Alternative Merger with a view to ensuring that the
parties hereto are not adversely affected by the restructuring.
ARTICLE V.
Representations and Warranties
5.1. Representations and Warranties of PageNet, Arch and Merger
Sub. Except as set forth in the corresponding sections or subsections of
the respective disclosure letters, dated as of the date of this Agreement,
and delivered by PageNet to Arch or by Arch to PageNet (each a "Disclosure
Letter," and the "PageNet Disclosure Letter" and the "Arch Disclosure
Letter," respectively), as the case may be, PageNet (except for
subparagraphs (b)(ii), (c)(ii), (j)(ii) and (o)(ii) below and references in
subparagraphs (a) and (e) below to documents made available by Arch to
PageNet) represents and warrants to Arch and Merger Sub, and Arch, on
behalf of itself and Merger Sub (except for subparagraphs (b)(i), (c)(i),
(j)(i), and (o)(i) below, and references in subparagraphs (a) and (e) below
to documents made available by PageNet to Arch) represents and warrants to
PageNet, that:
(a) Organization, Good Standing and Qualification. Each
of it and its Subsidiaries is a corporation duly organized,
validly existing, and in good standing under the laws of its
respective jurisdiction of organization and has all requisite
corporate or similar power and authority to own and operate its
properties and assets and to carry on its business as presently
conducted, and is qualified to do business and is in good standing
as a foreign corporation in each jurisdiction where the ownership
or operation of its properties or conduct of its business requires
such qualification, except when the failure to be so qualified or
in good standing, when taken together with all other such
failures, is not reasonably likely to have a Material Adverse
Effect (as defined below) on it. It has made available to Arch, in
the case of PageNet, and to PageNet, in the case of Arch, a
complete and correct copy of its certificate of incorporation and
bylaws, each as amended to date. Such certificates of
incorporation and bylaws are in full force and effect.
The term "Subsidiary" means, with respect to PageNet or Arch, as
the case may be, any entity, whether incorporated or unincorporated, of
which at least a majority of the securities or other ownership interests
having by their terms ordinary voting power to elect at least a majority of
the Board of Directors or other persons performing similar functions is
directly or indirectly owned by such party.
The term "Material Adverse Effect" means, with respect to any
Person, a material adverse effect on the business, assets (including
licenses, franchises and other intangible assets), financial condition and
results of operations of such Person and its Subsidiaries, taken as a
whole; provided, however, that Material Adverse Effect shall exclude any
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effect resulting from, or related to, changes or developments involving:
(1) a prospective change arising out of any proposed or adopted
legislation, or any other proposal or enactment by any governmental,
regulatory, or administrative authority; (2) general conditions applicable
to the U.S. economy, including changes in interest rates; or (3) conditions
affecting the U.S. wireless telecommunications industry, in each case taken
as a whole.
Reference to "the other party" means, with respect to PageNet,
Arch and means, with respect to Arch, PageNet.
(b) Capital Structure.
(i) The authorized capital stock of PageNet
consists of 250,000,000 PageNet Shares, of which 103,960,240
PageNet Shares were issued and outstanding and no PageNet Shares
were held in treasury as of the close of business on November 5,
1999, and 25,000,000 shares of preferred stock, of which no shares
were issued and outstanding as of the close of business on
November 5, 1999. All of the outstanding PageNet Shares have been
duly authorized and are validly issued, fully paid and
nonassessable. There are no PageNet Shares reserved for issuance
pursuant to the Shareholder Rights Agreement, dated as of
September 8, 1994, between PageNet and The First National Bank of
Boston, as Rights Agent, as amended (the "PageNet Rights
Agreement"), and PageNet Shares subject to issuance as set forth
below, as of the date of this Agreement, and PageNet has no
PageNet Shares or preferred stock reserved for, or subject to,
issuance. As of November 5, 1999, there were 9,887,588 PageNet
Shares that PageNet was obligated to issue pursuant to PageNet's
stock plans, at a weighted average exercise price of $9.2637 per
PageNet Share, and each of such plans is listed in Section
5.1(b)(i) of the PageNet Disclosure Letter (collectively, the
"PageNet Stock Plans"). Each of the outstanding shares of capital
stock or other securities of each of PageNet's "Significant
Subsidiaries" (as defined in Rule 1.02(w) of Regulation S-X
promulgated pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), including any Subsidiaries that, if
aggregated, would together constitute a Significant Subsidiary) is
duly authorized, validly issued, fully paid and nonassessable and
owned by PageNet or a direct or indirect wholly owned subsidiary
of PageNet, free and clear of any lien, pledge, security interest,
claim or other encumbrance. Except as set forth above, as of the
date of this Agreement there are no preemptive or other
outstanding rights, options, warrants, conversion rights, stock
appreciation rights, redemption rights, repurchase rights,
agreements, arrangements or commitments to issue or to sell any
shares of capital stock or other securities of PageNet or any of
its Significant Subsidiaries or any securities or obligations
convertible or exchangeable into, or exercisable for, or giving
any Person a right to subscribe for or acquire, any securities of
PageNet or any of its Significant Subsidiaries, and no securities
or obligation evidencing such rights are authorized, issued or
outstanding. As of the date hereof, PageNet does not have
outstanding any bonds, debentures, notes or other debt
obligations, the holders of which have the right to vote (or
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<PAGE>
convertible into or exercisable for securities having the right
to vote) with the stockholders of PageNet on any matter. No PageNet
Shares are held by a Subsidiary of PageNet.
(ii) The authorized capital stock of Arch
consists of 65,000,000 shares of Arch Common Stock, of which
45,837,186 shares of Arch Common Stock were issued and outstanding
and no shares of Arch Common Stock were held in treasury as of the
close of business on November 5, 1999, 10,000,000 shares of Class
B common stock, par value $0.01 per share, of Arch (the "Arch
Class B Common Stock") of which 5,360,261 shares of Arch
Class B Common Stock were issued and outstanding as of the close
of business on November 5, 1999, and 10,000,000 shares of
preferred stock, of which (x) 250,000 were designated Series C
Convertible Preferred Stock, par value $0.01 per share (each a
"Arch Series C Preferred Share"), of which 250,000 shares were
issued and outstanding as of the close of business on November 5,
1999, and (y) 300,000 shares of which were designated Series B
Junior Participating Preferred Stock, par value $0.01 per share
(each a "Arch Series B Preferred Share," collectively the "Arch
Series B Preferred Shares"), none of which were outstanding as of
the close of business on November 5, 1999 (the Arch Series B
Preferred Shares together with the Arch Series C Preferred Shares,
the "Arch Preferred Shares"). All of the outstanding shares of
Arch Common Stock, Arch Class B Common Stock and Arch
Preferred Shares have been duly authorized and are validly issued,
fully paid and nonassessable. Other than 300,000 Arch Series B
Preferred Shares reserved for issuance pursuant to the Rights
Agreement, dated as of October 13, 1995, between Arch and The Bank
of New York, as Rights Agent, as amended (the "Arch Rights
Agreement"), and Arch Common Stock subject to issuance as set
forth below, and Arch Preferred Shares, Arch has not authorized,
issued, or reserved for issuance any common stock, preferred
stock, or other shares of capital stock as of the date of this
Agreement. As of November 5, 1999, there were 1,834,253 shares of
Arch Common Stock that Arch was obligated to issue pursuant to
Arch' stock plans, at a weighted average exercise price of $10.18
per share of Arch Common Stock, each of such plans is listed in
Section 5.1(b)(ii) of the Arch Disclosure Letter (collectively the
"Arch Stock Plans"), and 5,902,702 shares of Arch Common Stock
that Arch was obligated to issue pursuant to outstanding warrants
having an expiration date of September 1, 2001 and an effective
exercise price of $9.03 per Share of Arch Common Stock. As of the
date hereof, each outstanding Arch Series C Preferred Share is
convertible into 6.7444 shares of Arch Common Stock. Each of the
outstanding shares of capital stock or other securities of each of
Arch' Significant Subsidiaries is duly authorized, validly issued,
fully paid and nonassessable and owned by Arch or a direct or
indirect wholly owned Subsidiary of Arch, free and clear of any
lien, pledge, security interest, claim, or other encumbrance.
Except as set forth above and except pursuant to the Arch Series B
Preferred Shares or the Arch Series C Preferred Shares, there are
no preemptive or other outstanding rights, options, warrants,
conversion rights, stock appreciation rights, redemption rights,
repurchase rights, agreements, arrangements or commitments to
issue or sell any shares of capital stock or other securities of
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Arch or any of its Significant Subsidiaries or any securities or
obligations convertible or exchangeable into, or exercisable for,
or giving any Person a right to subscribe for or acquire, any
securities of Arch or any of its Significant Subsidiaries, and no
securities or obligations evidencing such rights are authorized,
issued or outstanding. Arch does not have outstanding any bonds,
debentures, notes or other debt obligations, the holders of which
have the right to vote (or convertible into or exercisable for
securities having the right to vote) with the stockholders of Arch
on any matter. No shares of Arch Common Stock or Arch Preferred
Shares are held by a Subsidiary of Arch. The authorized capital
stock of Merger Sub consists of 1,000 shares of Common Stock, par
value $0.01 per share, all of which are validly issued and
outstanding. All of the issued and outstanding capital stock of
Merger Sub is, and at the Effective Time will be, owned by Arch,
and there are (i) no other shares of capital stock or other voting
securities of Merger Sub, (ii) no securities of Merger Sub
convertible into or exchangeable for shares of capital stock or
other voting securities of Merger Sub and (iii) no options or
other rights to acquire from Merger Sub, and no obligations of
Merger Sub to issue, any capital stock, other voting securities or
securities convertible into or exchangeable for capital stock or
other voting securities of Merger Sub. Merger Sub has not
conducted any business prior to the date of this Agreement and has
no, and prior to the Effective Time will have no, assets,
liabilities or obligations of any nature other than those incident
to its formation and pursuant to this Agreement and the Merger and
the other transactions contemplated by this Agreement.
(c) Corporate Authority; Approval and Fairness.
(i) PageNet has all requisite corporate power
and authority and has taken all corporate action necessary in
order to execute, deliver and perform its obligations under this
Agreement and, subject only to adoption of this Agreement and
approval of the Merger and the amendment to the PageNet
certificate of incorporation to increase the number of PageNet
Shares authorized to the amount sufficient to complete the
transactions contemplated by this Agreement by the holders of a
majority of the PageNet Shares in accordance with applicable law
and PageNet's bylaws and charter and to the receipt of PageNet
Required Consents (as defined in Section 5.1(d)(i)), to consummate
the Merger. This Agreement has been duly executed and delivered by
PageNet and is a valid and binding agreement of PageNet,
enforceable against PageNet in accordance with its terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles
(the "Bankruptcy and Equity Exception"). The Board of Directors of
PageNet: (A) has unanimously approved and declared advisable this
Agreement and the other transactions contemplated by this
Agreement; and (B) has received the opinion of each of its
financial advisors, Houlihan Lokey Howard & Zukin Capital,
Goldman, Sachs & Co. and Morgan Stanley Dean Witter, in a
customary form and to the effect that the Merger Consideration and
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the Distributed Interests, taken as a whole, to be received by the
holders of PageNet Shares, on the date of such opinion, is fair to
such holders from a financial point of view. The PageNet Shares
when issued pursuant to the PageNet Exchange Offer (as defined in
Section 6.18(a)), will be validly issued, fully paid and
nonassessable, and no stockholder of PageNet will have any
preemptive right of subscription or purchase with respect thereto.
(ii) Arch and Merger Sub each has all requisite
corporate power and authority and has taken all corporate action
necessary in order to execute, deliver and perform its obligations
under this Agreement and the Series C Consent Agreement and,
subject only to adoption of the Certificate Amendments (or this
Agreement and the Alternative Merger if Arch is a party to the
Alternative Merger) and the other transactions contemplated by
this Agreement pursuant to this Agreement by a majority of the
votes of the Arch Common Stock and Arch Series C Preferred Shares
voting together and a majority of the votes of the Arch Series C
Preferred Shares (for certain of the Certificate Amendments) in
accordance with applicable law and Arch' certificate of
incorporation and bylaws (the "Arch Requisite Vote"), and to the
receipt of the Arch Required Consents (as defined in Section
5.1(d)(i)), to consummate the Merger. This Agreement has been duly
executed and delivered by Arch and Merger Sub and is a valid and
binding agreement of Arch and Merger Sub, enforceable against Arch
and Merger Sub in accordance with its terms, subject to the
Bankruptcy and Equity Exception. The Board of Directors of Arch:
(A) has unanimously approved and declared advisable this Agreement
and the Series C Consent Agreement and the other transactions
contemplated by this Agreement and the Series C Consent Agreement;
and (B) has received the opinion of its financial advisor, Bear,
Stearns & Co. Inc., in a customary form and to the effect that the
Exchange Ratio, as of the date of such opinion, is fair to the
public stockholders of Arch from a financial point of view. The
shares of Arch Common Stock, when issued pursuant to this
Agreement or the Arch Exchange Offer, will be validly issued,
fully paid and nonassessable, and no stockholder of Arch will have
any preemptive right of subscription or purchase with respect
thereto.
(d) Government Filings; No Violations.
(i) Other than the filings, notices and/or
approvals: (A) pursuant to Section 1.3 of this Agreement, or, in
connection with the Bankruptcy Case and the Prepackaged Plan, the
Final Confirmation Order; (B) under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"),
the Exchange Act, and the Securities Act of 1933, as amended (the
"Securities Act"); (C) of the Federal Communications Commission
(the "FCC") pursuant to the Communications Act of 1934, as amended
(the "Communications Act"), or the rules, regulations, and
policies of the FCC (the "FCC Regulations"); (D) of any state
public utility commissions or similar state regulatory bodies
(each, a "PUC") identified in its respective Disclosure Letter
pursuant to applicable state Laws (as defined in Section 5.1(i))
regulating the paging or other telecommunications business ("State
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Laws"); (E) to comply with state securities or "blue-sky" laws;
and (F) of any local, state or federal governmental authorities
required for a change in ownership of transmission sites (all of
such filings and/or notices of Arch being referred to as the "Arch
Required Consents" and of PageNet being referred to as the
"PageNet Required Consents"), no notices, reports or other filings
are required to be made by it with, nor are any consents,
registrations, approvals, permits or authorizations required to be
obtained by it from, any governmental or regulatory authority,
court, agency, commission, body or other governmental entity
("Governmental Entity"), in connection with the execution and
delivery of this Agreement by it and the consummation by it of the
Merger and the other transactions contemplated by this Agreement,
except those that the failure to make or obtain are not,
individually or in the aggregate, reasonably likely to have a
Material Adverse Effect on it or prevent, materially delay or
materially impair its ability to (x) consummate the transactions
contemplated by this Agreement or (y) operate its business
following the Effective Time.
The term "Governmental Regulations" includes the HSR Act,
the Communications Act, the FCC Regulations, State Laws, and any other
antitrust, competition, or telecommunications Law of the United States of
America or any other nation, province, territory or jurisdiction that must
be satisfied or complied with in order to consummate and make effective the
Merger and the other transactions contemplated by this Agreement.
(ii) The execution, delivery and performance of
this Agreement by it do not, and the consummation by it of the
Merger and the other transactions contemplated by this Agreement
will not, constitute or result in: (A) a breach or violation of,
or a default under, its certificate of incorporation or bylaws or
the comparable governing instruments of any of its Significant
Subsidiaries or any entity in which it has an equity interest of
20% or more (collectively, with Significant Subsidiaries,
"Significant Investees"); (B) a breach or violation of, or a
default under, the acceleration of any obligations or the creation
of a lien, pledge, security interest or other encumbrance on its
assets or the assets of any of its Significant Investees (with or
without notice, lapse of time or both) pursuant to, any agreement,
lease, contract, note, mortgage, indenture, arrangement or other
obligation ("Contracts") binding upon it or any of its Significant
Investees or any Law or governmental or non-governmental permit or
license to which it or any of its Significant Investees is subject
or is a party; or (C) any change in the rights or obligations of
any party under any Contracts to which it or any of its
Significant Investees is subject or is a party, except for such
defaults, breaches, violations or accelerations as may result from
the Bankruptcy Case or the Prepackaged Plan, and except, in the
case of clauses (B) or (C) above for any breach, violation,
default, acceleration, creation or change that, individually or in
the aggregate, is not reasonably likely to have a Material Adverse
Effect on it or prevent, materially delay or materially impair its
ability to (x) consummate the transactions contemplated by this
Agreement or (y) operate its business following the Effective
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Time. The PageNet Disclosure Letter, with respect to PageNet, and
the Arch Disclosure Letter, with respect to Arch, sets forth a
correct and complete list of Contracts to which it or any of its
Significant Investees is a party, pursuant to which consents or
waivers are or may be required prior to consummation of the
transactions contemplated by this Agreement, other than as may be
required in connection with the Bankruptcy Case or the Prepackaged
Plan, or those where the failure to obtain such consents or
waivers is not, individually or in the aggregate, reasonably
likely to have a Material Adverse Effect on it or prevent or
materially impair its (x) ability to consummate the transactions
contemplated by this Agreement or (y) operate its business
following the Effective Time.
(e) Reports; Financial Statements. It has made available
to the other party each registration statement, report, proxy
statement or information statement prepared by it since December
31, 1996, including without limitation its Annual Report on Form
10-K for the years ended December 31, 1996, December 31, 1997 and
December 31, 1998 in the form (including exhibits, annexes and any
amendments thereto) filed with the Securities and Exchange
Commission (the "SEC") (collectively, including any such reports
filed subsequent to the date of this Agreement, its "Reports"). As
of their respective dates, its Reports complied, as to form, with
all applicable requirements under the Securities Act, the Exchange
Act, and the rules and regulations thereunder, and (together with
any amendments thereto filed prior to the date hereof) did not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make
the statements made therein, in light of the circumstances in
which they were made, not misleading. Each of the consolidated
balance sheets included in, or incorporated by reference into, its
Reports (including the related notes and schedules) fairly
presents the consolidated financial position of it and its
Subsidiaries as of its date and each of the consolidated
statements of income, stockholders' equity, and of cash flows
included in, or incorporated by reference into, its Reports
(including any related notes and schedules) fairly presents the
consolidated results of operations, retained earnings and cash
flows, as the case may be, of it and its Subsidiaries for the
periods set forth therein (subject, in the case of unaudited
statements, to notes and normal year-end audit adjustments that
will not be material in amount or effect), in each case in
accordance with generally accepted accounting principles ("GAAP")
consistently applied during the periods involved, except as may be
noted therein. It has made available to the other party all
correspondence since December 31, 1996 between it or its
representatives, on the one hand, and the SEC, on the other hand.
To its knowledge, as of the date of this Agreement, there are no
pending or threatened SEC inquiries or investigations relating to
it or any of its Reports. To its knowledge and except as disclosed
in its Reports or in filings by its holders with the SEC, as of
the date of this Agreement, no Person or "group" "beneficially
owns" 5% or more of its outstanding voting securities, with the
terms "beneficially owns" and "group" having the meanings ascribed
to them under Rule 13d-3 and Rule 13d-5 under the Exchange Act.
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(f) Absence of Certain Changes. Except as disclosed in
its Reports filed prior to the date of this Agreement or as
expressly contemplated by this Agreement, since December 31, 1998
(the "Audit Date"), it and its Subsidiaries have conducted their
respective businesses only in, and have not engaged in any
material transaction other than according to, the ordinary and
usual course of such businesses and there has not been: (i) any
change in the business, assets (including licenses, franchises and
other intangible assets), financial condition and results of
operations of it and its Subsidiaries, except those changes that
are not, individually or in the aggregate, reasonably likely to
have a Material Adverse Effect on it; (ii) any damage, destruction
or other casualty loss with respect to any asset or property
owned, leased or otherwise used by it or any of its Subsidiaries,
whether or not covered by insurance, which damage, destruction or
loss is reasonably likely, individually or in the aggregate, to
have a Material Adverse Effect on it; (iii) any declaration,
setting aside or payment of any dividend or other distribution
with respect to its capital stock; or (iv) any change by it in
accounting principles, practices or methods, except as required by
GAAP. Since the Audit Date, except as provided for in this
Agreement, in its respective Disclosure Letter, or as disclosed in
its Reports filed prior to the date of this Agreement, there has
not been any increase in the salary, wage, bonus, grants, awards,
benefits or other compensation payable or that could become
payable by it or any of its respective Subsidiaries, to directors,
officers or key employees as identified in the corresponding
section of each party's Disclosure Letter or any amendment of any
of its Compensation and Benefit Plans (as defined in Section
5.1(h)(i)), other than increases or amendments in the ordinary and
usual course of its business (which may include normal periodic
performance reviews and related compensation and benefit increases
and the provision of new individual compensation and benefits for
promoted or newly hired officers and employees on terms consistent
with past practice).
(g) Litigation and Liabilities. Except as disclosed in
its Reports filed prior to the date of this Agreement, there are
no: (x) (i) civil, criminal or administrative actions, suits,
claims, hearings, investigations or proceedings pending or, to the
actual knowledge of its executive officers identified in the
corresponding section of each party's Disclosure Letter
("Knowledgeable Executives"), threatened against it or any of its
Affiliates (as defined in Rule 12b-2 under the Exchange Act); or
(ii) obligations or liabilities, whether or not accrued,
contingent or otherwise, and whether or not required to be
disclosed, including those relating to matters involving any
Environmental Law, or (y) any other facts or circumstances, in any
such case, of which the Knowledgeable Executives have actual
knowledge and that are reasonably likely to result in any claims
against or obligations or liabilities of it or any of its
Affiliates, except, in the case of (x) or (y), those that are not,
individually or in the aggregate, reasonably likely to have a
Material Adverse Effect on it or prevent, materially delay or
materially impair its ability to consummate the transactions
contemplated by this Agreement.
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(h) Employee Benefits.
(i) Neither it nor any of its respective ERISA
Affiliates (as defined below) maintains, is a party to,
participates in, or has any liability or contingent liability with
respect to, any employee benefit plan (within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or any bonus, deferred compensation,
pension, retirement, profit-sharing, thrift, savings, employee
stock ownership, stock bonus, change-of-control, stock purchase,
restricted stock, stock option, employment, consulting,
termination, severance, compensation, medical, health or fringe
benefit plan, or other plan, program, agreement, policy or
arrangement for any of its agents, consultants, employees,
directors, former employees or former directors and/or any of its
respective ERISA Affiliates which does not constitute an employee
benefit plan under ERISA (which employee benefit plans and other
plans, programs, agreements, policies and arrangements are
collectively referred to as the "Compensation and Benefit Plans").
