Exhibit 2.3
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger, dated as of March 19, 2002 (the
"Effective Date"), is entered into by and among WWC Acquisition, Inc., a Texas
corporation, ("WWCA") and X-Xxxx.xxx, Inc., d/b/a the Company, a Texas
corporation (the "Company"). Wireless WebConnect!, Inc., a Delaware corporation
and the parent company of WWCA ("WWC") and the undersigned shareholders of the
Company (the "Shareholders"), are a party to this Agreement for the limited
purposes set forth herein.
RECITALS
WHEREAS, the board of directors of WWCA, WWC and the Company have
adopted this Agreement and Plan of Merger, providing for the merger of WWCA with
and into the Company (the "Merger") under the Texas Business Corporation Act
(the "TBCA") in accordance with the provisions of this Agreement and have
recommended the Merger to their respective shareholders and members for
approval; and
WHEREAS, the Merger is intended to qualify as a reorganization within
the meaning of Section 368(a) of the Code (as defined below).
ARTICLE I
DEFINITIONS
As used in this Agreement:
"Agreement" means this agreement, as it may be amended or modified and
in effect from time to time.
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Closing" is defined in Section 6.1.
"Closing Date" is defined in Section 6.1.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Company" is defined in the preamble to this Agreement.
"Constituent Corporations" means WWCA and the Company.
"Default" means an event described in Article VII.
"Effective Date" is defined in the preamble to this Agreement.
"Effective Time" means the time at which the Articles of Merger are
filed with the Secretary of State of the State of Texas, in accordance with the
TBCA.
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"Environmental Law" means any applicable Federal, state, foreign or
local law, statute, ordinance, rule, regulation, code, license, permit,
authorization, approval, consent, order, judgment, decree, injunction or
agreement with any governmental entity, (a) relating to the protection,
preservation or restoration of the environment (including, without limitation,
air, water vapor, surface water, groundwater, drinking water supply, surface
land, subsurface land, plant and animal life or any other natural resource), or
to human health or safety, or (b) the exposure to, or the use, storage,
recycling, treatment, generation, transportation, processing, handling,
labeling, release or disposal of Hazardous Substances, in each case as now in
effect, but excluding in any case the Occupational Safety & Health Act and any
other applicable law regulating workplace health or safety.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Excluded Taxes" means, in the case of a Person, taxes duties, levies,
imports, deductions, charges or withholdings imposed on its overall net income,
and franchise, privilege and similar taxes imposed on it, by (a) the
jurisdiction under the laws of which that Person is incorporated or organized or
resides, (b) the jurisdiction in which that Person's principal executive office
is located, or (c) any other jurisdiction in which that Person is doing business
or has been subject to tax.
"Exhibit" refers to an exhibit to this Agreement, unless another
document is specifically referenced.
"GAAP" means generally accepted accounting principles as in effect from
time to time, applied in a consistent manner.
"Hazardous Substance" means any substance presently listed, defined,
designated or classified as hazardous, toxic, radioactive or dangerous, or
otherwise regulated, under any Environmental Law, whether by type or by
quantity, including, without limitation, petroleum products or fractions or
derivatives thereof, or any substance containing any such substance as a
component.
"HomeMark Common Stock" means shares of the Company's common stock,
$.01 par value per share which are not classified as Series B Common Stock under
the Company's Articles of Incorporation, as amended.
"HomeMark Preferred Stock" means shares of the Company's preferred
stock, $.01 par value per share.
"HomeMark Series B Common Stock" means shares of the Company's common
stock, $.01 par value per share which are classified as Series B Common Stock
under the Company's Articles of Incorporation, as amended.
"HomeMark Stock" means the HomeMark Common Stock, the HomeMark Series B
Common Stock and the HomeMark Preferred Stock.
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"Indebtedness" of a Person means such Person's (a) obligations for
borrowed money, (b) obligations representing the deferred purchase price of
Property or services (other than accounts payable arising in the ordinary course
of such Person's business payable on terms customary in the trade), (c)
obligations, whether or not assumed, secured by Liens or payable out of the
proceeds or production from Property now or hereafter owned or acquired by such
Person, (d) obligations which are evidenced by notes, acceptances, or other
instruments, (e) obligations of such Person to purchase securities or other
Property arising out of or in connection with the sale of the same or
substantially similar securities or Property, (f) capitalized lease obligations
and (g) any other obligation for borrowed money or other financial accommodation
which in accordance with GAAP would be shown as a liability on the consolidated
balance sheet of such Person.
"Investment" of a Person means any loan, advance (other than
commission, travel and similar advances to officers and employees made in the
ordinary course of business), extension of credit (other than accounts
receivable arising in the ordinary course of business on terms customary in the
trade) or contribution of capital by such Person; stocks, bonds, mutual funds,
partnership interests, notes, debentures or other securities owned by such
Person; any deposit accounts and certificate of deposit owned by such Person;
and structured notes, derivative financial instruments and other similar
instruments or contracts owned by such Person.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, capitalized lease or other title retention
agreement).
"Material Adverse Effect" means, with respect to a Person, a material
adverse effect on (i) the business, Property, condition (financial or
otherwise), or results of operations of the Person taken as a whole, (ii) the
ability of the Person to perform its obligations under this Agreement, or (iii)
the validity or enforceability of this Agreement or the rights or remedies of
hereunder.
"Merger" is defined in the Recitals to this Agreement.
"Permitted Liens" means those Liens described in Section 7.1(h).
"Person" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
"Property" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets owned,
leased or operated by such Person.
"Securities Act" means the Securities Act of 1933, as amended.
"Schedule" refers to a specific schedule to this Agreement, unless
another document is specifically referenced.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
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"Shareholders" is defined in the preamble to this Agreement.
"Subsidiary" of a Person means (a) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(b) any partnership, limited liability company, association, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a Subsidiary of the Company.
"Substantial Portion" means, with respect to the Property of the
Company, Property which (a) represents more than 10% of the consolidated assets
of the Company as would be shown in the consolidated financial statements of the
Company as at the beginning of the twelve-month period ending with the month in
which such determination is made, or (b) is responsible for more than 10% of the
consolidated net sales or of the consolidated net income of the Company as
reflected in the financial statements referred to in clause (a) above.
"Surviving Company" is defined in Section 2.1.
"Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings, and any and all liabilities with
respect to the foregoing, but excluding Excluded Taxes.
"TBCA" is defined in the Recitals to this Agreement.
"WWC" is defined in the preamble to this Agreement.
"WWC Common Stock" means the common stock, $.01 par value per share, of
WWC.
"WWC Preferred Stock" means the preferred stock, $.01 par value per
share, of WWC.
"WWC Series B Preferred Stock" means the Series B Convertible Preferred
stock, $.01 par value per share, of WWC and containing the rights and
preferences set forth in Certificate of the Designations, Preferences, Rights
and Limitations of the Series B Preferred Stock of WWC, a copy of which is
attached hereto as EXHIBIT A.
"WWC Stock" means the WWC Common Stock and WWC Preferred Stock.
"WWCA" is defined in the preamble to this Agreement.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
ARTICLE II
THE MERGER
2.1 THE MERGER. Subject to the terms and conditions of this
Agreement and on the basis of the representations and warranties set forth
herein, at the Effective Time, WWCA will be merged
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with and into the Company in accordance with this Agreement, and the separate
existence of WWCA shall cease, and the Company shall continue as the surviving
corporation. The Company as it exists from and after the Effective Time, is
sometimes referred to hereinafter as the "Surviving Company."
2.2 EFFECT OF THE MERGER. Upon the effectiveness of the Merger,
the Surviving Company shall possess all the rights, privileges, immunities and
franchises, as well of a public as of a private nature, and be subject to all
the restrictions, disabilities and duties, of each of the Constituent
Corporations; and all property, real, personal and mixed, and all debts due to
any of the Constituent Corporations on whatever account, including subscriptions
to shares, and all other things in action and all and every other interest, of
or belonging to each of the Constituent Corporations, shall be vested in the
Surviving Company without further act or deed and without any transfer or
assignment having occurred; and all property, rights, privileges, immunities and
franchises, and all and every other interest shall be thereafter as effectually
the property of the Surviving Company as they were of the Constituent
Corporations, and the title to any real estate vested by deed or otherwise in
either of the Constituent Corporations shall not revert or be in any way
impaired by reason of the Merger; but all rights of creditors and all liens upon
any property of either of the Constituent Corporations shall be preserved
unimpaired, and all debts, liabilities and duties of the Constituent
Corporations shall thenceforth attach to the Surviving Company, and may be
enforced against it to the same extent as if said debts, liabilities and duties
had been incurred or contracted by it; and all other effects of the Merger
specified in the TBCA shall result therefrom.
2.3 CONSUMMATION OF THE MERGER. As soon as practicable after the
satisfaction or waiver of the conditions to this Agreement, the parties hereto
will cause the Merger to be consummated by filing with the appropriate agency of
the State of and Texas properly executed Articles of Merger, substantially in
the form attached as EXHIBIT B, incorporating, to the extent required by the
laws of the State of Texas, this Agreement.
2.4 ARTICLES OF INCORPORATION; BYLAWS; DIRECTORS AND OFFICERS. The
Articles of Incorporation of Surviving Company from and after the Effective Time
shall be the Articles of Incorporation of the Company in effect immediately
prior to the Effective Time, continuing until thereafter amended in accordance
with the provisions therein and as provided by the TBCA. The Bylaws of the
Surviving Company from and after the Effective Time shall be the Bylaws of the
Company as in effect immediately prior to the Effective Time, continuing until
thereafter amended in accordance with their terms and the Articles of
Incorporation of the surviving Corporation and as provided by the TBCA. The
initial directors of the Surviving Company shall the directors of the Company
immediately prior to the Effective Time, until their successors are elected and
qualified, and the initial officers of the Surviving Company shall be shall the
officers of the Company immediately prior to the Effective Time, until their
successors are duly elected and qualified.
2.5 CONVERSION OF SECURITIES. At the Effective Time, by virtue of
the Merger and without any action on the part of WWCA, the Company or any holder
of any shares of capital stock of the Company:
(a) Each share of HomeMark Stock that is held in the
treasury of the Company or any of its subsidiaries or owned of record by WWCA or
WWC or any of their subsidiaries shall be
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canceled and retired and no capital stock of the Surviving Company, cash or
other consideration shall be paid or delivered in exchange therefore.
(b) Each share of WWC Common Stock that is owned of
record by the Company or any of its subsidiaries shall be canceled and retired
and no capital stock of the Surviving Company, cash or other consideration shall
be paid or delivered in exchange therefore.
