Exhibit T3C
[FORM OF CONTINGENT VALUE RIGHTS AGREEMENT]
▇▇▇▇▇▇ NUTRITIONALS HOLDINGS, INC.
TO
[ ]
AS TRUSTEE
CONTINGENT VALUE RIGHTS AGREEMENT
DATED AS OF DECEMBER [ ], 2005
CROSS REFERENCE TABLE
Trust Indenture Act Section Contingent Value Rights Agreement
Reference Section
310 (a)(1) 4.8
(a)(2) 4.8
(a)(3) N.A.
(a)(4) N.A.
(a)(5) 4.8
(b) 4.7
(c) N.A.
311 (a) 4.12
(b) 4.12
(c) N.A.
312 (a) 5.1, 5.2
(b) 5.2
(c) 5.2
313 (a) 5.3
(b)(1) N.A.
(b)(2) 5.3
(c) 1.5, 5.3
(d) 5.3
314 (a) 5.3, 1.52
(b) N.A.
(c)(1) 1.2
(c)(2) 1.2
(c)(3) N.A.
(d) N.A.
(e) 1.2
315 (a) 4.1
(b) 1.5, 8.10
(c) 4.1
(d) 4.1
(e) 8.11
316 (a) (last sentence) 1.1
(a)(1)(A) 8.9
(a)(1)(B) 8.9
(a)(2) N.A.
(b) 8.7
317 (a)(1) 8.4
(a)(2) 8.4
(b) 7.3
318 (a) 1.7
N.A. means not applicable.
*This Cross Reference Table is not part of the Indenture.
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION....................................1
1.1 Definitions....................................................................................1
1.2 Compliance Certificates and Opinions...........................................................6
1.3 Form of Documents Delivered to Trustee.........................................................6
1.4 Acts of Holders................................................................................7
1.5 Notices, etc., to Trustee and Company..........................................................7
1.6 Notice to Holders; Waiver......................................................................8
1.7 Conflict with Trust Indenture Act..............................................................8
1.8 Effect of Headings and Table of Contents.......................................................8
1.9 Successors and Assigns.........................................................................8
1.10 Benefits of Agreement..........................................................................8
1.11 Governing Law..................................................................................9
1.12 Separability Clause............................................................................9
ARTICLE II THE CVRS...................................................................................9
2.1 Title and Terms................................................................................9
2.2 Registrable Form..............................................................................11
2.3 Execution, Authentication, Delivery and Dating................................................11
2.4 Temporary CVR Certificates....................................................................12
2.5 Registration and Transfer and Exchange........................................................12
2.6 Mutilated, Destroyed, Lost and Stolen CVR Certificate.........................................14
2.7 Presentation of CVR Certificate...............................................................14
2.8 Persons Deemed Owners.........................................................................15
2.9 Cancellation..................................................................................15
ARTICLE III CVR FORMS.................................................................................15
3.1 Forms Generally...............................................................................15
3.2 Form of Face of CVR...........................................................................16
3.3 Form of Reverse of CVR........................................................................17
3.4 Form of Trustee's Certificate of Authentication...............................................18
ARTICLE IV THE TRUSTEE...............................................................................19
4.1 Certain Duties and Responsibilities...........................................................19
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4.2 Certain Rights of Trustee.....................................................................19
4.3 Not Responsible for Recitals or Issuance of CVRs..............................................21
4.4 May Hold CVRs.................................................................................21
4.5 Money Held in Trust...........................................................................21
4.6 Compensation, Reimbursement and Indemnification of the Trustee................................21
4.7 Disqualification; Conflicting Interests.......................................................21
4.8 Corporate Trustee Required; Eligibility.......................................................22
4.9 Resignation and Removal; Appointment of Successor.............................................22
4.10 Acceptance of Appointment by Successor........................................................23
4.11 Merger, Conversion, Consolidation or Succession to Business...................................23
4.12 Preferential Collection of Claims Against Company. The Trustee is subject to Section
311(a) of the Trust Indenture Act, excluding any creditor relationship listed in
Section 311(b) of the Trust Indenture Act.....................................................23
ARTICLE V HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY.........................................24
5.1 Company to Furnish Trustee Names and Addresses of Holders.....................................24
5.2 Preservation of Information; Communications to Holders........................................24
5.3 Reports by Trustee............................................................................25
5.4 Reports by Company............................................................................25
ARTICLE VI AMENDMENTS................................................................................26
6.1 Amendments Without Consent of Holders.........................................................26
6.2 Amendments with Consent of Holders............................................................26
6.3 Execution of Amendments.......................................................................27
6.4 Effect of Amendments..........................................................................27
6.5 Conformity with Trust Indenture Act...........................................................27
6.6 Reference in CVR Certificates to Amendments...................................................27
ARTICLE VII COVENANTS.................................................................................27
7.1 Payment of Amounts, if any, to Holders........................................................27
7.2 Maintenance of Office or Agency...............................................................28
7.3 Money and Shares for CVR Payments to Be Held in Trust.........................................28
ii
7.4 Written Statement to Trustee..................................................................29
7.5 Available Shares..............................................................................29
ARTICLE VIII REMEDIES OF THE TRUSTEE AND HOLDERS ON EVENT OF DEFAULT...................................29
8.1 Event of Default Defined......................................................................29
8.2 Collection of Indebtedness by Trustee; Trustee May Prove Debt.................................29
8.3 Application of Proceeds.......................................................................30
8.4 Suits for Enforcement.........................................................................31
8.5 Restoration of Rights on Abandonment of Proceedings...........................................31
8.6 Limitations on Suits by Holders...............................................................31
8.7 Unconditional Right of Holders to Institute Certain Suits.....................................32
8.8 Powers and Remedies Cumulative; Delay or Omission Not Waiver of Default.......................32
8.9 Control by Holders............................................................................32
8.10 Trustee to Give Notice of Default, but May Withhold in Certain Circumstances..................33
8.11 Right of Court to Require Filing of Undertaking to Pay Costs..................................33
ARTICLE IX CONSOLIDATION, MERGER, SALE OR CONVEYANCE.................................................33
9.1 Company May Consolidate, Etc..................................................................33
9.2 Successor Substituted.........................................................................33
9.3 Opinion of Counsel to Trustee.................................................................34
ARTICLE X DISCHARGE OF AGREEMENT....................................................................34
10.1 Discharge of Liability on CVRs................................................................34
10.2 Repayment to the Company......................................................................34
10.3 Counterparts..................................................................................34
iii
CONTINGENT VALUE RIGHTS AGREEMENT, dated as of December __, 2005,
between ▇▇▇▇▇▇ NUTRITIONALS HOLDINGS, INC., a Delaware corporation (the
"Company"), and [_______________________], as trustee (the "Trustee").
RECITALS OF THE COMPANY
WHEREAS, the Company and its wholly owned direct and indirect
subsidiaries, ▇▇▇▇▇▇ Nutritionals Holdings II, Inc., ▇▇▇▇▇▇ Nutritionals, Inc.
("ANI"), and ▇▇▇▇▇▇ Nutritionals (Canada) Limited (collectively, the "Debtors"),
filed their Second Amended Joint Plan of Reorganization under Chapter 11 of the
Bankruptcy Code, dated November 16, 2005 (the "Plan"), with the United State
Bankruptcy Court for the Southern District of New York (the "Bankruptcy Court")
and the Bankruptcy Court confirmed the Plan on December __, 2005;
WHEREAS, pursuant to the Plan, the Company is authorized as of the
Effective Date (as defined in the Plan) to issue and distribute to the holders
of Allowed Second Lien Claims (as defined in the Plan) up to 1,600,000
contingent value rights (the "CVRs") of substantially the tenor hereinafter set
forth, and to enter into and execute this Agreement; and
WHEREAS, all things necessary have been done to make the CVR
Certificates, when executed by the Company and authenticated and delivered
hereunder, the valid obligations of the Company and to make this Agreement a
valid agreement of the Company, in accordance with their and its terms.
NOW, THEREFORE, for and in consideration of the promises and the
consummation of the transactions referred to above, it is covenanted and agreed,
for the equal and proportionate benefit of all Holders of the CVRs, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
1.1 Definitions.
(a) For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires, each term set forth
below has the meaning assigned to such term:
"Affiliate" of a Person means any Person that directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or is under
common control with, such other Person.
"Agreement" means this Contingent Value Rights Agreement as originally
executed and as it may from time to time be supplemented or amended pursuant to
the applicable provisions hereof.
"Applicable Procedures" means, with respect to any transfer or exchange
of or for beneficial interests in any Global Security, the rules and procedures
of the Trustee that apply to such transfer or exchange.
"Board of Directors" means either the board of directors of the Company
or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means any day (other than a Saturday or a Sunday) on
which banking institutions in the City of New York, New York or in the State of
the principal office of the Trustee are not authorized or obligated by law or
executive order to close.
Payment in "Cash" means payment made in the Borough of Manhattan, the
City of New York, or at any other office or agency maintained by the Company for
such purpose, in such coin or currency of the United States of America as at the
time is legal tender for the payment of public and private debts; provided,
however, that such amounts may be paid by check payable in such money.
"Change of Control" means the occurrence after the Effective Date of:
(i) any direct or indirect sale or other transfer of all or substantially all of
the assets (regardless of form or structure, and whether in a single transaction
or a series of transactions) of the Company or ANI to any Person other than an
Affiliate of the Company; (ii) a merger, consolidation or share exchange of the
Company into or with any Person (other than an Affiliate of the Company or a
merger or consolidation qualifying as a reorganization under Section
368(a)(1)(F) of the Internal Revenue Code of 1986, as amended), if, as a result
of such transaction, the Persons (or Affiliates thereof) who were holders of
Shares immediately prior to such transaction do not own at least a majority of
the issued and outstanding equity securities of the resulting Person (or of the
ultimate parent of the resulting Person); (iii) any direct or indirect sale of
outstanding Shares (whether in a single transaction or a series of transactions)
if, as a result of such sale, (x) more than eighty percent (80%) of the then
issued and outstanding Shares are held by (I) a Person which was not a holder of
10% or more of the Shares issued and outstanding as of the Effective Date, or
(II) by a Group that does not include a Person who was a holder of 10% or more
of the Shares issued and outstanding as of the Effective Date, or (y) more than
eighty percent (80%) of the then issued and outstanding Shares are held by (I)
Persons who, at the Effective Date, held five percent (5%) or more but less than
ten (10%) of the Shares issued and outstanding as of the Effective Date, or (II)
by a Group that includes such a Person, and, in the case of clause (iii)(y)(I)
or (II), sixty percent (60%) or more of the Persons who are members of the Board
of Directors following such sale were not members of the Board of Directors
prior to such sale; or (iv) a Qualified IPO.
"Change of Control Consummation Date" means the date on which the
Initial Change of Control is consummated.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or if at any time after the
execution of this Agreement such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Company" means the Person named as the "Company" in the first
paragraph of this Agreement, until a successor Person shall have become such
pursuant to the applicable provisions of this Agreement, and thereafter
"Company" shall mean such successor Person. To the extent necessary to comply
with the requirements of the provisions of Trust Indenture Act Sections 310
through 317 as they are applicable to the Company, the term "Company" shall
include any other obligor with respect to the CVRs for the purposes of complying
with such provisions.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by the chairman or vice chairman of the Board
of Directors, the president, any vice president, the controller, the treasurer,
the secretary or any assistant secretary, and delivered to the Trustee.
The term "control" (including the terms "controlled", "controlled by"
and "under common control with") means the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of a
Person, whether through the ownership of stock, by contract or otherwise.
"Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered, which office at the date of execution of this Agreement is located
at [____________________].
