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EXHIBIT 10.5
COMMON STOCK PURCHASE AGREEMENT
BY AND BETWEEN
PSINET INC.
AND
METROCALL, INC.
DATED AS OF FEBRUARY 2, 2000
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TABLE OF CONTENTS
COMMON STOCK PURCHASE AGREEMENT...................................................................................1
ARTICLE 1 ISSUANCE AND SALE OF COMMON STOCK; THE CLOSING..........................................................1
1.1 Issuance and Sale of Common Stock....................................................................1
1.2 The Closing..........................................................................................1
1.3 Time and Place of Closing............................................................................1
1.4 Transactions at the Closing..........................................................................1
ARTICLE 2 REPRESENTATION AND WARRANTIES...........................................................................2
2.1 Representations and Warranties of Purchaser..........................................................2
2.2 Representations and Warranties of the Company........................................................3
ARTICLE 3 COVENANTS...............................................................................................6
3.1 Antitrust Laws.......................................................................................6
3.2 Other Actions........................................................................................6
3.3 Board Nominations....................................................................................6
3.4 Listing of Additional Shares.........................................................................7
3.5 Limitations on Transfer..............................................................................7
3.6 Other Limitations on Purchaser.......................................................................7
3.7 FCC Applications.....................................................................................8
ARTICLE 4 CONDITIONS PRECEDENT....................................................................................9
4.1 Conditions Precedent to Obligations of Parties.......................................................9
4.2 Conditions Precedent to Obligations of the Company...................................................9
4.3 Conditions Precedent to the Obligations of Purchaser................................................10
4.4 Waiver of Conditions................................................................................11
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ARTICLE 5 TERMINATION AND DEFAULT................................................................................11
5.1 General.............................................................................................11
5.2 Procedure Upon Termination..........................................................................11
5.3 Effect of Termination...............................................................................12
ARTICLE 6 MISCELLANEOUS..........................................................................................12
6.1 Brokers.............................................................................................12
6.2 Survival of Representations and Warranties..........................................................12
6.3 Notices.............................................................................................12
6.4 Fees and Expenses...................................................................................13
6.5 Assignment..........................................................................................13
6.6 Counterparts........................................................................................14
6.7 Entire Agreement....................................................................................14
6.8 Public Announcements................................................................................14
6.9 Governing Law.......................................................................................14
6.10 Headings...........................................................................................14
6.11 Severability.......................................................................................14
6.12 Modification and Amendment.........................................................................15
6.13 Waiver.............................................................................................15
6.14 Parties Obligated and Benefited....................................................................15
6.15 Actions............................................................................................15
6.16 Terms..............................................................................................15
EXHIBITS
EXHIBIT A REGISTRATION RIGHTS AGREEMENT
EXHIBIT B VIRTUAL ISP AGREEMENT
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SCHEDULES
SCHEDULE 2.2.4 CAPITALIZATION
SCHEDULE 2.2.8 BROKERS
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COMMON STOCK PURCHASE AGREEMENT
THIS COMMON STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of
February 2, 2000, is entered into by and between PSINET INC., a New York
corporation ("Purchaser"), and METROCALL, INC., a Delaware corporation (the
"Company").
RECITALS
Purchaser desires to purchase, and the Company desires to issue and
sell, shares of common stock, $0.01 par value per share, of the Company (the
"Common Stock"), upon the terms and subject to the conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the foregoing and of the covenants,
agreements, representations and warranties hereinafter contained, and intending
to be legally bound, Purchaser and the Company hereby agree as follows:
ARTICLE 1
ISSUANCE AND SALE OF COMMON STOCK; THE CLOSING
1.1 ISSUANCE AND SALE OF COMMON STOCK. Upon the terms and subject
to the conditions set forth in this Agreement, the Purchaser agrees to purchase,
and the Company agrees to issue and sell, on the Closing Date (as defined below)
7,822,442 shares of Common Stock (the "Shares"). The purchase price for the
Shares will be $2.19 per share in cash.
1.2 THE CLOSING. Subject to the satisfaction or waiver of the
conditions set forth in Article 4, unless the parties otherwise agree, the
closing of the issuance and sale of the Shares (the "Closing") shall occur on
the fourth business day after both (a) the expiration of the applicable waiting
period under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), and (b) the Federal Communications Commission ("FCC")
has (i) granted any required consent to the transactions contemplated by this
Agreement (the "FCC Consents") or (ii) issued special temporary authorizations
to permit the Closing to occur prior to obtaining the FCC Consents. The "Closing
Date" shall be the date the Closing occurs.
1.3 TIME AND PLACE OF CLOSING. The Closing shall take place at the
offices of Xxxxxx, Xxxxxx & Xxxxxxxxx, 0000 X Xxxxxx, X.X., Xxxxxxxxxx, X.X.
00000 at 10:00 a.m., Washington, D.C. time, on the Closing Date or at such other
place agreed to by the parties.
1.4 TRANSACTIONS AT THE CLOSING. At the Closing, subject to the
terms and conditions of this Agreement
(a) The Company shall deliver to the Purchaser a certificate
registered in the Purchaser's name representing the Shares being purchased
thereby against payment of the purchase price therefor by wire transfer to the
Company's bank account previously designated in writing by the Company.
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(b) The Purchaser shall deliver to the Company an irrevocable
proxy, which shall be coupled with an interest, pursuant to which all Shares
shall be voted for the nominees of the Company's Board of Directors for election
to the Board for a period of 12 months after the Closing Date. The irrevocable
proxy shall be binding on any transferee of the Shares.
(c) The Company and the Purchaser shall have delivered to one
another the agreements, certificates, instruments and other documents specified
in Article 4.
ARTICLE 2
REPRESENTATION AND WARRANTIES
2.1 REPRESENTATIONS AND WARRANTIES OF PURCHASER. The Purchaser
represents and warrants to the Company, as of the date hereof and as of the
Closing Date (unless another date or period of time is specifically stated
herein for a representation or warranty), as follows:
2.1.1 Authorization. The Purchaser has full power and authority to
enter into this Agreement. This Agreement constitutes the valid and legally
binding obligation of the Purchaser, enforceable in accordance with its terms,
except as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance, and any other laws of general application
affecting enforcement of creditors' rights generally, and as limited by laws
relating to the availability of a specific performance, injunctive relief, or
other equitable remedies.
2.1.2 Purchase Entirely for Own Account. The Shares to be acquired
by the Purchaser will be acquired for investment for the Purchaser's own
account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof, and the Purchaser has no present intention of
selling, granting any participation in, or otherwise distributing the same in
any transaction which would be in violation of U. S. federal or state securities
laws or which would require the issuance and sale of the Shares to the Purchaser
hereunder to be registered under the Securities Act of 1933, as amended (the
"Securities Act"), subject, however, to the disposition of the Purchaser's
property being at all times within its control. The Purchaser does not presently
have any contract, undertaking, agreement or arrangement with any person to
sell, transfer or grant participations to such person or to any third person,
with respect to any of the Shares. The Purchaser has not been formed for the
specific purpose of acquiring the Shares.
