AMENDED AND RESTATED
WEB YP AGREEMENT
This AMENDED AND RESTATED WEB YP ACQUISITION AGREEMENT (the "RESTATED
AGREEMENT") is made and entered into as of this 26th day of October, 1999, by
and among Advanced Communications Group, Inc., a Delaware corporation ("PARENT")
and ACG Acquisition VI Corp., a Delaware corporation and a wholly-owned
subsidiary of Parent ("ACQUISITION SUBSIDIARY"), on the one hand and Web
YP, Inc., a Texas corporation ("WEB"), Xxxxxxx X'Xxxx, a resident of the State
of Texas ("X'XXXX"), and Xxxxxxx X. Xxxx, a resident of the State of Texas
("XXXX") (X'Xxxx and Xxxx are together referred to herein as the "WEB
SHAREHOLDERS"), on the other.
RECITALS
A. Parent desires to acquire, and Web and the Web Shareholders desire Parent
to acquire, all of the outstanding common stock of Web, on the terms and subject
to the conditions set forth in this Restated Agreement.
B. In furtherance of such acquisition, the respective Boards of Directors
of Parent, Acquisition Subsidiary and Web have approved the merger (the
"MERGER") of Acquisition Subsidiary with and into Web in accordance with the
Corporation Laws, all on the terms and conditions set forth in this Restated
Agreement.
C. The Boards of Directors of each of Web, Acquisition Subsidiary and
Parent believe it is in the best interests of each company and their respective
stockholders and the Board of Directors of Parent has directed or will direct
that the Restated Agreement be submitted to the shareholders of Parent with the
recommendation that the Restated Agreement, including, but not limited to, the
issuance of shares of Parent Common Stock pursuant to this Restated Agreement,
be approved by the Parent's stockholders and the Boards of Directors of Web and
Acquisition Subsidiary have directed or will direct that the Merger be submitted
to their respective shareholders in accordance with the Corporation Laws.
D. The Web Shareholders own all outstanding shares of Web Common Stock,
believe that the Merger and the transactions contemplated by this Restated
Agreement are in their best interests and desire to enter into this Restated
Agreement.
E. The parties intend that the Closing will occur prior to or concurrently
with, among other actions: (i) the closing of the acquisition by Parent or a
direct or indirect subsidiary of Parent of all of the outstanding capital stock
of YPtel Corporation, a corporation incorporated under the laws of Canada (the
"COMPANY") pursuant to that certain Amended and Restated YPtel Acquisition
Agreement, a form of which has been provided by Parent to Web (the "RESTATED
COMPANY AGREEMENT"), dated as of October 26, 1999, among the Parent, the
Company, the shareholders of the Company (the "COMPANY SHAREHOLDERS"),
Xxxxxxx X. Xxxxxxxxx, Xxxxxxx X. Xxxxxx, Xxxxxx Xxxxxx, Xxxxxxx X. XxXxxxxx, The
J.L.R. Family Trust, The Paisley Family Trust, Imperial Capital Limited, a
corporation organized under the laws of the Province of Ontario ("ICL"), Cold
Trust, Global Investment Trust, Freezer Trust, Storage Trust, Directory Trust
and Publisher Trust; (ii) the closing of the acquisition by Parent or a
subsidiary of Parent of all of the outstanding capital stock of Big Stuff, Inc.
("BIG STUFF") (Web and Big Stuff are sometimes collectively referred to as
"WORLDPAGES") whether by merger, exchange or otherwise; (iii) the redemption of
the promissory notes (collectively, the "GREAT WESTERN NOTES") in the aggregate
original principal amount of Fifteen Million Dollars ($15,000,000.00) (plus
accrued but unpaid interest at the time of redemption) owed by Parent to X'Xxxx
and certain other former shareholders of Great Western Directories, Inc.
(collectively, the "GREAT WESTERN SHAREHOLDERS") by the issuance of Parent
Common Stock to the Great Western Shareholders; and (iv) the satisfaction of the
other conditions to closing set forth in this Restated Agreement, the Restated
Company Agreement and the Restated Big Stuff Agreement.
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NOW, THEREFORE, in consideration of the covenants, promises and
representations set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties agree
as follows:
ARTICLE I--TERMS OF THE MERGER
1.1 THE MERGER. Upon the terms and subject to the conditions of this
Restated Agreement, the Merger shall be consummated in accordance with the Texas
Business Corporation Act (the "TEXAS CORPORATION ACT") and the General
Corporation Law of the State of Delaware (together with the Texas Corporation
Act, the "CORPORATION LAWS"). At the Effective Time, upon the terms and subject
to the conditions of this Restated Agreement, Acquisition Subsidiary shall be
merged with and into Web in accordance with the Corporation Laws and the
separate existence of Acquisition Subsidiary shall thereupon cease, and Web, as
the surviving corporation in the Merger (the "SURVIVING CORPORATION"), shall
continue its corporate existence under the laws of the State of Texas as a
subsidiary of Parent and under the corporate name "Web YP, Inc." The Certificate
of Incorporation of Web shall be the certificate of incorporation of the
Surviving Corporation. The parties shall prepare and execute a certificate of
merger in a form to be agreed to by the parties hereto, acting reasonably (the
"CERTIFICATE OF MERGER"), in order to comply in all respects with the
requirements of the Corporation Laws and with the provisions of this Restated
Agreement.
1.2 EFFECTIVE TIME.
(a) EFFECTIVE TIME OF THIS RESTATED AGREEMENT. Despite its execution,
no term, provision, right or obligation under or pursuant to this Restated
Agreement shall be effective, unless and until the later of (i) the
execution of this Restated Agreement; and (ii) receipt by Parent's Board of
Directors from its financial advisors, PaineWebber Incorporated or such
other investment banking firm selected by Parent's Board of Directors, of a
written opinion addressed to it for inclusion in the Proxy
Statement/Prospectus to the effect that the consideration to be paid, in the
aggregate, by the Parent in the transactions contemplated by this Restated
Agreement, the Restated Company Agreement, the Restated Big Stuff Agreement,
including the lending by Xxxxxxx X'Xxxx and Xxxxxxx Xxxx to Web YP and/or
Big Stuff of up to an aggregate of Six Million Dollars ($6,000,000) and the
agreement relating to the redemption of the Great Western Notes, is fair to
Parent from a financial point of view. The parties to this Restated
Agreement are parties to that certain Web YP Acquisition Agreement dated as
of June 3, 1999 (the "JUNE 3 WEB YP AGREEMENT"). Unless and until the later
of the events described in clauses (i) and (ii) hereof occurs, the June 3
Web YP Agreement shall remain in full force and effect, subject to
termination of such agreement in accordance with its terms. Immediately upon
the execution of this Restated Agreement, as described in clause (i) above,
and the receipt by Parent's Board from its financial advisors of a written
opinion, as described in clause (ii) above, this Restated Agreement shall
become effective and the June 3 Web YP Agreement shall terminate and none of
the parties thereto shall have any obligations thereunder.
(b) EFFECTIVE TIME OF THE MERGER. The Merger shall become effective as
of the time of the filing of the Certificate of Merger with the Secretary of
State of the State of Texas and the Secretary of State of the State of
Delaware in accordance with the applicable provisions of the Corporation
Laws or at such later time as may be specified in the Certificate of Merger.
The Certificate of Merger shall be filed, and the closing of the Merger (the
"CLOSING") shall occur three (3) business days after all of the conditions
set forth in this Restated Agreement have been satisfied or waived by the
party or parties entitled to the benefit of the same; PROVIDED, HOWEVER,
that if such conditions are not satisfied or waived by January 31, 2000, the
Closing shall be automatically postponed for seven (7) days and will
continue to be postponed for continuous seven (7) day periods until
February 28, 2000, unless another time is agreed to by Parent and Web. If
such conditions are not satisfied or waived by February 28, 2000, the
Closing shall be automatically
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postponed until March 1, 1999, unless another time is agreed to in writing
by Parent and Web. The Closing shall occur at the offices of Xxxxxxxxx
Xxxxxxx Xxxxx Xxxxxx LLP, 000 Xxxxx Xxxxxx, Xxxxx 0000, Xx. Xxxxx, Xxxxxxxx
00000, unless another place is agreed to in writing by Parent and Web. The
time when the Merger shall become effective is herein referred to as the
"EFFECTIVE TIME" and the date on which the Effective Time occurs is herein
referred to as the "CLOSING DATE."
1.3 MERGER CONSIDERATION. Subject to the provisions of this Restated
Agreement and any applicable backup or other withholding requirements, each of
the issued and outstanding shares ("WEB SHARES") of common stock, no par value
per share, of Web ("WEB COMMON STOCK") as of the Effective Time shall be
converted into the right to receive, and there shall be paid and issued as
hereinafter provided, in exchange for the Web Shares, 309.0909 shares (the
"EXCHANGE RATIO") of Parent Common Stock, par value $.0001 per share ("PARENT
COMMON STOCK"), plus cash in lieu of any fractional share as hereinafter
provided (the "MERGER CONSIDERATION"). The Exchange Ratio is calculated based on
the assumption that all outstanding options and warrants to purchase Web Common
Stock will be exercised effective on or before the Closing Date. If any of such
options or warrants are not so exercised, the Exchange Ratio shall be increased
to reflect the actual number of shares of Web Common Stock issued and
outstanding as of the Closing Date; PROVIDED, HOWEVER, that Parent shall have no
obligation with respect to any such unexercised options and warrants.
No fractional shares of Parent Common Stock shall be issued pursuant to the
Merger nor will any fractional share interest involved entitle the holder
thereof to vote, to receive dividends or to exercise any other rights as a
shareholder of Parent. In lieu thereof, any Person who would otherwise be
entitled to a fractional share of Parent Common Stock pursuant to the provisions
hereof shall receive an amount in cash equal to the value of such fractional
share. The value of such fractional share for purposes hereof shall be the
product of such fraction multiplied by Five and 50/100 Dollars ($5.50).
Each share of Web Common Stock held in the treasury of Web or by a
wholly-owned subsidiary of Web shall be cancelled as of the Effective Time and
no Merger Consideration shall be payable with respect thereto. From and after
the Effective Time, there shall be no further transfers on the stock transfer
books of Web of any of the Web Shares outstanding prior to the Effective Time.
Subject to the provisions of this Restated Agreement, at the Effective Time,
all the shares of Acquisition Subsidiary common stock outstanding immediately
prior to the Merger shall be converted, by virtue of the Merger and without any
action on the part of the holder thereof, into one share of the common stock of
the Surviving Corporation (the "SURVIVING CORPORATION COMMON STOCK"), which one
share of the Surviving Corporation Common Stock shall constitute all of the
issued and outstanding capital stock of the Surviving Corporation.
1.4 STOCKHOLDERS' RIGHTS UPON MERGER. Upon consummation of the Merger, the
Certificates shall cease to represent any rights with respect thereto, and,
subject to applicable Law (as hereinafter defined) and this Restated Agreement,
the Certificates shall only represent the right to receive the Merger
Consideration including the amount of cash, if any, payable in lieu of
fractional shares of Parent Common Stock into which the Web Shares have been
converted pursuant to this Restated Agreement.
1.5 SURRENDER AND EXCHANGE OF SHARES. At the Effective Time, each holder
of a Web Share shall surrender and deliver the Certificates and transmittal
letter (the "LETTER OF TRANSMITTAL") to Continental Stock Transfer and Trust
Company. Upon such surrender and delivery, the holder shall receive a
certificate representing the number of whole shares of Parent Common Stock into
which such holder's Web Shares have been converted pursuant to this Restated
Agreement plus the amount of cash payable in lieu of any fractional share. Until
so surrendered and exchanged, each outstanding Certificate after the Effective
Time shall be deemed for all purposes to evidence the right to receive that
number of whole shares of Parent Common Stock into which the Web Shares have
been converted pursuant to this Restated Agreement, plus the amount of cash
payable in lieu of any fractional share;
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PROVIDED, HOWEVER, that no dividends or other distributions, if any, in respect
of the shares of Parent Common Stock, declared after the Effective Time and
payable to holders of record after the Effective Time, shall be paid to the
holders of any unsurrendered Certificates until such Certificates and Letters of
Transmittal are surrendered and delivered as provided herein. Subject to
applicable Law, after the surrender and exchange of the Certificates, the record
holders thereof will be entitled to receive any such dividends or other
distributions without interest thereon, which theretofore have become payable
with respect to the number of shares of Parent Common Stock for which such
Certificates were exchangeable. Holders of any unsurrendered Certificates shall
not be entitled to vote Parent Common Stock until such Certificates are
exchanged pursuant to this Restated Agreement.
1.6 DIRECTORS. Immediately following the Closing Date, the Board of
Directors of the Parent shall be restructured to be composed of eight (8)
members as follows: (i) one director chosen by Parent and one director chosen by
ICL to serve three (3) year terms; (ii) one director chosen by Parent and one
director chosen by ICL and one director to be agreed to by Parent, ICL and
WorldPages to serve two (2) year terms; and (iii) one director chosen by Parent
and one director chosen by ICL and one director to be agreed to by Parent, ICL
and WorldPages to serve one (1) year terms. Parent currently intends to nominate
Xxxxxxx X'Xxxx and two (2) individuals to be named at or prior to Closing. The
directors to be nominated by ICL are currently anticipated to be Xxxxxx
Xxxxxxxx, Xxxxxx Xxxxxxxx and Xxxxxx Xxxxx. In addition, for a period of one (1)
year following the Closing Date, each of Parent and ICL may designate one party
to attend any and all Board of Directors meetings, as non-voting,
non-participating observers only (the "OBSERVERS"). Parent shall reimburse the
Observers for those expenses incurred in connection with attending Board of
Directors meetings, including travel expenses, in the same manner and to the
same extent that Parent reimburses its directors for such expenses. The parties
hereto expressly acknowledge and agree that this SECTION 1.6 is not intended to,
and does not, except with regard to the initial Board of Directors of Parent
referenced in this SECTION 1.6, impose any requirement that the Board of
Directors of Parent be comprised of the individuals listed in this SECTION 1.6
or that any Person has a right to designate a certain individual or a certain
number of individuals as nominees to the Board of Directors of Parent.
1.7 BYLAWS. At and after the Effective Time, the Bylaws of Acquisition
Subsidiary in effect at the Effective Time shall be the Bylaws of the Surviving
Corporation (subject to any subsequent amendment).
1.8 OTHER EFFECTS OF MERGER. The Merger shall have all further effects as
specified in the applicable provisions of the Corporation Laws.
1.9 TAX-FREE REORGANIZATION. The parties intend that the Merger qualify as
a tax-free reorganization pursuant to Section 368 of the Code. The parties
hereto hereby adopt this Restated Agreement as a "plan of reorganization" within
the meaning of Sections 1.368-2(g) and 1.368(a) of the Treasury regulations.
1.10 CONVERTIBLE NOTE. At any time between the date hereof and Closing,
X'Xxxx and Xxxx may continue to lend up to Six Million Dollars ($6,000,000) to
Web or Big Stuff pursuant to a "CONVERTIBLE NOTE", described below. The
Convertible Note includes amounts lent by X'Xxxx and Xxxx to Web or Big Stuff
since January 1, 1999. The Convertible Note will provide additional working
capital required by Web or Big Stuff (i) to consummate the contemplated
contractual arrangements with Excite and to fulfill its obligations thereunder,
(ii) to pay for extraordinary capital expenditures approved in advance by a
disinterested majority of the Board of Directors of the Parent, including
consummation of contractual arrangements with other entities similar to those
with Excite, or (iii) for working capital purposes, including for ordinary
capital expenditures. The conversion feature of the Convertible Note shall
provide that the principal amount of the Convertible Note, but not the accrued
but unpaid interest, shall be automatically converted into Parent common stock
at Closing at a conversion price of $5.50 per share. If the acquisition of
WorldPages contemplated by this Restated Agreement and the
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Restated Big Stuff Agreement shall not be consummated, the conversion feature
shall not be operable, and Parent shall have no obligations under the
Convertible Note. The parties agree that notwithstanding anything herein or in
the Restated Big Stuff Agreement to the contrary, there shall be no "doubling"
of the amount which may be lent by X'Xxxx and Xxxx to Web or Big Stuff and that
an aggregate maximum amount of $6,000,000 may be lent by X'Xxxx and Xxxx to Web
and Big Stuff, collectively.
1.11 ADDITIONAL ACTIONS. If, at any time after the Effective Time, the
Surviving Corporation shall consider or be advised that any deeds, bills of
sale, assignments, assurances or any other actions or things are necessary or
desirable to vest, perfect or confirm or record or otherwise in the Surviving
Corporation its right, title or interest in, to or under any of the rights,
properties or assets of Acquisition Subsidiary or Web or otherwise to carry out
this Restated Agreement, the officers and directors of the Surviving Corporation
shall be authorized to execute and deliver, in the name and on behalf of
Acquisition Subsidiary or Web, all such deeds, bills of sale, assignments and
assurances and to take and do, in the name and on behalf of Acquisition
Subsidiary or Web, all such other actions and things as may be necessary or
desirable to vest, perfect or confirm any and all right, title and interest in,
to and under such rights, properties or assets in the Surviving Corporation or
otherwise to carry out this Restated Agreement.
ARTICLE II--REPRESENTATIONS AND WARRANTIES OF
WEB AND THE WEB SHAREHOLDERS
Web, on behalf of itself and the Web Shareholders, jointly and severally
represent and warrant to and covenant with Parent as follows:
2.1 ORGANIZATION AND GOOD STANDING. Web is a corporation duly organized
and validly existing and in good standing under the laws of the jurisdiction of
its incorporation or organization and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted. Web is duly qualified or licensed and in good standing
to do business in each jurisdiction in which the character of the property
owned, leased or operated by it or the nature of the business conducted by it
makes such qualification or licensing necessary, except where the failure to be
so duly qualified or licensed and in good standing would not have a Web Material
Adverse Effect. SCHEDULE 2.1 sets forth a complete and accurate list of the
jurisdictions of incorporation or organization and qualification or license of
Web. Web has heretofore delivered to Parent accurate and complete copies of the
Certificates or Articles of Incorporation and Bylaws, or equivalent governing
instruments, as currently in effect, of Web.
2.2 CAPITALIZATION. As of the date hereof, the authorized capital stock of
Web (the "WEB STOCK") consists of 10,000 shares of common stock. As of the date
hereof, (a) 6,086 shares of Web Stock were issued and outstanding, and
(b) 3,914 shares of Web Stock were issuable upon exercise of outstanding
warrants and options (after giving effect to the acceleration of vesting to be
triggered by the transactions contemplated by this Restated Agreement). No other
capital stock of Web is issued or outstanding. All issued and outstanding shares
of the Web Stock are duly authorized, validly issued, fully paid and
non-assessable and were issued free of preemptive rights and in compliance with
applicable corporate and securities Laws. Except as set forth on SCHEDULE 2.2,
as of the date of this Restated Agreement there are no outstanding rights,
reservations of shares, subscriptions, warrants, puts, calls, unsatisfied
preemptive rights, options or other agreements of any kind relating to any of
the capital stock or any other security of Web, and there is no authorized or
outstanding security of any kind convertible into or exchangeable for any such
capital stock or other security. There are no restrictions upon the transfer of
or otherwise pertaining to the securities (including, but not limited to, the
ability to pay dividends thereon) or retained earnings of Web or the ownership
thereof other than those, if any, described on SCHEDULE 2.2 or those imposed
generally by the Securities Act, the Securities Exchange Act, applicable state
or foreign securities Laws or applicable corporate Law.
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2.3 SUBSIDIARIES. Web does not and will not, from the date of this
Restated Agreement until the Closing Date, hold, directly or indirectly, any
capital stock or other interest in any Person.
