PMR CORPORATION
AND
STOCKTRANS, INC., Trustee
AND
XXXX XXXXXX, as Representative
CONTINGENT VALUE RIGHTS
AGREEMENT
Dated as of August 2, 2002
TABLE OF CONTENTS
Page
PARTIES...........................................................................................................1
RECITALS..........................................................................................................1
ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions...............................................................................1
Section 102. Compliance Certificates and Opinions......................................................4
Section 103. Form of Documents Delivered to Trustee....................................................5
Section 104. Acts of Holders...........................................................................5
Section 105. Notices, etc., to Trustee and Company.....................................................6
Section 106. Notice to Holders; Waiver.................................................................6
Section 107. Effect of Headings and Table of Contents..................................................7
Section 108. Successors and Assigns....................................................................7
Section 109. Benefits of Agreement.....................................................................7
Section 110. Governing Law.............................................................................7
Section 111. Legal Holidays............................................................................7
Section 112. Separability Clause.......................................................................7
ARTICLE TWO CVR FORMS
Section 201. Forms Generally...........................................................................8
Section 202. Form of Face of CVR.......................................................................8
Section 203. Form of Reverse of CVR....................................................................9
Section 204. Form of Trustee's Certificate of Authentication..........................................11
ARTICLE THREE THE CVRs
Section 301. Title and Terms..........................................................................11
Section 302. Registrable Form.........................................................................14
Section 303. Execution, Authentication, Delivery and Dating...........................................14
Section 304. Temporary CVRs...........................................................................15
Section 305. Registration, Registration of Transfer and Exchange......................................15
Section 306. Mutilated, Destroyed, Lost and Stolen CVRs...............................................16
Section 307. Presentation of CVR Certificate..........................................................16
Section 308. Persons Deemed Owners....................................................................17
Section 309. Cancellation.............................................................................17
ARTICLE FOUR THE TRUSTEE
Section 401. Certain Duties and Responsibilities......................................................17
Section 402. Certain Rights of Trustee................................................................18
Section 403. Not Responsible for Recitals or Issuance of CVRs.........................................20
Section 404. May Hold CVRs............................................................................20
Section 405. Money Held in Trust......................................................................20
Section 406. Compensation, Reimbursement and Indemnification of the Trustee...........................20
Section 407. Resignation and Removal; Appointment of Successor........................................21
Section 408. Acceptance of Appointment by Successor...................................................22
Section 409. Merger, Conversion, Consolidation or Succession to Business..............................22
Note: This table of contents shall not, for any purpose, be deemed to be a
part of this Agreement.
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ARTICLE FIVE THE REPRESENTATIVE
Section 501. Certain Duties and Responsibilities......................................................22
Section 502. Certain Rights of Representative.........................................................23
Section 503. Not Responsible for Recitals or Issuance of CVRs.........................................23
Section 504. Compensation, Reimbursement and Indemnification of the Representative....................24
Section 505. Resignation and Removal; Appointment of Successor........................................24
Section 506. Acceptance of Appointment by Successor...................................................25
ARTICLE SIX HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 601. Company to Furnish Trustee Names and Addresses of Holders................................26
Section 602. Preservation of Information Communications to Holders....................................26
Section 603. Reports by Company.......................................................................27
ARTICLE SEVEN AMENDMENTS
Section 701. Amendments Without Consent of Holders....................................................28
Section 702. Amendments with Consent of Holders.......................................................28
Section 703. Execution of Amendments..................................................................29
Section 704. Effect of Amendments.....................................................................29
Section 705. Reference in CVRs to Amendments..........................................................29
ARTICLE EIGHT COVENANTS
Section 801. Payment of Amounts, if Any, to Holders...................................................30
Section 802. Maintenance of Office or Agency..........................................................30
Section 803. Money for CVR Payments to Be Held in Trust...............................................30
Section 804. Written Statement to Trustee.............................................................31
ARTICLE NINE REMEDIES OF THE TRUSTEE AND HOLDERS ON EVENT OF DEFAULT
Section 901. Event of Default Defined; Acceleration of Maturity; Waiver of Default....................31
Section 902. Collection of indebtedness by Trustee; Trustee may Prove Debt............................33
Section 903. Application of Proceeds..................................................................34
Section 904. Suits for Enforcement....................................................................35
Section 905. Restoration of Rights on Abandonment of Proceedings......................................35
Section 906. Limitations on Suits by Holders..........................................................35
Section 907. Unconditional Right of Holders to Institute Certain Suits................................36
Section 908. Powers and Remedies Cumulative; Delay or Omission Not Waiver of Default..................36
Section 909. Control by Holders.......................................................................36
Section 910. Waiver of Past Defaults..................................................................37
Section 911. Trustee to Give Notice of Default, but May Withhold in Certain Circumstances.............37
Section 912. Right of Court to Require Filing of Undertaking to Pay Costs.............................37
ARTICLE TEN CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Section 1001. Company May Consolidate, Etc.............................................................38
Section 1002. Successor Substituted....................................................................38
Section 1003. Opinion of Counsel to Trustee............................................................39
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CONTINGENT VALUE RIGHTS AGREEMENT, dated as of August 2, 2002 (this
"Agreement"), between PMR CORPORATION, a Delaware corporation (hereinafter
called the "Company"), StockTrans, Inc., trustee; hereinafter called the
"Trustee"), and Xxxx Xxxxxx (hereinafter called the "Representative").
RECITALS OF THE COMPANY
WHEREAS, the Company has duly authorized the creation of an issue of
contingent value rights (hereinafter called the "CVRs"), of substantially the
tenor and amount hereinafter set forth, and to provide therefor the Company has
duly authorized the execution and delivery of this Agreement;
WHEREAS, the Company has entered into an Agreement and Plan of Merger
dated as of May 6, 2002, as amended (the "Merger Agreement"), among the
Company, PMR Acquisition Corporation, a Delaware corporation (the "Merger
Sub"), and Psychiatric Solutions, Inc., a Delaware corporation ("Target");
WHEREAS, the Merger Agreement permits the Company to issue the CVRs to
the holders of the Company's common stock, par value $0.01 per share (the
"Company Common Stock"), prior to the effective time of the merger of Merger
Sub with and into Target (the "Effective Time"); and
WHEREAS, all things necessary have been done to make the CVRs, 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 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 of the CVRs,
as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. 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 have the meanings
assigned to them in this Article, and include the plural as well as
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 at the time of any
computation; and
(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.
(b) Certain terms, used principally in Article Four, are defined
in that Article.
(c) The following terms shall have the meanings ascribed to them
as follows:
"Act", when used with respect to any Holder, has the meaning specified
in Section 104.
"Affiliate" means a person that, directly or indirectly, through one
or more intermediaries, controls, is controlled by, or is under common control
with, the first mentioned person.
"Agreement" means this instrument as originally executed and as it may
from time to time be supplemented or amended pursuant to the applicable
provisions hereof.
"Authorized Newspaper" means The Wall Street Journal (Eastern
Edition), or if The Wall Street Journal (Eastern Edition) shall cease to be
published, or, if the publication or general circulation of The Wall Street
Journal (Eastern Edition) shall be suspended for whatever reason, such other
English language newspaper as is selected by the Company with general
circulation in The City of New York, New York.