2.1.3 Restricted Securities. The Purchaser understands that the
Shares have not been, and will not be, registered under the Securities Act, by
reason of a specific exemption from the registration provisions of the
Securities Act which depends upon, among other things, the bona fide nature of
the investment intent and the accuracy of the Purchaser's representations as
expressed herein. The Purchaser understands that the Shares are "restricted
securities" under applicable U.S. federal and state securities laws and that,
pursuant to these laws, the Purchaser must hold the Shares indefinitely unless
they are registered with the Securities and Exchange Commission and qualified by
state authorities, or an exemption from such registration and qualification
requirements is available. The Purchaser acknowledges that the Company has no
obligation to register or qualify the Shares for resale except as set forth in
the Registration Rights Agreement. The Purchaser further acknowledges that if an
exemption from registration or
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qualification is available, it may be conditioned on various requirements
including, but not limited to, the time and manner of sale, the holding period
for the Shares, and on requirements relating to the Company which are outside of
the Purchaser's control, and which the Company may not be able to satisfy.
2.1.4 Legends. The Purchaser understands that the certificates
representing the Shares may bear one or all of the following legends:
(a) "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN
ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN
CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH
SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF
COUNSEL IN A FORM REASONABLY SATISFACTORY TO THE COMPANY THAT
SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF
1933."
(b) Any legend required by the Blue Sky laws of any state to the
extent such laws are applicable to the shares represented by the certificate so
legended.
2.1.5 Accredited Investor. The Purchaser is (i) an accredited
investor as defined in Rule 501(a) of Regulation D promulgated under the
Securities Act or (ii) is a sophisticated investor, experienced in investing in
securities of emerging growth companies and acknowledges that the Purchaser is
able to fend for itself, can bear the economic risk of its investment and has
such knowledge and experience in financial or business matters that it is
capable of evaluating the merits and risks of the investment in the Shares.
2.1.6 Brokers. No broker, finder, agent or similar intermediary has
acted on behalf of the Purchaser in connection with this Agreement or the
transactions contemplated hereby, and there are no brokerage commissions,
finder's fees or similar fees or commissions payable by the Purchaser in
connection with this Agreement or the transactions contemplated hereby.
2.2 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to Purchaser, as of the date hereof and as of the
Closing Date (unless another date or period of time is specifically stated
herein for a representation or warranty), as follows:
2.2.1 Corporate Organization. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. The Company has all requisite corporate power and authority to own and
operate its business as it currently is being conducted and to own and lease the
properties and assets owned or leased by it. The Company is licensed or
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction in which the properties owned, leased or operated by it or the
nature of its business makes such qualification or licensing necessary, other
than in such jurisdictions where the failure to be so qualified or licensed
would not have a material adverse effect on the business, results of
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operations, properties, financial condition, assets and liabilities of the
Company and its subsidiaries, taken as a whole (a "Material Adverse Effect").
The Company has all requisite corporate power and authority to enter into this
Agreement, the Registration Rights Agreement and the Virtual ISP Agreement and
perform its obligations hereunder and thereunder. The Company has delivered to
the Purchaser true, correct and complete copies of its certificate of
incorporation and bylaws.
2.2.2 Authorization and Validity of Agreement. The execution,
delivery and performance by the Company of this Agreement, the Registration
Rights Agreement and the Virtual ISP Agreement and the other agreements,
certificates, documents and instruments contemplated hereby or referred to
herein to which it is or will be a party (collectively, the "Transaction
Documents"), and the consummation by it of the transactions contemplated hereby
and thereby have been duly authorized by all necessary corporate action of the
Company. Each of this Agreement, the Registration Rights Agreement and the
Virtual ISP Agreement has been or at the Closing will have been duly executed
and delivered by the Company and, assuming the due authorization, execution, and
delivery hereof by Purchaser, is or at the Closing will be a legal, valid and
binding obligation of the Company, enforceable against it in accordance with its
terms, except as and to the extent such enforceability may be subject to
bankruptcy or similar laws affecting creditors rights and general equitable
principles.
2.2.3 No Conflicts. The execution, delivery and performance by the
Company of this Agreement and the other Transaction Documents, the consummation
by the Company of the transactions contemplated hereby and thereby, and the
fulfillment by the Company of the terms hereof and thereof will not:
(a) conflict with, or result in a breach or violation of, the
provisions of the certificate of incorporation or bylaws of the Company;
(b) conflict with, or result in a default (or would constitute a
default but for any requirement of notice or lapse of time or both) under or
require notice under any material document, material agreement or other material
instrument to which the Company is a party or by which the Company is bound (the
"Company Third Party Contracts") or, require any third party consent, waiver or
approval in order that any Company Third Party Contract remain in effect without
material modification after the Closing Date and without giving rise to any
right to termination, cancellation, acceleration or loss of any material right
or benefit;
(c) result in the creation or imposition of any Lien on the
Company's properties pursuant to (i) any law or regulation to which the Company
or any of its property is subject, or (ii) any judgment, order or decree to
which the Company is bound or any its property is subject; or
(d) violate any law, order, judgment, rule, regulation, decree or
ordinance to which the Company is subject or bound.
2.2.4 Capital Stock of the Company. The authorized capital stock of
the Company consists of 200,000,000 shares of Common Stock and 1,000,000 shares
of preferred stock, par value $.01 per share ("Preferred Stock"). As of January
31, 2000, 42,103,017 shares
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of Common Stock were issued and outstanding. As of January 31, 2000, 249,895
shares of Preferred Stock were issued and outstanding, of which 239,517 shares
were issued and outstanding shares of Series A Convertible Preferred Stock
("Series A Preferred"), par value $.01 per share, and of which 10,378 shares
were issued and outstanding shares of Series C Convertible Preferred Stock
("Series C Preferred"), par value $.01 per share ("Series C Preferred"). All of
the issued and outstanding shares of capital stock of the Company have been duly
authorized and validly issued and are fully paid and nonassessable. Except as
set forth in Schedule 2.2.4 or as disclosed in the SEC Filings (as defined
below), there are no outstanding options, warrants or other rights, agreements
or commitments to subscribe for or purchase or otherwise acquire any shares of
capital stock (or securities directly or indirectly convertible into or
exchangeable or exercisable for shares of capital stock) of the Company. "SEC
Filings" mean the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998, and all other reports, statements and registration statements
filed by the Company with the Securities and Exchange Commission ("SEC") since
January 1, 1999 (collectively, the "SEC Filings"). The Company does not have
outstanding any bonds, debentures, notes or other obligations, under the terms
of which the holders of which have the right to vote with the shareholders of
the Company.
