<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 2, 1999.
REGISTRATION NO. 333-76167
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
AMENDMENT NO. 4
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------------
METROCALL, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 4812 54-1215634
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>
-------------------------
6677 RICHMOND HIGHWAY
ALEXANDRIA, VIRGINIA 22306
(703) 660-6677
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
WILLIAM L. COLLINS, III
CHIEF EXECUTIVE OFFICER
METROCALL, INC.
6677 RICHMOND HIGHWAY
ALEXANDRIA, VIRGINIA 22306
(703) 660-6677
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
-------------------------
WITH A COPY TO:
GEORGE P. STAMAS, ESQ.
THOMAS W. WHITE, ESQ.
WILMER, CUTLER & PICKERING
2445 M STREET, N.W.
WASHINGTON, D.C. 20037
(202) 663-6000
-------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: As soon as practicable after the effective date of this Registration
Statement.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering [ ]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT ISSUE THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS DECLARED EFFECTIVE. THIS PROSPECTUS IS NOT
AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY IN
ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
PROSPECTUS [METROCALL LOGO]
METROCALL, INC.
-------------------------
EXCHANGE OFFER FOR
11% SENIOR SUBORDINATED NOTES DUE 2008
This is an offer to exchange up to $250,000,000 in principal amount of
Metrocall's outstanding, unregistered 11% Senior Subordinated Notes Due 2008 for
a like amount of new, substantially identical 11% Senior Subordinated Notes that
will be free of the transfer restrictions that apply to the outstanding notes.
This offer will expire at 5:00 p.m., New York City time, on Monday, August 2,
1999, unless Metrocall extends it. The new notes will not trade on any
established exchange.
-------------------------
PLEASE SEE "RISK FACTORS" BEGINNING ON PAGE 11 FOR A DISCUSSION OF FACTORS YOU
SHOULD CONSIDER IN CONNECTION WITH THE EXCHANGE OFFER.
-------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE NEW NOTES TO BE DISTRIBUTED IN
THIS EXCHANGE OFFER, NOR HAVE ANY OF THESE ORGANIZATIONS DETERMINED THAT THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
-------------------------
The date of this prospectus is July 2, 1999
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Summary..................................................... 1
Risk Factors................................................ 11
Where You Can Find More Information......................... 13
Information Incorporated into this Prospectus............... 14
Use of Proceeds............................................. 14
Capitalization.............................................. 15
The Exchange Offer.......................................... 16
Description of the New Notes................................ 22
Description of the Old Notes................................ 50
Material United States Federal Income Tax Consequences...... 51
Plan of Distribution........................................ 57
Legal Matters............................................... 58
Experts..................................................... 58
Unaudited Pro Forma Condensed Combined Financial Data....... F-1
</TABLE>
i
<PAGE> 4
SUMMARY
This summary highlights information contained or incorporated elsewhere in this
prospectus. It may not contain all the information that is important to you. We
encourage you to read this entire prospectus carefully.
ABOUT METROCALL
Metrocall is a leading provider of local, regional and national paging and other
wireless messaging services. Paging is the transmission of a telephone number or
a text message by radio to a compact receiver that an individual carries on his
or her person. In addition to traditional paging, Metrocall's other wireless
messaging services include providing news, sports, stock and other general and
customized information by radio transmission to pagers with text-receiving
capability. We have a national network of paging transmitters through which we
provide messaging services to over 1,000 cities, including the 100 largest
metropolitan areas. Since 1993, the number of our subscribers has increased from
less than 250,000 to more than 5.6 million. We have achieved this growth through
a combination of internal growth and a program of mergers and acquisitions. At
December 31, 1998, we were the second largest messaging company in the United
States based on the number of subscribers.
In October 1998, Metrocall acquired the paging operations of AT&T Wireless
Services, Inc. This acquisition increased our subscriber base by adding 1.2
million subscribers to our existing customer base. We also acquired a radio
frequency license that will enable us to develop a two-way paging network. With
two-way paging, the customer will be able to send, as well as receive, messages
on a messaging device. We will also be able to offer guaranteed delivery
service. With a conventional pager, if the recipient is out of range or his or
her pager is off when the message is transmitted, the message is lost.
Guaranteed delivery service saves the message and delivers it when the pager
comes back into range or is turned back on.
We have also entered into a five-year strategic alliance with PageMart Wireless,
Inc. to develop the radio frequency we acquired from AT&T Wireless Services and
to offer services using this spectrum. Under this alliance, we will share with
PageMart capital expenditures and operating expenses involved in constructing
and providing services using this spectrum.
-------------------------
Metrocall was organized as a Delaware corporation in October 1982. Metrocall
common stock is traded on the Nasdaq Stock Market under the symbol "MCLL."
Metrocall's principal executive offices are located at 6677 Richmond Highway,
Alexandria, Virginia 22306 and its telephone number is (703) 660-6677.
1
<PAGE> 5
THE EXCHANGE OFFER
We summarize below the terms of the exchange offer. You should read the detailed
description of the offer under "The Exchange Offer."
GENERAL......................... Metrocall is offering up to $250,000,000
aggregate principal amount of new 11% senior
subordinated notes in exchange for a like
principal amount of outstanding,
unregistered notes. Metrocall issued the old
notes on December 22, 1998 in a private
placement. Metrocall is making the exchange
offer in order to satisfy its obligations
under a registration rights agreement with
the placement agents for the old notes.
EXPIRATION DATE................. 5:00 p.m., New York City time, on Monday,
August 2, 1999, or any subsequent date to
which the exchange offer is extended.
CONDITIONS TO THE EXCHANGE
OFFER........................... The exchange offer is not subject to any
conditions other than that the offer does
not violate applicable law or any applicable
interpretation of the staff of the SEC. The
offer is not conditioned upon any minimum
principal amount of notes being tendered.
Metrocall reserves the right
- to delay the acceptance of the notes for
exchange,
- to terminate the exchange offer,
- to extend the expiration date of the
exchange offer and retain all tendered
notes, subject to the right of tendering
holders to withdraw their tendered notes,
or
- to waive any condition or otherwise amend
the terms of the exchange offer in any
respect.
WITHDRAWAL RIGHTS............... You may withdraw a tender of notes at any
time on or prior to the expiration date by
delivering a written notice of withdrawal to
the exchange agent.
PROCEDURES FOR TENDERING OLD
NOTES......................... In order to tender your notes, you must
complete and sign a letter of transmittal in
accordance with the letter's instructions.
You must forward the letter of transmittal
and any other required documents to the
exchange agent, together with the notes to
be tendered.
Brokers, dealers, commercial banks, trust
companies and other nominees may also tender
notes by book-entry transfer. If your notes
are registered in the name of one of these
entities, you are urged to
2
<PAGE> 6
contact such person promptly if you wish
them to tender notes.
Please do not send letters of transmittal
and certificates representing notes to
Metrocall. Send them only to the exchange
agent. The exchange agent can answer your
questions regarding how to tender your
notes.
RESALES OF NEW NOTES............ Metrocall believes that the new notes issued
in the exchange offer may be offered for
resale, resold and otherwise transferred by
you without compliance with the registration
and prospectus delivery requirements of the
Securities Act, if
- you are acquiring the new notes in the
ordinary course of your business,
- you are not participating, and have no
arrangement or understanding to
participate, in the distribution of the
new notes, and
- you are not an affiliate of Metrocall. An
"affiliate" of Metrocall is a person that
"controls or is controlled by or is under
common control with" Metrocall.
Metrocall's belief is based on
interpretations by the SEC staff in
no-action letters issued to third parties
unrelated to Metrocall. The staff has not
considered this exchange offer in the
context of a no-action letter, and Metrocall
cannot assure you that the staff would make
a similar determination with respect to this
exchange offer.
Each broker-dealer that receives new notes
for its own account in exchange for old
notes that it acquired as a result of
market-making or other trading activities
must agree to deliver a prospectus meeting
the requirements of the Securities Act in
connection with any resale of the new notes.
See "The Exchange Offer -- Resale of New
Notes" and "Plan of Distribution."
INTEREST........................ Metrocall will pay accrued interest on old
notes you exchange to, but not including,
the issuance date of the new notes.
Metrocall will pay this interest to you with
the first interest payments on the new
notes.
EXCHANGE AGENT.................. The exchange agent is First Union National
Bank. The exchange agent's addresses, and
telephone and facsimile numbers are set
forth in "The Exchange Offer -- Exchange
Agent" and in the letter of transmittal.
3
<PAGE> 7
USE OF PROCEEDS................. Metrocall will not receive any cash proceeds
from the issuance of the new notes. The net
proceeds from the initial sale of notes were
approximately $242.6 million, of which
$229.0 million was used to repay outstanding
amounts under Metrocall's senior credit
facility. See "Use of Proceeds."
MATERIAL UNITED STATES FEDERAL
INCOME TAX CONSEQUENCES....... Metrocall has received a tax opinion from
its tax counsel, Wilmer, Cutler & Pickering,
on the material United States federal income
tax consequences of the exchange offer. You
should review the information set forth in
"Material United States Federal Income Tax
Consequences" prior to tendering old notes
in the exchange offer.
4
<PAGE> 8
THE NEW NOTES
We summarize below the key terms of the new notes. You should read the detailed
description of the notes under "Description of the New Notes."
ISSUER.......................... Metrocall, Inc.
TERMS OF NOTES OFFERED.......... The terms of the new notes will be identical
in all material respects to the old notes,
except that the new notes will not contain
transfer restrictions and will not include
increased interest provisions.
MATURITY........................ September 15, 2008.
INTEREST........................ Payable semi-annually in cash on March 15
and September 15 of each year.
OPTIONAL REDEMPTION............. Metrocall may redeem any of the notes
beginning on September 15, 2003. The initial
redemption price is 105.5% of the principal
amount, plus accrued interest. The
redemption price will decline each year
after 2003 and will be 100% of the principal
amount, plus accrued interest, beginning on
September 15, 2006.
CHANGE OF CONTROL............... Upon a change of control, as defined later
in this prospectus, Metrocall is required to
make an offer to purchase the notes. The
purchase price will equal 101% of the
principal amount of the notes on the date of
purchase, plus accrued interest. Metrocall
may not have sufficient funds available at
the time of any change of control to make
any required debt repayment, including
repurchases of the notes.
RANKING......................... The notes will rank behind all of
Metrocall's existing and future senior debt.
At March 31, 1999, the notes
- were subordinated to $73.6 million of
senior debt, and
- ranked equally with $700.3 million of
other senior subordinated debt.
CERTAIN COVENANTS............... The indenture governing the notes contains
covenants with which Metrocall must comply,
including:
- Metrocall may not incur additional debt if
as a result its total debt would exceed
6.0 times its annualized operating cash
flow, subject to exceptions including
borrowings of up to $200.0 million under
its senior credit facility, intercompany
debt, and debt incurred to refinance
existing debt. Annualized operating cash
flow is Metrocall's earnings before
interest, taxes, depreciation and
amortization for its most recent quarter
multiplied by four.
- Metrocall may not make restricted
payments -- such as cash dividends on
capital stock, repurchases or redemptions
of stock, or investments in
5
<PAGE> 9
or loans to entities in which Metrocall
has an interest -- except as permitted by
a formula. The formula allows restricted
payments equal to the sum of (1) the
excess of the ratio of cumulative cash
flow over two times cumulative fixed
charges since June 30, 1995 plus (2) the
proceeds of equity issuances since June
30, 1995.
- Metrocall may not pledge its assets as
collateral for any debt that ranks equally
with the notes, unless the notes also get
the benefit of the pledge.
- Metrocall may not enter into transactions
with its stockholders or persons it
controls, is controlled by or is under
common control with, unless Metrocall
complies with specified procedures.
- Metrocall may not dispose of assets in
excess of $1 million, or sell stock of
subsidiaries, unless it receives the fair
market value for the assets, at least 80%
of the consideration is in cash, and all
net proceeds are reinvested in the
business, used to repay senior debt, or
used to repurchase subordinated debt.
- Metrocall may not merge or consolidate
with other companies unless it is not in
default under the notes, the surviving
corporation assumes its obligations under
the indenture governing the notes, and it
could incur additional debt under the debt
covenant described above.
Each of these covenants is subject to other
qualifications and exceptions, which are set
forth in detail in "Description of the New
Notes -- Covenants." In addition,
Metrocall's senior credit facility and its
other subordinated debt contain covenants
that are more restrictive than these.
BOOK-ENTRY: DELIVERY
AND FORM...................... New notes exchanged for old notes will be
held in book-entry form by The Depository
Trust Company. DTC and its participants will
maintain the records of beneficial ownership
of the notes and of transfers of notes.
RISK FACTORS
YOU SHOULD CONSIDER CAREFULLY THE MATTERS RELATING TO METROCALL, ITS BUSINESS
AND AN INVESTMENT IN THE NOTES DESCRIBED IN "RISK FACTORS."
6
<PAGE> 10
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
The following table presents historical consolidated financial data of Metrocall
for the five years ended December 31, 1998 and for the three months ended March
31, 1998 and 1999, respectively. We derived the historical consolidated
financial data for each of the five years in the period ended December 31, 1998
from our audited consolidated financial statements. We derived the historical
consolidated financial data for the three months ended March 31, 1998 and 1999
and as of March 31, 1999 from our unaudited condensed consolidated financial
statements. You should read the following information together with our
consolidated financial statements and related notes which are included in our
Annual Report on Form 10-K/A for the year ended December 31, 1998, which has
been incorporated by reference.
The consolidated statements of operations data for fiscal years 1994, 1996, 1997
and 1998 presented below include the results of operations of acquired companies
from their respective acquisition dates. In May 1997, we sold the assets of our
telemessaging operations, which were acquired through merger on November 15,
1996. Therefore, the results of operations for the year ended December 31, 1997
include telemessaging operations through the date of sale only. Consolidated
statements of operations data for fiscal year 1997 exclude the operations of
ProNet Inc., because this merger was completed on December 30, 1997. Units in
service at December 31, 1997 include approximately 1.3 million units acquired in
the ProNet merger.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
-------------------------------------------------------------------- -----------------------------
1994 1995 1996 1997 1998 1998 1999
-------- --------- ------------- ------------- ------------- ------------- -------------
(AS RESTATED) (AS RESTATED) (AS RESTATED) (AS RESTATED) (AS RESTATED)
(DOLLARS IN THOUSANDS EXCEPT FOR UNIT DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENTS OF OPERATIONS
DATA:
Service, rent and
maintenance
revenues.................. $ 49,716 $ 92,160 $ 124,029 $ 249,900 $ 416,352 $ 92,038 $ 140,454
Product sales.............. 8,139 18,699 25,928 39,464 48,372 11,293 14,576
-------- --------- --------- --------- ---------- -------- ---------
Total revenues.......... 57,855 110,859 149,957 289,364 464,724 103,331 155,030
Net book value of products
sold...................... (6,962) (15,527) (21,633) (29,948) (31,791) 7,031 9,815
-------- --------- --------- --------- ---------- -------- ---------
50,893 95,332 128,324 259,416 432,933 96,300 145,215
Operating expenses:
Service, rent and
maintenance............... 10,632 20,080 29,696 69,254 115,432 25,500 39,994
Selling and marketing...... 7,313 15,546 24,101 53,802 73,546 16,374 25,025
General and
administrative(a)......... 16,796 33,985 42,905 73,753 121,644 28,544 41,352
Depreciation and
amortization.............. 13,829 31,504 58,196 91,699 234,948 52,144 75,723
-------- --------- --------- --------- ---------- -------- ---------
Loss from operations....... (2,323) (5,783) (26,574) (29,092) (112,637) (26,262) (36,879)
Interest and other income
(expense)(b).............. 161 314 (607) 156 849 320 16
Interest expense........... (3,726) (12,533) (20,424) (36,248) (64,448) (14,901) (20,700)
-------- --------- --------- --------- ---------- -------- ---------
Loss before income tax
benefit and extraordinary
item...................... (1,242) (18,002) (47,605) (65,184) (176,236) (40,843) (57,563)
Income tax provision
benefit................... 152 595 1,021 4,861 47,094 10,519 15,550
-------- --------- --------- --------- ---------- -------- ---------
Loss before extraordinary
item...................... (1,090) (17,407) (46,584) (60,323) (129,142) (30,324) (42,013)
Extraordinary item(b)...... (1,309) (2,695) (3,675) -- -- -- --
-------- --------- --------- --------- ---------- -------- ---------
Net loss.................. (2,399) (20,102) (50,259) (60,323) (129,142) (30,324) (42,013)
Preferred dividends........ -- -- (780) (7,750) (11,767) (2,348) (4,003)
Gain on repurchase of
preferred stock........... 2,208
-------- --------- --------- --------- ---------- -------- ---------
Loss attributable to
common stockholders..... $ (2,399) $ (20,102) $ (51,039) $ (68,073) $ (140,909) $(32,672) $ (43,808)
======== ========= ========= ========= ========== ======== =========
</TABLE>
- -------------------------
a) Includes the impact of one-time, non-recurring amounts for severance and
other compensation costs incurred as part of a management reorganization of
approximately $2.0 million in fiscal year 1995.
7
<PAGE> 11
b) In fiscal years 1994 and 1995, we refinanced balances outstanding under our
then existing credit facilities and recorded extraordinary items of $1.3
million and $2.7 million, respectively, representing charges to expense
unamortized deferred financing costs and other costs, net of any income tax
benefits, related to those credit facilities. In 1996, we recorded an
extraordinary item for costs of approximately $3.7 million paid to purchase
the A+ Network 11 7/8% senior subordinated notes outstanding. In 1995, we
incurred breakage fees of approximately $1.7 million associated with the
termination of two interest rate swap agreements, which have been included in
interest and other income (expense).
8
<PAGE> 12
You should find the definitions below useful in understanding Metrocall's
operating and other data:
- - EBITDA means earnings before interest, taxes, depreciation and amortization,
and certain one-time charges. While not a measure under generally accepted
accounting principles, EBITDA is a standard measure of financial performance
in the paging industry. Metrocall believes EBITDA can be used to measure its
ability to service debt, fund capital expenditures and expand its business.
EBITDA as defined by Metrocall is used in its credit facility and indentures
as part of the tests to determine its ability to incur debt and make
restricted payments. EBITDA as defined by Metrocall may not be comparable to
similarly titled measures reported by other companies since all companies do
not calculate EBITDA in the same manner. EBITDA should not be considered in
isolation or as an alternative to net income (loss), income (loss) from
operations, cash flows from operating activities, or any other measure of
performance under GAAP. Cash expenditures for various long-term assets,
interest expense and income taxes have been, and will be, incurred which are
not reflected in the EBITDA presentations. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Financial
Condition, Liquidity and Capital Resources" included in our Annual Report on
Form 10-K for the year ended December 31, 1998. In 1995, EBITDA excludes
non-recurring amounts of approximately $2.0 million incurred as part of a
management reorganization.
- - EBITDA margin is calculated by dividing EBITDA by the amount of total revenues
less the net book value of products sold.
- - ARPU is average monthly paging revenue per unit. ARPU is calculated by
dividing (a) service, rent and maintenance revenues for the period by (b) the
average number of units in service for the period. The ARPU calculation
excludes revenues derived from non-paging services such as telemessaging, long
distance and cellular telephone.
