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EXHIBIT 10.39
METROCALL, INC.
PLACEMENT AGREEMENT
December 17, 1998
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated,
for itself and the other several
Placement Agents named in Schedule I hereto
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
Metrocall, Inc., a Delaware corporation (the "Company"), proposes
to issue and sell to you (the "Manager") and the other several purchasers named
in Schedule I hereto (collectively with the Manager, the "Placement Agents")
$250,000,000 principal amount of its 11% Senior Subordinated Notes due 2008 (the
"Notes") to be issued pursuant to the provisions of an Indenture to be dated as
of December 22, 1998 (the "Indenture"), between the Company and First Union
National Bank, as Trustee (the "Trustee").
The Notes will be offered without being registered under the
Securities Act of 1933, as amended (the "Securities Act"), to qualified
institutional buyers in compliance with the exemption from registration provided
by Rule 144A under the Securities Act and in offshore transactions in reliance
on Regulation S under the Securities Act (the "Regulation S").
The Placement Agents and their direct and indirect transferees
will be entitled to the benefits of a Registration Rights Agreement, to be dated
the Closing Date (as defined below) and to be substantially in the form attached
hereto as Exhibit A.
In connection with the sale of the Notes, the Company has prepared
a preliminary offering memorandum dated December 3, 1998 (the "Preliminary
Memorandum") and will prepare a final offering memorandum (the "Final
Memorandum" and, with the Preliminary Memorandum, each a "Memorandum") setting
forth or including a description of the terms of the Notes, the terms of the
offering and a description of the Company and its business. As used herein, the
term "Memorandum" shall include in each case the documents incorporated by
reference therein.
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1. Representations and Warranties. The Company represents and
warrants to, and agrees with, you that as of the date hereof:
(a) (i) Each document, if any, filed with the Securities and
Exchange Commission (the "Commission") pursuant to the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and incorporated by reference in
either Memorandum complied when so filed in all material respects with the
Exchange Act and the applicable rules and regulations thereunder and (ii) the
Preliminary Memorandum does not contain and the Final Memorandum, in the form
used by the Placement Agents to confirm sales and on the Closing Date, will not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations and
warranties set forth in this Section 1(a) do not apply to statements or
omissions in either Memorandum based upon information relating to any Placement
Agent furnished to the Company in writing by such Placement Agent through you
expressly for use therein.
(b) The Company has been duly incorporated, is validly existing
as a corporation in good standing under the laws of Delaware, has the corporate
power and authority to own its property and to conduct its business as described
in each Memorandum and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not have
a material adverse effect on the Company and its subsidiaries, taken as a whole.
(c) Each subsidiary of the Company has been duly incorporated,
is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to own
its property and to conduct its business as described in each Memorandum and is
duly qualified to transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole. All of the issued shares of
capital stock of each subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and are owned directly
by the Company, free and clear of all liens, encumbrances, equities or claims,
other than liens disclosed in the Memorandum in favor of the Company's lenders
under the Credit Facility (as used in the Memorandum).
(d) This Agreement has been duly authorized, executed and
delivered by the Company.
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(e) The Notes have been duly authorized by the Company and,
when executed, authenticated and delivered to and paid for by the Placement
Agents in accordance with the terms of the Indenture and this Agreement, will
(x) be valid and binding obligations of the Company enforceable against the
Company in accordance with their terms, except as (A) the enforceability thereof
may be limited by the effect of applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
and (B) rights of acceleration, if applicable, and the availability of equitable
remedies may be limited by equitable principles of general applicability and (y)
be entitled to the benefits of the Indenture.
(f) Each of the Indenture and the Registration Rights Agreement
has been duly authorized, and when executed and delivered by the Company, will
be a valid and binding agreement of, the Company, enforceable in accordance with
its terms except as (x) the enforceability thereof may be limited by the effect
of applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and (y) rights of acceleration, if
applicable, and the availability of equitable remedies may be limited by
equitable principles of general applicability.
(g) The execution, delivery and performance by the Company of
its obligations under this Agreement (including the issuance, sale and delivery
of the Notes), the Indenture, the Registration Rights Agreement and the Notes
will not (i) contravene any provision of applicable law or the certificate of
incorporation or by-laws of the Company or any agreement or other instrument
binding upon the Company or any of its subsidiaries or any judgment, order or
decree of any governmental body, agency or court having jurisdiction over the
Company or any subsidiary, including, without limitation, the Federal
Communications Commission ("FCC"), (ii) violate or conflict with any law, rule
or regulation applicable to the Company, any of its subsidiaries, or their
respective properties, including, without limitation, the Communications Act of
1934, as amended, and the rules and regulations of the FCC thereunder
(collectively, the "Communications Act"), or (iii) result in termination or
revocation of any of the permits, licenses, approvals, orders, certificates,
franchises or authorizations of governmental or regulatory authorities,
including those relating to the Communications Act, owned or held by the Company
or any of its subsidiaries in order to conduct its paging operations
(collectively, the "Licenses") or result in any other material impairment of the
rights of the holder of any such Licenses; and no consent, approval,
authorization or order of, or qualification with, any governmental body or
agency, including, without limitation, the FCC, is required for the performance
by the Company of its obligations under this Agreement (including the issuance,
sale and delivery of the Notes), the Indenture, the Registration Rights
Agreement or the Notes, except such as may be required by the securities or Blue
Sky laws of the various states in connection with the offer and sale of the
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Notes or by the securities laws of the various states in connection with the
registration obligations under the Registration Rights Agreement.
