EXECUTION COPY
INVESTMENT AGREEMENT
INVESTMENT AGREEMENT (this "Agreement"), dated as of July 26, 2002, by
and among Leucadia National Corporation, a New York corporation ("Purchaser"),
Xxxxxxxx Communications Group, Inc., a Delaware corporation (the "Company") and
debtor-in-possession under chapter 11 of title 11 of the United States Code (the
"Bankruptcy Code") in case No. 02-11957 (BRL) (the "Chapter 11 Case"), pending
in the United States Bankruptcy Court for the Southern District of New York and,
for purposes of Section 7.4 only, Xxxxxxxx Communications, LLC, a Delaware
limited liability company and wholly owned subsidiary of the Company ("WCL").
WHEREAS, the Company intends to file with the Bankruptcy Court its
first amended chapter 11 plan of reorganization substantially in the form and
substance attached hereto as Exhibit A (the "Chapter 11 Plan") and, pursuant to
the Plan, the Company will transfer all of its interests in the equity of WCL to
a newly formed Nevada corporation ("New WCG");
WHEREAS, the Chapter 11 Plan implements a settlement agreement (the
"Settlement Agreement") between the Company, its wholly owned subsidiary, CG
Austria, Inc., The Xxxxxxxx Companies, Inc. ("TWC"), Purchaser and the official
committee of unsecured creditors appointed in the Chapter 11 Case pursuant to
which the parties to the Settlement Agreement have agreed to various
transactions in furtherance of the Chapter 11 Plan, including without limitation
TWC's sale to the Company of the Company headquarters building;
WHEREAS, the Chapter 11 Plan and a purchase and sale agreement ("Claims
Purchase Agreement") between TWC and Purchaser contemplate a purchase by
Purchaser of certain unsecured claims against the Company that are held by TWC
("TWC Claims");
WHEREAS, the Chapter 11 Plan contemplates a new investment by Purchaser
in common stock of New WCG to be made in connection with the transactions
contemplated by the Chapter 11 Plan, including without limitation the
transactions contemplated by the Settlement Agreement and the Claims Purchase
Agreement; and
WHEREAS, on the effective date of the Chapter 11 Plan (the "Effective
Date"), New WCG shall be authorized to issue new shares of its common stock to
Purchaser.
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties, covenants and agreements contained herein and in
the Settlement Agreement and the Claims Purchase Agreement, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the parties hereto
hereby agree as follows:
I. SHARE PURCHASE
1.1 Share Purchase. On the terms and subject to the conditions
hereinafter set forth, at the Closing, New WCG will issue and sell to Purchaser,
and Purchaser will purchase from New WCG, for an aggregate price equal to
$150,000,000 (one hundred fifty million dollars) (the "Purchase Price"), newly
issued shares of common stock of New WCG (the
"Common Stock") representing 20.45% of the Common Stock issued and outstanding
as of immediately after the Effective Date, giving effect to the issuance of
Common Stock pursuant to this Agreement, subject to dilution for Common Stock
issued or issuable pursuant to management or employee incentive plans following
the effective date of the Chapter 11 Plan, if any (such shares issued to
Purchaser, the "Shares").
1.2 Purchase Price. The Purchase Price will be payable on the
Closing Date in cash by bank wire transfer of immediate available funds to an
account of New WCG designated by the Company by written notice to Purchaser
delivered at least two business days prior to the Closing Date.
1.3 Closing. The closing of the purchase and sale of the
Shares (the "Closing") will take place at the offices of Xxxxx, Day, Xxxxxx &
Xxxxx, 000 X. 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx at 10:00 a.m. local time on the
date on which all of the conditions (other than the conditions to be satisfied
concurrently with the Closing) set forth in Article V have been satisfied or
waived (or such other date, time and place to which the parties may agree in
writing). The date on which the Closing occurs is the "Closing Date."
1.4 Closing Deliveries. (a) At or prior to the Closing,
Purchaser will deliver to New WCG:
(i) the Purchase Price payable in accordance with Section 1.2;
(ii) a Stockholders Agreement in the form attached hereto as
Exhibit B (the "Stockholders Agreement"), duly executed by Purchaser;
and
(iii) a Registration Rights Agreement in the form attached
hereto as Exhibit C (the "Registration Rights Agreement"), duly
executed by Purchaser.
(b) At or prior to the Closing, New WCG will deliver to
Purchaser:
(i) A validly issued stock certificate evidencing the Shares;
(ii) the Stockholders Agreement duly executed by New WCG; and
(iii) the Registration Rights Agreement duly executed by New
WCG.
II. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Purchaser, except as set
forth in the letter, dated the date hereof, from the Company to Purchaser
specifically referencing this Agreement and delivered prior to the execution of
this Agreement and initialed by the parties hereto (the "Company Disclosure
Letter"), as follows:
2.1 Existence; Authorization, Validity and Effect of
Agreement. The Company is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Delaware and, as of the
Effective Date, New WCG will be a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Nevada.
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Subject to the entry of the Confirmation Order and the occurrence of the
Effective Date, (a) the Company has and New WCG will have the requisite
corporate power and authority to execute and deliver this Agreement and all
agreements and documents contemplated hereby to be executed and delivered by it,
(b) this Agreement and the consummation by the Company and New WCG of the
transactions contemplated hereby have been (or, in the case of New WCG, will be
on or prior to the Effective Date) duly authorized by all requisite corporate
action and, (c) this Agreement has been duly and validly executed and delivered
by the Company and constitutes, and the Stockholders Agreement and the
Registration Rights Agreement (together with this Agreement, referred to
collectively as the "Transaction Documents") contemplated hereby to be executed
and delivered by New WCG (when executed and delivered pursuant hereto) will
constitute, the valid and binding obligations of the Company or New WCG, as
applicable, enforceable against the Company or New WCG, as applicable, in
accordance with their respective terms, except that (i) such enforceability may
be subject to applicable bankruptcy, insolvency or other similar laws now or
hereinafter in effect affecting creditors' rights generally, (ii) the
availability of the remedy of specific performance or injunctive or other forms
of equitable relief may be subject to equitable defenses and would be subject to
the discretion of the court before which any proceeding therefor may be brought,
and (iii) rights to indemnification may be limited by public policy
considerations.
2.2 Capitalization. Immediately following the Effective Date
and upon issuance of the Shares, the Shares will represent 20.45% of the issued
and outstanding common stock of New WCG including giving effect to the issuance
of Shares pursuant to this Agreement, subject to dilution for any Common Stock
issued or issuable by New WCG pursuant to any management or employee incentive
plan and the Common Stock will constitute the only issued and outstanding class
of capital stock of New WCG.
2.3 Validity of Shares, Etc. Each of the Shares when issued to
Purchaser in accordance with the Chapter 11 Plan and this Agreement will be duly
authorized, validly issued, fully paid, non-assessable and free of preemptive
rights. At the Closing, Purchaser will acquire good and valid title to the
Shares, free and clear of any and all liens, claims, security interests,
encumbrances, restrictions on voting or alienation or otherwise, or adverse
interests (collectively, "Liens"), except as may be created by Purchaser, the
Transaction Documents or by applicable securities Laws.
