EXHIBIT J
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EXECUTION VERSION
STOCKHOLDER VOTING AGREEMENT
THIS STOCKHOLDER VOTING AGREEMENT (this "Agreement") is made and entered
into as of November 4, 2005, by and between XO Holdings, Inc., a Delaware
corporation ("Seller") and the undersigned stockholder (the "Stockholder").
RECITALS
WHEREAS, concurrent with the execution and delivery hereof, Seller, XO
Communications, Inc., a Delaware corporation (the "Company") and Elk Associates
LLC ("Buyer"), a Delaware limited liability company, are entering into an Equity
Purchase Agreement of even date herewith (as it may be amended from time to time
pursuant to the terms thereof, the "Purchase Agreement"), which provides for the
sale by the Seller of all of the equity interests in XO Communications, LLC, a
Delaware limited liability company and wholly-owned subsidiary of the Seller,
constituting substantially all of the assets of the Seller;
WHEREAS, as of the date hereof, the Stockholder is the record owner of such
number of shares of Company Common Stock and Company Preferred Stock as is
indicated on Exhibit A to this Agreement, and is also a beneficial owner of such
shares for purposes of Rule 13d-3 under the Securities Exchange Act of 1934; and
WHEREAS, in consideration of the execution and delivery of the Purchase
Agreement by the Company and so as to facilitate the consummation of the
transactions contemplated by the Purchase Agreement, the Stockholder desires to
agree to vote its Shares (as defined below) on the terms and subject to the
conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein, and intending to be legally bound, the parties hereto
hereby agree as follows:
1. Certain Definitions.
(a) Capitalized terms used herein without definition are used as defined in
the Purchase Agreement, and, in addition:
"Board" means the Board of Directors of the Company.
"Company Common Stock" means the shares of common stock, $0.01 par
value per share, of the Company.
"Company Preferred Stock" means the shares of preferred stock, $0.01
par value per share, of the Company designated as 6% Series A Convertible
Preferred Stock.
"Company Stockholder Approval" means the adoption by the Stockholder
of the Purchase Agreement and the approval of the transactions contemplated
thereby or referenced therein, in each case upon the recommendation of the
Board and the Special Committee.
"Expiration Date" means the earlier of (i) the day after the Company
Stockholder Approval and (ii) the termination of the Purchase Agreement in
accordance with its terms.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Illiquid Proposal" means an Alternative Transaction or Competing
Proposal that contemplates consideration other than cash or cash
equivalents.
"Person" means any individual, corporation, limited liability company,
general or limited partnership, unincorporated association, joint venture,
or other business enterprise or entity.
"Qualifying Superior Proposal" means a Superior Proposal that (a) is
not subject to the satisfaction of the competing bidder or any party
providing financing to the bid with the results of any further due
diligence investigation of the Company; and (b) is not subject to a
financing condition, other than a condition coupled with a commitment
letter or commitment letters from a financial institution or financial
institutions of recognized standing which themselves contain only customary
conditions and are not subject to internal approvals; and provided further
that (i) a Competing Proposal shall not be deemed to be a Qualifying
Superior Proposal if it contemplates a termination fee of more than 3% of
the purchase price provided therein plus actual, reasonable out-of-pocket
expenses and (ii) an Alternative Transaction shall not be deemed to be a
Qualifying Superior Proposal if it contemplates a termination fee of more
than 3% of the purchase price provided therein, unless the offer
contemplates a bid of at least $75 million more than the highest
outstanding bid, but in any event the termination fee shall be no more than
4% of the purchase price provided therein.
"Shares" means (i) all shares of Company Common Stock, Company
Preferred Stock and other voting securities of Company owned, beneficially
or of record, by the Stockholder as of the date hereof, (ii) all additional
shares of Company Common Stock, Company Preferred Stock and other voting
securities of Company acquired by the Stockholder, beneficially or of
record, during the period commencing with the execution and delivery of
this Agreement and expiring on the Expiration Date, and (iii) such other
shares of Company Common Stock, Company Preferred Stock and other voting
securities of Company over which the Stockholder has or will have voting
power during the period commencing with the execution and delivery of this
Agreement and expiring on the Expiration Date.
"Special Committee" means that special committee of the Board
appointed on April 22, 2005.
(b) Any singular term in this Agreement shall be deemed to include the
plural, and any plural term the singular. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed
followed by the words "without limitation."
(c) Defined terms used herein but not otherwise defined herein have the
meaning set forth in the Purchase Agreement.
2. Transfer of Voting Rights. At all times during the period commencing
with the execution and delivery of this Agreement and expiring on the Expiration
Date, the Stockholder shall not deposit (or permit the deposit of) any Shares in
a voting trust or grant any proxy or enter into any voting agreement or similar
agreement in contravention of the obligations of the Stockholder under this
Agreement with respect to any of the Shares.
