CONTINGENT VALUE RIGHTS AGREEMENT
Exhibit 10.1
This CONTINGENT VALUE RIGHTS AGREEMENT, dated as of [ • ], 2009 (this “Agreement”),
is entered into by and among Cambium Holdings, Inc., a Delaware corporation (“Holdco”),
Vowel Representative, LLC, a Delaware limited liability company, solely in its capacity as
stockholders’ representative (in such capacity, the “Stockholders’ Representative”), and
Xxxxx Fargo Bank, National Association, as rights agent (the “Rights Agent”) and as initial
CVR Registrar (as defined herein).
WITNESSETH:
WHEREAS, Holdco, Voyager Learning Company, a Delaware corporation (“Vowel”),
VSS-Cambium Holdings II Corp., a Delaware corporation, Vowel Acquisition Corp. (“Vowel Merger
Sub”), Consonant Acquisition Corp. (“Consonant Merger Sub”), each, a Delaware
corporation and wholly-owned subsidiary of Holdco, and the Stockholders’ Representative, have
entered into an Agreement and Plan of Mergers (as the same may be amended, modified or supplemented
from time to time, the “Merger Agreement”), dated as of June 20, 2009, pursuant to which,
among other things, Vowel Merger Sub will merge with and into Vowel (the “Vowel Merger”),
with Vowel surviving the Vowel Merger, as a wholly-owned subsidiary of Holdco, and Consonant Merger
Sub will merge with and into Consonant (the “Consonant Merger”), with Consonant surviving
the Consonant Merger, as a wholly-owned subsidiary of Holdco;
WHEREAS, pursuant to the Merger Agreement, Holdco agreed to create and issue to holders of
record of shares of Vowel’s common stock, par value $0.001 per share (“Vowel Common
Stock”), outstanding immediately prior to the effective time of the Vowel Merger (the
“Effective Time”), contingent value rights as hereinafter described;
WHEREAS, each holder of Vowel Common Stock immediately prior to the Effective Time, will
receive, among other things, as merger consideration, the right to receive upon the Effective Time
one contingent value right for each share of Vowel Common Stock held by such Person (as defined in
below) immediately prior to the Effective Time; and
WHEREAS, the parties have done all things necessary to make the contingent value rights, when
issued pursuant to the Merger Agreement and hereunder, the valid obligations of Holdco and to make
this Agreement a valid and binding agreement of Holdco, in accordance with its terms.
WHEREAS, the parties hereto acknowledge that the Rights Agent is not party to, is not bound
by, and has no duties or obligations under, the Merger Agreement, that all references in this
Agreement to the Merger Agreement are for convenience, and that the Rights Agent shall have no
implied duties beyond the express duties set forth in this Agreement.
NOW, THEREFORE, for and in consideration of the premises and the consummation of the
transactions referred to above, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders (as hereinafter defined), as follows:
ARTICLE I
DEFINITIONS
DEFINITIONS
Section 1.1 Definitions.
(a) For all purposes of this Agreement, except as otherwise expressly provided or unless the
context otherwise requires:
(i) the terms defined in this Article I have the meanings assigned to
them in this Article I, and include the plural as well as the singular;
(ii) all accounting terms used herein and not expressly defined herein shall
have the meanings assigned to such terms in accordance with United States generally
accepted accounting principles, as in effect on the date hereof;
(iii) 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;
(iv) unless the context otherwise requires, words describing the singular
number shall include the plural and vice versa, words denoting any gender shall
include all genders and words denoting natural Persons shall include corporations,
partnerships and other Persons and vice versa; and
(v) all references to “including” shall be deemed to mean including without
limitation.
(b) Capitalized terms used but not otherwise defined herein shall have the meanings ascribed
thereto in the Merger Agreement. The following terms shall have the meanings ascribed to them as
follows:
“280G Returned Amount” has the meaning set forth in the Escrow Agreement.
“280G Termination Date” has the meaning set forth in the Escrow Agreement.
“Board of Directors” means the board of directors of Holdco.
“Board Resolution” means a copy of a resolution certified by the secretary or an
assistant secretary of Holdco 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 Rights Agent.
“Business Day” means any day that is not a Saturday, Sunday, legal holiday or other
day on which commercial banks in New York, New York are authorized or required by Law to close.
“Code” means the U.S. Internal Revenue Code of 1986, as amended, including any
successor provisions and transition rules, whether or not codified.
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“CVR Escrow Fund” has the meaning ascribed thereto in the Escrow Agreement.