- - Average monthly operating expense per unit is calculated by dividing (a) total
recurring operating expenses before depreciation and amortization for the
period by (b) the average number of units in service for the period. For this
calculation, operating expenses exclude non-recurring amounts for severance
and other compensation costs incurred as part of a management reorganization
of approximately $2.0 million in 1995.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------------
1994 1995 1996 1997 1998
--------- --------- ------------- ------------- -------------
(AS RESTATED) (AS RESTATED) (AS RESTATED)
(DOLLARS IN THOUSANDS EXCEPT FOR UNIT DATA)
<S> <C> <C> <C> <C> <C>
OPERATING AND OTHER DATA:
Net cash provided by
operating activities....... $ 11,796 $ 14,000 $ 15,608 $ 27,166 $ 41,154
Net cash used in investing
activities................. $ (19,227) $ (44,528) $ (327,904) $ (176,429) $ (191,747)
Net cash provided by
financing activities....... $ 9,190 $ 151,329 $ 199,639 $ 163,242 $ 134,133
EBITDA...................... $ 16,152 $ 27,771 $ 31,622 $ 62,607 $ 122,311
EBITDA margin............... 31.7% 29.1% 24.6% 24.1% 28.3%
Ratio of earnings to fixed
charges.................... -- -- -- -- --
Deficiency of earnings to
fixed charges.............. $ (1,242) $ (18,002) $ (47,605) $ (65,184) $ (176,236)
ARPU........................ $ 10.53 $ 9.15 $ 8.01 $ 8.25 $ 7.57
Average monthly operating
expense per unit........... $ 7.36 $ 6.71 $ 6.35 $ 6.74 $ 5.71
Units in service (end of
period).................... 755,546 944,013 2,142,351 4,030,836 5,659,550
Units in service per
employee (end of period)... 1,007 1,047 1,086 1,366 1,512
Capital expenditures........ $ 19,091 $ 44,058 $ 62,110 $ 69,935 $ 78,658
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------------------------------
1998 1999
------------- -------------
(AS RESTATED) (AS RESTATED)
(DOLLARS IN THOUSANDS EXCEPT FOR UNIT DATA)
<S> <C> <C>
OPERATING AND OTHER DATA:
Net cash provided by
operating activities....... $ 4,012 $ 19,004
Net cash used in investing
activities................. $ (20,261) $ (27,427)
Net cash provided by
financing activities....... $ 5,970 $ 12,590
EBITDA...................... $ 25,882 $ 38,844
EBITDA margin............... 26.9% 26.7%
Ratio of earnings to fixed
charges.................... -- --
Deficiency of earnings to
fixed charges.............. (40,843) (57,563)
ARPU........................ $ 7.28 $ 8.15
Average monthly operating
expense per unit........... $ 5.77 $ 6.21
Units in service (end of
period).................... 4,116,859 5,750,215
Units in service per
employee (end of period)... 1,445 1,557
Capital expenditures........ $ 19,085 $ 25,466
</TABLE>
9
<PAGE> 13
<TABLE>
<CAPTION>
AS OF DECEMBER 31, AS OF
------------------------------------------------------------------- MARCH 31,
1994 1995 1996 1997 1998 1999
-------- -------- ------------- ------------- ------------- -------------
(AS RESTATED) (AS RESTATED) (AS RESTATED) (AS RESTATED)
<S> <C> <C> <C> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash and cash equivalents................... $ 2,773 $123,574 $ 10,917 $ 24,896 $ 8,436 $ 12,603
Working capital (deficit)................... (5,277) 116,009 (8,396) (36,747) (41,828) (38,577)
Total assets................................ 200,580 340,614 645,448 1,078,023 1,251,038 1,202,494
Total debt.................................. 104,846 154,055 327,792 599,941 743,334 772,140
Redeemable preferred stock.................. -- -- 31,231 53,982 160,742 146,297
Total stockholders' equity (deficit)........ 68,136 155,238 165,169 170,505 33,780 (9,652)
</TABLE>
10
<PAGE> 14
RISK FACTORS
You should carefully consider those risks described below, as well as other
information included in this prospectus, before making a decision to participate
in the exchange offer.
BUSINESS RISKS -- METROCALL'S BUSINESS IS SUBJECT TO RISKS THAT COULD IMPAIR ITS
BUSINESS OPERATIONS.
This prospectus incorporates by reference the risk factors described in our
Annual Report on Form 10-K for the year ended December 31, 1998, as amended
under "Risk Factors."
SUBORDINATION -- YOUR RIGHT TO RECEIVE PAYMENTS ON THE NOTES WILL BE JUNIOR TO
OUR EXISTING SENIOR DEBT AND ALL OF OUR FUTURE SENIOR DEBT. ALL OUR ASSETS ARE
PLEDGED TO SECURE LOANS UNDER OUR SENIOR SECURED CREDIT FACILITY. THESE NOTES
WILL SHARE ANY FUNDS REMAINING AFTER PAYMENT OF SENIOR DEBT PRO RATA WITH OUR
OTHER SUBORDINATED DEBT.
The notes will rank behind all of our existing senior debt and all of our future
senior debt. Senior debt is all borrowings under our senior secured credit
facility and any other debt expressly designated as senior debt. As a result,
upon any distribution to our creditors in a bankruptcy, liquidation or
reorganization or similar proceeding, the holders of senior debt will be
entitled to be paid in full before any payment can be made with respect to the
notes. In addition, all payments on the notes will be blocked in the event of a
payment default on senior debt and may be blocked for up to 179 of 360
consecutive days in the event of certain non-payment defaults on senior debt.
All our assets are pledged to secure all present and future loans under our
senior secured credit facility. If we default under these loans, the senior
secured lenders will be able to foreclose on our assets to satisfy their loans.
Foreclosed assets will not be available to satisfy the claims of our other
creditors, including your notes.
At March 31, 1999, we had $73.6 million of senior debt primarily under our
secured credit facility, all of which is secured by all of our assets. We may
need to borrow more money under this facility in order to finance our
operations. At March 31, 1999, we could borrow up to $63.0 million more under
the leverage covenants in our senior loan agreement. This debt will also rank
ahead of the notes and will be secured by our assets.
The notes will rank equally with our existing senior subordinated debt. As of
March 31, 1999, we had $700.3 million principal amount of existing senior
subordinated debt, including the notes. If our assets remaining after the senior
debt was paid were insufficient to repay all senior subordinated debt, the notes
would share proportionately with the other senior subordinated debt. In that
event, you would not be repaid in full.
If an event of default occurs under the indenture that governs the notes, that
event of default will also constitute an event of default under our senior
credit facility. We cannot assure that sufficient funds will be available to
repay your notes if there is a default.
NO TRADING MARKET -- THERE IS CURRENTLY NO PUBLIC TRADING MARKET FOR THE NOTES.
IF AN ACTIVE TRADING MARKET DOES NOT DEVELOP FOR THESE NOTES, YOU MAY NOT BE
ABLE TO RESELL THEM.
No active trading market currently exists for the notes and none may develop.
The notes will not be listed on any securities exchange. The trading price may
depend upon prevailing interest rates, the market for similar securities, and
other factors, including general economic conditions and our financial
condition, performance and prospects. Although the placement agents have
informed us that they intend to make a market in the notes, they are not
obligated to do so and may discontinue any market-making activities at any time
without notice. If an active trading market does not develop, you may not be
able to resell your notes at their fair market value or at all.
11
<PAGE> 15
OLD NOTE TRANSFER RESTRICTIONS -- NOTES THAT YOU DO NOT EXCHANGE WILL CONTINUE
TO BE SUBJECT TO TRANSFER RESTRICTIONS AND MIGHT BECOME LESS LIQUID.
Metrocall did not register the old notes under the Securities Act or any state
securities laws. As a result, you may not offer, sell or otherwise transfer the
old notes except in compliance with the registration requirements of the
Securities Act and any other applicable securities laws, or in compliance with
an exemption from those registration requirements. Old notes that you do not
tender will, after the exchange offer, continue to bear a legend reflecting
these restrictions on transfer. If you still hold notes that you have not
tendered after the exchange offer, you will not be entitled to any rights to
have those notes registered under the Securities Act. See "Description of the
Old Notes." We do not intend to register any notes that you have not tendered
after the exchange offer. Accordingly, it may be difficult for you to resell
your old notes. The old notes are currently and will remain eligible for sale
pursuant to Rule 144A through the Private Offerings, Resale and Trading through
Automated Linkages market of the National Association of Securities Dealers,
Inc.
Your ability to sell unregistered notes that you have not tendered in the
exchange offer could be adversely affected by other holders tendering and
receiving registered notes. We anticipate that most holders of old notes will
exchange them for new notes. As more holders of old notes participate in the
exchange, the liquidity of the market for any old notes that remain after the
completion of the exchange offer may be substantially limited. Any old notes
tendered and exchanged in the exchange offer will reduce the aggregate principal
amount of the old notes outstanding.
CHANGE OF CONTROL OFFER -- WE MAY NOT HAVE THE ABILITY TO RAISE THE FUNDS
NECESSARY TO FINANCE THE CHANGE OF CONTROL OFFER REQUIRED BY THE INDENTURE.
Upon the occurrence of certain specific kinds of change of control events, we
will be required to offer to repurchase all outstanding notes. However, it is
possible that we will not have sufficient funds at the time of the change of
control to make the required repurchase of notes or that restrictions in our
credit facility will not allow such repurchases. See "Description of the New
Notes -- Change of Control."
FORWARD-LOOKING STATEMENTS -- THIS PROSPECTUS INCLUDES FORWARD-LOOKING
STATEMENTS. IF OUR EXPECTATIONS REFLECTED IN THESE FORWARD-LOOKING STATEMENTS
PROVE TO BE INCORRECT, OUR ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THESE
EXPECTATIONS.
This prospectus includes or incorporates forward-looking statements. We have
based these forward-looking statements on our current expectations and
projections about future events. These forward-looking statements are subject to
risks, uncertainties and assumptions about Metrocall, including, among other
things:
- Metrocall's high leverage and need for substantial capital;
- Metrocall's ability to service its debt;
- Metrocall's history of operating losses;
- the restrictive covenants governing Metrocall's indebtedness;
- Ability to cover fixed charges
- the amortization of Metrocall's intangible assets;
- Metrocall's ability to integrate acquisitions and realize cost savings
from the elimination of duplicative functions of acquired businesses;
- the risks associated with Metrocall's ability to implement its business
strategies;
- the impact of competition and technological developments;
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<PAGE> 16
- satellite transmission failures;
- subscriber turnover;
- Metrocall's ability to implement its Year 2000 readiness plan;
- litigation;
- regulatory changes; and
- dependence on key suppliers.
Other matters set forth in this prospectus or in the documents incorporated by
reference may also cause actual results in the future to differ materially from
those described in the forward-looking statements. We undertake no obligation to
update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise. In light of these risks, uncertainties
and assumptions, the forward-looking events discussed in this prospectus might
not occur.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational requirements of the Securities Exchange Act
of 1934, as amended, and, therefore, file reports, proxy statements and other
information with the SEC. You can inspect and copy all of this information at
the Public Reference Room maintained by the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549. You may obtain information on the operation of the
Public Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC
maintains a web site that contains reports, proxy statements and information
statements and other information regarding issuers, such as us, that file
electronically with the SEC. The address of this web site is http://www.sec.gov.
This prospectus is a part of a registration statement on Form S-4 that we filed
with the SEC under the Securities Act of 1933. The rules of the SEC allow us to
leave some of the information contained in the registration statement out of
this prospectus. Therefore, you should review the registration statement and its
exhibits for further information about us and our common stock. Copies of the
registration statement and its exhibits are on file at the offices of the SEC
and you can view them at the SEC's website. You should read the exhibit for a
more complete description of the matters involved. You should rely only on the
information or representations provided in this prospectus and the registration
statement. We have not authorized anyone to provide you with different
information.
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<PAGE> 17
INFORMATION INCORPORATED INTO THIS PROSPECTUS
The SEC allows us to incorporate by reference the information we file with them,
which means that we can disclose important information to you by referring you
to those documents. The information incorporated by reference is considered to
be part of this prospectus, and information that we file later with the SEC will
automatically update and supersede this information. We incorporate by reference
into this prospectus the following documents or information filed with the SEC:
1. Metrocall's Annual Report on Form 10-K for the year ended December
31, 1998, as amended, filed with the SEC on July 2, 1999.
2. Metrocall's Quarterly Report on Form 10-Q for the period ended
March 31, 1999, as amended, filed with the SEC on July 2, 1999.
3. Metrocall's Current Reports on Form 8-K filed with the SEC on
October 16, 1998 (as amended on January 27, 1999 and July 2, 1999) and
January 4, 1999.
4. All future filings by Metrocall with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act until completion of the
exchange offer.
You may request a copy of these filings at no cost by writing to us at:
Metrocall, Inc., 6677 Richmond Highway, Alexandria, Virginia 22306, Attention:
Shirley B. White, Assistant Secretary. We will not provide copies of exhibits to
the filings unless the exhibits are specifically incorporated by reference into
the body of the filing. In order to make sure that you receive documents before
the end of this exchange offer, you should make the request at least five (5)
business days prior to the end of this exchange offer.
USE OF PROCEEDS
Metrocall will not receive any cash proceeds from the issuance of the new notes.
On December 22, 1998, Metrocall received net proceeds of $242.6 million from the
issuance of the notes. Of these net proceeds, Metrocall used $229.0 million to
repay outstanding indebtedness under its senior credit facility, and used the
remaining net proceeds for other corporate purposes.
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<PAGE> 18
CAPITALIZATION
This table sets forth Metrocall's capitalization as of March 31, 1999. Since the
exchange offer will involve an exchange of outstanding securities, it will have
no effect on capitalization. You should read the information set forth below
together with "Unaudited Pro Forma Condensed Combined Financial Data" included
in this prospectus, and Metrocall's interim condensed consolidated financial
statements and consolidated financial statements and the related notes.
<TABLE>
<CAPTION>
MARCH 31, 1999
----------------------
(DOLLARS IN THOUSANDS)
<S> <C>
Cash and cash equivalents................................ $ 12,603
=========
Short-term debt:
Current portion of long-term debt...................... $ 687
Long-term debt:
Borrowings under Credit Facility....................... 69,000
11 7/8% Senior Subordinated Notes Due 2005 (A+
Notes).............................................. 284
11 7/8% Senior Subordinated Notes Due 2005 (ProNet
Notes).............................................. 100,000
10 3/8% Senior Subordinated Notes Due 2007............. 150,000
9 3/4% Senior Subordinated Notes Due 2007.............. 200,000
11% Senior Subordinated Notes Due 2008(1).............. 248,304
Capital lease obligations.............................. 3,438
Other long-term debt................................... 431
---------
771,457
---------
Series A Convertible Preferred Stock..................... 47,468
Series C Convertible Preferred Stock..................... 98,829
Stockholders' equity:
Common stock........................................... 417
Additional paid-in capital............................. 340,624
Accumulated deficit.................................... (350,693)
---------
Total stockholders' equity.......................... (9,652)
---------
Total capitalization.............................. $ 908,789
=========
</TABLE>
- -------------------------
(1) Net of a discount of $1.70 million.
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<PAGE> 19
THE EXCHANGE OFFER
PURPOSE OF THE EXCHANGE OFFER
When it sold the old notes, Metrocall entered into a registration rights
agreement with the placement agents. Metrocall agreed, among other things, to
use its best efforts to file a registration statement under the Securities Act
for an offer to exchange the old notes for new notes with terms identical in all
material respects and to have the registration statement remain effective until
the closing of the exchange offer. This exchange offer is being made to satisfy
Metrocall's contractual obligations under the registration rights agreement. The
approval of federal or state authorities is not required for consummation of the
exchange offer.
If the exchange offer is not consummated on or before June 22, 1999, the annual
interest rate of the notes will increase by .5% per annum until the exchange
offer is consummated.
TERMS OF THE EXCHANGE
Metrocall offers, upon the terms and subject to the conditions set forth in this
prospectus and in the accompanying letter of transmittal, to exchange up to
$250,000,000 aggregate principal amount of new notes for a like aggregate
principal amount of old notes. The form and terms of the new notes are identical
in all material respects to the form and terms of the old notes, except that the
new notes have been registered under the Securities Act and therefore will not
contain transfer restrictions and will not provide for an increase in interest
payments as a consequence of a failure to register them under the Securities
Act. Metrocall will exchange new notes for old notes properly tendered on or
prior to the expiration date and not properly withdrawn in accordance with the
procedures described below. Metrocall will issue the new notes promptly after
the expiration date. The exchange offer is not conditioned upon any minimum
principal amount of old notes being tendered.
The exchange offer is not being made to, and Metrocall will not accept tenders
for exchange from, holders of old notes in any jurisdiction in which the
exchange offer or the acceptance of the offer would not be in compliance with
the securities or blue sky laws of such jurisdiction.
Old notes that are not tendered for, or are tendered but not accepted, will
remain outstanding and be entitled to the benefits of the note indenture, but
will not be entitled to any further registration rights under the registration
rights agreement.
Metrocall will be considered to have accepted validly tendered old notes if and
when it gives oral or written notice to the exchange agent. The exchange agent
will act as tendering holders' agent for purposes of receiving the new notes
from Metrocall. If Metrocall does not accept any tendered notes for exchange
because of an invalid tender or the occurrence of other events, the exchange
agent will return the certificates for unaccepted old notes, without expense, to
the tendering holder promptly after the expiration date, or, if unaccepted old
notes are uncertificated, these securities will be returned, without expense to
the tendering holder, promptly after the expiration date via book entry
transfer.
METROCALL'S BOARD OF DIRECTORS DOES NOT MAKE ANY RECOMMENDATION TO HOLDERS OF
OLD NOTES AS TO WHETHER OR NOT TO TENDER ALL OR ANY PORTION OF THEIR OLD NOTES.
IN ADDITION, NO ONE HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION. HOLDERS OF
OLD NOTES MUST MAKE THEIR OWN DECISION WHETHER TO TENDER THEIR OLD NOTES AND, IF
SO, THE AMOUNT OF OLD NOTES TO TENDER.
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<PAGE> 20
EXPIRATION DATE
The expiration date for the offer is 5:00 p.m., New York City time, on Monday,
August 2, 1999 unless Metrocall extends the exchange offer. In that case the
expiration date will be the latest date and time to which the exchange offer is
extended.
CONDITIONS; EXTENSIONS; AMENDMENTS
The exchange offer is not subject to any conditions other than that the offer
does not violate applicable law or any applicable interpretations of the SEC
staff. The offer is not conditioned upon any minimum principal amount of notes
being tendered.
Metrocall reserves the right in its sole discretion:
- to delay the acceptance of the old notes for exchange,
- to terminate the exchange offer,
- to extend the expiration date and retain all old notes that have been
tendered, subject, however, to the right of holders of old notes to
withdraw their tendered notes, and
- to waive any condition or otherwise amend the terms of the exchange offer
in any respect.
If Metrocall amends the exchange offer in a manner it considers material, or if
Metrocall waives a material condition of the exchange offer, Metrocall will
promptly disclose such amendment by means of a prospectus supplement, and
Metrocall will extend the exchange offer for a period of five to ten business
days.
Following any delay in acceptance, extension, termination or amendment,
Metrocall will notify the exchange agent and make a public announcement. In the
case of an extension, Metrocall will make the announcement no later than 9:00
a.m., New York City time, on the next business day after the previously
scheduled expiration date. Metrocall will communicate any public announcement by
issuing a release to an appropriate news agency.
PROCEDURES FOR TENDERING OLD NOTES
To tender in the exchange offer, a holder must, unless the tender is being made
in book-entry form,
- complete, sign and date the letter of transmittal, or a facsimile of it,
- have the signatures guaranteed if required by the letter of transmittal,
and
- mail or otherwise deliver the letter of transmittal or the facsimile, the
old notes and any other required documents to the exchange agent prior to
5:00 p.m., New York City time, on the expiration date.
Any financial institution that is a participant in The Depository Trust
Company's Book-Entry Transfer Facility system may make book-entry delivery of
the old notes by causing DTC to transfer the old notes into the exchange agent's
account. Although delivery of old notes may be effected in this way, the letter
of transmittal, or facsimile, with any required signature guarantees and any
other required documents must be transmitted to and received or confirmed by the
exchange agent at its addresses set forth under the caption "Exchange Agent,"
below, prior to 5:00 p.m., New York City time, on the expiration date. Delivery
of documents to DTC in accordance with its procedures does not constitute
delivery to the exchange agent.
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<PAGE> 21
The tender by a holder of old notes will constitute an agreement between
Metrocall and the holder to the terms and subject to the conditions set forth in
this prospectus and in the letter of transmittal.
The method of delivery of old notes and the letter of transmittal and all other
required documents to the exchange agent is at the election and risk of the
holders. Instead of delivery by mail, Metrocall recommends that holders use an
overnight or hand delivery service. In all cases, holders should allow
sufficient time to assure delivery to the exchange agent before the expiration
date. No letter of transmittal of old notes should be sent to Metrocall.
Holders may request their respective brokers, dealers, commercial banks, trust
companies or nominees to effect the tenders for them. Any beneficial owner whose
old notes are registered in the name of a broker, dealer, commercial bank, trust
company or other nominee and who wishes to tender should contact the registered
holder promptly and instruct such registered holder to tender on behalf of the
beneficial owner. If the beneficial owner wishes to tender on that owner's own
behalf, the owner must, prior to completing and executing the letter of
transmittal and delivery of such owner's old notes, either make appropriate
arrangements to register ownership of the old notes in the owner's name or
obtain a properly completed bond power from the registered holder. The transfer
of registered ownership may take considerable time.
