SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): February 11, 1999
POLAROID CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 1-4085 04-1734655
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(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification Number)
784 Memorial Drive, Cambridge, Massachusetts 02139
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(Address of principal executive offices) (Zip Code)
(781) 386-2000
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(Registrant's telephone number, including area code)
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Item 5. Other Events
On February 17, 1999, Polaroid Corporation (the "Company") completed an
underwritten offering (the "Offering") of $275 million aggregate principal
amount of its 11 1/2% Notes due 2006 (the "Notes") covered by its shelf
Registration Statements on Form S-3 (File No.'s 333-0791 and 333-67647). The
sale of the Notes was underwritten by Lehman Brothers Inc., J.P. Morgan
Securities Inc., ABN AMRO Incorporated, Deutsche Bank Securities Inc. and PNC
Capital Markets, Inc. pursuant to an Underwriting Agreement filed herewith as
Exhibit 1.1. The terms and other provisions of the Notes are defined in the
Indenture, dated as of January 9, 1997, by and between the Company and State
Street Bank and Trust Company, as trustee (the "Trustee"), the form of which was
filed as Exhibit 4.1 to the Company's Registration Statement on Form S-3 (File
No. 333-0791), and the Supplemental Indenture, dated as of February 17, 1999
(including the form of the global notes representing the Notes (the "Global
Notes")), by and between the Company and the Trustee, filed herewith as Exhibit
4.2. The form of the Global Notes, included in Exhibit 4.2, is filed herewith as
Exhibit 4.3.
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Item 7. Exhibits
The following exhibits are filed as part of this report.
1.1 Underwriting Agreement, dated February 11, 1999, by and among Polaroid
Corporation, Lehman Brothers Inc., J.P. Morgan Securities Inc., ABN AMRO
Incorporated, Deutsche Bank Securities Inc. and PNC Capital Markets,
Inc.
4.2 Supplemental Indenture, dated as of February 17, 1999, between Polaroid
Corporation and State Street Bank and Trust Company, as Trustee,
relating to the $275 million aggregate principal amount of Polaroid
Corporation's 11 1/2% Notes due 2006.
4.3 Form of Global Notes. (The Form of Global Notes, included in Exhibit
4.2, is hereby incorporated herein by reference.)
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrants have duly caused this report to be signed on their behalf
by the undersigned hereunto duly authorized.
POLAROID CORPORATION
By:/s/ JUDITH G. BOYNTON
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Name: Judith G. Boynton
Title: Executive Vice President and Chief
Financial Officer
Dated: February 17, 1999
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EXHIBIT INDEX
Exhibits
1.1 Underwriting Agreement, dated February 11, 1999, by and among Polaroid
Corporation, Lehman Brothers Inc., J.P. Morgan Securities Inc., ABN AMRO
Incorporated, Deutsche Bank Securities Inc. and PNC Capital Markets,
Inc.
4.2 Supplemental Indenture, dated as of February 17, 1999, between Polaroid
Corporation and State Street Bank and Trust Company, as Trustee,
relating to $275 million aggregate principal amount of Polaroid
Corporation's 11 1/2% Notes due 2006.
4.3 Form of Global Notes. (The Form of Global Notes, included in Exhibit
4.2, is hereby incorporated herein by reference.)
POLAROID CORPORATION
$275,000,000 AGGREGATE PRINCIPAL AMOUNT 11 1/2% NOTES DUE 2006
UNDERWRITING AGREEMENT
New York, New York
February 11, 1999
Lehman Brothers Inc.
J.P. Morgan Securities Inc.
ABN AMRO Incorporated
Deutsche Bank Securities Inc.
PNC Capital Markets, Inc.
c/o Lehman Brothers Inc.
3 World Financial Center
200 Vesey Street
New York, New York 10285
Dear Sirs:
Polaroid Corporation, a Delaware corporation (the "Company"), may issue
and sell from time to time series of its debt securities registered under the
registration statement referred to in Paragraph 1(a) hereof. The Company
proposes to sell to the underwriters named in Schedule I hereto (the
"Underwriters") $275,000,000 in aggregate principal amount of its 11 1/2% Notes
due 2006 (collectively, the "Securities" and, individually, a "Security").
1. Representations, Warranties and Agreements of the Company. The
Company represents, warrants and agrees that:
(a) Registration statements (No. 333-0791 and No. 333-67647),
including a prospectus, with respect to the Securities have been
prepared by the Company in conformity with the requirements of the
Securities Act of 1933, as amended (the "Act"), and the rules and
regulations (the "Rules and Regulations") of the Securities and Exchange
Commission (the "Commission") thereunder and have become effective.
Copies of such registration statements have been delivered by the
Company to you as the Underwriters. As used in this Agreement, (i)
"Registration Statement" means each such registration statement, as
amended and supplemented to the date hereof; (ii) "Second Registration
Statement" means the Company's registration statement (No. 333-67647) as
amended and supplemented to the date hereof; (iii) "Preliminary
Prospectus" means each prospectus (including all documents incorporated
therein by reference or deemed to be incorporated by reference therein)
included in the Second Registration Statement, or amendments or
supplements thereof, before it became effective under the Act, including
any prospectus filed with the Commission pursuant to Rule 424(a) of the
Rules and Regulations; (iv) "Basic Prospectus" means the prospectus
included in the Second Registration Statement; and (v) "Prospectus"
means the Basic Prospectus, together with any prospectus amendment or
supplement (including in each case all documents
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incorporated therein by reference) specifically relating to the
Securities, as filed with the Commission pursuant to paragraph (b) of
Rule 424 of the Rules and Regulations. The Commission has not issued any
order preventing or suspending the use of any Prospectus, and no
proceedings for such purposes have been instituted or are pending or, to
the knowledge of the Company, are contemplated by the Commission, and
any request on the part of the Commission for additional information has
been complied with.
(b) The Registration Statements and the Prospectus contain, and
(in the case of any amendment or supplement to any such document, or any
material incorporated by reference in any such document, filed with the
Commission after the date as of which this representation is being made)
will contain at all times during the period specified in Paragraph 6(c)
hereof, all statements which are required by the Act, the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the
rules and regulations of the Commission under such Acts; the
Supplemental Indenture, dated as of February 17, 1999, (the
"Supplemental Indenture") by and between the Company and State Street
Bank and Trust Company, as trustee (the "Trustee") to the indenture,
dated as of January 7, 1997, by and between the Company and the Trustee
(the "Base Indenture" and together with the Supplemental Indenture, the
"Indenture"), pursuant to which the Securities will be issued conforms,
and with any amendments and supplements thereto will conform, with the
requirements of the Trust Indenture Act and the rules and regulations of
the Commission thereunder; and the Registration Statement and the
Prospectus do not, and (in the case of any amendment or supplement to
any such document, or any material incorporated by reference in any such
document, filed with the Commission after the date as of which this
representation is being made) will not, at any time during the period
specified in Paragraph 6(c) hereof, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided that the Company makes no representation or warranty as to
information contained in or omitted from any Registration Statement or
any Prospectus in reliance and based upon information furnished to the
Company by or on behalf of any Underwriter, or as to any statements in
or omissions from the Statement of Eligibility of the Trustee under the
Indenture.
(c) Neither the Company nor the Significant Subsidiary (as
defined in paragraph (h) hereof) is in violation of its corporate
charter or by-laws or in default under any agreement, indenture or
instrument, except for such defaults that would not result in a material
adverse change, or any development involving a material adverse change,
in or affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and the
Significant Subsidiary (a "Material Adverse Effect"), otherwise than as
set forth or contemplated in the Prospectus; and the execution, delivery
and performance of this Agreement, the Indenture and the Securities, and
the consummation of the transactions contemplated herein, and in the
Prospectus (including the issuance and sale of the Securities and the
use of the proceeds from the sale thereof as described in the Prospectus
under the caption "Use of Proceeds") have been duly authorized by all
necessary corporate action and do not and will not conflict with or
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constitute a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company or the Significant Subsidiary pursuant to, any
material agreement, indenture or instrument to which the Company or the
Significant Subsidiary is a party or by which any of them is bound or to
which any of their respective properties or assets is subject, nor will
such action result in a material violation of the charter or by-laws of
the Company or the Significant Subsidiary or any order, rule or
regulation of any court or governmental agency having jurisdiction over
the Company, the Significant Subsidiary or their respective properties;
and except as required by the Act, the Trust Indenture Act, the Exchange
Act and applicable state securities laws, no consent, authorization or
order of, or filing or registration with, any court or governmental
agency is required for the execution, delivery and performance of this
Agreement, the Indenture and the Securities or the consummation of the
transactions contemplated hereby and thereby.
(d) Except as described in or contemplated by the Registration
Statement and the Prospectus, neither the Company nor any of its
subsidiaries has sustained, since the date of the latest audited
financial statements included or incorporated by reference in the
Prospectus, any material loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree; and, since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus,
there has not been any change in the capital stock or long-term debt of
the Company or any of its subsidiaries or any material adverse change,
or any development involving a prospective material adverse change, in
or affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, except as described in or contemplated by the Prospectus.
(e) KPMG Peat Marwick LLP, who have certified certain financial
statements of the Company included and incorporated by reference in the
Prospectus, whose report appears in the Prospectus and in the Company's
most recent Annual Report on Form 10-K which is incorporated by
reference in the Prospectus and who have delivered the initial letter
referred to in Paragraph 9(i) hereof, are independent accountants as
required by the Act and the Rules and Regulations.
(f) On the Delivery Date (as defined in Paragraph 5 hereof) (i)
the Indenture will have been validly authorized, executed and delivered
by the Company and duly qualified under the Trust Indenture Act and will
constitute the legally binding obligation of the Company, (ii) the
Securities will have been validly authorized and executed and, upon
payment therefor as provided in this Agreement, will be validly issued
and outstanding, and will constitute legally binding obligations of the
Company entitled to the benefits of the Indenture, and (iii) the
Securities and the Indenture will conform to the descriptions thereof
contained in the Prospectus.
(g) This Agreement has been validly authorized, executed and
delivered by the Company.
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(h) The Company and the Significant Subsidiary have been duly
incorporated and are validly existing and remain subsisting corporations
under the laws of their respective jurisdictions of incorporation, are
duly qualified to do business and in good standing as foreign
corporations in each jurisdiction in which their respective ownership of
properties or the conduct of their respective businesses require such
qualification, except where the failure to so qualify would not have a
Material Adverse Effect, and have power and authority necessary to own
or hold their respective properties and to conduct the businesses in
which they are engaged and, with respect to the Company, to enter into
and perform its obligations under this Agreement; and none of the
subsidiaries of the Company (other than Polaroid International B.V. (the
"Significant Subsidiary")) is a "significant subsidiary," as such term
is defined in Rule 405 of the Rules and Regulations.
(i) There is no material action, suit or proceeding before any
court or governmental agency or body, domestic or foreign, now pending,
or, to the knowledge of the Company, threatened, against or affecting
the Company or the Significant Subsidiary, which is required to be
disclosed in the Prospectus (other than as disclosed therein), or which
might reasonably be expected to have a Material Adverse Effect, or which
might reasonably be expected to materially and adversely affect the
properties or assets thereof or the consummation of the transactions
contemplated in this Agreement or the performance by the Company of its
obligations hereunder.
(j) The financial statements filed as part of the Registration
Statement or included or incorporated by reference in the Prospectus
present, or (in the case of any amendment or supplement to any such
document, or any material incorporated by reference in any such
document, filed with the Commission after the date as of which this
representation is being made) will present at all times during the
period specified in Paragraph 6(c) hereof, fairly, the financial
condition and results of operations of the Company and its consolidated
subsidiaries, at the dates and for the periods indicated, and have been,
and (in the case of any amendment or supplement to any such document, or
any material incorporated by reference in any such document, filed with
the Commission after the date as of which this representation is being
made) will be at all times during the period specified in Paragraph 6(c)
hereof, prepared in conformity with generally accepted accounting
principles ("GAAP") applied on a consistent basis throughout the periods
involved.
(k) The documents incorporated by reference into the Prospectus
have been, and (in the case of any amendment or supplement to any such
document, or any material incorporated by reference in any such
document, filed with the Commission after the date as of which this
representation is being made) will be at all times during the period
specified in Paragraph 6(c) hereof, prepared by the Company in
conformity with the applicable requirements of the Act and Rules and
Regulations and the Exchange Act and the rules and regulations of the
Commission thereunder and such documents have been, or (in the case of
any amendment or supplement to any such document, or any material
incorporated by reference in any such document, filed with the
Commission after the date
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as of which this representation is being made) will be at all times
during the period specified in Paragraph 6(c) hereof, timely filed as
required thereby.
(l) There are no contracts or other documents which are required
to be filed as exhibits to the Registration Statement by the Act or by
the Rules and Regulations, or which were required to be filed as
exhibits to any document incorporated by reference in the Prospectus by
the Exchange Act or the rules and regulations of the Commission
thereunder, which have not been filed as exhibits to the Registration
Statement or to such document or incorporated therein by reference as
permitted by the Rules and Regulations or the rules and regulations of
the Commission under the Exchange Act as required.
(m) The Company and each of its subsidiaries have good and
marketable title in fee simple to all real property owned by them that
are material to the business and operations of the Company and its
subsidiaries, in each case free and clear of all liens, encumbrances and
defects except such as are described in the Prospectus or such as do not
materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property by
the Company and its subsidiaries; and all real property and buildings
held under lease by the Company and its subsidiaries that are material
to the business and operations of the Company and its subsidiaries are
held by them under valid, subsisting and enforceable leases, with such
exceptions as are not material and do not interfere with the use made
and proposed to be made of such property and buildings by the Company
and its subsidiaries.
(n) No relationship, direct or indirect, exists between or among
the Company on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company on the other hand, which is
required to be described in the Prospectus which is not so described.
(o) No labor disturbance by the employees of the Company exists
or, to the knowledge of the Company, is imminent which might be expected
to have a Material Adverse Effect.
(p) The Company is in compliance in all material respects with
all presently applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and
published interpretations thereunder ("ERISA"); no "reportable event"
(as defined in ERISA) has occurred with respect to any "pension plan"
(as defined in ERISA) for which the Company would have any liability;
the Company has not incurred and does not expect to incur liability
under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of the
Internal Revenue Code of 1986, as amended, including the regulations and
published interpretations thereunder (the "Code"); and each "pension
plan" for which the Company would have any liability that is intended to
be qualified under Section 401(a) of the Code is so qualified in all
material respects and nothing has occurred, whether by action or by
failure to act, which would cause the loss of such qualification.
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(q) The Company has filed all federal, state and local income and
franchise tax returns required to be filed through the date hereof and
has paid all taxes due thereon, and no tax deficiency has been
determined adversely to the Company or any of its subsidiaries which has
had (nor does the Company have any knowledge of any tax deficiency
which, if determined adversely to the Company or any of its
subsidiaries), might have a Material Adverse Effect, except for such tax
delinquencies that are the subject of a bona fide dispute by the Company
and for which the Company has established appropriate reserves under
GAAP.
(r) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued, are fully paid
and non-assessable and conform to the description thereof contained in
the Prospectus.
(s) Since the date as of which information is given in the
Prospectus through the date hereof, and except as may otherwise be
disclosed in the Prospectus, the Company has not (i) issued or granted
any securities, (ii) incurred any liability or obligation, direct or
contingent, other than liabilities and obligations which were incurred
in the ordinary course of business, (iii) entered into any transaction
not in the ordinary course of business or (iv) declared or paid any
dividend on its capital stock (other than the dividend declared by the
Board of Directors on January 26, 1999).
(t) The Company (i) makes and keeps accurate books and records
and (ii) maintains internal accounting controls which provide reasonable
assurance that (A) transactions are executed in accordance with
management's authorization, (B) transactions are recorded as necessary
to permit preparation of its financial statements and to maintain
accountability for its assets, (C) access to its assets is permitted
only in accordance with management's authorization and (D) the reported
accountability for its assets is compared with existing assets at
reasonable intervals.
(u) Neither the Company nor any of its subsidiaries, nor any
director, officer, agent, employee or other person associated with or
acting on behalf of the Company or any of its subsidiaries, has used any
corporate funds for any unlawful contribution, gift, entertainment or
other unlawful expense relating to political activity; made any direct
or indirect unlawful payment to any foreign or domestic government
official or employee from corporate funds; violated or is in violation
of any provision of the Foreign Corrupt Practices Act of 1977; or made
any bribe, rebate, payoff, influence payment, kickback or other unlawful
payment.
(v) Except as disclosed in the Prospectus, there has been no
storage, disposal, generation, manufacture, refinement, transportation,
handling or treatment of toxic wastes, medical wastes, hazardous wastes
or hazardous substances by the Company or any of its subsidiaries (or,
to the knowledge of the Company, any of their predecessors in interest)
at, upon or from any of the property now or previously owned or leased
by the Company or its subsidiaries in violation of any applicable law,
ordinance, rule, regulation,
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order, judgment, decree or permit or which would require remedial action
under any applicable law, ordinance, rule, regulation, order, judgment,
decree or permit, except for any violation or remedial action which
would not have, or could not be reasonably likely to have, singularly or
in the aggregate with all such violations and remedial actions, a
Material Adverse Effect; except as disclosed in the Prospectus, there
has been no material spill, discharge, leak, emission, injection,
escape, dumping or release of any kind onto such property or into the
environment surrounding such property of any toxic wastes, medical
wastes, solid wastes, hazardous wastes or hazardous substances due to or
caused by the Company or any of its subsidiaries or with respect to
which the Company or any of its subsidiaries have knowledge, except for
any such spill, discharge, leak, emission, injection, escape, dumping or
release which would not have or would not be reasonably likely to have,
singularly or in the aggregate with all such spills, discharges, leaks,
emissions, injections, escapes, dumpings and releases, a Material
Adverse Effect; and the terms "hazardous wastes," "toxic wastes,"
"hazardous substances" and "medical wastes" shall have the meanings
specified in any applicable local, state, federal and foreign laws or
regulations with respect to environmental protection.
(w) The Company is not, and upon the issuance and sale of the
Securities as herein contemplated and the application of the net
proceeds therefrom as described in the Prospectus will not be, an
"investment company" or an entity "controlled" by an "investment
company" as such terms are defined in the Investment Company Act of
1940, as amended (the "1940 Act").
2. Purchase of the Securities by the Underwriters. Subject to
the terms and conditions and in reliance upon the representations and warranties
herein set forth, the Company agrees to sell to each Underwriter, severally and
not jointly, and each Underwriter agrees, severally and not jointly, to purchase
from the Company, at the purchase price and on the other terms set forth on the
cover page of, and under the caption "Underwriting" in, the Prospectus, the
principal amount of the Securities set forth opposite its name in Schedule I
hereto.
3. Conditions of the Company's Obligations. The Company shall
not be obligated to deliver any Securities except upon payment for all
Securities to be purchased pursuant to this Agreement as hereinafter provided.
4. Defaulting Underwriters. If any Underwriter defaults in the
performance of its obligations under this Agreement, the remaining
non-defaulting Underwriters, as the case may be, shall be obligated to purchase
the Securities which the defaulting Underwriter agreed but failed to purchase in
the respective proportions which the principal amount of Securities set forth in
Schedule I hereto to be purchased by each remaining non-defaulting Underwriter
set forth therein bears to the aggregate principal amount of Securities set
forth therein to be purchased by all the remaining non-defaulting Underwriters;
provided that the remaining non-defaulting Underwriters shall not be obligated
to purchase any Securities if the aggregate principal amount of Securities which
the defaulting Underwriter or Underwriters agreed but failed to purchase exceeds
9.09% of the total principal amount of Securities, and any remaining
non-defaulting Underwriter shall not be obligated to purchase more than 110% of
the principal amount of
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Securities set forth in Schedule I hereto to be purchased by it. If the
foregoing maximums are exceeded, the remaining non-defaulting Underwriters, or
those other underwriters satisfactory to the remaining non-defaulting
Underwriters who so agree, shall have the right, but shall not be obligated, to
purchase, in such proportion as may be agreed upon among them, all the
Securities. If the remaining Underwriters or other underwriters satisfactory to
the remaining non-defaulting Underwriters do not elect to purchase the
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase, this Agreement shall terminate without liability on the part of any
non-defaulting Underwriter or the Company, except that the Company will continue
to be liable for the payment of expenses as set forth in Paragraph 6(j) hereof.
Nothing contained in this Paragraph 4 shall relieve a defaulting
Underwriter of any liability it may have to the Company for damages caused by
its default. If other underwriters are obligated or agree to purchase the
Securities of a defaulting or withdrawing Underwriter, either the remaining
non-defaulting Underwriters or the Company may postpone the Delivery Date for up
to seven full business days in order to effect any changes that in the opinion
of counsel for the Company or counsel for the Underwriters may be necessary in
the Registration Statement, the Prospectus or in any other document or
arrangement.
5. Delivery and Payment for the Securities. Delivery of and payment
for the Securities shall be made at the offices of Latham & Watkins, 885 Third
Avenue, New York, New York at 9:00 a.m. New York City time on February 17, 1999
or such other date as may be agreed to in writing by the Company and the
Underwriters. This date and time are sometimes referred to as the "Delivery
Date." On the Delivery Date the Company shall deliver the Securities to The
Depository Trust Company, on behalf of the Underwriters, for the account of each
Underwriter against payment to the Company by wire transfer of immediately
available funds to a bank account designated by the Company. Time shall be of
the essence, and delivery at the time and place specified pursuant to this
Agreement is a further condition of the obligation of each Underwriter
hereunder. Upon delivery, the Securities shall be in registered form and in such
denominations as may be set forth in the Indenture. The certificates
representing the Securities shall be registered in the name of Cede & Co. and
shall be made available for inspection by the Underwriters in New York, New York
not later than 2:00 P.M., local time, on the business day prior to the Delivery
Date.