“CVR Payment Amount” means any of the First CVR Payment Amount, the Second CVR Payment
Amount, the 280G Returned Amount, or the Subsequent CVR Payment Amount, as applicable, or any other
amounts paid to the Rights Agent by the Escrow Agent under the Escrow Agreement.
“CVR Payment Date” means, with respect to a CVR Payment Amount, the date that the
Rights Agent pays such CVR Payment Amount pursuant to Section 2.4.
“CVR Payment Event Date” means any of the First CVR Payment Event Date, the Second CVR
Payment Event Date, the Subsequent CVR Payment Event Date, the 280G Termination Date, or such other
date a CVR Payment Amount is received by the Rights Agent, as applicable.
“CVR Register” has the meaning set forth in Section 2.3(b).
“CVR Registrar” has the meaning set forth in Section 2.3(b).
“CVRs” means the contingent value rights issued by Holdco pursuant to the Merger
Agreement and this Agreement.
“Effective Time” has the meaning set forth in the Recitals.
“Escrow Agent” Xxxxx Fargo Bank, National Association, in its capacity as escrow agent
under the Escrow Agreement (or any successor escrow agent thereunder).
“Escrow Agreement” means that certain Escrow Agreement, dated as [ • ], 2009, entered
into by and among the Escrow Agent, the Stockholders’ Representative, Holdco, and Xxxxxxx Xxxxxxx,
as the same may be amended, supplemented or otherwise modified from time to time in accordance with
its terms.
“Escrow Funds” has the meaning set forth in the Escrow Agreement.
“First CVR Payment Amount” means the amount, if any, received from the Escrow Agent in
respect of the First CVR Payment Amount (as defined in the Escrow Agreement).
“First CVR Payment Event Date” has the meaning set forth in the Escrow Agreement.
“Governmental Authority” means any government, state, province or other political
subdivision thereof, any entity exercising executive, legislative, judicial, regulatory or
administration functions of or pertaining to government, or any government authority, agency,
department, board, tribunal, commission or instrumentality of the United State of America, any
foreign government, any state of the United States of America, or any municipality or other
political subdivision thereof, and any court, tribunal or arbitrators of competent jurisdiction,
and any governmental or non governmental self regulatory organization, agency or authority.
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“Holder” means a Person in whose name a CVR is registered in the CVR Register.
“Officer’s Certificate” means a certificate signed by the chief executive officer,
president, chief financial officer, any vice president, the controller, the treasurer or the
secretary, in each case of Holdco, in his or her capacity as such an officer, and delivered to the
Rights Agent.
“Permitted Transfer” means: (i) the transfer of any or all of the CVRs (upon the
death of the Holder) by will or intestacy; (ii) transfer by instrument to an inter vivos or
testamentary trust in which the CVRs are to be passed to beneficiaries upon the death of the
trustee; (iii) transfers made pursuant to a court order of a court of competent jurisdiction (such
as in connection with divorce, bankruptcy or liquidation); (iv) if the Holder is a partnership or
limited liability company, a distribution by the transferring partnership or limited liability
company to its partners or members, as applicable; or (v) a transfer made by operation of law
(including a consolidation or merger) or in connection with the dissolution, liquidation or
termination of any corporation, limited liability company, partnership or other entity.
“Person” means an individual, corporation, partnership, limited liability company,
association, trust, unincorporated organization, or other entity or any Governmental Authority.
“Pro Rata Share” means, with respect to any Holder as of a given CVR Payment Event
Date, the quotient of the (x) sum of all of the CVRs held of record by such Holder on such date
divided by (y) the total number of CVRs outstanding as of such date.
“Rights Agent” means the Rights Agent named in the first paragraph of this Agreement,
until a successor Rights Agent shall have become such pursuant to the applicable provisions of this
Agreement, and thereafter “Rights Agent” shall mean such successor Rights Agent.
“Rights Agent Costs” means the costs and expenses for which the Rights Agent is due
reimbursement under Section 3.2 and the Rights Agent Fee.
“Rights Agent Fee” means the fee of the Rights Agent to act in such capacity pursuant
to the terms of this Agreement as set forth on Schedule 1 hereto.
“Rights Agent Initial Payment” means the costs and expenses reasonably incurred and
invoiced by the Rights Agent prior to the Effective Time in connection with the negotiation of this
Agreement and any other reasonable costs and expenses incurred by the Rights Agent in connection
herewith prior to the Effective Time.
“Second CVR Payment Amount” means the amount, if any, received from the Escrow Agent
in respect of the Second CVR Payment Amount (as defined in the Escrow Agreement).
“Second CVR Payment Event Date” has the meaning set forth in the Escrow Agreement.
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“Stockholders’ Representative” has the meaning set forth in the Preamble.