2.2.5 Financial Statements and Reports. The SEC Filings were
prepared and filed in accordance with the rules and regulations of the SEC. As
of their respective dates, the SEC Filings did not contain any 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, in light of the
circumstances under which they were made, not misleading. The financial
statements of the Company included in the SEC Filings were prepared in
accordance with GAAP as in effect from time to time applied on a consistent
basis (except as otherwise noted in such financial statements) and present
fairly in all material respects the consolidated financial condition, results of
operations and cash flows of the Company as of the dates and for the periods
indicated, subject, in the case of interim financial statements, to normal year
end audit adjustments. Since September 30, 1999, there has not been any event,
change or development which, individually or in the aggregate, would have a
Material Adverse Effect.
2.2.6 Litigation. There is no action, suit, proceeding or
investigation pending or, to the Company's knowledge, currently threatened
against the Company, its properties, assets or business, that questions the
validity of this Agreement or the other Transaction Documents or the right of
the Company to enter into this Agreement or the other Transaction Documents, or
to consummate the transactions contemplated hereby or thereby, or that might
result, either individually or in the aggregate, in any Material Adverse Effect.
2.2.7 Validity of Securities. At Closing, the Shares to be issued
to Purchaser will be duly and validly authorized and issued, fully paid and
nonassessable, free and clear of any preemptive rights or liens. Based in part
on the representations of the Purchaser in Section 2.1, the issuance and sale of
the Shares pursuant to this Agreement is exempt from registration under the
Securities Act.
2.2.8 Brokers. Except as set forth in Schedule 2.2.8, no broker,
finder, agent or similar intermediary has acted on behalf of the Company in
connection with this Agreement or the transactions contemplated hereby, and
there are no brokerage commissions, finder's fees or
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similar fees or commissions payable by the Company in connection with this
Agreement or the transactions contemplated hereby.
2.2.9 Full Disclosure. No representation, warranty or other
statement of the Company contained in this Agreement or any other Transaction
Document or, to the Company's knowledge, other written statement furnished to
the Purchaser in connection with the transactions contemplated by this Agreement
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained herein or therein
relating to this Agreement and the transactions contemplated hereby or to the
business, results of operations or financial condition of the Company not
misleading when taken as a whole in the light of the circumstances under which
they were made. There is no fact known to the Company which could reasonably be
expected to have, in light of the circumstances in which it is made, a Material
Adverse Effect that has not been disclosed herein or in such other documents,
certificates, instruments and statements furnished to the Purchaser for use in
connection with the transactions contemplated hereby.
ARTICLE 3
COVENANTS
3.1 ANTITRUST LAWS. Each of the Company and the Purchaser will, or
will cause its "ultimate parent" to prepare and file as soon as practicable all
filings that are required under the HSR Act, to respond as soon as practicable
to all inquiries received from the Federal Trade Commission or the Antitrust
Division of the Department of Justice for additional information or
documentation, to respond as soon as practicable to all inquiries received from
any other government agency in connection with antitrust matters, and to seek
early termination of any waiting period under the HSR Act.
3.2 OTHER ACTIONS. Each of the Company and the Purchaser shall use
its reasonable best efforts to (i) take all actions necessary or appropriate to
consummate the transactions contemplated by this Agreement and (ii) cause the
fulfillment at the earliest practicable date of all of the conditions to their
respective obligations to consummate the transactions contemplated by this
Agreement.
3.3 BOARD NOMINATIONS. On the Closing Date, the Company's Chief
Executive Officer shall recommend to the Company's Nominating and Governance
Committee that (i) the Company's Board of Directors elect a senior executive of
Purchaser reasonably acceptable to the Company to be designated by the Purchaser
prior to the Closing Date to the Company's Board of Directors effective as of
the Closing Date, and (ii) such person be nominated to stand for election for a
three-year term with the other nominated Board members at the next annual
meeting of stockholders of the Company presently scheduled to be held in May,
2000. If, at the end of the three-year term, Purchaser and/or its affiliates
owns at least 7.5% of the issued and outstanding shares of Common Stock, such
person or another senior executive of Purchaser reasonably acceptable to the
Company will be nominated for another three-year term.
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3.4 LISTING OF ADDITIONAL SHARES. The Company will file with the
Nasdaq National Market a Notification Form for Listing of Additional Shares for
an amount of shares of Common Stock equal to at least the amount of the Shares.
3.5 LIMITATIONS ON TRANSFER. Notwithstanding any other provision of
this Agreement, for a period of 12 months after the Closing Date, Purchaser will
not directly or indirectly sell, transfer or otherwise dispose of any of the
Shares, other than to an affiliate of the Purchaser or pursuant to a pledge to
an unaffiliated third-party lender in connection with a bona fide lending
transaction or a foreclosure or similar sale in connection therewith, unless the
Purchaser shall have first delivered to the Company a written offer to resell
such Shares (the "Offered Shares") for cash at the current market price.
"Current market price" for this purpose shall mean the average closing trading
price per share of the Common Stock on the Nasdaq Small Cap Market (or such
other exchange or quotation service on which the Common Stock shall then be
traded or quoted) for the 10 trading days immediately prior to the written
offer. Upon receipt of the written offer, the Company will have five business
days within which to accept the offer, and shall be required to make settlement
of the purchase within three business days after the date on which it accepts
the offer. If the right given to the Company in this section shall not have been
exercised as to the Offered Shares as set forth above, the Purchaser shall have
the right, at any time within three months after the expiration of such five
business day period, to dispose of any or all of the Offered Shares. If by the
end of such three-month period, provided such three-month period ends prior to
the expiration of the 12-month period referred to in the first sentence of this
section, the Purchaser has not sold or otherwise disposed of all of the Offered
Shares, the remaining Offered Shares shall not be sold by the Purchaser except
after compliance again with the provisions of this Section 3.5. Nothing in this
section shall prevent the Purchaser from selling any Shares pursuant to a tender
offer, merger, sale of all or substantially all the Company's assets or any
similar transaction that offers each holder of Common Stock (other than, if
applicable, the person proposing such transaction) the opportunity to dispose of
Common Stock for the same consideration or otherwise contemplates the
acquisition of Common Stock beneficially owned by each such holder for the same
consideration.