Signature on a letter of transmittal or a notice of withdrawal, must be
guaranteed by an eligible guarantor institution within the meaning of Rule
17Ad-15 under the Securities Exchange Act, unless the old notes tendered
pursuant thereto are tendered
- by a registered holder who has not completed the box entitled "Special
Payment Instructions" or "Special Delivery Instructions" on the letter of
transmittal, or
- for the account of an eligible guarantor institution.
In the event that signatures on a letter of transmittal or a notice of
withdrawal are required to be guaranteed, such guarantee must be by
- a member firm of a registered national securities exchange or of the
National Association of Securities Dealers, Inc.,
- a commercial bank or trust company having an office or correspondent in
the United States or
- an eligible guarantor institution.
If the letter of transmittal for any old notes is signed by a person other than
the registered holder, the old notes must be endorsed by the registered holder
or accompanied by a properly completed bond power, in each case signed or
endorsed in blank by the registered holder. If the letter of transmittal or any
old notes or bond powers are signed or endorsed by trustees, executors,
administrators, guardians, attorney-in-fact, officers of corporations or others
acting in a fiduciary or representative capacity, they should so indicate when
signing. In addition, these persons must submit evidence satisfactory to
Metrocall of their authority to act in that capacity with the letter of
transmittal. Metrocall can waive this requirement.
Metrocall will determine in its sole discretion all questions as to the
validity, form, eligibility, including time of receipt, and acceptance and
withdrawal of tendered old notes. Metrocall reserves the absolute right to
reject any and all old notes not properly tendered or any old notes whose
acceptance by it would, in the opinion of Metrocall's counsel, be unlawful.
Metrocall also reserves the right to waive any defects, irregularities or
conditions
18
<PAGE> 22
of tender as to any particular old notes either before or after the expiration
date. Metrocall's interpretation of the terms and conditions of the exchange
offer, including the instructions in the letter of transmittal, will be final
and binding, on all parties. Unless waived, any defects or irregularities in
connection with tenders of old notes must be cured within a time period
Metrocall will determine. Although Metrocall intends to request the exchange
agent to notify holders of defects or irregularities relating to tenders of old
notes, neither Metrocall, the exchange agent nor any other person will have any
duty or incur any liability for failure to give such notification. Tenders of
old notes will not be considered to have been made until any defects or
irregularities have been cured or waived. Any old notes received by the exchange
agent that are not properly tendered and as to which the defects or
irregularities have not been cured or waived will be returned by the exchange
agent to the tendering holders, unless otherwise provided in the letter of
transmittal, as soon as practicable following the expiration date.
By tendering, each holder represents to Metrocall that, among other things
- the new notes acquired in connection with the exchange offer are being
obtained in the ordinary course of business of the person receiving the
new notes, whether or not such person is the holder,
- that neither the holder nor any such other person has an arrangement or
understanding with any person to participate in the distribution of such
new notes, and
- that neither the holder nor any such other person is Metrocall's
affiliate. An affiliate of Metrocall is a person that controls, is
controlled by or is under common control with Metrocall.
RESALES OF NEW NOTES
Metrocall believes that the new notes issued in the exchange offer for old notes
may be offered for resale, resold and otherwise transferred by the holder
without compliance with the registration and prospectus delivery requirements of
the Securities Act, if
- the holder is acquiring the new notes in the ordinary course of its
business,
- the holder is not participating, and has no arrangement or understanding
to participate, in the distribution of the new notes, and
- The holder is not an affiliate of Metrocall.
Metrocall's belief is based on interpretations by the SEC staff in no-action
letters issued to third parties unrelated to Metrocall. The staff has not
considered this exchange offer in the context of a no-action letter, and
Metrocall cannot assure you that the staff would make a similar determination
with respect to this exchange offer.
Any holder of the old notes using the exchange offer to participate in a
distribution of new notes cannot rely on the no-action letters referred to
above. This includes a broker-dealer that acquired old notes directly from
Metrocall, but not as a result of market-making activities or other trading
activities. Consequently, the holder must comply with the registration and
prospectus delivery requirements of the Securities Act in the absence of an
exemption from these requirements. Each broker-dealer that receives new notes
for its own account in exchange for old notes, as a result of market-making
activities or other trading activities, must acknowledge that it will deliver a
prospectus in connection with any resale of such new notes. This prospectus, as
it may be amended or supplemented from time to time, may be used by a
broker-dealer in connection with resales of new notes received in
19
<PAGE> 23
exchange for old notes where such old notes were acquired by such broker-dealer
as a result of market-making activities or other trading activities. The letter
of transmittal states that by acknowledging that it will deliver a prospectus, a
broker-dealer will not be considered to admit that it is an "underwriter" within
the meaning of Securities Act. Metrocall has agreed that for a period of 180
days after the expiration date, it will make this prospectus available to
broker-dealers for use in connection with any resale covered by these rules. See
"Plan of Distribution." Except as described above, this prospectus may not be
used for an offer to resell, resale or other retransfer of new notes.
WITHDRAWAL RIGHTS
Except as otherwise provided in this prospectus, tenders of old notes may be
withdrawn at any time on or prior to 5:00 p.m., New York City time, on the
expiration date.
For a holder to withdraw a tender of old notes, the exchange agent must receive
a written or facsimile transmission notice of withdrawal at its address below
before 5:00 p.m., New York City time, on the expiration date. Any notice of
withdrawal must
- specify the name of the person who deposited the old notes to be
withdrawn,
- identify the old notes to be withdrawn, including the certificate number
or numbers and principal amount of the old notes,
- be signed by the depositor in the same manner as the original signature
on the letter of transmittal by which the old notes were tendered,
including any required signature guarantees, or be accompanied by
documents of transfer sufficient to have the trustee register the
transfer of the old notes into the name of the person withdrawing the
tender, and
- specify the name of which any withdrawn old notes are to be registered,
if different from that of the depositor.
Metrocall will determine all questions as to the validity, form and eligibility,
including time of receipt, of withdrawal notices. Any old notes so withdrawn
will be considered not to have been validly tendered for purposes of the
exchange offer and no new notes will be issued unless the old notes withdrawn
are validly re-tendered. Any old notes which have been tendered but which are
not accepted for exchange or which are withdrawn will be returned to the holder
without cost to such holder as soon as practicable after withdrawal, rejection
of tender or termination of the exchange offer. Properly withdrawn old notes may
be re-tendered by the following one of the procedures described above under the
caption "Procedures for Tendering" at any time prior to the expiration date.
EXCHANGE AGENT
First Union National Bank has been appointed as exchange agent for the exchange
offer. Delivery of the letter of transmittal and any other required documents,
questions, requests
20
<PAGE> 24
for assistance, and requests for additional copies of this prospectus or of the
letter of transmittal should be directed to the exchange agent as follows:
First Union National Bank
Customer Information Center -- NC1153
1525 West W.T. Harris Blvd., 3C3,
Charlotte, North Carolina 28262-1153
Phone: 704-590-7408
Facsimile: 704-590-7628
Attn: Michael Klotz
Delivery other than to the above address or facsimile number will not constitute
a valid delivery.
FEES AND EXPENSES
Metrocall will not make any payment to brokers, dealers or others soliciting
acceptances of the exchange offer. It will pay other expenses to be incurred in
the exchange offer, including the fees and expenses of the exchange agent,
accounting and legal fees. Holders who tender their old notes for exchange will
not be obligated to pay any transfer taxes. If, however,
- new notes are to be delivered to, or issued in the name of, any person
other than the registered holder of the old notes tendered, or
- tendered old notes are registered in the name of any person other than
the person signing the letter of transmittal, or
- a transfer tax is imposed for any reason other than the exchange of old
notes in connection with the exchange offer,
then the amount of any such transfer taxes, whether imposed on the registered
holder or any other persons, will be payable by the tendering holder. If
satisfactory evidence of payment of such taxes or exemption from them is not
submitted with the letter of transmittal, the amount of such transfer taxes will
be billed directly to the tendering holder.
ACCOUNTING TREATMENT
The new notes will be recorded at the same carrying value as that of the old
notes as reflected in the Metrocall's accounting records on the date of the
exchange. Accordingly, Metrocall will not recognize any gain or loss for
accounting purposes upon completion of the exchange offer. The expenses related
to the issuance of the notes and of the exchange offer will be capitalized and
amortized over the term of the notes.
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<PAGE> 25
DESCRIPTION OF THE NEW NOTES
The new notes will be issued under the Indenture between Metrocall and First
Union National Bank, as Trustee. The terms of the notes include those terms
stated in the Indenture and those terms made part of the Indenture by reference
to the Trust Indenture Act of 1939. You can find the definitions of terms used
in this description under "-- Definitions." This section contains a summary and
a more detailed description of the material provisions of the Indenture. It does
not restate the Indenture in its entirety. We urge you to read the Indenture
because it and not this description defines your rights as holders of these
notes. You may obtain a copy of the Indenture from Metrocall.
PRINCIPAL, MATURITY AND INTEREST
The new notes
- have a maximum aggregate principal amount of $250.0 million.
- will mature on September 15, 2008.
- accrue interest at 11% per year, payable semi-annually on March 15 and
September 15.
Metrocall will issue new notes with a maximum aggregate principal amount of
$250.0 million. Metrocall will issue notes in denominations of $1,000 and
integral multiples of $1,000. The notes will mature on September 15, 2008.
Subject to the covenants described below under "-- Covenants," Metrocall may
issue additional notes under the Indenture. These notes and any additional notes
subsequently issued would be treated as a single class for all purposes under
the Indenture.
Metrocall will pay interest on the notes semi-annually in arrears on each March
15 and September 15 (each an "Interest Payment Date") at the rate of 11% per
annum. Interest on each new note shall accrue from the last Interest Payment
Date on which interest was paid on the old notes so surrendered. Metrocall will
make each interest payment to the persons in whose names the notes are
registered at the close of business on the preceding March 1 and September 1.
Interest will accrue from the date of original issuance or, if interest has
already been paid, from the date it was most recently paid. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
Principal of, and premium, if any, and interest on each note will be payable and
the notes may be presented for transfer or exchange at the office or agency of
Metrocall maintained for such purpose. At the option of Metrocall, payment of
interest may be made by check mailed to registered holders of the notes at the
addresses set forth on the registry books maintained by the Trustee, who will
initially act as registrar for the notes. No service charge will be made for any
exchange or registration of transfer of notes, but Metrocall may require payment
of a sum sufficient to cover any tax or other governmental charge payable in
connection therewith. Unless otherwise designated by Metrocall, Metrocall's
office or agency will be the corporate trust office of the Trustee.
OPTIONAL REDEMPTION
Metrocall may redeem any of the notes beginning on September 15, 2003. The
initial redemption price is 105.5% of the principal amount, plus accrued
interest. The redemption price will decline each year after 2003 and will be
100% of the principal amount, plus accrued interest, beginning on September 15,
2006.
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Beginning on September 15, 2003, Metrocall may redeem all or part of the notes
upon giving not less than 30 nor more than 60 days' notice at the redemption
prices expressed as percentages of principal amount set forth below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
- ---- ----------
<S> <C>
2003................................................ 105.500%
2004................................................ 103.667%
2005................................................ 101.833%
2006 and thereafter................................. 100.000%
</TABLE>
Metrocall must also pay accrued and unpaid interest on the notes up to but not
including the redemption date. The redemption prices listed above apply to any
optional redemption of notes by Metrocall during the 12-month period beginning
on September 15 of the years indicated above.
If Metrocall is redeeming or purchasing less than all of the notes pursuant to
any purchase offer required under the Indenture, the Trustee shall select notes
for redemption or purchase in compliance with the requirements of the principal
national securities exchange, if any, on which the notes are listed, or, if the
notes are not so listed, on a pro rata basis, by lot or by such method as the
Trustee shall deem fair and appropriate; provided, however, that Metrocall shall
not redeem or purchase in part any notes with a principal amount of less than
$1,000. Metrocall shall mail notice of redemption by first class mail at least
30 but not more than 60 days before the redemption date to each holder of notes
to be redeemed at the last address for such holder then shown on the registry
books. If any note is to be redeemed in part only, the notice of redemption that
relates to such note shall state the portion of the principal amount to be
redeemed, which portion shall not be less than $1,000. Metrocall shall issue a
new note in principal amount equal to the unredeemed or unpurchased portion in
the name of the holder upon cancellation of the original note.
If Metrocall is redeeming the notes in part, Metrocall will not be required:
- to exchange or register the transfer of any notes for a period of 15 days
before the selection of Notes for redemption, or
- to exchange or register the transfer of any notes so selected, except the
unredeemed portion of any such notes being redeemed in part.
On and after the redemption or purchase date, interest will cease to accrue on
the notes or portions thereof called for redemption or purchase, whether or not
such notes are presented for payment at the office of the paying agent for the
notes in New York, New York unless Metrocall defaults in the payment of the
redemption or purchase price.
SINKING FUND
There will be no sinking fund payments for the notes.
RANKING
The notes will rank behind all of Metrocall's existing and future Senior Debt.
This means that holders of Senior Debt are entitled, if Metrocall defaults, to
be paid in full before any payments are made on the notes or any other Metrocall
subordinated Debt. In addition, the senior lenders will have the right to block
current payments on the notes if there is a default under the Senior Debt.
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The notes will, to the extent set forth in the Indenture, be subordinate in
right of payment to the prior payment in full of all existing and future Senior
Debt. Upon any payment or distribution of assets of Metrocall to creditors upon
any liquidation, dissolution, winding up, reorganization, assignment for the
benefit of creditors, marshalling of assets, bankruptcy, insolvency or any
similar proceedings of Metrocall, the holders of Senior Debt will first be
entitled to receive payment in full of principal of, premium, if any, and
interest on such Senior Debt before the holders of notes are entitled to receive
any payment of principal of, premium, if any, or interest on the notes or on
account of the purchase or redemption or other acquisition of notes by Metrocall
or any subsidiary of Metrocall. Notwithstanding the foregoing, in the event that
the Trustee or the holder of any note receives any payment or distribution of
assets of Metrocall of any kind or character before all the Senior Debt is paid
in full, then such payment or distribution will be required to be paid over or
delivered forthwith to the trustee in bankruptcy or other Person making payment
or distribution of assets of Metrocall for application to the payment of all
Senior Debt remaining unpaid, to the extent necessary to pay the Senior Debt in
full.
Metrocall may not make any payments on account of the notes or on account of the
purchase or redemption or other acquisition of notes if there shall have
occurred and be continuing a default in the payment when due of principal of,
premium, if any, or interest on any Senior Debt, including without limitation
any default in the payment when due of any commitment or facility fees, letter
of credit fees or agency fees under the Credit Facility, or any default in
payment when due of any reimbursement obligation of Metrocall with respect to
any letter of credit issued under the Credit Facility (a "Senior Payment
Default"). In addition, if there shall have occurred and be continuing any
default, other than a Senior Payment Default, with respect to the Credit
Facility or any Designated Senior Debt that permits, or with the giving of
notice or lapse of time or both would permit, the holders thereof, or a trustee
on behalf thereof, to accelerate the maturity thereof (a "Senior Nonmonetary
Default"), and Metrocall and the Trustee have received written notice thereof
from the agent bank for the Credit Facility or from an authorized person on
behalf of any Designated Senior Debt, then Metrocall may not make any payments
on account of the notes or on account of the purchase or redemption or other
acquisition of notes for a period (a "blockage period") commencing on the date
Metrocall and the Trustee receive such written notice and ending on the earlier
of: 179 days after such date, or the date, if any, on which the Senior Debt to
which such default relates is discharged or such default is waived or otherwise
cured.
In any event, not more than one blockage period may be commenced during any
period of 360 consecutive days, and there shall be a period of at least 181
consecutive days in each period of 360 consecutive days when no blockage period
is in effect. No Senior Nonmonetary Default that existed or was continuing on
the date of the commencement of any blockage period with respect to the Senior
Debt initiating such blockage period will be, or can be, made the basis for the
commencement of a subsequent blockage period, unless such default has been cured
or waived for a period of not less than 90 consecutive days. In the event that,
notwithstanding the foregoing, Metrocall makes any payment to the Trustee or the
holder of any note prohibited by the subordination provisions, then such payment
will be required to be paid over and delivered forthwith to the holders of the
Senior Debt remaining unpaid, to the extent necessary to pay in full all the
Senior Debt.
By reason of such subordination, in the event of insolvency of Metrocall,
creditors of Metrocall who are not holders of Senior Debt or of the notes may
recover less, ratably, than holders of Senior Debt and may recover more,
ratably, than the holders of the notes.
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The subordination provisions described above will cease to be applicable to the
notes upon any defeasance or covenant defeasance of the notes as described below
under "Defeasance."
DEFINITIONS
Set forth below is a summary of terms used in this description of the new notes.
We refer you to the Indenture for the full definition of all such terms.
"Acquired Debt" means, with respect to any Person,
- Debt of such Person existing at the time such Person becomes a Subsidiary
of Metrocall or such Person is merged into a Subsidiary of Metrocall and
- Debt assumed by such Person in connection with the acquisition of assets
by such Person from another Person other than Metrocall or any of its
Subsidiaries, provided that such Debt was not Incurred in connection with
or in contemplation of such Person becoming a Subsidiary of Metrocall or
such acquisition of assets, as the case may be.
"Affiliate" of any Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such Person. For the purposes of this definition, "control" when used with
respect to any Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Asset Disposition" by any Person means any transfer, conveyance, sale, lease or
other disposition by such Person or any of its Subsidiaries, 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
- shares of Capital Stock, other than directors' qualifying shares, or
other ownership interests of a Subsidiary of such Person,
- substantially all of the assets of such Person or any of its Subsidiaries
representing a division or line of business or
- 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 $1.0 million.
"Asset Exchange Transaction" means any transaction pursuant to which properties
or assets of Metrocall or a Subsidiary of Metrocall constituting a paging system
within a geographically identifiable area and related properties and assets (an
"Identifiable Paging System") or all of the shares of Capital Stock of a
Subsidiary of Metrocall, the properties and assets of which constitute an
Identifiable Paging System, are to be exchanged for properties or assets
constituting an Identifiable Paging System of another Person or Persons or all
of the shares of Capital Stock of another Person or Persons the properties and
assets of which constitute an Identifiable Paging System.
"Attributable Debt" in respect of a sale and leaseback transaction means, at the
time of determination, the present value 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
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<PAGE> 29
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, after excluding all amounts required to be paid on
account of maintenance and repairs, insurance, taxes, assessments, water,
utilities and similar charges.
"Board of Directors," when used with reference to Metrocall, means the Board of
Directors of Metrocall, or the Executive Committee of the Board of Directors of
Metrocall.
"Board Resolution" means a resolution of the Board of Directors of Metrocall.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday which
is not a day on which banking institutions in New York, New York or the city in
which the Corporate Trust Office is located are authorized or obligated by law
or executive order to close.
"Capital Lease Obligation" of any Person means the obligation to pay rent or
other payment amounts under a lease of real or personal property of such Person
which is required to be classified and accounted for as a capital lease or a
liability on the face of a balance sheet of such Person in accordance with GAAP.
The stated maturity of such obligation shall be the date of the last payment of
rent or any other amount due under such lease prior to the first date upon which
such lease may be terminated by the lessee without payment of a penalty.
"Capital Stock" of any Person means any and all shares, interests,
participations or other equivalents of corporate stock of such Person and all
other equity interests in such Person.
"Change of Control" means the occurrence of one or more of the following events:
- a person, entity or group of persons or entities, as that term is used in
Section 13(d)(3) of the Securities Exchange Act, shall have become the
beneficial owner, as defined in Rules 13d-3 and 13d-5 under the Exchange
Act, of a majority of the securities of Metrocall ordinarily having the
right to vote in the election of directors,
- during any consecutive three-year period commencing on or after the date
of the Indenture, individuals who at the beginning of such period
constituted the Board of Directors of Metrocall, together with any
directors who are members of such Board of Directors on the date of the
Indenture and any new directors whose election by such Board of Directors
or whose nomination for election by the stockholders of Metrocall was
approved by a vote of at least 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,
- any sale, lease, exchange or other transfer of all, or substantially all,
the assets of Metrocall to any person or entity or group of persons or
entities other than any wholly owned Subsidiary of Metrocall,
- the merger or consolidation of Metrocall with or into another corporation
or the merger of another corporation into Metrocall with the effect that
immediately after such transaction any person or entity or group of
persons or entities 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
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<PAGE> 30
- the adoption of a plan leading to the liquidation or dissolution of
Metrocall.