2.4 AUTHORIZATION; BINDING AGREEMENT. Web and the Web Shareholders have
all requisite power and authority to execute and deliver this Restated Agreement
and the Web Transaction Agreements and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this Restated
Agreement and the other agreements and documents referred to herein and to be
executed in connection herewith to which Web or any Web Shareholder is or will
be a party or a signatory (the "WEB TRANSACTION AGREEMENTS") and the
consummation of the transactions contemplated hereby and thereby including, but
not limited to the Merger, have been or will be duly and validly authorized by
Web's Board of Directors and no other corporate or other proceedings on the part
of Web or any Web Shareholder are necessary to authorize the execution and
delivery of this Restated Agreement and the Web Transaction Agreements or to
consummate the transactions contemplated hereby or thereby (other than the
adoption of this Restated Agreement by the Web Shareholders in accordance with
the Texas Corporation Act and the Articles of Incorporation and Bylaws of Web).
This Restated Agreement has been duly and validly executed and delivered by Web
and the Web Shareholders and constitutes, and upon execution and delivery
thereof as contemplated by this Restated Agreement, the Web Transaction
Agreements will constitute, the legal, valid and binding obligations of Web and
the Web Shareholders, enforceable against Web and the Web Shareholders in
accordance with its and their respective terms, except to the extent that
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors'
rights generally and by principles of equity regarding the availability of
remedies (collectively, the "ENFORCEABILITY EXCEPTIONS").
2.5 GOVERNMENTAL APPROVALS. No consent, approval, waiver or authorization
of, notice to or declaration or filing with ("CONSENT") any Governmental
Authority on the part of Web or any of the Web Shareholders is required in
connection with the execution or delivery by Web or the Web Shareholders of this
Restated Agreement and the Web Transaction Agreements or the consummation by Web
or the Web Shareholders of the transactions contemplated hereby or thereby other
than (i) the filing of the Certificate of Merger with the Secretary of State of
the States of Texas and Delaware; (ii) filings with the SEC and state securities
laws administrators, (iii) Consents from or with Governmental Authorities set
forth on SCHEDULE 2.5, (iv) filings under the HSR Act, and (v) those Consents
that, if they were not obtained or made, do not or would not have a Web Material
Adverse Effect.
2.6 NO VIOLATIONS. The execution and delivery of this Restated Agreement
and the Web Transaction Agreements, the consummation of the transactions
contemplated hereby and thereby and compliance by Web and the Web Shareholders
with any of the provisions hereof or thereof will not (i) conflict with or
result in any breach of any provision of the Certificate and/or Articles of
Incorporation or Bylaws or other governing instruments of Web, (ii) except as
set forth on SCHEDULE 2.6, require any Consent under or result in a violation or
breach of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, cancellation or acceleration
or augment the performance required) under any of the terms, conditions or
provisions of any Web Material Contract or other obligation to which Web or any
Web Shareholder is a party or by which any of them or any of their properties or
assets may be bound, (iii) result in the creation or imposition of any lien or
encumbrance of any kind upon any of the assets of Web or (iv) subject to
obtaining the Consents from Governmental Authorities referred to in SECTION 2.5
above, contravene any Law currently in effect to which Web or any Web
Shareholder or its or any of its respective assets or properties are subject,
except in the case of clauses (ii), (iii) and (iv) above, for any deviations
from the foregoing which do not or would not have a Web Material Adverse Effect.
2.7 LITIGATION. Except as set forth in SCHEDULE 2.7, there is no action,
cause of action, claim, demand, suit, proceeding, citation, summons, subpoena,
inquiry or investigation of any nature, civil,
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criminal, regulatory or otherwise, in law or in equity, by or before any court,
tribunal, arbitrator, mediator or other Governmental Authority ("LITIGATION")
pending or, to the knowledge of the Web Shareholders or Web, threatened against
Web or any officer, director, employee or agent thereof, in his or her capacity
as such, or as a fiduciary with respect to any Benefit Plan of Web, or otherwise
relating, in a manner that could have a Web Material Adverse Effect, to Web or
the securities of Web, or any properties or rights of Web or that could prevent
or delay the consummation of the transactions contemplated by this Restated
Agreement.
2.8 WEB FINANCIAL STATEMENTS. The audited financial statements of Web as
of and for the fiscal year ended December 31, 1998, and the unaudited financial
statements of Web as of and for the six months ended June 30, 1999 (the "WEB
FINANCIAL STATEMENTS") have been provided to Parent. The Web Financial
Statements were prepared in accordance with generally accepted accounting
principles applicable to the business of Web consistently applied in accordance
with past accounting practices and fairly present (including, but not limited
to, the inclusion of all adjustments with respect to interim periods which are
necessary to present fairly the financial condition and assets and liabilities
or the results of operations of Web except as may be indicated therein or in the
notes thereto, subject to normal year-end adjustment in the ordinary course with
respect to certain items immaterial in amount or effect and the exclusion of
footnote disclosure in interim Web Financial Statements) the financial condition
and assets and liabilities or the results of operations of Web as of the dates
and for the periods indicated. Except as reflected in the Web Financial
Statements, as of their respective dates, Web did not have any debts,
obligations, guaranties of obligations of others or liabilities (contingent or
otherwise) that would be required in accordance with generally accepted
accounting principles to be disclosed in the Web Financial Statements.
2.9 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in
SCHEDULE 2.9, since June 30, 1999, through the date of this Restated Agreement,
there has not been: (i) any Event that could reasonably be expected to have a
Web Material Adverse Effect; (ii) any declaration, payment or setting aside for
payment of any dividend (except to the Web Shareholders, but only if the entire
amount of such dividend is paid to Big Stuff as a capital contribution) or other
distribution or any redemption, purchase or other acquisition of any shares of
capital stock or securities of Web; (iii) any return of any capital or other
distribution of assets to stockholders of Web (except to Web or a subsidiary
wholly owned by Web); (iv) other than in the ordinary course of business any
investment of a capital nature by Web by the purchase of any property or assets
except to the extent such investment is in the ordinary course of business and
is individually or in the aggregate, not in excess of $75,000; (v) any
acquisition (by merger, consolidation, acquisition of stock or assets or
otherwise) of any Person or business; (vi) any sale, disposition, pledge,
mortgage or other transfer of assets or properties of Web other than in the
ordinary course of business consistent with past practice; (vii) any action or
agreement or undertaking by Web to take any action that, if taken or done on or
after the date hereof, would result in a breach of SECTION 6.6 below;
(viii) any employment, severance or consulting agreement entered into by Web
with any stockholder, officer, director, agent, employee or consultant of Web or
any amendment or modification to, or termination of, any current employment,
severance or consulting agreement to which Web is a party or by which it is
bound; (ix) any forgiveness, cancellation, compromise, settlement, waiver or
release of any debts, claims, rights or Litigation, in each case in excess,
individually or in the aggregate, of $25,000; (x) any agreement, authorization
or commitment to take, whether in writing or otherwise, any action which, if
taken prior to the date hereof, would have made any representation or warranty
of Web in this Restated Agreement untrue or incorrect in any material respect;
(xi) any failure by Web to conduct its business in the ordinary course
consistent with past practice, it being understood, however, that Web has
accelerated and intensified its business activities since March 31, 1999,
including a payment in the amount of $3,500,000 to be made to Excite.
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2.10 COMPLIANCE WITH LAWS. The business of Web has been operated in
compliance with all Laws applicable thereto, except for any instances of
non-compliance which do not and would not have a Web Material Adverse Effect.
2.11 PERMITS. (i) Web has all permits, certificates, licenses, approvals,
and other authorizations required in connection with the operation of its
business (collectively, "WEB PERMITS"), (ii) Web is not in violation of any Web
Permit, and (iii) no proceedings are pending or, to the knowledge of Web,
threatened, to revoke or limit any Web Permit, except, in the case of
clause (i) or (ii) above, those the absence or violation of which do not and
would not have a Web Material Adverse Effect.
2.12 FINDERS AND INVESTMENT BANKERS. Neither Web nor any of its officers
or directors has employed any broker or finder or incurred any liability for any
brokerage fees, commissions or finders' fees in connection with the transactions
contemplated hereby.
2.13 CONTRACTS. Except as set forth in SCHEDULE 2.13, Web is not a party
or subject to any material note, bond, mortgage, indenture, contract, lease,
license, agreement, understanding, instrument, bid or proposal ("WEB MATERIAL
CONTRACT"). For purposes of this SECTION 2.13, a note, bond, mortgage,
indenture, contract, lease, license, agreement, understanding, instrument, bid
or proposal shall be considered a Web Material Contract (a) if it is with an
affiliate of Web, (b) if the financial obligation of Web thereunder or, if
applicable, to the assets or properties of Web could exceed $25,000 after the
Closing Date, or (c) if it provides for any exclusivity or non-competition
restrictions applicable to Web. Web has made available to Parent true and
accurate copies of the Web Material Contracts. All such Web Material Contracts
are valid and binding and are in full force and effect and enforceable in
accordance with their respective terms, subject to the Enforceability
Exceptions. Any and all transactions between or involving Web and an affiliate
thereof were entered into in the ordinary course of business and are upon fair
and reasonable terms not materially less favorable than Web could obtain or
become entitled to in an arm's-length transaction with a Person that is not an
affiliate. Except as set forth in SCHEDULE 2.5 (i) no Consent of any Person is
needed in order that each such Web Material Contract shall continue in full
force and effect in accordance with its terms without penalty, acceleration or
rights of early termination by reason of the consummation of the transactions
contemplated by this Restated Agreement, and (ii) Web is not in material
violation or breach of or default under any such Web Material Contract, nor to
Web's knowledge is any other party to any such Web Material Contract in material
violation or breach of or default under any such Web Material Contract.
2.14 EMPLOYEE BENEFIT PLANS. Except as set forth in SCHEDULE 2.14, there
are no Benefit Plans (as defined below) maintained or contributed to by Web
under which Web could incur any liability. A "BENEFIT PLAN" shall mean (i) an
employee benefit plan as defined in Section 3(3) of the ERISA, even if, because
of some other provision of ERISA, such plan is not subject to any or all of
ERISA's provisions, and (ii) whether or not described in the preceding clause,
(a) any pension, profit sharing, stock bonus, deferred or supplemental
compensation, retirement, thrift, stock purchase or stock option plan, or any
other compensation, welfare, insurance, medical, hospitalization, fringe benefit
or retirement plan, program, policy, course of conduct, understanding or
arrangement of any kind whatsoever, whether formal or informal, oral or written,
providing for benefits for or the welfare of any or all of the current or former
employees or agents of Web or their beneficiaries or dependents, (b) a
multi-employer plan as defined in Section 3(37) of ERISA (a "MULTI-EMPLOYER
PLAN") or in any other applicable Law, or (c) a multiple employer plan as
defined in Section 413 of the Code or in any other applicable Law.
With respect to each Benefit Plan (where applicable): Web has made available
to Parent complete and accurate copies of (i) all plan and trust texts and
agreements, insurance contracts and other funding arrangements; (ii) annual
reports on the Form 5500 series for the last three (3) years; (iii) financial
statements and/or annual and periodic accountings of plan assets for the last
three
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(3) years; (iv) the most recent determination letter received from the IRS;
(v) actuarial valuations for the last three (3) years; and (vi) the most recent
summary plan description as defined in ERISA.
No Web Benefit Plan is a defined benefit pension plan subject to Title IV of
ERISA or Section 412 of the Code. Each of the Web Benefit Plans has been
maintained in compliance with its terms and all applicable Law, except where the
failure to do so would not result in a Web Material Adverse Effect or a
Surviving Corporation Material Adverse Effect. Web does not contribute to, and
does not have any outstanding liability with respect to, any Multi-employer
Plan.
Except as set forth in SCHEDULE 2.14, the consummation of the Merger will
not, either alone or in conjunction with another Event: (i) entitle any
individual to severance pay, or (ii) accelerate the time of payment or vesting
of benefits or increase the amount of compensation due to any individual.
2.15 TAXES AND RETURNS.
(a) Except as disclosed in SCHEDULE 2.15, Web has timely filed, or
caused to be timely filed, all federal, state, local and foreign income,
gross receipts, sales, use, property, production, payroll, franchise,
withholding, employment, social security, license, excise, transfer, gains,
and other tax returns or reports required to be filed by it, and has paid,
collected or withheld, or caused to be paid, collected or withheld, all
taxes and governmental charges, assessments and contributions of any nature
whatsoever including, but not limited to, any related penalties, interest
and liabilities (any of the foregoing being referred to herein as a "TAX"),
required to be paid, collected or withheld, other than such Taxes for which
adequate reserves in the Web Financial Statements have been established or
which are being contested in good faith and have been disclosed in writing
to Parent prior to the date of this Restated Agreement. Except as set forth
in SCHEDULE 2.15, there are no claims or assessments pending against Web for
any alleged deficiency in any Tax, and Web does not know of any threatened
Tax claims or assessments against Web (other than those for which adequate
reserves in the Web Financial Statements have been established or which are
being contested in good faith and have been disclosed in writing to Parent
prior to the date of this Restated Agreement). Except as set forth in
SCHEDULE 2.15, Web has not made an election under Section 338 of the Code
and has not taken any action that would result in any Tax liability of Web
as a result of a deemed election within the meaning of Section 338 of the
Code. Except as set forth in SCHEDULE 2.15, Web does not have any waivers or
extensions of any applicable statute of limitations to assess any Taxes.
Except as set forth in SCHEDULE 2.15, there are no outstanding requests by
Web for any extension of time within which to file any return or within
which to pay any Taxes shown to be due on any return. Web (i) has elected to
be treated as, and from the date of such election until the date hereof has
met, and currently meets, the eligibility requirements for treatment as, an
"S" corporation under the Code; and (ii) as of the date hereof, has no
subsidiaries for Tax purposes.
(b) A listing of all Tax sharing agreements or similar arrangements with
respect to or involving Web is set forth in SCHEDULE 2.15.
(c) Except as set forth in SCHEDULE 2.15, Web has not made or become
obligated to make, or will, as a result of the transactions contemplated by
this Restated Agreement, make or become obligated to make, any "excess
parachute payment" as defined in Section 280G of the Code (without regard to
subsection (b)(4) thereof).
(d) Web has disclosed on its federal income tax returns all positions
taken therein that could give rise to a substantial understatement of
federal income tax liability within the meaning of Section 6662(d) of the
Code.
(e) There are no liens for Taxes on the assets of Web except for
statutory liens for current Taxes not yet due and payable.
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(f) All elections with respect to Taxes affecting Web are set forth in
SCHEDULE 2.15 or, with respect to elections made on or before December 31,
1996, are reflected in the Tax returns of Web filed and provided to Parent
prior to the date of this Restated Agreement. Web has not: (i) made and will
not make a deemed dividend election under Treas. Reg. Section
1.1502-32(f)(2) or a consent dividend election under Section 565 of the
Code; (ii) consented at any time under Section 341(f)(l) of the Code to have
the provisions of Section 341(f)(2) of the Code apply to any disposition of
the assets of Web; (iii) agreed, and is not required, to make any adjustment
under Section 481(a) of the Code by reason of a change in accounting method
or otherwise; (iv) made an express election, and is not required, to treat
any asset of Web as owned by another Person for federal income Tax purposes
or as tax-exempt bond financed property or tax-exempt use property within
the meaning of Section 168 of the Code; (v) made any of the foregoing
elections and is not required to apply any of the foregoing rules under any
comparable state, foreign or local income Tax provision.
(g) Except as set forth in SCHEDULE 2.15, Web is not a partner or member
in any joint venture, partnership, limited liability company or other
arrangement or contract that is or could be treated as a partnership for
federal income Tax purposes.
(h) Except as set forth in SCHEDULE 2.15, Web is not a party to or
otherwise subject to any arrangement having the effect of or giving rise to
the recognition of a deduction or loss before the Closing Date and a
corresponding recognition of taxable income or gain after the Closing Date,
or any other arrangement that would have the effect of or give rise to the
recognition of taxable income or gain by Web after the Closing Date without
the receipt of or entitlement to a corresponding amount of cash.
2.16 LIABILITIES. From June 30, 1999, through the date of this Restated
Agreement, except as expressly disclosed in SCHEDULE 2.16 or in the Web
Financial Statements, Web does not have any direct or indirect indebtedness,
liability, claim, loss, damage, deficiency, obligation or responsibility, fixed
or unfixed, xxxxxx or inchoate, liquidated or unliquidated, secured or
unsecured, accrued, absolute, contingent or otherwise, whether or not of a kind
required by generally accepted accounting principles to be set forth in a
financial statement, other than those incurred in the ordinary course of
business or in an amount not in excess of $25,000 individually or $100,000 in
the aggregate. Except as set forth on SCHEDULE 2.16 or in the Web Financial
Statements, as of the date of this Restated Agreement, Web is not subject to any
(i) obligations in respect of borrowed money, (ii) obligations evidenced by
bonds, debentures, notes or other similar instruments, (iii) obligations which
would be required by generally accepted accounting principles to be classified
as "capital leases," (iv) obligations to pay the deferred purchase price of
property or services, except trade accounts payable arising in the ordinary
course of business and payable not more than twelve (12) months from the date of
incurrence, and (v) guaranties of any obligations of any other Person.
2.17 ENVIRONMENTAL MATTERS. As of the date of this Restated Agreement,
(i) except where the failure to so comply will not have a Web Material Adverse
Effect, Web is in compliance with all applicable Environmental Laws (as
hereinafter defined), (ii) there is no civil, criminal or administrative
judgment, action, suit, demand, claim, hearing, notice of violation,
investigation, proceeding, notice or demand letter pending or, to the knowledge
of Web, threatened against Web or any of its properties pursuant to
Environmental Laws, and (iii) except as set forth on SCHEDULE 2.17, there are no
past or present Events which reasonably may be expected to prevent compliance
with, or which have given rise to or which reasonably may be expected to give
rise to liability on the part of Web under Environmental Laws, except for those
which would not reasonably be expected to give rise to a Web Material Adverse
Effect. As used herein the term "ENVIRONMENTAL LAWS" shall mean Laws relating to
pollution, waste control, the generation, presence or disposal of asbestos,
hazardous or toxic wastes or substances, the protection of the environment,
environmental activity or public health and safety.
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2.18 INTELLECTUAL PROPERTY; FICTITIOUS NAMES. For purposes of this
Restated Agreement, "INTELLECTUAL PROPERTY" shall mean all patents, trademarks,
service marks, trade names, copyrights, franchises and similar rights of or used
by Web, all applications for any of the foregoing and all permits, grants and
licenses or other rights running to or from Web relating to any of the
foregoing. Except as set forth on SCHEDULE 2.18, (i) Web owns, or is licensed
to, or otherwise has, the full right to use all Intellectual Property currently
used or proposed to be used in its business, (ii) Web has not received, as of
the date of this Restated Agreement, notice of any charge or claim of any Person
relating to such Intellectual Property or any process or confidential
information of Web ("IP CLAIM NOTICE") and does not know of any basis for any
such charge or claim, and Web has sufficient rights in the Intellectual Property
to use it in the manner currently used or proposed to be used in its business,
and (iii) Web and its corporate predecessors, if any, have not conducted
business at any time during the period beginning five (5) years prior to
June 3, 1999 under any corporate, trade or fictitious names other than their
current corporate names. Web shall promptly notify Parent of any IP Claim Notice
received by Web after the date of this Restated Agreement.
2.19 REAL ESTATE.
(a) Web owns no real property.
(b) SCHEDULE 2.19(b) sets forth a true, correct and complete schedule as
of the date of this Restated Agreement of all material leases, subleases,
easements, rights-of-way, licenses or other agreements under which Web uses
or occupies, or has the right to use or occupy, now or in the future, any
real property or improvements thereon (the "WEB REAL PROPERTY LEASES").
Except for the matters listed on said SCHEDULE 2.19(b), Web holds the
leasehold estate under or other interest in each Web Real Property Lease
free and clear of all liens, encumbrances and other rights of occupancy
other than statutory landlords' or mechanics' liens which have not been
executed upon.
2.20 CORPORATE RECORDS. The corporate record books of or relating to Web
made available to Parent by Web contain accurate and complete records of
(i) all corporate actions of the stockholders and directors (and committees
thereof) of Web, (ii) the Certificate and/or Articles of Incorporation, Bylaws
and/or other governing instruments, as amended, of Web, and (iii) the issuance
and transfer of stock of Web. Except as set forth on SCHEDULE 2.20, Web does not
have any of its material records or information recorded, stored, maintained or
held off the premises of Web.
