Execution Version
________________________________________________________________________________
AGREEMENT AND PLAN OF MERGER
among
ACF INDUSTRIES HOLDING CORP.,
ARNOS CORP.,
ARNOS SUB CORP.,
HIGH RIVER LIMITED PARTNERSHIP,
BARBERRY CORP.,
XO MERGER CORP.,
and
XO HOLDINGS, INC.
Dated as of July 11, 2011
________________________________________________________________________________
TABLE OF CONTENTS
PAGE
ARTICLE I THE MERGER.......................................................1
Section 1.1. The Merger....................................................1
Section 1.2. Closing; Effective Time.......................................1
Section 1.3. Effects of the Merger.........................................2
Section 1.4. Certificate of Incorporation; Bylaws..........................2
Section 1.5. Directors and Officers........................................2
ARTICLE II EFFECTS OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT
CORPORATIONS....................................................2
Section 2.1. Conversion of Securities......................................2
Section 2.2. Stock Options.................................................3
Section 2.3. Surrender of Shares...........................................3
Section 2.4. CVRs..........................................................6
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY...................7
Section 3.1. Organization; Authority.......................................7
Section 3.2. No Conflict; Required Filings and Consents....................8
Section 3.3. Information Statement.........................................8
Section 3.4. Fairness Opinion..............................................8
Section 3.5. Brokers and Other Advisors....................................9
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PARENT GROUP AND MERGER
SUB.............................................................9
Section 4.1. Organization; Authority.......................................9
Section 4.2. No Conflict; Required Filings and Consents....................9
Section 4.3. Ownership....................................................10
Section 4.4. Information Statement........................................10
Section 4.5. Merger Sub...................................................10
ARTICLE V ADDITIONAL AGREEMENTS..........................................10
Section 5.1. Parent Group Written Consents................................10
Section 5.2. Information Statement........................................10
Section 5.3. Directors' and Officers' Indemnification and Insurance.......11
Section 5.4. Further Action; Efforts......................................13
Section 5.5. Public Announcements.........................................14
i
TABLE OF CONTENTS
(continued)
PAGE
Section 5.6. Notification of Certain Matters..............................14
Section 5.7. Obligations of Merger Sub....................................14
ARTICLE VI CONDITIONS OF MERGER...........................................14
Section 6.1. Conditions to Each Party's Obligation to Effect the Merger...14
Section 6.2. Frustration of Closing Conditions............................15
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER..............................15
Section 7.1. Termination by Mutual Consent................................15
Section 7.2. Termination by Either the Parent Group or the Company........15
ARTICLE VIII GENERAL PROVISIONS.............................................15
Section 8.1. Non-Survival of Representations, Warranties, Covenants and
Agreements...................................................15
Section 8.2. Notices......................................................15
Section 8.3. Severability.................................................16
Section 8.4. Entire Agreement; Assignment.................................16
Section 8.5. Parties in Interest..........................................16
Section 8.6. Governing Law................................................17
Section 8.7. Expenses.....................................................17
Section 8.8. Waivers and Amendments.......................................17
Section 8.9. WAIVER OF JURY TRIAL.........................................17
Section 8.10. Headings....................................................18
Section 8.11. Counterparts................................................18
Section 8.12. Specific Performance........................................18
Section 8.13. Jurisdiction................................................18
Section 8.14. Interpretation..............................................19
Section 8.15. CVR Distribution Amount Calculations........................19
Section 8.16. Certain Definitions.........................................19
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INDEX OF DEFINED TERMS
PAGE
ACF............................................................................1
Adjusted Outstanding Shares...................................................20
Affiliate.....................................................................20
Agreement......................................................................1
Arnos Sub......................................................................1
Base Value....................................................................20
beneficially owned............................................................20
Board of Directors............................................................20
Book-Entry Shares..............................................................4
Business Day..................................................................20
Cash Consideration.............................................................2
Certificate of Merger..........................................................1
Certificates...................................................................4
Closing........................................................................1
Closing Date...................................................................1
Code...........................................................................6
Common Stock...................................................................2
Company........................................................................1
Company Board..................................................................1
Company Sale..................................................................20
Company Stock Option...........................................................3
control.......................................................................21
Convertible Preferred Stock...................................................10
CVR............................................................................2
CVR Consideration..............................................................6
CVR Distribution Amount.......................................................21
D&O Insurance.................................................................13
Delaware Court of Chancery.....................................................7
DGCL...........................................................................1
Dissenting Shares..............................................................3
DTC............................................................................5
DTC Payment....................................................................5
Effective Time.................................................................2
Exchange Act...................................................................8
Governmental Entity............................................................8
High River.....................................................................1
Indemnification Agreements....................................................22
Indemnified Parties...........................................................12
Information Statement.........................................................11
Maturity Date..................................................................6
Maturity Date Implied Value Per Share.........................................21
Maturity Date Implied Value Per Share As Converted............................22
iii
INDEX OF DEFINED TERMS
(continued)
PAGE
Maximum Premium...............................................................13
Merger.........................................................................1
Merger Consideration...........................................................3
Merger Sub.....................................................................1
Minority Shares...............................................................22
Minority Stockholders.........................................................22
Net Proceeds..................................................................22
Objection Notice...............................................................7
Order.........................................................................15
Outstanding Shares............................................................23
Parent.........................................................................1
Parent Consent................................................................11
Paying Agent...................................................................4
Permitted Holders..............................................................6
Perpetual Preferred Stock.....................................................10
Person........................................................................23
Relevant Determinations........................................................7
Sale Contract..................................................................6
Shares.........................................................................2
Special Committee.............................................................23
Subsidiary....................................................................23
Surviving Corporation..........................................................1
Tax...........................................................................23
Tax Allocation Agreement......................................................19
Tax Assets....................................................................24
Termination Date..............................................................15
iv
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of July 11, 2011 (this "Agreement"),
among ACF Industries Holding Corp., a Delaware corporation ("ACF"), Arnos Corp.,
a Delaware corporation ("Arnos"), Arnos Sub Corp., a Delaware corporation
("Arnos Sub"), High River Limited Partnership, a Delaware limited partnership
("High River"), Barberry Corp., a Delaware corporation ("Barberry", and together
with, ACF, Arnos, Arnos Sub and High River, collectively, the "Parent Group"),
XO Merger Corp., a Delaware corporation, all of the outstanding capital stock of
which is owned by the members of the Parent Group and/or their respective
Affiliates ("Merger Sub"), and XO Holdings, Inc., a Delaware corporation (the
"Company").
WHEREAS, the board of directors of the Company (the "Company Board"),
acting upon the unanimous recommendation of the Special Committee, has (i)
determined that it is in the best interests of the Company and the stockholders
of the Company, and declared it advisable, to enter into this Agreement with the
Parent Group and Merger Sub providing for the merger (the "Merger") of Merger
Sub with and into the Company in accordance with the General Corporation Law of
the State of Delaware (the "DGCL"), upon the terms and subject to the conditions
set forth herein and (ii) approved and declared advisable this Agreement and the
Merger in accordance with the DGCL;
WHEREAS, the respective board of directors of each member of the Parent
Group and Merger Sub has each approved this Agreement and the Merger and
declared its advisability; and
NOW, THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements herein contained, and intending to be
legally bound hereby, the Parent Group, Merger Sub and the Company hereby agree
as follows:
ARTICLE I
THE MERGER
Section 1.1. The Merger. Upon the terms and subject to the conditions of
this Agreement and in accordance with the DGCL, at the Effective Time Merger Sub
shall be merged with and into the Company. As a result of the Merger, the
separate corporate existence of Merger Sub shall cease and the Company shall
continue as the surviving corporation of the Merger (the "Surviving
Corporation").
Section 1.2. Closing; Effective Time. Subject to the provisions of Article
VI, the closing of the Merger (the "Closing") shall take place at the offices of
Dechert LLP, 1095 Avenue of the Americas, New York, New York, at 10:00 a.m.
local time, on the Business Day after the satisfaction or waiver (to the extent
permitted by applicable law) of the conditions set forth in Article VI
(excluding conditions that by their terms cannot be satisfied until the Closing,
but subject to the satisfaction or waiver of those conditions). The date on
which the Closing actually occurs is hereinafter referred to as the "Closing
Date." At the Closing, 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, in such form as required by,
and executed in accordance with, the relevant provisions of the DGCL. The Merger
1
shall become effective at such date and time as the Certificate of Merger is
filed with the Secretary of State of the State of Delaware or at such later time
(or subsequent date and time) as the Parent Group and the Special Committee (on
behalf of the Company) shall agree and specify in the Certificate of Merger. The
date and time at which the Merger becomes effective is referred to in this
Agreement as the "Effective Time."
