Document:

ex4_1.htm

EXHIBIT 4.1

 

FIRST AMENDMENT

TO THE

RIGHTS AGREEMENT

 

This FIRST AMENDMENT TO THE RIGHTS AGREEMENT, dated as of December 12, 2011 (this “Amendment”), to the Rights Agreement, dated as of June 1, 2006 (the “Rights Agreement”), is by and between Synovis Life Technologies, Inc., a Minnesota corporation (the “Company”), and American Stock Transfer & Trust Company, LLC, a New York limited liability trust company (the “Rights Agent”).  All capitalized terms used in this Amendment and not otherwise defined herein shall have the meanings ascribed to them in the Rights Agreement.

 

WHEREAS, pursuant to Section 27 of the Rights Agreement, the Company may from time to time supplement or amend the Rights Agreement in accordance with the provisions of Section 27 thereof;

 

WHEREAS, the Company intends to enter into an Agreement and Plan of Merger, dated as of December 12, 2011, (the “Merger Agreement”), among the Company, Baxter International Inc., a Delaware corporation (“Parent”), and Twins Merger Sub, Inc., a Minnesota corporation and wholly owned subsidiary of Parent; and

 

WHEREAS, on December 12, 2011, the Board of Directors of the Company unanimously authorized an amendment of the Rights Agreement to render the Rights Agreement inapplicable with respect to the transactions contemplated by the Merger Agreement and authorized and directed the officers of the Company to execute and deliver to the Rights Agent (i) such an amendment and (ii) an officer’s certificate stating that this Amendment has been so authorized and that the Company and this Amendment are in compliance with the terms of Section 27 of the Rights Agreement.

 

NOW, THEREFORE, in consideration of the premises and mutual agreements hereinafter set forth, the Company and the Rights Agent agree to amend the Rights Agreement as follows:

 

1.  Amendment of Section 1.

 

(a)           Section 1 of the Rights Agreement is supplemented to add the following definitions:

 

“Merger” shall have the meaning given to such term in the Merger Agreement.

 

“Merger Agreement” means the Agreement and Plan of Merger, dated as of December 12, 2011, among the Company, Baxter International Inc., a Delaware corporation (“Parent”), and Twins Merger Sub, Inc., a Minnesota corporation and wholly owned subsidiary of Parent (“Merger Sub”) (as such agreement is amended, supplemented, modified or replaced from time to time).

 

  

  

  

 

“Voting Agreements” shall have the meaning given to such term in the Merger Agreement.

 

(b)           The definition of “Acquiring Person” in Section 1 of the Rights Agreement is hereby amended by adding as the final sentence thereto the following:

 

“Notwithstanding anything in this Agreement to the contrary, none of Parent, Merger Sub or any of their respective Affiliates or Associates shall be deemed to be an Acquiring Person, either individually or collectively, as a result of (i) the approval, execution or delivery of, or consummation or performance of the transactions contemplated under, the Merger Agreement or the Voting Agreements, including, without limitation, the Merger, (ii) the acquisition of, or right or obligation to acquire, beneficial ownership of Common Shares as a result of the execution of the Merger Agreement, (iii) the conversion of Common Shares into the right to receive the Per Share Merger Consideration (as such term is defined in the Merger Agreement) in accordance with the Merger Agreement or (iv) the announcement of the Merger or any of the foregoing.”

 

(c)           The definition of “Distribution Date” in Section 1 of the Rights Agreement is hereby amended by adding as the final sentence thereto the following:

 

“Notwithstanding anything in this Agreement to the contrary, no Distribution Date shall be deemed to have occurred as a result of (i) the approval, execution or delivery of, or consummation or performance of the transactions contemplated under, the Merger Agreement or the Voting Agreements, including, without limitation, the Merger, (ii) the acquisition of, or right or obligation to acquire, beneficial ownership of Common Shares as a result of the execution of the Merger Agreement, (iii) the conversion of Common Shares into the right to receive the Per Share Merger Consideration (as such term is defined in the Merger Agreement) in accordance with the Merger Agreement or (iv) the announcement of the Merger or any of the foregoing.”

