PUT AND CALL AGREEMENT

EX-10.22 4 exhibit10-22.htm PUT AND CALL AGREEMENT, DATED JULY 21, 2010, BY AND AMONG VISHAY PRECISION exhibit10-22.htm

PUT AND CALL AGREEMENT

PUT AND CALL AGREEMENT (this “Agreement”) dated as of July 21, 2010 between Vishay Precision Group, Inc., a Delaware corporation (the “Company”), the Put/Call Agent (as defined herein) and each of the holders of the Notes due December 13, 2102 (the “Notes”) issued by the Company.

WHEREAS, Vishay Intertechnology, Inc., a Delaware corporation (“Vishay Intertechnology”) issued notes (the “Vishay Intertechnology Notes”) pursuant to that certain Note Instrument dated as of December 13, 2002 (the “Vishay Intertechnology Note Instrument”); and

WHEREAS, Vishay Intertechnology, American Stock Transfer & Trust Co. and the holders of the Vishay Intertechnology Notes entered into that certain Put and Call Agreement, dated as of December 13, 2002 (the “Vishay Intertechnology Put and Call Agreement”); and

WHEREAS, pursuant to the Vishay Intertechnology Put and Call Agreement, Vishay Intertechnology agreed that in case it shall at any time pay a dividend or make a distribution to all holders of its common stock consisting of the capital stock of any class or series, or similar interests, of or relating to a subsidiary or other business entity of Vishay Intertechnology, then Vishay Intertechnology shall take such action and shall cause the subsidiary or other business entity whose capital stock was paid as a dividend or distributed by Vishay Intertechnology to take such action so that each of the notes issued pursuant to the Vishay Intertechnology Note Instrument shall be deemed exchanged as of the effective date of such transaction, for a combination of new floating rate unsecured Vishay Intertechnology loan notes and floating rate unsecured loan notes of the subsidiary or other business entity whose capital stock was paid as a dividend or distributed by Vishay Intertechnology; and

WHEREAS, Vishay Intertechnology and the Company entered into that certain Master Separation Agreement, dated as of June 22, 2010 (the “Master Separation Agreement”), providing for the spin-off of the Company by Vishay Intertechnology in the form of a tax free dividend of the then-outstanding shares of Common Stock to the holders of the common stock of Vishay Intertechnology and the then-outstanding shares of class B common stock of the Company to the holders of class B common stock of Vishay Intertechnology; and

WHEREAS, the Company has agreed under the terms of the Master Separation Agreement to comply with the obligation under the Vishay Intertechnology Put and Call Agreement to issue floating rate unsecured loan notes to the holders of the Vishay Intertechnology Notes; and

NOW, THEREFORE, in consideration of the premises and the mutual agreements herein set forth, the parties hereto agree as follows:

ARTICLE I
DEFINITIONS

Section 1.01. Definitions. As used in this Agreement, the following terms, when capitalized, shall have the meanings assigned below:

“Assignment Form” means an assignment form substantially in the form attached hereto as Annex I.

“Business Day” means any day other than a Saturday, Sunday or legal holiday on which the commercial banks in the City of New York, Borough of Manhattan, are required or permitted by law to remain closed.

“Call” means the right of the Company to call all of the Notes in exchange for the issuance of shares of Common Stock or cash in accordance with the provisions of Article III.

“Call Exercise Notice” has the meaning described in Section 3.02.

“Call Period” means the period beginning on January 2, 2018 and ending on the date that is 30 days prior to the Maturity Date.

“Call Target Price” means $46.47 per share of Common Stock, which price shall be appropriately adjusted in the event of any stock dividend, stock split, reverse stock split, combination, recapitalization, reclassification, exchange or similar transaction with respect to the shares of Common Stock.

“Common Stock” means the common stock, par value US$.10 per share, of the Company and any other security exchanged or substituted for such common stock or into which such common stock is converted in any recapitalization, reorganization, merger, consolidation, share exchange or other business combination transaction, including any reclassification consisting of a change in par value or a change from par value to no par value or vice versa.

“Company” has the meaning set forth in the introduction to this Agreement.

“Daily Market Price” for any trading day means the volume-weighted average of the per share selling prices on the New York Stock Exchange or other principal United States securities exchange or inter-dealer quotation system on which the relevant equity security is then listed or quoted or, if there are no reported sales of the relevant equity security on such trading day, the average of the high bid and low ask price for the relevant equity security on the last trading day on which such sale was reported or, if there are no high bid and low ask prices, the Daily Market Price shall be the per share fair market value of the relevant equity security as determined by an investment banking firm of national reputation and standing selected by the Company and reasonably acceptable to a Majority of the Holders (in which case, only a single determination of value need be made by an investment banking firm, notwithstanding any provision in the Agreement requiring an average over more than one (1) trading day).