Section 1.3. Effects of the Merger. The Merger shall have the effects set
forth herein and in the applicable provisions of the DGCL. Without limiting the
generality of the foregoing and subject thereto, at the Effective Time all the
property, rights, privileges, powers and franchises of the Company and Merger
Sub shall vest in the Surviving Corporation and all debts, liabilities and
duties of the Company and Merger Sub shall become the debts, liabilities and
duties of the Surviving Corporation.
Section 1.4. Certificate of Incorporation; Bylaws.
(a) At the Effective Time, the Certificate of Incorporation of the
Surviving Corporation will be amended and restated at the Effective Time so as
to read in the form attached hereto as Exhibit A until thereafter amended as
provided by applicable legal requirements.
(b) At the Effective Time, the Bylaws of the Merger Sub, as in effect
immediately prior to the Effective Time, shall be the Bylaws of the Surviving
Corporation until thereafter amended as provided by applicable legal
requirements, the Certificate of Incorporation of the Surviving Corporation and
such Bylaws.
Section 1.5. Directors and Officers. The directors of Merger Sub
immediately prior to the Effective Time shall be the initial directors of the
Surviving Corporation and shall hold office until their respective successors
are duly elected and qualified, or their earlier death, resignation or removal.
The officers of the Company immediately prior to the Effective Time shall be the
initial officers of the Surviving Corporation, each to hold office until the
earlier of their death, resignation or removal.
ARTICLE II
EFFECTS OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS
Section 2.1. Conversion of Securities. At the Effective Time, by virtue of
the Merger and without any action on the part of the Parent Group, Merger Sub,
the Company or the holders of any of the following securities:
(a) Each share of common stock, par value $0.01 per share, of the Company
(the "Common Stock") issued and outstanding immediately prior to the Effective
Time, other than any shares of Common Stock ("Shares") described in Section
2.1(b) and any Dissenting Shares, shall be converted into the right to receive
(a) one contractual value right ("CVR"), subject to the terms and provisions of
Section 2.4, and (b) $1.40 in cash (the "Cash Consideration," and together with
the CVR, "Merger Consideration") payable to the holder thereof, without
interest, in the manner provided in Section 2.3. All Shares that have been
converted into the right to receive the Merger Consideration as provided in this
2
Section 2.1 shall be automatically canceled and shall cease to exist. If,
between the date of this Agreement and the Effective Time, there is any change
in the number of outstanding Shares as a result of a reclassification,
recapitalization, stock split, stock dividend, subdivision, combination or
exchange of shares with respect to, or rights issued in respect of, Shares, the
Merger Consideration shall be equitably adjusted accordingly, without
duplication, to provide to the holders of Shares the same economic effect as
contemplated by this Agreement prior to such event;
(b) Each share of capital stock of the Company held in the treasury of the
Company and each share of capital stock of the Company owned directly or
indirectly by Merger Sub, the Parent Group, any entity to whom they transfer
their shares, in whole or in part, or any wholly-owned Subsidiary of the Company
immediately prior to the Effective Time ("Canceled Shares") shall be canceled
and shall cease to exist without any conversion thereof and no payment or
distribution shall be made with respect thereto;
(c) Each share of capital stock of Merger Sub issued and outstanding
immediately prior to the Effective Time shall be converted into and become
validly issued, fully paid and nonassessable shares of capital stock of the
Surviving Corporation and shall constitute the only outstanding shares of
capital stock of the Surviving Corporation; and
(d) Such Shares with respect to which appraisal shall have been properly
demanded in accordance with Section 262 of the DGCL ("Dissenting Shares") shall
not be converted into the right to receive the Merger Consideration at or after
the Effective Time unless and until the holder of such Shares withdraws such
holder's demand for appraisal (in accordance with Section 262(k) of the DGCL) or
otherwise becomes ineligible for such appraisal, but rather the holder of
Dissenting Shares shall be entitled only to payment of the fair value of such
Dissenting Shares in accordance with Section 262 of the DGCL. If a holder of
Dissenting Shares shall withdraw (in accordance with Section 262(k) of the DGCL)
the demand for such appraisal or otherwise shall become ineligible for such
appraisal, then, as of the Effective Time or the occurrence of such event,
whichever last occurs, each of such holder's Dissenting Shares shall cease to be
a Dissenting Share and shall be converted into and represent solely the right to
receive the Merger Consideration, without any interest thereon. At the Effective
Time, the Dissenting Shares shall no longer be outstanding and shall
automatically be cancelled and shall cease to exist, and each holder of
Dissenting Shares shall cease to have any rights with respect thereto, except
such rights provided in the preceding two sentences.
Section 2.2. Stock Options. Immediately prior to the Effective Time, each
then-outstanding option to purchase Shares (a "Company Stock Option") granted
under any director or employee stock option or compensation plan or arrangement
of the Company or otherwise, whether or not vested or exercisable, shall be
cancelled and the holder of such Company Stock Option shall not receive any cash
payment in respect thereof. At or prior to the Effective Time, the Board of
Directors shall adopt such resolutions and take such actions as are necessary to
effectuate the foregoing provisions of this Section 2.2.
Section 2.3. Surrender of Shares.
(a) Prior to the Effective Time, the Parent Group shall enter into an
agreement (in a form reasonably acceptable to the Special Committee) with a
3
paying agent reasonably acceptable to the Special Committee to act as agent for
the stockholders of the Company in connection with the Merger (the "Paying
Agent") to receive the Merger Consideration to which the stockholders of the
Company shall become entitled pursuant to Section 2.1. At or prior to the
Effective Time, the Parent Group shall deposit with the Paying Agent sufficient
funds to make all payments of the Cash Consideration pursuant to Section 2.1.
Such funds may be invested by the Paying Agent in short term obligations of the
United States of America with maturities of no more than 30 days or guaranteed
by the United States of America and backed by the full faith and credit of the
United States of America. Any interest or income produced by such investments
will be payable to the Surviving Corporation or the Parent Group, as the Parent
Group directs.
(b) Promptly after the Effective Time and in any event not later than the
second Business Day following the Effective Time, the Surviving Corporation
shall cause to be mailed to each record holder, as of the Effective Time, of an
outstanding certificate or outstanding certificates ("Certificates") that
immediately prior to the Effective Time represented outstanding Shares that have
converted into the right to receive the Merger Consideration with respect
thereto pursuant to Section 2.1(a), a form of letter of transmittal (which shall
be in customary form and shall specify that delivery shall be effected, and risk
of loss and title to the Certificates held by such person shall pass, only upon
proper delivery of Certificates to the Paying Agent) and instructions for use in
effecting the surrender of the Certificates. Upon surrender to the Paying Agent
of a Certificate, together with such letter of transmittal, duly completed and
validly executed in accordance with the instructions thereto, the holder of such
Certificate shall be entitled to receive in exchange therefor the Merger
Consideration for each Share formerly represented by such Certificate and such
Certificate shall then be canceled. Promptly after the Effective Time and in any
event not later than the second Business Day following the Effective Time, the
Paying Agent shall issue and deliver to each holder of uncertificated Shares
represented by book-entry ("Book-Entry Shares") a check or wire transfer for the
amount of Cash Consideration that such holder is entitled to receive pursuant to
Section 2.1(a) of this Agreement in respect of such Book-Entry Shares, without
such holder being required to deliver a Certificate or an executed letter of
transmittal to the Paying Agent, and such Book-Entry Shares shall then be
canceled. No interest shall be paid or accrued for the benefit of holders of the
Certificates or Book-Entry Shares on the Merger Consideration payable in respect
of the Certificates or Book-Entry Shares. In the event of a transfer of
ownership of Shares that is not registered in the transfer records of the
Company, it shall be a condition of payment that such Certificate so surrendered
shall be properly endorsed or shall be otherwise in proper form for transfer or
such Book-Entry Share shall be properly transferred and that the person
requesting such payment shall have paid any transfer and other Taxes required by
reason of the payment of the Merger Consideration to a person other than the
registered holder of the Certificate or Book-Entry Share surrendered or shall
have established to the satisfaction of the Parent Group that such Tax either
has been paid or is not applicable. Until surrendered as contemplated by this
Section 2.3(b), each Certificate, other than Certificates representing
Dissenting Shares which shall be treated in accordance with Section 2.2(d) and
Certificates representing Cancelled Shares which shall be treated in accordance
with Section 2.1(b), shall be deemed at any time after the Effective Time to
represent only the right to receive upon such surrender the applicable Merger
Consideration as and when contemplated by this Article II, without interest.
