<PAGE> 1
================================================================================
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
-------------------------
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Date of Report (Date of earliest event reported) November 15, 1996 Commission File Number 0-21924
</TABLE>
METROCALL, INC.
(Exact name of registrant)
Delaware 54-1215634
(State of organization) (I.R.S. Employer Identification Number)
6677 Richmond Highway, Alexandria, Virginia 22306
(Address of principal executive offices and zip code)
(703) 660-6677
(Registrant's telephone Number)
================================================================================
<PAGE> 2
ITEM 5. OTHER EVENTS
As previously reported, Metrocall completed the issuance of $40
million of Units on November 15, 1996. The Unit Purchase Agreement,
Certificate of Designation, Number, Powers, Preferences and Relative,
Participating, Optional and Other Rights of Series A Convertible Preferred
Stock of Metrocall, Inc., Warrant Agreement and Registration Rights Agreement
executed by Metrocall in connection with the issuance of the units are filed as
Exhibit 99 to this current report.
ITEM 7. EXHIBITS
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<CAPTION>
EXHIBIT NO.
-----------
<S> <C>
99.1 Unit Purchase Agreement dated as of November 15, 1996
among Metrocall, Inc., and Certain Purchasers
99.2 Certificate of Designation, Numbers, Powers, Preferences
and Relative, Participating, Optional and Other Rights of
Series A Convertible Preferred Stock of Metrocall, Inc.
99.3 Warrant Agreement dated as of November 15, 1996 between
Metrocall, Inc. and The First National Bank of Boston,
Warrant Agent
99.4 Registration Rights Agreement dated as of November 15,
1996 between Metrocall and the Purchasers identified therein
</TABLE>
<PAGE> 3
SIGNATURE
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 hereunto duly authorized.
METROCALL, INC.
BY: /s/ VINCENT D. KELLY
------------------------------------
Vincent D. Kelly
Chief Financial Officer
Dated: November 20, 1996
<PAGE> 4
EXHIBIT INDEX
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<CAPTION>
EXHIBIT NO.
-----------
<S> <C>
99.1 Unit Purchase Agreement dated as of November 15, 1996
among Metrocall, Inc., and Certain Purchasers
99.2 Certificate of Designation, Numbers, Powers, Preferences
and Relative, Participating, Optional and Other Rights of
Series A Convertible Preferred Stock of Metrocall, Inc.
99.3 Warrant Agreement dated as of November 15, 1996 between
Metrocall, Inc. and The First National Bank of Boston,
Warrant Agent
99.4 Registration Rights Agreement dated as of November 15,
1996 between Metrocall and the Purchasers identified therein
</TABLE>
<PAGE> 1
UNIT PURCHASE AGREEMENT
AMONG
METROCALL, INC.
AND
CERTAIN PURCHASERS
DATED AS OF NOVEMBER 15, 1996
<PAGE> 2
TABLE OF CONTENTS
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<CAPTION>
PAGE
----
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ARTICLE I
AUTHORIZATION, PURCHASE AND SALE OF UNITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.01 Authorization of the Preferred Stock and the Units . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
--------------------------------------------------
1.02 Authorization of the Conversion Shares and Warrant Shares . . . . . . . . . . . . . . . . . . . . . . . . 1
---------------------------------------------------------
1.03 Authorization of Additional Preferred Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
--------------------------------------------
1.04 Purchase and Sale of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
--------------------------
(a) The Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
-----------
(b) Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
---------------
ARTICLE II
CERTAIN TERMS OF THE PREFERRED SHARES A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.01 Certain Terms of the Preferred Shares and Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
--------------------------------------------------
2.02 Replacement of Preferred Share Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
-------------------------------------------
2.03 Registration; Transfer; Registration of Transfer and Exchange of Preferred Shares . . . . . . . . . . . . 3
---------------------------------------------------------------------------------
2.04 Form of Preferred Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
------------------------
2.05 PPN Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
---------------
2.06 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
-----
ARTICLE III
CONDITIONS TO CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.01 Conditions to Purchasers' Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
-------------------------------------
(a) Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
------------------------------
(b) Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
-----------
(c) All Proceedings to be Satisfactory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
----------------------------------
(d) A+ Network Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
-----------------
(e) Tender Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
------------
(f) Legal Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
--------------
(g) Necessary Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
------------------
(h) Credit Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
----------------
(i) No Material Adverse Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
--------------------------
(j) Payment of Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
----------------------------
(k) No Injunctions, Restraining Order or Adverse Litigation 8
-------------------------------------------------------
(l) No Violation of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
-------------------
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(m) Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
--------------------
(n) Minimum Purchase of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
-------------------------
(o) Legal Investment; Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
-----------------------------
(p) Voting Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
----------------
(q) Increase in Authorized Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
-----------------------------
(r) Documentation at Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
------------------------
3.02 Conditions to the Company's Obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
---------------------------------------
(a) Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
------------------------------
(b) Purchasers' Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
------------------------
(c) Injunction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
----------
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.01 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
------------
4.02 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
--------------
4.03 Authorization; Validity of Agreement; Company Action . . . . . . . . . . . . . . . . . . . . . . . . . 13
----------------------------------------------------
4.04 Consents and Approvals; No Violations; Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
-----------------------------------------------
4.05 SEC Reports and Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
------------------------------------
4.06 No Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
--------------------------
4.07 Absence of Certain Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
--------------------------
4.08 Employee Benefit Plans; ERISA; Labor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
------------------------------------
4.09 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
----------
4.10 No Default; Compliance with Applicable Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
-------------------------------------------
4.11 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
-----
4.12 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
---------------------
4.13 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
---------
4.14 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
----------------------------
4.15 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
-------
4.16 Nasdaq Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
----------------
ARTICLE V
AFFIRMATIVE COVENANTS OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.01 Financial and Business Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
----------------------------------
5.02 Notice of Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
------------------------
5.03 Consummation of the Merger and Tender Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
-------------------------------------------
5.04 Efforts to Obtain NASDAQ Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
-----------------------------------
5.05 Expiration of Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
-----------------------
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ARTICLE VI
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.01 Representations by Purchasers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
-----------------------------
6.02 Sale of Preferred Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
------------------------
ARTICLE VII
CERTAIN SECURITIES LAW MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7.01 Representations by Purchasers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
-----------------------------
7.02 Restrictions on Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
------------------------
(a) Restrictive Legend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
------------------
(b) Termination of Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
---------------------------
ARTICLE VII
IMISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
8.01 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
---------------
8.02 No Waiver; Cumulative Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
------------------------------
8.03 Amendments, Waiver and Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
-------------------------------
8.04 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
-------
8.05 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
--------
8.06 Binding Effect; Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
--------------------------
8.07 Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
------------------------------------------
8.08 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
------------
8.09 Obligations Several: Independent Nature of Purchasers' Rights 29
--------------------------------------------------------------
8.10 Prior Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
----------------
8.11 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
-------------
8.12 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
--------
8.13 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
------------
8.14 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
------------------
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iii
<PAGE> 5
Index of Defined Terms
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PAGE
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A+ Network . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Basic Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
CERCLA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Certificate of Designation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 12
Conversion Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
Environmental Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
ERISA Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
FCC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
Governmental Entity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8, 14
Indemnified Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
Indemnitees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Material Adverse Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Materials of Environmental Concern . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
MC Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
MC Employee Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
MC ERISA Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
MC Material Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
MC Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
MC Pending Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
MC SEC Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
multiemployer pension plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
Offer Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
Offeree . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
parachute payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
Pending Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Preferred Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
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Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
Restricted Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
SEC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
single employer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Tax Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
Tender Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
the Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
Transfer Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Voting Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
Warrant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Warrant Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Warrant Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
welfare plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
</TABLE>
v
<PAGE> 7
UNIT PURCHASE AGREEMENT
THIS UNIT PURCHASE AGREEMENT (the "Agreement") is made as of November
15, 1996 among METROCALL, INC., a Delaware corporation (the "Company"), and
each of the entities listed on the signature pages and on the Schedule of
Purchasers attached as Exhibit A hereto (together with its respective
successors and assigns, each a "Purchaser" and, collectively, the
"Purchasers").
ARTICLE I
AUTHORIZATION, PURCHASE AND SALE OF UNITS
1.01 Authorization of the Preferred Stock and the Units. Pursuant
to its Amended and Restated Certificate of Incorporation, as amended (the
"Certificate of Incorporation"), the Company has established a class of
preferred stock designated as "Series A Convertible Preferred Stock" and
authorized the issuance of up to 810,000 shares of such preferred stock (each
such share, a "Preferred Share"). The Company has authorized the issuance and
sale to the Purchasers of 159,600 units (the "Units"), each Unit consisting of
one Preferred Share and one warrant (a "Warrant") representing the right to
purchase 18.266 shares of the Company's common stock, par value $.01 (the
"Common Stock").
1.02 Authorization of the Conversion Shares and Warrant Shares.
The Company has authorized and reserved 2,915,254 shares of Common Stock for
issuance upon exercise of the Warrants. The Company has authorized and
reserved 500,000 shares of Common Stock for issuance upon conversion of the
Preferred Shares into Common Stock. The Company's board of directors has
adopted a resolution approving an amendment to the Certificate of Incorporation
to increase the number of authorized shares of Common Stock from 33,500,000
shares to 50,000,000 shares, directing that such amendment be presented to the
holders of Common Stock for a vote at the next meeting of shareholders of the
Company in accordance with applicable Delaware law and recommending that the
holders of Common Stock approve the amendment. The Company will take all
action reasonably necessary or appropriate to solicit and obtain proxies and
votes in favor of the amendment from the holders of the requisite percentage
<PAGE> 8
of the Common Stock. As soon as practicable after the approval of such
amendment by the holders of the Common Stock, the Company will reserve not less
than 15,000,000 shares of Common Stock for issuance upon conversion of the
Preferred Shares. (The shares of Common Stock issuable upon conversion of the
Preferred Shares are referred to as the "Conversion Shares," and the shares of
Common Stock issuable upon exercise of the Warrants are referred to as the
"Warrant Shares.")
1.03 Authorization of Additional Preferred Shares. The Company has
authorized and reserved 650,400 Preferred Shares for issuance in payment of all
dividends on all Preferred Shares which is a sufficient number of Preferred
Shares based on the assumption that all such dividends will be made through the
issuance of additional Preferred Shares. (The Preferred Shares, the Warrants,
the Conversion Shares and the Warrant Shares are sometimes referred to herein
as the "Securities").
1.04 Purchase and Sale of Units.
(a) The Closing. The Company agrees to issue and sell to
each Purchaser, and, subject to and in reliance upon the representations,
warranties, terms and conditions of this Agreement, each Purchaser agrees to
purchase, the number of Units set forth next to such Purchaser's name on
Exhibit A hereto for a purchase price (the "Purchase Price") of $250 per Unit.
Such purchase and sale shall take place at a closing (the "Closing") to be held
on November 15, 1996 (the "Closing Date") at 9:00 a.m. Eastern Time, or on such
other date and at such time as may be mutually agreed, at the offices of
Wilmer, Cutler & Pickering in Washington, D.C. At the Closing, the Company
will issue to each Purchaser a certificate or certificates ("Preferred Share
Certificates") representing the number of Preferred Shares purchased by such
Purchaser, and a certificate or certificates representing the number of
Warrants purchased by such Purchaser. At the Closing, each Purchaser will
deliver to the Company, by wire transfer of immediately available funds to an
account designated by the Company by written notice to each Purchaser, the
aggregate Purchase Price set forth next to such Purchaser's name on Exhibit A
hereto. If at the Closing, the Company shall fail to issue any Preferred
Shares or Warrants to any Purchaser as provided above in this Section 1.04(a),
or any of the conditions specified in Article III shall not have been
fulfilled, each Purchaser shall, at its election, be relieved of all further
obligations under this Agreement. In no event shall the Closing occur after
November 15, 1996.
(b) Use of Proceeds. The Company agrees to use the full
proceeds from the sale of the Units to pay down or retire existing debt of the
Company, to pay acquisition costs, fees and expenses and other transaction
costs, and for working capital purposes.
2
<PAGE> 9
ARTICLE II
CERTAIN TERMS OF THE PREFERRED SHARES AND WARRANTS
2.01 Certain Terms of the Preferred Shares and Warrants. The terms
of the Preferred Shares are set forth in the Certificate of Designation,
Number, Powers, Preferences and Relative, Participating, Optional and Other
Rights of Series A Convertible Preferred Stock (the "Certificate of
Designation") attached as Exhibit B hereto. The terms of the Warrants are set
forth in the Warrant Agreement of even date herewith (the "Warrant Agreement"),
by and between the Company and The First National Bank of Boston (the "Warrant
Agent") substantially in the form attached as Exhibit C hereto. This
Agreement, the Certificate of Designation, the Warrant Agreement and the
Registration Rights Agreement (as hereinafter defined) are referred to herein
as the "Basic Documents".
2.02 Replacement of Preferred Share Certificates. Upon receipt of
evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of any Preferred Share Certificate, and, if requested in the case
of any such loss, theft or destruction, upon delivery of an indemnity bond or
other agreement or security reasonably satisfactory to the Company, or, in the
case of any such mutilation, upon surrender and cancellation of any such
Preferred Share Certificate, the Company will issue a new Preferred Share
Certificate, of like tenor and amount, in lieu of such lost, stolen, destroyed
or mutilated Preferred Share Certificate; provided, however, if any Preferred
Share Certificate of which any Purchaser, its nominee, or any of its officers
or principals is the registered holder is lost, stolen or destroyed, the
affidavit of such principal or officer of such holder setting forth the
circumstances with respect to such loss, theft or destruction, together with an
agreement to indemnify the Company with respect thereto, shall be accepted as
satisfactory evidence thereof, and no bond or other security shall be required
as a condition to the execution and delivery by the Company of a new Preferred
Share Certificate in replacement of such lost, stolen or destroyed Preferred
Share Certificate.
2.03 Registration; Transfer; Registration of Transfer and Exchange
of Preferred Shares.
The Preferred Shares shall be issued in registered form only. The
Company, or a transfer agent appointed by the Company (the Company or such
designated agent, in such capacity, the "Preferred Share Agent"), shall number
and list each Preferred Share Certificate, as it is issued, in a register (the
"Preferred Share Register") which the Company or such agent shall maintain at
the principal executive offices of the Company or at such office specified in a
notice
3
<PAGE> 10
to the registered holders (the "Holders") of the Preferred Shares pursuant to
Section 8.04 of this Agreement (the "Office").
At the option of any Holder of Preferred Shares, any Preferred Share
Certificate may be exchanged at the Office for a new Preferred Share
Certificate (or new Preferred Share Certificates, in the same or different
denominations), upon payment of the charges (if any) hereinafter provided.
Whenever any Preferred Share Certificates are so surrendered for exchange the
Company shall execute, and, if applicable, the Preferred Share Agent shall
countersign and deliver, the Preferred Share Certificates that the Holder
making the exchange is entitled to receive.
Subject to compliance with the restrictions set forth in this
Agreement (including, without limitation, Section 7.02 hereof), the Preferred
Share Certificates shall be transferable only on the Preferred Share Register,
upon delivery thereof duly endorsed by the Holder or by his duly authorized
attorney or representative, or accompanied by proper evidence of succession,
assignment or authority to transfer. In all cases of transfer by an attorney,
the original power of attorney, duly approved, or a copy thereof, duly
certified, shall be deposited and remain with the Company or the Preferred
Share Agent. In case of transfer by executors, administrators, guardians or
other legal representatives, duly authenticated evidence of their authority
shall be produced, and may be required to be deposited and to remain with the
Preferred Share Agent in its discretion. Upon any registration of transfer,
the Company shall execute and, if applicable, the Preferred Share Agent shall
countersign and deliver, a new Preferred Share Certificate(s) to the Persons
entitled thereto. As used in this Agreement, "Person" means any natural
person, corporation, partnership, joint venture, limited liability company,
firm, association, joint-stock company, trust, unincorporated organization,
government or governmental agency or political subdivision or any other entity,
whether acting in an individual, fiduciary or other capacity.
All Preferred Share Certificates issued upon any registration of
transfer or exchange of Preferred Share Certificates shall be the valid
obligations of the Company, evidencing the same obligations, and entitled to
the same benefits under this Agreement, as the Preferred Share Certificates
surrendered for such registration of transfer or exchange.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Preferred Share Certificates. The Company may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration of transfer or exchange of
Preferred Share Certificates.
Any Preferred Share Certificate when duly endorsed in blank shall be
deemed negotiable, and when a Preferred Share Certificate shall have been so
endorsed, the Holder thereof may be treated by the Company, the Preferred Share
Agent and all other Persons dealing
4
<PAGE> 11
therewith as the absolute owner thereof for any purpose and as the Person
entitled to exercise the rights represented thereby, or the transfer thereof on
the Preferred Share Register, any notice to the contrary notwithstanding; but
until such transfer on the Preferred Share Register, the Company and the
Preferred Share Agent may treat the registered Holder thereof as the owner for
all purposes.
2.04 Form of Preferred Shares. The Preferred Share Certificates
shall be substantially in the form of Exhibit D hereto, and may have such
letters, numbers or other marks of identification and such legends printed,
lithographed or engraved upon them as the Company may deem appropriate and as
are not inconsistent with the provisions of this Agreement or the Certificate
of Designation.
2.05 PPN Application. The Company acknowledges that filing an
application with Standard & Poor's Corporation CUSIP Service Bureau is
necessary for the assignment of a Private Placement Number with respect to each
of the Preferred Shares and the Company consents to the filing with such Bureau
of all documents and materials required to be submitted with such application.
2.06 Taxes. The Company will pay all taxes (including interest and
penalties), other than taxes imposed on the income of the Purchasers, which may
be payable in respect of the execution and delivery of this Agreement or of the
issuance and delivery (but not the transfer) of any of the Securities.
ARTICLE III
CONDITIONS TO CLOSING
3.01 Conditions to Purchasers' Obligations. The obligation of each
Purchaser to purchase and pay for the Units at the Closing is subject to the
fulfillment by the Company or waiver by such Purchaser of each of the following
conditions:
(a) Representations and Warranties. Each of the
representations and warranties of the Company set forth in Article IV hereof
and in the Basic Documents shall have been true and correct in all material
respects when made and, except for representations expressly stated to have
been made as of a specific date, shall be true and correct in all material
respects on the Closing Date as if made on the Closing Date.
(b) Performance. The Company shall have performed and
complied in all material respects with all covenants and agreements contained
herein and received any and
5
<PAGE> 12
all consents, approvals or waivers necessary in order to complete the
transactions required to be performed or complied with by it or prior to or at
the Closing.
(c) All Proceedings to be Satisfactory. All corporate
and other proceedings to be taken by the Company in connection with the
transactions contemplated hereby and all documents incident thereto shall be
satisfactory in form and substance to the Purchasers, including, without
limitation, the following:
(i) the filing of the duly adopted Certificate of
Designation with the Secretary of State of the State of Delaware; and
(ii) written acknowledgment from The Nasdaq Stock
Market that the requirements of Rule 4460(i) of the Rules of the
National Association of Securities Dealers have been met with respect
to the issuance of the Securities;
and each Purchaser shall have received all such counterpart originals or
certified or other copies of such documents as it reasonably may request.
(d) A+ Network Merger. All conditions precedent to the
consummation of the merger (the "Merger") of A+ Network, Inc. ("A+ Network")
with and into the Company pursuant to that certain Agreement and Plan of
Merger, dated as of May 16, 1996, by and between the Company and A+ Network, as
amended (the "Merger Agreement"), shall have been satisfied, including each of
the conditions set forth in Article VI of the Merger Agreement, except for the
filing of the certificate of merger with the Secretary of State of the State of
Delaware and the filing of the articles of merger with the Tennessee Secretary
of State. The Company shall have delivered to each Purchaser a complete and
correct copy of the Merger Agreement (including all schedules, exhibits,
amendments, supplements, modifications and assignments thereto) executed by
each party thereto.
(e) Tender Offer. The tender offer (the "Tender Offer")
for the 11 7/8% Senior Subordinated Notes of A+ Network (the "A+ Notes") issued
under that certain indenture dated October 24, 1995 (the "A+ Network
Indenture"), between A+ Network and IBJ Schroder Bank & Trust Company, as
trustee, shall have expired and all conditions precedent to the consummation of
the Tender Offer shall have been satisfied, including the conditions set forth
in "The Offer and the Solicitation -- Conditions of the Offer and the
Solicitation" of the Offer to Purchase for Cash All 11 7/8% Senior Subordinated
Notes due 2005 and Solicitation of Consents to Amendment of the Indenture
Relating to such Notes dated October 9, 1996, as amended as of the date hereof
(the "Tender Offer Statement," and together with the related consents and
letters of transmittal, documents and instruments to be delivered in connection
therewith, the "Tender Offer Materials"), except for (i) the Financing
Condition (as defined in
6
<PAGE> 13
the Tender Offer Statement); (ii) the Merger Condition (as defined in the
Tender Offer Statement); (iii) the acceptance of the Notes for payment by the
Company and (iv) payments of cash to purchase the Notes pursuant to the Tender
Offer and in respect of consents received. The Consent Solicitation (as that
term is defined in the Tender Offer Statement) shall have been completed and A+
Network and IBJ Schroder Bank & Trust Company shall have executed that certain
First Supplemental Indenture dated November 14, 1996, which will become
effective upon the Merger. Not less than $121,500,000 in principal amount of
A+ Notes shall have been tendered and not withdrawn under the Tender Offer.
The Company shall have delivered to each Purchaser a complete and correct copy
of the A+ Network Indenture and the Tender Offer Materials (including all
schedules, exhibits, amendments, supplements, modifications and assignments
thereto).
(f) Legal Opinions. Each Purchaser and their counsel
shall have received (i) originally executed copies of one or more favorable
written opinions of Wilmer, Cutler & Pickering, special counsel for the Company
and of Joyce & Jacobs, special communications counsel for the Company, in each
case in form and substance reasonably satisfactory to Purchasers and their
respective counsel, dated as of the Closing Date and setting forth
substantially the matters in the opinions designated in Exhibit E hereto and
Exhibit F hereto, respectively, and as to such other matters as each Purchaser
may reasonably request, (ii) letters from each of Wilmer, Cutler & Pickering
and Joyce & Jacobs, respectively, indicating that the Purchasers are entitled
to rely on the opinions delivered by such firms in connection with the
consummation of the Merger and, in the case of Wilmer, Cutler & Pickering, in
connection with the Merger, the Tender Offer and the Credit Agreement, and
(iii) evidence satisfactory to each Purchaser that the Company has requested
such counsel to deliver such opinions to each Purchaser.
(g) Necessary Consents. On or before the Closing Date,
the Company shall have obtained any required governmental authorizations with
respect to the Basic Documents and shall have obtained all material consents to
the transactions contemplated under the Basic Documents, of any Person required
under any contractual obligation or any other obligations (including any
obligations imposed by law) of the Company or any of its Subsidiaries. As
used in this Agreement, the word "Subsidiary" means, with respect to any party,
any corporation or other organization, whether incorporated or unincorporated,
of which at least a majority of the securities or other interests having by
their terms ordinary voting power to elect a majority of the Board of Directors
or others performing similar functions with respect to such corporation or
other organization is directly or indirectly owned or controlled by such party
or by any one or more of its Subsidiaries, or by such party and one or more of
its Subsidiaries.
(h) Credit Agreement. Other than the conditions set
forth in Section 3.3(b) of the Amended and Restated Loan Agreement dated as of
September 20, 1996, as
7
<PAGE> 14
amended (the "Credit Agreement"), all conditions set forth in Section 3.3 of
the Credit Agreement shall be satisfied or waived in writing by the
Administrative Agent (as defined therein) and the requisite Banks (as defined
therein), all conditions under the Credit Agreement to the making of not less
than $121,000,000 of Advances under the Facility B Commitment (as defined
therein) shall have been satisfied or waived in writing by the Administrative
Agent and the requisite Banks, and the Purchasers shall have received evidence
satisfactory to the Purchasers that the terms of the Basic Documents are
satisfactory to the requisite Banks for purposes of Section 3.3(b) of the
Credit Agreement. The Company shall have delivered to each Purchaser a
complete and correct copy of the Credit Agreement (including all schedules,
exhibits, amendments, supplements, modifications and assignments thereto)
executed by each party thereto.
(i) No Material Adverse Effect. Since December 31, 1995,
no Material Adverse Effect shall have occurred. As used in this Agreement, any
reference to "Material Adverse Effect" means any event, change or effect that
is materially adverse to the consolidated financial condition, businesses,
results of operations or cash flows of the Company and its Subsidiaries, taken
as a whole, or that impairs the ability of the Company to perform or the
Purchasers to enforce the obligations of the Company under the Basic Documents.
(j) Payment of Fees and Expenses. Without limiting the
provisions of Section 8.05 hereof, the Company shall have paid on or before the
Closing by wire transfer of immediately available funds, the fees, charges and
disbursements of each Purchaser including the fees and expenses of O'Melveny &
Myers LLP and Kaye, Scholer, Fierman, Hays & Handler, LLP, and such other fees
charges and disbursements to be paid by Company hereunder.
(k) No Injunctions, Restraining Order or Adverse
Litigation. No order, judgment or decree of any Governmental Entity shall
purport to enjoin or restrain any Purchaser from acquiring any Units on the
Closing Date. As of the Closing Date, there shall not be pending or, to the
knowledge of Company, threatened, any action, suit, proceeding, governmental
investigation or arbitration against or affecting Company or any of its
Subsidiaries or any property of Company or any of its Subsidiaries that has not
been disclosed by Company in writing pursuant to Section 4.09 prior to the
execution of this Agreement, and there shall have occurred no development not
so disclosed in any such action, suit, proceeding, governmental investigation
or arbitration so disclosed, that, in either event, could reasonably be
expected to have a Material Adverse Effect; and no injunction or other
restraining order shall have been issued and no hearing to cause an injunction
or other restraining order to be issued shall be pending or noticed with
respect to any action, suit or proceeding seeking to enjoin or otherwise
prevent the consummation of, or to recover any damages or obtain relief as a
result of, the transactions contemplated by this Agreement or the other Basic
Documents, including the Merger or the Tender Offer.
8
<PAGE> 15
(l) No Violation of Law. The acquisition of the Units
shall not violate any law including, without limitation, Regulations G, T or X
of the Board of Governors of the Federal Reserve System.
(m) Financial Statements. Company shall have delivered
to each Purchaser each of the financial statements described in Section 4.05.
(n) Minimum Purchase of Units. No fewer than 100,000
Units shall be purchased pursuant to this Agreement and the aggregate purchase
price for such Units shall not be less than $25,000,000.
(o) Legal Investment; Certificate. The purchase of the
Securities to be issued pursuant hereto shall be permitted under the laws and
regulations of any jurisdiction to which each Purchaser is subject (without
resort to any provision of any such law permitting limited investments by such
Purchaser without restriction as to the character of the particular
investment), and the Company shall, if requested by any Purchaser, provide an
officers' certificate, dated the date of the Closing, certifying as to such
matters as are reasonably requested to enable such Purchaser to determine
whether its purchase is so permitted.
(p) Voting Agreement. Each Purchaser shall have received
prior to or at the Closing a Shareholders Voting Agreement, executed by the
Stockholders identified on Annex A thereto (the "Voting Agreement"), in the
form attached as Exhibit G hereto.
(q) Increase in Authorized Shares. The Board of
Directors of the Company shall have adopted a resolution approving an amendment
to the Certificate of Incorporation to increase the number of authorized shares
of Common Stock from 33,500,000 shares to 50,000,000 shares, directing that
such amendment be presented to the holders of Common Stock for a vote at the
next meeting of shareholders of the Company in accordance with applicable
Delaware law and recommending that the holders of Common Stock approve the
amendment. Prior to or at the Closing, the Company shall have delivered to
each purchaser a complete and correct copy of such resolution certified by the
Secretary or Assistant Secretary of the Company.
(r) Documentation at Closing. Each Purchaser shall have
received prior to or at the Closing all of the following, each in form and
substance satisfactory to each Purchaser:
(i) The Warrant Agreement, executed by the
Company and the Warrant Agent and a certificate or certificates representing
the Warrants (duly executed in
9
<PAGE> 16
accordance with Section 1.03) issued to each Purchaser or a nominee or nominees
identified by such Purchaser;
(ii) A Registration Rights Agreement executed by
the Company and each Purchaser substantially in the form attached as Exhibit H
hereto (the "Registration Rights Agreement");
(iii) The Certificate of Designation, adopted by
the Board of Directors of the Company, as attested by the Secretary or
Assistant Secretary of the Company and filed with the Secretary of State of the
State of Delaware;
(iv) A certified copy of the Company's Amended and
Restated Certificate of Incorporation, as amended and the Company's Fourth
Amended and Restated Bylaws; a certified copy of the resolutions of the Board
of Directors evidencing approval of the Basic Documents, the Units, the
Preferred Shares, the Warrants and other matters contemplated hereby including
each of the matters specified in Article I hereof; and certified copies of all
documents evidencing other necessary corporate, shareholder or other action and
governmental approvals, if any, with respect to the Basic Documents, the Units,
the Preferred Shares and the Warrants;
(v) A certificate of the Secretary or an
Assistant Secretary of the Company which shall certify the names of the
officers authorized to sign this Agreement and the other Basic Documents and
issue the Units on behalf of the Company, together with the true signatures of
such officers. Each Purchaser may rely conclusively on such certificates until
it shall receive a further certificate of the Secretary or an Assistant
Secretary of the Company canceling or amending the prior certificate and
submitting the signatures of the officers named in such further certificate;
(vi) A certificate from a duly authorized officer
of the Company stating that (a) the representations and warranties contained in
Article IV hereof and the other Basic Documents or otherwise made by the
Company in writing in connection with the transactions contemplated hereby were
true and correct in all material respects when made and, except for
representations expressly stated to have been made as of a specific date, are
true and correct in all material respects on the date of the Closing as if made
on the date of the Closing; (b) the Company has performed and complied with all
covenants and agreements contained herein in all material respects and has
received any and all consents, approvals or waivers necessary in order to
complete the transactions required to be performed or complied with by it prior
to or on the date of the Closing; (c) no event shall have occurred and be
continuing as of the Closing, or would result from the consummation of the
purchase of the Units or the other transactions contemplated by the Basic
Documents, the Merger or the Tender Offer, that would
10
<PAGE> 17
constitute a "Triggering Event" under the Certificate of Designation or a
breach or violation of any Basic Document; and (d) the Company has delivered to
each Purchaser all documents and satisfied all conditions referred to in
Sections 3.01(d), (e), (g), (h) and (k) hereof; and
(vii) Evidence satisfactory to the Purchasers of
the satisfaction of the conditions set forth in this Article III.
