Exhibit 2.1
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
WIZARDS-PATRIOTS HOLDINGS, INC.
WIZARDS ACQUIRING SUB, INC.
METROCALL HOLDINGS, INC.,
PATRIOTS ACQUIRING SUB, INC.
AND
ARCH WIRELESS, INC.
DATED AS OF MARCH 29, 2004
TABLE OF CONTENTS
Page
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ARTICLE I THE MERGER............................................................................ 2
Section 1.1 The Merger................................................................ 2
Section 1.2 Effective Time of the Merger.............................................. 2
Section 1.3 Certificates of Incorporation............................................. 3
Section 1.4 Bylaws.................................................................... 3
Section 1.5 Officers.................................................................. 3
Section 1.6 Directors................................................................. 3
Section 1.7 Effect of Merger.......................................................... 4
ARTICLE II CONVERSION AND EXCHANGE OF SECURITIES................................................ 4
Section 2.1 Effect on Capital Stock................................................... 4
Section 2.2 Exchange Fund............................................................. 10
Section 2.3 Elections................................................................. 10
Section 2.4 Allocation of Cash and Parent Common Stock................................ 11
Section 2.5 Exchange Procedures....................................................... 12
Section 2.6 Right to Receive Merger Consideration..................................... 13
Section 2.7 Stock Transfer Books...................................................... 13
Section 2.8 Release of Exchange Fund.................................................. 14
Section 2.9 Distributions with Respect to Unexchanged Shares.......................... 14
Section 2.10 No Fractional Securities.................................................. 14
Section 2.11 Adjustments To Exchange Ratios and Cash Election Price.................... 14
Section 2.12 Closing................................................................... 15
Section 2.13 Lost, Stolen, Destroyed Certificates...................................... 15
Section 2.14 Taking of Necessary Action; Further Action................................ 15
Section 2.15 Required Withholding...................................................... 16
ARTICLE III REPRESENTATIONS AND WARRANTIES OF ARCH.............................................. 16
Section 3.1 Organization and Qualification............................................ 16
Section 3.2 Capitalization............................................................ 17
Section 3.3 Subsidiaries.............................................................. 18
Section 3.4 Authority; Non-Contravention; Approvals................................... 19
Section 3.5 Reports and Financial Statements.......................................... 20
Section 3.6 Employee Benefit Plans; Labor Matters; No Parachute Payments.............. 21
Section 3.7 Certain Tax Matters....................................................... 25
Section 3.8 Contracts; Debt Instruments............................................... 25
Section 3.9 Litigation................................................................ 26
Section 3.10 Insurance................................................................. 26
Section 3.11 Intellectual Property..................................................... 26
Section 3.12 Taxes..................................................................... 27
Section 3.13 Interested Party Transactions............................................. 27
Section 3.14 Absence of Undisclosed Liabilities........................................ 27
Section 3.15 Absence of Certain Changes................................................ 27
Section 3.16 Registration Statement and Proxy Statement................................ 28
Section 3.17 Reorganization............................................................ 28
Section 3.18 Board Approval............................................................ 28
Section 3.19 Brokers and Finders....................................................... 28
Section 3.20 Opinion of Financial Advisor.............................................. 29
Section 3.21 Hazardous Substances and Hazardous Waste.................................. 29
Section 3.22 Compliance with Laws...................................................... 31
Section 3.23 Permits and Licenses...................................................... 31
Section 3.24 Real Property............................................................. 32
Section 3.25 State Takeover Statutes................................................... 32
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF METROCALL.......................................... 33
Section 4.1 Organization and Qualification............................................ 33
Section 4.2 Capitalization............................................................ 34
Section 4.3 Subsidiaries.............................................................. 35
Section 4.4 Authority; Non-Contravention; Approvals................................... 35
Section 4.5 Reports and Financial Statements.......................................... 37
Section 4.6 Employee Benefit Plans; Labor Matters; No Parachute Payments.............. 38
Section 4.7 Certain Tax Matters....................................................... 42
Section 4.8 Contracts; Debt Instruments............................................... 42
Section 4.9 Litigation................................................................ 42
Section 4.10 Insurance................................................................. 43
Section 4.11 Intellectual Property..................................................... 43
Section 4.12 Taxes..................................................................... 43
Section 4.13 Interested Party Transactions............................................. 44
Section 4.14 Absence of Undisclosed Liabilities........................................ 44
Section 4.15 Absence of Certain Changes................................................ 44
Section 4.16 Registration Statement and Proxy Statement................................ 44
Section 4.17 Reorganization............................................................ 45
Section 4.18 Board Approval............................................................ 45
Section 4.19 Brokers and Finders....................................................... 45
Section 4.20 Opinion of Financial Advisor.............................................. 45
Section 4.21 Hazardous Substances and Hazardous Waste.................................. 45
Section 4.22 Compliance with Laws...................................................... 46
Section 4.23 Permits and Licenses...................................................... 46
Section 4.24 Real Property............................................................. 47
Section 4.25 State Takeover Statutes................................................... 48
ARTICLE V CONDUCT OF BUSINESS PENDING THE MERGER................................................ 48
Section 5.1 Conduct of Business By Metrocall and Arch Pending the Merger.............. 48
Section 5.2 Acquisition Transactions.................................................. 51
ARTICLE VI ADDITIONAL AGREEMENTS................................................................ 52
Section 6.1 Appropriate Actions; Consents; Filings.................................... 52
Section 6.2 Access To Information..................................................... 55
Section 6.3 Registration Statement and Proxy Statement................................ 56
Section 6.4 Stockholders' Approvals................................................... 58
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Section 6.5 Compliance with The Securities Act........................................ 58
Section 6.6 Expenses.................................................................. 58
Section 6.7 Public Statements......................................................... 59
Section 6.8 Notification of Certain Matters........................................... 59
Section 6.9 Directors' and Officers' Indemnification.................................. 59
Section 6.10 Listing................................................................... 61
Section 6.11 Employee Matters.......................................................... 61
Section 6.12 Tax-Free Transaction...................................................... 63
Section 6.13 Exemption From Liability Under Section 16(b).............................. 63
Section 6.14 Directors of Parent and Surviving Corporations............................ 64
Section 6.15 Redemption of Notes....................................................... 65
Section 6.16 Redemption of Preferred Stock............................................. 65
Section 6.17 Control of Other Party's Business......................................... 65
ARTICLE VII CONDITIONS.......................................................................... 65
Section 7.1 Conditions to Each Party's Obligation to Effect the Merger................ 65
Section 7.2 Additional Conditions to Obligation of Arch to Effect the Merger.......... 66
Section 7.3 Additional Conditions to Obligation of Metrocall to Effect the Merger..... 67
ARTICLE VIII TERMINATION........................................................................ 67
Section 8.1 Termination............................................................... 67
Section 8.2 Effect of Termination..................................................... 69
Section 8.3 Termination Fee........................................................... 70
ARTICLE IX GENERAL PROVISIONS................................................................... 71
Section 9.1 Non-Survival of Representations and Warranties............................ 71
Section 9.2 Amendments and Waivers; Delays and Omissions.............................. 71
Section 9.3 Notices................................................................... 72
Section 9.4 Binding Agreement; No Assignment.......................................... 73
Section 9.5 Counterparts.............................................................. 73
Section 9.6 Descriptive Headings, Etc. ............................................... 73
Section 9.7 Severability.............................................................. 73
Section 9.8 Governing Law............................................................. 74
Section 9.9 Entire Agreement.......................................................... 74
Section 9.10 Consent to Jurisdiction................................................... 74
Section 9.11 Further Assurances........................................................ 74
Section 9.12 Construction.............................................................. 75
Section 9.13 Waiver of Jury Trial...................................................... 75
Section 9.14 Specific Performance...................................................... 75
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Index of Defined Terms
affiliate.......................................... 58
Affiliate Agreement................................ 58
Agreement.......................................... 1
Ancillary Agreements............................... 19
Antitrust Laws..................................... 20
Appraisal Shares................................... 5
Arch............................................... 1
Arch 10-K.......................................... 21
Arch Acquiring Sub................................. 1
Arch Benefit Plans................................. 21
Arch Board......................................... 1
Arch Bylaws........................................ 16
Arch Certificate of Incorporation.................. 16
Arch Common Stock.................................. 7
Arch Disclosure Schedule........................... 16
Arch Exchange Ratio................................ 7
Arch FCC Licenses.................................. 31
Arch Financial Advisor............................. 28
Arch Financial Statements.......................... 21
Arch Holdings...................................... 65
Arch IP............................................ 26
Arch Leased Real Property.......................... 32
Arch Leases........................................ 32
Arch Material Adverse Effect....................... 17
Arch Material Contracts............................ 25
Arch Merger........................................ 1
Arch Merger Consideration.......................... 7
Arch Owned Real Property........................... 32
Arch Permits....................................... 31
Arch Plan of Reorganization........................ 17
Arch Properties.................................... 29
Arch Representatives............................... 55
Arch Required Statutory Approvals.................. 20
Arch SEC Reports................................... 21
Arch Stock Option.................................. 8
Arch Stock Plan.................................... 17
Arch Stock Right................................... 8
Arch Stockholders' Approval........................ 20
Arch Unclassified Common Stock..................... 17
CAA................................................ 30
Cash Election Price................................ 4
CERCLA............................................. 30
Certificates....................................... 10
Closing............................................ 15
Closing Date....................................... 15
Code............................................... 1
Communications Act................................. 20
Companies.......................................... 1
Company............................................ 1
Competing Transaction.............................. 52
CWA................................................ 30
Deemed Election Proration Factor................... 12
DGCL............................................... 2
Disclosure Schedules............................... 33
Effective Time..................................... 2
Electing Shares.................................... 4
Election Date...................................... 10
Election Number.................................... 11
Environmental Claims............................... 30
Environmental Laws................................. 30
Environmental Liabilities.......................... 30
ERISA.............................................. 21
ERISA Affiliate.................................... 22
Excess Proration Factor............................ 12
Exchange Act....................................... 20
Exchange Agent..................................... 10
Exchange Fund...................................... 10
Exchange Ratios.................................... 7
Existing Credit Facilities......................... 49
Expenses........................................... 59
FCC................................................ 20
FCC Regulations.................................... 20
Financing.......................................... 55
Form of Election................................... 10
GAAP............................................... 21
Hazardous Material................................. 30
HSR Act............................................ 20
Insiders........................................... 63
Interim Period..................................... 48
IRS................................................ 21
Joint Proxy Statement/Prospectus................... 28
Merger............................................. 1
Merger Consideration............................... 7
Merger Filing...................................... 2
Metrocall.......................................... 1
Metrocall 10-K..................................... 37
Metrocall Acquiring Sub............................ 1
Metrocall Benefit Plans............................ 38
Metrocall Board.................................... 1
Metrocall Bylaws................................... 33
Metrocall Certificate of Incorporation............. 33
Metrocall Common Stock............................. 4
Metrocall Disclosure Schedule...................... 33
Metrocall Exchange Ratio........................... 4
Metrocall FCC Licenses............................. 47
Metrocall Financial Advisor........................ 45
Metrocall Financial Statements..................... 37
Metrocall Fully Diluted Shares..................... 34
Metrocall IP....................................... 43
Metrocall Leased Real Property..................... 47
Metrocall Leases................................... 47
Metrocall Material Adverse Effect.................. 33
Metrocall Material Contracts....................... 42
Metrocall Merger................................... 1
Metrocall Merger Consideration..................... 4
Metrocall Option Plan.............................. 34
Metrocall Owned Real Property...................... 47
Metrocall Permits.................................. 46
Metrocall Plan of Reorganization................... 34
Metrocall Preferred Stock.......................... 34
Metrocall Properties............................... 45
Metrocall Representatives.......................... 55
Metrocall Required Statutory Approvals............. 37
Metrocall SEC Reports.............................. 37
Metrocall Stock Option............................. 5
Metrocall Stock Right.............................. 7
Metrocall Stockholders' Approval................... 37
Metrocall Stockholders Meeting..................... 10
Metrocall Warrant.................................. 6
Multiemployer Plan................................. 22
Multiple Employer Plan............................. 22
Nasdaq............................................. 20
Nasdaq SmallCap.................................... 36
Nondisclosure Agreement............................ 56
Non-Electing Shares................................ 12
Order.............................................. 53
OSHA............................................... 30
Other Agreements................................... 74
Parent............................................. 1
Parent Board....................................... 63
Parent Bylaws...................................... 2
Parent Certificate of Incorporation................ 2
Parent Common Stock................................ 4
Parent Fully Diluted Shares........................ 14
Person............................................. 19
RCRA............................................... 30
Registration Statement............................. 28
Release............................................ 30
Remedial Action.................................... 31
Retained Employee.................................. 61
Rule 145........................................... 58
SEC................................................ 20
Section 16 Information............................. 63
Section 262........................................ 5
Securities Act..................................... 20
Subsidiary......................................... 19
Surviving Arch Corporation......................... 2
Surviving Metrocall Corporation.................... 2
Telecommunications Laws............................ 20
Terminating Arch Breach............................ 69
Terminating Metrocall Breach....................... 68
Transactions....................................... 1
Unsolicited Bid.................................... 51
WARN Act........................................... 24
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of March 29, 2004 (this
"Agreement"), by and among Wizards-Patriots Holdings, Inc., a Delaware
corporation ("Parent"), Wizards Acquiring Sub, Inc., a Delaware corporation and
a wholly-owned subsidiary of Parent ("Metrocall Acquiring Sub"), Metrocall
Holdings, Inc., a Delaware corporation ("Metrocall"), Patriots Acquiring Sub,
Inc., a Delaware corporation and a wholly-owned subsidiary of Parent ("Arch
Acquiring Sub"), and Arch Wireless, Inc., a Delaware corporation ("Arch").
Metrocall and Arch are sometimes together referred to collectively as the
"Companies" and, individually, as a "Company."
WITNESSETH:
WHEREAS, the respective Boards of Directors of Metrocall (the
"Metrocall Board") and Arch (the "Arch Board") have approved this Agreement and
have deemed it in the best interests of their respective stockholders that
Metrocall and Arch engage in a business combination under the terms set forth
herein;
WHEREAS, Metrocall owns all of the outstanding capital stock of Parent
and has caused Parent to form Metrocall Acquiring Sub and Arch Acquiring Sub;
WHEREAS, the respective Boards of Directors of Parent, Metrocall
Acquiring Sub and Metrocall have approved the merger of Metrocall Acquiring Sub
with and into Metrocall (the "Metrocall Merger") and deem it advisable and in
the best interests of their respective stockholders that the Metrocall Merger be
consummated, and the respective Boards of Directors of Parent, Arch Acquiring
Sub and Arch have approved the merger of Arch Acquiring Sub with and into Arch
(the "Arch Merger", and together with the Metrocall Merger, the "Merger") and
have deemed it advisable and in the best interests of their respective
stockholders that the Arch Merger be consummated, in each case upon the terms
and subject to the conditions set forth herein;
WHEREAS, for federal income tax purposes, the parties intend that the
Merger shall be treated as a transfer by the holders of Metrocall Common Stock
(as defined in Section 2.1(a)) and Arch Common Stock (as defined in Section
2.1(c)) of all such shares of such stock (other than Appraisal Shares (as
defined in Section 2.1(a)) and shares of such stock held by either Metrocall or
Arch) to Parent in exchange for all the issued and outstanding shares of Parent
Common Stock (as defined in Section 2.1(a)) and, in the case of certain holders
of Metrocall Common Stock, cash, all as described in Section 351 of the Internal
Revenue Code of 1986, as amended (the "Code"), and the regulations promulgated
thereunder; and
WHEREAS, the parties hereto desire to make certain representations,
warranties, covenants and agreements in connection with the transactions
contemplated by this Agreement (the "Transactions").
NOW, THEREFORE, in consideration of the mutual representations,
warranties and covenants contained herein, the parties hereto agree as follows:
ARTICLE I
THE MERGER
Section 1.1 The Merger. (a) Charter and Bylaws of Parent; Conduct. The
certificate of incorporation and bylaws of Parent (respectively, the "Parent
Certificate of Incorporation" and "Parent Bylaws"), and the initial
organizational minutes of the board of directors of Parent, shall be in the form
of Exhibit X-0, Xxxxxxx X-0 and Exhibit A-3 to this Agreement, respectively.
From and after the Effective Time, each of the Parent Certificate of
Incorporation and the Parent Bylaws may be amended in accordance with their
respective terms and as provided in the DGCL, except that references to the name
of Parent shall be amended to reflect a change in such name as determined by the
Parent Board. From the date of this Agreement until the Effective Time,
Metrocall shall (a) consult with Arch prior to causing or permitting, and shall
not cause or permit, Parent, Metrocall Acquiring Sub or Arch Acquiring Sub to
take any action inconsistent with the provisions of this Agreement without the
written consent of Arch, (b) take all action necessary to cause Parent,
Metrocall Acquiring Sub and Arch Acquiring Sub to perform their respective
obligations under this Agreement, and (c) take all action necessary to ensure
that, prior to the Effective Time, none of Parent, Metrocall Acquiring Sub or
Arch Acquiring Sub conducts any business or makes any investment other than as
contemplated by this Agreement or as may otherwise be agreed to by Arch in
writing.
(b) The Metrocall Merger. Upon the terms and subject to the
conditions of this Agreement, at the Effective Time (as defined in Section 1.2)
and in accordance with the Delaware General Corporation Law (the "DGCL"),
Metrocall Acquiring Sub shall be merged with and into Metrocall and the separate
existence of Metrocall Acquiring Sub shall thereupon cease. Metrocall shall be
the surviving corporation in such merger and a wholly-owned subsidiary of Parent
and, after the Effective Time, is hereinafter sometimes referred to as the
"Surviving Metrocall Corporation."
(c) The Arch Merger. Upon the terms and subject to the conditions of
this Agreement, at the Effective Time and in accordance with the DGCL, Arch
Acquiring Sub shall be merged with and into Arch and the separate existence of
Arch Acquiring Sub shall thereupon cease. Arch shall be the surviving
corporation in such merger and a wholly-owned subsidiary of Parent and, after
the Effective Time, is hereinafter sometimes referred to as the "Surviving Arch
Corporation" and, together with the Surviving Metrocall Corporation, the
"Surviving Corporations."
Section 1.2 Effective Time of the Merger.
The Merger shall become effective at such time and date (the "Effective
Time") as shall be stated in appropriate certificates of merger with respect to
the Metrocall Merger and the Arch Merger (which time and date shall be identical
for each merger), respectively, in form mutually acceptable to Metrocall and
Arch and executed in accordance with the relevant provisions of the DGCL, to be
filed with the Secretary of State of the State of Delaware in accordance with
the DGCL (the "Merger Filing"), concurrently with the closing of the
Transactions in accordance with Section 2.12.
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Section 1.3 Certificates of Incorporation. (a) The certificate of
incorporation of the Surviving Metrocall Corporation shall be amended as of the
Effective Time such that it is identical to the certificate of incorporation of
Metrocall Acquiring Sub as in effect immediately prior to the Effective Time,
and thereafter may be amended in accordance with its terms and as provided in
the DGCL, except that references to the name of the Surviving Metrocall
Corporation shall be amended to reflect a change in such name as determined by
the Parent Board.
(b) The certificate of incorporation of the Surviving Arch
Corporation shall be amended as of the Effective Time such that it is identical
to the certificate of incorporation of Arch Acquiring Sub as in effect
immediately prior to the Effective Time, and thereafter may be amended in
accordance with its terms and as provided in the DGCL, except that references to
the name of the Surviving Arch Corporation shall be amended to reflect a change
in such name as determined by the Parent Board.
Section 1.4 Bylaws. (a) The bylaws of the Surviving Metrocall
Corporation shall be amended as of the Effective Time such that they are
identical to the bylaws of Metrocall Acquiring Sub as in effect immediately
prior to the Effective Time, and (subject to Section 6.9 hereof) thereafter may
be amended in accordance with their terms and as provided by the certificate of
incorporation of the Surviving Metrocall Corporation and the DGCL, except that
references to the name of the Surviving Metrocall Corporation shall be amended
to reflect a change in such name as determined by the Parent Board.
(b) The bylaws of the Surviving Arch Corporation shall be amended as
of the Effective Time such that they are identical to the bylaws of Arch
Acquiring Sub as in effect immediately prior to the Effective Time, and (subject
to Section 6.9 hereof) thereafter may be amended in accordance with their terms
and as provided by the certificate of incorporation of the Surviving Arch
Corporation and the DGCL, except that references to the name of the Surviving
Arch Corporation shall be amended to reflect a change in such name as determined
by the Parent Board.
Section 1.5 Officers. (a) The officers of the Surviving Metrocall
Corporation after the Effective Time shall be the officers of Metrocall
Acquiring Sub in office immediately prior to the Effective Time, until their
successors are elected or appointed and qualified or until their resignation or
removal.
(b) The officers of the Surviving Arch Corporation after the
Effective Time shall be the officers of Arch Acquiring Sub in office immediately
prior to the Effective Time, until their successors are elected or appointed and
qualified or until their resignation or removal.
Section 1.6. Directors. (a) The directors of the Surviving Metrocall
Corporation after the Effective Time shall be the directors of Acquiring Sub in
office immediately prior to the Effective Time, until their successors are
elected or appointed and qualified or until their resignation or removal.
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(b) The directors of the Surviving Arch Corporation after the
Effective Time shall be the directors of Arch Acquiring Sub in office
immediately prior to the Effective Time, until their successors are elected or
appointed and qualified or until their resignation or removal.
Section 1.7 Effect of Merger. At the Effective Time, the effect of the
Merger shall be as provided in this Agreement and the applicable provisions of
Delaware law. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time:
(a) all of the property, rights, privileges, powers and franchises
of Metrocall and Metrocall Acquiring Sub shall vest in the Surviving Metrocall
Corporation, and all debts, liabilities and duties of Metrocall and Metrocall
Acquiring Sub shall become the debts, liabilities and duties of the Surviving
Metrocall Corporation; and
(b) all of the property, rights, privileges, powers and franchises
of Arch and Arch Acquiring Sub shall vest in the Surviving Arch Corporation, and
all debts, liabilities and duties of Arch and Arch Acquiring Sub shall become
the debts, liabilities and duties of the Surviving Arch Corporation.
ARTICLE II
CONVERSION AND EXCHANGE OF SECURITIES
Section 2.1 Effect on Capital Stock. (a) Metrocall Common Stock. At the
Effective Time, by virtue of the Metrocall Merger and without any action on the
part of any holder of capital stock of Metrocall or any holder of capital stock
of Metrocall Acquiring Sub:
(i) (A) Subject to Sections 2.1(a)(ii), 2.1(a)(v), 2.3, 2.4 and
2.10, each share of common stock, par value $0.01 per share, of Metrocall
("Metrocall Common Stock") issued and outstanding immediately prior to the
Effective Time with respect to which an election has been effectively made and
not revoked or lost pursuant to Section 2.3 or deemed made pursuant to Section
2.4 (collectively, the "Electing Shares") shall be converted into the right to
receive an amount equal to $75.00 (the "Cash Election Price"), in cash, without
interest. (B) Subject to Sections 2.1(a)(ii), 2.1(a)(v), 2.3, 2.4 and 2.10, each
share of Metrocall Common Stock (other than Electing Shares) issued and
outstanding immediately prior to the Effective Time shall be converted into the
right to receive 1.876 shares (the "Metrocall Exchange Ratio") of common stock,
par value $0.0001 per share, of Parent ("Parent Common Stock"). The shares of
Parent Common Stock to be issued and cash payable upon the conversion of shares
of Metrocall Common Stock pursuant to this Section 2.1(a)(i) and cash in lieu of
fractional shares of Parent Common Stock as contemplated by Section 2.10 are
referred to collectively as "Metrocall Merger Consideration". All shares of
Parent Common Stock issued pursuant to this Section 2.1(a)(i) shall be duly
authorized, validly issued and free of preemptive rights, with no personal
liability attaching to the ownership of such shares. All shares of Metrocall
Common Stock converted into shares of Parent Common Stock or cash pursuant to
this Section 2.1(a)(i) shall no longer be outstanding and shall automatically be
canceled and retired and shall cease to exist, and each holder of a certificate
formerly representing any such shares shall cease to have any rights, except the
right to receive cash, Parent Common Stock to be issued and cash in lieu of
fractional shares of Parent Common Stock as contemplated by Section 2.10, in
consideration for
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such shares upon the surrender of such certificate in accordance with this
Article II, without interest.
(ii) All shares of Metrocall Common Stock that are owned by
Metrocall as treasury stock and any shares of Metrocall Common Stock owned by
Arch or any Subsidiary of Arch immediately prior to the Effective Time, other
than shares under any existing employee benefit plan which are held by either
Company as trustee, shall be canceled and retired and shall cease to exist and
no share capital of Parent or other consideration shall be delivered in exchange
therefore.
(iii) Each share of common stock, par value $0.01 per share, of
Metrocall Acquiring Sub issued and outstanding immediately before the Effective
Time shall be converted into one share of common stock of the Surviving
Metrocall Corporation.
(iv) If any shares of Metrocall Common Stock outstanding
immediately prior to the Effective Time are unvested or are subject to a
repurchase option, risk of forfeiture or other condition under any applicable
restricted stock purchase agreement or other agreement with Metrocall, then any
shares of Parent Common Stock issued in exchange for such shares of Metrocall
Common Stock will also be unvested and subject to the same repurchase option,
risk of forfeiture or other condition, and the certificates representing such
shares of Parent Common Stock may accordingly be marked with appropriate
legends, except that this Section 2.1(a)(iv) shall not apply to any such shares
that, pursuant to the terms of the applicable agreement, certificate or other
governing instrument, would otherwise be vested or freed of such repurchase
option, risk of forfeiture or other condition as a result of the Transactions.
Metrocall shall take all action that may be necessary to ensure that, from and
after the Effective Time, Parent is entitled to exercise any such repurchase
option or other right set forth in any such restricted stock purchase agreement
or other agreement.
(v) Notwithstanding anything in this Agreement to the contrary,
shares of Metrocall Common Stock that are outstanding immediately prior to the
Effective Time and that are held by any Person who is entitled to demand and
properly demands appraisal of such shares pursuant to, and who complies in all
respects with, Section 262 ("Section 262") of the DGCL ("Appraisal Shares")
shall not be converted into Metrocall Merger Consideration as provided in
Section 2.1(a)(i), but rather the holders of Appraisal Shares shall be entitled
to payment of the fair value of such Appraisal Shares in accordance with Section
262; provided, however, that if any such holder shall fail to perfect or
otherwise shall waive, withdraw or lose the right to appraisal under Section
262, then the right of such holder to be paid the fair value of such holder's
Appraisal Shares shall cease and such Appraisal Shares shall be deemed to no
longer be Appraisal Shares and, instead, shall be deemed to be Non-Electing
Shares, to have been converted as of the Effective Time into, and to have become
exchangeable solely for the right to receive, Metrocall Merger Consideration as
provided in Section 2.1(a)(i).
(b) Metrocall Stock Options, Warrants and Unissued Shares Under the
Metrocall Plan of Reorganization. (i) Metrocall Stock Options. At the Effective
Time, all options to purchase shares of Metrocall Common Stock (each, a
"Metrocall Stock Option") which are then outstanding and unexercised shall cease
to represent a right to acquire shares of Metrocall Common Stock and shall be
converted automatically into an option to acquire, on the
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same terms and conditions as were otherwise applicable under the Metrocall Stock
Option, shares of Parent Common Stock as set forth below. From and after the
Effective Time (i) the number of shares of Parent Common Stock purchasable upon
exercise of each outstanding converted Metrocall Stock Option shall be equal to
the product of (x) the number of shares of Metrocall Common Stock that were
purchasable upon exercise of such converted Metrocall Stock Option immediately
prior to the Effective Time and (y) the Metrocall Exchange Ratio, rounded up to
the nearest whole share of Parent Common Stock, and (ii) the exercise price per
share of Parent Common Stock under each converted Metrocall Stock Option shall
be obtained by dividing (x) the exercise price per share of Metrocall Common
Stock of such converted Metrocall Stock Option immediately prior to the
Effective Time by (y) the Metrocall Exchange Ratio, rounded down to the nearest
cent; provided, however, that in the case of any Metrocall Stock Option to which
Section 421 of the Code, applies by reason of its qualification under Section
422 of the Code, the exercise price per share, the number of shares subject to
such Metrocall Stock Option and the terms and conditions of exercise of such
Metrocall Stock Option shall be determined in a manner consistent with the
requirements of Section 424(a) of the Code. Unless otherwise elected by
Metrocall prior to the Effective Time, Parent shall assume Metrocall's
obligations with respect to each outstanding Metrocall Stock Option in such
manner that Parent (i) is a corporation "assuming a stock option in a
transaction to which Section 424(a) applies" within the meaning of Section 424
of the Code or (ii) to the extent that Section 424 of the Code does not apply to
such Metrocall Stock Option, would be such a corporation were Section 424 of the
Code applicable to such Metrocall Stock Option; and, if not so otherwise
elected, after the Effective Time, all references to Metrocall in the Metrocall
Option Plan and the applicable Metrocall Stock Option agreements shall be deemed
to refer to Parent, which shall have assumed the Metrocall Option Plan as of the
Effective Time by virtue of this Agreement and without any further action on the
part of Parent or Metrocall. Each Metrocall Stock Option so assumed by Parent
under this Agreement shall continue to have, and be subject to, the same terms
and conditions set forth in the Metrocall Option Plan and such Metrocall Stock
Option as in effect immediately prior to the Effective Time. Metrocall and Arch
shall use, and shall cause Parent to use, all reasonable efforts to ensure that
Metrocall Stock Options intended to qualify as incentive stock options under
Section 422 of the Code prior to the Effective Time continue to so qualify after
the Effective Time. Prior to the Effective Time, the Metrocall Board shall take,
or shall cause its committees to take, all action necessary to effectuate the
foregoing.