3. Agreement to Vote Shares. The Stockholder hereby agrees that, until this
Agreement is terminated pursuant to Section 6 hereof, at any meeting of the
holders of Shares (including a decision by written consent), however called, and
at every adjournment or postponement thereof, the Stockholder shall:
(a) appear at the meeting or otherwise cause the Shares to be counted as
present thereat for purposes of establishing a quorum;
(b) subject to Section 3(d) hereof, vote the Shares or cause the Shares to
be voted at the Stockholders' Meeting called for the purpose of voting on
the Purchase Agreement and the transactions contemplated thereby, or
execute consents or cause such consents to be executed in respect of the
Shares when requested to execute such consents by the Special Committee for
the purpose of voting for the Purchase Agreement and the transactions
contemplated thereby, in respect thereof, in favor of the adoption by the
Seller's stockholders of the Purchase Agreement and the approval of the
transactions contemplated thereby, including any action necessary to
effectuate the Restructuring Merger, waive any dissenter or appraisal right
it may have in respect of such transaction and any action required in
furtherance thereof;
(c) subject to 3(d) hereof, vote, or execute consents in respect of the
Shares, or cause the Shares to be voted, or consents to be executed in
respect thereof, against any amendment of the Company's Certificate of
Incorporation or By-laws or other proposal, action or transaction involving
the Company or any of its Subsidiaries or any of its stockholders, which
amendment or other proposal, action or transaction could reasonably be
expected to (A) prevent or materially impede or delay the consummation of
the Purchase Agreement or the other transactions contemplated by the
Purchase Agreement or the consummation of the transactions contemplated by
this Agreement, or (B) change in any manner the voting rights of the Shares
presented to the stockholders of the Company (regardless of any
recommendation of the Board of Directors of the Company) or in respect of
which vote or consent of the Company's stockholders is requested or sought;
provided, however, the Stockholder shall vote, or execute consents in
respect of the Shares or cause the Shares to be voted, or consents to be
executed in favor of any amendment of the Company and any of its
Subsidiaries' Certificate of Incorporation or By-laws or other proposal,
action or transaction, as necessary, in order to effect the transactions
contemplated by the Restructuring Merger.
(d) Notwithstanding the provisions of the foregoing, and provided that each
of Seller and the Company complies with their respective obligations under
the Purchase Agreement, including, without limitation, Section 7.3 thereof,
the Stockholder agrees that it, without the consent of the Special
Committee, shall (i) not vote in favor of or consent to adoption of the
Purchase Agreement and the transactions contemplated thereby (including the
Limited Liability Company Agreement Amendment) unless and until the Proxy
Statement has been reviewed and approved by the SEC, (ii) not vote in favor
of or consent to the adoption of the Purchase Agreement and the
transactions contemplated thereby (including the Limited Liability Company
Agreement Amendment) following any termination of the Purchase Agreement
pursuant to Section 11(c)(i), and (iii) (A) vote the Shares or cause the
Shares to be voted at any meeting of the stockholders of the Company
called, or (B) execute consents or cause such consents to be executed in
respect of the Shares when requested to execute such consents by the
Special Committee, for the purpose of voting for the consummation of any
Alternative Transaction which has been determined to be a Superior Proposal
(other than an Illiquid Proposal) in accordance with Section 7.3(c)(ii) of
the Purchase Agreement and is a Qualifying Superior Proposal, in respect
thereof, in favor of the adoption by the Seller's stockholders of such
Qualifying Superior Proposal, including any action necessary to effectuate
the Restructuring Merger, and any action required in furtherance thereof.
4. Covenants of the Stockholder. The Stockholder covenants and agrees with
the Company and Seller that, during the period commencing on the date hereof and
ending on the date this Agreement is terminated under Article 6 hereof:
(a) The Stockholder shall not, directly or indirectly, sell, transfer,
pledge, hypothecate, encumber, assign or dispose of any Shares (or the
beneficial ownership thereof) or offer to make such a sale, transfer or
other disposition to any person, in each case, in a manner that would
materially impair the ability of the Stockholder to satisfy its obligations
under Section 3 hereof.
(b) The Stockholder shall execute and deliver such other documents and
instruments and take such further actions as are necessary in order to
ensure that the Seller and the Company receives the benefit of this
Agreement.
5. Representations and Warranties of the Stockholder. The Stockholder
hereby represents and warrants to Seller as follows:
(i) The Stockholder has the requisite limited liability company power
and authority to execute, deliver and perform this Agreement and to
consummate the transactions contemplated hereby. The execution, delivery
and performance of this Agreement by the Stockholder and the consummation
of the transactions contemplated hereby have been duly authorized by all
necessary action on the part of the Stockholder. This Agreement has been
duly executed and delivered by or on behalf of the Stockholder and
constitutes a valid and legally binding obligation of the Stockholder,
enforceable against the Stockholder in accordance with its terms, except
that such enforceability may be limited by (x) applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting
creditors' rights generally and (y) equitable principles which may limit
the availability of certain equitable remedies (such as specific
performance) in certain instances.
