1
UNIT PURCHASE AGREEMENT
AMONG
METROCALL, INC.
AND
CERTAIN PURCHASERS
DATED AS OF NOVEMBER 15, 1996
2
TABLE OF CONTENTS
PAGE
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ARTICLE I
AUTHORIZATION, PURCHASE AND SALE OF UNITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.01 Authorization of the Preferred Stock and the Units . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
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1.02 Authorization of the Conversion Shares and Warrant Shares . . . . . . . . . . . . . . . . . . . . . . . . 1
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1.03 Authorization of Additional Preferred Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
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1.04 Purchase and Sale of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
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(a) The Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
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(b) Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
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ARTICLE II
CERTAIN TERMS OF THE PREFERRED SHARES A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.01 Certain Terms of the Preferred Shares and Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
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2.02 Replacement of Preferred Share Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
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2.03 Registration; Transfer; Registration of Transfer and Exchange of Preferred Shares . . . . . . . . . . . . 3
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2.04 Form of Preferred Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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2.05 PPN Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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2.06 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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ARTICLE III
CONDITIONS TO CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.01 Conditions to Purchasers' Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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(a) Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
------------------------------
(b) Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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(c) All Proceedings to be Satisfactory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
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(d) A+ Network Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
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(e) Tender Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
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(f) Legal Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
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(g) Necessary Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
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(h) Credit Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
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(i) No Material Adverse Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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(j) Payment of Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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(k) No Injunctions, Restraining Order or Adverse Litigation 8
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(l) No Violation of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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(m) Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
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(n) Minimum Purchase of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
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(o) Legal Investment; Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
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(p) Voting Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
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(q) Increase in Authorized Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
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(r) Documentation at Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
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3.02 Conditions to the Company's Obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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(a) Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
------------------------------
(b) Purchasers' Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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(c) Injunction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.01 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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4.02 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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4.03 Authorization; Validity of Agreement; Company Action . . . . . . . . . . . . . . . . . . . . . . . . . 13
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4.04 Consents and Approvals; No Violations; Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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4.05 SEC Reports and Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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4.06 No Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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4.07 Absence of Certain Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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4.08 Employee Benefit Plans; ERISA; Labor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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4.09 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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4.10 No Default; Compliance with Applicable Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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4.11 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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4.12 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
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4.13 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
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4.14 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
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4.15 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
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4.16 Nasdaq Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
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ARTICLE V
AFFIRMATIVE COVENANTS OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.01 Financial and Business Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
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5.02 Notice of Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
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5.03 Consummation of the Merger and Tender Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
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5.04 Efforts to Obtain NASDAQ Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
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5.05 Expiration of Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
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ARTICLE VI
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.01 Representations by Purchasers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
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6.02 Sale of Preferred Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
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ARTICLE VII
CERTAIN SECURITIES LAW MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7.01 Representations by Purchasers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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7.02 Restrictions on Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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(a) Restrictive Legend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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(b) Termination of Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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ARTICLE VII
IMISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
8.01 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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8.02 No Waiver; Cumulative Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
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8.03 Amendments, Waiver and Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
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8.04 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
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8.05 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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8.06 Binding Effect; Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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8.07 Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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8.08 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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8.09 Obligations Several: Independent Nature of Purchasers' Rights 29
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8.10 Prior Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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8.11 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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8.12 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
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8.13 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
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8.14 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
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Index of Defined Terms
PAGE
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A+ Network . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Basic Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
CERCLA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Certificate of Designation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 12
Conversion Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
Environmental Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
ERISA Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
FCC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
Governmental Entity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8, 14
Indemnified Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
Indemnitees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Material Adverse Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Materials of Environmental Concern . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
MC Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
MC Employee Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
MC ERISA Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
MC Material Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
MC Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
MC Pending Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
MC SEC Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
multiemployer pension plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
Offer Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
Offeree . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
parachute payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
Pending Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Preferred Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
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Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
Restricted Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
SEC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
single employer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Tax Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
Tender Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
the Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
Transfer Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Voting Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
Warrant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Warrant Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Warrant Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
welfare plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
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UNIT PURCHASE AGREEMENT
THIS UNIT PURCHASE AGREEMENT (the "Agreement") is made as of November
15, 1996 among METROCALL, INC., a Delaware corporation (the "Company"), and
each of the entities listed on the signature pages and on the Schedule of
Purchasers attached as Exhibit A hereto (together with its respective
successors and assigns, each a "Purchaser" and, collectively, the
"Purchasers").
ARTICLE I
AUTHORIZATION, PURCHASE AND SALE OF UNITS
1.01 Authorization of the Preferred Stock and the Units. Pursuant
to its Amended and Restated Certificate of Incorporation, as amended (the
"Certificate of Incorporation"), the Company has established a class of
preferred stock designated as "Series A Convertible Preferred Stock" and
authorized the issuance of up to 810,000 shares of such preferred stock (each
such share, a "Preferred Share"). The Company has authorized the issuance and
sale to the Purchasers of 159,600 units (the "Units"), each Unit consisting of
one Preferred Share and one warrant (a "Warrant") representing the right to
purchase 18.266 shares of the Company's common stock, par value $.01 (the
"Common Stock").
1.02 Authorization of the Conversion Shares and Warrant Shares.
The Company has authorized and reserved 2,915,254 shares of Common Stock for
issuance upon exercise of the Warrants. The Company has authorized and
reserved 500,000 shares of Common Stock for issuance upon conversion of the
Preferred Shares into Common Stock. The Company's board of directors has
adopted a resolution approving an amendment to the Certificate of Incorporation
to increase the number of authorized shares of Common Stock from 33,500,000
shares to 50,000,000 shares, directing that such amendment be presented to the
holders of Common Stock for a vote at the next meeting of shareholders of the
Company in accordance with applicable Delaware law and recommending that the
holders of Common Stock approve the amendment. The Company will take all
action reasonably necessary or appropriate to solicit and obtain proxies and
votes in favor of the amendment from the holders of the requisite percentage
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of the Common Stock. As soon as practicable after the approval of such
amendment by the holders of the Common Stock, the Company will reserve not less
than 15,000,000 shares of Common Stock for issuance upon conversion of the
Preferred Shares. (The shares of Common Stock issuable upon conversion of the
Preferred Shares are referred to as the "Conversion Shares," and the shares of
Common Stock issuable upon exercise of the Warrants are referred to as the
"Warrant Shares.")
1.03 Authorization of Additional Preferred Shares. The Company has
authorized and reserved 650,400 Preferred Shares for issuance in payment of all
dividends on all Preferred Shares which is a sufficient number of Preferred
Shares based on the assumption that all such dividends will be made through the
issuance of additional Preferred Shares. (The Preferred Shares, the Warrants,
the Conversion Shares and the Warrant Shares are sometimes referred to herein
as the "Securities").
1.04 Purchase and Sale of Units.
(a) The Closing. The Company agrees to issue and sell to
each Purchaser, and, subject to and in reliance upon the representations,
warranties, terms and conditions of this Agreement, each Purchaser agrees to
purchase, the number of Units set forth next to such Purchaser's name on
Exhibit A hereto for a purchase price (the "Purchase Price") of $250 per Unit.
Such purchase and sale shall take place at a closing (the "Closing") to be held
on November 15, 1996 (the "Closing Date") at 9:00 a.m. Eastern Time, or on such
other date and at such time as may be mutually agreed, at the offices of
Xxxxxx, Xxxxxx & Xxxxxxxxx in Washington, D.C. At the Closing, the Company
will issue to each Purchaser a certificate or certificates ("Preferred Share
Certificates") representing the number of Preferred Shares purchased by such
Purchaser, and a certificate or certificates representing the number of
Warrants purchased by such Purchaser. At the Closing, each Purchaser will
deliver to the Company, by wire transfer of immediately available funds to an
account designated by the Company by written notice to each Purchaser, the
aggregate Purchase Price set forth next to such Purchaser's name on Exhibit A
hereto. If at the Closing, the Company shall fail to issue any Preferred
Shares or Warrants to any Purchaser as provided above in this Section 1.04(a),
or any of the conditions specified in Article III shall not have been
fulfilled, each Purchaser shall, at its election, be relieved of all further
obligations under this Agreement. In no event shall the Closing occur after
November 15, 1996.
(b) Use of Proceeds. The Company agrees to use the full
proceeds from the sale of the Units to pay down or retire existing debt of the
Company, to pay acquisition costs, fees and expenses and other transaction
costs, and for working capital purposes.
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ARTICLE II
CERTAIN TERMS OF THE PREFERRED SHARES AND WARRANTS
2.01 Certain Terms of the Preferred Shares and Warrants. The terms
of the Preferred Shares are set forth in the Certificate of Designation,
Number, Powers, Preferences and Relative, Participating, Optional and Other
Rights of Series A Convertible Preferred Stock (the "Certificate of
Designation") attached as Exhibit B hereto. The terms of the Warrants are set
forth in the Warrant Agreement of even date herewith (the "Warrant Agreement"),
by and between the Company and The First National Bank of Boston (the "Warrant
Agent") substantially in the form attached as Exhibit C hereto. This
Agreement, the Certificate of Designation, the Warrant Agreement and the
Registration Rights Agreement (as hereinafter defined) are referred to herein
as the "Basic Documents".
