<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 1)*
A+ Network, Inc.
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(NAME OF ISSUER)
Common Stock
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(TITLE OF CLASS OF SECURITIES)
002033108
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(CUSIP NUMBER)
Elliott H. Singer, A+ Network, Inc., 2416 Hillsboro Road, Nashville, TN 37212,
(615) 385-4500
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(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON
AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS)
May 16, 1996
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(DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEMENT)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following
box [ ].
Check the following box if a fee is being paid with the statement [ ].
(A fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five percent of
the class of securities described in Item 1; and (2) has filed no amendment
subsequent thereto reporting beneficial ownership of five percent or less of
such class.) (See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom copies
are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
(continued on following pages)
(Page 1 of ___ Pages)
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CUSIP No. 002033108 SCHEDULE 13D Page 2 of Pages
--------------------- -------- --------
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Ray D. Russenberger
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(2) Check the Appropriate Box if a Member of a Group* (a) [ ]
(b) [ X ]
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(3) SEC Use Only
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(4) SOURCE OF FUNDS*
Not applicable
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(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS [ ]
IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
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(6) Citizenship or Place of Organization
United States of America
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(7) Sole Voting Power
Number of See Item 5
Shares --------------------------------------------------------
Beneficially (8) Shared Voting Power
Owned by See Item 5
Each --------------------------------------------------------
Reporting (9) Sole Dispositive Power
Person With See Item 5
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(10) Shared Dispositive Power
See Item 5
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(11) Aggregate Amount Beneficially Owned by Each Reporting Person
3,010,833
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(12) Check Box if Aggregate Amount in Row (11) Excludes Certain
Shares* [ ]
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(13) Percent of Class Represented by Amount in Row (11)
29.3%
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(14) Type of Reporting Person*
IN
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE> 3
ITEM 1. SECURITY AND ISSUER
This statement relates to the common stock, par value $.01 per share (the
"Common Stock"), of A+ Network, Inc. (the "Company"), whose principal executive
offices are located at 2416 Hillsboro Road, Nashville, Tennessee 37212 and at
40 South Palafox Street, Pensacola, Florida 32501.
ITEM 2. IDENTITY AND BACKGROUND
(a) The name of the person filing this statement is Ray D. Russenberger.
(b) Mr. Russenberger's business address is A+ Network, Inc., 40 South
Palafox Street, Pensacola, Florida 32501.
(c) Mr. Russenberger serves as Vice Chairman of the Board of Directors of
the Company and is Vice President of Strategic Planning of the Company. The
principal business of the Company is providing paging services. The Company's
principal business addresses are 2416 Hillsboro Road, Nashville, Tennessee
37212 and 40 South Palafox Street, Pensacola, Florida 32501.
(d) Mr. Russenberger has not been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) during the last five
years.
(e) During the last five years, Mr. Russenberger has not been a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
which resulted in or subjected him to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violation with respect to
such laws.
(f) Mr. Russenberger is a citizen of the United States of America.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Not applicable.
ITEM 4. PURPOSE OF TRANSACTION
See Item 6.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) Mr. Russenberger beneficially owns 3,010,833 shares or 29.3% of the
issued and outstanding Common Stock.
<PAGE> 4
(b) Except as provided for in the Shareholders' Agreement between Mr.
Russenberger and Metrocall, Inc. (as defined in Item 6 below), Mr. Russenberger
has the sole power to vote or to direct the vote and the sole power to dispose
or direct the disposition of 3,010,833 shares of Common Stock. On October 18,
1995, Mr. Russenberger granted options to approximately 400 employees of
Network to purchase an aggregate of 315,203 shares of the Common Stock
beneficially owned by him. As of the date of the filing of this statement,
options relating to the purchase of an aggregate of 299,375 shares remain
outstanding and none of the options has been exercised.
(c) None.
(d) Except as provided for in the Shareholders' Agreement between Mr.
Russenberger and Metrocall, Inc. (as defined in Item 6 below), no other person
is known to have the right to receive or the power to direct the receipt of
dividends from, or the proceeds from the sale of, the 3,010,833 shares of
Common Stock beneficially owned by Mr. Russenberger. On October 18, 1995, Mr.
Russenberger granted options to approximately 400 employees of Network to
purchase an aggregate of 315,203 shares of the Common Stock beneficially owned
by him. As of the date of the filing of this statement, options relating to
the purchase of an aggregate of 299,375 shares remain outstanding and none of
the options has been exercised. None of the employees received an option to
purchase more than five percent (5%) of the Common Stock.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER
On October 18, 1995, Mr. Russenberger entered into Stock Option
Agreements with approximately 400 employees of Network. The Stock Option
Agreements relating to the grant of options to purchase an aggregate of
301,975 shares of the Common Stock provide for immediate vesting and have
exercise prices ranging from $6 to $12. The Stock Option Agreements relating
to the grant of options to purchase an aggregate of 13,228 shares of the Common
Stock provide for vesting in three equal annual installments beginning October
18, 1996, the first anniversary of the date of grant, and have an exercise
price of $14.
All of the Stock Option Agreements provide that at the time of exercise
and if requested by Mr. Russenberger, the option holder shall execute and
deliver to Mr. Russenberger an irrevocable voting proxy and/or voting agreement
in form and substance satisfactory to Mr. Russenberger, granting to Mr.
Russenberger the right to vote the shares subject to the option at any and all
meetings of the shareholders of the Company and for any and all purposes as Mr.
Russenberger in his sole discretion deems appropriate. Such irrevocable proxy
and/or voting agreement shall terminate no later than one year after the date
the option is exercised. The Stock Option Agreements further provide for the
<PAGE> 5
expiration of the options on the earlier of (i) October 18, 2005, the
tenth anniversary of the date of grant, or (ii) 30 days after the date the
option holder's employment with the Issuer is terminated for any reason.
Mr. Russenberger is a party to the A+ Shareholders' Option and Sale
Agreement, dated as of May 16, 1996 (the "Shareholders Agreement"), by and
among Metrocall, Inc., a Delaware corporation ("Metrocall"), and Mr.
Russenberger, Brownlee O. Currey, Jr., Charles A. Emling III, Irby C. Simpkins,
Jr., Elliott H. Singer, Summit Investors II, L.P., and Summit Ventures III,
L.P., (the "Principal Shareholders"). The Shareholders Agreement grants
Metrocall certain rights with respect to the Common Stock owned by each
Principal Shareholder and the related Rights (the "Owned Shares"). The Owned
Shares subject to the Shareholders Agreement aggregate 5,525,543 shares of
voting common stock, representing approximately 53.8% of the Shares outstanding
on May 16, 1996. All of Mr. Russenberger's Owned Shares are subject to the
Shareholders Agreement. The principal terms of the Shareholders Agreement are
as follows.
Sale of Shares. The Shareholders Agreement provides that, subject to and
conditioned upon the consummation of the Offer, each of the Principal
Shareholders will sell to Metrocall a number of Shares equal to 40% of each of
their Owned Shares (the "Cash Purchase Shares") for a cash purchase price of
$21.10 per Share, or such higher price as shall be paid for Shares tendered
pursuant to the Offer. The Cash Purchase Shares constitute 2,210,217 Shares or
approximately 21.5% of outstanding Shares as of May 16, 1996.
Voting Agreement and Proxy. Pursuant to the Shareholders Agreement, each
Principal Shareholder agreed during the term of the Shareholders Agreement to
vote in favor of the transactions contemplated by the Agreement and Plan of
Merger, dated as of May 16, 1996, between Metrocall and the Company (the
"Merger Agreement"), and against (i) any extraordinary corporate transaction,
such as a merger, rights offering, reorganization, recapitalization or
liquidation involving the Company or any of its subsidiaries, (ii) any sale or
transfer of a material amount of assets of the Company or any of its
subsidiaries or the issuance of any securities of the Company or any subsidiary
or (iii) any change in the Board of Directors of the Company. The Agreement
also irrevocably appoints Metrocall or its officers as each Principal
Shareholder's proxy during the Option Period to vote all Owned Shares (other
than Shares purchased by Metrocall) as specified above. The Proxy is
exercisable only during the Option Period (defined below).