A true and correct copy of each Compensation and Benefit Plan
which have been reduced to writing and, to the extent applicable,
copies of the most recent annual report, actuarial report,
accountant's opinion of the plan's financial statements, summary
plan description and Internal Revenue Service determination letter
with respect to any Compensation and Benefit Plans and any trust
agreements or insurance contracts forming a part of such
Compensation and Benefit Plans has been made available by PageNet
and Arch to the other party prior to the date of this Agreement.
In the case of any Compensation and Benefit Plan which is not in
written form, PageNet and Arch has supplied to the other party an
accurate description of such Compensation and Benefit Plan as in
effect on the date of this Agreement. For purposes of this
Agreement, the term "ERISA Affiliate" means any corporation or
trade or business which, together with PageNet or Arch, as
applicable, is a member of a controlled group of Persons or a
group of trades or businesses under common control with PageNet or
Arch, as applicable, within the meaning of Sections 414(b), (c),
(m) or (o) of the Code.
(ii) All Compensation and Benefit Plans, other
than a multiemployer plan (as defined in Section 3(37) of ERISA),
are in substantial compliance with all requirements of applicable
law, including the Code and ERISA and no event has occurred which
will or could cause any such Compensation and Benefit Plan to fail
to comply with such requirements and no notice has been issued by
any governmental authority questioning or challenging such
compliance. There have been no acts or omissions by it or any of
its respective ERISA Affiliates, which have given rise to or may
give rise to material fines, penalties, taxes or related charges
under Section 502 of ERISA or Chapters 43, 47, 68 or 100 of the
Code for which PageNet, Arch, as applicable, or any of its
respective ERISA Affiliates may be liable. Each of the
Compensation and Benefit Plans that is an "employee pension
benefit plan" within the meaning of Section 3(2) of ERISA, other
than a multiemployer plan (each a "Pension Plan"), and that is
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intended to be qualified under Section 401(a) of the Code has
received a favorable determination letter from the Internal
Revenue Service (the "IRS") which covers all changes in law for
which the remedial amendment period (within the meaning of Section
401(b) of the Code and applicable regulations) has expired and
neither it, nor any of its respective ERISA Affiliates is aware of
any circumstances reasonably likely to result in revocation of any
such favorable determination letter. There is no pending or, to
the actual knowledge of PageNet's or Arch', as applicable,
Knowledgeable Executives, threatened material litigation relating
to its Compensation and Benefit Plans. Neither it, nor any of its
respective ERISA Affiliates, has engaged in a transaction with
respect to any of the Compensation and Benefit Plans that,
assuming the taxable period of such transaction expired as of the
date of this Agreement, would subject it or any of the ERISA
Affiliates to a material tax or penalty imposed by either Section
4975 of the Code or Section 502 of ERISA.
(iii) As of the date of this Agreement, no
liability under Title IV of ERISA (other than the payment of
prospective premium amounts to the Pension Benefit Guaranty
Corporation in the normal course) has been or is expected to be
incurred by it or any of its respective ERISA Affiliates with
respect to any Compensation and Benefit Plan. No notice of a
"reportable event," within the meaning of Section 4043 of ERISA
for which the 30-day reporting requirement has not been waived,
has been required to be filed for any Pension Plans within the 12-
month period ending on the date of this Agreement or will be
required to be filed in connection with the transactions
contemplated by this Agreement.
(iv) All contributions required to be made under
the terms of any of the Compensation and Benefit Plans as of the
date of this Agreement have been timely made or have been
reflected on the most recent consolidated balance sheet filed or
incorporated by reference in its Reports prior to the date of this
Agreement. None of the Pension Plans has an "accumulated funding
deficiency" (whether or not waived) within the meaning of Section
412 of the Code or Section 302 of ERISA. Neither it, nor any of
its respective ERISA Affiliates has provided, or is required to
provide, security to any Pension Plans pursuant to Section
401(a)(29) of the Code or to the PBGC pursuant to Title IV or
ERISA.
(v) Under each of the Pension Plans as of the
last day of the most recent plan year ended prior to the date of
this Agreement, the actuarially determined present value of all
"benefit liabilities," within the meaning of Section 4001(a)(16)
of ERISA (as determined on the basis of the actuarial assumptions
contained in such Pension Plan's most recent actuarial valuation),
did not exceed the then current value of the assets of such
Pension Plan, and there has been no material change in the
financial condition of such Pension Plan since the last day of the
most recent plan year.
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(vi) Neither it, nor any of its respective ERISA
Affiliates, have any obligations for post-termination health and
life benefits under any of the Compensation and Benefit Plans,
except as set forth in its Reports filed prior to the date of this
Agreement or as required by applicable law.
(vii) The consummation of the Merger (or the
approval thereof by its respective stockholders) and the other
transactions contemplated by this Agreement, will not (except as
may result from, or be contemplated by, the Bankruptcy Case or the
Prepackaged Plan): (x) entitle any of its employees or directors
or any employees of any of its ERISA Affiliates, as applicable, to
severance pay, directly or indirectly, upon termination of
employment or otherwise; (y) accelerate the time of payment or
vesting or trigger any payment of compensation or benefits under,
or increase the amount payable or trigger any other material
obligation pursuant to, any of the Compensation and Benefit Plans;
or (z) result in any breach or violation of, or a default under,
any of the Compensation and Benefit Plans.
(viii) None of the Compensation and Benefit
Plans is a multiemployer plan and neither it, nor any of its
respective ERISA Affiliates, have contributed or been obligated to
contribute to a multiemployer plan at any time.
(i) Compliance with Laws. Except as set forth in its
Reports filed prior to the date of this Agreement, the businesses
of each of it and its Subsidiaries have not been, and are not
being, conducted in violation of any law, statute, ordinance,
regulation, judgment, order, decree, injunction, arbitration
award, license, authorization, opinion, agency requirement or
permit of any Governmental Entity or common law (collectively,
"Laws"), except for violations or possible violations that are
not, individually or in the aggregate, reasonably likely to have a
Material Adverse Effect on it or prevent, materially delay or
materially impair its ability to consummate the transactions
contemplated by this Agreement. Except as set forth in its Reports
filed prior to the date of this Agreement, no investigation or
review by any Governmental Entity with respect to it or any of its
Subsidiaries is pending or, to the actual knowledge of the
Knowledgeable Executives, threatened, nor has any Governmental
Entity indicated an intention to conduct the same, except for
those the outcome of which are not, individually or in the
aggregate, reasonably likely to have a Material Adverse Effect on
it or prevent, materially delay or materially impair its ability
to consummate the transactions contemplated by this Agreement. To
the actual knowledge of the Knowledgeable Executives, no material
change is required in its or any of its Subsidiaries' processes,
properties or procedures in connection with any such Laws, and it
has not received any notice or communication of any material
noncompliance with any such Laws that has not been cured as of the
date of this Agreement, except for such changes and noncompliance
that are not, individually or in the aggregate, reasonably likely
to have a Material Adverse Effect on it or prevent, materially
delay or materially impair its ability to consummate the
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transactions contemplated by this Agreement. Each of it and its
Subsidiaries has all permits, licenses, franchises, variances,
exemptions, orders, operating rights, and other governmental
authorizations, consents and approvals (collectively, "Permits"),
necessary to conduct their business as presently conducted, except
for those the absence of which are not, individually or in the
aggregate, reasonably likely to have a Material Adverse Effect on
it or prevent, materially delay or materially impair its ability
to consummate the transactions contemplated by this Agreement.
(j) Takeover Statutes; Charter and Bylaw Provisions.
(i) The PageNet Board of Directors has taken all
appropriate and necessary actions to exempt the Merger, this
Agreement and the other transactions contemplated hereby from the
restrictions of Section 203 of the DGCL. No other "control share
acquisition," "fair price," "moratorium" or other anti-takeover
laws or regulations enacted under U.S. stated or federal laws
(each a "Takeover Statute") apply to the Merger, this Agreement,
or any of the other transactions contemplated hereby. PageNet and
the PageNet Board of Directors have taken all appropriate and
necessary actions to (A) render the PageNet Rights Agreement
inapplicable to the Merger and the other transactions contemplated
by this Agreement, (B) provide that (I) neither Arch nor Merger
Sub shall be deemed an Acquiring Person (as defined in the PageNet
Rights Agreement) as a result of this Agreement or the
transactions contemplated hereby and thereby, (II) no Distribution
Date (as defined in the PageNet Rights Agreement) shall be deemed
to have occurred as a result of this Agreement or the transactions
contemplated hereby and (III) the rights issuable pursuant to the
PageNet Rights Agreement will not separate from the shares of
PageNet Common Stock, as a result of the approval, execution or
delivery of this Agreement or the consummation of the transactions
contemplated hereby, and (C) render any anti-takeover or other
provision contained in the certificate of incorporation or by-laws
of PageNet inapplicable to the Merger, this Agreement and the
other transactions contemplated hereby.
(ii) The Arch Board of Directors has taken all
appropriate and necessary actions to exempt the Merger, this
Agreement and the transactions contemplated hereby from the
restrictions of Section 203 of the DGCL. No other Takeover Statute
applies to this Agreement or any of the transactions contemplated
hereby. Arch and the Arch Board of Directors have taken all
appropriate and necessary actions to (A) amend the Arch Rights
Agreement as set forth in Exhibit B to this Agreement, (B) provide
that (I) PageNet shall not be deemed an Acquiring Person (as
defined in the Arch Rights Agreement) as a result of this
Agreement or the transactions contemplated thereby, (II) no
Distribution Date (as defined in the Arch Rights Agreement) shall
be deemed to have occurred as a result of this Agreement or the
transactions contemplated thereby unless the ownership threshold
set forth in Exhibit B shall be exceeded, and (III) the rights
issuable pursuant to the Arch Rights Agreement will not separate
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from the shares of Arch Common Stock, as a result of the approval,
execution or delivery of this Agreement or the consummation of the
transactions contemplated hereby unless the ownership threshold
set forth in Exhibit B shall be exceeded, and (C) render any
anti-takeover or other provision contained in the certificate of
incorporation or by-laws of Arch inapplicable to the Merger, this
Agreement and the other transactions contemplated hereby.
(k) Tax Matters. As of the date of this Agreement,
neither it nor any of its Subsidiaries has taken or agreed to take
any action, nor do the Knowledgeable Executives have any actual
knowledge of any fact or circumstance (excluding possible
uncertainties regarding valuation of securities to be issued in
the Merger and Exchange Offers), that would prevent the Merger and
the other transactions contemplated by this Agreement from
qualifying as a "reorganization" within the meaning of Section
368(a) of the Code.
(l) Taxes. It and each of its Subsidiaries have prepared
in good faith and duly and timely filed (taking into account any
extension of time within which to file) all material Tax Returns
required to be filed by any of them at or before the Effective
Time and all such filed Tax Returns are complete and accurate in
all material respects. It and each of its Subsidiaries as of the
Effective Time: (x) will have paid all Taxes and estimated Taxes
(including all amounts shown to be due on all filed Tax Returns)
that they are required to pay prior to the Effective Time; and (y)
will have withheld or collected all federal, state and local
income taxes, FICA, FUTA and other Taxes, including, without
limitation, similar foreign Taxes, required to be withheld from
amounts owing to any employee, creditor, or third party, and to
the extent required, will have paid such amounts to the proper
governmental authority. As of the date of this Agreement, (i)
there are not pending or threatened in writing, any audits,
examinations, investigations or other proceedings with respect to
Taxes or Tax matters, and (ii) there are not, to the actual
knowledge of its Knowledgeable Executives, any unresolved
questions, claims or outstanding proposed or assessed deficiencies
concerning its or any of its Subsidiaries' Tax liability which, if
determined adversely would have a Material Adverse Effect on it.
Neither it nor any of its Subsidiaries has any liability with
respect to income, franchise or similar Taxes in excess of the
amounts accrued with respect to such Taxes that are reflected in
the financial statements included in its Reports. Neither it nor
any of its Subsidiaries has executed any waiver of any statute of
limitations on, or extended the period for the assessment or
collection of, any Tax. There are no tax liens (other than liens
for current Taxes not yet due and payable) upon its assets or the
assets of any Subsidiary. There is no "Section 382 limitation," as
defined in Section 382(b) of the Code, currently applicable to its
or its Subsidiaries' net operating loss, investment credit, or
other tax attribute carryforwards. Neither it nor any of its
Subsidiaries: (A) is a party to any tax sharing agreement; or (B)
is liable for the Tax obligations of any person other than it or
one of its Subsidiaries.
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The term "Tax" (including, with correlative meaning, the terms
"Taxes," and "Taxable") includes all federal, state, local and foreign
income, profits, franchise, gross receipts, environmental, customs duty,
capital stock, severance, stamp, payroll, sales, employment, unemployment,
disability, use, property, withholding, excise, production, value added,
occupancy and other taxes, duties, charges, fees, or assessments of any
nature whatsoever, together with all interest, penalties and additions
imposed with respect to such amounts and any interest with respect to such
penalties and additions. The term "Tax Return" includes all federal, state,
local and foreign returns and reports (including elections, declarations,
disclosures, schedules, estimates and information returns) required to be
supplied to a Tax authority relating to Taxes.
(m) Labor Matters. Neither it nor any of its Subsidiaries
is the subject of any material proceeding asserting that it or any
of its Subsidiaries has committed an unfair labor practice or is
seeking to compel it to bargain with any labor union or labor
organization, nor is there pending or, to the actual knowledge of
its Knowledgeable Executives, threatened, nor has there been for
the past five years, any labor strike, dispute, walkout, work
stoppage, slow-down or lockout involving it or any of its
Subsidiaries, except in each case as is not, individually or in
the aggregate, reasonably likely to have a Material Adverse Effect
on it. None of the employees of PageNet or Arch or any of their
respective Subsidiaries is subject to a collective bargaining
agreement, no collective bargaining agreement is currently being
negotiated, and no attempt is currently being made or during the
past three (3) years has been made to organize any of its
employees to form or enter into any labor union or similar
organization.
(n) Environmental Matters. Except as disclosed in its
Reports filed prior to the date of this Agreement and except for
such matters that, individually or in the aggregate, are not
reasonably likely to have a Material Adverse Effect on it: (i)
each of it and its Subsidiaries has complied with all applicable
Environmental Laws; (ii) the properties currently owned or
operated by it or any of its Subsidiaries (including soils,
groundwater, surface water, buildings, or other structures) do not
contain any Hazardous Substances; (iii) the properties formerly
owned or operated by it or any of its Subsidiaries did not contain
any Hazardous Substances during the period of ownership or
operation by it or any of its Subsidiaries; (iv) neither it nor
any of its Subsidiaries is subject to liability for any Hazardous
Substance disposal or contamination on any third party property;
(v) neither it nor any Subsidiary has been associated with any
release or threat of release of any Hazardous Substance; (vi)
neither it nor any Subsidiary has received any notice, demand,
letter, claim, or request for information alleging that it or any
of its Subsidiaries may be in violation of or liable under any
Environmental Law; (vii) neither it nor any of its Subsidiaries is
subject to any orders, decrees, injunctions, or other arrangements
with any Governmental Entity or is subject to any indemnity or
other agreement with any third party relating to liability under
any Environmental Law or relating to Hazardous Substances; and
(viii) there are no circumstances or conditions involving it or
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any of its Subsidiaries that could reasonably be expected to result
in any claims, liability, investigations, costs, or restrictions
on the ownership, use, or transfer of any of its properties
pursuant to any Environmental Law.
The term "Environmental Law" means any Law relating to: (A) the
protection, investigation or restoration of the environment, health,
safety, or natural resources; (B) the handling, use, presence, disposal,
release, or threatened release of any Hazardous Substance; or (C) noise,
odor, wetlands, pollution, contamination, or any injury or threat of injury
to persons or property or notifications to government agencies or the
public in connection with any Hazardous Substance.
The term "Hazardous Substance" means any substance that is listed,
classified, or regulated pursuant to any Environmental Law, including any
petroleum product or by- product, asbestos-containing material,
lead-containing paint or plumbing, polychlorinated biphenyls,
electromagnetic fields, microwave transmission, radioactive materials, or
radon.
(o) Brokers and Finders. Neither it nor any of its
officers, directors or employees has employed any broker or finder
or incurred any liability for any brokerage fees, commissions or
finders' fees in connection with the Merger or the other
transactions contemplated in this Agreement or, the Series C
Consent Agreement, as applicable, except that: (i) PageNet has
employed Houlihan Lokey Howard & Zukin Capital, Goldman, Sachs &
Co. and Morgan Stanley Dean Witter as its financial advisors, the
arrangements with which have been disclosed to Arch prior to the
date of this Agreement; and (ii) Arch has employed Bear, Stearns &
Co. Inc. as its financial advisor, the arrangements with which
have been disclosed to PageNet prior to the date of this
Agreement.
(p) Computer Systems. Except as set forth in its Reports:
(i) its computer system performs and shall perform properly all
date-sensitive functions with respect to dates prior to and after
December 31, 1999; and (ii) it has developed feasible contingency
plans to ensure uninterrupted and unimpaired business operation in
the event of a failure of its own or a third party's computer
system or equipment on or about January 1, 2000 (including, those
of vendors, customers, and suppliers, and a general failure of, or
interruption in, its communications and delivery infrastructure).
(q) FCC Licenses. Each of Arch and PageNet, and each of
its respective Subsidiaries, is the authorized and legal holder
of, or otherwise has all rights to, all Permits issued under or
pursuant to the Communications Act, the FCC Regulations, and State
Laws which are necessary for the operation of their respective
businesses as presently operated, except as would not,
individually or in aggregate, have a Materially Adverse Effect on
it. All such Permits and licenses are validly issued and in full
force and effect, except as would not, individually or in the
aggregate, have a Material Adverse Effect on it. Each of Arch and
PageNet, and each of its respective Subsidiaries, is in compliance
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in all respects with the terms and conditions of each such Permit
and with all applicable Governmental Regulations, except where the
failure to be in compliance would not have a Material Adverse
Effect on it. There is not pending, and to the actual knowledge of
the Knowledgeable Executives of Arch and PageNet, as applicable,
any threatened, action by or before the FCC or any governmental or
regulatory authority to revoke, suspend, cancel, rescind, or
modify in any material respect any of such party's Permits rights
under the Communications Act, the FCC Regulations or State Laws.
Each party has made all regulatory filings required, and paid all
fees and assessments imposed, by any Governmental Entity, and all
such filings and the calculation of such fees, are accurate in all
material respects, except where the failure to make such filing or
pay such fees or assessments would not have a Material Adverse
Effect on such party.
ARTICLE VI.
Covenants
6.1. Interim Operations.
(a) PageNet covenants and agrees as to itself and its
Subsidiaries that, from and after the date of this Agreement and
prior to the Effective Time (unless Arch shall otherwise approve
in writing, and except as otherwise expressly contemplated by this
Agreement, disclosed in the PageNet Disclosure Letter, or required
by applicable Law):
(i) Its business and the business of its
Subsidiaries shall be conducted only in the ordinary and usual
course and, to the extent consistent therewith, it and its
Subsidiaries shall use their reasonable best efforts to preserve
their respective business organizations intact and maintain their
respective existing relations and goodwill with customers,
suppliers, regulators, distributors, creditors, lessors, employees
and business associates;
(ii) It shall not: (A) amend its certificate of
incorporation or bylaws; (B) split, combine, subdivide or
reclassify its outstanding shares of capital stock; (C) declare,
set aside or pay any dividend payable in cash, stock or property
with respect to any capital stock; or (D) repurchase, redeem or
otherwise acquire, except in connection with existing commitments
under PageNet Stock Plans but subject to PageNet's obligations
under subparagraph (iii) below, or permit any of its Subsidiaries
to purchase or otherwise acquire, any shares of its capital stock
or any securities convertible into, or exchangeable or exercisable
for, any shares of its capital stock;
(iii) Neither it nor any of its Subsidiaries
shall take any action that would prevent the Merger from
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qualifying as a "reorganization" within the meaning of Section
368(a) of the Code or that would cause any of its representations
and warranties in this Agreement to become untrue in any material
respect;
(iv) Neither it nor any of its ERISA Affiliates
shall: (A) accelerate, amend or change the period of exercisability
of or terminate, establish, adopt, enter into, make any new grants
or awards of stock-based compensation or other benefits under any
Compensation and Benefit Plans; (B) amend or otherwise modify any
Compensation and Benefit Plan; or (C) increase the salary, wage,
bonus or other compensation of any directors, officers or key
employees, except: (x) for grants or awards to directors, officers
and employees of it or its Subsidiaries under existing Compensation
and Benefit Plans in such amounts and on such terms as are consistent
with past practice; (y) in the ordinary and usual course of its
business (which may include normal periodic performance reviews and
related compensation and benefit increases and the provision of
individual PageNet Compensation and Benefit Plans consistent with
past practice for promoted or newly hired officers and employees on
terms consistent with past practice);or (z) for actions necessary
to satisfy existing contractual obligations under Compensation and
Benefit Plans existing as of the date of this Agreement;
(v) Neither it nor any of its Subsidiaries shall
incur, repay or retire prior to maturity or refinance any
indebtedness for borrowed money or guarantee any such indebtedness
or issue, sell, repurchase or redeem prior to maturity any debt
securities or warrants or rights to acquire any debt securities or
guarantee any debt securities of others, except (A) in the
ordinary and usual course of its business, (B) for any refinancing
of such indebtedness or debt securities on terms no less favorable
in the aggregate to PageNet and which would not prevent,
materially delay or materially impair PageNet's ability to
consummate the transactions contemplated by this Agreement, and
(C) for any retirement in exchange for PageNet Shares consistent
with past practice;
(vi) Neither it nor any of its Subsidiaries
shall make any capital expenditures in an aggregate amount in
excess of the aggregate amount reflected in PageNet's capital
expenditure budget for the fiscal years ending December 31, 1999
and 2000, a copy of which has been provided to Arch;
(vii) Neither it nor any of its Subsidiaries
shall issue, deliver, sell, pledge or encumber shares of any class
of its capital stock or any securities convertible or exchangeable
into, or any rights, warrants or options to acquire, or any bonds,
debentures, notes, or other debt obligations having the right to
vote or that are convertible or exercisable for, any such shares,
except PageNet may issue PageNet Shares in exchange for
indebtedness or debt securities pursuant to clause (v) above;
(viii) Neither it nor any of its Subsidiaries
shall authorize, propose or announce an intention to authorize or
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propose, or enter into an agreement with respect to, any merger,
consolidation or business combination (other than the Merger), or
any purchase, sale, lease, license or other acquisition or
disposition of any business or of a material amount of assets or
securities, except for transactions entered into in the ordinary
and usual course of its business, except for any acquisition of
assets or any investment having a cash purchase price of
$25,000,000 or less in any single instance and $50,000,000 or less
in the aggregate where such acquisition or investment would not
prevent, materially delay or materially impair PageNet's ability
to consummate the transactions contemplated by this Agreement;
(ix) PageNet shall not make any material change
in its accounting policies or procedures, other than any such
change that is required by GAAP;
(x) PageNet shall not release, assign, settle or
compromise any material claims or litigation in excess of $300,000
or make any material tax election or settle or compromise any
material federal, state, local or foreign tax liability; and
(xi) Neither it nor any of its Subsidiaries
shall authorize or enter into any agreement to do any of the
foregoing.
