Document:

Exhibit 4.1

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR THE TRANSFER AGENT NAMED ON THE FACE OF THIS CERTIFICATE, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL IN AS MUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE STATEMENT WITH RESPECT TO SHARES.  IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE TRANSFER AGENT NAMED ON THE FACE OF THIS CERTIFICATE SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

 

 

	
Certificate   Number 
    	
Number of Shares
    
	
 
    	
 
    
	
 
    	
CUSIP 48248A 603
    
	
 
    	
ISIN US48248A6038
    

 

KKR FINANCIAL HOLDINGS LLC

 

7.375% Series A LLC Preferred Shares

(no par value)

(initial liquidation preference $25 per share)

 

KKR FINANCIAL HOLDINGS LLC, a Delaware limited liability company (the “Company”), hereby certifies that Cede & Co. (the “Holder”), is the registered owner of the number shown on Schedule I hereto of fully paid and non-assessable shares of the Company’s designated 7.375% Series A LLC Preferred Shares with no par value and an initial liquidation preference of $25 per share (the “Series A LLC Preferred Shares”).  The Series A LLC Preferred Shares are transferable on the books and records of the Registrar, in person or by a duly authorized attorney, upon surrender of this certificate duly endorsed and in proper form for transfer.  The designations, rights, privileges, restrictions, preferences and other terms and provisions of the Series A LLC Preferred Shares represented hereby are and shall in all respects be subject to the provisions of the share designation dated January 17, 2013 as the same may be amended from time to time (the “Certificate of Designation”) and the Amended and Restated Operating Agreement of the Company, as amended, and as may be further amended from time to time (together with the Certificate of Designation, the “Agreement”), The Holder, by accepting the Series A LLC Preferred Shares, is deemed to have (i) requested admission as, and agreed to become, a Member and to have agreed to comply with and be bound by the Agreement, (ii) granted the powers of attorney provided for in the Agreement and (iii) made the waivers and given the consents and approvals contained in the Agreement.

 

Capitalized terms used herein but not defined shall have the meaning given them in the Agreement.  Copies of the Agreement are on file at, and will be furnished without charge on delivery of written request to the Company at, the principal office of the Company or such other address as may be specified by notice under the Agreement.

 

Reference is hereby made to select provisions of the Series A LLC Preferred Shares set forth on the reverse hereof, and to the Agreement, which select provisions and the Agreement shall for all purposes have the same effect as if set forth at this place.

 

Unless the Registrar has properly countersigned this share certificate representing the Series A LLC Preferred Shares, such Series A LLC Preferred Shares shall not be entitled to any benefit under the Agreement or be valid or obligatory for any purpose.

 

 

IN WITNESS WHEREOF, this certificate has been executed on behalf of the Company by two Officers of the Company this      day of                  .

 

	
 
    	
KKR   Financial Holdings LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
William   C. Sonneborn
    
	
 
    	
 
    	
Title:
    	
Chief   Executive Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
Nicole   J. Macarchuk
    
	
 
    	
 
    	
Title:
    	
General   Counsel and Secretary
    

 

 

REGISTRAR’S COUNTERSIGNATURE

 

These are Series A LLC Preferred Shares referred to in the within-mentioned Certificate of Designation.

 

Dated:                       

 

AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC, as Registrar

 

 

	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

 

Distributions on each Series A LLC Preferred Share shall be payable subject to the terms and conditions of, in the manner and at the applicable rate provided in the Agreement.

 

The Series A LLC Preferred Shares shall not be convertible into shares of any other class or series of shares or any other security.

 

The Company shall furnish without charge to each holder who so requests a summary of the authority of the Board of Directors to determine variations for future series within a class of Shares and the designations, limitations, preferences and relative, participating, optional or other special rights of each class or series of share capital issued by the Company and the qualifications, limitations or restrictions of such preferences and/or rights.

 

 

ASSIGNMENT

 

FOR VALUE RECEIVED, the undersigned assigns and transfers the Series A LLC Preferred Shares evidenced hereby to:

 

 

 

(Insert assignee’s social security or taxpayer identification, if any)

 

 

 

(Insert address and zip code of assignee)

 

 

(Insert assignee’s social security or taxpayer identification, if any)

 

and irrevocably appoints:

 

 

 

as agent to transfer the Series A LLC Preferred Shares evidenced hereby on the books of the Transfer Agent.  The agent may substitute another to act for him or her.