3.6 OTHER LIMITATIONS ON PURCHASER. For a period of 24 months after
the Closing Date, the Purchaser agrees that, unless it is specifically invited
or otherwise permitted in writing to do so by the Company, it will not, and will
cause each of its affiliates not to, directly or indirectly:
(a) in any way acquire or agree to acquire beneficial ownership of
any securities or any direct or indirect rights or options to acquire beneficial
ownership of any securities of the Company, except by way of stock dividends,
stock splits or distributions by the Company made available to holders of Common
Stock generally, including, without limitation, pursuant to a preferred stock
purchase rights plan of the Company or pursuant to any similar plan or
distribution;
(b) make any public announcement with respect to, or submit to the
Company or any of its directors, officers, representatives, employees,
attorneys, advisers, agents or affiliates (whether publicly or otherwise) any
proposal for, the acquisition of securities of the Company or for or with
respect to any merger, consolidation or business combination involving the
Company or its affiliates or for or with respect to any purchase of a
substantial portion of the assets of the Company or its affiliates, whether or
not any parties other than the Purchaser and its
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affiliates are involved and whether or not such proposal might require the
making of a public announcement by the Company; provided, however, that the
Purchaser shall be permitted to approach the Board of Directors of the Company,
directly or indirectly through its executive officers or investment bankers, for
purposes of obtaining a waiver of its obligations and commitments under this
clause (b);
(c) make, or in any way participate in, any "solicitation" of
"proxies" to vote any voting securities of the Company or become a "participant"
in any "election contest" (as such terms are defined or used in Regulation 14A
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as
such Regulation is currently in effect), provided that nothing herein restricts
the ability of the Purchaser to vote the Shares pursuant to proxies distributed
by the Company;
(d) propose any matter for submission to a vote of shareholders of
the Company;
(e) form, join or in any way participate in a "group" (within the
meaning of Section 13(d) (3) of the Exchange Act) with respect to any voting
securities of the Company other than as specifically contemplated by this
Agreement;
(f) grant any proxy with respect to any voting securities of the
Company to any person not approved by the Company;
(g) deposit any voting securities of the Company in a voting trust
or subject any such securities to any arrangement or agreement with respect to
the voting of such securities or other agreement having similar effect;
(h) take any action which would be reasonably likely to require the
Company to make a public announcement regarding any of the matters specified in
clauses (a)-(g) of this Section 3.6;
(i) enter into any negotiations, arrangements or understandings
with any third party with respect to any of the foregoing, or any discussions
designed to advise, assist or encourage any third party in connection with any
of the foregoing;
(j) seek to influence or influence (except as a customer or
supplier of the Company in the ordinary course of business) the management or
policies of the Company; provided, however, that this clause (j) shall not
prohibit the designee of the Purchaser on the Company's Board of Directors under
Section 3.3 from taking action and serving in his capacity as a director of the
Company in a manner consistent with the proper exercise of his fiduciary and
other duties as a director of the Company; or
(k) disclose publicly any intention, plan or arrangement
inconsistent with the foregoing.
3.7 FCC APPLICATIONS. If necessary to effectuate the transactions
contemplated by this Agreement, the Company shall prepare and file as soon as
practicable all required applications for the FCC Consents and shall use its
reasonable best efforts to obtain such consents at the
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earliest practicable date. Purchaser shall reasonably cooperate with the Company
in the Company's preparation, filing and prosecution of any such applications.
ARTICLE 4
CONDITIONS PRECEDENT
4.1 CONDITIONS PRECEDENT TO OBLIGATIONS OF PARTIES. The respective
obligations of Purchaser, on the one hand, and the Company, on the other, to
consummate the transactions contemplated by this Agreement are subject to the
satisfaction, at or prior to the Closing Date, of each of the following
conditions:
4.1.1 No Injunction, Etc. No preliminary or permanent injunction or
other order shall have been issued by any federal or state court of competent
jurisdiction in the United States or by any U.S. federal or state governmental
or regulatory body, and no statute, rule, regulation or executive order shall
have been promulgated or enacted by any U.S. federal or state governmental
authority which restrains, enjoins or otherwise prohibits in any material
respects the transactions contemplated hereby.
4.1.2 HSR Act. Any waiting period under the HSR Act applicable to
the consummation of the transactions contemplated hereby shall have expired.
4.1.3 Registration Rights Agreement. The parties shall have entered
into a Registration Rights Agreement in substantially the form attached hereto
as Exhibit A.
4.1.4 Virtual ISP Agreement. The parties shall have entered into
the Virtual ISP Agreement in substantially the form attached hereto as Exhibit
B.
4.1.5 Conversion of Series C Preferred. All of the issued and
outstanding shares of Series C Preferred shall have been exchanged for shares of
Common Stock.
4.1.6 FCC Approval. If required, the Company shall have obtained
the prior approval of the FCC to the transactions contemplated by this
Agreement; provided, that this condition shall be satisfied if the Company
obtains special temporary authority from the FCC to permit the Closing to occur
prior to obtaining the FCC Consents.
4.2 CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY. In addition
to the conditions set forth in Section 4.1, the obligations of the Company to
consummate the transactions to be consummated at the Closing are subject to the
satisfaction, at or prior to the Closing Date, of each of the additional
conditions set forth below:
4.2.1 Accuracy of Representations and Warranties. The
representations and warranties of Purchaser contained herein or in any
certificate delivered pursuant to this Agreement shall be true and correct in
all material respects on the date when made and shall be repeated at and as of
the Closing Date and shall be true and correct in all material respects on the
Closing Date as so made again (unless a representation is made as of a specific
date, and in such event it shall be true and correct in all material respects as
of such date).
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4.2.2 Performance of Agreements. Purchaser shall have performed in
all material respects all obligations and agreements, and complied in all
material respects with all covenants and conditions contained in this Agreement,
to be performed or complied with by it prior to or at the Closing Date.
4.2.3 Certificates. The Company shall have received a certificate
from Purchaser, dated the Closing Date, signed by the President or any
authorized Vice President of Purchaser, in his capacity as an officer of
Purchaser, to the effect that, to the best of his knowledge, information and
belief, the conditions specified in Section 4.2.1 and Section 4.2.2 have been
satisfied.
4.3 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PURCHASER. In
addition to the conditions set forth in Section 4.1, the obligations of
Purchaser to consummate the transactions to be consummated at the Closing are
subject to the satisfaction, at or prior to the Closing Date, of each of the
additional conditions set forth below:
4.3.1 Accuracy of Representations and Warranties. The
representations and warranties of the Company contained herein or in any
certificate delivered pursuant to this Agreement shall be true and correct in
all material aspects on the date when made and shall be repeated at and as of
the Closing Date and shall be true and correct in all material respects on the
Closing Date as so made again (unless a representation is made as of a specific
date, and in such event it shall be true and correct in all material respects as
of such date).
