LOCK UP, VOTING AND CONSENT AGREEMENT
This Lock Up, Voting and Consent Agreement (the "Agreement"), dated as
of May __, 2002, is entered into and made by and among Metrocall Inc.
("Metrocall, Inc."), a Delaware corporation, XxXxx RCC Communications, Inc.
("XxXxx"), a Delaware corporation, Metrocall USA, Inc. ("Metrocall USA"), a
Delaware corporation, MSI, Inc. ("MSI"), a Nevada corporation, Mobilfone
Service, L.P. ("Mobilfone"), a Texas limited partnership, and Advanced
Nationwide Messaging Corporation ("Advanced Nationwide"), a Washington
corporation, (collectively, "Metrocall" or the "Company") and each of the
undersigned Secured Lenders (as defined below) (each, a "Consenting Lender"
and, collectively, the "Consenting Lenders") under the Loan Agreement (as
defined below) and each of the undersigned holders (each a "Consenting Holder"
and, collectively, the "Consenting Holders", and together with the Consenting
Lenders, each, a "Consenting Creditor", and, collectively the "Consenting
Creditors") of the Senior Subordinated Notes (as defined below). XxXxx,
Metrocall USA, MSI, Mobilfone, and Advanced Nationwide are collectively
referred to as the "Subsidiaries". All capitalized terms not otherwise defined
herein have the meanings given for said terms in the Plan Term Sheet (as
hereinafter defined). Notwithstanding anything contained herein or in the
Plan Term Sheet or any exhibits contained therein, the terms and conditions
contained in this Agreement shall control over any inconsistent terms and
conditions contained in the Plan Term Sheet or any exhibits thereto.
WHEREAS, Metrocall, Inc. and the Consenting Lenders entered into that
certain Fifth Amended and Restated Loan Agreement dated as of March 17, 2000,
as amended, (the "Loan Agreement"), in terms of which the Consenting Lenders
agreed to fund to Metrocall a Senior Secured Facility A Loan in an aggregate
amount of up to $150,000,000 (the "Facility A Loan"), and a Senior Secured
Facility B Loan in an aggregate amount of up to $50,000,000 (the "Facility B
Loan", together with the Facility A Loan, the "Senior Secured Loan" and those
lenders that a parties thereto being the "Secured Lenders"). Metrocall issued
those certain Facility A promissory notes in the aggregate original principal
amount of $150,000,000 (the "Facility A Notes") and Facility B promissory
notes in the aggregate original principal amount of $50,000,000 (the "Facility
B Notes", together with the Facility A Notes, the "Notes") to each of the
Consenting Lenders. Contemporaneously with the Loan Agreement, and in order
to secure the obligations of Metrocall therein, (a) Metrocall executed (i) a
Second Amended and Restated Borrower's Pledge Agreement, (ii) a Second Amended
and a Restated Borrower Security Agreement, and (iii) a Borrower Trademark
Security Agreement; and (b) the Subsidiaries executed (i) a Second Amended and
Restated Master Subsidiary Guaranty, (ii) a Amended and Restated Master
Subsidiary Pledge Agreement, and (iii) a Second Amended and Restated Master
Subsidiary Security Agreement (together with the Loan Agreement, the "Loan
Documents").
WHEREAS, the aggregate outstanding principal amount of the Senior
Secured Loan, as of the date hereof, is $133,000,000 plus accrued interest;
WHEREAS, Metrocall and the Consenting Lenders have engaged in good
faith negotiations with the objective of reaching an agreement with regard to
restructuring of the Senior Secured Loan;
WHEREAS, Metrocall, Inc. has issued, or is the obligated as the
successor to any such issuer, (a) $100,000,000 of 11-7/8% senior subordinated
notes due 2005 pursuant to an Indenture (the "(ProNet) 11-7/8% Note
Indenture"), dated as of June 15, 1995, between Metrocall, Inc. and The Bank
of New York, as Trustee (the "(ProNet) 11-7/8% Notes"), of which $92,968,000
is outstanding, (b) $150,000,000 of 10-3/8% senior subordinated notes due 2007
pursuant to an Indenture (the "10-3/8% Note Indenture"), dated as of September
27, 1995, between Metrocall, Inc. and HSBC Bank USA, as Trustee (the "10-3/8%
Notes"), of which $134,970,000 is outstanding, (c) $200,000,000 of 9-3/4%
senior subordinated notes due 2007 pursuant to an Indenture (the "9-3/4% Note
Indenture"), dated as of October 21, 1997, between Metrocall, Inc. and HSBC
Bank USA, as Trustee (the "9-3/4% Notes"), of which $171,340,000 is
outstanding, (d) $125,000,000 of 11-7/8% senior subordinated notes due 2005
pursuant to an Indenture (the "(A+ ) 11-7/8% Note Indenture"), dated as of
October 24, 1995, between Metrocall, Inc. and The Bank of New York, as Trustee
(the "(A+) 11-7/8% Notes"), of which $174,000 is outstanding, and (e)
$250,000,000 of 11% senior subordinated notes due 2008 pursuant to an
Indenture (the "11% Note Indenture", of which $227,350,000 is outstanding, and
together with the (ProNet)11-7/8%, 10-3/8%, 9-3/4% and (A+) 11 7/8% Note
Indentures, the "Note Indentures"), dated as of December 22, 1998, between
Metrocall, Inc. and HSBC Bank USA, as Trustee (the "11% Notes" and,
collectively with the (ProNet) 11-7/8%, 10-3/8%, 9-3/4% and (A+) 11 7/8%
Notes, the "Senior Subordinated Notes of which $626,802,000 is outstanding;
WHEREAS, Metrocall and the Consenting Holders have engaged in good
faith negotiations with the objective of reaching an agreement with regard to
restructuring of the Senior Subordinated Notes;
WHEREAS, Metrocall and each of the Consenting Creditors now desire to
implement a financial restructuring (the "Financial Restructuring"), and in
order to implement the Financial Restructuring, Metrocall intends to prepare
and file a disclosure statement (the "Disclosure Statement") and joint plan of
reorganization (the "Plan") consistent in all material respects with the terms
set forth in this Agreement and the term sheet, together with all relevant
exhibits thereto, attached hereto as Annex A (the "Plan Term Sheet")
implementing the terms of the Financial Restructuring in the cases (the
"Chapter 11 Cases") filed under the United States Bankruptcy Code, 11 U.S.C.
Section 101 et seq. (the "Bankruptcy Code"), and Metrocall intends to use its
best efforts to have the Disclosure Statement approved and such Plan confirmed
by the United States Bankruptcy Court for the District of Delaware (the
"Bankruptcy Court") in the Chapter 11 Case as expeditiously as possible under
the Bankruptcy Code and the Federal Rules of Bankruptcy Procedure (the
"Bankruptcy Rules");
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WHEREAS, each Consenting Lender that is a signatory hereto represents
and warrants, severally, and not jointly, that, as of the effective date of
this Agreement, (i) the principal amounts of its respective commitments under
the Senior Secured Loan are equal to the amounts set forth opposite its
signature below, (ii) it is the legal owner, beneficial owner and/or the
investment adviser, representative or manager for the beneficial owner (with
the power to vote and dispose of such claims on behalf of such beneficial
owner) of such legal or beneficial owner of such aggregate principal amount
of Senior Secured Loan and any claim for interest and fees with respect
thereto (for each such party, the "Consenting Lender's Relevant Claim"), (iii)
said commitments were (a) entered into between said Consenting Lender and
Metrocall on or about March 17, 2000 or (b) acquired by said Lender pursuant
to an assignment effective as of the date set forth opposite its signature
below and (iv) that it has not entered into any assignment, participation or
other transfer with respect to its commitments except as set forth opposite
its signature below.
WHEREAS, each Consenting Holder holds or is the legal owner,
beneficial owner and/or the investment adviser, representative or manager for
the beneficial owner (with the power to vote and dispose of such claims on
behalf of such beneficial owner) of such legal or beneficial owner of such
aggregate principal amount of Senior Subordinated Notes and any claim for
interest and fees with respect thereto (for each such party, the "Consenting
Holder's Relevant Claim" and, collectively and together with each Consenting
Lender's Relevant Claim, the "Relevant Claims", and each independently a
"Relevant Claim"), in each case as set forth below each such Consenting
Holder's signature attached hereto;
WHEREAS, those certain Consenting Holders designated as "Qualified
Holders" on the signature page hereto have has held or have been the legal or
beneficial owner of the Relevant Claim for at least eighteen (18) months prior
to the execution of this Agreement;
WHEREAS, as part of the Financial Restructuring, the Plan will
contemplate the distribution of (i) a $60 million senior secured note (the
"Secured Note") from Reorganized XxXxx RCC Communications, Inc., (ii) a $20
million senior secured PIK notes (the "Senior Secured PIK Notes") issued by
Reorganized Metrocall, Inc., (iii) new preferred stock to be issued by
Reorganized Metrocall, Inc. (the "Preferred Stock") representing an initial
liquidation preference of $53 million of the total $60 million initial
liquidation preference of such Preferred Stock, and (iv) 42% (subject to a
ratable dilution of up to 7% for stock options to be issued to eligible
Metrocall employees pursuant to the stock option plan) of the shares of the
total new common stock (the "Common Stock") of Reorganized Metrocall, Inc. to
be issued (the Common Stock and the Preferred Stock collectively, the "Stock")
to the Consenting Lenders, as described in the Plan Term Sheet; and
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WHEREAS, as part of the Financial Restructuring, the Plan will
contemplate the distribution to the holders of general unsecured claims of
Metrocall, Inc. (including, allowed claims of the holders of the Senior
Subordinated Notes) of (i) Preferred Stock representing a $5 million initial
liquidation preference of the total $60 million initial liquidation preference
of such Preferred Stock and (ii) 58% (subject to a ratable dilution of up to
7% for stock options to be issued to eligible Metrocall employees pursuant to
the stock option plan) of the Common Stock of Reorganized Metrocall, Inc.; and
WHEREAS, each Consenting Creditor desires to support and vote for
confirmation of the Plan, and Metrocall desires to obtain the commitment of
the Consenting Creditors to support and vote for the Plan, in each case
subject to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the promises and the mutual
covenants and agreements set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Metrocall and the Consenting Creditors agree as follows:
SECTION 1. VOTING.
Each Consenting Creditor represents and warrants that, as of the date
hereof, it is the legal owner, beneficial owner and/or the investment adviser,
representative or manager for the beneficial owner (with the power to vote and
dispose of such claims on behalf of such beneficial owner) of such legal or
beneficial owner's Relevant Claim and that there is no Senior Secured Loan or
Senior Subordinated Notes, as the case may be, of which it is the legal owner,
beneficial owner and/or investment advisor or manager for such legal or
beneficial owner which are not part of its Relevant Claim. Each Consenting
Creditor agrees for itself that (i) it shall timely vote its Relevant Claim
and any other claims or interests that it holds against or in the Company (and
not revoke or withdraw such vote) to accept the Plan; provided that the terms
of the Plan and Disclosure Statement are consistent in all material respects
with the terms described in the Plan Term Sheet and do not contain any
material misstatement or omission and (ii) to the extent such election is
available, it shall not elect on its ballot to preserve any claims, if any,
such Consenting Creditor may have that may be affected by the releases
provided for under the Plan. For so long as this Agreement has not been
terminated in accordance with Section 8, the Consenting Creditors shall not
support in anyway any action, objection or motion by any party that would
result in termination of this Agreement or the Financial Restructuring.
SECTION 2. SUPPORT OF THE PLAN.
(a) So long as this Agreement shall remain in effect, each Consenting
Creditor agrees that so long as it is the legal owner, beneficial owner and/or
the investment adviser, representative or manager of any claims or interests,
including all or any portion of the Relevant Claim, it shall (i) from and
after the date hereof not agree to, consent to, provide any support to,
solicit or encourage, participate in the formulation of, or vote for
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any transaction or plan of reorganization or liquidation (an "Alternative
Proposal"), other than the Plan; (ii) from and after the date hereof not
interfere in any manner with the Company's efforts to obtain confirmation of
the Plan; (iii) execute and deliver a customary letter, in form and substance
reasonably satisfactory to the Company and such Consenting Creditor, from the
Consenting Creditors (or an ad hoc committee of Consenting Creditors) for
distribution to the Secured Lenders or holders of any impaired claims against
or interests in the Company, stating that such Consenting Creditor supports
and has committed to vote to approve the Plan; and (iv) agree to permit
disclosure in the Disclosure Statement and any filings by the Company with the
Securities and Exchange Commission of the contents of this Agreement,
including, but not limited to, the commitments given in clause (i) of this
Section 2(a) and the aggregate Relevant Claims held by all Consenting
Creditors; provided that the Company shall not disclose the amount of the
Relevant Claim of any individual Consenting Creditor, except as otherwise
required by applicable securities law.
(b) (i) So long as this Agreement shall remain in effect, each
Consenting Creditor agrees that so long as it is a holder of a Relevant Claim,
it shall not object to or otherwise commence any proceeding to oppose or alter
any of the terms of the Plan Term Sheet, including, but not limited to, the
terms and conditions any other document filed in connection with the
confirmation of the Plan hereinafter a "Reorganization Document") and shall
not take any action which is inconsistent with, or that would delay approval
or confirmation of any of the Disclosure Statement, the Plan or any of the
Reorganization Documents; provided that the terms of all such Reorganization
Documents are customary and otherwise consistent with the material terms of
the Plan Term Sheet and in form and substance satisfactory to the
administrative agent for the Secured Lenders. Without limiting the generality
of the foregoing, no Consenting Creditor may directly or indirectly seek,
solicit, support or encourage any other plan, sale, proposal or offer of
dissolution, winding up, liquidation, reorganization, merger or restructuring
of the Company or any of its subsidiaries that could reasonably be expected to
prevent, delay or impede the restructuring of the Company as contemplated by
the Plan or any Reorganization Document;
(ii) So long as this Agreement shall remain in effect, each of the
Consenting Creditors shall agree that neither it nor any of its subsidiaries
nor any of the officers and directors of it or its Subsidiaries shall, and it
shall direct and use its reasonable best efforts to cause its and its
subsidiaries' Representatives not to, directly or indirectly, initiate,
solicit, encourage or otherwise facilitate any inquiries or the making of any
proposal or offer with respect to any other plan, sale, proposal or offer of
dissolution, winding up, liquidation, reorganization, merger or restructuring
of the Company or any of its subsidiaries ("Other Plan") or Acquisition
Proposal.
