Exhibit (1)
EXECUTION COPY
EASTMAN KODAK COMPANY
$500,000,000
3.375% Convertible Senior Notes Due 2033
PURCHASE AGREEMENT
New York, New York
October 7, 2003
Citigroup Global Markets Inc.
Lehman Brothers Inc.
as Representatives of the Initial Purchasers
c/o Citigroup Global Markets Inc.
388 Greenwich Street
New York, NY 10013
c/o Lehman Brothers Inc.
399 Park Avenue
New York, NY 10022
Ladies and Gentlemen:
Eastman Kodak Company, a corporation organized
under the laws of the State of New Jersey (the "Company"),
proposes to issue and sell to the several initial purchasers
named in Schedule I hereto (the "Initial Purchasers"), for
whom you (the "Representatives") are acting as
representatives, the respective principal amounts set forth
in Schedule I hereto of its $500,000,000 aggregate principal
amount of 3.375% Convertible Senior Notes due 2033 (the
"Firm Securities"). The Company also proposes to grant to
the several Initial Purchasers an option to purchase up to
an additional $75,000,000 aggregate principal amount of such
3.375% Convertible Senior Notes due 2033 to cover over-
allotments, if any (the "Option Securities" and, together
with the Firm Securities, the "Securities"). The Securities
will be issued pursuant to the Indenture dated as of January
1, 1988 (as heretofore supplemented, the "Base Indenture")
between the Company and The Bank of New York, as trustee
(the "Trustee"), as amended and supplemented by the Fifth
Supplemental Indenture, to be dated as of October 10, 2003,
between the Company and the Trustee (the "Fifth Supplemental
Indenture" and, together with the Base Indenture, the
"Indenture"). The Securities will be convertible into
shares of the Company's common stock, par value $2.50 per
share (the "Common Stock"), in accordance with the terms of
the Securities and the Indenture, at the initial conversion
rate set forth in the Fifth Supplemental Indenture. The
Securities have the benefit of a registration rights
agreement (the "Registration Rights Agreement"), to be dated
as of October 10, 2003, between the Company and the Initial
Purchasers, pursuant to which the Company has agreed to
register the Securities under the Securities Act of 1933, as
amended (the "1933 Act"), subject to the terms and
conditions therein specified. As used in this Agreement,
the term "Operative Documents" means this Agreement, the
Indenture, the Securities and the Registration Rights
Agreement.
To the extent there are no additional parties
listed on Schedule I other than you, the term
Representatives as used herein shall mean you as the Initial
Purchasers, and the terms Representatives and Initial
Purchasers shall mean either the singular or plural as the
context requires. The use of the neuter in this Agreement
shall include the feminine and masculine wherever
appropriate.
The sale of the Securities to the Initial
Purchasers will be made without registration of the
Securities under the 1933 Act, in reliance upon exemptions
from the registration requirements of the 1933 Act.
In connection with the sale of the Securities, the
Company has prepared a preliminary offering memorandum,
dated October 6, 2003 (as amended or supplemented at the
date hereof, including any and all exhibits thereto and any
information incorporated by reference therein, the
"Preliminary Memorandum"), and a final offering memorandum,
dated October 7, 2003 (as amended or supplemented at the
date hereof, including any and all exhibits thereto and any
information incorporated by reference therein, the "Final
Memorandum"). Each of the Preliminary Memorandum and the
Final Memorandum sets forth certain information concerning
the Company and the Securities. The Company hereby confirms
that it has authorized the use of the Preliminary Memorandum
and the Final Memorandum, and any amendment or supplement
thereto, in connection with the offer and sale of the
Securities by the Initial Purchasers. Unless otherwise
stated to the contrary, any references herein to the terms
"amend," "amendment" or "supplement" with respect to the
Final Memorandum shall be deemed to refer to and include any
information filed under the Securities Exchange Act of 1934,
as amended (the "1934 Act"), subsequent to the date hereof
which is incorporated by reference therein.
SECTION 1. Representations and Warranties. The Company
represents and warrants to, and agrees with, each Initial
Purchaser as of the date hereof, as of the Closing Time (as
defined below) and as of each Date of Delivery (as defined
below), if any, as follows:
(a) The Preliminary Memorandum, at the date thereof, did not
contain any untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading. At the date hereof and at the Closing Time (and, if
any Option Securities are purchased, at the Date of Delivery),
the Final Memorandum did not, and will not (and any amendment or
supplement thereto, at the date thereof, at the Closing Time and
at each Date of Delivery, if any, will not), contain any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
provided, however, that the Company makes no representation or
warranty as to the information contained in or omitted from the
Preliminary Memorandum or the Final Memorandum, or any amendment
or supplement thereto, in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf
of the Initial Purchasers through the Representatives
specifically for inclusion therein.
(b) Neither the Company, nor any of its Affiliates, as such term
is defined in Rule 501(b) of Regulation D under the 1933 Act (an
"Affiliate"), nor any person acting on its or their behalf has,
directly or indirectly, made offers or sales of any security, or
solicited offers to buy any security, which is or will be
integrated with the sale of the Securities under circumstances
that would require the registration of the Securities under the
1933 Act or the qualification of the Indenture under the Trust
Indenture Act of 1939 (the "1939 Act").
(c) Neither the Company, nor any of its Affiliates, nor any
person acting on its or their behalf has engaged in any form of
general solicitation or general advertising (within the meaning
of Regulation D) in connection with any offer or sale of the
Securities in the United States.
(d) The Securities satisfy the eligibility requirements of Rule
144A(d)(3) under the 1933 Act.
(e) The Company is subject to and in full compliance with the
reporting requirements of Section 13 or Section 15(d) of the 1934
Act.
(f) The Company has not paid or agreed to pay to any person any
compensation for soliciting another to purchase any securities of
the Company (except with respect to commercial paper, ordinary
course bank borrowings and with respect to the Company's 7.25%
Senior Notes due 2013 and as contemplated by this Agreement).
(g) The Company has not taken, directly or indirectly, any
action designed to cause or which has constituted or which might
reasonably be expected to cause or result, under the 1934 Act or
otherwise, in the stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of
the Securities.
(h) The information provided by the Company pursuant to Section
4(h) hereof will not, at the date thereof, contain any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(i) The documents incorporated or deemed to be incorporated by
reference in the Final Memorandum, at the time they were or
hereafter are filed with the Securities and Exchange Commission
(the "Commission"), complied and will comply in all material
respects with the requirements of the 1934 Act and the rules and
regulations of the Commission thereunder, and, when read together
with the other information in the Final Memorandum, at the time
the Final Memorandum was issued and at the Closing Time (and, if
any Option Securities are purchased, at the Date of Delivery),
did not and will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading.
