SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
----------------
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
(Amendment No.)
Zapata Corporation*
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(Name of Issuer)
Common Stock, $0.01 par value
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(Title of Class of Securities)
989070602
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(CUSIP Number)
Philip Falcone
555 Madison Avenue
16th Floor
New York, New York 10022
(212) 521-6988
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
June 17, 2009
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(Date of Event which Requires Filing of This Statement)
* IMPORTANT NOTE: THE SECURITIES SET FORTH IN THIS REPORT ARE DIRECTLY
BENEFICIALLY OWNED BY HARBINGER CAPITAL PARTNERS MASTER FUND I, LTD., HARBINGER
CAPITAL PARTNERS SPECIAL SITUATIONS FUND, L.P. AND/OR GLOBAL OPPORTUNITIES
BREAKAWAY LTD. (COLLECTIVELY, THE "FUNDS"). ALL OTHER REPORTING PERSONS ARE
INCLUDED WITHIN THIS REPORT DUE TO THEIR AFFILIATION WITH ONE OR ALL OF THE
FUNDS.
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
[_].
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7 for other parties
to whom copies are to be sent.
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The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("ACT") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
CUSIP No. 989070602
---------------------
1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Harbinger Capital Partners Master Fund I, Ltd.
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [_]
(b) [x]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
WC
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
7. SOLE VOTING POWER
0
8. SHARED VOTING POWER
3,296,228
9. SOLE DISPOSITIVE POWER
0
10. SHARED DISPOSITIVE POWER
0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,296,228
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [_]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
17.1%
14. TYPE OF REPORTING PERSON*
CO
CUSIP No. 989070602
---------------------
1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Harbinger Capital Partners LLC
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [_]
(b) [X]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
AF
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
7. SOLE VOTING POWER
0
8. SHARED VOTING POWER
3,296,228
9. SOLE DISPOSITIVE POWER
0
10. SHARED DISPOSITIVE POWER
0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,296,228
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [_]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
17.1%
14. TYPE OF REPORTING PERSON*
OO
CUSIP No. 989070602
---------------------
1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Harbinger Capital Partners Special Situations Fund, L.P.
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [_]
(b) [X]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
WC
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
7. SOLE VOTING POWER
0
8. SHARED VOTING POWER
3,296,228
9. SOLE DISPOSITIVE POWER
0
10. SHARED DISPOSITIVE POWER
0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,296,228
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [_]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
17.1%
14. TYPE OF REPORTING PERSON*
PN
CUSIP No. 989070602
---------------------
1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Harbinger Capital Partners Special Situations GP, LLC
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [_]
(b) [X]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
AF
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
7. SOLE VOTING POWER
0
8. SHARED VOTING POWER
3,296,228
9. SOLE DISPOSITIVE POWER
0
10. SHARED DISPOSITIVE POWER
0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,296,228
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [_]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
17.1%
14. TYPE OF REPORTING PERSON*
OO
CUSIP No. 989070602
---------------------
1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Global Opportunities Breakaway Ltd.
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [_]
(b) [X]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
WC
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
7. SOLE VOTING POWER
0
8. SHARED VOTING POWER
3,296,228
9. SOLE DISPOSITIVE POWER
0
10. SHARED DISPOSITIVE POWER
0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,296,228
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [_]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
17.1%
14. TYPE OF REPORTING PERSON*
CO
CUSIP No. 989070602
---------------------
1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Global Opportunities Breakaway Management, L.P.
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [_]
(b) [X]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
AF
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
7. SOLE VOTING POWER
0
8. SHARED VOTING POWER
3,296,228
9. SOLE DISPOSITIVE POWER
0
10. SHARED DISPOSITIVE POWER
0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,296,228
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [_]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
17.1%
14. TYPE OF REPORTING PERSON*
PN
CUSIP No. 989070602
---------------------
1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Global Opportunities Breakaway Management GP, L.L.C.
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [_]
(b) [X]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
AF
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
7. SOLE VOTING POWER
0
8. SHARED VOTING POWER
3,296,228
9. SOLE DISPOSITIVE POWER
0
10. SHARED DISPOSITIVE POWER
0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,296,228
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [_]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
17.1%
14. TYPE OF REPORTING PERSON*
OO
CUSIP No. 989070602
---------------------
1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Harbinger Holdings, LLC
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [_]
(b) [X]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
AF
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
7. SOLE VOTING POWER
0
8. SHARED VOTING POWER
6,592,456
9. SOLE DISPOSITIVE POWER
0
10. SHARED DISPOSITIVE POWER
0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,592,456
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [_]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.2%
14. TYPE OF REPORTING PERSON*
OO
CUSIP No. 989070602
---------------------
1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Philip Falcone
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [_]
(b) [X]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
AF
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
7. SOLE VOTING POWER
0
8. SHARED VOTING POWER
9,888,684
9. SOLE DISPOSITIVE POWER
0
10. SHARED DISPOSITIVE POWER
0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
9,888,684
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [_]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
51.3%
14. TYPE OF REPORTING PERSON*
IN
CUSIP No. 989070602
---------------------
Item 1. Security and Issuer.
Zapata Corporation (the "Issuer"), Common Stock, $.01 par value (the "Shares").
The principal executive offices of the Issuer are located at 100 Meridian
Centre, Suite 350, Rochester, NY, 14618.
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Item 2. Identity and Background.
The Reporting Persons (as defined below) are filing this Schedule 13D because
they have acquired beneficial ownership as a result of receiving certain proxies
to vote the Shares. Until the Closing (as defined in Item 6), the Funds will not
acquire a pecuniary interest in any of the Shares. For a detailed description of
the Share Purchase Agreement (as defined in Item 6) and the transactions
contemplated thereunder, please see Item 6.
(a-c,f) This Schedule 13D is being filed by Harbinger Capital Partners Master
Fund I, Ltd. (the "Master Fund"); Harbinger Capital Partners LLC ("Harbinger
LLC"), the investment manager of the Master Fund; Harbinger Capital Partners
Special Situations Fund, L.P. (the "Special Fund"); Harbinger Capital Partners
Special Situations GP, LLC ("HCPSS"), the general partner of the Special Fund;
Global Opportunities Breakaway Ltd. (the "Breakaway Fund"); Global Opportunities
Breakaway Management, L.P. ("Breakaway Management"), the investment manager of
the Breakaway Fund; Global Opportunities Breakaway Management GP, L.L.C.
("Breakaway Management GP"), the general partner of Breakaway Management;
Harbinger Holdings, LLC ("Harbinger Holdings"), the managing member of Harbinger
LLC and HCPSS; and Philip Falcone, the managing member of Breakaway Management
GP and Harbinger Holdings and the portfolio manager of the Master Fund, the
Special Fund and the Breakaway Fund (each of the Master Fund, Harbinger LLC,
Special Fund, HCPSS, Breakaway Fund, Breakaway Management, Breakaway Management
GP, Harbinger Holdings and Philip Falcone may be referred to herein as a
"Reporting Person" and collectively may be referred to as "Reporting Persons").
The Master Fund is a Cayman Islands corporation with its principal business
address at c/o International Fund Services (Ireland) Limited, Third Floor,
Bishop's Square, Redmond's Hill, Dublin 2, Ireland. The Breakaway Fund is a
Cayman Islands corporation with its principal business address at c/o Maples
Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, Cayman
Islands KY1-1104. Each of Harbinger LLC, HCPSS, Breakaway Management GP and
Harbinger Holdings is a Delaware limited liability company. Each of the Special
Fund and Breakaway Management is a Delaware limited partnership. Philip Falcone
is a United States citizen. The principal business address for each of Harbinger
LLC, the Special Fund, HCPSS, Breakaway Management, Breakaway Management GP,
Harbinger Holdings and Philip Falcone is 555 Madison Avenue, 16th Floor, New
York, New York 10022.
(d) Philip Falcone has not, during the last five years, been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors).
(e) None of the Reporting Persons have, during the last five years, been a party
to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding were or are subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, Federal or state securities laws or finding
any violation with respect to such laws.
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Item 3. Source and Amount of Funds or Other Consideration.
As of the date hereof the Master Fund may be deemed to beneficially own
3,296,228 Shares.
As of the date hereof Harbinger LLC may be deemed to beneficially own 3,296,228
Shares.
As of the date hereof the Special Fund may be deemed to beneficially own
3,296,228 Shares.
As of the date hereof HCPSS may be deemed to beneficially own 3,296,228 Shares.
As of the date hereof the Breakaway Fund may be deemed to beneficially own
3,296,228 Shares.
As of the date hereof Breakaway Management may be deemed to beneficially own
3,296,228 Shares.
As of the date hereof Breakaway Management GP may be deemed to beneficially own
3,296,228 Shares.
As of the date hereof Harbinger Holdings may be deemed to beneficially own
6,592,456 Shares.
As of the date hereof Philip Falcone may be deemed to beneficially own
9,888,684 Shares.