2.02 Replacement of Preferred Share Certificates. Upon receipt of
evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of any Preferred Share Certificate, and, if requested in the case
of any such loss, theft or destruction, upon delivery of an indemnity bond or
other agreement or security reasonably satisfactory to the Company, or, in the
case of any such mutilation, upon surrender and cancellation of any such
Preferred Share Certificate, the Company will issue a new Preferred Share
Certificate, of like tenor and amount, in lieu of such lost, stolen, destroyed
or mutilated Preferred Share Certificate; provided, however, if any Preferred
Share Certificate of which any Purchaser, its nominee, or any of its officers
or principals is the registered holder is lost, stolen or destroyed, the
affidavit of such principal or officer of such holder setting forth the
circumstances with respect to such loss, theft or destruction, together with an
agreement to indemnify the Company with respect thereto, shall be accepted as
satisfactory evidence thereof, and no bond or other security shall be required
as a condition to the execution and delivery by the Company of a new Preferred
Share Certificate in replacement of such lost, stolen or destroyed Preferred
Share Certificate.
2.03 Registration; Transfer; Registration of Transfer and Exchange
of Preferred Shares.
The Preferred Shares shall be issued in registered form only. The
Company, or a transfer agent appointed by the Company (the Company or such
designated agent, in such capacity, the "Preferred Share Agent"), shall number
and list each Preferred Share Certificate, as it is issued, in a register (the
"Preferred Share Register") which the Company or such agent shall maintain at
the principal executive offices of the Company or at such office specified in a
notice
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to the registered holders (the "Holders") of the Preferred Shares pursuant to
Section 8.04 of this Agreement (the "Office").
At the option of any Holder of Preferred Shares, any Preferred Share
Certificate may be exchanged at the Office for a new Preferred Share
Certificate (or new Preferred Share Certificates, in the same or different
denominations), upon payment of the charges (if any) hereinafter provided.
Whenever any Preferred Share Certificates are so surrendered for exchange the
Company shall execute, and, if applicable, the Preferred Share Agent shall
countersign and deliver, the Preferred Share Certificates that the Holder
making the exchange is entitled to receive.
Subject to compliance with the restrictions set forth in this
Agreement (including, without limitation, Section 7.02 hereof), the Preferred
Share Certificates shall be transferable only on the Preferred Share Register,
upon delivery thereof duly endorsed by the Holder or by his duly authorized
attorney or representative, or accompanied by proper evidence of succession,
assignment or authority to transfer. In all cases of transfer by an attorney,
the original power of attorney, duly approved, or a copy thereof, duly
certified, shall be deposited and remain with the Company or the Preferred
Share Agent. In case of transfer by executors, administrators, guardians or
other legal representatives, duly authenticated evidence of their authority
shall be produced, and may be required to be deposited and to remain with the
Preferred Share Agent in its discretion. Upon any registration of transfer,
the Company shall execute and, if applicable, the Preferred Share Agent shall
countersign and deliver, a new Preferred Share Certificate(s) to the Persons
entitled thereto. As used in this Agreement, "Person" means any natural
person, corporation, partnership, joint venture, limited liability company,
firm, association, joint-stock company, trust, unincorporated organization,
government or governmental agency or political subdivision or any other entity,
whether acting in an individual, fiduciary or other capacity.
All Preferred Share Certificates issued upon any registration of
transfer or exchange of Preferred Share Certificates shall be the valid
obligations of the Company, evidencing the same obligations, and entitled to
the same benefits under this Agreement, as the Preferred Share Certificates
surrendered for such registration of transfer or exchange.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Preferred Share Certificates. The Company may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration of transfer or exchange of
Preferred Share Certificates.
Any Preferred Share Certificate when duly endorsed in blank shall be
deemed negotiable, and when a Preferred Share Certificate shall have been so
endorsed, the Holder thereof may be treated by the Company, the Preferred Share
Agent and all other Persons dealing
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therewith as the absolute owner thereof for any purpose and as the Person
entitled to exercise the rights represented thereby, or the transfer thereof on
the Preferred Share Register, any notice to the contrary notwithstanding; but
until such transfer on the Preferred Share Register, the Company and the
Preferred Share Agent may treat the registered Holder thereof as the owner for
all purposes.
2.04 Form of Preferred Shares. The Preferred Share Certificates
shall be substantially in the form of Exhibit D hereto, and may have such
letters, numbers or other marks of identification and such legends printed,
lithographed or engraved upon them as the Company may deem appropriate and as
are not inconsistent with the provisions of this Agreement or the Certificate
of Designation.
2.05 PPN Application. The Company acknowledges that filing an
application with Standard & Poor's Corporation CUSIP Service Bureau is
necessary for the assignment of a Private Placement Number with respect to each
of the Preferred Shares and the Company consents to the filing with such Bureau
of all documents and materials required to be submitted with such application.
2.06 Taxes. The Company will pay all taxes (including interest and
penalties), other than taxes imposed on the income of the Purchasers, which may
be payable in respect of the execution and delivery of this Agreement or of the
issuance and delivery (but not the transfer) of any of the Securities.
ARTICLE III
CONDITIONS TO CLOSING
3.01 Conditions to Purchasers' Obligations. The obligation of each
Purchaser to purchase and pay for the Units at the Closing is subject to the
fulfillment by the Company or waiver by such Purchaser of each of the following
conditions:
(a) Representations and Warranties. Each of the
representations and warranties of the Company set forth in Article IV hereof
and in the Basic Documents shall have been true and correct in all material
respects when made and, except for representations expressly stated to have
been made as of a specific date, shall be true and correct in all material
respects on the Closing Date as if made on the Closing Date.
(b) Performance. The Company shall have performed and
complied in all material respects with all covenants and agreements contained
herein and received any and
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all consents, approvals or waivers necessary in order to complete the
transactions required to be performed or complied with by it or prior to or at
the Closing.
(c) All Proceedings to be Satisfactory. All corporate
and other proceedings to be taken by the Company in connection with the
transactions contemplated hereby and all documents incident thereto shall be
satisfactory in form and substance to the Purchasers, including, without
limitation, the following:
(i) the filing of the duly adopted Certificate of
Designation with the Secretary of State of the State of Delaware; and
(ii) written acknowledgment from The Nasdaq Stock
Market that the requirements of Rule 4460(i) of the Rules of the
National Association of Securities Dealers have been met with respect
to the issuance of the Securities;
and each Purchaser shall have received all such counterpart originals or
certified or other copies of such documents as it reasonably may request.
(d) A+ Network Merger. All conditions precedent to the
consummation of the merger (the "Merger") of A+ Network, Inc. ("A+ Network")
with and into the Company pursuant to that certain Agreement and Plan of
Merger, dated as of May 16, 1996, by and between the Company and A+ Network, as
amended (the "Merger Agreement"), shall have been satisfied, including each of
the conditions set forth in Article VI of the Merger Agreement, except for the
filing of the certificate of merger with the Secretary of State of the State of
Delaware and the filing of the articles of merger with the Tennessee Secretary
of State. The Company shall have delivered to each Purchaser a complete and
correct copy of the Merger Agreement (including all schedules, exhibits,
amendments, supplements, modifications and assignments thereto) executed by
each party thereto.
(e) Tender Offer. The tender offer (the "Tender Offer")
for the 11 7/8% Senior Subordinated Notes of A+ Network (the "A+ Notes") issued
under that certain indenture dated October 24, 1995 (the "A+ Network
Indenture"), between A+ Network and IBJ Xxxxxxxx Bank & Trust Company, as
trustee, shall have expired and all conditions precedent to the consummation of
the Tender Offer shall have been satisfied, including the conditions set forth
in "The Offer and the Solicitation -- Conditions of the Offer and the
Solicitation" of the Offer to Purchase for Cash All 11 7/8% Senior Subordinated
Notes due 2005 and Solicitation of Consents to Amendment of the Indenture
Relating to such Notes dated October 9, 1996, as amended as of the date hereof
(the "Tender Offer Statement," and together with the related consents and
letters of transmittal, documents and instruments to be delivered in connection
therewith, the "Tender Offer Materials"), except for (i) the Financing
Condition (as defined in
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the Tender Offer Statement); (ii) the Merger Condition (as defined in the
Tender Offer Statement); (iii) the acceptance of the Notes for payment by the
Company and (iv) payments of cash to purchase the Notes pursuant to the Tender
Offer and in respect of consents received. The Consent Solicitation (as that
term is defined in the Tender Offer Statement) shall have been completed and A+
Network and IBJ Xxxxxxxx Bank & Trust Company shall have executed that certain
First Supplemental Indenture dated November 14, 1996, which will become
effective upon the Merger. Not less than $121,500,000 in principal amount of
A+ Notes shall have been tendered and not withdrawn under the Tender Offer.
The Company shall have delivered to each Purchaser a complete and correct copy
of the A+ Network Indenture and the Tender Offer Materials (including all
schedules, exhibits, amendments, supplements, modifications and assignments
thereto).
(f) Legal Opinions. Each Purchaser and their counsel
shall have received (i) originally executed copies of one or more favorable
written opinions of Xxxxxx, Xxxxxx & Xxxxxxxxx, special counsel for the Company
and of Xxxxx & Xxxxxx, special communications counsel for the Company, in each
case in form and substance reasonably satisfactory to Purchasers and their
respective counsel, dated as of the Closing Date and setting forth
substantially the matters in the opinions designated in Exhibit E hereto and
Exhibit F hereto, respectively, and as to such other matters as each Purchaser
may reasonably request, (ii) letters from each of Xxxxxx, Xxxxxx & Xxxxxxxxx
and Xxxxx & Xxxxxx, respectively, indicating that the Purchasers are entitled
to rely on the opinions delivered by such firms in connection with the
consummation of the Merger and, in the case of Xxxxxx, Xxxxxx & Xxxxxxxxx, in
connection with the Merger, the Tender Offer and the Credit Agreement, and
(iii) evidence satisfactory to each Purchaser that the Company has requested
such counsel to deliver such opinions to each Purchaser.
