EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
TRANSWESTERN PUBLISHING COMPANY LLC
WORLDPAGES MERGER SUBSIDIARY, INC.
AND
XXXXXXXXXX.XXX, INC.
DATED AS OF APRIL 26, 2001
TABLE OF CONTENTS
ARTICLE I.........................................................................................................2
DEFINITIONS.......................................................................................................2
Section 1.1. ACQUISITION PROPOSAL...................................................................2
Section 1.2. AFFILIATE..............................................................................2
Section 1.3. AGREEMENT..............................................................................2
Section 1.4. ALTERNATIVE ACQUISITION................................................................2
Section 1.5. AMENDMENT AGREEMENT....................................................................2
Section 1.6. AUTOMATIC REDEMPTION DATE..............................................................2
Section 1.7. CERTIFICATES...........................................................................2
Section 1.8. CERTIFICATE OF MERGER..................................................................2
Section 1.9. CLOSING; CLOSING DATE..................................................................2
Section 1.10. CODE...................................................................................2
Section 1.11. COMMITTEE..............................................................................3
Section 1.12. CONFIDENTIALITY AGREEMENT..............................................................3
Section 1.13. CONSTITUENT CORPORATIONS...............................................................3
Section 1.14. CONTRACTS..............................................................................3
Section 1.15. CONVERTIBLE DEBENTURES.................................................................3
Section 1.16. CREDIT AGREEMENT.......................................................................3
Section 1.17. DIRECTORS PLAN.........................................................................3
Section 1.18. DISSENTING SHARES......................................................................3
Section 1.19. EFFECTIVE TIME.........................................................................3
Section 1.20. EMPLOYEE OPTIONS.......................................................................3
Section 1.21. ERISA..................................................................................3
Section 1.22. EXCHANGE ACT...........................................................................3
Section 1.23. EXCHANGEABLE SHARE CONSIDERATION.......................................................4
Section 1.24. EXPENSES...............................................................................4
Section 1.25. FIDUCIARY DETERMINATION................................................................4
Section 1.26. FUNDED DEBT............................................................................4
Section 1.27. GAAP...................................................................................5
Section 1.28. GCL....................................................................................5
Section 1.29. GOVERNMENTAL AUTHORITY.................................................................5
Section 1.30. HSR ACT................................................................................5
Section 1.31. INDEMNIFIED PARTIES....................................................................5
Section 1.32. INTELLECTUAL PROPERTY..................................................................5
Section 1.33. IRS....................................................................................5
Section 1.34. KNOWLEDGE OF WPZ.......................................................................5
Section 1.35. LAW....................................................................................5
Section 1.36. LATEST BALANCE SHEET...................................................................5
Section 1.37. MATERIAL ADVERSE EFFECT................................................................6
i
Section 1.38. MERGER.................................................................................6
Section 1.39. MERGER CONSIDERATION...................................................................6
Section 1.40. MERGER SUBSIDIARY......................................................................6
Section 1.41. MSDW...................................................................................6
Section 1.42. NYSE...................................................................................6
Section 1.43. 1997 PLAN..............................................................................6
Section 1.44. OPTIONS................................................................................6
Section 1.45. OTHER OPTIONS..........................................................................6
Section 1.46. OUT OF THE MONEY OPTION................................................................6
Section 1.47. OWNED REAL PROPERTY....................................................................6
Section 1.48. PARENT.................................................................................6
Section 1.49. PARENT'S REPRESENTATIVES...............................................................6
Section 1.50. PAYING AGENT...........................................................................7
Section 1.51. PAYMENT FUND...........................................................................7
Section 1.52. PERMITS................................................................................7
Section 1.53. PERMITTED ENCUMBRANCES.................................................................7
Section 1.54. PERMITTED INVESTMENTS..................................................................7
Section 1.55. PERSON.................................................................................7
Section 1.56. PROXY STATEMENT........................................................................7
Section 1.57. SEC....................................................................................7
Section 1.58. SECURITIES ACT.........................................................................7
Section 1.59. SELLERS................................................................................7
Section 1.60. SHARES.................................................................................8
Section 1.61. SPECIAL MEETING........................................................................8
Section 1.62. STOCK OPTION PLANS.....................................................................8
Section 1.64. SUBSIDIARY; SUBSIDIARIES...............................................................8
Section 1.65. SUPERIOR PROPOSAL......................................................................8
Section 1.66. SURVIVING CORPORATION..................................................................8
Section 1.67. TAX RETURNS............................................................................8
Section 1.68. TAXES..................................................................................8
Section 1.69. WPZ AFFILIATES.........................................................................9
Section 1.70. WPZ BENEFIT PLANS......................................................................9
Section 1.71. WPZ COMMON STOCK.......................................................................9
Section 1.72. WPZ COMPANIES..........................................................................9
Section 1.73. WPZ ERISA PLAN.........................................................................9
Section 1.74. WPZ EXPENSES...........................................................................9
Section 1.75. WPZ FISCAL FINANCIAL STATEMENTS........................................................9
Section 1.76. WPZ PREFERRED STOCK....................................................................9
Section 1.77. WPZ'S REPRESENTATIVES..................................................................9
Section 1.78. WPZ SEC REPORTS........................................................................9
ii
ARTICLE II
[RESERVED]..............................................................................................10
ARTICLE III
THE MERGER..............................................................................................10
Section 3.1. THE MERGER............................................................................10
Section 3.2. CLOSING...............................................................................10
Section 3.3. EFFECTIVE TIME OF THE MERGER..........................................................10
Section 3.4. EFFECTS OF THE MERGER.................................................................10
Section 3.5. STOCKHOLDERS' MEETING.................................................................11
Section 3.6. WPZ APPROVAL; REPRESENTATIONS AND WARRANTIES..........................................12
Section 3.7. PREPARATION OF PROXY STATEMENT AND OTHER FILINGS; INFORMATION.........................12
Section 3.8. EXCHANGE ACT AND NYSE FILINGS; STATE TAKEOVER LAWS....................................12
ARTICLE IV
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF
THE CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES..................................................13
Section 4.1. EFFECT ON CAPITAL STOCK...............................................................13
Section 4.2. CONVERSION OF SECURITIES..............................................................13
Section 4.3. PAYMENT FOR SHARES....................................................................14
Section 4.4. STOCK TRANSFER BOOKS..................................................................16
Section 4.5. STOCK OPTIONS AND WARRANTS............................................................16
Section 4.6. DISSENTING SHARES.....................................................................17
Section 4.7. CONVERTIBLE DEBENTURES................................................................17
Section 4.8. CLASS A SPECIAL SHARES................................................................17
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF
PARENT AND MERGER SUBSIDIARY............................................................................17
Section 5.1. ORGANIZATION AND AUTHORITY............................................................18
Section 5.2. AUTHORITY RELATIVE TO THIS AGREEMENT..................................................18
Section 5.3. CONSENTS AND APPROVALS................................................................18
Section 5.4. INFORMATION SUPPLIED..................................................................19
Section 5.5. FINANCIAL CAPABILITY..................................................................19
Section 5.6. FEES AND EXPENSES OF BROKERS AND OTHERS...............................................19
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF WPZ...................................................................20
Section 6.1. ORGANIZATION AND AUTHORITY OF THE WPZ COMPANIES.......................................20
Section 6.2. CAPITALIZATION........................................................................20
Section 6.3. AUTHORITY RELATIVE TO THIS AGREEMENT..................................................21
Section 6.4. CONSENTS AND APPROVALS; NO VIOLATIONS.................................................22
Section 6.5. REPORTS...............................................................................22
iii
Section 6.6. ABSENCE OF CERTAIN EVENTS.............................................................23
Section 6.7. LITIGATION............................................................................24
Section 6.8. TITLE TO AND SUFFICIENCY OF ASSETS....................................................24
Section 6.9. CONTRACTS.............................................................................25
Section 6.10. COLLECTIVE BARGAINING AGREEMENT.......................................................25
Section 6.11. EMPLOYEE BENEFIT PLANS................................................................26
Section 6.12. TAX MATTERS...........................................................................26
Section 6.13. REAL PROPERTY.........................................................................28
Section 6.14. COMPLIANCE WITH LAW...................................................................28
Section 6.15. TRANSACTIONS WITH AFFILIATES..........................................................29
Section 6.16. FEES AND EXPENSES OF BROKERS AND OTHERS...............................................29
Section 6.17. ABSENCE OF UNDISCLOSED LIABILITIES; GUARANTEES........................................30
Section 6.18. ENVIRONMENTAL MATTERS.................................................................30
Section 6.19. INFORMATION SUPPLIED..................................................................30
Section 6.20. FUNDED DEBT...........................................................................31
Section 6.21. RELATIONSHIPS. ......................................................................31
Section 6.22. INTELLECTUAL PROPERTY.................................................................31
Section 6.23. PUBLICATIONS IN PROCESS...............................................................32
Section 6.24. LIST OF PUBLICATIONS..................................................................32
Section 6.25. REPLACEMENT OF PHONE LISTINGS. ......................................................32
Section 6.26. ACCOUNTS RECEIVABLES..................................................................32
ARTICLE VII
COVENANTS...............................................................................................33
Section 7.1. CONDUCT OF THE BUSINESS OF WPZ........................................................33
Section 7.2. NO SOLICITATION.......................................................................35
Section 7.3. ACCESS TO INFORMATION; CONFIDENTIALITY AGREEMENT......................................36
Section 7.4. REASONABLE COMMERCIAL EFFORTS.........................................................37
Section 7.5. CONSENTS..............................................................................37
Section 7.6. PUBLIC ANNOUNCEMENTS..................................................................37
Section 7.7. INDEMNIFICATION; INSURANCE............................................................37
Section 7.8. NOTIFICATION OF CERTAIN MATTERS.......................................................38
Section 7.9. RESIGNATIONS..........................................................................39
Section 7.10. FINANCIAL STATEMENTS..................................................................39
ARTICLE VIII
CONDITIONS PRECEDENT TO CONSUMMATION OF THE MERGER......................................................39
Section 8.1. CONDITIONS PRECEDENT TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER..................39
Section 8.2. CONDITIONS PRECEDENT TO OBLIGATIONS OF WPZ............................................40
Section 8.3. CONDITIONS PRECEDENT TO OBLIGATIONS OF PARENT AND MERGER SUBSIDIARY...................40
ARTICLE IX
TERMINATION; AMENDMENT; WAIVER..........................................................................43
iv
Section 9.1. TERMINATION...........................................................................43
Section 9.2. EFFECT OF TERMINATION.................................................................44
Section 9.3. TERMINATION FEES......................................................................45
Section 9.4. AMENDMENT.............................................................................45
Section 9.5. EXTENSION; WAIVER.....................................................................45
ARTICLE X
MISCELLANEOUS...........................................................................................46
Section 10.1. SURVIVAL OF REPRESENTATIONS AND WARRANTIES............................................46
Section 10.2. ENTIRE AGREEMENT; ASSIGNMENT..........................................................46
Section 10.3. NOTICES...............................................................................46
Section 10.4. GOVERNING LAW; CONSENT TO JURISDICTION................................................47
Section 10.5. DESCRIPTIVE HEADINGS..................................................................48
Section 10.6. PARTIES IN INTEREST...................................................................48
Section 10.7. COUNTERPARTS..........................................................................48
Section 10.8. SPECIFIC PERFORMANCE..................................................................48
Section 10.9. FEES AND EXPENSES.....................................................................48
Section 10.10. SEVERABILITY..........................................................................48
ANNEXES AND EXHIBITS
Exhibit 1.33 Knowledge of WPZ
Exhibit 6.1A WPZ Subsidiaries
Exhibit 6.2 WPZ Companies' Outstanding Options, Warrants, Subscriptions or Other Rights
Exhibit 6.4 WPZ Required Consents
Exhibit 6.6 Adverse Changes Affecting WPZ Companies
Exhibit 6.7 WPZ Litigation
Exhibit 6.8 Certain Permitted Liens
Exhibit 6.9 WPZ Contracts
Exhibit 6.10 WPZ Labor Matters
Exhibit 6.11 WPZ Benefit Plans
Exhibit 6.12 Tax Matters Concerning WPZ
Exhibit 6.13 WPZ Real Property
Exhibit 6.15 Transactions With Affiliates by WPZ
Exhibit 6.17 Absence of Undisclosed Liabilities
Exhibit 6.20 WPZ Funded Debt
Exhibit 6.21 Certain Relationships
Exhibit 6.22 WPZ Intellectual Property
Exhibit 6.24 List of Publications
Exhibit 7. 1A Conduct of the Business of WPZ
Exhibit 7.1B Representatives
Exhibit 7.7 Indemnification Agreements
v
Exhibit 8.3(h) Form of Opinion of Xxxxxxx Berlin Shereff Xxxxxxxx, LLP
Exhibit 8.3(k) Form of WPZ Officer's Certificate
Exhibit 8.3(n) Form of Bank of America, N.A. Payoff Letter
vi
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of April 26, 2001 (this
"Agreement"), by and among, TransWestern Publishing Company LLC, a Delaware
limited liability company ("Parent"), WorldPages Merger Subsidiary, Inc., a
Delaware corporation ("Merger Subsidiary"), and XxxxxXxxxx.xxx, Inc., a
Delaware corporation ("WPZ"). Capitalized terms used below have the meanings
assigned such terms in Article I.
RECITALS
WHEREAS, the respective Board of Directors of Parent and Merger
Subsidiary have unanimously approved the acquisition of WPZ by Merger
Subsidiary and the Board of Directors of WPZ have unanimously approved the
acquisition of WPZ by Merger Subsidiary, by means of the merger of Merger
Subsidiary with and into WPZ (the "Merger"), upon the terms and subject to the
conditions set forth in this Agreement, pursuant to which the holders of
Shares will be entitled to receive the Merger Consideration with respect to
their shares and the WPZ Series B Preferred Stock would be redeemed
automatically at a price of $1 per share; and
WHEREAS, the Board of Directors of WPZ (the "Board of Directors")
has, in light of and subject to the terms and conditions set forth herein, (i)
determined that (A) the consideration to be paid for each Share in the Merger
is fair to the stockholders of WPZ, (B) the Merger is otherwise in the best
interests of WPZ and its stockholders, (C) this Agreement is not subject to
the restrictions on business combinations contained in Section 203 of the GCL
and (D) each Other Option that is an Out of the Money Option has no value
because the per share portion of the Merger Consideration is less than the
exercise price required to be paid to receive such Merger Consideration, such
Merger Consideration is the only consideration which the holder of such Out of
the Money Option is entitled to receive upon exercise thereof, and therefore
such Out of the Money Option can be canceled and will be canceled as part of
and upon consummation of the Merger and (ii) resolved to approve and adopt
this Agreement and the transactions contemplated hereby, to submit this
Agreement to WPZ stockholders for their consideration and approval and to
recommend approval and adoption by the stockholders of WPZ of this Agreement;
and
WHEREAS, simultaneously with the execution of this Agreement, the
Sellers have executed and delivered a Voting Agreement to Parent whereby the
Sellers have agreed, subject to termination of this Agreement under Section
9.1(i), to vote their Shares in favor of the Merger and the transactions
contemplated hereby; and
WHEREAS, Parent, Merger Subsidiary and WPZ desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe various conditions to the consummation thereof;
NOW, THEREFORE, in consideration of the foregoing and the mutual
premises, representations, warranties, covenants and agreements herein
contained, the parties hereto, intending to be legally bound, hereby agree as
follows:
ARTICLE I
DEFINITIONS
Section 1.1. ACQUISITION PROPOSAL. "Acquisition Proposal" shall have
the meaning set forth in SECTION 7.2(a) hereof.
Section 1.2. AFFILIATE. "Affiliate" shall have the meaning set forth
in SECTION 6.15 hereof, except when such term refers to an Affiliate of Parent
the word "Parent" shall be substituted for WPZ and WPZ Companies in the
definition set forth in SECTION 6.15.
Section 1.3. AGREEMENT. "Agreement" shall mean this Agreement,
together with the Annexes and Exhibits attached hereto, as amended from time
to time in accordance with the terms hereof.
Section 1.4. ALTERNATIVE ACQUISITION. "Alternative Acquisition" shall
have the meaning given in SECTION 9.3(b) hereof.
Section 1.5. AMENDMENT AGREEMENT. "Amendment Agreement" shall have
the meaning given in SECTION 8.3(n) hereof.
Section 1.6. AUTOMATIC REDEMPTION DATE. "Automatic Redemption Date"
shall have the meaning set forth in Appendix A to the Articles of Association
of ACG Exchange Company.
Section 1.7. CERTIFICATES. "Certificates" shall have the meaning
given in SECTION 4.3(b) hereof.
Section 1.8. CERTIFICATE OF MERGER. "Certificate of Merger" shall
have the meaning given in SECTION 3.3 hereof.
Section 1.9. CLOSING; CLOSING DATE. "Closing" shall mean the closing
held pursuant to SECTION 3.2 hereof, and "Closing Date" shall mean the date on
which the Closing occurs.
2
Section 1.10. CODE. "Code" shall mean, as appropriate, the Internal
Revenue Code of 1954 or of 1986, each as amended.