No borrowed funds were used to purchase the Shares, other than any borrowed
funds used for working capital purposes in the ordinary course of business.
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Item 4. Purpose of Transaction.
On June 17, 2009, the Funds and The Malcolm I. Glazer Family Limited
Partnership, a Nevada limited partnership (the "Family LP"), Malcolm I. Glazer,
Avram A. Glazer and Linda Glazer (each such person and the Family LP, a "Seller"
and together the "Sellers"), entered into a Share Purchase Agreement (the "Share
Purchase Agreement"), pursuant to which, among other things, the Funds agreed to
purchase an aggregate of 9,888,684 Shares from the Sellers. The Funds have
proposed to purchase an additional 49,278 Shares from certain other members of
the Glazer family.
The Reporting Persons intend to acquire the Shares for investment purposes.
Pursuant to the Share Purchase Agreement, each Seller has granted to Harbinger
LLC a proxy to vote the Shares owned by such Seller for the election of three
individuals to the board of directors of the Issuer, one of whom shall be Avram
A. Glazer and two of whom, Philip A. Falcone and Corrine J. Glass (as Class II
directors), have been designated by Harbinger LLC.
After the Reporting Persons acquire the Shares, they intend to evaluate their
investment in the Shares on a continual basis. Other than as expressly set forth
below, the Reporting Persons have no plans or proposals as of the date of this
filing that relate to, or would result in, any of the actions enumerated in Item
4(a)-(j) of Schedule 13D. The Reporting Persons may engage in communications
with one or more stockholders, officers or directors of the Issuer and others,
including but not limited to, discussions regarding the Issuer's operations and
strategic direction and ideas that, if effected, could result in, among other
things, any of the matters identified in Item 4(a)-(j) of Schedule 13D,
including but not limited to debt or equity capital raising transactions,
acquisitions, mergers, combinations and other strategic transactions. The
Reporting Persons reserve their right, based on all relevant factors and subject
to applicable law, at any time and from time to time, to review or reconsider
their position, change their purpose, take other actions, including to cause or
introduce strategic or corporate transactions involving the Issuer or any of its
subsidiaries, or one or more of the types of transactions or have one or more
the results described in Item 4(a)-(j) of Schedule 13D) or formulate and
implement plans or proposals with respect to any of the foregoing.
The Reporting Persons from time to time intend to review their investment in the
Issuer on the basis of various factors, including whether various strategic
transactions have occurred or may occur, the Issuer's business, financial
condition, results of operations and prospects, general economic and industry
conditions, the securities markets in general and those for the Issuer's
securities in general, as well as other developments and other investment
opportunities. Based upon such review, the Reporting Persons intend to take such
actions in the future as they deem appropriate in light of the circumstances
existing from time to time, which may include causing a distribution of
available cash of the Issuer, further acquisitions of Common Stock of the Issuer
or disposal of all or any portion of the Shares acquired pursuant to the Share
Purchase Agreement or other Common Stock of the Issuer otherwise acquired by the
Reporting Persons, either in the open market or privately negotiated
transactions, with or without prior notice.
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Item 5. Interest in Securities of the Issuer.
(a, b) As of the date hereof, the Master Fund may be deemed to be the beneficial
owner of 3,296,228 Shares, constituting 17.1% of the Shares of the Issuer, based
upon 19,276,334 Shares outstanding as of May 1, 2009, according to the Issuer's
Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission
on May 6, 2009.
The Master Fund has the sole power to vote or direct the vote of 0 Shares; has
the shared power to vote or direct the vote of 3,296,228 Shares; has sole power
to dispose or direct the disposition of 0 Shares; and has shared power to
dispose or direct the disposition of 0 Shares.
(a, b) As of the date hereof, Harbinger LLC may be deemed to be the beneficial
owner of 3,296,228 Shares, constituting 17.1% of the Shares of the Issuer, based
upon 19,276,334 Shares outstanding as of May 1, 2009, according to the Issuer's
Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission
on May 6, 2009.
Harbinger LLC has the sole power to vote or direct the vote of 0 Shares; has the
shared power to vote or direct the vote of 3,296,228 Shares; has sole power to
dispose or direct the disposition of 0 Shares; and has shared power to dispose
or direct the disposition of 0 Shares.
(a, b) As of the date hereof, the Special Fund may be deemed to be the
beneficial owner of 3,296,228 Shares, constituting 17.1% of the Shares of the
Issuer, based upon 19,276,334 Shares outstanding as of May 1, 2009, according to
the Issuer's Quarterly Report on Form 10-Q filed with the Securities and
Exchange Commission on May 6, 2009.
The Special Fund has the sole power to vote or direct the vote of 0 Shares; has
the shared power to vote or direct the vote of 3,296,228 Shares; has sole power
to dispose or direct the disposition of 0 Shares; and has shared power to
dispose or direct the disposition of 0 Shares.
(a, b) As of the date hereof, HCPSS may be deemed to be the beneficial owner of
3,296,228 Shares, constituting 17.1% of the Shares of the Issuer, based upon
19,276,334 Shares outstanding as of May 1, 2009, according to the Issuer's
Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission
on May 6, 2009.
HCPSS has the sole power to vote or direct the vote of 0 Shares; has the shared
power to vote or direct the vote of 3,296,228 Shares; has sole power to dispose
or direct the disposition of 0 Shares; and has shared power to dispose or direct
the disposition of 0 Shares.
(a, b) As of the date hereof, the Breakaway Fund may be deemed to be the
beneficial owner of 3,296,228 Shares, constituting 17.1% of the Shares of the
Issuer, based upon 19,276,334 Shares outstanding as of May 1, 2009, according to
the Issuer's Quarterly Report on Form 10-Q filed with the Securities and
Exchange Commission on May 6, 2009.
The Breakaway Fund has the sole power to vote or direct the vote of 0 Shares;
has the shared power to vote or direct the vote of 3,296,228 Shares; has sole
power to dispose or direct the disposition of 0 Shares; and has shared power to
dispose or direct the disposition of 0 Shares.
(a, b) As of the date hereof, Breakaway Management may be deemed to be the
beneficial owner of 3,296,228 Shares, constituting 17.1% of the Shares of the
Issuer, based upon 19,276,334 Shares outstanding as of May 1, 2009, according to
the Issuer's Quarterly Report on Form 10-Q filed with the Securities and
Exchange Commission on May 6, 2009.
Breakaway Management has the sole power to vote or direct the vote of 0 Shares;
has the shared power to vote or direct the vote of 3,296,228 Shares; has sole
power to dispose or direct the disposition of 0 Shares; and has shared power to
dispose or direct the disposition of 0 Shares.
(a, b) As of the date hereof, Breakaway Management GP may be deemed to be the
beneficial owner of 3,296,228 Shares, constituting 17.1% of the Shares of the
Issuer, based upon 19,276,334 Shares outstanding as of May 1, 2009, according to
the Issuer's Quarterly Report on Form 10-Q filed with the Securities and
Exchange Commission on May 6, 2009.
Breakaway Management GP has the sole power to vote or direct the vote of 0
Shares; has the shared power to vote or direct the vote of 3,296,228 Shares; has
sole power to dispose or direct the disposition of 0 Shares; and has shared
power to dispose or direct the disposition of 0 Shares.
(a, b) As of the date hereof, Harbinger Holdings may be deemed to be the
beneficial owner of 6,592,456 Shares, constituting 34.2% of the Shares of the
Issuer, based upon 19,276,334 Shares outstanding as of May 1, 2009, according to
the Issuer's Quarterly Report on Form 10-Q filed with the Securities and
Exchange Commission on May 6, 2009.
Harbinger Holdings has the sole power to vote or direct the vote of 0 Shares;
has the shared power to vote or direct the vote of 6,592,456 Shares; has sole
power to dispose or direct the disposition of 0 Shares; and has shared power to
dispose or direct the disposition of 0 Shares.
(a, b) As of the date hereof, Philip Falcone may be deemed to be the beneficial
owner of 9,888,684 Shares, constituting 51.3% of the Shares of the Issuer, based
upon 19,276,334 Shares outstanding as of May 1, 2009, according to the Issuer's
Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission
on May 6, 2009.
Mr. Falcone has the sole power to vote or direct the vote of 0 Shares; has the
shared power to vote or direct the vote of 9,888,684 Shares; has sole power to
dispose or direct the disposition of 0 Shares; and has shared power to dispose
or direct the disposition of 0 Shares.
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(c) The trading dates, number of Shares purchased and sold and price per share
for all transactions in the Shares that were effected by the Reporting Persons
in the past sixty days are set forth in Exhibit B hereto.
- --------------------------------------------------------------------------------
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
Share Purchase Agreement
Pursuant to the Share Purchase Agreement, each Seller has agreed to sell and the
Funds have agreed to purchase, an aggregate of 9,888,684 Shares from the Sellers
and each Seller has granted to Harbinger LLC a proxy to vote the Shares owned by
such Seller for the election of three individuals to the board of directors of
the Issuer, one of whom shall be Avram A. Glazer and two of whom, Philip A.
