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FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported): August 30, 1996
METROCALL, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-21924 54-1215634
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
6677 Richmond Highway, Alexandria, Virginia 22306
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(Address of principal executive offices)
Registrant's telephone number, including area code: (703) 660-6677
Not Applicable
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(Former name or former address, if changed since last report)
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ITEM 2. ACQUISITIONS OR DISPOSITIONS OF ASSETS
Satellite Paging and Message Network
On August 30, 1996, Metrocall, Inc. (the "Company") completed a
transaction pursuant to which the Company acquired substantially all of the
assets of Satellite Paging ("Satellite") and Message Network for total
consideration of approximately $28.0 million, consisting of $17.0 million in
cash, and the issuance of approximately $11.0 million of the Company's common
stock. Based on the Company's stock price at the time of closing, the total
number of shares of the Company's common stock to be issued in this transaction
was approximately 1.6 million. The Company has agreed to register the shares
issued to the sellers. Upon effectiveness of such registration, the final
number of shares will be adjusted if necessary determined based upon the
average of the closing prices for the Company's stock for the twenty-day period
prior to registration effectiveness. The cash portion of the purchase price
was funded primarily by borrowings under the Company's existing credit
facility. The acquisition of Satellite and Message Network adds approximately
100,000 subscribers to Metrocall's customer base. These customers and the
related system infrastructure are located throughout New York, New Jersey and
southern Florida. The transaction will be accounted for as a purchase for
financial reporting purposes.
Satellite and Message Network operate multi-regional paging and
wireless messaging networks in the United States, primarily in the New York/New
Jersey metropolitan area and southern Florida, respectively. The primary
assets of Satellite and Message Network include transmission equipment,
subscriber paging units and licenses issued by the Federal Communications
Commission.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION, AND EXHIBITS
Financial Statements, Pro Forma Financial Information
Required financial statements and pro forma financial information have
been omitted here. All financial statements and pro forma financial
information required will be filed in an amendment to this Current Report on
Form 8-K within 75 days of the closing of the transaction discussed in Item 2
above.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION, AND EXHIBITS
(CONTINUED)
Exhibits
2.1 Asset Purchase Agreement by and among O.R. Estman, Inc. d/b/a Satellite
Paging, Dana Paging, Inc. d/b/a Message Network, Bertram M. Wachtel,
Edward R. Davalos, Kevan D. Bloomgren and Metrocall, Inc., dated
February 28, 1996. (a)
2.2 Amendment to the Asset Purchase Agreement by and among O.R. Estman, Inc.
d/b/a Satellite Paging, Dana Paging, Inc. d/b/a Message Network, Bertram
M. Wachtel, Edward R. Davalos, Kevan D. Bloomgren and Metrocall, Inc.,
dated August 30, 1996. *
* Exhibit filed herewith.
(a) Incorporated by reference to Metrocall's Quarterly Report on Form 10-Q/A
for the quarter ended March 31, 1996, filed with the Securities and
Exchange Commission on July 15, 1996.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned duly authorized.
METROCALL, INC.
/s/ Vincent D. Kelly
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Vincent D. Kelly
Chief Financial Officer, Treasurer
and Vice President
Date: September 13, 1996
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Exhibit Description Page
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<S> <C>
2.1 Asset Purchase Agreement by and among O.R. Estman, Inc.
d/b/a Satellite Paging, Dana Paging, Inc. d/b/a Message
Network, Bertram M. Wachtel, Edward R. Davalos, Kevan D.
Bloomgren and Metrocall, Inc., dated February 28, 1996. (a)
2.2 Amendment to the Asset Purchase Agreement by and among
O.R. Estman, Inc. d/b/a Satellite Paging, Dana Paging, Inc.
d/b/a Message Network, Bertram M. Wachtel, Edward R. Davalos,
Kevan D. Bloomgren and Metrocall, Inc., dated August 30, 1996. *
</TABLE>
* Exhibit filed herewith.