2.4 No Conflict; Required Filings and Consents. (a) The
execution, delivery and performance of this Agreement and the other Transaction
Documents by the Company or New WCG, as applicable, do not, and the consummation
by the Company and New WCG of the transactions contemplated hereby and thereby
will not, (i) conflict with or violate the articles of incorporation or bylaws
or equivalent organizational documents of the Company or any of its Subsidiaries
or New WCG, as applicable (as they may be amended or adopted pursuant to the
Chapter 11 Plan, as applicable), (ii) subject to the entry of the Confirmation
Order and the occurrence of the Effective Date, conflict with or violate any
domestic or foreign statute, rule, regulation or other legal requirement ("Law")
or order, judgment, injunction or decree ("Order") applicable to the Company or
any of its Subsidiaries or New WCG or by which any property or asset of the
Company or any of its Subsidiaries is (or New WCG will be) bound or affected or
(iii) subject to the entry of the Confirmation Order and the occurrence of the
Effective Date and the implementation of the transactions contemplated by the
Chapter 11 Plan, conflict with or
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violate or result in a breach or default under any contract, agreement or
instrument binding upon the Company or any of its Subsidiaries or New WCG,
except, in the case of clauses (ii) and (iii), for any such conflicts,
violations, breaches or defaults that, individually or in the aggregate, would
not have a Company Material Adverse Effect.
(b) The execution and delivery of this Agreement and the other
Transaction Documents by the Company or New WCG, as applicable, does not, and
the performance of this Agreement and the other Transaction Documents and the
consummation by the Company and New WCG of the transactions contemplated hereby
and thereby will not, require any consent, approval, authorization or permit of,
or filing with or notification to, any governmental or regulatory authority,
domestic or foreign, including without limitation any quasi-governmental,
supranational, statutory, environmental entity and any stock exchange, court or
arbitral body (each a "Governmental Entity"), except (i) for (A) the applicable
notification requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended, if any, and the rules and regulations thereunder (the "HSR
Act"), and (B) the entry of the Confirmation Order and (ii) where the failure to
obtain any such consent, approval, authorization or permit, or to make any such
filing or notification, would not, individually or in the aggregate, have a
Company Material Adverse Effect.
2.5 SEC Documents; Forecasts. The Company has timely filed,
and on the Closing Date will have timely filed, all forms, reports and documents
required to be filed by it with the Securities and Exchange Commission (the
"SEC") since April 23, 2001. All Company Reports, as of their respective dates,
to the Knowledge of the Company (a) complied, or will comply, in all material
respects with the applicable requirements of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and the rules and regulations thereunder
and (b) did not, and will not, contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements made therein, in the light of the circumstances under which
they were made, not misleading. The representation in the preceding sentence
does not apply to (a) any misstatement or omission in (i) any Company Report
filed prior to the date of this Agreement which was superseded by a subsequent
Company Report filed prior to the date of this Agreement or (ii) any Company
Report filed after the date of this Agreement which is superseded by a
subsequent Company Report filed prior to the Closing Date or (b) any financial
forecasts included in the Company Reports. To the Knowledge of the Company, the
consolidated financial statements of the Company included in the Company Reports
were prepared in accordance with United States generally accepted accounting
principles applied on a consistent basis during the periods involved (except as
may be indicated in the notes thereto) and fairly present the consolidated
financial position of the Company and its Subsidiaries, as of the dates thereof
(subject, in the case of any unaudited statements, to the absence of footnotes
and to normal year-end audit adjustments). As of the time of the filing of the
relevant Company Report, to the Knowledge of the Company, the financial
forecasts included in the Company Reports (as qualified and limited in the
Company Reports) were made by management of the Company in good faith and on a
reasonable basis, except for any failure to make the financial forecasts in good
faith and on a reasonable basis that would not have a Company Material Adverse
Effect. No Subsidiary of the Company is currently required to file any periodic
reports with the SEC under the Exchange Act.
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2.6 No Brokers. The Company has not entered into any contract,
arrangement or understanding with any Person or firm which may result in the
obligation of the Company or Purchaser to pay any investment banker's or
finder's fees, brokerage or agent's commissions or other like payments in
connection with the negotiations leading to this Agreement or the consummation
of the transactions contemplated hereby, except that the Company has retained
The Blackstone Group as its financial advisor, the arrangements and a copy of
the engagement letter have been disclosed or provided, as applicable, to
Purchaser prior to the date hereof. The Company, New WCG or one of their
Subsidiaries will pay all amounts owed pursuant to the foregoing arrangements.
2.7 State Takeover Statutes. The board of directors of the
Company (the "Company Board") has approved this Agreement and the transactions
described herein and in the Chapter 11 Plan and such approval is sufficient to
render inapplicable to this Agreement and such transactions, the restrictions of
Section 203 of the Delaware General Corporation Law (the "DGCL"), and,
accordingly such Section 203 does not apply to any such transactions. Prior to
the issuance of Shares but following any incorporation of the Company as a
Nevada corporation, the Board of Directors of New WCG shall have approved this
Agreement and the transactions described herein and in the Chapter 11 Plan and
such approval, together with the applicable provisions in the Certificate of
Incorporation attached hereto as Exhibit D, shall be sufficient to render the
restrictions of Sections 78.378, 3.789, 3.790, 3.791, 3.792 and 78.438 of the
Nevada General Corporation Law ("NGCL") inapplicable to this Agreement and such
transactions and any future (i) acquisitions of voting securities of New WCG by
the Purchaser or (ii) "combinations" (as defined in Section 78.438 of the NGCL)
between the Purchaser and New WCG. There is no other provision of the DGCL, the
NGCL or the Company's or New WCG's bylaws or charter under which special voting
or waiting period requirements would become applicable, or under which Purchaser
would not have rights possessed by other stockholders, in each case had New WCG
issued to Purchaser all New WCG securities contemplated herein prior to the date
hereof.
2.8 Scope of Company Representations. Except as and to the
extent expressly set forth in this Agreement (together with the schedules hereto
and the agreements and certificates contemplated hereby), the Company makes no
representations or warranties whatsoever, and disclaims all liability and
responsibility for any representation, warranty, statement made or information
communicated (orally or in writing) to the Purchaser (including, but not limited
to, the Information Memorandum furnished to Purchaser in connection with its
consideration of an investment in the Company and any opinion, information or
advice which may have been provided to the Purchaser or any of its Affiliates,
by any officer, stockholder, director, employee, engineering or accounting firm,
legal counsel or any other agent, consultant or representative of such party, as
applicable).
III. REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to the Company as follows:
3.1 Existence; Authorization, Validity and Effect of
Agreement. Purchaser is a corporation duly formed, validly existing and in good
standing under the laws of the State of New York. Purchaser has all requisite
corporate power and authority to execute and deliver this
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Agreement and all agreements and documents contemplated hereby and thereby to be
executed by it. This Agreement and the consummation by Purchaser of the
transactions contemplated hereby have been duly and validly authorized by all
requisite corporate action. This Agreement constitutes, and all Transaction
Documents contemplated hereby to be executed and delivered by Purchaser (when
executed and delivered pursuant hereto) will constitute, the valid and binding
obligations of Purchaser, enforceable against it in accordance with their
respective terms, except that (i) the enforceability hereof and thereof may be
subject to applicable bankruptcy, insolvency or other similar laws now or
hereinafter in effect affecting creditors' rights generally, (ii) the
availability of the remedy of specific performance or injunctive or other forms
of equitable relief may be subject to equitable defenses and would be subject to
the discretion of the court before which any proceeding therefor may be brought,
and (iii) rights to indemnification may be limited by public policy
considerations.
