EXHIBIT 1.1
EXECUTION COPY
______________________________________________________________________________
COMDISCO HOLDING COMPANY, INC.
and
MELLON INVESTOR SERVICES LLC
as Rights Agent
Rights Agent Agreement
Dated as of August 12, 2002
______________________________________________________________________________
TABLE OF CONTENTS
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Section 1. Certain Definitions.........................................................................1
Section 2. Appointment of Rights Agent.................................................................1
Section 3. Issuance of Right Certificates..............................................................1
Section 4. Rights Distributions........................................................................1
Section 5. Release of Rights Distributions from Disputed Claims Reserve................................1
Section 6. Calculation of Recovery Percentages and Amount of Rights Distribution.......................1
Section 7. Form of Right Certificates..................................................................1
Section 8. Countersignature and Registration...........................................................1
Section 9. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificates................................................1
Section 10. Cancellation and Destruction of Right Certificates..........................................1
Section 11. Status and Availability of Rights and New Common Shares.....................................1
Section 12. Common Shares Record Date...................................................................1
Section 13. Fractional Rights and Fractional Shares.....................................................1
Section 14. Agreement of Right Holders..................................................................1
Section 15. Concerning the Rights Agent.................................................................1
Section 16. Merger or Consolidation or Change of Name of Rights Agent...................................1
Section 17. Duties of Rights Agent......................................................................1
Section 18. Change of Rights Agent......................................................................1
Section 19. Notices.....................................................................................1
Section 20. Supplements and Amendments..................................................................1
Section 21. Successors..................................................................................1
Section 22. Benefits of this Agreement..................................................................1
Section 23. Plan and Rights Terms Exhibit...............................................................1
Section 24. Tax Reporting; Withholding..................................................................1
Section 25. Severability................................................................................1
Section 26. Governing Law...............................................................................1
Section 27. Counterparts................................................................................1
Section 28. Descriptive Headings........................................................................1
RIGHTS AGENT AGREEMENT
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Rights Agent Agreement, dated as of August 12, 2002, between Comdisco
Holding Company, Inc., a Delaware corporation (the "Company"), and Mellon
Investor Services LLC, a New Jersey limited liability company, as rights agent
(the "Rights Agent").
WHEREAS, on July 30, 2002, Comdisco, Inc., a wholly-owned subsidiary
of the Company ("Comdisco"), adopted, and the United States Bankruptcy Court
for the Northern District of Illinois, Eastern Division (the "Court")
approved, the First Amended Joint Plan of Reorganization of Comdisco, Inc. and
Its Affiliated Debtors, as amended and confirmed (the "Plan");
WHEREAS, pursuant to the Plan, the Company has authorized and will
issue to holders of (i) Allowed Class C-5A Interests and (ii) Allowed Class
C-5B Subordinated Claims freely transferable rights (the "Rights" and each, a
"Right") to receive certain distributions to be made by the Company of cash or
shares of Common Stock, $.01 par value, of the Company ("New Common Shares")
or a combination of cash and New Common Shares as set forth in the Plan (the
distributions to be made to the holders of the Rights hereunder to be referred
to as "Rights Distributions");
WHEREAS, pursuant to the Plan, as of the Effective Date, one Right
shall be issuable for each share of common stock constituting Old Equity and
cancelled pursuant to the Plan (the "Cancelled Common Stock") that was held by
each holder of Allowed Class C-5A Interests and each share of Cancelled Common
Stock that was held by, and the subject of a Claim by, each holder of Class
C-5B Subordinated Claims at the Close of Business on the Effective Date;
provided, however, that notwithstanding anything to the contrary herein, no
duplicate Rights will be issued in the event that any shares of Cancelled
Common Stock are the subject of both Allowed Class C-5A Interests and Class
C-5B Subordinated Claims;
WHEREAS, the administration and processing of the Rights
Distributions and other matters in connection with the Rights will involve
substantial administration;
WHEREAS, the Company desires that the Rights Agent act on behalf of
the Company, and the Rights Agent is willing to so act, in connection with the
Rights;
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. Capitalized terms used herein
and not otherwise defined shall have the same meaning as set forth in the
Plan. For purposes of this Agreement, the following terms have the meanings
indicated:
"Business Day" shall mean any day other than a Saturday, Sunday, or a
day on which banking institutions in the State of New York or the State of
Illinois are authorized or obligated by law or executive order to close.
"Class C-5A Interests" shall mean holders of Interests in Class C-5
as provided in the Plan.
"Class C-5B Subordinated Claims" shall mean holders of Subordinated
Claims in Class C-5 as provided in the Plan.
"Close of Business" on any given date shall mean 5:00 P.M., Chicago,
Illinois time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., Chicago, Illinois time, on the next
succeeding Business Day.
"Code" shall have the meaning set forth in Section 24(a) hereof.
"Company" shall have the meaning set forth in the introductory
paragraph hereof.
"Creditor Distribution Record Date" shall have the meaning set forth
in Section 4(c) hereof.
"Disputed Claims Reserve" shall have the meaning set forth in the Plan.
"Disputed Rights" shall have the meaning set forth in Section 3(a)(iii)
hereof.
"Distributions to Creditors' shall have the meaning set forth in
Exhibit A hereto.
"Effective Date" shall mean August 12, 2002.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Form W-8" shall have the meaning set forth in Section 24(a) hereof.
"Fractional Share Amount" shall have the meaning set forth in Section
13(b) hereof.
"New Common Shares" shall mean the shares of common stock, par value
$0.01 per share, of the Company issued on or after the Effective Date.
"Person" shall mean any individual, firm, corporation, partnership,
limited partnership, limited liability partnership, business trust, limited
liability company, unincorporated association or other entity, and shall
include any successor (by merger or otherwise) of such entity.
"Right" or "Rights" shall mean freely transferable rights to receive
Rights Distributions. Each Right shall entitle the holder thereof to receive a
pro rata share of the Rights Distributions as set forth in Exhibit C-2 to the
Plan.
"Rights Agent" shall (i) have the meaning set forth in the
introductory paragraph hereof, (ii) mean any successor or replacement to
Mellon Investor Services LLC as provided in Sections 16 and 18 hereof or (iii)
any additional Person appointed pursuant to Section 2 hereof.
"Right Certificate" shall mean a certificate evidencing a Right in
substantially the form of Exhibit B hereto.
"Rights Distributions" shall mean any distributions from the Company
of cash and/or New Common Shares (including distributions in respect of New
Common Shares) to which the holders of the Rights are entitled pursuant to the
terms of the Plan, including without limitation the Rights Terms Exhibit.