Falcone and Corrine J. Glass (as Class II directors), have been designated by
Harbinger LLC. The Sellers have agreed to cause the Issuer to reconvene its
adjourned meeting of stockholders, and to prepare and mail revised proxy
materials, in each case, in a manner that provides for the election of Avram A.
Glazer, Philip A. Falcone and Corrine J. Glass as directors of the Issuer. The
Sellers have agreed to use their best efforts to cause the Issuer to mail such
proxy materials within four business days of the date of the Share Purchase
Agreement and to hold such meeting of stockholders within ten business days
following such mailing.
The Share Purchase Agreement includes customary covenants including the
following: (a) the Funds and Sellers have agreed to use their reasonable best
efforts to cause their respective closing conditions described below to be
satisfied, (b) each Seller has agreed to (i) certain customary restrictions on
such Seller's ability to transfer or otherwise dispose of any of such Seller's
Shares or shares of common stock ("Zap.com Shares") of Zap.com, the Issuer's
majority-owned subsidiary ("Zap.com"), (ii) not to enter into any voting
arrangement with respect to such Seller's Shares or Zap.com Shares or (iii) not
to take any action that could make any of such Seller's representations or
warranties contained in the Share Purchase Agreement untrue or incorrect or
would have the effect of preventing such Seller from performing any of such
Seller's obligations under the Share Purchase Agreement, and (c) the Sellers
have agreed not to, and have agreed to cause the Issuer not to, operate or take
any action of the Issuer or its subsidiaries outside the ordinary course of
business, including but not limited to, the payment of any dividends or
distributions, change the Issuer's or its subsidiaries' charter or bylaws, grant
any registration rights of the Issuer or its subsidiaries, purchase or otherwise
acquire any shares of any capital stock of the Issuer or its subsidiaries, enter
into or amend the terms of any transactions between the Issuer or any of its
subsidiaries and any immediate family member, affiliate or associate of the
Sellers, sell, lease, or otherwise dispose of any asset or property of the
Issuer or its subsidiaries, enter into any loan or impose any encumbrance on any
asset or property of the Issuer or its subsidiaries or enter into any agreement
to do any of the foregoing.
In addition, each Seller has agreed not to vote on or consent to any matter in
his capacity as a stockholder of the Issuer, and the Issuer has agreed not to
vote on or consent to any matter in its capacity as a stockholder of Zap.com,
except as specifically contemplated by the Share Purchase Agreement with respect
to the granting of the proxies by the Sellers to the Funds or take any action as
a member of the board of directors of the Issuer or Zap.com other than an action
(x) that will not result in a failure of any condition of the Funds to close the
transactions under the Share Purchase Agreement, and (y) such Seller is advised
by counsel he or she must take such action or be in breach of his or her
fiduciary duty as a director. Concurrently with the Closing, the Sellers have
also agreed to use their best efforts to cause each of Avram A. Glazer, Edward
S. Glazer, Darcie S. Glazer and Bryan G. Glazer and each Seller and every person
who is an immediate family member of a Seller or who is an affiliate or
associate of a Seller who is an officer or director of the Issuer or Zap.com to
resign from each position held by such person with the Issuer or Zap.com.
The obligation of the Funds to purchase the Shares at the Closing is subject to
the satisfaction at or before the date of the Closing (the "Closing Date"), of
certain closing conditions, including but not limited to, (i) the election of
Avram A. Glazer, Philip A. Falcone and Corrine J. Glass, as members of the board
of directors of the Issuer, (ii) the Sellers' and the Funds' respective
representations and warranties being true and correct in all material respects,
(iii) the Sellers and the Funds performing and complying with all respective
agreements and covenants, (iv) no action or other proceeding to be pending, no
investigation by any governmental authority to be commenced and no action or
proceeding by any governmental authority to be threatened against any of the
Funds, the Sellers, the Issuer or Zap.com or any of their respective principals,
officers or directors that is seeking to restrain or change the transactions
contemplated under the Share Purchase Agreement or questioning the legality or
validity of, or seeking damages in connection with any, such transactions, (v)
all applicable consents necessary to the execution and delivery of the Share
Purchase Agreement and the consummation of the transactions contemplated thereby
to be obtained, (vi) no material adverse change since the date of the Share
Purchase Agreement in the Issuer or Zap.com to have occurred, (vii) the Sellers
having delivered to the Funds a record list of stockholders which confirms that
the Shares and Zap.com Shares being purchased by the Funds represent the same
percentage of issued and outstanding Shares of the Issuer and Zap.com,
respectively, (viii) there shall have been no change to the Issuer's or its
subsidiaries' authorized capital stock and no capital stock or other rights
exchangeable into, or rights to acquire any, shares of capital stock of the
Issuer or its subsidiaries shall have been issued, and (ix) concurrently with
the Closing, certain family members of the Sellers shall have sold their Shares
to the Funds. The Funds have proposed to purchase an additional 49,278 Shares
from certain other members of the Glazer family.
The foregoing summary of certain terms of the Share Purchase Agreement and the
transactions contemplated thereby, does not purport to be complete and is
subject to, and qualified in its entirety by, the full text of the Share
Purchase Agreement, which is included as Exhibit C to this Schedule 13D, which
is incorporated herein by reference.
Family LP and the Funds are parties to a letter agreement with Jefferies High
Yield Trading, LLC ("Jefferies"), pursuant to which each of Family LP, on the
one hand, and the Funds, on the other hand, will pay Jefferies a finder's fee in
the amount of $500,000. The foregoing summary of the terms of the letter
agreement does not purport to be complete and is subject to, and qualified in
its entirety by, the full text of the letter agreement, which is included as
Exhibit D to this Schedule 13D and is incorporated herein by reference.
- --------------------------------------------------------------------------------
Item 7. Material to be Filed as Exhibits.
THE FOLLOWING MATERIALS ARE FILED AS EXHIBITS TO THIS SCHEDULE 13D:
Exhibit A: Agreement between the Reporting Persons to file jointly
Exhibit B: Schedule of Transactions in the Shares of the Issuer
Exhibit C: Share Purchase Agreement, dated June 17, 2009
Exhibit D: Letter Agreement with Jefferies High Yield Trading, LLC
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Harbinger Capital Partners Master Fund I, Ltd.
By: Harbinger Capital Partners LLC
By: Harbinger Holdings, LLC, Managing Member
By: /s/ Philip Falcone
- --------------------------------
Harbinger Capital Partners LLC
By: Harbinger Holdings, LLC, Managing Member
By: /s/ Philip Falcone
- --------------------------------
Harbinger Capital Partners Special Situations Fund, L.P.
By: Harbinger Capital Partners Special Situations GP, LLC
By: Harbinger Holdings, LLC, Managing Member
By: /s/ Philip Falcone
- --------------------------------
Harbinger Capital Partners Special Situations GP, LLC
By: Harbinger Holdings, LLC, Managing Member
By: /s/ Philip Falcone
- --------------------------------
Global Opportunities Breakaway Ltd.
By: Global Opportunities Breakaway Management, L.P.
By: Global Opportunities Breakaway Management GP, L.L.C., General Partner
By: /s/ Philip Falcone
- --------------------------------
Global Opportunities Breakaway Management, L.P.
By: Global Opportunities Breakaway Management GP, L.L.C., General Partner
By: /s/ Philip Falcone
- --------------------------------
Global Opportunities Breakaway Management GP, L.L.C.
By: /s/ Philip Falcone
- --------------------------------
Harbinger Holdings, LLC
By: /s/ Philip Falcone
- --------------------------------
/s/ Philip Falcone
- --------------------------------
Philip Falcone
June 19, 2009
Exhibit A
AGREEMENT
The undersigned agree that this Schedule 13D dated June 19, 2009 relating to the
Common Stock, $0.01 par value of Zapata Corporation shall be filed on behalf of
the undersigned.
Harbinger Capital Partners Master Fund I, Ltd.
By: Harbinger Capital Partners LLC
By: Harbinger Holdings, LLC, Managing Member
By: /s/ Philip Falcone
- --------------------------------
Harbinger Capital Partners LLC
By: Harbinger Holdings, LLC, Managing Member
By: /s/ Philip Falcone
- --------------------------------
Harbinger Capital Partners Special Situations Fund, L.P.
By: Harbinger Capital Partners Special Situations GP, LLC
By: Harbinger Holdings, LLC, Managing Member
By: /s/ Philip Falcone
- --------------------------------
Harbinger Capital Partners Special Situations GP, LLC
By: Harbinger Holdings, LLC, Managing Member
By: /s/ Philip Falcone
- --------------------------------
Global Opportunities Breakaway Ltd.
By: Global Opportunities Breakaway Management, L.P.