(a) Incorporated by reference to Metrocall's Quarterly Report on Form 10-Q/A
for the quarter ended March 31, 1996, filed with the Securities and
Exchange Commission on July 15, 1996.
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EXHIBIT 2.2
AMENDMENT TO THE ASSET PURCHASE AGREEMENT
This AMENDMENT TO THE ASSET PURCHASE AGREEMENT (the "Amendment") is
made and entered into effective as of the 30th day of August, 1996 by and among
O.R. Estman, Inc., a New Jersey corporation D/B/A Satellite Paging
("Satellite"), Dana Paging, Inc., a Florida corporation D/B/A Message Network
("Message Network," and collectively with Satellite, the "Seller"), Bertram M.
Wachtel, Edward R. Davalos and Kevan D. Bloomgren (collectively, the
"Stockholders" and individually, a "Stockholder"), and Metrocall, Inc., a
Delaware corporation (the "Buyer").
R E C I T A L S
WHEREAS, the Seller, the Stockholders and the Buyer entered into that
Asset Purchase Agreement dated as of February 28, 1996 (the "Asset Purchase
Agreement");
WHEREAS, the parties to the Asset Purchase Agreement desire to amend
the Asset Purchase Agreement; and
WHEREAS, in order to amend the Asset Purchase Agreement, the parties
desire to enter into this Amendment.
A G R E E M E N T
NOW, THEREFORE, for and in consideration of the premises and other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
1. Unless otherwise defined in this Amendment, capitalized terms
used in this Amendment shall have the meanings ascribed to them in the Asset
Purchase Agreement.
2. The Closing shall occur on August 30, 1996.
3. If the Closing occurs on August 30, 1996 (unless extended by
agreement of the parties), then Section 4.1 of the Asset Purchase Agreement
shall be and is hereby amended in its entirety as follows:
"Subject to and upon the terms and conditions set forth herein, the
Buyer shall pay to the Seller aggregate consideration in the amount of Twenty
Six Million Five Hundred Thousand Dollars ($26,500,000), plus the Preliminary
Working Capital Adjustment of $508,843, payable as follows:
(a) The parties acknowledge that the Buyer has delivered
the sum of One Million Dollars ($1,000,000) (together with all interest and
other income accruing thereon, the "First Deposit") in escrow as provided by
the Escrow Agreement (defined in Section 4.5).
(b) At the Closing, the First Deposit shall be returned
to the Buyer and the Buyer shall deliver evidence that the Buyer has
irrevocably directed the Buyer's transfer agent to issue Common Stock of the
Buyer, par value $.01 (the "Common Stock"), having a value equal to
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One Million Five Hundred Thousand Dollars ($1,500,000), valued in accordance
with Section 4.1(f) (the "Second Deposit"), to and in the name of the escrow
agent as provided in the Escrow Agreement, as amended.
(c) At the Closing, the Buyer shall pay the portion of
the Purchase Price payable in cash (the "Cash Purchase Price"), i.e., Seventeen
Million Dollars ($17,000,000), by wire transfer of immediately available funds.
(d) At the Closing, the Buyer shall deliver evidence that
the Buyer has irrevocably directed the Buyer's transfer agent to issue shares
of Common Stock to pay the remainder of the Purchase Price (the "Stock Purchase
Price"), i.e., Eight Million Five Hundred Eight Thousand Eight Hundred
Forty-Three Dollars ($8,508,843), in shares of the Common Stock, valued
pursuant to with Section 4.1(f).
(e) The Purchase Price shall be subject to such further
adjustments as are specified in Sections 4.3 and 4.4, which adjustments shall
be payable in Common Stock of the Buyer.