(c) Each remaining outstanding share of HomeMark Common
Stock and HomeMark Series B Common Stock shall be converted into the right to
receive a proportionate share (based solely on the number of shares of HomeMark
Stock without regard to designation) of an aggregate of 176,000 shares of duly
authorized, validly issued, fully paid and non-assessable shares of WWC Series B
Preferred Stock, without interest. The shares of WWC Series B Preferred Stock
shall be allocated among the Shareholders as provided in EXHIBIT C attached
hereto.
(d) MERGER PAYMENT PROCEDURE. As soon as practicable
after the Effective Time, the Surviving Company will distribute to holders of
record of HomeMark Stock so converted, upon surrender to the Surviving Company
of one or more certificates for such shares of HomeMark Stock for cancellation,
a certificate representing the proportionate share of WWC Series B Preferred
Stock due as a result of the Merger. In no event shall the holder of any
surrendered certificates for shares of HomeMark Stock be entitled to receive
interest on account of any shares of WWC Series B Preferred Stock due as a
result of the Merger.
2.6 CLOSING OF THE COMPANY TRANSFER BOOKS. At the Effective Time,
the stock transfer books of the Company shall be closed and no transfer of
shares of HomeMark Stock shall thereafter be made.
2.7 REORGANIZATION UNDER SECTION 368(a) OF THE CODE. The parties
intend that the Merger will qualify as a tax-free reorganization under Section
368(a) of the Code and this Agreement are to be interpreted to that effect. Each
party agrees to render to the other parties reasonable assistance to preserve
that tax treatment,, however, no representation is made by any party hereto as
to whether the transactions contemplated hereby will so qualify.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to WWCA and WWC that the statements
contained in this Article III are true and correct, except as set forth in the
Schedules delivered by the Company to the Company concurrently herewith and
which are attached hereto.
3.1 ORGANIZATION. The Company is in the case of a corporation duly
organized, validly existing and in good standing under the laws of the State of
Texas. Except as set forth on Schedule 3.1, the Company (a) is qualified or
licensed in all jurisdictions where such qualification or license is required to
own and operate its properties and conduct its business in the manner and at the
places presently conducted; (b) holds all franchises, grants, licenses,
certificates, permits, consents and orders, all of which are valid and in full
force and effect, from all applicable United States and foreign regulatory
authorities necessary to own and operate its properties and to conduct its
business in the manner and at the places presently conducted; and (c) has full
power and authority (corporate and other) to own, lease and operate its
respective properties and assets and to carry on its business
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as presently conducted and as proposed to be conducted, except, in each case,
where the failure to be so qualified or licensed or to hold such franchises,
grants, licenses, certificates, permits, consents and orders or to have such
power and authority would not, when taken together with all other such failures,
reasonably be expected to have a Material Adverse Effect with respect to the
Company. Except as set forth on Schedule 3.1, the Company does not directly or
indirectly own any equity or similar interest in, or any interest convertible
into or exchangeable or exercisable for, any equity or similar interest in, any
corporation, partnership, joint venture or other business association or entity.
3.2 CAPITAL STRUCTURE.
(a) As of the Effective Date, the authorized capital
stock of the Company consists of (i) 400,000,000 shares of common stock, $.01
per share, which consists of 375,000,000 shares of HomeMark Common Stock and
25,000,000 shares of HomeMark Series B Common Stock, and (ii) 25,000,000 shares
of HomeMark Preferred Stock. As of the Effective Date, (i) 138,367,810 shares of
HomeMark Common Stock, 25,000,000 shares of HomeMark Series B Common Stock and
no shares of HomeMark Preferred Stock were issued and outstanding, (ii) no
options or warrants for shares of HomeMark Stock were issued and outstanding;
and (iii) no shares of HomeMark Stock were held in the treasury of the Company.
All the outstanding shares of HomeMark Stock are duly authorized, validly
issued, fully paid and non-assessable. There are no bonds, debentures, notes or
other indebtedness having voting rights (or convertible or exchangeable into
securities having such rights) ("the Company Voting Debt") of the Company issued
and outstanding. Except as set forth in Schedule 3.2, there are no equity
interests of the Company authorized, issued or outstanding and there are no
existing (i) options, warrants, calls, preemptive rights, subscriptions or other
rights, convertible or exchangeable securities, agreements, arrangements or
commitments of any character, relating to the issued or unissued equity
interests of the Company, obligating the Company to issue, transfer or sell or
cause to be issued, transferred or sold any equity interest or the Company
Voting Debt of, or other equity interest in, the Company, (ii) securities
convertible into or exchangeable for such equity interests or (iii) obligations
of the Company to grant, extend or enter into any such option, warrant, call,
preemptive right, subscription or other right, convertible security, agreement,
arrangement or commitment.
(b) Except as set forth in SCHEDULE 3.2, there are no
voting trusts, proxies, shareholders agreements or other agreements or
understandings to which the Company is a party with respect to the voting or
transfer of the equity interests or capital stock of the Company. Except as set
forth in SCHEDULE 3.2, the Company is not a party to any agreement or
obligation, contingent or otherwise, to redeem, repurchase or otherwise acquire
or retire any equity interests of the Company, whether as a result of the
transactions contemplated by this Agreement or otherwise.
(c) the Company has not (i) made or agreed to make any
split of its equity interests or dividend, or issued or permitted to be issued
any equity interests, or securities exercisable for or convertible into equity
interests, of the Company, (ii), repurchased, redeemed or otherwise acquired any
equity or membership interests of the Company, or (iii) declared, set aside,
made or paid any dividends or other distributions on the outstanding equity
interests of the Company.
3.3 AUTHORIZATION AND VALIDITY. The Company has the power and
authority and legal right to execute and deliver this Agreement and to perform
its obligations hereunder. The execution and delivery by the Company of this
Agreement, the performance of its obligations hereunder have
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been duly authorized by proper corporate or other proceedings, and this
Agreement constitutes the legal, valid and binding obligation of the Company
enforceable against it in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally.
3.4 NO CONFLICT; CONSENT. Neither the execution and delivery by
the Company of this Agreement, nor the consummation of the transactions herein
contemplated, nor compliance with the provisions thereof will violate (a) any
law, rule, regulation, order, writ, judgment, injunction, decree or award
binding on the Company, or (b) the Company's articles of incorporation or
by-laws, or (c) except as set forth on SCHEDULE 3.4, the provisions of any
indenture, instrument or agreement to which the Company is a party or is
subject, or by which it, or its respective Property, is bound, or conflict with
or constitute a default thereunder, or result in, or require, the creation or
imposition of any Lien in, of or on the Property the Company pursuant to the
terms of any such indenture, instrument or agreement. No order, consent,
adjudication, approval, license, authorization, or validation of, or filing,
recording or registration with, or exemption by, or other action in respect of
any governmental or public body or authority, or any subdivision thereof, which
has not been obtained by the Company is required to be obtained by the Company
in connection with the execution and delivery of this Agreement, or the
legality, validity, binding effect or enforceability of any of this Agreement.
Except as set forth in SCHEDULE 3.4, no consent, approval or authorization of,
or notice to, any other person or entity, including, without limitation, parties
to loans, contracts, leases or other agreements, is required in connection with
the execution, delivery and performance of this Agreement by the Company or the
consummation by it of the transactions contemplated hereby.
3.5 COMPANY FINANCIAL STATEMENTS.
(a) The Company has delivered to WWCA and WWC a complete
and correct copy of the Company's unaudited financial statements for the
one-year period ended December 31, 2001 (the "the Company Financial
Statements"), as prepared by Xxxxxx Xxxxx, the Company's accountant. The Company
Financial Statements have been prepared on a consistent basis during the
relevant periods (except as may be disclosed in the notes thereto), and present
fairly the financial position and results of operations and changes in cash
flows of the Company as of the respective dates or for the respective periods
reflected therein.
(b) The Company has no assets or liabilities, contracts
or claims, of any nature that are not reported on their balance sheets or income
statements, other than for Taxes not yet due.
(c) The Company does not have any liabilities, debts,
claims or obligations of any nature (whether accrued, absolute, direct or
indirect, contingent or otherwise, whether due or to become due), and there is
no existing condition or set of circumstances which would reasonably be
expected, individually or in the aggregate, to result in such a liability,
except for liabilities or obligations incurred in the ordinary course of
business consistent with past practice since December 31, 2001, none of which
would, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect with respect to the Company.
3.6 MATERIAL ADVERSE CHANGE. Except as set forth on SCHEDULE 3.6,
since December 31, 2001 there has been no change in the business, Property,
condition (financial or otherwise) or results
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of operations of the Company which could reasonably be expected to have a
Material Adverse Effect with respect to the Company.
3.7 TAXES. Except as set forth on SCHEDULE 3.7, the Company has
filed all United States federal tax returns and all other tax returns which are
required to be filed and have paid all taxes due pursuant to said returns or
pursuant to any assessment received by the Company, except such taxes, if any,
as are being contested in good faith and as to which adequate reserves have been
provided on the Company Financial Statements and as to which no Lien exists. No
tax liens have been filed and no claims are being asserted with respect to any
such taxes. The charges, accruals and reserves on the books of the Company in
respect of any taxes or other governmental charges are adequate. The Company is
taxable as a "C" corporation for federal income tax purposes.
3.8 LITIGATION AND CONTINGENT OBLIGATIONS. There is no litigation,
arbitration, governmental investigation, proceeding or inquiry pending or, to
best knowledge of any of its officers, threatened against or affecting the
Company which could reasonably be expected to have a Material Adverse Effect
with respect to the Company. Other than any liability incident to any
litigation, arbitration or proceeding that could not reasonably be expected to
have a Material Adverse Effect with respect to the Company, to the best of the
Company's knowledge, the Company has no material contingent obligations not
provided for or disclosed in the Company Financial Statements.
3.9 MATERIAL AGREEMENTS. SCHEDULE 3.9 lists all material
agreements, contracts, leases, licenses and other instruments to which the
Company is a party. Except as set forth on SCHEDULE 3.9, the Company is not
party to any agreement containing any provision or covenant limiting in any
material respect the ability of the Company to (a) sell any products or services
of or to any other person, (b) engage in any line of business in any
geographical area or (c) compete with or obtain products or services from any
person or limiting the ability of any person to provide products or services to
the Company. All contracts, agreements, leases, licenses and other instruments
referred to in the Schedules hereto are valid and in full force and effect, and
true copies thereof have been heretofore delivered to the Company .
3.10 COMPLIANCE WITH LAWS. The Company has complied with all
applicable statutes, rules, regulations, orders and restrictions of any domestic
or foreign government or any instrumentality or agency thereof having
jurisdiction over the conduct of their respective businesses or the ownership of
their respective Property except for any failure to comply with any of the
foregoing which could not reasonably be expected to have a Material Adverse
Effect with respect to the Company.