(j) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of New Jersey with full corporate power and authority to
own or lease, as the case may be, and to operate its properties
and to conduct its business as described in the Final Memorandum,
and is duly qualified to do business as a foreign corporation and
is in good standing in each jurisdiction which requires such
qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material
adverse effect on the condition (financial or other), business,
properties, net worth or results of operations of the Company and
its subsidiaries taken as a whole (a "Material Adverse Effect");
each "significant subsidiary" of the Company, as such term is
defined in Rule 1-02 of Regulation S-X promulgated under the 1933
Act (each, a "Significant Subsidiary"), has been duly organized
and is validly existing as a corporation or limited liability
company in good standing under the laws of the jurisdiction in
which it was chartered or organized with full power and authority
(corporate or other) to own or lease, as the case may be, and to
operate its properties and to conduct its business as described
in the Final Memorandum, and is duly qualified to do business as
a foreign corporation and is in good standing in each
jurisdiction which requires such qualification, except to the
extent that the failure to be so qualified or be in good standing
would not have a Material Adverse Effect.
(k) The Company's authorized equity capitalization is as set
forth in the Final Memorandum, and the capital stock of the
Company conforms in all material respects to the description
thereof contained in the Final Memorandum; the outstanding shares
of capital stock of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable; all
the outstanding shares of capital stock or other interests of the
Significant Subsidiaries held by the Company, directly or
indirectly through other subsidiaries, have been duly and validly
authorized and issued and, if applicable, are fully paid and non-
assessable, and are owned of record by the Company or a
subsidiary free and clear of any security interest, claim, lien
or encumbrance.
(l) This Agreement has been duly authorized, executed and
delivered by the Company.
(m) The Indenture has been duly authorized by the Company and,
assuming due authorization, execution and delivery thereof by the
Trustee, when executed and delivered by the Company, will
constitute a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms,
except to the extent that enforcement thereof may be limited by
(i) bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or other similar laws now or hereafter in
effect relating to creditors' rights generally and (ii) general
principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity), and will conform
in all material respects to the description thereof in the Final
Memorandum.
(n) The Registration Rights Agreement has been duly authorized
by the Company and, when executed and delivered by the Company
and the Initial Purchasers, will constitute a legal, valid and
binding obligation of the Company, enforceable against the
Company in accordance with its terms, except to the extent that
enforcement thereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other
similar laws now or hereafter in effect relating to creditors'
rights generally and (ii) general principles of equity
(regardless of whether enforceability is considered in a
proceeding at law or in equity) and except as the indemnification
or contribution obligations thereunder may be limited under
applicable laws.
(o) The Securities have been duly authorized by the Company and,
when executed and authenticated in accordance with the provisions
of the Indenture and delivered and paid for by the Initial
Purchasers, will have been duly executed and delivered by the
Company and will constitute legal, valid and binding obligations
of the Company, enforceable against the Company in accordance
with their terms, except to the extent that enforcement thereof
may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other similar laws now or
hereafter in effect relating to creditors' rights generally and
(ii) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in
equity), and will conform in all material respects to the
description thereof in the Final Memorandum; and the Securities
will be in the form contemplated by the Indenture and each
registered holder thereof will be entitled to the benefits of the
Indenture and the Registration Rights Agreement.
(p) Upon issuance and delivery of the Securities in accordance
with this Agreement and the Indenture, the Securities will be
convertible at the option of the holder thereof into shares of
Common Stock in accordance with the terms of the Securities and
the Indenture. The shares of Common Stock issuable upon such
conversion of the Securities have been duly authorized and
reserved for issuance upon such conversion by all necessary
corporate action and such shares, when issued upon such
conversion in accordance with the terms of the Securities and the
Indenture, will be validly issued, fully paid and non-assessable.
No holder of Common Stock will be subject to personal liability
by reason of being such a holder, and the issuance of such shares
upon such conversion or purchases will not be subject to the
preemptive or other similar rights of any security holder of the
Company.
(q) None of the Company and its subsidiaries is or, after giving
effect to the offering and sale of the Securities and the
application of the proceeds thereof as described in the Final
Memorandum, will be an "investment company" as defined in the
Investment Company Act of 1940, as amended.
(r) No consent, approval, authorization, filing with or order of
any court or governmental agency or body is required in
connection with the transactions contemplated herein or in the
other Operative Documents, except such as may be required under
the blue sky laws of any jurisdiction in connection with the
purchase and distribution of the Securities by the Initial
Purchasers in the manner contemplated herein and in the Final
Memorandum and except as may be required under the 1933 Act or
the 1939 Act in connection with the transactions contemplated by
the Registration Rights Agreement.
(s) None of the issuance and sale of the Securities pursuant
hereto, the issuance and sale of the shares of Common Stock
issuable upon the conversion of the Securities, the execution and
delivery by the Company of, and performance by the Company of its
obligations under, the Operative Documents and the consummation
of the transactions contemplated herein and in the Final
Memorandum (including the use of the proceeds from the sale of
the Securities as described in the Final Memorandum under the
caption "Use of Proceeds"), will conflict with, result in a
breach or violation of or constitute a default under or
imposition of any lien, charge or encumbrance upon any property
or assets of the Company or any of its subsidiaries pursuant to
(i) the charter or by-laws (or other similar documents) of the
Company or any subsidiary, (ii) the terms of any indenture,
contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or
instrument to which the Company or any subsidiary is a party or
is bound or to which their property is subject, or (iii) any
statute, law, rule, regulation, judgment, order or decree
applicable to the Company or any subsidiary of any court,
regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the
Company or any subsidiary or any of their properties, except in
the cases of clauses (ii) and (iii) above for any such conflict,
breach, violation or default that would not reasonably be
expected to have a Material Adverse Effect.
(t) Neither the Company nor any subsidiary is in violation or
default of (i) any provision of its charter or bylaws (or other
similar document), (ii) the terms of any indenture, contract,
lease, mortgage, deed of trust, note agreement, loan agreement or
other agreement, obligation, condition, covenant or instrument to
which it is a party or bound or to which its property is subject,
or (iii) any statute, law, rule, regulation, judgment, order or
decree of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having
jurisdiction over the Company or such subsidiary or any of its
properties, as applicable, except in the cases of clauses (ii)
and (iii) above for any such violation or default that would not
result in a Material Adverse Effect.
(u) No holders of securities of the Company have rights to the
registration of such securities under the Shelf Registration
Statement (as defined in the Registration Rights Agreement) or
otherwise.
(v) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator
involving the Company or any of its subsidiaries or its or their
property is pending or, to the best knowledge of the Company,
threatened that (i) could reasonably be expected to have a
Material Adverse Effect on the performance of this Agreement, the
Indenture or the Registration Rights Agreement, or the
consummation of any of the transactions contemplated hereby or
thereby; or (ii) could reasonably be expected to have a Material
Adverse Effect, except as set forth in or contemplated in the
Final Memorandum (exclusive of any amendment or supplement
thereto).
(w) The consolidated financial statements and schedules of the
Company and its consolidated subsidiaries included in the Final
Memorandum present fairly in all material respects the financial
condition, results of operations and cash flows of the Company as
of the dates and for the periods indicated, comply as to form
with the applicable accounting requirements of the 1933 Act and
have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout
the periods involved (except as otherwise noted therein); the
summary financial data set forth under the caption "Summary
Consolidated Financial Information" in the Final Memorandum
fairly present in all material respects, on the basis stated in
the Final Memorandum, the information included therein.