3.2 No Conflict; Required Filings and Consents. (a) The
execution, delivery and performance of this Agreement and the other Transaction
Documents by Purchaser do not, and the consummation by Purchaser of the
transactions contemplated hereby and thereby will not, (i) conflict with or
violate the articles of incorporation or bylaws or equivalent organizational
documents of Purchaser or any of its Subsidiaries, (ii) conflict with or violate
any Law or Order applicable to Purchaser or any of its Subsidiaries or by which
any property or asset of Purchaser or any of its Subsidiaries is bound or
affected or (iii) conflict with or violate or result in a breach or default
under any contract, agreement or instrument binding upon Purchaser or any of its
Subsidiaries, except, in the case of clauses (ii) and (iii), for any such
conflicts, violations, breaches or defaults that, individually or in the
aggregate, would not have a Purchaser Material Adverse Effect.
(b) The execution and delivery of this Agreement and the other
Transaction Documents by Purchaser does not, and the performance of this
Agreement and the consummation of the transactions contemplated hereby and
thereby by it will not, require any consent, approval, authorization or permit
of, or filing with or notification to, any Governmental Entity (other than the
Federal Communications Commission or any state public utility commission, as to
each of which no representation or warranty is made), except (i) for (A)
applicable requirements, if any, of the Exchange Act, and (B) the applicable
notification requirements of the HSR Act, and (ii) where failure to obtain such
consents, approvals, authorizations or permits, or to make such filings or
notifications, would not, individually or in the aggregate, have a Purchaser
Material Adverse Effect.
3.3 No Brokers. Purchaser has not entered into any contract,
arrangement or understanding with any Person or firm which may result in the
obligation of the Company, New WCG or any of their Subsidiaries to pay any
investment banker's or finder's fees, brokerage or agent's commissions or other
like payments in connection with the negotiations leading to this Agreement or
the consummation of the transactions contemplated hereby, any such amounts to be
the sole liability of Purchaser.
3.4 Sufficient Funds. Purchaser has sufficient funds available
to pay the Purchase Price in cash at the Closing.
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3.5 Investment Intent. Purchaser is purchasing the Shares to
be purchased by it for its own account and for investment purposes, and does not
intend to redistribute the Shares (except in a transaction or transactions
exempt from registration under the federal and state securities laws or pursuant
to an effective registration statement under such laws). Purchaser acknowledges
that the Shares have not been registered under the Securities Act of 1933, as
amended (the "Securities Act"), or any state blue sky or securities Laws and
that the transfer of the Shares may be subject to compliance with such Laws (in
addition to the restrictions set forth in the Stockholders Agreement).
3.6 Investor Sophistication; Etc. Purchaser is a sophisticated
investor and has such knowledge and experience in financial, business and
investment matters as to be capable of evaluating the merits and risks of an
investment in the Shares. Purchaser was not organized for the specific purpose
of acquiring the Shares. Purchaser is not an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
3.7 Ownership of Company Securities. As of the date of this
Agreement, Purchaser does not beneficially own any (a) Claims or (b)
indebtedness or equity securities of any WCG Company or any direct or indirect
options, warrants or other rights to acquire, or any security convertible into
or exchangeable for, any indebtedness or equity securities of any WCG Company.
3.8 No Additional Representations. Purchaser acknowledges that
it and its representatives have received or been afforded the opportunity to
review prior to the date hereof all written materials which the Company was
requested to deliver or make available, as the case may be, to Purchaser
pursuant to this Agreement on or prior to the date hereof. Purchaser
acknowledges that it and its representatives have been permitted full and
complete access to the books and records, tax returns, contracts, insurance
policies (or summaries thereof) and other properties and assets of the Company
and its Subsidiaries that it and its representatives have desired or requested
to see or review, and that it and its representatives have had a full
opportunity to meet with the officers and employees of the Company. Purchaser
has no Knowledge of any facts or circumstances that could reasonably be expected
to constitute a breach of the representations and warranties of the Company in
Article II of this Agreement.
3.9 Xxxxxxxx Companies Transactions. Purchaser has disclosed
to the Company the terms of all agreements, arrangements and understandings,
whether oral or written, between Purchaser and any of its Affiliates or their
respective officers, directors or employees, on the one hand, and The Xxxxxxxx
Companies, Inc. or any of its Affiliates or their respective officers,
directors, employees or representatives, on the other hand, that involve or
relate to the Company or any of its Subsidiaries or their respective officers,
directors, employees or representatives. Purchaser has provided to the Company
true and correct copies of all such agreements, arrangements and understandings
that are in written form.
IV. COVENANTS
4.1 Inspection of Records. From the date hereof to the Closing
Date, the Company will (i) allow all designated officers, attorneys, accountants
and other representatives of Purchaser reasonable access at reasonable times to
the officers, key employees, accountants
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and other representatives of the Company and its Subsidiaries and the books and
records of the Company and its Subsidiaries and (ii) furnish to Purchaser and
its counsel, financial advisors, auditors and other authorized representatives
such financial and operating data and other information as such Persons may
reasonably request.
4.2 Confidentiality. Information obtained by Purchaser and the
Company pursuant to Section 4.1 hereof shall be subject to the provisions of the
Confidentiality Agreement between the Company and Purchaser, provided that such
Agreement shall automatically terminate as of the Closing.
4.3 Publicity. The initial press release relating to this
Agreement will be in the form of a joint press release previously agreed between
Purchaser and the Company and thereafter the Company (or New WCG as applicable)
and Purchaser will, subject to their respective legal obligations (including
requirements of stock exchanges and other similar regulatory bodies), consult
with each other, and use reasonable efforts to agree upon the text of any press
release, before issuing any such press release or otherwise making public
statements with respect to the transactions contemplated hereby and in making
any filings with any Governmental Entity or with any national securities
exchange with respect thereto.
4.4 Further Action. Each of the parties hereto will use all
commercially reasonable efforts to take, or cause to be taken, all appropriate
action, do or cause to be done all things reasonably necessary, proper or
advisable under applicable law, and execute and deliver such documents and other
papers, as may be required to carry out the provisions of this Agreement and the
other documents contemplated hereby and make effective the transactions
contemplated hereby and thereby. Nothing in this Section 4.4 will limit or
affect actions permitted to be taken pursuant to Section 4.6 or elsewhere in
this Agreement.
4.5 HSR Act. The Company and Purchaser shall, as soon as
practicable, file Notification and Report Forms under the HSR Act with the
Federal Trade Commission (the "FTC") and the Antitrust Division of the
Department of Justice (the "Antitrust Division") and shall use their respective
reasonable efforts to respond as promptly as practicable to all inquiries
received from the FTC or the Antitrust Division for additional information or
documentation.
4.6 No Solicitations. (a) From the date hereof until the
earlier of the Closing and the termination of this Agreement in accordance with
Section 7.1 or 7.2 (the "Non-Solicitation Period"), the Company agrees that it
will not, and that it will cause its officers, agents, representatives,
affiliates, stockholders and any other person acting on its behalf not to,
directly or indirectly, solicit offers, inquiries or proposals for any
transaction which would render impossible or impracticable the transactions
between Purchaser and the Company contemplated herein on the terms herein (any
such offer, inquiry or proposal, a "Competing Proposal"), or accept or agree to,
or otherwise cooperate in any way with any offer, inquiry or proposal relating
to a Competing Proposal, provided, however, that prior to the Effective Date, in
response to a bona fide written inquiry, offer or proposal relating to a
Competing Proposal that in the good faith opinion of the Company Board, based on
the advice of the Company's financial advisor, could reasonably be expected to
result in a Superior Proposal, the Company may: (i) furnish such information or
access with respect to the Company to the person making such inquiry, offer or
proposal relating to a Competing Proposal pursuant to a customary
confidentiality agreement
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with such person, or (ii) participate in negotiations regarding such Competing
Proposal, but in each case only if the Company complies with Section 4.6(b) with
respect to such proposal.