4
(c) Prior to the Effective Time, the Parent Group and the Company shall
cooperate to establish procedures with the Paying Agent and the Depository Trust
Company ("DTC") to ensure that (i) if the Closing occurs at or prior to 11:30
a.m. (New York time) on the Closing Date, the Paying Agent will transmit to DTC
or its nominees on the Closing Date an amount in cash in immediately available
funds equal to the number of Shares (other than Cancelled Shares) held of record
by DTC or such nominee immediately prior to the Effective Time multiplied by the
Cash Consideration (such amount, the "DTC Payment"), and (ii) if the Closing
occurs after 11:30 a.m. (New York time) on the Closing Date, the Paying Agent
will transmit to DTC or its nominees on the first Business Day after the Closing
Date an amount in cash in immediately available funds equal to the DTC Payment.
(d) At any time following the date that is six (6) months after the
Effective Time, the Parent Group shall be entitled to require the Paying Agent
to deliver to it any funds (including any interest received with respect
thereto) that have been made available to the Paying Agent and that have not
been disbursed to holders of Certificates and Book-Entry Shares and thereafter
such holders shall be entitled to look to the Parent Group and the Surviving
Corporation (subject to abandoned property, escheat or other similar laws) only
as general creditors thereof with respect to the Merger Consideration payable
upon due surrender of their Certificates and Book-Entry Shares. The Surviving
Corporation shall pay all charges and expenses, including those of the Paying
Agent, in connection with the exchange of Shares for the Merger Consideration.
Notwithstanding any provision of this Agreement to the contrary, none of the
parties hereto, the Surviving Corporation or the Paying Agent shall be liable to
any person for Merger Consideration delivered to a public official pursuant to
any applicable abandoned property, escheat or similar law. All cash paid upon
the surrender of Certificates and the rights under the CVRs in accordance with
the terms of this Article II shall be deemed to be in full satisfaction of all
rights pertaining to the Shares formerly represented by such Certificates.
(e) After the Effective Time, the stock transfer books of the Company shall
be closed and thereafter there shall be no further registration of transfers of
Shares that were outstanding prior to the Effective Time. If, after the
Effective Time, Certificates are presented to the Surviving Corporation for
transfer such Certificates shall be canceled and exchanged for the consideration
provided for, and in accordance with the procedures set forth, in this Article
II.
(f) Notwithstanding anything in this Agreement to the contrary, the Parent
Group, the Surviving Corporation and the Paying Agent shall be entitled to
deduct and withhold from the consideration otherwise payable pursuant to this
Agreement any amount as may be required to be deducted and withheld with respect
to the making of such payment under applicable Tax laws. To the extent that
amounts are so withheld by the Parent Group, the Surviving Corporation or the
Paying Agent, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the holder of Shares in respect of whom such
deduction and withholding was made by the Parent Group or the Paying Agent.
(g) In the event that any Certificate shall have been lost, stolen or
destroyed, upon the holder's compliance with the replacement requirements
established by the Paying Agent, including, if necessary, the posting by the
holder of a bond in customary amount as indemnity against any claim that may be
made against it or the Surviving Corporation with respect to the Certificate,
5
the Paying Agent will deliver in exchange for the lost, stolen or destroyed
Certificate the applicable Merger Consideration payable in respect of the Shares
represented by such Certificate pursuant to this Article II.
Section 2.4. CVRs.
(a) The CVRs will be uncertificated contract rights and will be
non-assignable and non-transferable by any holder thereof, except with respect
to such rights as required by any applicable community property laws or laws of
descent and distribution.
(b) The CVRs will become effective at the Effective Time and will expire at
11:59 p.m. New York City time on the earlier of (i) July 11, 2012 and (ii) the
consummation of a Company Stock Sale or a Company Merger (the earlier of such
dates, the "Maturity Date"). However, if after the Effective Time and prior to
July 11, 2012, the Surviving Corporation or any of its Affiliates (the
"Permitted Holders") enters into a definitive agreement providing for a Company
Sale (a "Sale Contract"), the Maturity Date shall not be the date specified in
the sentence above, but shall be the later of (i) July 11, 2012 and (ii) the
date the Company Sale pursuant to such Sale Contract is consummated or
terminated.
(c) If there is consummated after the Effective Time and on or before the
Maturity Date one or more Company Sales which result in a CVR Distribution
Amount greater than zero (0), then, following the Maturity Date, the Parent
Group will deposit, or cause to be deposited, with the Paying Agent for payment,
subject to any applicable withholding taxes, pro rata to each holder of a CVR,
an amount per CVR (the "CVR Consideration") equal to such CVR Distribution
Amount and upon such deposit, subject solely to Section 2.4(e), the CVRs shall
be automatically cancelled and be of no further force or effect and no further
consideration shall be deliverable by the Parent Group in respect thereof.
(d) If, on the Maturity Date, (i) no Company Sale has been consummated
following the Effective Time and on or prior to the Maturity Date, or (ii) if
one or more Company Sales has been consummated following the Effective Time and
on or prior to the Maturity Date, and the CVR Distribution Amount is zero (0) or
less, the CVRs shall automatically terminate and be of no further force or
effect and no consideration shall be deliverable in respect thereof.
(e) All computations and determinations relating to the CVRs shall be made
by the Parent Group in good faith. Promptly after the Maturity Date, the Parent
Group shall notify holders of CVRs in writing of the Parent Group's
determination as to (i) whether any Company Sale occurred after the Effective
Time and on or before the Maturity Date, (ii) the aggregate amount of any Net
Proceeds received in respect thereof, (iii) the amount (if any) of any resulting
CVR Distribution Amount, and (iv) the amount of CVR Consideration (if any) due
and payable to CVR holders under this Agreement ((i) through (iv) collectively,
the "Relevant Determinations"). Following such notice, CVR holders shall have 90
days to communicate to the Parent Group in writing any objections to the Parent
Group's determination of the Relevant Determinations; provided, that, a CVR
holder may object to the Parent Group's determinations only (A) on the basis
that the Parent Group's determinations, including determinations regarding fair
market value in the definition of "Net Proceeds" being made in good faith, were
not made in accordance with the terms hereof, (B) to the extent that, if such
6
holder's objection was upheld, the Parent Group would be required to pay an
aggregate of at least $200,000 more in CVR Consideration than according to the
Parent Group's determinations and (C) if the bases for such holder's objection
are specified in writing and in reasonable detail (such writing, an "Objection
Notice"). If the Parent Group receives one or more Objection Notices, then the
Parent Group and the CVR holders who delivered such Objection Notice shall
discuss the objections set forth therein in good faith and the Parent Group
agrees, and each CVR holder by accepting a CVR agrees, to use all reasonable
efforts to ensure that any final resolution of such objections will be
applicable to, and binding on, all CVR holders (and not only those CVR holders
who objected to Parent Group's determinations). If additional amounts are paid
in settlement of one or more Objection Notices, then all objecting and
non-objecting CVR holders shall, to the extent practicable, be treated equally
by the Parent Group and receive the same amount and form of consideration as the
objecting CVR holders, based on and in proportion to the number of CVRs held by
each such holder. If any such objections are not resolved by the date that is
150 days after the Maturity Date, then the Parent Group and the CVR holders
shall submit the matter to the Court of Chancery of the State of Delaware (the
"Delaware Court of Chancery").
(f) The holder of a CVR will not be entitled to any of the rights of a
stockholder in the Parent Group or the Surviving Corporation or any of their
respective Affiliates (including, without limitation, voting and dividend
rights). None of the Parent Group or any of its Affiliates or Subsidiaries shall
be liable to any person in respect of any CVR Consideration delivered to a
public official pursuant to any applicable abandoned property, escheat or
similar law.
(g) BY ACCEPTING A CVR, EACH CVR HOLDER HEREBY (I) IRREVOCABLY WAIVES ANY
RIGHTS TO TRIAL BY JURY IN ANY LEGAL PROCEEDING RELATED TO THE CVRS, (II)
CONSENTS TO SUBMIT TO THE PERSONAL JURISDICTION OF THE DELAWARE COURT OF
CHANCERY AND ANY STATE APPELLATE COURT THEREFROM WITHIN THE STATE OF DELAWARE
(UNLESS THE DELAWARE COURT OF CHANCERY SHALL DECLINE TO ACCEPT JURISDICTION OVER
A PARTICULAR MATTER, IN WHICH CASE, IN ANY FEDERAL COURT LOCATED WITHIN THE
STATE OF DELAWARE), IN THE EVENT ANY DISPUTE ARISES OUT OF THE CVRS OR ANY OF
THE TRANSACTIONS CONTEMPLATED BY THE CVRS, (III) AGREES NOT TO ATTEMPT TO DENY
OR DEFEAT SUCH PERSONAL JURISDICTION BY MOTION OR OTHER REQUEST FOR LEAVE FROM
ANY SUCH COURT, (IV) AGREES NOT TO BRING ANY ACTION RELATING TO THE CVRS OR ANY
OF THE TRANSACTIONS CONTEMPLATED BY THE CVRS IN ANY COURT OTHER THAN SAID COURTS
OF THE STATE OF DELAWARE AS DESIGNATED ABOVE, AND (V) CONSENTS TO SERVICE BEING
MADE THROUGH THE NOTICE PROCEDURES SET FORTH IN SECTION 8.2.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Parent Group and Merger
Sub that:
Section 3.1. Organization; Authority. Each of the Company and its
Subsidiaries is an entity duly organized and validly existing under the laws of
the jurisdiction of its organization. The Company has all necessary corporate
7
power and authority to execute and deliver this Agreement and to perform its
obligations hereunder and to consummate the transactions contemplated hereby.