The Principal Shareholders also granted Metrocall several options to
purchase Shares, each subject to a separate set of conditions.
Scenario I Option. Pursuant to the Shareholders Agreement, each Principal
Shareholder granted Metrocall an irrevocable option (the "Scenario I
Option") to purchase all, but not less than all, of the Owned Shares other than
the Cash Purchase Shares
<PAGE> 6
previously purchased by Metrocall and certain Owned Shares of
Mr. Russenberger (the "Scenario I Option Shares") which are subject to previous
options in favor of certain employees of the Company (the "RR Option Shares").
The Scenario I Option may be exercised by Metrocall following
satisfaction of the Exercise Conditions (defined below), for a period
commencing upon the later to occur of (i) 61 days after Metrocall has
delivered the Evidence of Financing (as defined below) and (ii) the receipt by
Metrocall of a Regulatory Order from the FCC, and ending on the earlier of
six months after the closing of the purchase by Metrocall of the Cash
Purchase Shares or the termination of Shareholders Agreement in accordance with
its terms (the "Option Period"). Should Metrocall elect to exercise the
Scenario I Option, Metrocall will be obligated to furnish to the Company
evidence of financing (the "Evidence of Financing") enabling it to finance the
offer to repurchase the Company's 11 7/8% Senior Subordinated Notes in
accordance with the terms of the Change In Control provisions of the Indenture
governing such Notes. "Regulatory Order" shall mean an action taken or order
issued by the FCC with respect to the FCC licenses of the Company (as defined
in the Merger Agreement) as to which (i) no request for stay by the FCC of the
action or order is pending, no such stay is in effect, and, if any deadline for
filing any such request is designated by statute or regulation, it has passed;
and (ii) with respect to an action taken or order issued by the FCC granting
consent to the Merger, such consent shall be without material adverse
conditions, other than conditions that have been agreed to by the Company and
Metrocall or that are routine conditions with respect to transfers of this
nature.
The Exercise Conditions, each of which is required to be satisfied prior
to the exercise of the Scenario I Option, are: (i) the occurrence of the
closing of the purchase by Metrocall of the Cash Purchase Shares; (ii) the
valid approval and adoption of the Merger Agreement by the shareholders of
Metrocall; and (iii) the absence of any material breach by Metrocall of its
obligations and agreements in the Merger Agreement.
Scenario II Transactions. The Shareholders Agreement provides that
Metrocall shall purchase the Adjusted Owned Shares (as defined below) upon the
occurrence of a Scenario II Trigger Event. A Scenario II Trigger Event shall
have occurred if (i) prior to expiration of the Offer, the tender offer called
for by the Merger Agreement (the "Offer"), the Company receives an acquisition
proposal (a proposal relating to a possible acquisition of the Company by
merger or purchase of assets, or tender offer for more than 5% of the Shares)
or if the proposal to adopt the Merger Agreement shall not have been adopted by
the shareholders of the Company and all Shares owned by Metrocall are voted
in favor of the proposal, (ii) the Offer expires in accordance with its terms
without any Shares accepted for payment in circumstances in which all
conditions to the Offer other than the Minimum Condition (as defined in the
Merger Agreement) or a condition relating to an injunction enjoining the Merger
shall have been satisfied, and (iii) within two business days after the
expiration of the Offer, Metrocall gives notice
<PAGE> 7
to the Company and Principal Shareholders of its election not to
terminate the Merger Agreement in accordance with its terms based on (i) the
failure of the shareholders of the Company to approve the proposal to adopt the
Merger Agreement, (ii) the withdrawal by the Company's board of directors of
its approval of the Merger Agreement or their failure to recommend against
another acquisition proposal or (iii) the execution of an agreement in
principle relating to another acquisition proposal or other business
combination with a person other than Metrocall.
The "Adjusted Owned Shares" is such number of Shares, as selected by
Metrocall, that in the aggregate is greater than 40%, but does not exceed 49.9%
(or such lesser percentage as may be required by applicable law), of the issued
and outstanding Shares on the date of calculation. The RR Option Shares will
be disregarded for purposes of calculating the Adjusted Owned Shares for each
shareholder's pro rata share of the option on the Adjusted Owned Shares.
Scenario II Option. Subject to the Closing of the sale of the Adjusted
Owned Shares, Metrocall is obligated under the Shareholders Agreement to
use its reasonable best efforts to commence a new tender offer, to the extent
permitted by applicable law, including the receipt of requisite FCC regulatory
approvals, pursuant to which Metrocall shall offer to purchase no less than
the number of Shares constituting the Minimum Condition for the Offer at a
price no less than the highest price offered in the Offer ("Scenario II Tender
Offer"). In such event, and subject to and conditioned upon the purchase of
Shares pursuant to the Scenario II Tender Offer, Metrocall has an exclusive
and irrevocable option during the Option Period, to purchase all, but not less
than all, of the Owned Shares other than Adjusted Owned Shares previously
purchased by Metrocall and the RR Option Shares (the "Scenario II Option
Shares"), which option (the "Scenario II Option") shall have the same terms and
conditions (other than the number of shares to be purchased) as the Scenario I
Option.
Scenario II Mandatory Share Purchase. Subject to the Closing of the sale
of the Adjusted Owned Shares, in the event that a Scenario II Tender Offer
expires without Metrocall purchasing any shares, the Shareholders Agreement
obligates Metrocall to use its reasonable best efforts to acquire as soon
as practicable the remainder of the Scenario II Option Shares. In such event,
Metrocall shall have an exclusive and irrevocable option during the Option
Period ("Mandatory Option") to purchase all, but not less than all, of the
remainder of the Scenario II Option Shares and Metrocall shall be required
to exercise such option as promptly as possible. Metrocall is also
prohibited from effecting the Merger unless prior to the Effective Time,
Metrocall shall have exercised the Mandatory Option, which shall have the same
terms and conditions (other than the number of shares to be purchased) as the
Scenario I Option.
Termination. The Shareholders Agreement terminates on the earliest of (i)
the expiration of the Option Period, (ii) the purchase by Metrocall of all
Owned Shares (other than the RR Option Shares) pursuant to Shareholders
Agreement, (iii) the
<PAGE> 8
agreement of the parties to the Shareholders Agreement to terminate the
Shareholders Agreement, (iv) consummation of the Merger, (v) two business days
after termination or expiration of the Offer without the purchase of any
Shares pursuant thereto unless Metrocall shall have purchased Shares
following a Scenario II Trigger Event in accordance with the Shareholders
Agreement, and (vi) termination of the Merger Agreement pursuant to its terms,
and in any event the Shareholders Agreement shall terminate on March 16, 1997.
Metrocall, Inc. is a provider of paging and related services and has its
principal executive offices at 6677 Richmond Highway, Alexandria, Virginia
22306.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
The following documents are filed as Exhibits to this statement:
EXHIBIT EXHIBIT
NUMBER -------
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*1 -- Lock-up Agreement, dated October 24, 1995,
between Ray D. Russenberger and the Company
*2 -- Form of Stock Option Agreement (relating to
grant of options to purchase an aggregate of 301,975
shares)
*3 -- Form of Stock Option Agreement (relating to
grant of options to purchase an aggregate of 13,228
shares)
4 -- Shareholders' Option and Sale Agreement
dated as of May 16, 1996 by and among Metrocall,
Inc., and Ray D. Russenberger, Brownlee O. Currey,
Jr., Charles A. Emling III, Irby C. Simpkins,
Jr., Elliott H. Singer, Summit Investors II, L.P.
and Summit Ventures III, L.P.
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* Previously filed
<PAGE> 9
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
/s/ Ray D. Russenberger
-----------------------
Ray D. Russenberger
Dated: May 20, 1996
<PAGE> 1
EXHIBIT (C)(2)
A+ SHAREHOLDERS'
OPTION AND SALE AGREEMENT
BY AND AMONG
METROCALL, INC.
AND
CERTAIN SHAREHOLDERS OF
A+ NETWORK, INC.