(b) Arch covenants and agrees as to itself and its
Subsidiaries that, from and after the date of this Agreement and
prior to the Effective Time (unless PageNet shall otherwise
approve in writing and except as otherwise expressly contemplated
by this Agreement, disclosed in the Arch Disclosure Letter, or
required by applicable Law):
(i) Its business and the business of its
Subsidiaries shall be conducted only in the ordinary and usual
course and, to the extent consistent therewith, it and its
Subsidiaries shall use their reasonable best efforts to preserve
their respective business organizations intact and maintain their
respective existing relations and goodwill with customers,
suppliers, regulators, distributors, creditors, lessors, employees
and business associates;
(ii) It shall not: (A) amend its certificate of
incorporation or bylaws; (B) split, combine, subdivide or
reclassify its outstanding shares of capital stock; (C) declare,
set aside or pay any dividend payable in cash, stock or property
with respect to any capital stock, except for a dividend that
would be received by holders of PageNet Shares on an equivalent
post-Merger basis per share of Arch Common Stock after the
Effective Time; or (D) repurchase, redeem or otherwise acquire,
except in connection with existing commitments under Arch Stock
Plans but subject to Arch' obligations under subparagraph (iii)
below, or permit any of its Subsidiaries to purchase or otherwise
acquire, any shares of its capital stock or any securities
convertible into, or exchangeable or exercisable for, any shares
of its capital stock;
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(iii) Neither it nor any of its Subsidiaries
shall take any action that would prevent the Merger from
qualifying as a "reorganization" within the meaning of Section
368(a) of the Code or that would cause any of its representations
and warranties in this Agreement to become untrue in any material
respect;
(iv) Neither it nor any of its ERISA Affiliates
shall: (A) accelerate, amend or change the period of
exercisability of or terminate, establish, adopt, enter into, make
any new grants or awards of stock-based compensation or other
benefits under any Compensation and Benefit Plans; (B) amend or
otherwise modify any Compensation and Benefit Plan; or (C)
increase the salary, wage, bonus or other compensation of any
directors, officers or key employees, except: (x) for grants or
awards to directors, officers and employees of it or its
Subsidiaries under existing Compensation and Benefit Plans in such
amounts and on such terms as are consistent with past practice;
(y) in the ordinary and usual course of its business (which may
include normal periodic performance reviews and related
compensation and benefit increases and the provision of individual
Arch Compensation and Benefit Plans consistent with past practice
for promoted or newly hired officers and employees on terms
consistent with past practice); or (z) for actions necessary to
satisfy existing contractual obligations under its Compensation
and Benefit Plans existing as of the date of this Agreement;
(v) Neither it nor any of its Subsidiaries shall
incur, repay or retire prior to maturity or refinance any
indebtedness for borrowed money or guarantee any such indebtedness
or issue, sell, repurchase or redeem prior to maturity any debt
securities or warrants or rights to acquire any debt securities or
guarantee any debt securities of others, except in (A) the
ordinary and usual course of its business, (B) for any refinancing
of such indebtedness or debt securities on terms no less favorable
in the aggregate to Arch and which would not prevent, materially
delay or materially impair Arch' or Merger Sub's ability to
consummate the transactions contemplated by this Agreement, and
(C) for any retirement in exchange for shares of Arch Common Stock
consistent with past practice;
(vi) Neither it nor any of its Subsidiaries
shall make any capital expenditures in an aggregate amount in
excess of the aggregate amount reflected in Arch' capital
expenditure budget for the fiscal years ending December 31, 1999
and 2000, a copy of which has been provided to PageNet;
(vii) Neither it nor any of its Subsidiaries
shall issue, deliver, sell, pledge or encumber shares of any class
of its capital stock or any securities convertible or exchangeable
into, or any rights, warrants or options to acquire, or any bonds,
debentures, notes, or other debt obligations having the right to
vote or that are convertible or exercisable for, any such shares,
except Arch may issue shares of Arch Common Stock issued in
exchange for indebtedness or debt securities pursuant to clause
(v) above;
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(viii) Neither it nor any of its Subsidiaries
shall authorize, propose or announce an intention to authorize or
propose, or enter into an agreement with respect to, any merger,
consolidation or business combination (other than the Merger), or
any purchase, sale, lease, license or other acquisition or
disposition of any business or of a material amount of assets or
securities, except for transactions entered into in the ordinary
and usual course of its business, except for any acquisition of
assets or any investment having a cash purchase price of
$25,000,000 or less in any single instance and $50,000,000 or less
in the aggregate where such acquisition or investment would not
prevent, materially delay or materially impair Arch' or Merger
Sub's ability to consummate the transactions contemplated by this
Agreement;
(ix) Arch shall not make any material change in
its accounting policies or procedures, other than any such change
that is required by GAAP;
(x) Arch shall not release, assign, settle or
compromise any material claims or litigation in excess of $300,000
or make any material tax election or settle or compromise any
material federal, state, local or foreign tax liability; and
(xi) Neither it nor any of its Subsidiaries
shall authorize or enter into any agreement to do any of the
foregoing.
(c) Arch and PageNet agree that any written approval
obtained under this Section 6.1 must be signed, if on behalf of
Arch, by the Chief Executive Officer or the Chief Financial
Officer of Arch, or if on behalf of PageNet, by the Chairman of
the Board and Chief Executive Officer or President and Chief
Operating Officer of PageNet.
(d) Notwithstanding any other provision hereof to the
contrary, PageNet may, after the date hereof (i) issue, deliver,
sell, pledge or encumber in arms-length transactions with
unaffiliated third parties shares of any class of capital stock of
the Distributed Subsidiary or any securities convertible or
exchangeable into, or any rights, warrants or options to acquire,
or any bonds, debentures, notes, or other debt obligations having
the right to vote or that are convertible or exercisable for, any
such shares of the Distributed Subsidiary, (ii) cause the
Distributed Subsidiary to incur any indebtedness for borrowed
money, if all proceeds thereof are used solely by the Distributed
Subsidiary, (iii) transfer the assets set forth in the
corresponding section of the PageNet Disclosure Letter to the
Distributed Subsidiary, (iv) determine the form of security or
securities representing the equity ownership of the Distributed
Subsidiary to be distributed to the holders of PageNet Shares or
PageNet Notes pursuant to Sections 6.18 and 6.22 of this Agreement
and designate the rights and restrictions applicable to such
securities, (v) establish an employee stock option, stock
ownership or other similar plan and set aside common equity (of
the same type as the Distributed Interests or any securities
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underlying such Distributed Interests) representing up to 15% of
the equity ownership of the Distributed Subsidiary for such
purpose, or (vi) enter into such transactions, arrangements or
agreements with the Distributed Subsidiary on terms and conditions
approved by Arch or cause the Distributed Subsidiary to enter
into arms-length transactions, arrangements or agreements with
third parties, in each case, as are reasonably necessary and
appropriate to permit the Distributed Subsidiary to continue its
business and operations in the ordinary course following the
Merger; provided, that the taking of such action shall not cause
Arch or the Surviving Corporation (other than through its
ownership of capital stock in the Distributed Subsidiary after the
Effective Time) to incur any liability or obligation which would
not have been incurred by the Surviving Corporation pursuant to
the Merger or the other transactions contemplated hereby. It is
understood and agreed by the parties to this Agreement, that in
the event that, prior to or at the Effective Time, PageNet shall
take any action set forth in (i), (ii), (v) or (vi) above that
reduces the aggregate amount of Distributed Interests available to
be distributed to the parties, the distribution of the Distributed
Interests will be ratably adjusted such that holders of PageNet
Shares at the Spinoff Record Date and holders of PageNet Notes
immediately prior to the Effective Time receive 80.5% of the
remaining interests in the Distributed Subsidiary and the
Surviving Corporation receives 19.5% of the remaining interests in
the Distributed Subsidiary.
6.2. Acquisition Proposals.
(a) Except as set forth in Section 6.1(d) of this
Agreement, PageNet and Arch each agree that neither it nor any of
its Subsidiaries nor any of the officers and directors of it or
its Subsidiaries shall, and that each shall direct and use its
best efforts to cause its and its Subsidiaries' employees, agents
and representatives (including any investment banker, attorney or
accountant retained by it or any of its Subsidiaries) (PageNet or
Arch, as the case may be, its respective Subsidiaries and their
officers, directors, employees, agents and representatives being
referred to as its "Representatives") not to, directly or
indirectly, initiate, solicit, encourage or otherwise facilitate
any inquiries or the making of any proposal or offer with respect
to a merger, reorganization, acquisition, share exchange,
consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction involving it, or
any purchase or sale of the consolidated assets (including without
limitation stock of Subsidiaries) of it or any of its
Subsidiaries, taken as a whole, having an aggregate value equal to
10% or more of its assets, or any purchase or sale of, or tender
or exchange offer for, 15% or more of its equity securities (any
such proposal or offer being referred to as an "Acquisition
Proposal"). PageNet and Arch further agree that neither it nor any
of its Subsidiaries nor any of the officers and directors of it or
its Subsidiaries shall, and that it shall direct and use its best
efforts to cause its Representatives not to, directly or
indirectly, have any discussion with, or provide any confidential
information or data to, any Person relating to, or in
contemplation of, an Acquisition Proposal or engage in any
negotiations concerning an Acquisition Proposal, or otherwise
facilitate any effort or attempt to make or implement an
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Acquisition Proposal; provided, however, that nothing contained in
this Agreement shall prevent PageNet, Arch or their respective
Board of Directors from: (A) complying with Rule 14e-2 promulgated
under the Exchange Act with regard to an Acquisition Proposal; (B)
engaging in any discussions or negotiations with or providing any
information to, any Person in response to an unsolicited bona fide
written Acquisition Proposal by any such Person; or (C) subject to
the obligation of (x) PageNet pursuant to Section 6.5(a) to duly
convene a PageNet Stockholders Meeting at which a vote of the
stockholders of PageNet shall be taken regarding the adoption of
this Agreement and the approval of the Merger and the other
transactions contemplated by this Agreement, and (y) Arch pursuant
to Section 6.5(b) to duly convene a Arch Stockholders Meeting at
which a vote of the stockholders of Arch shall be taken with
respect to the matters set forth in Section 6.5(b) of this
Agreement, recommending such an unsolicited bona fide written
Acquisition Proposal to its stockholders if, and only to the
extent that, with respect to the actions referred to in clauses
(B) or (C): (i) its Board of Directors concludes in good faith
(after consultation with its outside legal counsel and its
financial advisor) that such Acquisition Proposal is reasonably
capable of being completed, taking into account all legal,
financial, regulatory and other aspects of the proposal and the
Person making the proposal, and would, if consummated, result in a
transaction more favorable to its stockholders from a financial
point of view than the transaction contemplated by this Agreement
(any such Acquisition Proposal being referred to herein as a
"Superior Proposal"); (ii) its Board of Directors determines in
good faith after consultation with outside legal counsel that such
action is necessary for the Board of Directors to comply with its
fiduciary duty to its stockholders under applicable Law; and (iii)
prior to providing any information or data to any Person in
connection with a Superior Proposal by any such Person, its Board
of Directors shall receive from such Person an executed
confidentiality agreement on terms substantially similar to those
contained in the Confidentiality Agreement (as defined in Section
6.15); provided, that such confidentiality agreement shall contain
terms that allow it to comply with its obligations under this
Section 6.2.
(b) PageNet and Arch each agree that it will immediately
cease and cause to be terminated any existing activities,
discussions or negotiations with any parties conducted heretofore
with respect to any Acquisition Proposal. PageNet and Arch each
agree that it will take the necessary steps to promptly inform
each of its Representatives of the obligations undertaken in
Section 6.2(a). PageNet and Arch each agree that it will notify
the other party immediately if any such inquiries, proposals or
offers are received by, any such information is requested from, or
any such discussions or negotiations are sought to be initiated or
continued with, any of its Representatives indicating, in
connection with such notice, the name of such Person making such
inquiry, proposal, offer or request and the substance of any such
inquiries, proposals or offers. Such party thereafter shall keep
the other informed, on a current basis, of the status and terms of
any such inquiries, proposals or offers and the status of any such
discussions or negotiations. PageNet and Arch each also agree
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that it will promptly request each Person that has heretofore
executed a confidentiality agreement in connection with its
consideration of any Acquisition Proposal to return all
confidential information heretofore furnished to such Person by,
or on behalf of, it or any of its Subsidiaries.
6.3. The Certificate Amendments. Arch shall take all actions
necessary (subject to applicable law and any necessary stockholder
approval) to adopt the Certificate Amendments. The Certificate Amendments
shall provide for (i) an increase in the authorized number of shares of
Arch Common Stock to an amount sufficient to effectuate the actions
contemplated hereby and (ii) the conversion of each Arch Series C
Preferred Share into shares of Arch Common Stock as described in this
Agreement. Some or all of the Certificate Amendments may, in the discretion
of Arch, be made contingent upon the consummation of the Merger or the
Alternative Merger (as the case may be).
6.4. Information Supplied. PageNet and Arch each agrees, as to
itself and its Subsidiaries, that none of the information supplied or to be
supplied by it or its Subsidiaries for inclusion or incorporation by
reference in: (i) the Registration Statement on Form S-4 to be filed with
the SEC by Arch in connection with the issuance of shares of Arch Common
Stock in the Merger (including the joint proxy statement and prospectus
(the "Prospectus/Proxy Statement") constituting a part thereof) (the "S-4
Registration Statement") will, at the time the S-4 Registration Statement
becomes effective under the Securities Act; and (ii) the Prospectus/Proxy
Statement and any amendment or supplement thereto will, at the date of
mailing to stockholders and at the time of each of the PageNet Stockholders
Meeting and the Arch Stockholders Meeting to be held in connection with the
Merger, in any such case, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. If at any time
prior to the Effective Time any information relating to Arch or PageNet, or
any of their respective affiliates (as defined in SEC Rule 12b-2), officers
or directors, is discovered by Arch or PageNet which should be set forth in
an amendment or supplement to any of the S-4 Registration Statement or the
Prospectus/Proxy Statement, so that any of such documents would not include
any misstatement of a material fact or would omit to state any material
fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, the party which discovers such information shall promptly
notify the other parties to this Agreement and an appropriate amendment or
supplement describing such information shall be promptly filed with the SEC
and, to the extent required by law, disseminated to the stockholders of
PageNet and Arch.
6.5. Stockholders Meetings.
(a) PageNet will take, in accordance with applicable Law
and its certificate of incorporation and bylaws, all action
necessary to convene a meeting of its stockholders (the "PageNet
Stockholders Meeting") as promptly as practicable after the S-4
Registration Statement is declared effective to consider and vote
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upon the adoption of this Agreement, and to approve the Merger, an
amendment to the PageNet certificate of incorporation to increase
the number of PageNet Shares authorized to an amount sufficient to
complete the transactions contemplated by this Agreement and the
other transactions contemplated by this Agreement. PageNet will
take all necessary action to obtain the adoption of this
Agreement, the approval of the Merger, the amendment to the
PageNet certificate of incorporation to increase the number of
PageNet Shares authorized to the amount sufficient to complete the
transactions contemplated by this Agreement and the other
transactions contemplated by this Agreement by the holders of the
PageNet Shares (the "PageNet Stockholders Approval"). The Board of
Directors of PageNet shall: (i) recommend that the stockholders
adopt this Agreement and thereby approve the Merger and the other
transactions contemplated by this Agreement (including without
limitation adoption of the Prepackaged Plan and authorization of
the Bankruptcy Case) and the amendment to the PageNet certificate
of incorporation to increase the number of PageNet Shares
authorized to the amount sufficient to complete the transactions
contemplated by this Agreement; and (ii) take all lawful action to
solicit such adoption and approval; provided, however, that
PageNet's Board of Directors may, at any time prior to the
Effective Time, withdraw, modify or change any such recommendation
to the extent that PageNet's Board of Directors determines in good
faith, after consultation with outside legal counsel, that such
withdrawal, modification or change of its recommendation is
required by its fiduciary duties to PageNet's stockholders under
applicable Law; provided, further, that, unless this Agreement is
terminated by Arch pursuant to Section 8.4, PageNet shall, as
promptly as practicable after the S-4 Registration Statement is
declared effective, duly convene and complete the PageNet
Stockholders Meeting regarding the adoption of this Agreement and
the approval of the Merger, the amendment to the PageNet
certificate of incorporation set forth above and the other
transactions contemplated by this Agreement, regardless of whether
PageNet's Board of Directors has withdrawn, modified, or changed
its recommendation to the stockholders regarding the adoption of
this Agreement or the approval of the Merger, the amendment to the
PageNet certificate of incorporation set forth above or the other
transactions contemplated by this Agreement prior to such PageNet
Stockholders Meeting. Notwithstanding the foregoing or any other
provision of this Agreement to the contrary, PageNet shall not be
required to convene a PageNet Stockholders Meeting after (x) the
Bankruptcy Case has commenced or (y) PageNet stipulates to
bankruptcy relief after the occurrence of an Involuntary
Insolvency Event pursuant to Section 6.19(a)(v) hereof.
(b) Arch will take, in accordance with applicable Law and
its certificate of incorporation and bylaws, all action necessary
to convene a meeting of its stockholders (the "Arch Stockholders
Meeting") as promptly as practicable after the S-4 Registration
Statement is declared effective to (i) consider and vote upon (A)
the Certificate Amendments and the issuance of shares of Arch
Common Stock pursuant to the Merger, the conversion of the Arch
Series C Preferred Shares and the Arch Exchange Offer or (B) if
the Alternative Merger is elected pursuant to Section 4.5
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and Arch is a party to the Alternative Merger, the adoption of
this Agreement and the approval of the Alternative Merger and the
other transactions contemplated by this Agreement (including the
actions contemplated by the Certificate Amendments, which may be
effectuated pursuant to a certificate of merger filed in
connection with such Alternative Merger); and (ii) to approve any
actions necessary pursuant to Section 3.1 hereof (the "Arch
Stockholders Approval"). Arch will take all necessary action to
obtain such consents and approvals. The Board of Directors of Arch
shall: (i) recommend that the stockholders adopt the Certificate
Amendments and approve the issuance of Arch Common Stock pursuant
to the Merger, the conversion of the Arch Series C Preferred
Shares and the Arch Exchange Offer (or this Agreement and the
Alternative Merger if Arch is a party to the Alternative Merger)
and the other transactions contemplated by this Agreement; and
(ii) take all lawful action to solicit such adoption; provided,
however, that Arch' Board of Directors may, at any time prior to
the Effective Time, withdraw, modify or change any such
recommendation to the extent that Arch' Board of Directors
determines in good faith, after consultation with outside legal
counsel, that such withdrawal, modification or change of its
recommendation is required by its fiduciary duties to Arch'
stockholders under applicable Law; provided, further, that, unless
this Agreement is terminated by PageNet pursuant to Section 8.3,
Arch shall, as promptly as practicable after the S-4 Registration
Statement is declared effective, duly convene and complete the
Arch Stockholders Meeting regarding the adoption of the
Certificate Amendments and the issuance of shares of Arch
Common Stock pursuant to the Merger, the conversion of the Arch
Series C Preferred Shares and the Arch Exchange Offer (or
this Agreement and the Alternative Merger if Arch is a party to
the Alternative Merger) and the other transactions contemplated by
this Agreement, regardless of whether Arch' Board of Directors has
withdrawn, modified, or changed its recommendation to the
stockholders regarding the adoption of the Certificate Amendments
and the issuance of shares of Arch Common Stock pursuant to
the Merger, the conversion of the Arch Series C Preferred Shares
and the Arch Exchange Offer (or this Agreement and the
Alternative Merger if Arch is a party to the Alternative Merger)
or the other transactions contemplated by this Agreement prior to
such Arch Stockholders Meeting.
6.6. Filings; Other Actions; Notification.
(a) Arch and PageNet shall promptly prepare and file with
the SEC the Prospectus/Proxy Statement, and Arch shall prepare and
file with the SEC the S-4 Registration Statement as promptly as
practicable. Arch and PageNet each shall use its reasonable best
efforts to have the S-4 Registration Statement declared effective
under the Securities Act as promptly as practicable and on the
same day as each of the Exchange Registration Statements, and
promptly thereafter mail the Prospectus/Proxy Statement to the
stockholders of Arch and PageNet. Arch shall also use its
reasonable best efforts to obtain prior to the effective date of
the S-4 Registration Statement all necessary state securities law
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or "blue sky" permits and approvals required in connection with the
Merger and the other transactions contemplated by this Agreement
and will pay all expenses incident thereto. Each party shall
notify the other of the receipt of the comments of the SEC and of
any requests by the SEC for amendments or supplements to the
Prospectus/Proxy Statement or the S-4 Registration Statement or
for additional information and shall promptly supply one another
with copies of all correspondence between any of them (or their
Representatives) and the SEC (or its staff) with respect thereto.
If, at any time prior to either of the Arch Stockholders Meeting
or the PageNet Stockholders Meeting, any event shall occur
relating to or affecting Arch, PageNet, or their respective
officers or directors, which event should be described in an
amendment or supplement to the Prospectus/Proxy Statement or the
S-4 Registration Statement, the parties shall promptly inform one
another and shall cooperate in promptly preparing filing and
clearing with the SEC and, if required by applicable securities
laws, mailing to Arch' or PageNet's stockholders, as the case may
be, such amendment or supplement.
