SETTLEMENT AGREEMENT AND MUTUAL RELEASE
Exhibit 99.1
SETTLEMENT AGREEMENT AND MUTUAL RELEASE
This Settlement Agreement and Mutual Release (“Agreement”) is made and entered into as of the
___day of ___, 2005, by and between Xxxxxxx X. Xxxxx (“Xxxxx”) and Ono Albany, Inc. (“Ono
Albany”) and Consolidated Communications, Inc. (“CCI”), Consolidated Communications Holdings, Inc.
(“CCHI”), and Providence Equity Partners, Inc., Providence Equity Partners IV, L.P., and Providence
Equity Operating Partners IV, L.P. (collectively the “Providence Companies”). CCI, CCHI, and the
Providence Companies may be referred to herein collectively as “Defendants.” Xxxxx and Defendants
may be referred to herein collectively as the “Parties.” This Agreement is made subject to and
without waiving CCHI’s and the Providence Companies’ objections to personal jurisdiction in Texas.
WHEREAS, Xxxxx has asserted certain claims and causes of action against Defendants, in
litigation in Galveston, Texas, styled Xxxxxxx Xxxxx v. Providence Equity Partners, et al., Civil
Action G-05-133, in the United States District Court for the Southern Division of Texas, Galveston
Division (the “Litigation”) related to Xxxxx’ work as a consultant in relation to Defendants’
participation in the acquisition of TXU Communications Ventures Company (“TXU Communications”) and
related to Xxxxx’ potential bid to acquire TXU Communications through Ono Albany or otherwise;
WHEREAS, Xxxxx previously asserted essentially identical claims and causes of action in
litigation in Houston, Texas, styled Xxxxxxx Xxxxx v. Spectrum Equity Partners, Inc., et al., Cause
No. 2004-11577, in the 151st Judicial District Court of Xxxxxx County, Texas (the “State Court
Action”);
WHEREAS, CCI, CCHI, and the Providence Companies have denied and continue to deny any
liability for the claims and causes of action asserted in the Litigation and in the State Court
Action; and
WHEREAS, the Parties desire to avoid the expense and burden of continued litigation and to
resolve fully and finally all disputes between and among Hinds and CCI, CCHI, and the Providence
Companies without any admission of wrongdoing or liability by any Party;
NOW, THEREFORE, in consideration of the foregoing and other mutual consideration, receipt of
which is hereby acknowledged by the Parties hereto, and intending to be legally bound, the Parties
hereby agree as follows:
TERMS OF SETTLEMENT
1. CCHI Payment. On or before October 13, 2005, provided that the Board of Directors
of CCHI approves payment and counsel for Defendants shall have received a copy of this Agreement
executed by all Parties, CCHI shall pay to Xxxxx the sum of Two Million Five Hundred Thousand
Dollars ($2,500,000), pursuant to the following wire transfer instructions:
Bank of Texas, N.A. — Houston, Texas
Xxxxxx & Xxxxx LLP
Xxxxxx & Xxxxx LLP
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Routing No. 111 014 325
Account No. 809 034 1011
Account No. 809 034 1011
2. Dismissal of Action. Within five (5) days of the receipt of the consideration
specified in Paragraph 1, the Parties will execute a Joint Stipulation of Dismissal under Federal
Rule of Civil Procedure 41 (attached hereto as Exhibit A). Defendants will thereafter file the
fully-executed Joint Stipulation of Dismissal with the Court.
3. Release of CCI. For good, valuable, and sufficient consideration receipt of which
is hereby acknowledged, Xxxxx and Ono Albany, on behalf of their past, present, and future
directors, officers, shareholders, general or limited partners, members, employees, attorneys,
parents, subsidiaries, affiliates, successors, assigns, and all predecessors and related entities,
and any person claiming by or under any and all of them, do hereby forever release and discharge
CCI and its past, present, and future directors, officers, shareholders, general or limited
partners, members, employees, attorneys, parents, subsidiaries, affiliates, successors, assigns,
predecessors and related entities, of any and all of them from any and all claims, demands, or
suits, known or unknown, fixed or contingent, liquidated or unliquidated, whether or not asserted
in the Litigation, arising from or related to the events and transactions which are the subject
matter of the Litigation or which could have been asserted in the Litigation, and those arising
from or related to any and all dealings between or among CCI, Xxxxx, and Ono Albany at any time.