6. Further Agreements of the Company. The Company agrees:
(a) To furnish promptly to the Representative and to counsel for
the Underwriters a conformed copy of each Registration Statement as
originally filed and each amendment or supplement thereto filed prior to
the date hereof or relating to or covering the Securities, and a copy of
each Prospectus filed with the Commission, including all documents
incorporated therein by reference and all consents and exhibits filed
therewith;
(b) To deliver promptly to the Underwriters such reasonable
number of the following documents as the Underwriters may request: (i)
conformed copies of the Registration Statement (excluding exhibits other
than the computation of the ratio of
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earnings to fixed charges, the Indenture and this Agreement), (ii) the
Prospectus and (iii) any documents incorporated by reference in the
Prospectus;
(c) During such period following the date hereof as, in the
opinion of counsel for the Underwriters, the Prospectus is required by
law to be delivered, to comply with the Act, the Exchange Act, the Trust
Indenture Act and the rules and regulations under each thereof, so as to
permit the completion of the distribution of the Securities as
contemplated in this Agreement and in the Prospectus. If at any time
when a prospectus is required by the Act to be delivered in connection
with sales of the Securities, any event shall occur or condition shall
exist as a result of which it is necessary, in the reasonable opinion of
counsel for the Underwriters or for the Company, to amend the
Registration Statement or amend or supplement the Prospectus in order
that the Prospectus will not include any untrue statements of a material
fact or omit to state a material fact necessary in order to make the
statements therein not misleading in the light of the circumstances
existing at the time it is delivered to a purchaser, or if it shall be
necessary, in the opinion of such counsel, at any such time to amend the
Registration Statement or amend or supplement the Prospectus in order to
comply with the requirements of the Act or the Rules and Regulations,
the Company will promptly prepare and file with the Commission, subject
to paragraph (d) below, such amendment or supplement as may be necessary
to correct such statement or omission or to make the Registration
Statement or the Prospectus comply with such requirements, and the
Company will furnish to the Underwriters such number of copies of such
amendment or supplement as the Underwriters may reasonably request;
(d) Prior to filing with the Commission during the period
referred to in (c) above (i) any amendment or supplement to the
Registration Statement, (ii) the Prospectus or any amendment or
supplement thereto or (iii) any document incorporated by reference in
any of the foregoing or any amendment or supplement to such incorporated
document, to furnish a copy thereof to the Underwriters and to counsel
for the Underwriters and not to file any document that shall have been
disapproved by the Underwriters;
(e) To advise the Underwriters promptly (i) when any
post-effective amendment to the Registration Statement relating to or
covering the Securities becomes effective or any supplement to the
Prospectus shall have been filed, (ii) of any comments from the
Commission or any request or proposed request by the Commission for an
amendment or supplement to the Registration Statement (insofar as the
amendment or supplement relates to or covers the Securities), to the
Prospectus, to any document incorporated by reference in any of the
foregoing or for any additional information, (iii) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or any order directed to the Prospectus or any
document incorporated therein by reference or the initiation or threat
of any stop order proceeding or of any challenge to the accuracy or
adequacy of any document incorporated by reference in any Prospectus,
(iv) of receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any
jurisdiction or the initiation or threat of any proceeding for that
purpose and (v) of the happening of any
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event which makes untrue any statement of a material fact made in the
Registration Statement or the Prospectus or which requires the making of
a change in the Registration Statement or the Prospectus in order to
make any material statement therein not misleading;
(f) If, during the period referred to in (c) above, the
Commission shall issue a stop order suspending the effectiveness of the
Registration Statement, to make every reasonable effort to obtain the
lifting of that order at the earliest possible time;
(g) As soon as practicable, to make generally available to its
security holders and to deliver to the Underwriters an earnings
statement, conforming with the requirements of Section 11(a) of the Act,
covering a period of at least twelve months beginning after the latest
of (i) the most recent effective date of the registration statement
relating to part of the Securities, (ii) the effective date of the most
recent post-effective amendment to the last Registration Statement that
became effective prior to the date of this Agreement and (iii) the date
of the Company's most recent Annual Report on Form 10-K filed with the
Commission prior to the date of this Agreement;
(h) So long as any of the Securities are outstanding, to furnish
to the Underwriters copies of all reports and financial statements
furnished by the Company to each securities exchange on which securities
issued by the Company may be listed pursuant to requirements of or
agreements with such exchange or to the Commission pursuant to the
Exchange Act or any rule or regulation of the Commission thereunder;
(i) To endeavor to qualify the Securities for offer and sale
under the securities laws of such jurisdictions as the Underwriters may
reasonably request and to maintain such qualifications in effect for as
long as may be required for the distribution of the Securities;
provided, however, that the Company shall not be obligated to file any
general consent to service of process or to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject;
(j) To pay the costs incident to the authorization, issuance,
sale and delivery of the Securities and any taxes payable in that
connection; the costs incident to the preparation, printing and filing
under the Act of the Registration Statement and any amendments,
supplements and exhibits thereto; the costs incident to the preparation,
printing and filing of any document and any amendments and exhibits
thereto required to be filed by the Company under the Exchange Act; the
costs of distributing the Registration Statement as originally filed and
each amendment and post-effective amendment thereof (including
exhibits), the Preliminary Prospectus, the Prospectus and any documents
incorporated by reference in any of the foregoing documents; the costs
of printing and distributing this Agreement; the fees and disbursements
of the Company's counsel, accountants and other advisors; the fees and
expenses of the Trustee, including the fees and disbursements of counsel
for the Trustee in connection with the Indenture and the Securities, to
the extent the Trustee or its counsel, as the case may be, requires
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reimbursement thereof; the costs of any filings with the National
Association of Securities Dealers, Inc.; fees paid to rating agencies in
connection with the rating of the Securities the fees and expenses of
qualifying the Securities under the securities laws of the several
jurisdictions as provided in this paragraph and of preparing,
distributing and printing a Blue Sky Memorandum (including reasonable
fees of counsel to the Underwriters); the cost of listing the Securities
on any stock exchange; and all other costs and expenses incident to the
performance of the Company's obligations under this Agreement; provided
that, except as provided in this paragraph and in Paragraph 10 hereof,
the Underwriters shall pay their own costs and expenses, including the
fees and expenses of their counsel, any transfer taxes on the Securities
which they may sell and the expense of advertising any offer of the
Securities made by the Underwriters;
(k) Until the termination of the offering of the Securities, to
timely file all documents, and any amendments to previously filed
documents, required to be filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act; and
(l) During the period beginning on the date hereof and continuing
to the Delivery Date, without the consent of the Underwriters, not to
offer, sell, contract to sell or otherwise dispose of any debt
securities of the Company with maturities longer than one year, other
than the Securities to the Underwriters.
7. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each
Underwriter, its officers and employees and each person, if any, who
controls any Underwriter within the meaning of the Act, from and against
any loss, claim, damage or liability, joint or several, or any action in
respect thereof (including, but not limited to, any loss, claim, damage,
liability or action relating to purchases and sales of Securities), to
which that Underwriter, officer, employee or controlling person may
become subject, under the Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact
contained (A) in any Preliminary Prospectus, the Registration Statement
or the Prospectus, or in any amendment or supplement thereto, or (B) in
any blue sky application or other document prepared or executed by the
Company (or based upon any written information furnished by the Company)
specifically for the purpose of qualifying any or all of the Securities
under the securities laws of any state or other jurisdiction (any such
application, document or information being hereinafter called a "Blue
Sky Application"), or (ii) the omission or alleged omission to state in
any Preliminary Prospectus, the Registration Statement or the
Prospectus, or in any amendment or supplement thereto, or in any Blue
Sky Application any material fact required to be stated therein or
necessary to make the statements therein not misleading, and shall
reimburse each Underwriter and each such officer, employee and
controlling person promptly upon demand for any legal or other expenses
reasonably incurred by that Underwriter, officer, employee or
controlling person in connection with investigating or defending or
preparing to defend against any such loss, claim, damage, liability or
action as such expenses are incurred; provided, however,
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that the Company shall not be liable in any such case to the extent that
any such loss, claim, damage, liability or action arises out of, or is
based upon, any untrue statement or alleged untrue statement or omission
or alleged omission made in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or in any such amendment or supplement, or
in any Blue Sky Application in reliance upon and in conformity with the
written information concerning such Underwriter furnished to the Company
by or on behalf of any Underwriter specifically for inclusion therein
and described in Paragraph 7(e); and provided further that as to any
Preliminary Prospectus this indemnity agreement shall not inure to the
benefit of any Underwriter, its officers or employees or any person
controlling that Underwriter on account of any loss, claim, damage,
liability or action arising from the sale of Securities to any person by
that Underwriter if that Underwriter failed to send or give a copy of
the Prospectus, as the same may be amended or supplemented, to that
person within the time required by the Act, and the untrue statement or
alleged untrue statement of any material fact or omission or alleged
omission to state a material fact in such Preliminary Prospectus was
corrected in the Prospectus, unless such failure resulted from
non-compliance by the Company with Paragraph 6(c). For purposes of the
last proviso to the immediately preceding sentence, the term
"Prospectus" shall not be deemed to include the documents incorporated
therein by reference, and no Underwriter shall be obligated to send or
give any supplement or amendment to any document incorporated by
reference in any Preliminary Prospectus or the Prospectus to any person
other than a person to whom such Underwriter had delivered such
incorporated document or documents in response to a written request
therefor. The foregoing indemnity agreement is in addition to any
liability which the Company may otherwise have to any Underwriter or to
any officer, employee or controlling person of that Underwriter.
(b) Each Underwriter, severally and not jointly, shall indemnify
and hold harmless the Company, its officers and employees, each of its
directors and each person, if any, who controls the Company within the
meaning of the Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which
the Company or any such director, officer or controlling person may
become subject, under the Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact
contained (A) in any Preliminary Prospectus, the Registration Statement
or the Prospectus, or in any amendment or supplement thereto, or (B) in
any Blue Sky Application or (ii) the omission or alleged omission to
state in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or in any amendment or supplement thereto, or in any Blue
Sky Application any material fact required to be stated therein or
necessary to make the statements therein not misleading, but in each
case only to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and
in conformity with the written information concerning such Underwriter
furnished to the Company by or on behalf of that Underwriter
specifically for inclusion therein and described in Paragraph 7(e), and
shall reimburse the Company and any such director, officer or
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controlling person for any legal or other expenses reasonably incurred
by the Company or any such director, officer or controlling person in
connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such
expenses are incurred. The foregoing indemnity agreement is in addition
to any liability which any Underwriter may otherwise have to the Company
or any such director, officer or controlling person.
(c) Promptly after receipt by an indemnified party under this
Paragraph 7 of notice of any claim or the commencement of any action,
the indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under this Paragraph 7, notify the
indemnifying party in writing of the claim or the commencement of that
action; provided, however, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have under
this Paragraph 7 except to the extent it has been materially prejudiced
by such failure and, provided further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may
have to an indemnified party otherwise than under this Paragraph 7. If
any such claim or action shall be brought against an indemnified party,
and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that
it wishes, jointly with any other similarly notified indemnifying party,
to assume the defense thereof with counsel satisfactory to the
indemnified party. After notice from the indemnifying party to the
indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified
party under this Paragraph 7 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the
defense thereof other than reasonable costs of investigation; provided,
however, that any indemnified party shall have the right to employ
separate counsel in any such action and to participate in the defense
thereof but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless (i) the employment thereof has
been specifically authorized by the indemnifying party in writing, (ii)
such indemnified party shall have been advised by such counsel that
there may be one or more legal defenses available to it which are
different from or additional to those available to the indemnifying
party and in the reasonable judgment of such counsel it is advisable for
such indemnified party to employ separate counsel or (iii) the
indemnifying party has failed to assume the defense of such action and
employ counsel reasonably satisfactory to the indemnified party, in
which case, if such indemnified party notifies the indemnifying party in
writing that it elects to employ separate counsel at the expense of the
indemnifying party, the indemnifying party shall not have the right to
assume the defense of such action on behalf of such indemnified party,
it being understood, however, that the indemnifying party shall not, in
connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the
same general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys at any
time for all such indemnified parties, which firm shall be designated in
writing by the Underwriters, if the indemnified parties under this
Paragraph 7 consist of any Underwriter or any of their respective
officers, employees or controlling persons, or by the Company, if the
indemnified parties under this Paragraph consist of the Company or any
of the Company's directors, officers, employees or controlling persons.
No indemnifying party shall (i) without the prior written consent of the
indemnified parties (which consent shall
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<PAGE>
not be unreasonably withheld), settle or compromise or consent to the
entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified
parties are actual or potential parties to such claim or action) unless
such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim,
action, suit or proceeding, or (ii) be liable for any settlement of any
such action effected without its written consent (which consent shall
not be unreasonably withheld), but if settled with its written consent
or if there be a final judgment of the plaintiff in any such action, the
indemnifying party agrees to indemnify and hold harmless any indemnified
party from and against any loss or liability by reason of such
settlement or judgment.
(d) If the indemnification provided for in this Paragraph 7 shall
for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Paragraph 7(a) or 7(b) in respect of any loss,
claim, damage or liability, or any action in respect thereof, referred
to therein, then each indemnifying party shall, in lieu of indemnifying
such indemnified party, contribute to the amount paid or payable by such
indemnified party as a result of such loss, claim, damage or liability,
or action in respect thereof, (i) in such proportion as shall be
appropriate to reflect the relative benefits received by the Company on
the one hand and the Underwriters on the other from the offering of the
Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above
but also the relative fault of the Company on the one hand and the
Underwriters on the other with respect to the statements or omissions
which resulted in such loss, claim, damage or liability, or action in
respect thereof, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters on the other with respect to such offering shall be deemed
to be in the same proportion as the total net proceeds from the offering
of the Securities purchased under this Agreement (before deducting
expenses) received by the Company, on the one hand, and the total
underwriting discounts and commissions received by the Underwriters with
respect to the Securities purchased under this Agreement, on the other
hand, bear to the total gross proceeds from the offering of the
Securities under this Agreement, in each case as set forth in the table
on the cover page of the Prospectus. The relative fault shall be
determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company or the
Underwriters, the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriters agree that it
would not be just and equitable if contributions pursuant to this
Paragraph 7(d) were to be determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take into account the
equitable considerations referred to herein. The amount paid or payable
by an indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this
Paragraph 7(d) shall be deemed to include, for purposes of this
Paragraph 7(d), any legal or other expenses reasonably incurred by such
14
<PAGE>
indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Paragraph 7(d),
no Underwriter shall be required to contribute any amount in excess of
the amount by which the total price at which the Securities underwritten
by it and distributed to the public was offered to the public exceeds
the amount of any damages which such Underwriter has otherwise paid or
become liable to pay by reason of any untrue or alleged untrue statement
or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall
be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to
contribute as provided in this Paragraph 7(d) are several in proportion
to their respective underwriting obligations and not joint.
(e) The Underwriters severally confirm and the Company
acknowledges that the statements with respect to the public offering of
the Securities set forth on the cover page of, and under the caption
"Underwriting" in, the Prospectus are correct and constitute the only
information concerning such Underwriters furnished in writing to the
Company by or on behalf of the Underwriters specifically for inclusion
in the Registration Statement and the Prospectus.
8. Termination.
(a) The obligations of the Underwriters hereunder may be
terminated by the Underwriters by notice given to and received by the
Company prior to delivery of and payment for the Securities if, prior to
that time, any of the events described in Paragraphs 9(k), 9(l) or 9(m)
hereof shall have occurred or if the Underwriters shall decline to
purchase the Securities for any reason permitted under this Agreement.
(b) If this Agreement is terminated pursuant to this Paragraph 8,
such termination shall be without liability of any party to any other
party except as provided in Paragraph 10 hereof, and provided further
that Paragraphs 1 and 7 shall survive such termination and remain in
full force and effect.
9. Conditions of the Underwriters' Obligations . The respective
obligations of the Underwriters under this Agreement with respect to the
Securities are subject to the accuracy, on the date hereof and on the
Delivery Date, of the representations and warranties of the Company
contained herein, to performance by the Company of its obligations
hereunder, and to each of the following additional terms and conditions.
(a) At or before the Delivery Date, no stop order suspending the
effectiveness of any Registration Statement nor any order directed to
any document incorporated by reference in any Prospectus shall have been
issued and prior to that time no stop order proceeding shall have been
initiated or threatened by the Commission and no challenge shall have
been made to the accuracy or adequacy of any document incorporated by
reference in any Prospectus; any request of the Commission for inclusion
of additional information in the Registration Statement or the
Prospectus or otherwise shall have been
15
<PAGE>
complied with; and after the date hereof the Company shall not have
filed with the Commission any amendment or supplement to the
Registration Statement or the Prospectus (or any document incorporated
by reference therein) that shall have been disapproved by the
Underwriters.
(b) No Underwriter shall have discovered and disclosed to the
Company on or prior to the Delivery Date that the Registration Statement
or the Prospectus contains an untrue statement of a fact which, in the
opinion of counsel for the Underwriters, is material or omits to state a
fact which, in the opinion of such counsel, is material and is required
to be stated therein or is necessary to make the statements therein not
misleading.
(c) All corporate proceedings and other legal matters incident to
the authorization, form and validity of this Agreement, the Securities
and the Indenture and the Registration Statement, the Prospectus and all
other legal matters relating to this Agreement and the transactions
contemplated hereby shall be satisfactory in all respects to counsel for
the Underwriters, and the Company shall have furnished to such counsel
all documents and information that such counsel may reasonably request
to enable it to pass upon such matters.
(d) Thomas M. Lemberg, Esq., Senior Vice President, General
Counsel and Secretary of the Company, shall have furnished to the
Underwriters his written opinion addressed to the Underwriters and dated
the Delivery Date, in form and substance reasonably satisfactory to the
Underwriters, to the effect that:
(i) The Company is duly qualified to do business and is in
good standing as a foreign corporation in all jurisdictions in
which its ownership of property or the conduct of its business
requires such qualification (except where the failure to so
qualify would not have a Material Adverse Effect), and has all
power and authority necessary to own its properties and conduct
the business in which it is engaged as described in the
Prospectus;
(ii) No order issued by the Commission directed to any
document incorporated by reference in any Prospectus has been
issued and, to the knowledge of such counsel, no challenge has
been made by the Commission to the accuracy or adequacy of any
such document;
(iii) Such counsel does not know of any litigation or any
governmental proceeding pending or threatened against the Company
which would affect the subject matter of this Agreement or is
required to be disclosed in the Prospectus (including the
documents incorporated by reference therein) which is not
disclosed and correctly summarized therein;
(iv) To the best of such counsel's knowledge, the Company
is not in violation of its corporate charter or by-laws;
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<PAGE>
(v) To the best of such counsel's knowledge, except as
would not, singly or in the aggregate, have a Material Adverse
Effect, the issue and sale of the Securities being delivered on
such Delivery Date by the Company and the compliance by the
Company with all of the provisions of this Agreement and the
Indenture and the consummation of the transactions contemplated
hereby and thereby will not result in a breach or violation of
any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which the
Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to which any of
the property or assets of the Company or any of its subsidiaries
is subject, nor will such actions result in any violation of the
provisions of the charter or by-laws of the Company or any of its
subsidiaries or any statute or any order, rule or regulation
known to such counsel of any court or governmental agency or body
having jurisdiction over the Company or any of its subsidiaries
or any of their properties or assets; and
(vi) To the best of such counsel's knowledge, there are no
contracts, agreements or understandings between the Company and
any person granting such person the right to require the Company
to file a registration statement under the Act with respect to
any securities of the Company owned or to be owned by such person
or to require the Company to include such securities in the
securities registered pursuant to the Registration Statement or
in any securities being registered pursuant to any other
registration statement filed by the Company under the Act.
In giving such opinion, such counsel need not express any opinion
regarding any order, consent or other authorization or approval which
may be legally required pursuant to any state securities law.
In rendering such opinion, such counsel may: (i) state that his
opinion is limited to matters governed by the federal laws of the United
States of America, the laws of the District of Columbia and the General
Corporation Law of the State of Delaware and that such counsel is not
admitted in the State of Delaware; and (ii) rely (to the extent such
counsel deems proper and specifies in his opinion), as to matters
involving the application of the laws of other jurisdictions upon the
opinion of other counsel of good standing, provided that such other
counsel is satisfactory to counsel for the Underwriters and furnishes a
copy of its opinion to the Underwriters.
(e) Simpson Thacher & Bartlett, counsel for the Company, shall
have furnished to the Underwriters its written opinion addressed to the
Underwriters and dated the Delivery Date, in form and substance
reasonably satisfactory to the Underwriters, to the effect that:
(i) The Company has been duly incorporated and are validly
existing and in good standing as a corporation under the laws of
its the State of Delaware;
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<PAGE>
(ii) The Indenture has been duly authorized, executed and
delivered by the Company and duly qualified under the Trust
Indenture Act and, assuming that the Indenture is a valid and
binding agreement of the Trustee, constitutes a valid and legally
binding instrument of the Company enforceable against the Company
in accordance with its terms;
(iii) The Securities have been duly authorized, executed
and issued by the Company and, assuming due authentication
thereof by the Trustee and upon payment and delivery in
accordance with this Agreement, will constitute valid and legally
binding obligations of the Company enforceable in accordance with
their terms and entitled to the benefits of the Indenture;
(iv) The issue and sale of the Securities by the Company
and the compliance by the Company with all of the provisions of
this Agreement will not breach or result in a default under any
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument identified on the annexed schedule
furnished to such counsel by the Company, nor will such action
violate the Restated Certificate of Incorporation or By-laws of
the Company or any Federal or New York statute or the Delaware
General Corporation Law or any rule or regulation that has been
issued pursuant to any Federal or New York statute or the
Delaware General Corporation Law or any order known to such
counsel issued pursuant to any Federal or New York statute or the
Delaware General Corporation Law by any court or governmental
agency or body or court having jurisdiction over the Company or
any of its subsidiaries or any of their properties;
(v) No consent, approval, authorization, order,
registration or qualification of or with any Federal or New York
governmental agency or body or any Delaware governmental agency
or body acting pursuant to the Delaware General Corporation Law
or, to our knowledge, any Federal or New York court or any
Delaware court acting pursuant to the Delaware General
Corporation Law is required for the issue and sale of the
Securities by the Company and the compliance by the Company with
all of the provisions of the Underwriting Agreement, except for
such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue
Sky laws in connection with the purchase and distribution of the
Securities by the Underwriters;
(vi) The statements made in the Prospectus under the
caption "Description of Debt Securities" or "Description of
Notes," insofar as they purport to constitute summaries of the
documents referred to therein, constitute accurate summaries of
the terms of such documents in all material respects;
(vii) The Registration Statement has become effective
under the Act and the Prospectus was filed pursuant to Rule
424(b) of the Rules and Regulations and, to our knowledge, no
stop order suspending the effectiveness of the
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<PAGE>
Registration Statement has been issued or proceeding for that
purpose has been instituted or threatened by the Commission;
(viii) This Agreement has been duly authorized, executed
and delivered by the Company;
(ix) The Company is not an "investment company" or an
entity "controlled" by an "investment company," as such terms are
defined in the 1940 Act; and
(x) The statements contained in the Prospectus under the
caption "Certain U.S. Federal Income Tax Consequences to Non-U.S.
Persons," insofar as they purport to constitute summaries of
matters of United States federal tax law and regulations or legal
conclusions with respect thereto constitute accurate summaries of
the matters described therein in all material respects.
Such counsel may state that the opinions set forth in paragraphs (ii)
and (iii) above are subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.
In rendering such opinion, such counsel may state that its opinion is
limited to matters governed by the federal laws of the United States of America,
the laws of the State of New York and the General Corporation Law of the State
of Delaware and that such counsel is not admitted in the State of Delaware.