(i) Metrocall Warrants. At the Effective Time, all warrants to
purchase shares of Metrocall Common Stock (each, a "Metrocall Warrant") which
are then outstanding and unexercised shall no longer be exercisable for
Metrocall Common Stock and shall thereafter be exercisable for Parent Common
Stock in accordance with the terms and conditions of the applicable Metrocall
Warrants. From and after the Effective Time (i) the number of shares of Parent
Common Stock purchasable upon exercise of each outstanding converted Metrocall
Warrant shall be equal to the product of (x) the number of shares of Metrocall
Common Stock that were purchasable upon exercise of such converted Metrocall
Warrant immediately prior to the Effective Time and (y) the Metrocall Exchange
Ratio, rounded up to the nearest whole share of Parent Common Stock, and (ii)
the exercise price per share of Parent Common Stock under each converted
Metrocall Warrant shall be obtained by dividing (x) the exercise price per share
of Metrocall Common Stock of such converted Metrocall Warrant immediately prior
to the Effective Time by (y) the Metrocall Exchange Ratio, rounded down to the
nearest cent.
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(ii) Unissued Shares Under the Metrocall Plan of Reorganization.
At the Effective Time, all rights, contingent or otherwise, to receive shares of
Metrocall Common Stock, which are not yet issued and outstanding, pursuant to a
distribution under the Metrocall Plan of Reorganization (each, a "Metrocall
Stock Right"), shall no longer be rights with respect to Metrocall Common Stock
and shall thereafter be rights to receive a number of shares of Parent Common
Stock equal to the number of shares of Metrocall Common Stock such Metrocall
Stock Right would be entitled to receive multiplied by the Metrocall Exchange
Ratio, rounded up to the nearest whole share of Parent Common Stock, subject to
the same terms and conditions of the Metrocall Plan of Reorganization as were
otherwise applicable to the Metrocall Stock Rights. Prior to the Effective Time,
the Metrocall Board shall take, or shall cause its committees to take, all
action necessary to effectuate the foregoing.
(c) Arch Common Stock. At the Effective Time, by virtue of the Arch
Merger and without any action on the part of any holder of capital stock of Arch
or any holder of capital stock of Arch Acquiring Sub:
(i) Subject to Sections 2.1(c)(ii) and 2.10, each share of
"Class A" common stock, par value $0.0001 per share, of Arch ("Arch Common
Stock") shall be converted into the right to receive one share (the "Arch
Exchange Ratio" and, together with the Metrocall Exchange Ratio, the "Exchange
Ratios") of Parent Common Stock. The shares of Parent Common Stock to be issued
pursuant to this Section 2.1(c)(i) are referred to collectively as "Arch Merger
Consideration" and, together with the Metrocall Merger Consideration, the
"Merger Consideration." All shares of Parent Common Stock issued pursuant to
this Section 2.1(c)(i) shall be duly authorized, validly issued and free of
preemptive rights, with no personal liability attaching to the ownership of such
shares. All shares of Arch Common Stock converted into shares of Parent Common
Stock pursuant to this Section 2.1(c)(i) shall no longer be outstanding and
shall automatically be canceled and retired and shall cease to exist, and each
holder of a certificate formerly representing any such shares shall cease to
have any rights, except the right to receive Parent Common Stock to be issued,
in consideration for such shares upon the surrender of such certificate in
accordance with this Article II, without interest.
(ii) All shares of Arch Common Stock that are owned by Arch as
treasury stock and any shares of Arch Common Stock owned by Metrocall or any
Subsidiary of Metrocall immediately prior to the Effective Time, other than
shares under any existing employee benefit plan which are held by either Company
as trustee, shall be canceled and retired and shall cease to exist and no share
capital of Parent or other consideration shall be delivered in exchange
therefore.
(iii) Each share of common stock, par value $0.01 per share, of
Arch Acquiring Sub issued and outstanding immediately before the Effective Time
shall be converted into one share of common stock of the Surviving Arch
Corporation.
(iv) If any shares of Arch Common Stock outstanding immediately
prior to the Effective Time are unvested or are subject to a repurchase option,
risk of forfeiture or other condition under any applicable restricted stock
purchase agreement or other agreement with Arch, then the shares of Parent
Common Stock issued in exchange for such shares of Arch Common Stock will also
be unvested and subject to the same repurchase option,
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risk of forfeiture or other condition, and the certificates representing such
shares of Parent Common Stock may accordingly be marked with appropriate
legends, except that this Section 2.1(c)(iv) shall not apply to any such shares
that, pursuant to the terms of the applicable agreement, certificate or other
governing instrument, would otherwise be vested or freed of such repurchase
option, risk of forfeiture or other condition as a result of the Transactions.
Arch shall take all action that may be necessary to ensure that, from and after
the Effective Time, Parent is entitled to exercise any such repurchase option or
other right set forth in any such restricted stock purchase agreement or other
agreement.
(d) Arch Stock Options and Unissued Shares Under the Arch Plan of
Reorganization. (i) Arch Stock Options. At the Effective Time, all options to
purchase shares of Arch Common Stock (each, an "Arch Stock Option") which are
then outstanding and unexercised shall cease to represent a right to acquire
shares of Arch Common Stock and shall be converted automatically into an option
to acquire, on the same terms and conditions as were otherwise applicable under
the Arch Stock Option, the number of shares of Parent Common Stock equal to the
number of shares of Arch Common Stock subject to such Arch Stock Option
immediately prior to the Effective Time, at a price per share equal to the per
share exercise price specified in such Arch Stock Option immediately prior to
the Effective Time; provided, however, that in the case of any Arch Stock Option
to which Section 421 of the Code, applies by reason of its qualification under
Section 422 of the Code, the exercise price per share, the number of shares
subject to such Arch Stock Option and the terms and conditions of exercise of
such Arch Stock Option shall be determined in a manner consistent with the
requirements of Section 424(a) of the Code. Unless otherwise elected by Arch
prior to the Effective Time, Parent shall assume Arch's obligations with respect
to each outstanding Arch Stock Option in such manner that Parent (i) is a
corporation "assuming a stock option in a transaction to which Section 424(a)
applies" within the meaning of Section 424 of the Code or (ii) to the extent
that Section 424 of the Code does not apply to such Arch Stock Option, would be
such a corporation were Section 424 of the Code applicable to such Arch Stock
Option; and, if not so otherwise elected, after the Effective Time, all
references to Arch in the Arch Stock Plan and the applicable Arch Stock Option
agreements shall be deemed to refer to Parent, which shall have assumed the Arch
Stock Plan as of the Effective Time by virtue of this Agreement and without any
further action on the part of Parent or Arch. Each Arch Stock Option so assumed
by Parent under this Agreement shall continue to have, and be subject to, the
same terms and conditions set forth in the Arch Stock Plan and the applicable
Arch Stock Option as in effect immediately prior to the Effective Time.
Metrocall and Arch shall use, and shall cause Parent to use, all reasonable
efforts to ensure that Arch Stock Options intended to qualify as incentive stock
options under Section 422 of the Code prior to the Effective Time continue to so
qualify after the Effective Time. Prior to the Effective Time, the Arch Board
shall take, or shall cause its committees to take, all action necessary to
effectuate the foregoing.
(ii) Unissued Shares Under the Arch Plan of Reorganization. At
the Effective Time, all rights, contingent or otherwise, to receive shares of
Arch Common Stock, which are not yet issued and outstanding, pursuant to a
distribution under the Arch Plan of Reorganization (each, an "Arch Stock
Right"), including pursuant to the Arch Stock Plan, shall no longer be rights
with respect to Arch Common Stock and shall thereafter be rights to receive the
same number of shares of Parent Common Stock, subject to the same terms and
conditions of the Arch Plan of Reorganization and, as applicable, the Arch Stock
Plan as were otherwise
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applicable to the Arch Stock Rights. Prior to the Effective Time, the Arch Board
shall take, or shall cause its committees to take, all action necessary to
effectuate the foregoing.
(e) Parent Actions with Respect to Stock Options, Stock Rights and
Warrants. (i) Prior to the Effective Time, Parent shall reserve for issuance and
shall make available for issuance in accordance with Sections 2.1(b) and 2.1(d)
the number of shares of Parent Common Stock necessary to satisfy Parent's
obligations under Sections 2.1(b) and 2.1(d). With respect to the Arch Stock
Plan and Metrocall Option Plan to be assumed by Parent, Parent shall take all
corporate action necessary or appropriate to, as soon as reasonably practicable
after the Effective Time, file with the SEC a registration statement on Form S-8
(or any successor or other appropriate form) with respect to the shares of
Parent Common Stock subject to options granted under such plans to the extent
required under applicable law in order for such shares to be sold without
restriction, and Parent shall use its best efforts to maintain the effectiveness
of such registration statement (and maintain the current status of the
prospectuses contained therein), as well as comply with any applicable state
securities or "blue sky" laws, for so long as such benefits and grants remain
payable and such options under such plans remain outstanding.
(ii) As soon as practicable after the Effective Time, Parent
shall cause to be delivered to all holders of Metrocall Stock Options, to the
extent the holder thereof possesses such Metrocall Stock Options pursuant to the
Metrocall Option Plan, appropriate notices setting forth such holders' rights
pursuant to the Metrocall Option Plan (as defined in Section 4.2(a)) and
agreements evidencing the grants of such Metrocall Stock Options. To the extent
permitted by law, Parent shall comply with the terms of the Metrocall Option
Plan and shall take such reasonable steps as are necessary or required by, and
subject to the provisions of, the Metrocall Option Plan, to have the Metrocall
Stock Options which qualified as incentive stock options prior to the Effective
Time continue to qualify as incentive stock options of Parent after the
Effective Time.
(iii) As soon as practicable after the Effective Time, Parent
shall cause to be delivered to all holders of Arch Stock Rights, to the extent
the holder thereof possesses such Arch Stock Rights pursuant to the Arch Stock
Plan, and Arch Stock Options, as the case may be, appropriate notices setting
forth such holders' rights pursuant to the Arch Stock Plan and agreements
evidencing the grants of such and Arch Stock Rights and Arch Stock Options, as
applicable. To the extent permitted by law, Parent shall comply with the terms
of the Arch Stock Plan and shall take such reasonable steps as are necessary or
required by, and subject to the provisions of, the Arch Stock Plan, to have the
Arch Stock Options which qualified as incentive stock options prior to the
Effective Time continue to qualify as incentive stock options of Parent after
the Effective Time.
(iv) As soon as practicable after the Effective Time, Parent
shall cause to be delivered to all holders of Metrocall Warrants appropriate
notices setting forth such holders' rights pursuant thereto.
(f) Cancellation of Parent Stock. The shares of capital stock of
Parent owned by Metrocall and Arch immediately prior to the Effective Time will
be canceled at the Effective Time.
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Section 2.2 Exchange Fund. Concurrently with or prior to the Effective
Time, Metrocall and Arch shall jointly designate a duly qualified bank or trust
company to act as agent (the "Exchange Agent") for purposes of exchanging
certificates which immediately prior to the Effective Time represented shares of
Arch Common Stock or shares of Metrocall Common Stock ("Certificates") for the
applicable Merger Consideration. At or prior to the Effective Time, Parent shall
deposit with the Exchange Agent, in trust for the benefit of holders of
Certificates, certificates representing the Parent Common Stock issuable
pursuant to Sections 2.1(a) and 2.1(c) upon conversion of outstanding shares of
Arch Common Stock and Metrocall Common Stock, cash for payment of the Cash
Election Price with respect to the Electing Shares and cash for payment of any
fractional shares referred to in Section 2.10. Parent agrees to make available
to the Exchange Agent from time to time as needed, cash sufficient to pay any
dividends and other distributions pursuant to Section 2.9. Any cash and
certificates representing Parent Common Stock deposited with the Exchange Agent
shall hereinafter be referred to as the "Exchange Fund".
Section 2.3 Elections. (a) Each Person who, immediately prior to the
Effective Time, is (i) a record holder of shares of Metrocall Common Stock shall
be entitled, with respect to all or any portion of such shares, to make an
unconditional election to receive cash in exchange for such shares or (ii) a
holder of vested Metrocall Stock Options giving an irrevocable notice of
exercise of such Metrocall Stock Options prior to the Effective Time, subject
only to the Closing, shall be entitled to make an election to receive cash in
exchange for the shares of Metrocall Common Stock issuable upon exercise of such
Metrocall Stock Options.
(b) Parent shall, or shall cause the Exchange Agent to, prepare and
mail a form of election (the "Form of Election") with the Joint Proxy
Statement/Prospectus (as defined in Section 3.16) to holders of Metrocall Common
Stock of record (other than shares of Metrocall Common Stock to be cancelled
pursuant to Section 2.1(a)(ii)) and holders of vested Metrocall Stock Options as
of the record date for the meeting of stockholders of Metrocall (the "Metrocall
Stockholders Meeting") to obtain the Metrocall Stockholders Approval (as defined
in Section 4.4(d)), which shall be used by each such holder who wishes to elect
to receive the Cash Election Price for any or all shares of Metrocall Common
Stock held by such holder as of immediately prior to the Effective Time. Prior
to the record date of the Metrocall Stockholders Meeting, the Metrocall Board or
a committee thereof shall establish procedures for holders of vested Metrocall
Stock Options to give an irrevocable notice of exercise of such Metrocall Stock
Options, to deposit funds for the exercise thereof, to make the cash election
and to provide for netting of funds to be received pursuant to the cash election
against funds to be deposited for the exercise of such Metrocall Stock Options.
In addition, Parent shall use its reasonable best efforts to make the Form of
Election and the Joint Proxy Statement/Prospectus available to all Persons who
become holders of Metrocall Common Stock or Metrocall Stock Options during the
period between such record date and the Election Date. Any such election to
receive the Cash Election Price will be properly made only if (i) the Exchange
Agent has received a Form of Election at its designated office, by 5:00 p.m.,
New York City time, on (A) the Business Day immediately preceding the date of
the Metrocall Stockholders Meeting or (B) any later date as to which Metrocall
may provide, in consultation with Arch (the "Election Date") (which date Parent
shall publicly announce as soon as practicable but in no event less than five
Business Days prior to the Election Date), provided that the Companies shall
agree to any Election Date, and notice thereof, required to comply with any
legal requirements with respect thereto, and (ii) such Form of
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Election is properly completed and signed and, in the case of holders of
Metrocall Common Stock, accompanied by certificates for the shares of Metrocall
Common Stock to which such Form of Election relates, duly endorsed in blank or
otherwise in form acceptable for transfer on the books of Metrocall (or by an
appropriate guarantee of delivery of such certificates as set forth in such Form
of Election from a firm which is a member of a registered national securities
exchange or of the National Association of Securities Dealers, Inc. or a
commercial bank or trust company having an office or correspondent in the United
States, provided such certificates are in fact delivered to the Exchange Agent
within three Business Days after the date of execution of such guarantee of
delivery). A record holder acting in different capacities or acting on behalf of
other Persons in any way will be entitled to submit an Election Form for each
capacity in which such record holder so acts with respect to each Person for
which it so acts.
(c) Any Form of Election may be revoked by the holder of Metrocall
Common Stock submitting such Form of Election to the Exchange Agent only by
written notice received by the Exchange Agent prior to 5:00 p.m., New York City
time, on the Election Date. In addition, all Forms of Election shall
automatically be revoked if the Exchange Agent is notified in writing by
Metrocall and Arch that the Merger has been abandoned. If a Form of Election is
so revoked, in the case of a holder of Metrocall Common Stock submitting such
Form of Election to the Exchange Agent, the certificate or certificates (or
guarantee of delivery, as appropriate) for the shares of Metrocall Common Stock
to which such Form of Election relates shall be promptly returned to such
holder.
(d) The Exchange Agent may, with the agreement of Metrocall, in
consultation with Arch, make such rules as are consistent with this Section 2.3
for the implementation of the elections provided for in this Section 2.3 and in
Section 2.4 as shall be necessary or desirable to fully effect such elections
with respect to Metrocall Common Stock and Metrocall Stock Options.
(e) The Exchange Agent shall have discretion to determine whether or
not an election to receive the Cash Election Price has been properly made or
revoked pursuant to this Section 2.3 with respect to shares of Metrocall Common
Stock and when elections and revocations were received by it. If the Exchange
Agent determines that any election to receive the Cash Election Price was not
properly made with respect to shares of Metrocall Common Stock, such shares
shall be treated by the Exchange Agent as shares that were not Electing Shares
at the Effective Time, and subject to the provisions of Sections 2.1(a)(v), 2.4
and 2.10, such shares shall be exchanged in the Merger for shares of Parent
Common Stock pursuant to Section 2.1(a)(i)(B). If the Exchange Agent determines
that any contingent election to receive the Cash Election Price was not properly
made with respect to Metrocall Stock Options, such contingent election shall be
deemed as not made and such Metrocall Stock Options shall be exchanged in the
Merger for options to purchase Parent Common Stock pursuant to Section 2.1(b).
The Exchange Agent shall also make all computations as to the allocation and the
pro-ration, including the determination of the deemed elections contemplated by
Section 2.4 and any such computation and deemed elections shall be conclusive
and binding on the holders of Metrocall Common Stock and Metrocall Stock
Options.
Section 2.4 Allocation of Cash and Parent Common Stock. (a) Election
Number. Two million (2,000,000) (the "Election Number") shares of Metrocall
Common Stock,
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including shares of Metrocall Common Stock issuable upon exercise of Metrocall
Stock Options as provided in Section 2.3(a), shall be converted into the right
to receive the Cash Election Price at the Effective Time.
(b) Excess Electing Shares. If the number of Electing Shares exceeds
the Election Number, then shares of Metrocall Common Stock other than the
Electing Shares and Appraisal Shares (collectively, the "Non-Electing Shares")
shall be converted into shares of Parent Common Stock in accordance with Section
2.1(a)(i)(B) and Electing Shares shall be converted into the right to receive
the Cash Election Price or shares of Parent Common Stock in accordance with
Sections 2.1(a)(i)(A) and 2.1(a)(i)(B) in the following manner:
(i) A proration factor (the "Excess Proration Factor") shall be
determined by dividing the Election Number by the total number of Electing
Shares.
(ii) The number of Electing Shares covered by an Election to be
converted into the right to receive the Cash Election Price shall be determined
by multiplying the Excess Proration Factor by the total number of Electing
Shares covered by such Election.
(iii) All Electing Shares other than those shares converted into
the right to receive the Cash Election Price in accordance with Section
2.4(b)(ii) shall be converted into shares of Parent Common Stock in accordance
with Section 2.1(a)(i)(B), subject to Section 2.10.
(c) Deemed Elections. If the number of Electing Shares is less than
or equal to the Election Number, then all Electing Shares shall be converted
into the right to receive the Cash Election Price in accordance with Section
2.1(a)(1)(A) and the Non-Electing Shares shall be converted into the right to
receive either the (i) Cash Election Price and the holders thereof shall be
deemed to have properly made an election with respect to such shares or (ii)
shares of Parent Common Stock in accordance with Sections 2.1(a)(1)(A) and
2.1(a)(1)(B) in the following manner:
(i) A proration factor (the "Deemed Election Proration Factor")
shall be determined by dividing (A) the Election Number minus the total number
of Electing Shares by (B) the total number of Non-Electing Shares.
(ii) The number of Non-Electing Shares of each stockholder to be
converted into the right to receive the Cash Election Price and deemed to have
properly made an election with respect to such shares shall be determined by
multiplying the Deemed Election Proration Factor by the total number of
Non-Electing Shares held by such stockholder.
(iii) All Non-Electing Shares other than those shares converted
into the right to receive the Cash Election Price in accordance with Sections
2.4(c)(ii) shall be converted into shares of Parent Common Stock in accordance
with Section 2.1(a)(1)(B), subject to Section 2.10.
Section 2.5 Exchange Procedures. As soon as practicable after the
Effective Time, Parent shall cause the Exchange Agent to mail or make available
to Cede & Co. and, as appropriate, each holder of record of a Certificate or
Certificates which immediately prior to the
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Effective Time represented outstanding shares of Arch Common Stock whose shares
were converted into the right to receive the Arch Merger Consideration and each
holder of record of a Certificate or Certificates which immediately prior to the
Effective Time represented outstanding shares of Metrocall Common Stock whose
shares were converted into the right to receive the Metrocall Merger
Consideration, a notice and letter of transmittal advising such holder of the
effectiveness of the Merger and the procedure for surrendering to the Exchange
Agent such Certificate or Certificates in exchange for cash or shares of Parent
Common Stock deliverable in respect thereof pursuant to this Article II. The
Exchange Agent shall not be entitled to vote or exercise any rights of ownership
with respect to the shares of Metrocall Common Stock and Arch Common Stock
surrendered to it and held by it from time to time hereunder, except that it
shall receive and hold all dividends or other distributions paid or distributed
with respect to such Metrocall Common Stock and Arch Common Stock for the
account of the Persons entitled thereto.
Section 2.6 Right to Receive Merger Consideration. (a) Each holder of
shares of Arch Common Stock or Metrocall Common Stock that have been converted
into a right to receive Merger Consideration, upon surrender to the Exchange
Agent of a Certificate or Certificates, together with a properly completed
letter of transmittal covering such shares of Arch Common Stock or Metrocall
Common Stock, will be entitled to receive the applicable Merger Consideration as
set forth in Section 2.1(a) or Section 2.1(c), as applicable. Until so
surrendered, each share of Arch Common Stock or Metrocall Common Stock shall,
after the Effective Time, represent for all purposes, only the right to receive
the applicable Merger Consideration and any other amounts payable pursuant to
Section 2.9. If any Merger Consideration is to be issued to a Person other than
the registered holder of the Arch Common Stock or Metrocall Common Stock
represented by the Certificate or Certificates surrendered with respect thereto,
it shall be a condition to such issuance that the Certificate or Certificates so
surrendered shall be properly endorsed or otherwise be in proper form for
transfer and that the Person requesting such issuance shall pay to the Exchange
Agent any transfer or other taxes required as a result of such issuance to a
Person other than the registered holder of such Arch Common Stock or Metrocall
Common Stock or establish to the reasonable satisfaction of the Exchange Agent
that such tax has been paid or is not payable.
(b) Notwithstanding anything to the contrary contained in this
Article II, Certificates surrendered for exchange by any affiliate (as defined
in Section 6.5) of Arch or Metrocall shall not be exchanged until the later of
(a) the date Parent has received an Affiliate Agreement (as defined in Section
6.5) from such affiliate, or (b) the date shares of Parent Common Stock issuable
to such affiliate are transferable pursuant to the Affiliate Agreement
regardless of whether such agreement was executed by the affiliate.
Section 2.7 Stock Transfer Books. As of the Effective Time, there shall
be no further registration of transfers of shares of Arch Common Stock or
Metrocall Common Stock that were outstanding prior to the Effective Time. After
the Effective Time, Certificates presented to either Surviving Arch Corporation
or Surviving Metrocall Corporation for transfer shall be canceled and exchanged
for the consideration provided for, and in accordance with the procedures set
forth, in this Article II. At the close of business on the Closing Date, the
stock ledger of Arch with respect to the issuance of Arch Common Stock and the
stock ledger of Metrocall with respect to the issuance of Metrocall Common Stock
shall be closed.
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Section 2.8 Release of Exchange Fund. From and after the first
anniversary of the Effective Time, any portion of the Exchange Fund that remains
unclaimed by the holders of shares of Arch Common Stock and Metrocall Common
Stock shall be returned to Parent upon demand. Any such holder who has not
delivered his shares of Arch Common Stock or Metrocall Common Stock to the
Exchange Agent in accordance with this Article II prior to that time shall
thereafter look only to Parent for issuance of shares of Parent Common Stock in
respect of shares of Arch Common Stock or Metrocall Common Stock, respectively.
Notwithstanding the foregoing, neither Parent nor Surviving Arch Corporation nor
Surviving Metrocall Corporation shall be liable to any holder of shares of Arch
Common Stock or Metrocall Common Stock for any securities delivered or any
amount paid to a public official pursuant to applicable abandoned property laws.
Section 2.9 Distributions with Respect to Unexchanged Shares. No
dividends, interest or other distributions with respect to shares of Parent
Common Stock issuable with respect to Arch Common Stock or Metrocall Common
Stock shall be paid to the holder of any unsurrendered Certificates until such
Certificates are surrendered as provided in this Article II. Upon such
surrender, there shall be paid, without interest, to the Person in whose name
the shares of Parent Common Stock are registered, all dividends and other
distributions payable in respect of such securities on a date subsequent to, and
in respect of a record date after, the Effective Time.
Section 2.10 No Fractional Securities. Notwithstanding any other
provision of this Agreement, no certificates or scrip representing less than one
share of Parent Common Stock shall be issued in the Merger, and no Parent Common
Stock dividend, stock split or interest shall relate to any fractional security,
and such fractional interests shall not entitle the owner thereof to vote or to
any other rights of a security holder. In lieu of any such fractional shares,
each holder of shares of Metrocall Common Stock who would otherwise have been
entitled to receive a fraction of a share of Parent Common Stock upon surrender
of Certificates for exchange pursuant to this Article II shall be entitled to
receive from the Exchange Agent a cash payment equal to such fraction multiplied
by the Cash Election Price, without interest.
Section 2.11 Adjustments To Exchange Ratios and Cash Election Price.
(a) The Exchange Ratios were reached upon the basis that,
after giving effect to the exchange of the Election Number of shares of
Metrocall Common Stock, including shares of Metrocall Common Stock issuable upon
exercise of Metrocall Warrants, Metrocall Stock Rights and Metrocall Stock
Options, for the Cash Election Price, the Metrocall Fully Diluted Shares would
be exchanged for 27.5% of the Parent Fully Diluted Shares and the Arch Fully
Diluted Shares would be exchanged for 72.5% of the Parent Fully Diluted Shares.
To the extent that (i) any inaccuracy of a representation or warranty in Section
3.2 or 4.2 and/or (ii) an increase in the Arch Fully Diluted Shares in
accordance with Schedule 3.2 is determined to have resulted in a failure of the
Exchange Ratios to result in the percentage stockholding described in the
preceding sentence, then the Metrocall Exchange Ratio shall be adjusted
accordingly. To the extent any such change in the Metrocall Exchange Ratio
results from an inaccuracy of a representation or warranty in Section 4.2, the
Cash Election Price shall be adjusted in proportion to the adjustment to the
Metrocall Exchange Ratio. "Parent Fully Diluted Shares" shall mean the
outstanding equity of Parent to be exchanged for the outstanding equity of
Metrocall and Arch as
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of the Effective Time, comprised of all issued and outstanding shares of Parent
Common Stock, whether restricted or unrestricted, shares of Parent Common Stock
reserved for issuance upon exercise of issued and outstanding options and
warrants, whether vested or unvested, and shares of Parent Common Stock reserved
for issuance in exchange for shares of Metrocall Common Stock and Arch Common
Stock contemplated to be issued under the Metrocall Plan of Reorganization and
the Arch Plan of Reorganization, respectively, but not including the shares of
Parent Common Stock reserved for issuance under the equity incentive plan to be
established by the Parent Board as contemplated in Section 6.11(f).
(b) The Metrocall Exchange Ratio and the Cash Election Price
shall be adjusted to reflect appropriately the effect of any stock split,
reverse stock split, stock dividend (including any dividend or distribution of
securities convertible into Metrocall Common Stock or Arch Common Stock),
extraordinary cash dividends, reorganization, recapitalization,
reclassification, combination, exchange of shares or other like change with
respect to Metrocall Common Stock or Arch Common Stock occurring on or after the
date hereof and prior to the Effective Time.
Section 2.12 Closing. The closing (the "Closing") of the
Transactions shall take place simultaneously at the offices of Xxxxxxx Xxxx &
Xxxxx LLP, located at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as promptly as
practicable (but in any event within five Business Days) following the date on
which the last of the conditions set forth in Article VII is fulfilled (other
than conditions contemplated to be fulfilled on the Closing Date) or waived or
at such other time and place as Metrocall and Arch shall agree. The date on
which the Closing occurs is referred to in this Agreement as the "Closing Date".
Section 2.13 Lost, Stolen, Destroyed Certificates. In the event that
any Certificates shall have been lost, stolen or destroyed, the Exchange Agent
shall issue in exchange for such lost, stolen or destroyed Certificates, upon
the making of an affidavit of that fact by the holder thereof, certificates
representing the shares of Parent Common Stock or cash, as applicable, into
which the shares of Arch Common Stock or Metrocall Common Stock represented by
such Certificates were converted, pursuant to Section 2.1, cash for fractional
shares, if any, as may be required pursuant to Section 2.10 and any dividends or
distributions payable pursuant to Section 2.9; provided, however, that Parent
may, in its discretion and as a condition precedent to the issuance of such
certificates representing shares of Parent Common Stock, cash and other
distributions, require the owner of such lost, stolen or destroyed Certificates
to deliver a bond in such sum as it may reasonably direct as indemnity against
any claim that may be made against Parent, the Surviving Metrocall Corporation,
the Surviving Arch Corporation or the Exchange Agent with respect to the
Certificates alleged to have been lost, stolen or destroyed.
Section 2.14 Taking of Necessary Action; Further Action.