"CVR Certificate" means a certificate representing any of the CVRs,
which may be in the form of Global Securities or Definitive Securities.
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"CVR Payment Date" means the date that is 30 calendar days (or, if such
30th calendar day is not a Business Day, the first Business Day after such 30th
calendar day) following the Change of Control Consummation Date, except as
otherwise provided in Section 7.5.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exit Facility" means Exit Revolving Credit Agreement to be dated as of
December [ ], 2005, by and among ▇▇▇▇▇▇ Nutritionals, Inc., ▇▇▇▇▇▇ Nutritionals
Holdings, Inc., ▇▇▇▇▇▇ Nutritional (Canada) Limited, the lenders, UBS Securities
LLC, UBS Loan Finance LLC and UBS ▇▇ ▇▇▇▇▇▇▇▇ Branch.
"Fair Market Value" means the fair market value of any applicable
property, services, equity, or other consideration, as determined reasonably and
in good faith by the Company's Board of Directors.
"Group" means a syndicate or group of Persons that is considered to be
a "person" for purposes of Section 13(d)(3) of the Exchange Act.
"Holder" means a Person in whose name a CVR is registered in the
Security Register.
"Implied Equity Value" means the Net Distributable Value minus the
aggregate amount of outstanding Indebtedness of the Company and its Affiliates
at the Change of Control Consummation Date; provided however, that (i) in the
case of a transaction that constitutes a Change of Control within the meaning of
clause (iii) of the definition of such term, "Implied Equity Value" means the
weighted average sale price of the last Shares purchased by the relevant Person
or Group constituting 5% of the number of Shares outstanding on the Change of
Control Consummation Date multiplied by the number of Shares outstanding on the
Change of Control Consummate Date and (ii) in the case of a Change of Control
that is a Qualified IPO, "Implied Equity Value" means the public offering price
of the Shares sold in such Qualified IPO, multiplied by the number of Shares
outstanding on the Change of Control Consummation Date.
"Indebtedness" means, for any Person, without duplication: (i) all
indebtedness for borrowed money of such Person; (ii) all obligations issued,
undertaken or assumed by such Person as the deferred purchase price of property
or services (other than trade payables and accrued expenses); (iii) all
obligations of such Person evidenced by notes, bonds, debentures or similar
instruments, including obligations so evidenced incurred in connection with the
acquisition of property or businesses; (iv) all indebtedness of such Person
created or arising under any conditional sale or other title retention
agreement, or incurred as financing, in either case with respect to property
acquired by such Person; (v) all capital lease obligations of such Person; and
(vi) all indebtedness of other Persons referred to in clauses (i) through (v)
secured by any lien upon or in property owned by such Person, even though such
Person has not assumed or become liable for the payment of such indebtedness,
limited to the lesser of such indebtedness or the value of such property.
"Initial Change of Control" means the first Change of Control that is
consummated after the Effective Date.
"Management Incentive Plan" means that certain Management Incentive
Plan, dated of even date herewith.
"Management Interests" means contractual, nontradeable contingent value
rights issued to certain members of the Company's management pursuant to the
Management Incentive Plan.
"Net Distributable Value" means, at the time of determination in
connection with a Change of Control, an amount equal to: (i) the amount of cash,
property, or other consideration paid or to be paid to the Company or its
Affiliates, or any of their respective equity holders in connection with a
Change of Control after deducting transaction costs; plus (ii) without
duplication, the amount of Indebtedness (as defined above) of the Company and
3
its Affiliates (including, without limitation, to the extent applicable, the
principal amount outstanding under the Exit Facility) assumed or repaid by the
acquirer; plus (iii) without duplication, the amount of any other Indebtedness
of any of the reorganized Debtors outstanding at the Effective Date (in each
case, including, without limitation, the amount of any prepayment or call
protection premiums or penalties) that has been paid or pre-paid after the
Effective Date; plus (iv) without duplication, the amount of any Restricted
Payments; plus (v) the Fair Market Value of any Remaining Assets; minus (vi)
contractual cash bonus payments to employees of the Company or employees of any
of its Affiliates in the event of a Change of Control; provided, however, that
Net Distributable Value will be calculated before giving effect to any payment
or accruals made with respect to the Management Interests or the CVRs.
"Officer's Certificate" means a certificate signed by the chairman or
vice chairman of the Board of Directors, the president, any vice president, the
controller, the treasurer, the secretary or any assistant secretary of the
Company, in his or her capacity as such an officer, and delivered to the
Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
General Counsel for the Company, and who shall be reasonably acceptable to the
Trustee.
"Outstanding", when used with respect to CVRs, means, as of the date of
determination, all CVRs represented by CVR Certificates theretofore
authenticated and delivered under this Agreement, except: (a) CVRs represented
by CVR Certificates theretofore cancelled by the Trustee or delivered to the
Trustee for cancellation; (b) from and after the CVR Payment Date, CVRs for
whose payment cash in the necessary amount has been theretofore deposited by or
on behalf of the Company with the Trustee or any Paying Agent (other than the
Company) in trust or set aside and segregated in trust by the Company (if the
Company shall act as its own Paying Agent) for the Holders of such CVRs; and (c)
CVRs represented by CVR Certificates in exchange for or in lieu of which other
CVR Certificates have been authenticated and delivered pursuant to this
Agreement, other than any such CVRs in respect of which there shall have been
presented to the Trustee proof satisfactory to it that such CVRs are held by a
bona fide purchaser in whose hands the CVRs are valid obligations of the
Company; provided, however, that in determining whether the Holders of the
requisite Outstanding CVRs have given any request, demand, direction, consent or
waiver hereunder, CVRs owned by the Company or any other obligor upon the CVRs
or any Affiliate of the Company or such other obligor shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand, direction, consent
or waiver, only CVRs which the Trustee knows to be so owned shall be so
disregarded.
"Paying Agent" means any Person authorized by the Company to pay the
amount determined pursuant to Section 2.1, if any, on any CVRs on behalf of the
Company, which shall initially be the Trustee.
"Person" means an individual, partnership, corporation, limited
liability company, cooperative, trust, unincorporated organization, association,
joint venture, government or agency or political subdivision thereof, or any
other form of legal entity .
"Qualified IPO" means an underwritten public offering pursuant to an
effective registration statement under the Securities Act, covering the
issuance, offer and sale of Shares by the Company but only if (x) the number of
Shares to be issued, offered and sold by the Company in such public offering is
equal to or greater than 25% of the number of Shares then issued and outstanding
(giving effect to such public offering); and (y) each of the underwriters
participating in such public offering shall be obligated to buy on a "firm
commitment" basis all Shares that such underwriters shall have agreed to
distribute.
"Remaining Assets" means the Fair Market Value of any and all assets of
the Company and its Affiliates that are not sold or transferred in connection
with a transaction that constitutes a Change of Control by reason of clause (i)
of the definition of such term.
4
"Reporting Company" means a Person that is subject to the periodic
reporting requirements under Sections 13 or 15(d) of the Exchange Act.
"Responsible Officer", when used with respect to the Trustee, means any
officer assigned to the Corporate Trust Office and also means, with respect to
any particular corporate trust matter, any other officer of the Trustee to whom
such matter is referred because of his knowledge of and familiarity with the
particular subject.
"Restricted Payments" means the sum of: (i) any cash dividend or other
distribution, direct or indirect, on account of any equity of the Company or its
Affiliates to a Person other than the Company or its Affiliates; plus (ii) any
redemption, retirement, sinking fund, or similar payment, purchase, or other
acquisition for value, direct or indirect, of any equity of any reorganized
Debtor by any reorganized Debtor (other than pursuant to the Management
Incentive Plan); plus (iii) any payment made to redeem, purchase, repurchase or
retire, or to obtain the surrender of, any outstanding warrants, options, or
other rights to acquire any equity of the reorganized Debtors; plus (iv) any
payment to any Affiliate of any of the reorganized Debtors (other than to
parties to the Management Incentive Plan); in each case made after the Effective
Date.
"Securities Act" means the Securities Act of 1933, as amended.
"Shares" means shares of the Company's Common Stock, $0.01 par value
per share.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Agreement, until a successor Trustee shall have become such
pursuant to the applicable provisions of this Agreement, and thereafter
"Trustee" shall mean such successor Trustee.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force
at the date as of which this Agreement was executed, except as provided in
Section 6.5.
"Vice President", when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title of "vice president".
The following table sets forth certain other defined terms and the Section of
this Agreement in which the meaning of each such term appears:
Section(s)
"Act"............................................... 1.4
"ANI"............................................... Preamble
"Bankruptcy Court".................................. Preamble
"CVRs".............................................. Preamble
"CVR Payment"....................................... 2.1
"Debtor"............................................ Preamble
"Default Interest Rate"............................. 3.3
"Definitive Securities"............................. 2.2
"Event of Default".................................. 8.1
"Global Securities"................................. 2.2
"Plan".............................................. Preamble
"Security Register"................................. 2.5(a)
"Surviving Person".................................. 9.1
"Trustee"........................................... Preamble
(b) For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
5
(i) terms used in the singular include the plural and
terms used in the plural include the singular;
(ii) all accounting terms used herein and not
expressly defined shall have the meanings assigned to such terms in accordance
with generally accepted accounting principles, and the term "generally accepted
accounting principles" means such accounting principles as are generally
accepted in the United States of America at the time of any computation;
(iii) all terms used but not defined herein that are
defined in the Trust Indenture Act have the meanings assigned to them therein;
(iv) the words "herein", "hereof" and "hereunder" and
other words of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision;
(v) all references herein to Articles or Sections
shall be to Articles or Sections, as the case may be, of this Agreement;
(vi) the words "including", "includes" and similar
words shall be deemed to be followed by "without limitation"; and
(vii) the word "or" is not exclusive.
(c) Certain terms, used principally in Article Four, are defined in
that Article.
1.2 Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Agreement, the Company shall furnish to
the Trustee (i) an Officer's Certificate stating that all conditions precedent,
if any, provided for in this Agreement (including any covenants, compliance with
which constitutes a condition precedent) relating to the proposed action have
been complied with, and (ii) an Opinion of Counsel stating that in the opinion
of such counsel all such conditions precedent, if any, have been complied with.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Agreement shall include: (a) a
statement that each individual signing such certificate or opinion has read such
covenant or condition; (b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based; (c) a statement that, in the opinion of
each such individual, he has made such examination or investigation as is
necessary to enable him to express an informed opinion as to whether or not such
covenant or condition has been complied with or satisfied; and (d) a statement
as to whether, in the opinion of each such individual, such condition or
covenant has been complied with or satisfied.
1.3 Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person or Persons
may certify or give an opinion as to such matters in one or several documents.
Where any Person is required to make, give or execute two or more applications,
requests, consents, certificates, statements, opinions or other instruments
under this Agreement, they may, but need not, be consolidated and form one
instrument.
6
Any Officer's Certificate may be based, insofar as it relates to legal
matters, upon a certificate or opinion of, or representations by, counsel,
unless such officer knows, or in the exercise of reasonable care should know,
that the certificate or opinion or representations with respect to the matters
upon which his or her certificate is based are erroneous. Any Opinion of Counsel
may be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company stating
that the information with respect to such factual matters is in the possession
of the Company, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
the matters upon which his or her opinion is based are erroneous.
Any Officer's Certificate or Opinion of Counsel may be based, insofar
as it relates to accounting matters, upon a certificate or opinion of or
representations by an accountant or firm of accountants in the employ of the
Company, unless such officer or counsel, as the case may be, knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the accounting matters upon which his or her
certificate or opinion is based are erroneous. Any certificate or opinion of any
independent firm of public accountants filed with the Trustee shall contain a
statement that such firm is independent.