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder, as the same may be amended from time to time.

“Holder” means the Initial Holders and their successors and permitted assigns who become holders of Notes in a manner permitted thereunder, in each case until the relevant person ceases to be a holder of Notes in accordance with the provisions of the Notes and this Agreement.

“Initial Holder” means the persons to whom or for whose benefit the Notes are issued under the terms of the Vishay Intertechnology Put and Call Agreement and the terms of the Master Separation Agreement and whose names appear on the signature page to this Agreement, in each case until the relevant person ceases to be a Holder of Notes in accordance with the provisions hereof.

“Interest Rate Hurdle” means the “Target Price” (initially $59.75 per Common Share), as defined in Schedule 2 of the Notes which may be adjusted pursuant to the provisions herein, and whereby (pursuant to Schedule 2, Item 3(c) of the Notes) the interest rate on the Notes is adjusted for the period commencing on or after January 1, 2011 based upon certain performance parameters of the shares of Common Stock.

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“Issue Date” means the date of this Agreement, which is the date as of which the Notes are first issued.

“Majority of the Holders” means, at any relevant time, the Holders of a majority of the nominal amount of the Notes that are at any relevant time outstanding.

“Maturity Date” means December 31, 2102, the final maturity date of the Notes. “Notes” has the meaning set forth in the introduction to this Agreement.

“person” means any individual, corporation, partnership, limited liability company, trust, foundation, joint venture, association, joint stock company, unincorporated organization, government agency, estate or other entity of any nature.

“Put” means the right of a Holder to require the Company to exchange the Notes, in whole or in part (as permitted herein), for shares of Common Stock in accordance with the provisions of Article II.

“Put/Call Agent” means American Stock Transfer & Trust Co., a New York corporation, or any successor as provided in Article V.

“Put/Call Rate” means $22.57 per share, subject to adjustment pursuant to Article IV herein.

“Put Exercise Notice” means the notice of intention to exercise the Put in the form attached to this Agreement in the form of Annex II.

“Put Period” means the period during which the Notes are outstanding, ending on the Maturity Date.

“SEC” means the United States Securities and Exchange Commission.

“Securities Act” means the United States Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder, as the same may be amended from time to time.

Where the reference “hereof,” “hereby” or “herein” appears in this Agreement, such reference shall be deemed to be a reference to this Agreement as a whole. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” Words denoting the singular include the plural, and vice versa, and references to it or its or words denoting any gender shall include all genders.

ARTICLE II
THE PUT

Section 2.01. Put Exercise Generally. At any time during the Put Period, a Holder may exercise the Put with respect to (i) the aggregate nominal amount of all Notes held by such Holder or (ii) a portion of the nominal amount of any Note in integral multiples of US$2,000,000. The number of shares of Common Stock issuable upon exercise of the Put shall equal (i) the nominal amount of the Notes for which the Put is being exercised by the Holders, divided by (ii) the Put/Call Rate as of the Put Date (as defined below). No adjustment to the Put/Call Rate shall be made in respect of any accrued but unpaid interest on the Notes, whether before or after the record date for payment of any such interest.

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Section 2.02. Put Exercise Procedure. To exercise the Put, the Holder must (i) surrender to the Put/Call Agent (at its office designated for such purpose, the initial address of such office being listed in Section 6.01 hereof) the certificate or certificates representing the Notes to be exchanged together with the Put Exercise Notice duly completed and executed, (ii) deliver a form of transfer in the form specified by the Notes executed by the Holder with the name of the transferee left blank and (iii) pay any transfer or similar tax required to be paid by the Holder pursuant to Section 2.04.

The date on which the Holder satisfies all the requirements for exercise of the Put is referred to as the “Put Date.” As soon as practicable after the Put Date, the Company will cause the Put/Call Agent to deliver to the Holder in exchange for the Notes (or, pursuant to this Section 2.02, a portion thereof) as to which the Put has been exercised a certificate (or other evidence of ownership) ,for the number of full shares of Common Stock issuable upon the exercise of the Put and cash in lieu of any fractional share determined pursuant to Section 2.03. The person in whose name the certificate is registered shall be treated as a stockholder of record on and after the Put Date, and such person, following the exchange of the relevant Note or part thereof in accordance herewith, shall no longer be a Holder of the Notes as to which the Put has been exercised as of such date.

If the Holder exercises the Put for more than one Note at the same time, the number of shares of Common Stock issuable upon exchange of the Notes shall be based on the total nominal amount of the Notes exchanged.

