Document:

EX-10.6

 

Exhibit 10.6

RELEASE AND SETTLEMENT AGREEMENT

          This Release and Settlement Agreement (the “Release”) is entered into this 10th day
of August, 2007 by and between Glenview Capital Partners, L.P., Glenview Institutional Partners,
L.P., Glenview Capital Master Fund, Ltd., QDRF Master Ltd., Quadrangle Debt Opportunities Fund
Master Ltd., Quadrangle Debt Recovery Income Fund LP, Quadrangle Debt Recovery Income Fund Master
Ltd , Quadrangle Debt Opportunities Fund Master Ltd, Columbia Funds Master Investment
Trust-Columbia High Income Master Portfolio, Columbia Funds Variable Insurance Trust 1 — Columbia
High Yield Fund, Variable Series, The Mainstay Funds on Behalf of its High Yield Corporate Bond
Fund, The Mainstay Funds on Behalf of its Diversified Income Fund, Mainstay VP Series Fund, Inc. on
Behalf of its High Yield Corporate Bond and Deephaven Distressed Opportunities Trading Ltd.
(collectively, the “Series B Preferred Stockholders”), and Haights Cross Communications, Inc.
(“HCC”, and collectively with the Series B Preferred Stockholders, the “Parties”).

WITNESSETH:

          WHEREAS, certain of the Series B Preferred Stockholders commenced an action against HCC on or
about February 27, 2007 with the filing of a Complaint in the Court of Chancery of the State of
Delaware in and for New Castle County, captioned Glenview Capital Partners, L.P. et al. v. Haights
Cross Communications, Inc., Civil Action No. 2757 (VCS) (the “Action”), asserting claims under 8
Del. Code. § 220 and under a certain Investors Agreement, dated December 10, 1999, between the
Parties;

          WHEREAS, HCC has denied all of the material allegations of the Series Preferred B Stockholders
in the Action;

-1-

 

          WHEREAS, certain of the Series B Preferred Stockholders hold shares of HCC’s Series B
Preferred Stock;

          WHEREAS, HCC, the Series A Preferred Stockholders, the Series B Preferred Stockholders, and
certain other parties, have agreed to recapitalize HCC and, inter alia, change all the shares of
HCC’s Series B Preferred Stock into shares of the HCC’s common stock pursuant to that certain
Recapitalization Agreement by and among the Company and the Investors named therein dated June 29,
2007 (the “Recapitalization Agreement”);

          WHEREAS, the Parties thus desire to settle any and all claims by and between each other
arising from or related to the Action, regardless where filed, and to further resolve any and all
claims which are or could have been asserted in the Action on mutually agreeable terms in order to
avoid further expense, inconvenience, and the distraction of litigation;

          Whereas the Parties and the Series A Preferred Stockholders desire to terminate (i) an
Investors Registration Rights Agreement, dated as of December 10, 1999, by and among Haights Cross
Communications, Inc., Haights Cross Operating Company and the Holders (as defined therein) (the
“Investors Registration Rights Agreement”), and (ii) an Investors Agreement, dated as of December
10, 1999, by and among Haights Cross Communications, Inc., Haights Cross Operating Company, the
Existing Stockholders (as defined therein) and the DLJMB Investors (as defined therein), as amended
by Amendment to Investors Agreement, dated as of June 27, 2003, (the “Investors Agreement”), and
release any and all claims by and between each other arising from the Investors Registration Rights
Agreement and/or the Investors Agreement,

-2-

 

          NOW THEREFORE, in consideration of the mutual promises exchanged herein and other good and
valuable consideration, receipt of which is acknowledged, the Parties and the Series A Preferred
Stockholders hereby agree as follows:

DISMISSAL OF ACTION

          Contemporaneously with the execution and delivery of this Release, counsel for the Parties
shall execute a Stipulation and Order of Dismissal, dismissing the Action with prejudice and
without costs to any party. Counsel for the Series B Preferred Stockholders shall file the
Stipulation and Order of Dismissal with the Court promptly after its execution.