"Rights Distribution Record Date" shall mean the record date
established by the Company for a Rights Distribution to be made to the holders
of Rights established pursuant to Section 4(d) hereof.
"Rights Registry" shall have the meaning set forth in Section 8(b)
hereof.
"Rights Terms Exhibit" shall mean the Contingent Equity Distribution
Agreement set forth as Exhibit C-2 to the Plan and attached hereto as Exhibit A.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Treasury Regulations" shall have the meaning set forth in Section
24(a) hereof.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company in accordance with
the terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such co-Rights Agents
as it may deem necessary or desirable upon ten (10) days prior written notice
to the Rights Agent. The Rights Agent shall have no duty to supervise, and in
no event shall be liable for, the acts or omissions of any such co-Rights
Agent.
Section 3. Issuance of Right Certificates
(a) Right Certificates will be issued pursuant to Sections 7.9 and
9.6(b) of the Plan as follows:
(i) Each holder of record of Allowed Class C-5A Interests as
of the Close of Business on the Effective Date will
receive in accordance with the Plan a Right Certificate
evidencing one Right for each share of Cancelled Common
Stock represented by such Allowed Class C-5A Interest;
(ii) Each holder of record of Allowed Class C-5B Subordinated
Claims as of the Close of Business on the Effective Date
will receive in accordance with the Plan a Right
Certificate evidencing one Right for each share of
Cancelled Common Stock represented by such Allowed Class
C-5B Subordinated Claim; and
(iii) The Company will issue to the Disbursing Agent for, and
to be held in, the Disputed Claims Reserve, in respect
of each holder of record of Class C-5B Subordinated
Claims that are Disputed Claims as of the Close of
Business on the Effective Date, a Right Certificate
evidencing one Right for each share of Cancelled Common
Stock which was the subject of such holder's Class C-5B
Subordinated Claim ("Disputed Rights").
(b) Notwithstanding clause (a), if any such holder holds shares
of Cancelled Common Stock that provided the basis for both an Allowed Class
C-5A Interest and a Class C-5B Subordinated Claim, then no Rights shall be
issued in respect of such holder's Class C-5B Subordinated Claims except to
the extent the number of shares of Cancelled Common Stock relating to such
Class C-5B Subordinated Claims exceeds the number of shares of Cancelled
Common Stock represented by such holder's Allowed Class C-5A Interests.
(c) Rights Distributions in respect of Right Certificates issued
but not distributed pursuant to Section 9.6(b) of the Plan shall be held by
the Rights Agent. If the distribution to a holder of a Right Certificate
pursuant to Section 9.6(b) of the Plan occurs subsequent to any Rights
Distribution in respect thereof, upon the receipt of specific, written
instructions from the Company, the Rights Agent shall distribute all Rights
Distributions paid with respect to such Right Certificate to the registered
holder thereof.
(d) Disputed Rights shall be held in a Disputed Claims Reserve
subject to Article X of the Plan. In the event that any Class C-5B
Subordinated Claim becomes an Allowed Class C-5B Subordinated Claim in whole
or in part, the Disputed Rights (or portions thereof) issued in respect of
such Allowed Class C-5B Subordinated Claim shall no longer be Disputed Rights
and shall be distributed to the holder of such Allowed Class C-5B Subordinated
Claim in accordance with the Plan. In the event that any Class C-5B
Subordinated Claim is withdrawn or becomes a Disallowed Claim (in whole or in
part) pursuant to Article X of the Plan, the Disputed Rights issued in respect
of the Disallowed portion thereof shall be returned by the Disbursing Agent to
the Rights Agent and cancelled.
(e) On or prior to June 30, 2003, but in no event earlier than
June 15, 2003, the Rights Agent, upon the receipt of specific written
instructions from the Company (which the Company hereby agrees to provide) and
at the expense of the Company, shall provide to the holders of record of
Allowed Class C-5A Interests who have not yet surrendered to the Rights Agent
certificates representing their shares of Cancelled Common Stock (or an
affidavit of loss and indemnity satisfactory to the Rights Agent as specified
in Section 9.6(b) of the Plan) written notice that the failure to surrender
such certificates or to execute and deliver an affidavit of loss and indemnity
pursuant to Section 9.6(b) of the Plan prior to August 12, 2003 shall result
in the forfeiture of such holder's rights and interests in respect of such
Cancelled Common Stock, including the right to participate in any
distributions pursuant to the Plan. Such notice shall contain written
instructions regarding the proper delivery of such certificates or such
affidavit of loss and indemnity.
Section 4. Rights Distributions
(a) The Company (or the Disbursing Agent or other distribution
agent on the Company's behalf) shall distribute to the Rights Agent the Rights
Distributions to which the holders of the Rights are entitled pursuant to the
terms of the Plan, including without limitation the Rights Terms Exhibit,
which terms are expressly incorporated herein and made a part hereof. As set
forth in the Rights Terms Exhibit, holders of Rights will be entitled to
Rights Distributions from the Company in the form of distributions of cash or
New Common Shares or combination of cash and New Common Shares (as the Company
may elect in its sole discretion) in accordance with the terms and conditions
of the Rights Terms Exhibit and the Plan after certain Recovery Thresholds (as
defined in the Rights Terms Exhibit) are met.
(b) The Company hereby agrees to distribute, or to cause the
Disbursing Agent or other distribution agent on its behalf to distribute, the
full amount of any Rights Distributions constituting cash to be distributed to
the Rights Agent in accordance with the Plan and the Rights Terms Exhibit.
(c) The Company hereby agrees to distribute, or to cause the
Disbursing Agent or other distribution agent or transfer agent on its behalf
to distribute, the full amount of any Rights Distributions made in the form of
New Common Shares to the Rights Agent in accordance with the Plan and the
Rights Terms Exhibit, and on or prior to the record date (the "Creditor
Distribution Record Date") for the corresponding Distributions to Creditors
(as defined in the Rights Terms Exhibit), such that the holders of the Rights,
by virtue of their ownership of New Common Shares, will receive the Rights
Distribution in connection with the Distributions to Creditors to which the
Rights Distribution relates.
(d) Subject to the foregoing, the Company may establish a Rights
Distribution Record Date (with prompt notice thereof to the Rights Agent),
which shall be no more than thirty (30) days prior to any Rights Distribution
for purposes of determining the holders of Rights entitled to receive their
pro rata share of a Rights Distribution. When a Rights Distribution is
received by the Rights Agent, together with specific written instructions as
to such Rights Distribution from the Company, the Rights Agent shall promptly
distribute to the registered holders of the Right Certificates as of the
Rights Distribution Record Date, as applicable, the cash and/or certificates
of New Common Shares constituting such Rights Distribution, any such stock
certificates to be registered in such name or names as may be designated by
such holder.