4. Release of CCHI. For good, valuable, and sufficient consideration receipt of which
is hereby acknowledged, Xxxxx and Ono Albany, on behalf of their past, present, and future
directors, officers, shareholders, general or limited partners, members, employees, attorneys,
parents, subsidiaries, affiliates, successors, assigns, and all predecessors and related entities,
and any person claiming by or under any and all of them, do hereby forever release and discharge
CCHI and its past, present, and future directors, officers, shareholders, general or limited
partners, members, employees, attorneys, parents, subsidiaries, affiliates, successors, assigns,
predecessors and related entities, of any and all of them from any and all claims, demands, or
suits, known or unknown, fixed or contingent, liquidated or unliquidated, whether or not asserted
in the Litigation, arising from or related to the events and transactions which are the subject
matter of the Litigation or which could have been asserted in the Litigation, and those arising
from or related to any and all dealings between or among CCHI, Hinds, and Ono Albany at any time.
5. Release of Providence Equity Partners, Inc. For good, valuable, and sufficient
consideration receipt of which is hereby acknowledged, Xxxxx and Ono Albany, on behalf of their
past, present, and future directors, officers, shareholders, general or limited partners, members,
employees, attorneys, parents, subsidiaries, affiliates, successors, assigns, and all predecessors
and related entities, and any person claiming by or under any and all of them, do hereby forever
release and discharge Providence Equity Partners, Inc. and its past, present, and future directors,
officers, shareholders, general or limited partners, members, employees, attorneys, parents,
subsidiaries, affiliates, successors, assigns, predecessors and related entities, of any and all of
them from any and all claims, demands, or suits, known or unknown, fixed or contingent, liquidated
or unliquidated, whether or not asserted in the Litigation, arising from or related to the events
and transactions which are the subject matter of the Litigation or which
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could have been asserted in the Litigation, and those arising from or related to any and all
dealings between or among Providence Equity Partners, Inc., Xxxxx, and Ono Albany at any time.
6. Release of Providence Equity Partners IV, L.P. For good, valuable, and sufficient
consideration receipt of which is hereby acknowledged, Xxxxx and Ono Albany, on behalf of their
past, present, and future directors, officers, shareholders, general or limited partners, members,
employees, attorneys, parents, subsidiaries, affiliates, successors, assigns, and all predecessors
and related entities, and any person claiming by or under any and all of them, do hereby forever
release and discharge Providence Equity Partners IV, L.P. and its past, present, and future
directors, officers, shareholders, general or limited partners, members, employees, attorneys,
parents, subsidiaries, affiliates, successors, assigns, predecessors and related entities, of any
and all of them from any and all claims, demands, or suits, known or unknown, fixed or contingent,
liquidated or unliquidated, whether or not asserted in the Litigation, arising from or related to
the events and transactions which are the subject matter of the Litigation or could have been
asserted in the Litigation, and those arising from or related to any and all dealings between or
among Providence Equity Partners IV, L.P., Xxxxx, and Ono Albany at any time.
7. Release of Providence Equity Operating Partners IV, L.P. For good, valuable, and
sufficient consideration receipt of which is hereby acknowledged, Xxxxx and Ono Albany, on behalf
of their past, present, and future directors, officers, shareholders, general or limited partners,
members, employees, attorneys, parents, subsidiaries, affiliates, successors, assigns, and all
predecessors and related entities, and any person claiming by or under any and all of them, do
hereby forever release and discharge Providence Equity Operating Partners IV, L.P. and its past,
present, and future directors, officers, shareholders, general or limited partners, members,
employees, attorneys, parents, subsidiaries, affiliates, successors, assigns, predecessors and
related entities of any and all of them from any and all claims, demands, or suits, known or
unknown, fixed or contingent, liquidated or unliquidated, whether or not asserted in the
Litigation, arising from or related to the events and transactions which are the subject matter of
the Litigation or which could have been asserted in the Litigation, and those arising from or
related to any and all dealings between or among Providence Equity Operating Partners IV, L.P.,
Xxxxx, and Ono Albany at any time.