 

	
Date:
    
	
 
    
	
Signature:
    	
 
    
	
(Sign   exactly as your name appears on the other side of this Certificate)
    
	
 
    
	
Signature   Guarantee:
    	
 
    
			

 

(Signature must be guaranteed by an “eligible guarantor institution” that is a bank, stockbroker, savings and loan association or credit union meeting the requirements of the Transfer Agent, which requirements include membership or participation in the Securities Transfer Agents Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Transfer Agent in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.)

 

 

Schedule I

 

KKR Financial Holdings LLC

 

Global Preferred Share

7.375% Series A LLC Preferred Shares

 

Certificate Number:

 

The number of Series A LLC Preferred Shares initially represented by this Global Preferred Share shall be.  Thereafter the Transfer Agent and Registrar shall note changes in the number of Series A LLC Preferred Shares evidenced by this Global Preferred Share in the table set forth below:

 

	
Amount of Decrease
   in Number of Shares 
   Represented by this
   Global Preferred
   Share
    	
 
    	
Amount of Increase
   in Number of Shares
   Represented by this
   Global Preferred
   Share
    	
 
    	
Number of Shares
   Represented by this
   Global Preferred
   Share following
   Decrease or
   Increase
    	
 
    	
Signature of
   Authorized Officer
   of Transfer Agent
   and Registrar
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

 

The Shares represented by this certificate are subject to restrictions on Beneficial and Constructive Ownership and Transfer. Subject to certain further restrictions and except as expressly provided in the Company’s Agreement (i) no Person may Beneficially Own or Constructively Own Common Shares of any class or series of Shares of the Company in excess of 9.8% in value or in number, whichever is more restrictive, of any class or series of Shares of the Company unless such Person is an Excepted Holder (in which case the Excepted Holder Limit shall be applicable); and (ii) no Person may Beneficially Own Shares that would result in KKR Financial Corp. or any other subsidiary of the Company that has elected to be taxed as a “real estate investment trust” (a “REIT”) pursuant to Section 856 of the Code being “closely held” under Section 856(h) of the Code or would otherwise cause any such entity to fail to qualify as a REIT. Any Person who Beneficially Owns or Constructively Owns or attempts to Beneficially Own or Constructively Own Shares which causes or will cause a Person to Beneficially Own or Constructively Own Shares in excess or in violation of the above limitations must immediately notify the Company. If any of the restrictions on transfer or ownership in (i) or (ii) above are violated, the Shares represented hereby will be automatically transferred to a Trustee of a Charitable Trust for the benefit of one or more Charitable Beneficiaries, and such Person shall acquire no rights in such Shares. If, notwithstanding the foregoing sentence, a Transfer to the Charitable Trust is not effective for any reason to prevent a violation of the restrictions on Transfer and ownership in (i) or (ii) above, then the attempted Transfer of that number of Shares that otherwise would cause any Person to violate such restrictions shall be void ab initio and the intended transferee shall acquire no rights in such Shares. In addition, the Company may redeem Shares upon the terms and conditions specified by the Agreement and the Board of Directors in its sole discretion if the Board of Directors determines that ownership or a Transfer or other event may violate the restrictions described above. All capitalized terms in this Certificate have the meanings defined in the Agreement of the Company, as the same may be amended from time to time, a copy of which, including the restrictions on Transfer and ownership, and the rights of redemption of the Company, will be furnished to each holder of Shares of the Company on request and without charge. Requests for such a copy may be directed to the Secretary of the Company at its principal office.Exhibit 10.1

 

LodgeNet Interactive Corporation

3900 West Innovation Street

Sioux Falls, SD 75107

 

January 15, 2013

 

Richard L. Battista

c/o Venable, LLP

2049 Century Park East, 21st Floor

Los Angeles, CA  90067

Attn:  Alan J. Epstein, Esq.

 

Re: Resignation Letter Agreement

 

Dear Mr. Battista:

 

LodgeNet Interactive Corporation, a Delaware corporation (the “Company”), hereby acknowledges and accepts your request to resign from your position as president and chief executive officer of, and as a member of the Board of Directors of, the Company in contemplation of the imminent sale of the Company.  Moreover, you shall concurrently resign as an officer or director of any direct or indirect subsidiary of the Company, as well as a member of any committees of the Company or any of its subsidiaries or affiliates.