Section 1.11. COMMITTEE. "Committee" shall have the meaning given to
such term in the 1997 Plan.
Section 1.12. CONFIDENTIALITY AGREEMENT. "Confidentiality Agreement"
shall mean the letter agreement, dated as of December 11, 2000, between Parent
and WPZ.
Section 1.13. CONSTITUENT CORPORATIONS. "Constituent Corporations"
shall have the meaning given in SECTION 3.1 hereof.
Section 1.14. CONTRACTS. "Contracts" shall mean contracts,
agreements, leases, licenses, arrangements, understandings, relationships and
commitments required by SECTION 6.9 to be set forth in EXHIBIT 6.9; provided
that as such term is used in SECTION 7.1, the term "Contracts" shall include
any contract with aggregate obligations in excess of $100,000 or obligations
in excess of $50,000 per annum.
Section 1.15. CONVERTIBLE DEBENTURES. "Convertible Debentures" shall
have the meaning given in SECTION 4.7 hereof.
Section 1.16. CREDIT AGREEMENT. "Credit Agreement" shall have the
meaning given in SECTION 8.3(f) hereof.
Section 1.17. DIRECTORS PLAN. "Directors Plan" shall have the meaning
given in SECTION 4.5 hereof.
Section 1.18. DISSENTING SHARES. "Dissenting Shares" shall have the
meaning given in SECTION 4.6 hereof.
Section 1.19. EFFECTIVE TIME. "Effective Time" shall have the meaning
given in SECTION 3.3 hereof.
Section 1.20. EMPLOYEE OPTIONS. "Employee Options" shall have the
meaning given in SECTION 4.5 hereof.
Section 1.21. ERISA. "ERISA" shall mean the Employee Retirement
Income Security Act of 1974, as amended.
3
Section 1.22. EXCHANGE ACT. "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended.
Section 1.23. EXCHANGEABLE SHARE CONSIDERATION. "Exchangeable Share
Consideration" shall have the meaning set forth in Appendix A to the Articles
of Association of ACG Exchange Company.
Section 1.24. EXPENSES. "Expenses" shall mean all (a) legal,
accounting and consulting fees and expenses, (b) travel related expenses, (c)
commitment and other fees and expenses of Parent's financing sources and (d)
any out-of-pocket cost or expense, in each case, of Parent, its officers,
directors or Affiliates incurred with respect to the transactions contemplated
hereby, the evaluation of WPZ or otherwise relating to the negotiation,
consummation and enforcement of this Agreement.
Section 1.25. FIDUCIARY DETERMINATION. Fiduciary Determination shall
mean a good faith determination by the Board of Directors of WPZ, based upon
and in accordance with the written reasoned advice of independent legal
counsel, that a proposed action is necessary for the Board of Directors of WPZ
to comply with its fiduciary duties to WPZ's stockholders under applicable law.
Section 1.26. FUNDED DEBT. "Funded Debt" of any Person shall mean,
without duplication, (i) all indebtedness for borrowed money or issued in
exchange or substitution for borrowed money (including, without limitation,
indebtedness evidenced by issued but uncashed checks or as amounts drawn
against overdraft lines of credit), (ii) all liabilities of such Person
evidenced by any note, bond, debenture or other debt security, (iii) all
liabilities of such Person for the deferred purchase price of property or
services (excluding operating leases) with respect to which such Person is
liable, contingently or otherwise, as obligor or otherwise, including, without
limitation, all incurred but unpaid liabilities with respect to former
employees for which such Person is liable and all liabilities (whether
earn-outs, indemnity payments, non-compete payments, consulting payments,
bonuses, commissions or other forms of compensation or other similar payments)
that may be payable as a result of or in connection with (x) the Merger or (y)
any acquisition of, or investments in, another Person or in the assets of
another Person (other than trade payables and other current liabilities
incurred in the ordinary course of business which are not more than six months
past due) by such Person, (iv) all commitments by which such Person assures a
creditor against loss (including contingent reimbursement obligations with
respect to letters of credit), other than such commitments that have been
entered into in the ordinary course of business which are not more than six
months past due, (v) all liabilities guaranteed in any manner by such Person
(including guarantees in the form of an agreement to repurchase or reimburse,
but excluding the guaranty of any WPZ Subsidiary of WPZ indebtedness that is
considered Funded Debt), (vi) all liabilities under capitalized leases with
respect to which such Person is liable, contingently or otherwise, as obligor,
guarantor or otherwise, or with respect to which obligations another Person
assures a creditor against loss; and (vii) any fees, penalties (including any
prepayment or similar penalties triggered upon the consummation of the
transactions contemplated hereunder) or accrued and unpaid interest on any of
the foregoing items.
4
Section 1.27. GAAP. "GAAP" shall mean generally accepted accounting
principles as in effect in the United States of America at the time of the
preparation of the subject financial statement.
Section 1.28. GCL. "GCL" shall mean the Delaware General Corporation
Law, as amended.
Section 1.29. GOVERNMENTAL AUTHORITY. "Governmental Authority" shall
mean any federal, state, provincial, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, or any
court, in each case whether of the United States, any of its possessions or
territories, or of any foreign nation.
Section 1.30. HSR ACT. "HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended.
Section 1.31. INDEMNIFIED PARTIES. "Indemnified Parties" shall have
the meaning given in SECTION 7.7(a) hereof.
Section 1.32. INTELLECTUAL PROPERTY. "Intellectual Property" means
all of the following: (i) patents and registered designs, including all
registrations of, and applications for the registration of the same; (ii)
copyrights, including information regarding each registration and pending
application to register any copyrights; (iii) trademarks, servicemarks,
slogans, trade names, trade dress and the like (collectively, and together
with the associated goodwill of each, "Trademarks"), including information
regarding each registration and pending application to register any such
Trademarks; (iv) inventions, confidential processes, methods, patterns,
devices, formulas, trade secrets and other know-how; (v) domestic and foreign
domain name registrations and applications for registration; (vi) computer
software (including, without limitation, data, data bases and documentation);
and (vii) any licenses, agreements or permissions in connection with any of
the foregoing.
Section 1.33. IRS. "IRS" shall mean the Internal Revenue Service.
Section 1.34. KNOWLEDGE OF WPZ. "Knowledge of WPZ" shall mean the
actual knowledge, after due inquiry, of those officers of the WPZ Companies
identified on EXHIBIT 1.33 attached hereto.
Section 1.35. LAW. "Law" shall mean any federal, state, provincial,
local or other law, order, decree, judgment or other requirement of any kind
of any Governmental Authority, and the rules, regulations and orders
promulgated thereunder.
Section 1.36. LATEST BALANCE SHEET. "Latest Balance Sheet" shall have
the meaning set forth in SECTION 6.12(vii).
5
Section 1.37. MATERIAL ADVERSE EFFECT. "Material Adverse Effect" shall
mean, with respect to WPZ or the WPZ Companies, a material adverse effect on the
business, operations, assets, liabilities, financial condition, results of
operations, prospects or value of the WPZ Companies, taken as a whole and, with
respect to Parent, a material adverse effect on the business, operations,
assets, liabilities, financial condition, results of operations, prospects or
value of Parent and its Subsidiaries, taken as a whole.
Section 1.38. MERGER. "Merger" shall mean the merger of Merger
Subsidiary with and into WPZ at the Effective Time.
Section 1.39. MERGER CONSIDERATION. "Merger Consideration" shall mean
$3.00 per Share.
Section 1.40. MERGER SUBSIDIARY. "Merger Subsidiary" shall mean
Worldpages Merger Subsidiary, Inc., a Delaware corporation and wholly-owned
subsidiary of Parent.
Section 1.41. MSDW. "MSDW" shall mean Xxxxxx Xxxxxxx & Co., Inc.,
financial advisors to WPZ.
Section 1.42. NYSE. "NYSE" shall mean the New York Stock Exchange.
Section 1.43. 1997 PLAN. "1997 Plan" shall have the meaning given in
SECTION 4.5 hereof.
Section 1.44. OPTIONS. "Options" shall have the meaning given in
SECTION 4.5 hereof.
Section 1.45. OTHER OPTIONS. "Other Options" shall have the meaning
given in SECTION 4.5 hereof.
Section 1.46. OUT OF THE MONEY OPTION. "Out of the Money Option" shall
mean any Option, the exercise price of which is equal to or greater than the
Merger Consideration.
Section 1.47. OWNED REAL PROPERTY. "Owned Real Property" shall have the
meaning given in SECTION 6.13 hereof.
Section 1.48. PARENT. "Parent" shall mean TransWestern Publishing
Company, LLC, a Delaware limited liability company.
Section 1.49. PARENT'S REPRESENTATIVES. "Parent's Representatives"
shall have the meaning given in SECTION 7.1(b) hereof.
6
Section 1.50. PAYING AGENT. "Paying Agent" shall mean Continental Stock
Transfer Company.
Section 1.51. PAYMENT FUND. "Payment Fund" shall have the meaning given
in SECTION 4.3(a) hereof.
Section 1.52. PERMITS. "Permits" shall mean permits, licenses and
governmental authorizations, registrations and approvals.
Section 1.53. PERMITTED ENCUMBRANCES. "Permitted Encumbrances" shall
mean with respect to each parcel of Owned Real Property: (a) real estate taxes,
assessments and other governmental levies, fees or charges imposed with respect
to such parcel which are not due and payable as of the Closing Date or which are
being contested in good faith and for which adequate reserves therefor have been
made; (b) mechanics and similar statutory liens for labor, materials or supplies
provided with respect to such parcel incurred in the ordinary course of business
for amounts which are not delinquent and which could not, individually or in the
aggregate, have a Material Adverse Effect on the WPZ Companies, taken as a
whole; (c) zoning, building and other land use laws imposed by any Governmental
Authority having jurisdiction over such parcel which are not violated by the
current use or occupancy of such parcel or the operation of the business
thereon; and (d) easements, covenants, conditions, restrictions and other
similar matters of record affecting title to such parcel which do not or would
not materially impair the use or occupancy of such parcel in the operation of
the business.
Section 1.54. PERMITTED INVESTMENTS. "Permitted Investments" shall have
the meaning given in SECTION 4.3(a) hereof.
Section 1.55. PERSON. "Person" shall mean an individual, corporation,
partnership, limited liability company, joint venture, association, trust,
unincorporated organization or other entity.
Section 1.56. PROXY STATEMENT. "Proxy Statement" shall have the meaning
given in SECTION 3.5(a) hereof.
Section 1.57. SEC. "SEC" shall mean the Securities and Exchange
Commission.
Section 1.58. SECURITIES ACT. "Securities Act" shall mean the
Securities Act of 1933, as amended.
Section 1.59. SELLERS. "Sellers" shall mean, collectively, all of the
Persons identified on Schedule A to the Voting Agreement; each, a "Seller".
7
Section 1.60. SHARES. "Shares" shall mean shares of WPZ Common Stock.
Section 1.61. SPECIAL MEETING. "Special Meeting" shall have the meaning
given in SECTION 3.5(a) hereof.
Section 1.62. STOCK OPTION PLANS. "Stock Option Plans" shall have the
meaning given in SECTION 4.5 hereof.
Section 1.63. STOCK PURCHASE. "Stock Purchase" shall have the meaning
given in SECTION 9.3(b).
Section 1.64. SUBSIDIARY; SUBSIDIARIES. "Subsidiary" shall mean (i)
each corporate entity with respect to which a party has the right to vote
(directly or indirectly through one or more other entities or otherwise) shares
representing 50% or more of the votes eligible to be cast in the election of
directors of such entity, (ii) any partnership or limited liability company of
which a party is the general partner or a managing member, as the case may be,
and (iii) each other corporate entity which constitutes a "significant
subsidiary," as defined in Rule 1-02 of Regulation S-X adopted under the
Exchange Act (collectively "Subsidiaries").
Section 1.65. SUPERIOR PROPOSAL. Superior Proposal shall mean an
unsolicited Acquisition Proposal that the Board of Directors of WPZ determines
in good faith, based upon and in accordance with the written advice of an
independent financial advisor of nationally recognized reputation, is (a) more
favorable from a financial point of view to WPZ's stockholders (taking into
account financing contingencies) than the Merger (including, for purposes of
such comparison, any adjustment to the terms and conditions thereof proposed in
writing by Merger Subsidiary and Parent in response to such Acquisition
Proposal) and (b) likely to be consummated in a timely manner.
Section 1.66. SURVIVING CORPORATION. "Surviving Corporation" shall have
the meaning given in SECTION 3.1 hereof.
Section 1.67. TAX RETURNS. "Tax Returns" shall mean any report, return,
information statement, payee statement or other information required to be
provided to any federal, state, local or foreign Governmental Authority, or
otherwise retained, with respect to Taxes or the WPZ Benefit Plans.
Section 1.68. TAXES. "Taxes" shall mean any and all taxes, levies,
imposts, duties, assessments, charges and withholdings imposed or required to be
collected by or paid over to any federal, state, local or foreign Governmental
Authority or any political subdivision thereof, including without limitation
income, gross receipts, AD VALOREM, value added, minimum tax, franchise, sales,
use, excise, license, real or personal property, unemployment, disability, stock
transfer, mortgage recording, estimated, withholding or other tax, governmental
fee or other like assessment or charge of any kind whatsoever, and including any
interest, penalties, fines, assessments or additions to tax
8
imposed in respect of the foregoing, or in respect of any failure to comply with
any requirement regarding Tax Returns.
Section 1.69. WPZ AFFILIATES. "WPZ Affiliates" shall have the meaning
given in SECTION 6.15 hereof.
Section 1.70. WPZ BENEFIT PLANS. "WPZ Benefit Plans" shall have the
meaning given in SECTION 6.11(a) hereof.
Section 1.71. WPZ COMMON STOCK. "WPZ Common Stock" shall mean the
common stock, $.0001 par value, of XxxxxXxxxx.xxx, Inc.
Section 1.72. WPZ COMPANIES. "WPZ Companies" shall mean XxxxxXxxxx.xxx,
Inc. and its Subsidiaries.
Section 1.73. WPZ ERISA PLAN. "WPZ ERISA Plan" shall have the meaning
given in SECTION 6.11(a) hereof.
Section 1.74. WPZ EXPENSES. "WPZ Expenses" shall mean all (a) legal,
accounting, investment banking, consulting and similar fees and expenses, (b)
travel and related expenses and (c) all other out of pocket fees and expenses,
in each case, incurred by WPZ and its Subsidiaries (or for which WPZ and its
Subsidiaries are responsible) in connection with the transactions contemplated
hereby.
Section 1.75. WPZ FISCAL FINANCIAL STATEMENTS. "WPZ Fiscal Financial
Statements" shall mean the audited consolidated balance sheet of WPZ, as of
December 31, 2000, and the related audited consolidated statements of earnings,
stockholders' equity and cash flows for the fiscal year then ended, together
with the notes thereto.
Section 1.76. WPZ PREFERRED STOCK. "WPZ Preferred Stock" shall mean the
preferred stock, $.0001 par value per share, of XxxxxXxxxx.xxx, Inc.
Section 1.77. WPZ'S REPRESENTATIVES. "WPZ' s Representatives" shall
have the meaning given in SECTION 7.1(b) hereof.
Section 1.78. WPZ SEC REPORTS. "WPZ SEC Reports" shall mean all
documents filed by WPZ with the SEC pursuant to the Exchange Act or the
Securities Act.
9
ARTICLE II
[RESERVED]
Intentionally Left Blank
ARTICLE III
THE MERGER
Section 3.1. THE MERGER. Upon the terms and subject to the conditions
set forth in this Agreement, and in accordance with the GCL, Merger Subsidiary
shall be merged with and into WPZ at the Effective Time. At the Effective Time,
the separate corporate existence of Merger Subsidiary shall cease, and WPZ shall
continue as the surviving corporation and direct wholly-owned subsidiary of
Parent (Merger Subsidiary and WPZ are sometimes hereinafter referred to as
"Constituent Corporations" and, as the context requires, WPZ is sometimes
hereinafter referred to as the "Surviving Corporation"), and shall continue
under the name "XxxxxXxxxx.xxx, Inc.," and shall continue to be governed by the
laws of the State of Delaware.
Section 3.2. CLOSING. Unless this Agreement shall have been terminated
and the transactions herein contemplated shall have been abandoned pursuant to
SECTION 9.1, the closing of the Merger (the "Closing") shall take place at 10:00
a.m., local time, on the third business day following satisfaction or waiver of
the conditions set forth in ARTICLE VIII (the "Closing Date"), at the office of
Xxxxxxxx & Xxxxx, in Chicago, Illinois, unless another date, time or place is
agreed to in writing by the parties hereto.
Section 3.3. EFFECTIVE TIME OF THE MERGER. Subject to the provisions of
this Agreement, the parties hereto shall cause the Merger to be consummated by
filing a certificate of merger (the "Certificate of Merger") with the Secretary
of State of the State of Delaware, as provided in the GCL, as soon as
practicable on or after the Closing Date. The Merger shall become effective upon
such filing or at such time thereafter as is provided in the Certificate of
Merger (the "Effective Time").