(h) There has not occurred any material adverse change, or any
development which could reasonably be expected to result in a material adverse
change, in the condition, financial or otherwise, or in the earnings, business
or operations of the Company and its subsidiaries, taken as a whole, from that
set forth in the Preliminary Memorandum.
(i) There are no legal or governmental proceedings pending, or
to the Company's knowledge, threatened to which the Company or any of its
subsidiaries is a party or to which any of the properties of the Company or any
of its subsidiaries is subject other than proceedings accurately described in
all material respects in each Memorandum and proceedings that would not have a
material adverse effect on the Company and its subsidiaries, taken as a whole,
or on the power or ability of the Company to perform its obligations under this
Agreement, the Indenture, the Registration Rights Agreement or the Notes or to
consummate the transactions contemplated by the Final Memorandum.
(j) Neither the Company nor any affiliate (as defined in Rule
501(b) of Regulation D under the Securities Act, an "Affiliate") of the Company
has directly, or through any agent, (i) sold, offered for sale, solicited offers
to buy or otherwise negotiated in respect of, any security (as defined in the
Securities Act) which is or will be integrated with the sale of the Notes in a
manner that would require the registration under the Securities Act of the Notes
or (ii) engaged in any form of general solicitation or general advertising in
connection with the offering of the Notes (as those terms are used in Regulation
D under the Securities Act) or in any manner involving a public offering within
the meaning of Section 4(2) of the Securities Act.
(k) The Company is not and, after giving effect to the offering
and sale of the Notes and the application of the proceeds thereof as described
in the Memorandum, will not be an "investment company" or an entity "controlled"
by an "investment company," as such terms are defined in the Investment Company
Act of 1940, as amended.
(l) Assuming the accuracy of the representations of the
Placement Agents contained in Section 6 of this Agreement, and the compliance by
the Placement Agents with the agreements set forth herein, it is not necessary
in connection with the offer, sale and delivery of the Notes to the Placement
Agents in the manner contemplated by this Agreement to register the Notes under
the Securities Act or to qualify the Indenture under the Trust Indenture Act of
1939, as amended.
(m) The Company and each of its subsidiaries have such Licenses
as are necessary for the lawful operation of their paging business as described
in the ▇▇▇▇▇
▇
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Memorandum under the caption "Business" in the manner and to the full extent now
operated or proposed to be operated as described in the Final Memorandum, except
for those Licenses the absence of which would not, individually or in the
aggregate, have a material adverse effect on the Company and its subsidiaries,
taken as a whole. The Licenses are in full force and effect and no proceeding
has been instituted or is pending or, to the Company's knowledge, is threatened
or contemplated which in any manner affects or draws into question the validity
or effectiveness thereof. The Licenses contain no restrictions, except for
restrictions applicable to the paging industry generally, that are materially
burdensome to the Company or any of its subsidiaries. The Company and each of
its subsidiaries hold all other material licenses, certificates and permits from
governmental authorities which are necessary to the conduct of their businesses,
and neither the Company nor any of its subsidiaries has infringed any patents,
patent rights, trade names, trademarks or copyrights, except for an infringement
which would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(n) Except for matters that would not, individually or in the
aggregate, have a material adverse effect on the Company and its subsidiaries,
taken as a whole, (i) the operation of the Company's paging business in the
manner and to the full extent now operated or proposed to be operated as
described in the Final Memorandum is in accordance with the Licenses, the
Communications Act and all orders, rules and regulations of the FCC, and (ii) no
event has occurred which permits (nor has an event occurred which with notice or
lapse of time or both would permit) the revocation or termination of any
necessary Licenses or which might result in any other impairment of the rights
of the Company or any of its subsidiaries therein or thereunder, and the Company
and each of its subsidiaries are in compliance with all statutes, orders, rules
and regulations of the FCC relating to or affecting their paging operations.
(o) The Company and its subsidiaries (i) are in compliance with
any and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct their
respective businesses and (iii) are in compliance with all terms and conditions
of any such permit, license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such permits,
licenses or approvals would not, singly or in the aggregate, have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
(p) None of the Company, its Affiliates or any person acting on
its or their behalf (other than the Placement Agents) has engaged in any
directed selling efforts (as that
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term is defined in Regulation S) with respect to the Notes, and the Company and
its Affiliates and any person acting on their behalf (other than the Placement
Agents) have complied with the offering restrictions requirement of Regulation
S.