(iii) For purposes of this Agreement, "Acquisition Proposal" means
any bona fide written offer or proposal for, or any written indication of
interest in, any (1) direct or indirect acquisition or purchase of any
business or assets of the Company or any of its subsidiaries that,
individually or in the aggregate, constitutes 15% or more of the net revenues,
net income or assets of the Company and its subsidiaries, taken as a whole,
(2)
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direct or indirect acquisition or purchase of 15% or more of any class of
equity securities of the Company or any of its subsidiaries whose business
constitutes 15% or more of the net revenues, net income or assets of the
Company and its subsidiaries, taken as a whole, (3) tender offer or exchange
offer that, if consummated, would result in any person beneficially owning 15%
or more of any class of securities of the Company or any of its subsidiaries
whose business constitutes 15% or more the net revenues, net income or assets
of the Company and its subsidiaries, taken as a whole, or (4) merger,
consolidation, business combination, joint venture, partnership,
recapitalization, liquidation, dissolution or similar transaction involving
the Company or any of its subsidiaries whose business constitutes 15% or more
of the net revenue, net income or assets of the Company and its subsidiaries,
taken as a whole.
(iv) So long as this Agreement shall remain in effect, each
Consenting Creditor shall agree that neither it nor any of its subsidiaries
nor any of the officers and directors of it or its subsidiaries shall, and
that it shall direct and use its reasonable best efforts to cause its
Representatives not to, directly or indirectly, have any discussion with, or
provide any confidential information or data to, any person relating to, or in
contemplation of, an Other Plan or Acquisition Proposal or engage in any
negotiations concerning an Other Plan or Acquisition Proposal, or otherwise
knowingly facilitate any effort or attempt to make or implement an Other Plan
or Acquisition Proposal (including by waiving any "standstill" or similar
provision of any agreement with any person). "Representatives" means, as to a
Person, any employee, agents, investment bankers, attorneys, accountants,
consultants, advisers, and other representatives retained by it or any of its
subsidiaries.
(v) So long as this Agreement shall remain in effect, each
Consenting Creditor shall agree that it will immediately cease and cause to be
terminated any existing activities, discussions or negotiations with any
parties conducted prior to the execution of this Agreement with respect to any
Acquisition Proposal or Other Plan. Each Consenting Creditor shall agree that
it will take the necessary steps to promptly inform each of its
Representatives of the obligations undertaken with respect to this No Shop.
SECTION 3. FORBEARANCE.
Each Consenting Creditor hereby agrees to forebear from exercising any
rights or remedies it may have under the Loan Documents and all related
documents, applicable law, or otherwise, (including, without limitation, the
filing of an involuntary petition against the Company), with respect to any
existing default under the Loan Documents and all related documents during the
period commencing on the date hereof and ending on the date on which the
Chapter 11 Cases are commenced (it being understood that such forbearance
applies to any defaults caused by the commencement of the Chapter 11 Cases as
well) (the "Forbearance").
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SECTION 4. RESTRICTIONS ON TRANSFER.
Each Consenting Creditor hereby agrees that, from the date of
execution of this Agreement through the effective date of the Plan (the
"Effective Date"), it shall not sell, assign, transfer, or otherwise dispose
of all or any of its Relevant Claims or any option thereon or any right,
interest (voting or otherwise) therein. Notwithstanding the foregoing,
Consenting Holders may sell, assign, transfer, or otherwise dispose of all or
any of its Relevant Claims or any option thereon or any right, interest
(voting or otherwise) therein provided that the transferee agrees in writing
to be bound by the terms of this Agreement by executing a counterpart
signature page to this Agreement and the transferor promptly provides the
Company with a copy thereof, in which event the Company shall be deemed to
have acknowledged that its obligations to the Consenting Holders hereunder
shall be deemed to constitute obligations in favor of such transferee, and the
Company shall confirm such acknowledgment in writing.
Each Consenting Lender further agrees that, so long as this Agreement
shall remain in effect, it shall not consent to any Secured Lender assigning,
participating or transferring any of such Secured Lender's rights or interests
under the Loan Agreement or other Loan Documents (as defined in the Loan
Agreement).
SECTION 5. FURTHER ACQUISITION OF SENIOR SUBORDINATED NOTES.
This Agreement shall in no way be construed to preclude the Consenting
Holders or any of their respective subsidiaries or affiliates from acquiring
additional Senior Subordinated Notes. However, any such additional Senior
Subordinated Notes acquired by a Consenting Holder or such subsidiaries or
affiliates shall automatically be deemed to be a Consenting Noteholder's
Relevant Claim and to be subject to the terms of this Agreement. The
Consenting Holder agrees that it shall not create any subsidiary or affiliate
for the sole purpose of acquiring any Senior Subordinated Notes. Upon the
request of the Company, each Consenting Holder shall provide an accurate and
current list of each Consenting Noteholder's Relevant Claim held by such
Consenting Holder, subsidiary and/or affiliate.
SECTION 6. COMPANY AGREEMENT.
The Company hereby agrees to use its reasonable best efforts to have
the Disclosure Statement approved by the Bankruptcy Court, and thereafter to
use its reasonable efforts to obtain an order of the Bankruptcy Court
confirming the Plan, in each case as expeditiously as commercially reasonable
under the Bankruptcy Code and Bankruptcy Rules, and consistent in all material
respects (including with respect to the treatment of claims and interests)
with the terms and conditions of the Plan Term Sheet. The Company shall use
its reasonable best efforts to comply with the time deadlines set forth in the
Plan Term Sheet.
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SECTION 7. ACKNOWLEDGMENT.
This Agreement is not and shall not be deemed to be a solicitation for
consents to the Plan. The acceptance of the Consenting Creditors will not be
solicited until the Consenting Creditors have received the Disclosure
Statement and related ballot, as approved by the Bankruptcy Court.
SECTION 8. TERM AND TERMINATION.
(a) This Agreement shall initially be effective until June 10, 2002.
(b) This Agreement shall automatically be extended until the earlier
of (i) October 31, 2002; or (ii) the effective date of the Plan, if on or
before May 28, 2002, the Company delivers to the Consenting Creditors
definitive documentation (negotiated in good faith with the Secured Lenders
and the Committee) that consists of all "first-day" motions and papers and a
Disclosure Statement and Plan, all of which shall be (i) substantially in
accordance with the material terms and conditions of the Plan Term Sheet and
(ii) in form and substance reasonably satisfactory to the administrative agent
for the Secured Lenders.
(c) Notwithstanding anything to the contrary herein, all obligations
of each Consenting Creditor hereunder shall terminate if (i) the Plan provides
or is modified to provide for treatment of each Consenting Lender and/or
Consenting Holder which is materially adverse to the treatment described in
the Plan Term Sheet; (ii) Metrocall does not commence the Chapter 11 Cases on
or before June 3, 2002 or the Chapter 11 Cases are commenced without the
simultaneous filing of the Plan and Disclosure Statement; (iii) the date that
the Bankruptcy Court approves the Disclosure Statement is not within 90 days
from the date that Metrocall commences the Chapter 11 Cases; (iv) the
effective date of the Plan is not within 180 days from the date that Metrocall
commences the Chapter 11 Cases; (v) the Company shall have filed any motion or
other pleading, or otherwise shall have brought any action or proceeding,
challenging or objecting to the claims of a Consenting Creditor or otherwise
seeking any recovery from, or injunctive relief against, a Consenting Creditor
(other than with respect to any alleged or actual breach by a Consenting
Creditor of the terms of this Agreement or any other agreement between the
Company and such Consenting Creditor; (vi) the Chapter 11 Cases shall have
been dismissed or converted to a case under Chapter 7 of the Bankruptcy Code;
(vii) a Chapter 11 trustee is appointed or (viii) an examiner with enlarged
powers relating to the operation of the Company's business (powers beyond
those set forth in Section 1106(a)(3) and (4) of the Bankruptcy Code) under
Section 1106(b) of the Bankruptcy Code, shall have been appointed in the
Chapter 11 Cases.
SECTION 9. GOOD FAITH NEGOTIATION OF DOCUMENTS.
Each party hereby further covenants and agrees to negotiate the
Reorganization Documents and any definitive documents relating thereto in good
faith and, in any event, in all material respects consistent with the Plan
Term Sheet.
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SECTION 10. REPRESENTATIONS AND WARRANTIES.
Each of the Consenting Creditors and the Company represent and warrant
to each other that the following statements are true, correct and complete as
of the date hereof:
(a) Power and Authority. It has all requisite corporate, partnership,
or limited liability company power and authority to enter into this Agreement
and to carry out the transactions contemplated hereby, and to perform its
obligations hereunder.
(b) Authorization. The execution and delivery of this Agreement and
the performance of its obligations hereunder have been duly authorized by all
necessary corporate, partnership or limited liability company action on its
part.
(c) No Conflicts. The execution, delivery and performance of this
Agreement does not and shall not: (i) violate any provision of law, rule or
regulation applicable to it or any of its subsidiaries, (ii) violate its
certificate of incorporation, bylaws or other organizational documents or
those of any of its subsidiaries; or (iii) conflict with, result in a breach
of or constitute (with due notice or lapse of time or both) a default under
any material contractual obligation to which it or any of its subsidiaries is
a party.
(d) Governmental Consents. The execution, delivery and performance by
it of this Agreement do not and shall not require any registration or filing
with, consent or approval of, or notice to, or other action to, with or by,
any federal, state or other governmental authority or regulatory body (other
than the approval of the Bankruptcy Court in the case of the Company).
(e) Binding Obligation. Subject to the provision of Sections 1125 and
1126 of the Bankruptcy Code, this Agreement is a legally valid and binding
obligation, enforceable in accordance with its terms.
SECTION 11. COMPLETE AGREEMENT, MODIFICATION OF AGREEMENT.
This Agreement and the other agreements, including but not limited to
the Plan Term Sheet, referenced herein constitute the complete agreement
between the parties with respect to the subject matter hereof. This Agreement
may not be modified, altered, amended or supplemented except by an agreement
in writing signed by the Company and each of the Consenting Creditors.
SECTION 12. SPECIFIC PERFORMANCE.
It is understood and agreed by the parties that money damages would
not be a sufficient remedy for any breach of this Agreement by any party and
each non-breaching party shall be entitled to the sole and exclusive remedy of
specific performance and injunctive or other equitable relief, including
attorneys fees and costs, as a remedy of any such breach, and each party
agrees to waive any requirement for the securing or posting of a bond in
connection with such remedy.
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SECTION 13. IMPACT OF APPOINTMENT OF CREDITORS COMMITTEE.
If an official committee of holders of unsecured claims is appointed
by the United States Trustee in the Chapter 11 Cases, the Company shall
cooperate with the Consenting Holders in seeking to cause the United States
Trustee to appoint the Consenting Holders to be members of such official
committee pursuant to Section 1102 of the Bankruptcy Code if the Consenting
Holders so elect (but the fact of such service on such committee shall not
otherwise affect the continuing obligations of such Consenting Holders under
this Agreement or the validity or enforceability of this Agreement; provided
that, to the extent that a Consenting Holder is acting in his or its capacity
as a member of such committee, such Consenting Holder will not be prohibited
from acting as required by the fiduciary duties of a committee member in its
good faith judgment and will not be liable to the Company hereunder or in
respect hereof for so acting).
SECTION 14. FEES AND EXPENSES.
The Company shall pay the reasonable fees and expenses of the
financial and legal advisors for the Committee, in accordance with (i) the
Company's respective agreements with such firms, (ii) the terms and conditions
of any order entered in the Chapter 11 Cases authorizing the Metrocall's use
of cash collateral, and (iii) as further set forth in accordance with the Plan
Term Sheet.
SECTION 15. ASSIGNMENT.
Except as set forth in Section 4, no rights or obligations of any
party under this Agreement may be assigned or transferred to any other person
or entity.
SECTION 16. GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE
PERFORMED IN SUCH STATE. By its execution and delivery of this Agreement, each
of the parties hereto hereby irrevocably and unconditionally agrees for itself
that any legal action, suit or proceeding against it with respect to any
matter under or arising out of or in connection with this Agreement or for
recognition or enforcement of any judgment rendered in any such action, suit
or proceeding, may be brought in the U.S. District Court for the Southern
District of New York. By execution and delivery of this Agreement, each of the
parties hereto hereby irrevocably accepts and submits itself to the
non-exclusive jurisdiction of each such court, generally and unconditionally,
with respect to any such action, suit or proceeding. Notwithstanding the
foregoing consent to New York jurisdiction, upon the commencement of the
Chapter 11 Cases, each of the parties hereto hereby agrees that the Bankruptcy
Court shall have exclusive jurisdiction of all matters arising out of or in
connection with this Agreement.
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SECTION 17. INDEPENDENT DUE DILIGENCE AND DECISION-MAKING.
Each of the Consenting Creditors hereby confirms that its decision to
execute this Agreement has been based upon its independent investigation of
the operations, businesses, financial and other conditions and prospects of
Metrocall. To the extent any materials or information have been furnished to
it by Metrocall, the undersigned hereby acknowledges that they have been
provided for informational purposes only, without any representation or
warranty.
SECTION 18. HEADINGS.
The headings of the sections, paragraphs and subsections of this
Agreement are inserted for convenience only and shall not affect the
interpretation hereof.
SECTION 19. PRIOR NEGOTIATIONS.
This Agreement, the Plan Term Sheet and the Reorganization Documents
supersede all prior negotiations with respect to the subject matter hereof.
SECTION 20. CONSIDERATION.
It is hereby acknowledged by the Company and each of the Consenting
Creditors that no consideration shall be due or paid to the Consenting
Creditors for their execution of this Agreement, other than the Company's
agreement to use its reasonable best efforts to obtain approval of the
Disclosure Statement and to confirm the Plan in accordance with the terms and
conditions of this Agreement and the Plan Term Sheet.