"Board of Directors" means the board of directors of the Company.
"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, Sunday or a day on
which banking institutions in The City of New York, New York or in the State of
the principal office of the Trustee are authorized or obligated by law or
executive order to remain closed.
"Cash Equivalents" has the meaning set forth in the Merger Agreement.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument, until a successor Person shall have become such
pursuant to the applicable provisions of this Agreement, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by the 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.
"Control" (including the terms "controlled", "controlled by" and
"under common control with") means the possession, directly or indirectly or as
trustee or executor, of the power to
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direct or cause the direction of the management or policies of a person,
whether through the ownership of stock or as trustee or executor, by contract
or otherwise.
"CVR Certificate" means a certificate representing any of the CVRs.
"CVR Payment Amount" means any Excess Cash Equivalents Payment Amount
or Legacy A/R Payment Amount.
"Default Interest Rate" means 8% per annum.
"Effective Time" has the meaning set forth in the Preamble.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Holder" means a Person in whose name a CVR is registered in the
Security Register.
"Officer's Certificate" means a certificate signed by the 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 theretofore authenticated and delivered under this
Agreement, except:
(a) CVRs theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(b) From and after the Payment Date, CVRs, or portions
thereof, for whose payment cash in the necessary amount has been
theretofore deposited 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 in exchange for or in lieu of which other CVRs
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.
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"Paying Agent" means any Person authorized by the Company to pay the
amount determined pursuant to Section 301, if any, on any CVRs on behalf of the
Company, which shall initially be the Trustee.
"Payment Date" means an Excess Cash Equivalents Payment Date or Legacy
A/R Payment Date, as the case may be.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization
or government or any agency or political subdivision thereof.
"Representative" means the Person named as the "Representative" in the
first paragraph of this Agreement, until a successor Representative shall have
become such pursuant to the applicable provisions of this Agreement, and
thereafter "Representative" shall mean such successor Representative (except to
the extent specified in Section 505(c)).
"Responsible Officer", when used with respect to the Trustee, means
any officer assigned to the Trustee 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.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Surviving Person" has the meaning set forth in Section 901.
"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.
"Trustee Office" means the office of the Trustee, which office at the
date of execution of this Agreement is located at 00 Xxxx Xxxxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxxxxxx 00000.
"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".
Section 102. 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 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 an Opinion of Counsel stating that in the opinion of
such counsel all such conditions precedent, if any, have been complied with,
except that, in the case of any such application or request as to which the
furnishing of such documents is specifically required by any provision of this
Agreement relating to such particular application or request, no additional
certificate or opinion need be furnished.
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Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Agreement shall include, at a
minimum, a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
Section 103. 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 may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company 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 certificate or opinion is based are
erroneous. Any such certificate or 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
such matters are erroneous.
Any certificate, statement or opinion of an officer of the Company or
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 that the certificate or opinion or representations with
respect to the accounting matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same 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.
Where any Person is required to take, 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.
Section 104. 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 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 the Representative 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 401)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.
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(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any reasonable manner which the Trustee
deems sufficient.
(c) The ownership of CVRs shall be proved by the Security
Register.
(d) At any time prior to (but not after) the evidencing to the
Trustee, as provided in this Section 104, 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 the serial number of which is shown by the evidence to be
included among the serial numbers of the CVRs the Holders of which have
consented to such action may, by filing written notice at the Trustee Office
and upon proof of holding as provided in this Section 104, revoke such action
so far as concerns such CVR. Any request, demand, authorization, direction,
notice, consent, waiver or other action by the Holder or any CVR shall bind
every future Holder of the same CVR or the Holder of every CVR 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 such CVR.
Section 105. Notices, etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided 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 its Trustee Office,
Attention: Xxxxxxxx Xxxxxx; or
(b) the Representative by any Holder, the Company or the
Trustee shall be sufficient for every purpose hereunder if in writing
and mailed, first-class postage prepaid to the Representative
addressed to him at 0000 Xxxxxx Xxxxx, Xxx Xxxxx, Xxxxxxxxxx 00000, or
at any other address previously furnished in writing to the Trustee by
the Representative; or
(c) 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 000
Xxxxxxxx Xxxx, Xxxxx X-000, Xxxxxxxx, Xxxxxxxxx 00000, Attention:
Chief Executive Officer, or at any other address previously furnished
in writing to the Trustee by the Company.
Section 106. 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 his 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
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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.
Section 107. 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.
Section 108. Successors and Assigns.
All covenants and agreements in this Agreement by the Company shall
bind its successors and assigns, whether so expressed or not.
Section 109. 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 and of the Holders.
Section 110. Governing Law.
This Agreement and the CVRs shall be governed by and construed in
accordance with the laws of the State of New York.
Section 111. Legal Holidays.
In the event that a Payment Date shall not be a Business Day, then
(notwithstanding any provision of this Agreement or the CVRs 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 applicable Payment Date.
Section 112. Separability Clause.
In case any provision in this Agreement or in the CVRs 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.
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ARTICLE TWO
CVR FORMS
Section 201. Forms Generally.
The CVRs 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 CVRs, as evidenced by their execution of
the CVRs. Any portion of the text of any CVR may be set forth on the reverse
thereof, with an appropriate reference thereto on the face of the CVR.
The definitive CVRs shall be printed, lithographed, typewritten, or
engraved on steel engraved borders or otherwise produced by any combination of
these methods or may be produced in any other manner as determined by the
officers executing such CVRs, as evidenced by their execution of such CVRs.
Section 202. Form of Face of CVR.
PMR CORPORATION
No.______ Certificate for _________ Contingent Value Rights
This certifies that __________________________________________________
or 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 one or more payments from PMR Corporation, 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 payments shall be made on the applicable Payment Date as
defined in the Agreement referred to on the reverse hereof.
Payment of any amounts 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 Trustee in Ardmore, Pennsylvania, 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, the Company may pay
such amounts by its check payable in such money mailed to the Holders at their
respective addresses listed in the Security Register. Trustee has been
appointed as Paying Agent in Ardmore, Pennsylvania.
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.
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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: PMR CORPORATION
By:
-------------------------------
Attest:
----------------------------------
Authorized Signature
Section 203. Form of Reverse of CVR.
This CVR Certificate is issued under and in accordance with the
Contingent Value Rights Agreement, dated as of August 2, 2002 (the
"Agreement"), between the Company, the Trustee and the Representative, 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, the Representative and the
Holders of the CVRs. Copies of the Agreement can be obtained by contacting the
Trustee.
The CVRs shall not be binding and enforceable obligations of the
Company until the Effective Time (as defined in the Agreement). Subject to the
provisions of the Agreement, at and after the Effective Time, any CVRs
previously issued in accordance with the Agreement and outstanding, and any
CVRs issued after the Effective Time in accordance with the Agreement, shall be
the valid and binding obligations of the Company.
The Company shall pay to the Holder hereof on each applicable Payment
Date, for each CVR represented by this CVR Certificate, the applicable CVR
Payment Amount (as defined in the Agreement).
Any CVR Payment Amount shall be payable by the Company 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, the Company may pay
such amounts by its check payable in such money.