3.11 OWNERSHIP OF PROPERTIES.
(a) SCHEDULE 3.11 contains a list of all material real
estate owned and leased by the Company. The Company has valid leasehold
interests in all material real estate leased by it. The current use of such
material owned and leased real estate by the Company does not violate in any
material respect the certificate of occupancy thereof or any material local
zoning or similar land use or government regulations.
(b) The Company has the right to use all material assets
(other than the real property which is represented and warranted in paragraph
(a) above) shown on the Company
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Financial Statements as presently used in the Company's business. To the best
knowledge of the Company, there is no material defect in the normal operating
condition and repair of the equipment owned or leased by the Company, other than
ordinary wear and tear in the normal course of business.
3.12 INTELLECTUAL PROPERTY; LICENSES. The Company possesses all
proprietary rights necessary to conduct their business and operations as
heretofore conducted or as proposed to be conducted by it. All proprietary
rights registered in the name of the Company and applications therefore filed by
the Company are listed on SCHEDULE 3.12. No event has occurred that permits, or
after notice or lapse of time or both would permit, the revocation or
termination of any of the foregoing, which taken in isolation or when considered
with all other such revocations or terminations could have a Material Adverse
Effect with respect to the Company. The Company does not have any notice or
knowledge of any facts or any past, present or threatened occurrence that could
preclude or impair the Company's ability to retain or obtain any authorization
necessary for the operation of its business.
3.13 ENVIRONMENTAL LAWS. Except as disclosed in SCHEDULE 3.13: (a)
the Company has complied with, and is currently in compliance with, all
applicable Environmental Laws; (b) to the best of the Company's knowledge, the
properties presently or formerly owned or operated by the Company (including,
without limitation, soil, groundwater or surface water on or under the
properties, and buildings thereon) (the "Real Properties") to the best of the
Company's knowledge do not contain any Hazardous Substance, other than, to the
best knowledge of the Company, as would not require investigation or remediation
under applicable Environmental Law (provided, however, that with respect to Real
Properties formerly owned or operated by the Company, such representation is
limited to the period prior to the disposition of such Real Properties by the
Company); (c) the Company has not received any notices, demand letters or
requests for information from any governmental entity or any third party
alleging that the Company is in violation of, or liable under, any Environmental
Law and none of the Company or the Real Properties are subject to any court
order, administrative order or decree arising under any Environmental Law, and
(d) no Hazardous Substance has been disposed of, transferred, released or
transported from any of the Real Properties during the time such Real Property
was owned or operated by the Company in violation of applicable Environmental
Law or, to the best knowledge of the Company, to a site that is listed or
proposed for listing on the National Priorities List or the CERCLIS List
compiled pursuant to the federal Comprehensive Environmental Response,
Compensation and Liability Act or to a site that is listed or proposed for
listing pursuant to a state environmental remediation statute or that otherwise
requires remediation under such laws.
3.14 LABOR AND EMPLOYMENT MATTERS. Except to the extent set forth
in SCHEDULE 3.14: (a) there is no material labor strike, dispute, slowdown,
stoppage or lockout actually pending, or to the best knowledge of the Company,
threatened, against or affecting the Company, and since inception there has not
been any such action; (b) no union claims to represent the employees of the
Company; (c) the Company is not a party to or bound by any collective bargaining
or similar agreement with any labor organization, or work rules or practices
agreed to with any labor organization or employee association applicable to
employees of the Company; (d) none of the employees of the Company is
represented by any labor organization and the Company does not have any
knowledge of any material current union organizing activities among the
employees of the Company, nor does any question concerning representation exist
concerning such employees; (e) there are no material
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written personnel policies, rules or procedures generally applicable to the
employees of the Company, other than those set forth in Schedule 3.14, true and
correct copies of which have heretofore been delivered or made available or will
be made available to the Company; (f) the Company is, and has at all times been,
in compliance in all material respects with all applicable laws respecting
employment and employment practices, terms and conditions of employment, wages,
hours of work and occupational safety and health, and the Company is not engaged
in any unfair labor practices as defined in the National Labor Relations Act or
other applicable law, ordinance or regulation; (g) there is no unfair labor
practice charge or complaint against the Company pending or, to the best
knowledge of the Company, threatened before the National Labor Relations Board
or any similar state or foreign agency; (h) there is no material grievance
arising out of any collective bargaining agreement or other grievance procedure
against the Company pending or, to the best knowledge of the Company,
threatened; (i) to the best knowledge of the Company, no material charges with
respect to or relating to the Company are pending before the Equal Employment
Opportunity Commission or any other federal, state, local or foreign agency
responsible for the prevention of unlawful employment practices; (j) the Company
has not received notice of the intent of any federal, state, local or foreign
agency responsible for the enforcement of labor or employment laws to conduct an
investigation with respect to or relating to the Company and, to the best
knowledge of the Company, no such investigation is in progress; and (k) there
are no material complaints, lawsuits or other proceedings pending or, to the
best knowledge of the Company, threatened in any forum by or on behalf of any
present or former employee of the Company, any applicant for employment or
classes of the foregoing alleging breach of any express or implied contract or
employment, any law or regulation governing employment or the termination
thereof or other discriminatory, wrongful or tortuous conduct in connection with
the employment relationship.
3.15 EMPLOYEE PLANS. Except as set forth in SCHEDULE 3.15, the
Company does not have any employee benefit, savings, or retirement plans or
agreements.
3.16 INSURANCE. Listed on SCHEDULE 3.16 are all policies of
insurance, other than title insurance policies, relating to the business and
properties of the Company held by or on behalf of the Company and each
outstanding claim thereunder in excess of $10,000. All such policies of
insurance are in full force and effect, and no notice of cancellation has been
received or, to the best of the Company's knowledge, has been sent by the
insurance carrier thereof. In the reasonable judgment of the Company, the
policies are in amounts which are adequate in relation to the business and
properties of the Company, and all premiums to date have been paid in full.
3.17 BUSINESS RELATIONS. The Company does not know or have any
reason to believe that any specific customer, client, or supplier of the Company
will cease or otherwise refuse to do business with the Company as a result of
the transactions contemplated hereby in the same manner as such business was
previously conducted with the Company. The Company has not received any notice
of any disruption (including delayed deliveries or allocations by suppliers) in
the availability of the materials or products used by the Company nor is the
Company aware of any facts which could lead it to believe that the business of
the Company will be subject to any such material disruption. This Section 3.17
does not constitute a warranty by the Company of the number of customers,
clients or suppliers, or the size of the subscription base that will be
maintained by the Company following the Closing.
11
3.18 ACCOUNTS RECEIVABLE. Except as listed on SCHEDULE 3.18, (a)
all of the Company's accounts receivable are free and clear of any security
interests, liens, encumbrances, or other charges; (b) to the best of the
Company's knowledge, none of the accounts receivable are subject to any offset
or claims of offset, other than normal credits and returns in the ordinary
course of business; and (c) none of the obligors of the accounts receivable have
given notice that they will or may refuse to pay the full amount thereof or any
portion thereof.
3.19 BROKER'S OR FINDER'S COMMISSIONS. No broker's or finder's or
placement fee or commission will be payable to any broker or agent engaged the
Company or any of its officers, directors or agents, or the Shareholders with
respect to the transactions contemplated by this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
Each Shareholder, as to itself, represents and warrants to WWCA and WWC
that the following are true and correct as of the date hereof
4.1 AUTHORIZATION AND VALIDITY.
(a) Such Shareholder has the capacity to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
All necessary action required to have been taken by or on behalf of such
Shareholder by applicable law or otherwise to authorize (i) the approval,
execution and delivery on its behalf of this Agreement, and (ii) its performance
of its obligations under this Agreement and the consummation of the transactions
contemplated hereby have been taken. This Agreement constitutes such
Shareholder's valid and binding agreement, enforceable against such Shareholder
in accordance with its terms, except (A) as the same may be limited by
applicable bankruptcy, insolvency, moratorium or similar laws of general
application relating to or affecting creditors' rights, including without
limitation, the effect of statutory or other laws regarding fraudulent
conveyances and preferential transfer, and (B) for the limitations imposed by
general principles of equity.
(b) Except as set forth on SCHEDULE 4.1, such Shareholder
owns, beneficially and of record, good and marketable title to the HomeMark
Stock listed opposite its name on EXHIBIT C, free and clear of all security
interests, liens, adverse claims, encumbrances, equities, proxies, options,
voting agreements, Shareholders' agreements or restrictions.
4.2 NO CONFLICT; CONSENT. The execution and delivery of this
Agreement do not, and the consummation of the transactions contemplated hereby
or thereby will not (a) constitute a breach or default (or an event that with
notice or lapse of time or both would become a breach or default) or give rise
to any lien, third party right of termination, cancellation, material
modification or acceleration under any agreement, understanding or undertaking
to which such Shareholder is a party or by which it is bound, or (b) constitute
a violation of any law, rule or regulation to which such Shareholder is subject.
Neither the execution and delivery by such Shareholder of this Agreement nor the
consummation by such Shareholder of the transactions contemplated hereby will
require such Shareholder to obtain any consent, approval, authorization or
permit of, or to make any
12
filing with or give any notification to, any governmental or regulatory
authority, any lender or lessor or any other person or entity.
4.3 STATUS OF SHAREHOLDER.
(a) Such Shareholder is knowledgeable in making
investments and is able to bear the economic risk of loss of its investment in
WWC. Except as provided on SCHEDULE 4.3 attached hereto, such Shareholder is an
"accredited investor", as that term is defined in Rule 501(a) of Regulation D
under the Securities Act. Such Shareholder is acting on its own behalf in
connection with the investigation and examination of WWC and its decision to
execute this Agreement and all related documents, instruments and agreements.
Such Shareholder is receiving shares of WWC Series B Preferred Stock in the
Merger for its own account, and not with a view of distribution. Such
Shareholder acknowledges that the WWC Series B Preferred Stock will be
unregistered and may not be sold or transferred in the absence of registration
under the Securities Act and applicable state securities laws, unless an
exemption exists therefore, and WWC has no obligation to effect such a
registration.
(b) Such Shareholder acknowledges WWC has made all
documents pertaining to the transactions contemplated herein, in the Exhibits
and Schedules attached hereto and as filed with the Securities and Exchange
Commission available to such Shareholder and/or such Shareholder's
representative and has allowed such Shareholder and/or its representative an
opportunity to ask questions and receive answers thereto and to verify and
clarify any information contained in such documents. Such Shareholder has relied
upon advice of its representative and/or independent investigation made by such
Shareholder and/or such Shareholder's representative, and acknowledges that no
representations or agreements other than those set forth in this Agreement have
been made to such Shareholder in respect thereto. For any Shareholder who is not
an accredited investor, such Shareholder, by reason of its business or financial
experience and/or that of its representative who is unaffiliated with WWC and
who is not compensated by WWC or any affiliate of WWC, such Shareholder has the
capacity to protect such Shareholder's own interest in connection with the
transactions contemplated by this Agreement and the issuance of WWC Series B
Preferred Stock to such Shareholder with respect to the transactions
contemplated herein. Such Shareholder expressly acknowledges and confirms that
such Shareholder has evaluated and understands the risks and terms of investing
in the securities of WWC to be issued to such Shareholder pursuant to this
Agreement, and/or such Shareholder and its representative have, such knowledge
and experience in financial and business matters in general and in particular
with respect to this type of investment that such Shareholder is, or they are,
capable of evaluating the merits and risks of an investment in the WWC Series B
Preferred Stock to be issued to such Shareholder in connection with the
transactions contemplated herein.
