Exhibit 10.2
BAP Acquisition Corp.
00 Xxxxxx Xxxx Xxxx
Xxxxxxxxxxxxx, Xxx Xxxxxx 00000
November 3, 1998
Xxxx Atlantic Paging, Inc.
(and certain other Xxxx Atlantic companies)
c/x Xxxx Atlantic Corporation
0000 Xxxx Xxxxxx 00xx Xxxxx
Xxxxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx
Re: Consent and Amendment No. 1 to Asset Purchase Agreement
Ladies and Gentlemen:
Reference is made to the Asset Purchase Agreement dated as of July 2, 1998
(the "Agreement") by and among Xxxx Atlantic-Delaware, Inc., Xxxx
Atlantic-Maryland, Inc., Xxxx-Atlantic-New Jersey, Inc., Xxxx
Atlantic-Pennsylvania, Inc., Xxxx Atlantic-Virginia, Inc., Xxxx
Atlantic-Washington, D.C., Inc., Xxxx Atlantic-West Virginia, Inc., Xxxx
Atlantic Paging, Inc. and BAP Acquisition Corp. Capitalized terms used herein
but not defined herein shall have the meanings given to them in the Agreement.
As we have discussed, Buyer intends to enter into a merger agreement (the
"Merger Agreement") with Paging Partners Corporation, a publicly-traded company
also in the paging business ("Paging Partners"), and a subsidiary of Paging
Partners ("Sub"). Pursuant to the Merger Agreement, among other things, (i) Sub
will merge (the "Merger") with and into Buyer, with the result that Buyer will
become a wholly-owned subsidiary of Paging Partners, (ii) Paging Partners will
transfer substantially all of its assets, subject to the related liabilities, to
Buyer, (iii) FINOVA Capital Corporation will hold a lien on the combined assets
of Buyer and Paging Partners and (iv) Motorola, Inc. ("Motorola"), which
presently has secured loans outstanding to Paging Partners, will become a
secured creditor of Buyer and will also have a lien on the combined assets of
Buyer and Paging Partners. It is expected that immediately following the Merger,
the current stockholders of Buyer will own approximately 58.5% of Paging
Partners' issued and outstanding capital stock and that the indebtedness owed to
Motorola will not exceed $1.3 million. We would, of course, be happy to provide
you with any additional details you would like concerning the Merger or the
related transactions.
November 3, 1998
Page 2
We hereby request the consent and approval of the Sellers to the Merger
and the related transactions described above, to the extent the same would
require any consent or approval under, or the amendment of any provision of, the
Agreement, the Promissory Note or any other agreement or document executed or to
be executed in connection therewith. Without limiting the foregoing, we hereby
request that you consent to and approve the following amendments to the
Agreement:
1. The following sentence is hereby added to the end of Section 5.2.5 of
the Agreement:
"Notwithstanding the foregoing, in the event that Buyer merges with Paging
Partners Corporation (or a subsidiary thereof), the security interests of
the holders of the Promissory Notes shall also be subordinate to the lien
of Motorola, Inc. securing a maximum of $1,300,000 in debt to Motorola,
Inc., and the maximum amount of senior bank debt referred to in the
previous sentence shall decrease to $20,500,000."
2. Subsection 6(b)(i) of the Promissory Note is hereby amended to read as
follows:
"create, incur, issue, assume or become liable with respect to,
contingently or otherwise, any indebtedness for borrowed money other than
(X) indebtedness to FINOVA Capital Corporation in an aggregate amount not
at any time exceeding $21,800,000 (which amount shall decrease to
$20,500,000 in the event that Purchaser merges with Paging Partners
Corporation or a subsidiary thereof) (the "Bank Debt") and (Y) in the
event that Purchaser merges with Paging Partners Corporation (or a
subsidiary thereof), indebtedness to Motorola, Inc. in an aggregate amount
not at any time exceeding $1,300,000 (the "Motorola Debt")."
3. Subsection 6(b)(R) of the Promissory Note is hereby amended to read as
follows:
"Liens to secure the Bank Debt or the Motorola Debt"
As you know, Paging Partners is a public company, and will be preparing a
proxy statement (the "Proxy") to be submitted to its shareholders in connection
with the Merger. It is anticipated that the Proxy, in addition to disclosing the
Merger, will describe the material terms of the Agreement and the BAPCO Paging
Business and financial information relating thereto. Therefore, we are
additionally requesting your consent and approval with respect to such
disclosure, provided, however, that any such disclosure will be subject to the
approval of BAPCO, which approval will not be unreasonably withheld. In the
event BAPCO declines to give its consent with respect to all or a portion of
such disclosure, it may still be disclosed if it
November 3, 1998
Page 3
is determined in good faith by Paging Partners' counsel that such disclosure is
necessary as a result of Paging Partners being a public company and subject to
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated by the SEC thereunder.
