Exhibit 10.1
PLAN SUPPORT
AGREEMENT
This PLAN SUPPORT AGREEMENT is made
and entered into as of March , 2009 (as may
be amended from time to time in accordance with the terms set forth
herein, this “ Agreement ”) by and among the
following parties:
(a) The undersigned
beneficial owners of, or holders of investment authority over
(subject to the addendum attached hereto) (each, a “
Consenting Noteholder ,” and collectively, the “
Consenting Noteholders ”), the (i) 8% Senior
Notes due 2014 (the “ 8% Notes ”) issued by
Primus Telecommunications Holding, Inc. (“ Holding
”) and guaranteed by Primus Telecommunications Group,
Incorporated (“ Group ”), (ii) 5%
Exchangeable Senior Notes due 2010 (the “ 5% Notes
,” and together with the 8% Notes, the “ Holding
Notes ”) issued by Holding and guaranteed by Group,
and/or (iii) 14 1 / 4 % Senior Secured Notes due 2011
(the “ IHC Second Lien Notes ”) issued by Primus
Telecommunications IHC, Inc. (“ IHC ”) and
guaranteed by Group, Holding and certain other subsidiaries of
Group (the Holding Notes and the IHC Second Lien Notes referred to
in clauses (i), (ii) and (iii) collectively referred to
as the “ Notes ”); and
(b) Group, Holding, IHC and Primus
Telecommunications International, Inc. (“PTII”) (Group,
Holding, IHC and PTII collectively, the “ Debtors
”) (the Debtors, each of the foregoing Consenting Noteholders
and any subsequent person that becomes a party hereto as a
Consenting Noteholder (pursuant to the Joinder attached hereto as
Exhibit B ), a “ Party ,” and
collectively, the “ Parties ”).
RECITALS
WHEREAS , each Consenting Noteholder is the beneficial
holder of a Claim, as that term is defined in section 101(5) of
title 11 of the United States Code (each, a “ Claim
,” and collectively, the “ Claims
”);
WHEREAS, the Debtors have determined that a prompt
restructuring concerning or impacting, inter alia , the
Notes and related Claims evidenced thereby pursuant to the terms of
this Agreement and the term sheet attached hereto as Exhibit
C (the “ Plan Term Sheet ”) would be in
the best interests of its creditors and shareholders (such
restructuring being, the “ Restructuring
”);
WHEREAS , the Parties intend to implement the
Restructuring through a confirmed plan of reorganization under
chapter 11 of title 11 of the United States Code (the “
Bankruptcy Code ”), the form and substance of which
shall be reasonably satisfactory to the Debtors and the holders of
more than a majority of the aggregate outstanding principal amount
of the Claims held by each of (i) the Consenting Noteholders
that hold the Holding Notes (the “ Requisite Holding
Noteholders ”) and (ii) the Consenting Noteholders
that hold the IHC Second Lien Notes (the “ Requisite
Second Lien Noteholders ”);
WHEREAS , in order to implement the Restructuring, the
Debtors have agreed, subject to the terms and conditions of this
Agreement, (i) to prepare and file (a) a plan of
reorganization that is consistent in all material respects with
this Agreement and the Plan Term Sheet, and which shall be in form
and substance reasonably acceptable to the Requisite Holding
Noteholders and the Requisite Second Lien Noteholders (such plan of
reorganization together
with all exhibits thereto, the “
Plan ”) in cases filed under chapter 11 of the
Bankruptcy Code by the Debtors (the “ Chapter 11 Cases
”) and (b) a disclosure statement that is consistent in
all material respects with the terms of the Plan and the
Restructuring, and which shall be in form and substance reasonably
acceptable to the Requisite Holding Noteholders and the Requisite
Second Lien Noteholders (the “ Disclosure Statement
”), and (ii) to use commercially reasonable efforts to
have the Disclosure Statement approved and the Plan confirmed by
the United States Bankruptcy Court for the District of Delaware
(the “ Bankruptcy Court ”) pursuant to an order
confirming the Plan which shall be in form and substance reasonably
acceptable to the Requisite Holding Noteholders and the Requisite
Second Lien Noteholders (the “ Confirmation Order
”);
WHEREAS , the Parties have engaged in good faith
negotiations with the objective of reaching an agreement with
regard to the Restructuring;
WHEREAS , each Consenting Noteholder has reviewed, or
has had the opportunity to review, this Agreement and the Plan Term
Sheet with the assistance of professional legal advisors of its own
choosing; and
WHEREAS , each Consenting Noteholder desires to support
and vote to accept the Plan, and the Debtors desire to support and
pursue the Plan, in each case subject to the terms and conditions
set forth herein.