By: Global Opportunities Breakaway Management GP, L.L.C., General Partner
By: /s/ Philip Falcone
- --------------------------------
Global Opportunities Breakaway Management, L.P.
By: Global Opportunities Breakaway Management GP, L.L.C., General Partner
By: /s/ Philip Falcone
- --------------------------------
Global Opportunities Breakaway Management GP, L.L.C.
By: /s/ Philip Falcone
- --------------------------------
Harbinger Holdings, LLC
By: /s/ Philip Falcone
- --------------------------------
/s/ Philip Falcone
- --------------------------------
Philip Falcone
June 19, 2009
Exhibit B
Transactions in the Common Stock, $0.01 par value
-------------------------------------------------
TRANSACTIONS BY HARBINGER CAPITAL PARTNERS MASTER FUND I, LTD.
Date of Number of Shares Price per Share
Transaction Purchased/(Sold)
6/17/09 3,296,228 $7.50
TRANSACTIONS BY HARBINGER CAPITAL PARTNERS SPECIAL SITUATIONS FUND, L.P.
Date of Number of Shares Price per Share
Transaction Purchased/(Sold)
6/17/09 3,296,228 $7.50
TRANSACTIONS BY GLOBAL OPPORTUNITIES BREAKAWAY LTD.
Date of Number of Shares Price per Share
Transaction Purchased/(Sold)
6/17/09 3,296,228 $7.50
EXHIBIT C
SHARE PURCHASE AGREEMENT
SHARE PURCHASE AGREEMENT (the "Agreement"), dated as of June 17, 2009 by
and among The Malcolm I. Glazer Family Limited Partnership, a Nevada limited
partnership (the "Family LP"), Malcolm I. Glazer, Avram A. Glazer, and Linda
Glazer (each such person and the Family LP, a "Seller" and together the
"Sellers"), and Harbinger Capital Partners Master Fund I, Ltd., Global
Opportunities Breakaway Ltd. and Harbinger Capital Partners Special Situations
Fund, L.P. (each, an "Investor" and together the "Investors").
RECITALS:
The Sellers own the number of shares of common stock, par value $0.01
per share ("Company Shares"), of Zapata Corporation, a Nevada corporation (the
"Company") set forth on Schedule I, which shares constitute approximately
51.300% of the issued and outstanding Company Shares.
The Sellers own the number of shares of common stock, par value $0.01
per share ("Zap.com Shares"), of Zap.com Corporation, a Nevada corporation
("Zap.com") set forth on Schedule I, which shares constitute approximately 1.5%
of the issued and outstanding Zap.com Shares.
The Investors desire to purchase, and the Sellers desire to sell, upon
the terms and conditions set forth herein, all of the Company Shares and all of
the Zap.Com Shares owned by the Sellers.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, and intending to be legally bound, the parties hereto agree as
follows:
ARTICLE 1
PURCHASE AND SALE OF SHARES
Section 1.1 Purchase and Sale of Shares. Subject to the satisfaction of
the conditions set forth in Sections 5.1 and 5.2 (or the waiver thereof by the
party entitled to waive that condition), the Sellers shall sell to the
Investors, and the Investors shall purchase from the Sellers on the Closing Date
(as defined below), the Company Shares and the Zap.com Shares set forth opposite
each Seller's name on Schedule I (the "Closing").
Section 1.2 Purchase Price. The purchase price for the Company Shares
shall be $7.50 per Company Share and the purchase price for the all of the
Zap.com Shares shall be $2.00 in the aggregate (the "Purchase Price"). At the
Closing, each Investor shall pay the portion of the Purchase Price set forth
opposite such Investor's name on Schedule II and immediately following the
Closing shall be the owner and holder of record of the number of Company Shares
and Zap.com Shares set forth opposite each Investor's name on Schedule II.
Section 1.3 Form of Payment. At the Closing, in exchange for the
Company Shares and Zap.com Shares set forth on Schedule I, each Investor shall
pay the portion of the Purchase Price opposite its name on Schedule II to the
Sellers in the amount set forth opposite each Seller's name on Schedule I by
wire transfer of immediately available funds into the account or accounts
designated on Schedule I.
ARTICLE 2
CLOSING
Section 2.1 Closing Date. The date and time of the Closing (the
"Closing Date") shall be 10:00 a.m., New York City Time, at the offices of Kaye
Scholer LLP, 425 Park Avenue, New York, NY 10022 (or at such other time or place
as the parties may designate in writing) on that date that is two business days
following the satisfaction or waiver of each condition to the Closing set forth
in Sections 5.1 and 5.2 (other than those conditions that may be satisfied only
by a delivery at or action to be taken at the Closing).
Section 2.2 Items To Be Delivered by the Sellers. At the Closing, and
subject to the terms and conditions contained herein, the Sellers shall deliver
(i) to the Investors one or more share certificates representing the Company
Shares and Zap.com Shares to be purchased and sold hereunder, which are held in
certificated form, in each case accompanied by a duly endorsed stock power in
blank or other appropriate instrument of transfer (duly endorsed and otherwise
in form sufficient for transfer and reasonably satisfactory to each Investor)
and (ii) cause to be issued to the Investors confirmation of book entry transfer
of such Company Shares and Zap.com Shares as are held for any Seller's benefit
in a Depository Trust Company account into such Depository Trust Company as may
be designated by the Investors, as well as deliver each of the other items
described in Section 5.1.
Section 2.3 Items to be Delivered by the Investors. At the Closing, and
subject to the terms and conditions contained herein, each Investor shall
deliver to the Sellers the Purchase Price set forth opposite such Investor's
name on Schedule II, and each of the other items described in Section 5.2.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Family LP hereby represents and warrants to the Investors, and each
Seller, individually as to itself and not jointly, hereby represents and
warrants to the Investors, each as of the date hereof and the Closing Date, as
follows:
Section 3.1 Ownership of Company Shares and Zap.com Shares. Each Seller
is the sole record and beneficial owner of, and has marketable valid title to
the Company Shares and Zap.com Shares set forth opposite such Seller's name on
Schedule I and all such Company Shares and Zap.com Shares are held free and
clear of any and all claims, liens, security interests and other encumbrances of
any nature and free and clear of any claim by any person to or against such
shares (together, "Encumbrances"), other than the Encumbrance of the
Shareholders' Agreement dated as of May 30, 1997 (as amended, the "Shareholders'
Agreement), by Malcolm I. Glazer and Family LP in favor of the Company. A true
and complete copy of the Shareholders' Agreement has been made available to the
Investors. The Company Shares and Zap.com Shares constitute all of the shares of
capital stock of the Company and Zap.com owned by any Seller. After giving
effect to the transactions contemplated hereunder, no Seller has any options,
warrants or other rights to acquire any capital stock of either the Company or
Zap.com. Each Seller has, and as of the Closing, shall have, the full right,
power and authority to sell, assign, transfer and convey the Company Shares and
Zap.com Shares to the Investors as provided herein. As of the Closing, each
Seller shall transfer all of its right, title and interest in and to the Company
Shares and Zap.com Shares to the Investors free and clear of any Encumbrance.
Section 3.2 Authorization, Validity and Enforceability. This Agreement
and the transactions of the Sellers contemplated hereby have been duly
authorized by each Seller. This Agreement has been duly executed and delivered
by each Seller and constitutes the valid and binding obligation of each Seller,
enforceable against each Seller in accordance with its terms except to the
extent that its enforceability may be subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles.
The execution, delivery and performance of this Agreement by the Sellers will
not violate or result in a default under any provision of any commitment,
agreement or instrument to which any Seller is a party or by which any Seller is
bound and will not contravene any law (including common law), rule or regulation
of any administrative agency or governmental or regulatory body ("Governmental
Authority"), or any order, writ, injunction or decree of any court or
Governmental Authority applicable to any Seller.
Section 3.3 Litigation; Approvals. There are no proceedings pending or,
to the knowledge of any Seller, threatened, and there is no order, writ,
judgment or decree affecting any Seller which, if adversely determined, would
reasonably be expected to have a material adverse effect on the transactions
contemplated hereby. No approval by or filing with any Governmental Authority or
other person is required for any Seller to enter into or perform this Agreement,
except for such as have been received or made and except for any filings under
Schedule 13D or Section 16 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), as Sellers may be required to make in connection with this
Agreement and the transactions contemplated hereby. The foregoing
notwithstanding, the Investors acknowledge that the Sellers and Investors have
jointly determined that the transactions contemplated hereby do not require that
any party make filings under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR Act"), and Sellers make no representation or warranty
with respect to the applicability of the HSR Act.
Section 3.4 Capitalization. Based solely on the Lists of Shareholders
from the Company's and Zap.com's respective transfer agents, dated as of the
date hereof, a copies of which are annexed hereto as Schedule 3.4, the Sellers
own approximately 51.300% of the issued and outstanding Company Shares and
approximately 1.5% of the issued and outstanding Zap.com Shares. Since March 31,
2009, there has been no change to the Company's or its subsidiaries' authorized
capital stock and no capital stock or rights exchangeable or convertible into,
or rights to acquire any, shares of capital stock of the Company or its
subsidiaries have been issued.