3.02 Conditions to the Company's Obligations. The obligation of
the Company to issue and deliver the Securities on the Closing Date, as
provided in Article II hereof, is subject to the performance by the Purchasers
of their agreements theretofore to be performed hereunder and to the
fulfillment, prior thereto or concurrently therewith, of the following further
conditions:
(a) Representations and Warranties. Each of the
representations and warranties of the Purchasers contained in this Agreement
shall be true and correct in all material respects when made and shall be true
and correct in all material respects on the Closing Date as if made on the
Closing Date, except as otherwise affected by the transactions contemplated
hereby.
(b) Purchasers' Certificates. The Company shall have
received a certificate from each of the Purchasers, dated the Closing Date,
signed by a duly authorized representative of such Purchaser, certifying that
the conditions specified in the foregoing Section 3.02(a) with respect only to
such Purchaser hereof have been fulfilled.
(c) Injunction. There shall be no effective injunction,
writ, preliminary restraining order or any order of any nature issued by a
court of competent jurisdiction directing that the transactions provided for
herein or any of them not be consummated as herein provided.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
In order to induce each Purchaser to enter into this Agreement and
purchase the Units, the Company represents, warrants and covenants to each
Purchaser as follows.
4.01 Organization. (a) Each of the Company and its Subsidiaries
is a corporation duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation and has all requisite
corporate power and authority and all necessary governmental approvals to own,
lease and operate its properties and to carry on its
11
<PAGE> 18
business as now being conducted, except where the failure to have such
governmental approvals could not reasonably be expected to have a Material
Adverse Effect. The Company and each of its Subsidiaries is duly qualified or
licensed to do business and in good standing in each jurisdiction in which the
property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification or licensing necessary, except where
the failure to be so duly qualified or licensed and in good standing could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect or prevent the Company from consummating any of the transactions
contemplated hereby.
(b) The Company has heretofore made available to
Purchasers a complete and correct copy of the Amended and Restated Certificate
of Incorporation, as amended as of the date hereof, the Fourth Amended and
Restated By-Laws of the Company and the organizational documents of each of its
Subsidiaries, as currently in effect. Each such document is in full force and
effect and no other organizational documents are applicable to or binding upon
the Company or any Subsidiary.
(c) Schedule 4.01 identifies all Subsidiaries of the
Company.
4.02 Capitalization. (a) The authorized capital stock of the
Company consists of 33,500,000 shares of Common Stock, $.01 par value (the
"Common Stock") and 1,000,000 shares of preferred stock, $.01 par value.
Schedule 4.02 sets forth the (i) the number of issued and outstanding shares of
Common Stock as of the date hereof; (ii) a description of all unexpired options
to purchase Common Stock ("Company Options"), including number of shares,
exercise price, date of vesting and exercise date as well as a statement
describing outstanding Company options, (iii) all shares of Common Stock that
would be issuable by the Company pursuant to or in connection with each of the
acquisition agreements or transactions identified in Schedule 4.02, including
the Merger and the Tender Offer, and each other transaction contemplated to
occur on or before Closing Date (the "Pending Transactions"); and (iv) all
other shares of Common Stock issuable to any person pursuant to any existing
options, warrants, calls, preemptive (or similar) rights, subscriptions or
other rights, agreements, arrangements or commitments of any character. As of
the date hereof and immediately prior to the Closing, no shares of preferred
stock are issued and outstanding or held in the treasury of the Company, and no
shares of Common Stock are held in the treasury of the Company. The Company
has taken all necessary corporate, shareholder and other action to authorize
and reserve and to permit it to issue shares of Common Stock which may be
issued pursuant to Company Options or the transactions contemplated hereby.
There are no bonds, debentures, notes or other indebtedness having general
voting rights (or convertible into securities having such rights) ("Voting
Debt") of the Company or any of its Subsidiaries issued and outstanding.
Except as set forth in Schedule 4.02, as of the date hereof, (i) there are no
shares of capital stock of the Company authorized, issued or outstanding, (ii)
there are no existing options, warrants, calls,
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<PAGE> 19
preemptive (or similar) rights, subscriptions or other rights, agreements,
arrangements or commitments of any character, relating to the issued or
unissued capital stock of the Company or any of its Subsidiaries, obligating
the Company or any of its Subsidiaries to issue, transfer or sell or cause to
be issued, transferred or sold any shares of capital stock or Voting Debt of,
or other equity interest in, the Company or any of its Subsidiaries or
securities convertible into or exchangeable for such shares or equity interest
or obligations of the Company or any of its Subsidiaries, and (iii) there are
no outstanding contractual obligations of the Company or any of its
Subsidiaries to repurchase, redeem or otherwise acquire any Company Shares, or
capital stock of the Company or any Subsidiary or affiliate of the Company.
(b) All of the outstanding shares of capital stock of
each of the Company's Subsidiaries are beneficially owned by the Company,
directly or indirectly, free and clear of all security interests, liens,
claims, pledges, agreements, limitations on voting rights, charges or other
encumbrances of any nature whatsoever, other than liens in favor of Toronto
Dominion (Texas), Inc. as administrative agent for itself, the Managing
Agents, the Documentation Agent, the Syndication Agent, and the Banks (all as
defined in the Credit Agreement).
(c) Except for (i) the Voting Agreement dated August 31,
1994, as amended, which will have been terminated effective at the Effective
Time of the Merger, and (ii) the Brock Voting Agreement dated May 15, 1996, and
(iii) there are no voting trusts or other agreements or understandings to which
the Company or any of its Subsidiaries is a party with respect to the voting of
the capital stock of the Company or any of its Subsidiaries. None of the
Company or its Subsidiaries is required to redeem, repurchase or otherwise
acquire shares of capital stock of the Company, or any of its Subsidiaries,
respectively, as a result of the transactions contemplated by this Agreement.
(d) As of the Closing, the Preferred Shares and the
Warrants will be validly issued, fully paid and non-assessable and not subject
to preemptive (or similar) rights. The Company has taken all actions set forth
in Sections 1.01, 1.02 and 1.03 hereof.
4.03 Authorization; Validity of Agreement; Company Action. The
Company has full corporate power and authority to execute and deliver each
Basic Document, to issue the Units and to consummate the transactions
contemplated hereby and thereby. The Certificate of Designation has been duly
approved by the Company and filed with the Secretary of State of the State of
Delaware. The execution, delivery and performance by the Company of each Basic
Document and the consummation by it of the transactions contemplated hereby and
thereby have been duly authorized by the Board of Directors of the Company and
no other corporate or shareholder action on the part of the Company is
necessary to authorize the execution, delivery or performance by the Company of
any Basic Document, the issuance of any Unit or the
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<PAGE> 20
consummation by it of the transactions contemplated hereby and thereby, except
for amendments of the Certificate of Incorporation to increase the authorized
number of shares of Common Stock. This Agreement, the Warrant Agreement, and
the Registration Rights Agreement have been have been duly executed and
delivered by the Company and (assuming due and valid authorization, execution
and delivery hereof by the other parties hereto and thereto), and each of the
Basic Documents are valid and binding obligations of the Company enforceable
against the Company in accordance with their terms, except that (i) such
enforcement may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws, now or hereafter in effect,
affecting creditors' rights generally, and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
4.04 Consents and Approvals; No Violations; Licenses. (a) None of
the execution, delivery or performance of any Basic Document by the Company,
the issuance of any Units or the consummation by the Company of the
transactions contemplated hereby or thereby, nor compliance by the Company
with any of the provisions hereof or thereof will (i) conflict with or result
in any breach of any provision of the Amended and Restated Certificate of
Incorporation, as amended or the Fourth Amended and Restated By-Laws or other
organizational documents of the Company or of any of its Subsidiaries, (ii)
require on the part of the Company any filing with, or permit, authorization,
consent or approval of, any court, arbitral tribunal, administrative agency or
other governmental or regulatory authority or agency (a "Governmental Entity")
except for in the case of clause (ii) (A) filings, permits, authorizations,
consents and approvals as may be required under state securities or blue sky
laws, and the laws of other states in which the Company is qualified to do or
is doing business, or (B) where the failure to obtain such permits,
authorizations, consents or approvals or to make such filings, individually or
in the aggregate, could not reasonably be expected to have a Material Adverse
Effect or prevent the Company from consummating the transactions contemplated
hereby, (iii) except as disclosed on Schedule 4.04(a), result in a violation or
breach of, or constitute (with or without due notice or lapse of time or both)
a default (or give rise to any right of termination, cancellation or
acceleration) under, any of the terms, conditions or provisions of the
Indenture dated as of September 27, 1995 between the Company and First Union
National Bank of Virginia, as trustee (as amended, the "Metrocall Indenture")
or any material note, bond, mortgage, indenture, lease, license, contract,
agreement or other instrument or obligation to which the Company or any of its
Subsidiaries is a party or by which any of them or any of their properties or
assets may be bound (the "Material Agreements") or (iv) violate any order,
writ, injunction, decree, statute, rule or regulation applicable to the
Company, any of its Subsidiaries or any of their properties or assets. The
Preferred Stock issued pursuant hereto does not and will not constitute
"Redeemable Stock" under and as defined in the Metrocall Indenture.
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<PAGE> 21
(b) Schedule 4.04(b) hereto accurately and completely
lists all licenses, permits, certificates, franchises, ordinances,
registrations, or other rights, applications and authorizations (collectively,
"the Licenses") granted, issued or entered by the Federal Communications
Commission (the "FCC") and held by the Company or one of its Subsidiaries.
Except as disclosed in the opinion letter of Joyce & Jacobs identified in
Section 3.3(f), the Company or one of its Subsidiaries holds all Licenses filed
with, granted or issued by, or entered by any Governmental Entity, including,
without limitation, the FCC, or any state or local regulatory authorities or
any state or local public service commission or public utility commission
asserting jurisdiction over the radio facilities used in the Company's or any
of its Subsidiaries' business, that are required for the conduct of their
businesses as now being conducted, except for those the absence of which could
not, individually or in the aggregate reasonably be expected to have a Material
Adverse Effect. Except as disclosed in the opinion letter of Joyce & Jacobs
identified in Section 3.3(f), the Licenses are valid, in full force and effect,
and the terms of said Licenses are not subject to any restrictions or
conditions that materially limit or would materially limit the operations of
the business of the Company or any of its Subsidiaries as presently conducted,
other than restrictions or conditions generally applicable to licenses of that
type. The Licenses granted, issued or entered by the FCC are subject to the
Communications Act of 1934, as amended. There are no proceedings pending or,
to the best knowledge of the Company, complaints or petitions by others, or
threatened proceedings, before the FCC or any other Governmental Entity
relating to the business or operations of the Company or any of its
Subsidiaries or the Licenses, and there are no facts or conditions that
reasonably could be expected to constitute grounds for the FCC to revoke,
terminate, suspend, deny, annul, or impose conditions on any renewal of any the
Licenses, that individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect or prevent the Company from consummating the
transactions contemplated hereby or to impose any fines, forfeitures or other
penalties on the Company or its Subsidiaries that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
4.05 SEC Reports and Financial Statements. (a) The Company and its
Subsidiaries have filed with the Securities and Exchange Commission ("SEC") all
forms, reports, schedules, statements, and other documents required to be filed
by them with the SEC, including, without limitation, the Company's Registration
Statement filed on Form S-4 filed on October 8, 1996 and the Company's Schedule
13D and Tender Offer Statement on Schedule 14D-1 filed on May 22, 1996 (as such
documents have been amended since the time of their filing, collectively, the
"SEC Documents"), and have filed all exhibits required to be filed with the SEC
Documents. As of their respective dates or, if amended, as of the date of the
last such amendment, the SEC Documents, including, without limitation, any
financial statements or schedules included therein, complied in all material
respects with the applicable requirements of the Securities Act of 1933, as
amended (the "Securities Act") and the Securities Exchange Act of 1934 (the
"Exchange Act"), and did not contain any untrue statement of a material fact or
omit to state a material fact
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<PAGE> 22
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. None of the Company's Subsidiaries is required to file any forms,
reports or other documents with the SEC pursuant to Section 12 or 15 of the
Exchange Act. The financial statements of the Company included in the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1995 (including the related notes thereto) and for the nine months ended
September 30, 1996, copies of which have been furnished to Purchasers
(together, the "Financial Statements"), have been prepared from, and are in
accordance with, the books and records of the Company and its consolidated
Subsidiaries, comply in all material respects with applicable accounting
requirements and with the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes thereto and subject,
in the case of unaudited interim financial statements, to normal year-end
adjustments), and fairly present the consolidated financial position and the
consolidated results of operations and cash flows of the Company and its
consolidated Subsidiaries as at the dates thereof or for the periods presented
therein. The Company and its Subsidiaries have maintained a system of
accounting established in accordance with sound business practices to permit
preparation of financial statements in conformity with GAAP.
(b) No representation or warranty of the Company contained in any
Basic Document or in any other document, certificate or written statement
furnished to Purchasers by or on behalf of Company or any of its Subsidiaries
for use in connection with the transactions contemplated by this Agreement
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained herein or therein when
made not misleading in light of the circumstances in which the same were made.
4.06 No Undisclosed Liabilities. Except (i) as disclosed in the
SEC Documents that have been delivered to each Purchaser prior to the date
hereof, (ii) as set forth in Schedule 4.06, (iii) the Pending Transactions, and
(iv) for liabilities incurred in the ordinary course of business and consistent
with past practice, and liabilities incurred in connection with the
consummation of the transactions contemplated hereby (none of which,
individually or in the aggregate, could reasonably have a Material Adverse
Effect since December 31, 1995, neither the Company nor any of its Subsidiaries
has incurred any liabilities or obligations of any nature (whether accrued,
absolute, contingent or otherwise) which would be required by GAAP to be
reflected on a consolidated balance sheet of the Company and its Subsidiaries
(including the notes thereto), or which individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
4.07 Absence of Certain Changes. Except as contemplated by this
Agreement, for the Pending Transactions, or as disclosed in the SEC Documents
that have been delivered to
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<PAGE> 23
each Purchaser prior to the date hereof or in Schedule 4.07, since December
31, 1995, (i) the Company and its Subsidiaries have conducted their respective
businesses only in the ordinary course of business and consistent with past
practice, (ii) there has not been any change in the business, properties,
assets, liabilities, financial condition, cash flows, operations, licenses,
franchises or results of operations of the Company or its Subsidiaries which
could reasonably be expected to have a Material Adverse Effect (iii) the
Company has not (A) declared, set aside or paid any dividend or other
distribution payable in cash, stock or property with respect to its capital
stock; (B) directly or indirectly, split, combined or reclassified the
outstanding shares of Common Stock; or (C) adopted a plan of complete or
partial liquidation, dissolution, merger, consolidation, restructuring,
recapitalization or other reorganization of the Company or any of its
Subsidiaries.
4.08 Employee Benefit Plans; ERISA; Labor. (a) Schedule 4.08
hereto sets forth (i) a list of all employee benefit plans (including but not
limited to plans described in section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), maintained by the Company, any of
its Subsidiaries or any trade or business, whether or not incorporated (an
"ERISA Affiliate"), which together with the Company would be deemed a "single
employer" within the meaning of section 4001(b)(1) of ERISA ("Benefit Plans")
and (ii) all employment, retention, option and severance agreements with
employees of the Company and its Subsidiaries ("Employee Agreements"). True
and complete copies of all current Benefit Plans and Employee Agreements have
been made available to Purchasers.
(b) With respect to each Benefit Plan: (i) if intended to
qualify under section 401(a) or 401(k) of the Internal Revenue Code of 1986, as
amended (the "Code") such plan has received a determination letter from the
Internal Revenue Service (the "IRS") stating that it so qualifies and that its
trust is exempt from taxation under section 501(a) of the Code, no such
determination letter has been revoked and no such revocation has been
threatened, nothing has occurred that could reasonably be expected to cause the
relevant Benefit Plan to lose such qualification or exemption; (ii) such plan
has been administered in all material respects in accordance with its terms and
applicable law, including state and federal securities laws; (iii) no breaches
of fiduciary duty by the Company, or, to the Company's knowledge, by any other
person have occurred that might reasonably be expected to give rise to material
liability on the part of the Company or any ERISA Affiliate; (iv) no disputes
are pending, or, to the knowledge of the Company, threatened that might
reasonably be expected to give rise to material liability on the part of the
Company or any ERISA Affiliate; (v) except as disclosed on Schedule 4.08, no
prohibited transaction (within the meaning of Section 406 of ERISA) has
occurred that might reasonably be expected to give rise to material liability
on the part of the Company or any ERISA Affiliate; (vi) all contributions
required to be made to such plan as of the date hereof (taking into account any
extensions for the making of such contributions) have been made in full; (vii)
to the Company's knowledge, no Benefit Plans are presently under audit or
examination (nor
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<PAGE> 24
has notice been received of a potential audit or examination) by the IRS,
Department of Labor, or any other governmental agency or entity, and no matters
are pending with respect to any Benefit Plan under the IRS's Voluntary
Compliance Resolution program, its Closing Agreement Program, or other similar
programs; and (viii) all monies withheld with respect to Benefit Plans have
been transferred to the appropriate plan in accordance with the terms of such
plan.
(c) No Benefit Plan is a "multiemployer pension plan," as
defined in section 3(37) of ERISA, nor is any Benefit Plan a plan described in
section 4063(a) of ERISA. No Benefit Plan is or has been subject to Title IV
of ERISA.
(d) No liability under Title IV of ERISA has been incurred by
the Company or any ERISA Affiliate (whether direct, indirect, actual, or
contingent, and including, without limitation, withdrawal liability to a
multiemployer plan), and no condition exists that presents a material risk to
the Company or any ERISA Affiliate of incurring a material liability under such
Title. No Benefit Plan has incurred an accumulated funding deficiency, as
defined in section 302 of ERISA or section 312 of the Code, whether or not
waived.
(e) With respect to each Benefit Plan that is a "welfare
plan" (as defined in section 3(1) of ERISA), no such plan provides medical or
death benefits with respect to current or former employees of the Company or
any of its Subsidiaries beyond their termination of employment (other than to
the extent required by applicable law). All group health plans of the Company
and the ERISA Affiliates have been operated in material compliance with the
requirements of Section 4980B (and its predecessor) and 5000 of the Code, and
the Company and ERISA Affiliates have provided, or will have provided prior to
May 15, 1997, to individuals entitled thereto all required notices and coverage
pursuant to Section 4980B, except to the extent that failure to provide such
notice or coverage is not reasonably likely to result, individually or in the
aggregate, in a Material Adverse Effect on the Company and its Subsidiaries,
taken as a whole.
(f) No Benefit Plan, plan documentation or agreement, summary
plan description or other written communication distributed generally to
employees of the Company or its Subsidiaries by its terms prohibits the
amendment or termination of any such Benefit Plan.
(g) As of the date hereof, except for Employee Agreements or
as described in the SEC Documents that have been delivered to each Purchaser
prior to the date hereof, the Company and its Subsidiaries are not parties to
any (i) agreement with any director, executive officer or other key employee of
the Company or its Subsidiaries (A) the benefits of which are contingent, or
the terms of which are materially altered, upon the occurrence of a transaction
involving the Company or its Subsidiaries of the nature of any of the
transactions contemplated by this Agreement, (B) providing any term of
employment or compensation guarantee or (C)
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<PAGE> 25
providing severance benefits or other benefits after the termination of
employment of such director, executive officer or key employee; (ii) agreement,
plan or arrangement under which any person may receive payments from the
Company or its Subsidiaries that may be subject to the tax imposed by Section
4999 of the Code or included in the determination of such person's "parachute
payment" under Section 280G of the Code; and (iii) agreement or plan binding
the Company or its Subsidiaries, including, without limitation, any stock
option plan, stock appreciation right plan, restricted stock plan, stock
purchase plan, severance benefit plan or employee benefit plan, any of the
benefits of which will be increased, or the vesting of the benefits of which
will be accelerated, by the occurrence of any of the transactions contemplated
by this Agreement or the value of any of the benefits of which will be
calculated on the basis of any of the transactions contemplated by this
Agreement.
(h) As of the date hereof, no collective bargaining agreement
is binding and in force against the Company or its Subsidiaries or is currently
under negotiation, and no current employees of the Company or its Subsidiaries
are represented by any labor union. As of the date hereof, to the Company's
knowledge, no labor representation effort exists with respect to the Company or
its Subsidiaries.
4.09 Litigation. Schedule 4.09 hereto sets forth each suit, action
or proceeding pending (as to which the Company has received notice), or, to the
knowledge of the Company, threatened against the Company, any of its
Subsidiaries, or their properties or assets on the date hereof. Except as set
forth on Schedule 4.09 hereto, none of the foregoing, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect, if
resolved adversely to the Company or its Subsidiaries. As of the date hereof,
neither the Company nor any of its Subsidiaries, nor any of their respective
properties, is subject to any order, writ, judgment, injunction, decree,
determination or award having, or which would have, a Material Adverse Effect
on the Company and its Subsidiaries, taken as a whole, or which would prevent
the Company from consummating the transactions contemplated hereby.
4.10 No Default; Compliance with Applicable Laws. Neither the
Company nor any of its Subsidiaries is in default or violation in any material
respect of any term, condition or provision of (i) its respective Certificate
of Incorporation or By-laws or other organizational documents, (ii) any
Material Agreement or (iii) any federal, state, local or foreign statute, law,
ordinance, rule, regulation, judgment, decree, order, concession, grant,
franchise, permit or license or other governmental authorization or approval
applicable to the Company or any of its Subsidiaries or by which they or their
respective assets may be bound (other than matters addressed in Sections 4.04,
4.08, 4.09, 4.10, 4.11, and 4.12), excluding from the foregoing clause (iii),
defaults or violations which could reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect on the Company and its
Subsidiaries, taken as a whole, or prevent the Company from consummating the
transactions contemplated hereby.
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4.11 Taxes. Except as set forth on Schedule 4.11:
(a) The Company and its Subsidiaries have (i) duly and timely
filed (or there has been filed on their behalf) with the appropriate
governmental authorities all Tax Returns (as hereinafter defined) required to
be filed by them on or prior to the date hereof, other than those Tax Returns
for which extensions for filing have been obtained in a timely manner, and such
Tax Returns are true, correct and complete in all material respects, and (ii)
duly paid in full all Taxes (as hereinafter defined) shown to be due on such
Tax Returns or have provided adequate reserves in their financial statements
for any Taxes that have not been paid. There are no liens on any of the assets
of the Company or any of its Subsidiaries that arose in connection with any
delinquency in paying any Tax.
(b) As of the date hereof, there are no ongoing federal,
state, local or foreign audits or examinations of any Tax Return of the Company
or its Subsidiaries.
(c) As of the date hereof, there are no outstanding requests,
agreements, consents or waivers to extend the statutory period of limitations
applicable to the assessment of any Taxes or deficiencies against the Company
or any of its Subsidiaries (excluding extensions for filings that have been
timely obtained), and no power of attorney granted by either the Company or any
of its Subsidiaries with respect to any Taxes is currently in force.
(d) Neither the Company nor any of its Subsidiaries is a
party to any agreement providing for the allocation or sharing of Taxes.
(e) "Taxes" shall mean any and all taxes, charges, fees,
levies or other assessments, including, without limitation, income, gross
receipts, excise, real or personal property, sales, withholding, social
security, occupation, use, service, service use, license, net worth, payroll,
franchise, transfer and recording taxes, fees and charges, imposed by the
Internal Revenue Service or any taxing authority (whether domestic or foreign
including, without limitation, any state, county, local or foreign government
or any subdivision or taxing agency thereof (including a United States
possession)), whether computed on a separate, consolidated, unitary, combined
or any other basis; and such term shall include any interest whether paid or
received, fines, penalties or additional amounts attributable to, or imposed
upon, or with respect to, any such taxes, charges, fees, levies or other
assessments. "Tax Return" shall mean any report, return, document, declaration
or other information or filing required to be supplied to any taxing authority
or jurisdiction (foreign or domestic) with respect to Taxes.
4.12 Environmental Matters. (a) The Company and its Subsidiaries
have complied in all material respects with all applicable Environmental Laws
(as defined below), except to the extent that any failure to comply could not
reasonably be expected to have,
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<PAGE> 27
individually or in the aggregate, a Material Adverse Effect. There is no
pending or, to the knowledge of the Company, threatened, civil or criminal
litigation, written notice or violation, formal administrative proceeding or
investigation, inquiry or information request by any Governmental Entity
relating to any Environmental Law involving the Company or any of its
Subsidiaries or any of their properties. For purposes of this Agreement,
"Environmental Law" means any foreign, federal, state or local law, statute,
rule or regulation or the common law relating to the environment or
occupational health and safety, including, without limitation, any statute,
regulation or order pertaining to (i) treatment, storage, disposal, generation
or transportation of industrial, toxic or hazardous substances or solid or
hazardous waste; (ii) air, water and noise pollution; (iii) groundwater and
soil contamination; (iv) the release or threatened release into the environment
of industrial, toxic or hazardous substances, or solid or hazardous waste,
including, without limitation, emissions, discharges, injections, spills,
escapes or dumping of pollutants, contaminants or chemicals; (v) the protection
of wildlife, marine sanctuaries and wetlands, including, without limitation,
all endangered and threatened species; (vi) storage tanks, vessels and
containers; (vii) underground and other storage tanks or vessels, abandoned,
disposed or discarded barrels, containers and other closed receptacles; (viii)
health and safety of employees and other persons; and (ix) manufacture,
processing, use, distribution, treatment, storage, disposal, transportation or
handling of pollutants, contaminants, chemicals or industrial, toxic or
hazardous substances or oil or petroleum products or solid or hazardous waste.
As used above, the terms "release" and "environment" shall have the meaning set
forth in the federal Comprehensive Environmental Response, Compensation and
Liability Act of 1980 ("CERCLA").
(b) With the exception of releases that could not reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect, there have been no releases of any Materials of Environmental Concern
(as defined below) into the environment by the Company or any of its
Subsidiaries, or, to the knowledge of the Company, by any other party at any
parcel of real property or any facility formerly or currently owned, operated
or controlled by the Company or any of its Subsidiaries. For purposes of this
Agreement, "Materials of Environmental Concern" means any chemicals, pollutants
or contaminants, hazardous substances (as such term is defined under CERCLA),
solid wastes and hazardous wastes (as such terms are defined under the federal
Resource Conservation and Recovery Act), toxic materials, oil or petroleum and
petroleum products, or any other material subject to regulation under any
Environmental Law.
4.13 Insurance. The Company and the Subsidiaries maintain adequate
insurance with respect to their respective businesses and are in compliance
with all material requirements and provisions thereof.
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4.14 Transactions with Affiliates. Except as set forth in the SEC
Documents that have been delivered to each Purchaser prior to the date hereof
or on Schedule 4.14, since December 31, 1995, neither the Company nor any of
its Subsidiaries has entered into any transaction with any current director or
officer of the Company or any Subsidiary or any transaction which would be
subject to proxy statement disclosure under the Exchange Act pursuant to the
requirements of Item 404 of Regulation S-K.
4.15 Brokers. Other than The Toronto-Dominion Bank, no broker,
finder or investment banker is entitled to any brokerage, finder's or other fee
or commission from the Company in connection with the issuance and sale of
Securities pursuant to this Agreement and the Company hereby indemnifies each
Purchaser against, and agrees that it will hold each Purchaser harmless from,
any claim, demand or liability for any such broker's or finder's fees
(including, without limitation, those of The Toronto-Dominion Bank) alleged to
have been incurred in connection therewith and any expenses (including
reasonable fees, expenses and disbursements of counsel) arising in connection
with any such claim, demand or liability.
4.16 Nasdaq Approvals. The issuance by the Company of the
Securities will not require shareholder approval under applicable rules of The
Nasdaq Stock Market.
ARTICLE V
AFFIRMATIVE COVENANTS OF THE COMPANY
5.01 Financial and Business Information. The Company will maintain,
and cause each of its Subsidiaries to maintain, a system of accounting
established in accordance with sound business practices to permit preparation
of financial statements in conformity with GAAP. The Company during the term
of this Agreement will, and will cause its Subsidiaries to deliver to each
Purchaser (provided that the Company shall not deliver to a Purchaser any such
information to the extent that such Purchaser has requested in writing to the
Company that such information not be delivered to such Purchaser);
(a) As soon as practicable and in any event within 120 days after
the close of each fiscal year of the Company, beginning with the current fiscal
year, a consolidated balance sheet of the Company and its Subsidiaries as of
the close of such fiscal year and consolidated statements of income, retained
earnings and cash flows for the Company and its Subsidiaries for the fiscal
year then added, certified by the chief executive officer or chief financial
officer of the Company to be true and accurate in all material respects (it
being understood by the parties hereto that the delivery to each Purchaser of
the Company's annual report on Form 10-K will satisfy the requirements of this
Section 5.01(a));
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<PAGE> 29
(b) As soon as practicable and in any event within 45 days after
the end of each of the first three fiscal quarters of each fiscal year, the
consolidated and consolidating balance sheet of Company and its Subsidiaries as
at the end of such fiscal quarter and the related consolidated and
consolidating statements of income, retained earnings and cash flows of Company
and its Subsidiaries for such fiscal quarter and for the period from the
beginning of the then current fiscal year to the end of such fiscal quarter,
all in reasonable detail and certified by the chief financial officer of
Company that they fairly present the financial condition of Company and its
Subsidiaries as at the dates indicated and the results of its operations and
its cash flows for the periods indicated, subject to changes resulting from
audit and normal year-end adjustments (it being understood by the parties
hereto that the delivery to each Purchaser of the Company's quarterly report on
Form 10-Q will satisfy the requirements of this Section 5.01(b));
(c) Prompt notice of any event having a Material Adverse Effect;
(d) Promptly upon their becoming available, copies of (a) all
financial statements, reports, notices and proxy statements sent or made
available generally by Company to its security holders, (b) all regular and
periodic reports, if any, filed by Company or any of its Subsidiaries with any
securities exchange or with the SEC or any governmental or private regulatory
authority, and (c) all press releases and other statements made available
generally by Company or any of its Subsidiaries to the public concerning
material developments in the business of Company or any of its Subsidiaries;
(e) Promptly upon any officer of Company or any of its
Subsidiaries obtaining knowledge of any condition or event that constitutes a
Triggering Event (as defined in the Certificate of Designation) or a violation
or default of any material term of any Basic Document or an event of default or
potential event of default under any indebtedness of Company or any of its
Subsidiaries, or becoming aware that any person has given any notice or taken
any other action with respect to a claimed event of default or potential event
of default; and
(f) Within a reasonable time, upon either Purchaser's request,
such other information about the property, financial condition and operations
of the Company and its Subsidiaries as such Purchaser may from time to time
reasonably request.