Upon surrender of a Note that is exchanged in part, the Company will execute and deliver to the Holder a Note certificate in an authorized denomination equal in nominal amount to the unexchanged portion of the Note surrendered.

Section 2.03. Fractional Shares. The Company will not issue a fractional share of Common Stock upon exchange of a Note. Instead, the Company will deliver cash for the fractional share, to the nearest 1/10,000th of a share, equal to an amount determined by multiplying (i) such fractional share by (ii) the closing sale price of the Common Stock on the principal exchange or quotation system on which the Common Stock is then traded (or if there is no sale of the Common Stock reported on such trading day, the average of the low ask and high bid prices for the Common Stock on such trading day) on the last trading day prior to the Put Date and rounding the product to the nearest whole cent.

Section 2.04. Taxes on Conversion. If a Holder exercises the Put, the Company shall pay any documentary, stamp or similar issue or transfer tax due on the issue of shares of Common Stock upon exchange. However, the Holder shall pay any such tax which is due because the Holder requests the shares to be issued in a name other than the Holder’s name. The Put/Call Agent may refuse to deliver the certificates representing the Common Stock being issued in a name other than the Holder’s name until the Put/Call Agent receives a sum sufficient to pay any tax which will be due because the shares are to be issued in a name other than the Holder’s name. Nothing herein shall preclude any tax withholding required by law or regulations by the Company.

Section 2.05. Reservation of Stock, Validity of Shares; Listing. The Company will at all times reserve and keep available, out of the aggregate of its authorized but unissued shares of Common Stock or its authorized and issued shares of Common Stock held in its treasury, for the purpose of enabling it to satisfy any obligation to issue shares of Common Stock upon exchange of the Notes following exercise of the Put, the maximum number of shares of Common Stock which may then be deliverable upon the exchange of all outstanding Notes upon the exercise of the Put. The Company may in its discretion use such shares of Common Stock reserved for the Put pursuant to this Section with respect to any Call. The Company or, if appointed, the transfer agent for the Common Stock (the “Transfer Agent”) and every subsequent transfer agent for any shares of the Company’s capital stock issuable upon the exchange of any of the Notes upon exercise of the Put shall be authorized and directed at all times to reserve such number of authorized ‘shares as shall be required for such purpose. The Company shall keep a copy of this Agreement on file with the Transfer Agent and with every subsequent transfer agent for any shares of the Company’s capital stock issuable upon the exchange of the Notes. The Company will furnish such Transfer Agent a copy of all notices of adjustments and certificates related thereto, transmitted to each Holder.

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All shares of Common Stock delivered upon exchange of the Notes following exercise of the Put shall be newly issued shares or treasury shares, shall be duly and validly issued and fully paid and nonassessable and shall be free from preemptive rights and free of any lien or adverse claim.

The Company will list or cause to have quoted such shares of Common Stock issuable upon exercise of the Put on each securities exchange or such other market on which the Common Stock is then listed or quoted.

ARTICLE III
THE CALL

Section 3.01. Call Exercise Generally. At any time during the Call Period, the Company, at its option, may exercise the Call with respect to all of the Notes, as provided herein. Upon exercise of the Call,

(i) if the Common Stock has had a Daily Market Price at or above the Call Target Price then in effect for 20 or more out of 30 consecutive trading days at any time after the Issue Date, the Company shall issue to the Holders that number of shares of Common Stock equal to (x) the nominal amount of the Notes exchanged divided by (y) the Put/Call Rate as of the Call Date (as defined below) and pay to the Holders an amount in cash equal to accrued but unpaid interest on the Notes to the Call Date or;

(ii) if the Common Stock has not had a Market Value at or above the Call Target Price for 20 or more out of 30 consecutive trading days at any time after the Issue Date, at the election of the Company, the Company shall either-

(1) issue to the Holders that number of shares of Common Stock equal to (x) the nominal amount of the Notes exchanged divided by (y) the average of the Daily Market Prices for the ten trading days ending two trading days prior to the date that the Call Exercise Notice is first sent to Holders, and pay to the Holders an amount in cash equal to accrued but unpaid interest on the Notes to the Call Date; or

(2) pay to the Holders $1.00 for each $1.00 nominal amount of Notes subject to the Call, plus an amount in cash equal to any accrued but unpaid interest on the Notes to the Call Date.

No adjustment to the Put/Call Rate shall be made in respect of any accrued but unpaid interest on the Notes, whether before or after the record date for payment of any such interest.

The date that the Company specifies for the exchange of the Notes pursuant to exercise of the Call as specified herein is referred to as the “Call Date.”