May 16, 1996
<PAGE> 2
A+ SHAREHOLDERS' OPTION AND SALE AGREEMENT
<TABLE>
<S> <C>
1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
-------------------
2. Representations and Warranties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
------------------------------
2.1. Representations and Warranties of the Shareholders . . . . . . . . . . . . . . . . . . . . . . 4
--------------------------------------------------
2.1.1 Binding Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
-----------------
2.1.2 No Conflict. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
-----------
2.1.3 Ownership of Owned Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
-------------------------
2.1.4 Purchase Not for Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
-----------------------------
2.1.5 Tax Representation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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2.2 Representations and Warranties of MC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
------------------------------------
2.2.1 Binding Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
-----------------
2.2.2 No Conflict. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
-----------
2.2.3 Purchase Not for Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
-----------------------------
2.2.4 MC Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
-------------
3. Transactions for Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
-----------------------
3.1 Certain Prohibited Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
----------------------------
3.2 Scenario I Transactions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
-----------------------
3.2.1 Cash Purchase of Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
------------------------
3.2.2 Scenario I Option. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
-----------------
3.3 Scenario II Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
------------------------
3.3.1 Scenario II Trigger Event . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
-------------------------
3.3.2 Scenario II Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
------------------
3.3.3 Scenario II Mandatory Share Purchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
------------------------------------
3.3.4 Savings Clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
--------------
4. Voting Agreement and Proxy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
--------------------------
5. Legends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
-------
6. Registration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
------------
7. Specific Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
--------------------
8. Commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
-----------
9. Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
--------
10. Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
---------
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
11. Scope of Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
------------------
12. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
-------
13. Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
----------------
14. Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
----------------------
15. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
------------
16. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
-------------
17. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
-----------
18. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
---------------
19. No Solicitation; Best Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
-----------------------------
</TABLE>
ii
<PAGE> 4
A+ SHAREHOLDERS' OPTION AND SALE AGREEMENT
A+ SHAREHOLDERS' OPTION AND SALE AGREEMENT, dated as of May 16, 1996 (this
"Agreement"), by and among Metrocall, Inc., a Delaware corporation ("MC"), and
the shareholders identified on Annex I hereto (each, a "Shareholder" and
collectively, the "Shareholders") of A+ Network, Inc., a Tennessee corporation
("AN").
WHEREAS, MC and AN have entered into an Agreement and Plan of Merger of
even date herewith (the "Merger Agreement"), pursuant to which it is intended
that a business combination be accomplished by MC commencing a cash tender
offer (the "Offer") for certain issued and outstanding shares of common stock
of AN, $.01 par value (the "Shares"), together with the related share purchase
rights (the "Rights") issued pursuant to the Rights Agreement dated February
16, 1995 by and between AN and First Union National Bank of North Carolina, as
Rights Agent (the "Rights Plan"), to be followed by a merger of AN with and
into MC (the "Merger");
WHEREAS, as of the date hereof, each of the Shareholders is beneficial
owner of, and, except for the RR Option Shares (as defined below), has the sole
right to vote and dispose of, the number of Shares (together with the related
rights) which is set forth opposite such Shareholder's name in Annex II (the
"Owned Shares"); and
WHEREAS, as a condition to its willingness to enter into the Merger
Agreement, MC has required that each of the Shareholders agree, and each of the
Shareholders is willing to agree, upon the terms and subject to the conditions
set forth herein, to grant MC certain rights with respect to certain of the
Owned Shares.
NOW, THEREFORE, in consideration of the foregoing and the agreements set
forth below, the parties hereto agree as follows:
1. Certain Definitions.
"Adjusted Owned Shares" shall mean such number of Shares, as selected by
MC, that in the aggregate is greater than 40%, but does not exceed 49.9% (or
such lesser percentage as may be required by applicable law), of the issued and
outstanding Shares on the date of calculation. The RR Option Shares shall be
disregarded for purposes of calculating the Adjusted Owned Shares for each
Shareholder's pro rata share under Section 3.3.1.
"AN Acquisition Proposal" shall mean any proposal relating to (i) a
possible acquisition of AN, whether by way of merger, purchase of all or
substantially all of the assets of AN, or any similar transaction, or (ii) a
tender offer for more than 5% of the Shares (excluding AN Pending Transactions
as defined in the Merger Agreement or any other transactions permitted by
Section 5.1(a)of the Merger Agreement).
1
<PAGE> 5
"AN Securities" shall mean the Owned Shares, together with all options and
other rights to purchase Shares granted to MC pursuant to this Agreement.
"Average MC Share Price" shall mean the average of the last reported bid
price per MC Share on the Nasdaq National Market for the 50 consecutive trading
days ending on the trading day that is five trading days prior to the relevant
date of Closing, provided that the Average MC Share Price shall not exceed
$21.88 or be less than $17.90.
"Cash Purchase Shares" shall mean a number of Shares equal to 40% of the
number of Owned Shares.
"Closing" shall mean the closing of the sale of any AN Securities, which in
each case shall occur at the offices of Wilmer, Cutler & Pickering, 2445 M
Street, N.W., Washington D.C. 20037, at 11:00 a.m. (Eastern Time) on the date
specified herein for such closing.
"Conversion Ratio" shall have the meaning set forth in Section 2.2 of the
Merger Agreement, provided, that for the purposes of this Agreement, the
Conversion Ratio shall be calculated using the Average MC Share Price as
defined above.
"Effective Time" shall have the meaning set forth in Section 1.5 of the
Merger Agreement.
"Evidence of Financing" shall mean a letter of credit or other acceptable
financing commitment satisfying MC's obligations with respect to the Scenario I
Option under Section 2.5 of the Merger Agreement.
"Exercise Conditions" shall have the meaning set forth in Section 3.2.2(c).
"FCC" shall mean the Federal Communications Commission.
"Final Regulatory Order" shall mean a Regulatory Order as to which (i) no
petition for rehearing or reconsideration of the action or order is pending
before the FCC and the time for filing any such petition has passed; and (ii)
the FCC does not have the action or order under reconsideration on its own
motion and the time for such reconsideration has passed.
"MC Securities" shall mean the MC Shares and VCRs issuable to the
Shareholders pursuant to this Agreement or the Merger Agreement.
"MC Shares" shall mean duly authorized, validly issued, fully paid and
nonassessable shares of common stock of MC, $.01 par value.
"Option Period" shall have the meaning set forth in Section 3.2.2(b).
"RR Option Shares" shall have the meaning set forth in Section 2.1.3(b).
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"Regulatory Order" shall mean an action taken or order issued by the FCC
with respect to the AN Licenses (as defined in the Merger Agreement) as to
which (i) no request for stay by the FCC of the action or order is pending, no
such stay is in effect, and, if any deadline for filing any such request is
designated by statute or regulation, it has passed; and (ii) with respect to an
action taken or order issued by the FCC granting consent to the Merger, such
consent shall be without material adverse conditions, other than conditions
that have been agreed to by AN and MC or that are routine conditions with
respect to transfers of this nature.
"Scenario I Option" shall have the meaning given such term in Section
3.2.2.
"Scenario I Option Shares" shall mean, with respect to each Shareholder,
all of the Owned Shares owned by such Shareholder (other than the Cash Purchase
Shares previously purchased by MC, or with respect to Mr. Russenberger, the RR
Option Shares).
"Scenario II Option" shall have the meaning given such term in Section
3.3.2.
"Scenario II Option Shares" shall mean, with respect to each Shareholder,
all of the Owned Shares owned by such Shareholder (other than the Adjusted
Owned Shares previously purchased by MC, or with respect to Mr. Russenberger,
the RR Option Shares).
"Scenario II Tender Offer" shall have the meaning given such term in
Section 3.3.2 hereof.
"Scenario II Trigger Event" shall occur if (i) prior to expiration of the
Offer, AN receives an AN Acquisition Proposal or an event described in Section
7.1(d)(iv) of the Merger Agreement occurs, (ii) the Offer expires in accordance
with its terms (including any extension permitted under Section 1.1 of the
Merger Agreement) without any Shares accepted for payment in circumstances in
which all conditions to the Offer other than the Minimum Condition or the
condition relating to an injunction in paragraph (c)(II) of Annex A to the
Merger Agreement, shall have been satisfied, and (iii) as soon as practicable,
but in no event later than two business days after the expiration of the Offer,
MC gives notice to AN and the Shareholders of its election not to terminate the
Merger Agreement pursuant to Section 7.1(d) (iv) or (v) of the Merger
Agreement, but in lieu thereof shall have elected to exercise its rights under
Section 3.3 hereof.