Such counsel shall also have furnished to the Underwriters a written
statement, addressed to the Underwriters and dated the Delivery Date, in form
and substance satisfactory to the Underwriters, to the effect that (1) such
counsel has acted as counsel to the Company in connection with the preparation
of the Second Registration Statement and the offer and sale of the Securities
(although the Company is also represented by its General Counsel and, with
respect to certain other matters, by other outside counsel); (2) in the course
of the preparation by the Company of the Second Registration Statement and the
Prospectus, such counsel participated in conferences with certain officers and
employees of the Company, with representatives of the Company's independent
auditors and with counsel to the Company; (3) prior to the Company's filing with
the Commission documents under the Exchange Act and incorporated by reference in
the Prospectus, such counsel reviewed such documents; and (4) based on (a) such
counsel's examination of the Registration Statement, the Prospectus and the
documents filed by the Company under the Exchange Act and incorporated by
reference in the Prospectus, (b) such counsel's investigation made in connection
with the preparation of the Second Registration Statement and the Prospectus
(excluding the documents filed by the Company under the Exchange Act and
incorporated by reference in the Prospectus) and (c) such counsel's
participation in the conferences referred to in clause (2) of this paragraph
above, (i) that such counsel is of the opinion that the Registration Statement,
as of the effective date of the Second
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Registration Statement, and the Prospectus, as of its issue date, complied as to
form in all material respects with the requirements of the Act and the Trust
Indenture Act and the applicable rules and regulations of the Commission
thereunder, and each document incorporated by reference in the Prospectus as
filed under the Exchange Act complied as to form when filed in all material
respects with the requirements of the Exchange Act and the applicable rules and
regulations of the Commission thereunder, except that in each case no opinion
need be expressed as to the financial statements and other financial data
contained or incorporated by reference therein, and (ii) such counsel has no
reason to believe that (I) the Second Registration Statement as of its effective
date, contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary in order to make the
statements therein not misleading or that the Prospectus, as of its issue date
contained, and as of the Delivery Date contains, any untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading or (II) any document
incorporated by reference in the Prospectus when they were filed with the
Commission contained any untrue statement of a material fact or omitted to state
any material fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading, except that with
respect to each of clauses (I) and (II) above, such counsel may state that it
expresses no belief with respect to the financial statements or other financial
data contained in, incorporated by reference in, or deemed to be incorporated by
reference in the Registration Statement, the Prospectus or documents filed by
the Company under the Exchange Act and incorporated by reference in the
Prospectus. The foregoing opinion and statement may be qualified by a statement
to the effect that such counsel has not independently verified the accuracy,
completeness or fairness of the statements made or included in the Registration
Statements, the Prospectus or the documents filed by the Company under the
Exchange Act and takes no responsibility therefor, except as and to the extent
set forth in paragraphs (vi) and (x) above.
(f) Boekel de Neree, Special Netherlands Counsel to the Company,
shall have furnished to the Underwriters its written opinion addressed
to the Underwriters and dated the Delivery Date, in form and substance
reasonably satisfactory to the Underwriters, to the effect that:
(i) The Significant Subsidiary has been duly incorporated
and is validly existing as a private limited liability company
incorporated under the laws of the Netherlands and has the
corporate power and authority to carry on the business described
in the objects clause of its articles of association.
(g) The Underwriters shall have received from Latham & Watkins,
counsel for the Underwriters, such opinion or opinions, dated such
Delivery Date, with respect to the issuance and sale of the Securities,
the Registration Statement, the Prospectus and other related matters as
the Underwriters may reasonably require, and the Company shall have
furnished to such counsel such documents as they reasonably request for
the purpose of enabling them to pass upon such matters.
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<PAGE>
(h) The Company shall have furnished to the Underwriters a
certificate, dated the Delivery Date, of its Chairman of the Board, its
President or a Vice President and its chief financial officer stating
that:
(i) The representations, warranties and agreements of the
Company in Paragraph 1 are true and correct as of the Delivery
Date; the Company has complied with all its agreements contained
herein; and the conditions set forth in Paragraph 9(a) have been
fulfilled;
(ii) (A) Except as described in or contemplated by the
Registration Statement and the Prospectus, neither the Company
nor any of its subsidiaries has sustained, any loss or
interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any
labor dispute or court or governmental action, order or decree,
and (B) there has not been any change, or any development
involving a prospective change, in or affecting the general
affairs, management, financial position, stockholders' equity or
results of operations of the Company and its subsidiaries,
otherwise than as described in or contemplated by the Prospectus;
and
(iii) They have carefully examined the Registration
Statement and the Prospectus and, in their opinion (A) the
Registration Statement, as of the effective date of the Second
Registration Statement, and the Prospectus, as of its issue date
and as of the Delivery Date, did not include any untrue statement
of a material fact and did not omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, and (B) since the effective date of the
Second Registration Statement, no event has occurred which should
have been set forth in a supplement or amendment to either the
Registration Statement or the Prospectus.
(i) At the time of execution of this Agreement, the Underwriters
shall have received from KPMG Peat Marwick LLP a letter, in form and
substance satisfactory to the Underwriters, addressed to the
Underwriters and dated the date hereof (i) confirming that they are
independent public accountants within the meaning of the Securities Act
and are in compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission, (ii) stating, as of the date hereof (or, with respect to
matters involving changes or developments since the respective dates as
of which specified financial information is given in the Prospectus, as
of a date not more than five days prior to the date hereof), the
conclusions and findings of such firm with respect to the financial
information and other matters ordinarily covered by accountants'
"comfort letters" to underwriters in connection with registered public
offerings.
(j) With respect to the letter of KPMG Peat Marwick LLP referred
to in the preceding paragraph and delivered to the Underwriters
concurrently with the execution of this Agreement (the "initial
letter"), the Company shall have furnished to the
21
<PAGE>
Underwriters a letter (the "bring-down letter") of such accountants,
addressed to the Underwriters and dated such Delivery Date (i)
confirming that they are independent public accountants within the
meaning of the Act and are in compliance with the applicable
requirements relating to the qualification of accountants under Rule
2-01 of Regulation S-X of the Commission, (ii) stating, as of the date
of the bring-down letter (or, with respect to matters involving changes
or developments since the respective dates as of which specified
financial information is given in the Prospectus, as of a date not more
than five days prior to the date of the bring-down letter), the
conclusions and findings of such firm with respect to the financial
information and other matters covered by the initial letter and (iii)
confirming in all material respects the conclusions and findings set
forth in the initial letter.
(k) (i) Neither the Company nor the Significant Subsidiary shall
have sustained, except as described in or contemplated by the
Registration Statement and the Prospectus, any loss or interference with
its business from fire, explosion, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, or (ii) there shall not have been
any change in the capital stock or long-term debt of the Company or any
of its subsidiaries or any change, or any development involving a
prospective change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations of the
Company and the Significant Subsidiary, otherwise than as described in
or contemplated by the Prospectus, the effect of which, in any such case
described in clause (i) or (ii), is, in the judgment of the
Underwriters, so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Securities on the terms and in the manner contemplated in the
Prospectus.
(l) Subsequent to the execution and delivery of this Agreement,
(i) no downgrading shall have occurred in the rating accorded the
Company's debt securities by any "nationally recognized statistical
rating organization," as that term is defined by the Commission for
purposes of Rule 436(g)(2) of the Rules and Regulations and (ii) no such
organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating
of any of the Company's debt securities.
(m) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange or the American
Stock Exchange or in the over-the-counter market, or trading in any
securities of the Company on any exchange or in the over-the-counter
market, shall have been suspended or minimum prices shall have been
established on any such exchange or such market by the Commission, by
such exchange or by any other regulatory body or governmental authority
having jurisdiction, (ii) a banking moratorium shall have been declared
by federal or state authorities, (iii) the United States shall have
become engaged in hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have been a
declaration of a national emergency or war by the United States or (iv)
there shall have occurred such a material adverse change in general
economic, political or financial conditions (or the effect of
international
22
<PAGE>
conditions on the financial markets in the United States shall be such)
as to make it, in the judgment of a majority in interest of the several
Underwriters, impracticable or inadvisable to proceed with the public
offering or delivery of the Securities on the terms and in the manner
contemplated in the Prospectus.
All opinions, letters, evidence and certificates mentioned above
or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in form and substance
satisfactory to counsel for the Underwriters.
10. Reimbursement of Underwriters' Expenses. If the Company shall
fail to tender the Securities for delivery to the Underwriters by reason of any
failure, refusal or inability on the part of the Company to perform any
agreement on its part to be performed, or because any other condition of the
Underwriters' obligations hereunder required to be fulfilled by the Company is
not fulfilled, the Company will reimburse the Underwriters for all reasonable
out-of-pocket expenses (including fees and disbursements of counsel) incurred by
the Underwriters in connection with this Agreement and the proposed purchase of
the Securities, and upon demand the Company shall pay the full amount thereof to
the Underwriters. If this Agreement is terminated pursuant to Paragraph 4 by
reason of the default of one or more Underwriters, the Company shall not be
obligated to reimburse any defaulting Underwriter on account of those expenses.
11. Notices, etc. The Company shall be entitled to act and rely
upon any request, consent, notice or agreement by, or on behalf of, the
Underwriters. Any notice by the Company to the Underwriters shall be sufficient
if given in writing or by facsimile to Lehman Brothers Inc., Three World
Financial Center, New York, New York 10285, Attention: Syndicate Department
(Fax: 212-526-6588), with a copy, in the case of any notice pursuant to
Paragraph 7(d), to the Director of Litigation, Office of the General Counsel,
Lehman Brothers Inc., 3 World Financial Center, 10th Floor, New York, NY 10285.
Any notice by the Underwriters to the Company shall be sufficient if given in
writing or by facsimile addressed to the Company at 784 Memorial Drive,
Cambridge, Massachusetts 02139 (Fax:781-386-3228), Attention: Treasurer.
12. Persons Entitled to the Benefit of this Agreement. This Agreement
shall be binding upon the Underwriters, the Company, and their respective
successors. This Agreement and the terms and provisions hereof are for the sole
benefit of only those persons, except that (a) the representations, warranties,
indemnities and agreements of the Company contained in this Agreement shall also
be deemed to be for the benefit of the person or persons, if any, who control
any Underwriter within the meaning of Section 15 of the Act, and (b) the
indemnity agreement of the Underwriters contained in Paragraph 7 hereof shall be
deemed to be for the benefit of directors of the Company, officers of the
Company who have signed any Registration Statement and any person controlling
the Company within the meaning of Section 15 of the Act. Nothing in this
Agreement is intended or shall be construed to give any person, other than the
persons referred to in this Paragraph, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision contained herein.
23
<PAGE>
13. Survival. The respective indemnities, representations, warranties
and agreements of the Company and the Underwriters contained in this Agreement
or made by or on behalf on them, respectively, pursuant to this Agreement, shall
survive the delivery of and payment for the Securities and shall remain in full
force and effect, regardless of any investigation made by or on behalf of any of
them or any person controlling any of them.
14. Certain Definitions. For purposes of this Agreement, (a)
"business day" means any day on which the New York Stock Exchange, Inc. is open
for trading and (b) "subsidiary" has the meaning set forth in Rule 405 of the
Rules and Regulations.
15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF NEW YORK.
16. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
17. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
[The rest of this page is left blank intentionally; the signature page follows.]
24
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this Agreement shall represent a binding agreement among the Company and the
several Underwriters.
Very truly yours,
POLAROID CORPORATION
By: /s/ RALPH M. NORWOOD
---------------------------------
Name: Ralph M. Norwood
Title: Vice President and
Treasurer
The foregoing Agreement is hereby
confirmed and accepted as of the date first
above written.
LEHMAN BROTHERS INC. on behalf of
the Underwriters named in Schedule 1 hereto
By:/s/ MICHAEL A. GOLDBERG
---------------------------------
Name: Michael A. Goldberg
Title: Vice President
25
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
Principal
Amount of
Name of Underwriter Securities
- -------------------------------------------------------------- ------------
<S> <C>
Lehman Brothers Inc........................................... $116,875,000
J.P. Morgan Securities Inc.................................... $116,875,000
ABN AMRO Incorporated......................................... $13,750,000
Deutsche Bank Securities Inc.................................. $13,750,000
PNC Capital Markets, Inc...................................... $13,750,000
------------
Total $275,000,000
============
</TABLE>
FIRST SUPPLEMENTAL INDENTURE
FIRST SUPPLEMENTAL INDENTURE, dated as of February 17, 1999 (the
"Supplemental Indenture"), by and between Polaroid Corporation, a corporation
duly organized and existing under the laws of the State of Delaware (the
"Company"), having its principal office at 784 Memorial Drive, Cambridge,
Massachusetts 02139 and State Street Bank and Trust Company, as Trustee (the
"Trustee").
WITNESSETH:
WHEREAS, the Company and the Trustee executed and delivered an
Indenture, dated as of January 9, 1997 (the "Indenture"), to provide for the
issuance by the Company from time to time of debt securities evidencing its
unsecured indebtedness;
WHEREAS, the issuance and sale of $350,000,000 aggregate
principal amount of a series of the Company's debt securities (the "Notes") have
been authorized by resolutions adopted by the Board of Directors of the Company
on September 17, 1998, by the resolutions of the Pricing Committee of the Board
of Directors adopted on February 11, 1999 and by the Authorized Officer's
Certificate dated February 17, 1999;
WHEREAS, the Company desires to issue and sell $275,000,000
aggregate principal amount of the Notes on the date hereof, whose terms have
been established by the Authorized Officer's Certificate dated February 17, 1999
pursuant to Section 2.2(a) of the Indenture.
WHEREAS, the Company desires to enter into a supplemental
indenture pursuant to Sections 2.2(b) and 10.1(2), (3), (5) and (6) of the
Indenture and to provide for the form of the Notes in accordance with Section
4.2 of the Indenture; and
NOW, THEREFORE, for and in consideration of the premises stated
herein and the purchase of the Notes by the Holders thereof, the parties hereto
hereby enter into this Supplemental Indenture, for the equal and proportionate
benefit of all Holders of Notes, as follows:
ARTICLE I.
TERMS
SECTION 1.01. TERMS OF NOTES. The Notes shall have the following terms
and provisions, in addition to or superseding those stated in the Indenture, as
expressly stated below:
(1) The Notes shall constitute a series of Securities having the title
"11 1/2% Notes due 2006."
(2) The maximum aggregate principal amount of the Notes that may be
authenticated and delivered under the Indenture (except for Notes authenticated
and delivered upon registration of, transfer of, or in exchange for, or in lieu
of, other Notes pursuant to Sections 4.3, 4.4, 4.5,
<PAGE>
10.6 or 12.7 of the Indenture or any Securities that, pursuant to Section 4.2,
are deemed never to have been authenticated or delivered thereunder) shall be
$350,000,000 of which $275,000,000 aggregate principal amount shall be issued
and sold on the Issue Date.
(3) The entire outstanding principal of the Notes shall be payable on
February 15, 2006 (the "Stated Maturity Date").
(4) (a) The rate at which the Notes shall bear interest shall be 11 1/2%
per annum, calculated on the basis of a 360-day year of twelve 30-day months;
(b) interest shall accrue on the Notes from the Issue Date or, if interest has
already been paid, from the date to which it was most recently paid or duly
provided for until the principal amount thereof is paid or made available for
payment; (c) the Interest Payment Dates for the Notes on which interest will be
payable shall be February 15 and August 15 of each year, beginning August 15,
1999; the Regular Record Dates for the interest payable on the Notes on any
Interest Payment Date shall be January 31 with respect to the February 15
Interest Payment Date and July 31 with respect to the August 15 Interest Payment
Date; (d) interest on overdue principal and premium, if any, from time to time,
shall be at the rate borne by the Notes; interest on overdue installments of
interest from time to time, shall be at the same rate, to the extent lawful.
(5) Payment of the principal of, premium, if any, and interest on the
Notes shall be payable at the office or agency of the Company to be maintained
in the Borough of Manhattan in the City of New York, which initially shall be
the office or agency of the Paying Agent and Registrar in the Borough of
Manhattan in the City of New York. In addition, payment of interest on any Note
may, at the option of the Company, be made by check mailed to the address of the
Person in whose name the Note is registered at the close of business on the
Regular Record Date. Notwithstanding the above, all payments of principal, and
premium, if any, and interest on the Notes to Holders of Notes which have given
wire instructions to the Company or the Paying Agent at least ten Business Days
prior to the applicable payment date shall be made by wire transfer to an
account maintained by such Holder entitled thereto as specified by such Holder
in the instructions.
(6) (a) The Company may redeem the Notes, in whole or in part, at any
time at its option upon not less than 30 nor more than 60 days prior notice
mailed by first-class mail to each Holder's registered address, at a redemption
price equal to 100% of the principal amount thereof plus the Applicable Premium
as of, and accrued and unpaid interest to, the date of redemption (the
"Redemption Date") as listed in the Company's Security Register.
(b) At any time prior to February 15, 2002, the Company may on
any one or more occasions redeem up to 35% of the aggregate principal amount of
Notes issued under this Supplemental Indenture at a redemption price of 111.500%
of the principal amount thereof, plus accrued and unpaid interest to the
Redemption Date, with the net cash proceeds of one or more Equity Offerings;
provided that: (i) at least 65% in aggregate principal amount of Notes issued
under this Supplemental Indenture shall remain outstanding immediately after the
occurrence of any such redemption (excluding Notes held by the Company and its
Restricted Subsidiaries); and (ii) any such redemption must occur within 45 days
of the date of the closing of the related Equity Offering.
2
<PAGE>
(7) Except as set forth in this Supplemental Indenture, the Notes shall
not be redeemable at the option of any Holder thereof, upon the occurrence of
any particular circumstances or otherwise. Holders will not have the benefit of
any sinking fund or analogous obligations to redeem, repay or repurchase the
Notes in whole or in part.
(8) The Notes shall be issuable in denominations of $1,000 and integral
multiples thereof.
(9) Payments of the principal of and interest on the Notes shall be made
in United States Dollars, and the Notes shall be denominated in United States
Dollars.
(10) State Street Bank and Trust Company shall, initially, be the
Security Registrar and Paying Agent.
(11) The entire outstanding principal amount of and any accrued
interest, if any, on the Notes shall be payable upon declaration of acceleration
of the maturity thereof pursuant to Article 6.2 of the Indenture.
(12) The Notes will be payable on the Stated Maturity Date in an amount
equal to then outstanding principal amount thereof plus any accrued and unpaid
interest accrued to the Stated Maturity Date.
(13) Section 5.3 of the Indenture is hereby superseded by the following
in respect of the Notes.
(a) Option to Effect Legal Defeasance or Covenant Defeasance.
The Company may, at the option of its Board of Directors evidenced
by a resolution set forth in an Officers' Certificate, at any time, elect
to have either Section 1.01(13)(b) or (13)(c) of this Supplemental
Indenture applied to all outstanding Notes upon compliance with the
conditions set forth below in this Section 1.01(13).
(b) Legal Defeasance and Discharge.
Upon the Company's exercise under Section 1.01(13)(a) of this
Supplemental Indenture of the option applicable to this Section
1.01(13)(b), the Company shall, subject to the satisfaction of the
conditions set forth in Section 1.01(13)(d) of this Supplemental
Indenture, be deemed to have been discharged from its obligations with
respect to all outstanding Notes on the date the conditions set forth
below are satisfied (hereinafter, "Legal Defeasance"). For this purpose,
Legal Defeasance means that the Company shall be deemed to have paid and
discharged the entire Indebtedness represented by the outstanding Notes,
which shall thereafter be deemed to be "outstanding" only for the
purposes of Section 1.01(13)(e) of this Supplemental Indenture and the
other Sections of this Supplemental Indenture referred to in (i) and (ii)
of this paragraph, and to have satisfied all its other obligations under
such Notes, the Indenture, with respect to the Notes, and this
3
<PAGE>
Supplemental Indenture (and the Trustee, on demand of and at the expense
of the Company, shall execute proper instruments acknowledging the same),
except for the following provisions which shall survive until otherwise
terminated or discharged hereunder: (i) the rights of Holders of
outstanding Notes to receive solely from the trust fund described in
Section 1.01(13)(d) of this Supplemental Indenture, and as more fully set
forth in such Section, payments in respect of the principal of, premium,
if any, and interest on such Notes when such payments are due, (ii) the
Company's obligations with respect to such Notes under Sections 4.3, 4.4,
4.5 and 11.2 of the Indenture, with respect to the Notes, and Article II
of this Supplemental Indenture, (iii) the rights, powers, trusts, duties
and immunities of the Trustee under the Indenture and this Supplemental
Indenture and the Company's obligations in connection therewith and (iv)
this Section 1.01(13). Subject to compliance with this Section 1.01(13),
the Company may exercise its option under this Section 1.01(13)(b)
notwithstanding the prior exercise of its option under Section
1.01(13)(c) of this Supplemental Indenture.
(c) Covenant Defeasance.
Upon the Company's exercise under Section 1.01(13)(a) of this
Supplemental Indenture of the option applicable to this Section
1.01(13)(c), the Company shall, subject to the satisfaction of the
conditions set forth in Section 1.01(13)(d) of this Supplemental
Indenture, be released from its obligations under Sections 1.01(15)(a),
(b), (c), (d), (e), (f), (g), (i), (j), (k), (l) and (m) of this
Supplemental Indenture and Section 1.01(16)(d) of this Supplemental
Indenture with respect to the outstanding Notes on and after the date the
conditions set forth in Section 1.01(13)(d) of this Supplemental
Indenture are satisfied (hereinafter, "Covenant Defeasance"), and the
Notes shall thereafter be deemed not "outstanding" for the purposes of
any direction, waiver, consent or declaration or act of Holders (and the
consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding" for all other purposes hereunder (it
being understood that such Notes shall not be deemed outstanding for
accounting purposes). For this purpose, Covenant Defeasance means that,
with respect to the outstanding Notes, the Company may omit to comply
with and shall have no liability in respect of any term, condition or
limitation set forth in any of the covenants listed above in this clause
covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in
any such covenant to any other provision herein or in any other document
and such omission to comply shall not constitute a Default or an Event of
Default under Section 1.01(14)(a) of this Supplemental Indenture, but,
except as specified above, the remainder of the Indenture, with repect to
the Notes, this Supplemental Indenture and such Notes shall be unaffected
thereby. In addition, upon the Company's exercise under Section
1.01(13)(a) of this Supplemental Indenture of the option applicable to
this Section 1.01(13)(c) of this Supplemental Indenture, subject to the
satisfaction of the conditions set forth in Section 1.01(13)(d) of this
Supplemental Indenture, Sections 1.01(14)(a)(iii) through
1.01(14)(a)(vii) of this Supplemental Indenture shall not constitute
Events of Default.
4
<PAGE>
(d) Conditions to Legal or Covenant Defeasance.
The following shall be the conditions to the application of either
Section 1.01(13)(b) or (13)(c) of this Supplemental Indenture to the
outstanding Notes:
In order to exercise either Legal Defeasance or Covenant
Defeasance:
(i) the Company must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders, cash in United States dollars,
non-callable U.S. Government Obligations, or a combination thereof, in
such amounts as will be sufficient, in the opinion of a nationally
recognized firm of independent public accountants, to pay the principal
of, premium and interest on the outstanding Notes on the stated date for
payment thereof or on the applicable Redemption Date, as the case may be;
(ii) in the case of an election under Section 1.01(13)(b) of this
Supplemental Indenture, the Company shall have delivered to the Trustee
an Opinion of Counsel reasonably acceptable to the Trustee confirming
that (A) the Company has received from, or there has been published by,
the Internal Revenue Service a ruling or (B) since the Issue Date, there
has been a change in the applicable federal income tax law, in either
case to the effect that, and based thereon such Opinion of Counsel shall
confirm that, the Holders of the outstanding Notes will not recognize
income, gain or loss for federal income tax purposes as a result of such
Legal Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the
case if such Legal Defeasance had not occurred;
(iii) in the case of an election under Section 1.01(13)(c) of this
Supplemental Indenture, the Company shall have delivered to the Trustee
an Opinion of Counsel reasonably acceptable to the Trustee confirming
that the Holders of the outstanding Notes will not recognize income, gain
or loss for federal income tax purposes as a result of such Covenant
Defeasance and will be subject to federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if
such Covenant Defeasance had not occurred;
(iv) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of
Default resulting from the incurrence of Indebtedness all or a portion of
the proceeds of which will be used to defease the Notes pursuant to this
Section 1.01(13) concurrently with such incurrence) or insofar as
Sections 1.01(14)(a)(viii) or (14)(a)(ix) of this Supplemental Indenture
is concerned, at any time in the period ending on the 91st day after the
date of deposit;
(v) such Legal Defeasance or Covenant Defeasance will not result in
a breach or violation of, or constitute a default under, any material
agreement or instrument (other than the Indenture, with respect to the
Notes, and this
5
<PAGE>
Supplemental Indenture) to which the Company or any of its Subsidiaries
is a party or by which the Company or any of its Subsidiaries is bound;
(vi) the Company shall have delivered to the Trustee an Opinion of
Counsel (which may be subject to customary exceptions) to the effect
that, assuming no intervening bankruptcy of the Company between the date
of deposit and the 91st day following the deposit and assuming that no
Holder is an "insider" of the Company under applicable bankruptcy law,
after the 91st day following the deposit, the trust funds will not be
subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally;
(vii) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders over any other creditors of the Company
or with the intent of defeating, hindering, delaying or defrauding any
other creditors of the Company; and
(viii) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.