4.3.2 Performance of Agreements. The Company shall have performed
in all material respects all obligations and agreements, and complied in all
material respects with all covenants and conditions contained in this Agreement,
to be performed or complied with by it prior to or at the Closing Date.
4.3.3 Certificates. Purchaser shall have received a certificate
from the Company, dated the Closing Date, signed by the President or any
authorized Vice President of the Company, in his capacity as an officer of the
Company, to the effect that, to the best of his knowledge, information and
belief, the conditions specified in Section 4.3.1 and Section 4.3.2 have been
satisfied.
4.3.4 Opinion of Counsel for the Company. Purchaser shall have
received an opinion of the Company's counsel dated the Closing Date in a form
agreed to by the parties.
4.3.5 Other Deliveries. The Company shall have delivered to
Purchaser at the Closing the following:
(a) a certificate of incumbency for the officers executing the
documents on behalf of the Company;
(b) a certified copy of the resolutions duly adopted by the
directors of the Company and signed by the Secretary or Assistant Secretary
authorizing the transactions contemplated by this Agreement;
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(c) a certificate of the Secretary or Assistant Secretary
certifying that the resolutions referred to in Section 4.3.5(b) have not been
rescinded, modified or withdrawn and that such resolutions are in full force and
effect as of the Closing Date; and
(d) such further certificates and documents evidencing the
consummation by the Company of the transactions contemplated hereby as Purchaser
shall reasonably request.
4.3.6 Other Stock Purchase Agreements. Contemporaneously with the
Closing, the Company shall have issued and sold at least 7,822,442 shares of
Common Stock to HMTF Bridge MC I, LLC and at least 7,766,769 shares of Common
Stock to Aether Systems, Inc. at a purchase price of at least $2.19 per share
and otherwise in accordance with the terms of the Common Stock Purchase
Agreements of even date hereof, respectively, between the Company and HMTF
Bridge MC I, LLC and the Company and Aether Systems, Inc.
4.4 WAIVER OF CONDITIONS. Each of the parties, in its discretion,
may waive, in whole or in part, at or prior to the Closing Date, the failure of
satisfaction of any of the conditions precedent to its obligations set forth
herein. No such waiver by either of the parties shall be effective unless made
in writing.
ARTICLE 5
TERMINATION AND DEFAULT
5.1 GENERAL. This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the Closing Date, as
set forth below:
5.1.1 Mutual Consent. This Agreement may be terminated by the
mutual consent of the parties.
5.1.2 Order or Decree. This Agreement may be terminated by
Purchaser or the Company if any court of competent jurisdiction in the United
States or other U.S. governmental body shall have issued an order, decree,
ruling or taken any other action restraining, enjoining or otherwise prohibiting
in any material respects the transactions contemplated hereby and such order,
decree, ruling or other action shall have become final and nonappealable.
5.1.3 Outside Date. This Agreement may be terminated by either
party (a) if the Closing shall not have occurred by July 1, 2000 (the "Outside
Date") or (b) if one or more conditions to such party's obligation to consummate
the transactions contemplated hereby cannot be satisfied by the Outside Date;
provided, however, that no party may exercise its rights under this Section
5.1.3 if such party is in material breach or default under this Agreement.
5.2 PROCEDURE UPON TERMINATION. In the event of the termination of
this Agreement, written notice thereof shall promptly be given to the other
party hereto and this Agreement shall terminate, all further obligations of the
parties hereunder to satisfy the conditions precedent to the Closing shall
terminate, and the transactions contemplated hereby shall be abandoned without
further action by any of the parties hereto.
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5.3 EFFECT OF TERMINATION. Nothing in this Article 5 shall relieve
any party hereto of any liability for intentional or willful breach of this
Agreement, including, without limitation, a breach relating to the intentional
or willful failure to use reasonable efforts to satisfy the conditions set forth
in Article 4. The parties shall have no liability for termination of this
Agreement for any reason other than an intentional or willful breach of this
Agreement, including, without limitation, no liability for any termination by
reason of the failure to have satisfied any of the conditions set forth in
Article 4 which is not attributable to an intentional or willful failure to have
used reasonable efforts in connection therewith.
ARTICLE 6
MISCELLANEOUS
6.1 BROKERS. The transactions contemplated hereby have been and
shall be carried on by parties in such manner as not to give rise to any valid
claims against the parties for a brokerage commission, finder's fee or other
like payment, other than as disclosed in Section 2.1.6 or Section 2.2.8. Each
party agrees to indemnify and hold the other harmless from and against any
claims for brokerage commissions or finder's fees insofar as such claims shall
be alleged to be based upon arrangements or agreements made by the indemnifying
party or on its behalf. Such indemnity shall include the cost of reasonable
counsel fees in connection with the defense of any such claims.
6.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Regardless of any
investigation at any time made by or on behalf of any party, or of any
information any party may have in respect thereof, all representations and
warranties made hereunder or pursuant hereto or in connection with the
transactions contemplated hereby shall survive the Closing for a period of
eighteen months from the Closing; provided, however, that each party hereby
represents and warrants to the other party that it has no actual knowledge as of
the date hereof or as of the Closing of any breach of any representation or
warranty by such other party (as contrasted with knowledge solely of a fact
which may give rise to any such breach).
6.3 NOTICES. Except as otherwise provided, all notices which are
permitted or required under this Agreement shall be in writing and shall be
deemed given (a) when delivered personally, (b) if by fax upon transmission with
confirmation of receipt by the receiving party's facsimile terminal, (c) if sent
by documented overnight delivery service on the date delivered or (d) if sent by
mail, five (5) business days after being mailed by registered or certified mail,
postage prepaid, addressed as follows, or to such other person or address as may
be designated by notice to the other party:
If to the Company, to:
Metrocall, Inc.
0000 Xxxxxxxx Xxxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx, Chief Financial Officer and Treasurer
Fax Number: (000) 000-0000
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with a copy (which shall not constitute notice) to:
Xxxxxx, Xxxxxx & Xxxxxxxxx
0000 X Xxxxxx, XX
Xxxxxxxxxx, XX 00000-0000
Attn: Xxxxxx X. Xxxxx
Fax Number: (000) 000-0000
If to Purchaser, to:
PSINet Inc.
000 Xxxxxxx Xxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxx Xxxxxxx, Vice President, Corporate Development
Fax Number: (000) 000-0000
With a copy (which shall not constitute notice) to:
PSINet Inc.
000 Xxxxxxx Xxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxxx X. Xxxxx, Senior Vice President and
General Counsel
Fax Number: (000) 000-0000
and to:
Xxxxx Xxxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxxxxx
Fax Number: (000) 000-0000
6.4 FEES AND EXPENSES. Each party shall pay the filing fee relating
to any filing required by it, if any, in accordance with the HSR Act. If
applications to obtain the FCC's consent to the transactions contemplated by
this Agreement are required, the Company shall pay any required filing or other
fees and expenses in connection with the preparation, filing, and prosecution of
such applications. All other expenses incurred in connection with the
negotiation, preparation, execution and performance of this Agreement shall be
paid by the party incurring such expenses.