(f) The total number of shares issuable at the Closing in
respect of the Second Deposit and the Stock Purchase Price shall be determined
based upon the closing stock price of the Buyer's stock on the NASDAQ-NMS on
August 29, 1996. The parties acknowledge that the number of shares of Common
Stock issued at Closing in respect of the Second Deposit and the Stock Purchase
Price is an estimate and shall be subject to adjustment as required in
accordance with the Escrow Agreement and with Section 4.7 hereof.
(g) All shares of Common Stock to be issued by the Buyer
hereunder shall be duly authorized and issued, fully paid and nonassessable,
and free and clear of any Liens."
4. Section 4.4(b)(i) of the Asset Purchase Agreement shall be and
is hereby amended to read as follows:
"(i) The Purchase Price shall be reduced by an amount equal to the
greatest of the following:
(A) The product of (1) the shortfall (if any) between the
actual number of the Seller's Subscribers on the Closing Date and 99,111,
multiplied by (2) $254;
(B) The product of (1) the shortfall (if any) between the
Seller's Pro Forma Net Revenue (annualized) and $9,428,554.48, multiplied by
(2) 2.67; or
(C) The product of (1) the shortfall (if any) between the
Seller's Pro Forma Defined Operating Cash Flow (annualized) and $3,146,780,
multiplied by (2) 8."
5. The Asset Purchase Agreement shall be and is hereby amended to
add the following Section 4.7:
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"4.7 STOCK PURCHASE PRICE.
The Buyer shall take all steps reasonably required so that, upon
registration with the appropriate federal and state regulatory authorities, as
set forth herein, the Registrable Securities (as hereinafter defined) will be
freely tradeable by the Seller, the Stockholders or the Escrow Agent under the
Escrow Agreement, as the case may be, free of any further registration or any
other restrictions as to holding periods or volume of trades (except such
restrictions as are set forth hereafter), including the following:
(a) Registration of Common Stock. The Buyer shall
prepare and file with the Securities and Exchange Commission (the "SEC") a
registration statement on Form S-3 (the "Registration Statement") with respect
to that number of shares equal to the Stock Purchase Price and the Second
Deposit (the "Registrable Securities") within 30 days of the Closing and use
its reasonable best efforts to cause the Registration Statement to become
effective as soon as possible. In addition the Buyer shall:
(i) prepare and file with the SEC such
amendments and supplements to the Registration Statement and the prospectus
used in connection with the Registration Statement, and use its reasonable best
efforts to cause each such amendment and supplement to become effective, as may
be necessary to comply with the provisions of the Securities Act of 1933, as
amended (the "1933 Act");
(ii) use its reasonable best efforts to
register or qualify the securities covered by the Registration Statement under
such other securities or blue sky laws of such states and jurisdictions as
shall be reasonably requested by the Seller, except that the Buyer shall not be
required in connection therewith or as a condition thereto to qualify to do
business or file a general consent to service of process in any such state or
jurisdiction;
(iii) apply for qualification and use its
best efforts to qualify the Registrable Securities being registered for
inclusion and trading on the automated quotation system of the National
Association of Securities Dealers, Inc.
The Buyer's obligation to maintain the effectiveness
of the Registration Statement shall terminate at such time as all remaining
Registrable Securities could immediately be sold pursuant to Rule 144 and Rule
145(d) under the 1933 Act without regard to the volume limitations.
(b) Conditions Precedent to Registration. It shall be a
condition precedent to the obligations of the Buyer to take any action pursuant
to this Section 4.7 in respect of the Registrable Securities that the Seller
and the Stockholders shall furnish to the Buyer such information regarding the
Seller and the Stockholders, the Registrable Securities held by them, and the
intended method of disposition of such Registrable Securities, if any, as shall
be required by law to effect the registration of such Registrable Securities.