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The Company shall give the notice of a Call to the Put/Call Agent at least thirty (30) days but not more than sixty (60) days before the Call Date (unless a shorter notice shall be satisfactory to the Put/Call Agent). The Company shall accompany such notice with a copy of the register of the record owners of the Notes then outstanding and shall promptly furnish the Put/Call Agent with any changes in such register prior to the Call Date.

Section 3.02. Call Exercise Notice. At least thirty (30) days but not more than sixty (60) days before a Call Date, the Company shall send a notice of redemption (“Call Exercise Notice”), by a method permitted for the delivery of a notice to the Holders pursuant to Section 6.1 below, to each Holder of Notes at its registered address.

The Call Exercise Notice shall state:

(1) the Call Date;

(2) whether the Call is for shares or cash;

(3) if the call is for shares, the Put/Call Rate (as subject to adjustment pursuant to Article IV prior to the Call Date) or, in the case of a Call exercised pursuant to clause (ii)(1) of Section 3.01, the number of shares of Common Stock exchangeable for each $1,000 nominal amount of Notes;

(4) if the Call is for cash, that the Company will pay to the Holders $1.00 for each $1.00 nominal amount of Notes subject to the Call;

(5) the accrued but unpaid interest to the Call Date, to the extent it can be determined;

(6) the name and address of the Put/Call Agent;

(7) that the Notes must be surrendered to the Put/Call Agent to receive the cash or shares of Common Stock issuable in exchange for the Notes, as applicable; and

(8) that, unless the Company defaults in issuing the shares of Common Stock or to pay the cash as the case may be, in exchange for the Notes called for exchange, such Notes will cease to accrue interest on and after the Call Date.

At the Company’s request, the Put/Call Agent shall give the notice of exercise of the Call in the Company’s name and at the Company’s expense, provided that the Company makes such request at least fifteen (15) days (unless a shorter period shall be acceptable to the Put/Call Agent) prior to the date such notice of redemption must be mailed.

Section 3.03. Competing Notices/Effect of Notice of Redemption. If, following service of a Call Exercise Notice and prior to the date falling five (5) days before the relevant Call Date, a Put Exercise Notice is served by any Holder pursuant to Article II above, then that Call Exercise Notice shall cease to have effect in relation to the Notes subject to the Put Exercise Notice. Subject thereto and provided the relevant Notes remain outstanding on the Call Date, once notice of exercise of the Call is given pursuant to Section 3.02, the Notes will become mandatorily exchangeable on the Call Date. Upon surrender to the Put/Call Agent, the Notes shall be exchanged for shares of Common Stock or cash in accordance with Section 3.01.

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Section 3.04. Call Date. Subject only to Section 3.03 above and Section 3.05 below, on the Call Date, -upon surrender by a Holder to the Put/Call Agent of, and provision to the Put/Call Agent of a duly executed form of transfer in relation to, the Notes, the Notes of any Holder shall be exchanged on the Call Date by the Put/Call Agent for the appropriate number of shares of Common Stock or cash as provided in Section 3.01 above, and the Put/Call Agent shall in addition pay to each Holder its entitlement of cash in lieu of any fractional share determined pursuant to Section 3.06 herein and any interest accrued but unpaid.

Section 3.05. Deposit of Redemption Price. The Company shall make available to the Put/Call Agent sufficient Common Stock to exchange the Notes on the Call Date, together with cash in lieu of fractional shares as provided in Section 3.06 and in respect of accrued but unpaid interest.

Section 3.06. Fractional Shares. The Company will not issue a fractional share of Common Stock upon exchange of a Note. Instead, the Company will deliver cash for the fractional share, to the nearest 1/10,000th of a share, equal to an amount determined by multiplying (i) such fractional share by (ii) the closing sale price of the Common Stock on the principal exchange or quotation system on which the Common Stock is then traded (or if there is no sale of the Common Stock reported on such trading day, the average of the low ask and high bid prices for the Common Stock on such trading day) on the last trading day prior to the Call Date and rounding the product to the nearest whole cent.

Section 3.07. Taxes on Conversion. If the Company exercises the Call, the Company shall pay any documentary, stamp or similar issue or transfer tax due on the issue of shares of Common Stock upon exchange. However, the Holder shall pay any such tax which is due because the Holder requests the shares to be issued in a name other than the Holder’s name. The Put/Call Agent may refuse to deliver the certificates representing the Common Stock being issued in a name other than the Holder’s name until the Put/Call Agent receives a sum sufficient to pay any tax which will be due because the shares are to be issued in a name other than the Holder’s name. Nothing herein shall preclude any tax withholding required by law or regulations by the Company.