 

(d)           The definition of “Stock Acquisition Date” in Section 1 of the Rights Agreement is hereby amended by adding as the final sentence thereto the following:

 

“Notwithstanding anything in this Agreement to the contrary, no Stock Acquisition Date shall be deemed to have occurred as a result of (i) the approval, execution or delivery of, or consummation or performance of the transactions contemplated under, the Merger Agreement or the Voting Agreements, including, without limitation, the Merger, (ii) the acquisition of, or right or obligation to acquire, beneficial ownership of Common Shares as a result of the execution of the Merger Agreement, (iii) the conversion of Common Shares into the right to receive the Per Share Merger Consideration (as such term is defined in the Merger Agreement) in accordance with the Merger Agreement or (iv) the announcement of the Merger or any of the foregoing.”

 

2.  Amendment of Section 13(a).  Section 13(a) of the Rights Agreement is hereby amended by adding the following at the end of Section 13(a):

 

“Notwithstanding anything in this Agreement to the contrary, this Section 13 shall not be triggered as a result of (i) the approval, execution or delivery of, or consummation or performance of the transactions contemplated under, the Merger Agreement or the Voting Agreements, including, without limitation, the Merger, (ii) the acquisition of, or right or obligation to acquire, beneficial ownership of Common Shares as a result of the execution of the Merger Agreement, (iii) the conversion of Common Shares into the right to receive the Per Share Merger Consideration (as such term is defined in the Merger Agreement) in accordance with the Merger Agreement or (iv) the announcement of the Merger or any of the foregoing.”

 

  

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3.  Amendment of Section 23.  Section 23 of the Rights Agreement is hereby amended by adding the following as paragraph (g) thereof:

 

“(g)           Notwithstanding anything in this Agreement to the contrary, this Agreement shall automatically terminate (without any further action of the parties hereto) and be of no further force and effect immediately prior to the Effective Time (as defined in the Merger Agreement) and the Rights shall thereupon automatically expire and be canceled without the payment of any consideration to the holders of the Rights, including, without limitation, the Redemption Price, and such time shall be deemed to be the Expiration Date for all purposes hereunder.  No holder of Rights shall be entitled to exercise such Rights under, or be entitled to any rights pursuant to, this Agreement, as a result of  (i) the approval, execution or delivery of, or consummation or performance of the transactions contemplated under, the Merger Agreement or the Voting Agreements, including, without limitation, the Merger, (ii) the acquisition of, or right or obligation to acquire, beneficial ownership of Common Shares as a result of the execution of the Merger Agreement, (iii) the conversion of Common Shares into the right to receive the Per Share Merger Consideration (as such term is defined in the Merger Agreement) in accordance with the Merger Agreement or (iv) the announcement of the Merger or any of the foregoing.”

 

4.  Effectiveness; Certification.  This Amendment shall be deemed effective as of the date first written above (and in any case not later than immediately prior to the execution and delivery of the Merger Agreement).  Except as amended hereby, the Rights Agreement shall remain in full force and effect and shall be otherwise unaffected hereby.  The officer of the Company executing this Amendment hereby certifies to the Rights Agent, for and on behalf of the Company, but without personal liability, that the amendment to the Rights Agreement set forth in this Amendment is in compliance with Section 27 of the Rights Agreement, and the certification contained in this Section 4 shall constitute the certification required by Section 27 of the Rights Agreement.

 

5.  Governing Law.  This Amendment shall be governed by and construed in accordance with the laws of the State of Minnesota.

 

6.  Counterparts.  This Amendment may be executed in any number of counterparts (including by means of telecopied signature pages or signature pages in “pdf” or similar format sent as an attachment to an electronic mail message), and each of such counterparts shall be deemed to be an original, and all such counterparts shall together constitute one and the same agreement.

 

  

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7.  Notice.  The Rights Agent and the Company hereby waive any notice requirement with respect to each other under the Rights Agreement, if any, pertaining to the matters covered by this Amendment.