(b) PageNet and Arch each shall use its respective
reasonable best efforts to cause to be delivered to the other
party and its directors a letter of its independent auditors,
dated: (i) the date on which the S-4 Registration Statement and
the Exchange Registration Statements shall become effective; and
(ii) the Closing Date, and addressed to the other party and its
directors, in form and substance customary for "comfort" letters
delivered by independent public accountants in connection with
registration statements similar to the S-4 Registration Statement
and the Exchange Registration Statements.
(c) PageNet and Arch shall cooperate with each other and
use (and shall cause their respective Subsidiaries to use) their
respective reasonable best efforts: (i) to take or cause to be
taken all actions, and do or cause to be done all things,
necessary, proper or advisable on its part under this Agreement
and applicable Laws to consummate and make effective the Merger,
the Exchange Offers and the other transactions contemplated by
this Agreement (including, if necessary, the Prepackaged Plan) as
soon as practicable, including: (A) obtaining opinions of their
respective attorneys referred to in Article VII below; (B)
preparing and filing as promptly as practicable all documentation
to effect all necessary applications, notices, petitions, filings
and other documents; and (C) instituting court actions or other
proceedings necessary to obtain the approvals required to
consummate the Merger, the Exchange Offers or the other
transactions contemplated by this Agreement or defending or
otherwise opposing all court actions or other proceedings
instituted by a Governmental Entity or other Person under the
Governmental Regulations for purposes of preventing the
consummation of the Merger, the Exchange Offers and the other
transactions contemplated by this Agreement; and (ii) to obtain as
promptly as practicable all consents, registrations, approvals,
permits and authorizations necessary or advisable to be obtained
from any third party and/or any Governmental Entity in order to
consummate the Merger, the Exchange Offers or any of the other
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transactions contemplated by this Agreement; provided, however,
that nothing in this Section 6.5 shall require either Arch or
PageNet to agree to any divestitures or hold separate or similar
arrangements if such divestitures or arrangements would reasonably
be expected to have a material adverse effect on Arch or PageNet,
or a material adverse effect on the expected benefits of the
Merger to it. Neither Arch nor PageNet will agree to any
divestitures or hold separate or similar arrangements without the
prior written approval of the other party. Subject to applicable
laws relating to the exchange of information, Arch and PageNet
shall have the right to review in advance, and to the extent
practicable each will consult the other party on, all the
information relating to Arch or PageNet, as the case may be, and
any of their respective Subsidiaries, that appear in any filing
made with, or written materials submitted to, any third party
and/or any Governmental Entity in connection with the Merger and
the other transactions contemplated by this Agreement. In
exercising the foregoing right, each of PageNet and Arch shall act
reasonably and as promptly as practicable.
(d) PageNet and Arch each shall, upon request by the
other party, furnish the other party with all information
concerning itself, its Subsidiaries, directors, officers and
stockholders and such other matters as may be reasonably necessary
or advisable in connection with the Prospectus/Proxy Statement,
the S-4 Registration Statement, the Exchange Registration
Statements or any other statement, filing, notice or application
made by, or on behalf of, Arch, PageNet or any of their respective
Subsidiaries to any third party and/or any Governmental Entity in
connection with the Merger, the Exchange Offers and the
transactions contemplated by this Agreement.
(e) PageNet and Arch each shall keep the other party
apprised of the status of matters relating to completion of the
transactions contemplated by this Agreement, including promptly
furnishing the other party with copies of notices or other
communications received by Arch or PageNet, as the case may be, or
any of its Subsidiaries, from any third party and/or any
Governmental Entity with respect to the Merger, the Exchange
Offers and the other transactions contemplated by this Agreement.
Each of PageNet and Arch shall give prompt notice to the other
party of any change that is reasonably likely to result in a
Material Adverse Effect on it or of any failure of any conditions
to the other party's obligations to effect the Merger set forth in
Article VII.
(f) Each of PageNet and Arch agrees that if a bona fide
Acquisition Proposal is made to acquire shares of the other party
to this Agreement, then upon the request of the party not
receiving the Acquisition Proposal, the party receiving the
Acquisition Proposal will cooperate with the other party to this
Agreement to make such filings and take such other actions as may
be permitted or required under the FCC's Policy Statement in
Tender Offers and Proxy Contests, in order to allow the
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parties to this Agreement to take all steps as are necessary to
consummate the transactions contemplated hereby pending FCC
approval of the transaction.
6.7. Access; Consultation. Upon reasonable notice, and except as
may be prohibited by applicable Law, PageNet and Arch each shall (and shall
cause its Subsidiaries to) afford the other and its respective
Representatives, reasonable access, during normal business hours throughout
the period prior to the Effective Time, to its properties, books, contracts
and records and, during such period, each shall (and shall cause its
Subsidiaries to) furnish promptly to the other party all information
concerning its business, properties and personnel as may reasonably be
requested; provided that no investigation pursuant to this section shall
affect or be deemed to modify any representation or warranty made by
PageNet or Arch under this Agreement; and provided, further, that the
foregoing shall not require PageNet or Arch to permit any inspection, or to
disclose any information, that in the reasonable judgment of PageNet or
Arch, as the case may be, would result in the disclosure of any trade
secrets of it or third parties, or violate any of its obligations with
respect to confidentiality if PageNet or Arch, as the case may be, shall
have used all reasonable efforts to obtain the consent of such third party
to such inspection or disclosure. All requests for information made
pursuant to this section shall be directed to an executive officer of
PageNet or Arch, as the case may be, or such Person as may be designated by
any such executive officer, as the case may be.
6.8. Affiliates. PageNet shall deliver to Arch a letter
identifying all Persons whom PageNet believes to be, at the date of its
Stockholders Meeting, affiliates of PageNet for purposes of Rule 145 under
the Securities Act ("Rule 145 Affiliates"). PageNet shall use all
reasonable efforts to cause each Person who is identified as a Rule 145
Affiliate in the letter referred to above to deliver to Arch on or prior to
the date of such party's respective Stockholders Meeting a written
agreement, in the form attached as Exhibit C (the "PageNet Affiliates
Agreement"). Prior to the Effective Time, PageNet shall use all reasonable
efforts to cause each additional Person who is identified as a Rule 145
Affiliate after the date of its Stockholders Meeting to execute the
applicable written agreement as set forth in this Section 6.8, as soon as
practicable after such Person is identified.
6.9. Stock Exchange Listing. To the extent they are not already
listed, Arch shall use its reasonable best efforts to cause the shares of
Arch Common Stock to be issued pursuant to the Merger, Arch Exchange Offer
and pursuant to the Certificate Amendments to be approved for listing on
the Nasdaq National Market (the "NASDAQ") and on all other stock exchanges
on which shares of Arch Common Stock are then listed, subject to official
notice of issuance, prior to the Closing Date.
6.10. Publicity. The initial press release with respect to the
Merger shall be a joint press release. Thereafter PageNet and Arch shall
consult with each other prior to issuing any press releases or otherwise
making public announcements with respect to the Merger, the Exchange Offers
and the other transactions contemplated by this Agreement and prior to
making any filings with any third party and/or any Governmental Entity
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(including any securities exchange) with respect thereto, except as may be
required by Law or by obligations pursuant to any listing agreement with,
or rules of, any securities exchange.
6.11. Benefits.
(a) Stock Options.
(i) At the Effective Time, each outstanding
option to purchase PageNet Shares (a "PageNet Option") under
PageNet Stock Plans, and which has not vested prior to the
Effective Time, shall become fully exercisable and vested as of
the Effective Time. At the Effective Time, each PageNet Option
shall be converted to an option to acquire, on the same terms and
conditions as were applicable under such PageNet Option, the same
number of shares of Arch Common Stock as the holder of such
PageNet Option would have been entitled to receive pursuant to the
Merger had such holder exercised such PageNet Option in full
immediately prior to the Effective Time (rounded down to the
nearest whole number) (a "Substitute Option"), at an exercise
price per share (rounded to the nearest whole cent) equal to: (y)
the aggregate exercise price for PageNet Shares otherwise
purchasable by such holder pursuant to such PageNet Option;
divided by (z) the number of full shares of Arch Common Stock
deemed purchasable pursuant to such PageNet Option in accordance
with the foregoing.
(ii) Notwithstanding the foregoing provisions,
in the case of any option to which Code Section 421 applies, the
option price, the number of shares subject to such option, and the
terms and conditions of exercise of such option shall be
determined in order to comply with Code Section 424(a). As
promptly as practicable after the Effective Time, Arch shall
deliver to the participants in PageNet Stock Plans appropriate
notices setting forth such participants' rights pursuant to the
Substitute Options.
(iii) With respect to each of the directors and
officers of PageNet identified in Section 6.11(a)(iii) of the
PageNet Disclosure Letter (each, a "Section 16 Person"), the full
Board of Directors of PageNet shall approve the disposition by
each such Section 16 Person of the PageNet equity securities
(including derivative securities) set forth next to such Section
16 Person's name in Section 6.11(a)(iii) of the PageNet Disclosure
Letter and the full Board of Directors of Arch shall approve the
acquisition by each such Section 16 Person of the Arch equity
securities (including derivative securities) set forth next to
such Section 16 Person's name in Section 6.11(a)(iii) of the
PageNet Disclosure Letter. Each such approval shall specify, in
the form set forth in Section 6.11(a)(iii) of the PageNet
Disclosure Letter, the material terms of the derivative securities
and each such approval shall specify that the approval is granted
for purposes of exempting the transaction under Rule 16b-3 under
the Exchange Act.
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(b) Conversion and Registration. At or prior to the
Effective Time, PageNet shall make all necessary arrangements with
respect to PageNet Stock Plans to permit the conversion of the
unexercised PageNet Options into Substitute Options pursuant to
this section and, as soon as practicable after the Effective Time,
Arch shall use its reasonable best efforts to register under the
Securities Act on Form S-8 or other appropriate form (and use its
best efforts to maintain the effectiveness thereof) shares of Arch
Common Stock issuable pursuant to all Substitute Options.
(c) Amendment to 401(k) Plan. Prior to the Effective
Time, PageNet shall (i) amend the PageNet Employees Savings Plan
and the related trust to prohibit the investment of Employer
Salary Reduction Contributions in equity securities of PageNet
(ii) deregister interests under such plan and any registered but
unsold equity securities of PageNet under the Securities Act of
1933 and the Exchange Act.
6.12. Expenses. Whether or not the Merger is consummated, all
costs and expenses incurred in connection with this Agreement, the Merger,
the Exchange Offers and the other transactions contemplated by this
Agreement shall be paid by the party incurring such cost and expense,
except that costs and expenses incurred in connection with the filing fee
for the S-4 Registration Statement and the Exchange Registration
Statements, printing and mailing the Prospectus/Proxy Statement, the S-4
Registration Statement and the Exchange Registration Statements, and the
filing fees under the HSR Act, any other filings fees under any
Governmental Regulations, and any filings fees in connection with obtaining
approvals under the Communications Act, FCC Regulations and State Laws
shall be shared equally by Arch and PageNet.
6.13. Indemnification; Directors' and Officers' Insurance.
(a) For six years from and after the Effective Time, Arch
will indemnify and hold harmless each present and former director
and officer of PageNet (solely when acting in such capacity)
determined as of the Effective Time (the "Indemnified Parties"),
against any costs or expenses (including reasonable attorneys'
fees), judgments, fines, losses, claims, damages or liabilities
(collectively, "Costs") incurred in connection with any claim,
action, suit, proceeding or investigation, whether civil,
criminal, administrative or investigative, arising out of or
pertaining to matters existing or occurring at, or prior to, the
Effective Time, whether asserted or claimed prior to, at or after
the Effective Time, to the fullest extent that PageNet would have
been permitted under Delaware law and its certificate of
incorporation or bylaws in effect on the date of this Agreement to
indemnify such Person (and the Surviving Corporation shall also
advance expenses as incurred to the fullest extent permitted under
applicable law, provided the Person to whom expenses are advanced
provides an undertaking to repay such advances if it is ultimately
determined that such Person is not entitled to indemnification).
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(b) Any Indemnified Party wishing to claim
indemnification under paragraph (a) of this Section 6.13 shall
promptly notify Arch, upon learning of any such claim, action,
suit, proceeding or investigation, but the failure to so notify
shall not relieve Arch of any liability it may have to such
Indemnified Party if such failure does not materially prejudice
the ability of Arch to defend such claims. In the event of any
such claim, action, suit, proceeding or investigation (whether
arising before or after the Effective Time), (i) Arch shall have
the right to assume the defense thereof and Arch shall not be
liable to such Indemnified Parties for any legal expenses of other
counsel or any other expenses subsequently incurred by such
Indemnified Parties in connection with the defense thereof, except
that if Arch elects not to assume such defense or counsel for the
Indemnified Parties advises that there are actual conflicts of
interest between Arch and the Indemnified Parties, the Indemnified
Parties may retain counsel satisfactory to them, and Arch shall
pay all reasonable fees and expenses of such counsel for the
Indemnified Parties promptly as statements therefor are received;
provided, however, that Arch shall be obligated pursuant to this
paragraph (b) to pay for only one firm of counsel for all
Indemnified Parties in any jurisdiction (unless there is such an
actual conflict of interest), (ii) the Indemnified Parties will
cooperate in the defense of any such matter and (iii) Arch shall
not be liable for any settlement effected without its prior
written consent.
(c) Arch shall maintain a policy of officers' and
directors' liability insurance for acts and omissions occurring
prior to the Effective Time ("D&O Insurance") with coverage in
amount and scope at least as favorable as PageNet's existing
directors' and officers' liability insurance coverage for a period
of six years after the Effective Time; provided, however, if the
existing D&O Insurance expires, is terminated or canceled, or if
the annual premium therefor is increased to an amount in excess of
200% of the last annual premium paid prior to the date of this
Agreement (the "Current Premium"), in each case during such six
year period, Arch will use its best efforts to obtain D&O
Insurance in an amount and scope as great as can be obtained for
the remainder of such period for a premium not in excess (on an
annualized basis) of 200% of the Current Premium. The provisions
of this Section 6.13(c) shall be deemed to have been satisfied if
prepaid policies shall have been obtained by PageNet prior to the
Closing, which policies provide such directors and officers with
coverage for an aggregate period of six years with respect to
claims arising from facts or events that occurred on, or prior to,
the Effective Time, including, without limitation, with respect to
the transactions contemplated by this Agreement. If such prepaid
policies shall have been obtained by PageNet prior to the Closing,
then Arch shall maintain such policies in full force and effect
and shall continue to honor PageNet's obligations thereunder.
(d) If Arch or any of its successors or assigns: (i)
shall consolidate with, or merge into, any other corporation or
entity and shall not be the continuing or surviving corporation or
entity of such consolidation or merger; or (ii) shall transfer all
or substantially all of its properties and assets to any
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individual, corporation or other entity, then and in each such
case, proper provisions shall be made so that the successors and
assigns of Arch shall assume all of the obligations set forth in
this section. At the Effective Time, Arch shall assume and be
bound by all of PageNet's indemnity obligations with respect to
officers, directors and employees of corporations it previously
acquired that are identified in the corresponding section of the
PageNet Disclosure Letter.
(e) The provisions of this section are intended to be for
the benefit of, and shall be enforceable by, each of the
Indemnified Parties, their heirs and their representatives.
6.14. Takeover Statute. If any Takeover Statute or similar statute
or regulation is or may become applicable to this Agreement or to the other
transactions contemplated hereby or thereby, each of the parties and its
Board of Directors shall grant such approvals and take all such actions as
are legally permissible so that the transactions contemplated under such
agreements may be consummated as promptly as practicable on the terms
contemplated under such agreements and otherwise act to eliminate or
minimize the effects of any such statute or regulation on the transactions
contemplated under such agreements.
6.15. Confidentiality. PageNet and Arch each acknowledges and
confirms that it has entered into a Confidentiality Agreement, dated as of
August 26, 1999 (the "Confidentiality Agreement"), and that the
Confidentiality Agreement shall remain in full force and effect in
accordance with its terms.
6.16. Tax-Free Reorganization. Arch, Merger Sub and PageNet shall
each use its best efforts to cause the Merger to be treated as a
reorganization with the meaning of Section 368(a) of the Code and to obtain
an opinion of its respective counsel as contemplated by Sections 7.2(d) and
7.3(d), respectively.
6.17. Senior Credit Facilities. PageNet and Arch shall use their
reasonable best efforts to secure, through the amendment or restatement of
their respective current credit facilities, through a new credit facility
or through the operation of the Prepackaged Plan, or any combination of the
foregoing, senior secured debt financing in an amount not less than $1.5
billion on terms reasonably acceptable to the parties to this Agreement.
Simultaneously with the Exchange Offers, PageNet shall solicit the consent
of the holders of PageNet's senior credit facilities (the "PageNet Secured
Creditors") to the Prepackaged Plan. The solicitation of the PageNet
Secured Creditors shall be made in accordance with the standards and
requirements set forth in Section 6.18(e).
6.18. The Exchange Offers.
(a) Provided that nothing shall have occurred that would
result in a failure to satisfy any other conditions set forth in
Section 6.18(b) of this Agreement, Arch and PageNet shall, as
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promptly as practicable, commence separate exchange offers (the
"Arch Exchange Offer" and the "PageNet Exchange Offer" and
together, the "Exchange Offers") to issue an aggregate of up to:
(i) 29,651,980 shares of Arch Common Stock in exchange for
the $448.4 million in aggregate principal amount of Arch' 107/8%
Senior Discount Notes due March 15, 2008 issued under and pursuant
to an Indenture, dated as of March 12, 1996, between Arch and
IBJ Schroder Bank & Trust Company, as Trustee (the "Arch Notes");
and (ii) in the case of PageNet, 616,830,757 PageNet Shares and,
subject to Section 6.1(d) of this Agreement, Distributed Interests
representing 68.9% of the equity ownership in the Distributed
Subsidiary in exchange for the $1.2 billion in aggregate principal
amount, together with all accrued interest thereon, of: (x) 10%
Senior Subordinated Notes Due October 15, 2008 issued under and
pursuant to an Indenture, dated as of July 15, 1995, between
PageNet and Shawmut Bank, N.A., as Trustee, as supplemented by a
Second Supplemental Indenture, dated as of October 15, 1996,
between PageNet and Fleet National Bank; (y) 10.125% Senior
Subordinated Notes Due August 1, 2007 issued under and pursuant to
an Indenture, dated as of July 15, 1995, between PageNet and
Shawmut Bank, N.A., as Trustee, as supplemented by a First
Supplemental Indenture, dated as of July 15, 1995, between PageNet
and Shawmut Bank, N.A.; and (z) 8.875% Senior Subordinated Notes
Due February 1, 2006 issued under and pursuant to an Indenture,
dated as of January 15, 1994, between PageNet and Shawmut Bank,
N.A., as Trustee, as supplemented by a First Supplemental
Indenture, dated as of January 15, 1994, between PageNet and
Shawmut Bank, N.A. (collectively, the "PageNet Notes" and together
with the Arch Notes, the "Notes"). In the Exchange Offers,
(i) Arch will offer to exchange 66.1318 shares of Arch Common
Stock for each $1,000 principal amount, together with all accreted
or accrued interest thereon, of outstanding Arch Notes and
(ii) PageNet will offer to exchange a pro rata portion of
616,830,757 PageNet Shares and, subject to Section 6.1(d) of this
Agreement, Distributed Interests representing the portion of such
equity ownership in the Distributed Subsidiary equal to 68.9% of
the total equity ownership of the Distributed Subsidiary for each
PageNet Note (such pro rata portion to be computed immediately
prior to the Effective Time by dividing the principal amount,
together with all accrued interest thereon, of each PageNet Note
by the principal amount, together with all accrued interest
thereon, of all PageNet Notes). Calculations of share amounts for
such purpose will be rounded down to the nearest whole share and
no fractional shares of Arch Common Stock or PageNet Shares will
be issued for Notes.
(b) The obligations of Arch and PageNet under the
Exchange Offers shall be subject to the satisfaction of the
conditions to the consummation of the Merger set forth in Article
VII of this Agreement and, to the further condition that, (i) in
the case of the PageNet Exchange Offer, not less than 97.5% of the
aggregate outstanding principal amount of PageNet Notes and not
less than a majority of the outstanding principal amount of each
series of PageNet Notes shall have been validly tendered in
accordance with the terms of the PageNet Exchange Offer prior to
the expiration date of the PageNet Exchange Offer and not
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withdrawn (such 97.5% of the outstanding principal amount of the
PageNet Notes and no less than a majority of the outstanding
principal amount of each series of PageNet Notes tendered and not
withdrawn being herein referred to as the "PageNet Minimum
Condition") and (ii) in the case of the Arch Exchange Offer, not
less than 97.5% (the "Arch Minimum Percent") of the aggregate
outstanding principal amount of Arch Notes shall have been validly
tendered in accordance with the terms of the Arch Exchange Offer
prior to the expiration date of the Arch Exchange Offer and not
withdrawn; provided, however, that (x) PageNet may elect, in its
sole discretion, to waive the Arch Minimum Percent, or to lower
such Arch Minimum Percent to any level, and require the Arch
Exchange Offer to be consummated at such specified level (subject
to applicable Law and the other provisions of this Agreement), and
(y) at any time after either the PageNet Minimum Condition or the
PageNet Conditions to the Prepackaged Plan have been satisfied,
Arch may elect, in its sole discretion, to lower the Arch Minimum
Percent to any percentage equal to or greater than 67% (such
amount of Arch Notes tendered and not withdrawn, as may be
adjusted by either PageNet or Arch as set forth above, being
herein referred to as the "Arch Minimum Condition"). Except as
otherwise provided in this Agreement, no term or condition of the
Exchange Offers may be amended or modified without the written
consent of the parties hereto, which consent shall not be
unreasonably withheld.