(a) If any further action is necessary or desirable to carry
out the purposes of this Agreement and to vest Parent, the Surviving Metrocall
Corporation or the Surviving Arch Corporation with full right, title and
possession to all assets, property, rights, privileges, powers and franchises of
Parent, Metrocall, Metrocall Acquiring Sub, Arch and Arch Acquiring Sub to the
extent contemplated by this Agreement, the officers and directors of Parent,
Metrocall,
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Metrocall Acquiring Sub, Arch and Arch Acquiring Sub immediately prior to the
Effective Time will take all such lawful and necessary action.
(b) If, at any time after the Effective Time, Parent shall
consider or be advised that any further assignments or assurances in law or any
other acts are necessary or desirable to (i) vest, perfect, or confirm, of
record or otherwise, in the Surviving Metrocall Corporation or the Surviving
Arch Corporation its right, title or interest in or under any of the rights,
properties, or assets of Metrocall or Arch acquired or to be acquired by the
Surviving Metrocall Corporation or the Surviving Arch Corporation, respectively,
as a result of, or in connection with, the Transactions, or (ii) otherwise carry
out the purposes of this Agreement, Metrocall or Arch and its proper officers
and directors shall be deemed to have granted to the Surviving Metrocall
Corporation or the Surviving Arch Corporation, respectively, an irrevocable
power of attorney to execute and deliver all such proper deeds, assignments, and
assurances in law and to do all acts necessary to proper to vest, perfect, or
confirm title to and possession of such rights, properties, or assets in the
Surviving Metrocall Corporation or the Surviving Arch Corporation, respectively,
and otherwise to carry out the purposes of this Agreement; and the proper
officers and directors of Parent, the Surviving Metrocall Corporation or the
Surviving Arch Corporation are fully authorized in the name of Metrocall, Arch
or otherwise to take any and all such action.
Section 2.15 Required Withholding. Each of the Exchange Agent and
Parent shall be entitled to deduct and withhold from any consideration payable
or otherwise deliverable pursuant to this Agreement to any holder or former
holder of Arch Common Stock or Metrocall Common Stock such amounts as may be
required to be deducted or withheld therefrom under the Code or under any
provision of state, local or foreign Tax law or under any other applicable laws.
To the extent such amounts are so deducted or withheld, the amount of such
consideration shall be treated for all purposes under this Agreement as having
been paid to the Person to whom such consideration would otherwise have been
paid.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF ARCH
Except as disclosed in the Arch SEC Reports (as defined in Section
3.5) or as set forth in the disclosure schedule delivered by Arch to Metrocall
prior to the execution of this Agreement (the "Arch Disclosure Schedule"), Arch
represents and warrants to Metrocall that:
Section 3.1 Organization and Qualification.Arch is a corporation
duly organized, validly existing and in good standing under the laws of the
state of Delaware and has the requisite corporate power and authority to own,
lease and operate its assets and properties and to carry on its business as it
is now being conducted. Arch is qualified to do business and is in good standing
in each jurisdiction in which the properties owned, leased or operated by it or
the nature of the business conducted by it makes such qualification necessary,
except where the failure to be so qualified and in good standing would not, when
taken together with all other such failures, have an Arch Material Adverse
Effect (as defined below). True, accurate and complete copies of Arch's
certificate of incorporation, as amended (the "Arch Certificate of
Incorporation") and bylaws, as amended (the "Arch Bylaws"), in each case as in
effect the date hereof, including all amendments thereto, have been delivered to
Metrocall. Arch is not in
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default in any respect in the performance, observation or fulfillment of any
provision of the Arch Certificate of Incorporation or Arch Bylaws. For purposes
of this Agreement, "Arch Material Adverse Effect" means any event, development,
change or effect that, individually or when taken together with all other such
events, developments, changes or effects, (x) is or would reasonably be expected
to be materially adverse to the business, operations, condition (financial or
otherwise), assets or liabilities of Arch and its Subsidiaries (as defined in
Section 3.3), taken as a whole or (y) prevents Arch from complying with its
obligations under this Agreement; provided, that none of the following shall be
taken into account in determining whether there has been or is an Arch Material
Adverse Effect: (i) any change in the market price or trading volume of Arch
Common Stock; (ii) any failure by Arch to meet internal projections or forecasts
or published revenue or earnings predictions; or (iii) any adverse change or
effect (including any litigation, loss of employees, cancellation of or delay in
customer orders, reduction in revenues or income or disruption of business
relationships) arising from or attributable or relating to (1) the announcement
or pendency of the Transactions, (2) conditions generally affecting the industry
or industry sector in which Arch or any of its Subsidiaries participates, the
U.S. economy as a whole or any foreign economy in any location where Arch or any
of its Subsidiaries has material operations or sales (which changes in each case
do not disproportionately and adversely affect Arch or its Subsidiaries in any
material respect), (3) legal, accounting, investment banking or other fees or
expenses incurred solely in connection with the Transactions, (4) the payment of
any amounts due to, or the provision of any other benefits to, any officers or
employees under the terms of employment contracts, non-competition agreements,
employee benefit plans, severance arrangements or other arrangements in each
case that are in existence as of the date of this Agreement and, on or prior to
the date of this Agreement, were made available or disclosed to Metrocall, (5)
compliance with the terms of, or the taking of any action required by, this
Agreement, (6) the taking of any action expressly approved or consented to by
Metrocall, (7) any change in accounting requirements or principles or any change
in generally applicable laws or the interpretation thereof, or (8) any action
required to be taken under generally applicable laws or agreements.
Section 3.2 Capitalization.
(a) The authorized capital stock of Arch consists of
50,000,000 shares of Arch Common Stock, and 50,000,000 shares of common stock,
par value $0.001 per share ("Arch Unclassified Common Stock"). As of the date
hereof, (i) 19,480,974 shares of Arch Common Stock were issued and outstanding,
all of which were validly issued and fully paid, nonassessable and free of
preemptive rights, (ii) no shares of Arch Unclassified Common Stock were issued
and outstanding, (iii) 249,996 shares of Arch Common Stock were reserved for
issuance upon exercise of options issued pursuant to the Arch's 2002 Stock
Incentive Plan, as amended (the "Arch Stock Plan"), (iv) no shares of Arch
Common Stock were reserved for issuance upon exercise of outstanding warrants
and options issued other than under the Arch Stock Plan, and (v) 519,026 shares
of Arch Common Stock were reserved for issuance under Arch's First Amended Joint
Plan of Reorganization under Chapter 11 of the Bankruptcy Code, dated March 13,
2002, as modified and approved by order of the United States Bankruptcy Court
for the District of Massachusetts, dated May 4, 2002 (the "Arch Plan of
Reorganization"), including certain shares the issuance of which is to be made
through the Arch Stock Plan (the Shares of Arch Common Stock referred to in the
foregoing clauses (i) - (v), collectively, subject to adjustment as set forth
in Schedule 3.2, the "Arch Fully Diluted Shares"). Arch has
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filed with the SEC or previously made available to Metrocall (i) a complete and
correct copy of the Arch Stock Plan, (ii) the weighted average exercise price
for all options outstanding as of the date hereof, and (iii) complete and
correct copies of the relevant written agreements, including amendments thereto,
evidencing the grant of such options.
(b) Except as set forth in subsection (a) above or as
otherwise contemplated by this Agreement, there are no outstanding
subscriptions, options, calls, contracts, commitments, restrictions,
arrangements, rights or warrants, including any right of conversion or exchange
under any outstanding security, instrument or other agreement, and also
including any rights plan or other anti-takeover agreement, obligating Arch or
any of its Subsidiaries to issue, deliver, sell, transfer, redeem, repurchase or
otherwise acquire or cause to be issued, delivered, sold, transferred, redeemed,
repurchased, or otherwise acquired, any shares of the capital stock of Arch or
obligating Arch or any of its Subsidiaries to grant, extend or enter into any
such agreement or commitment. There are no voting trusts, proxies or other
agreements or understandings to which Arch or any of its Subsidiaries is a party
or is bound with respect to the voting of any shares of capital stock of Arch.
The Arch Stock Plan does not (i) prohibit the assumption of such Arch Stock Plan
(and the options granted thereunder) by Parent and the substitution of Parent
Common Stock as provided in Section 2.1(d) of this Agreement and does not
require the consent or approval of the holders of the outstanding options under
the Arch Stock Plan, the stockholders of Arch, or any other Person in order to
effect such assumption and substitution or (ii) require the acceleration of the
exercise schedule or vesting provisions currently in effect for such options.
Section 3.3 Subsidiaries. Identified in Section 3.3 of the Arch
Disclosure Schedule is each direct and indirect Subsidiary of Arch. Other than
such Subsidiaries, Arch does not, directly or indirectly, own any equity or
similar interest in or any interest convertible, exchangeable or exercisable
for, any equity or similar interest in, any corporation, partnership, limited
liability company, joint venture or other entity. Each such Subsidiary (i) is
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization and has the requisite power and
authority to own, lease and operate its assets and properties and to carry on
its business as it is now being conducted; and (ii) is qualified to do business,
and is in good standing, in each jurisdiction in which the properties owned,
leased or operated by it or the nature of the business conducted by it makes
such qualification necessary, except in all cases where the failure to be so
qualified and in good standing would not, when taken together with all such
other failures, result in an Arch Material Adverse Effect. All of the
outstanding shares of capital stock or other equity interests of each Subsidiary
of Arch are validly issued, fully paid, nonassessable and free of preemptive
rights, and are owned directly or indirectly by Arch, free and clear of any
liens, claims or encumbrances. There are no subscriptions, options, warrants,
rights, calls, contracts, voting trusts, proxies or other commitments,
understandings, restrictions or arrangements relating to the issuance, sale,
voting, transfer, ownership or other rights with respect to any shares of
capital stock or other equity interests of any Subsidiary of Arch, including any
right of conversion or exchange under any outstanding security, instrument or
agreement. Arch has neither agreed nor is obligated to make nor be bound by any
written, oral or other agreement, contract, subcontract, lease, binding
understanding, instrument, note, option, warranty, purchase order, license,
sublicense, insurance policy, benefit plan, commitment or understanding of any
nature, as of the date hereof or as may hereinafter be in effect (other than as
set forth in this Agreement) under
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which it may become obligated to make any future investment in, or capital
contribution to, any other Person. As used in this Agreement, (i) the term
"Subsidiary" means, when used with reference to any Person, any corporation,
partnership, limited liability company, joint venture or other entity of which
such Person (either acting alone or together with its other Subsidiaries) owns,
directly or indirectly, 50% or more of the voting stock or other voting
interests, the holders of which are entitled to vote for the election of a
majority of the board of directors or any similar governing body of such
corporation, partnership, limited liability company, joint venture or other
entity; and (ii) the term "Person" means an individual, a corporation, a limited
liability company, a partnership, an association, a trust or any other entity or
organization, including a governmental or political subdivision or any agency or
instrumentality thereof.
Section 3.4 Authority; Non-Contravention; Approvals. x) Arch has
full corporate power and authority to enter into this Agreement and any other
agreement executed and delivered in connection herewith (collectively, the
"Ancillary Agreements") to which Arch is or will be a party and, subject to the
Arch Stockholders' Approval (as defined in Section 3.4(d)) and the Arch Required
Statutory Approvals (as defined in Section 3.4(c)), to consummate the
Transactions. This Agreement and the Ancillary Agreements to which Arch is or
will be a party have been duly and validly approved by the Arch Board, and no
other corporate proceeding on the part of Arch is necessary to authorize the
execution and delivery of this Agreement or such Ancillary Agreements, and,
except for the Arch Stockholders' Approval, the consummation by Arch of the
Transactions. This Agreement and the Ancillary Agreements to which Arch is or
will be a party have been duly executed and delivered by Arch and, assuming the
due authorization, execution and delivery by the other parties hereto and
thereto, constitute valid and legally binding agreements of Arch, enforceable
against it in accordance with their terms, except as such enforceability may be
subject to the effects of bankruptcy, insolvency, reorganization, moratorium and
other laws relating to or affecting the rights of creditors and of general
principles of equity.
(b) The execution and delivery of this Agreement and the
Ancillary Agreements to which Arch is or will be a party by Arch do not, and the
consummation of the Transactions will not, violate, conflict with or result in a
breach of any provision of, or constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default) under, or result in
the termination of, or accelerate obligations of Arch under, or result in a
right of any other Person to terminate or to accelerate obligations of Arch
under, or result in the creation of any lien, security interest, charge or
encumbrance upon any of the properties or assets of Arch or any of its
Subsidiaries under, or result in any penalty or modification or otherwise
affect, any of the terms, conditions or provisions of, (i) the respective
charters or by-laws of Arch or any of its Subsidiaries, (ii) other than as
provided in Section 3.4(c), and subject to obtaining (prior to the Effective
Time) the Arch Stockholders' Approval, any statute, law, ordinance, rule,
regulation, judgment, decree, order, injunction, writ, permit or license of any
court or governmental authority applicable to Arch or any of its Subsidiaries or
any of their respective properties or assets or (iii) any note, bond, mortgage,
indenture, deed of trust, license, franchise, permit, concession, contract,
lease or other instrument, obligation or agreement of any kind to which Arch or
any of its Subsidiaries is now a party or by which Arch or any of its
Subsidiaries or any of their respective properties or assets may be bound or
affected. Excluded from the foregoing sentences of this paragraph (b), insofar
as they apply to the terms, conditions or provisions described in clauses (ii)
and (iii) of the first sentence of this paragraph (b) (and
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whether resulting from such execution and delivery or consummation), are such
violations, conflicts, breaches, defaults, terminations, accelerations or
creations of liens, security interests, charges or encumbrances that would not,
individually or in the aggregate, have an Arch Material Adverse Effect.
(c) Except for (i) the filing of the Registration Statement
and Joint Proxy Statement/Prospectus (as such terms are defined in Section 3.16)
with the Securities and Exchange Commission (the "SEC") pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the
Securities Act of 1933, as amended (the "Securities Act"), and the declaration
of the effectiveness thereof by the SEC, (ii) the making of the Merger Filing,
(iii) any required filings with or approvals from the Nasdaq National Market
("Nasdaq"), (iv) all filings and approvals required to be made with or received
from a governmental agency, and the termination or expiration of any waiting
periods imposed, pursuant to the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
0000 (xxx "XXX Xxx"), the Xxxxxxx Act and the Xxxxxxx Act and any other Federal,
state or foreign statutes, rules, regulations, orders or decrees that are
designed to prohibit, restrict or regulate actions having the purpose or effect
of monopolization or restraint of trade (collectively, the "Antitrust Laws"),
(v) all filings and approvals required to be made with or received from the
Federal Communications Commission (the "FCC") pursuant to the Communications Act
of 1934, as amended (the "Communications Act"), the rules, regulations and
policies of the FCC (the "FCC Regulations") or any other Federal, state or
foreign statutes, rules, regulations, orders or decrees regulating or relating
to the paging business or the telecommunications business (the
"Telecommunications Laws"), (vi) all filings and approvals required to be made
or received in connection with any state securities or "blue sky" laws, and
(vii) all other filings and approvals required to be made with or received from
any local, state or Federal governmental authorities required for a change in
ownership of transmission sites (the filings and approvals referred to in
clauses (i) through (vii) are collectively referred to as the "Arch Required
Statutory Approvals"), no declaration, filing or registration with, or notice
to, or authorization, consent, waiver or approval of, any governmental or
regulatory body or authority is necessary for the execution and delivery of this
Agreement by Arch or the consummation by Arch of the Transactions, other than
such declarations, filings, registrations, notices, authorizations, consents,
waivers or approvals which, if not made or obtained, as the case may be, would
not, individually or in the aggregate, have an Arch Material Adverse Effect.
(d) The only vote of the holders of any class or series of
capital stock of Arch that will be necessary to consummate the Arch Merger and
the other Transactions is the approval of this Agreement by the holders of a
majority of the voting power of the outstanding shares of Arch Common Stock on
the record date (the "Arch Stockholders' Approval").
Section 3.5 Reports and Financial Statements.Since May 29, 2002,
Arch has filed with the SEC all forms, statements, reports and documents
(including all exhibits, post-effective amendments and supplements thereto)
required to be filed by it under each of the Securities Act, the Exchange Act
and the respective rules and regulations promulgated thereunder, each of which,
as amended if applicable, complied when filed in all material respects with all
applicable requirements of the Securities Act, the Exchange Act and the rules
and regulations promulgated thereunder. Other than Parent, Arch Acquiring Sub
and Metrocall Acquiring Sub with respect to the Transactions, no Subsidiary of
Arch is required to file any
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form, report or other document with the SEC. Arch has previously made available
to Metrocall, via its XXXXX filings where available, copies (including all
exhibits, post-effective amendments and supplements thereto) of its (a) Annual
Report on Form 10-K for the fiscal year ended December 31, 2003 (the "Arch
10-K"), as filed with the SEC, (b) proxy and information statements relating to
(i) all meetings of its stockholders (whether annual or special) and (ii)
actions by written consent in lieu of a stockholders' meeting, in each case from
May 29, 2002 until the date hereof, and (c) all other reports, including annual
reports, quarterly reports, and registration statements filed by Arch with the
SEC since May 29, 2002 (the documents referred to in clauses (a), (b) and (c)
are collectively referred to as the "Arch SEC Reports"). As of their respective
dates, the Arch SEC Reports did not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The audited financial
statements of Arch included in the Arch 10-K (collectively, the "Arch Financial
Statements"), have been prepared from, and are in accordance with, the books and
records of Arch, comply in all material respects with applicable accounting
requirements and with the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with United States generally
accepted accounting principles applied on a consistent basis ("GAAP") (except as
may be indicated therein or in the notes thereto) and fairly present, in
conformity with GAAP, the consolidated financial position of Arch and its
Subsidiaries as of the dates thereof and the consolidated results of their
operations and cash flows and changes in financial position, if any for the
periods then ended.
Section 3.6 Employee Benefit Plans; Labor Matters; No Parachute
Payments.(a) Section 3.6(a) of the Arch Disclosure Schedule lists all material
employee benefit plans (as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")) and all material bonus, stock
option, stock purchase, stock appreciation rights, phantom stock, restricted
stock, profit sharing, cash or stock based incentive, deferred compensation,
retiree medical or life insurance, supplemental, retirement, severance,
retention, employment, change in control, vacation, unemployment compensation,
workers compensation or other benefit plans, programs or arrangements, whether
legally enforceable or not and whether written or oral, to which Arch or any of
its Subsidiaries is a party, with respect to which Arch or any of its
Subsidiaries has any obligation or which are maintained, contributed to or
sponsored by Arch or any of its Subsidiaries for the benefit of any current or
former employee, officer or director of Arch or any of its Subsidiaries
(collectively, the "Arch Benefit Plans"). With respect to each Arch Benefit
Plan, Arch has delivered, or prior to Closing will deliver, or make available to
Metrocall a true, complete and correct copy of (i) such Arch Benefit Plan and
all amendments thereto and the most recent summary plan description related to
such Arch Benefit Plan, if a summary plan description is required therefor, (ii)
each trust agreement or other funding arrangement relating to such Arch Benefit
Plan, (iii) the most recent annual report (Form 5500) filed with the Internal
Revenue Service ("IRS") with respect to such Arch Benefit Plan, (iv) the most
recent actuarial report or financial statement relating to such Arch Benefit
Plan, (v) the most recent determination letter issued by the IRS with respect to
such Arch Benefit Plan, if it is qualified under Section 401(a) of the Code, and
(vi) a description setting forth the amount of any material liability of Arch or
its Subsidiaries as of the Closing Date for payments more than 30 days past due.
Neither Arch nor any of its Subsidiaries has any express or implied commitment,
whether legally enforceable or not, (i) to create, incur liability with respect
to or cause to exist any other employee benefit plan, program or arrangement,
(ii) to enter into any contract or
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agreement to provide compensation or benefits to any individual or (iii) to
modify, change or terminate any Arch Benefit Plan, other than with respect to a
modification, change or termination required by ERISA, the Code or other
applicable law.
(b) Neither Arch nor any ERISA Affiliate of Arch contributes
to, has contributed to or is required to contribute to a multiemployer plan
(within the meaning of Section 3(37) or 4001(a)(3) of ERISA) (a "Multiemployer
Plan") or a single employer pension plan (within the meaning of Section
4001(a)(15) of ERISA) (a "Multiple Employer Plan"). Except (i) as required by
Section 4980B of the Code or (ii) for benefits, the full cost of which is borne
by the employee, former employee, retired employee or beneficiary, none of the
Arch Benefit Plans provides for or promises retiree medical, disability or life
insurance benefits to any current or former employee, officer or director of
Arch or any of its Subsidiaries. Neither Arch nor ERISA Affiliate of Arch has
incurred any withdrawal liability with respect to a Multiemployer Plan under
Title IV of ERISA and no event or condition has occurred which would be expected
to cause Arch or any ERISA Affiliate of Arch to incur any such withdrawal
liability. For purposes of this Agreement, "ERISA Affiliate" shall mean, with
respect to any entity, trade or business, any other entity, trade or business
that is, or was at the relevant time, treated as a single employer under
Sections 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1) of ERISA.
(c) Except as would not, individually or in the aggregate,
have an Arch Material Adverse Effect, (i) Arch and its Subsidiaries have
complied, and are now in compliance, with all provisions of all laws and
regulations applicable to Arch Benefit Plans and each Arch Benefit Plan has been
administered in all material respects in accordance with its terms, (ii) all
contributions required to be made under the terms of any of the Arch Benefit
Plans as of the date of this Agreement have been timely made or have been
reflected on the most recent consolidated balance sheet filed or incorporated by
reference in the Arch SEC Reports prior to the date of this Agreement, (iii) no
event has occurred and, to the knowledge of Arch, there exists no condition or
set of circumstances in connection with which Arch or any of its Subsidiaries
could be subject to any liability under the terms of such Arch Benefit Plans,
ERISA, the Code or any other applicable law (other than a claim for benefits in
the ordinary course) and (iv) no legal action, proceeding, suit or claim is
pending or, to the knowledge of Arch, threatened with respect to any Arch
Benefit Plan or its assets (other than claims for benefits in the ordinary
course).
(d) Except as would not have, individually or in the
aggregate, an Arch Material Adverse Effect: (i) each Arch Benefit Plan which is
intended to be qualified under Section 401(a) of the Code or Section 401(k) of
the Code has received a favorable determination letter from the IRS through the
Economic Growth and Tax Relief Reconciliation Act of 2001 that it is so
qualified and each trust established in connection with any Arch Benefit Plan
which is intended to be exempt from federal income taxation under Section 501(a)
of the Code is so exempt, and no fact or event has occurred since the date of
such determination letter from the IRS to adversely affect the qualified status
of any such Arch Benefit Plan or the exempt status of any such trust; (ii) there
has been no prohibited transaction (within the meaning of Section 406 of ERISA
or Section 4975 of the Code) with respect to any Arch Benefit Plan; (iii)
neither Arch nor any of its Subsidiaries has incurred any liability for any
penalty or tax arising under Section 4972, 4980, 4980B or 6652 of the Code or
any liability under Section 502 of ERISA, and, to the knowledge of Arch, no fact
or event exists which could give rise to any such liability; (iv) no
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complete or partial termination has occurred within the five years preceding the
date hereof with respect to any Arch Benefit Plan, and (v) no Arch Benefit Plan
is subject to Title IV of ERISA.
(e) Neither Arch nor any of its Subsidiaries maintains or is
required to contribute to any plan, fund or similar program established or
maintained by Arch or any of its Subsidiaries outside the United States of
America primarily for the benefit of employees of Arch or any of its
Subsidiaries residing outside the United States of America, which fund or
similar program provides, or results in, retirement income, a deferral of income
in contemplation of retirement or payments to be made upon termination of
employment, and which plan is not subject to ERISA or the Code to which Arch or
any of its Subsidiaries would have any liability.
(f) Any terminated benefit plan maintained, contributed to or
sponsored by Arch or any of its Subsidiaries has been terminated in accordance
with applicable laws, including ERISA, and all benefits under any such
terminated benefit plan have been made in accordance with the terms of such
benefit plan.
(g) Neither Arch nor any of its Subsidiaries is a party to or
otherwise bound by any collective bargaining or other labor union contract
applicable to Persons employed by Arch or any of its Subsidiaries and no
collective bargaining agreement is being negotiated by Arch or any of its
Subsidiaries. As of the date of this Agreement, there is no union currently
certified and no union representation question or any organizational activity
threatened with respect to Arch or any of its Subsidiaries. As of the date of
this Agreement, there is no labor dispute, strike, walkout, lockout or work
stoppage or slowdown against Arch or any of its Subsidiaries pending or, to the
knowledge of Arch, threatened which may interfere with the respective business
activities of Arch and its Subsidiaries, except where such dispute, strike or
work stoppage would not, individually or in the aggregate, have an Arch Material
Adverse Effect. As of the date of this Agreement, to the knowledge of Arch,
there is no charge or complaint against Arch or any of its Subsidiaries pending
before the National Labor Relations Board or any comparable governmental
authority pending or threatened in writing, except where such unfair labor
practices, charges or complaints would not, individually or in the aggregate,
have an Arch Material Adverse Effect. There is no suit, claim, action,
proceeding or, to the knowledge of Arch, threatened against Arch, any of its
Subsidiaries, any directors, officers, fiduciaries or service providers of Arch
or between Arch or any of its Subsidiaries any employee, former employee or
representative of current or former employees, that would be expected to have an
Arch Material Adverse Effect.
(h) Arch has delivered or made available to Metrocall true,
complete and correct copies of (i) all employment agreements with officers and
employees of Arch and each of its Subsidiaries with annual compensation in
excess of $100,000 (including written summaries of oral agreements with respect
to (x) increases in compensation, (y) severance or (z) other restrictions on the
at-will status of any employment arrangement) and all consulting agreements of
Arch and each of its Subsidiaries providing for annual compensation in excess of
$100,000, (ii) all severance plans, agreements, programs and policies of Arch
and each of its Subsidiaries with or relating to their respective employees or
consultants, and (iii) all plans, programs, agreements and other arrangements of
Arch and each of its Subsidiaries with or relating to their respective employees
or consultants which contain "change of control" provisions.
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(i) No current or former employee, officer or director of Arch
or its Subsidiaries will be entitled to any additional benefits or any
acceleration of the time of payment or vesting of any benefits under any Arch
Benefit Plan, policy, arrangement, agreement, trust or loan as a result of the
Transactions. No amount payable, or economic benefit provided, by Arch or its
Subsidiaries (including any acceleration of the time of payment or vesting of
any benefit) could be considered an "excess parachute payment" under Section
280G of the Code. No Person is entitled to receive any additional payment from
Arch or its Subsidiaries or any other Person in the event that the excise tax of
Section 4999 of the Code is imposed on such Person.
(j) Neither the Arch nor any of its Subsidiaries has
effectuated (i) a "plant closing" (as defined in the Workers Adjustment
Retraining Notification Act, 29 U.S.C. Sections 2101, et seq. (the "WARN
Act")) affecting any site of employment or one or more facilities or operating
units within any site of employment of Arch or any of its Subsidiaries; or (ii)
a "mass layoff" (as defined in the WARN Act) affecting any site of employment or
facility of Arch or any of its Subsidiaries; nor has Arch and/or any of its
Subsidiaries been engaged in layoffs or employment terminations sufficient in
number to trigger application of any similar state or local law; and none of the
affected employees has suffered an "employment loss" (as defined in the WARN
Act) since ninety days prior to the date hereof. Neither Arch nor any of its
Subsidiaries has incurred any material liability under the WARN Act or similar
state laws which remains unpaid or unsatisfied.
(k) Except as would not have, individually or in the
aggregate, an Arch Material Adverse Effect, (i) Arch and its Subsidiaries are in
compliance with the terms and provisions of the Immigration Reform and Control
Act of 1986, as amended, and all related regulations promulgated thereunder;
(ii) Arch and its Subsidiaries are in compliance with all laws governing the
employment of its employees, including, but not limited to, all such federal,
state, and local laws relating to wages, hours, collective bargaining,
discrimination, retaliation, civil rights, safety and health, workers'
compensation and the collection and payment of withholding and/or Social
Security taxes and similar taxes; (iii) no employee or independent contractor
has filed a complaint for which Arch has received notice and Arch has not
conducted any internal investigation regarding conduct that may constitute a
violation of any federal, state or local law governing employment; (iv) since
December 31, 2003, to the knowledge of Arch as of the date hereof, no officer,
manager or other key employee of Arch or any of its Subsidiaries has received,
and no officer has given, notice to terminate his employment; (v) there are no
officers or employees of Arch or any of its Subsidiaries who are on secondment,
maternity leave or absent on grounds of disability, military or other leave of
absence (other than normal holidays or absence due to illness); (vi) Arch and
its Subsidiaries have complied with their obligations to inform and consult with
trade unions and other representatives of workers and to send notices to
relevant governmental officials; (vii) Arch and its Subsidiaries have maintained
adequate and suitable records regarding the service of their directors, officers
and employees and such records comply with requirements of data protection
legislation regarding the processing and storage of personal data on
individuals; (viii) there are no occupational health and safety claims against
Arch or any of its Subsidiaries; and (ix) there are no complaints, charges, or
claims against Arch or any of its Subsidiaries pending, or, to Arch's knowledge,
threatened in writing to be brought or filed, and with any authority or
arbitrator based on, arising out of, in connection with, or otherwise relating
to the employment or termination of employment of any individual by Arch or any
of its Subsidiaries.
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(l) Neither Arch nor any of its Subsidiaries has extended a
loan to any employee for which amounts are outstanding, except for advances in
respect of travel and entertainment expenses in the ordinary course of business.
Since December 31, 2002, no such loans have been forgiven.
(m) All salaries and wages and other benefits, bonuses and
commissions of all directors, officers or employees of Arch and its Subsidiaries
have, to the knowledge of Arch, to the extent due, been paid or discharged in
full, including, but not limited to, all payments due for calendar year 2003
bonuses.