Section 3.4. EFFECTS OF THE MERGER.
(a) The Merger shall have the effects as set forth in the
applicable provisions of the GCL. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time, all the properties,
rights, privileges, powers and franchises of WPZ and Merger Subsidiary shall
vest in the Surviving Corporation, and all debts, liabilities and duties of WPZ
and Merger Subsidiary shall become the debts, liabilities and duties of the
Surviving Corporation.
(b) The directors and the officers of Merger Subsidiary
immediately prior to the Effective Time shall, from and after the Effective
Time, be the initial directors and officers of the Surviving Corporation until
their successors have been duly elected or appointed and qualified, or
10
until their earlier death, resignation or removal in accordance with the
Surviving Corporation's Certificate of Incorporation and Bylaws.
(c) The Certificate of Incorporation of Merger Subsidiary
immediately prior to the Effective Time shall be the Certificate of
Incorporation of the Surviving Corporation, until thereafter duly amended in
accordance with the terms thereof and the GCL.
(d) The Bylaws of Merger Subsidiary as in effect immediately
prior to the Effective Time shall be the Bylaws of the Surviving Corporation,
until thereafter duly amended in accordance with the terms thereof, the
Certificate of Incorporation and the GCL.
Section 3.5. STOCKHOLDERS' MEETING.
(a) WPZ, acting through its Board of Directors, shall, in
accordance with applicable Law and WPZ's Certificate of Incorporation and
Bylaws:
(i) duly call, set a record date for, give
notice of, convene and hold a special meeting of its stockholders (the
"Special Meeting") as soon as practicable for the purpose of considering and
taking action upon the Merger and this Agreement;
(ii) submit this Agreement and the Merger to
the WPZ stockholders for their consideration at the Special Meeting;
(iii) as promptly as practicable prepare and
file with the SEC a preliminary proxy statement relating to the Merger and
this Agreement, and (u) obtain and furnish the information required to be
included by the SEC in the Proxy Statement (as hereinafter defined), (v)
after consultation with Parent, use its reasonable commercial efforts to
respond promptly to any comments made by the SEC with respect to the
preliminary proxy statement, (w) furnish all information regarding WPZ and
its Subsidiaries required in the Proxy Statement or otherwise by the SEC
(including, without limitation, financial statements and supporting schedules
and certificates and, reports of independent public accountants), (x) cause a
definitive proxy statement prepared in connection with the Merger (the "Proxy
Statement") to be mailed to its stockholders, (y) use its reasonable
commercial efforts to obtain the necessary approvals of the Merger and this
Agreement by its stockholders, and (z) use its reasonable commercial efforts
otherwise to comply with all legal requirements applicable to such meeting;
(iv) subject to the WPZ Board of Directors
making a Fiduciary Determination after receiving a Superior Proposal to
change its recommendation, include in the Proxy Statement the recommendation
of WPZ's Board of Directors that stockholders of WPZ vote in favor of the
approval of the Merger and this Agreement (the "Company Recommendation");
(v) subject to the WPZ Board of Directors
making a Fiduciary Determination after receiving a Superior Proposal to
change the Company Recommendation, take
11
all action to solicit from WPZ stockholders proxies and take all other action
necessary or advisable to secure the approval of the stockholders required by
the GCL and any other applicable law and WPZ's Certificate of Incorporation
and Bylaws and necessary to satisfy the condition set forth in SECTION 8.1(a)
hereof.
Section 3.6. WPZ APPROVAL; REPRESENTATIONS AND WARRANTIES. WPZ hereby
approves of and consents to the Merger and represents and warrants that the
Board of Directors (at a meeting duly called and held) has (A) unanimously
determined that each of this Agreement and the transactions contemplated hereby,
including the Merger, are fair to and in the best interests of WPZ and all of
its stockholders, (B) approved this Agreement and the transactions contemplated
hereby, including the Merger, (C) resolved to elect not to be subject to any
state takeover law that is or purports to be applicable to the Merger or the
transactions contemplated by this Agreement, (D) taken all steps necessary to
render SECTION 203 of the GCL inapplicable to this Agreement, and the
transactions contemplated hereby and thereby, including the Merger, (E) resolved
that each Other Option that is an Out of the Money Option has no value because
the per share portion of the Merger Consideration is less than the exercise
price required to be paid to receive such Merger Consideration; such Merger
Consideration is the only consideration the holder is entitled to receive upon
exercise of such Out of the Money Option and, therefore, all Other Options which
are Out of the Money Options may be canceled upon consummation of the Merger and
(F) subject to the Board of Directors making a subsequent Fiduciary
Determination, after receiving a Superior Proposal, to change its
recommendation, resolved to recommend that the holders of WPZ Common Stock
approve this Agreement, the Merger and the transactions contemplated hereby.
Section 3.7. PREPARATION OF PROXY STATEMENT AND OTHER FILINGS;
INFORMATION. WPZ and Parent and Merger Subsidiary shall cooperate in the
preparation of the Proxy Statement and all other filings and submissions
required by the SEC or any other Governmental Authority in connection with the
transactions contemplated by this Agreement. WPZ and the Board of Directors
shall permit Parent and Merger Subsidiary and its counsel to participate in all
communications with the SEC and its staff regarding the Proxy Statement (except
to the extent they relate to a Superior Proposal), including all meetings and
telephone conferences relating to the Proxy Statement, this Agreement or the
transactions contemplated herein, provided that in the event that such
participation is not practicable, the Board of Directors shall promptly inform
Parent and Merger Subsidiary of the content of all such communications and the
participants involved therein. All written communications to the stockholders of
WPZ shall be subject to the review of Parent and Merger Subsidiary.
Section 3.8. EXCHANGE ACT AND NYSE FILINGS; STATE TAKEOVER LAWS. Unless
an exemption shall be expressly applicable to WPZ or unless Parent and Merger
Subsidiary agree otherwise in writing, WPZ shall file with the SEC and the New
York Stock Exchange ("NYSE") all reports required to be filed by it pursuant to
the rules and regulations of the SEC and NYSE (including without limitation all
required financial statements). Such reports and other information shall comply
in all material respects with the rules and regulations of the NYSE and the
Exchange Act, and when filed, to the Knowledge of WPZ, will not include any
untrue statement of a material fact
12
or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading. WPZ shall take all reasonably necessary steps
to exempt the transactions contemplated by this Agreement, including the
Merger, from the requirements of applicable state takeover Laws and to assist
Merger Subsidiary and Parent in any challenge to the validity or
applicability to the transactions contemplated hereby of any state takeover
Law.
ARTICLE IV
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF
THE CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
Section 4.1. EFFECT ON CAPITAL STOCK. At the Effective Time, by virtue
of the Merger and without any action on the part of the holder of any shares of
WPZ Common Stock or the holder of any capital stock of Merger Subsidiary:
(a) CAPITAL STOCK OF MERGER SUBSIDIARY. Each share of the
capital stock of Merger Subsidiary issued and outstanding immediately prior to
the Effective Time shall be converted into and become one fully paid and
nonassessable share of common stock, par value $.0001 per share, of the
Surviving Corporation.
(b) CANCELLATION OF TREASURY STOCK AND WPZ-OWNED STOCK. Each
share of WPZ Common Stock and all other shares of capital stock that are owned
by WPZ and all shares of WPZ Common Stock and other shares of capital stock of
WPZ owned by Parent, Merger Subsidiary or any other wholly-owned Subsidiary of
Parent or WPZ shall be canceled and retired and shall cease to exist and no
consideration shall be delivered or deliverable in exchange therefor.
Section 4.2. CONVERSION OF SECURITIES. At the Effective Time,
by virtue of the Merger and without any action on the part of Merger
Subsidiary, Parent or the holders of any of the shares thereof:
(a) Subject to the other provisions of this SECTION 4.2, each
share of WPZ Common Stock issued and outstanding immediately prior to the
Effective Time (excluding shares owned, directly or indirectly, by WPZ or any
wholly-owned Subsidiary of WPZ or by Parent, Merger Subsidiary or any other
wholly-owned Subsidiary of Parent and excluding Dissenting Shares) shall be
converted into the right to receive the Merger Consideration, payable to the
holder thereof, without any interest thereon, upon surrender and exchange of the
Certificates (as defined in SECTION 4.3(b)); provided that, if between the date
of this Agreement and the Effective Time the shares of WPZ Common Stock have
been changed into a different number of shares or a different class, by reason
of any stock dividend, subdivision, reclassification, recapitalization, split,
combination or exchange of shares, the Merger Consideration shall be
correspondingly adjusted to reflect such change.
13
(b) All shares of WPZ Common Stock, when converted as
provided in SECTION 4.2(A), no longer shall be outstanding and shall
automatically be canceled and retired and shall cease to exist, and each
Certificate previously evidencing such Shares shall thereafter represent only
the right to receive the Merger Consideration. The holders of Certificates
previously evidencing Shares outstanding immediately prior to the Effective
Time shall cease to have any rights with-respect to WPZ Common Stock except
as otherwise provided herein or by Law and, upon the surrender of
Certificates in accordance with the provisions of SECTION 4.3 (but subject to
SECTION 4.6), such Certificates shall represent only the right to receive for
each of their Shares the Merger Consideration, without any interest thereon.
Section 4.3. PAYMENT FOR SHARES.
(a) PAYING AGENT. At the Effective Time, Parent shall deposit
or shall cause to be deposited with the Paying Agent in a separate fund
established for the benefit of the holders of shares of WPZ Common Stock, for
payment in accordance with this ARTICLE IV, through the Paying Agent (the
"Payment Fund"), immediately available funds in amounts necessary to make the
payments pursuant to SECTION 4.2(a) and this SECTION 4.3 to holders of shares of
WPZ Common Stock (other than Parent or any wholly-owned Subsidiary of Parent or
Merger Subsidiary or holders of Dissenting Shares). The Paying Agent shall,
pursuant to irrevocable instructions, pay the Merger Consideration out of the
Payment Fund in accordance with SECTION 4.2(a) and this SECTION 4.3. From time
to time at or after the Effective Time, Parent shall take all lawful action
necessary to make or cause to be made the appropriate cash payments, to holders
of Dissenting Shares. Prior to the Effective Time, Parent shall enter into such
appropriate commercial arrangements with the Paying Agent, if any, as may be
necessary to ensure effectuation of the immediately preceding sentence. The
Paying Agent shall invest portions of the Payment Fund as Parent directs in
obligations of or guaranteed by the United States of America, in commercial
paper obligations receiving the highest investment grade rating from both
Xxxxx'x Investors Services, Inc. and Standard & Poor's Corporation, or in
certificates of deposit, bank repurchase agreements or banker's acceptances of
commercial banks with capital exceeding $100,000,000 (collectively, "Permitted
Investments"); PROVIDED, HOWEVER, that the maturities of Permitted Investments
shall be such as to permit the Paying Agent to make prompt payment to former
holders of WPZ Common Stock entitled thereto as contemplated by this Section.
All earnings on Permitted Investments shall be paid to Parent. If for any reason
(including losses) the Payment Fund is inadequate to pay the amounts to which
holders of shares of WPZ Common Stock shall be entitled under this SECTION 4.3,
Parent shall promptly restore such amount of the inadequacy to the Payment Fund,
and in any event shall be liable for payment thereof. The Payment Fund shall not
be used for any purpose except as expressly provided in this Agreement.
(b) PAYMENT PROCEDURES. As soon as reasonably practicable
after the Effective Time, Parent shall instruct the Paying Agent to mail to each
holder of record (other than Parent or any wholly-owned Subsidiary of Parent or
Merger Subsidiary) of a Certificate or Certificates which, immediately prior to
the Effective Time, evidenced outstanding shares of WPZ Common Stock (the
"Certificates"), (i) a customary form of letter of transmittal (which shall
specify that delivery shall
14
be effected, and risk of loss and title to the Certificates shall pass, only
proper delivery of the Certificates to the Paying Agent, and shall be in such
form and have such other provisions as Parent reasonably may specify) and
(ii) instructions for use in effecting the surrender of the Certificates in
exchange for payment therefor. Upon surrender of a Certificate for
cancellation to the Paying Agent together with such letter of transmittal,
duly executed, and such other customary documents as may be required pursuant
to such instructions, the holder of such Certificate shall be entitled to
receive in respect thereof cash in an amount equal to the product of (x) the
number of shares of WPZ Common Stock represented by such Certificate, and (y)
the Merger Consideration, and the Certificate so surrendered shall forthwith
be canceled. No interest shall be paid or accrued on the Merger Consideration
payable upon the surrender of any Certificate. If payment is to be made to a
Person other than the Person in whose name the surrendered Certificate is
registered, it shall be a condition of payment that the Certificate so
surrendered shall be properly endorsed or otherwise in proper form for
transfer and that the Person requesting such payment shall pay any transfer
or other Taxes required by reason of the payment to a Person other than the
registered holder of the surrendered Certificate or establish to the
satisfaction of the Surviving Corporation that such Tax has been paid or is
not applicable. The consideration to be issued upon the surrender of
Certificates in accordance with this SECTION 4.3 shall be deemed to have been
issued in full satisfaction of all rights pertaining to such shares of WPZ
Common Stock formerly represented thereby. Until surrendered in accordance
with the provision of this SECTION 4.3, after the Effective Time each
Certificate (other than Certificates representing Shares owned by Parent or
any wholly-owned Subsidiary of Parent or Merger Subsidiary) shall represent
for all purposes only the right to receive the Merger Consideration based on
the number of Shares represented by such Certificate.
(c) TERMINATION OF PAYMENT FUND; INTEREST. Any portion of the
Payment Fund which remains undistributed to the holders of WPZ Common Stock for
one year after the Effective Time shall be delivered to Parent, upon demand, and
any holders of WPZ Common Stock who have not therefore complied with this
ARTICLE IV and the instructions set forth in the letter of transmittal mailed to
such holder after the Effective Time shall thereafter look only to Parent for
payment of the Merger Consideration to which they are entitled. All interest
accrued in respect of the Payment Fund shall inure to the benefit of and be paid
to Parent.
(d) NO LIABILITY. Neither Parent nor the Surviving Corporation
shall be liable to any holder of shares of WPZ Common Stock for any cash from
the Payment Fund delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law.
(e) WITHHOLDING RIGHTS. Parent shall be entitled to deduct and
withhold, or cause the Paying Agent to deduct and withhold, from the
consideration otherwise payable pursuant to this Agreement to any holder of
Certificates such amounts as are required to be deducted and withheld with
respect to the making of such payment under the Code, or any provision of state,
local or foreign tax law. To the extent that amounts are so withheld, (i) such
withheld amounts shall be treated for all purposes of this Agreement as having
been paid to the holder of the Certificates in respect of which such deduction
and withholding was made, and (ii) Parent shall provide, or cause
15
the Paying Agent to provide, to the holders of such Certificates written
notice of the amounts so deducted or withheld.
(f) LOST, STOLEN OR DESTROYED CERTIFICATES. In the event any
Certificate shall have been lost, stolen or destroyed, upon the making of an
affidavit (in form and substance acceptable to Merger Subsidiary) of that fact
by the Person (who shall be the record owner of such Certificate) claiming such
Certificate to be lost, stolen or destroyed and, if required by the Surviving
Corporation, the posting by such Person of a bond in such reasonable amount as
the Surviving Corporation may direct as indemnity against any claim that may be
made against it with respect to such Certificate, the Paying Agent will issue,
in exchange for such lost, stolen or destroyed Certificate, the Merger
Consideration deliverable in respect thereof pursuant to this Agreement.
Section 4.4. STOCK TRANSFER BOOKS. At and after the Effective Time, the
stock transfer books of WPZ shall be closed and there shall be no further
registration of transfers of shares of WPZ Common Stock thereafter on the
records of WPZ, and each holder of a Certificate representing shares of WPZ
Common Stock shall cease to have any rights as a stockholder of WPZ except for
the right to surrender his or her Certificate for payment of the Merger
Consideration as provided in this ARTICLE IV.
