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EXHIBIT 10.1
EXECUTION COPY
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered
into as of October 1, 1998, by and among METROCALL, INC., a Delaware corporation
(the "Company"), and XXXXX COMMUNICATIONS COMPANIES, INC., a Washington
corporation ("XxXxx").
RECITALS
WHEREAS, the Company and XxXxx are parties to that certain Stock
Purchase Agreement, dated as of June 26, 1998 (the "Stock Purchase Agreement"),
pursuant to which XxXxx will acquire 9500 shares, as such amount may be adjusted
pursuant to the Stock Purchase Agreement, of the Company's Series C Convertible
Preferred Stock (the "Preferred Stock"), the terms and conditions of which are
set forth in the Certificate of Designation (as hereinafter defined) and
WHEREAS, in connection with the purchase and sale of the Preferred
Stock, the Company has agreed, on the terms and conditions set forth herein, to
register the Preferred Stock and Common Stock into which the Preferred Stock is
convertible, as set forth below.
NOW THEREFORE, in consideration of the foregoing recitals and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.01 "Certificate of Designation" means the Certificate or
Designation, Number, Powers, Preferences and Relative, Participating, Optional
and Other Rights of Series C Convertible Preferred Stock of Metrocall, Inc., as
filed with the Secretary of State of Delaware on October 1, 1998.
1.02 "Closing" means the closing of the purchase and sale of
Preferred Stock pursuant to the Stock Purchase Agreement.
1.03 "Commission" means the Securities and Exchange Commission or
any other federal agency at the time administering the Securities Act.
1.04 "Conversion Shares" means shares of Common Stock issuable upon
conversion of Preferred Shares, provided, however, that any Conversion Share
will cease to be a
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Conversion Share when (i) such Conversion Share has been transferred pursuant to
an effective registration statement under the Securities Act covering such
Conversion Share (but not including any transfer exempt from registration under
the Securities Act), or (ii) the Preferred Stock which is convertible into such
Conversion Share has been transferred pursuant to an effective registration
statement under the Securities Act covering such Preferred Stock (but not
including any transfer exempt from registration under the Securities Act).
1.05 "Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any similar federal statute and the rules and regulations of the
Commission thereunder, all as the same shall be in effect from time to time.
1.06 "Governmental Authority" means any nation or government, any
state or other political subdivision thereof and any court, panel, judge, board,
bureau, commission, agency or other entity, body or other Person exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
1.07 "Holder" means XxXxx and each transferee permitted pursuant to
Section 6.04 of this Agreement that has become a party to this Agreement as
provided in Section 6.04.
1.08 "Person" means an individual or corporation, partnership,
trust, unincorporated organization, association or other entity and includes any
Governmental Authority.
1.09 "Preferred Shares" means the shares of Series C Convertible
Preferred Stock issued to XxXxx pursuant to the Stock Purchase Agreement and any
additional or replacement shares of Preferred Stock issued with respect to
Preferred Shares upon any stock dividend, stock split, recapitalization or
similar event.
1.10 "Registrable Securities" means Preferred Shares and any other
securities issued with respect to Preferred Shares upon any stock dividend,
stock split, recapitalization or similar event; provided, however, that
Conversion Shares shall not be deemed to be Registrable Securities; and provided
further that any Registrable Security will cease to be a Registrable Security
when (i) such Registrable Security has been transferred pursuant to an effective
registration statement under the Securities Act covering such Registrable
Security (but not including any transfer exempt from registration under the
Securities Act), or (ii) such Registrable Security is no longer held of record
by a Holder.
1.11 "Securities Act" means the Securities Act of 1933, as amended,
or any similar federal statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect from time to time.
1.12 "Shares" means the Conversion Shares and the Registrable
Securities.
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ARTICLE II
REGISTRATION RIGHTS
2.01 Required Registration.
(a) The Company shall prepare and file with the Commission
registration statements under the Securities Act with respect to the Conversion
Shares and shall use its best efforts to cause such registration statements to
become effective promptly after filing. The registration statement with respect
to the Conversion Shares shall be filed with the Commission on or before the
earliest of (i) ninety (90) days before the fifth anniversary of the Closing, or
(ii) forty-five (45) days after any conversion by a Holder of Conversion Shares
pursuant to Section 5.2(b) of the Certificate of Designation, provided, that the
Company shall be required under this clause (ii) to register only the Conversion
Shares or other securities issued in connection with such conversion.
(b) Except as provided in Section 2.01(c) of this Agreement,
the Company shall use its best efforts to maintain the effectiveness of each
registration statement filed pursuant to this Section 2.01 until such time as
all Shares registered pursuant to the registration statement either have been
transferred pursuant to the registration statement or are eligible to be sold
pursuant to Rule 144 under the Securities Act without regard to any restrictions
pursuant to Rule 144(k).
