UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Aquis Communications Group, Inc.
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(Name of Issuer)
Common Stock, $.01 par value per share
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(Title of Class of Securities)
038399101
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(CUSIP Number)
John B. Frieling
Deerfield Capital, L.P.
20 North Main Street, Suite 120
Sherborn, MA 01770
(508) 647-0081
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(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
copies to:
William P. Gelnaw, Jr., Esq.
Choate, Hall & Stewart
Exchange Place
53 State Street
Boston, MA 02109
March 31, 1999
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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 |_|.
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.
<PAGE>
SCHEDULE 13D
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CUSIP No. 038399101 Page _____ of ___ Pages
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Deerfield Capital, L.P.
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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
OO
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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
Massachusetts
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7 SOLE VOTING POWER
NUMBER OF --------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 780,280
EACH --------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH
--------------------------------------------------
10 SHARED DISPOSITIVE POWER
780,280
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
780,280
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES |_|
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.1%
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14 TYPE OF REPORTING PERSON
PN
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<PAGE>
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Deerfield Partners, LLC
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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
OO
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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
Massachusetts
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7 SOLE VOTING POWER
222,302
NUMBER OF --------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 780,280
EACH --------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH 222,302
--------------------------------------------------
10 SHARED DISPOSITIVE POWER
780,280
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,002,582
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES |_|
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.6%
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14 TYPE OF REPORTING PERSON
OO
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<PAGE>
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
John B. Frieling
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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
OO
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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
US
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7 SOLE VOTING POWER
NUMBER OF --------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 1,002,582
EACH --------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH
--------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,002,582
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,002,582
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES |_|
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.6%
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14 TYPE OF REPORTING PERSON
IN
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<PAGE>
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Mark H. Sandler
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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
OO
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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
US
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7 SOLE VOTING POWER
NUMBER OF --------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 1,002,582
EACH --------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH
--------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,002,582
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,002,582
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES |_|
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.6%
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14 TYPE OF REPORTING PERSON
IN
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<PAGE>
Item 1. Security and Issuer.
This statement relates to shares of Common Stock , $.01 par value per share
(the "Common Stock"), of Aquis Communications Group, Inc., a Delaware
corporation formerly known as Paging Partners Corporation (the "Issuer"). The
Issuer's principal executive offices are located at 1719A Route 10, Suite 300,
Parsippany, NJ 07054.
Item 2. Identity and Background
This statement is being filed jointly by (i) Deerfield Capital, L.P., a
Massachusetts limited partnership ("Deerfield Capital"), (ii) Deerfield
Partners, LLC, a Massachusetts limited liability company ("Deerfield Partners"),
(iii) Mr. John B. Frieling and (iv) Mr. Mark H. Sandler (collectively referred
to herein as the "Reporting Persons"). The Reporting Persons are filing this
statement jointly pursuant to a Joint Filing Agreement attached hereto as
Exhibit A.
The principal business of Deerfield Capital is to acquire, hold and dispose
of investments in companies. The principal business of Deerfield Partners is to
act as a general partner of Deerfield Capital, to conduct merchant and
investment banking activities and to render financial and management advisory
services not involving the sale of securities to client companies. Deerfield
Partners is the General Partner of Deerfield Capital. Mr. Frieling and Mr.
Sandler are the Managing Directors and principal equity holders of Deerfield
Partners, and serving in such capacity is their principal occupation and
employment.
The principal office or business address of Deerfield Capital, Deerfield
Partners and Mr. Frieling is 20 North Main Street, Suite 120, Sherborn, MA
01770. Mr. Sandler's principal business address is One Darling Drive, Avon, CT
06001. Mr. Frieling and Mr. Sandler are citizens of the United States of
America.
None of the Reporting Persons has, during the last five years, been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors). None of the Reporting persons has, during the last five years,
been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject 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 violations with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
See Item 4 below.
Item 4. Purpose of Transaction.
During 1997 and 1998, Deerfield Capital and Deerfield Partners acquired
capital stock of Aquis Communications, Inc., a Delaware corporation formerly
known as BAP Acquisition Corp. ("Aquis"), in the ordinary course of business.
On March 31, 1999, Paging Partners Merger Corporation, a Delaware
corporation and a wholly-owned subsidiary of the Issuer ("Sub"), merged with and
into (the "Merger") Aquis, with Aquis surviving the Merger and becoming a
wholly-owned subsidiary of the Issuer, pursuant to the terms of an Agreement and
Plan of Merger dated as of November 6, 1998, as amended (the "Merger
Agreement"), by and among the Issuer, Aquis and Sub. As a result of the Merger,
the former stockholders of Aquis (including Deerfield Capital and Deerfield
Partners) collectively acquired approximately 58.5% of the outstanding voting
securities of the Issuer. In the Merger, each share of Common Stock of Aquis,
$.001 par value per share ("Aquis Common Stock"), was converted into the right
to receive 88.92076 shares of the Common Stock. Pursuant to the Merger
Agreement, Deerfield Capital received 780,280 shares of the Common
<PAGE>
Stock in exchange for 8,775 shares of Aquis Common Stock owned by it and
Deerfield Partners received 222,302 shares of the Common Stock in exchange for
2,500 shares of Aquis Common Stock owned by it. In connection with the Merger,
Deerfield Partners received a fee from Aquis in the amount of $100,000.