(x) PricewaterhouseCoopers, LLP, who have certified certain
financial statements of the Company and its consolidated
subsidiaries and delivered their report with respect to the
audited consolidated financial statements and schedule
incorporated by reference in the Final Memorandum, are
independent public accountants with respect to the Company within
the meaning of the 1933 Act and the rules and regulations of the
Commission thereunder.
(y) No Significant Subsidiary of the Company is currently
prohibited, directly or indirectly, from paying any dividends to
the Company, from making any other distribution on such
Significant Subsidiary's capital stock, from repaying to the
Company any loans or advances to such Significant Subsidiary from
the Company or from transferring any of such Significant
Subsidiary's property or assets to the Company or any other
subsidiary of the Company, except as described in or contemplated
by the Final Memorandum (exclusive of any amendment or supplement
thereto).
(z) The Company and each of its Significant Subsidiaries has
fulfilled its obligations, if any, under the minimum funding
standards of Section 302 and the regulations and published
interpretations thereunder of the United States Employee
Retirement Income Security Act of 1974, as amended ("ERISA"),
with respect to each "pension plan" (as defined in Section 3(2)
of ERISA and such regulations and published interpretations) in
which employees of the Company and its Significant Subsidiaries
are eligible to participate and, except as described in the Final
Memorandum, each such plan is in compliance in all material
respects with the presently applicable provisions of ERISA and
such regulations and published interpretations; the Company and
its Significant Subsidiaries have not incurred any unpaid
liability to the Pension Benefit Guaranty Corporation (other than
for the payment of premiums in the ordinary course) or to any
such plan under Title IV of ERISA.
(aa) There is and has been no failure on the part of the Company
or any of the Company's directors or officers, in their
capacities as such, to comply with the provisions of the Sarbanes-
Oxley Act of 2002 and the Company is in compliance in all
material respects with all applicable provisions of the Sarbanes-
Oxley Act of 2002.
SECTION 2. Sale and Delivery to Initial Purchasers; Closing.
(a) Firm Securities. On the basis of the representations and
warranties herein contained and subject to the terms and
conditions herein set forth, the Company agrees to sell to each
Initial Purchaser, severally and not jointly, and each Initial
Purchaser, severally and not jointly, agrees to purchase from the
Company, the principal amount of Securities set forth in Schedule
I opposite the name of such Initial Purchaser, plus any
additional principal amount of Securities which such Initial
Purchaser may become obligated to purchase pursuant to the
provisions of Section 8 hereof, at a purchase price equal to
97.50% of the principal amount of the Firm Securities, plus,
accrued interest, if any, from October 10, 2003 to the Closing
Time.
(b) Option Securities. In addition, on the basis of the
representations and warranties herein contained and subject to
the terms and conditions herein set forth, the Company hereby
grants an option to the Initial Purchasers, severally and not
jointly, to purchase the Option Securities at the same purchase
price as the Initial Purchasers are to pay for the Firm
Securities, plus accrued interest, if any, from October 10, 2003
to the Date of Delivery. The option hereby granted will expire
30 days after the date hereof and may be exercised in whole or in
part from time to time upon notice by the Representatives to the
Company setting forth the amount of Option Securities as to which
the several Initial Purchasers are then exercising the option and
the time and date of payment and delivery for such Option
Securities. Any such time and date of delivery (a "Date of
Delivery") shall be determined by the Representatives, but shall
not be later than seven full business days after the exercise of
said option, nor in any event prior to the Closing Time. If the
option is exercised as to all or any portion of the Option
Securities, each of the Initial Purchasers, acting severally and
not jointly, will purchase that proportion of the total amount of
Option Securities then being purchased which the principal amount
of Firm Securities set forth in Schedule I opposite the name of
such Initial Purchaser bears to the total principal amount of
Firm Securities, subject in each case to such adjustments as the
Representatives in their discretion shall make to eliminate any
sales or purchases of fractional securities.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Securities shall be made at the offices of
Sidley Austin Brown & Wood llp, 787 Seventh Avenue, New York, NY
10019, or at such other place as shall be agreed upon by the
Representatives and the Company, at 9:00 a.m. (Eastern time) on
the third (fourth, if the pricing occurs after 4:30 p.m. (Eastern
time) on any given day) business day after the date hereof
(unless postponed in accordance with the provisions of Section
8), or such other time not later than ten business days after
such date as shall be agreed upon by the Representatives and the
Company (such time and date of payment and delivery being herein
called "Closing Time").
In addition, in the event that any or all of
the Option Securities are purchased by the Initial
Purchasers, payment of the purchase price for, and
delivery of certificates for, such Option Securities
shall be made at the above-mentioned offices, or at
such other place as shall be agreed upon by the
Representatives and the Company, on each Date of
Delivery as specified in the notice from the
Representatives to the Company.
Payment shall be made to the Company by wire
transfer of immediately available funds to a bank
account designated by the Company, against delivery to
the Representatives for the respective accounts of the
Initial Purchasers of certificates for the Securities
to be purchased by them. Delivery of the Securities
shall be made through the facilities of The Depository
Trust Company ("DTC") unless the Representatives shall
otherwise instruct.
(d) Denominations; Registration. Certificates for the
Securities shall be in global form and shall be in such
denominations ($1,000 or integral multiples thereof) and
registered in such names as the Representatives may request in
writing at least one full business day before the Closing Time or
the relevant Date of Delivery, as the case may be. The global
certificates for the Firm Securities and the Option Securities,
if any, will be made available for examination and packaging by
the Representatives in The City of New York not later than 10:00
a.m. (Eastern time) on the business day prior to the Closing Time
or the relevant Date of Delivery, as the case may be.
SECTION 3. Offering by Initial Purchasers. Each Initial
Purchaser, severally and not jointly, represents and warrants to
and agrees with the Company that:
(a) Such Initial Purchaser is a qualified institutional buyer
(as defined in Rule 144A under the 1933 Act)(a "QIB") with such
knowledge and experience in financial and business matters as is
necessary in order to evaluate the merits and risks of and
investment in the Securities.
(b) It has not offered or sold, and will not offer or sell, any
Securities except to those it reasonably believes to be QIBs and
that, in connection with each such sale, it has taken or will
take reasonable steps to ensure that the purchaser of such
Securities is aware that such sale is being made in reliance on
Rule 144A.
(c) Neither it nor any person acting on its behalf has made or
will make offers or sales of the Securities in the United States
by means of any form of general solicitation or general
advertising (within the meaning of Regulation D) in the United
States.
SECTION 4. Agreements. The Company agrees with each Initial
Purchaser that:
(a) The Company will furnish to each Initial Purchaser and to
Sidley Austin Brown & Wood llp, counsel for the Initial
Purchasers, without charge, during the period referred to in
paragraph (c) below, as many copies of the Final Memorandum and
any amendments and supplements thereto as they may reasonably
request.