(n) No Arch Benefit Plan is, or within the last three (3)
years has been, the subject of examination or audit by any governmental entity
or agency.
(o) Arch does not believe that there has been, and does not
believe or intend that consummation of the Transactions would constitute or be
deemed to be, a "Change in Control" with respect to Arch's Management Long-Term
Incentive Plan, the Arch Stock Plan or any related Restricted Stock Agreement or
Nonstatutory Stock Option Agreement or under the respective employment
agreements of Messrs. Xxxxx, Xxxxxxx and Xxxxxx, in each case as such term is
defined therein. Arch and its Subsidiaries do not believe that they have taken
any action or omitted to take any action which would or could reasonably be
expected to cause a "Change in Control" under any of Arch's Management Long-Term
Incentive Plan, the Arch Stock Plan or any related Restricted Stock Agreement or
under the respective employment agreements of Messrs. Xxxxx, Xxxxxxx and Xxxxxx
or otherwise provide a reasonable basis for any participant therein or party
thereto, as applicable, to believe that a "Change in Control" has occurred or
will occur as a consequence of the consummation of the Transactions.
Section 3.7 Certain Tax Matters.Neither Arch nor, to the knowledge
of Arch, any of its affiliates has taken, agreed to take, or intends to take,
any action that would reasonably be expected to prevent the Merger from
qualifying as a transfer by the holders of Metrocall Common Stock and Arch
Common Stock of all such shares of such stock (other than Appraisal Shares and
shares of such stock held by either Metrocall or Arch) to Parent in exchange for
all the issued and outstanding shares of Parent Common Stock and, in the case of
holders of Metrocall Common Stock, cash, which shares of such stock shall be the
only shares of such stock issued and outstanding on the Closing Date, all in
accordance with and governed by Section 351 of the Code. Arch is not aware of
any agreement, plan or other circumstances that would reasonably be expected to
prevent the Merger from qualifying as an exchange described in Section 351 of
the Code.
Section 3.8 Contracts; Debt Instruments.There is no loan or credit
agreement, note, bond, mortgage, indenture or lease, or any other contract,
license or agreement to which either Arch or any of its Subsidiaries is a party
or by which any of them or any of their respective properties or assets is bound
that is material to the business, financial condition or results of operations
of Arch and its Subsidiaries taken as a whole (collectively, the "Arch Material
Contracts") that has not been disclosed in the Arch SEC Reports. All Arch
Material Contracts are in full force and effect and are the valid and legally
binding obligations of the parties thereto and are enforceable in accordance
with their respective terms. Neither Arch nor any Subsidiary of Arch, nor, to
the knowledge of Arch, any other party to any Arch Material Contract, is in
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violation of or in default under (nor does there exist any condition which with
the passage of time or the giving of notice would reasonably be expected to
cause such a violation of or default under) any Arch Material Contract, except
for violations or defaults that would not have, individually or in the
aggregate, an Arch Material Adverse Effect. No party to any Arch Material
Contract has given notice of any action to terminate, cancel, rescind or procure
a judicial reformation thereof, other than notices of matters which have been
resolved in a manner not materially adverse to Arch. Set forth in Section 3.8 of
the Arch Disclosure Schedule is a description of any material changes to the
amount and terms of the indebtedness of Arch and its Subsidiaries as described
in the notes to the Arch Financial Statements.
Section 3.9 Litigation.There is no suit, claim, charge, action,
proceeding, arbitration or investigation pending or, to the knowledge of Arch,
threatened against Arch or any Subsidiary of Arch or any of their respective
officers or directors in their capacity as such before any governmental
authority that (i) individually (or together with any series of suits, claims,
charges, actions, proceedings, arbitrations or investigations arising from
substantially similar facts) would reasonably be expected to result in liability
to Arch and its Subsidiaries, collectively, of more than $100,000 or materially
delay the Closing or (ii) would have, individually or in the aggregate, an Arch
Material Adverse Effect, and, to the knowledge of Arch, there are no existing
facts or circumstances that would reasonably be expected to result in such a
suit, claim, charge, action, proceeding, arbitration or investigation. Arch is
not aware of any facts or circumstances which would reasonably be expected to
result in the denial of insurance coverage under policies issued to Arch and its
Subsidiaries in respect of such suits, claims, charges, actions, proceedings,
arbitrations and investigations for which Arch has a reasonable expectation of
obtaining insurance coverage, except in any case as would not have, individually
or in the aggregate, an Arch Material Adverse Effect. Neither Arch nor any
Subsidiary of Arch is subject to any outstanding order, writ, injunction or
decree which would have, individually or in the aggregate, an Arch Material
Adverse Effect.
Section 3.10 Insurance.All material insurance policies of Arch and
its Subsidiaries, including those policies set forth in Section 3.10 of the Arch
Disclosure Schedule, are in full force and effect. Neither Arch nor any of its
Subsidiaries is in breach or default thereunder (including with respect to the
payment of premiums or the giving of notices), and Arch does not know of any
occurrence or any event which (with notice or the lapse of time or both) would
constitute such a breach or default or permit termination, modification or
acceleration under the policy, except for such breaches or defaults which,
individually or in the aggregate, would not have an Arch Material Adverse
Effect.
Section 3.11 Intellectual Property.Except as would not, individually
or in the aggregate, have an Arch Material Adverse Effect, (i) Arch and its
Subsidiaries own or possess adequate licenses or other valid rights to use all
patents, patent applications, patent rights, trademarks, trademark
registrations, trademark rights, trade names, trade dress, trade name rights,
copyrights and copyright registrations and applications, copyright rights,
service marks, service xxxx registrations, trade secrets, applications for
trademarks and for service marks, know-how, other intellectual property rights
and other proprietary rights and information used or held for use in connection
with the respective businesses of Arch and its Subsidiaries as currently
conducted (collectively, the "Arch IP"), free and clear of all liens, and (ii)
Arch is unaware of any assertion or claim challenging the ownership, use or
validity of any of the foregoing. As of
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the date of this Agreement, Section 3.11 of the Arch Disclosure Schedule
contains a complete list of all material Arch IP owned by Arch and its
Subsidiaries that has been registered or with respect to which an application
for registration or patent application has been filed. The written agreements
pursuant to which any Arch IP has been licensed to Arch or any of its
Subsidiaries, are valid and binding obligations of Arch or such Subsidiary and,
to the knowledge of Arch, each other party thereto, enforceable in accordance
with their terms, and there are no material breaches or defaults thereunder. To
the knowledge of Arch, the conduct of the respective businesses of Arch and its
Subsidiaries as currently conducted does not infringe upon any patents, patent
applications, patent rights, trademarks, trademark registrations, trademark
rights, trade names, trade dress, trade name rights, copyrights and copyright
registrations and applications, copyright rights, service marks, service xxxx
registrations, trade secrets, applications for trademarks and for service marks,
know-how, other intellectual property rights or other proprietary rights or
information of any third party that would have, individually or in the
aggregate, an Arch Material Adverse Effect. To the knowledge of Arch, there are
no infringements of any proprietary rights owned by or licensed by or to Arch or
any Subsidiary of Arch, except as would not have an Arch Material Adverse
Effect.
Section 3.12 Taxes.Except for such matters that would not have,
individually or in the aggregate, an Arch Material Adverse Effect, (i) Arch and
each of its Subsidiaries has timely filed or shall timely file all returns and
reports required to be filed by it with any taxing authority, taking into
account any extension of time to file granted to or obtained on behalf of Arch
and its Subsidiaries, (ii) all taxes shown to be payable on such returns or
reports have been or will be paid, (iii) as of the date hereof, no deficiencies
for any amount of tax have been asserted or assessed by any taxing authority
against Arch or any Subsidiary of Arch that are not adequately reserved for, and
(iv) the Arch Financial Statements reflect an adequate reserve in accordance
with GAAP for all accrued taxes not yet payable by Arch and its Subsidiaries for
all taxable periods and portions thereof through the date of such financial
statements.
Section 3.13 Interested Party Transactions.Since December 31, 2002,
no executive officer, director or stockholder of Arch or any of its Subsidiaries
has engaged in any business dealings with Arch or any of its Subsidiaries (other
than any such business dealings that would not required to be disclosed in a
proxy statement satisfying the requirements of Regulation 14A promulgated under
the Exchange Act if filed on the date hereof).
Section 3.14 Absence of Undisclosed Liabilities.Neither Arch nor any
of its Subsidiaries has as of the date hereof any liabilities or obligations
(whether absolute, accrued, contingent or otherwise) of any nature, except
liabilities, obligations or contingencies (a) which are adequately accrued or
reserved against in the Arch Financial Statements or reflected in the notes
thereto, (b) which were incurred in the ordinary course of business and
consistent with past practices since December 31, 2003, (c) which would not,
individually or in the aggregate, have an Arch Material Adverse Effect or (d)
which are of a nature not required to be reflected in the consolidated financial
statements of Arch and its Subsidiaries, including the notes thereto, prepared
in accordance with GAAP consistently applied.
Section 3.15 Absence of Certain Changes.Except as contemplated by
this Agreement, since December 31, 2003, (a) Arch and each of its Subsidiaries
has conducted its business in all material respects in the ordinary course
consistent with past practices, (b) there
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has not been any change or development, or combination of changes or
developments that, individually or in the aggregate, would have an Arch Material
Adverse Effect, (c) there has not been any declaration, setting aside or payment
of any dividend or other distribution with respect to any shares of capital
stock of Arch or any of its Subsidiaries, or any repurchase, redemption or other
acquisition by Arch or any of its Subsidiaries of any outstanding shares of
capital stock or other securities of, or other ownership interests in, Arch or
any such Subsidiary, (d) there has not been any amendment of any term of any
outstanding security of Arch or any of its Subsidiaries, (e) there has not been
any change in any method of accounting or accounting practice by Arch or any of
its Subsidiaries, except for any such change required by reason of a concurrent
change in GAAP and (f) there has not been any negotiation or agreement by Arch
to do any of such things (other than as relate to the Transactions).
Section 3.16 Registration Statement and Proxy Statement.None of the
information to be supplied by Arch for inclusion in (i) the Registration
Statement on Form S-4 to be filed under the Securities Act with the SEC in
connection with the Merger for the purpose of registering the shares of Parent
Common Stock to be issued in the Merger (the "Registration Statement") or (ii)
the proxy statement and prospectus conforming to the prospectus forming part of
the Registration Statement to be distributed in connection with Arch's and
Metrocall's meetings of their respective stockholders to vote upon this
Agreement and the Transactions and any amendments thereof or supplements thereto
(together, the "Joint Proxy Statement/Prospectus"), will, in the case of the
Joint Proxy Statement/Prospectus, at the time of the mailing of the Joint Proxy
Statement/Prospectus and at the time of the meetings of stockholders of
Metrocall and Arch to be held in connection with the Transactions, or, in the
case of the Registration Statement, as amended or supplemented, at the time it
becomes effective and at the time of such meetings of the stockholders of
Metrocall and Arch, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
are made, not misleading. The Joint Proxy Statement/Prospectus will, as of its
mailing date, comply as to form in all material respects with all applicable
laws, including the provisions of the Securities Act and the Exchange Act and
the rules and regulations promulgated thereunder, except that no representation
is made by Arch with respect to information supplied by Metrocall or the
stockholders of Metrocall for inclusion in the Joint Proxy Statement/Prospectus.
Section 3.17 Reorganization.None of Arch or its Subsidiaries has
willfully taken or agreed to take, nor does it intend to take, any action that
would prevent the Merger from qualifying as an exchange described in Section 351
of the Code.
Section 3.18 Board Approval.The Arch Board has (a) declared the
advisability of and approved this Agreement and the Merger, (b) determined that
the Merger is in the best interests of the stockholders of Arch and is on terms
that are fair to such stockholders and (c) recommended that the stockholders of
Arch adopt and approve this Agreement and the Merger.
Section 3.19 Brokers and Finders.Arch has not entered into any
contract, arrangement or understanding with any Person or firm which may result
in the obligation of Arch or Parent to pay any finder's fees, brokerage or agent
commissions or other like payments in connection with the Transactions, except
Bear, Xxxxxxx & Co. Inc. ("Arch Financial Advisor") and Berenson & Company,
whose fees and expenses will be paid by Arch in accordance with
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Arch's respective agreements with Arch Financial Advisor and Berenson & Company,
based upon arrangements made by or on behalf of Arch and previously disclosed to
Metrocall.
Section 3.20 Opinion of Financial Advisor.Arch Financial Advisor has
rendered an opinion to the Arch Board to the effect that, as of the date hereof,
the Merger Consideration is fair to the holders of Arch Common Stock from a
financial point of view; it being understood and acknowledged by Arch that such
opinion has been rendered for the benefit of the Arch Board and is not intended
to, and may not, be relied upon by Metrocall, its affiliates or their respective
Subsidiaries. Arch Financial Advisor has authorized the inclusion of its opinion
in the Joint Proxy Statement/Prospectus.
Section 3.21 Hazardous Substances and Hazardous Waste.
To the knowledge of Arch:
(a) Except as would not have an Arch Material Adverse Effect,
(i) there is not now, nor has there ever been, any disposal, Release (as defined
below) or threatened Release of Hazardous Material (as defined below) on, from
or under properties now or ever owned or leased by or to Arch or its
Subsidiaries (the "Arch Properties"); (ii) there has not been generated by or on
behalf of Arch or its Subsidiaries any Hazardous Material; and (iii) no material
Hazardous Material has been disposed of or allowed to be disposed of by Arch or
its Subsidiaries, by any other party, on or off any of the Arch Properties
during the period that Arch or its Subsidiaries owned or leased the property
which may give rise under applicable Environmental Law (as defined below) to a
clean-up responsibility, personal injury liability or property damage claim
against Arch or its Subsidiaries or Arch or its Subsidiaries being named a
responsible party for any such clean-up costs, personal injuries or property
damage or create any cause of action by any third party against Arch.
(b) (i) None of Arch's or its Subsidiaries' operations at the
Arch Properties are (or, with respect to past Arch Properties and Arch
Properties of former Subsidiaries, were at the time of disposition) in violation
in any material respect of any Environmental Law (with respect to past Arch
Properties and Arch Properties of former Subsidiaries, Environmental Laws in
effect at the time of disposition); (ii) Arch and its Subsidiaries have obtained
and are in all material respects in compliance with all necessary permits or
authorizations that are required under Environmental Laws to operate their
facilities, assets and businesses; (iii) no Environmental Claims (as defined
below) have been asserted against Arch or its Subsidiaries or any predecessor in
interest, nor does Arch have knowledge or notice of any threatened in writing or
pending Environmental Claim against Arch or any of its Subsidiaries or any
predecessor in interest which is reasonably likely to result in Environmental
Liabilities (as defined below) that, individually or in the aggregate, would
have an Arch Material Adverse Effect; and (iv) no Environmental Claim has been
asserted against any facilities that may have received Hazardous Materials
generated by Arch or any of its Subsidiaries or any predecessor in interest
which is reasonably likely to result in Environmental Liabilities that,
individually or in the aggregate, would have an Arch Material Adverse Effect.
(c) Arch has delivered to Metrocall true and complete copies
of all material environmental reports, studies, investigations or correspondence
regarding any
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Environmental Liabilities of Arch or any environmental conditions at any of the
Arch Properties which are in possession of Arch or its agents.
(d) For purposes of this Agreement:
(i) "Environmental Claims" refers to any complaint,
summons, citation, directive, order, claim, litigation, investigation, notice of
violation, judicial or administrative proceeding, judgment or written
communication from any governmental agency, department, bureau, office or other
authority, or any third party involving violations of Environmental Laws or
Releases of Hazardous Materials from or onto (i) any assets, properties or
businesses of a Company or its Subsidiaries or any predecessor in interest or
(ii) any facilities which received Hazardous Materials generated by a Company or
its Subsidiaries or any predecessor in interest.
(ii) "Environmental Laws" includes the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C.
9601 et seq., as amended; the Resource Conservation and Recovery Act ("RCRA"),
42 U.S.C. 6901 et seq., as amended; the Clean Air Act ("CAA"), 42 U.S.C. 7401 et
seq., as amended; the Clean Water Act ("CWA"), 33 U.S.C. 1251 et seq., as
amended; the Occupational Safety and Health Act ("OSHA"), 29 U.S.C. 655 et seq.,
and any other federal, state, local or municipal laws, statutes, regulations,
rules or ordinances imposing liability or establishing standards of conduct for
protection of the environment.
(iii) "Environmental Liabilities" means any monetary
obligations, losses, liabilities (including strict liability), damages, punitive
damages, consequential damages, treble damages, costs and expenses (including
all reasonable out-of-pocket fees, disbursements and expenses of counsel,
out-of-pocket expert and consulting fees and out-of-pocket costs for
environmental site assessments, remedial investigation and feasibility studies),
fines, penalties, sanctions and interest incurred as a result of any
Environmental Claim filed by any governmental authority or any third party which
relate to any violations of Environmental Laws, Remedial Actions, Releases or
threatened Releases of Hazardous Materials from or onto (i) any property
presently or formerly owned by a Company or any of its Subsidiaries or a
predecessor in interest, or (ii) any facility which received Hazardous Materials
generated by a Company or any of its Subsidiaries or a predecessor in interest.
(iv) "Hazardous Material" includes, without
regard to amount and/or concentration (a) any element, compound, or chemical
that is defined, listed or otherwise classified as a contaminant, pollutant,
toxic pollutant, toxic or hazardous substances, extremely hazardous substance or
chemical, hazardous waste, medical waste, biohazardous or infectious waste,
special waste, or solid waste under Environmental Laws; (b) petroleum,
petroleum-based or petroleum-derived products; (c) polychlorinated biphenyls;
(d) any substance exhibiting a hazardous waste characteristic including but not
limited to corrosivity, ignitibility, toxicity or reactivity as well as any
radioactive or explosive materials; and (e) asbestos-containing materials and
manufactured products containing Hazardous Materials.
(v) "Release" means any spilling, leaking, pumping,
emitting, emptying, discharging, injecting, escaping, leaching, migrating,
dumping, or disposing of
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Hazardous Materials (including the abandonment or discarding of barrels,
containers or other closed receptacles containing Hazardous Materials) into the
environment.
(vi) "Remedial Action" means all actions taken
to (i) clean up, remove, remediate, contain, treat, monitor, assess, evaluate or
in any other way address Hazardous Materials in the indoor or outdoor
environment; (ii) prevent or minimize a Release or threatened Release of
Hazardous Materials so they do not migrate or endanger or threaten to endanger
public health or welfare or the indoor or outdoor environment; (iii) perform
pre-remedial studies and investigations and post-remedial operation and
maintenance activities; or (iv) any other actions defined by 42 U.S.C. 9601.
Section 3.22 Compliance with Laws.
Neither Arch nor any of its Subsidiaries is in violation of, or has
violated or, to the knowledge of Arch, received written notice of any violation
of, any applicable provisions of any laws, statutes, ordinances, regulations,
judgments, injunctions, orders or consent decrees, except for any such
violations that, individually or in the aggregate, would not have an Arch
Material Adverse Effect. To the knowledge of Arch, no investigation, proceeding,
action or review relating to Arch or any of its Subsidiaries by any governmental
entity is pending or threatened in writing, other than, in each case, those the
outcome of which would not, individually or in the aggregate, have an Arch
Material Adverse Effect.
Section 3.23 Permits and Licenses.
(a) Arch or its appropriate Subsidiaries hold all material
approvals, licenses, permits, registrations and similar type authorizations
necessary for the lawful ownership, lease, operation, use or maintenance of its
properties and the lawful conduct of its business as now conducted, including,
without limitation, those issued under or pursuant to the Communications Act,
the FCC Regulations and the Telecommunications Laws (collectively, the "Arch
Permits"). All Arch Permits are validly issued and in full force and effect,
except as would not, individually or in the aggregate, have an Arch Material
Adverse Effect. Each of Arch and its Subsidiaries is in compliance in all
respects with the terms and conditions of each Arch Permit, except where the
failure to be in compliance would not, individually or in the aggregate, have an
Arch Material Adverse Effect. There is not pending, or to the knowledge of Arch,
threatened, any action by or before any governmental or regulatory authority to
revoke, suspend, cancel, rescind, or modify in any material respect any of the
Arch Permits. Arch has timely made all regulatory filings required, and paid all
fees, assessments and contribution requirements imposed, by any governmental
authority, and all such filings and the calculation of such fees, are accurate
in all material respects, except where the failure to make such filing or pay
such fees or assessments would not, individually or in the aggregate, have an
Arch Material Adverse Effect.
(b) Section 3.23(b) of the Arch Disclosure Schedule contains a
true and complete list of all Arch Permits issued to Arch or any of its
Subsidiaries by the FCC (the "Arch FCC Licenses") and all pending applications
for Arch Permits that would be Arch FCC Licenses, if issued or granted. No such
Arch FCC License is subject to any restriction or condition which would limit in
any material respect the full operation of the business of Arch and its
Subsidiaries as now operated, other than those restrictions or conditions
routinely imposed in conjunction
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with such FCC Licenses. The Arch FCC Licenses are in good standing, are in full
force and effect in all material respects and are not materially impaired by any
act or omission of Arch, its Subsidiaries, or any of their respective officers,
directors, or employees.
Section 3.24 Real Property.
(a) Section 3.24(a) of the Arch Disclosure Schedule sets forth
a list of the addresses of all real property owned by Arch or any of its
Subsidiaries (the "Arch Owned Real Property"). Either Arch or its Subsidiaries,
as applicable, has good and marketable fee title to each of the Arch Owned Real
Property, except for defects in title, easements, restrictive covenants and
similar encumbrances or impediments that, in the aggregate, do not materially
interfere with the ability of Arch and its Subsidiaries to conduct their
business, taken as a whole, as currently conducted. There is no pending or, to
the knowledge of Arch, threatened condemnation or eminent domain proceeding with
respect to any Arch Owned Real Property. All of the buildings, fixtures and
other improvements located on the Arch Owned Real Property are in good operating
condition and repair in all material respects.
(b) Section 3.24(b) of the Arch Disclosure Schedule sets forth
a list of all leases and similar agreements (the "Arch Leases") for real
property leased, subleased or licensed by Arch or any of its Subsidiaries (the
"Arch Leased Real Property") and the location of the premises subject to the
Arch Leases, except such Arch Leases the absence of which, individually or in
the aggregate, would not materially interfere with the ability of Arch and its
Subsidiaries to conduct their business, taken as a whole, as currently
conducted. Neither Arch nor any of its Subsidiaries nor, to the knowledge of
Arch, any other party to any Arch Lease, is in material default under any Arch
Lease. Each Arch Lease is valid and binding against Arch or any of its
Subsidiaries party thereto and, to the knowledge of Arch, each other party
thereto, and in full force and effect, and all base rent payable by Arch or any
of its Subsidiaries, as tenant thereunder, is current. Arch or one of its
Subsidiaries has a valid leasehold interest in and the right to use or occupy
each such parcel of real property leased by it, free and clear of all liens,
except for any of the following: (i) liens for taxes, assessments or
governmental charges or levies (A) not yet due or (B) delinquent and being
diligently contested in good faith; (ii) statutory liens of carriers,
warehousemen, mechanics, materialmen and the like arising in the ordinary course
of business and for obligations not yet due and payable; (iii) easements,
restrictive covenants, rights of way and other similar imperfections of title
that do not materially adversely affect the use of the property as presently
used; (iv) zoning, building and other similar restrictions that do not
materially adversely affect the use of the property as presently used; (v)
temporary security interests in favor of suppliers of goods for which payment
has not yet been made in the ordinary course of business consistent with past
practice; (vi) liens on the interests of lessors (but not Arch or any of its
Subsidiaries as tenant or lessee); (vii) liens listed in Section 3.24(b) of the
Arch Disclosure Schedule and (viii) other liens or encumbrances that would not,
individually or in the aggregate, reasonably be expected to materially affect
the use of such property subject thereto or affected thereby or otherwise
materially impair business operations at such property.
Section 3.25 State Takeover Statutes.
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The Arch Board has approved the execution of this Agreement and the
Ancillary Agreements to which Arch is or will be a party and authorized and
approved the Merger prior to the execution by Arch of this Agreement and such
Ancillary Agreements and, to the knowledge of Arch, the restrictions on business
combinations contained in Section 203 of the DGCL will not apply to this
Agreement, the Ancillary Agreements, the Transactions or the transactions
contemplated by the Ancillary Agreements. The Arch Board has taken all such
action required to be taken by it to provide that this Agreement, the Ancillary
Agreements, the Transactions and the transactions contemplated by the Ancillary
Agreements shall be exempt from the restrictions on business combinations
contained in any "moratorium," "control share," "fair price" or other
anti-takeover laws or regulations of any state (including Section 203 of the
DGCL).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF METROCALL
Except as disclosed in the Metrocall SEC Reports (as defined in
Section 4.5) or as set forth in the disclosure schedule delivered by Metrocall
to Arch prior to the execution of this Agreement (the "Metrocall Disclosure
Schedule" and, together with the Metrocall Disclosure Schedule, the "Disclosure
Schedules"), Metrocall represents and warrants to Arch that:
Section 4.1 Organization and Qualification.Metrocall is a
corporation duly organized, validly existing and in good standing under the laws
of the state of Delaware and has the requisite corporate power and authority to
own, lease and operate its assets and properties and to carry on its business as
it is now being conducted. Metrocall is qualified to do business and is in good
standing in each jurisdiction in which the properties owned, leased or operated
by it or the nature of the business conducted by it makes such qualification
necessary, except where the failure to be so qualified and in good standing
would not, when taken together with all other such failures, have a Metrocall
Material Adverse Effect (as defined below). True, accurate and complete copies
of Metrocall's certificate of incorporation, as amended (the "Metrocall
Certificate of Incorporation") and bylaws, as amended (the "Metrocall Bylaws"),
in each case as in effect the date hereof, including all amendments thereto,
have been delivered to Arch. Metrocall is not in default in any respect in the
performance, observation or fulfillment of any provision of the Metrocall
Certificate of Incorporation or Metrocall Bylaws. For purposes of this
Agreement, "Metrocall Material Adverse Effect" means any event, development,
change or effect that, individually or when taken together with all other such
events, developments, changes or effects, (x) is or would reasonably be expected
to be materially adverse to the business, operations, condition (financial or
otherwise), assets or liabilities of Metrocall and its Subsidiaries (as defined
in Section 3.3), taken as a whole or (y) prevents Metrocall from complying with
its obligations under this Agreement; provided, that none of the following shall
be taken into account in determining whether there has been or is a Metrocall
Material Adverse Effect: (i) any change in the market price or trading volume of
Metrocall Common Stock; (ii) any failure by Metrocall to meet internal
projections or forecasts or published revenue or earnings predictions; or (iii)
any adverse change or effect (including any litigation, loss of employees,
cancellation of or delay in customer orders, reduction in revenues or income or
disruption of business relationships) arising from or attributable or relating
to (1) the announcement or pendency of the Transactions, (2) conditions
generally affecting the industry or industry sector in which Metrocall or any of
its Subsidiaries participates, the U.S. economy as a whole or any foreign
economy in any location where Metrocall or any of its Subsidiaries has
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material operations or sales (which changes in each case do not
disproportionately and adversely affect Metrocall or its Subsidiaries in any
material respect), (3) legal, accounting, investment banking or other fees or
expenses incurred solely in connection with the Transactions, (4) the payment of
any amounts due to, or the provision of any other benefits to, any officers or
employees under the terms of employment contracts, non-competition agreements,
employee benefit plans, severance arrangements or other arrangements in each
case that are in existence as of the date of this Agreement and, on or prior to
the date of this Agreement, were made available or disclosed to Arch, (5)
compliance with the terms of, or the taking of any action required by, this
Agreement, (6) the taking of any action expressly approved or consented to by
Arch, (7) any change in accounting requirements or principles or any change in
generally applicable laws or the interpretation thereof, or (8) any action
required to be taken under generally applicable laws or agreements.
Section 4.2 Capitalization.(a) The authorized capital stock of
Metrocall consists of 7,500,000 shares of Metrocall Common Stock, and 8,500,000
shares of Series A Preferred Stock, par value $0.01 per share ("Metrocall
Preferred Stock"). As of the date hereof, (i) 5,462,285 shares of Metrocall
Common Stock were issued and outstanding, all of which were validly issued and
fully paid, nonassessable and free of preemptive rights, (ii) 2,402,776 shares
of Metrocall Preferred Stock were issued and outstanding, all of which were
validly issued and fully paid, nonassessable and free of preemptive rights,
(iii) 404,000 shares of Metrocall Common Stock were reserved for issuance upon
exercise of options issued and outstanding pursuant to the Metrocall 2003 Stock
Option Plan (the "Metrocall Option Plan"), (iv) 125,000 shares of Metrocall
Common Stock were reserved for issuance upon exercise of outstanding warrants
and options issued other than under the Metrocall Option Plan, and (v) 38,840
shares of Metrocall Common Stock and 6,170 shares of Metrocall Preferred Stock
were reserved for issuance under the Second Amended Joint Plan of Reorganization
under Chapter 11 of the Bankruptcy Code, dated June 18, 2002 (the "Metrocall
Plan of Reorganization"), to satisfy certain unpaid claims in connection with
Metrocall's emergence from Chapter 11 bankruptcy proceedings on October 8, 2002
(the shares of Metrocall Common Stock referred to in the foregoing clauses (i) -
(v), collectively, the "Metrocall Fully Diluted Shares"). Metrocall has filed
with the SEC or previously made available to Arch (i) a complete and correct
copy of the Metrocall Option Plan, (ii) a complete and correct list setting
forth the weighted average exercise price for all options outstanding as of the
date hereof and (iii) complete and correct copies of the relevant written
agreements, including amendments thereto, evidencing the grant of such options.