SECTION 21. RELEASES
Each Consenting Creditor hereby acknowledges that releases shall be
granted pursuant to the Plan and that such releases shall be substantially
consistent with the terms and provisions set forth in the Plan Term Sheet and
each Consenting Creditor hereby agrees to not to take any action inconsistent
therewith.
SECTION 22. THIRD PARTY BENEFICIARIES.
Except as provided herein, this Agreement shall be solely for the
benefit of the parties hereto, including their permitted assigns, and no other
person or entity shall be a third party beneficiary hereof. Nothing in this
Agreement, express or implied, shall give to any party or entity other than
the parties any benefit or any legal or equitable right, remedy or claim under
this Agreement.
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SECTION 23. NOTICES.
All notices hereunder to be served upon the Company, any Consenting
Lender or any Consenting Holder shall be deemed given if in writing and
delivered or sent by telecopy or courier to the following addresses or
telecopier numbers (or at such other addresses or telecopier numbers as shall
be specified by like notice), respectively:
If to the Company
Metrocall Inc.
0000 Xxxxxxxx Xxxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with copies to:
Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Consenting Lenders
Toronto Dominion (Texas), Inc.
Administrative Agent
000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: Xxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
TD Securities (USA) Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attn: Xxx Xxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
12
and a copy to:
Xxxxx Xxxxx Xxxx & Maw
Counsel to Metrocall Secured Lenders
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attn: J. Xxxxxx Xxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and
Xxxxx Xxxxx Xxxx & Maw
Counsel to Metrocall Secured Lenders
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and
If to the Consenting Holders
To the Consenting Holders at their respective
addresses on the signature pages hereof
and with copies to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attn:Xxxxxxx X. Xxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
SECTION 24. COUNTERPARTS.
This Agreement may be executed by facsimile and in any number of
counterparts, each of which shall, collectively and separately, constitute one
and the same agreement.
SECTION 25. SEVERAL OBLIGATIONS.
The obligations of the Consenting Creditors pursuant to this Agreement
are several (and not joint and several), and no Consenting Creditor is
responsible for the representatives, warranties, covenants or agreements of
any other Consenting Creditor.
13
SECTION 26. ALIEN OWNERSHIP REPRESENTATION.
Each Consenting Creditor hereby represents and warrants that, if an
individual, it is not an alien or representative of any foreign government. If
a corporation, such Consenting Creditor is not directly or indirectly
controlled by any other corporation of which more than one-fourth of its
capital stock is owned of record or voted by aliens, their representatives, or
by a foreign government or representative thereof, or by any corporation
organized under the laws of a foreign country.
If such Consenting Creditor cannot make the forgoing representation,
then such Consenting Creditor has identified all applicable foreign ownership
interests, by country of origin, percentage ownership interest in, and
identified any foreign officers or directors as set forth on Schedule "A"
annexed hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
METROCALL, INC.,
METROCALL USA, INC.,
XxXXX RCC COMMUNICATIONS, INC.,
ADVANCED NATIONWIDE MESSAGING CORPORATION,
MOBILEFONE SERVICE, L.P.,
MSI, INC.
By: /s/ XXXXXXX X. XXXXX
-----------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chief Financial Officer
14
SIGNATURE PAGE TO LOCK-UP, CONSENT AND VOTING AGREEMENT FOR CONSENTING LENDERS
ADMINISTRATIVE AGENT AND LENDERS: TORONTO DOMINION (TEXAS), INC., as
Administrative Agent and a Lender
Commitments
-----------
Facility A Facility B Total
---------- ---------- -----
(Revolver) (Term)
$16,600,000 $5,000,000 By: /s/ XXXXXXX X. XXXXX
$21,600,000 ------------------------------
Effective: On or about March 17, 2000 Name: Xxxxxxx X. Xxxxx
Transfers: None Title: Vice President
FLEET NATIONAL BANK, as a Lender
$16,600,000 $5,000,000
$21,600,000 By: /s/ Xxxxxx X. Xxxxx
Effective: On or about March 17, 2000 -------------------------
Transfers: None Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
15
SIGNATURE PAGE TO LOCK-UP, CONSENT AND VOTING AGREEMENT FOR CONSENTING LENDERS
WACHOVIA BANK, NATIONAL
ASSOCIATION, as a Lender
$16,600,000 $5,000,000 By: /s/ XXXXXXXX X. XXXXXX
$21,600,000 --------------------------
Effective: On or about March 17, 2000 Name: Xxxxxxxx X. Xxxxxx
Transfers: None Title: Vice President
COMMERCIAL LOAN FUNDING TRUST I, as a
Lender
By: Xxxxxx Commercial Paper, Inc.,
not in its individual capacity but
solely as administrative agent
$0 $15,000,000 By: /s/ G. XXXXXX XXXXX
$15,000,000 -----------------------------
Effective: On or about March 17, 2000 Name: G. Xxxxxx Xxxxx
Transfers: None Title: Authorized Signatory
XXXXXX XXXXXXX SENIOR FUNDING, INC., as
a Lender
$8,300,000 $5,000,000 By: /s/ XXXXXXX X. X'XXXXX
$13,300,000 ------------------------------
Effective: On or about March 17, 2000 Name: Xxxxxxx X. X'Xxxxx
Transfers: None Title: Vice President
16
SIGNATURE PAGE TO LOCK-UP, CONSENT AND VOTING AGREEMENT FOR CONSENTING LENDERS
ENDEAVOR L.L.C., as a Lender
$6,600,000 $5,000,000 By: /s/ XXXXX X. XXXXXXXXXX
$11,600,000 ----------------------------
Effective: Acquired pursuant to an Name: Xxxxx X. Xxxxxxxxxx
assignment effective October 2001 Title: Senior Managing Director
Transfers: None
CAPITAL CROSSOVER PARTNERS, as a
Lender
$3,000,000 $5,000,000 By: /s/ XXXXXX X. XXXXX
$8,000,000 --------------------------
Effective: Acquired pursuant to Name: Xxxxxx X. Xxxxx
assignments effective (i) February 2002 Title: Partner
($5,000,000) and (ii) March 2002
($3,000,000)
Transfers: Participation of substantial
portion of Commitments to affiliated
entities
XXXXXXX & XXXXXX VALUE PARTNERS, L.P.,
as a Lender
$7,000,000 $0 By: /s/ XXXXXX X. XXXXXXX, XX.
$7,000,000 ---------------------------------
Effective: Acquired pursuant to Name: Xxxxxx X. Xxxxxxx, Xx.
assignment effective March 2002 Title: General Partner
Transfers:
TOTAL:
$83,000,000 $50,000,000
$133,000,000
17
SIGNATURE PAGE TO LOCK-UP, CONSENT AND VOTING AGREEMENT FOR CONSENTING HOLDERS
FRANKLIN ADVISERS, INC.
By: /s/ XXXXXXX XXXXXXXX
----------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Vice President
Aggregate Principal Amount
of Senior Subordinated Notes: $97,000,000
OAKTREE CAPITAL MANAGEMENT, LLC
By: /s/ XXXXXXX XXXXXXX
----------------------------
Name: Xxxxxxx Xxxxxxx
Title: Managing Director
By: /s/ XXXXXXX XXXX
----------------------------
Name: Xxxxxxx Xxxx
Title: Assistant Vice President, Legal
Aggregate Principal Amount
of Senior Subordinated Notes: $69,690,000
ASPEN ADVISORS
By: /s/ XXXX XXXXX
-----------------------
Name: Xxxx Xxxxx
Title: Vice President
Aggregate Principal Amount
of Senior Subordinated Notes: $110,925,000
XXXXXXX & XXXXXX VALUE PARTNERS, L.P.
By: /s/ XXXXXX X. XXXXXXX, XX.
--------------------------------
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: General Partner
Aggregate Principal Amount
of Senior Subordinated Notes: $51,000,000
18
SIGNATURE PAGE TO LOCK-UP, CONSENT AND VOTING AGREEMENT FOR CONSENTING HOLDERS
XXXXX XXXXXX
By: /s/ XXXXX XXXXXX
------------------------
Name: Xxxxx Xxxxxx
Aggregate Principal Amount
of Senior Subordinated Notes: $2,225,000
XXXXX XXXX-XXXXXX
By: /s/ XXXXX XXXX-XXXXXX
------------------------
Name: Xxxxx Xxxx-Xxxxxx
Aggregate Principal Amount
of Senior Subordinated Notes: $7,173,000
XXXXX XXXXXX
By:/s/ XXXXX XXXXXX
------------------------
Name: Xxxxx Xxxxxx
Aggregate Principal Amount
of Senior Subordinated Notes: $250,000
XXXXXX XXXXXX
By: /s/ XXXXXX XXXXXX
------------------------
Name: Xxxxxx Xxxxxx
Aggregate Principal Amount
of Senior Subordinated Notes: $2,000,000
XXXX XXXXXXX
By: /s/ XXXXXXX XXXX XXXXXXX
------------------------
Name: Xxxx Xxxxxxx
Aggregate Principal Amount
of Senior Subordinated Notes: $1,000,000
XXXXXX X. XXXXXXX, XX.
By: /s/ XXXXXX X.XXXXXXX, XX.
------------------------
Name: Xxxxxx X. Xxxxxxx
Aggregate Principal Amount
of Senior Subordinated Notes: $3,965,000
19
SIGNATURE PAGE TO LOCK-UP, CONSENT AND VOTING AGREEMENT FOR CONSENTING HOLDERS
XXXXXXXX XXXXXXXXXX
By: /s/ XXXXXXXX XXXXXXXXXX
------------------------
Name: Xxxxxxxx Xxxxxxxxxx
Aggregate Principal Amount
of Senior Subordinated Notes: $1,314,000
XXXXXX XXXXXXX
By: /s/ XXXXXX XXXXXXX
------------------------
Name: Xxxxxx Xxxxxxx
Aggregate Principal Amount
of Senior Subordinated Notes: $6,025,000
XXXXXXXXXXX SIEGE
By: /s/ XXXXXXXXXXX SIEGE
------------------------
Name: Xxxxxxxxxxx Siege
Aggregate Principal Amount
of Senior Subordinated Notes: $7,225,000
XXXX XXXXXXXXX
By: /s/ XXXX XXXXXXXXX
------------------------
Name: Xxxx Xxxxxxxxx
Aggregate Principal Amount
of Senior Subordinated Notes: $14,468,000
XXXXXXX XXXXX
By: /s/ XXXXXXX XXXXX
------------------------
Name: Xxxxxxx Xxxxx
Aggregate Principal Amount
of Senior Subordinated Notes: $10,310,000
20
SIGNATURE PAGE TO LOCK-UP, CONSENT AND VOTING AGREEMENT FOR CONSENTING HOLDERS
XXXXXX X. XXXXXX
By: /s/ XXXXXX X. XXXXXX
------------------------
Name: Xxxxxx X. Xxxxxx
Aggregate Principal Amount
of Senior Subordinated Notes: $20,000,000
XXXXXX XXXXXX HOMES PROFIT SHARING PLAN
By: /s/ Xxxxxx Xxxxxx
------------------------
Name: THOMAS, GIBSON, TRUSTEE
Aggregate Principal Amount
of Senior Subordinated Notes: $1,097,000
XXXXXXXX XXXXXX
By: /s/ XXXXXXXX. XXXXXX
------------------------
Name: Xxxxxxxx Xxxxxx
Aggregate Principal Amount
of Senior Subordinated Notes: $10,000,000
XXXXXX XXXXXX
By: /s/ XXXXXX XXXXXX
------------------------
Name: Xxxxxx Xxxxxx
Aggregate Principal Amount
of Senior Subordinated Notes: $3,000,000
21
SCHEDULE "A"
IDENTIFICATION OF CONSENTING CREDITOR
FOREIGN OWNERSHIP INTERESTS
CONSENTING FOREIGN OWNERSHIP PERCENTAGE NAMES OF
CREDITOR INTEREST BY OF FOREIGN FOREIGN
COUNTRY OF ORIGIN OWNERSHIP DIRECTORS &
OFFICERS
22
ANNEX "A"
METROCALL, INC., ET AL.
STAND ALONE REORGANIZATION TERM SHEET (THE "PLAN TERM SHEET")
MAY 21, 2002
A summary of the terms and conditions for the pre-negotiated joint plan of
reorganization (collectively the "Plan") of Metrocall, Inc., Metrocall USA,
Inc., XxXxx RCC Communications, Inc., Advanced Nationwide Messaging Corp.,
MSI, Inc., and Mobilfone Service, L.P. (collectively, "Metrocall" and the
"Debtors") follows(1):
Lock-Up Agreement
Metrocall anticipates that prior to commencing
its reorganization proceedings under chapter 11 of title
11 of the United States Code (the "Chapter 11 Cases"),
11 U.S.C. Sections 101 et seq. (the "Bankruptcy Code"),
it will require the execution of a "Lock-Up Agreement"
with key creditor constituencies, including its Secured
Lenders (as defined in the Lock-Up Agreement to which
this Plan Term Sheet is attached thereto as Annex "A")
and each of the members of the ad hoc committee (the
"Committee") of Metrocall, Inc's senior subordinated
noteholders with respect to the terms of the Plan as
summarized herein.
Metrocall requires Secured Lenders and Committee
members, as the case may be, necessary to constitute in
excess of 50% in number of the Secured Lenders holding
at least of 66 2/3% of the principal amount of existing
senior secured debt and at least 80% in number of the
Committee members holding at least 66 2/3% of the
principal amount of existing subordinated noteholder
debt, respectively, to execute and deliver Lock-Up
Agreements in favor of Metrocall, providing, among other
things, that each party to the Lock-Up Agreement agrees
(i) to vote in favor of the Plan contemplated by this
Plan Term Sheet, the Term Sheet for the new $60 million
"Senior Secured Note" attached hereto as Exhibit "A",
the Term Sheet for the "Senior Secured PIK Notes"
attached hereto as Exhibit "B", and the Term Sheet for
the "Preferred Stock" attached hereto as Exhibit "C";
(ii) not to object to any relief or motion to be brought
by Metrocall in connection with or related to effecting
the Plan and/or the Reorganization; (iii) to restrict
the transfer by any Noteholder of any claim (or
interests therein) held by it against Metrocall unless
the transferee has agreed to assume all obligations and
limitations of the Lock-Up
--------
(1) THIS PLAN TERM SHEET IS NOT AN OFFER WITH RESPECT TO ANY SECURITIES OR A
SOLICITATION OF ACCEPTANCES OF A CHAPTER 11 PLAN. ANY SUCH OFFER OR SOLICITATION
WILL BE MADE BY METROCALL IN COMPLIANCE WITH ALL APPLICABLE SECURITIES LAWS
AND/OR PROVISIONS OF THE BANKRUPTCY CODE.