5.02 Notice of Certain Events. Unless the Purchasers shall otherwise
consent in writing, the Company during the term of this Agreement will, and
will cause its Subsidiaries to, promptly give notice in writing to each
Purchaser of any litigation or proceeding before any court or administrative
body involving the Company or any Subsidiary which, if determined adversely to
the Company or such Subsidiary, would have a Material Adverse Effect on the
Company and the Subsidiaries, taken as a whole.
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<PAGE> 30
5.03 Consummation of the Merger and Tender Offer. The Company shall
cause the Merger to be consummated on the Closing Date and the Tender Offer to
purchase not less than $121,500,000 in principal amount of A+ Notes to be
consummated on the Closing Date.
5.04 Efforts to Obtain NASDAQ Assurances. If the holders are unable
to convert Preferred Shares into Common Stock under the Certificate of
Designation because the Book Value Requirement has not been satisfied, the
Company agrees at the request of a Purchaser to cooperate in a reasonable
manner to seek assurances from NASDAQ, including a waiver of any NASD rule, in
order to facilitate the conversion of Preferred Stock into Common Stock as
contemplated by Section 5 of the Certificate of Designation.
5.05 Expiration of Covenants. The Company's obligations under
Sections 5.01 and 5.02 shall terminate with respect to a Purchaser at such time
as such Purchaser no longer holds any Preferred Stock or Warrants.
ARTICLE VI
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASERS
6.01 Representations by Purchasers. Each Purchaser severally
represents and warrants to the Company that:
(a) It has full power and authority to execute and
deliver this Agreement and the other Basic Documents to which it is a party and
to perform its obligations hereunder and thereunder.
(b) It has taken all action necessary for the
authorization, execution, delivery, and performance of this Agreement and the
other Basic Documents to which it is a party, and its obligations hereunder and
thereunder, and, upon execution and delivery by the Company, this Agreement and
other Basic Documents to which it is a party shall constitute the valid and
binding obligation of such Purchaser, enforceable against such Purchaser in
accordance with their respective terms, except that (i) such enforcement may be
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws, now or hereafter in effect, affecting creditors' rights
generally, and (ii) the remedy of specific performance and injunctive and other
relief may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
(c) There are no claims for brokerage commissions or
finder's fees or similar compensation in connection with the issuance and sale
of Units pursuant to this
24
<PAGE> 31
Agreement based on any arrangement made by or on behalf of such Purchaser and
such Purchaser agrees to indemnify and hold the Company harmless against any
costs or damages incurred as a result of any such claim.
6.02 Sale of Preferred Shares So long as the Preferred Shares
remain outstanding, no holder of the Preferred Shares shall sell, assign or
transfer Preferred Shares unless such holder (a "Seller") shall have (i)
submitted a written offer (the "Offer") to the Company specifying (x) the
number of shares that such Seller proposes to sell, assign or transfer and the
related terms of disposition (y) the Seller's proposed disposition price (the
"Offer Price") and (ii) complied with all other applicable provisions of this
Section 6.02. The Offer shall be effective only upon receipt by the Company.
The Company or its designee (the "Offeree") shall have the right to accept the
Offer and purchase all, but not less than all, of the Preferred Shares subject
to the Offer for the Offer Price by giving the Seller written notice of such
acceptance on or prior to 5:00 eastern time on the 21st day after the Offer was
made (the "Acceptance Date"), whereupon the Offeree shall purchase such number
of shares from the Seller for the Offer Price. Settlement of the transaction
shall occur within 14 days unless extended in writing by the Seller in its sole
discretion, it being understood that if an Offeree has accepted an Offer made
pursuant to this Section 6.02 but fails to purchase all of the Preferred Shares
subject to the Offer on or prior to the required settlement date, all of the
rights of the Company under this Section 6.02 with respect to all holders of
the Preferred Shares shall irrevocably terminate and be of no further force or
effect. At settlement, such Seller shall deliver to the Offeree the
certificate or certificates evidencing the Preferred Shares accepted by the
Offeree duly endorsed for transfer and free and clear of any liens but
otherwise without recourse, representation or warranty. If the Company does
not notify such Seller that it has accepted the Offer within the time specified
above, the Offer shall be deemed to be rejected in its entirety and all such
Preferred Shares subject to the Offer may be disposed of by the Seller for a
price not less than 90% of the Offer Price at any time within ninety days after
the Acceptance Date. The Company shall be entitled to refuse to register on
its records the name of any transferee of any Seller as an owner thereof if
such transferee acquired such shares in violation of this Section 6.02.
Notwithstanding anything herein to the contrary, this Section 6.02
shall not apply to the sale, transfer or assignment by a holder of the
Preferred Shares to any of its affiliates that is a permitted successor or
assign of the holder under this Agreement.
25
<PAGE> 32
ARTICLE VII
CERTAIN SECURITIES LAW MATTERS
7.01 Representations by Purchasers. Each Purchaser severally
represents and warrants to the Company that:
(a) The Purchaser is a "Qualified Institutional Buyer"
within the meaning of Rule 144A under the Securities Act.
(b) The Units are being acquired for such Purchaser's own
account for the purpose of investment and not with a present view to or for
sale in connection with any distribution thereof, subject to the condition that
the disposition of the property of a Purchaser shall be at all times within its
control.
(c) Such Purchaser understands that (i) none of the
Units, the Preferred Shares or the Warrants have been registered under the
Securities Act, (ii) the Preferred Shares and the Warrants must be held
indefinitely unless a subsequent disposition thereof is registered under the
Securities Act or an exemption from registration is available under applicable
securities laws then in effect, and (iii) the Preferred Shares and the Warrants
will bear a legend to such effect and the Company will make a notation on its
transfer books to such effect.
(d) Such Purchaser understands that no public market now
exists for the Preferred Shares or Warrants issued by the Company.
7.02 Restrictions on Transfer. The Preferred Shares and the
Warrants (collectively, the "Restricted Securities") shall be transferable only
if sold pursuant to a registration statement under the Securities Act, (as
hereinafter defined) or pursuant to an exemption from the registration
requirements of the Securities Act.
(a) Restrictive Legend. Each certificate representing
the Restricted Securities shall bear a legend in substantially the following
form:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or under the
securities laws of any state, and may not be sold, or otherwise
transferred, in the absence of such registration or an exemption
therefrom under such Act and under any such applicable state laws."
26
<PAGE> 33
Each certificate representing such Restricted Securities shall bear the
restrictive legend set forth above, in each case unless the restrictions on
transfer provided for in this Section 7.02 shall have ceased and terminated as
to such Restricted Securities.
(b) Termination of Restrictions. The
restrictions imposed by this Section 7.02 upon the transferability of the
Restricted Securities shall cease and terminate as to any particular Restricted
Securities and any securities issued in exchange therefor or upon transfer
thereof when, in the opinion of counsel reasonably acceptable to the Company,
such restrictions are no longer required in order to assure compliance with the
Securities Act, or when such Restricted Securities have been registered under
the Securities Act. Whenever any of such restrictions shall cease and
terminate as to any Restricted Securities, the holder thereof shall be entitled
to receive from the Company, without expense, new certificates not bearing the
legend set forth in Section 7.02(a).
ARTICLE VIII
MISCELLANEOUS
8.01 Indemnification. In addition to the payment of
expenses pursuant to Section 8.05, whether or not the transactions contemplated
hereby shall be consummated, the Company agrees to defend, indemnify, pay and
hold harmless, each Purchaser, and the officers, directors, employees, agents
and affiliates of each Purchaser (collectively, the "Indemnitees") from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses and disbursements of any
kind or nature whatsoever (including, without limitation, the reasonable fees
and disbursements of counsel for such Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or threatened by
any Person, whether or not any such Indemnitee shall be designated as a party
or a potential party thereto), whether direct, indirect or consequential and
whether based on any federal, state or foreign laws, statutes, rules or
regulations (including, without limitation, securities and commercial laws,
statutes, rules or regulations), on common law or equitable cause or on
contract or otherwise, that may be imposed on, incurred by, or asserted against
any such Indemnitee, in any manner relating to or arising out of this
Agreement, the other Basic Documents, the Credit Agreement, the Merger, the
Tender Offer or the transactions contemplated hereby or thereby (including,
without limitation, such Purchaser's agreement to purchase the Units or the use
or intended use of the proceeds of such purchase) or the statements contained
in any commitment letter delivered by such Purchaser to the Company with
respect thereto (collectively called the "Indemnified Liabilities"); provided
that the Company shall not have any obligation to any Indemnitee hereunder with
respect to any Indemnified Liabilities to the extent such Indemnified
Liabilities arise from the gross negligence or willful misconduct of
27
<PAGE> 34
that Indemnitee as determined by a final judgment of a court or competent
jurisdiction. To the extent that the undertaking to defend, indemnify, pay and
hold harmless set forth in the preceding sentence may be unenforceable because
it is violative of any law or public policy, the Company shall contribute the
maximum portion that it is permitted to pay and satisfy under applicable law to
the payment and satisfaction of all Indemnified Liabilities incurred by the
Indemnitees or any of them.
8.02 No Waiver; Cumulative Remedies. No failure or delay
on the part of any Purchaser, or any other holder of any Security in exercising
any right, power or remedy hereunder or thereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy hereunder or thereunder. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
8.03 Amendments, Waiver and Consents. No amendment,
modification or addition to this Agreement, and no waiver of or consent to
noncompliance with any covenant or other provision of this Agreement shall be
effective unless in writing and duly executed by the party against whom
enforcement of such amendment, modification, addition, waiver or consent is
sought. Any waiver or consent may be given subject to satisfaction of
conditions stated therein and any waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.
8.04 Notices. All notices, demands, requests, or other
communications which may be or are required to be given, served, or sent by any
party to any other party pursuant to this Agreement shall be in writing and
shall be mailed by first-class, registered or certified mail, return receipt
requested, postage prepaid, or transmitted by hand delivery (including delivery
by courier), or facsimile transmission, addressed as follows:
(a) If to the Company:
Metrocall, Inc.
6677 Richmond Highway
Alexandria, Virginia 22306
Attention: Vincent D. Kelly
Facsimile: 703-768-9625
with a required copy (which shall not
constitute notice) to:
Wilmer, Cutler & Pickering
2445 M Street, NW
Washington, DC 20037
28
<PAGE> 35
Attention: George P. Stamas, Esq.
Facsimile: 202-663-6363
(b) If to Purchasers:
To the persons and at the addresses
set forth on Exhibit A hereto.
Each party may designate by notice in writing a new address to which any
notice, demand, request or communication may thereafter be so given, served or
sent. Each notice, demand, request, or communication which shall be mailed,
delivered or transmitted in the manner described above shall be deemed
sufficiently given, served, sent and received for all purposes at such time as
it is delivered to the addressee (with the return receipt, the delivery
receipt, or the affidavit of messenger being deemed conclusive (but not
exclusive) evidence of such delivery) or at such time as delivery is refused by
the addressee upon presentation.
8.05 Expenses. Whether or not the transactions
contemplated hereby shall be consummated, the Company agrees to pay promptly
(a) all the actual costs and expenses of preparation of the Basic Documents;
(b) all the costs of furnishing all opinions by counsel for Company (including,
without limitation, any opinions required to be delivered to the Purchasers
hereunder) and of the Company's performance of, and compliance with, all
agreements and conditions on its part to be performed or complied with pursuant
to the Basic Documents; (c) the reasonable fees, expenses and disbursements of
counsel to each Purchaser (including allocated costs of internal counsel) in
connection with the negotiation, preparation, execution and administration of
the Basic Documents and any consents, amendments, waivers or other
modifications hereto or thereto and any other documents or matters requested by
the Company; (d) all other actual costs and expenses (including fees, not to
exceed $5,000 of one accounting firm to review the Company's public disclosure
documents) incurred by any Purchaser in connection with the negotiation,
preparation and execution of the Basic Documents and the transactions
contemplated hereby and thereby; and (e) all costs and expenses, including
reasonable attorneys' fees (including allocated costs of internal counsel) and
costs of settlement, incurred by any Purchaser in enforcing any obligations of
or in collecting any payments due from the Company hereunder or under the other
Basic Documents by reason of any breach or default by the Company or in
connection with any refinancing or restructuring of the arrangements provided
under the Basic Documents in the nature of a "work-out" or pursuant to any
insolvency or bankruptcy proceedings.
8.06 Binding Effect; Assignment. This Agreement shall be
binding upon and inure to the benefit of the Company and the Purchasers and
their respective successors and
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<PAGE> 36
assigns, except that the Company shall not have the right to assign its rights
hereunder or any interest herein without the prior written consent of each of
the Purchasers.
8.07 Survival of Representations and Warranties. All
representations and warranties made in this Agreement or any other Basic
Document, shall survive the execution and delivery hereof and thereof and the
issuance of the Units. Notwithstanding anything in this Agreement or implied
by law to the contrary, the agreements of Company set forth in Sections 2.05,
4.15, 8.01, and 8.05 shall survive the payment or redemption of any Securities
and the termination of this Agreement.
8.08 Severability . In case any provision in or
obligation under this Agreement or the Securities shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.
8.09 Obligations Several: Independent Nature of
Purchasers' Rights. The obligations of each Purchaser hereunder is several and
no Purchaser shall be responsible for the obligations of any other Purchaser
hereunder. Nothing contained herein or in any other Basic Document, and no
action taken by Purchasers pursuant hereto or thereto, shall be deemed to
constitute Purchasers as a partnership, an association, a joint venture or any
other kind of entity. Each Purchaser shall be entitled to protect and enforce
its rights arising out of this Agreement or the other Basic Documents and its
shall not be necessary for any other Purchaser to be joined as an additional
party in any proceeding for such purpose.
8.10 Prior Agreements. This Agreement constitutes the
entire agreement between the parties and supersedes any prior understandings or
agreements concerning the subject matter hereof.
8.11 Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Delaware (excluding
the choice of laws provisions thereof).
8.12 Headings. Article, Section and subsection headings
in this Agreement are included herein for convenience of reference only and
shall not constitute a part of this Agreement for any other purpose.
8.13 Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and
the same instrument, and each of the parties hereto may execute this Agreement
by signing any such counterpart.
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<PAGE> 37
8.14 Further Assurances. From and after the date of this
Agreement, upon the request of any Purchaser, the Company and each Subsidiary
shall execute and deliver such instruments, documents and other writings as may
be necessary or desirable to confirm and carry out and to effectuate fully the
intent and purposes of this Agreement, the Preferred Shares, the Warrants, the
Warrant Agreement, the Registration Rights Agreement and the other agreements
and instruments contemplated hereby.
8.15 Redemption of Foreign-Owned Shares. The Company
shall not redeem any shares of capital stock held by UBS Capital LLC or any of
its affiliates, pursuant to Section 4.5(b) of the Company's Amended and
Restated Certificate of Incorporation (or any similar provision), unless and
until the Company shall have taken all other action which could otherwise bring
the company into compliance with Sections 310(a) and 310(b) of the
communications Act of 1934, as amended, or any similar or successor federal
statutes (the "Communications Act"), including, without limitation, (i) the
application for a waiver thereof by the FCC, (ii) the redemption of any and all
shares of capital stock of owned by other persons and (iii) the transfer of any
FCC licenses held by the Company to a wholly-owned Subsidiary of the Company.
In the event the Company shall have taken all actions set forth in the previous
sentence, and the Company shall remain in violation of Section 310(a) or 310(b)
of the Communications Act, the Company may redeem the minimum number of
Preferred Shares, Conversion Shares and/or Warrant Shares held by UBS Capital
LLC or any of its affiliates as would be necessary to bring the Company into
compliance therewith; provided, however, that any such redemption shall be at a
price per share equal to (A) in the case of Preferred Shares, the Stated Value
plus all accrued and unpaid dividends thereon, (B) in the case of Conversion
Shares, the greater of (1) the fair market value of a share of Common Stock at
the time of such redemption and (2) the Conversion Price (as defined in the
Certificate of Designation) per share on the date of conversion into such
Conversion Shares and (C) in the case of Warrant Shares, the greater of (1) the
fair market value of a share of Common Stock at the time of such redemption and
(2) the Current Market Price (as defined in the Warrant Agreement) per share on
the date of exercise for such Warrant Shares.
31
<PAGE> 38
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed on its behalf as of the date first above written.
METROCALL, INC.
By: /s/ Vincent D. Kelly
-------------------------------------
Vincent D. Kelly
Chief Financial Officer
PURCHASERS
JOHN HANCOCK MUTUAL LIFE INSURANCE
COMPANY
By: /s/ Daniel C. Budde
-------------------------------------
Name: Daniel C. Budde
Title: Investment Officer
SUNAMERICA, INC.
By: /s/ Peter McMillan
-------------------------------------
Name: Peter McMillan
Title: Authorized Agent
Metrocall, Inc.
Unit Purchase Agreement
Signature Page 1
31
<PAGE> 39
UBS CAPITAL LLC
By: /s/ Michael Green
-------------------------------------
Name: Michael Green
Title: Managing Director
By: /s/ Justin S. Maccarone
-------------------------------------
Name: Justin S. Maccarone
Title: Managing Director
Metrocall, Inc.
Unit Purchase Agreement
Signature Page 1
32
<PAGE> 40
EXHIBIT A
UNIT PURCHASE AGREEMENT
PURCHASERS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Units Aggregate
----- ---------
Purchaser Address for Notices Purchased Purchase Price
--------- ------------------- --------- --------------
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
John Hancock Bond and Corporate Finance Group (T-57) 50,000 $12,500,000
Mutual Life 200 Clarendon Street
Insurance Company Boston, MA 02117
Attn: Daniel C. Budde
Investment Officer
Facsimile: (617) 572-1606
- --------------------------------------------------------------------------------------------------------------
SunAmerica, Inc. One SunAmerica Center 50,000 $12,500,000
Century City
Los Angeles, CA
Attn: Peter McMillan
Executive Vice President and
Chief Investment Officer
Facsimile: (310) 772-6150
- --------------------------------------------------------------------------------------------------------------
UBS Capital LLC UBS Capital LLC 59,600 $14,900,000
299 Park Avenue
New York, New York 10171
Attn: Michael Greene and
James A. Breckenridge
Facsimile: (212) 821-6333
- --------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 1
CERTIFICATE OF DESIGNATION, NUMBER, POWERS,
PREFERENCES AND RELATIVE, PARTICIPATING,
OPTIONAL AND OTHER RIGHTS OF
SERIES A CONVERTIBLE PREFERRED STOCK
OF
METROCALL, INC.
Metrocall, Inc. (the "Corporation"), a corporation organized
and existing under the General Corporation Law of the State of Delaware, hereby
certifies that, pursuant to the provisions of Section 151 of the General
Corporation Law of the State of Delaware, its Board of Directors, at a meeting
duly held on November 13, 1996, adopted the following resolution:
WHEREAS, the Board of Directors of the Corporation is
authorized by the Amended and Restated Certificate of Incorporation to issue up
to 1,000,000 shares of preferred stock in one or more classes or series and, in
connection with the creation of any class or series, to fix by the resolutions
providing for the issuance of shares the powers, designations, preferences and
relative, participating, optional or other rights of the class or series and
the qualifications, limitations or restrictions thereof; and
WHEREAS, it is the desire of the Board of Directors of the
Corporation, pursuant to such authority, to authorize and fix the terms and
provisions of a series of preferred stock and the number of shares constituting
the series;
NOW, THEREFORE, BE IT RESOLVED, that there is hereby
authorized a series of preferred stock on the terms and with the provisions
herein set forth on Annex A attached to this resolution.
/s/ SHIRLEY B. WHITE
----------------------------
Shirley B. White
Assistant Secretary
ATTEST:
/s/ VINCENT D. KELLY
- ---------------------------
Vincent D. Kelly
Chief Financial Officer
<PAGE> 2
ANNEX A
SERIES A CONVERTIBLE PREFERRED STOCK
The powers, designations, preferences and relative,
participating, optional or other rights of the Series A Convertible Preferred
Stock of Metrocall, Inc. (the "Corporation") are as follows:
1. DESIGNATION AND AMOUNT.
This series of preferred stock shall be designated as "Series A
Convertible Preferred Stock," and shall have $0.01 par value per share. The
number of authorized shares constituting this series shall be 810,000 shares.
Shares of the Series A Convertible Preferred Stock shall have a stated value of
$250 per share (the "Stated Value").
2. DIVIDENDS.
(a) Right to Receive Dividends. Holders of the Series A
Convertible Preferred Stock shall be entitled to receive, when and as declared
by the Board of Directors of the Corporation (the "Board of Directors"), to the
extent permitted by the General Corporation Law of the State of Delaware,
cumulative dividends at the rate, in the form, at the times and in the manner
set forth in this Section 2. Such dividends shall accrue on any given share
from the day of issuance of such share and shall accrue from day to day whether
or not earned or declared.
(b) Form of Dividend. Except as provided in Section
9(b), any dividend payment made with respect to the Series A Convertible
Preferred Stock may be made, at the sole discretion of the Board of Directors,
in cash out of funds legally available for such purpose or by issuing the
number of shares of Series A Convertible Preferred Stock equal to the amount of
the dividend divided by the Stated Value. Any such dividend payment may be
made, in the sole discretion of the Board of Directors, partially in cash and
partially in shares of Series A Convertible Preferred Stock determined in
accordance with the preceding formula; provided, that, in the event that any
such dividend payment is made partially in cash and partially in shares of
Series A Convertible Preferred Stock, each holder of Series A Convertible
Preferred Stock shall receive a ratable amount of cash and Series A Convertible
Preferred Stock that is proportionate to the amount of Series A Convertible
Preferred Stock held by such holder on which such dividend is paid. All shares
of Series A Convertible Preferred Stock issued as a dividend shall be fully
paid and nonassessable.
(c) Dividend Rate. The dividend rate on the Series A
Convertible Preferred Stock shall be 14% of the Stated Value per share per
annum; provided, that, upon the occurrence and during the continuance of any
Triggering Event (as defined in Section 8 hereof), the dividend rate
-1-
<PAGE> 3
on the Series A Convertible Preferred Stock shall be 16% of the Stated Value
per share per annum (such rate, as applicable, the "Dividend Rate").
(d) Payment of Dividends. Dividends shall be payable in
arrears, when and as declared by the Board of Directors, on May 15 and November
15 of each year, commencing May 15, 1997 (each such semiannual payment date a
"Dividend Payment Date"), except that if any such date is a Saturday, Sunday or
legal holiday then such dividend shall be payable on the first immediately
succeeding calendar day which is not a Saturday, Sunday or legal holiday.
Dividends shall accrue on each share of Series A Convertible Preferred Stock
from the date of issuance of such share which, in the case of the initial
issuance of Series A Preferred Stock, shall be from November 15, 1996 (the
"Issuance Date"), and, after payment of a dividend as required hereunder, from
and after each Dividend Payment Date based on the number of days elapsed and a
365-day year. The dividend payable on the first Dividend Payment Date with
respect to any share of Series A Convertible Preferred Stock shall be the pro
rata portion of the Dividend Rate based upon the number of days from and
including the Issuance Date, up to and including such first Dividend Payment
Date and a 365-day year. Each dividend shall be paid to the holders of record
of shares of the Series A Convertible Preferred Stock as they appear on the
books of the Corporation on such record date, not more than 45 days nor fewer
than 10 days preceding the respective Dividend Payment Date, as shall be fixed
by the Board of Directors.
(e) Dividend Preference. Dividends on the Series A
Convertible Preferred Stock shall be payable before any dividends or
distributions or other payments shall be paid or set aside for payment upon the
common stock, par value $0.01 per share, of the Corporation (the "Common
Stock"), the variable common rights ("VCRs") issued pursuant to the Variable
Common Rights Agreement dated November 15, 1996 between the Corporation and
First Union National Bank of Virginia as Rights Agent, or any other stock
ranking on liquidation or as to dividends or distributions junior to the Series
A Convertible Preferred Stock (any such stock or VCRs, together with the Common
Stock, being referred to hereinafter as "Junior Stock"), other than a dividend,
distribution or payment paid solely in shares of Common Stock or other Junior
Stock that is not Redeemable Stock. If at any time dividends on the
outstanding Series A Convertible Preferred Stock at the rate set forth herein
shall not have been paid or declared and set apart for payment with respect to
all preceding and current periods, the amount of the deficiency shall be fully
paid or declared and set apart for payment, before any dividend, distribution
or payment shall be declared or paid upon or set apart for the shares of any
other class or series of stock of the Corporation, other than a dividend,
distribution or payment paid solely in shares of Common Stock or other Junior
Stock that is not Redeemable Stock. The term "Redeemable Stock" shall mean any
equity security that by its terms or otherwise is required to be redeemed for
cash on or prior to the Final Redemption Date (as defined in Section 7) or is
redeemable for cash at the option of the holder thereof at any time prior to
the Final Redemption Date.
If there shall be outstanding shares of any Parity Securities,
no full dividends shall be declared or paid or set apart for payment on any
such Parity Securities for any period unless full cumulative dividends have
been or contemporaneously are declared and paid or declared and a sum
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or additional shares of Series A Convertible Preferred Stock as permitted
hereunder sufficient for the payment thereof set apart for such payment on the
Series A Convertible Preferred Stock for all dividend periods terminating on or
prior to the date of payment of such dividends; provided that in no event shall
any dividends be declared or paid in cash on Parity Securities unless dividends
in cash of not less than a ratable amount are declared and paid on Series A
Convertible Preferred Stock. The term "Parity Securities" shall mean any class
or series of capital stock which is entitled to share ratably with the Series A
Convertible Preferred Stock in the payment of dividends, including
accumulations, if any, and, in the event that the amounts payable thereon on
liquidation are not paid in full, are entitled to share ratably with the Series
A Convertible Preferred Stock in any distribution of assets; provided that
Parity Securities shall not include any shares of Series A Convertible
Preferred Stock issued as dividends pursuant to this Section 2.
If dividends on the Series A Convertible Preferred Stock and
on any other series of Parity Securities are in arrears, in making any dividend
payment on account of such arrears, the Corporation shall make payments ratably
(and ratably as to cash, in-kind or other payments) upon all outstanding shares
of the Series A Convertible Preferred Stock and shares of such other Parity
Securities in proportion to the respective amounts of dividends in arrears on
the Series A Convertible Preferred Stock and on such other series of Parity
Securities to the date of such dividend payment.
3. LIQUIDATION PREFERENCE.
In the event of any bankruptcy, liquidation, dissolution or
winding up of the Corporation, either voluntary or involuntary, each holder of
Series A Convertible Preferred Stock at the time thereof shall be entitled to
receive, prior and in preference to any distribution of any of the assets or
funds of the Corporation to the holders of the Common Stock or other Junior
Stock by reason of their ownership of such stock, an amount per share of Series
A Convertible Preferred Stock equal to the Stated Value plus any accrued and
unpaid dividends to the date of liquidation. If the assets and funds legally
available for distribution among the holders of Series A Convertible Preferred
Stock shall be insufficient to permit the payment to the holders of the full
aforesaid preferential amount, then the assets and funds shall be distributed
ratably among holders of Series A Convertible Preferred Stock in proportion to
the number of shares of Series A Convertible Preferred Stock owned by each
holder. If the assets and funds of the Corporation available for distribution
to stockholders upon any bankruptcy, liquidation, dissolution or winding up of
the affairs of the Corporation, whether voluntary or involuntary, shall be
insufficient to permit the payment to holders of the full aforesaid
preferential amount and there shall be any outstanding shares of Parity
Securities, the holders of Series A Convertible Preferred Stock and the holders
of such other Parity Securities shall share ratably (and ratably as to cash or
other distributions) in any distribution of assets of the Corporation in
proportion to the full respective preferential amounts to which they are
entitled.
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4. VOTING RIGHTS.
In addition to any voting rights provided elsewhere herein or
in the Corporation's Amended and Restated Certificate of Incorporation, as it
may be amended or restated from time to time (the "Certificate of
Incorporation"), and any voting rights provided by law, the holders of shares
of Series A Convertible Preferred Stock shall have the following voting rights:
(a) Election of Directors
(i) Subject to the terms hereof, the holders of
the Series A Convertible Preferred Stock shall have the right to elect two
directors (in addition to the directors elected by holders of Common Stock or
any other capital stock of the Corporation). Such directors shall be elected
as follows:
(A) The holder or holders of a majority of
shares of the sub-series consisting of the Accreted Number of Shares
held by the purchaser of the largest number shares as designated on
Exhibit A of the Unit Purchase Agreement dated as of November 15,
1996, among the Corporation and the other parties thereto (the "Unit
Purchase Agreement") and the direct or indirect transferees of such
purchaser (collectively, the "Largest Initial Holder") shall, so long
as such shares are outstanding, have the right to vote as a single
class based on the number of shares of Series A Convertible Preferred
Stock held by each holder, to elect one director. The term "Accreted
Number of Shares" shall mean the number of shares of Series A
Convertible Preferred Stock issued to a holder on the Issuance Date
plus the number of shares of Series A Convertible Preferred Stock paid
as dividends in respect of such shares (including dividends on
dividend shares).
(B) The holder or holders of a majority of
shares of the sub-series consisting of the Accreted Number of Shares
issued to the other two purchasers as designated on Exhibit A of the
Unit Purchase Agreement, and the direct or indirect transferees of
such purchasers (collectively, the "Designated Holders") shall, so
long as such shares are outstanding, have the right to vote as a
single class based on the shares of Series A Convertible Preferred
Stock held by each Designated Holder, to elect one director.
