NOTE AND
WARRANT PURCHASE AGREEMENT
This
Note and Warrant Purchase Agreement (this “
Agreement ”), dated as of September 16,
2009, among Eastman Kodak Company, a New Jersey corporation (the
“ Company ”), KKR Jet Stream (Cayman)
Limited (the “ Investor ” (the Investor
together with any assignee or transferee of the Securities (as
defined below) in accordance with the terms of this Agreement, the
“ Holders ”)) and, solely for the
purposes of Sections 6.5, 6.6, 8, 9 and 12 (including, for the
avoidance of doubt, the definitions used in such provisions set
forth in Exhibit A ), Kohlberg Kravis Roberts & Co.
L.P., a Delaware limited partnership (“ KKR
”). Certain terms used but not defined elsewhere in this
Agreement have the meanings assigned to them in
Exhibit A .
WHEREAS,
the Company desires to sell, and the Investor desires to buy,
(x) an aggregate principal amount of at least $300,000,000 and
up to $400,000,000 of the Company’s Senior Secured Notes due
2017 (the “ Notes ”), to be issued in
accordance with the terms and conditions of an indenture to be
entered into among the Company, the Guarantors and The Bank of New
York Mellon, as trustee (in such capacity, the “
Trustee ”), substantially in the form attached
to this Agreement as Exhibit B bearing the cash and
pay-in-kind interest rates provided for in Section I of
Schedule B (the “ Indenture
”), and (y) warrants (the “ Warrants
” and, together with the Notes, the “
Securities ”), substantially in the form
attached to this Agreement as Exhibit C , to purchase an
aggregate of at least 40,000,000 and up to 53,000,000 shares (the
“ Warrant Shares ”) of common stock,
$2.50 par value per share, of the Company (the “ Common
Stock ”); the specific aggregate principal amount of
Notes and specific number of Warrant Shares will be calculated as
provided in Section 1.1;
WHEREAS,
the Company’s obligations under the Notes, including the due
and punctual payment of interest on the Notes, will be irrevocably
and unconditionally guaranteed (the “
Guarantees ”) by each of the guarantors listed
on Schedule A (the “ Guarantors
”);
WHEREAS,
the Company and each of the Guarantors have agreed to secure the
Notes by granting a security interest on certain assets of the
Company and each of the Guarantors (the “
Collateral ”) pursuant to a security agreement,
substantially in the form attached to this Agreement as
Exhibit D (the “ Security Agreement
”) and all other instruments, agreements and other documents
granting (or purporting to grant) to the Collateral Agent a lien or
security interest in or to the Collateral required under the
Security Agreement (such other instruments, together with the
Collateral Trust Agreement and the Security Agreement, the “
Collateral Documents ”);
WHEREAS, the
Company and each of the Guarantors have agreed, pursuant to a
collateral trust agreement to be entered into among the Company,
the Guarantors, the Trustee and The Bank of New York Mellon, as
collateral agent on behalf of the Holders of the Notes (in such
capacity, the “ Collateral Agent ”),
substantially in the form attached to this Agreement as
Exhibit E (the “ Collateral Trust
Agreement ”), to grant to the Collateral Agent in
trust, for the benefit of all present and future Second Lien
Secured parties (under and as defined therein), all
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of the
Company’s and each Guarantor’s right, title and
interest in, to and under the Collateral and all of the Collateral
Agent’s right, title and interest in, to and under the
Collateral Documents;
WHEREAS,
certain rights of the Holders of the Notes relating to the
Collateral will be subject to an intercreditor agreement to be
entered into, among the Company, the Guarantors, the Trustee, the
Collateral Agent and Citicorp USA, Inc., as administrative agent on
behalf of the lenders under the Credit Agreement, substantially in
the form attached to this Agreement as Exhibit F (the
“ Intercreditor Agreement ”);
WHEREAS,
the Holders will be entitled to registration rights as set forth in
a registration rights agreement, in the form attached to this
Agreement as Exhibit G (the “ Registration
Rights Agreement ”); and
WHEREAS,
in connection with such sale and purchase, the Company and the
Investor are each willing to make certain representations and
warranties and to agree to observe certain covenants set forth in
this Agreement for the benefit of the other party, and the parties
will rely on such representations, warranties and covenants as a
material inducement to their purchase of the Securities.
NOW
THEREFORE, in consideration of the premises and of the respective
representations, warranties, covenants and conditions contained in
this Agreement, the parties to this Agreement agree as
follows:
1.
Purchase and Sale of Securities .
1.1
Sale and Issuance of Securities .
