UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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Merger Agreement

 

On February 11, 2024, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among the Company, Eclipse Merger Sub I, LLC, a Delaware limited liability company and a wholly owned subsidiary of the Company (“Merger Sub I”), Eclipse Merger Sub II, LLC, a Delaware limited liability company and a wholly owned subsidiary of the Company (“Merger Sub II”), Endeavor Manager, LLC, a Texas limited liability company (solely for purposes of certain sections set forth therein) (in such capacity, the “Company Representative”), and Endeavor Parent, LLC, a Texas limited liability company (“Endeavor”).

 

In accordance with the terms and conditions set forth therein, on September 10, 2024, Merger Sub I merged with and into Endeavor (the “First Merger”), with Endeavor surviving the First Merger and becoming a wholly owned subsidiary of the Company (the “First Surviving Company”). Immediately following the First Merger, the First Surviving Company merged with and into Merger Sub II (the “Second Merger”, and together with the First Merger, the “Merger”), with Merger Sub II surviving the Second Merger and continuing (immediately following the Second Merger) as a wholly owned subsidiary of the Company. As a result of the Merger, the Company acquired 100% of the equity interests in Endeavor (the “Endeavor Interests”).

 

The Board unanimously approved the Merger Agreement and the transactions contemplated thereby, including the issuance of shares of Company Common Stock in the First Merger (the “Stock Issuance”). The Board unanimously recommended that holders of Company Common Stock approve the Stock Issuance. The holders of Company Common Stock approved the Stock Issuance on April 26, 2024.

 

On March 18, 2024, the Company, Merger Sub I, Merger Sub II, the Company Representative and Endeavor entered into an amendment to the Merger Agreement (the “Merger Agreement Amendment”). The Merger Agreement Amendment amended and restated the form of Stockholders Agreement to (i) remove certain provisions that would have restricted the Endeavor Stockholders from transferring their shares of Company Common Stock to an “Activist Stockholder” (as defined in the prior form of Stockholders Agreement) and (ii) revise the voting obligations of the Endeavor Stockholders in Company director elections, which will apply so long as they hold at least 20% of the outstanding shares of Company Common Stock, from (A) as recommended by the Board to (B) in the same proportion as other stockholders of the Company.

 

Pursuant to and subject to the terms and conditions of the Merger Agreement, at the effective time of the First Merger on September 10, 2024, all of the Endeavor Interests were converted into the right to receive, in the aggregate, (i) cash consideration consisting of a base cash amount of $8.0 billion, subject to adjustments, and (ii) approximately 117.3 million shares of Company Common Stock (the “Common Stock Consideration”).

 

Upon closing of the Merger (the “Closing”), in accordance with the Stockholders Agreement discussed below, the Board expanded to 12 members.

 

Stockholders Agreement

 

As a result of the Merger, Endeavor’s equityholders receiving the Common Stock Consideration (the “Endeavor Stockholders”), including the Reporting Persons, held, at the Closing, approximately 39.7% of the outstanding Company Common Stock. As provided by the Merger Agreement, at the Closing, the Company entered into a stockholders agreement (the “Stockholders Agreement”) with the Endeavor Stockholders.

 

The Stockholders Agreement provides the Endeavor Stockholders with the right to propose for nomination four directors for election to the Board if they beneficially own at least 25% of the outstanding shares of Company Common Stock, two directors if they beneficially own at least 20% but less than 25% of the outstanding shares of Company Common Stock, and one director if they beneficially own at least 10% but less than 20% of the outstanding shares of Company Common Stock, in each case subject to certain qualification requirements for such directors.

 

The Endeavor Stockholders are also subject to certain standstill, voting and transfer restrictions under the Stockholders Agreement, and the Company is restricted from taking certain limited actions without the consent of the holders of a majority of the shares of Company Common Stock held by the Endeavor Stockholders. The Stockholders Agreement also provides the Endeavor Stockholders with certain shelf, demand and piggyback registration rights, including that the Company will file a shelf registration statement to cover the resale of the shares of Company Common Stock issued to the Endeavor Stockholders as Common Stock Consideration.