Section 3.08. Validity of Shares, Listing. All shares of Common Stock delivered upon exchange of the Notes following exercise of the Call shall be newly issued shares or treasury shares, shall be duly and validly issued and fully paid and nonassessable and shall be free from preemptive rights and free of any lien or adverse claim.

The Company will list or cause to have quoted such shares of Common Stock issuable upon exercise of the Call on each securities exchange or such other market on which the Common Stock is then listed or quoted.

ARTICLE IV
ADJUSTMENTS TO THE PUT/CALL RATE

Section 4.01. Adjustments to the Put/Call Rate. The Put/Call Rate is subject to adjustment from time to time upon the occurrence of the events enumerated in this Section 4.01.

(a) Declaration of Stock Dividend, Splits, Reverse Splits or Reclassification or Reorganization: other Distributions.

(i) In case the Company shall declare any dividend or other distribution upon its outstanding shares of Common Stock payable in Common Stock or shall subdivide its outstanding shares of Common Stock into a greater number of shares, then the Put/Call Rate, the Call Target Price and the Interest Rate Hurdle shall be decreased in inverse proportion to the increase in the number of shares of Common Stock outstanding through such dividend, other distribution, or subdivision. In case the Company shall at any time combine the outstanding shares of its Common Stock into a smaller number of shares, the Put/Call Rate, the Call Target Price and the Interest Rate Hurdle shall be increased in inverse proportion to the decrease in the number of shares of Common Stock outstanding through such combination. The Company shall cause a notice to be mailed to each Holder at least ten (10) days prior to the applicable record date for the activity covered by this Section 4.01(a)(i). The Company’s failure to give the notice required by this Section 4.01(a)(i) or any defect therein shall not affect the validity of the activity covered by this Section 4.01(a)(i). Notwithstanding the foregoing, nothing in this paragraph will prejudice the rights of the Holders pursuant to this Agreement.

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(ii) In case the Company shall at any time (including in connection with any merger, consolidation or sale of all or substantially all the assets of the Company in which Section 4.01(d) hereof is not applicable) (i) issue any evidence of indebtedness, shares of its stock or any other securities to all holders of shares of Common Stock by reclassification of its shares of Common Stock, (ii) distribute any rights, options or warrants to purchase or subscribe for any evidence of indebtedness, shares of its stock (other than distributions for which adjustment may be made pursuant to Section 4.01(b) or Section 4.01(e)) or any other securities to all holders of shares of Common Stock, (iii) distribute cash (other than regular quarterly or semi-annual cash dividends) or other property to all holders of shares of Common Stock, or (iv) issue by means of a capital reorganization other securities of the Company in lieu of the Common Stock or in addition to the Common Stock, then the Note shall be adjusted as is determined to be appropriate so that the Holder of each Note shall be entitled to receive the kind and number of shares or other securities of the Company or the successor entity or cash or other property that the Holder would have owned or have been entitled to receive after the happening of the event described above, had such Note been converted immediately prior to the happening of such event or any record date with respect thereto. The Company shall cause a notice to be mailed to each Holder at least ten (10) days prior to the applicable record date for the activity covered by this Section 4.01(a)(ii). The Company’s failure to give the notice required by this Section 4.01(a)(ii) or any defect therein shall not affect the validity of the activity covered by this Section 4.01(a)(ii). Notwithstanding the foregoing, nothing in this paragraph will prejudice the rights of the Holders pursuant to this Agreement.

(iii) An adjustment made pursuant to this Section 4.01(a) shall become effective immediately after the effective date of such event retroactive to the record date, if any, for such event.

(b) Adjustment for Rights Issuance.

(i) (A) In case the Company shall at any time distribute any rights, options or warrants to all holders of Common Stock entitling them, for a period expiring within sixty (60) days after the date of determination of the stockholders entitled to receive such rights (the “Record Date”) (or any longer period resulting from the extension of the exercise period which is announced following the time that the rights, options or warrants are first issued) for such distribution, to purchase or subscribe for shares of Common Stock at a price per share less than ninety percent (90%) of the Daily Market Price of the Common Stock on the Record Date, then the Put/Call Rate, the Call Target Price and the Interest Rate Hurdle in effect immediately prior thereto shall be adjusted as provided below:

Put Call Rate Adjustment. The Put Call Rate Adjustment shall be determined by the following formula:

R = Ro	x	(O + C/M)
		(O + A)

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where:

R	=	the adjusted Put/Call Rate;

Ro	=	the Put/Call Rate immediately prior to such adjustment;