2.21 TITLE TO AND CONDITION OF PERSONAL PROPERTY. Web has good and
marketable title to, or a valid leasehold interest in, all material items of any
personal property reflected in the Web Financial Statements dated June 30, 1999,
or currently used in the operation of its business, and such property or
leasehold interests are free and clear of all liens, claims, charges, security
interests, options, or other title defects or encumbrances, except for property
disposed of in the ordinary course since the date thereof consistent with the
provisions of SECTION 2.9 above, and such exceptions to title and liens, claims,
charges, security interests, options, title defects or encumbrances which do not
and would not have a Web Material Adverse Effect. As of the date of this
Restated Agreement, all such personal property is in good operating condition
and repair (ordinary wear and tear excepted), is suitable for the use to which
the same is customarily put by Web, is free from material defects and is of a
quality and quantity presently usable in the ordinary course of the operation of
the business of Web, except where such failure would not have a Web Material
Adverse Effect.
2.22 NO ADVERSE ACTIONS. Except as set forth on SCHEDULE 2.22, there is no
existing, pending or, to the knowledge of Web, threatened termination,
cancellation, limitation, modification or change in the business relationship of
Web, with any supplier, customer or other Person except as are immaterial
individually and in the aggregate and are in the ordinary course of business.
None of Web, or, to the knowledge of Web or any Web Shareholder, any director,
officer, agent, employee or other Person acting on behalf of Web or any Web
Shareholder has used any corporate funds for unlawful
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contributions, payments, gifts, entertainment or other unlawful expenses
relating to political activity, or made any direct or indirect unlawful payments
to governmental or regulatory officials or others.
2.23 LABOR MATTERS. Except as may be set forth on SCHEDULE 2.13 or 2.23,
Web does not have any obligations, contingent or otherwise, under any
employment, severance or consulting agreement, collective bargaining agreement
or other contract with a labor union or other labor or employee group. To the
knowledge of Web or any Web Shareholder, as of the date of this Restated
Agreement, there are no efforts presently being made or threatened by or on
behalf of any labor union with respect to the unionizing of employees of Web. As
of the date of this Restated Agreement, there is no claim by an employee, an
employee group, a labor union or other labor group or a Governmental Authority
against Web pending or, to the knowledge of Web or any Web Shareholder,
threatened before the National Labor Relations Board or any other court or
tribunal respecting employment and employment practices, terms and conditions of
employment, termination of employment or the compliance with any legislation
concerning labor matters, including, without limiting the generality of what
precedes, labor relations, occupational health and safety, minimum labor
standards, industrial accidents and occupational diseases; there is no labor
strike, dispute, slowdown or stoppage pending or, to the knowledge of Web or any
Web Shareholder, threatened against or involving Web; no representation question
exists respecting the employees of Web; no grievance or internal or informal
complaint exists, no arbitration proceeding arising out of or under any
collective bargaining agreement is pending and no claim therefor has been
asserted. As of the date of this Restated Agreement, there has not been any
material adverse change in relations with employees or agents of Web as a result
of any announcement of the transactions contemplated by this Restated Agreement.
Web shall promptly notify Parent upon knowledge by Web or any Web Shareholder of
the occurrence after the date hereof of any matter referenced in this
SECTION 2.23.
2.24 INSURANCE. Web has obtained and maintains in full force and effect
insurance with responsible and reputable insurance companies or associations in
such amounts, on such terms and covering such risks, including fire and other
risks insured against by extended coverage, public liability insurance and
insurance against claims for personal injury or death or property damage
occurring in connection with the activities of Web or any properties owned,
occupied or controlled by it, as is customary and prudent. Since January 1,
1997, Web has not received notice of default under, or intended cancellation or
nonrenewal of, any policies of insurance, and Web has not been refused any
insurance coverage by an insurance carrier to which it has applied for
insurance.
2.25 DISCLOSURE. All information and documents provided prior to the date
of this Restated Agreement, and all information and documents subsequently
provided, to Parent or its representatives or lenders by or on behalf of Web in
connection with the transactions contemplated by this Restated Agreement are or
contain, or will be or will contain as to subsequently provided information or
documents, true, accurate and complete information in all material respects with
respect to the subject matter thereof and are, or will be as to subsequently
provided information or documents, reasonably responsive to any specific request
made by or on behalf of Parent or its representatives or lenders.
2.26 TAX. Neither Web nor the Web Shareholders know of any fact or have
taken any action, in each case with respect to Web or the Web Shareholders, that
could be reasonably expected to prevent the transaction contemplated hereby from
qualifying as a tax-free reorganization pursuant to Section 368 of the Code.
2.27 YEAR 2000 COMPLIANCE. Except as set forth in SCHEDULE 2.27 attached
hereto, Web has taken all commercially reasonable and prudent measures designed
to make all material aspects of Web's operations Year 2000 Compliant, to the
extent within Web's control. As used in this section, "YEAR 2000 COMPLIANT"
shall mean that any and all computer hardware including but not limited to
mainframe computers, personal computers, servers and related equipment),
computer software, programming languages, code, electronic applications and
systems (including but not limited to LANs, WANs, inter/
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intranet systems and client/server systems), programs, files, databases, chips,
microprocessors and any and all electronic or mechanical functionalities in any
way used in connection with, relied upon or relating to a specified subject
matter (e.g., a business, product or service) accurately and completely process
(in the manner intended, including but not limited to calculating, comparing and
sequencing) on a timely basis any and all data which are in any way dependent
upon usage of calendar dates, including but not limited to dates on or after
January 1, 2000, or time.
ARTICLE III--REPRESENTATIONS AND WARRANTIES
OF PARENT
Parent represents and warrants to and covenants with Web as follows:
3.1 ORGANIZATION AND GOOD STANDING. Parent is a corporation duly organized
and validly existing under the laws of the State of Delaware and has all
requisite corporate power and authority to own, lease and operate its properties
and to carry on its business as now being conducted. Each of the Active Parent
Subsidiaries is a corporation, duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or organization
and has all requisite corporate, power and authority to own, lease and operate
its properties and to carry on its business as now being conducted, except where
the failure to be so duly organized, validly existing and in good standing or to
have such power and authority would not have a Parent Material Adverse Effect.
Parent and each of the Active Parent Subsidiaries is duly qualified or licensed
and in good standing to do business in each jurisdiction in which the character
of the property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification or licensing necessary, except where
the failure to be so duly qualified or licensed and in good standing would not
have a Parent Material Adverse Effect. SCHEDULE 3.1 sets forth a complete and
accurate list of the jurisdictions of incorporation or organization and
qualifications or licenses of Parent and the Active Parent Subsidiaries. Parent
has heretofore made available to Web accurate and complete copies of the
Certificates or Articles of Incorporation and Bylaws, or equivalent governing
instruments, as currently in effect, of Parent and each of the Active Parent
Subsidiaries.
3.2 CAPITALIZATION. As of the date hereof, the authorized capital stock of
Parent consists of 180,000,000 shares of Parent Common Stock and 20,000,000
shares of preferred stock, par value $0.0001 per share. As of the opening of
business on the date of this Restated Agreement, (a) 20,083,953 shares of Parent
Common Stock were outstanding; (b) no shares of Parent preferred stock were
issued and outstanding; and (c) 163,307 shares of Parent Common Stock were held
as treasury shares. No other capital stock of Parent is issued or outstanding.
All issued and outstanding shares of the Parent Common Stock are duly
authorized, validly issued, fully paid and non-assessable and were issued free
of preemptive rights and in compliance with applicable corporate and securities
Laws. Except as set forth in the Parent Securities Filings or on SCHEDULE 3.2,
as of the date of this Restated Agreement there are no outstanding rights,
reservations of shares, subscriptions, warrants, puts, calls, unsatisfied
preemptive rights, options or other agreements of any kind relating to any of
the capital stock or any other security of Parent, and there is no authorized or
outstanding security of any kind convertible into or exchangeable for any such
capital stock or other security. There are no restrictions upon the transfer of
or otherwise pertaining to the securities (including, but not limited to, the
ability to pay dividends thereon) or retained earnings of Parent and the Active
Parent Subsidiaries or the ownership thereof other than those pursuant to the
Parent Guaranty, the Great Western Credit Agreement or those imposed generally
by the Securities Act, the Securities Exchange Act, applicable state or foreign
securities Laws or applicable corporate Law.
3.3 SUBSIDIARIES. Except as set forth on SCHEDULE 3.3, all of the capital
stock and other interests of the Active Parent Subsidiaries held by Parent are
owned by it or a Parent subsidiary, free and clear of any claim, lien,
encumbrance, security interest or agreement with respect thereto. All of the
outstanding shares of capital stock in each of the Active Parent Subsidiaries
held directly or indirectly
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by Parent are duly authorized, validly issued, fully paid and non-assessable and
were issued free of preemptive rights and in compliance with applicable
corporate and securities Laws.
3.4 AUTHORIZATION; BINDING AGREEMENT. Parent and Acquisition Subsidiary
have all requisite corporate power and authority to execute and deliver this
Restated Agreement and the Parent Transaction Agreements and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Restated Agreement and the other agreements and documents referred to herein and
to be executed in connection herewith to which Parent or Acquisition Subsidiary
is or will be a party or a signatory (the "PARENT TRANSACTION AGREEMENTS") and
the consummation of the transactions contemplated hereby and thereby have been
duly and validly authorized by the respective Boards of Directors of Parent and
Acquisition Subsidiary, as appropriate, and except for the approval of the
holders of the Parent Common Stock, no other corporate proceedings on the part
of Parent or Acquisition Subsidiary are necessary to authorize the execution and
delivery of this Restated Agreement and the Parent Transaction Agreements or to
consummate the transactions contemplated hereby or thereby, except for the
concurrence of Bank of America National Trust and Savings Association under the
Great Western Credit Agreement. This Restated Agreement has been duly and
validly executed and delivered by each of Parent and Acquisition Subsidiary and
constitutes, and upon execution and delivery thereof as contemplated by this
Restated Agreement, the Parent Transaction Agreements will constitute, the
legal, valid and binding obligations of Parent and Acquisition Subsidiary,
enforceable against each of Parent and Acquisition Subsidiary in accordance with
its and their respective terms, subject to the Enforceability Exceptions.
3.5 GOVERNMENTAL APPROVALS. No Consent from or with any Governmental
Authority on the part of Parent or any of the Active Parent Subsidiaries, is
required in connection with the execution or delivery by Parent and Acquisition
Subsidiary of this Restated Agreement and the Parent Transaction Agreements or
the consummation by Parent and Acquisition Subsidiary of the transactions
contemplated hereby or thereby other than (i) filings with the SEC, state
securities laws administrators and the NYSE, (ii) Consents from or with
Governmental Authorities, (iii) filings under the HSR Act, and (iv) those
Consents that, if they were not obtained or made, do not or would not have a
Parent Material Adverse Effect.
3.6 NO VIOLATIONS. The execution and delivery of this Restated Agreement
and the Parent Transaction Agreements, the consummation of the transactions
contemplated hereby and thereby and compliance by Parent and Acquisition
Subsidiary with any of the provisions hereof or thereof will not (i) conflict
with or result in any breach of any provision of the Certificate and/or Articles
of Incorporation or Bylaws or other governing instruments of Parent or any of
the Active Parent Subsidiaries, except as set forth on SCHEDULE 3.6,
(ii) except for compliance with the requirements under the Parent Guaranty,
require any Consent under or result in a violation or breach of, or constitute
(with or without due notice or lapse of time or both) a default (or give rise to
any right of termination, cancellation or acceleration or augment the
performance required) under any of the terms, conditions or provisions of any
Parent Material Contract or other obligation to which Parent or any Active
Parent Subsidiary, is a party or by which any of them or any of their properties
or assets may be bound, (iii) result in the creation or imposition of any lien
or encumbrance of any kind upon any of the assets of Parent or any Parent
Subsidiary, or (iv) subject to obtaining the Consents from Governmental
Authorities referred to in SECTION 3.5 above, contravene any Law currently in
effect to which Parent or any Active Parent Subsidiary or its or any of their
respective assets or properties are subject, except in the case of clauses (ii),
(iii) and (iv) above, for any deviations from the foregoing which do not or
would not have a Parent Material Adverse Effect.
3.7 SECURITIES FILINGS AND LITIGATION.
(a) Parent has made available to Web true and complete copies of
(i) its Annual Reports on Form 10-K, as amended, for the years ended
December 31, 1997 and 1998, as filed with the SEC,
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(ii) its proxy statement relating to the meeting of shareholders held on
July 29, 1998, as filed with the SEC, and (iii) all other reports,
statements and registration statements and amendments thereto (including,
without limitation, Quarterly Reports on Form 10-Q and Current Reports on
Form 8-K, as amended) filed by Parent with the SEC since February 18, 1998.
The reports and statements set forth in clauses (i) through (iii) above, and
those subsequently provided or required to be provided pursuant to this
section, are referred to collectively as the "PARENT SECURITIES FILINGS." As
of their respective dates, or as of the date of the last amendment thereof,
if amended after filing, none of the Parent Securities Filings (including
all schedules thereto and disclosure documents incorporated by reference
therein), contained or, as to Parent Securities Filings subsequent to the
date hereof, will contain any untrue statement of a material fact or omitted
or, as to Parent Securities Filings subsequent to the date hereof, will omit
to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading. Each of the Parent Securities Filings at the time of
filing or as of the date of the last amendment thereof, if amended after
filing, complied or, as to Parent Securities Filings subsequent to the date
hereof, will comply in all material respects with the Securities Exchange
Act or the Securities Act, as applicable.
(b) Except as set forth on SCHEDULE 3.7(b) attached hereto, there is no
Litigation pending or, to the knowledge of Parent, threatened against Parent
or any Active Parent Subsidiary, any officer, director, employee or agent
thereof, in his or her capacity as such, or as a fiduciary with respect to
any Benefit Plan of Parent, or otherwise relating, in a manner that could
have a Parent Material Adverse Effect, to Parent, any Active Parent
Subsidiary or the securities of any of them, or any properties or rights of
Parent or any of the Active Parent Subsidiaries, which is required to be
described in any Parent Securities Filing that is not so described. No event
has occurred as a consequence of which Parent would be required to file a
Current Report on Form 8-K pursuant to the requirements of the Securities
Exchange Act as to which such a report has not been timely filed with the
SEC. Any reports, statements and registration statements and amendments
thereof (including, without limitation, Reports on Form 10-K, Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K, as amended) filed by
Parent with the SEC after the date hereof shall be provided to Web upon such
filing.
3.8 PARENT FINANCIAL STATEMENTS. The audited consolidated and unaudited
interim financial statements of Parent and the Active Parent Subsidiaries
included in the Parent Securities Filings (the "PARENT FINANCIAL STATEMENTS")
have been made available to Web. Except as noted thereon, the Parent Financial
Statements were prepared in accordance with generally accepted accounting
principles applicable to the business of Parent and the Active Parent
Subsidiaries consistently applied in accordance with past accounting practices
and fairly present (including, but not limited to, the inclusion of all
adjustments with respect to interim periods which are necessary to present
fairly the financial condition and assets and liabilities or the results of
operations of Parent and the Active Parent Subsidiaries, subject to normal
year-end adjustments in the ordinary course with respect to certain items
immaterial in amount or effect and the exclusion of footnote disclosure in
interim Parent Financial Statements) the financial condition and assets and
liabilities or the results of operations of Parent and the Active Parent
Subsidiaries as of the dates and for the periods indicated. Except as set forth
in SCHEDULE 3.8 or as reflected in the Parent Financial Statements, as of their
respective dates, neither Parent nor any Active Parent Subsidiary had any debts,
obligations, guaranties of obligations of others or liabilities (contingent or
otherwise) that would be required in accordance with generally accepted
accounting principles to be disclosed in the Parent Financial Statements.
3.9 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in the
Parent Securities Filings made available by Parent to Web prior to the date of
this Restated Agreement or in SCHEDULE 3.9 since June 30, 1999, through the date
of this Restated Agreement, there has not been: (i) any Event that could
reasonably be expected to have a Parent Material Adverse Effect; or (ii) any
agreement by
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Parent or Active Parent Subsidiary to take any action that would result in a
breach of SECTION 6.6 below.
3.10 COMPLIANCE WITH LAWS. The business of Parent and the Active Parent
Subsidiaries, has been operated in compliance with all Laws applicable thereto,
except for any instances of non-compliance which do not and would not have a
Parent Material Adverse Effect.
3.11 PERMITS. (i) Parent and the Active Parent Subsidiaries have all
permits, certificates, licenses, approvals, tariffs and other authorizations
required in connection with the operation of their business (collectively,
"PARENT PERMITS"), (ii) neither Parent nor any Active Parent Subsidiary is in
violation of any Parent Permit, and (iii) no proceedings are pending or, to the
knowledge of Parent, threatened, to revoke or limit any Parent Permit, except,
in the case of clause (i) or (ii) above, those the absence or violation of which
do not and would not have a Parent Material Adverse Effect.
3.12 FINDERS AND INVESTMENT BANKERS. Neither Parent nor any of its
officers or directors has employed any broker or finder or otherwise incurred
any liability for any brokerage fees, commissions or finders' fees in connection
with the transactions contemplated hereby except that PaineWebber Incorporated
has been engaged to deliver the fairness opinion required to be delivered
pursuant to SECTION 7.1(l) and NationsBanc Xxxxxxxxxx Securities, L.L.C. has
been engaged to assist in the sale(s) of the CLEC Operations and a copy of the
engagement letters and other related documents have been (or will be, with
respect to the fairness opinion to be issued by PaineWebber Incorporated)
furnished to Web. Web will not be liable for any brokerage fees, commissions,
investment banking fees or other amounts to PaineWebber Incorporated or
NationsBanc Xxxxxxxxxx Securities, L.L.C. in connection with this Restated
Agreement, the Company Agreement, the Restated Big Stuff Agreement or any
transactions contemplated herein or therein.
3.13 CONTRACTS. Except as set forth in SCHEDULE 3.13 attached hereto,
neither Parent nor any Active Parent Subsidiary is a party to any material note,
bond, mortgage, indenture, contract, lease, license, agreement, understanding,
instrument, bid or proposal ("PARENT MATERIAL CONTRACT") required to be
described in or filed as an exhibit to any Parent Securities Filing that is not
described in or filed as required by the Securities Act or the Securities
Exchange Act, as the case may be. Parent has made available to Web true and
accurate copies of the Parent Material Contracts. All such Parent Material
Contracts are valid and binding and are in full force and effect and enforceable
in accordance with their respective terms, subject to the Enforceability
Exceptions.
3.14 CORPORATE RECORDS. The respective corporate record books of or
relating to Parent and each of the Active Parent Subsidiaries made available to
Web by Parent contain accurate and complete records of (i) all corporate actions
of the respective shareholders and directors (and committees thereof) of Parent
and the Active Parent Subsidiaries, (ii) the Certificate and/or Articles of
Incorporation, Bylaws and/or other governing instruments, as amended, of Parent
and the Active Parent Subsidiaries, and (iii) the issuance and transfer of stock
of Parent and the Active Parent Subsidiaries.
3.15 TAX. Parent does not know of any fact and has not taken any action
that could be reasonably expected to prevent the transaction contemplated hereby
from qualifying as a tax-free reorganization pursuant to Section 368 of the
Code.
3.16 DISCLOSURE. All information and documents provided prior to the date
of this Restated Agreement and all information and documents subsequently
provided, to Web and the Web Shareholders, or its or their respective
representatives or lenders by or on behalf of Parent in connection with the
transactions contemplated by this Restated Agreement are or contain, or will be
or will contain as to subsequently provided information or documents, true,
accurate and complete information in all material respects with respect to the
subject matter thereof and are, or will be as to subsequently provided
information or documents, reasonably responsive to any specific request made by
or on behalf of Web and the Web Shareholders or its or their representatives or
lenders.