Section 4.5. STOCK OPTIONS AND WARRANTS. WPZ shall cause each (i)
outstanding option, warrant, stock appreciation right, phantom stock award or
performance award or similar right to acquire shares (collectively, the
"Employee Options") under WPZ's 1997 Stock Awards Plan (the "1997 Plan") and
1997 NonQualified Stock Option Plan For Non-Employee Directors (the "Directors
Plan") and the option agreements between WPZ and certain of its officers,
directors, employees and consultants thereunder (collectively, the "Stock Option
Plans"), and (ii) any other option (including, without limitation, the options
referred to on EXHIBIT 6.2), warrant (including without limitation, the warrants
listed on EXHIBIT 6.2) or other right to acquire (upon purchase, exchange,
conversion or otherwise) shares of WPZ Common Stock (collectively, the "Other
Options" and, together with the Employee Options, the "Options") to be (a)
exercised prior to the Effective Time, or (b) surrendered by the holder or
canceled by action of the Board of Directors of WPZ, as of the Effective Time,
at which time WPZ will pay to each holder of such canceled Option (whether or
not such Option is then vested or exercisable), in settlement or cancellation
thereof, an amount (subject to applicable withholding tax) in cash determined by
multiplying (i) the excess, if any, of the Merger Consideration over the per
Share exercise price of such Option, by (ii) the number of Shares such holder
could have purchased if such holder had exercised such Option in full
immediately prior to such time (without giving effect to any antidilutive
changes in the number of such Shares arising from the Merger and assuming any
unvested Options have vested); it being understood that, although all Options
that are Out of the Money Options will be deemed canceled and forfeited pursuant
to this SECTION 4.5, the holder(s) thereof will not be entitled to receive any
consideration therefor. Prior to the Effective Time, (i) WPZ shall obtain the
consent, in form and substance satisfactory to Merger Subsidiary, of the holders
of the Options issued pursuant to the Directors Plan to the cancellation of such
Options as provided in this SECTION 4.5 and (ii) the Committee shall take the
actions and make the determinations necessary to cause each outstanding
16
Option to terminate and be cancelled, in each case so as to give effect to
the transactions described in this SECTION 4.5. The Other Options that are
Out of the Money Options shall be, in accordance with the Board's resolution
described in SECTION 3.6, SECTION 6.2 and in the preamble hereto, at and as
of the Effective Time, inoperative, canceled and terminated such that they
will no longer be outstanding and shall be of no further force and effect as
a result of the Merger.
Section 4.6. DISSENTING SHARES. Notwithstanding any other provisions of
this Agreement to the contrary, shares of WPZ Common Stock that are outstanding
immediately prior to the Effective Time and which are held by stockholders who
shall have not voted in favor of the Merger or consented thereto in writing and
who shall have demanded properly in writing appraisal for such shares in
accordance with SECTION 262 of the GCL (collectively, the "Dissenting Shares")
shall not be converted into or represent the right to receive the Merger
Consideration, unless or until such holder fails to perfect or withdraws or
otherwise loses his right to appraisal and payment under SECTION 262 of the GCL.
Such shares instead shall, from and after the Effective Time, represent only the
right to receive payment of the appraised value of such shares of WPZ Common
Stock held by them in accordance with the provisions of such SECTION 262, except
that all Dissenting Shares held by stockholders who shall have failed to perfect
or who effectively shall have withdrawn or lost their rights to appraisal of
such shares of WPZ Common Stock under such SECTION 262 shall thereupon be deemed
to have been converted into and to have become exchangeable, as of the Effective
Time, for the right to receive, without any interest thereon, with respect to
each such share, the Merger Consideration upon surrender, in the manner provided
in SECTION 4.3, of the Certificate or Certificates that, immediately prior to
the Effective Time, evidenced such shares of WPZ Common Stock.
Section 4.7. CONVERTIBLE DEBENTURES. WPZ shall cause the $20,000,000
principal amount of 5% Convertible Debentures (the "Convertible Debentures") to
be redeemed upon, and as a condition to Parent's and Merger Subsidiary's
obligation to consummate, the Merger, at 109% of the principal amount thereof,
plus accrued but unpaid interest, which redemption will be funded with the
proceeds of the Parent's financing.
Section 4.8. CLASS A SPECIAL SHARES. WPZ shall cause ACG Exchange
Company to redeem the Class A Special Shares in exchange for the Exchangeable
Share Consideration upon, and as a condition to Parent's and Merger Subsidiary's
obligation to consummate, the Merger.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF
PARENT AND MERGER SUBSIDIARY
Parent and Merger Subsidiary represent and warrant to WPZ as follows:
17
Section 5.1. ORGANIZATION AND AUTHORITY. Each of Parent and Merger
Subsidiary is duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization. Merger Subsidiary was formed solely
for the purpose of engaging in the transactions contemplated hereby and has
not engaged in any business activities or conducted any operations other than
in connection with the transactions contemplated hereby.
Section 5.2. AUTHORITY RELATIVE TO THIS AGREEMENT. The execution,
delivery and performance of this Agreement and of all of the other documents
and instruments required hereby by Parent and Merger Subsidiary are within
the corporate power of Parent and Merger Subsidiary. The execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by the respective Boards of
Directors of Parent and Merger Subsidiary, and by Parent as the sole
shareholder of Merger Subsidiary, and no other corporate or shareholder
proceedings on the part of Parent or Merger Subsidiary are necessary to
authorize this Agreement or to consummate the transactions contemplated
herein. This Agreement and all of the other documents and instruments
required hereby have been or will be duly and validly executed and delivered
by Parent or Merger Subsidiary and (assuming the due authorization, execution
and delivery hereof and thereof by Parent) constitute or will constitute
valid and binding agreements of Parent and Merger Subsidiary, enforceable
against them in accordance with their respective terms, expect as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and similar laws relating to or affecting creditors generally, by
general equitable principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law) or by an implied covenant of
good faith and fair dealing.
Section 5.3. CONSENTS AND APPROVALS. No Violations. Except for (i)
any applicable requirements of the Securities Act, the Exchange Act, the HSR
Act and any applicable filings under state securities, "Blue Sky" or takeover
laws, and (ii) the filing of the Certificate of Merger as required by the
GCL, no filing or registration with, and no Permit, authorization, consent or
approval of, any public body or Governmental Authority or other party that is
necessary or required in connection with the execution and delivery of this
Agreement by Parent or Merger Subsidiary, or for the consummation by Parent
or Merger Subsidiary of the transactions contemplated by this Agreement shall
not have been obtained as of the Closing. Assuming that all filings,
registrations, Permits, authorizations, consents and approvals contemplated
by the immediately preceding sentence have been duly made or obtained,
neither the execution, delivery and performance of this Agreement or the
other agreements contemplated hereby nor the consummation of the transactions
contemplated hereby or thereby by Parent and Merger Subsidiary will (i)
conflict with or result in any breach of any provision of the Articles or
Certificate of Incorporation or ByLaws of Parent or Merger Subsidiary, (ii)
result in a violation or breach of, or constitute (with or without due notice
or lapse of time or both) a default under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, license, Contract or other
instrument or obligation to which Parent or any of its Subsidiaries is a
party or by which it or any of them or any of their properties or assets may
be bound or (iii) violate any order, writ, injunction, decree, statute, rule
or regulation applicable to Parent or any of its Subsidiaries or any of their
properties or assets except, in the case of subsections
18
(ii) and (iii) above, for violations, breaches or defaults that would not
have a Material Adverse Effect on Parent and that will not prevent the
consummation of the transactions contemplated hereby.
Section 5.4. INFORMATION SUPPLIED. None of the information relating
to Parent and its affiliates supplied in writing by Parent specifically for
inclusion in the Proxy Statement or in any other document to be filed in
connection with the transactions contemplated by this Agreement will, at the
respective time filed with the SEC or any Governmental Authority and in
addition, in the case of the Proxy Statement at the date it or any amendment
or supplement thereto is mailed, and at the time of the Special Meeting,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. If at any time prior to the Effective Time, Parent should
become aware of any event relating to Parent or any of its Subsidiaries that
is required under applicable Law to be disclosed in an amendment or
supplement to the Proxy Statement, Parent shall promptly so inform WPZ and
will furnish to WPZ all information relating to such event that is required
under applicable Law to be disclosed in an amendment or supplement to the
Proxy Statement; PROVIDED, HOWEVER, that no agreement or representation
hereby is made or shall be made by Parent or Merger Subsidiary with respect
to information supplied by WPZ in writing expressly for inclusion in the
Proxy Statement, or with respect to information derived from the WPZ SEC
Reports which is included or incorporated by reference in the Proxy Statement.
Section 5.5. FINANCIAL CAPABILITY. Parent and Merger Subsidiary have
received and furnished to WPZ (i) a commitment letter to provide senior debt
financing to Parent and Merger Subsidiary, from Canadian Imperial Bank of
Commerce and First Union National Bank, (ii) a commitment letter with respect
to the equity investment by Xxxxxx X. Xxx Company or one of its Affiliates,
and (iii) a commitment letter with respect to the equity investment of
Continental Illinois Venture Corporation or one of its Affiliates
(collectively, including any attachments thereto, referred to as the
"COMMITMENT LETTERS"). Assuming satisfaction of the terms and conditions set
forth therein, the commitments set forth in the Commitment Letters, together
with the funds available to Parent and Merger Subsidiary, are sufficient to
consummate the Merger.
Section 5.6. FEES AND EXPENSES OF BROKERS AND OTHERS. Neither Parent
nor any of its Affiliates (a) has had any dealings, negotiations or
communications with any broker or other intermediary in connection with the
transactions contemplated by this Agreement, (b) is committed to any
liability for any brokers or finders' fees or any similar fees in connection
with the transactions contemplated by this Agreement or (c) has retained any
broker or other intermediary to act on its behalf in connection with the
transactions contemplated by this Agreement.
19
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF WPZ
WPZ represents and warrants to Parent and Merger Subsidiary as
follows:
Section 6.1. ORGANIZATION AND AUTHORITY OF THE WPZ COMPANIES. Each
of the WPZ Companies is duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization. Each of the WPZ Companies
has full corporate power to carry on its respective business as it is now
being conducted and to own, operate and hold under lease its assets and
properties as, and in the places where, such properties and assets now are
owned, operated or held. Each of the WPZ Companies is duly qualified as a
foreign entity to do business, and is in good standing, in each jurisdiction
where the failure to be so qualified would have a Material Adverse Effect on
the WPZ Companies. EXHIBIT 6.1A constitutes a true and complete list of all
of the Subsidiaries of WPZ. The copies of the Certificate of Incorporation
and By-laws of WPZ which have been delivered to Parent are complete and
correct and in full force and effect on the date hereof.
Section 6.2. CAPITALIZATION.
(a) WPZ's authorized equity capitalization consists of One
Hundred Eighty Million (180,000,000) shares of WPZ Common Stock, par value
$.0001 per share, and Twenty Million (20,000,000) shares of WPZ Preferred
Stock, par value $.0001 per share. As of the close of business on the date
hereof and, other than changes to reflect exercise of Options, the exchange
of Class A Special Shares of ACG Exchange Company outstanding as of the date
hereof or conversion of the Convertible Debentures, immediately prior to the
Effective Time, Forty-Four Million Four Hundred and Two Thousand Nine Hundred
Forty-Three (44,402,943) shares of WPZ Common Stock; Two Million Six Hundred
Twenty-Six Thousand Six Hundred and One (2,626,601) shares of WPZ Common
Stock issuable upon the exchange of the Two Million Six Hundred Twenty- Six
Thousand Six Hundred and One (2,626,601) Class A Special Shares of ACG
Exchange Company (which constitute all of the issued and outstanding Class A
Special Shares) and Three Million Eight Hundred Seventy-One Thousand Nine
Hundred Eleven (3,871,911) shares of WPZ Common Stock issuable upon exercise
of issued and outstanding Options (which constitute all of the issued and
outstanding Options), and one (1) share of WPZ Series B Preferred Stock(1)
were issued and outstanding. Such shares of WPZ Common Stock and WPZ Series B
Preferred Stock constituted all of the issued and outstanding shares of
capital stock of WPZ as of such date. All issued and outstanding shares of
capital stock of WPZ have been and all Shares that may be issued pursuant to
--------
(1) The one (1) outstanding share of Series B Preferred Stock was issued by WPZ
to the Montreal Trust Company of Canada, as trustee to the holders of the
Special Class A Shares, in connection with WPZ's acquisition of the YPtel
Corporation, pursuant to the terms of the Amended and Restated YPtel
Agreement dated as of October 26, 1999, as set forth more fully in the
Exchange and Voting Trust Agreement dated as of February 2, 2000. WPZ issued
the share of Series B Preferred Stock in order to provide holders of ACG
Exchange Company Class A Special Shares the right to vote their indirect
holdings in WPZ. Once all of the Class A Special Shares of the ACG Exchange
Company have been exchanged for WPZ Common Stock, the single outstanding
share of WPZ Series B Preferred Stock shall be automatically redeemed by WPZ
for $1.00.
20
the exercise of outstanding Options will be duly authorized and validly
issued and are fully paid and nonassessable, are not subject to and have not
been (or will not be) issued in violation of any preemptive rights or in
violation of any federal or state securities laws and are free of any rights
of first refusal, first offer or similar rights or restrictions on transfer.
WPZ has not, subsequent to December 31, 2000, issued any WPZ Preferred Stock
or declared or paid any dividend on, or declared or made any distribution
with respect to, or authorized or effected any split-up or any other
recapitalization of, any of the WPZ Common Stock or WPZ Preferred Stock, or
directly or indirectly redeemed, purchased or otherwise acquired any of its
outstanding capital stock or agreed to take any such action and will not take
any such action during the period between the date of this Agreement and the
Effective Time. As of the date hereof, all outstanding shares of WPZ Common
Stock are duly included for trading on the NYSE.
(b) All of the outstanding equity securities of WPZ's
Subsidiaries are validly issued, fully paid and nonassessable. All of the
outstanding equity securities of WPZ's Subsidiaries are owned by WPZ,
directly or indirectly, free and clear of all liens, claims, charges or
encumbrances, other than immaterial liens, claims or encumbrances arising
after the date of this Agreement which do not individually or in the
aggregate diminish the value of such equity securities. Except as set forth
on EXHIBIT 6.2 attached hereto, there are no outstanding securities, options,
warrants, calls, subscriptions, rights, stock appreciation rights, phantom
stock or performance awards, contracts or commitments of any character to
which WPZ is a party or by which any WPZ Company is bound, granting to any
third party the right to purchase or acquire any capital stock of, any
partnership or membership interests in, or any bonds, debentures, notes or
other indebtedness having general voting rights ("Voting Debt") with respect
to, any of the WPZ Companies (or securities convertible into or exchangeable
for such equity interests or rights) or obligating any WPZ Company to issue,
transfer or sell or cause to be issued, transferred or sold such equity
interests or rights, and there are no put rights, contracts or commitments of
any character pursuant to which any of the WPZ Companies is bound to
repurchase any shares of capital stock or partnership or membership interests
or Voting Debt.
(c) The Board has taken action in the exercise of its
discretion such that (i) as of the Effective Time and following consummation
of the Merger, the holder of each Other Option that is an Out of the Money
Option will be entitled to receive only the Merger Consideration allocated to
the shares into which such Out of the Money Option is exercisable upon
payment of the exercise price thereunder and to no other consideration, and
(ii) each Other Option that is an Out of the Money Option therefore has no
value and may and shall be canceled automatically as of the Effective Time
and be deemed canceled, no longer outstanding and terminated without
consideration.
Section 6.3. AUTHORITY RELATIVE TO THIS AGREEMENT. The execution,
delivery and performance of this Agreement and of all of the other documents
and instruments required hereby are within the corporate power and authority
of WPZ. The execution and delivery of this Agreement and the other agreements
contemplated hereby and the consummation of the transactions contemplated
hereby and thereby have been duly authorized by the Board of Directors of WPZ
and
21
no other corporate or shareholder proceedings on the part of WPZ or any of
its Subsidiaries are necessary to authorize this Agreement or to consummate
the transactions contemplated herein or therein (other than, with respect to
the Merger, the approval of the Merger and of this Agreement by a majority of
the outstanding shares of WPZ Common Stock at the Special Meeting, unless the
Merger is effected without a meeting of stockholders pursuant to SECTION 228
of the GCL). This Agreement and all of the other documents and instruments
required hereby have been or will be duly and validly executed and delivered
by WPZ and (assuming the due authorization, execution and delivery hereof and
thereof by WPZ) constitute or will constitute valid and binding agreements of
WPZ, enforceable against WPZ in accordance with their respective terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws relating to or affecting
creditors generally, by general equitable principles (regardless of whether
such enforceability is considered in a proceeding in equity or at law) or by
an implied covenant of good faith and fair dealing.
Section 6.4. CONSENTS AND APPROVALS; NO VIOLATIONS. Except for (i)
any applicable requirements of the Securities Act, the Exchange Act, the HSR
Act, and any applicable filings under state securities, "Blue Sky" or
takeover laws, (ii) the filing of the Certificate of Merger as required by
the GCL and (iii) those required filings, registrations, consents, and
approvals listed on EXHIBIT 6.4 attached hereto, no filing or registration
with, and no Permit, authorization, consent or approval of, any public body
or Governmental Authority or other third party is necessary or required in
connection with the execution and delivery of this Agreement by WPZ or for
the consummation by WPZ of the transactions contemplated by this Agreement.
Assuming that all filings, registrations, Permits, authorizations, consents
and approvals contemplated by the immediately preceding sentence have been
duly made or obtained, neither the execution, delivery and performance of
this Agreement or the other agreements contemplating hereby nor the
consummation of the transactions contemplated hereby or thereby by WPZ or any
of its Subsidiaries will (i) conflict with or result in any breach of any
provision of the Certificates of Incorporation, Bylaws or other
organizational documents of any of the WPZ Companies, (ii) result in a
material violation or breach of, or constitute (with or without due notice or
lapse of time or both) a material default (or give rise to any right of
termination, cancellation or acceleration) under, or otherwise result in any
material diminution of any of the rights of the WPZ Companies with respect
to, or result in the loss of any material benefit to or the creation of a
lien, claim or other encumbrance on any of the properties or assets of any
WPZ Company, pursuant to any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, license, contract or other instrument or
obligation to which any of the WPZ Companies is a party or by which it or any
of them or any of their properties or assets may be bound or (iii) violate
any order, writ, injunction, decree, statute, rule or regulation applicable
to any of the WPZ Companies or any of their properties or assets.