(e) Deposited Money and U.S. Government Obligations to be Held in
Trust; Other Miscellaneous Provisions.
Subject to Section 1.01(13)(f) of this Supplemental Indenture, all
money and non-callable U.S. Government Obligations (including the
proceeds thereof) deposited with the Trustee (or other qualifying
trustee, collectively for purposes of this Section 1.01(13)(e), the
"Trustee") pursuant to Section 1.01(13)(d) of this Supplemental Indenture
in respect of the outstanding Notes shall be held in trust and applied by
the Trustee, in accordance with the provisions of such Notes, the
Indenture and this Supplemental Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as
Paying Agent) as the Trustee may determine, to the Holders of such Notes
of all sums due and to become due thereon in respect of principal,
premium, if any, and interest, but such money need not be segregated from
other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the cash or
non-callable U.S. Government Obligations deposited pursuant to Section
1.01(13)(d) of this Supplemental Indenture or the principal and interest
received in respect thereof other than any such tax, fee or other charge
which by law is for the account of the Holders of the outstanding Notes.
Anything in this Section 1.01(13) to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time upon
the request of the Company any money or non-callable U.S. Government
Obligations held by it as
6
<PAGE>
provided in Section 1.01(13)(d) of this Supplemental Indenture which, in
the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to
the Trustee (which may be the opinion delivered under Section
1.01(13)(a) of this Supplemental Indenture), are in excess of the amount
thereof that would then be required to be deposited to effect an
equivalent Legal Defeasance or Covenant Defeasance.
(f) Repayment to Company.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of,
premium, if any, or interest on any Note and remaining unclaimed for two
years after such principal, and premium, if any, or interest has become
due and payable shall be paid to the Company on its request or (if then
held by the Company) shall be discharged from such trust; and the Holder
of such Note shall thereafter look only to the Company for payment
thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, may
at the expense of the Company cause to be published once, in the New York
Times and The Wall Street Journal (national edition), notice that such
money remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such notification or
publication, any unclaimed balance of such money then remaining will be
repaid to the Company.
(g) Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable U.S. Government Obligations in accordance with
Section 1.01(13)(b) or 1.01(13)(c) of this Supplemental Indenture, as the
case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Company's obligations under the Indenture,
with respect to the Notes, this Supplemental Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred
pursuant to Section 1.01(13)(b) or 1.01(13)(c) of this Supplemental
Indenture until such time as the Trustee or Paying Agent is permitted to
apply all such money in accordance with Section 1.01(13)(b) or
1.01(13)(c) of this Supplemental Indenture, as the case may be; provided,
however, that, if the Company makes any payment of principal of, premium,
if any, or interest on any Note following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders
of such Notes to receive such payment from the money held by the Trustee
or Paying Agent.
(14) (a) Section 6.1 of the Indenture is hereby superseded by the
following with respect to the Notes.
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"Event of Default" with respect to the Notes means each of the events
specified below in this Section 1.01(14)(a):
(i) default for 30 days in the payment when due of interest on
the Notes;
(ii) default in payment when due of the principal of, or premium,
if any, on the Notes;
(iii) failure by the Company to comply with the provisions of
Section 1.01(16) of this Supplemental Indenture;
(iv) failure by the Company for 30 days after notice to comply with
the provisions of Sections 1.01(15)(a), (b), (c) or (d);
(v) failure by the Company or any of its Restricted Subsidiaries
for 60 days after notice to comply with any of the other agreements in
the Indenture or this Supplemental Indenture;
(vi) default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced
any Indebtedness for money borrowed by the Company or any of its
Restricted Subsidiaries (or the payment of which is Guaranteed by the
Company or any of its Restricted Subsidiaries) whether such Indebtedness
or Guarantee now exists, or is created after the Issue Date, if that
default:
(A) is caused by a failure to pay principal of, or interest
or premium, if any, on such Indebtedness prior to the expiration of
the grace period provided in such Indebtedness on the date of such
default (a "Payment Default"); or
(B) results in the acceleration of such Indebtedness prior
to its express maturity;
and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness under
which there has been a Payment Default or the maturity of which has been
so accelerated, aggregates $25.0 million or more;
(vii) failure by the Company or any of its Subsidiaries to pay
final judgments aggregating in excess of $25.0 million, which judgments
are not paid, discharged or stayed for a period of 60 days;
(viii) entry of a decree or order for relief in respect of the
Company by a court having jurisdiction in the premises in an involuntary
case under any applicable Federal or state bankruptcy, insolvency or
other similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of the Company or for any substantial part of its property, or
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<PAGE>
ordering the winding-up or liquidation of its affairs and such decree or
order shall remain unstayed and in effect for a period of 60 consecutive
days; or
(ix) commencement by the Company of a voluntary case under any
applicable Federal or state bankruptcy, insolvency or other similar law
now or hereafter in effect, or consent by the Company to the appointment
of or taking possession by a receiver, liquidator, assignee, trustee,
custodian, sequestrator (or other similar official) of the Company or for
any substantial part of its property, or any general assignment by the
Company for the benefit of creditors, or failure by the Company generally
to pay its debts as they become due, or the taking by the Company of any
corporate action in furtherance of any of the foregoing.
(b) The first paragraph of Section 6.2 of the Indenture is hereby
superseded by the following with respect of the Notes.
If any Event of Default (other than an Event of Default specified
in clause (viii) or (ix) of Section 1.01(14)(a) of this Supplemental Indenture
with respect to the Company or any Significant Subsidiary) occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes may declare all the Notes to be due and payable
immediately. Upon any such declaration, the Notes shall become due and payable
immediately. Notwithstanding the foregoing, if an Event of Default specified in
clause (viii) or (ix) of Section 1.01(14)(a) of this Supplemental Indenture
occurs with respect to the Company, or any Significant Subsidiary, all
outstanding Securities issued under the Indenture, including the Notes, shall be
due and payable immediately without further action or notice.
If an Event of Default occurs by reason of any willful action (or
inaction) taken (or not taken) by or on behalf of the Company with the intention
of avoiding payment of the premium that the Company would have had to pay if the
Company then had elected to redeem the Notes pursuant to Section 1.01(6)(a) of
this Supplemental Indenture, then, upon acceleration of the Notes, an equivalent
premium shall also become and be immediately due and payable, to the extent
permitted by law, anything in the Indenture, this Supplemental Indenture or in
the Notes to the contrary notwithstanding.
(15) There shall be the following additions, deletions and modifications
to the covenants set forth in the Indenture with respect to the Notes, which
shall be effective only for so long as any of the Notes are Outstanding:
(a) Asset Sales.
The Company shall not, and shall not permit any Restricted
Subsidiary to, consummate an Asset Sale unless: (i) the Company (or the
Restricted Subsidiary, as the case may be) receives consideration at the
time of such Asset Sale at least equal to the Fair Market Value of the
assets or Equity Interests issued or sold or otherwise disposed of; and
(ii) except with respect to Designated Assets, at least 75% of the
consideration therefor received by the Company or such Restricted
Subsidiary is in the form of cash or Cash Equivalents. Only for purposes
of this provision, each of
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the following shall be deemed to be cash: (A) any liabilities (as shown
on the Company's or such Restricted Subsidiary's most recent balance
sheet) of the Company or any Restricted Subsidiary (other than contingent
liabilities and liabilities that are by their terms subordinated to the
Notes) that are assumed by the transferee of any such assets pursuant to
a customary novation agreement that releases the Company or such
Restricted Subsidiary from further liability; and (B) any securities,
notes or other obligations received by the Company or any such Restricted
Subsidiary from such transferee that are contemporaneously (subject to
ordinary settlement periods) converted by the Company or such Restricted
Subsidiary into cash (to the extent of the cash received in that
conversion).
Within 365 days after the receipt of any Net Proceeds from an Asset
Sale, the Company may apply such Net Proceeds: (i) to repay Indebtedness
which ranks equally with the Notes under a Credit Facility and, if the
Indebtedness repaid is revolving credit Indebtedness, to correspondingly
reduce commitments with respect thereto; (ii) to acquire all or
substantially all of the assets of, or a majority of the Voting Stock of,
another Permitted Business; (iii) to make a capital expenditure in a
Permitted Business; or (iv) to acquire other long-term assets that are
used or useful in a Permitted Business.
Pending the final application of any such Net Proceeds, the Company
may temporarily reduce revolving credit borrowings or otherwise invest
such Net Proceeds in any manner that is not prohibited hereby.
Any Net Proceeds from Asset Sales that are not applied or invested
as provided in the preceding paragraph will constitute "Excess Proceeds."
When the aggregate amount of Excess Proceeds exceeds $20.0 million, the
Company shall make an offer (an "Asset Sale Offer") to all Holders of
Notes and all holders of other Indebtedness that is pari passu with the
Notes containing provisions similar to those set forth in this
Supplemental Indenture with respect to offers to purchase or redeem with
the proceeds of sales of assets to purchase the maximum principal amount
of Notes and such other pari passu Indebtedness that may be purchased out
of the Excess Proceeds. The offer price in any Asset Sale Offer will be
equal to 100% of principal amount plus accrued and unpaid interest to the
date of purchase, and will be payable in cash. If any Excess Proceeds
remain after consummation of an Asset Sale Offer, the Company may use
such Excess Proceeds for any purpose not otherwise prohibited hereby. If
the aggregate principal amount of Notes and such other pari passu
Indebtedness tendered into such Asset Sale Offer exceeds the amount of
Excess Proceeds, the Trustee shall select the Notes and such other pari
passu Indebtedness to be purchased on a pro rata basis based on the
principal amount of Notes and such other pari passu Indebtedness
tendered. Upon completion of each Asset Sale Offer, the amount of Excess
Proceeds shall be reset at zero.
The Company shall comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder
to the extent
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<PAGE>
such laws and regulations are applicable in connection with each
repurchase of Notes pursuant to an Asset Sale Offer. To the extent that
the provisions of any securities laws or regulations conflict with
Section 1.01(15)(a) of this Supplemental Indenture, the Company shall
comply with the applicable securities laws and regulations and shall not
be deemed to have breached its obligations under this Supplemental
Indenture by virtue of such conflict.
(b) Change of Control.
If a Change of Control occurs, each Holder of Notes will have the
right to require the Company to repurchase all or any part (equal to
$1,000 or an integral multiple thereof) of that Holder's Notes pursuant
to an offer (a "Change of Control Offer"). In the Change of Control
Offer, the Company shall offer a payment in cash equal to 101% of the
aggregate principal amount of Notes repurchased plus accrued and unpaid
interest thereon, to the date of purchase (the "Change of Control
Payment"). Within ten days following any Change of Control, the Company
shall mail a notice to each Holder describing the transaction or
transactions that constitute the Change of Control and offering to
repurchase Notes on the date specified in such notice (the "Change of
Control Payment Date") (which date shall be no earlier than 30 days nor
later than 60 days after the notice is mailed), pursuant to the
procedures required by the Indenture and described in such notice.
The Company shall comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder
to the extent such laws and regulations are applicable in connection with
the repurchase of the Notes as a result of a Change of Control. To the
extent that the provisions of any securities laws or regulations conflict
with the Change of Control provisions of this Supplemental Indenture, the
Company shall comply with the applicable securities laws and regulations
and shall not be deemed to have breached its obligations under the Change
of Control provisions of this Supplemental Indenture by virtue of such
conflict.
On the Change of Control Payment Date, the Company shall, to the
extent lawful: (i) accept for payment all Notes or portions thereof
properly tendered pursuant to the Change of Control Offer; (ii) deposit
with the Paying Agent an amount equal to the Change of Control Payment in
respect of all Notes or portions thereof so tendered; and (iii) deliver
or cause to be delivered to the Paying Agent the Notes so accepted
together with an Officers' Certificate stating the aggregate principal
amount of Notes or portions thereof being purchased by the Company.
The Paying Agent shall promptly mail to each Holder of Notes so
tendered the Change of Control Payment for such Notes, and the Trustee
shall promptly authenticate and mail (or cause to be transferred by
book-entry) to each Holder a new Note equal in principal amount to any
unpurchased portion of the Notes surrendered, if any; provided that each
such new Note will be in a principal amount of $1,000 or an integral
multiple thereof.
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The Company shall publicly announce the results of the Change of
Control Offer on or as soon as practicable after the Change of Control
Payment Date.
The provisions described above that require the Company to make a
Change of Control Offer following a Change of Control will be applicable
regardless of whether or not any other provisions of the Indenture are
applicable.
The Company shall not be required to make a Change of Control Offer
upon a Change of Control if a third party makes the Change of Control
Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Supplemental Indenture applicable to a
Change of Control Offer made by the Company and purchases all Notes
validly tendered and not withdrawn under such Change of Control Offer.
(c) Incurrence of Indebtedness and Issuance of Preferred Stock.
Section 11.4 of the Indenture is hereby superseded by the following
with respect of the Notes.
The Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, create, incur, issue, assume, guarantee or
otherwise become directly or indirectly liable, contingently or
otherwise, with respect to (collectively, "incur") any Indebtedness
(including Acquired Debt), and the Company shall not issue any
Disqualified Stock and shall not permit any of its Restricted
Subsidiaries to issue any shares of preferred stock; provided, however,
that the Company and any Guarantor may incur Indebtedness (including
Acquired Debt), and the Company may issue Disqualified Stock, if the
Fixed Charge Coverage Ratio for the Company's most recently ended four
full fiscal quarters for which internal financial statements are
available immediately preceding the date on which such additional
Indebtedness is incurred or such Disqualified Stock is issued would have
been at least 2.00 to 1.00, determined on a pro forma basis (including a
pro forma application of the net proceeds therefrom), as if the
additional Indebtedness had been incurred, or the Disqualified Stock had
been issued, as the case may be, at the beginning of such four-quarter
period.
The first paragraph of this Section 1.01(15)(c) will not prohibit
the incurrence of any of the following items of Indebtedness
(collectively, "Permitted Debt"):
(i) the incurrence by the Company of additional Indebtedness and
letters of credit pursuant to Credit Facilities in an aggregate principal
amount (with letters of credit being deemed to have a principal amount
equal to the maximum potential liability of the Company thereunder) at
any one time outstanding under this clause (i) not to exceed $350.0
million as of such date of incurrence, less the aggregate amount of all
Net Proceeds of Asset Sales applied to repay Indebtedness outstanding
under one or more Credit Facilities (and to reduce commitments with
respect thereto if the Indebtedness being repaid is revolving
Indebtedness) pursuant
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<PAGE>
to clause (i) of the second paragraph of Section 1.01(15)(a) of this
Supplemental Indenture;
(ii) the incurrence by Foreign Subsidiaries of Indebtedness under
Foreign Credit Facilities; provided that the aggregate principal amount
of all Indebtedness (with letters of credit being deemed to have a
principal amount equal to the maximum potential liability of Foreign
Subsidiaries thereunder) at any time outstanding under this clause (ii),
does not exceed an amount equal to the greater of (A) $100.0 million and
(B) the Foreign Borrowing Base of such Foreign Subsidiaries as of such
date of incurrence;
(iii) the incurrence by the Company and its Restricted Subsidiaries
of the Existing Indebtedness;
(iv) the incurrence by the Company of Indebtedness represented by
the Notes issued on the Issue Date;
(v) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness represented by Capital Lease Obligations,
mortgage financings or purchase money obligations, in each case, incurred
for the purpose of financing all or any part of the purchase price or
cost of construction or improvement of property, plant or equipment used
in the business of the Company or such Restricted Subsidiary, in an
aggregate principal amount, including all Permitted Refinancing
Indebtedness incurred to refund, refinance or replace any Indebtedness
incurred pursuant to this clause (v), not to exceed the greater of (A)
$50.0 million or (B) 3.0% of Consolidated Tangible Assets at any time
outstanding;
(vi) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or
the net proceeds of which are used to refund, refinance or replace
Indebtedness (other than intercompany Indebtedness) that was permitted by
this Supplemental Indenture to be incurred under the first paragraph of
this Section 1.01(15)(c) or clauses (iii), (iv), (xii) or this clause
(vi) of this Section 1.01(15)(c);
(vii) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company
and any of its Restricted Subsidiaries; provided, however, that: (A) if
the Company is the obligor on such Indebtedness, such Indebtedness must
be expressly subordinated to the prior payment in full in cash of all
Obligations with respect to the Notes, the Indenture and this
Supplemental Indenture; and (B) any subsequent issuance or transfer of
Equity Interests that results in any such Indebtedness being held by a
Person other than the Company or a Restricted Subsidiary thereof and any
sale or other transfer of any such Indebtedness to a Person that is not
either the Company or a Restricted Subsidiary thereof shall be deemed, in
each case, to constitute an incurrence of such Indebtedness by the
Company or such Restricted Subsidiary, as the case may be, that was not
permitted by this clause (vii);
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(viii) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations that are incurred for the purpose of
fixing or hedging interest rate risk with respect to any floating rate
Indebtedness that is permitted by the terms of this Supplemental
Indenture to be outstanding or for the purpose of hedging foreign
currency exchange risk;
(ix) the accrual of interest, the accretion or amortization of
original issue discount, the payment of interest on any Indebtedness in
the form of additional Indebtedness with the same terms, and the payment
of dividends on Disqualified Stock in the form of additional shares of
the same class of Disqualified Stock will not be deemed to be an
incurrence of Indebtedness or an issuance of Disqualified Stock for
purposes of this Section 1.01(15)(c); provided, in each such case, that
the amount thereof is included in Fixed Charges of the Company as
accrued;
(x) the Guarantee by the Company or any Guarantor of Indebtedness
of the Company or any Guarantor that was permitted to be incurred by
another provision of this Section 1.01(15)(c);
(xi) the Guarantee by the Company of Indebtedness of a Foreign
Subsidiary that was permitted to be incurred by another provision of this
Section 1.01(15)(c);
(xii) the incurrence by the Company or any Guarantor of additional
Indebtedness or Attributable Debt in an aggregate principal amount (or
accreted value, as applicable) at any time outstanding, including all
Permitted Refinancing Indebtedness incurred to refund, refinance or
replace any Indebtedness or Attributable Debt incurred pursuant to this
clause (xii), not to exceed $100.0 million; and
(xiii) the incurrence by the Company's Unrestricted Subsidiaries of
Non-Recourse Debt; provided, however, that if any such Indebtedness
ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such event
shall be deemed to constitute an incurrence of Indebtedness by a
Restricted Subsidiary of the Company that was not permitted by this
clause (xiii).
The Company shall not incur any Indebtedness (including Permitted
Debt) that is contractually subordinated in right of payment to any other
Indebtedness of the Company unless such Indebtedness is also
contractually subordinated in right of payment to the Notes on
substantially identical terms; provided, however, that no Indebtedness of
the Company shall be deemed to be contractually subordinated in right of
payment to any other Indebtedness of the Company solely by virtue of
being unsecured.
For purposes of determining compliance with this Section
1.01(15)(c), in the event that an item of proposed Indebtedness meets the
criteria of more than one of the categories of Permitted Debt described
in clauses (i) through (xiii) of this
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Section 1.01(15)(c), or is entitled to be incurred pursuant to the first
paragraph of this Section 1.01(15)(c), the Company will be permitted to
classify such item of Indebtedness on the date of its incurrence in any
manner that complies with this Section 1.01(15)(c).
Indebtedness under Credit Facilities outstanding on the Issue Date
shall be deemed to have been incurred on such date in reliance on the
exception provided by clause (i) above.
(d) Restricted Payments.
The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly:
(i) declare or pay any dividend or make any other payment or
distribution on account of the Company's or any of its Restricted
Subsidiaries' Equity Interests (including, without limitation, any
distribution, dividend or payment in connection with any merger or
consolidation involving the Company or any of its Restricted
Subsidiaries) or to the direct or indirect holders of the Company's or
any of its Restricted Subsidiaries' Equity Interests in their capacity as
such (other than dividends or distributions payable in Equity Interests
(other than Disqualified Stock) of the Company or to the Company or a
Restricted Subsidiary of the Company);
(ii) purchase, redeem or otherwise acquire or retire for value
(including, without limitation, in connection with any merger or
consolidation involving the Company) any Equity Interests of the Company,
any Restricted Subsidiary of the Company or any direct or indirect parent
of the Company;
(iii) make any payment on or with respect to, or purchase, redeem,
defease or otherwise acquire or retire for value any Indebtedness that is
subordinated to the Notes, except the scheduled payment of interest or
principal at the Stated Maturity thereof; or
(iv) make any Restricted Investment (all such payments and other
actions set forth in clauses (i) through (iv) of this Section 1.01(15)(d)
being collectively referred to as "Restricted Payments"),
unless, at the time of and after giving effect to such Restricted
Payment:
(A) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; and
(B) the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment had
been made at the beginning of the applicable four-quarter period, have
been permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio
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test set forth above in the first paragraph of Section 1.01(15)(c) of
this Supplemental Indenture; and
(C) such Restricted Payment, together with the aggregate amount of
all other Restricted Payments made by the Company and its Restricted
Subsidiaries after the Issue Date (excluding Restricted Payments
permitted by clauses (III), (IV) and (V) of the next succeeding
paragraph) is less than the sum, without duplication, of:
(I) 50% of the Consolidated Net Income of the Company for
the period (taken as one accounting period) from the beginning of
the first fiscal quarter commencing after the Issue Date to the end
of the Company's most recently ended fiscal quarter for which
internal financial statements are available at the time of such
Restricted Payment (or, if such Consolidated Net Income for such
period is a deficit, less 100% of such deficit); plus
(II) 100% of the aggregate net cash proceeds received by the
Company since the Issue Date as a contribution to its common equity
capital or from the issue or sale of Equity Interests of the
Company (other than Disqualified Stock) or from the issue or sale
of Disqualified Stock or debt securities of the Company that have
been converted into or exchanged for such Equity Interests (other
than Equity Interests (or Disqualified Stock or convertible debt
securities) sold to a Subsidiary of the Company); plus
(III) to the extent not already included in Consolidated Net
Income of the Company for such period, if any Restricted Investment
that was made by the Company or any Restricted Subsidiary after the
Issue Date is sold for cash or otherwise liquidated or repaid for
cash, the lesser of (1) the cash return of capital with respect to
such Restricted Investment (less the cost of disposition, if any)
and (2) the initial amount of such Restricted Investment or
designated amount of Unrestricted Subsidiary; plus
(IV) to the extent that any Unrestricted Subsidiary is
designated by the Company as a Restricted Subsidiary after the
Issue Date, an amount equal to the lesser of (1) the net book value
of the Company's Investment in such Unrestricted Subsidiary at the
time of such designation and (2) the fair market value of the
Company's Investment in such Unrestricted Subsidiary at the time of
such designation.