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ARTICLE IV--ADDITIONAL COVENANTS OF WEB
AND THE WEB SHAREHOLDERS
Web and the Web Shareholders covenant and agree as follows:
4.1 NOTIFICATION OF CERTAIN MATTERS. Web and the Web Shareholders shall
give prompt notice to Parent if any of the following occur from the date of this
Restated Agreement through the Closing Date: (i) receipt of any notice of, or
other communication relating to, a default or Event which, with notice or lapse
of time or both, would become a default under any Web Material Contract;
(ii) receipt of any notice or other communication from any third party alleging
that the Consent of such third party is or may be required in connection with
the transactions contemplated by this Restated Agreement; (iii) receipt of any
material notice or other communication from any Governmental Authority in
connection with the transactions contemplated by this Restated Agreement;
(iv) receipt of any notice of or other communication regarding or otherwise
obtaining knowledge of an Event which would have a Web Material Adverse Effect;
(v) receipt of any notice of or other communication regarding or otherwise
obtaining knowledge of the commencement or threat of any Litigation involving or
affecting any Web Shareholder, Web or any of its or their respective properties
or assets, or, to its knowledge, any employee, agent, director or officer of
Web, in his or her capacity as such or as a fiduciary under a Benefit Plan of
Web, which, if pending on the date hereof, would have been required to have been
disclosed in this Restated Agreement or which relates to the consummation of the
transactions contemplated by this Restated Agreement, including the Merger, or
the Web Transaction Agreements or any material development in connection with
any Litigation disclosed by Web or any Web Shareholder in or pursuant to this
Restated Agreement; and (vi) the receipt of any notice of or other communication
regarding or otherwise obtaining knowledge of any event that would cause a
breach by Web or any Web Shareholder of any provision of this Restated Agreement
or a Web Transaction Agreement, including such a breach that would occur if such
event had taken place on or prior to the date of this Restated Agreement.
4.2 ACCESS AND INFORMATION. Between the date of this Restated Agreement
and the Closing Date, Web, upon reasonable notice, will give, and shall direct
its accountants and legal counsel to give, Parent, its lenders and their
respective authorized representatives (including, without limitation, financial
advisors, accountants and legal counsel) at all reasonable times access to all
offices and other facilities and to all contracts, agreements, commitments,
books and records (including, but not limited to, Tax returns) of or pertaining
to Web, will permit the foregoing to make such inspections as they may require
and will cause its officers promptly to furnish Parent with (a) such financial
and operating data and other information with respect to the business and
properties of Web as Parent may from time to time reasonably request including,
but not limited to, data and information required for inclusion in Parent's
pending registration statements and/or other Parent Securities Filings, and
(b) a copy of each material report, schedule and other document filed or
received by Web pursuant to the requirements of applicable securities Laws. The
foregoing access will be subject to restrictions contained in SECTION 6.9
hereof.
4.3 WEB SHAREHOLDER APPROVAL. As soon as practicable, Web will, if
required, take all steps necessary to duly call, give notice of, convene and
hold a meeting of the Web Shareholders for the purpose of adopting this Restated
Agreement and for such other purposes as may be necessary or desirable in
connection with effectuating the transactions contemplated hereby. The Board of
Directors of Web (i) unless otherwise required under the fiduciary duties of the
directors of Web, as determined by such directors in good faith upon advice of
legal counsel, will recommend to the Web Shareholders that they adopt this
Restated Agreement and approve the transactions contemplated hereby, and
(ii) will use its reasonable best efforts to obtain any necessary adoption and
approval by the Web Shareholders of this Restated Agreement and the transactions
contemplated hereby including, without limitation, voting the Web Shares held
for such adoption and approval.
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4.4 REASONABLE BEST EFFORTS. Subject to the terms and conditions herein
provided, Web and the Web Shareholders agree to use their reasonable best
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, all things necessary, proper or advisable to consummate and make effective
as promptly as practicable, but in any event, prior to the Closing, the Merger
and the other transactions contemplated by this Restated Agreement and the Web
Transaction Agreements including, but not limited to (i) obtaining the Consent
of others to this Restated Agreement, the Web Transaction Agreements and the
transactions contemplated hereby and thereby, (ii) the defending of any
Litigation against Web, or involving any Web Shareholder challenging this
Restated Agreement, the Web Transaction Agreements or the consummation of the
transactions contemplated hereby or thereby, excluding any Litigation caused by
or relating to Parent or any Active Parent Subsidiary, (iii) obtaining all
Consents from Governmental Authorities required for the consummation of the
exchange and the transactions contemplated hereby, and (iv) timely making all
necessary filings under the HSR Act. Upon the terms and subject to the
conditions hereof, Web and the Web Shareholders agree to use their reasonable
best efforts to take, or cause to be taken, all actions and to do, or cause to
be done, all things necessary to satisfy the other conditions of the Closing set
forth herein. Web and the Web Shareholders will consult with counsel for Parent
as to, and will permit such counsel to participate in, at Parent's expense, any
Litigation referred to in clause (ii) above brought against or involving Web or
any Web Shareholder.
4.5 COMPLIANCE. In consummating the Merger and the transactions
contemplated hereby, Web and the Web Shareholders shall comply in all material
respects with the provisions of the Securities Exchange Act and the Securities
Act and shall comply, in all material respects, with all other applicable Laws.
4.6 BENEFIT PLANS. Between the date of this Restated Agreement and through
the Closing Date, no discretionary award or grant under any Benefit Plan of Web
shall be made without the consent of Parent. Web shall not make any amendment to
any Benefit Plan, any awards thereunder or the terms of any security convertible
into or exchangeable for capital stock without the consent of Parent.
4.7 TAX OPINION CERTIFICATION. Web and the Web Shareholders shall use
their best efforts to cause the Merger to qualify, and will not take any action
which to their knowledge could reasonably be expected to prevent the Merger from
qualifying, as a reorganization under Section 368 of the Code. Prior to the
Effective Time, Web and the Web Shareholders shall provide tax counsel rendering
an opinion under SECTION 7.1(m) with a certificate concerning such factual
matters as such counsel reasonably requests in connection with its opinion.
4.8 AFFILIATE AGREEMENTS. Web shall use its reasonable business efforts to
ensure that each Person who is or may be an "affiliate" of Web within the
meaning of Rule 145 promulgated under the Securities Act shall enter into an
agreement in a form agreed to by the parties hereto, acting reasonably
(collectively, the "AFFILIATE AGREEMENTS").
4.9 TRANSFER RESTRICTIONS. (a) In addition to any other restrictions
imposed by Law on the ability of any Web Shareholder to transfer any Parent
Common Stock received by such Web Shareholder pursuant to this Restated
Agreement, the Web Shareholders who are "affiliates" of Web within the meaning
of Rule 145 promulgated under the Securities Act acknowledge and agree that the
following legend will appear on all certificates representing the Parent Common
Stock received by such "affiliates" of Web pursuant to this Restated Agreement:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE HELD SUBJECT TO
ALL APPLICABLE PROVISIONS OF THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND THE RULES AND REGULATIONS PROMULGATED BY THE
SECURITIES AND EXCHANGE COMMISSION ("SEC") THEREUNDER. NO SALES, TRANSFERS
OR OTHER DISPOSITION OF THESE SHARES MAY BE MADE EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
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ACT OR UPON THE PRIOR DELIVERY TO THE ISSUER OF AN OPINION FROM LEGAL
COUNSEL SATISFACTORY TO THE ISSUER AND IN FORM AND SUBSTANCE SATISFACTORY TO
THE ISSUER AND ITS LEGAL COUNSEL, STATING THAT SUCH SALE OR OTHER
DISPOSITION IS BEING MADE PURSUANT TO AND IN ACCORDANCE WITH THE
REQUIREMENTS OF SEC RULES 144 AND 145 OR IS OTHERWISE EXEMPT FROM
REGISTRATION UNDER THE SECURITIES ACT.
(b) Notwithstanding the foregoing, Parent shall instruct its transfer
agent to remove the legend set forth in SECTION 4.9(a) for those sales of
Parent Common Stock by "affiliates" (as defined in Securities Act Rules 144
and 145) of Parent and Web made pursuant to Securities Act Rules 144 and
145.
ARTICLE V
ADDITIONAL COVENANTS OF PARENT
Parent covenants and agrees as follows:
5.1 CONDUCT OF BUSINESS OF PARENT AND THE ACTIVE PARENT
SUBSIDIARIES. Parent covenants, represents and warrants that from the date of
this Restated Agreement through the Closing Date, unless Web shall otherwise
expressly consent in writing, Parent shall, and Parent shall cause each Active
Parent Subsidiary to, use its or their reasonable best efforts to comply in all
material respects with all Laws applicable to it or any of its properties,
assets or business and maintain in full force and effect all the Parent
Authorizations necessary for, or otherwise material to, such business.
5.2 NOTIFICATION OF CERTAIN MATTERS. Parent shall give prompt notice to
Web if any of the following occur from the date of this Restated Agreement
through the Closing Date: (i) any notice of, or other communication relating to,
a default or Event which, with notice or lapse of time or both, would become a
default under any Parent Material Contract which could have a Parent Material
Adverse Effect; (ii) receipt of any notice or other communication from any third
party alleging that the Consent of such third party is or may be required in
connection with the transactions contemplated by this Restated Agreement;
(iii) receipt of any material notice or other communication from any regulatory
authority (including, but not limited to, the NYSE or any other securities
exchange) in connection with the transactions contemplated by this Restated
Agreement; (iv) receipt of any notice of or other communication regarding or
otherwise obtaining knowledge of an Event which would have a Parent Material
Adverse Effect; (v) receipt of any notice of or other communication regarding or
otherwise obtaining knowledge of the commencement or threat of any Litigation
involving or affecting Parent or any Active Parent Subsidiary or any of their
respective properties or assets, or, to its knowledge, any employee, agent,
director or officer, in his or her capacity as such, of Parent or any Active
Parent Subsidiary which, if pending on the date hereof, would have been required
to have been disclosed in this Restated Agreement or which relates to the
consummation of the Merger or any material development in connection with any
Litigation disclosed by Parent in or pursuant to this Restated Agreement or the
Parent Securities Filings; (vi) receipt of any notice of or other communication
regarding or otherwise obtaining knowledge of any Event that could cause a
breach by Parent of any provision of this Restated Agreement or any Parent
Transaction Agreement, including such a breach that could occur if such Event
had taken place on or prior to the date of this Restated Agreement; and
(vii) amendment, modification or waiver of any provision of the Ionex Agreement
referenced on SCHEDULE 3.7 hereto.
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5.3 ACCESS AND INFORMATION. Between the date of this Restated Agreement
and the Closing Date, Parent: (i) will, upon reasonable notice, give, and direct
its legal counsel and accountants to give, Web and its authorized
representatives (including, without limitation, its financial advisors,
accountants and legal counsel) at all reasonable times access as reasonably
requested to the offices and other facilities and to all material contracts,
agreements, commitments, books and records (including, but not limited to, Tax
returns) of or pertaining to Parent and the Active Parent Subsidiaries;
(ii) will permit Web to make such reasonable inspections as it may require; and
(iii) will cause its officers promptly to furnish Web with (a) such financial
and operating data and other information with respect to the business and
properties of Parent and the Active Parent Subsidiaries as Web may from time to
time reasonably request, and (b) a copy of each material report, schedule and
other document filed or received by Parent or any Active Parent Subsidiary
pursuant to the requirements of applicable securities Laws, the NYSE or other
securities exchange, in each case as necessary in connection with the
transactions contemplated hereby. The foregoing access will be subject to the
restrictions contained in SECTION 6.9 hereof.
5.4 COMPLIANCE. In consummating the Merger and the transactions
contemplated hereby, Parent shall comply in all material respects with the
provisions of the Securities Exchange Act and the Securities Act and shall
comply, and/or cause the Active Parent Subsidiaries to comply or to be in
compliance, in all material respects, with all other applicable Laws.
5.5 SEC AND SHAREHOLDER FILINGS. Parent shall send to Web a copy of all
material public reports and materials as and when it sends the same to its
shareholders, the SEC, the NYSE or any other securities commission or exchange.
5.6 TAX TREATMENT. Parent and Acquisition Subsidiary shall use their best
efforts to cause the Merger to qualify, and will not take any action which to
its knowledge could reasonably be expected to prevent the Merger from
qualifying, as a reorganization under Section 368 of the Code. Prior to the
Effective Time, Parent shall provide tax counsel rendering an opinion under
SECTION 7.1(m) with a certificate concerning such factual matters as such
counsel identifies are relevant to its opinion.
5.7 EMPLOYMENT AND EMPLOYEE BENEFIT PLANS. At or before the Closing Date,
Parent shall, after consultation with Web, offer employment to the employees of
Web, effective as of the Closing Date, upon terms and conditions reasonably
acceptable to the Web employees and to Parent. After the Closing Date, Parent
shall arrange for each employee participating in any of the Benefit Plans of Web
at such time to participate in any counterpart Benefit Plans of Parent in
accordance with the eligibility criteria thereof, provided that (i) such
participants shall receive full credit for years of service with Web prior to
the Merger for all purposes for which such service was recognized under the
Benefit Plan of Web including, but not limited to, recognition of service for
eligibility, vesting, and, to the extent not duplicative of benefits received
under such Benefit Plan of Web, the amount of benefits, and (ii) such
participants shall participate in the Benefit Plans of Parent on terms no less
favorable than those offered by Parent to similarly situated employees of
Parent. Notwithstanding the foregoing, Parent may continue one or more of the
Benefit Plans of Web, in which case Parent shall have satisfied its obligations
hereunder with respect to the benefits so provided.
5.9 EXPENSES. If the transactions contemplated by this Restated Agreement
are consummated, all fees and expenses incurred in connection with the
transactions contemplated by this Restated Agreement including, without
limitation, all legal, accounting, financial advisory, consulting fees,
(collectively, the "TRANSACTION EXPENSES") incurred by a party or its
stockholders in connection with the negotiation and effectuation of the terms
and conditions of this Restated Agreement and the transactions contemplated
hereby, shall be the obligation of Parent or any direct or indirect subsidiary
of Parent after Closing. If the Merger is not consummated, all Transaction
Expenses shall be and remain the obligation of the respective parties which
incurred them.
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5.10 PARENT SHAREHOLDER APPROVAL. As soon as practicable, Parent will, if
required, take all steps necessary to duly call, give notice of, convene and
hold a meeting of the Parent shareholders for the purpose of adopting this
Restated Agreement and for such other purposes as may be necessary or desirable
in connection with effectuating the transactions contemplated hereby. The Board
of Directors of Parent (i) unless otherwise required under the fiduciary duties
of the directors of Parent, as determined by such directors in good faith and
upon advice of legal counsel, will recommend to the Parent shareholders that
they adopt this Restated Agreement and approve the transactions contemplated
hereby, and (ii) will use its reasonable best efforts to obtain any necessary
adoption and approval by the Parent shareholders of this Restated Agreement and
the transactions contemplated hereby.
ARTICLE VI--ADDITIONAL COVENANTS OF THE PARENT,
WEB AND THE WEB SHAREHOLDERS
6.1 REGISTRATION OF SECURITIES.
(a) On or before the Closing Date, the Parent shall use its reasonable
best efforts to cause the following securities to be registered with the SEC
under the Securities Act and with the appropriate Governmental Authorities
under state blue sky Laws:
(i) Parent Common Stock to be received by Web Shareholders and any
other shareholders of Web upon conversion of Web Common Stock, as
described in SECTION 1.3 hereof; and
(ii) Parent Common Stock to be received by Web Shareholders upon
conversion of the Convertible Note described in SECTION 1.10 hereof.
(b) The Parent shall hold the meeting of the shareholders of Parent to
consider and to vote upon the approval of the Restated Agreement including
the issuance of Parent Common Stock to the Web Shareholders and to the
shareholders of the Company and of Big Stuff, and Parent and Web will
cooperate in the preparation of one or more registration statements (such
registration statements, together with any and all amendments and
supplements thereto, being hereinafter referred to as the "REGISTRATION
STATEMENTS"), which will include the preparation of one or more proxy
statements of the Parent satisfying all requirements of applicable state
securities Laws, the Securities Act and the Securities Exchange Act.
(c) Web will furnish Parent with such information concerning Web as is
necessary in order to cause the Registration Statements and any proxy
statements, insofar as they relate to Web, to comply with applicable Law.
None of the information relating to Web supplied by Web for inclusion in the
Registration Statements or any proxy statements will be false or misleading
with respect to any material fact or will omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. Web agrees promptly to advise Parent if, at any time prior to
the meeting of the shareholders of the Parent referenced herein, any
information provided by it in the Registration Statements or any proxy
statement is or becomes incorrect or incomplete in any material respect and
to provide Parent with the information needed to correct such inaccuracy or
omission. Web will furnish Parent with such supplemental information as may
be necessary in order to cause the Registration Statements or the proxy
statements, insofar as it relates to Web, to comply with applicable Law
after the mailing thereof to the stockholders of Parent, Web, Big Stuff, the
Company and others to whom it must be mailed.
(d) Web and Parent agree to cooperate in making any preliminary filings
of Registration Statements and the proxy statement with the SEC as promptly
as practicable, on a confidential basis pursuant to Rule 14a-6(e)(2) under
the Securities Exchange Act.
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(e) Parent will file the Registration Statements and the proxy statement
with the SEC and appropriate materials with applicable state securities
agencies and will use all reasonable best efforts to cause the Registration
Statements and the proxy statement to become effective under the Securities
Act and the Exchange Act and all such state filed materials to comply with
applicable state securities Laws. Web authorizes Parent to utilize in the
Registration Statements and in all such state filed materials, the
information concerning Web provided to Parent in connection with, or
contained in, the Registration Statements. Parent promptly will advise Web
when the Registration Statements have become effective and of any
supplements or amendments thereto, and Parent will furnish Web with copies
of all such documents. Parent shall file any and all amendments, supplements
and related filings to such Registration Statements (and state filed
materials) as may be required. Web shall not distribute any written material
that might constitute a "prospectus" relating to this Restated Agreement or
any of the transactions contemplated by this Restated Agreement within the
meaning of the Securities Act or any other applicable securities Law without
the prior written consent of Parent.
6.2 EMPLOYMENT AGREEMENTS. At or before the Closing Date, Parent will
enter into Employment and Non-Competition Agreements, in forms agreed to by
Parent and Web, acting reasonably, with certain individuals, the identities of
whom shall be agreed upon by Parent and Web, acting reasonably.
6.3 CONSENTS. Each of Parent and Web shall promptly apply for or otherwise
seek, and use its best efforts to obtain, all consents and approvals required to
be obtained by it for the consummation of the Merger.
6.4 LEGAL REQUIREMENTS. Subject to the terms and conditions provided in
this Restated Agreement, each of the parties hereto shall use its reasonable
best efforts to take promptly, or cause to be taken, all reasonable actions, and
to do promptly, or cause to be done, all things necessary, proper or advisable
under applicable Laws to consummate and make effective the transactions
contemplated hereby and to obtain all necessary waivers, consents and approvals
and to effect all necessary registrations and filings and to remove any
injunctions or other impediments or delays, legal or otherwise, in order to
consummate and make effective the transactions contemplated by this Restated
Agreement for the purpose of securing for the parties hereto the benefits
contemplated by this Restated Agreement.
6.5 PUBLIC ANNOUNCEMENTS. All press releases and other disseminations of
information to employees, customers or suppliers relating to the Merger or the
transactions contemplated by this Restated Agreement or the Restated Company
Agreement by any party hereto shall require the prior approval of Parent and
Web, provided Parent shall have the right to make such public announcements
without the approval of the other parties hereto should such disclosure be
required by Law or the policies or requirements of United States securities
regulators, stock exchanges, or other relevant entities in the opinion of
Parent's legal counsel. Should such disclosure be required, Parent agrees to
provide the others with reasonable advance notice of and a copy of, and to
consult with the others regarding, the proposed disclosure.