Section 6.5. REPORTS. The WPZ SEC Reports complied, as of
their respective dates of filing, in all material respects with all
applicable requirements of the Securities Act, the Exchange Act and the rules
and regulations of the SEC. As of their respective dates, none of such forms,
reports or documents, including without limitation any financial statements
or schedules included therein, contained any untrue statement of a material
fact or
22
omitted to state a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein not
misleading in light of the circumstances under which they were made. Each of
the balance sheets (including the related notes and schedules) included in
the WPZ SEC Reports fairly presented in all material respects the
consolidated financial position of the WPZ Companies as of the respective
dates thereof, and the other related financial statements (including the
related notes and schedules) included therein fairly presented in all
material respects the consolidated results of operations and cash flows of
the WPZ Companies for the respective fiscal periods or as of the respective
dates set forth therein. The WPZ Fiscal Financial Statements present fairly
in all material respects the consolidated financial position of WPZ and its
Subsidiaries and their consolidated results of operations and changes in
financial position and cash flows for the respective periods therein
presented. Each of the financial statements (including the related notes and
schedules) included in the WPZ SEC Reports and the WPZ Fiscal Financial
Statements (i) complied as to form with the applicable accounting
requirements and rules and regulations of the SEC, and (ii) was prepared in
accordance with GAAP consistently applied during the periods presented,
except as otherwise noted therein and subject to normal year-end and audit
adjustments in the case of any unaudited interim financial statements. Except
for WPZ, none of the WPZ Companies is required to file any forms, reports or
other documents with the SEC, the NYSE or any other foreign or domestic
securities exchange or Governmental Authority with jurisdiction over
securities laws. Since February 18, 1998, WPZ has timely filed all reports,
registration statements, definitive proxy statements and other filings
required to be filed by it with the SEC.
Section 6.6. ABSENCE OF CERTAIN EVENTS.
(a) Except as specifically disclosed in EXHIBIT 6.6
attached hereto, since December 31, 2000, none of the WPZ Companies has
suffered any change that has had or will have a Material Adverse Effect on
the WPZ Companies, taken as a whole, and there has been no event,
circumstance or factor which could reasonably be expected to have a Material
Adverse Effect on the WPZ Companies, taken as a whole.
(b) Except as specifically set forth in EXHIBIT 6.6 hereto,
there has not been since December 31, 2000: (i) any entry into any binding
agreement or understanding or any amendment of any binding agreement or
understanding between any of the WPZ Companies on the one hand, and any of
their respective directors, officers or employees on the other hand,
providing for employment or retention of any such director, officer or
employee or any increase (or promise to make such an increase) in the
compensation, severance or termination benefits payable or to become payable
by any of the WPZ Companies (except for normal salary increases to employees
other than officers and directors in the ordinary course of business that are
consistent with past practices and that, in the aggregate, do not result in a
material increase in compensation expense), or any adoption of or increase
(or promise to make such an increase) in any bonus, insurance, pension or
other benefit plan, payment or arrangement (including, without limitation,
the granting of stock options or stock appreciation rights or the award of
restricted stock) made to, for or with any such director, officer or employee
of any WPZ Company; (ii) any labor disputes (other than disputes with
individual employees); (iii) any entry by any of the WPZ Companies into any
material commitment,
23
agreement, license or transaction, (including, without limitation, any
borrowing, capital expenditure, sale or purchase of assets or any mortgage,
pledge, lien or encumbrances made on any of the properties or assets of any
of the WPZ Companies); (iv) any change in the accounting policies or
practices of any of the WPZ Companies or revaluation of any assets of WPZ and
its Subsidiaries in any material respect, including without limitation,
writing down the value of inventory or writing off notes or accounts
receivables except for amounts previously reserved to the extent reflected in
the Latest Balance Sheet; (v) any damage, destruction or loss, whether
covered by insurance or not, which has had or could reasonably be expected to
have a Material Adverse Effect on the WPZ Companies; or (vi) any agreement to
do any of the foregoing;
(c) Except as set forth in EXHIBIT 6.6 attached hereto,
none of the WPZ Companies has since December 31, 2000: (i) entered into any
new line of business, or incurred or committed to incur any capital
expenditures, obligations or liabilities in connection therewith; (ii)
declared, set aside or paid any dividend or other distribution with respect
to, or any direct or indirect redemption, purchase or other acquisition, of
any WPZ Common Stock or WPZ Preferred Stock; (iii) made any cancellation or
waiver of (A) any right material to the operation of the business of WPZ or
its Subsidiaries or (B) any material debts or claims against any Affiliate of
WPZ; (iv) agreed to (A) do any of the things described in the preceding
clauses (i), (ii) and (iii) or (B) take, whether in writing or otherwise, any
action which, if taken after the date of this Agreement, cause a breach of
SECTION 7.1.
Section 6.7. LITIGATION. Except as set forth in EXHIBIT 6.7 attached
hereto, there is no action, suit, proceeding or, to the Knowledge of WPZ,
investigation pending or, to the Knowledge of WPZ, threatened against any of
the WPZ Companies at law or in equity, or before any federal, state,
principal, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, whether in the United States or otherwise
(including, without limitation, any unfair labor practice, employment
discrimination or employment wage and benefit claims) which, in the case of
any of the foregoing, would be reasonably likely to result in liabilities in
excess of $25,000 or which is otherwise material to the WPZ Companies.
Neither WPZ nor any of its Subsidiaries is subject to any judgment, order or
decree entered in any lawsuit or proceeding which could reasonably be
expected to have a Material Adverse Effect with respect to the WPZ Companies,
taken as a whole.
Section 6.8. TITLE TO AND SUFFICIENCY OF ASSETS. As of the date
hereof, the WPZ Companies own, and as of the Effective Time the WPZ Companies
will own, good and marketable title to all of their assets (excluding, for
purposes of this sentence, assets held under leases), free and clear of any
and all mortgages, liens, encumbrances, charges, claims, restrictions,
pledges, security interests or impositions, except as disclosed on EXHIBIT
6.8 attached hereto and except for immaterial liens which do not individually
or in the aggregate affect the use of or diminish the value of the assets.
Except as disclosed on EXHIBIT 6.8, such assets (including Intellectual
Property), together with all assets held or used by the WPZ Companies under
leases, include all tangible and intangible assets, contracts and rights
necessary or required for the operation of the businesses of the WPZ
Companies in accordance with past practice. All machinery, equipment and
other tangible assets currently being
24
used by WPZ or its Subsidiaries which are owned or leased by WPZ or its
Subsidiaries are, reasonably adequate and suitable for the uses to which they
are currently being put.
Section 6.9. CONTRACTS. Prior to the date hereof, WPZ has made
available to Parent true and correct copies of, and EXHIBIT 6.9 sets forth a
complete and accurate list of, all of the following contracts or commitments
of any kind to which any WPZ Company is a party or is bound: (i) any lease of
any interest in any real property (collectively, the "Leases"); (ii) any
lease of any personal property with aggregate annual rental payments in
excess of $100,000; (iii) any agreement to purchase or sell a capital asset
or an interest in any business entity for a price in excess of $100,000 or a
right of first refusal with respect thereto; (iv) any agreement relating to
the borrowing or lending of money other than advances to employees to cover
business expenses in the ordinary course of business; (v) any joint venture
contract, partnership contract or similar contract evidencing an ownership
interest or a participation in or sharing of profits, (vi) any guaranty,
contribution agreement or other agreement that includes any material
indemnification or contribution obligation; (vii) any agreement (including
any noncompetition agreement) limiting the ability of any WPZ Company to
engage in any line of business or in business with any Person or restricting
the geographical area in which any WPZ Company may engage in any business;
(viii) any employment, consulting, management, severance or indemnification
contract or agreement with annual obligations in excess of $100,000; (xiv)
material contracts which are terminable or contracts with annual obligations
in excess of $10,000 under which payments by any WPZ Company may be
accelerated upon a change in control of WPZ and (xv) any other agreement
which may involve the payment of an amount over its term in excess of
$250,000 or which is material to any WPZ Company. None of the WPZ Companies
is party to any contract or commitment of any character which could
reasonably be expected to give rise to a Material Adverse Effect. The WPZ
Companies have performed in all material respects and, to the Knowledge of
WPZ, every other party has performed in all material respects, each term,
covenant and condition of each of the Contracts that is to be performed by
any of them at or before the date hereof. Except as set forth herein, no
event has occurred that would, with the passage of time or compliance with
any applicable notice requirements or both, constitute a material default by
any WPZ Company or, to the Knowledge of WPZ, by any other party under any of
the Contracts and, to the Knowledge of WPZ, no party to any of the Contracts
intends to cancel, terminate or exercise any option under any of such
Contracts.
Section 6.10. COLLECTIVE BARGAINING AGREEMENT. Except as described
in EXHIBIT 6.10 attached hereto, no WPZ Company has any collective bargaining
relationship or duty to bargain with any Labor Organization (as such term is
defined in Section 2(5) of the National Labor Relations Act, as amended), and
no WPZ Company has recognized any Labor Organization as the collective
bargaining representative of any of its employees. EXHIBIT 6.10 sets forth a
complete and accurate list of all collective bargaining agreements or
contracts with any labor unions to which any WPZ Company is a party or is
bound. WPZ has made available to Parent true and correct copies of each of
the items listed on EXHIBIT 6.10 and there have been no amendments or
supplements issued with respect thereto.
25
Section 6.11. EMPLOYEE BENEFIT PLANS.
(a) For purposes of this Section, the term "WPZ Benefit
Plans" shall mean all pension, retirement, profit-sharing, deferred
compensation, stock option, employee stock ownership, severance pay,
vacation, bonus or other incentive plans, and all other employee programs,
arrangement or agreements, whether arrived at through collective bargaining
or otherwise, all medical, vision, dental and other health plans, all life
insurance plans, and all other employee benefit plans or fringe benefit
plans, including, without limitation, any "employee benefit plan," as that
term is defined in Section 3(3) of ERISA, currently adopted, maintained by,
sponsored in whole or in part by, or contributed to by any of the WPZ
Companies or Affiliates thereof for the benefit of employees, retirees,
dependents, spouses, directors or other beneficiaries and under which
employees, retirees, dependents, spouses, directors or other beneficiaries
are eligible to participate or with respect to which any WPZ Company, any
Affiliate or any other entity, that together with WPZ Company or any
Affiliate is treated as a single employer under Section 414 of the Code, has
any liability. None of the WPZ Benefit Plans is an "employee pension benefit
plan," as that term is defined in Section 3(2) of ERISA (a "WPZ ERISA Plan").
(b) Except as set forth in EXHIBIT 6.11 hereto, no WPZ
Benefit Plan is or has been a multiemployer plan within the meaning of
Section 3(37) of ERISA. All WPZ Benefit Plans are in compliance in all
material respects with the applicable provisions (including, without
limitation, any funding requirements or limitations) of ERISA, the Code and
any other applicable Laws. No WPZ Benefit Plan provides for post-retirement
medical benefit obligations (without regard to COBRA obligations). Except as
set forth on EXHIBIT 6.11 hereto, no WPZ ERISA Plan which is a defined
benefit pension plan has any "unfunded current liability," as that term is
defined in Section 302(d)(8)(A) of ERISA, and the present fair market value
of the assets of any such plan exceeds the plan's "benefit liabilities," as
that term is defined in Section 4001(a)(16) of ERISA, when determined under
actuarial factors that would apply if the plan terminated in accordance with
all applicable legal requirements. Except as set forth on EXHIBIT 6.11, no
WPZ Benefit Plan has any material unfunded liability.
(c) EXHIBIT 6.11 hereto is a true and correct list of all
WPZ Benefit Plans. WPZ has made available to Parent true and correct copies
of each governing document the most recent summary plan description, IRS
determination letter and Form 5500 annual report for each WPZ Benefit Plan
(other than reports not yet due), together with the most recent actuarial
report for any WPZ Benefit Plan that is a defined benefit pension plan or
funded welfare benefit plan.
Section 6.12. TAX MATTERS.
Except as set forth on EXHIBIT 6.12:
(i) each of the WPZ Companies has timely
filed or caused to be filed all Tax Returns required to have been filed by or
for it, and all information set forth in such Tax returns is accurate and
complete in all material respects;
26
(ii) each of the WPZ Companies has paid or
made adequate provision on its books and records in accordance with GAAP for
all Taxes covered by such Tax Returns;
(iii) each of the WPZ Companies is in material
compliance with, and its records contain all information and documents
(including, without limitation, properly completed IRS Forms W-8 and Forms
W-9) necessary to comply in all material respects with, all applicable
information reporting and tax withholding requirements under federal, state,
local and foreign Laws, and such records identify with specificity all
accounts subject to withholding under the Code or under state, local or
foreign laws;
(iv) there is not any amount of unpaid Taxes
due and payable by any of the WPZ Companies or by any other Person that is or
could become a lien on any asset of, or otherwise have a Material Adverse
Effect on the WPZ Companies, either individually or as a whole;
(v) each of the WPZ Companies has collected
or withheld all Taxes required to be collected or withheld by it, and all
such Taxes have been paid to the appropriate Governmental Authority or set
aside in appropriate accounts for future payment when due;
(vi) none of the WPZ Companies has granted (or
is subject to) any waiver, which is currently in effect, of the period of
limitations for the assessment of any Tax; no unpaid Tax deficiency has been
assessed or asserted against or with respect to any of the WPZ Companies by
any Governmental Authority; no power of attorney relating to Taxes that is
currently in effect has been granted by or with respect to any of the WPZ
Companies; there are no currently pending administrative or judicial
proceedings, or any deficiency or refund litigation, with respect to Taxes of
any of the WPZ Companies; and any such assertion, assessment, proceeding or
litigation disclosed on EXHIBIT 6.12 hereto is being contested in good faith
through appropriate measures, and its status is accurately and completely
described in EXHIBIT 6.12 hereto;
(vii) the charges, accruals and reserves on the
most recent audited consolidated balance sheet included in the WPZ Fiscal
Financial Statements (the "Latest Balance Sheet") fully and properly
reflects, as of the date thereof, the liabilities of WPZ and its Subsidiaries
for all accrued Taxes and deferred liability for Taxes, and the charges,
accruals and reserves on the Latest Balance Sheet for Taxes (excluding any
liability for deferred taxes) as adjusted (in accordance with GAAP) on
account of operations of the WPZ Companies occurring in the ordinary and
usual course of business and consistent with past practice since the date of
the Latest Balance Sheet through the Effective Time will be at least equal to
the aggregate liability of the WPZ Companies for Taxes with respect to all
periods (or portions thereof) ending on or prior to the Closing Date;
(viii) none of the WPZ Companies will be
required to include any item of income in, or exclude any item of deduction
from, taxable income for any taxable period (or portion thereof) ending after
the Closing Date as a result of (A) a change in method of accounting for a
taxable period (or portion thereof) ending on or prior to the Closing Date,
(B) any "closing agreement," as described in Section 7121 of the Code (or any
corresponding provision of state, local
27
or foreign income Tax law), (C) any deferred intercompany gain described in
Treasury Regulation Section 1.1502-13 or former Treasury Regulations Section
1.1502-14 or any excess loss account described in Treasury Regulations
Sections 1.1502-19 and 1.1502-32 (or any corresponding or similar provision
or administrative rule of federal, state, local or foreign income Tax law),
(D) any installment sale made in a taxable period (or portion thereof) ending
on or prior to the Closing Date or (E) as a result of any prepaid amount
received in any taxable period (or portion thereof) ending on or prior to the
Closing Date;
(ix) none of the WPZ Companies has made any
payments, nor is or will become obligated (under any contract entered into on
or before the Closing Date) to make any payments, that will be non-deductible
under Section 280G of the Code (or any corresponding provision of state,
local or foreign income Tax Law); and
(x) none of the WPZ Companies (A) has, since
the date of acquisition by WPZ, been a member of an affiliated group filing a
consolidated federal income Tax Return (other than a group the common parent
of which was WPZ) or (B) has any liability for the Taxes of any Person (other
than any of the WPZ Companies) under Treasury Regulation ss. 1.1502-6 (or any
similar provision of state, local or foreign law), as a transferee or
successor, by contract or otherwise.
Section 6.13. REAL PROPERTY. EXHIBIT 6.13 sets forth the address and
description of each parcel of real estate owned by any of the WPZ Companies
("Owned Real Property"). With respect to each parcel of Owned Real Property:
(A) a WPZ Company has good and marketable fee simple title to such parcel,
free and clear of all liens and encumbrances, except Permitted Encumbrances,
(B) other than the right of Parent pursuant to this Agreement, there are no
outstanding options, rights of first offer or rights of first refusal to
purchase such parcel or any portion thereof or interest therein, and (C) no
WPZ Company is a party to any agreement or option to purchase any real
property or interest therein. The property identified in EXHIBIT 6.13,
together with the Leases comprise all of the real property used by WPZ or any
Subsidiary of WPZ in the operation of its business.