If an Event of Default occurs and is continuing, either the Trustee or
the Holders holding an aggregate of at least 25% of the outstanding CVRs, by
notice to the Company and the Representative (and to the Trustee if given by
the Holders), may (but are not obligated to) declare the CVRs due and payable,
and upon such declaration, the Company shall pay to the Holder, in cash, for
each CVR held by the Holder, the full amount of any CVR Payment Amount
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then due and payable with interest at the Default Interest Rate from the
applicable Payment Date through the date payment is made or duly provided for.
Notwithstanding any provision of the Agreement or of this CVR Certificate to
the contrary, other than in the case of interest on a CVR Payment Amount
pursuant to the preceding sentence, no interest shall accrue on any amounts
payable on the CVRs to the Holder.
"Authorized Newspaper" means The Wall Street Journal (Eastern
Edition), or if The Wall Street Journal (Eastern Edition) shall cease to be
published, or, if the publication or general circulation of The Wall Street
Journal (Eastern Edition) shall be suspended for whatever reason, such other
English language newspaper as is selected by the Company with general
circulation in The City of New York, New York.
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, the Representative 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 times, place, and
amount, and in the cash or securities of the Company, 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 registerable on the Security Register of the Company, upon surrender of this
CVR Certificate for registration of transfer at the office of the Trustee
maintained for such purpose in Ardmore, Pennsylvania 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 his
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 StockTrans, Inc., at 00 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxx 00000,
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 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 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.
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Section 204. 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.
STOCKTRANS, INC.
Trustee
By
-----------------------------------------
Authorized Officer
ARTICLE THREE
THE CVRs
Section 301. Title and Terms.
(a) The aggregate number of CVR Certificates which may be
authenticated and delivered under this Agreement is limited to the number equal
to the number of shares of Company Common Stock issued and outstanding prior to
the Effective Time (other than shares of Company Common Stock in the treasury
of the Company and shares of Company Common Stock owned by any direct or
indirect wholly owned subsidiary of the Company), except for CVRs authenticated
and delivered upon registration of transfer of, or in exchange for, or in lieu
of, other CVRs pursuant to Section 304, 305, 308 or 606.
(b) The CVRs shall be known and designated as the "Contingent
Value Rights" of the Company.
(c) Notwithstanding any other provision of this Agreement and
notwithstanding the issuance of CVRs by the Company pursuant to this Agreement
prior to the Effective Time, the CVRs shall not be binding and enforceable
obligations of the Company until the Effective Time. Subject to the other
provisions of this Agreement, at and after the Effective Time, any CVRs issued
in accordance with this Agreement and outstanding shall be the valid and
binding obligations of the Company.
(d) On or before the 30th day following the Effective Time, the
Company shall issue to each holder of Common Stock of the Company one CVR for
each share of Common Stock of the Company held by such holder as of August 2,
2002, the record date for purposes of the CVRs. On or before the 60th day
following the Effective Time, the Company shall determine the aggregate dollar
amount of the Cash Equivalents of the Company immediately prior to the
Effective Time. In the event that the aggregate amount of Cash Equivalents of
the Company immediately prior to the Effective Time is greater than $5.175
million, then the Company shall pay to each Holder on the 90th day following
the Effective Time (such payment date referred to herein as
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the "Excess Cash Equivalents Payment Date"), for each CVR held by such Holder,
an amount determined by dividing (i) the amount by which the aggregate amount
of Cash Equivalents of the Company immediately prior to the Effective Time
exceeds $5.175 million by (ii) the total number of CVRs then outstanding (the
quotient so determined referred to herein as the "Excess Cash Equivalents
Payment Amount"); provided, however, in the event that the amount determined
pursuant to clause (i) above is less than $100,000, then no payment shall be
made in respect of the CVRs pursuant to this subsection (c) but, in lieu
thereof, the amount determined pursuant to clause (i) shall be deemed to be a
Legacy Receivable (as defined below) collected in the first fiscal quarter
ending after the Effective Time. Not later than the 30th day following the last
day of each fiscal quarter of the Company for each fiscal quarter ending after
the Effective Time and on or before the Expiration Date (as defined below), the
Company shall (i) determine the aggregate amount of cash collections relating
to the Legacy Receivables (as defined below) received by the Company during
such fiscal quarter, and (ii) pay to each Holder on the 15th day thereafter
(each such payment date referred to herein as a "Legacy A/R Payment Date"), for
each CVR held by such Holder, an amount determined by dividing (A) the product
of (1) the amount determined pursuant to clause (i) above for such fiscal
quarter (the amount so determined for any such quarter shall be referred to
herein as the "Quarterly Receivables Amount"), less any fees and expenses of
any third-party incurred by the Company to collect the Legacy Receivables
(other than fees and expenses of the Representative), any amounts paid pursuant
to Section 504(a), Section 504(b) or Section 504(c) in excess of $30,000 in the
aggregate and any fees and expenses of the Trustee, in each case to the extent
not previously deducted pursuant to this clause (i) in any preceding fiscal
quarter, and (2) 85% by (B) the total number of CVRs then outstanding (the
quotient so obtained with respect to any Legacy A/R Payment Date referred to
herein as a "Legacy A/R Payment Amount"); provided, however, that in the event
that the aggregate amount determined in accordance with clause (A) above does
not equal or exceed $500,000, such amount shall not be distributed for such
quarter but shall be included in the amount payable in the next succeeding
quarter for which such threshold amount is available for payment (after taking
into account any amounts not paid in any prior quarters) or in the event that
all amounts determined pursuant to clause (A) above have not been paid to the
Holders of the CVRs prior to the Expiration Date, all such amounts that remain
unpaid shall be paid to the Holders of the CVRs on or prior to the 45th day
following the Expiration Date. "Legacy Receivables" means (i) any and all
accounts receivable of the Company that remain uncollected by the Company as of
the Effective Time other than accounts receivable attributable to any of the
contracts listed on Exhibit A attached hereto and other than notes payable from
employees of the Company and (ii) any amount deemed to be a Legacy Receivable
pursuant to Section 304(c); provided, however, that any and all accounts
receivable attributable to the contract listed as item 3 on Exhibit A with
respect to any period prior to the Effective Time shall also be deemed to be a
"Legacy Receivable".