(b) Prior to the completion of the distribution of the
Securities by the Initial Purchasers, the Company will not amend
or supplement the Final Memorandum unless the Company has
furnished to the Representatives a copy of such proposed
amendment or supplement for their review and will not effect any
such proposed amendment or supplement to which the
Representatives may reasonably object. The Company will promptly
advise the Representatives when any document filed under the 1934
Act that is incorporated by reference in the Final Memorandum
shall have been filed with the Commission.
(c) If at any time prior to the completion of the sale of the
Securities by the Initial Purchasers (as determined by the
Representatives), any event occurs as a result of which the Final
Memorandum, as then amended or supplemented, would include any
untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, or
if it should be necessary to amend or supplement the Final
Memorandum to comply with applicable law, the Company promptly
(i) will notify the Representatives of any such event; (ii)
subject to the requirements of paragraph (b) of this Section 4,
will prepare an amendment or supplement that will correct such
statement or omission or effect such compliance; and (iii) will
supply any supplemented or amended Final Memorandum to the
several Initial Purchasers and counsel for the Initial Purchasers
without charge in such quantities as they may reasonably request.
(d) The Company will arrange, if necessary, for the
qualification of the Securities for sale by the Initial
Purchasers under the laws of such jurisdictions as the Initial
Purchasers may designate and will maintain such qualifications in
effect so long as required for the sale of the Securities;
provided that in no event shall the Company be obligated to
qualify to do business in any jurisdiction where it is not now so
qualified or to take any action that would subject it to service
of process in suits, other than those arising out of the offering
or sale of the Securities, in any jurisdiction where it is not
now so subject. The Company will promptly advise the
Representatives of the 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
threatening of any proceeding for such purpose.
(e) During a period of two years after the latest date of
original issuance of the Securities, the Company will not, and
will not permit any of its Affiliates to, resell any Securities
that have been acquired by any of them; provided that after the
expiration of such two-year period, any Affiliate reselling
Securities that have been acquired by it shall comply with Rule
144 under the 1933 Act in connection with such sale.
(f) Neither the Company, nor any of its Affiliates, nor any
person acting on its or their behalf will, directly or
indirectly, make offers or sales of any security that would be
integrated with the sale of the Securities to the Initial
Purchasers in a manner that would require the registration of any
such sale of the Securities under the 1933 Act.
(g) Neither the Company, nor any of its Affiliates, nor any
person acting on its or their behalf will engage in any form of
general solicitation or general advertising (within the meaning
of Regulation D) in connection with any offer or sale of the
Securities in the United States.
(h) So long as any of the Securities are "restricted securities"
within the meaning of Rule 144(a)(3) under the 1933 Act, the
Company will, during any period in which it is not subject to and
in compliance with Section 13 or 15(d) of the 1934 Act, provide
to each holder of such restricted securities and to each
prospective purchaser (as designated by such holder) of such
restricted securities, upon the request of such holder or
prospective purchaser, any information required to be provided by
Rule 144A(d)(4) under the 1933 Act. This covenant is intended to
be for the benefit of the holders, and the prospective purchasers
designated by such holders, from time to time of such restricted
securities.
(i) The Company will cooperate with the Representatives and use
its best efforts to permit the Securities to be eligible for
clearance and settlement through DTC.
(j) During the period of ninety (90) days from the date of this
Agreement, the Company will not, without the prior written
consent of the Representatives, (A) directly or indirectly,
offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell,
grant any option for the sale of, or otherwise transfer or
dispose of, any shares of Common Stock or any security
convertible into or exercisable or exchangeable for or repayable
with shares of Common Stock; or (B) directly or indirectly, enter
into any swap or any other agreement or any transaction that
transfers, in whole or in part, the economic equivalent of
ownership of any shares of Common Stock, any security convertible
into or exercisable or exchangeable for or repayable with shares
of Common Stock whether any such swap or transaction is to be
settled by delivery of Securities, shares of Common Stock or
other securities, in case or otherwise. The foregoing sentence
shall not affect the ability of the Company to take any action in
connection with: (i) the issuance and sale of the Securities;
(ii) the issuance of shares of Common Stock upon the conversion
of the Securities; (iii) the issuance of shares of Common Stock
or securities convertible or exchangeable for Common Stock upon
the exercise of an option or warrant or the conversion of a
security outstanding on the date hereof; or (iv) the issuance of
shares of Common Stock or securities convertible into or
exchangeable for shares of Common Stock under the Company's
employee or director compensation plans or shareholder investment
plans in place on the date hereof.
(k) The Company will not take, directly or indirectly, any
action designed to or which has constituted or which might
reasonably be expected to cause or result, under the 1934 Act or
otherwise, in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Securities.
(l) In connection with the offering, until the completion of the
sale of the Securities by the Initial Purchasers, neither the
Company nor any of its Affiliates has or will, either alone or
with one or more persons, bid for or purchase for any account in
which it or any of its Affiliates has a beneficial interest, any
Securities or attempt to induce any person to purchase any
Securities; and neither it nor any of its Affiliates will make
bids or purchases for the purpose of creating actual or apparent
active trading in, or of raising the price of, the Securities.
(m) The Company shall take all reasonable action necessary to
enable Standard & Poor's Rating Services, a division of McGraw
Hill, Inc., and Moody's Investors Service, Inc. to provide their
respective credit ratings of the Securities.
(n) The Company agrees to pay the costs and expenses relating to
the following matters: (i) the fees of the Trustee; (ii) the
preparation, printing or reproduction of the Preliminary
Memorandum and Final Memorandum and each amendment or supplement
to either of them; (iii) the printing or reproduction and
delivery (including postage, air freight charges and charges for
counting and packaging) of such copies of the Preliminary
Memorandum and Final Memorandum, and all amendments or
supplements to either of them, as may, in each case, be
reasonably requested for use in connection with the offering and
sale of the Securities; (iv) the preparation, printing,
authentication, issuance and delivery of certificates for the
Securities, including any stamp or transfer taxes in connection
with the original issuance and sale of the Securities; (v) the
printing or reproduction and delivery of the Operative Documents,
any blue sky memorandum and all other agreements or documents
printed or reproduced and delivered in connection with the
offering of the Securities; (vi) any registration or
qualification of the Securities for offer and sale under the
securities or blue sky laws of the several states (including
filing fees and the reasonable fees and expenses of counsel for
the Initial Purchasers relating to such registration and
qualification); (vii) the transportation and other expenses
incurred by or on behalf of Company representatives in connection
with presentations to prospective purchasers of the Securities;
(viii) the fees and expenses of the Company's accountants and the
fees and expenses of counsel (including local and special
counsel) for the Company; (ix) any fees payable to rating
agencies in connection with the rating of the Securities; and (x)
all other costs and expenses incident to the performance by the
Company of its obligations hereunder.
(o) The Company will reserve and keep available at all times,
free of preemptive or other similar rights and liens and adverse
claims, sufficient shares of Common Stock to satisfy its
obligations to issue shares of Common Stock upon conversion of
the Securities.