NOW, THEREFORE
, in consideration of the foregoing
and the promises, mutual covenants and agreements set forth herein
and for other good and valuable consideration, the Parties agree as
follows:
AGREEMENT
Section 1. Agreements of
the Consenting Noteholders .
Each Consenting Noteholder
represents, severally and not jointly that, as of the date
hereof:
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(a)
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it is the legal
owner, beneficial owner and/or holder of investment authority over,
and has the full power to vote, dispose of and compromise, the
aggregate principal amount of each series of Notes set forth
opposite such Consenting Noteholder’s name on the signature
pages hereof, and the registered holder and the custodial party for
such Consenting Noteholder’s Notes are set forth on Exhibit A
hereto (which Exhibit A shall remain confidential unless
disclosure is required by court order or such Consenting Noteholder
consents); and
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(b)
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to the actual
knowledge of such Consenting Noteholder, there are no other Claims
of which it is the legal owner, beneficial owner and/or investment
advisor relating to the Debtors unless such Consenting Noteholder
does not possess the full power to vote and dispose of such
Claims.
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1.2
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Voting by
Consenting Noteholders.
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As long as a Termination Event (as
defined herein) has not occurred, or has occurred but has been duly
waived or cured in accordance with the terms hereof, and provided
that each Consenting Noteholder has been properly solicited
pursuant to sections 1125 and 1126 of the Bankruptcy Code, each
Consenting Noteholder agrees (x) to cast all votes to which it
is entitled with respect to its Claims in favor of the Plan in
accordance with the voting procedures described in the Disclosure
Statement and all other solicitation materials distributed in
connection therewith; (y) to the extent such election is
available, not elect on its ballot to preserve Claims in respect of
the Notes, if any, that such Consenting Noteholder may own that may
be affected by any releases provided for under the Plan; and
(z) not withdraw or revoke its acceptance unless the Plan is
modified in any respect in a manner inconsistent with the Plan Term
Sheet (other than modifications that are immaterial to such
Consenting Noteholder), or this Agreement is terminated in
accordance with its terms. Anything in this Agreement to the
contrary notwithstanding, each Consenting Noteholder hereby
acknowledges and agrees that all Notes owned by such Consenting
Noteholder are subject to the terms and conditions of this
Agreement (whether or not such Notes are listed and/or described on
Exhibit A hereto or Annex II to a Joinder Agreement) and no
Consenting Noteholder shall be permitted to exclude any portion of
its Notes from the terms of this Agreement.
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(a)
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Support of
the Restructuring . As
long as a Termination Event has not occurred, or has occurred but
has been duly waived or cured in accordance with the terms hereof,
each of the Consenting Noteholders agrees that, by having executed
and become party to this Agreement, it will instruct its counsel to
take, or instruct its counsel to cause to be taken, all actions
reasonably necessary to facilitate, encourage or otherwise support
the Restructuring and the transactions contemplated by the Plan
Term Sheet, and that it otherwise will not take, or cause to be
taken, directly or indirectly, any action opposing, inconsistent
with, or that would otherwise delay the consummation of the
Restructuring or the transactions contemplated by the Plan Term
Sheet. Without limiting the generality of the foregoing, and
subject to the last paragraph of this Section 1.3(a), each
Consenting Noteholder agrees that it will,
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(i)
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not directly or
indirectly seek, solicit, participate in, support or vote in favor
of any other plan, termination of the Debtors’ exclusive
right to file and solicit acceptances of a plan of reorganization,
sale, proposal or offer of dissolution, winding up, liquidation,
reorganization, merger or restructuring of the Debtors that would
reasonably be expected to prevent, delay or impede the
restructuring of the Debtors as contemplated by the Plan Term
Sheet, the Plan or any other document filed in connection with
confirming the Plan that is not inconsistent with this Agreement or
the Plan Term Sheet (collectively, an “ Alternative
Transaction ”);
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(ii)
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not directly or indirectly
(i) engage in, continue or otherwise participate in any
negotiations regarding any Alternative Transaction, (ii) enter
into a
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letter of intent, memorandum of
understanding, agreement in principle or other agreement relating
to any Alternative Transaction or (iii) withhold, withdraw,