Additionally, in connection with the Merger and pursuant to the Merger
Agreement, immediately after the effective time of the Merger the Issuer's Board
of Directors was reconstituted and Mr. Frieling was elected as a Director of the
Issuer. A copy of the Merger Agreement is filed herewith as Exhibit B and is
incorporated in its entirety herein by reference.
The shares of the Common Stock issued to Deerfield Capital and Deerfield
Partners are not registered under the Securities Act of 1933, as amended (the
"Securities Act"); however, such shares are subject to a Registration Rights
Agreement dated as of March 31, 1999, among the Issuer, Aquis, the Aquis
Stockholders (as named therein) and the Original Stockholders (as named therein,
and collectively with the Aquis Stockholders, the "Stockholders"). Subject to
the terms and conditions contained therein, the Stockholders holding a majority
of the shares of the Common Stock subject to such Registration Rights Agreement
may demand, at any time on or after October 1, 2000, registration of their
shares of the Common Stock under the Securities Act by the Issuer in a firm
commitment, underwritten public offering with a minimum anticipated aggregate
net offering price of at least $5,000,000. Subject to certain conditions set
forth therein, the Issuer is obligated under the Registration Rights Agreement
to effect up to three such registrations. In addition, at any time on or after
October 1, 2000 and upon the demand of any of the Stockholders, the Issuer is
obligated to effect up to three registrations on Form S-3 (if available) with a
minimum anticipated aggregate offering price of $1,000,000. Subject to the terms
and conditions of the Registration Rights Agreement, Deerfield Capital and
Deerfield Partners also have "piggy back" rights to have their shares included
for registration under the Securities Act in any registration statement (other
than a registration statement filed with respect to an employee benefit plan or
securities sold under Rule 145 under the Securities Act) filed by the Issuer
after October 15, 1999. A copy of the Registration Rights Agreement is filed
herewith as Exhibit C and is incorporated in its entirety herein by reference.
Except as described herein, none of the Reporting Persons has any present
plan or proposal which relates to, or could result in, any of the events
referred to in paragraphs (a) through (j), inclusive, of Item 4 of Schedule 13D.
However, the Reporting Persons will continue to review the business of the
Issuer and may in the future propose that the Issuer take one or more of such
actions. Each of the Reporting Persons reserves the right to acquire more shares
or dispose of shares of the Common Stock from time to time, subject to market
conditions, other investment opportunities and other factors. In addition, in
his capacity as a Director of the Issuer, Mr. Frieling may be expected from time
to time to act on matters covered by Item 4 of Schedule 13D. Finally, prior to
the Merger, Deerfield Partners performed investment banking and consulting
services for Aquis. Deerfield Partners is presently performing certain
investment banking and consulting services for Aquis and it is anticipated that
Deerfield Partners may provide additional investment banking and similar
services for the Issuer, Aquis or their affiliates in the future on customary
terms (including fees).
Item 5. Interest in Securities of the Issuer.
(a) Deerfield Capital is the direct record owner of 780,280 shares of the
Common Stock, which constitutes approximately 5.1% of the total number of
outstanding shares of the Common Stock immediately following the consummation of
the Merger. Deerfield Partners is the direct record holder of 222,302 shares of
the Common Stock, which constitutes approximately 1.5% of the total number of
outstanding shares of the Common Stock immediately following the consummation of
the Merger. The percentages set forth in this Schedule 13D are based upon
15,219,076 shares of the Common Stock outstanding as of April 9, 1999, which
number was provided by the Issuer.
(b) As the General Partner of Deerfield Capital, Deerfield Partners
indirectly has the sole power to vote or direct the vote and to dispose or
direct the disposition of the shares of the Common Stock beneficially owned by
Deerfield Capital. As a result, for the purposes of Rule 13d-3 promulgated under
the Securities Exchange Act of 1934 (the "Act"), Deerfield Partners may be
deemed to beneficially own the shares of the Common Stock directly owned by
Deerfield Capital. As Managing Directors of Deerfield Partners, each of Mr.
<PAGE>
Frieling and Mr. Sandler may be deemed to indirectly have the shared power to
vote or direct the vote and to dispose or direct the disposition of the shares
of the Common Stock beneficially owned by Deerfield Partners, including the
shares of Common Stock beneficially owned by Deerfield Capital. As a result, Mr.
Frieling and Mr. Sandler may be deemed to beneficially own the Common Stock
directly and indirectly owned by Deerfield Partners for the purposes of Rule
13d-3 under the Act. Mr. Frieling and Mr. Sandler disclaim beneficial ownership
of the shares of Common Stock held by either of Deerfield Capital and Deerfield
Partners, except with respect to their respective ratable interests in Deerfield
Partners (and indirectly, Deerfield Capital).
(c) Except as described in Item 4 above, there has not been any transaction
in the Common Stock effected by or for the account of any of the Reporting
Persons during the past sixty (60) days.