(e) The Company shall use commercially reasonable efforts to
collect the Legacy Receivables. The Representative shall act as agent for the
Company to assist the Company in the collection of the Legacy Receivables and,
in this regard, the Company shall provide the Representative with accounting,
legal and administrative support (including expert witnesses for administrative
hearings and outside attorneys) reasonably necessary to facilitate the
Representative's efforts to collect the Legacy Receivables. The Representative
shall be entitled to take commercially reasonable actions on behalf of the
Company to collect the Legacy Receivables, including the bringing of any
action, suit or legal proceeding with respect to any Legacy Receivables, the
negotiation of a settlement or compromise of any Legacy Receivable and the
entry of any settlement or compromise agreement with respect to any Legacy
Receivable; provided, however, that the Representative shall not bring any
action, suit or other legal proceeding with respect to any Legacy Receivable
without the prior written consent of the Company, which consent shall not be
unreasonably withheld. In the event that consent to the
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bringing of any such action, suit or proceeding is withheld and the
Representative provides written notice to the Company that the Representative
believes that such consent was unreasonably withheld, then the Representative
shall be entitled to request Ernst & Young to make a determination within 30
days after the date of such notice to the Company as to whether such consent
was unreasonably withheld. Ernst & Young shall make such determination based on
its review of the relevant facts, including the likelihood of success on the
merits of any such action, suit or proceeding, the cost of pursuing such
action, suit or proceeding and any other factors that Ernst & Young deems
relevant. The Company and the Representative shall cooperate with Ernst & Young
to enable Ernst & Young to make such determination within such 30-day period,
including by means of making available relevant information with respect to the
Legacy Receivable that is the subject of the review. The determination of Ernst
& Young that such consent was unreasonably withheld shall allow the
Representative to bring the action, suit or proceeding as to which consent had
been withheld, and a determination by Ernst & Young that such consent was not
unreasonably withheld shall preclude the Representative from bringing such
action, suit or proceeding. Any determination by Ernst & Young shall be final
and binding upon the Company and the Representative. The settlement or
compromise by the Company of any Legacy Receivable for less than its full face
amount shall require the consent of the Representative, which consent shall not
be unreasonably withheld or delayed. The Representative shall have (i)
reasonable access to information concerning any Legacy Receivable that is in
the possession, custody or control of the Company and (ii) the reasonable
assistance of the Company's officers and employees for purposes of performing
the Representative's duties under this Agreement; provided, however, that the
Representative shall treat confidentially and not disclose any nonpublic
information concerning any Legacy Receivable to anyone (except to the Company's
attorneys, accountants and other advisors).
(f) The determination by the Company of any CVR Payment Amount,
absent manifest error, shall be final and binding on the Company and the
Holder.
(g) If an Event of Default occurs and is continuing, either the
Trustee or the Holders holding an aggregate of at least 25% of the outstanding
CVRs, by notice to the Company (and to the Trustee if given by the Holders),
may (but are not obligated to) declare the CVRs due and payable, and upon such
declaration, the Company shall pay to the Holder, in cash, for each CVR held by
the Holder, the aggregate amount of all CVR Payment Amounts, with interest at
the Default Interest Rate from each applicable Payment Date through the date
payment is made or duly provided for. Notwithstanding any provision of this
Agreement or the CVR Certificates to the contrary, other than in the case of
interest on the CVR Payment Amount specified in the preceding sentence, no
interest shall accrue on any amounts payable on the CVRs to any Holder.
(h) The CVRs shall terminate on the second anniversary of the
Effective Time unless the Company is engaged in active litigation with respect
to one or more Legacy Receivables in which case the CVRs shall terminate on the
final resolution of all such litigation; provided that in the event that at any
time after the first anniversary of the Effective Time (i) the Legacy
Receivables listed on Exhibit B have been collected in full or a settlement or
compromise with respect to each of such Legacy Receivables has been obtained
with the consent of the Representative and (ii) no Event of Default has
occurred and is continuing, then upon the execution of a written instrument by
the Company and the Representative at any time following the first anniversary
of the date of this Agreement evidencing a determination to terminate the CVRs
that is provided to the Trustee, the CVRs shall terminate and become null and
void and the
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Holders thereof shall have no further rights with respect thereto except with
respect to the payment of any amount due and payable in respect of the CVRs on
or prior to the date of such termination (the termination date of the CVRs is
referred to herein as the "Expiration Date"). The failure to give such notice
or any defect therein shall not affect the validity of such determination.
(i) Except as contemplated hereby, no amount payable by the
Company in respect of the CVRs shall be subject to any setoff, offset or other
claim by the Company against any Holder or any other Person in respect of any
matter related to the Merger Agreement or the transactions contemplated
thereby.
(j) The Company undertakes to perform such duties and only such
duties as are specifically set forth in this Agreement. The Company 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 man would
exercise or use under the circumstances in the conduct of his own affairs;
provided, however, that the Company shall not be liable for any acts or
omissions except to the extent that the Company has engaged in willful
misconduct or bad faith or to the extent any such act or omission violates any
express provision of this Agreement. The Company makes no representation or
guaranty, express or implied, with respect to the collection or collectability
of any of the Legacy Receivables.
Section 302. Registrable Form.
The CVRs shall be issuable only in registered form.
Section 303. Execution, Authentication, Delivery and Dating.
The CVRs shall be executed on behalf of the Company by its 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 CVRs may be manual or facsimile.
CVRs 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 CVRs or did not hold
such offices at the date of such CVRs.
At any time and from time to time after the execution and delivery of
this Agreement, the Company may deliver CVRs executed by the Company to the
Trustee for authentication, together with a Company Order for the
authentication and delivery of such CVRs; and the Trustee in accordance with
such Company Order shall authenticate and deliver such CVRs as provided in this
Agreement and not otherwise.
Each CVR shall be dated the date of its authentication.
No CVR shall be entitled to any benefit under this Agreement or be
valid or obligatory for any purpose unless there appears on such CVR a
certificate of authentication substantially in the form provided for herein
duly executed by the Trustee by manual signature of an authorized officer, and
such certificate upon any CVR shall be conclusive evidence, and the only
evidence,
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that such CVR has been duly authenticated and delivered hereunder and that the
Holder is entitled to the benefits of this Agreement.
Section 304. Temporary CVRs.
Pending the preparation of definitive CVRs, the Company may execute,
and upon Company Order the Trustee shall authenticate and deliver, temporary
CVRs which are printed, lithographed, typewritten, mimeographed or otherwise
produced, substantially of the tenor of the definitive CVRs in lieu of which
they are issued and with such appropriate insertions, omissions, substitutions
and other variations as the officers executing such CVRs may determine with the
concurrence of the Trustee. Temporary CVRs may contain such reference to any
provisions of this Agreement as may be appropriate. Every temporary CVR 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
definitive CVRs.
If temporary CVRs are issued, the Company will cause definitive CVRs
to be prepared without unreasonable delay. After the preparation of definitive
CVRs, the temporary CVRs shall be exchangeable for definitive CVRs upon
surrender of the temporary CVRs at the office or agency of the Company
designated for such purpose pursuant to Section 802, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary CVRs, the
Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor a like amount of definitive CVRs. Until so exchanged, the
temporary CVRs shall in all respects be entitled to the same benefits under
this Agreement as definitive CVRs.
Section 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Trustee Office of the
Trustee a register (the register maintained in such office and in any other
office or agency designated pursuant to Section 802 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.
Upon surrender for registration of transfer of any CVR at the office
or agency of the Company designated pursuant to Section 802, the Company shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new CVR Certificates
representing the same aggregate number of CVRs represented by the CVR
Certificate so surrendered that are to be transferred and the Company shall
execute and the Trustee shall authenticate and deliver, in the name of the
transferor, one or more new CVR Certificates represented by such CVR
Certificate that are not to be transferred.
At the option of the Holder, CVR Certificates may be exchanged for
other CVR Certificates that represent in the aggregate the same number of CVRs
as the CVR Certificates surrendered at such office or agency. Whenever any CVR
Certificates are so surrendered for exchange, the Company shall execute, and
the Trustee shall authenticate and deliver, the CVR Certificates which the
Holder making the exchange is entitled to receive.