8. Release of Former Defendants. For good, valuable, and sufficient consideration
receipt of which is hereby acknowledged, Xxxxx and Ono Albany, on behalf of their past, present,
and future directors, officers, shareholders, general or limited partners, members, employees,
attorneys, parents, subsidiaries, affiliates, successors, assigns, and all predecessors and related
entities, and any person claiming by or under any and all of them, do hereby forever release and
discharge each of Spectrum Equity Investors IV, L.P., Spectrum Equity Investors Parallel IV, L.P.,
Spectrum IV Investment Managers’ Fund, L.P., Spectrum Equity Investors III, L.P., SEI III
Entrepreneurs’ Fund, L.P., Spectrum III Investment Managers’ Fund, L.P., Consolidated
Communications Acquisition Texas, Inc., Xxxxxxx X. Xxxxxxx, and Homebase Acquisitions LLC
(collectively the “Former Defendants”), and all of their past, present, and future directors,
officers, shareholders, general or limited partners, members, employees, attorneys, parents,
subsidiaries, affiliates, successors, assigns, predecessors and related entities, of any and all of
them from any and all claims, demands, or suits, known or unknown, fixed or contingent, liquidated
or unliquidated, whether or not asserted in the Litigation, arising from or related to the
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events and transactions which are the subject matter of the Litigation or which could have
been asserted in the Litigation or were the subject matter of the State Court Action or which could
have been asserted in the State Court Action, and those arising from or related to any and all
dealings between or among Hinds, Ono Albany, and the Former Defendants at any time.
9. Release of Hinds. For good, valuable, and sufficient consideration receipt of
which is hereby acknowledged, each of the Defendants, on behalf of their past, present, and future
directors, officers, shareholders, general or limited partners, members, employees, attorneys,
parents, subsidiaries, affiliates, successors, assigns, and all predecessors and related entities,
and any person claiming by or under any and all of them, do hereby forever release and discharge
Hinds and his past, present, and future general or limited partners, employees, attorneys,
successors, and assigns of any and all of them from any and all claims, demands, or suits, known or
unknown, fixed or contingent, liquidated or unliquidated, whether or not asserted in the
Litigation, arising from or related to the events and transactions which are the subject matter of
the Litigation, and those arising from or related to any and all dealings between or among Xxxxx,
CCI, CCHI, and Providence at any time.
10. INDEMNIFICATION. TO THE EXTENT THAT ANY CLAIM RELEASED HEREIN MAY BE BROUGHT BY
PERSONS OR ENTITIES CLAIMING BY, THROUGH, OR UNDER A PARTY OR BY KNOWN CLAIMANTS, THE PARTY THROUGH
WHICH SUCH CLAIM IS BROUGHT AGREES TO INDEMNIFY, DEFEND, AND HOLD HARMLESS THE OTHER PARTIES,
INCLUDING THE FORMER DEFENDANTS AND ANY PERSON OR ENTITY ASSOCIATED WITH ANY PARTY OR FORMER
DEFENDANT, FROM AND AGAINST ANY LOSSES, LIABILITIES, COSTS OR EXPENSES, INCLUDING, WITHOUT
LIMITATION, LEGAL FEES, COURT COSTS, JUDGMENTS, OR REASONABLE SETTLEMENT PAYMENTS ARISING FROM SUCH
CLAIMS.
11. No Prior Transfer of Claims. By executing this Agreement, each Party represents
and warrants that it has not sold, assigned, transferred, or otherwise conveyed any of the claims,
rights or causes of action that it had, has, or may have against any other Party.
12. Authority. Each Party to this Agreement represents and warrants that the
execution and delivery of this Agreement and the performance of such Party’s obligations hereunder
will not violate its certificate of incorporation or bylaws or partnership agreement and will not
conflict with or cause a breach under any agreement to which it is a party or by which its assets
may be bound; and that each person signing this Agreement has the power and authority to sign this
Agreement and to bind the entity on whose behalf it is signing and to carry out its obligations
hereunder. Xxxxx represents that he is the sole beneficial owner of Ono Albany and has authority
to sign this Agreement on behalf of Ono Albany.
13. Presumption. This Agreement has been drafted by the Parties hereto and shall not
be construed against one Party in favor of any other Party by reason of any presumption concerning
the Party drafting this Agreement.
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14. Prior Agreements Superseded. This Agreement constitutes the final agreement
between the Parties, contains all of the final covenants, terms, and conditions agreed upon by the
Parties with reference to the Litigation, and terminates, supersedes, and replaces any and all
prior contracts, agreements, arrangements, understandings, representations, promises, inducements,
or other communications, whether written or oral, between the Parties. No other agreements, oral
or otherwise, related to the Litigation shall be deemed to exist or to bind any of the Parties
hereto. Each Party declares and represents that no oral understandings, statements, promises, or
inducements contrary to the terms of this Agreement exist. This Settlement Agreement can only be
amended in writing signed by all of the Parties hereto.