(a) The
aggregate principal amount of Notes to be sold under this Agreement
(the “ Aggregate Principal Amount ”)
shall equal $700,000,000, less the proceeds (such proceeds,
together with the Aggregate Principal Amount, the “
Aggregate Financing Proceeds ”) that are
received by the Company from the private placement of the
Company’s convertible senior notes due 2017 (the “
Convertible Notes Offering ”) described in the
last draft of the Company’s offering memorandum (the “
Convertible Notes Offering Memorandum ”)
provided to the Investor and its counsel prior to the execution of
this Agreement on September 16, 2009 (including the aggregate
amount of the proceeds that are received from any exercise of the
over-allotment option granted to the initial purchasers in
connection therewith (the “ Over-allotment
Option ”)); provided , that in no event shall
the Aggregate Principal Amount be less than $300,000,000 nor more
than $400,000,000; provided , further, that, if the
Aggregate Financing Proceeds are greater than $600,000,000, the
Company may, at its option by written notice to the Investor
delivered no later than the earlier of (x) 6:00 p.m., New York
City time, on the date the Over-allotment option expires (which,
for the avoidance of doubt, shall be no later than
September 28, 2009), or (y) the date on which such option
is exercised in full, reduce the Aggregate Principal Amount to not
less than $300,000,000.
The
aggregate number of Warrant Shares to be subject to the Warrants to
be sold under this Agreement (the “ Aggregate Warrant
Shares ”) shall equal (x) 40,000,000, plus (y)
(A) 13,000,000, multiplied by (B) a fraction, the
numerator of which is the amount by which the
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Aggregate
Principal Amount exceeds $300,000,000 and the denominator of which
is $100,000,000.
Subject
to the terms and conditions of this Agreement, the Investor agrees
to purchase at the Closing, and the Company agrees to sell and
issue to the Investor at the Closing, an aggregate principal amount
of Notes equal to the Aggregate Principal Amount and a number of
Warrants equal to the Aggregate Warrant Shares, for an aggregate
purchase price equal to the principal amount of Notes purchased
multiplied by a percentage equal to (A) 100%, minus
(B) the Discount Percentage on the Notes purchased determined
by reference to the Exercise Price (as defined in the form of
Warrant attached to this Agreement as Exhibit C ) of
the Warrants as set forth in Section II of
Schedule B ; provided , that if the Aggregate
Principal Amount is greater than $350,000,000, the Discount
Percentage will not exceed 2.00%. The aggregate purchase price for
the Notes and Warrants payable by the Investor and the aggregate
purchase price for the Notes and the Warrants is referred to as the
“ Purchase Price .”
(b) The
Company will allocate (the “ Allocation
”) the Purchase Price between the Notes and the Warrants in
accordance with Section 1273(c)(2) of the Code and the
applicable Treasury Regulations for all tax reporting purposes
after consulting with the Investor prior to finalizing the
Allocation. A draft of the Company’s proposed Allocation
(based on the then current assumptions) will be promptly provided
to the Investor no later than the third business day prior to the
Closing.
The
consummation of the purchase and sale of the Securities and other
transactions contemplated by this Agreement (the “
Closing ”) will take place at the offices of
Wilson Sonsini Goodrich & Rosati, Professional Corporation,
1301 Avenue of the Americas, New York, NY 10019, at 10:00 a.m.
New York City time, on the date that is the later of (i) three
(3) business days following the first date on which all
conditions set forth in Sections 4 and 5 have been satisfied
or waived (other than those conditions that by their nature are to
be satisfied by actions taken at the Closing) or
(ii) September 29, 2009, or at such other time and place
as the Company and the Investor shall mutually agree.
2.
Representations and Warranties of the Company . The Company
represents and warrants to the Investor as of the date of this
Agreement that, except as otherwise disclosed or incorporated by
reference in the Company’s Annual Report on Form 10-K for the
year ended December 31, 2008 or its other reports and forms filed
with or furnished to the Securities and Exchange Commission (the
“ Commission ”) under Sections 12,
13, 14 or 15(d) of the Securities Exchange Act of 1934, as amended
(the “ Exchange Act ”), after
December 31, 2008 (including any amendments or supplements
thereto but excluding disclosures of risks included in any
forward-looking statement disclaimers or other statements that are
similarly nonspecific and are predictive and forward-looking in
nature) and before the date of this Agreement (all such reports,
collectively, the “ SEC Reports
”):
2.1
Organization and Good Standing . Each of the Company and the
Guarantors is duly organized, validly existing and, to the extent
such concept is applicable, in good standing under the laws of the
jurisdiction of its organization.
