UNITED STATES

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 25, 2021

 

 

EASTMAN KODAK COMPANY

(Exact name of registrant as specified in its charter)

 

 

 

NEW JERSEY   1-87   16-0417150

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

343 State Street

Rochester, NY 14650

(Address of principal executive offices with zip code)

(585) 724-4000

(Registrant’s telephone number, including area code)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol

 

Name of each exchange

on which registered

Common Stock, $0.01 par value per share   KODK   New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Item 1.01 Entry into a Material Definitive Agreement.

Repurchase and Exchange Agreement

On February 26, 2021, Eastman Kodak Company (the “Company”), Southeastern Asset Management, Inc. (“Southeastern”) and Longleaf Partners Small-Cap Fund, C2W Partners Master Fund Limited and Deseret Mutual Pension Trust, which are investment funds managed by Southeastern (such investment funds, collectively, the “Purchasers”), entered into a Series A Preferred Stock Repurchase and Exchange Agreement (the “Repurchase and Exchange Agreement”) pursuant to which the Company agreed to repurchase from the Purchasers, and the Purchasers agreed to sell to the Company, an aggregate of 1,000,000 shares of the Company’s 5.50% Series A Convertible Preferred Stock, no par value per share (the “Series A Preferred Stock”), for an aggregate repurchase price of $100,641,667, representing the liquidation value of the repurchased Series A Preferred Stock plus accrued and unpaid dividends. In addition, the Company and the Purchasers agreed to exchange the remaining 1,000,000 shares of Series A Preferred Stock held by the Purchasers for shares of the Company’s newly created 4.0% Series B Convertible Preferred Stock, no par value (the “Series B Preferred Stock”) on a one-for-one basis.

The Repurchase and Exchange Agreement contains largely customary terms for private repurchases of preferred shares and private investments in public companies, including representations, warranties, covenants and closing conditions. The Repurchase and Exchange Agreement also provides for the Company to register for resale the shares of common stock of the Company, par value $0.01 per share (the “Common Stock”), issuable upon conversion of the Series B Preferred Stock and extends the terms of the existing Registration Rights Agreement between the Company and the Purchasers, dated as of November 15, 2016, to such shares of Common Stock.

On February 26, 2021, the Company and the Purchasers closed the transaction contemplated by the Repurchase and Exchange Agreement, and the Company repurchased 1,000,000 shares of the Series A Preferred Stock from the Holders for the repurchase price described above and issued to the Purchasers an aggregate of 1,000,000 shares of the Series B Preferred Stock in exchange for the remaining 1,000,000 shares of Series A Preferred Stock held by the Purchasers. In connection with the exchange, the Company paid the Purchasers $641,666, representing the accrued and unpaid dividends on the exchanged shares of Series A Preferred Stock.

Certificate of Designations of the Series B Preferred Stock

On February 25, 2021, the Company filed with the Department of Treasury of the State of New Jersey a Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of the Company (the “Series B Certificate of Designations”) creating the Series B Preferred Stock and establishing the designation, number of shares, rights, preferences and limitations of the Series B Preferred Stock. The Series B Certificate of Designations became effective upon filing. The Series B Preferred Stock ranks senior to the Common Stock and pari passu with the Series C Preferred Stock (defined below), with respect to dividend rights and rights on liquidation, winding-up and dissolution. The Series B Preferred Stock has a liquidation preference of $100 per share, and holders of Series B Preferred Stock are entitled to cumulative dividends payable quarterly in cash at a rate of 4.0% per annum. If dividends on any Series B Preferred Stock are in arrears for six or more consecutive or non-consecutive dividend periods, the holders of the Series B Preferred Stock will be entitled to nominate one director at the next annual shareholder meeting and all subsequent

 

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shareholder meetings until all accumulated dividends on such Series B Preferred Stock have been paid or set aside. Holders of Series B Preferred Stock will have certain limited special approval rights, including with respect to the issuance of pari passu or senior equity securities of the Company.

Holders of the Series B Preferred Stock will have the right to elect at any time to convert their shares of Series B Preferred Stock into shares of Common Stock at the initial conversion rate of 9.5238 shares of Common Stock for each share of Series B Preferred Stock (equivalent to an initial conversion price of $10.50 per share of Common Stock). The initial conversion rate and the corresponding conversion price will be subject to certain customary anti-dilution adjustments. At any time after the initial issuance of the Series B Preferred Stock, if the closing price of the Common Stock has equaled or exceeded $14.50 (subject to adjustment in the same manner as the conversion price) for 45 trading days within a period of 60 consecutive trading days, the Company will have the right to cause the mandatory conversion of the Series B Preferred Stock into shares of Common Stock.

If a holder elects to convert any shares of Series B Preferred Stock during a specified period in connection with a fundamental change, the holder will be entitled to receive either (i) the number of shares of Common Stock it would otherwise receive upon a conversion of such shares plus an additional number of shares based on the date of such fundamental change and the price per share of the Common Stock in connection with such fundamental change (or cash payment in lieu of such additional shares) or (ii) a number of shares of Common Stock at a conversion rate based on the market value per share of the Common Stock during the 15 consecutive trading day period immediately prior to such fundamental change, subject to certain limitations. Such holder will also be entitled to a payment in respect of accumulated dividends. In addition, the Company will have the right to require holders to convert any shares of Series B Preferred Stock in connection with certain reorganization events at a conversion rate based on the market value per share of the Common Stock during the 15 consecutive trading day period immediately prior to such reorganization event, subject to certain limitations.

If any shares of Series B Preferred Stock have not been converted prior to 91 days following the fifth anniversary of the initial issuance of the Series B Preferred Stock, the Company will be required to redeem such shares at a redemption price equal to the liquidation preference of the redeemed shares plus the amount of accrued and unpaid dividends thereon.

Purchase Agreement

On February 26, 2021, the Company, and GO EK Ventures IV, LLC (the “Investor”), entered into a Series C Preferred Stock Purchase Agreement (the “Purchase Agreement”) pursuant to which the Company agreed to sell to the Investor, and the Investor agreed to purchase from the Company, an aggregate of 1,000,000 shares of the Company’s newly created 5.0% Series C Convertible Preferred Stock, no par value per share (the “Series C Preferred Stock”), for a purchase price of $100 per share, representing $100,000,000 of gross proceeds to the Company. The Investor is a fund managed by Grand Oaks Capital. The Company intends to use the proceeds from the sale of the Series C Preferred Stock for general corporate purposes including the funding of growth initiatives. No person will be entitled to a discount or commission in connection with the sale of the Series C Preferred Stock pursuant to the Purchase Agreement.

 

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Pursuant to the Purchase Agreement, the Investor will have the right to nominate at the Company’s annual or special shareholder meetings one member to the Company’s board of directors (the “Board”). This nomination right expires upon the earlier to occur of the third anniversary of the initial issuance of the Series C Preferred Stock or the Investor ceasing to directly or indirectly hold at least a majority of the shares of Series C Preferred Stock purchased pursuant to the Purchase Agreement or the Common Stock received upon the conversion of such shares, and is exclusive to the Investor and does not transfer with the Series C Preferred Stock.

The Purchase Agreement contains largely customary terms for private investments in public companies, including representations, warranties, covenants and closing conditions.

On February 26, 2021, the Company and the Investor closed the initial portion of the transactions contemplated by the Purchase Agreement, and the Company issued to the Investor an aggregate of 750,000 shares of the Series C Preferred Stock for a purchase price of $75,000,000. The issuance and sale of the remaining 250,000 shares of Series C Preferred Stock to the Investor is subject to the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and the Company expects such issuance and sale to occur prior to April 12, 2021.

Certificate of Designations of the Series C Preferred Stock

On February 25, 2021, the Company filed with the Department of Treasury of the State of New Jersey a Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of the Company (the “Series C Certificate of Designations”) creating the Series C Preferred Stock and establishing the designation, number of shares, rights, preferences and limitations of the Series C Preferred Stock. The Series C Certificate of Designations became effective upon filing. The Series C Preferred Stock ranks senior to the Common Stock and pari passu with the Series B Preferred Stock with respect to dividend rights and rights on liquidation, winding-up and dissolution. The Series C Preferred Stock has an initial liquidation preference of $100 per share, and holders of Series C Preferred Stock will be entitled to cumulative dividends payable quarterly “in-kind” in the form of additional shares of Series C Preferred Stock at a rate of 5.0% per annum. If dividends on the Series C Preferred Stock are not declared and paid for any given fiscal quarter, the liquidation preference is automatically increased by the amount of such unpaid dividends. Holders of the Series C Preferred Stock will also be entitled to participate in any dividends paid on the Common Stock (other than stock dividends) on an as-converted basis, with such dividends on any shares of the Series C Preferred Stock being payable upon conversion of such shares of Series C Preferred Stock to Common Stock. Holders of Series C Preferred Stock are entitled to vote together with the holders of the Common Stock as a single class, in each case, on an as-converted basis, except where a separate class vote is required by law. Holders of Series C Preferred Stock will have certain limited special approval rights, including with respect to the issuance of pari passu or senior equity securities of the Company.

Holders of the Series C Preferred Stock have the right to elect at any time to convert their shares of Series C Preferred Stock into shares of Common Stock at the initial conversion price of $10 per share of Common Stock, corresponding to an initial conversion rate of 10 shares of Common Stock for each share of Series C Preferred Stock. The initial conversion price and the corresponding conversion rate will be subject to certain customary anti-dilution adjustments and to proportional increase in the event the liquidation preference of the Series C Preferred Stock is automatically increased as described above.

The Company will have the right to cause the mandatory conversion of the Series C Preferred Stock into shares of Common Stock (i) at any time after the second anniversary of the initial issuance of the Series C Preferred Stock, if the closing price of the Common Stock has equaled or exceeded 200% of the then-effective conversion price for 45 trading days within a period of 60 consecutive trading days, or (ii) at any time after the third anniversary of the initial issuance of the Series C Preferred Stock, if the closing price of the Common Stock has equaled or exceeded 150% of the then-effective conversion price for 45 trading days within a period of 60 consecutive trading days.

 

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If a holder elects to convert any shares of Series C Preferred Stock during a specified period in connection with a fundamental change, the holder will be entitled to receive either (i) the number of shares of Common Stock it would otherwise receive upon a conversion of such shares plus an additional number of shares based on the date of such fundamental change and the price per share of the Common Stock in connection with such fundamental change (or cash payment in lieu of such additional shares) or (ii) a number of shares of Common Stock at a conversion rate based on the market value per share of the Common Stock during the 15 consecutive trading day period immediately prior to such fundamental change, subject to certain limitations. Such holder will also be entitled to a payment in respect of accumulated dividends and a payment based on the present value of all required remaining scheduled dividend payments in respect of the converted shares through the date that is 91 days following the fifth anniversary of the initial issuance of the Series C Preferred Stock. Such additional payments will be payable at the Company’s option in cash or in additional shares of Common Stock. In addition, the Company will have the right to require holders to convert any shares of Series C Preferred Stock in connection with certain reorganization events at a conversion rate based on the market value per share of the Common Stock during the 15 consecutive trading day period immediately prior to such reorganization event, subject to certain limitations.