Agreement; (iv) to restrict the transfer by any Secured
Lender of any claim (or interests therein) held by it
against Metrocall from the date of execution of the
Lock-Up Agreement through the effective date of the Plan
and (v) not to vote for or in any way support, solicit
or encourage, any other transaction other than the Plan
unless and until Lock-Up Agreements are terminated in
accordance with their terms; and (vi) not to interfere
in any manner with Metrocall's efforts to obtain
confirmation of the Plan.
Term Of Lock-Up
The Lock-Up Agreement shall initially be
effective until June 10, 2002. The lock-up term shall
automatically be extended until the earlier of (i)
October 31, 2002; or (ii) the confirmation of the Plan,
on or before May 28, 2002, Metrocall delivers to the
Secured Lenders and the Committee definitive
documentation that consists of the Plan, Disclosure
Statement and the "First Day Papers", all of which shall
(a) be substantially in accordance with the material
terms and conditions presented herein and (b) in form
and substance reasonably satisfactory to the
Administrative Agent for the Secured Lenders. THE TERMS
AND CONDITIONS OF THE LOCK-UP AGREEMENT ARE SET FORTH IN
THE LOCK-UP AGREEMENT TO WHICH THIS PLAN TERM SHEET IS
ANNEXED.
Glenayre
Metrocall recently executed an extension of its
service contract with Glenayre providing Metrocall with
a one-year extension and an option to extend the
agreement for an additional year at Metrocall's
discretion. Glenayre provides support and maintenance
for Metrocall's paging infrastructure and network and
Metrocall's ability to continue these services with
Glenayre is an essential aspect of Metrocall's ability
to provide paging services. The amendment with Glenayre
required Metrocall to prepay the $1 million fee in
consideration of the initial year of services to be
provided under the agreement. In the event that
Metrocall elects to exercise its option to extend the
agreement for an additional year, Metrocall will be
required to prepay Glenayre for the additional period
prior to expiration of the initial term. The Glenayre
service agreement requires and Metrocall further
contemplates filing a first-day motion seeking authority
of the Bankruptcy Court to assume same.
Weblink
Metrocall is currently in the process of further
negotiating amendments to the various strategic alliance
agreements that it maintains with Weblink (the "Alliance
Agreements"). Metrocall's business model
and projections assume that these requested amendments
will, among other things, include a release of certain
installment payments due from Metrocall commencing in
2004 that may aggregate $15 million. Pursuant to the
Alliance Agreements Metrocall provides advanced
messaging services to its customers. If Metrocall is
able to re-negotiate such amendments with Weblink, it
further contemplates filing a first-day motion seeking
authority of the Bankruptcy Court to assume the Alliance
Agreements with Weblink as amended. If Metrocall is
unable to re-negotiate such amendments with Weblink, it
is likely that Metrocall will, subject to approval with
the Committee and Secured Lenders, seek to "reject" the
Alliance Agreements with Weblink.
The terms of the current Alliance Agreements give
Weblink a right to terminate the agreements, after
satisfaction of certain conditions and prior notice to
Metrocall, if Metrocall has not otherwise obtained an
order in its Chapter 11 Cases authorizing and approving
its assumption of same by April 30, 2002. Weblink has
agreed to extend this deadline and, on April 30, 2002
filed a motion (to be heard on June 18, 2002) in its
chapter 11 cases seeking bankruptcy court approval to
extend the Metrocall assumption deadline to a date that
is forty-five days after Metrocall's Petition Date but
not later than October 30, 2002.
EPX
Metrocall is presently in the process of
replacing its merchant processing provider Huntington
Bank ("Huntington) /First Data Corp. which has informed
Metrocall that it intends to terminate its processing
agreement with Metrocall in 2002. In anticipation of
this event, Metrocall has negotiated an agreement for
replacement processing services with Electronic Payment
Exchange, Inc. ("EPX") /XXXXXXXXXX.XXX. Metrocall relies
on merchant processing services to process credit card
transactions with its customers. The EPX agreement has
required Metrocall to fund a $2 million reserve against
fees and potential chargebacks. Metrocall has funded
approximately $500,000 of this reserve amount and the
balance shall be funded by EPX withholding 5% of monthly
receipts under the processing agreement. Under the
present merchant processing agreement Huntington is
currently holding a $1.85 million reserve. Metrocall
believes that it is necessary to replace Huntington as a
provider and that the agreement offered by EPX
represents the best available terms for these services
under the circumstances. Metrocall began phasing in EPX
services on April 1, 2002 and believes that the
transition to EPX will be completed on or about April
30, 2002 at which time Metrocall will terminate the
Huntington relationship. Metrocall will attempt to
recover the balance of any reserves held by Huntington
but can provide no assurance that these amounts will be
immediately returned to Metrocall as the Huntington
agreement
provides that such reserves may be maintained by
Huntington for ten-months following termination.
Spectrum Management, LLC
Metrocall is in the process of closing a
settlement agreement with Spectrum Management, LLC
("Spectrum") related to certain indemnity claims
asserted by Spectrum against Metrocall, Inc. and its
wholly-owned licensing subsidiary Metrocall USA, Inc.
arising under a certain Asset Purchase Agreement between
the parties dated November 19, 1999 whereby Metrocall
sold certain assets of its ETS division to Spectrum. The
purchase price for these assets was $10.068 million of
which Metrocall received $6 million in cash and took
back a note for approximately $4.1 million. Although the
term note held by Metrocall is contractually subordinate
to Spectrum's secured lenders, Metrocall may receive
scheduled payments from Spectrum pursuant to the note.
By letter dated April 25, 2001, Spectrum alleged that
Metrocall breached certain representations and
warranties made under the Asset Purchase Agreement and
asserted indemnity claims against Metrocall and
Metrocall USA, Inc. of approximately $6 million.
Metrocall's board has determined that a settlement of
these claims, without acknowledging any liability to
Spectrum, represents the best interests of Metrocall and
its stakeholders and has approved a settlement that
requires (i) Spectrum to pay to Metrocall $1 million of
past due payments under the term note and (ii) settles
all remaining claims between the parties, including
those asserted by Spectrum under the indemnity
provisions against Metrocall, Inc. and Metrocall USA,
Inc. in exchange for Metrocall forgiving any remaining
balance due under the term note. Pursuant to this
settlement agreement, Metrocall has agreed to file a
motion (early in its Chapter 11 Cases) seeking
bankruptcy court approval of this settlement agreement
with Spectrum.
Tower Lessors
American Tower and Pinnacle are two of Metrocall
largest tower site lessors representing slightly in
excess of 25% of Metrocall's total tower site leases.
Metrocall is in the process of finalizing settlement
agreements with each of these lessors to resolve
disputes with respect to various tower site leases. It
is contemplated that the settlement agreements will
include master lease agreements governing all of the
respective tower sites. Metrocall anticipates filing a
motion (early in its Chapter 11 Cases) seeking
bankruptcy court approval to assume these master lease
agreements, and approval of the settlement agreements,
as may be necessary.
PETITION DATE: Metrocall, Inc. and each of its wholly-owned,
direct and indirect, operating and license subsidiaries
shall file for chapter 11 under the Bankruptcy Code on
or before June 3, 2002, or as soon as reasonably
practicable thereafter. (The cases shall be jointly
administered but not otherwise substantively
consolidated.) The entities that shall simultaneously
file are as follows:
a) Metrocall, Inc.
b) Metrocall USA, Inc. (the "License Subsidiary")
c) XxXxx RCC Communications, Inc. ("XxXxx")
d) Advanced Nationwide Messaging Corp. ("ANMC")
e) MSI, Inc. ("MSI")
f) Mobilfone Service, L.P. ("Mobilfone")
(XxXxx, ANMC, MSI and Mobilefone may also collectively,
and independently, be referred to as the "Operating
Subsidiaries")
Metrocall Ventures, Inc., Metrocall's wholly-owned
investment holding subsidiary which currently has
interests in Western Paging & Voicemail, L.P., Western
Paging & Voicemail, LLC and Iris Wireless, LLC shall not
file for bankruptcy protection
VENUE: Bankruptcy Court for the District of Delaware
FIRST DAY
MOTIONS: Simultaneously with the filing of its chapter 11
petitions, Metrocall shall file with the bankruptcy
court its proposed Joint Plan of Reorganization and
Disclosure Statement, along with other necessary or
appropriate first-day papers which shall include, but
may not be limited to standard and customary motions
seeking authorization for the Debtors to (i) retain
certain professionals including Xxxxxxx Xxxx & Xxxxx
LLP, , Xxxxxxxxx, Stang, Ziehl, Young & Xxxxx, LLP,
Xxxxxx & Xxxx, LLP, Lazard Freres & Co.(2) and others,
(ii) pay prepetition wages, compensation, employee
benefits and other employee expenses, (iii) continue
workers' compensation programs and policies, (iv) pay
prepetition sales and use tax, (v) maintain existing
bank accounts, forms and cash management services, (vi)
pay certain critical trade vendors, (vii) make payments
for interim compensation and reimbursement of expenses
to certain
------------------------
(2) Lazard's retention shall be conditioned upon a written amendment to its
existing engagement agreement pursuant to which Lazard will have agreed to
accept revised compensation comprised of a success fee of $4,000,000 (net of
all monthly compensation paid prior thereto) and out of pocket expenses in
exchange for financial services to be provided through the Effective Date.
(Total fees paid to Lazard to date are $1,925,000.) Pursuant such amendment,
Lazard shall be paid $1,075,000 on account of accrued and unpaid monthly fees
prior to the Petition Date and shall receive no monthly compensation during
the Chapter 11 Cases, other than out of pocket expenses but shall be entitled
to receive the remaining $1,000,000 balance their success fee on the Effective
Date.
professionals, (viii) use cash collateral and providing
adequate protection(3), (ix) make continued use of
utility services post petition without interruption, (x)
pay certain prepetition shipping and warehouses charges
and possessory liens related thereto, (xi) continue
certain customer practices and honor certain prepetition
customer obligations, (xii) make continued payments of
premiums for various insurance policies, (xiii)
establish a bar date for filing proofs of claims, (xiv)
operate their business and confirming the automatic
stay, (xv) pay contractors in satisfaction of perfected
or potential mechanics' or materialmen's or similar
liens, (xvi) approve assumption or rejection of the
amended alliance agreements with Weblink, (xvii) approve
assumption of the service and maintenance agreement with
Glenayre, (xviii) reject certain non-residential real
property leases which may include, but will not be
limited to certain tower leases, (xix) reject certain
executory contracts and (xx) establish a Key employee
retention and severance program, (xxi) authorize and
approve assumption of the Spectrum settlement agreement,
(xxii) authorize and approve assumption of the tower
license settlement agreements with Pinnacle and American
Tower, (xxiii) authorize and approve the special
integration retention plan for certain employees and
(xxiv) authorize and approve assumption of the EPX
processing agreement. In addition the debtor
anticipates filing its schedules and statements of
financial affairs on or shortly after the petition date.
Metrocall shall, with these first day papers, file a
motion to obtain a hearing date for approval of its
Disclosure Statement within 45 days of the petition
date. Metrocall will also immediately undertake to file
and/or commence all FCC applications that will be
required as a consequence of the proposed
Reorganization. Metrocall's target date for completion
of its restructuring and emergence from bankruptcy will
be October 1, 2002. (SEE EXHIBIT "D": TIMELINE FOR
METROCALL'S REORGANIZATION )
The Plan, Disclosure Statement and all First Day
Motions and papers shall be presented to the Secured
Lenders and Noteholders for review and comments prior to
filing.
MEANS OF
IMPLEMENTATION: Metrocall will pursue a corporate restructuring
intended to consolidate operations and preserve the
maximum value of the reorganized entities. Metrocall's
restructuring shall include the implementation of
certain cost cutting measures including a reduction in
work force and elimination of certain redundancies in
operations,
-------------------
(3) Metrocall's use of cash collateral shall be subject to Metrocall providing
adequate protection which shall include monthly payments of interest on the
pre-petition loan balance of $133,000,000 at the existing non-default contract
rate of interest together with replacement liens on all existing collateral. In
addition, Metrocall's use of cash collateral shall be subject to a monthly
budget (to be developed by Metrocall and subject to approval of the Secured
Lenders) which shall limit Metrocall's use of cash collateral within certain
general operational and expense categories.
including the closing and/or consolidation of certain
office, retail and operational facilities. A summary of
the cost reductions to be implemented is reflected in
the projections attached hereto as Exhibit E. (SEE
EXHIBIT "E": PROJECTIONS FOR METROCALL'S
REORGANIZATION(4))
Metrocall does not contemplate that either a DIP
facility or Exit Financing will be required to implement
the Plan. Metrocall will, however, require use of its
existing cash management practices and cash collateral
during the pendency of the Chapter 11 Cases and will
file the appropriate first day motions seeking authority
for same and providing adequate protection. Metrocall's
use of cash collateral shall be subject to a budget (a
draft of which will be provided shortly under separate
cover) to be determined and agreed to by the Secured
Lenders and Metrocall. The budget shall provide for
certain limitations of monthly expenses within general
operational and expense categories, shall provide for a
mutually agreeable carve-out to fund expenses of
professionals retained in the Chapter 11 Cases, and
shall limit Metrocall's use of cash collateral within
certain general operational and expense categories. The
proposed adequate protection shall provide the Secured
Lenders with replacement liens on substantially all of
the post-petition assets of the Debtors (other than
avoidance actions or proceeds thereof), as well as, to
monthly cash payments equal to (i) interest at the
current non-default rate on the principal obligations
($133,000,000) outstanding under the Loan agreement and
(ii) reasonable fees and expenses of the Administrative
Agent's counsel and financial advisors, as adequate
protection for the use of cash collateral. Metrocall
anticipates that the Secured Lenders will enter into an
appropriate intercreditor agreement with Wachovia, the
bank where Metrocall currently maintains its cash
management accounts, to ensure that any risk to Wachovia
associated with its continued services can be mitigated
or eliminated. Wachovia has reviewed Metrocall's cash
management relationship in anticipation of the
bankruptcy filings and has agreed to provide continued
cash management services subject to certain
modifications and conditions.