6.6 CONDUCT OF BUSINESS PRIOR TO CLOSING DATE. Except as expressly
contemplated by this Restated Agreement, during the period from the date of this
Restated Agreement to the Closing Date, Web shall conduct its business in the
ordinary course and consistent with past practice, subject to the limitations
contained in this Restated Agreement, and Web shall use its reasonable business
efforts to preserve intact its business organization, to keep available the
services of its officers, agents and employees and to maintain satisfactory
relationships with all Persons with whom it does business. Except as expressly
contemplated by this Restated Agreement, and it being acknowledged and agreed by
each of the parties to this Restated Agreement that Parent is in the process of
a substantial reduction in workforce, and, subject to the sale of the CLEC
Operations, Parent shall, and it shall cause the Active Parent Subsidiaries to,
use its or their reasonable best efforts to preserve intact its
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business organization consistent with the budget adopted by the Executive
Committee of the Board of Directors of Parent, to keep available the services of
only those officers, agents and employees whom Parent believes are required to
maintain satisfactory relationships with all Persons with whom it does business.
Without limiting the generality of the foregoing, and except as otherwise
expressly provided in this Restated Agreement, after the date of this Restated
Agreement and prior to the Closing Date, (i) Web will not, without the prior
written consent of Parent (which consent shall not be unreasonably withheld or
delayed); and (ii) subject to the sale of the CLEC Operations, neither Parent
nor any Active Parent Subsidiary will, without the prior written consent of Web
(which consent shall not be unreasonably withheld or delayed):
(a) except as provided for in this Restated Agreement, the Restated
Company Agreement or the Restated Big Stuff Agreement, amend or propose to
amend its Certificate or Articles of Incorporation or Bylaws (or comparable
governing instruments) in any material respect;
(b) except as set forth on SCHEDULE 6.6(b)(i), with regard to Web, or
Parent Common Stock to be issued pursuant to those options or warrants
listed on SCHEDULE 6.6(b)(ii) or in SECTION 6.10, with regard to Parent or
the Active Parent Subsidiaries, authorize for issuance, issue, grant, sell,
pledge, dispose of or propose to issue, grant, sell, pledge or dispose of
any shares of, or any options, warrants, commitments, subscriptions or
rights of any kind to acquire or sell any shares of, the capital stock or
other securities of Web, or of Parent or any Active Parent Subsidiary, as
the case may be, including, but not limited to, any securities convertible
into or exchangeable for shares of stock of any class of Web, or of Parent
or any Active Parent Subsidiary, as the case may be; PROVIDED, HOWEVER, that
Web may issue capital stock pursuant to the exercise of options and warrants
outstanding on the date of this Restated Agreement;
(c) except as provided for in this Restated Agreement, the Restated
Company Agreement or the Restated Big Stuff Agreement, split, combine or
reclassify any shares of its capital stock or declare, pay or set aside any
dividend or other distribution (whether in cash, stock or property or any
combination thereof) in respect of its capital stock, other than dividends
or distributions to the Web Shareholders (but only if the entire amount of
such dividend is paid to Big Stuff as a capital contribution), or to Parent
or a Parent subsidiary, as the case may be, or redeem, purchase or otherwise
acquire or offer to acquire any shares of its capital stock or other
securities; PROVIDED, HOWEVER, that Web may make a dividend or distribution
to the Web Shareholders in the amount of cash or other consideration
received by Web on or before the Closing Date from the exercise of options
and warrants to purchase Web Common Stock;
(d) except for debt (including, but not limited to, obligations in
respect of capital leases, but excluding obligations under the Convertible
Note) not in excess of $50,000 in the aggregate for all Persons combined,
(i) create, incur or assume any short-term debt (excluding trade payables
incurred in the ordinary course of business), long-term debt or obligations
in respect of capital leases, except for indebtedness contemplated by this
Restated Agreement; (ii) assume, guarantee, endorse or otherwise become
liable or responsible (whether directly, indirectly, contingently or
otherwise) for the obligations of any Person, except for obligations
permitted by this Restated Agreement of any Active Parent Subsidiary, in the
ordinary course of business consistent with past practice; (iii) except as
contemplated in this Restated Agreement, make any capital expenditures or
make any loans, advances or capital contributions to, or investments in, any
other Person (other than customary advances to employees made in the
ordinary course of business consistent with past practice), provided Web
will continue to make capital expenditures, maintain, upgrade and expand its
facilities, and otherwise operate in the ordinary course and consistent with
past practice; (iv) acquire the stock or assets of, or merge or consolidate
with, any other Person or business, except as contemplated in this Restated
Agreement and except the contemplated merger with Big Stuff or the
contemplated acquisition of all of the issued and outstanding capital stock,
either
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directly or indirectly, of the Company; or (v) voluntarily incur any
material liability or obligation (absolute, accrued, contingent or
otherwise), except in the ordinary course of business;
(e) except for the contemplated sale of the Parent's CLEC Operations,
sell, transfer, mortgage, pledge or otherwise dispose of, or encumber, or
agree to sell, transfer, mortgage, pledge or otherwise dispose of or
encumber, any material assets or properties, real, personal or mixed, except
in the ordinary course of business, in the case of Parent and the Active
Parent Subsidiaries;
(f) increase in any manner the compensation of any of its officers,
agents or employees other than any increases required pursuant to their
employment agreements in accordance with their terms in effect on the date
of this Restated Agreement and increases in the ordinary course of business
consistent with past practice not in excess on an individual basis of the
lesser of 10% of the current compensation of such individual or $10,000 per
annum;
(g) enter into, establish, amend, make non-routine or material
interpretations or determinations with respect to, or terminate any
employment, consulting, retention, change in control, collective bargaining,
bonus or other incentive compensation, profit sharing, health or other
welfare, stock option, stock purchase, restricted stock, or other equity,
pension, retirement, vacation, severance, deferred compensation or other
compensation or benefit plan, policy, agreement, trust, fund or arrangement
with, for or in respect of, any shareholder, officer, director, other
employee, agent, consultant or affiliate, other than actions contemplated by
this Restated Agreement, the Restated Company Agreement and the Restated Big
Stuff Agreement;
(h) make any elections with respect to Taxes that are inconsistent with
the prior elections reflected in the Financial Statements as of and to the
period ended December 31, 1998;
(i) except with regard to the Xxxxxxx matter referenced on SCHEDULE 3.7
attached hereto, compromise, settle, grant any waiver or release relating to
or otherwise adjust any Litigation, except routine Litigation in the
ordinary course of business consistent with past practice, involving only a
payment not in excess of $50,000 individually or $100,000 when aggregated
with all such payments by Web or by Parent and the Active Parent
Subsidiaries combined, as the case may be;
(j) take any action or omit to take any action, which action or omission
would result in a breach of any of the covenants, representations and
warranties of Web, the Web Shareholders or Parent or the Active Parent
Subsidiaries set forth in this Restated Agreement or would have a Web
Material Adverse Effect, with regard to Web and the Web Shareholders, or a
Parent Material Adverse Effect, with regard to Parent and the Active Parent
Subsidiaries;
(k) except in the ordinary course of business enter into any lease or
other agreement, or amend any lease or other agreement, with respect to real
property;
(l)
(i) except as set forth in SECTION 6.6(l)(ii) or SECTION 11.1 or 11.2
hereof, enter into or amend any agreement or transaction (A) pursuant to
which the aggregate financial obligation of Web, or of Parent or an
Active Parent Subsidiary, as the case may be, or the value of the
services to be provided could exceed $50,000, (B) having a term of more
than twelve (12) months and pursuant to which the aggregate financial
obligation of Web, or of Parent or an Active Parent Subsidiary, as the
case may be, or the value of the services to be provided could exceed
$100,000 per year, or (C) which is not terminable by Web or Parent or the
Active Parent Subsidiaries, as the case may be, upon no more than thirty
(30) days' notice without penalty in excess of $50,000 individually or
$100,000 when aggregated with the penalties under all such agreements or
transactions;
(ii) The parties hereto expressly agree that, notwithstanding
anything in this Restated Agreement to the contrary, Parent may modify,
amend or waive its rights, including those respecting its indemnification
obligations, under (A) the Ionex Agreement referenced on
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SCHEDULE 3.13 attached hereto; (B) the Restated Company Agreement; and
(C) the Restated Big Stuff Agreement; PROVIDED, that such modifications,
amendments and/or waivers do not, or would not reasonably be expected to,
materially increase Parent's obligations or materially adversely affect
Parent's rights under each respective agreement, or otherwise materially
affect the consideration to be received under each respective agreement.
(m) except as set forth in SECTION 6.6(l)(ii) hereof, take any action
with respect to the indemnification of any Person;
(n) change any accounting practices or policies, except as required by
generally accepted accounting principles or Laws or as agreed to or
requested by Web's or Parent's auditors after consultation with Parent's or
Web's auditors, as the case may be; PROVIDED, HOWEVER, that notice and a
description of any change pursuant to this SECTION 6.6(n) shall be provided
promptly after such change is effected to Web or Parent, as the case may be;
(o) except as set forth in SECTION 6.6(l)(ii) hereof, or except in the
ordinary course of business, enter into, amend, modify, terminate or waive
any rights under any contract which would result in a Web Material Adverse
Effect, with respect to Web, or a Parent Material Adverse Effect, with
respect to Parent;
(p) adopt a plan of liquidation, dissolution, merger, consolidation,
share exchange, restructuring, recapitalization, or other reorganization;
PROVIDED, HOWEVER, that Parent may adopt such a plan and may cause the
liquidation or dissolution of any Parent subsidiary if Parent is unable to
sell such Parent subsidiary (i) at a price which Parent determines to be
reasonable, and (ii) during a time period which Parent determines to be
reasonable; PROVIDED, FURTHER, HOWEVER, that if Parent adopts such a plan or
causes such liquidation or dissolution, Parent promptly shall provide to Web
notice of such adoption, liquidation or dissolution, as the case may be; or
(q) resolve, agree, commit or arrange to do any of the foregoing.
Notwithstanding anything in this SECTION 6.6 to the contrary, it is
understood that Web has been accelerating and intensifying its business
activities since March 31, 1999 and will continue to do so. Accordingly,
(x) "ordinary course of business" and "consistent with past practice", as used
in this SECTION 6.6 with respect to Web, shall be interpreted to include such
acceleration and intensification; and (y) in considering requests for consent
from Web, Parent shall take into account such acceleration and intensification.
Furthermore, Parent covenants, represents and warrants that from and after
the date hereof, unless Web shall otherwise expressly consent in writing, Parent
shall use its reasonable business efforts to:
(1) keep in full force and effect insurance comparable in amount and
scope of coverage to insurance now carried by it;
(2) pay all accounts payable and other obligations consistent with
prudent cash management principles, except if the same are contested in good
faith, and, in the case of the failure to pay any material accounts payable
or other obligations which are contested in good faith, only after
consultation with Web; and
(3) comply in all material respects with all Laws applicable to it or
any of its properties, assets or business, except for such Laws the failure
to comply with which would not have a Parent Material Adverse Effect and
maintain in full force and effect all Parent Permits necessary for, or
otherwise material to, such business, except for such Parent Permits the
failure of which to maintain in full force and effect would not have a
Parent Material Adverse Effect.
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Furthermore, Web covenants, represents and warrants that from and after the
date hereof, unless Parent shall otherwise expressly consent in writing, Web
shall use its or their reasonable business efforts to:
(1) keep in full force and effect insurance comparable in amount and
scope of coverage to insurance now carried by it;
(2) pay all accounts payable and other obligations, when they become due
and payable, in the ordinary course of business consistent with past
practice and with the provisions of this Restated Agreement, except if the
same are contested in good faith, and, in the case of the failure to pay any
material accounts payable or other obligations which are contested in good
faith, only after consultation with Parent; and
(3) comply in all material respects with all Laws applicable to it or
any of its properties, assets or business, and maintain in full force and
effect all Web Permits necessary for, or otherwise material to, such
business.
6.7 NO SOLICITATION OF ACQUISITION PROPOSAL. Unless Parent, Web and the
Web Shareholders shall otherwise agree in advance, in writing, neither the Web
Shareholders, Web, Parent nor any of their Associates shall, directly or
indirectly, make, encourage, facilitate, solicit, assist or initiate any inquiry
or proposal, or provide any information to or participate in any negotiations
with, any Person or group other than the parties to this Restated Agreement and
their Associates relating to any of the following transactions ("EXTRAORDINARY
TRANSACTIONS"): (i) liquidation, dissolution, recapitalization, share exchange,
business combination, merger or consolidation of Web or Parent or an Active
Parent Subsidiary; (ii) sale of a significant amount of assets of Web or Parent
or an Active Parent Subsidiary; (iii) purchase or sale of shares of capital
stock of Web or Parent or an Active Parent Subsidiary; or (iv) any similar
actions or transactions involving Web or Parent or an Active Parent Subsidiary
(other than the Merger and the transactions contemplated by this Restated
Agreement, the Restated Company Agreement and the Restated Big Stuff Agreement),
or agree to or consummate any Extraordinary Transaction. Each of Parent and Web
shall immediately inform the other party of any inquiry, proposal, or request
for information or offer (including the terms thereof and the Person making such
inquiry, proposal, request or offer) which it may receive in respect of an
Extraordinary Transaction and provide the other party with a copy of any such
written inquiries, proposals, requests for information and offers, and
thereafter keep the other party fully informed of the status and details
thereof. The parties hereto acknowledge and agree that the provisions of this
SECTION 6.7 shall not apply to: (a) the sale of the CLEC Operations by Parent or
any Active Parent Subsidiary; or (b) to the acquisition of Big Stuff or the
Company; or (c) any communications between or actions by Parent (or any Parent
subsidiary), the Company and ICL, acting jointly, on the one hand, and any
Person not a party to this Restated Agreement, on the other hand, which occurred
prior to the date that this Restated Agreement becomes effective pursuant to
SECTION 1.2 hereof.
6.8 RESIGNATIONS. Web shall use its reasonable best efforts to cause the
officers and/or directors of Web as Parent may request to voluntarily resign
their positions as such effective as of the Closing Date. The instruments
effecting such resignations are herein referred to as the "RESIGNATIONS."
6.9 CONFIDENTIALITY. Unless (i) otherwise expressly provided in this
Restated Agreement, (ii) required by applicable Law or any listing agreement
with, or the rules and regulations of, any applicable securities exchange,
(iii) necessary to secure any required Consents as to which the other party has
been advised, or (iv) consented to in writing by Parent and Web, this Restated
Agreement and any information or documents furnished in connection with this
Restated Agreement, the June 3 Web YP Agreement or the Confidentiality Agreement
dated April 11, 1999 by and among Parent, the Company, Web, Big Stuff and X'Xxxx
shall be kept strictly confidential by Web, Parent and their respective
officers, directors, employees and agents. Prior to any disclosure pursuant to
the preceding sentence, the party intending to make such disclosure shall
consult with the other party regarding the
B-26
nature and extent of the disclosure. Nothing contained herein shall preclude
disclosures to the extent necessary to comply with accounting, SEC and other
disclosure obligations imposed by applicable Law. To the extent required by such
disclosure obligations, Parent, after consultation with Web, may file with the
SEC a Report on Form 8-K pursuant to the Securities Exchange Act with respect to
the Merger, which report may include, among other things, financial statements
and pro forma financial information with respect to the other party. In
connection with any filing with the SEC of a registration statement or amendment
thereto under the Securities Act, Parent, after consultation with Web, may
include a prospectus containing any information required to be included therein
with respect to the Merger, including, but not limited to, financial statements
and pro forma financial information with respect to the other party, and
thereafter distribute said prospectus. Parent and Web shall cooperate with the
other and provide such information and documents as may be required in
connection with any such filings. In the event the Merger is not consummated,
Parent and Web shall return to the other all documents furnished by the other
and will hold in absolute confidence any information obtained from the other
party except to the extent (i) such party is required to disclose such
information by Law or such disclosure is required by discovery, subpoena or
other similar legal process in a proceeding involving a third Person; (ii) such
party received such information on a non-confidential basis from a source, other
than the other party, which is not known by such party to be bound by a
confidentiality obligation with respect thereto; or (iii) such information
becomes generally available to the public or is otherwise no longer
confidential. Prior to any disclosure of information pursuant to the exception
in clause (i) of the preceding sentence, the party intending to disclose the
same shall so notify, in writing, the party which provided the same in order
that such party may seek a protective order or other appropriate remedy should
it choose to do so.
6.10 OPTIONS; STOCK ISSUANCES. The Board of Directors of Parent shall have
the right to grant or issue, as the case may be, (i) restricted stock or options
to acquire shares of Parent Common Stock pursuant to the Parent's 1997 Stock
Awards Plan, provided that no more than the number of shares authorized under
the 1997 Stock Awards Plan have been issued; (ii) restricted stock valued at or
warrants to purchase up to 90,000 shares of Parent Common Stock to be issued to
certain non-employee directors of Parent who were responsible for negotiating
the June 3 Web YP Agreement at an exercise price of $6.96 per share, the
Restated Company Agreement and the Restated Big Stuff Agreement; (iii) the
shares of Parent Common Stock issuable upon conversion at Closing of the Great
Western Notes at a conversion price of $5.50 per share; (iv) up to 1,090,909
shares of Parent Common Stock issuable upon conversion of one or more notes
which may be issued to the Web Shareholders who may lend up to Six Million
Dollars ($6,000,000.00) to Web or Big Stuff as provided in this Restated
Agreement, at a conversion price of $5.50 per share; (v) shares of Parent Common
Stock to be issued upon exercise of options or warrants to be granted at Closing
to those Persons designated by Company in the Restated Company Agreement;
(vi) those shares of Parent Common Stock issuable upon exercise of previously
granted options; and (vii) one (1) share of Parent Class B Voting Preferred
Stock to be issued to the trustee under the Exchange and Voting Trust Agreement.
ARTICLE VII--CONDITIONS TO CLOSING
7.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY TO CLOSING. The respective
obligations of each party to consummate this Restated Agreement and effect the
Merger shall be subject to the satisfaction or waiver at or prior to the Closing
Date of the following conditions:
(a) NO INJUNCTIONS OR RESTRAINTS; ILLEGALITY. No temporary restraining
order, preliminary or permanent injunction or other order issued by any
court of competent jurisdiction or other legal restraint or prohibition
preventing the consummation of the Merger shall be in effect, nor shall any
proceeding brought by an administrative agency or commission or other
governmental authority or instrumentality, domestic or foreign, seeking any
of the foregoing be pending; nor
B-27
shall there be any action taken, or any statute, rule, regulation or order
enacted, entered, enforced or deemed applicable to the Merger, which makes
the consummation of the Merger illegal.
(b) OTHER AGREEMENTS. The Restated Company Agreement and the Restated
Big Stuff Agreement and all documents related to the Restated Company
Agreement and the Restated Big Stuff Agreement shall have been duly executed
and delivered by all parties thereto and shall be in full force and effect.
(c) EMPLOYMENT AND NON-COMPETITION AGREEMENTS. The Employment and
Non-Competition Agreements described in SECTION 6.2 hereof shall have been
duly executed and delivered by all parties thereto and shall be in full
force and effect.
(d) GOVERNMENT APPROVALS. Except for those Consents the failure of
which to be obtained, (i) in the reasonable judgment of Parent, would not
have a Parent Material Adverse Effect or a Web Material Adverse Effect, and
(ii) in the reasonable judgment of Web, would not have a Web Material
Adverse Effect or a Parent Material Adverse Effect, all Consents of any
domestic or foreign Governmental Authority required for the consummation of
the Merger shall have been obtained by Final Order.
(e) RELATED TRANSACTIONS. (i) The acquisition by Parent, or a direct
or indirect subsidiary of Parent, of Web and Big Stuff in a tax-free
reorganization shall have been consummated prior to or simultaneously with
the acquisition of the Company and any registration statement(s) required
for the registration of Parent Common Stock issued to the Web Shareholders,
the Company shareholders and the shareholders of Big Stuff as consideration
in connection with the acquisition of Web, the Company and Big Stuff by
Parent shall have been declared effective, (ii) no stop order suspending the
effectiveness of such registration statement(s) shall have been issued and
no proceeding for that purpose shall have been initiated or threatened by
the SEC or any other Governmental Authority, and (iii) the Great Western
Notes shall have been satisfied by the issuance of Parent Common Stock to
the Great Western Shareholders.
