Document:

exhibit10-21.htm

July 21, 2010

 

 

 

 

 

 

 

VISHAY PRECISION GROUP, INC.

(as Issuer)

 

 

 

_______________________________________________

 

NOTE INSTRUMENT

constituting

up to $9,958,460

FLOATING RATE

UNSECURED LOAN NOTES 2102

_______________________________________________________

 

 

THIS INSTRUMENT is made as of the 21st day of July, 2010 by VISHAY PRECISION GROUP, INC. a company incorporated in the State of Delaware USA, (the Company).

 

Whereas

 

	(A)	      	Vishay Intertechnology issued loan notes (the “Vishay Intertechnology Loan Notes”) pursuant to that certain Note Instrument dated as of December 13, 2002 (the “Vishay Intertechnology Note Instrument”); and
	 
	(B)	 	Vishay Intertechnology, American Stock Transfer & Trust Co. and the holders of the Vishay Intertechnology Loan Notes entered into that certain Put and Call Agreement, dated as of December 13, 2002 (the “Vishay Intertechnology Put and Call Agreement”); and
	 
	(C)	 	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 loan 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
	 
	(D)	 	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 common stock of the Company to the holders of the common stock of Vishay Intertechnology and the class B common stock of the Company to the holders of class B common stock of Vishay Intertechnology; and
	 
	(E)	 	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 Loan Notes; and
	 
	(F)	 	Accordingly, the Company has authorized Floating Rate Unsecured Loan Notes 2102 in the initial principal amount of $9,958,460 and has determined to constitute the said Loan Notes as hereinafter provided.

Now This Instrument Witnesses And The Company Hereby Declares as follows:

 

1. In this Instrument and in the Schedules hereto the following expressions shall, where the context permits, have the following meanings: 

 

the Conditions means the conditions to be endorsed on the Loan Notes in the form or substantially in the form set out in Schedule 2 hereto as the same may from time to time be modified in accordance with the provisions herein contained; 

 

Directors means the Board of Directors for the time being of the Company or a duly authorized committee of the Board of Directors; 

 

 

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;

 

Instrument means this instrument and the Schedules hereto as from time to time modified in accordance with the provisions herein contained;

 

LIBOR means, in relation to any amount owed by the Company hereunder and any interest period:

 

	(a)	      	the percentage rate per annum equal to the offered quotation which appears on the page of the Telerate Screen which displays an average British Bankers Association Interest Settlement Rate for US Dollars for such period at or about 11.00 a.m. (London time) on the first day of the relevant interest period; or
	 
	(b)	 	if a rate is not available pursuant to (a) above, the percentage rate per annum which is the arithmetic mean of the rates as supplied to the Company at its request quoted by three banks selected by the Company (one of which shall include, if in existence at the time, Barclays Bank plc) to leading banks in the London inter-bank market for three month deposits of similar size and currency.

Loan Notes means up to $9,958,460 Floating Rate Unsecured Loan Notes 2102 of the Company to be issued under this Instrument or (as the context may require) the principal amount thereof for the time being issued and outstanding;

 

Noteholders means the several persons for the time being entered in the Register;

 

Put and Call Agreement means the put and call agreement relating to the Loan Notes entered into by the Company and other persons in connection with the transaction contemplated by the Master Separation Agreement on or about the date hereof;

 

Register means the register of Noteholders referred to in clause 8 hereof;

 

Registration Rights Agreement means the registration rights agreement entered into by Vishay Intertechnology and other persons in connection with the SPA on or about December 13, 2002;

 

SPA means the share sale and purchase agreement entered into by Vishay Intertechnology as purchaser and other persons on or about December 13, 2002 pursuant to which the Vishay Intertechnology Loan Notes were issued; and

 

Vishay Precision Group means the Company (including its successors) and its subsidiaries from time to time.

 

Words denoting the singular number only shall include the plural number and vice versa. Words denoting persons shall include corporations.

 

2. The Loan Notes shall be known as the Vishay Precision Group, Inc. Floating Rate Unsecured Loan Notes 2102 and shall be issued in amounts and multiples of $1,000 by the Company to such persons at such times and on such terms as the Directors may determine.

 

3. The aggregate principal amount of the Loan Notes is limited to $9,958,460. The Loan Notes, as and when issued, and all accrued and unpaid interest thereon, shall (except as regards the first payment of interest) rank pari passu equally and rateably without discrimination or preference as an unsecured debt obligation of the Company. 

 

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4. As and when the Loan Notes or any part thereof fall to be redeemed or repaid in accordance with the provisions hereof, the Company will pay to the Noteholders entitled thereto the principal amount of the Loan Notes to be repaid together with accrued interest (subject to any requirement to deduct any income tax therefrom).

 

5. Until such time as the Loan Notes are redeemed or repaid in accordance with the provisions hereof, the Company will pay to the Noteholders interest (subject to any requirement to deduct any income tax therefrom) on the principal amount of the Loan Notes outstanding at the rates and the times and as otherwise provided in the Conditions.

 

6. Every Noteholder shall be entitled without charge to one certificate for the Loan Notes held by it. However, joint holders of Loan Notes will be entitled only to one Loan Note certificate (provided that the Company shall not be bound to register more than four persons as the joint holders of any Loan Note) and such Loan Note will be sent to that one of the joint holders who is first named in the Register. Every Loan Note certificate shall be issued under the common or securities seal of the Company and shall be substantially in the form set out in Schedule 1 hereto and shall have the Conditions endorsed thereon. The Company shall comply with the provisions of the Loan Notes and the Conditions and the Loan Notes shall be held subject to all such provisions which shall be binding on the Company and the Noteholders and all persons claiming through or under them respectively.

 

7. Each Noteholder shall be entitled to require all or any part (being $1,000 nominal amount or any integral multiple thereof) of the Loan Notes held by it to be repaid at par together with accrued interest (subject to any requirement to deduct any income tax therefrom) if:

 

	(a)	      	any principal or interest on any of the Loan Notes held by that Noteholder due to it shall fail to be paid in full within thirty days after receipt of written demand by the Company, addressed to its financial controller (with a copy to Robert Friedel of Pepper Hamilton LLP) and made by the relevant Noteholder following failure to pay; or
	 
	(b)	 	the Company breaches any of its obligations to issue shares or, if applicable, to pay cash under the Put and Call Agreement and such breach, if capable of remedy, is not remedied within ten days after written notification to the Company addressed to its financial controller (with a copy to Robert Friedel of Pepper Hamilton LLP); or
	 
	(c)	 	any indebtedness of any member or members of the Vishay Precision Group having in aggregate a principal amount in excess of US $50,000,000 is not paid on its due date or within any applicable grace period, and such default in payment is not waived or remedied within a period of one month; or
	 
	(d)	 	the Company pursuant to or under or within the meaning of any Bankruptcy Law:
	 
	 	 	(i)	      	commences a voluntary case or proceeding;
	 
	 	 	(ii)	 	consents to the entry of an order for relief against it in an involuntary case or proceeding or the commencement of any case against it;
	 
	 	 	(iii)	 	consents to the appointment of a Custodian of it or for any substantial part of its property;

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	 	      	(iv)	      	makes a general assignment for the benefit of its creditors;
	 
	 	 	(v)	 	files a petition in bankruptcy or answer or consent seeking reorganization or relief; or
	 
	 	 	(vi)	 	consents to the filing of such petition or the appointment of or taking possession by a Custodian; or
	 
	(e)	 	a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:
	 
	 	 	(i)	 	is for relief against the Company in an involuntary case or proceeding, or adjudicates the Company insolvent or bankrupt;
	 
	 	 	(ii)	 	appoints a Custodian of the Company for any substantial part of its property; or
	 
	 	 	(iii)	 	orders the winding up or liquidation of the Company; and the order or decree remains unstayed and in effect for 60 days; or
	 
	(f)	 	any event analogous to (d) or (e) above occurs in any jurisdiction.