"Common Stock" of any Person means Capital Stock of such Person that does not
rank prior, as to the payment of dividends or as to the distribution of assets
upon any voluntary or involuntary liquidation, dissolution or winding up of such
Person, to shares of Capital Stock of any other class of such Person.
"Consolidated Cash Flow" of any Person means for any period the Consolidated Net
Income of such Person for such period plus
- Consolidated Interest Expense of such Person for such period, plus
- the consolidated income tax expense of such Person and its consolidated
Subsidiaries for such period, plus
- the consolidated depreciation and amortization expense included in the
income statement of such Person and its consolidated Subsidiaries for
such period, plus
- 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
- 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, a Subsidiary of the referent Person shall be added to
Consolidated Net Income to compute Consolidated Cash Flow only to the
extent that the net income of such Subsidiary was included in calculating
the Consolidated Net Income of such Person and only if and to the extent
such Subsidiary could have paid such amount at the date of determination
as a dividend to Metrocall by such Subsidiary without prior governmental
approval, 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.
"Consolidated Fixed Charges" of any Person means for any period
- Consolidated Interest Expense of such Person plus
- Preferred Stock dividends declared and payable in cash or in kind in such
period, or accrued in such period, whether or not declared and payable,
in the case of cumulative Preferred Stock, by such Person or any of its
consolidated Subsidiaries, other than any such dividends payable only in
shares of Common Stock or options, warrants or other rights to purchase
or acquire Common Stock, or payable by a Subsidiary of such Person to
such Person or one of its wholly owned Subsidiaries.
"Consolidated Interest Expense" of any Person means for any period the
consolidated interest expense included in a consolidated income statement,
without deduction of interest income, of such Person and its consolidated
Subsidiaries for such period determined in accordance with GAAP, including
without limitation or duplication,
- the amortization of Debt discounts,
- any payments of fees with respect to letters of credit, bankers'
acceptances or similar facilities,
- 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
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<PAGE> 31
acquisition or termination thereof which are not allocable to interest
expense in accordance with GAAP, and
- the interest component associated with Capital Lease Obligations.
"Consolidated Net Income" of any Person means for any period the net income of
such Person and its Subsidiaries for such period, determined on a consolidated
basis in accordance with GAAP; provided, that there shall be excluded therefrom
- the net income of any Subsidiary of such Person which is subject to
restrictions which prevent the payment of dividends and the making of
distributions to such Person except to the extent of the amount of
dividends or other distributions actually paid to such Person by such
Subsidiary without violation of any such restrictions,
- the net income of any Person that is not a consolidated Subsidiary of
such Person except to the extent of the amount of dividends or other
distributions actually paid to such Person by such other Person during
such period,
- any gain or loss on any Asset Disposition by such Person or any of its
Subsidiaries and
- any extraordinary gain or loss.
"Corporate Trust Office" means the principal corporate trust office of the
Trustee at which, at any particular time, its corporate trust business shall be
administered, which office at the date of execution of the Indenture is located
at 800 East Main Street -- LM Level, Richmond, Virginia 23219.
"Credit Facility" means the Fourth Amended and Restated Loan Agreement dated as
of December 22, 1998, among Metrocall, certain lenders and Toronto Dominion
(Texas), Inc., as administrative agent for the lenders, providing for a senior
secured credit facility, as the same may be amended, modified, supplemented,
extended, renewed, restated, refunded, refinanced, restructured or replaced from
time to time.
"Debt" means, with respect to any Person, whether recourse is to all or a
portion of the assets of such Person, and whether or not contingent,
(1) indebtedness of such Person for money borrowed,
(2) indebtedness of such Person evidenced by bonds, debentures, notes or
other similar instruments,
(3) every reimbursement obligation of such Person with respect to letters
of credit, bankers' acceptances or similar facilities issued for the
account of such Person,
(4) every obligation of such Person 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,
(5) every Capital Lease Obligation of such Person,
(6) Attributable Debt of such Person,
(7) the maximum fixed redemption or repurchase price of Redeemable Stock of
such Person at the time of determination,
(8) every obligation of another Person secured by a Lien on any asset of
such Person, provided, however, that unless such Debt constitutes Debt
of the referent Person
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<PAGE> 32
pursuant to any other clause of this definition, the amount of such
Debt shall be the lesser of the fair market value of such asset or the
amount of such Debt and
(9) every obligation of the type referred to in items (1) through (8) above
of another Person and all dividends of another Person the payment of
which, in either case, such Person has Guaranteed or for which such
Person is responsible or liable, directly or indirectly, as obligor,
Guarantor or otherwise.
"Default" means any event which is, or after notice or passage of time, or both,
would be, an Event of Default.
"Designated Senior Debt" means any Senior Debt, other than under the Credit
Facility, in an original principal or committed amount of not less than $50.0
million where the instrument governing such Senior Debt expressly states that
such Debt is "Designated Senior Debt" for purposes of the Indenture and a Board
Resolution setting forth such designation by Metrocall has been filed with the
Trustee.
"Event of Default" means any of those events described in "Events of Default"
below.
"GAAP" means generally accepted accounting principles set forth in the opinions
and pronouncements of the Accounting Principles Board of the American Institute
of Certified Public Accountants and statements and pronouncements of the
Financial Accounting Standards Board or in such other statements by such other
entity as may be approved by a significant segment of the accounting profession
of the United States.
"Guaranty" by any Person means any obligation, contingent or otherwise, of such
Person guaranteeing or having the economic effect of guaranteeing any Debt of
any other Person (the "primary obligor") in any manner, whether directly or
indirectly, and including, without limitation, any obligation of such Person
- to purchase or pay or advance or supply funds for the purchase or payment
of such Debt or to purchase or to advance or supply funds for the
purchase of any security for the payment of such Debt,
- to purchase property, securities or services for the purpose of assuring
the holder of such Debt of the payment of such Debt, or
- to maintain working capital, equity capital or other financial condition
or liquidity of the primary obligor so as to enable the primary obligor
to pay such Debt, and "Guarantee," "Guaranteeing" and "Guarantor" shall
have meanings correlative to the foregoing; provided, however, that the
Guaranty by any Person shall not include endorsements by such Person for
collection or deposit, in either case, in the ordinary course of
business.
"Incur" means, with respect to any Debt or other obligation of any Person, to
create, issue, incur by conversion, exchange or otherwise, assume, Guarantee or
otherwise become liable in respect of such Debt or other obligation, or the
recording, as required pursuant to GAAP or otherwise, of any such Debt or other
obligation on the balance sheet of such Person, and "Incurrence," "Incurred,"
"Incurrable" and "Incurring" have meanings correlative to the foregoing;
provided, however, that a change in GAAP that results in an obligation of such
Person that exists at such time becoming Debt shall not be deemed an Incurrence
of such Debt.
"Indenture" means the Indenture, dated as of December 22, 1998, between
Metrocall and the Trustee.
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"Lien" means, with respect to any property or assets, any mortgage or deed of
trust, pledge, security interest, lien, charge, encumbrance of any kind in
respect of such properties or assets or other security agreement including,
without limitation, any conditional sale or other title retention agreement
having substantially the same economic effect as any of the foregoing.
"Net Available Proceeds" from any Asset Disposition by any Person means cash or
readily marketable cash equivalents received from such Person, net of
- all legal, title and recording tax expenses, commissions and other fees
and expenses incurred and all federal, state, provincial, foreign and
local taxes required to be accrued as a liability as a consequence of
such Asset Disposition,
- all payments made by such Person or its Subsidiaries on any Debt which is
secured by the assets subject to such Asset Disposition in accordance
with the terms of any Lien upon or with respect to such assets or which
must by the terms of such Lien, or in order to obtain a necessary consent
to such Asset Disposition or by applicable law, be repaid out of the
proceeds from such Asset Disposition,
- all distributions and other payments made to minority interest holders in
Subsidiaries of such Person or joint ventures as a result of such Asset
Disposition, and
- a reasonable reserve for the after-tax costs of any indemnification
payments attributable to the seller's indemnities to the purchaser
undertaken by Metrocall or any of its Subsidiaries in connection with
such Asset Disposition.
"Officer" means any of the Chairman of the Board of Directors, the Chief
Executive Officer, the President, any Vice President, the Chief Financial
Officer, the Treasurer or the Secretary or Assistant Treasurer or Assistant
Secretary of Metrocall.
"Officers' Certificate" means a certificate signed by two Officers or by an
Officer and an Assistant Treasurer of Metrocall stating that, in the opinion of
the signers, all conditions precedent and covenants provided for in the
Indenture relating to the proposed action have been complied with.
"Permitted Liens" means:
- Liens incurred and pledges and deposits made in the ordinary course of
business in connection with liability insurance, workers' compensation,
unemployment insurance, old-age pensions, and other social security
benefits other than in respect of employee benefit plans subject to
ERISA,
- Liens securing performance, surety, and appeal bonds and other
obligations of like nature incurred in the ordinary course of business,
- Liens on goods and documents securing trade letters of credit,
- Liens imposed by law, such as carriers', warehousemen's, mechanics',
materialmen's, and vendors' liens, incurred in the ordinary course of
business and securing obligations which are not yet due or which are
being contested in good faith by appropriate proceedings,
- Liens securing the payment of taxes, assessments, and governmental,
charges or levies either not delinquent or being contested in good faith
by appropriate legal or administrative proceedings, and as to which
adequate reserves shall have been established on the books of the
relevant Person in conformity with GAAP,
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<PAGE> 34
- zoning restrictions, easements, rights of way, reciprocal easement
agreements, operating agreements, covenants, conditions, or restrictions
on the use of any parcel of property that are routinely granted in real
estate transactions or do not interfere in any material respect with the
ordinary conduct of the business of Metrocall and its Subsidiaries or the
value of such property for the purpose of such business,
- Liens on property existing at the time such property is acquired and
Liens on the assets of any Subsidiary of Metrocall at the time such
Subsidiary is acquired, provided such Liens apply only to such acquired
property,
- Liens existing as of the date of the Indenture,
- Liens securing Debt Incurred for the purpose of financing all or any part
of the cost of acquiring any property, equipment or other assets,
provided that such Debt is Incurred prior to, at the time of, or within
60 days after the acquisition of such assets solely for the purpose of
financing the acquisition of such assets in compliance with the provision
described under "Limitation on Incurrence of Debt" covenant below,
- any attachment or judgment Lien, unless the judgment it secures would
constitute an Event of Default,
- Liens with respect to assets of a Subsidiary granted by such Subsidiary
to Metrocall to secure Debt owing to Metrocall,
- rights of banks to set off deposits against debts owed to said banks,
- any interest or title of a lessor in property of Metrocall or a
Subsidiary of Metrocall subject to any capitalized lease or operating
lease, as each are defined under generally accepted accounting
principles,
- other Liens incidental to the conduct of the business of Metrocall or any
of its Subsidiaries, as the case may be, or the ownership of their assets
that do not materially detract from the value of the property of
Metrocall or a Subsidiary of Metrocall subject thereto,
- Liens securing Refinancing Debt, provided that such Liens only extend to
the property or assets securing the Debt being refinanced, such
refinanced Debt was previously secured by similar Liens on such property
or assets and the Debt or other obligations secured by such Liens is not
increased, and
- Liens in addition to the foregoing securing Debt not to exceed $500,000
in the aggregate outstanding at any time.
"Permitted Stock Repurchase" means, with respect to Metrocall, the purchase or
redemption for fair market value, as determined by a majority of the Board of
Directors of Metrocall, including a majority of the independent, disinterested
directors, and evidenced by a resolution of the Board of Directors of Metrocall,
of shares of Capital Stock of Metrocall, including stock appreciation rights and
similar securities, held by any present or former officer of Metrocall or by an
employee stock ownership plan or similar trust for the account of such present
or former officer upon such person's death, disability, retirement or
termination of employment or under the terms of any such plan or any other
agreement under which such shares were originally issued.
"Person" means an individual, partnership, corporation, limited liability
company, trust or unincorporated organization, and a government or agency or
political subdivision thereof.
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<PAGE> 35
"Preferred Stock," as applied to the Capital Stock of any Person, means Capital
Stock of such Person of any class or classes that ranks prior, as to the payment
of dividends or as to the distribution of assets upon any voluntary or
involuntary liquidation, dissolution or winding up of such Person, to shares of
Capital Stock of any other class of such Person.
"Pro Forma Consolidated Cash Flow" of any Person means for any period the
Consolidated Cash Flow of such Person 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 during such period or subsequent to such period,
as if such Asset Disposition or acquisition had taken place on the first day of
such period.
"Redeemable Stock" means any equity security that by its terms or otherwise is
required to be redeemed prior to the stated maturity of the Notes, or is
redeemable at the option of the holder thereof at any time prior to the stated
maturity of the Notes.
"Refinancing Debt" means
- any Debt of Metrocall that renews, refunds or extends any outstanding
Debt of Metrocall or a Subsidiary of Metrocall which Debt was Incurred in
compliance with the Indenture, other than Debt Incurred under the Credit
Facility or in connection therewith, and
- any Debt of a Subsidiary of Metrocall that renews, refunds or extends any
Debt of such Subsidiary which Debt was Incurred in compliance with the
Indenture, other than Guarantees of Debt Incurred under the Credit
Facility or in connection therewith, in any case 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 Metrocall as necessary to accomplish
such refinancing by means of a tender offer or privately negotiated
repurchase, plus the expenses of Metrocall Incurred in connection with
such refinancing, provided that
- in the case of any refinancing of the Notes or any pari passu Debt,
such Refinancing Debt is made pari passu or subordinate in right of
payment to the Notes,
- in the case of any refinancing of Debt that is subordinate in right
of payment to the Notes, such Refinancing Debt is made subordinate
in right of payment to the Notes to the same extent as the Debt
refinanced thereby, and
- such Refinancing Debt has a final maturity date not earlier than the
final maturity date of, and has a Weighted Average Life to Maturity
equal to or greater than the Weighted Average Life to Maturity of,
the Debt being renewed, refunded or extended.
"Related Person" means any Person owning 5% or more of the outstanding Common
Stock of Metrocall or a Subsidiary of Metrocall, or 5% or more of the Voting
Stock of Metrocall or a Subsidiary of Metrocall.
"Senior Debt" means
(1) the principal of, premium, if any, and interest on, penalties and any
obligation of Metrocall for reimbursement, indemnities and fees
relating to, Debt outstanding pursuant to the Credit Facility,
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<PAGE> 36
(2) all other debt of Metrocall referred to in the definition of Debt other
than items (7) and (9) with respect to item (7) of that definition,
(3) payment obligations of Metrocall under interest rate swap or similar
agreements or foreign currency hedge, exchange or similar agreements
required by the Credit Facility, where the counterparty to such
agreement is a lender under the Credit Facility, and
(4) all renewals, extensions, modifications, refinancings, refundings and
amendments of any Debt or payment obligations referred to in items (1),
(2) or (3) above, including, without limitation, any interest rate swap
or similar agreements or foreign currency hedge, exchange or similar
agreements that are entered into by Metrocall for the purpose of
modifying, terminating or hedging any agreement that constitutes Senior
Debt under item (3) above whether or not such modification, termination
or hedge was required by the Credit Facility and whether or not the
counterparty to such agreement is a lender or former lender under such
Credit Facility, unless, in the case of any particular Debt referred to
above,
- such Debt is owed to a Subsidiary of Metrocall,
- the instrument creating or evidencing the same or pursuant to which
the same is outstanding expressly provides that such Debt is not
superior in right of payment to the Notes,
- such Debt is Incurred in violation of the Indenture, or
- such Debt is by its terms subordinate in right of payment in respect
of any other Debt of Metrocall.
"Significant Subsidiary" means, at any date of determination, any Subsidiary
that, together with its Subsidiaries,
- for the most recent fiscal year of Metrocall, accounted for more than 10%
of the consolidated revenues of Metrocall and its Subsidiaries or
- as of the end of such fiscal year, was the owner of more than 10% of the
consolidated assets of Metrocall and its Subsidiaries, all as set forth
on the most recently available consolidated financial statements of
Metrocall for such fiscal year.
"Subsidiary" of any Person means
- a corporation more than 50% of the outstanding Voting Stock of which is
owned, directly or indirectly, by such Person or by one or more other
Subsidiaries of such Person, or by such Person and one or more other
Subsidiaries thereof or
- any other Person other than a corporation in which such Person, or one or
more other Subsidiaries of such Person or such Person and one or more
other Subsidiaries thereof, directly or indirectly, has at least a
majority ownership and power to direct the policies, management and
affairs thereof, provided that an Unrestricted Subsidiary shall be deemed
not to be a Subsidiary of Metrocall for purposes of the Indenture.
"Trustee" means First Union National Bank, a national banking association with
its principal corporate office in Richmond, Virginia.
"Unrestricted Subsidiary" means
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- any Subsidiary of Metrocall that at the time of determination shall be
designated an Unrestricted Subsidiary by the Board of Directors in the
manner provided below and
- any Subsidiary of an Unrestricted Subsidiary.
The Board of Directors may designate any Subsidiary Metrocall to be an
Unrestricted Subsidiary unless such Subsidiary holds any Lien on any
property of Metrocall or any Subsidiary that is not, or is not to be
designated as, an Unrestricted Subsidiary; provided, that
(1) any Guaranty by Metrocall or any Subsidiary of any Debt of the
Subsidiary being so designated shall be deemed an "Incurrence" of
Debt and an investment by Metrocall or such Subsidiary, or both, if
applicable, at the time of such designation,
(2) either the Subsidiary to be so designated has total assets of
$10,000 or less, or if such Subsidiary has total assets greater than
$10,000, such designation would be permitted under the "Limitation
on Restricted Payments" covenant described below and
(3) if applicable, the Incurrence of Debt and the investment referred to
in item (1) above would be permitted under the "Limitation on
Incurrence of Indebtedness" and "Limitation on Restricted Payments"
covenants described below.
The Board of Directors may designate any Unrestricted Subsidiary to be a
Subsidiary; provided that immediately after giving effect to such
designation,
- all Liens and Debt of such Unrestricted Subsidiary outstanding
immediately after such designation would, if Incurred at such time,
have been permitted to be Incurred, and shall be deemed to have been
Incurred, for all purposes of the Indenture and
- no Default or Event of Default shall have occurred and be continuing.
Any such designation by the Board of Directors shall be evidenced to
the Trustee by promptly filing with the Trustee a copy of a resolution
of the Board of Directors giving effect to such designation and an
Officers' Certificate certifying that such designation complied with
the foregoing provisions.
"Voting Stock" of any Person means Capital Stock of such Person which ordinarily
has voting power for the election of directors or persons performing similar
functions of such Person, whether at all times or only so long as no senior
class of securities has such voting power by reason of any contingency.
"Weighted Average Life to Maturity" means, when applied to any Debt at any date,
the number of years obtained by dividing
- the sum of the products obtained by multiplying
- the amount of each then remaining installment, sinking fund, serial
maturity or other required payments of principal, including payment at
final maturity, in respect thereof, by
- the number of years calculated to the nearest one-twelfth that will
elapse between such date and the making of such payment, by
- the then outstanding principal amount of such Debt.
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COVENANTS
The Indenture contains covenants with which Metrocall must comply. Here is a
summary and more detailed description of the principal covenants.
LIMITATION ON INCURRENCE OF DEBT. Metrocall may not incur additional Debt if as
a result its total Debt would exceed 6.0 times its annualized operating cash
flow, subject to exceptions including borrowings of up to $200.0 million under
its senior credit facility, intercompany Debt, and Debt incurred to refinance
existing Debt. Annualized operating cash flow is Metrocall's earnings before
interest, taxes, depreciation and amortization for its most recent quarter
multiplied by four.
Metrocall may not Incur, and may not permit any of its Subsidiaries to Incur,
any Debt; provided, however, that
- Metrocall may Incur any Debt and
- Metrocall may permit a Subsidiary to Incur Acquired Debt, if, in either
case, immediately thereafter the ratio of the aggregate principal amount
of Debt of Metrocall and its Subsidiaries outstanding as of the date of
such Incurrence to 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 Debt had been Incurred and the proceeds thereof had
been applied at the beginning of such fiscal quarter, would be less than
6.0 to 1 but greater than zero.