(b) Except as set forth in subsection (a) above or as
otherwise contemplated by this Agreement, there are no outstanding
subscriptions, options, calls, contracts, commitments, restrictions,
arrangements, rights or warrants, including any right of conversion or exchange
under any outstanding security, instrument or other agreement and also including
any rights plan or other anti-takeover agreement, obligating Metrocall or any of
its Subsidiaries to issue, deliver, sell, transfer, redeem, repurchase or
otherwise acquire or cause to be issued, delivered, sold, transferred, redeemed,
repurchased or otherwise acquired, any shares of the capital stock of Metrocall
or obligating Metrocall or any of its Subsidiaries to grant, extend or enter
into any such agreement or commitment. There are no voting trusts, proxies or
other agreements or understandings to which Metrocall or any of its Subsidiaries
is a party or is bound with respect to the voting of any shares of capital stock
of Metrocall. The Metrocall Option Plan does not (i) prohibit the assumption of
such Metrocall Option Plan (and the options granted
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thereunder) by Parent and the substitution of Parent Common Stock as provided in
Section 2.1(b) of this Agreement and does not require the consent or approval of
the holders of the outstanding options under the Metrocall Option Plan, the
stockholders of Metrocall, or any other Person in order to effect such
assumption and substitution or (ii) require the acceleration of the exercise
schedule or vesting provisions currently in effect for such options.
Section 4.3 Subsidiaries.(a) Identified in Section 4.3 of the
Metrocall Disclosure Schedule is each direct and indirect Subsidiary of
Metrocall. Other than such Subsidiaries, Metrocall does not, directly or
indirectly, own any equity or similar interest in or any interest convertible,
exchangeable or exercisable for, any equity or similar interest in, any
corporation, partnership, limited liability company, joint venture or other
entity. Each such Subsidiary (i) is duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation or organization and
has the requisite power and authority to own, lease and operate its assets and
properties and to carry on its business as it is now being conducted; and (ii)
is qualified to do business, and is in good standing, in each jurisdiction in
which the properties owned, leased or operated by it or the nature of the
business conducted by it makes such qualification necessary, except in all cases
where the failure to be so qualified and in good standing would not, when taken
together with all such other failures, result in a Metrocall Material Adverse
Effect. All of the outstanding shares of capital stock or other equity interests
of each Subsidiary of Metrocall are validly issued, fully paid, nonassessable
and free of preemptive rights, and are owned directly or indirectly by
Metrocall, free and clear of any liens, claims or encumbrances. There are no
subscriptions, options, warrants, rights, calls, contracts, voting trusts,
proxies or other commitments, understandings, restrictions or arrangements
relating to the issuance, sale, voting, transfer, ownership or other rights with
respect to any shares of capital stock or other equity interests of any
Subsidiary of Metrocall, including any right of conversion or exchange under any
outstanding security, instrument or agreement. Metrocall has neither agreed nor
is obligated to make nor be bound by any written, oral or other agreement,
contract, subcontract, lease, binding understanding, instrument, note, option,
warranty, purchase order, license, sublicense, insurance policy, benefit plan,
commitment or understanding of any nature, as of the date hereof or as may
hereinafter be in effect (other than as set forth in this Agreement) under which
it may become obligated to make any future investment in, or capital
contribution to, any other Person.
(b) The authorized capital stock of Parent consists of one
hundred shares of common stock, par value $.0001 per share, of which 100 shares
are issued and outstanding, all of which issued and outstanding shares are held
of record and beneficially by Metrocall. The authorized capital stock of each of
Arch Acquiring Sub and Metrocall Acquiring Sub consists of one hundred shares of
common stock, par value $.01 per share, of which 100 shares are issued and
outstanding, all of which issued and outstanding shares are held of record and
beneficially by Parent. None of Parent, Arch Acquiring Sub or Metrocall
Acquiring Sub has conducted any activities or incurred any liabilities other
than in connection with its organization and the negotiation and execution of
this Agreement and the consummation of the transactions contemplated hereby.
Parent has no subsidiaries other than Arch Acquiring Sub and Metrocall Acquiring
Sub, and neither Arch Acquiring Sub nor Metrocall Acquiring Sub has any
subsidiaries.
Section 4.4 Authority; Non-Contravention; Approvals.
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(a) Metrocall has full corporate power and authority to enter into
this Agreement and the Ancillary Agreements to which Metrocall is or will be a
party and, subject to the Metrocall Stockholders' Approval (as defined in
Section 4.4(d)) and the Metrocall Required Statutory Approvals (as defined in
Section 4.4(c)), to consummate the Transactions. This Agreement and the
Ancillary Agreements to which Metrocall is or will be a party have been duly and
validly approved by the Metrocall Board and no other corporate proceeding on the
part of Metrocall is necessary to authorize the execution and delivery of this
Agreement or such Ancillary Agreements and, except for the Metrocall
Stockholders' Approval, the consummation by Metrocall of the Transactions. This
Agreement and the Ancillary Agreements to which Metrocall is or will be a party
have been duly executed and delivered by Metrocall and, assuming the due
authorization, execution and delivery by the other parties hereto and thereto,
constitute valid and legally binding agreements of Metrocall, enforceable
against it in accordance with their terms, except as such enforceability may be
subject to the effects of bankruptcy, insolvency, reorganization, moratorium and
other laws relating to or affecting the rights of creditors and of general
principles of equity.
(b) The execution and delivery of this Agreement and the Ancillary
Agreements to which Metrocall is or will be a party by Metrocall do not, and the
consummation of the Transactions will not, violate, conflict with or result in a
breach of any provision of, or constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default) under, or result in
the termination of, or accelerate obligations of Metrocall under, or result in a
right of any other Person to terminate or to accelerate obligations of Metrocall
under, or result in the creation of any lien, security interest, charge or
encumbrance upon any of the properties or assets of Metrocall or any of its
Subsidiaries under, or result in any penalty or modification or otherwise
affect, any of the terms, conditions or provisions of, (i) the respective
charters or by-laws of Metrocall or any of its Subsidiaries, (ii) other than as
provided in Section 4.4(c), and subject to obtaining (prior to the Effective
Time) the Metrocall Stockholder's Approval, any statute, law, ordinance, rule,
regulation, judgment, decree, order, injunction, writ, permit or license of any
court or governmental authority applicable to Metrocall or any of its
Subsidiaries or any of their respective properties or assets or (iii) any note,
bond, mortgage, indenture, deed of trust, license, franchise, permit,
concession, contract, lease or other instrument, obligation or agreement of any
kind to which Metrocall or any of its Subsidiaries is now a party or by which
Metrocall or any of its Subsidiaries or any of their respective properties or
assets may be bound or affected. Excluded from the foregoing sentences of this
paragraph (b), insofar as they apply to the terms, conditions or provisions
described in clauses (ii) and (iii) of the first sentence of this paragraph (b)
(and whether resulting from such execution and delivery or consummation), are
such violations, conflicts, breaches, defaults, terminations, accelerations or
creations of liens, security interests, charges or encumbrances that would not,
individually or in the aggregate, have a Metrocall Material Adverse Effect.
(c) Except for (i) the filing of the Registration Statement and
Joint Proxy Statement/Prospectus with the SEC pursuant to the Exchange Act and
the Securities Act, and the declaration of the effectiveness thereof by the SEC,
(ii) the making of the Merger Filing, (iii) any required filings with or
approvals from The Nasdaq SmallCap Market ("Nasdaq SmallCap"), (iv) all filings
and approvals required to be made with or received from a governmental agency,
and the termination or expiration of any waiting periods imposed, pursuant to
the Antitrust Laws, (v) all filings and approvals required to be made with or
received from the FCC pursuant to the
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Communications Act, the FCC Regulations or the Telecommunications Laws, (vi) all
filings and approvals required to be made or received in connection with any
state securities or "blue sky" laws, and (vii) all other filings and approvals
required to be made with or received from any local, state or Federal
governmental authorities required for a change in ownership of transmission
sites (the filings and approvals referred to in clauses (i) through (vii) are
collectively referred to as the "Metrocall Required Statutory Approvals"), no
declaration, filing or registration with, or notice to, or authorization,
consent, waiver or approval of, any governmental or regulatory body or authority
is necessary for the execution and delivery of this Agreement by Metrocall or
the consummation by Metrocall of the Transactions, other than such declarations,
filings, registrations, notices, authorizations, consents, waivers or approvals
which, if not made or obtained, as the case may be, would not, individually or
in the aggregate, have a Metrocall Material Adverse Effect.
(d) The only vote of the holders of any class or series of capital
stock of Metrocall that will be necessary to consummate the Metrocall Merger and
the other Transactions is the approval of this Agreement by the holders of a
majority of the voting power of the outstanding shares of Arch Common Stock on
the record date ("Metrocall Stockholders' Approval").
Section 4.5 Reports and Financial Statements.Since October 8, 2002,
Metrocall has filed with the SEC all forms, statements, reports and documents
(including all exhibits, post-effective amendments and supplements thereto)
required to be filed by it under each of the Securities Act, the Exchange Act
and the respective rules and regulations promulgated thereunder, each of which,
as amended if applicable, complied when filed in all material respects with all
applicable requirements of the Securities Act, the Exchange Act and the rules
and regulations promulgated thereunder. Other than Parent, Arch Acquiring Sub
and Metrocall Acquiring Sub with respect to the Transactions, no Subsidiary of
Metrocall is required to file any form, report or other document with the SEC.
Metrocall has previously made available to Arch, via its XXXXX filings where
available, copies (including all exhibits, post-effective amendments and
supplements thereto) of its (a) Annual Report on Form 10-K for the fiscal year
ended December 31, 2003 (the "Metrocall 10-K") as filed with the SEC, (b) proxy
and information statements relating to (i) all meetings of its stockholders
(whether annual or special) and (ii) actions by written consent in lieu of a
stockholders' meeting, in each case from October 8, 2002 until the date hereof,
and (c) all other reports, including annual reports, quarterly reports, and
registration statements filed by Metrocall with the SEC since October 8, 2002
(the documents referred to in clauses (a), (b) and (c) are collectively referred
to as the "Metrocall SEC Reports"). As of their respective dates, the Metrocall
SEC Reports did not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. The audited financial statements of Metrocall
included in the Metrocall 10-K (collectively, the "Metrocall Financial
Statements"), have been prepared from, and are in accordance with, the books and
records of Metrocall and its Subsidiaries, comply in all material respects with
applicable accounting requirements and with the published rules and regulations
of the SEC with respect thereto, have been prepared in accordance with GAAP
(except as may be indicated therein or in the notes thereto) and fairly present,
in conformity with GAAP, the consolidated financial position of Metrocall and
its Subsidiaries as of the dates thereof and the
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consolidated results of their operations and cash flows and changes in financial
position, if any for the periods then ended.
Section 4.6 Employee Benefit Plans; Labor Matters; No Parachute
Payments.
(a) Section 4.6(a) of the Metrocall Disclosure Schedule lists all
material employee benefit plans (as defined in Section 3(3) of ERISA) and all
material bonus, stock option, stock purchase, stock appreciation rights, phantom
stock, restricted stock, profit sharing, cash or stock based incentive, deferred
compensation, retiree medical or life insurance, supplemental, retirement,
severance, retention, employment, change in control, vacation, unemployment
compensation, workers compensation or other benefit plans, programs or
arrangements, whether legally enforceable or not and whether written or oral, to
which Metrocall or any of its Subsidiaries is a party, with respect to which
Metrocall or any of its Subsidiaries has any obligation or which are maintained,
contributed to or sponsored by Metrocall or any of its Subsidiaries for the
benefit of any current or former employee, officer or director of Metrocall or
any of its Subsidiaries (collectively, the "Metrocall Benefit Plans"). With
respect to each Metrocall Benefit Plan, Metrocall has delivered, or prior to
Closing will deliver, or make available to Arch a true, complete and correct
copy of (i) such Metrocall Benefit Plan and all amendments thereto and the most
recent summary plan description related to such Metrocall Benefit Plan, if a
summary plan description is required therefor, (ii) each trust agreement or
other funding arrangement relating to such Metrocall Benefit Plan, (iii) the
most recent annual report (Form 5500) filed with the IRS with respect to such
Metrocall Benefit Plan, (iv) the most recent actuarial report or financial
statement relating to such Metrocall Benefit Plan, (v) the most recent
determination letter issued by the IRS with respect to such Metrocall Benefit
Plan, if it is qualified under Section 401(a) of the Code, and (vi) a
description setting forth the amount of any material liability of Metrocall or
its Subsidiaries as of the Closing Date for payments more than 30 days past due.
Neither Metrocall nor any of its Subsidiaries has any express or implied
commitment, whether legally enforceable or not, (i) to create, incur liability
with respect to or cause to exist any other employee benefit plan, program or
arrangement, (ii) to enter into any contract or agreement to provide
compensation or benefits to any individual or (iii) to modify, change or
terminate any Metrocall Benefit Plan, other than with respect to a modification,
change or termination required by ERISA, the Code or other applicable law.
(b) Neither Metrocall nor any ERISA Affiliate of Metrocall
contributes to, has contributed to or is required to contribute to a
Multiemployer Plan or a Multiple Employer Plan. Except (i) as required by
Section 4980B of the Code or (ii) for benefits, the full cost of which is borne
by the employee, former employee, retired employee or beneficiary, none of the
Metrocall Benefit Plans provides for or promises retiree medical, disability or
life insurance benefits to any current or former employee, officer or director
of Metrocall or any of its Subsidiaries. Neither Metrocall nor any ERISA
Affiliate of Metrocall has incurred any withdrawal liability with respect to a
Multiemployer Plan under Title IV of ERISA and no event or condition has
occurred which would be expected to cause Metrocall or any ERISA Affiliate of
Metrocall to incur any such withdrawal liability.
(c) Except as would not, individually or in the aggregate, have a
Metrocall Material Adverse Effect, (i) Metrocall and its Subsidiaries have
complied, and are now in compliance, with all provisions of all laws and
regulations applicable to Metrocall Benefit Plans
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and each Metrocall Benefit Plan has been administered in all material respects
in accordance with its terms, (ii) all contributions required to be made under
the terms of any of the Metrocall Benefit Plans as of the date of this Agreement
have been timely made or have been reflected on the most recent consolidated
balance sheet filed or incorporated by reference in the Metrocall SEC Reports
prior to the date of this Agreement, (iii) no event has occurred and, to the
knowledge of Metrocall, there exists no condition or set of circumstances in
connection with which Metrocall or any of its Subsidiaries could be subject to
any liability under the terms of such Metrocall Benefit Plans, ERISA, the Code
or any other applicable law (other than a claim for benefits in the ordinary
course) and (iv) no legal action, proceeding, suit or claim is pending or, to
the knowledge of Metrocall, threatened with respect to any Metrocall Benefit
Plan or its assets (other than claims for benefits in the ordinary course).
(d) Except as would not have, individually or in the aggregate, a
Metrocall Material Adverse Effect: (i) each Metrocall Benefit Plan which is
intended to be qualified under Section 401(a) of the Code or Section 401(k) of
the Code has received a favorable determination letter from the IRS through the
Economic Growth and Tax Relief Reconciliation Act of 2001 that it is so
qualified and each trust established in connection with any Metrocall Benefit
Plan which is intended to be exempt from federal income taxation under Section
501(a) of the Code is so exempt, and no fact or event has occurred since the
date of such determination letter from the IRS to adversely affect the qualified
status of any such Metrocall Benefit Plan or the exempt status of any such
trust; (ii) each trust maintained or contributed to by Metrocall or any of its
Subsidiaries which is intended to be qualified as a voluntary employees'
beneficiary association and which is intended to be exempt from federal income
taxation under Section 501(c)(9) of the Code has received a favorable
determination letter from the IRS that it is so qualified and so exempt, and no
fact or event has occurred since the date of such determination by the IRS to
adversely affect such qualified or exempt status; (iii) there has been no
prohibited transaction (within the meaning of Section 406 of ERISA or Section
4975 of the Code) with respect to any Metrocall Benefit Plan; (iv) neither
Metrocall nor any of its Subsidiaries has incurred any liability for any penalty
or tax arising under Section 4972, 4980, 4980B or 6652 of the Code or any
liability under Section 502 of ERISA, and, to the knowledge of Metrocall, no
fact or event exists which could give rise to any such liability; (v) no
complete or partial termination has occurred within the five years preceding the
date hereof with respect to any Metrocall Benefit Plan; and (vi) no Metrocall
Benefit Plan is subject to Title IV of ERISA.
(e) Neither Metrocall nor any of its Subsidiaries maintains or is
required to contribute to any plan, fund or similar program established or
maintained by Metrocall or any of its Subsidiaries outside the United States of
America primarily for the benefit of employees of Metrocall or any of its
Subsidiaries residing outside the United States of America, which fund or
similar program provides, or results in, retirement income, a deferral of income
in contemplation of retirement or payments to be made upon termination of
employment, and which plan is not subject to ERISA or the Code to which
Metrocall or any of its Subsidiaries would have any liability.
(f) Any terminated benefit plan maintained, contributed to or
sponsored by Metrocall or any of its Subsidiaries has been terminated in
accordance with applicable laws, including ERISA, and all benefits under any
such terminated benefit plan have been made in accordance with the terms of such
benefit plan.
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(g) Neither Metrocall nor any of its Subsidiaries is a party to or
otherwise bound by any collective bargaining or other labor union contract
applicable to Persons employed by Metrocall or any of its Subsidiaries and no
collective bargaining agreement is being negotiated by Metrocall or any of its
Subsidiaries. As of the date of this Agreement, there is no union currently
certified and no union representation question or any organizational activity
threatened with respect to Metrocall or any of its Subsidiaries. As of the date
of this Agreement, there is no labor dispute, strike, walkout, lockout or work
stoppage or slowdown against Metrocall or any of its Subsidiaries pending or, to
the knowledge of Metrocall, threatened which may interfere with the respective
business activities of Metrocall and its Subsidiaries, except where such
dispute, strike or work stoppage would not, individually or in the aggregate,
have a Metrocall Material Adverse Effect. As of the date of this Agreement, to
the knowledge of Metrocall, there is no charge or complaint against Metrocall or
any of its Subsidiaries pending before the National Labor Relations Board or any
comparable governmental authority pending or threatened in writing, except where
such unfair labor practices, charges or complaints would not, individually or in
the aggregate, have a Metrocall Material Adverse Effect. There is no suit,
claim, action, proceeding or, to the knowledge of Metrocall, threatened against
Metrocall, any of its Subsidiaries, any directors, officers, fiduciaries or
service providers of Metrocall or between Metrocall or any of its Subsidiaries
any employee, former employee, or representative of current or former employees,
that would be expected to have a Metrocall Material Adverse Effect.
(h) Metrocall has delivered or made available to Arch true, complete
and correct copies of (i) all employment agreements with officers and employees
of Metrocall and each of its Subsidiaries with annual compensation in excess of
$100,000 (including written summaries of oral agreements with respect to (x)
increases in compensation, (y) severance or (z) other restrictions on the
at-will status of any employment arrangement) and all consulting agreements of
Metrocall and each of its Subsidiaries providing for annual compensation in
excess of $100,000, (ii) all severance plans, agreements, programs and policies
of Metrocall and each of its Subsidiaries with or relating to their respective
employees or consultants, and (iii) all plans, programs, agreements and other
arrangements of Metrocall and each of its Subsidiaries with or relating to their
respective employees or consultants which contain "change of control"
provisions.
(i) No current or former employee, officer or director of Metrocall
or its Subsidiaries will be entitled to any additional benefits or any
acceleration of the time of payment or vesting of any benefits under any
Metrocall Benefit Plan, policy, arrangement, agreement, trust or loan as a
result of the Transactions. No amount payable, or economic benefit provided, by
Metrocall or its Subsidiaries (including any acceleration of the time of payment
or vesting of any benefit) could be considered an "excess parachute payment"
under Section 280G of the Code. No Person is entitled to receive any additional
payment from Metrocall or its Subsidiaries or any other Person in the event that
the excise tax of Section 4999 of the Code is imposed on such Person.
(j) Neither the Metrocall nor any of its Subsidiaries has
effectuated (i) a "plant closing" (as defined in the WARN Act) affecting any
site of employment or one or more facilities or operating units within any site
of employment of Metrocall or any of its Subsidiaries; or (ii) a "mass layoff"
(as defined in the WARN Act) affecting any site of employment or facility of
Metrocall or any of its Subsidiaries; nor has Metrocall and/or any of its
Subsidiaries been
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engaged in layoffs or employment terminations sufficient in number to trigger
application of any similar state or local law; and none of the affected
employees has suffered an "employment loss" (as defined in the WARN Act) since
ninety days prior to the date hereof. Neither Metrocall nor any of its
Subsidiaries has incurred any material liability under the WARN Act or similar
state laws which remains unpaid or unsatisfied.
(k) Except as would not have, individually or in the aggregate, a
Metrocall Material Adverse Effect, (i) Metrocall and its Subsidiaries are in
compliance with the terms and provisions of the Immigration Reform and Control
Act of 1986, as amended, and all related regulations promulgated thereunder;
(ii) Metrocall and its Subsidiaries are in compliance with all laws governing
the employment of its employees, including, but not limited to, all such
federal, state, and local laws relating to wages, hours, collective bargaining,
discrimination, retaliation, civil rights, safety and health, workers'
compensation and the collection and payment of withholding and/or Social
Security taxes and similar taxes; (iii) no employee or independent contractor
has filed a complaint for which Metrocall has received notice and Metrocall has
not conducted any internal investigation regarding conduct that may constitute a
violation of any federal, state or local law governing employment; (iv) since
December 31, 2003, to the knowledge of Metrocall as of the date hereof, no
officer, manager or other key employee of Metrocall or any of its Subsidiaries
has received, and no officer has given, notice to terminate his employment; (v)
there are no officers or employees of Metrocall or any of its Subsidiaries who
are on secondment, maternity leave or absent on grounds of disability, military
or other leave of absence (other than normal holidays or absence due to
illness); (vi) Metrocall and its Subsidiaries have complied with their
obligations to inform and consult with trade unions and other representatives of
workers and to send notices to relevant governmental officials; (vii) Metrocall
and its Subsidiaries have maintained adequate and suitable records regarding the
service of their directors, officers and employees and such records comply with
requirements of data protection legislation regarding the processing and storage
of personal data on individuals; (viii) there are no occupational health and
safety claims against Metrocall or any of its Subsidiaries; and (ix) there are
no complaints, charges, or claims against Metrocall or any of its Subsidiaries
pending, or, to Metrocall's knowledge, threatened in writing to be brought or
filed, and with any authority or arbitrator based on, arising out of, in
connection with, or otherwise relating to the employment or termination of
employment of any individual by Metrocall or any of its Subsidiaries.
(l) All salaries and wages and other benefits, bonuses and
commissions of all directors, officers or employees of Metrocall and its
Subsidiaries have, to the knowledge of Metrocall, to the extent due, been paid
or discharged in full, including, but not limited to, all payments due for
calendar year 2003 bonuses.
(m) Neither Metrocall nor any of its Subsidiaries has extended a
loan to any employee for which amounts are outstanding, except for advances in
respect of travel and entertainment expenses in the ordinary course of business.
Since December 31, 2002, no such loans have been forgiven.
(n) No Metrocall Benefit Plan is, or within the last three (3) years
has been, the subject of examination or audit by any governmental entity or
agency.
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Section 4.7 Certain Tax Matters. Neither Metrocall nor, to the
knowledge of Metrocall, any of its affiliates has taken, or agreed to take, or
intends to take, any action that would reasonably be expected to prevent the
Merger from qualifying as a transfer by the holders of Metrocall Common Stock
and Arch Common Stock of all such shares of such stock (other than Appraisal
Shares and shares of such stock held by either Metrocall or Arch) to Parent in
exchange for all the issued and outstanding shares of Parent Common Stock and,
in the case of holders of Metrocall Common Stock, cash, which shares of such
stock shall be the only shares of such stock issued and outstanding on the
Closing Date, all in accordance with and governed by Section 351 of the Code.
Metrocall is not aware of any agreement, plan or other circumstances that would
reasonably be expected to prevent the Merger from qualifying as an exchange
described in Section 351 of the Code.
Section 4.8 Contracts; Debt Instruments. There is no loan or credit
agreement, note, bond, mortgage, indenture or lease, or any other contract,
license, or agreement to which either Metrocall or any of its respective
Subsidiaries is a party or by which any of them or any of their respective
properties or assets is bound that is material to the business, financial
condition or results of operations of Metrocall and its Subsidiaries taken as a
whole (collectively, the "Metrocall Material Contracts") that has not been
disclosed in the Metrocall SEC Reports. All Metrocall Material Contracts are in
full force and effect and are the valid and legally binding obligations of the
parties thereto and are enforceable in accordance with their respective terms.
Neither Metrocall nor any Subsidiary of Metrocall nor, to the knowledge of
Metrocall, any other party to any Metrocall Material Contract, is in violation
of or in default under (nor does there exist any condition which with the
passage of time or the giving of notice would reasonably be expected to cause
such a violation of or default under) any Metrocall Material Contract, except
for violations or defaults that would not have, individually or in the
aggregate, a Metrocall Material Adverse Effect. No party to any Metrocall
Material Contract has given notice of any action to terminate, cancel, rescind
or procure a judicial reformation thereof, other than notices of matters which
have been resolved in a manner not materially adverse to Metrocall. Set forth in
Section 4.8 of the Metrocall Disclosure Schedule is a description of any
material changes to the amount and terms of the indebtedness of Metrocall and
its Subsidiaries as described in the notes to the Metrocall Financial
Statements.
Section 4.9 Litigation. There is no suit, claim, charge, action,
proceeding, arbitration or investigation pending or, to the knowledge of
Metrocall, threatened against Metrocall or any Subsidiary of Metrocall or any of
their respective officers or directors in their capacity as such before any
governmental authority that (i) individually (or together with any series of
suits, claims, charges, actions, proceedings, arbitrations or investigations
arising from substantially similar facts) would reasonably be expected to result
in liability to Metrocall and its Subsidiaries, collectively, of more than
$100,000 or materially delay the Closing or (ii) would have, individually or in
the aggregate, a Metrocall Material Adverse Effect, and, to the knowledge of
Metrocall, there are no existing facts or circumstances that would reasonably be
expected to result in such a suit, claim, charge, action, proceeding,
arbitration or investigation. Metrocall is not aware of any facts or
circumstances which would reasonably be expected to result in the denial of
insurance coverage under policies issued to Metrocall and its Subsidiaries in
respect of such suits, claims, charges, actions, proceedings, arbitrations and
investigations for which Metrocall has a reasonable expectation of obtaining
insurance coverage, except in any case as would not have, individually or in the
aggregate, a Metrocall Material Adverse Effect.
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Neither Metrocall nor any Subsidiary of Metrocall is subject to any outstanding
order, writ, injunction or decree which would have, individually or in the
aggregate, a Metrocall Material Adverse Effect.
Section 4.10 Insurance. All material insurance policies of Metrocall
and its Subsidiaries, including those policies set forth in Section 4.10 of the
Metrocall Disclosure Schedule, are in full force and effect. Neither Metrocall
nor any of its Subsidiaries is in breach or default thereunder (including with
respect to the payment of premiums or the giving of notices), and Metrocall does
not know of any occurrence or any event which (with notice or the lapse of time
or both) would constitute such a breach or default or permit termination,
modification or acceleration under the policy, except for such breaches or
defaults which, individually or in the aggregate, would not have a Metrocall
Material Adverse Effect.
Section 4.11 Intellectual Property. Except as would not, individually
or in the aggregate have a Metrocall Material Adverse Effect (i) Metrocall and
its Subsidiaries own or possess adequate licenses or other valid rights to use
all patents, patent applications, patent rights, trademarks, trademark
registrations, trademark rights, trade names, trade dress, trade name rights,
copyrights and copyright registrations and applications, copyright rights,
service marks, service xxxx registrations, trade secrets, applications for
trademarks and for service marks, know-how, other intellectual property rights
and other proprietary rights and information used or held for use in connection
with the respective businesses of Metrocall and its Subsidiaries as currently
conducted (collectively, the "Metrocall IP"), free and clear of all liens, and
(ii) Metrocall is unaware of any assertion or claim challenging the ownership,
use or validity of any of the foregoing. As of the date of this Agreement,
Section 4.11 of the Metrocall Disclosure Schedule contains a complete list of
all material Metrocall IP owned by Metrocall and its Subsidiaries that has been
registered or with respect to which an application for registration or patent
application has been filed. The written agreements pursuant to which any
Metrocall IP has been licensed to Metrocall or any of its Subsidiaries, are
valid and binding obligations of Metrocall or such Subsidiary and, to the
knowledge of Metrocall, each other party thereto, enforceable in accordance with
their terms, and there are no material breaches or defaults thereunder. To the
knowledge of Metrocall, the conduct of the respective businesses of Metrocall
and its Subsidiaries as currently conducted does not infringe upon any patents,
patent applications, patent rights, trademarks, trademark registrations,
trademark rights, trade names, trade dress, trade name rights, copyrights and
copyright registrations and applications, copyright rights, service marks,
service xxxx registrations, trade secrets, applications for trademarks and for
service marks, know-how, other intellectual property rights or other proprietary
rights or information of any third party that would have, individually or in the
aggregate, a Metrocall Material Adverse Effect. To the knowledge of Metrocall,
there are no infringements of any proprietary rights owned by or licensed by or
to Metrocall or any Subsidiary of Metrocall, except as would not have an Arch
Material Adverse Effect.