Section 3.5 Exchange Act Documents. To the actual knowledge of the
Sellers, as of their respective dates, none of the Company's and Zap.com's
Annual Reports on Form 10-K for the fiscal year ended December 31, 2008, the
Company's and Zap.com's Quarterly Report on Form 10-Q for the quarterly period
ended March 31, 2009, the Company's Proxy Statement on Schedule 14A for the
Annual Meeting of Stockholders dated April 14, 2009 and Zap.com's Information
Statement on Schedule 14C for the Annual Meeting of Stockholders dated April 14,
2009, and the Company's and Zap.com's Current Reports on Form 8-K, since January
1, 2009 (collectively, the "Exchange Act Documents"), at the time they were
filed with the SEC, contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
Section 3.6 No Intermediary; No Payments to Sellers. (1) Other than
pursuant to the letter agreement, dated June 17, 2009 (the "Jefferies Engagement
Letter"), among Family LP, an affiliate of the Investors and Jefferies &
Company, Inc. or one of its designated affiliates, there is no investment
banker, broker, finder or other intermediary who might be entitled to any fee or
commission upon consummation of the transactions contemplated hereby based upon
arrangements made by or on behalf of any Seller, the Company or Zap.com. Any
such fee or commission (other than those required to be paid by the Investors in
accordance with the Jefferies Engagement Letter), shall be the sole
responsibility of the Sellers and shall be paid in full by the Sellers.
(b) Other than (i) the Purchase Price, (ii) compensation in the
ordinary course consistent with past practice for services rendered through the
effective date of said termination and/or resignation, and (iii) other benefits
that have accrued to Sellers in the ordinary course consistent with past
practice under the Zapata Corporation Pension Plan and the 401(k) Plan and which
are described on Schedule 3.6(b), no Seller, no immediate family member,
affiliate or associate (as each such term is defined in the Exchange Act) of any
Seller is entitled to any payment whether for severance, defined benefit, change
of control payment or otherwise, arising from or relating to the purchase and
sale of the Company Shares and Zap.com Shares or the resignation by such Seller
or other person as a director, officer or other capacity of the Company or
Zap.com.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF INVESTORS
Each Investor, individually as to itself and not jointly, represents
and warrants to Sellers as of the date hereof and the Closing Date as follows:
Section 4.1 Validity and Enforceability. This Agreement and the
transactions of the Investors contemplated hereby have been duly authorized by
each Investor. This Agreement has been duly executed and delivered by each
Investor and constitutes the valid and binding obligation of each Investor,
enforceable in accordance with its terms, and the execution, delivery and
performance of this Agreement by such Investor will not violate or result in a
default under any provisions of any commitment, agreement or instrument to which
such Investor is a party or by which such Investor is bound, and will not
contravene any law (including common law), rule or regulation of any
Governmental Authority or any order, writ, injunction or decree of any court or
governmental Authority applicable to such Investor.
Section 4.2 Litigation; Approvals. There are no proceedings pending or
threatened, and there is no order, writ, judgment or decree affecting such
Investor, which, if adversely determined, would have a material adverse effect
on the transactions contemplated hereby. No approval by or filing with any
Governmental Authority or other party is required for such Investor to enter
into or perform this Agreement, except for such as have been received or made
and except for any filing on Schedule 13D or Section 16 under the Exchange Act
as the Investors may be required to make in connection with the transactions
contemplated hereby. The foregoing notwithstanding, the Sellers acknowledge that
the Sellers and Investors have jointly determined that the transactions
contemplated hereby do not require that any party make filings under the HSR
Act, and Investors make no representation or warranty with respect to the
applicability of the HSR Act.
Section 4.3 Certain Securities Law Matters. Each Investor is an
"accredited investor" as defined in Rule 501(a) of Regulation D promulgated
pursuant to the Securities Act. Each Investor has substantial experience in
evaluating and investing in securities in companies similar to the Company and
Zap.com so that such Investor is capable of evaluating the merits and risks of
such Investor's investment in the Company and Zap.com and has the capacity to
protect such Investor's own interests. Each Investor is acquiring the Company
Shares and Zap.com Shares being purchased by such Investor for investment for
such Investor's own account and not with the view to any public distribution
thereof or with any intention of disposing thereof in a manner that would
violate the registration requirements of the Securities Act; provided, however,
that by making the representations herein, no Investor is required to hold any
of the Company Shares and Zap.com Shares being purchased by it for any minimum
or other specific term and reserves the right to dispose of the Company Shares
and Zap.com Shares being purchased by it at any time in accordance with or
pursuant to a registration statement or an exemption under the Securities Act.
Each Investor understands that the offer and sale of the Company Shares and
Zap.com Shares have not been, and will not be, registered under applicable
Federal or state securities laws.
Section 4.4 No Reliance. Each Investor acknowledges and agrees that,
in negotiating and entering into this Agreement, (i) it has not relied on any
representations made by the Sellers, the Company, Zap.com, or any director,
officer, employee, investment banker, legal counsel or other representative or
agent thereof other than those of the Sellers expressly set forth herein, (ii)
it has been afforded the opportunity to do a due diligence review of the
business and affairs of the Company and Zap.com, including to ask such questions
of the Company and Zap.com, as it deems appropriate and material to the
transactions contemplated hereby and that its requests for information and
questions have been addressed to its satisfaction, and (iii) it has not relied
on the Sellers, the Company, Zap.com or any director, officer, employee,
investment banker, legal counsel or other representative or agent thereof with
respect to the sufficiency of its due diligence or the information provided to
it and has relied on its own expertise and judgment in deciding the sufficiency
thereof. The Investors understand and acknowledge that the Sellers have received
material non-public information regarding the Company, Company Shares, Zap.com
and Zap.com Shares. Each Investor hereby represents and warrants that it is
financially sophisticated with respect to the Company, Company Shares, Zap.com
and Zap.com Shares; it is capable of evaluating the risks associated with a
transaction involving the Company, Company Shares, Zap.com and Zap.com Shares,
including the risk of transacting on the basis of information that may be
materially different from the information available to the Sellers, and that it
is capable of sustaining any loss that may result from engaging in such a
transaction on such basis without material injury. In light of the foregoing,
each Investor hereby waives any and all claims (including, without limitation,
any and all claims under any applicable securities law) it may have or may
hereafter acquire against the Sellers relating to any failure by the Sellers to
disclose to the Investors in connection with the Investors' purchase of the
Company Shares and Zap.com Shares pursuant hereto any information which may be
considered to be material non-public information in respect of the Company,
Company Shares, Zap.com and Zap.com Shares.
Section 4.5 No Intermediary. Other than pursuant to the Jefferies
Engagement Letter, there is no investment banker, broker, finder or other
intermediary who might be entitled to any fee or commission upon consummation of
the transactions contemplated by this Agreement based upon arrangements made by
or on behalf of any Investor.
ARTICLE 5
CONDITIONS TO CLOSING
Section 5.1 Investors' Conditions. The obligation of the Investors
hereunder to purchase the Company Shares and Zap.com Shares at the Closing is
subject to the satisfaction, at or before the Closing Date, of the following
conditions, provided that these conditions are for the Investors' sole benefit
and may be waived by the Investors at any time in their sole discretion by
providing the Sellers with prior written notice thereof:
5.1.1 Representations and Warranties. Except as otherwise
contemplated or permitted hereby, (a) the representations and
warranties of the Sellers contained in this Agreement or in any
certificate or document to be delivered to the Investors pursuant
hereto shall be deemed to have been made again at and as of the Closing
Date and shall be true and correct in all material respects as of such
date, and (b) each of the Sellers shall have performed and complied in
all material respects with all agreements and conditions required by
this Agreement to be performed or complied with by the Sellers prior to
or on the Closing Date, including but not limited to the requirements
of each Seller to deliver all of the Company Shares and Zap.com Shares
set forth on Schedule I to the Investors.
5.1.2 No Actions. No action, suit or proceeding by any court
or Governmental Authority shall be pending, no investigation by any
Governmental Authority shall have been commenced and no action, suit or
proceeding by any Governmental Authority shall have been threatened
against any of the Investors, the Sellers, the Company or Zap.com or
any of their respective principals, trustees, officers or directors
seeking to restrain, prevent or change the transactions contemplated
hereby or questioning the legality or validity of any such transactions
or seeking damages in connection with any such transactions.
5.1.3 Consents. All consents, approvals and authorizations of
Governmental Authority and all filings with and notifications of
Governmental Authority or other entities which regulate the business of
the Company and Zap.com necessary to the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby
shall have been obtained or effected.