(c) The obligations of the Company under this Section 2.01 are
subject to the condition that the Company shall be entitled to require the
Holders to suspend for up to ninety (90) days once in any twelve month period
the sale of Shares pursuant to a registration statement filed pursuant to this
Section if and for so long as (i) the Board of Directors of the Company
determines, in its reasonable judgment, that the sale of Shares pursuant thereto
would materially interfere with any material financing, acquisition, corporate
reorganization or other material transaction by the Company, (ii) the Company
promptly gives the Holders of the Conversion Shares written notice of such
determination, and (iii) all other similarly situated shareholders shall also be
subject to the same suspension. The Company shall have no obligation to maintain
the effectiveness of a registration statement with respect to Conversion Shares
during periods when the Holders are required to suspend the sale of such Shares
as provided in this Section 2.01(c). As soon as practicable after the expiration
of such periods, the Company shall amend its registration statements as
necessary to permit the Holders to sell Shares pursuant to such registration
statements.
2.02 Registrations by Request.
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(a) Beginning on April 1, 2000, the Company shall, within
ninety (90) days after receiving a written request therefor from the record
Holder or Holders of Registrable Securities representing at least 50% of the
Preferred Shares then outstanding, prepare and file a registration statement
under the Securities Act covering the Registrable Securities which are the
subject of such request and shall use its best efforts to cause such
registration statement to become effective promptly thereafter. The Company
shall not be obligated to prepare, file and cause to become effective pursuant
to this Section 2.02(a) more than two registration statements for the Preferred
Shares.
(b) In the event that the Holders of Registrable Securities
representing the Registrable Shares for which registration has been requested
pursuant to Section 2.02(a) hereof determine for any reason not to proceed with
such registration at any time before the registration statement has been
declared effective by the Commission, and such registration statement, if
theretofore filed with the Commission, is withdrawn with respect to the
securities covered thereby, and such Holders agree to bear their own expenses
incurred in connection therewith and (subject to Section 2.02(d)) to reimburse
the Company for the reasonable out-of-pocket expenses incurred by it
attributable to the registration of such Registrable Securities, then the
Holders of such Registrable Securities shall not be deemed to have exercised
their right to require the Company to register Registrable Securities pursuant
to Section 2.02(a) hereof.
(c) Except as provided in Section 2.02(d) of this Agreement,
the Company shall use its best efforts to maintain the effectiveness of each
registration statement filed pursuant to this Section 2.02 until such time as
all Shares registered pursuant to the registration statement either have been
transferred pursuant to the registration statement or are eligible to be sold
pursuant to Rule 144 under the Securities Act without regard to any restrictions
pursuant to Rule 144(k). Each Holder shall provide written notice to the Company
within fifteen (15) days after it has sold all of its Registrable Securities
registered pursuant to this Section 2.02.
(d) The obligations of the Company under this Section 2.02 are
subject to the condition that the Company shall be entitled to postpone for up
to ninety (90) days once in any twelve month period the filing of any
registration statement otherwise required to be prepared and filed by it
pursuant to this Section 2.02 if, at the time it receives requests for
registration pursuant thereto, and for so long as the Board of Directors of the
Company determines, in its reasonable judgment, that the filing of such
registration statement and the offering of Registrable Securities pursuant
thereto would materially interfere with any material financing, acquisition,
corporate reorganization or other material transaction by the Company, and the
Company promptly gives the Holders requesting such registration written notice
of such determination and all other similarly situated shareholders shall also
be subject to the same suspension. If the Company shall so postpone the filing
of a registration statement, the Holders requesting such registration shall have
the right to withdraw the requests for registration by giving written notice to
the Company within thirty days after receipt of the Company's notice of
postponement and, in the event of such withdrawal, such requests shall not be
counted as being
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requests for one of the registration statements that the Company is obligated to
prepare, file and cause to become effective pursuant to Section 2.02(a) hereof,
nor shall the Holders be required to reimburse the Company for out-of-pocket
expenses incurred by it attributable to the registration of such Registrable
Securities.
2.03 "Piggy-Back" Registrations.
(a) If, at any time after April 1, 2000, the Company is
requested pursuant to Section 2.02 to register any of the Registrable Securities
under the Securities Act on a registration statement on Form S-1, Form S-2 or
Form S-3 (or an equivalent general registration form then in effect) for the
account of any Holder (a "Registering Shareholder") of Registrable Securities
(an "offering"), then in each such case the Company shall, not later than 15
days after receipt of notice from the Registering Shareholder, give written
notice thereof to each other Holder of Registrable Securities. Upon the written
direction of any such Holder of Registrable Securities, given within 10 days of
the receipt by such Holder of any such written notice (which direction shall
specify the number of Registrable Securities intended to be disposed of by such
Holder and the intended method of distribution thereof), the Company shall
include in such registration statement any or all of the Registrable Securities
then owned by such Holder requesting such registration (a "Requesting
Shareholder"), to the extent necessary to permit the sale or other disposition
of the shares constituting such number of Registrable Securities as such
Requesting Shareholder shall have so directed the Company to be so registered.