 

The Company hereby agrees to and accepts such resignation, which shall be deemed to have occurred by mutual agreement of the Company and you, effective as of 8 a.m. (CST) on January 16, 2013 (“Resignation Date”), by you as an employee, officer or director of, or other position with, the Company or any of its direct or indirect subsidiaries or affiliates; provided, however, that such acknowledgement is contingent on your signing this letter agreement (this “Resignation Letter”) in the space provided below and returning the signed Agreement to Mr. James G. Naro at the Company on or prior to 8 a.m. (CST) on January 16, 2013.

 

Subject to your signing the enclosed Separation and General Release Agreement (the “Release”), a copy of which is attached hereto as Exhibit A and returning the signed Release to James G. Naro at the Company on or after January 16, 2013, the Company shall provide you as follows:

 

(1)         make a lump sum payment to you on the Resignation Date, by wire-transfer of clear funds, in the amount of $1,388,592.88 (which amount includes your accrued and unpaid salary and accrued and unused vacation through January 16, 2013, your accrued 2012 pro-rated Guaranteed Minimum Bonus, and twelve months of Base Salary, Guaranteed Minimum Bonus and COBRA premiums) and subject to required withholding of applicable taxes; and

 

(2)         continued exclusive use of your existing office and parking space at 2029 Century Park East, Suite 1400 , Los Angeles, CA 90067, through March 31, 2013, without cost to you.

 

In addition, you shall continue to receive reimbursement of your business expenses incurred through the Resignation Date in accordance with the terms of the Company’s business expense reimbursement policy in effect as of the date hereof.  Further, the directors’ and officers’ insurance currently in effect with respect to the Company shall remain in effect in accordance with the terms thereof as of the date hereof.

 

The Company and you agree to the form of press release attached hereto.  The Company and you agree that no other press releases will be made by either party unless approved by the other party, such approval

 

 

not to be unreasonably withheld or delayed, except that the Company may make any further required disclosures pursuant to its reporting obligations under applicable law.

 

The Company agrees that you shall not be obligated to seek other employment or take any actions to mitigate the payments or continuation of benefits required under this Resignation Letter.  In addition, the Company will not retain or have a right of offset against the amounts payable to you under this Resignation Letter and the Company will not be entitled to reduce the amount of any compensation or benefits payable to you under this Resignation Letter by the amount of salary, bonus or other compensation of any kind, and/or corresponding benefits, earned or received by you from any employment, self-employment or other activities at any time after the Resignation Date.

 

You hereby agree to not make any false, defamatory or disparaging statements about the Company, or the current or former officers or directors of the Company that are reasonably likely to cause material damage to the Company or any of its affiliates, or the current or former officers or directors of the Company.  The Company agrees that neither the officers of the Company nor the Board of Directors of the Company shall make any false, defamatory or disparaging statements about you that are reasonably likely to cause material damage to you.  Notwithstanding the foregoing, nothing in this paragraph shall prohibit you or the Company from (i) providing truthful and accurate information to any governmental agency or as otherwise may be required by law, (B) responding publicly to incorrect, disparaging or derogatory public statements made by the other party in violation of this paragraph to the extent reasonably necessary to correct or refute such statements, or (C) conferring in confidence with its, his or her legal representatives and who have agreed to maintain the confidentiality of such statements.

 

The Company and you agree that the Employment Agreement between the Company and you dated as of September 11, 2012 (the “Employment Agreement”) and the “period of employment” (as defined therein), is hereby terminated effective as of the Resignation Date and is of no further force and effect, except that the following provisions of the Employment Agreement shall survive such termination pursuant to the terms thereof:  Section 8 (Confidentiality); Section 9 (Patents and Other Intellectual Property); Section 10 (Non-Solicitation; Remedies); Section 11 (Administrator and Claims Procedure) and Section 14 (Indemnification).

 

The Company and you further agree that the Key Employee Bonus letter agreement dated November 27, 2012 (“KEIP Agreement”) is hereby terminated as of the Resignation Date and is of no further force and effect.  Notwithstanding the foregoing, you shall be entitled to retain and shall have no obligation to refund to the Company any amounts paid by the Company to you under the KEIP Agreement prior to the date of this Resignation Letter.