(g) Necessary Consents. On or before the Closing Date,
the Company shall have obtained any required governmental authorizations with
respect to the Basic Documents and shall have obtained all material consents to
the transactions contemplated under the Basic Documents, of any Person required
under any contractual obligation or any other obligations (including any
obligations imposed by law) of the Company or any of its Subsidiaries. As
used in this Agreement, the word "Subsidiary" means, with respect to any party,
any corporation or other organization, whether incorporated or unincorporated,
of which at least a majority of the securities or other interests having by
their terms ordinary voting power to elect a majority of the Board of Directors
or others performing similar functions with respect to such corporation or
other organization is directly or indirectly owned or controlled by such party
or by any one or more of its Subsidiaries, or by such party and one or more of
its Subsidiaries.
(h) Credit Agreement. Other than the conditions set
forth in Section 3.3(b) of the Amended and Restated Loan Agreement dated as of
September 20, 1996, as
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amended (the "Credit Agreement"), all conditions set forth in Section 3.3 of
the Credit Agreement shall be satisfied or waived in writing by the
Administrative Agent (as defined therein) and the requisite Banks (as defined
therein), all conditions under the Credit Agreement to the making of not less
than $121,000,000 of Advances under the Facility B Commitment (as defined
therein) shall have been satisfied or waived in writing by the Administrative
Agent and the requisite Banks, and the Purchasers shall have received evidence
satisfactory to the Purchasers that the terms of the Basic Documents are
satisfactory to the requisite Banks for purposes of Section 3.3(b) of the
Credit Agreement. The Company shall have delivered to each Purchaser a
complete and correct copy of the Credit Agreement (including all schedules,
exhibits, amendments, supplements, modifications and assignments thereto)
executed by each party thereto.
(i) No Material Adverse Effect. Since December 31, 1995,
no Material Adverse Effect shall have occurred. As used in this Agreement, any
reference to "Material Adverse Effect" means any event, change or effect that
is materially adverse to the consolidated financial condition, businesses,
results of operations or cash flows of the Company and its Subsidiaries, taken
as a whole, or that impairs the ability of the Company to perform or the
Purchasers to enforce the obligations of the Company under the Basic Documents.
(j) Payment of Fees and Expenses. Without limiting the
provisions of Section 8.05 hereof, the Company shall have paid on or before the
Closing by wire transfer of immediately available funds, the fees, charges and
disbursements of each Purchaser including the fees and expenses of O'Melveny &
Xxxxx LLP and Xxxx, Scholer, Fierman, Xxxx & Handler, LLP, and such other fees
charges and disbursements to be paid by Company hereunder.
(k) No Injunctions, Restraining Order or Adverse
Litigation. No order, judgment or decree of any Governmental Entity shall
purport to enjoin or restrain any Purchaser from acquiring any Units on the
Closing Date. As of the Closing Date, there shall not be pending or, to the
knowledge of Company, threatened, any action, suit, proceeding, governmental
investigation or arbitration against or affecting Company or any of its
Subsidiaries or any property of Company or any of its Subsidiaries that has not
been disclosed by Company in writing pursuant to Section 4.09 prior to the
execution of this Agreement, and there shall have occurred no development not
so disclosed in any such action, suit, proceeding, governmental investigation
or arbitration so disclosed, that, in either event, could reasonably be
expected to have a Material Adverse Effect; and no injunction or other
restraining order shall have been issued and no hearing to cause an injunction
or other restraining order to be issued shall be pending or noticed with
respect to any action, suit or proceeding seeking to enjoin or otherwise
prevent the consummation of, or to recover any damages or obtain relief as a
result of, the transactions contemplated by this Agreement or the other Basic
Documents, including the Merger or the Tender Offer.
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(l) No Violation of Law. The acquisition of the Units
shall not violate any law including, without limitation, Regulations G, T or X
of the Board of Governors of the Federal Reserve System.
(m) Financial Statements. Company shall have delivered
to each Purchaser each of the financial statements described in Section 4.05.
(n) Minimum Purchase of Units. No fewer than 100,000
Units shall be purchased pursuant to this Agreement and the aggregate purchase
price for such Units shall not be less than $25,000,000.
(o) Legal Investment; Certificate. The purchase of the
Securities to be issued pursuant hereto shall be permitted under the laws and
regulations of any jurisdiction to which each Purchaser is subject (without
resort to any provision of any such law permitting limited investments by such
Purchaser without restriction as to the character of the particular
investment), and the Company shall, if requested by any Purchaser, provide an
officers' certificate, dated the date of the Closing, certifying as to such
matters as are reasonably requested to enable such Purchaser to determine
whether its purchase is so permitted.
(p) Voting Agreement. Each Purchaser shall have received
prior to or at the Closing a Shareholders Voting Agreement, executed by the
Stockholders identified on Annex A thereto (the "Voting Agreement"), in the
form attached as Exhibit G hereto.
(q) Increase in Authorized Shares. The Board of
Directors of the Company shall have adopted a resolution approving an amendment
to the Certificate of Incorporation to increase the number of authorized shares
of Common Stock from 33,500,000 shares to 50,000,000 shares, directing that
such amendment be presented to the holders of Common Stock for a vote at the
next meeting of shareholders of the Company in accordance with applicable
Delaware law and recommending that the holders of Common Stock approve the
amendment. Prior to or at the Closing, the Company shall have delivered to
each purchaser a complete and correct copy of such resolution certified by the
Secretary or Assistant Secretary of the Company.
(r) Documentation at Closing. Each Purchaser shall have
received prior to or at the Closing all of the following, each in form and
substance satisfactory to each Purchaser:
(i) The Warrant Agreement, executed by the
Company and the Warrant Agent and a certificate or certificates representing
the Warrants (duly executed in
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accordance with Section 1.03) issued to each Purchaser or a nominee or nominees
identified by such Purchaser;
(ii) A Registration Rights Agreement executed by
the Company and each Purchaser substantially in the form attached as Exhibit H
hereto (the "Registration Rights Agreement");
(iii) The Certificate of Designation, adopted by
the Board of Directors of the Company, as attested by the Secretary or
Assistant Secretary of the Company and filed with the Secretary of State of the
State of Delaware;
(iv) A certified copy of the Company's Amended and
Restated Certificate of Incorporation, as amended and the Company's Fourth
Amended and Restated Bylaws; a certified copy of the resolutions of the Board
of Directors evidencing approval of the Basic Documents, the Units, the
Preferred Shares, the Warrants and other matters contemplated hereby including
each of the matters specified in Article I hereof; and certified copies of all
documents evidencing other necessary corporate, shareholder or other action and
governmental approvals, if any, with respect to the Basic Documents, the Units,
the Preferred Shares and the Warrants;
(v) A certificate of the Secretary or an
Assistant Secretary of the Company which shall certify the names of the
officers authorized to sign this Agreement and the other Basic Documents and
issue the Units on behalf of the Company, together with the true signatures of
such officers. Each Purchaser may rely conclusively on such certificates until
it shall receive a further certificate of the Secretary or an Assistant
Secretary of the Company canceling or amending the prior certificate and
submitting the signatures of the officers named in such further certificate;
(vi) A certificate from a duly authorized officer
of the Company stating that (a) the representations and warranties contained in
Article IV hereof and the other Basic Documents or otherwise made by the
Company in writing in connection with the transactions contemplated hereby were
true and correct in all material respects when made and, except for
representations expressly stated to have been made as of a specific date, are
true and correct in all material respects on the date of the Closing as if made
on the date of the Closing; (b) the Company has performed and complied with all
covenants and agreements contained herein in all material respects and has
received any and all consents, approvals or waivers necessary in order to
complete the transactions required to be performed or complied with by it prior
to or on the date of the Closing; (c) no event shall have occurred and be
continuing as of the Closing, or would result from the consummation of the
purchase of the Units or the other transactions contemplated by the Basic
Documents, the Merger or the Tender Offer, that would
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constitute a "Triggering Event" under the Certificate of Designation or a
breach or violation of any Basic Document; and (d) the Company has delivered to
each Purchaser all documents and satisfied all conditions referred to in
Sections 3.01(d), (e), (g), (h) and (k) hereof; and
(vii) Evidence satisfactory to the Purchasers of
the satisfaction of the conditions set forth in this Article III.
3.02 Conditions to the Company's Obligations. The obligation of
the Company to issue and deliver the Securities on the Closing Date, as
provided in Article II hereof, is subject to the performance by the Purchasers
of their agreements theretofore to be performed hereunder and to the
fulfillment, prior thereto or concurrently therewith, of the following further
conditions:
(a) Representations and Warranties. Each of the
representations and warranties of the Purchasers contained in this Agreement
shall be true and correct in all material respects when made and shall be true
and correct in all material respects on the Closing Date as if made on the
Closing Date, except as otherwise affected by the transactions contemplated
hereby.
(b) Purchasers' Certificates. The Company shall have
received a certificate from each of the Purchasers, dated the Closing Date,
signed by a duly authorized representative of such Purchaser, certifying that
the conditions specified in the foregoing Section 3.02(a) with respect only to
such Purchaser hereof have been fulfilled.
(c) Injunction. There shall be no effective injunction,
writ, preliminary restraining order or any order of any nature issued by a
court of competent jurisdiction directing that the transactions provided for
herein or any of them not be consummated as herein provided.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
In order to induce each Purchaser to enter into this Agreement and
purchase the Units, the Company represents, warrants and covenants to each
Purchaser as follows.