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All CVRs issued upon any registration of transfer or exchange of CVRs
shall be the valid obligations of the Company, evidencing the same right, and
entitled to the same benefits under this Agreement, as the CVRs surrendered
upon such registration of transfer or exchange.
Every CVR presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company or the Security Registrar) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar, duly executed by the
Holder thereof or his attorney duly authorized in writing.
No service charge to Holders shall 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 that may be imposed in
connection with any registration of transfer or exchange of CVRs, other than
exchanges pursuant to Section 304 or not involving any transfer.
Section 306. Mutilated, Destroyed, Lost and Stolen CVRs.
If (a) any mutilated CVR 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, 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 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 or in lieu of any such
destroyed, lost or stolen CVR, a new CVR Certificate of like tenor and amount
of CVRs, bearing a number not contemporaneously outstanding.
Upon the issuance of any new CVRs under this Section, 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 issued pursuant to this Section in lieu of any
destroyed, lost or stolen CVR shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen CVR 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 CVRs duly issued hereunder.
The provisions of this Section 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 CVRs.
Section 307. Presentation of CVR Certificate.
Payment of any amounts on the CVRs shall be made only upon
presentation by the Holder thereof at the office or agency of the Company
maintained for that purpose in the Ardmore, Pennsylvania, or the Trustee Office
and 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, the
Company may pay such amounts by its check payable in such money mailed to
Holders at their respective addresses set forth in the Security Register.
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Section 308. Persons Deemed Owners.
Prior to the time of due presentment for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name any CVR is registered as the owner of such CVR for the
purpose of receiving payment on such CVR and for all other purposes whatsoever,
whether or not such CVR be overdue, and neither the Company, the Trustee nor
any agent of the Company or the Trustee shall be affected by notice to the
contrary.
Section 309. Cancellation.
All CVRs 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 CVRs previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and all CVRs so delivered shall be promptly cancelled by the
Trustee. No CVRs shall be authenticated in lieu of or in exchange for any CVRs
cancelled as provided in this section, except as expressly permitted by this
Agreement. All cancelled CVRs held by the Trustee shall be disposed of as
directed by a Company Order.
ARTICLE FOUR
THE TRUSTEE
Section 401. 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 which 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 man 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 which 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.
(c) No provision of this Agreement shall be construed to relieve
the Trustee from liability for its own willful misconduct, except that:
(1) this Subsection (c) shall not be construed to limit
the effect of Subsections (a) and (b) of this
Section;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible
Officer;
17
(3) 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
(4) 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 909 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.
(e) Notwithstanding any other provision hereof, neither Trustee
nor any of its representatives will be liable for any action taken or omitted
to be taken by it or them under this Agreement in good faith or be responsible
for the consequences of any error of judgment (except for fraud or willful
misconduct), and neither Trustee nor any of its representatives has a fiduciary
relationship with any Holder by virtue of this Agreement (but nothing in this
Agreement negates the obligation of Trustee to account for funds received by it
for the account of any Holder). If Trustee requests instructions from the
Company, the Representative, or the Holders, as the case may be, with respect
to any act or action in connection with this Agreement, Trustee is entitled to
refrain (without incurring any liability to any person or entity by so
refraining) from the act or action unless and until it has received
instructions. THE COMPANY AGREES TO INDEMNIFY TRUSTEE AND ITS REPRESENTATIVES
AND HOLD THEM HARMLESS FROM AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS,
LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, REASONABLE
EXPENSES AND REASONABLE DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER
(INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEY'S FEES AND EXPENSES) THAT
MAY BE IMPOSED ON, ASSERTED AGAINST OR INCURRED BY THEM UNDER THE AGREEMENT OR
THE CVRS. TRUSTEE AND ITS REPRESENTATIVES SHALL BE SO INDEMNIFIED UNDER THIS
AGREEMENT FOR ITS OR THEIR OWN ORDINARY OR GROSS NEGLIGENCE, BUT TRUSTEE AND ITS
REPRESENTATIVES DO NOT HAVE THE RIGHT TO BE INDEMNIFIED UNDER THIS AGREEMENT FOR
ITS OR THEIR OWN FRAUD OR WILLFUL MISCONDUCT.
Section 402. 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
Section 401 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, note, other evidence of indebtedness
18
or other paper or document believed by it to be genuine and to have
been signed, made 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, but is not obligated to, consult
with counsel and the 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, bond, debenture, note, coupon,
security, or other paper or document; and
(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 bad faith or willful misconduct;
(i) the Trustee shall not be required to give any note
or surety in respect of the execution of the said trusts and powers or
otherwise in respect of the premises; and
(j) except for a default under Section 901(a), 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.
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 determines, in its discretion, that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it.
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Section 403. Not Responsible for Recitals or Issuance of CVRs.
The recitals contained herein and in the CVRs, except the Trustees
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 or of the CVRs. The Trustee shall not be accountable for the use or
application by the Company of CVRs or the proceeds thereof.
Section 404. 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 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.
Section 405. 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, and no interest on such
funds shall be paid to the Company, the Representative or any Holders. The
Trustee shall be under no liability for interest on any money received by it
hereunder.
Section 406. 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 bad faith; and
(c) to indemnify the Trustee for, and to hold it
harmless against, any loss, liability or expense incurred without 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 406.
When the Trustee incurs expenses or renders services after a Default
specified in Section 901(c) or 901(d) occurs, the reasonable expenses and the
compensation for services (including the reasonable fees and expenses of its
agents and counsel) are intended to constitute expenses of administration under
any bankruptcy law.
20
Section 407. 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 408.
(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, but is not obligated to, 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 the Trustee shall become incapable of acting
or shall be adjudged a 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, (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 himself 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 cause,
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 408, become the
successor Trustee and supersede the successor Trustee 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 himself 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 Trustee Office. If the Company fails to send such notice within ten days
alter acceptance of appointment by a successor Trustee, the successor Trustee
shall cause the notice to be mailed at the expense of the Company.
21
Section 408. 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.
Section 409. 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 an the
part of any of the parties hereto. In case any CVRs 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 CVRs so authenticated with the same effect
as if such successor Trustee had itself authenticated such CVRs; and such
certificate shall have the full force which it is anywhere in the CVRs or in
this Agreement provided that the certificate of the Trustee shall have;
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.
ARTICLE FIVE
THE REPRESENTATIVE
Section 501. Certain Duties and Responsibilities.
(a) The Representative undertakes to perform such duties and only
such duties as are specifically set forth in this Agreement. The Representative
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 man
would exercise or use under the circumstances in the conduct of his own
affairs; provided, however, that the Representative shall not be liable for any
acts or omissions except to the extent that the Representative has engaged in
willful misconduct or bad faith.
(b) No provision of this Agreement shall be construed to relieve
the Representative from liability for its own willful misconduct, except that
no provision of this Agreement shall require the Representative to expend or
risk its own funds or otherwise incur any financial
22
liability in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers.
(c) 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 Representative shall be subject to the provisions
of this Section.