(d) Except as described in this Item 5, to the best of the knowledge of the
Reporting Persons, no other person has the right to receive or the power to
direct the receipt of dividends from, or the proceeds from the sale of, the
shares of Common Stock owned by the Reporting Persons.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to
Securities of the Issuer.
See Item 4 above for a description of the Merger Agreement and the
Registration Rights Agreement. As indicated in Item 4, Mr. Frieling is a
Director of the Issuer.
Item 7. Material to be filed as Exhibits.
Filed with this statement as Exhibits are the following documents:
Exhibit A: Joint Filing Agreement, dated as of April 9, 1999.
Exhibit B: Agreement and Plan of Merger dated as of November 6, 1998, as
amended, by and among Aquis Communications Group, Inc., a
Delaware corporation formerly known as Paging Partners
Corporation, Paging Partners Merger Corporation, a Delaware
Corporation, and Aquis Communications, Inc., a Delaware
corporation formerly known as BAP Acquisition Corp.
(incorporated by reference from Exhibit A to the Issuer's
definitive proxy statement on Schedule 14A (No.
001-13002) filed on March 15, 1999).
Exhibit C: Registration Rights Agreement dated as of March 31, 1999 by
and among the Issuer and the Stockholders named therein.
The foregoing descriptions of these Exhibits are qualified in their entirety
by reference to the Exhibits themselves.
<PAGE>
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.
DEERFIELD CAPITAL, L.P.
By Deerfield Partners, LLC,
its General Partner
Dated: April 9, 1999 /s/ John B. Frieling
--------------------------------------
By: John B. Frieling,
Managing Director
DEERFIELD PARTNERS, LLC
Dated: April 9, 1999 /s/ John B. Frieling
--------------------------------------
By: John B. Frieling,
Managing Director
Dated: April 9, 1999 /s/ John B. Frieling
--------------------------------------
John B. Frieling
Dated: April 9, 1999 /s/ Mark H. Sandler
--------------------------------------
Mark H. Sandler
<PAGE>
EXHIBIT A
JOINT FILING AGREEMENT
In connection with the beneficial ownership of shares of Common Stock of
Aquis Communications Group, Inc., a Delaware corporation formerly known as
Paging Partners Corporation (the "Issuer"), the undersigned hereby agree to the
joint filing on behalf of the undersigned of all filings with the Securities and
Exchange Commission required pursuant to the Securities Exchange Act of 1934, as
amended, including Rule 13d-1(a).
This Joint Filing Agreement may be signed in counterpart copies.
DEERFIELD CAPITAL, L.P.
By Deerfield Partners, LLC,
its General Partner
Dated: April 9, 1999 /s/ John B. Frieling
--------------------------------------
By: John B. Frieling,
Managing Director
DEERFIELD PARTNERS, LLC
Dated: April 9, 1999 /s/ John B. Frieling
--------------------------------------
By: John B. Frieling,
Managing Director
Dated: April 9, 1999 /s/ John B. Frieling
--------------------------------------
John B. Frieling
Dated: April 9, 1999 /s/ Mark H. Sandler
--------------------------------------
Mark H. Sandler
<PAGE>
EXHIBIT C
REGISTRATION RIGHTS AGREEMENT
AGREEMENT, dated as of March 31, 1999, by and among (i) Paging Partners
Corporation, a Delaware corporation (the "Company"), and (ii) the stockholders
(the "Aquis Stockholders") of Aquis Communications, Inc., a Delaware corporation
("Aquis"), and certain current stockholders of the Company (the "Original
Stockholders"), each as named in the signature pages hereof (each individually a
"Stockholder," and collectively the "Stockholders").
Introduction
Pursuant to the terms of an Agreement and Plan of Merger, dated as of
November 6, 1998 (the "Merger Agreement"), by and among the Company, Aquis and
Paging Partners Merger Corporation, a Delaware corporation, the Aquis
Stockholders are collectively acquiring 8,892,076 shares of Common Stock, par
value $.01 per share, of the Company (the "Paging Partners Common Stock"). The
execution of this Agreement is a condition to the closing of the transactions
contemplated by the Merger Agreement (the "Closing"). Capitalized terms used
herein and not otherwise defined shall have the meanings given to them in the
Merger Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. Demand Registration Rights.
(a) At any time after the date that is eighteen (18) months from the
date of the Closing, if holders of a majority of the Registrable Securities (as
defined in Section 4 hereof) request the Company to file a registration
statement under the Securities Act of 1933, as amended (the "Act"), for a firm
commitment underwritten public offering of Registrable Securities with an
anticipated aggregate offering price, net of underwriting discounts and
commissions, of at least $5,000,000 (the "Minimum Registration Amount"), the
Company shall (i) within 10 days notify all holders of Registrable Securities of
such request and (ii) use its best efforts to so register under the Act the
Registrable Securities initially requested to be registered and the Registrable
Securities of all holders who request within 30 days after receiving the
Company's notice that their Registrable Securities be included therein. The
Company is obligated to effect a maximum of three (3) such demand registrations,
which shall not be within the same six-month period.