1.4 Acts of Holders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Agreement to be given or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Agreement and (subject to Section 4.1) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved in any reasonable manner that the
Trustee deems sufficient.
(c) The ownership of CVRs shall be proved by the Security
Register.
(d) At any time prior to the evidencing to the Trustee, as
provided in this Section 1.4, of the taking of any action by the Holders of the
CVRs specified in this Agreement in connection with such action, any Holder of a
CVR may, by filing written notice at the Corporate Trust Office and upon proof
of holding as provided in this Section 1.4, revoke such action so far as it
concerns such CVR. Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any CVR shall bind every future
Holder of the same CVR or the Holder of every CVR represented by a CVR
Certificate issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof, in respect of anything done, suffered or omitted to
be done by the Trustee, any Paying Agent or the Company in reliance thereon,
whether or not notation of such action is made upon the CVR Certificate
representing such CVR.
1.5 Notices, etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document required or permitted by this Agreement to
be made upon, given or furnished to, or filed with:
(a) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or filed, in
writing, to or with the Trustee at the Corporate Trust Office located at
_____________________.
7
(b) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder if in writing and mailed, first-class
postage prepaid, to the Company addressed to it at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇. ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: General Counsel.
The Company or the Trustee, by notice to the other, may designate
additional or different addresses for subsequent notices or communications.
1.6 Notice to Holders; Waiver.
Where this Agreement provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at such Holder's address as it appears in the Security Register,
not later than the latest date, and not earlier than the earliest date,
prescribed for the giving of such notice. In any case where notice to Holders is
given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. Where this Agreement provides for notice
in any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause, it shall be impracticable to mail notice of any event
as required by any provision of this Agreement, then any method of giving such
notice as shall be satisfactory to the Trustee shall be deemed to be a
sufficient giving of such notice.
1.7 Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with (a) another
provision hereof that is required to be included in this Agreement by any of the
provisions of the Trust Indenture Act, such required provision shall control or
(b) any applicable provision of the Trust Indenture Act, such provisions of the
Trust Indenture Act shall control.
1.8 Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
1.9 Successors and Assigns.
All covenants and agreements in this Agreement by the Company shall
bind its successors and assigns, whether so expressed or not.
1.10 Benefits of Agreement.
Nothing in this Agreement or in the CVRs, express or implied, shall
give to any Person (other than the parties hereto and their successors
hereunder, any Paying Agent and the Holders) any benefit or any legal or
equitable right, remedy or claim under this Agreement or under any covenant or
provision herein contained, all such covenants and provisions being for the sole
benefit of the parties hereto and their successors, any Paying Agent and the
Holders.
8
1.11 Governing Law.
This Agreement, the CVR Certificates and the CVRs shall be governed by
and construed in accordance with the laws of the State of New York.
1.12 Separability Clause.
In case any provision in this Agreement or in the CVR Certificates
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
ARTICLE II
THE CVRS
2.1 Title and Terms.
(a) The aggregate number of CVRs that may be issued and
represented by CVR Certificates authenticated and delivered under this Agreement
is limited to 1,600,000. The Company will not issue any fractional CVRs.
(b) The CVRs shall be known and designated as the "Contingent
Value Rights" of the Company and shall be unsecured obligations of the Company
that rank equally with all other unsecured obligations of the Company and the
Holders shall have no rights except for those rights explicitly provided for
herein and shall not, by virtue of their ownership of CVRs have any of the
rights of a stockholder of the Company.
(i) If the Implied Equity Value determined with
respect to the Initial Change of Control is equal to or greater than
$140,000,000, then the Company will pay or cause to be paid to each Holder such
Holder's pro rata share of an amount equal to the CVR Payment. Upon payment in
full of the CVR Payment, the CVRs will thereafter cease to be Outstanding or to
entitle the Holders to any rights or benefits with respect to the CVRs. If the
Implied Equity Value determined with respect to the Initial Change of Control is
less than $140,000,000, then the Company will make no CVR Payment and the CVRs
will thereafter cease to be Outstanding or entitle the Holders to any right or
benefits with respect to the CVRs. For the avoidance of doubt, the Holders will
have no rights or benefits upon the occurrence of any Change of Control except
the right to receive the CVR Payment, if any, with respect to the Initial Change
of Control in accordance with the terms of this Agreement. For purposes of this
Agreement, a Holder's pro rata share of the CVR Payment shall be equal to a
fraction, the numerator of which is the number of CVRs registered in the name of
such Holder as of the Change of Control Consummation Date and the denominator of
which is the aggregate number of CVRs Outstanding as of the Change of Control
Consummation Date.
The CVR Payment, if any, payable with respect to the
Initial Change of Control shall be a function of the Implied Equity Value
determined with respect to such Initial Change of Control. If the Implied Equity
Value determined with respect to the Initial Change of Control is equal to an
Implied Equity Value Step Amount set forth in the following table, then the CVR
Payment shall be an amount equal to the Step CVR Payment set forth in the
following table for such Implied Equity Value Step Amount. If the Implied Equity
Value determined with respect to the Initial Change of Control falls between two
of the Implied Equity Value Step Amounts set forth in the following table, then
the CVR Payment shall be an amount calculated as follows:
CVR Payment = A + [((C-D)/(B-D)) x (E-A)], where
A = the Step CVR Payment set forth in the following table for D.
B = the Implied Equity Value Step Amount that is most proximately
greater than C.
9
C = the Implied Equity Value determined with respect to the Initial
Change of Control.
D = the Implied Equity Value Step Amount that is most proximately less
than C.
E = the Step CVR Payment set forth in the following table for B.
------------------------------------- -----------------------------------
IMPLIED EQUITY VALUE STEP CVR PAYMENT
STEP AMOUNT
------------------------------------- -----------------------------------
$ 140,000,000 $ 6,300,000
------------------------------------- -----------------------------------
165,000,000 17,180,000
------------------------------------- -----------------------------------
190,000,000 28,000,000
------------------------------------- -----------------------------------
215,000,000 43,300,000
------------------------------------- -----------------------------------
240,000,000 47,450,000
------------------------------------- -----------------------------------
265,000,000 58,720,000
------------------------------------- -----------------------------------
290,000,000 69,900,000
------------------------------------- -----------------------------------
315,000,000 81,000,000
------------------------------------- -----------------------------------
340,000,000 92,040,000
------------------------------------- -----------------------------------
By way of example, if the Implied Equity Value
determined with respect to the Initial Change of Control is equal to
$151,000,000, then the CVR Payment would be calculated as follows:
CVR Payment = 6,300,000 + [((151,000,000 - 140,000,000)/
(165,000,000-140,000,000)) x (17,180,000-6,300,000)]
CVR Payment = 6,300,000 + [(11,000,000/25,000,000) x 10,880,000]
= 6,300,000 + [0.44 x 10,880,000]
= 6,300,000 + 4,787,200
= $11,087,200
Notwithstanding the foregoing, if the Implied Equity
Value determined with respect to the Initial Change of Control is (a) more than
$340,000,000, then the CVR Payment shall be an amount equal to 27.07% of such
Implied Equity Value and (b) less than $140,000,000, then the CVR Payment shall
be zero.
(ii) The CVR Payment, if any, shall be paid by the
Company on the CVR Payment Date. The CVR Payment, if any, shall be paid by the
Company in Cash, except in the case of a Change of Control that is a Qualified
IPO, in which case the CVR Payment shall be paid by the Company in Shares. Any
Shares so issued shall be valued (for purposes of calculating the number of
Shares issuable to Holders) based upon the public offering price of Shares in
the Qualified IPO. Such determinations by the Company absent manifest error
shall be final and binding on the Company and the Holders. If the Company makes
payment of the CVR Payment in Shares, then the Company will take all steps
required to assure that such Shares shall be (i) duly authorized, validly
issued, fully paid and nonassessable, (ii) not issued in violation of any
preemptive rights or rights of first refusal, (iii) authorized for listing on
the same national securities exchange or inter-dealer automated quotation market
as are the Shares issued in the Qualified IPO, subject to official notice of
issuance, and (iv) issued either in a transaction that satisfied the
requirements of Section 3(a)(9) of the Securities Act, or pursuant to an
effective registration statement under the Securities Act. In addition, it shall
be a condition precedent to the payment of any portion of the CVR Payment in
Shares that the Company shall have complied with the first two paragraphs of
Section 7.3 hereof. No fractional Shares will be issued as payment of any
portion of the CVR Payment. If more than one CVR is surrendered for payment by
the same Holder, the number of full Shares issuable as payment of a portion of
the CVR Payment in respect of such CVRs shall be computed on the basis of the
aggregate number of such CVRs. Instead of any fractional Share that would
otherwise be issuable as payment of a portion of the CVR Payment, the Company
shall calculate and pay a cash adjustment in respect of such fraction
(calculated to the nearest 1/100th of a Share).
10
(c) As soon as practicable, but in any event within ten
Business Days after the Change of Control Consummation Date, the Company shall
(x) prepare and file with the Trustee an Officer's Certificate setting forth the
determinations set forth in Section 2.1(b) and the facts accounting for such
determinations and (y) mail to each Holder a copy such Officer's Certificate,
indicating the locations at which CVR Certificates may be presented for payment
and the date on which the CVR Payment will be made.
(d) Notwithstanding any provision of this Agreement or the CVR
Certificates to the contrary, other than in the case of interest payable in the
event of failure to pay the CVR Payment on or before the CVR Payment Date, no
interest shall accrue on any amounts payable on the CVRs to any Holder.
(e) In the event that the Company determines that no amount is
payable with respect to the CVRs to the Holders on the CVR Payment Date because
the Implied Equity Value is less than $140,000,000, the Company shall give to
the Trustee and each Holder notice of such determination. Upon making such
determination, absent manifest error, the CVRs shall terminate and become null
and void and the Holders thereof shall have no further rights with respect
thereto. The failure to give such notice or any defect therein shall not affect
the validity of such determination.
2.2 Registrable Form.
The CVR Certificates shall be initially in the form of one or more
permanent global securities in registered form, substantially in the form set
forth in Article III ("Global Securities"), deposited with the Trustee, and
shall bear the legend set forth on Exhibit A; provided that one or more
Definitive Securities (as defined below) may be issued initially to any Holder
at the request of such Holder. Each Global Security will represent such of the
outstanding CVRs as will be specified therein and each shall provide that it
represents the aggregate number of outstanding CVRs from time to time endorsed
thereon and that the aggregate number of outstanding CVRs represented thereby
may from time to time be reduced or increased, as appropriate, to reflect
exchanges. Any CVR Certificates issued in definitive form as may be permitted by
this Agreement shall be issued in the form of one or more permanent definitive
securities in registered form, substantially in the form set forth in Article
III ("Definitive Securities"), deposited with the Trustee, and shall not bear
the legend set forth on Exhibit A hereto.
2.3 Execution, Authentication, Delivery and Dating.
The CVR Certificates shall be executed on behalf of the Company by its
chairman or vice chairman of the Board of Directors or its president or any vice
president or its treasurer, under its corporate seal, which may, but need not,
be attested. The signature of any of these officers on the CVR Certificates may
be manual or facsimile.
CVR Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such CVR
Certificates or did not hold such offices at the date of such CVR Certificates.
At any time and from time to time after the execution and delivery of
this Agreement, the Company may deliver CVR Certificates executed by the Company
to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such CVR Certificates; and the Trustee in
accordance with such Company Order shall authenticate and deliver such CVR
Certificates as provided in this Agreement and not otherwise.
Each CVR Certificate shall be dated as of the date of its
authentication.
No CVR Certificate shall be entitled to any benefit under this
Agreement or be valid or obligatory for any purpose unless there appears on such
CVR Certificate a certification of authentication substantially in the form
11
provided for herein duly executed by the Trustee by manual signature of an
authorized officer, and such certification upon any CVR Certificate shall be
conclusive evidence, and the only evidence, that such CVR Certificate has been
duly authenticated and delivered hereunder and that the Holder is entitled to
the benefits of this Agreement.