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2.2
No Conflicts . The execution, delivery and performance by
each of the Company and the Guarantors, as applicable, of each of
this Agreement, the Fee Letter (as defined below), the Indenture,
the Notes, the Guarantees, the Warrants, the Collateral Documents,
Collateral Trust Agreement, the Intercreditor Agreement and the
Registration Rights Agreement (collectively the “
Transaction Documents ”) to which it is or is
to be party, and the consummation of the transactions contemplated
by this Agreement and the other Transaction Documents (including,
without limitation, the issuance of the Warrant Shares upon
exercise of the Warrants) are within the corporate powers of each
of the Company and the Guarantors, have been duly authorized by all
necessary corporate action, do not (i) contravene the charter,
by-laws or other governing documents of the Company or the
Guarantors, (ii) violate any law, rule, regulation (including,
without limitation, with respect to the Company, Regulation X
of the Board of Governors of the Federal Reserve System), order,
writ, judgment, injunction, decree, determination or award,
(iii) assuming the effectiveness of Amendment No. 1 to
the Credit Agreement, conflict with or result in the breach of, or
constitute a default or require any payment to be made under, any
material contractual restriction or, to the knowledge of the
Company or any Guarantor, any other contractual restriction,
binding on or affecting the Company or any Guarantor (except for
the prohibition on prepayment, redemption, purchase, defeasance or
other satisfaction of the Notes prior to the Stated Maturity (as
defined in the Credit Agreement) of the Notes while the Credit
Agreement is in effect; provided that the issuance and sale
of the Notes and the Warrants as contemplated under the Transaction
Documents and entering into the covenants under the Transaction
Documents do not violate such prohibition) or (iv) except for
the Liens created under the Collateral Documents, result in or
require the creation or imposition of any Lien upon or with respect
to any of the properties of the Company, the Guarantor or any of
their respective Subsidiaries. No provision of the charter, by-laws
or other governing documents of the Company will, directly or
indirectly, restrict or impair the ability of the Holders to vote,
or otherwise to exercise the rights of a shareholder with respect
to, the Warrant Shares.
2.3
Consents . Assuming the effectiveness of Amendment
No. 1 to the Credit Agreement, no authorization or approval or
other action by, and no notice to or filing with, any Governmental
Authority or regulatory body or any other third party is required
for (i) the offer, sale or issuance of the Securities (and the
Warrant Shares issuable upon exercise of the Warrants), (ii) the
due execution, delivery, recordation, filing or performance by the
Company or any Guarantor of any Transaction Document to which it is
or is to be a party, or (iii) the exercise by the Investor of
its rights under the Transaction Documents or the remedies in
respect of the Collateral pursuant to the Collateral Documents.
Assuming that the representations of the Investor set forth in
Section 3 are true and correct, the offer, sale, and issuance
of the Securities in conformity with the terms of this Agreement
are exempt from the registration requirements of Section 5 of
the Securities Act of 1933, as amended (the “
Securities Act ”), and all applicable state
securities laws, and the Company shall not, and shall cause the
Guarantors and any authorized agent acting on their behalf to not,
take any action hereafter that would cause the loss of such
exemptions. No qualification of the Indenture under the Trust
Indenture Act of 1939 is required in connection with the offer and
sale of the Notes and associated Guarantees.
2.4
Authorization; Enforceability . This Agreement has been, and
each other Transaction Document when delivered hereunder will have
been, duly executed and
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delivered by
each of the Company and the Guarantors party thereto. This
Agreement is, and each other Transaction Document when delivered
hereunder will be, the legal, valid and binding obligation of each
of the Company and the Guarantors party thereto enforceable against
each of the Company and the Guarantors party thereto in accordance
with their respective terms, except as enforceability may be
affected by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting enforcement of
creditors’ rights generally and by general principles of
equity, whether enforcement is sought in a proceeding in equity or
at law.
2.5
Warrant Shares . The Warrant Shares issuable upon exercise
of the Warrants have been duly and validly reserved for issuance
and, upon issuance, will be duly and validly issued, fully paid,
and nonassessable.
2.6
No Restrictions on Transfer . The Securities and the Warrant
Shares will be free of restrictions on transfer other than, with
respect to the Warrants and the Warrant Shares, as set forth in the
Warrants and under applicable state and federal securities
laws.
2.7
Financial Statements; No Material Adverse Change
.
(a) Each
of (x) the consolidated statement of financial position of the
Company and its consolidated Subsidiaries as of December 31,
2008, and the related consolidated statement of earnings and
consolidated statement of cash flows of the Company and its
consolidated Subsidiaries for the fiscal year then ended,
accompanied by an opinion of PricewaterhouseCoopers LLP,
independent public accountants, and (y) the consolidated
statement of financial position of the Company and its consolidated
Subsidiaries as of March 31, 2009 and June 30, 2009, and
the related consolidated statement of earnings and consolidated
statement of cash flows of the Company and its consolidated
Subsidiaries for the three and six-months periods then ended,
fairly present in all material respects, the consolidated financial
condition of the Company and its consolidated Subsidiaries as at
such dates and the consolidated statement of earnings and
consolidated statement of cash flows of the Company and its
consolidated Subsidiaries for the periods ended on such dates, all
in accordance with then applicable generally accepted accounting
principles in the United States consistently applied (except as
otherwise noted therein, and in the case of quarterly financial
statements except for the absences of footnote disclosure and
subject, in the case of interim periods, to normal year-end
adjustments).
(b) Since
December 31, 2008 there has been no Material Adverse
Change.
(c) The
Company and its Subsidiaries do not have any liabilities or
obligations (accrued, absolute, contingent or otherwise), other
than liabilities or obligations (i) reflected on, reserved
against, or disclosed in the notes to, the Company’s
consolidated balance sheet included in the Company’s
Quarterly Report on Form 10-Q for the fiscal quarter ended
June 30, 2009, (ii) that were incurred in the ordinary course
of business and would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, or
(iii) that were not incurred in the ordinary course of
business and do not exceed $10,000,000 in the aggregate.