(b) If the underwriter managing the offering determines that,
because of marketing considerations, all of the Registrable Securities requested
to be registered may not be included in the offering, the underwriter may reduce
the number of Registrable Securities included therein. If any such reduction
results in the inclusion of less than 50% of the
<PAGE>
Registrable Securities requested to be included therein, the holders of
Registrable Securities shall have the right to one additional registration under
this Section 1.
(c) If the Company, for its own or others' account, includes in any
registration required under this Section 1 a number of shares other than
Registrable Securities that exceeds the number of Registrable Securities to be
included, then such registration shall be deemed to be a registration under
Section 2 instead of this Section 1. In all other cases, where the Company
includes in such registration any shares other than Registrable Securities, such
registration shall remain subject to this Section 1, provided that in no event
shall other shares be included if such inclusion would (i) prevent holders of
Registrable Securities from registering all Registrable Securities requested by
them or (ii) adversely affect the offering price of the Registrable Securities
in such registration.
(d) Notwithstanding anything to the contrary in this Agreement, (i)
if a registration requested under this Section 1 does not become effective
because certain Stockholders who requested registration elect not to register
Registrable Securities held by such Stockholders, and, as a result of such
election, the aggregate offering price, net of underwriting discounts and
commissions, falls below the Minimum Registration Amount, and (ii) if the
Company has complied with all of its obligations hereunder up to the time of
such election, the Stockholders will be deemed to have exercised one (1) of
their registrations under this Section 1.
2. Piggyback Registration Rights.
(a) At any time after the date that is six (6) months from the date
of the Closing, if the Company proposes to register any Common Stock for its own
or others' account under the Act, other than (i) a registration relating to
employee benefit plans, (ii) a registration solely relating to shares to be sold
under Rule 145 under the Act, or (iii) a registration pursuant to Section 2 of
the Existing Registration Rights Agreements (as defined in Section 12 hereof),
the Company shall give each holder of Registrable Securities prompt written
notice of its intent to do so. Upon the written request of any such holder given
within 15 days after receipt of such notice, the Company will use its best
efforts to cause to be included in such registration all of the Registrable
Securities that such holder requests.
(b) If the Company is advised in writing in good faith by any
managing underwriter of the securities being offered pursuant to any
registration statement under this Section 2 that, because of marketing
considerations, the number of shares to be sold by persons other than the
Company is greater than the number of such shares that can be offered without
adversely affecting the offering, the Company may reduce pro rata the number of
shares offered for the accounts of such persons (based upon the number of shares
requested by each such person to be included in the registration) in the
following manner:
(i) the securities requested to be registered by persons,
other than (A) the Stockholders or (B) the parties to the Existing Registration
Rights Agreements, who
-2-
<PAGE>
by virtue of agreements with the Company are entitled to include their
securities in any such registration shall be excluded from such registration to
the extent required by such limitation, and
(ii) if a limitation on the number of shares is still
required, the securities being sold for the account of the Stockholders shall be
excluded from such registration to the extent required by such limitation, it
being acknowledged that such securities shall be excluded prior to exclusion of
securities requested to be registered by the parties to the Existing
Registration Rights Agreements.
3. Form S-3 Registration Rights. If, at any time after the date that is
eighteen (18) months from the date of the Closing, at a time when Form S-3 is
available for such registration, the Company shall receive from any holder of
Registrable Securities a written request or requests that the Company effect a
registration on Form S-3 of any of such holder's Registrable Securities, the
Company will promptly give written notice of the proposed registration to all
other holders of Registrable Securities and, as soon as practicable, effect such
registration and all related qualifications and compliances as may be requested
and as would permit or facilitate the sale and distribution of all Registrable
Securities as are specified in such request and any written requests of other
holders given within 15 days after receipt of such notice. The Company shall
have no obligation to effect a registration under this Section 3 (a) unless the
aggregate offering price of the Registrable Securities requested to be sold
pursuant to such registration is expected to be equal to or greater than
$1,000,000 and, (b) more often than once in any six-month period for holders of
Registrable Securities. The Company is obligated to effect a maximum of three
(3) registrations under this Section 3. Any registration under this Section 3
will not be counted as a registration under Section 1 above.
4. Registrable Securities; Stock Equivalents.
(a) As used herein, "Registrable Securities" means (i) the shares of
Paging Partners Common Stock acquired by any Aquis Stockholder pursuant to the
Merger Agreement or any shares of Paging Partners Common Stock owned by any
Original Stockholder on the date hereof; (ii) any other shares of Paging
Partners Common Stock acquired (or that may be acquired upon the exercise or
conversion of securities for or into shares of Paging Partners Common Stock) by
any Stockholder pursuant to any preemptive right, rights of first refusal or
otherwise; and (iii) any other securities of Paging Partners or any other person
issued in respect of any such securities (as a result of stock splits, stock
dividends, reclassifications, recapitalizations, mergers or other events);
provided, however, that such securities shall cease to be Registrable Securities
upon (i) any sale pursuant to a registration statement under the Act or (ii) any
sale pursuant to Rule 144 under the Act.
(b) Whenever reference is made in this Agreement to a request or
consent of holders of a certain percentage of Registrable Securities, the
determination of such percentage shall include shares of Paging Partners Common
Stock issuable upon conversion of
-3-
<PAGE>
any convertible securities or exercise of any options, warrants or other rights
that are held by persons or entities who are holders of Registrable Securities
or who would hold Registrable Securities upon the conversion or exercise of such
convertible securities, options, warrants or other rights.