Any Requesting Shareholder shall have the right to withdraw such direction by
giving written notice to the Company to such effect within ten (10) days after
giving such direction.
(b) In the event that the Company proposes to register
Registrable Securities pursuant to Section 2.03(a), and any managing underwriter
shall advise the Requesting Shareholder or Shareholders and the Registering
Shareholders in writing that the inclusion in the registration statement of some
or all of the Registrable Securities sought to be registered by the Requesting
Shareholders creates a significant risk that the price per share that such
Requesting Shareholder or Shareholders and such Registering Shareholders will
derive from such registration will be adversely affected or that the number of
shares or securities sought to be registered (including any securities sought to
be registered at the instance of the Requesting Shareholder or Shareholders and
those sought to be registered by non-Requesting Shareholders who are Registering
Shareholders) is too large a number to be reasonably sold, the Company will
include in such registration statement such number of shares or securities as
the Company, the Registering Shareholders and the Requesting Shareholders are so
advised can be sold in such offering without such an effect (the "Maximum
Number"), as follows and in the following order of priority: (i) first, the
number of shares or securities sought to be registered by non-Requesting
Shareholders who are Registering Shareholders and (ii) second, if the number of
shares or securities to be registered under clause (i) is less than the Maximum
Number, such shares or
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securities sought to be registered by such Requesting Shareholder or
Shareholders pro rata in proportion to the number of shares or securities sought
to be registered by all the Requesting Shareholders, which, when added to the
number of Registrable Securities to be registered by Registering Shareholders
who are non-Requesting Shareholders, equals the Maximum Number.
2.04. Registration for Underwritten Offerings.
(a) At any time after April 1, 2000, the Holders of a majority
of all outstanding Preferred Shares and Conversion Shares may request the
Company to register under the Securities Act for sale in an underwritten
secondary offering all or any portion of the Registrable Securities or
Conversion Shares held by such Holders or to be issued upon conversion of
Preferred Shares held by such Holders; provided, however, that (i) any such
request must be to register no less than a majority of all outstanding Preferred
Shares or Conversion Shares, and (ii) the Company shall not be obligated under
this Section 2.04 to register Registrable Securities or Conversion Shares for
more than one underwritten secondary offering. For purposes of determining
whether Holders of a majority of all outstanding Preferred Shares and Conversion
Shares have requested registration under this Section 2.04(a), each issued and
outstanding Conversion Share shall be counted as one share and each issued and
outstanding Preferred Share shall be counted as the number of Conversion Shares
into which such Preferred Share is convertible on the date of such request.
(b) Promptly following receipt of any request that complies
with the requirements of Section 2.04(a), the Company shall immediately give
notice of such request to all other Holders of Preferred Shares and Conversion
Shares, and shall use its best efforts to register under the Securities Act, for
public sale in a firm commitment underwritten secondary offering, the number of
Registrable Securities or Conversion Shares specified in the initial request and
in any requests received within 20 days after the date of such notice from other
Holders of Preferred Shares or Conversion Shares. The Company shall have the
right to designate the managing underwriter of any such offering subject to the
consent of the Holders making such requests, which consent shall not be
unreasonably withheld.
(c) In the event that the Holders of a majority of the
outstanding Preferred Shares and Conversion Shares as to which registration of
Registrable Securities or Conversion Shares for sale in an underwritten
secondary offering has been requested pursuant to Section 2.04(a) hereof
determine for any reason not to proceed with such registration and offering at
any time before the registration statement has been declared effective by the
Commission, and such registration statement, if theretofore filed with the
Commission, is withdrawn with respect to the securities covered thereby, and
such Holders agree to bear their own expenses incurred in connection therewith
and (subject to Section 2.04(e)) to reimburse the Company for the reasonable
out-of-pocket expenses incurred by it attributable to the registration and
underwritten secondary offering of such Registrable Securities or Conversion
Shares, then the Holders of the Preferred Shares and Conversion Shares shall not
be deemed to have exercised
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their right to require the Company to register Registrable Securities or
Conversion Shares for sale in an underwritten secondary offering pursuant to
Section 2.04(a) hereof.