If any shares of Series C Preferred Stock have not been converted prior to 91 days following the fifth anniversary of the initial issuance of the Series C Preferred Stock, the Company will be required to redeem such shares at a redemption price equal to the liquidation preference of the redeemed shares plus the amount of accrued and unpaid dividends thereon; provided that the holders of the Series C Preferred Stock have the right to extend such redemption date by up to two years.

Series C Registration Rights Agreement

On February 26, 2021, the Company and the Investor entered into a Registration Rights Agreement (the “Series C Registration Rights Agreement”) which provides the Investor with customary registration rights in respect of the shares of Common Stock issuable upon conversion of the Series C Preferred Stock. The Series C Registration Rights Agreement contains other customary terms and conditions, including certain customary indemnification obligations.

Amendment to ABL Credit Agreement

On February 26, 2021, the Company and certain of its domestic subsidiaries (the “Subsidiary Guarantors”) entered into an amendment (the “ABL Amendment”) to the Amended and Restated Credit Agreement, dated as of May 26, 2016, among the Company, the Subsidiary Guarantors, the lenders party thereto, Bank of America, N.A., as agent (the “Agent”), and Bank of America, N.A. and JPMorgan Chase Bank, N.A., as arrangers (the “ABL Credit Agreement” and, as amended by the ABL Amendment, the “Amended ABL Credit Agreement”), with the Agent and the Required Lenders as such term is defined in the ABL Credit Agreement.

 

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The ABL Amendment amends the ABL Credit Agreement to, among other things, (i) extend the maturity date to February 26, 2024 or the date that is 90 days prior to the earliest scheduled maturity date or mandatory redemption date of any of the Company’s Term Loan Credit Agreement (as defined below), Convertible Notes (as defined below), Series B Preferred Stock, Series C Preferred Stock or any refinancings of any of the foregoing and (ii) decrease the aggregate amount of commitments from $110,000,000 to $90,000,000. Commitments under the Amended ABL Credit Agreement continue to be able to be used in the form of revolving loans or letters of credit.

The revolving loans bear interest at the rate of LIBOR plus 3.50%-4.00% per annum (subject to provisions providing for a replacement benchmark rate upon the discontinuation of LIBOR) or a floating Base Rate (as defined in the Amended ABL Credit Agreement) plus 2.50%-3.00% per annum, based on Excess Availability (as defined in the Amended ABL Credit Agreement). The Company will pay an unused line fee of 37.5-50 basis points per annum, depending on whether the unused portion of the maximum commitments is less than or equal to 50% or greater than 50% of such commitments, respectively. The Company will pay a letter of credit fee of 3.50%-4.00% per annum, based on Excess Availability, on issued and outstanding letters of credit, in addition to a fronting fee of 25 basis points on such letters of credit.

Obligations under the Amended ABL Credit Agreement continue to be secured by: (i) a first priority lien on assets of the Company and the Subsidiary Guarantors constituting cash (other than L/C Cash Collateral, as defined below), accounts receivable, inventory, machinery and equipment and certain other assets (the “ABL Priority Collateral”) and (ii) a second priority lien on substantially all assets of the Company and the Subsidiary Guarantors (subject to certain exceptions) other than the ABL Priority Collateral, including 100% of the stock of material U.S. subsidiaries and 65% of the stock of material foreign subsidiaries.

The Amended ABL Credit Agreement continues to limit, among other things, the ability of the Company and its Restricted Subsidiaries (as defined in the Amended ABL Credit Agreement) to (i) incur indebtedness, (ii) incur or create liens, (iii) dispose of assets, (iv) make restricted payments and (v) make investments. The Amended ABL Credit Agreement leaves in place customary affirmative covenants, including delivery of certain of the Company’s financial statements set forth therein. The ABL Amendment also adds a requirement, tested quarterly, that the Company maintain Minimum Liquidity (as defined in the Amended ABL Credit Agreement) of at least $80,000,000.

Letter of Credit Facility Agreement

On February 26, 2021, the Company and the Subsidiary Guarantors entered into a Letter of Credit Facility Agreement (the “L/C Facility Agreement”) among the Company, the Subsidiary Guarantors, the lenders party thereto (the “L/C Lenders”), Bank of America, N.A., as agent and Bank of America, N.A., as issuing bank. Pursuant to the L/C Facility Agreement, the L/C Lenders committed to issue letters of credit on the Company’s behalf in an aggregate amount of up to $50,000,000, provided that the Company posts cash collateral in an amount greater than or equal to 103% of the aggregate amount of letters of credit issued and outstanding at any given time (the “L/C Cash Collateral”). The term of the L/C Facility Agreement is three years, subject to the same automatic springing maturity as the Amended ABL Credit Agreement. The current balance on deposit in the L/C Cash Collateral account is approximately $49,470,000, of which $14,200,000 was deposited into the L/C Cash Collateral account from proceeds of the financing transactions described herein and the remainder of which was cash collateral previously used to secure letters of credit under the ABL Credit Agreement.

 

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The Company will pay an unused line fee of 37.5-50 basis points per annum, depending on whether the unused portion of the maximum commitments is less than or equal to 50% or greater than 50% of such commitments, respectively. The Company will pay a letter of credit fee of 3.75% per annum on issued and outstanding letters of credit, in addition to a fronting fee of 25 basis points on such letters of credit. Amounts drawn under any letter of credit will be reimbursed from the L/C Cash Collateral. If not so reimbursed, and not otherwise repaid by the Company to the applicable L/C Lenders, such amounts will accrue interest, to be paid monthly, at a floating Base Rate (as defined in the L/C Facility Agreement) plus 2.75% per annum until repaid.

The Company’s obligations under the L/C Facility Agreement are guaranteed by the Subsidiary Guarantors, and are secured by (i) a first priority lien on the L/C Cash Collateral, (ii) a second priority lien on the ABL Priority Collateral and (iii) a third priority lien on the Term Loan Priority Collateral (as defined below).

The L/C Facility Agreement contains substantially the same customary affirmative and negative covenants as the Amended ABL Credit Agreement, including the Minimum Liquidity requirement.

Term Loan Credit Agreement

On February 26, 2021, the Company entered into a Credit Agreement (the “Term Loan Credit Agreement”) with certain funds affiliated with Kennedy Lewis Investment Management LLC (“KLIM”) as lenders (the “Term Loan Lenders”) and Alter Domus (US) LLC, as administrative agent. Pursuant to the Term Loan Credit Agreement, the Term Loan Lenders provided the Company with (i) an initial term loan in the amount of $225,000,000, which was drawn in full on the same date, and (ii) a commitment to provide delayed draw term loans in an aggregate principal amount of up to $50,000,000 on or before February 26, 2023 (collectively, the “Term Loans”). The Term Loans have a five-year maturity and are non-amortizing.

The Term Loans bear interest at a rate of 8.5% per annum payable in cash and 4.0% per annum payable “in-kind” or in cash at the Company’s option, for an aggregate interest rate of 12.5% per annum. The Term Loans are guaranteed by the Subsidiary Guarantors, and are secured by (i) a first priority lien on substantially all assets of the Company and the Subsidiary Guarantors (subject to certain exceptions) not constituting ABL Priority Collateral or L/C Cash Collateral, including 100% of the stock of material U.S. subsidiaries and 65% of the stock of material foreign subsidiaries (the “Term Loan Priority Collateral”) and (ii) a third priority lien on the ABL Priority Collateral and L/C Cash Collateral. The Term Loan Credit Agreement limits, among other things, the ability of the Company and its Restricted Subsidiaries (as defined in the Term Loan Credit Agreement) to (i) incur indebtedness, (ii) incur or create liens, (iii) dispose of assets, (iv) make restricted payments and (v) make investments, and also contains customary affirmative covenants including delivery of certain of the Company’s financial statements set forth therein. The Term Loan Credit Agreement does not include a financial maintenance covenant.

Board Rights Agreement

On February 26, 2021, in connection with the execution of the Term Loan Credit Agreement, the Company entered into a letter agreement with KLIM (the “Board Rights Agreement”). Pursuant to the Board Rights Agreement, the Company has agreed that the will appoint an individual designated by KLIM (who initially will be Darren L. Richman) as a member of the Board as soon as practicable after the date of the Board Rights Agreement and in any event on or prior to the next annual meeting of the Company’s shareholders, subject to customary conditions. Thereafter, KLIM will have the right to nominate one (1) director at each annual or special meeting of the Company’s shareholders until the third anniversary of the execution of the Board Rights Letter or until KLIM ceases to hold at least 50% of the original principal amount of the term loans and commitments under the Term Loan Credit Agreement, whichever is earlier.

 

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Until KLIM ceases to hold at least 50% of the original principal amount of the term loans and commitments under the Term Loan Credit Agreement, at any time that KLIM’s designated director is not serving on the Board, KLIM will have the right to designate a non-voting observer to the Board. Such observer will have the right to attend meetings of the Board and, under certain circumstances, committees and subcommittees of the Board and to receive information and materials made available to the Board, in each case, subject to certain restrictions and exceptions.

Securities Purchase Agreement

On February 26, 2021, the Company and the Term Loan Lenders (the “Buyers”), entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) pursuant to which the Company agreed to sell to the Buyers, and the Buyers agreed to purchase from the Company, (i) an aggregate of 1,000,000 shares of Common Stock for a purchase price of $10.00 in cash per share for an aggregate purchase price of $10,000,000, and (ii) $25,000,000 aggregate principal amount of the Company’s newly issued 5.0% unsecured convertible promissory notes due May 28, 2026 (the “Convertible Notes”) in a private placement transaction. The issuance and sale of the Common Stock and Convertible Notes contemplated by the Securities Purchase Agreement were consummated on February 26, 2021.

Convertible Notes

The Convertible Notes bear interest at a rate of 5.0% per annum, which will be payable in cash on the maturity date and in additional shares of Common Stock on any conversion date. The maturity date of the Convertible Notes will be May 28, 2026.

The Buyers will have the right to elect at any time to convert the Convertible Notes into shares of Common Stock at a conversion rate equal to 100 shares of Common Stock per each $1,000 principal amount of the Convertible Notes (based on a conversion price equal to $10.00 per share of Common Stock). The conversion rate and conversion price will be subject to certain customary anti-dilution adjustments.

If the closing price of the Common Stock equals or exceeds $14.50 (subject to adjustment in the same manner as the conversion price) for 45 trading days within any period of 60 consecutive trading days, the Company will have the right to cause the mandatory conversion of the Convertible Notes into shares of Common Stock so long as a resale registration statement sufficient to cover such shares of Common Stock has been filed by the Company with the U.S. Securities and Exchange Commission and is effective prior to any such conversion.

In the event of certain fundamental transactions, the Buyers will have the right, within a period of 30 days following the occurrence of such transaction (“Holder Fundamental Transaction Election Period”), to elect to (i) require the prepayment of the Convertible Notes at par, plus accrued and unpaid interest, or (ii) convert all or a portion of the Convertible Notes into shares of Common Stock at the conversion rate then in effect plus an additional number of shares based on the date of such fundamental transaction and the price per share of the Common Stock in connection with such fundamental transaction. In addition, upon certain fundamental exchange transactions, the right to convert the Convertible Notes into shares of Common Stock of the Company will be converted into the right to receive the shares of a successor entity, if any, or the Company,

 

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and any additional consideration receivable as a result of such fundamental exchange transaction. If the Convertible Notes have not been converted in connection with a fundamental transaction, the Company will have the option, for a period of 30 days after the expiration of the Holder Fundamental Transaction Election Period, to repay the Convertible Notes at par, plus accrued and unpaid interest.