qualify or modify its approval or recommendation of this Agreement,
the Plan, the Plan Term Sheet, or the Restructuring;
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(iii)
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[Intentionally
Deleted]
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(iv)
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not oppose the
Debtors’ request for the entry of customary “first
day” orders, so long as such “first day” orders
are in form and substance reasonably acceptable to the Requisite
Holding Noteholders and the Requisite Second Lien Noteholders
(“the “ First Day Orders ”);
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(v)
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support entry
of an order approving the Disclosure Statement;
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(vi)
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support
confirmation of the Plan and entry by the Bankruptcy Court of the
Confirmation Order;
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(vii)
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support the
release provisions contained in the Plan;
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(viii)
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execute and
deliver customary letter(s), in form and substance reasonably
acceptable to the Debtors, for distribution to holders of the
Notes, stating that such Consenting Noteholder supports and has
committed to vote to approve the Plan;
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(ix)
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not object to
or otherwise commence any proceeding opposing or proposing to alter
any of the terms of this Agreement, the Plan Term Sheet, the
Disclosure Statement or the Plan; and
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(x)
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not knowingly
encourage any other entity to object to, delay, impede, appeal or
take any other action, directly or indirectly, to interfere with
the implementation of the Plan.
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Anything in this Section 1.3(a)
or elsewhere in this Agreement to the contrary notwithstanding,
nothing contained herein or in the Plan Term Sheet shall:
(A) limit the ability of a Consenting Noteholder to consult
with other Consenting Noteholders or the Debtors; (B) limit
the rights of a Consenting Noteholder under any applicable
bankruptcy, insolvency, foreclosure or similar proceeding
(including the Chapter 11 Cases), including, without limitation,
appearing as a party in interest in any matter to be adjudicated
concerning the Debtors or any of their respective assets or
properties so long as such appearance and the positions advocated
in connection therewith are not materially inconsistent with the
Consenting Noteholder’s obligations hereunder; (C) limit
the ability of a Consenting Noteholder to sell or enter into any
transactions in connection with the Notes or any other Claims of
such Consenting Noteholder, subject to Section 1.5 hereof; or
(D) limit the rights of any Consenting Noteholder under the
indenture or any other documents or agreements governing or
evidencing the Notes or other Claims of such Consenting Noteholder
(collectively, the “ Note Documents ”), or
constitute a waiver or amendment of any provision of any of the
Note Documents.
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(b)
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Agreement to
Forbear . Each Consenting
Noteholder agrees that until this Agreement has been terminated in
accordance with the terms herein, it shall not (i) take any
action or otherwise pursue any right or remedy under the Note
Documents, including claims against any non-Debtor issuer,
guarantor or otherwise liable party under the Note Documents, or
(ii) initiate or at the instruction of such Consenting
Noteholder have initiated on its behalf, any litigation or
proceeding of any kind with respect to the Holding Notes or the IHC
Second Lien Notes, including actions against any non-Debtor issuer,
guarantor or otherwise liable party under the Note Documents, other
than to enforce this Agreement.
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(c)
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Committee
Matters . Notwithstanding
anything contained in this Agreement to the contrary, (i) the
Parties shall be permitted to become members of, and interact with,
any committee of creditors appointed in the Chapter 11 Cases (a
“ Committee ”) and (ii) if a Consenting
Noteholder is appointed to, and serves on a Committee, the terms of
this Agreement shall not be construed to limit the Consenting
Noteholder’s exercise of its fiduciary duties solely in its
role as a member of such Committee, and any exercise of such
fiduciary duties shall not be deemed to constitute a breach of the
terms of this Agreement; provided, however, that serving as a
member of such Committee shall not relieve such Consenting
Noteholder (in its capacity as a Consenting Noteholder and not in
its capacity as a member of such Committee) of its obligations
under this Agreement unless such obligations are inconsistent with
its duties as a member of a Committee; provided ,
further , that nothing in this Agreement shall be
construed as requiring any Consenting Noteholder to serve on any
Committee.