(q) The terms of the Notes and the Indenture conform in all
material respects to the description thereof contained in the Preliminary
Memorandum and will conform in all material respects to the description thereof
in the Final Memorandum under the heading "Description of Notes."
(r) The proceeds from the offering and sale of the Notes will
be applied in all material respects in accordance with the description set forth
under the caption "Use of Proceeds" in the Final Memorandum.
(s) The financial statements and pro forma financial
information contained in each Memorandum comply with the requirements of
Regulation S-X of the Commission.
(t) The Company has obtained all waivers and consents necessary
to be obtained by the Company under the Credit Facility in connection with the
issuance and sale of the Notes, including, without limitation, an acknowledgment
that such issuance and sale complies with the requirements of Section 7.1(g)
thereof.
2. Offering. You have advised the Company that the Placement
Agents will make an offering of the Notes purchased by the Placement Agents
hereunder on the terms set forth in the Final Memorandum as soon as practicable
after this Agreement is entered into as in your judgment is advisable.
3. Purchase and Delivery. The Company hereby agrees to sell to
the several Placement Agents, and the Placement Agents, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agree, severally and not jointly, to purchase from the
Company the respective principal amount of Notes set forth in Schedule I hereto
opposite their names at a purchase price of 97.054% of the principal amount
thereof plus accrued interest, if any, from December 22, 1998 to the date of
payment and delivery.
Payment for the Notes shall be made against delivery of the Notes
at a closing (the "Closing") to be held at the office of Shearman & Sterling,
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, at 9:00 a.m., New York City time, on
December 22, 1998, or at such other time on the same or such other date, not
later than December 29, 1998, as shall be designated in writing by you. The time
and date of such payment are herein referred to as the Closing Date. Payment for
the Notes shall be made by wire transfer to an account previously designated to
the Placement Agents by the Company in immediately available funds.
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Certificates for the Notes shall be in definitive form and
registered in such names and in such denominations as you shall request in
writing not less than one full business day prior to the Closing Date. The
certificates evidencing the Notes shall be delivered to you on the Closing Date
for the respective accounts of the several Placement Agents, with any transfer
taxes payable in connection with the transfer of the Notes to the Placement
Agents duly paid, against payment of the purchase price therefor.
4. Conditions to Closing. The several obligations of the
Placement Agents under this Agreement to purchase the Notes will be subject to
the following conditions:
(a) Subsequent to the date of this Agreement and prior to the
Closing Date,
(i) there shall not have occurred any downgrading, nor shall
any notice have been given of any intended or potential downgrading or of
any review for a possible change that does not indicate the direction of
the possible change, in the rating accorded any of the Company's
securities by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act; and
(ii) there shall not have occurred any change, or any
development which could reasonably be expected to result in a change, in
the condition, financial or otherwise, or in the earnings, business or
operations, of the Company and its subsidiaries, taken as a whole, from
that set forth in the Preliminary Memorandum that, in your judgment, is
material and adverse and that makes it, in your judgment, impracticable
to market the Notes on the terms and in the manner contemplated in the
Final Memorandum.
(b) You shall have received on the Closing Date a certificate,
dated the Closing Date and signed by an executive officer of the Company, to the
effect set forth in clause (a)(i) above and to the effect that the
representations and warranties of the Company contained in this Agreement are
true and correct as of the Closing Date and that the Company has complied with
all of the agreements and satisfied all of the conditions on its part to be
performed or satisfied on or before the Closing Date.
The officer signing and delivering such certificate may rely upon
the best of his knowledge as to any proceedings threatened.
(c) You shall have received on the Closing Date an opinion of
▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, special counsel for the Company, dated the Closing
Date, to the effect set forth in Exhibit B.
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(d) You shall have received on the Closing Date an opinion of
▇▇▇▇▇ & ▇▇▇▇▇▇, Attorneys at Law, L.L.P., FCC counsel for the Company, dated the
Closing Date, to the effect set forth in Exhibit C.
(e) You shall have received on the Closing Date an opinion of
Shearman & Sterling, counsel for the Placement Agents, dated the Closing Date,
in form and substance satisfactory to you.
(f) You shall have received on each of the date hereof and the
Closing Date a letter, dated the date hereof or the Closing Date, as the case
may be, in form and substance satisfactory to you, from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, the
Company's independent public accountants, containing statements and information
of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain financial
information contained in or incorporated by reference into the Final Memorandum.
(g) You shall have received on each of the date hereof and the
Closing Date a letter, dated the date hereof or the Closing Date, as the case
may be, in form and substance satisfactory to you, from Ernst & Young LLP,
independent auditors for ProNet Inc., containing statements and information of
the type ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial information
contained in or incorporated by reference into the Final Memorandum.