In addition, Metrocall's Reorganization
contemplates an order by the bankruptcy court approving
Metrocall's Plan (the "Confirmation Order") that, among
other things, will provide for the modification,
assumption and/or assignment of various employment
agreements and other executory contracts.
------------------------
(4) The projections attached hereto are to be supplemented to include
Metrocall's balance sheet adjusted for recapitalization upon completion of same.
This additional component of Metrocall's projections will be provided under
separate cover.
The steps of Metrocall's corporate restructuring are as
follows:
(i) On or immediately prior to the Effective Date,
ANMC shall merge with and into XxXxx, its parent,
such that all assets of ANMC, together with all
liabilities shall be conveyed to XxXxx.
(ii) On or immediately prior to the Effective Date but
following the ANMC merger with XxXxx, MSI shall
be merged with and into XxXxx, its parent, such
that all assets of MSI, together with all
liabilities shall be conveyed to XxXxx.
(iii) Upon the merger of MSI with and into XxXxx the
partnership of Mobilfone will be effectively
dissolved and all assets of Mobilfone, together
with all liabilities will vest with XxXxx.
(iv) Immediately following the merger of the Operating
Subsidiaries into XxXxx, Metrocall, Inc. will
contribute all right, title and interest in all
of its assets to XxXxx other than (a) certain
intellectual property (see below) to be conveyed
to the License Subsidiary and (b) a sufficient
amount of cash reasonably necessary to make
distributions or establish reserves as required
by the Plan. These assets shall be contributed
subject to all existing liens in place at that
time. XxXxx will simultaneously assume all of
the underlying obligations (including cure costs,
if any) directly attributable to these assets.
(Metrocall, Inc. will not contribute its
ownership interest in Inciscent, Metrocall USA,
Inc. or Metrocall Ventures, Inc.) SEE EXHIBIT F:
METROCALL'S PRE & POST REORGANIZATION CORPORATE
DIAGRAMS ATTACHED HERETO.
(v) Concurrent with the contributions by Metrocall,
Inc. to XxXxx referenced above, Metrocall, Inc.
will contribute all of its intellectual property
(including trademarks, trade names, and
copyrights) to Metrocall USA, Inc., its
wholly-owned license subsidiary. Immediately
thereafter, Metrocall USA, Inc. will enter into a
license agreement with XxXxx for the use of the
FCC licenses and other intellectual property.
SEE INFRA., OTHER PLAN PROVISIONS - LICENSE
SUBSIDIARY AGREEMENT
(vi) Metrocall, Inc., XxXxx, and Metrocall USA, Inc.
will then each reorganize and continue in
operations. Following the aforementioned mergers
and capital contributions, XxXxx and Metrocall
USA, Inc. shall each reincorporate(5) under the
laws of the State of Delaware and cause to be
executed and filed all appropriate restated
certificates of incorporation and by-laws (the
----------------------
(5) It is contemplated that the re-incorporation of Metrocall USA, Inc. shall
be implemented via a merger of Metrocall USA, Inc. with and into a newly
formed, wholly-owned subsidiary of Metrocall, Inc.
reorganized and reincorporated entities shall
hereinafter be referred to, respectively, as
"Reorganized Metrocall, Inc." or "HoldCo.",
"Reorganized XxXxx" or "OpCo." and "Reorganized
Metrocall USA" or "License Subsidiary").
(vii) Immediately thereafter distributions (in
accordance with the terms set forth herein in the
section discussing "Plan Classifications and
Treatment") to creditors and equity interests of
the applicable Debtors will commence and will
include, among other distributions:
a. The execution by OpCo. of the new $60 million
Senior Secured Note pursuant to the terms and
conditions set forth in the Term Sheet for
the Senior Secured Note and issue same to the
Secured Lenders in accordance with
Metrocall's Plan. (SEE EXHIBIT "A": TERM
SHEET FOR NEW $60 MILLION SENIOR SECURED NOTE
ATTACHED HERETO.)
b. The Execution by HoldCo. of the $20 million
Senior Secured PIK Notes pursuant to the
terms and conditions set forth in the Term
Sheet for the Senior Secured PIK Notes and
issue same to holders of the allowed Secured
Lenders Claims in accordance with Metrocall's
Plan. SEE EXHIBIT "B": TERM SHEET FOR SENIOR
SECURED PIK NOTES.
c. OpCo., on the Effective Date, or as soon as
practicable thereafter, will pay all holders
of allowed general unsecured claims against
any of the consolidated operating
subsidiaries 100% of such allowed claims in
cash or pursuant to any other such
arrangement as may be agreed to between the
parties.
d. HoldCo., on the Effective Date, or as soon
practicable thereafter but not later than
thirty (30) days from the Effective Date,
will issue (i) Preferred Stock of HoldCo.
representing $53 million of the total $60
million liquidation preference to the allowed
claims of the Secured Lenders; (ii) Preferred
Stock representing $5 million of the $60
million liquidation preference to the holders
of allowed General Unsecured Claims against
Metrocall, Inc.; and (iii) Preferred Stock of
HoldCo. representing $2 million of the $60
million liquidation preference to Metrocall's
senior executives as set forth under section
discussing Employment Agreements and Benefit
plans set forth herein. The Preferred Stock
shall constitute 95% of the voting rights
with respect to the total outstanding capital
stock of HoldCo. (the remaining 5% of the
voting rights shall vest with the new common
stock of HoldCo. to be issued) until
such time as it shall be fully redeemed; at
which time the then outstanding Common Stock
(as defined below) shall then constitute 100%
of the voting rights with respect to the
capital stock of HoldCo. The terms of the
Preferred Stock are as set forth in Term
Sheet for Preferred Stock annexed hereto. SEE
EXHIBIT "C": TERM SHEET FOR PREFERRED STOCK.
e. HoldCo., on the Effective Date, or as soon
practicable thereafter, will issue (i) 42%
(subject to ratable dilution for the issuance
of Common Stock and options under the stock
option plan described herein to employees of
OpCo. not to exceed 7%) of the issued shares
of HoldCo. common stock (the "Common Stock")
to the Secured Lenders and (ii) 58% (subject
to ratable dilution for the issuance of
restricted stock and options under the stock
option plan described herein to employees of
OpCo. not to exceed 7%) of the issued shares
of Common Stock to the holders of allowed
General Unsecured Claims against Metrocall,
Inc. The Common Stock shall constitute 5%
of the voting rights with respect to the
total outstanding capital stock of HoldCo.
until such time that the Preferred Stock has
been fully redeemed; at which time the then
outstanding Common Stock shall then hold
constitute 100% of the voting rights with
respect to the capital stock of HoldCo. This
distribution shall be made in accordance with
the distribution provisions set forth below.
(viii) The members of senior management of Metrocall,
which includes the Chief Executive Officer and
the Chief Financial Officer, shall each execute
employment agreements with HoldCo. and OpCo. to
become operative on the Effective Date. It is
anticipated that all other employment agreements
of those parties not otherwise subject to the
planned reduction-in-force will be rejected
and/or terminated by Metrocall. It is further
anticipated that Metrocall's Key Employee and
Retention Plan will be modified prior to
Metrocall's bankruptcy filing and subsequently
assumed and assigned to OpCo. on or prior to the
Effective Date. The details of the respective
employment agreements and plans are summarized
separately herein.
(ix) The various personnel and employment related
agreements, including the 401K Plan, medical and
other benefit plans, severance programs, as
amended, shall be terminated immediately prior to
the reincorporation of HoldCo. and reinstated
through OpCo. upon the Effective Date. See the
discussion of severance, 401K and other benefit
plans herein.
(x) Upon confirmation of Metrocall's Plan, all
property and interests appurtenant thereto shall,
as of the Effective Date, revest in each of the
respective debtor entities. In addition, all
obligations and debts of the debtors shall be
discharged in exchange for the disbursements, if
any, made to the respective creditor classes
under the Plan.
(xi) Metrocall cannot presently determine if the
number of holders of allowed general unsecured
claims that will receive the new preferred stock
or common stock of HoldCo. as set forth herein,
will be sufficient to satisfy public reporting
requirements. HoldCo. will therefore, to the
extent possible, undertake to register as a
public entity and to comply with all public
reporting requirements and shall use reasonable
efforts to have the Preferred Stock and Common
Stock listed on a nationally recognized market or
exchange as soon after the Effective Date as
practicable. Secured Lenders who receive 10% or
more of the Common Stock will be granted two
demand and unlimited piggyback registration
rights.
(xii) As of the Effective Date, the Certificate of
Incorporation of HoldCo. will be amended to
provide that, during the two-year period
following the initial distributions of the
HoldCo. Preferred Stock and Common Stock, no
person shall be permitted to transfer any stock
of HoldCo. without the prior written consent of
the Chief Financial Officer of HoldCo. (and any
such purported transfer will be void ab initio)
if (x) after such purported transfer, the
purported transferee would own 5 percent or more
of any class of stock of HoldCo. or (y) prior to
giving effect to such purported transfer, the
purported transferor owns 5 percent or more of
any class of stock of HoldCo. For purposes of
the foregoing, (I) "transfer" means any sale,
transfer, gift or assignment of any HoldCo.
stock, or the granting or issuance of an option
or other right to acquire any HoldCo. stock, or
any other action that would cause any person to
be treated as the owner of any share of stock as
to which such person was not previously treated
as the owner, and (II) a person shall be treated
as the owner of any share of stock of HoldCo. if
such person directly or indirectly owns such
share or is otherwise treated as the owner of
such share under Section 382 of the Internal
Revenue Code and the Treasury Regulations
thereunder, including Section 382(l)(3) of the
Internal Revenue Code and Section 1.382-2T(h) of
the Treasury Regulations thereunder. During the
two-year period following the initial
distribution of the HoldCo. Preferred Stock and
Common Stock, HoldCo. and its transfer agent will
not record any transfer of any share of HoldCo.
stock unless it or its transfer agent has
received either (A) a certificate from the
purported transferee to the effect that such
transferee would not
own 5 percent or more of any class of HoldCo.
stock after giving effect to the purported
transfer and a certificate from the purported
transferor to the effect that it does not own 5
percent or more of any class of HoldCo. stock
prior to giving effect to such purported transfer
or (B) a certificate of HoldCo.'s Chief Financial
Officer consenting to such a transfer. The Chief
Financial Officer of HoldCo. shall be required to
provide such written consent and certificate,
upon ten days prior written notice, if he
determines that the purported transfer, alone or
together with all other pending purported
transfers of shares, could not reasonably be
determined to result in an "ownership change"
with respect to HoldCo. under Section 382 of the
Internal Revenue Code (based on a 45 percent
threshold rather than the fifty percent threshold
set forth in Section 382). The purported
transferor and transferee shall deliver to
HoldCo. such certificates as the Chief Financial
Officer of HoldCo. may reasonably require as a
condition to the issuance of a consent
certificate. If the Chief Financial Officer
shall fail to provide such written consent and
certificate with respect to any proposed
transfer, such officer shall provide, within five
business days after receipt of a request therefor
from the person seeking such consent and
certificate, the information upon which such
officer concluded that such proposed transfer
could reasonably be determined to result in an
ownership change.
PLAN CLASSIFICATIONS
AND TREATMENTS:(6)
Unless otherwise stated below, the following Plan
classifications and class treatments shall be the same
for each of the Debtor entities. As the Debtors' cases
will not be substantively consolidated, each of the
Debtors' respective Plans will need to be independently
confirmed but no Effective Date of any plan shall occur
unless and until each plan of reorganization has been
confirmed for the respective Metrocall entities.
A. UNCLASSIFIED CLAIMS (Not be entitled to vote)
Administrative
Claims: Each holder of an allowed administrative claim will
receive payment in full (in cash) or such other
treatment as agreed to between Metrocall and the
respective claim holder, of the unpaid portion of an
allowed administrative claim on the Plan effective date
or as soon thereafter as practicable.
---------------------
(6) Metrocall is currently working on determining the total amount of claims
and or expenses to be paid under each of the relative categories or
classifications set forth herein and anticipates providing estimates for each
of these categories and/or classifications within one week following execution
of the Lock-Up Agreements.
Administrative claims may include claims for
certain employee claims for wages, severance, or other
benefits and compensation that will be paid by Metrocall
pursuant to Court order, as well as, cure amounts
relative to executory contracts or unexpired leases to
be assumed by the Debtors. In addition, administrative
claims shall include all approved applications filed by
Metrocall's professionals seeking reimbursement of
unpaid fees and expenses in connection with the
Metrocall's bankruptcy cases.
Priority Tax
Claims: At the option of Metrocall, each holder of an allowed
priority tax claim will receive either (i) payment in
full (in cash) on the Effective Date or as soon
thereafter as practicable or (ii) payment over a six
year period from the date of assessment as provided in
section 1129(a)(9)(C).
B. UNIMPAIRED CLAIMS (Not entitled to vote - deemed to have accepted
the Plan)
Other Priority
Claims: Each holder of allowed other priority claims
shall receive payment in full (in cash) on the Effective
Date or as soon thereafter as practicable.
C. IMPAIRED CLAIMS (Other than as designated, entitled to vote)
Critical Vendors:
(Non-voting) Metrocall will file, with its first day papers, a
motion seeking authority to pay pre-petition claims of
certain critical vendors. It is contemplated that there
will be claim holders of Metrocall, Inc., as well as,
with the Operating Subsidiaries treated as "critical
vendors". In order to qualify as a "Critical Trade
Vendor", such parties shall be required to commit to
continue to extend trade credit to Metrocall during the
pendency of the Chapter 11 Cases and for up to one year
following the Effective Date on terms that are at least
as favorable to the terms that had been provided to
Metrocall, in the ordinary course, prior to the Petition
Date; with the Bankruptcy Court to retain jurisdiction
over any disputes arising out of, relating to or in
connection with such trade credit and that to the extent
of any breach thereof by a Critical Trade Vendor,
payments made to such Critical Trade Vendor on account
of its pre-petition claim may, if such breach is
determined, be subject to recovery pursuant to Section
549 of the Bankruptcy Code and/or applicable state law.