(c) Holders of Notes who tender into the Exchange Offers
will be required, as a condition to a valid tender, to give their
consent (the "Note Consents") with respect to all Notes tendered
by them to, with respect to the PageNet Notes, the Prepackaged
Plan and, with respect to all Notes (including the Arch Notes),
the following amendments to the respective indenture or
supplemental indentures, together with such additional amendments
thereto or waivers thereof as shall be determined and consented to
by each of Arch and PageNet to be necessary or desirable (the
"Indenture Amendments"): (i) amendment of each such indenture to
the extent necessary, if any, to permit the completion of the
Merger, the Prepackaged Plan and the other transactions
contemplated by this Agreement; and (ii) amendments to eliminate
(A) any covenants which may be modified or eliminated by majority
vote of the Notes, including without limitation any covenants
which restrict (s) the sale of assets, (t) any change of control,
(u) the incurrence of indebtedness, (v) the making of restricted
payments, (w) the existence of limitations on distributions by
subsidiaries, (x) the existence of liens, (y) transactions with
affiliates or related persons or (z) the issuance and sale of
stock of subsidiaries, (B) any events of default which relate to
(x) the non-payment or acceleration of other indebtedness (or
notification of foreclosure proceedings with respect to property
secured by other indebtedness), (y) the failure to discharge
judgments for the payment of money, or (z) the bankruptcy or
insolvency of subsidiaries, and (C) any provisions which condition
mergers or consolidations on compliance with any financial
criteria. Such holders will also be required, as a condition to a
valid tender, to waive (the "Note Waivers") any and all existing
defaults on or with respect to the Notes and any and all rights to
rescind their acceptance of the Exchange Offer after the Exchange
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Offers Expiration Date (as defined in Section 6.18(h) hereof), such
waiver of rescission rights to be subject, however, to their
withdrawal rights under applicable law and regulations, or to
claim any payments relating to the Notes tendered under applicable
law and regulations, and for any other relief, legal or equitable,
based on any possible future judicial, administrative or other
governmental or legal determination that the Note Consents or the
adoption of any of the Indenture Amendments are invalid or
unenforceable. Notwithstanding anything to the contrary herein,
the Note Waivers shall not be deemed to cover claims for
violations of federal or state securities laws relating to the
Exchange Offers.
(d) PageNet and Arch each agrees, as to itself and its
Subsidiaries, that none of the information supplied or to be
supplied by it or its Subsidiaries for inclusion or incorporation
by reference in: (i) (x) the Registration Statement on Form S-4 to
be filed with the SEC by Arch in connection with the issuance of
shares of Arch Common Stock in the Arch Exchange Offer (including
the consent solicitation and prospectus (the "Arch Exchange
Prospectus" constituting a part thereof) (the "Arch Exchange
Registration Statement")) and (y) the Registration Statement on
Form S-4 to be filed with the SEC by PageNet in connection with
the issuance of PageNet Shares and Distributed Interests in the
PageNet Exchange Offer (including the consent solicitation and
prospectus (the "PageNet Exchange Prospectus" and, together with
the Arch Exchange Statement, the "Exchange Prospectuses"
constituting a part thereof) (the "PageNet Exchange Registration
Statement" and, together with the Arch Exchange Registration
Statement, the "Exchange Registration Statements")) will, at the
time the Exchange Registration Statements become effective under
the Securities Act; and (ii) the Exchange Prospectuses and any
amendment or supplement thereto will, at the date of mailing to
noteholders contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. If at
any time prior to the Effective Time any information relating to
Arch or PageNet, or any of their respective affiliates (as defined
in SEC Rule 12b-2), officers or directors, is discovered by Arch
or PageNet which should be set forth in an amendment or supplement
to any of the Exchange Registration Statements or the Exchange
Prospectuses, so that any of such documents would not include any
misstatement of a material fact or would omit to state any
material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under
which they were made, not misleading, the party which discovers
such information shall promptly notify the other parties to this
Agreement and an appropriate amendment or supplement describing
such information shall be promptly filed with the SEC and, to the
extent required by law, disseminated to the noteholders.
(e) The PageNet Exchange Prospectus sent to the holders
of the PageNet Notes in connection with the PageNet Exchange Offer
will also constitute a disclosure statement for the purpose of
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soliciting the acceptances of such holders for the Prepackaged Plan
(as defined in Section 6.19). PageNet and Arch shall consult with
each other prior to sending the PageNet Exchange Prospectus to the
holders of the PageNet Notes for purposes of ensuring that such
materials comply with the disclosure requirements of the
Bankruptcy Code and other applicable law insofar as they relate to
prepackaged plans.
(f) Arch and PageNet shall promptly prepare Exchange
Prospectuses, and shall prepare and file with the SEC the Exchange
Registration Statements as promptly as practicable. Arch and
PageNet each shall use its reasonable best efforts to have each of
the Exchange Registration Statements declared effective under the
Securities Act as promptly as practicable and on the same day as
the S-4 Registration Statement, and promptly thereafter mail the
Exchange Prospectuses to the noteholders of Arch and PageNet. Each
party shall notify the other of the receipt of the comments of the
SEC and of any requests by the SEC for amendments or supplements
to the Exchange Prospectuses or the Exchange Registration
Statements or for additional information and shall promptly supply
one another with copies of all correspondence between any of them
(or their Representatives) and the SEC (or its staff) with respect
thereto. If, at any time prior to the expiration date of the
Exchange Offers, any event shall occur relating to or affecting
Arch, PageNet, or their respective officers or directors, which
event should be described in an amendment or supplement to the
Exchange Prospectuses or the Exchange Registration Statements, the
parties shall promptly inform one another and shall cooperate in
promptly preparing, filing and clearing with the SEC and, if
required by applicable securities laws, mailing to Arch' or
PageNet's noteholders, as the case may be, such amendment or
supplement.
(g) Provided the conditions to the Exchange Offers
referred to in Section 6.18(b) above have been satisfied or waived
and Arch or PageNet, as the case may be, has accepted for exchange
Notes properly tendered and not withdrawn, Notes that are not
tendered into or accepted in the Exchange Offers will remain
outstanding as obligations of Arch or the Surviving Corporation,
as the case may be, after consummation of the Merger and Arch or
the Surviving Corporation, as the case may be, alone shall be
obligated to comply with the terms thereof, except as may
otherwise be provided in the Prepackaged Plan or the Final
Confirmation Order (as defined in Section 6.19) if the Bankruptcy
Case (as defined in Section 6.19) is commenced. Such Notes shall
be modified only to the extent provided in the Indenture
Amendments and the Note Consents.
(h) The Exchange Offers will expire at 12:00 midnight,
New York City time, on the twentieth business day after such
commencement, or, consistent with this Agreement and the
provisions of Section 6.19, at such later time and date as PageNet
and Arch shall select consistent with applicable law and
regulations (the "Exchange Offers Expiration Date").
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(i) The Arch Common Stock or PageNet Shares and
Distributed Interests, as the case may be, to be issued in
exchange for the Notes tendered and accepted in the Exchange
Offers will be so issued only after timely receipt by the exchange
agent selected jointly by Arch and PageNet (the "Notes Exchange
Agent") of: (i) certificates for all physically delivered Notes in
proper form for transfer, or timely confirmation of book-entry
transfer of such Notes for such purposes; (ii) a properly
completed and duly executed letter of transmittal in the form
provided on behalf of Arch or the Surviving Corporation, as the
case may be, for such purpose; (iii) a duly executed form of Note
Consent and Note Waiver; and (iv) any other documents required by
the letter of transmittal.
(j) For purposes of the Exchange Offers, Arch or PageNet,
as the case may be, shall be deemed to have accepted for exchange
the tendered Notes as, if and when Arch or PageNet, as the case
may be, gives oral or written notice to the Notes Exchange Agent
of such party's acceptance of such Notes for exchange. Each of
Arch and PageNet agree to simultaneously accept for exchange the
Notes pursuant to their respective Exchange Offers. The Notes
Exchange Agent will act as agent for the tendering holders for the
purpose of receiving the Notes and transmitting the Arch Common
Stock, PageNet Shares or Distributed Interests, as the case may
be, in exchange therefor.
(k) Arch and PageNet shall jointly establish such
additional procedures and requirements with respect to the conduct
of the Exchange Offers and shall cause the same to be communicated
to holders of the Notes in such manner as they shall determine to
be necessary or appropriate, including procedures and requirements
as may be necessary to obtain confirmation of the Prepackaged Plan
if the Bankruptcy Case is commenced. All questions concerning the
timeliness, validity, form, eligibility, and acceptance for
exchange or withdrawal of any tender of the Notes pursuant to any
of the procedures described herein or any additional procedures
established by the parties shall be determined jointly by the
parties, whose determinations shall be final and binding. Arch and
PageNet, as the case may be, also reserve in connection with their
respective Exchange Offers, the absolute right to: (i) waive any
defect or irregularity in any tender with respect to any
particular Note or any particular holder; (ii) permit a defect or
irregularity to be corrected within such time as it may determine;
or (iii) reject the purported tender of any Note and interest
coupons appertaining thereto. Tenders shall not be deemed to have
been received or accepted until all defects and irregularities
have been cured or waived within such time as Arch or PageNet, as
the case may be, may determine in its sole discretion. None of
Arch, PageNet or the Notes Exchange Agent or any other person
shall be under any duty to give notification of any defects or
irregularities relating to tenders or incur any liability for
failure to give such notification.
(l) Each of PageNet and Arch shall accept the Notes
tendered in their respective Exchange Offer as of immediately
prior to the Effective Time.
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(m) Promptly upon receipt of the consents of the holders
of at least a majority of the outstanding principal amount of a
series of Notes, Arch or PageNet, as the case may be, shall
execute the applicable supplemental indenture to be effective as
of the Effective Time.
6.19. Bankruptcy Provisions. As used in this Agreement, the term:
"Bankruptcy Case" shall mean the bankruptcy case filed or
stipulated to by PageNet and its Subsidiaries under Chapter 11 of
the Bankruptcy Code pursuant to the terms hereof;
"Bankruptcy Code" shall mean Title 11 of the United States Code,
11 U.S.C. ss. 101 et seq., as now in effect or hereafter amended;
"Bankruptcy Court" shall mean the court in which the Bankruptcy
Case may be filed or otherwise administered, including any court
to which the Bankruptcy Case may be transferred at any time under
applicable law. PageNet and Arch hereby agree that the U.S.
Bankruptcy Court for the District of Delaware is the appropriate
venue for the Bankruptcy Case and that if the Bankruptcy Case is
filed by PageNet it will be filed in the District of Delaware;
"Exit Financing" shall mean the senior secured debt financing
referred to in Section 6.17 hereof;
"Final Confirmation Order" shall mean an order of the Bankruptcy
Court confirming the Prepackaged Plan in form and substance
reasonably acceptable to PageNet and Arch, which has not been
amended, modified and added to without the express consent of
PageNet and Arch and as to which order as of the Effective
Time there is no stay or injunction;
"Initial Determination Date" shall mean the date which is 60 days
after the date upon which the S-4 Registration Statement and the
Exchange Registration Statements are declared effective by the
SEC;
"Interim Financing" shall mean debt financing in an amount and on
terms reasonably acceptable to Arch and appropriate to permit
PageNet to continue its business and operations in the ordinary
course following the filing of the Bankruptcy Case;
"Prepackaged Plan" shall mean the "prepackaged" plan of
reorganization for PageNet and its Subsidiaries that (1) is
prepared by PageNet and its Subsidiaries in accordance with, and
intended by PageNet and its Subsidiaries to be confirmed under,
the provisions of Chapter 11 of the Bankruptcy Code (including the
confirmation requirements set forth in Section 1129 thereof), (2)
consists of terms, conditions and provisions that are mutually
acceptable to Arch and PageNet (it being understood and
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agreed by PageNet and Arch that neither party will unreasonably
withhold its consent to proposed amendments to non-material
provisions of the Prepackaged Plan) and are not inconsistent with
the terms, conditions and provisions of this Agreement, (3) is
included in the SEC disclosure materials sent to holders of the
PageNet Notes in connection with the Exchange Offers pursuant to
Sections 6.18(a) and (e) of this Agreement and (4) which contains
terms intended to implement this Agreement and other terms which
are not inconsistent with this Agreement, together with any and
all changes, amendments or modifications to, or restatements of,
such prepackaged plan which with respect to material provisions
have been agreed to by Arch and PageNet, without regard to whether
such changes, amendments, modifications and restatements are made
to the Prepackaged Plan before or after the commencement of the
Bankruptcy Case;
"PageNet Conditions to the Prepackaged Plan" shall mean (i) the
Requisite Bankruptcy Vote of the PageNet Notes, (ii) the Requisite
Bankruptcy Vote of the PageNet Secured Creditors and (iii) the
Interim Financing;
"Requisite Bankruptcy Vote of the PageNet Notes" shall mean a
vote in favor of the Prepackaged Plan by the holders of at least
two-thirds of the outstanding principal amount of the PageNet
Notes that are actually voted, and a vote in favor of the
Prepackaged Plan by a majority in number of the holders of the
PageNet Notes that actually vote;
"Requisite Bankruptcy Vote of the PageNet Secured Creditors" shall
mean a vote in favor of the Prepackaged Plan by the holders of at
least two-thirds of the outstanding indebtedness owed under the
PageNet senior credit facilities that are actually voted, and a
vote in favor of the Prepackaged Plan by a majority in number of
the holders of the indebtedness under the PageNet senior credit
facilities that actually vote;
"Requisite Conditions to the Prepackaged Plan" shall mean (i) the
PageNet Conditions to the Prepackaged Plan, (ii) the Arch
Conditions to the Prepackaged Plan, and (iii) that either the Exit
Financing has been obtained or upon entry of the Final Order will
be obtained;
"Arch Conditions to the Prepackaged Plan" shall mean the (i) Arch
Minimum Condition and (ii) Arch Stockholders Approval.
(a) Notwithstanding any other provision of this
Agreement to the contrary, in the event that:
(i) prior to or at the Initial Determination
Date the PageNet Minimum Condition and the Arch Minimum Condition
are satisfied, and the PageNet Stockholders Approval and the Arch
Stockholders Approvals are obtained, then the Exchange Offers
shall be consummated pursuant to the terms hereof, the Bankruptcy
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Case shall not be filed and the Prepackaged Plan shall be
abandoned, unless PageNet and Arch agree that the filing of the
Bankruptcy Case and the confirmation of the Prepackaged Plan are
in the best interests of PageNet and Arch, notwithstanding
satisfaction of the PageNet Minimum Condition and the Arch Minimum
Condition;
(ii) at the Initial Determination Date, the
PageNet Minimum Condition is not satisfied or the PageNet
Stockholders Approval is not obtained but the Requisite Conditions
to the Prepackaged Plan are satisfied, then either (x) (1) PageNet
shall file the Bankruptcy Case (in the U.S. Bankruptcy Court for
the District of Delaware or such other bankruptcy court as PageNet
and Arch mutually agree) and seek confirmation of the Prepackaged
Plan by the Bankruptcy Court, and (2) Arch shall be bound by all
of the terms hereof, and shall consummate the Merger through the
Prepackaged Plan if such plan is confirmed by the Bankruptcy Court
by a Final Confirmation Order within 120 days of the commencement
of the Bankruptcy Case, or such later date as is mutually agreed
to in writing by Arch and PageNet, and if the other conditions to
the Merger set forth in Article VII hereof (other than Section
7.1(a)(2) and 7.1(g)(ii), which shall have been satisfied by entry
of the Final Confirmation Order) are satisfied after entry of the
Final Confirmation Order but prior to the Termination Date, as
such date may be extended in accordance with Section 8.2, or (y)
PageNet shall terminate this Agreement and simultaneously pay to
Arch the Arch Termination Fee pursuant to Section 8.5(c) hereof.
In the event the Bankruptcy Case is commenced, Arch shall:
(w) support assumption of this Agreement by PageNet as
a debtor-in-possession pursuant to 11 U.S.C. ss. 365;
(x) enter into a new agreement identical to the terms of
this Agreement with PageNet as a debtor-in-possession
after commencement of the Bankruptcy Case, in the event
PageNet and Arch agree (upon the advice of counsel) or
the Bankruptcy Court determines that applicable law
prohibits assumption of this Agreement by PageNet as a
debtor-in-possession pursuant to 11 U.S.C. ss. 365(c)(2);
(y) support confirmation of the Prepackaged Plan and all
actions and pleadings reasonably undertaken by PageNet in
the Bankruptcy Case to achieve confirmation thereof; and
(z) oppose any effort by any party to (1) dismiss the
Bankruptcy Case or convert the Bankruptcy Case to a case
under chapter 7 of the Bankruptcy Code, or (2) defeat
confirmation of the Prepackaged Plan;
(iii) at the Initial Determination Date, the
PageNet Minimum Condition is not satisfied or the PageNet
Stockholders Approval is not obtained and the Requisite Conditions
to the Prepackaged Plan are not satisfied, then the Initial
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Determination Date shall be extended to the earlier of (x) the
date upon which the PageNet Minimum Condition and the Arch Minimum
Condition are satisfied, and the PageNet Stockholders Approval and
the Arch Stockholders Approval are obtained, (y) the date upon
which the Requisite Conditions to the Prepackaged Plan are
satisfied and (z) June 30, 2000 (the "Extended Determination
Date"). If the PageNet Minimum Condition and the Arch Minimum
Condition are satisfied and the PageNet Stockholders Approval and
the Arch Stockholders Approval are obtained prior to June 30,
2000, then the provisions of Section 6.19(a)(i) of this Agreement
shall apply. If the Requisite Conditions to the Prepackaged Plan
are satisfied prior to June 30, 2000, then the provisions of
Section 6.19(a)(ii) of this Agreement shall apply;
(iv) at any time after the date of this
Agreement, the Board of Directors of PageNet determines that the
filing of the Bankruptcy Case is in the best interests of PageNet,
then (1) PageNet may file the Bankruptcy Case and shall seek, to
the extent not already satisfied, to satisfy the PageNet
Conditions to the Prepackaged Plan and otherwise seek confirmation
of the Prepackaged Plan by the Bankruptcy Court, and (2) Arch
shall (x) seek, to the extent not already satisfied, to satisfy
the Arch Conditions to the Prepackaged Plan and (y) be bound by
all of the terms hereof, and shall consummate the Merger through
the Prepackaged Plan if such plan is confirmed by the Bankruptcy
Court by a Final Confirmation Order (provided that such Final
Confirmation Order shall be entered by no later than December 31,
2000, or such later date as is mutually agreed to by Arch and
PageNet) and if the other conditions to the Merger set forth in
Article VII hereof (other than Section 7.1(a)(2) and 7.1(g)(ii),
which shall have been satisfied by entry of the Final Confirmation
Order) are satisfied after entry of the Final Confirmation Order
but prior to the Termination Date, as such date may be extended in
accordance with Section 8.2;
(v) an Involuntary Insolvency Event occurs prior
to a voluntary commencement of the Bankruptcy Case pursuant to
Sections 6.19(a)(ii), (iii) or (iv), (1) (A) if the date of the
Insolvency Event (the "Involuntary Insolvency Event Date") is
prior to the Initial Determination Date, PageNet shall have up to
120 days after such Involuntary Insolvency Event Date to obtain
from the appropriate court an order which dismisses such
Involuntary Insolvency Event (including, with respect to an
involuntary petition filed in any bankruptcy court, an order which
holds or requires that the court abstain from adjudicating the
petition pursuant to 11 U.S.C. ss. 305) and which order is not
subject to a stay or injunction and is not subject to an appeal
and all periods for taking an appeal shall have expired (the
"Dismissal Order"), so that the Exchange Offers may be completed,
and this Agreement shall remain in full force and effect and Arch
shall be bound by all of the terms hereof or (B) if an Involuntary
Insolvency Event occurs after the Initial Determination Date, and
as of the Involuntary Insolvency Event Date the PageNet Minimum
Condition and the Arch Minimum Condition have been satisfied and
the PageNet Stockholders Approval and Arch Stockholders Approval
have been obtained, then (x) PageNet shall have up to
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120 days after such Involuntary Insolvency Event Date to obtain
entry of the Dismissal Order, and (y) this Agreement shall remain
in full force and effect and Arch shall consummate the Merger
(outside of bankruptcy, unless PageNet and Arch mutually consent
to file the Bankruptcy Case as contemplated by Section 6.19(a)(i)
hereof) pursuant to the terms hereof provided that such Dismissal
Order has been obtained before the expiration of such 120-day
period, (2) if on the Involuntary Insolvency Event Date the
PageNet Minimum Condition has not been satisfied or PageNet
Stockholders Approval has not been obtained but the Requisite
Conditions to the Prepackaged Plan have been satisfied, then
PageNet shall stipulate to bankruptcy relief under Chapter 11 of
the Bankruptcy Code and the provisions of Section
6.19(a)(ii)(x)(1) of this Agreement shall apply (including the
provisions therein requiring Arch to be obligated to consummate
the Merger pursuant to the Prepackaged Plan); and (3) if on the
Involuntary Insolvency Event Date the PageNet Minimum Condition
has not been satisfied or PageNet Stockholders Approval or Arch
Stockholders Approval has not been obtained and the Requisite
Conditions to the Prepackaged Bankruptcy have not been obtained,
then PageNet may (but shall not be obligated to) stipulate to
bankruptcy relief under Chapter 11 of the Bankruptcy Code and the
provisions of Section 6.19(a)(iv) of this Agreement shall apply
(including the provisions therein requiring Arch to be obligated
for a period of time to consummate the Merger pursuant to the
Prepackaged Plan). For purposes hereof, an "Involuntary Insolvency
Event" shall mean any filing of an involuntary bankruptcy petition
against PageNet or any of its Subsidiaries by any party, or the
appointment under other applicable state or federal law of a
liquidator or a trustee for PageNet or any of its Subsidiaries.
(b) As soon as practicable after entering into this
Agreement, PageNet and Arch shall jointly prepare the Prepackaged
Plan in form and substance satisfactory to PageNet and Arch.
PageNet shall include the Prepackaged Plan and related
solicitation materials (including a ballot) in the PageNet
Exchange Prospectus, the solicitation materials sent to the
PageNet Secured Creditors, and (to the extent PageNet and Arch
deem necessary) in any materials sent to the holders of PageNet
Shares. PageNet and Arch shall cooperate to ensure that the
Exchange Offers, including the disclosures to holders of PageNet
Notes made in connection therewith, and the solicitation of
PageNet Secured Creditors comply with the disclosure requirements
of the Bankruptcy Code and applicable law. The Prepackaged Plan
may not be amended, modified or added to in any material respect
without the written consent of PageNet and Arch.
(c) Notwithstanding any other provision hereof to the
contrary, (i) the filing of the Bankruptcy Case, the operation of
PageNet's business in accordance with the Bankruptcy Code or the
pendency of the Bankruptcy Case, or (ii) the occurrence of an
Involuntary Insolvency Event with respect to PageNet shall not be
considered in and of itself a Material Adverse Effect for purposes
of this Agreement.