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1.4
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Further
Acquisition of Claims.
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Nothing in this Agreement shall be
deemed to limit or restrict the ability or right of a Consenting
Noteholder to acquire any additional Notes (“ Additional
Notes ”) or other claims against or interests in the
Debtors or any affiliates of the Debtors; provided ,
however , that in the event a Consenting Noteholder
acquires any such Additional Notes (or other claims or interests)
after the date hereof, such Additional Notes (and any other claims
or interests) shall immediately upon such acquisition become
subject to the terms of this Agreement. Notwithstanding the
foregoing, each Consenting Noteholder, as applicable, acknowledges
and agrees that it remains subject to and bound by any standstill
or similar provisions (“ Standstill Provisions
”) contained in any confidentiality agreement (each, a
“ Confidentiality Agreement ”) executed by the
Debtors (or any one of them), on the one hand, and such Consenting
Noteholder, on the other, in accordance with the terms of such
Confidentiality Agreement unless such Standstill Provisions have
been terminated or expired in accordance with the terms of the
Confidentiality Agreement.
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1.5
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Transfer of
Claims, Interests and Securities.
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Each of the Consenting Noteholders
hereby agrees, for so long as this Agreement has not been
terminated (such period, the “ Restricted Period
”), not to directly or indirectly, (i) sell, assign,
transfer, pledge, hypothecate or otherwise dispose of any of its
Notes or Claims or any option, right or interest (voting,
participation or otherwise) therein or (ii) grant any
proxies,
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deposit any of its Notes in a voting trust or
enter into a voting agreement with respect to any of its Notes or
Claims (each such transfer, a “ Transfer ”),
provided, however, that, notwithstanding the foregoing, and subject
to the Standstill Provisions (if any) contained in any existing
Confidentiality Agreement that have not been terminated or expired
in accordance with the terms of such Confidentiality Agreement, a
Consenting Noteholder may Transfer its Notes or Claims if
(a) the transferee thereof is a Consenting Noteholder or
(b) if the transferee thereof is not a Consenting Noteholder,
(i) executes and delivers to the Debtors a Joinder and
(ii) delivers such Joinder to Group before the close of five
(5) business days after the relevant Transfer (each such
transferee becoming, upon the Transfer, a Consenting Noteholder
hereunder). Group, Holding and IHC, as appropriate, shall promptly
acknowledge any such Transfer in writing and provide a copy of that
acknowledgement to the transferor. By their acknowledgement of the
relevant Transfer, Group, Holding and IHC, as appropriate, shall be
deemed to have acknowledged that their obligations to the
Consenting Noteholders hereunder shall be deemed to constitute
obligations in favor of the relevant transferee as a Consenting
Noteholder hereunder.
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1.6
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Representations of the Consenting
Noteholders.
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Each Consenting Noteholder
represents, severally and not jointly that, as of the date
hereof:
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(a)
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it has full
power to vote, dispose of and compromise the aggregate principal
amount of its Claims;
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(b)
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such Consenting
Noteholder, or the holder for whom it acts as investment advisor or
manager, is either (i) a “ Qualified Institutional
Buyer ” as defined in Rule 144A promulgated under the
Securities Act of 1933, as amended (the “ Securities
Act ”), or (ii) an “ Accredited
Investor ” (as such term is defined in subparagraph (1),
(2), (3) or (7) of Rule 501 promulgated under the
Securities Act);
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(c)
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the financial
situation of such Consenting Noteholder is such that it can afford
to bear the economic risk of holding the Distributable New Equity
and Holding Warrants (as such terms are defined in the Plan Term
Sheet) (collectively, the “ New Securities
”);
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(d)
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the knowledge
and experience of such Consenting Noteholder in financial and
business matters is such that it, together with its advisors, is
capable of evaluating the merits and risks of the investment in the
New Securities;
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(e)
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such Consenting
Noteholder understands that the New Securities are a speculative
investment that involve a high degree of risk of loss of its
investment therein, that there may be substantial restrictions on
the transferability of the New Securities and, accordingly, it may
not be possible to liquidate such Consenting Noteholder’s
investment;
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(f)
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in making its
decision to invest in the New Securities hereunder, such Consenting
Noteholder has relied upon independent investigations made by such
Consenting Noteholder and, to the extent believed by such
Consenting Noteholder to be appropriate, such Consenting
Noteholder’s representatives, including such Consenting
Noteholder’s own professional, tax and other
advisors;
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(g)
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such Consenting
Noteholder and its representatives, if any, have received and
reviewed this Agreement and all exhibits hereto, and have been
given the opportunity to examine all documents and to ask questions
of, and to receive answers from, Group, Holding and IHC and their
representatives concerning the terms and conditions of the
investment in the New Securities;
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(h)
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it has been
advised by Group that (i) the offer and sale of the New
Securities has not been registered under the Securities Act,
(ii) the offer and sale of the New Securities is intended to
be exempt from registration pursuant to section 1145 of the
Bankruptcy Code, and (iii) there is no established market for
the New Securities and such a public market for the New Securities
may not be established in the foreseeable future; and
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(i)
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it is familiar
with Rule 144 promulgated by the Securities and Exchange Commission
under the Securities Act, as presently in effect, and understands
the resale limitations imposed thereby and by the Securities
Act.