(d) The Company shall be entitled to include in any
registration statement referred to in this Section 2.04, for sale in the
underwritten offering, shares of Common Stock to be sold by the Company for its
own account, except as and to the extent that, in the opinion of the managing
underwriter, such inclusion would adversely affect the marketing of the shares
to be sold. Except as provided in this Section 2.04(d) or in Section 2.04(e),
the Company will not file with the Commission any other registration statement
with respect to its Common Stock, whether for its own account or that of other
stockholders, from the date of receipt of a notice from the requesting Holders
pursuant to Section 2.04(a) until the completion of the period of distribution
of the Shares contemplated thereby.
(e) The obligations of the Company under this Section 2.04 are
subject to the condition that the Company shall be entitled to postpone for up
to 90 days the filing of any registration statement otherwise required to be
prepared and filed by it pursuant to this Section 2.04 if (i) at the time it
receives requests for registration pursuant thereto, and for so long as the
Board of Directors of the Company determines, in its reasonable judgment, that
the filing of such registration statement and the offering of Registrable
Securities or Conversion Shares pursuant thereto would materially interfere with
any material financing, acquisition, corporate reorganization or other material
transaction by the Company, (ii) the Company promptly gives the Holders
requesting such registration written notice of such determination, and (iii) all
other similarly situated shareholders shall also be subject to the same
suspension. If the Company shall so postpone the filing of a registration
statement, the Holders requesting such registration shall have the right to
withdraw the requests for registration by giving written notice to the Company
within thirty days after receipt of the Company's notice of postponement and, in
the event of such withdrawal, such requests shall not be counted as being
requests for the registration statement that the Company is obligated to
prepare, file and cause to become effective pursuant to this Section 2.04, nor
shall the Holders be required to reimburse the Company for out-of-pocket
expenses incurred by it attributable to the registration of such Conversion
Shares.
ARTICLE III
REGISTRATION PROCEDURES
3.01 Company Obligations. Following the Closing, the Company will:
(a) furnish to the Holders, prior to the filing of a
registration statement pertaining to any Shares (each a "Registration
Statement") or any prospectus, amendment or supplement thereto, copies of each
such Registration Statement as proposed to be filed, which documents will be
subject to the reasonable review and comments of the Holders (and their
respective attorneys), and the Company will not file any such Registration
Statement, any
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prospectus or any amendment or supplement thereto (or any such documents
incorporated by reference) to which the Holders shall reasonably object in
writing; and thereafter furnish to the Holders such number of copies of such
Registration Statement, each amendment and supplement thereto (including any
exhibits thereto), the prospectus included in such Registration Statement
(including each preliminary prospectus) and such other documents as any Holder
may reasonably request in writing in order to facilitate the disposition of the
Shares registered pursuant to such Registration Statement; provided, however,
that the obligation of the Company to deliver copies of prospectuses or
preliminary prospectuses to any Holder shall be subject to the receipt by the
Company of reasonable assurances from such Holder that such Holder will comply
with the applicable provisions of the Securities Act and of such other
securities or blue sky laws as may be applicable in connection with any use of
such prospectuses or preliminary prospectuses;
(b) use its best efforts to register or qualify the Shares
registered pursuant to such Registration Statement under such other securities
or blue sky laws of such jurisdictions as a Holder may reasonably request and do
any and all other acts and things which may be reasonably necessary to enable
the Holder to consummate the disposition in such jurisdictions of such Shares;
provided, however, that the Company will not be required to (i) qualify
generally to do business in any jurisdiction where it would not otherwise be
required to qualify but for this subsection, (ii) subject itself to taxation in
any such jurisdiction, or (iii) consent to general service of process in any
such jurisdiction;
(c) apply, prior to or concurrently with the filing of the
Registration Statements, to the Nasdaq National Market System (or, if the
Company is not listed on the Nasdaq National Market System, any other exchange
on which the Company's Common Stock is then listed) for the listing of the
Conversion Shares and use its best effort to obtain the listing of such stock;
(d) notify the Holders in writing at any time when a
prospectus relating to the Shares registered pursuant to such Registration
Statement is required to be delivered under the Securities Act, of the
occurrence of an event requiring the preparation of a supplement or amendment to
such prospectus or filing of a report incorporated in the prospectus by
reference so that, as thereafter delivered to the purchasers of such Shares,
such prospectus (including documents incorporated therein by reference) will not
contain an untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading and promptly prepare, file with the Commission and make available
to the Holders any such supplement, amendment or report incorporated in the
prospectus by reference, including, without limitation, after any period
referred to in Section 2.01(c) or 2.02(d);
(e) make available for inspection by the Holders of Shares to
be registered pursuant to a Registration Statement and any attorney, accountant
or other professional retained thereby (collectively, the "Inspectors"), all
financial and other records, pertinent corporate documents and properties of the
Company (collectively, the "Records") as shall be
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reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers, directors and employees to
supply all information reasonably requested by any such Inspectors in connection
with such Registration Statement; provided, that the Company shall not be
required to make such information available to more than one law firm on behalf
of all Holders of Shares to be registered pursuant to a Registration Statement.