(h) You shall have received on each of the date hereof and the
Closing Date a letter, dated the date hereof or the Closing Date, as the case
may be, in form and substance satisfactory to you, from PricewaterhouseCoopers
LLP, independent accountants for AT&T Wireless Services, Inc.--Messaging
Division, containing statements and information of the type ordinarily included
in accountants' "comfort letters" to underwriters with respect to the financial
statements and certain financial information contained in or incorporated by
reference into the Final Memorandum.
(i) The Company shall have complied with the provisions of
subsection (a) of Section 5 hereof with respect to the furnishing of copies of
the Final Memorandum on the business day next following the date of this
Agreement, in such quantities as you shall have reasonably requested.
(j) The Company shall have received all waivers and consents
necessary to be obtained by the Company under the Credit Facility.
(k) You shall have received such other documents and
certificates as are reasonably requested by you and your counsel.
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5. Covenants of the Company. In further consideration of the
agreements of the Placement Agents contained in this Agreement, the Company
covenants as follows:
(a) To furnish to you, without charge, during the period
mentioned in paragraph (c) below, as many copies of the Final Memorandum,
any documents incorporated by reference therein and any supplements and
amendments thereto as you may reasonably request and to use best efforts
to deliver such copies to you by 5 p.m. (New York City time) on the
business day next following the execution of this Agreement.
(b) Before amending or supplementing either Memorandum, to
furnish to you a copy of each such proposed amendment or supplement and
not to use any such proposed amendment or supplement to which you
reasonably object.
(c) If, during such period after the date hereof and prior to
the date on which all of the Notes shall have been sold by the Placement
Agents, any event shall occur or condition exist as a result of which it
is necessary in your judgment to amend or supplement the Final Memorandum
in order to make the statements therein, in the light of the
circumstances when such Memorandum is delivered to a purchaser, not
misleading, or if, in the opinion of counsel to the Placement Agents, it
is necessary to amend or supplement such Memorandum to comply with
applicable law, forthwith to prepare and furnish, at its own expense, to
the Placement Agents, either amendments or supplements to such Memorandum
so that the statements in such Memorandum as so amended or supplemented
will not, in the light of the circumstances when such Memorandum is
delivered to a purchaser, be misleading or so that such Memorandum, as so
amended or supplemented, will comply with applicable law.
(d) To endeavor to qualify the Notes, if required, for offer
and sale under the securities or Blue Sky laws of such jurisdictions as
you shall reasonably request.
(e) Whether or not any sale of such Notes is consummated, to
pay all expenses incident to the performance of its obligations under
this Agreement, including: (i) the preparation of each Memorandum and all
amendments and supplements thereto, (ii) the preparation, issuance and
delivery of the Notes, including any transfer or other taxes payable
thereon, (iii) the fees and disbursements of the Company's counsel and
accountants and the Trustee and its counsel, (iv) the qualification of
such Notes under securities or Blue Sky laws in accordance with the
provisions of Section 5(d), including filing fees and the reasonable fees
and disbursements of counsel for the Placement Agents in connection
therewith and in connection with the preparation of any Blue Sky or legal
investment memoranda, (v) the printing and delivery to the Placement
Agents in quantities as hereinabove stated
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of copies of the Memorandum and any amendments or supplements thereto,
(vi) any fees charged by rating agencies for the rating of such Notes,
(vii) all document production charges and expenses of counsel to the
Placement Agents (but not including their fees for professional services)
in connection with the preparation of this Agreement, (viii) the fees and
expenses, if any, incurred in connection with the admission of such Notes
for trading in PORTAL or any other appropriate market system, (ix) the
costs and expenses of the Company relating to investor presentations on
any "road show" undertaken in connection with the marketing of the Notes,
including, without limitation, expenses associated with the production of
road show slides and graphics, fees and expenses of any consultants
engaged in connection with the road show presentations with the prior
approval of the Company, travel and lodging expense of the
representatives and officers of the Company and any such consultants, and
the cost of any aircraft chartered in connection with the road show, and
(x) all other costs and expenses incident to the performance of the
obligations of the Company hereunder for which provision is not otherwise
made in this Section.
(f) Neither the Company nor any Affiliate will sell, offer for
sale or solicit offers to buy or otherwise negotiate in respect of any
security (as defined in the Securities Act) which could be integrated
with the sale of the Notes in a manner which would require the
registration under the Securities Act of such Notes.
(g) Not to solicit any offer to buy or offer or sell the Notes
by means of any form of general solicitation or general advertising (as
those terms are used in Regulation D under the Securities Act) or in any
manner involving a public offering within the meaning of Section 4(2) of
the Securities Act.
(h) While any of the Notes remain outstanding, to make
available, upon request, to any seller of such Notes the information
specified in Rule 144A(d)(4) under the Securities Act, unless the Company
is then subject to Section 13 or 15(d) of the Exchange Act.
(i) None of the Company, its Affiliates or any person acting on
its or their behalf (other than the Placement Agents) will engage in any
directed selling efforts (as that term is defined in Regulation S) with
respect to the Notes, and the Company and its Affiliates and each person
acting on its or their behalf (other than the Placement Agents) will
comply with the offering restrictions of Regulation S.