The foregoing covenant shall not be violated by reason of:
(1) the payment of any dividend within 60 days after the date of
declaration thereof, if at said date of declaration such payment would
have complied with the foregoing provisions of this Section 1.01(15)(d);
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(2) the payment of cash dividends in an amount not to exceed $7.5
million in any fiscal quarter;
(3) the redemption, repurchase, retirement, defeasance or other
acquisition of any subordinated Indebtedness of the Company or of any
Equity Interests of the Company or any Restricted Subsidiary in exchange
for, or out of the net cash proceeds of the substantially concurrent sale
(other than to a Subsidiary of the Company) of, Equity Interests of the
Company (other than Disqualified Stock); provided that the amount of any
such net cash proceeds that are utilized for any such redemption,
repurchase, retirement, defeasance or other acquisition shall be excluded
from clause (C)(II) of the preceding paragraph;
(4) the defeasance, redemption, repurchase or other acquisition of
subordinated Indebtedness of the Company with the net cash proceeds from
an incurrence of Permitted Refinancing Indebtedness;
(5) the payment of any dividend or distribution by a Restricted
Subsidiary of the Company to the holders of its common Equity Interests
so long as the Company or such Restricted Subsidiary receives at least
its pro rata share (and in like form) of such dividend or distribution in
accordance with its common Equity Interests;
(6) the repurchase, redemption or other acquisition or retirement
for value of any Equity Interests of the Company or any Restricted
Subsidiary of the Company held by any member of the Company's (or any of
its Restricted Subsidiaries') management pursuant to any management
equity subscription agreement or stock option agreement in effect as of
the Issue Date; provided that the aggregate price paid for all such
repurchased, redeemed, acquired or retired Equity Interests shall not
exceed $500,000 in any twelve-month period;
(7) the deemed repurchase of Capital Stock by the Company on the
exercise of stock options; and
(8) any other Restricted Payment which, together with all other
Restricted Payments made pursuant to this clause (8) since the Issue
Date, does not exceed $30.0 million;
provided that the Company shall not and shall not permit any of its
Restricted Subsidiaries to make any Restricted Payment contemplated by
clauses (2), (3), (4), (6), (7) and (8) of this Section 1.01(15)(d) so
long as a Default or an Event of Default has occurred and is continuing.
If any event would increase the amounts available under clause (I)
through (IV) of this Section 1.01(15)(d) and, but for this sentence, also
increase capacity for Permitted Investments, then the Company may choose
to increase the amounts under
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clause (I) through (IV) of this Section 1.01(15)(d) or Permitted
Investments, but not both.
The amount of all Restricted Payments (other than cash) shall be
the Fair Market Value on the date of the Restricted Payment of the asset,
assets or securities proposed to be transferred or issued to or by the
Company or such Restricted Subsidiary, as the case may be, pursuant to
the Restricted Payment. Not later than the date of making any Restricted
Payment, the Company shall deliver to the Trustee an Officers'
Certificate stating that such Restricted Payment is permitted and setting
forth the basis upon which the calculations required by this Section
1.01(15)(d) were computed, together with a copy of any fairness opinion
or appraisal required hereby.
(e) Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or permit to exist or
become effective any consensual encumbrance or restriction on the ability
of any Restricted Subsidiary to: (i) pay dividends or make any other
distributions on its Capital Stock to the Company or any of its
Restricted Subsidiaries, or with respect to any other interest or
participation in, or measured by, its profits, or pay any debt owed to
the Company or any of its Restricted Subsidiaries; (ii) make loans or
advances to the Company or any of its Restricted Subsidiaries; or (iii)
transfer any of its properties or assets to the Company or any of its
Restricted Subsidiaries.
The preceding restrictions will not apply, however, to encumbrances
or restrictions existing under or by reason of:
(i) Existing Indebtedness as in effect on the Issue Date and any
amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings thereof, provided
that such amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacement or refinancings are no more
restrictive, taken as a whole, with respect to such dividend and other
payment restrictions than those contained in such Existing Indebtedness,
as in effect on the Issue Date;
(ii) the Amended Credit Agreement and Foreign Credit Facilities,
each as in effect on the Issue Date, and any amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacements
or refinancings of any thereof, provided that such amendments,
modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings are no more restrictive, taken
as a whole, with respect to such dividend and other payment restrictions
than those contained in the facility so amended, modified, restated,
renewed, increased, supplemented, refunded, replaced or refinanced, as in
effect on the Issue Date;
(iii) this Supplemental Indenture and the Notes;
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(iv) applicable law;
(v) any instrument governing Indebtedness or Capital Stock of a
Person acquired by the Company or any of its Restricted Subsidiaries as
in effect at the time of such acquisition (except to the extent such
Indebtedness was incurred in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not applicable to any
Person, or the properties or assets of any Person, other than the Person,
or the property or assets of the Person, so acquired, provided that, in
the case of Indebtedness, such Indebtedness was permitted by the terms of
this Supplemental Indenture to be incurred;
(vi) customary non-assignment provisions in leases entered into in
the ordinary course of business;
(vii) capital leases, mortgage financings or purchase money
obligations for property acquired in the ordinary course of business that
impose restrictions on the property so acquired of the nature described
in clause (3) of the preceding paragraph;
(viii) any agreement for the sale or other disposition of a
Restricted Subsidiary that restricts distributions by that Restricted
Subsidiary pending its sale or other disposition;
(ix) Permitted Refinancing Indebtedness, provided that the
restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are no more restrictive, taken as a whole, than
those contained in the agreements governing the Indebtedness being
refinanced;
(x) Liens securing Indebtedness that limit the right of the debtor
to dispose of the assets subject to such Lien;
(xi) provisions with respect to the disposition or distribution of
assets or property in joint venture agreements, asset sale agreements,
stock sale agreements and other similar agreements entered into in the
ordinary course of business; and
(xii) restrictions on cash or other deposits or net worth imposed
by customers under contracts entered into in the ordinary course of
business.
(f) Liens.
The Company shall not and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or suffer
to exist any Lien of any kind on any asset, now owned or hereafter
acquired, except Permitted Liens.
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(g) Transactions with Affiliates.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or
otherwise dispose of any of its properties or assets to, or purchase any
property or assets from, or enter into or make or amend any transaction,
contract, agreement, understanding, loan, advance or Guarantee with, or
for the benefit of, any Affiliate (each, an "Affiliate Transaction"),
unless: (i) such Affiliate Transaction is on terms that are no less
favorable to the Company or the relevant Restricted Subsidiary than those
that would have been obtained in a comparable transaction by the Company
or such Restricted Subsidiary with an unrelated Person; and (ii) the
Company delivers to the Trustee: (A) with respect to any Affiliate
Transaction or series of related Affiliate Transactions involving
aggregate consideration of less than $10.0 million, a certificate of the
Company's chief executive officer or chief financial officer certifying
that such Affiliate Transaction complies with this Section 1.01(15)(g);
(B) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration equal to or in
excess of $10.0 million and less than $50.0 million, a certificate of the
Company's chief executive officer or chief financial officer, approved by
the Company's Board of Directors, certifying that such Affiliate
Transaction complies with this Section 1.01(15)(g) and that such
Affiliate Transaction has been approved by a majority of the
disinterested members of the Board of Directors; and (C) with respect to
any Affiliate Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $50.0 million, an opinion
as to the fairness to the Holders of such Affiliate Transaction from a
financial point of view issued by an accounting, appraisal or investment
banking firm of national standing.
The following items shall not be deemed to be Affiliate
Transactions and, therefore, will not be subject to the provisions of the
prior paragraph: (i) any employment agreement entered into by the Company
or any of its Restricted Subsidiaries in the ordinary course of business
and consistent with the past practice of the Company or such Restricted
Subsidiary, as the case may be; (ii) transactions between or among the
Company and/or its Restricted Subsidiaries; (iii) any sale or other
issuance of Equity Interests (other than Disqualified Stock) of the
Company; (iv) payment of reasonable fees and compensation and indemnity
on behalf of officers, directors, employees and consultants of the
Company or any Subsidiary of the Company who are not otherwise Affiliates
of the Company or the Subsidiary, as the case may be; (v) Restricted
Payments that are permitted by Section 1.01(15)(d) of this Supplemental
Indenture; (vi) reasonable payments, advances or loans to employees or
consultants for moving, entertainment and travel expenses and similar
expenditures in the ordinary course of business; and (vii) transactions
with joint ventures or alliances in the ordinary course of business and
otherwise in compliance with the terms of this Supplemental Indenture on
terms at least as favorable as might reasonably have been obtained at
such time from an unaffiliated party.
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(h) Reports.
In addition to the provisions of Section 8.4 of the Indenture, the
provisions of this Section 1.01(15)(h) shall apply to the Notes. Whether
or not required by the Commission, so long as any Notes are outstanding,
the Company shall furnish to the Holders of Notes, within the time
periods specified in the Commission's rules and regulations: (i) all
quarterly and annual financial information that would be required to be
contained in a filing with the Commission on Forms 10-Q and 10-K (or any
successor forms) if the Company were required to file such Forms,
including a "Management's Discussion and Analysis of Financial Condition
and Results of Operations" that describes the financial condition and
results of operations of the Company and its Subsidiaries and, with
respect to the annual information only, a report on the annual financial
statements by the Company's certified independent accountants; and (ii)
all current reports that would be required to be filed with the
Commission on Form 8-K (or any successor form) if the Company were
required to file such reports.
If the Company has designated any of its Subsidiaries as
Unrestricted Subsidiaries, then the quarterly and annual financial
information required by this Section 1.01(15)(h) shall include a
reasonably detailed presentation, either on the face of the financial
statements or in the footnotes thereto, and in Management's Discussion
and Analysis of Financial Condition and Results of Operations, of the
financial condition and results of operations of the Company and its
Restricted Subsidiaries separate from the aggregate financial condition
and results of operations of the Unrestricted Subsidiaries of the
Company.
In addition, whether or not required by the Commission, the Company
shall file a copy of all information and reports referred to in clauses
(i) and (ii) of this Section 1.01(15)(h) with the Commission for public
availability within the time periods specified in the Commission's rules
and regulations (unless the Commission will not accept such a filing) and
make such information available to securities analysts and prospective
investors upon request.
(i) Designation of Restricted and Unrestricted Subsidiaries.
The Board of Directors may designate any Restricted Subsidiary to
be an Unrestricted Subsidiary if that designation would not cause a
Default. If a Restricted Subsidiary is designated as an Unrestricted
Subsidiary, the aggregate fair market value of all outstanding
Investments owned by the Company and its Restricted Subsidiaries in the
Subsidiary so designated will be deemed to be an Investment made as of
the time of such designation and will reduce the amount available for
Restricted Payments under clauses (i) through (iv) of Section 1.01(15)(d)
of this Supplemental Indenture or reduce the amount available for future
Investments under one or more clauses of the definition of Permitted
Investments, as the Company shall determine. That designation will only
be permitted if such Investment would be permitted at that time and if
such Restricted Subsidiary otherwise meets the
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definition of an Unrestricted Subsidiary. The Board of Directors may
redesignate any Unrestricted Subsidiary to be a Restricted Subsidiary if
the redesignation would not cause a Default.
(j) Subsidiary Guarantees.
The Company shall cause each of the Company's existing and future
Domestic Restricted Subsidiaries that is or becomes a Significant
Subsidiary to (i) execute and deliver to the Trustee a supplemental
indenture in form and substance reasonably satisfactory to the Trustee
pursuant to which such Restricted Subsidiary shall unconditionally
guarantee all of the Company's obligations under the Notes on the terms
set forth in such supplemental indenture and (ii) deliver to the Trustee
an opinion of counsel reasonably satisfactory to the Trustee that such
supplemental indenture has been duly executed and delivered by such
Restricted Subsidiary.
In addition, the Company shall not permit any of its Restricted
Subsidiaries after the Issue Date, to guarantee or pledge any assets to
secure the payment of any other Indebtedness of the Company unless such
Restricted Subsidiary simultaneously (i) executes and delivers to the
Trustee a supplemental indenture in form and substance reasonably
satisfactory to the Trustee pursuant to which such Restricted Subsidiary
shall unconditionally guarantee all of the Company's obligations under
the Notes on the terms set forth in such supplemental indenture and (ii)
delivers to the Trustee an opinion of counsel reasonably satisfactory to
the Trustee that such supplemental indenture has been duly executed and
delivered by such Restricted Subsidiary.
No Guarantor shall incur any Indebtedness (including Permitted
Debt) that is contractually subordinated in right of payment to any other
Indebtedness of such Guarantor unless such Indebtedness is also
contractually subordinated in right of payment to such Guarantor's
Guarantee of the Notes on substantially identical terms; provided,
however, that no Indebtedness of a Guarantor shall be deemed to be
contractually subordinated in right of payment to any other Indebtedness
of such Guarantor solely by virtue of being unsecured.
(k) Business Activities.
The Company shall not, and shall not permit any Restricted
Subsidiary to, engage in any business other than Permitted Businesses,
except to the extent as would not be material to the Company and its
Restricted Subsidiaries, taken as a whole.
(l) Payments for Consent.
The Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, pay or cause to be paid any consideration to
or for the benefit of any Holder of Notes for or as an inducement to any
consent, waiver or
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amendment of any of the terms or provisions of the Indenture, this
Supplemental Indenture or the Notes unless such consideration is offered
to be paid and is paid to all Holders of the Notes that consent, waive or
agree to amend in the time frame set forth in the solicitation documents
relating to such consent, waiver or agreement.
(m) Sale and Leaseback Transactions.
Section 11.5 of the Indenture is hereby superseded by the following
with respect of the Notes.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, enter into any sale and leaseback transaction; provided
that the Company or any Restricted Subsidiary may enter into a sale and
leaseback transaction if:
(i) the Company or that Restricted Subsidiary, as applicable, could
have incurred Indebtedness in an amount equal to the Attributable Debt
relating to such sale and leaseback transaction under (A) the Fixed
Charge Coverage Ratio test in the first paragraph of Section 1.01(15)(c)
of this Supplemental Indenture, or (B) clause (xii) of the second
paragraph of Section 1.01(15)(c) of this Supplemental Indenture, provided
that, in the case of this clause (B), the aggregate amount of
Attributable Debt relating to all such sale and leaseback transactions
shall not exceed $50.0 million at any one time outstanding;
(ii) the gross cash proceeds of that sale and leaseback transaction
are at least equal to the fair market value of the property that is the
subject of that sale and leaseback transaction; and
(iii) the transfer of assets in that sale and leaseback transaction
is permitted by, and the Company or such Restricted Subsidiary applies
the proceeds of such transaction in compliance with, Section 1.01(15)(a)
of this Supplemental Indenture.
(16) Section 9.1 of the Indenture is hereby superseded by the following
in respect of the Notes:
The Company may not, directly or indirectly:
(a) consolidate or merge with or into another Person (whether or
not the Company is the surviving corporation); or
(b) sell, assign, transfer, convey or otherwise dispose of all or
substantially all of the properties or assets of the Company and its
Restricted Subsidiaries, taken as a whole, in one or more related
transactions, to another Person; unless:
(i) either: (A) the Company is the surviving corporation; or (B)
the Person formed by or surviving any such consolidation or merger
(if other than the Company) or to which such sale, assignment,
transfer, conveyance or other
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disposition shall have been made is a corporation organized or
existing under the laws of the United States, any state thereof or
the District of Columbia;
(ii) the Person formed by or surviving any such consolidation or
merger (if other than the Company) or the Person to which such
sale, assignment, transfer, conveyance or other disposition shall
have been made assumes all the obligations of the Company under the
Notes, the Indenture and this Supplemental Indenture pursuant to
agreements reasonably satisfactory to the Trustee;
(c) immediately after such transaction no Default or Event
of Default exists; and
(d) the Company or the Person formed by or surviving any such
consolidation or merger (if other than the Company) or to which such
sale, assignment, transfer, conveyance or other disposition shall have
been made will, on the date of such transaction after giving pro forma
effect thereto and any related financing transactions as if the same had
occurred at the beginning of the applicable four-quarter period, be
permitted to incur at least $1.00 of additional Indebtedness pursuant to
the Fixed Charge Coverage Ratio test set forth in the first paragraph of
Section 1.01(15)(c) of this Supplemental Indenture.
In addition, the Company may not, directly or indirectly, lease all or
substantially all of its properties or assets in one or more related
transactions, to any other person.
This Section 1.01(16) shall not apply to a sale, assignment, transfer,
conveyance or other disposition of assets between or among the Company and any
of its Restricted Subsidiaries.
(17) Article 10 of the Indenture is hereby superseded by the following
in respect of the Notes.
(a) Without Consent of Holders of Notes.
Notwithstanding Section 1.01(17)(b) of this Supplemental Indenture,
the Company and the Trustee may amend or supplement the Indenture, this
Supplemental Indenture or the Notes without the consent of any Holder of
a Note:
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(i) to cure any ambiguity, defect or inconsistency;
(ii) to provide for uncertificated Notes in addition to or in place
of certificated Notes or to alter the provisions of Article 4 of the
Indenture or Article 2 of this Supplemental Indenture (including the
related definitions) in a manner that does not materially adversely
affect any Holder;
(iii) to provide for the assumption of the Company's obligations to
the Holders of the Notes by a successor to the Company pursuant to
Section 1.9 or Section 9.2 of the Indenture;
(iv) to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect
the legal rights hereunder of any Holder of the Note;
(v) to provide for the issuance of additional Notes to a maximum of
$350.0 million aggregate principal amount pursuant to Section 1.01(2) of
this Supplemental Indenture and in accordance with the provisions of
Sections 2.2 and 3.1 of the Indenture;
(vi) to comply with requirements of the SEC in order to effect or
maintain the qualification of the Indenture under the TIA; or
(vii) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Notes and to add to
or change any of the provisions of the Indenture, as it relates to the
Notes, or this Supplemental Indenture as shall be necessary to provide
for or facilitate the administration of the trusts under the Indenture
by more than one Trustee, pursuant to the requirements of Section
7.11(b) of the Indenture.
Upon the request of the Company accompanied by a resolution of its
Board of Directors, or an officer or officers duly authorized by the
Board of Directors, authorizing the execution of any such amended or
supplemental indenture, and upon receipt by the Trustee of the documents
described in Section 10.3 of the Indenture, the Trustee shall join with
the Company in the execution of any amended or supplemental indenture
authorized or permitted by the terms of this Supplemental Indenture and
to make any further appropriate agreements and stipulations that may be
therein contained, but the Trustee shall not be obligated to enter into
such amended or supplemental indenture that adversely affects its own
rights, duties or immunities under the Indenture, this Supplemental
Indenture or otherwise.
(b) With Consent of Holders of Notes.
Except as provided below in clauses (i) through (viii) of this
Section 1.01(17)(b), the Company and the Trustee may amend or supplement
this Supplemental Indenture (including Sections 1.01(15)(a) and (b) of
this Supplemental Indenture) and the Notes may be amended or supplemented
with the consent of the Holders of at least a majority in principal
amount of the Notes then outstanding
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voting as a single class (including consents obtained in connection with
a tender offer or exchange offer for, or purchase of, the Notes), and,
subject to Sections 6.8 and 6.13 of the Indenture, any existing Default
or Event of Default (other than a Default or Event of Default in the
payment of the principal of, premium, if any, or interest on the Notes,
except a payment default resulting from an acceleration that has been
rescinded) or compliance with any provision of the Indenture, this
Supplemental Indenture or the Notes may be waived with the consent of the
Holders of a majority in principal amount of the then outstanding Notes
voting as a single class (including consents obtained in connection with
a tender offer or exchange offer for, or purchase of, the Notes). The
definition of Outstanding in Section 1.1 of the Indenture shall determine
which Notes are considered to be "outstanding" for purposes of this
Section 1.01(17)(b).
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or
supplemental indenture, and upon the filing with the Trustee of evidence
satisfactory to the Trustee of the consent of the Holders of Notes as
aforesaid, and upon receipt by the Trustee of the documents described in
Section 10.3 of the Indenture, the Trustee shall join with the Company in
the execution of such amended or supplemental indenture unless such
amended or supplemental indenture directly adversely affects the
Trustee's own rights, duties or immunities under the Indenture, this
Supplemental Indenture or otherwise, in which case the Trustee may in its
discretion, but shall not be obligated to, enter into such amended or
supplemental indenture.
It shall not be necessary for the consent of the Holders of Notes
under this Section 1.01(17)(b) to approve the particular form of any
proposed amendment or waiver, but it shall be sufficient if such consent
approves the substance thereof.
After an amendment, supplement or waiver under this Section
1.01(17) becomes effective, the Company shall mail to the Holders of
Notes affected thereby a notice briefly describing the amendment,
supplement or waiver. Any failure of the Company to mail such notice, or
any defect therein, shall not, however, in any way impair or affect the
validity of any such amended or supplemental indenture or waiver. Subject
to Sections 6.8 and 6.13 of the Indenture, the Holders of a majority in
aggregate principal amount of the Notes then outstanding voting as a
single class may waive compliance in a particular instance by the Company
with any provision of the Indenture, this Supplemental Indenture or the
Notes. However, without the consent of each Holder affected, an amendment
or waiver under this Section 1.01(17)(b) may not (with respect to any
Notes held by a non-consenting Holder):
(i) reduce the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver;
(ii) reduce the principal of or change the fixed maturity of any
Note or alter or waive any of the provisions with respect to the
redemption of the Notes
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except as provided above with respect to Sections 1.01(15)(a) and (b) of
this Supplemental Indenture;
(iii) reduce the rate of or change the time for payment of
interest, including default interest, on any Note;
(iv) waive a Default or Event of Default in the payment of
principal of or premium, if any, or interest on the Notes (except a
rescission of acceleration of the Notes by the Holders of at least a
majority in aggregate principal amount of the then outstanding Notes and
a waiver of the payment default that resulted from such acceleration);
(v) make any Note payable in money other than that stated in the
Notes;
(vi) waive a redemption payment with respect to any Note (other
than a payment required by Sections 1.01(15)(a) and (b) or (18) of this
Supplemental Indenture);
(vii) make any change in the provisions of the Indenture or this
Supplemental Indenture relating to waivers of past Defaults or the rights
of Holders of Notes to receive payments of principal of or premium, if
any, or interest on the Notes; or
(viii) make any change in Section 6.8 or 6.13 of the Indenture or
in the foregoing provisions of this Section 1.01(17).
(c) Compliance with Trust Indenture Act.
Every amendment or supplement to the Indenture, this Supplemental
Indenture or the Notes shall be set forth in a amended or supplemental
indenture that complies with the TIA as then in effect.
(d) Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder of a Note is a continuing consent by the Holder
of a Note and every subsequent Holder of a Note or portion of a Note that
evidences the same debt as the consenting Holder's Note, even if notation
of the consent is not made on any Note. However, any such Holder of a
Note or subsequent Holder of a Note may revoke the consent as to its Note
if the Trustee receives written notice of revocation before the date the
waiver, supplement or amendment becomes effective. An amendment,
supplement or waiver becomes effective in accordance with its terms and
thereafter binds every Holder.
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(e) Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company
in exchange for all Notes may issue and the Trustee shall, upon receipt
of an authentication order pursuant to Section 4.2 of the Indenture,
authenticate new Notes that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall
not affect the validity and effect of such amendment, supplement or
waiver.