The execution, delivery and performance of this Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby have been
duly and validly authorized by all necessary corporate action, including the
authorization and approval by the Company Board, acting on the unanimous
recommendation of the Special Committee, and, upon receipt of the Parent Group
Consent (as defined in Section 5.1) immediately following the execution of this
Agreement, no other corporate proceedings on the part of the Company are
necessary to authorize this Agreement or to consummate the transactions so
contemplated (other than the filing with the Secretary of State of the State of
Delaware of the Certificate of Merger as required by the DGCL). This Agreement
has been duly and validly executed and delivered by the Company and, assuming
the due authorization, execution and delivery hereof by the Parent Group and
Merger Sub, constitutes a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, and general equitable principles (whether considered in a proceeding
in equity or at law).
Section 3.2. No Conflict; Required Filings and Consents. Assuming the
accuracy of the representations and warranties contained in Section 4.2 hereof,
the execution, delivery and performance of this Agreement by the Company and the
consummation of the Merger by the Company do not and will not require any
material consent, approval, authorization or permit of, action by, filing with
or notification to, any governmental or regulatory (including stock exchange)
authority, agency, court or other judicial body, commission or other
governmental body (each, a "Governmental Entity"), except for (i) applicable
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") and the rules and regulations promulgated thereunder (including the filing
of the Information Statement) and state securities and "blue sky" laws, (ii) the
filing with the Secretary of State of the State of Delaware of the Certificate
of Merger as required by the DGCL and (iii) any such consent, approval,
authorization, permit, action, filing or notification the failure of which to
make or obtain would not prevent or materially delay the Company from performing
its obligations under this Agreement in any material respect.
Section 3.3. Information Statement. None of the information supplied or to
be supplied by the Company for inclusion or incorporation by reference in the
Information Statement will, at the date it is first mailed to the stockholders
of the Company, 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 are made,
not misleading.
Section 3.4. Fairness Opinion. The Special Committee has received the
written opinion of X.X. Xxxxxx Securities LLC, financial advisor to the Special
Committee, dated July 11, 2011, addressed to the Special Committee and to the
Company Board, that, based upon and subject to the factors and assumptions set
forth therein, the Cash Consideration to be paid to the Minority Stockholders in
the Merger is fair, from a financial point of view, to the Minority
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Stockholders, and a copy of such opinion will promptly be provided to the Parent
Group, solely for informational purposes, following receipt thereof by the
Company.
Section 3.5. Brokers and Other Advisors. Except for X.X. Xxxxxx Securities
LLC, the fees and expenses of which will be paid by the Company, no broker,
investment banker, financial advisor or other Person is entitled to any
broker's, finder's, financial advisor's or other similar fee or commission, or
the reimbursement of expenses in connection therewith, in connection with the
transactions contemplated hereby based upon arrangements made by or on behalf of
the Special Committee, the Company or any of its Subsidiaries.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PARENT GROUP AND MERGER SUB
The Parent Group and Merger Sub hereby, jointly and severally, represent
and warrant to the Company that:
Section 4.1. Organization; Authority. Each member of the Parent Group and
Merger Sub is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it is incorporated. The
Parent Group owns beneficially and of record all of the outstanding capital
stock of Merger Sub free and clear of all security interests, liens, claims,
pledges, agreements, limitations in voting rights, charges or other encumbrances
of any nature whatsoever. Each member of the Parent Group and Merger Sub has all
necessary corporate power and authority to execute and deliver this Agreement,
to perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this Agreement
by each member of the Parent Group and Merger Sub and the consummation by each
member of the Parent Group and Merger Sub of the transactions contemplated
hereby have been duly and validly authorized by all necessary corporate action
by the boards of directors of the Parent Group and Merger Sub and, upon receipt
of the Parent Group Consent immediately following execution of this Agreement,
will be duly and validly authorized by all necessary actions by the Parent Group
as the stockholders of Merger Sub, and no other corporate proceedings on the
part of the Parent Group or Merger Sub or such Affiliates are necessary to
authorize this Agreement, to perform their respective obligations hereunder, or
to consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by each member of the Parent Group and Merger
Sub and, assuming due authorization, execution and delivery hereof by the
Company, constitutes a legal, valid and binding obligation of each member of the
Parent Group and Merger Sub enforceable against each member of the Parent Group
and Merger Sub in accordance with its terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally, or
general equitable principles (whether considered in a proceeding in equity or at
law).
Section 4.2. No Conflict; Required Filings and Consents. The execution,
delivery and performance of this Agreement by each member of the Parent Group
and Merger Sub and the consummation of the transactions contemplated hereby by
each member of the Parent Group and Merger Sub do not and will not require any
consent, approval, authorization or permit of, action by, filing with or
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notification to, any Governmental Entity including, but not limited to, the
Federal Communications Commission or under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended, except for (i) the applicable
requirements, if any, of the Exchange Act and the rules and regulations
promulgated thereunder, and state securities, takeover and "blue sky" laws, (ii)
the filing with the Secretary of State of the State of Delaware of the
Certificate of Merger as required by the DGCL and (iii) any such consent,
approval, authorization, permit, action, filing or notification the failure of
which to make or obtain would not materially delay the Parent Group and Merger
Sub from performing their obligations under this Agreement in any material
respect.
Section 4.3. Ownership. As of the date hereof, the Parent Group
collectively owns 113,410,769 shares of the Common Stock, all of the outstanding
shares of the Company's 7.00% Class B Convertible Preferred Stock, par value
$0.01 per share (the "Convertible Preferred Stock"), and all of the outstanding
shares of the Company's 9.50% Perpetual Preferred Stock, par value $0.01 per
share (the "Perpetual Preferred Stock").
Section 4.4. Information Statement. None of the information supplied or to
be supplied by the Parent Group or Merger Sub for inclusion or incorporation by
reference in the Information Statement will, at the date it is first mailed to
the stockholders of the Company, 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 are made, not misleading.
Section 4.5. Merger Sub. Merger Sub is a special purpose company owned
solely by current affiliated stockholders of the Company (in the same
proportionate ownership as they own Company stock on the Closing Date) that was
formed solely to effectuate the acquisition of all the stock of the Company held
by persons other than the shareholders of Merger Sub. Merger Sub has not been
and will not be used for any other purpose; provided, that if requested by the
Parent Group and consented to by the Special Committee, Company stock currently
owned by the stockholders of Merger Sub shareholders may be contributed to
Merger Sub.
ARTICLE V
ADDITIONAL AGREEMENTS
Section 5.1. Parent Group Written Consents. Immediately following the
execution and delivery of this Agreement by the parties hereto, the members of
the Parent Group shall execute and deliver, in accordance with Section 228 of
the DGCL, written consents adopting the Agreement and approving the transactions
contemplated hereby (i) in their capacity as the stockholders of Merger Sub and
(ii) in their capacity as the majority stockholders of the Company (the "Parent
Group Consent").
Section 5.2. Information Statement. As soon as reasonably practicable
following the date of this Agreement but in no event later than three (3)
Business Days following the date of this Agreement, the Company shall, with the
assistance of the Parent Group, prepare and file with the SEC an information
statement of the type contemplated by Rule 14c-2 promulgated under the Exchange
Act related to the Merger and this Agreement (such information statement,
including any amendment or supplement thereto, the "Information Statement"). The
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Parent Group, Merger Sub and the Company will cooperate with each other in the
preparation of the Information Statement. Without limiting the generality of the
foregoing, each of the Parent Group and Merger Sub will furnish to the Company
the information relating to it required by the Exchange Act and the rules and
regulations promulgated thereunder to be set forth in the Information Statement.