(e) Rights Distributions in respect of Disputed Rights shall be
distributed to the Disbursing Agent and held in the Disputed Claims Reserve
until released in accordance with the Plan and the provisions hereof.
(f) Distributions paid with respect to New Common Shares issued
in a Rights Distribution will constitute a Rights Distribution under this
Agreement and payment of a Contingent Equity Distribution pursuant to the
Rights Terms Exhibit and the Plan.
Section 5. Release of Rights Distributions from Disputed Claims Reserve
(a) Upon distribution of a Rights Certificate to the holder of a
Disputed Claim that has become an Allowed Class C-5B Subordinated Claim
pursuant to Section 3(d) hereof, the Company (or the Disbursing Agent or other
distribution agent on the Company's behalf) shall distribute to the Rights
Agent, together with specific written instructions as to such distribution
from the Company, for distribution to such holder, that portion of any Rights
Distributions previously distributed pursuant to the Plan allocable to such
Allowed Class C-5B Subordinated Claim.
(b) That portion of any Rights Distribution distributed in
respect of and allocable to Disputed Rights (or portions thereof) that are
subsequently withdrawn or Disallowed shall be held in the Supplemental
Distribution Account, notwithstanding the cancellation of the Right
Certificates to which such distributions related. At such time as no Disputed
Rights remain in the Disputed Claim Reserve, any Rights Distributions
remaining in the Supplemental Distribution Account shall be distributed by the
Disbursing Agent to the Rights Agent. Upon the receipt of specific, written
instructions from the Company (which shall include pro rata allocation amounts
with respect to Rights), the Rights Agent shall promptly distribute such
Rights Distributions to the registered holders of Right Certificates pro rata
based on the number of Rights held by each such holder.
Section 6. Calculation of Recovery Percentages and Amount of
Rights Distribution. No later than 15 days prior to each Distribution Date,
the Company shall calculate the amount of the proposed Rights Distribution
payable to holders of Rights and the form (New Common Shares or cash, or a
combination of New Common Shares and cash) of such Rights Distribution, and
shall promptly notify the Rights Agent in writing of such amounts on an
aggregate and per Right basis.
Section 7. Form of Right Certificates. The Right Certificates
shall be substantially the same as Exhibit B hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate (but which do not affect
the rights, duties or obligations of the Rights Agent as set forth in this
Agreement) and as are not inconsistent with the provisions of this Agreement
or the Plan, or as may be required to comply with any applicable law or with
any rule or regulation made pursuant thereto, or to conform to usage. Subject
to the other provisions of this Agreement, the Right Certificates, whenever
issued or distributed, shall be dated as of the date of their issuance and on
their face shall entitle the holders thereof to receive such percentage of
Rights Distributions as shall be set forth therein.
Section 8. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of the
Company by its Chairman of the Board, its Chief Executive Officer, its
President, any of its Vice Presidents, or its Treasurer, either manually or by
facsimile signature, shall have affixed thereto the Company's seal or a
facsimile thereof, and shall be attested by the Secretary or any Assistant
Secretary of the Company, either manually or by facsimile signature. The Right
Certificates shall be countersigned by the Rights Agent and shall not be valid
for any purpose unless so countersigned, either manually or by facsimile. In
case any officer of the Company who shall have signed any of the Right
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights
Agent and issued and delivered by the Company with the same force and effect
as though the person who signed such Right Certificates had not ceased to be
such officer of the Company; and any Right Certificate may be signed on behalf
of the Company by any person who, at the actual date of the execution of such
Right Certificate, shall be a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this Rights Agent
Agreement any such person was not such an officer.
(b) Upon the receipt of written notice from the Company
that the initial distribution of Right Certificates pursuant to the Plan has
occurred, the Rights Agent will keep or cause to be kept, at its office
designated for such purposes, books for registration of the transfer of the
Right Certificates issued hereunder (the "Rights Registry"). Such Rights
Registry shall show the names and addresses of the respective holders of the
Right Certificates, the number of Rights evidenced on its face by each of the
Right Certificates and the date of each of the Right Certificates.
Section 9. Transfer, Split Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
(a) Subject to the provisions of this Agreement, any Right
Certificate or Right Certificates may be transferred, split up, combined or
exchanged for another Right Certificate or Right Certificates, entitling the
registered holder to receive a like percentage of Rights Distributions as the
Right Certificate or Right Certificates surrendered then entitled such holder
to receive. Any registered holder desiring to transfer, split up, combine or
exchange any Right Certificate or Right Certificates shall make such request
in writing delivered to the Rights Agent, and shall surrender the Right
Certificate or Right Certificates to be transferred, split up, combined or
exchanged at the office of the Rights Agent designated for such purposes;
provided, however, no Right Certificate may be split up in a manner that would
result in a fractional Right being issued. Thereupon the Rights Agent shall
countersign and deliver to the Person entitled thereto a Right Certificate or
Right Certificates, as the case may be, as so requested. The Company or the
Rights Agent may require payment of a sum sufficient for any tax or
governmental charge that may be imposed in connection with any transfer, split
up, combination or exchange of Right Certificates. The Rights Agent shall have
no duty or obligation to take any action under any Section of this Agreement
which requires the payment by a Rights holder of applicable taxes and/or
governmental charges unless and until it is satisfied that all such taxes or
applicable governmental charges have been paid.
(b) Subject to the provisions of this Agreement, upon receipt by
the Company and the Rights Agent of evidence reasonably satisfactory to them
of the loss, theft, destruction or mutilation of a Right Certificate, and, in
case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to them, and, at the Company's or the Rights Agent's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Company will make and deliver a new
Right Certificate of like tenor to the Rights Agent for delivery to the
registered holder in lieu of the Right Certificate so lost, stolen, destroyed
or mutilated.
Section 10. Cancellation and Destruction of Right Certificates.
All Right Certificates surrendered for the purpose of transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agent Agreement. The Company shall
deliver to the Rights Agent for cancellation and retirement, and the Rights
Agent shall so cancel and retire, any other Right Certificate purchased or
acquired by the Company. The Rights Agent shall deliver all canceled Right
Certificates to the Company, or shall, at the written request of the Company,
destroy such canceled Right Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
Section 11. Status and Availability of Rights and New Common Shares.