(f) Trustee to Sign Amendments, etc.
The Trustee shall sign any amended or supplemental indenture
authorized pursuant to this Section 1.01(17) if the amendment or
supplement does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. The Company may not sign an amendment or
supplemental indenture until the Board of Directors, or an officer or
officers duly authorized by the Board of Directors, approves it. In
executing any amended or supplemental indenture, the Trustee shall be
entitled to receive and (subject to Section 10.3 of the Indenture) shall
be fully protected in relying upon, in addition to the documents required
by Sections 1.2 and 2.2(b) of the Indenture, an Officers' Certificate and
an Opinion of Counsel stating that the execution of such amended or
supplemental indenture is authorized or permitted by this Supplemental
Indenture.
(18) There shall be the following addition to the provisions of Article
12 of the Indenture with respect to the Notes which shall only be effective for
so long as any Notes are Outstanding:
In the event that, pursuant to Section 1.01(15)(a) hereof, the Company
shall be required to commence an Asset Sale Offer to all Holders to purchase
Notes, it shall follow the procedures specified below.
The Asset Sale Offer shall remain open for a period of 20 Business Days
following its commencement and no longer, except to the extent that a longer
period is required by applicable law (the "Offer Period"). No later than five
Business Days after the termination of the Offer Period (the "Purchase Date"),
the Company shall purchase the principal amount of Notes required to be
purchased pursuant to Section 1.01(15)(a) hereof (the "Offer Amount") or, if
less than the Offer Amount has been tendered, all Notes tendered in response to
the Asset Sale Offer. Payment for any Notes so purchased shall be made in the
same manner as interest payments are made.
If the Purchase Date is on or after a Regular Record Date and on or
before the related Interest Payment Date, any accrued and unpaid interest shall
be paid to the Person in whose name a Note is registered at the close of
business on such Regular Record Date, and no additional interest shall be
payable to Holders who tender Notes pursuant to the Asset Sale Offer.
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Upon the commencement of an Asset Sale Offer, the Company shall
send, by first class mail, a notice to the Trustee and each of the
Holders, with a copy to the Trustee. The notice shall contain all
instructions and materials necessary to enable such Holders to tender
Notes pursuant to the Asset Sale Offer. The Asset Sale Offer shall be
made to all Holders. The notice, which shall govern the terms of the
Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to this
Section 1.01(18) and Section 1.01(15)(a) of this Supplemental Indenture
and the length of time the Asset Sale Offer shall remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment shall
continue to accrete or accrue interest;
(d) that, unless the Company defaults in making such payment, any
Note accepted for payment pursuant to the Asset Sale Offer shall cease
to accrete or accrue interest after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to an
Asset Sale Offer may only elect to have all of such Note purchased and
may not elect to have only a portion of such Note purchased;
(f) that Holders electing to have a Note purchased pursuant to any
Asset Sale Offer shall be required to surrender the Note, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Note
completed, or transfer by book-entry transfer, to the Company, a
Depositary, if appointed by the Company, or a Paying Agent at the
address specified in the notice at least three days before the Purchase
Date;
(g) that Holders shall be entitled to withdraw their election if
the Company, the Depositary or the Paying Agent, as the case may be,
receives, not later than the expiration of the Offer Period, a telegram,
telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Note the Holder delivered for
purchase and a statement that such Holder is withdrawing his election to
have such Note purchased;
(h) that, if the aggregate principal amount of Notes surrendered by
Holders exceeds the Offer Amount, the Company shall select the Notes to
be purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Company so that only Notes in denominations of
$1,000, or integral multiples thereof, shall be purchased); and
(i) that Holders whose Notes were purchased only in part shall be
issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered (or transferred by book-entry transfer).
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On or before the Purchase Date, the Company shall, to the extent lawful,
accept for payment, on a pro rata basis to the extent necessary, the Offer
Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer,
or if less than the Offer Amount has been tendered, all Notes tendered, and
shall deliver to the Trustee an Officers' Certificate stating that such Notes or
portions thereof were accepted for payment by the Company in accordance with the
terms of this Section 1.01(18). The Company, the Depositary or the Paying Agent,
as the case may be, shall promptly (but in any case not later than five days
after the Purchase Date) mail or deliver to each tendering Holder an amount
equal to the purchase price of the Notes tendered by such Holder and accepted by
the Company for purchase, and the Company shall promptly issue a new Note, and
the Trustee, upon written request from the Company shall authenticate and mail
or deliver such new Note to such Holder, in a principal amount equal to any
unpurchased portion of the Note surrendered. Any Note not so accepted shall be
promptly mailed or delivered by the Company to the Holder thereof. The Company
shall publicly announce the results of the Asset Sale Offer on the Purchase
Date.
Other than as specifically provided in this Section 1.01(18), any
purchase pursuant to this Section 1.01(18) shall be made pursuant to the
provisions of Article 12 of the Indenture.
(19) The Notes shall not be subordinated to any other debt of the
Company and shall constitute senior unsecured obligations of the Company.
(20) The Notes shall only be issuable as Registered Securities and shall
not be issuable as Bearer Securities.
(21) The Company appoints The Depositary Trust Company ("DTC") to act as
Depositary with respect to the Global Notes.
(22) The Notes shall not be issuable in definitive form except under the
limited circumstances described in Section 2.02 of this Supplemental Indenture.
SECTION 1.02. FORMS OF THE NOTES.
(1) Attached hereto as Exhibit A is the form of Global Note representing
the Notes.
ARTICLE II.
TRANSFER AND EXCHANGE
SECTION 2.01. FORM. (1) Except under the limited circumstances
stated in Section 2.01(2) of this Supplemental Indenture, the Notes will be
issued only in the form of Registered Securities in global form. Pursuant to
Section 4.2 of the Indenture, the Company shall have such Registered Securities,
in the form of one or more Global Notes, authenticated and delivered.
(2) Following the issuance of the Notes, the Global Notes will be
exchangeable for Definitive Notes in registered form with the same terms as the
Global Notes only if one of the following events occurs: (i) the Depositary is
unwilling or unable to continue to act as a depositary or the Depositary ceases
to be a clearing agency registered and in good standing under
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the Exchange Act or other applicable statutes or regulations and, in each case,
a successor depositary is not appointed by the Company within 90 days after the
Company receives such notice or becomes aware of such condition, pursuant to
Section 4.12(b) of the Indenture; (ii) the Company decides, in its sole
discretion, to exchange the Global Notes, in whole or in part, for Definitive
Notes and delivers a written notice to such effect to the Trustee, pursuant to
Section 4.12(c) of the Indenture; or (iii) an Event of Default shall have
occurred and be continuing, pursuant to Section 4.12(d) of the Indenture.
SECTION 2.02. TRANSFER AND EXCHANGE. The following hereby
supersedes Section 4.4 of the Indenture with respect of the Notes except that
the first two paragraphs and the ninth paragraph of Section 4.4 of the Indenture
are still applicable to the Notes.
(1) Transfer and Exchange of Global Notes A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, the Depositary or any such nominee to a successor Depositary or a
nominee of such successor Depositary. A Global Note will be exchanged by the
Company for Definitive Notes solely if one of the events described in Section
2.02(2) of this Supplemental Indenture occurs, whereupon Definitive Notes shall
be issued in such names as the Depositary shall instruct the Trustee. A Global
Note also may be exchanged or replaced, in whole or in part, as provided in
Sections 4.3 and 4.5 of the Indenture. Every Note authenticated and delivered in
exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to
this Section 2.02(1) or Sections 4.3 or 4.5 of the Indenture, shall be
authenticated and delivered in the form of, and shall be, a Global Note. A
Global Note may not be exchanged for another Note other than as provided in this
Section 2.02(1); however, beneficial interests in a Global Note may be
transferred and exchanged as provided in Section 2.02(2) or (3) of this
Supplemental Indenture.
(2) Transfer and Exchange of Beneficial Interests in the Global Notes.
The transfer and exchange of beneficial interests in the Global Notes shall be
effected through the Depositary, in accordance with the provisions of the
Indenture, this Supplemental Indenture and the rules and procedures of the
Depositary. Transfers of beneficial interests in the Global Notes also shall
require compliance with subparagraph (a) below:
(a) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Global Note may be transferred to Persons
who take delivery thereof in the form of a beneficial interest in a
Global Note. No written orders or instructions shall be required to be
delivered to the Registrar to effect the transfers described in this
Section 2.02(2)(a).
(3) Transfer or Exchange of Beneficial Interests in the Global Notes for
Definitive Notes. If any Holder of a beneficial interest in a Global Note
proposes to exchange such beneficial interest for a Definitive Note or to
transfer such beneficial interest to a Person who takes delivery thereof in the
form of a Definitive Note, then the Trustee shall cause the aggregate principal
amount of the applicable Global Note to be reduced accordingly pursuant to
Section 2.02(7) of this Supplemental Indenture, and the Company shall execute
and the Trustee shall authenticate and make available for delivery to the Person
designated in the instructions a
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Definitive Note in the appropriate principal amount. Any Definitive Note issued
in exchange for a beneficial interest pursuant to this Section 2.02(3) shall be
registered in such name or names and in such authorized denomination or
denominations as the Holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the participant or
indirect participant.
(4) Transfer and Exchange of Definitive Notes for Beneficial Interests
in Global Notes. A Holder of a Definitive Note may exchange such Note for a
beneficial interest in a Global Note or transfer such Definitive Notes to a
Person who takes delivery thereof in the form of a beneficial interest in a
Global Note at any time. Upon receipt of a request for such an exchange or
transfer, the Trustee shall cancel the applicable Definitive Note and increase
or cause to be increased the aggregate principal amount of the Global Note.
(5) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon
request by a Holder of Definitive Notes and such Holder's compliance with the
provisions of this Section 2.02(5), the Registrar shall register the transfer or
exchange of Definitive Notes. Prior to such registration of transfer or
exchange, the requesting Holder shall present or surrender to the Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form attached to the Note duly executed by such Holder or by such
person's attorney, duly authorized in writing. In addition, the requesting
Holder shall provide any additional certifications, documents and information,
as applicable, required pursuant to the following provisions of this Section
2.02(5). A Holder of Definitive Notes may transfer such Notes to a Person who
takes delivery thereof in the form of a Definitive Note.
(6) Global Note Legends. The following legends shall appear on the face
of the Global Notes issued under this Supplemental Indenture in substantially
the following form, unless specifically stated otherwise in the applicable
provisions of this Supplemental Indenture:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE
BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO
ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY
MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION
4.5 OF THE ORIGINAL INDENTURE, (II) THIS GLOBAL NOTE MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.02 OF THE
SUPPLEMENTAL INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO
THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 4.8 OF THE
ORIGINAL INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO
A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE
COMPANY."
"Unless this certificate is presented by an authorized
representative of the Depository Trust Company, a New York
corporation ("DTC"), to the issuer or its agent for registration of
transfer, exchange or payment, and any
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certificate issued is registered in the name of Cede & Co. or in
such other name as is requested by an authorized representative of
DTC (and any payment is made to Cede & Co. or to such other entity
as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL isasmuch as the registered owner hereof,
Cede & Co., has an interest herein."
(7) Cancellation and/or Adjustment of the Global Notes. At such time as
all beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note shall be returned to or
retained and canceled by the Trustee in accordance with Section 4.8 of the
Indenture. At any time prior to such cancellation, if any beneficial interest in
a Global Note is exchanged for or transferred to a Person who will take delivery
thereof in the form of a beneficial interest in another Global Note or for
Definitive Notes, the principal amount of Notes represented by such Global Note
shall be reduced accordingly and an endorsement shall be made on such Global
Note by the Trustee or by the Depositary at the direction of the Trustee to
reflect such reduction; and if the beneficial interest is being exchanged for or
transferred to a Person who will take delivery thereof in the form of a
beneficial interest in another Global Note, such other Global Note shall be
increased accordingly and an endorsement shall be made on such Global Note by
the Trustee or by the Depositary at the direction of the Trustee to reflect such
increase.
(8) General Provisions Relating to Transfers and Exchanges.
(a) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate the Global Notes, and
Definitive Notes if any, upon the Company's order pursuant to Section 4.2 of the
Indenture or at the Registrar's request.
(b) No service charge shall be made to a Holder of a beneficial
interest in a Global Note or to a Holder of a Definitive Note for any
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith (other than any such transfer tax or similar
governmental charge payable upon exchange or transfer pursuant to Sections 4.3
and, in connection with any any registration of transfer and exchange, pursuant
to Section 12.7 of the Indenture and Sections 1.01(15)(a), (b), (17)(e) and (18)
of this Supplemental Indenture).
(c) The Registrar shall not be required to register the transfer
of or exchange any Note selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part.
(d) The Global Notes and Definitive Notes, if any, issued upon
any registration of transfer or exchange of Global Notes or Definitive Notes, if
any, shall be the valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under the Indenture, this Supplemental
Indenture as the Global Notes or Definitive Notes, if any, surrendered upon such
registration of transfer or exchange.
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(e) The Company shall not be required (a) to issue, to register
the transfer of or to exchange any Notes during a period beginning at the
opening of business 15 Business Days before the day of any selection of Notes
for redemption under Section 12.3 of the Indenture and ending at the close of
business on the day of selection, (b) to register the transfer of or to exchange
any Note so selected for redemption in whole or in part, except the unredeemed
portion of any Note being redeemed in part or (c) to register the transfer of or
to exchange a Note between a Regular Record Date and the next succeeding
Interest Payment Date.
(f) The Trustee, any agent of the Trustee and the Company may
deem and treat the Person in whose name any Note is registered on the Security
Register as the absolute owner of such Note for the purpose of receiving payment
of principal of and interest on such Note and for all other purposes, and none
of the Trustee or the Company shall be affected by notice to the contrary.
(g) The Trustee shall authenticate the Global Notes and
Definitive Notes, if any, in accordance with Section 4.2 of the Indenture.
(h) All certifications, certificates and opinions of counsel
required to be submitted to the Registrar pursuant to this Section 2.02 to
effect a registration of transfer or exchange may be submitted by facsimile.
ARTICLE III.
DEFINITIONS
SECTION 3.01. ADDITIONAL DEFINITIONS. In addition to the definitions set
forth in Article I of the Indenture, the Notes shall include the following
additional definitions, which, in the event of a conflict with the definition of
terms in the Indenture, shall control:
"Acquired Debt" means, with respect to any specified Person: (1)
Indebtedness of any other Person existing at the time such other Person
is merged with or into or became a Restricted Subsidiary of such
specified Person, whether or not such Indebtedness is incurred in
connection with, or in contemplation of, such other Person merging with
or into, or becoming a Restricted Subsidiary of, such specified Person;
and (2) Indebtedness secured by a Lien encumbering any asset acquired by
such specified Person to the extent of the fair market value of such
asset.
"Act" means the Securities Act of 1933, as amended.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this
definition, "control," as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through
the ownership of voting securities, by agreement or otherwise; provided
that beneficial ownership of 10% or more of the Voting Stock of a Person
shall be deemed to be control. For purposes of this definition, the terms
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"controlling," "controlled by" and "under common control with" shall have
correlative meanings.
"Amended Credit Agreement" means that certain Amended Credit
Agreement, dated as of December 11, 1998, by and among the Company and
the lenders party thereto, providing for up to $350.0 million of
revolving credit borrowings, including any related Notes, Guarantees,
lines of credit, collateral documents, instruments and agreements
executed in connection therewith, and in each case as amended, modified,
renewed, refunded, replaced or refinanced from time to time.
"Applicable Premium" means, with respect to any Note on any
Redemption Date, the greater of: (1) 1.0% of the principal amount of the
Note; or (2) the excess of: (a) the present value at such Redemption Date
of (i) the principal amount of the Note at February 15, 2006 plus (ii)
all required interest payments due on the Note through February 15, 2006
(excluding accrued but unpaid interest), computed using a discount rate
equal to the Treasury Rate as of such Redemption Date plus 50 basis
points; over (b) the principal amount of the Note.
"Asset Sale" means: (1) the sale, lease, conveyance or other
disposition of any assets or rights, other than sales of inventory in the
ordinary course of business consistent with past practices; provided that
the sale, conveyance or other disposition of all or substantially all of
the assets of the Company and its Restricted Subsidiaries taken as a
whole will be governed by Section 1.01(15)(b) and/or Section 1.01(16) of
this Supplemental Indenture and not by the provisions of Section
1.01(15)(a) of this Supplemental Indenture; and (2) the issuance of
Equity Interests in any of the Company's Restricted Subsidiaries or the
sale of Equity Interests in any of its Restricted Subsidiaries.
Notwithstanding the preceding, the following items shall not be deemed to
be Asset Sales: (1) any single transaction or series of related
transactions that: (a) involves assets having a fair market value of less
than $5.0 million; or (b) results in net proceeds to the Company and its
Restricted Subsidiaries of less than $5.0 million; (2) a transfer of
assets between or among the Company and its Restricted Subsidiaries, (3)
an issuance of Equity Interests by a Restricted Subsidiary to the Company
or to another Restricted Subsidiary; (4) the sale or lease of equipment,
inventory, accounts receivable or other assets in the ordinary course of
business; (5) the sale or other disposition of cash or Cash Equivalents;
(6) the licensing of the Company's Intellectual Property in the ordinary
course of business; provided that the aggregate licensing and other fees
paid in respect of all such Intellectual Property shall not exceed $15.0
million per annum; and (7) a Restricted Payment or Permitted Investment
that is permitted by Section 1.01(15)(d) of this Supplemental Indenture.
"Attributable Debt" in respect of a sale and leaseback transaction
means, at the time of determination, the present value of the obligation
of the lessee for net rental payments during the remaining term of the
lease included in such sale and leaseback transaction including any
period for which such lease has been extended
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or may, at the option of the lessor, be extended. Such present value
shall be calculated using a discount rate equal to the rate of interest
implicit in such transaction, determined in accordance with GAAP.
"Beneficial Owner" has the meaning assigned to such term in Rule
13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating
the beneficial ownership of any particular "person" (as that term is used
in Section 13(d)(3) of the Exchange Act), such "person" shall be deemed
to have beneficial ownership of all securities that such "person" has the
right to acquire by conversion or exercise of other securities, whether
such right is currently exercisable or is exercisable only upon the
occurrence of a subsequent condition. The term "beneficially owns" shall
have a corresponding meaning.
"Capital Lease Obligation" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a
capital lease that would at that time be required to be capitalized on a
balance sheet in accordance with GAAP.
"Capital Stock" means: (1) in the case of a corporation, corporate
stock; (2) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock; (3) in the case of a partnership or
limited liability company, partnership or membership interests (whether
general or limited); and (4) any other interest or participation that
confers on a Person the right to receive a share of the profits and
losses of, or distributions of assets of, the issuing Person.
"Cash Equivalents" means: (1) United States dollars; (2) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof (provided that the
full faith and credit of the United States is pledged in support thereof)
having maturities of not more than one year from the date of acquisition;
(3) certificates of deposit and eurodollar time deposits with maturities
of one year or less from the date of acquisition, bankers' acceptances
with maturities not exceeding one year and overnight bank deposits, in
each case, with any lender party to the Amended Credit Agreement or with
any commercial bank located in the United States having capital and
surplus in excess of $500.0 million and a Thompson Bank Watch Rating of
"B" or better; (4) repurchase obligations with a term of not more than
seven days for underlying securities of the types described in clauses
(2) and (3) above entered into with any financial institution meeting the
qualifications specified in clause (3) above; (5) commercial paper having
the highest rating obtainable from Moody's or Standard & Poor's and in
each case maturing within six months after the date of acquisition; (6)
money market funds at least 95% of the assets of which constitute Cash
Equivalents of the kinds described in clauses (1) through (5) of this
definition; and (7) in the case of Investments made by any Foreign
Subsidiary, obligations, deposits and repurchase obligations comparable
to those specified in clauses (2), (3) and (4) above (except that such
obligations may be issued or guaranteed by the country in which such
Foreign Subsidiary is located and such deposits and repurchase
obligations may be
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made with comparable banks and trust companies located in such
countries); provided, in the case of Investments comparable to those
specified in clauses (2) and (3) above, that such Investment matures (or
permits the holder thereof at its option to require repayment or
repurchase thereof) within 90 days from the acquisition thereof by the
Company or a Foreign Subsidiary of the Company.
"Change of Control" means the occurrence of any of the following:
(1) the direct or indirect sale, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a
series of related transactions, of all or substantially all of the
properties or assets of the Company and its Restricted Subsidiaries taken
as a whole to any "person" (as that term is used in Section 13(d)(3) of
the Exchange Act); (2) the adoption of a plan relating to the liquidation
or dissolution of the Company; (3) the consummation of any transaction
(including, without limitation, any merger or consolidation) the result
of which is that any "person" (as defined above) becomes the Beneficial
Owner, directly or indirectly, of more than 50% of the Voting Stock of
the Company, measured by voting power rather than number of shares; (4)
the first day on which a majority of the members of the Board of
Directors of the Company are not Continuing Directors; or (5) the Company
consolidates with, or merges with or into, any Person, or any Person
consolidates with, or merges with or into, the Company, in any such event
pursuant to a transaction in which any of the outstanding Voting Stock of
the Company or such other Person is converted into or exchanged for cash,
securities or other property, other than any such transaction where the
Voting Stock of the Company outstanding immediately prior to such
transaction is converted into or exchanged for Voting Stock (other than
Disqualified Stock) of the surviving or transferee Person constituting a
majority of the outstanding shares of such Voting Stock of such surviving
or transferee Person (immediately after giving effect to such issuance).
"Consolidated Cash Flow" means, with respect to any specified
Person for any period, the Consolidated Net Income of such Person for
such period plus: (1) an amount equal to any extraordinary loss plus any
net loss realized by such Person or any of its Restricted Subsidiaries in
connection with an Asset Sale, to the extent such losses were deducted in
computing such Consolidated Net Income; plus (2) provision for taxes
based on income or profits of such Person and its Restricted Subsidiaries
for such period, to the extent that such provision for taxes was deducted
in computing such Consolidated Net Income; plus (3) consolidated interest
expense of such Person and its Restricted Subsidiaries for such period,
whether paid or accrued and whether or not capitalized (including,
without limitation, amortization of debt issuance costs and original
issue discount, non-cash interest payments, the interest component of any
deferred payment obligations, the interest component of all payments
associated with Capital Lease Obligations, imputed interest with respect
to Attributable Debt, commissions, discounts and other fees and charges
incurred in respect of letter of credit or bankers' acceptance
financings, and net of the effect of all payments made or received
pursuant to Hedging Obligations), to the extent that any such expense was
deducted in computing such Consolidated Net Income; plus (4)
depreciation, amortization (including amortization of goodwill and
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other intangibles but excluding amortization of prepaid cash expenses
that were paid in a prior period) and other non-cash expenses (excluding
any such non-cash expense to the extent that it represents an accrual of
or reserve for cash expenses in any future period or amortization of a
prepaid cash expense that was paid in a prior period) of such Person and
its Restricted Subsidiaries for such period to the extent that such
depreciation, amortization and other non-cash expenses were deducted in
computing such Consolidated Net Income; plus (5) the aggregate amount of
restructurings, write-downs and reserves of Russian and other assets by
the Company during 1998 as described in the Prospectus Supplement under
the caption "Management's Discussion and Analysis of Financial Condition
and Results of Operations--Overview" to the extent such write-downs and
reserves were deducted in computing Consolidated Net Income; provided
that the aggregate amount added to Consolidated Cash Flow pursuant to
this clause (5) shall not exceed $100.0 million; plus (6) non-cash
compensation expense incurred in connection with the Company's employee
stock ownership plan to the extent such compensation expense was deducted
in computing Consolidated Net Income; minus (7) non-cash items increasing
such Consolidated Net Income for such period, other than the accrual of
revenue in the ordinary course of business, in each case, on a
consolidated basis and determined in accordance with GAAP.