5.1.4 No Material Adverse Change. There shall have been no
material adverse change since the date hereof in the business, assets,
financial condition, results of operations or prospects of the Company
or Zap.com, including that nothing has occurred (other than the
transactions contemplated hereunder) since the date of Company's and
Zap.com's most recent Exchange Act Documents that would be required to
be disclosed in such Exchange Act Documents and no agreement entered
into (other than this Agreement) that would be required to be filed as
an exhibit to any Exchange Act Documents.
5.1.5 Election of Directors; Resignations. Philip A. Falcone
and Corrine J. Glass shall have been elected as members of the Board of
Directors of the Company (as Class II directors). The number of members
of the boards of directors of the Company and Zap.com shall remain at
seven and one, respectively. The resignations of Avram A. Glazer,
Edward S. Glazer, Darcie S. Glazer and Bryan G. Glazer contemplated by
Section 6.3 shall have occurred.
5.1.6 Capitalization. Sellers shall have delivered to the
Investors a record list of shareholders, prepared by the transfer agent
of the Company and dated as of the date of Closing (the "Shareholder
List"), which Shareholder List confirms that the Company Shares and
Zap.com Shares set forth on Schedule I represent the same percentage of
issued and outstanding Company Shares (subject only to the exercise of
options by persons other than the Sellers) on the Closing Date as such
shares represent on the date hereof. Since March 31, 2009, there shall
have been no change to the Company's or its subsidiaries' authorized
capital stock and no capital stock or rights exchangeable or
convertible into, or rights to acquire any, shares of capital stock of
the Company or its subsidiaries shall have been issued.
5.1.7 Sale of Shares Held by Other Glazer Family Members. The
persons listed on Schedule III shall have entered into one or more
binding agreements with the Investors, in form and substance reasonably
acceptable to each party thereto, providing for the sale of the Company
Shares set forth on Schedule III at a price per Company Share equal to
the Purchase Price which purchase and sale shall occur concurrently
with the Closing.
Section 5.2 Sellers' Conditions. The obligation of the Sellers
hereunder to sell to the Investors the Company Shares and Zap.com Shares at the
Closing is subject to the satisfaction, at or before the Closing Date, of each
of the following conditions, provided that these conditions are for the Sellers'
sole benefit and may be waived by the Sellers at any time in their sole
discretion by providing the Investors with prior written notice thereof:
5.2.1 Representations and Warranties. Except as otherwise
contemplated or permitted hereby, (a) the representations and
warranties of each of the Investors contained in this Agreement or in
any certificate or document to be delivered to the Sellers by each of
the Investors pursuant hereto shall be deemed to have been made again
at and as of the Closing Date and shall be true and correct in all
material respects as of such date, (b) each of the Investors shall have
performed and complied in all material respects with all agreements and
conditions required by this Agreement to be performed or complied with
by the Investors prior to or on the Closing Date, and (c) the Purchase
Price shall have been delivered to the Sellers.
5.2.2 No Actions. No action, suit or proceeding by any court
or governmental Authority shall be pending, no investigation by any
Governmental Authority shall have been commenced and no action, suit or
proceeding by any Governmental Authority shall have been threatened
against the Sellers, the Company, Zap.com or the Investors or any of
their respective general partners, principals, trustees, officers or
directors seeking to restrain, prevent or change the transactions
contemplated hereby or questioning the legality or validity of any such
transactions or seeking damages in connection with any such
transactions.
5.2.3 Consents. All consents, approvals and authorizations of
Governmental Authorities and all filings with and notifications of
Governmental Authorities or other entities which regulate the
businesses of the Company and Zap.com necessary to the execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby shall have been obtained or effected.
ARTICLE 6
COVENANTS
Section 6.1 Efforts. Between the date of this Agreement and the Closing
Date, Family LP will, and will cause Sellers to, and the Investors will use
their respective reasonable best efforts to cause the conditions in Section 5.1
and 5.2, respectively, to be satisfied, including but not limited to causing the
election to the boards of directors of the nominees of the Investors named in
Section 5.1.5 as promptly as practicable.
Section 6.2 Proxies. Each Seller hereby grants to Harbinger Capital
Partners LLC (the "Investor Representative") a proxy to vote all Company Shares
and Zap.com Shares owned by each Seller for the election of three (3)
individuals to the Board of Directors of the Company, one of whom shall be Avram
A. Glazer and two (2) of whom shall be as directed by the Investor
Representative. Each Seller agrees that this proxy shall be irrevocable during
the term of this Agreement and is coupled with an interest. Each Seller will
take such further action or execute such other instruments as may be necessary
to effectuate the intent of this proxy and no Seller shall take any action which
is inconsistent with the proxy granted hereby. Each Seller hereby revokes any
proxy previously granted by such Seller with respect to any Company Shares or
Zap.com Shares.
Section 6.3 Resignations. Concurrently with the Closing, the Sellers
shall use their best efforts to cause each of Avram A. Glazer, Edward S. Glazer,
Darcie S. Glazer and Bryan G. Glazer and each Seller and every person who is an
immediate family member of a Seller or who is an affiliate or associate of a
Seller who is an officer or director of the Company or Zap.com shall have
resigned from each position held by such person without any continuing benefits
(other than compensation for services rendered through the effective date of
said resignation and benefits that have accrued under the Zapata Corporation
Pension Plan and the Company's 401(k) Plan), severance obligations or other
similar obligations or liabilities of the Company or Zap.com. Notwithstanding
the foregoing, all options to purchase Company Shares or Zap.com Shares held by
any such person (other than Avram Glazer, who shall terminate his options, if
any, in the Company and Zap.com without cost) shall remain outstanding.
Section 6.4 Transfer Restrictions. Each Seller agrees not to (a) sell,
transfer, pledge, encumber, assign or otherwise dispose of or hypothecate
(including by gift or by contribution or distribution to any trust or similar
instrument (collectively, "Transfer"), or enter into any contract, option or
other arrangement or understanding (including any profit-sharing arrangement)
with respect to the Transfer of any of such Seller's Company Shares or Zap.com
Shares other than pursuant to the terms hereof, (b) enter into any voting
arrangement or understanding with respect to such Seller's Company Shares or
Zap.com Shares (other than this Agreement), whether by proxy, voting agreement
or otherwise, or (c) take any action that could make any of its representations
or warranties contained herein untrue or incorrect in any material respect or
would have the effect of preventing, delaying or disabling such Seller from
performing any of its obligations hereunder.
Section 6.5 Additional Documents. The parties hereto will, at any time
after the date hereof, sign, execute and deliver, or cause others so to do, all
such powers of attorney, deeds, assignments, documents and instruments (in form
and substance reasonably acceptable to the parties hereto), and do or cause to
be done all such other acts and deeds as may be necessary or proper to carry out
the transactions contemplated by this Agreement.
Section 6.6 Covenants.
(a) From the date hereof until the Closing, the Sellers shall
not, and shall cause the Company not to, (i) operate or take any action
(corporate or otherwise) of the Company or its subsidiaries outside the ordinary
course of business; (ii) declare, pay or set aside funds for the payment of any
dividends or any other distribution or payment in respect of the capital stock
of the Company and its subsidiaries; (iii) change the Company's or its
subsidiaries' authorized capital stock or issue any capital stock or rights
exchangeable or convertible into, or rights to acquire any, shares of capital
stock of the Company or its subsidiaries; (iv) amend the Articles of
Incorporation or bylaws of the Company or its subsidiaries; (v) grant any
registration rights of the Company or its subsidiaries; (vi) purchase, redeem,
retire or otherwise acquire any shares of any capital stock of the Company or
its subsidiaries; (vii) enter into or amend the terms of any transactions
between the Company or any of its subsidiaries and any immediate family member,
affiliate or associate of the Sellers; (viii) sell, lease, or otherwise dispose
of any asset or property of the Company or its subsidiaries; or (ix) enter into
any loan, mortgage or pledge, or impose any lien or other encumbrance on any
asset or property of any Company or its subsidiaries or (x) enter into any
agreement or commitment to do any of the foregoing. Without limiting the
foregoing, from the date hereof until Closing, no Seller shall (1) vote on or
consent to any matter in his or its capacity as a stockholder of the Company or
Zap.com except as specifically contemplated by Section 6.2, or (2) take any
action as a member of the board of directors of the Company or Zap.com other
thanan action (x) that will not result in a failure of any condition set forth
in Section 5.1 of this Agreement and (y) such Seller is advised by counsel he or
she must take such action or be in breach of his or her fiduciary duty as a
director.