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(d) On the same day that the Bankruptcy Case is filed, an
order for relief is consented to under Section 6.19(a)(v) of this
Agreement or an order for relief is entered, as applicable,
PageNet shall file a motion (the "Initial Merger Motion") for
expedited determination of approval of Section 6.2 hereof
concerning Acquisition Proposals (the "Exclusivity Provision"),
Section 8.5(c) concerning the Arch Termination Fee and Section
8.5(b) concerning the PageNet Termination Fee in form and
substance acceptable to Arch, PageNet shall use its best efforts
to obtain an order approving the Initial Merger Motion (the
"Initial Merger Order") within 15 days of the commencement of the
Bankruptcy Case, but in no event not later than 30 days after the
commencement thereof, which order shall be in form and substance
acceptable to Arch.
(e) PageNet shall promptly provide to Arch with drafts of
all documents, motions, orders, filings or pleadings that PageNet
proposes to file with the Bankruptcy Court and will provide Arch
with reasonable opportunity prior to the filing thereof to review
such filings to the extent reasonably practicable. PageNet shall
consult and cooperate with Arch with respect to all such filings.
(f) PageNet and Arch shall use their best efforts to
cause the transactions contemplated by this Agreement and the
Prepackaged Plan to be consummated in accordance with the terms
hereof and thereof, and without limiting the generality of the
foregoing shall use their best efforts to obtain all necessary
approvals, waivers, consents, permits, licenses, registrations and
other authorizations required in connection with this Agreement
and the Prepackaged Plan and the transactions contemplated hereby
and thereby, including without limitation, entry of the Final
Confirmation Order.
(g) PageNet shall cause its Subsidiaries to take all
actions and to execute all agreements and documents which are
necessary or useful in the preparation of and commencement of the
Bankruptcy Case, the preparation, filing and prosecution of the
Prepackaged Plan and the entry of the Final Confirmation Order.
(h) Concurrent with the commencement of the Exchange
Offers, PageNet shall send solicitation and disclosure materials
to its creditors as would bind such creditors to the Prepackaged
Plan under the provisions of the Bankruptcy Code. PageNet shall
make such solicitations of its creditors (in addition to
solicitations of holders of the PageNet Notes) as PageNet and Arch
determine is necessary to facilitate and expedite the confirmation
of the Prepackaged Plan in the event of any potential Bankruptcy
Case.
(i) If the Bankruptcy Case is commenced pursuant to
Section 6.19(a)(iv) or (v), then Arch shall not be subject to the
restrictions set forth in Section 6.2 or the restrictions on the
conduct of its business set forth in Section 6.1(b)(viii) with
respect to merger or acquisition transactions or the other
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restrictions set forth in Section 6.1(b), to the extent such
restrictions would impede or prohibit Arch from entering into
another merger or acquisition transaction; provided, however, that
Arch may not enter into another merger or acquisition
transaction that would prevent, materially impair or materially
delay its ability to consummate the Merger or the other
transactions contemplated hereby; provided, further, that if Arch
enters into a merger or acquisition transaction following
the commencement of the Bankruptcy Case pursuant to Section
6.19(a)(iv) or (v) and as a result of such event PageNet is
required to amend its disclosure statement and resolicit the votes
of its creditors, then the time within which the Final
Confirmation Order must be obtained shall be extended for an
additional 90 days.
6.20. Rights Agreement. At or prior to the Effective Time, the
Arch Board of Directors shall take all action required to render
inapplicable the Arch Rights Agreement to the Merger and the transactions
contemplated by this Agreement. At or prior to the Effective Time, the Arch
Board of Directors shall take all action required by Section 5.1(j)(ii) of
this Agreement and the PageNet Board of Directors shall take all action
required by Section 5.1(j)(i) of this Agreement.
6.21. Preferred Stock.
(a) Arch shall use its reasonable best efforts to obtain,
as soon as practicable after the date of this Agreement, the
written agreement of each holder of Arch Series C Preferred Shares
(such written agreement referred to herein as the "Series C
Consent Agreement"), pursuant to which: (i) such holder agrees to
vote in favor of an amendment to the Arch certificate of
incorporation pursuant to which each Series C Convertible
Preferred Share shall be converted at the Effective Time into
8.416568 shares (the "Series C Exchange Ratio") of Arch Common
Stock, subject to adjustment as provided in Section 4.4 (the
"Series C Consideration"), (ii) waive any and all rights such
holder may have under section 7A of the Certificate of
Designations, Preferences and Relative, Participating, Optional or
other Special Rights of Series C Convertible Stock of Arch; and
(iii) Arch agrees to register for sale by such holder and certain
transferees, the shares of Arch Common Stock received by such
holder, unless such shares would be freely tradeable under
applicable securities laws. When executed and delivered by Arch,
the Series C Consent Agreement will be a valid and binding
agreement of Arch, enforceable against Arch in accordance with its
terms, subject to the Bankruptcy and Equity Exception.
(b) The exchange of certificates formerly representing
Arch Series C Preferred Shares shall be effected by the Exchange
Agent (as defined in Section 4.2) pursuant to the provisions set
forth in Section 4.2 of this Agreement. The term "Certificate"
shall include certificates formerly representing Arch Series C
Preferred Shares.
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6.22. Spinoff. Prior to the Closing, the Board of Directors of
PageNet will declare a dividend (the "Spinoff Dividend"), payable to those
holders of PageNet Shares who hold PageNet Shares immediately prior to the
acceptance of PageNet Notes in the PageNet Exchange Offer (the "Spinoff
Record Date"), of interests (the "Distributed Interests") representing the
portion of such equity ownership in Silverlake Communications, Inc. (also
doing business as VAST Solutions, Inc. and VAST Solutions) (the
"Distributed Subsidiary") equal to (x) subject to Section 6.1(d), 11.6% of
the total equity ownership of the Distributed Subsidiary divided by (y) the
number of PageNet Shares issued and outstanding at the Spinoff Record Date
(the issuance of the Spinoff Dividend shall be referred to herein as the
"Spinoff"). Payment of the Spinoff Dividend declared by the Board of
Directors of PageNet shall be conditioned upon the occurrence of (i) either
(A) the satisfaction of the PageNet Minimum Condition and the acceptance of
the PageNet Notes or (B) the filing of the Final Confirmation Order and
(ii) the consummation of the Merger. PageNet and the Distributed Subsidiary
shall take such action reasonably necessary (including filings with and
no-action requests of the SEC and communications with stockholders) to
effectuate the Spinoff. Upon satisfaction of the conditions to the Spinoff
Dividend, Arch shall use its reasonable best efforts to consummate, or
cause to be consummated the Spinoff as promptly as practicable after the
Effective Time.
ARTICLE VII.
Conditions
7.1. Conditions to Each Party's Obligation to Effect the Merger.
The respective obligation of each party to effect the Merger is subject to
the satisfaction or waiver, if applicable, at or prior to the Effective
Time of each of the following conditions:
(a) Stockholder Approval. The Arch Stockholders Approval
shall have been obtained, and PageNet shall have obtained either
(1) the PageNet Stockholders Approval or (2) entry of the Final
Confirmation Order confirming the Prepackaged Plan, such that this
Agreement and the transactions contemplated hereby can be
accomplished without the approval of the holders of the PageNet
Shares.
(b) NASDAQ Listing. The shares of Arch Common Stock
issuable pursuant to this Agreement shall have been approved for
listing (either before or after the execution of this Agreement)
on the NASDAQ.
(c) Governmental Regulations. The waiting period
applicable to the consummation of the Merger under the HSR Act
shall have expired or been terminated, and all other consents,
permits, licenses, and approvals for the Merger and the other
transactions contemplated by this Agreement required by the
Governmental Regulations, as well as all other material PageNet
Required Consents and Arch Required Consents, shall have been
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obtained and shall have become Final Orders. For purposes of this
agreement, a "Final Order" shall mean an action taken or order
issued by the applicable Governmental Entity as to which (i) no
request for stay by such Governmental Entity of the action or
order is pending, no such stay is in effect, and, if any deadline
for filing any such request is designated by statute or
regulation, it is passed; (ii) no petition for rehearing or
reconsideration of the action or order is pending before the
Governmental Entity and the time for filing any such petition is
passed; (iii) the Governmental Entity does not have the action or
order under reconsideration on its own motion and the time for
such reconsideration has passed; (iv) the action or order is not
then under active judicial review, there is no notice of appeal or
other application for judicial review pending, and the deadline
for filing such notice of appeal or other application for judicial
review has passed; and (v) with respect to an action taken or
order issued by the Governmental Entity granting consent to the
Merger, such consent shall be without material adverse conditions,
other than conditions that have been agreed to by PageNet and Arch
or that are routine conditions with respect to transfer of this
nature.
(d) Laws and Orders. No Governmental Entity of competent
jurisdiction shall have enacted, issued, promulgated, enforced or
entered any Law (whether temporary, preliminary or permanent) that
is in effect and restrains, enjoins or otherwise prohibits
consummation of the Merger, the Exchange Offers, the Spinoff or
the other transactions contemplated by this Agreement
(collectively, an "Order"), and no Governmental Entity shall have
instituted any proceeding or threatened to institute any
proceeding seeking any such Order.
(e) S-4. The S-4 Registration Statement and the Exchange
Registration Statements shall have become effective under the
Securities Act. No stop order suspending the effectiveness of the
S-4 Registration Statement or the Exchange Registration Statements
shall have been issued, and no proceedings for that purpose shall
have been initiated or be threatened by the SEC.
(f) Senior Credit Facilities. Arch and its subsidiaries,
including PageNet after giving effect to the Merger, will have
senior credit facilities in an amount not less than $1.5 billion.
(g) Exchange Offers/Bankruptcy. Either (i) the PageNet
Minimum Condition and the Arch Minimum Condition shall have been
satisfied or (ii) if the PageNet Minimum Condition has not been
satisfied, the Final Confirmation Order shall have been entered
confirming the Prepackaged Plan and the Arch Minimum Condition
shall have been obtained and all conditions to the Effective Time
occurring under the Prepackaged Plan shall have been satisfied.
(h) Blue Sky Approvals. Arch shall have received all
state securities and "blue sky" permits and approvals necessary to
consummate the transactions contemplated by this Agreement.
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(i) Expected Out-of-Pocket Income Tax Liability. PageNet,
Arch, Merger Sub and their respective subsidiaries shall not be
reasonably expected to incur out-of-pocket income tax liability in
their respective taxable periods which include the Effective Time
resulting directly from the consummation of the Merger, the
Exchange Offers and the Spinoff in excess of $25 million in the
aggregate. In making this determination the following shall be
taken into account: (1) the amount of cancellation of indebtedness
income, if any, includible in gross income, (2) gain, if any,
incurred as a result of the distribution or transfer of
appreciated assets, and (3) the amount of losses, credits or
deductions, including both available net operating loss or credit
carryforwards and losses, deductions or credits expected to be
generated in the taxable periods which include the Effective Time,
but excluding any expected carrybacks from subsequent taxable
periods.
7.2. Conditions to Obligations of Arch and Merger Sub. The
obligations of Arch and Merger Sub to effect the Merger are also subject to
the satisfaction or waiver by Arch at or prior to the Effective Time of the
following conditions:
(a) Representations and Warranties. The representations
and warranties of PageNet set forth in this Agreement (other than
those representations and warranties which would be breached as a
result of the filing or conduct of the Bankruptcy Case or the
occurrence of an Involuntary Insolvency Event with respect to
PageNet): (i) to the extent qualified by materiality, shall be
true and correct; and (ii) to the extent not qualified by
materiality, shall be true and correct (except that this clause
(ii) shall be deemed satisfied so long as any failures of such
representations and warranties to be true and correct, taken
together, would not reasonably be expected to have a Material
Adverse Effect on PageNet and would not reasonably be expected to
have a material adverse effect on the expected benefits of the
Merger to Arch), in the case of each of clauses (i) and (ii), as
of the date of this Agreement and (except to the extent such
representations and warranties speak as of an earlier date) as of
the Closing Date as though made on and as of the Closing Date, and
Arch shall have received a certificate signed on behalf of PageNet
by an executive officer of PageNet to such effect.
(b) Performance of Obligations of PageNet. PageNet shall
have performed in all material respects all of its covenants,
agreements and obligations set forth in this Agreement at or prior
to the Closing Date, and Arch shall have received a certificate
signed on behalf of PageNet by an executive officer of PageNet to
such effect.
(c) Consents Under Agreements. PageNet shall have
obtained the consent or approval of each Person whose consent or
approval shall be required in order to consummate the transactions
contemplated by this Agreement under any Contract to which PageNet
or any of its Subsidiaries is a party (other than consents or
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waivers relating to the Bankruptcy Case or the occurrence of an
Involuntary Insolvency Event), except those for which the failure
to obtain such consent or approval, individually or in the
aggregate, is not reasonably likely to have, a Material Adverse
Effect on PageNet or a material adverse effect on the expected
benefits of the Merger to Arch.
(d) Tax Opinion. Arch shall have received the opinion of
Hale and Dorr LLP, counsel to Arch, dated the Closing Date, to the
effect that the Merger will be treated for federal income tax
purposes as a reorganization within the meaning of Section 368(a)
of the Code, and that each of Arch, Merger Sub and PageNet will be
a party to that reorganization within the meaning of Section
368(b) of the Code. Such opinion shall be based on certain
assumptions concerning the fair market value of stock and
securities to be surrendered and issued in the Merger, the
Exchange Offers and the Spinoff, which PageNet, Arch and, with
respect to PageNet, Houlihan Lokey Howard & Zukin Financial
Advisors, Inc., and, with respect to Arch, Bear, Stearns & Co.
Inc. will certify as being reasonable. In addition, in rendering
such opinions, counsel may rely upon representations and
certificates given for this purpose by responsible officers of
PageNet, Arch and Merger Sub.
(e) Certificate. PageNet shall have delivered to Arch a
certificate (without qualification as to knowledge or materiality
or otherwise) to the effect that each of the conditions specified
in Section 7.2 is satisfied in all respects, that the PageNet
Stockholders Meeting has been convened (unless the Bankruptcy Case
precedes the scheduled date of such meeting), and that the actions
set forth in Section 6.5(a) of this Agreement have been adopted
and approved in accordance with such section (except to the extent
such approval is not required by reason of the entry of the Final
Confirmation Order).
7.3. Conditions to Obligation of PageNet. The obligation of
PageNet to effect the Merger is also subject to the satisfaction or waiver
by PageNet at or prior to the Effective Time of the following conditions:
(a) Representations and Warranties. The representations
and warranties of Arch and Merger Sub set forth in this Agreement:
(i) to the extent qualified by materiality, shall be true and
correct; and (ii) to the extent not qualified by materiality,
shall be true and correct (except that this clause (ii) shall be
deemed satisfied so long as any failures of such representations
and warranties to be true and correct, taken together, would not
reasonably be expected to have a Material Adverse Effect and would
not reasonably be expected to have a material adverse effect on
the expected benefits of the Merger to PageNet), in the case of
each of clauses (i) and (ii), as of the date of this Agreement and
(except to the extent such representations and warranties speak as
of an earlier date) as of the Closing Date as though made on and
as of the Closing Date, and PageNet shall have received a
certificate signed on behalf of Arch and Merger Sub by an
executive officer of Arch to such effect.
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(b) Performance of Obligations of Arch. Each of Arch and
Merger Sub shall have performed in all material respects all of
its covenants, agreements and obligations set forth in this
Agreement at or prior to the Closing Date, and PageNet shall have
received a certificate signed on behalf of Arch and Merger Sub by
an executive officer of Arch to such effect.
(c) Consents Under Agreements. Arch shall have obtained
the consent or approval of each Person whose consent or approval
shall be required in order to consummate the transactions
contemplated by this Agreement under any Contract to which Arch or
any of its Subsidiaries is a party, except those for which the
failure to obtain such consent or approval, individually or in the
aggregate, is not reasonably likely to have, a Material Adverse
Effect on Arch or a material adverse effect on the expected
benefits of the Merger to PageNet.
(d) Tax Opinion. PageNet shall have received the opinion
of Mayer, Brown & Platt, counsel to PageNet, dated the Closing
Date, to the effect that the Merger will be treated for federal
income tax purposes as a reorganization within the meaning of
Section 368(a) of the Code, and that each of Arch, Merger Sub and
PageNet will be a party to that reorganization within the meaning
of Section 368(b) of the Code. Such opinion shall be based on
certain assumptions concerning the fair market value of stock and
securities to be surrendered and issued in the Merger, the
Exchange Offers and the Spinoff, which PageNet, Arch and, with
respect to PageNet, Houlihan Lokey Howard & Zukin Financial
Advisors, Inc., and, with respect to Arch, Bear, Stearns & Co.
Inc. will certify as being reasonable. In addition, in rendering
such opinions, counsel may rely upon representations and
certificates given for this purpose by responsible officers of
PageNet and Arch.
(e) Certificate. Arch shall have delivered to PageNet a
certificate (without qualification as to knowledge or materiality
or otherwise) to the effect that each of the conditions specified
in Section 7.3 (a)-(d) is satisfied in all respects, that the Arch
Stockholders Meeting has been convened, and that the actions set
forth in Section 6.5(b) have been adopted and approved in
accordance with such section.
(f) Series C Consent Agreement. The Series C Consent
Agreement will be in full force and effect, Arch shall not be in
breach or default of the Series C Consent Agreement, and to the
actual knowledge of the Knowledgeable Executives of Arch, there
shall not exist a breach or default under the Series C Consent
Agreement by any other party thereto.
(g) Spinoff. The Spinoff Dividend may be declared
pursuant to Section 6.22 of this Agreement or the Final
Confirmation Order shall have been entered confirming the
Prepackaged Plan.
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ARTICLE VIII.
Termination
8.1. Termination by Mutual Consent. This Agreement may be
terminated and the Merger may be abandoned at any time prior to the
Effective Time, whether before or after the approval by stockholders of
PageNet or Arch referred to in Section 7.1(a), by mutual written consent of
PageNet and Arch, through action of their respective Boards of Directors.
8.2. Termination by Either Arch or PageNet. This Agreement may be
terminated and the Merger may be abandoned at any time prior to the
Effective Time by action of the Board of Directors of either Arch or
PageNet if: (i) the Merger shall not have been consummated by June 30, 2000
if no Bankruptcy Case has been filed by that date or 30 days following the
date by which the Final Confirmation Order must be entered under Section
6.19(a) (the "Termination Date"); provided, however, that either party
shall have the option, in its sole discretion, to extend the Termination
Date for an additional period of time not to exceed 90 days if the sole
reason that the Merger has not been consummated by such date is that the
condition set forth in Section 7.1(c) has not been satisfied due to the
failure to obtain the necessary consents and approvals under applicable
Governmental Regulations and Arch or PageNet are still attempting to obtain
such necessary consents and approvals under applicable Governmental
Regulations or are contesting the refusal of the relevant Government
Entities to give such consents or approvals in court or through other
applicable proceedings; (ii) the PageNet Stockholders Meeting and the Arch
Stockholders Meeting shall have been held and completed, but the PageNet
Stockholders Approval or the Arch Stockholders Approval, to the extent
required by Section 7.1(a), shall not have occurred; or (iii) any Order
permanently restraining, enjoining or otherwise prohibiting consummation of
the Merger shall become final and non-appealable (whether before or after
the PageNet Stockholders Approval or the Arch Stockholders Approval);
provided, further, that the right to terminate this Agreement pursuant to
clause (i) above shall not be available to any party that has breached in
any material respect its obligations under this Agreement in any manner
that shall have proximately contributed to the failure of the Merger to be
consummated.
8.3. Termination by PageNet. This Agreement may be terminated and
the Merger may be abandoned at any time prior to the Effective Time, before
or after the PageNet Stockholder Approval referred to in Section 7.1(a), by
action of the Board of Directors of PageNet if:
(a) the Board of Directors of Arch shall have withdrawn or
adversely modified its approval or recommendation of this Agreement;
(b) there has been a breach by Arch or Merger Sub of any
representation, warranty, covenant or agreement contained in this
Agreement which both: (i) would result in a failure of a condition
set forth in Section 7.3(a) or 7.3(b); and (ii) cannot be or is
not cured prior to the Termination Date;
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(c) PageNet has received a Superior Proposal, has
otherwise complied with the requirements of Section 6.2, provides
Arch with all of the material terms of Superior Proposal at least
two business days prior to termination and simultaneously with
such termination pays to Arch the Arch Termination Fee required by
Section 8.5(c); or
(d) pursuant to Section 6.19(a)(ii), PageNet shall not
file the Bankruptcy Case and seek confirmation of the Prepackaged
Plan by the Bankruptcy Court and simultaneously pays to Arch the
Arch Termination Fee.
8.4. Termination by Arch. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time, before or
after the Arch Stockholder Approval referred to in Section 7.1(a), by
action of the Board of Directors of Arch if:
(a) the Board of Directors of PageNet shall have
withdrawn or adversely modified its approval or recommendation of
this Agreement to do so;
(b) there has been a breach by PageNet of any
representation, warranty, covenant or agreement contained in this
Agreement which both: (i) would result in a failure of a condition
set forth in Section 7.2(a) or 7.2(b); and (ii) cannot be or is
not cured prior to the Termination Date, other than a breach that
results solely from the filing or conduct of the Bankruptcy Case
consistent with the terms of this Agreement or solely from the
occurrence of an Involuntary Insolvency Event with respect to
PageNet;
(c) the Initial Merger Order has not been entered within
30 days of the commencement of the Bankruptcy Case;
(d) the Final Confirmation Order is not entered within
the time permitted by Section 6.19(a);
(e) the Prepackaged Plan is amended, modified or added
to in violation of Section 6.19(b); or
(f) Arch has received a Superior Proposal, has otherwise
complied with the requirements of Section 6.2, provides PageNet
with all of the material terms of the Superior Proposal at least
two business days prior to such termination and simultaneously
pays to PageNet the PageNet Termination Fee required by Section
8.5(b).
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8.5. Effect of Termination and Abandonment.
(a) In the event of termination of this Agreement and the
abandonment of the Merger pursuant to this Article VIII, this
Agreement (other than as set forth in Section 9.1) shall become
void and of no effect with no liability (other than as set forth
in Section 8.5(b) or (c), or in the proviso at the end of this
sentence) on the part of any party to this Agreement or of any of
its directors, officers, employees, agents, legal or financial
advisors or other representatives; provided, however, no such
termination shall relieve any party to this Agreement from any
liability for damages resulting from any breach of this Agreement.