 

This Resignation Letter may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same agreement.  A counterpart of this Resignation Letter may be signed by one party to this Resignation Letter and telecopied (or sent by pdf) to the other party to this Resignation Letter (i) shall have the same effect as an original signed counterpart of this Resignation Letter and (ii) shall be conclusive proof, admissible in judicial proceedings, of such party’s execution of this Resignation Letter.

 

This Resignation Letter, together with the Release, constitutes the entire agreement of the parties with respect to the subject matter hereof and may be amended only in a writing signed by both parties.  If and to the extent of any inconsistencies between the terms of this Resignation Letter and the Employment Agreement and/or the KEIP Agreement, the terms of this Resignation Letter shall prevail.  All provisions of this Resignation Letter shall be governed by and construed in accordance with the laws of the State of Delaware exclusively and without reference to principles of conflicts of laws.

 

 

	
Sincerely,
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
AGREED AND ACKNOWLEDGED:
    
	
LODGENET INTERACTIVE CORPORATION
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/ James G. Naro
    	
 
    	
/s/ Richard L. Battista
    
	
By: [·] James G.   Naro
    	
 
    	
Name: Richard L. Battista
    
	
Title: [·] SVP,   General Counsel
    	
 
    	
Date: January 15, 2013
    

 

 

General Release Agreement

 

This General Release Agreement is made and effective as of January 16, 2013 (“Effective Date”), by and between LodgeNet Interactive Corporation, a Delaware corporation (the “Company”) and Richard L. Battista (“you” or “your” ) in connection with your resignation from your position as president and chief executive officer of the Company.  In consideration of the mutual releases and other covenants set forth herein, and for other good and valuable consideration, the Company and you knowingly and voluntarily agree as of the Effective Date as follows:

 

A.                                  Release by Richard L. Battista.

 

1.              You knowingly and voluntarily waive and release forever whatever claims you ever had, now have or hereafter may have against the Company and any subsidiary or controlled affiliate of the Company, any of its successors or assigns and any of its present and former employees, directors, officers, shareholders and agents (collectively referred to as the “Releasees”) based upon any matter, occurrence or event existing or occurring prior to the execution of this general release agreement (this “Release”), including anything relating to (a) your employment or engagement for services with the Company or any of its subsidiaries or controlled affiliates or to the termination of such employment or services, (b) your status as a shareholder or creditor of the Company, (c) your employment agreement dated September 11, 2012, between the Company and you (the “Employment Agreement”), and (d) your rights under that certain Key Employee Bonus letter agreement dated November 27, 2012, between the Company and you (“KEIP Agreement”); provided, however, that notwithstanding anything to the contrary herein, this waiver and release shall not release or affect, and you do not hereby release, waive or discharge, your rights and claims under or with respect to:  (i) any equity agreement with the Company, (ii) any benefits under the Company’s benefit plans (excluding severance pay and benefits) in accordance with the terms of such plans, (iii) your rights under that certain resignation letter agreement dated January 15, 2013 (“Resignation Agreement”), (iv) any directors’ and officers’ insurance; (v) indemnification required to be provided by the Company under the Employment Agreement, applicable law and/or the Company’s articles of incorporation and by-laws, (vi) your rights to continuation of group health coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, and (vi) your rights under this Release (collectively, the “Excluded Rights”).

 

2.              This release and waiver by you includes but is not limited to any rights or claims under United States federal, state and local law and the national and local law of any foreign country (statutory or decisional) for wrongful or abusive discharge, for breach of any contract, for misrepresentation, for breach of any securities laws or for discrimination based upon race, color, ethnicity, sex, age, national origin, religion, disability, sexual orientation or any other unlawful criterion or circumstance, including rights or claims under Title VII of the Civil Rights Act of 1964, as amended; the Americans with Disabilities Act of 1990, as amended; the Civil Rights Act of 1991; the Family and Medical Leave Act of 1993; the Equal Pay Act of 1963; the Worker Adjustment and Retraining Notification Act; the Employee Retirement Income Security Act of 1974; the Fair Credit Reporting Act; and any other state wage payment status and non-interference or non-retaliation statutes under any applicable state or local laws or ordinances.