RELEASES AND TERMINATION

          1. The Series B Preferred Stockholders, on behalf of themselves and their predecessors,
successors and assigns (collectively, the “Series B Preferred Stockholder Releasors”), irrevocably
release and forever discharge HCC and its predecessors, successors and assigns, and each of their
past or present parents, subsidiaries, affiliates, and each past or present officer, director,
shareholder, employee, contractor, agent, or representative (collectively, the “HCC Releasees”),
from any and all claims, demands, actions, causes of action, suits, debts, liens, demands,
contracts, liabilities, agreements, promises, representations, obligations, costs, expenses, losses
or damages of any kind whatsoever (collectively, “Claims”), whether known or unknown, fixed or
contingent, suspected or claimed, which the Series B Preferred Stockholder Releasors had, now have,
or claim to have had against the HCC Releasees arising from, or relating in any way, to the claims
asserted in the Action, including any claims related to the validity of any employment agreement
currently in effect between HCC and management; provided, however, nothing herein shall constitute
a release of any Claims arising from any HCC

-3-

 

Releasee’s gross negligence, fraud or willful misconduct; and further provided, however, that
the Parties’ rights and obligations under this Release and under the Recapitalization Agreement and
transactions contemplated therein shall remain in full force and unaffected by this Release.

          2. HCC, on behalf of itself and its predecessors, successors and assigns (collectively, the
“HCC Releasors”), irrevocably releases and forever discharges the Series B Preferred Stockholders
and their predecessors, successors and assigns, and each of their past or present parents,
subsidiaries, affiliates, and each past or present officer, director, shareholder, employee,
contractor, agent, or representative (collectively, the “Series B Preferred Stockholder
Releasees”), from Claims, whether known or unknown, fixed or contingent, suspected or claimed,
which the HCC Releasors had, now have, or claim to have had against the Series B Preferred
Stockholder Releasees arising from, or relating in any way, to the claims asserted in or that could
have been asserted in the Action; provided, however, that nothing herein shall constitute a release
of any Claims arising from any Series B Preferred Stockholder Releasee’s gross negligence, fraud or
willful misconduct; and further provided, however, that the Parties’ rights and obligations under
this Release and under the Recapitalization Agreement and transactions contemplated therein shall
remain in full force and unaffected by this Release.

          3. The Parties and the Series A Preferred Stockholders, on behalf of themselves and their
predecessors, successors and assigns, hereby agree to terminate the Investors Registration Rights
Agreement and the Investors Agreement, and to irrevocably release and discharge Claims, whether
known or unknown, fixed or contingent, suspected or claimed, which the Parties and the Series A
Preferred Stockholders had, now have, or claim to have had

-4-

 

by and between each other, and each of their past or present parents, subsidiaries,
affiliates, and each past or present officer, director, shareholder, employee, contractor, agent,
or representative, arising from or related to the Investors Registration Rights Agreement and/or
the Investors Agreement; provided, however, that the Parties and the Series A Preferred
Stockholders’ rights and obligations under this Release and under the Recapitalization Agreement
and transactions contemplated therein shall remain in full force and unaffected by this Release.

WARRANTIES

          1. Each of the Parties and Series A Preferred Stockholders acknowledge that it has had
the opportunity to consult with its own legal counsel in connection with this Release and
understands the meaning of each term of this Release and the consequences of signing this Release.

          2. Each of the Parties and Series A Preferred Stockholders hereto warrants and represents that
it fully understands that the terms of this Release are contractual and not a mere recital.

          3. Each of the Parties and Series A Preferred Stockholders hereto warrants and represents that
it understands that the covenants contained within this Release constitute a full accord and
satisfaction of all claims and matters referred to in the Action.

          4. Each of the Parties and Series A Preferred Stockholders hereto warrants and represents that
it is fully authorized to enter into this Release and to carry out the obligations provided for
herein.

-5-

 

          5. Each of the Parties and Series A Preferred Stockholders warrants and represents that the
undersigned persons are duly authorized to bind HCC, the Series B Preferred Stockholders and the
Series A Preferred Stockholders, respectively, to this Release.

          6. Each of the Parties and Series A Preferred Stockholders represent and warrant that (i)
there has been no assignment or other transfer or disposition of any of their respective claims,
demands, actions, causes of action, suits, debts, liens, demands, contracts, liabilities,
agreements, promises, representations, obligations, costs, expenses, losses or damages released
herein, (ii) to the maximum extent permitted by law, they will not file any further complaints,
charges, arbitration demands or complaints, or lawsuits or make any further allegations to anyone,
at any time hereafter, arising out of the claims released herein, and (iii) they understand and
agree that in entering into this Release each party is relying on the other’s foregoing
representation and warranty.

NO ADMISSION OF LIABILITY

          The Parties hereto understand and agree that the liability for the allegations of the
Action and such damages as were or may have been incurred therefrom is disputed and that this
Release is a compromise of disputed claims and shall not be construed as an admission of negligence
or liability, nor an expression of consent or agreement with the contentions and/or the allegations
of the Action.

AMENDMENT

          This Release shall not be modified or amended except by an installment in writing signed
by all parties to this Release, or their legal representatives.