(b) In the event that: (i) an Acquisition Proposal shall
have been made to Arch or have been made directly to Arch'
stockholders or noteholders generally or any Person shall have
publicly announced an intention (whether or not conditional) to
make an Acquisition Proposal and thereafter: (A) Arch'
stockholders do not adopt this Agreement or the other transactions
contemplated hereby at the Arch Stockholders Meeting or Arch'
noteholders do not satisfy the Arch Minimum Condition with respect
to the Arch Notes; (B) this Agreement is terminated by either Arch
or PageNet pursuant to the terms of this Agreement and (C) Arch
enters into an agreement with a third party with respect to an
Acquisition Proposal within 12 months of the termination of this
Agreement; (ii) this Agreement is terminated by PageNet pursuant
to Section 8.3(a) or (b) provided that, with respect to Section
8.3(b), it is terminated solely with respect to a breach of (A)
Section 6.2 or (B) Section 6.5 (but, only with respect to Arch'
obligation in accordance with such Section to duly convene and
complete the Arch Stockholders Meeting regarding the adoption of
this Agreement and the matters set forth in Section 6.5(b) of this
Agreement); or (iii) this Agreement is terminated by Arch pursuant
to Section 8.4(f), then Arch and its Subsidiaries (jointly and
severally) shall pay PageNet a fee equal to $40.0 million (the
"PageNet Termination Fee"), which amount shall be in addition to
any expenses to be paid pursuant to Section 6.12, payable by wire
transfer of same day funds. A PageNet Termination Fee payable
pursuant to Section 8.5(b)(i), or (ii) shall be paid no later than
two days after the date of termination and a PageNet Termination
Fee payable pursuant to Section 8.5(b)(iii) shall be paid
simultaneously with (and such payment shall be a condition of)
termination pursuant to Section 8.4(f). Arch acknowledges that the
agreements contained in this Section 8.5(b) are an integral part
of the transactions contemplated by this Agreement, and that,
without these agreements, PageNet would not enter into this
Agreement. Accordingly, if Arch fails to pay promptly the amount
due pursuant to this Section 8.5(b), and, in order to obtain such
payment, PageNet commences a suit which results in a judgment
against Arch for the fee set forth in this paragraph (b), Arch
shall pay to PageNet its costs and expenses (including attorneys'
fees) in connection with such suit, together with interest on the
amount of the fee at the prime rate of Citibank N.A. in effect on
the date such payment was required to be made.
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(c) In the event that: (i) an Acquisition Proposal shall
have been made to PageNet or have been made directly to PageNet's
stockholders or noteholders generally or any Person shall have
publicly announced an intention (whether or not conditional) to
make an Acquisition Proposal and thereafter: (A) PageNet's
stockholders do not adopt this Agreement or the other transactions
contemplated hereby at the PageNet Stockholders Meeting or
PageNet's noteholders do not satisfy the PageNet Minimum Condition
with respect to the PageNet Notes, and the Bankruptcy Court fails
to enter the Final Confirmation Order which would otherwise enable
the transactions set forth in this Agreement to occur without
approval by the holders of PageNet Shares; (B) this Agreement is
terminated by either Arch or PageNet pursuant to the terms of this
Agreement and (C) either (x) PageNet executes and delivers an
agreement with respect to an Acquisition Proposal or (y) an
Acquisition Proposal with respect to PageNet is consummated, in
either case, within 12 months of the date this Agreement is
terminated; (ii) this Agreement is terminated by Arch pursuant to
Section 8.4(a) or (b) provided that, with respect to Section
8.4(b), it is terminated solely with respect to a breach of (A)
Section 6.2 or (B) Section 6.5 (but, only with respect to
PageNet's obligation in accordance with such Section to duly
convene and complete the PageNet Stockholders Meeting (unless the
Bankruptcy Case has commenced or PageNet has stipulated to
bankruptcy relief after the occurrence of an Involuntary
Insolvency Event pursuant to Section 6.19(a)(iv) hereof) regarding
the adoption of this Agreement and the approval of the matters set
forth in Section 6.5(a) of this Agreement); (iii) the Prepackaged
Plan is withdrawn without the prior written consent of Arch, or
PageNet files any other plan of reorganization or amends, modifies
or adds to any material provision of the Prepackaged Plan in each
case without the prior written consent of Arch; (iv) any other
plan of reorganization filed by a person other than PageNet is
confirmed by the Bankruptcy Court; (v) PageNet files a motion to
sell or otherwise transfer all or a substantial portion of its
assets as part of a sale pursuant to Section 363 of the Bankruptcy
Code without the prior written consent of Arch; or (vi) this
Agreement is terminated by PageNet pursuant to Section 8.3(c) or
(d), then PageNet and its Subsidiaries (jointly and severally)
shall pay Arch a fee equal to $40.0 million (the "Arch Termination
Fee"), which amount shall be in addition to any expenses to be
paid pursuant to Section 6.12, payable by wire transfer of same
day funds. A Arch Termination Fee payable pursuant to Section
8.5(c)(i), (ii), (iii), (iv) or (v) shall be paid no later than
two days after the date of termination and a Arch Termination Fee
payable pursuant to Section 8.5(c)(vi) shall be paid
simultaneously with (and such payment shall be a condition of)
termination pursuant to Section 8.3(c) or (d). PageNet
acknowledges that the agreements contained in this Section 8.5(c)
are an integral part of the transactions contemplated by this
Agreement, and that, without these agreements, Arch and Merger Sub
would not enter into this Agreement. Accordingly, if PageNet fails
to pay promptly the amount due pursuant to this Section 8.5(c)
(and in any case in which the Bankruptcy Case has been commenced,
the Initial Merger Order approves this provision), and, in order
to obtain such payment, Arch commences a suit which results in a
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judgment against PageNet for the fee set forth in this paragraph
(c), PageNet shall pay to Arch its costs and expenses (including
attorneys' fees) in connection with such suit, together with
interest on the amount of the fee at the prime rate of Citibank
N.A. in effect on the date such payment was required to be made.
ARTICLE IX.
Miscellaneous and General
9.1. Survival. Article II, Article III, Article IV and this
Article IX (other than Section 9.4 (Counterparts)), and the agreements of
PageNet, Arch and Merger Sub contained in Sections 6.8 (Affiliates), 6.11
(Benefits), 6.12 (Expenses) and 6.13 (Indemnification; Directors' and
Officers' Insurance) shall survive the consummation of the Merger. This
Article IX (other than Section 9.2 (Modification or Amendment), Section 9.3
(Waiver of Conditions) and Section 9.13 (Assignment)) and the agreements of
PageNet, Arch and Merger Sub contained in Section 6.12 (Expenses), Section
6.14 (Takeover Statute), Section 6.15 (Confidentiality) and Section 8.5
(Effect of Termination and Abandonment) shall survive the termination of
this Agreement. All other representations, warranties, covenants and
agreements in this Agreement shall not survive the consummation of the
Merger or the termination of this Agreement.
9.2. Modification or Amendment. Subject to the provisions of the
applicable law, at any time prior to the Effective Time, the parties to
this Agreement may modify or amend this Agreement, by written agreement
executed and delivered by duly authorized officers of the respective
parties.
9.3. Waiver of Conditions.
(a) Any provision of this Agreement may be waived prior
to the Effective Time if, and only if, such waiver is in writing
and signed by an authorized representative or the party against
whom the waiver is to be effective.
(b) No failure or delay by any party in exercising any
right, power or privilege under this Agreement shall operate as a
waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of
any other right, power or privilege. Except as otherwise provided
in this Agreement, the rights and remedies herein provided shall
be cumulative and not exclusive of any rights or remedies provided
by Law.
9.4. Counterparts. This Agreement may be executed in any number of
counterparts, each such counterpart being deemed to be an original
instrument, and all such counterparts shall together constitute the same
agreement.
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9.5. Governing Law and Venue; Waiver of Jury Trial.
(a) This Agreement shall be deemed to be made in and in
all respects shall be interpreted, construed, and governed by, and
in accordance with, the substantive laws of the State of Delaware,
without regard to the conflict of law principles thereof. The
parties hereby irrevocably and unconditionally consent to submit
to the exclusive jurisdiction of the courts of the State of
Delaware and of the United States of America located in
Wilmington, Delaware, including the U.S. Bankruptcy Court for the
District of Delaware (the "Delaware Courts"), for any litigation
arising out of or relating to this Agreement or the Prepackaged
Plan and the transactions contemplated by this Agreement (and
agree not to commence any litigation relating thereto except in
such Delaware Courts), waive any objection to the laying of venue
of any such litigation in the Delaware Courts and agree not to
plead or claim in any Delaware Court that such litigation brought
therein has been brought in an inconvenient forum.
(b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO
INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE, EACH SUCH
PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH
PARTY MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF, OR RELATING TO, THIS
AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT: (i) NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER; (ii) EACH SUCH
PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS
WAIVER; (iii) EACH PARTY MAKES THIS WAIVER VOLUNTARILY; AND (iv)
EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 9.5.
9.6. Notices. Notices, requests, instructions or other documents
to be given under this Agreement shall be in writing and shall be deemed
given: (i) when sent if sent by facsimile, provided that receipt of the fax
is promptly confirmed by telephone; (ii) when delivered, if delivered
personally to the intended recipient; and (iii) one business day later, if
sent by overnight delivery via a national courier service, and in each
case, addressed to a party at the following address for such party:
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If to Arch or Merger Sub:
Arch Communications Group, Inc.
1800 West Park Drive, Suite 250
Westborough, Massachusetts 01581
Attention: Chief Executive Officer
Fax: (508) 870-6076
with a copy to:
Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
Attention: Jay E. Bothwick
Fax: (617) 526-5000
and if to PageNet:
Paging Network, Inc.
14911 Quorum Drive
Dallas, Texas 75240
Attention: Chief Executive Officer
Fax: (972) 801-8950
and
Paging Network, Inc.
14911 Quorum Drive
Dallas, Texas 75240
Attention: Senior Vice President and General Counsel
Fax: (972) 801-8978
with a copy to:
Mayer, Brown & Platt
190 South LaSalle Street
Chicago, Illinois 60603-3441
Attention: John R. Schmidt
Fax: (312) 701-7711
or to such other persons or addresses as may be designated in writing by
the party to receive such notice as provided above.
9.7. Entire Agreement. This Agreement (including any exhibits and
annexes to this Agreement), Series C Consent Agreement, the Confidentiality
Agreement, the PageNet Disclosure Letter, and the Arch Disclosure Letter
constitute the entire agreement, and supersede all other prior agreements,
understandings, representations and warranties, both written and oral,
among the parties with respect to the subject matter of this Agreement.
63
<PAGE>
EACH PARTY TO THIS AGREEMENT AGREES THAT, EXCEPT FOR THE REPRESENTATIONS
AND WARRANTIES CONTAINED IN THIS AGREEMENT, NEITHER ARCH AND MERGER SUB NOR
PAGENET MAKES ANY REPRESENTATIONS OR WARRANTIES, AND EACH HEREBY DISCLAIMS
ANY OTHER REPRESENTATIONS OR WARRANTIES MADE BY ITSELF OR ANY OF ITS
OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, FINANCIAL AND LEGAL ADVISORS OR
OTHER REPRESENTATIVES, WITH RESPECT TO THE EXECUTION AND DELIVERY OF THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT,
NOTWITHSTANDING THE DELIVERY OR DISCLOSURE TO THE OTHER PARTY OR THE OTHER
PARTY'S REPRESENTATIVES OF ANY DOCUMENTATION OR OTHER INFORMATION WITH
RESPECT TO ANY ONE OR MORE OF THE FOREGOING.
9.8. No Third Party Beneficiaries. Except as provided in Section
6.11 (Benefits), and Section 6.13 (Indemnification; Directors' and
Officers' Insurance), this Agreement is not intended to confer upon any
Person other than the parties to this Agreement any rights or remedies
under this Agreement.
9.9. Obligations of Arch and of PageNet. Whenever this Agreement
requires a Subsidiary of Arch to take any action, such requirement shall be
deemed to include an undertaking on the part of Arch to cause such
Subsidiary to take such action. Whenever this Agreement requires a
Subsidiary of PageNet to take any action, such requirement shall be deemed
to include an undertaking on the part of PageNet to cause such Subsidiary
to take such action and, after the Effective Time, on the part of the
Surviving Corporation to cause such Subsidiary to take such action.
9.10. Severability. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision
shall not affect the validity or enforceability or the other provisions of
this Agreement. If any provision of this Agreement, or the application
thereof to any Person or any circumstance, is invalid or unenforceable: (a)
a suitable and equitable provision shall be substituted therefor in order
to carry out, so far as may be valid and enforceable, the intent and
purpose of such invalid or unenforceable provision; and (b) the remainder
of this Agreement and the application of such provision to other Persons or
circumstances shall not be affected by such invalidity or unenforceability,
nor shall such invalidity or unenforceability affect the validity or
enforceability of such provision, or the application thereof, in any other
jurisdiction.
9.11. Interpretation. Where a reference in this Agreement is made
to a section or exhibit, such reference shall be to a section of, or
exhibit or annex to this Agreement unless otherwise indicated. Whenever the
words "include," "includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation."
9.12. Captions. The table of contents, article, section, and
paragraph captions in this Agreement are for convenience of reference only,
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do not constitute part of this Agreement and shall not be deemed to limit
or otherwise affect any of the provisions of this Agreement.
9.13. Assignment. This Agreement shall not be assignable by
operation of law or otherwise, provided, that the parties agree that this
Agreement may be assumed by PageNet as a debtor-in-possession in the
Bankruptcy Case and may be assumed by Arch should Arch become a debtor in
any bankruptcy case under the Bankruptcy Code. Any assignment in
contravention of the preceding sentence shall be null and void.
* * * * *
65
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officers of the parties to this Agreement
as of the date first written above.
PAGING NETWORK, INC.
By: /s/ John P. Frazee, Jr.
--------------------------------------
Name: John P. Frazee, Jr.
Title: Chairman of the Board and
Chief Executive Officer
ARCH COMMUNICATIONS GROUP, INC.
By: /s/ C.E. Baker, Jr.
---------------------------------------
Name: C.E. Baker, Jr.
Title: Chairman of the Board and
Chief Executive Officer
ST. LOUIS ACQUISITION CORP.
By: /s/ C.E. Baker, Jr.
--------------------------------------
Name: C.E. Baker, Jr.
Title: Chief Executive Officer
66
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EXHIBIT A
CERTIFICATE OF INCORPORATION
OF
PAGING NETWORK, INC.
FIRST. The name of the Corporation is: Paging Network, Inc.
SECOND. The address of its registered office in the State of
Delaware is Corporation Trust Center, 1209 Orange Street, in the City of
Wilmington, County of New Castle. The name of its registered agent at such
address is The Corporation Trust Company.
THIRD. The nature of the business or purposes to be conducted or
promoted by the Corporation is as follows:
To engage in any lawful act or activity for which corporations may
be organized under the General Corporation Law of Delaware.
FOURTH. The total number of shares of stock which the Corporation
shall have authority to issue is 1,000 shares of Common Stock, $0.01 par
value per share.
The number of authorized shares of Common Stock may be increased
or decreased (but not below the number of shares thereof then outstanding)
by the affirmative vote of the holders of a majority of the stock of the
Corporation entitled to vote, irrespective of the provisions of Section
242(b)(2) of the General Corporation Law of Delaware.
FIFTH. The name and mailing address of the sole incorporator are
as follows:
NAME MAILING ADDRESS
- ---- ---------------
C. Edward Baker, Jr. 1800 West Park Drive, Suite 250, Westborough,
MA 01581
SIXTH. In furtherance of and not in limitation of powers conferred
by statute, it is further provided:
<PAGE>
1. Election of directors need not be by written ballot.
2. The Board of Directors is expressly authorized to
adopt, amend or repeal the Bylaws of the Corporation.
SEVENTH. Except to the extent that the General Corporation Law of
Delaware prohibits the elimination or limitation of liability of directors
for breaches of fiduciary duty, no director of the Corporation shall be
personally liable to the Corporation or its stockholders for monetary
damages for any breach of fiduciary duty as a director, notwithstanding any
provision of law imposing such liability. No amendment to or repeal of this
provision shall apply to or have any effect on the liability or alleged
liability of any director of the Corporation for or with respect to any
acts or omissions of such director occurring prior to such amendment.
EIGHTH. The Corporation shall, to the fullest extent permitted by
Section 145 of the General Corporation Law of Delaware, as amended from
time to time, indemnify each person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was, or has agreed to become, a director
or officer of the Corporation, or is or was serving, or has agreed to
serve, at the request of the Corporation, as a director, officer or trustee
of, or in a similar capacity with, another corporation, partnership, joint
venture, trust or other enterprise (including any employee benefit plan)
(all such persons being referred to hereafter as an "Indemnitee"), or by
reason of any action alleged to have been taken or omitted in such
capacity, against all expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by or
on behalf of an Indemnitee in connection with such action, suit or
proceeding and any appeal therefrom.
As a condition precedent to his right to be indemnified, the
Indemnitee must notify the Corporation in writing as soon as practicable of
any action, suit, proceeding or investigation involving him for which
indemnity will or could be sought. With respect to any action, suit,
proceeding or investigation of which the Corporation is so notified, the
Corporation will be entitled to participate therein at its own expense
and/or to assume the defense thereof at its own expense, with legal counsel
reasonably acceptable to the Indemnitee.
In the event that the Corporation does not assume the defense of
any action, suit, proceeding or investigation of which the Corporation
receives notice under this Article, the Corporation shall pay in advance of
the final disposition of such matter any expenses (including attorneys'
fees) incurred by an Indemnitee in defending a civil or criminal action,
suit, proceeding or investigation or any appeal therefrom; provided,
however, that the payment of such expenses incurred by an Indemnitee in
advance of the final disposition of such matter shall be made only upon
receipt of an undertaking by or on behalf of the Indemnitee to repay all
amounts so advanced in the event that it shall ultimately be determined
that the Indemnitee is not entitled to be indemnified by the Corporation as
authorized in this Article, which undertaking shall be accepted without
reference to the financial ability of the Indemnitee to make such
repayment; and further provided that no such advancement of expenses shall
be made if it is determined that
<PAGE>
(I) the Indemnitee did not act in good faith and in a manner he reasonably
believed to be in, or not opposed to, the best interests of the
Corporation, or (ii) with respect to any criminal action or proceeding, the
Indemnitee had reasonable cause to believe his conduct was unlawful.
The Corporation shall not indemnify an Indemnitee seeking
indemnification in connection with a proceeding (or part thereof) initiated
by such Indemnitee unless the initiation thereof was approved by the Board
of Directors of the Corporation. In addition, the Corporation shall not
indemnify an Indemnitee to the extent such Indemnitee is reimbursed from
the proceeds of insurance, and in the event the Corporation makes any
indemnification payments to an Indemnitee and such Indemnitee is
subsequently reimbursed from the proceeds of insurance, such Indemnitee
shall promptly refund such indemnification payments to the Corporation to
the extent of such insurance reimbursement.
All determinations hereunder as to the entitlement of an
Indemnitee to indemnification or advancement of expenses shall be made in
each instance by (a) a majority vote of the directors of the Corporation
consisting of persons who are not at that time parties to the action, suit
or proceeding in question ("disinterested directors"), whether or not a
quorum, (b) a majority vote of a quorum of the outstanding shares of stock
of all classes entitled to vote for directors, voting as a single class,
which quorum shall consist of stockholders who are not at that time parties
to the action, suit or proceeding in question, (c) independent legal
counsel (who may, to the extent permitted by law, be regular legal counsel
to the Corporation), or (d) a court of competent jurisdiction.
The indemnification rights provided in this Article (I) shall not
be deemed exclusive of any other rights to which an Indemnitee may be
entitled under any law, agreement or vote of stockholders or disinterested
directors or otherwise, and (ii) shall inure to the benefit of the heirs,
executors and administrators of the Indemnitees. The Corporation may, to
the extent authorized from time to time by its Board of Directors, grant
indemnification rights to other employees or agents of the Corporation or
other persons serving the Corporation and such rights may be equivalent to,
or greater or less than, those set forth in this Article.
NINTH. The Corporation reserves the right to amend, alter, change
or repeal any provision contained in this Certificate of Incorporation, in
the manner now or hereafter prescribed by statute and this Certificate of
Incorporation, and all rights conferred upon stockholders herein are
granted subject to this reservation.
----------------------------
C. Edward Baker, Jr.
Sole Incorporator
<PAGE>
EXHIBIT B
AMENDMENT NO. 5 TO RIGHTS AGREEMENT
This Amendment No. 5 dated November __, 1999 hereby amends the
Rights Agreement originally dated as of October 13, 1995, as amended on
June 29, 1998, August 18, 1998, September 3, 1998 and May 14, 1999 (the
"Agreement"), between Arch Communications Group, Inc., a Delaware
corporation (the "Company"), and The Bank of New York, a national banking
association, as Rights Agent (the "Rights Agent").
W I T N E S S E T H:
WHEREAS, no Person has become an Acquiring Person as such terms are
defined in the Agreement; and
WHEREAS, the Company has directed the Rights Agent to enter into this
Amendment No. 5 pursuant to Section 27 of the Agreement;
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, the parties hereby agree as follows:
1. Section 1(ii) of the Agreement is hereby deleted in its entirety and the
following substituted in lieu thereof:
(ii) "Exempted Person" shall mean, prior to the Ranger/St. Louis
Effective Time (as defined below): (A) W. R. Huff Asset Management
Co., L.L.C., together with its Affiliates (collectively, "Huff"),
unless and until such time as Huff, directly or indirectly,
becomes the Beneficial Owner of Common Stock in excess of the Huff
Exempt Threshold (as defined below), in which event Huff
immediately shall cease to be an Exempted Person; (B) Whippoorwill
Associates, Inc., together with its Affiliates, including, without
limitation, any accounts and investment funds managed by it or its
Affiliates (collectively, "Whippoorwill"), unless and until such
time as Whippoorwill, directly or indirectly, becomes the
Beneficial Owner of Common Stock in excess of the Whippoorwill
Exempt Threshold (as defined below), in which case Whippoorwill
immediately shall cease to be an Exempted Person; (C) Resurgence
Asset Management, L.L.C., together with its Affiliates
(collectively, "Resurgence"), unless and until such time as
Resurgence, directly or indirectly, becomes the Beneficial Owner
of Common Stock in excess of the Resurgence Exempt Threshold (as
defined below), in which event Resurgence immediately shall cease
to be an Exempted Person. "Exempted Person" shall mean, on or
after the Ranger/St. Louis Effective Time, any Person that
acquires shares of Common Stock ("Merger Shares") in exchange for
shares of common stock of Ranger upon the consummation of the
merger between Ranger and the Company pursuant to that
<PAGE>
Agreement and Plan of Merger between Ranger and St. Louis dated as
of November __, 1999 as the same may be amended (the "Ranger/St.