(a) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all New Common Shares delivered to
holders of Rights pursuant to this Agreement and the Plan shall, at the time
of delivery of the certificates for such shares, be duly and validly
authorized and issued and fully paid and non-assessable shares.
(b) The Company further covenants and agrees that it will pay
when due and payable any and all taxes and governmental charges which may be
payable in respect of the issuance or delivery of the Right Certificates or of
any New Common Shares. The Company shall not, however, be required to pay any
tax or charge which may be payable in respect of any transfer or delivery of
Right Certificates to a Person other than, or the issuance or delivery of
certificates for the New Common Shares in a name other than that of, the
registered holder of the Right Certificate evidencing Rights or to issue or to
deliver any certificates for New Common Shares until any such tax or charge
shall have been paid (any such tax or charge being payable by the holder of
such Right Certificate at the time of surrender) or until it has been
established to the Company's reasonable satisfaction that no such tax or
charge is due.
(c) The Company further covenants and agrees to use reasonable
best efforts to register the Rights and the New Common Shares under either
Section 12(b) or Section 12(g) of the Exchange Act and to file timely with the
Securities and Exchange Commission all reports required to be filed thereunder
so long as any Right Certificates are outstanding. The Company will include
information regarding the Present Value of Distributions to Creditors in its
annual and quarterly reports filed pursuant to the Exchange Act.
Section 12. New Common Shares Record Date. Each Person in whose
name any certificate for New Common Shares is issued in respect of the Rights
shall for all purposes be deemed to have become the holder of record of the
New Common Shares represented thereby on, and such certificate shall be dated,
the date of issuance thereof, which date shall be no later than the applicable
Creditor Distribution Record Date.
Section 13. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights or to distribute Right Certificates which evidence fractional Rights.
The Company shall be entitled to round to the nearest whole number (up or
down) the number of Rights to be issued to each record holder of Cancelled
Common Stock that constitutes an Allowed Class C-5A Interest and each record
holder of an Allowed Class C-5B Subordinated Claim, provided that a Right of
0.5 (one half) be rounded down to the next lowest number.
(b) The Company shall not be required to issue fractions of New
Common Shares or to distribute Common Share Certificates which evidence
fractional New Common Shares. The Company shall be entitled to round down to
the nearest whole number the number of New Common Shares to be issued to each
holder of Rights in respect of Rights Distributions. The Company, at its
option, shall either (i) instruct the Disbursing Agent in writing to sell at
market a number of New Common Shares up to that portion of any Rights
Distribution that would otherwise be payable in fractions of New Common Shares
(the "Fractional Share Amount") and to distribute cash to the Rights Agent for
distribution to holders of Rights in respect thereof pursuant to Section 4(d)
hereof or (ii) if selling such New Common Shares at market is not practical or
would adversely affect the price obtained therefor, distribute, in accordance
with Section 4(b) hereof, cash to the Rights Agent for distribution to holders
of Rights pursuant to Section 4(d) hereof in respect of the Fractional Share
Amount, based on the average closing price of the New Common Shares during the
twenty (20) trading days immediately preceding the applicable Rights
Distribution Record Date.
(c) The holder of a Right by the acceptance of the Right
expressly waives any right to receive fractional Rights or fractional New
Common Shares in respect of the Rights Distributions.
(d) Whenever a payment for fractional Rights or fractional
shares is to be made by the Rights Agent, the Company shall (i) promptly
prepare and deliver to the Rights Agent a certificate setting forth in
reasonable detail the facts related to such payments and the prices and/or
formulas utilized in calculating such payments, and (ii) provide sufficient
monies to the Rights Agent in the form of fully collected funds to make such
payments. The Rights Agent shall be fully protected in relying upon such a
certificate and shall have no duty with respect to, and shall not be deemed to
have knowledge of any payment for fractional Rights or fractional shares under
any Section of this Agreement relating to the payment of fractional Rights or
fractional shares unless and until the Rights Agent shall have received such a
certificate and sufficient monies.
Section 14. Agreement of Right Holders. Every holder of a Right,
by accepting the same, consents and agrees with the Company and the Rights
Agent and with every other holder of a Right that:
(a) the Right Certificates are subject to the terms, provisions
and conditions of the Plan, including the Rights Terms Exhibit;
(b) the Right Certificates are transferable only in the Rights
Registry maintained by the Rights Agent if surrendered at the principal office
of the Rights Agent, duly endorsed or accompanied by a proper instrument of
transfer with a completed form of certification;
(c) the Company and the Rights Agent may deem and treat the
Person in whose name the Right Certificate is registered in the Rights
Registry as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Right
Certificates made by anyone other than the Company or the Rights Agent) for
all purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any
holder of a Right or other Person as a result of its inability to perform any
of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other injunction, order, judgment, decree or ruling
issued by a court of competent jurisdiction or by a governmental, regulatory
or administrative agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority
prohibiting or otherwise restraining performance of such obligation; provided,
however, the Company agrees to use its best efforts to have any such
injunction, order, judgment, decree or ruling lifted or otherwise overturned
as soon as possible.
Section 15. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the preparation, administration, delivery,
execution and amendment of this Agreement and the exercise and performance of
its duties hereunder. The Company also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability, damage, judgment,
fine, penalty, claim, demand, settlement, cost or expense (including, without
limitation, the reasonable fees and expenses of legal counsel), incurred
without gross negligence, bad faith or willful misconduct on the part of the
Rights Agent (which gross negligence, bad faith or willful misconduct must be
determined by a final, non-appealable order, judgment, decree or ruling of a
court of competent jurisdiction), for any action taken, suffered or omitted by
the Rights Agent in connection with the acceptance, exercise, performance or
administration of its duties under this Agreement. The costs and expenses
incurred by the Rights Agent in enforcing this right of indemnification shall
be paid by the Company. The provisions of this Section 15 and Section 17 below
shall survive the termination of this Agreement, the exercise or expiration of
the Rights and the resignation or removal of the Rights Agent.
(b) The Rights Agent shall be authorized and protected and shall
incur no liability for or in respect of any action taken, suffered or omitted
by it in connection with its administration of this Agreement or the exercise
or performance of its duties hereunder, in reliance upon any Right Certificate
or certificate for New Common Shares or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, instruction of the Company, direction, consent,
certificate, statement, or other paper or document believed by it in the
absence of bad faith to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper Person or Persons or
otherwise upon the advice of counsel as set forth in Section 17 hereof. The
Rights Agent shall not be deemed to have knowledge of any event of which it
was supposed to receive notice or instruction thereof hereunder, and the
Rights Agent shall be fully protected and shall incur no liability for failing
to take any action in connection therewith unless and until it has received
such notice or instruction.