-6-

 

INVALID PROVISIONS

          If, after the date hereof, any provision of this Release is held to be illegal, invalid
or unenforceable under present or future laws effective during the term of this Release, such
provision shall be fully severable. In lieu thereof, there shall be added a provision as similar
in terms to such illegal, invalid or unenforceable provision as may be possible and be legal, valid
and enforceable.

APPLICABLE LAW

          The validity, construction, interpretation and administration of this Release shall be
governed by the substantive laws of the State of Delaware.

SUCCESSORS AND ASSIGNS

          This Release shall be binding upon and inure to the benefit of the Parties, the Series A
Preferred Stockholders, and their respective successors and assigns. The Parties and Series A
Preferred Stockholders agree that any assignee or successor in interest of either party shall have
all of the rights and obligations accorded such entities’ assignor or predecessor in interest under
this Release.

TITLES, HEADINGS AND CAPTIONS

          All titles, headings and captions used in this Release have been included for
administrative convenience only and do not constitute matters to be construed in interpreting this
Release.

MISCELLANEOUS

          1. All parties have cooperated in the drafting and preparation of this Release and it is
therefore specifically understood and agreed that all parties shall be deemed to have

-7-

 

drafted this document to avoid any negative inference by any court or tribunal against the
preparer of this document.

          2. No waiver of any of the provisions of this Release shall constitute a waiver of any other
provisions (whether or not similar). The waiver by any party of any breach of this Release shall
not be deemed or construed as a waiver of any other breach, whether prior, subsequent, or
contemporaneous, of this Release.

          3. This Release may be executed in counterparts and by facsimile, and such executed facsimile
counterparts, when taken together, shall be deemed to constitute a fully executed original.

          WE HAVE READ THE FOREGOING RELEASE AND SETTLEMENT AGREEMENT AND FULLY UNDERSTAND THE CONTENTS
AND MEANING THEREOF.

          Witness the following signatures this 10th day of August, 2007.

	 	 	 	 	 	 	 
	 	 	Haights Cross Communications, Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Paul J. Crecca
 

Paul J. Crecca
	 	 
	 

	 	Title:
	 	Executive Vice President and Chief Financial
Officer	 	 
	 
	 	 	 	 	 	 
	 	 	Glenview Capital Partners, L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Mark Horowitz
 

Mark Horowitz
	 	 
	 

	 	Title:
	 	Chief Operating Officer and General Counsel	 	 

-8-

 

	 	 	 	 	 	 	 
	 	 	Glenview Institutional Partners, L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Mark Horowitz
 

Mark Horowitz
	 	 
	 

	 	Title:
	 	Chief Operating Officer and General Counsel	 	 
	 
	 	 	 	 	 	 
	 	 	Glenview Capital Master Fund, Ltd.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Mark Horowitz
 

Mark Horowitz
	 	 
	 

	 	Title:
	 	Chief Operating Officer and General Counsel	 	 
	 
	 	 	 	 	 	 
	 	 	Quadrangle Debt Recovery Income Fund LP

By: Quadrangle Debt Recovery Advisors LP

Its: Advisor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Christopher Santana
 

Christopher Santana
	 	 
	 

	 	Title:
	 	Managing Principal	 	 
	 
	 	 	 	 	 	 
	 	 	Quadrangle Debt Opportunities Fund LP

By: Quadrangle Debt Recovery Advisors LP

Its: Advisor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Christopher Santana
 

Christopher Santana
	 	 
	 

	 	Title:
	 	Managing Principal	 	 
	 
	 	 	 	 	 	 
	 	 	QDRF Master Ltd.

By: Quadrangle Debt Recovery Advisors LP

Its: Advisor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Christopher Santana
 

Christopher Santana
	 	 
	 

	 	Title:
	 	Managing Principal	 	 

-9-

 

	 	 	 	 	 	 	 
	 	 	Quadrangle Debt Recovery Income Fund Master Ltd

By: Quadrangle Debt Recovery Advisors LP

Its: Advisor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Christopher Santana
 

Christopher Santana
	 	 
	 

	 	Title:
	 	Managing Principal	 	 
	 
	 	 	 	 	 	 
	 	 	Quadrangle Debt Opportunities Fund Master Ltd

By: Quadrangle Debt Recovery Advisors LP

Its: Advisor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Christopher Santana
 

Christopher Santana
	 	 
	 

	 	Title:
	 	Managing Principal	 	 
	 
	 	 	 	 	 	 
	 	 	Deephaven Distressed Opportunities Trading Ltd.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Jeffrey Golbus
 

Jeffrey Golbus
	 	 
	 