The Company shall use its reasonable best efforts to resolve all SEC comments
with respect to the Information Statement as promptly as reasonably practicable
after receipt thereof and to have the Information Statement cleared by the staff
of the SEC as promptly as reasonably practicable after such filing. Each of the
Parent Group, Merger Sub and the Company agrees to correct any information
provided by it for use in the Information Statement which shall have become
false or misleading. The Company shall as soon as reasonably practicable notify
the Parent Group and Merger Sub of the receipt of any comments from the SEC with
respect to Information Statement and any request by the SEC for any amendment to
the Information Statement or for additional information and shall provide the
Parent Group with copies of all such comments and correspondence. Prior to
filing or mailing the Information Statement (or any amendment or supplement
thereto) or responding to any comments of the SEC (or the staff of the SEC) with
respect thereto, the Company shall provide the Parent Group a reasonable
opportunity to review and to propose comments on such document or response and
shall consider the Parent Group's comments in good faith. Promptly after the
Information Statement has been cleared by the SEC or after 10 calendar days have
passed since the date of filing of the preliminary Information Statement with
the SEC without notice from the SEC of its intent to review the Information
Statement, the Company shall promptly file with the SEC the Information
Statement in definitive form as contemplated by Rule 14c-2 promulgated under the
Exchange Act substantially in the form previously cleared or filed with the SEC,
as the case may be, and mail a copy of the Information Statement to each of its
stockholders.
Section 5.3. Directors' and Officers' Indemnification and Insurance.
(a) Without limiting any additional rights under any existing agreement or
arrangement, from the Effective Time through the sixth anniversary of the date
on which the Effective Time occurs, the Parent Group shall, and shall cause the
Surviving Corporation to, indemnify and hold harmless each present (as of the
Effective Time) and former officer and director of the Company and its
Subsidiaries (the "Indemnified Parties"), against all claims, losses,
liabilities, damages, judgments, inquiries, fines and reasonable fees, costs and
expenses, including attorneys' fees and disbursements (collectively, "Losses"),
incurred in connection with any claim, action, suit, proceeding or
investigation, whether civil, criminal, administrative or investigative, arising
out of or pertaining to (i) the fact that an Indemnified Party is or was an
officer or director of the Company or any of its Subsidiaries or (ii) matters
existing or occurring at or prior to the Effective Time (including this
Agreement and the transactions and actions contemplated hereby), whether
asserted or claimed prior to, at or after the Effective Time, to the fullest
extent permitted under applicable law. In the event of any such claim, action,
suit, proceeding or investigation, (A) each Indemnified Party will be entitled
to advancement of expenses incurred in the defense of any claim, action, suit,
proceeding or investigation from the Surviving Corporation within ten (10)
Business Days of receipt by the Parent Group or the Surviving Corporation from
the Indemnified Party of a request therefor, (B) neither Parent Group nor the
Surviving Corporation shall settle, compromise or consent to the entry of any
judgment in any proceeding or threatened action, suit, proceeding, investigation
or claim (and in which indemnification could be sought by such Indemnified Party
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hereunder), unless such settlement, compromise or consent includes an
unconditional release of such Indemnified Party from all liability arising out
of such action, suit, proceeding, investigation or claim or such Indemnified
Party otherwise consents, and (C) each of the Surviving Corporation and the
Indemnified Party shall cooperate in the defense of any such matter. The Parent
Group or the Surviving Corporation shall have the right, but not the obligation,
to assume and control the defense of any threatened or actual claim, action,
suit, proceeding or investigation relating to any acts or omissions covered
under this Section 5.3 unless there is a conflict of interest between the Parent
Group and the Surviving Corporation, on the one hand, and the applicable
Indemnified Party, on the other; provided, that, prior to any such assumption
and control, the party assuming control of such defense shall provide to the
applicable Indemnified Party a written undertaking reaffirming its obligations
hereunder, under the organizational documents of the Company and the Surviving
Corporation to indemnify such party against any and all Losses relating thereto
or resulting therefrom.
(b) The certificate of incorporation and bylaws of the Surviving
Corporation shall contain provisions no less favorable with respect to
indemnification, advancement of expenses and exculpation of former or present
directors and officers than are set forth in the Company's Certificate of
Incorporation and Bylaws, which provisions shall not be amended, repealed or
otherwise modified for a period of six years from the Effective Time in any
manner that would adversely affect the rights thereunder of any such
individuals.
(c) Prior to the Effective Time, the Company shall and, if the Company is
unable to, the Parent Group shall cause the Surviving Corporation as of the
Effective Time to, obtain and fully pay the premium for the extension of (i) the
directors' and officers' liability coverage of the Company's existing directors'
and officers' insurance policies, and (ii) the Company's existing fiduciary
liability insurance policies, in each case for a claims reporting or discovery
period of at least six years from and after the Effective Time from an insurance
carrier with the same or better credit rating as the Company's current insurance
carrier with respect to directors' and officers' liability insurance and
fiduciary liability insurance (collectively, "D&O Insurance") with terms,
conditions, retentions and limits of liability that are at least as favorable,
in the aggregate, as the Company's existing policies with respect to any actual
or alleged error, misstatement, misleading statement, act, omission, neglect,
breach of duty or any matter claimed against a director or officer of the
Company or any of its Subsidiaries by reason of him or her serving in such
capacity that existed or occurred at or prior to the Effective Time (including
in connection with this Agreement or the transactions or actions contemplated
hereby); provided, however, that, if the annual premium for such insurance shall
exceed 300% of the current annual premium (such 300% threshold, the "Maximum
Premium"), then the Company or the Parent Group, as applicable, shall provide or
cause to be provided a policy for the applicable individuals with the best
coverage as shall then be available at an annual premium not in excess of the
Maximum Premium. If the Company and the Surviving Corporation for any reason
fail to obtain such "tail" insurance policies as of the Effective Time, the
Surviving Corporation shall, and the Parent Group shall cause the Surviving
Corporation to, continue to maintain in effect for a period of at least six
years from and after the Effective Time the D&O Insurance in place as of the
date hereof with terms, conditions, retentions and limits of liability that are
at least as favorable, in the aggregate, as provided in the Company's existing
policies as of the date hereof, or the Surviving Corporation shall, and the
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Parent Group shall cause the Surviving Corporation to, use reasonable best
efforts to purchase comparable D&O Insurance for such six-year period with
terms, conditions, retentions and limits of liability that are at least as
favorable, in the aggregate, as provided in the Company's existing policies as
of the date hereof; provided, however, in each case, that, if the annual premium
for such insurance shall exceed the Maximum Premium, then the Company or the
Parent Group, as applicable, shall provide or cause to be provided a policy for
the applicable individuals with the best coverage as shall then be available at
an annual premium not in excess of the Maximum Premium.
(d) Notwithstanding anything herein to the contrary, if any claim, action,
suit, proceeding or investigation (whether arising before, at or after the
Effective Time) is made against any Indemnified Party on or prior to the sixth
anniversary of the Effective Time, the provisions and benefits of this Section
5.3 shall continue in full effect until the final disposition of such claim,
action, suit, proceeding or investigation.
(e) This covenant is intended to be for the benefit of, and shall be
enforceable by, each of the Indemnified Parties and their respective heirs and
legal representatives. The indemnification provided for herein shall not be
deemed exclusive of any other rights to which an Indemnified Party is entitled,
whether pursuant to law, contract or otherwise, including, but not limited to,
those under the Indemnification Agreements.
(f) In the event that the Surviving Corporation or the Parent Group or any
of their respective successors or assigns (i) consolidates with or merges into
any other person and shall not be the continuing or surviving corporation or
entity of such consolidation or merger or (ii) transfers or conveys all or a
majority of its properties and assets to any person, then, and in each such
case, proper provision shall be made so that the successors and assigns of the
Surviving Corporation or the Parent Group, as the case may be, shall succeed to
the obligations set forth in this Section 5.3.
Section 5.4. Further Action; Efforts. Upon the terms and subject to the
conditions of this Agreement, each of the parties shall use its commercially
reasonable best efforts to (i) take, or cause to be taken, all actions and to
do, or cause to be done, and cooperate with each other in order to do, all
things necessary, proper or advisable to consummate the transactions
contemplated by this Agreement as soon as practicable and (ii) do all things
necessary, proper or advisable under applicable laws and regulations to
consummate the Merger and the other transactions contemplated by this Agreement
at the earliest practicable date, including: (A) causing the preparation and
filing of all forms, registrations and notices required to be filed to
consummate the Merger; (B) defending all lawsuits and other proceedings by or
before any Governmental Entity challenging this Agreement or the consummation of
the Merger; and (C) using commercially reasonable best efforts to prevent the
entry of any court order, and to have vacated, lifted, reversed or overturned
any injunction, decree, ruling, order or other action of any Governmental Entity
that would prevent, prohibit, restrict or delay the consummation of the
transactions contemplated by this Agreement. Each of the parties hereto agrees
to treat the receipt of the Merger Consideration in exchange for shares of
Company stock pursuant to the Merger as a taxable sale and purchase of Company
stock for income tax purposes. With respect to any potential withholding tax
under Section 1445 of the Internal Revenues Code of 1986, as amended (the
13
"Code"), the parties hereto intend to rely on the exemption from such
withholding tax pursuant to Code Section 897(c)(3) with respect to stockholders
who beneficially own Common Stock representing five percent (5%) or less
ownership in the Company. Promptly after the date hereof, the Company will make
a determination as to whether the Company is able to supply a certificate in
accordance with Treas. Reg. 1.1445-2(c)(3) that the Company is not a United
States real property holding corporation so that no withholding will be required
under Code Section 1445. Notwithstanding the foregoing, except as otherwise
expressly provided by this Agreement, none of the parties hereto nor any of
their respective Affiliates shall be obligated to make any payments or otherwise
pay any consideration to any third party to obtain any applicable consent,
waiver, settlement or approval in order to consummate the transactions
contemplated hereby.