In paragraphs (d) and (e) above:

 

Bankruptcy Law means Title 11, United States Code, or any similar Federal or state law for the relief of debtors.

 

Custodian means any receiver, trustee, assignee, liquidator, custodian or similar official under any Bankruptcy Law.

 

The Company shall notify each of the Noteholders forthwith on the occurrence of any of the events described in sub-clause (a) to (f) of this clause 7.

 

8. A register of the Noteholders will be kept at 3 Great Valley Parkway, Malvern, Pennsylvania 19355-1307 (or at such other place as the Company may from time to time have appointed for the purpose and have notified to the Noteholders) and there shall be entered in the Register:

 

	(a)	      	the names and addresses of the Noteholders;
	 
	(b)	 	the telecopier numbers of the Noteholders;
	 
	(c)	 	the principal amount of the Loan Notes held by each Noteholder;
	 
	(d)	 	the date on which the name of each Noteholder is entered in respect of the Loan Notes standing in its name; and
	 
	(e)	 	the serial number of each Loan Note.

9. Any change of name or address on the part of any Noteholder which is notified to the Company at the address set out in clause 8 above shall be entered in the Register.

 

10. Any Noteholder may at all reasonable times during office hours inspect the Register.

 

11. The Company hereby covenants with the Noteholders and each of them duly to perform and observe the obligations herein contained and imposed on it to the intent that these presents shall enure for the benefit of all Noteholders, each of whom may sue for the performance or observance of the provisions hereof so far as its holding of Loan Notes is concerned. 

 

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12. The Conditions and provisions contained in the Schedules hereto shall have effect in the same manner as if such Conditions and provisions were herein set forth.

 

13. A memorandum of execution of any instrument supplemental to this Instrument shall be endorsed by the Company on this Instrument.

 

14. This Instrument and the Loan Notes shall be governed by and construed in accordance with the laws of the State of New York.

 

15. Each of the parties agrees that the courts of the State of New York are to have exclusive jurisdiction to settle any disputes that may arise in connection with this Agreement.

 

In Witness Whereof this Instrument has been duly executed by the Company the day and year first above written.

 

The Company

 

VISHAY PRECISION GROUP, Inc.

 

	By:  	 	/s/ Steven Klausner
	 
	 	       Name:  	Steven Klausner
	 	       Title:	Vice President, Treasurer

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SCHEDULE 1

 

Form of Loan Note

 

No. _____ Amount $_____

 

VISHAY PRECISION GROUP, INC.

 

(Incorporated in the State of Delaware)

 

UP TO $9,958,460 VISHAY PRECISION GROUP, INC. FLOATING RATE

UNSECURED LOAN NOTES 2102

 

THIS IS TO CERTIFY THAT _____ _____ is/are the registered holder(s) of the above principal amount of the Vishay Precision Group, Inc. Unsecured Loan Notes 2102 (the Loan Notes) constituted by an Instrument entered into by the Company on July 21, 2010 (together with any instruments supplemental thereto) (the Instrument) and issued with the benefit of, and subject to the provisions contained in, the Instrument and the Conditions endorsed hereon. The Loan Notes further take the benefit of certain representations and warranties contained in the Note Purchase Agreement referred to in the Instrument as if made by Company as of July 21, 2010, to the extent relating to the Instrument and the Loan Notes.

 

Interest is payable on the Loan Notes quarterly in arrears on the interest payment dates in each year and at a floating rate determined in accordance with the Conditions endorsed hereon.

 

The Loan Notes are redeemable in accordance with Condition 8 endorsed hereon.

 

The Loan Notes are transferable on the terms set out in the Conditions endorsed hereon. This Loan Note certificate must be surrendered before any transfer can be registered or any new Loan Note certificate can be issued in exchange.

 

The Loan Notes have not been, and will not be, registered under the United States Securities Act of 1933, as amended and, accordingly, certain restrictions on ownership and transfer apply to the Loan Notes.1

 

Copies of the Instrument constituting the Loan Notes are available for inspection at the registered office of the Company.

 

The Loan Notes shall be governed by and construed in accordance with the laws of the State of New York.

 

____________________

 

	1	      	The provisions of the Registration Rights Agreement dated as of December 13, 2002 made between Vishay Intertechnology and the Original Holders (as such term is defined in the Registration Rights Agreement) shall govern whether or not legends in compliance with the United States Securities Act of 1933 appear on the face of the Loan Note certificates.

 

IN WITNESS whereof Vishay Precision Group, Inc. has executed this Loan Note Certificate.

 

 

 

VISHAY PRECISION GROUP, Inc.

 

	By:  	 	 
	 	 	 
	 	       Name:  	 
	 	 	 
	 	       Title:	 

Issued on July 21, 2010

 

 

SCHEDULE 2

 

The Conditions

 

1. The Loan Notes are issued in amounts and multiples of $1,000 and constitute unsecured obligations of the Company.

 

2. Interest on the Loan Notes will be calculated on the basis of a 360 day year and will be payable (subject to any requirement to deduct any income tax therefrom) by quarterly installments in arrears on 31 March, 30 June, 30 September and 31 December in each year (or if such day is not a business day in New York and Frankfurt, on the immediately preceding common business day in such cities) (interest payment dates) in respect of the preceding interest period (as defined below) ending on the interest payment date at a rate calculated for each interest period as provided in Condition 3 below, except that the first interest payment on the Loan Notes, which shall be made on September 30, 2010 will be in respect of the period from (and including) June 30, 2010. The period from (and including) June 30 to (but excluding) September 30, 2010 and the period from (and including) September 30, 2010 or any subsequent quarter date (where quarter date means any of 31 March, 30 June, 30 September or 31 December) to (but excluding) the next following quarter date is herein called an interest period.

 

3. (a) Subject to Condition 3(b), the rate of interest on the Loan Notes for any interest period will be LIBOR for such interest period. 

 

	(b)	      	If at any time during the period beginning on the date of issue of the Loan Notes and ending on 31 December 2010, the Common Stock has a Market Value of equal to or more than the Target Price per share for 30 or more consecutive trading days, then the rate of interest on the Loan Notes for all interest periods commencing on or after 1 January 2011 will be the rate per annum equal to fifty per cent. (50%) of LIBOR for such interest period.