Securities Registration Rights Agreement

On February 26, 2021, the Company and the Buyers entered into a Registration Rights Agreement (the “Securities Registration Rights Agreement”) providing the Buyers with registration rights in respect of the purchased shares of Common Stock and the Common Stock issuable upon conversion of the Convertible Notes. The Securities Registration Rights Agreement contains other customary terms and conditions, including certain customary indemnification obligations; however, the Securities Registration Rights Agreement does not obligate the Company to facilitate an underwritten offering of the registered Common Stock by the Buyers.

Incorporation by Reference

The foregoing descriptions of the Repurchase and Exchange Agreement, the Purchase Agreement, the Series C Registration Rights Agreement, the ABL Amendment, the L/C Facility Agreement, the Term Loan Credit Agreement, the Board Rights Agreement, the Securities Purchase Agreement, the Securities Registration Rights Agreement, the Convertible Notes, the Series B Certificate of Designations and the Series C Certificate of Designations (collectively, the “Described Documents”), do not purport to be complete and are subject to, and qualified in their entirety by, the full text of the documents which are attached hereto as exhibits and incorporated herein by reference.

The Described Documents are being filed to provide investors and security holders with information regarding their terms. They are not intended to provide any other factual information about the Company, its business, assets, liabilities, performance or prospects, or the other parties thereto, as applicable. The representations, warranties and covenants of each party set forth in the Described Documents were made only for purposes of the Described Documents as of the specific dates set forth therein, were solely for the benefit of the parties to the Described Documents, may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Described Documents instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. The Company’s investors and security holders are not third-party beneficiaries under the Described Documents and should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the Company, its business, assets, liabilities, performance or prospects, or the other parties thereto. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Described Documents, which subsequent information may or may not be fully reflected in the Company’s public disclosures.

 

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Item 2.03.

Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information contained in Item 1.01 of this Current Report on Form 8-K regarding the Repurchase and Exchange Agreement, the Purchase Agreement, the terms of the Series B Preferred Stock, the terms of the Series C Preferred Stock, the ABL Amendment, the Term Loan Credit Agreement, the Securities Purchase Agreement and the Convertible Notes is hereby incorporated into this Item 2.03 by reference.

 

Item 3.02.

Unregistered Sales of Equity Securities.

The information contained in Item 1.01 of this Current Report on Form 8-K regarding the Repurchase and Exchange Agreement, the Purchase Agreement and the Securities Purchase Agreement is hereby incorporated into this Item 3.02 by reference. The repurchase and exchange of the Series A Preferred Stock and the issuance of the Series B Preferred Stock pursuant to the Repurchase and Exchange Agreement, the offer and sale of the Series C Preferred Stock pursuant to the Purchase Agreement and the offer and sale of the Common Stock and the Convertible Notes pursuant to the Securities Purchase Agreement are exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(a)(2) of the Securities Act. Each of the Purchasers, the Investor and the Buyers has represented to the Company that it is an “accredited investor” as defined in Rule 501 under the Securities Act and that the Series B Preferred Stock, Series C Preferred Stock, Common Stock and Convertible Notes are being acquired for investment purposes and not with a view to or for sale in connection with any distribution thereof.

 

Item 3.03.

Material Modification to Rights of Security Holders.

The information contained in Item 1.01 of this Current Report on Form 8-K regarding the Series B Certificate of Designations, the Series C Certificate of Designations, the Series B Preferred Stock and the Series C Preferred Stock is hereby incorporated into this Item 3.03 by reference.

 

Item 5.03.

Amendment to Articles of Incorporation or Bylaws; Change in Fiscal Year.

The information contained in Item 1.01 of this Current Report on Form 8-K regarding the Series B Certificate of Designations and the Series C Certificate of Designations is hereby incorporated into this Item 5.03 by reference.

 

Item 7.01.

Regulation FD Disclosure.

The financing agreements and transactions described in Item 1.01 of this Current Report on Form 8-K (the “Financing Transactions”) address the mandatory redemption of the Series A Preferred Stock required in November 2021, extend the maturity date of the ABL Credit Agreement, implement a new letter of credit facility, and provide the Company with up to $310,000,000 of incremental cash, $50,000,000 of which remains committed and undrawn under the Term Loan Credit Agreement. The term loan, convertible note and preferred share components of the Financing Transactions leverage the complementary components of term debt and convertible debt and preferred equity to balance equity dilution and the cost of capital (the weighted average interest/dividend rate of the term loan, convertible note and preferred shares that were issued is approximately 8.9% if fully drawn), and are designed to limit the amount of cash needed to service the capital while the instruments remain outstanding (up to $17,250,000 per year, or approximately 39%, of the interest and dividends are payable in kind, based on fully drawn amounts), thereby increasing the amount of cash available for the Company during this period. If all of the convertible debt and preferred shares that were issued in the Financing Transactions is converted at the end of their respective terms (i.e., after all dividends and interest payable in-kind have accumulated but assuming the mandatory redemption date for the Series C Preferred Stock is not extended, and no adjustments are made to conversion price or ratios), approximately 25.75 million shares of Common Stock would be issued at an average conversion price of $10.185.

 

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The proceeds from the Financing Transactions not used to fund the repurchase of a portion of the Series A Preferred Stock, as described above, may be used for general corporate purposes, including strategic investments in growth opportunities in Kodak’s core businesses of print and advanced materials and chemicals and continued restructuring investments in Kodak’s existing operations designed to reduce costs and improve profitability. The Financing Transactions also provide the Company with additional liquidity that may be needed to continue to respond to the ongoing impact and uncertainties stemming from the COVID-19 pandemic and associated response efforts.

On March 1, 2021, the Company issued a press release relating to the items described in this Current Report on Form 8-K. A copy of the press release is furnished as Exhibit 99.1 hereto.

Cautionary Note Regarding Forward-Looking Statements

Certain information contained in this Current Report and the exhibits hereto may include “forward-looking statements” as that term is defined under the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning the Company’s plans, objectives, goals, strategies, future events, business trends and other information that is not historical information. When used in this Current Report and the exhibits hereto, the words “estimates,” “expects,” “anticipates,” “projects,” “plans,” “intends,” “believes,” “predicts,” “forecasts,” “strategy,” “continues,” “goals,” “targets” or future or conditional verbs, such as “will,” “should,” “could,” or “may,” and similar expressions, as well as statements that do not relate strictly to historical or current facts, are intended to identify forward-looking statements. All forward-looking statements are based upon the Company’s expectations and various assumptions. The forward looking statements contained in this Current Report and the exhibits hereto include, without limitation, statements related to the availability of the delayed draw term loans and the issuance and sale of an additional $25,000,000 of Series C Preferred Stock to the Investor subject to HSR Act clearance, as well as expansion, investment and growth opportunities. These and other forward-looking statements are based on management’s current views and assumptions and involve risks and uncertainties that could significantly affect expected results.

Future events or results may differ from those anticipated or expressed in the forward-looking statements. Important factors that could cause actual events or results to differ materially from the forward-looking statements include, among others, the risks and uncertainties described in more detail in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 under the headings “Business,” “Risk Factors,” “Legal Proceedings” and/or “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources,” in the corresponding sections of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, and in other filings the Company makes with the U.S. Securities and Exchange Commission from time to time. In addition, each of the issuance and sale of an additional $25,000,000 of Series C Preferred Stock to the Investor and the drawing of the delayed draw term loans is subject to certain conditions which may not be satisfied.

All forward-looking statements attributable to the Company or persons acting on its behalf apply only as of the date of this Current Report and are expressly qualified in their entirety by the cautionary statements included or referenced in this Current Report. The Company undertakes no obligation to update or revise forward-looking statements to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events, except as required by law.

 

-11-


Item 9.01

Financial Statements and Exhibits

 

(d)

Exhibits

 

(3.1)

Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of Eastman Kodak Company, effective as of February 25, 2021 (the Series B Certificate of Designations).

 

(3.2)

Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of Eastman Kodak Company, effective as of February 25, 2021 (the Series C Certificate of Designations).

 

(10.1)

Series A Preferred Stock Repurchase and Exchange Agreement, dated as of February 26, 2021, by and among Eastman Kodak Company, Southeastern Asset Management, Inc., Longleaf Partners Small-Cap Fund, C2W Partners Master Fund Limited and Deseret Mutual Pension Trust.

 

(10.2)

Series C Preferred Stock Purchase Agreement, dated as of February  26, 2021, by and among Eastman Kodak Company and GO EK Ventures IV, LLC.

 

(10.3)

Registration Rights Agreement, dated as of February  26, 2021, by and between Eastman Kodak Company and GO EK Ventures IV, LLC.

 

(10.4)

Amendment No.  4 to Amended and Restated Credit Agreement, dated as of February 26, 2021, by and among Eastman Kodak Company, the Lenders named therein, the Guarantors named therein and Bank of America, N.A., as agent.

 

(10.5)

Letter of Credit Facility Agreement, dated as of February  26, 2021, by and among Eastman Kodak Company, the Lenders named therein, the Guarantors named therein, Bank of America, N.A., as administrative agent and collateral agent and Bank of America, N.A., as issuing bank.

 

(10.6)

Credit Agreement, dated as of February  26, 2021, by and among Eastman Kodak Company, the Lenders named therein and Alter Domus (US) LLC, as Administrative Agent.

 

(10.7)

Board Rights Agreement, dated as of February  26, 2021, by and between Eastman Kodak Company and Kennedy Lewis Investment Management LLC.

 

(10.8)

Securities Purchase Agreement, dated as of February  26, 2021, by and among Eastman Kodak Company, Kennedy Lewis Capital Partners Master Fund LP and Kennedy Lewis Capital Partners Master Fund II LP.

 

(10.9)

Convertible Promissory Note, dated as of February  26, 2021, from Eastman Kodak Company to Kennedy Lewis Capital Partners Master Fund LP.

 

(10.10)

Convertible Promissory Note, dated as of February  26, 2021, from Eastman Kodak Company to Kennedy Lewis Capital Partners Master Fund II LP.

 

-12-


(10.11)

Registration Rights Agreement, dated as of February  26, 2021, by and among Eastman Kodak Company, Kennedy Lewis Capital Partners Master Fund LP and Kennedy Lewis Capital Partners Master Fund II LP.

 

(99.1)

Press release, dated March 1, 2021, of Eastman Kodak Company.

 

-13-


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    EASTMAN KODAK COMPANY
Date: March 1, 2021     By:  

/s/ David E. Bullwinkle

    Name: David E. Bullwinkle
   

Title: Chief Financial Officer and Senior

Vice President

 

-14-

Exhibit 3.1

CERTIFICATE OF AMENDMENT TO THE

SECOND AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF

EASTMAN KODAK COMPANY

(Pursuant to Section 14A:7-2(2) and (4) of the

New Jersey Business Corporation Act)


Pursuant to the provisions of N.J.S.A. 14A:7-2(2) and (4), the undersigned corporation executes the following Certificate of Amendment to its Second Amended and Restated Certificate of Incorporation:

1. The name of the corporation is Eastman Kodak Company, a corporation organized and existing under the laws of the State of New Jersey (hereinafter called the “Company”).