"Consolidated Net Income" means, with respect to any specified
Person for any period, the aggregate of the Net Income of such Person and
its Restricted Subsidiaries for such period, on a consolidated basis,
determined in accordance with GAAP; provided that: (1) the Net Income
(but not loss) of any Person that is not a Restricted Subsidiary or that
is accounted for by the equity method of accounting shall be included
only to the extent of the amount of dividends or distributions paid in
cash to the specified Person or a Restricted Subsidiary thereof; (2) the
Net Income of any Restricted Subsidiary shall be excluded to the extent
that the declaration or payment of dividends or similar distributions by
that Restricted Subsidiary of that Net Income is not at the date of
determination permitted without any prior governmental approval (that has
not been obtained) or, directly or indirectly, by operation of the terms
of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Restricted
Subsidiary or its stockholders; (3) the Net Income of any Person acquired
in a pooling of interests transaction for any period prior to the date of
such acquisition shall be excluded; (4) the Net Income (but not loss) of
any Unrestricted Subsidiary shall be excluded, whether or not distributed
to the specified person or one of its Subsidiaries; and (5) the
cumulative effect of a change in accounting principles shall be excluded.
"Consolidated Tangible Assets" means the total assets shown on the
most recent quarterly reviewed consolidated balance sheet of the Company
and its consolidated subsidiaries, after deducting the amount of all
goodwill, trademarks and other intangibles.
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"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company who: (1) was a member of
such Board of Directors on the Issue Date; or (2) was nominated for
election or elected to such Board of Directors with the approval of a
majority of the Continuing Directors who were members of such Board at
the time of such nomination or election.
"Credit Facilities" means, with respect to the Company or any of
its Domestic Restricted Subsidiaries, one or more debt facilities
(including, without limitation, the Amended Credit Agreement) or
commercial paper facilities, in each case, with banks or other
institutional lenders providing for revolving credit loans, term loans,
receivables financing (including through the sale of receivables to such
lenders or to special purpose entities formed to borrow from such lenders
against such receivables), bankers' acceptances or letters of credit, in
each case, as amended, restated, modified, renewed, refunded, replaced or
refinanced in whole or in part from time to time.
"Default" means any event that is, or with the passage of time or
the giving of notice or both would be, an Event of Default.
"Definitive Note" means a certificated Note registered in the name
of the Holder thereof and issued in accordance with Article 2 of this
Supplemental Indenture, in the form of Exhibit A hereto except that such
Note shall not bear the Global Note Legends and shall not have the
"Schedule of Exchanges of Interests in the Global Note" attached thereto.
"Depositary" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in clause (20) of
Section 1.01 of this Supplemental Indenture as the Depositary with
respect to the Notes, any and all successors thereto appointed as
depositary hereunder and having become such pursuant to the applicable
provisions of the Indenture and the Supplemental Indenture.
"Designated Assets" means (1) the common stock of SDI Holding Corp.
and the preferred stock of Sterling Dry Imaging Systems, Inc., in each
case, held by the Company on the Issue Date, (2) the Company's graphics
imaging business and all assets used primarily in connection therewith,
including, without limitation, the Company's Graphic Imaging division,
and (3) the Company's new coating facility located in New Bedford,
Massachusetts.
"Disqualified Stock" means any Capital Stock that, by its terms (or
by the terms of any security into which it is convertible, or for which
it is exchangeable, in each case at the option of the holder thereof), or
upon the happening of any event, matures or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, or redeemable at the
option of the holder thereof, in whole or in part, on or prior to the
date that is 91 days after the date on which the Notes mature (other than
Capital Stock that is mandatorily convertible or exchangeable into Equity
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Interests of the Company that are not themselves Disqualified Stock).
Notwithstanding the preceding sentence, any Capital Stock that would
constitute Disqualified Stock solely because the holders thereof have the
right to require the Company to repurchase such Capital Stock upon the
occurrence of a change of control or an asset sale shall not constitute
Disqualified Stock if the terms of such Capital Stock provide that the
Company may not repurchase or redeem any such Capital Stock pursuant to
such provisions unless such repurchase or redemption complies with
Section 1.01(15)(d) of this Supplemental Indenture.
"Domestic Restricted Subsidiary" means any Restricted Subsidiary
that was formed under the laws of the United States or any state thereof
or the District of Columbia or that guarantees or otherwise provides
direct credit support for any Indebtedness of the Company.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security
that is convertible into, or exchangeable for, Capital Stock).
"Equity Offering" means (i) any issuance of common stock by the
Company (other than to an Affiliate of the Company) that is registered
pursuant to the Securities Act, other than issuances that would, on the
Issue Date, be required to be registered on Form S-8 or Form S-4 and (ii)
any private issuance of common stock by the Company (other than to an
Affiliate of the Company), excluding, in the case of clauses (i) and (ii)
above, issuances of common stock pursuant to employee benefit plans or
otherwise as compensation to employees of the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Existing Indebtedness" means up to $520.0 million in aggregate
principal amount of Indebtedness of the Company and its Subsidiaries
(other than Indebtedness under the Amended Credit Agreement and Foreign
Credit Facilities) in existence on the Issue Date, until such amounts are
repaid.
"Fair Market Value" means the fair market value of any Asset Sale,
Investment, property or asset based upon (a) with respect to any Asset
Sale, Investment, property or asset in an amount less than $10.0 million,
a certificate of the Company's chief executive officer or chief financial
officer, (b) with respect to any Asset Sale, Investment, property or
asset in an amount equal to or greater than $10.0 million and less than
$50.0 million, a certificate of the Company's chief executive officer or
chief financial officer approved by the Company's Board of Directors
whose resolution with respect thereto shall be delivered to the Trustee
and (c) with respect to any Asset Sale, Investment, property or asset in
an amount equal to or in excess of $50.0 million, an opinion or appraisal
issued by an accounting, appraisal or investment banking firm of national
standing approved by the Company's Board of Directors whose resolution
with respect thereto shall be delivered to the Trustee.
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"Fixed Charges" means, with respect to any specified Person for any
period, the sum, without duplication, of: (1) the consolidated interest
expense of such Person and its Restricted Subsidiaries for such period,
whether paid or accrued, including, without limitation, amortization of
debt issuance costs and original issue discount, non-cash interest
payments, the interest component of any deferred payment obligations, the
interest component of all payments associated with Capital Lease
Obligations, imputed interest with respect to Attributable Debt,
commissions, discounts and other fees and charges incurred in respect of
letter of credit or bankers' acceptance financings, and net of the effect
of all payments made or received pursuant to Hedging Obligations; plus
(2) the consolidated interest of such Person and its Restricted
Subsidiaries that was capitalized during such period; plus (3) any
interest expense on Indebtedness of another Person that is Guaranteed by
such Person or one of its Restricted Subsidiaries or secured by a Lien on
assets of such Person or one of its Restricted Subsidiaries, whether or
not such Guarantee or Lien is called upon; plus (4) the product of (a)
all dividend payments, whether or not in cash, on any series of preferred
stock of such Person or any of its Restricted Subsidiaries, other than
dividend payments on Equity Interests payable solely in Equity Interests
of the Company (other than Disqualified Stock) or to the Company or a
Restricted Subsidiary of the Company, times (b) a fraction, the numerator
of which is one and the denominator of which is one minus the then
current combined federal, state and local statutory tax rate of such
Person, expressed as a decimal, in each case, on a consolidated basis and
in accordance with GAAP.
"Fixed Charge Coverage Ratio" means with respect to any specified
Person for any period, the ratio of the Consolidated Cash Flow of such
Person and its Restricted Subsidiaries for such period to the Fixed
Charges of such Person and its Restricted Subsidiaries for such period.
In the event that the specified Person or any of its Restricted
Subsidiaries incurs, assumes, Guarantees, repays, repurchases or redeems
any Indebtedness (other than ordinary working capital borrowings) or
issues, repurchases or redeems preferred stock subsequent to the
commencement of the period for which the Fixed Charge Coverage Ratio is
being calculated and on or prior to the date on which the event for which
the calculation of the Fixed Charge Coverage Ratio is made (the
"Calculation Date"), then the Fixed Charge Coverage Ratio shall be
calculated giving pro forma effect to such incurrence, assumption,
Guarantee, repayment, repurchase or redemption of Indebtedness, or such
issuance, repurchase or redemption of preferred stock, and the use of the
proceeds therefrom as if the same had occurred at the beginning of the
applicable four-quarter reference period.
In addition, for purposes of calculating the Fixed Charge Coverage
Ratio: (1) acquisitions that have been made by the specified Person or
any of its Restricted Subsidiaries, including through mergers or
consolidations and including any related financing transactions, during
the four-quarter reference period or subsequent to such reference period
and on or prior to the Calculation Date shall be given pro forma effect
as if they had occurred on the first day of the four-quarter reference
period and Consolidated Cash Flow for such reference period shall be
calculated on
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a pro forma basis in accordance with Regulation S-X under the Securities
Act, but without giving effect to clause (3) of the proviso set forth in
the definition of Consolidated Net Income; (2) the Consolidated Cash Flow
attributable to discontinued operations, as determined in accordance with
GAAP, and operations or businesses disposed of prior to the Calculation
Date, shall be excluded; and (3) the Fixed Charges attributable to
discontinued operations, as determined in accordance with GAAP, and
operations or businesses disposed of prior to the Calculation Date, shall
be excluded, but only to the extent that the obligations giving rise to
such Fixed Charges will not be obligations of the specified Person or any
of its Restricted Subsidiaries following the Calculation Date.
"Foreign Borrowing Base" means, with respect to any Foreign
Subsidiary, as of any date, an amount not to exceed the sum of (a) 85% of
the net book value of all non-affiliate accounts receivable owned by such
Foreign Subsidiary as of such date, and (b) 60% of the book value of all
inventory owned by such Foreign Subsidiary as of such date, all
calculated on a consolidated basis and in accordance with GAAP. To the
extent that information is not available as to the amount of accounts
receivable or inventory as of a specific date, the Company may utilize
the most recent available information for purposes of calculating the
Foreign Borrowing Base.
"Foreign Credit Facilities" means, with respect to any of the
Company's Foreign Subsidiaries, one or more debt facilities or commercial
paper facilities, in each case with banks or other institutional lenders
providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special
purpose entities formed to borrow from such lenders against such
receivables) or letters of credit, in each case, as amended, restated,
modified, renewed, refunded, replaced or refinanced in whole or in part
from time to time.
"Foreign Subsidiary" means any Restricted Subsidiary that is not a
Domestic Restricted Subsidiary.
"GAAP" means generally accepted accounting principles in the United
States set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as have
been approved by a significant segment of the accounting profession,
which are in effect from time to time.
"Global Note" means the Global Note in the form of Exhibit A hereto
issued in accordance with Article 4 of the Indenture and Article 2 of
this Supplemental Indenture.
"Global Note Legend" means the legend set forth in Section 2.6,
which is required to be placed on the Global Note issued under this
Supplemental Indenture.
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"Guarantee" means a guarantee other than by endorsement of
negotiable instruments for collection in the ordinary course of business,
direct or indirect, in any manner including, without limitation, by way
of a pledge of assets or through letters of credit or reimbursement
agreements in respect thereof, of all or any part of any Indebtedness.
"Guarantor" means each Subsidiary of the Company that executes and
delivers a supplemental indenture pursuant to Section 1.01(15)(j) of this
Supplemental Indenture.
"Hedging Obligations" means, with respect to any specified Person,
the obligations of such Person under: (1) interest rate swap agreements,
interest rate cap agreements, interest rate collar agreements and foreign
exchange hedging agreements; and (2) other agreements or arrangements
entered into in the ordinary course of business designed to protect such
Person against fluctuations in interest rates and foreign exchange rates.
"Indebtedness" means, with respect to any specified Person, any
debt of such Person, whether or not contingent, in respect of: (1)
borrowed money; (2) evidenced by bonds, notes, debentures or similar
instruments or letters of credit (or reimbursement agreements in respect
thereof); (3) banker's acceptances or similar instruments (excluding any
such obligations which do not arise from a repayment of Indebtedness and
which are repaid within three business days of the date incurred); (4)
Capital Lease Obligations; (5) the balance deferred and unpaid of the
purchase price of any property, except any such balance that constitutes
an accrued expense or trade payable; or (6) Hedging Obligations, if and
to the extent any of the preceding items (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet
of the specified Person prepared in accordance with GAAP. In addition,
the term "Indebtedness" includes all Indebtedness of others secured by a
Lien on any asset of the specified Person (whether or not such
Indebtedness is assumed by the specified Person) but excludes (where such
Indebtedness is not assumed by such Person) any such Indebtedness in
excess of the fair market value of such asset. The term "Indebtedness"
also includes, to the extent not otherwise included, the Guarantee by the
specified Person of any debt of any other Person. The amount of any
Indebtedness outstanding as of any date shall be: (1) the accreted value
thereof, in the case of any Indebtedness issued with original issue
discount; and (2) the principal amount thereof, together with any
interest thereon that is more than 30 days past due, in the case of any
other Indebtedness.
"Intellectual Property" means all intellectual property rights,
including proprietary technology; patents; patent applications;
trademarks; trademark applications and registrations; all mask works and
all applications, registrations and renewals in connection therewith;
service marks; service mark applications and registrations; logos; trade
names; copyrights; know-how; licenses; trade secrets; formulas; all
inventions, whether patentable or unpatentable and whether or not reduced
to practice; proprietary computer programs, hardware, software and
related
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processes; and all other designs, properties, rights, and related
proprietary rights and processes.
"Investments" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of
direct or indirect loans (including Guarantees or other obligations),
advances or capital contributions (excluding commission, travel and
similar advances to officers and employees made in the ordinary course of
business), purchases or other acquisitions for consideration of
Indebtedness, Equity Interests or other securities, together with all
items that are or would be classified as investments on a balance sheet
prepared in accordance with GAAP. If the Company or any Restricted
Subsidiary of the Company sells or otherwise disposes of any Equity
Interests of any direct or indirect Restricted Subsidiary of the Company
such that, after giving effect to any such sale or disposition, such
Person is no longer a Restricted Subsidiary of the Company, the Company
shall be deemed to have made an Investment on the date of any such sale
or disposition equal to the fair market value of the Equity Interests of
such Restricted Subsidiary not sold or disposed of in an amount
determined as provided in the final paragraph of Section 1.01(15)(d) of
this Supplemental Indenture.
"Issue Date" means the date on which the Notes were originally
issued.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect
of such asset, whether or not filed, recorded or otherwise perfected
under applicable law, including any conditional sale or other title
retention agreement, any lease in the nature thereof, any option or other
agreement to sell or give a security interest in and any filing of or
agreement to give any financing statement under the Uniform Commercial
Code (or equivalent statutes) of any jurisdiction.
"Net Income" means, with respect to any specified Person, the net
income (loss) of such Person, determined in accordance with GAAP and
before any reduction in respect of preferred stock dividends, excluding,
however: (1) any gain (but not loss), together with any related provision
for taxes on such gain (but not loss), realized in connection with: (a)
any Asset Sale; or (b) the disposition of any securities by such Person
or any of its Restricted Subsidiaries or the extinguishment of any
Indebtedness of such Person or any of its Restricted Subsidiaries; and
(2) any extraordinary gain (but not loss), together with any related
provision for taxes on such extraordinary gain (but not loss).
"Net Proceeds" means the aggregate cash proceeds received by the
Company or any of its Restricted Subsidiaries in respect of any Asset
Sale (including, without limitation, any cash received upon the sale or
other disposition of any non-cash consideration received in any Asset
Sale), net of the direct costs relating to such Asset Sale, including,
without limitation, legal, accounting and investment banking fees, and
sales commissions, and any relocation expenses incurred as a result
thereof, taxes paid or payable as a result thereof, in each case, after
taking into
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account any available tax credits or deductions and any tax sharing
arrangements, and amounts required to be applied to the repayment of
Indebtedness (other than Indebtedness under any one or more Credit
Facilities) secured by a lien on the asset or assets that were the
subject of such Asset Sale, and any reserve for adjustment in respect of
the sale price of such asset or assets established in accordance with
GAAP.
"Non-Recourse Debt" means Indebtedness: (1) as to which neither the
Company nor any of its Restricted Subsidiaries (a) provides credit
support of any kind (including any undertaking, agreement or instrument
that would constitute Indebtedness), (b) is directly or indirectly liable
as a guarantor or otherwise, or (c) constitutes the lender; (2) no
default with respect to which (including any rights that the holders
thereof may have to take enforcement action against an Unrestricted
Subsidiary) would permit upon notice, lapse of time or both any holder of
any other Indebtedness (other than the Notes) of the Company or any of
its Restricted Subsidiaries to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable
prior to its stated maturity; and (3) as to which the lenders have been
notified in writing that they will not have any recourse to the stock or
assets of the Company or any of its Restricted Subsidiaries.
"Obligations" means any principal, premium if any, interest,
penalties, fees, indemnifications, Guarantees, reimbursements, damages
and other liabilities payable under the documentation governing any
Indebtedness.
"Permitted Business" means any of the lines of business conducted
by the Company and its Restricted Subsidiaries on the Issue Date and any
business similar, ancillary or related thereto or which constitutes a
reasonable extension or expansion thereof, including in connection with
the Company's existing and future technology, trademarks and patents.
"Permitted Investments" means:
(1) any Investment in the Company or in a Domestic Restricted
Subsidiary of the Company;
(2) any Investment in Cash Equivalents;
(3) any Investment by the Company or any Restricted Subsidiary of
the Company in a Person engaged in a Permitted Business, if as a result
of such Investment: (a) such Person becomes a Domestic Restricted
Subsidiary of the Company; or (b) such Person is merged, consolidated or
amalgamated with or into, or transfers or conveys substantially all of
its assets to, or is liquidated into, the Company or a Domestic
Restricted Subsidiary of the Company;
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(4) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in
compliance with Section 1.01(15)(a) of this Supplemental Indenture;
(5) any acquisition of assets solely in exchange for the issuance
of Equity Interests (other than Disqualified Stock) of the Company;
(6) any Restricted Investment existing on the Issue Date and any
Restricted Investment that replaces, refinances or refunds such a
Restricted Investment, provided that the replacing, refinancing or
refunding Investment is in an amount that does not exceed the amount so
replaced, refinanced or refunded;
(7) Hedging Obligations;
(8) any Investment by a Foreign Subsidiary of the Company in any
other Foreign Subsidiary of the Company;
(9) additional Investments in Foreign Subsidiaries of the Company
that are engaged in a Permitted Business having an aggregate fair market
value (measured on the date each such Investment was made and without
giving effect to subsequent changes in value), when taken together with
all other Investments made pursuant to this clause (9) that are at the
time outstanding, not to exceed $20.0 million; and
(10) other Investments in any Person engaged in a Permitted
Business having an aggregate fair market value (measured on the date each
such Investment was made and without giving effect to subsequent changes
in value), when taken together with all other Investments made pursuant
to this clause (10) that are at the time outstanding, not to exceed the
greater of (a) $50.0 million and (b) 3.0% of Consolidated Tangible
Assets.
"Permitted Liens" means:
(1) Liens on assets of the Company or any Guarantor securing
Indebtedness and other Obligations under Credit Facilities that were
permitted by the terms of the Indenture and this Supplemental Indenture
to be incurred;
(2) Liens on assets of any Foreign Subsidiary securing Indebtedness
and other Obligations under Foreign Credit Facilities that were permitted
by the terms of the Indenture and this Supplemental Indenture to be
incurred;
(3) Liens in favor of the Company or any of its Restricted
Subsidiaries;
(4) Liens on property of a Person existing at the time such Person
is merged with or into or consolidated with the Company or any Restricted
Subsidiary of the Company; provided that such Liens were in existence
prior to the contemplation of such merger or consolidation and do not
extend to any assets other than those of the Person merged into or
consolidated with the Company or the Restricted Subsidiary;
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(5) Liens on property existing at the time of acquisition thereof
by the Company or any Restricted Subsidiary of the Company, provided that
such Liens were in existence prior to the contemplation of such
acquisition;
(6) Liens to secure the performance of statutory obligations,
surety or appeal bonds, performance bonds or other obligations of a like
nature incurred in the ordinary course of business;
(7) Liens to secure Indebtedness (including Capital Lease
Obligations) permitted by clause (5) of the second paragraph of Section
1.01(15)(c) of this Supplemental Indenture covering only the assets
acquired with such Indebtedness;
(8) Liens existing on the Issue Date;
(9) Liens for taxes, assessments or governmental charges or claims
that are not yet delinquent or that are being contested in good faith by
appropriate proceedings promptly instituted and diligently prosecuted,
provided that any reserve or other appropriate provision as shall be
required in conformity with GAAP shall have been made therefor;
(10) Liens to secure Permitted Refinancing Indebtedness incurred to
refinance any Indebtedness secured by any Lien referred to in clauses
(3), (4) and (5) of this definition of "Permitted Liens," as the case may
be, at the time that the original Lien became a Permitted Lien; provided,
however, that with respect to any Lien incurred pursuant to this clause
(10), the principal amount secured shall not be increased beyond that
permitted by the original Lien nor shall any such Lien extend to any
additional property (other than proceeds of the property in question);
(11) carriers', warehousemen's, mechanics', landlords',
materialmen's, repairmen's or other like Liens arising in the ordinary
course of business in respect of obligations not overdue for a period in
excess of 60 days or which are being contested in good faith by
appropriate proceedings promptly instituted and diligently prosecuted;
provided that any reserve or other appropriate provision as shall be
required to conform with GAAP shall have been made therefore;
(12) easements, rights-of-way, zoning and similar restrictions and
other similar encumbrances or title defects incurred, or leases or
subleases granted to others, in the ordinary course of business, which do
not, in any case, materially detract from the value of the property
subject thereto or do not interfere with or adversely affect in any
material respect the ordinary conduct of the business of the Company and
its Restricted Subsidiaries taken as a whole;
(13) Liens in favor of customs and revenue authorities to secure
payment of customs duties in connection with the importation of goods,
and other similar Liens arising in the ordinary course of business;
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(14) leases or subleases granted to third Persons not interfering
with the ordinary course of business of the Company or any of its
Restricted Subsidiaries; provided, however, that the aggregate fair
market value of all property underlying such leases and subleases
(measured at the time each such lease or sublease is entered into) shall
not exceed $50.0 million;
(15) Liens (other than any Lien imposed by the Employment
Retirement Income Security Act of 1974, as amended, or any rule or
regulation promulgated thereunder) incurred or deposits made in the
ordinary course of business in connection with worker's compensation,
unemployment insurance and social security;
(16) deposits, in the aggregate not to exceed $250,000 made in the
ordinary course of business to secure liability to insurance carriers;
(17) any attachment or judgment Lien not constituting an Event of
Default under Section 1.01(14)(vii) of this Supplemental Indenture;
(18) any interest or title of a lessor or sublessor under any
operating lease;
(19) Liens under licensing agreements for the use of Intellectual
Property entered into in the ordinary course of business with respect to
obligations that do not exceed $25.0 million;
(20) Liens incurred in connection with securing Hedging Obligations
permitted by clause (8) of the second paragraph of Section 1.01(15)(c) of
this Supplemental Indenture;
(21) Liens encumbering deposits made to secure obligations arising
under statutory, regulatory, contractual or warranty requirements of the
Company or any of its Restricted Subsidiaries, including rights of offset
and set-off;
(22) Liens incurred in the ordinary course of business of the
Company or any Restricted Subsidiary of the Company with respect to
obligations that do not exceed the greater of (a) $50.0 million and (b)
3.0% of Consolidated Tangible Assets at any one time outstanding (other
than other Permitted Liens as set forth in this definition); and
(23) any renewal or substitution for any Lien permitted by clauses
(1) through (22) of this definition of "Permitted Liens;" provided,
however, that with respect to any Lien incurred pursuant to this clause
(23), the principal amount secured shall not be increased beyond that
permitted by the Lien renewed or substituted nor shall the replaced or
substituted Lien extend to any additional property (other than proceeds
of the property in question); and
(24) Liens on assets of Unrestricted Securities that secure
Non-Recourse Debt of Unrestricted Subsidiaries.