 

8.  Severability.  The terms, provisions, covenants or restrictions of this Amendment shall be deemed severable and the invalidity or unenforceability of any term, provision, covenant or restriction shall not affect the validity or enforceability of the other term, provision, covenant or restriction hereof. If any term, provision, covenant or restriction of this Amendment, or the application thereof to any person or any circumstance, is invalid or unenforceable, (a) a suitable and equitable term, provision, covenant or restriction shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable term, provision, covenant or restriction and (b) the remainder of this Amendment and the application of such term, provision, covenant or restriction to other persons or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such term, provision, covenant or restriction, or the application thereof, in any other jurisdiction.

[Remainder of page intentionally left blank.  Signature page follows.]

 

  

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IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to the Rights Agreement to be duly executed, all as of the date and year first above written.

 

	 	

SYNOVIS LIFE TECHNOLOGIES, INC.

	 	 
	 	 
	 	/s/ Richard W. Kramp 	 
	 	Name: Richard W. Kramp
	 	Title: Chief Executive Officer
	 	 
	 	 
	 	

AMERICAN STOCK TRANSFER & TRUST 

COMPANY, LLC, as Rights Agent

	 	 
	 	 
	 	

/s/ Paula Caroppoli

	 
	 	

Name: Paula Caroppoli

	 	

Title: Senior Vice PresidentUnassociated Document

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND IS A "RESTRICTED SECURITY" AS THAT TERM IS DEFINED IN RULE 144 UNDER THE ACT. THE NOTE MAY NOT BE OFFERED FOR SALE, SOLD OR TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY.

  

FORM OF PROMISSORY NOTE

	
$ __________

	
__________, 2011

 

For value received, the undersigned MUSCLEPHARM CORPORATION (the “Company”) promises to pay to the order of _____________("Holder"), in lawful money of the United States at the  address  of Holder set forth below, the principal sum of  ________________________Thousand Dollars ($____,000.00) on __________________, 2013 (the “Maturity Date”) plus interest at the rate of fifteen percent (15%).  The Note shall be payable in eighteen (18) equal installments of principal and interest in the amount of _________________________________($__________) beginning on ______________________, 2011 and continuing on the first day of each month thereafter.  If a payment on this Note shall become due on a Saturday, Sunday or public holiday under the laws of the State of Colorado, such payment shall be made on the next succeeding business day.

 

This Note is subject to the following additional provisions:

1.  $1,000,000 Private Offering.  This Note is one of a series of Notes in the aggregate amount of up to $ 1,000,000 which are being issued in connection with a financing being conducted by the Company.   In this financing,  the Company is attempting to raise up to a maximum of  $1,000,000 in debt financing from accredited investors pursuant to a subscription agreement in a private offering.

 

2. Sinking Fund.  The Company agrees that it will establish an omnibus account in which shall be deposited all cash from accounts receivable and advances from manufacturers and end-user clients. One account in the omnibus account will be a “segregated account” in which the Company shall deposit of 10% of all cash from manufacturers and end-user clients that comes to the omnibus account.  That Segregated Account will not be used for operating and other expenses, including refunds, and shall be used solely to pay the 15% interest on the notes pro rata among all Note Holders on a monthly basis to the extent that there is cash in the account and if there is any additional cash it will be used to make principal payments on all of the notes on a pro rata basis; provided, however, that any such partial prepayment of principal shall not reduce the amount of interest payable under this Note.  In the event that the Company violates the terms of this provision, the exercise price of the Warrants will be reduced to $.01.

 

3.  Company Financings.  In the event that the Company completes one or more debt or equity financing of at least $1,000,000 in gross proceeds before the Notes have been paid off, the Company agrees that it will apply 10% of the gross proceeds from each financing toward paying off the Notes and any other notes issued by the Company during __________ and __________ 2011 on a pro rata basis; and in the event that the Company completes any debt or equity financing of at least $5,000,000 before the Notes have been paid off, the Company agrees that it will completely pay all of the Notes off, subject to the terms of Section 5.