Records that the Company determines, in good faith, to be confidential and which
it notifies the Inspectors in writing are confidential shall not be disclosed by
the Inspectors unless (i) in the judgment of counsel to the Company the
disclosure of such Records is necessary to avoid or correct a misstatement or
omission in such Registration Statement, (ii) the release of such Records is
ordered pursuant to a subpoena or other order from a court of competent
jurisdiction, or (iii) the information in such Records is generally available to
the public. As a condition of receiving access to such confidential information
described in clause (i) or (ii) of the preceding sentence, the Holders of such
Shares shall agree that such confidential information obtained by them as a
result of such inspections shall be deemed confidential and shall not be used by
them as the basis for any market transactions in the securities of the Company
unless and until such information is made generally available to the public, it
being understood that nothing in this sentence shall reduce the Company's
obligations hereunder, including under Section 3.01(d). Each Holder
further shall agree that it will, upon learning that disclosure of such Records
from such Holder is sought in a court of competent jurisdiction, give notice to
the Company and allow the Company, at its expense, to undertake appropriate
action to prevent disclosure of the Records deemed confidential;
(f) obtain consents from its independent public accountants in
customary form as required to obtain and maintain effectiveness of the
registration statement and, in connection with its obligations under Section
2.04, obtain a "cold comfort" letter from such accountants in customary form;
(g) obtain an opinion or opinions from its counsel in
customary form and reasonably satisfactory to the Holders and their respective
legal counsel and, in an underwritten offering, to the underwriters and their
legal counsel;
(h) make generally available to the Holders earnings
statements, which need not be audited, satisfying the provisions of Section
11(a) of the Securities Act no later than forty-five days after the end of the
twelve-month period beginning with the first month of the first fiscal quarter
commencing after the effective date of a Registration Statement, which earnings
statements shall cover said twelve-month period;
(i) in an underwritten offering, make available its management
personnel for meetings with potential purchasers or "road shows" for a period of
not more than seven consecutive business days;
(j) promptly notify each Holder of the issuance or threatened
issuance of any stop order or other order suspending the effectiveness of a
Registration Statement or
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preventing or suspending the use of any preliminary prospectus, prospectus or
prospectus supplement, use reasonable efforts to prevent the issuance of any
such threatened stop order or other order, and, if any such order is issued, use
its best efforts to obtain the lifting or withdrawal of such order at the
earliest possible moment and promptly notify each Holder of any such lifting or
withdrawal;
(k) if requested by any Holder, the Company will promptly
incorporate in a prospectus supplement or post-effective amendment to a
Registration Statement such information concerning such Holder and such Holder's
intended method of distribution as such Holder requests to be included therein
(and which is not violative of an applicable law, rule or regulation, in the
reasonable judgment of the Company, after consultation with its outside legal
counsel), including, without limitation, with respect to any change in the
intended method of distribution, the amount or kind of Shares being offered by
such Holder, the offering price for such Shares or any other terms of the
offering or distribution of the Shares, and the Company will make all required
filings of such prospectus supplement or post-effective amendment as soon as
possible after being notified of the matters to be incorporated in such
prospectus supplement or post-effective amendment;
(l) as promptly as practicable after the filing with the SEC
of any document which is incorporated by reference into a registration
statement, notify each Holder of such filing and deliver a copy of such document
to each Holder;
(m) cooperate with the Holders to facilitate the timely
preparation and delivery of certificates, not bearing any restrictive legends,
unless otherwise required by the Holders, representing the Shares to be sold
under the Registration Statement, and enable such Shares to be in such
denominations and registered in such names as such Holders may request;
(n) cooperate with the Holders, their respective legal counsel
and any other interested party (including any interested broker-dealer) in
making any filings or submissions required to be made, and the furnishing of all
appropriate information in connection therewith, with the NASD;
(o) cause its subsidiaries to take all action necessary to
effect the registration of the Shares contemplated hereby, including preparing
and filing any required financial or other information;
(p) make available to the transfer agent for each class or
series of Shares a supply of certificates or other instruments evidencing or
constituting such Shares which shall be in a form complying with the
requirements of such transfer agent, promptly after a registration thereof; and
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(q) use its best efforts to keep each such registration or
qualification effective, including through new filings, amendments or renewals,
during the period the Registration Statement is required to be kept effective
and do any and all other acts or things reasonably necessary or advisable in
connection with such registration or qualifications in all jurisdictions in
which qualification or registration is necessary.
3.02 Information from Holders. The Company may require the Holders
to promptly furnish in writing to the Company such information regarding the
distribution of the Shares as it may from time to time reasonably request and
such other information as may be legally required in connection with such
registration.