“Subsequent CVR Payment Amount” means the amount, if any, received from the Escrow
Agent in respect of the Subsequent CVR Payment Amount (as defined in the Escrow Agreement).
“Subsequent CVR Payment Event Date” means the date on which a Subsequent CVR Payment
Amount is paid to the Rights Agent.
“Subsidiary” means any corporation, partnership, joint venture or other legal entity
of which any Person (either alone or through or together with an other Subsidiary), owns, directly
or indirectly, more than 50% of the stock or other equity interests the holders of which are
generally entitled to vote for the election of the board of directors or other governing body of
such corporation or other legal entity.
“Surviving Person” has the meaning set forth in Section 6.1(a)(i).
“Tax” means any and all taxes payable to any federal, state, local or foreign taxing
authority or agency, including (a) income, franchise, profits, gross receipts, minimum, alternative
minimum, estimated, ad valorem, value added, sales, use, service, real or personal property,
capital stock, license, payroll, withholding, disability, employment, social security, workers
compensation, unemployment, utility, severance, excise, stamp, windfall profits, transfer or other
tax of any kind whatsoever, (b) interest thereon and (c) penalties and additions to tax imposed
with respect thereto.
ARTICLE II
CONTINGENT VALUE RIGHTS
CONTINGENT VALUE RIGHTS
Section 2.1 Issuance of CVRs; Appointment of Rights Agent.
(a) The CVRs shall be issued pursuant to the Merger Agreement at the time and in the manner
set forth in the Merger Agreement. The Registrar and Administration of the CVRs shall be handled
pursuant to this Agreement in the manner set forth in this Agreement.
(b) Holdco hereby appoints Xxxxx Fargo Bank, National Association as the Rights Agent to act
as rights agent for Holdco in accordance with the instructions hereinafter set forth in this
Agreement, and the Rights Agent hereby accepts such appointment.
Section 2.2 Nontransferable.
The CVRs shall not be sold, assigned, transferred, pledged, encumbered or in any other manner
transferred or disposed of, in whole or in part, other than through a Permitted Transfer.
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Section 2.3 No Certificate; Registration; Registration of Transfer; Change of
Address.
(a) The CVRs shall not be evidenced by a certificate or other instrument.
(b) The Rights Agent shall keep a register (the “CVR Register”) for the registration
of CVRs in a book-entry position for each CVR Holder. The CVR Register shall set forth the name
and address of each Holder, and the number of CVRs held by such Holder and Tax Identification
Number of each Holder. Each of Holdco and the Stockholders’ Representative may receive and inspect
a copy of the CVR Register, from time to time, upon written request made to the CVR Registrar.
Within five (5) Business Days after receipt of such request, the CVR Registrar shall deliver a copy
of the CVR Registrar, as then in effect, to Holdco and the Stockholders’ Representative at the
address set forth in Section 7.1. The Rights Agent is hereby initially appointed “CVR Registrar” for
the purpose of registering CVRs and transfers of CVRs as herein provided.
(c) Subject to the restriction on transferability set forth in Section 2.2, every request made
to transfer a CVR must be in writing and accompanied by a written instrument or instruments of
transfer and any other requested documentation in form reasonably satisfactory to Holdco and the
CVR Registrar, duly executed by the registered Holder or Holders thereof or by the duly appointed
legal representative thereof or by a duly authorized attorney, such signature to be guaranteed by a
participant in a recognized Signature Guarantee Medallion Program. A request for a transfer of a
CVR shall be accompanied by such documentation establishing satisfaction that the transfer is a
Permitted Transfer as may be reasonably requested by Holdco and the CVR Registrar (including
opinions of counsel, if appropriate). Upon receipt of such written notice, the CVR Registrar
shall, subject to its reasonable determination that the transfer instrument is in proper form and
the transfer otherwise complies with the other terms and conditions herein, register the transfer
of the CVRs in the CVR Register. All duly transferred CVRs registered in the CVR Register shall be
the valid obligations of Holdco, evidencing the same rights and entitling the transferee to the
same benefits and rights under this Agreement as those held by the transferor. No transfer of a
CVR shall be valid until registered in the CVR Register, and any transfer not duly registered in
the CVR Register will be void ab initio. Any transfer or assignment of the CVRs shall be without
charge (other than the cost of any transfer Tax which shall be the responsibility of the
transferor) to the Holder.
(d) A Holder may make a written request to the CVR Registrar to change such Holder’s address
of record in the CVR Register. The written request must be duly executed by the Holder. Upon
receipt of such written notice, the CVR Registrar shall promptly record the change of address in
the CVR Register.