"Scenario II Trigger Shares" shall mean the Adjusted Owned Shares minus the
Cash Purchase Shares.
"VCR" has the same meaning as set forth in Section 2.1 of the Merger
Agreement.
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2. Representations and Warranties.
2.1. Representations and Warranties of the Shareholders. Each
of the Shareholders, individually and not jointly, represents and warrants to
MC with respect to itself as follows:
2.1.1 Binding Agreement. Such Shareholder has the capacity to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. Such Shareholder has duly and validly executed and
delivered this Agreement and this Agreement constitutes a legal, valid and
binding obligation of such Shareholder, enforceable against such Shareholder in
accordance with its terms, except that (i) such enforcement may be subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws, now or hereafter in effect, affecting creditors' rights generally and
(ii) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
2.1.2 No Conflict. Neither the execution and delivery of this
Agreement, the consummation of the transactions contemplated hereby, nor the
compliance with any of the provisions hereof, (a) require on the part of such
Shareholder, any permit, authorization, consent or approval of, or filing
(except for filings under the Securities Exchange Act of 1934, as amended (the
"1934 Act"), the Securities Act of 1933 (the "Securities Act"), the
Communications Act of 1934, as amended (the "Communications Act"), the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 ("HSR Act"), or state
public utility or public service laws (if any)) with, or notification to, any
governmental entity, (b) result in a violation or breach of, or constitute
(with or without notice or lapse of time or both) a default (or give rise to
any right of termination, cancellation or acceleration) under, any contract,
agreement, instrument, commitment, arrangement or understanding with respect to
any of the Owned Shares owned by such Shareholder, or result in the creation of
a security interest, lien, charge, encumbrance, equity or claim upon such
shares, (c) require any material consent, authorization or approval of any
person other than a governmental entity, or (d) violate any order, writ,
injunctions decree, statute, rule or regulation applicable to such Shareholder
or to the Owned Shares owned by such Shareholder, excluding from the foregoing
clauses (a)-(d) such violations, breaches or defaults which would not,
individually or in the aggregate, prevent such Shareholder from consummating
the transactions contemplated hereby.
2.1.3 Ownership of Owned Shares. (a) With respect to all the
Owned Shares (other than the RR Option Shares), except as otherwise provided in
this Agreement, such Shareholder is the beneficial owner of the number of
Shares set forth opposite such Shareholder's name in Annex II hereto, free and
clear of any security interests, liens, charges, encumbrances, equities,
claims, options (other than pledges pursuant to commercially customary brokers'
margin accounts which would not restrict the exercise of any of the options
hereunder upon payment of the margin loan) or as otherwise set forth in Annex
II or limitations of whatever nature and free of any other limitation or
restriction (including any restriction on the right to
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<PAGE> 8
vote, sell or otherwise dispose of the Owned Shares), other than those arising
under the Securities Act of 1933 and applicable state securities laws.
(b) With respect to 299,375 of the Owned Shares of which Mr.
Ray Russenberger is the beneficial owner, (the "RR Option Shares"), Mr.
Russenberger has granted options in favor of certain persons and, therefore,
the RR Option Shares are not available for sale hereunder.
2.1.4 Purchase Not for Distribution. Any MC Securities will not
be acquired with a view to the public distribution thereof and will not be
transferred or otherwise disposed of except in a transaction registered or
exempt from registration under the Securities Act, and in compliance with
applicable state securities laws.
2.1.5 Tax Representation. Each of the Shareholders has no
present intention to transfer any MC Securities.
2.2 Representations and Warranties of MC. MC represents and warrants
to the Shareholders as follows:
2.2.1 Binding Agreement. MC is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Delaware
and has full corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by MC and the consummation of the
transactions contemplated hereby have been duly and validly authorized by the
Board of Directors of MC. MC has duly and validly executed this Agreement and
this Agreement constitutes a legal, valid and binding obligation of MC,
enforceable against MC in accordance with its terms, except that (i) such
enforcement may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws, now or hereafter in effect,
affecting creditors' rights generally and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
2.2.2 No Conflict. Neither the execution and delivery of this
Agreement, the consummation by MC of the transactions contemplated hereby, nor
the compliance by MC with any of the provisions hereof will (a) conflict with
or result in a breach of any provision of its Certificate of Incorporation or
By-laws, (b) require any permit, authorization, consent or approval of, or
filing (except for filings under the 1934 Act, the Securities Act, the HSR Act,
the Communications Act, or state public utility or public service laws (if
any)) with, or notification to, any governmental entity, (c) result in a
violation or breach of, or constitute (with or without notice or lapse of time
or both) a default (or give rise to any right of termination, cancellation or
acceleration) under any contract, agreement, instrument, commitment,
arrangement or understanding, (d) require any material consent, authorization
or approval of any person other than a governmental entity, or (e) violate any
order, writ, injunction, decree or law applicable to MC, excluding from the
foregoing clauses (b)-(e) such
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violations, breaches or defaults which would not, individually or in the
aggregate, prevent the MC from consummating the transactions contemplated
hereby.
2.2.3 Purchase Not for Distribution. The AN Securities are not
being acquired with a view to the public distribution thereof (except as
provided in Section 5.16 of the Merger Agreement) and will not be transferred
or otherwise disposed of except in a transaction registered or exempt from
registration under the Securities Act and in compliance with applicable state
securities laws.
2.2.4 MC Securities.
The MC Securities have been duly authorized, and, if issued, will be
validly issued, and any MC Shares issuable pursuant hereto will be fully paid
and nonassessable and not subject to preemptive (or similar) rights; and any
VCRs issuable pursuant hereto will represent unsecured obligations of MC
ranking pari passu with all other general obligations of MC.
3. Transactions for Shares
3.1 Certain Prohibited Transfers. Each Shareholder agrees not, during
the term of this Agreement, to:
(a) grant any proxies or enter into a voting agreement or
other arrangement with respect to any Owned Shares (other than the RR Option
Shares) owned by such Shareholder, other than this Agreement;
(b) deposit any Owned Shares owned by such Shareholder into a
voting trust;
(c) sell, transfer, pledge, encumber, assign or otherwise
dispose of, or enter into any contract, option or other arrangement or
understanding with respect to the sale, transfer, pledge, encumbrance,
assignment or other disposition of, any Owned Shares held by such Shareholder,
other than pursuant to this Agreement or, with respect to Mr. Russenberger,
pursuant to the exercise of options to purchase the RR Option Shares; provided,
that each Shareholder may pledge its Owned Shares pursuant to a bona fide
pledge to secure indebtedness of such Shareholder, and may transfer Shares by
gift to or for the benefit of immediate family members, provided further, that
as a condition to any such pledge or gift the pledgee or donee must acknowledge
and agree to be bound by the provisions of this Agreement with respect to such
Owned Shares; nor
(d) tender any Owned Shares pursuant to the Offer or any other
tender offer.
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3.2 Scenario I Transactions.
3.2.1 Cash Purchase of Shares. (a) Subject to and conditioned
upon the consummation of the Offer, each Shareholder agrees to sell and MC
agrees to purchase from the Shareholders on a pro rata basis the Cash Purchase
Shares for a cash purchase price of $21.10 per Share, or such higher price as
shall be paid for Shares tendered pursuant to the Offer.
(b) The Closing of the sale of the Cash Purchase Shares shall
occur no later than the first business day after which payment is made for any
Shares MC has accepted for payment under the Offer. At the Closing each
Shareholder will deliver to MC a certificate or certificates representing the
Cash Purchase Shares owned by such Shareholder, and MC shall make payment of
the purchase price therefor to each Shareholder in immediately available
funds.
3.2.2 Scenario I Option.
(a) Each Shareholder hereby grants to MC the exclusive and
irrevocable option to purchase all, but not less than all, the Scenario I
Option Shares, upon the terms and subject to conditions set forth herein (the
"Scenario I Option").