(ii) Any director elected by the holders of shares
of Series A Convertible Preferred Stock, including any director elected
pursuant to Section 4(a)(iii) hereof, shall be referred to herein as a "Series
A Preferred Director." The initial terms of the two directors to be appointed
pursuant to Section 4(a)(i) will commence upon their election by the Series A
Convertible Preferred Stock and shall expire at the 1999 annual meeting of
stockholders of the Corporation. Upon expiration of the initial terms of such
Series A Preferred Directors, so long as the Series A Convertible Preferred
Stock is outstanding, the holders of the Series A Convertible Preferred Stock
shall have the right to elect two Series A Preferred Directors to replace such
directors in the same manner described above in Section 4(a)(i). A Series A
Preferred Director so elected shall hold office for a term expiring at the
annual meeting of stockholders in the third year following the election of
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<PAGE> 6
such director; provided that upon any termination of the right of the
applicable holders of Series A Convertible Preferred Stock to designate or vote
for a Series A Preferred Director, the term of office of such director shall
terminate. Notwithstanding the foregoing, a Series A Preferred Director
elected under Section 4(a)(i) shall serve until such Series A Preferred
Director's successor is duly elected and qualified or until such director's
earlier removal as provided in Section 4(a)(iv) or death or resignation and, in
the event a vacancy occurs, a replacement Series A Preferred Director shall be
selected as provided in Section 4(a)(i).
(iii) So long as the Series A Convertible Preferred
Stock is outstanding, if a Triggering Event (as defined in Section 8 hereof)
has occurred and is continuing, the holders of shares of Series A Convertible
Preferred Stock (who will have one vote for each share held) shall have the
right, voting as a single class, to elect an additional number of Series A
Preferred Directors equal to such number of additional directors as will make
the ratio of the number of directors elected by the holders of the Series A
Convertible Preferred Stock to the number of all directors of the Corporation
equal or exceed 4:10. Each Series A Preferred Director selected pursuant to
this Section 4 (a)(iii) shall serve indefinitely until such director's removal
as provided in Section 4(a)(iv) or death or resignation and, in the event a
vacancy occurs, a replacement Series A Preferred Director shall be selected as
provided in this Section 4(a)(iii). At such time as the Triggering Event that
enabled the holders of Series A Convertible Preferred Stock to elect additional
Series A Preferred Directors no longer exists, and no other Triggering Event
has occurred and is continuing, the Series A Preferred Directors appointed
pursuant to this Section 4(a)(iii) shall resign and the right of the holders of
Series A Convertible Preferred Stock under this Section 4(a)(iii) to appoint
Series A Preferred Directors shall lapse unless and until another Triggering
Event occurs.
(iv) Except as provided in Section 4(a)(vi), a
Series A Preferred Director may be removed by, and shall not be removed except
by, the vote of the holders of record of a majority of the outstanding shares
of Series A Convertible Preferred Stock, voting together as a single class,
except that any Series A Preferred Director referred to in Section 4(a)(i)
shall be removed only by the holder or holders of Series A Convertible
Preferred Stock entitled to designate such director as provided therein.
(v) The Corporation shall at all times reserve
and keep available a sufficient number of vacant seats on the Board of
Directors solely for the purpose of enabling the holders of the Series A
Convertible Preferred Stock to designate Series A Preferred Directors as
provided in this Section 4(a) and, if at any time the number of vacant seats
shall not be sufficient, the Corporation will take such corporate action as
shall be necessary to increase the authorized number of board seats for this
purpose.
(vi) Notwithstanding anything herein to the
contrary, a majority of the Board of Directors of the Corporation (excluding
all Series A Preferred Directors) may remove any Series A Preferred Director
that is an officer, director, or employee or holder of 10% or more of the
voting securities of any entity engaged directly or indirectly in the paging
business and, upon delivery of written notice by the Corporation to such Series
A
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<PAGE> 7
Preferred Director, such Series A Preferred Director shall resign and the
holders of Series A Convertible Preferred Stock entitled to designate or vote
for such Series A Preferred Director shall be entitled to designate or vote for
a replacement Series A Preferred Director; provided, however, that in no event
shall this Section 4(a)(vi) apply to any Series A Preferred Director that is an
officer, director, or employee of any of the initial purchasers of the Series A
Convertible Preferred Shares pursuant to the Unit Purchase Agreement;
(b) Certain Corporate Actions.
(i) So long as the Series A Convertible Preferred
Stock is outstanding, the Corporation shall not, without first obtaining the
affirmative vote or written consent of the holders of not less than 75% of the
then outstanding shares of Series A Convertible Preferred Stock, voting as a
single class:
(A) amend, repeal, modify or supplement
any provision of the Certificate of Incorporation, the Fourth Amended
and Restated Bylaws of the Corporation, as in effect on November 15,
1996, or any successor bylaws or this Certificate of Designation,
Number, Powers, Preferences and Relative, Participating, Optional and
Other Rights of Series A Convertible Preferred Stock ("Certificate of
Designation"), if such amendment, repeal, modification or supplement
in any way adversely affects the powers, designations, preferences or
other rights of the Series A Convertible Preferred Stock;
(B) authorize or effect, in a single
transaction or through a series of related transactions, (1) a
liquidation, winding up or dissolution of the Corporation or adoption
of any plan for the same; or (2) any direct or indirect purchase or
other acquisition by the Corporation of any capital stock (other than
the Series A Convertible Preferred Stock) of the Corporation held by
any person or entity or group (as that term is used in Section
13(d)(3) of the Securities Exchange Act of 1934, as amended) of
persons or entities (in each case, a "Beneficial Owner"), which
Beneficial Owner is the beneficial owner (by voting power or
otherwise) of five percent (5%) or more of the securities of the
Corporation ordinarily having the right to vote in the election of
directors;
(C) declare or pay or set aside for payment
any dividend or distribution or other payment (other than a dividend
or distribution paid solely in shares of Common Stock or other Junior
Stock that is not Redeemable Stock) upon the Common Stock, upon the
VCRs or upon any other Junior Stock, nor redeem, purchase or otherwise
acquire any Common Stock, VCRs or other Junior Stock for any
consideration (or pay or make available any moneys, whether by means
of a sinking fund or otherwise, for the redemption of or other
distribution or payment with respect to any shares of any Common
Stock, VCRs or other Junior Stock), except by conversion or exchange
of Common Stock, VCRs, or other Junior Stock for such stock that is
not Redeemable Stock.
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<PAGE> 8
(D) authorize or permit the Corporation
or any subsidiary of the Corporation, (i) to issue any shares of
Series A Convertible Preferred Stock except on the Issuance Date or
in payment of dividends as provided in Section 2 above; or (ii) to
issue any Parity Securities.
(ii) So long as the Series A Convertible Preferred
Stock is outstanding, the Corporation shall not, without first obtaining the
affirmative vote or written consent of the holders of a majority of the then
outstanding shares of Series A Convertible Preferred Stock, voting as a single
class:
(A) authorize or effect in a single
transaction or through a series of related transactions (whether by
purchase, lease, exchange, issuance of stock or other equity or debt
security, merger, reorganization or any other method, other than
transactions that would constitute a Sale of the Company (as defined
below)), any acquisition by, merger or other transaction between, the
Corporation or any of its Subsidiaries and any other Person, which
Person shall then become consolidated or otherwise combined with the
Corporation or any such Subsidiary in accordance with generally
accepted accounting principles ("GAAP"), including but not limited to,
any acquisition by the Corporation or any of its Subsidiaries of all
or any substantial part of the assets of any other Person, if the
aggregate consideration (including cash, the fair market value of any
securities or other property, and all Debt assumed by the Corporation
or any of its subsidiaries after giving effect to such transaction)
paid or otherwise assumed or incurred in such transaction exceeds 50%
of the Corporation's total market capitalization (comprised of
outstanding debt, and the value of all outstanding equity securities)
immediately prior to such transaction. The foregoing provisions shall
not apply to the merger of A+ Network, Inc. with and into the
Corporation; a merger of a wholly-owned subsidiary of the Corporation
with and into the Corporation in which the Corporation is the
surviving entity so long as the subsidiary was a subsidiary of the
Corporation on November 15, 1996, has not merged or consolidated with
another entity after November 15, 1996 and the Corporation is the
surviving corporation; the merger of A+ Network of Shreveport, Inc.
with and into the Corporation; or a merger between one subsidiary of
the Corporation with and into another subsidiary of the Corporation;
or
(B) authorize or effect any Sale of the
Company in a single transaction or through a series of related
transactions, unless the Corporation shall, concurrently with the
consummation of any Sale of the Company, redeem all outstanding shares
of the Series A Convertible Preferred Stock pursuant to Section 6(a),
except for shares held by holders that have elected to exercise the
conversion rights provided for under Section 5(h). For purposes
hereof, "Sale of the Company" means (A) any sale, lease, exchange or
other transfer (in one transaction or a series of related
transactions) of all, or substantially all, the assets of the
Corporation (other than to one or more wholly owned subsidiaries of
the Corporation); (B) the merger or consolidation of the Corporation
with or into another corporation where such other corporation is the
surviving corporation or (C) the merger or consolidation of another
corporation with and into the Corporation, with the Corporation as the
surviving corporation, with the effect that immediately after such
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<PAGE> 9
transaction any Beneficial Owner shall have become the beneficial
owner of securities of the surviving corporation of such merger or
consolidation representing a majority of the combined voting power of
the outstanding securities of the surviving corporation ordinarily
having the right to vote in the election of directors.
(c) Means of Voting. The rights of the holders of
Series A Convertible Preferred Stock under this Section 4 may be exercised (i)
with respect to the election of the Series A Preferred Directors pursuant to
Section 4(a), at a meeting of the holders of the Series A Convertible Preferred
Stock or by written consents executed by the holders entitled to vote therefor
and delivered to the Secretary or Assistant Secretary of the Corporation; (ii)
at any meeting of stockholders of the Corporation for the election of
directors; (iii) at a meeting of the holders of shares of such Series A
Convertible Preferred Stock, called for the purpose by the Corporation or by
the holders of record of 25% or more of the outstanding shares of the Series A
Convertible Preferred Stock, pursuant to requests delivered in writing to the
Secretary or Assistant Secretary of the Corporation; or (iv) by written consent
signed by the holders of the requisite percentage of the then outstanding
shares of the Series A Convertible Preferred Stock, delivered to the Secretary
or Assistant Secretary of the Corporation, it being understood that a Series A
Preferred Director selected pursuant to Section 4(a)(i) may be designated by a
written consent executed by holders of a majority of the applicable sub-series
of Series A Convertible Preferred Stock referred to in Section 4(a)(i)(A) or
Section 4(a)(i)(B), as the case may be. Except to the extent otherwise
provided herein or to the extent that holders of 75% of the Series A
Convertible Preferred Stock decide otherwise, any meeting of the holders of
Series A Convertible Preferred Stock shall be conducted in accordance with the
provisions of the By-Laws of the Corporation applicable to meetings of
stockholders. In the event of a conflict or inconsistency between the By-Laws
of the Corporation and any term of this Certificate of Designation, including,
but not limited to this Section 4, the terms of this Certificate of Designation
shall prevail.
5. CONVERSION
Shares of Series A Convertible Preferred Stock may be
converted into shares of Common Stock, on the terms and conditions set forth in
this Section 5.
(a) Optional Conversion. Commencing on November 15, 2001
(except as to any shares which shall have been called for redemption), and if
the Conversion Price determined in accordance with Section 5(c) below is equal
to or greater than the book value per share (the "Book Value") of the Common
Stock determined in accordance with GAAP as of the end of the most recent
fiscal quarter for which the Corporation has filed reports with the Securities
and Exchange Commission ("SEC") (the "Book Value Requirement"), each holder (or
group of affiliated holders under common control) of shares of Series A
Convertible Preferred Stock may, upon 30 days' notice to the Corporation,
convert all, but not less than all, such shares held by such holder and its
affiliated holders under common control into the number of shares of Common
Stock determined by dividing (x) the Stated Value multiplied by the number of
shares surrendered for conversion plus any accrued
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but unpaid dividends on such shares, by (y) the Conversion Price on the date of
conversion determined in accordance with Section 5(c) below. Notwithstanding
the foregoing, shares of the Series A Convertible Preferred Stock may be
converted into Common Stock at the Conversion Price even if such Conversion
Price is less than Book Value if such conversion would not violate National
Association of Securities Dealers ("NASD") Rule 4460(i)(1)(D)(ii) or any
successor provision and the holders of the Series A Convertible Preferred Stock
will have the right on a pro rata basis to convert less than all of their
shares (ratably or as otherwise agreed by such holders) at a Conversion Price
less than Book Value, provided, in either case, that the Corporation has
received an opinion of counsel reasonably satisfactory in form and substance to
the Corporation or assurances from Nasdaq to the effect that such conversion is
permitted by NASD rules;
(b) Change of Control. (i) If a Change of Control
occurs, then on any date following such Change of Control that the Book Value
Requirement is satisfied, each holder of shares of Series A Convertible
Preferred Stock may convert all, but not less than all, such shares held by
such holder into the number of fully paid and nonassessable shares of Common
Stock determined by dividing (x) the Stated Value multiplied by the number of
shares surrendered plus any accrued but unpaid dividends on such shares by (y)
the Conversion Price on the date of conversion determined in accordance with
Section 5(c) below. Notwithstanding the foregoing, shares of the Series A
Convertible Preferred Stock may be converted into Common Stock even if the
Conversion Price is less than Book Value if such conversion would not violate
NASD Rule 4460(i)(1)(D)(ii) or any successor provision, and the holders of the
Series A Convertible Preferred Stock will have the right on a pro rata basis to
convert less than all of their shares (ratably or as otherwise agreed by such
holders) at a Conversion Price less than Book Value, provided, in either case,
that the Corporation has received an opinion of counsel reasonably satisfactory
in form and substance to the Corporation or assurances from Nasdaq to the
effect that such conversion is permitted by NASD rules.
(ii) For the purposes of this Section 5(b) "Change
of Control" means the occurrence of one or more of the following events:
(A) a Beneficial Owner shall have become
the beneficial owner of a majority (by voting power or otherwise) of
the securities of the Corporation ordinarily having the right to vote
in the election of directors;
(B) during any consecutive three-year
period commencing on or after September 27, 1995, individuals who at
the beginning of such period constituted the Board of Directors
(together with any directors who are members of such Board of
Directors on September 27, 1995, any Series A Preferred Director and
any new directors whose election by such Board of Directors or whose
nomination for election by the stockholders of the Corporation was
approved by a vote of 66 2/3% of the directors then still in office
who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease
for any reason to constitute a majority of the Board of Directors then
in office;
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(C) any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of
all, or substantially all, the assets of the Corporation to any
Beneficial Owner (other than any wholly owned subsidiary of the
Corporation);
(D) the merger or consolidation of the
Corporation with or into another corporation or the merger of another
corporation into the Corporation with the effect that immediately
after such transaction any Beneficial Owner shall have become the
beneficial owner of securities of the surviving corporation of such
merger or consolidation representing a majority of the combined voting
power of the outstanding securities of the surviving corporation
ordinarily having the right to vote in the election of directors; or
(E) the adoption of a plan leading to
the liquidation or dissolution of the Corporation;
provided, however, that none of the
following, in itself, constitutes or will constitute a Change of
Control within the meaning of this Paragraph: (1) prior to or under
the merger of A+ Network, Inc. with and into the Corporation (the "A+
Merger"), the existence or termination of the Voting Agreement dated
as of August 31, 1996 (the "Voting Agreement"), among the Corporation
and the other parties thereto, (2) the beneficial ownership by the
Stockholders (as such term is defined in the Voting Agreement),
collectively, of a majority of the outstanding shares of Common Stock,
(3) the sale or disposition of any securities of the Corporation by,
or other decrease in the percentage ownership in any class of such
securities of, any Stockholder or Stockholders, or (4) the purchase or
acquisition of any securities of the Corporation by, or other increase
in the percentage ownership in any class of such securities of, any
Stockholder or Stockholders; provided further, however, that,
notwithstanding the foregoing, (a) the beneficial ownership by any
individual Stockholder, by the Metrocall Group, by the FirstPAGE Group
(as such terms are defined in the Voting Agreement), or by any other
group (as defined above) of which any Stockholder is a part, of a
majority (by voting power or otherwise) of securities of the
Corporation ordinarily having the right to vote in the election of
directors, or (b) any transaction or event that constitutes a "Rule
13e-3 transaction" within the meaning of Rule 13e-3 (a) (3) of the SEC
(or that would constitute such a Rule 13e-3 transaction if the person
effecting such transaction was an affiliate of the Corporation within
the meaning of such rule), shall nevertheless constitute a Change of
Control for purposes hereof.
(iii) References in this Section 5 to "Common
Stock" shall include all stock or other securities or property (including cash)
into which Common Stock is converted following any merger, reorganization or
reclassification of the capital stock of the Company.
(c) Conversion Price. The Conversion Price per share,
for any date, shall be the average of the Closing Prices of the Common Stock of
the Corporation for the 10 Trading Days prior to such date. For purposes of
this Agreement:
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(i) the term "Closing Price," on any Trading Day,
shall mean the last reported sale price, or in case no such sale takes
place on such day, the average of the closing bid and asked prices,
for the Common Stock.
(ii) the term "Trading Day" shall mean (A) a day
on which the Common Stock is traded on the principal stock exchange on
which the Common Stock has been listed, or (B) if the Common Stock is
not listed on any stock exchange, a day on which the Common Stock is
traded in the over-the-counter market, as reported by the Nasdaq
National Market System, or (C) if the Common Stock is not listed on
any stock exchange or traded on the Nasdaq National Market System, a
day on which the Common Stock is traded in the over-the-counter market
as reported by the National Quotation Bureau Incorporated (or any
similar organization or agency succeeding to its functions of
reporting prices).
(d) Common Stock. The Common Stock to be issued upon
conversion hereunder shall be fully paid and nonassessable.
(e) Procedures for Conversion. (i) In order to convert
shares of Series A Convertible Preferred Stock into shares of Common Stock, the
holder shall surrender the certificate or certificates therefore, duly endorsed
for transfer, at any time during normal business hours, to the Corporation at
its principal or at such other office or agency then maintained by it for such
purpose (the "Payment Office"), accompanied (or preceded as required by Section
5(a)) by written notice to the Corporation of such holder's election to convert
and (if so required by the Corporation or any conversion agent) by an
instrument of transfer, in form reasonably satisfactory to the Corporation and
to any conversion agent, duly executed by the registered holder or by his duly
authorized attorney, and required pursuant to Section 5(e)(iii). As promptly
as practicable after the surrender for conversion of any share of the Series A
Convertible Preferred Stock in the manner provided in the preceding sentence,
and the payment in cash of any amount required by the provisions of Section
5(e)(iii), but in any event within three Trading Days of such surrender for
payment, the Corporation will deliver or cause to be delivered at the Payment
Office to or upon the written order of the holder of such shares, certificates
representing the number of full shares of Common Stock issuable upon such
conversion, issued in such name or names as such holder may direct. Such
conversion shall be deemed to have been made immediately prior to the close of
business on the date of such surrender of the shares in proper order for
conversion, and all rights of the holder of such share as a holder of such
shares shall cease at such time and the person or persons in whose name or
names the certificates for such shares of Common Stock are to be issued shall
be treated for all purposes as having become the record holder or holders
thereof at such time; provided, however, that any such surrender and payment
on any date when the stock transfer books of the Corporation shall be closed
shall constitute the person or persons in whose name or names the certificates
for such shares of Common Stock are to be issued as the record holder or
holders thereof for all purposes immediately prior to the close of business on
the next succeeding day on which such stock transfer books are opened and such
conversion shall be at the conversion price in effect at such time on such
succeeding day.
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(ii) The Corporation shall not be required to
issue fractional shares of Common Stock upon conversion of shares of Series A
Convertible Preferred Stock. At the Corporation's discretion, in the event the
Corporation determines not to issue fractional shares, in lieu of any
fractional shares to which the holder would otherwise be entitled, the
Corporation shall pay cash equal to such fraction multiplied by the Conversion
Price.
(iii) The issuance of certificates for shares of
Common Stock upon conversion shall be made without charge for any issue, stamp
or other similar tax in respect of such issuance. However, if any such
certificate is to be issued in a name other than that of the holder of record
of the shares converted, the person or persons requesting the issuance thereof
shall pay to the Corporation the amount of any tax which may be payable in
respect of any transfer involved in such issuance or shall establish to the
satisfaction of the Corporation that such tax has been paid or is not payable.
(f) Reservation of Stock Issuable Upon Conversion.
Subject to the limitation set forth in the last sentence of this Section 5(f),
the Corporation shall reserve and keep available out of its authorized but
unissued shares of Common Stock, solely for the purpose of effecting the
conversion of the shares of the Series A Convertible Preferred Stock,
15,000,000 shares of Common Stock. If at any time the number of authorized but
unissued shares of Common Stock shall not be sufficient to effect the
conversion of all then outstanding shares of the Series A Convertible Preferred
Stock without regard to the Book Value Requirement or whether the holders of
Series A Convertible Preferred Stock are then entitled to convert, the
Corporation will take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of Common
Stock to such number of shares as shall be sufficient for such purpose,
including, without limitation, taking appropriate board action, recommending
such an increase to the holders of Common Stock, holding shareholders meetings,
soliciting votes and proxies in favor of such increase to obtain the requisite
stockholder approval and upon such approval, the Corporation shall reserve and
keep available such additional shares solely for the purpose of effecting the
conversion of the shares of the Series A Convertible Preferred Stock. Prior to
the earlier of (i) June 1, 1997 or (ii) the approval by the stockholders of the
Corporation of an increase in the number of authorized shares of Common Stock
as contemplated in the Unit Purchase Agreement, the Corporation shall be in
compliance with this Section 5(f) to the extent that it reserves and keeps
available out of its authorized but unissued shares of Common Stock, solely for
the purpose of effecting the conversion of the shares of the Series A
Convertible Preferred Stock, 500,000 shares of Common Stock.
(g) Notices. Any notice required by the provisions of
this Section to be given to the holders of shares of Series A Convertible
Preferred Stock shall be deemed given five days after such notice is deposited
in the United States mail, postage prepaid, and addressed to each holder of
record at its address appearing on the books of the Corporation.
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<PAGE> 14
(h) Reorganization, Merger or Sale of the Company.
(i) Notwithstanding any other provision hereof,
in case of (A) any reorganization or any reclassification of the
capital stock of the Corporation or (B) any Sale of the Company prior
to November 15, 1999, if such transaction does not constitute a
liquidation, dissolution or winding up as provided in Section 3, then,
at the election of each holder of Series A Convertible Preferred
Stock, concurrently with the consummation of such reorganization,
reclassification or Sale of the Company, provision shall be made so
that each share of Series A Convertible Preferred Stock shall
thereafter be convertible into the number of shares of stock or other
securities or property (including cash) to which a holder of the
number of shares of Common Stock deliverable upon conversion of such
share of Series A Convertible Preferred Stock would have been entitled
assuming conversion on the Trading Day immediately prior to the
initial announcement of the transaction or a proposed transaction that
ultimately resulted in the transaction. For purposes of the preceding
sentence only, the Conversion Price shall be the average of the
Closing Prices of the Common Stock for the 15 Trading Days prior to
the date of such announcement. In any case, appropriate adjustment
(as determined by the Board of Directors) shall be made in the
application of the provisions herein set forth with respect to the
rights and interests thereafter of the holders of the Series A
Convertible Preferred Stock, to the end that the provisions set forth
herein shall thereafter be applicable, as nearly as equivalent as is
practicable, in relation to any shares of stock or the securities or
property (including cash) thereafter deliverable upon the conversion
of the shares of Series A Convertible Preferred Stock.
(ii) After the Company has determined to enter
into a transaction described in Section 5(h)(i)(B), and publicly
announces that the Company will enter into such transaction, the
Company will provide written notice to each holder setting forth the
material terms of the transaction, together with all relevant
information regarding such transaction (such transaction a "5(h)(i)(B)
Transaction"). If the Company requests in writing that each holder
elect whether or not to convert its Series A Convertible Preferred
Stock as described above, then, such holder shall have 14 days from
the later of the receipt of such information or such written request
within which to notify the Company in writing of its election to
convert its Series A Convertible Preferred Stock as described above,
and the failure to provide such notice shall be deemed to constitute
such holder's election not to so convert in connection with such
5(h)(i)(B) Transaction. Assuming that the 5(h)(i)(B) Transaction is
consummated on the terms set forth in such information provided by the
Company, such election shall be binding on such holder.
(iii) In case of any merger, consolidation,
reclassification or other similar reorganization, to the extent the
Corporation is not the surviving entity, and the Corporation or the
holders do not otherwise redeem or convert all outstanding shares of
Series A Convertible Stock, the Series A Convertible Preferred Stock
shall be converted into or exchanged for and shall become shares of
the surviving corporation having, in respect of the
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<PAGE> 15
surviving corporation, substantially the same powers, preferences and
relative participating, optional or other special rights, and the
qualifications, limitations or restrictions thereon, that the Series A
Convertible Preferred Stock had immediately prior to such transaction.
6. OPTIONAL REDEMPTION
(a) Redemption Price. The Corporation, at its sole
option, may redeem shares of the Series A Convertible Preferred Stock on or
after November 15, 1999, in whole or (except for redemptions pursuant to
Section 6(a)(iv)) in part (subject to Section 6(b)), for cash, at any time or
from time to time, for a redemption price per share equal to the sum of the
Stated Value, any accrued and unpaid dividends on such shares, and the Make
Whole Payment, if any; provided, that the Corporation may redeem all the shares
of the Series A Convertible Preferred Stock prior to November 15, 1999 on the
date on which the Corporation consummates a Sale of the Company to the extent
permitted under Section 6(a)(iv), and provided further that the Corporation may
not redeem or call for redemption any shares of Series A Convertible Preferred
Stock from and including November 15, 2001 through January 15, 2002 and shall
not thereafter be entitled to call for redemption any shares of Series A
Convertible Preferred Stock with respect to which notice of conversion has been
given pursuant to Section 5(a) of this Certificate of Designation. The "Make
Whole Payment" per share shall be equal to:
(i) on and after November 15, 2001, zero;
(ii) on and after November 15, 2000 but prior to
November 15, 2001, an amount equal to the excess, if any, of (1) an
amount sufficient to provide a Unit (as defined in the Unit Purchase
Agreement) a 20% cash-on-cash internal rate of return, over (2) the
sum of (x) the aggregate Stated Value of the Series A Convertible
Preferred Stock included in such Unit plus all Series A Convertible
Preferred Stock received as a dividend on such Series A Convertible
Preferred Stock (including dividends on such dividends) plus (y) the
excess, if any, of the aggregate market value of the number of shares
of Common Stock represented by a Warrant (as defined in the Unit
Purchase Agreement) (such market value to be the average Closing Price
of the Common Stock for the 10 Trading Days prior to the date of
notice of redemption), over the Exercise Price (as defined in the Unit
Purchase Agreement) with respect to the shares of Common Stock
represented by such Warrant;
(iii) on and after November 15, 1999 but prior to
November 15, 2000, the amount which represents the excess, if any, of
(1) an amount sufficient to provide a Unit a 25% cash-on-cash internal
rate of return, over (2) the sum of (x) the aggregate Stated Value of
the Series A Convertible Preferred Stock included in such Unit plus
all Series A Convertible Preferred Stock received as a dividend on
such Series A Convertible Preferred Stock (including dividends on such
dividends) plus (y) the excess, if any, of the aggregate market value
of the number of shares of Common Stock represented by a Warrant (such
market value to be the average Closing Price of the Common Stock for
the 10 Trading Days
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<PAGE> 16
prior to the date of notice of redemption), over the Exercise Price
with respect to the shares of Common Stock represented by such
Warrant; or
(iv) prior to November 15, 1999, in the event that
the Corporation consummates a Sale of the Company and to the extent
that the holders of the Series A Convertible Preferred Shares do not
exercise their conversion right under Section 5(h), an amount equal
to the excess, if any, of (1) an amount sufficient to provide a Unit a
30% cash-on-cash internal rate of return, over (2) the sum of (x) the
aggregate Stated Value of the Series A Convertible Preferred Stock
included in such Unit plus all Series A Convertible Preferred Stock
received as a dividend on such Series A Convertible Preferred Stock
(including dividends on such dividends) plus (y) the excess, if any,
of the aggregate market value of the number of shares of Common Stock
represented by a Warrant (such market value to be the average Closing
Price of the Common Stock for the 10 Trading Days prior to the date of
consummation of the Sale of the Company), over the Exercise Price with
respect to the shares of Common Stock represented by such Warrant;
provided, that in the event such Sale of the Company is consummated
before November 15, 1997, the Make Whole Payment shall be calculated
so that the holders receive an amount sufficient to provide a Unit a
30% cash-on-cash internal rate of return through November 15, 1997
without giving any value to the Warrants or any Common Stock
represented by Warrants and without any reduction or discount as of
the result of the fact that the holders receive redemption proceeds
prior to November 15, 1997.
(b) Selection of Shares to be Redeemed. Any partial
redemption of Series A Convertible Preferred Stock shall be for that number of
shares having an aggregate Stated Value of $5 million or such greater amount
that is an integral multiple of $1 million. In the event that fewer than all
of the outstanding shares of the Series A Convertible Preferred Stock are to be
called for redemption, the Series A Convertible Preferred Stock called for
redemption shall be redeemed ratably from each holder of Series A Convertible
Preferred Stock proportionate to the amount of Series A Convertible Preferred
Stock held by each holder.
(c) Notice of Redemptions. Notice of redemptions shall
be given by first class mail, postage prepaid, mailed not less than 30 nor more
than 60 days prior to the redemption date or, if such notice period is not
feasible in connection with a Sale of the Company, such notice period as is
practicable in the circumstances to each holder of record of the shares to be
redeemed, at such holder's address as the same appears on the books of the
Corporation. Each such notice shall state: (i) the redemption date; (ii) the
number of shares of the Series A Convertible Preferred Stock to be redeemed
and, if fewer than all of the shares held by such holder are to be redeemed,
the number of such shares to be redeemed from such holder; (iii) the formula
for determination of the redemption price; (iv) the place or places where
certificates for such shares are to be surrendered for payment of the
redemption price; and (v) that dividends on the shares to be redeemed will
cease to accrue on the redemption date.