0	=	the number of shares outstanding immediately prior to the issuance of such rights, options or warrants as referred to in this Section 4.01(b)(i)(A);

A	=	the maximum number of shares issuable pursuant to such rights, options or warrants as referred to in this Section 4.01(b)(i)(A);

C	=	the aggregate consideration receivable by the Company for the issuance of Common Stock upon exercise of such rights, options or warrants as referred to in this Section 4.01(b)(i)(A); and

M	=	the average of the Daily Market Prices of the Common Stock for the ten (10) consecutive trading days immediately preceding the Record Date;

Call Target Price Adjustment. The Call Target Price shall be determined in accordance with the following formula:

T = To	x	(O + C/M)
		(O + A)

where:

T	=	the adjusted Call Target Price;

To	=	the Call Target Price immediately prior to such adjustment;

and the other symbols in such formula have the meanings specified under “Put/Call Rate Adjustment” above and the preceding paragraph.

Interest Rate Hurdle Adjustment. The Interest Rate Hurdle applicable shall be determined in accordance with the following formula:

I = Io	x	(O + C/M)
		(O + A)

where:

I	=	the adjusted Interest Rate Hurdle;

Io	=	the Interest Rate Hurdle immediately prior to such adjustment;

and the other symbols in such formula have the meanings specified under “Put/Call Rate Adjustment” above and the preceding paragraph; provided that no adjustments shall be made in the event that R would exceed Ro.

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(B) The adjustments shall become effective immediately after the Record Date for the determination of shareholders entitled to receive the rights, warrants or options to which this Section 4.01(b)(i) applies. If less than all of such rights, warrants or options have been exercised when such rights, warrants or options expire, then the Put/Call Rate, the Call Target Price and the Interest Rate Hurdle shall promptly be readjusted to the Put/Call Rate, the Call Target Price and the Interest Rate Hurdle that would then be in effect had the adjustment upon the issuance of such rights, warrants or options been made on the basis of the actual number of shares of Common Stock issued upon the exercise of such rights, warrants or options.

(ii) In case the Company shall at any time distribute any rights, options or warrants to all holders of Common Stock entitling them, for a period expiring more than sixty (60) days after the Record Date therefor (excluding any rights, options or warrants originally issued with an exercise period of sixty (60) days or less, which, by virtue of one or more extensions, expire more than sixty (60) days after the Record Date therefor), to purchase or subscribe for shares of Common Stock at a price per share less than ninety percent (90%) of the Market Price of the Common Stock as of such Record Date, then the Company shall similarly distribute such rights, options or warrants to the Holders on such Record Date (without any exercise of the Put by Holders) as if such Holders had exercised their Put immediately prior to the Record Date.

(c) Liquidation, Dissolution or Winding Up. Notwithstanding any other provisions hereof, in the event of the liquidation, dissolution, or winding up of the affairs of the Company (other than in connection with a consolidation, merger or sale or conveyance of all or substantially all of its assets or a Change or Spin-Off), the right to exchange the Notes shall terminate and expire at the close of business on the last full Business Day before the earliest date fixed for the payment of any distributable amount on the Common Stock. The Company shall cause a notice to be mailed to each Holder at least ten (10) Business Days prior to the applicable record date for such payment stating the date on which such liquidation, dissolution or winding up is expected to become effective, and the date on which it is expected that holders of record of shares of Common Stock shall be entitled to exchange their shares of Common Stock for securities or other property or assets (including cash) deliverable upon such liquidation, dissolution or winding up, and that each Holder may exercise the Put during such ten (10) Business Day period and, thereby, receive consideration in the liquidation on the same basis as other previously outstanding shares of the same class as the shares acquired upon exercise. The Company’s failure to give notice required by this Section 4.01(c) or any defect therein shall not affect the validity of such liquidation, dissolution or winding up. Notwithstanding the foregoing, nothing in this paragraph will prejudice the rights of the Holders pursuant to this Agreement.

(d) Merger, Consolidation, etc. In any event when (A) any person (the “ Acquirer”) directly or indirectly acquires the Company in a transaction in which the Company is merged with or into or consolidated with another person or (B) the Company sells or conveys all or substantially all of its assets to another person (unless, subsequent to such merger, consolidation or other transaction, the Company is the surviving entity and has reporting obligations under the Exchange Act as a result of having common equity securities outstanding, in which case, this Section shall not apply with respect to such merger, consolidation or other transaction) (such merger, consolidation or other transaction referred to hereinafter as a “ Change”)), then, in the case of each such Change, the following shall occur:

(i) The Company shall give written notice of any Change to each Holder, in accordance with Section 6.01 hereof, at least ten (10) Business Days immediately preceding but not including the date of effectiveness of the Change and shall also include in such written notice whether the Acquirer is effecting Section 4.01(d)(ii) or Section 4.01(d)(iii) below. The Company’s failure to give notice required by this Section 4.01(d) or any defect therein shall not affect the validity of the Change covered by this Section 4.01(d). Notwithstanding the foregoing, nothing in this paragraph will prejudice the rights of the Holders pursuant to this Agreement.