Section 5.5. Public Announcements. Unless and until the earlier of (a) the
termination of this Agreement and (b) the Effective Time, the Company and the
Parent Group will consult with and provide each other the reasonable opportunity
to review and comment upon any press release or other public statement or
comment prior to the issuance of such press release or other public statement or
comment relating to this Agreement or the transactions contemplated herein and
shall not issue any such press release or other public statement or comment
prior to such consultation except as such party may be advised by its legal
counsel is required by applicable law or by obligations pursuant to any listing
agreement with any national securities exchange. The Parent Group and the
Company agree that the press release announcing the execution and delivery of
this Agreement shall be a joint release of the Parent Group and the Company.
Section 5.6. Notification of Certain Matters. The Company shall give prompt
notice to the Parent Group, and the Parent Group shall give prompt notice to the
Company, of (a) any notice or other communication received by such party from
any Governmental Entity in connection with the Merger or the other transactions
contemplated hereby or from any person alleging that the consent of such person
is or may be required in connection with the Merger or the other transactions
contemplated hereby, if the subject matter of such communication or the failure
of such party to obtain such consent could be material to the Company, the
Surviving Corporation or the Parent Group or (b) any actions, suits, claims,
investigations or proceedings commenced or, to such party's knowledge,
threatened against, relating to or involving or otherwise affecting such party
or any of its Subsidiaries or Affiliates which relate to the Merger or the other
transactions contemplated hereby.
Section 5.7. Obligations of Merger Sub. The Parent Group shall take all
action necessary to cause Merger Sub and the Surviving Corporation to perform
their respective obligations under this Agreement.
ARTICLE VI
CONDITIONS OF MERGER
Section 6.1. Conditions to Each Party's Obligation to Effect the Merger.
The respective obligation of each party to effect the Merger is subject to the
satisfaction or waiver at or prior to the Effective Time of each of the
following conditions:
14
(a) Distribution of Information Statement. The Information Statement shall
have been sent to stockholders (in accordance with Regulation 14C of the
Exchange Act) at least 20 calendar days prior to the Closing.
(b) Orders. As of the Closing, no court or other Governmental Entity of
competent jurisdiction shall have enacted, issued, promulgated, enforced or
entered: (i) any law (whether temporary, preliminary or permanent), rule or
regulation (collectively, a "Law"); or (ii) any decree, order, judgment,
injunction, temporary restraining order or other order (whether temporary,
preliminary or permanent) in any suit or proceeding (collectively, an "Order"),
that in either case, restrains, enjoins or otherwise prohibits consummation of
the Merger.
Section 6.2. Frustration of Closing Conditions. None of the Company, the
Parent Group or Merger Sub may rely on the failure of any condition set forth in
Section 6.1, to be satisfied to excuse such party's obligation to effect the
Merger if such failure was caused by such party's failure to use the standard of
efforts required from such party to consummate the Merger and the other
transactions contemplated by this Agreement.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
Section 7.1. Termination by Mutual Consent. This Agreement may be
terminated and the Merger may be abandoned at any time prior to the Effective
Time by the mutual written consent of the Special Committee and the Parent
Group.
Section 7.2. Termination by Either The Parent Group or Special Committee.
This Agreement may be terminated and the Merger may be abandoned at any time
prior to the Effective Time, by the Special Committee or the Parent Group if (a)
the Merger shall not have been consummated by December 1, 2011 (such date the
"Termination Date"); or (b) any Law or Order permanently restraining, enjoining
or otherwise prohibiting consummation of the Merger shall become final and
non-appealable, provided, that the right to terminate this Agreement pursuant to
this Section 7.2 shall not be available to any party that has breached in any
material respect its obligations under this Agreement in any manner that shall
have been the principal cause of the failure of the consummation of the Merger.
ARTICLE VIII
GENERAL PROVISIONS
Section 8.1. Non-Survival of Representations, Warranties, Covenants and
Agreements. None of the representations, warranties, covenants and agreements in
this Agreement or in any instrument delivered pursuant to this Agreement,
including any rights arising out of any breach of such representations,
warranties, covenants and agreements, shall survive the Effective Time, except
for (a) those covenants and agreements contained herein to the extent that by
their express terms apply or are to be performed in whole or in part after the
Effective Time and (b) those contained in this Article VIII.
Section 8.2. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
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deemed to have been duly given upon receipt) by delivery in person, by
facsimile, by registered or certified mail (postage prepaid, return receipt
requested) to the respective parties at the following addresses (or at such
other address for a party as shall be specified by like notice):
(a) if to the Parent Group or Merger Sub:
c/o Icahn Associates Corp.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: General Counsel
if to the Company:
XO Holdings, Inc.
00000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: General Counsel
with an additional copy (which shall not constitute notice) to each of
the members of the Special Committee and:
Dechert LLP
0000 X Xxxxxx XX
Xxxxxxxxxx, XX 00000
Attn: Sander M. Bieber
and
Pillsbury Xxxxxxxx Xxxx Xxxxxxx LLP
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxx
Section 8.3. 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
any 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 fullest extent possible.
Section 8.4. Entire Agreement; Assignment. This Agreement (including the
Exhibits hereto) constitutes the entire agreement among the parties with respect
to the subject matter hereof and supersede all prior agreements and
undertakings, both written and oral, among the parties, or any of them, with
respect to the subject matter hereof. This Agreement shall not be assigned by
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operation of law or otherwise without the prior written consent of each of the
other parties provided, that either of the Parent Group or Merger Sub may assign
this Agreement and any or all rights or obligations hereunder to any of its
Affiliates; provided, further, however, that such assignment shall not relieve
the Parent Group or Merger Sub, as applicable, of its obligations hereunder.
Section 8.5. Parties in Interest. Except (i) as provided in Section 5.3
which shall be enforceable by the current and former officers and directors and
their respective successors and assigns (and as to which each of the foregoing
is an express third party beneficiary), and (ii) with respect to Article II,
with respect to which, from and after the Effective Time, the Minority
Stockholders of the Company are expressly intended as third party beneficiaries
and shall have the right to enforce the terms and conditions of the CVR against
the parties hereto, the Parent Group, Merger Sub and the Company hereby agree
that their respective representations, warranties and covenants set forth herein
are solely for the benefit of the other party hereto, in accordance with and
subject to the terms of this Agreement, and this Agreement is not intended to,
and does not, confer upon any person other than the parties hereto any rights or
remedies hereunder, including the right to rely upon the representations and
warranties set forth herein.
Section 8.6. Governing Law. This Agreement and all disputes between the
parties under or related to this Agreement shall be governed by, and construed
in accordance with, the laws of the State of Delaware (without giving effect to
any conflict of laws principles that would result in the application of the laws
of any other jurisdiction).
Section 8.7. Expenses. Except as otherwise specifically provided herein,
each party shall bear its own expenses in connection with this Agreement and the
transactions contemplated hereby.
Section 8.8. Waivers and Amendments. This Agreement may be amended, waived,
modified or supplemented only by a written instrument executed by each of the
parties hereto and in the case of a waiver, executed by the party hereto against
whom enforcement of such waiver is sought, in each case, if by the Company, only
with the approval of the Special Committee. The waiver by any party hereto of a
breach of any provision of this Agreement shall not operate or be construed as a
waiver of any subsequent breach, whether or not similar, unless such waiver
specifically states that it is to be construed as a continuing waiver.
Section 8.9. WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY LAW,
THE PARTIES HERETO HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY
DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION. THE
SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES
THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS
AGREEMENT, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND
ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THE PARTIES HERETO ACKNOWLEDGE THAT
THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT
17
EACH HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT
EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. THE
PARTIES HERETO FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER
WITH ITS, HIS OR HER, AS THE CASE MAY BE, LEGAL COUNSEL, AND THAT EACH KNOWINGLY
AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR TO ANY OTHER
DOCUMENTS OR AGREEMENTS RELATING TO THE TRANSACTIONS CONTEMPLATED HEREBY. IN THE
EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL
BY THE COURT.