(b) The Scenario I Option may be exercised by MC in whole, but
not in part, following satisfaction of the Exercise Conditions, for a period
commencing upon the later to occur of (i) 61 days after MC has delivered the
Evidence of Financing and (ii) the receipt by MC of a Regulatory Order from the
FCC, and ending on the earlier of six months after the Closing of the purchase
by MC of the Cash Purchase Shares or the termination of this Agreement in
accordance with its terms (the "Option Period").
(c) For purposes hereof, the Exercise Conditions, each of
which is required to be satisfied prior to the exercise of the Scenario I
Option, shall be: (i) the occurrence of the Closing of the purchase by MC of
the Cash Purchase Shares; (ii) the approval and adoption of the Merger
Agreement by the requisite vote of the holders of capital stock of MC in
accordance with the provisions of the Delaware General Corporation Law and the
Certificate of Incorporation and By-Laws of MC and the requirements of the
Nasdaq National Market System; and (iii) the absence of any material breach by
MC of its obligations and agreements in the Merger Agreement that is continuing
and has not been cured.
(d) In the event MC is entitled to and wishes to exercise the
Scenario I Option, MC shall send a written notice to the Shareholders
specifying a date (not less than five nor more than ten business days from the
date such notice is given) for the Closing of the purchase of all, but not less
than all, the Scenario I Option Shares.
(e) The consideration to be paid to each Shareholder upon
exercise by MC of the Scenario I Option shall equal (i) such number of MC
Shares equal to the Conversion Ratio as of the date of the Closing of the
Scenario I Option, multiplied by the number of
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<PAGE> 11
Scenario I Option Shares owned by such Shareholder, (ii) a number of VCRs to
become effective upon the Effective Time, in an amount equal to the number of
MC Shares to be received pursuant to clause (i), plus cash, if any, for
fractional MC Shares and VCRs calculated pursuant to the formula in Section
2.3(f) of the Merger Agreement.
(f) At the Closing of the Scenario I Option, each Shareholder
will deliver to MC a certificate or certificates representing the Scenario I
Option Shares owned by such Shareholder, duly endorsed for transfer or
accompanied by appropriate stock powers, and MC shall issue or deliver to such
Shareholder certificates representing the number of MC Shares and VCRs to which
such Shareholder is entitled, and payment will be made in immediately available
funds representing any cash for fractional MC Shares or VCRs to which such
Shareholder is entitled. MC shall pay any transfer tax arising out of the
exercise of the Scenario I Option.
(g) In the event that the Merger Consideration per Share (as
defined in the Merger Agreement) includes a greater number of MC shares or VCRs
than has been or would otherwise be paid pursuant to Section 3.2.2(e), with
respect to each Scenario I Option Share held by a Shareholder immediately prior
to the closing of the Scenario I Option, MC shall pay each Shareholder such
additional MC Shares and VCRs, together with cash for fractional Shares and
VCRs as are necessary to provide each Shareholder the same Merger Consideration
per Share as all shareholders of AN receive in the Merger.
3.3 Scenario II Transactions.
3.3.1 Scenario II Trigger Event
(a) In the event of a Scenario II Trigger Event, MC shall have
the right, but not the obligation, to purchase from the Shareholders on a pro
rata basis all, but not less than all, the Adjusted Owned Shares, as follows:
(i) all, but not less than all, of the Cash Purchase Shares,
for a purchase price of $21.10 per Share in cash, or, if higher, the
highest price per Share as had been offered by MC pursuant to the Offer
prior to its termination or expiration; and
(ii) the Scenario II Trigger Shares, for consideration to be
paid to each Shareholder equal to (A) such number of MC Shares equal to the
Conversion Ratio as of the date of the Closing of the purchase of the
Scenario II Trigger Shares, multiplied by the number of Scenario II Trigger
Shares, (B) a number of VCRs to become effective upon the Effective Time,
in an amount equal to the number of MC Shares to be received pursuant to
Clause (A), plus cash, if any, for fractional MC Shares and VCRs calculated
pursuant to the formula in Section 2.3(f) of the Merger Agreement.
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(iii) in the event that the Merger Consideration per Share (as
defined in the Merger Agreement) includes a greater number of MC shares or
VCRs than has been or would otherwise be paid pursuant to Section
3.3.1(a)(ii), with respect to each Scenario II Trigger Share held by a
Shareholder immediately prior to the Closing of the sale of the Adjusted
Owned Shares, MC shall pay each Shareholder such additional MC Shares and
VCRs, together with cash for fractional Shares and VCRs as are necessary to
provide each Shareholder the same Merger Consideration per Share as all
shareholders of AN receive in the Merger.
(b) The Closing of the sale of the Adjusted Owned Shares will
take place no later than two business days after the occurrence of the Scenario
II Trigger Event. Notwithstanding the foregoing, if, prior to the date of such
Closing, a court of competent jurisdiction shall have enjoined the consummation
of the transactions contemplated by this Agreement, MC shall have the right to
extend the date of such Closing for up to 60 days and so long as MC is not in
breach of Section 18, to control the proceedings to seek to vacate or remove
the injunction so long as MC is diligently pursuing such remedy, provided, MC
may not settle any litigation involving such injunction in a manner adverse to
any of the Shareholders without the prior consent of all the Shareholders.
(c) At the Closing of the sale of the Adjusted Owned Shares,
each Shareholder will deliver to MC a certificate or certificates representing
the Adjusted Owned Shares, duly endorsed for transfer or accompanied by
appropriate stock powers, and MC shall make payment of cash in immediately
available funds representing the purchase price for the Cash Purchase Shares
owned by such Shareholder and, if applicable, MC shall issue or deliver to such
Shareholder certificates representing the number of MC Shares and VCRs to which
such Shareholder is entitled pursuant to this Section 3.3.1, and shall make
payment in immediately available funds representing any cash for fractional MC
Shares or VCRs to which such Shareholder is entitled.
3.3.2 Scenario II Option. Subject to the Closing of the sale of the
Adjusted Owned Shares, MC shall use its reasonable best efforts, to the extent
permitted by applicable law, including the receipt of a Regulatory Order, to
commence a new tender offer pursuant to which MC shall offer to purchase no
less than the number of Shares constituting the Minimum Condition for the Offer
at a price no less than the highest price offered in the Offer ("Scenario II
Tender Offer"). In such event, and subject to and conditioned upon the
purchase of Shares pursuant to the Scenario II Tender Offer, each Shareholder
hereby grants to MC the exclusive and irrevocable option during the Option
Period, to purchase all, but not less than all, of the Scenario II Option
Shares (the "Scenario II Option"), which Option shall have the same terms and
conditions (other than the number of shares to be purchased) as the Scenario I
Option.
3.3.3 Scenario II Mandatory Share Purchase. Subject to the Closing of
the sale of the Adjusted Owned Shares, in the event that a Scenario II Tender
Offer expires without MC purchasing any shares, MC shall use its reasonable
best efforts to acquire as soon as practicable
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the remainder of the Scenario II Option Shares. In such event, each
Shareholder hereby grants to MC the exclusive and irrevocable option during the
Option Period ("Mandatory Option") to purchase all, but not less than all, of
the remainder of the Scenario II Option Shares and MC shall be required to
exercise such option as promptly as possible. MC shall not effect the Merger
unless prior to the Effective Time, MC shall have exercised the Mandatory
Option, which shall have the same terms and conditions (other than the number
of shares to be purchased) as the Scenario I Option.
3.3.4 Savings Clause. Notwithstanding the Scenario I Option and the
Scenario II Option, each Shareholder shall have the right upon the terms and
conditions of the Merger Agreement, to receive the Merger Consideration for
any Shares owned by such Shareholder as of the Effective Time.
4. Voting Agreement and Proxy. (a) The Owned Shares will be voted
during the term of this Agreement as follows to the extent permitted by
applicable law:
(i) in favor of the transactions contemplated by the
Merger Agreement; and
(ii) against (A) any extraordinary corporate
transaction, such as a merger, rights offering, reorganization,
recapitalization or liquidation involving AN or any of its subsidiaries,
(B) a sale or transfer of a material amount of assets of AN or any of its
subsidiaries or the issuance of any securities of AN or any subisidiary.