4.01 Organization. (a) Each of the Company and its Subsidiaries
is a corporation duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation and has all requisite
corporate power and authority and all necessary governmental approvals to own,
lease and operate its properties and to carry on its
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business as now being conducted, except where the failure to have such
governmental approvals could not reasonably be expected to have a Material
Adverse Effect. The Company and each of its Subsidiaries is duly qualified or
licensed to do business and in good standing in each jurisdiction in which the
property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification or licensing necessary, except where
the failure to be so duly qualified or licensed and in good standing could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect or prevent the Company from consummating any of the transactions
contemplated hereby.
(b) The Company has heretofore made available to
Purchasers a complete and correct copy of the Amended and Restated Certificate
of Incorporation, as amended as of the date hereof, the Fourth Amended and
Restated By-Laws of the Company and the organizational documents of each of its
Subsidiaries, as currently in effect. Each such document is in full force and
effect and no other organizational documents are applicable to or binding upon
the Company or any Subsidiary.
(c) Schedule 4.01 identifies all Subsidiaries of the
Company.
4.02 Capitalization. (a) The authorized capital stock of the
Company consists of 33,500,000 shares of Common Stock, $.01 par value (the
"Common Stock") and 1,000,000 shares of preferred stock, $.01 par value.
Schedule 4.02 sets forth the (i) the number of issued and outstanding shares of
Common Stock as of the date hereof; (ii) a description of all unexpired options
to purchase Common Stock ("Company Options"), including number of shares,
exercise price, date of vesting and exercise date as well as a statement
describing outstanding Company options, (iii) all shares of Common Stock that
would be issuable by the Company pursuant to or in connection with each of the
acquisition agreements or transactions identified in Schedule 4.02, including
the Merger and the Tender Offer, and each other transaction contemplated to
occur on or before Closing Date (the "Pending Transactions"); and (iv) all
other shares of Common Stock issuable to any person pursuant to any existing
options, warrants, calls, preemptive (or similar) rights, subscriptions or
other rights, agreements, arrangements or commitments of any character. As of
the date hereof and immediately prior to the Closing, no shares of preferred
stock are issued and outstanding or held in the treasury of the Company, and no
shares of Common Stock are held in the treasury of the Company. The Company
has taken all necessary corporate, shareholder and other action to authorize
and reserve and to permit it to issue shares of Common Stock which may be
issued pursuant to Company Options or the transactions contemplated hereby.
There are no bonds, debentures, notes or other indebtedness having general
voting rights (or convertible into securities having such rights) ("Voting
Debt") of the Company or any of its Subsidiaries issued and outstanding.
Except as set forth in Schedule 4.02, as of the date hereof, (i) there are no
shares of capital stock of the Company authorized, issued or outstanding, (ii)
there are no existing options, warrants, calls,
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preemptive (or similar) rights, subscriptions or other rights, agreements,
arrangements or commitments of any character, relating to the issued or
unissued capital stock of the Company or any of its Subsidiaries, obligating
the Company or any of its Subsidiaries to issue, transfer or sell or cause to
be issued, transferred or sold any shares of capital stock or Voting Debt of,
or other equity interest in, the Company or any of its Subsidiaries or
securities convertible into or exchangeable for such shares or equity interest
or obligations of the Company or any of its Subsidiaries, and (iii) there are
no outstanding contractual obligations of the Company or any of its
Subsidiaries to repurchase, redeem or otherwise acquire any Company Shares, or
capital stock of the Company or any Subsidiary or affiliate of the Company.
(b) All of the outstanding shares of capital stock of
each of the Company's Subsidiaries are beneficially owned by the Company,
directly or indirectly, free and clear of all security interests, liens,
claims, pledges, agreements, limitations on voting rights, charges or other
encumbrances of any nature whatsoever, other than liens in favor of Toronto
Dominion (Texas), Inc. as administrative agent for itself, the Managing
Agents, the Documentation Agent, the Syndication Agent, and the Banks (all as
defined in the Credit Agreement).
(c) Except for (i) the Voting Agreement dated August 31,
1994, as amended, which will have been terminated effective at the Effective
Time of the Merger, and (ii) the Xxxxx Voting Agreement dated May 15, 1996, and
(iii) there are no voting trusts or other agreements or understandings to which
the Company or any of its Subsidiaries is a party with respect to the voting of
the capital stock of the Company or any of its Subsidiaries. None of the
Company or its Subsidiaries is required to redeem, repurchase or otherwise
acquire shares of capital stock of the Company, or any of its Subsidiaries,
respectively, as a result of the transactions contemplated by this Agreement.
(d) As of the Closing, the Preferred Shares and the
Warrants will be validly issued, fully paid and non-assessable and not subject
to preemptive (or similar) rights. The Company has taken all actions set forth
in Sections 1.01, 1.02 and 1.03 hereof.
4.03 Authorization; Validity of Agreement; Company Action. The
Company has full corporate power and authority to execute and deliver each
Basic Document, to issue the Units and to consummate the transactions
contemplated hereby and thereby. The Certificate of Designation has been duly
approved by the Company and filed with the Secretary of State of the State of
Delaware. The execution, delivery and performance by the Company of each Basic
Document and the consummation by it of the transactions contemplated hereby and
thereby have been duly authorized by the Board of Directors of the Company and
no other corporate or shareholder action on the part of the Company is
necessary to authorize the execution, delivery or performance by the Company of
any Basic Document, the issuance of any Unit or the
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consummation by it of the transactions contemplated hereby and thereby, except
for amendments of the Certificate of Incorporation to increase the authorized
number of shares of Common Stock. This Agreement, the Warrant Agreement, and
the Registration Rights Agreement have been have been duly executed and
delivered by the Company and (assuming due and valid authorization, execution
and delivery hereof by the other parties hereto and thereto), and each of the
Basic Documents are valid and binding obligations of the Company enforceable
against the Company in accordance with their terms, except that (i) such
enforcement may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws, now or hereafter in effect,
affecting creditors' rights generally, and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
4.04 Consents and Approvals; No Violations; Licenses. (a) None of
the execution, delivery or performance of any Basic Document by the Company,
the issuance of any Units or the consummation by the Company of the
transactions contemplated hereby or thereby, nor compliance by the Company
with any of the provisions hereof or thereof will (i) conflict with or result
in any breach of any provision of the Amended and Restated Certificate of
Incorporation, as amended or the Fourth Amended and Restated By-Laws or other
organizational documents of the Company or of any of its Subsidiaries, (ii)
require on the part of the Company any filing with, or permit, authorization,
consent or approval of, any court, arbitral tribunal, administrative agency or
other governmental or regulatory authority or agency (a "Governmental Entity")
except for in the case of clause (ii) (A) filings, permits, authorizations,
consents and approvals as may be required under state securities or blue sky
laws, and the laws of other states in which the Company is qualified to do or
is doing business, or (B) where the failure to obtain such permits,
authorizations, consents or approvals or to make such filings, individually or
in the aggregate, could not reasonably be expected to have a Material Adverse
Effect or prevent the Company from consummating the transactions contemplated
hereby, (iii) except as disclosed on Schedule 4.04(a), result in a violation or
breach of, or constitute (with or without due notice or lapse of time or both)
a default (or give rise to any right of termination, cancellation or
acceleration) under, any of the terms, conditions or provisions of the
Indenture dated as of September 27, 1995 between the Company and First Union
National Bank of Virginia, as trustee (as amended, the "Metrocall Indenture")
or any material note, bond, mortgage, indenture, lease, license, contract,
agreement or other instrument or obligation to which the Company or any of its
Subsidiaries is a party or by which any of them or any of their properties or
assets may be bound (the "Material Agreements") or (iv) violate any order,
writ, injunction, decree, statute, rule or regulation applicable to the
Company, any of its Subsidiaries or any of their properties or assets. The
Preferred Stock issued pursuant hereto does not and will not constitute
"Redeemable Stock" under and as defined in the Metrocall Indenture.
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(b) Schedule 4.04(b) hereto accurately and completely
lists all licenses, permits, certificates, franchises, ordinances,
registrations, or other rights, applications and authorizations (collectively,
"the Licenses") granted, issued or entered by the Federal Communications
Commission (the "FCC") and held by the Company or one of its Subsidiaries.