3.03 Suspension of Sales. The Holders agree that, upon receipt of
any notice from the Company of the happening of any event of the kind described
in subsection 3.01(d) hereof, they will immediately discontinue disposition of
Shares pursuant to a Registration Statement until they receive copies of the
supplemented or amended prospectus contemplated by subsection 3.01(d) hereof,
and, if so directed by the Company, the Holders will deliver to the Company all
copies, other than permanent file copies then in their possession, of the most
recent prospectus (including any prospectus supplement) covering such Shares at
the time of receipt of such notice or destroy all such copies.
ARTICLE IV
REGISTRATION EXPENSES
4.01 Except as provided in Section 4.02, all fees and expenses
incident to the Company's performance of or compliance with this Agreement shall
be borne by the Company, including, without limitation, the following fees and
expenses: (a) all SEC, National Association of Securities Dealers, Inc., stock
exchange or other registration and filing fees and listing fees; (b) the fees
and expenses of the Company's compliance with securities or blue sky laws
(including reasonable fees and disbursements of counsel in connection with blue
sky qualifications of the Shares); (c) printing expenses; (d) the fees and
disbursements of counsel for the Company and of one counsel for the applicable
Holders for each registration, and the fees and expenses for independent
certified public accountants and other persons retained by the Company in
connection with such registration; (e) fees of transfer agents and registrars;
and (f) messenger and delivery expenses. In addition, the Company shall pay its
internal expenses (including, without limitation, all salaries and expenses of
its officers and employees performing legal or accounting duties), the expense
of any annual audit or quarterly review, the expense of any liability insurance
obtained by the Company, and the expenses and fees for listing or authorizing
for quotation the securities to be registered on each securities exchange on
which any shares of the Common Stock are then listed or quoted.
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4.02 The Holders shall pay all underwriting discounts and
commissions and all of their internal expenses incurred in connection with the
registration (including, without limitation, all salaries and expenses of
Holders' officers and employees performing legal or accounting duties). In
connection with an underwritten offering pursuant to Section 2.04, the Holders
and the Company shall share equally the expenses identified in the first
sentence of Section 4.01 (but not the expenses identified in the second sentence
of 4.01) as well as any other expenses of the offering (except as set forth in
the preceding sentence), including, without limitation, any annual audit,
special audit, if necessary, and "cold comfort" letters required by or incident
to the performance of any agreement with the underwriter
ARTICLE V
INDEMNIFICATION; CONTRIBUTION
5.01 Indemnification by the Company. The Company agrees to
indemnify and hold harmless each Holder, each of such Holder's officers,
directors, partners and members, and each of such Holder's legal counsel and
independent accountants, if any, and each person controlling any such persons
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, with respect to which registration, qualification or compliance
has been effected pursuant to this Agreement, and each underwriter, if any, and
each person who controls any underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages, liabilities and expenses (including reasonable costs of
investigation, any legal and any other expenses reasonably incurred in
connection with investigating, preparing or defending any such claim, loss,
damage, liability or action, and any of the foregoing incurred in settlement of
any litigation, commenced or threatened) arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in a
Registration Statement or prospectus contained therein or in any amendment or
supplement thereto or in any preliminary prospectus, or arising out of or based
upon 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 any rule or regulation promulgated under the
Securities Act or any state securities laws applicable to the Company and
relating to action or inaction by the Company in connection with any
registration, qualification or compliance required hereunder or arising out of
or based upon the Company's breach of any representation, warranty, covenant or
agreement contained in this Agreement; provided, however, that the Company shall
not be liable in any such case to the extent any of such losses, claims,
damages, liabilities or expenses arise out of, or are based upon, any such
untrue statement or omission or allegation thereof based upon information
furnished in writing to the Company by such Holder expressly for use therein.
5.02 Indemnification by Holders. XxXxx agrees, and each other
Holder that is not a signatory to this Agreement agrees by exercising any of its
rights hereunder, severally to indemnify and hold harmless the Company, its
directors and officers and each person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or
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Section 20 of the Exchange Act and each underwriter, if any, and each person who
controls any underwriter within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act to the same extent as the foregoing indemnity
from the Company set forth above in (a), but only with respect to information
furnished in writing by such Holder, or on its behalf expressly for use in the
Registration Statement or prospectus relating to the Shares, any amendment or
supplement thereto or any preliminary prospectus, under the heading "Selling
Shareholders" and "Distribution" and provided that the obligation of each Holder
to indemnify will be several and not joint. In case any action or proceeding
shall be brought against the Company or its directors or officers, any such
controlling person, or any such underwriter or controlling person of an
underwriter in respect of which indemnity may be sought against the Holder, the
Holder shall have the rights and duties given to the Company, and the Company or
its directors or officers or such controlling person or any such underwriter or
controlling person of an underwriter shall have the rights and duties given to
the Holder, by the preceding Section 5.01 hereof.