(j) To use its best efforts to permit the Notes to be
designated PORTAL securities in accordance with the rules and regulations
adopted by the National Association of Securities Dealers, Inc. relating
to trading in the PORTAL Market.
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6. Offering of Notes; Restrictions on Transfer. (a) Each
Placement Agent, severally and not jointly, represents and warrants that such
Placement Agent is a qualified institutional buyer as defined in Rule 144A under
the Securities Act (a "QIB"). Each Placement Agent, severally and not jointly,
agrees with the Company that (i) it will not solicit offers for, or offer or
sell, such Notes by any form of general solicitation or general advertising (as
those terms are used in Regulation D under the Securities Act) or in any manner
involving a public offering within the meaning of Section 4(2) of the Securities
Act and (ii) it will solicit offers for such Notes only from, and will offer
such Notes only to, persons that it reasonably believes to be (A) in the case of
offers inside the United States, QIBs and (B) in the case of offers outside the
United States, to persons other than U.S. persons ("foreign purchasers", which
term shall include dealers or other professional fiduciaries in the United
States acting on a discretionary basis for foreign beneficial owners (other than
an estate or trust)) that, in each case, in purchasing such Notes are deemed to
have represented and agreed as provided in the Final Memorandum under the
caption "Transfer Restrictions."
(b) Each Placement Agent, severally and not jointly,
represents, warrants, and agrees with respect to offers and sales outside the
United States that:
(i) it understands that no action has been or will be taken in
any jurisdiction by the Company that would permit a public offering of
the Notes, or possession or distribution of either Memorandum or any
other offering or publicity material relating to the Notes, in any
country or jurisdiction where action for that purpose is required;
(ii) such Placement Agent will comply with all applicable laws
and regulations in each jurisdiction in which it acquires, offers, sells
or delivers Notes or has in its possession or distributes either
Memorandum or any such other material, in all cases at its own expense;
(iii) the Notes have not been and will not be registered under
the Securities Act and may not be offered or sold within the United
States or to, or for the account or benefit of, U.S. persons except in
accordance with Regulation S under the Securities Act or pursuant to an
exemption from the registration requirements of the Securities Act;
(iv) such Placement Agent has offered the Notes and will offer
and sell the Notes (A) as part of their distribution at any time and (B)
otherwise until 40 days after the later of the commencement of the
offering of the Notes and the Closing Date, only in accordance with Rule
903 of Regulation S or another exemption from the registration
requirements of the Securities Act. Accordingly, neither such Placement
Agent, its Affiliates nor any persons acting on its or their behalf have
engaged or will engage in any directed selling efforts (within the
meaning of Regulation S) with respect
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to the Notes, and any such Placement Agent, its Affiliates and any such
persons have complied and will comply with the offering restrictions
requirements of Regulation S;
(v) such Placement Agent has (A) not offered or sold and, prior
to six months after the Closing Date, will not offer or sell any Notes to
persons in the United Kingdom except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments
(as principal or agent) for the purposes of their businesses or otherwise
in circumstances which have not resulted and will not result in an offer
to the public in the United Kingdom within the meaning of the Public
Offers of Securities Regulations 1995 (the "Regulations"); (B) complied
and will comply with all applicable provisions of the Financial Services
▇▇▇ ▇▇▇▇ and the Regulations with respect to anything done by it in
relation to the Notes in, from or otherwise involving the United Kingdom;
and (C) only issued or passed on and will only issue or pass on to any
person in the United Kingdom any document received by it in connection
with the issue of the Notes if that person is of a kind described in
Article 11(3) of the Financial Services ▇▇▇ ▇▇▇▇ (Investment
Advertisements) (Exemptions) Order 1996 or is a person to whom such
document may otherwise lawfully be issued or passed on; and
(vi) such Placement Agent understands that the Notes have not
been and will not be registered under the Securities and Exchange Law of
Japan, and represents that it has not offered or sold, and agrees that it
will not offer or sell, any Notes, directly or indirectly in Japan or to
any resident of Japan except (A) pursuant to an exemption from the
registration requirements of the Securities and Exchange Law of Japan and
(B) in compliance with any other applicable requirements of Japanese law.
Terms used in this Section 6 have the meanings given to them by Regulation S.
7. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Placement Agent, and each person, if any, who
controls such Placement Agent within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, or is under common control
with, or is controlled by, such Placement Agent, from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred by any Placement Agent or any such
controlling or affiliated person in connection with defending or investigating
any such action or claim) caused by any untrue statement or alleged untrue
statement of a material fact contained in either Memorandum (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact necessary to make the statements therein in light of the
circumstances under which they were made not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any such untrue statement
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or omission or alleged untrue statement or omission based upon information
relating to any Placement Agent furnished to the Company in writing by such
Placement Agent through you expressly for use therein.