In this Condition 3:

 

Common Stock means the common stock, par value US $0.10, 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;

 

Majority of the Noteholders means, at any relevant time, the Noteholders of a majority of the principal amount of the Loan Notes that are at any relevant time outstanding;

 

Market Value 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 Common Stock is then listed or quoted (or, if there is no sale of the Common Stock reported on such trading day, the average of the low ask and high bid price for the Common Stock reported on the last trading day in which such sale was reported) or, if there are no high bid and low ask prices, the Market Value shall be the per share fair market value of the Common Stock or other security as determined by an investment banking firm of national reputation and standing selected by the Company and reasonably acceptable to the Majority of the Noteholders;

 

Target Price means $46.47 per share of Common Stock, provided that if any event(s) described in Article IV of the Put and Call Agreement shall occur, then the Target Price shall be subject to adjustment in the manner and to the extent applicable to the Target Price (as defined in the Put and Call Agreement); 

 

 

trading day means any day on which securities are traded or quoted on the principal securities exchange or interdealer quotation system on which the Common Stock is listed for trading or quotation; and 

 

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.

 

4. If the Company fails to pay any amount payable by it under this Instrument or the Loan Notes, it must immediately on demand by the relevant Noteholder pay interest on the overdue amount from its due date up to the date of actual payment, both before, on and after judgment at the rate per annum equal to the Relevant Rate plus one percent (1%). For these purposes the Relevant Rate is the rate for the time being applicable pursuant to Condition 3 above.

 

5. Each interest payment shall be made (subject to any requirement to deduct any income tax therefrom) to the Noteholder on the register of Noteholders at the close of business on the twenty-eighth day preceding the date for payment of such interest and every such Noteholder shall be deemed, for the purpose of these presents, to be the holder on such interest payment date of the Notes held by it on such preceding date notwithstanding any intermediate transfer or transmission of any such Notes.

 

6. In circumstances where the Company is required (or would in the absence of any relevant filing be required) to make a deduction or withholding for or on account of any taxes or any other deductions, (and where any Noteholder is entitled to a reduced rate of withholding), the Company shall (to the extent it is entitled or required to do so) co-operate in a timely manner in filing such forms and documents as the Internal Revenue Service and any other taxation authority may require in order to enable the Company to make relevant payments under the Loan Notes without having to make such deduction or withholding, or at the relevant reduced rate of withholding.

 

7.1 If the Company at any time is subject to a transaction pursuant to which it becomes a subsidiary of any other person, it will thereafter procure that its ultimate parent company from time to time, as soon as practicable after becoming such, provides the Noteholders with a binding, irrevocable and unconditional guarantee of all of the obligations of the Company in respect of the Notes, the Registration Rights Agreement and the Put and Call Agreement in customary form.

 

7.2 If the Company ceases to be a reporting company under Section 13(d) or 15 of the Exchange Act (a Reporting Entity), then, for so long as it does not have a holding company that has issued a guarantee to the Noteholders as required by Condition 7.1, it will in respect of each of its financial quarters provide each Noteholder promptly after the same is prepared with such quarterly and annual financial statements as it prepares in the ordinary course in respect of itself and its subsidiaries and as is of the type customarily provided to bank creditors.

 

7.3 If a guarantee of a holding company is in effect as contemplated by Condition 7.1 above but the relevant guarantor is not a Reporting Entity, then the Company shall be obliged to procure that the relevant guarantor for the time being provides to each Noteholder the information referred to in Condition 7.2 above in respect of itself and its subsidiaries within the timeframe contemplated by that Condition.

 

8. Each Noteholder shall be entitled to require all or any part (being $1000 nominal amount or any integral multiple thereof) of the Loan Notes held by it to be repaid at par together with accrued interest (subject to any requirement to deduct any income tax therefrom) up to (but excluding the date of repayment) in the circumstances specified in clause 7 of the Instrument. Unless previously repaid, redeemed or purchased and cancelled, the Company will redeem the Loan Notes on 31 December, 2102 at par together with accrued interest (subject to any requirement to deduct income tax therefrom) up to (but excluding) the date of repayment.

 

 

9. Any Loan Notes repaid, redeemed or purchased pursuant to Condition 8 shall forthwith be cancelled and the Company shall not be at liberty to reissue the same.

 

10. Every Noteholder any of whose Loan Notes is due to be repaid or redeemed under these Conditions shall, not later than the due date for such repayment or redemption, deliver up to the Company, at the address specified in clause 8 of the Instrument constituting the Loan Notes, the Loan Notes which are due to be repaid or redeemed in order that the same may be cancelled. Upon such delivery and against a receipt for the principal moneys payable in respect of the Loan Notes to be repaid or redeemed, the Company shall pay to the Noteholder the amount payable to it in respect of such repayment or redemption.

 

11. Interest shall cease to accrue on any Loan Notes becoming liable to repayment or redemption as from the due date for repayment or redemption of such Loan Notes, unless (upon the Noteholder demanding on or after such date and at the address specified in clause 8 of the Instrument payment of the principal moneys payable in respect thereof and tendering the certificate(s) therefor and a receipt for such moneys duly signed and authenticated in such manner as the Company may reasonably require) payment of such moneys shall not be made by the Company, in which case interest will accrue from the date of such demand until (but excluding) the date of payment by the Company.

 

12. Amounts in respect of interest on any Loan Notes which remain unclaimed by the Noteholder for a period of five years and amounts due in respect of principal which remain unclaimed for a period of ten years, in each case from the date on which the relevant payment first becomes due, shall revert to the Company and the Noteholder shall cease to be entitled thereto.

 

13. Any Notes acquired by or on behalf of any member of the Vishay Precision Group shall be automatically cancelled.

 

14. The provisions of the Instrument constituting the Loan Notes and the rights of the Noteholders are subject to modification, abrogation or compromise in any respect but only in accordance with the provisions of Schedule 4 of the said Instrument and with the consent of the Company.

 

15. The Loan Notes are in registered form, and are transferable in accordance with the provisions of Schedule 3 of the Instrument.

 

16. All Loan Notes shall form a single series and shall rank pari passu equally and rateably without discrimination or preference as an unsecured debt obligation of the Company.

 

17. No application has been or is intended to be made to any stock exchange for the Loan Notes to be listed or dealt in.

 

18. Any notice or other document (including a Loan Note certificate) to be given to a Noteholder may be given or sent to the Noteholder at its registered address for the giving of notice to it by a method permitted pursuant to Condition 19. In the case of joint registered holders of any Loan Notes, a notice given to the Noteholder whose name stands first in the register in respect of such Loan Notes shall be sufficient notice to all joint holders. Notice may be given to the persons entitled to any Loan Notes in consequence of the bankruptcy of any Noteholder by sending the same by a method permitted pursuant to Condition 19 addressed to them by name or by the title of the representative or trustee of such holder at the address (if any) in the United Kingdom supplied for the purpose by such persons or (until such address is supplied) by giving notice in the manner in which it would have been given if the bankruptcy had not occurred.

 

 

19. Any notice required to be given to the Company under the Instrument shall be sent in writing to the address specified in clause 8 of the Instrument and shall be sufficiently given or made when and if delivered by a recognized international courier service or hand delivery, or by telecopier with in each case a copy sent by first class or registered mail, post prepaid.

 

20. Words and expressions defined in the Instrument shall have the same respective meanings whenever used in these Conditions.

