more ,CVR holders may not receive any payment on the CVRs.
The right to receive any future payment on the CVRs will be contingent upon our and our consolidated subsidiaries’ achievement of cumulative Adjusted EBITDA (calculated in accordance with the CVR indenture) in excess of the threshold specified in the CVR indenture, which equals $1.267 billion for the three years ending December 31, 2010. If our cumulative Adjusted EBITDA does not exceed this threshold for any reason, no payment will be made under the CVRs and the CVRs will expire valueless. Our and our consolidated subsidiaries’ Adjusted EBITDA for the cumulative period beginning January 1, 2008 and ending December 31, 2009 was $663.6 million. Accordingly, the value, if any, of the CVRs is speculative, and the CVRs may ultimately have no value. See Note 4 to the consolidated financial statements— Contingent Value Rights (CVR).
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It may be difficult to determine the amount of cash to be received under the CVRs until 2011 which makes it difficult to value the CVRs.
If any payment is made on the CVRs, it will not be made until June 2011 (except in certain cases of foreclosure of the APP shares pledged as security for our indebtedness), and the amount of any payment will not be determined prior to the second quarter of 2011. We will provide an interim statement of Adjusted EBITDA for each of 2008 and 2009, and a final statement of Adjusted EBITDA following the end of 2010. The final calculation of any CVR payment, however, will be provided to CVR holders as of December 31, 2010, no earlier than the second quarter of 2011. Because the amount of any payment on the CVRs will not be determined prior to the second quarter of 2011 and the CVR payment will be determined on the basis of cumulative Adjusted EBITDA for a three-year period, it may be difficult to value the CVRs, and accordingly it may be difficult or impossible for CVR holders to resell their CVRs.
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The CVRs are unsecured obligations of FKP Holdings and the CVR payments, acceleration payments, all other obligations under the CVR indenture and the CVRs and any rights or claims relating thereto are subordinated in right of payment to the prior payment in full of all of our senior obligations. Our senior obligations include all principal, interest, penalties, fees, indemnification, reimbursements, damages and other liabilities payable under, or with respect to, our and APP’s senior credit facilities and, so long as the senior obligations are outstanding pursuant to the preceding clause, intercompany loans and other senior debt. As a result of the financing arrangements entered into in connection with the Merger, as of December 31, 2008, there was approximately $3.9 billion outstanding under credit facilities of Fresenius and its subsidiaries that would be senior to the obligations under the CVRs. Substantially all of this indebtedness would be considered senior obligations for the purposes of the subordination provisions of the CVR indenture. In addition, if a default on our senior obligations would occur as a result of the CVR payment or there is an existing payment default on our senior obligations, the maturity of our senior obligations is accelerated or in other circumstances, no CVR payment will be payable, if any payment is due, until any such default is remedied
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An active public market for the CVRs may not develop, or the CVRs may trade at low volumes, both of which could have an adverse effect on the resale price, if any, of the CVRs.
The CVRs are a new security with a limited public trading market. An active public trading market for the securities may not develop or be sustained. We have listed the CVRs on NASDAQ, under the symbol “APCVZ”. However, there may be little or no market demand for the CVRs, making it difficult or impossible to resell the CVRs, which would have an adverse effect on the resale price, if any, of the CVRs. In addition, holders of CVRs may incur brokerage charges in connection with the resale of the CVRs, which in some cases could exceed the proceeds realized by the holder from the resale of its CVRs.
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