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2.8
Litigation . There is no pending or, to the knowledge of the
Company, threatened action, suit, investigation, litigation or
proceeding, including, without limitation, any Environmental
Action, affecting the Company or any of its Subsidiaries before any
court, Governmental Authority or arbitrator that (i) is
reasonably likely to have a Material Adverse Effect or
(ii) purports to affect the legality, validity or
enforceability of this Agreement or any other Transaction Document
or the consummation of the transactions contemplated by this
Agreement or by any of the other Transaction Documents.
2.9
Margin Rules . The Company is not engaged in the business of
extending credit for the purpose of purchasing or carrying margin
stock (within the meaning of Regulation U issued by the Board
of Governors of the Federal Reserve System), and no proceeds of the
sale of the Securities will be used to purchase or carry any margin
stock or to extend credit to others for the purpose of purchasing
or carrying any margin stock.
2.10
Investment Company Act . Neither the Company, the Guarantors
nor any of their respective Subsidiaries is an “investment
company”, or a company “controlled” by an
“investment company,” within the meaning of the
Investment Company Act of 1940, as amended.
2.11
Intellectual Property . To the Company’s knowledge,
the Company and the Guarantors own, possess, license or have other
rights to use, on reasonable terms, all patents, patent
applications, trade and service marks, trade and service mark
registrations, trade names, copyrights, licenses, inventions, trade
secrets, technology, know-how and other intellectual property
(collectively, the “ Intellectual Property
” ) necessary for the conduct of the
Company’s business as now conducted, except where the absence
of such ownership rights would not have a Material Adverse Effect.
Except as would not reasonably be expected to have a Material
Adverse Effect, (a) the Company has not received notice of any
claim of rights by third parties to any such Intellectual Property
that the Company or its Subsidiaries own, except for such rights as
may have been granted to such third parties by the Company or its
Subsidiaries; (b) the Company is not aware of any infringement
by third parties of any Intellectual Property owned by the Company
or its Subsidiaries; (c) there is no pending or, to the
knowledge of the Company, threatened action, suit, proceeding or
claim by others challenging the Company’s rights in or to any
such Intellectual Property owned by the Company or its
Subsidiaries, and the Company is unaware of any facts which would
form a reasonable basis for any such claim; (d) there is no
pending or, to the knowledge of the Company, threatened action,
suit, proceeding or claim by others challenging the validity or
scope of any such Intellectual Property owned by the Company or its
Subsidiaries, and the Company is unaware of any facts which would
form a reasonable basis for any such claim; and (e) there is
no pending or, to the knowledge of the Company, threatened action,
suit, proceeding or claim by others that the Company or any of its
Subsidiaries infringes or otherwise violates any patent, trademark,
copyright, trade secret or other proprietary rights of others, and
the Company is unaware of any other fact which would form a
reasonable basis for any such claim.
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(a) No
ERISA Event has occurred or is reasonably expected to occur with
respect to any Plan that has resulted in or is reasonably expected
to result in a material liability of the Company or any Guarantor
or any ERISA Affiliate.
(b) Neither
the Company nor any Guarantor nor any ERISA Affiliate has incurred
or is reasonably expected to incur any Withdrawal Liability to any
Multiemployer Plan that in the aggregate could reasonably be
expected to have a Material Adverse Effect.
(c) Neither
the Company, any Guarantor nor any ERISA Affiliate has been
notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or has been terminated,
within the meaning of Title IV of ERISA, and no such Multiemployer
Plan is reasonably expected to be in reorganization or to be
terminated, within the meaning of Title IV of ERISA.
2.13
Environmental Laws . The operations and properties of the
Company and each of its Subsidiaries comply in all respects with
all applicable Environmental Laws and Environmental Permits, except
for such noncompliance that would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse
Effect, all past non-compliance with such Environmental Laws and
Environmental Permits has been resolved without ongoing obligations
or costs that have had or are reasonably expected to have a
Material Adverse Effect, and no circumstances exist that are
reasonably likely to (A) form the basis of an Environmental
Action against the Company or any of its Subsidiaries or any of
their properties, or otherwise give rise to any liability under
Environmental Laws, that is reasonably expected to have a Material
Adverse Effect or (B) cause any such property to be subject to
any restrictions on ownership, occupancy, use or transferability
under any Environmental Law that is reasonably expected to have a
Material Adverse Effect.
2.14
Property . The Company and each of its Subsidiaries has good
and marketable fee simple title to or valid leasehold interests in
all of the real property owned or leased by the Company or such
Subsidiary and good title to all of their personal property, except
where the failure to hold such title or leasehold interests,
individually or in the aggregate, is not reasonably expected to
have a Material Adverse Effect. The Company and its Subsidiaries
enjoy peaceful and undisturbed possession under all of their
respective leases except where the failure to enjoy such peaceful
and undisturbed possession, individually or in the aggregate, is
not reasonably expected to have a Material Adverse
Effect.