6.5 ASSIGNMENT. This Agreement and the transactions contemplated
hereby may not be assigned or otherwise transferred, in whole or in part, by
operation of law or otherwise, without the prior written consent of the other
party; provided, however, that notwithstanding the foregoing, (i) each party
shall have the right to pledge, assign or otherwise transfer this Agreement and
any other Transaction Document and its rights hereunder and thereunder, in whole
or in part, as collateral security to any lender, and (ii) each party shall have
the right to assign or transfer this Agreement and any other Transaction
Document and its rights hereunder
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and thereunder, in whole or in part, to its parent or to any direct or indirect
wholly-owned subsidiary of that party or to any person into which that party may
be merged or consolidated or which purchases all or substantially all of the
assets of that party; provided, however, that (a) such parent, subsidiary or
person agrees to be bound by the terms of this Agreement or other Transaction
Document (including, without limitation, all provisions binding upon the
assigning or transferring party) and (b) any such assignment or transfer shall
not relieve that party from any liability or obligation under this Agreement or
other Transaction Document.
6.6 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which when so executed and delivered, shall be an original
instrument, but such counterparts together shall constitute a single agreement.
6.7 ENTIRE AGREEMENT. This Agreement, including all Exhibits
hereto, and all certificates and documents executed and delivered in connection
with this Agreement, when executed and delivered, shall constitute the entire
agreement of the parties, superseding and extinguishing all prior agreements and
understandings, representations and warranties, relating to the subject matter
hereof.
6.8 PUBLIC ANNOUNCEMENTS. Each party shall have the right to
review, comment upon and approve any publicity materials, press releases or
other public statements by the other party that name or otherwise identify such
party or any of its affiliates or refer to, or describe any aspect of, this
Agreement or other Transaction Document or the transactions contemplated hereby
and thereby; provided, however, that with respect to disclosure documents to be
filed by either party under the Exchange Act or the Securities Act, subject to
the last sentence of this Section 6.8, each party shall only have the right to
prior review and to comment upon the other party's documents. Each party agrees
that it will not issue any such publicity materials, press releases or public
statements without the prior written approval of the other party, which approval
shall not be unreasonably withheld, conditioned or delayed. The Company and the
Purchaser shall cooperate with each other to request confidential treatment as
may be mutually agreed by them with respect to certain terms of this Agreement,
the other Transaction Documents and the transactions contemplated hereby and
thereby in any filing with the SEC, any other governmental authority or any
securities exchange or stock market.
6.9 GOVERNING LAW. This Agreement and the rights and obligations of
the parties hereunder shall be governed by the substantive laws of the State of
Delaware applicable to contracts made and to be performed therein, without
reference to the principles of conflicts of laws.
6.10 HEADINGS. The section and other headings contained in this
Agreement are for reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
6.11 SEVERABILITY. Any provision of this Agreement which is invalid
or unenforceable shall be ineffective to the extent of such invalidity or
unenforceability, provided that such invalidity or unenforceability does not
deny any party the material benefits of the transactions for which it has
bargained, such invalidity or unenforceability shall not affect in any way the
remaining provisions hereof.
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6.12 MODIFICATION AND AMENDMENT. This Agreement may not be modified
or amended except by written agreement specifically referring to this Agreement
and signed by the parties hereto.
6.13 WAIVER. No waiver of a breach or default hereunder shall be
considered valid unless in writing and signed by the party giving such waiver,
and no such waiver shall be deemed a waiver of any subsequent breach or default
of the same or similar nature.
6.14 PARTIES OBLIGATED AND BENEFITED. Subject to the limitations
set forth below, this Agreement will be binding upon the parties hereto and
their respective assignees and successors in interest and will inure solely to
the benefit of such parties and their respective assigns and successors in
interest, and no other person will be entitled to any of the benefits conferred
by this Agreement.
6.15 ACTIONS. Each party will execute and deliver to the other,
from time to time at or after the Closing, for no additional consideration and
at no additional cost to the requesting party (without incurring any obligation
to pay money), such further assignments, certificates, instruments, records or
other documents, assurances or things as may be reasonably necessary to give
full effect to this Agreement and to allow each party fully to enjoy and
exercise the rights accorded and acquired by it under this Agreement.
6.16 TERMS. Terms used with initial capital letters will have the
meanings specified, applicable to both singular and plural forms, for all
purposes of this Agreement. The words "include" and "exclude" and derivatives of
those words are used in this Agreement in an illustrative sense rather than
limiting sense.
[Execution Page Following]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective duly authorized representatives, officers or agents
on the date first written above.
PSINET INC.
By: ________________________________
Its: _______________________________
METROCALL, INC.
By: ________________________________
Its: _______________________________
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EXHIBIT A
REGISTRATION RIGHTS AGREEMENT
(See Attached)
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REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered
into as of ________ ___, 2000, by and between METROCALL, INC., a Delaware
corporation (the "Company"), and PSINET INC., a New York corporation
("Purchaser").
RECITALS
WHEREAS, the Company and Purchaser are parties to that certain Common
Stock Purchase Agreement, dated as of February 2, 2000 (the "Stock Purchase
Agreement"), pursuant to which Purchaser will purchase from the Company (the
"Purchase") 7,822,442 shares (the "Common Shares") of common stock, $.01 par
value, of the Company (the "Common Stock"); and
WHEREAS, it is a condition precedent to the consummation of the
transactions contemplated by the Stock Purchase Agreement that the Company and
Purchaser enter into this Agreement.
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, intending to be legally bound, agree as
follows:
ARTICLE I
DEFINITIONS
1.01 "Closing" means the closing of the Purchase pursuant to which the
Company will have issued the Common Shares to Purchaser in accordance with the
terms and conditions of the Stock Purchase Agreement.
1.02 "Commission" means the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
1.03 "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.
1.04 "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.
1.05 "Holder" means Purchaser and/or its permitted successors and
assigns pursuant to Section 6.05.
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1.06 "Person" means an individual or corporation, partnership, trust,
unincorporated organization, association or other entity and includes any
Governmental Authority.
1.07 "Registrable Securities" means the Common Shares received by
Purchaser from the Company pursuant to the Stock Purchase Agreement and any
additional shares of Common Stock issued by the Company in respect thereof in
connection with any stock dividend, stock split, recapitalization or similar
event; provided, however, 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), (ii) such Registrable Security is no
longer held of record by Holder, or (iii) the Holder of such Registrable
Security is then able to use Rule 144(k) under the Securities Act (or any
successor provision) to transfer such Registrable Security.