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<PAGE> 17
(d) Cessation of Dividends on Shares Redeemed. Notice
having been mailed as stated in subsection (c) above, from and after the close
of business on the redemption date (unless default shall be made by the
Corporation in providing money for the payment of the redemption price of the
shares called for redemption), dividends on the shares of the Series A
Convertible Preferred Stock redeemed shall cease to accrue, and said shares
shall no longer be deemed to be outstanding, and all rights of the holders
thereof as stockholders of the Corporation (except the right to receive from
the Corporation the redemption price) shall cease. Upon surrender in
accordance with said notice of the certificates for any shares so redeemed
(properly endorsed or assigned for transfer, if the Board of Directors of the
Corporation shall so require and the notice shall so state), such shares shall
be redeemed by the Corporation at the redemption price aforesaid. If fewer
than all the shares represented by any such certificate are redeemed, a new
certificate shall be issued representing the unredeemed shares without cost to
the holder thereof.
(e) Status of Redeemed Shares. Upon redemption, any
shares of the Series A Convertible Preferred Stock which have been so redeemed
shall be retired and thereafter have the status of authorized but unissued
shares of preferred stock, without designation as to series until such shares
are once more designated as part of a particular series by the Board of
Directors or a duly authorized committee thereof.
7. MANDATORY REDEMPTION.
On November 15, 2008 (the "Final Redemption Date"), the Corporation
shall redeem from any source of funds legally available therefor, in the manner
provided in Section 6(c) above, all of the shares of the Series A Convertible
Preferred Stock then outstanding at a redemption price equal to the Stated
Value per share, plus, without duplication, an amount in cash equal to all
accumulated and unpaid dividends per share to the Final Redemption Date.
8. TRIGGERING EVENTS.
Any of the following actions or events shall constitute a
"Triggering Event" for purposes hereof:
(a) Failure to Redeem. The Corporation shall fail to
redeem (i) the Series A Convertible Preferred Stock in accordance with Section
7 or (ii) any Series A Convertible Preferred Stock called for redemption in
accordance with Section 6.
(b) Failure to Pay Dividends. The Corporation shall fail
to pay any dividend on any Series A Convertible Preferred Stock on any Dividend
Payment Date in accordance with Section 2 for any reason, including but not
limited to, that such payment is prohibited by applicable law or the Board of
Directors elect not to pay such dividend, or shall otherwise violate any term
of Section 2 and such failure shall not be cured within a period of 30 days
after such Dividend Payment
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<PAGE> 18
Date or violation (which cure shall be effected in a manner ensuring the
holders the same yield as if such violation had not occurred).
(c) Failure of Voting Rights. The Corporation shall
enter into any transaction or take any action required to be approved by any
holders of Series A Convertible Preferred Stock without obtaining the requisite
approval of the holders of the Series A Convertible Preferred Stock.
(d) Failure of Stockholder Action. The stockholders of
the Corporation shall not have approved the amendment to the Certificate of
Incorporation described in Section 1.02 of the Unit Purchase Agreement by June
1, 1997.
(e) Failure to Convert; Warrant Agreement. The
Corporation shall (i) fail for any reason to issue Common Stock as required
under Section 5 upon the request of any holder of Series A Convertible
Preferred Stock as provided in Section 5 or shall fail for any reason to comply
with Section 5(f) or any other term of Section 5 hereof or the Corporation;
(ii) fail for any reason to issue Common Stock as required under the Warrant
Agreement dated as of November 15, 1996 between the Corporation and the Warrant
Agent (as amended, the "Warrant Agreement") upon exercise of any Warrant then
held by any purchaser designated in Exhibit A of the Unit Purchase Agreement
(Purchasers") or any of their respective affiliates; or (iii) so long as any
Purchasers or any of their respective affiliates hold Warrants, fail to make
any anti-dilution adjustment thereunder and such failure to make such
adjustment shall continue for 30 days after notice from any affected Purchaser.
(f) Registration Rights Agreement. The Corporation shall
fail in any material respect to comply with the Registration Rights Agreement
dated as of November 15, 1996, as amended, among the Corporation, the Largest
Initial Holder, the Designated Holders and their permitted successors and
assigns, and such failure shall continue for a period of 30 days after notice
from any such holder.
(g) Unit Purchase Agreement. The Corporation shall fail
to comply with Sections 1.01, 1.02, 1.03, 4.15 (first sentence only), 5.03,
8.01 or 8.05 of the Unit Purchase Agreement and such failure shall continue for
a period of 30 days after notice from the Purchasers or the representations
made under Sections 4.01 (first sentence only), 4.02, 4.03 or 4.04(a) of the
Unit Purchase Agreement shall prove to have been incorrect or misleading in any
material respect when made pursuant thereto or any other material
representation made under the Unit Purchase Agreement shall prove to have been
incorrect or misleading in any substantial material respect when made.
(h) Limitation on Senior Securities. (i) The
Corporation shall incur or issue, or permit any subsidiary of the Corporation
to incur or issue, any Senior Securities, except that the Corporation or a
subsidiary may incur or issue Senior Securities if at the time of incurrance
or issuance, the ratio of (A) Senior Securities outstanding on such date to (B)
Pro Forma Consolidated Cash Flow for the most recently ended full fiscal
quarter multiplied by four, determined on a pro forma basis as if any such
Senior Securities had been incurred or issued and the proceeds thereof had been
applied at the beginning of such fiscal quarter, would be less than 7.0 to 1.0.
Notwithstanding
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<PAGE> 19
the foregoing limitation, the Company may incur and, as applicable, may permit
its Subsidiaries to incur, Refinancing Debt.
(ii) For purposes of this Section,
(A) "Senior Securities" shall mean (i) all Debt,
and (ii) the shares of any classes or series of capital stock which
are senior to the Series A Convertible Preferred Stock in respect of
the right to receive dividends or to participate in any distribution
of assets other than by way of dividends or which are Redeemable
Stock. For the purposes of determining any particular amount of
Senior Securities described in Clause (ii) of the definition of Senior
Securities, said amount shall be the greater of the market value or
the minimum amount payable by the Corporation or any of its
subsidiaries upon the redemption, purchase, or the retirement of such
Senior Securities.
(B) "Pro Forma Consolidated Cash Flow" shall mean
for any period the Corporation's Consolidated Cash Flow for such
period calculated on a pro forma basis to give effect to any Asset
Disposition or acquisition of assets not in the ordinary course of
business (including acquisitions by merger, consolidation or purchase
of capital stock) during such period or thereafter as if such Asset
Disposition or acquisition had taken place on the first day of such
period.
(C) "Consolidated Cash Flow" shall mean for any
period the Corporation's Consolidated Net Income for such period plus
(i) the Corporation's Consolidated Interest Expense for such period
plus (ii) the consolidated income tax expense of the Corporation and
its consolidated subsidiaries for such period, plus (iii) the
consolidated depreciation and amortization expense included in the
income statement of the Corporation and its consolidated subsidiaries
for such period plus (iv) other non-cash charges reducing Consolidated
Net Income for such period (excluding any such non-cash charge to the
extent that it represents an accrual of or reserve for cash charges in
any future period), minus (v) non-cash items increasing Consolidated
Net Income for such period. Notwithstanding the foregoing, the
provision for taxes on the income or profits of and the depreciation
and amortization and other non-cash charges of any of the
Corporation's consolidated subsidiaries shall be added to Consolidated
Net Income to compute Consolidated Cash Flow only to the extent (and
in the same proportion) that the net income of such subsidiary was
included in calculating the Consolidated Net Income of the Corporation
and only if and to the extent such subsidiary could have paid such
amount at the date of determination as a dividend to the Corporation
by such subsidiary without prior governmental approval (that has not
been obtained), pursuant to the terms of its charter and all
agreements, instruments, judgments, decrees, orders, statutes, rules
and governmental regulations applicable to that subsidiary or its
stockholders.
(D) "Consolidated Net Income" shall mean for any
period the net income (or loss) of the Corporation and its
subsidiaries for such period, determined on a consolidated
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<PAGE> 20
basis in accordance with GAAP; provided that there shall be excluded
therefrom (i) the net income (but not the loss) of any subsidiary
which is subject to restrictions which prevent the payment of
dividends and the making of distributions (by loans, advances,
intercompany transfers or otherwise) to the Corporation except to the
extent of the amount of dividends or other distributions actually paid
to the Corporation by such subsidiary without violation of any such
restrictions, (ii) the net income (or loss) of any Person that is not
a consolidated subsidiary of the Corporation except to the extent of
the amount of dividends or other distributions actually paid to the
Corporation by such Person during any period, (iii) any gain or loss
on any Asset Disposition by the Corporation or any of its subsidiaries
and (iv) any extraordinary gain or loss.
(E) "Consolidated Interest Expense" shall mean
for any period the consolidated interest expense included in a
consolidated income statement (without deduction of interest income)
of the Corporation and its consolidated subsidiaries for such period
determined in accordance with GAAP, including without limitation or
duplication (or, to the extent not so included, with the addition of),
(i) the amortization of Debt discounts; (ii) any payments of fees with
respect to letters of credit, bankers' acceptances or similar
facilities; (iii) fees with respect to interest rate swap or similar
agreements or foreign currency hedge, exchange or similar agreements,
other than fees or charges related to the acquisition or termination
thereof which are not allocable to interest expense in accordance with
GAAP; and (iv) the interest component associated with capital lease
obligations.
(F) "Asset Disposition" shall mean any transfer,
conveyance, sale, lease or other disposition by the Corporation or any
of its subsidiaries (including a consolidation or merger or other sale
of any such subsidiary with, into or to another Person in a
transaction in which such subsidiary ceases to be a subsidiary, but
excluding a disposition by a subsidiary of such Person to such Person
or a wholly owned subsidiary of such Person or by such Person to a
wholly owned subsidiary of such Person, and excluding the creation of
a lien, pledge or security interest) of (i) shares of capital stock
(other than directors' qualifying shares) or other ownership interests
of a subsidiary of such Person, (ii) substantially all of the assets
of such Person or any of its Subsidiaries representing a division or
line of business or (iii) other assets or rights of such Person or any
of its Subsidiaries outside of the ordinary course of business, in any
case where the consideration received by such Person or a subsidiary
of such Person or the fair market value of the assets subject to such
disposition exceeds $1 million.
(G) "Debt" shall mean (without duplication),
whether recourse is to all or a portion of the assets of the
Corporation or any of its subsidiaries, and whether or not contingent,
(i) every obligation of the Corporation or any of its subsidiaries for
money borrowed, (ii) every obligation of the Corporation or any of its
subsidiaries evidenced by bonds, debentures, notes or other similar
instruments, (iii) every reimbursement obligation of the Corporation
or any of its subsidiaries with respect to letters of credit, bankers'
acceptances or similar facilities issued for the account of the
Corporation or any of its
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<PAGE> 21
subsidiaries, (iv) every obligation of the Corporation or any of its
subsidiaries issued or assumed as the deferred purchase price of
property or services (but excluding trade accounts payable or accrued
liabilities arising in the ordinary course of business), (v) every
capital lease obligation of the Corporation or any of its
subsidiaries, (vi) Attributable Debt of the Corporation or any of its
subsidiaries, (vii) the maximum fixed redemption or repurchase price
of Redeemable Stock of the Corporation or any of its subsidiaries at
the time of determination, (viii) every obligation of the Corporation
or any of its subsidiaries secured by a lien on any asset of the
Corporation or any of its subsidiaries (whether or not such obligation
is assumed by the Corporation or any of its subsidiaries); provided,
however, that, unless such Debt constitutes Debt of the referent
Person pursuant to any other clause of this definition, the amount of
such Debt shall be the lesser of (A) the fair market value of such
asset and (B) the amount of such Debt, and (ix) every obligation of
the type referred to in clauses (i) through (viii) of the Corporation
or any of its subsidiaries and all dividends of the Corporation or any
of its subsidiaries the payment of which, in either case, the
Corporation has guaranteed or for which the Corporation is responsible
or liable, directly or indirectly, as obligor, guarantor or otherwise
and provided further that none of the following shall constitute Debt:
(i) guarantees by subsidiaries of Debt under any bank credit facility
incurred by the Corporation; (ii) Debt owed by the Corporation to any
wholly owned subsidiary of the Corporation or owed by any wholly owned
subsidiary of the Corporation to the Corporation or any other wholly
owned subsidiary of the Corporation (but only so long as such Debt is
held by the Corporation or such wholly owned subsidiary); (iii) debt
arising from the honoring by a bank or other financial institution of
a check, draft or similar instrument drawn against insufficient funds
in the ordinary course of business, provided that such Debt is
extinguished within two business days of its incurrence; and (iv)
renewals of guarantees permitted by clause (i) above.
For purposes of determining any particular
amount of Debt under this covenant, guarantees of (or obligations with
respect to letters of credit supporting) Debt otherwise included in
the determination of such amount shall not also be included. For the
purpose of determining compliance with this covenant, (A) in the event
that an item of Debt meets the criteria of more than one of the types
of Debt described in the above clauses, the Corporation, in its sole
discretion, shall classify such item of Debt and only be required to
include the amount and type of such Debt in one of such clauses; and
(B) the amount of Debt issued at a price which is less than the
principal amount thereof shall be equal to the amount of the liability
in respect thereof determined in accordance with GAAP.
(H) "Attributable Debt" in respect of a sale and
leaseback transaction shall mean, at the time of determination the
present value (discounted at the interest rate implicit in the lease,
compounded semiannually) of the obligation of the lessee of the
property subject to such sale and leaseback transaction for rental
payments during the remaining term of the lease included in such
transaction, including any period for which such lease has been
extended or may, at the option of the lessor, be extended or until the
earliest date on which the lessee may terminate such lease without
penalty or upon payment of penalty (in which
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<PAGE> 22
case the rental payments shall include such penalty), after excluding
all amounts required to be paid on account of maintenance and repairs,
insurance, taxes, assessments, water, utilities and similar charges.
(I) "Person" shall mean an individual,
partnership, corporation, trust, unincorporated organization or other
business entity, and a government or agency or political subdivision
thereof.
(J) "Refinancing Debt" shall mean (i) any Debt of
the Corporation that renews, refunds or extends any outstanding Debt
of the Corporation or a subsidiary of the Corporation which Debt was
incurred in compliance with this Certificate, and (ii) any Debt of a
subsidiary of the Corporation that renews, refunds or extends any Debt
of such Subsidiary which Debt was incurred in compliance with this
Certificate of Designation in the case of both clauses (i) and (ii) in
an amount not to exceed the outstanding principal amount of the Debt
so refinanced plus the amount of any premium required to be paid in
connection with such refinancing pursuant to the terms of the debt
refinanced or the amount of any premium reasonably determined by the
Corporation as necessary to accomplish such refinancing by means of a
tender offer or privately negotiated repurchase, plus the expenses of
the Corporation incurred in connection with such refinancing.
(h) Cross-Acceleration. A default shall have occurred
under any bonds, debentures, notes or other evidences of indebtedness of the
Corporation or any subsidiary of the Corporation or under any mortgages,
indentures or instruments under which there may be issued or by which there may
be secured or evidenced any indebtedness by the Corporation or any subsidiary
of the Corporation, in any case with a principal amount of at least $5 million
outstanding, and such indebtedness already is due and payable in full or such
default has resulted in the acceleration of the maturity of such indebtedness.
(i) Bankruptcy, etc.
(i) The Corporation or any of its Subsidiaries
(A) admits in writing its inability to pay its debts generally as they
become due, (B) commences a voluntary case or proceeding under any
bankruptcy law with respect to itself, (C) consents to the entry of a
judgment, decree or order for relief against it in an involuntary case
or proceeding under any bankruptcy law, (D) consents to the
appointment of a custodian of it or for substantially all of its
property, (E) consents to or acquiesces in the institution of a
bankruptcy or an insolvency proceeding against it, (F) makes a general
assignment for the benefit of its creditors, or (G) takes any
corporate action to authorize or effect any of the foregoing;
(ii) A court of competent jurisdiction enters a
judgment, decree or order for relief in respect of the Corporation or
any of its subsidiaries in an involuntary case or proceeding under any
bankruptcy law, which shall (A) approve as properly filed a petition
seeking reorganization, arrangement, adjustment or composition in
respect of the
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<PAGE> 23
Corporation or any of its subsidiaries, (B) appoint a custodian of the
Corporation or any of its subsidiaries or for substantially all of its
property or (C) order the winding-up or liquidation of its affairs;
and such judgment, decree or order shall remain unstayed and in effect
for a period of 60 consecutive days.
9. REMEDIES.
(a) Upon the occurrence and during the continuance of any
Triggering Event (i) the Dividend Rate on all outstanding Series A Convertible
Preferred Stock shall be increased as provided in Section 2 without any action
on the part of any holder of the Series A Convertible Preferred Stock or the
Corporation, and (ii) the holders of a majority of the outstanding Series A
Convertible Preferred Stock shall be entitled to elect additional directors of
the Corporation as provided in Section 4(a)(iii).
(b) In the event that a Triggering Event described in
Section 8(d) shall occur, and be continuing, all dividends on the Series A
Convertible Preferred Stock shall be paid in cash and not shares of Series A
Convertible Preferred Stock, to the extent but only to the extent, that such
cash payments are permitted under any applicable indenture or credit agreement
to which the Corporation is a party.
(c) The Corporation stipulates that the remedies at law
of each holder of Series A Convertible Preferred Stock in the event of any
Triggering Event or threatened Triggering Event or otherwise or other failure
in the performance of or compliance with any of the terms hereof are not and
will not be adequate and that, to the fullest extent permitted by law, such
terms may be specifically enforced by a decree for the specific performance of
any agreement contained herein or by an injunction against a violation of any
of the terms hereof or otherwise without requiring any holder to post a bond or
other security except to the extent required by applicable law.
(d) Any holder of Series A Convertible Preferred Stock
shall be entitled to recover from the Corporation the reasonable attorneys'
fees and expenses incurred by such holder in connection with any Triggering
Event or enforcement by such holder of any obligation of the Corporation
hereunder.
(e) No failure or delay on the part of any holder of
Series A Convertible Preferred Stock in exercising any right, power or remedy
hereunder or under applicable law or otherwise shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy hereunder or thereunder. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law or
otherwise.
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<PAGE> 24
10. PREEMPTIVE RIGHTS.
No shares of Series A Convertible Preferred Stock shall have any
rights of preemption whatsoever as to any securities of the Corporation, or any
warrants, rights or options issued or granted with respect thereto, regardless
of how such securities or such warrants, rights or options may be designated,
issued or granted.
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<PAGE> 1
WARRANT AGREEMENT
BETWEEN
METROCALL, INC.
AND
THE FIRST NATIONAL BANK OF BOSTON,
WARRANT AGENT
Dated as of November 15, 1996
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I
ISSUANCE OF WARRANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.01 Initial Issuance of Warrant Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
----------------------------------------
1.02 Warrant Register; Exchange and Transfer of Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
---------------------------------------------------
1.03 Form of Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
----------------
ARTICLE II
EXERCISE OF WARRANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.01 Term of Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
----------------
2.02 Means of Exercise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
-----------------
ARTICLE III
MUTILATED OR MISSING WARRANT CERTIFICATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE IV
RESERVATION OF WARRANT SHARES; REGISTRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE V
EXERCISE PRICE; ADJUSTMENT OF NUMBER OF WARRANT SHARES AND EXERCISE PRICE . . . . . . . . . . . . . . . . . . . . . . . . 6
5.01 Exercise Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
--------------
5.02 Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
-----------
(a) Stock Dividends; Stock Splits; Reverse Stock Splits . . . . . . . . . . . . . . . . . . . . . . . 6
---------------------------------------------------
(b) Distributions to Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
-----------------------------
(c) Issuance of Common Stock at Lower Values . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
----------------------------------------
(d) Expiration of Rights, Options and Conversion Privileges 8
-------------------------------------------------------
(e) Adjustment of Exercise Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
----------------------------
(f) De minimis Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
----------------------
(g) Reorganization, Reclassification or Recapitalization of the Company . . . . . . . . . . . . . . . 9
-------------------------------------------------------------------
(h) Other Dilutive Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
---------------------
5.03 Notice of Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
--------------------
5.04 Statement on Warrant Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
---------------------------------
ARTICLE VI
WARRANT HOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.01 No Rights as Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
-------------------------
6.02 Notice of Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
------------------------
ARTICLE VII
CONCERNING THE WARRANT AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.01 Nature of Duties and Responsibilities Assumed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
---------------------------------------------
7.02 Right to Consult Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
------------------------
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
7.03 Compensation; Reimbursement; Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
--------------------------------------
7.04 Warrant Agent May Hold Company Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
-----------------------------------------
ARTICLE VIII
CHANGE OF WARRANT AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
8.01 Resignation and Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
-----------------------
8.02 Merger, Consolidation or Change of Name of Warrant Agent . . . . . . . . . . . . . . . . . . . . . . . 15
--------------------------------------------------------
ARTICLE IX
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
9.01 Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
----------------
9.02 Merger or Consolidation of Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
----------------------------------
9.03 No Impairment or Amendment; Continued Validity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
----------------------------------------------
9.04 Obligations Several; Independent Nature of Each
------------------------------------------------
Holder's Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
---------------
9.05 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
-------
9.06 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
-------------
9.07 Benefits of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
---------------------
9.08 Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
----------
9.09 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
--------
9.10 Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
------------
9.11 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
------------
9.12 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
---------
9.13 Nonwaiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
---------
9.15 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
--------
9.16 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
------------
9.17 Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
-----------
9.18 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
-----------
</TABLE>
-iii-
<PAGE> 4
INDEX OF DEFINED TERMS
<TABLE>
<CAPTION>
Page
<S> <C>
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Closing Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Current Market Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Equity Issue Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Exercise Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Issuance Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1, 3
Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Series A Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Strike Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Trading Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Unit Purchase Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Warrant Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Warrant Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Warrant Register . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Warrant Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
</TABLE>
- iv -
<PAGE> 5
WARRANT AGREEMENT
THIS WARRANT AGREEMENT (the "Agreement") dated as of November
15, 1996, between METROCALL, INC., a Delaware corporation (the "Company"), and
THE FIRST NATIONAL BANK OF BOSTON, as Warrant Agent (the "Warrant Agent").
Capitalized terms used in this Agreement have the meanings given them in the
Unit Purchase Agreement dated as of November 15, 1996 (the "Unit Purchase
Agreement"), by and among the Company and the Purchasers party thereto.
RECITALS
WHEREAS, pursuant to the Unit Purchase Agreement, the Company
has agreed to issue 159,600 warrants (the "Warrants") to purchase up to an
aggregate of 2,915,254 shares of common stock, par value $.01 per share, of the
Company ("Common Stock"). Each Warrant entitles the registered holder thereof
to acquire 18.266 shares of Common Stock (the "Warrant Shares"); and
WHEREAS, the Company wishes the Warrant Agent to act on behalf
of the Company and the Warrant Agent is willing to act in connection with the
issuance, transfer, exchange, and exercise of the Warrants as provided herein;
and
WHEREAS, the Company and the Warrant Agent wish to define the
terms and provisions of the Warrants and the respective rights and obligations
thereunder of the Company and the registered holders of the Warrants.
NOW, THEREFORE, in consideration of the premises and mutual
agreements herein, the Company and the Warrant Agent hereby agree as follows:
ARTICLE I
ISSUANCE OF WARRANTS
1.01 Initial Issuance of Warrant Certificates. Warrant
certificates (the "Warrant Certificates") in the form set forth in Section 1.03
hereto evidencing Warrants to purchase an aggregate of 2,915,254 shares of
Common Stock shall be executed by the Company and delivered to the Warrant
Agent prior to the date of issuance of the Warrants (the "Issuance Date"). The
Warrant Agent shall thereupon countersign and deliver such Warrant Certificates
in accordance with the provisions of the Unit Purchase Agreement.
Each Warrant Certificate shall be executed on behalf of the
Company by its Chairman of the Board, its Chief Executive Officer, or any Vice
President, either manually or by
<PAGE> 6
facsimile signature printed thereon. Each Warrant Certificate shall be
manually countersigned by the Warrant Agent and shall not be valid for any
purpose unless so countersigned.
In case any officer of the Company who shall have signed any
Warrant Certificate shall cease to be such officer before the Warrant
Certificate so signed shall have been countersigned by the Warrant Agent, such
Warrant Certificate nevertheless may be countersigned and delivered with the
same force and effect as though such person had not ceased to be such officer
of the Company, and any Warrant Certificate may be signed on behalf of the
Company by any person who, at the actual date of the execution of such Warrant
Certificate, shall be a proper officer of the Company to sign such Warrant
Certificate, although at the date of the execution of this Agreement the person
was not such officer.
1.02 Warrant Register; Exchange and Transfer of Warrants.
(a) The Warrant Certificates shall be issued in registered form only. The
Warrant Agent, on behalf of the Company, shall number and list each Warrant
Certificate, as it is issued, in a register (the "Warrant Register") which it
shall maintain at the corporate trust office located at 150 Royall Street,
Canton, Massachusetts (the "Office") or, in the event that a successor
warrant agent is appointed in accordance with the provisions of Section 8.01 of
this Agreement, the address of such successor warrant agent provided by notice
to the holders of the Warrants pursuant to that section.
(b) At the option of any registered holder (a "Holder")
of a Warrant, any Warrant Certificate may be exchanged at the Office for a new
Warrant Certificate or new Warrant Certificates, in the same or different
denominations, upon payment of the charges hereinafter provided. Whenever any
Warrant Certificates are so surrendered for exchange the Company shall execute,
and the Warrant Agent shall countersign and deliver, the Warrant Certificates
that the Holder making the exchange is entitled to receive.
Subject to compliance with the restrictions set forth in the
Warrant Certificates and in this Agreement, the Warrant Certificates shall be
transferable only on the Warrant Register, upon delivery thereof duly endorsed
by the Holder or by his duly authorized attorney or representative, or
accompanied by proper evidence of succession, assignment or authority to
transfer. In all cases of transfer by an attorney, the original power of
attorney, duly approved, or a copy thereof, duly certified, shall be deposited
and remain with the Warrant Agent. In case of transfer by executors,
administrators, guardians or other legal representatives, duly authenticated
evidence of their authority shall be produced, and may be required to be
deposited and to remain with the Warrant Agent in its discretion. Upon any
registration of transfer, the Warrant Agent shall countersign and deliver one
or more new Warrant Certificates to the Persons entitled thereto. As used in
this Agreement, "Person" means any natural person, corporation, partnership,
joint venture, limited liability company, firm, association, joint-stock
company, trust, unincorporated organization, government or governmental agency
or political subdivision or any other entity, whether acting in an individual,
fiduciary or other capacity.
- 2 -
<PAGE> 7
All Warrant Certificates issued upon any registration of
transfer or exchange of Warrant Certificates shall be the valid obligations of
the Company, evidencing the same obligations, and entitled to the same benefits
under this Agreement, as the Warrant Certificates surrendered for such
registration of transfer or exchange.
No service charge shall be made to a Holder for any
registration of transfer or exchange of Warrant Certificates. The Company may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Warrant Certificates.
Any Warrant Certificate when duly endorsed in blank shall be
deemed negotiable, and when a Warrant Certificate shall have been so endorsed,
the Holder thereof may be treated by the Company, the Warrant Agent and all
other Persons dealing therewith as the absolute owner thereof for any purpose
and as the Person entitled to exercise the rights represented thereby, or the
transfer thereof on the Warrant Register, any notice to the contrary
notwithstanding; but until such transfer on the Warrant Register, the Company
and the Warrant Agent may treat the Holder thereof as the owner for all
purposes.
1.03 Form of Warrants. The Warrant Certificates shall be
substantially in the form of Exhibit A hereto, and may have such letters,
numbers or other marks of identification and such legends printed, lithographed
or engraved upon them as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement or to conform to usage.
Warrant Certificates shall be dated as of the date of
countersignature thereof by the Warrant Agent either upon initial issuance or
upon exchange, substitution or transfer.
ARTICLE II
EXERCISE OF WARRANTS
2.01 Term of Warrants. Each Warrant shall entitle the
Holder thereof to purchase 18.266 shares of Common Stock for the per share
Exercise Price (as defined in Article V hereof), subject to adjustment pursuant
to Article V hereof at any time from the Issuance Date through and including
November 15, 2001, subject to the provisions of this Agreement. The Warrants
shall be exercisable at any time, and from time to time, during the Exercise
Period and shall terminate and become void as of the close of business on the
last day thereof.
2.02 Means of Exercise. (i) Subject to Section 5.02,
Warrants may be exercised upon surrender to the Warrant Agent at its Office of
the Warrant Certificates evidencing the Warrants to be exercised, together with
the Purchase Form on the reverse thereof duly completed and signed, and upon
payment to the Warrant Agent, for the account of the
- 3 -
<PAGE> 8
Company, of the Exercise Price (determined in accordance with Article 5 hereof)
for the number of Warrant Shares in respect of which such Warrants are then
exercised.
(ii) Subject to Section 5.02, payment of
the aggregate Exercise Price shall be by certified or official bank check or
wire transfer payable to the order of the Company, or a combination thereof, at
the option of the Holder. Notwithstanding any other provision of this
Agreement to the contrary, a Holder may, upon exercise of Warrants, at its
election, pay all or part of the Exercise Price applicable to such exercise by
delivering shares of Series A Convertible Preferred Stock, par value $0.01
("Series A Preferred Stock") and such shares of Series A Preferred Stock shall
be applied against the Exercise Price of the Warrants at the rate of the
Stated Value per share of Series A Preferred Stock plus all accrued and unpaid
dividends thereon. Any shares of Series A Preferred Stock so delivered shall
be duly endorsed by the Holder or by his duly authorized attorney or
representative, or accompanied by proper evidence of succession, assignment or
authority to transfer. In all cases of transfer by an attorney, the original
power of attorney, duly approved, or a copy thereof, duly certified, shall be
deposited and remain with the Warrant Agent. In case of transfer by executors,
administrators, guardians or other legal representatives, duly authenticated
evidence of their authority shall be produced, and may be required to be
deposited and to remain with the Warrant Agent in its discretion. All Warrant
Certificates surrendered in the exercise of the rights thereby evidenced shall
be canceled by the Warrant Agent and shall thereafter be delivered to the
Company.