5. Effective Registration Statement. A registration requested pursuant to
this agreement will not be deemed to have been effected unless the registration
statement relating thereto has become effective under the Act. If, after a
registration statement has become effective, the offering of Registrable
Securities pursuant to such registration is interfered with by any stop order,
injunction or other order or requirement of the Commission or other governmental
agency or court, such registration will be deemed not to have been effected.
6. Selection of Underwriter. The underwriter of any offering registered
under Section 1 shall be selected by holders of a majority of the Registrable
Securities, provided that such underwriter shall be reasonably acceptable to the
Company. The underwriter of any offering registered under Section 2 shall be
selected by the Company.
7. Registration Procedures. If and whenever the Company is required by the
provisions of this Agreement to use its best efforts to effect the registration
of any of the Registrable Securities under the Act, the Company shall:
(a) expeditiously (and, in the case of a registration under Section
1, within 90 days of any request thereunder) file with the Securities and
Exchange Commission (the "Commission") a registration statement, in form and
substance required by the Act, with respect to such Registrable Securities and
use its best efforts to cause that registration statement to become effective;
(b) expeditiously prepare and file with the Commission any
amendments and supplements to the registration statement and the prospectus
included in the registration statement as may be necessary to keep the
registration statement effective, in the case of a firm commitment underwritten
public offering, until completion of the distribution of all securities
described therein and, in the case of any other offering, until the earlier of
the sale of all Registrable Securities covered thereby or 120 days after the
effective date thereof;
(c) expeditiously furnish to each holder that requested that
Registrable Securities be included in such registration, such reasonable numbers
of copies of the prospectus, including a preliminary prospectus, in conformity
with the requirements of the Act, and such other documents as such holder may
reasonably request in order to facilitate the public sale or other disposition
of the Registrable Securities owned by such holder;
(d) expeditiously use its best efforts to register or qualify the
Registrable Securities covered by the registration statement under the
securities or Blue Sky laws of such states as the holders thereof shall
reasonably request, and do any and all other acts and things that may be
necessary or desirable to enable the holders thereof to consummate the public
sale
-4-
<PAGE>
or other disposition in such states of the Registrable Securities owned by the
holders; provided, however, that the Company shall not be required in connection
with this paragraph (d) to qualify as a foreign corporation or execute a general
consent to service of process in any jurisdiction;
(e) in connection with each registration pursuant to Sections 1, 2
and 3 above covering an underwritten public offering, the Company and each
participating holder agrees to enter into a written agreement with the managing
underwriter in such form and containing such provisions (including, if the
underwriter so requests, customary contribution provisions on the part of the
Company) as are customary in the securities business for such an arrangement
between such underwriter and companies of the Company's size and investment
stature, provided that the holders shall not be obligated to enter into any such
underwriting agreement if the indemnification provisions thereof are more
burdensome on such holder than those contained herein or if any standback
requirement therein is for a period that exceeds the period required by this
Agreement;
(f) at the request of any participating holder, the Company will
furnish to each underwriter, if any, and the participating holders, in
connection with a registration pursuant to Section 1, a legal opinion of its
counsel and a letter from its independent certified public accountants, each in
customary form and substance, at such time or times as such documents are
customarily provided in the type of offering involved;
(g) whenever the Company is registering any Common Stock under the
Act and a holder of Registrable Securities is selling securities under such
registration or determines that it may be a controlling person under the Act,
the Company will keep such holder advised in writing of the initiation, progress
and completion of such registration, will allow such holder and such holders's
counsel to participate in the preparation of the registration statement and to
have access to all relevant corporate records, documents and information, will
include in the registration statement such information as such holder may
reasonably request and will take all such other action as such holder may
reasonably request, provided that such holder has executed an agreement
containing customary provisions with respect to the use and confidentiality of
such information;
(h) each holder of Registrable Securities included in a registration
shall furnish to the Company such information regarding such holder and the
distribution proposed by such holder as the Company may reasonably request in
writing and as shall be required in connection with the registration,
qualification or compliance referred to in this Agreement;
(i) as of the effective date of any registration statement relating
thereto, use its best efforts to cause all such Registrable Securities to be
listed on each securities exchange on which similar securities issued by the
Company are then listed and the Company meets the published criteria for such
listing, and, if not so listed, to be listed on the NASDAQ Stock Market National
Market System or the NASDAQ SmallCap Market; and
-5-
<PAGE>
(j) as of the effective date of any registration statement relating
thereto, provide a transfer agent and registrar for all such Registrable
Securities.
8. Expenses. The Company will pay all expenses incurred by the Company in
complying with this Agreement, including, without limitation, all registration
and filing fees, exchange listing fees, printing expenses, transfer taxes, fees
and expenses of counsel for the Company and the reasonable fees and expenses of
one counsel selected by the holders of Registrable Securities to be included in
such registration to represent them (not to exceed $25,000 with respect to any
such registration), state Blue Sky fees and expenses, and the expense of any
special audits incident to or required by any such registration, but excluding
underwriting discounts and selling commissions relating to the sale of the
Registrable Securities, whether or not such registration becomes effective.
