EXHIBIT 2.1
FORM OF CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT (this "Agreement") is made and
entered into as of February [ ], 2005 by and between [NAME OF CONTRIBUTOR], a
[TYPE OF ENTITY] (the "Contributor"), and Valor Communications Group, Inc., a
Delaware corporation("Newco").
WHEREAS, pursuant to the contractual rights granted to them,
certain members of Valor Telecommunications, LLC, a Delaware limited liability
company (the "Company"), Valor Telecommunications Southwest, LLC, a Delaware
limited liability company ("SWI"), and Valor Telecommunications Southwest II,
LLC, a Delaware limited liability company ("SWII" and together with the Company
and SWI, the "Companies"), have determined that there should be an initial
public offering of the securities of Newco as a means to accomplish an initial
public offering of the business enterprise that is conducted collectively by the
Companies;
WHEREAS, Newco intends to make an initial public offering (the
"IPO") of shares of Newco's common stock, par value $0.0001 per share (the
"Common Stock"), pursuant to an effective registration statement on Form S-1
filed with the Securities and Exchange Commission (the "Registration
Statement");
WHEREAS, in order to implement the IPO and pursuant to the
terms of their respective limited liability company agreements, the Company, SWI
and SWII will each become a wholly-owned subsidiary of Newco pursuant to the
series of transactions that are described in Annex A attached hereto (the
"Reorganization");
WHEREAS, the Contributor currently owns [TYPE OF EQUITY
INTEREST] in [VALOR ENTITY]; and
WHEREAS, in order to consummate Step [ ] of the
Reorganization, the parties hereto desire to enter into this Agreement in order
to provide for the contribution by the Contributor of the Contributed Units (as
defined below) to Newco in exchange for the consideration set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements herein contained and intending to be legally
bound hereby, the parties hereto hereby agree as follows:
1. DEFINITIONS. The following terms are defined as
follows:
"Closing Date" means the date on which the shares of Common
Stock that are to be sold to the underwriters in connection with the IPO are
actually sold by Newco to such underwriters.
"Consideration" means the shares of Common Stock that are
issued to the Contributor pursuant to Section 2 hereof.
"Contributed Units" means all of the [TYPE OF EQUITY INTEREST]
in [VALOR ENTITY] owned by the Contributor.
2. CONTRIBUTIONS TO NEWCO. Immediately prior to the
consummation of the IPO, the Contributor hereby sells, assigns
and transfers (the "Contribution") the Contributed Units to
Newco, and Newco hereby accepts the Contributed Units. In
exchange for the Contribution, on the Closing Date Newco shall
issue to the Contributor the number of shares of Common Stock
set forth opposite the Contributor's name on Schedule A
attached hereto under the column labeled "Common Stock".
3. REPRESENTATIONS AND WARRANTIES BY THE CONTRIBUTOR.
The Contributor hereby represents and warrants to Newco that:
(a) Ownership. The Contributor owns beneficially and
of record all of the Contributed Units to be transferred
hereunder, free and clear of any taxes, liens, security
interests, transfer restrictions, options, purchase rights or
other encumbrances. Other than the Contributed Units, the
Contributor does not own beneficially or of record any other
interests, units, other equity or debt securities of [VALOR
ENTITY] or any options, warrants or other rights convertible
into or exchangeable for or otherwise representing the right
to acquire any equity or debt securities of [VALOR ENTITY].