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"Permitted Refinancing Indebtedness" means any Indebtedness of the
Company or any of its Restricted Subsidiaries issued in exchange for, or
the net proceeds of which are used to extend, refinance, renew, replace,
defease or refund other Indebtedness of the Company or any of its
Restricted Subsidiaries (other than intercompany Indebtedness); provided
that: (1) the principal amount (or accreted value, if applicable) of such
Permitted Refinancing Indebtedness does not exceed the principal amount
(or accreted value, if applicable), of the Indebtedness so extended,
refinanced, renewed, replaced, defeased or refunded (plus all accrued
interest thereon and the amount of all customary expenses incurred in
connection therewith); (2) such Permitted Refinancing Indebtedness has a
final maturity date later than the final maturity date of, and has a
Weighted Average Life to Maturity equal to or greater than the Weighted
Average Life to Maturity of, the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded; (3) if the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded is
subordinated in right of payment to the Notes, such Permitted Refinancing
Indebtedness has a final maturity date later than the final maturity date
of, and is subordinated in right of payment to, the Notes on terms at
least as favorable to the Holders of Notes as those contained in the
documentation governing the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded; and (4) such Indebtedness is
incurred either by the Company or by the Restricted Subsidiary who is the
obligor on the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded.
"Prospectus Supplement" means the prospectus supplement dated as of
February 11, 1999 with respect to the offering of the Notes.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation
S-X, promulgated pursuant to the Act, as such Regulation is in effect on
the Issue Date.
"Stated Maturity" means, with respect to any installment of
interest or principal on any series of Indebtedness, the date on which
such payment of interest or principal was scheduled to be paid in the
original documentation governing such Indebtedness, and shall not include
any contingent obligations to repay, redeem or repurchase any such
interest or principal prior to the date originally scheduled for the
payment thereof.
"Subsidiary" means, with respect to any specified Person: (1) any
corporation, association or other business entity of which more than 50%
of the total voting power of shares of Capital Stock entitled (without
regard to the occurrence of
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any contingency) to vote in the election of directors, managers or
Trustees thereof is at the time owned or controlled, directly or
indirectly, by such Person or one or more of the other Subsidiaries of
that Person (or a combination thereof); and (2) any partnership (a) the
sole general partner or the managing general partner of which is such
Person or a Subsidiary of such Person or (b) the only general partners of
which are such Person or one or more Subsidiaries of such Person (or any
combination thereof).
"Treasury Rate" means, as of any Redemption Date, the yield to
maturity as of such Redemption Date of United States Treasury securities
with a constant maturity (as compiled and published in the most recent
Federal Reserve Statistical Release H.15 (519) that has become publicly
available at least two business days prior to the Redemption Date (or, if
such Statistical Release is no longer published, any publicly available
source of similar market data)) most nearly equal to the period from the
Redemption Date to February 15, 2006; provided, however, that if the
period from the Redemption Date to February 15, 2006 is less than one
year, the weekly average yield on actually traded United States Treasury
securities adjusted to a constant maturity of one year shall be used.
"Unrestricted Subsidiary" means any Subsidiary of the Company that
is designated by the Board of Directors as an Unrestricted Subsidiary
pursuant to a Board Resolution, but only to the extent that such
Subsidiary: (1) has no Indebtedness other than Non-Recourse Debt; (2) is
not party to any agreement, contract, arrangement or understanding with
the Company or any Restricted Subsidiary of the Company unless the terms
of any such agreement, contract, arrangement or understanding are no less
favorable to the Company or such Restricted Subsidiary than those that
might be obtained at the time from Persons who are not Affiliates of the
Company; (3) is a Person with respect to which neither the Company nor
any of its Restricted Subsidiaries has any direct or indirect obligation
(a) to subscribe for additional Equity Interests or (b) to maintain or
preserve such Person's financial condition or to cause such Person to
achieve any specified levels of operating results; (4) has not Guaranteed
or otherwise directly or indirectly provided credit support for any
Indebtedness of the Company or any of its Restricted Subsidiaries; and
(5) has at least one director on its board of directors that is not a
director or executive officer of the Company or any of its Restricted
Subsidiaries and has at least one executive officer that is not a
director or executive officer of the Company or any of its Restricted
Subsidiaries.
Any designation of a Subsidiary of the Company as an Unrestricted
Subsidiary shall be evidenced to the Trustee by filing with the Trustee a
certified copy of the Board Resolution giving effect to such designation
and an Officers' Certificate certifying that such designation complied
with the preceding conditions and was permitted by Section 1.01(15)(d) of
this Supplemental Indenture. If, at any time, any Unrestricted Subsidiary
would fail to meet the preceding requirements as an Unrestricted
Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary
for purposes of this Supplemental Indenture and any Indebtedness of such
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Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of
the Company as of such date and, if such Indebtedness is not permitted to
be incurred as of such date under Section 1.01(15)(c) of this
Supplemental Indenture, the Company shall be in default of such covenant.
The Board of Directors of the Company may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such
designation shall be deemed to be an incurrence of Indebtedness by a
Restricted Subsidiary of the Company of any outstanding Indebtedness of
such Unrestricted Subsidiary and such designation shall only be permitted
if (1) such Indebtedness is permitted under Section 1.01(15)(c) of this
Supplemental Indenture, calculated on a pro forma basis as if such
designation had occurred at the beginning of the four-quarter reference
period; and (2) no Default or Event of Default would be in existence
following such designation.
"Voting Stock" of any Person as of any date means the Capital Stock
of such Person that is at the time entitled to vote in the election of
the Board of Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing: (1)
the sum of the products obtained by multiplying (a) the amount of each
then remaining installment, sinking fund, serial maturity or other
required payments of principal, including payment at final maturity, in
respect thereof, by (b) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making of such
payment; by (2) the then outstanding principal amount of such
Indebtedness.
"Wholly Owned Subsidiary" of any specified Person means a
Subsidiary of such Person all of the outstanding Capital Stock or other
ownership interests of which (other than directors' qualifying shares)
shall at the time be owned by such Person or by one or more Wholly Owned
Subsidiaries of such Person and one or more Wholly Owned Subsidiaries of
such Person.
SECTION 3.02. OTHER DEFINITIONS.
Term Defined in
Section
"Affiliate Transaction"................................ 1.01(15)(g)
"Asset Sale Offer"..................................... 1.01(15)(a)
"Change of Control Offer".............................. 1.01(15)(b)
"Change of Control Payment"............................ 1.01(15)(b)
"Change of Control Payment Date"....................... 1.01(15)(b)
"Company"...............................................preamble
"Covenant Defeasance".................................. 1.01(13)(c)
"Event of Default"..................................... 1.01(14)
"Excess Proceeds"...................................... 1.01(15)(a)
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"incur"................................................ 1.01(15)(c)
"Indenture"............................................ preamble
"Legal Defeasance" .................................... 1.01(13)(b)
"Notes"................................................ preamble
"Offer Amount"......................................... 1.01(18)
"OfferPeriod".......................................... 1.01(18)
"Payment Default"...................................... 1.01(14)(a)
"Permitted Debt"....................................... 1.01(15)(c)
"Purchase Date"........................................ 1.01(18)
"Redemption Date"...................................... 1.01(6)(a)
"Restricted Payments".................................. 1.01(15)(d)
"Stated Maturity Date"................................. 1.01(3)
"Supplemental Indenture................................ preamble
"Trustee".............................................. preamble
ARTICLE IV.
MISCELLANEOUS
SECTION 4.01. DEFINITIONS. Capitalized terms used but not defined in
thisSupplemental Indenture shall have the meanings ascribed thereto in the
Indenture.
SECTION 4.02. CONFIRMATION OF INDENTURE. The Indenture, as modified,
supplemented and superseded by this Supplemental Indenture, is in all respects
ratified and confirmed, and the Indenture and this Supplemental Indenture shall
be read, taken and construed as one and the same instrument. References herein
to the Indenture shall be deemed to be to the Indenture, as modified
supplemented and superseded by this Supplemental Indenture.
SECTION 4.03. CONCERNING THE TRUSTEE. The Trustee assumes no duties,
responsibilities or liabilities by reason of this Supplemental Indenture other
than as set forth in the Indenture and, in carrying out its responsibilities
hereunder, shall have all of the rights, protections and immunities which it
possesses under the Indenture.
SECTION 4.04. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES
AND STOCKHOLDERS. No past present or future director, officer, employee,
incorporator or stockholder of this Company, as such, shall have any liability
for any obligations of the Company under the Notes, the Indenture, this
Supplemental Indenture or for any claim based on, in respect of, or by reason
of, such obligations or their creation. Each holder by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes.
SECTION 4.05. GOVERNING LAW. This Supplemental Indenture, the Indenture
and the Notes shall be governed by and construed in accordance with the law of
the State of New York.
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SECTION 4.06. SEPARABILITY. In case any provision in this Supplemental
Indenture shall for any reason be held to be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
SECTION 4.07. COUNTERPARTS. This Supplemental Indenture may be executed
in any number of counterparts each of which shall be an original, but such
counterparts shall together constitute but one and the same instrument.
53
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
POLAROID CORPORATION
By:/s/ JUDITH G. BOYNTON
------------------------------
Name: Judith G. Boynton
Title: Executive Vice President and
Chief Executive Officer
Attest:
/s/ THOMAS M. LEMBERG
- -------------------------------
Name: Thomas M. Lemberg
Title: Senior Vice President,
General Counsel and
Secretary
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By:/s/ ROLAND S. GUSTAFSEN
------------------------------
Name: Roland S. Gustafsen
Title: Assistant Vice President
<PAGE>
EXHIBIT A
[Face of Note]
CUSIP 731095AF2
ISIN US731095AF25
POLAROID CORPORATION
11 1/2% Notes due 2006
Unless this certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the issuer or
its agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein
No. $
-------- --------------
POLAROID CORPORATION, a corporation duly organized and existing under
the laws of the State of Delaware (herein called the "Company," which term
includes any successor corporation under the Supplemental Indenture referred to
on the reverse hereof), for value received, hereby promises to pay to Cede &
Co., or registered assigns, the principal sum of TWO HUNDRED SEVENTY-FIVE
MILLION Dollars on February 15, 2006.
Interest Payment Dates: February 15 and August 15, commencing
August 15, 1999
Regular Record Dates: January 31 and July 31
Reference is made to the further provisions of this Note set forth on
the reverse hereof. Such further provisions shall for all purposes have the same
effect as though fully set forth in this place.
This Note shall not be valid or become obligatory for any purpose until
the certificate of authentication hereon shall have been signed by the Trustee
under the Supplemental Indenture referred to on the reverse hereof.
A-1
<PAGE>
EXHIBIT A
Dated: February 17, 1999
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal.
POLAROID CORPORATION
By:
------------------------------
Name:
Title:
By:
------------------------------
Name:
Title:
This is one of the Notes of the series
designated herein issued under the
within-mentioned Supplemental Indenture:
STATE STREET BANK AND TRUST COMPANY, as
Trustee
By:
----------------------------
Authorized Signatory
A-2
<PAGE>
EXHIBIT A
[Back of Note]
POLAROID CORPORATION
11 1/2% Notes due 2006
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE
BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO
ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY
MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION
4.5 OF THE ORIGINAL INDENTURE, (II) THIS GLOBAL NOTE MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.02 OF THE
SUPPLEMENTAL INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO
THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 4.8 OF THE
ORIGINAL INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO
A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE
COMPANY.
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. INTEREST. Polaroid Corporation, a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Note at 11
1/2% per annum from the date hereof until maturity. The Company shall pay
interest semi-annually in arrears on February 15 and August 15 of each year,
beginning August 15, 1999, or if any such day is not a Business Day, on the next
succeeding Business Day (each an "Interest Payment Date"). Interest on the Notes
will accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from the date of issuance; provided that if there is no
existing Default in the payment of interest, and if this Note is authenticated
between a Regular Record Date referred to on the face hereof and the next
succeeding Interest Payment Date, interest shall accrue from such next
succeeding Interest Payment Date; provided, further, that the first Interest
Payment Date shall be August 15, 1999. The Company shall pay interest, overdue
principal and premium, if any, from time to time on demand at the rate borne by
the Notes on overdue installments of interest from time to time on demand at the
same rate to the extent lawful. Interest will be computed on the basis of a 360
day year of twelve 30 day months.
2. METHOD OF PAYMENT. The Company shall pay interest on the Notes
(except defaulted interest) to the Persons who are registered Holders of Notes
at the close of business on the January 31 or July 31 next preceding the
Interest Payment Date, even if such Notes are canceled after such Regular Record
Date and on or before such Interest Payment Date, except as provided in Section
4.6 of the Indenture with respect to defaulted interest. The Notes will be
payable as to principal, premium and interest at the office or agency of the
Company maintained
A-3
<PAGE>
EXHIBIT A
for such purpose in the Borough of Manhattan in the City and State of New York,
or, at the option of the Company, payment of interest may be made by check
mailed to the Holders at their addresses set forth in the register of Holders;
provided, however, that all payments of principal, and premium, if any, and
interest on the Notes to Holders of Notes which have given wire instructions to
the Company or the Paying Agent at least ten Business Days prior to the
applicable payment date shall be made by wire transfer to an account maintained
by such Holder entitled thereto as specified by such Holder in the instructions.
Such payment shall be in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private
debts.
3. PAYING AGENT AND REGISTRAR. Initially, STATE STREET BANK AND TRUST
COMPANY, will act as Paying Agent and Registrar. The Company may change any
Paying Agent or Registrar without notice to any Holder. The Company or any of
its Subsidiaries may act in any such capacity.
4. INDENTURE. The Company issued the Notes under an Indenture dated as
of January 9, 1997, (the "Original Indenture") as amended by the First
Supplemental Indenture dated as of February 17, 1999 (the "Supplemental
Indenture" and, together with the Original Indenture, the "Indenture"), each
between the Company and the Trustee. The terms of the Notes include those stated
in the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (15 U.S. Code ss.ss. 77aaa 77bbbb). The Notes
are subject to all such terms, and Holders are referred to the Indenture and
such Act for a statement of such terms. To the extent any provision of this Note
conflicts with the express provisions of the Indenture, the provisions of the
Indenture shall govern and be controlling. The Notes are obligations of the
Company limited to $350.0 million in aggregate principal amount, of which $275.0
million were issued on February 17, 1999.
5. OPTIONAL REDEMPTION.
(a) Except as set forth is subparagraphs (b) and (c) of this
Paragraph 5, the Company shall not have the option to redeem the Notes prior to
the final maturity of such Notes.
(b) Notwithstanding the provisions of subparagraph (a) of this
Paragraph 5, the Company may redeem Notes, in whole or in part, at any time,
upon not less than 30 nor more than 60 days' notice mailed to each Holder of
Notes to be redeemed at such Holder's address appearing in the applicable
Security Register, in amounts of $1,000 or an integral multiple of $1,000, at a
Redemption Price equal to 100% of the principal amount plus the Applicable
Premium as of, and accrued and unpaid interest to, the date of redemption (the
"Redemption Date").
(c) Notwithstanding the provisions of subparagraph (a) of this
Paragraph 5, at any time prior to February 15, 2002, the Company may on any one
or more occasions redeem up to 35% of the aggregate principal amount of Notes
issued under the Supplemental Indenture at a redemption price of 111.500% of the
principal amount thereof, plus accrued and unpaid interest to the Redemption
Date, with the net cash proceeds of one or more Equity Offerings; provided
A-4
<PAGE>
EXHIBIT A
that: (1) at least 65% in aggregate principal amount of Notes issued under the
Supplemental Indenture remains outstanding immediately after the occurrence of
any such redemption (excluding Notes held by the Company and its Restricted
Subsidiaries); and (2) any such redemption must occur within 45 days of the date
of the closing of the related Equity Offering.
6. MANDATORY REDEMPTION. The Company shall not be required to make
mandatory redemption payments with respect to the Notes.
7. REPURCHASE AT OPTION OF HOLDER. The Supplemental Indenture provides
that, subject to certain conditions, if (i) certain Net Proceeds are available
to the Company as a result of Asset Sales or (ii) a Change of Control occurs,
the Company shall be required to make an Offer to Purchase for all or a
specified portion of the Notes.
8. NOTICE OF REDEMPTION. Notice of redemption will be mailed not more
than 60 days before the Redemption Date to each Holder whose Notes are to be
redeemed at its registered address. Notes in denominations larger than $1,000
may be redeemed in part but only in whole multiples of $1,000, unless all of the
Notes held by a Holder are to be redeemed. On and after the Redemption Date
interest, will cease to accrue on Notes or portions thereof called for
redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be registered and Notes may be exchanged as provided in
the Supplemental Indenture. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and the Company may require a Holder to pay any taxes and fees required by law
or permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, the Company
need not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a
Regular Record Date and the corresponding Interest Payment Date.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be
treated as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. The Supplemental Indenture
permits, with certain exceptions as therein provided, the amendment thereof and
the modification of the rights and obligations of the Company and the rights of
the Holders of the Securities under the Supplemental Indenture at any time by
the Company and the Trustee with the consent of the Holders of a majority in
aggregate principal amount of the Notes at the time.
12. DEFAULTS AND REMEDIES. Events of Default with respect to the Notes
include: (1) default for 30 days in the payment when due of interest on the
Notes; (2) default in payment when due of the principal of, or premium, if any,
on the Notes; (3) failure by the Company to comply with Section 1.01(16) of the
Supplemental Indenture; (4) failure by the Company for 30
A-5
<PAGE>
EXHIBIT A
days after notice to comply with Sections 1.01(15)(a), (b), (d) or (e) of the
Supplemental Indenture; (5) failure by the Company or any of its Restricted
Subsidiaries for 60 days after notice to comply with any of the other agreements
in the Indenture; (6) default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or any of its
Restricted Subsidiaries) whether such Indebtedness or Guarantee now exists, or
is created after the Issue Date, if that default: (a) is caused by a failure to
pay principal of, or interest or premium, if any, on such Indebtedness prior to
the expiration of the grace period provided in such Indebtedness on the date of
such default (a "Payment Default"); or (b) results in the acceleration of such
Indebtedness prior to its express maturity, and, in each case, the principal
amount of any such Indebtedness, together with the principal amount of any other
such Indebtedness under which there has been a Payment Default or the maturity
of which has been so accelerated, aggregates $25.0 million or more; (7) failure
by the Company or any of its Subsidiaries to pay final judgments aggregating in
excess of $25.0 million, which judgments are not paid, discharged or stayed for
a period of 60 days; and (8) certain events of bankruptcy or insolvency with
respect to the Company or any of its Subsidiaries.
In the case of an Event of Default arising from certain events of
bankruptcy or insolvency, with respect to the Company or any Significant
Subsidiary, all outstanding Notes will become due and payable immediately
without further action or notice. If any other Event of Default occurs and is
continuing, the Trustee or the holders of at least 25% in principal amount of
the then outstanding Notes may declare all the Notes to be due and payable
immediately.
Subject to certain limitations, holders of a majority in principal
amount of the then outstanding Notes may direct the Trustee in its exercise of
any trust or power. The Trustee may withhold from holders of the Notes notice of
any continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest) if it determines that
withholding notice is in their interest. The Holders of a majority in aggregate
principal amount of the Notes then outstanding by notice to the Trustee may on
behalf of the holders of all of the Notes waive any existing Default or Event of
Default and its consequences under the Supplemental Indenture except a
continuing Default or Event of Default in the payment of interest on, or the
principal of, the Notes.
In the case of any Event of Default occurring by reason of any willful
action or inaction taken or not taken by or on behalf of the Company with the
intention of avoiding payment of the premium that the Company would have had to
pay if the Company then had elected to redeem the Notes pursuant to Section
1.01(6)(a) of the Supplemental Indenture, an equivalent premium shall also
become and be immediately due and payable to the extent permitted by law upon
the acceleration of the Notes.
The Company is required to deliver to the Trustee annually a statement
regarding compliance with the Indenture. Upon becoming aware of any Default or
Event of Default, the Company is required to deliver to the Trustee a statement
specifying such Default or Event of Default.
A-6
<PAGE>
EXHIBIT A
13. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Company or its Affiliates, and may otherwise deal with the Company or
its Affiliates, as if it were not the Trustee.
14. NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator or stockholder, of the Company, as such, shall not have any
liability for any obligations of the Company under the Notes or the Indenture or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Notes.
15. AUTHENTICATION. This Note shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.
16. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
17. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes, or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
18. Governing Law. This Note shall be governed and construed in
accordance with the laws of the State of New York.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to:
Polaroid Corporation
784 Memorial Drive
Cambridge, Massachusetts 02139
Attention: Treasurer
A-7
<PAGE>
EXHIBIT A
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to:
----------------------------------
(Insert assignee's legal name)
- -------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
------------------------------------------------------
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date:
-------------------------------
Your Signature:
-------------------------------------------
(Sign exactly as your name appears
on the face of this Note)
Signature Guarantee:
-------------------------
A-8
<PAGE>
EXHIBIT A
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant
to subsection 13(a) or 13(b) of Section 1.01 of the Supplemental Indenture,
check the appropriate box below:
[ ]Subsection 13(a) [ ] Subsection 13(b)
If you want to elect to have only part of the Note purchased by the
Company pursuant to subsection 13(a) or subsection 13(b) of Section 1.01 of the
Supplemental Indenture, state the amount you elect to have purchased:
$
------------------
Date:
-------------------------------
Your Signature:
----------------------------
(Sign exactly as your name appears
on the face of this Note)
Tax Identification No.:
-------------------
Signature Guarantee:
-------------------
A-9
<PAGE>
EXHIBIT A
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE
The following exchanges of a part of this Global Note for an interest in
another Global Note or for a Definitive Note, or exchanges of a part of another
Global Note or Definitive Note for an interest in this Global Note, have been
made:
<TABLE>
<CAPTION>
Amount of Amount of Principal Amount Signature of
decrease in increase in of this Global authorized
Date of Exchange Principal Amount Principal Amount Note following officer of
of this Global of this Global such decrease Trustee or Note
Note Note (or increase) Custodian
---------------- --------------- --------------- -------------- ---------------
<S> <C> <C> <C> <C>
</TABLE>