Notwithstanding the foregoing limitation, Metrocall may Incur and, as
applicable, may permit its Subsidiaries to Incur, without duplication, the
following Debt:
(1) Debt of Metrocall or any Subsidiary under the Credit Facility in an
aggregate principal amount not to exceed $200.0 million at any one time
outstanding,
(2) Guarantees by Subsidiaries of Debt under the Credit Facility Incurred
by Metrocall in accordance with this covenant,
(3) Debt of Metrocall evidenced by the notes,
(4) Debt owed by Metrocall to any Subsidiary of Metrocall or owed by any
Subsidiary of Metrocall to Metrocall or any other Subsidiary of the
Company, but only so long as such Debt is held by Metrocall or such
Subsidiary,
(5) Debt outstanding on the date the notes are originally issued under the
Indenture,
(6) Debt arising from the honoring by a bank or other financial institution
of a check, draft or similar instruments drawn against insufficient
funds in the ordinary course of business, provided that such Debt is
extinguished within two Business Days of its Incurrence,
(7) Refinancing Debt, and
(8) renewals of Guarantees permitted by item (2) 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, 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, Metrocall, 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 the amount of Debt issued at a
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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.
LIMITATION ON LAYERING. Metrocall cannot create Debt that ranks below Senior
Debt but ahead of the notes.
The Indenture provides that so long as the notes are outstanding Metrocall will
not Incur any Debt that is by its terms subordinate or junior in any respect in
right of payment to any Senior Debt and that is senior in any respect in right
of payment to the notes.
LIMITATION ON RESTRICTED PAYMENTS. Metrocall may not make restricted
payments -- such as cash dividends on capital stock, repurchases or redemptions
of stock, or investments in or loans to entities in which Metrocall has an
interest -- except as permitted by a formula. The formula allows restricted
payments equal to the sum of (1) the excess of the ratio of cumulative cash flow
over two times cumulative fixed charges since June 30, 1995 plus (2) the
proceeds of equity issuances since June 30, 1995.
There are separate restricted payments "baskets" permitting
- repurchases of stock or stock rights from officers of Metrocall or an
employee stock ownership plan at fair market value, up to $2.0 million
per individual and $6.0 million in total,
- investments in telecommunications businesses of up to $20.0 million in
total, and
- other restricted payments not to exceed $10.0 million in total.
Metrocall may not, and may not permit any of its Subsidiaries to,
(1) directly or indirectly, declare or pay any dividend, or make any
distribution, in respect of its Capital Stock or to the holders
thereof, including pursuant to a merger or consolidation of Metrocall,
but excluding any dividends or distributions payable solely in shares
of its Capital Stock, other than Redeemable Stock or in options,
warrants or other rights to acquire its Capital Stock other than
Redeemable Stock, other than dividends or distributions payable to
Metrocall or any wholly owned Subsidiary of Metrocall, or by a
Subsidiary of Metrocall to a holder who is not Metrocall or a
Subsidiary of Metrocall, provided that such dividend or distribution is
paid to all holders of the Capital Stock of the payor of such dividend
pro rata in accordance with their respective interests,
(2) directly or indirectly repurchase, redeem or otherwise acquire or
retire for value any Capital Stock of Metrocall or any Related Person
or any options, warrants or rights to purchase or acquire shares of
Capital Stock of Metrocall or any Related Person,
(3) purchase or otherwise acquire any Capital Stock of, or make any loan,
advance, capital contribution to or investment in, or any payment on a
Guarantee of any obligation of, any Affiliate or any Related Person,
other than Metrocall or a Subsidiary of Metrocall, inclusive of any
such purchase, loan, advance, capital contribution to or investment in,
or payment on a Guarantee of any obligation of, any Affiliate or
Related Person pursuant to a transaction whereby any such Person
becomes an Affiliate or Related Person, but exclusive of any such
purchase, loan, advance, capital contribution to or investment in, or
payment on a Guarantee of any obligation of, any Person pursuant to a
transaction whereby any such Person becomes a Subsidiary of Metrocall,
in each case unless otherwise prohibited by the terms of the Indenture,
or
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(4) redeem, defease, repurchase, retire or otherwise acquire or retire for
value prior to any scheduled maturity, repayment or sinking fund
payment, other than with the proceeds of Refinancing Debt, Debt of
Metrocall which is subordinate in right of payment to the notes, each
of items (1) through (4) above being a "Restricted Payment",
if at the time of such Restricted Payment, or after giving effect thereto:
- an Event of Default, or an event that with the lapse of time or the
giving of notice, or both, would constitute an Event of Default, shall
have occurred and be continuing,
- Metrocall could not incur $1.00 of additional Debt pursuant to the first
paragraph of the Covenant described under "-- Limitation on Incurrence of
Debt" above, or
- the aggregate of all Restricted Payments from June 30, 1995 exceeds the
sum of:
- the excess of (1) 100% of cumulative Consolidated Cash Flow after June
30, 1995 through the last day of the last full fiscal quarter immediately
preceding such Restricted Payment for which quarterly or annual financial
statements of Metrocall are available, as determined in good faith by
Metrocall, over (2) the product of 2.0 times cumulative Consolidated
Fixed Charges after June 30, 1995 through the last day of the last full
fiscal quarter immediately preceding such Restricted Payment for which
quarterly or annual financial statements of Metrocall are available, as
determined in good faith by Metrocall, and
- 100% of the aggregate net proceeds received by Metrocall from the
issuance or sale after June 30, 1995 of (1) Capital Stock, other than
Redeemable Stock, of Metrocall or options, warrants or other rights to
acquire Capital Stock, other than Redeemable Stock, of Metrocall or (2)
Debt of Metrocall that has been converted or exchanged into Capital
Stock, other than Redeemable Stock of Metrocall.
The foregoing provision will not be violated by reason of
(1) the payment of any dividend within 60 days after declaration thereof if
at the declaration date such payment would have complied with the
foregoing provision,
(2) any payment for the purchase, redemption, acquisition or retirement of
any shares of Capital Stock of Metrocall in exchange for, or out of the
net proceeds of the substantially concurrent sale, other than to a
Subsidiary of Metrocall of other shares of Capital Stock, other than
Redeemable Stock of Metrocall,
(3) the purchase, redemption, defeasance or other acquisition or retirement
of Debt of Metrocall which is subordinate in right of payment to the
notes, in exchange for, by conversion into, or out of the net proceeds
of, a substantially concurrent (a) issuance or sale other than to a
Subsidiary of Capital Stock, other than Redeemable Stock of Metrocall,
or (b) Incurrence of Refinancing Debt with respect to such subordinated
Debt,
(4) Permitted Stock Repurchases by Metrocall not to exceed $2.0 million
individually or $6.0 million in the aggregate during such time as any
of the notes is outstanding,
(5) Restricted Payments consisting of investments in telecommunications
businesses in an aggregate amount not exceeding $20.0 million, or
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(6) the making of other Restricted Payments in an aggregate amount not
exceeding $10.0 million, provided that no Default or Event of Default
shall have occurred and be continuing at the time, or shall occur as a
result, of any of the actions contemplated in items (2) through (6)
above. Any payment made pursuant to items (1) through (4) above, other
than item (3)(b) above, shall be a Restricted Payment for purposes of
calculating aggregate Restricted Payments under the preceding
paragraph.
LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES. Metrocall generally cannot allow its subsidiaries to be subject
to restrictions on their ability to pay money to Metrocall.
Metrocall may not, and may not permit any Subsidiary of Metrocall to, create,
assume or otherwise suffer to exist any encumbrance or restriction on the
ability of any Subsidiary of Metrocall, directly or indirectly,
- to pay dividends or make any other distributions in respect of its
Capital Stock or pay any Debt or other obligation owed to Metrocall or
any other Subsidiary of Metrocall,
- to make loans or advances to Metrocall or any Subsidiary of Metrocall, or
- to transfer any of its property or assets to Metrocall or a Subsidiary of
Metrocall.
Notwithstanding the foregoing, Metrocall may, and may permit any of its
Subsidiaries to, create, assume or otherwise suffer to exist any such
encumbrance or restriction on the ability of any Subsidiary of Metrocall if and
to the extent
- subject to the provisions described under "-- Limitations on Mergers,
Consolidations and Certain Sales of Assets," such encumbrance or
restriction existed prior to the time any Person became a Subsidiary of
Metrocall and such restriction or encumbrance was not incurred in
anticipation of such acquisition of such Person by Metrocall; provided,
however, that such restriction or encumbrance applies only to such
Person, its Subsidiaries and their respective properties and assets, and
is not applicable to any other Person, properties or assets,
- such encumbrance or restriction is contained in an operating lease for
real property and is effective only upon the occurrence and during the
continuance of a default in the payment of rent,
- such encumbrance or restriction is the result of applicable corporate law
or regulation relating to the payment of dividends or distributions,
- such encumbrance or restriction is the result of any applicable statute,
regulation or administrative rule that restricts the transfer of licenses
or permits, or
- such encumbrance or restriction is contained in the Credit Facility on
the date of the Indenture, including any amendment, modification,
supplement, restatement or replacement of such Credit Facility after the
date of the Indenture, provided that the terms and conditions of such
amendment, modification, supplement, restatement or replacement in
respect of such encumbrance or restriction are not less favorable to the
holders of the notes than the terms and conditions in respect of such
encumbrance or restriction of the Credit Facility on the date of the
Indenture.
LIMITATION ON LIENS. Metrocall may not pledge its assets as collateral for any
Debt that ranks equally with the notes, unless the notes also get the benefit of
the pledge.
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Metrocall will not, and will not permit any Subsidiary of Metrocall to, create,
incur, assume or suffer to exist any Lien, other than Permitted Liens, upon or
in respect of any of its property or assets to secure any Debt that is pari
passu with or subordinate in right of payment to the notes, unless the notes are
secured equally and ratably substantially simultaneously with or prior to the
creation, Incurrence or assumption of such Lien; provided, however, that if such
Debt is expressly subordinate to the notes, the Lien securing such subordinated
Debt shall be subordinate and junior to the Lien securing the notes with the
same relative priority as such subordinated Debt shall have with respect to the
notes.
LIMITATION ON TRANSACTIONS WITH AFFILIATES AND RELATED PERSONS. Metrocall may
not enter into transactions with its major stockholders or persons it controls,
is controlled by or is under common control with, unless Metrocall complies with
specified procedures.
Metrocall may not, and may not permit any Subsidiary of Metrocall to, directly
or indirectly, enter into any transaction or series of related transactions on
or after the date of the Indenture with any Affiliate or Related Person, other
than Metrocall or a wholly owned Subsidiary of Metrocall, unless
- such transaction or series of transactions is on terms no less favorable
to Metrocall or such Subsidiary than those that could be obtained in a
comparable arm's-length transaction with an entity that is not an
Affiliate or a Related Person; and
- if such transaction or series of transactions involves aggregate
consideration in excess of $1.0 million, such transaction or series of
transactions is approved by a majority of the Board of Directors of
Metrocall, including the approval of a majority of the independent,
disinterested directors, as fair to Metrocall from a financial point of
view and is evidenced by a resolution of the Board of Directors of
Metrocall, or Metrocall shall have obtained the written opinion of a
nationally recognized independent financial advisor stating that such
transaction or series of transactions is fair to Metrocall from a
financial point of view.
This covenant will not apply to
- transactions between Metrocall or any of its Subsidiaries and any
employee of Metrocall or any of its Subsidiaries that are entered into in
the ordinary course of business,
- the payment of reasonable and customary regular fees and expenses to
directors of Metrocall,
- the making of indemnification, contribution or similar payments to any
director or officer of Metrocall or any Subsidiary of Metrocall under
Metrocall's or such Subsidiary's charter or bylaws or any indemnification
or similar agreement between Metrocall or any such Subsidiary and any of
its directors or officers (collectively, the "Indemnification
Agreements"),
- the entering into any Indemnification Agreements with any current or
future directors or officers of any Subsidiary of Metrocall or
- Restricted Payments other than investments permitted under the
"Limitation on Restricted Payments" covenant.
LIMITATION ON CERTAIN ASSET DISPOSITIONS. Metrocall may not dispose of assets
in excess of $1 million, unless it receives the fair market value for the
assets, at least 80% of the
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consideration is in cash, and all net proceeds are reinvested in the business,
used to repay Senior Debt, or used to repurchase subordinated debt.
Metrocall may not, and may not permit any Subsidiary of Metrocall to, make any
Asset Disposition in one or more transactions unless:
(1) Metrocall or such Subsidiary, as the case may be receives
consideration at the time of such Asset Disposition at least equal
to the fair market value of the assets sold or disposed of as
determined by the Board of Directors of Metrocall;
(2) at least 80% of the consideration for such Asset Disposition
consists of cash or readily marketable cash equivalents or the
assumption of Senior Debt or Debt of Metrocall that ranks pari
passu in right of payment with the notes ("pari passu Debt") to
the extent that Metrocall is released in writing from all
liability on such Senior Debt or pari passu Debt; and
(3) all Net Available Proceeds of such Asset Disposition, less any
amounts invested within 180 days of such Asset Disposition in
assets related to the business of Metrocall or invested within one
year of such Asset Disposition in assets related to the business
of Metrocall, pursuant to an agreement to make such investment
entered into within 180 days of such Asset Disposition, are
applied within such 180- or 360- day period, (a) to the permanent
reduction of any Debt then outstanding under the Credit Facility,
(b) to the repayment of any other Senior Debt, or (c) to the
extent Net Available Proceeds are not applied in accordance with
the foregoing clause (a) or (b), to make an offer to purchase, on
a pro rata basis according to their respective principal amounts
then outstanding or accreted value, in the case of Debt issued
with original issue discount, the outstanding notes and/or pari
passu Debt, at 100% of their principal amount or accreted value,
as the case may be, plus accrued interest to the date of the
purchase.
Notwithstanding clause (c) of the preceding paragraph, Metrocall shall not be
required to offer to purchase notes or other pari passu Debt until the Net
Available Proceeds from any Asset Disposition together with the Net Available
Proceeds from any prior Asset Disposition not otherwise applied in accordance
with clauses (a), (b) or (c) of the preceding paragraph, less any amounts
invested within 180 days, or 360 days, as the case may be, after such
disposition or dispositions in assets related to the business of Metrocall,
exceed $5.0 million. To the extent that the aggregate purchase price of the
notes tendered pursuant to such an offer to purchase is less than the aggregate
purchase price offered in such offer, Metrocall may use such shortfall for
general corporate purposes. Metrocall shall not be entitled to any credit
against such obligation to purchase notes for the principal amount of any notes
acquired by Metrocall other than pursuant to such offer to purchase.
Upon completion of any such offer, the amount of Net Available Proceeds shall be
deemed to be reset at zero. If, within 180 days after an Asset Disposition,
Metrocall or a Subsidiary enters into a contract providing for the investment of
Net Available Proceeds in assets relating to the business of Metrocall and such
contract is terminated without fault on part of Metrocall or such Subsidiary
prior to the making of such investment, Metrocall or such Subsidiary, as the
case may be, shall within 90 days after the termination of such agreement, or
within 180 days after such Asset Disposition, whichever is later, invest or
otherwise apply the funds that were to be invested pursuant to such agreement in
accordance with the preceding paragraph, and any funds so invested or applied
shall for all
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purposes hereof be deemed to have been so invested or applied within the 180- or
360-day period provided for in the preceding paragraph. These provisions will
not apply to a transaction which is permitted under the provisions described
under "-- Limitation on Mergers, Consolidations and Certain Sales of Assets."
The provisions of this covenant shall not apply to any Asset Disposition which
is part of an Asset Exchange Transaction if
- the Board of Directors of Metrocall shall determine that the Asset
Exchange Transaction is fair and reasonable to, and in the best interests
of, Metrocall, which determination shall be evidenced by a resolution of
the Board of Directors of Metrocall filed with the Trustee and
- in the event that such transfer is made to an Affiliate or Related
Person, Metrocall shall have complied with the provisions of the covenant
described under "-- Limitation on Transactions with Affiliates and
Related Persons."
LIMITATION ON ISSUANCES AND SALES OF CAPITAL STOCK OF SUBSIDIARIES. Metrocall
may not sell Capital Stock of a Subsidiary, unless the sale is of all Capital
Stock of that Subsidiary and unless it complies with rules applicable to asset
dispositions. Metrocall may not allow a Subsidiary to issue shares of its
Capital Stock, subject to limited exceptions described below.
Metrocall
- shall not, and shall not permit any Subsidiary of Metrocall to, transfer,
convey, sell, lease or otherwise dispose of any Capital Stock of such or
any other Subsidiary to any Person, other than Metrocall or a Subsidiary
of Metrocall unless such transfer, conveyance, sale, lease or other
disposition is of all the Capital Stock of such Subsidiary owned by
Metrocall or such other Subsidiary and the Net Available Proceeds from
such transfer, conveyance, sale, lease or other disposition are applied
in accordance with the provisions described under "-- Limitation on
Certain Asset Dispositions" and
- shall not permit any Subsidiary to issue shares of its Capital Stock,
other than directors' qualifying shares and shares of Common Stock, or
securities convertible into, or warrants, rights or options to subscribe
for or purchase shares of, its Capital Stock to any Person other than
Metrocall or a Subsidiary of Metrocall; provided that any Subsidiary may
issue warrants, rights or options to subscribe for or purchase shares of
its Common Stock.
LIMITATION ON MERGERS, CONSOLIDATIONS AND CERTAIN SALES OF ASSETS. Metrocall
may not merge or consolidate with other companies unless it is not in default
under the notes, the surviving corporation assumes its obligations under the
Indenture, and Metrocall could incur additional Debt under the debt covenant
described under "Covenants -- Limitation on Incurrence of Debt."
Metrocall
- may not consolidate with or merge into any other Person or permit any
other Person to consolidate with or merge into Metrocall or any
Subsidiary of Metrocall in a transaction in which such Subsidiary remains
a Subsidiary of Metrocall and
- may not, directly or indirectly, transfer, convey, sell, lease or
otherwise dispose of all or substantially all of its assets,
unless, in either such case:
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- immediately before and after giving effect to such transaction and
treating any Debt Incurred by Metrocall or a Subsidiary of Metrocall as a
result of such transaction as having been Incurred by Metrocall or such
Subsidiary at the time of the transaction, no Event of Default or event
that with the passing of time or the giving of notice, or both, would
constitute an Event of Default, shall have occurred and be continuing,
- in a transaction in which Metrocall does not survive or in which
Metrocall conveys, sells, leases or otherwise disposes of all or
substantially all of its assets, the successor entity to Metrocall is
organized under the laws of the United States or any State thereof or the
District of Columbia and expressly assumes, by a supplemental Indenture
executed and delivered to the Trustee in form satisfactory to the
Trustee, all of Metrocall's obligations under the Indenture, and
- immediately after giving effect to such transaction, Metrocall or the
successor entity to Metrocall could incur at least $1.00 of additional
Debt pursuant to the first paragraph of the covenant described under
"-- Limitation on Incurrence of Debt" above, or would have a lower
positive ratio of the aggregate principal amount of Debt of Metrocall and
its Subsidiaries outstanding as of the date of such Incurrence to 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 Debt had been Incurred and the proceeds thereof had been applied at
the beginning of such fiscal quarter.
Notwithstanding the preceding paragraph, any wholly owned Subsidiary may
consolidate with, merge into or transfer all or part of its properties and
assets to Metrocall.
CHANGE OF CONTROL
Upon a Change of Control, Metrocall is required to make an offer to purchase the
notes. The purchase price will equal 101% of the principal amount of the notes
on the date of purchase, plus accrued interest. A Change of Control includes
- acquisition of a majority of Metrocall's voting stock by a person or
group,
- replacement of a majority of the board of directors by directors not
elected or nominated by two-thirds of the existing board,
- disposition of all, or substantially all, of Metrocall's assets,
- mergers that result in a person or group acquiring a majority of
Metrocall voting stock,
- adoption of a plan of liquidation or dissolution.
Upon a Change of Control, Metrocall will be required to make an offer to
purchase the notes at a purchase price equal to 101% of their principal amount,
plus accrued interest, pursuant to the offer described in the immediately
following paragraph (the "Change of Control Offer"). The definition of Change of
Control includes any sale, lease, exchange or other transfer of "all, or
substantially all" the assets of Metrocall to any person or entity or group of
persons or entities other than any wholly owned Subsidiary of Metrocall.
Although there is a developing body of caselaw interpreting the phrase
"substantially all", there is no precise established definition of the phrase
under applicable law. Accordingly, the ability of a holder of notes to require
Metrocall to make a Change of Control Offer as a result of the sale, lease,
exchange or other transfer of less than all of the assets of Metrocall may be
uncertain.