5.03 Conduct of Indemnification Proceedings. If any action or
proceeding (including any governmental investigation) shall be brought or
asserted against any person entitled to indemnification under Section 5.01 or
5.02 above (an "Indemnified Party") in respect of which indemnity may be sought
from any party who has agreed to provide such indemnification (an "Indemnifying
Party"), the Indemnifying Party shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to such Indemnified Party, and
shall assume the payment of all expenses. Such Indemnified Party shall have the
right to employ separate counsel in any such action and to participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Party unless (a) the Indemnifying Party has agreed
to pay such fees and expenses, or (b) such Indemnified Party shall have been
advised by counsel that there is an actual or potential conflict of interest on
the part of counsel employed by the Indemnifying Party to represent such
Indemnified Party (in which case, if such Indemnified Party notifies the
Indemnifying Party in writing that Indemnified Party elects to employ separate
counsel at the expense of the Indemnifying Party, the Indemnifying Party shall
not have the right to assume the defense of such action or proceeding on behalf
of such Indemnified Party; it being understood, however, that the Indemnifying
Party shall not, in connection with any one cause of action or proceeding or
separate but substantially similar or related actions or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys
(together with appropriate local counsel) at any time for all such Indemnified
Parties, which firm shall be designated in writing by such Indemnified Parties
unless there shall be conflicts of interest among such Indemnified Parties, in
which case the Indemnifying Party shall be liable for the fees and expenses of
additional counsel). The Indemnifying Party shall not be liable for any
settlement of any such action or proceeding or any threatened action or
proceeding effected without its written consent, which consent shall not be
unreasonably withheld, but if settled with its written consent or if there be a
final judgment of the plaintiff in any such action or proceedings, the
Indemnifying Party shall indemnify and hold harmless such Indemnified Parties
from and against any loss or liability (to the extent stated above) by reason of
such settlement or judgment. The failure of any Indemnified Party to give prompt
notice of a claim for
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indemnification hereunder shall not limit the Indemnifying Party's obligations
to indemnify under this Agreement, except to the extent such failure is
prejudicial to the ability of the Indemnifying Party to defend the action. No
Indemnifying Party, in the defense of any such claim or litigation, shall,
except with the consent of each Indemnified Party, consent to entry of any
judgment or enter into any settlement unless (x) there is no finding or
admission of any violation of any rights of any Person and no effect on any
other claims that be made against any Indemnified Party, (y) the sole relief
provided is monetary damages that are paid in full by the Indemnifying Party and
(z) such judgment or settlement includes 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.
5.04 Contribution. If the indemnification provided for in this
Article V is unavailable to the Indemnified Parties in respect of any losses,
claims, damages, liabilities or judgment referred to herein, then such
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 judgments in the following
manner: as between the Company on the one hand and any Indemnified Party
entitled to indemnification under Section 5.01 on the other, in such proportion
as is appropriate to reflect the relative fault of the Company on the one hand
and any Indemnified Party entitled to indemnification under Section 5.02 on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative fault of the Company on the one hand and
of any Indemnified Party entitled to indemnification under Section 5.02 on the
other shall be determined by reference to, among other things, whether the
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 such party,
and the party's relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. No person guilty
of fraudulent misrepresentation (within the means of subsection 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
5.05 Survival. The indemnity and contribution agreements contained
in this Article V shall remain operative and in full force and effect with
respect to any sales of Shares made pursuant to a registration statement filed
pursuant to this Agreement regardless of (a) any termination of this Agreement,
(b) any investigation made by or on behalf of any Indemnified Party or by or on
behalf of the Company, and (c) the consummation of the sale or successive resale
of the Shares.
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15
ARTICLE VI
MISCELLANEOUS
6.01 Rules 144 and 144A. The Company covenants that following the
registration of Shares it will file any reports required to be filed by it under
the Securities Act and the Exchange Act so as to enable Holders holding
registered Shares to sell such Shares without registration under the Securities
Act within the limitation of the exemptions provided by (a) Rules 144 and 144A
under the Securities Act, as each such Rule may be amended from time to time, or
(b) any similar rule or rules hereafter adopted by the SEC. Upon the request of
any such Holder, the Company will forthwith deliver to such Holder a written
statement as to whether it has complied with such requirements.
6.02 Amendments and Waivers. The provision of this Agreement may
not be amended, modified or supplemented, and waivers or consents to departures
from the provisions hereof may not be given other than as mutually agreed upon
in writing by the Company and the Holders of each of (i) 75% of the Registrable
Securities and (ii) 75% of the Conversion Shares.