4.4 BROKER'S OR FINDER'S COMMISSIONS. No broker's or finder's or
placement fee or commission will be payable to any broker or agent engaged such
Shareholder with respect to the transactions contemplated by this Agreement.
13
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF WWCA AND WWC
WWCA and WWC jointly and severally represent and warrant to the Company
and the Shareholders that the statements contained in the Article IV are true
and correct, except as set forth in the Schedules delivered by WWCA and WWC to
the Company concurrently herewith.
5.1 ORGANIZATION. Each of WWCA and WWC is a corporation, duly
organized, validly existing and in good standing under the laws of the State of
its organization. Each of WWCA and WWC (a) is qualified or licensed in all
jurisdictions where such qualification or license is required to own and operate
its properties and conduct its business in the manner and at the places
presently conducted; (b) holds all franchises, grants, licenses, certificates,
permits, consents and orders, all of which are valid and in full force and
effect, from all applicable United States and foreign regulatory authorities
necessary to own and operate its properties and to conduct its business in the
manner and at the places presently conducted; and (c) has full power and
authority (corporate and other) to own, lease and operate its respective
properties and assets and to carry on its business as presently conducted and as
proposed to be conducted, except, in each case, where the failure to be so
qualified or licensed or to hold such franchises, grants, licenses,
certificates, permits, consents and orders or to have such power and authority
would not, when taken together with all other such failures, reasonably be
expected to have a Material Adverse Effect with respect to WWCA or WWC, as the
case may be. Except as set forth in Schedule 5.1 and for WWC's ownership of the
equity interest in WWCA, neither WWCA nor WWC directly or indirectly own any
equity or similar interest in, or any interest convertible into or exchangeable
or exercisable for, any equity or similar interest in, any corporation,
partnership, joint venture or other business association or entity.
5.2 CAPITAL STRUCTURE.
(a) As of the Effective Date, the authorized capital
stock of WWC consists of 60,000,000 shares of WWC Common Stock and 1,000,000
shares of WWC Preferred Stock. As of the Effective Date, (i) 35,386,459 shares
of WWC Common Stock and no shares of WWC Preferred Stock were issued and
outstanding, (ii) 1,578,616 options or warrants for shares of WWC Common Stock
were issued and outstanding; (iii) 74,908 shares of WWC Common Stock were held
in the treasury of WWC. All the outstanding shares of WWC Stock are duly
authorized, validly issued, fully paid and non-assessable. Except as set forth
on SCHEDULE 5.2, there are no bonds, debentures, notes or other indebtedness
having voting rights (or convertible or exchangeable into securities having such
rights) ("WWC Voting Debt") of WWC issued and outstanding. Except as set forth
above, there are no equity interests of WWC authorized, issued or outstanding
and there are no existing (i) options, warrants, calls, preemptive rights,
subscriptions or other rights, convertible or exchangeable securities,
agreements, arrangements or commitments of any character, relating to the issued
or unissued equity interests of WWC, obligating WWC to issue, transfer or sell
or cause to be issued, transferred or sold any equity interest or WWC Voting
Debt of, or other equity interest in, WWC, (ii) securities convertible into or
exchangeable for such equity interests or (iii) obligations of WWC to grant,
extend or enter into any such option, warrant, call, preemptive right,
subscription or other right, convertible security, agreement, arrangement or
commitment.
(b) Except as set forth in SCHEDULE 5.2, there are no
voting trusts, proxies, shareholders agreements or other agreements or
understandings to which WWC is a party with
14
respect to the voting or transfer of the equity interests or capital stock of
WWC. Except as set forth in SCHEDULE 5.2, WWC is not a party to any agreement or
obligation, contingent or otherwise, to redeem, repurchase or otherwise acquire
or retire any equity interests of WWC, whether as a result of the transactions
contemplated by this Agreement or otherwise.
(c) WWC has not (i) made or agreed to make any split of
its equity interests or dividend, or issued or permitted to be issued any equity
interests, or securities exercisable for or convertible into equity interests,
of WWC, (ii), repurchased, redeemed or otherwise acquired any equity or
membership interests of WWC, or (iii) declared, set aside, made or paid any
dividends or other distributions on the outstanding equity interests of WWC.
5.3 AUTHORIZATION AND VALIDITY. Each of WWCA and WWC has the
corporate power and authority and legal right to execute and deliver this
Agreement and to perform its obligations hereunder. The execution and delivery
by each of WWCA and WWC of this Agreement and the performance of their
respective obligations hereunder have been duly authorized by proper corporate
and other proceedings, and this Agreement constitutes the legal, valid and
binding obligation of each of WWCA and WWC enforceable against it in accordance
with their terms, except as enforceability may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors' rights
generally.
5.4 NO CONFLICT; CONSENT. Neither the execution and delivery by
WWCA and WWC of this Agreement, nor the consummation of the transactions therein
contemplated, nor compliance with the provisions thereof will violate (a) any
law, rule, regulation, order, writ, judgment, injunction, decree or award
binding on WWCA or WWC, or (b) WWCA or WWC's articles or certificate of
incorporation or organization, or by-laws or operating agreement, or (c) the
provisions of any indenture, instrument or agreement to which either WWCA or WWC
is a party or is subject, or by which it, or its Property, is bound, or conflict
with or constitute a default thereunder, or result in, or require, the creation
or imposition of any Lien in, of or on the Property of WWCA or WWC pursuant to
the terms of any such indenture, instrument or agreement. No order, consent,
adjudication, approval, license, authorization, or validation of, or filing,
recording or registration with, or exemption by, or other action in respect of
any governmental or public body or authority, or any subdivision thereof, which
has not been obtained by WWCA or WWC is required to be obtained by WWCA or WWC
in connection with the execution and delivery of this Agreement, or the
legality, validity, binding effect or enforceability of any of this Agreement.
Except as set forth in SCHEDULE 5.4, no consent, approval or authorization of,
or notice to, any other person or entity, including, without limitation, parties
to loans, contracts, leases or other agreements, is required in connection with
the execution, delivery and performance of this Agreement by WWCA or WWC or the
consummation by it of the transactions contemplated hereby.
5.5 SEC FILINGS; FINANCIAL STATEMENTS.
(a) WWC has filed all forms, reports, statements,
schedules, registration statements and other documents required to be filed with
the SEC since January 1, 2000 (the "WWC SEC Documents"), each of which complied
in all material respects with the applicable requirements of the Securities Act,
and the rules and regulations promulgated thereunder, or the Exchange Act and
the rules and regulations promulgated thereunder, each as in effect on the date
so filed. No Subsidiary of the Company is required to file any form, report,
statement, schedule, registration
15
statement or other document with the SEC. No WWC SEC Document, when filed (or,
if amended or superseded by a filing prior to the Closing Date, on the date of
such filing) contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
(b) Each of the audited and unaudited consolidated
financial statements of WWC (including any related notes thereto) included in
the WWC SEC Documents (the "WWC Financial Statements") have been prepared in
accordance with United States generally accepted accounting principles ("GAAP"),
applied on a consistent basis during the relevant periods (except as may be
disclosed in the notes thereto), and present fairly the consolidated financial
position and consolidated results of operations and changes in cash flows of WWC
and its Subsidiaries as of the respective dates or for the respective periods
reflected therein, except, in the case of the unaudited interim financial
statements, for normal and recurring year-end adjustments that are not material.
(c) Except as set forth on SCHEDULE 5.5(c) and on the
consolidated balance sheet of WWC and its Subsidiaries as of September 30, 2001
included in the WWC SEC Documents, or in the notes thereto, neither WWC nor any
of its Subsidiaries has any liabilities, debts, claims or obligations of any
nature (whether accrued, absolute, direct or indirect, contingent or otherwise,
whether due or to become due), and there is no existing condition or set of
circumstances which would reasonably be expected, individually or in the
aggregate, to result in such a liability, except for liabilities or obligations
incurred in the ordinary course of business consistent with past practice since
September 30, 2001, none of which would, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect with respect to WWC.
(d) Prior to the Effective Date, WWCA had no operations,
assets or liabilities.
5.6 Except as set forth on SCHEDULE 5.6, WWC has filed all United
States federal tax returns and all other tax returns which are required to be
filed and have paid all taxes due pursuant to said returns or pursuant to any
assessment received by WWC, except such taxes, if any, as are being contested in
good faith and as to which adequate reserves have been provided on the WWC
Financial Statements and as to which no Lien exists. No tax liens have been
filed and no claims are being asserted with respect to any such taxes. The
charges, accruals and reserves on the books of WWC in respect of any taxes or
other governmental charges are adequate. WWC is taxable as a "C" corporation for
federal income tax purposes.
5.7 LITIGATION AND CONTINGENT OBLIGATIONS. There is no litigation,
arbitration, governmental investigation, proceeding or inquiry pending or, to
best knowledge of any of its officers, threatened against or affecting WWC which
could reasonably be expected to have a Material Adverse Effect with respect to
WWC. Other than any liability incident to any litigation, arbitration or
proceeding that could not reasonably be expected to have a Material Adverse
Effect with respect to WWC, to the best of WWC's knowledge, WWC has no material
contingent obligations not provided for or disclosed in the WWC Financial
Statements.
5.8 MATERIAL AGREEMENTS. SCHEDULE 5.8 lists all material
agreements, contracts, leases, licenses and other instruments to which WWC is a
party. Except as set forth on Schedule 5.8, WWC is not party to any agreement
containing any provision or covenant limiting in any material respect
16
the ability of WWC to (a) sell any products or services of or to any other
person, (b) engage in any line of business in any geographical area or (c)
compete with or obtain products or services from any person or limiting the
ability of any person to provide products or services to WWC. All contracts,
agreements, leases, licenses and other instruments referred to in the Schedules
hereto are valid and in full force and effect, and true copies thereof have been
heretofore delivered to WWC .
5.9 COMPLIANCE WITH LAWS. WWC has complied with all applicable
statutes, rules, regulations, orders and restrictions of any domestic or foreign
government or any instrumentality or agency thereof having jurisdiction over the
conduct of their respective businesses or the ownership of their respective
Property except for any failure to comply with any of the foregoing which could
not reasonably be expected to have a Material Adverse Effect with respect to
WWC.
