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AMENDMENT NO. 3
TO
AGREEMENT AND PLAN OF MERGER
AMENDMENT dated as of July 24, 2000 (this "AMENDMENT") among Paging
Network, Inc., a Delaware corporation ("PAGENET"), Arch Communications Group,
Inc., a Delaware corporation ("ARCH"), and St. Louis Acquisition Corp., a
Delaware corporation and a wholly owned subsidiary of Arch ("MERGER SUB").
WHEREAS, PageNet, Arch and Merger Sub have previously entered into that
certain Agreement and Plan of Merger dated as of November 7, 1999, as amended on
January 7, 2000 and as further amended May 10, 2000, among PageNet, Arch and
Merger Sub (the "MERGER AGREEMENT"); and
WHEREAS, the respective Boards of Directors of PageNet, Arch and Merger
Sub have determined that it is in the best interests of PageNet or Arch, as the
case may be, and its respective stockholders to amend the Merger Agreement as
hereinafter set forth and have duly approved this Amendment and authorized its
execution and delivery.
NOW, THEREFORE, the parties hereto agree as follows:
1. All capitalized terms used herein, unless otherwise defined herein,
shall have the meanings given them in the Merger Agreement, and each reference
in the Merger Agreement to "this Agreement", "hereof", "herein", "hereunder" or
"hereby" and each other similar reference shall be deemed to refer to the Merger
Agreement as amended hereby. All references to the Merger Agreement in any other
agreement between PageNet and Arch relating to the transactions contemplated by
the Merger Agreement shall be deemed to refer to the Merger Agreement as amended
hereby.
2. Section 4.1(a) of the Merger Agreement is hereby deleted in its
entirety and replaced with the following:
"(a) MERGER CONSIDERATION. Each share of common stock, par value $0.01
per share, of PageNet (each, a "PAGENET SHARE") issued and outstanding
immediately prior to the Effective Time (excluding PageNet Shares (collectively,
"EXCLUDED PAGENET SHARES") that are owned by Arch, Merger Sub or any direct or
indirect, wholly owned subsidiary of Arch or Merger Sub (collectively, the "ARCH
COMPANIES")), shall be converted into and become exchangeable for 0.08365112 of
a share (the "EXCHANGE RATIO") of common stock, par value $0.01 per share, of
Arch (the "ARCH COMMON STOCK"), subject to adjustment as provided in Section 4.4
(the "MERGER CONSIDERATION"). At the Effective Time, all PageNet Shares shall no
longer be outstanding, shall
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be canceled and retired and shall cease to exist, and each certificate (a
"CERTIFICATE") formerly representing any of such PageNet Shares (other than
Excluded PageNet Shares) shall thereafter represent only the right to receive
the Merger Consideration and the right, if any, to receive a distribution or
dividend pursuant to Section 4.2(b)(i), in each case without interest, or to
vote pursuant to Section 4.2(b)(ii)."
3. Section 6.2(a) of the Merger Agreement is hereby deleted in its
entirety and replaced with the following:
"(a) Except as set forth in Section 6.1(d) of this Agreement, PageNet
and Arch each agree that neither it nor any of its Subsidiaries nor any of the
officers and directors of it or its Subsidiaries shall, and that each shall
direct and use its best efforts to cause its and its Subsidiaries' employees,
agents and representatives (including any investment banker, attorney or
accountant retained by it or any of its Subsidiaries) (PageNet or Arch, as the
case may be, its respective Subsidiaries and their officers, directors,
employees, agents and representatives being referred to as its
"REPRESENTATIVES") not to, directly or indirectly, initiate, solicit, encourage
or otherwise facilitate any inquiries or the making of any proposal or offer
with respect to a merger, reorganization, acquisition, share exchange,
consolidation, business combination, recapitalization, liquidation, dissolution
or similar transaction involving it, or any purchase or sale of the consolidated
assets (including without limitation stock of Subsidiaries) of it or any of its
Subsidiaries, taken as a whole, having an aggregate value equal to 10% or more
of its assets, or any purchase or sale of, or tender or exchange offer for, 15%
or more of its equity securities (any such proposal or offer being referred to
as an "ACQUISITION PROPOSAL"). PageNet and Arch further agree that neither it
nor any of its Subsidiaries nor any of the officers and directors of it or its
Subsidiaries shall, and that it shall direct and use its best efforts to cause
its Representatives not to, directly or indirectly, have any discussion with, or
provide any confidential information or data to, any Person relating to, or in
contemplation of, an Acquisition Proposal or engage in any negotiations
concerning an Acquisition Proposal, or otherwise facilitate any effort or
attempt to make or implement an Acquisition Proposal; PROVIDED, HOWEVER, that
nothing contained in this Agreement shall prevent PageNet, Arch or their
respective Board of Directors from: (A) complying with Rule 14e-2 promulgated
under the Exchange Act with regard to an Acquisition Proposal; (B) engaging in
any discussions or negotiations with or providing any information to, any Person
in response to an unsolicited bona fide written Acquisition Proposal by any such
Person; or (C) subject to the obligation of (x) PageNet pursuant to Section