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Within 30 days following any Change of Control, Metrocall shall mail a notice to
each holder, with a copy to the Trustee, stating:
- that a Change of Control has occurred and that such holder has the right
to require Metrocall to repurchase such holder's notes, in whole or in
part, equal to $1,000 or integral multiples of $1,000, at a repurchase
price in cash equal to 101% of the principal amount thereof plus accrued
and unpaid interest, if any, to the date of repurchase,
- the circumstances and relevant facts regarding such Change of Control,
including, to the extent known to Metrocall, relevant information with
respect to the transaction giving rise to such Change of Control and, if
applicable, information with respect to pro forma historical income, cash
flow and capitalization after giving effect to such Change of Control,
- the repurchase date, which shall be not earlier than 30 days or later
than 60 days from the date such notice is mailed (the "Repurchase Date"),
- that any note not tendered will continue to accrue interest,
- that any note accepted for payment pursuant to the Change of Control
Offer shall cease to accrue interest after the Repurchase Date unless
Metrocall defaults in payment of the purchase price,
- that holders electing to have a note purchased pursuant to a Change of
Control Offer will be required to surrender the note, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the note
completed, to the paying agent which may be Metrocall at the address
specified in the notice prior to the close of business on the Repurchase
Date,
- that holders will be entitled to withdraw their election if the paying
agent receives, not later than the close of business on the third
business day preceding the Repurchase Date, a telegram, telex, facsimile
transmission or other written communication setting forth the name of the
holder, the principal amount of notes the holder delivered for purchase,
and a statement that such holder is withdrawing his election to have such
notes purchased, and
- that holders which elect to have their notes purchased only in part will
be issued new notes in a principal amount equal to the unpurchased
portion of the notes surrendered.
On the Repurchase Date, Metrocall shall accept for payment notes or portions
thereof tendered pursuant to the Change of Control Offer, deposit with the
Trustee or a paying agent money sufficient to pay the purchase price of all
notes or portions thereof so tendered and deliver or cause to be delivered to
the Trustee notes so accepted, together with an officers' certificate indicating
the notes or portions thereof which have been tendered to Metrocall. The Trustee
or a paying agent shall promptly mail to the holders of notes so accepted
payment in an amount equal to the purchase price therefor and promptly
authenticate and mail to such holders a new note in a principal amount equal to
any unpurchased portion of the note surrendered. Metrocall will publicly
announce the results of the Change of Control Offer on or as soon as practicable
after the Repurchase Date.
In the event a Change of Control occurs and any repurchase pursuant to the
foregoing constitutes a "tender offer" for purposes of Rule 14e-1 under the
Exchange Act, Metrocall will comply with the requirements of Rule 14e-l as then
in effect, to the extent applicable, and any other applicable securities laws or
regulations with respect to such repurchase. The
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Change of Control provisions described above may deter certain mergers, tender
offers and other takeover attempts involving Metrocall.
Metrocall's ability to repurchase notes upon a Change of Control may be limited
by the terms of its then existing contractual obligations. Repurchase of the
notes upon a Change of Control may constitute a default under the Credit
Facility, and any future credit agreements or other agreements relating to
Senior Debt may contain provisions that would restrict Metrocall's ability to
repurchase notes upon a change in control. If Metrocall makes a Change of
Control Offer following a Change of Control, Metrocall may not have adequate
financial resources to repurchase all notes tendered. Metrocall's failure to
repurchase tendered notes or to make a Change of Control Offer following a
Change of Control would constitute an Event of Default under the Indenture, but
the subordination provisions in the Indenture may restrict payments to the
holders of notes.
The provisions of the Indenture may not afford holders of the notes protection
in the event of a highly leveraged transaction involving Metrocall that may
adversely affect the holders of the notes, if such transaction does not result
in a Change of Control, violate the covenant described under "-- Limitation on
Incurrence of Debt," or otherwise violate the Indenture.
REPORTS
So long as any of the notes are outstanding, Metrocall will file with the SEC
the annual reports, quarterly reports and other documents that Metrocall would
have been required to file with the SEC pursuant to Section 13(a) or 15(d) of
the Exchange Act, if Metrocall were subject to these sections and will also
provide to all holders of the notes and file with the Trustee copies of such
reports.
EVENTS OF DEFAULT
Metrocall will be in default, and the noteholders can call the notes, upon the
occurrence of certain events. These include failure to pay principal of or
interest on any note when due, breaches of covenants, defaults under other
indebtedness, failure to pay judgments and bankruptcy. Metrocall will be in
default if it does not make payments when due, violates covenants, fails to pay
other debt when due, fails to pay judgments when due, or goes bankrupt.
Bankruptcy causes automatic acceleration of the notes. Any other Event of
Default will give the trustee or 25% of the holders the right to call the notes.
The following are Events of Default with respect to the notes:
- failure to pay any interest on any note when due, and continuance of such
failure for 30 days,
- failure to pay principal of, or premium, if any, on any note when due,
- failure to pay principal of, premium, if any, and interest on notes
required to be purchased pursuant to an offer to purchase as described
under "-- Limitation on Certain Asset Dispositions" or a Change of
Control Offer as described under "-- Change of Control" when due and
payable,
- failure to perform or comply with the provisions described under
"-- Limitation on Mergers, Consolidations and Certain Sales of Assets",
- failure to perform or breach of any other covenant or warranty of
Metrocall in the Indenture, continued for 60 days after written notice
from the Trustee or holders of
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at least 25% in aggregate principal amount of the outstanding notes as
provided in the Indenture,
- the occurrence of a default under any bonds, debentures, notes or other
evidences of indebtedness of Metrocall or any Subsidiary of Metrocall 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
Metrocall or any Subsidiary of Metrocall, in any case with a principal
amount of at least $5.0 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,
- the rendering of a final judgment or judgments (not subject to appeal)
against Metrocall or any of its Subsidiaries in an aggregate amount in
excess of $5.0 million which remain unstayed, in effect and unpaid for a
period of 60 consecutive days thereafter, and
- certain events of bankruptcy, insolvency or reorganization affecting
Metrocall or any Significant Subsidiary of Metrocall.
Subject to the provisions of the Indenture relating to the duties of the Trustee
in case an Event of Default shall occur and be continuing, the Trustee will be
under no obligation to exercise any of its rights or powers under the Indenture
at the request or direction of any of the holders, unless such holders shall
have offered to the Trustee reasonable indemnity. Subject to such provisions for
the indemnification of the Trustee, the holders of a majority in aggregate
principal amount of the outstanding notes will have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee or exercising any trust or power conferred on the Trustee.
If an Event of Default, other than Events of Default with respect to certain
events of bankruptcy, insolvency or reorganization affecting Metrocall or any
Significant Subsidiary of Metrocall, shall occur and be continuing, either the
Trustee or the holders of at least 25% in aggregate principal amount of the
outstanding notes may accelerate the maturity of all notes; provided, however,
that after such acceleration, but before a judgment or decree based on
acceleration, the holders of a majority in aggregate principal amount of
outstanding notes, may under certain circumstances, rescind and annul such
acceleration if all Events of Default, other than the non-payment of accelerated
principal, have been cured or waived as provided in the Indenture. If a
specified Event of Default with respect to certain events of bankruptcy,
insolvency or reorganization affecting Metrocall or any Subsidiary of Metrocall
occurs, the principal of the notes then outstanding shall become immediately due
and payable without any declaration or other act on the part of the Trustee or
any holder of the notes. For information as to waiver of defaults, see
"-- Modification and Waiver."
No holder of any note will have any right to institute any proceeding with
respect to the Indenture or for any remedy thereunder, unless such holder shall
have previously given to the Trustee written notice of a continuing Event of
Default and unless also the holders of at least 25% in aggregate principal
amount of the outstanding notes shall have made written request, and offered
reasonable indemnity, to the Trustee to institute such proceeding as trustee,
and the Trustee shall not have received from the holders of a majority in
aggregate principal amount of the outstanding notes a direction inconsistent
with such request and shall have failed to institute such proceeding within 60
days. However, such limitations do not apply to a suit instituted by a holder of
a note for
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enforcement of payment of the principal of, premiums, if any, or interest on
such note or after the respective due dates expressed in such note.
Metrocall is required to furnish to the Trustee annually a statement as to the
performance by Metrocall of certain of its obligations under the Indenture and
as to any default in such performance. Additionally, Metrocall is required to
notify the Trustee within five business days of the occurrence of a Default or
an Event of Default.
DEFEASANCE
Metrocall can be relieved of its obligations under the Indenture if it deposits
with the Trustee sufficient money or government securities to pay the principal
of and interest on the notes when they become due.
The Indenture provides that (1) if applicable, Metrocall will be discharged from
any and all obligations in respect of the outstanding notes, including the
provisions described under "-- Ranking" or (2) if applicable, and subject to
compliance with the Trust Indenture Act, Metrocall may omit to comply with
certain restrictive covenants, and that such omission shall not be deemed to be
an Event of Default under the Indenture and the notes, in either case (1) or (2)
upon irrevocable deposit with the Trustee, in trust, of money and/or U.S.
government obligations which will provide money in an amount sufficient in the
opinion of a nationally recognized firm of independent certified public
accountants to pay the principal of and premium, if any, and each installment of
interest, if any, on the outstanding notes.
With respect to clause (2), the obligations under the Indenture other than with
respect to such covenants and the Events of Default other than the Event of
Default relating to such covenants shall remain in full force and effect. Such
trust may only be established if, among other things,
- with respect to clause (1), Metrocall has received from, or there has
been published by, the Internal Revenue Service a ruling or there has
been a change in law, which in an opinion of counsel to Metrocall
provides that holders of the notes will not recognize income, gain or
loss for Federal income tax purposes as a result of such deposit,
defeasance and discharge and will be subject to Federal income tax on the
same amount, in the same manner and at the same times as would have been
the case if such deposit, defeasance and discharge had not occurred; and,
with respect to clause (2), Metrocall has delivered to the Trustee an
opinion of counsel to Metrocall to the effect that the holders of the
notes will not recognize gain or loss for Federal income tax purposes as
a result of such deposit and defeasance and will be subject to Federal
income tax on the same amount, in the same manner and at the same times
as would have been the case if such deposit and defeasance had not
occurred,
- no Default or Event of Default shall have occurred and be continuing,
- no default on any Senior Debt shall have occurred and be continuing, and
- certain other customary conditions precedent are satisfied.
MODIFICATION AND WAIVER
The Indenture can generally be modified or its provisions waived, with the
consent of holders of a majority of principal amount of the notes. Some changes
require the consent of all affected holders of notes.
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Metrocall and the Trustee may modify and amend the Indenture with the consent of
the holders of a majority in aggregate principal amount of the outstanding
notes, subject to the following conditions. Absent the consent of the holders of
all outstanding notes affected by the change, no modification or amendment may:
- change the stated maturity of the principal of, or any installment of
interest on, any note,
- reduce the principal amount of or the premium or interest on, any note,
- change the place or currency of payment of principal of or the premium or
interest on, any note,
- impair the right to institute suit for the enforcement of any payment on
or with respect to any note,
- reduce the above-stated percentage of outstanding notes necessary to
modify or amend the Indenture,
- reduce the percentage of aggregate principal amount of outstanding notes
necessary for waiver of compliance with certain provisions of the
Indenture or for waiver of certain defaults,
- modify any provisions of the Indenture relating to the modification and
amendment of the Indenture or the waiver of past defaults or covenants,
- modify any of the provisions of the Indenture relating to the
subordination of the notes in a manner adverse to such holders, or
- following the mailing of an offer with respect to an offer to purchase
the notes as described under "-- Limitation on Certain Asset
Dispositions" or a Change of Control Offer as described under "-- Change
of Control," modify the Indenture with respect to such offer to purchase
in a manner adverse to such holders.
The holders of a majority in aggregate principal amount of the outstanding notes
may waive compliance by Metrocall with certain restrictive provisions of the
Indenture. The holders of a majority in aggregate principal amount of the
outstanding notes may waive any past default under the Indenture, except a
default in the payment of principal, premium, if any, or interest.
NO RECOURSE AGAINST OTHERS
Noteholders have no legal recourse under the notes or the Indenture against
Metrocall's directors, officers, employees or stockholders.
The Indenture provides that a director, officer, employee or stockholder of
Metrocall, as such, shall not have any liability for any obligations of
Metrocall under the notes or the Indenture, or for any claim based on, in
respect of or by reason of such obligations or their creation. Each holder, by
accepting the notes, waives and releases all such liability.
THE TRUSTEE
The duties, rights, powers and limitations of the Trustee are governed by the
Indenture.
The Indenture provides that, except during the continuance of an Event of
Default, the Trustee will perform only such duties as are specifically set forth
in the Indenture. During the continuance of an Event of Default, the Trustee
will exercise such rights and powers vested in it under the Indenture and use
the same degree of care and skill in its exercise as
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a prudent person would exercise under the circumstances in the conduct of such
person's own affairs.
The Indenture contains limitations on the rights of the Trustee, should it
become a creditor of Metrocall, to obtain payment of claims in certain cases or
to realize on certain property received by it in respect of any such claim as
security or otherwise. The Trustee is permitted to engage in other transactions
with Metrocall or any Affiliate; provided, however, that if it acquires any
conflicting interest, as defined in the Indenture or in the Trust Indenture Act,
it must eliminate such conflict or resign.
BOOK-ENTRY; DELIVERY AND FORM
New notes exchanged for old notes will be held in book-entry form by The
Depository Trust Company. DTC and its participants will maintain the records of
beneficial ownership of the notes and of transfers of the notes.
New notes exchanged for old notes will be represented by one or more permanent
global notes in definitive, fully registered form, deposited with a custodian
for, and registered in the name of a nominee of, The Depository Trust Company.
Beneficial interests in permanent global notes will be shown on, and transfers
will be effected through, records maintained by DTC and its participants.
The certificates representing the new notes will be issued in fully registered
form without interest coupons. New notes received in the exchange offer in
exchange for old notes originally issued in reliance on Rule 144A will be
represented by one or more permanent global notes in definitive, fully
registered form without interest coupons (each a "Restricted Global Note") and
will be deposited with the Trustee as custodian for, and registered in the name
of a nominee of, DTC.
New notes exchanged in offshore transactions in reliance on Regulation S under
the Securities Act will initially be represented by one or more permanent global
notes in definitive, fully registered form without interest coupons (each a
"Regulation S Global Note"; and together with the Restricted Global Note, the
"Global Notes") and will be deposited with the Trustee as custodian for, and
registered in the name of a nominee of, DTC for the accounts of Euroclear and
Cedel Bank.
Ownership of beneficial interests in a Global Note will be limited to persons
who have accounts with DTC ("participants") or persons who hold interests
through participants. Ownership of beneficial interests in a Global Note will be
shown on, and the transfer of that ownership will be effected only through,
records maintained by DTC or its nominee with respect to interests of
participants and the records of participants with respect to interests of
persons other than participants. Qualified institutional buyers may hold their
interests in a Restricted Global Note directly through DTC, if they are
participants in such system, or indirectly through organizations which are
participants in such system.
Investors may hold their interests in a Regulation S Global Note directly
through Cedel Bank or Euroclear, if they are participants in such systems, or
indirectly through organizations that are participants in such system. Cedel
Bank and Euroclear will hold interests in the Regulation S Global Notes on
behalf of their participants through DTC.
So long as DTC, or its nominee, is the registered owner or holder of a Global
Note, DTC or such nominee, as the case may be, will be considered the sole owner
or holder of the new notes represented by such Global Note for all purposes
under the Indenture and the new notes. No beneficial owner of an interest in a
Global Note will be able to transfer that
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interest except in accordance with DTC's applicable procedures, in addition to
those provided for under the Indenture and, if applicable, those of Euroclear
and Cedel Bank.
Payments of the principal of, and interest on, a Global Note will be made to DTC
or its nominee, as the case may be, as the registered owner thereof. Neither
Metrocall, the Trustee nor any Paying Agent will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests in a Global Note or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
Metrocall expects that DTC or its nominee, upon receipt of any payment of
principal or interest in respect of a Global Note, will credit participants'
accounts with payments in amounts proportionate to their respective beneficial
interests in the principal amount of such Global Note as shown on the records of
DTC or its nominee. Metrocall also expects that payments by participants to
owners of beneficial interests in such Global Note held through such
participants will be governed by standing instructions and customary practices,
as is now the case with securities held for the accounts of customers registered
in the names of nominees for such customers. Such payments will be the
responsibility of such participants.
Transfers between participants in DTC will be effected in the ordinary way in
accordance with DTC rules and will be settled in same-day funds. Transfers
between participants in Euroclear and Cedel Bank will be effected in the
ordinary way in accordance with their respective rules and operating procedures.
Metrocall expects that DTC will take any action permitted to be taken by a
holder of new notes, including the presentation of notes for exchange as
described below, only at the direction of one or more participants to whose
account the DTC interests in a Global Note is credited and only in respect of
such portion of the aggregate principal amount of new notes as to which such
participant or participants has or have given such direction. However, if there
is an Event of Default under the notes, DTC will exchange the applicable Global
Note for certificated notes, which it will distribute to its participants and
which may bear legends restricting their transfer.
DEPOSITORY TRUST COMPANY
DTC will facilitate the exchange of new notes for old notes in the exchange
offer using its standard procedures. Neither Metrocall nor the Trustee is
responsible for DTC's performance of its obligations.
Metrocall understands that DTC is a limited purpose trust company organized
under the laws of the State of New York, a "banking organization" within the
meaning of New York Banking Law, a member of the Federal Reserve System, a
"clearing corporation" within the meaning of the Uniform Commercial Code and a
"Clearing Agency" registered pursuant to the provisions of Section 17A of the
Exchange Act. DTC was created to hold securities for its participants and
facilitate the clearance and settlement of securities transactions between
participants through electronic book-entry changes in accounts of its
participants, thereby eliminating the need for physical movement of certificates
and certain other organizations. Indirect access to the DTC system is available
to others such as banks, brokers, dealers and trust companies that clear through
or maintain a custodial relationship with a participant, either directly or
indirectly ("indirect participants").
Although DTC, Euroclear and Cedel Bank are expected to follow the foregoing
procedures in order to facilitate transfers of interests in a Global Note among
participants of DTC,
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Euroclear and Cedel Bank, they are under no obligation to perform or continue to
perform such procedures, and such procedures may be discontinued at any time.
Neither Metrocall nor the Trustee will have any responsibility for the
performance by DTC, Euroclear or Cedel Bank or their respective participants or
indirect participants of their respective obligations under the rules and
procedures governing their operations.
If DTC is at any time unwilling or unable to continue as a depositary for the
Global Notes and a successor depositary is not appointed by Metrocall within 90
days, Metrocall will issue certificated notes, which may bear legends
restricting their transfer, in exchange for the Global Notes. Holders of an
interest in a Global Note may receive certificated notes, which may bear legends
restricting their transfer, in accordance with the DTC's rules and procedures in
addition to those provided for under the Indenture.
REGISTRAR AND TRANSFER AGENT
The Trustee will act as registrar and transfer agent for the new notes.
As described under "-- The Depository Trust Company," so long as the new notes
are in book-entry form, registration of transfers and exchanges of new notes
will be made through participants and indirect participants in DTC. If physical
certificates representing the new notes are issued, registration of transfers
and exchanges of new notes will be effected without charge by or on behalf of
Metrocall, but, in the case of a transfer, upon payment, with the giving of such
indemnity as Metrocall may require, in respect of any tax or other governmental
charges which may be imposed in relation to it.
Metrocall will not be required to register or cause to be registered any
transfer of new notes during a period beginning 15 days prior to the mailing of
notice of redemption of new notes and ending on the day of such mailing.
DESCRIPTION OF THE OLD NOTES
The terms of the old notes are identical in all material respects to those of
the new notes, except that the old notes.
- have not been registered under the Securities Act and accordingly,
contain certain transfer restrictions,
- are entitled to certain registration rights under the registration rights
agreement which rights will terminate upon consummation of the exchange
offer and
- are entitled under the registration rights agreement to an increase in
the rate of interest payments if Metrocall fails to comply with certain
terms of the registration rights agreement. Relevant terms of the
registration rights agreement are described more fully below.
REGISTRATION RIGHTS
Metrocall agreed with the placement agents, for the benefit of the holders of
the notes, that it will use its best efforts, at its cost, to file and cause to
become effective a registration statement with respect to the exchange offer.
The exchange offer will effectuate an exchange of the old notes for an issue of
new notes with terms identical to the old notes, except that the new notes will
not bear legends restricting the transfer thereof or include provisions for
additional interest. Upon such registration statement being declared effective,
Metrocall will offer the new notes in return for surrender of the old notes. The
exchange offer will remain open for not less than 20 business days after the
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date notice of the exchange offer is mailed to holders. For each old note
surrendered under the exchange offer, the holder will receive a new note of
equal principal amount.