Each holder of an allowed "Critical Trade Vendor" claim
shall be paid in full in cash during the Chapter 11
Cases pursuant to the Critical Trade Vendor Order to be
entered by the bankruptcy court.
Secured Claims:
Other Than Senior
Secured Credit
Facility Claims: At the option of Metrocall, Metrocall will (i)
reinstate such allowed secured claims by curing all
outstanding defaults with all legal, equitable and
contractual rights remaining unaltered, (ii) pay in full
(in cash) such allowed secured claims on the Effective
Date or as soon as practicable thereafter or (iii)
satisfy such secured claim by delivering the collateral
securing such claim and paying any such interest
required to be paid under Section 506(b) of the
Bankruptcy Code.
Operating & License
Subsidiary General
Unsecured Claims:(7) Holders of allowed general unsecured claims
(other than any deficiency claims of the Secured Lenders
that may exist) against each of the respective Operating
Subsidiaries and the License Subsidiary shall receive
cash in an amount equal to 100% of its allowed claim or
such other treatment as agreed to between Metrocall and
the respective claim holder on the Plan effective date
or when due, whichever is later.
Senior Secured
Lender Claims(8): The Secured Lenders, consistent with and subject
to the terms and conditions of the Lock-Up Agreement,
will share in a pro rata distribution of (i) the $60
million Senior Secured Note from OpCo., the terms of
which are described in Exhibit "A" hereto, (ii) the $20
million Senior Secured PIK Notes from HoldCo., the terms
of which are described in Exhibit "B" hereto, (iii)
HoldCo. Preferred Stock representing a total initial
liquidation preference of $53 million, the terms of
which are described in Exhibit "C" hereto, and (iv) 42%
of the new Common Stock to be issued of HoldCo. (subject
to ratable dilution up to 7% for stock options issued to
OpCo. employees under the OpCo. stock option plan).
The Secured Lenders will hold an impaired claim
as against each of the Debtor entities filing chapter
11. The Secured Lenders shall have a claim against
Metrocall, Inc. as the direct obligor and each of the
Operating Subsidiaries and the License Subsidiary as
unconditional guarantors. In exchange for the treatment
of each Secured Lenders claim as set forth above and
herein, each of the Secured Lenders shall waive its
----------------------
(7) Acceptance of the class is essential to preservation of the equity
interests of Metrocall, Inc. in both Metrocall USA, Inc. and XxXxx RCC
Communications, Inc, and similarly to maintain XxXxx'x equity interests in
Advanced Nationwide Messaging Corp. and MSI, Inc.
(8) The subordination rights of the Secured Lenders with respect to the Senior
Subordinated Noteholders shall terminate upon receipt of the distributions set
forth herein and to be provided on account of the allowed Secured Lender
claims. All rights between the respective parties shall thereafter be as set
forth herein and in the Plan.
rights, if any, to receive any distribution as an
unsecured claim holder as against any of the Operating
Subsidiaries and the License Subsidiary.
Although the claims of the Secured Lenders as
against the License Subsidiary may in part be unsecured,
the guaranty claim will be classified separately from
other general unsecured claims of the License Subsidiary
for a number of business purposes including, but not
limited to, the contractual subordination of the
Noteholder claims, the blanket lien on any operating
assets held by the Secured Lenders as against the
License Subsidiary, and the absence of unsecured trade
debt claims as against the License Subsidiary.
Metrocall, Inc.
General
Unsecured Claims: Holders of allowed general unsecured claims,
which shall include, but not be limited to claims of the
Senior Subordinated Noteholders, as well as rejection
and trade claims will share in a pro rata distribution
of (i) HoldCo. Preferred Stock, representing a $5
million initial liquidation preference, the terms of
which are more fully described in Exhibit "C" hereto,
and (ii) 58% of the new common stock to be issued of
HoldCo. (subject to a ratable dilution of up to 7% for
stock options to be issued to employees under the OpCo.
stock option plan). All holders of general unsecured
claims will be entitled to allocate such distributions
against principal or accrued interest in their
respective sole discretion.
Metrocall, Inc.
Convenience
Class: Metrocall will establish a convenience class for
all allowed general unsecured claims of (a) $1,000 or
less (excluding any claims arising out of partial
assignment of a claim) or (b) holders of general
unsecured claims in excess of $1,000 which irrevocably
elect on a ballot soliciting votes to accept a Plan to
reduce their respective unsecured claim to the amount of
$1,000 or less or (c) any disputed unsecured claim that
becomes an allowed general unsecured claim of $1,000 or
less with the consent of and in an amount agreed to by
the Debtor. Holders of allowed "convenience class"
claims shall receive a distribution equal to 40% of
their allowed convenience claim in cash on the Effective
Date in lieu of any other distribution to be made
pursuant to the Plan. Holders of such convenience class
claims shall, for voting purposes within their class, be
deemed to hold a claim of $1,000 or less, as the case
may be, regardless of whether such holders claim would
otherwise had been in excess of such amount had the
holder not elected to otherwise irrevocably reduce its
claim.
Intercompany
Claims: All Intercompany claims, held against any of the
respective Debtor entities, whether held between the
Debtors or affiliates of Metrocall that have not filed
chapter 11 shall not receive any distribution on account
of intercompany claims. All such claims shall either be
waived or contributed as capital to the applicable
Debtor and discharged. All such claims shall be treated
as impaired and shall be voted to accept the respective
Plans.
D. INTERESTS (Not entitled to vote)
Metrocall, Inc.
Preferred Stock
Interests: Interests in preferred stock and any holder of
any interest in warrants, options or rights in or to
such preferred stock shall receive no distribution. All
interests in preferred stock shall be terminated and
cancelled upon the Effective Date.
Metrocall, Inc.
Common Stock
Interests: Interests in common stock and any holder of any
interest in warrants, options or rights in or to such
common stock shall receive no distribution. All
interests in common stock shall be terminated and
cancelled upon the Effective Date.
Operating & License
Subsidiary Common
Stock Interests: Interests in the equity of any of the
Operating or License Subsidiaries shall not be impaired.
Equity interests shall retain 100% of their vested
interests in, and rights appurtenant thereto, the
respective reorganized Operating and License
Subsidiaries.
GOVERNANCE & MANAGEMENT OF
REORGANIZED METROCALL:
A. BOARD OF DIRECTORS
OF HOLDCO.
As of the Effective Date (and continuing
thereafter in accordance with the Charter) the board of
directors of HoldCo. shall consist of seven members
appointed as follows: (i) the Secured Lenders shall
appoint four members, (ii) the Committee shall appoint
one member, (iii) the Secured Lenders and the Committee,
on or prior to the Confirmation Date, shall
collectively, by mutual consent, appoint one member (the
"Independent
Director") and (iv) one member shall be Metrocall's
presiding Chief Executive Officer who shall serve as
Chairman of the Board.
Until the redemption of the Preferred Stock in
its entirety, approval by the board of directors of
HoldCo. for Special Transactions (as defined below)
shall require at least five of the seven members of the
board then voting in favor of any such Special
Transactions.
A vote of five of the seven members of the board
of HoldCo. shall be required to amend the corporate
charter of HoldCo. to give effect to (i) any change to
the size or composition of the board; (ii) any change to
the provisions requiring five of the seven members to
vote to give effect a Special Transaction; (iii) to the
amendment provisions contained herein; and (iv) any
amendment or change to the stock transfer restrictions
with respect to the Preferred Stock and Common Stock
effective during the two-year period following their
initial distribution.
"Special Transactions" shall include (i) any
business combination as defined under Delaware corporate
law with respect to all or substantially all of the
assets of HoldCo. and (ii) any transaction or action
whereby HoldCo. or any of its wholly owned subsidiaries
incur or issue any indebtedness or securities or
guaranty any indebtedness or securities in excess of $20
million. In connection with its consideration of any
Special Transaction and prior to any vote by directors
thereon, HoldCo. shall first establish a special
committee (the "Special Committee") of the board to
consider such Special Transaction. The Special Committee
shall consist of three members, including one of the
directors selected by the Secured Lenders, one director
selected by the Committee and the Independent Director.
A Special Transaction shall only be voted on by the
directors of HoldCo. if and when a majority of the
Special Committee members has recommended for approval
such Special Transaction.
B. BOARD OF DIRECTORS
OF OPCO. & THE
LICENSE SUBSIDIARY
Each wholly-owned subsidiary of HoldCo. shall
have a board of directors with the size and composition
mutually satisfactory to Metrocall and the Secured
Lenders.
B. CHARTER/BY-LAWS OF
HOLDCO. & SUBSIDIARIES
To be determined on a basis mutually acceptable
to Metrocall and the Secured Lenders except that the
charter and by-laws for HoldCo. shall provide that
HoldCo., so long as any of its Preferred Stock is
outstanding, (a) may not redeem or otherwise buy back
any Preferred Stock on any basis other than as set forth
in the terms for redemption in the Term Sheet for the
Preferred Stock annexed hereto as Exhibit "C", and (b)
may only approve Special Transactions by a vote of five
of the seven members of the board of directors.
The corporate charter and by-laws of both OpCo.
and the License Subsidiary shall provide that
shareholder approval shall be required to implement any
Special Transaction with or involving any such
subsidiary.
In addition, the corporate charter and by-laws
for HoldCo. shall provide for certain restrictions on
the transfer of Preferred Stock and Common Stock as set
forth under item (xii) of the section entitled "Means of
Implementation" set forth above.
EMPLOYMENT AGREEMENTS
AND BENEFIT PROGRAMS
A. EMPLOYMENT AGREEMENTS
The employment agreements with the senior
management team, which shall include the Chief Executive
Officer (the "CEO") and the Executive Vice President,
Chief Financial Officer and Treasurer (the "CFO") shall
remain in full force and effect during the chapter 11
cases. Upon the effective date of the Plan of
Reorganization (the "Effective Date"), the CEO and the
CFO will enter into new employment agreements with
HoldCo. and OpCo. at which time their existing
employment agreements shall automatically be terminated,
without cost, and be of no further force and effect. The
new employment agreements with HoldCo. and OpCo. will
provide for, among other things, for each of the CEO and
CFO (i) a base salary of $530,000 for the CEO and
$400,000 for the CFO, (ii) a annual cash performance
bonus as follows:
% OF TARGET
PAYDOWNS
(SENIOR SECURED NOTE AND
SENIOR SECURED PIK NOTES) % OF BASE SALARY
80% 80%
90% 90%
100% 100%
115% 115%
120% 120%
125% 125%
130% 150% (Subject to a
max. of 200% on
approval of the
Board)
TARGET PAYDOWNS
(MANDATORY PREPAYMENTS ON SENIOR SECURED NOTES
AND SENIOR SECURED PIK NOTES)
FYE - 12/31/02 $ 26,500,000
FYE - 12/31/03 24,300,000
FYE - 12/31/04 $ 10,000,000
(iii) shares of Preferred Stock, representing $1 million
of the initial liquidation preference, for each of the
CEO and CFO with one-third of the restrictions lapsing
on each of the first 3 anniversaries of the Effective
Date and (iv) a cash payment equal to .20% of any "New
Capital Infusion" (as defined in the relative employment
agreement). The term of the employment agreements will
be for 3 years from and after the Effective Date,
renewable for 1 year on each anniversary of the
Effective Date. Upon (i) a termination by the Company
without Cause or (ii) a voluntary termination by the CEO
or the CFO with Good Reason, the CEO or the CFO shall
receive (X) two years Base Salary, (Y) an amount equal
to the Performance Bonus paid in the prior year and (Z)
lapse of all restrictions applicable to the New
Preferred Shares. Upon (i) a termination by the Company
with Cause or (ii) a voluntary termination by the CEO or
the CFO other than with Good Reason, the CEO or the CFO
shall receive (X) base salary through the date of
termination and (Y) New Preferred Shares that remain
restricted on the date of termination shall be
forfeited.
Employment agreements with the Tier II members of
the senior management team shall remain in full force
and effect during the Chapter 11 proceedings. Upon the
Effective Date, the Tier II member of the senior
management team shall continue to be employed by the
Company at compensation levels consistent with those
provided under their prior employment agreements.
B. 2001 BONUSES FOR THE CEO AND CFO
With respect to bonuses for 2001, Metrocall shall
have paid, prior to commencement of its Chapter 11
Cases, an amount equal to $530,000 to the CEO and an
amount equal to $400,000 to the CFO, reflecting a
decision by the Board of Directors of Metrocall to be
ratified at the May 1, 2002 meeting of the Board of
Directors. All such amounts were previously earned but
not paid under Metrocall's 2001 performance and bonus
program.
C. KEY EMPLOYEE RETENTION & SEVERANCE
KERP
The Key Employee Retention Plan (the "Amended and
Restated KERP") shall be modified, amended and restated,
subject to the approval of the bankruptcy court, to
provide for the following timing of payment of Retention
Bonuses: 25% on the Effective Date, and 25% as of the
last day of each successive three month thereafter;
provided that the employee shall not receive the
applicable 25% portion of the Retention Bonus unless he
or she is employed on the last day of each
aforementioned three month period with respect to such
25% portion. The estimated aggregate amount to be paid
under the KERP is $3.6 million that shall include
payments to approximately 48 participating employees.
Special Billing Integration Retention Plan
In addition to the Amended and Restated KERP,
Metrocall will adopt and seek approval from the
bankruptcy court of the Special Billing Integration
Retention Plan, covering those employees employed to
support the legacy billing systems of Metrocall and who
are performing integral functions that must be completed
during the bankruptcy confirmation process. Metrocall
desires to incentivize these employees to complete their
assigned tasks prior to their termination of employment.