2. The following amendment to the Second Amended and Restated Certificate of Incorporation (the “Certificate”), was approved by the Company’s Board of Directors (the “Board”) as required by Section 14A:7-2 of the New Jersey Business Corporation Act at a meeting duly called, convened and held on February 25, 2021.

3. Pursuant to the Repurchase and Exchange Agreement, to be dated as of February 26, 2021 (the “Repurchase and Exchange Agreement”), by and among the Company and the holders of the Company’s 5.50% Series A Convertible Preferred Stock (the “Series A Preferred Stock”), the Company and the holders party thereto have agreed that (i) the Company shall repurchase 1,000,000 shares of the Company’s 5.50% Series A Convertible Preferred Stock (the “Series A Preferred Stock”) from the holders thereof and (ii) such holders shall transfer and deliver the remaining 1,000,000 shares of Series A Preferred Stock to the Company in exchange for shares of 4.0% Series B Convertible Preferred Stock to be issued by the Company in accordance with the terms set forth herein, in each case on the terms and subject to the conditions set forth in the Repurchase and Exchange Agreement.

4. Following the consummation of the transactions contemplated by the Repurchase and Exchange Agreement, all shares of Series A Preferred Stock shall be held by the Company and automatically cancelled.

5. The Board, in accordance with the Certificate, and Fourth Amended and Restated By-laws of the Company, as amended (the “By-laws”), and applicable law, at said meeting duly called, convened and held on February 25, 2021, duly adopted the following resolution authorizing the issuance and sale by the Company of up to $100 million in aggregate liquidation preference of shares of the Company’s preferred stock, no par value per share (“Preferred Stock”), and created a series of 4.0% Series B Convertible Preferred Stock of the Company designated as “4.0% Series B Convertible Preferred Stock” on the terms set forth herein, and amended the Certificate to add the following terms to the end of Article III of the Certificate:

NOW, THEREFORE, BE IT RESOLVED, that in accordance with N.J.S.A. 14A:7-2(4) and Article III of the Certificate, the Board hereby establishes the terms of the 4.0% Series B Convertible Preferred Stock, no par value per share, and fixes and determines the authorized number of shares of the series, the dividend rate of shares of the series, the designations, and certain other powers, preferences, and relative, participating, optional or other rights, and the qualifications, limitations and restrictions thereof, with the Certificate hereby amended to add such terms to the end of Article III of the Certificate as follows:

 

2


III.A. 4.0% Series B Convertible Preferred Stock:

Section 1. Designation and Amount. There is hereby created out of the authorized and unissued shares of preferred stock of the Company a series of preferred stock designated as “4.0% Series B Convertible Preferred Stock” (the “Series B Preferred Stock”) and the number of shares constituting the Series B Preferred Stock shall be 1,000,000.

Section 2. Dividends and Distributions.

(A) Holders of shares of Series B Preferred Stock shall be entitled to receive, on each share of Series B Preferred Stock and with respect to each Dividend Period, cash dividends in an amount equal to the Dividend Rate multiplied by the Liquidation Preference per share of Series B Preferred Stock. Dividends on the Series B Preferred Stock shall cumulate quarterly on each Dividend Payment Date at the Dividend Rate, and shall accumulate from the most recent date as to which dividends shall have been paid or, if no dividends have been paid, from the Original Issue Date, whether or not in any Dividend Period(s) there have been funds legally available for the payment of such dividends. Dividends shall be payable to holders of record as they appear on the Company’s stock register on the immediately preceding Dividend Record Date (if such dividend has been declared). Accumulations of dividends on shares of Series B Preferred Stock do not bear interest. Dividends payable on the Series B Preferred Stock for any period other than a full Dividend Period shall be computed on the basis of a 360-day year consisting of twelve 30-day months and, for partial months, on the basis of the number of days actually elapsed in a 30-day month.

(B) The Company shall make each dividend payment on the Series B Preferred Stock in cash, with such cash dividends being paid only to the extent (i) the Company has funds legally available for payment and (ii) the Board, or an authorized committee thereof, declares such dividend payable.

(C) No dividend shall be declared or paid upon, or any sum set apart for the payment of dividends upon, any outstanding share of Series B Preferred Stock with respect to any Dividend Period unless all dividends for all preceding Dividend Periods have been declared and paid, or declared and a sufficient sum has been set apart for the payment of such dividend, upon all outstanding shares of Series B Preferred Stock.

(D) While any shares of Series B Stock remain outstanding, unless all accumulated and unpaid dividends on the Series B Preferred Stock for all past Dividend Periods shall have been paid in full, or a sum for such accumulated and unpaid dividends has been set apart for the payment of dividends upon the Series B Preferred Stock, the Company shall not:

(i) declare or pay any dividend or make any distribution of assets on any Junior Stock; or

(ii) redeem, purchase or otherwise acquire any shares of Junior Stock or pay or make any monies available for a sinking fund for such shares of Junior Stock, other than (1) upon conversion or exchange for other Junior Stock or (2) the purchase of fractional interests in shares of any Junior Stock pursuant to the conversion or exchange provisions of such shares of Junior Stock;

 

3


provided, however, that the foregoing limitations shall not apply to (x) redemptions, purchases or other acquisitions of shares of Junior Stock in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of any one or more employees, officers, directors, managers or consultants of, or to, the Company or any of its subsidiaries; (y) an exchange, redemption, reclassification or conversion of any class or series of Junior Stock for any class or series of Junior Stock that ranks equal or junior to the applicable Junior Stock; or (z) any dividend in the form of stock, warrants, options or other rights where the dividended stock or the stock issuable upon exercise of such warrants, options or other rights is the same stock as that on which the dividend is being paid or ranks equal or junior to the applicable Junior Stock.

(E) Holders of shares of Series B Preferred Stock at the close of business on a Dividend Record Date will be entitled to receive the dividend payment on such shares on the corresponding Dividend Payment Date (if such dividend has been declared) notwithstanding the conversion of such shares following such Dividend Record Date or the Company’s default in payment of the dividend due on such Dividend Payment Date. Holders of shares of Series B Preferred Stock will not be entitled to any dividend in excess of full cumulative dividends.

Section 3. Rank.

The Series B Preferred Stock will rank (i) senior, as to payment of dividends and distributions of assets upon the liquidation, dissolution or winding up of the Company, to the Company’s Common Stock, (ii) either senior to or pari passu with all other preferred stock, (iii) pari passu with the Company’s Series C Preferred Stock and (iv) junior to all shares of capital stock of the Company issued in the future, the terms of which expressly provide that such shares will rank senior to the Series B Preferred Stock.

Section 4. Mandatory Redemption. Subject to the New Jersey Business Corporation Act, unless no shares of the Series B Preferred Stock are outstanding, on the date that is ninety-one (91) days following the fifth (5th) anniversary of the Original Issue Date, the Company shall redeem all shares of Series B Preferred Stock at a redemption price equal to the Liquidation Preference plus accrued and unpaid dividends to, but excluding the redemption date (the “Mandatory Redemption Price”).

Section 5. Conversion.

(A) Each Holder of Series B Preferred Stock shall have the right at any time, at its option, to convert, subject to the terms and provisions of this Section 5, any or all of such Holder’s shares of Series B Preferred Stock at an initial conversion rate of 9.5238 shares of fully paid and non-assessable shares of Common Stock (subject to adjustment as provided in this Section 5, the “Conversion Rate”) per share of Series B Preferred Stock. Upon conversion of any share of Series B Preferred Stock, the Company shall deliver to the converting Holder, in respect of each share of Series B Preferred Stock being converted, a number of shares of Common Stock equal to the Conversion Rate, together with a cash payment in lieu of any fractional share of Common Stock in accordance with Section 13 and any dividend pursuant to Section 2(E), as soon as practicable and in any event on or before the third Trading Day immediately following the relevant Conversion Date.

 

4


(B) Before any Holder shall be entitled to convert a share of Series B Preferred Stock as set forth above, such Holder shall (i) in the case of a beneficial interest in a Global Preferred Stock, comply with the procedures of the Depository in effect at that time and (ii) in the case of Certificated Preferred Stock (1) complete, manually sign and deliver an irrevocable notice to the office of the Transfer Agent as set forth in the Form of Notice of Conversion (or a facsimile thereof) substantially in the form of Exhibit B hereto (a “Notice of Conversion”) and state in writing therein the number of shares of Series B Preferred Stock to be converted and the name or names (with addresses) in which such Holder wishes the certificate or certificates for any shares of Common Stock to be delivered to be registered, (2) surrender such shares of Series B Preferred Stock, at the office of the Transfer Agent and (3) if required, furnish appropriate endorsements and transfer documents. The Transfer Agent shall notify the Company of any conversion pursuant to this Section 5 on the Conversion Date for such conversion. The date on which a Holder complies with the procedures in this clause (B) is the “Conversion Date.” If more than one share of Series B Preferred Stock shall be surrendered for conversion at one time by the same Holder, the number of shares of Common Stock to be delivered upon conversion of such shares of Series B Preferred Stock shall be computed on the basis of the aggregate number of shares of Series B Preferred Stock so surrendered.

(C) Immediately prior to the close of business on the Conversion Date with respect to a conversion, a converting Holder of Series B Preferred Stock shall be deemed to be the holder of record of the Common Stock issuable upon conversion of such Holder’s Series B Preferred Stock notwithstanding that the share register of the Company shall then be closed or that certificates representing such Common Stock shall not then be actually delivered to such Holder. On the date of any conversion, all rights with respect to the shares of Series B Preferred Stock so converted, including the rights, if any, to receive notices, will terminate, excepting only the rights of holders thereof to (i) receive certificates for the number of whole shares of Common Stock into which such shares of Series B Preferred Stock have been converted (with a cash payment in lieu of any fractional share of Common Stock in accordance with Section 13); (ii) exercise the rights to which they are thereafter entitled as holders of the Common Stock; and (iii) receive any dividend payable notwithstanding the conversion.

(D) The Conversion Rate shall be adjusted, without duplication, upon the occurrence of any of the following events:

(i) If the Company exclusively issues shares of Common Stock as a dividend or distribution on all shares of its Common Stock, or if the Company effects a share split or share combination, the Conversion Rate shall be adjusted based on the following formula:

 

LOGO

where,

 

5


CR0 = the Conversion Rate in effect immediately prior to the close of business on the Record Date for such dividend or distribution, or immediately prior to the open of business on the Effective Date of such share split or share combination, as the case may be;

CR1 = the Conversion Rate in effect immediately after the close of business on the Record Date for such dividend or distribution, or immediately after the open of business on the Effective Date of such share split or share combination, as the case may be;

OS0 = the number of shares of Common Stock outstanding immediately prior to the close of business on the Record Date for such dividend or distribution, or immediately prior to the open of business on the Effective Date of such share split or share combination, as the case may be; and

OS1 = the number of shares of Common Stock outstanding immediately after giving effect to such dividend or distribution, or such share split or share combination, as the case may be.

Any adjustment made under this Section 5(D)(i) shall become effective immediately after the close of business on the Record Date for such dividend or distribution, or immediately after the open of business on the Effective Date for such share split or share combination, as the case may be. If any dividend or distribution of the type described in this Section 5(D)(i) is declared but not so paid or made, the Conversion Rate shall be immediately readjusted, effective as of the date the Board determines not to pay such dividend or distribution, to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.