(f) FINANCING. Parent and Web shall have received from their lenders
an extension of all of their and their subsidiaries' debt owing by them on
terms and conditions satisfactory to Parent and Web or all such debts shall
be refinanced on terms satisfactory to Parent and Web or any consents and
approvals required from such lenders is received.
(g) SHAREHOLDER APPROVAL. All necessary approvals of the Web
Shareholders and the shareholders of Parent in connection with the Merger
shall have been obtained.
(h) REQUIRED CONSENTS. Any required Consents of any Person to the
Merger or the transactions contemplated by this Restated Agreement shall
have been obtained on terms and conditions reasonably acceptable to Parent
and Web and be in full force and effect, except for those the failure of
which to obtain, in the reasonable judgment of Parent and Web, would not
have a Parent Material Adverse Effect or a Web Material Adverse Effect.
(i) HSR ACT. Any waiting period applicable to the Merger under the HSR
Act shall have expired or earlier termination thereof shall have been
granted and no action shall have been instituted by either the United States
Department of Justice or the Federal Trade Commission to prevent the
consummation of the transactions contemplated by this Restated Agreement or
to modify or amend such transactions in any material manner, or if any such
action shall have been instituted, it shall have been withdrawn or a final
judgment shall have been entered against such Department or Commission, as
the case may be.
(j) REGISTRATION STATEMENT(S). The Registration Statement(s) shall
have been declared effective and no stop order suspending the effectiveness
of the Registration Statement(s) shall have
B-28
been issued and no proceeding for that purpose shall have been initiated or
threatened by the SEC or any Governmental Authority, whether state or
federal.
(k) BLUE SKY. Parent shall have received all state securities Law
authorizations necessary to consummate the transactions contemplated hereby.
(l) FAIRNESS OPINION. The written opinion received by Parent's Board
of Directors from its financial advisors, PaineWebber Incorporated, pursuant
to SECTION 1.2 hereof shall not have been withdrawn.
(m) TAX OPINION. Parent shall have received an opinion from Xxxxxxxxx
Xxxxxxx Xxxxx Xxxxxx LLP based on customary representations contained in
certificates of Parent, to the effect that, if the Merger is consummated in
accordance with the provisions of this Restated Agreement, the Merger will
qualify as a tax-free reorganization within the meaning of the Code.
(n) NYSE LISTING APPROVAL. Parent shall have received from the NYSE
approval for listing with the NYSE of the Parent Common Stock to be issued
pursuant to this Restated Agreement, the Restated Company Agreement and the
Restated Big Stuff Agreement.
(o) SALE OF CLEC OPERATIONS. The sale of the CLEC Operations,
contemplated under the Ionex Agreement referenced on SCHEDULE 3.13 hereof,
shall have closed.
7.2 ADDITIONAL CONDITIONS TO OBLIGATIONS OF WEB SHAREHOLDERS AND WEB. The
obligations of the Web Shareholders and Web to consummate and effect this
Restated Agreement and the transactions contemplated hereby shall be subject to
the satisfaction at or prior to the Closing Date of each of the following
conditions, any of which may be waived, in writing, exclusively by Web:
(a) REPRESENTATIONS, WARRANTIES AND COVENANTS.
(i) The representations and warranties of Parent in this Restated
Agreement that are modified by materiality or Parent Material Adverse
Effect ("PARENT MODIFIED REPRESENTATION") shall be true and correct in
all respects and those that are not so modified ("PARENT NONMODIFIED
REPRESENTATION") shall be true and correct in all material respects on
the date hereof and, except for changes not prohibited by this Restated
Agreement, as of the Closing Date as if made at the Closing Date.
Furthermore, none of the representations or warranties of Parent
contained in this Restated Agreement, disregarding any qualifications
therein or in this SECTION 7.2(a) regarding materiality or Parent
Material Adverse Effect, shall be untrue or incorrect to the extent that
such untrue or incorrect representations or warranties, when taken
together as a whole, have had or would have a Parent Material Adverse
Effect; and
(ii) Parent shall have performed and complied with all of the
covenants and agreements in all material respects and satisfied in all
material respects all of the conditions required by this Restated
Agreement to be performed or complied with or satisfied by Parent at or
prior to the Closing Date. Notwithstanding anything in this Restated
Agreement to the contrary, the parties hereto acknowledge and agree that
the consummation of the transactions contemplated by this Restated
Agreement and the subsequent disposition of the CLEC Operations
constitutes a significant change from the plans and strategies described
in the 1998 10-K such that the representations and warranties of Parent
that reference the 1998 10-K will not be true and correct as of the
Closing Date as they relate to the plans and strategies of the business
of Parent at the Closing Date.
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(b) CERTIFICATE OF PARENT AND OTHER DELIVERIES. Web shall have been
provided, with (i) a certificate executed on behalf of Parent by an Officer
to the effect that, as of the Closing Date, all representations and
warranties made by Parent under this Restated Agreement are true and
complete except as qualified by SECTION 7.2(a)(i) hereof; and all covenants,
obligations and conditions of this Restated Agreement to be performed by
Parent on or before such date have been so performed; (ii) a certificate of
good standing from the Secretary of State of the State of Delaware that
Parent is a validly existing corporation; (iii) duly adopted resolutions of
the Board of Directors of Parent approving the execution, delivery and
performance of this Restated Agreement and the Parent Transaction Agreements
to which it is a party and the instruments contemplated hereby and thereby,
certified by its Secretary or Assistant Secretary; and (iv) such other
documents and instruments as Web may reasonably request.
(c) SHAREHOLDER APPROVAL. Web shall have received from Parent's
transfer agent a certificate indicating that a sufficient number of Parent's
shareholders voted to approve the Merger such that the Merger was deemed
approved by the Parent shareholders.
(d) LEGAL OPINION. Web shall have received a legal opinion of
Xxxxxxxxx Xxxxxxx Xxxxx Xxxxxx LLP, legal counsel to Parent, in a form to be
agreed upon by the parties hereto, acting reasonably.
(e) NO MATERIAL ADVERSE CHANGE. There shall not have occurred after
the date hereof any Event that has or reasonably could be expected to have a
Parent Material Adverse Effect.
(f) LITIGATION. Except as set forth on SCHEDULE 3.7 attached hereto,
there shall be no action, suit, claim or proceeding of any nature pending,
or overtly threatened, against Parent, its properties or any of its officers
or directors, arising out of, or in any way connected with, the Merger or
the other transactions contemplated by the terms of this Restated Agreement
which individually or in the aggregate may cause a Parent Material Adverse
Effect.
7.3 ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF PARENT. The obligations of
Parent to consummate and effect this Restated Agreement and the transactions
contemplated hereby shall be subject to the satisfaction at or prior to the
Closing Date of each of the following conditions, any of which may be waived, in
writing, exclusively by Parent:
(a) REPRESENTATIONS, WARRANTIES AND COVENANTS.
(i) The representations and warranties of Web and the Web
Shareholders contained in this Restated Agreement that are modified by
materiality or Web Material Adverse Effect ("WEB MODIFIED
REPRESENTATION") shall be true and correct in all respects, and those
that are not so modified ("WEB NONMODIFIED REPRESENTATION") shall be true
and correct in all material respects, on the date hereof and, except for
changes not prohibited by this Restated Agreement, as of the Closing Date
as if made at the Closing Date. Furthermore, none of the representations
or warranties of Web or the Web Shareholders contained in this Restated
Agreement, disregarding any qualifications therein or in this
SECTION 7.3(a) regarding materiality or Web Material Adverse Effect,
shall be untrue or incorrect to the extent that such untrue or incorrect
representations or warranties, when taken together as a whole, have had
or would have a Web Material Adverse Effect; and
(ii) Web and the Web Shareholders shall have performed and complied
with all the covenants and agreements in all material respects and
satisfied in all material respects all the conditions required by this
Restated Agreement to be performed or complied with or satisfied by Web
and the Web Shareholders at or prior to the Closing Date.
(b) CERTIFICATE OF WEB AND OTHER DELIVERIES. Parent shall have been
provided with (i) a certificate executed on behalf of Web by its Chief
Executive Officer to the effect that, as of the
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Effective Time all representations and warranties made by Web in this
Restated Agreement are true and correct, except as qualified by
SECTION 7.3(a)(i) hereof, and all covenants, obligations and conditions of
this Restated Agreement to be performed by Web and the Web Shareholders on
or before such date have been so performed; (ii) a certificate of good
standing from the proper authority in the jurisdictions in which Web is
incorporated or qualified to do business stating that each is a validly
existing corporation in good standing; (iii) duly adopted resolutions of the
Web Board of Directors and Web Shareholders approving the execution,
delivery and performance of this Restated Agreement and the Web Transaction
Agreements to which Web is a party and the instruments contemplated hereby
and thereby, certified by the Secretary or Assistant Secretary of Web;
(iv) a true and complete copy of the Articles or Certificate of
Incorporation or comparable governing instruments, as amended, of Web
certified by the Secretary of State of the state of incorporation or
comparable authority in other jurisdictions, and a true and complete copy of
the Bylaws or comparable governing instruments, as amended, of Web certified
by the Secretary thereof; (v) the duly executed Resignations on terms and
conditions reasonably acceptable to Parent; and (vi) such other documents
and instruments as Parent reasonably may request.
(c) LEGAL OPINION. Parent shall have received a legal opinion from
Xxxxxxxxx & Falconer LLP, legal counsel to Web, in a form to be agreed upon
by the parties hereto, acting reasonably.
(d) LITIGATION. There shall be no action, suit, claim or proceeding of
any nature pending, or overtly threatened, against Web, its respective
properties or any of its officers or directors, arising out of, or in any
way connected with, the Merger or the other transactions contemplated by the
terms of this Restated Agreement which individually or in the aggregate may
cause a Web Material Adverse Effect.
(e) NO MATERIAL ADVERSE CHANGE. There shall have not occurred after
the date hereof any Event that has or reasonably could be expected to have a
Web Material Adverse Effect.
(f) AFFILIATE AGREEMENTS. At least thirty (30) days prior to the
Effective Time, Parent shall have received the duly executed Affiliate
Agreements.
ARTICLE VIII--TERMINATION AND ABANDONMENT
8.1 TERMINATION. This Restated Agreement may be terminated and the Merger
contemplated hereby may be abandoned at any time prior to the Closing Date only
as follows, whether before or after approval by the Web Shareholders:
(a) by mutual written consent of Web and Parent, duly authorized by the
Board of Directors of each;
(b) by Web or Parent if the Closing shall not have occurred on or before
January 31, 2000, as such date may be extended pursuant to SECTION 1.2(b)
hereof (or such other date as may be agreed to by Web and Parent); PROVIDED,
THAT, no party may terminate this Restated Agreement under this
SECTION 8.1(b) if such party's breach of this Restated Agreement has caused
or resulted in the failure of the Closing to occur on or before such date;
(c) by Web if (i) there are any breaches of any Parent Modified
Representation or any material breaches of any Parent Nonmodified
Representation, or (ii) Parent has breached or failed to perform,
notwithstanding satisfaction or due waiver of all conditions thereto, any of
its material covenants or agreements contained herein as to which notice
specifying such breach or failure has been given to Parent promptly after
the discovery thereof and Parent has failed to cure or otherwise resolve the
same to the reasonable satisfaction of Web within thirty (30) days after
receipt of such notice;
B-31
(d) by Parent if (i) there are any breaches of any Web Modified
Representations or any material breaches of any Web Nonmodified
Representations, or (ii) Web has breached or failed to perform,
notwithstanding satisfaction or due waiver of all conditions thereto, any of
its material covenants or agreements contained herein as to which notice
specifying such breach or failure has been given to Web promptly after the
discovery thereof and Web has failed to cure or otherwise resolve the same
to the reasonable satisfaction of Parent within thirty (30) days after
receipt of such notice;
(e) by Web or Parent if a court of competent jurisdiction or other
Governmental Authority shall have issued an order, decree or ruling or taken
any other action permanently restraining, enjoining or otherwise prohibiting
the Merger, the Restated Company Agreement or any of the transactions
contemplated by this Restated Agreement or such other agreements and such
order, decree, ruling or other action shall have become final and
nonappealable;
(f)(i) by Web if the stockholders of Parent fail to approve and adopt
the Merger or the issuance of the Parent Common Stock pursuant to this
Restated Agreement or the other transactions contemplated or otherwise
referenced herein or therein, as applicable, at the meeting duly convened
therefor;
(f)(ii) by Parent if the stockholders of Parent fail to approve and
adopt the Merger pursuant to this Restated Agreement or the other
transactions contemplated or otherwise referenced herein or therein, as
applicable;
(g) by Parent, if Web or its Board of Directors breaches any provision
of SECTION 6.7; or
(h) by Web, if Parent or its Board of Directors breaches any provision
of SECTION 6.7;
The party desiring to terminate this Restated Agreement pursuant to this
SECTION 8.1 shall give written notice of such termination to the other party in
accordance with SECTION 11.1 below.
8.2 PROCEDURE UPON TERMINATION. In the event of termination pursuant to
this ARTICLE VIII, the Merger shall be abandoned without further action by Web
or Parent, provided that the obligations of the applicable parties to this
Restated Agreement contained in ARTICLE IX and SECTION 6.9 hereof shall remain
in full force and effect. If this Restated Agreement is terminated as provided
herein, each party shall use its reasonable best efforts to redeliver all
documents, work papers and other material (including any copies thereof) of any
other party relating to the transactions contemplated hereby, whether obtained
before or after the execution hereof, to the party furnishing the same. Nothing
contained in this Restated Agreement shall relieve any party from any liability
for any inaccuracy, misrepresentation or breach of this Restated Agreement prior
to termination.
ARTICLE IX--SURVIVAL OF REPRESENTATIONS
AND WARRANTIES; INDEMNIFICATION
9.1 INDEMNIFICATION BY THE WEB SHAREHOLDERS.
(a) If the Closing has occurred, subject to the terms and conditions of
this ARTICLE IX, the Web Shareholders shall indemnify Parent, and its
officers, directors, agents and representatives (THE "INDEMNITEES"), from
and in respect of, and hold the Indemnitees harmless against, any and all
damages, fines, penalties, losses, liabilities, excise and other taxes,
judgments, and deficiencies (including without limitation amounts paid in
settlement and interest and reasonable out-of-pocket legal and accounting
fees), but which amount shall be offset or reduced by the amount of any
insurance proceeds received by Parent in respect of any of the foregoing,
incurred or suffered by any of the Indemnitees ("DAMAGES") resulting from,
relating to or in connection with any misrepresentation or breach of
warranty of the Web Shareholders contained in this Restated Agreement.
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(b) The Web Shareholders acknowledge that their indemnification
obligations hereunder are solely in their capacity as former shareholders of
Web, and, accordingly, the indemnification obligations in this ARTICLE IX
shall not entitle any Web Shareholder who was or is a current or former
officer, director or employee of Web to any indemnification from Web
pursuant to the organizational or governing documents of Web or pursuant to
this Restated Agreement.
9.2 METHOD OF ASSERTING CLAIMS.
(a) Prior to the date (THE "REPORT DATE") that is thirty (30) days after
the completion of Parent's audit report by Parent's independent auditors for
the fiscal year ended December 31, 1999, each Indemnitee shall give written
notice (THE "CLAIM NOTICE") to the Representative, as agent for the Web
Shareholders, of any and all claims or events known to it which gives rise
to a claim for indemnification hereunder by the Indemnitee against the Web
Shareholders (AN "INDEMNIFIABLE CLAIM"). The Claim Notice shall specify the
nature and estimated amount of such claimed Damages (THE "CLAIMED AMOUNT").
In the case of any claim for indemnification hereunder arising out of a
claim, action, suit or proceeding brought by any Person who is not a party
to this Restated Agreement (A "THIRD-PARTY CLAIM"), prior to the Report
Date, the Indemnitee also shall give the Representative, as agent for the
Web Shareholders, copies of any written claims, process or legal pleadings
with respect to such Third-Party Claim.
(b) Within forty-five (45) days after delivery of a Claim Notice, the
Representative shall notify the Parent in writing of his objections, if any,
to the claim. If the Representative has no objections to the claim, the
Representative shall remit to the Parent the Claimed Amount within thirty
(30) days. If the Representative has objections to the claim, the
Representative and the Indemnitee shall proceed in good faith to negotiate a
resolution of the dispute regarding the claim, and, if not resolved through
negotiations, such dispute shall be resolved by litigation in an appropriate
court of competent jurisdiction.
9.3 THIRD PARTY CLAIMS.
(a) Except as otherwise provided in paragraph (c) below, the
Representative, as agent for the Web Shareholders, may elect to compromise
or defend, at the Web Shareholders' own expense and by the Web Shareholders'
own counsel reasonably satisfactory to the Indemnitee, any Third-Party
Claim; provided that (i) the Representative provides the Indemnitee with
reasonable evidence that the Web Shareholders will have the financial
resources to defend against such claim and fulfill their indemnification
obligations hereunder; and (ii) the giving of a Defense Notice (as defined
below) by the Representative shall constitute an acknowledgment by the Web
Shareholders of their obligation to indemnify the Indemnitee with respect to
such Third-Party Claim in accordance with the terms of this ARTICLE IX. If
the Representative, as agent for the Web Shareholders, elects to compromise
or defend a Third-Party Claim, the Representative shall, within thirty
(30) days of its receipt of the notice provided pursuant to SECTION 9.2(a)
hereof (or sooner, if the nature of such Third-Party Claim so requires),
notify the related Indemnitee of its intent to do so (A "DEFENSE NOTICE"),
and such Indemnitee shall reasonably cooperate in the compromise of, or
defense against, such Third-Party Claim. The Web Shareholders shall be
responsible for the payment of such Indemnitee's actual out-of-pocket
expenses (other than legal and accounting fees) incurred in connection with
such cooperation, and such expenses shall constitute Damages incurred or
suffered by Parent within the meaning of SECTION 9.1(a) hereof. After notice
from the Representative, as agent for the Web Shareholders, to an Indemnitee
of its election to assume the defense of a Third-Party Claim, the Web
Shareholders shall not be liable to such Indemnitee under this ARTICLE IX
for any legal expenses subsequently incurred by such Indemnitee in
connection with the defense thereof. If the Representative, as agent for the
Web Shareholders, elects not to compromise or defend against a Third-Party
Claim, or fails to notify an Indemnitee of its election as provided in this
SECTION 9.3, such Indemnitee may pay, compromise or defend such Third-Party
Claim on
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behalf of and for the account and risk of the Web Shareholders (and any
amount paid or expenses incurred in connection therewith shall constitute
Damages incurred or suffered by Parent within the meaning of SECTION 9.1(a)
hereof). The Representative may not consent to entry of any judgment or
enter into any settlement without the written consent of each related
Indemnitee (which consent shall not be unreasonably withheld), unless such
judgment or settlement provides solely for money damages or other money
payments for which such Indemnitee is entitled to indemnification hereunder
and includes as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnitee of a release from all liability in respect of
such Third-Party Claim.
(b) In respect of any claim, action, suit or proceeding brought by a
taxing authority in respect of Taxes for which the Web Shareholders may be
required to indemnify the Parent (A "TAX CLAIM"), the Representative, as
agent for the Web Shareholders, shall have the sole right to control any Tax
Claim, provided, however, that the Representative shall provide the
Indemnitee with copies of all correspondence with any taxing authority in
connection with any such Tax Claim and shall keep the Indemnitee reasonably
informed of all progress with such taxing authority, and provided further
that the Representative shall consult with the Indemnitee in good faith in
contesting any proposed adjustment and shall consider any reasonable advice
from the Indemnitee concerning such Tax Claim so long as the Representative,
as agent for the Web Shareholders, shall (subject to the immediately
following sentence) ultimately be entitled to control any such Tax Claim
concerning any indemnity obligation of the Web Shareholders. The
Representative shall not be entitled to compromise or settle any Tax
liability of the Company for any pre-Closing Period that would have the
effect of materially decreasing the Company's deductions for credits or
materially increasing the Company's taxable income for any taxable year or
period subsequent to the pre-Closing Period without the prior written
consent of Parent, which consent shall not be unreasonably withheld. Parent
will cooperate fully with Representative in defending any Tax Claim.