Section 6.14. COMPLIANCE WITH LAW.
(a) Each of the WPZ Companies has complied and is in
compliance with and has not violated or conflicted with any Law, other than
where the failure to so comply could not reasonably be expected to have a
Material Adverse Effect on the WPZ Companies, taken as a whole.
(b) WPZ and its Subsidiaries hold all Permits that are
required for the operation of the businesses of the WPZ Companies as now
conducted, except where the failure to hold any such Permit would not have a
Material Adverse Effect with respect to the WPZ Companies, taken as a whole,
and there has not occurred any default under any such Permit, except to the
extent that such default would not have a Material Adverse Effect with
respect to the WPZ Companies, taken as a whole. No application, action or
proceeding for the modification of any such Permits is pending or, to the
Knowledge of WPZ, threatened that may result in the revocation, modification,
nonrenewal or suspension of any Permits held by any WPZ Company. No
outstanding notice of cancellation or
28
termination has been delivered to WPZ or its Subsidiaries in connection with
any such material Permit nor, to the Knowledge of WPZ, has any such
cancellation or termination been threatened.
Section 6.15. TRANSACTIONS WITH AFFILIATES. For purposes of this
Section, the term "Affiliate" shall mean (a) any Person who, to the Knowledge
of WPZ, is the beneficial owner of 5% or more of the voting securities of
WPZ, (b) any director or officer of any of the WPZ Companies, (c) any Person
that directly or indirectly controls, is controlled by or is under common
control with any of the WPZ Companies (collectively, the "WPZ Affiliates"),
and any Person that directly or indirectly controls, is controlled by or is
under common control with any of the WPZ Affiliates; and (d) any member of
the immediate family of any of the foregoing Persons. Except as set forth in
EXHIBIT 6.15 attached hereto, since December 31, 2000, the WPZ Companies have
not: (a) purchased, leased or otherwise acquired any material property or
assets or obtained any material services from, (b) sold, leased or otherwise
disposed of any material property or assets or provided any material services
to (except with respect to cash remuneration in amounts consistent with past
practice for services rendered as a director, officer or employee of one or
more of the WPZ Companies), or (c) borrowed any money from, or made or
forgiven any loan or other advance to any Affiliate. Except as set forth in
EXHIBIT 6.15 and except for cash remuneration in amounts consistent with past
practice for services rendered and reimbursements of business expenses to
employees and directors in the ordinary course of business (a) the Contracts
do not include any obligation or commitment between any of the WPZ Companies
and any Affiliate, (b) the assets of the WPZ Companies do not include any
receivable or other obligation or commitment from an Affiliate to any of the
WPZ Companies and (c) the liabilities of the WPZ Companies do not include any
payable or other obligation or commitment from any of the WPZ Companies to
any Affiliate. Except as set forth in EXHIBIT 6.15 hereto, no Affiliate of
any of the WPZ Companies is a party to any contract with any customer or
supplier of any WPZ Company that materially and adversely affects in any
manner the business, financial condition or results of operation of any of
the WPZ Companies.
Section 6.16. FEES AND EXPENSES OF BROKERS AND OTHERS. None of the
WPZ Companies (a) has had any dealings, negotiations or communications with
any broker or other intermediary in connection with the transactions
contemplated by this Agreement, (b) is committed to any liability for any
brokers' or finders' fees or any similar fees in connection with the
transactions contemplated by this Agreement or (c) has retained any broker or
other intermediary to act on its behalf in connection with the transactions
contemplated by this Agreement, except that WPZ has engaged MSDW to represent
it in connection with such transactions, and shall pay all of MSDW's fees and
expenses in connection with such engagement. WPZ has heretofore furnished to
Parent a complete and correct copy of all agreements between WPZ and MSDW
pursuant to which such firm would be entitled to any payment in connection
with this Agreement or any of the transactions contemplated hereby, and there
have been no amendments to such agreements.
29
Section 6.17. ABSENCE OF UNDISCLOSED LIABILITIES; GUARANTEES. Except
as set forth in EXHIBIT 6.17, none of the WPZ Companies has, as of the date
hereof, or will have, as of the Effective Time, any liabilities or
obligations of any kind, whether absolute, accrued, asserted or unasserted,
contingent or otherwise, except liabilities, obligations or contingencies (a)
to the extent reflected on or accrued or reserved against in the Latest
Balance Sheet or in the notes thereto, or (b) incurred after the date of such
balance sheet in the ordinary course of business and consistent with past
practices and which, individually or in the aggregate, are not reasonably
likely to have a Material Adverse Effect on the WPZ Companies, taken as a
whole, or (c) incurred after the date of this Agreement, out of the ordinary
course of business, but only to the extent that such liabilities, obligations
or contingencies are approved by Parent pursuant to SECTION 7.1.
Section 6.18. ENVIRONMENTAL MATTERS. Each of the WPZ Companies have
complied and is in compliance, in all material respects, with all
environmental laws; the WPZ Companies have received no oral or written notice
of any violation, in any material respect, of, or any material or potentially
material liability (contingent or otherwise) or obligation under, any
environmental laws; and no facts or circumstances with respect to the past or
current operations or facilities of the WPZ Companies or any predecessor
affiliate thereof (including without limitation any onsite or offsite
disposal or release of, or contamination by, hazardous materials, substances
or wastes) would give rise to any material or potentially material liability
or obligation of the WPZ Companies under any environmental laws.
Section 6.19. INFORMATION SUPPLIED. None of the information relating
to WPZ and its affiliates supplied in writing by WPZ specifically for
inclusion, or to be incorporated by reference, in the Proxy Statement or in
any other document to be filed in connection with the transactions
contemplated by this Agreement with the SEC or any other Governmental
Authority, including any exhibits or schedules thereto, will at the
respective times filed with the SEC or other Governmental Authority and, in
addition, in the case of the Proxy Statement at the date it or any amendment
or supplement thereto is mailed to stockholders; and at the time of the
Special Meeting, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which
they were made, not misleading. If, at any time prior to the Effective Time,
WPZ should become aware of any event relating to any WPZ Company that is
required by applicable Law to be set forth in an amendment of, or supplement
to, the Proxy Statement, WPZ shall promptly so inform Parent and Merger
Subsidiary and shall promptly file or cause to be filed such amendment or
supplement. The Proxy Statement will comply as to form in all material
respects with the Exchange Act, and shall not, when filed with the SEC,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading; PROVIDED, HOWEVER, that no agreement or representation hereby
is made or shall be made by WPZ with respect to information supplied by
Parent or Merger Subsidiary in writing expressly for inclusion in the Proxy
Statement or in any other document to be filed in connection with the
transactions contemplated by this Agreement.
30
Section 6.20. FUNDED DEBT. As of the date hereof and as of the
Effective Time, except for the amounts of Funded Debt specifically enumerated
on EXHIBIT 6.20, neither WPZ nor any of its Subsidiaries has any Funded Debt.
Section 6.21. RELATIONSHIPS. To the Knowledge of WPZ, the
relationships of the WPZ Companies with material suppliers, distributors,
dealers, sales representatives, customers and others having business
relationships with them are generally satisfactory, and there is no
indication of any intention by any Person (or group of Persons) other than
the WPZ Companies to terminate or modify the terms of any such relationships,
except for any termination or modification which could not reasonably be
expected to have a Materially Adverse Effect on the WPZ Companies. There has
been no resignation or termination of employment of any officer or key
employee of any WPZ Company and WPZ has no Knowledge of an impending or
threatened resignation or termination of employment that could reasonably be
expected to have a Material Adverse Effect on the WPZ Companies.
Section 6.22. INTELLECTUAL PROPERTY.
(a) EXHIBIT 6.22(a) identifies and describes each item of
material Intellectual Property owned by any WPZ Company, or used in the
business of any WPZ Company, that: (i) is registered or the subject of an
application for registration; (ii) is material to the business or prospects
of any WPZ Company; or (iii) is a license or similar right granted by any WPZ
Company or to any WPZ Company (excluding, however, licenses of shrink wrapped
commercial software and licenses to customers of a WPZ Company made in the
ordinary course of business and subject to terms and conditions that are
consistent with such WPZ Company's past practices) (all of the foregoing,
including licenses of shrink wrapped commercial software, collectively
referred to as the "WPZ Intellectual Property").
(b) Except as disclosed on EXHIBIT 6.22(b): (i) a WPZ
Company owns or is authorized to use under a valid, enforceable and unexpired
license each item of WPZ Intellectual Property; (ii) no proceedings have been
instituted, are pending, or to the Knowledge of WPZ, are threatened, nor to
the Knowledge of WPZ are there any valid basis for such proceedings, which
(A) challenge the ownership, use or other rights of any WPZ Company with
respect to the WPZ Intellectual Property, or (B) challenge the validity of
any item of WPZ Intellectual Property; (iii) neither the ownership of a WPZ
Company of any item of WPZ Intellectual Property nor its use thereof in
connection with the assets and properties such WPZ Company violates any Laws;
(iv) none of the WPZ Intellectual Property, or use thereof by any WPZ Company
in connection with the assets and properties of such WPZ Company is subject
to any outstanding order, decree, judgment, stipulation or any Lien; (v) to
the Knowledge of WPZ, no third party has infringed upon, misappropriated,
violated or otherwise come into conflict with any of the WPZ Intellectual
Property; (vi) no software code that is subject to a GNU Public License or
other similar open source licensing arrangement has been incorporated into
any WPZ Company products; (vii) no WPZ Company has granted any exclusive
license to any third parties with regard to any item of WPZ Intellectual
Property; and (viii) each item of WPZ Intellectual Property shall be
available to the Surviving
31
Corporation and its Subsidiaries on terms and conditions identical to the
terms and conditions (if any) upon which such item was available to the WPZ
Companies prior to the Effective Time.
(c) Except as disclosed on EXHIBIT 6.22(c), no WPZ Company
has received any notice that it has infringed, misappropriated or otherwise
violated any Intellectual Property rights or other rights of any third
parties and to the Knowledge of WPZ no infringement, misappropriation or
violation will occur as a result of the continued operation of the WPZ
Companies' respective businesses as currently conducted or as currently
proposed to be conducted.
Section 6.23. PUBLICATIONS IN PROCESS. The publications in process
and the yellow pages directories in process of publication are suitable and
usable in all materials respects in the ordinary course of business, and
suitable and usable in all material respects for the due publication of WPZ's
neighborhood telephone directories.
Section 6.24. LIST OF PUBLICATIONS. EXHIBIT 6.24 attached hereto
contains a true and complete list of (a) each telephone directory published
by WPZ and its Subsidiaries, (b) the two most recent dates on which each of
such directories was published by WPZ and its Subsidiaries and (c) the
approximate number of copies of each directory published on the most recent
date listed. To the Knowledge of WPZ, the directories listed in EXHIBIT 6.24
generally contain substantially all of the addresses and phone numbers for
the area of their respective publication (except for telephone numbers that
are "unlisted" by agreement with the applicable local telephone exchange
company) and were generally distributed to substantially all of the
residences and business firms in its area.
Section 6.25. REPLACEMENT OF PHONE LISTINGS. WPZ does not have any
Knowledge that any arrangements under which information is being supplied to
WPZ and its Subsidiaries by any local telephone exchange company for listed
telephone numbers and addresses of households in the geographical areas in
which WPZ or any of its Subsidiaries publishes telephone directories will be
canceled, terminated or revoked.
Section 6.26. ACCOUNTS RECEIVABLES. All of the notes and accounts
receivable as reflected on the Latest Balance Sheet and any additional notes
and accounts receivable recorded in the books and records of WPZ thereafter
are, and as of the Closing Date will be, receivables that arose in the
ordinary course of business and to the knowledge of WPZ, subject to no valid
counterclaims or setoffs (except as reserved against in the Latest Balance
Sheet, or in a subsequent balance sheet, to the extent they are recorded
after the Latest Balance Sheet date).
32
ARTICLE VII
COVENANTS
Section 7.1. CONDUCT OF THE BUSINESS OF WPZ.
(a) Except as set forth in EXHIBIT 7.1A attached hereto,
during the period from the date of this Agreement to the Effective Time, WPZ
shall, and shall cause each of its Subsidiaries and Partnerships to, conduct
their respective operations in the ordinary and usual course of business and
consistent with past practice, and to use their respective reasonable
commercial efforts to preserve intact their respective business
organizations, to use reasonable commercial efforts to maintain all material
assets in good repair and condition (except for ordinary wear and tear) and
all insurance and intellectual property necessary to the conduct of their
businesses as currently conducted, to keep available the services of their
officers and employees and to maintain satisfactory relationships with
licensors, licensees, suppliers, contractors, distributors, customers and
others having material business relationships with them. Without limiting the
generality of the foregoing, prior to the Effective Time, neither WPZ nor any
of WPZ's Subsidiaries or Partnerships will, without the prior written consent
of Parent:
(i) amend its Articles or Certificate of
Incorporation, Bylaws, or other organizational documents;
(ii) authorize for issuance or issue, sell,
pledge or deliver (whether through the issuance or granting of options,
warrants, commitments, subscriptions, rights to purchase or otherwise) any
stock of any class or any other securities or interests, or any options,
warrants, rights or other securities outstanding as of the date hereof and
disclosed pursuant to EXHIBIT 6.2 to this Agreement;
(iii) split, combine or reclassify any shares
of its capital stock or other securities, as applicable, or declare, set
aside or pay any dividend or other distribution or redemption (whether in
cash, stock or property or any combination thereof) in respect of its capital
stock or other securities, as applicable, or redeem or otherwise acquire any
of its securities or any securities of their respective Subsidiaries and
Partnerships or permit or cause any adjustment to the exercise or conversion
price of any of the Options;
(iv) (A) incur or assume any Funded Debt not
currently outstanding, except for borrowings in the ordinary course of
business under revolving credit agreements in effect on the date hereof and
ordinary course accruals of unpaid interest under the Credit Agreement and
the Convertible Debentures, (B) assume, guarantee, endorse or otherwise
become liable or responsible for the obligations of any Person or permit the
renewal or extension of any contract or other obligation that is the subject
of a guarantee or similar obligation, other than for intercompany obligations
or in connection with the endorsement of checks for deposit in the ordinary
course of business, (C) make any loans, advances or capital contributions to,
or investments in, any other Person other than advances in the ordinary
course of business in respect of business expenses of
33
employees, and other than intercompany advances, (D) enter into any Contract
other than those disclosed on Schedule 6.9 or alter, amend, modify or
exercise any option under any Contract or exercise any option under any
supply or requirements agreement or (E) authorize any capital expenditures
other than capital expenditures pursuant to Contracts entered into prior to
the date hereof, and capital expenditures reflected in the capital budget for
WPZ, a copy of which will be provided to Parent prior to the Closing Date,
not in excess of $300,000 in the aggregate.
(v) adopt or amend (except as may be required
by Law or as provided in this Agreement) any bonus, profit sharing,
compensation, termination, stock option, stock appreciation right, restricted
stock, pension, retirement, deferred compensation, employment, severance or
other employee benefit agreements, trusts, plans, funds or other arrangements
for the benefit or welfare of any director, officer or employee (except for
normal increases in salary to employees (other than officers and directors)
in the ordinary course of business that are consistent with past practices
and that, in the aggregate, do not result in a material increase in
compensation expense);
(vi) acquire, sell, lease or dispose of any
material assets outside the ordinary course of business or acquire (whether
by merger, consolidation or acquisition of stock or assets) any Person or
business or division thereof;
(vii) change any accounting policies or
practices or manage its working capital other than in the ordinary course of
business in a manner consistent with past practices (without limiting the
generality of the foregoing, neither WPZ nor any of WPZ's Subsidiaries or
Partnerships will accelerate collection of receivables, delay the payment of
payables or otherwise defer expenses or accelerate invoices, in either case
as compared with WPZ's past practice);
(viii) settle or compromise any material
federal, state, local or foreign income Tax liability;
(ix) except for the payment of professional
fees, pay, discharge, settle or satisfy any material claims, liabilities or
obligations (absolute, accrued or unasserted, contingent or otherwise), other
than the payment, discharge or satisfaction of current or contractual
liabilities in the ordinary course of business;
(x) amend or waive any of its rights under
the Amendment Agreement;
(xi) hold any meeting of its stockholders
except to the extent required by the request of the stockholders entitled to
call a meeting under WPZ's Bylaws or the GCL or as contemplated by SECTION
3.5;
(xii) take any action that would result in a
material violation of Law or cause a material breach of any material Contract
or other commitment to which any WPZ Company is party;
34
(xiii) undertake any office closing or employee
layoffs that could implicate the WARN Act;
(xiv) take any action that would or is
reasonably likely to result in any of the conditions set forth in Article
VIII not being satisfied as of the Closing Date; or
(xv) agree in writing or otherwise to take any
of the foregoing actions.