 

 

SCHEDULE 3

 

Provisions as to Registration, Transfer and Other Matters

 

1. Except as required by law or as ordered by a court of competent jurisdiction, the Company will recognise the registered holder of any Loan Notes as the absolute owner thereof and shall not be bound to take notice or see to the execution of any trust, whether express, implied or constructive, to which any Loan Notes may be subject. The receipt of the registered holder for the time being of any Loan Notes or, in the case of joint registered holders, the receipt of any of them for the interest from time to time accruing due in respect thereof or any other moneys payable in respect thereof shall be a good discharge to the Company, notwithstanding any notice it may have, whether express or otherwise, of the right, title, interest or claim of any other person to or in such Loan Notes, interest or moneys. The Company shall not be bound to enter notice of any trust, whether express, implied or constructive, on the register in respect of any Loan Notes.

 

2. Every Noteholder will be recognised by the Company as entitled to its Loan Notes free from any equity, set-off or counter-claim on the part of the Company against the original or any intermediate holder of the Loan Notes.

 

3. The Loan Notes are transferable:

 

	(a)	      	in whole or in part (but in the case of a transfer of part in a minimum principal amount of at least $2,000,000 and such that the transferor’s holding of Loan Notes after such transfer would not be less than $2,000,000) (and for these purposes a transfer of less than $2,000,000 shall not be a transfer in whole if it does not relate to all of the Loan Notes held by a transferor and its affiliates);
	 
	(b)	 	subject to compliance with the restrictions set out in Schedule 6; and
	 
	(c)	 	in whole or in part to any affiliate of a Noteholder provided that, in the case of a transfer in part, the transferor and the transferee have entered into such documentation as the Company may reasonably require to provide that:
	 
	 	 	(i)	      	one member of the transferor’s group shall act as administrative agent for all Noteholders who are members of such group, with the effect that the Company will only be required to deal with one member of the transferor’s group in relation to the Loan Notes; and
	 
	 	 	(ii)	 	if the transferee ceases to be an affiliate of the transferor, the Company will be notified and able to require the relevant Loan Notes promptly to be transferred back to the transferor.

For these purposes, an affiliate of any person is (i) any other person that is a holding company or subsidiary of the first, or a subsidiary of any such holding company; (ii) in the case of a transferor that is a fund management company, investment company, or venture capital or private equity company, any fund, limited partnership or similar entity that is advised or managed by that transferor; and (iii) in the case of a transferor that is a fund, limited partnership or similar entity, any other such entity that is under common management with the transferor.

 

No assignment, transfer, sale or other disposal of any holding of Loan Notes will be registered except in accordance with paragraphs 4 and 5 below.

 

 

4. Every instrument of transfer shall be substantially in the form set out in Schedule 5 and must be signed by the transferor and the transferor shall be deemed to remain the owner of the Loan Notes to be transferred until the name of the transferee is entered in the register in respect thereof and until the transferee shall have executed an assignment substantially in the form set out in Annex I to the Put and Call Agreement.

 

5. Every instrument of transfer must be left for registration with the Company at the address specified in clause 8 of the Instrument accompanied by the certificate for the Loan Notes to be transferred together with any certificates required and such other evidence as the Directors may require to prove the title of the transferor or its right to transfer the Loan Notes, and, if the instrument of transfer is executed by some other person on its behalf, the authority of that person to do so. The transfer will then (subject to paragraphs 3 and 4 above) be registered and a note of such registration will be entered in the Register and a new certificate for Loan Notes issued accordingly.

 

6. All instruments of transfer that are registered shall be retained by the Company.

 

7. No fee shall be charged for the registration of any transfer or other document relating to or affecting the title to any Loan Notes.

 

8. Any person becoming entitled to Loan Notes in consequence of the bankruptcy of a holder of Loan Notes or of any other event giving rise to the transmission of such Loan Notes by operation of law may, upon producing such evidence that it sustains the character in respect of which it proposes to act under this Condition or of its title as the Company shall think sufficient be registered itself as the holder of such Loan Notes.

 

9. The interest or other moneys payable in respect of the Loan Notes and the principal amount of the Loan Notes or any part thereof may be paid by electronic transfer to the bank account notified for such purpose by the relevant Noteholder to the Company no less than 14 days prior to the relevant date for payment; or if no such account is so satisfied, by cheque sent through the post at the risk of the holder or holders to the registered address of the holder or, in the case of joint registered holders, to the registered address of that one of the joint registered holders who is first named on the register in respect of such holding, or to such person and to such address as the registered holder or the joint registered holders may in writing direct. Every such cheque shall be made payable to the order of the person to whom it is sent and payment of the cheque shall be a satisfaction of the moneys represented thereby.

 

10. If any Loan Note certificate is defaced, lost or destroyed, it may be replaced on such terms (if any) as to evidence and indemnity as the Company may require but so that, in the case of defacement, the defaced Loan Note certificate shall be surrendered before the new Loan Note certificate is issued.

 

 

SCHEDULE 4

 

Amendments, Supplements and Waivers

 

Except as described below the Company may amend the terms of the Loan Notes with the written consent of Noteholders holding 66% of the aggregate principal amount of the then outstanding Loan Notes. Noteholders holding a 66% of the aggregate principal amount of the outstanding Loan Notes may waive compliance by the Company with any provision of the Loan Notes. However, without the consent of each affected Noteholder, an amendment, supplement or waiver may not:

 

	(a)	      	change the maturity of the principal of or any instalment of interest on any Loan Note in a manner adverse to the Noteholders;
	 
	(b)	 	reduce the principal amount of any Loan Note;
	 
	(c)	 	reduce the rate of or extend the time for payment of interest on any Loan Note;
	 
	(d)	 	change the place or currency of payment of principal of or interest on any Loan Note;
	 
	(e)	 	modify any provision of the Loan Notes relating to the waiver of past defaults or the right of the Noteholders to institute suit for the enforcement of any payment on or with respect to any Loan Notes or the modification and amendment provisions of the Loan Notes;
	 
	(f)	 	reduce the percentage of the principal amount of outstanding Loan Notes necessary for amendment to or waiver of compliance with any provision of the Loan Notes or for waiver of any breach of the terms thereof;
	 
	(g)	 	waive a default in the payment of principal of, interest on, or redemption payment with respect to, the Loan Notes;
	 
	(h)	 	modify the ranking or priority of any Loan Note in any manner adverse to the Noteholders;

It shall not be necessary for the consent of the Noteholders under this Schedule 4 to approve the particular form of any proposed amendment, supplement or waiver, but it shall be sufficient if such consent approves the substance thereof.

 

After an amendment, supplement or waiver under this Schedule 4 becomes effective, the Company shall notify the Noteholders affected thereby with a notice briefly describing the amendment; supplement or waiver. Any failure by the Company to send such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amendment, supplement or waiver.

 

 

SCHEDULE 5

 

Form of Transfer Certificate

 

To:       Vishay Precision Group, Inc. (the Company)

 

TRANSFER CERTIFICATE

 

This Transfer Certificate relates to the Instrument constituting up to $_____________ Vishay Precision Group, Inc. Floating Rate Loan Notes 2102 dated ____________, 2010 of Vishay Precision Group, Inc. (the Instrument). Capitalised terms defined in the Instrument shall have, unless otherwise defined in this Transfer Certificate, the same meanings when used in this Transfer Certificate.