2.4 Temporary CVR Certificates.
Until CVR Certificates are ready for delivery, the Company may execute,
and upon Company Order the Trustee shall authenticate and deliver, temporary CVR
certificates that are printed, lithographed, typewritten, mimeographed or
otherwise produced, substantially of the tenor of the CVR Certificates in lieu
of which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such temporary CVR
certificates may determine with the concurrence of the Trustee. Temporary CVR
certificates may contain such reference to any provisions of this Agreement as
may be appropriate. Every temporary CVR certificate shall be executed by the
Company and be authenticated by the Trustee upon the same conditions and in
substantially the same manner, and with like effect, as the CVR Certificates.
If temporary CVR certificates are issued, the Company will cause CVR
Certificates to be prepared without unreasonable delay. After the preparation of
CVR Certificates, the temporary CVR certificates shall be exchangeable for CVR
Certificates upon surrender of the temporary CVR certificates at the office or
agency of the Company designated for such purpose pursuant to Section 7.2,
without charge to the Holder.
Upon surrender for cancellation of any one or more temporary CVR
certificates, the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a like amount of CVR Certificates. Until so
exchanged, the temporary CVR certificates shall in all respects be entitled to
the same benefits under this Agreement as CVR Certificates.
2.5 Registration and Transfer and Exchange.
(a) Registration. The Company shall cause to be kept at the
Corporate Trust Office a register (the register maintained in such office and in
any other office or agency designated pursuant to Section 7.2 being herein
sometimes referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of CVRs and of transfers of CVRs. The Trustee is hereby initially
appointed "Security Registrar" for the purpose of registering CVRs and transfers
of CVRs as herein provided.
(b) Transfer and Exchange.
(i) Transfer and Exchange of Global Securities. A
Global Security may not be transferred except as a whole by the Trustee to a
nominee of the Trustee, by a nominee of the Trustee to the Trustee or to another
nominee of the Trustee, or by the Trustee or any such nominee to a successor
Trustee or a nominee of such successor Trustee. All Global Securities will be
exchanged by the Company for Definitive Securities if (i) the Company delivers
to the Security Registrar notice from the Trustee that it is unwilling or unable
to continue to act as a successor Trustee is not appointed by the Company within
120 days after the date of such notice from the Trustee; (ii) the Company in its
sole discretion determines that the Global Securities (in whole but not in part)
should be exchanged for Definitive Securities and delivers a written notice to
such effect to the Security Registrar or (iii) an Event of Default has occurred
and is continuing and the Security Registrar has received a request from the
Trustee to issue Definitive Securities. Upon the occurrence of either of the
preceding events in (i) or (ii) above, Definitive Securities shall be issued in
such names as required by the Trustee. Global Securities also may be exchanged
or replaced, in whole or in part, as provided in Sections 2.4 and 2.6 hereof.
Every CVR Certificate authenticated and delivered in exchange for, or in lieu
of, a Global Security or any portion thereof, pursuant to this Section 2.5 or
Section 2.4 or 2.6 hereof, shall be authenticated and delivered in the form of,
and shall be, a Global Security. A Global Security may not be exchanged for
12
another Global Security other than as provided in this Section 2.5(b)(i),
however, beneficial interests in a Global Security may be transferred and
exchanged as provided in Section 2.5(b)(ii) or (iii) hereof.
(ii) Transfer and Exchange of Beneficial Interests in
the Global Securities. The transfer and exchange of beneficial interests in the
Global Securities will be effected through the Trustee, in accordance with the
provisions of this Agreement and the Applicable Procedures. Beneficial interests
in any Global Security may be transferred to Persons who take delivery thereof
in the form of a beneficial interest in Global Security. No written orders or
instructions shall be required to be delivered to the Security Registrar to
effect the transfers described in this Section 2.5(b)(ii).
(iii) Beneficial Interests in Global Securities to
Definitive Securities. If any holder of a beneficial interest in a Global
Security proposes to exchange such beneficial interest for a Definitive Security
or to transfer such beneficial interest to a Person who takes delivery thereof
in the form of a Definitive Security, then the Security Registrar will cause the
aggregate number of CVRs represented by the applicable Global Security to be
reduced accordingly pursuant to Section 2.5(b)(vi) hereof, and the Company will
execute and the Security Registrar will authenticate and deliver to the Person
designated in the instructions a Definitive Security representing the
appropriate number of CVRs. Any Definitive Security issued in exchange for a
beneficial interest pursuant to this Section 2.5(b)(iii) will be registered in
such name or names and in such authorized denomination or denominations as the
holder of such beneficial interest requests through instructions to the Security
Registrar from or through the Trustee.
(iv) Definitive Securities to Beneficial Interests in
Global Securities. A Holder of a Definitive Security may exchange such
Definitive Security for a beneficial interest in a Global Security or transfer
such Definitive Security to a Person who takes delivery thereof in the form of a
beneficial interest in a Global Security at any time. Upon receipt of a request
for such an exchange or transfer, the Security Registrar will cancel the
applicable Definitive Security and increase or cause to be increased the
aggregate number of CVRs represented by one of the Global Securities.
(v) Transfer and Exchange of Definitive Securities for
Definitive Securities. Upon request by a Holder of Definitive Securities and
such Holder's compliance with the provisions of this Section 2.5(b)(v), the
Security Registrar will register the transfer or exchange of Definitive
Securities. Prior to such registration of transfer or exchange, the requesting
Holder must present or surrender to the Security Registrar the Definitive
Securities duly endorsed or accompanied by a written instruction of transfer in
form satisfactory to the Security Registrar duly executed by such Holder or by
its attorney, duly authorized in writing. A Holder of Definitive Securities may
transfer such Definitive Securities to a Person who takes delivery thereof in
the form of Definitive Securities. Upon receipt of a request to register such a
transfer, the Security Registrar shall register the Definitive Securities
pursuant to the instructions from the Holder thereof.
(vi) Cancellation and/or Adjustment of Global Securities. At
such time as all beneficial interests in a particular Global Security have been
exchanged for Definitive Securities or a particular Global Security has been
repurchased or canceled in whole and not in part, each
such Global Security will be returned to or retained and canceled by the
Security Registrar in accordance
with Section 2.9 hereof. At any time prior to such cancellation, if any
beneficial interest in a Global Security is exchanged for or transferred to a
Person who will take delivery thereof in the form of a beneficial interest in
another Global Security or for Definitive Securities, the aggregate number of
CVRs represented by such Global Security will be reduced accordingly and an
endorsement will be made on such Global Security by the Security Registrar or by
the Trustee at the direction of the Security Registrar to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a Person who will take delivery thereof in the form of a beneficial interest
in another Global Security, such other Global Security will be increased
accordingly and an endorsement will be made on such Global Security by the
Security Registrar or by the Trustee at the direction of the Security Registrar
to reflect such increase.
(vii) General Provisions Relating to Transfers and
Exchanges.
13
(A) To permit registrations of transfers and
exchanges, the Company will execute and the Trustee will
authenticate Global Securities and Definitive Securities upon
receipt of a Company Order in accordance with Section 2.3
hereof or at the Security Registrar's request.
(B) No service charge will be made to a holder of a
beneficial interest in a Global Security or to a Holder of a
Definitive Security for any registration of transfer or
exchange, but the Company may require payment of a sum
sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such
transfer taxes or similar governmental charge payable upon
exchange or transfer pursuant to Section 2.4 hereof).
(C) All Global Securities and Definitive Securities
issued upon any registration of transfer or exchange of Global
Securities or Definitive Securities will be the valid
obligations of the Company, evidencing the same rights, and
entitled to the same benefits under this Agreement, as the
Global Securities or Definitive Securities surrendered upon
such registration of transfer or exchange.
(D) The Trustee will authenticate Global Securities
and Definitive Securities in accordance with the provisions of
Section 2.3 hereof.
2.6 Mutilated, Destroyed, Lost and Stolen CVR Certificate.
If (a) any mutilated CVR Certificate is surrendered to the Trustee or
(b) the Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any CVR Certificate, and there is delivered to the
Company and the Trustee such security or indemnity as may be required by them to
save each of them harmless, then, in the absence of notice to the Company or the
Trustee that such CVR Certificate has been acquired by a bona fide purchaser,
the Company shall execute and upon its written request the Trustee shall
authenticate and deliver, in exchange for any such mutilated CVR Certificate or
in lieu of any such destroyed, lost or stolen CVR Certificate, a new CVR
Certificate of like tenor and amount of CVRs, bearing a number not
contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen CVR Certificate
has become or is to become due and payable within 15 days, the Company in its
discretion may, instead of issuing a new CVR Certificate, pay such CVR on the
CVR Payment Date.
Upon the issuance of any new CVR Certificate under this Section 2.6,
the Company may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new CVR Certificate issued pursuant to this Section 2.6 in lieu
of any destroyed, lost or stolen CVR Certificate shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen CVR Certificate shall be at any time enforceable by anyone, and
shall be entitled to all benefits of this Agreement equally and proportionately
with any and all other CVR Certificates duly issued hereunder.
The provisions of this Section 2.6 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen CVR Certificates.
2.7 Presentation of CVR Certificate.
14
Payment of any amounts or the issuance of any Shares to Holders of the
CVRs shall be made only upon presentation by the Holder thereof at the office or
agency of the Company maintained for that purpose or at any other office or
agency maintained by the Company for such purpose. The Holder of the CVRs shall
furnish to the Company such forms, certificates, or other information as the
Company may request to establish the legal entitlement of such Holder to an
exemption from withholding taxes. In the event the Company does not receive such
forms, certificates, or other evidence establishing a Holder's legal entitlement
to exemption from withholding tax, then all payments and disbursements to be
made by the Company pursuant to this Agreement or the CVRs shall be reduced by
and subject to withholding taxes. The Company shall have no obligation to
reimburse, equalize or compensate a Holder or other person for withholding
taxes.
2.8 Persons Deemed Owners.
Prior to due presentment for the registration of a transfer of any CVR,
the Trustee, the Security Registrar, any of their respective agents and the
Company may deem and treat the Person in whose name any CVR is registered as the
absolute owner of such CVR for the purpose of receiving payment on such CVRs and
for all other purposes, and none of the Trustee, the Security Registrar, any of
their respective agents or the Company shall be affected by notice to the
contrary.
2.9 Cancellation.
All CVR Certificates surrendered for payment, registration of transfer
or exchange shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee and shall be promptly cancelled by it. The Company may
at any time deliver to the Trustee for cancellation any CVR Certificates
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and all CVR Certificates so delivered shall
be promptly cancelled by the Trustee. No CVR Certificates shall be authenticated
in lieu of or in exchange for any CVR Certificates cancelled as provided in this
Section 2.9, except as expressly permitted by this Agreement. All cancelled CVR
Certificates held by the Trustee shall be destroyed by the Trustee in accordance
with its customary procedures and a certificate of destruction will be delivered
to the Company.
ARTICLE III
CVR FORMS
3.1 Forms Generally.
The CVR Certificates and the Trustee's certificate of authentication
shall be in substantially the forms set forth in this Article, with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Agreement and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon as
may be required to comply with the rules of any securities exchange or as may be
required by law or any rule or regulation pursuant thereto, all as may be
determined by officers executing such CVR Certificates, as evidenced by their
execution of the CVR Certificates. Any portion of the text of any CVR
Certificates may be set forth on the reverse thereof, with an appropriate
reference thereto on the face of the CVR Certificates. The definitive CVR
Certificates shall be printed, lithographed or engraved or produced by any
combination of these methods or may be produced in any other manner as
determined by the officers executing such CVR Certificates, as evidenced by
their execution of such CVR Certificates.