9. Notification. The Company shall promptly notify each holder of
Registrable Securities covered by any registration statement of any event that
results in the prospectus included in such registration statement, as then in
effect, containing an untrue statement of a material fact or omitting to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing.
10. Indemnification and Contribution.
(a) Indemnification by the Company. The Company shall indemnify and
hold harmless each holder of Registrable Securities included in any
registration, its officers, directors and partners, as applicable, each
underwriter of the Registrable Securities being sold by such holder, and each
controlling person of any of the foregoing, against all claims, losses, damages
and liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any prospectus, offering, circular, or other document relating to such
Registrable Securities (or in any related registration statement, notification
or the like) or any omission (or alleged omission) to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, or any violation by the Company of the Act, or the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or any applicable state
securities laws, or any rule or regulation promulgated thereunder, applicable to
the Company and relating to action or inaction required of the Company in
connection with any registration, qualification or compliance contemplated by
this Agreement, and will reimburse each such holder, and each such underwriter
and controlling person for any legal or any other expenses reasonably incurred
in connection with investigating or defending any such claim, loss, damage,
liability or action, whether or not resulting in liability; provided, however,
that the Company will not be liable in any such case to the extent that any such
claim, loss, damage or liability (i) arises out of or is based on any untrue
statement or omission based upon and in conformity with written information
furnished to the Company by such holder or underwriter and stated to be
specifically for use therein, or (ii) results solely from the failure of such
holder to deliver a copy of the registration statement, prospectus, offering
circular or any
-6-
<PAGE>
amendments or supplements thereto after the Company has furnished such holder
with a sufficient number of copies thereof.
(b) Indemnification by the Holders of Registrable Securities. Each
participating holder of Registrable Securities shall indemnify and hold harmless
the Company, each of its directors, each of its officers who has signed the
registration statement, each underwriter, each other participating holder of
Registrable Securities, its officers, directors and partners, as applicable and
each controlling person of any of the foregoing, against all claims, losses,
damages and liabilities (or actions in respect thereof) arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any prospectus, offering circular, or other document relating to
the Registrable Securities (or in any related registration statement,
notification or the like) or any omission (or alleged omission) to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, or by the failure of such holder to deliver a
copy of the registration statement, prospectus, offering circular, or any
amendments or supplements thereto after the Company has furnished the holder
with a sufficient number of copies thereof, and will reimburse the Company and
each such director, officer or controlling person for any legal or any other
expenses reasonably incurred in connection with investigating or defending any
such claim, loss, damage, liability or action, provided, however, that no holder
of Registrable Securities will be liable in any such case except to the extent
that any such claim, loss, damage or liability arises out of any untrue
statement or omission based upon and in conformity with written information
furnished to the Company by such holder and stated to be specifically for use
therein, and provided, further, that no holder of Registrable Securities will be
liable under this Section for losses, costs, damages or expenses exceeding in
the aggregate the net proceeds to such holder in such offering.
(c) Procedures for Indemnification. Each party entitled to
indemnification under Subsection (a) or (b) (the "Indemnified Party") shall give
notice to the party required to provide indemnification (the "Indemnifying
Party") promptly after such Indemnified Party has actual knowledge of any claim
as to which indemnity may be sought, and shall permit the Indemnifying Party to
assume the defense of any such claim or any litigation resulting therefrom;
provided, that counsel for the Indemnifying Party, who shall conduct the defense
of such claim or any litigation resulting therefrom, shall be approved by the
Indemnified Party (whose approval shall not be unreasonably withheld); and,
provided, further, that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its obligations
under this Agreement except to the extent the Indemnifying Party is prejudiced
thereby. The Indemnified Party may participate in such defense at such party's
expense; provided, however, that the Indemnifying Party shall pay the reasonable
fees and expenses of not more than one counsel selected by the Indemnified
Parties and reasonably acceptable to the Indemnifying Party, if the Indemnified
Party shall believe in good faith that representation of such Indemnified Party
by the counsel retained by the Indemnifying Party would be inappropriate due to
actual or potential differing interests between the Indemnified Party and any
other party represented by such counsel in such proceeding. No Indemnifying
Party, in the defense of any such claim or litigation shall, except with the
consent of each
-7-
<PAGE>
Indemnified Party, consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnified Party of a release from all liability
in respect of such claim or litigation, and no Indemnified Party shall consent
to entry of any judgment or settle such claim or litigation without the prior
written consent of the Indemnifying Party.
(d) Contribution. If the indemnification provided for in Subsections
(a) or (b) is unavailable to any Indemnified Party thereunder in respect of any
losses, claims, damages or liabilities (or actions in respect thereof) referred
to in such Sections, then each person or entity that would have been an
Indemnifying Party thereunder shall contribute to the amount paid or payable by
such Indemnified Party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is appropriate
to reflect the relative fault of the Indemnifying Party on the one hand and such
Indemnified Party on the other. The relative fault shall be determined by
reference to, among other things, whether any untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Indemnifying Party or such Indemnified
Party, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission, or whether such
losses, claims, damages or liabilities (or actions in respect thereof) arose out
of the action or failure to act of one or more of such parties. Notwithstanding
the foregoing, (i) no holder of Registrable Securities will be required to
contribute any amount in excess of the net proceeds to such holder of all
Registrable Securities sold by such holder pursuant to such registration
statement, and (ii) no person or entity guilty of fraudulent misrepresentation,
within the meaning of Section 11(f) of the Act, shall be entitled to
contribution from any person or entity who is not guilty of such fraudulent
misrepresentation.