(b) Parent hereby designates the two officers of Parent
identified on EXHIBIT 7.1B attached hereto, or such other officers as Parent
may designate from time to time upon written notice to WPZ ("Parent's
Representatives"), to be responsible for determining whether consent to any
action prohibited by SECTION 7.1(a) shall be given by Parent. WPZ hereby
designates the two officers of WPZ identified on EXHIBIT 7.1B attached
hereto, or such other officers as WPZ may designate upon written notice to
Parent ("WPZ's Representatives"), to contact Parent's Representatives with
any requests for consent to any action prohibited by SECTION 7.1(a).
Section 7.2. NO SOLICITATION.
(a) WPZ agrees that it shall not, after the date hereof
until the earlier of the Effective Time or the termination of this Agreement
in accordance with SECTION 9.1, directly or indirectly, through any officer,
director, employee, agent or otherwise, (i) solicit, initiate or encourage
submission of proposals, offers or expressions of interest from any Person
relating to any acquisition or purchase of all or a substantial portion of
the assets of or any equity interest in (including by way of a tender offer),
any WPZ Company or any investment in or merger, consolidation,
recapitalization, share exchange, business combination or other similar
transaction involving any WPZ Company (any of the foregoing proposals, offers
or expressions of interest being referred to herein as an "Acquisition
Proposal") or (ii) participate in any negotiations or discussions regarding,
or furnish to any Person any nonpublic information with respect to, or
otherwise cooperate in any way with, or assist or participate in, facilitate
or encourage, any Acquisition Proposal or make any public announcement of any
Acquisition Proposal or intention with respect thereto other than the
transaction contemplated by this Agreement; provided, however, that prior to
adoption of this Agreement by the Stockholders of WPZ at the Special Meeting,
WPZ may participate in negotiations or discussions with, and provide
nonpublic information to, any Person concerning an Acquisition Proposal
submitted in writing by such Person to the Board of Directors of WPZ after
the date of this Agreement if (A) such Acquisition Proposal was not
solicited, initiated or encouraged in violation of this Agreement, (B) the
Board of Directors of WPZ reasonably determines that such Acquisition
Proposal is likely to result in a Superior Proposal, (C) the Board of
Directors of WPZ has made a Fiduciary Determination to participate in
negotiations or discussions with or provide nonpublic information to such
Person, (D) prior to furnishing such information to, or engaging in
discussions or negotiations with, such Person, WPZ received from such Person
an executed confidentiality agreement with terms materially no less favorable
to WPZ than those contained in the Confidentiality Agreement and (E) WPZ has
complied with the terms of SECTION 7.2(b).
35
(b) WPZ shall notify Parent as promptly as practicable (and
in any event within 48 hours) if any Acquisition Proposal is made and shall
in such notice indicate in reasonable detail the identity of the Person
making such Acquisition Proposal and the terms and conditions of such
Acquisition Proposal, and shall keep Parent promptly advised of all
developments relating to such Acquisition Proposal. Without limiting the
foregoing, at least two business days prior to participating in negotiations
or discussions with or providing nonpublic information to any Person making
such Acquisition Proposal, the Board of Directors of WPZ shall notify Merger
Subsidiary of its intention to so negotiate, engage in discussions or provide
information, and, thereafter the Board of Directors of WPZ shall negotiate in
good faith with Merger Subsidiary with respect to any revised proposal to
acquire the Shares that Merger Subsidiary may make as a counteroffer to such
Acquisition Proposal. Upon receipt of any such counter offer, WPZ shall have
the right, notwithstanding the provisions of SECTION 7.2(a), to notify the
Person making such Acquisition Proposal of any counter offer that Merger
Subsidiary may make prior to taking action in respect of such counter offer.
(c) WPZ shall immediately cease and cause to be terminated
any existing discussions or negotiations with any Persons (other than Parent
and Merger Subsidiary) conducted heretofore with respect to any Acquisition
Proposal.
Section 7.3. ACCESS TO INFORMATION; CONFIDENTIALITY AGREEMENT.
(a) Between the date of this Agreement and the Effective
Time, WPZ will give Parent and its authorized representatives access during
normal business hours to all offices and other facilities, personnel,
accountants and to all books and records of the WPZ Companies, will permit
Parent to make such inspections and to engage in such monitoring as it may
reasonably request and will cause its officers and those of its Subsidiaries
and Partnerships to furnish such financial and operating data and other
information with respect to their businesses and properties as may from time
to time be requested by Parent. Subject to SECTION 7.6 hereof, all such
information shall be kept confidential by Parent in accordance with the
Confidentiality Agreement, except that Parent may disclose any information as
it may determine is necessary or prudent in connection with its financing.
(b) Notwithstanding the execution of this Agreement, the
Confidentiality Agreement shall remain in full force and effect through the
Effective Time, at which time the Confidentiality Agreement shall terminate
and be of no further force and effect.
Section 7.4. REASONABLE COMMERCIAL EFFORTS. Subject to the terms and
conditions herein provided and subject to fiduciary obligations under
applicable Law as advised by counsel (which in the case of WPZ shall be a
Fiduciary Determination), each of the parties hereto agrees to use its
reasonable commercial efforts to take, or cause to be taken, all action, and
to do, or cause to be done, all things necessary, proper and advisable under
applicable Law, to consummate and make effective the transactions
contemplated by this Agreement, including, in the case of Parent and Merger
36
Subsidiary, exercising all reasonable commercial efforts to satisfy the
financing condition set forth in SECTION 8.3(e). In case at any time after
the Effective Time any further action is necessary or desirable to carry out
the purposes of this Agreement, the proper officers and directors of each
party to this Agreement shall take all such necessary action. WPZ and Parent
will execute any additional instruments necessary to consummate the
transactions contemplated hereby.
Section 7.5. CONSENTS. WPZ and Parent each will use its
reasonable commercial efforts to obtain consents of all third parties and
governmental authorities necessary for such party to consummate the
transactions contemplated by this Agreement.
Section 7.6. PUBLIC ANNOUNCEMENTS. The parties hereto have agreed
upon the text of their respective press releases announcing, among other
things, the execution of this Agreement, which press releases shall be
disseminated promptly following the execution hereof. WPZ and Parent will
consult with each other before issuing any additional press releases or
otherwise making any additional public statement with respect to this
Agreement, the Merger or the transactions contemplated herein and shall not
issue any such press release or make any such public statement prior to such
consultation or as to which the other party promptly and reasonably objects,
except as may be required by Law based on the advice of such party's counsel
or by obligations pursuant to any listing agreement with any national
securities exchange or inter-dealer quotation system, in which case the party
proposing to issue such press release or make such public announcement shall
use its best efforts to consult in good faith with the other party before
issuing any such press release or making any such public announcements.
Section 7.7. INDEMNIFICATION; INSURANCE.
(a) From and after the consummation of the Merger and for
six years thereafter, the Surviving Corporation shall cause WPZ and its
wholly-owned Subsidiaries to maintain all rights of indemnification
(including rights to advancement of expenses and exculpation from liability)
existing in favor of the present and former directors and officers of WPZ and
such Subsidiaries (collectively, the "Indemnified Parties") on terms no less
favorable than those provided in the certificates of incorporation and bylaws
of such entities on the date of this Agreement with respect to matters
occurring prior to the Effective Time, subject to any limitations provided by
applicable Law; provided that, as a condition to any advancement or
reimbursement of expenses hereunder or thereunder, the Indemnified Party
shall agree in writing to promptly repay to the Surviving Corporation the
amount of any such advance or reimbursement if it shall be judicially
determined by judgment or order of a court of competent jurisdiction that
such Indemnified Party is not entitled to be indemnified by the Surviving
Corporation in connection with such matter. To the extent consistent with the
foregoing, the Surviving Corporation shall cause each of WPZ and its
Subsidiaries (or any of their successors) to perform all of their respective
obligations under those Indemnification Agreements listed on EXHIBIT 7.7
attached hereto. Parent acknowledges that all directors, officers and
employees of Subsidiaries of WPZ that are not wholly-owned Subsidiaries who
are also directors, officers or employees of WPZ are serving in their
capacities at such Subsidiaries at the direction and request of WPZ.
37
(b) The Surviving Corporation shall cause to be maintained
in effect from the consummation of the Merger and for six years thereafter
the current policies (other than the excess liability policy procured in
March 2001) for directors' and officers' liability insurance maintained by
WPZ for the benefit of the Indemnified Parties (copies of which have been
provided to Parent and have not been subsequently modified or amended) for
those Indemnified Parties that are currently covered by such policies,
including coverage with respect to claims arising from facts or events that
occurred at or prior to the consummation of the Merger (provided that Parent
may substitute therefor policies of at least the same coverage containing
terms and conditions that are not materially less advantageous), with respect
to matters occurring prior to the Effective Time, to the extent such
insurance is available to Parent in the market; provided that if the
aggregate annual premiums for such insurance during such period shall exceed
200% of the per annum rate of premium paid by WPZ as of the date hereof for
such insurance, then the Surviving Corporation shall provide a policy with
the best coverage as shall then be available at 200% of such rate.
(c) In the event the Surviving Corporation or any of its
successors or assigns (i) consolidates with or merges into any other Person
and shall not be the continuing or surviving corporation or entity in such
consolidation or merger, or (ii) transfers all or substantially all of its
properties and assets to any Person, then, and in each case, proper provision
shall be made so that the successors and assigns of the Surviving Corporation
honor the indemnification obligations set forth in this SECTION 7.7.
(d) The obligations of WPZ and Parent under this SECTION
7.7 shall not be terminated, modified or assigned in such a manner so as to
adversely affect any Indemnified Party without the consent of such
Indemnified Party (it being expressly agreed that the Indemnified Parties
shall be third-party beneficiaries of this SECTION 7.7).
Section 7.8. NOTIFICATION OF CERTAIN MATTERS. WPZ shall give prompt
notice to Parent, and (in the case of clauses (a), (d) and (e) of this
SECTION 7.8 only) Parent and Merger Subsidiary shall give prompt notice to
WPZ, of (a) the occurrence, or failure to occur, of any event, which
occurrence or failure to occur has caused or is reasonably likely to cause
any representation or warranty of such party contained in this Agreement or
the other agreements contemplated hereby to be untrue at any time from the
date of this Agreement to the Closing Date, (b) any Material Adverse Effect
with respect to the WPZ Companies, taken as a whole, or any event, change,
occurrence, effect, fact, condition, development or circumstance or series of
events, changes, occurrences, effects, facts, conditions, developments or
circumstances that could reasonably be expected to result in a Material
Adverse Effect with respect to the WPZ Companies, taken as a whole, (c) any
material claims, actions, proceedings, litigation or governmental
investigations commenced or, to its Knowledge, threatened, involving or
affecting WPZ or any of its Subsidiaries or any of their material property or
assets or the transactions contemplated hereby which is likely to have a
Material Adverse Effect on the WPZ Companies, taken as a whole, (d) any
failure of WPZ or Parent or of any officer, director, employee or agent
thereof to comply in all material respects with or satisfy any material
covenant, condition or agreement to be complied with or satisfied by it
hereunder or (e) any written notice which Parent has received from its bank
financing sources to the effect that the condition set
38
forth in SECTION 8.3(e) will not to be satisfied. Notwithstanding anything in
this Agreement to the contrary, no such notification shall affect the
representations, warranties or covenants of any party or the conditions to
the obligations of any party hereunder, nor shall it limit or otherwise
affect the remedies available hereunder to the party receiving such notice.
Each of WPZ and Parent shall give prompt notice to the other party of any
notice or other communication from any third party or Governmental Authority
alleging that the consent of such third party or Governmental Authority is or
may be required in connection with the transactions contemplated by this
Agreement.
Section 7.9. RESIGNATIONS. Prior to the Effective Time, WPZ
shall request and obtain written resignations of all of the directors and
officers of the WPZ Companies effective as of the Effective Time.
Section 7.10. FINANCIAL STATEMENTS. During the period prior to the
Closing Date, WPZ shall provide Parent and Merger Subsidiary as promptly as
practicable (i) (and in any event within twenty (20) days following the end
of such month) with a copy of an unaudited consolidated balance sheet for
each of the months ended prior to the Closing Date (commencing with the month
ended March 31, 2001), and the related consolidated statements of earnings,
stockholders' equity and cash flows for the month then ended, and (ii) (and
in any event within thirty (30) days following the end of such month) with a
copy of the unaudited consolidated balance sheet of WPZ and its Subsidiaries
as of March 30, 2001 and June 30, 2001, in each case for the three month
period then ended, together with the related consolidated statements of
earnings, stockholders' equity and cash flows for such three month period.
ARTICLE VIII
CONDITIONS PRECEDENT TO CONSUMMATION OF THE MERGER
Section 8.1. CONDITIONS PRECEDENT TO EACH PARTY'S OBLIGATION TO
EFFECT THE MERGER. The respective obligation of each party to consummate the
Merger is subject to the satisfaction at the Effective Time of the following
conditions precedent:
(a) this Agreement and the Merger shall have been approved
and adopted by the affirmative vote of the holders of a majority of Shares
(and any other security holders entitled to vote thereon) as required under
the GCL;
(b) no order, decree or injunction shall have been enacted,
entered, promulgated or enforced by any court of competent jurisdiction or
any Governmental Authority which prohibits the consummation of the Merger or
is reasonably likely to cause any of the transactions contemplated hereby to
be rescinded; and
39
(c) any waiting period applicable to the Merger under the
HSR Act shall have terminated or expired, all applicable requirements of the
Exchange Act shall have been satisfied and any applicable filings under state
securities, "Blue Sky" or takeover laws shall have been made.
Section 8.2. CONDITIONS PRECEDENT TO OBLIGATIONS OF WPZ. The
obligations of WPZ to consummate the Merger are subject to the satisfaction or
waiver in writing at or prior to the Effective Time of the following
conditions precedent:
(a) the representations and warranties of Parent and Merger
Subsidiary contained herein, ignoring for purposes of satisfying this
condition any exception or qualification as to materiality or Material Adverse
Effect, shall be true and correct when made and at and as of the Closing with
the same force and effect as if those representations and warranties had been
made at and as of such time (except to the extent such representations and
warranties speak as of a specified earlier date, in which event such
representations and warranties must be true and correct as of such specified
date), except where the failure to be so true and correct is not individually
or in the aggregate, reasonably likely to have a Material Adverse Effect on
the WPZ Companies, taken as a whole, or the ability of WPZ or Parent to
consummate the Merger; and
(b) Parent and Merger Subsidiary shall have performed all
obligations and complied with all covenants necessary to be performed or
complied with by them on or before the consummation of the Merger.
Section 8.3. CONDITIONS PRECEDENT TO OBLIGATIONS OF PARENT AND MERGER
SUBSIDIARY. The obligations of Parent and Merger Subsidiary to consummate the
Merger are subject to the satisfaction or waiver in writing at or prior to the
Effective Time of the following conditions precedent:
(a) the representations and warranties of WPZ contained
herein, ignoring for purposes of considering satisfaction of this condition
any exception or qualification as to materiality or Material Adverse Effect,
shall be true and correct when made and at and as of the Closing with the same
force and effect as if those representations and warranties had been made at
and as of such time (except to the extent such representations and warranties
speak as of a specified earlier date, in which event such representations and
warranties must be true and correct as of such specified date), except where
the failure to be so true and correct is not, individually or in the
aggregate, reasonably likely to have a Material Adverse Effect on the WPZ
Companies, taken as a whole, Parent, or their respective abilities to
consummate the Merger; and
(b) each of the representations and warranties of WPZ
contained in SECTIONS 6.2, 6.15, 6.16 and 6.20 shall be true and correct when
made and at and as of the Closing with the same force and effect as if those
representations and warranties had been made at and as of such time.
(c) WPZ shall have performed all obligations and complied
with all covenants necessary to be performed or complied with by it on or
before the consummation of the Merger.
40
(d) Since December 31, 2000, there shall have been no
Material Adverse Effect with respect to the WPZ Companies, taken as a whole,
or any event, change, occurrence, effect, fact circumstance or condition which
could reasonably be expected to have a Material Adverse Effect with respect to
the WPZ Companies, taken as a whole.
(e) Parent and Merger Subsidiary shall have obtained the
financing proceeds contemplated by the Commitment Letters on the terms and
conditions set forth in the Commitment Letters and the term sheets and
schedules attached thereto or if such financing cannot be effected without
modification of the terms and conditions, on terms which are not materially
less favorable to Parent and Merger Subsidiary.
(f) WPZ shall have received a payoff letter from Bank of
America, N.A., in the form annexed as EXHIBIT 8.3(n) hereto, and shall have
received releases of all liens, claims, encumbrances or security interests
with respect to any Funded Debt being repaid or refinanced on or prior to the
Effective Time; (it being understood that all indebtedness under that certain
Amended and Restated Loan Agreement dated as of March 30, 2000, by and among
WPZ, those certain financial institutions whose names appear on the signature
page thereof and Bank of America, N.A., as Administrative Agent (the "Credit
Agreement") will be repaid with the proceeds of Parent's financing in
connection with the Closing).
(g) [INTENTIONALLY LEFT BLANK].