SECTION 5. Conditions to the Obligations of the Initial
Purchasers. The obligations of the Initial Purchasers to
purchase the Firm Securities and the Option Securities, as the
case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Company
contained herein as of the date hereof, at the Closing Time and
on any Date of Delivery pursuant to Section 2 hereof, to the
accuracy of the statements of the Company made in any
certificates pursuant to the provisions hereof, to the
performance by the Company of its obligations hereunder and to
the following additional conditions:
(a) Since the time of execution of this Agreement, there shall
not have been any decrease in the rating of any of the Company's
debt securities by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the
1933 Act) or any additional notice given of any intended or
potential decrease in any such rating or of a possible change in
any such rating that does not indicate the direction of the
possible change.
(b) The Company shall have requested and caused Gary P. Van
Graafeiland, Esq., Senior Vice President and General Counsel of
the Company, to have furnished to the Representatives his
opinion, dated the Closing Time and addressed to the Initial
Purchasers, to the effect that:
(i) the Company and each of its subsidiaries has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation
and is duly qualified to conduct business and is in good standing
in each jurisdiction or place where the nature of its properties
or the conduct of its business requires such registration or
qualification, except where the failure so to register or qualify
does not have a Material Adverse Effect;
(ii) except as set forth in the Final Memorandum, the Company has
full corporate power and authority, and all necessary
governmental authorizations, approvals, orders, licenses,
certificates, franchises and permits of and from all governmental
regulatory officials and bodies (except where the failure so to
have any such authorizations, approvals, orders, licenses,
certificates, franchises or permits, individually or in the
aggregate, would not have a Material Adverse Effect), to own its
properties and to conduct its business as now being conducted, as
described in the Final Memorandum;
(iii) other than as described or contemplated in the
documents incorporated by reference in the Final Memorandum,
there are no legal or governmental proceedings pending or
threatened against the Company or any of its subsidiaries, or to
which the Company or any of its subsidiaries, or any of their
property, is subject, that are not so described as required;
(iv) there are no agreements, contracts, indentures, leases or
other instruments that are required to be described in the
documents incorporated by reference in the Final Memorandum that
are not so described as required;
(v) neither the Company nor any of its subsidiaries is in
violation in any material respect of any applicable law,
ordinance, administrative or governmental rule or regulation, or
of any decree of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries;
(vi) there is no holder of any security of the Company who has
the right to require registration under the 1933 Act of any
shares of common stock or other securities of the Company under
the Shelf Registration Statement or otherwise;
(vii) the Company has the corporate power and authority
necessary to execute and deliver the Operative Documents;
(viii) this Agreement and the Registration Rights Agreement
have been duly and validly authorized, executed and delivered by
the Company, and each such agreement constitutes the valid and
binding obligation of the Company, enforceable against the
Company in accordance with its terms, except as rights to
indemnity and contribution hereunder and thereunder may be
limited by public policy considerations;
(ix) the Indenture has been duly and validly authorized, executed
and delivered by the Company and constitutes the legal, valid and
binding obligation of the Company, enforceable against the
Company in accordance with its terms;
(x) the Securities are in the form contemplated by the Indenture
and have been duly and validly authorized by all necessary action
for issuance and sale, the terms of the Securities have been duly
established in accordance with the Indenture and this Agreement
in a manner that does not violate any applicable law or agreement
or instrument then binding on the Company, and the Securities
have been duly executed and, when authenticated as specified in
the Indenture and delivered against payment therefor in
accordance with this Agreement, will be legal, valid and binding
obligations of the Company, enforceable against the Company in
accordance with their terms and entitled to the benefits of the
Indenture;
(xi) all the outstanding shares of capital stock of the Company
have been duly and validly authorized and issued and are fully
paid and nonassessable; the shares of Common Stock issuable upon
conversion of the Securities have been duly authorized and
reserved for issuance by the Company and, when issued and
delivered by the Company upon conversion of the Securities in
accordance with the terms of the Securities and the Indenture,
will be validly issued, fully paid and non-assessable; and the
holders of outstanding shares of capital stock of the Company are
not entitled to preemptive or other rights to subscribe for the
Securities pursuant to the Company's certificate of incorporation
or the New Jersey Business Corporation Act;
(xii) the Company's authorized equity capitalization is as
set forth in the Final Memorandum; the capital stock of the
Company conforms in all material respects to the description
thereof contained in the Final Memorandum;
(xiii) none of the offer, issuance, sale and delivery of the
Securities pursuant hereto, the offer, issuance, sale and
delivery of the shares of Common Stock issuable upon the
conversion of the Securities, the execution, delivery and
performance by the Company of the Operative Documents, compliance
by the Company with the provisions hereof or thereof, incurrence
by the Company of the obligations herein or therein contemplated,
and consummation by the Company of the transactions contemplated
hereby or thereby or in the Final Memorandum (including the use
of the proceeds from the sale of the Securities as described in
the Final Memorandum under the caption "Use of Proceeds")
conflicts or will conflict with or constitutes or will constitute
a breach of, or a default under, the certificate of
incorporation, by-laws or other charter documents of the Company
or any material agreement, indenture, lease or other instrument
known to such counsel to which the Company is a party or by which
it or any of its property is bound, nor will any such action
result in any violation of any existing law, regulation, ruling
(assuming compliance with all applicable state securities laws),
judgment, injunction, order, decree or regulation known to such
counsel to be applicable to the Company or any of its properties;
(xiv) assuming (A) the accuracy of the representations and
warranties of the Company and the Initial Purchasers and
compliance by the Company and the Initial Purchasers with the
agreements contained herein and (B) the compliance by the Initial
Purchasers with the offering and transfer procedures and
restrictions described in the Final Memorandum, no registration
of the Securities under the 1933 Act, and no qualification of the
Indenture under the 1939 Act, is required for the offer and sale
by the Initial Purchasers of the Securities in the manner
contemplated by this Agreement;
(xv) no consent, approval, authorization or other order of, or
registration or filing with, any court, regulatory body,
administrative agency or other governmental body, agency or
official is required to be made or obtained by the Company
pursuant to the New Jersey Business Corporation Act or the laws,
rules or regulations of the State of New York or of the United
States of America in connection with the transactions
contemplated herein and in the other Operative Documents, except
such as will be required under the 1933 Act and the 1939 Act in
connection with the Company's obligations pursuant to the
Registration Rights Agreement and such as may be required under
state securities laws governing the purchase and distribution of
the Securities;
(xvi) the statements in the Final Memorandum and in the
documents incorporated by reference therein, insofar as they are
descriptions of contracts, agreements or other legal documents,
or refer to statements of law or legal conclusions, constitute
fair summaries thereof;
(xvii) such counsel is not aware of anything that has caused
such counsel to believe that the Final Memorandum, at the date
thereof, or any amendment thereto or supplement thereof, or the
documents incorporated by reference therein, as of each of their
respective dates, and in each case as of the Closing Time and as
of any Date of Delivery, contained an untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading (it being understood that such counsel need express no
opinion with respect to the financial statements and the notes
thereto and the schedules and other financial and statistical
data included in the Final Memorandum or included in the
documents incorporated by reference therein);
(xviii) the documents incorporated by reference in the Final
Memorandum (except that no opinion need be expressed as to the
financial statements and the notes thereto and the schedules and
other financial and statistical data contained therein) comply as
to form in all material respects with the applicable requirements
of the 1934 Act;
(xix) such counsel is not aware of any contracts or other
documents which are required to be filed by the 1934 Act or the
rules and regulations of the Commission thereunder as exhibits to
any document incorporated by reference in the Final Memorandum,
which have not been filed as exhibits to such document or
incorporated therein by reference as permitted by the 1934 Act or
the rules and regulations of the Commission thereunder; and
(xx) the Company is not and, after giving effect to the issue and
sale of the Securities, will not be, an "investment company" as
such term is defined in the Investment Company Act of 1940, as
amended.