6.03 Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, regular mail,
registered first-class mail, confirmed facsimile or recognized express courier
service by next business day delivery;
(i) if to the Company:
Metrocall, Inc.
0000 Xxxxxxxx Xxxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Chief Financial Officer
Fax Number: (000) 000-0000
with a copy to:
Xxxxxx, Xxxxxx & Xxxxxxxxx
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Attn: Xxxxxx X. Xxxxx, Esq.
Fax Number: (000) 000-0000
(ii) if to any Holder, to its address appearing on the
stock records of the Company.
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Notices shall be deemed given on the day on which delivered by hand or
facsimile, if delivered by 5:00 p.m. Eastern time; on the fifth business day
after mailing if delivered by mail; or the business day after delivery to an
overnight air courier if next-day delivery is specified.
6.04 Successors and Assigns. No Holder may assign any rights or
benefits under this Agreement except as provided in this Section 6.04. A Holder
may assign to any transferee without the Company's consent such Holder's rights
and benefits with respect to Preferred Shares or Conversion Shares. A transferee
that executes and delivers to the Company an agreement pursuant to which it
becomes bound by the terms of this Agreement shall retain the rights and
benefits of the transferor under this Agreement. The Company shall not assign
any rights, benefits or obligations under this Agreement without prior written
consent of the Holders of a majority of each of (i) the Registrable Securities
and (ii) the Conversion Shares provided, however, that the Company shall assign
its rights, benefits and obligations to any person the Company is merged with or
consolidated into or to any person to whom the Company sells substantially all
of its assets. This Agreement shall inure to the benefit of and be binding upon
the permitted successors and assigns of the Company, XxXxx and the other
Holders.
6.05 Counterparts. This Agreement may be executed in a number of
identical counterparts and it shall not be necessary for the Company and XxXxx
to execute each of such counterparts, but when each has executed and delivered
one or more of such counterparts, the several parts, when taken together, shall
be deemed to constitute one and the same instrument, enforceable against each in
accordance with its terms. In making proof of this Agreement, it shall not be
necessary to produce or account for more than one such counterpart executed by
the party against whom enforcement of this Agreement is sought.
6.06 Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
6.07 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OR CHOICE OF LAW.
6.08 Severability. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or further laws effective during
the term of this Agreement, such provision shall be fully severable; this
Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part of this Agreement; and the
remaining provisions of this Agreement shall remain in full force and effect and
shall not be affected by the illegal, invalid or unenforceable provision or by
its severance from this Agreement.
6.09 Entire Agreement. This Agreement and the Stock Purchase
Agreement (including exhibits thereto) are intended by the Company and XxXxx as
the final expression of
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their agreement and are intended to be a complete and exclusive statement of
their agreement and understanding in respect of the subject matter contained
herein. This Agreement supersedes all prior agreements and understandings
between the Company and XxXxx with respect to such subject matter.
6.10 Third Party Beneficiaries. Other than Indemnified Parties not
a party hereto, this Agreement is intended for the benefit of the Company, XxXxx
and their respective successors and permitted assigns and is not for the benefit
of, nor may any provision hereof be enforced by, any other person or entity.
6.11 Obligations Several; Independent Nature of Each Holder's
Rights. Each obligation of any Holder is several and no such Holder shall be
responsible for the obligations of any other Holder. Nothing contained herein,
and no action taken by any such Holder pursuant hereto, shall be deemed to
constitute such Holders as a partnership, an association, a joint venture or any
other kind of entity. Each Holder shall be entitled to protect and enforce its
rights arising out of this Agreement without notice to or the consent of any
other person and it shall not be necessary for any other such Holder to be
joined as an additional party in any proceeding for such purpose.
6.12 Nonwaiver. No course of dealing or any delay or failure to
exercise any right, power or remedy hereunder on the part of the Holder shall
operate as a waiver of or otherwise prejudice such Holder's rights, powers or
remedies.
6.13 Remedies. The Company acknowledges that the remedies at law of
the Holder in the event of any default or threatened default by the Company in
the performance of or compliance with any of the terms of this Agreement are not
and will not be adequate and that, to the fullest extent permitted by law, such
terms may be specifically enforced by a decree for the specific performance of
any agreement contained herein or by an injunction against a violation of any of
the terms hereof or otherwise without requiring such Holder to post any bond or
other security, unless otherwise required by applicable law (which cannot be
waived by the Company).
[Execution page following]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
METROCALL, INC.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President & Chief Operating
Officer
XXXXX COMMUNICATIONS COMPANIES, INC.
By: /s/ Xxxx Xxxxxxx Key
------------------------------------------
Name: Xxxx Xxxxxxx Key
Title: V.P.
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