	 	Title:
	 	Portfolio Manager	 	 
	 
	 	 	 	 	 	 
	 	 	Columbia Funds Master Investment Trust-Columbia

High Income Master Portfolio

By: MacKay Shields, LLC, its sub-advisor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ J. Matthew Philo
 

J. Matthew Philo
	 	 
	 

	 	Title:
	 	Senior Managing Director	 	 

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	 	 	Columbia Funds Variable Insurance Trust 1 - 
Columbia
High Yield Fund, Variable Series

By: MacKay Shields, LLC, its sub-advisor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ J. Matthew Philo
 

J. Matthew Philo
	 	 
	 

	 	Title:
	 	Senior Managing Director	 	 
	 
	 	 	 	 	 	 
	 	 	The Mainstay Funds on Behalf of its High
Yield 
Corporate Bond Fund

By: MacKay Shields, LLC, its sub-advisor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ J. Matthew Philo
 

J. Matthew Philo
	 	 
	 

	 	Title:
	 	Senior Managing Director	 	 
	 
	 	 	 	 	 	 
	 	 	The Mainstay Funds on Behalf of its Diversified

Income Fund

By: MacKay Shields, LLC, its sub-advisor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ J. Matthew Philo
 

J. Matthew Philo
	 	 
	 

	 	Title:
	 	Senior Managing Director	 	 

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	 	 	Mainstay VP Series Fund, Inc. on Behalf of its High

Yield Corporate Bond Portfolio	 	 
	 
	 	 	 	 	 	 
	 	 	By: MacKay Shields, LLC, its sub-advisor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ J. Matthew Philo
 

J. Matthew Philo
	 	 
	 

	 	Title:
	 	Senior Managing Director	 	 

-12-EX-4.1

 

Exhibit 4.1

VERTRUE INCORPORATED,

Issuer

AND

DEUTSCHE BANK TRUST COMPANY AMERICAS,

Trustee

 

FIRST SUPPLEMENTAL INDENTURE

Dated as
of August 16, 2007

 

5.50% Convertible Senior Subordinated Notes due 2010

 

Supplementing the Indenture

dated as of September 30, 2003

between Vertrue Incorporated and

Deutsche Bank Trust Company Americas

 

 

FIRST SUPPLEMENTAL INDENTURE

          FIRST SUPPLEMENTAL INDENTURE dated as of August 16, 2007 (this “First Supplement”) to the
Indenture, dated as of September 30, 2003 (as supplemented, the “Indenture”), between Vertrue
Incorporated (f/k/a Memberworks Incorporated), a Delaware corporation (the “Company”) and Deutsche
Bank Trust Company Americas, a New York banking corporation, as trustee (the “Trustee”), for the
5.50% Convertible Senior Subordinated Notes Due 2010 (the “Securities”). All capitalized terms
used herein that are not otherwise specifically defined herein shall have the respective meanings
ascribed thereto in the Indenture.

W I T N E S S E T H

          WHEREAS, the Company has heretofore made, executed and delivered to the Trustee the Indenture
providing for the issuance of the Securities;

          WHEREAS, pursuant to the Agreement and Plan of Merger, dated as of March 22, 2007, by and
among the Company, Velo Holdings Inc., a Delaware corporation (“Parent”), and Velo Acquisition
Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”), as amended by
the Amendment to the Agreement and Plan of Merger, dated as of July 18, 2007, by and among the
Company, Parent and Merger Sub (as amended, the “Merger Agreement”), Merger Sub will merge with and
into the Company, with the Company as the surviving corporation (the “Merger”) and becoming a
wholly owned subsidiary of Parent at the effective time of the Merger;

          WHEREAS, pursuant to the Merger Agreement, at the effective time of the Merger, each share of
the Company’s common stock, par value $0.01 per share (each a “Share” or, collectively the
“Shares”) issued and outstanding immediately prior to the effective time of the Merger (other than
(i) Shares owned by Parent, Merger Sub or any other direct or indirect wholly owned subsidiary of
Parent and Shares owned by the Company or any direct or indirect wholly owned subsidiary of the
Company, and in each case not held on behalf of third parties, and (ii) Shares that are owned by
stockholders of the Company who have perfected and not withdrawn or lost appraisal rights pursuant
to Section 262 of the Delaware General Corporation Law) shall be converted into the right to
receive $50.00 per Share in cash, without interest;

          WHEREAS, the Merger complies with the provisions of Article V of the Indenture;

          WHEREAS, pursuant to Section 9.4 of the Indenture, the Company and the Trustee are required to
enter into a supplemental indenture in connection with the Merger;

          WHEREAS, pursuant to Section 8.1(c) of the Indenture, the Company and the Trustee may amend,
modify or supplement the Indenture without the consent of any Holder to provide for conversion
rights of Holders of the Securities upon the occurrence of the Merger; and

 

 

          WHEREAS, the Board of Directors of the Company has authorized the execution and delivery of
this First Supplement.