For purposes of this Agreement, a "Superior Proposal" means a bona fide
written Competing Proposal made by a third party on terms which the Company
Board determines, in good faith, based on the advice of its financial advisor
and in light of all relevant circumstances are financially superior to those
provided for pursuant to this Agreement in the absence of any modifications
hereto and that is reasonably likely to be consummated.
(b) If, during the Non-Solicitation Period, the Company
receives from any person any offer, inquiry or proposal relating to a Competing
Proposal, or information request intended to facilitate any Competing Proposal,
the Company will promptly (and, in any event, within 24 hours) advise Purchaser
in writing of such offer, inquiry, proposal or information request, and deliver
copies of any written materials received by the Company at any time in
connection therewith, and keep Purchaser fully informed of the timing and
contents of any further written or oral communications related thereto, and
provide Purchaser with copies of any such communications that are in writing.
Prior to accepting a Competing Proposal or terminating this Agreement pursuant
to Section 7.2(e), the Company shall provide Purchaser with (i) five business
days prior notice of its intention to accept a Competing Proposal and (ii) the
terms of such Competing Proposal.
(c) Without limiting the generality or effect of the
Confidentiality Agreement, as amended by Section 8.15, during the
Non-Solicitation Period, the Purchaser agrees that it will not, and that it will
cause its officers, agents, representatives, affiliates, stockholders and any
other person acting on its behalf not to, directly or indirectly, solicit or
make any Competing Proposal, or accept or agree to, or otherwise cooperate in
any way with any offer, inquiry or proposal relating to a Competing Proposal.
(d) Notwithstanding Section 4.6(c) or Section 4 of the
Confidentiality Agreement, in response to any Competing Proposal, the Purchaser
may make an alternative proposal (an "Alternative Proposal"), provided, however,
that the Purchaser may not consummate the Alternative Proposal without the prior
written consent of the Company Board specifically expressed in a resolution
approved by a majority of the directors of the Company. The Purchaser will
promptly (and, in any event, within 24 hours) advise the Company in writing of
any Alternative Proposal made in response to a Competing Proposal and deliver
copies of any written proposals made by it at any time in connection therewith,
and keep the Company fully informed of the timing and contents of any further
written or oral communications related thereto and provide the Company with
copies of any such communications that are in writing.
4.7 5% Holders. Within 20 business days after the date of this
Agreement, the Company will seek an order from the Bankruptcy Court enjoining
all holders of the Company's Senior Redeemable Notes ("Senior Notes") from
acquiring at any time prior to the Effective Date any Senior Notes to the extent
that such an acquisition would result in such person beneficially owning more
than $200 million in face amount of Senior Notes.
4.8 Employee Plans and Compensation. Without the prior written
consent of Purchaser (which consent will not be unreasonably withheld or
delayed), between the date hereof
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and the Closing, the Company will not (i) adopt any new benefit or compensation
plan, except as required by law, that provides for a material increase in the
level of compensation or benefits to any employee of the Company, provided,
however, that in no event will regularly scheduled compensation increases in the
ordinary course of business and consistent with past practice be a breach of
this Section 4.8 or (ii) increase the compensation or employee benefits of the
persons listed on Schedule 4.8(a) hereto, except pursuant to the terms of any of
the plans, agreements and arrangements listed on Schedule 4.8(b) hereto without
any further amendment thereto, or as required by law.
4.9 Reasonable Efforts to Close. The parties agree to use
their reasonable efforts to take, or cause to be taken, all actions, and to do,
or cause to be done, and to assist and cooperate with the other parties in
doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the transactions
contemplated by this Agreement, including without limitation using reasonable
efforts to cause the conditions to Closing to be satisfied as promptly as
practicable. Between the date hereof and the Closing, each of the Company and
the Purchaser will use all commercially reasonable efforts to obtain (i) the
consent of SBC Communications Inc. ("SBC") to the transaction that occurred on
April 23, 2001 pursuant to which the stock in the Company held by WMB was
dividended to WMB's shareholders (the "Spinoff") or (ii) if directed by the
Purchaser, an order or judgment from a court of competent jurisdiction finding
that the Spinoff is not a change in the "Control" of WCL within the meaning of
the Master Alliance Agreement between SBC and WCL dated February 12, 1999. Each
of Purchaser and the Company agrees that it shall consult with the other with
respect to the obtaining of all approvals of any and all third parties and
Governmental Entities necessary or advisable to consummate the transactions
contemplated by this Agreement, and each party shall keep the other reasonably
apprised of the status of any material matters relating to completion of the
transactions contemplated herein. Nothing set forth in this Section 4.9 will
limit or affect actions permitted to be taken pursuant to Section 4.6 or
elsewhere in this Agreement.
V. CONDITIONS TO CLOSING
5.1 Conditions to Each Party's Obligations. The respective
obligations of each party to consummate the transactions contemplated by this
Agreement are subject to the fulfillment at or prior to the Closing Date of the
following conditions:
(a) All conditions precedent to the effectiveness of the
Chapter 11 Plan shall have been satisfied or waived pursuant to the provisions
therein.
(b) The waiting period (and any extension thereof) if any,
applicable to the issuance and sale of the Shares under the HSR Act shall have
been terminated or shall have expired.
(c) No Order or Law enacted, entered, promulgated, enforced or
issued by any court of competent jurisdiction or other Governmental Entity or
other legal restraint or prohibition preventing the consummation of the
transactions contemplated by this Agreement shall be in effect.
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(d) All representations and warranties of the other party
hereto shall be true and correct in all material respects on the Closing Date,
except for representations and warranties qualified as to materiality, Company
Material Adverse Effect or Purchaser Material Adverse Effect, which shall be
true and correct in all respects on the Closing Date.
(e) All covenants required to be performed by the other party
hereto shall have been complied with in all material respects.
(f) The Bankruptcy Court shall have approved the Settlement
Agreement.
(g) Each party shall have received from the other party a
certificate of an executive officer of such other party certifying to the
satisfaction of the conditions set forth in (d) and (e) above.
(h) Each party shall have received such other documents and
instruments from the other party as it shall reasonably request to effect the
consummation of the transactions contemplated herein.
5.2 Conditions to Obligations of the Company. The obligations
of the Company to consummate the transactions contemplated by this Agreement are
subject to the satisfaction or waiver, at or prior to the Closing of the
following conditions:
(a) That all items set forth in Section 1.4(a) hereof shall
have been delivered to New WCG.
(b) The Agreement dated April 19, 2002 among the Company, CG
Austria, Inc., other Company Subsidiaries, the holders of Senior Notes and the
Bank Debt lenders, shall not have been terminated by the holders of Senior Notes
or Bank Debt lenders.
(c) The Chapter 11 Plan shall be in the form attached as
Exhibit A hereto, including without limitation the agreements attached thereto
as Plan Documents, in all material respects or as otherwise approved by the
Company and the Chapter 11 Plan shall have been implemented in a manner at least
as favorable to New WCG in all material respects as contemplated thereby,
including as contemplated by such agreements.