15
3.2 Form of Face of CVR.
▇▇▇▇▇▇ NUTRITIONALS HOLDINGS, INC.
No. ____ Certificate for [____] Contingent Value Rights
This certifies that or its registered assigns (the "Holder") is the
registered holder of the number of Contingent Value Rights ("CVRs") set forth
above. Each CVR entitles the Holder, subject to the provisions contained herein
and in the Agreement referred to on the reverse hereof, to a payment from ▇▇▇▇▇▇
Nutritionals Holdings, Inc., a Delaware corporation (the "Company"), in an
amount and in the form determined pursuant to the provisions set forth on the
reverse hereof and as more fully described in the Agreement. Such payment shall
be made in Cash on the CVR Payment Date, or, in the event of a Change of Control
that is a Qualified IPO, in Shares.
Payment of any amounts of Cash or the issuance of any Shares pursuant
to this CVR Certificate shall be made only upon presentation of this CVR
Certificate by the Holder hereof, at the office or agency of the Company
maintained for that purpose. All payments shall be made in the Borough of
Manhattan, the City of New York, or at any other office or agency maintained by
the Company for such purpose. Cash payments shall be made in such coin or
currency of the United States of America as at the time is legal tender for the
payment of public and private debts; provided, however, such amounts may be paid
by check payable in such money.
Reference is hereby made to the further provisions of this CVR
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly executed
by the Trustee referred to on the reverse hereof by manual signature, this CVR
Certificate shall not be entitled to any benefit under the Agreement or be valid
or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: , 2005 ▇▇▇▇▇▇ NUTRITIONALS HOLDINGS, INC.
--------------
By________________________________
Attest:
SEAL__________________________________________
Authorized Signature
16
3.3 Form of Reverse of CVR.
This CVR Certificate is issued under and in accordance with the
Contingent Value Rights Agreement, dated as of , 2005 (the "Agreement"), between
the Company and [______________], as trustee (the "Trustee", which term includes
any successor Trustee under the Agreement), and is subject to the terms and
provisions contained in the Agreement, all of which terms and provisions the
Holder of this CVR Certificate consents by acceptance hereof. The Agreement is
hereby incorporated herein by reference and made a part hereof. Reference is
hereby made to the Agreement for a full statement of the respective rights,
limitations of rights, duties, obligations and immunities thereunder of the
Company, the Trustee and the Holders of the CVRs. Copies of the Agreement can be
obtained by contacting the Trustee.
PRIOR TO SUCH TIME AS THE COMPANY EFFECTS A PUBLIC OFFERING OF ITS
SECURITIES PURSUANT TO A REGISTRATION STATEMENT THAT IS DECLARED EFFECTIVE BY
THE SECURITIES AND EXCHANGE COMMISSION, THE COMPANY'S BOARD OF DIRECTORS MAY
REFUSE TO RECOGNIZE OR TO REGISTER ANY TRANSFER, OR ATTEMPTED OR PURPORTED
TRANSFER, OF CVRS OR ANY INTEREST THEREIN OR RIGHT WITH RESPECT THEREOF, THAT
WOULD RESULT IN THE COMPANY'S BECOMING SUBJECT TO THE REQUIREMENTS OF SECTION
12(G) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AND IN SUCH CASE SUCH
TRANSFER OR ATTEMPTED OR PURPORTED TRANSFER WILL BE VOID AND WILL BE INEFFECTIVE
AS AGAINST THE COMPANY.
The Company shall pay to each Holder an amount equal to such Holder's
pro rata share of the CVR Payment, calculated pursuant to Section 2.1(b) of the
Agreement, upon the consummation of the Initial Change of Control. The CVR
Payment, if any, shall be paid by the Company, in Cash or, in connection with an
Initial Change of Control that is a Qualified IPO, in Shares. Any Shares so
issued shall be valued (for purposes of calculating the number of Shares
issuable to Holders) based upon the public offering price of Shares in the
Qualified IPO.
[____________] has been appointed as Paying Agent. The CVR Payment to
be made by the Company pursuant to this CVR Certificate shall be subject to and
reduced by withholding taxes, if any. The Company shall have no obligation to
reimburse, equalize, or compensate a Holder or other Person for such withholding
taxes. If the Company makes payment of the CVR Payment in Shares, then the
Company will take all steps required to assure that such Shares shall be (i)
duly authorized, validly issued, fully paid and nonassessable, (ii) not issued
in violation of any preemptive rights or rights of first refusal, (iii)
authorized for listing on the same national securities exchange or inter-dealer
automated quotation market as are the Shares issued in the Qualified IPO,
subject to official notice of issuance, and (iv) issued either in a transaction
that satisfied the requirements of Section 3(a)(9) of the Securities Act, or
pursuant to an effective registration statement under the Securities Act. In
addition, it shall be a condition precedent to the payment of any portion of the
CVR Payment in Shares that the Company shall have complied with the first two
paragraphs of Section 7.3 of the Agreement. No fractional Shares will be issued
as payment for any portion of the CVR Payment but instead the Company will pay a
Cash adjustment as provided in the Agreement.
If the Company shall fail to pay the CVR Payment when due, the CVR
Payment shall thereafter bear interest at the Default Interest Rate, which shall
be payable in Cash, until payment of the CVR Payment shall be made to the
Trustee. "Default Interest Rate" means 8% per annum.
In the event that the Company determines that no amount is payable on
the CVRs to the Holder on the CVR Payment Date pursuant to the terms of the
Agreement, the Company shall give to the Holder and the Trustee written notice
of such determination. Upon making such determination, absent manifest error,
the CVRs represented by this CVR Certificate shall terminate and become null and
void and the Holder hereof shall have no further rights with respect hereto. The
failure to give such notice or any defect therein shall not affect the validity
of such determination.
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Notwithstanding any provision of the Agreement or of this CVR
Certificate to the contrary, other than in the case of interest in the event of
failure to pay the CVR Amount when due, no interest shall accrue on any amounts
payable on the CVRs to the Holder.
The Agreement permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of CVRs under the Agreement at any time by
the Company and the Trustee with the consent of the Holders of a majority of the
CVRs at the time Outstanding.
No reference herein to the Agreement and no provision of this CVR
Certificate or of the Agreement shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay any amounts determined
pursuant to the terms hereof and of the Agreement at the time and place, and in
the form of consideration and amount, herein prescribed.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of the CVRs represented by this CVR Certificate is
registrable on the Security Register of the Company, upon surrender of this CVR
Certificate for registration of transfer at the office or agency of the Company
maintained for such purpose in the [City of New York], duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new CVR
Certificates, for the same amount of CVRs, will be issued to the designated
transferee or transferees. The Company hereby initially designates the office of
the Trustee as the office for registration of transfer of this CVR Certificate.
As provided in the Agreement and subject to certain limitations therein
set forth, this CVR Certificate is exchangeable for one or more CVR Certificates
representing the same number of CVRs as is represented by this CVR Certificate
as requested by the Holder surrendering the same. No service charge will be made
for any registration of transfer or exchange of CVRs, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.
Prior to the time of due presentment of this CVR Certificate for
registration of transfer, the Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name this CVR Certificate is
registered as the owner hereof for all purposes, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
All capitalized terms used in this CVR Certificate without definition
shall have the meanings assigned to them in the Agreement.
3.4 Form of Trustee's Certificate of Authentication.
TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
This is one of the CVR Certificates referred to in the within-mentioned
Agreement.
[________________], as Trustee
By:
----------------------------
Authorized Signatory
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ARTICLE IV
THE TRUSTEE
4.1 Certain Duties and Responsibilities.
(a) With respect to the Holders of CVRs issued hereunder, the
Trustee, prior to the occurrence of an Event of Default with respect to the CVRs
and after the curing or waiving of all Events of Default that may have occurred,
undertakes to perform such duties and only such duties as are specifically set
forth in this Agreement. In case an Event of Default with respect to the CVRs
has occurred (which has not been cured or waived), the Trustee shall exercise
such of the rights and powers vested in it by this Agreement, and use the same
degree of care and skill in their exercise, as a prudent person would exercise
or use under the circumstances in the conduct of his own affairs.
(b) In the absence of bad faith on its part, prior to the
occurrence of an Event of Default and after the curing or waiving of all such
Events of Default that may have occurred, the Trustee may conclusively rely, as
to the truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Trustee and conforming
to the requirements of this Agreement; but in the case of any such certificates
or opinions which by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements of this Agreement.
(c) No provision of this Agreement shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) this Subsection (c) shall not be construed to
limit the effect of Subsections (a) and (b) of this Section;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent facts;
(iii) no provision of this Agreement shall require the
Trustee to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it; and
(iv) the Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders pursuant to Section 8.9 relating to the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee, under this
Agreement.
(d) Whether or not therein expressly so provided, every
provision of this Agreement relating to the conduct or affecting the liability
of or affording protection to the Trustee shall be subject to the provisions of
this Section.
4.2 Certain Rights of Trustee.
The Trustee undertakes to perform such duties and only such duties as
are specifically set forth in this Agreement, and no implied covenants or
obligations shall be read into this Agreement against the Trustee. Subject to
the provisions of Trust Indenture Act Sections 315(a) through 315(d) and Section
4.1 hereof:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
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note, other evidence of indebtedness or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or
parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a Board
Resolution;
(c) whenever in the administration of this Agreement the
Trustee shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith on
its part, rely upon an Officer's Certificate;
(d) the Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Agreement at the request or
direction of any of the Holders pursuant to this Agreement, unless such Holders
shall have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance with
such request or direction;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
appraisal, security, or other paper or document unless requested in writing to
do so by the Holders of not less than a majority in aggregate number of the CVRs
then Outstanding; provided that, if the payment within a reasonable time to the
Trustee of the costs, expenses or liabilities likely to be incurred by it in the
making of such investigation is, in the opinion of the Trustee, not reasonably
assured to the Trustee by the security afforded to it by the terms of this
Agreement, the Trustee may require reasonable indemnity against such expenses or
liabilities as a condition to proceeding. The reasonable expenses of every such
investigation shall be paid by the Company or, if paid by the Trustee or any
predecessor Trustee, shall be repaid by the Company upon demand;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed with due care by it
hereunder;
(h) the permissive rights of the Trustee to do things
enumerated in this Agreement shall not be construed as a duty and the Trustee
shall be liable for its negligence, bad faith or willful misconduct; and
(i) except for a default under Section 8.1, the Trustee shall
not be deemed to have notice of any default or event unless specifically
notified in writing of such event by the Company or the Holders of not less than
25% in aggregate number of CVRs Outstanding; as used herein, the term "actual
knowledge" means the actual fact or statement of knowing, without any duty to
make any investigation with regard thereto.
No provision of this Agreement shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it.
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4.3 Not Responsible for Recitals or Issuance of CVRs.
The recitals contained herein and in the CVR Certificates, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Agreement, the CVRs or the CVR Certificates.
4.4 May Hold CVRs.
The Trustee, any Paying Agent, Security Registrar or any other agent of
the Company, in its individual or any other capacity, may become the owner or
pledgee of CVRs, and, subject to Sections 4.7 and 4.10, may otherwise deal with
the Company with the same rights it would have if it were not Trustee, Paying
Agent, Security Registrar or such other agent.
4.5 Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder.
4.6 Compensation, Reimbursement and Indemnification of the Trustee.
The Company agrees:
(a) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which compensation shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(b) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any provision of this Agreement (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad faith;
and
(c) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or bad faith
on its part, arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of defending
itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder, including the enforcement
of this Section 4.6.