Except as disclosed in the opinion letter of Xxxxx & Xxxxxx identified in
Section 3.3(f), the Company or one of its Subsidiaries holds all Licenses filed
with, granted or issued by, or entered by any Governmental Entity, including,
without limitation, the FCC, or any state or local regulatory authorities or
any state or local public service commission or public utility commission
asserting jurisdiction over the radio facilities used in the Company's or any
of its Subsidiaries' business, that are required for the conduct of their
businesses as now being conducted, except for those the absence of which could
not, individually or in the aggregate reasonably be expected to have a Material
Adverse Effect. Except as disclosed in the opinion letter of Xxxxx & Xxxxxx
identified in Section 3.3(f), the Licenses are valid, in full force and effect,
and the terms of said Licenses are not subject to any restrictions or
conditions that materially limit or would materially limit the operations of
the business of the Company or any of its Subsidiaries as presently conducted,
other than restrictions or conditions generally applicable to licenses of that
type. The Licenses granted, issued or entered by the FCC are subject to the
Communications Act of 1934, as amended. There are no proceedings pending or,
to the best knowledge of the Company, complaints or petitions by others, or
threatened proceedings, before the FCC or any other Governmental Entity
relating to the business or operations of the Company or any of its
Subsidiaries or the Licenses, and there are no facts or conditions that
reasonably could be expected to constitute grounds for the FCC to revoke,
terminate, suspend, deny, annul, or impose conditions on any renewal of any the
Licenses, that individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect or prevent the Company from consummating the
transactions contemplated hereby or to impose any fines, forfeitures or other
penalties on the Company or its Subsidiaries that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
4.05 SEC Reports and Financial Statements. (a) The Company and its
Subsidiaries have filed with the Securities and Exchange Commission ("SEC") all
forms, reports, schedules, statements, and other documents required to be filed
by them with the SEC, including, without limitation, the Company's Registration
Statement filed on Form S-4 filed on October 8, 1996 and the Company's Schedule
13D and Tender Offer Statement on Schedule 14D-1 filed on May 22, 1996 (as such
documents have been amended since the time of their filing, collectively, the
"SEC Documents"), and have filed all exhibits required to be filed with the SEC
Documents. As of their respective dates or, if amended, as of the date of the
last such amendment, the SEC Documents, including, without limitation, any
financial statements or schedules included therein, complied in all material
respects with the applicable requirements of the Securities Act of 1933, as
amended (the "Securities Act") and the Securities Exchange Act of 1934 (the
"Exchange Act"), and did not contain any untrue statement of a material fact or
omit to state a material fact
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required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. None of the Company's Subsidiaries is required to file any forms,
reports or other documents with the SEC pursuant to Section 12 or 15 of the
Exchange Act. The financial statements of the Company included in the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1995 (including the related notes thereto) and for the nine months ended
September 30, 1996, copies of which have been furnished to Purchasers
(together, the "Financial Statements"), have been prepared from, and are in
accordance with, the books and records of the Company and its consolidated
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 generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes thereto and subject,
in the case of unaudited interim financial statements, to normal year-end
adjustments), and fairly present the consolidated financial position and the
consolidated results of operations and cash flows of the Company and its
consolidated Subsidiaries as at the dates thereof or for the periods presented
therein. The Company and its Subsidiaries have maintained a system of
accounting established in accordance with sound business practices to permit
preparation of financial statements in conformity with GAAP.
(b) No representation or warranty of the Company contained in any
Basic Document or in any other document, certificate or written statement
furnished to Purchasers by or on behalf of Company or any of its Subsidiaries
for use in connection with the transactions contemplated by this Agreement
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained herein or therein when
made not misleading in light of the circumstances in which the same were made.
4.06 No Undisclosed Liabilities. Except (i) as disclosed in the
SEC Documents that have been delivered to each Purchaser prior to the date
hereof, (ii) as set forth in Schedule 4.06, (iii) the Pending Transactions, and
(iv) for liabilities incurred in the ordinary course of business and consistent
with past practice, and liabilities incurred in connection with the
consummation of the transactions contemplated hereby (none of which,
individually or in the aggregate, could reasonably have a Material Adverse
Effect since December 31, 1995, neither the Company nor any of its Subsidiaries
has incurred any liabilities or obligations of any nature (whether accrued,
absolute, contingent or otherwise) which would be required by GAAP to be
reflected on a consolidated balance sheet of the Company and its Subsidiaries
(including the notes thereto), or which individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
4.07 Absence of Certain Changes. Except as contemplated by this
Agreement, for the Pending Transactions, or as disclosed in the SEC Documents
that have been delivered to
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each Purchaser prior to the date hereof or in Schedule 4.07, since December
31, 1995, (i) the Company and its Subsidiaries have conducted their respective
businesses only in the ordinary course of business and consistent with past
practice, (ii) there has not been any change in the business, properties,
assets, liabilities, financial condition, cash flows, operations, licenses,
franchises or results of operations of the Company or its Subsidiaries which
could reasonably be expected to have a Material Adverse Effect (iii) the
Company has not (A) declared, set aside or paid any dividend or other
distribution payable in cash, stock or property with respect to its capital
stock; (B) directly or indirectly, split, combined or reclassified the
outstanding shares of Common Stock; or (C) adopted a plan of complete or
partial liquidation, dissolution, merger, consolidation, restructuring,
recapitalization or other reorganization of the Company or any of its
Subsidiaries.
4.08 Employee Benefit Plans; ERISA; Labor. (a) Schedule 4.08
hereto sets forth (i) a list of all employee benefit plans (including but not
limited to plans described in section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), maintained by the Company, any of
its Subsidiaries or any trade or business, whether or not incorporated (an
"ERISA Affiliate"), which together with the Company would be deemed a "single
employer" within the meaning of section 4001(b)(1) of ERISA ("Benefit Plans")
and (ii) all employment, retention, option and severance agreements with
employees of the Company and its Subsidiaries ("Employee Agreements"). True
and complete copies of all current Benefit Plans and Employee Agreements have
been made available to Purchasers.
(b) With respect to each Benefit Plan: (i) if intended to
qualify under section 401(a) or 401(k) of the Internal Revenue Code of 1986, as
amended (the "Code") such plan has received a determination letter from the
Internal Revenue Service (the "IRS") stating that it so qualifies and that its
trust is exempt from taxation under section 501(a) of the Code, no such
determination letter has been revoked and no such revocation has been
threatened, nothing has occurred that could reasonably be expected to cause the
relevant Benefit Plan to lose such qualification or exemption; (ii) such plan
has been administered in all material respects in accordance with its terms and
applicable law, including state and federal securities laws; (iii) no breaches
of fiduciary duty by the Company, or, to the Company's knowledge, by any other
person have occurred that might reasonably be expected to give rise to material
liability on the part of the Company or any ERISA Affiliate; (iv) no disputes
are pending, or, to the knowledge of the Company, threatened that might
reasonably be expected to give rise to material liability on the part of the
Company or any ERISA Affiliate; (v) except as disclosed on Schedule 4.08, no
prohibited transaction (within the meaning of Section 406 of ERISA) has
occurred that might reasonably be expected to give rise to material liability
on the part of the Company or any ERISA Affiliate; (vi) all contributions
required to be made to such plan as of the date hereof (taking into account any
extensions for the making of such contributions) have been made in full; (vii)
to the Company's knowledge, no Benefit Plans are presently under audit or
examination (nor
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has notice been received of a potential audit or examination) by the IRS,
Department of Labor, or any other governmental agency or entity, and no matters
are pending with respect to any Benefit Plan under the IRS's Voluntary
Compliance Resolution program, its Closing Agreement Program, or other similar
programs; and (viii) all monies withheld with respect to Benefit Plans have
been transferred to the appropriate plan in accordance with the terms of such
plan.
(c) No Benefit Plan is a "multiemployer pension plan," as
defined in section 3(37) of ERISA, nor is any Benefit Plan a plan described in
section 4063(a) of ERISA. No Benefit Plan is or has been subject to Title IV
of ERISA.
(d) No liability under Title IV of ERISA has been incurred by
the Company or any ERISA Affiliate (whether direct, indirect, actual, or
contingent, and including, without limitation, withdrawal liability to a
multiemployer plan), and no condition exists that presents a material risk to
the Company or any ERISA Affiliate of incurring a material liability under such
Title. No Benefit Plan has incurred an accumulated funding deficiency, as
defined in section 302 of ERISA or section 312 of the Code, whether or not
waived.
(e) With respect to each Benefit Plan that is a "welfare
plan" (as defined in section 3(1) of ERISA), no such plan provides medical or
death benefits with respect to current or former employees of the Company or
any of its Subsidiaries beyond their termination of employment (other than to
the extent required by applicable law). All group health plans of the Company
and the ERISA Affiliates have been operated in material compliance with the
requirements of Section 4980B (and its predecessor) and 5000 of the Code, and
the Company and ERISA Affiliates have provided, or will have provided prior to
May 15, 1997, to individuals entitled thereto all required notices and coverage
pursuant to Section 4980B, except to the extent that failure to provide such
notice or coverage is not reasonably likely to result, individually or in the
aggregate, in a Material Adverse Effect on the Company and its Subsidiaries,
taken as a whole.
(f) No Benefit Plan, plan documentation or agreement, summary
plan description or other written communication distributed generally to
employees of the Company or its Subsidiaries by its terms prohibits the
amendment or termination of any such Benefit Plan.
(g) As of the date hereof, except for Employee Agreements or
as described in the SEC Documents that have been delivered to each Purchaser
prior to the date hereof, the Company and its Subsidiaries are not parties to
any (i) agreement with any director, executive officer or other key employee of
the Company or its Subsidiaries (A) the benefits of which are contingent, or
the terms of which are materially altered, upon the occurrence of a transaction
involving the Company or its Subsidiaries of the nature of any of the
transactions contemplated by this Agreement, (B) providing any term of
employment or compensation guarantee or (C)
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providing severance benefits or other benefits after the termination of
employment of such director, executive officer or key employee; (ii) agreement,
plan or arrangement under which any person may receive payments from the
Company or its Subsidiaries that may be subject to the tax imposed by Section
4999 of the Code or included in the determination of such person's "parachute
payment" under Section 280G of the Code; and (iii) agreement or plan binding
the Company or its Subsidiaries, including, without limitation, any stock
option plan, stock appreciation right plan, restricted stock plan, stock
purchase plan, severance benefit plan or employee benefit plan, any of the
benefits of which will be increased, or the vesting of the benefits of which
will be accelerated, by the occurrence of any of the transactions contemplated
by this Agreement or the value of any of the benefits of which will be
calculated on the basis of any of the transactions contemplated by this
Agreement.
(h) As of the date hereof, no collective bargaining agreement
is binding and in force against the Company or its Subsidiaries or is currently
under negotiation, and no current employees of the Company or its Subsidiaries
are represented by any labor union. As of the date hereof, to the Company's
knowledge, no labor representation effort exists with respect to the Company or
its Subsidiaries.