 

1. [Transferor] (the Transferring Holder) confirms that the principal outstanding amount of Notes that it holds is $[_____] (the Transferring Holder’s Notes).

 

2. The Transferring Holder requests:

 

	(a)	      	[___________] [Transferee] (the Transferee) to accept and procure the transfer to the Transferee of [the Transferring Holder’s Notes//[_____] principal amount of the Transferring Holder’s Notes, being a principal amount greater than $2,000,000] as further specified in the Appendix (the Transfer Notes) by countersigning and delivering this Transfer Certificate to the Company at its address for the service of notices specified in the Instrument; [and
	 
	(b)	 	the Company to issue a certificate in its name in relation to that portion of the Transferring Holder’s Notes not comprising the Transfer Notes (the Retained Notes) in accordance with clause 6 of the Instrument. For the avoidance of doubt, the Transferor acknowledges that this Transfer Certificate shall not affect its rights, undertakings, liabilities and obligations in respect of the Retained Notes.]

3. The Transferring Holder makes no representation or warranty and assumes no responsibility with respect to the legality, validity, effectiveness, adequacy or enforceability of the Instrument or any document relating thereto and assumes no responsibility for the financial condition of the Company or for the performance and observance by the Company of any of its respective undertakings, liabilities and obligations under the Instrument or any document relating thereto, and any and all such conditions and warranties, whether express or implied by law or otherwise, are hereby excluded.

 

4. In connection with the transfer of the Transfer Notes, the Transferring Holder confirms that it has not utilised any general solicitation or general advertising in connection with the Transfer Notes or the transfer of the Transfer Notes.

 

5. Unless, either (i), one of the boxes below is checked by the Transferring Holder or (ii) the Loan Notes are transferred pursuant to an effective registration statement under the Securities Act, the Company shall not be obliged to register any of the Loan Notes evidenced in the name of any person other than the Transferring Holder.

 

 

6. By checking the box checked bow, the Transferring Holder confirms that the Transfer Notes are being transferred2: 

 

	(a)	      	[_____] to the Company or a subsidiary thereof; or
	 
	(b)	 	[_____] pursuant to and in compliance with Rule 144A under the Securities Act; or
	 
	(c)	 	[_____] to an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act); or
	 
	(d)	 	[_____] outside the United States to a “foreign person” in compliance with Rule 904 of Regulation S under the Securities Act; or
	 
	(e)	 	[_____] pursuant to the exemption from registration provided by Rule 144 under the Securities Act; or
	 
	(f)	 	[_____] pursuant to another available exemption from the registration requirements of the Securities Act.

7. The Transferee hereby requests the Company: 

 

	(a)	      	to accept this Transfer Certificate as being delivered to it pursuant to, and for the purposes of, paragraph 5 of Schedule 3 to the Instrument in relation to the Transfer Notes; and
	 
	(b)	 	to register it in the Register as the Noteholder in respect of the Transfer Notes; and
	 
	(c)	 	to issue a certificate in its name in relation to the Transfer Notes in accordance with clause 6 of the Instrument.

8. The Transferee confirms that it has acceded to the Put and Call Agreement in accordance with paragraph 4 of Schedule 3 to the Instrument and encloses herewith:

 

	(a)	      	a copy of the form of assignment prescribed by the Put Call Agreement duly executed by it; and
	  
	(b)	 	the certificate that evidences the Transferring Holder’s title to the Transfer Notes.

9. The Transferee warrants that it has received a copy of the Instrument together with such other information as it has required in connection with this transaction and that it has not relied, and will not hereafter rely, on the Transferring Holder to check or enquire on its behalf into the legality, validity, effectiveness, adequacy, accuracy or completeness of any such information and further agrees that it has not relied, and will not rely, on the Transferring Holder to assess or keep under review on its behalf the financial condition, creditworthiness, condition, affairs, status or nature of the Company.

 

____________________

 

	2	      	If box (iii), (iv), (v) or (vi) is checked, the Company may require, prior to registering any such transfer of the Transfer Notes such legal opinions, as the Company reasonably requests to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.

 

10. The Transferee hereby undertakes with the Transferring Holder and each of the other parties to the Instrument that it will perform in accordance with their terms all those undertakings, liabilities and obligations that by the terms of the Instrument will be assumed by it after delivery of this Transfer Certificate to the Company and satisfaction of the conditions subject to which this Transfer Certificate is expressed to take effect.

 

11. This Transfer Certificate is not assignable or otherwise negotiable (without prejudice to the provisions of Schedule 3 to the Instrument which shall be applicable to the Transferring Holder in respect of the Retained Notes and to the Transferee in relation to any transfer or assignment of the rights, undertakings, liabilities and obligations assumed by it pursuant hereto).

 

12. This Transfer Certificate and the rights, undertakings, liabilities and obligations of the parties hereunder shall be governed by and construed in accordance with the laws of the State of New York.

 

13. Each of the Transferor and the Transferee agrees that the courts of the State of New York are to have exclusive jurisdiction to settle any disputes that may arise in connection with this Agreement.

 

 

APPENDIX

 

	[Insert details of Transfer Notes.]	 	 
	 

 	     	 
	For and on behalf of the Transferring Holder	 	For and on behalf of the Transferee

 

SCHEDULE 6

 

Restrictions on Transfer of Loan Notes

 

	(a)	      	Each Noteholder agrees that any proposed transfer of any Loan Notes, or any shares of Common Stock issuable upon conversion or exchange thereof, may be effected only (1)(w) inside the United States of America (I) to a person who the seller reasonably believes is a qualified institutional buyer within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A, (II) in accordance with Rule 144 or (III) pursuant to another exemption from the registration requirements of the Securities Act, (x) to the Company, (y) outside the United States of America (A) to a non-U.S. person (within the meaning of Regulation S) in a transaction meeting the requirements of Regulation S or (B) pursuant to another exemption from the registration requirements of the Securities Act or (z) pursuant to an effective registration statement and (2) in each case, in accordance with the application securities laws of any state of the United States of America or any other application jurisdiction. Each Noteholder agrees to notify any purchaser of the resale restrictions set forth above.
	 
	(b)	 	Prior to any Transfer or proposed Transfer of any Loan Notes, the Noteholder thereof shall deliver written notice to the Company in the form set out in Schedule 5 of such Noteholder’s intention to effect such transfer. If the transfer or proposed transfer is pursuant to clause (1)(w) or (1)(y) of the first sentence of the preceding paragraph, then upon receipt of such notice, the Company may request any or all of the following (each a Transfer Document) in a form reasonably acceptable to the Company:
	 
	 	 	(i)	      	an agreement by such transferee to the impression of the restrictive investment legend set forth below on the Loan Note certificates, or any shares of Common Stock issuable upon conversion or exchange thereof;
	 
	 	 	(ii)	 	an agreement by such transferee, in form and substance reasonably satisfactory to the Company, to be bound by the provisions of this Schedule 6 relating to the transfer of such Loan Notes, or any shares of Common Stock issuable upon conversion or exchange thereof; and
	 
	 	 	(iii)	 	an opinion of counsel with expertise in securities law matters reasonably satisfactory to the Company that such transfer complies with applicable securities laws.
	 