4.7 Disqualification; Conflicting Interests.
The Trustee shall be subject to the provisions of Section 310(b) of the
Trust Indenture Act during the period of time provided for therein. Nothing
herein shall prevent the Trustee from filing with the Commission the application
referred to in the penultimate paragraph of Section 310(b) of the Trust
Indenture Act.
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4.8 Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America or of any State, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000, subject
to supervision or examination by Federal or State authority and, to the extent
there is such an institution eligible and willing to serve, having an office or
agency in the City of New York. If such corporation publishes reports of
condition at least annually pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then, for the purposes of this
Section, the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article.
This Indenture shall always have a Trustee who satisfies the
requirements of Sections 310(a)(1), (2) and (5) of the Trust Indenture Act.
4.9 Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee under
Section 4.10.
(b) The Trustee, or any trustee or trustees hereafter
appointed, may resign at any time by giving written notice thereof to the
Company. If an instrument of acceptance by a successor Trustee shall not have
been delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by (i) the Company,
by a Board Resolution or, (ii) an Act of the Holders of a majority of the
Outstanding CVRs, delivered to the Trustee and to the Company.
(d) If at any time:
(i) the Trustee shall fail to comply with Section 4.7
after written request therefor by the Company or by any Holder who has been a
bona fide Holder of a CVR for at least six months,
(ii) the Trustee shall cease to be eligible under
Section 4.8 and shall fail to resign after written request therefor by the
Company or by any such Holder, or
(iii) the Trustee shall become incapable of acting or
shall be adjudged bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed, or any public officer shall take charge or control
of the Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then, in any case, (i) the Company by a Board
Resolution may remove the Trustee, or (ii) the Holder of any CVR who has been a
bona fide Holder of a CVR for at least six months may, on behalf of such Holder
and all others similarly situated, petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a successor Trustee.
(e) if the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any reason, the Company, by a Board Resolution, shall promptly appoint a
successor Trustee. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee shall be
appointed by Act of the Holders of a majority of the Outstanding CVRs delivered
to the Company and the retiring Trustee, the successor Trustee so appointed
shall, forthwith upon its acceptance of such appointment in accordance with
Section 4.10, become the successor Trustee and supersede the successor Trustee
22
appointed by the Company. If no successor Trustee shall have been so appointed
by the Company or the Holders of the CVRs and so accepted appointment, the
Holder of any CVR who has been a bona fide Holder for at least six months may on
behalf of such Holder and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee by mailing
written notice of such event by first-class mail, postage prepaid, to the
Holders of CVRs as their names and addresses appear in the Security Register.
Each notice shall include the name of the successor Trustee and the address of
its Corporate Trust Office. If the Company fails to send such notice within ten
days after acceptance of appointment by a successor Trustee, the successor
Trustee shall cause the notice to be mailed at the expense of the Company.
4.10 Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee; but, on request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee, and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder. Upon request of any such successor Trustee, the
Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
4.11 Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any CVR Certificates shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the CVR Certificates so authenticated with the
same effect as if such successor Trustee had itself authenticated such CVR
Certificates; and such certificate shall be fully effective, provided that the
right to adopt the certificate of authentication of any predecessor Trustee
shall apply only to its successor or successors by merger, conversion or
consolidation.
4.12 Preferential Collection of Claims Against Company.
The Trustee is subject to Section 311(a) of the Trust
Indenture Act, excluding any creditor relationship listed in Section 311(b) of
the Trust Indenture Act. A Trustee who has resigned or been removed shall be
subject to Section 311(a) of the Trust Indenture Act to the extent indicated
therein.
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ARTICLE V
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
5.1 Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee, at
such times as the Trustee may request in writing, within 30 days after receipt
by the Company of any such request, a list, in such form as the Trustee may
reasonably require, of the names and the addresses of the Holders as of a date
not more than 15 days prior to the time such list is furnished and the Company
shall otherwise comply with Section 312(a) of the Trust Indenture Act if the
Trustee is not the Security Registrar; provided, however, that, if and so long
as the Trustee shall be the Security Registrar, no such list need be furnished
by the Company.
5.2 Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the most
recent list furnished to the Trustee as provided in Section 5.1 and the names
and addresses of Holders received by the Trustee in its capacity as Security
Registrar and the Trustee shall otherwise comply with Section 312(a) of the
Trust Indenture Act. The Trustee may destroy any list furnished to it as
provided in Section 5.1 upon receipt of a new list so furnished.
(b) If three or more Holders (hereinafter referred to as
"applicants") apply in writing to the Trustee, and furnish to the Trustee
reasonable proof that each such applicant has owned a CVR for a period of at
least six months preceding the date of such application, and such application
states that the applicants desire to communicate with other Holders with respect
to their rights under this Agreement or under the CVRs and is accompanied by a
copy of the form of proxy or other communication which such applicants propose
to transmit, then the Trustee shall, within five Business Days after the receipt
of such application at its election, either:
(i) afford such applicants access to the information
preserved at the time by the Trustee in accordance with Section 5.2(a), or
(ii) inform such applicants as to the approximate
number of Holders whose names and addresses appear in the information preserved
at the time by the Trustee in accordance with Section 5.2(a), and as to the
approximate cost of mailing to such Holders the form of proxy or other
communication, if any, specified in such application.
If the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each Holder whose name and address appear in the information preserved
at the time by the Trustee in accordance with Section 5.2(a), a copy of the form
of proxy or other communication which is specified in such request, with
reasonable promptness after a tender to the Trustee of the material to be mailed
and of payment, or provision for the payment, of the reasonable expenses of
mailing, unless within five days after such tender, the Trustee shall mail to
such applicants and file with the Commission, together with a copy of the
material to be mailed, a written statement to the effect that, in the opinion of
the Trustee, such mailing would be contrary to the best interests of the Holders
or would be in violation of applicable law. Such written statement shall specify
the basis of such opinion. If the Commission, after opportunity for a hearing
upon the objections specified in the written statement so filed, shall enter an
order refusing to sustain any of such objections or if, after the entry of an
order sustaining one or more of such objections, the Commission shall find,
after notice and opportunity for hearing, that all the objections so sustained
have been met and shall enter an order so declaring, the Trustee shall mail
copies of such material to all such Holders with reasonable promptness after the
entry of such order and the renewal of such tender; otherwise the Trustee shall
be relieved of any obligation or duty to such applicants respecting their
application.
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(c) Every Holder of CVRs, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
shall be held accountable by reason of the disclosure of any such information as
to the names and addresses of the Holders in accordance with Section 5.2(b),
regardless of the source from which such information was derived, and that the
Trustee shall not be held accountable by reason of mailing any material pursuant
to a request made under Section 5.2(b).
5.3 Reports by Trustee.
Within 60 days after May 15 of each year, commencing with the May 15
occurring after the initial issuance of CVRs hereunder, the Trustee shall
transmit by mail to the Holders of CVRs, in the manner and to the extent
provided in Section 313(c) of the Trust Indenture Act, and to the Company a
brief report dated as of such reporting date which satisfies the requirements of
Section 313(a) of the Trust Indenture Act (but if no event described in Section
313(a) of the Trust Indenture Act has occurred within the twelve months
preceding the reporting date, not report need be transmitted). The Trustee also
shall comply with Section 313(b)(2) of the Trust Indenture Act.
A copy of each report at the time of its mailing to the Holders and the
Company shall be filed with the Commission and each stock exchange on which the
CVRs are listed (if any) in accordance with Section 313(d) of the Trust
Indenture Act. The Company shall promptly notify the Trustee when the CVRs are
listed on any stock exchange or delisted therefrom.
5.4 Reports by Company.
The Company shall file with the Trustee:
(a) as soon as practicable, but in any event within ninety
(90) days after the end of each fiscal year of the Company, A) a balance sheet
as of the last day of such year and an income statement, a statement of cash
flows and a statement of changes in stockholders' equity for such year, such
financial statements to be prepared and presented in accordance with GAAP and
audited and certified by reputable independent public accountants selected by
the Company provided that with respect to the 2005 fiscal year of the Company,
only the balance sheet of the Company shall be required to be audited and
certified by independent public accountants), and (B) a management's discussion
and analysis of such financial statements in such detail as is reasonably
necessary to an understanding of the Company's financial condition, changes in
financial condition and results of operations;
(b) as soon as practicable but in any event within forty five
(45) days after the end of the first three quarters of each fiscal year of the
Company, (A) an unaudited balance sheet as of the last day of such quarter and
an unaudited income statement, statement of cash flows and statement of changes
in stockholders' equity for such quarter and the preceding portion of such
fiscal year, such financial statements to be prepared and presented in
accordance with GAAP and (B) a management's discussion and analysis of such
financial statements in such detail as is reasonably necessary to an
understanding of the Company's financial condition, changes in financial
condition and results of operations; and
(c) as soon as practicable, but in any event within the time
period required for the filing of a Form 8-K by the Company if the Company were
a Reporting Company, the information that the Company would be required to
disclose by Items 1.01, 1.02, 1.03, 2.01, 2.03, 2.04, 2.05 and 2.06 of Form 8-K
if the Company were a Reporting Company
The Trustee shall transmit by mail to all Holders, as their names and
addresses appear in the Security Register, within 30 days after the filing
thereof with the Trustee, copies of any information, documents and reports
required to be filed by the Company pursuant to Subsections (a), (b) and (c) of
this Section as may be required by rules and regulations prescribed from time to
time by the Commission. The Trustee's expenses with respect to mailing the
foregoing shall be reimbursed by the Company.
25
Delivery of reports and information to the Trustee under this Section
is for informational purposes only and the Trustee's receipt of the foregoing
shall not constitute constructive notice of any information contained therein.
ARTICLE VI
AMENDMENTS
6.1 Amendments Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more amendments hereto, in form satisfactory to the Trustee, for any
of the following purposes:
(a) to evidence the succession of another Person to the
Company and the assumption by any such successor of the covenants of the Company
herein and in the CVR Certificates;
(b) to add to the covenants of the Company such further
covenants, restrictions, conditions or provisions as its Board of Directors and
the Trustee shall consider to be for the protection of the Holders of CVRs, and
to make the occurrence, or the occurrence and continuance, of a default in any
such additional covenants, restrictions, conditions or provisions an Event of
Default permitting the enforcement of all or any of the several remedies
provided in this Agreement as herein set forth; provided that in respect of any
such additional covenant, restriction, condition or provision such amendment may
provide for a particular period of grace after default (which period may be
shorter or longer than that allowed in the case of other defaults) or may
provide for an immediate enforcement upon such an Event of Default or may limit
the remedies available to the Trustee upon such an Event of Default or may limit
the right of the Holders of a majority of the Outstanding CVRs to waive such an
Event of Default;
(c) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with any other provision
herein, or to make any other provisions with respect to matters or questions
arising under this Agreement; provided that in each case, such provisions shall
not adversely affect the interests of the Holders; or
(d) to comply with the requirements of the Commission in order
to effect or maintain the qualification of the Agreement under the Trust
Indenture Act.
6.2 Amendments with Consent of Holders.
With the consent of the Holders of not less than a majority of the
Outstanding CVRs as required to amend this Agreement in accordance with the
Trust Indenture Act, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into one or more amendments hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement or of modifying in any manner the rights of the Holders under
this Agreement; provided that no such amendment shall, without the consent of
the Holder of each Outstanding CVR affected thereby:
(a) modify the definition of Change of Control, Change of Control
Consummation Date, CVR Payment Date, CVR Payment, Default Interest Rate, Event
of Default, Initial Change of Control, Net Distributable Value, or Implied
Equity Value, or modify Section 2.1(b) or otherwise extend the maturity of the
CVRs or reduce the amounts payable in respect of the CVRs;
(b) reduce the amount of the Outstanding CVRs, the consent of
whose Holders is required for any such amendment; or
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(c) modify any of the provisions of this Section, except to
increase any such percentage or to provide that certain other provisions of this
Agreement cannot be modified or waived without the consent of the Holder of each
CVR affected thereby.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed amendment, but it shall be
sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Company and the Trustee of any
amendment pursuant to the provisions of this Section, the Company shall mail a
notice thereof by first class mail to the Holders of CVRs at their addresses as
they shall appear on the Security Register, setting forth in general terms the
substance of such amendment. Any failure of the Company to mail such notice, or
any defect therein, shall not, however, in any way impair or affect the validity
of any such amendment.