The opinions set forth in paragraphs (viii), (ix)
and (x) above may be given subject to the effects of
bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating
to or affecting creditors' rights generally and to general
equitable principles, including an implied covenant of good
faith and fair dealing (regardless of whether enforceability
is considered in a proceeding in equity or at law).
The opinion shall be rendered as of the Closing
Time and may state that it shall be rendered solely for the
benefit of the Initial Purchasers, and may not be relied
upon by any other person without such counsel's prior
written consent.
In rendering such opinion, such counsel may rely
(A) as to matters involving the application of laws of any
jurisdiction other than the State of New York or the United
States, to the extent deemed proper and specified in such
opinion, upon the opinion of other counsel of good standing
believed to be reliable and who are satisfactory to counsel
for the Initial Purchasers; and (B) as to matters of fact,
to the extent deemed proper, on certificates of responsible
officers of the Company and public officials.
(c) The Representatives shall have received from Sidley Austin
Brown & Wood llp, counsel for the Initial Purchasers, such
opinion or opinions, dated the Closing Time and addressed to the
Representatives, with respect to the issuance and sale of the
Securities, the Final Memorandum (together with any supplement
thereto), the Operative Documents and other related matters as
the Representatives may reasonably require, and the Company shall
have furnished to such counsel such documents as they request for
the purpose of enabling them to pass upon such matters.
(d) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board,
its President or any Vice President and the Controller, Treasurer
or the principal financial or accounting officer of the Company,
dated the Closing Time, stating that:
(i) the representations, warranties and agreements of the
Company in this Agreement are true and correct on and as of the
Closing Time; the Company has complied with all its agreements
contained herein; and all conditions on its part to be performed
or satisfied as a condition to the obligation of the Initial
Purchasers to market the Securities set forth in this Agreement
have been fulfilled; and
(ii) they have examined the Final Memorandum and, to their
knowledge, (A) the Final Memorandum does not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading, and (B) since the date of the
most recent financial statements included or incorporated by
reference in the Final Memorandum, there has been no material
adverse change in the condition (financial or otherwise),
business, properties, net worth or earnings of the Company and
its subsidiaries taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set
forth or contemplated in the Final Memorandum.
(e) The Company shall have requested and caused
PricewaterhouseCoopers, LLP to have furnished to the
Representatives, at the date hereof and at the Closing Time,
letters, dated respectively as of the date hereof and as of the
Closing Time, in form and substance satisfactory to the
Representatives, together with signed or reproduced copies of
such letters for each of the other Initial Purchasers containing
statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to
the financial statements and certain financial information
contained in the Final Memorandum and the documents incorporated
by reference therein.
(f) The Securities shall be eligible for clearance and
settlement through DTC.
(g) Prior to the Closing Time, the Company shall have furnished
to the Representatives such further information, certificates and
documents as the Representatives may reasonably request.
(h) Conditions to Purchase of Option Securities. In the event
that the Initial Purchasers exercise their option provided in
Section 2(b) hereof to purchase all or any portion of the Option
Securities, the representations and warranties of the Company
contained herein and the statements in any certificate furnished
by the Company or any subsidiary of the Company hereunder shall
be true and correct as of each Date of Delivery and, at the
relevant Date of Delivery, the Representatives shall have
received:
(i) A certificate, dated such Date of Delivery, signed by the
Chairman of the Board, its President or any Vice President and
the Controller, Treasurer or the principal financial or
accounting officer of the Company confirming that the certificate
delivered at Closing Time pursuant to Section 5(d) hereof remains
true and correct as of such Date of Delivery.
(ii) The opinion of Gary P. Van Graafeiland, Esq., Senior Vice
President and General Counsel of the Company, in form and
substance satisfactory to counsel for the Initial Purchasers,
dated such Date of Delivery, relating to the Option Securities to
be purchased on such Date of Delivery and otherwise to the same
effect as the opinion required by Section 5(b) hereof.
(iii) The opinion of Sidley Austin Brown & Wood llp, counsel
for the Initial Purchasers, dated such Date of Delivery, relating
to the Option Securities to be purchased on such Date of Delivery
and otherwise to the same effect as the opinion required by
Section 5(c) hereof.
(iv) A letter from PricewaterhouseCoopers, LLP, in form and
substance satisfactory to the Representatives and dated such Date
of Delivery, substantially in the same form and substance as the
letter furnished to the Representatives pursuant to Section 5(f)
hereof, except that the "specified date" in the letter furnished
pursuant to this paragraph shall be a date not more than five
days prior to such Date of Delivery.
If any of the conditions specified in this Section
5 shall not have been fulfilled in all material respects
when and as provided in this Agreement, or if any of the
opinions and certificates mentioned above or elsewhere in
this Agreement shall not be in all material respects
reasonably satisfactory in form and substance to the
Representatives and counsel for the Initial Purchasers, this
Agreement and all obligations of the Initial Purchasers
hereunder may be canceled at, or at any time prior to, the
Closing Time by the Representatives. Notice of such
cancellation shall be given to the Company in writing or by
telephone or facsimile confirmed in writing.
SECTION 6. Reimbursement of Initial Purchasers' Expenses. If
this Agreement shall be terminated by the Initial Purchasers or
any of them, because of any failure or refusal on the part of the
Company to comply with the terms or to fulfill any of the
conditions of this Agreement or if for any reason the Company
shall be unable to perform its obligations under this Agreement,
the Company will reimburse the Initial Purchasers or such Initial
Purchasers as have so terminated this Agreement, with respect to
themselves, severally, for all out-of-pocket expenses (including
the reasonable fees and disbursements of their counsel)
reasonably incurred by such Initial Purchasers in connection with
the Securities.