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In addition, at the option of the Acquirer, the Acquirer will effect either Section 4.01(d)(ii) or Section 4.01(d)(iii) below, with respect to the rights provided to the Holders pursuant to the Notes and the Put and Call (provided that, if Section 4.01(d)(ii) below is not available for whatever reason, the Acquirer will effect Section 4.01(d)(iii) below). Notwithstanding the foregoing, if the Acquirer is not a public company with reporting obligations under the Exchange Act (or is a continuing public company only by virtue of securities which are not common equity securities under the Exchange Act), then the Acquirer will effect the steps described in Section 4.01(d)(iii)(A),(B), (C) and (D) below (and shall result in the automatic election of Section 3.01(ii)(2).

(ii) The Roll-Over Option.

(A) The Notes shall remain the outstanding obligations of the Company.

(B) The Company shall procure that the Acquirer provides a full and unconditional guarantee on terms reasonably satisfactory to a Majority of the Holders, which shall inure for the benefit of all holders of the Notes (the “Guarantee”) of the prompt payment when due by the Company of principal and interest under or arising out of the Notes. Such Guarantee shall rank pari passu equally and ratably without discrimination, subordination or preference as an unsecured debt obligation of the Acquirer.

(C) The Company shall procure that the Acquirer executes an agreement supplemental hereto that provides that the Acquirer will be bound by this Agreement;

(D) In the case of each such Change, thereafter each Holder shall receive, upon such Holder’s exercise of the Put pursuant to this Agreement, shares of the Acquirer (the “Acquirer Shares”) as opposed to shares of the Company, as provided for prior to such Change. In addition, the Put/Call Rate, the Call Target Price, and the Interest Rate Hurdle on the Notes shall be determined by the following formulae:

Put/Call Rate Adjustment. After the Change, the Put/Call Rate shall be adjusted in the following manner:

PC = PCo x (M/Mo)

where:

PC	=	the adjusted Put/Call Rate.

PCo	=	the Put/Call Rate immediately prior to such adjustment.

Mo	=	the average of the Daily Market Prices of the Common Stock for the first ten (10) consecutive trading days-immediately preceding but not including the date of effectiveness of the Change.

M	=	the fair market value per share of the Acquirer Shares. As used in this formula, “fair market value” shall mean the average Daily Market Price of the Acquirer Shares for the ten (10) consecutive trading days immediately preceding but not including the date of effectiveness of the Change.

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Call Target Price Adjustment. After the Change, the Call Target Price shall be adjusted in the following manner:

T = To x (M/ Mo)

Where:

T	=	the adjusted Call Target Price.

To	=	the Call Target Price immediately prior to such adjustment.

and the other symbols in such formula have the meanings specified under “Put/Call Rate Adjustment” above and the preceding paragraph.

Interest Rate Hurdle Adjustment. After the Change, the Interest Rate Hurdle applicable to the Notes shall be adjusted in the following manner:

I = Io x (M/ Mo)

Where:

I	=	the adjusted Interest Rate Hurdle;

Io	=	the Interest Rate Hurdle immediately prior to such adjustment.

and the other symbols in such formula have the meanings specified under “Put/Call Rate Adjustment” above and the preceding paragraph.

(iii) The Acceleration Option. If the Acquirer chooses, or if Section 4.01(d)(ii) above is not available, or if the Acquirer is required to do so pursuant to Section 4.01(d)(i) above, the Acquirer shall provide a notice to the Company to such effect at least ten (10) Business Days immediately preceding but not including the date of effectiveness of the Change, and the Company shall inform the Holders as soon as reasonably practicable thereafter, but in any event not later than five (5) Business Days immediately preceding but not including the effective date of the Change. In any such case, the following shall occur:

(A) The Call Date shall be accelerated to be immediately prior to the effectiveness of the Change;

(B) Except as provided in (C) below, the terms and conditions under Section 3.01 shall apply without the adjustments provided for in Section 4.01(d)(ii) above; provided, however, that if the Change is not effected, the provisions of this Section 4.01(d)(iii) shall not apply;

(C) If, with respect to this Section 4.01(d)(iii), Section 3.01(ii) is applicable, in no event will the payment made or fair market value of shares of Common Stock issued by the Company to the Holders be less than the fair market value of the Notes. As used herein, the “fair market value” of the Notes shall be determined by an investment banking firm of national reputation and standing selected by the Company and reasonably acceptable to a Majority of the Holders. The fair market value shall be determined as of the day immediately preceding the first public announcement of the Change, and if payment for purposes of this Section 4.01(d)(iii) is in Common Stock, the Common Stock shall be valued at the closing price for the Common Stock on the effective date of the Change; and

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(D) Notwithstanding the provisions of Section 3.02, the Call Notice shall be sent as soon as practicable following notice of the Acquirer as described above.