Section 502. Certain Rights of Representative.
The Representative 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
Representative. In addition:
(a) the Representative 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, 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) whenever the Representative shall deem it desirable
that a matter be proved or established prior to taking, suffering or
omitting any action hereunder, the Representative (unless other
evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officer's Certificate;
(c) the Representative 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;
(d) the Representative may execute any of the powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Representative shall not be
responsible for any misconduct or negligence on the part of any agent
or attorney appointed with due care by it hereunder;
(e) the permissive rights of the Representative to do
things enumerated in this Agreement shall not be construed as a duty
and the Representative shall be liable for its willful misconduct or
bad faith; and
(f) the Representative shall not be required to give any
note or surety in respect of the execution of the such powers or
otherwise in respect of the premises.
Section 503. Not Responsible for Recitals or Issuance of CVRs.
The recitals contained herein and in the CVRs shall be taken as the
statements of the Company, and the Representative assumes no responsibility for
their correctness. The Representative makes no representations as to the
validity or sufficiency of this Agreement or of the CVRs. The Representative
shall not be accountable for the use or application by the Company of CVRs or
the proceeds thereof.
23
Section 504. Compensation, Reimbursement and Indemnification of
the Representative.
The Company agrees:
(a) to pay to the Representative $5,000 on the first day
of each month following the execution of this Agreement for the first
12 months following the execution of this Agreement;
(b) to pay to the Representative $3,500 on the first day
of each month thereafter until the CVRs have expired by their terms;
(c) to pay to the Representative 10% of any collections
of the Legacy Receivables specified in Item 3 or Item 4 of Schedule B
attached hereto during any fiscal quarter during the term of this
Agreement within 45 days after the end of such quarter;
(d) except as otherwise expressly provided herein, to
advance the Representative, upon its request, all reasonable expenses
and disbursements incurred or to be incurred by the Representative 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 or disbursement as may be
attributable to its willful misconduct or bad faith; and
(e) to indemnify the Representative for, and to hold it
harmless against, any loss, liability or expense incurred without
willful misconduct or bad faith on its part, arising out of or in
connection with its power or duties under this Agreement, including
the costs and expenses of defending itself against any claim or
liability, including reasonable attorney's fees and expenses, in
connection with the exercise or performance of any of its powers or
duties hereunder, including the enforcement of this Section 504.
Section 505. Resignation and Removal; Appointment of Successor.
(a) The Representative may resign at any time by giving
written notice thereof to the Company.
(b) The Representative may be removed at any time by (i)
the Company if the Representative has engaged in willful misconduct in
the conduct of his duties hereunder or (ii) an Act of the Holders of a
majority of the outstanding CVRs, delivered to the Representative and
to the Company.
(c) In the event that the Representative is removed for
willful misconduct, then the Representative shall not be entitled to
any compensation payable pursuant to Section 504(a), Section 504(b) or
Section 504(c) from and after the date of his removal. In the event
that the Representative is removed for reasons other than willful
misconduct, the Representative shall be entitled to receive (i) the
full amount of the compensation payable pursuant to Section 504(a)
even if such removal is prior to the first anniversary of the date of
the execution of this Agreement, (ii) any amounts payable pursuant to
Section 504(c) that are payable at the time of such removal and (iii)
any amounts that would have been payable pursuant to Section 504(c)
within 12 months following such removal to the extent that the
Representative was the effective cause for the collection of Legacy
Receivables for which such payments under Section 504(c)
24
would have been payable to the Representative but for such removal;
provided, however, any such payments shall be made only from the
collection of Legacy Receivables. The rights under this Section 505(c)
shall be applicable only to the initial Representative, and all
references in this Section 505(c) shall refer to the initial
Representative and not any successor Representative.
(d) If at any time the Representative shall become
incapable of acting or shall be adjudged a bankrupt or insolvent, or a
receiver of the Representative or of its property shall be appointed,
then, in any case, (i) the Company by a Board Resolution may remove
the Representative, 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 himself
and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Representative and the appointment
of a successor Representative.
(e) If the Representative shall resign, be removed or
become incapable of acting, the Company, by a Board Resolution, shall
promptly appoint a successor Representative. If, within 90 days after
such resignation, removal or incapability, or the occurrence of such
vacancy, a successor Representative shall not have been appointed by
the Company, the Holders of the CVRs may appoint a successor
Representative by the Act of the Holders of 25% of the Outstanding
CVRs delivered to the Company. The successor Representative so
appointed shall, forthwith upon its acceptance of such appointment in
accordance with Section 506, become the successor Representative. If
no successor Representative 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 himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a
successor Representative.
(f) The Company shall give notice of each resignation
and each removal of the Representative and each appointment of a
successor Representative 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 Representative. If the Company fails
to send such notice within ten days alter acceptance of appointment by
a successor Representative, the successor Representative shall cause
the notice to be mailed at the expense of the Company.
Section 506. Acceptance of Appointment by Successor.
Every successor Representative appointed hereunder shall execute,
acknowledge and deliver to the Company and to the retiring Representative an
instrument accepting such appointment, and thereupon such successor
Representative, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring
Representative; but, on request of the Company or the successor Representative,
such retiring Representative shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Representative all the
rights, powers and trusts of the retiring Representative. Upon request of any
such successor Representative, the Company shall execute any and all
instruments for more fully and certainly vesting in and confirming to such
successor Representative all such rights, powers and trusts.
25
ARTICLE SIX
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 601. Company to Furnish Trustee Names and Addresses of
Holders.
The Company will furnish or cause to be furnished to the Trustee (a)
semiannually, on the 15th day of June and December of each year, a list, in
such form as the Trustee may reasonably require, of the names and addressee of
the Holders as of a date within 15 days prior to such semiannual date, and (b)
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; provided,
however, that, if and so long as the Trustee shall be the Security Registrar,
no such list need be furnished.
Section 602. Preservation of Information Communications to
Holders.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addressee of Holders contained in the
most recent list furnished to the Trustee as provided in Section 601 and the
names and addressee of Holders received by the Trustee in its capacity as
Security Registrar. The Trustee may destroy any list furnished to it as
provided in Section 601 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
(1) afford such applicants access to the information
preserved at the time by the Trustee in accordance
with Section 602(a), or
(2) 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 602(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 and at such applicant's cost and expense, mail to each Holder whose
name and address appear in the information preserved at the time by the Trustee
in accordance with Section 602(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
26
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.
(c) Every Holder of CVRs, by receiving and holding the same,
agrees with the Company and the Trustee that none of the Company, the Trustee
nor the Representative 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 602(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 602(b).
Section 603. Reports by Company.
The Company shall:
(a) file with the Trustee, within 15 days after the
Company is required to file the same with the Commission, copies of
the annual reports and of the information, documents and other reports
(or copies of such portions of any of the foregoing as the Commission
may from time to time by rules and regulations prescribe) which the
Company may be required to file with the Commission pursuant to
Section 13 or Section 15(d) of the Exchange Act; or, if the Company is
not required to file information, documents or reports pursuant to
either of said Sections, then it shall file with the Trustee and the
Commission, in accordance with rules and regulations prescribed from
time to time by the Commission, such of the supplementary and periodic
information, documents and reports which may be required pursuant to
Section 13 of the Exchange Act in respect of a security listed and
registered on a national securities exchange as may be prescribed from
time to time in such rules and regulations; and
(b) file with the Trustee and the Commission, in
accordance with rules and regulations prescribed from time to time by
the Commission, such additional information, documents and reports
with respect to compliance by the Company with the conditions and
covenants of this Agreement as may be required from time to time by
such rules and regulations.