1.08 "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.
1.09 "Shares" means shares of the Registrable Securities.
ARTICLE II
REGISTRATION RIGHTS
2.01 Required Registrations. At any time or times after the date hereof
(so long as Holder shall own Registrable Securities), Holder may notify the
Company in writing that it (i) intends to offer or cause to be offered for
public sale all or any portion of its Registrable Securities (such requests
shall be in writing and shall state the number of shares of Registrable
Securities intended to be disposed of) and (ii) request that the Company cause
such Registrable Securities to be registered under the Securities Act; provided,
that any such request shall cover at least 2,000,000 shares and shall not be
made more frequently than every 12 months. The Company shall prepare and file
with the Commission registration statements under the Securities Act with
respect to the Registrable Securities requested to be so registered and shall
use its reasonable best efforts to cause such registration statements to become
effective promptly after filing. The registration statement with respect to such
Registrable Securities shall be filed with the Commission within ninety (90)
days after receipt of Holder's notification relating thereto.
Except as provided in the next succeeding paragraph of this Section
2.01, the Company shall use its reasonable 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 by Holder pursuant to Rule 144(k) under the Securities Act.
The obligations of the Company under this Section 2.01 are subject to
the condition that the Company shall be entitled to require the Holder 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
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this Section 2.01 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 Holder 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 the Shares during
periods when the Holder is required to suspend the sale of such Shares as
provided in this paragraph. As soon as possible after the expiration of such
periods, the Company shall amend its registration statements as necessary to
permit the Holder to sell Shares pursuant to such registration statements and
shall notify the Holder in writing that it may resume the sale of Shares
pursuant to such Registration Statement. Any registration made pursuant to this
Section 2.01 shall not include a plan of distribution involving an underwritten
offering.
2.02. Piggyback Registration. (a) If the Company proposes to file a
registration statement under the Securities Act with respect to an offering of
Common Stock for its own account or for the account of another Person (other
than a registration statement on Form S-4 or S-8, or pursuant to Rule 415 (or
any substitute form or rule, respectively, that may be adopted by the
Commission)), the Company shall give written notice of such proposed filing to
the Holder at the address set forth in the share register of the Company as soon
as reasonably practicable (but in no event less than 15 days before the
anticipated filing date), undertaking to provide the Holder the opportunity to
register on the same terms and conditions such number of Registrable Securities
as the Holder may request (a "Piggyback Registration"). The Holder will have
seven business days after receipt of any such notice to notify the Company as to
whether it wishes to participate in a Piggyback Registration (which notice shall
not be deemed to be a request pursuant to Section 2.01); provided that should
the Holder fail to provide timely notice to the Company, the Holder will forfeit
any rights to participate in the Piggyback Registration with respect to such
proposed offering. In the event that the registration statement is filed on
behalf of a Person other than the Company, the Company will use its reasonable
best efforts to have the Registrable Securities that the Holder wishes to sell
included in the registration statement. If the Company or the Person for whose
account such offering is being made shall determine in its sole discretion not
to register or to delay the proposed offering, the Company may, at its election,
provide written notice of such determination to the Holder and (i) in the case
of a determination not to effect the proposed offering, shall thereupon be
relieved of the obligation to register such Registrable Securities in connection
therewith, and (ii) in the case of a determination to delay a proposed offering,
shall thereupon be permitted to delay registering such Registrable Securities
for the same period as the delay in respect of the proposed offering. As between
the Company and the Holder, the Company shall be entitled to select the
underwriters in connection with any Piggyback Registration.
(b) Priority on Piggyback Registrations. If the Registrable Securities
requested to be included in the Piggyback Registration by the Holder differ from
the type of securities proposed to be registered by the Company and the managing
underwriter advises the Company that due to such differences the inclusion of
such Registrable Securities would cause a material adverse effect on the
business, results of operations, properties, financial condition, assets and
liabilities of the Company and its subsidiaries, taken as a whole (a "Material
Adverse Effect"), then (i) the number of Holder's Registrable Securities to be
included in the Piggyback Registration shall be
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reduced to an amount which, in the opinion of the managing underwriter, would
eliminate such Material Adverse Effect or (ii) if no such reduction would, in
the opinion of the managing underwriter, eliminate such Material Adverse Effect,
then the Company shall have the right to exclude all such Registrable Securities
from such Piggyback Registration, provided, that no other securities of such
type are included and offered for the account of any other Person in such
Piggyback Registration. Any partial reduction in number of Registrable
Securities of the Holder to be included in the Piggyback Registration pursuant
to clause (i) of the immediately preceding sentence shall be effected pro rata
based on the ratio which the Holder's requested shares bears to the total number
of shares requested to be included in such Piggyback Registration by all Persons
other than the Company who have the contractual right to request that their
shares be included in such registration statement and who have requested that
their shares be included. If the Registrable Securities requested to be included
in the registration statement are of the same type as the securities being
registered by the Company and the managing underwriter advises the Company that
the inclusion of such Registrable Securities would cause a Material Adverse
Effect, the Company will be obligated to include in such registration statement,
as to the Holder, only a portion of the shares Holder has requested be
registered equal to the ratio which the Holder's requested shares bears to the
total number of shares requested to be included in such registration statement
by all Persons (other than the Person or Persons initiating such registration
request) who have the contractual right to request that their shares be included
in such registration statement and who have requested their shares be included;
provided, that in the event the Company registers shares of Common Stock in an
underwritten offering pursuant to Section 2.02 of the Registration Rights
Agreement dated as of __________, 2000 between the Company and AT&T Wireless
Services, Inc. ("Wireless"), then all shares to be registered on behalf of
Wireless pursuant to such agreement shall be included in such registration
statement before any shares of Common Stock to be sold by the Company for its
own account or the account of the Holder or any other Person entitled to request
that their shares be included in such registration statement. If the Company
initiated the registration, for its own account or for the account of any other
Person other than the Holder, then the Company may include all of those
securities in such registration statement before any of Holder's requested
shares are included. If another security holder initiated the registration, then
the Company may not include any of its securities in such registration statement
unless all Registrable Securities requested to be included in the registration
statement by the Holder are included in such registration statement. If as a
result of the provisions of this Section 2.02(b) the Holder shall not be
entitled to include all Registrable Securities in a registration that the Holder
has requested to be so included, the Holder may withdraw its request to include
Registrable Securities in such registration statement prior to its
effectiveness.