Section 8.10. Headings. The descriptive headings contained in this
Agreement are included for convenience of reference only and shall not affect in
any way the meaning or interpretation of this Agreement.
Section 8.11. Counterparts. This Agreement may be executed and delivered
(including by facsimile, ".pdf," or other electronic transmission) in one or
more counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.
Section 8.12. Specific Performance. The parties hereby expressly recognize
and acknowledge that immediate, extensive and irreparable damage would result,
no adequate remedy at law would exist, and damages would be difficult to
determine in the event that any provision of this Agreement is not performed in
accordance with its specific terms or is otherwise breached. Therefore, in
addition to, and not in limitation of, any other remedy available to any party,
a party under this Agreement shall be entitled to specific performance of the
terms hereof and immediate injunctive relief, without the necessity of proving
the inadequacy of money damages as a remedy and without bond or other security
being required. Such remedies, and any and all other remedies provided for in
this Agreement, shall, however, be cumulative in nature and not exclusive and
shall be in addition to any other remedies whatsoever which any party may
otherwise have. Each of the parties hereby acknowledges and agrees that it may
be difficult to prove damages with reasonable certainty, that it may be
difficult to procure suitable substitute performance, and that injunctive relief
and/or specific performance will not cause an undue hardship to the parties.
Each of the parties hereby further acknowledges that the existence of any other
remedy contemplated by this Agreement does not diminish the availability of
specific performance of the obligations hereunder or any other injunctive
relief. Each party hereby further agrees that in the event of any action by the
other party for specific performance or injunctive relief, it will not assert
that a remedy at law or other remedy would be adequate or that specific
performance or injunctive relief in respect of such breach or violation should
not be available on the grounds that money damages are adequate or any other
grounds.
Section 8.13. Jurisdiction. Each of the parties hereto (a) consents to
submit itself to the personal jurisdiction of (i) the Delaware Court of Chancery
18
and any state appellate court therefrom within the State of Delaware (unless the
Delaware Court of Chancery shall decline to accept jurisdiction over a
particular matter, in which case, in any federal court located within the State
of Delaware), and (ii) any state or federal court sitting in the State of New
York, County of New York, including the federal district court for the Southern
District of New York in the event any dispute arises out of this Agreement or
any of the transactions contemplated by this Agreement, (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, (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 said courts designated above, and (d)
consents to service being made through the notice procedures set forth in
Section 8.2. Each of the Company, the Parent Group and Merger Sub hereby agrees
that service of any process, summons, notice or document by U.S. registered mail
to the respective addresses set forth in Section 8.2 shall be effective service
of process for any suit or proceeding in connection with this Agreement or the
transactions contemplated hereby.
Section 8.14. Interpretation. When reference is made in this Agreement to a
Section, such reference shall be to a Section of this Agreement unless otherwise
indicated. Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation." The words "hereof," "herein," "hereby" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement. This Agreement
shall be construed without regard to any presumption or rule requiring
construction or interpretation against the party drafting or causing any
instrument to be drafted.
Section 8.15. CVR Distribution Amount Calculations. Since the Tax
Allocation Agreement, dated July 25, 2008 (the "Tax Allocation Agreement"),
between the Company and Starfire Holding Corporation, by its terms provides that
no payments shall be due thereunder after immediately before the Effective Time,
in calculating whether a payment is due to the holders of the CVRs pursuant to
the terms of this Agreement, no amounts shall be deemed payable to the Company
or from the Company as a result of the provisions of the Tax Allocation
Agreement. By way of example, attached hereto as Annex A for illustrative
purposes only is an sample calculation of the CVR Distribution Amount to be made
hereunder.
Section 8.16. Certain Definitions. Except as otherwise specified or as the
context may otherwise require, the following terms shall have the respective
meanings set forth below whenever used in this Agreement and shall include the
singular as well as the plural:
"Adjusted Outstanding Shares" means the Outstanding Shares plus the number
of shares of Common Stock into which the Convertible Preferred Stock would be
converted as of the Maturity Date assuming that (A) the Convertible Preferred
Stock remained outstanding through and as of the Maturity Date and (B) the
liquidation preference adjustment for the Convertible Preferred Stock is
pro-rated for the period of time between the immediately preceding dividend
payment date (assuming the Convertible Preferred Stock remained outstanding
through and as of the Maturity Date) with respect thereto and the Maturity Date.
19
"Affiliate" of any specified Person means any other Person which directly
or indirectly through one or more intermediaries controls, or is controlled by,
or is under common control with, such Person.
"beneficially owned" with respect to any Shares has the meaning ascribed to
such term under Rule 13d-3(a) of the Exchange Act.
"Base Value" means the lesser of (i) the Maturity Date Implied Value Per
Share and (ii) the Maturity Date Implied Value Per Share As Converted.
"Board of Directors" means the Board of Directors of the Company or any
committee of directors lawfully exercising the relevant powers of said Board or
Directors.
"Business Day" means any day on which the principal offices of the SEC in
Washington, D.C. are open to accept filings or, in the case of determining a
date when any payment is due, any day on which banks are not required or
authorized by law to close in New York, New York.
"Company Sale" means the occurrence of any of the following events: (i) a
sale or transfer, directly or indirectly, in a single transaction or a series of
related or unrelated transactions (other than (i) up to $5,000,000 in the
aggregate of sales or transfers of obsolete equipment and (ii) sales or
transfers to customers of the Company in the ordinary course of business
consistent with the Company's past practice in type and amount), of any assets
of the Surviving Corporation and its Subsidiaries (including existing or newly
issued equity interests any of the Company's Subsidiaries) to a third party that
is not the Parent Group or any of its Affiliates from which the Parent Group or
its Affiliates receives aggregate proceeds in U.S. Dollars (with any non-cash
proceeds to be valued at their fair market value as determined in good faith by
the Parent Group as validated by an unaffiliated nationally recognized valuation
firm) in excess of fifty percent (50%) of the sum of (x) $254,905,231 plus (y)
the liquidation preference of the Convertible Preferred Stock as of the
Effective Time plus (z) the liquidation preference of the Perpetual Preferred
Stock as of the Effective Time (a "Company Asset Sale"); provided, that, the
liquidation preference adjustment for the Convertible Preferred Stock and the
Perpetual Preferred Stock shall be pro-rated for the period of time between the
immediately preceding dividend payment date with respect thereto and the
Effective Time; (ii) any "person" or "group", other than Permitted Holders, the
Parent Group or any Affiliate thereof, is or becomes the "beneficial owner",
directly or indirectly, of shares of capital stock of the Surviving Corporation,
when taken together with all other such "persons" or "groups", representing
fifty percent (50%) or more of the then-outstanding capital stock of the
Surviving Corporation based on either voting power or economic interest (a
"Company Stock Sale"); or (iii) the Surviving Corporation consolidates with, or
merges with or into, another Person (other than a Permitted Holder, the Parent
Group or any Affiliate thereof) in a transaction in which the Surviving
Corporation, any of its Subsidiaries, any Permitted Holder, the Parent Group and
any Affiliate thereof own in the aggregate less than fifty percent (50%) of the
then-outstanding capital stock of the entity surviving such consolidation or
merger based on either voting power or economic interest (a "Company Merger").
"control" (including the terms "controlled," "controlled by" and "under
common control with") means the possession, directly or indirectly or as trustee
20
or executor, of the power to direct or cause the direction of the management
policies of a person, whether through the ownership of stock, as trustee or
executor, by contract or credit arrangement or otherwise.
"CVR Distribution Amount" means the amount, if any, by which the Base Value
exceeds $1.40.