2.15
Taxes . Each of the Company and its Subsidiaries has filed
all material tax returns required to have been filed and paid all
taxes shown thereon to be due, except those for which extensions
have been obtained and except for those which are being contested
in good faith and by appropriate proceedings and in respect of
which adequate reserves with respect thereto are maintained in
accordance with Generally Accepted Accounting
Principles.
2.16
Insurance . All policies of insurance of the Company and
each of its Subsidiaries and their respective businesses, assets,
employees, officers and directors are in full force and effect. The
Company and each of its Subsidiaries are in compliance with the
terms
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of such
policies in all material respects, and there are no material claims
by the Company or any of its Subsidiaries under any such policy as
to which any insurance company is denying liability or defending
under a reservation of rights clause. Neither the Company nor any
of its Subsidiaries has been refused any insurance coverage sought
or applied for, and neither the Company nor any of its Subsidiaries
have any reason to believe that it will not be able to
(i) renew its existing insurance coverage as and when such
policies expire or (ii) obtain comparable coverage from
similar institutions as may be necessary or appropriate to conduct
its business as now conducted and at a cost that would not,
individually or in the aggregate, reasonably be expected to result
in a Material Adverse Effect.
2.17
Compliance with Laws . Neither the Company nor any of its
Subsidiaries is in material violation of any applicable federal,
state, local, foreign or other law, statute, regulation, rule,
ordinance, code, convention, directive, order, judgment or other
legal requirement (collectively, “ Laws
”) of any Governmental Authority, except where such violation
could not reasonably be expected to have, individually or in the
aggregate, a material adverse impact on the ability of the Company
and its Subsidiaries, taken as a whole, to conduct their businesses
in the ordinary course of business consistent with past practices.
To the knowledge of the Company, neither the Company nor any of its
Subsidiaries has been threatened to be charged with or given notice
of any violation of, any applicable Law, except for such of the
foregoing as could not reasonably be expected to have a material
adverse effect on the ability of the Company and its Subsidiaries,
taken as a whole, to conduct their businesses in the ordinary
course of business consistent with past practices.
2.18
Accuracy of Information . All factual information, taken as
a whole, furnished by or on behalf of the Company and its
Subsidiaries in writing to the Investor on or prior to the date of
this Agreement, for purposes of this Agreement and all other such
factual information, taken as a whole, furnished by the Company on
behalf of itself and its Subsidiaries in writing to the Investor
pursuant to the terms of this Agreement will be, true and accurate
in all material respects on the date as of which such information
is dated or furnished and not incomplete by knowingly omitting to
state any material fact necessary to make such information, taken
as a whole, not misleading at such time, provided ,
however , that with respect to any projected financial
information or forward-looking statements, business assumptions,
strategic plans or similar information, the Company represents only
that such information was prepared in good faith based upon
assumptions, and subject to such qualifications, believed to be
reasonable at the time. The Company makes no representation in this
Section 2.18 with respect to any information to the extent
prepared by third parties, provided , however , that
nothing has come to the attention of the Company that has caused
the Company to believe that such information is not based on or
derived from sources that are reliable and accurate in all material
respects.
2.19
Solvency . The Company is, individually and together with
its Subsidiaries, Solvent.
2.20
Subsidiaries; Capitalization . Set forth on Part A of
Schedule C is a complete and accurate list of all
direct and indirect Subsidiaries of the Company that are organized
under the laws of a state of the United States of America, and set
forth on Part B of Schedule C is a complete and
accurate list of all Material Subsidiaries of the Company, showing,
in each case, as of the date of this Agreement (as to each such
Subsidiary) the jurisdiction of its
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formation, and,
with respect to each non-wholly owned Subsidiary, the number of
shares, membership interests or partnership interests (as
applicable) of each class of its equity interests authorized, and
the number outstanding, on the date of this Agreement and the
percentage of each such class of its equity interests owned
(directly or indirectly) by the Company and the Guarantors, as
applicable, and the number of shares covered by all outstanding
options, warrants, rights of conversion or purchase and similar
rights as of the date of this Agreement. All of the outstanding
equity interests in each of the respective Material Subsidiaries of
the Company and the Guarantors have been validly issued, are fully
paid and non-assessable and are owned by the Company or such
Guarantor or one or more of its Subsidiaries, other than
directors’ qualifying shares or similar minority interests
required under the laws of the Material Subsidiary’s
formation, free and clear of all Liens, except those created or
permitted under the Collateral Documents. As of the date of this
Agreement, the Company has 268,191,312 shares of issued and
outstanding Common Stock.
2.21
Registration Rights; Voting Rights . Except as provided in
the Registration Rights Agreement, (i) the Company has not
granted or agreed to grant, and is not under any obligation to
provide, any rights to register under the Securities Act any of its
presently outstanding securities or any of its securities that may
be issued subsequently, and (ii) to the Company’s
knowledge, no shareholder of the Company has entered into any
agreement with respect to the voting of equity securities of the
Company.