(b) Each Shareholder constitutes and appoints MC or its officers, and
each of them, with full power of substitution, to be his true and lawful proxy
and attorney-in-fact during the Option Period to vote all Owned Shares (other
than Shares purchased by MC) solely with respect to the matters described in,
and in accordance with, Section 4(a). This proxy shall be deemed coupled with
an interest, and is irrevocable. In lieu of MC exercising its proxy, MC may
elect to have each Shareholder vote its respective Owned Shares in accordance
with Section 4 (a), provided that such Shares may be voted in person or by
proxy.
(c) Nothing contained in this Agreement (including without limitation
Sections 3 and 4) shall give MC any control or responsibility for AN's
facilities, including without limitation control of use of the facilities;
daily operations; policy decisions, including preparing and filing applications
with the FCC; employment, supervision and dismissal of personnel; payment of
financing obligations, including expenses arising out of operations. MC shall
not receive any monies and profits derived from the operation of the AN
facilities.
5. Legends. (a) Upon issuance to MC of any Shares upon
purchase thereof pursuant to this Agreement, such Shares shall be endorsed with
a restrictive legend which shall read substantially as follows:
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"THE TRANSFER OF THE STOCK REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO
RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
PURSUANT TO THE TERMS OF AN AGREEMENT AND PLAN OF MERGER DATED AS OF MAY
15, 1996. A COPY OF SUCH AGREEMENT WILL BE PROVIDED TO THE HOLDER HEREOF
WITHOUT CHARGE UPON RECEIPT BY THE ISSUER OF A WRITTEN REQUEST THEREFOR."
(b) Upon issuance to each Shareholder of any Shares pursuant to this
Agreement, all certificates representing the MC Securities acquired by such
Shareholder shall be endorsed with a restrictive legend which shall read
substantially as follows:
"THE TRANSFER OF THE STOCK REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO
RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF 1933, AS AMENDED."
6. Registration.
(a) Shelf Registration. As promptly as practicable but no
later than 90 days after the earlier of the first Closing in which MC
Securities are received by the Shareholders, or, if any of the MC Securities
received by the Shareholders in the Merger have not been registered, the
Effective Time, MC shall file and use its best efforts to cause to be declared
effective a "shelf" registration statement (the "Registration Statement") on
any appropriate form pursuant to Rule 415 (or similar rule that may be adopted
by the Securities and Exchange Commission ("SEC")) under the Securities Act for
all such unregistered MC Securities received by the Shareholders (the
"Registrable Securities"), which form shall be available for the sale of the
Registrable Securities in accordance with the intended method or methods of
distribution thereof. Except as set forth below, MC agrees to use its best
efforts to keep the Registration Statement continuously effective and usable
for resale of Registrable Securities, for a period of 36 months from the first
Closing in which MC Securities are received by the Shareholders or such shorter
period which will terminate upon the earlier of (i) consummation of the Merger
and the registration on a Registration Statement of all the MC Securities
issued to the Shareholders pursuant to this Agreement or the Merger (ii) when
all the Registrable Securities have been sold pursuant to the Registration
Statement or (iii) in the case of an underwritten public offering, when such
underwriter has completed the distribution of all the Registrable Securities
(the "Effective Period"). MC shall prepare and file with the SEC amendments
and post-effective amendments to the Registration Statement and such amendments
and supplements to the prospectus used in connection therewith as may be
necessary to maintain the effectiveness of such registration during the
Effective Period or as may be required by the rules, regulations or
instructions applicable to the registration form utilized by MC or by the
Securities Act or rules and regulations thereunder for shelf registration or
otherwise necessary to keep the Registration Statement effective for the
Effective Period and cause the prospectus as so supplemented to be filed
pursuant to Rule 424 under the Securities Act, and to otherwise comply with the
provisions of the Securities Act during the Effective Period; provided, that
before filing
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the Registration Statement or a prospectus contained therein, or any amendments
or supplements thereto, MC will furnish to the Shareholders and their counsel
for review and comment, copies of all documents proposed to be filed. The
selling Shareholders shall have the right to select the intended method of
distribution under the Registration Statement.
(b) Blue Sky. MC shall use its best efforts to qualify all
Registrable Securities under any applicable state securities laws; provided,
however, that purchaser shall not be required to qualify as a foreign
corporation or execute a general consent to service of process in any
jurisdiction.
(c) Selection of Underwriters. If any offering pursuant to
the Registration Statement is an underwritten offering, MC will select a
managing underwriter, which managing underwriter shall be reasonably
satisfactory to the selling Shareholders holding a majority in number of the
Registrable Securities; provided, however, that the selling Shareholders
holding a majority in number of the Registrable Securities shall be entitled to
select one co-managing underwriter, which co-managing underwriter shall be
reasonably satisfactory to MC.
(d) Blackout Period. MC shall be entitled to (i) postpone the
filing or effectiveness of the Registration Statement, or (ii) if effective,
elect that the Registration Statement not be useable and require the
Shareholders to suspend sales pursuant to the prospectus contained therein, for
a reasonable period of time, but not in excess of 60 days (a "Blackout
Period"), if the MC determines in good faith that the registration and
distribution of Registrable Securities (or the use of the Registration
Statement or related prospectus) would interfere with any pending material
acquisition, material corporate reorganization or any other material corporate
development involving the MC or any of its subsidiaries or would require
premature disclosure thereof. MC shall promptly give the Shareholders written
notice of such determination, containing a general statement of the reasons for
such postponement or restriction on use and an approximation of the anticipated
delay; provided, however, that the aggregate number of days included in all
Blackout Periods during any consecutive 12 months during the Effective Period
shall not exceed 120 days.
(e) Holdback Agreement. If during the period commencing 90
days after the effectiveness of the Registration Statement (i) MC shall file a
registration statement (other than in connection with the registration of
securities issuable pursuant to an employee stock option, stock purchase or
similar plan or pursuant to a merger, exchange offer or a transaction of the
type specified in Rule 145(a) under the Securities Act) with respect to MC
Securities and (ii) with reasonable prior notice, MC (in the case of a
non-underwritten offering by MC pursuant to such registration statement)
advises the Shareholders in writing that a public sale or distribution of
Registrable Securities would adversely affect such offering or the managing
underwriter (in the case of an underwritten offering by MC pursuant to such
registration statement) advises MC and the Shareholders in writing that a
public sale or distribution of Registrable Securities would adversely affect
such offering, then each Shareholder shall, to the extent not prohibited by
applicable law, (x) refrain from effecting any
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public sale or distribution of such Registrable Securities commencing on the
effectiveness of such registration statement, (y) be entitled to include such
Registrable Securities in such registration statement, subject to customary
underwriter cut back, and sell such Registrable Securities pursuant thereto,
and (z) sign a customary lock-up agreement with the managing underwriter (in
the case of an underwritten offering) or the MC of scope and duration identical
to the scope and duration of the lock-up agreement signed by the MC and each
director and executive officer of the MC, but in no event to exceed 90 days.
Notwithstanding the foregoing, in the event the Registrable Securities held by
the selling Shareholders are cut back in the registration statement of MC
pursuant to clause (y) and the selling Shareholders may only include in the
registration statement pursuant to clause (y) an amount of Registrable
Securities less than the greater of (A) 250,000 MC Shares and 250,000 VCRs (as
adjusted for stock splits, stock dividends and similar events) and (B) 25% of
the number of MC Securities registered pursuant to such registration statement,
then the provisions of this clause (e) shall not restrict the sale of
Registrable Securities by the selling Shareholders pursuant to the Registration
Statement.
(f) Expenses. The Registration Statement shall be prepared
and filed at MC's expense, including underwriting discounts or commissions,
brokers' fees, "blue sky" fees and the fees and disbursements of purchaser's
counsel and accountants related thereto, and the fees and disbursements of one
counsel for the Shareholders.