The Contributor acknowledges that the Consideration to be
received by the Contributor is consideration for all of the
Contributor's rights, title and interest in [VALOR ENTITY] and
that any such interest that should have been transferred
pursuant to this Agreement that is later discovered promptly
shall be transferred by the Contributor to Newco for no
additional consideration;
(b) Due Authorization. The Contributor has full power
and authority (including full corporate or other entity power
and authority, if applicable) to execute, deliver and perform
its obligations under this Agreement, and this Agreement
constitutes the legal, valid and binding obligation of the
Contributor, enforceable against the Contributor in accordance
with its terms;
(c) Conflicts. The execution, delivery and
performance of this Agreement by the Contributor does not and
will not (i) violate any constitution, statute, regulation,
rule, injunction, judgment, order, decree, ruling, charge, or
other restriction of any government, governmental agency, or
court to which the Contributor is subject or any provision of
its charter, bylaws, or other governing documents, (ii)
conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any party the
right to accelerate, terminate, modify, or cancel, or require
any notice under any agreement, contract, lease, license,
instrument, or other arrangement to which the Contributor is a
party or by which the Contributor is bound or to which any of
the Contributor's assets is subject, or (iii) result in the
imposition or creation of a lien or security interest upon or
with respect to the Contributed Units;
(d) Sophisticated Investor. The Contributor is
sophisticated in financial matters and is able to evaluate the
risks and benefits of the investment in the Consideration to
be acquired by it pursuant to this Agreement;
2
(e) Access to Information. The Contributor has had an
opportunity to ask questions and receive answers concerning
the terms and conditions of the IPO, the Reorganization and
the issuance of the Consideration and has had full access to
such other information concerning Newco, the Companies and
their subsidiaries as the Contributor has requested. The
Contributor hereby represents and warrants that it has
received and reviewed the version of the Registration
Statement filed with the Securities and Exchange Commission on
January ___, 2005;
(f) Valuation Report. The Contributor hereby
acknowledges receipt of (i) the valuation report of Xxxxxxxx
Xxxxx Xxxxxx & Zukin ("HLHZ") that provides HLHZ's opinion
regarding the range of values that the holders of the
membership units of each of the Companies (the "Holders")
might expect to receive based upon different enterprise
valuation assumptions and the fairness of the consideration to
be received by the Holders in connection with the
Reorganization and the IPO, and (ii) the [DISTRIBUTION REPORT]
of HLHZ that provides, based on the [IPO VALUATION], HLHZ's
calculation and confirmation of the allocation of the value of
the Common Stock to be received by the Holders in connection
with the Reorganization among such Holders in a manner that
gives effect to the relative value of each of the Companies
and the relative ownership interests of each of the Holders in
each of the Companies. The Contributor further acknowledges
that the allocation of value of the Consideration received by
the Contributor hereunder is fair and reasonable, is
consistent with the distribution provisions contained in the
LLC Agreements and that such Contributor, apart from payment
of the Consideration as contemplated by this Agreement, has no
further rights to any distributions or other payments with
respect to the LLC Agreements. Such Contributor hereby
releases and discharges each of the Companies and each of
their respective subsidiaries and each of their respective
former or present employees, officers, directors,
equityholders and agents and waives any and all claims, rights
and causes of action of any kind or nature whatsoever that
such Contributor may have had or may now have to the contrary;
and
(g) Reorganization. The Contributor hereby
acknowledges that the Reorganization involves a series of
steps as described in Annex A and the transactions
contemplated by this Agreement constitute Step [ ] of the
Reorganization referred to in Annex A, and represents that it
is the intention of the Contributor that the various steps set
forth in Annex A are consummated in the sequence set forth
therein.
4. REPRESENTATIONS AND WARRANTIES BY NEWCO. Newco
hereby represents and warrants to the Contributor that:
(a) Organization; Good Standing. Newco is a
corporation duly organized, validly existing, and in good
standing under the Delaware General Corporation Law, as
amended (the "DGCL"), and has all requisite power and
authority to own and operate its properties and assets and to
carry on its business as now conducted and as proposed to be
conducted, to execute, deliver and carry out the provisions of
this Agreement and to issue the Consideration;
3
(b) Due Authorization. Newco has full corporate power
and authority to execute, deliver and perform its obligations
under this Agreement, and this Agreement constitutes the
legal, valid and binding obligation of Newco, enforceable
against Newco in accordance with its terms;
(c) Valid Issuance of Consideration. The
Consideration, when issued and delivered in accordance with
the terms of this Agreement for the consideration expressed
herein, will be duly and validly issued, and will be free of
restrictions on transfer other than restrictions on transfer
contained in Newco's Certificate of Incorporation and bylaws,
and under applicable state and federal securities laws. The
Consideration when so issued will be duly authorized, fully
paid and non-assessable;
(d) Conflicts. The execution, delivery and
performance of this Agreement by Newco, including the
authorization, issuance and delivery of the Consideration,
does not and will not (i) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling,
charge, or other restriction of any government, governmental
agency, or court to which Newco is subject or any provision of
its Certificate of Incorporation, bylaws, or other governing
documents, (ii) conflict with, result in a breach of,
constitute a default under, result in the acceleration of,
create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any agreement,
contract, lease, license, instrument, or other arrangement to
which Newco is a party or by which Newco is bound or to which
any of Newco's assets is subject, or (iii) result in the
imposition or creation of a lien or security interest upon or
with respect to the Consideration; and
(e) Reorganization. Newco hereby acknowledges that
the Reorganization involves a series of steps as described in
Annex A and the transactions contemplated by this Agreement
constitute Step [ ] of the Reorganization referred to in Annex
A, and represents that it is the intention of Newco that the
various steps set forth in Annex A are consummated in the
sequence set forth therein. Newco agrees to take such actions
as are set forth in Annex A, including the acceptance of the
transfers made by the various Holders pursuant to the
Reorganization.