15. Cooperation. The Parties agree to cooperate fully to execute any and all
necessary supplementary documents and to take all additional steps or actions which may be
necessary or appropriate in order to give full force and effect to the terms and intent of this
Agreement.
16. No Admissions. Nothing contained herein shall be deemed an admission by any Party
hereto, and Defendants expressly deny any liability to Xxxxx.
17. Notices. All notices required or permitted to be given hereunder shall be in
writing and shall be deemed delivered when personally delivered, or received from an overnight
delivery courier service, or when delivered by telecopier addressed as follows (or such other
address as the Party may, by written notice to the other Party, designate as the address for
purposes of notice hereinafter):
IF TO A DEFENDANT:
|
Xxxx X. Xxxxxxx | |
| King & Spalding LLP | ||
| 0000 Xxxxxxxxx, Xxxxx 0000 | ||
| Xxxxxxx, XX 00000 | ||
| Tel.: (000) 000-0000 | ||
| Fax: (000) 000-0000 | ||
IF TO XXXXX:
|
Xxxx X. Xxxxxx | |
| Xxxxxx & Xxxxx LLP | ||
| 000 Xxxxxx, Xxxxx 0000 | ||
| Xxxxxxx, Xxxxx 00000 | ||
| Tel.: (000) 000-0000 | ||
| Fax: (000) 000-0000 |
18. Headings. The various headings of this Agreement are inserted for convenience
only and shall not affect the interpretation of this Agreement.
19. Waiver. Any waiver by any Party of any provision of this Agreement shall not
operate as or be construed to be a waiver of any breach of that provision or of any breach of any
provision of this Agreement. The failure of a Party to insist upon strict adherence to any term of
this Agreement on one or more occasions will not be considered a waiver or deprive that Party of
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the right thereafter to insist upon strict adherence to that term or any other term of this
Agreement. Any waiver must be in writing.
20. Invalidation of a Provision. If any provision of this Agreement is invalid,
illegal, or unenforceable, the balance of this Agreement shall remain in effect, and if any
provision is inapplicable to any Party or circumstance, it shall nevertheless remain applicable to
all other Parties and circumstances.
21. Counterparts. This Agreement may be executed by the Parties in one or more
facsimile counterparts and such facsimile counterparts shall each be deemed an original signature
for all purposes including interpretation under governing law.
IN WITNESS THEREOF, the Parties hereto have caused this Agreement to be duly executed as of
the day and year first written below.
the day and year first written below.
| Xxxxxxx X. Xxxxx | ||
Date:
9/27/2005
|
By: /s/ Xxxxxxx X. Xxxxx | |
| Name: Xxxxxxx X. Xxxxx | ||
| Ono Albany, Inc. | ||
Date: 9/27/2005
|
By: /s/ Xxxxxxx X. Xxxxx | |
| Name: Xxxxxxx X. Xxxxx | ||
| Title: President and Chief | ||
| Executive Officer | ||
| Consolidated Communications, Inc. | ||
Date :
10/10/2005
|
By: /s/ Xxxxxx X. Xxxxxx | |
| Name: Xxxxxx X. Xxxxxx | ||
| Title: Chief Executive Officer | ||
| Consolidated Communications Holdings, Inc. | ||
Date :
10/10/2005
|
By: /s/ Xxxxxx X. Xxxxxx | |
| Name: Xxxxxx X. Xxxxxx | ||
| Title: Chief Executive Officer |
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| Providence Equity Partners, Inc. | ||
Date:
10/06/2005
|
By: /s/ Xxxx Xxxxxx | |
| Name: Xxxx Xxxxxx | ||
| Title: Managing Director | ||
| Providence Equity Partners IV, L.P. | ||
Date:
10/06/2005
|
By: /s/ Xxxx Xxxxxx | |
| Name: Xxxx Xxxxxx | ||
| Title: Limited Partner of General | ||
| Partner | ||
| Providence Equity Operating Partners IV, L.P. | ||
Date:
10/06/2005
|
By: /s/ Xxxx Xxxxxx | |
| Name: Xxxx Xxxxxx | ||
| Title: Limited Partner of General | ||
| Partner |
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