4.09 Litigation. Schedule 4.09 hereto sets forth each suit, action
or proceeding pending (as to which the Company has received notice), or, to the
knowledge of the Company, threatened against the Company, any of its
Subsidiaries, or their properties or assets on the date hereof. Except as set
forth on Schedule 4.09 hereto, none of the foregoing, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect, if
resolved adversely to the Company or its Subsidiaries. As of the date hereof,
neither the Company nor any of its Subsidiaries, nor any of their respective
properties, is subject to any order, writ, judgment, injunction, decree,
determination or award having, or which would have, a Material Adverse Effect
on the Company and its Subsidiaries, taken as a whole, or which would prevent
the Company from consummating the transactions contemplated hereby.
4.10 No Default; Compliance with Applicable Laws. Neither the
Company nor any of its Subsidiaries is in default or violation in any material
respect of any term, condition or provision of (i) its respective Certificate
of Incorporation or By-laws or other organizational documents, (ii) any
Material Agreement or (iii) any federal, state, local or foreign statute, law,
ordinance, rule, regulation, judgment, decree, order, concession, grant,
franchise, permit or license or other governmental authorization or approval
applicable to the Company or any of its Subsidiaries or by which they or their
respective assets may be bound (other than matters addressed in Sections 4.04,
4.08, 4.09, 4.10, 4.11, and 4.12), excluding from the foregoing clause (iii),
defaults or violations which could reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect on the Company and its
Subsidiaries, taken as a whole, or prevent the Company from consummating the
transactions contemplated hereby.
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4.11 Taxes. Except as set forth on Schedule 4.11:
(a) The Company and its Subsidiaries have (i) duly and timely
filed (or there has been filed on their behalf) with the appropriate
governmental authorities all Tax Returns (as hereinafter defined) required to
be filed by them on or prior to the date hereof, other than those Tax Returns
for which extensions for filing have been obtained in a timely manner, and such
Tax Returns are true, correct and complete in all material respects, and (ii)
duly paid in full all Taxes (as hereinafter defined) shown to be due on such
Tax Returns or have provided adequate reserves in their financial statements
for any Taxes that have not been paid. There are no liens on any of the assets
of the Company or any of its Subsidiaries that arose in connection with any
delinquency in paying any Tax.
(b) As of the date hereof, there are no ongoing federal,
state, local or foreign audits or examinations of any Tax Return of the Company
or its Subsidiaries.
(c) As of the date hereof, there are no outstanding requests,
agreements, consents or waivers to extend the statutory period of limitations
applicable to the assessment of any Taxes or deficiencies against the Company
or any of its Subsidiaries (excluding extensions for filings that have been
timely obtained), and no power of attorney granted by either the Company or any
of its Subsidiaries with respect to any Taxes is currently in force.
(d) Neither the Company nor any of its Subsidiaries is a
party to any agreement providing for the allocation or sharing of Taxes.
(e) "Taxes" shall mean any and all taxes, charges, fees,
levies or other assessments, including, without limitation, income, gross
receipts, excise, real or personal property, sales, withholding, social
security, occupation, use, service, service use, license, net worth, payroll,
franchise, transfer and recording taxes, fees and charges, imposed by the
Internal Revenue Service or any taxing authority (whether domestic or foreign
including, without limitation, any state, county, local or foreign government
or any subdivision or taxing agency thereof (including a United States
possession)), whether computed on a separate, consolidated, unitary, combined
or any other basis; and such term shall include any interest whether paid or
received, fines, penalties or additional amounts attributable to, or imposed
upon, or with respect to, any such taxes, charges, fees, levies or other
assessments. "Tax Return" shall mean any report, return, document, declaration
or other information or filing required to be supplied to any taxing authority
or jurisdiction (foreign or domestic) with respect to Taxes.
4.12 Environmental Matters. (a) The Company and its Subsidiaries
have complied in all material respects with all applicable Environmental Laws
(as defined below), except to the extent that any failure to comply could not
reasonably be expected to have,
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individually or in the aggregate, a Material Adverse Effect. There is no
pending or, to the knowledge of the Company, threatened, civil or criminal
litigation, written notice or violation, formal administrative proceeding or
investigation, inquiry or information request by any Governmental Entity
relating to any Environmental Law involving the Company or any of its
Subsidiaries or any of their properties. For purposes of this Agreement,
"Environmental Law" means any foreign, federal, state or local law, statute,
rule or regulation or the common law relating to the environment or
occupational health and safety, including, without limitation, any statute,
regulation or order pertaining to (i) treatment, storage, disposal, generation
or transportation of industrial, toxic or hazardous substances or solid or
hazardous waste; (ii) air, water and noise pollution; (iii) groundwater and
soil contamination; (iv) the release or threatened release into the environment
of industrial, toxic or hazardous substances, or solid or hazardous waste,
including, without limitation, emissions, discharges, injections, spills,
escapes or dumping of pollutants, contaminants or chemicals; (v) the protection
of wildlife, marine sanctuaries and wetlands, including, without limitation,
all endangered and threatened species; (vi) storage tanks, vessels and
containers; (vii) underground and other storage tanks or vessels, abandoned,
disposed or discarded barrels, containers and other closed receptacles; (viii)
health and safety of employees and other persons; and (ix) manufacture,
processing, use, distribution, treatment, storage, disposal, transportation or
handling of pollutants, contaminants, chemicals or industrial, toxic or
hazardous substances or oil or petroleum products or solid or hazardous waste.
As used above, the terms "release" and "environment" shall have the meaning set
forth in the federal Comprehensive Environmental Response, Compensation and
Liability Act of 1980 ("CERCLA").
(b) With the exception of releases that could not reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect, there have been no releases of any Materials of Environmental Concern
(as defined below) into the environment by the Company or any of its
Subsidiaries, or, to the knowledge of the Company, by any other party at any
parcel of real property or any facility formerly or currently owned, operated
or controlled by the Company or any of its Subsidiaries. For purposes of this
Agreement, "Materials of Environmental Concern" means any chemicals, pollutants
or contaminants, hazardous substances (as such term is defined under CERCLA),
solid wastes and hazardous wastes (as such terms are defined under the federal
Resource Conservation and Recovery Act), toxic materials, oil or petroleum and
petroleum products, or any other material subject to regulation under any
Environmental Law.
4.13 Insurance. The Company and the Subsidiaries maintain adequate
insurance with respect to their respective businesses and are in compliance
with all material requirements and provisions thereof.
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4.14 Transactions with Affiliates. Except as set forth in the SEC
Documents that have been delivered to each Purchaser prior to the date hereof
or on Schedule 4.14, since December 31, 1995, neither the Company nor any of
its Subsidiaries has entered into any transaction with any current director or
officer of the Company or any Subsidiary or any transaction which would be
subject to proxy statement disclosure under the Exchange Act pursuant to the
requirements of Item 404 of Regulation S-K.
4.15 Brokers. Other than The Toronto-Dominion Bank, no broker,
finder or investment banker is entitled to any brokerage, finder's or other fee
or commission from the Company in connection with the issuance and sale of
Securities pursuant to this Agreement and the Company hereby indemnifies each
Purchaser against, and agrees that it will hold each Purchaser harmless from,
any claim, demand or liability for any such broker's or finder's fees
(including, without limitation, those of The Toronto-Dominion Bank) alleged to
have been incurred in connection therewith and any expenses (including
reasonable fees, expenses and disbursements of counsel) arising in connection
with any such claim, demand or liability.
4.16 Nasdaq Approvals. The issuance by the Company of the
Securities will not require shareholder approval under applicable rules of The
Nasdaq Stock Market.
ARTICLE V
AFFIRMATIVE COVENANTS OF THE COMPANY
5.01 Financial and Business Information. The Company will maintain,
and cause each of its Subsidiaries to maintain, a system of accounting
established in accordance with sound business practices to permit preparation
of financial statements in conformity with GAAP. The Company during the term
of this Agreement will, and will cause its Subsidiaries to deliver to each
Purchaser (provided that the Company shall not deliver to a Purchaser any such
information to the extent that such Purchaser has requested in writing to the
Company that such information not be delivered to such Purchaser);
(a) As soon as practicable and in any event within 120 days after
the close of each fiscal year of the Company, beginning with the current fiscal
year, a consolidated balance sheet of the Company and its Subsidiaries as of
the close of such fiscal year and consolidated statements of income, retained
earnings and cash flows for the Company and its Subsidiaries for the fiscal
year then added, certified by the chief executive officer or chief financial
officer of the Company to be true and accurate in all material respects (it
being understood by the parties hereto that the delivery to each Purchaser of
the Company's annual report on Form 10-K will satisfy the requirements of this
Section 5.01(a));
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(b) As soon as practicable and in any event within 45 days after
the end of each of the first three fiscal quarters of each fiscal year, the
consolidated and consolidating balance sheet of Company and its Subsidiaries as
at the end of such fiscal quarter and the related consolidated and
consolidating statements of income, retained earnings and cash flows of Company
and its Subsidiaries for such fiscal quarter and for the period from the
beginning of the then current fiscal year to the end of such fiscal quarter,
all in reasonable detail and certified by the chief financial officer of
Company that they fairly present the financial condition of Company and its
Subsidiaries as at the dates indicated and the results of its operations and
its cash flows for the periods indicated, subject to changes resulting from
audit and normal year-end adjustments (it being understood by the parties
hereto that the delivery to each Purchaser of the Company's quarterly report on
Form 10-Q will satisfy the requirements of this Section 5.01(b));
(c) Prompt notice of any event having a Material Adverse Effect;
(d) Promptly upon their becoming available, copies of (a) all
financial statements, reports, notices and proxy statements sent or made
available generally by Company to its security holders, (b) all regular and
periodic reports, if any, filed by Company or any of its Subsidiaries with any
securities exchange or with the SEC or any governmental or private regulatory
authority, and (c) all press releases and other statements made available
generally by Company or any of its Subsidiaries to the public concerning
material developments in the business of Company or any of its Subsidiaries;
(e) Promptly upon any officer of Company or any of its
Subsidiaries obtaining knowledge of any condition or event that constitutes a
Triggering Event (as defined in the Certificate of Designation) or a violation
or default of any material term of any Basic Document or an event of default or
potential event of default under any indebtedness of Company or any of its
Subsidiaries, or becoming aware that any person has given any notice or taken
any other action with respect to a claimed event of default or potential event
of default; and
(f) Within a reasonable time, upon either Purchaser's request,
such other information about the property, financial condition and operations
of the Company and its Subsidiaries as such Purchaser may from time to time
reasonably request.