SECTION 7. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each Initial
Purchaser, and each of its directors and officers, and each
person, if any, who controls such Initial Purchaser within the
meaning of the 1933 Act or the 1934 Act from and against any
loss, claim, damage or liability, joint or several, and any
action in respect thereof, to which such Initial Purchaser or any
such director, officer or controlling person may become subject,
under the 1933 Act, the 1934 Act or other federal or state
statutory law or regulation, at common law or otherwise, insofar
as such loss, claim, damage, liability or action arises out of,
or is based upon, any untrue statement or alleged untrue
statement of a material fact contained in the Final Memorandum
(as amended or supplemented), or arises out of, or is based upon,
the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and shall reimburse each Initial
Purchaser or any such director, officer or controlling person for
any legal and other expenses (including reasonable fees and
disbursements of counsel) reasonably incurred by such Initial
Purchaser, director, officer or controlling person in
investigating or defending or preparing to defend against any
such loss, claim, damage, liability or action, including any
amounts paid in settlement of any litigation, investigation or
proceeding; provided, however, 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 the Final Memorandum (as amended or
supplemented) in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any
Initial Purchaser through the Representatives specifically for
inclusion therein; provided, further, that as to the Preliminary
Memorandum, this indemnity agreement shall not inure to the
benefit of any Initial Purchaser on account of any loss, claim,
damage, liability or action arising from the sale of Securities
to any person by that Initial Purchaser if that Initial Purchaser
failed to send or give a copy of the Final Memorandum, as the
same may be amended or supplemented, to that person within the
time required by the Securities Act, and the untrue statement or
alleged untrue statement of a material fact or omission or
alleged omission to state a material fact in such Preliminary
Memorandum was corrected in the Final Memorandum, unless such
failure resulted from non-compliance by the Company with Section
4. The foregoing indemnity agreement is in addition to any
liability which the Company may otherwise have to any Initial
Purchaser, director, officer or controlling person.
(b) Each Initial Purchaser shall indemnify and hold harmless the
Company, each of its directors and officers and any person who
controls the Company within the meaning of the 1933 Act or the
1934 Act from and against any loss, claim, damage or liability,
joint or several, and any action in respect thereof, to which the
Company or any such director, officer or controlling person may
become subject, under the 1933 Act, the 1934 Act or other federal
or state statutory law or regulation, at common law or otherwise,
insofar as such loss, claim, damage, liability or action arises
out of, or is based upon, any untrue statement or alleged untrue
statement of a material fact contained in the Final Memorandum
(as amended or supplemented), or arises out of, or is based upon,
the omission or alleged omission to state therein a 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
written information furnished to the Company by or on behalf of
any Initial Purchaser through the Representatives specifically
for inclusion therein, and shall reimburse the Company or any
such director, officer or controlling person for any legal and
other expenses reasonably incurred by such indemnified party in
investigating or defending or preparing to defend against any
such loss, claim, damage, liability or action. The foregoing
indemnity agreement is in addition to any liability which any
Initial Purchaser may otherwise have to the Company or any of its
directors, officers or controlling persons. The Company
acknowledges that the statements set forth in the last paragraph
of the cover page and the third paragraph, the fourth sentence of
the eighth paragraph, and the ninth and tenth paragraphs under
the heading "Plan of Distribution" in the Final Memorandum
constitute the only information furnished in writing by or on
behalf of the Initial Purchasers for inclusion in the documents
referred to in the foregoing indemnity.
(c) Promptly after receipt by an indemnified party under this
Section 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
Section 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 to an indemnified party
otherwise than under this Section 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 singularly notified
indemnifying party, to assume the defense thereof with counsel
satisfactory to the indemnified party; provided, however, that
the Initial Purchasers shall have the right to employ separate
counsel to represent the Initial Purchasers who may be subject to
liability arising out of any claim in respect of which indemnity
may be sought by the Initial Purchasers against the Company under
this Section 7 if, in the reasonable judgment of the Initial
Purchasers, it is advisable for the Initial Purchasers to be
represented by separate counsel, and in that event the reasonable
fees and expenses of such counsel shall be paid by the Company.
Upon receipt of notice from the indemnifying party to the
indemnified party of its election to assume the defense of such
claim or action and approval by the indemnified party of counsel,
the indemnifying party shall not be liable to the indemnified
party under this Section 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
unless (i) the indemnified party shall have employed separate
counsel in connection with the proviso to the next preceding
sentence (it being understood, however, that the indemnifying
party shall not be liable for the expenses of more than one
separate counsel, approved by the Initial Purchasers in the case
of paragraph (a) of this Section 7, representing the indemnified
parties under such paragraph (a) who are parties to such action),
(ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of
commencement of the action or (iii) the indemnifying party has
authorized the employment of counsel for the indemnified party at
the expense of the indemnifying party; and except that, if clause
(i) or (iii) is applicable, such liability shall be only in
respect of the counsel referred to in such clause (i) or (iii).
The indemnifying party shall not be liable for any settlement of
any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by
reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall
have requested an indemnifying party to reimburse the indemnified
party for fees and expenses of counsel, the indemnifying party
agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by
such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified
party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement
of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity
could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the
subject matter of such proceeding.
(d) If the indemnification provided for in this Section 7 shall
for any reason be unavailable to an indemnified party under
paragraphs (a) or (b) hereof 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 any
Initial Purchasers 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 any Initial Purchasers 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 any Initial
Purchasers 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 (before deducting expenses)
received by the Company bears to the total commissions received
by such Initial Purchaser with respect to such offering. 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 by any Initial Purchaser,
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 Initial Purchasers agree that
it would not be just and equitable if contributions pursuant to
this paragraph (d) were to be determined by pro rata allocation
(even if the Initial Purchasers 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 (d) shall be
deemed to include, for purposes of this paragraph (d), any legal
or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this paragraph (d), no
Initial Purchaser shall be required to contribute any amount in
excess of the amount by which the total price at which the
Securities sold through such Initial Purchaser and distributed to
the public were offered to the public exceeds the amount of any
damages which such Initial Purchaser 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
1933 Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The
obligations of the Initial Purchasers in this paragraph (d) to
contribute are several in proportion to the respective principal
amounts of Securities they have purchased hereunder, and not
joint.
(e) The respective indemnities, agreements, representations,
warranties and other statements of the Company and the Initial
Purchasers contained in this Agreement, or made by or on behalf
of them, respectively, pursuant to this Agreement, shall remain
operative and in full force and effect, regardless of any
termination of this Agreement, any investigation made by or on
behalf of any Initial Purchaser, its directors or officers or any
person controlling such Initial Purchaser or by or on behalf of
the Company, its directors or officers or any person controlling
the Company and shall survive delivery of and payment for any of
the Securities.
SECTION 8. Default by an Initial Purchaser. If one or more
of the Initial Purchasers shall fail at Closing Time or a Date of
Delivery to purchase the Securities which it or they are
obligated to purchase under this Agreement (the "Defaulted
Securities"), the Representatives shall have the right, within 24
hours thereafter, to make arrangements for one or more of the non-
defaulting Initial Purchasers, or any other underwriters, to
purchase all, but not less than all, of the Defaulted Securities
in such amounts as may be agreed upon and upon the terms herein
set forth; if, however, the Representatives shall not have
completed such arrangements within such 24-hour period, then:
(a) if the principal amount of Defaulted Securities does not
exceed 10% of the principal amount of Securities to be purchased
on such date, the non-defaulting Initial Purchasers shall be
obligated, each severally and not jointly, to purchase the full
amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting Initial Purchasers, or
(b) if the principal amount of Defaulted Securities exceeds 10%
of the principal amount of Securities to be purchased on such
date, this Agreement or, with respect to any Date of Delivery
which occurs after the Closing Time, the obligation of the
Initial Purchasers to purchase and of the Company to sell the
Option Securities to be purchased and sold on such Date of
Delivery shall terminate without liability on the part of any non-
defaulting Initial Purchaser.