(e) The Stockholders’ Representative may make a written request to the Rights Agent for a list
containing the names, addresses and number of CVRs of the Holders that are registered in the CVR
Register. Within five (5) Business Days following the date of receipt by the Rights Agent of such
request, the CVR Registrar shall deliver a copy of such list to the Stockholders’ Representative.
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Section 2.4 Payment Procedures.
(a) Within five (5) Business Days after its receipt of any CVR Payment Amount, the Rights
Agent shall deliver to each Holder its Pro Rata Share of the applicable CVR Payment Amount based on
the number of CVRs held by such Holder at the close of business as reflected on the CVR Register on
the applicable CVR Payment Event Date (x) by check mailed to the address of each Holder (or any
successor or permitted transferee or assignee thereof) as reflected in the CVR Register as of the
close of business on the day that is two (2) Business Days prior to the date that the Rights Agent
performs its obligations under this Section 2.4, or, (y) with respect to any Holder that is
due payment pursuant to this Agreement in excess of $1,000,000 whose bank information has been
provided to the Escrow Agent within Payment Notices (as defined in the Escrow Agreement) delivered
by the Stockholder’s Representative with wire transfer instructions on or prior to the date
referred to in immediately preceding clause (x) above, by wire transfer of immediately available
funds to such account. Subsequent payments will require new wire instructions be provided within
each Payment Notice received by the Escrow Agent.
(b) The Rights Agent shall deduct and withhold, or cause to be deducted or withheld, from each
CVR Payment Amount otherwise payable pursuant to this Agreement, the amounts, if any, that Holdco
or the applicable subsidiary of Holdco is required to deduct and withhold with respect to the
making of such payment under the Code; provided that in determining the required amount to be
withheld, the Rights Agent will give effect to any properly presented form (e.g., Form W-8 or W-9
as applicable) eliminating or reducing the amount required to be withheld. To the extent that
amounts are so withheld or paid over to or deposited with the relevant Governmental Authority, such
withheld amounts shall be treated for all purposes of this Agreement as having been paid to the
Holder in respect of which such deduction and withholding was made.
(c) Tax Reporting for Payments made pursuant to Payment Notices received by the Escrow Agent
under this Agreement will be reported to the Internal Revenue Service on Tax Form 1099B or 1099INT,
as applicable.
Section 2.5 No Voting, Dividends or Interest; No Equity or Ownership Interest in Holdco.
(a) The CVRs shall not have any voting or dividend rights, and interest shall not accrue on
any amounts payable on the CVRs to any Holder.
(b) The CVRs shall not represent any equity or ownership interest in Holdco or in any
constituent company to the Vowel Merger.
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ARTICLE III
THE RIGHTS AGENT
THE RIGHTS AGENT
Section 3.1 Certain Duties and Responsibilities.
The Rights Agent shall not have any liability for any actions taken or not taken in connection
with this Agreement, except to the extent of its willful misconduct, bad faith or gross negligence.
No provision of this Agreement shall require the Rights Agent 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.
Section 3.2 Certain Rights of Rights Agent.
The Rights Agent 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 Rights Agent. In addition:
(a) the Rights Agent 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 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) whenever the Rights Agent shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the Rights Agent may, in the absence
of willful misconduct, faith or gross negligence on its part, rely upon an Officer’s Certificate;
(c) the Rights Agent may consult with, and obtain advice from, legal counsel in the event of
any question as to any of the provisions hereof or the duties hereunder, and it shall incur no
liability and shall be deemed to be acting in accordance with the opinion and instructions of such
counsel. The reasonable costs of such counsel’s services shall be paid to the Rights Agent in
accordance with Section 3.2(h) below. The Rights Agent may perform any and all of its
duties through its agents, representatives, attorneys, custodians, and/or nominees.
(d) if the Rights Agent becomes involved in litigation on account of this Agreement, it shall
have the right to retain counsel and shall be entitled to reimbursement for all reasonable
documented costs and expenses related thereto as provided in Sections 3.2(h) and
3.2(d) hereof; provided, however, that the Rights Agent shall not be entitled to
any such reimbursement to the extent such litigation ultimately determines that the Rights Agent
acted with gross negligence or willful misconduct. In the event that conflicting demands are made
upon the Rights Agent for any situation addressed or not addressed in this Agreement, the Rights
Agent may withhold performance of the terms of this Agreement until such time as said conflicting
demands shall have been withdrawn or the rights of the respective parties shall have been settled
by court adjudication, arbitration, joint order or otherwise.