(ii) If the Company distributes to all or substantially all holders of its Common Stock any rights, options or warrants entitling them, for a period expiring not more than 45 days immediately following the announcement date of such distribution, to purchase or subscribe for shares of its Common Stock at a price per share that is less than the average of the Closing Sale Prices of the Common Stock over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Ex-Date of such distribution, the Conversion Rate shall be increased based on the following formula:

 

LOGO

where,

CR0 = the Conversion Rate in effect immediately prior to the close of business on the Record Date for such distribution;

CR1 = the Conversion Rate in effect immediately after the close of business on the Record Date for such distribution;

 

6


OS0 = the number of shares of Common Stock outstanding immediately prior to the close of business on the Record Date for such distribution;

X = the total number of shares of Common Stock issuable pursuant to such rights, options or warrants; and

Y = the number of shares of Common Stock equal to the aggregate price payable to exercise such rights, options or warrants, divided by the average of the Closing Sale Prices of the Common Stock over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Ex-Date of such distribution.

Any increase made under this Section 5(D)(ii) shall be made successively whenever any such rights, options or warrants are distributed and shall become effective immediately after the close of business on the Record Date for such distribution. To the extent that shares of Common Stock are not delivered after the expiration of such rights, options or warrants, the Conversion Rate shall be readjusted, effective as of the date of such expiration, to the Conversion Rate that would then be in effect had the increase with respect to the distribution of such rights, options or warrants been made on the basis of delivery of only the number of shares of Common Stock actually delivered. If such rights, options or warrants are not so distributed, the Conversion Rate shall be decreased, effective as of the date the Board determines not to make such distribution, to be the Conversion Rate that would then be in effect if such Record Date for such distribution had not occurred. If such rights, options or warrants are only exercisable upon the occurrence of certain triggering events, then the Conversion Rate shall not be adjusted until the triggering events occur.

For purposes of this Section 5(D)(ii), in determining whether any rights, options or warrants entitle the holders to subscribe for or purchase shares of Common Stock at less than such average of the Closing Sale Prices of the Common Stock for the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Ex-Date of such distribution, and in determining the aggregate offering price of such shares of Common Stock, there shall be taken into account any consideration received by the Company for such rights, options or warrants and any amount payable on exercise or conversion thereof, the value of such consideration, if other than cash, to be determined by the Board.

(iii) If the Company makes distributions to all or substantially all holders of its Common Stock consisting of shares of its Capital Stock, evidence of indebtedness or other assets or properties, excluding:

(1) dividends or other distributions (including share splits), rights, options or warrants as to which an adjustment is effected in clause (i) or (ii) above or in clause (vi) below:

(2) dividends or other distributions covered by clause (iv) below:

 

7


(3) dividends or other distributions that constitute Exchange Property following a Reorganization Event:

(4) Spin-offs to which the provisions set forth below in this Section 5(D)(iii) shall apply,

the Conversion Rate shall be increased based on the following the formula:

 

CR1 = CR0 ×

 

    M    

 
  M – F    

where:

CR0 = the Conversion Rate in effect immediately prior to the close of business on the Record Date for such distribution;

CR1 = the Conversion Rate in effect immediately after the close of business on the Record Date for such distribution;

M = the average of the Closing Sale Prices of the Common Stock for the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Ex-Date for such distribution; and

F = the fair market value, as determined by the Board, of the portion of those assets, securities, rights, warrants or options to be distributed in respect of each share of Common Stock immediately prior to the open of business on the Ex-Date for such distribution.

Any increase pursuant to this Section 5(D)(iii) shall become effective immediately after the close of business on the Record Date for such distribution. If such distribution is not so paid or made, the Conversion Rate shall be decreased, effective as of the date the Board determines not to pay or make such distribution, to be the Conversion Rate that would then be in effect if such distribution had not been declared.

Notwithstanding the foregoing, if “F” (as defined above) is equal to or greater than “M” (as defined above), in lieu of the foregoing increase, each Holder of Preferred Stock shall receive, for each share of Series B Preferred Stock, at the same time and upon the same terms as holders of the Common Stock, the amount of cash that such Holder would have received as if such Holder owned a number of shares of Common Stock equal to the Conversion Rate on the Record Date for such distribution.

With respect to an adjustment pursuant to this Section 5(D)(iii) where there has been a payment of a dividend or other distribution of the Common Stock in shares of capital stock of any class or series, or similar equity interest, of or relating to a subsidiary or other business unit, where such capital stock or similar equity interest is listed or quoted (or will be listed or quoted upon consummation of the spin-off) on a U.S. national securities exchange, which is referred to herein as a “Spin-off,” the Conversion Rate will be increased based on the following formula:

 

8


CR1 = CR0 ×

 

F + MP

 
  MP    

where:

CR1 = the Conversion Rate in effect immediately after the open of business on the effective date for the Spin-off;

CR0 = the Conversion Rate in effect immediately prior to the open of business on the effective date for the Spin-off;

F = the average of the Closing Sale Prices of the capital stock or similar equity interest distributed to holders of Common Stock applicable to one share of Common Stock over the first 10 consecutive Trading Day period immediately following, and including, the effective date for the Spin-off (such period, the “Valuation Period”); and

MP = the average of the Closing Sale Prices of the Common Stock over the Valuation Period.

The adjustment to the Conversion Rate under the preceding paragraph of this Section 5(D)(iii) will become effective immediately after the open of business on the day after the last day of the Valuation Period. For purposes of determining the Conversion Rate in respect of any conversion during the 10 Trading Days commencing on the effective date for any Spin-off, references within the portion of this Section 5(D)(iii) related to Spin-offs to 10 consecutive Trading Days shall be deemed replaced with such lesser number of Trading Days as have elapsed from, and including, the effective date for such Spin-off to, but excluding, the relevant Conversion Date.

(iv) If the Company makes any cash dividend or distribution to all or substantially all holders of its Common Stock, the Conversion Rate will be increased based on the following formula:

 

CR1 = CR0 ×

 

    SP0    

 
  SP0 - C    

where,

CR0 = the applicable Conversion Rate in effect immediately prior to the close of business on the Record Date for such dividend or other distribution;

CR1 = the applicable Conversion Rate in effect immediately after the close of business on the Record Date for such dividend or other distribution;

SP0 = the average of the Closing Sale Prices of the Company’s Common Stock over the 10 consecutive Trading-Day period ending on, and including, the Trading Day immediately preceding the Ex-Date for such dividend or other distribution; and

 

9


C = the amount in cash per share the Company pays or distributes to holders of its Common Stock.

An adjustment on the Conversion Rate made pursuant to Section 5(D)(iv) shall become effective immediately after the close of business on the Record Date for the applicable dividend or other distribution. If any dividend or other distribution described in this Section 5(D)(iv) is declared but not so paid or made, the new Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect if such dividend or other distribution had not been declared.

If “C” as set forth above is equal to or greater than “SP0” as set forth above, in lieu of the foregoing adjustment, each holder of Series B Preferred Stock shall receive, at the same time and upon the same terms as holders of the Company’s Common Stock, the amount of cash that such holder would have received if such holder owned a number of shares of the Company’s Common Stock equal to the applicable Conversion Rate in effect immediately prior to the close of business on the Record Date for such cash dividend or other distribution.

(v) If the Company or any of its subsidiaries makes a payment in respect of a tender offer or exchange offer for the Common Stock and the cash and value of any other consideration included in the payment per share of the Common Stock exceeds the average of the Closing Sale Price of the Common Stock over the 10 consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer, the Conversion Rate shall be increased based on the following formula:

 

LOGO

where,

CR0 = the Conversion Rate in effect immediately prior to the close of business on the last Trading Day of the 10 consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the date such tender or exchange offer expires;

CR1 = the Conversion Rate in effect immediately after the close of business on the last Trading Day of the 10 consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the date such tender or exchange offer expires;

AC = the aggregate value of all cash and any other consideration (as determined by the Board) paid or payable for shares of Common Stock purchased in such tender or exchange offer;

OS0 = the number of shares of Common Stock outstanding immediately prior to the date such tender or exchange offer expires (prior to giving effect to the purchase of all shares of Common Stock accepted for purchase or exchange in such tender or exchange offer);

 

10


OS1 = the number of shares of Common Stock outstanding immediately after the date such tender or exchange offer expires (after giving effect to the purchase of all shares of Common Stock accepted for purchase or exchange in such tender or exchange offer); and

SP1 = the average of the Closing Sale Prices of the Common Stock over the 10 consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the date such tender or exchange offer expires.

The increase to the Conversion Rate under this Section 5(D)(v) shall occur at the close of business on the 10th Trading Day immediately following, and including, the Trading Day next succeeding the date such tender or exchange offer expires; provided that, for purposes of determining the Conversion Rate, in respect of any conversion during the 10 Trading Days immediately following, and including, the Trading Day next succeeding the date that any such tender or exchange offer expires, references within this Section 5(D)(v) to 10 consecutive Trading Days shall be deemed to be replaced with such lesser number of consecutive Trading Days as have elapsed between the date such tender or exchange offer expires and the relevant Conversion Date.

In the event that the Company or one of its subsidiaries is obligated to purchase shares of Common Stock pursuant to any such tender offer or exchange offer, but the Company or such subsidiary is permanently prevented by applicable law from effecting any such purchases, or all such purchases are rescinded, then the Conversion Rate shall be readjusted to be such Conversion Rate that would then be in effect if such tender offer or exchange offer had not been made. For the avoidance of doubt, this Section 5(D)(v) shall not apply if the Company otherwise acquires shares of Common Stock, including, but not limited to, through an open market purchase in compliance with Rule 10b-18 promulgated under the Exchange Act or through an “accelerated share repurchase” on customary terms.

(vi) All calculations and other determinations under this Section 5(D) shall be made by the Company and shall be made to the nearest one-ten thousandth (1/10,000th) of a share. No adjustment to the Conversion Rate shall be made if it results in a Conversion Price that is less than the par value (if any) of the Common Stock. The Company shall not take any action that would result in the Conversion Price being less than the par value (if any) of the Common Stock pursuant to this Certificate of Amendment and without giving effect to the previous sentence.

(vii) In addition to those adjustments required by clauses (i), (ii), (iii), (iv) and (v) of this Section 5(D), and to the extent permitted by applicable law and subject to the applicable rules of the New York Stock Exchange, the Company from time to time may (but is not required to) increase the Conversion Rate by any amount for a period of at least 20 Business Days or any longer period permitted or required by law if the increase is irrevocable during that period and the Board determines that such increase would be in

 

11


the Company’s best interest. In addition, the Company may (but is not required to) increase the Conversion Rate to avoid or diminish any income tax to holders of the Common Stock or rights to purchase Common Stock in connection with a dividend or distribution of shares (or rights to acquire shares) or similar event. Whenever the Conversion Rate is increased pursuant to any of the preceding two sentences, the Company shall mail to the Holder of each share of Series B Preferred Stock at its last address appearing on the stock register of the Company a notice of the increase at least 15 days prior to the date the increased Conversion Rate takes effect, and such notice shall state the increased Conversion Rate and the period during which it will be in effect.

(E) If any applicable law requires the deduction or withholding of any tax from any payment or deemed dividend to a Holder on its Series B Preferred Stock or Common Stock, the Company or an applicable withholding agent may withhold on cash dividends, shares of Series B Preferred Stock or Common Stock or sale proceeds paid, subsequently paid or credited with respect to such Holder or such Holder’s successors and assigns.