5.3 Conditions to Obligations of Purchaser. The obligations of
Purchaser to consummate the transactions contemplated by this Agreement are
subject to the satisfaction or waiver, at or prior to the Closing of the
following conditions:
(a) All items set forth in Section 1.4(b) hereof shall have
been delivered to Purchaser.
(b) The Company Rights Agreement, dated as of September 30,
1999, between the Company and The Bank of New York, as rights agent shall have
been terminated and no stockholder or former stockholder of the Company shall
have any rights under the Company Rights Agreement or receive any distribution
under the Chapter 11 Plan in respect of any rights under the Company Rights
Agreement.
11
(c) The Certificate of Incorporation and Bylaws of New WCG in
the form attached hereto as Exhibits D and E, respectively, shall have been
adopted, the Certificate of Incorporation shall have been filed with and
accepted by the Secretary of State of the State of Delaware and such Certificate
of Incorporation and Bylaws shall be in full force and effect.
(d) SBC shall have consented to (i) the purchase of Shares by
Purchaser pursuant to this Agreement, (ii) the transactions contemplated by the
Chapter 11 Plan, and (iii) the Spinoff, such consents to be in form and
substance reasonably satisfactory to Purchaser, with Purchaser's approval not to
be unreasonably withheld or delayed, provided, however, that this condition may
be satisfied as to any of clauses (i), (ii) or (iii) if Purchaser seeks or
directs the Company to seek, and subsequently, a court of competent jurisdiction
shall have entered, an order reasonably satisfactory to Purchaser providing that
SBC does not have and will not have a right to terminate the Master Alliance
Agreement between SBC and WCL, dated February 12, 1999 by reason of the
transactions contemplated by clause (i), (ii) or (iii), as applicable.
(e) The Purchaser Designees, as such term is defined in the
Stockholders Agreement, shall have been appointed to the Board of Directors of
New WCG and any committees thereof in accordance with the Stockholders Agreement
and the Chapter 11 Plan.
(f) The Chapter 11 Plan shall be in the form attached as
Exhibit A hereto, including without limitation the agreements attached thereto
as Plan Documents, in all material respects or as otherwise approved by
Purchaser and the Chapter 11 Plan shall have been implemented in a manner at
least as favorable to the Purchaser in all material respects as contemplated
thereby, including as contemplated by such agreements.
(g) The Restated Credit Documents shall be reasonably
acceptable to Purchaser in all material respects, such acceptance not to be
unreasonably withheld or delayed.
VI. INDEMNIFICATION
6.1 Indemnification of Purchaser. (a) Right of
Indemnification. Subject to the terms of this Article VI, if the Closing occurs,
the Company covenants and agrees to cause New WCG to indemnify and hold harmless
each of Purchaser and its Affiliates and their respective officers, directors,
employees, attorneys, advisors and agents (collectively, the "Indemnified
Parties"), from and against all losses, claims, liabilities, damages, costs
(including without limitation costs of preparation and reasonable attorneys'
fees and charges) and reasonable expenses (including without limitation expenses
incurred in connection with investigating, preparing or defending any action,
claim or proceeding, whether or not in connection with pending or threatened
litigation in which any Indemnified Party is a party) or actions in respect
thereof (each such individual occurrence is hereinafter referred to as a "Loss"
and collectively, as "Losses") suffered by any Indemnified Party, directly or
indirectly, arising out of any inaccuracy in or breach of any of the
representations, warranties, covenants or agreements made by the Company in this
Agreement.
(b) Threshold and Cap. No Indemnified Party will be entitled
to indemnification pursuant to this Section 6.1 with respect to any Losses in
respect of inaccuracies in or breaches of representations and warranties unless
and until the aggregate amount of all such
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Losses suffered by Indemnified Parties in the aggregate exceeds $1 million (the
"Threshold"); provided, however, that the aggregate liability of New WCG with
respect to any Losses in respect of inaccuracies in or breaches of
representations and warranties shall not exceed $150 million in the aggregate
(the "Cap").
(c) Survival. No Indemnified Party will be entitled
indemnification under this Section 6.1 for any Indemnification Claim unless and
to the extent that, prior to the second anniversary of the date of the Closing,
such Indemnified Party shall have delivered to New WCG a Notice of Claim setting
forth the amount of the Loss or Losses suffered, or which may be suffered, by an
Indemnified Party as a result of such Indemnification Claim and a reasonably
detailed description of the facts giving rise to such Indemnification Claim.
6.2 Procedure for Claims. (a) Notice of Claim. After obtaining
knowledge of any claim or demand which has given rise to, or could reasonably
give rise to, a claim for indemnification under this Article VI (referred to
herein as an "Indemnification Claim"), an Indemnified Party will give written
notice to New WCG of such Indemnification Claim ("Notice of Claim"). A Notice of
Claim will be given with respect to all Indemnification Claims, whether or not
the Threshold has been reached; provided, however, that the failure to give a
Notice of Claim to New WCG will not relieve New WCG from any liability that it
may have to an Indemnified Party hereunder to the extent that New WCG is not
prejudiced by such failure. The Notice of Claim will be required to set forth
the amount (or a reasonable estimate, if then practicable) of the Loss or Losses
suffered, or which may be suffered, by an Indemnified Party as a result of such
Indemnification Claim, whether or not the Threshold has been reached, and a
brief description of the facts giving rise to such Indemnification Claim. The
Indemnified Party will furnish to New WCG such information (in reasonable
detail) it may have with respect to such Indemnification Claim (including copies
of any summons, complaint or other pleading which may have been served on it and
any written claim, demand, invoice, billing or other document evidencing or
asserting the same).
(b) Third Party Claim. (i) If the claim or demand set forth in
the Notice of Claim is a claim or demand asserted by a third party (a "Third
Party Claim"), New WCG will have 15 calendar days after the date of receipt by
New WCG of the Notice of Claim (the "Notice Date") to notify the Indemnified
Parties in writing of the election by New WCG to defend the Third Party Claim on
behalf of the Indemnified Parties.
(ii) If New WCG elects to defend a Third Party Claim on behalf
of the Indemnified Parties, the Indemnified Parties will make available
to New WCG and their agents and representatives all records and other
materials in their possession which are reasonably required in the
defense of the Third Party Claim, and New WCG will pay all reasonable
expenses payable in connection with the defense of the Third Party
Claim as they are incurred (subject to any applicable limitations set
forth in Section 6.1).
(iii) In no event may New WCG settle or compromise any Third
Party Claim without the Indemnified Parties' prior written consent,
which may not be unreasonably withheld or delayed.
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(iv) If New WCG elects to defend a Third Party Claim, the
Indemnified Parties will have the right to participate in the defense
of the Third Party Claim, at the Indemnified Parties' expense (and
without the right to indemnification for such expense under this
Agreement), provided, however, that the reasonable fees and expenses of
counsel retained by the Indemnified Parties will be at the expense of
New WCG if (A) the use of the counsel chosen by New WCG to represent
the Indemnified Parties would present such counsel with a conflict of
interest; (B) the parties to such proceeding include both Indemnified
Parties and New WCG and there may be legal defenses available to
Indemnified Parties which are different from or additional to those
available by New WCG; (C) within 10 calendar days after being advised
by New WCG of the identity of counsel to be retained to represent
Indemnified Parties, they shall have objected to the retention of such
counsel for valid reason, and New WCG shall not have retained different
counsel satisfactory to the Indemnified Parties; or (D) New WCG shall
have authorized the Indemnified Parties to retain a single separate
counsel (plus one local counsel in each applicable jurisdiction) at the
expense of New WCG, such authorization to be made by the directors who
are not designees of Purchaser or its Affiliates.