 

The foregoing descriptions of the Merger Agreement, the Merger Agreement Amendment and the Stockholders Agreement do not purport to be complete and are qualified in their entirety by reference to the actual terms of such documents, copies of which are attached as exhibits hereto and incorporated herein by reference. These documents have been included to provide investors with information regarding their terms and are not intended to provide any financial or other factual information about the Company, Endeavor, Merger Sub I, Merger Sub II or the Endeavor Stockholders. In particular, the representations, warranties and covenants contained in the Merger Agreement (i) were made only for purposes of that agreement and as of specific dates, (ii) were made solely for the benefit of the parties to the Merger Agreement, (iii) may be subject to limitations agreed upon by the parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Merger Agreement rather than establishing those matters as facts, and (iv) may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in public disclosures by the Company. Accordingly, investors should read the representations and warranties in the Merger Agreement not in isolation but only in conjunction with the other information about the Company and Endeavor and their respective subsidiaries that the respective companies include in reports, statements and other filings they make with the U.S. Securities and Exchange Commission.

 

 

MANAGER OF ACS CAPITAL MANAGEMENT, LLC

 

 

BOARD OF MANAGERS OF ENDEAVOR MANAGER, LLC

 

 

MANAGER OF SFT MANAGEMENT, LLC

 

 

MANAGER OF SFT 1 HOLDINGS, LLC

 

 

MANAGER OF SFT 2 HOLDINGS, LLC

 

	Dated:  September 13, 2024
		AUTRY STEPHENS MANAGEMENT TRUST
			/s/ Lyndal Stephens Greth
		Name:	Lyndal Stephens Greth
		Title:	Trustee

	ACS CAPITAL MANAGEMENT, LLC
		/s/ Lyndal Stephens Greth
	Name:	Lyndal Stephens Greth
	Title:	Manager

	ACS CAPITAL HOLDINGS, LP
	By:	ACS Capital Management, LLC,
		its general partner
		/s/ Lyndal Stephens Greth
	Name:	Lyndal Stephens Greth
	Title:	Manager

	ENDEAVOR MANAGER, LLC
		/s/ Lyndal Stephens Greth
	Name:	Lyndal Stephens Greth
	Title:	Chairman of Board of Managers

	STEPHENS FAMILY TRUST
		/s/ Lyndal Stephens Greth
	Name:	Lyndal Stephens Greth
	Title:	Trustee

	STEPHENS FAMILY TRUST #2
		/s/ Lyndal Stephens Greth
	Name:	Lyndal Stephens Greth
	Title:	Trustee

	SFT MANAGEMENT, LLC
		/s/ Lyndal Stephens Greth
	Name:	Lyndal Stephens Greth
	Title:	Manager

	SFT 1 HOLDINGS, LLC
	By:	SFT Management, LLC,
		its manager
		/s/ Lyndal Stephens Greth
	Name:	Lyndal Stephens Greth
	Title:	Manager

	SFT 2 HOLDINGS, LLC
	By:	SFT Management, LLC,
		its manager
		/s/ Lyndal Stephens Greth
	Name:	Lyndal Stephens Greth
	Title:	Manager

	LYNDAL STEPHENS GRETH
		/s/ Lyndal Stephens Greth

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	AUTRY STEPHENS MANAGEMENT TRUST
		/s/ Lyndal Stephens Greth
	Name:	Lyndal Stephens Greth
	Title:	Trustee

	ACS CAPITAL HOLDINGS, LP
	By:	ACS Capital Management, LLC,
		its general partner

		/s/ Lyndal Stephens Greth
	Name:	Lyndal Stephens Greth
	Title:	Manager

	LYNDAL STEPHENS GRETH
		/s/ Lyndal Stephens Greth