In addition to disclosing the material terms of the Agreement as provided
above, the Proxy will also contain a statement that the Agreement and the
Exhibits shall be available for review by the shareholders of Paging Partners
upon their request.
Although the Agreement will not be attached as an Exhibit to the Proxy, in
the event the SEC or a securities exchange on which Paging Partners securities
are listed requires that the Agreement be submitted as an Exhibit or otherwise
disclosed, the Agreement will be so filed or disclosed, and you hereby consent
and approve to such filing or disclosure. For purposes of the foregoing
sentence, a request in a comment letter from the SEC shall be deemed a
"requirement."
Buyer represents and warrants to Sellers that it has provided them with
true, complete, and correct copies of the Merger Agreement and all Exhibits and
Schedules thereto. To the same extent and subject to any limitations contained
in the Merger Agreement, each of the representations and warranties of Paging
Partners contained in Article II of the Merger Agreement is herein made by
Buyer, as if Buyer were making each such representation and warranty; provided,
however, that each representation is only made to the best of Buyer's knowledge,
after reasonable inquiry. In addition, Buyer represents that it is not aware,
after reasonable inquiry, of any litigation pending or threatened against Paging
Partners Corporation or any subsidiary thereof, excluding any such litigation
which would not reasonably be expected to have a material adverse effect on
Paging Partners Corporation or such subsidiary. Buyer agrees that it shall
promptly inform Sellers if it discovers that any of the representations or
warranties made in this paragraph were either materially incorrect when made or
have become materially incorrect. The representations and warranties referred to
in Sections 5.2.1 and 7.3 of the Agreement shall be deemed to include the
representations and warranties of Buyer contained in this Paragraph.
Nothing in the Agreement or this consent and amendment shall confer any
rights, remedies or other benefits to Paging Partners or its shareholders;
provided, however, that upon the effectiveness of the Merger, the surviving
corporation will be entitled to Buyer's rights, remedies and other benefits
under the Agreement and this consent and amendment.
Notwithstanding anything in the Agreement or this consent and amendment to
the contrary, in no event shall any Party be liable for indirect, special,
consequential or punitive damages to another Party arising out of a breach of
the Agreement or this consent and amendment, even if advised at the time of
breach of the possibility of such damages.
November 3, 1998
Page 4
Buyer agrees to indemnify and hold harmless the Seller Indemnified Parties
from any Losses incurred by the Seller Indemnified Parties as a consequence of
any litigation commenced by Paging Partners Corporation or its shareholders
prior to the consummation of the Merger relating to the Agreement or this
consent and amendment.
Attached hereto is a draft press release which Paging Partners plans to
issue with respect to the Merger.
We agree to promptly prepare and execute any additional amendments to the
Agreement, the Promissory Note or any such agreement or document reasonably
necessary to more fully reflect the above. To the extent this letter does not
satisfy any formal requirement for a consent or amendment under the Agreement,
such formal requirement is hereby waived.
We understand that senior lender's counsel is preparing and filing UCC-1
financing statements and other security documents necessary to perfect the
security interests of the holders of the Promissory Notes and we agree to pay
such counsel's reasonable fees in connection therewith (including any fees of
any filing service hired by such counsel).
Please acknowledge your consent and approval to the above by signing in
the appropriate space provided below.
Sincerely,
BAP ACQUISITION CORP.
By: /s/ Xxxx X. Xxxxxxxx
---------------------------
Xxxx X. Xxxxxxxx, President
Consented and Approved by Sellers:
XXXX ATLANTIC PAGING, INC.
By: /s/ Xxxxxxxx X. Xxxxx
---------------------------
XXXX ATLANTIC-DELAWARE, INC.
By: /s/ Xxxxxxxx X. Xxxxx
---------------------------
XXXX ATLANTIC-MARYLAND, INC.
By: /s/ Xxxxxxxx X. Xxxxx
---------------------------
XXXX ATLANTIC-NEW JERSEY, INC.
By: /s/ Xxxxxxxx X. Xxxxx
---------------------------
XXXX ATLANTIC-PENNSYLVANIA, INC.
By: /s/ Xxxxxxxx X. Xxxxx
---------------------------
XXXX ATLANTIC-VIRGINIA, INC.
By: /s/ Xxxxxxxx X. Xxxxx
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XXXX ATLANTIC-WASHINGTON, D.C., INC.
By: /s/ Xxxxxxxx X. Xxxxx
---------------------------
XXXX ATLANTIC-WEST VIRGINIA, INC.
By: /s/ Xxxxxxxx X. Xxxxx
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