(b) Within two business days of the date hereof, Sellers shall
make such filings as are required of them under the Exchange Act, including but
not limited to making amendments to the filings on Schedule 13D and under
Section 16 of the Exchange Act of each Seller, in each case, describing the
terms and conditions of this Agreement required thereby or otherwise necessary
to permit the Company to prepare and mail its proxy materials as contemplated
below. Sellers shall cause the Company to (i) reconvene its adjourned meeting of
shareholders, and (ii) prepare and mail a notice of meeting and revised proxy
materials, in each case, in a manner that provides for the election of directors
of the Company as contemplated by this Agreement. The Sellers shall use their
best efforts to cause the Company to (x) take such actions as promptly as
practicable and, in any event, to cause the Company to mail such notice of
meeting and proxy materials within four business days of the date hereof and (y)
hold such meeting of shareholders within ten business days following such
mailing. The Sellers shall provide the Investor Representative a reasonable
opportunity to review and comment on the amendments to its filings on Schedule
13D and under Section 16 prior to the filing thereof and shall endeavor to give
the Investor Representative an opportunity to review and comment on the
Company's proxy materials described above. The Sellers shall reasonably consider
revising such documents to incorporate the comments of the Investor
Representative.
ARTICLE 7
MISCELLANEOUS
Section 7.1 Survival of Agreements. All the representations, warranties
and covenants made herein shall survive the execution and delivery of this
Agreement and the sale and delivery of the Company Shares and Zap.com Shares
pursuant hereto; provided, however, that the representation and warranty set
forth in Section 3.5 shall only survive for a period of 120 days from and after
the Closing Date.
Section 7.2 Expenses. Each party hereto shall pay its own expenses in
connection with the transactions contemplated hereby and the expenses of
Jefferies & Company, Inc. shall be paid pursuant to the Jefferies Engagement
Letter.
Section 7.3 Notices. All notices, requests, consents, or other
communication hereunder shall be in writing and shall be delivered personally or
reputable overnight courier, in the case of the Investors, to c/o Harbinger
Capital Partners LLC, 555 Madison Avenue, 16th Floor, New York, NY 10022,
Attention: General Counsel, with a copy to Kaye Scholer LLP, 425 Park Avenue,
New York, NY 10022, Attention: Lynn Toby Fisher and Derek Stoldt, and, in the
case of the Sellers, to c/o Malcolm I. Glazer Family Limited Partnership, 5
Middle Road, Palm Beach, FL 33480, Attention: Avram A. Glazer, with a copy to
Harris Beach PLLC, 99 Garnsey Road, Pittsford, NY 14534, Attention: Thomas E.
Willett and Patrick J. Dalton.
Section 7.4 Captions and Section Headings. As used herein, captions and
section headings are for convenience only and are not a part of this Agreement
and shall not be used in construing it.
Section 7.5 Entire Agreement. This Agreement and the other documents
delivered pursuant hereto and thereto, or incorporated by reference herein,
contain the entire agreement between the parties hereto concerning the
transactions contemplated herein and supersede all prior agreements or
understandings between the parties hereto relating to the subject matter hereof.
Section 7.6 Termination; Amendment. This Agreement may be specifically
enforced by either party if such party is not in material breach of this
Agreement. This Agreement may be terminated at any time after December 16, 2009
by either party (acting through the Investor Representative or the Family LP, as
applicable), by notice given to the other party, if the Closing has not occurred
by December 16, 2009 unless failure to close is by reason of the breach of this
Agreement by the party seeking to terminate, and upon such termination neither
the Investors nor the Sellers shall have any obligation or liability hereunder
(except for damages arising out of any such breach). This Agreement may be
amended, supplemented or interpreted at any time, but only by a written
agreement executed by the parties hereto. For purposes of this Section 7.6, the
"parties" shall mean the Investors (individually and together), on the one hand,
and the Sellers (individually and together) on the other.
Section 7.7 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
Section 7.8 Severability. If any one or more of the provisions of this
Agreement shall be held to be invalid, illegal or unenforceable, the validity,
legality or enforceability of the remaining provisions of this Agreement shall
not be affected thereby. To the extent permitted by applicable law, each party
waives any provision of law which renders any provision of this Agreement
invalid, illegal or unenforceable in any respect.
Section 7.9 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties and their respective successors and
assigns. No assignment of this Agreement or of any rights or obligations
hereunder may be made by either the Sellers or the Investors, directly or
indirectly (by operation of law or otherwise), without the prior written consent
of the other parties hereto, except that any Investor may assign its rights but
not its obligations to an affiliate thereof.
Section 7.10 Governing Law. This Agreement, and all matters arising
directly or indirectly hereunder, shall be governed by the laws of the State of
New York. Each party hereby irrevocably submits to the exclusive jurisdiction of
the state and federal courts sitting in the State of New York, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF
THIS AGREEMENT.
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, the Investors and the Sellers have duly executed
this Share Purchase Agreement as of the date first written above.
SELLERS:
The Malcolm I. Glazer Family Limited Partnership
By: Linda Glazer, President
-------------------------------
/s/LINDA GLAZER
/s/LINDA GLAZER AS POWER OF ATTORNEY FOR
MALCOLM GLAZER
------------------------------------------------
Malcolm I. Glazer
/s/AVRAM A. GLAZER
-----------------------------------
Avram A. Glazer
/s/LINDA GLAZER
-----------------------------------
Linda Glazer
INVESTORS:
HARBINGER CAPITAL PARTNERS MASTER FUND I, LTD.
By: Harbinger Capital Partners LLC, its investment
manager
By: /s/PHILIP A. FALCONE
-------------------------------
Name: Philip A. Falcone
Title: Senior Managing Director
HARBINGER CAPITAL PARTNERS SPECIAL SITUATIONS
FUND, L.P.
By: Harbinger Capital Partners Special Situations
GP, LLC, its general partner
By: /s/PHILIP A. FALCONE
-------------------------------
Name: Philip A. Falcone
Title: Senior Managing Director
GLOBAL OPPORTUNITIES BREAKAWAY LTD.
By: Global Opportunities Breakaway Management,
L.P., its investment manager
By: /s/PHILIP A. FALCONE
-------------------------------
Name: Philip A. Falcone
Title: Senior Managing Director
SCHEDULE I
SELLERS, SHARE OWNERSHIP,
ALLOCATION OF PROCEEDS AND ACCOUNT INFORMATION
Allocation
Number of Allocation of Number of of Proceeds Total
Company Proceeds of Zap.com of Zap.com Allocation Account
Name of Seller Shares Company Shares Shares Shares of Proceeds Information
- -------------- ------ -------------- ------ ------ ----------- -----------
The Malcolm I. 9,813,112 $73,598,340.00 707,907 $1.00 $73,598,341.00
Glazer Family
Limited Partnership
Linda Glazer 6,400 $48,000.00 0 $0 $48,000.00
Malcolm Glazer 28,052 $210,390.00 0 $0 $210,390.00
Avram Glazer 41,120 $308,400.00 50,000 $1.00 $308,401.00
- ------------------------------------------------------------------------------------------------------------
Total 9,888,684 $74,165,130.00 757,907 $2.00 $74,165,132.00
SCHEDULE II
INVESTORS, PURCHASED SHARES AND
ALLOCATION OF PURCHASE PRICE
Purchase Purchase
Number of Price Number of Price
Company of Company Zap.com of Zap.com Total Purchase
Name of Investor Shares Shares Shares Shares Price
- ---------------- ------ ------ ------ ------ --------------
Harbinger Capital 3,296,228 $24,721,710 252,636 $0.67 $24,721,710.67
Partners Master Fund
I, Ltd.
Harbinger Capital 3,296,228 $24,721,710 252,636 $0.67 $24,721,710.67
Partners Special
Situations Fund, L.P.
Global Opportunities 3,296,228 $24,721,710 252,635 $0.66 $24,721,710.66
Breakaway Ltd.
- ---------------------------------------------------------------------------------------------
SCHEDULE III
SALE OF SHARES BY FAMILY MEMBERS
Allocation of Proceeds of
Name of Seller Number of Company Shares Company Shares
- -------------- ------------------------ -------------------------
Bryan Glazer 24,737 $185,527.50
Edward Glazer 12,442 $93,315.00
Joel Glazer 12,099 $90,742.50
Schedule 3.6(b)
---------------
Avram Glazer has accumulated a benefit under the Zapata Corporation Pension
Plan. As of December 31, 2008, the present value of the accumulated benefit for
Mr. Glazer under the Zapata Corporation Pension Plan was $155,852.
EXHIBIT D
June 18, 2009
Malcolm I. Glazer Family Limited Partnership
270 Commerce Drive
Rochester, New York 14623
Attention: Mr. Avram A. Glazer
Harbinger Capital Partners Master Fund I, Ltd.
c/o Harbinger Capital Partners LLC
555 Madison Avenue, 16th Floor, New York, NY 10022
Attention: General Counsel
Global Opportunities Breakaway Ltd.
c/o Global Opportunities Breakaway Management, L.P.
555 Madison Avenue, 16th Floor, New York, NY 10022
Attention: General Counsel
Harbinger Capital Partners Special Situations Fund, L.P.
c/o Harbinger Capital Partners Special Situations GP, L.L.C.