5.10 OWNERSHIP OF PROPERTIES.
(a) SCHEDULE 5.10 contains a list of all material real
estate owned and leased by WWC. WWC has valid leasehold interests in all
material real estate leased by it. The current use of such material owned and
leased real estate by WWC does not violate in any material respect the
certificate of occupancy thereof or any material local zoning or similar land
use or government regulations.
(b) WWC has the right to use all material assets (other
than the real property which is represented and warranted in paragraph (a)
above) shown on the WWC Financial Statements as presently used in WWC's
business. To the best knowledge of WWC, there is no material defect in the
normal operating condition and repair of the equipment owned or leased by the
WWC, other than ordinary wear and tear in the normal course of business.
5.11 INTELLECTUAL PROPERTY; LICENSES. WWC possesses all proprietary
rights necessary to conduct their business and operations as heretofore
conducted or as proposed to be conducted by it. All proprietary rights
registered in the name of WWC and applications therefor filed by WWC are listed
on SCHEDULE 5.11. No event has occurred that permits, or after notice or lapse
of time or both would permit, the revocation or termination of any of the
foregoing, which taken in isolation or when considered with all other such
revocations or terminations could have a Material Adverse Effect with respect to
WWC. WWC does not have any notice or knowledge of any facts or any past, present
or threatened occurrence that could preclude or impair WWC's ability to retain
or obtain any authorization necessary for the operation of its business.
5.12 ENVIRONMENTAL LAWS. Except as disclosed in SCHEDULE 5.12: (a)
WWC has complied with, and is currently in compliance with, all applicable
Environmental Laws; (b) to the best of WWC's knowledge, the properties presently
or formerly owned or operated by WWC (including, without limitation, soil,
groundwater or surface water on or under the properties, and buildings thereon)
(the "Real Properties") to the best of WWC's knowledge do not contain any
Hazardous Substance, other than, to the best knowledge of WWC, as would not
require investigation or remediation under applicable Environmental Law
(provided, however, that with respect to Real Properties formerly owned or
operated by WWC, such representation is limited to the period prior to the
disposition of such Real Properties by WWC); (c) WWC has not received any
notices, demand letters or requests for information from any governmental entity
or any third party alleging that WWC is in violation of, or liable under, any
Environmental Law and none of WWC or the Real
17
Properties are subject to any court order, administrative order or decree
arising under any Environmental Law, and (d) no Hazardous Substance has been
disposed of, transferred, released or transported from any of the Real
Properties during the time such Real Property was owned or operated by WWC in
violation of applicable Environmental Law or, to the best knowledge of WWC, to a
site that is listed or proposed for listing on the National Priorities List or
the CERCLIS List compiled pursuant to the federal Comprehensive Environmental
Response, Compensation and Liability Act or to a site that is listed or proposed
for listing pursuant to a state environmental remediation statute or that
otherwise requires remediation under such laws.
5.13 LABOR AND EMPLOYMENT MATTERS. Except to the extent set forth
in SCHEDULE 5.13: (a) there is no material labor strike, dispute, slowdown,
stoppage or lockout actually pending, or to the best knowledge of WWC,
threatened, against or affecting WWC, and since inception there has not been any
such action; (b) no union claims to represent the employees of WWC; (c) WWC is
not a party to or bound by any collective bargaining or similar agreement with
any labor organization, or work rules or practices agreed to with any labor
organization or employee association applicable to employees of WWC; (d) none of
the employees of WWC is represented by any labor organization and WWC does not
have any knowledge of any material current union organizing activities among the
employees of WWC, nor does any question concerning representation exist
concerning such employees; (e) there are no material written personnel policies,
rules or procedures generally applicable to the employees of WWC, other than
those set forth in SCHEDULE 5.13, true and correct copies of which have
heretofore been delivered or made available or will be made available to WWC;
(f) WWC is, and has at all times been, in compliance in all material respects
with all applicable laws respecting employment and employment practices, terms
and conditions of employment, wages, hours of work and occupational safety and
health, and WWC is not engaged in any unfair labor practices as defined in the
National Labor Relations Act or other applicable law, ordinance or regulation;
(g) there is no unfair labor practice charge or complaint against WWC pending
or, to the best knowledge of WWC, threatened before the National Labor Relations
Board or any similar state or foreign agency; (h) there is no material grievance
arising out of any collective bargaining agreement or other grievance procedure
against WWC pending or, to the best knowledge of WWC, threatened; (i) to the
best knowledge of WWC, no material charges with respect to or relating to WWC
are pending before the Equal Employment Opportunity Commission or any other
federal, state, local or foreign agency responsible for the prevention of
unlawful employment practices; (j) WWC has not received notice of the intent of
any federal, state, local or foreign agency responsible for the enforcement of
labor or employment laws to conduct an investigation with respect to or relating
to WWC and, to the best knowledge of WWC, no such investigation is in progress;
and (k) there are no material complaints, lawsuits or other proceedings pending
or, to the best knowledge of WWC, threatened in any forum by or on behalf of any
present or former employee of WWC, any applicant for employment or classes of
the foregoing alleging breach of any express or implied contract or employment,
any law or regulation governing employment or the termination thereof or other
discriminatory, wrongful or tortuous conduct in connection with the employment
relationship.
5.14 INSURANCE. Listed on SCHEDULE 5.14 are all policies of
insurance, other than title insurance policies, relating to the business and
properties of WWC held by or on behalf of WWC and each outstanding claim
thereunder in excess of $10,000. All such policies of insurance are in full
force and effect, and no notice of cancellation has been received or, to the
best of WWC's knowledge, has been sent by the insurance carrier thereof. In the
reasonable judgment of WWC, the
18
policies are in amounts which are adequate in relation to the business and
properties of WWC, and all premiums to date have been paid in full.
5.15 BUSINESS RELATIONS. WWC does not know or have any reason to
believe that any specific customer, client, or supplier of WWC will cease or
otherwise refuse to do business with WWC as a result of the transactions
contemplated hereby in the same manner as such business was previously conducted
with WWC. WWC has not received any notice of any disruption (including delayed
deliveries or allocations by suppliers) in the availability of the materials or
products used by WWC nor is WWC aware of any facts which could lead it to
believe that the business of WWC will be subject to any such material
disruption. This Section 5.15 does not constitute a warranty by WWC of the
number of customers, clients or suppliers, or the size of the subscription base
that will be maintained by WWC following the Closing.
5.16 ISSUANCE OF WWC SERIES B PREFERRED STOCK. The shares of WWC
Series B Preferred Stock to be delivered to the Shareholders hereunder have been
duly and validly authorized and when issued in accordance with this Agreement,
will be duly and validly issued, fully paid and nonassessable and will not have
been issued in violation of any statutory preemptive rights, or any other
preemptive right, co-sale right, right of first refusal or other similar right.
5.17 USE OF ASSETS. After the consummation of the transactions
described herein, WWC intends to cause HomeMark to continue to use substantially
all of its operating assets and has no present intention to dispose of the
operating assets other than in the ordinary course of business.
5.18 INFORMATION FURNISHED TO WWCA AND WWC. WWCA and WWC have been
provided with, and are familiar with, the financial and other information
regarding the business and operations of the Company, including, but not limited
to, the Company Financial Statements that WWCA and WWC deem necessary for
evaluating the merits and risks of the transactions contemplated by this
Agreement. WWCA and WWC are knowledgeable and experienced in financial and
business matters and is capable of evaluating the merits and risks of the
transactions contemplated by this Agreement.
5.19 BROKER'S OR FINDER'S COMMISSIONS. No broker's or finder's or
placement fee or commission will be payable to any broker or agent engaged by
WWCA or WWC or any of its officers, directors or agents with respect to the
transactions contemplated by this Agreement.
ARTICLE VI
CLOSING
6.1 CLOSING. The closing of the transactions contemplated under
this Agreement (the "Closing") shall take place at the offices of Xxxxxxx
Xxxxxx, LLP, 0000 X. Xxxxxxx Xxxxxxxxxx, Xxxxx 000, Xxxxxxxxxx, 00000 on or
before April 30, 2002, or such other date as mutually agreed to by the parties
(the "Closing Date")
6.2 WWCA AND WWC CONDITIONS. The obligation of WWCA and WWC to
consummate the transactions contemplated under this Agreement is subject to the
satisfaction, prior to or at the Closing, of the following conditions:
19
(a) REPRESENTATIONS AND WARRANTIES TRUE. The
representations and warranties of the Company and the Shareholders contained in
Article III shall be true and correct in all material respects and the covenants
and agreements set forth in Section 7.1 shall have been complied with at and as
of the Closing Date as though then made, except to the extent of changes caused
by the transactions expressly contemplated herein.
(b) DUE DILIGENCE. WWCA and WWC shall have completed a
financial, technical and legal audit of the books and records of the Company,
and shall be satisfied, in their sole and exclusive discretion, that the assets,
liabilities, obligations, revenues, projections, vendor relations, customer
base, business operations and tax liabilities of the Company are as represented.
(c) CONSENTS. WWCA and WWC shall have received any
approvals and consents required under its loan agreements, leases, and
indentures, shareholders agreements or other debt documents or contracts
necessary to consummate the transactions contemplated herein, including without
limitation, those set forth on SCHEDULE 5.4.
(d) BANCA DEL GOTTARDO TRANSACTION. WWC shall have
entered into a definitive transaction agreement with Banca del Gottardo ("BdG")
pursuant to which BdG agrees to convert all warrants to purchase shares of WWC
Common Stock held of record by BdG, and all principal and accrued and unpaid
interest under that certain 7% Convertible Subordinated Note, due June 11, 2004,
made by WWC, as amended and extended, into an aggregate of 24,000 shares of WWC
Series B Preferred Stock.
(e) NO INJUNCTIONS. There shall be no effective
injunction, writ, preliminary restraining order or any order of any nature
issued by a court of competent jurisdiction prohibiting or imposing any
condition on the consummation of any of the transactions contemplated hereby.
6.3 THE COMPANY AND THE SHAREHOLDERS CONDITIONS. The obligation of
the Company and the Shareholders to consummate the transactions contemplated
under this Agreement is subject to the satisfaction, prior to or at the Closing,
of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES TRUE. The
representations and warranties of WWCA and WWC contained in Article IV hereof
shall be true and correct in all material respects at and as of the Closing Date
as though then made, except to the extent of changes caused by the transactions
expressly contemplated herein.
(b) DUE DILIGENCE. The Company and the Shareholders shall
have completed a financial, technical and legal audit of the books and records
of WWC, and shall be satisfied, in its sole and exclusive discretion, that the
assets, liabilities, obligations, revenues, projections, vendor relations,
customer base, business operations and tax liabilities of WWC are as
represented.