5. TAX MATTERS. The Contributor and Newco intend that
the Contribution be characterized as an "exchange"
underSectio 51(a) of the Internal Revenue Code of 1986, as
amended, and neither the Contributor nor Newco will take any
position to the contrary on any federal, state, local or
foreign tax return or report.
6. FURTHER ASSURANCES. From time to time following
the date hereof, the parties hereto shall execute and deliver
such other instruments of assignment, transfer and delivery
(including the delivery by the Contributor to Newco of any
certificates representing shares of capital stock of [VALOR
ENTITY] that were not delivered to Newco on the Closing Date)
and shall take such other actions as any other party hereto
reasonably may request in order to consummate, complete and
carry out the transactions contemplated by this Agreement.
4
7. SEVERABILITY. Whenever possible, each provision of
this Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision
of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule
in any jurisdiction, such invalidity, illegality or
unenforceability will not affect any other provision or the
effectiveness or validity of any provision in any other
jurisdiction, and this Agreement will be reformed, construed
and enforced in such jurisdiction as if such invalid, illegal
or unenforceable provision had never been contained herein.
8. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties contained herein or made in
writing by any party in connection herewith will survive the
execution and delivery of this Agreement, regardless of any
investigation made by Newco or the Company or on their behalf
or by the Contributor or on behalf of the Contributor.
9. INDEMNIFICATION.
(a) The Contributor hereby agrees to indemnify Newco
and hold Newco harmless against and in respect of any and all
losses, liabilities, damages, obligations, claims,
encumbrances, costs and expenses (including costs of suit and
attorneys' fees and expenses) incurred by Newco resulting from
any breach of any representation, warranty, covenant or
agreement made by the Contributor herein or in any instrument,
agreement or document delivered to Newco pursuant hereto.
(b) Newco hereby agrees to indemnify the Contributor
and hold Contributor harmless against and in respect of any
and all losses, liabilities, damages, obligations, claims,
encumbrances, costs and expenses (including costs of suit and
attorneys' fees and expenses) incurred by the Contributor
resulting from any breach of any representation, warranty,
covenant or agreement made by Newco herein or in any
instrument, agreement or document delivered to the Contributor
pursuant hereto.
10. COMPLETE AGREEMENT. This Agreement embodies the
complete agreement and understanding among the parties hereto
and supersedes, preempts and terminates all other prior
understandings, agreements or representations by or among the
parties hereto, written or oral, to the extent relating to the
subject matter hereof.
11. COUNTERPARTS. This Agreement may be executed
(including by facsimile) in separate counterparts, each of
which will be deemed to be an original and all of which taken
together will constitute one and the same agreement.
12. SUCCESSORS AND ASSIGNS. This Agreement is
intended to bind and inure to the benefit of and be
enforceable by the parties hereto and their respective
successors, heirs and assigns. Neither party may assign this
Agreement without the prior written consent of the other
party.
13. NO THIRD PARTY BENEFICIARIES. There are no third
party beneficiaries of this Agreement and nothing in this
Agreement, express or implied, is
5
intended to confer on any person other than the parties hereto
other than their respective successors, heirs and assigns, any
rights, remedies, obligations or liabilities.
14. GOVERNING LAW; WAIVER OF JURY TRIAL. This
Agreement, and the rights of the parties under this Agreement,
shall be governed by and construed in accordance with the laws
of the State of Delaware, that are applicable to contracts
that are made in and to be fully performed in such state,
without giving effect to any choice of law or conflict of law
rules or provisions (whether of the State of Delaware or any
other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Delaware. The
parties hereto hereby waive, to the fullest extent permitted
by applicable law, any right to trial by jury with respect to
any action or proceeding arising out of or relating to this
Agreement.
15. REMEDIES. The parties hereto acknowledge and
agree that due to the unique nature of the transactions
contemplated hereby money damages will not be an adequate
remedy for any breach of the provisions of this Agreement and
that any party hereto will have the right to injunctive relief
or specific performance, in addition to all of its other
rights and remedies at law or in equity, to enforce the
provisions of this Agreement.
16. AMENDMENTS AND WAIVERS. Any provision of this
Agreement may be amended or waived only with the prior written
consent of each of the parties hereto.
* * * * *
6
IN WITNESS WHEREOF, the parties hereto have executed this
Contribution Agreement as of the date first written above.
VALOR COMMUNICATIONS GROUP, INC.
By: ____________________________
Name:
Title:
[NAME OF CONTRIBUTOR]
By: ____________________________
Name:
Title:
ANNEX A
SEQUENCE OF EVENTS CONSTITUTING THE REORGANIZATION
See attached
SCHEDULE A
CONSIDERATION TO BE ISSUED BY NEWCO
NAME OF CONTRIBUTOR COMMON STOCK
[NAME OF CONTRIBUTOR] [______]