555 Madison Avenue, 16th Floor, New York, NY 10022
Attention: General Counsel
Re: Introductory Services
1. Introductory Services. This agreement (this "Agreement") will confirm the
arrangements under which Jefferies High Yield Trading, LLC ("Jefferies") has
provided introductory services to Malcolm I. Glazer Family Limited Partnership
and certain members of the Glazer family ("collectively, Glazer") and Harbinger
Capital Partners Master Fund I, Ltd. ("HCPMF"), Harbinger Capital Partners
Special Situations Fund, L.P. ("HCPSSF"), and Global Opportunities Breakaway
Ltd. ("Breakaway," together with HCPMF and HCPSSF, "Harbinger") in connection
with a potential transaction between Glazer and Harbinger, and/or their
respective affiliates, involving the acquisition by Harbinger, or its
affiliates, of a majority of the outstanding shares of common stock of Zapata
Corporation held by Glazer, or its affiliates, at a purchase price of $7.50 per
share, or such other price agreed to by Glazer and Harbinger (the
"Transaction"), payable to Glazer, or its affiliates, pursuant to definitive
documentation governing the Transaction (the "Transaction Documents"). It is
expressly understood and agreed that Jefferies will not assist Glazer and
Harbinger in negotiating terms of the proposed Transaction, preparing financial
analysis or taking other actions that would be consistent with the activities of
a financing advisor or otherwise.
2. References to Jefferies. Each of Glazer and Harbinger agree that, without
Jefferies' prior written consent, it will not make any reference to Jefferies in
connection with the proposed Transaction, other than in the Transaction
Documents or as required by law or regulation (after providing Jefferies a
reasonable opportunity to review and comment).
3. Compensation. Upon consummation of the Transaction at any time, each of
Glazer and Harbinger agrees that it will pay Jefferies $500,000 (for a total of
$1,000,000), which shall constitute the total compensation due to Jefferies in
connection with the Transaction. The obligations under this paragraph 3 are
several and not joint obligations of Glazer and Harbinger.
4. Indemnification, etc. As further consideration under this Agreement, each of
Glazer and Harbinger shall indemnify and hold harmless Jefferies, its affiliates
and its and their respective officers, directors and employees (each, an
"Indemnified Person") with respect to any losses an Indemnified Person suffers
(including, without limitation reasonable attorney's fees in connection with
defending any claim or potential claim) relating out of or in connection with
the Transaction, other than to the extent any such losses that are finally
judicially determined to have resulted solely from the Indemnified Person's
gross negligence or willful misconduct.
5. Termination. Jefferies' engagement hereunder will continue until terminated
by either party by written notice to the other. For the avoidance of doubt, the
obligations under Sections 2, 3, 4, 6, 7 and 8 shall survive the termination of
this Agreement indefinitely.
6. Disclaimers.
(a) The Company acknowledges that Jefferies' parent, Jefferies Group,
Inc. (collectively with its subsidiaries and affiliates, the "Jefferies Group")
is a full service financial institution engaged in a wide range of investment
banking and other activities (including investment management, corporate
finance, securities issuing, trading and research and brokerage activities) from
which conflicting interests, or duties, may arise. Information that is held
elsewhere within the Jefferies Group, but of which none of the individuals in
Jefferies' investment banking department involved in providing the services
contemplated by this Agreement actually has (or without breach of internal
procedures can properly obtain) knowledge, will not for any purpose be taken
into account in determining Jefferies' responsibilities under this Agreement.
Neither Jefferies nor any other part of the Jefferies Group will have any duty
to disclose to either Glazer or Harbinger or utilize for their benefit any
non-public information acquired in the course of providing services to any other
person, engaging in any transaction (on its own account or otherwise) or
otherwise carrying on its business. In addition, in the ordinary course of
business, the Jefferies Group may trade the securities of Glazer and Harbinger
and their affiliates for its own account and for the accounts of customers, and
may at any time hold a long or short position in such securities. Jefferies
recognizes its responsibility for compliance with federal securities laws in
connection with such activities. Further, from time to time Jefferies' research
department may publish research reports or other materials, the substance and/or
timing of which may conflict with the views or advice of the members of
Jefferies' investment banking department, and may have an adverse effect on the
interests of Glazer and Harbinger in connection with the Transaction or
otherwise. Jefferies' investment banking department is managed separately from
its research department, and does not have the ability to prevent such
occurrences.
(b) Jefferies acknowledges and agrees that it shall have no authority,
right or power to make any agreements, undertakings or representations or
warranties on behalf of Glazer or Harbinger and that it is not an agent of
either Glazer or Harbinger. Jefferies further acknowledges that neither Glazer
nor Harbinger shall have any obligation to enter into any agreement with each
other concerning a Transaction.
7. Arbitration. The parties agree that any dispute, claim or controversy
directly or indirectly relating to or arising out of this Agreement, the
termination or validity hereof, any alleged breach of this Agreement or the
engagement contemplated hereby (any of the foregoing, a "Claim") shall be
submitted to JAMS, or its successor, in New York, New York, for final and
binding arbitration in front of a panel of one arbitrator with JAMS in New York,
New York under the JAMS Comprehensive Arbitration Rules and Procedures. The
arbitrator shall, in its award, allocate all of the costs of the arbitration,
including the fees of the arbitrators and the reasonable attorneys' fees of the
prevailing party, against the party who did not prevail. The award in the
arbitration shall be final and binding. The arbitration shall be governed by the
Federal Arbitration Act, 9 U.S.C. ss.ss.1-16, and judgment upon the award
rendered by the arbitrator may be entered by any court having jurisdiction
thereof. Each of Glazer, Harbinger and Jefferies agree and consent to personal
jurisdiction, service of process and venue in any federal or state court within
the State and County of New York in connection with any action brought to
enforce an award in arbitration.
8. Miscellaneous. This Agreement constitutes the entire agreement between the
parties with respect to the subject matter hereof, and may not be amended or
modified except in writing signed by each party hereto. This Agreement may not
be assigned by either party hereto without the prior written consent of the
other, to be given in the sole discretion of the party from whom such consent is
being requested. Any attempted assignment of this Agreement made without such
consent shall be void and of no effect, at the option of the non-assigning
party. This Agreement is solely for the benefit of the Glazer, Harbinger and
Jefferies and no other person shall acquire or have any rights under or by
virtue of this Agreement. If any provision hereof shall be held by a court of
competent jurisdiction to be invalid, void or unenforceable in any respect, or
against public policy, such determination shall not affect such provision in any
other respect nor any other provision hereof. Each of Glazer, Harbinger and
Jefferies shall endeavor in good faith negotiations to replace the invalid, void
or unenforceable provisions. Headings used herein are for convenience of
reference only and shall not affect the interpretation or construction of this
Agreement. This Agreement may be executed in facsimile counterparts, each of
which will be deemed to be an original and all of which together will be deemed
to be one and the same document. Notice given pursuant to any of the provisions
of this Agreement shall be in writing and shall be mailed or delivered (a) if to
the Glazer or Harbinger, at the addresses set forth above, and (b) if to
Jefferies, at 520 Madison Avenue, 12th Floor, New York, New York 10022,
Attention: General Counsel. All payments to be made to Jefferies hereunder shall
be made in cash by wire transfer of immediately available U.S. funds. This
Agreement shall be governed by, and construed in accordance with, the internal
laws of the State of New York. Jefferies hereby notifies Glazer and Harbinger
that pursuant to the requirements of the USA PATRIOT Act (the "Patriot Act"), it
is required to obtain, verify and record information that identifies Glazer and
Harbinger in a manner that satisfies the requirements of the Patriot Act. This
notice is given in accordance with the requirements of the Patriot Act.
Please sign and return an original and one copy of this letter to the
undersigned to indicate your acceptance of the terms set forth herein, whereupon
this letter and your acceptance shall constitute a binding agreement among
Glazer, Harbinger and Jefferies as of the date first above written.
Sincerely,
JEFFERIES HIGH YIELD TRADING, LLC
By _____________________________________
Name:
Title:
Accepted and Agreed:
MALCOLM I. GLAZER FAMILY LIMITED PARTNERSHIP
By: Malcolm I. Glazer, G.P., Inc.
By /s/ Linda Glazer
--------------------------------
Name: Linda Glazer
Title: President
HARBINGER CAPITAL PARTNERS MASTER FUND I, LTD.
By: Harbinger Capital Partners LLC, its investment manager
By: /s/ Philip A. Falcone
--------------------------------
Name: Philip A. Falcone
Title: Senior Managing Director
HARBINGER CAPITAL PARTNERS SPECIAL SITUATIONS FUND, L.P.
By: Harbinger Capital Partners Special Situations GP, LLC,
its general partner
By: /s/ Philip A. Falcone
--------------------------------
Name: Philip A. Falcone
Title: Senior Managing Director
GLOBAL OPPORTUNITIES BREAKAWAY LTD.
By: Global Opportunities Breakaway Management, L.P.,
its investment manager
By: /s/ Philip A. Falcone
--------------------------------
Name: Philip A. Falcone
Title: Senior Managing Director