(g) Shareholders Information. The Shareholders shall provide
in writing all information reasonably requested by MC for inclusion in or in
connection with the Registration Statement and any such information shall not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(h) Underwriting Agreement. In connection with any
underwritten registration pursuant to this Section 6, (i) MC and the
Shareholders shall provide each other and any underwriter of the offering, if
any, with customary representations, warranties, covenants, indemnification and
contribution in connection with such registration, (ii) MC shall obtain
opinions of counsel to the MC and updates thereof (which counsel and opinions
(in form, scope and substance) shall be reasonably satisfactory to the managing
underwriters, if any, and the Shareholders) addressed to each selling
Shareholder and the underwriters, if any, covering the matters customarily
covered in opinions requested in comparable offerings, and (iii) MC shall
obtain "cold comfort" letters and updates thereof from the MC's independent
certified public accountants addressed to the selling Shareholders and the
underwriters, if any, such letters to be in customary form and covering matters
of the type customarily covered in "cold comfort" letters by independent
certified public accountants in connection with comparable offerings.
(i) Listing. MC will promptly file an application to
authorize for quotation the MC Shares to be acquired hereunder on the Nasdaq
National Market or such other securities exchange on which MC shares are then
listed and will use its best efforts to obtain approval of such listing as soon
as practicable.
13
<PAGE> 17
(j) Copies. MC shall furnish to each Shareholder such number
of copies of the Registration Statement and of each amendment and
post-effective amendment thereto, the prospectus and prospectus supplement, as
applicable, in order to facilitate the disposition of the Registrable
Securities by such Shareholder in accordance with this Section 6.
(k) Notifications. MC shall notify each Shareholder if MC
becomes aware that the prospectus included in the Registration Statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements there if not misleading in light of the circumstances then existing,
and subject to Section 6 (d), at the request of any such Shareholder, prepare
and furnish to such Shareholder a reasonable number of copies of an amendment
or Supplement to the Registration Statement or related prospectus as may be
necessary so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus shall not include an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in light of
the circumstances then existing.
(l) Due Diligence. Upon reasonable notice, MC shall afford
access, during normal business hours, to any Shareholder, any underwriter
participating in any disposition pursuant to the Registration Statement, and
any attorney, accountant or other agent retained by any such Shareholder or
underwriter, to all historical financial and other records and other pertinent
information and corporate documents and properties of any of MC and its
subsidiaries and affiliates, as shall be reasonably necessary to enable them to
exercise their due diligence responsibility with respect to the Registration
Statements.
(m) Rule 144. MC shall file all reports required to be filed
by it pursuant to the 1934 Act, such that the condition set forth in Rule
144(c) under the Securities Act, applying to the sale of MC Shares by the
Shareholders pursuant to Rules 144 and/or 145, shall be satisfied.
(n) Indemnification; Contribution. (i) Indemnification by MC.
MC agrees to indemnify each Shareholder, its officers and directors and each
person who controls such Shareholders (within the meaning of the Securities
Act), and any agent or investment adviser thereof against all losses, claims,
damages, liabilities and expenses (including reasonable attorneys' fees and
expenses of investigation) incurred by such party pursuant to any actual or
threatened action, suit, proceeding or investigation arising out of or based
upon (a) any untrue or alleged untrue statement of material fact contained in
the Registration Statement, any prospectus or preliminary prospectus, or any
amendment or supplement to any of the foregoing or any document incorporated by
reference therein or (b) any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein (in the case of a prospectus or a preliminary prospectus, in light of
the circumstances under which they were made) not misleading, except in each
case insofar as the same arise out of or are based upon, any such untrue
statement or omission made in reliance on and in conformity with information
with respect to such indemnified party furnished in writing to MC by such
14
<PAGE> 18
indemnified party or its counsel expressly for use therein. Notwithstanding
the foregoing provisions of this Section 6(n) (i), MC will not be liable to any
Shareholder or any other person, if any, who controls such Shareholder, under
the indemnity agreement in this Section 6(n)(i) for any such loss, claim,
damage, liability (or action or proceeding in respect thereof) or expense that
arises out of such Shareholder's failure to send or give a copy of the final
prospectus (at or prior to the written confirmation of the sale of the
Registrable Securities to such person) to the person asserting an untrue
statement or alleged untrue statement or omission or alleged omission contained
in any preliminary prospectus if such statement or omission was corrected in
such final prospectus and MC has previously furnished copies thereof in
accordance with this Agreement.
(ii) Indemnification by Shareholders. In connection with
the Registration Statement, each Shareholder will furnish to MC in writing such
information, including with respect to the name, address and the amount of
Registrable Securities held by such Shareholder, as MC reasonably requests for
use in such Registration Statement or the related prospectus and agrees to
indemnify and hold harmless severally and not jointly (in the same manner and to
the same extent as set forth in Section 6(n)(i)) MC and its affiliates,
directors, officers and controlling persons against any losses, claims, damages,
liabilities and expenses resulting from any untrue or alleged untrue statement
of a material fact or any omission of a material fact or any omission or alleged
omission of a material fact required to be stated in the Registration Statement
or prospectus or any amendment or supplement to either of them or necessary to
make the statements therein (in the case of a prospectus, in the light of the
circumstances under which they were made) not misleading, but only to the extent
that any such untrue statement or omission is made in reliance on and in
conformity with information with respect to such Shareholder furnished in
writing to purchaser by such Shareholder or its counsel specifically for
inclusion therein.
(iii) Conduct of Indemnification Proceedings. Any person
entitled to indemnification hereunder agrees to give prompt written notice to
the indemnifying party after the receipt by such indemnified party of any
written notice of the commencement of any action, suit, proceeding or
investigation or threat thereof made in writing for which such indemnified
party may claim indemnification or contribution pursuant to this Agreement
(provided that failure to give such notification shall not affect the
obligations of the indemnifying person pursuant to this Section 6(n) except to
the extent the indemnifying party shall have been actually prejudiced as a
result of such failure). In case any such action shall be brought against any
indemnified party and such indemnified party shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party, and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party shall not be liable to
such indemnified party under these indemnification provisions for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party. Notwithstanding the foregoing, the
indemnified party shall have the right to employ its own counsel in any such
case, but the fees
15
<PAGE> 19
and expenses of such counsel shall be at the expense of such indemnified party
unless (a) the employment of such counsel shall have been authorized in writing
by the indemnifying party in connection with the defense of such action, (b)
the indemnifying party shall not have employed counsel to take charge of the
defense of such action within a reasonable time after notice of commencement of
the action, or (c) the defendants in such action include both an indemnified
party and an indemnifying party and such indemnified party shall have
reasonably concluded that representation by the same counsel would present a
conflict of interest due to the availability to it of defenses which are
different from or additional to those available to the indemnifying party (in
which case the indemnifying party shall not have the right to direct the
defense of such action on behalf of the indemnified party or parties), in any
of which events all indemnified parties shall have the right to employ not more
than one counsel to represent all indemnified parties and the fees and expenses
of no more than one such separate counsel shall be borne by the indemnifying
party. The indemnifying party will not be subject to any liability for any
settlement made without its consent (which will not be unreasonably withheld).
(iv) Contribution. If the indemnification from the
indemnifying party provided for in this Section 6(n) is unavailable to an
indemnified party hereunder in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then the indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages, liabilities and expenses in such proportion as is appropriate to
reflect the relative fault of the indemnifying party and indemnified party in
connection with the actions which resulted in such losses, claims, damages,
liabilities and expenses, as well as any other relevant equitable
considerations. The relative fault of such indemnifying party and indemnified
party shall be determined by reference to, among other things, whether any
action in question, including any untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such indemnifying party or
indemnified party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount paid
or payable by a party as a result of the losses, claims, damages, liabilities
and expenses referred to above shall be deemed to include, subject to the
limitations set forth in Section 6(n)(iii), any legal and other fees and
expenses reasonably incurred by such indemnified party in connection with any
investigation or proceeding.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 6(n) were determined by pro
rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. Notwithstanding the provisions of this Section 6(n), no
Shareholder shall be required to contribute any amount in excess of the amount
by which the total price at which the Registrable Securities of such
Shareholder were offered to the public exceeds the amount of any damages which
such Shareholder has otherwise been required to pay by reason of such untrue
statement or omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled
to contribution from any person who was not guilty of such fraudulent
misrepresentation.