The Trustee shall transmit, as instructed by the Company in writing
and at the Company's cost and expense, 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, such summaries of any information, documents and
reports required to be filed by the Company pursuant to Subsections (a) and (b)
of this Section as may be required by rules and regulations prescribed from
time to time by the Commission. Any such summaries of information, documents
and reports must be provided by the Company to the Trustee for such mailing.
27
ARTICLE SEVEN
AMENDMENTS
Section 701. Amendments Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, the Representative, 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 and the Representative, for any of the following
purposes:
(a) to convey, transfer, assign, mortgage or pledge to
the Trustee as security for the CVRs any property or assets; or
(b) 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 CVRs; or
(c) 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 in aggregate principal amount of the CVRs to
waive such an Event of Default; or
(d) 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.
Section 702. Amendments with Consent of Holders.
With the consent of the Holders of not less than 66 2/3% of the
outstanding CVRs, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, the Trustee and
the Representative 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, however, that no such amendment shall,
without the consent of the Holder of each Outstanding CVR affected thereby:
28
(a) reduce the amount of the Outstanding CVRs, the
consent of whose Holders is required for any such amendment; or
(b) 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.
Section 703. Execution of Amendments.
In executing any amendment permitted by this Article, the Trustee
shall be entitled to receive, and (subject to Section 401) 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 is not obligated to, enter into any such amendment which affects the
Trustees own rights, duties or immunities under this Agreement or otherwise.
Section 704. 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 theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby.
Section 705. Reference in CVRs to Amendments.
CVRs 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 CVRs 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 Outstanding CVRs.
29
ARTICLE EIGHT
COVENANTS
Section 801. Payment of Amounts, if Any, to Holders.
The Company will duly and punctually pay the amounts, if any, in the
manner provided for in Section 307 on the CVRs in accordance with the terms of
the CVRs and this Agreement.
Section 802. Maintenance of Office or Agency.
As long as any of the CVRs remain Outstanding, the Company will
maintain in the Ardmore, Pennsylvania, an office or agency where CVRs may be
presented or surrendered for payment. The Company also will maintain in the
Ardmore, Pennsylvania, an office or agency (i) where CVRs 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 StockTrans, Inc., 00 Xxxx
Xxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxx 00000 as the office or agency of the
Company where CVRs may be presented for payment, and the Trustee Office as the
office or agency where CVRs 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 the Trustee Office 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 Ardmore, Pennsylvania) where the CVRs 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.
Section 803. Money for CVR Payments to Be Held in Trust.
Any amounts payable to the Holders pursuant to this Agreement,
including amounts related to the collection of Legacy Receivables, shall be
segregated from the other funds of the Company and held in trust for the
benefit of the Holders of the CVRs. All such amounts shall be promptly paid
over to the Paying Agent to be held in trust for such payment or if the Company
shall at any time act as its own Paying Agent, it will, on or before the
Payment Date, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay the amounts, if any, so becoming due
until such sums 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.
30
Whenever the Company shall have one or more Paying Agents for the
CVRs, it will, on or before the Payment Date, deposit with a Paying Agent a sum
in same day funds sufficient to pay the amount, if any, so becoming due, such
sum 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 money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment on any CVR and remaining unclaimed for
one year after the Payment Date shall be paid 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.
Section 804. 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 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.
ARTICLE NINE
REMEDIES OF THE TRUSTEE AND HOLDERS ON EVENT OF DEFAULT
Section 901. Event of Default Defined; Acceleration of Maturity;
Waiver of Default.
"Event of Default", with respect to CVRs, means each one of the
following events which 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):
(a) default in the payment of all or any part of the
amounts payable in respect of any of the CVRs as and when the same
shall become due and payable at the Payment Date or otherwise; or
(b) default in the performance, or breach, of any
covenant or warranty of the Company in respect of the CVRs (other than
a covenant or warranty in respect of the CVRs a default in whose
performance or whose breach is elsewhere in this Section
31
specifically dealt with), and continuance of such default or breach
for a period of 90 days after there has been given, by registered or
certified mail, to the Company and the Representative by the Trustee
or to the Company, the Representative and the Trustee by the Holders
of at least 25% of the Outstanding CVRs, a written notice specifying
such default or breach and requiring it to be remedied and stating
that such notice is a "Notice of Default" hereunder; or
(c) a court having jurisdiction in the premises shall
enter a decree or order for relief in respect of the Company in an
involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee or sequestrator (or similar
official) of the Company or for any substantial part of its property
or ordering the winding up or liquidation of its affairs, and such
decree or order shall remain unstayed and in effect for a period of 30
consecutive days; or
(d) the Company shall commence a voluntary case under
any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or consent to the entry of an order for relief in
an involuntary case under any such law, or consent to the appointment
of or taking possession by a receiver, liquidator, assignee,
custodian, trustee or sequestrator (or similar official) of the
Company or for any substantial part of its property, or make any
general assignment for the benefit of creditors; or
(e) default in any payment due to the Representative
pursuant to Section 504.
If an Event of Default described above occurs and is continuing, then,
and in each and every such case, unless all of the CVRs shall have already
become due and payable, either the Trustee or the Holders of not less than 25%
of the CVRs then outstanding hereunder by notice in writing to the Company (and
to the Trustee if given by the Holders) may, but are not obligated to, declare
the CVRs to be due and payable immediately, and upon any such declaration the
Default Amount shall become immediately due and payable and, thereafter, shall
bear interest at the Default Interest Rate until payment is made to the
Trustee.
The foregoing provisions, however, are subject to the condition that
if, at any time after the CVRs shall have been so declared due and payable, and
before any judgment or decree for the payment of the moneys due shall have been
obtained or entered as hereinafter provided, the Company shall pay or shall
deposit with the Trustee a sum sufficient to pay all amounts which shall have
become due otherwise than by acceleration, with interest upon such overdue
amount at the Default Interest Rate to the date of such payment or deposit, and
such amount as shall be sufficient to cover reasonable compensation to the
Trustee, its agents, attorneys and counsel, and all other expenses and
liabilities incurred and, all advances made, by the Trustee except as a result
of bad faith, and if any and all Events of Default under this Agreement, other
than the nonpayment of the amounts which shall have become due by acceleration,
shall have been cured, waived or otherwise remedied as provided herein, then
and in every such case the Holders of a majority of all the CVRs then
Outstanding, by written notice to the Company and to the Trustee, may waive all
defaults with respect to the CVRs and rescind and annul such declaration and
its consequences, but no such waiver or rescission and annulment shall extend
to or shall affect any subsequent default or shall impair any right consequent
thereof.
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Section 902. Collection of indebtedness by Trustee; Trustee may
Prove Debt.