(a) Since
December 31, 2006, the Company has timely filed all documents
required to be filed with the Commission pursuant to
Sections 13(a), 14(a) or 15(d) of the Exchange Act other than
the untimely filing of a Report on Form 8-K filed on
December 19, 2008, for which the Company has received a waiver
from the Commission regarding eligibility to file a registration
statement on Form S-3.
(b) The
SEC Reports, when they became effective or were filed with the
Commission, as the case may be, conformed in all material respects
to the requirements of the Securities Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make such statements,
in the light of the circumstances in which they were made, not
misleading.
2.23
No Solicitation / Integration . Neither the Company nor any
other Person authorized by the Company to act on its behalf has
engaged in a general solicitation or general advertising (within
the meaning of Regulation D of the Securities Act) of
investors with respect to offers or sales of the Securities. The
Company has not, directly or indirectly, sold, offered for sale,
solicited offers to buy or otherwise negotiated in respect of, any
security (as defined in the Securities Act) which, to its
knowledge, is or will be integrated with the Securities sold
pursuant to this Agreement.
2.24
Brokers . Neither the Company nor any other Person
authorized by the Company to act on its behalf has retained,
utilized or been represented by any broker or
9
finder in
connection with the transactions contemplated by this Agreement
whose fees the Investor would be required to pay.
3.
Representations and Warranties of the Investor . The
Investor represents and warrants, or acknowledges, as applicable,
as of the date of this Agreement as follows:
(a) The
Investor is (i) an “accredited investor” within
the meaning of Rule 501 of Regulation D promulgated under the
Securities Act; (ii) aware that the sale of the Securities
(for purposes of this Section, the term Securities includes the
Common Stock issuable upon conversion of the Warrants) to it is
being made in reliance on a private placement exemption from
registration under the Securities Act and (iii) acquiring the
Securities for its own account.
(b) The
Investor understands and agrees that the Securities are being
offered in a transaction not involving any public offering within
the meaning of the Securities Act, that such Securities have not
been and, except as contemplated by the Registration Rights
Agreement, will not be registered under the Securities Act and that
such Securities may be offered, resold, pledged or otherwise
transferred only (i) pursuant to an exemption from
registration under the Securities Act, including the exemption
provided by Rule 144 thereunder (if available),
(ii) pursuant to an effective registration statement under the
Securities Act, or (iii) to the Company or one of its
Subsidiaries, in each of cases (i) through (iii) in
accordance with any applicable securities laws of any State of the
United States, and that it will notify any subsequent purchaser of
Securities from it of the resale restrictions referred to above, as
applicable.
(A) is
able to fend for itself in the transactions contemplated by this
Agreement;
(ii) has
such knowledge and experience in financial and business matters as
to be capable of evaluating the merits and risks of its prospective
investment in the Securities; and
(iii) has
the ability to bear the economic risks of its prospective
investment and can afford the complete loss of such
investment.
(d) The
Investor acknowledges that (i) it has conducted its own
investigation of the Company and the terms of the Securities,
(ii) it has had access to the Company’s public filings
with the Commission and to such financial and other information as
it deems necessary to make its decision to purchase the Securities,
and (iii) has been offered the opportunity to ask questions of
the Company and received answers thereto, as it deemed necessary in
connection with the decision to purchase the Securities. The
foregoing, however, does not limit or modify the representations
and warranties of the Company under this Agreement or the right of
the Investor to rely thereon.
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(e) The
Investor understands that the Company will rely upon the truth and
accuracy of the foregoing representations, acknowledgements and
agreements.
3.2
Organization . The Investor has been duly organized and is
validly existing under the laws of its place of
organization.
3.3
Power and Authority . The Investor has full right, power,
authority and capacity to enter into this Agreement and the other
Transaction Documents to which it will be a party and to consummate
the transactions contemplated hereby and thereby and has taken all
necessary action to authorize the execution, delivery and
performance hereof and thereof.
3.4
Authorization; Enforceability . The execution, delivery and
performance of this Agreement and the other Transaction Documents
to which it will be a party has been duly authorized by all
necessary action on the part of the Investor, and this Agreement
has been duly executed and delivered by the Investor and, assuming
due authorization, execution and delivery of this Agreement by the
Company, the Guarantors and any other party thereto, this Agreement
constitutes a valid and binding obligation of the Investor,
enforceable against it in accordance with its terms, except as
enforceability may be affected by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting enforcement of creditors’ rights generally and by
general principles of equity, whether enforcement is sought in a
proceeding in equity or at law.