Section 16. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any Person into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any Person
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any Person succeeding to the
business of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties
hereto, provided that such Person would be eligible for appointment as a
successor Rights Agent under the provisions of Section 18 hereof. In case at
the time such successor Rights Agent shall succeed to the agency created by
this Agreement, any of the Right Certificates shall have been countersigned
but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent; and in all such
cases such Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates so
countersigned; and in case at that time any of the Right Certificates shall
not have been countersigned, the Rights Agent may countersign such Right
Certificates either in its prior name or in its changed name; and in all such
cases such Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
Section 17. Duties of Rights Agent. The Rights Agent undertakes
to perform only the duties and obligations expressly set forth in this
Agreement and no implied duties or obligations shall be read into this
Agreement against the Rights Agent. The Rights Agent shall perform those
duties and obligations upon the following terms and conditions, by all of
which the Company and the holders of Right Certificates, by their acceptance
thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company, or may be an employee of the Rights Agent), and
the advice or opinion of such counsel shall be full and complete authorization
and protection to the Rights Agent and the Rights Agent shall incur no
liability for or in receipt of any action taken, suffered or omitted by it in
the absence of bad faith in accordance with such advice or opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact
or matter be proved or established by the Company prior to taking, omitting or
suffering any action hereunder, such fact or matter (unless other evidence in
respect thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by any one of the
Chairman of the Board, the President, a Vice President, the Treasurer or the
Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full and complete authorization and protection to the
Rights Agent and the Rights Agent shall incur no liability for or in respect
of any action taken, omitted or suffered by it in the absence of bad faith
under the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company
and any other Person only for its own gross negligence, bad faith or willful
misconduct (which gross negligence, bad faith or willful misconduct must be
determined by a final, non-appealable order, judgment, decree or ruling of a
court of competent jurisdiction). Anything to the contrary notwithstanding, in
no event shall the Rights Agent be liable for special, punitive, indirect,
consequential or incidental loss or damage of any kind whatsoever (including,
but not limited to, lost profits), even if the Rights Agent has been advised
of the likelihood of such loss or damage. [Any and all liability of the Rights
Agent under this Agreement will be limited to $50,000.
(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except as to its countersignature thereof) or be required
to verify the same, but all such statements and recitals are and shall be
deemed to have been made by the Company only.
(e) The Rights Agent shall not have any liability for or be
under any responsibility in respect of the validity of this Agreement or the
execution and delivery hereof (except the due execution hereof by the Rights
Agent) or in respect of the validity or execution of any Right Certificate
(except its countersignature thereof); nor shall it be responsible for any
breach by the Company of any covenant or condition contained in this Agreement
or in any Right Certificate; nor shall it by any act hereunder be deemed to
make any representation or warranty as to the authorization or reservation of
any New Common Shares to be issued pursuant to this Agreement or any Right
Certificate or as to whether any New Common Shares will, when so issued, be
validly authorized and issued, fully paid and nonassessable; nor shall it be
responsible for any change in the exercisability of the Rights (including the
Rights becoming null and void hereunder).
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged end
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing
by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the President, a Vice President, the
Secretary or the Treasurer of the Company, and to apply to such officers for
advice or instructions in connection with its duties, and such instructions
shall be full authorization and protection to the Rights Agent, and the Rights
Agent shall not be liable for any action taken, omitted or suffered to be
taken by it in the absence of bad faith in accordance with instructions of any
such officer.
(h) The Rights Agent and any stockholder, affiliate, director,
officer or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily interested in
any transaction in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and freely as though it
were not Rights Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or for any
other legal entity.
(i) The Rights Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder either itself
(through its directors, officers and employees) or by or through its attorneys
or agents.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the exercise
of its rights if it believes that repayment of such funds or adequate
indemnification against such risk or liability is not reasonably assured to
it.
(k) A copy of this Agreement shall be available at all
reasonable times for inspection by any registered Right holder at the
principal office of the Company.
(l) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of the Rights or this Agreement in reliance
upon an order, finding, instruction or other directive of the Bankruptcy
Court, and shall act in accordance with any such order, finding, instruction
or other directive.
Section 18. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty (30) days' notice in writing mailed to the Company and to each
transfer agent of the New Common Shares by registered or certified mail, and
to the holders of the Right Certificates as set forth in the Rights Registry
by first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon thirty (30) days' notice in writing, mailed to the Rights
Agent or successor Rights Agent, as the case may be, and to each transfer
agent of the New Common Shares by registered or certified mail. If the Rights
Agent shall resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of thirty (30)
days after giving notice of such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Right Certificate (who shall, with such
notice, submit his Right Certificate for inspection by the Company), then the
registered holder of any Right Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Company or by such a court, shall be a
corporation organized and doing business under the laws of the United States
or of any state of the United States, in good standing, having an office in
the United States which is authorized under the laws of the applicable
jurisdiction to exercise corporate trust powers and is subject to supervision
or examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least $100
million. After appointment, the successor Rights Agent shall be vested with
the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver
any further assurance, conveyance, act or deed necessary for the purpose. Not
later than the effective date of any such appointment the Company shall file
notice thereof in writing with the predecessor Rights Agent and each transfer
agent of the New Common Shares, and publish a notice thereof in the Wall
Street Journal. Failure to give any notice provided for in this Section 18,
however, or any defect therein, shall not affect the legality or validity of
the resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.
Section 19. Notices. Notices or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the Company shall be sufficiently given or made if sent
by facsimile or first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Rights Agent) as follows:
Comdisco Holding Company, Inc.
6111 North River Road
Rosemont, Illinois 60018-5159
Attention: Controller
Facsimile: (847) 518-5440
with a copy to:
Comdisco Holding Company, Inc.
6111 North River Road
Rosemont, Illinois 60018-5159
Attention: General Counsel
Facsimile: (847) 518-5478
with a copy to:
Skadden, Arps, Slate, Meagher & Flom (llinois)
333 West Wacker Drive
Chicago, IL 60606
Attention: L. Byron Vance III
Facsimile: (312) 407-0411
Any notice or demand authorized by this Agreement to be given or made by the
Company or by the holder of any Right Certificate to or on the Rights Agent
shall be sufficiently given or made if sent by facsimile or first-class mail,
postage prepaid, addressed (until another address is filed in writing with the
Company) as follows:
Mellon Investor Services, LLC
150 N. Wacker Drive - Suite 2120
Chicago, Il 60606
Attention: Relationship Manager
Facsimile: (312) 704-7112
with a copy to:
Mellon Investor Services LLC
85 Challenger Road
Ridgefield Park, NJ 07660-2108
Attention: General Counsel
Facsimile: (201) 296-4004
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the Rights
Registry.