11. Reports Under Exchange Act. With a view to making available to the
holders of Registrable Securities the benefits of Rule 144 promulgated under the
Act and any other rule or regulation of the Commission that may at any time
permit a holder to sell securities of the Company to the public without
registration or pursuant to a registration on Form S-3, the Company agrees to
use its best efforts to satisfy the requirements of all such rules and
regulations (including the requirements for public information, registration
under the Exchange Act and timely reporting to the Commission) at the earliest
possible date. The Company will furnish to each holder of Registrable
Securities, whenever requested, a written statement as to its compliance with
the reporting requirements of Rule 144, the Act and the Exchange Act, a copy of
its most recent annual or quarterly report, and such other reports and
information filed by the Company as the Stockholder may reasonably request in
connection with the sale of Registrable Securities without registration.
12. Registration Rights of Others. Other than as stated in this Agreement,
the Company will not, without the prior written consent of the Stockholders,
grant to any other person or entity the right to (a) require the Company to
initiate the registration of any securities or (b) require the Company to
include in any registration, securities owned by such holder, unless under the
terms of such arrangement such holder may include securities in such
-8-
<PAGE>
registration only to the extent that the inclusion thereof does not limit the
number of Registrable Securities included therein or adversely affect the
offering price thereof. Other than as stated in this Agreement, and with the
exception of certain rights granted pursuant to a Registration Rights Agreement
dated as of May 7, 1996 by and between the Company and the purchasers named
therein and a Registration Rights Agreement dated as of March 10, 1997 by and
between the Company and the purchasers named therein (collectively, the
"Existing Registration Rights Agreements"), the Company represents and warrants
that it has not granted any person or entity the right to require the Company to
initiate the registration of any securities or include in any registration any
securities owned by such holder.
13. Lock-Up Agreement. Each holder of Registrable Securities agrees that
in connection with any public offering of the Company's Common Stock, and upon
the request of the managing underwriter in such offering, such holder will not
sell, grant any option for the purchase of, or otherwise dispose of any of the
Company's securities held by such holder (other than those included in such
registration) without the prior written consent of such underwriter, for such
period of time as may be requested by such underwriter (not to exceed 180 days
after the effective date of such registration).
14. Restrictions on Registration. The Company shall not be obligated to
effect any registration within six months after the effective date of
registration in which the holders of Registrable Securities were given the
opportunity to participate pursuant to Section 2, provided that all of the
Registrable Securities requested by such holders were registered in such
registration. The Company may postpone each registration requested by the
holders of the Registrable Securities once for up to three months if the
Company's Board of Directors determines in good faith that such registration can
be reasonably expected to have a material adverse effect on any material
transaction or series of transactions in which the Company is engaging or
intends to engage.
15. Restrictive Legend. Each certificate representing Registrable
Securities shall, except as otherwise provided in this Section 15 or in Section
16, be stamped or otherwise imprinted with a legend substantially in the
following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
ANY STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED
OF UNLESS IT HAS BEEN REGISTERED UNDER SUCH ACT AND ALL SUCH APPLICABLE
LAWS OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE."
A certificate shall not bear such legend if (a) the securities represented
thereby have been effectively registered and disposed of in accordance with the
registration requirements of the Act and any applicable state securities laws,
or (b) in the opinion of counsel satisfactory to the Company, the securities
represented thereby may be publicly sold without registration under the Act and
any applicable state securities laws.
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<PAGE>
16. Notice of proposed Transfer. Prior to any proposed transfer of any
Registrable Securities (other than under the circumstances described in Sections
1, 2 or 3 hereof), the holder thereof shall give written notice to the Company
of its intention to effect such transfer. Each such notice shall describe the
manner of the proposed transfer and, if requested by the company, shall be
accompanied by an opinion of counsel satisfactory to the Company to the effect
that the proposed transfer may be effected without registration under the Act
and any applicable state securities laws, whereupon the holder of such stock
shall be entitled to transfer such stock in accordance with the terms of its
notice; provided, however, that no such opinion of counsel shall be required for
a transfer to one or more partners or retired partners of the transferor (in the
case of a transferor that is a partnership), a beneficiary of the transferor (in
the case of a transferor that is a trust), or to a stockholder or an affiliated
corporation of the transferor (in the case of a transferor that is a trust), or
to a stockholder or an affiliated corporation of the transferor (in the case of
a transferor that is a corporation). Each certificate for Registrable Securities
transferred as above provided shall bear the legend set forth in Section 15,
except that such certificate shall not bear such legend if (i) such transfer is
in accordance with the provisions of Rule 144 (or any other rule permitting
public sale without registration under the Securities Act) or (ii) the opinion
of counsel referred to above is to the further effect that the transferee and
any subsequent transferee (other than an affiliate of the Company) would be
entitled to transfer such securities in a public sale without registration under
the Act. The restrictions provided for in this Section 16 shall not apply to
securities that are not required to bear the legend prescribed by Section 15 in
accordance with the provisions of that Section.