The Special Retention Plan provides payments to
employees equal to a percentage of their base
compensation if they remain with Metrocall through the
date that their tasks are completed (the "Task
Completion Date") based on his or her position as
follows: Directors and Key Managers (15%), Technical
Managers and Employees (10%) and Support Staff (5%). The
payments are to be made no later than 10 business days
after the Task Completion Date. The estimated aggregate
amounts with respect to these approximately 34 employees
is $163,000.(9)
D. SEPARATION AND RELEASE AGREEMENTS
Metrocall has entered into Separation and Release
Agreements with 2 senior management employees with
respect to their termination of employment prior to the
petition date (copies of which have been provided under
separate cover). In each case, Metrocall has agreed to
pay a lump sum payment and has entered into a consulting
arrangement for the former employee to provide services
for a monthly fee, after the petition date.
-------------------------
(9) Pursuant to Metrocall's existing regular severance plan and vacation pay
policy these employees, in the aggregate, will be entitled to receive $451,000
of severance payments and $127,000 of vacation payments upon termination.
The aggregate payments to be provided under the
Separation and Release Agreements is approximately
$280,000.(10)
In exchange for the payments and other
consideration provided by Metrocall, the employee has
entered into a general release with respect to all
employment related claims that the employee may bring
against Metrocall and has agreed to non-compete
restrictions. To the extent that the Debtors and their
counsel determine that these contracts are executory,
the Debtors will file appropriate motions during the
Chapter 11 Cases to seek court approval to assume same.
X. XXXXXXXXX PLAN AND 401(k) PLAN AMENDMENTS
Severance Plan
The Regular Employee Severance Plan shall be
amended prior to the Petition Date to clarify that the
non-competition period shall apply for a period equal to
the number of weeks that severance payments are made.
This amendment supports the past and present practice of
Metrocall relating to the non-competition clause.
401(k)
The matching contribution under the 401(k) plan
shall be amended prior to the Petition Date to provide
that employer shall increase the match from a maximum of
4% to 6% of an employee's compensation, provided that
the portion between 4% and 6% shall be conditioned on
HoldCo. achieving certain performance objectives.
Metrocall shall file motions together with their "First
Day Papers" seeking court approval to continue such
benefits and plans.
F. OTHER SEVERANCE, 401K, INSURANCE & EMPLOYEE BENEFIT PROGRAMS
Except as noted above, the employee benefit plans
and programs, including 401(k), health and welfare,
severance and long term disability with respect to all
continuing employees shall be assumed by HoldCo. and
then assigned to OpCo.
G. STOCK PURCHASE PLANS
All rights under existing stock purchase plans
have been cancelled. All rights shall in the stock
purchase program have been extinguished.
--------------------------
(10) Metrocall reserves the right to enter into separation and release
agreements with up to two additional members of senior management providing
for similar treatment. Metrocall's estimated aggregate costs associated with
these potential additional separation and release agreements is $340,000.
H. STOCK OPTION PLANS
As of April 9, 2002, each of the Stock Option
Plans were terminated.
On the Effective Date, HoldCo. and OpCo. shall
implement an employee stock option plan for OpCo.
employees. HoldCo. shall set aside and reserve up to 7%
of the shares of HoldCo. Common Stock to be issued after
the exercise of options under this stock option plan.
The Board of Directors of HoldCo. (or a committee
thereof) shall have the discretion to select the
employees to be granted options, such stock options
shall be granted with an exercise price equal to the
fair market value of a share of HoldCo Common Stock on
the grant date.
OTHER PLAN
PROVISIONS:
License Subsidiary
Agreement:
On or about the Effective Date, OpCo. shall enter
into a license and use agreement with the License
Subsidiary to provide for payment of the allocable share
of usage of the FCC Licenses. The terms and conditions
shall be in form and substance satisfactory to the
administrative agent for the Secured Lenders and shall
provide, among things, for quarterly usage fee (payable
no later than two business days prior to the close of
each fiscal quarter) to the License Subsidiary in an
amount which is at least equal to the quarterly accrued
interest on the Senior Secured Note. The proceeds of
this license and usage agreement shall be subject to the
liens to be provided to the Secured Lenders as
collateral for the License Subsidiary's guaranty of the
Senior Secured Note.
It is contemplated that for at least as long as
the Senior Secured Note or the Senior Secured PIK Notes
are outstanding, substantially all of the revenue
generated by the License Subsidiary with respect to the
License Agreement shall be transferred by the License
Subsidiary to HoldCo. as a dividend and that HoldCo.,
immediately thereafter, shall contribute all such
dividends received to OpCo.
General Plan
Provisions: In addition to the foregoing provisions and
proposed treatments of claims and interests, the Plan
shall contain provisions reasonably satisfactory to the
administrative agent for the Secured Lenders and
appropriate under circumstances concerning among other
things, the following (i) disputed claims and reserves
therefore; (ii) the assumption or rejection, as the case
may be, of executory contracts and unexpired leases;
(iii) retention of jurisdiction by the Bankruptcy Court
for certain purposes;
(iv) inability to materially amend or modify the Plan's
provisions without the consent of any official
creditors' committee appointed in Metrocall's chapter 11
cases; ; (v) Metrocall's release, as of the Effective
Date, of all current officers and directors of Metrocall
from any and all claims, obligations, rights, damages,
causes of action, remedies and liabilities whatsoever,
whether known or unknown, foreseen or unforeseen,
existing or thereafter arising, in law, equity, or
otherwise that Metrocall would have been legally
entitled to assert based in whole or in part upon any
action, conduct, or omission prior to the Effective Date
and/or in connection with the Chapter 11 Cases; (vi)
exculpation by Metrocall, as of the Effective Date, of
all attorneys, financial advisors, accountants,
investment bankers, agents and representatives of
Metrocall, the Senior Secured Lenders and Committee, and
their respective subsidiaries, who served in such
capacity on or after the Petition Date; provided,
however, that they will remain liable for willful
misconduct and gross negligence; and (vii) creditors and
equity security holders' release, as of the Effective
Date, to the fullest extent allowed under applicable
law, of all current officers and directors of Metrocall,
the Senior Secured Lenders, and their respective
subsidiaries, and their attorneys, financial advisors,
accountants, investment bankers and agents, from any and
all claims, obligations, rights, damages, causes of
action, remedies and liabilities whatsoever, whether
known or unknown, foreseen or unforeseen, existing or
thereafter arising, in law, equity, or otherwise that
they would have been legally entitled to assert based in
whole or in part upon any action, conduct, or omission
prior to the Effective Date and/or in connection with
the Chapter 11 Cases.
-END OF DOCUMENT-
LIST OF EXHIBITS
Exhibit A - Senior Secured Note
Exhibit B - Senior Secured PIK Note
Exhibit C - Preferred Stock
Exhibit D - Metrocall Reorganization Timeline
Exhibit E - Projections for Metrocall's Reorganization
Exhibit F - Metrocall's Corporate Structure and Summary Description of Ivestments
05/21/02
EXHIBIT A
SUMMARY OF TERMS AND CONDITIONS
METROCALL, INC.
$60,000,000 SENIOR SECURED NOTE
The proposed terms and conditions summarized herein are provided for
discussion purposes only and do not constitute an offer, agreement, or
commitment to lend. The actual terms of any offer, agreement, or
commitment to lend will be subject to, among other conditions, receipt
of requisite approvals and satisfactory review and completion of
documentation.
BORROWER: Reorganized and Consolidated XxXxx (the "OpCo.")
FACILITY: $60,000,000 Senior Secured Note
ADMINISTRATIVE AGENT: Toronto Dominion (Texas), Inc.
LENDERS: Existing Lenders to the $133,000,000 Senior Secured
Credit Facilities
EFFECTIVE DATE: Upon the order approving confirmation of Plan of
Reorganization becoming final (approximately
10/1/02) and satisfaction of waiver of all
conditions precedent with respect thereto.
MATURITY DATE: 3/31/04
INTEREST RATE: Base Rate plus 2.875%.
Base Rate is defined as the higher of (i) TD's
Prime Rate or (ii) the Federal Funds rate plus .50%
per annum.
INTEREST PAYMENTS: Interest shall be payable monthly in arrears and
shall be calculated on the basis of a 365/366 day
year for the actual number of days elapsed.
GUARANTEES: Guarantees of HoldCo. and all direct existing and
future subsidiaries of HoldCo. (excluding OpCo. and
Inciscent, Inc.).
COLLATERAL: First perfected lien on 100% of the ownership
interests and all existing and future assets of
HoldCo., OpCo. and all of their direct existing and
future subsidiaries, including all FCC licenses of
the License Subsidiary, and the proceeds thereof,
to the extent permitted under applicable law;
subject to senior liens with respect to (i)
existing and/or future equipment financing, if
required, (ii) the $2,000,000 cash reserve account
securing obligations under the merchant processing
agreement with EPX, (iii) outstanding reserves held
by Huntington, (iv) other permitted
secured financings that presently exist and which
shall be reinstated upon confirmation of
Metrocall's Plan and (v) all allowed existing
secured debt assumed under the Plan (collectively,
the "Permitted Liens").
SCHEDULED AMORTIZATION: The Facility will amortize on a quarterly basis
according to the following schedule:
Quarterly Quarterly
Dates Amount Percent
----- --------- ---------
12/31/02 $ 0 0%
3/31/03 10,000,000 16.67%
6/30/03 7,000,000 11.67%
9/30/03 4,000,000 6.67%
12/31/03 2,000,000 3.33%
3/31/04 37,000,000 61.67%
----------- ------
Total $60,000,000 100%
MANDATORY PREPAYMENTS: On December 31, 2002 and thereafter at the end of
each quarter, the Senior Secured Note shall be
immediately and permanently reduced by an amount
equal to 100% of Unrestricted Cash in excess of
$10,000,000. Such mandatory prepayments shall be
(i) payable within five business days of the
Effective Date and the end of each quarter
thereafter (ii) accompanied by a certificate of the
CFO of the company, in form satisfactory to the
Administrative Agent and (iii) applied to scheduled
amortization payments in inverse order of maturity.
Unrestricted Cash shall mean cash on hand with
OpCo., HoldCo. and License Subsidiary excluding (i)
cash necessary to make distributions (other than to
the Secured Lenders or for dividends) pursuant to
the Plan or to establish reserves as may be
required under the Plan or (ii) assets to the
extent encumbered by Permitted Liens.
FINANCIAL COVENANTS: Usual and customary for facilities of this size,
type and purpose including but not limited to the
following financial ratios that shall be set on the
Effective Date and at the end of each calendar
quarter:
(a) The Ratio of Total Net Debt to Annualized
Operating Cash Flow ("Leverage Ratio") may not at
any time exceed the ratio 1.0:1.0.
Total Net Debt is defined as the aggregate amount
of total indebtedness of HoldCo. and all direct
subsidiaries (excluding Ventures and Inciscent) for
borrowed money, plus guarantees and capitalized
leases, less Unrestricted Cash as of the
calculation date.
A2
Operating Cash Flow is defined as net income plus
taxes, depreciation, amortization and interest,
adjusted for extraordinary items, for the most
recently completed quarter.
Annualized Operating Cash Flow is defined as
Operating Cash Flow times four.
(b) The Ratio of Operating Cash Flow to Cash
Interest Expense ("Interest Coverage Ratio") must
at all times exceed the ratio 2.0:1.0.
Cash Interest Expense is defined as cash interest
expense incurred during the most recently completed
quarter.
(c) Limitation on System Capital Expenditures:
Capital expenditures by OpCo., other than capital
expenditures for one-way and two-way paging
devices, as of the last day of each quarter shall
not exceed the amounts set forth below for the
periods set forth below:
Fiscal Quarter Period Amount
-------------- ------ ------
FQ4 - 2002 10/1/02 - 12/31/02 $ 3,600,000
FQ1 - 2003 10/1/02 - 3/31/03 6,600,000
FQ2 - 2003 10/1/02 - 6/30/03 9,600,000
FQ3 - 2003 10/1/02 - 9/30/03 12,600,000
FQ4 - 2003 1/1/03 - 12/31/03 12,000,000
FQ1 - 2004 4/1/03 - 3/31/04 $12,000,000
(d) Limitation on Device Capital Expenditures:
Capital expenditures by OpCo. for one-way and
two-way paging devices as of the last day of each
quarter shall not exceed the amounts set forth
below for the periods set forth below:
Fiscal Quarter Period Amount
-------------- ------ ------
FQ4 - 2002 10/1/02 - 12/31/02 $ 4,500,000
FQ1 - 2003 10/1/02 - 3/31/03 9,700,000
FQ2 - 2003 10/1/02 - 6/30/03 14,700,000
FQ3 - 2003 10/1/02 - 9/30/03 19,600,000
FQ4 - 2003 1/1/03 - 12/31/03 19,800,000
FQ1 - 2004 4/1/03 - 3/31/04 $17,700,000
CONDITIONS PRECEDENT: Usual and customary for facilities of this size,
type and purpose and consistent with the provisions
in the Plan and the Fifth Amended and Restated Loan
Agreement, dated March 17, 2000, as amended.
AFFIRMATIVE COVENANTS: Usual and customary for facilities of this size,
type and purpose and consistent with the provisions
in the Plan and the Fifth Amended and Restated Loan
Agreement, dated March 17, 2000, as amended.
A3
Special covenant to reflect obligation of OpCo.
prior to close of each fiscal quarter to pay fees
due, within two business days of the close of such
quarter, under the License Agreement with License
Subsidiary (it is contemplated that the License
Subsidiary will immediately dividend substantially
all such revenues to HoldCo. and that HoldCo. upon
its receipt of any such revenues shall make an
immediate capital contribution equal to such amount
to OpCo.).
NEGATIVE COVENANTS: Usual and customary for facilities of this size,
type and purpose and consistent with the provisions
in the Plan and the Fifth Amended and Restated Loan
Agreement, dated March 17, 2000, as amended.
REPRESENTATIONS
& WARRANTIES: Usual and customary for facilities of this size,
type and purpose and consistent with the provisions
in the Plan and the Fifth Amended and Restated Loan
Agreement, dated March 17, 2000, as amended.
EVENTS OF DEFAULT: Usual and customary for facilities of this size,
type and purpose and consistent with the provisions
in the Plan and the Fifth Amended and Restated Loan
Agreement, dated March 17, 2000, as amended.
ASSIGNMENTS
& PARTICIPATIONS: Each Lender will have the right, with the consent
of the Administrative Agent, not to be unreasonably
withheld, to assign or participate all or a portion
of its rights and obligations under the Senior
Secured Note provided that, concurrently with any
such assignment, such Lender shall also transfer to
the applicable assignee a pro rata share of its
commitment to the Senior Secured PIK Note.