(e) Spin-Off.

(i) In case the Company shall at any time pay a dividend or make a distribution to all holders of its Common Stock consisting of the capital stock of any class or series, or similar interests, of or relating to a subsidiary or other business unit of the Company (such transaction, a “Spin-Off”; such capital stock or other interests, the “Spin-Off Shares”; and such subsidiary or business unit, the “Spin-Off Company”), then the Company shall take such action, and shall cause the Spin-Off Company to take such action, so that the Notes shall be deemed exchanged as of the effective date of the Spin-Off, without action by any Holder, for a combination of new floating rate unsecured loan notes of the Company (the “New Notes”) and floating rate unsecured loan notes of the Spin-Off Company (“Spin-Off Notes”), as provided in this Section 4.01(e); provided, however, that in the event that the distribution of Spin-Off Notes to the Holders would, in the reasonable opinion of counsel to the Company, (i) jeopardize the tax-free nature of such Spin-Off or (ii) require registration with the SEC in circumstances where registration would not otherwise be required, then, at the election of the Company, either (y) the Holders shall not receive New Notes and Spin-Off Notes pursuant to this Section 4.01(e)(i) and the Put/Call Rate shall instead be adjusted pursuant to the terms of Section 4.01(e)(ii) or (z) the Holders shall receive New Notes and Spin-Off Notes as contemplated above in this Section 4.01(e)(i). The terms of the New Notes and the Spin-Off Notes shall be identical to the terms of the Notes mutatis mutandis, except that the Put/Call Rates, the nominal amounts, the Call Target Prices and the Interest Rate Hurdles (subject to adjustment as provided therein) of the New Notes and the Spin-Off Notes shall be determined as follows:

Put/Call Rate Adjustment. The Put/Call Rate of the Spin-Off Notes shall be determined in accordance with the following formula:

Rs = Ro x Ps / (Pp + (r x Ps))

where:

Rs	=	the Put/Call Rate of the Spin-Off Notes;

Ro	=	the Put/Call Rate of the Notes immediately prior to adjustment for the Spin-Off pursuant to this Section 4.01(e)(i);

Pp	=	the average of the Daily Market Prices of the Common Stock for the ten (10) consecutive trading days following the date on which the Spin-Off is consummated;

r	=	the number of Spin-Off Shares (which may be one or a fraction less than or greater than one) distributed pursuant to the Spin-Off in respect of each share of Common Stock; and

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the fair market value per share of the Spin-Off Shares. As used in this section, “fair market value” shall mean the average Daily Market Price of the Spin-Off shares for the first ten (10) consecutive trading days following the date on which the Spin-Off is consummated; provided, however, that if such distributed securities do not begin trading within two trading days of the consummation of such Spin-Off or if the Spin-Off Shares do not trade for at least ten (10) consecutive trading days within twenty (20) days after the Spin-Off, then the “fair market value” of such distributed securities shall be determined by an investment banking firm of national reputation and standing selected by the Company and acceptable to a Majority of the Holders on the record date of the Spin-Off.

The Put/Call Rate of the New Notes shall be determined in accordance with the following formula:

Rn = Ro x Ps / (Pp + (r x Ps))

where:

Rn	=	the Put/Call Rate of the New Notes,

and the other symbols in such formula have the meanings specified in the preceding paragraph of this Section 4.01(e)(i).

Nominal Amount Adjustment. The nominal amount of each Spin-Off Note shall be determined in accordance with the following formula:

As = Ao x (Ps x r)/(Pp + (Ps x r))

where:

As	=	the nominal amount of the Spin-Off Note issued in exchange for any Note;

Ao	=	the nominal amount of the Note for which the Spin-Off Note is exchanged;

and the other symbols in such formula have the meanings specified under “Put/Call Rate Adjustment” above in this Section 4.01(e)(i).

The nominal amount of each New Note shall be determined in accordance with the following formula:

An = Ao x Pp / (Pp + (r x Ps))

where:

An	=	the nominal amount of the New Note issued in exchange for any Note;