5.02 Notice of Certain Events. Unless the Purchasers shall otherwise
consent in writing, the Company during the term of this Agreement will, and
will cause its Subsidiaries to, promptly give notice in writing to each
Purchaser of any litigation or proceeding before any court or administrative
body involving the Company or any Subsidiary which, if determined adversely to
the Company or such Subsidiary, would have a Material Adverse Effect on the
Company and the Subsidiaries, taken as a whole.
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5.03 Consummation of the Merger and Tender Offer. The Company shall
cause the Merger to be consummated on the Closing Date and the Tender Offer to
purchase not less than $121,500,000 in principal amount of A+ Notes to be
consummated on the Closing Date.
5.04 Efforts to Obtain NASDAQ Assurances. If the holders are unable
to convert Preferred Shares into Common Stock under the Certificate of
Designation because the Book Value Requirement has not been satisfied, the
Company agrees at the request of a Purchaser to cooperate in a reasonable
manner to seek assurances from NASDAQ, including a waiver of any NASD rule, in
order to facilitate the conversion of Preferred Stock into Common Stock as
contemplated by Section 5 of the Certificate of Designation.
5.05 Expiration of Covenants. The Company's obligations under
Sections 5.01 and 5.02 shall terminate with respect to a Purchaser at such time
as such Purchaser no longer holds any Preferred Stock or Warrants.
ARTICLE VI
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASERS
6.01 Representations by Purchasers. Each Purchaser severally
represents and warrants to the Company that:
(a) It has full power and authority to execute and
deliver this Agreement and the other Basic Documents to which it is a party and
to perform its obligations hereunder and thereunder.
(b) It has taken all action necessary for the
authorization, execution, delivery, and performance of this Agreement and the
other Basic Documents to which it is a party, and its obligations hereunder and
thereunder, and, upon execution and delivery by the Company, this Agreement and
other Basic Documents to which it is a party shall constitute the valid and
binding obligation of such Purchaser, enforceable against such Purchaser in
accordance with their respective terms, except that (i) such enforcement may be
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws, now or hereafter in effect, affecting creditors' rights
generally, and (ii) the remedy of specific performance and injunctive and other
relief may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
(c) There are no claims for brokerage commissions or
finder's fees or similar compensation in connection with the issuance and sale
of Units pursuant to this
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Agreement based on any arrangement made by or on behalf of such Purchaser and
such Purchaser agrees to indemnify and hold the Company harmless against any
costs or damages incurred as a result of any such claim.
6.02 Sale of Preferred Shares So long as the Preferred Shares
remain outstanding, no holder of the Preferred Shares shall sell, assign or
transfer Preferred Shares unless such holder (a "Seller") shall have (i)
submitted a written offer (the "Offer") to the Company specifying (x) the
number of shares that such Seller proposes to sell, assign or transfer and the
related terms of disposition (y) the Seller's proposed disposition price (the
"Offer Price") and (ii) complied with all other applicable provisions of this
Section 6.02. The Offer shall be effective only upon receipt by the Company.
The Company or its designee (the "Offeree") shall have the right to accept the
Offer and purchase all, but not less than all, of the Preferred Shares subject
to the Offer for the Offer Price by giving the Seller written notice of such
acceptance on or prior to 5:00 eastern time on the 21st day after the Offer was
made (the "Acceptance Date"), whereupon the Offeree shall purchase such number
of shares from the Seller for the Offer Price. Settlement of the transaction
shall occur within 14 days unless extended in writing by the Seller in its sole
discretion, it being understood that if an Offeree has accepted an Offer made
pursuant to this Section 6.02 but fails to purchase all of the Preferred Shares
subject to the Offer on or prior to the required settlement date, all of the
rights of the Company under this Section 6.02 with respect to all holders of
the Preferred Shares shall irrevocably terminate and be of no further force or
effect. At settlement, such Seller shall deliver to the Offeree the
certificate or certificates evidencing the Preferred Shares accepted by the
Offeree duly endorsed for transfer and free and clear of any liens but
otherwise without recourse, representation or warranty. If the Company does
not notify such Seller that it has accepted the Offer within the time specified
above, the Offer shall be deemed to be rejected in its entirety and all such
Preferred Shares subject to the Offer may be disposed of by the Seller for a
price not less than 90% of the Offer Price at any time within ninety days after
the Acceptance Date. The Company shall be entitled to refuse to register on
its records the name of any transferee of any Seller as an owner thereof if
such transferee acquired such shares in violation of this Section 6.02.
Notwithstanding anything herein to the contrary, this Section 6.02
shall not apply to the sale, transfer or assignment by a holder of the
Preferred Shares to any of its affiliates that is a permitted successor or
assign of the holder under this Agreement.
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ARTICLE VII
CERTAIN SECURITIES LAW MATTERS
7.01 Representations by Purchasers. Each Purchaser severally
represents and warrants to the Company that:
(a) The Purchaser is a "Qualified Institutional Buyer"
within the meaning of Rule 144A under the Securities Act.
(b) The Units are being acquired for such Purchaser's own
account for the purpose of investment and not with a present view to or for
sale in connection with any distribution thereof, subject to the condition that
the disposition of the property of a Purchaser shall be at all times within its
control.
(c) Such Purchaser understands that (i) none of the
Units, the Preferred Shares or the Warrants have been registered under the
Securities Act, (ii) the Preferred Shares and the Warrants must be held
indefinitely unless a subsequent disposition thereof is registered under the
Securities Act or an exemption from registration is available under applicable
securities laws then in effect, and (iii) the Preferred Shares and the Warrants
will bear a legend to such effect and the Company will make a notation on its
transfer books to such effect.
(d) Such Purchaser understands that no public market now
exists for the Preferred Shares or Warrants issued by the Company.
7.02 Restrictions on Transfer. The Preferred Shares and the
Warrants (collectively, the "Restricted Securities") shall be transferable only
if sold pursuant to a registration statement under the Securities Act, (as
hereinafter defined) or pursuant to an exemption from the registration
requirements of the Securities Act.
(a) Restrictive Legend. Each certificate representing
the Restricted Securities shall bear a legend in substantially the following
form:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or under the
securities laws of any state, and may not be sold, or otherwise
transferred, in the absence of such registration or an exemption
therefrom under such Act and under any such applicable state laws."
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Each certificate representing such Restricted Securities shall bear the
restrictive legend set forth above, in each case unless the restrictions on
transfer provided for in this Section 7.02 shall have ceased and terminated as
to such Restricted Securities.
(b) Termination of Restrictions. The
restrictions imposed by this Section 7.02 upon the transferability of the
Restricted Securities shall cease and terminate as to any particular Restricted
Securities and any securities issued in exchange therefor or upon transfer
thereof when, in the opinion of counsel reasonably acceptable to the Company,
such restrictions are no longer required in order to assure compliance with the
Securities Act, or when such Restricted Securities have been registered under
the Securities Act. Whenever any of such restrictions shall cease and
terminate as to any Restricted Securities, the holder thereof shall be entitled
to receive from the Company, without expense, new certificates not bearing the
legend set forth in Section 7.02(a).
ARTICLE VIII
MISCELLANEOUS
8.01 Indemnification. In addition to the payment of
expenses pursuant to Section 8.05, whether or not the transactions contemplated
hereby shall be consummated, the Company agrees to defend, indemnify, pay and
hold harmless, each Purchaser, and the officers, directors, employees, agents
and affiliates of each Purchaser (collectively, the "Indemnitees") from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses and disbursements of any
kind or nature whatsoever (including, without limitation, the reasonable fees
and disbursements of counsel for such Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or threatened by
any Person, whether or not any such Indemnitee shall be designated as a party
or a potential party thereto), whether direct, indirect or consequential and
whether based on any federal, state or foreign laws, statutes, rules or
regulations (including, without limitation, securities and commercial laws,
statutes, rules or regulations), on common law or equitable cause or on
contract or otherwise, that may be imposed on, incurred by, or asserted against
any such Indemnitee, in any manner relating to or arising out of this
Agreement, the other Basic Documents, the Credit Agreement, the Merger, the
Tender Offer or the transactions contemplated hereby or thereby (including,
without limitation, such Purchaser's agreement to purchase the Units or the use
or intended use of the proceeds of such purchase) or the statements contained
in any commitment letter delivered by such Purchaser to the Company with
respect thereto (collectively called the "Indemnified Liabilities"); provided
that the Company shall not have any obligation to any Indemnitee hereunder with
respect to any Indemnified Liabilities to the extent such Indemnified
Liabilities arise from the gross negligence or willful misconduct of
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that Indemnitee as determined by a final judgment of a court or competent
jurisdiction. To the extent that the undertaking to defend, indemnify, pay and
hold harmless set forth in the preceding sentence may be unenforceable because
it is violative of any law or public policy, the Company shall contribute the
maximum portion that it is permitted to pay and satisfy under applicable law to
the payment and satisfaction of all Indemnified Liabilities incurred by the
Indemnitees or any of them.