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(e) the permissive rights of the Rights Agent to do things enumerated in this
Agreement shall not be construed as a duty;
(f) the Rights Agent shall not be required to give any note or surety in respect of the
execution of such powers or otherwise in respect of the premises; and
(g) Holdco agrees to indemnify the Rights Agent for, and hold the Rights Agent harmless
against, any loss, liability, claim, demands, suits or expense arising out of or in connection with
the Rights Agent’s duties under this Agreement, including the costs and expenses of defending the
Rights Agent against any claims, charges, demands, suits or loss, unless such loss shall have been
determined by a court of competent jurisdiction to be a result of the Rights Agent’s willful
misconduct, bad faith or gross negligence, provided, however, that the Rights
Agent’s aggregate liability with respect to, arising from, or arising in connection with this
Agreement, or from all services provided or omitted to be provided under this Agreement, whether in
contract, in tort, or otherwise, is limited to, and shall not exceed, the amounts paid hereunder by
Holdco to the Rights Agent as fees and charges, but not including reimbursable expenses;
provided, further, however, 50% of any amounts payable by Holdco under this
Section 3.2(g) shall be reimbursed to Holdco out of the CVR Escrow Fund; and
(h) Holdco, on the one hand, and the Stockholders’ Representative, on behalf of the Holders,
on the other hand, shall each be responsible for paying 50% of the Rights Agent Costs and the
Rights Agent Initial Payment, the portion of which with respect to the Holders, shall be payable
from the CVR Escrow Fund. Notwithstanding the foregoing and solely for the benefit of the Rights
Agent, Holdco and the Stockholders’ Representative, on behalf of the Holders, agrees (i) to equally
pay the fees and expenses of the Rights Agent in connection with this Agreement, as set forth on
Schedule 1 hereto, and (ii) to equally reimburse the Rights Agent for all taxes and
governmental charges, reasonable expenses and other charges of any kind and nature incurred by the
Rights Agent in the execution of this Agreement (other than taxes measured by the Rights Agent’s
net income). The Rights Agent shall also be entitled to reimbursement from Holdco and the
Stockholders’ Representative, on behalf of the Holders, on an equal basis for all reasonable and
necessary out-of-pocket expenses (including reasonable fees and expenses of the Rights Agent’s
counsel and agent) paid or incurred by it in connection with the administration by the Rights Agent
of its duties hereunder. An invoice for the Rights Agent Fee (prorated for the period of time from
the previous payment of the Rights Agent Fee, if applicable) will be rendered a reasonable time
prior to, and paid on, the date upon which the Effective Time occurs and each CVR Payment Date. An
invoice for any out-of-pocket expenses and per item fees realized will be rendered and payable
within thirty (30) days after receipt by Holdco and the Stockholders’ Representative, except for
postage and mailing expenses, which funds must be received one (1) Business Day prior to the
scheduled mailing date. Each of Holdco and the Stockholders’ Representative, on behalf of the
Holders, on an equal basis, agrees to pay to the Rights Agent any amounts, including fees and
expenses, payable in favor of the Rights Agent in connection with any dispute, resolution or
arbitration arising under or in connection with this Agreement. Notwithstanding anything in this
Agreement to the contrary, the portion of any payment under this Section 3.2(h) which is payable by the
Stockholders’ Representative shall be paid to the Rights Agent solely by the Rights Agent deducting
such payment from any then unpaid CVR Payment Amount.
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Section 3.3 Resignation and Removal; Appointment of Successor.
(a) The Rights Agent may resign at any time by giving written notice thereof to Holdco and the
Stockholders’ Representative specifying a date when such resignation shall take effect, which
notice shall be sent at least thirty (30) days prior to the date so specified.
(b) If the Rights Agent shall resign, be removed or become incapable of acting, Holdco, by way
of a Board Resolution, shall promptly appoint a qualified successor Rights Agent who shall be
reasonably acceptable to the Stockholders’ Representative. The successor Rights Agent so appointed
shall, forthwith upon its acceptance of such appointment in accordance with this Section
3.3(b), become the successor Rights Agent.
(c) Holdco shall give notice of each resignation and each removal of a Rights Agent and each
appointment of a successor Rights Agent by mailing written notice of such event by first-class
mail, postage prepaid, to Stockholders’ Representative and to the Holders as their names and
addresses appear in the CVR Register. Each notice shall include the name and address of the
successor Rights Agent. If Holdco fails to send such notice within ten days after acceptance of
appointment by a successor Rights Agent, the successor Rights Agent shall cause such notice to be
mailed at the expense of Holdco.