(c) CONSENTS. The Company shall have received any
approvals and consents required under their respective loan agreements, leases,
and indentures, shareholders agreements or other debt documents or contracts
necessary to consummate the transactions contemplated herein, including, without
limitation, those set forth on SCHEDULE 3.4.
20
(d) NO INJUNCTIONS. There shall be no effective
injunction, writ, preliminary restraining order or any order of any nature
issued by a court of competent jurisdiction prohibiting or imposing any
condition on the consummation of any of the transactions contemplated hereby.
6.4 CLOSING DELIVERABLES.
(a) At the Closing, the Company will have delivered or
caused to be delivered to the Company all of the following in form and substance
satisfactory to the Company:
(i) a certificate of the secretary or assistant
secretary of the Company, certifying (A) as
to the names and true signatures of the
officers of the Company authorized to sign
this Agreement and the other documents to be
delivered by the Company hereunder, (B) that
a true, correct and complete copy of the
articles of organization of the Company is
attached, and (C) that a true, correct and
complete copy of the operating agreement of
the Company is attached;
(ii) copies of the resolutions unanimously and
duly adopted by the Company's board of
directors authorizing the execution,
delivery and performance by the Company of
this Agreement, and the consummation of all
of the other transactions hereunder,
certified as of the Closing Date by the
secretary or assistant secretary of the
Company;
(iii) a certificate dated as of the Closing Date
from an officer of the Company stating that
the conditions specified in Section 6.2 have
been fully satisfied or waived by WWCA and
WWC; and
(iv) a certificate of existence from the
Secretary of State of the State of Texas,
each of a recent date, with respect to the
Company.
(b) At the Closing, WWCA and WWC will have delivered or
caused to be delivered to the Company of the following in form and substance
satisfactory to the Company:
(i) a certificate of the secretary or assistant
secretary of each of WWCA and WWC,
certifying (A) as to the names and true
signatures of the officers of the Company
authorized to sign this Agreement and the
other documents to be delivered by the
Company hereunder, (B) that a true, correct
and complete copy of the articles of
incorporation of the Company is attached,
and (C) that a true, correct and complete
copy of the bylaws of the Company is
attached;
(ii) copies of the resolutions unanimously and
duly adopted by the board of directors of
each of WWCA and WWC authorizing the
execution, delivery and performance by WWCA
and WWC of this Agreement, and the
consummation of all of the other
transactions hereunder, certified as of the
Closing Date by the secretary or assistant
secretary of WWCA and WWC, as appropriate;
21
(iii) a certificate dated as of the Closing Date
from an officer of each of WWCA and WWC
stating that the conditions specified in
Section 6.3 have been fully satisfied or
waived by the Company; and
(iv) a certificate of existence and good standing
from the Secretaries of State of the State
of Texas and the State of Delaware as of a
recent date with respect to each of WWCA and
WWC, as appropriate.
ARTICLE VII
OTHER AGREEMENTS
7.1 COVENANTS OF THE COMPANY. After the Effective Date and until
the earlier of (a) the Closing Date or (b) the expiration or termination of this
Agreement, unless WWC shall otherwise consent in writing:
(a) CONDUCT OF BUSINESS. The Company will carry on and
conduct its business in substantially the same manner and in substantially the
same fields of enterprise as it is presently conducted and do all things
necessary to remain duly organized, validly existing and in good standing in its
jurisdiction of organization and maintain all requisite authority to conduct its
business in each jurisdiction in which its business is conducted. Without
limiting the generality of the foregoing, without the prior written of WCCA and
WCC, the Company will not, and will not permit any of its Subsidiaries to:
(i) take any action to change its board of
directors or executive management;
(ii) declare, pay or set aside for payment any
dividend or other distribution payable in
cash, membership interests, stock, property
or otherwise in respect of its equity
ownership; or directly or indirectly redeem,
purchase, repurchase (except as required to
consummate the transactions contemplated
herein) or otherwise acquire any HomeMark
Stock or any securities or obligations
convertible into or exchangeable for any
shares of HomeMark Stock, as the case may
be;
(iii) incur or assume any debt or issue any debt
securities, except under its existing lines
of credit, but not exceeding the current
credit limit under such lines of credit, (B)
assume, guarantee, endorse or otherwise
become liable or responsible (whether
directly, contingently or otherwise) for the
obligations of any other person, (C) make
any loans or advances to any person, other
than with respect to extensions of credit to
their respective customers in the ordinary
course of business consistent with past
practice, or (D) mortgage or pledge any of
its assets, tangible or intangible, or
create any material Lien thereupon;
(iv) enter into any new lines of business or
otherwise make material changes to the
operation of its business;
22
(v) sell (whether by merger, consolidation or
otherwise), lease, encumber, transfer or
dispose of any material assets, or enter
into any material commitment or transaction
outside the ordinary course of business
consistent with past practices; or
(vi) take any action or agree, in writing or
otherwise, to take any of the foregoing
actions or any action which would make any
representation or warranty in Article III
hereof materially untrue or incorrect.
(b) TAXES. The Company will timely file complete and
correct United States federal and applicable foreign, state and local tax
returns required by law and pay when due all taxes, assessments and governmental
charges and levies upon it or its income, profits or Property, except those
which are being contested in good faith by appropriate proceedings and with
respect to which adequate reserves have been set aside on the Company Financial
Statements.
(c) COMPLIANCE WITH LAWS. The Company will, and will
ensure that its Subsidiaries, comply with all laws, rules, regulations, orders,
writs, judgments, injunctions, decrees or awards to which it may be subject
including, without limitation, all Environmental Laws.
(d) MAINTENANCE OF PROPERTIES. The Company will, and will
ensure that its Subsidiaries, do all things necessary to maintain, preserve,
protect and keep their respective Property in good repair, working order and
condition, and make all necessary and proper repairs, renewals and replacements
so that its business carried on in connection therewith may be properly
conducted at all times.
(e) MERGER. Except as contemplated by this Agreement, the
Company will not, and will not permit any of its Subsidiaries to, merge or
consolidate with or into any other Person.
(f) SALE OF ASSETS. The Company will not, and will not
permit any of its Subsidiaries to, lease, sell or otherwise dispose of its
Property to any other Person, except:
(i) sales of inventory in the ordinary course of
business;
(ii) leases, sales or other dispositions of its
Property that, together with all other
Property of the Company (or its
Subsidiaries) previously leased, sold or
disposed of (other than inventory in the
ordinary course of business) as permitted by
this Section during the twelve-month period
ending with the month in which any such
lease, sale or other disposition occurs, do
not constitute a Substantial Portion of the
Property of the Company, as the case may be;
(iii) any transfer of an interest in accounts or
notes receivable on a limited recourse
basis, provided that such transfer qualifies
as a sale and that the amount of such
financing does not exceed $5,000 at any one
time outstanding.
(g) INVESTMENTS AND ACQUISITIONS. The Company will not,
and will not permit any of its Subsidiaries to, make or suffer to exist any
Investments (including without limitation, loans
23
and advances to, and other Investments in, Subsidiaries), or commitments
therefor, or to create any Subsidiary or to become or remain a partner in any
partnership or joint venture, or to make any acquisition of any Person, except
existing Investments or existing agreements to make Investments in Subsidiaries.
(h) LIENS. The Company will not, and will not permit any
of its Subsidiaries to, create, incur, or suffer to exist any Lien in, of or on
the Property of the Company or any of its Subsidiaries, as the case may be,
except:
(i) Liens for taxes, assessments or governmental
charges or levies on its Property if the
same shall not at the time be delinquent or
thereafter can be paid without penalty, or
are being contested in good faith and by
appropriate proceedings and for which
adequate reserves shall have been set aside
on its books;
(ii) Liens imposed by law, such as carriers',
warehousemen's and mechanics' liens and
other similar liens arising in the ordinary
course of business which secure payment of
obligations not more than 60 days past due
or which are being contested in good faith
by appropriate proceedings and for which
adequate reserves shall have been set aside
on its books;
(iii) Liens arising out of pledges or deposits
under worker's compensation laws,
unemployment insurance, old age pensions, or
other social security or retirement
benefits, or similar legislation; and
(iv) utility easements, building restrictions and
such other encumbrances or charges against
real property as are of a nature generally
existing with respect to properties of a
similar character and which do not in any
material way affect the marketability of the
same or interfere with the use thereof in
the business of the Company or its
Subsidiary, as the case may be.
(i) DILUTION OF OWNERSHIP. The Company will not, and will
not permit any of its Subsidiaries to, consent to or approve of the issuance of
(a) any equity interest or securities, (b) any instrument convertible
voluntarily by the Company or its Subsidiary, as the case may be, or
automatically upon the occurrence or non-occurrence of any event or condition
into, or exchangeable for, any such interest or securities, or (c) any warrants,
options, contracts or other commitments entitling any third party to purchase or
otherwise acquire any such interests or securities.
7.2 Covenants of the Shareholders.
(a) NONCOMPETITION. Until the third anniversary of the
Effective Time, each of the Shareholders agrees that it will not directly or
indirectly, whether through a subsidiary or affiliate, officer, director, or
shareholder, without the prior express written consent of the Company:
(i) engage, as an officer, director,
shareholder, owner, partner, joint venturer,
investor, agent, or in a managerial
capacity, whether as an
24
employee, independent contractor, consultant
or advisor, or as a sales representative, in
the business of developing, marketing and
maintaining real estate related consumer and
realtor oriented applications and services
on the Internet, including, but not limited
to, auctions, electronic commerce,
advertising and promotional services or
conducting the same or similar business of
the Company in the United States (the
"Territory");
(ii) call upon any person who is, at that time,
within the Territory, an employee of the
Company or any of its affiliates, in a
managerial capacity, for the purpose or with
the intent of enticing such employee away
from or out of the employ of the Company or
any of its affiliates;
(iii) call upon any person or entity which is, at
that time, or which has been, within one
year prior to that time, a customer of the
Company or any of its affiliates within the
Territory, for the purpose of engaging in
business of developing, marketing and
maintaining real estate related consumer and
realtor oriented applications and services
on the Internet including, but not limited
to, auctions, electronic commerce,
advertising and promotional services within
the Territory;
(iv) call upon any prospective the Company
acquisition candidate located within the
Territory, on its own behalf or on behalf of
any competitor of the Company or any of its
affiliates, which candidate was either
called upon by the Company or for which the
Company made an acquisition or financing
analysis for itself or any of the Company's
affiliates;
(v) disclose the identity of the investors,
partners, and customers of the Company or
any of its affiliates within the Territory,
whether in existence or proposed, to any
person, firm, partnership, corporation or
other entity whatsoever, for any reason or
purpose whatsoever; or
(vi) promote or assist, financially or otherwise
(including, without limitation, lending
money, guaranteeing loans or otherwise
providing financial assurance in any way),
any person, firm, partnership, corporation
or other entity whatsoever to do any of the
above.