(c) If there is a reasonable likelihood that a Third-Party Claim may
have a material adverse effect on an Indemnitee, other than as a result of
money damages or other money payments for which such Indemnitee is entitled
to indemnification hereunder, such Indemnitee will have the right, after
consultation with the Representative, and at the cost and expense of the Web
Shareholders (which costs and expenses, other than legal and accounting
fees, shall constitute Damages within the meaning of SECTION 9.1(a) hereof
to the extent provided therein), to defend such Third-Party Claim. If the
Third-Party Claim involves a third party with whom Parent has a significant
on-going or prospective relationship, the Indemnitee will have the right,
after consultation with the Representative, and at the cost and expense of
the Web Shareholders (which costs and expenses, other than legal and
accounting fees, shall constitute Damages within the meaning of
SECTION 9.1(a) hereof to the extent provided therein), to defend such
Third-Party Claim; provided that the Web Shareholders shall not be obligated
to pay Damages to the extent it is determined (by agreement between the
Representative and Indemnitees or by arbitration or court judgment) that the
Third-Party Claim was settled on terms that were not fair and reasonable to
the Indemnitors.
9.4 SURVIVAL. The representations and warranties of Web set forth in this
Restated Agreement shall survive the Closing and shall continue until the Report
Date. The representations and warranties shall not be affected by any
examination made for or on behalf of Parent or the knowledge of any of Parent's
officers, directors, stockholders, employees or agents, except that the
representations and warranties are qualified by the matters disclosed in the
Disclosure Schedules to the representations and warranties of Web and the Web
Shareholders contained in ARTICLE II hereof and Parent agrees that Parent has
knowledge of such matters. Notwithstanding anything to the contrary herein, if a
claim for indemnification is made before the expiration of the periods of
survival set forth above in this
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SECTION 9.4, then (notwithstanding the expiration of such time period) the
representation or warranty applicable to such claim shall survive until, but
only for purposes of, the resolution of such claim.
9.5 LIMITATIONS.
(a) The Web Shareholders shall not be liable under this ARTICLE IX
unless and until the aggregate amount of Damages incurred or suffered by
Indemnitees exceeds $100,000, (at which point the Web Shareholders shall
become liable for the entire amount of such Damages in excess of $75,000).
For purposes of the preceding sentence, no independent claims of less than
$1,000 may be made; PROVIDED, HOWEVER, that all claims arising out of a
common set of facts shall be aggregated for purposes of determining whether
the $1,000 threshold has been met.
(b) The Web Shareholders' liability under this ARTICLE IX shall not
exceed $850,000.
(c) The Web Shareholders may, at their option, satisfy their
indemnification obligations under this Restated Agreement by (i) the payment
of that amount of cash sufficient to satisfy such indemnification claim, but
in any event not exceeding the amount set forth in SECTION 9.5(b) hereof,
and subject to the provisions of SECTION 9.5(a) hereof; or (ii) the delivery
of stock certificates representing that number of shares of Parent Common
Stock sufficient to satisfy such indemnification claim, the value of which
shall be determined in accordance with SECTION 9.5(d) hereof; PROVIDED,
HOWEVER, that any stock certificates delivered in satisfaction of an
indemnification claim must be delivered to Parent within three (3) business
days following (as applicable) (A) the date calculated in accordance with
SECTION 9.2 or SECTION 9.3 hereof, if the claim is not in dispute;
(B) resolution of such indemnification claim, whether prior to or following
commencement of litigation; or (C) the entry of a final and non-appealable
judgment by a court of competent jurisdiction.
(d) The parties hereto agree that, for purposes of valuing shares of
Parent Common Stock delivered pursuant to SECTION 9.5(c) to satisfy any
indemnification claims pursuant to SECTION 9.2 or SECTION 9.3, Parent Common
Stock shall be valued at a price per share equal to the greater of: (A) the
weighted average of the closing prices, as reported on the NYSE, of the
Parent Common Stock on the twenty (20) trading days prior to the date on
which the stock certificates for the Parent Common Stock are to be delivered
pursuant to clause (ii) of SECTION 9.5(c), or (B) $5.50.
(e) No claim for indemnification pursuant to SECTION 9.1 shall be made
unless asserted by a written notice given to the Representative on or before
the Report Date.
9.6 THE REPRESENTATIVE.
(a) Web and the Web Shareholders hereby authorize, direct and appoint
Xxxx to act as sole and exclusive agent, attorney-in-fact and representative
of the Web Shareholders (THE "REPRESENTATIVE"), and authorizes and directs
the Representative to (i) take any and all actions (including without
limitation executing and delivering any documents, incurring any costs and
expenses for the account of the Web Shareholders (which will constitute
Damages incurred or suffered by Parent within the meaning of SECTION 9.1(a)
hereof) and making any and all determinations) which may be required or
permitted by this Restated Agreement to be taken by the Web Shareholders or
the Representative, (ii) exercise such other rights, power and authority as
are authorized, delegated and granted to the Representative hereunder in
connection with the transactions contemplated hereby and (iii) exercise such
rights, power and authority as are incidental to the foregoing. Any such
actions taken, exercises of rights, power or authority, and any decision or
determination made by the Representative consistent therewith, shall be
absolutely and irrevocably binding on each indemnifying party as if such
indemnifying party personally had taken such action, exercised such rights,
power or authority or made such decision or determination in such
indemnifying party's individual capacity. Notwithstanding any other
provision of this Restated Agreement, if the Closing occurs, then with
respect to the matters covered by ARTICLE IX, (i) each
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of the Web Shareholders irrevocably relinquishes such Web Shareholder's
right to act independently and other than through the Representative, except
with respect to the removal of the Representative or appointment of a
successor Representative as provided in SECTION 9.6(b) below, and (ii) no
Web Shareholders shall have any right under this Restated Agreement or
otherwise to institute any suit, action or proceeding against Web or Parent
with respect to any such matter, any such right being irrevocably and
exclusively delegated to the Representative. The Representative hereby
acknowledges and accepts the foregoing authorization and appointment and
agrees to serve as the Representative in accordance with this Restated
Agreement.
(b) The Representative shall serve as Representative until his
resignation, removal from office, incapacity or death; provided, however,
that the Representative shall not have the right to resign without
(i) prior written notice to the Web Shareholders, and (ii) picking a
successor reasonably satisfactory to Parent to serve until a successor
thereto is elected by the Web Shareholders. The Representative may be
removed at any time, and a successor representative, reasonably satisfactory
to Parent, may be appointed, pursuant to written action by Web Shareholders.
Any successor to the Representative shall, for purposes of this Restated
Agreement, be deemed to be, from the time of the appointment thereof in
accordance with the terms hereof, the Representative, and from and after
such time, the term "REPRESENTATIVE" as used herein and therein shall be
deemed to refer to such successor. No appointment of a successor shall be
effective unless such successor agrees in writing to be bound by the terms
of this Restated Agreement.
(c) The Representative shall be permitted to retain counsel, consultants
and other advisors and shall promptly notify Parent after retaining any such
Person.
(d) The provisions of this SECTION 9.6 shall in no way impose any
obligations on Parent (other than those set forth in paragraph (c) above).
In particular, notwithstanding any notice received by Parent to the contrary
(except any notice of the appointment of a successor Representative approved
by Parent in accordance with paragraph (b) of this SECTION 9.6), Parent
shall be entitled to assume that all actions, decisions and determinations
of the Representative are fully authorized by the Web Shareholders.
(e) The Representative shall not be liable to the Web Shareholders for
the performance of any act or the failure to act so long as he acted or
failed to act in good faith in what he reasonably believed to be the scope
of his authority and for a purpose which he reasonably believed to be in the
best interests of the Web Shareholders.
9.7 INDEMNIFICATION BY THE PARENT.
(a) INDEMNITY. If the Closing has occurred, subject to the terms and
conditions of this SECTION 9.7, Parent shall indemnify the Web Shareholders
from and in respect of all, and hold the Web Shareholders harmless against,
any and all damages, fines, penalties, losses, liabilities, judgments and
deficiencies (including without limitation amounts paid in settlement and
interest) ("WEB SHAREHOLDER DAMAGES") resulting from, relating to or in
connection with any misrepresentation or breach of warranty of the Parent
contained in this Restated Agreement.
(b) SURVIVAL. The representations and warranties of Parent set forth
in this Restated Agreement shall survive the Closing and shall continue
until the Report Date. The representations and warranties shall not be
affected by any examination made for or on behalf of Web or Web Shareholders
or the knowledge of any of the Web's officers, directors, stockholders,
employees or agents, except that the representations and warranties are
qualified by the matters disclosed in the Disclosure Schedules to the
representations and warranties of the Parent contained in ARTICLE III
hereof, and Web agrees that Web has knowledge of such matters.
Notwithstanding anything to the contrary herein, if a claim for
indemnification is made before the expiration of the periods of
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survival set forth above in this SECTION 9.7, then (notwithstanding the
expiration of such time period) the representation or warranty applicable to
such claim shall survive until, but only for purposes of, the resolution of
such claim.
(c) LIMITATIONS. Parent shall not be liable under this SECTION 9.7
unless and until the aggregate amount of Web Shareholder Damages incurred or
suffered by the Web Shareholders exceeds $100,000 (at which point Parent
shall become liable for the entire amount of Web Shareholder Damages in
excess of $75,000). Furthermore, the liability of Parent under this
SECTION 9.7 shall be $850,000. No claim for indemnification pursuant to
SECTION 9.7 shall be made unless asserted by a written notice given to
Parent on or before the Report Date.
ARTICLE X--MUTUAL RELEASE
10.1 MUTUAL RELEASE OF ALL CLAIMS.
(a) Parent, for itself and for all of its stockholders, directors,
officers, agents, employees, representatives, divisions, subsidiaries,
affiliates, insurers, successors and assigns, hereby releases, remises,
acquits and forever discharges Web and the Web Shareholders, and each of
them and each of their respective stockholders, directors, officers, agents,
employees, representatives, divisions, parents, subsidiaries, affiliates,
insurers, successors and assigns, of and from any and all manner of claims,
actions, causes of action, suits, debts, dues, accounts, contracts,
agreements, continuing obligations, judgments, claims and demands
whatsoever, whether in law or in equity, which now exist or may hereafter
arise from any matter, fact, circumstance, happening or thing whatsoever
occurring or failing to occur in connection with the negotiation, execution
and performance of their respective obligations under the June 3 Web YP
Agreement.
(b) Web and the Web Shareholders, each for itself and for all of their
respective stockholders, directors, officers, agents, employees,
representatives, divisions, subsidiaries, affiliates, insurers, successors
and assigns, hereby releases, remises, acquits and forever discharges Parent
and its stockholders, directors, officers, agents, employees,
representatives, divisions, parents, subsidiaries, affiliates, insurers,
successors and assigns, of and from any and all manner of claims, actions,
causes of action, suits, debts, dues, accounts, contracts, agreements,
continuing obligations, judgments, claims and demands whatsoever, whether in
law or in equity, which now exist or may hereafter arise from any matter,
fact, circumstance, happening or thing whatsoever occurring or failing to
occur in connection with the negotiation, execution and performance of its
obligations under the June 3 YPtel Agreement.
(c) Parent and each of Web and the Web Shareholders hereby represent,
warrant and acknowledge that the mutual covenants and agreements in this
ARTICLE X are made in good faith.
10.2 COVENANT NOT TO XXX.
(a) Parent hereby agrees that it will not institute any action against
Web and the Web Shareholders arising out of the June 3 Web YP Agreement,
including, but not limited to, any claim for contractual indemnity or
implied indemnity.
(b) Each of Web and the Web Shareholders hereby agrees that it will not
institute any action against Parent arising out of the June 3 Web YP
Agreement, including, but not limited to, any claim for contractual
indemnity or implied indemnity.
10.3 NO ADMISSION OF LIABILITY. None of Parent, Web or the Web
Shareholders admits liability to any other party hereto and, in fact, each of
Parent, Web and the Web Shareholders denies any liability relating to the
June 3 Web YP Agreement.
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ARTICLE XI--AMENDMENT AND WAIVER
11.1 AMENDMENT OF THIS RESTATED AGREEMENT. Prior to Parent stockholder
approval and except as is otherwise required by Applicable Law, this Restated
Agreement may be amended by the parties hereto at any time by execution of an
instrument in writing signed on behalf of each of the parties hereto. Following
receipt of approval by the Parent shareholders, the parties hereto acknowledge
and agree that this Restated Agreement may be amended by the parties hereto by
execution of an instrument in writing signed on behalf of each of the parties
hereto; PROVIDED, HOWEVER, that any such amendment shall not have a material
adverse effect upon Parent.
11.2 EXTENSION; WAIVER. At any time prior to the Effective Time, Parent
and Acquisition Subsidiary, on the one hand, and Web and the Web Shareholders,
on the other, may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations of the other party hereto, (ii) waive any
inaccuracies in the representations and warranties made by such other party
contained herein or in any document delivered pursuant hereto, and (iii) waive
compliance with any of the agreements or conditions for the benefit of such
party contained herein. Any agreement on the part of a party hereto to any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party; PROVIDED, HOWEVER, that an extension pursuant to
SECTION 1.2(b) hereof need not be set forth in writing in order to be effective,
unless such extension is to a date after March 1, 2000.
ARTICLE XII--GENERAL PROVISIONS
12.1 NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or by commercial
delivery service, or mailed by registered or certified mail (return receipt
requested) or sent via facsimile (with acknowledgment of complete transmission)
to the parties at the following addresses (or at such other address for a party
as shall be specified by like notice):
(a) if to Parent, to:
Advanced Communications Group, Inc.
000 Xxxxx Xxxxx Xxxx Xxxx, Xxxxx 000
Xx. Xxxxx, Xxxxxxxx 00000
Attn: Xx. Xxxxxxx X'Xxxx
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxxxx Xxxxxxx Xxxxx Xxxxxx LLP
000 Xxxxx Xxxxxx, Xxxxx 0000
Xx. Xxxxx, Xxxxxxxx 00000-0000
Attn: Xx. Xxxxx X. Adoor
Facsimile: (000) 000-0000
(b) if to Web and Web Shareholders, to:
Web YP, Inc.
0000 Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxx 00000
Attn: Xx. Xxxxxxx X. Xxxx
Facsimile: (000) 000-0000
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with a copy to:
Xxxxxxxxx & Xxxxxxxx
000 Xxxxxx Xxxxxx
00(xx) Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Attn: Xx. Xxxx X. Xxxxx
Facsimile: (000) 000-0000
12.2 INTERPRETATION. The words "INCLUDE," "INCLUDES" and "INCLUDING" when
used herein shall be deemed in each case to be followed by the words "without
limitation". The table of contents and headings contained in this Restated
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Restated Agreement. All Disclosure Schedules
to this Restated Agreement constitute a part of this Restated Agreement as if
set forth in full herein and are incorporated herein.
12.3 COUNTERPARTS. This Restated Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
12.4 ENTIRE AGREEMENT; ASSIGNMENT. Subject to its becoming effective in
accordance with SECTION 1.2 hereof, this Restated Agreement (including, but not
limited to, the Recitals hereto), the Disclosure Schedules hereto, and the
documents and instruments and other agreements among the parties hereto
referenced herein: (i) constitute the entire agreement among the parties with
respect to the subject matter hereof and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof including, but not limited to, (A) the June 3 Web YP
Agreement; and (B) the Letter of Intent dated April 11, 1999 by and among the
Parent, the Company, Web, Big Stuff and X'Xxxx and the Confidentiality Agreement
dated April 11, 1999 by and among Parent, the Company, Web, Big Stuff and
X'Xxxx; (ii) are not intended to confer upon any Person not a party hereto any
rights or remedies hereunder except that the Representative shall have the
express rights articulated in ARTICLE IX; and (iii) shall not be assigned by
operation of law or otherwise, except that Parent may assign its rights and
delegate its obligations hereunder to its affiliates, provided that Parent shall
remain liable hereunder.
12.5 SEVERABILITY. In the event that any provision of this Restated
Agreement or the application thereof, becomes or is declared by a court of
competent jurisdiction to be illegal, void or unenforceable, the remainder of
this Restated Agreement will continue in full force and effect and the
application of such provision to other Persons or circumstances will be
interpreted so as reasonably to effect the intent of the parties hereto so long
as consideration of the Restated Agreement is not materially affected for any
party hereof. The parties further agree to replace such void or unenforceable
provision of this Restated Agreement with a valid and enforceable provision that
will achieve, to the extent possible, the economic, business and other purposes
of such void or unenforceable provision.
12.6 OTHER REMEDIES. Except as otherwise provided herein, any and all
remedies herein expressly conferred upon a party will be deemed cumulative with
and not exclusive of any other remedy conferred hereby, or by law or equity upon
such party, and the exercise by a party of any one remedy will not preclude the
exercise of any other remedy.
12.7 GOVERNING LAW. This Restated Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof. Each of the parties hereto irrevocably consents to the exclusive
jurisdiction and venue of any court within the State of California, City and
County of
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San Francisco, in connection with any matter based upon or arising out of this
Restated Agreement or the matters contemplated herein, agrees that process may
be served upon them in any manner authorized by the laws of the State of
California, City and County of San Francisco for such Persons and waives and
covenants not to assert or plead any objection which they might otherwise have
to such jurisdiction, venue and such process.
12.8 RULES OF CONSTRUCTION. The parties hereto agree that they have been
represented by counsel during the negotiation and execution of this Restated
Agreement and, therefore, waive the application of any law, regulation, holding
or rule of construction providing that ambiguities in an agreement or other
document will be construed against the party drafting such agreement or
document.
ARTICLE XIII--DEFINITIONS
13.1 DEFINITIONS.
"Acquisition Subsidiary" shall have the meaning ascribed to it in the
preamble hereto.
"Active Parent Subsidiaries" shall mean Xxxxx; FirsTel; Value; Great Western
Directories, Inc.; Telecom Resources, Inc.; the Switchboard of Oklahoma
City, Inc.; Long Distance Management of Kansas, Inc.; Long Distance Management
II, Inc.; and National Telecom, a proprietorship.
"Affiliate Agreements" shall have the meaning set forth in SECTION 4.8
hereof.
"Anniversary Date" shall mean the first anniversary of the Closing Date.
"Associates" shall mean affiliates of any Person (including, without
limitation, directors, officers, employees, agents, representatives and
shareholders or any affiliates or associates thereof).
"Benefit Plan" shall have the meaning ascribed to such term in SECTION 2.14
hereof.
"Big Stuff" shall have the meaning ascribed to such term in Recital E
hereto.
"Certificate of Merger" shall have the meaning ascribed to such term in
SECTION 1.1 hereof.
"Certificates" shall mean the certificates which, prior to the Merger,
represented the Web Shares, and shall include a certificate issued upon due
execution and delivery of an affidavit of loss and a bond, if required by
Parent, in the event that a Web Shareholder is unable to produce and deliver, at
the Closing, the original certificate which prior to the Merger, represented any
Web Shares.
"Claim Notice" shall have the meaning ascribed to such term in
SECTION 9.2(a) hereof.
"Claimed Amount" shall have the meaning ascribed to such term in
SECTION 9.2(a) hereof.
"Class A Special Shares" shall have the meaning set forth in the Restated
Company Agreement.
"CLEC Operations" shall mean Xxxxx, FirsTel, Valu, and such other non-yellow
pages operating subsidiaries or operations of Parent as shall be determined by
the Board of Directors of Parent.
"Closing" shall mean the closing of the Merger.
"Closing Date" shall mean the date on which the Closing actually occurs.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and the
Treasury regulations thereunder.
"Company" shall have the meaning set forth in Recital E hereto.
"Company Shareholders" shall have the meaning set forth in Recital E hereto.
"Consent" shall have the meaning ascribed to such term in SECTION 2.5
hereof.