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Section 2. Agreements of
the Debtors .
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2.1
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Implementation of the Plan.
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To implement the Plan Term Sheet,
the Debtors hereby agree to use their commercially reasonable
efforts to:
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(a)
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effectuate and
consummate the Restructuring on the terms contemplated by this
Agreement, the Plan Term Sheet and the Plan;
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(b)
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file the Plan
and the Disclosure Statement with the Bankruptcy Court on or before
5 days after the date on which the Debtors file the Chapter 11
Cases with respect to the Restructuring in the Bankruptcy Court
(the “ Petition Date ”), or such later date as
may be mutually agreed upon by Group and by each of (i) the
Requisite Holding Noteholders and (ii) the Requisite Second
Lien Noteholders (the “ Filing Date
”);
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(c)
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obtain entry by
the Bankruptcy Court of an order approving the Disclosure Statement
on or before 40 days following the Filing Date, or such later date
as may be mutually agreed upon by Group and by each of (i) the
Requisite Holding Noteholders and (ii) the Requisite Second
Lien Noteholders;
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(d)
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solicit the
requisite acceptances of the Plan in accordance with section 1125
of the Bankruptcy Code on or before 75 following the Filing Date,
or such later date as may be mutually agreed upon by Group and by
each of (i) the Requisite Holding Noteholders and
(ii) the Requisite Second Lien Noteholders;
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(e)
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move the
Bankruptcy Court to enter the Confirmation Order on or before 90
days following the Filing Date, or such later date as may be
mutually agreed upon by Group and by each of (i) the Requisite
Holding Noteholders and (ii) the Requisite Second Lien
Noteholders; and
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(f)
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take no actions
materially inconsistent with this Agreement, the Plan Term Sheet
and the Plan or the expeditious confirmation and consummation of
the Plan;
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provided
, however , that the
Debtors shall have distributed such documents referenced in this
Section 2.1 (which shall include the Plan, the Disclosure
Statement and the Confirmation Order), the First Day Orders, and
any documents, motions and orders that are material to the
Restructuring and the Chapter 11 Cases, and which shall not include
any documents, motions and orders that are immaterial or primarily
covering case administration issues, and afforded reasonable
opportunity for comment and review to the respective legal and
financial advisors for the Consenting Noteholders in advance of any
filing thereof. The Debtors shall not seek to implement any
transaction or series of transactions that would effect a
restructuring of the Debtors on terms other than the terms set
forth in this Agreement and the Plan Term Sheet.
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2.2
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The
Debtors’ Fiduciary Obligations.
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Notwithstanding anything to the
contrary contained in this Agreement:
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(a)
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any directors
or officers of the Company (in such person’s capacity as a
director or officer of the Company) may take any action to the
extent such person reasonably believes (after consultation with
outside legal counsel) such action is required to comply with his
or her fiduciary obligations under applicable law (including but
not limited to any obligations to creditors, after consultation
with such creditors and good faith consideration of such
creditors’ position), and such action shall not be deemed to
constitute a breach of the terms of this Agreement.
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(b)
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the Debtors may
terminate their obligations under this Agreement by written notice
to the Consenting Noteholders if the Debtors, in good faith
exercise of their business judgment, and after consulting with
outside counsel, determine that there is a sufficient risk of
non-performance by the Debtors with respect to the financial
obligations contemplated under the Plan Term Sheet and the Plan
such that the Plan is no longer in the best interests of the
Debtors’ estates.