(F) The Company shall at all times reserve and keep available for issuance upon the conversion of the Series B Preferred Stock a number of its authorized but unissued shares of Common Stock equal to the aggregate Liquidation Preference divided by $8.75 (subject to adjustment in the same manner as the Conversion Rate as provided in this Section 5), and shall take all action required to increase the authorized number of shares of Common Stock if at any time there shall be insufficient unissued shares of Common Stock to permit such reservation or to permit the conversion of all outstanding shares of Series B Preferred Stock (including any Additional Shares in connection with a Fundamental Change).

(G) The issuance or delivery of certificates for Common Stock upon the conversion of shares of Series B Preferred Stock shall be made without charge to the converting holder or recipient of shares of Series B Preferred Stock for such certificates or for any documentary, stamp or similar issue or transfer tax in respect of the issuance or delivery of such certificates or the securities represented thereby, and such certificates shall be issued or delivered in the respective names of, or in such names as may be directed by, the holders of the shares of Series B Preferred Stock converted; provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of any such certificate in a name other than that of the holder of the shares of the relevant Series B Preferred Stock and the Company shall not be required to issue or deliver such certificate unless or until the Person or Persons requesting the issuance or delivery thereof shall have paid to the Company the amount of such tax or shall have established to the reasonable satisfaction of the Company that such tax has been paid.

(H) Notwithstanding Section 5(D)(ii), if the Company has a rights plan (including the distribution of rights pursuant thereto to all holders of the Common Stock) in effect while any shares of Series B Preferred Stock remain outstanding, Holders of Series B Preferred Stock will receive, upon conversion of Series B Preferred Stock, in addition to the Common Stock to which such Holder is entitled, a corresponding number of rights in accordance with the rights plan. If, prior to any conversion, such rights have separated from the shares of Common Stock in accordance with the provisions of the applicable rights plan so that Holders of Series B Preferred Stock would not be entitled to receive any rights in respect of the Common

 

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Stock delivered upon conversion of Series B Preferred Stock, the Conversion Rate will be adjusted at the time of separation as if the Company had distributed to all holders of its Common Stock, shares of Capital Stock covered by the separated rights, subject to readjustment in the event of the expiration, termination or redemption of such rights.

Section 6. Mandatory Conversion.

(A) The Company shall have the right, at its option, to give notice of its election to cause all outstanding shares of Series B Preferred Stock to be automatically converted into that number of whole shares of Common Stock for each share of Series B Preferred Stock equal to the Conversion Rate in effect on the Mandatory Conversion Date, with cash in lieu of any fractional share pursuant to Section 13. The Company may exercise its right to cause a mandatory conversion pursuant to this Section 6 only if the Closing Sale Price of the Common Stock equals or exceeds $14.50 (subject to adjustment in the same manner as the Conversion Price) for at least 45 Trading Days (whether or not consecutive) in a period of 60 consecutive Trading Days, including the last Trading Day of such 60-day period, ending on, and including, the Trading Day immediately preceding the Business Day on which the Company issues a press release announcing the mandatory conversion as described in Section 6(B).

(B) To exercise the mandatory conversion right described in Section 6(A), the Company shall publish such information on the Company’s website or through such other public medium as the Company may use at that time, prior to the open of business on the first Trading Day following any date on which the Company makes a conversion election pursuant to Section 6(A), announcing such a mandatory conversion. The Company shall also give notice by mail to the Holders of the Series B Preferred Stock (not later than three Business Days after the date of the press release) of the mandatory conversion announcing the Company’s intention to convert the Series B Preferred Stock. The conversion date will be a date selected by the Company (the “Mandatory Conversion Date”) and will be no later than 30 calendar days after the date on which the Company issues the press release described in this Section 6(B).

(C) In addition to any information required by applicable law or regulation, the press release and notice of a mandatory conversion described in Section 6(B) shall state, as appropriate: (i) the Mandatory Conversion Date; (ii) the number of shares of Common Stock to be issued upon conversion of each share of Series B Preferred Stock; and (iii) that dividends on the Series B Preferred Stock to be converted will cease to accrue on the Mandatory Conversion Date.

(D) On and after the Mandatory Conversion Date, dividends shall cease to accrue on the Series B Preferred Stock called for a mandatory conversion pursuant to this Section 6 and all rights of Holders of such Series B Preferred Stock shall terminate except for the right to receive the whole shares of Common Stock issuable upon conversion thereof with a cash payment in lieu of any fractional share of Common Stock in accordance with Section 13 and a partial payment of any accrued and unpaid dividend. The full amount of any dividend payment with respect to the Series B Preferred Stock called for a mandatory conversion pursuant to this Section 6 on a date during the period beginning at the close of business on any Dividend Record Date and ending on the close of business on the corresponding Dividend Payment Date shall be payable on such Dividend Payment Date to the record holder of such share at the close of

 

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business on such Dividend Record Date if such share has been converted after such Dividend Record Date and prior to such Dividend Payment Date. Except as provided above with respect to a mandatory conversion pursuant to this Section 6, no payment or adjustment shall be made upon conversion of Series B Preferred Stock for accumulated dividends or dividends with respect to the Common Stock issued upon such conversion thereof.

(E) The Company may not authorize, issue a press release or give notice of any mandatory conversion pursuant to this Section 6 unless, prior to giving the conversion notice, all accumulated dividends on the Series B Preferred Stock (whether or not declared) for periods ended prior to the date of such conversion notice shall have been paid.

Section 7. Conversion upon a Fundamental Change.

(A) Upon any conversion during the period (the “Fundamental Change Conversion Period”) beginning on a Fundamental Change Effective Date and ending on the date that is 30 days after such Fundamental Change Effective Date (the “Expiration Date”), each holder of Series B Preferred Stock shall receive, for each share of Series B Preferred Stock converted, either (i) a number of shares of the Company’s Common Stock equal to the then-applicable Conversion Rate, plus a number of Additional Shares, if any, or (ii) a number of shares of Common Stock equal to the Conversion Rate which will be increased to equal the sum of the Liquidation Preference plus all accumulated and unpaid dividends to, but excluding, the settlement date for such conversion divided by the Market Value of the Common Stock. Notwithstanding the foregoing, the Conversion Rate as adjusted as described in clause (A)(ii) will not exceed 17.1428 shares of Common Stock per share of Series B Preferred Stock (subject to adjustment in the same manner as the Conversion Rate as provided in Section 5).

(B) In addition to the number of shares of the Company’s Common Stock issuable upon conversion of each share of Series B Preferred Stock on any Conversion Date during the Fundamental Change Conversion Period, each converting holder shall have the right to receive an amount equal to all accrued, accumulated and unpaid dividends on such converted shares of Series B Preferred Stock, whether or not declared prior to that date, for all prior Dividend Periods ending on or prior to the Dividend Payment Date immediately preceding the Conversion Date (other than previously declared dividends on the Series B Preferred Stock payable to holders of record as of a prior date), provided that the Company is then legally permitted to pay such dividends. The amount payable in respect of such dividends shall be paid in cash.

(C) The Company must give notice (a “Fundamental Change Notice”) of each Fundamental Change to all record holders of the Series B Preferred Stock by the later of 20 days prior to the anticipated Fundamental Change Effective Date (determined in good faith by the Board) and the first public disclosure by the Company of the anticipated Fundamental Change, if practicable, and otherwise by the earliest practicable date, of the anticipated Fundamental Change Effective Date. The Fundamental Change Notice shall be given by first-class mail to each record holder of shares of Series B Preferred Stock, at such holder’s address as the same appears on the books of the Company or the Transfer Agent. Each such Fundamental Change Notice shall state (i) the anticipated Fundamental Change Effective Date; (ii) the Expiration Date based on the anticipated Fundamental Change Effective Date; (iii) the name and address of the Transfer Agent; (iv) whether accumulated and unpaid dividends will be paid in cash, shares of the Company’s Common Stock or a combination thereof; and (v) the procedures that holders must follow to convert their shares of Series B Preferred Stock pursuant to this Section 7.

 

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(D) On or before the Expiration Date, each holder of shares of Series B Preferred Stock wishing to exercise its conversion right pursuant to this Section 7 shall comply with the procedures set forth in Section 5(B), and on such date the shares of the Company’s Common Stock and the payment for unpaid dividends due to such holder (if applicable) shall be delivered to the Person whose name appears on the surrendered certificate or certificates as the owner thereof. Notwithstanding anything herein to the contrary, Holders of the Series B Preferred Stock may make an election to convert the Series B Preferred Stock contingent on the consummation of the Fundamental Change.

Section 8. Make-Whole Premium for Conversion upon a Fundamental Change.

(A) For Holders who elect to convert shares of Series B Preferred Stock pursuant to Section 7(A)(i) during the Fundamental Change Conversion Period, the additional number of shares of the Company’s Common Stock issuable for each share of Series B Preferred Stock so converted (the “Additional Shares” or the “Make-Whole Premium”), if any, is set forth below in this Section 8.

(B) The number of Additional Shares shall be determined by reference to the table below, based on the Fundamental Change Effective Date and the Fundamental Change Stock Price.

Fundamental Change Stock Price

 

Fundamental
    Change
                                  

Effective Date

   $ 8.75      $ 9.75      $ 10.50      $ 12.50      $ 14.50  

February 26, 2021

     1.9048        1.4534        1.1788        0.6294        0.0000  

February 26, 2022

     1.9048        1.4534        1.1788        0.6294        0.0000  

February 26, 2023

     1.9048        1.4534        1.1788        0.6294        0.0000  

February 26, 2024

     1.9048        1.4534        1.1788        0.6294        0.0000  

February 26, 2025

     1.9048        1.4534        1.1788        0.6294        0.0000  

February 26, 2026

     1.9048        0.7326        0.0000        0.0000        0.0000  

(C) The Fundamental Change Stock Prices set forth in the first row of the foregoing table shall be adjusted as of any date on which the Conversion Rate is adjusted. The adjusted Fundamental Change Stock Prices shall equal the Fundamental Change Stock Prices applicable immediately prior to such adjustment multiplied by a fraction, the numerator of which is the Conversion Rate immediately prior to the adjustment giving rise to the Fundamental Change Stock Price adjustment and the denominator of which is the Conversion Rate as so adjusted.

(D) The exact Fundamental Change Stock Price and Fundamental Change Effective Dates may not be set forth on the table, in which case:

(i) if the Fundamental Change Stock Price is between two Fundamental Change Stock Price amounts on the table or the Fundamental Change Effective Date is between two Fundamental Change Effective Dates on the table, the Make-Whole Premium shall be determined by straight-line interpolation between the Make-Whole Premium amounts set forth for the higher and lower Fundamental Change Stock Price amounts and the two dates, as applicable, based on a 365-day year;

 

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(ii) if the Fundamental Change Stock Price is in excess of $14.50 per share (subject to adjustment as described above), then no Additional Shares shall be added to the Conversion Rate; and

(iii) if the Fundamental Change Stock Price is less than $8.75 per share (subject to adjustment as described above), then 1.9048 Additional Shares shall be added to the Conversion Rate.

(E) The Company shall only be required to deliver the Make-Whole Premium with respect to shares of Series B Preferred Stock surrendered for conversion during any Fundamental Change Conversion Period.