(c) Adjustment to Shares of Common Stock Issued. The
total number of shares of Common Stock issuable in respect of the Stock
Purchase Price will be equal to Eight
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Million Five Hundred Eight Thousand Eight Hundred Forty-Three Dollars
($8,508,843) divided by the Issue Price (defined herein). The "Issue Price" is
equal to the average of the midpoints of the closing bid and ask prices of
Common Stock for the five trading day period ending on the second business day
prior to the effective date of the Registration Statement. The parties agree
to take such further actions as may be necessary or desirable to effect the
foregoing adjustment to the number of shares of Common Stock to be issued
hereunder.
(d) Right of Refusal on Dispositions. For a period of
two (2) years from Closing, no Seller or Stockholder shall sell, assign,
transfer, pledge or otherwise dispose of any shares of Common Stock owned by
such Seller or Stockholder unless such Seller or Stockholder shall have (i)
submitted a written offer (the "Offer") to the Buyer specifying (x) the number
of shares that such Seller or Stockholder proposes to sell, assign, transfer or
otherwise dispose of and the related terms of disposition and (y) the desired
date of such proposed disposition (the "Disposition Date"), no later than 5:00
p.m., eastern time, on the business day immediately preceding the Disposition
Date, and (ii) complied with all other applicable provisions of this Section
4.7(d). The Offer shall be effective only upon receipt by the Buyer. The
Buyer or its designee (the "Offeree") shall have the right to accept the Offer
and purchase all, but not less than all, of the shares of Common Stock subject
to the Offer. If the Offeree wishes to accept the Offer, the Offeree shall
notify in writing the Seller or Stockholder tendering the Offer no later than
8:30 a.m. eastern time on the Disposition Date and, upon such acceptance, shall
purchase such number of shares from the Seller or Stockholder for a price per
share equal to the opening ask price on the Disposition Date less 3% (the
"Offer Price"). Settlement of the transaction shall occur within three (3)
business days. At settlement, such Seller or Stockholder shall deliver to the
Offeree the certificate or certificates evidencing the shares accepted by the
Offeree duly endorsed for transfer and free and clear of any liens. If the
Buyer does not so notify such Seller or Stockholder, the Offer shall be deemed
to be rejected in its entirety and all such shares of Common Stock subject to
the Offer may be disposed of by the Seller or Stockholder tendering the Offer
in accordance with the Offer at any time within ten trading days after receipt
of the Offer by the Buyer. The Buyer shall be entitled to refuse to register
on its records the name of any transferee of the Seller or Stockholders as an
owner thereof if such transferee acquired such shares in violation of this
Section 4.7(d).
(e) Call Option. For a period of six (6) months from
Closing, the Buyer or its designee (the "Exercising Party") shall have the
option (the "Call Option") to purchase the shares of Common Stock held by the
Seller or Stockholder and the shares of Common Stock held pursuant to the
Escrow Agreement (with the proceeds delivered into escrow). The Call Option
may be exercised by delivery of written notice thereof (the "Call Option
Notice") to such Seller or Stockholder or the Escrow Agent, which notice may
only be given on any business day between 4:00 p.m. and 6:00 p.m. eastern time
or between 7:30 a.m. and 8:30 a.m. eastern time. To be effective, the Call
Option Notice shall be given to the Seller, the Stockholder or the Escrow Agent
from whom the shares are to be purchased, and to such counsel and broker dealer
as any of the Seller or the Stockholders may, by written notice, from time to
time request, and any such Call Option Notice shall be effective only upon
receipt by all such parties. The Call Option Notice shall state that the
Exercising Party has elected to exercise the Call Option. At settlement, which
shall occur within three (3) business days following the delivery of the Call
Option Notice, the Seller or Stockholder or the Escrow Agent shall deliver to
the Exercising Party the certificate or certificates evidencing the shares
subject to the Call Option duly endorsed for transfer and free
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and clear of any liens. The price per share (the "Call Option Price") shall be
equal to the greater of (i) the Issue Price or (ii) the opening ask price
immediately following the delivery of the Call Option Notice less 3%.