Notwithstanding the above, the foregoing covenants shall not be deemed
to prohibit a Shareholder from acquiring as an investment of not more than one
percent (1%) of the capital stock of a competing business, the stock of which is
traded on a national securities exchange or over-the-counter.
For the purpose of this Agreement, "affiliates" shall mean as to any
person or entity, a person or entity controlling, controlled by, or under the
common control of, a party.
25
(b) CONFIDENTIAL INFORMATION. Each Shareholder
acknowledges that it has heretofore had access to Confidential Information (as
hereinafter defined) of the Company ("Company Information") and may hereafter
have access to Confidential Information of the Company and its affiliates.
Accordingly, the Shareholders each agree not to, at any time during the period
beginning with Effective Time and until the third anniversary of the Effective
time, directly or indirectly, use for their own account, disclose to any person
or reveal, divulge, disclose or communicate to any person, firm or corporation,
other than officers, directors and employees of the Company, in any manner
whatsoever, Company Information. The Shareholders each agree to deliver to the
Company, at any time the Company may request, all memoranda, notes, plans,
records, reports and other documents (and copies thereof) embodying Company
Information which it may then possess or have under its control. As used herein,
"Confidential Information" of an entity or person means information of any kind,
nature or description which is disclosed to or otherwise known to the
Shareholders as a direct or indirect consequence of their ownership interests in
or employment and/or other association (whether past or future) with such entity
or person, which information is not published or generally known in the
businesses in which such entity or person is engaged, including, without
limitation, information concerning products, production and distribution methods
or procedures, goods, services, business methods or procedures, financial
affairs, business plans, vendors, vendor requirements, customers, customer
requirements and production or marketing methods or plans.
(c) PROXY. Each Shareholder hereby appoints Xxxx
XxXxxxxx, Jr., Xxxxxxx Xxxxxxx and Xxxxxxx X. Xxxx, and each of them, as such
Shareholder's proxy with full power of substitution for and in the name, place
and steady of such Shareholder, to vote and act upon the following matters with
respect to all of the shares of WWC Series B Preferred Stock received by such
Shareholder hereunder, or with respect to which such Shareholder is entitled to
vote and act, at WWC's 2002 Annual Meeting of Stockholders (the "Annual
Meeting") and at any adjournment thereof:
(i) in favor of the establishment of a staggered
board of directors upon such terms that the
board of directors of WWC recommends to the
stockholders;
(ii) in favor of a change in the name of WWC to
such name as recommended by the board of
directors to the stockholders;
(iii) to elect as members of the board of
directors the slate of directors nominated
and approved by the board of directors, for
such term of office as recommended by the
board of directors; and
(iv) in favor of an amendment to WWC's
certificate of incorporation to provide that
directors may only be removed (A) for cause,
or (B) upon the unanimous decision of the
other members of the board of directors, and
that such provision may only be thereafter
amended by the affirmative vote of at least
eighty percent (80%) of the shares of WWC's
capital stock outstanding and entitled to
vote on such matter.
26
The proxy granted under this Section 7.2(c) is a material inducement to WWCA and
WWC to enter into this Agreement and such proxy is coupled with an interest and
is irrevocable.
(d) PROHIBITION AGAINST TAKING OTHER ACTIONS. Each of the
Shareholders hereby agrees not to vote the shares of WWC Series B Preferred
Stock received by such Shareholder hereunder, or consent with respect thereto,
in any manner prior to the Annual Meeting for the purpose of electing, removing
or terminating or affirming the election, removal or termination of any director
of WWC.
(e) EQUITABLE AND OTHER RELIEF. In the event of a breach
or threatened breach by a Shareholder of the provisions of Section 7.2(a), (b),
(c) or (d) the Shareholders each acknowledge and agree that such a breach or
threatened breach will cause irreparable injury to the Company for which an
adequate remedy is not available at law. Therefore, the parties agree that the
Company shall be entitled, without the posting of any bond, to an injunction
restraining a Shareholder, in whole or in part, from such breach or threatened
breach. Nothing herein shall be construed as prohibiting the Company from
pursuing any other available remedies, for such breach or threatened breach at
law or in equity, including the recovery of damages from the Shareholder. The
Shareholders each acknowledge that the possible restrictions on its activities
which may occur as a result of the performance of its obligations under Sections
7.2(a) and (b) are reasonably required for the protection of the Company and its
investments. The Shareholders each agree that in the event of any violation of
any of the provisions of this Agreement by it, the Company, in addition to such
other rights and remedies as it may have at law or in equity, shall be entitled
to an injunction to be issued by a court of competent jurisdiction restraining
and prohibiting such Shareholder from committing or continuing any violation of
such provisions.
7.3 COVENANTS OF WWC. At and subsequent to the Effective Time, WWC
hereby guarantees the payment obligations of the Company under those certain
Employment Agreements between the Company and Xxxx Xxxxxx and the Company and
Xxxxxxx Xxxxxxxx to be entered into in connection with that certain Agreement
and Plan of Merger dated as of February 25, 2002, among the Company, AMS
Acquisition, L.L.C, a Texas limited liability company, Accelerated Marketing
Services, Inc., an Alabama corporation, AMS Xxxxxxxx.xxx, L.L.C, an Alabama
limited liability company and Xxxx Xxxxxx and Xxxxxxx Xxxxxxxx (the "AMS
Acquisition Agreement").
ARTICLE VIII
LIMITATION ON TRANSFER OF WWC SERIES B PREFERRED COMMON STOCK
8.1 RESTRICTION ON TRANSFER. The shares of WWC Series B Preferred
Stock to be issued to the Shareholders in the Merger will not be registered
under the Securities Act on the Closing Date and may not be transferred, sold or
otherwise disposed of by the Shareholders except pursuant to an effective
registration statement under the Securities Act or in accordance with an
exemption from the registration requirements of the Securities Act.
8.2 RESTRICTIVE LEGEND. Each certificate representing shares of
WWC Series B Preferred Stock issued by WWC to the Shareholders in accordance
with Section 2.2 shall bear the following legend:
27
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND
ARE "RESTRICTED SECURITIES" AS THAT TERM IS DEFINED IN RULE
144 UNDER THE ACT, AND MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF BY THE HOLDER EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT FILED UNDER THE ACT, AS
AMENDED, AND IN COMPLIANCE WITH APPLICABLE SECURITIES LAWS OF
ANY STATE WITH RESPECT THERETO OR IN ACCORDANCE WITH AN
OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE
ISSUER THAT AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE
AND ALSO MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
BY THE HOLDER WITHOUT COMPLIANCE WITH THE APPLICABLE
SECURITIES AND EXCHANGE COMMISSION RULES AND REGULATIONS.
8.3 REMOVAL OF RESTRICTIVE LEGEND. WWC agrees to remove such
legend (or any relevant portion thereof), by prompt delivery of substitute
certificates upon the request of the holder if at such time such legend (or
portion thereof) is no longer required for purposes of, or applicable pursuant
to, the prior provisions of this Section 8.2.
ARTICLE IX
DEFAULT; TERMINATION
9.1 EVENTS OF DEFAULT. An Event of Default shall mean the
occurrence of one or more of the following described events:
(a) The Company shall default under any agreement under
which any Indebtedness in an aggregate principal amount of $50,000, or more is
created in a manner entitling the holder of such Indebtedness to accelerate the
maturity of such Indebtedness, and such default shall not be remedied to the
Company's reasonable satisfaction for a period of thirty (30) days from the
earlier of (i) written notice from the Company of such default or (ii) actual
knowledge of the Company of such default; any representation or warranty herein
made by the Company, or any certificate or financial statement furnished
pursuant to the provisions hereto shall prove to have been false or misleading
in any material respect as of the time made or furnished or deemed made or
furnished;
(b) The Company shall default in the performance of any
other covenant, condition or provision of this Agreement and such default shall
not be remedied to the WWC's reasonable satisfaction within of thirty (30) days
from the earlier of (i) written notice from the Company of such default or (ii)
actual knowledge by the Company of such default;
(c) A proceeding shall have been instituted in a court
having jurisdiction in the premises seeking a decree or order for relief in
respect of the Company in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or for the
appointment of a receiver, liquidator, assignee, custodian, "trustee,
sequestrator (or similar official) of the Company or for any substantial part of
its property, or for the winding-up or liquidation of
28
their affairs, and such proceeding shall remain undismissed or unstayed and in
effect for a period of sixty (60) days;
(d) The Company shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, shall consent to the entry of an order for relief in an involuntary case
under any such law, or shall consent to the appointment of or taking possession
by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) of the Company or for any substantial part of their property,
or shall make a general assignment for the benefit of creditors, or shall fail
generally to pay their debts as they become due, or shall take any action in
furtherance of any of the foregoing; and
(e) A final judgment which, with other undischarged final
judgments against any the Company, exceeds an aggregate of $50,000, shall have
been entered against the Company, as the case may be, if, within thirty (30)
days after the entry thereof, such judgment shall not have been discharged or
execution thereof stayed pending appeal, or if, within thirty (30) days after
the expiration of any such stay, such judgment shall not have been discharged.
9.2 TERMINATION. This Agreement may be terminated, and the
transactions contemplated hereby abandoned, prior to the Closing as follows:
(a) by WWCA, WWC and the Company by mutual written
consent;
(b) by WWCA or WWC in the event any of the conditions in
Section 6.2 have not been satisfied on or before December 31, 2002, through no
fault of the Company;
(c) by the Company in the event any of the conditions in
Section 6.3 have not been satisfied on or before December 31, 2002, through no
fault of WWCA or WWC;
(d) by either WWCA or WWC upon the occurance of an Event
of Default; or
(e) by the Company on the other hand, if WWCA or WWC
breaches any material obligation hereunder, and the breach has not been cured
within thirty (30) days of WWC's receipt of a written notice from the Company
which specifies the breach.
9.3 EFFECT OF TERMINATION. If this Agreement is terminated
pursuant to Sections 9.2(a), (b) or (c) all rights and obligations of the
parties hereunder shall terminate without liability of any party to any other
party. If, however, this Agreement is terminated under any other provision of
Section 9.2, such termination shall be without prejudice to any and all claims,
rights and remedies that the parties may have against each other.
ARTICLE X
GENERAL PROVISIONS
10.1 HEADINGS. Section headings in this Agreement are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of this Agreement.
10.2 ENTIRE AGREEMENT; ASSIGNMENT. This Agreement embodies the
entire agreement and understanding among WWCA, WWCA, the Company and the
Shareholders and supersede all prior
29
agreements and understandings among such parties relating to the subject matter
thereof. This Agreement may not be assigned without the prior written consent of
the other parties.
10.3 BENEFITS OF THIS AGREEMENT. This Agreement shall not be
construed so as to confer any right or benefit upon any Person other than the
parties to this Agreement and their respective successors and assigns.