(ii) As of the date hereof, all of the Shares of which the Stockholder
is the record and beneficial owner of are set forth on Exhibit A hereto,
such Shares are free and clear of any liens, claims, encumbrances,
mortgages, security interests and charges of any nature whatsoever
(collectively, "Encumbrances"), other than Encumbrances created by this
Agreement, and such Shares are not subject to any preemptive right of any
stockholder of the Company.
(iii) The execution and delivery of this Agreement by the Stockholder
does not, and the performance of this Agreement by the Stockholder will
not, (A) require any consent, approval, authorization or permit of, or
filing with or notification to, any Governmental Entity or any other Person
by the Stockholder; (B) conflict with, or result in any violation of, or
default (with or without notice or lapse of time or both) under any
provision of, the certificate of incorporation, by-laws or analogous
documents of the Stockholder or any other agreement to which the
Stockholder is a party, including any voting agreement, stockholder
agreement, voting trust, trust agreement, pledge agreement, loan or credit
agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise or license; or (C) conflict with
or violate any judgment, order, notice, decree, statute, law, ordinance,
rule or regulation applicable to the Stockholder or to any of the
Stockholder's property or assets.
6. Termination. This Agreement shall terminate and be of no further force
or effect as of the Expiration Date except for the provisions of Sections 2 and
3(d) hereof, which shall terminate and be of no further force and effect as of
the earlier of (i) the day after the adoption by the Stockholder of the purchase
agreement relating to the applicable Superior Proposal and the Company
Stockholder Approval and (ii) the termination of such purchase agreement in
accordance with its terms.
7. Severability. If any term or other provision of this Agreement is held
invalid, illegal or incapable of being enforced by any court of competent
jurisdiction, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any party hereto. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties 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.
8. Binding Effect and Assignment. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns, provided that except as
otherwise specifically provided herein, neither this Agreement nor any of the
rights, interests or obligations of the parties hereto may be assigned by any of
the parties hereto without prior written consent of the other parties hereto
except as expressly contemplated by Section 2 hereof and except that the
Company, without obtaining the consent of any other party hereto, shall be
entitled to assign this Agreement or all or any of its rights or obligations
hereunder to any one or more Affiliates of the Company, but no assignment by the
Company under this Section 8 shall relieve the Company of its obligations under
this Agreement. Any assignment in violation of the foregoing shall be void.
9. Amendments and Modification. This Agreement may not be modified,
amended, altered or supplemented except upon the execution and delivery of a
written agreement executed by each of the parties hereto; provided that any
provision of this Agreement may be waived, or the time for its performance may
be extended, by the party or parties entitled to the benefit thereof by a
writing signed by each such party or an authorized representative thereof.
10. Specific Performance; Injunctive Relief. The parties hereto acknowledge
that the Company shall be irreparably harmed and that there shall be no adequate
remedy at law for a violation of any of the covenants or agreements of
Stockholder set forth in this Agreement. Therefore, the Stockholder hereby
agrees that, in addition to any other remedies that may be available to the
Company upon any such violation, the Company shall have the right to enforce
such covenants and agreements by specific performance, injunctive relief or by
any other means available to such party at law or in equity.
11. Notices. All notices and other communications pursuant to this
Agreement shall be in writing and deemed to be sufficient if contained in a
written instrument and shall be deemed given if delivered personally,
telecopied, sent by nationally recognized overnight courier or mailed by
registered or certified mail (return receipt requested), postage prepaid, to the
parties at the following address (or at such other address for a party as shall
be specified by like notice): if to the Company, to its address provided in the
Purchase Agreement, with a copy to the Company's counsel; and if to the
Stockholder, to the Stockholder's address shown on Exhibit A.
12. Governing Law. This Agreement shall be governed by the laws of the
State of Delaware, without reference to principles of conflicts of law.
13. Entire Agreement. This Agreement, together with the documents expressly
referred to herein, contain the entire understanding of the parties in respect
of the subject matter hereof, and supersede all prior negotiations and
understandings between the parties with respect to such subject matter.
14. Effect of Headings. The section headings are for convenience only and
shall not affect the construction or interpretation of this Agreement.
15. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be an original, but all of which together shall constitute
one and the same agreement.
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly
executed as of the date first above written.
XO HOLDINGS, INC.
By: /s/ Xxxx X. Xxxxxxx
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Name: Xxxx X. Xxxxxxx
Title: President and Chief Executive Officer
CARDIFF HOLDING LLC
By: /s/ Xxxxxx Xxxxxxx
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Name: Xxxxxx Xxxxxxx
Title: Authorized Signatory
EXHIBIT A
NUMBER OF SHARES OF COMPANY COMMON
NAME ADDRESS STOCK AND PREFERRED STOCK OWNED
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Cardiff Holding LLC, 000 Xxxxx Xxxxxx 91,405,864 shares of Common Stock
a Delaware limited 47th Floor
liability company Xxx Xxxx, XX 00000 3,800,000 shares of Preferred Stock
3,001,929 Warrants - A
2,251,445 Warrants - B
2,251,445 Warrants - C