ARTICLE III
REGISTRATION PROCEDURES
3.01 Company Obligations. Whenever the Company is required under
Article II to register any Registrable Securities, it agrees that it shall also
do the following:
(a) furnish to the Holder, prior to the filing of a
registration statement pertaining to any Shares (each a "Registration
Statement") or any prospectus, amendment
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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 Holder (and its legal counsel), and the
Company will not file any such Registration Statement, any prospectus
or any amendment or supplement thereto (or any such documents
incorporated by reference) to which the Holder shall reasonably object
in writing; and thereafter furnish to the Holder 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 the 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 the Holder shall be subject to the receipt by the
Company of reasonable assurances from the Holder that the 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 reasonable 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 the 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 Statement, to the Nasdaq National Market System or the
Nasdaq SmallCap Market System (or, if the Company is not listed on the
Nasdaq National Market System or the Nasdaq SmallCap Market System, any
other exchange or automated quotation system on which the Company's
Common Stock is then listed) for the listing of the Shares and use its
best effort to obtain the listing of such Shares;
(d) notify the Holder 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 Holder any such supplement, amendment or report
incorporated in the prospectus by reference, including, without
limitation, after any period referred to in Section 2.01;
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(e) make available for inspection by the Holder 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 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 the Holder
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 Holder of such Shares shall agree that such confidential
information obtained by it 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). The Holder
further shall agree that it will, upon learning that disclosure of such
Records from the 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 a
Registration Statement;
(g) obtain an opinion or opinions from its counsel in
customary form and reasonably satisfactory to the Holder and its legal
counsel;
(h) make generally available to the Holder earnings
statements, which need not be audited, satisfying the provisions of
Section 11(a) of the Securities Act no later than 45 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) promptly notify the Holder of the issuance or threatened
issuance of any stop order or other order suspending the effectiveness
of a Registration Statement or preventing or suspending the use of any
preliminary prospectus, prospectus or prospectus supplement, use
reasonable best efforts to prevent the issuance of any such threatened
stop order or other order, and, if any such order is issued, use all
its reasonable
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best efforts to obtain the lifting or withdrawal of such order at the
earliest possible moment and promptly notify the Holder of any such
lifting or withdrawal;
(j) if requested by the Holder, the Company will promptly
incorporate in a prospectus supplement or post-effective amendment to a
Registration Statement such information concerning Holder and Holder's
intended method of distribution as 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 or the amount of Shares being offered by 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;
(k) as promptly as practicable after the filing with the
Commission of any document which is incorporated by reference into a
Registration Statement, notify the Holder of such filing and deliver a
copy of such document to the Holder;
(l) cooperate with the Holder to facilitate the timely
preparation and delivery of certificates, not bearing any restrictive
legends, unless otherwise required by the Holder, representing the
Shares to be sold under a Registration Statement, and enable such
Shares to be in such denominations and registered in such name as such
Holder may request;
(m) cooperate with the Holder, its 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 National
Association of Securities Dealers, Inc. (the "NASD");
(n) 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;
(o) 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
(p) use its reasonable 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.
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3.02 Information from Holder. The Company may require the Holder 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 Holder agrees 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, it will immediately discontinue disposition of Shares
pursuant to a Registration Statement until it receives copies of the
supplemented or amended prospectus contemplated by subsection 3.01(d) hereof,
and, if so directed by the Company, the Holder 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 Commission, NASD, stock exchange, automated quotation system 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 Holder 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 or automated quotation system on which
any shares of the Common Stock are then listed or quoted.
4.02 The Holder shall pay all its internal expenses incurred in
connection with the registration (including, without limitation, all salaries
and expenses of Holder's officers and employees performing legal or accounting
duties).
ARTICLE V
INDEMNIFICATION; CONTRIBUTION
5.01 Indemnification by the Company. The Company agrees to indemnify
and hold harmless the Holder, each of the Holder's officers, directors, partners
and members, and the 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
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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 the Holder expressly for use therein.
5.02 Indemnification by Holder. Holder agrees 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 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 Section 5.01, but only
with respect to information furnished in writing by the 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. 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
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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 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 5.01 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 5.01 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
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or prevent such statement or omission. No person guilty of fraudulent
misrepresentation (within the meaning 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.
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 the Holder 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 Commission. Upon the
request of the Holder, the Company will forthwith deliver to the Holder a
written statement as to whether it has complied with such requirements.
6.02 Granting Other Registration Rights. On and after the date hereof,
except (i) as set forth in that certain Registration Rights Agreement dated as
of _________, 2000 by and between Metrocall, Inc. and HMTF Bridge MC I, LLC, and
(ii) in connection with issuances of equity and/or debt securities by the
Company resulting in proceeds to the Company of at least $25,000,000 (each, a
"Significant Financing"), the Company shall not grant any registration rights in
respect of any shares of capital stock of the Company or other securities of the
Company if such rights would be superior to the registration rights granted to
Purchaser under this Agreement; provided, however, that Purchaser hereby
consents and agrees that the Company may grant in other agreements to other
holders of securities of the Company registration rights which (a) rank ratably
with the registration rights granted hereunder to Purchaser and (b) in the case
of a Significant Financing, are superior to the registration rights granted
hereunder to Purchaser.
6.03 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 Holder.
6.04 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:
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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 the Holder, to its address appearing on the
stock records of the Company.
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.
6.05 Successors and Assigns. Purchaser shall not assign any rights or
benefits under this Agreement except with the prior written consent of the
Company, provided, however, that without the consent of the Company, Purchaser
shall have the right to assign its rights and benefits under this Agreement, in
whole or in part, (i) as collateral security to any unaffiliated third-party
lender pursuant to a pledge of Registrable Securities to such lender in
connection with a bona fide lending transaction, and (ii) to its parent or to
any direct or indirect wholly-owned subsidiary of Purchaser or to any Person
Purchaser is merged with or consolidated into or to any Person whom Purchaser
sells all or substantially all of its assets. The Company shall not assign any
rights, benefits or obligations under this Agreement without the prior written
consent of the Holder; provided, however, that without the consent of Holder,
the Company shall have the right to 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 all or 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 and the Holder.
6.06 Counterparts. This Agreement may be executed in a number of
identical counterparts and it shall not be necessary for the Company and
Purchaser 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.
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6.07 Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
6.08 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.
6.09 Severability. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future 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.
6.10 Entire Agreement. This Agreement and the Stock Purchase Agreement
(including schedules and exhibits thereto) are intended by the Company and
Purchaser as the final expression of 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, on the one hand, and
Purchaser, on the other, with respect to such subject matter.
6.11 Third Party Beneficiaries. Other than Indemnified Parties not a
party hereto, this Agreement is intended for the benefit of the Company,
Purchaser 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.
6.12 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: __________________________________
Name:
Title:
PSINET INC.
By: __________________________________
Name:
Title:
36
EXHIBIT B
VIRTUAL ISP AGREEMENT
(See Attached)