3.5
No Conflicts . The execution, delivery and performance by
the Investor of this Agreement and the other Transaction Documents
to which it is or is to be party, and the consummation of the
transactions contemplated by this Agreement and the other
Transaction Documents do not (i) contravene the limited
partnership agreement of the Investor, (ii) result in any
default or violation of any agreement relating to its material
Indebtedness or under any mortgage, deed of trust, security
agreement or lease to which it is a party or in any default or
violation of any material judgment, order or decree of any
Governmental Authority, (iii) result in or require the
creation or imposition of any Lien upon or with respect to any of
the properties of the Investor or (iv) conflict with or
violate any applicable Laws, other than, in the case of clauses
(ii), (iii) and (iv), as would not, individually or in the
aggregate, be reasonably likely to materially delay or hinder the
ability of the Investor to perform its obligations under the
Transaction Agreements (an “ Investor Adverse
Effect ”).
3.6
Financial Capability . The Investor has furnished to the
Company a true, correct and complete copy of the binding commitment
from KKR 2006 Fund (Overseas) Limited Partnership (the “
Commitment Letter ”) relating to the equity
investment in the Investor. The Commitment Letter has been duly
executed and delivered by each party thereto, is a legal, valid and
binding obligation of each such party and is enforceable against
each such party in accordance with its terms. Subject to its terms
and conditions, the equity invested in the Investor pursuant to the
Commitment Letter will provide the Investor with funding sufficient
to pay all amounts payable by it pursuant to Section 1.1 at
the Closing. Subject to the performance of KKR 2006 Fund (Overseas)
Limited Partnership under the Commitment Letter, at the Closing the
Investor will have all funds necessary to pay to the Company the
Purchase Price in immediately available funds.
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3.7
Consents . All consents, approvals, orders and
authorizations required on the part of the Investor in connection
with the execution, delivery or performance of this Agreement and
the consummation by the Investor of the other transactions
contemplated herein have been obtained or made, other than such
consents, approvals, orders and authorizations the failure of which
to make or obtain, individually or in the aggregate, would not be
reasonably likely to have an Investor Adverse Effect.
3.8
Brokers . The Investor has not retained, utilized or been
represented by any broker or finder in connection with the
transactions contemplated by this Agreement whose fees the Company
would be required to pay.
4.
Conditions to Investor’s Obligations at Closing . The
obligation of the Investor to purchase the Securities at the
Closing is subject to the fulfillment on or before the Closing of
each of the following conditions:
4.1
Delivery of Securities . The Company will have delivered
(x) the aggregate principal amount of Notes, evidenced by one
or more global securities, representing the Aggregate Principal
Amount of the Notes to be purchased by the Investor pursuant to
Section 1.1, which shall have been delivered to the Trustee as
custodian for The Depository Trust Company ( “ DTC
” ) and registered in the name of Cede & Co., as
nominee for DTC, and DTC shall have credited the portions of the
principal amount of such global securities to the accounts of DTC
participants designated by the Investors Trust Corporation and
(y) the Warrants to be purchased by the Investor pursuant to
Section 1.1.
4.2
Representations and Warranties . The representations and
warranties of the Company contained in Section 2 shall be true
and correct in all material respects as of the date of this
Agreement and on and as of the Closing as if made on and as of the
Closing, except to the extent that such representations and
warranties are qualified by the term “material” or
contain terms such as “Material Adverse Effect” or
“Material Adverse Change” in which case such
representations and warranties (as so written, including the term
“material”, “Material Adverse Effect” or
“Material Adverse Change”) shall be true and correct in
all respects as of the date of this Agreement and on and as of the
Closing as if made on and as of the Closing. Notwithstanding the
foregoing, this Section 4.2 shall not be a condition precedent
to Closing if the Convertible Notes Offering shall have closed
prior to the date of Closing and the representations and warranties
of the Company contained in Section 2 are true and correct in
all material respects as of the date of the closing of the
Convertible Notes Offering, except to the extent that such
representations and warranties are qualified by the term
“material” or contain terms such as “Material
Adverse Effect” or “Material Adverse Change” in
which case such representations and warranties (as so written,
including the term “material”, “Material Adverse
Effect” or “Material Adverse Change”) shall be
true and correct in all respects as of the date of the closing of
the Convertible Notes Offering.
4.3
Performance . The Company shall have performed and complied
in all material respects with all agreements, obligations, and
conditions contained in this Agreement that are required to be
performed or complied with by it on or before the
Closing.
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4.4
Compliance Certificate . An executive officer of the Company
shall deliver to the Investor at the Closing a certificate stating
that the conditions specified in Sections 4.2 and 4.3 are
satisfied.
4.5
Listing of Shares . The Warrant Shares to be issued upon
exercise of the Warrants shall have been approved for listing on
the New York Stock Exchange (the “ NYSE
”), subject to official notice of issuance.
4.6
Transaction Documents . The parties (other than the
Investor) to each Transaction Document shall have entered into each
such Transaction Document and each such Transaction Document shall
be in full force and effect.
4.7
Other Documents and Proceedings . All corporate and other
proceedings in connection with the transactions contemplated at the
Closing shall be completed, and all documents incident thereto
(other than the documents related to the Convertible Notes
Offering, including those related to the tender offer described in
the Convertible Notes Offering Memorandum for the Company’s
currently outstanding convertible notes) shall be reasonably
satisfactory in form and substance to the Investor’s counsel,
which shall have received all such counterpart original and
certified or other copies of such documents as it may reasonably
request.