          NOW, THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the Company and the Trustee mutually
covenant and agree as follows:

ARTICLE I.

AMENDMENTS

     Section 1.01 Conversion Right. The Indenture is hereby amended to provide that,
subject to the consummation of the Merger, from and after the effective time of the Merger, the
Securities shall cease to be convertible into the right to receive Common Stock and shall
instead be convertible solely into cash, in an amount equal to the product of $50.00 and the
number of shares (including fractional shares) of Common Stock issuable upon conversion of the
Securities into Common Stock pursuant to the Indenture immediately prior to the effective time
of the Merger, without interest thereon.

ARTICLE II.

MISCELLANEOUS

     Section 2.01 Effectiveness and Operativeness. This First Supplement shall become
effective, and the provisions provided for in this First Supplement shall become operative,
immediately upon consummation of the Merger.

     Section 2.02 The Indenture. This First Supplement shall be construed as
supplemental to the Indenture and shall form a part of it for all purposes. Except as
supplemented hereby, the Indenture and all documents executed in connection therewith shall
continue in full force and effect and shall remain enforceable and binding in accordance with
their respective terms thereof and as supplemented by this First Supplement.

     Section 2.03 Governing Law. This First Supplement shall be governed by, and
construed in accordance with, the laws of the State of New York.

     Section 2.04 Legal, Valid and Binding Obligation. Each party hereto hereby
represents and warrants that this First Supplement is a legal, valid and binding obligation of
such party and is enforceable against such party in accordance with its terms.

     Section 2.05 References to Indenture. Whenever in any certificate, letter, notice
or other instrument reference is made to the Indenture, such reference without more shall
include reference to this First Supplement.

     Section 2.06 Multiple Originals. The parties may sign any number of copies of this
First Supplement. Each signed copy shall be an original, but all of them together represent the
same agreement. One signed copy is enough to prove this First Supplement.

 

 

     Section 2.07 Headings. The headings of this First Supplement are for reference
only and shall not limit or otherwise affect the meaning hereof.

     Section 2.08 Severability. In case any one or more of the provisions contained in
this First Supplement or in the Securities shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability shall not
affect any other provisions of this First Supplement or of the Securities, but this First
Supplement and the Securities shall be construed as if such invalid or illegal or unenforceable
provision had never been contained herein or therein.

     Section 2.09 Benefits of Indenture. Nothing in this First Supplement, express or
implied, shall give to any person, other than the parties hereto, their successors hereunder,
and the Holders, any benefit of any legal or equitable right, remedy or claim under this First
Supplement.

     Section 2.10 Successors and Assigns. All agreements of the Company and the Trustee
in this First Supplement shall bind their respective successors and assigns.

     Section 2.11 Counterparts. This First Supplement may be executed in any number of
counterparts, each such counterpart being deemed to be an original instrument, and all such
counterparts shall together constitute the same agreement.

     Section 2.12 Execution. The parties hereto will execute and deliver such further
instruments and do such further acts and things as may be reasonably required to carry out the
intent and purpose of this First Supplement.

     Section 2.13 Trust Indenture Act Controls. If any provision of this First
Supplement limits, qualifies or conflicts with another provision which is required to be
included in this First Supplement by the Trust Indenture Act of 1939, as amended, the required
provision shall control.

[remainder of page intentionally left blank]

 

 

          IN WITNESS WHEREOF this First Supplement has been executed by duly authorized representatives
of the parties hereto as of the date first written above.

	 	 	 	 	 	 	 
	 	 	Company:	 	 
	 
	 	 	 	 	 	 
	 	 	VERTRUE INCORPORATED,

as Issuer	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ James B. Duffy	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:

Title:
	 	James B. Duffy

Executive Vice President,

Chief Operating Officer and

Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	Trustee:	 	 
	 
	 	 	 	 	 	 
	 	 	DEUTSCHE BANK TRUST
COMPANY 

AMERICAS, as Trustee	 	 
	 
	 	 	 	 	 	 
	 	 	By DEUTSCHE BANK NATIONAL 

TRUST COMPANY	 	 
	 
	 	 	 	 	 	 
	 

	 	By

Name:
	 	/s/ David Contino
 

David Contino
	 	 
	 

	 	Title:
	 	Assistant Vice President	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Rodney Gaughan
 

	 	 
	 

	 	Name:
	 	Rodney Gaughan	 	 
	 

	 	Title:
	 	Vice President

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