(h) Parent and Merger Subsidiary shall have received from
Xxxxxxx Berlin Shereff Xxxxxxxx, LLP, counsel for the WPZ Companies, an
opinion with respect to the matters set forth in EXHIBIT 8.3(h) attached
hereto, which shall be addressed to Parent and Merger Subsidiary, dated as of
the Closing Date.
(i) No Governmental Authority shall have enacted, issued,
promulgated, enforced or entered any statute, rule, regulation, executive
order, decree, injunction or other order which is in effect and which (i)
materially restricts, prevents or prohibits consummation of the Merger or
results in the obligation to pay damages as a result of or in connection with
the transactions contemplated by this Agreement in amounts that could have a
Material Adverse Effect on Parent, (ii) prohibits or limits materially the
ownership or operation by Parent, Merger Subsidiary or any of their
Subsidiaries of all or any material portion of the business or assets of WPZ
and its Subsidiaries taken as a whole or compels Parent, Merger Subsidiary, or
any of their Subsidiaries to dispose of or hold separate all or any material
portion of the business or assets of WPZ or any of its Subsidiaries, (iii)
imposes material limitations on the ability of Parent, Merger Subsidiary or
any other Subsidiary of Parent to acquire or hold, or to exercise effectively
full rights of ownership of, any Shares, or (iv) requires divestitures by
Parent, Merger Subsidiary or any other affiliate of Parent of any Shares.
(j) WPZ shall not have received notice that Dissenting
Shareholders hold more than 15% of each class of capital stock entitled to
approve the Merger.
41
(k) Parent and Merger Subsidiary shall have received a
certificate, substantially in the form of EXHIBIT 8.3(k) attached hereto, of
an officer of WPZ, dated the Closing Date, certifying as to the satisfaction
of the conditions specified in SECTIONS 8.3(a)-(d), (f), (i), (j), (l) and (n).
(l) WPZ Expenses for which WPZ is liable shall not
exceed $4,500,000 in the aggregate.
(m) WPZ shall have delivered copies of the resolutions
adopted by WPZ's Board of Directors as required by Sections 3.6 and 4.5, along
with a certification of an officer of WPZ that such resolutions are true,
correct and complete and are in full force and effect as of the Closing.
(n) All of the following shall have occurred:
(i) the Convertible Debentures shall have been
redeemed, effective as of the Closing, for an amount of cash equal to 109% of
the principal amount thereof plus accrued but unpaid interest, which
redemption shall be funded out of the proceeds of the Parent's financing;
(ii) the Other Options issued with respect to
the Debentures (or one or more affidavits of loss) shall have been surrendered
to WPZ for cancellation and canceled without additional consideration;
(iii) WPZ shall have obtained a full and
unconditional and enforceable release covering any and all Claims (as defined
in Section 12 of the Amendment Agreement) that exist or that in the future may
exist, including without limitation, with respect to the Convertible
Debentures, the Other Options issued with respect to the Debentures, that
certain Amendment Agreement dated as of April 26, 2001 by and among WPZ,
Halifax Fund, L.P., Xxxxxxx Associates, L.P., and Xxxxxxx International, L.P.
(the "Amendment Agreement") or the Transaction Documents (subject to the
exceptions set forth in Sections 12(a)(z) and 12(c) of the Amendment
Agreement);
(iv) the holders of the Convertible Debentures
shall have received an opinion from an independent counsel or a payoff letter
from WPZ's senior lender, in either case satisfying the requirements of
Section 1(b)(iii) of the Amendment Agreement;
(v) either (x) the Claim Conditions (as
defined in Section 12 of the Amendment Agreement) shall not have been
satisfied at any time on or before the Redemption Closing (as defined in
Section 1(j) of the Amendment Agreement) or (y) the Claim Conditions are
satisfied, but no litigation shall have been commenced (other than litigation
that has been finally settled in a manner acceptable to Parent and dismissed
by stipulation or otherwise with prejudice) prior to the Redemption Closing
thereof and no notice is given of any Claims (as defined in Section 12 of the
Amendment Agreement) pursuant to the terms of Section 12(a) (subject to the
exceptions set forth in Sections 12(a)(z) and 12(c) of the Amendment
Agreement); and
42
(vi) there shall have been no reset of the
conversion price of the Convertible Debentures to a price below $3.875.
ARTICLE IX
TERMINATION; AMENDMENT; WAIVER
Section 9.1. TERMINATION. This Agreement may be terminated and
the Merger contemplated hereby may be abandoned at any time notwithstanding
approval thereof by the respective shareholders of Parent and Merger
Subsidiary, but prior to the Effective Time:
(a) by mutual written consent of Parent and WPZ;
(b) by Parent or WPZ, if the Effective Time shall not
have occurred on or before August 21, 2001 (the "Termination Date");
(c) by either Parent or WPZ, if there shall have been a
breach by the other of any of its representations, warranties, covenants or
obligations contained in this Agreement, which breach would result in the
failure to satisfy one or more of the conditions set forth in SECTIONS 8.2(a)
and 8.2(b) (in the case of a breach by Parent) or SECTIONS 8.3(a) through (d),
(f), (i), (j), (l), (m) and (n) (in the case of a breach by WPZ), and in any
such case such breach or failure of condition shall be incapable of being
cured or, if capable of being cured, shall not have been cured within thirty
(30) days after written notice thereof shall have been received by the party
alleged to be in breach;
(d) by (i) Parent, upon the occurrence of an event,
condition or circumstance that does not constitute a breach of a
representation, warranty, covenant or obligation contained in this Agreement
but results in any condition set forth in SECTION 8.1(c) or 8.3 being
incapable of being satisfied, or (ii) WPZ, upon the occurrence of an event,
condition or circumstance that does not constitute a breach of a
representation, warranty, covenant or obligation contained in this Agreement
but results in any condition set forth in SECTION 8.2 being incapable of being
satisfied or the inability of Parent to satisfy the condition set forth in
SECTION 8.3(e). Parent shall have thirty (30) days to cure such condition
under SECTION 8.3(e), but only to the extent such condition is capable of
being cured;
(e) by Parent, if the Board of Directors of WPZ should fail
to make a Company Recommendation to vote in favor of the approval of the
Merger and this Agreement, or such Company Recommendation shall have been made
and subsequently withdrawn, modified or amended in any manner adverse to
Parent (it being understood that taking no position or remaining neutral (a
"Neutral Statement") with respect to, or making a recommendation in favor of a
tender or exchange offer from a third party, in a filing made pursuant to
Rules 14d-9 and 14e-2(a) promulgated under the Exchange Act shall constitute
an adverse modification of the Company Recommendation of the Merger);
43
(f) by Parent, if (i) any other entity, Person or group
consummates a tender offer pursuant to which such Person, entity or group
becomes the beneficial owner of 50% or more of the then outstanding shares of
WPZ Common Stock, or (ii) the Special Meeting has not been convened prior to
the day before the Termination Date and the failure to convene the Special
Meeting was not the fault of Parent;
(g) by Parent or WPZ, if any court of competent jurisdiction
in the United States or other United States Governmental Authority shall have
issued an order, decree or ruling or taken any other action restraining,
enjoining or otherwise prohibiting the Merger and such order, decree, ruling
or other action shall have become final and nonappealable;
(h) by Parent or WPZ, if this Agreement and the Merger shall
fail to receive the requisite vote for approval and adoption of this Agreement
by the WPZ stockholders at the Special Meeting or any adjournment or
postponement thereof; or
(i) by WPZ two business days after giving the Parent written
notice that a Fiduciary Determination has been made to terminate this
Agreement so that WPZ may enter into an agreement with respect to a Superior
Proposal, if but only if (i) WPZ complies with the requirements of SECTION 9.3
and SECTION 10.9, and (ii) WPZ has not theretofore entered into any agreement
with the Person making such Superior Proposal other than the confidentiality
agreement contemplated by SECTION 7.2(a).
The party desiring to terminate this Agreement pursuant to clause (b) through
(i) of this SECTION 9.1 shall give written notice to the other party in
accordance with SECTION 10.3, specifying the provision hereof pursuant to
which such termination is effected. Notwithstanding anything to the contrary
herein, the right to terminate this Agreement under SECTIONS 9.1(b), (c), (d)
or (h) shall not be available to any party whose failure to fulfill any
obligation under this Agreement has been the cause of or has resulted in the
failure of the condition to be satisfied.
Section 9.2. EFFECT OF TERMINATION. If this Agreement is so
terminated and the Merger is not consummated, this Agreement shall forthwith
become void and have no effect, without any liability on the part of either
party or its directors, officers or shareholders, except as provided under the
provisions of this SECTION 9.2, SECTION 9.3 and ARTICLE X; provided that
nothing contained in this SECTION 9.2 shall relieve any party from any
liability to the other party for any intentional breach of this Agreement
prior to or as of the date of such termination.
Section 9.3. TERMINATION FEES.
(a) If this Agreement shall have been terminated pursuant to
SECTION 9.1(e), SECTION 9.1(f)(i), or SECTION 9.1(i) then WPZ shall promptly,
but in no event later than two business days after the termination of this
Agreement (or in the event of a termination pursuant to SECTION 9.1(i), on the
date of termination), pay Parent an amount equal to $9,200,000 (the "Break-up
Fee") plus all Expenses pursuant to SECTION 10.9(c), subject to the limitation
on amount set forth therein.
44
Payment of any amounts pursuant to this SECTION 9.3(a) shall be made as
directed by Parent, by wire transfer in immediately available funds promptly,
but in no event later than two business days following such termination
(provided that in the event of a termination pursuant to SECTION 9.1(i), such
payment shall be made on the date of termination).
(b) If this Agreement shall have been terminated pursuant to
SECTION 9.1(c) or SECTION 9.1(f)(ii) or SECTION 9.1(h), WPZ shall (i)
promptly, but in no event later than two business days after the termination
of this Agreement, pay the Expenses pursuant to SECTION 10.9 subject to the
applicable limitations or amounts set forth therein as directed by Parent, by
wire transfer in immediately available funds, except that WPZ shall not be
required to pay Expenses in the event of termination of this Agreement
pursuant to SECTION 9.1(c) that arises solely from a failure of SECTION 4.7 or
8.3(n), and (ii) if within six (6) months following the date of such
termination, (A) WPZ enters into a written agreement (other than a
confidentiality agreement) with respect to a merger, consolidation, business
combination or other similar transaction involving WPZ or a substantial
portion of its assets (an "Alternative Acquisition"), or (B) any third party
(other than an Affiliate of Parent or Merger Subsidiary) acquires 50% or more
of the then outstanding Shares from WPZ or pursuant to a tender offer made to
all shareholders (a "Stock Purchase") then WPZ shall, upon the closing of such
Alternative Acquisition or Stock Purchase, pay Parent the Break-up Fee and all
Expenses not previously paid or reimbursed by Parent, as directed by Parent,
by wire transfer in immediately available funds.
(c) The payment of any Break-up Fee and/or Expenses pursuant
to SECTIONS 9.3 or 10.9 shall be compensation for the loss suffered by Parent
as the result of the failure of the Merger to be consummated.
Section 9.4. AMENDMENT. Subject to applicable law, this Agreement may
be amended by action taken by the parties hereto at any time before or after
approval of the Merger by the stockholders of WPZ. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties hereto.
Section 9.5. EXTENSION; WAIVER. At any time prior to the Effective
Time, Parent and Merger Subsidiary on the one hand, and WPZ on the other hand,
may (i) extend the time for the performance of any of the obligations or other
acts of the other party hereto, (ii) waive any inaccuracies in the
representations and warranties contained herein or in any document,
certificate or writing delivered pursuant hereto by the other party hereto or
(iii) waive compliance with any of the agreements or conditions contained
herein by the other party hereto. Any agreement on the part of any party to
any such extension or waiver shall be valid only if set forth in an instrument
in writing signed on behalf of such party.
45
ARTICLE X
MISCELLANEOUS
Section 10.1. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties made herein shall not survive beyond the
Effective Time.
Section 10.2. ENTIRE AGREEMENT; ASSIGNMENT. This Agreement and other
agreements or letters signed as of the date hereof (a) constitute the entire
agreement among the parties with respect to the subject matter hereof and
supersedes, except as set forth in SECTION 7.3(b) hereof, all other prior
agreements and understandings, both written and oral, between the parties or
any of them with respect to the subject matter hereof, and (b) shall not be
assigned by operation of law or otherwise, except that Parent or Merger
Subsidiary may assign its rights hereunder to any Person controlled by or
under common control with the Parent provided, however, that no such
assignment shall relieve Parent of its liabilities under this Agreement.
Section 10.3. NOTICES. All notices, requests and other communications
to any party hereunder shall be in writing (including telecopy, telex or
similar writing) and shall be deemed given or made as of the date delivered,
if delivered personally or by telecopy (provided that delivery by telecopy
shall be followed by delivery of an additional copy personally, by mail or
overnight courier), one day after being entrusted to an overnight courier for
delivery or three days after being mailed by registered or certified mail
(postage prepaid, return receipt requested), to the parties at the following
addresses:
if to XxxxxXxxxx.xxx, Inc.:
XxxxxXxxxx.xxx, Inc.
0000 Xxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx Xxxxx
Xxxxxx Xxxxxxxx
Fax: (000) 000-0000
with a copy to:
Xxxxxxx Berlin Shereff Xxxxxxxx, LLP
The Chrysler Building
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Fax: (000) 000-0000
if to either Parent or Merger Subsidiary:
46
c/o TransWestern Publishing Company, L.L.C.
0000 Xxxxxxxxxx Xxxx Xxxx.
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxx
Xxxxxxx Xxxxxx
Fax: (000) 000-0000
with a copy to:
Xxxxxx X. Xxx Company
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: X. Xxxxxx Xxxx
Xxxxx X. Xxxxxx
Fax: (000) 000-0000
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, P.C.
Fax: (000) 000-0000
or to such other address as the Person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
Section 10.4. GOVERNING LAW; CONSENT TO JURISDICTION. This Agreement
shall be governed by and construed in accordance with the laws of the State of
New York regardless of the laws that might otherwise govern under applicable
principles of conflicts of laws thereof. Each of the parties hereto (a)
consents to submit itself to the personal jurisdiction of any federal court
located in the State of New York or any New York state court in the event any
dispute arises out of this Agreement or any of the transactions contemplated
by this Agreement, and, in connection with any such matter, to service of
process by notice as otherwise provided herein, (b) agrees that it will not
attempt to deny or defeat such personal jurisdiction by motion or other
request for leave from any such court, and (c) agrees that it will not bring
any action relating to this Agreement or any of the transactions contemplated
by this Agreement in any court other than a federal court sitting in the State
of New York or a New York state court.
Section 10.5. DESCRIPTIVE HEADINGS. The descriptive headings
herein are inserted for convenience of reference only and are not intended to
be part of or to affect the meaning or interpretation of this Agreement.
47
Section 10.6. PARTIES IN INTEREST. This Agreement shall be binding
upon and inure solely to the benefit of each entity that is a party hereto,
and nothing in this Agreement; express or implied, is intended to or shall
confer upon any Person not a party hereto any rights, benefits or remedies of
any nature whatsoever under or by reason of this Agreement, except as provided
in SECTION 7.8.
Section 10.7. COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all of
which shall constitute one and the same agreement.
Section 10.8. SPECIFIC PERFORMANCE. The parties hereto agree that
irreparable damage would occur in the event any of the provisions of this
Agreement were not performed in accordance with the terms hereof and that the
parties shall be entitled to specific performance of the terms hereof, in
addition to any other remedy at law or equity.
Section 10.9. FEES AND EXPENSES. All costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall
be paid by the party incurring such expenses; provided, however, that if (a)
this Agreement is terminated pursuant to SECTION 9.1(c) as a result of an
intentional breach by WPZ, then all Expenses not to exceed $5,500,000 in the
aggregate shall be promptly paid in cash by WPZ upon delivery of invoices with
respect thereto by Parent; (b) this Agreement is terminated pursuant to
SECTION 9.1(f)(ii) or 9.1(h) then 50% of all Expenses not to exceed $1,750,000
in the aggregate shall be promptly paid in cash by WPZ upon delivery of
invoices with respect thereto; or (c) Parent is entitled to the Break-up Fee
pursuant to SECTION 9.3, then all Expenses not to exceed $5,500,000 in the
aggregate shall be promptly paid in cash by WPZ upon delivery of invoices with
respect thereto by Parent.
Section 10.10. SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of
law or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner adverse to either party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner, to the end that the transactions contemplated hereby are fulfilled to
the extent possible.
48
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed on its behalf by its officer thereunto duly
authorized, all as of the day and Year first above written.
TRANSWESTERN PUBLISHING COMPANY LLC
By: /s/ Xxxxxxx Xxxxxx
------------------------------------
Xxxxxxx Xxxxxx
CEO
WORLDPAGES MERGER SUBSIDIARY, INC.
By: /s/ Xxxxxxx Xxxxxx
------------------------------------
Xxxxxxx Xxxxxx
CEO
XXXXXXXXXX.XXX, INC.
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Xxxxxxx X. Xxxxx
Chief Financial Officer,
Vice President and Secretary
49