(iii) Notwithstanding any other provision
of this Section 2.02, the Holder of a Warrant may elect to exercise a Warrant
without the payment of any cash or Series A Preferred Stock and, if such holder
so elects, the Holder shall thereby be entitled to receive a number of shares
of Common Stock equal to (A) the excess, if any, of the Current Market Price
per share at the date of exercise over the Exercise Price at the time of
exercise, (B) multiplied by the number of shares for which the Warrants to be
exercised are exercisable (C) divided by the Current Market Price. For
purposes hereof, the "Current Market Price" per share for any date shall mean
average of the Closing Prices of the Common Stock for the 10 Trading Days prior
to such date. "Closing Price" on any Trading Day, shall mean the last reported
sale price, or in case no such sale takes place on such day, the average of the
closing bid and asked prices, for the Common Stock. "Trading Day" shall mean
(A) a day on which the Common Stock is traded on the principal stock exchange
on which the Common Stock has been listed, or (B) if the Common Stock is not
listed on any stock exchange, a day on which the Common Stock is traded in the
over-the-counter market, as reported by the Nasdaq National Market System, or
(C) if the Common Stock is not traded on the Nasdaq National Market System, a
day on which the Common Stock is traded in the over-the-counter market as
reported by the National Quotation Bureau Incorporated (or any similar
organization or agency succeeding to its functions of reporting prices). The
Company shall not be required to issue fractional shares as a result of the
exercise of Warrants. If a Holder is entitled to a fraction of a share of
Common Stock as a result of the exercise of Warrants, the Company may pay the
Holder an amount in cash equal to the Current Market Price multiplied by the
fraction of a share of Common Stock to which the Holder would otherwise be
entitled, without interest.
- 4 -
<PAGE> 9
(iv) Upon the surrender of any Warrant Certificate
with the Purchase Form duly executed and payment of the Exercise Price in
accordance with the foregoing provisions, the Warrant Agent shall thereupon
promptly inform the Company with respect to each Warrant exercised, remit to
the Company all monies or shares of Series A Preferred Stock received upon
exercise of the Warrants, and request from the Company appropriate evidence of
ownership of the Warrant Shares to which the Holder is entitled, registered in
such name or names as may be directed in writing by the Holder. Upon receipt
of the required deliveries, the Company shall, as promptly as practicable, and
in any event within three days thereafter, cause to be issued and delivered to
the registered holder of such Warrant (or its nominee), a certificate or
certificates representing shares of Common Stock equal in the aggregate to the
number of shares of Common Stock specified in such Holder's notice of the
exercise of such Warrant (but not exceeding the maximum number of shares
issuable upon exercise of such Warrant). Such surrender shall be deemed to
have been effected as of the close of business on the day on which such Warrant
Certificate shall have been surrendered, and at such time the rights of the
Holder of the Warrant Certificate, in its capacity as such, shall cease, and
the Person or Persons in which name or names any Warrant Shares are to be
issued upon such surrender shall be deemed to have become the holder or holders
of record of such Warrant Shares. If less than the full number of Warrants
represented by such Warrant Certificate are being exercised, the Warrant Agent
shall issue, pursuant to Section 1.02, a new Warrant Certificate, of like tenor
for the number of Warrants evidenced by the surrendered Warrant Certificate
minus the number of Warrants exercised.
ARTICLE III
MUTILATED OR MISSING WARRANT CERTIFICATES
Upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of any Warrant
Certificate, and, if requested in the case of any such loss, theft or
destruction, upon delivery of an indemnity bond or other agreement or security
reasonably satisfactory to the Company, or, in the case of any such mutilation,
upon surrender and cancellation of such Warrant Certificate, the Company will
issue a new Warrant Certificate, of like tenor and amount, in lieu of such
lost, stolen, destroyed or mutilated Certificate; provided, however, if any
Certificate of which any Holder, its nominee, or any of its officers or
principals is the registered holder is lost, stolen or destroyed, the affidavit
of such principal or officer of such Holder setting forth the circumstances
with respect to such loss, theft or destruction, together with an agreement to
indemnify the Company with respect thereto, shall be accepted as satisfactory
evidence thereof, and no bond or other security shall be required as a
condition to the execution and delivery by the Company of a new Warrant
Certificate in replacement of such lost, stolen or destroyed Warrant
Certificate.
ARTICLE IV
RESERVATION OF WARRANT SHARES; REGISTRATION
- 5 -
<PAGE> 10
Upon the Issuance Date and during the Exercise Period, the
Company shall irrevocably reserve 2,915,254 shares of Common Stock in the
treasury solely to be issued as Warrant Shares for issuance upon exercise of
the Warrants in accordance with this Agreement.
The Company covenants that all Warrant Shares issuable upon
exercise of the Warrants will, upon issuance, be fully paid, nonassessable and
free from preemptive rights and from all taxes, liens, charges and security
interests with respect to the issuance thereof.
The Company will cause the Warrant Shares to be duly
registered or approved, as the case may be, under the Securities Act and any
required state securities laws before such shares are issued to any Holder upon
exercise, all in accordance with and as set forth in the Registration Rights
Agreement. If the Common Stock is listed or admitted to trading on any
national securities exchange or national market system, the Company will, at
its expense, obtain promptly and maintain the approval for listing on each such
exchange or national market system upon official notice of issuance the Warrant
Shares and maintain the listing or admission to trading of such shares after
their issuance so long as the Common Stock is so listed or admitted to trading.
ARTICLE V
EXERCISE PRICE; ADJUSTMENT OF NUMBER OF WARRANT SHARES
AND EXERCISE PRICE
5.01 Exercise Price. (a) The per share exercise price
of the Warrants shall be $7.40, subject to adjustment as set forth in this
Article V (the "Exercise Price").
(b) If the Company shall issue or sell shares of
Common Stock pursuant to a transaction exempt from the registration
requirements of the Securities Act at a price per share of Common Stock (the
"Equity Issue Price") that is less than 80% of the Exercise Price (at the
record date for such sale or issuance) then the Exercise Price then in effect
shall be reduced to an amount equal to 125% of the Equity Issue Price.
(c) If the Company shall issue or sell any
rights, options, warrants or convertible or exchangeable securities (other
than employees stock options) containing the right to subscribe for or purchase
shares of Common Stock, pursuant to a transaction exempt from the registration
requirements of the Securities Act, with an exercise or conversion price (the
"Strike Price") which is less than the Exercise Price then in effect, then the
Exercise Price shall be reduced to the Strike Price.
5.02 Adjustments. The number of shares of Common Stock
issuable upon exercise of the Warrants and the Exercise Price shall be subject
to adjustment (without duplication of the adjustments in Section 5.01, it being
understood that if adjustments are
- 6 -
<PAGE> 11
required under more than one provision of Sections 5.01 and 5.02, the
adjustments (without duplication) most favorable to the Holders shall occur)
from time to time as follows:
(a) Stock Dividends; Stock Splits; Reverse Stock
Splits. (i) In case the Company shall (A) declare or pay a dividend on its
outstanding Common Stock in shares of Common Stock or make a distribution to
all holders of its outstanding Common Stock in shares of Common Stock, (B)
subdivide or reclassify its outstanding Common Stock, or (C) combine its
outstanding Common Stock into a smaller number of shares, the number of shares
of Common Stock issuable upon exercise of each Warrant immediately prior to the
record date for such dividend or combination or the effective date of such
subdivision or reclassification shall be adjusted so that the Holder of each
Warrant shall thereafter be entitled to receive the kind and number of shares
of Common Stock that such Holder would have owned or have been entitled to
receive after the happening of any of the events described above, had such
Warrant been exercised in full immediately prior to the happening of such event
or any record date with respect thereto (with any record date requirement being
deemed to have been satisfied), and, in any such case, the number of shares of
Common Stock issuable upon exercise of each Warrant shall be subject to further
adjustments under this Section 5.02. An adjustment made pursuant to this
Section 5.02(a) shall become effective at the record date, if any, for such
event.
(b) Distributions to Stockholders. In case the
Company shall issue to holders of its Common Stock rights, options, warrants
or convertible or exchangeable securities (other than a convertible or
exchangeable security subject to Section 5.01(c)) (collectively, the "rights")
entitling them to subscribe for or purchase Common Stock at a price per share
of Common Stock (determined by dividing (A) the total amount receivable by the
Company in consideration of the issuance of such rights plus the total
consideration payable to the Company upon exercise, conversion or exchange
thereof, by (B) the total number of shares of Common Stock covered by such
rights) that is lower than the then Current Market Price per share of Common
Stock in effect immediately prior to such issuance, then the number of shares
of Common Stock issuable upon the exercise of all Warrants then outstanding
shall be increased in a manner determined by multiplying the number of shares
of Common Stock theretofore issuable upon the exercise of all Warrants then
outstanding by a fraction, the numerator of which shall be the number of shares
of Common Stock outstanding immediately prior to the issuance of such rights
plus the number of additional shares of Common Stock offered for subscription
or purchase, and the denominator of which shall be the number of shares of
Common Stock outstanding immediately prior to the issuance of such rights plus
the number of shares of Common Stock which the aggregate consideration to be
received by the Company in connection with such issuance (as defined in the
following sentence) would purchase at the then Current Market Price per share
of Common Stock. For purposes of this Section 5.02 (b), the "aggregate
consideration to be received by the Company" in connection with any issuance of
such rights shall be deemed to be the consideration received by the Company for
such rights plus any consideration or premiums stated in such rights to be paid
for the shares of Common Stock covered thereby. Any increase of the number of
shares of Common Stock issuable upon exercise
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<PAGE> 12
of all Warrants then outstanding made pursuant to this Section 5.02(b) shall be
allocated among such Warrants on a pro rata basis.
(c) Issuance of Common Stock at Lower Values. In
case the Company shall, in a transaction to which Sections 5.02(a)is
inapplicable (and other than upon conversion of Series A Preferred Stock or
exercise of a Warrant), issue or sell shares of Common Stock, or rights,
options, warrants or convertible or exchangeable securities containing the
right to subscribe for or purchase shares of Common Stock, at a price per share
of Common Stock (determined, in the case of rights, options, warrants or
convertible or exchangeable securities, by dividing (A) the total amount
receivable by the Company in consideration of the issuance and sale of such
rights, options, warrants or convertible or exchangeable securities, plus the
total consideration payable to the Company upon exercise, conversion or
exchange thereof, by (B) the total number of shares of Common Stock covered by
such rights, options, warrants or convertible or exchangeable securities) that
is lower (at the date of such sale or issuance) than the then Current Market
Price per share of Common Stock in effect immediately prior to such sale or
issuance or for no consideration, then in each case the number of shares of
Common Stock thereafter issuable upon the exercise of all Warrants then
outstanding shall be increased in a manner determined by multiplying the number
of shares of Common Stock theretofore issuable upon the exercise of all
Warrants then outstanding by a fraction, of which the numerator shall be the
number of shares of Common Stock outstanding immediately prior to the sale or
issuance, plus the number of additional shares of Common Stock offered for
subscription or purchase or to be issued upon conversion or exchange of such
convertible or exchangeable securities, and of which the denominator shall be
the number of shares of Common Stock outstanding immediately prior to the sale
or issuance plus the number of shares of Common Stock which the aggregate
consideration to be received by the Company (as defined in the following
paragraph) in connection with such sale or issuance would purchase at the then
Current Market Price per share of Common Stock.
For the purpose of such adjustments the "aggregate
consideration to be received by the Company" therefor shall be deemed to be the
consideration received by the Company for such rights, options, warrants or
convertible or exchangeable securities plus any consideration or premiums
stated in such rights, options, warrants or convertible or exchangeable
securities to be paid for the shares of Common Stock covered thereby.
In case the Company shall issue or sell shares of
Common Stock or rights, options, warrants or convertible or exchangeable
securities containing the right to subscribe for or purchase shares of Common
Stock for a consideration consisting, in whole or in part, of property other
than cash or its equivalent, then in determining the "price per share of Common
Stock" and the "consideration" receivable by or payable to the Company for
purposes of Sections 5.02(b) and 5.02(c), the Board of Directors of the Company
shall determine, in good faith, the fair value of such property. In case the
Company shall issue and sell rights, options, warrants or convertible or
exchangeable securities containing the right to subscribe for or purchase
shares of Common Stock, together with one or more other securities as part of a
unit at a price per unit,
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<PAGE> 13
then in determining the "price per share of Common Stock" and the
"consideration" receivable by or payable to the Company for purposes of
Sections 5.02(b) and 5.02(c), the Board of Directors of the Company shall
determine, in good faith, the fair value of the rights, options, warrants or
convertible or exchangeable securities then being sold as part of such unit.
Any increase of the number of shares of Common Stock issuable
upon exercise of all Warrants then outstanding made pursuant to this Section
5.02(c) shall be allocated among such Warrants on a pro rata basis.
(d) Expiration of Rights, Options and Conversion
Privileges. Upon the expiration of any rights, options, warrants or conversion
or exchange rights that have previously resulted in an adjustment under this
Section 5.02, if any thereof shall not have been exercised, the number of
shares of Common Stock issuable upon the exercise of each Warrant shall be
readjusted and shall thereafter, upon any future exercise, be such as they
would have been had they been originally adjusted (or had the original
adjustment not been required, as the case may be) as if (i) the only shares of
Common Stock so issued were the shares of Common Stock, if any, actually issued
or sold upon the exercise of such rights, options, warrants or conversion or
exchange rights and (ii) such shares of Common Stock, if any, were issued or
sold for the consideration actually received by the Company upon such exercise
plus the consideration, if any, actually received by the Company for issuance,
sale or grant of all such rights, options, warrants or conversion or exchange
rights whether or not exercised; provided that no such readjustment shall have
the effect of decreasing the number of shares issuable upon exercise of each
Warrant by a number that is in excess of the amount or number of the adjustment
initially made in respect of the issuance, sale or grant of such rights,
options, warrants or conversion or exchange rights or shall have the effect of
decreasing the number of shares of Common Stock that have been issued upon
exercise of any Warrants prior to the date of such readjustment.
(e) Adjustment of Exercise Price. Whenever the
number of shares of Common Stock purchasable upon the exercise of each Warrant
is adjusted, as provided in Section 5.02(a), (b) or (c), the Exercise Price for
each share of Common Stock payable upon exercise of such Warrant shall be
adjusted by multiplying such Exercise Price immediately prior to such
adjustment by a fraction, the numerator of which shall be the number of shares
issuable upon the exercise of each Warrant immediately prior to such
adjustment, and the denominator of which shall be the number of shares so
issuable immediately thereafter.
(f) De minimis Adjustments. No adjustment in the
number of shares of Common Stock issuable under any Warrant shall be required
unless such adjustment would require an increase or decrease of at least one
percent (1%) in the number of shares of Common Stock purchasable upon an
exercise of each Warrant; provided, that any adjustments which by reason of
this Section 5.02(f) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations shall be
made to the nearest one-thousandth of a share.
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<PAGE> 14
(g) Reorganization, Reclassification or
Recapitalization of the Company. If and whenever subsequent to the date hereof
the Company shall effect (i) any reorganization, reclassification or
recapitalization of any shares of Common Stock (or any other shares of the
Company) (other than in the cases referred to in Section 5.02(a), (b) or (c)),
(ii) any consolidation or merger of the Company with or into another Person,
(iii) the sale, transfer or other disposition of the property, assets or
business of the Company as an entirety or substantially as an entirety or (iv)
any other transaction (or any other event shall occur) as a result of which
holders of shares of Common Stock become entitled to receive any shares of the
Company, any of its Subsidiaries or any other Person or securities and/or
property (including, without limitation, cash, and including regular dividends
payable out of earnings or any surplus legally available for distribution under
the laws of the jurisdiction of the Company's incorporation) with respect to or
in exchange for the shares of Common Stock (the transactions referred to in the
foregoing clauses (i), (ii), (iii) and (iv) being each hereinafter referred to
as a "Special Distribution"), there shall thereafter be deliverable upon the
exercise of this Warrant (including any partial exercise) (in lieu of or in
addition to the Common Stock or other securities theretofore deliverable, as
appropriate) the highest number of securities and/or the greatest amount of
property (including, without limitation, cash) which the holders of the
Warrants would have received if the Warrants had been exercised (or the
appropriate proportion thereof upon any partial exercise) immediately prior to
such Special Distribution (or the applicable record date therefor).
Prior to and as a condition of the consummation of any Special
Distribution, the Company shall make equitable, written adjustments as provided
in this paragraph in the application of the provisions set forth herein and in
the other Basic Documents for the benefit of the Holders of the Warrants, so
that all such provisions shall thereafter be applicable, as nearly as possible,
in relation to any Common Stock or other securities or other property
thereafter deliverable upon exercise of the Warrants and so that the Holders of
the Warrants will (prior to exercise) enjoy all of the rights and benefits of
this Agreement (including the anti-dilution provisions hereof) and enjoy all of
the rights and benefits enjoyed by any Person who shall have acquired any such
Common Stock, other securities or other property (including, without
limitation, cash and/or shares of any Subsidiary of the Company) in connection
with any such Special Distribution, including, without limitation, any
subsequent tender offer or redemption of any such shares or other securities.
Any such adjustment shall be made by and set forth in a supplemental agreement
of the Company and/or the successor entity, as applicable, for the benefit of
the Holders of the Warrants and in form and substance reasonably acceptable to
the Holders of 75% or more of the Warrants, which agreement shall bind the
Company and/or the successor entity, as applicable, and all Holders of Warrants
then outstanding and shall be accompanied by a favorable opinion of the regular
outside counsel to the Company or the successor entity, as applicable (or such
other firm as is reasonably acceptable to the Holders of 75% or more of the
Warrants), as to the enforceability of such agreement as to such other matters
as the Holders of a majority of the Warrants may reasonably request.
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<PAGE> 15
(h) Other Dilutive Events. If any other
transaction or event shall occur (excluding any transaction or event to which
Sections 5.02 (a), (b) and (c) are applicable, but including, without
limitation, any issuance, repurchase, redemption, any issuance of so-called
phantom stock, stock appreciation rights or similar interests (other than
pursuant to an employee benefit plan) or other distribution in respect of any
Common Stock or other distribution in respect of any Common Stock or other
securities of the Company or of any other Person) as to which the other
provisions of this Section 5.02 are not strictly applicable but the failure to
make any adjustment to the Exercise Price or the Common Stock issuable upon
exercise of the Warrants or to any of the other terms of this Agreement or the
Warrants would not fairly protect the purchase rights and other rights
represented by the Warrants in accordance with the essential intent and
principles hereof, then, and as a condition to the consummation of any such
transaction or event, and in each such case, the Company shall appoint a firm
of independent certified public accountants of recognized national standing
(which may be the regular auditors of the Company), which shall give its
opinion as to the adjustment, if any, on a basis consistent with the essential
intent and principles established in this Section 5.02, necessary to preserve,
without dilution, the rights represented by the Warrants. The certificate of
any such firm of accountants shall be conclusive evidence of the correctness of
any computation made under this Section 5.02(h). Upon receipt of such opinion,
the Company will promptly mail a copy thereof to the Holders and shall make the
adjustments described therein.
5.03 Notice of Adjustment. Whenever the number of shares
of Common Stock or other stock or property issuable upon the exercise of each
Warrant is adjusted, as herein provided, the Company shall deliver to the
Warrant Agent a certificate of a firm of independent public accountants
selected by the Board of Directors of the Company (who may be the regular
accountants employed by the Company) setting forth the number of shares of
Common Stock or other stock or property issuable upon the exercise of each
Warrant after such adjustment, setting forth a brief statement of the facts
requiring such adjustment and setting forth the computation by which such
adjustment was made and shall cause the Warrant Agent promptly to mail by first
class mail, postage prepaid, to each Holder notice of such adjustment or
adjustments. The Warrant Agent shall be entitled to rely on such certificate
and shall be under no duty or responsibility with respect to any such
certificate, except to mail a copy to each Holder as provided in this Section
5.03. The Warrant Agent shall not at any time be under any duty or
responsibility to any Holder to determine whether any facts exist that may
require any adjustment of the number of shares of Common Stock or other stock
or property issuable on exercise of the Warrants, or with respect to the nature
or extent of any such adjustment when made, or with respect to the method
employed in making such adjustment or the validity or value (or the kind or
amount) of any shares of Common Stock or other stock or property which may be
issuable on exercise of the Warrants. The Warrant Agent shall not be
responsible for any failure of the Company to make any cash payment or to
issue, transfer or deliver any shares of Common Stock or stock certificates or
other stock or properties upon the exercise of any Warrant.
5.04 Statement on Warrant Certificates. Irrespective of
any adjustment in the number or kind of shares issuable upon the exercise of
the Warrants, Warrant Certificates
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<PAGE> 16
theretofore or thereafter issued may continue to express the same number and
kind of shares as are stated in the Warrant Certificates initially issuable
pursuant to this Agreement; provided, however, that the actual number of shares
of Common Stock subject to such Warrants shall take into account any
adjustments thereto required to be made pursuant to the provisions of this
Agreement.
ARTICLE VI
WARRANT HOLDERS
6.01 No Rights as Stockholders. Other than as provided in
Section 6.02, nothing contained in this Agreement or in any Warrant Certificate
shall be construed as conferring upon any of the Holders or their transferees
the right to vote or to receive dividends or to consent or to receive notice as
stockholders in respect of any meeting of stockholders of the Company for the
election of the directors of the Company or any other matter, or any rights
whatsoever as stockholders of the Company.
6.02 Notice of Certain Events. If, however, at any time
prior to the exercise or termination of the Warrants:
(1) the Company shall declare any dividend
payable in cash or in any securities upon its Common Stock or
make any distribution to the holders of its Common Stock;
(2) the Company shall offer to all holders of its
Common Stock any additional shares of Common Stock or
securities convertible or exchangeable for shares of Common
Stock or any right to subscribe for or purchase any thereof;
(3) a dissolution, liquidation, or winding up of
the Company (other than in connection with a consolidation,
merger, sale, transfer or lease of all or substantially all of
its property, assets and business as an entirety) shall be
proposed;
(4) any consolidation or merger to which the
Company is a party and for which approval of the holders of
Common Stock is required, or the conveyance or transfer of the
properties and assets of the Company as, or substantially as,
an entirety, or any reclassification or change of outstanding
shares of Common Stock issuable upon exercise of the Warrants
or as a result of a subdivision or combination;
(5) the occurrence of any event giving rise to an
adjustment to the number of shares of Common Stock issuable
upon the exercise of the Warrants or
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<PAGE> 17
to the Exercise Price pursuant to Sections 5.01 or 5.02
hereof, together with any notices required pursuant to Section
5.03 hereof; or
(6) the removal or resignation of the Warrant
Agent in accordance with Section 8.01 hereof;
the Company shall give to the Warrant Agent and mail (or cause to be mailed) to
each Holder as provided in Section 5.03 hereof, at least 20 days prior to the
applicable record date hereinafter specified, a written notice stating (i) the
date as of which the holders of record of shares of Common Stock entitled to
receive any such dividends, distributions, rights or warrants are to be
determined or (ii) the date on which any such dissolution, liquidation, winding
up, consolidation, merger, conveyance or transfer is expected to become
effective and the date as of which it is expected that holders of record of
shares of Common Stock shall be entitled to exchange their shares of Common
Stock for securities or other property, if any, deliverable upon such
reclassification, consolidation, merger, conveyance, transfer, dissolution,
liquidation, or winding up. Failure to mail or receive such notice or any
defect therein or in the publication or mailing thereof shall not affect the
validity of any action taken in connection with such dividend, distribution or
subscription rights, or such proposed dissolution, liquidation, winding up,
consolidation, merger, conveyance transfer or reclassification, or other event
specified in this Section 6.02.
ARTICLE VII
CONCERNING THE WARRANT AGENT
7.01 Nature of Duties and Responsibilities Assumed. The
Company hereby appoints the Warrant Agent to act as agent of the Company
pursuant to this Agreement. The Warrant Agent hereby accepts the appointment
as agent of the Company and agrees to perform that agency upon the terms and
conditions herein set forth, by all of which the Company and the Holders, by
virtue of their acceptance of Warrant Certificates, shall be bound.
The Warrant Agent shall not by countersigning Warrant
Certificates or by any other act hereunder be deemed to make any
representations as to validity or authorization of the Warrants or the Warrant
Certificates (except as to its countersignature thereon) or of any Warrant
Shares delivered upon exercise or tender of any Warrant, or the correctness of
any representations of the Company.
The Warrant Agent shall not (a) be liable for any recital or
statement of fact contained herein or in the Warrant Certificates or for any
action taken, suffered or omitted by it in good faith in the belief that any
Warrant Certificate or any other documents or any signatures are genuine or
properly authorized, (b) be responsible for any covenants and obligations
contained in this Agreement or in the Warrant Certificates, or (c) be liable
for any act or
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<PAGE> 18
omission in connection with this Agreement except for its own negligence or
willful misconduct. The Warrant Agent is hereby authorized to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the Chief Executive Officer, any Vice President, the
Treasurer or Secretary of the Company and to apply to any such officer for
instructions, and the Warrant Agent shall not be liable to the Company or any
Holder for any action taken or suffered to be taken by it in good faith in
accordance with the instructions of any such officer, but in its discretion the
Warrant Agent may in lieu thereof accept other evidence of such or may require
such further or additional evidence as it may deem reasonable.
Whenever in the performance of its duties, the Warrant Agent
shall deem it necessary or desirable that any fact or matter be proved or
established by the Company prior to taking any action hereunder, such fact or
matter (unless other evidence in respect thereof is specifically prescribed
herein) may be deemed to be conclusively proved and established by a
certificate signed by the Chairman of the Board, the Chief Executive Officer,
any Vice President, the Treasurer or Secretary of the Company and delivered to
the Warrant Agent. The Warrant Agent shall not be charged with any knowledge
it may obtain in its individual capacity or in any capacity other than as
Warrant Agent.
The Warrant Agent may execute and exercise any of the rights
and powers hereby vested in it or perform any duty hereunder either itself or
by or through it attorneys, agents or employees, provided reasonable care has
been exercised in the selection and in the continued employment of any such
attorney, agent or employee. The Warrant Agent shall not be under any
obligation or duty to institute, appear in or defend any action, suit or legal
proceeding in respect hereof, unless first indemnified to its satisfaction, but
this provision shall not affect the power of the Warrant Agent to take such
action as the Warrant Agent may consider proper, whether with or without such
indemnity. The Warrant Agent shall promptly notify the Company in writing of
any claim made or action, suit or proceeding instituted against it arising out
of or in connection with this Agreement.
The Company will perform, execute, acknowledge and deliver or
cause to be performed, executed, acknowledged and delivered all such further
acts, instruments and assurances as may reasonably be required by the Warrant
Agent in order to enable the Warrant Agent to carry out or perform its duties
under this Agreement.
None of the rights of any holder of any Warrant and none of
the duties of the Company shall be adversely affected in the event that, for
any reason, any Warrant Agent fails to act resigns or otherwise is not
appointed hereunder, it being understood that, in such event, the Company shall
have all of the duties and responsibilities of the Warrant Agent hereunder.
7.02 Right to Consult Counsel. The Warrant Agent may at
any time consult with legal counsel satisfactory to it (who may be legal
counsel for the Company), and the Warrant Agent shall incur no liability or
responsibility to the Company or to any Holder for any
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<PAGE> 19
action taken, suffered or omitted by it in good faith in accordance with the
opinion or advice of such counsel.
7.03 Compensation; Reimbursement; Indemnity. The Company
agrees to pay to the Warrant Agent from time to time compensation for all
services rendered by it hereunder as the Company and the Warrant Agent may
agree from time to time, and to reimburse the Warrant Agent for reasonable
expenses and disbursements incurred in connection with the execution and
administration of this Agreement (including the reasonable compensation and the
expenses of its counsel), and further agrees to indemnify the Warrant Agent
for, and to hold it harmless against, any loss, liability or expense incurred
without negligence or bad faith on its part, arising out of or in connection
with the acceptance and administration of this Agreement, including the costs
and expenses of defending itself against any claim or liability in connection
with the exercise or performance of any of its powers or duties hereunder. No
provision of this Agreement shall require the Warrant Agent to expend or risk
its own funds or otherwise incur any financial liability in the performance of
any of its duties hereunder, or in the exercise of any of its rights or powers,
if it shall have reasonable grounds for believing that repayment of such funds
or adequate indemnity against such risk or liability is not reasonably assured.
7.04 Warrant Agent May Hold Company Securities. The
Warrant Agent and any stockholder, director, officer or employee of the Warrant
Agent may buy, sell or deal in any of the Warrants or other securities of the
Company or become pecuniarily interested in transactions in which the Company
may be interested, or contract with or lend money to the Company or otherwise
act as fully and freely as though it were not the Warrant Agent under this
Agreement. Nothing herein shall preclude the Warrant Agent from acting in any
other capacity for the Company or for any other legal entity.
ARTICLE VIII
CHANGE OF WARRANT AGENT
8.01 Resignation and Removal. The Warrant Agent may
resign and be discharged from its duties under this Agreement by giving to the
Company 30 days' notice in writing. The Warrant Agent may be removed with or
without cause by like notice to the Warrant Agent from the Company. If the
Warrant Agent shall resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Warrant Agent. If the
Company shall fail to make such appointment within a period of 30 days after
such removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Warrant Agent or by any Holder
(who shall with such notice submit his Warrant Certificate(s) for inspection by
the Company), then any Holder may apply to any court of competent jurisdiction
for the appointment of a successor to the Warrant Agent. Pending appointment
of a successor warrant agent, either by the Company or by any court, the duties
of the Warrant Agent shall be carried out by the Company. Any successor
warrant agent, whether appointed by the Company or any court, shall be a bank
or trust company in good standing,
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<PAGE> 20
incorporated under the laws of the United States of America or any State
thereof or the District of Columbia and having at the time of its appointment
as warrant agent a combined capital and surplus of at least $100,000,000.
After appointment, the successor warrant agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally named
as Warrant Agent without further act or deed, and shall execute and deliver to
the Company its written agreement to be bound by the terms of this agreement.
The former Warrant Agent shall deliver and transfer to the successor warrant
agent any property at the time held by it hereunder, and execute and deliver
any further assurance, conveyance, act or deed necessary for such purpose.