Section 4.12 Taxes. Except for such matters that would not have,
individually or in the aggregate, a Metrocall Material Adverse Effect, (i)
Metrocall and each of its Subsidiaries has timely filed or shall timely file all
returns and reports required to be filed by it with any taxing authority, taking
into account any extension of time to file granted to or obtained on behalf of
Metrocall and its Subsidiaries, (ii) all taxes shown to be payable on such
returns or reports have been or will be paid, (iii) as of the date hereof, no
deficiencies for any amount of tax
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have been asserted or assessed by any taxing authority against Metrocall or any
Subsidiary of Metrocall that are not adequately reserved for, and (iv) the
Metrocall Financial Statements reflect an adequate reserve in accordance with
GAAP for all accrued taxes not yet payable by Metrocall and its Subsidiaries for
all taxable periods and portions thereof through the date of such financial
statements.
Section 4.13 Interested Party Transactions. Since December 31, 2002, no
executive officer, director or stockholder of Metrocall or any of its
Subsidiaries has engaged in any business dealings with Metrocall or any of its
Subsidiaries (other than any such business dealings that would not required to
be disclosed in a proxy statement satisfying the requirements of Regulation 14A
promulgated under the Exchange Act if filed on the date hereof).
Section 4.14 Absence of Undisclosed Liabilities. Neither Metrocall nor
any of its Subsidiaries has as of the date hereof any liabilities or obligations
(whether absolute, accrued, contingent or otherwise) of any nature, except
liabilities, obligations or contingencies (a) which are adequately accrued or
reserved against in the Metrocall Financial Statements or reflected in the notes
thereto, (b) which were incurred in the ordinary course of business and
consistent with past practices since December 31, 2003, (c) which would not,
individually or in the aggregate, have a Metrocall Material Adverse Effect or
(d) which are of a nature not required to be reflected in the consolidated
financial statements of Metrocall and its Subsidiaries, including the notes
thereto, prepared in accordance with GAAP consistently applied.
Section 4.15 Absence of Certain Changes. Except as contemplated in this
Agreement, since December 31, 2003, (a) Metrocall and each of its Subsidiaries
has conducted its business in all material respects in the ordinary course
consistent with past practices, (b) there has not been any change or
development, or combination of changes or developments that, individually or in
the aggregate, would have a Metrocall Material Adverse Effect, (c) there has not
been any declaration, setting aside or payment of any dividend or other
distribution with respect to any shares of capital stock of Metrocall or any of
its Subsidiaries, or any repurchase, redemption or other acquisition by
Metrocall or any of its Subsidiaries of any outstanding shares of capital stock
or other securities of, or other ownership interests in, Metrocall or any such
Subsidiary, (d) there has not been any amendment of any term of any outstanding
security of Metrocall or any of its Subsidiaries, (e) there has not been any
change in any method of accounting or accounting practice by Metrocall or any of
its Subsidiaries, except for any such change required by reason of a concurrent
change in GAAP and (f) there has not been any negotiation or agreement by
Metrocall to do any of such things (other than as relate to the Transactions).
Section 4.16 Registration Statement and Proxy Statement. None of the
information to be supplied by Metrocall for inclusion in (i) the Registration
Statement or (ii) the Joint Proxy Statement/Prospectus will, in the case of the
Joint Proxy Statement/Prospectus at the time of the mailing of the Joint Proxy
Statement/Prospectus, and at the time of the meetings of stockholders of
Metrocall and Arch to be held in connection with the Transactions, or, in the
case of the Registration Statement, as amended or supplemented, at the time it
becomes effective and at the time of such meetings of the stockholders of Arch
and Metrocall, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which
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they are made, not misleading. The Joint Proxy Statement/Prospectus will, as of
its mailing date, comply as to form in all material respects with all applicable
laws, including the provisions of the Securities Act and the Exchange Act and
the rules and regulations promulgated thereunder, except that no representation
is made by Metrocall with respect to information supplied by Arch or the
stockholders of Arch for inclusion in the Joint Proxy Statement/Prospectus.
Section 4.17 Reorganization. None of Metrocall or its Subsidiaries has
willfully taken or agreed to take, nor does it intend to take, any action that
would prevent the Merger from qualifying as an exchange described in Section 351
of the Code.
Section 4.18 Board Approval. Each of the Metrocall Board and the
Special Transactions Committee of the Metrocall Board has unanimously (a)
declared the advisability of and approved this Agreement and the Merger, (b)
determined that the Merger is in the best interests of the stockholders of
Metrocall and is on terms that are fair to such stockholders and (c) recommended
that the stockholders of Metrocall adopt and approve this Agreement and the
Merger.
Section 4.19 Brokers and Finders. Metrocall has not entered into any
contract, arrangement or understanding with any Person or firm which may result
in the obligation of Metrocall or Parent to pay any finder's fees, brokerage or
agent commissions or other like payments in connection with the Transactions,
except Lazard Freres & Co. LLC ("Metrocall Financial Advisor"), whose fees and
expenses will be paid by Metrocall in accordance with Metrocall's agreement with
Metrocall Financial Advisor, based upon arrangements made by or on behalf of
Metrocall and previously disclosed to Arch.
Section 4.20 Opinion of Financial Advisor. Metrocall Financial Advisor
has rendered an opinion to the Metrocall Board to the effect that, as of the
date hereof, the Metrocall Merger Consideration is fair to the holders of
Metrocall Common Stock from a financial point of view; it being understood and
acknowledged by Metrocall that such opinion has been rendered for the benefit of
the Metrocall Board and is not intended to, and may not, be relied upon by Arch,
its affiliates or their respective Subsidiaries. Metrocall Financial Advisor has
authorized the inclusion of its opinion in the Joint Proxy Statement/Prospectus.
Section 4.21 Hazardous Substances and Hazardous Waste.
To the knowledge of Metrocall:
(a) Except as would not have a Metrocall Material Adverse Effect,
(i) there is not now, nor has there ever been, any disposal, Release or
threatened Release of Hazardous Material on, from or under properties now or
ever owned or leased by or to Metrocall or its Subsidiaries (the "Metrocall
Properties"); (ii) there has not been generated by or on behalf of Metrocall or
its Subsidiaries any Hazardous Material; and (iii) no material Hazardous
Material has been disposed of or allowed to be disposed of by Metrocall or its
Subsidiaries, by any other party, on or off any of the Metrocall Properties
during the period that Metrocall or its Subsidiaries owned or leased the
property which may give rise under applicable Environmental Law to a clean-up
responsibility, personal injury liability or property damage claim against
Metrocall or its Subsidiaries or Metrocall or its Subsidiaries being named a
responsible party for
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any such clean-up costs, personal injuries or property damage or create any
cause of action by any third party against Metrocall.
(b) (i) None of Metrocall's or its Subsidiaries' operations at the
Metrocall Properties are (or, with respect to past Metrocall Properties and
Metrocall Properties of former Subsidiaries, were at the time of disposition) in
violation in any material respect of any Environmental Law (with respect to past
Metrocall Properties and Metrocall Properties of former Subsidiaries,
Environmental Laws in effect at the time of disposition); (ii) Metrocall and its
Subsidiaries have obtained and are in all material respects in compliance with
all necessary permits or authorizations that are required under Environmental
Laws to operate their facilities, assets and businesses; (iii) no Environmental
Claims have been asserted against Metrocall or its Subsidiaries or any
predecessor in interest, nor does Metrocall have knowledge of any threatened (in
writing) or pending Environmental Claim against Metrocall or any of its
Subsidiaries or any predecessor in interest which is reasonably likely to result
in Environmental Liabilities that, individually or in the aggregate, would have
a Metrocall Material Adverse Effect; and (iv) no Environmental Claim has been
asserted against any facilities that may have received Hazardous Materials
generated by Metrocall or any of its Subsidiaries or any predecessor in interest
which is reasonably likely to result in Environmental Liabilities that,
individually or in the aggregate, would have a Metrocall Material Adverse
Effect.
(c) Metrocall has delivered to Arch true and complete copies of all
material environmental reports, studies, investigations or correspondence
regarding any Environmental Liabilities of Metrocall or any environmental
conditions at any of the Metrocall Properties which are in possession of
Metrocall or its agents.
Section 4.22 Compliance with Laws. Neither Metrocall nor any of its
Subsidiaries is in violation of, or has violated or, to the knowledge of
Metrocall, received written notice of any violation of, any applicable
provisions of any laws, statutes, ordinances, regulations, judgments,
injunctions, orders or consent decrees, except for any such violations that,
individually or in the aggregate, would not have a Metrocall Material Adverse
Effect. To the knowledge of Metrocall, no investigation, proceeding, action or
review relating to Metrocall or any of its Subsidiaries by any governmental
entity is pending or threatened in writing, other than, in each case, those the
outcome of which would not, individually or in the aggregate, have a Metrocall
Material Adverse Effect.
Section 4.23 Permits and Licenses. (a) Metrocall or its appropriate
Subsidiaries hold all material approvals, licenses, permits, registrations and
similar type authorizations necessary for the lawful ownership, lease,
operation, use or maintenance of its properties and the lawful conduct of its
business as now conducted, including, without limitation, those issued under or
pursuant to the Communications Act, the FCC Regulations and the
Telecommunications Laws (collectively, the "Metrocall Permits"). All Metrocall
Permits are validly issued and in full force and effect, except as would not,
individually or in the aggregate, have a Metrocall Material Adverse Effect. Each
of Metrocall and its Subsidiaries is in compliance in all respects with the
terms and conditions of each Metrocall Permit, except where the failure to be in
compliance would not, individually or in the aggregate, have a Metrocall
Material Adverse Effect. There is not pending, or to the knowledge of Metrocall,
threatened, any action by or before any governmental or regulatory authority to
revoke, suspend, cancel, rescind, or modify in any
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material respect any of the Metrocall Permits. Metrocall has timely made all
regulatory filings required, and paid all fees, assessments and contribution
requirements imposed, by any governmental authority, and all such filings and
the calculation of such fees, are accurate in all material respects, except
where the failure to make such filing or pay such fees or assessments would not,
individually or in the aggregate, have a Metrocall Material Adverse Effect.
(b) Section 4.23(b) of the Metrocall Disclosure Schedule contains a
true and complete list of all Metrocall Permits issued to Metrocall or any of
its Subsidiaries by the FCC (the "Metrocall FCC Licenses") and all pending
applications for Metrocall Permits that would be Metrocall FCC Licenses, if
issued or granted. No such Metrocall FCC License is subject to any restriction
or condition which would limit in any material respect the full operation of the
business of Metrocall and its Subsidiaries as now operated, other than those
restrictions or conditions routinely imposed in conjunction with such FCC
Licenses. The Metrocall FCC Licenses are in good standing, are in full force and
effect in all material respects and are not materially impaired by any act or
omission of Metrocall, its Subsidiaries, or any of their respective officers,
directors, or employees.
Section 4.24 Real Property.
(a) Section 4.24(a) of the Metrocall Disclosure Schedule sets forth
a list of the addresses of all real property owned by Metrocall or any of its
Subsidiaries (the "Metrocall Owned Real Property"). Either Metrocall or its
Subsidiaries, as applicable, has good and marketable fee title to each of the
Metrocall Owned Real Property, except for defects in title, easements,
restrictive covenants and similar encumbrances or impediments that, in the
aggregate, do not materially interfere with the ability of Metrocall and its
Subsidiaries to conduct their business, taken as a whole, as currently
conducted. There is no pending or, to the knowledge of Metrocall, threatened
condemnation or eminent domain proceeding with respect to any Metrocall Owned
Real Property. All of the buildings, fixtures and other improvements located on
the Metrocall Owned Real Property are in good operating condition and repair in
all material respects.
(b) Section 4.24(b) of the Metrocall Disclosure Schedule sets forth
a list of all leases and similar agreements (the "Metrocall Leases") for real
property leased, subleased or licensed by Metrocall or any of its Subsidiaries
(the "Metrocall Leased Real Property") and the location of the premises subject
to the Metrocall Leases, except such Metrocall Leases the absence of which,
individually or in the aggregate, would not materially interfere with the
ability of Metrocall and its Subsidiaries to conduct their business, taken as a
whole, as currently conducted. Neither Metrocall nor any of its Subsidiaries
nor, to the knowledge of Metrocall, any other party to any Metrocall Lease, is
in material default under any Metrocall Lease. Each Metrocall Lease is valid and
binding against Metrocall or any of its Subsidiaries party thereto and, to the
knowledge of Metrocall, each other party thereto, and in full force and effect,
and all base rent payable by Metrocall or any of its Subsidiaries, as tenant
thereunder, is current. Metrocall or one of its Subsidiaries has a valid
leasehold interest in and the right to use or occupy each such parcel of real
property leased by it, free and clear of all liens, except for any of the
following: (i) liens for taxes, assessments or governmental charges or levies
(A) not yet due or (B) delinquent and being diligently contested in good faith;
(ii) statutory liens of carriers, warehousemen, mechanics, materialmen and the
like arising in the ordinary course of business
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and for obligations not yet due and payable; (iii) easements, restrictive
covenants, rights of way and other similar imperfections of title that do not
materially adversely affect the use of the property as presently used; (iv)
zoning, building and other similar restrictions that do not materially adversely
affect the use of the property as presently used; (v) temporary security
interests in favor of suppliers of goods for which payment has not yet been made
in the ordinary course of business consistent with past practice; (vi) liens on
the interests of lessors (but not Metrocall or any of its Subsidiaries as tenant
or lessee); (vii) liens listed in Section 4.24(b) of the Metrocall Disclosure
Schedule; and (viii) other liens or encumbrances that would not, individually or
in the aggregate, reasonably be expected to materially affect the use of such
property subject thereto or affected thereby or otherwise materially impair
business operations at such property.
Section 4.25 State Takeover Statutes. The Metrocall Board has approved
the execution of this Agreement and the Ancillary Agreements to which Metrocall
is or will be a party and authorized and approved the Merger prior to the
execution by Metrocall of this Agreement and such Ancillary Agreements and, to
the knowledge of Metrocall, the restrictions on business combinations contained
in Section 203 of the DGCL will not apply to this Agreement, the Ancillary
Agreements, the Transactions or the transactions contemplated by the Ancillary
Agreements. The Metrocall Board has taken all such action required to be taken
by it to provide that this Agreement, the Ancillary Agreements, the Transactions
and the transactions contemplated by the Ancillary Agreements shall be exempt
from the restrictions on business combinations contained in any "moratorium,"
"control share," "fair price" or other anti-takeover laws or regulations of any
state (including Section 203 of the DGCL).
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
Section 5.1 Conduct of Business By Metrocall and Arch Pending the
Merger. Except as otherwise contemplated by this Agreement and the Ancillary
Agreements or disclosed in the Disclosure Schedules, during the period from the
execution and delivery of this Agreement to the Effective Time or termination of
this Agreement in accordance with its terms (the "Interim Period"), each of the
Companies shall, and shall cause each of their Subsidiaries to:
(a) conduct their respective businesses in the ordinary and usual
course of business and consistent with past practice for the fiscal year ended
December 31, 2003;
(b) not (i) except as necessary or appropriate to comply with
applicable laws or regulations, including SEC regulations and requirements of
the NASDAQ, amend or propose to amend their respective certificates of
incorporation or bylaws (or comparable organizational documents), (ii) split,
combine or reclassify their outstanding capital stock, or (iii) declare, set
aside or pay any dividend or distribution payable in cash, stock, property or
otherwise, except for the payment of dividends or distributions to a Company by
a wholly-owned Subsidiary of such Company;
(c) except for (i) issuances of Metrocall Common Stock and Metrocall
Preferred Stock required pursuant to the Metrocall Plan of Reorganization and
(ii) issuances of Arch Common Stock required pursuant to the Arch Plan of
Reorganization, not issue, sell,
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pledge or dispose of, or agree to issue, sell, pledge or dispose of, any
additional shares of, or any options, warrants or rights of any kind to acquire
any shares of, their capital stock of any class or any debt or equity securities
convertible into or exchangeable for such capital stock, except that each
Company may issue shares upon the exercise of outstanding options and warrants,
or pursuant to existing agreements, in effect on the date hereof;
(d) not accelerate, amend or change the period of exercisability or
vesting of options, restricted stock or similar awards under any employee stock
incentive plan or authorize cash payments in exchange for any options granted
under any of such plans except as required by the terms of such plans or any
related agreements in effect as of the date hereof;
(e) not (i) assume, incur or become contingently liable with respect
to any indebtedness for borrowed money other than (A) borrowings under the
existing credit facilities of each Company, if applicable (the "Existing Credit
Facilities"), up to the existing borrowing limit on the date hereof or other
borrowings in the ordinary course of business consistent with past practice or
(B) financing arrangements in connection with the payment of the Cash Election
Price on terms that are approved by Metrocall and Arch (in each case such
approval not to be unreasonably withheld or delayed), (ii) redeem, purchase,
acquire or offer to purchase or acquire any shares of its capital stock or any
options, warrants or rights to acquire any of its capital stock or any security
convertible into or exchangeable for its capital stock other than pursuant to
the terms thereof or, in the case of equity granted to employees of a Company or
their respective Subsidiaries, pursuant to an employee stock incentive plan of
such Company, (iii) take or fail to take any action which action or failure to
take action would cause either Company or their stockholders (except to the
extent that any stockholders receive cash as part of the Metrocall Merger
Consideration or in lieu of fractional shares) to recognize gain or loss for
federal income tax purposes as a result of the consummation of the Merger or
would otherwise cause the Merger not to qualify as an exchange described in
Section 351 of the Code, (iv) make any material acquisition of any assets or
businesses other than expenditures for current, fixed or capital assets in the
ordinary course of business consistent with past practice, and (v) sell, pledge,
dispose of or encumber any material assets or businesses, or enter into any
binding contract, agreement, commitment or arrangement with respect to any of
the foregoing, other than sales or dispositions of inventory or obsolete (or
otherwise worthless) assets by either Company or its Subsidiaries in the
ordinary course of business consistent with past practice;
(f) use all reasonable efforts to preserve intact their respective
business organizations and goodwill, keep available the services of their
respective present officers and key employees, and preserve the goodwill and
business relationships with customers and others having business relationships
with them and not engage in any action, directly or indirectly, that is
intended, or would reasonably be expected to adversely impact the Transactions;
(g) not enter into or amend any employment, severance, change in
control, special pay arrangement with respect to termination of employment or
other similar arrangements or agreements with any directors, officers or key
employees, provided, however, that if approved by the Arch Board, Arch may adopt
a retention program for its key employees other than those individuals
identified in Section A of Schedule 5.1 (who shall not be entitled to
participate in any such program) providing for cash payments in an aggregate
amount not to exceed the amount set forth in Section B of Schedule 5.1;
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(h) not increase the salary or monetary compensation of any
directors, executive officers or employees whose current annual base salary is
in excess of $200,000, except (A) for increases in the ordinary course of
business consistent with past practice, (B) pursuant to contractual arrangements
in effect on December 31, 2003 or (C) in connection with the assumption by such
employee of material new or additional responsibilities;
(i) not establish, adopt, enter into or materially amend any
collective bargaining agreement;
(j) except as expressly permitted under the proviso in Section
5.1(g), not adopt, enter into or amend any pension or retirement plan, trust or
fund, except as required to comply with changes in applicable law and not adopt,
enter into or amend in any material respect any bonus, profit sharing,
compensation, stock option, deferred compensation, health care, employment or
other employee benefit plan, agreement, trust, fund or arrangement for the
benefit or welfare of any employees or retirees generally, other than in the
ordinary course of business consistent with past practice or as required
pursuant to an existing contractual relationship;
(k) use commercially reasonable efforts to maintain with financially
responsible insurance companies insurance on its tangible assets and its
businesses in such amounts and against such risks and losses as are consistent
with past practice;
(l) not make, change or revoke any material tax election or make any
material agreement or settlement regarding taxes with any taxing authority;
(m) use commercially reasonable efforts to: (A) comply in all
material respects with the Communications Act, the FCC Regulations and the
Telecommunications Laws, (B) preserve and retain all of its FCC Licenses, (C)
file in a timely manner all fees, reports, applications, or other materials
required to be filed under the Communications Act, the FCC Regulations and the
Telecommunications Laws, and (D) comply in all material respects with the
Exchange Act;
(n) not enter into any agreement or arrangement that limits or
otherwise restricts its or any of its Subsidiaries or any of their respective
affiliates or any successor thereto from engaging or competing in any line of
business or in any geographic area which agreements or arrangements would,
individually or in the aggregate, have an Arch Material Adverse Effect or
Metrocall Material Adverse Effect, as applicable;
(o) not waive, release, assign, settle or compromise any material
claims, or any material litigation or arbitration which would, individually or
in the aggregate, have an Arch Material Adverse Effect or Metrocall Material
Adverse Effect, as applicable; and
(p) not grant or credit any additional "Units", as such term is
defined in Arch's Management Long-Term Incentive Plan, or make any similar award
under Arch's Management Long-Term Incentive Plan or accelerate, amend or change
the period of exercisability or vesting of issued and outstanding "Units" as of
the date hereof or authorize cash payments in exchange therefor, except as
required by the terms of Arch's Management Long-Term Incentive Plan in effect as
of the date hereof.
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Section 5.2 Acquisition Transactions.
(a) Except as provided below, each Company shall not, directly or
indirectly, and shall instruct its officers, directors, employees, Subsidiaries,
agents and advisors and other representatives (including any investment banker,
attorney or accountant retained by it), not to, directly or indirectly, solicit,
initiate or knowingly encourage (including by way of furnishing nonpublic
information), or take any other action knowingly to facilitate, any inquiries or
the making of any proposal or offer (including any proposal or offer to its
stockholders) that constitutes, or may reasonably be expected to lead to, any
Competing Transaction (as defined in Section 5.2(g)), or enter into or maintain
or continue discussions or negotiate with any Person in furtherance of such
inquiries, or agree to or endorse any Competing Transaction, or authorize or
permit any of the officers, directors or employees of a Company or any
Subsidiary thereof, or any investment banker, financial advisor, attorney,
accountant or other representative retained by a Company or any Subsidiary
thereof, to take any such action.
(b) Nothing contained in Section 5.2(a) shall prohibit the board of
directors of a Company from complying with Rule 14d-9 or Rule 14e-2 promulgated
under the Exchange Act.
(c) Prior to obtaining the Arch Stockholders' Approval or Metrocall
Stockholders' Approval, as the case may be, if the board of directors of a
Company determines in good faith that failing to do so would violate its
fiduciary duties, nothing contained in Section 5.2(a) or Section 5.2(d) shall
prohibit the board of directors of such Company from considering and negotiating
(including furnishing nonpublic information) an unsolicited bona fide written
proposal (the "Unsolicited Bid") and approving or recommending to the
stockholders of such Company (and, in conjunction with such recommendation,
withdrawing its recommendation in favor of the Merger) such Unsolicited Bid
which (A) was not received in violation of this Section 5.2, (B) if executed or
consummated would be a Competing Transaction, (C) is not conditioned on
financing or is conditioned on financing that is, in the good faith judgment of
the board of directors of such Company after consultation with its financial
advisors, highly likely of being obtained, and (D) the board of directors of
such Company determines in good faith, after consultation with its financial
advisor to such effect, that such Unsolicited Bid provides greater value to such
Company's stockholders than the Merger, taking into consideration the financial
impact of the termination provisions set forth in Section 8.1 hereof.
(d) Each Company shall use its best efforts to notify the other
Company promptly, and in no event later than one Business Day after receipt, if
any proposal or offer, or any inquiry or contact with any Person with respect
thereto, regarding a Competing Transaction is made. Each Company immediately
shall cease and cause to be terminated all existing discussions or negotiations
with any parties conducted heretofore with respect to a Competing Transaction;
provided, however, that such Company shall not release any third party from, or
waive any provision of, any confidentiality or standstill agreement to which it
is a party. Each Company shall use its best efforts to ensure that its officers,
directors, employees, Subsidiaries, agents and advisors or other representatives
(including any investment banker, attorney or accountant retained by it) are
aware of the restrictions described in this Section 5.2.
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(e) In addition to the foregoing, no Company shall accept or enter
into any agreement, letter of intent or similar document concerning a Competing
Transaction for a period of not less than five Business Days after the other
Company has received the notice provided for in Section 5.2(d) above, which
notice shall include the material terms of such Competing Transaction and the
identity of the Person or entity wishing to enter into such Competing
Transaction. Furthermore, during such period a Company receiving the offer for
the Competing Transaction shall negotiate with the other Company in good faith
any proposal submitted to such Company by the other Company which addresses the
terms of the Competing Transaction.
(f) "Competing Transaction" means any of the following involving
either Company or any Subsidiary of either Company and involving in any case a
business with net revenues, net income or assets of 40% or more of the amount of
net revenues, net income or assets, respectively, of such Company and its
Subsidiaries, taken as a whole:
(i) any merger, consolidation, share exchange, business
combination or other similar transaction;
(ii) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition of 15% or more of the assets of such party and its
Subsidiaries, taken as a whole, to a third party in a single transaction or
series of related transactions;
(iii) any tender offer or exchange offer for 15% or more of the
outstanding voting securities of such party or the filing of a registration
statement under the Securities Act in connection therewith; or
(iv) any combination of the foregoing.
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.1 Appropriate Actions; Consents; Filings. (a) Metrocall and
Arch shall each use, and shall cause each of their respective Subsidiaries to
use, their reasonable best efforts to, as soon as practicable after the date
hereof, (i) take, or cause to be taken, all appropriate actions, and do, or
cause to be done, all things necessary, proper or advisable under applicable law
or otherwise to consummate and make effective the Transactions, (ii) obtain all
necessary or appropriate waivers, consents or approvals of third parties
required in order to preserve material contractual relationships of each Company
and their respective Subsidiaries, (iii) obtain from any governmental
authorities any consents, licenses, permits, waivers, approvals, authorizations
or orders required to be obtained from any governmental authorities in
connection with the authorization, execution and delivery of this Agreement and
the consummation of the Transactions, and (iv) make all necessary filings,
notifications and submissions and thereafter make any other required
submissions, with respect to this Agreement and the Merger, required under (A)
the HSR Act and Antitrust Laws, (B) the Communications Act, (C) the FCC
Regulations, (D) the Telecommunications Laws, and (E) any other applicable law
required to be made by Metrocall or Arch or any of their Subsidiaries in
connection with the authorization, execution and delivery of this Agreement and
the consummation of the Transactions; provided, that Metrocall and Arch shall
cooperate with each other in connection with the making of all
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such filings and submissions, including providing copies of all such documents
to the non-filing party and its advisors prior to filings and, if requested,
shall accept all reasonable additions, deletions or changes suggested in
connection therewith. Metrocall and Arch shall furnish all information required
for any application or other filing or submission to be made pursuant to the
rules and regulations of any applicable law in connection with the Transactions.
(b) The Companies shall (i) promptly (and not more than 10 Business
Days from the date of this Agreement) file, and cause their respective
Subsidiaries to file, with the FCC all necessary applications for consent to
transfer in accordance with this Agreement all licenses, permits and
authorizations issued by the FCC to either of the Companies or their respective
Subsidiaries, (ii) diligently prosecute all applications with the FCC, and all
similar governmental authorities for consent to the Transactions, (iii) use
their best efforts to resist or resolve any administrative proceeding or suit,
including appeals, that may be instituted to challenge the grant of any such
applications, (iv) furnish to the other party such information and assistance as
such party reasonably may request in connection with the preparation or
prosecution of any such applications, (v) consult with and keep the other party
promptly apprised of any communications with, and inquiries or requests for
information from, such governmental authorities with respect to the transactions
contemplated hereby, and (vi) use their reasonable best efforts to obtain FCC
approvals. The Companies shall cooperate to resolve any objections to FCC and
other governmental approvals of the Transactions and shall not voluntarily take
actions that would give any governmental authorities grounds to institute
proceedings against either party.
(c) Each Company shall promptly (and in not more than five Business
Days from the date hereof) make its filings under the HSR Act with respect to
the Transactions and shall use all commercially reasonable efforts to promptly
make any other required submission under the HSR Act and resolve such
objections, if any, as may be asserted by a governmental agency with respect to
the Transactions under the Antitrust Laws. In connection therewith, if any
administrative or judicial action or proceeding is instituted (or threatened to
be instituted) challenging any Transaction as violative of any Antitrust Law,
each Company shall cooperate and use all commercially reasonable efforts
vigorously to contest and resist any such action or proceeding and to have
vacated, lifted, reversed, or overturned any decree, judgment, injunction or
other order, whether temporary, preliminary or permanent (each, an "Order") that
is in effect and that prohibits, prevents, conditions or restricts consummation
of the Merger or the other Transactions, unless by mutual agreement the
Companies decide that such litigation or contest is not in their respective best
interests. Notwithstanding the provisions of the immediately preceding sentence,
it is expressly understood and agreed that neither Company shall have any
obligation to litigate or contest any administrative or judicial action or
proceeding or any Order beyond the earlier of (i) the date that either Company
has a right of termination under Section 8.1(b) or (ii) the date on which a
ruling preliminarily enjoining the Merger issued by a court of competent
jurisdiction. Each Company shall use all commercially reasonable efforts to take
such action as may be required to cause the termination or expiration of any
waiting periods imposed under the HSR Act or other Antitrust Laws with respect
to such Transactions as promptly as possible after the execution of this
Agreement.
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(d) Neither Company shall be required to agree, as a condition to
any approval or waiver from any governmental authority, to divest itself of or
hold separate any Subsidiary, division, business unit or material asset.