Section 20. Supplements and Amendments. Except as provided in the
last sentence of this Section 20, for so long as the Rights are outstanding,
the Company may, and the Rights Agent shall, if the Company so directs in
writing, supplement or amend this Agreement without the approval of any
holders of Rights, provided that no such supplement or amendment may (a)
adversely affect the interests of the holders of Rights as such, (b) cause
this Agreement again to become amendable other than in accordance with this
sentence or (c) change or increase the Rights Agent's rights, duties,
liabilities or obligations. Upon the delivery of a certificate from an
appropriate officer of the Company which states that the supplement or
amendment is in compliance with the terms of this Section 20, the Rights Agent
shall execute such supplement or amendment, provided that any supplement or
amendment that does not change or increase the Rights Agent's rights, duties,
liabilities or obligations shall become effective immediately upon execution
by the Company, whether or not also executed by the Rights Agent.
Section 21. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 22. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Right Certificates 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 Rights Agent
and the registered holders of the Right Certificates.
Section 23. Plan and Rights Terms Exhibit. This Agreement is entered
into pursuant to the Plan and the Rights Terms Exhibit. Should any provision
of this Agreement be inconsistent with a provision of the Plan or the Rights
Terms Exhibit, the terms and conditions of the Plan or the Rights Terms
Exhibit, as applicable, shall control; provided, however, that (i) in the
event of an inconsistency between the Plan and the Rights Terms Exhibit with
respect to a provision of this Agreement, the Rights Terms Exhibit shall
control, and (ii) nothing in this Section 23 shall impact provisions of this
Agreement that supplement provisions of the Plan or the Rights Terms Exhibit
but are not inconsistent therewith.
Section 24. Tax Reporting; Withholding.
(a) On or before January 31st of the year following each year in
which a holder of a Right or Rights receives any Rights Distribution
hereunder, the Rights Agent shall prepare and mail to each such holder, unless
such holder has provided the Rights Agent with a valid, properly completed
Internal Revenue Service Form W-8BEN, W-8ECI, W-8EXP or W-8IMY (each, a "Form
W-8"), as applicable, in accordance with United States Treasury Regulations
(the "Treasury Regulations") promulgated under the Internal Revenue Code of
1986, as amended (the "Code"), an appropriate Form 1099 reporting the
distribution(s) as of the year of payment, in accordance with the Code and the
Treasury Regulations. The Rights Agent shall also prepare and file copies of
such Forms 1099 by magnetic tape with the Internal Revenue Service on or
before February 28th of the year following the distribution(s), in accordance
with the Code and the Treasury Regulations.
(b) If the Rights Agent has not received a valid, properly
completed Internal Revenue Service Form W-9 (or substitute Form W-9) or a
valid, properly completed Form W-8 as applicable, from a holder of a Right or
Rights prior to making any payment or distribution to such holder hereunder,
the Rights Agent shall deduct and withhold the appropriate withholding tax
from any payment made to such holder pursuant to the Code and the Treasury
Regulations, and shall timely remit any amount withheld to the Internal
Revenue Service or other appropriate governmental authority or authorized
financial institution in accordance with the Code and the Treasury
Regulations.
(c) Should any issue arise regarding federal income tax
reporting or withholding, the Rights Agent shall be entitled, in its sole
discretion, to refrain from taking any action, and shall be fully protected
and shall not be liable in any way to the Company or any other Person or
entity for refraining from taking such action, unless the Rights Agent
receives written instructions signed by the Company which eliminate such issue
to the reasonable satisfaction of the Rights Agent. Such action may be subject
to additional fees.
Section 25. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated.
Section 26. Governing Law. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Delaware and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State; provided, however, that all provisions
regarding the rights, duties and obligations of the Rights Agent shall be
governed by and construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed entirely within such State.
Section 27. Counterparts. This Agreement may be executed in any
number of counterparts and each of 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.
Section 28. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Rights Agent
Agreement to be duly executed and their respective corporate seals to be
hereunder affixed and attested, all as of the day and year first above
written.
Attest: [SEAL] COMDISCO HOLDING COMPANY, INC.
/s/ Gina M. Andreotti /s/ Ronald C. Mishler
_______________________ By: _______________________________
Name: Ronald C. Mishler
Title: Chief Executive Officer
Attest: MELLON INVESTOR SERVICES LLC
/s/ Ana M. Garcia /s/ Editha Paras
_______________________ By: _______________________________
Name: Editha Paras
Title: Vice President
Exhibit A
---------
Comdisco Contingent Equity Distribution Agreement
Exhibit C-2 to Plan
Definitions.
- ------------
COMPANY means Reorganized Comdisco.
CREDITOR SECURITIES means Creditor Shares, PIK Notes and Senior Notes,
including any notes or securities issued by the Company with respect thereto
pursuant to the accrual of interest or any stock split, stock dividend,
recapitalization or similar transaction.
CREDITOR SHARES means New Common Shares issued to holders of Allowed Claims in
Class C-4 pursuant to Section 5.1(d)(v) of the Plan and any securities of the
Company issued with respect thereto pursuant to a stock split, stock dividend,
recapitalization or similar transaction.
DISTRIBUTIONS TO CREDITORS means, at any time, the sum of any and all cash or
other property (other than Creditor Securities) distributed to holders of
Allowed Claims in Class C-4 in respect of such Allowed Claims, including
without limitation (i) the Net Available Comdisco Cash actually distributed to
holders of Allowed Claims in Class C-4 pursuant to Section 5.1(d)(i) of the
Plan, (ii) cash payments of principal, interest and premiums actually made in
respect of the New Senior Notes and the New PIK Notes issued to holders of
Allowed Claims in Class C-4, (iii) distributions of cash actually made to
holders of Allowed Claims in Class C-4 from the proceeds of Trust Assets, (iv)
distributions of cash or property in kind (other than Creditor Securities)
actually made in respect of Creditor Securities, (specifically excluding
therefrom any distributions made in respect of New Common Shares issued to
holders of Claims or Interests in Class C-5A, C-5B, or to any other person or
entity, including any securities issued by the Company or its subsidiary
Affiliates with respect thereto pursuant to a stock split, stock dividend,
recapitalization or similar transaction), plus (v) if, but only if, a
Liquidity Event has occurred, the value of the consideration received or, if
applicable, receivable by (or deemed to be received or receivable by), the
holders of Creditor Shares in exchange for such Creditor Shares. No party to a
Liquidity Event may assume any obligations to make, or otherwise make,
payments under a Creditor Security that is not a Creditor Share (e.g. the New
Senior Notes and the New PIK Notes) without also assuming obligations to make
ongoing distributions under the Rights as if such successor was a party to the
Plan. For the avoidance of doubt, any amounts held in the Disputed Claims
Reserve shall not constitute a Distribution to Creditors unless and until
distributed to the holder of an Allowed Claim.