6.3 Execution of Amendments.
In executing any amendment permitted by this Article, the Trustee shall
be entitled to receive, and (subject to Section 4.1) shall be fully protected in
relying upon, an Opinion of Counsel stating that the execution of such amendment
is authorized or permitted by this Agreement. The Trustee may, but shall not be
obligated to, enter into any such amendment which affects the Trustee's own
rights, duties or immunities under this Agreement or otherwise.
6.4 Effect of Amendments.
Upon the execution of any amendment under this Article, this Agreement
shall be modified in accordance therewith, and such amendment shall form a part
of this Agreement for all purposes; and every Holder of CVRs represented by CVR
Certificates theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
6.5 Conformity with Trust Indenture Act.
Every amendment executed pursuant to this Article shall conform to the
requirements of the Trust Indenture Act as then in effect.
6.6 Reference in CVR Certificates to Amendments.
CVR Certificates authenticated and delivered after the execution of any
amendment pursuant to this Article may, and shall if required by the Trustee,
bear a notation in form approved by the Trustee as to any matter provided for in
such amendment. If the Company shall so determine, new CVR Certificates so
modified as to conform, in the opinion of the Trustee and the Board of
Directors, to any such amendment may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for CVR Certificates
representing Outstanding CVRs.
ARTICLE VII
COVENANTS
7.1 Payment of Amounts, if any, to Holders.
The Company will duly and punctually pay the CVR Payment, if any, in
the manner provided for in Sections 2.1(b) and 2.7 hereof and in accordance with
the terms of the CVRs and this Agreement.
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7.2 Maintenance of Office or Agency.
As long as any of the CVR Certificates remain Outstanding, the Company
will maintain an office or agency where CVR Certificates may be presented or
surrendered for payment. The Company also will maintain an office or agency (i)
where CVR Certificates may be surrendered for registration of transfer or
exchange and (ii) where notices and demands to or upon the Company in respect of
the CVRs and this Agreement may be served. The Company hereby initially
designates the office of the Trustee at the Corporate Trust Office, as the
office or agency of the Company where CVR Certificates may be presented for
payment, and such offices of the Trustee as the office or agency where CVR
Certificates may be surrendered for registration of transfer or exchange and
where such notices or demands may be served, in each case, unless the Company
shall designate and maintain some other office or agency for one or more of such
purposes. The Company will give prompt written notice to the Trustee of any
change in the location of any such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at such offices of the Trustee, and
the Company hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.
The Company may from time to time designate one or more other offices
or agencies (in or outside of the City of New York) where the CVR Certificates
may be presented or surrendered for any or all such purposes, and may from time
to time rescind such designation; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its obligations as set
forth in the preceding paragraph. The Company will give prompt written notice to
the Trustee of any such designation or rescission and any change in the location
of any such office or agency.
7.3 Money and Shares for CVR Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent, it will,
on or before the CVR Payment Date, segregate and hold in trust for the benefit
of the Persons entitled thereto an amount of Cash sufficient to pay the Cash
portion of the CVR Payment, if any, along with a number of Shares sufficient to
pay the Share portion of the CVR Payment, if any, so becoming due until such
amounts shall be paid to such Persons or otherwise disposed of as herein
provided, and will promptly notify the Trustee of its action or failure so to
act.
Whenever the Company shall have one or more Paying Agents, it will, on
or before the CVR Payment Date, deposit with a Paying Agent an amount in Cash in
same day funds and certificates representing the Shares sufficient to make the
CVR Payment, if any, so becoming due, such Cash and Shares to be held in trust
for the benefit of the Persons entitled to such amount, and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of such
action or any failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
(A) such Paying Agent will hold all sums held by it for the payment of any
amount payable on CVRs in trust for the benefit of the Persons entitled thereto
until such sums shall be paid to such Persons or otherwise disposed of as herein
provided and (B) that it will give the Trustee notice of any failure by the
Company (or by any other obligor on the CVRs) to make any payment on the CVRs
when the same shall be due and payable.
Any Cash or Shares deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment on any CVRs and remaining
unclaimed for two years after the CVR Payment Date shall be returned to the
Company on Company Request, or (if then held by the Company) shall be discharged
from such trust; and the Holder of such CVR shall thereafter, as an unsecured
general creditor, look only to the Company for payment thereof and all liability
of the Trustee or such Paying Agent with respect to such trust money shall
thereupon cease.
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7.4 Written Statement to Trustee.
The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year, a brief certificate from the principal executive officer,
principal financial officer or principal accounting officer of the Company as to
his or her knowledge of the Company's compliance with all conditions and
covenants under this Agreement. For purposes of this Section, such compliance
shall be determined without regard to any period of grace or requirement of
notice under this Agreement.
7.5 Available Shares.
If, at the time when a CVR Payment shall be payable in Shares, there
shall be an insufficient number of authorized but unissued Shares to make such
CVR Payment, the Company shall, within 30 calendar days after the relevant
Change of Control Consummation Date, call a stockholders' meeting for the
purpose of, and shall recommend to its stockholders at such meeting, the
adoption of an amendment to the Company's certificate of incorporation to
authorize the issuance of a sufficient number of Shares to make such CVR
Payment. Such stockholders' meeting shall be held as promptly as such meeting
may lawfully be held following such Change of Control Consummation Date. In such
case, the CVR Payment Date shall be the tenth calendar day after the date of
such stockholders' meeting or, if such tenth calendar day is not a Business Day,
then the first Business Day after such tenth calendar day.
ARTICLE VIII
REMEDIES OF THE TRUSTEE AND HOLDERS ON EVENT OF DEFAULT
8.1 Event of Default Defined.
"Event of Default" means any failure to make the CVR Payment, in the
amount, if any, required by this Agreement, on or before the CVR Payment Date,
which failure shall have occurred and be continuing (whatever the reason for
such Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body).
8.2 Collection of Indebtedness by Trustee; Trustee May Prove Debt.
The Company covenants that in case of the occurrence and continuation
of an Event of Default, the Company will pay to the Trustee for the benefit of
the Holders of the CVRs the whole amount, in Cash (or in Shares in the case of a
Qualified IPO), that then shall have become due and payable on all CVRs (with
interest from the CVR Payment Date and payable to the date of such payment upon
the overdue amount at the Default Interest Rate); and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including reasonable compensation to the Trustee and each
predecessor Trustee, their respective agents, attorneys and counsel, and any
expenses and liabilities incurred, and all advances made, by the Trustee and
each predecessor Trustee except as a result of its negligence or bad faith.
In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any action or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceedings to judgment or final decree, and may enforce any such
judgment or final decree against the Company or other obligor upon such CVRs and
collect in the manner provided by law out of the property of the Company or
other obligor upon such CVRs, wherever situated, the moneys adjudged or decreed
to be payable.
In case there shall be pending proceedings relative to the Company or
any other obligor upon the CVRs under Title 11 of the United States Code or any
other applicable Federal or State bankruptcy, insolvency or other similar law,
or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
29
taken possession of the Company or its property or such other obligor, or in
case of any other judicial proceedings relative to the Company or other obligor
upon the CVRs, or to the creditors or property of the Company or such other
obligor, the Trustee, irrespective of whether any CVR Payment shall then be due
and payable and irrespective of whether the Trustee shall have made any demand
pursuant to the provisions of this Section, shall be entitled and empowered, by
intervention in such proceedings or otherwise:
(a) to file and prove a claim or claims for the whole amount
owing and unpaid, if any, in respect of the CVRs, and to file such other papers
or documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for reasonable compensation to the Trustee and each
predecessor Trustee, and their respective agents, attorneys and counsel, and for
reimbursement of all expenses and liabilities incurred, and all advances made,
by the Trustee and each predecessor Trustee, except as a result of negligence or
bad faith) and of the Holders allowed in any judicial proceedings relative to
the Company or other obligor upon the CVRs, or to the creditors or property of
the Company or such other obligor;
(b) unless prohibited by applicable law and regulations, to
vote on behalf of the Holders in any election of a trustee or a standby trustee
in arrangement, reorganization, liquidation or other bankruptcy or insolvency
proceedings or Person performing similar functions in comparable proceedings;
and
(c) to collect and receive any moneys or other property
payable or deliverable on any such claims, and to distribute all amounts
receivable with respect to the claims of the Holders and of the Trustee on their
behalf and any trustee, receiver, or liquidator, custodian or other similar
official is hereby authorized by each of the Holders to make payments to the
Trustee, and, in the event that the Trustee shall consent to the making of
payments directly to the Holders, to pay to the Trustee such amounts as shall be
sufficient to cover reasonable compensation to the Trustee, each predecessor
Trustee and their respective agents, attorneys and counsel, and all other
expenses and liabilities incurred, and all advances made, by the Trustee and
each predecessor Trustee except as a result of negligence or bad faith and all
other amounts due to the Trustee or any predecessor Trustee pursuant to Section
4.6.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or vote for or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting the
CVRs or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding except, as aforesaid,
to vote for the election of a trustee in bankruptcy or similar Person.
All rights of action and of asserting claims under this Agreement, or
under any of the CVRs, may be enforced by the Trustee without the possession of
any of the CVR Certificates or the production thereof at any trial or other
proceedings relative thereto, and any such action or proceedings instituted by
the Trustee shall be brought in its own name as trustee of an express trust, and
any recovery of judgment, subject to the payment of the expenses, disbursements
and compensation of the Trustee, each predecessor Trustee and their respective
agents and attorneys, shall be for the ratable benefit of the Holders.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Agreement to which the
Trustee shall be a party) the Trustee shall be held to represent all the
Holders, and it shall not be necessary to make any Holders of such CVRs parties
to any such proceedings.
8.3 Application of Proceeds.
Any monies or securities collected by the Trustee pursuant to this
Article in respect of any CVRs shall be applied in the following order at the
date or dates fixed by the Trustee upon presentation of the several CVR
Certificates in respect of which monies have been collected and stamping (or
otherwise noting) thereon the payment in exchange for the presented CVR
Certificates if only partially paid or upon surrender thereof if fully paid:
30
FIRST: To the payment of costs and expenses in respect of which monies
have been collected, including reasonable compensation to the Trustee and each
predecessor Trustee and their respective agents and attorneys and of all
expenses and liabilities incurred, and all advances made, by the Trustee and
each predecessor Trustee except as a result of negligence or bad faith, and all
other amounts due to the Trustee or any predecessor Trustee pursuant to Section
4.6;
SECOND: To the payment of the whole amount then owing and unpaid upon
all the CVRs, with interest at the Default Interest Rate on all such amounts,
and in case such moneys shall be insufficient to pay in full the whole amount so
due and unpaid upon the CVRs, then to the payment of such amounts without
preference or priority of any CVR over any other CVR, ratably to the aggregate
of such amounts due and payable; and
THIRD: To the payment of the remainder, if any, to the Company or any
other person lawfully entitled thereto.