(b) Each Placement Agent agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers and each
person, if any, who controls the Company within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act to the same extent as
the foregoing indemnity from the Company to such Placement Agent, but only with
reference to information relating to such Placement Agent furnished to the
Company in writing by such Placement Agent through you expressly for use in
either Memorandum or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either paragraph (a) or (b) above, such
person (the "indemnified party") shall promptly notify the person against whom
such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all such indemnified parties and that all
such fees and expenses shall be reimbursed as they are incurred. Such firm shall
be designated in writing by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated in the case of
parties indemnified pursuant to paragraph (a) above and by the Company in the
case of parties indemnified pursuant to paragraph (b) above. The indemnifying
party shall not be liable for any settlement of any proceeding effected without
its written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by the second
and third sentences of this paragraph, the indemnifying party agrees that it
shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 30 days
14
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after receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
(d) To the extent the indemnification provided for in paragraph
(a) or (b) of this Section 7 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company, on the one hand, and the Placement Agents, on
the other hand, from the offering of such Notes or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and the Placement Agents on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Placement
Agents on the other hand in connection with the offering of such Notes shall be
deemed to be in the same respective proportions as the net proceeds from the
offering of such Notes (before deducting expenses) received by the Company and
the total discounts and commissions received by the Placement Agents in respect
thereof bear to the aggregate offering price of such Notes. The relative fault
of the Company on the one hand and of the Placement Agents on the other hand
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or by
the Placement Agents and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Placement Agents' respective obligations to contribute pursuant to this
Section 7 are several in proportion to the respective principal amount of Notes
they have purchased hereunder, and not joint.
(e) The Company and the Placement Agents agree that it would
not be just or equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation (even if the Placement Agents were treated as
one entity for such purpose) or by any other method of allocation that does not
take account of the equitable considerations referred to in paragraph (d) above.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in paragraph (d) above shall be
deemed to
15
15
include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 7, no Placement Agent shall be required to contribute any amount in
excess of the amount by which the total price at which the Notes resold by it in
the initial placement of such Notes were offered to investors exceeds the amount
of any damages that such Placement Agent has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
indemnity and contribution provisions contained in this Section 7 and the
representations and warranties of the Company contained in this Agreement shall
remain operative and in full force and effect regardless of (i) any termination
of this Agreement, (ii) any investigation made by or on behalf of the Placement
Agents or any person controlling the Placement Agents or by or on behalf of
Issuer or the Company, its officers or directors or any person controlling the
Company and (iii) acceptance of and payment for any of the Notes. The remedies
provided for in this Section 7 are not exclusive and shall not limit any rights
or remedies which may otherwise be available to any indemnified party at law or
in equity.
8. Termination. This Agreement shall be subject to termination
by notice given by you to the Company, if (a) after the execution and delivery
of this Agreement and prior to the Closing Date (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, any of the
New York Stock Exchange, the American Stock Exchange, the National Association
of Securities Dealers, Inc., the Chicago Board of Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in your judgment, is material and adverse and (b) in the case of any of
the events specified in clauses (a)(i) through (iv), such event singly or
together with any other such event makes it, in your judgment, impracticable to
market the Notes on the terms and in the manner contemplated in the Final
Memorandum.
9. Miscellaneous. (a) If, on the Closing Date, any one or more
of the Placement Agents shall fail or refuse to purchase Notes that it or they
have agreed to purchase hereunder on such date, and the aggregate principal
amount of Notes which such defaulting Placement Agent or Placement Agents agreed
but failed or refused to purchase is not more than one-tenth of the aggregate
principal amount of Notes to be purchased on such date, the other Placement
Agents shall be obligated severally in the proportions that the principal amount
of Notes set forth opposite their respective names in Schedule I bears to the
aggregate principal amount of Notes set forth opposite the names of all such
non-defaulting Placement
16
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Agents, or in such other proportions as you may specify, to purchase the Notes
which such defaulting Placement Agent or Placement Agents agreed but failed or
refused to purchase on such date; provided that in no event shall the principal
amount of Notes that any Placement Agent has agreed to purchase pursuant to
Section 3 be increased pursuant to this Section 9 by an amount in excess of
one-ninth of such principal amount of Notes without the written consent of such
Placement Agent. If, on the Closing Date, any Placement Agent or Placement
Agents shall fail or refuse to purchase Notes which it or they have agreed to
purchase hereunder on such date and the aggregate principal amount of Notes with
respect to which such default occurs is more than one-tenth of the aggregate
principal amount of Notes to be purchased on such date and arrangements
satisfactory to you and the Company for the purchase of such Notes are not made
within 36 hours after such default, this Agreement shall terminate without
liability on the part of any non-defaulting Placement Agent or of the Company.
In any such case either you or the Company shall have the right to postpone the
Closing Date, but in no event for longer than seven days, in order that the
required changes, if any, in the Final Memorandum or in any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Placement Agent from liability in respect of any default
of such Placement Agent under this Agreement.