17. Notices. All notices, demands, requests or other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered in person, or by United States mail, certified or registered with
return receipt requested, or by nationally recognized overnight courier service,
to the addresses of the respective parties for notices in accordance with the
Merger Agreement (or, if the address of a holder of Registrable Securities is
not included therein, at the address of such holder on the Company's stock
records).
18. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns, including any subsequent holders of Registrable Securities, provided
that such successors and assigns agree in writing to be bound by this Agreement.
19. Survival. This Agreement, including without limitation the obligation
of the parties under Section 10 hereof, shall survive indefinitely.
20. Severability and Governing Law. If any provision of this Agreement is
rendered void, invalid or unenforceable by any court of law for any reason, such
invalidity or unenforceability shall not void or render invalid or unenforceable
any other provision of this Agreement. This Agreement is governed by and
construed in accordance with the internal laws of the State of Delaware.
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<PAGE>
21. Amendments, Etc. This Agreement may be changed, waived, discharged or
terminated only with the written consent of the Company and the holders of a
majority of the Registrable Securities.
22. Counterparts. This Agreement may be executed in one or more
counterparts, and with counterpart signature pages, each of which shall be an
original, but all of which together shall constitute one in the same Agreement.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as a sealed instrument as of the date first above written.
PAGING PARTNERS CORPORATION
By: /s/ Jeffrey M. Bachrach
--------------------------------------
Name: Jeffrey M. Bachrach
Title: Vice President, Secretary, Treasurer
AQUIS STOCKHOLDERS
DEERFIELD PARTNERS, LLC
By: /s/ John B. Frieling
---------------------------------
John B. Frieling
Manager
DEERFIELD CAPITAL, L.P.
By: Deerfield Partners, LLC,
its general partner
By: /s/ John B. Frieling
---------------------------------
John B. Frieling
Manager
SELECT PAGING INVESTORS, L.P.
By: Select Capital Corporation
its general partner
By: /s/ Michael E. Salerno
---------------------------------
Michael E. Salerno
Managing Director
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<PAGE>
R&S LIMITED PARTNERSHIP
By: Randy Byrnes
its general partner
By: /s/ Randy Byrnes
---------------------------------
Randy Byrnes
TAYLOR VENTURES, LLC
By: /s/ Steven Levine
---------------------------------
Steven Levine
Manager
CARLISLE CARRIER CORP
By: /s/ David L. Metzler
---------------------------------
David L. Metzler
/s/ Patrick M. Egan
-------------------------------------
Patrick M. Egan
/s/ John X. Adiletta
-------------------------------------
John X. Adiletta
/s/ J.F. Grove, III
-------------------------------------
J.F. Grove, III
/s/ J.F. Grove, III, GRAT 3
-------------------------------------
J.F. Grove, III, GRAT 3
/s/ Joseph F. Roda
-------------------------------------
Joseph F. Roda
/s/ Roy K. Smoker
-------------------------------------
Roy K. Smoker
/s/ Carl Vizzi
-------------------------------------
Carl Vizzi
/s/ Richard Witwer
-------------------------------------
Richard Witwer
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<PAGE>
/s/ Nancy Witwer
-------------------------------------
Nancy Witwer
/s/ R.A. Ortenzio
-------------------------------------
R.A. Ortenzio
/s/ Robert Ortenzio
-------------------------------------
Robert Ortenzio
/s/ Martin Ortenzio
-------------------------------------
Martin Ortenzio
/s/ Michael E. Salerno
-------------------------------------
Michael E. Salerno
/s/ James David Novinger
-------------------------------------
James David Novinger
/s/ Floyd W. Warner
-------------------------------------
Floyd W. Warner
/s/ James W. Lees
-------------------------------------
James W. Lees
/s/ Robert Greene
-------------------------------------
Robert Greene
/s/ Larry Dipetro
-------------------------------------
Larry Dipetro
/s/ William Patton
-------------------------------------
William Patton
/s/ John Toedtman
-------------------------------------
John Toedtman
/s/ Richard Owens
-------------------------------------
Richard Owens
/s/ Stephen G. Schueren
-------------------------------------
Stephen G. Schueren
-13-
<PAGE>
ORIGINAL STOCKHOLDERS
/s/ Leonard Fink
-------------------------------------------
Leonard Fink
/s/ Nancy Fink
-------------------------------------------
Nancy Fink
/s/ Richard Giacchi
-------------------------------------------
Richard Giacchi
/s/ Robert Davidoff
-------------------------------------------
Robert Davidoff
CMNY CAPITAL I, L.P.
By: Robert Davidoff, its General Partner
By: /s/ Robert Davidoff
--------------------------------------
Name:
Title:
CMNY CAPITAL II, L.P.
By: Robert Davidoff, its General Partner
By: /s/ Robert Davidoff
--------------------------------------
Name:
Title:
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