Shares of Xerox Corp. (XRX) are falling after the company announced the termination of its deal with Fujifilm (FUJIY) and a new settlement agreement with billionaire investors Carl Icahn and Darwin Deason.

FUJIFILM DEAL TERMINATED: On Sunday, Xerox announced that it notified Fujifilm that the agreement to combine Xerox with Fuji Xerox is being terminated due to the failure by Fujifilm to deliver audited financials of Fuji Xerox by April 15, material deviations from unaudited statements when delivered and other circumstances limiting the ability of the company, Fujifilm and Fuji Xerox to consummate a transaction. The Xerox board said, “Over the past several weeks, the Xerox Board has repeatedly requested that Fujifilm immediately enter into negotiations on improved terms for a proposed transaction. Despite our insistence, Fujifilm provided no assurance that it will do so within an acceptable timeframe. The Xerox Board believes that the transaction cannot reasonably be expected to be completed under these circumstances, particularly given the court's injunction of the transaction and the lack of shareholder support for the transaction on current terms, as well as the unresolved accounting issues at Fuji Xerox.” In a statement, Fujifilm said Xerox did not have the right to terminate the deal and the company will consider all options including legal action seeking damages.

SETTLEMENT AGREEMENT: In addition, Xerox entered into a new settlement agreement with Icahn and Deason, resolving the pending proxy contest in connection with the company's 2018 Annual Meeting of Shareholders and Deason's litigation against Xerox and its directors. The agreement does not affect any claims of Deason or other Xerox shareholders against Fujifilm for aiding and abetting, Xerox said. Under the terms of the agreement, Xerox appointed Jonathan Christodoro, Keith Cozza, Nicholas Graziano, Scott Letier and John Visentin to its board. Gregory Brown, Joseph Echevarria, Cheryl Krongard and Sara Martinez Tucker will continue to serve as members of the board and Robert Keegan, Charles Prince, Ann Reese, William Curt Hunter, and Stephen Rusckowski resigned. Jeff Jacobson resigned from his role as chief executive officer and as a member of the board. Keith Cozza, the CEO of Icahn Enterprises (IEP), is expected to be appointed as the new chairman and John Visentin is expected to be appointed as the vice chairman and new CEO.