The Company covenants that in case default shall be made in the
payment of all or any part of the CVRs when the same shall have become due and
payable on the Payment Date or otherwise, then upon demand of the Trustee, the
Company will pay to the Trustee for the benefit of the Holders of the CVRs the
whole amount, in cash, that then shall have become due and payable on all CVRs,
with interest from the date due 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 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, but shall not be obligated, 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
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 the principal of any CVRs shall
then be due and payable as therein expressed or otherwise and irrespective of
whether the Trustee shall have made any demand pursuant to the provisions of
this Section, shall be entitled and empowered, but shall not be obligated, by
intervention in such proceedings or otherwise:
(a) to file and prove a claim or claims for the whole
amount owing and unpaid 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 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
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(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 bad faith
and all other amounts due to the Trustee or any predecessor Trustee
pursuant to Section 406.
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 (in its discretion)
without the possession of any of the CVRs or the production thereof on 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.
Section 903. Application of Proceeds.
Any monies (including CVRs of the Company) 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 CVRs in respect of which monies have been collected thereon, the
payment in exchange for the presented CVRs if only partially paid or upon
surrender thereof if fully paid:
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 bad faith, and all other amounts due to the Trustee or any
predecessor Trustee pursuant to Section 406;
SECOND: To the payment of all amounts due to the
Representative pursuant to Section 504;
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THIRD: 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
FOURTH: To the payment of the remainder, if any, to the
Company or any other person lawfully entitled thereto.
Section 904. Suits for Enforcement.
In case an Event of Default has occurred, has not been waived and is
continuing, the Trustee may, but is not obligated to, 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.
Section 905. 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.
Section 906. 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
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby and the Trustee for 60 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 909;
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.
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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.
Section 907. Unconditional Right of Holders to Institute Certain
Suits.
Notwithstanding any other provision in this Agreement and any
provision of any CVR, the right of any Holder of any CVR to receive payment of
the amounts payable in respect of such CVR on or after the respective due dates
expressed in such CVR, or to institute suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected
without the consent of such Holder.
Section 908. Powers and Remedies Cumulative; Delay or Omission
Not Waiver of Default.
Except as provided in Section 906, 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 906, 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.
Section 909. 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 the Trustee is paid in
advance for its anticipated expenses and compensation for its services in
following such direction(s), or is satisfied that it will be paid therefore;
and provided further that (subject to the provisions of Section 401) 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 401) the
Trustee shall have no duty to ascertain whether or not such actions or
forbearances are unduly prejudicial to such Holders.
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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 action it
reasonably believes is not inconsistent with such direction or directions by
Holders.
Section 910. Waiver of Past Defaults.
Prior to the declaration of the acceleration of the maturity of the
CVRs as provided in Section 901, in the case of a default or an Event of
Default specified in clause (b), (c) or (d) of Section 901, the Holders of a
majority of all the CVRs then outstanding may waive any such default or Event
of Default, and its consequences, except a default in respect of a covenant or
provisions hereof which cannot be modified or amended without the consent of
the Holder of each CVR affected. In the case of any such waiver, the Company,
the Trustee and the Holders of the CVRs shall be restored to their former
positions and rights hereunder, respectively; but no such waiver shall extend
to any subsequent or other default or impair any right consequent thereon.
Upon any such waiver, such default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured. and not to have occurred for
every purpose of this Agreement; but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
Section 911. 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 of which the Trustee has been notified in writing, such
notice to be transmitted within 90 days after the later of the occurrence
thereof or the written notification to the Trustee thereof, unless such
defaults shall have been cured before the giving of such notice (the term
"default" or "defaults" for the purposes of this Section being hereby defined
to mean any event or condition which is, or with notice or lapse of time or
both would become, an Event of Default); provided that, except in the case of
default in the payment of the amounts payable in respect of any of the CVRs,
the Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee, or a trust committee of directors
or trustees and/or Responsible Officers of the Trustee in good faith determines
that the withholding of such notice is in the interests of the Holders.
Section 912. Right of Court to Require Filing of Undertaking to
Pay Costs.
All parties to this Agreement agree, and each Holder of any CVR by his
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
37
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 TEN
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Section 1001. Company May Consolidate, Etc.
(a) The Company 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:
(1) in case the Company shall consolidate with or merge
into any other Person or convey, transfer or lease
its properties and assets substantially as an
entirety to any person, 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;
(2) immediately after giving effect to such transaction
and treating any indebtedness which becomes an
obligation of the Surviving Person, the Company or
any Subsidiary as a result of such transaction as
having been incurred by the Surviving Person, the
Company or such Subsidiary at the time of such
transaction, no Event of Default shall have happened
and be continuing; and
(3) 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.
(b) Solely for purposes of this Section 1001, "convey, transfer
or lease its properties and assets substantially as an entirety" shall mean
properties and assets contributing in the aggregate at least 80% of the
Company's total revenues as reported in the Company's last available periodic
financial report (quarterly or annual, as the case may be) filed with the
Commission.
Section 1002. Successor Substituted.
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 1001, the
Surviving Person shall succeed to, and be
38
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, except in the case of a lease, the
predecessor corporation shall be relieved of all obligations and covenants
under this Agreement and the CVRs.
Section 1003. Opinion of Counsel to Trustee.
The Trustee, subject to the provisions of Sections 401 and 402, may
receive an Opinion of Counsel, prepared in accordance with Sections 102 and
103, 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.
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.
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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.
PMR CORPORATION
By: /s/ Xxxxx Xxxxxx
----------------------------------------
Name: Xxxxx Xxxxxx
Title: Chief Executive Officer
Attest: /s/ Xxxxxx Xxxxx
----------------------
Title:
STOCKTRANS, INC., as Trustee
By: /s/ Xxxxxxxx Xxxxxx
----------------------------------------
Name: Xxxxxxxx Xxxxxx
Title:
Attest: /s/ Xxxxxxxxx Xxxxxx
----------------------
Title:
By: /s/ Xxxx Xxxxxx
----------------------------------------
Xxxx Xxxxxx, as Representative
[SIGNATURE PAGE TO CONTINGENT VALUE RIGHTS AGREEMENT]
EXHIBIT A
1. Consulting Agreement with Alameda County Medical Center dated March 8,
2002.
2. Transportation Agreement with Alameda County Medical Center dated
November 17, 1999.
3. License Agreement with Conundrum Communications, Inc. dated July 31,
2001.
4. Management and Affiliation Agreement dated April 13, 1995, between
Mental Health Cooperative, Inc. and Tennessee Mental Health
Cooperative, Inc. with Addendum, as amended.
5. Provider Agreement dated December 4, 1995, between Tennessee
Behavioral Health, Inc. and Tennessee Mental Health Corporations,
Inc., as amended.
6. Provider Participation Agreement dated February 13, 1996, among Green
Spring Health Services, Inc., AdvoCare, Inc. and Tennessee Mental
Health Cooperative, Inc., as amended.
7. Management Agreement between PMR Corporation and New Center Community
Health Services.
EXHIBIT B
1. LITTLE ROCK COMMUNITY MENTAL HEALTH CENTER
2. XXXXXX XXXXXX MENTAL HEALTH MENTAL RETARDATION