Louis Merger Agreement") unless and until such time as such
Person, directly or indirectly becomes the Beneficial Owner of
Common Stock in excess of the Merger Exempt Threshold (as defined
below). For purposes of this Agreement: (A) the Huff Exempt
Threshold shall mean 23.9% of the Common Stock then outstanding;
(B) the Whippoorwill Exempt Threshold shall mean 21.3% of the
Common Stock then outstanding; (C) the Resurgence Exempt Threshold
shall mean 19.0% of the Common Stock then outstanding; and (D) the
Merger Exempt Threshold shall mean 20.0% of the Common Stock then
outstanding (provided that a majority of the shares of Common
Stock Beneficially Owned by such Person are Merger Shares). For
purposes of this Agreement, the Huff Exempt Threshold, the
Whippoorwill Exempt Threshold, the Resurgence Exempt Threshold and
the Merger Exempt Threshold are collectively referred to herein as
the "Exempt Threshold." For purposes of this Section 1(ii): (A)
none of Huff, CS First Boston, Whippoorwill or Northwestern Mutual
shall be deemed the Beneficial Owner of any shares of Common Stock
that are Beneficially Owned by any other Person solely as a result
of any such Person's execution and performance of any Standby
Purchase Commitment (as such term is defined in the Plan and
Agreement of Merger between the Company, Farm Team Corp., a
wholly-owned Subsidiary of the Company, MobileMedia Corporation
and MobileMedia Communications, Inc., dated as of August 18, 1998)
(as it may be amended from time to time, the "Merger Agreement");
(B) no Person shall be deemed the Beneficial Owner of any shares
of Common Stock that are Beneficially Owned by any other Person
solely as a result of such Person's, or such other Person's
service as a member of any committee or working group of
debtholders of St. Louis or Ranger; and (C) Common Stock shall be
deemed to include shares of Common Stock issuable upon conversion
of shares of the Company's Series C Convertible Preferred Stock,
$.01 par value per share. For purposes of this Agreement the
Effective Time shall have the meaning ascribed to such term in the
Merger Agreement and Ranger/St. Louis Effective Time shall mean
the Effective Time of the Merger as determined pursuant to the
Ranger/St. Louis Merger Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Amendment No. 5
to be duly executed and their respective corporate seals to be hereunto
affixed and attested as of the day and year first written above.
ARCH COMMUNICATIONS GROUP, INC.
Attest:
_____________________________ By:___________________________________
Name: J. Roy Pottle Name: C.E. Baker, Jr.
Title: Executive Vice President Title: Chairman of the Board and
and Chief Financial Officer Chief Executive Officer
Seal
THE BANK OF NEW YORK
Attest:
______________________________ By:___________________________________
Name: Name:
Title: Title:
Seal
<PAGE>
EXHIBIT C
STOCKHOLDER AGREEMENT
This STOCKHOLDER AGREEMENT, dated as of ___________, ____ (this
"Agreement") is between Arch Communications Group, Inc., a Delaware
corporation ("Arch"), and the undersigned stockholder ("Stockholder") of
Paging Network, Inc., a Delaware corporation (the "Company"). Capitalized
terms not otherwise defined in this Agreement have the meanings ascribed to
them in the Merger Agreement (as defined below).
RECITALS
A. Arch, the Company and St. Louis Acquisition Corp., a Delaware
corporation and a wholly owned subsidiary of Arch ("Merger Sub"), have
entered into an Agreement and Plan of Merger, dated as of November 7, 1999
(the "Merger Agreement"), pursuant to which Merger Sub will merge with and
into the Company (the "Merger"), with the Company surviving the Merger;
B. Pursuant to the Merger Agreement, at the Effective Time,
outstanding shares of Company Common Stock, including any Company Common
Stock owned by Stockholder, will be converted into the right to receive
shares of Arch Common Stock;
C. It is a condition to each party's obligation to effect the
Merger that legal counsel to the Company and Arch shall have delivered
their respective opinions to the effect that the Merger will constitute a
reorganization within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended (the "Code"), and Arch, and the Company each will
be a party to the reorganization within the meaning of Section 368(b) of
the Code.
D. The execution and delivery of this Agreement by Stockholder is
a material inducement to Arch, Merger Sub and the Company to enter into the
Merger Agreement; and
E. Stockholder has been advised that Stockholder may be deemed to
be an "affiliate" of the Company, as such term is used for purposes of
paragraphs (c) and (d) of Rule 145 of the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended
(the "Act"), although nothing contained herein shall be construed as an
admission by Stockholder that Stockholder is in fact an affiliate of the
Company.
NOW, THEREFORE, intending to be legally bound, the parties agree
as follows:
1. Acknowledgments by Stockholder. Stockholder acknowledges and
understands that the representations, warranties and covenants made by
Stockholder set forth in this Agreement will be relied upon by Arch, Merger
Sub, the Company and their respective affiliates, counsel and accounting
firms, and that substantial losses and damages may be incurred by such
1
<PAGE>
persons if Stockholder's representations, warranties or covenants are
breached. Stockholder has carefully read this Agreement and the Merger
Agreement and has consulted with such legal counsel and financial advisers
as Stockholder has deemed appropriate in connection with the execution of
this Agreement.
2. Compliance with Rule 145 and the Act.
(a) Stockholder has been advised that (i) the issuance of
shares of Arch Common Stock in connection with the Merger is expected to be
effected pursuant to a Registration Statement filed by Arch on Form S-4,
and the resale of such shares will be subject to the restrictions set forth
in Rule 145 under the Act unless such shares are otherwise transferred
pursuant to an effective registration statement under the Act or an
appropriate exemption from registration, and (ii) Stockholder may be deemed
to be an affiliate of the Company, although nothing contained herein shall
be construed as an admission by Stockholder that Stockholder is an
affiliate of the Company. Stockholder agrees not to sell, pledge, transfer
or otherwise dispose of any shares of Arch Common Stock issued to
Stockholder in the Merger unless (i) such sale, pledge, transfer or other
disposition is made in conformity with the requirements of Rule 145 under
the Act, (ii) such sale, pledge, transfer or other disposition is made
pursuant to an effective registration statement under the Act, or (iii)
Stockholder delivers to Arch a written opinion of counsel, in form and
substance reasonably acceptable to Arch, or a "no-action" letter obtained
from the staff of the Commission, to the effect that such sale, pledge,
transfer or other disposition is otherwise exempt from registration under
the Act.
(b) Arch will give stop transfer instructions to its
transfer agent with respect to any Arch Common Stock received by
Stockholder pursuant to the Merger, and there will be placed on the
certificates representing such Arch Common Stock, or any substitutions
therefor, legends stating in substance:
"THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A
TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE SECURITIES ACT
OF 1933 APPLIES, AND MAY ONLY BE TRANSFERRED IN CONFORMITY WITH
RULE 145, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT, OR IN
ACCORDANCE WITH A WRITTEN OPINION OF COUNSEL, REASONABLY
ACCEPTABLE TO THE ISSUER, IN FORM AND SUBSTANCE TO THE EFFECT THAT
SUCH TRANSFER IS EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT
OF 1933."
and
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED,
SOLD, PLEDGED, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN
ACCORDANCE WITH THE REQUIREMENTS OF THE CONDITIONS SPECIFIED IN
THE STOCKHOLDER AGREEMENT DATED AS OF NOVEMBER 7, 1999 BETWEEN THE
HOLDER OF THIS CERTIFICATE AND ARCH COMMUNICATIONS GROUP,
2
<PAGE>
INC., A COPY OF WHICH AGREEMENT MAY BE INSPECTED BY THE HOLDER OF
THIS CERTIFICATE AT THE PRINCIPAL OFFICES OF ARCH COMMUNICATIONS
GROUP, INC. OR FURNISHED BY ARCH COMMUNICATIONS GROUP, INC. TO
THE HOLDER OF THIS CERTIFICATE UPON WRITTEN REQUEST AND WITHOUT
CHARGE."
The legends set forth above shall be removed (by delivery of a substitute
certificate without such legends), and Arch shall promptly so instruct its
transfer agent, if a registration statement respecting the sale of the
shares has been declared effective under the Act or if Arch is provided (i)
satisfactory written evidence that the shares have been sold in compliance
with Rule 145 (in which case, the substitute certificate will be issued in
the name of the transferee), (ii) an opinion of counsel, in form and
substance reasonably acceptable to Arch, or (iii) a "no-action" letter
obtained from the staff of the Commission to the effect that sale of the
shares by the holder thereof is no longer subject to Rule 145 or
Stockholder was not at the time of the Merger an affiliate of the Company.
3. Miscellaneous.
(a) This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same document.
(b) This Agreement shall be enforceable by, and shall
inure to the benefit of and be binding upon, the parties and their
respective successors and assigns. As used in this Agreement, the term
"successors and assigns" means, where the context to permits, heirs,
executors, administrators, trustees and successor trustees, and personal
and other representatives.
(c) This Agreement shall be deemed to be made in and in
all respects shall be interpreted, construed and governed by and in
accordance with Delaware law without regard to the conflict of law
principles thereof. The parties irrevocably and unconditionally consent to
submit to the exclusive jurisdiction of the courts of the State of Delaware
and of the United States of America located in Wilmington, Delaware (the
"Delaware Courts") for any litigation arising out of or relating to this
Agreement and the transactions contemplated by this Agreement (and agree
not to commence any litigation relating thereto except in such Delaware
Courts), waive any objection to the laying of venue of any such litigation
in the Delaware Courts and agree not to plead or claim in any Delaware
Court that such litigation brought therein has been brought in an
inconvenient forum.
(d) If any term, provision, covenant, or restriction
contained in this Agreement is held by a court or a federal or state
regulatory agency of competent jurisdiction to be invalid, void, or
unenforceable, the remainder of the terms, provisions, covenants, and
restrictions contained in this Agreement shall remain in full force and
effect, and shall in no way be affected, impaired, or invalidated.
(e) Counsel to the parties to the Merger Agreement shall
be entitled to rely upon this Agreement as needed.
3
<PAGE>
(f) This Agreement shall not be modified or amended, or
any right waived or any obligations excused, except by a written agreement
signed by both parties.
(g) Notwithstanding any other provision contained in this
Agreement, this Agreement and all obligations under this Agreement shall
terminate upon the termination of the Merger Agreement in accordance with
its terms.
(h) From and after the Effective Time of the Merger and
as long as is necessary in order to permit Stockholder to sell Arch Common
Stock held by Stockholder pursuant to Rule 145 and, to the extent
applicable, Rule 144 under the Act, Arch will file on a timely basis all
reports required to be filed by it pursuant to the Securities Exchange Act
of 1934, as amended, and the rules and regulations thereunder, as the same
shall be in effect at the time, and shall otherwise make available adequate
public information regarding Arch in such manner as may be required to
satisfy the requirements of paragraph (c) of Rule 144 under the Act.
IN WITNESS WHEREOF, this Agreement is executed as of the date
first stated above.
ARCH COMMUNICATIONS GROUP, INC.,
a Delaware corporation
By:____________________________________
Name:
Title:
STOCKHOLDER
By:____________________________________
Name:
Name of Signatory
(if different from name of Stockholder):
Title of Signatory
(if applicable):_______________________
Number of Shares Owned:________________
Number of Shares Issuable upon
Exercise of Stock Options:_____________
4
NEWS RELEASE
For Immediate Release Contacts:
November 8, 1999 Arch: Robert W. Lougee, Jr. 508-870-6771
PageNet: Scott Baradell (Media) 972-801-8180
Kirk Brewer (Investor) 972-801-8012
ARCH AND PAGENET SIGN MERGER AGREEMENT;
COMPANY TO BE LEADER IN WIRELESS COMMUNICATIONS
Combined Company Will Have Approximately 16 Million Units in Service
With Broadest Portfolio of Products and Service Coverage in North America
Agreement Calls for Recapitalization
To Substantially Enhance Consolidated Balance Sheet
Entity to Spin Off PageNet's Vast Solutions Subsidiary
Westborough, MA and Dallas, TX (November 8, 1999) --- Arch Communications
Group, Inc. (Nasdaq:APGR) and Paging Network, Inc. (Nasdaq:PAGE) (PageNet)
today announced they have signed a definitive agreement to merge the two
companies in a transaction that will create one of the world's largest
wireless communications companies with approximately 16 million units in
service throughout North America.
The transaction will combine PageNet's broad range of wireless products and
new advanced wireless network with Arch's extensive national accounts and
sales presence in major markets nationwide. It will create a wireless
communications leader with estimated annual operating cash flow, prior to
expected cost synergies, of approximately $535 million and annual net
revenues in excess of $1.7 billion, based on third quarter 1999 pro forma
combined operating results of the two companies.
The combined company will retain the name Arch Communications Group, Inc. It
will be headquartered in Westborough but will maintain significant operations
in Dallas.
Among other significant benefits, the merger will give customers of the
combined entity greater access to an expanded range of wireless products
and services, along with greater ubiquity of coverage and reliability with
the consolidation of the two companies' nationwide networks. Expanded
service offerings will include Internet- based wireless information
provided through the two companies' established alliances with such
Internet industry leaders as Bloomberg, CNN, ESPN, Forbes, and Yahoo!, as
well as such advanced services as guaranteed messaging over PageNet's
state-of-the-art broadcast network.
The Boards of Directors of both companies have approved the merger
agreement, which requires a recapitalization of the combined company. The
recapitalization will include the conversion of $1.2 billion of PageNet
Senior Notes and approximately $384 million (accreted value as of September
30, 1999) of Arch Senior Discount Notes, and approximately $289 million (as
of September 30, 1999) of Arch Series C Convertible Preferred Stock into
common stock of the merged entity. Under the terms of the merger, owners of
common stock of both companies will receive common stock in the combined
company, with shareholders of Arch retaining one share of common stock in
the combined company for each share they currently own, and shareholders of
PageNet receiving 0.1247 share of common stock in the combined company for
each share they currently own of PageNet common stock. In addition, owners
of PageNet's common stock and Senior Notes will receive a pro rata
distribution of 80.5 percent of PageNet's interest in Vast Solutions
(Vast), which will become a separate entity at the merger's close. The
combined company will trade on The Nasdaq National Market under the ticker
symbol "APGR," Arch's current trading symbol.
<PAGE>
Under terms of the merger and proposed recapitalization, the combined
company would have approximately 172.8 million common shares outstanding
upon completion of the transaction, along with total debt of approximately
$1.8 billion, representing a 46 percent reduction in debt from current pro
forma levels. When the merger closes, current holders of PageNet's Senior
Notes would own 44.5 percent of the combined company's common stock, and
current holders of PageNet's common stock would own 7.5 percent of the
combined company's common stock. Current holders of Arch common stock would
own approximately 29.6 percent of the combined company's common stock,
current holders of Arch Senior Discount Notes would own approximately 17.2
percent of the combined company's common stock, and current holders of
Series C Convertible Preferred shares would own approximately 1.2 percent
of the combined company's common stock. Additional details of the proposed
recapitalization are outlined in the attached Appendix A.
"The benefits of the merger are significant for the stakeholders of both
companies," said John P. Frazee, Jr., PageNet chairman and chief executive
officer. "The wireless messaging business has been ripe for change for the
past several years, as unit growth has slowed and competition has
intensified. Given this environment, we believe the combined company will
be exceptionally well positioned to lead our evolving business into its
next growth phase."
"When the transaction is completed," Frazee added, "the combined company
will have an appropriate capital structure and the financial flexibility
needed to fuel long-term growth. Arch's experience with integrating
acquisitions, especially the operations of MobileMedia, will prove to be
invaluable in maximizing the operational and strategic synergies that we
expect to realize as a result of this merger. After years of building
separate companies on capital bases suited for a rapidly expanding market
for paging, the combined company's proposed capital structure will provide
the opportunity to grow a strong business in today's market, which includes
a broader set of wireless competitors including broadband PCS and other
wireless technologies."
C. Edward Baker, Jr., chairman and chief executive officer of Arch, said,
"On a pro forma basis, the proposed combination would immediately provide
the combined company with more than $1.7 billion in annual revenue and
EBITDA of approximately $535 million, based on third quarter 1999 results.
This level of financial performance, combined with total debt of $1.8
billion upon completion of the recapitalization, would substantially reduce
the combined company's leverage to less than 3.5 times EBITDA. Even before
attaining anticipated synergies, the newly formed company would be free
cash flow positive."
Baker added: "In addition to the operational and financial benefits of the
merger, the two companies' customer bases dovetail very well. We believe
the combination of two very strong distribution vehicles will build a
formidable competitor whose business will extend far beyond the industry's
traditional focus on paging. Both companies have strong brands, and we
intend to quickly determine a branding strategy to maximize our market
potential."
The companies said they currently expect the merger to generate
approximately $80 million in annual cost synergies over a two-year period
from the date of close, driven primarily by a reduction of redundant
functions. The combined company will be organized around a sales force of
more than 2,300 salespeople supported by state-of- the-art customer service
and support platforms.
As part of the transaction, 80.5% of PageNet's interest in Vast will be
distributed to PageNet's bondholders and its existing common stockholders,
while the merged entity will retain the remaining 19.5% interest. The
distribution will enable Vast to be capitalized appropriately for the
nature of its business, while maintaining the advantage of having a strong
corporate partner.
<PAGE>
John P. Frazee, Jr. will be chairman of the Board of Directors of the
combined company. The combined company management team will be led by C.
Edward Baker, Jr. as chief executive officer, Lyndon R. Daniels as
president and chief operating officer, and J. Roy Pottle as executive vice
president and chief financial officer. Daniels and Pottle will retain their
current Arch titles with the combined entity. Mark A. Knickrehm will remain
president and chief operating officer of Vast Solutions.
The companies said they expect the merger, which is subject to customary
regulatory review, shareholder approval, other third-party consents and the
completion of the recapitalization transactions, to be completed during the
first half of 2000. The recapitalization is expected to be accomplished
through a registered exchange offer that is expected to be filed with the
Securities and Exchange Commission within 30 days. PageNet and Arch said
that, in addition to consents for the proposed recapitalization, the merger
agreement permits PageNet to concurrently solicit consents to effectuate
the recapitalization through a "pre-packaged" Chapter 11 reorganization,
which would be contemplated if the required level of participation in the
registered exchange offer is not obtained.
Paging Network, Inc. is a leading provider of wireless messaging and
information services with more than 9 million subscribers in all 50 states,
the District of Columbia, the U.S. Virgin Islands, Puerto Rico and Canada.
The company offers a full range of paging and advanced messaging services,
including guaranteed-delivery messaging, two-way wireless e-mail, and
global messaging. PageNet's wholly owned subsidiary, Vast Solutions, plans
to introduce a variety of customized information services for pagers and
other devices, partnering with content providers such as Yahoo!, CNN,
Bloomberg, ESPN and others. Additionally, Vast Solutions develops
integrated wireless solutions to increase productivity and improve
performance for major corporations. Detailed information for PageNet
services are available on the Internet at www.pagenet.com. Detailed
information about Vast Solutions is available at www.vast.com. PageNet is a
registered trademark of Paging Network, Inc. Other names are trademarks
and/or registered trademarks of their respective owners.
Arch Communications Group, Inc., Westborough, Mass., is a leading U.S.
wireless messaging company with annual revenues in excess of $800 million.
It provides local, regional and nationwide narrowband wireless messaging
services to customers in all 50 states, the District of Columbia and in the
Caribbean. Arch operates approximately 300 offices and company-owned stores
across the country. Additional information on Arch is available on the
Internet at www.arch.com.
Safe harbor statement under the Private Securities Litigation Reform Act of
1995: Statements contained in this news release which are not historical
fact, such as forward-looking statements concerning future financial
performance and growth, involve risks and uncertainties, including those
described in Arch's and PageNet's most recent Annual Report on Form 10-K
and other filings with the Securities and Exchange Commission. Although
Arch and PageNet believe the expectations reflected in any forward- looking
statements are based on reasonable assumptions, they can give no assurance
that their expectations will be attained. Factors that could cause actual
results to differ materially from their expectations include the
recapitalization of the combined companies, challenges of integrating the
businesses of Arch and PageNet, the future capital needs following the
merger, the uncertainty of additional funding, and other risks. Any
forward-looking statements represent the best judgment of both Arch and
PageNet as of the date of this release. The companies disclaim any intent
or obligation to update any forward-looking statements.
<PAGE>
Appendix A
Details of proposed recapitalization (1)
($ millions) Pro Forma Combined (4)
Assumed Common
(9/30/99) Debt Shares %
------- ------ ------ --
Arch Bank Debt $450
Combined Bank Debt $450
PageNet Bank Debt $804
Combined Bank Debt $804
Combined Company
Bank Debt (2) $1,254 $1,254
ACI Senior Notes $493
Combined Senior Notes $493
Arch Convertible
Debentures (5) $5
Combined Convertible
Debentures $5
PageNet Senior Notes $1,200 -
Combined Common Shares 76.9 44.5%
PageNet Common Shares 104 -
Combined Common Shares 13.0 7.5%
PageNet Stakeholder
Interest in
Combined Company 89.9 52.0%
Arch Series C Convertible
Preferred Shares (3) $28 -
Combined Common Shares 2.1 1.2%
Arch Senior
Discount Notes (5) $384 -
Combined Common Shares 29.6 17.2%
Arch Common Shares 51.2
Combined Common Shares 51.2 29.6%
Arch Stakeholder Interest in
Combined Company 82.9 48.0%
Combined Company
Total Debt $3,336 $1,752
Combined Company
Total Shares 172.8 100%
(1) Assumes 100% of existing security holders participate in the
exchange offers contemplated in the recapitalization.
(2) Excludes potential borrowings at closing to pay transaction and other
costs.
(3) On an "as converted" basis.
(4) All references to pro forma
Combined Company common shares and ownership
percentages are based on primary shares only.
(5) Pro forma for debt-for-equity exchange completed after 9/30/99.