(e) Metrocall and Arch each shall consult with and keep the other
party apprised of the status of matters relating to completion of the
Transactions, including, without limitation, promptly furnishing the other party
with copies of notices or other communications received by Metrocall or Arch, as
the case may be, or any of its Subsidiaries, from any third party and/or any
governmental authority with respect to the Merger and the Transactions.
(f) Each of Metrocall and Arch shall give (or shall cause their
respective Subsidiaries to give) any notices to third Persons, and use, and
cause their respective Subsidiaries to use, their reasonable best efforts to
obtain any third Persons consents (A) necessary, proper or advisable to
consummate the Transactions, (B) otherwise required under any contracts,
licenses, leases or other agreements in connection with the consummation of the
Transactions or (C) required to prevent a Metrocall Material Adverse Effect or
Arch Material Adverse Effect from occurring prior to the Effective Time or any
like material adverse effect with respect to Parent from occurring after the
Effective Time. In the event that any party shall fail to obtain any such third
Person consent, such party shall use its reasonable best efforts, and shall take
any such actions reasonably requested by the other parties, to limit the adverse
effect upon Metrocall, Arch and Parent, their respective Subsidiaries, and their
respective businesses resulting, or which could reasonably be expected to result
after the Effective Time, from the failure to obtain such consent.
(g) Nothing in this Agreement shall require Metrocall or Arch to
agree to the imposition of conditions, the payment of any material amounts
(other than filing fees and Expenses incurred by the parties in connection with
obtaining such consents or approvals) or any requirement of divestiture to
obtain any consents or approvals from third parties, including governmental
authorities, required to consummate the Transactions, and in no event shall any
party take, or be required to take, any action that would have a Metrocall
Material Adverse Effect or an Arch Material Adverse Effect.
(h) Metrocall and Arch agree to cooperate with respect to, and shall
cause each of their respective Subsidiaries to cooperate with respect to, and
agree to use their reasonable best efforts to contest and resist, any action,
including legislative, administrative or judicial action, and to have vacated,
lifted, reversed or overturned any decree, judgment, injunction or other order
(whether temporary, preliminary or permanent) of any governmental authority that
is in effect and that restricts, prevents or prohibits the consummation of the
Merger or any of the Transactions.
(i) In the event any litigation is commenced by any Person relating
to the Transactions, either party shall have the right, at its own expense, to
reasonably participate therein, and each Company will not settle any such
litigation without the consent of the other, which consent will not be
unreasonably withheld.
(j) In case at any time after the Effective Time any further action
is necessary or desirable to carry out the purposes of this Agreement, the
proper officers and
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directors of Metrocall, Arch, Parent, Surviving Metrocall Corporation and
Surviving Arch Corporation shall take all such necessary action.
(k) To the extent reasonably practicable, neither Company shall
agree to participate in any meeting or discussion with any governmental entity
in respect of any filings, investigation or other inquiry concerning this
Agreement or the Transactions unless it consults with the other party in advance
and, to the extent permitted by such governmental entity, gives the other party
the opportunity to attend and participate in such meeting or discussion.
(l) Arch and Metrocall shall cooperate and coordinate with each
other and use their collective reasonable best efforts to obtain financing
required to pay the Cash Election Price at the Closing (the "Financing") as soon
as practicable after the date hereof on terms reasonably satisfactory to
Metrocall and Arch. Each of Metrocall and Arch shall use its reasonable best
efforts to make their respective executive officers and other members of
management and employees available upon reasonable advance notice to participate
in discussions with financing sources, including roadshows and lender meetings.
Each of Metrocall and Arch shall provide, or cause to be provided, access to
information to potential financing sources and their representatives on the
terms and conditions set forth in Section 6.2.
(m) Metrocall and Arch expect that their respective executive
officers and other members of senior management will continue to perform their
respective duties and obligations and intend that any such officers' failure or
refusal to cooperate and to take all actions and to do all things reasonably
necessary, proper or advisable to consummate and make effective the
Transactions, including participating in any proxy solicitation activities with
respect to the Transactions and securing the Financing, or otherwise fully
cooperate shall constitute grounds for dismissal of such officer with cause.
Section 6.2 Access To Information. Subject to applicable law, including
laws restricting access to competitively sensitive information, Arch shall
afford to Metrocall and its respective accountants, counsel, financial advisors
and other representatives (the "Metrocall Representatives") and Metrocall and
its Subsidiaries shall afford to Arch and its accountants, counsel, financial
advisors and other representatives (the "Arch Representatives") reasonable
access during normal business hours throughout the Interim Period (with
reasonable advance notice) to all of their respective properties, books,
contracts, commitments and records (including tax returns) and, during such
period, shall furnish promptly to one another (i) a copy of each report,
schedule and other document filed or received by any of them pursuant to the
requirements of federal or state securities laws or filed by any of them with
the SEC in connection with the Transactions and (ii) such other information
concerning their respective businesses, properties and personnel as either
Company shall reasonably request; provided, however, that such access shall not
unreasonably disrupt the furnishing party's operations and shall not be deemed
to permit the other party to conduct any onsite environmental investigations or
examinations, other than a Phase I site assessment; provided, further, that no
fact or information uncovered as a result of such access shall amend or modify
any representations or warranties made herein or the conditions to the
obligations of the respective parties to consummate the Merger. Arch shall hold
and shall use its reasonable best efforts to cause the Arch Representatives to
hold, and Metrocall and its Subsidiaries shall hold and shall use their
reasonable best efforts to cause Metrocall Representatives to hold, in strict
confidence as
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"Evaluation Material" under the Nondisclosure Agreement dated October 3, 2003
between Arch and Metrocall (the "Nondisclosure Agreement") all nonpublic
documents and information furnished to each Company in connection with the
Transactions, except that (i) Arch and Metrocall may disclose such information
as may be necessary in connection with seeking the Arch Required Statutory
Approvals, Arch Stockholders' Approval, Metrocall Required Statutory Approvals
and Metrocall Stockholders' Approval, and (ii) each of Arch and Metrocall may
disclose any information that it is required by law or judicial or
administrative order to disclose, provided, however, that in either case the
disclosing party will use reasonable best efforts to assure confidential
treatment is accorded such information.
Section 6.3 Registration Statement and Proxy Statement.(a) Metrocall
and Arch shall promptly prepare and file with the SEC the Joint Proxy
Statement/Prospectus, and Metrocall, Arch and Parent shall prepare and file with
the SEC the Registration Statement (in which the Joint Proxy
Statement/Prospectus shall be included as a Prospectus) as promptly as
practicable. Metrocall and Arch each shall use, and shall cause Parent to use,
its reasonable best efforts to have the Registration Statement declared
effective under the Securities Act as promptly as practicable (including by
responding promptly to any comments made by the SEC with respect thereto), and
promptly thereafter mail the Joint Proxy Statement/Prospectus to the
stockholders of Metrocall and Arch. Metrocall and Arch each shall also use, and
shall cause Parent to use, its reasonable best efforts to obtain prior to the
effective date of the Registration Statement all necessary state securities law
or "blue sky" permits and approvals required in connection with the Merger and
the Transactions and will pay all expenses incident thereto. Each party shall
notify the other of the receipt of the comments of the SEC and of any requests
by the SEC for amendments or supplements to the Joint Proxy Statement/Prospectus
or the Registration Statement or for additional information and shall promptly
supply one another with copies of all correspondence between any of them (or
their representatives) and the SEC (or its staff) with respect thereto. Each of
the Companies shall provide the other with a reasonable opportunity to review
and comment on any amendment or supplement to the Registration Statement and the
Joint Proxy Statement/Prospectus prior to filing such with the SEC. If, at any
time prior to the Metrocall Stockholders Meeting or the Arch Stockholders
Meeting, any event shall occur relating to or affecting Metrocall, Arch, or
their respective officers or directors, which event should be described in an
amendment or supplement to the Joint Proxy Statement/Prospectus or the
Registration Statement, the parties shall promptly inform one another and shall
cooperate in promptly preparing, filing and clearing with the SEC and, if
required by applicable securities laws, mailing to the stockholders of Metrocall
or Arch, as the case may be, such amendment or supplement. Arch and Metrocall
shall cause Parent to take any action (other than qualifying to do business in
any jurisdiction in which it is not now so qualified or filing a general consent
to service of process) required to be taken under any applicable federal or
state securities laws in connection with the issuance of the Parent Common Stock
pursuant to the Transactions.
(b) Metrocall and Arch each shall, and shall cause Parent to, upon
request by the other party, furnish the other party with all information
concerning itself, its Subsidiaries, directors, officers and stockholders and
such other matters as may be reasonably necessary or advisable in connection
with the Joint Proxy Statement/Prospectus, the Registration Statement or any
other statement, filing, notice or application made by, or on behalf of,
Metrocall, Arch,
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Parent or any of their respective Subsidiaries to any third party and/or any
governmental authority in connection with the Merger and the Transactions.
(c) Prior to the date of approval of the Merger by their respective
stockholders, each of Arch and Metrocall shall, and shall cause Parent to,
correct promptly any information provided by it to be used specifically in the
Joint Proxy Statement/Prospectus and Registration Statement that shall have
become false or misleading in any material respect and shall take all steps
necessary to file with the SEC and have declared effective or cleared by the SEC
any amendment or supplement to the Joint Proxy Statement/Prospectus or the
Registration Statement so as to correct the same and to cause the Joint Proxy
Statement/Prospectus as so corrected to be disseminated to the stockholders of
Arch and Metrocall, in each case to the extent required by applicable law.
(d) Metrocall and Arch each shall, with respect to audited financial
statements, pro-forma financial statements or other financial statements or
other reports provided by any auditor or other expert for inclusion in any
Metrocall SEC Report or Arch SEC Report, respectively, upon request by the other
party, use their commercially reasonable efforts to obtain without cost to such
requesting party, a consent letter from such auditor or expert addressed to the
requesting party to use such auditor's or expert's name and include such
statements or reports in any Arch SEC Report or Metrocall SEC Report, as
applicable, to be filed by the requesting party.
(e) Each of the Companies will advise the other promptly after it
receives notice or otherwise becomes aware thereof, of the time when the
Registration Statement has become effective, the issuance of any stop order, or
the suspension of the qualification of the Parent Common Stock issuable in
connection with the Mergers for offering or sale in any jurisdiction.
(f) Notwithstanding any other provision in this Agreement to the
contrary, no amendment or supplement (including by incorporation by reference)
to the Joint Proxy Statement/Prospectus or the Registration Statement shall be
made without the approval of both Companies, which approval shall not be
unreasonably withheld or delayed; provided that with respect to documents filed
by a party which are incorporated by reference in the Registration Statement or
Joint Proxy Statement/Prospectus, this right of approval shall apply only with
respect to information relating to the other party or its business, financial
condition or results of operations; provided, further, that Arch or Metrocall
may amend or supplement the Joint Proxy Statement/Prospectus or Registration
Statement (including by incorporation by reference) pursuant to a Qualifying
Amendment (as defined below) to effect such a change in its recommendation made
in accordance with Section 5.2, and in such event, the right of approval shall
apply only with respect to information relating to the other party or its
business, financial condition or results of operations, and shall be subject to
the right of each party to have its Board of Directors' deliberations and
conclusions accurately described. A "Qualifying Amendment" means an amendment or
supplement to the Joint Proxy Statement/Prospectus or Registration Statement
(including by incorporation by reference) to the extent it contains (i) a
change, in accordance with Section 5.2, in the recommendation of the Board of
Directors of Arch or Metrocall, as applicable, with respect to the transactions
contemplated by this Agreement (as the case may be), (ii) a statement of the
reasons of the Board of Directors of Arch or Metrocall (as
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the case may be) for making such change in its recommendation and (iii)
additional information reasonably related to the foregoing.
Section 6.4 Stockholders' Approvals.(a) Arch shall, as promptly as
practicable, duly take all action to call, give notice of, convene and hold a
meeting of the Arch stockholders and submit this Agreement and the Transactions
for the approval of its stockholders at such meeting and shall use its
reasonable best efforts and take all necessary actions to obtain the Arch
Stockholders' Approval. Such meeting of stockholders shall be held as soon as
practicable following the date upon which the Registration Statement becomes
effective. Subject to any change of recommendation in accordance with Section
5.2, Arch shall, through the Arch Board, recommend to its stockholders approval
of this Agreement and the Transactions and take all lawful actions to solicit
such adoption and approval.
(b) Metrocall shall, as promptly as practicable, submit duly take
all action to call, give notice of, convene and hold a meeting of the Metrocall
stockholders and this Agreement and the Transactions for the approval of its
stockholders at a meeting of stockholders and shall use its reasonable best
efforts and take all necessary actions to obtain the Metrocall Stockholders'
Approval. Such meeting of stockholders shall be held as soon as practicable
following the date upon which the Registration Statement becomes effective.
Subject to any change of recommendation in accordance with Section 5.2,
Metrocall shall, through the Metrocall Board, recommend to its stockholders
approval of this Agreement and the Transactions and take all lawful actions to
solicit such adoption and approval.
Section 6.5 Compliance with The Securities Act. Each of Metrocall and
Arch shall use its reasonable best efforts to cause each officer, each director
and each other Person who is an "affiliate" of it, for purposes of Rule 145
under the Securities Act ("Rule 145") at the time of the Arch Stockholders
Meeting or the Metrocall Stockholders Meetings, as the case may be, each of whom
shall be listed in Section 6.5(a) of the Arch Disclosure Schedule or Section
6.5(b) of the Metrocall Disclosure Schedule, to deliver to Parent, at or prior
to the Effective Time a written agreement substantially in the form of Exhibit B
attached hereto (an "Affiliate Agreement") to the effect that such Person will
not offer to sell, sell or otherwise dispose of any shares of Parent Common
Stock issued in the Merger, except, in each case, in accordance with the terms
of the Affiliate Agreement and pursuant to an effective registration statement
or in compliance with Rule 145, as amended from time to time, or in a
transaction which, in the opinion of legal counsel satisfactory to Parent, is
exempt from the registration requirements of the Securities Act. Parent shall
use commercially reasonable efforts to take such customary and reasonable
actions, from time to time after the Effective Time, as are necessary and
advisable to allow any party to an Affiliate Agreement to dispose of shares of
Parent Common Stock in accordance with Rule 145, if applicable.
Section 6.6 Expenses. Expenses (as defined herein) incurred in
connection with this Agreement and the Transactions shall be paid by the party
incurring such Expenses, except that those Expenses incurred in connection with
the filing, printing and mailing of the Registration Statement and the Joint
Proxy Statement/Prospectus, and the filing fees under the Antitrust Laws, any
other filings fees under any governmental regulations and any filing fees in
connection with obtaining approvals under the Communications Act, the FCC
Regulations and the Telecommunications Laws, as well as Expenses incurred in
connection with presentations
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made to governmental entities in connection with the foregoing filings, shall be
shared equally by Metrocall and Arch. For purposes of this Agreement, the term
"Expenses" means, with respect to any party hereto, all reasonable out-of-pocket
expenses (including all fees and expenses of counsel, accountants, investment
bankers, experts and consultants to a party hereto and its affiliates, but
excluding any allocation of overhead) incurred by such party or on its behalf in
connection with or related to the authorization, preparation, negotiation,
execution and performance of its obligations pursuant to this Agreement and the
consummation of the Merger, the preparation, printing, filing and mailing of the
Registration Statement, and the Joint Proxy Statement/Prospectus, the
solicitation of stockholder approvals and all other matters related to
consummating the Transactions and the Closing.
Section 6.7 Public Statements. Metrocall and Arch shall consult with
each other before issuing any press release or written employee communication or
otherwise making any public announcement with respect to this Agreement, the
Transactions or otherwise and shall not issue any such press release or written
employee communication or make any such public statement without the prior
written approval of the other Company, except to the extent required by
applicable law or the requirements of the rules and regulations of the SEC,
Nasdaq or Nasdaq SmallCap, in which case the issuing Company shall use all
reasonable efforts to consult with the other Company before issuing any such
release or making any such public statement; provided, that a Company may make
any public statement (i) reasonably required to correct or otherwise address
disclosures made by the other Company in violation of this Agreement or (ii) in
response to specific questions by the press, analysts, investors or those
attending industry conferences or financial analyst conference calls, in each
case so long as any such statements are not inconsistent with previous press
releases, public disclosures or public statements made jointly by the Companies
and do not reveal any non-public information regarding the other Company. The
Companies shall cooperate to develop all public communications and make
appropriate members of management available at presentations related to the
transactions contemplated by this Agreement as reasonably requested by the other
Company.
Section 6.8 Notification of Certain Matters. Each of Metrocall and Arch
agrees to give prompt notice to the other of, and to use commercially reasonable
efforts to remedy, (i) the occurrence or failure to occur of any event which
occurrence or failure to occur would be likely to cause any of its
representations or warranties in this Agreement to be untrue or inaccurate in
any material respect on the Closing Date in any case which would reasonably be
expected to result in the failure of one or more of the other Company's
conditions to closing set forth in Article VII, (ii) any failure on its part to
comply with or satisfy any covenant, condition or agreement to be complied with
or satisfied by it thereunder in any case which would reasonably be expected to
result in the failure of one or more of the other Company's conditions to
closing set forth in Article VII and (iii) any event, development, change, or
effect that has or would reasonably be expected to materially impair the
operations of the business of such Company; provided, however, that the delivery
of any notice pursuant to this Section 6.8 shall not limit or otherwise affect
the rights or remedies available hereunder to the party receiving such notice.
Section 6.9 Directors' and Officers' Indemnification.(a) The
indemnification provisions of the respective certificates of incorporation and
bylaws of Parent, Surviving Metrocall Corporation and Surviving Arch Corporation
and their respective Subsidiaries as in
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effect at the Effective Time shall not be amended, repealed or otherwise
modified for a period of six years from the Effective Time in any manner that
would adversely affect the rights thereunder of individuals who at the Effective
Time were current or former directors, officers, employees or agents of Arch or
Metrocall or their respective Subsidiaries. From and after the Effective Time,
Parent, Surviving Metrocall Corporation and Surviving Arch Corporation shall,
and shall cause their respective Subsidiaries to, jointly and severally
(provided that each Company and its Subsidiaries shall only be liable with
respect to current and former directors and officers of such Company and its
Subsidiaries) fulfill and honor in all respects the obligations, including with
respect to advancing expenses, of Parent, Surviving Metrocall Corporation and
Surviving Arch Corporation, and their respective Subsidiaries, pursuant to any
indemnification agreements between Arch or Metrocall, or any of their respective
Subsidiaries, and their respective current and former directors and officers in
effect immediately prior to the Effective Time and any indemnification
provisions under the Arch Certificate of Incorporation and Arch Bylaws or
Metrocall Certificate of Incorporation and Metrocall Bylaws, or the certificate
of incorporation, bylaws and comparable organizational documents of any such
Subsidiaries, respectively, as in effect on the date hereof.
(b) In the event Parent, Surviving Metrocall Corporation or
Surviving Arch Corporation or any of their respective Subsidiaries, successors
or assigns (i) consolidates with or merges into any other Person and shall not
be the continuing or surviving corporation or entity of such consolidation or
merger or (ii) transfers all or substantially all of its properties and assets
to any other Person, then, and in each such case, reasonably adequate provisions
shall be made so that its successors and assigns shall assume the obligations of
Parent, Surviving Metrocall Corporation, Surviving Arch Corporation, or any such
Subsidiaries, as applicable, as set forth in this Section 6.9 to the extent such
assumption does not occur by operation of law.
(c) For a period of six years after the Effective Time, Parent shall
cause to be maintained in effect for each current and former director and
officer of Arch and Metrocall as of the Effective Time, liability insurance
coverage with respect to matters arising at or prior to the Effective Time, in
such amounts and containing such terms and conditions that are not materially
less advantageous to such parties than the coverage applicable to such
individuals immediately prior to the Effective Time. The provisions of the
immediately preceding sentence shall be deemed to have been satisfied if prepaid
policies have been obtained on or prior to the Effective Time to the extent such
policies provide such current and former directors with coverage for the period
and on the terms and conditions described in the preceding sentence.
(d) The rights of each indemnified party hereunder shall be in
addition to, and not in limitation of, any other rights such indemnified party
may have under the Arch Certificate of Incorporation or Arch Bylaws or Metrocall
Certificate of Incorporation or Metrocall Bylaws, respectively, any
indemnification agreement, under the DGCL, or otherwise. The provisions of this
Section 6.9 shall survive the consummation of the Merger and expressly are
intended to benefit each of the indemnified parties.
(e) Parent shall, or shall cause one or more of the Surviving
Corporations or their respective Subsidiaries to, pay all reasonable expenses,
including reasonable attorneys' fees, that may be incurred by any Person
indemnified hereunder in enforcing the indemnity and other obligations provided
in this Section 6.9.
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Section 6.10 Listing.Metrocall and Arch shall use, and shall cause
Parent to use, its reasonable best efforts to effect, at or before the Effective
Time, authorization for listing on the Nasdaq, upon official notice of issuance,
of the shares of Parent Common Stock to be issued pursuant to the Merger or to
be reserved for issuance (i) upon the exercise of Arch Stock Options, Metrocall
Stock Options or Metrocall Warrants or (ii) in respect of Arch Stock Rights or
Metrocall Stock Rights.
Section 6.11 Employee Matters.(a) To the extent permitted by
Parent's employee benefit plans and applicable law, Parent will use reasonable
efforts to give each employee of Arch and Metrocall who is retained by Parent or
any of its Subsidiaries after the Effective Time (a "Retained Employee") full
credit for purposes of eligibility and vesting and determination of the level of
benefits under any employee benefit plans or arrangements maintained by Parent
or any subsidiary of Parent for such Retained Employees' service with Arch or
Metrocall, as applicable to the same extent recognized by Arch or Metrocall, as
applicable, immediately prior to the Effective Time. In no event shall Retained
Employees be entitled to any credit to the extent that it would result in a
duplication of benefits with respect to the same period of service.
(b) To the extent permitted by Parent's employee benefit plans
and applicable law, Parent will (i) waive all limitations as to preexisting
conditions, exclusions and waiting periods with respect to participation and
coverage requirements applicable to the Retained Employees under any welfare
benefit plans that such employees may be eligible to participate in after the
Effective Time, other than limitations or waiting periods that are already in
effect with respect to such employees and that have not been satisfied as the
Effective Time under any welfare plan maintained for the Retained Employees
immediately prior to the Effective Time, and (ii) provide each Retained Employee
with credit for any portion of co-payments and deductibles paid prior to the
Effective Time which relate to any period or portion thereof occurring, or
benefit inuring, after the Effective Time in satisfying any applicable
deductible or out-of-pocket requirements under any welfare plans that such
employees are eligible to participate in after the Effective Time.
(c) Nothing in this Section 6.11 shall be interpreted as
preventing Parent from amending, modifying or terminating any of the Parent
Benefits Plans or other contracts, arrangements, commitments or understandings,
in accordance with their terms and applicable law.
(d) As of the Effective Time, Parent shall assume and honor in
accordance with their terms all employment, severance and other compensation
agreements and arrangements existing and disclosed by Arch or Metrocall, as
applicable, prior to the execution of this Agreement which are between Arch or
Metrocall, as applicable, and any respective director, officer, or employee
thereof except as otherwise expressly agreed between Parent and such Person,
including the acceleration of any vesting provision of any Arch Stock Option,
Arch Stock Right or Metrocall Stock Option, or any unvested or restricted Arch
Common Stock issued under the Arch Stock Plan, which may be triggered by the
Merger.
(e) As of or promptly following the Effective Time, Parent
will establish a key employee retention program for the benefit of key employees
identified as such by Parent's Board (or the compensation committee thereof)
with such terms as are approved by Parent's
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Board (or the compensation committee thereof) and providing for aggregate
retention payments to all such employees in an amount not to exceed $3,000,000.
(f) As of or promptly following the Effective Time, Parent
will establish an equity incentive plan for members of the Parent Board and
officers and employees of Parent and its Subsidiaries, and reserve for issuance
thereunder (in the form of stock options, restricted stock grants or as
otherwise determined by the Parent Board or the compensation committee thereof)
a number of shares of Parent Common Stock not to exceed 7% of the issued and
outstanding shares of Parent Common Stock as of the Effective Time (exclusive of
Metrocall Stock Options, Metrocall Stock Rights, Metrocall Warrants, Arch Stock
Options and Arch Stock Rights that are exchanged as of the Effective Time for
corresponding rights to receive Parent Common Stock pursuant to Section 2.1).
The terms, conditions, eligibility of participants and the allocations to
eligible participants shall be determined by the Parent Board (or the
compensation committee thereof) and in accordance with applicable law, rule and
regulation.
(g) As of or prior to the Effective Time, but effective as of
the Effective Time, Parent shall, and shall cause Metrocall, Arch and/or any of
their respective Subsidiaries, to enter into an employment agreement and bonus
arrangements with the Chief Executive Officer of Metrocall as of the date of
this Agreement to serve as the Chief Executive Officer of Parent from and after
the Effective Time, on and subject to the terms and conditions set forth on
Schedule 6.11(g) and such other customary terms and conditions as may be agreed
among the parties thereto. In the event that the Chief Executive Officer of
Metrocall as of the date of this Agreement is, at any time on or prior to the
Effective Time, for any reason unwilling or unable to serve as Chief Executive
Officer of Parent, (i) prior to the Effective Time, the persons selected to
serve on the Parent Board pursuant to Section 6.14, and (ii) on and after the
Effective Time, the members of the Parent Board, shall promptly select and
approve an individual to serve as the Chief Executive Officer of Parent as
follows: (x) an individual so selected who is employed by Arch or Metrocall or
any of their respective Subsidiaries as of the date of this Agreement, shall be
approved by not less than six of the nine persons selected to serve on the
Parent Board or not less than six of the nine members of the Parent Board, as
the case may be, or (y) in the event that no individual referred to in the
preceding clause (x) is approved as provide therein, an individual who is not
employed by Arch or Metrocall or any of their respective Subsidiaries as of the
date of this Agreement to serve as the Chief Executive Officer of Parent will be
selected and approved, by not less than five of the nine persons selected to
serve on the Parent Board or not less than five of the nine members of the
Parent Board, as the case may be.
(h) The Chief Executive Officer of Metrocall during the
Interim Period may recommend for appointment one or more candidates to serve as
executive officers of Parent, which appointments shall require the approval of a
majority of the individuals selected to serve on the Parent Board.
(i) Arch does not intend, and does not intend for its
Subsidiaries, to take any action or omit to take any action which would or could
reasonably be expected to cause a "Change in Control" under Arch's Management
Long-Term Incentive Plan, the Arch Stock Plan or any related Restricted Stock
Agreement or Nonstatutory Stock Option Agreement or under the respective
employment agreements of Messrs. Xxxxx, Xxxxxxx and Xxxxxx, in each case as such
term is defined therein, or otherwise provide a reasonable basis for any
participant therein or
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party thereto, as applicable, to believe that a "Change in Control" has occurred
or will occur as a consequence of the consummation of the Transactions.
Section 6.12 Tax-Free Transaction.(a) The Merger is intended to
constitute an exchange described in Section 351 of the Code. From and after the
date of this Agreement, each party hereto shall use all reasonable efforts to
cause the Merger to qualify, and shall not, without the prior written consent of
the other parties hereto, knowingly take any actions or cause any actions to be
taken which could reasonably be expected to prevent the Merger from qualifying
as an exchange described in Section 351 of the Code. If the Merger shall fail to
qualify as an exchange described in Section 351 of the Code, then the parties
hereto agree to negotiate in good faith to restructure the Merger in order that
it shall otherwise qualify as a transaction that is in whole or in part tax-free
under the Code. Following the Effective Time, and consistent with any such
consent, neither of the Surviving Corporations nor Parent nor any of their
respective affiliates knowingly and voluntarily shall take any action or cause
any action to be taken which could reasonably be expected to cause the Merger to
fail to qualify as an exchange described in Section 351 of the Code or otherwise
as a transaction that is in whole or in part tax-free under the Code.
(b) Following the Effective Time, Parent shall conduct its
business and shall cause each of the Surviving Corporations to conduct its
business, in a manner which would not jeopardize the characterization of the
Merger as an exchange described in Section 351 of the Code or otherwise as a
transaction that is whole or in part tax-free under the Code. Parent will
provide certain factual representations as reasonably requested by Arch or
Metrocall as necessary to confirm that Parent will not take any action on or
after the Effective Time that would jeopardize the tax free nature of the Merger
as an exchange described in Section 351 of the Code or otherwise as a
transaction that is in whole or in part tax-free under the Code.
Section 6.13 Exemption From Liability Under Section 16(b).(a)
Provided that Arch and Metrocall delivers to Parent the Section 16 Information
(as defined below) with respect to Arch and Metrocall, respectively, prior to
the Effective Time, the Board of Directors of Parent (the "Parent Board"), or a
committee of Non-Employee Directors thereof (as such term is defined for
purposes of Rule 16b-3(d) under the Exchange Act), shall adopt a resolution in
advance of the Effective Time providing that the receipt by the Insiders (as
defined herein) of Parent Common Stock in exchange for shares of Arch Common
Stock or Metrocall Common Stock, as applicable, and of options on Parent Common
Stock upon assumption and conversion by Parent of Arch Stock Options or
Metrocall Stock Options, as applicable, in each case pursuant to the
Transactions and to the extent that such securities are listed in the Section 16
Information, are intended to be exempt from liability pursuant to Rule 16b-3
under the Exchange Act.
(b) "Section 16 Information" means information accurate in all
respects regarding the Insiders, the number of shares of Arch Common Stock or
Metrocall Common Stock, as applicable, or other equity securities thereof deemed
to be beneficially owned by each Insider and expected to be exchanged for Parent
Common Stock in connection with the Merger.