(v) If New WCG does not elect to defend a Third Party Claim,
or does not defend a Third Party Claim in good faith, the Indemnified
Parties will have the right, in addition to any other right or remedy
it may have hereunder, at the sole and exclusive expense of New WCG, to
defend such Third Party Claim.
(c) Cooperation in Defense. The Indemnified Parties will
cooperate with New WCG in the defense of a Third Party Claim and make reasonably
available the facts relating to the Third Party Claim. Subject to the foregoing,
(i) no Indemnified Party will have any obligation to participate in the defense
of or to defend any Third Party Claim and (ii) no Indemnified Parties' defense
of, or their participation in, the defense of any Third Party Claim will in any
way diminish or lessen their right to indemnification as provided in this
Agreement.
6.3 Indemnification of New WCG. If the Closing occurs,
Purchaser will indemnify and hold harmless the Company, New WCG and its their
Subsidiaries and their respective current and future officers, directors,
employees and agents from and against all Losses suffered by any of them as a
result of any inaccuracy in or breach of any of the representations, warranties
or covenants made by Purchaser hereunder. The procedures for and limits on
indemnification in respect of the obligations of Purchaser under this Section
6.3 will be the same as those set forth in Sections 6.1 and 6.2.
6.4 Exclusivity of Indemnification; Limitation on Damages. (a)
The Purchaser hereby acknowledges and agrees that its (and any other Indemnified
Party's) sole and exclusive remedy with respect to any and all Losses relating
to this Agreement, any document or certificate delivered in connection herewith
(other than the Stockholders Agreement or Registration Rights Agreement), the
transactions contemplated hereby, or the purchase of the Shares, shall be in
each case pursuant to either (A) the indemnification provisions set forth in
this Article VI (collectively, the "Purchaser Indemnity Rights") if the Closing
occurs or (B) the Liquidated Damages Payment pursuant to Section 7.4, if this
Agreement is terminated pursuant to Section 7.1 or 7.2. In furtherance of the
foregoing, Purchaser hereby waives, from and after the Closing, to the fullest
extent permitted under applicable law, any and all rights, claims and
14
causes of action (other than claims of, or causes of action arising from, fraud)
it or any of its Affiliates has or may have at any time prior to the Closing or
termination of this Agreement in accordance with Sections 7.1 or 7.2 against the
Company, New WCG and their respective Affiliates arising under or based upon
this Agreement, any document or certificate delivered in connection herewith
(other than the Stockholders Agreement and Registration Rights Agreement), or
the purchase of the Shares, except pursuant to this Article VI or Section 7.4,
as applicable.
(b) In no event will any Indemnified Party or New WCG be
entitled to indemnification hereunder for any Losses (i) that arise from
indirect, consequential or punitive damages (including, but not limited to, lost
profits, loss of use, damage to goodwill or loss of business) or (ii) suffered
or incurred by any Indemnified Party in connection with or as a result of any
Xxxxxxxx Companies Transaction or in respect of the acquisition or ownership of
any Securities that any Indemnified Party acquires or holds as a result of the
Xxxxxxxx Companies Transactions. "Xxxxxxxx Companies Transaction" means any
transaction between Purchaser or any of its Affiliates or their respective
officers, directors, employees or representatives and The Xxxxxxxx Companies,
Inc. or any of its Affiliates that involves or relates to the Company, New WCG
or any of their Subsidiaries.
6.5 Survival of Indemnification. The provisions of this
Article VI will survive the Closing of the transactions contemplated hereby.
VII. TERMINATION AND WAIVER
7.1 Termination by Mutual Consent. This Agreement may be
terminated at any time prior to the Closing Date by the mutual consent of
Purchaser and the Company.
7.2 Termination by Either Purchaser or Company. This Agreement
may be terminated:
(a) by either Purchaser or the Company by written notice to
the other if the Closing shall not have occurred on or before February 28, 2003,
provided, however, that no party may terminate this Agreement pursuant to this
Section 7.2(a) if such party's failure to fulfill any of its obligations under
this Agreement shall have been the reason that the Closing shall not have
occurred on or before said date;
(b) by either Purchaser or the Company by written notice to
the other if any Governmental Entity shall have issued an order, decree or
ruling or taken any other action permanently enjoining, restraining or otherwise
prohibiting the consummation of the purchase of Shares by Purchaser or any of
the other transactions contemplated by this Agreement and such order, decree or
ruling or other action shall have become final and nonappealable;
(c) by Purchaser by written notice to the Company if the
Chapter 11 Case is dismissed or converted to a case under Chapter 7 of the
Bankruptcy Code or a Chapter 11 trustee is appointed;
(d) by Purchaser by written notice to the Company if (i) the
Purchaser's rights under Section 7.4 are held invalid or unenforceable, in whole
or in any material part or (ii) the
15
Bankruptcy Court approves the consummation of the transactions contemplated by
any Competing Proposal;
(e) subject to Section 4.6(b), by the Company by written
notice to Purchaser if the Company Board has determined in good faith, based on
the advice of its financial advisor and in light of all relevant circumstances
that the terms of a Competing Proposal are financially superior to those
provided for pursuant to this Agreement in the absence of any modifications
hereto and that is reasonably likely to be consummated; or
(f) by either Purchaser or the Company, as the case may be, by
written notice to the other, if there shall have been a default or breach by the
other party of such other party's representations and warranties, covenants,
agreements, terms or conditions set forth in this Agreement, or in connection
with the transactions contemplated hereby, which default or breach shall be
incapable of being cured or, if capable of being cured shall not have been cured
with 30 business days following receipt by the defaulting or breaching party
from the other party hereto of written notice of such default or breach
(specifying in reasonable detail the claimed default or breach and demand of its
cure or satisfaction) and which default or breach would result in a failure of
the condition set forth in Section 5.1(d) or 5.1(e), as applicable.
7.3 Effect of Termination. In the event of the termination of
this Agreement pursuant to Sections 7.1 or 7.2 hereof by Purchaser, on the one
hand, or the Company, on the other hand, written notice thereof shall promptly
be given to the other party specifying the provision hereof pursuant to which
such termination is made, and this Agreement shall become void and have no
effect, and there shall be no liability hereunder on the part of Purchaser or
the Company or New WCG, provided, however, that Sections 4.2 and 8.14 and WCL's
obligation to pay the Liquidated Damages Payment pursuant to Section 7.4 shall
survive any such termination, in the case of Sections 4.2 and 8.14, for so long
as the Confidentiality Agreement shall remain in effect and provided further,
however, that nothing in this Section 7.3 shall relieve Purchaser of liability
for any breach of this Agreement. The Confidentiality Agreement shall, except as
provided herein, remain in effect during the term of this Agreement and
following its termination; provided, however, that such agreement will
automatically terminate as of the Closing.