Failure to file any notice provided for in this Section 8.01, however, or any
defect therein, shall not affect the legality or validity of the resignation or
removal of the Warrant Agent or the appointment of the successor warrant agent,
as the case may be. In the event of such resignation or removal the successor
warrant agent or the Company shall mail by first class mail, postage prepaid,
to each Holder, written notice of such resignation or removal and the name and
address of such successor warrant agent.
8.02 Merger, Consolidation or Change of Name of Warrant
Agent. Any corporation into which the Warrant Agent may be merged or with
which it may be consolidated, or any corporation resulting from any merger or
consolidation to which the Warrant Agent shall be a party, or any corporation
succeeding to all or substantially all of the corporate agency business of the
Warrant Agent shall be the successor to the Warrant Agent hereunder without the
execution or filing of any paper or any further act on the part of any party
hereto, provided that such corporation would be eligible for appointment as
successor warrant agent under the provisions of Section 8.01 hereof.
ARTICLE IX
MISCELLANEOUS
9.01 Payment of Taxes. The Company shall pay all taxes
and other governmental charges that may be imposed on the Company, the Warrants
or the delivery of Warrant Shares or the holders thereof upon exercise of the
Warrants. The Company shall not be required, however, to pay any income taxes
imposed on any Holder in connection with the transfer or exchange of any
Warrant Certificate, and shall not be required to issue any Warrant
Certificates or Warrant Shares until such tax or charge has been paid or it has
been established to the Company's satisfaction that no such tax or other charge
is due.
9.02 Merger or Consolidation of Company. The Company will
not engage in (i) any consolidation or merger to which the Company is a party
and as a result of which a holder of Common Stock shall be entitled to receive
stock, other securities or other assets (including cash) with respect to or in
exchange for Common Stock, or (ii) the sale or conveyance of all or
substantially all of the property or business of the Company as an entirety
unless the acquiring Person (if not the Company), expressly assumes the due and
punctual performance and
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<PAGE> 21
observance of each and every covenant and condition of this Agreement and each
Warrant Certificate issued hereunder to be performed and observed by the
Company.
9.03 No Impairment or Amendment; Continued Validity. The
Company shall not by any action, including, without limitation, amending its
organizational documents, any reorganization, recapitalization, transfer of
assets, consolidation, merger, dissolution, issue or sale of Common Stock or
other securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant Agreement or any
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such action as may be necessary or
appropriate to protect the rights of the Holder hereof against impairment.
Without limiting the generality of the foregoing, the Company (a) will not
permit the par value of any Common Stock issuable upon exercise of the Warrants
to be greater than the amount payable therefor upon exercise, (b) will take all
such action in order that the Company may validly issue fully paid and
nonassessable Warrant Shares; (c) will obtain and maintain all such
authorizations, exemptions or consents from any public regulatory body having
jurisdiction as may be necessary to enable the Company to perform its
obligations under the Warrant Agreement and the Warrants, (d) will not issue
any capital stock or enter into any agreement or transaction, the terms of
which would have the effect, directly or indirectly, of preventing the Company
from honoring its obligations hereunder or under any of the other Basic
Documents for the benefit of the holders of the Warrants and/or the Warrant
Shares, and (e) will not amend or modify any term, condition or provision of
its organizational documents, or any related agreement, document or instrument,
in a manner which is, or could reasonably be expected to be, materially adverse
to the interests of any Holder of Warrants.
So long as any Warrants are outstanding, the Company will
acknowledge in writing, in form satisfactory to any Holder of any such
security, the continued validity of the Company's obligations hereunder.
9.04 Obligations Several; Independent Nature of Each
Holder's Rights. Each obligation of any Holder of the Warrants is several and
no such Holder shall be responsible for the obligations of any other Holder.
Nothing contained herein, and no action taken by any such Holder pursuant
hereto, shall be deemed to constitute such Holders as a partnership, an
association, a joint venture or any other kind of entity. Each Holder of
Warrants shall be entitled to protect and enforce its rights or any rights of
the Warrant Agent arising out of this Agreement or the Warrant without notice
to or the consent of any other person (including but not limited to the Warrant
Agent) and it shall be necessary for any other such Holder or the Warrant Agent
to be joined as an additional party in any proceeding for such purpose.
9.05 Notices. Any notice or demand authorized by this
Agreement to be given to the Warrant Agent or to the Company shall be in
writing and shall be delivered in person or by facsimile transmission, or
mailed by first class mail, postage prepaid:
(1) to the Warrant Agent, at
- 17 -
<PAGE> 22
The First National Bank of Boston
150 Royall Street
Mail Stop 45-02-62
Canton, Massachusetts 02021
Attention: Margaret Dunn
Facsimile: (617) 575-2549
(2) to the Company, at
Metrocall, Inc.
6677 Richmond Highway
Alexandria, Virginia 22306
Attention: Chief Financial Officer
Facsimile: (703) 768-9625
Each party hereto may change the address to which notices to it are to be
delivered or mailed thereunder by notice to the other party.
Any notice pursuant to this Agreement by the Company or the
Warrant Agent to any Holder shall be in writing and shall be mailed by first
class mail, postage prepaid, or otherwise delivered, to such Holder at its
address in the Warrant Register.
Notices delivered personally shall be effective at the time
delivered by hand, notices sent by mail shall be effective two days after
mailing, notices sent by facsimile transmission shall be effective when receipt
is acknowledged and notices sent by courier guaranteeing next day delivery
shall be effective on the next business day after timely delivery to the
courier.
9.06 Governing Law. THIS AGREEMENT AND EACH WARRANT
CERTIFICATE ISSUED HEREUNDER SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE
LAWS OF THE STATE OF DELAWARE AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF SUCH STATE APPLICABLE TO CONTRACTS TO
BE MADE AND PERFORMED ENTIRELY WITHIN SUCH STATE.
9.07 Benefits of Agreement. This Agreement shall be for
the sole and exclusive benefit of the Company, the Warrant Agent and the
Holders. Nothing in this Agreement shall be construed to give to any Person
other than the Company, the Warrant Agent and the Holders any legal or
equitable right, remedy or claim under this Agreement.
9.08 Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company, the Warrant Agent or the
Holders shall bind and inure to the benefit of their respective successors and
assigns.
- 18 -
<PAGE> 23
9.09 Headings. The headings of the sections and
paragraphs of this Agreement have been inserted for convenience only and shall
have no effect on the interpretation of this Agreement.
9.10 Construction. As used herein, the singular shall
include the plural (and vice versa), the masculine shall include the feminine
and, and the word "it" or "its" shall include both the masculine and the
feminine.
9.11 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, and such
counterparts together shall constitute one instrument.
9.12 Amendment. No term of this Agreement or any Warrant
may be amended, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against which enforcement of the
amendment, waiver, discharge or termination is sought; provided, however, that
amendments and waivers of provisions of the Warrants which do not (i) adversely
affect the protections against dilution in Sections 5.01 or 5.02 hereof, (ii)
increase the Exercise Price or (iii) otherwise adversely affect the Holders of
the Warrants, shall be binding upon the Holders of all of the Warrants if made
with the written consent of the Holders of 75% of the Warrants Shares.
9.13 Nonwaiver. No course of dealing or any delay or
failure to exercise any right, power or remedy hereunder on the part of the
Holder of any Warrant shall operate as a waiver of or otherwise prejudice such
Holder's rights, powers or remedies.
9.14 Like Tenor. All Warrants shall at all times be
identical, except as to the preamble thereto.
9.15 Remedies. The Company acknowledges that the remedies
at law of the Holder of a Warrant in the event of any default or threatened
default by the Company in the performance of or compliance with any of the
terms of any Warrant are not and will not be adequate and that, to the fullest
extent permitted by law, such terms may be specifically enforced by a decree
for the specific performance of any agreement contained herein or by an
injunction against a violation of any of the terms hereof or otherwise without
requiring such Holder to post any bond or other security, unless otherwise
required by applicable law (which cannot be waived by the Company or the
Warrant Agent).
9.16 Severability. In case any provision in or obligation
under this Agreement or the Warrants shall be invalid, illegal or unenforceable
in any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
- 19 -
<PAGE> 24
9.17 Integration. This Agreement, supersedes all prior
negotiations and constitutes the entire agreement of the parties with respect
to the transactions contemplated herein.
9.18 Termination. This Agreement shall terminate on the
day following the later to occur of: (i) the expiration of the Exercise Period,
and (ii) the date on which Warrant Shares have been issued upon the exercise of
all Warrants pursuant hereto.
- 20 -
<PAGE> 25
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the 15th day of November, 1996
METROCALL, INC.
By:/s/ VINCENT D. KELLY
------------------------------
Vincent D. Kelly
Chief Financial Officer
THE FIRST NATIONAL BANK OF BOSTON
By:/s/ COLLEEN SHEA KEETING
-------------------------------
- 21 -
<PAGE> 26
EXHIBIT A
TO
WARRANT AGREEMENT
[FORM OF WARRANT CERTIFICATE]
[FACE]
EXERCISABLE AFTER NOVEMBER 15, 1996 AND
ON OR BEFORE NOVEMBER 15, 2001
WARRANT CERTIFICATE
METROCALL, INC.
No.__________ Certificate for ___________ Warrants
This Warrant Certificate certifies that, for value received,
___________, or registered assigns, is the registered holder of the number of
Warrants set forth above. Each Warrant entitles the holder thereof (a
"Holder"), subject to the conditions herein and in the Warrant Agreement
referred to below, to purchase during the Exercise Period (defined below) the
number of fully paid and nonassessable shares of the Common Stock par value
$.01 per share, of Metrocall, Inc., a Delaware corporation (the "Company"),
that is equal to 18.266 timesthe number of Warrants set forth above, at the
purchase price of $7.40 per share (the "Exercise Price") payable in cash or in
shares of Series A Convertible Preferred Stock par value, $.01, of the Company
as set forth in the Warrant Agreement; provided, however, that the number or
kind of shares (or, in certain events other property) purchasable upon exercise
of the Warrants and the Exercise Price may, as of the date of this Warrant
Certificate, have been, or may after such date be, adjusted as a result of
certain events, as more fully provided in the Warrant Agreement.
Outstanding Warrants not exercised prior to 5:00 p.m., Eastern
Standard Time, on November 15, 2001 shall become void and all rights hereunder
and all rights in respect hereof shall cease at that time.
The Warrant(s) evidenced by this Warrant Certificate shall not
be valid or obligatory for any purpose until it shall have been countersigned
by the Warrant Agent.
- 22 -
<PAGE> 27
Reference is hereby made to the further provisions of this
Warrant Certificate set forth on the reverse hereof and such further provisions
shall for all purposes have the same effect as though fully set forth at this
place.
IN WITNESS WHEREOF, Metrocall, Inc. has caused this Warrant
Certificate to be duly executed under its corporate seal.
METROCALL, INC.
By:
------------------------------
William L. Collins, III
Chief Executive Officer and President
Attest:
By:
------------------------------
Shirley B. White
Assistant Secretary
Countersigned:
Dated: November 15, 1996
THE FIRST NATIONAL BANK OF BOSTON
as Warrant Agent
By:
------------------------------
Authorized Officer
[FORM OF WARRANT CERTIFICATE]
[REVERSE]
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY
STATE, AND MAY NOT BE SOLD, OR OTHERWISE TRANSFERRED, IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT AND UNDER ANY SUCH
APPLICABLE STATE LAWS.
- 23 -
<PAGE> 28
The Warrants evidenced by this Warrant Certificate are part of
a duly authorized issue of Warrants issued pursuant to the Warrant Agreement
dated as of November 15, 1996 (the "Warrant Agreement") between the Company and
The First National Bank of Boston, as warrant agent (the "Warrant Agent").
This Warrant Certificate is subject to and entitled to the benefits of all of
the terms, provisions and conditions of the Warrant Agreement, which Warrant
Agreement is hereby incorporated herein by reference and made a part hereof and
to which Warrant Agreement reference is hereby made for a full description of
the rights, limitations of rights, obligations, duties and immunities hereunder
of the Company, the Warrant Agent and the Holders of the Warrant Certificates.
A copy of the Warrant Agreement may be obtained for inspection by the Holder
hereof upon written request to the Warrant Agent.
The Warrant Agreement provides that upon the occurrence of
certain events the number of shares of Common Stock purchasable upon exercise
of each Warrant and the Exercise Price may, subject to certain conditions, be
adjusted and under certain circumstances the Warrant may become exercisable for
securities or other assets other than the shares referred to on the face
hereof.
The Holder hereof may be treated by the Company, the Warrant
Agent and all other persons dealing with this Warrant Certificate as the
absolute owner hereof for any purpose and as the person entitled to exercise
the rights represented hereby, or to the transfer hereof on the list of Holders
of Warrants maintained by the Warrant Agent (the "Warrant Register"), any
notice to the contrary notwithstanding, and until such transfer on the Warrant
Register, the Company may treat the Holder hereof as the owner for all
purposes.
As provided in and subject to the terms of the Warrant
Agreement, the Warrants evidenced hereby may be exercised during the Exercise
Period in whole or in part by presentation of this Warrant Certificate with the
Purchase Form on the reverse side hereof duly executed and simultaneous payment
of the Exercise Price at the corporate trust office of the Warrant Agent in New
York City. Payment of such price shall be made (a) in cash or by certified or
official bank check or wire transfer, or a combination thereof, (b) by delivery
of shares of the Company's Series A Convertible Preferred Stock par value $.01
having an aggregate Stated Value plus accrued and unpaid dividends equal to the
aggregate Exercise Price at the option of the Holder hereof or (c) by foregoing
a number of shares in accordance with Section 2.02(iii) of the Warrant
Agreement. If this Warrant Certificate shall be exercised during the Exercise
Period in part, the Holder shall be entitled to receive upon surrender hereof,
another Warrant Certificate or Warrant Certificates countersigned by the
Warrant Agent for the number of Warrants not exercised.
This Warrant Certificate, upon surrender of this Warrant
Certificate properly endorsed, may be exchanged for another Warrant Certificate
or Warrant Certificates of like tenor and date evidencing Warrants entitling
the Holder to purchase a like aggregate number of shares of Common Stock as the
Warrants evidenced by the Warrant Certificate or Warrant Certificates
surrendered entitled such Holder to purchase.
- 24 -
<PAGE> 29
Except as set forth in the Warrant Agreement, no Holder shall,
in respect of any Warrants, be entitled to vote or be deemed the holder of
Common Stock for any purpose, nor shall anything contained in the Warrant
Agreement or herein be construed to confer upon such Holder, as such, any of
the rights of a shareholder of the Company or any right to vote for the
election of Directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action
(whether upon any recapitalization, issuance of stock, reclassification of
stock, change of par value, or change of stock to no par value, consolidation,
merger, conveyance, or otherwise) or, to receive notice of meetings or to
receive dividends or subscription rights or otherwise, until the Warrant or
Warrants evidenced by this Warrant Certificate shall have been exercised as
provided in the Warrant Agreement.
- 25 -
<PAGE> 30
PURCHASE FORM
(TO BE EXECUTED ONLY UPON EXERCISE OF WARRANT)
The undersigned hereby irrevocably exercises
________________of the Warrants represented by this Warrant Certificate for the
purchase of 18.266 shares of Common Stock par value $.01 per share, of
Metrocall, Inc. for each such Warrant, herewith tenders payment of the Exercise
Price for such shares of Common Stock, in full, (a) in the form of a certified
or official bank check or wire transfer payable to the order of Metrocall, Inc.
or a combination thereof, (b) such number of shares of the Company's Series A
Convertible Preferred Stock par value $.01, having an aggregate stated value
plus accrued and unpaid dividends equal to the aggregate Exercise Price, in the
amount of $ , (c) by foregoing such number of shares receivable upon
exercise of such Warrants with an aggregate Current Market Price equal to the
aggregate Exercise Price for such shares of Common Stock or (d) a combination
of clauses (a), (b) or (c) above, all in accordance with the terms of the
within Warrant Certificate and the Warrant Agreement referred to therein (the
"Warrant Agreement"), surrenders this Warrant Certificate and all right, title
and interest herein, and directs that the shares of Common Stock deliverable
upon exercise of the Warrants and a Warrant Certificate for the remaining
Warrant(s), if any, be registered or placed in the name(s) and at the
addressees) specified below and delivered thereto.
Dated: , 19
----------------- --
(1)
----------------------------
(Signature of Owner)
------------------------------
(Street Address)
-------------------------------
(City) : (State) (Zip Code)
Signature Guaranteed by:
-------------------------------
- ------------------
- 26 -
<PAGE> 31
The signatures on the Purchase Note must correspond with the
name as written upon the face of the within Warrant
Certificate in every particular, without alteration or
enlargement or any change whatever, and must be guaranteed by
a national bank or trust company or by a member firm of any
national securities exchange.
COMMON STOCK TO BE ISSUED TO:
Please insert social security or identifying number:
Name:
Street Address:
City, State and Zip Code:
ANY UNEXERCISED WARRANTS EVIDENCED BY THE WITHIN WARRANT
CERTIFICATE TO BE ISSUED TO:
Please insert Social Security or identifying number:
Name:
Street Address:
City, State and Zip Code:
- 27 -
<PAGE> 32
FORM OF ASSIGNMENT
ASSIGNMENT
(TO BE EXECUTED ONLY UPON ASSIGNMENT OF THE WARRANT CERTIFICATE)
FOR VALUE RECEIVED, the undersigned registered holder of the
within Warrant Certificate hereby sells, assigns and transfers unto the
Assignee(s) named below (including the undersigned with respect to any Warrants
constituting a part of the Warrants evidenced by the within Warrant Certificate
not being assigned hereby) all of the right, title and interest of the
undersigned under the within Warrant Certificate, with respect to the number of
Warrants set forth below:
<TABLE>
<S> <C> <C> <C>
Social Security
or other
identifying
Name of number of Number of
Assignee Address Assignee Warrants
- -------- ------- -------- --------
</TABLE>
and does hereby irrevocably constitute and appoint the Warrant Agent referred
to in the Warrant Certificate the undersigned's attorney to make such transfer
on the books of Metrocall, Inc. maintained for that purpose, with full power of
substitution in the premises.
Dated: , 19
----------------- --
(1)
----------------------------
(Signature of Owner)
------------------------------
(Street Address)
-------------------------------
(City) : (State) (Zip Code)
Signature Guaranteed by:
- 28 -
<PAGE> 33
--------------------------------
- --------------------
(1) The signature must correspond with the name as written upon the face
of the within Warrant Certificate in every particular, without
alteration or enlargement or any change whatever, and must be
guaranteed by a national bank or trust company or by a member firm of
any national securities exchange.
- 29 -
<PAGE> 1
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is
entered into as of November 15, 1996, by and among METROCALL, INC., a Delaware
corporation (the "Company"), and each of the entities listed on the signature
pages hereof and on the Schedule of Purchasers attached as Exhibit A hereto
(each a "Purchaser" and, collectively, the "Purchasers").
RECITALS
WHEREAS, the Company and the Purchasers have entered into that
certain Unit Purchase Agreement, dated as of November 15, 1996 (the "Unit
Purchase Agreement"), pursuant to which the Purchasers are to purchase Units
consisting of (i) one share of the Company's Series A Convertible Preferred
Stock (the "Preferred Stock"), the terms and conditions of which are set forth
in the Certificate of Designation (as hereinafter defined), and (ii) one
warrant (each a "Warrant") representing the right to purchase 18.226 shares of
the Company's common stock, par value $.01 (the "Common Stock"), on the terms
and conditions set forth in the Warrant Agreement (as hereinafter defined); and
WHEREAS, in connection with the purchase and sale of the
Units, the Company has agreed, on the terms and conditions set forth herein, to
register shares of Preferred Stock and shares of Common Stock as set forth
below.
NOW THEREFORE, in consideration of the foregoing recitals and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.01 "Certificate of Designation" means the Certificate or
Designation, Number, Powers, Preferences and Relative, Participating, Optional
and Other Rights of Series A Convertible Preferred Stock of Metrocall, Inc.,
the form of which is attached as Exhibit A to the Unit Purchase Agreement.
1.02 "Closing" means the closing of the purchase and sale
of Units pursuant to the Unit Purchase Agreement.
1.03 "Commission" means the Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act.
<PAGE> 2
1.04 "Conversion Shares" means shares of Common Stock
issuable upon conversion of Preferred Shares, provided, however, that any
Conversion Share will cease to be a Conversion Share when (i) such Conversion
Share has been transferred pursuant to an effective registration statement
under the Securities Act covering such Conversion Share (but not including any
transfer exempt from registration under the Securities Act), (ii) the Holder of
such Conversion Share is then able to use Rule 144 promulgated under the
Securities Act (or any successor provision) to transfer such Conversion Share
without regard to any restrictions pursuant to Rule 144(k), or (iii) the
Preferred Stock which is convertible into such Conversion Share has been
transferred pursuant to an effective registration statement under the
Securities Act covering such Preferred Stock (but not including any transfer
exempt from registration under the Securities Act).
1.05 "Exchange Act" means the Securities Exchange Act of
1934, as amended, or any similar federal statute and the rules and regulations
of the Commission thereunder, all as the same shall be in effect from time to
time.
1.06 "Exercise Shares" means shares of Common Stock
issuable upon exercise of Warrants.
1.07 "Governmental Authority" means any nation or
government, any state or other political subdivision thereof and any court,
panel, judge, board, bureau, commission, agency or other entity, body or other
Person exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
1.08 "Holder" means each Purchaser and each transferee
permitted pursuant to Section 6.04 of this Agreement that has become a party to
this Agreement as provided in Section 6.04; provided, however, that a
transferee of Preferred Shares that is not an affiliate of a Purchaser shall be
deemed not to be a Holder for purposes of Sections 1.11 and 2.02 of this
Agreement.
1.09 "Person" means an individual or corporation,
partnership, trust, unincorporated organization, association or other entity
and includes any Governmental Authority.
1.10 "Preferred Shares" means the shares of Series A
Convertible Preferred Stock issued to the Purchasers pursuant to the Unit
Purchase Agreement and any additional or replacement shares of Preferred Stock
issued with respect to Preferred Shares upon any stock dividend, stock split,
recapitalization or similar event.
1.11 "Preferred Shares Group" means all Preferred Shares
held by Holders that were either (a) issued to a given Purchaser pursuant to
the Unit Purchase Agreement or (b) issued to a Holder after Closing as
dividends on the Preferred Shares issued at Closing to such
- 2 -
<PAGE> 3
Purchaser (including dividends on such dividends), regardless of the identities
of the Holders of the Preferred Shares that comprise the Preferred Shares
Group.
1.12 "Registrable Securities" means Preferred Shares and
any other securities issued with respect to Preferred Shares upon any stock
dividend, stock split, recapitalization or similar event; provided, however,
that Conversion Shares shall not be deemed to be Registrable Securities; and
provided further that any Registrable Security will cease to be a Registrable
Security when (i) such Registrable Security has been transferred pursuant to an
effective registration statement under the Securities Act covering such
Registrable Security (but not including any transfer exempt from registration
under the Securities Act), (ii) such Registrable Security is no longer held of
record by a Holder, or (iii) the Holder of such Registrable Security is then
able to use Rule 144 promulgated under the Securities Act (or any successor
provision) to transfer such Registrable Security without regard to any
restrictions pursuant to Rule 144(k).
1.13 "Securities Act" means the Securities Act of 1933, as
amended, or any similar federal statute and the rules and regulations of the
Commission thereunder, all as the same shall be in effect from time to time.
1.14 "Shares" means the Exercise Shares, the Conversion
Shares, and the Registrable Securities.
1.15 "Warrant Agreement" means the Warrant Agreement of
even date herewith between the Company and The First National Bank of Boston,
as Warrant Agent, the form of which is attached as Exhibit C to the Unit
Purchase Agreement.
ARTICLE II
REGISTRATION RIGHTS
2.01 Required Registration.
(a) The Company shall prepare and file with the
Commission registration statements under the Securities Act with respect to the
Exercise Shares and the Conversion Shares and shall use its best efforts to
cause such registration statements to become effective promptly after filing.
The registration statement with respect to the Exercise Shares shall be filed
with the Commission within forty-five (45) days after the Closing. The
registration statement with respect to the Conversion Shares shall be filed
with the Commission on or before the earliest of (i) ninety (90) days before
the fifth anniversary of the Closing, (ii) on or before the date of closing of
any transaction identified in Section 5(b)(ii)(A) of the Certificate of
Designation to which the Company or any Subsidiary is a party, or of any
transaction identified in Section 5(b)(ii)(C) or (D) of the Certificate of
Designation, it being understood that the Company will cause such registration
statement to become effective on or before the date of, and
- 3 -
<PAGE> 4
as a condition to, the closing of any such transaction, or (iii) forty-five
(45) days after any other event described in Section 5(b)(ii) of the
Certificate of Designation.
(b) Except as provided in Section 2.01(c) of this
Agreement, the Company shall use its best efforts to maintain the effectiveness
of each registration statement filed pursuant to this Section 2.01 until such
time as all Shares registered pursuant to the registration statement either
have been transferred pursuant to the registration statement or are eligible to
be sold pursuant to Rule 144 under the Securities Act without regard to any
restrictions pursuant to Rule 144(k). Each Holder shall provide written notice
to the Company within fifteen (15) days after it has sold all of its Exercise
Shares or all of its Conversion Shares registered pursuant to this Section
2.01.
(c) The obligations of the Company under this
Section 2.01 are subject to the condition that the Company shall be entitled to
require the Holders to suspend for up to ninety (90) days once in any twelve
month period the sale of Shares pursuant to a registration statement filed
pursuant to this Section if (i) and for so long as the Board of Directors of
the Company determines, in its reasonable judgment, that the sale of Shares
pursuant thereto would materially interfere with any material financing,
acquisition, corporate reorganization or other material transaction by the
Company, (ii) the Company promptly gives the Holders of the Exercise Shares and
the Conversion Shares written notice of such determination, and (iii) all other
similarly situated shareholders shall also be subject to the same suspension.
The Company shall have no obligation to maintain the effectiveness of a
registration statement with respect to Conversion Shares or Exercise Shares
during periods when the Holders are required to suspend the sale of such Shares
as provided in this Section 2.01(c). As soon as practicable after the
expiration of such periods, the Company shall amend its registration statements
as necessary to permit the Holders to sell Shares pursuant to such registration
statements.
2.02 Registrations by Request.
(a) Within ninety (90) days after receiving a
written request therefor from the record Holder or Holders of Registrable
Securities representing at least 50% of a given Preferred Shares Group then
outstanding, the Company shall prepare and file a registration statement under
the Securities Act covering the Registrable Securities which are the subject of
such request and shall use its best efforts to cause such registration
statement to become effective promptly thereafter. The Company shall be
obligated to prepare, file and cause to become effective pursuant to this
Section 2.02(a) not more than one registration statement for each Preferred
Shares Group.
(b) In the event that the Holders of more than
50% of the Registrable Securities comprising the Preferred Shares Group for
which registration has been requested pursuant to Section 2.02(a) hereof
determine for any reason not to proceed with such registration at any time
before the registration statement has been declared effective by the
Commission, and such registration statement, if theretofore filed with the
Commission, is withdrawn with respect
- 4 -
<PAGE> 5
to the securities covered thereby, and such Holders agree to bear their own
expenses incurred in connection therewith and (subject to Section 2.02(d)) to
reimburse the Company for the reasonable out-of-pocket expenses incurred by it
attributable to the registration of such Registrable Securities, then the
Holders of such Registrable Securities shall not be deemed to have exercised
their right to require the Company to register Registrable Securities pursuant
to Section 2.02(a) hereof.
(c) Except as provided in Section 2.02(d) of this
Agreement, the Company shall use its best efforts to maintain the effectiveness
of each registration statement filed pursuant to this Section 2.02 until such
time as all Shares registered pursuant to the registration statement either
have been transferred pursuant to the registration statement or are eligible to
be sold pursuant to Rule 144 under the Securities Act without regard to any
restrictions pursuant to Rule 144(k). Each Holder shall provide written notice
to the Company within fifteen (15) days after it has sold all of its
Registrable Securities registered pursuant to this Section 2.02.
(d) The obligations of the Company under this
Section 2.02 are subject to the condition that the Company shall be entitled to
postpone for up to ninety (90) days once in any twelve month period the filing
of any registration statement otherwise required to be prepared and filed by it
pursuant to this Section 2.02 if, at the time it receives requests for
registration pursuant thereto, and for so long as the Board of Directors of the
Company determines, in its reasonable judgment, that the filing of such
registration statement and the offering of Registrable Securities pursuant
thereto would materially interfere with any material financing, acquisition,
corporate reorganization or other material transaction by the Company, and the
Company promptly gives the Holders requesting such registration written notice
of such determination and all other similarly situated shareholders shall also
be subject to the same suspension. If the Company shall so postpone the filing
of a registration statement, the Holders requesting such registration shall
have the right to withdraw the requests for registration by giving written
notice to the Company within thirty days after receipt of the Company's notice
of postponement and, in the event of such withdrawal, such requests shall not
be counted as being requests for one of the registration statements that the
Company is obligated to prepare, file and cause to become effective pursuant to
Section 2.02(a) hereof, nor shall the Holders be required to reimburse the
Company for out-of-pocket expenses incurred by it attributable to the
registration of such Registrable Securities.
2.03 "Piggy-Back" Registrations.
(a) If, at any time after the Closing, the
Company is requested pursuant to Section 2.02 to register any of the
Registrable Securities under the Securities Act on a registration statement on
Form S-1, Form S-2 or Form S-3 (or an equivalent general registration form then
in effect) for the account of any Holder (a "Registering Shareholder") of
Registrable Securities (an "offering"), then in each such case the Company
shall, not later than 15 days after receipt of notice from the Registering
Shareholder, give written notice thereof to each
- 5 -
<PAGE> 6
other Holder of Registrable Securities. Upon the written direction of any such
Holder of Registrable Securities, given within 10 days of the receipt by such
Holder of any such written notice (which direction shall specify the number of
Registrable Securities intended to be disposed of by such Holder and the
intended method of distribution thereof), the Company shall include in such
registration statement any or all of the Registrable Securities then owned by
such Holder requesting such registration (a "Requesting Shareholder"), to the
extent necessary to permit the sale or other disposition of the shares
constituting such number of Registrable Securities as such Requesting
Shareholder shall have so directed the Company to be so registered. Any
Requesting Shareholder shall have the right to withdraw such direction by
giving written notice to the Company to such effect within ten (10) days after
giving such direction.