MAJORITY LENDERS: 51% with respect to non-payment defaults and 75%
with respect to (i) payment defaults with respect
to principal and (ii) extensions of scheduled
amortization payments (excluding final maturity).
GOVERNING LAW: New York
A4
05/21/02
EXHIBIT B
SUMMARY OF TERMS AND CONDITIONS
METROCALL, INC.
$20,000,000 SENIOR SECURED PIK NOTES
The proposed terms and conditions summarized herein are provided for
discussion purposes only and do not constitute an offer, agreement, or
commitment to lend. The actual terms of any offer, agreement, or
commitment to lend will be subject to, among other conditions, receipt
of requisite approvals and satisfactory review and completion of
documentation.
BORROWER: Reorganized Metrocall, Inc. (the "HoldCo.")
FACILITY: $20,000,000 Senior Secured PIK Notes
ADMINISTRATIVE AGENT: Toronto Dominion (Texas), Inc.
LENDERS: Existing Lenders to the $133,000,000 Senior Secured
Credit Facilities
EFFECTIVE DATE: Upon the order approving confirmation of Plan of
Reorganization becoming final (approximately
10/1/02) and satisfaction of waiver of all
conditions precedent with respect thereto.
MATURITY DATE: 12/31/04
INTEREST RATE & PAYMENTS: Interest shall accrue at a rate of 12% per annum
accruing and due quarterly in arrears by issuance
of additional Senior Secured PIK Notes until the
Senior Secured Note is fully repaid. Thereafter,
interest shall be due and payable monthly in
arrears in cash.
GUARANTEES: Subordinated guarantees of all direct existing and
future subsidiaries of HoldCo. (excluding OpCo.).
COLLATERAL: Second perfected lien (which shall become a first
perfected lien upon payment in full of the Senior
Secured Note) on 100% of the ownership interests
and all existing and future assets of HoldCo. and
each of its direct existing and future subsidiaries
(excluding OpCo.), including all FCC licenses of
the License Subsidiary, and the proceeds thereof,
to the extent permitted under applicable law;
subject to senior liens with respect to the
Permitted Liens (as defined with respect to the
Senior Secured Note).
SCHEDULED AMORTIZATION: The Facility will amortize on a quarterly basis
according to the following schedule:
Quarterly Amortization
Date Amount (% Original Principal)
---- ----------- ----------------------
6/30/04 $ 3,000,000 15.0%
9/30/04 2,000,000 10.0%
12/31/04 15,000,000 75.0%
----------- ------
TOTAL $20,000,000 100.0%
MANDATORY PREPAYMENTS: Upon payment in full of the Senior Secured Note and
the end or each quarter thereafter, the Senior
Secured PIK Notes shall be immediately and
permanently reduced by an amount equal to 100% of
Unrestricted Cash (as defined with respect to the
Senior Secured Note) in excess of $10,000,000. Such
mandatory prepayments shall be (i) payable within
five business days of the end of each such quarter,
(ii) accompanied by a certificate of the CFO of the
company, in form satisfactory to the Administrative
Agent, and (iii) shall be applied to scheduled
amortization payments in inverse order of maturity.
FINANCIAL COVENANTS: Usual and customary for facilities of this size,
type and purpose including but not limited to the
following financial ratios that shall be set on the
Effective Date and at the end of each calendar
quarter (measured on the consolidated Metrocall):
(a) The Ratio of Total Net Debt to Annualized
Operating Cash Flow ("Leverage Ratio") may not at
any time exceed the ratio 1.0:1.0.
Total Net Debt is defined as the aggregate amount
of total indebtedness of HoldCo. and all direct
subsidiaries (excluding Ventures and Incesent) for
borrowed money, plus guarantees and capitalized
leases, less Unrestricted Cash as of the
calculation date.
Operating Cash Flow is defined as net income plus
taxes, depreciation, amortization and interest,
adjusted for extraordinary items, for the most
recently completed quarter.
Annualized Operating Cash Flow is defined as
Operating Cash Flow times four.
(b) The Ratio of Operating Cash Flow to Cash
Interest Expense ("Interest Coverage Ratio") must
at all times exceed the ratio 2.0:1.0.
Cash Interest Expense is defined as cash interest
expense incurred during the most recently completed
quarter.
(c) Limitation on System Capital Expenditures:
Capital expenditures by OpCo., other than capital
expenditures by OpCo. for one-way and two-way
paging devices, as of the last day of
B2
each quarter shall not exceed the amounts set
forth below for the periods set forth below:
Fiscal Quarter Period Amount
-------------- ------ ------
FQ4 - 2002 10/1/02 - 12/31/02 $ 3,600,000
FQ1 - 2003 10/1/02 - 03/31/03 6,600,000
FQ2 - 2003 10/1/02 - 06/30/03 9,600,000
FQ3 - 2003 10/1/02 - 09/30/03 12,600,000
FQ4 - 2003 01/1/03 - 12/31/03 12,000,000
FQ1 - 2004 04/1/03 - 03/31/04 12,000,000
FQ2 - 2004 07/1/03 - 6/30/04 12,000,000
FQ3 - 2004 10/1/03 - 9/30/04 12,000,000
FQ4 - 2004 10/1/04 - 12/31/04 $12,000,000
(d) Limitation on Device Capital Expenditures:
Capital expenditures by OpCo. for one-way and
two-way paging devices as of the last day of each
quarter shall not exceed the amounts set forth
below for the periods set forth below:
Fiscal Quarter Period Amount
-------------- ------ ------
FQ4 - 2002 10/1/02 - 12/31/02 $ 4,500,000
FQ1 - 2003 10/1/02 - 03/31/03 9,700,000
FQ2 - 2003 10/1/02 - 06/30/03 14,700,000
FQ3 - 2003 10/1/02 - 09/30/03 19,600,000
FQ4 - 2003 01/1/03 - 12/31/03 19,800,000
FQ1 - 2004 04/1/03 - 03/31/04 17,700,000
FQ2 - 2004 07/1/03 - 6/30/04 17,000,000
FQ3 - 2004 10/1/03 - 9/30/04 16,400,000
FQ4 - 2004 10/1/04 - 12/31/04 15,900,000
CONDITIONS PRECEDENT: Usual and customary for facilities of this size,
type and purpose.
AFFIRMATIVE COVENANTS: None.
NEGATIVE COVENANTS: None.
REPRESENTATIONS & WARRANTIES: Usual and customary for facilities of this size,
type and purpose.
EVENTS OF DEFAULT: Usual and customary for facilities of this size,
type and purpose including but not limited to a
cross-default to the OpCo. Note.
ASSIGNMENTS
& PARTICIPATIONS: Each Lender will have the right, with the consent
of the Administrative Agent, not to be
unreasonably withheld, to assign or participate
all or a portion of its rights and obligations
under the Senior Secured PIK Notes provided that,
concurrently with any such assignment, such Lender
shall also transfer to the applicable assignee a
pro rata share of its commitment to the Senior
Secured Note.
B3
MAJORITY LENDERS: 51% with respect to non-payment defaults and 75%
with respect to (i) payment defaults with respect
to principal and (ii) extensions of scheduled
amortization payments (excluding final maturity).
GOVERNING LAW: New York
B4
05/14/02
EXHIBIT C
SUMMARY OF TERMS AND CONDITIONS
METROCALL, INC.
PREFERRED STOCK
The proposed terms and conditions summarized herein are provided for
discussion purposes only and do not constitute an offer, agreement, or
commitment to lend. The actual terms of any offer, agreement, or
commitment to lend will be subject to, among other conditions, receipt
of requisite approvals and satisfactory review and completion of
documentation.
ISSUER Reorganized Metrocall, Inc. ("HoldCo.")
SERIES 15% Senior Preferred Voting Securities
SHARES 6,000,000
LIQUIDATION PREFERENCE $10.00 per share plus accrued and unpaid
distributions and dividends. Liquidation Preference
of total shares to be issued is $60 million (the
"Initial Liquidation Preference")(to be increased
for accrued and unpaid dividends).
DISTRIBUTION 5,300,000 shares to be issued ratably to Secured
Lenders ($53 million Initial Liquidation
Preference)
500,000 shares to be issued ratably to holders of
allowed unsecured claims against HoldCo. ($5
million Initial Liquidation Preference)
100,000 shares to be issued to HoldCo.'s CEO,
Xxxxxxx Xxxxxxx (subject to the terms and
conditions for vesting thereof set forth in his
Employment Agreement) ($1 million Initial
Liquidation Preference)
100,000 shares to be issued to HoldC's CFO, Xxxxxxx
Xxxxx (subject to the terms and conditions for
vesting thereof set forth in his Employment
Agreement) ($1 million Initial Liquidation
Preference)
DIVIDENDS The Preferred Stock shall accrue dividends at the
rate of 15% per annum compounded quarterly.
Dividends on the Preferred Stock shall accrue (and
shall not become payable) and shall increase the
Initial Liquidation Preference until such time as
the Senior Secured
Note and the Senior Secured PIK Notes are paid in
full and thereafter dividends shall accrue and
become payable in cash quarterly in arrears.
To the extent HoldCo., is unable to pay cash
dividends, the liquidation preference shall
increase on the first day following each dividend
period in respect of any unpaid dividends provided
that HoldCo. may pay all or a portion of the amount
of any accreted liquidation preference over the
Initial Liquidation Preference on any dividend
payment date.
VOTING Holders of Preferred Stock shall have voting rights
which shall in the aggregate constitute 95% of the
total voting power of HoldCo. In the event that any
portion of the Preferred Stock is redeemed by
HoldCo., the voting rights attributable to each
remaining share shall increase proportionately such
that the Preferred Stock shall continue to hold 95%
of the total voting stock of HoldCo. until such
time that the Preferred Stock has been fully
redeemed at which time all of the voting power
shall vest with holders of the Common Stock
CONVERSION RIGHTS None.
RESTRICTIONS The Preferred Stock shall be subject to trading
restrictions for two years from after the Effective
Date as to be set forth in the certificate of
incorporation of HoldCo. (See Section infra.
Charter/By-Laws of HoldCo.)
REDEMPTION The Preferred Stock (i) may be redeemed by HoldCo.
at any time after payment in full of the Senior
Secured Note and the Senior Secured PIK Notes, at
the option of HoldCo., in whole or in part on a pro
rata basis, at its par value, together with any and
all unpaid dividends accrued to the redemption date
and (ii) shall be redeemed by HoldCo. (a) on a pro
rata basis, together with any and all unpaid
accrued dividends, after the Senior Secured Note
and the Senior Secured PIK Notes are paid in full,
on a quarterly basis by an amount equal to 100% of
Unrestricted Cash in excess of $10 million and (b)
no later than the later of (1) 12/31/06 and (2) six
months after payment in full of the Senior Secured
PIK Notes, in whole, at its par value, together
with any and all unpaid dividends accrued.
C2
RANK The Preferred Stock shall rank senior to any
capital stock of HoldCo.
Holdco. may not, without the consent of holders of
the shares of Preferred Stock, authorize or issue
parity or senior stock or any obligation or
security convertible or exchangeable into, or
evidencing a right to purchase shares of any class
or series of parity or senior stock. The terms
parity stock and senior stock shall include
warrants, rights, calls or options exercisable for
or convertible into that type of stock.
CHANGE OF CONTROL In the event of any sale or merger with respect to
all or substantially all of the HoldCo.'s assets,
or any liquidation, dissolution or winding up of
HoldCo., the holder(s) of the preferred stock shall
receive payment of the full par value of the
preferred stock, together with any and all accrued
and unpaid dividends, before any payments to
holders of any other capital stock of HoldCo.
C3
EXHIBIT "F"
METROCALL'S PRE REORGANIZATION CORPORATE STRUCTURE
-------------------------
METROCALL, INC.
(Delaware Corp.)
----------------------
Holds operating assets
----------------------
-------------------------
------------------------ ---------------------------------- ----------------------------
Metrocall USA, Inc. XxXxx RCC Communications, Inc. Metrocall Ventures, Inc.
(Delaware Corp.) (Washington Corp.) (Delaware Corp.)
License Subsidiary Operating Holding Sub. Investment Holding Sub.
------------------------ ---------------------------------- ----------------------------
------------------------------ -----------------
Advanced Nationwide Messaging ---------
Corporation MSI, Inc. ----- ----- ---- ------
(Washington Corp.) (Nevada Corp.) 39.7%
Operating Sub. Operating Sub. 61% 19% 19% 15.87%
----------------------- ---------
Holds operating assets
----------------------- ----- ----- ---- ------
------------------------------ -----------------
--------------- -----------
Beacon Peak
Inciscent, Inc. Associates
---------------- -----------
--------- -------- ----------------
99% L.P. 1% G.P. Western Paging &
Voicemail, L.P.
--------- -------- -----------------
----------------
--------------------------- Western Paging &
Voicemail, LLC
Mobilfone Service, L.P.
(Texas L.P.) ----------------
Operating Sub.
----------------------
Holds operating assets -------------------
---------------------- IRIS Wireless, LLC
fka.MessageNet
---------------------------
-------------------
EXHIBIT "F" (CONTINUED)
METROCALL'S PRE REORGANIZATION CORPORATE STRUCTURE
-------------------------
METROCALL, INC.
(Delaware Corp.)
-------------------------
------------------------ ---------------------------------- -------------------------------
Metrocall USA, Inc. XxXxx RCC Communications, Inc. Metrocall Ventures, Inc.
(Delaware Corp.) (Reincorporated Delaware Corp.) (Delaware Corp.)
License Subsidiary Operating Sub. Investment Holding Sub.
(Assumes all operating assets from
Metrocall, Inc. passed down & all
McCaws subs. And holdings merged
and rolled up into XxXxx)
------------------------ ---------------------------------- -------------------------------
----- ---- ------
19% 19% 15.87%
----- ---- ------
----------------
Western Paging &
Inciscent, Inc. Voicemail, L.P.
39.7%
---------------- -----------------
----------------
Western Paging &
Voicemail, LLC
----------------
-------------------
IRIS Wireless, LLC
fka.MessageNet
-------------------