7.4 Termination Payments. In the event this Agreement is
terminated by the Company in accordance with Section 7.2(a), (b) or (e) or by
the Purchaser in accordance with Section 7.2(a), (b), (c), (d) or (f), in each
case other than by reason of (i) Purchaser's failure to fulfill any of its
obligations under this Agreement, (ii) Purchaser's mutual agreement with TWC to
terminate the Claims Purchase Agreement, or (iii) the termination of the Claims
Purchase Agreement as a result of Purchaser's failure to comply in all material
respects with the representations, warranties, agreements and covenants
contained therein, then WCL shall be obligated to pay Purchaser, as liquidated
damages for any breach of a representation, warranty, covenant or agreement of
the Company in this Agreement, a payment (the "Liquidated Damages Payment")
equal to $5,000,000 plus up to an amount equal to $1,000,000 of its reasonable,
out-of-pocket cost and expenses (including expenses of counsel, expenses of
financial advisors, expenses of other consultants, and any anti-trust filing
fees) incurred by Purchaser in connection with this Agreement and the
transactions contemplated hereby. Any Liquidated Damages Payment payable upon
termination of this Agreement shall be earned and payable by WCL to
16
Purchaser immediately upon the earlier of (i) February 28, 2003 and (ii) if any
plan of reorganization of the Company under chapter 11 of the Bankruptcy Code
(other than the Chapter 11 Plan) has been confirmed by a court of competent
jurisdiction, the date one day prior to the anticipated effective date of such
plan. The payment to Purchaser pursuant to this Section 7.4 shall be by wire
transfer of immediately available funds, to such account or accounts as
Purchaser shall designate in writing.
VIII. GENERAL PROVISIONS
8.1 Notices. Any notice or other communication required to be
given hereunder shall be in writing, and sent by reputable courier service (with
proof of service), by hand delivery or by facsimile (followed on the same day by
delivery by courier service (with proof of delivery) or by hand delivery),
addressed as follows:
If to Purchaser:
Leucadia National Corporation
000 Xxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxxxxx
Fax No.: (000) 000-0000
With copies to:
Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxx, Esq.
Xxxxxxx X. Xxxxxxxxxx, Esq.
Fax No: (000) 000-0000
If to the Company or New WCG:
Xxxxxxxx Communications Group, Inc. (or the name of New WCG)
Xxx Xxxxxxxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Attn: P. Xxxxx Xxxxxxx, Jr., Esq.
Fax No.: (000) 000-0000
With copies to:
Xxxxx, Day, Xxxxxx & Xxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxx, Esq.
Fax No.: (000) 000-0000
17
or to such other address as any party will specify by written notice so given,
and such notice will be deemed to have been delivered as of the date so
telecommunicated or personally delivered.
8.2 Assignment; Binding Effect. Neither this Agreement nor any
of the rights, interests or obligations hereunder will be assigned by any party
hereto (whether by operation of Law or otherwise) without the prior written
consent of the other party, except that (a) Purchaser will have the right to
assign to any direct or indirect wholly owned subsidiary of Purchaser any and
all rights and obligations of Purchaser under this Agreement, provided, that any
such assignment will not relieve Purchaser from any of its obligations hereunder
and (b) the Company will, effective as of the Effective Date, assign all of its
rights and obligations under this Agreement to New WCG. Any assignment not
granted in accordance with the foregoing shall be null and void. Subject to the
first and last sentence of this Section 8.2, this Agreement will be binding upon
and will inure to the benefit of the parties hereto and their respective
successors and assigns. Notwithstanding anything contained in this Agreement to
the contrary, (A) the Company's and New WCG's obligations hereunder are subject
to approval by the Bankruptcy Court of the transactions contemplated hereby and
under the other Transaction Documents and (B) except for the provisions of
Article VI, nothing in this Agreement, expressed or implied, is intended to
confer on any Person other than the parties hereto or their respective heirs,
successors, executors, administrators and assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
8.3 Entire Agreement. This Agreement, the Company Disclosure
Letter, and any documents delivered by the parties in connection herewith or
therewith, including the Transaction Documents, and the Confidentiality
Agreement constitute the entire agreement among the parties with respect to the
subject matter hereof and supersede all prior agreements and understandings
among the parties with respect thereto, including, without limitation, any draft
letter of intent or term sheet with respect to the transactions contemplated
herein.
8.4 Amendment. Subject to applicable law, including but not
limited to the requirements of the Bankruptcy Code and the orders of the
Bankruptcy Court, this Agreement may only be amended by an instrument in writing
signed on behalf of each of the parties hereto.
8.5 Governing Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York, without regard
to its conflict of laws principles.
8.6 Counterparts. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered will be an original, but all such counterparts will together
constitute one and the same instrument. Each counterpart may consist of a number
of copies hereof each signed by less than all, but together signed by all of the
parties hereto. A facsimile copy of a signature page shall be deemed to be an
original signature page.
8.7 Headings. Headings of the Articles and Sections of this
Agreement are for the convenience of the parties only, and will be given no
substantive or interpretive effect whatsoever.
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8.8 Certain Definitions/Interpretations. (a) For purposes of
this Agreement:
(i) An "Affiliate" of any Person means another Person that,
directly or indirectly, through one or more intermediaries, controls,
is controlled by, or is under common control with, such first Person;
and, for the purposes of this definition only, "control" (including the
terms "controlling", "controlled by" and "under common control with")
means the possession, direct or indirect, of the power to direct or
cause the direction of the management, policies or activities of a
Person whether through the ownership of securities, by contract or
agency or otherwise; provided that as such term is used in this
Agreement the Purchaser shall not be included as an Affiliate of the
Company;
(ii) "Bank Debt" means obligations of the WCG Companies under
the WCL Credit Agreement, as it may be amended from time to time;
(iii) "Bankruptcy Court" means the United States Bankruptcy
Court for the Southern District of New York or such other court with
proper jurisdiction over the Chapter 11 Case;
(iv) "beneficial owner", "beneficially own", and "beneficial
ownership" have the meanings given to such terms in the Stockholders
Agreement.
(v) "Claims" means claims (as such term is defined under
section 101 of the Bankruptcy Code) with respect to any WCG Company or
any rights to acquire such claims;
(vi) "Company Material Adverse Effect" means any change,
effect, event or condition that has had or could reasonably be expected
to have a material adverse effect on the business, assets, properties,
results of operations or financial condition of the Company, New WCG
and their Subsidiaries, taken as a whole, or that would prevent the
Company from consummating the transactions contemplated hereby;
(vii) "Company Reports" means all forms, reports and documents
filed by the Company with the SEC after January 1, 2002, and any such
forms, reports and documents filed by the Company with the SEC after
the date of this Agreement and until the Closing Date, in each case
under Sections 12(b) or 12(g) of the Exchange Act and the rules and
regulations promulgated thereunder.