(d) If a successor Rights Agent has not been appointed and has not accepted such appointment
by the end of the 30-calendar day period, the Rights Agent may apply to a court of competent
jurisdiction for the appointment of a successor Rights Agent, and the costs, expenses and
reasonable attorneys’ fees which are incurred in connection with such a proceeding shall be paid in
accordance with Section 3.2(h) hereof. Any such successor to the Rights Agent shall agree
to be bound by the terms of this Agreement and shall, upon receipt of the all relevant books and
records relating thereto, become the Rights Agent hereunder. Upon delivery of all of the relevant
books and records, pursuant to the terms of this Section 3.3(d) to a successor Rights
Agent, the Rights Agent shall thereafter be discharged from any further obligations hereunder. The
Rights Agent is hereby authorized, in any and all events, to comply with and obey any and all final
judgments, orders and decrees of any court of competent jurisdiction which may be filed, entered or
issued, and all final arbitration awards and, if it shall so comply or obey, it shall not be liable
to any other person by reason of such compliance or obedience.
ARTICLE IV
COVENANTS
COVENANTS
Section 4.1 List of Holders.
Holdco shall furnish or cause to be furnished to the Rights Agent in such form as Holdco
receives from its transfer agent or from Vowel’s transfer agent prior to the Effective Time (or
other agent performing similar services for Holdco or Vowel), the names, addresses,
shareholdings and tax certification (T.I.N.) of the record holders of Vowel Common Stock within
sixty (60) days after the Effective Time.
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Section 4.2 Payment of CVR Payment Amount.
Each of the Stockholders’ Representative and Holdco shall use reasonable best efforts to cause
the Rights Agent to pay the CVR Payment Amount upon its receipt thereof from the CVR Escrow Fund
provided by the Escrow Agent in the manner provided for in Sections 2.4 and in accordance with the
terms of this Agreement.
Section 4.3 Ability to Make Prompt Payment.
Neither Holdco nor any of its Subsidiaries shall enter into any agreement that would prohibit
or restrict the Rights Agent’s ability to pay the CVR Payment Amount to the Holders under this
Agreement.
Section 4.4 Assignment.
Holdco shall not, in whole or in part, assign any of its rights or obligations under this
Agreement other than in accordance with the terms of Section 6.1 hereof.
ARTICLE V
AMENDMENTS
AMENDMENTS
Section 5.1 Amendments Without Consent of Holders or Stockholders’ Representative.
(a) Without the consent of any Holders, the Stockholders’ Representative or the Rights Agent,
Holdco, when authorized by a Board Resolution, at any time and from time to time, may enter into
one or more amendments hereto, for any of the following purposes:
(i) to evidence the succession of another Person to Holdco and the assumption
by any such successor of the covenants of Holdco herein in a transaction
contemplated by Section 6.1 hereof; or
(ii) to evidence the termination of the CVR Registrar and the succession of
another Person as a successor CVR Registrar and the assumption by any successor of
the obligations of the CVR Registrar herein.
(b) Without the consent of any Holders or the Stockholders’ Representative, Holdco, when
authorized by a Board Resolution, and the Rights Agent, in the Rights Agent’s sole and absolute
discretion, at any time and from time to time, may enter into one or more amendments hereto, for
any of the following purposes:
(i) to evidence the succession of another Person as a successor Rights Agent
and the assumption by any successor of the covenants and obligations of the Rights
Agent herein;
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(ii) to add to the covenants of Holdco such further covenants,
restrictions, conditions or provisions as the Board of Directors and the Rights
Agent shall consider to be for the protection of the Holders; provided, that
in each case, such provisions shall not adversely affect the interests of the
Holders;
(iii) to cure any ambiguity, to correct or supplement any provision herein that
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
(iv) to add, eliminate or change any provision of this Agreement (other than
Section 2.4) unless such addition, elimination or change is adverse to the interests
of the Holders.
(c) Promptly after the execution by Holdco and the Rights Agent of any amendment pursuant to
the provisions of this Section 5.1, Holdco shall mail a notice thereof by first-class mail to the
Stockholders’ Representative and each of the Holders at their addresses as they shall appear on the
CVR Register, setting forth in general terms the substance of such amendment.
Section 5.2 Amendments With Consent of the Stockholders’ Representative.
(a) Subject to Section 5.1 (which amendments pursuant to Section 5.1 may be made without the
consent of the Holders or the Stockholders’ Representative), with the consent of the Stockholders’
Representative (which may be granted or withheld in its sole discretion), acting on behalf of the
Holders, Holdco, when authorized by a Board Resolution, and the Rights Agent may enter into one or
more amendments hereto for the purpose of adding, eliminating or changing any provisions of this
Agreement, even if such addition, elimination or change is in any way adverse to the interests of
the Holders.