In the event that applicable interpretations of the SEC staff do not permit the
exchange offer, or under certain other circumstances, Metrocall will, at its
cost, use its best efforts to cause to become effective a shelf registration
statement with respect to resales of the notes and to keep such shelf
registration statement effective until the expiration of the time period
referred to in Rule 144(k) under the Securities Act after the initial sale of
notes, or such shorter period that will terminate when all notes covered by the
shelf registration statement have been sold pursuant to the shelf registration
statement. Metrocall shall, in the event of such a shelf registration, provide
to each holder copies of the prospectus, notify each holder when the shelf
registration statement for the notes has become effective and take other actions
as are required to permit resales of the notes. A holder that sells its notes
pursuant to the shelf registration statement generally will be required to be
named as a selling security holder in the related prospectus and to deliver a
prospectus to purchasers, will be subject to civil liability provisions under
the Securities Act in connection with such sales and will be bound by the
provisions of the registration rights agreement that are applicable to such a
holder, including certain indemnification obligations.
In the event that the exchange offer is not consummated and a shelf registration
statement is not declared effective on or prior to June 22, 1999, the annual
interest rate borne by the notes will be increased by .5% until the exchange
offer is consummated or the shelf registration statement is declared effective.
TRANSFER RESTRICTIONS
The old notes have not been registered under the Securities Act and may not be
offered or sold within the United States or to, or for the account or benefit
of, U.S. persons except pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act.
MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following discussion was prepared by Metrocall's tax counsel, Wilmer, Cutler
& Pickering. Tax counsel has provided an opinion to Metrocall that, based on and
subject to the matters described in its opinion letter, the following discussion
is the opinion of Tax counsel with respect to the material United States federal
income tax consequences of the purchase, ownership and disposition of the new
notes and the exchange of old notes for new notes. This discussion is based on
the following legal authorities: (1) the Internal Revenue Code of 1986, as
amended, (2) existing and proposed U.S. Treasury regulations, and (3)
administrative and judicial rulings.
The Internal Revenue Service may interpret these authorities differently and
these authorities could be changed with retroactive application. Thus, the
actual tax consequences may differ from the treatment described below.
This discussion may not apply to all holders of new notes because:
- the tax treatment of a holder of new notes may vary depending on the
holder's particular situation;
- this discussion does not address the tax consequences to subsequent
purchasers of the new notes, and is limited to investors who will hold
the new notes as capital assets, as defined in Section 1221 of the
Internal Revenue Code;
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- this discussion does not discuss the tax consequences to holders that may
be subject to special tax rules, such as certain financial institutions,
insurance companies, tax exempt entities, dealers in securities or
foreign currencies or persons who hold the notes as a position in a
straddle or as part of a "conversion transaction" or who have hedged the
interest rate on the notes;
- this discussion does not address all aspects of United States federal
income taxation that may be relevant to holders of the notes in light of
their particular circumstances; and
- this discussion does not address any tax consequences arising under the
laws of any state, local or foreign taxing jurisdiction.
Because this discussion may not apply to all new notes holders, prospective
holders should consult their own tax advisors as to the particular tax
consequences to them of acquiring, holding or disposing of the new notes.
CERTAIN DEFINITIONS
A "United States Holder" of a note means:
- a citizen or resident of the United States, including certain former
citizens and former long-time residents,
- a corporation, partnership or other entity created or organized under the
laws of the United States or any political subdivision,
- an estate if its income is subject to United States federal income
taxation, or
- a trust if (1) a U.S. court is able to exercise primary supervision over
the administration of the trust and (2) one or more U.S. persons have the
authority to control all substantial decisions of the trust.
A "Foreign Holder" is a holder that is not a United States Holder.
The term "note(s)" by itself refers to both new notes and exchanged old notes.
CONSEQUENCES OF THE EXCHANGE OFFER
There will be no federal income tax consequences for holders who exchange old
notes for new notes. An exchange of old notes for new notes pursuant to the
exchange offer will not be treated as an "exchange" for federal income tax
purposes because the new notes are not materially different from the old notes.
Rather, the new notes will be treated as a continuation of the old notes.
Exchanging holders will have the same tax basis and holding period in the new
notes as they had in the old notes.
STATED INTEREST ON NOTES
Interest on a note will generally be taxable to a United States Holder as
ordinary income from domestic sources at the time it is paid or accrued, in
accordance with the United States Holder's method of accounting for tax
purposes. Certain exceptions to this general rule are set forth below.
MARKET DISCOUNT
If a United States Holder purchases a note for an amount that is less than its
principal amount, the amount of the difference will be treated as "market
discount" for U.S. federal
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income tax purposes, unless such difference is less than a specified minimal
amount. The United States Holder will be required to treat any partial principal
payment on, or any gain on the disposition of, a note as ordinary income to the
extent of the market discount, unless such amount has previously been included
in the income of that holder. In addition, the United States Holder may be
required to defer the deduction of a portion of the interest expense on any debt
incurred or continued to purchase or carry such note until the earlier of the
note's maturity or the holder's taxable disposition of the note.
Any market discount will be considered to accrue ratably during the period from
the date of acquisition to the maturity date of the note, unless the United
States Holder elects to accrue on a constant interest method. A United States
Holder may elect to include market discount in income currently as it accrues
(on either a ratable or constant interest method), in which case the rule
described above regarding deferral of interest deductions will not apply. This
election to include market discount in income currently, once made, applies to
all market discount obligations acquired on or after the first taxable year to
which the election applies and may not be revoked without the consent of the
Internal Revenue Service.
AMORTIZABLE BOND PREMIUM
A United States Holder that purchases a note for more than the principal amount
will be considered to have purchased the note at a "premium." A United States
Holder generally may elect to amortize the premium over the remaining term of
the note on a constant yield method. However, if the note may be optionally
redeemed for more than its principal amount at the time it is purchased, the
amortization of the premium might have to be deferred. The amount amortized for
a year will be treated as a reduction of interest income from the note. If the
United States Holder does not elect amortization, the premium will decrease the
gain or increase the loss otherwise recognized upon the disposition of the note.
The election to amortize premium on a constant yield method, once made, applies
to all debt obligations held or acquired by the electing United States Holder on
or after the first day of the first taxable year to which the election applies
and may not be revoked without the consent of the Internal Revenue Service.
OPTIONAL REDEMPTION OR REPAYMENT
Under applicable Treasury regulations, certain redemption rights and obligations
which significantly increase the likelihood of redemption may affect the imputed
yield of an obligation and create original issue discount ("OID"). Upon the
occurrence of certain events, the notes may be redeemed before their stated
maturity at the option of either Metrocall or the holder, or automatically under
the terms of the notes. Metrocall believes that the redemption rights and
obligations do not significantly increase the likelihood of redemption and do
not affect the yield of the note. Therefore, in the opinion of Tax Counsel, the
redemption rights and obligations do not create OID.
SALE, EXCHANGE AND RETIREMENT OF NOTES
When a United States Holder disposes of a note, that holder generally will
recognize capital gain or loss equal to the difference between:
(A) the amount of cash and the fair market value of any property
received, except to the extent such amount is attributable to
accrued and unpaid interest which is taxable as ordinary income,
and
(B) such holder's adjusted tax basis in the note.
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A United States Holder's adjusted tax basis in a note will, in general, be:
- the cost of the note,
- increased by any market discount previously included in such
holder's income, and
- reduced by any amortized premium previously deducted from income by
that holder.
Such capital gain or loss generally will be long-term capital gain or loss if
the holding period of the note exceeds one year at the time of the disposition.
Certain noncorporate taxpayers, including individuals, are eligible for
preferential rates of taxation of such long-term capital gain. The deductibility
of capital losses is subject to limitations.
FOREIGN HOLDERS
The exchange of an old note by a Foreign Holder for a new note will not
constitute a taxable exchange. A Foreign Holder will have the same tax basis and
holding period in the new note as it did in the old note.
Any gain or income realized on the disposition of a note by a Foreign Holder
generally will not be subject to U.S. federal income tax provided (A) such gain
is not effectively connected with the conduct by such holder of a trade or
business in the United States, and (B) in the case of gains realized by an
individual, such individual is not present in the United States for 183 days or
more in the taxable year of the disposition.
Under present United States federal income and estate tax law, and subject to
the discussion below concerning backup withholding:
(1) no United States federal withholding tax will be imposed with
respect to the payment by Metrocall or the paying agent of
principal, premium, if any, or interest on a note owned by a
Foreign Holder (the "Portfolio Interest Exception"), provided:
- that such Foreign Holder does not actually or constructively own
10% or more of the total combined voting power of all classes of
stock of Metrocall entitled to vote within the meaning of section
871(h)(3) of the Internal Revenue Code and the regulations
thereunder,
- such Foreign Holder is not a controlled foreign corporation that
is related, directly or indirectly, to Metrocall through stock
ownership,
- such Foreign Holder is not a bank whose receipt of interest on a
note is described in section 881(c)(3)(A) of the Internal Revenue
Code, and
- such Foreign Holder satisfies the statement requirement
(described generally below) set forth in section 871(h) and
section 881(c) of the Internal Revenue Code and the regulations
thereunder;
(2) no United States federal withholding tax will be imposed generally
with respect to any gain or income realized by a Foreign Holder
upon the disposition of a note; and
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<PAGE> 58
(3) a note beneficially owned by an individual who at the time of
death is a Foreign Holder will not be subject to United States
federal estate tax as a result of such individual's death,
provided that:
- such individual does not actually or constructively own 10% or
more of the total combined voting power of all classes of stock
of Metrocall entitled to vote within the meaning of section
871(h)(3) of the Internal Revenue Code, and
- the interest payments with respect to such note would not have
been, if received at the time of such individual's death,
effectively connected with the conduct of a United States trade
or business by such individual.
To satisfy the statement requirement referred to in (1) above, the beneficial
owner of such note, or a financial institution holding the note on behalf of
such owner, must provide, in accordance with specified procedures, a paying
agent of Metrocall with a statement to the effect that the beneficial owner is a
Foreign Holder. Pursuant to current Treasury regulations, this statement will
satisfy the certification requirements if (A) the beneficial owner provides his
name and address, and certifies, under penalties of perjury, that he is a
Foreign Holder (which certification may be made on an IRS Form W-8 or Form
W-8BEN), or (B) a financial institution holding the note on behalf of the
beneficial owner certifies, under penalties of perjury, that such statement has
been received by it and furnishes a paying agent with a copy.
With respect to notes held by a foreign partnership, under current law, the Form
W-8 or a Form W-8IMY may be provided by the foreign partnership. However, for
interest and disposition proceeds paid with respect to a note after December 31,
1999, unless the foreign partnership has entered into a withholding agreement
with the IRS, a foreign partnership will be required, in addition to providing
an intermediary Form W-8 or Form W-8IMY, to attach an appropriate certification
by each partner. Prospective investors, including foreign partnerships and their
partners, should consult their tax advisors regarding possible additional
reporting requirements.
If a Foreign Holder cannot satisfy the requirements of the Portfolio Interest
Exception described in (1) above, payments on a note made to that holder will be
subject to a 30% withholding tax unless the beneficial owner of the note
provides Metrocall or the paying agent, as the case may be, with a properly
executed (A) IRS Form 1001 or Form W-8BEN claiming an exemption from or
reduction of withholding under the benefit of a tax treaty or (B) IRS Form 4224
or Form W-8ECI stating that interest paid on the note is not subject to
withholding tax because it is effectively connected with the beneficial owner's
conduct of a trade or business in the United States.
Treasury regulations which will become generally effective for payments made
beginning January 1, 2000 (the "New Regulations"), modify certain of the
certification requirements described above. In general, the New Regulations do
not significantly alter the substantive withholding and information reporting
requirements but rather unify current certification procedures and forms and
clarify reliance standards. In addition, the New Regulations impose different
conditions on the ability of financial intermediaries acting for a Foreign
Holder to provide certifications on behalf of the Foreign Holder, which may
include entering into an agreement with the IRS to audit certain documentation
with respect to such certifications. It is possible that Metrocall and other
withholding agents may request new withholding exemption forms from holders in
order to qualify for continued exemption from withholding under the Treasury
regulations when they become effective. Foreign
55
<PAGE> 59
Holders should consult their own tax advisors to determine the effects of the
application of the New Regulations to their particular circumstances.
If a Foreign Holder is engaged in a trade or business in the United States and
payment on a note is effectively connected with the conduct of such trade or
business, the Foreign Holder, although exempt from United States federal
withholding tax as discussed above, generally will be subject to United States
federal income tax on such payment on a net income basis in the same manner as
if it were a United States Holder. In addition, if such Foreign Holder is a
foreign corporation, it may be subject to a branch profits tax equal to 30% or
applicable lower tax treaty rate on its effectively connected earnings and
profits for the taxable year, subject to adjustments. For this purpose, such
payment on a note will be included in such foreign corporation's earnings and
profits.
INFORMATION REPORTING AND BACKUP WITHHOLDING
UNITED STATES HOLDERS. In general, information reporting requirements will
apply to payments on a note and to the proceeds of the sale of a note to certain
noncorporate United States Holders. A 31% backup withholding tax may apply to
such payments if the United States Holder:
- fails to furnish or certify its correct taxpayer identification number to
the payer in the manner required,
- is notified by the IRS that it has failed to report payments of interest
and dividends properly, or
- under certain circumstances, fails to certify that it has not been
notified by the IRS that it is subject to backup withholding for failure
to report interest and dividend payments.
Any amounts withheld under the backup withholding rules will be allowed as a
credit against the holder's United States federal income tax. Provided that the
holder has filed a return and the required information is furnished to the IRS,
the holder may be entitled to a refund of the excess of the amount withheld over
the holder's federal income tax liability.
FOREIGN HOLDERS. Under current regulations, no information reporting or backup
withholding will apply to payments to Foreign Holders if a statement described
in the previous section regarding Foreign Holders has been received and the
payor does not have actual knowledge that the beneficial owner is a United
States person. If these conditions are not satisfied, information reporting and
backup withholding will apply. These rules also apply to payments on a note paid
to the beneficial owner by a U.S. office of an agent or broker.
In addition, backup withholding and information reporting will not apply if
payments on a note are paid or collected by a foreign agent on behalf of the
beneficial owner of such note, or if a foreign office of a broker, as defined in
applicable United States Treasury regulations, pays the proceeds of the sale of
a note to the owner thereof. Information reporting, however, may be required in
certain circumstances. If such agent or broker is, for United States federal
income tax purposes:
- a United States person,
- a controlled foreign corporation,
- a foreign person that derives 50% or more of its gross income for certain
periods from the conduct of a trade or business in the United States, or
56
<PAGE> 60
- with respect to payments made beginning January 1, 2000, a foreign
partnership if, at any time during its tax year, one or more of its
partners are "U.S. persons," as defined in United States Treasury
regulations, who in the aggregate hold more than 50% of the income or
capital interest in the partnership if, at any time during the tax year,
the partnership is engaged in a United States trade or business,
such payments will be subject to information reporting, but not backup
withholding, unless (1) such agent or broker has documentary evidence in its
records that the beneficial owner is not a United States person and certain
other conditions are met or (2) the beneficial owner otherwise establishes an
exemption.
The New Regulations modify certain of the certification requirements for backup
withholding. It is possible that Metrocall and other withholding agents may
request a new withholding exemption form from holders in order to qualify for
continued exemption from backup withholding under Treasury regulations when they
become effective.
THIS DISCUSSION MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S PARTICULAR
SITUATION. PROSPECTIVE UNITED STATES HOLDERS AND FOREIGN HOLDERS OF THE NOTES
ARE URGED TO CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES
TO THEM OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF THE NOTES, INCLUDING
THE TAX CONSEQUENCES UNDER UNITED STATES FEDERAL, STATE, LOCAL, FOREIGN AND
OTHER TAX LAWS AND THE EFFECTS OF CHANGES IN SUCH LAWS.
PLAN OF DISTRIBUTION
Each broker-dealer that receives new notes for its own account in connection
with the exchange offer must acknowledge that it will deliver a prospectus in
connection with any resale of such new notes. This prospectus, as it may be
amended or supplemented from time to time, may be used by broker-dealers in
connection with resales of new notes received in exchange for old notes if old
notes were acquired by broker dealers for their own accounts as a result of
market-making activities or other trading activities. Metrocall has agreed that
this prospectus, as it may be amended or supplemented from time to time, may be
used by a participating broker-dealer in connection with resales of new notes
for a period ending 180 days after the last date of acceptance for the exchange
offer. See "The exchange offer -- Resales of New Notes."
New notes received by broker-dealers for their own accounts in connection with
the exchange offer may be sold from time to time in one or more transactions in
the over-the-counter market, in negotiated transactions, through the writing of
options on the new notes or a combination of such methods of resale, at market
prices prevailing at the time of resale, at prices related to such prevailing
market prices or at negotiated prices. Any such resale may be made directly to
purchasers or to or through brokers or dealers who may receive compensation in
the form of commissions or concessions from any such broker-dealer and/or the
purchasers of any such new notes. Any broker-dealer that resells new notes that
were received by it for its own account in connection with the exchange offer
and any broker or dealer that participates in a distribution of such new notes
may be deemed to be an "underwriter" within the meaning of the Securities Act,
and any profit on any such resale of new notes and any commissions or
concessions received by any such persons may be deemed to be underwriting
compensation under the Securities Act. The letter of transmittal states that by
acknowledging that it will deliver and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.
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<PAGE> 61
Metrocall shall not be liable for any delay by DTC or any participant or
indirect participant in identifying the beneficial owners of the related new
notes and each such person may conclusively rely on, and shall be protected in
relying on, instructions from DTC for all purposes, including with respect to
the registration and delivery, and the respective principal amounts, of the new
notes to be issued.
LEGAL MATTERS
Wilmer, Cutler & Pickering, Washington, D.C., will pass upon the validity of the
new notes for Metrocall.
EXPERTS
The financial statements and schedule of Metrocall included in Metrocall's
Annual Report on Form 10-K/A for the year ended December 31, 1998 and
incorporated by reference in this prospectus and elsewhere in this registration
statement have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports, and are included in this prospectus
in reliance upon the authority of that firm as experts in giving such reports.
The combined financial statements of AT&T Wireless Services, Inc. -- Messaging
Division at December 31, 1996 and 1997, and for the three years ended December
31, 1997 have been audited by PricewaterhouseCoopers LLP (successor to Coopers &
Lybrand L.L.P.), independent accountants, as set forth in their report, which
has been incorporated by reference, given on the authority of said firm as
experts in auditing and accounting.
58
<PAGE> 62
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA
The unaudited pro forma condensed combined statement of operations for the year
ended December 31, 1998 that follows gives effect to each of the following
transactions as if each had occurred on January 1, 1998.
(1) Pro Forma Metrocall and AMD -- which gives effect to the AT&T Wireless
Advanced Messaging Division acquisition which occurred on October 2,
1998.
(2) Pro Forma Metrocall and AMD as Adjusted -- which gives effect to the
AT&T Wireless Advanced Messaging Division acquisition and the exchange
offer and the application of the net proceeds.
We have omitted a pro forma condensed combined balance sheet as of March 31,
1999 and a pro forma statement of operations for the three months ended March
31, 1999 that give effect to the exchange offer because we expect our pro forma
assets, liabilities including total debt, stockholders' equity and results of
operations to approximate our historical balances at March 31, 1999 had we given
effect to the exchange offer.
You should read this information with the accompanying notes herein, Metrocall's
consolidated financial statements and the Advanced Messaging Division combined
financial statements which have been incorporated by reference herein. The
information regarding the Advanced Messaging Division reflects unaudited results
of operations for the nine months ended September 30, 1998. The unaudited pro
forma condensed combined financial data does not purport to represent what
Metrocall's results of operations would have been had such transactions and
events occurred on the date specified, or to project Metrocall's results of
operations for any future period or date. The pro forma adjustments are based on
available information and certain adjustments that management of Metrocall
believes are reasonable. In the opinion of Metrocall's management, all
adjustments have been made that are necessary to present fairly the unaudited
pro forma condensed combined data.