 

  

 

  

 

4.           Additional terms. Within thirty days of the date of this Note, the Company shall draft a 2011 and 2012 budget and pro forma financials that are in a form which will be submitted to the Company Board of Directors for approval, and determination of performance based compensation for 2011 and 2012. In addition, the Company must produce a signed contract with John H. Bluher as Chief Operating Officer for the Company on or before ____________, 2011.

 

5.           Prepayment. The Company may prepay this Note at any time after one year from its issuance date upon payment to Holder of an amount equal to five months of interest.

 

6.       Sale of assets or liquidation of Company.     In the event that the Company sells substantially all of its assets or liquidates the business, the Company agrees to pay the Notes pari passu with all other debt obligations which are evidenced by written instruments.

 

7. Warrants. Simultaneously with the issuance of this Note, the Company is also issuing to the Holder warrants with 100% coverage to the principal amount of the Note. The warrants will be exercisable at a price equal to  $.015 for a two year period commencing six months after the issuance of the warrant.

 

8. Default. Immediately upon the occurrence of an "Event of Default" (as defined below), Holder may, at his option, declare immediately due and payable the entire unpaid principal amount of this Note, plus any other amounts payable at the time of such declaration pursuant to this Note. An Event of Default shall be defined as each of the following: (i) failure of Company to make any payment of interest or principal within ten (10) days after the due date; (ii) failure of the Company to perform, in any material respect, any other covenant, term, condition, agreement or obligation of the Company under this Note and such failure shall continue uncured for a period of ten (10) days after written notice from the holder of such failure;  (iii) Company shall admit in writing its inability to pay its debts as they become due, shall make a general assignment for the benefit of creditors or shall file any petition for action for relief under any bankruptcy, reorganization, insolvency or moratorium law, or any other law or laws for the relief of, or relating to, debtors; or (iv) an involuntary petition shall be filed against Company under any bankruptcy, reorganization, insolvency or moratorium law, or any other law or laws of for the relief of, or relating to, debtors unless such petition shall be dismissed or vacated within thirty (30) days of the date thereof.

 

9. Waiver of Demand, Presentment, etc.  The Company hereby expressly waives demand and presentment for payment, notice of nonpayment, protest, notice of protest, notice of dishonor, notice of acceleration or intent to accelerate, bringing of suit and diligence in taking any action to collect amounts called for hereunder and shall be directly and primarily liable for the payment of all sums owing and to be owing hereunder, regardless of and without any notice, diligence, act or omission as or with respect to the collection of any amount called for hereunder.

 

10.   Attorney’s Fees.   If Holder should institute collection efforts, of any nature whatsoever, to attempt to collect  any and all amounts due hereunder upon the default of Company, Company shall be liable to pay to Holder immediately and without demand all reasonable costs and expenses of collection incurred by Holder, including, without limitation, reasonable attorney fees, whether or not suit or other action or proceeding be instituted and specifically including but not limited to collection efforts that may be made through a bankruptcy court.

 

  

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11. Notices. Any notice or other communication, except for payment hereunder, required or permitted hereunder shall be in writing and shall be deemed to have been given upon delivery if personally delivered or one day after deposit if deposited in the United States mail for mailing by certified mail, postage prepaid, and addressed as follows:

                                     

	
If to Company:

	
MUSCLEPHARM CORPORATION

	  	
4721 Ironton Street

	 
	  	
Denver, CO  80239

	 
	  	  	 
	
If to Holder:

	  	 
	  	  	 
	 	 	 
	 	 	 

 

Any payment shall be deemed made upon receipt by Holder.  Holder or Company may change  their  address  for  purposes  of  this  paragraph  by giving  to  the other party notice in conformance with this paragraph of such new address.

   

12. Counterparts Acceptable.  This Note may be executed simultaneously in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

13.  Governing Law. This Note shall be construed in accordance with the laws of the State of Colorado.

 

IN WITNESS WHEREOF, the parties hereto have executed this Note as of the day and year first above written.

 

	
MUSLCEPHARM CORPORATION.

	 	 
	
By:

	  
	 	
Brad Pyatt, CEO

  

ACKNOWLEDGED AND AGREED TO:

 

	
"HOLDER"

	  
	  

 

  

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