No action taken pursuant to this Section shall
relieve any defaulting Initial Purchaser from liability in
respect of its default.
In the event of any such default which does not
result in termination of this Agreement or, in the case of a
Date of Delivery which is after the Closing Time, which does
not result in a termination of the obligation of the Initial
Purchasers to purchase and the Company to sell the relevant
Option Securities, as the case may be, either the
Representatives or the Company shall have the right to
postpone the Closing Time or the relevant Date of Delivery,
as the case may be, for a period not exceeding seven days in
order to effect any required changes in the Final Memorandum
or in any other documents or arrangements. As used herein,
the term "Initial Purchaser" includes any person substituted
for an Initial Purchaser under this Section 8.
SECTION 9. Termination. The Representatives may terminate
this Agreement, by notice to the Company, at any time at or prior
to Closing Time, if there shall have occurred (i) 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, stockholders' equity, business, properties, condition
(financial or other), results of operations or prospects of the
Company and its subsidiaries, taken as a whole, which, in the
opinion of the Representatives, materially impairs the investment
quality of the Securities; (ii) a suspension or material
limitation in trading in the securities of the Company by the
Commission or the New York Stock Exchange, or a suspension or
material limitation in trading in securities generally on the New
York Stock Exchange, the American Stock Exchange or the over-the-
counter market or the establishment of minimum prices on such
exchanges or such market by the Commission, by such exchange or
by any other regulatory body or governmental authority having
jurisdiction; (iii) a general moratorium on commercial banking
activities declared by Federal or New York State authorities;
(iv) any major disruption of settlements of securities; (v) any
downgrading in the rating accorded the Company's debt securities
or preferred stock by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g)
under the Securities Act), or any public announcement that any
such organization has under surveillance or review its rating of
any debt securities or preferred stock of the Company (other than
an announcement with positive implications of a possible
upgrading, and no implication of a possible downgrading, of such
rating); (vi) any outbreak or escalation of major hostilities in
which the United States is involved, any declaration of war by
Congress or any other substantial national calamity or emergency;
or (vii) any material adverse change in the existing financial,
political or economic conditions in the United States, including
any effect of international conditions on the financial markets
in the United States, that in the judgment of the Representatives
makes it impracticable or inadvisable to proceed with the
offering or the delivery of the Securities as contemplated by the
Final Memorandum.
SECTION 10. Representations and Indemnities to Survive. The
respective agreements, representations, warranties, indemnities
and other statements of the Company or its officers and of the
Initial Purchasers set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of any Initial Purchaser or
the Company or any of the officers, directors or controlling
persons referred to in Section 7 hereof, and will survive
delivery of and payment for the Securities. The provisions of
Sections 6 and 7 hereof shall survive the termination or
cancellation of this Agreement.
SECTION 11. Notices. All communications hereunder will be in
writing and effective only on receipt, and, if sent to the
Representatives, will be mailed, delivered or telefaxed to
Citigroup Global Markets Inc., Attention: General Counsel, 388
Greenwich Street, New York, New York 10013 (Fax Number: (212)
816-7912), and to Lehman Brothers Inc., Attention: General
Counsel and Syndicate Registration, 399 Park Avenue, New York,
New York 10022 (Fax Number: (212) 526-0943), or, if sent to the
Company, will be mailed, delivered or telefaxed to Eastman Kodak
Company, 343 State Street, Rochester, New York 14650-0218,
Attention: Office of the Corporate Secretary (Fax No: (585) 724-
9549).
SECTION 12. Successors. This Agreement will inure to the
benefit of and be binding upon the parties hereto and their
respective successors and the officers and directors and
controlling persons referred to in Section 7 hereof, and, except
as expressly set forth in Section 4(h) hereof, no other person
will have any right or obligation hereunder.
SECTION 13. Applicable Law. This Agreement will be governed
by and construed in accordance with the laws of the State of New
York applicable to contracts made and to be performed within the
State of New York.
SECTION 14. Waiver of Tax Confidentiality. Notwithstanding
anything herein to the contrary, purchasers of the Securities
(and each employee, representative or other agent of the Company)
may disclose to any and all persons, without limitation of any
kind, the U.S. tax treatment and U. S. tax structure of any
transaction contemplated herein and all materials of any kind
(including opinions or other tax analyses) that are provided to
the purchasers of the Securities relating to such U.S. tax
treatment and U.S. tax structure, other than any information for
which nondisclosure is reasonably necessary in order to comply
with applicable securities laws.
SECTION 15. Counterparts. This Agreement may be signed in one
or more counterparts, each of which shall constitute an original
and all of which together shall constitute one and the same
agreement.
SECTION 16. Headings. The section headings used herein are
for convenience only and shall not affect the construction
hereof.
[SIGNATURE PAGES FOLLOW]
If the foregoing is in accordance with your
understanding of our agreement, please sign and return to us
the enclosed duplicate hereof, whereupon this letter and
your acceptance shall represent a binding agreement among
the Company and the several Initial Purchasers.
Very truly yours,
EASTMAN KODAK COMPANY
By:
Name: Daniel A. Carp
Title: Chairman of the Board
of Directors and
Chief Executive Officer
The foregoing Purchase Agreement is
hereby confirmed and accepted as of
the date first above written.
CITIGROUP GLOBAL MARKETS INC.
By:________________________
Name:
Title:
LEHMAN BROTHERS INC.
By:________________________
Name:
Title:
For themselves and the other several
Initial Purchasers named in Schedule I hereto.
SCHEDULE I
AMOUNT OF SECURITIES TO BE PURCHASED
Initial Purchaser Principal Amount
of Securities to
be Purchased
Citigroup Global Markets Inc. $ 200,000,000
Lehman Brothers Inc. 200,000,000
Scotia Capital (USA) Inc. 15,625,000
BNP Paribas Securities Corp. 15,625,000
HSBC Securities (USA) Inc. 8,750,000
Morgan Stanley & Co. Incorporated 8,750,000
Deutsche Bank Securities Inc. 8,750,000
Mizuho International plc 6,875,000
ABN AMRO Rothschild LLC 6,250,000
ING Financial Markets LLC 5,000,000
Daiwa Securities SMBC Europe Limited 5,000,000
Santander Central Hispano Investment
Securities Inc. 3,750,000
UFJ International plc 3,750,000
BNY Capital Markets, Inc. 2,500,000
McDonald Investments Inc., a Keycorp Company 2,500,000
PNC Capital Markets, Inc. 2,500,000
Wells Fargo Securities, LLC 2,500,000
Barclays Capital Inc. 1,875,000
TOTAL: $ 500,000,000