(c) "Insiders" means those officers and directors of Arch and
Metrocall who are subject to the reporting requirements of Section 16(a) of the
Exchange Act.
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Section 6.14 Directors of Parent and Surviving Corporations.
(a) As of the Effective Time, (i) eight of the nine directors
constituting the full Parent Board shall be as set forth in Section 1 of
Schedule A attached hereto, and (ii) the ninth director of the Parent Board
shall be the individual nominated by the Arch Board to serve on the Parent Board
as set forth in Section 5 of Schedule A (or if such individual is unable to
serve on the Parent Board as a result of death or incapacitation, the individual
nominated by the Arch Board to serve on the Parent Board as the alternate ninth
director as set forth in Section 6 of Schedule A), and Section 1 of Schedule A
shall be amended accordingly. The parties intend that the selection of the ninth
member of the Parent Board shall be deemed to have been made by the Arch Board
and shall not constitute or give rise, upon consummation of the Transactions, to
a "Change in Control" under Arch's Management Long-Term Incentive Plan, the Arch
Stock Plan or any related Restricted Stock Agreement or under the respective
employment agreements of Messrs. Xxxxx, Xxxxxxx and Xxxxxx. Immediately after
the Effective Time, the Chairman of the Parent Board shall be the member of the
Metrocall Board designated as such on Section 1 of Schedule A; provided that if
prior to the Effective Time such person is unable or unwilling to serve in such
capacity, another person selected to serve on the Parent Board will be promptly
selected and approved to serve as the Chairman of the Parent Board by not less
than five of the nine persons selected to serve on the Parent Board, and Section
1 of Schedule A shall be amended accordingly
(b) As of the Effective Time, the directors constituting the
Audit Committee, Compensation Committee and Nominating and Governance Committee
of the Parent Board shall be as set forth in Sections 2, 3 and 4, respectively,
of Schedule A attached hereto, each such Person to serve from the Effective Time
until his or her successor has been duly elected and qualified, or until his or
her earlier death, resignation, or removal in accordance with the Parent
Certificate of Incorporation and Parent Bylaws. The Chairman of each of the
Audit Committee, Compensation Committee and Nominating and Governance Committee
of the Parent Board shall be selected and approved to so serve by a majority of
persons selected to serve on the Parent Board.
(c) In the event that any individual listed in Sections 1, 2,
3 or 4 of Schedule A who is a member of the Metrocall Board on the date hereof
is unable or unwilling to serve on the Parent Board or any committee thereof as
of the Effective Time, then, prior to the Effective Time, the Metrocall Board
shall designate a candidate to replace such individual, which candidate shall be
approved by the Arch Board, such approval not to be unreasonably withheld, and
the relevant sections of Schedule A shall be amended accordingly.
(d) In the event that any individual listed in Sections 1, 2,
3 or 4 Schedule A who is a member of the Arch Board on the date hereof is unable
or unwilling to serve on the Parent Board or any committee thereof as of the
Effective Time, then, prior to the Effective Time, the Arch Board shall
designate a candidate to replace such individual, which candidate shall be
approved by the Metrocall Board, such approval not to be unreasonably withheld,
and the relevant section(s) of Schedule A shall be amended accordingly.
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(e) Each of Metrocall and Arch shall take such action, and
shall cause Parent to take such action, as shall reasonably be deemed by either
thereof to be advisable to give effect to the provisions set forth in this
Section 6.14.
(f) Each of the foregoing Persons shall serve from the
Effective Time until his or her successor has been duly elected and qualified,
or until his or her earlier death, resignation, or removal in accordance with
the Parent Certificate of Incorporation and Parent Bylaws.
Section 6.15 Redemption of Notes.Prior to the Closing Date, Arch
shall cause Arch Holdings, Inc. ("Arch Holdings") to redeem in full all
outstanding 12% Subordinated Secured Compounding Notes due 2009, in accordance
with the Indenture, dated May 29, 2002, among Arch Holdings, the guarantors
listed therein and The Bank of New York, as Trustee.
Section 6.16 Redemption of Preferred Stock.On or prior to the
earlier of the record date Metrocall Stockholders Meeting and June 30, 2004,
Metrocall shall redeemed, or shall have caused the redemption of, all issued and
outstanding shares of Metrocall Preferred Stock, and shall have defeased, or
caused the defeasance, all shares of Metrocall Preferred Stock reserved for
issuance under the Metrocall Plan of Reorganization. On or prior to the mailing
of Joint Proxy Statement/Prospectus, Metrocall shall have delivered the required
notice of such redemption or defeasance, as applicable.
Section 6.17 Control of Other Party's Business.Nothing contained in
this Agreement shall give any party, directly or indirectly, the right to
control or direct the operations of any other party prior to the consummation of
the Mergers. Prior to the consummation of the Mergers, each party shall
independently exercise, consistent with the terms and conditions of this
Agreement, complete control and supervision over its operations.
ARTICLE VII
CONDITIONS
Section 7.1 Conditions to Each Party's Obligation to Effect the
Merger.The respective obligations of each party to effect the Merger shall be
subject to the fulfillment at or prior to the Closing Date of the following
conditions:
(a) the Arch Stockholders' Approval and the Metrocall
Stockholders' Approval;
(b) the Registration Statement shall have been declared
effective by the SEC in accordance with the provisions of the Securities Act,
and no stop order suspending such effectiveness shall have been issued and
remain in effect and no proceeding for that purpose shall have been instituted
by the SEC or any state regulatory authorities;
(c) the shares of Parent Common Stock issuable in the Merger
and those to be reserved for issuance upon exercise of stock options shall have
been authorized for listing on Nasdaq upon official notice of issuance;
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(d) no preliminary or permanent injunction or other order or
decree by any federal or state court which prevents, prohibits or makes illegal
the consummation of the Merger shall have been issued and remain in effect (each
party agreeing to use its reasonable efforts to have any such injunction, order
or decree lifted);
(e) no statute, rule or regulation shall have been enacted by
any state or federal government or governmental agency in the United States
which would prevent or prohibit the consummation of the Merger or make the
Merger illegal;
(f) any waiting period applicable to consummation of the
Merger under the HSR Act shall have expired or been terminated;
(g) the FCC shall have granted its consent to the Merger; and
(h) the number of Appraisal Shares shall not exceed 8% of the
total number of Metrocall Fully Diluted Shares as of the Effective Time.
Section 7.2 Additional Conditions to Obligation of Arch to Effect
the Merger.Unless waived by Arch, the obligation of Arch to effect the Merger
shall be subject to the fulfillment at the Closing Date of the following
additional conditions:
(a) (i) Metrocall shall have performed in all material
respects its obligations contained in this Agreement required to be performed on
or prior to the Closing Date, (ii) the representations and warranties of
Metrocall contained in this Agreement (x) that are qualified as to Metrocall
Material Adverse Effect shall be true and correct on and as of the date made and
(except to the extent that such representations and warranties speak as of an
earlier date, in which case on and as of that date) on and as of the Closing
Date as if made at and as of such date and (y) that are not qualified as to
Metrocall Material Adverse Effect shall be true and correct (without regard to
any materiality qualifier in any such representations or warranties) on and as
of the date made and (except to the extent that such representations and
warranties speak as of an earlier date, in which case on and as of the date) on
and as of the Closing Date as if made at and as of such date, except for
failures of the representations and warranties referred to in this clause (ii)
to be true and correct as would not reasonably be expected to have, individually
or in the aggregate, a Metrocall Material Adverse Effect, and (iii) Arch shall
have received a certificate of the Chief Executive Officer of Metrocall to that
effect;
(b) between the date hereof and the Effective Time, there
shall not have occurred any Metrocall Material Adverse Effect; and
(c) Arch shall have received a written opinion of Xxxxxx &
Xxxxxxx, in form and substance reasonably acceptable to it, dated as of the
Closing Date to the effect that, on the basis of the facts, representations and
assumptions set forth or referred to in such opinion, for U.S. federal income
tax purposes the Merger will constitute an exchange described in Section 351 of
the Code. In rendering such opinion, counsel to Arch shall be entitled to rely
upon assumptions and representations reasonably satisfactory to such counsel,
including representations set forth in certificates of officers of Parent, Arch
Acquiring Sub, Metrocall Acquiring Sub, Arch and Metrocall.
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Section 7.3 Additional Conditions to Obligation of Metrocall to
Effect the Merger.Unless waived by Metrocall, the obligation of Metrocall to
effect the Merger shall be subject to the fulfillment at the Closing Date of the
following additional conditions:
(a) (i) Arch shall have performed in all material respects its
obligations contained in this Agreement required to be performed on or prior to
the Closing Date, (ii) the representations and warranties of Arch contained in
this Agreement (x) that are qualified as to Arch Material Adverse Effect shall
be true and correct on and as of the date made and (except to the extent that
such representations and warranties speak as of an earlier date, which case on
and as of that date) on and as of the Closing Date as if made at and as of such
date and (y) that are not qualified as to Arch Material Adverse Effect shall be
true and correct (without regard to any materiality qualifier in any such
representations or warranties) on and as of the date made and (except to the
extent that such representations and warranties speak as of an earlier date, in
which case on and as of the date) on and as of the Closing Date as if made at
and as of such date, except for failures of the representations and warranties
referred to in this clause (ii) to be true and correct as would not reasonably
be expected to have, individually or in the aggregate, an Arch Material Adverse
Effect, and (iii) Metrocall shall have received a certificate of the Chief
Executive Officer of Arch to that effect;
(b) Between the date hereof and the Effective Time, there
shall not have occurred any Arch Material Adverse Effect; and
(c) Metrocall shall have received a written opinion of Xxxxxxx
Xxxx & Xxxxx LLP, in form and substance reasonably acceptable to it, dated as of
the Closing Date to the effect that, on the basis of the facts, representations
and assumptions set forth or referred to in such opinion, for U.S. federal
income tax purposes the Merger will constitute an exchange described in Section
351 of the Code. In rendering such opinion, counsel to Metrocall shall be
entitled to rely upon assumptions and representations reasonably satisfactory to
such counsel, including representations set forth in certificates of officers of
Parent, Arch Acquiring Sub, Metrocall Acquiring Sub, Arch and Metrocall.
ARTICLE VIII
TERMINATION
Section 8.1 Termination.This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time, notwithstanding
any requisite adoption and approval of this Agreement, as follows:
(a) by mutual written consent duly authorized by the Metrocall
Board and the Arch Board;
(b) by either Metrocall or Arch, if the Effective Time shall
not have occurred on or before December 31, 2004; provided, however, that in the
event that all conditions set forth in Article VII are satisfied or waived and
the Companies have not consummated the Transactions due to a failure to obtain
on reasonable terms the financing required to pay the Cash Election Price, then
such date may be extended for no longer than 60 days by either Metrocall or Arch
by providing written notice thereof to the other Person on or
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prior to December 31, 2004; provided further, however, that the right to
terminate this Agreement under this Section 8.1(b) shall not be available to any
party whose failure to fulfill any obligation under this Agreement shall have
caused, or resulted in, the failure of the Effective Time to occur on or before
such date;
(c) by either Metrocall or Arch, if any injunction, order or
decree of the type described in Section 7.1(d) shall have been entered and shall
have become final and nonappealable, provided, that the party seeking to
terminate this Agreement pursuant to this Section 8.1(c) shall have used its
reasonable best efforts to prevent the entry of and to remove such injunction,
order or decree;
(d) by Arch, if prior to the Metrocall Stockholders' Approval,
(i) the Metrocall Board withdraws or in any materially adverse respect modifies
or changes its recommendation of this Agreement or the Merger or shall have
resolved to do so; or (ii) the Metrocall Board shall have recommended to the
stockholders of Metrocall a Competing Transaction or shall have resolved to do
so;
(e) by Metrocall if, prior to the Arch Stockholders' Approval,
(i) the Arch Board withdraws or in any materially adverse respect modifies or
changes its recommendation of this Agreement or the Merger or shall have
resolved to do so, or (ii) the Arch Board shall have recommended to the
stockholders of Arch a Competing Transaction or shall have resolved to do so;
(f) by either Arch or Metrocall if (i) this Agreement and the
Merger shall fail to receive the requisite votes for the Metrocall Stockholders'
Approval at the Metrocall Stockholders Meeting (assuming the existence of a
quorum where a vote was taken, and including any adjournment of such meeting) or
(ii) this Agreement and the Merger shall fail to receive the requisite votes for
the Arch Stockholders' Approval at the Arch Stockholders Meeting (assuming the
existence of a quorum where a vote was taken, and including any adjournment of
such meeting);
(g) by Arch, upon a breach of any representation, warranty,
covenant or agreement on the part of Metrocall set forth in this Agreement, or
if any representation or warranty of Metrocall shall have become untrue,
incomplete or incorrect, in either case such that the conditions set forth in
Section 7.2(a) would not be satisfied (a "Terminating Metrocall Breach");
provided, however, that Metrocall shall have 30 days after written notice of
such default, specifying in reasonable detail the nature of such default, is
given to Metrocall by Arch to cure such Terminating Metrocall Breach, and Arch
may not terminate this Agreement under this Section 8.1(g), if such Terminating
Metrocall Breach is curable by Metrocall through the exercise of its reasonable
efforts within such 30-day period and for so long as Metrocall continues to
exercise such reasonable efforts; and provided further, however, that the
immediately preceding proviso shall not in any event be deemed to extend any
date set forth in Section 8.1(b);
(h) by Metrocall, upon breach of any representation, warranty,
covenant or agreement on the part of Arch set forth in this Agreement, or if any
representation or warranty of Arch shall have become untrue, incomplete or
incorrect, in either case such that the conditions
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set forth in Section 7.3(a) would not be satisfied (a "Terminating Arch
Breach"); provided, however, that Arch shall have 30 days after written notice
of such default, specifying in reasonable detail the nature of such default, is
given to Arch by Metrocall to cure such Terminating Arch Breach, and Metrocall
may not terminate this Agreement under this Section 8.1(h), if such Terminating
Arch Breach is curable by Arch through the exercise of its reasonable efforts
within such 30-day period and for so long as Arch continues to exercise such
reasonable efforts; and provided further, however, that the immediately
preceding proviso shall not in any event be deemed to extend any date set forth
in Section 8.1(b);
(i) by Metrocall, if, prior to the Metrocall Stockholders'
Approval, the Metrocall Board determines in accordance with Section 5.2 to
approve a Competing Transaction, but only after Metrocall (A) provides Arch with
no less than five Business Days notice of its determination to approve such
Competing Transaction, including all material terms thereof, (B) within such
period, has in good faith negotiated, and has caused its financial and legal
advisors to negotiate, with Arch to make such adjustments in the terms and
conditions of this Agreement as would cause the transactions contemplated by
this Agreement to be more favorable, from a financial point of view, to the
stockholders of Metrocall than such Competing Transaction, and (C) taking into
account any amendments made to this Agreement pursuant to clause (B), the
Metrocall Board determines in good faith that the Competing Transaction is more
favorable, from a financial point of view, to the stockholders of Metrocall than
the transactions contemplated by this Agreement, provided that Metrocall's right
to terminate this Agreement under this Section 8.1(i) shall not be available if
Metrocall is then in breach of Section 5.2; or
(j) by Arch, if, prior to the Arch Stockholders' Approval, the
Arch Board determines in accordance with Section 5.2 to approve a Competing
Transaction, but only after Arch (A) provides Metrocall with no less than five
Business Days notice of its determination to approve such Competing Transaction,
including all material terms thereof, (B) within such period, has in good faith
negotiated, and has caused its financial and legal advisors to negotiate, with
Metrocall to make such adjustments in the terms and conditions of this Agreement
as would cause the transactions contemplated by this Agreement to be more
favorable, from a financial point of view, to the stockholders of Arch than such
Competing Transaction, and (C) taking into account any amendments made to this
Agreement pursuant to clause (B), the Arch Board determines in good faith that
the Competing Transaction is more favorable, from a financial point of view, to
the stockholders of Arch than the transactions contemplated by this Agreement,
provided that Arch right to terminate this Agreement under this Section 8.1(j)
shall not be available if Arch is then in breach of Section 5.2.
Section 8.2 Effect of Termination.(a) Except as provided in this
Section 8.2 and Section 8.3, in the event of termination of this Agreement
pursuant to Section 8.1, this Agreement shall forthwith become void, there shall
be no liability under this Agreement on the part of any party hereto or any
party's affiliates or any party's officers or directors, and all rights and
obligations of each party hereto shall cease, provided, however, that (i) the
provisions of Sections 6.2, 6.6, 8.2, and 8.3, Article IX shall survive and (ii)
subject to Section 8.3(d), nothing herein shall relieve any party hereto from
liability for the willful or intentional breach of any of its representations
and warranties or the willful or intentional breach of any of its covenants or
agreements set forth in this Agreement.
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(b) For a period of twelve months from the date of any
termination of this Agreement, neither Company, nor any of their respective
Subsidiaries, shall, directly or indirectly, solicit the employment of any
employee of the other Company or its Subsidiaries, except that this Section
8.2(b) shall not prohibit either Company or its Subsidiaries from (i)
advertising employment opportunities in any national newspaper, trade journal or
other publication in a major metropolitan area, or any third party Internet
website posting, or negotiating with, offering employment to or employing such
Persons contacted through such medium or (ii) participating in any third party
hiring fair or similar event open to the public or negotiating with, offering
employment to or employing such Persons contacted through such medium.
Section 8.3 Termination Fee.
(a) In the event that (i) either Company shall terminate this
Agreement pursuant to Section 8.1(f)(i) and, in either case, at the time of such
termination there shall exist or be proposed a Competing Transaction in respect
of Metrocall which is consummated or with respect to which Metrocall enters into
a definitive agreement within 12 months thereafter, (ii) Arch shall terminate
this Agreement pursuant to Section 8.1(d), or (iii) Metrocall shall terminate
this Agreement pursuant to Section 8.1(i), then Metrocall shall pay to Arch $12
million, promptly after demand for payment is made to Metrocall or, in the case
of subpart (i) hereof, after the execution and delivery of such agreement or the
consummation of such Competing Transaction.
(b) In the event that (i) either Company shall terminate this
Agreement pursuant to Section 8.1(f)(ii) and, in either case, at the time of
such termination there shall exist or be proposed a Competing Transaction in
respect of Arch which is consummated or with respect to which Arch enters into a
definitive agreement within 12 months thereafter, (ii) Metrocall shall terminate
this Agreement pursuant to Section 8.1(e), or (iii) Arch shall terminate this
Agreement pursuant to Section 8.1(j), then Arch shall pay to Metrocall $12
million, promptly after demand for payment is made to Arch or, in the case of
subpart (i) hereof, after the execution and delivery of such agreement or the
consummation of such Competing Transaction.
(c) Any payment required to be made pursuant to this Section
8.3 shall be made not later than two Business Days after (i) delivery to the
paying party of notice of demand for payment, (ii) the execution of a definitive
agreement relating to a Competing Transaction or (iii) the consummation of such
Competing Transaction (in the case of clause (ii) or (iii), the paying Company
shall promptly notify the other Company of such event and the other Company
shall designate an account for such payment in writing), as required by this
Section 8.3, and shall be made by wire transfer of immediately available funds
to an account designated by the other Company in the notice of demand for
payment, or in the case of clause (ii) or (iii), other written instruction. In
the event both Arch and Metrocall would otherwise be entitled to payments under
Section 8.3 (a) and (b) respectively, neither Company shall be required to make
any payment under this Section 8.3. In no event shall either Company be entitled
to collect amounts pursuant to this Section 8.3 relating to more than one
specified event.
(d) In the event fees are payable under this Section 8.3, such
fees set forth in this Section 8.3 shall constitute the sole and exclusive
remedy for any loss, liability, damage
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or claim arising out of or in connection with any nonperformance of a covenant,
breach, failure of a condition precedent or termination of this Agreement.
(e) Each of the parties acknowledge that the agreements
contained in Section 8.3 are an integral part of the Transactions, and that,
without these agreements, the other party would not enter into this Agreement;
accordingly, if either of the parties fails to pay in a timely manner the
amounts due pursuant to Section 8.3 and, in order to obtain such payment, the
other party makes a claim that results in a judgment against the first party for
the amounts set forth in this Section 8.3, the first party shall pay the other
party its costs and expenses (including attorney's fees and expenses) in
connection with such suit, together with interest on the applicable amounts at
the prime rate as set forth in The Wall Street Journal (Northeastern Edition),
in effect on the date such payment was originally required to be made.
ARTICLE IX
GENERAL PROVISIONS
Section 9.1 Non-Survival of Representations and Xxxxxxxxxx.Xx
representations, warranties or obligations in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the Merger, and
after the Effective Time of the Merger neither Metrocall nor Arch, or their
respective officers or directors, shall have any further obligation with respect
thereto, except for covenants and agreements which by their terms expressly
contemplate performance after the Effective Time, including any such covenants
and agreements contained in Articles II and IX and in Sections 1.3, 1.4, 1.5,
1.6, 2.1(b), 2.1(d), 6.1(h) and (i), 6.2, 6.6, 6.9 and 6.12(b) (including any
factual representations set forth in a certificate delivered to Arch or
Metrocall pursuant thereto), all of which shall survive the Merger.
Section 9.2 Amendments and Waivers; Delays and Omissions.(a) The
provisions of this Agreement may not be amended, modified, supplemented or
terminated, and waivers or consents to departure from the provisions hereof may
not be given, except by written instrument duly executed by the parties hereto
by action taken by or on behalf of their respective boards of directors at any
time prior to the Effective Time; provided, however, that after the Arch
Stockholders' Approval and the Metrocall Stockholders' Approval, no waiver or
amendment may be made, except such waivers and amendments that have received the
requisite stockholder approval and such waivers and amendments that are
permitted to be made without stockholder approval under the Delaware General
Corporation Laws.
(b) Except as expressly provided herein, no delay or omission
to exercise any right, power or remedy accruing to any party, upon any breach of
default of another party under this Agreement, shall impair any such right,
power or remedy of such party nor shall it be construed to be a waiver of any
such breach or default, or an acquiescence therein, or of or in any similar
breach or default thereafter occurring; nor shall any waiver of any single
breach or default be deemed a waiver of any other breach or default theretofore
or thereafter occurring. Any waiver of compliance with the performance of any
obligation or other act of any other party hereto shall be valid only if set
forth in an instrument in writing signed by the party or parties to be bound
thereby.
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Section 9.3 Notices.All notices and other communications provided
for or permitted hereunder shall be made in writing by hand delivery, facsimile,
any nationally recognized courier guaranteeing overnight delivery, or first
class registered or certified mail, return receipt requested, postage prepaid,
addressed to the applicable party at the address set forth below or such other
address as may hereafter be designated by such party to the other parties in
accordance with the provisions of this Section:
(a) If to Metrocall, to:
Metrocall Holdings, Inc.
0000 Xxxxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
Facsimile: (000) 000-0000
With a copy to:
Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxx, Esq.
Xxxxxxx X. Xxxxx, Esq.
Facsimile: (000) 000-0000
(b) If to Arch, to:
Arch Wireless, Inc.
0000 Xxxx Xxxx Xxxxx,
Xxxxx 000
Xxxxxxxxxxx, XX 00000
Attention: C. Xxxxxx Xxxxx, Xx.
Facsimile: (000) 000-0000
With a copy to each of:
Arch Wireless, Inc.
0000 Xxxx Xxxx Xxxxx,
Xxxxx 000
Xxxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx, Xx.
Facsimile: (000) 000-0000
Arch Wireless, Inc.
0000 Xxxx Xxxx Xxxxx,
Xxxxx 000
Xxxxxxxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxx, Esq.
Facsimile: (000) 000-0000
-00-
Xxxxxx & Xxxxxxx
000 Xxxxxxxx Xxxxxx, XX, Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
Xxxxxxx X. X'Xxxxx, Esq.
Facsimile: (000) 000-0000
All such notices and communications shall be deemed to have been
duly given: at the time delivered, if delivered by hand; when noted on a
confirmation report (or if such delivery date is not a Business Day, on the next
Business Day), if sent by facsimile; on the next Business Day, if timely
delivered to a nationally recognized courier guaranteeing overnight delivery; if
and when received, if deposited in the United States mail, postage prepaid,
certified or registered, return receipt requested.
Section 9.4 Binding Agreement; No Assignment.This Agreement shall
inure solely to the benefit of and be binding upon each of the parties hereto.
This Agreement shall not be assigned by any party by operation of law or
otherwise. Except as otherwise provided in Sections 6.9 and 6.11 herein, this
Agreement is not intended to confer upon any Person, except for the parties
hereto, any rights or remedies hereunder.
Section 9.5 Counterparts.This Agreement may be executed in
counterparts (including by facsimile), each of which, when so executed and
delivered, shall be deemed to be an original and enforceable, but all of which,
taken together, shall constitute one and the same instrument.
Section 9.6 Descriptive Headings, Etc.The headings in this Agreement
are for convenience of reference only and shall not limit or otherwise affect
the meaning of terms contained herein. Unless the context of this Agreement
otherwise requires: (i) words of any gender shall be deemed to include each
other gender; (ii) words using the singular or plural number shall also include
the plural or singular number, respectively; (iii) the words "hereof", "herein"
and "hereunder" and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement, and Section and paragraph references are to the Sections and
paragraphs of this Agreement; (iv) the word "including" and words of similar
import when used in this Agreement means "including, without limitation," unless
otherwise specified; (v) "or" is not exclusive; (vi) provisions apply to
successive events and transactions; (vii) "knowledge", with respect to any
party, means the actual knowledge of the executive officers of that party; and
(viii) "Business Day" means any day on which the principal offices of the SEC in
Washington, D.C. are open to accept filings, other than any such day banks in
New York City are permitted or required by law to be closed.
Section 9.7 Xxxxxxxxxxxx.Xx the event that any one or more of the
provisions, paragraphs, words, clauses, phrases or sentences contained herein,
or the application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision, paragraph, word, clause, phrase or
sentence in every other respect and of the other remaining provisions,
paragraphs, words, clauses, phrases or sentences hereof shall not be in any way
impaired, it being intended that all rights, powers and privileges of the
parties hereto shall be enforceable to the fullest extent
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permitted by law; provided, that this Section 9.7 shall not cause this Agreement
to differ materially from the intent of the parties as herein expressed.
Section 9.8 Governing Law.This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without giving
effect to the conflict of laws principles thereof).
Section 9.9 Entire Agreement.
(a) This Agreement, including the Arch Disclosure Schedule and
the Metrocall Disclosure Schedule, the Ancillary Agreements and the related
documents and instruments delivered pursuant to this Agreement, together with
any other written agreements delivered by the parties substantially concurrently
with this Agreement (collectively, the "Other Agreements"), are intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein; it being understood that the
Nondisclosure Agreement shall continue in full force and effect until the
Closing and shall survive any termination of this Agreement. There are no
restrictions, promises, representations, warranties, covenants or undertakings
relating to such subject matter, other than those set forth or referred to
herein or in the Other Agreements. This Agreement and the Other Agreements
supersede all prior agreements and understandings between the Companies and the
other parties to this Agreement, both written and oral, with respect to such
subject matter.
(b) The Exhibits and Schedules identified in this Agreement
are incorporated herein by reference and made a part hereof.
Section 9.10 Consent to Jurisdiction.Each party to this Agreement
hereby irrevocably and unconditionally agrees that any action, suit or
proceeding, at law or equity, arising out of or relating to this Agreement or
any agreements or transactions contemplated hereby may only be brought in any
federal court of the Southern District of New York or any state court located in
New York County, State of New York, and hereby irrevocably and unconditionally
expressly submits to the personal jurisdiction and venue of such courts for the
purposes thereof and hereby irrevocably and unconditionally waives (by way of
motion, as a defense or otherwise) any and all jurisdictional, venue and
convenience objections or defenses that such party may have in such action, suit
or proceeding. Each party hereby irrevocably and unconditionally consents to the
service of process of any of the aforementioned courts. Nothing herein contained
shall be deemed to affect the right of any party to serve process in any manner
permitted by law or commence legal proceedings or otherwise proceed against any
other party in any other jurisdiction to enforce judgments obtained in any
action, suit or proceeding brought pursuant to this Section.
Section 9.11 Further Assurances.Each party hereto shall do and
perform or cause to be done and performed all such further acts and things and
shall execute and deliver all such other agreements, certificates, instruments
and documents as any other party hereto reasonably may request in order to carry
out the intent and accomplish the purposes of this Agreement and the
consummation of the Transactions. Any out-of-pocket costs associated with
complying with this Section shall be borne by the requesting party.
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Section 9.12 Construction.The parties hereto acknowledge that each
of them has had the benefit of legal counsel of its own choice and has been
afforded an opportunity to review this Agreement with its legal counsel and that
this Agreement shall be construed as if jointly drafted by the parties.
Section 9.13 Waiver of Jury Trial.EACH OF THE PARTIES HEREBY
IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING, WHETHER AT
LAW OR EQUITY, BROUGHT BY ANY OF THEM IN CONNECTION WITH THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
Section 9.14 Specific Performance.The parties hereto agree that
irreparable damage would occur in the event any of the provisions of this
Agreement were not to be performed in accordance with the terms hereof and that
the parties shall be entitled to specific performance of the terms hereof in
addition to any other remedies at law or in equity.
[Signatures on following page]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
signed and delivered by their respective officers as of the date first written
above.
WIZARDS-PATRIOTS HOLDING, INC.
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chief Executive Officer
WIZARDS ACQUIRING SUB, INC.
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chief Executive Officer
METROCALL HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chief Executive Officer
PATRIOTS ACQUIRING SUB, INC.
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chief Executive Officer
ARCH WIRELESS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Director