(viii) "Confidentiality Agreement" means that agreement by and
between Purchaser and the Company, dated as of May 3, 2002;
(ix) "Confirmation Order" means a final order entered by the
Bankruptcy Court confirming the Chapter 11 Plan;
(x) "Knowledge" means the actual knowledge after reasonable
inquiry of any of Xxxxxx Xxxxxx (Chairman, CEO and President), Xxxxx
Xxxxxxxx (CFO), Xxxxx Xxxxxxx (GC), Xxxxx Xxxxxx (COO), Xxxx Xxxxxxxxx
(COO), Xxxxxx Xxxxxx (Chief People Officer), Xxx Xxxxxxx (Controller),
X.X. Xxxxxxxxx (Vice President - Financial
19
Operations, moving to Vice President - Data Services) (but only for
purposes of the Company's financial forecasts representation in Section
2.5) and Xxxxxx Xxxxxxxxxx (Vice President - Chief of Staff) (but only
for purposes of the Company's financial forecasts representation in
Section 2.5) in the case of the Company and, in the case of the
Purchaser, means the actual knowledge of Purchaser's executive officers
after reasonable inquiry;
(xi) "Person" means an individual, corporation, partnership,
limited liability company, joint venture, association, trust,
unincorporated organization or other entity;
(xii) "Purchaser Material Adverse Effect" means any change,
effect, event or condition that has prevented or materially delayed or
could reasonably be expected to prevent or materially delay Purchaser's
ability to consummate the transactions contemplated hereby;
(xiii) "Securities" means, collectively with Claims, any
indebtedness or equity securities of any WCG Company or any direct or
indirect options, warrants or other rights to acquire, or any security
convertible into or exchangeable for, any indebtedness or equity
securities of any WCG Company;
(xiv) "Subsidiary" when used with respect to any party, means
any corporation or other organization, whether incorporated or
unincorporated, of which such party directly or indirectly owns or
controls more than 50% of the securities or other interests having by
their terms ordinary voting power to elect a majority of the board of
directors or others performing similar functions; and
(xv) "WCG Company" means each of the Company or its
Subsidiaries and its and their respective successors and assigns,
including New WCG.
(b) Capitalized terms used herein and not otherwise defined
shall have the meanings ascribed to such terms in the Chapter 11 Plan.
(c) When a reference is made in this Agreement to an Article,
Section, Exhibit or Annex, such reference will be to an Article or Section of,
or an Annex or Exhibit to, this Agreement unless otherwise indicated. Whenever
the words "include," "includes" or "including" are used in this Agreement, they
will be deemed to be followed by the words "without limitation." The words
"hereof," "herein" and "hereunder" and words of similar import when used in this
Agreement will refer to this Agreement as a whole and not to any particular
provision of this Agreement. All terms used herein with initial capital letters
have the meanings ascribed to them herein and all terms defined in this
Agreement will have such defined meanings when used in any certificate or other
document made or delivered pursuant hereto unless otherwise defined therein. The
definitions contained in this Agreement are applicable to the singular as well
as the plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such term. Any agreement, instrument or statute
defined or referred to herein or in any agreement or instrument that is referred
to herein means such agreement, instrument or statute as from time to time
amended, modified or supplemented, including (in the case of agreements or
instruments) by waiver or consent and (in the case of statutes) by
20
succession of comparable successor statutes and references to all attachments
thereto and instruments incorporated therein. References to a Person are also to
its permitted successors and assigns.
8.9 Waivers. Except as provided in this Agreement, no action
taken pursuant to this Agreement, including without limitation any investigation
by or on behalf of any party, will be deemed to constitute a waiver by the party
taking such action of compliance with any representations, warranties, covenants
or agreements contained in this Agreement. The waiver by any party hereto of a
breach of any provision hereunder will not operate or be construed as a waiver
of any prior or subsequent breach of the same or any other provision hereunder.
At any time prior to the Closing Date, any party hereto may (a) extend the time
for the performance of any of the obligations or other acts of the other parties
hereto, (b) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto, and (c) waive
compliance with any of the agreements or conditions contained herein. Any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed by the party or parties to be bound thereby.
8.10 Severability. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction will, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction. If
any provision of this Agreement is so broad as to be unenforceable, the
provision will be interpreted to be only so broad as is enforceable.
8.11 Jurisdiction; Consent to Service of Process. (a) Each
party hereby irrevocably and unconditionally submits, for itself and its
property, to the exclusive jurisdiction of the Bankruptcy Court, and any
appellate court from any such court, in any suit, action or proceeding arising
out of or relating to this Agreement or the transactions contemplated hereby, or
for recognition or enforcement of any judgment resulting from any such suit,
action or proceeding, and each party hereby irrevocably and unconditionally
agrees that all claims in respect of any such suit, action or proceeding may be
heard and determined in the Bankruptcy Court.
(b) It will be a condition precedent to each party's right to
bring any such suit, action or proceeding that such suit, action or proceeding,
in the first instance, be brought in the Bankruptcy Court, and if each such
court refuses to accept jurisdiction with respect thereto, such suit, action or
proceeding may be brought in any other court with jurisdiction.
(c) No party may move to (i) transfer any such suit, action or
proceeding from the Bankruptcy Court to another jurisdiction, (ii) consolidate
any such suit, action or proceeding brought in the Bankruptcy Court with a suit,
action or proceeding in another jurisdiction, or (iii) dismiss any such suit,
action or proceeding brought in the Bankruptcy Court for the purpose of bringing
the same in another jurisdiction.
(d) Each party hereby irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, (i) any objection
which it may now or hereafter have
21
to the laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement in the Bankruptcy Court, (ii) the defense of an
inconvenient forum to the maintenance of such suit, action or proceeding in any
such court, and (iii) the right to object, with respect to such suit, action or
proceeding, that such court does not have jurisdiction over such party. Each
party irrevocably consents to service of process in any manner permitted by law.
8.12 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING,
CLAIM OR COUNTERCLAIM, WHETHER IN CONTRACT OR TORT, AT LAW OR IN EQUITY, ARISING
OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
8.13 No Strict Construction. The parties hereto have
participated jointly in the negotiation and drafting of this Agreement. In the
event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties hereto, and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any of the provisions of this Agreement.
8.14 Confidentiality Agreement. The Confidentiality Agreement
remains in full force and effect, provided, however, that the Company Board has
given its consent to certain actions and transactions, a copy of which is
attached hereto as Exhibit F.
[Remainder of page intentionally blank]
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EXECUTION COPY
IN WITNESS WHEREOF, the parties have executed this Agreement and caused
the same to be duly delivered on their behalf on the day and year first written
above.
XXXXXXXX COMMUNICATIONS GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------
Its: President & CEO
-------------------------------------
LEUCADIA NATIONAL CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxxx
--------------------------------------
Its: Vice President
-------------------------------------
For purposes of Section 7.4 only:
XXXXXXXX COMMUNICATIONS, LLC
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------
Its: President & CEO
-------------------------------------
EXECUTION COPY
Exhibit A
[Chapter 11 Plan of Reorganization]
EXECUTION COPY
Exhibit B
[Form of Stockholder Agreement]
EXECUTION COPY
Exhibit C
[Form of Registration Rights Agreement]
EXECUTION COPY
Exhibit D
[Form of Certificate of Incorporation]
EXECUTION COPY
Exhibit E
[Form of Bylaws]
EXECUTION COPY
Exhibit F
[Copy of Board Consent under Confidentiality Agreement]
EXECUTION COPY
Schedule 4.8(a)
1. Xxxxxx X. Xxxxxx
2. Xxxxx X. Xxxxxxxx
3. P. Xxxxx Xxxxxxx, Jr.
4. Xxxxx X. Xxxxxx
5. Xxxxxx X. Xxxxxx
6. Xxxxxxx X. Xxxxx
7. Xxxxxxx X. Xxxxxx
8. Xxxxxxx X. Xxxxxx
9. Xxxxxx X. Xxxxxx
10. Xxxxx X. Xxxxxx
11. Xxxx Xxxxxxxxx
EXECUTION COPY
Schedule 4.8(b)
[Benefit Plans, Arrangements and Agreements]