4.8
State Securities Laws . The Company shall have obtained all
necessary permits and qualifications, if any, or secured an
exemption therefrom, required by any state or country prior to the
offer and sale of the Securities, and such authorization, approval,
permit or qualification shall be effective at the
Closing.
4.9
Convertible Notes Offering . The Company shall have received
proceeds of at least $200.0 million from the Convertible Notes
Offering, which shall be on the terms described in the Convertible
Notes Offering Memorandum which, along with all other documentation
related to the Convertible Notes Offering requested by the
Investor, shall be provided to the Investor prior to Closing and
any disclosure therein relating to the Investor or the purchase of
the Notes and Warrants shall be reasonably acceptable to the
Investor; the Investor hereby acknowledges that the disclosure
relating to it and the purchase of the Notes and Warrants in the
Convertible Notes Offering Memorandum is acceptable to
it.
4.10
Opinion of Company Counsel . The Investor shall have
received (i) an opinion from Wilson Sonsini Goodrich &
Rosati, special counsel for the Company, dated as of the Closing,
in the form attached to this Agreement as Exhibit H-1 ;
(ii) an opinion from Day Pittney LLP, special counsel for the
Company, dated as of the Closing, in the form attached to this
Agreement as Exhibit H-2 ; (iii) an opinion from
Nixon Peabody LLP, special counsel for the Company, dated as of the
Closing, in the form attached to this Agreement as
Exhibit H-3 ; and (iv) an opinion from Joyce P.
Haag, General Counsel for the Company, dated as of the Closing, in
the form attached to this Agreement as Exhibit H-4
.
4.11
Board of Directors . The Board of Directors of the Company
(the “ Board ”) shall have taken all
actions necessary and appropriate to consider the initial Board
Nominees and, based on the Board’s consideration, has taken
all such actions necessary to cause such Board Nominees to be
appointed to the Board and to each committee of the Board
for
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which the Board
Nominees are qualified under applicable law and the rules of the
NYSE, all as set forth in further detail in Section 9, and
such Board Nominees shall have been so elected and appointed
concurrently with the Closing.
4.12
Placement Fee . Simultaneous with the Closing, the Company
shall have paid to KKR and KKR Capital Markets LLC, a Delaware
limited liability company “ KKR Capital Markets
”, or their designee(s) (which shall be U.S. domestic
entities) the fee (the “ Placement Fee ”)
provided for in that certain letter agreement, dated the date of
this Agreement, among the Company, KKR and KKR Capital Markets (the
“ Fee Letter ”), by wire transfer of
immediately available funds to the account designated by such
parties.
4.13
Payment of Expenses . Simultaneous with the Closing, the
Company shall have paid the reasonable out-of-pocket expenses of
KKR and KKR Capital Markets and their Affiliates as set forth in
and subject to that certain letter agreement, dated
September 8, 2009, among the Company, KKR and KKR Capital
Markets (the “ Expense Letter ”),
including, for the avoidance of doubt and without limitation, all
costs and expenses associated with the assignment, creation and
perfection of security interests pursuant to the Collateral
Documents and the related UCC financing statements, including in
connection with the preparation, negotiation, execution and
delivery of the Collateral Documents and all filing fees, lien
searches and the reasonable fees and expenses of counsel to the
Investors.
4.14
Amendment to Credit Agreement . The Investor shall have
received an executed copy of the amendment to the Credit Agreement
substantially in the form previously provided to the Investor (the
“ Amendment ”), and each of the
conditions to effectiveness set forth in Section 2 of the
Amendment shall have been satisfied or the Investor, in its sole
discretion, shall have consented to the waiver of such
conditions.
4.15
Collateral Matters .
(a) The
Collateral Agent shall have received (with a copy for the Investor)
on the Closing date:
(i)
appropriately completed copies of UCC-1 financing statements naming
the Company and each Guarantor as a debtor and the Collateral Agent
as the secured party, to be filed under the UCC of the jurisdiction
of incorporation or formation of the Company and each Guarantor;
and
(ii)
an intellectual property security agreement in the form attached as
Exhibit A to the Security Agreement with such revisions as are
necessary for such agreement to be filed at the U.S. Copyright
Office with respect to the copyrights listed on Schedule IV(D)
to the Security Agreement, executed by the Company and any
applicable Guarantors.
(b) The
Investor and its counsel shall be reasonably satisfied that there
are no Liens on the Collateral other than Permitted Liens (as
defined in the Indenture).
4.16
Allocation . The Allocation shall have been provided to the
Investor; provided , however , if the Aggregate
Principal Amount shall not have been determined
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two
(2) business days prior to the Closing, then the delivery of
the Allocation shall not be a condition to Closing (
provided that the Company covenants to deliver the
Allocation as promptly as practicable, but in any event no
later
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