In calculating the nominal value of distributions of property in kind received
in respect of Creditor Securities, the same nominal value as is used by the
Company for purposes of calculating the returns and upside sharing under the
Management Incentive Plan, as determined by the Board of Directors of the
Company, shall be used and shall be conclusive of the value of such
distributions. In calculating the value of Creditor Shares in respect of a
Liquidity Event, such Creditor Shares shall be given the value ascribed to
them in connection with a merger or sale of the Company, or if no merger or
sale is occurring, shall be given a value equal to the average closing price
of the Creditor Shares during the twenty (20) trading days immediately
preceding the occurrence of such Liquidity Event.
PRESENT VALUE OF DISTRIBUTIONS TO CREDITORS means, at any time, the present
value of Distributions to Creditors discounted on a per annum basis from the
date such distribution was made to the Effective Date using the per annum
discount rate set forth in the footnotes on the last page of Appendix E to the
Disclosure Statement with respect to the Plan and applicable to the sources of
cash or other property comprising each distribution, except that the value of
Creditor Shares that are includable in the case of a Liquidity Event as a
Distribution to Creditors pursuant to clause (v) of the definition of
Distributions to Creditors shall be discounted from the date the Liquidity
Event occurs to the Effective Date at a per annum discount rate equal to
11.92%. In calculating the Present Value of Distributions to Creditors, the
same categories of sources of distributed cash or property shall be used as
are used in calculating the present value of returns and upside sharing under
the Management Incentive Plan.
Capitalized terms otherwise used herein shall have the meaning given them in
the First Amended Joint Plan of Reorganization of Comdisco, Inc. and Its
Affiliated Debtors, as amended and confirmed (the "Plan").
1. RIGHTS. At the Effective Date, the Company shall distribute to holders of
Allowed Comdisco Interests in Class C-5A and holders of Allowed Subordinated
Claims in Class C-5B, in accordance with the Plan, freely transferable rights
(the "Rights"). The Rights will require the Company, after the Present Value
of Distributions to Creditors equals or exceeds 85% of the amount of Allowed
Claims in Class C-4, at the election of the Company to either (a) issue to the
holders of Rights the appropriate percentage of New Common Shares or (b) pay
to the holders of Rights the applicable amounts of cash, or any combination of
(a) and (b), based upon the then-existing Present Value of Distributions to
Creditors in accordance with the table below; provided, however, that the
Company will be required only to issue New Common Shares pursuant to clause
(a) above and not have the right to elect to distribute cash if such election
to distribute cash would preclude the tradeability of the Rights (as
contemplated by Section 4 below of this Exhibit C-2). At the time
Distributions to Creditors reach a "Recovery Threshold" set forth below, the
Company shall elect (subject to the foregoing caveat regarding tradeability)
the form of consideration to be issued to holders of Rights (New Common Shares
or distributions of cash, or a specified combination of the two), which
election shall apply to the form of consideration to be issued to holders of
Rights until the next higher Recovery Threshold is reached, at which time the
Company may make a new election applicable to the form of future consideration
to be issued to holders of Rights until the next Recovery Threshold is reached.
o After the Present Value of Distributions to Creditors equals or
exceeds 85% of the amount of Allowed Claims in Class C-4 (the "85%
Recovery Threshold"), the holders of Rights shall be entitled to
receive, at the Company's election, either New Common Shares
aggregating 3% of the total number of Creditor Shares then issued and
outstanding (including any shares held in the Disputed Claims
Reserve), or cash equal to 3% of all amounts constituting
Distributions to Creditors in excess of such 85% Recovery Threshold,
when and as such Distributions to Creditors are made, or in the case
of a Liquidity Event, when such Liquidity Event occurs; or any such
combination of New Common Shares and cash distributions.
o After the Present Value of Distributions to Creditors equals or
exceeds 91% of the amount of Allowed Claims in Class C-4 (the "91%
Recovery Threshold"), the holders of Rights shall be entitled to
receive, at the Company's election, either New Common Shares
aggregating 9% (i.e., an additional 6%) of the total number of
Creditor Shares issued and outstanding (including any shares held in
the Disputed Claims Reserve), or cash equal to 9% of all
Distributions to Creditors in excess of such 91% Recovery Threshold,
when and as such Distributions to Creditors are made, or in the case
of a Liquidity Event, when such Liquidity Event occurs; or any such
combination of New Common Shares and cash distributions.
o After the Present Value of Distributions to Creditors equals or
exceeds 95% of the amount of Allowed Claims in Class C-4 (the 95%
Recovery Threshold"), the holders of Rights shall be entitled to
receive, at the Company's election, either New Common Shares
aggregating 21% (i.e., an additional 12%) of the total number of
Creditor Shares issued and outstanding (including any shares held in
the Disputed Claims Reserve), or cash equal to 21% of all
Distributions to Creditors in excess of such 95% Recovery Threshold,
when and as such Distributions to Creditors are made, or in the case
of a Liquidity Event, when such Liquidity Event occurs; or any such
combination of New Common Shares and cash distributions.
o After the Present Value of Distributions to Creditors equals or
exceeds 100% of the amount of Allowed Claims in Class C-4 (the "100%
Recovery Threshold"), the holders of Rights shall be entitled to
receive, at the Company's election, either New Common Shares
aggregating 37% (i.e., an additional 16%) of the total number of
Creditor Shares issued and outstanding (including any shares held in
the Disputed Claims Reserve), or cash equal to 37% of all
Distributions to Creditors in excess of such 100% Recovery, when and
as such Distributions to Creditors are made, or in the case of a
Liquidity Event, when such Liquidity Event occurs; or any such
combination of New Common Shares and cash distributions.