8.4 Suits for Enforcement.
In case an Event of Default has occurred, has not been waived and is
continuing, the Trustee may in its discretion proceed to protect and enforce the
rights vested in it by this Agreement by such appropriate judicial proceedings
as the Trustee shall deem most effectual to protect and enforce any of such
rights, either at law or in equity or in bankruptcy or otherwise, whether for
the specific enforcement of any covenant or agreement contained in this
Agreement or in aid of the exercise of any power granted in this Agreement or to
enforce any other legal or equitable right vested in the Trustee by this
Agreement or by law.
The Trustee is authorized to file such proofs of claim and other papers
or documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the CVRs allowed in any judicial proceedings relative to the Company
(or any other obligor upon the CVRs), its creditors or its property and shall be
entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
Trustee, and in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due to it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 4.6.
8.5 Restoration of Rights on Abandonment of Proceedings.
In case the Trustee shall have proceeded to enforce any right under
this Agreement and such proceedings shall have been discontinued or abandoned
for any reason, or shall have been determined adversely to the Trustee, then and
in every such case the Company and the Trustee shall be restored respectively to
their former positions and rights hereunder, and all rights, remedies and powers
of the Company, the Trustee and the Holders shall continue as though no such
proceedings had been taken.
8.6 Limitations on Suits by Holders.
No Holder of any CVR shall have any right by virtue or by availing
itself of any provision of this Agreement to institute any action or proceeding
at law or in equity or in bankruptcy or otherwise upon or under or with respect
to this Agreement, or for the appointment of a trustee, receiver, liquidator,
custodian or other similar official or for any other remedy hereunder, unless
such Holder previously shall have given to the Trustee written notice of default
and of the continuance thereof as hereinbefore provided, and unless also the
Holders of not less than 25% of the CVRs then Outstanding shall have made
written request upon the Trustee to institute such action or proceedings in its
own name as trustee hereunder and shall have offered to the Trustee such
31
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby and the Trustee for 30 days after
its receipt of such notice, request and offer of indemnity shall have failed to
institute any such action or proceeding and no direction inconsistent with such
written request shall have been given to the Trustee pursuant to Section 8.9; it
being understood and intended, and being expressly covenanted by the taker and
Holder of every CVR with every other taker and Holder and the Trustee, that no
one or more Holders of CVRs shall have any right in any manner whatever by
virtue or by availing itself or themselves of any provision of this Agreement to
effect, disturb or prejudice the rights of any other such Holder of CVRs, or to
obtain or seek to obtain priority over or preference to any other such Holder or
to enforce any right under this Agreement, except in the manner herein provided
and for the equal, ratable and common benefit of all Holders of CVRs. For the
protection and enforcement of the provisions of this Section, each and every
Holder and the Trustee shall be entitled to such relief as can be given either
at law or in equity.
8.7 Unconditional Right of Holders to Institute Certain Suits.
Notwithstanding any other provision in this Agreement and any provision
of any CVR Certificate, the right of any Holder of any CVR to receive payment in
Cash or Shares of the amounts, if any, payable in respect of such CVR on or
after the CVR Payment Date, or to institute suit for the enforcement of any such
payment on or after such date, shall not be impaired or affected without the
consent of such Holder.
8.8 Powers and Remedies Cumulative; Delay or Omission Not Waiver of
Default.
Except as provided in Section 8.6, no right or remedy herein conferred
upon or reserved to the Trustee or to the Holders is intended to be exclusive of
any other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
No delay or omission of the Trustee or of any Holder to exercise any
right or power accruing upon any Event of Default occurring and continuing as
aforesaid shall impair any such right or power or shall be construed to be a
waiver of any such Event of Default or an acquiescence therein; and, subject to
Section 8.6, every power and remedy given by this Agreement or by law to the
Trustee or to the Holders may be exercised from time to time, and as often as
shall be deemed expedient, by the Trustee or by the Holders.
8.9 Control by Holders.
The Holders of a majority of the CVRs at the time Outstanding shall
have the right to direct the time, method, and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee with respect to the CVRs by this Agreement;
provided that such direction shall not be otherwise than in accordance with law
and the provisions of this Agreement; and provided further that (subject to the
provisions of Section 4.1) the Trustee shall have the right to decline to follow
any such direction if the Trustee, being advised by counsel, shall determine
that the action or proceeding so directed may not lawfully be taken or if the
Trustee in good faith by its board of directors, the executive committee, or a
trust committee of directors or Responsible Officers of the Trustee shall
determine that the action or proceedings so directed would involve the Trustee
in personal liability or if the Trustee in good faith shall so determine that
the actions or forbearances specified in or pursuant to such direction would be
unduly prejudicial to the interests of Holders of the CVRs not joining in the
giving of said direction, it being understood that (subject to Section 4.1) the
Trustee shall have no duty to ascertain whether or not such actions or
forbearances are unduly prejudicial to such Holders.
Nothing in this Agreement shall impair the right of the Trustee in its
discretion to take any action deemed proper by the Trustee and which is not
inconsistent with such direction or directions by Holders.
32
The Holders of a majority of the CVRs at the time Outstanding by
written notice to the Trustee may on behalf of the Holders of all of the CVRs
waive an existing default and its consequences hereunder, except a continuing
default in the payment of the CVR Payment or interest on the CVRs. Upon any such
waiver, such default shall cease to exist, and any default arising therefrom
shall be deemed to have been cured for every purpose of this Indenture; but no
such waiver shall extend to any subsequent or other default or impair any right
consequent thereon.
8.10 Trustee to Give Notice of Default, but May Withhold in Certain
Circumstances.
The Trustee shall transmit to the Holders, as the names and addresses
of such Holders appear on the Security Register, notice by mail of all defaults
which have occurred, such notice to be transmitted within 45 days after the
occurrence thereof unless such defaults shall have been cured before the giving
of such notice.
8.11 Right of Court to Require Filing of Undertaking to Pay Costs.
All parties to this Agreement agree, and each Holder of any CVR by such
Holder's acceptance thereof shall be deemed to have agreed, that any court may
in its discretion require, in any suit for the enforcement of any right or
remedy under this Agreement or in any suit against the Trustee for any action
taken, suffered or omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the merits
and good faith or the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder or group of Holders holding in the
aggregate more than 10% of the CVRs Outstanding or to any suit instituted by any
Holder for the enforcement of the payment of any CVR on or after the due date
expressed in such CVR.
ARTICLE IX
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
9.1 Company May Consolidate, Etc.
The Company shall not consolidate with or merge with or into any other
Person or convey, transfer or lease its properties and assets substantially as
an entirety to any Person, unless:
(a) in case the Company shall consolidate with or merge with
or into any other Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person (if such event is not a Change of
Control), the Person formed by such consolidation or into which the Company is
merged or the Person which acquires by conveyance or transfer, or which leases,
the properties and assets of the Company substantially as an entirety (the
"Surviving Person") shall be a corporation, partnership or trust organized and
existing under the laws of the United States of America, any state thereof or
the District of Columbia and shall expressly assume payment of amounts on all
the CVRs and the performance of every covenant of this Agreement on the part of
the Company to be performed or observed;
(b) immediately after giving effect to such transaction, no
Event of Default shall have happened and be continuing; and
(c) the Company has delivered to the Trustee an Officer's
Certificate stating that such consolidation, merger, conveyance, transfer or
lease complies with this Article and that all conditions precedent herein
provided for relating to such transaction have been complied with.
9.2 Successor Substituted.
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Upon any consolidation of or merger by the Company with or into any
other Person, or any conveyance, transfer or lease of the properties and assets
substantially as an entirety to any Person in accordance with Section 9.1, the
Surviving Person shall succeed to, and be substituted for, and may exercise
every right and power of, the Company under this Agreement with the same effect
as if the Surviving Person had been named as the Company herein, and thereafter,
the predecessor corporation shall be relieved of all obligations and covenants
under this Agreement and the CVRs.
9.3 Opinion of Counsel to Trustee.
The Trustee, subject to the provisions of Sections 4.1 and 4.2, may
receive an Opinion of Counsel, prepared in accordance with Sections 1.2 and 1.3,
as conclusive evidence that any such consolidation, merger, sale, lease or
conveyance, and any such assumption, and any such liquidation or dissolution,
complies with the applicable provisions of this Agreement.
ARTICLE X
DISCHARGE OF AGREEMENT
10.1 Discharge of Liability on CVRs.
When (i) the Company delivers to the Trustee all outstanding CVR
Certificates (other than CVR Certificates replaced pursuant to Section 2.6) for
cancellation, (ii) all outstanding CVRs have become due and payable and the
Company irrevocably deposits with the Trustee or the Paying Agent (if the Paying
Agent is not the Company or any of its Affiliates) cash sufficient to pay all
Cash amounts or Shares due and owing on all outstanding CVRs (other than CVRs
replaced pursuant to Section 2.6 or CVRs held by the Company or any Affiliate
thereof), or (iii) the Initial Change of Control is consummated and no CVR
Payment is due in accordance with the terms of this Agreement, then this
Agreement shall, subject to Section 4.6, cease to be of further effect. The
Trustee shall join in the execution of a document prepared by the Company
acknowledging satisfaction and discharge of this Agreement on demand of the
Company accompanied by an Officer's Certificate and Opinion of Counsel and at
the cost and expense of the Company.
10.2 Repayment to the Company.
The Trustee and the Paying Agent shall return to the Company upon
written request any money or securities held by them for the payment of any
amount with respect to the CVRs that remains unclaimed for two years, subject to
applicable unclaimed property law. After return to the Company, Holders entitled
to the money or securities must look to the Company for payment as general
creditors unless an applicable abandoned property law designates another person
and the Trustee and the Paying Agent shall have no further liability to the
Holders with respect to such money or securities for that period commencing
after the return thereof.
10.3 Counterparts.
This Agreement may be signed in any number of counterparts with the
same effect as if the signatures to each counterpart were upon a single
instrument, and all such counterparts together shall be deemed an original of
this Agreement.
[The remainder of this page is intentionally left blank.]
34
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
▇▇▇▇▇▇ NUTRITIONALS HOLDINGS, INC.
By:
-----------------------------------
Name:
Title
[TRUSTEE]
By:
-----------------------------------
Name:
Title:
EXHIBIT A
FORM OF LEGEND FOR BOOK-ENTRY GLOBAL SECURITIES
Any Global Security authenticated and delivered hereunder shall bear a legend in
substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE CONTINGENT VALUE
RIGHTS AGREEMENT (THE "AGREEMENT") HEREINAFTER REFERRED TO AND IS REGISTERED IN
THE NAME OF THE TRUSTEE OR A NOMINEE OF THE TRUSTEE OR A SUCCESSOR TRUSTEE FOR
THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF. THIS SECURITY IS NOT EXCHANGEABLE
FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE TRUSTEE OR ITS
NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE AGREEMENT, AND NO
TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY
THE TRUSTEE TO A NOMINEE OF THE TRUSTEE OR BY A NOMINEE OF THE TRUSTEE TO THE
TRUSTEE OR ANOTHER NOMINEE OF THE TRUSTEE) MAY BE REGISTERED EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE AGREEMENT.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
TRUSTEE TO A NOMINEE OF THE TRUSTEE OR BY A NOMINEE OF THE TRUSTEE TO THE
TRUSTEE OR ANOTHER NOMINEE OF THE TRUSTEE OR BY THE TRUSTEE OR ANY SUCH NOMINEE
TO A SUCCESSOR TRUSTEE OR A NOMINEE OF SUCH SUCCESSOR TRUSTEE. UNLESS THIS
SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE TRUSTEE TO THE
ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF TRUSTEE OR IN SUCH OTHER NAME AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF TRUSTEE (AND ANY PAYMENT IS MADE
TO TRUSTEE. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF TRUSTEE), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, THE TRUSTEE, HAS AN INTEREST HEREIN.