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Section 3. Plan Term
Sheet .
The Plan Term Sheet is incorporated
herein by reference and is made part of this Agreement. Each of the
Debtors and the Consenting Noteholders has reviewed, or has had the
opportunity to review, the Plan Term Sheet and, by signing below,
agrees and acknowledges that it is acceptable to and is approved by
such Debtor or Consenting Noteholder. Capitalized terms used herein
without definition shall have the meanings ascribed to any such
terms in the Plan Term Sheet, and capitalized terms used in the
Plan Term Sheet without definition shall have the meanings ascribed
to any such terms in this Agreement. The general terms and
conditions of the Restructuring are set forth in the Plan Term
Sheet; provided , however , that the
Plan Term Sheet
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is supplemented by the terms and conditions of
this Agreement. In the event of any inconsistencies between the
terms of this Agreement and the Plan Term Sheet, the Plan Term
Sheet shall govern.
Section 4. Mutual
Representations and Warranties .
Each of (i) the Consenting
Noteholders, severally and not jointly, represents and warrants to
the Debtors and (ii) the Debtors, jointly and severally,
represent and warrant to the Consenting Noteholders that the
following statements, as applicable, are true, correct and complete
as of the date hereof:
It has all requisite power and
authority to enter into this Agreement and to carry out the
transactions contemplated by, and perform its respective
obligations under, this Agreement, the Plan Term Sheet and the
Plan.
Any Party that is not a natural
person is duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization, and that it
otherwise has the requisite power and authority to execute and
deliver this Agreement and to perform its obligations
hereunder.
Subject to the provisions of
sections 1125 and 1126 of the Bankruptcy Code, and Section 8.7
hereof, this Agreement is a legal, valid and binding obligation of
such Party, enforceable against it in accordance with its terms,
except as enforcement may be limited by applicable laws relating to
or limiting creditors’ rights generally or by equitable
principles relating to enforceability.
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4.4
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No Consent
or Approval.
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Except as expressly provided in this
Agreement, no consent or approval is required by any other entity
in order for such Party to carry out the provisions of this
Agreement.
The execution and delivery by such
Party of this Agreement and the performance of such Party’s
obligations hereunder have been duly authorized by all necessary
action on its part.
This Agreement has been duly
executed and delivered by such Party.
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4.7
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Governmental
Consents.
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The execution, delivery and
performance by such Party of this Agreement does not and shall not
require any registration or filing with, consent or approval of, or
notice to, or other action to, with or by, any federal, state or
other governmental authority or regulatory body, except such
filings as (i) are identified in the Plan Term Sheet;
(ii) may be necessary and/or required under the federal
securities laws; and (iii) in connection with the commencement
of the Chapter 11 Cases, the approval of the Disclosure Statement
and entry of the Confirmation Order.
The execution, delivery and
performance of this Agreement by such Party does not and shall not
(a) violate any provision of law, rule or regulations
applicable to it or, as applicable, any of its subsidiaries;
(b) with respect to a Party that is not a natural person,
violate its certificate of incorporation, bylaws or other
organizational documents or those of any of its subsidiaries; or
(c) conflict with, result in a breach of, or constitute (with
due notice or lapse of time or both) a default under any material
contractual obligation to which it or, as applicable, any of its
subsidiaries is a party, except to the extent such contractual
obligation relates to the filing of a case under the Bankruptcy
Code or any action taken in furtherance thereof or the solvency of
the Debtors.
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Section 5.
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No Waiver
of Participation and Preservation of Rights
.
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Except as expressly provided in this
Agreement, nothing herein is intended to, does or shall be deemed
in any manner to waive, limit, impair or restrict the ability of
each of the Parties to protect and preserve its rights, remedies
and interests, including, but not limited to, its Claims against
any of the Debtors or its full participation in the Chapter 11
Cases. Without limiting the foregoing sentence in any way, if the
transactions contemplated by this Agreement or otherwise set forth
in the Plan are not consummated as provided herein, if a
Termination Event occurs, or if this Agreement is otherwise
terminated for any reason, the Parties each fully reserve any and
all of their respective rights, remedies and interests and claims
against the other Parties hereto.
