Exhibit 2.1
AMENDMENT NO. 1
TO
AGREEMENT AND PLAN OF MERGER
THIS AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER (this
"Amendment") is made and entered into as of this 22nd day of December, 2006, by
and among US LEC Corp, a Delaware corporation ("US LEC"), PAETEC Corp., a
Delaware corporation ("PAETEC"), WC Acquisition Holdings Corp., a Delaware
corporation and a wholly-owned direct subsidiary of PAETEC (the "Company"), WC
Acquisition Sub U Corp., a Delaware corporation and a wholly-owned direct
subsidiary of the Company ("Merger Sub U"), and WC Acquisition Sub P Corp., a
Delaware corporation and a wholly-owned direct subsidiary of the Company
("Merger Sub P").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the parties wish to amend the Agreement and Plan of
Merger, dated as of August 11, 2006, by and among US LEC, PAETEC, Merger Sub U,
Merger Sub P and the Company (the "Merger Agreement") upon the terms and
conditions set forth in this Amendment;
NOW, THEREFORE, in consideration of the foregoing and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto hereby agree as follows:
1. Amendment of Section 1.6(a). Section 1.6(a) of the Merger Agreement
is hereby amended by replacing the existing text with the following text:
"The directors of US LEC at the US LEC Effective Time shall be
the initial directors of the US LEC Surviving Corporation
until they have resigned or been removed from office or their
successors have been duly elected or appointed or qualified;
provided, however, that, within one day following the US LEC
Effective Time, the Company, as the sole stockholder of the US
LEC Surviving Corporation, shall take action to remove from
office without cause all such directors who are not also
continuing as directors of the Company."
2. Amendment of Section 1.7(c). Section 1.7(c) of the Merger Agreement
is hereby amended by replacing the reference to "PAETEC Communications Corp."
set forth therein with a reference to "PAETEC Holding Corp."
3. Amendment to Exhibits 1.7(a)-1 and 1.7(a)-2. Exhibits 1.7(a)-1 and
1.7(a)-2 to the Merger Agreement shall each be amended by replacing each
reference to "PAETEC Communications Corp." set forth therein with a reference to
"PAETEC Holding Corp."
4. Amendment of Section 2.1. Section 2.1 of the Merger Agreement is
hereby amended by adding a new Section 2.1(j) thereto, which shall read in its
entirety as follows:
"(j) Cancellation of Company Shares. Each share of
CompanyCommon Stock held by PAETEC immediately prior to the
Effective Time shall automatically be canceled and retired and
shall cease to exist, and no consideration shall be delivered
in exchange therefor."
5. Amendments Regarding Conversion Agreement.
(a) Section 5.17 of the Merger Agreement is hereby amended by
adding the following parenthetical at the end of such Section 5.17:
"(other than any amendment to or modification or termination
of the Conversion Agreement that provides for the acceleration
of the issuance and delivery of the shares of PAETEC Common
Stock subject to issuance pursuant thereto, without in any
manner increasing the number of shares of PAETEC Common Stock
subject to issuance pursuant thereto)."
(b) Section 6.3(g) of the Merger Agreement is hereby amended
by adding the following clause at the end of such Section 6.3(g):
", unless, solely in the case of the Conversion Agreement, any
such amendment or modification is made pursuant to, or any
such lack of effectiveness is the result of any actions taken
in accordance with, Section 5.17 hereof."
(c) Section 4.1(a)(ii) of the PAETEC Disclosure Schedule is
hereby amended by adding the following:
"5. PAETEC will be permitted to issue up to 3,400,000 shares
of PAETEC Common Stock pursuant to the Conversion Agreement,
as the same may be amended from time to time in accordance
with Section 5.17 of the Agreement."
(d) Section 5.11(a)(v) of the PAETEC Disclosure Schedule is
hereby amended by deleting the existing numbered paragraph (1) of Section
5.11(a)(v) in its entirety and substituting therefor a new numbered paragraph
(1) of Section 5.11(a)(v), which shall read in its entirety as follows:
"1. The Conversion and Exchange Agreement, as the same may be
amended in accordance with Section 5.17 of the Agreement, but
only to the extent that obligations of PAETEC remain
thereunder immediately prior to the Effective Time."
6. Company Registration Rights Agreement.
(a) Section 4.1(a)(iii) of the PAETEC Disclosure Schedule is
hereby amended by adding the following:
"3. PAETEC and PAETEC Holding will be entitled to enter into a
Registration Rights Agreement in substantially the form
attached hereto as Exhibit 4.1(a)(iii)(3) with the Persons set
forth on the signature pages thereof."
(b) The PAETEC Disclosure Schedule is hereby amended by adding
thereto the Exhibit 4.1(a)(iii)(3) agreed by counsel to PAETEC and US LEC to be
the substantially final version of the Registration Rights Agreement referred to
in Item 3 of Section 4.1(a)(iii) of the PAETEC Disclosure Schedule.
7. PAETEC 2001 Option Plan.
(a) Section 4.1(a)(vi) of the PAETEC Disclosure Schedule is
hereby amended by adding the following:
"5. PAETEC will be permitted to amend Section 19.1 of the
PAETEC 2001 Plan to change the third word of clause (a)
thereof from 'may' to 'shall' and to change the first
reference to the word 'may' in the final sentence thereof to
'shall'."
(b) From and after any amendment permitted by Item 5 of
Section 4.1(a)(vi) of the PAETEC Disclosure Schedule, each reference in the
Merger Agreement to the PAETEC 2001 Plan as in effect on the date of the
Merger Agreement shall be deemed to be a reference to the PAETEC 2001 Plan, as
amended by such amendment.
8. Acceleration of Certain US LEC Payments. Section 4.1(a)(vi) of the
US LEC Disclosure Schedule is hereby amended by adding the following:
"5. US LEC shall be permitted to accelerate the payment of the
2006 bonus and retention payments to Xxxxx Xxxxxx and J. Xxxx
Xxxxxxx."
9. Continuing Effect. This Amendment shall not constitute an amendment
or modification of any provision of the Merger Agreement not expressly referred
to herein. Except as expressly set forth in this Amendment, the terms,
provisions and conditions of the Merger Agreement shall remain unchanged and in
full force and effect.
10. Counterparts. This Amendment may be executed in any number of
counterparts which, taken together, shall constitute a single, binding
instrument.
11. Governing Law. This Amendment and any disputes arising out of or
related to it shall be governed by, and construed in accordance with, the laws
of the State of Delaware, regardless of the laws that might otherwise govern
under applicable principles of conflict of laws thereof.
[Signature page follows]
IN WITNESS WHEREOF, US LEC, PAETEC, Merger Sub U, Merger Sub P
and the Company have caused this Amendment No.1 to be executed as of the date
first written above by their respective officers thereunto duly authorized.
US LEC CORP.
By: /s/ J. Xxxx Xxxxxxx
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Name: J. Xxxx Xxxxxxx
Title: Executive Vice President and
Chief Financial Officer
PAETEC CORP.
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
Title: Chairman, President and
Chief Executive Officer
WC ACQUISITION HOLDINGS CORP.
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: Executive Vice President and
Chief Financial Officer
WC ACQUISITION SUB U CORP.
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: Vice President
WC ACQUISITION SUB P CORP.
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: Vice President