6.5(a) to duly convene a PageNet Stockholders Meeting at which a vote of the
stockholders of PageNet shall be taken regarding the adoption of this Agreement
and the approval of the Merger and the other transactions contemplated by this
Agreement, and (y) Arch pursuant to Section 6.5(b) to duly convene a Arch
Stockholders Meeting at which a vote of the stockholders of Arch shall be taken
with respect to the matters set forth in Section 6.5(b) of this Agreement,
recommending such an unsolicited bona fide written Acquisition Proposal to its
stockholders if, and only to the extent that, with respect to the actions
referred to in clauses (B) or (C): (i) its Board of Directors concludes in good
faith (after consultation with its outside legal counsel and its financial
advisor) that such Acquisition Proposal is reasonably capable of being
completed, taking into account all
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legal, financial, regulatory and other aspects of the proposal and the Person
making the proposal, and would, if consummated, result in a transaction more
favorable to its stakeholders from a financial point of view than the
transaction contemplated by this Agreement (any such Acquisition Proposal being
referred to herein as a "SUPERIOR PROPOSAL"); (ii) its Board of Directors
determines in good faith after consultation with outside legal counsel that such
action is necessary for the Board of Directors to comply with its fiduciary duty
to its stakeholders under applicable Law; and (iii) prior to providing any
information or data to any Person in connection with a Superior Proposal by any
such Person, its Board of Directors shall receive from such Person an executed
confidentiality agreement on terms substantially similar to those contained in
the Confidentiality Agreement (as defined in Section 6.15); PROVIDED, that such
confidentiality agreement shall contain terms that allow it to comply with its
obligations under this Section 6.2."
4. Section 6.16 of the Merger Agreement is hereby deleted in its
entirety and replaced with the following:
"6.16. TAX-FREE REORGANIZATION. Arch, Merger Sub and PageNet shall each
use its best efforts to cause the Merger to be treated as a reorganization
within the meaning of Section 368(a) of the Code and, with respect to PageNet,
to obtain an opinion of its counsel as contemplated by Section 7.3(d).
5. Section 6.22 of the Merger Agreement is hereby deleted in its
entirety and replaced with the following:
"6.22. DISTRIBUTION OF INTERESTS IN VAST TO PAGENET SHAREHOLDERS. Prior
to the Closing, the Board of Directors of PageNet will set aside for
distribution, solely to those holders of PageNet Shares immediately prior to the
acceptance of PageNet Notes in the PageNet Exchange Offer (the "VAST
DISTRIBUTION RECORD DATE"), with respect to each PageNet Share issued and
outstanding at such date, interests (the "DISTRIBUTED INTERESTS") representing
the portion of such equity ownership in Vast Solutions, Inc. (the "DISTRIBUTED
SUBSIDIARY") equal to (x) subject to Section 6.1(d), up to 20.0% of the total
equity ownership of the Distributed Subsidiary divided by (y) the number of
PageNet Shares issued and outstanding at the Vast Distribution Record Date (the
distribution of the Distributed Interests shall be referred to herein as the
"VAST DISTRIBUTION"). The distribution of the Distributed Interests shall be
conditioned upon the occurrence of (i) either (A) the satisfaction of the
PageNet Minimum Condition and the acceptance of the PageNet Notes or (B) the
filing of the Final Confirmation Order and (ii) the consummation of the Merger.
PageNet and the Distributed Subsidiary shall take such action reasonably
necessary (including filings with and no-action requests of the SEC and
communications with stockholders) to effectuate the Vast Distribution. Upon
satisfaction of the conditions to the Vast Distribution, Arch shall, in
accordance with Section 4.2 of this Agreement and in connection with the
exchange of PageNet certificates, use its reasonable best efforts to consummate,
or cause to be consummated the Vast Distribution as promptly as practicable
after the Effective Time."
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6. Section 7.2(d) of the Merger Agreement is hereby deleted in its
entirety and replaced with the following:
"(d) Intentionally Omitted."
7. The Merger Agreement, as amended hereby, is hereby ratified and
confirmed in all respects.
8. The Table of Contents in the Merger Agreement is hereby amended to
reflect all of the amendments to the Merger Agreement set forth herein.
* * *
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IN WITNESS WHEREOF, this Amendment has been duly executed and delivered
by the duly authorized officers of the parties to this Amendment as of the date
first written above.
PAGING NETWORK, INC.
By: /s/ John P. Frazee, Jr.
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Name: John P. Frazee, Jr.
Title: Chairman of the Board and
Chief Executive Officer
ARCH COMMUNICATIONS GROUP, INC.
By: /s/ J. Roy Pottle
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Name: J. Roy Pottle
Title: Executive Vice President
and Chief Financial Officer
ST. LOUIS ACQUISITION CORP.
By: /s/ J. Roy Pottle
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Name: J. Roy Pottle
Title: Executive Vice President
and Chief Financial Officer
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