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Section 6.
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Acknowledgement and Agreement
.
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(a)
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This Agreement
and the Plan Term Sheet and the transactions contemplated herein
and therein are the product of negotiations between the Parties and
their respective representatives. This Agreement is not and shall
not be deemed to be a solicitation of votes for the acceptance of a
plan of reorganization for the purposes of sections 1125 and 1126
of the Bankruptcy Code or otherwise. The Debtors will not solicit
acceptances of the Plan from any Consenting Noteholder until the
Consenting Noteholders have been provided with copies of a
Disclosure Statement approved by the Bankruptcy Court. Each Party
further acknowledges that no securities of any Debtor are being
offered or sold hereby and that this Agreement does not constitute
an offer to sell or a solicitation of an offer to buy any
securities of any Debtor.
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(b)
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Subject to the
terms and conditions set forth herein, the Parties agree to
negotiate in good faith all of the documents and transactions
described in the Plan Term Sheet and in this Agreement.
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Section 7. Termination
.
The term “ Termination
Event ,” wherever used in this Agreement, means any of
the following events (whatever the reason for such Termination
Event and whether it is voluntary or involuntary):
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(a)
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at 5:00 p.m.
prevailing Eastern Time five (5) business days after the date
of this Agreement, if this Agreement has not been executed by the
holders of at least two-thirds (or a majority upon the consent of
the Debtors) of the outstanding principal amount of Claims held by
each of (i) the holders that hold the Holding Notes (the
“ Threshold Holding Noteholders ”) and
(ii) the holders that hold the IHC Second Lien Notes (the
“ Threshold Second Lien Noteholders
”).
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(b)
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the Plan or any
subsequent Plan filed by the Debtors with the Bankruptcy Court (or
a Plan supported or endorsed by the Debtors) is not in a form and
substance that is reasonably satisfactory to each of (i) the
Requisite Holding Noteholders and (ii) the Requisite Second
Lien Noteholders;
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(c)
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the Debtors
shall not have (i) commenced the Chapter 11 Cases in the
Bankruptcy Court on or prior to March 16, 2009, or
(ii) filed the Plan and Disclosure Statement with the
Bankruptcy Court on or prior to the Filing Date;
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(d)
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the Disclosure
Statement is not approved on or before 60 days following the Filing
Date, or such later date as may be mutually agreed upon by Group
and by each of (i) the Requisite Holding Noteholders and
(ii) the Requisite Second Lien Noteholders;
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(e)
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the
Confirmation Order, in form and substance reasonably satisfactory
to the Debtors and each of (i) the Requisite Holding
Noteholders and (ii) the Requisite Second Lien Noteholders,
confirming the Plan is not entered on or before 90 days following
the Filing Date, or such later date as may be mutually agreed upon
by Group and by each of (i) the Requisite Holding Noteholders
and (ii) the Requisite Second Lien Noteholders;
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(f)
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the effective
date of the Plan shall not have occurred on or before 120 days
following the Filing Date, or such later date as may be mutually
agreed upon by Group and by each of (i) the Requisite Holding
Noteholders and (ii) the Requisite Second Lien
Noteholders;
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(g)
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the Bankruptcy
Court shall not have entered an interim order approving the use of
cash collateral or otherwise approving the Debtors’ use of
cash to fund the chapter 11 cases within 15 days of the Petition
Date, or such later date as may be mutually agreed upon by Group
and by each of (i) the Requisite Holding Noteholders and
(ii) the Requisite Second Lien Noteholders;
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11
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(h)
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any of the
Chapter 11 Cases are converted to cases under chapter 7 of the
Bankruptcy Code;
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(i)
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the Bankruptcy
Court shall enter an order in any of the Chapter 11 Cases
appointing (i) a trustee under chapter 7 or chapter 11 of the
Bankruptcy Code, (ii) a responsible officer or (iii) an
examiner, in each case with enlarged powers relating to the
operation of the business (powers beyond those set forth in
subclauses (3) and (4) of Section 1106(a)) under
Section 1106(b) of the Bankruptcy Code;
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(j)
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any of the
Chapter 11 Cases are dismissed;
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(k)
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the
Confirmation Order is reversed on appeal or vacated;
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(l)
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any Party has
breached any material provision of this Agreement or the Plan Term
Sheet and such breach has not been duly waived or cured in