This Agreement may be signed in any number of counterparts, each
of which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
(b) If this Agreement shall be terminated by the Placement
Agents, or any of them, because of any failure or refusal on the part of the
Company to comply with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason the Company shall be unable to perform its
obligations under this Agreement, the Company will reimburse the Placement
Agents or such Placement Agents as have so terminated this Agreement with
respect to themselves, severally, for all out-of-pocket expenses (including the
fees and disbursements of their counsel) reasonably incurred by such Placement
Agents in connection with this Agreement or the offering contemplated hereunder.
(c) This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
(d) The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
(e) Any notice required or permitted to be given hereunder
shall be given in writing and shall be deemed effective three days after deposit
in the United States mail (certified or registered, return receipt requested),
postage prepaid, or when received if personally delivered, addressed as follows:
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17
To the Placement Agents: To the Company:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated Metrocall, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: High Yield New Issue Group Attention: Chief Financial Officer
with a copy to: with a copy to:
Shearman & ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
or to such other address of which written notice is given to the other.
18
Please confirm your agreement to the foregoing by signing in the
space provided below for that purpose and returning to us a copy hereof,
whereupon this Agreement shall constitute a binding agreement between us.
Very truly yours,
METROCALL, INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Financial Officer
Agreed, December 17, 1998
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated
Acting severally on behalf
of itself and the several
Placement Agents named herein
By ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ III
-----------------------------
Authorized Signatory
19
SCHEDULE I
Principal
Amount of Notes
Placement Agent To Be Purchased
--------------- ---------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated ............................... $125,000,000
NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC............................ 50,000,000
TD Securities (USA) Inc.......................................... 25,000,000
First Union Capital Markets, a division of Wheat
First Securities, Inc. ..................................... 25,000,000
BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc................................ 25,000,000
............................................ ------------
$250,000,000
Total................................... ============
20
EXHIBIT A
REGISTRATION RIGHTS AGREEMENT
21
EXHIBIT B
Opinion of ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇,
Counsel for the Company
The opinion of the counsel for the Company to be delivered
pursuant to Section 4(c) of the Placement Agreement shall be to the effect that:
(A) the Company has been duly incorporated, is validly existing
as a corporation in good standing under the laws of Delaware, has the
corporate power and authority to own its property and to conduct its
business as described in the Final Memorandum (references herein to the
Final Memorandum being taken to mean the same, as amended or
supplemented) and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to
the extent that the failure to be so qualified or be in good standing
would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole;
(B) each subsidiary of the Company has been duly incorporated,
is validly existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described in
the Final Memorandum and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business
or its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole;
(C) the Placement Agreement has been duly authorized, executed
and delivered by the Company;
(D) the Notes have been duly authorized by the Company and,
when executed, authenticated and delivered to and paid for in accordance
with the terms of the Placement Agreement, will (x) be valid and binding
obligations of the Company enforceable against the Company in accordance
with their terms, except as (A) the enforceability thereof may be limited
by the effect of applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and (B)
rights of acceleration, if applicable, and the availability of equitable
remedies may be limited by equitable principles of general applicability
and (y) be entitled to the benefits of the Indenture;
22
(E) each of the Indenture and the Registration Rights Agreement
has been duly authorized, executed and delivered by, and is a valid and
binding agreement of, the Company, enforceable in accordance with its
terms except as (x) the enforceability thereof may be limited by the
effect of applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors' rights generally and (y) rights of
acceleration, if applicable, and the availability of equitable remedies
may be limited by equitable principles of general applicability, as well
as concepts of materiality, reasonableness, good faith and fair dealing
and (z) with respect to the Registration Rights Agreement only, rights of
indemnification and contribution may be limited by Federal or state
securities law or principles of public policy.