Section 9. Reorganization Events.

(A) In the event of:

(i) any recapitalization, reclassification or change of the Common Stock (other than changes resulting from a subdivision or combination);

(ii) any consolidation, merger or combination involving the Company;

(iii) any sale, lease or other transfer to a third party of the consolidated assets of the Company and the Company’s subsidiaries substantially as an entirety; or

(iv) any statutory share exchange,

in each case, as a result of which the Common Stock is converted into, or exchanged for, stock, other securities, other property or assets (including cash or any combination thereof), each of which is herein referred to as a “Reorganization Event,” each share of the Series B Preferred Stock outstanding immediately prior to such Reorganization Event will become convertible into the kind and amount of securities, cash and other property or assets that a holder (that was not the counterparty to the Reorganization Event or an affiliate of such other party) of a number of shares of Common Stock equal to the Conversion Rate per share of the Series B Preferred Stock prior to the Reorganization Event would have owned or been entitled to receive upon the Reorganization Event (the “Exchange Property”).

(B) Upon any conversion during the period following a Reorganization Event and ending on the date that is 30 days after such Reorganization Event, each Holder of Series B Preferred Stock may elect to receive, for each share of Series B Preferred Stock converted, a number of shares of Common Stock equal to the Conversion Rate which will be increased to equal the sum of the Liquidation Preference plus all accumulated and unpaid dividends to, but excluding, the settlement date for such conversion divided by the Market Value of the Common Stock, provided that such Conversion Rate set forth in this clause (B) will not exceed 17.1428 shares of Common Stock per share of Series B Preferred Stock (subject to adjustment in the same manner as the Conversion Rate as provided in Section 5).

 

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(C) In addition, in any Reorganization Event where (i) the Exchange Price (as defined in Section 16) is below $8.75 and there is a Change of Control, or (ii) when there is a Fundamental Change, the Company will have the right to require Holders of the Series B Preferred Stock to convert each share of the Series B Preferred Stock outstanding immediately prior to such Reorganization Event into a number of shares of Common Stock equal to the Conversion Rate which will be increased to equal the sum of the Liquidation Preference plus all accumulated and unpaid dividends to, but excluding, the settlement date for such conversion divided by the Market Value of the Common Stock, provided that such Conversion Rate set forth in this clause (C) will not exceed 34.2856 shares of Common Stock per share of Series B Preferred Stock (subject to adjustment in the same manner as the Conversion Rate as provided in Section 5).

Section 10. Voting Rights.

(A) For so long any shares of Series B Preferred Stock remain outstanding, unless a greater percentage shall be required by law, the affirmative vote or consent of the Holders of more than 66 2/3% of the outstanding shares of Series B Preferred Stock, in person or by proxy, at an annual meeting of the Company’s shareholders or at a special meeting called for such purpose, or by written consent in lieu of such meeting, shall be required to alter, repeal or amend, whether by merger, consolidation, combination, reclassification or otherwise, any provisions of the Second Amended and Restated Certificate of Incorporation, this Certificate of Amendment establishing the Series B Preferred Stock, or the Fourth Amended and Restated By-laws of the Company, as amended, if the amendment would amend, alter or affect the voting rights, dividend rights, preferences or special rights of the Series B Preferred Stock so as to adversely affect the Holders thereof, including, without limitation, (i) any change to the Series C Preferred Stock that adversely affects the Series B Preferred Stock or (ii) the creation of, increase in the authorized number of, or issuance of, shares of any class or series of stock pari passu with or senior to the Series B Preferred Stock, or security convertible into such capital stock; provided that the Company may issue, without obtaining the vote or consent of any Holder, up to $100,000,000 in aggregate liquidation preference outstanding from time to time (as may be increased by the amount of any dividends paid in kind thereon) of additional preferred stock that is pari passu with the Series B Preferred Stock, on such terms as the Company may designate (including the Series C Preferred Stock issued on the Original Issue Date).

(B) Whenever dividends on any Series B Preferred Stock shall be in arrears for six or more consecutive or non-consecutive Dividend Periods (a “Preferred Dividend Default”), the Holders shall be entitled to nominate one additional director of the Company (the “Preferred Director”) for election at the next annual meeting of stockholders and at each subsequent meeting, until all dividends accumulated on such Series B Preferred Stock for the past Dividend Periods and the then current Dividend Period shall have been fully paid or declared and a sum sufficient for the payment thereof set aside for payment; provided that on or prior to the election of such Preferred Director, the Holders and such Preferred Director shall have agreed in writing with the Company that such Preferred Director shall resign immediately if and when all accumulated dividends shall have been paid on such Series B Preferred Stock. In

 

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such case, should a Preferred Director be subsequently elected, the entire Board shall be increased by one director. If and when all accumulated dividends shall have been paid on such Series B Preferred Stock, the right of the holders of such securities to nominate a director shall immediately cease (subject to revesting in the event of each and every Preferred Dividend Default). So long as a Preferred Dividend Default shall continue, the Holders shall be entitled to nominate a director to fill any vacancy in the office of a Preferred Director.

(C) Except as set forth in this Section 10, Holders have no voting rights and their consent shall not be required for taking any corporate action.

Section 11. [Reserved].

Section 12. Information Rights.

(A) The Company shall provide Holders with, within 15 days after it has filed the same with the Commission, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may prescribe) that it may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act (other than confidential filings, documents subject to confidential treatment and correspondence with the Commission) (“Public Company Reports”).

(B) The Company’s obligation set forth in Section 12(A) to provide Holders with copies of Public Company Reports shall be satisfied if the Company files such Public Company Reports with the SEC on EDGAR or otherwise makes such reports publicly available on its website.

(C) To the extent the Company is not required to file Public Company Reports with the SEC, the Company shall, for so long as any shares of the Series B Preferred Stock are outstanding, furnish to Holders, upon their written request (and subject to such Holders entering into customary confidentiality agreements with the Company, consistent with any such agreements entered into generally by shareholders of the Company receiving such information, prior to receiving such information), quarterly reports and annual reports of the Company, which shall be similar in scope to a Form 10-Q and Form 10-K, respectively. In this circumstance, the Company shall furnish to Holders such information as soon as reasonably practicable after such information has been prepared by the Company.

Section 13. No Fractional Shares. No fractional shares of Common Stock or securities representing fractional shares of Common Stock shall be delivered upon conversion, whether voluntary or mandatory, of the Series B Preferred Stock. Instead, the Company will make a cash payment to each Holder that would otherwise be entitled to a fractional share based on the Closing Sale Price of the Common Stock on the relevant Conversion Date.

Section 14. Certificates.

(A) Form and Dating. In the event the Company elects to issue the Series B Preferred Stock in certificated form, the certificates representing the Series B Preferred Stock and the Transfer Agent’s certificate of authentication shall be substantially in the form set forth in Exhibit A. The Series B Preferred Stock certificate may have notations, legends or endorsements required by law or stock exchange rules; provided that any such notation, legend or endorsement is in a form acceptable to the Company. Each Series B Preferred Stock certificate shall be dated the date of its authentication.

 

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(i) Global Preferred Stock. The Series B Preferred Stock shall be issued initially in the form of one or more fully registered certificates substantially in the form of Exhibit A hereto issued in the name of the Holder (“Certificated Preferred Stock”). Following the Original Issue Date, the Company may, at the request of the Holders (and subject to each such Holder surrendering its Certificated Preferred Stock in accordance with Section 14(C)), cause the Series B Preferred Stock to be issued in the form of one or more fully registered global certificates with the global securities legend substantially in the form of Exhibit A hereto (the “Global Preferred Stock”), which shall be deposited on behalf of the purchasers represented thereby with the Transfer Agent, as custodian for DTC (or with such other custodian as DTC may direct), and registered in the name of Cede & Co. or other nominee of DTC, duly executed by the Company and authenticated by the Transfer Agent as hereinafter provided. The number of shares of Series B Preferred Stock represented by Global Preferred Stock may from time to time be increased or decreased by adjustments made on the records of the Transfer Agent and DTC or its nominee as hereinafter provided. All shares of Common Stock issued in respect of shares of Series B Preferred Stock on any Conversion Date shall be freely transferable without restriction under the Securities Act (other than by the Company’s Affiliates), and such shares shall be eligible for receipt in global form through the facilities of DTC.

(ii) Book-Entry Provisions. In the event Global Preferred Stock is deposited with or on behalf of DTC, the Company shall execute and the Transfer Agent shall authenticate and deliver initially one or more Global Preferred Stock certificates that (a) shall be registered in the name of Cede & Co. as nominee for DTC as depository for such Global Preferred Stock or the nominee of DTC and (b) shall be delivered by the Transfer Agent to DTC or pursuant to DTC’s instructions or held by the Transfer Agent as custodian for DTC. Members of, or participants in, DTC (“Agent Members”) shall have no rights under this Certificate of Amendment with respect to any Global Preferred Stock held on their behalf by DTC or by the Transfer Agent as the custodian of DTC or under such Global Preferred Stock, and DTC may be treated by the Company, the Transfer Agent and any agent of the Company or the Transfer Agent as the absolute owner of such Global Preferred Stock for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Transfer Agent or any agent of the Company or the Transfer Agent from giving effect to any written certification, proxy or other authorization furnished by DTC or impair, as between DTC and its Agent Members, the operation of customary practices of DTC governing the exercise of the rights of a holder of a beneficial interest in any Global Preferred Stock.

(iii) Certificated Preferred Stock. Except as provided in this Section 14(A) or in Section 14(C), owners of beneficial interests in Global Preferred Stock will not be entitled to receive physical delivery of Certificated Preferred Stock.

 

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(B) Execution and Authentication. The Chief Executive Officer or the President or a Vice President and the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the Company shall sign the Series B Preferred Stock certificate for the Company by manual or facsimile signature.

If an Officer whose signature is on a Series B Preferred Stock certificate no longer holds that office at the time the Transfer Agent authenticates the Series B Preferred Stock certificate, the Series B Preferred Stock certificate shall be valid nevertheless.

A Series B Preferred Stock certificate shall not be valid until an authorized signatory of the Transfer Agent manually signs the certificate of authentication on the Series B Preferred Stock certificate. The signature shall be conclusive evidence that the Series B Preferred Stock certificate has been authenticated under this Certificate of Amendment.

The Transfer Agent shall authenticate and deliver certificates for up to 1,000,000 shares of Series B Preferred Stock for original issue upon a written order of the Company signed by an Officer of the Company (or such greater number as may be required by law). Such order shall specify the number of shares of Series B Preferred Stock to be authenticated and the Original Issue Date of the Series B Preferred Stock is to be authenticated.

The Transfer Agent may appoint an authenticating agent reasonably acceptable to the Company to authenticate the certificates for the Series B Preferred Stock. Unless limited by the terms of such appointment, an authenticating agent may authenticate certificates for the Series B Preferred Stock whenever the Transfer Agent may do so. Each reference in this Certificate of Amendment to authentication by the Transfer Agent includes authentication by such agent. An authenticating agent has the same rights as the Transfer Agent or agent for service of notices and demands.

(C) Transfer and Exchange.