8.02 No Waiver; Cumulative Remedies. No failure or delay
on the part of any Purchaser, or any other holder of any Security in exercising
any right, power or remedy hereunder or thereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy hereunder or thereunder. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
8.03 Amendments, Waiver and Consents. No amendment,
modification or addition to this Agreement, and no waiver of or consent to
noncompliance with any covenant or other provision of this Agreement shall be
effective unless in writing and duly executed by the party against whom
enforcement of such amendment, modification, addition, waiver or consent is
sought. Any waiver or consent may be given subject to satisfaction of
conditions stated therein and any waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.
8.04 Notices. All notices, demands, requests, or other
communications which may be or are required to be given, served, or sent by any
party to any other party pursuant to this Agreement shall be in writing and
shall be mailed by first-class, registered or certified mail, return receipt
requested, postage prepaid, or transmitted by hand delivery (including delivery
by courier), or facsimile transmission, addressed as follows:
(a) If to the Company:
Metrocall, Inc.
0000 Xxxxxxxx Xxxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
Facsimile: 000-000-0000
with a required copy (which shall not
constitute notice) to:
Xxxxxx, Xxxxxx & Xxxxxxxxx
0000 X Xxxxxx, XX
Xxxxxxxxxx, XX 00000
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Attention: Xxxxxx X. Xxxxxx, Esq.
Facsimile: 000-000-0000
(b) If to Purchasers:
To the persons and at the addresses
set forth on Exhibit A hereto.
Each party may designate by notice in writing a new address to which any
notice, demand, request or communication may thereafter be so given, served or
sent. Each notice, demand, request, or communication which shall be mailed,
delivered or transmitted in the manner described above shall be deemed
sufficiently given, served, sent and received for all purposes at such time as
it is delivered to the addressee (with the return receipt, the delivery
receipt, or the affidavit of messenger being deemed conclusive (but not
exclusive) evidence of such delivery) or at such time as delivery is refused by
the addressee upon presentation.
8.05 Expenses. Whether or not the transactions
contemplated hereby shall be consummated, the Company agrees to pay promptly
(a) all the actual costs and expenses of preparation of the Basic Documents;
(b) all the costs of furnishing all opinions by counsel for Company (including,
without limitation, any opinions required to be delivered to the Purchasers
hereunder) and of the Company's performance of, and compliance with, all
agreements and conditions on its part to be performed or complied with pursuant
to the Basic Documents; (c) the reasonable fees, expenses and disbursements of
counsel to each Purchaser (including allocated costs of internal counsel) in
connection with the negotiation, preparation, execution and administration of
the Basic Documents and any consents, amendments, waivers or other
modifications hereto or thereto and any other documents or matters requested by
the Company; (d) all other actual costs and expenses (including fees, not to
exceed $5,000 of one accounting firm to review the Company's public disclosure
documents) incurred by any Purchaser in connection with the negotiation,
preparation and execution of the Basic Documents and the transactions
contemplated hereby and thereby; and (e) all costs and expenses, including
reasonable attorneys' fees (including allocated costs of internal counsel) and
costs of settlement, incurred by any Purchaser in enforcing any obligations of
or in collecting any payments due from the Company hereunder or under the other
Basic Documents by reason of any breach or default by the Company or in
connection with any refinancing or restructuring of the arrangements provided
under the Basic Documents in the nature of a "work-out" or pursuant to any
insolvency or bankruptcy proceedings.
8.06 Binding Effect; Assignment. This Agreement shall be
binding upon and inure to the benefit of the Company and the Purchasers and
their respective successors and
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assigns, except that the Company shall not have the right to assign its rights
hereunder or any interest herein without the prior written consent of each of
the Purchasers.
8.07 Survival of Representations and Warranties. All
representations and warranties made in this Agreement or any other Basic
Document, shall survive the execution and delivery hereof and thereof and the
issuance of the Units. Notwithstanding anything in this Agreement or implied
by law to the contrary, the agreements of Company set forth in Sections 2.05,
4.15, 8.01, and 8.05 shall survive the payment or redemption of any Securities
and the termination of this Agreement.
8.08 Severability . In case any provision in or
obligation under this Agreement or the Securities shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.
8.09 Obligations Several: Independent Nature of
Purchasers' Rights. The obligations of each Purchaser hereunder is several and
no Purchaser shall be responsible for the obligations of any other Purchaser
hereunder. Nothing contained herein or in any other Basic Document, and no
action taken by Purchasers pursuant hereto or thereto, shall be deemed to
constitute Purchasers as a partnership, an association, a joint venture or any
other kind of entity. Each Purchaser shall be entitled to protect and enforce
its rights arising out of this Agreement or the other Basic Documents and its
shall not be necessary for any other Purchaser to be joined as an additional
party in any proceeding for such purpose.
8.10 Prior Agreements. This Agreement constitutes the
entire agreement between the parties and supersedes any prior understandings or
agreements concerning the subject matter hereof.
8.11 Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Delaware (excluding
the choice of laws provisions thereof).
8.12 Headings. Article, Section and subsection headings
in this Agreement are included herein for convenience of reference only and
shall not constitute a part of this Agreement for any other purpose.
8.13 Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and
the same instrument, and each of the parties hereto may execute this Agreement
by signing any such counterpart.
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8.14 Further Assurances. From and after the date of this
Agreement, upon the request of any Purchaser, the Company and each Subsidiary
shall execute and deliver such instruments, documents and other writings as may
be necessary or desirable to confirm and carry out and to effectuate fully the
intent and purposes of this Agreement, the Preferred Shares, the Warrants, the
Warrant Agreement, the Registration Rights Agreement and the other agreements
and instruments contemplated hereby.
8.15 Redemption of Foreign-Owned Shares. The Company
shall not redeem any shares of capital stock held by UBS Capital LLC or any of
its affiliates, pursuant to Section 4.5(b) of the Company's Amended and
Restated Certificate of Incorporation (or any similar provision), unless and
until the Company shall have taken all other action which could otherwise bring
the company into compliance with Sections 310(a) and 310(b) of the
communications Act of 1934, as amended, or any similar or successor federal
statutes (the "Communications Act"), including, without limitation, (i) the
application for a waiver thereof by the FCC, (ii) the redemption of any and all
shares of capital stock of owned by other persons and (iii) the transfer of any
FCC licenses held by the Company to a wholly-owned Subsidiary of the Company.
In the event the Company shall have taken all actions set forth in the previous
sentence, and the Company shall remain in violation of Section 310(a) or 310(b)
of the Communications Act, the Company may redeem the minimum number of
Preferred Shares, Conversion Shares and/or Warrant Shares held by UBS Capital
LLC or any of its affiliates as would be necessary to bring the Company into
compliance therewith; provided, however, that any such redemption shall be at a
price per share equal to (A) in the case of Preferred Shares, the Stated Value
plus all accrued and unpaid dividends thereon, (B) in the case of Conversion
Shares, the greater of (1) the fair market value of a share of Common Stock at
the time of such redemption and (2) the Conversion Price (as defined in the
Certificate of Designation) per share on the date of conversion into such
Conversion Shares and (C) in the case of Warrant Shares, the greater of (1) the
fair market value of a share of Common Stock at the time of such redemption and
(2) the Current Market Price (as defined in the Warrant Agreement) per share on
the date of exercise for such Warrant Shares.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed on its behalf as of the date first above written.
METROCALL, INC.
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Xxxxxxx X. Xxxxx
Chief Financial Officer
PURCHASERS
XXXX XXXXXXX MUTUAL LIFE INSURANCE
COMPANY
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Investment Officer
SUNAMERICA, INC.
By: /s/ Xxxxx XxXxxxxx
-------------------------------------
Name: Xxxxx XxXxxxxx
Title: Authorized Agent
Metrocall, Inc.
Unit Purchase Agreement
Signature Page 1
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UBS CAPITAL LLC
By: /s/ Xxxxxxx Xxxxx
-------------------------------------
Name: Xxxxxxx Xxxxx
Title: Managing Director
By: /s/ Xxxxxx X. Xxxxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Managing Director
Metrocall, Inc.
Unit Purchase Agreement
Signature Page 1
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EXHIBIT A
UNIT PURCHASE AGREEMENT
PURCHASERS
--------------------------------------------------------------------------------------------------------------
Units Aggregate
----- ---------
Purchaser Address for Notices Purchased Purchase Price
--------- ------------------- --------- --------------
--------------------------------------------------------------------------------------------------------------
Xxxx Xxxxxxx Xxxx and Corporate Finance Group (T-57) 50,000 $12,500,000
Mutual Life 000 Xxxxxxxxx Xxxxxx
Insurance Company Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxx
Investment Officer
Facsimile: (000) 000-0000
--------------------------------------------------------------------------------------------------------------
SunAmerica, Inc. One SunAmerica Center 50,000 $12,500,000
Century City
Los Angeles, CA
Attn: Xxxxx XxXxxxxx
Executive Vice President and
Chief Investment Officer
Facsimile: (000) 000-0000
--------------------------------------------------------------------------------------------------------------
UBS Capital LLC UBS Capital LLC 59,600 $14,900,000
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxx and
Xxxxx X. Xxxxxxxxxxxx
Facsimile: (000) 000-0000
--------------------------------------------------------------------------------------------------------------