16
<PAGE> 20
If indemnification is available under this Section 6(n), the
indemnifying parties shall indemnify each indemnified party to the full extent
provided in Section 6(n)(i) or (ii), as the case may be, without regard to the
relative fault of said indemnifying parties or indemnified party or any other
equitable consideration provided for in this Section 6(n)(iv).
7. Specific Enforcement. The parties hereto acknowledge
that damages would be an inadequate remedy for a breach of this Agreement and
that the obligations of the parties hereto shall be specifically enforceable,
in addition to any other remedy which may be available at law or in equity.
8. Commissions. Each Shareholder and MC in connection
with the transactions contemplated hereby, severally agree to indemnify and
hold the other harmless from and against any and all claims, liabilities or
obligations with respect to any brokerage fees, commissions or finders' fees
asserted by any person on the basis of any act or statement alleged to have
been made by such party or its affiliate. MC acknowledges that Shareholders
shall have no liability for any fees of the AN Financial Adviser as described
in the Merger Agreement.
9. Expenses. Except as otherwise provided herein, all
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
expenses, provided that AN shall pay all expenses of the Shareholders in
connection with the preparation, negotiation and execution of this Agreement.
10. Amendment. This Agreement may not be modified,
amended, altered or supplemented except upon the execution and delivery of a
written agreement executed by the parties hereto.
11. Scope of Agreement. Nothing in this Agreement shall,
is intended to, or shall be construed to, limit or in any way restrict the
ability of any Shareholder to act in such Shareholder's capacity as an officer
or director of AN or to exercise or carry out such Shareholder's fiduciary
duties as an officer or director of AN, so long as such Shareholder fulfills
his obligations under this Agreement.
12. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given upon (a) transmitter's
confirmation of a receipt of a facsimile transmission, (b) confirmed delivery
by a standard overnight carrier or when delivered by hand or (c) the expiration
of five business days after the day when mailed by certified or registered
mail, postage prepaid, addressed at the following addresses (or at such other
address for a party as shall be specified by like notice).
17
<PAGE> 21
If to MC, to:
Metrocall, Inc.
6910 Richmond Highway
Alexandria, Virginia 22306
Attention: Vincent D. Kelly
Telecopy: (703) 768-9625
with a copy to:
Wilmer, Cutler & Pickering
2445 M Street, N.W.
Washington, D.C. 20037
Attention: George P. Stamas and Thomas W. White
Telecopy: (202) 663-6363
If to any Shareholder, to the address listed under such
Shareholder's name on Annex II hereto with copies to:
Waller Lansden Dortch & Davis
511 Union Street
Suite 2100
Nashville, TN 37219
Attention: Ralph W. Davis
Telecopy: (615) 244-6804
And
Hutchins, Wheeler & Dittmar
101 Federal Street
Boston, MA 02110
Attention: James Westra
Telecopy: (617) 951-1295
13. Entire Agreement. This Agreement (including the
documents and instruments referred to herein) constitutes the entire agreement
and supersedes all other prior agreements and understandings, both written and
oral, among the parties, or any of them, with respect to the subject matter
hereof.
14. Successors and Assigns. This Agreement shall not be
assigned by operation of law or otherwise without the prior written consent of
the other parties hereto, except that the rights of the parties under Section 6
hereof may be assigned to any transferee of 50,000 or more Registrable
Securities, provided such transferee assumes the transferor's obligations
thereunder. This Agreement will be binding upon, inure to the benefit of and
be enforceable by
18
<PAGE> 22
each party and such party's respective heirs, beneficiaries, executors,
representatives and permitted assigns.
15. Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one and the same instrument.
16. Governing Law. This Agreement shall be governed in
all respects, including validity, interpretation and effect, by the laws of the
State of Delaware (without giving effect to the provisions thereof relating to
conflicts of law).
17. Termination. This Agreement shall terminate on the
earliest of (i) the expiration of the Option Period, (ii) the purchase by MC of
all Owned Shares (other than the RR Option Shares) pursuant to this Agreement,
(iii) the agreement of the parties hereto to terminate this Agreement (iv)
consummation of the Merger, (v) two business days after termination or
expiration of the Offer without the purchase of any Shares pursuant thereto
unless a Scenario II Trigger Event shall have occured and MC shall have
purchased Shares in accordance with this Agreement, and (vi) termination of the
Merger Agreement pursuant to its terms, provided that in any event this
Agreement shall terminate on March 16, 1997, and provided further that the
provisions of Sections 8, 9 and 18 hereof shall survive indefinitely and the
provisions of Section 6 shall survive for the period provided therein.
18. Indemnification. Except as otherwise provided in
Section 6(n), MC shall indemnify, defend and hold harmless each Shareholder and
each officer, director, employee, affiliate or agent of each Shareholder from
and against all losses, claims, damages, liabilities, costs and expenses
(including attorney's fees and expenses) judgments, fines, losses, and amounts
paid in settlement in connection with any actual or threatened action, suit,
claim, proceeding or investigation (each a "Claim") to the extent that any such
Claim is based on, or arises out of, this Agreement or any of the transactions
contemplated hereby except to the extent such Claim arises from the gross
negligence or willful misconduct of such Shareholder. Such indemnification
shall be provided in the manner set forth in Section 6(n)(iii) hereof.
19. No Solicitation. Each Shareholder in its capacity
as shareholder of AN acknowledges and agrees for himself or itself to comply
with the provisions of Section 5.9 of the Merger Agreement regarding AN
Acquisition Proposals.
19
<PAGE> 23
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the Shareholders and a duly authorized officer of MC on the day and year
first written above.
METROCALL, INC.
By:/s/ VINCENT D. KELLY
-------------------------
Name: Vincent D. Kelly
Title: Vice President and
Chief Executive Officer
<PAGE> 24
ANNEX I
Signatures
/s/ RAY D. RUSSENBERGER
- ----------------------------------
Ray D. Russenberger
/s/ ELLIOTT H. SINGER
- ----------------------------------
Elliott H. Singer
/s/ IRBY C. SIMPKINS, JR.
- ----------------------------------
Irby C. Simpkins, Jr.
/s/ BROWNLEE O. CURRY
- ----------------------------------
Brownlee O. Curry
/s/ CHARLES A. EMLING, III
- ----------------------------------
Charles A. Emling, III
/s/ SUMMIT INVESTORS II, L.P.
- ----------------------------------
Summit Investors II, L.P.
/s/ SUMMIT VENTURES III, L.P.
- ----------------------------------
Summit Ventures III, L.P.
<PAGE> 25
ANNEX II
The Shareholders
<TABLE>
<S> <C> <C>
Number of Cash Purchase Shares
------------------------------
Name and Address: Number of Owned Shares (40%)
----------------- ---------------------- -----
Ray Russenberger 3,010,833(1)/ 1,204,333
c/o A+ Network, Inc.
40 South Palafox Street
Pensacola, FL 3250l
Fax: (904) 432-0308
Elliott H. Singer 1,229,170 491,668
c/o A+ Network, Inc.
2416 Hillsboro Rd.
Nashville, TN 37212
Fax: (615) 385-4265
Irby C. Simpkins 131,704 52,682
c/o Nashville Banner
1100 Broadway
Nashville, TN 37203
Fax: (615) 259-8871
Brownlee O. Curry 131,704 52,682
c/o Nashville Banner
1100 Broadway
Nashville, TN 37203
Fax: (615) 259-8871
</TABLE>
-----------------------
(1)/ Includes 299,375 shares subject to options granted by Mr. Russenberger.
Mr. Russenberger retains voting power with respect to these shares.
<PAGE> 26
<TABLE>
<S> <C> <C>
Chuck Emling 369,512(2)/ 147,805
c/o A+ Network, Inc.
40 South Palafox Street
Pensacola, FL 32501
Fax: (904) 432-0308
Summit Investors II, L.P. 8,223 3,288
c/o Bruce Evans
600 Atlantic Avenue
Suite 2800
Boston, MA 02210-2227
Fax: (617) 824-1100
Summit Ventures III, L.P. 644,397 257,759
c/o Bruce Evans
600 Atlantic Avenue
Suite 2800
Boston, MA 02210-2227
Fax: (617) 824-1100
</TABLE>
- ---------------
(2)/ Certain shares held by these individuals are subject to an
escrow agreement.