	 	 	If the Company requests any Transfer Document(s), it shall do so as promptly as practicable following receipt of the Holder’s notice of intention to Transfer. The Company shall thereafter cause the Transfer to be recorded and a certificate or other evidence of ownership in the name of the transferee to be delivered as soon as practicable after it has received Transfer Documents complying with the terms of this Schedule.
	 
	(c)	 	The Noteholders agree that each certificate issued to evidence Loan Notes, or any shares of Common Stock issuable upon conversion of exchange thereof shall bear a legend to the following effect:

 

	 	 	THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE ACT), OR ANY OTHER APPLICABLE SECURITIES LAWS AND HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH OTHER SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED, OR OTHERWISE DISPOSED OF, EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR PURSUANT TO A TRANSACTION THAT IS EXEMPT FROM SUCH REGISTRATION.
	 
	 	      	The foregoing legend shall be in addition to any other legend required by law.
	 
	(d)	 	The restrictions referenced in this Schedule, including the legend, shall cease and terminate as to any particular Loan Notes, or any shares Common Stock issuable upon conversion or exchange thereof when (x) such Loan Notes, or any shares Common Stock issuable upon conversion or exchange thereof have been transferred in a transaction pursuant to Rule 144 or a registration statement or (y) in the reasonable opinion of counsel for the Company, such restriction is no longer required in order to assure compliance with the Securities Act and applicable state securities laws. Whenever such restrictions shall cease and terminate as to any Notes, the Noteholder shall be entitled to received from the Company, without expense (other than applicable transfer taxes, if any, if such unlegended shares are being delivered and transferred to any person other than the registered Noteholder thereof), new certificates for a like number of Notes not bearing the relevant legend(s) set forth in this Schedule.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)

-8- 

 

 

	      	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.

 

-9- 

 

 

                    (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.

 

-10- 

 

 

     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.

-11- 

 

 

     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

 

-12- 

 

 

                    (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

-13- 

 

 

	      	Ps	       =       	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;

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

 

-14- 

 

 

     Call Target Price Adjustment. The Call Target Price for the Spin-Off Notes shall be determined in accordance with the following formula: 

 

	Ts = To x Ps / (Pp + (r x Ps))

	      	Where:
	 	 	 	 
	 	Ts	       =       	the adjusted Call Target Price for the Spin-Off Notes.
	 	 	 	 
	 	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, in each case in this Section 4.01(e)(i). 

 

     The Call Target Price for the New Notes shall be determined in accordance with the following formula: 

 

	Tn = To x Pp / (Pp + (r x Ps))

	      	Where:
	 	 	 	 
	 	To	       =       	the adjusted Call Target Price for the New Notes.

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

 

     Interest Rate Hurdle Adjustment. The Interest Rate Hurdle applicable on the Spin-Off Notes shall be determined in accordance with the following formula: 

 

	Is = Io x Ps / (Pp + (r x Ps))

	      	Where:
	 	 	 	 
	 	Is	       =       	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, in each case in this Section 4.01(e)(i). 

 

     The Interest Rate Hurdle applicable on the New Notes shall be determined in accordance with the following formula: 

 

	Is = Io x Pp / (Pp + (r x Ps))

	      	Where:
	 	 	 	 
	 	In	       =       	the adjusted Interest Rate Hurdle
	 	 	 	 
	 	Io	=	the Interest Rate Hurdle immediately prior to such adjustment.

-15- 

 

 

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

 

               (ii) In case the Company shall engage in a Spin-Off, and Section 4.01(e)(i) shall not be available to the Holders as a result of the proviso in the first paragraph of Section 4.01(e)(i), then the Holders shall not receive New Notes and Spin-Off Notes and immediately prior thereto the following shall be adjusted in accordance with the following formulae: 

 

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

 

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

	      	where:
	 	 	 	 
	 	Rx	       =       	the adjusted Put/Call Rate.
	 	 	 	 
	 	Ro	=	the Put/Call Rate immediately prior to adjustment pursuant to this Section 4.01(e)(ii).
	 	 	 	 
	 	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.
	 	 	 	 
	 	Ps	=	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.
	 	 	 	 
	 	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.

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

 

	Tx = To x Pp / (Pp + (r x Ps))

	      	Where:
	 	 	 	  
	 	Tx	       =       	the adjusted Call Target Price for the Notes.
	 	 	 	  
	 	To	=	the Call Target Price for the Notes immediately prior to such adjustment.

-16- 

 

 

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

 

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

 

	Ix = Io x Pp / (Pp + (r x Ps))

	      	Where:
	 	 	 	 
	 	Ix	       =       	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 immediately above under “Put/Call Rate Adjustment”. 

 

     An adjustment made pursuant to this Section 4.01(e)(ii) shall become effective immediately after the determination of the adjustments referred to in this Section 4.01(e), retroactive to the date for the Spin-Off. 

 

               (iii) The Company shall give written notice of any Spin-Off, in accordance with Section 6.01 hereof, at least ten (10) Business Days prior to the record date therefor. The Company’s failure to give notice required by this Section 4.01(e)(iii) or any defect therein shall not affect the validity of the Spin-Off covered by this Section 4.01(e). Notwithstanding the foregoing, nothing in this paragraph will prejudice the rights of the Holders pursuant to this Agreement. 

 

     Section 4.02. General Adjustment Provisions. 

 

          (a) Notice of Adjustment. Whenever the Put/Call Rate is adjusted, or the type of securities for which the Notes are exchangeable pursuant to the Put and the Call is changed, the Company shall promptly file, in the custody of its Secretary or an Assistant Secretary at its principal office and with the Put/Call Agent, an officer’s certificate setting forth the adjusted Put/Call Rate, Call Target Price and Interest Rate Hurdle, and, if applicable, Nominal Amount and the kind or nature of any other securities or assets for which the Notes shall become exchangeable, a statement, in reasonable detail, of the facts requiring such adjustment and the computation by which such adjustment was made. Each such officer’s certificate shall be made available at all reasonable times for inspection by the Holders at the office of the Put/Call Agent. 

 

          (b) Good Faith Determination. 

 

               (i) Subject to the following clause (ii), any determination as to whether an adjustment or limitation of exercise is required pursuant to this Section 4.01 (and the amount of any adjustment), shall be binding upon the Holders and the Company if made in good faith by the board of directors of the Company. 

 

               (ii) If a Majority of the Holders shall object to any determination of the board of directors of the Company within ten (10) Business Days of receipt of notice of such determination, then such determination shall be referred to a national independent accounting firm in the United States (the “Accounting Firm”) selected by the Company and reasonably acceptable to a Majority of the Holders. The determination of the adjustment made by the Accounting Firm shall be strictly in accordance with the terms of this Agreement and shall be binding upon the Holders and the Company. The Accounting Firm shall be instructed to notify the Company and the Holders of its determination regarding the adjustment within fifteen (15) Business Days of such referral.