Notwithstanding the foregoing, the Exercising Party shall not have any rights
under this subsection (e) as to any shares of Common Stock held by Seller or
Stockholder as to which Seller or Stockholder has made an Offer as required
under Section 4.7(d) in respect of a disposition made in good faith, unless any
such shares are reacquired by the Seller or Stockholder free and clear of any
material claims created by reason of the disposition described in the Offer.
(f) Legend. Each certificate representing shares of
Common Stock issued pursuant to this Asset Purchase Agreement shall bear on its
face substantially the following legend: "THESE SECURITIES ARE SUBJECT TO THE
RESTRICTIONS ON TRANSFER AND OTHER PROVISIONS OF A CERTAIN ASSET PURCHASE
AGREEMENT DATED AS OF FEBRUARY 28, 1996, AS AMENDED AND IN EFFECT FROM TIME TO
TIME, AMONG THE CORPORATION AND THE STOCKHOLDERS NAMED THEREIN, A COPY OF WHICH
IS ON FILE AT THE OFFICES OF THE CORPORATION."
(g) Other Distributions. In addition to the provisions
of this Section 4.7, the Seller and the Stockholders hereby agree in all events
to conduct all market sales of Common Stock in an orderly fashion so as not to
materially disrupt the market for Common Stock.
(h) Terms of Escrow Agreement. The parties agree to
effect an amendment to the Escrow Agreement to include the following terms: The
Buyer and the Seller shall authorize and instruct the Escrow Agent to release
to the Seller from the Second Deposit, on the first (1st) business day of each
of the fourth (4th), seventh (7th), tenth (10th) and thirteenth (13th) calendar
months immediately following the Closing Date (each, a "Release Date"), that
number of shares of Common Stock equal to (i) (x) Three Hundred Seventy-Five
Thousand Dollars ($375,000), plus (y) interest at the Prime Rate on $375,000
from the Closing Date, less (z) the amounts of any Damages paid to or claimed
by the Buyer during the immediately preceding three-month period, (ii) divided
by the average of the midpoints of the closing bid and ask prices of Common
Stock for the five trading day period ending on the second business day
immediately preceding the Release Date. If, on any Release Date, there are not
sufficient Escrow Shares available to make the distribution specified in the
preceding sentence, the Buyer will deliver to the Escrow Agent, as soon as
practicable following Notice to the Buyer of such deficiency, that number of
shares of Common Stock necessary to make the required distribution and the
Buyer will use reasonable best efforts to register such shares in accordance
with Section 4.7(a) hereof. If, after the Release Date in the thirteenth
calendar month immediately following the Closing Date, Escrow Shares remain in
the Escrow Account, the Buyer and the Seller shall authorize the Escrow Agent
to release such Escrow Shares to the Buyer."
6. Section 8.2.7 of the Asset Purchase Agreement shall be and is
hereby amended to read as follows:
"8.2.7. Pagers in Service. The Seller shall have at least
94,640 Subscribers as of the Closing Date."
7. Except as otherwise specifically amended hereby, all terms and
provisions of the Asset Purchase Agreement shall remain in full force and
effect.
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EXECUTED AND DELIVERED on this 30th day of August 1996 and effective
as of the day and year first above written.
METROCALL, INC.
By: /s/ VINCENT D. KELLY
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Vincent D. Kelly
Chief Financial Officer,
Vice President and Treasurer
O.R. ESTMAN, INC.,
doing business as SATELLITE PAGING
By: /s/ KEVAN D. BLOOMGREN
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Name: Kevan D. Bloomgren
Its: Vice President and Chief Financial Officer
DANA PAGING, INC.,
doing business as MESSAGE NETWORK
By: /s/ KEVAN D. BLOOMGREN
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Name:
Its:
/s/ BERTRAM M. WACHTEL
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BERTRAM M. WACHTEL
/s/ EDWARD R. DAVALOS
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EDWARD R. DAVALOS
/s/ KEVAN D. BLOOMGREN
--------------------------------
KEVAN D. BLOOMGREN
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