F-1
<PAGE> 63
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
PRO FORMA
HISTORICAL AMD PRO FORMA NOTES METROCALL
------------------------ PRO FORMA METROCALL EXCHANGE AND AMD
METROCALL AMD(A) ADJUSTMENTS AND AMD ADJUSTMENTS AS ADJUSTED
------------- -------- ----------- --------- ----------- -----------
(AS RESTATED)
<S> <C> <C> <C> <C> <C> <C>
Service, rent and
maintenance................. $ 416,352 $142,967 $ -- $ 559,319 $ -- $ 559,319
Product sales................. 48,372 5,520 -- 53,892 -- 53,892
--------- -------- -------- --------- ------- ---------
Total revenues........... 464,724 148,487 -- 613,211 -- 613,211
Net book value of products
sold........................ (31,791) (4,274) (3,000)(b) (39,065) -- (39,065)
--------- -------- -------- --------- ------- ---------
432,933 144,213 (3,000) 574,146 -- 574,146
--------- -------- -------- --------- ------- ---------
Operating expenses:
Service, rent and
maintenance.............. 115,432 44,484 -- 159,916 -- 159,916
Selling and marketing....... 73,546 21,312 -- 94,858 -- 94,858
General and
administrative........... 121,644 46,552 -- 168,196 168,196
Depreciation and
amortization............. 234,948 35,014 18,685(c) 288,647 -- 288,647
--------- -------- -------- --------- ------- ---------
Total operating expenses.... 545,570 147,362 18,685 711,617 -- 711,617
--------- -------- -------- --------- ------- ---------
Loss from operations.......... (112,637) (3,149) (21,685) (137,471) -- (137,471)
Interest expense.............. (64,448) -- (6,683)(d) (71,131) (6,573)(f) (77,704)
Interest and other income,
net......................... 849 155 -- 1,004 -- 1,004
--------- -------- -------- --------- ------- ---------
Net loss before taxes....... (176,236) (2,994) (28,368) (207,598) (6,573) (214,171)
Income tax benefit
(provision)................. 47,094 (208) 16,817(e) 63,703 -- 63,703
--------- -------- -------- --------- ------- ---------
Net loss.................... $(129,142) $ (3,202) $(11,551) $(143,895) $(6,573) $(150,468)
========= ======== ======== ========= ======= =========
Preferred dividends........... (11,767) -- (5,842)(g) (17,609) -- (17,609)
Loss attributable to common
stockholders............. $(140,909) $ (3,202) $(17,393) $(161,504) $(6,573) $(168,077)
========= ======== ======== ========= ======= =========
Net loss per share
attributable to common
stockholders................ $ (3.43) $ (3.94) $ (4.10)
========= ========= =========
Shares used in computing net
loss per share attributable
to common stockholders...... 41,030 41,030 -- 41,030
========= ========= =========
</TABLE>
See accompanying notes to this unaudited pro forma statement.
F-2
<PAGE> 64
NOTES TO UNAUDITED PRO FORMA CONDENSED
COMBINED STATEMENT OF OPERATIONS
(a)Represents the historical operating results of AMD for the nine months ended
September 30, 1998.
(b)Reflects the estimated difference in the net book value of products sold
based upon Metrocall's estimated useful lives of subscriber equipment of 3
years compared to AMD's useful life of 2 years.
(c)Reflects incremental depreciation and amortization based upon the allocation
of depreciable and amortizable assets and useful lives of 10 years for FCC
licenses, 3 years for subscriber lists and 5 years for noncompete agreements,
offset by the difference in useful lives of subscriber equipment described in
note(b) above.
(d)Represents the estimated incremental increase in interest expense at an
average rate of approximately 8.1% per year under the Metrocall credit
facility that would have been incurred assuming the AMD acquisition was
completed on January 1, 1998.
(e)Represents the tax benefits resulting from the amortization of acquired
intangibles in connection with the AMD acquisition assuming an effective tax
rate of approximately 40%.
(f)Reflects the estimated incremental increase in interest expense as a result
of the old notes offering as if that offering had been completed on January
1, 1998. For pro forma purposes, the annual interest rate on the old notes
issued is 11.0% per year and the average annual interest rate on refinanced
bank debt is 8.1%. Amount also includes amortization of the discount on the
old notes and of estimated deferred debt offering costs of $637,000. The
exchange of old notes for new notes will have no impact on the pro forma
condensed combined statement of operations.
(g)Represents the adjustment to include incremental dividends for the period
January 1, 1998 through September 30, 1998 on the Series C preferred shares
issued in connection with the AMD acquisition.
F-3
<PAGE> 65
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Metrocall Restated Certificate of Incorporation provides for indemnification
of the directors, officers, employees and agents of Metrocall to the full extent
currently permitted by law.
Section 145 of the Delaware General Corporation Law ("DGCL") empowers a Delaware
corporation to indemnify any person who was or is, or is threatened to be made,
a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of such corporation) by reason of the fact that such person
is or was a director, officer, employee or agent of such corporation, or is or
was serving at the request of such corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise. The indemnity may include expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by such person in connection with such action, suit or proceeding, provided that
such person acted in good faith and in a manner such person reasonably believed
to be in or not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, such person had no reasonable
cause to believe his conduct was unlawful. A Delaware corporation may indemnify
such persons against expenses (including attorneys' fees) in actions brought by
or in the right of the corporation to procure a judgment in its favor under the
same conditions, except that no indemnification is permitted in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless and to the extent the Court of Chancery of the
State of Delaware or the court in which such action or suit was brought shall
determine upon application that, in view of all circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such expenses as the
Court of Chancery or other such court shall deem proper. To the extent such
person has been successful on the merits or otherwise in defense of any action
referred to above, or in defense of any claim, issue or matter therein, the
corporation must indemnify such person against expenses (including attorneys'
fees) actually and reasonably incurred by such person in connection therewith.
The indemnification and advancement of expenses provided for in, or granted
pursuant to, Section 145 is not exclusive of any other rights to which those
seeking indemnification or advancement of expenses may be entitled under any
by-law, agreement, vote of stockholders or disinterested directors or otherwise.
Section 145 also provides that a corporation may maintain insurance against
liabilities for which indemnification is not expressly provided by the statute.
In addition, the Metrocall Restated Certificate of Incorporation, as permitted
by Section 102(b) of the DGCL, limits directors' liability to Metrocall and its
stockholders by eliminating liability in damages for breach of fiduciary duty.
Section 5.5 of the Metrocall Amended and Restated Certificate of Incorporation
provides that neither Metrocall nor its stockholders may recover damages from
Metrocall directors for breach of their fiduciary duties in the performance of
their duties as directors of Metrocall. As limited by Section 102(b), this
provision cannot, however, have the effect of indemnifying any director of
Metrocall in the case of liability (i) for a breach of the director's duty of
loyalty, (ii) for acts of omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) for unlawful
payments of dividends or unlawful stock
II-1
<PAGE> 66
repurchases or redemptions as provided in Section 174 of the DGCL or (iv) for
any transactions for which the director derived an improper personal benefit.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
The exhibits to this registration statement are listed in the Exhibit Index to
this registration statement, which Exhibit Index is hereby incorporated by
reference.
ITEM 22. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, each filing of the registrant's
annual report pursuant to section 13(a) or section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrants pursuant to the foregoing provisions, or otherwise, the registrants
have been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as
II-2
<PAGE> 67
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
registrants of expenses incurred or paid by a director, officer or controlling
person of the registrants in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by them is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-3
<PAGE> 68
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company has
duly caused this Amendment No. 4 to the registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in Alexandria,
Virginia on this 2nd day of July, 1999.
METROCALL, Inc.
By: /s/ VINCENT D. KELLY
------------------------------------
Vincent D. Kelly
Chief Financial Officer and
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 4 to the registration statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Chairman of the Board July 2, 1999
- ---------------------------------------------------
Richard M. Johnston
* Vice Chairman of the Board, July 2, 1999
- --------------------------------------------------- President, Chief Executive
William L. Collins, III Officer and Director (Principal
Executive Officer)
* Chief Financial Officer, Executive July 2, 1999
- --------------------------------------------------- Vice President and Treasurer
Vincent D. Kelly (Principal Financial and
Accounting Officer)
* Director July 2, 1999
- ---------------------------------------------------
Harry L. Brock, Jr.
* Director July 2, 1999
- ---------------------------------------------------
Francis A. Martin, III
* Director July 2, 1999
- ---------------------------------------------------
Ronald V. Aprahamian
* Director July 2, 1999
- ---------------------------------------------------
Elliott H. Singer
* Director July 2, 1999
- ---------------------------------------------------
Michael Greene
</TABLE>
II-4
<PAGE> 69
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Director July 2, 1999
- ---------------------------------------------------
Royce R. Yudkoff
* Director July 2, 1999
- ---------------------------------------------------
Jackie R. Kimzey
* Director July 2, 1999
- ---------------------------------------------------
Edward E. Jungerman
* Director July 2, 1999
- ---------------------------------------------------
Max D. Hopper
*By: /s/ VINCENT D. KELLY
---------------------------------------------
Vincent D. Kelly
Attorney-in-Fact
</TABLE>
II-5
<PAGE> 70
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NO. DESCRIPTION PAGE
- ------- ----------- ------------
<C> <S> <C>
3.1 Restated Certificate of Incorporation of Metrocall, Inc.
(Metrocall)(a)
3.2 Eighth Amended and Restated Bylaws of Metrocall(a)
4.1 Indenture for Metrocall Senior Subordinated Notes Due 2008,
dated as of December 22, 1998, including form of Notes(b)
5.1 Opinion of Wilmer, Cutler & Pickering as to the legality of
the securities being registered
8.1 Opinion of Wilmer, Cutler & Pickering as to certain tax
matters
10.1 Registration Rights Agreement dated December 22, 1998
between Metrocall and Morgan Stanley & Co. Incorporated,
Nationsbanc Montgomery Securities LLC, TD Securities (USA)
Inc., First Union Capital Markets, a division of Wheat First
Securities, Inc. and BancBoston Robertson Stephens, Inc.(a)
12.1 Ratio of Earnings to Fixed charges
23.1 Consent of Wilmer, Cutler & Pickering (included in Exhibits
5.1 and 8.1)
23.2 Consent of Arthur Andersen LLP, as independent public
accountants for Metrocall
23.3 Consent of PricewaterhouseCoopers LLP (successor to Coopers
& Lybrand L.L.P.), as independent accountants for AT&T
Wireless Services, Inc. -- Messaging Division
24 Power of Attorney *
25 Form T-1 Statement of Eligibility of First Union National
Bank to act as trustee under the Indenture *
99.1 Form of Letter of Transmittal *
99.2 Form of Exchange Agent Agreement *
</TABLE>
- -------------------------
(a) Incorporated by reference to Metrocall's Annual Report on Form 10-K for the
year ended December 31, 1998, filed with the SEC on March 31, 1999.
(b) Incorporated by reference to Metrocall's Current Report on Form 8-K filed
with the SEC on January 4, 1999.
* Previously filed
II-6
<PAGE> 1
EXHIBIT 5.1
<TABLE>
<S> <C> <C>
WASHINGTON
WILMER, CUTLER & PICKERING BALTIMORE
2445 M STREET, N.W. NEW YORK
WASHINGTON, D.C. 20037-1420 LONDON
BRUSSELS
------------- BERLIN
TELEPHONE (202) 663-6000
FACSIMILE (202) 663-6363
</TABLE>
June 14, 1999
Metrocall, Inc.
6677 Richmond Highway
Alexandria, Virginia 22306
Re: Metrocall, Inc. Exchange Offer Registration Statement on Form S-4
Ladies and Gentlemen:
We have acted as special counsel to Metrocall, Inc., a Delaware corporation
(the "Company"), in connection with the preparation and filing of a Registration
Statement on Form S-4 (the "Registration Statement") under the Securities Act of
1933, as amended (the "Securities Act"), with the Securities and Exchange
Commission (the "Commission") with respect to an exchange offer (the "Exchange
Offer") pursuant to which the Company is offering to exchange up to $250,000,000
principal amount of its outstanding 11% Senior Subordinated Notes due 2008 (the
"Old Notes") for a like principal amount of the Company's 11% Senior
Subordinated Notes due 2008 that have been registered under the Securities Act
(the "New Notes"). The New Notes will be offered pursuant to an indenture, dated
as of December 22, 1998 (the "Indenture"), by and between the Company and First
Union National Bank, as trustee.
In so acting, we have examined originals or copies of the (1) the
Registration Statement; (2) the Prospectus that is a part of the Registration
Statement (the "Prospectus"); (3) the Indenture; and (4) the Registration Rights
Agreement dated as of December 22, 1998 by and among the Company and the
Placement Agents (as defined therein) (collectively with the foregoing
documents, the "Operative Documents").
We have also examined original, reproduced or certified copies of
resolutions adopted by the Company's boards of directors and such other
documents, corporate records, certificates of public officials, officers and
representatives of the Company and other instruments as we have deemed necessary
or appropriate to render the opinions set forth below, and have considered such
questions of law as we have deemed necessary to enable us to render the opinions
expressed below.
In our examination of documents and records, we have assumed, without
investigation, the genuineness of all signatures, the legal capacity of natural
persons, the authenticity of all documents submitted to us as originals, the
conformity with originals of all documents submitted to us as telecopied,
certified, photostatic or reproduced copies and the authenticity of all such
documents. We have also assumed, but not independently verified, that all
documents executed by a party other than the Company or any respective
subsidiaries thereof were duly and validly authorized, executed and delivered by
such party, that such party has the requisite power and authority to execute,
deliver and perform such agreements and other documents, and that such
agreements and other documents are
<PAGE> 2
Metrocall, Inc.
June 14, 1999
Page 2
legal, valid and binding obligations of such party and enforceable against such
party in accordance with their respective terms.
This opinion is limited to the laws of the United States of America, New
York law, and the General Corporation Law of the State of Delaware. We express
no opinion whatsoever as to any other laws or regulations or as to laws relating
to choice of law or conflicts of law principles.
Based upon the foregoing, subject to the assumptions, limitations and
exceptions contained herein, and subject to the issuance by the Commission of an
order declaring the Registration Statement effective, we are of the opinion that
when the New Notes, in the form filed as an exhibit to the Indenture, have been
duly executed and authenticated in accordance with the Indenture and have been
duly issued and delivered by the Company in exchange for an equal principal
amount of Old Notes pursuant to the terms of the Indenture and the Exchange
Offer, the New Notes will (x) be the legal and binding obligations of the
Company enforceable against the Company in accordance with their terms except as
(a) the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally, and (b) rights of
acceleration, if applicable, and the availability of equitable remedies may be
limited by equitable principles of general applicability, as well as concepts of
materiality, reasonableness, good faith and fair dealing, and (y) be entitled to
the benefits of the Indenture.
The information set forth herein is as of the date hereof. We assume no
obligation to advise you of changes which may thereafter be brought to our
attention. Our opinions are based on statutory and judicial decisions in effect
at the date hereof, and we do not opine with respect to any law, regulation,
rule or governmental policy or decision which may be enacted determined or
adopted after the date hereof, nor assume any responsibility to advise you of
future changes in our opinions.
This opinion is furnished by us, as special counsel to the Company, to you
and is for your benefit in connection with the Exchange Offer. We hereby consent
to the use of this opinion as an exhibit to the Registration Statement. We also
consent to any and all references to our firm under the caption "Legal Matters"
in the Prospectus.
Very truly yours,
WILMER, CUTLER & PICKERING
By: /s/ THOMAS W. WHITE
------------------------------------
Thomas W. White, a partner
<PAGE> 1
EXHIBIT 8.1
[WILMER, CUTLER & PICKERING LETTERHEAD]
June 14, 1999
Metrocall, Inc.
6677 Richmond Highway
Alexandria, Virginia 22306
Dear Ladies and Gentlemen:
We have acted as special counsel to Metrocall, Inc. in connection with the
preparation and filing with the Securities and Exchange Commission (the
"Commission") of a Prospectus, dated April 13, 1999, and all amendments thereto
(the "Prospectus"), to the Registration Statement on Form S-4, and all
amendments thereto (the "Registration Statement") under the Securities Act of
1933, as amended (the "Securities Act"), for the registration of the 11% Senior
Subordinated Notes due 2008 (the "New Notes") which are to be offered in
exchange for all the outstanding 11% Senior Subordinated Notes due 2008 (the
"Old Notes"). All capitalized terms not otherwise defined herein shall have the
same meaning ascribed to such terms in the Prospectus.
We have examined copies of the following documents: (1) the Prospectus (2)
the Registration Statement; and (3) such other documents as we have deemed
relevant for purposes of the opinion set forth herein.
In our examination of such documents, we have assumed, without independent
inquiry, the genuineness of all signatures, the proper execution of all
documents, the authenticity of all documents submitted to us as originals, the
conformity to originals of all documents submitted to us as copies, the
authenticity of the originals of any such copies, and the legal capacity of all
natural persons.
<PAGE> 2
Metrocall, Inc.
June 14, 1999
Page 2
Based on and subject to the foregoing, we hereby confirm that the
discussion set forth in the Prospectus under the heading "Material United States
Federal Income Tax Consequences" is our opinion on the material United States
federal income tax consequences of the purchase, ownership, and disposition of
the New Notes and the exchange of Old Notes for New Notes.
This opinion is based on relevant provisions of the Internal Revenue Code
of 1986, as amended, the Treasury Regulations issued thereunder, court
decisions, and administrative determinations as currently in effect, all of
which are subject to change, prospectively or retroactively, at any time. We
undertake no obligation to update or supplement this opinion to reflect any
changes in laws that may occur after the date hereof.
This opinion has been prepared for your use in connection with the filing
of the Prospectus and should not be quoted in whole or in part or otherwise be
referred to, nor otherwise be filed with or furnished to any governmental agency
or other person or entity, without our express prior written consent.
We hereby consent to the filing of this opinion as an exhibit to the
Prospectus as filed with the SEC and to the use of our name therein.
Very Truly Yours,
WILMER, CUTLER & PICKERING
By: /s/ WILLIAM J. WILKINS
------------------------------------
William J. Wilkins
A Partner
<PAGE> 1
EXHIBIT 12.1
RATIO OF EARNINGS TO FIXED CHARGES
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
FOR THE
THREE MONTHS
FOR THE YEAR ENDED DECEMBER 31, ENDED MARCH 31,
----------------------------------------------- -----------------
1994 1995 1996 1997 1998 1998 1999
------ ------- ------- ------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Fixed Charges
Interest on debt and capitalized leases....... 3,430 11,938 19,804 35,096 62,677 14,460 19,890
Amortization of deferred financing costs...... 296 595 620 1,152 1,771 441 810
Interest component of rentals................. 879 1,638 2,782 6,965 12,006 2,776 3,880
------ ------- ------- ------- -------- ------- -------
4,605 14,171 23,206 43,213 76,454 17,677 24,580
------ ------- ------- ------- -------- ------- -------
Net income (loss)............................... (2,399) (20,102) (50,259) (60,323) (129,142) (30,324) (42,013)
Add back (deduct)
Extraordinary items........................... 1,309 2,695 3,675 -- -- -- --
Income tax provision (benefit)................ (152) (595) (1,021) (4,861) (47,094) (10,519) (15,550)
Fixed charges................................. 4,605 14,171 23,206 43,213 76,454 17,677 24,580
------ ------- ------- ------- -------- ------- -------
Total earnings.......................... 3,363 (3,831) (24,399) (21,971) (99,782) (23,166) (32,983)
====== ======= ======= ======= ======== ======= =======
Fixed charges in excess of earnings........... (1,242) (18,002) (47,605) (65,184) (176,236) (40,843) (57,563)
====== ======= ======= ======= ======== ======= =======
</TABLE>
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of our reports dated June 23, 1999
included in Metrocall's Form 10-K/A for the year ended December 31, 1998 and to
all references to our Firm included in this registration statement.
/s/ ARTHUR ANDERSEN LLP
--------------------------------------
ARTHUR ANDERSEN LLP
Washington, D.C.
July 1, 1999
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in Metrocall, Inc.'s
registration statement on Form S-4, Amendment No. 4, of our report dated
February 27, 1998, except for Note 10 as to which the date is December 1, 1998,
on our audits of the combined financial statements of AT&T Wireless Services,
Inc. -- Messaging Division, a business unit of AT&T Wireless Services, Inc., as
of December 31, 1997 and 1996, and for the years ended December 31, 1997, 1996
and 1995, which report is included in the Form 8-K/A of Metrocall, Inc. We also
consent to the reference to our firm under the caption "Experts."
/s/ PRICEWATERHOUSECOOPERS LLP
--------------------------------------
PRICEWATERHOUSECOOPERS LLP
Seattle, Washington
July 1, 1999