 

-17- 

 

 

               (iii) Whenever this Agreement provides for the reasonable approval of a Majority of the Holders of any action or determination, such approval shall be deemed to be given if a Majority of the Holders do not reasonably object to such action or determination by written notice to the Company within ten (10) Business Days of the date on which notice thereof is first given to the Holders. No objection shall be deemed reasonable if the reasons for such objection are not set forth in reasonable detail in the notice of objection given to the Company as aforesaid. 

 

          (c) Subsequent Adjustments. The adjustment provisions of this Article IV shall be applied successively and from time to time as the circumstances requiring such adjustments shall occur. If as a result of an adjustment made pursuant to this Article IV (except as otherwise specifically provided herein) the Holder of any Notes thereafter surrendered for conversion shall be entitled to receive any securities other than shares of Common Stock into which the Notes were originally convertible, the Put/Call Rate, the Call Target Price and the Interest Rate Hurdle shall be subject to adjustment, from time to time, in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Common Stock contained in this Article IV. 

 

ARTICLE V

THE PUT/CALL AGENT 

 

     Section 5.01. Appointment. The Company hereby appoints the Put/Call Agent as its agent to act as set forth herein, subject to resignation or replacement of the Put/Call Agent as provided herein. The Put/Call Agent agrees to accept such appointment, subject to the terms and conditions as set forth herein. 

 

     Section 5.02. Duties of the Put/Call Agent. The Put/Call Agent acts hereunder as agent and in a ministerial capacity for the Company, and its duties shall be determined solely by the provisions hereof. The Put/Call Agent shall not by any act hereunder be deemed to make any representations as to the validity, value or authorization of any securities or other property delivered upon exercise of the Put or the Call. 

 

     Without prejudice to any liability of any other party hereof, the Put/Call Agent shall not (i) be liable for any recital or statement of facts contained herein or for any action taken, suffered or omitted by it in reliance on any document or instrument believed by it in good faith to be genuine and to have been signed or presented by the proper party or parties, (ii) be responsible for any failure on the part of the Company to comply with any of its covenants and obligations contained in this Agreement or in any Note or (iii) be liable for any act or omission in connection with this Agreement except for its own gross negligence or willful misconduct. 

 

     Any notice, statement, instruction, request, direction, order or demand of the Company shall be sufficiently evidenced by an instrument signed by the Company’s Chairman or Vice Chairman of the Board, President, any Vice President, its Secretary, or Assistant Secretary (unless other evidence in respect thereof is herein specifically prescribed). Without prejudice to any liability of any other party hereof, the Put/Call Agent shall not be liable for any action taken, suffered or omitted by it in accordance with such notice, statement, instruction, request, direction, order or demand believed by it to be genuine. 

 

     The Company agrees to pay the Put/Call Agent reasonable compensation for its services hereunder and to reimburse it for its reasonable expenses hereunder and further agrees to indemnify the Put/Call Agent and save it harmless against any and all losses, expenses and liabilities, including judgments, costs and counsel fees, for anything done or omitted by the Put/Call Agent in the execution of its duties and powers hereunder, except losses, expenses and liabilities arising as a result of the Put/Call Agent’s gross negligence or willful misconduct.

 

-18- 

 

 

     The Put/Call Agent may resign its duties and be discharged from all further duties and liabilities hereunder (except liabilities arising as a result of the Put/Call Agent’s own gross negligence or willful misconduct), after giving thirty (30) days’ prior written notice to the Company. At least fifteen (15) days prior to the date such resignation is to become effective, the Put/Call Agent shall cause a copy of such notice of resignation to be mailed to the Holder of each Note at the Company’s expense. Upon such resignation, or any inability of the Put/Call Agent to act as such hereunder, the Company shall appoint a new Put/Call Agent in writing. The Company shall have complete discretion in the naming of a new Put/Call Agent, who may be an affiliate, subsidiary or department of the Company, or any person used by the Company as transfer agent for the Common Stock. If the Company shall fail to make such appointment within a period of thirty (30) days after it has been notified in writing of such resignation by the resigning Put/Call Agent, then the Holder of any Note may apply to any court of competent jurisdiction for the appointment of a new Put/Call Agent. 

 

     The Company may, upon notice to the Holders, remove and replace the Put/Call Agent if the Put/Call Agent is the transfer agent for the Company’s Common Stock and the Put/Call Agent ceases to be the transfer agent for the Company’s Common Stock for any reason. If for any period no person is acting as Put/Call Agent, then the Company shall discharge the obligations that would otherwise fail to be discharged by the Put/Call Agent during such period. 

 

     After acceptance in writing of an appointment by a new Put/Call Agent is received by the Company, such new Put/Call Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named herein as the Put/Call Agent, without any further assurance, conveyance, act or deed. Any former Put/Call Agent hereby agrees to cooperate with and deliver all records to the new Put/Call Agent at the direction of the new agent and the Company. 

 

     Any corporation into which the Put/Call Agent or any new Put/Call Agent may be converted or merged or any corporation resulting from any consolidation to which the Put/Call Agent or any new Put/Call Agent shall be a party or any corporation succeeding to the trust business of the Put/Call Agent shall be a successor Put/Call Agent under this Agreement without any further act. Any such successor Put/Call Agent shall promptly cause notice of its succession as Put/Call Agent to be mailed to the Company and to each Holder. 

 

     Nothing herein shall preclude the Put/Call Agent from acting in any other capacity for the Company. 

 

ARTICLE VI 

MISCELLANEOUS PROVISIONS 

 

     Section 6.01. Notices. Any notice or demand authorized by this Agreement to be given or made to or on the Company or the Put/Call Agent shall be sufficiently given or made when and if delivered by a recognized international courier service or hand delivery, or by telecopier with copy sent by first class or registered mail, postage prepaid, to the applicable address set forth below (until the Holders are otherwise notified in accordance with this Section by the Company):

 

-19- 

 

 

     If to the Company, then to: 

 

     Vishay Precision Group, Inc. 

     3 Great Valley Parkway

     Malvern, PA 19355-1307

     Attn.: Chief Financial Officer

     Telecopier No.: (484)-321-5301

     Confirm No.: (484)-321-5300 

 

     If to the Put/Call Agent, then to: 

 

     American Stock Transfer & Trust Co.

     59 Maiden Lane

     New York, NY 10038

     Attn.: Exchange Department

     Telecopier No: 718-234-5001

     Confirm No: 718-921-8200 

 

     Any notice pursuant to this Agreement to be given to any Holder of Notes shall be sufficiently given when and if delivered to such Holder at the address appearing on the register maintained for that purpose by the Company (until the Company and the Put/Call Agent are otherwise notified in accordance with this Section by such Holder). Any such notice shall be delivered, by overnight or hand delivery, by telecopier with copy sent by first class mail, postage prepaid, or by first class or registered mail, postage prepaid. 

 

     Section 6.02. Supplements and Amendments. The Company and the Put/Call Agent may from time to time amend or supplement this Agreement in good faith without the approval of any Holders only in order to cure any ambiguity or to correct or supplement any provision contained herein which may be defective or inconsistent with any other provision herein. Any other amendment or supplement to this Agreement shall require the written consent of the Holders of two-thirds (2/3) in nominal amount of the Notes then outstanding. 