 

3.              You agree never to institute any claim, suit or action at law or in equity against any Releasee in any way by reason of any claim you ever had or now have relating to the matters described in the two preceding paragraphs.

 

 

4.                                      The payments and benefits specified in the Resignation Letter shall be in lieu of any and all other amounts to which you might be, are now or may become entitled from the Company, its subsidiaries and affiliates and, without limiting the generality of the foregoing, you hereby expressly waive any right or claim that you may have or assert to payment for salary, bonus, incentive, severance or change-in-control payments or benefits or attorneys’ fees, whether under the Employment Agreement, KEIP Agreement or otherwise; provided, however, that, notwithstanding any other provision of this agreement, you do not waive any of your rights to, and the Company shall comply with its obligations with respect to, the Excluded Rights.

 

B.                                    The Company, on behalf of itself and its subsidiaries (collectively, the “Company Parties”), knowingly and voluntarily waives and releases forever whatever claims the Company Parties ever had, now have or hereafter may have against you based upon any matter, occurrence or event existing or occurring prior to the execution of this Release, including anything relating to (a) your employment or engagement for services with the Company Parties or to the termination of such employment or services, (b) your status as a director, shareholder or creditor of any of the Company Parties, (c) the KEIP Agreement and (d) the Employment Agreement; provided, however, that notwithstanding anything to the contrary herein, this waiver and release shall not release or affect, and the Company Parties do not hereby release, waive or discharge, any rights and claims under or with respect to:  (i) the Company’s rights to enforce the following provisions of your Employment Agreement:  Section 8 (Confidentiality), Section 9 (Patents and Other Intellectual Property), Section 10 (Non-Solicitation; Remedies); Section 11 (Administrator; Claims) and Section 14 (Indemnification); (ii) any and all claims, liabilities, losses and expenses arising from or relating to your fraud, embezzlement or other criminal violation, or other willful misconduct; or (iii) the Company’s rights under or with respect to this Release or the Resignation Agreement.

 

C.                                    In the event any payments made to you pursuant to the Resignation Agreement are recovered as an avoidable preference or fraudulent transfer, or otherwise under Chapter 5 of the Bankruptcy Code, you shall have the right to assert a claim under Section 502 of the Bankruptcy Code.  Further, at your election in your sole discretion within 90 days’ following any such recovery, by written notice to the Company, Attention: General Counsel, 3900 West Innovation Street, Sioux Falls, SD 57107 (with a copy to Weil, Gotshal & Manges LLP, Attention:  Gary Holtzer, 767 Fifth Avenue, New York, NY 10153), (i) the releases and other covenants provided by you under Section A above and the releases and other covenants provided by the Company under Section B above shall be rescinded, null and void in their entirety and (ii) you shall be obligated to promptly repay to the Company to the extent not previously repaid an amount equal to $1,214,936.13 plus any amounts paid in respect of enumerated paragraph (3) of the Resignation Agreement.  Without limiting the generality of the immediately preceding sentence, in the event of any such election, you shall have the right to assert not only your claim under Section 502 of the Bankruptcy Code, but also any and all claims that you may have against the Estate(s), including, without limitation, any claims arising from the Employment Agreement and the alleged representations or misrepresentations made to you by the Company in connection therewith.

 

D.                                    Miscellaneous.

 

1.              All provisions of this Release shall be governed by and construed in accordance with the laws of the State of Delaware exclusively and without reference to principles of conflicts of laws

 

2.              This Release does not constitute an admission of liability or wrongdoing of any kind by you or the Company.

 

 

3.              This Release may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same agreement.

 

IN WITNESS WHEREOF, the Company and you have knowingly and voluntarily decided to accept and agree to the foregoing by signing their names in the manner provided below.

 

	
Sincerely,
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
LODGENET INTERACTIVE CORPORATION
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ James G. Naro
    	
 
    
	
 
    	
Name:
    	
James G. Naro
    	
 
    
	
 
    	
Title:
    	
SVP, General Counsel
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
AGREED AND ACKNOWLEDGED:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
/s/ Richard L. Battista
    	
 
    
	
Richard L. Battista
    	
 
    
	
Date: January         ,   2013

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