"Conversion Stock" shall have the meaning ascribed to such term in
SECTION 4.9 hereof.
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"Convertible Note" shall have the meaning ascribed to such term
SECTION 1.10 hereof.
"Corporation Laws" shall have the meaning ascribed to such term in
SECTION 1.1 hereof.
"Damages" shall have the meaning ascribed to such term in SECTION 9.1(a)
hereof.
"Defense Notice" shall have the meaning ascribed to such term in
SECTION 9.3(a) hereof.
"Disclosure Schedules" shall mean, collectively, that information required
to be delivered by Web to Parent, and by Parent to Web, pursuant to this
Restated Agreement.
"Effective Time" shall have the meaning ascribed to such term in
SECTION 1.2 hereof.
"Enforceability Exceptions" shall have the meaning ascribed to such term in
SECTION 2.4 hereof.
"Environmental Laws" shall have the meaning ascribed to such term in
SECTION 2.17 hereof.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended, together with all regulations thereunder.
"Event" shall mean any event, occurrence, fact, condition, change,
development or effect.
"Exchange Ratio" shall have the meaning ascribed to such term in
SECTION 1.3 hereof.
"Extraordinary Transactions" shall have the meaning ascribed to such term in
SECTION 6.7 hereof.
"Xxxxx" shall mean Xxxxx Long Distance Service, Inc.
"Final Order", with respect to any Consent of a Governmental Authority,
shall mean an action by the appropriate Governmental Authority as to which:
(i) no request for stay by such Governmental Authority of the action is pending,
no such stay is in effect, and, if any deadline for filing any such request is
designated by statute or regulation, it has passed; (ii) no petition for
rehearing or reconsideration of the action is pending before such Governmental
Authority, and no appeal or comparable administrative remedy is pending before
such Governmental Authority, and the time for filing any such petition, appeal
or administrative remedy has passed; (iii) such Governmental Authority does not
have the action under reconsideration on its own motion and the time for such
reconsideration has passed; and (iv) no appeal to a court, or request for stay
by a court, of the Governmental Authority action is pending or in effect, and if
any deadline for filing any such appeal or request is designated by statute or
rule, it has passed.
"FirsTel" shall mean FirsTel, Inc.
"Governmental Authority" shall mean a nation or government, any state or
other political subdivision thereof, any Person, authority or body exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government including, without limitation, any governmental or
regulatory authority, agency, department, board, commission or instrumentality,
any court, tribunal or arbitrator and any self-regulatory organization.
"Great Western Credit Agreement" shall mean the Loan Agreement dated as of
May 14, 1999, by and among Great Western Directories, Inc., the lenders
signatories thereto, and Bank of America National Trust and Savings Association
as Administrative Agent.
"Great Western Notes" shall have the meaning ascribed to such term in
Recital E hereto.
"Great Western Shareholders" shall have the meaning ascribed to such term in
Recital E hereto.
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.
"ICL" shall have the meaning ascribed to such term in Recital E hereto.
B-41
"Indemnifiable Claim" shall have the meaning ascribed to such term in
SECTION 9.2(a) hereof.
"Indemnitees" shall have the meaning ascribed to such term in
SECTION 9.1(a) hereof.
"Intellectual Property" shall have the meaning ascribed to such term in
SECTION 2.18 hereof.
"IP Claim Notice" shall have the meaning ascribed to such term in
SECTION 2.18 hereof.
"IRS" shall mean the United States Internal Revenue Service, or any
successor thereto.
"June 3 Web YP Agreement" shall have the meaning ascribed to such term in
SECTION 1.2(a) hereof.
"Law" shall mean applicable provision of any constitution, treaty, statute,
law, code, rule, regulation, ordinance, policy or order of any Governmental
Authority or other matters having the force of law including, but not limited
to, any orders, decisions, injunctions, judgments, awards and decrees of or
agreements with any court or other Governmental Authority.
"Letter of Transmittal" shall have the meaning ascribed to such term in
SECTION 1.5 hereof.
"Litigation" shall have the meaning ascribed to such term in SECTION 2.7
hereof.
"Merger" shall have the meaning ascribed to such term in Recital B hereto.
"Merger Consideration" shall have the meaning ascribed to such term in
SECTION 1.3 hereof.
"Multi-employer Plan" shall have the meaning ascribed to such term in
SECTION 2.14 hereof.
"NYSE" shall mean the New York Stock Exchange, Inc.
"X'Xxxx" shall have the meaning ascribed to such term in the preamble
hereto.
"Parent" shall have the meaning ascribed to such term in the Preamble
hereto.
"Parent Common Stock" shall have the meaning ascribed to such term in
SECTION 1.3 hereof.
"Parent Financial Statements" shall have the meaning ascribed to such term
in SECTION 3.8 hereof.
"Parent Guaranty" shall mean that certain Guaranty of Parent given pursuant
to the Great Western Credit Agreement.
"Parent Material Adverse Effect" shall mean a material adverse effect on
(i) the business, assets, condition (financial or otherwise), properties,
liabilities or the results of operations of Parent and the Active Parent
Subsidiaries taken as a whole, (ii) the ability of Parent to perform its
obligations set forth in this Restated Agreement and the Parent Transaction
Agreements, or (iii) the ability of Parent to timely consummate the transactions
contemplated by this Restated Agreement and the Parent Transaction Agreements.
"Parent Material Contract" shall have the meaning ascribed to such term in
SECTION 3.13 hereof.
"Parent Modified Representations" shall have the meaning ascribed to such
term in SECTION 7.2(a)(i) hereof.
"Parent Nonmodified Representation" shall have the meaning ascribed to such
term in SECTION 7.2(a)(i) hereof.
"Parent Permits" shall have the meaning ascribed to such term in
SECTION 3.11 hereof.
"Parent Securities Filings" shall have the meaning ascribed to such term in
SECTION 3.7 hereof.
"Parent Series A Stock "shall have the meaning ascribed to such term in
SECTION 3.2 hereof.
B-42
"Parent Transaction Agreements" shall have the meaning ascribed to such term
in SECTION 3.4 hereof.
"Person" shall mean and include an individual, corporation, partnership,
association, trust or other entity or organization, including a Governmental
Authority.
"Registration Statements" shall have the meaning ascribed to such term in
SECTION 6.1(b) hereof.
"Xxxx" shall have the meaning ascribed to such term in the preamble hereto.
"Report Date" shall have the meaning ascribed to such term in
SECTION 9.2(a) hereof.
"Representative" shall have the meaning ascribed to such term in
SECTION 9.6 hereof.
"Resignations" shall have the meaning ascribed to such term in SECTION 6.8
hereof.
"Restated Agreement" shall have the meaning ascribed to it in the preamble
hereto.
"Restated Big Stuff Agreement" shall mean that certain Amended and Restated
Acquisition Agreement dated as of October 26, 1999, among the Parent, ACG
Acquisition VII Corp., Big Stuff and the Big Stuff shareholders.
"Restated Company Agreement" shall have the meaning set forth in Recital E
hereto.
"SEC" shall mean the U.S. Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended, and all
rules and regulations promulgated thereunder.
"Securities Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and all rules and regulations promulgated thereunder.
"Surviving Corporation" shall have the meaning ascribed to such term in
SECTION 1.1 hereof.
"Surviving Corporation Common Stock" shall have the meaning ascribed to such
term in SECTION 1.3 hereof.
"Surviving Corporation Material Adverse Effect" shall mean a material
adverse effect on (i) the business, assets, condition (financial or otherwise),
properties, liabilities or the results of operations of the Surviving
Corporation, or (ii) the ability to timely consummate the transactions
contemplated by this Restated Agreement.
"Tax" shall have the meaning ascribed to such term in SECTION 2.15(a)
hereof.
"Tax Claim" shall have the meaning ascribed to such term in SECTION 9.3(b)
hereof.
"Third-Party Claim" shall have the meaning ascribed to such term in
SECTION 9.2(a) hereof.
"Transaction Expenses" shall have the meaning ascribed to such term in
SECTION 5.9 hereof.
"Valu" shall mean, collectively, Valu-line of Louisiana, Inc. and Valu-line
of Longview, Inc.
"Web" shall have the meaning ascribed to such term in the preamble hereto.
"Web Common Stock" shall have the meaning ascribed to such term in
SECTION 1.3 hereof.
"Web Financial Statements" shall have the meaning ascribed to such term in
SECTION 2.8 hereof.
"Web Material Adverse Effect" shall mean a material adverse effect on
(i) the business, assets, condition (financial or otherwise), properties,
liabilities or the results of operations of Web taken as a whole, (ii) the
ability of Web to perform its obligations set forth in this Restated Agreement
and the Web Transaction Agreements, or (iii) the ability of Web or the Web
Shareholders to timely
B-43
consummate the transactions contemplated by this Restated Agreement and the Web
Transaction Agreements.
"Web Material Contract" shall have the meaning ascribed to such term in
SECTION 2.13 hereof.
"Web Modified Representations" shall have the meaning ascribed to such term
in SECTION 7.3(a)(i) hereof.
"Web Nonmodified Representations" shall have the meaning ascribed to such
term in SECTION 7.3(a)(i) hereof.
"Web Permits" shall have the meaning ascribed to such term in SECTION 2.11
hereof.
"Web Real Property Leases" shall have the meaning ascribed to such term in
SECTION 2.19(b) hereof.
"Web Shares" shall have the meaning ascribed to such term in SECTION 1.3
hereof.
"Web Shareholders" shall have the meaning ascribed to such term in the
preamble hereto.
"Web Shareholder Damages" shall have the meaning ascribed to such term in
SECTION 9.7(a) hereof.
"Web Stock" shall have the meaning set forth in SECTION 2.2 hereof.
"Web Transaction Agreements" shall have the meaning ascribed to such term in
SECTION 2.4 hereof.
"WorldPages" shall have the meaning ascribed to such term in Recital E
hereto.
"Year 2000 Compliant" shall have the meaning ascribed to such term in
SECTION 2.27 hereof.
[SIGNATURES ON FOLLOWING PAGE]
B-44
[Signature pages to the Amended and Restated Web YP Acquisition Agreement]
IN WITNESS WHEREOF, Parent, the Acquisition Subsidiary, Web and the Web
Shareholders have caused this Restated Agreement to be signed by their duly
authorized respective officers, all as of the date first written above.
ADVANCED COMMUNICATIONS GROUP, INC.
By: /s/ XXXXXXX XXXXX
-----------------------------------------
Name: Xxxxxxx Xxxxx
Title: Chief Financial Officer and
Secretary
ACG ACQUISITION VI CORP.
By: /s/ XXXXXXX XXXXX
-----------------------------------------
Name: Xxxxxxx Xxxxx
Title: Secretary
WEB YP, INC.
By: /s/ XXXXXXX X. XXXX
-----------------------------------------
Title: CEO
/s/ XXXXXXX X'XXXX
-----------------------------------------
XXXXXXX X'XXXX
/s/ XXXXXXX X. XXXX
-----------------------------------------
XXXXXXX X. XXXX
B-45
ARTICLE I--TERMS OF THE MERGER..................................... B-2
1.1 THE MERGER.................................................. B-2
1.2 EFFECTIVE TIME.............................................. B-2
1.3 MERGER CONSIDERATION........................................ B-3
1.4 STOCKHOLDERS' RIGHT UPON MERGER............................. B-3
1.5 SURRENDER AND EXCHANGE OF SHARES............................ B-3
1.6 BYLAWS...................................................... B-4
1.7 OTHER EFFECTS OF MERGER..................................... B-4
1.8 TAX-FREE REORGANIZATION..................................... B-4
1.9 CONVERTIBLE NOTE............................................ B-4
1.11 ADDITIONAL ACTIONS.......................................... B-5
ARTICLE II--REPRESENTATIONS AND WARRANTIES OF WEB AND THE WEB
SHAREHOLDERS..................................................... B-5
2.1 ORGANIZATION AND GOOD STANDING.............................. B-5
2.2 CAPITALIZATION.............................................. B-5
2.3 SUBSIDIARIES................................................ B-6
2.4 AUTHORIZATION; BINDING AGREEMENT............................ B-6
2.5 GOVERNMENTAL APPROVALS...................................... B-6
2.6 NO VIOLATIONS............................................... B-6
2.7 LITIGATION.................................................. B-6
2.8 WEB FINANCIAL STATEMENTS.................................... B-7
2.9 ABSENCE OF CERTAIN CHANGES OR EVENTS........................ B-7
2.10 COMPLIANCE WITH LAWS........................................ B-8
2.11 PERMITS..................................................... B-8
2.12 FINDERS AND INVESTMENT BANKERS.............................. B-8
2.13 CONTRACTS................................................... B-8
2.14 EMPLOYEE BENEFIT PLANS...................................... B-8
2.15 TAXES AND RETURNS........................................... B-9
2.16 LIABILITIES................................................. B-10
2.17 ENVIRONMENTAL MATTERS....................................... B-10
2.18 INTELLECTUAL PROPERTY; FICTITIOUS NAMES..................... B-11
2.19 REAL ESTATE................................................. B-11
2.20 CORPORATE RECORDS........................................... B-11
2.21 TITLE TO AND CONDITION OF PERSONAL PROPERTY................. B-11
2.22 NO ADVERSE ACTIONS.......................................... B-11
2.23 LABOR MATTERS............................................... B-12
2.24 INSURANCE................................................... B-12
2.25 DISCLOSURE.................................................. B-12
2.26 TAX......................................................... B-12
2.27 YEAR 2000 COMPLIANCE........................................ B-12
ARTICLE III--REPRESENTATIONS AND WARRANTIES OF PARENT.............. B-13
3.1 ORGANIZATION AND GOOD STANDING.............................. B-13
3.2 CAPITALIZATION.............................................. B-13
3.3. SUBSIDIARIES................................................ B-13
3.4 AUTHORIZATION; BINDING AGREEMENT............................ B-14
3.5 GOVERNMENTAL APPROVALS...................................... B-14
3.6 NO VIOLATIONS............................................... B-14
3.7 SECURITIES FILINGS AND LITIGATION........................... B-14
3.8 PARENT FINANCIAL STATEMENTS................................. B-15
3.9 ABSENCE OF CERTAIN CHANGES OR EVENTS........................ B-15
3.10 COMPLIANCE WITH LAWS........................................ B-16
3.11 PERMITS..................................................... B-16
3.12 FINDERS AND INVESTMENT BANKERS.............................. B-16
3.13 CONTRACTS................................................... B-16
3.14 CORPORATE RECORDS........................................... B-16
3.15 TAX......................................................... B-16
3.16 DISCLOSURE.................................................. B-16
ARTICLE IV--ADDITIONAL COVENANTS OF WEB AND THE WEB
SHAREHOLDERS..................................................... B-17
4.1 NOTIFICATION OF CERTAIN MATTERS............................. B-17
4.2 ACCESS AND INFORMATION...................................... B-17
4.3 WEB SHAREHOLDER APPROVAL.................................... B-17
4.4 REASONABLE BEST EFFORTS..................................... B-18
4.5 COMPLIANCE.................................................. B-18
4.6 BENEFIT PLANS............................................... B-18
4.7 TAX OPINION CERTIFICATION................................... B-18
4.8 AFFILIATE AGREEMENTS........................................ B-18
4.9 TRANSFER RESTRICTIONS....................................... B-18
ARTICLE V--ADDITIONAL COVENANTS OF PARENT.......................... B-19
5.1 CONDUCT OF BUSINESS OF PARENT AND THE ACTIVE PARENT
SUBSIDIARIES.............................................. B-19
5.2 NOTIFICATION OF CERTAIN MATTERS............................. B-19
5.3 ACCESS AND INFORMATION...................................... B-20
5.4 COMPLIANCE.................................................. B-20
5.5 SEC AND SHAREHOLDER FILINGS................................. B-20
5.6 TAX TREATMENT............................................... B-20
5.7 EMPLOYMENT AND EMPLOYEE BENEFIT PLANS....................... B-20
5.8 EXPENSES....................................................
5.9 PARENT SHAREHOLDER APPROVAL.................................
ARTICLE VI--ADDITIONAL COVENANTS OF THE PARENT, WEB
AND THE WEB SHAREHOLDERS......................................... B-21
6.1 REGISTRATION OF SECURITIES.................................. B-21
6.3 CONSENTS.................................................... B-22
6.3 LEGAL REQUIREMENTS..........................................
6.4 PUBLIC ANNOUNCEMENTS........................................
6.5 CONDUCT OF BUSINESS PRIOR TO CLOSING DATE...................
6.7 NO SOLICITATION OF ACQUISITION PROPOSAL..................... B-26
6.8 RESIGNATIONS................................................ B-26
6.9 CONFIDENTIALITY............................................. B-26
ARTICLE VII--CONDITIONS TO CLOSING................................. B-27
7.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY TO CLOSING.......... B-27
7.2 ADDITIONAL CONDITIONS TO OBLIGATIONS OF SHAREHOLDERS AND
COMPANY................................................... B-29
7.3 ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF PARENT.......... B-30
ARTICLE VIII--TERMINATION AND ABANDONMENT.......................... B-31
8.1 TERMINATION................................................. B-31
8.2 PROCEDURE UPON TERMINATION.................................. B-32
ARTICLE IX--SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION.................................................. B-32
9.1 INDEMNIFICATION BY THE WEB SHAREHOLDERS..................... B-32
9.2 METHOD OF ASSERTING CLAIMS.................................. B-33
9.3 THIRD PARTY CLAIMS.......................................... B-33
9.4 SURVIVAL.................................................... B-34
9.5 LIMITATIONS................................................. B-35
9.6 THE REPRESENTATIVE.......................................... B-35
9.7 INDEMNIFICATION BY THE PARENT............................... B-36
ARTICLE X--MUTUAL RELAEASE......................................... B-37
10.1 MUTUAL RELEASE OF ALL CLAIMS................................ B-37
10.2 COVENANT NOT TO XXX......................................... B-37
10.3 NO ADMISSION OF LIABILITY................................... B-37
ARTICLE XI--AMENDMENT AND WAIVER................................... B-38
11.1 AMENDMENT OF THIS RESTATED AGREEMENT........................ B-38
11.2 EXTENSION; WAIVER........................................... B-38
ARTICLE XII--GENERAL PROVISIONS.................................... B-38
12.1 NOTICES..................................................... B-38
12.2 INTERPRETATION.............................................. B-39
12.3 COUNTERPARTS................................................ B-39
12.4 ENTIRE AGREEMENT; ASSIGNMENT................................ B-39
12.5 SEVERABILITY................................................ B-39
12.6 OTHER REMEDIES.............................................. B-39
12.7 GOVERNING LAW............................................... B-39
12.8 RULES OF CONSTRUCTION....................................... B-40
ARTICLE XIII--DEFINITIONS.......................................... B-40
13.1 DEFINITIONS................................................. B-40
SCHEDULES
Schedule 2.1 Jurisdictions of Incorporation and Qualification
Schedule 2.2 Capitalization
Schedule 2.5 Governmental Approvals
Schedule 2.6 No Violations
Schedule 2.7 Litigation
Schedule 2.9 Absence of Certain Changes or Events
Schedule 2.13 Contracts
Schedule 2.14 Employee Benefit Plans
Schedule 2.15 Taxes
Schedule 2.16 Liabilities
Schedule 2.17 Environmental Matters
Schedule 2.18 Intellectual Property
Schedule 2.19(b) Real Estate--Leased
Schedule 2.20 Corporate Records
Schedule 2.22 No Adverse Actions
Schedule 2.23 Labor Matters
Schedule 2.27 Year 2000 Compliance
Schedule 3.1 Parent Jurisdictions of Incorporation and Qualification
Schedule 3.2 Parent Securities Filings
Schedule 3.3 Parent Subsidiaries
Schedule 3.7(b) Parent Litigation
Schedule 3.8 Parent Liabilities
Schedule 3.9 Absence of Certain Changes or Events
Schedule 3.13 Parent Contracts
Schedule 6.6(b)(i) Web Securities Issuances, Etc.
Schedule 6.6(b)(ii) Parent Securities Issuances, Etc.