(b) In the event that the Company proposes to
register Registrable Securities pursuant to Section 2.03(a), and any managing
underwriter shall advise the Requesting Shareholder or Shareholders and the
Registering Shareholders in writing that the inclusion in the registration
statement of some or all of the Registrable Securities sought to be registered
by the Requesting Shareholders creates a significant risk that the price per
share that such Requesting Shareholder or Shareholders and such Registering
Shareholders will derive from such registration will be adversely affected or
that the number of shares or securities sought to be registered (including any
securities sought to be registered at the instance of the Requesting
Shareholder or Shareholders and those sought to be registered by non-Requesting
Shareholders who are Registering Shareholders) is too large a number to be
reasonably sold, the Company will include in such registration statement such
number of shares or securities as the Company, the Registering Shareholders and
the Requesting Shareholders are so advised can be sold in such offering without
such an effect (the "Maximum Number"), as follows and in the following order of
priority: (i) first, the number of shares or securities sought to be registered
by non-Requesting Shareholders who are Registering Shareholders and (ii)
second, if the number of shares or securities to be registered under clause (i)
is less than the Maximum Number, such shares or securities sought to be
registered by such Requesting Shareholder or Shareholders pro rata in
proportion to the number of shares or securities sought to be registered by all
the Requesting Shareholders, which, when added to the number of Registrable
Securities to be registered by Registering Shareholders who are non-Requesting
Shareholders, equals the Maximum Number.
2.04. Registration for Underwritten Offerings.
(a) At any time after the first date on which
Preferred Shares may be converted into Conversion Shares, the Holders of a
majority of all outstanding Preferred Shares and Conversion Shares may request
the Company to register under the Securities Act for sale in an underwritten
secondary offering all or any portion of the Conversion Shares held by such
Holders or to be issued upon conversion of Preferred Shares held by such
Holders; provided, however, that (i) any such request must be to register no
less than 50% of all Conversion Shares then outstanding or into which Preferred
Shares then outstanding are convertible, and (ii) the Company shall not be
obligated under this Section 2.04 to register Conversion Shares for more
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<PAGE> 7
than one underwritten secondary offering. For purposes of determining whether
Holders of a majority of all outstanding Preferred Shares and Conversion Shares
have requested registration under this Section 2.04(a), each issued and
outstanding Conversion Share shall be counted as one share and each issued and
outstanding Preferred Share shall be counted as the number of Conversion Shares
into which such Preferred Share is convertible on the date of such request.
(b) Promptly following receipt of any request
that complies with the requirements of Section 2.04(a), the Company shall
immediately give notice of such request to all other Holders of Preferred
Shares, Conversion Shares, and Exercise Shares, and shall use its best efforts
to register under the Securities Act, for public sale in a firm commitment
underwritten secondary offering, the number of Conversion Shares specified in
the initial request and in any requests received within 20 days after the date
of such notice from other Holders of Preferred Shares or Conversion Shares, and
the number of Exercise Shares specified in any requests received within such
20-day period from Holders of Exercise Shares; provided, however, that the
Company shall have no obligation under this Section 2.04(b) to register for
inclusion in an underwritten secondary offering any Exercise Shares of a Holder
that is then able to use Rule 144 promulgated under the Securities Act (or any
successor provision) to transfer such Exercise Shares without regard to any
restrictions pursuant to Rule 144(k). The Company shall have the right to
designate the managing underwriter of any such offering subject to the consent
of the Holders making such requests, which consent shall not be unreasonably
withheld.
(c) In the event that the Holders of a majority
of the outstanding Preferred Shares and Conversion Shares as to which
registration of Conversion Shares for sale in an underwritten secondary
offering has been requested pursuant to Section 2.04(a) hereof determine for
any reason not to proceed with such registration and offering at any time
before the registration statement has been declared effective by the
Commission, and such registration statement, if theretofore filed with the
Commission, is withdrawn with respect to the securities covered thereby, and
such Holders agree to bear their own expenses incurred in connection therewith
and (subject to Section 2.04(e)) to reimburse the Company for the reasonable
out-of-pocket expenses incurred by it attributable to the registration and
underwritten secondary offering of such Conversion Shares, then the Holders of
the Preferred Shares and Conversion Shares shall not be deemed to have
exercised their right to require the Company to register Conversion Shares for
sale in an underwritten secondary offering pursuant to Section 2.04(a) hereof.
(d) The Company shall be entitled to include in
any registration statement referred to in this Section 2.04, for sale in the
underwritten offering, shares of Common Stock to be sold by the Company for its
own account, except as and to the extent that, in the opinion of the managing
underwriter, such inclusion would adversely affect the marketing of the shares
to be sold. Except as provided in this Section 2.04(d) or in Section 2.04(e),
the Company will not file with the Commission any other registration statement
with respect to its Common Stock, whether for its own account or that of other
stockholders, from the date of
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<PAGE> 8
receipt of a notice from the requesting Holders pursuant to Section 2.04(a)
until the completion of the period of distribution of the Shares contemplated
thereby.
(e) The obligations of the Company under this
Section 2.04 are subject to the condition that the Company shall be entitled to
postpone for up to 90 days the filing of any registration statement otherwise
required to be prepared and filed by it pursuant to this Section 2.04 if (i) at
the time it receives requests for registration pursuant thereto, and for so
long as the Board of Directors of the Company determines, in its reasonable
judgment, that the filing of such registration statement and the offering of
Conversion Shares or Exercise Shares pursuant thereto would materially
interfere with any material financing, acquisition, corporate reorganization or
other material transaction by the Company, (ii) the Company promptly gives the
Holders requesting such registration written notice of such determination, and
(iii) all other similarly situated shareholders shall also be subject to the
same suspension. If the Company shall so postpone the filing of a registration
statement, the Holders requesting such registration shall have the right to
withdraw the requests for registration by giving written notice to the Company
within thirty days after receipt of the Company's notice of postponement and,
in the event of such withdrawal, such requests shall not be counted as being
requests for the registration statement that the Company is obligated to
prepare, file and cause to become effective pursuant to this Section 2.04, nor
shall the Holders be required to reimburse the Company for out-of-pocket
expenses incurred by it attributable to the registration of such Conversion
Shares or Exercise Shares.
ARTICLE III
REGISTRATION PROCEDURES
3.01 Company Obligations. Following the Closing, the
Company will:
(a) furnish to the Purchasers, prior to the
filing of a registration statement pertaining to any Shares (each a
"Registration Statement") or any prospectus, amendment or supplement thereto,
copies of each such Registration Statement as proposed to be filed, which
documents will be subject to the reasonable review and comments of the Holders
(and their respective attorneys), and the Company will not file any such
Registration Statement, any prospectus or any amendment or supplement thereto
(or any such documents incorporated by reference) to which the Purchasers shall
reasonably object in writing; and thereafter furnish to the Holders such number
of copies of such Registration Statement, each amendment and supplement thereto
(including any exhibits thereto), the prospectus included in such Registration
Statement (including each preliminary prospectus) and such other documents as
any Holder may reasonably request in writing in order to facilitate the
disposition of the Shares registered pursuant to such Registration Statement;
provided, however, that the obligation of the Company to deliver copies of
prospectuses or preliminary prospectuses to any Holder shall be subject to the
receipt by the Company of reasonable assurances from such Holder that such
Holder will comply with the
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<PAGE> 9
applicable provisions of the Securities Act and of such other securities or
blue sky laws as may be applicable in connection with any use of such
prospectuses or preliminary prospectuses;
(b) use its best efforts to register or qualify
the Shares registered pursuant to such Registration Statement under such other
securities or blue sky laws of such jurisdictions as a Holder may reasonably
request and do any and all other acts and things which may be reasonably
necessary to enable the Holder to consummate the disposition in such
jurisdictions of such Shares; provided, however, that the Company will not be
required to (i) qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for this subsection, (ii)
subject itself to taxation in any such jurisdiction, or (iii) consent to
general service of process in any such jurisdiction;
(c) apply, prior to or concurrently with the
filing of the Registration Statements, to the Nasdaq National Market System
(or, if the Company is not listed on the Nasdaq National Market System, any
other exchange on which the Company's Common Stock is then listed) for the
listing of the Conversion Shares or the Exercise Shares and use its best effort
to obtain the listing of such stock;
(d) notify the Holders in writing at any time
when a prospectus relating to the Shares registered pursuant to such
Registration Statement is required to be delivered under the Securities Act, of
the occurrence of an event requiring the preparation of a supplement or
amendment to such prospectus or filing of a report incorporated in the
prospectus by reference so that, as thereafter delivered to the purchasers of
such Shares, such prospectus (including documents incorporated therein by
reference) will not contain an untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading and promptly prepare, file with the
Commission and make available to the Holders any such supplement, amendment or
report incorporated in the prospectus by reference, including, without
limitation, after any period referred to in Section 2.01(c) or 2.02(d);
(e) make available for inspection by the Holders
of Shares to be registered pursuant to a Registration Statement and any
attorney, accountant or other professional retained thereby (collectively, the
"Inspectors"), all financial and other records, pertinent corporate documents
and properties of the Company (collectively, the "Records") as shall be
reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers, directors and employees to
supply all information reasonably requested by any such Inspectors in
connection with such Registration Statement. Records that the Company
determines, in good faith, to be confidential and which it notifies the
Inspectors in writing are confidential shall not be disclosed by the Inspectors
unless (i) in the judgment of counsel to the Company the disclosure of such
Records is necessary to avoid or correct a misstatement or omission in such
Registration Statement, (ii) the release of such Records is ordered pursuant to
a subpoena or other order from a court of competent jurisdiction, or (iii) the
information in such Records is generally available to the public. As a
condition of receiving access to such
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<PAGE> 10
confidential information described in clause (i) or (ii) of the preceding
sentence, the Holders of such Shares shall agree that such confidential
information obtained by them as a result of such inspections shall be deemed
confidential and shall not be used by them as the basis for any market
transactions in the securities of the Company unless and until such information
is made generally available to the public, it being understood that nothing in
this sentence shall reduce the Company's obligations hereunder, including under
Section 3.01(d). Each Holder further shall agree that it will, upon learning
that disclosure of such Records from such Holder is sought in a court of
competent jurisdiction, give notice to the Company and allow the Company, at
its expense, to undertake appropriate action to prevent disclosure of the
Records deemed confidential;
(f) obtain consents from its independent public
accountants in customary form as required to obtain and maintain effectiveness
of the registration statement and, in connection with its obligations under
Section 2.04, obtain a "cold comfort" letter from such accountants in customary
form;
(g) obtain an opinion or opinions from its
counsel in customary form and reasonably satisfactory to the Holders and their
respective legal counsel and, in an underwritten offering, to the underwriters
and their legal counsel;
(h) make generally available to the Holders
earnings statements, which need not be audited, satisfying the provisions of
Section 11(a) of the Securities Act no later than forty-five days after the end
of the twelve-month period beginning with the first month of the first fiscal
quarter commencing after the effective date of a Registration Statement, which
earnings statements shall cover said twelve-month period;
(i) promptly notify each Holder of the issuance
or threatened issuance of any stop order or other order suspending the
effectiveness of a Registration Statement or preventing or suspending the use
of any preliminary prospectus, prospectus or prospectus supplement, use
reasonable efforts to prevent the issuance of any such threatened stop order or
other order, and, if any such order is issued, use its best efforts to obtain
the lifting or withdrawal of such order at the earliest possible moment and
promptly notify each Holder of any such lifting or withdrawal;
(j) if requested by any Holder, the Company will
promptly incorporate in a prospectus supplement or post-effective amendment to
a Registration Statement such information concerning such Holder and such
Holder's intended method of distribution as such Holder requests to be included
therein (and which is not violative of an applicable law, rule or regulation,
in the reasonable judgment of the Company, after consultation with its outside
legal counsel), including, without limitation, with respect to any change in
the intended method of distribution, the amount or kind of Shares being offered
by such Holder, the offering price for such Shares or any other terms of the
offering or distribution of the Shares, and the Company will make all required
filings of such prospectus supplement or post-effective amendment as
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<PAGE> 11
soon as possible after being notified of the matters to be incorporated in such
prospectus supplement or post-effective amendment;
(k) as promptly as practicable after the filing
with the SEC of any document which is incorporated by reference into a
registration statement, notify each Holder of such filing and deliver a copy of
such document to each Holder;
(l) cooperate with the Holders to facilitate the
timely preparation and delivery of certificates, not bearing any restrictive
legends, unless otherwise required by the Holders, representing the Shares to
be sold under the Registration Statement, and enable such Shares to be in such
denominations and registered in such names as such Holders may request;
(m) cooperate with the Holders, their respective
legal counsel and any other interested party (including any interested
broker-dealer) in making any filings or submissions required to be made, and
the furnishing of all appropriate information in connection therewith, with the
NASD;
(n) cause its subsidiaries to take all action
necessary to effect the registration of the Shares contemplated hereby,
including preparing and filing any required financial or other information;
(o) make available to the transfer agent for each
class or series of Shares a supply of certificates or other instruments
evidencing or constituting such Shares which shall be in a form complying with
the requirements of such transfer agent, promptly after a registration thereof;
and
(p) use its best efforts to keep each such
registration or qualification effective, including through new filings,
amendments or renewals, during the period the Registration Statement is
required to be kept effective and do any and all other acts or things
reasonably necessary or advisable in connection with such registration or
qualifications in all jurisdictions in which qualification or registration is
necessary.
3.02 Information from Holders. The Company may require
the Holders to promptly furnish in writing to the Company such information
regarding the distribution of the Shares as it may from time to time reasonably
request and such other information as may be legally required in connection
with such registration.
3.03 Suspension of Sales. The Holders agree that, upon
receipt of any notice from the Company of the happening of any event of the
kind described in subsection 3.01(d) hereof, they will immediately discontinue
disposition of Shares pursuant to a Registration Statement until they receive
copies of the supplemented or amended prospectus contemplated by subsection
3.01(d) hereof, and, if so directed by the Company, the Holders will deliver to
the Company all copies, other than permanent file copies then in their
possession, of the most recent
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<PAGE> 12
prospectus (including any prospectus supplement) covering such Shares at the
time of receipt of such notice or destroy all such copies.
ARTICLE IV
REGISTRATION EXPENSES
4.01 Except as provided in Section 4.02, all fees and
expenses incident to the Company's performance of or compliance with this
Agreement shall be borne by the Company, including, without limitation, the
following fees and expenses: (a) all SEC, National Association of Securities
Dealers, Inc., stock exchange or other registration and filing fees and listing
fees; (b) the fees and expenses of the Company's compliance with securities or
blue sky laws (including reasonable fees and disbursements of counsel in
connection with blue sky qualifications of the Shares); (c) printing expenses;
(d) the fees and disbursements of counsel for the Company and of one counsel
for the applicable Holders for each registration, and the fees and expenses for
independent certified public accountants (including, without limitation, the
expenses of any annual audit, special audit, if necessary, and "cold comfort"
letters required by or incident to the performance of any agreement with the
underwriter of an underwritten offering pursuant to Section 2.04), underwriters
and other persons retained by the Company in connection with such registration;
(e) fees of transfer agents and registrars; and (f) messenger and delivery
expenses. In addition, the Company shall pay its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit or
quarterly review, the expense of any liability insurance obtained by the
Company, and the expenses and fees for listing or authorizing for quotation the
securities to be registered on each securities exchange on which any shares of
the Common Stock are then listed or quoted.
4.02 The Holders shall pay all underwriting discounts and
commissions and all of their internal expenses incurred in connection with the
offering (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties but excluding fees
and expenses of their counsel that are payable by the Company under Section
4.01).
ARTICLE V
INDEMNIFICATION; CONTRIBUTION
5.01 Indemnification by the Company. The Company agrees
to indemnify and hold harmless each Holder, each of such Holder's officers,
directors, partners and members, and each of such Holder's legal counsel and
independent accountants, if any, and each person controlling any such persons
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, with respect to which registration, qualification or compliance
has been
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<PAGE> 13
effected pursuant to this Agreement, and each underwriter, if any, and each
person who controls any underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages, liabilities and expenses (including reasonable costs
of investigation, any legal and any other expenses reasonably incurred in
connection with investigating, preparing or defending any such claim, loss,
damage, liability or action, and any of the foregoing incurred in settlement of
any litigation, commenced or threatened) arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in a
Registration Statement or prospectus contained therein or in any amendment or
supplement thereto or in any preliminary prospectus, or arising out of or based
upon any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, or any violation by the Company of any rule or regulation
promulgated under the Securities Act or any state securities laws applicable to
the Company and relating to action or inaction by the Company in connection
with any registration, qualification or compliance required hereunder or
arising out of or based upon the Company's breach of any representation,
warranty, covenant or agreement contained in this Agreement; provided, however,
that the Company shall not be liable in any such case to the extent any of such
losses, claims, damages, liabilities or expenses arise out of, or are based
upon, any such untrue statement or omission or allegation thereof based upon
information furnished in writing to the Company by such Holder expressly for
use therein.
5.02 Indemnification by Holders. Each Purchaser agrees,
and each other Holder that is not a signatory to this Agreement agrees by
exercising any of its rights hereunder, severally to indemnify and hold
harmless the Company, its directors and officers and each person, if any, who
controls the Company within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act and each underwriter, if any, and each
person who controls any underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Company set forth above in (a), but only with
respect to information furnished in writing by such Holder, or on its behalf
expressly for use in the Registration Statement or prospectus relating to the
Shares, any amendment or supplement thereto or any preliminary prospectus,
under the heading "Selling Shareholders" and "Distribution" and provided that
the obligation of each Holder to indemnify will be several and not joint. In
case any action or proceeding shall be brought against the Company or its
directors or officers, any such controlling person, or any such underwriter or
controlling person of an underwriter in respect of which indemnity may be
sought against the Holder, the Holder shall have the rights and duties given to
the Company, and the Company or its directors or officers or such controlling
person or any such underwriter or controlling person of an underwriter shall
have the rights and duties given to the Holder, by the preceding Section 5.01
hereof. Each Purchaser's indemnity obligations under this Section 5.02 shall
be limited to the net sales proceeds actually received in connection with the
applicable offering.
5.03 Conduct of Indemnification Proceedings. If any
action or proceeding (including any governmental investigation) shall be
brought or asserted against any person entitled to indemnification under
Section 5.01 or 5.02 above (an "Indemnified Party") in respect
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<PAGE> 14
of which indemnity may be sought from any party who has agreed to provide such
indemnification (an "Indemnifying Party"), the Indemnifying Party shall assume
the defense thereof, including the employment of counsel reasonably
satisfactory to such Indemnified Party, and shall assume the payment of all
expenses. Such Indemnified Party shall have the right to employ separate
counsel in any such action and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such Indemnified
Party unless (a) the Indemnifying Party has agreed to pay such fees and
expenses, or (b) such Indemnified Party shall have been advised by counsel that
there is an actual or potential conflict of interest on the part of counsel
employed by the Indemnifying Party to represent such Indemnified Party (in
which case, if such Indemnified Party notifies the Indemnifying Party in
writing that Indemnified Party elects to employ separate counsel at the expense
of the Indemnifying Party, the Indemnifying Party shall not have the right to
assume the defense of such action or proceeding on behalf of such Indemnified
Party; it being understood, however, that the Indemnifying Party shall not, in
connection with any one cause of action or proceeding or separate but
substantially similar or related actions or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys
(together with appropriate local counsel) at any time for all such Indemnified
Parties, which firm shall be designated in writing by such Indemnified Parties
unless there shall be conflicts of interest among such Indemnified Parties, in
which case the Indemnifying Party shall be liable for the fees and expenses of
additional counsel). The Indemnifying Party shall not be liable for any
settlement of any such action or proceeding or any threatened action or
proceeding effected without its written consent, which consent shall not be
unreasonably withheld, but if settled with its written consent or if there be a
final judgment of the plaintiff in any such action or proceedings, the
Indemnifying Party shall indemnify and hold harmless such Indemnified Parties
from and against any loss or liability (to the extent stated above) by reason
of such settlement or judgment. The failure of any Indemnified Party to give
prompt notice of a claim for indemnification hereunder shall not limit the
Indemnifying Party's obligations to indemnify under this Agreement, except to
the extent such failure is prejudicial to the ability of the Indemnifying Party
to defend the action. No Indemnifying Party, in the defense of any such claim
or litigation, shall, except with the consent of each Indemnified Party,
consent to entry of any judgment or enter into any settlement unless (x) there
is no finding or admission of any violation of any rights of any Person and no
effect on any other claims that be made against any Indemnified Party, (y) the
sole relief provided is monetary damages that are paid in full by the
Indemnifying Party and (z) such judgment or settlement includes as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect of such claim or
litigation.
5.04 Contribution. If the indemnification provided for in
this Article V is unavailable to the Indemnified Parties in respect of any
losses, claims, damages, liabilities or judgment referred to herein, then such
Indemnifying Party, in lieu of Indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such losses, claims, damages, liabilities and judgments in the following
manner: as between the Company on the one hand and any Indemnified Party
entitled to indemnification
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<PAGE> 15
under Section 5.01 on the other, in such proportion as is appropriate to
reflect the relative fault of the Company on the one hand and any Indemnified
Party entitled to indemnification under Section 5.02 on the other in connection
with the statements or omissions which resulted in such losses, claims,
damages, liabilities or judgments, as well as any other relevant equitable
considerations. The relative fault of the Company on the one hand and of any
Indemnified Party entitled to indemnification under Section 5.02 on the other
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by such party, and the
party's relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. No person guilty of fraudulent
misrepresentation (within the means of subsection 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
5.05 Survival. The indemnity and contribution agreements
contained in this Article V shall remain operative and in full force and effect
with respect to any sales of Shares made pursuant to a registration statement
filed pursuant to this Agreement regardless of (a) any termination of this
Agreement, (b) any investigation made by or on behalf of any Indemnified Party
or by or on behalf of the Company, and (c) the consummation of the sale or
successive resale of the Shares.
ARTICLE VI
MISCELLANEOUS
6.01 Rules 144 and 144A. The Company covenants that
following the registration of Shares it will file any reports required to be
filed by it under the Securities Act and the Exchange Act so as to enable
Holders holding registered Shares to sell such Shares without registration
under the Securities Act within the limitation of the exemptions provided by
(a) Rules 144 and 144A under the Securities Act, as each such Rule may be
amended from time to time, or (b) any similar rule or rules hereafter adopted
by the SEC. Upon the request of any such Holder, the Company will forthwith
deliver to such Holder a written statement as to whether it has complied with
such requirements.
6.02 Amendments and Waivers. The provision of this
Agreement may not be amended, modified or supplemented, and waivers or consents
to departures from the provisions hereof may not be given other than as
mutually agreed upon in writing by the Company and the Holders of each of (i)
75% of the Registrable Securities, (ii) 75% of the Conversion Shares, and (iii)
more than 50% of the Exercise Shares.
6.03 Notices. All notices and other communications
provided for or permitted hereunder shall be made in writing by hand delivery,
regular mail, registered first-class mail, confirmed facsimile or recognized
express courier service by next business day delivery;
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<PAGE> 16
(i) if to the Company:
Metrocall, Inc.
6677 Richmond Highway
Alexandria, Virginia 22306
Attention: Chief Financial Officer
Fax Number: (703) 768-9625
with a copy to:
Wilmer, Cutler & Pickering
2445 M Street, N.W.
Washington, D.C. 20037-1420
Attn: Thomas W. White, Esq.
Fax Number: (202) 663-6363
Notices shall be deemed given on the day on which delivered by hand or
facsimile, if delivered by 5:00 p.m. Eastern time; on the fifth business day
after mailing if delivered by mail; or the business day after delivery to an
overnight air courier if next-day delivery is specified.
(ii) if to any of the Purchasers, to the
addresses set forth on the Schedule of Purchasers attached as Exhibit A hereto.
6.04 Successors and Assigns. No Holder may assign any
rights or benefits under this Agreement except as provided in this Section
6.04. A Holder may assign to any transferee without the Company's consent such
Holder's rights and benefits with respect to Preferred Shares, Warrants,
Exercise Shares or Conversion Shares. A transferee that executes and delivers
to the Company an agreement pursuant to which it becomes bound by the terms of
this Agreement shall retain the rights and benefits of the transferor under
this Agreement; provided, however, that a transferee of Preferred Shares that
is not an affiliate of the Purchaser of such Preferred Shares shall not be
entitled to exercise the rights of a Holder with respect to such Preferred
Shares under Section 2.02 of this Agreement. The Company shall not assign any
rights, benefits or obligations under this Agreement without prior written
consent of the Holders of a majority of each of (i) the Registrable Securities,
(ii) the Conversion Shares and (iii) the Exercise Shares; provided, however,
that the Company shall assign its rights, benefits and obligations to any
person the Company is merged with or consolidated into or to any person to whom
the Company sells substantially all of its assets. This Agreement shall inure
to the benefit of and be binding upon the permitted successors and assigns of
the Company, the Purchasers and the other Holders.
6.05 Counterparts. This Agreement may be executed in a
number of identical counterparts and it shall not be necessary for the Company
and the Purchasers to execute each of
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such counterparts, but when each has executed and delivered one or more of such
counterparts, the several parts, when taken together, shall be deemed to
constitute one and the same instrument, enforceable against each in accordance
with its terms. In making proof of this Agreement, it shall not be necessary
to produce or account for more than one such counterpart executed by the party
against whom enforcement of this Agreement is sought.
6.06 Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
6.07 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OR CHOICE OF LAW.
6.08 Severability. If any provision of this Agreement is
held to be illegal, invalid or unenforceable under present or further laws
effective during the term of this Agreement, such provision shall be fully
severable; this Agreement shall be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part of this
Agreement; and the remaining provisions of this Agreement shall remain in full
force and effect and shall not be affected by the illegal, invalid or
unenforceable provision or by its severance from this Agreement.
6.09 Entire Agreement. This Agreement and the Unit
Purchase Agreement (including exhibits thereto) are intended by the Company and
the Purchasers as final expression of their agreement and are intended to be a
complete and exclusive statement of their agreement and understanding in
respect of the subject matter contained herein. This Agreement supersedes all
prior agreements and understandings between the Company and the Purchasers with
respect to such subject matter.
6.10 Third Party Beneficiaries. Other than Indemnified
Parties not a party hereto, this Agreement is intended for the benefit of the
Company, the Purchasers and their respective successors and permitted assigns
and is not for the benefit of, nor may any provision hereof be enforced by, any
other person or entity.
6.11 Obligations Several; Independent Nature of Each
Holder's Rights. Each obligation of any Holder is several and no such Holder
shall be responsible for the obligations of any other Holder. Nothing
contained herein, and no action taken by any such Holder pursuant hereto, shall
be deemed to constitute such Holders as a partnership, an association, a joint
venture or any other kind of entity. Each Holder shall be entitled to protect
and enforce its rights arising out of this Agreement without notice to or the
consent of any other person and it shall not be necessary for any other such
Holder to be joined as an additional party in any proceeding for such purpose.
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<PAGE> 18
6.12 Nonwaiver. No course of dealing or any delay or
failure to exercise any right, power or remedy hereunder on the part of the
Holder shall operate as a waiver of or otherwise prejudice such Holder's
rights, powers or remedies.
6.13 Remedies. The Company acknowledges that the remedies
at law of the Holder in the event of any default or threatened default by the
Company in the performance of or compliance with any of the terms of this
Agreement are not and will not be adequate and that, to the fullest extent
permitted by law, such terms may be specifically enforced by a decree for the
specific performance of any agreement contained herein or by an injunction
against a violation of any of the terms hereof or otherwise without requiring
such Holder to post any bond or other security, unless otherwise required by
applicable law (which cannot be waived by the Company).
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<PAGE> 19
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
METROCALL, INC.
By:/s/ VINCENT D. KELLY
---------------------------------
Vincent D. Kelly
Chief Financial Officer
PURCHASERS
JOHN HANCOCK MUTUAL LIFE INSURANCE
COMPANY
By:/s/ DANIEL C. BUDDE
---------------------------------
Name: Daniel C. Budde
Title: Investment Officer
SUNAMERICA, INC.
By:/s/ PETER McMILLAN
---------------------------------
Name: Peter McMillan
Title: Authorized Agent
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<PAGE> 20
UBS CAPITAL LLC
By:/s/ MICHAEL GREEN
---------------------------------
Name: Michael Green
Title: Managing Director
By:/s/ JUSTIN S. MACCARONE
---------------------------------
Name: Justin S. Maccarone
Title: Managing Director
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<PAGE> 21
EXHIBIT A
PURCHASERS
SUNAMERICA INVESTMENTS, INC.:
SunAmerica Investments, Inc.
One SunAmerica Center
Century City
Los Angeles, CA 90067-6022
Attention: Peter McMillan
Executive Vice President
and Chief Investment Officer
Facsimile: 310-722-6150
with a copy to:
Thomas W. Baxter, Esq.
O'Melveny & Myers
400 South Hope Street
Los Angeles, CA 90071-2899
Facsimile: 213-699-6407
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY:
John Hancock Mutual Life Insurance Company
Bond and Corporate Finance Group (T-57)
200 Clarendon Street
Boston, MA 02117
Attention: Daniel C. Budde
Investment Officer
Facsimile: 617-572-1606
with a copy to:
John Hancock Mutual Life Insurance Company
200 Clarendon Street
50th Floor
Boston, MA 02117
Attention: John Tisdale, Esq.
Counsel
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<PAGE> 22
Facsimile: 617-572-9268
and a copy to:
Thomas W. Baxter, Esq.
O'Melveny & Myers
400 South Hope Street
Los Angeles, CA 90071-2899
Facsimile: 213-699-6407
UBS CAPITAL LLC:
UBS Capital LLC
299 Park Avenue
New York, NY 10171
Attention: Michael Greene and James A. Breckenridge
Facsimile:
with a copy to:
Nancy Fuchs, Esq.
Kaye, Scholer, Fierman, Hays & Handler, LLP
425 Park Avenue
New York, NY 10022
Facsimile: 212-836-7246 or -7150
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