(b) Promptly after the execution by Holdco and the Rights Agent of any amendment pursuant to
the provisions of this Section 5.2, Holdco shall mail a notice thereof by first-class mail to the
Stockholders’ Representative and the Holders at their addresses as they shall appear on the CVR
Register, setting forth in general terms the substance of such amendment.
Section 5.3 Execution of Amendments.
In executing any amendment permitted by this Article V, the Rights Agent shall be
entitled to receive, and 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 Rights
Agent may, but is not obligated to, enter into any such amendment that affects the Rights Agent’s
own rights, privileges, covenants or duties under this Agreement or otherwise.
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Section 5.4 Effect of Amendments.
Upon the execution of any amendment under this Article V, this Agreement shall be
modified in accordance therewith, such amendment shall form a part of this Agreement for all
purposes and every Holder shall be bound thereby.
ARTICLE VI
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Section 6.1 Holdco May Consolidate, Etc.
(a) Holdco shall not consolidate with or merge into any other Person or convey, transfer or
lease its properties and assets substantially as an entirety to any Person, unless:
(i) the Person formed by such consolidation or into which Holdco is merged or
the Person that acquires by conveyance or transfer, or that leases, the properties
and assets of Holdco substantially as an entirety (the “Surviving Person”)
shall expressly assume the performance of every duty and covenant of this Agreement
on the part of Holdco to be performed or observed; and
(ii) Holdco has delivered to the Rights Agent an Officer’s Certificate, stating
that such consolidation, merger, conveyance, transfer or lease complies with this
Article VI and that all conditions precedent herein provided for relating to
such transaction have been complied with.
(b) For purposes of this Section 6.1 only, “convey, transfer or lease its properties and assets
substantially as an entirety” shall mean (i) properties and assets contributing in the aggregate at
least 80% of Holdco’s total consolidated revenues for the current period as reported in Holdco’s
last available periodic financial report (quarterly or annual, as the case may be) or (ii)
properties and consolidated assets constituting in the aggregate at least 80% of Holdco’s total
assets for the current period as reported in Holdco’s last available periodic financial report
(quarterly or annual, as the case may be).
(c) In the event Holdco conveys, transfers or leases its properties and assets substantially
as an entirety in accordance with the terms and conditions of this Section 6.1, Holdco and the
Surviving Person shall be jointly and severally liable for the payment of the CVR Payment Amount
and the performance of every duty and covenant of this Agreement on the part of Holdco to be
performed or observed.
Section 6.2 Successor Substituted.
Upon any consolidation of or merger by Holdco 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 6.1, the Surviving Person shall succeed to, and be substituted for,
and may exercise every right and power of, Holdco under this Agreement with the same
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effect as if the Surviving Person had been named as Holdco herein, and thereafter, except in the case of a
lease, the predecessor Person shall be relieved of all obligations and covenants under this
Agreement and the CVRs.
ARTICLE VII
OTHER PROVISIONS OF GENERAL APPLICATION
OTHER PROVISIONS OF GENERAL APPLICATION
Section 7.1 Notices to the Rights Agent, Holdco and the Stockholders’ Representative.
Any request, demand, authorization, direction, notice, consent, waiver or other document
provided or permitted by this Agreement shall be sufficient for every purpose hereunder if in
writing and sent by facsimile transmission, delivered personally, or by certified or registered
mail (return receipt requested and first-class postage prepaid) or sent by a nationally recognized
overnight courier (with proof of service), addressed as follows, and shall be deemed to have been
given upon receipt:
(a) if to the Rights Agent, addressed to it at Shareowner Services: MAC N9100-030, 000 Xxxxx
Xxxxxxx Xxxxxxxx Xxxxxx, Xx. Xxxx, Xxxxxxxxx 00000, facsimile at (000) 000-0000, e-mail at
xxxxxx.x.xxxxx@xxxxxxxxxx.xxx, Attention: Xxxxx Xxxxx, or at any other address previously
furnished in writing to the
Stockholders’ Representative and Holdco by the Rights Agent in accordance with this Section 7.1;
(b) if to Holdco, addressed to it at Cambium Holdings, Inc., c/o Xxxxxxx Xxxxxx Xxxxxxxxx, 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, telephone at (000) 000-0000, facsimile at (000) 000-0000,
email at xxxxxxxxx@xxx.xxx, Attention: Xxxxx X. Xxxxxxxx; with a copy to Xxxxxxxxxx Xxxxxxx PC,
1251 Avenue of the Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, telephone at (000) 000-0000,
facsimile at (000) 000-0000, email at xxxxxxxx@xxxxxxxxxx.xxx, Attention: Xxxxxx X. Xxxxxxx, Esq.,
or at any other address previously furnished in writing to the Rights Agent and the Stockholders’
Representative by Holdco in accordance with this Section 7.1; or
(c) if to the Stockholders’ Representative, addressed to it at Vowel Representative, LLC, c/o
Perkins Coie LLP, 000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, telephone at
(000) 000-0000, facsimile at (000) 000-0000, email at xxxxxxx@xxxxxxxxxxx.xxx, Attention: Xxxx
Xxxxxx, Esq.; with a copy to Xxxxxxx Coie LLP, 000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx,
Xxxxxxxx 00000, telephone at (000) 000-0000, facsimile at (000) 000-0000, email at
xxxxxxx@xxxxxxxxxxx.xxx, Attention: Xxxx Xxxxxx, Esq., or at any other address previously
furnished in writing to the Rights Agent and Holdco by Stockholders’ Representative in accordance
with this Section 7.1.