"Maturity Date Implied Value Per Share" means the amount obtained by
dividing (i) (A) the Net Proceeds, less (B) the liquidation preference of the
Convertible Preferred Stock and the Perpetual Preferred Stock as of the Maturity
Date (assuming the Convertible Preferred Stock and the Perpetual Preferred Stock
remained outstanding through and as of the Maturity Date); provided, that, the
liquidation preference adjustment for the Convertible Preferred Stock and the
Perpetual Preferred Stock shall be pro-rated for the period of time between the
immediately preceding dividend payment date (assuming the Convertible Preferred
Stock and the Perpetual Preferred Stock remained outstanding through and as of
the Maturity Date) with respect thereto and the Maturity Date, less (C) the
aggregate amount of any and all contributions of capital or assets (the value of
such assets to be determined in good faith by the Parent Group as validated by
an unaffiliated nationally recognized valuation firm) made from a member of the
Parent Group or any Affiliate thereof to the Surviving Corporation (whether or
not made in exchange for any capital stock or other equity thereof and including
by way of a loan to the Surviving Corporation or its Subsidiaries to the extent
outstanding as of the Maturity Date) after the Effective Time and prior to the
Maturity Date, plus (D) the aggregate amount of dividends paid, loans (but
solely to the extent outstanding as of the Maturity Date) or distributions
(other than payments of principal or interest on any loans, provided, that the
interest rate of such loans does not exceed what the Surviving Corporation would
have been able to obtain from a unaffiliated third party) of either cash or
assets (other than any Tax Assets) (the value of such assets to be determined in
good faith by the Parent Group as validated by an unaffiliated nationally
recognized valuation firm) made by the Surviving Corporation to any of the
Parent Group or their Affiliates (other than the Company or any Subsidiary
thereof) after the Effective Time and prior to the Maturity Date, in each case,
excluding any dividends or distributions funded from proceeds included in the
calculation of Net Proceeds under clause (ii) of the definition of Net Proceeds
by (ii) the Outstanding Shares.
"Maturity Date Implied Value Per Share As Converted" means the amount
obtained by dividing (i) (A) the Net Proceeds, less (B) the liquidation
preference of the Perpetual Preferred Stock as of the Maturity Date (assuming
the Perpetual Preferred Stock remained outstanding through and as of the
Maturity Date); provided, that, the liquidation preference adjustment for the
Perpetual Preferred Stock shall be pro-rated for the period of time between the
immediately preceding dividend payment date (assuming the Perpetual Preferred
Stock remained outstanding through and as of the Maturity Date) with respect
thereto and the Maturity Date, less (C) the aggregate amount of any and all
contributions of capital or assets (the value of such assets to be determined in
good faith by the Parent Group as validated by an unaffiliated nationally
recognized valuation firm) made from a member of the Parent Group or any
Affiliate thereof to the Surviving Corporation (whether or not made in exchange
for any capital stock or other equity thereof and including by way of a loan to
the Surviving Corporation or its Subsidiaries to the extent outstanding as of
the Maturity Date) after the Effective Time and prior to the Maturity Date, plus
(D) the aggregate amount of dividends paid, loans (but solely to the extent
21
outstanding as of the Maturity Date) or distributions (other than payments of
principal or interest on any loans, provided, that the interest rate of such
loans does not exceed what the Surviving Corporation would have been able to
obtain from a unaffiliated third part) of either cash or assets (other than any
Tax Assets) (the value of such assets to be determined in good faith by the
Parent Group as validated by an unaffiliated nationally recognized valuation
firm) made by the Surviving Corporation to any of the Parent Group or their
Affiliates (other than the Company or any Subsidiary thereof) after the
Effective Time and prior to the Maturity Date, in each case, excluding any
dividends or distributions funded from proceeds included in the calculation of
Net Proceeds under clause (ii) of the definition of Net Proceeds by (ii) the
Adjusted Outstanding Shares.
"Indemnification Agreements" shall mean the Indemnification Agreement,
dated November 1, 2004, by and among the Company, Starfire Holdings Corporation
and Xxxxxxx Xxxxxx and Indemnification Agreement, dated November 1, 2004, by and
among the Company, Starfire Holdings Corporation and Xxxxxx Xxxxxx.
"Minority Shares" means the number of outstanding shares of Common Stock
owned by the Minority Stockholders.
"Minority Stockholders" means the stockholders of the Company other than
Merger Sub and its Affiliates.
"Net Proceeds" means (i) the amount in U.S. Dollars of aggregate proceeds
(with any non-cash proceeds to be valued at their fair market value as
determined in good faith by the Parent Group as validated by an unaffiliated
nationally recognized valuation firm) received by the Surviving Corporation or
any of its Affiliates in respect of any Company Sale, plus (ii) in the case of
any Company Asset Sale following which no Company Stock Sale or Company Merger
occurs on or prior to the Maturity Date, the fair market value (to be determined
in good faith by the Board of Directors of Parent Group as validated by an
unaffiliated valuation firm) of any assets (other than any Tax Assets) of the
Surviving Corporation or its Subsidiaries retained by Parent Group or its
Affiliates (including the Company and its Subsidiaries) at the Maturity Date
(excluding any and all amounts included in clause (i) above), plus (iii) in the
case of any Company Stock Sale, the fair market value (to be determined in good
faith by the Board of Directors of Parent Group as validated by an unaffiliated
nationally recognized valuation firm) of the shares of capital stock of the
Company retained by the Parent Group or its Affiliates at the Maturity Date
(without attributing any value to any Tax Assets), plus (iv) in the case of any
Company Merger, the fair market value (to be determined in good faith by the
Board of Directors of Parent Group as validated by an unaffiliated nationally
recognized valuation firm) of the shares of capital stock of the entity
surviving such consolidation or merger retained by the Parent Group or its
Affiliates at the Maturity Date (without attributing any value to any Tax
Assets) minus (x) the costs relating to such transactions (including, without
limitation, regulatory filing fees, legal, accounting and investment banking
fees, and brokerage and sales commissions), and (y) in the case of any Company
Asset Sale, all liabilities of the Surviving Corporation or its Subsidiaries to
unaffiliated third parties (for the avoidance of doubt, no obligations under the
Convertible Preferred Stock and the Perpetual Preferred Stock shall be
considered a liability for the purposes of this clause (y)) that are retained by
22
Parent Group or any of its Affiliates following consummation of such transaction
to the extent not deducted from Net Proceeds pursuant to clause (C) of the
definitions of Maturity Date Implied Value Per Share and Maturity Date Implied
Value Per Share As Converted, as applicable.
"Outstanding Shares Outstanding Shares" means 182,075,165.
"Person" or "Person" means and includes an individual, a partnership, a
joint venture, a corporation, a limited liability company, a trust, an
association, a joint-stock company, an unincorporated organization and a
government or any department or agency thereof.
"Special Committee" means the existing Special Committee of the Company's
Board of Directors, comprised of Messrs. Xxxxxx Xxxxxx and Xxxxxxx Xxxxxx.
"Subsidiary" or "Subsidiaries" of the Company, the Surviving Corporation,
the Parent Group or any other person means any corporation, partnership, joint
venture or other legal entity of which the Company, the Surviving Corporation,
the Parent Group or such other person, as the case may be (either alone or
through or together with any other Subsidiary), owns, directly or indirectly,
50% or more of the stock or other equity interests the holder of which is
generally entitled to vote for the election of the board of directors or other
governing body of such corporation or other legal entity.
"Tax" means all taxes of any kind, including any federal, state, local and
foreign income, profits, license, severance, occupation, windfall profits,
capital gains, capital stock, transfer, registration, social security (or
similar), franchise, gross receipts, payroll, sales, employment, use, property,
ad valorem, real property, personal property, excise, value added, stamp,
alternative or add-on minimum, withholding and other taxes, together with all
interest, penalties and additions imposed with respect to such taxes that are
imposed by any Governmental Entity responsible for the imposition of any such
tax whether disputed or not.
"Tax Assets" means any net operating losses and net operating loss
carryforwards of the Company and its Subsidiaries for tax purposes and any of
their other tax assets including, without limitation, items or amounts of
deduction, expense, credit, and loss and carryforwards of any such items or
amounts.
[Remainder of Page Left Blank Intentionally]
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IN WITNESS WHEREOF, the Parent Group, Merger Sub and the Company have
caused this Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
XO HOLDINGS, INC.
By: /s/ Xxxxx X. Xxxxxx
-------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial
Officer
ARNOS CORP.
By: /s/ Xxxxx Xxxxx
---------------
Name: Xxxxx Xxxxx
Title: Authorized Signatory
ARNOS SUB CORP.
By: /s/ Xxxxx Xxxxx
---------------
Name: Xxxxx Xxxxx
Title: President
BARBERRY CORP.
By: /s/ Xxxxx Xxxxx
---------------
Name: Xxxxx Xxxxx
Title: Secretary
HIGH RIVER LIMITED PARTNERSHIP
By: Xxxxxx Investments LLC, its
general partner
By: Barberry Corp., its member
By: /s/ Xxxxx Xxxxx
---------------
Name: Xxxxx Xxxxx
Title: Secretary
ACF INDUSTRIES HOLDING CORP.
By: /s/ Xxxxx Xxxxx
---------------
Name: Xxxxx Xxxxx
Title: Vice President
XO MERGER CORP.
By: /s/ Xxxxx Xxxxx
---------------
Name: Xxxxx Xxxxx
Title: Treasurer and
Secretary
[Signature page to the Agreement and Plan of Merger]
24