10.4 AMENDMENT. No amendment or modification to this Agreement
shall be effective, unless in writing and signed by all the parties.
10.5 SEVERABILITY. Any provision in this Agreement that is held to
be inoperative, unenforceable, or invalid in any jurisdiction shall, as to that
jurisdiction, be inoperative, unenforceable, or invalid without affecting the
remaining provisions in that jurisdiction or the operation, enforceability, or
validity of that provision in any other jurisdiction, and to this end the
provisions of this Agreement are declared to be severable.
10.6 NOTICES. All notices, requests and other communications to any
party hereunder shall be in writing (including electronic transmission,
facsimile transmission or similar writing) and shall be given to such party at
(a) its address or facsimile number set forth on the signature pages hereof or
(b) such other address or facsimile number as such party may hereafter specify.
Each such notice, request or other communication shall be effective (i) if given
by facsimile transmission, when transmitted to the facsimile number specified in
this Section and confirmation of receipt is received, (ii) if given by mail, 72
hours after such communication is deposited in the mail, certified or registered
with first class postage prepaid, addressed as aforesaid, or (iii) if given by
any other means, when delivered (or, in the case of electronic transmission,
received) at the address specified in this Section.
10.7 DISPUTE RESOLUTION. ANY AND ALL DISPUTES, CONTROVERSIES AND
CLAIMS ARISING OUT OF OR RELATING TO THIS AGREEMENT THE DEBENTURES OR CONCERNING
THE RESPECTIVE RIGHTS OR OBLIGATIONS OF THE PARTIES HERETO SHALL BE SETTLED AND
DETERMINED BY ARBITRATION BEFORE A PANEL OF ONE (1) ARBITRATOR PURSUANT TO THE
COMMERCIAL RULES THEN IN EFFECT OF THE AMERICAN ARBITRATION ASSOCIATION, WITH
SUCH ARBITRATION TAKING PLACE IN DALLAS, TEXAS. EACH PARTY SHALL HAVE NO LONGER
THAN THREE (3) CALENDAR DAYS TO PRESENT ITS POSITION. JUDGMENT UPON THE AWARD
RENDERED MAY BE ENTERED IN ANY COURT HAVING JURISDICTION (AS LIMITED BY THE
VENUE PROVISIONS OF SECTION 10.9, BELOW) OR APPLICATION MAY BE MADE TO SUCH
COURT FOR A JUDICIAL ACCEPTANCE OF THE AWARD AND AN ORDER OF ENFORCEMENT. THE
PARTIES AGREE THAT THE ARBITRATORS SHALL HAVE THE POWER TO AWARD DAMAGES,
INJUNCTIVE RELIEF AND REASONABLE ATTORNEYS' FEES AND EXPENSES TO ANY PARTY IN
SUCH ARBITRATION.
10.8 CHOICE OF LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO ITS CHOICE OF
LAWS PROVISIONS.
30
10.9 VENUE. SUBJECT TO SECTION 10.7, THE EXCLUSIVE JURISDICTION FOR
ANY CLAIM OR CONTROVERSY ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE
IN THE STATE AND FEDERAL COURTS LOCATED IN DALLAS COUNTY, TEXAS AND EACH PARTY
HERETO IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE
VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT
SUCH COURT IS AN INCONVENIENT FORUM.
10.10 WAIVER OF JURY TRIAL. WWCA, WCC, THE COMPANY AND THE
SHAREHOLDERS HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR
OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS
AGREEMENT OR THE DEBENTURES OR THE RELATIONSHIP ESTABLISHED THEREUNDER.
10.11 COUNTERPARTS; FACSIMILE. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one
agreement, and any of the parties hereto may execute this Agreement by signing
any such counterpart. This Agreement may be executed and delivered by facsimile
copy. In the event that this Agreement is executed and delivered by facsimile
copy, an original hard copy shall be delivered to the parties within 48 hours.
31
IN WITNESS WHEREOF, WWCA, WWC, the Company and the Shareholders have
executed this Agreement as of the date first above written.
X-XXXX.XXX, INC.
By: /s/ Xxxx X. XxXxxxxx, Xx.
Title: President
Address: 00000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: _____________________________
Telephone: (000) 000-0000
Fax: (000) 000-0000
WWC ACQUISITION, INC.
By: /s/ Xxxx X. XxXxxxxx, Xx.
Title: President
Address: c/o 0000 X. Xxxxxxx Xxxxxxxxxx,
Xxxxx 000
Xxxxxxxxxx, Xxxxx 00000
Attention: Xxxxxxx Xxxxxxx, Secretary
Telephone: (000) 000-0000
Fax: (000) 000-0000
WIRELESS WEBCONNECT!, INC.
By: /s/ Xxxx X. XxXxxxxx, Xx.
Title: President
Address: c/o 0000 X. Xxxxxxx Xxxxxxxxxx,
Xxxxx 000
Xxxxxxxxxx, Xxxxx 00000
Attention: Xxxxxxx Xxxxxxx, Secretary
Telephone: (000) 000-0000
Fax: (000) 000-0000
SHAREHOLDERS:
[See attached signature pages]
SIGNATURE PAGE OF
SHAREHOLDER
TO AGREEMENT AND PLAN OF MERGER
This Signature Page to that certain Agreement and Plan of Merger, dated
as provided therein, by and among Wireless WebConnect!, Inc., WWCA Acquisition,
Inc., X-Xxxx.xxx, Inc., and the shareholders of X-Xxxx.xxx, Inc. (the "Merger
Agreement"), is hereby executed by the undersigned, as a Shareholder (as defined
therein), as of the date of the Merger Agreement.
In an individual:
________________________________________
Printed Name:________________________
If a legal entity:
________________________________________
By:_____________________________________
Printed Name:________________________
EXHIBIT A
CERTIFICATE OF AMENDMENT
A-1
EXHIBIT B
ARTICLES OF MERGER
OF
WWC ACQUISITION, INC.
(A TEXAS CORPORATION)
AND
X-XXXX.XXX, INC.
(A TEXAS CORPORATION)
To the Secretary of State
State of Texas
Pursuant to the provisions of Article 5.04 of the Texas Business Corporation Act
(the "TBCA"), X-Xxxx.xxx, Inc., a Texas corporation ( the "Company"), and WWC
Acquisition, Inc., a Texas corporation (the "WWCA", and together with the
Company, the "Constituent Corporations"), do hereby submit the following
Articles of Merger.
1. The names and addresses of the constituent corporations
participating in the merger and the State under which they are incorporated are
as follows:
NAME: STATE OF INCORPORATION:
X-Xxxx.xxx, Inc. Texas
00000 Xxxxxx Xxxx,
Xxxxx 000
Xxxxxxx, Xxxxx 00000
WWC Acquisition, Inc. Texas
c/o 0000 X. Xxxxxxx Xxxxxxxxxx,
Xxxxx 000
Xxxxxxxxxx, Xxxxx 00000
2. The terms and conditions of the Agreement and Plan of Merger,
dated _____, 2002 (the "Plan of Merger") whereby WWC Acquisition, Inc. will
merge with and into X-Xxxx.xxx, Inc. are annexed hereto as EXHIBIT A and made a
part hereof. The Plan of Merger was duly approved and adopted in accordance with
Article 5.03 of the TBCA.
3. Article ___ of the Articles of Incorporation of X-Xxxx.xxx,,
Inc., shall be amended in their entirety to read as follows:
[Change of Name]
B-1
Except as set forth above, the Articles of Incorporation and Bylaws of
X-Xxxx.xxx, Inc., in effective immediately prior to the merger, shall be in full
force and effect and remain unchanged by the merger.
4. A fully executed Plan of Merger is on file at the principal
place of business of X-Xxxx.xxx, Inc. at 00000 Xxxxxx Xxxx, Xxxxx 000, Xxxxxxx,
Xxxxx 00000; and a copy of the Plan of Merger will be furnished upon written
request and without cost, to any shareholder of each corporation that is a party
to or created by the Plan of Merger and to any creditor or obligee of the
parties of the merger at the time of the merger if such obligation is then
outstanding.
5. As to each corporation the approval of whose shareholders is
required, the number of shares outstanding and voted for and against the Plan of
Merger. No shares either of the constituent corporations are entitled to vote on
the Plan of Merger as a class.
Number of Shares Number of Number of
Outstanding and Shares Voted Shares Voted
Name: Entitled to Vote: For the Plan: Against the Plan:
----- ----------------- ------------- -----------------
X-Xxxx.xxx, Inc. 141,367,810 Common 141,367,810 -0-
25,000,000 Series B Common 25,000,000 -0-
WWC Acquisition, Inc. 1,000 Common 1,000 -0-
6. With respect to each of the constituent corporations, the Plan
of Merger and the performance of its terms were duly authorized by all action
required by the TBCA and by their respective constituent documents.
IN WITNESS WHEREOF, the undersigned have caused these Articles of
Merger to be executed by an authorized officer on the ___ day of ________, 2002.
WWC ACQUISITION, INC.,
a Texas corporation
By: __________________________________________
Title: _______________________________________
X-XXXX.XXX, INC.,
a Texas corporation
By: __________________________________________
Title: _______________________________________
B-2
EXHIBIT A
AGREEMENT AND PLAN OF MERGER
EXHIBIT C
SHAREHOLDERS
SHAREHOLDER COMMON CLASS B PREFERRED
AUTHORIZED AUTHORIZED AUTHORIZED
375,000,000 25,000,000 50,000,000
----------- ---------- ----------
Voting 1 to 1 Voting 10 to 1 Undesignated
ISSUED ISSUED ISSUED
Xxxxxx Kingdom 80,000,000 25,000,000 0
Company, Ltd.
Xxxxxx Xxxxxxx Xxxxxx 10,000,000 0 0
Xxxxx Investment
Limited 5,000,000 0 0
Xxxxxxx Family
Partners, Ltd. 400,000 0 0
American Heritage
Investments, L.L.C. 6,872,953 0 0
Xxxxxxx Information
Services Corporation 36,000,000 0 0
Xxxx Xxxxxx* 1,560,000
Xxxxxxx Xxxxxxxx* 1,440,000
Xxxxxx Xxxxxxx
Xxxx Xxxxxx Custodian
For Xxxxxx X. Xxxxx 20,000 0 0
Xxxxxx Xxxxxx
Insurance & Risk Mgmt. 12,000 0 0
Xxxxxx X. Xxxxx 40,000 0 0
Xxxxxxx X. Xxxxx 20,000 0 0
C-1
Xxxxx Xxxxxx and
Xxxx Xxxxxxxx 2,857 0 0
------------------- ----------------------- ------------------------
141,367,810 25,000,000 0
_________* To be acquired under the AMS Acquisition Agreement.
2