accordance with the terms hereof after a period of five
(5) days following written notice to the breaching
party;
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(m)
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any court or
governmental authority shall enter a final, non-appealable judgment
or order declaring this Agreement or any material portion hereof to
be unenforceable or enjoining the consummation of a material
portion of the transactions contemplated hereby;
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(n)
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the Debtors
shall withdraw the Plan or publicly announce their intention not to
support the Plan, or propose a reorganization or plan under the
Bankruptcy Code other than the Plan;
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(o)
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the Debtors
inform the Consenting Noteholders in writing of their
determination, under Section 2.2 hereof, that there is a
sufficient risk of non-performance by the Debtors with respect to
the financial obligations contemplated under the Plan such that the
Plan contemplated by the Plan Term Sheet is no longer in the best
interests of the Debtors’ estates;
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(p)
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the occurrence,
prior to the Petition Date, of an “Event of Default” as
defined in and under any indenture or other Note Documents
governing the Notes, in each case, which is not waived pursuant to
the terms of, or remains uncured for the applicable period under,
the relevant indenture or other Note Documents;
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(q)
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the Debtors
lose the exclusive right to file and solicit acceptances of a plan
of reorganization;
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(r)
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any final
definitive documents evidencing the Restructuring, or the
transactions contemplated by the Plan Term Sheet (the “
Definitive Documents ”), including any modification or
amendment thereof, provides for any terms that are not, in whole or
in part, consistent in any material respect with all or any portion
of the Plan Term Sheet and is not otherwise reasonably satisfactory
in all respects to each of (i) the Requisite Holding
Noteholders and (ii) the Requisite Second Lien
Noteholders;
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12
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(s)
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the Debtors
file any motion or pleading with the Bankruptcy Court that is not
consistent in any material respect with this Agreement or the Plan
Term Sheet and such motion or pleading has not been withdrawn prior
to the earlier of (i) two (2) business days of the
Debtors receiving notice that such motion or pleading is
inconsistent with this Agreement or the Plan Term Sheet and
(ii) entry of an order of the Bankruptcy Court approving such
motion;
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(t)
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the Bankruptcy
Court grants relief that is inconsistent with this Agreement or the
Plan Term Sheet in any material respect;
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(u)
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the
commencement of an avoidance action affecting the rights of any
Consenting Noteholder by the Debtors or the commencement of such an
action by any other party; or
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(v)
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subject to the
execution of an appropriate and otherwise reasonable
confidentiality agreement, the failure by the Debtors to provide to
the Consenting Noteholders and their advisors, including
Stroock & Stroock & Lavan LLP, and Andrews Kurth
LLP (i) reasonable access to the books and records of the
Debtors and (ii) reasonable access to the respective
management and advisors of the Debtors for the purposes of
evaluating the Debtors’ respective business plans and
participating in the plan process with respect to the
Restructuring.
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The foregoing Termination Events are
intended solely for the benefit of the Debtors and the Consenting
Noteholders; provided that neither the Debtors nor
any Consenting Noteholder may seek to terminate this Agreement
based upon a material breach or a failure of a condition (if any)
in this Agreement arising out of its own actions or omissions. Upon
a termination of this Agreement, the provisions of this Agreement
(other than this Section 7.1) shall become null and void and
have no further force or effect, and there shall be no continuing
liability or obligation of any Party hereunder, except that no such
termination shall relieve any Party from liability for its breach
or non-performance of its obligations hereunder prior to the date
of such termination. If this Agreement has been terminated in
accordance with this Section 7.1 at a time when permission of
the Bankruptcy Court shall be required for a Consenting Noteholder
to change or withdraw (or cause to change or withdraw) its vote to
accept the Plan, the Debtors shall not oppose any attempt by such
Consenting Noteholder to change or withdraw (or cause to change or
withdraw) such vote at such time.
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7.2
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Termination
Event Procedures.
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(a)
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Upon the
occurrence of a Termination Event pursuant to Section 7.1(b)
hereof, either: (i) the Requisite Holding Noteholders and/or
(ii) the Requisite Second Lien Noteholders shall have the
right to terminate this Agreement and the Plan Term Sheet by giving
written notice to the other Parties, only if the occurrence of the
Te
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