(F) the execution, delivery and performance by the Company of
its obligations under the Placement Agreement, the Indenture, the
Registration Rights Agreement and the Notes will not contravene (i) any
provision of applicable law, (ii) the certificate of incorporation or
by-laws of the Company, (iii) to such counsel's knowledge, any agreement
or other instrument binding upon the Company or any of its subsidiaries
that is material to the Company and its subsidiaries, taken as a whole,
or (iv) to such counsel's knowledge, any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Company
or any subsidiary, and no consent, approval, authorization or order of,
or qualification with, any governmental body or agency is required for
the performance by the Company of its obligations under the Placement
Agreement, the Indenture, the Registration Rights Agreement or the Notes,
except such as may be required by the securities or Blue Sky laws of the
various states in connection with the offer and sale of the Notes;
(G) to the knowledge of counsel, there are no legal or
governmental proceedings pending or threatened to which the Company or
any of its subsidiaries is a party or to which any of the properties of
the Company or any of its subsidiaries is subject other than proceedings
fairly summarized in all material respects in the Final Memorandum and
proceedings which such counsel believes are not likely to have a material
adverse effect on the Company and its subsidiaries, taken as a whole, or
on the power or ability of the Company to perform its obligations under
the Placement Agreement, the Indenture, the Registration Rights Agreement
or the Notes or to consummate the transactions contemplated by the Final
Memorandum;
(H) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended;
(I) the statements in the Final Memorandum under the captions
"Description of Notes," "Transfer Restrictions," "Risk Factors--The Notes
Will be Subordinated to Metrocall's Senior Debt," "--Metrocall's Debt
Agreements Impose Operating and Financial Restrictions," "Management of
Metrocall--Employment Arrangements,"
B-2
23
"Indebtedness" and "Private Placement," insofar as such statements
constitute a summary of the laws, regulations, legal matters, documents
or proceedings referred to therein, fairly summarize the matters referred
to therein;
(J) such counsel is of the opinion that the statements in the
Final Memorandum, under the caption "Certain United States Federal Tax
Considerations" are accurate and fairly summarize the matters referred to
therein;
(K) such counsel is of the opinion that each document
incorporated by reference in the Final Memorandum (except for financial
statements included therein as to which such counsel need not express any
opinion) complied as to form when filed with the Commission in all
material respects with the Exchange Act and the rules and regulations of
the Commission thereunder; and
(L) based upon the representations, warranties, and agreements
of the Company in Sections 1(j), 1(p), 5(f), 5(g) and 5(i) of the
Placement Agreement and of the Placement Agents in Section 6 of the
Placement Agreement, and assuming the accuracy of and compliance with
such representations, warranties and agreements, it is not necessary in
connection with the offer, sale and delivery of the Securities to the
Placement Agents under the Placement Agreement or in connection with the
initial resale of such Securities by the Placement Agents in accordance
with Section 6 of the Placement Agreement to register the Securities
under the Securities Act of 1933, it being understood that no opinion is
expressed as to any subsequent resale of any Security.
Such counsel shall also state that they have participated in
conferences with representatives of the Company, representatives of its
independent public accountants, the Company's FCC counsel, and representatives
of the Placement Agents and their counsel at which conferences the contents of
the Preliminary Memorandum and the Final Memorandum (and any amendments or
supplements thereto) and documents incorporated by reference were discussed and,
although such counsel assumes no responsibility for the accuracy, completeness
or fairness of the Final Memorandum or any amendment or supplements thereto
(except as expressly provided above), nothing has come to the attention of such
counsel to cause such counsel to believe the Final Memorandum (other than the
financial statements and other financial and statistical information contained
therein, as to which such counsel need express no belief), as of the date the
Final Memorandum was issued and as of the date such opinion is delivered,
contained or contains any untrue statement of a material fact or omitted or
omits to state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
B-3
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EXHIBIT C
Opinion of FCC Counsel
for the Company
The opinion of FCC counsel for the Company to be delivered pursuant to
Section 4(d) of the Placement Agreement shall be to the effect that:
(A) the execution, delivery and performance by the Company of
its obligations under the Placement Agreement, the Indenture, the
Registration Rights Agreement and the Notes will not (1) contravene any
judgment, order or decree of the FCC, (2) violate or conflict with the
Communications Act or (3) result in termination or revocation of any of
the Licenses or result in any other material impairment of the rights of
the holder of any such License; and no consent, approval, authorization
or order of or qualification with the FCC, is required for the
performance by the Company of its obligations under the Placement
Agreement, the Indenture, the Registration Rights Agreement or the Notes;
(B) to the best of such counsel's knowledge, the Company and
each of its subsidiaries have such Licenses as are necessary for the
lawful operation of their paging business in the manner and to the full
extent now operated or proposed to be operated as described in the Final
Memorandum; the Licenses are in full force and effect and, to the best of
our knowledge, no proceeding has been instituted or is threatened,
pending or contemplated which in any manner affects or draws into
question the validity or effectiveness thereof; the Licenses contain no
materially burdensome restrictions not customarily imposed by the FCC on
paging companies of the same class and type;
(C) such counsel has not been retained to devote substantial
attention to any matter or claim which, if true, would constitute a
material violation of the Communications Act or the rules and regulations
of the FCC or warrant revocation or termination of the Licenses or any
other material impairment of the rights of the Company or any of its
subsidiaries therein or thereunder; and
(D) the statements in the Final Memorandum, under the captions
"Risk Factors--Technological Developments Could Affect Metrocall's
Business," "--Metrocall Could Incur Substantial Liabilities if Litigation
Involving Local Transport Charges is Resolved Unfavorably,"
"--Metrocall's Business Can be Affected by Changes in Regulations," and
"Business--Competition," "--Regulation," "--Legislative Changes" and
"--Litigation" which concern legal matters, documents or proceedings
(including, without limitation, provisions of the Communications Act or
the FCC's rules and regulations) arising under or in connection with the
Communications Act and the FCC's rules and regulations, fairly present
and
25
summarize those legal matters, documents, proceedings, provisions, rules
and regulations.
C-2