In consideration for the Rights, the holders of Rights agree to be bound and
limited by the purposes of the Company as set forth in the Certificate of
Incorporation and By-laws. Regardless of the form of the Right, prior to the
issuance of New Common Shares to the holders of Rights, a Rights holder shall
have no rights as a stockholder. Except to assert in the Bankruptcy Court (or,
if the Bankruptcy Court no longer has jurisdiction, in any court of competent
jurisdiction) (i) enforcement of their rights under the Plan or (ii) claims
based upon fraud or other willful misconduct, the holders of Rights shall have
no right or standing to, and agree not to, institute suit or make any claim
against the Company or its directors or officers arising out of the Rights or
the related Plan provisions (a) so long as any New Senior Notes or any New PIK
Notes are outstanding, without the written consent of the holders of at least
two-thirds in amount and one-half in number of the outstanding New Senior
Notes and New PIK Notes, and (b) after the New Senior Notes and the New PIK
Notes have been fully paid and discharged, without the consent of the holders
of two-thirds of the New Common Shares. The consent of a majority in amount of
each of the New Senior Notes and the New PIK Notes, and a majority of the
issued and outstanding New Common Shares, as applicable, shall be required to
conduct such a vote. The holders of Rights hereby acknowledge and agree that
holders of New Senior Notes, New PIK Notes, and New Common Shares shall have
and owe no duties whatsoever, whether under the Plan, in contract, by statute,
by case law, in equity or otherwise, to the holders of Rights to cause any
vote to be taken or to consent to the institution or making of any claim or
lawsuit and may act solely in their own self-interest with respect to all such
matters. Nothing herein shall be construed to give a holder of Rights any
right or standing that a Rights holder does not otherwise have under
applicable law to assert claims based upon fraud or other willful misconduct,
and nothing herein shall constitute an agreement or admission that a holder of
Rights has standing or is entitled to assert such claims under applicable law.
2. LIQUIDITY EVENTS. Liquidity Events shall consist of:
(i) consummation of a merger;
(ii) closing of the sale of more than 80% of the issued
and outstanding New Common Shares of the Company in
a transaction or series of related transactions to
a person or a group of persons acting in concert
through tender offer or otherwise; or
(iii) provided that the New Senior Notes and the New PIK
Notes have been fully paid and discharged, if, but
only if, the Company's shareholders rescind the
first two sentences of Clause THIRD of the
Certification of Incorporation(*), at any time for a
period of twenty (20) consecutive trading days
thereafter the Present Value of Distributions to
Creditors, based upon the mean average closing
price of the Creditor Shares during each of such
twenty (20) trading days, equals or exceeds the 85%
Recovery Threshold.
____________________
(*) THIRD: The business purpose of the Corporation is to sell, collect or
otherwise reduce to money the assets of the Corporation in the ordinary course
in an orderly manner, pay and discharge the Corporation's liabilities and
distribute any excess to the Corporation's shareholders in the form of
dividends or other distributions. The Corporation shall not be permitted to
engage in any activities inconsistent with the foregoing purpose. The
Corporation may engage in any lawful transaction of any or all lawful purposes
for which corporations may be incorporated under the General Corporation Law
of the State of Delaware as set forth in Title 8 of the Delaware Code (the
"GCL") to accomplish that business purpose.
3. EARLY LIQUIDATION. Upon the occurrence prior to one year after the
Effective Date of (i) a Liquidity Event under clauses (i) or (ii) of Section 2
above of this Exhibit C-2, or (ii) consummation of the sale of all or
substantially all of the assets of the Company in a single transaction or a
series of related transactions, in either case that results in a Present Value
of Distributions to Creditors that equals or exceeds the 85% Recovery
Threshold, the Rights holders in the aggregate shall receive a minimum
distribution in cash of Three Million Dollars ($3,000,000).
4. NASDAQ OTC TRADING. The Company will use reasonable efforts to have the New
Common Shares tradeable on the NASDAQ OTC quotation service (or BBX quotation
service when that comes into effect), and to maintain such trading status. The
Company will include information regarding the Present Value of Distributions
to Creditors in its annual and quarterly reports filed with the Securities and
Exchange Commission.
Exhibit B
---------
Form of Right Certificate
THIS RIGHT CERTIFICATE IS SUBJECT TO ALL OF THE TERMS, PROVISIONS AND
CONDITIONS OF A RIGHTS AGENT AGREEMENT, DATED AUGUST 12, 2002, AND THE
FIRST AMENDED JOINT PLAN OF REORGANIZATION OF COMDISCO, INC.,
AND ITS AFFILIATED DEBTORS, COPIES OF WHICH ARE AVAILABLE UPON
WRITTEN REQUEST TO THE COMPANY'S EXECUTIVE OFFICES AT
6111 NORTH RIVER ROAD, ROSEMONT, ILLINOIS 60018-5159.
Certificate No. R-_____ ______ Rights
CUSIP No. 200334 11 8
Contingent Distribution Right Certificate
COMDISCO HOLDING COMPANY, INC.
This certifies that _________________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions
of the Rights Agent Agreement, dated as of August 12, 2002 (the "Rights
Agent Agreement"), between Comdisco Holding Company, Inc., a Delaware
corporation (the "Company"), and Mellon Investor Services LLC (the "Rights
Agent"), to receive certain Rights Distributions from the Company, as
provided in the Rights Agent Agreement.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agent Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agent Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the holders of the
Right Certificates. Copies of the Rights Agent Agreement are on file at the
principal executive offices of the Company and the offices of the Rights
Agent. The Company will mail to the holder of this Right Certificate a copy of
the Rights Agent Agreement without charge after receipt of a written request
therefor.
This Right Certificate, with or without other Right Certificates,
upon surrender at the principal office of the Rights Agent, may be exchanged
for another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder receive a like portion of the Rights
Distributions as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to receive.
No fractional New Common Shares will be issued in respect of any
Right or Rights evidenced hereby, but in lieu thereof a cash payment will be
made, as provided in the Rights Agent Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as __________ of , _____.
Attest: COMDISCO HOLDING COMPANY, INC.
_______________________ By:___________________________
[Title] [Title]
Countersigned:
Mellon Investor Services LLC, as Rights Agent
By: ______________________________
Authorized Signature
Form of Reverse Side of Contingent Distribution Right Certificate
FORM OF ASSIGNMENT
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(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED _____________________________ hereby sells,
assigns and transfers unto ____________________________________________________
_______________________________________________________________________________
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ____ , Attorney, to
transfer the within Right Certificate on the books of the within-named
Company, with full power of substitution.
Dated: _______________, ____
______________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by an eligible guarantor institution (a
bank, stockbroker, savings and loan association or credit union with
membership in an approved signature guarantee medallion program) pursuant to
Rule 17Ad-15 of the Securities Exchange Act of 1934.
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NOTICE
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The signature in the foregoing Form of Assignment must conform to the
name as written upon the face of this Right Certificate in every particular,
without alteration or enlargement or any change whatsoever.