 

     Section 6.03. Assignments/Successors. All the covenants and provisions of this Agreement by or for the benefit of the Company or the Put/Call Agent shall bind and inure to the benefit of its successors and assigns hereunder; provided, however, that any assignment by the Company shall not relieve the Company of any of its obligations hereunder; provided, further, that no Holder may assign its rights and obligations except to an assignee who has executed and delivered to the Company an Assignment Form, which Assignment Form, when executed by the transferor and transferee thereunder, shall inure to the benefit of and be binding upon, the Company, the Put/Call Agent and each of the other Holders. This Agreement shall be binding upon and inure to the benefit of the successors and registered assigns of the Initial Holders and all subsequent Holders of Notes. 

 

     Section 6.04. Governing Law. THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF SAID STATE. 

 

     Section 6.05. No Third Party Beneficiaries. Nothing in this Agreement shall be construed to give to any person other than the Company, the Put/Call Agent and the Holders of the Notes any legal or equitable right, remedy or claim under this Agreement; but this Agreement shall be for the sole and exclusive benefit of the Company, the Put/Call Agent and the Holders of the Notes.

 

-20- 

 

 

     Section 6.06. Registered Holders. The Company and the Put/Call Agent shall be entitled to treat as the Holders of the Notes solely those persons in whose names the Notes are registered in the register maintained for that purpose by the Company. 

 

     Section 6.07. Securities Laws. It is the intention of the parties that the issuance of the shares of Common Stock upon exercise of the Put or the Call shall be exempt from registration under the United States securities laws pursuant to Section 3(a)(9) of the Securities Act or any successor statute. If and to the extent that this exemption is not available, the parties will take such action as may be required to permit the delivery of the shares of Common Stock in exchange for the Notes in compliance with the United States securities laws and the rules and regulations of the SEC then in effect. 

 

     Section 6.08. Notification of Delisting. Prior to the occurrence of a Delisting Event, the Company will, at least ten (10) Business Days before the occurrence thereof, notify each holder of such event. Any notice will be in writing and shall specify the date of such Delisting Event. For these purposes “Delisting Event” means the common stock of the Company being delisted from the principal United States national or regional securities exchange or national quotation system on which the shares of common stock are then listed or traded. 

 

     Section 6.09. Headings. The descriptive headings of the several sections and subsections of this. Agreement are inserted for convenience only, do not constitute a part of this Agreement and shall not affect in any way the meanings or interpretation of this Agreement. 

 

     Section 6.10. Counterparts. This Agreement may be executed in counterparts and all such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. 

 

[Remainder of this page left blank.] 

 

-21- 

 

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, as of the day and year first above written. 

 

	VISHAY PRECISION GROUP, INC
	 	 
	By:  	/s/ Steven Klausner
	 	Name: Steven Klausner
	 	Title: Vice President - Treasurer
	 	  
	AMERICAN STOCK TRANSFER & TRUST
	COMPANY
	 	 
	By:	/s/ Paula Carropoli
	 	Name: Paula Carropoli
	 	Title: Vice President

[Signature pages continue]

 

 

 

 

 

[Signature page to Put and Call Agreement dated as of July 21, 2010] 

 

 

	NMS SERVICES (CAYMAN) INC.
	 	 
	By:	/s/ John Servidio
	 	Name: John Servidio
	 	Title: Authorized Officer
	 
	  
	UBS AG, LONDON BRANCH
	 	   
	By:	/s/ Joseph Pozolante
	 	Name: Joseph Pozolante
	 	Title: Associate Director Operations

[Signature page to Put and Call Agreement dated as of July 21, 2010] 

 

 

ANNEX I

Form of Assignment 

 

     THIS ASSIGNMENT dated [_____20______] is supplemental to a Put and Call Agreement (the “Agreement”) dated July 21, 2010 (as amended and restated from time to time) between Vishay Precision Group, Inc., a Delaware corporation (the “Company”), UBS AG, London Branch , and [________] each an “Initial Holder”) and _________, a ___________the (“Put/Call Agent”). 

 

     Unless otherwise defined in this Assignment, words and expressions defined in the Agreement shall have the same meaning when used in this Assignment. 

 

     Whereas: 

 

     (A) [_______] (the “Transferor”) is a Holder of [_________] nominal amount of Notes (the “Transferred Notes”). 

 

     (B) The Transferor proposes to transfer the Transferred Notes [(being all the Notes held by it)] to [_______] (the “Transferee”). 

 

     [(C) The Transferor proposes to retain [__________] nominal amount of Notes (the “Retained Notes”).] 

 

Assignment 

 

     With effect from the date on which the transfer of the transferred Notes takes effect in accordance with the terms of the Notes, in respect of the Agreement and the Transferred Notes only: 

 

     (a) the Transferor shall be released from further undertakings, liabilities and obligations to the Company and the Put/Call Agent and each of the other Holders (the “Non-transferring Parties”), and each of the Non-transferring Parties shall be released from further undertakings, liabilities and obligations to the Transferor, and their respective rights shall be cancelled (the discharged rights and obligations); and

 

     (b) the Transferee shall assume such undertakings, liabilities and obligations towards, and acquire rights against, each of the Non-transferring Parties and each of the Non-transferring Parties shall assume such undertakings, liabilities and obligations towards, and acquire rights against, the Transferee that differ from such discharged rights and obligations only insofar as each such Non-transferring Party and the Transferee have assumed and acquired the same in place of each such Non-transferring Party and the Transferor.

 

     For the avoidance of doubt, this Assignment shall not affect the rights, undertakings, liabilities and obligations of the Transferor in respect of the Retained Notes. 

 

     The Transferee hereby notifies the Company that its address for notices for the purposes of Section 6.01 of the Agreement is: 

 

	     	 	     	[______]
	 	Fax No:	 	[______]
	 	Attention:	 	[______]

 

     This Assignment is governed by the laws of the State of New York. 

 

	Signed by
	 
	   
	Transferor
	 
	   
	Transferee

Annex I-1 

 

 

ANNEX II

PUT EXERCISE NOTICE 

 

     If you, the Holder, want to exercise the Put, fill in the form below. 

 

     I or we, the registered owner of Notes, irrevocably Put to the Company Notes in the nominal amount of $_________________ (if less than the aggregate nominal amount of all Notes held by the Holder, must be in $2,000,000 denominations) at the Put/Call Rate and on the terms and conditions specified in that certain Put and Call Agreement, dated as of July 21, 2010 by and among the parties thereto, and request that certificates for the shares of Common Stock hereby exchanged for the indicated nominal amount being put to the Company (and any securities or other property issuable or transferable upon such exercise) be issued in the name of and delivered to:

 

     (Print or type name, address and zip code and social security or tax ID number of owner) 

 

and, if such nominal amount listed above shall be less than the full nominal amount of the Note(s) of which I am the Holder, that a new Note of like tenor and date for the balance of the nominal amount thereunder be delivered to the undersigned. 

 

     Nominal amount of Note held immediately prior to exercise of the Put:

 

     Nominal amount of Note for which this Put is being exercised:

 

     Balance in nominal amount to be issued as a new Note: 

 

	Date:	Signed:  	 
	 	 	(Signed exactly as your name appears on the Note)

Annex II-1

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