Section 7.2 Notice to Holders.
Where this Agreement provides for notice to Holders, such notice shall be sufficiently given
(unless otherwise herein expressly provided) if in writing and mailed, first-
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class postage prepaid,
to each Holder affected by such event, at his, her or its address as it
appears in the CVR 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.
Section 7.3 Effect of Headings.
The Article and Section headings herein are for convenience only and shall not affect the
construction hereof.
Section 7.4 Successors and Assigns.
All covenants and agreements in this Agreement by Holdco shall bind its successors and
assigns, whether so expressed or not.
Section 7.5 Benefits of Agreement.
Nothing in this Agreement, express or implied, shall give to any Person (other than the
parties hereto and their permitted successors and assigns hereunder) 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 permitted successors and assigns. For the avoidance of doubt, no Holder shall have any right
to enforce or otherwise assert a claim with respect to this Agreement; all such rights and claims
shall only be brought by the Stockholders’ Representative on behalf of such Holder.
Section 7.6 Governing Law.
This Agreement and the CVRs shall be governed by and construed in accordance with the laws of
the State of Delaware without regards to its rules of conflicts of laws.
Section 7.7 Legal Holidays.
In the event that a CVR Payment Date shall not be a Business Day, then, notwithstanding any
provision of this Agreement to the contrary, any payment required to be made in respect of the CVRs
on such date need not be made on such date, but may be made on the next succeeding Business Day
with the same force and effect as if made on the CVR Payment Date.
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Section 7.8 Severability Clause.
In case any one or more of the provisions contained in this Agreement shall for any reason be
held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provisions of this Agreement, but this
Agreement shall be construed as if such invalid or illegal or unenforceable provision had never
been contained herein. Upon such determination that any term or other provision is invalid,
illegal or unenforceable, the court or other tribunal making such determination is authorized and
instructed to modify this Agreement so as to effect the original intent of the parties as closely
as possible so that the transactions and agreements contemplated herein are consummated as
originally contemplated to the fullest extent possible.
Section 7.9 Counterparts.
This Agreement may be executed by the parties hereto, in two or more counterparts (which may be
effectively delivered by facsimile, by electronic transmission of portable document format (PDF)
files or tagged image file format (TIF) files, or by other electronic means)), each of which shall
be an original and all of which shall together constitute one and the same agreement.
Section 7.10 Termination.
This Agreement shall terminate and be of no further force or effect, and the parties hereto
shall have no liability hereunder, upon payment by the Rights Agent to the Holders of the then
remaining balance of the Escrow Funds in accordance with this Agreement.
Section 7.11 Entire Agreement.
This Agreement, the Merger Agreement, and the Escrow Agreement represent the entire
understanding of Holdco and the Stockholders’ Representative with reference to the CVRs, and this
Agreement supersedes any and all other oral or written agreements hereto made with respect to the
CVRs, except for the Merger Agreement and the Escrow Agreement. This Agreement and the Escrow
Agreement represent the entire understanding of the Rights Agent with reference to the CVRs, and
this Agreement supersedes any and all other oral or written agreements hereto made with respect to
the CVRs, except for the Merger Agreement and the Escrow Agreement. If and to the extent that any
provision of this Agreement is inconsistent or conflicts with the Merger Agreement or the Escrow
Agreement, the Escrow Agreement shall govern and be controlling, and this Agreement may be amended,
modified, supplemented or altered only in accordance with the terms of Article V.
[Remainder of Page Intentionally Left Blank.]
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed on its behalf
by its duly authorized officers as of the day and year first above written.
| CAMBIUM HOLDINGS, INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| XXXXX FARGO BANK, NATIONAL ASSOCIATION |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| VOWEL REPRESENTATIVE, LLC |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
Signature Page to Contingent Value Rights Agreement