(i) Transfer and Exchange of Certificated Preferred Stock. When Certificated Preferred Stock is presented to the Transfer Agent with a request to register the transfer of such Certificated Preferred Stock or to exchange such Certificated Preferred Stock for an equal number of shares of Certificated Preferred Stock, the Transfer Agent shall register the transfer or make the exchange as requested if its reasonable requirements for such transaction are met; provided that the Certificated Preferred Stock surrendered for transfer or exchange shall be duly endorsed or accompanied by a written instrument of transfer in form reasonably satisfactory to the Company and the Transfer Agent, duly executed by the Holder thereof or its attorney duly authorized in writing.

(ii) Restrictions on Transfer of Certificated Preferred Stock for a Beneficial Interest in Global Preferred Stock. Certificated Preferred Stock may not be exchanged for a beneficial interest in Global Preferred Stock except upon satisfaction of the requirements set forth below. Upon receipt by the Transfer Agent of Certificated Preferred Stock, duly endorsed or accompanied by appropriate instruments of transfer, in form reasonably satisfactory to the Company and the Transfer Agent, together with written instructions directing the Transfer Agent to make, or to direct DTC to make, an

 

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adjustment on its books and records with respect to such Global Preferred Stock to reflect an increase in the number of shares of Series B Preferred Stock represented by the Global Preferred Stock, then the Transfer Agent shall cancel such Certificated Preferred Stock and cause, or direct DTC to cause, in accordance with the standing instructions and procedures existing between DTC and the Transfer Agent, the number of shares of Series B Preferred Stock represented by the Global Preferred Stock to be increased accordingly. If no Global Preferred Stock is then outstanding, the Company shall issue and the Transfer Agent shall authenticate, upon written order of the Company in the form of an Officers’ Certificate, a new Global Preferred Stock representing the appropriate number of shares.

(iii) Transfer and Exchange of Global Preferred Stock. The transfer and exchange of Global Preferred Stock or beneficial interests therein shall be effected through DTC, in accordance with this Certificate of Amendment (including applicable restrictions on transfer set forth herein, if any) and the procedures of DTC therefor.

(iv) Transfer of a Beneficial Interest in Global Preferred Stock for Certificated Preferred Stock.

(1) If at any time:

(A) DTC notifies the Company that DTC is unwilling or unable to continue as depository for the Global Preferred Stock and a successor depository for the Global Preferred Stock is not appointed by the Company within 90 days after delivery of such notice; or

(B) DTC ceases to be a clearing agency registered under the Exchange Act and a successor depository for the Global Preferred Stock is not appointed by the Company within 90 days,

then the Company shall execute, and the Transfer Agent, upon receipt of a written order of the Company signed by two Officers of the Company requesting the authentication and delivery of Certificated Preferred Stock to the Persons designated by the Company, shall authenticate and deliver Certificated Preferred Stock equal to the number of shares of Series B Preferred Stock represented by the Global Preferred Stock, in exchange for such Global Preferred Stock. Subject to the foregoing, the beneficial interests in a Global Preferred Stock shall not be exchangeable for Certificated Preferred Stock.

(2) Certificated Preferred Stock issued in exchange for a beneficial interest in a Global Preferred Stock pursuant to this Section 14(C)(iv) shall be registered in such names and in such authorized denominations as DTC, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Transfer Agent. The Transfer Agent shall deliver such Certificated Preferred Stock to the Persons in whose names such Series B Preferred Stock are so registered in accordance with the instructions of DTC.

 

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(v) Restrictions on Transfer of Global Preferred Stock. Notwithstanding any other provisions of this Certificate of Amendment (other than the provisions set forth in Section 14(C)(iv)), Global Preferred Stock may not be transferred as a whole except by DTC to a nominee of DTC or by a nominee of DTC to DTC or another nominee of DTC or by DTC or any such nominee to a successor depository or a nominee of such successor depository.

(vi) Cancellation or Adjustment of Global Preferred Stock. At such time as all beneficial interests in Global Preferred Stock have either been exchanged for Certificated Preferred Stock, converted or canceled, such Global Preferred Stock shall be returned to DTC for cancellation or retained and canceled by the Transfer Agent. At any time prior to such cancellation, if any beneficial interest in Global Preferred Stock is exchanged for Certificated Preferred Stock, converted or canceled, the number of shares of Series B Preferred Stock represented by such Global Preferred Stock shall be reduced and an adjustment shall be made on the books and records of the Transfer Agent with respect to such Global Preferred Stock, by the Transfer Agent or DTC, to reflect such reduction.

(vii) Obligations with Respect to Transfers and Exchanges of Series B Preferred Stock.

(1) To permit registrations of transfers and exchanges, the Company shall execute and the Transfer Agent shall authenticate Certificated Preferred Stock and Global Preferred Stock as required pursuant to the provisions of this Section 14(C).

(2) All Certificated Preferred Stock and Global Preferred Stock issued upon any registration of transfer or exchange of Certificated Preferred Stock or Global Preferred Stock shall be the valid Capital Stock of the Company, entitled to the same benefits under this Certificate of Amendment as the Certificated Preferred Stock or Global Preferred Stock surrendered upon such registration of transfer or exchange.

(3) Prior to due presentment for registration of transfer of any shares of Series B Preferred Stock, the Transfer Agent and the Company may deem and treat the Person in whose name such shares of Series B Preferred Stock are registered as the absolute owner of such Series B Preferred Stock and neither the Transfer Agent nor the Company shall be affected by notice to the contrary.

(4) No service charge shall be made to a Holder for any registration of transfer or exchange upon surrender of any Series B Preferred Stock certificate or Common Stock certificate at the office of the Transfer Agent maintained for that purpose. However, the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Series B Preferred Stock certificates or Common Stock certificates, except as provided in
Section 5(G).

(viii) No Obligation of the Transfer Agent.

 

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(1) The Transfer Agent or the Company shall have no responsibility or obligation to any beneficial owner of Global Preferred Stock, a member of or a participant in, DTC or any other Person with respect to the accuracy of the records of DTC or its nominee or of any participant or member thereof, with respect to any ownership interest in the Series B Preferred Stock or with respect to the delivery to any participant, member, beneficial owner or other Person (other than DTC) of any notice or the payment of any amount, under or with respect to such Global Preferred Stock. All notices and communications to be given to the Holders and all payments to be made to Holders under the Series B Preferred Stock shall be given or made only to the Holders (which shall be DTC or its nominee in the case of the Global Preferred Stock). The rights of beneficial owners in any Global Preferred Stock shall be exercised only through DTC subject to the applicable rules and procedures of DTC. The Transfer Agent may rely and shall be fully protected in relying upon information furnished by DTC with respect to its members, participants and any beneficial owners.

(2) The Transfer Agent or the Company shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Certificate of Amendment or under applicable law with respect to any transfer of any interest in any Series B Preferred Stock (including any transfers between or among DTC participants, members or beneficial owners in any Global Preferred Stock) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Certificate of Amendment, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

(D) Replacement Certificates. If any of the Certificated Preferred Stock certificates shall be mutilated, lost, stolen or destroyed, the Company shall issue, in exchange and in substitution for and upon cancellation of the mutilated Certificated Preferred Stock certificate, or in lieu of and substitution for the Certificated Preferred Stock certificate lost, stolen or destroyed, a new Certificated Preferred Stock certificate of like tenor and representing an equivalent number of shares of Series B Preferred Stock, but only upon receipt of evidence of such loss, theft or destruction of such Certificated Preferred Stock certificate and indemnity, if requested, satisfactory to the Company and the Transfer Agent.

(E) Temporary Certificates. Until definitive Certificated Preferred Stock certificates are ready for delivery, the Company may prepare and the Transfer Agent shall authenticate temporary Certificated Preferred Stock certificates. Any temporary Certificated Preferred Stock certificates shall be substantially in the form of definitive Preferred Stock certificates but may have variations that the Company considers appropriate for temporary Certificated Preferred Stock certificates. Without unreasonable delay, the Company shall prepare and the Transfer Agent shall authenticate definitive Certificated Preferred Stock certificates and deliver them in exchange for temporary Certificated Preferred Stock certificates.

 

23


(F) Cancellation. In the event the Company shall purchase or otherwise acquire Certificated Preferred Stock, the same shall thereupon be delivered to the Transfer Agent for cancellation.

(i) At such time as all beneficial interests in Global Preferred Stock have either been exchanged for Certificated Preferred Stock, converted, repurchased or canceled, such Global Preferred Stock shall thereupon be delivered to the Transfer Agent for cancellation.

(ii) The Transfer Agent and no one else shall cancel and destroy all Certificated Preferred Stock certificates surrendered for transfer, exchange, replacement or cancellation and deliver a certificate of such destruction to the Company unless the Company directs the Transfer Agent to deliver canceled Certificated Preferred Stock certificates to the Company. The Company may not issue new Certificated Preferred Stock certificates to replace Certificated Preferred Stock certificates to the extent they evidence Series B Preferred Stock which the Company has purchased or otherwise acquired.

(G) Legends. All certificates or other instruments representing shares of Series B Preferred Stock or Common Stock issuable upon conversion thereof will bear a legend in substantially the following form (excluding in the case of any such Series B Preferred Stock or such Common Stock for which a registration statement covering the resale of such Series B Preferred Stock or such Common Stock has been declared effective by the SEC and that has been disposed of pursuant to such effective registration statement; or sold under circumstances in which all of the applicable conditions of Rule 144 (or any similar provisions then in force) under the Securities Act are met):

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY NON-U.S. OR STATE SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE THEREWITH. THIS SECURITY IS ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER AS SET FORTH IN A REGISTRATION RIGHTS AGREEMENT, AS AMENDED FROM TIME TO TIME, COPIES OF WHICH MAY BE OBTAINED UPON REQUEST FROM EASTMAN KODAK COMPANY OR ANY SUCCESSOR THERETO, AND THIS SECURITY MAY NOT BE VOTED OR OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE THEREWITH. THIS SECURITY MAY BE TRANSFERRED IN ACCORDANCE WITH RULE 144A UNDER THE SECURITIES ACT WITHOUT THE DELIVERY OF AN OPINION OF COUNSEL.

Section 15. Other Provisions.

(A) With respect to any notice to a Holder of shares of Series B Preferred Stock required to be provided hereunder, neither failure to mail such notice, nor any defect therein or in the mailing thereof, to any particular Holder shall affect the sufficiency of the notice or the validity of the proceedings referred to in such notice with respect to the other Holders or

 

24


affect the legality or validity of any distribution, rights, warrant, reclassification, consolidation, merger, conveyance, transfer, dissolution, liquidation or winding-up, or the vote upon any such action. Any notice which was mailed in the manner herein provided shall be conclusively presumed to have been duly given whether or not the Holder receives the notice.

(B) Shares of Series B Preferred Stock that have been issued and reacquired in any manner, including shares of Series B Preferred Stock that are purchased or exchanged or converted, shall (upon compliance with any applicable provisions of the New Jersey Business Corporation Act) have the status of authorized but unissued shares of preferred stock of the Company undesignated as to series and may be designated or redesignated and issued or reissued, as the case may be, as part of any series of preferred stock of the Company; provided that any issuance of such shares as Series B Preferred Stock must be in compliance with the terms hereof.

(C) The shares of Series B Preferred Stock shall be issuable only in whole shares.

(D) All notice periods referred to herein shall commence on the date of the mailing of the applicable notice. Notice to any Holder shall be given to the registered address set forth in the Company’s or the Transfer Agent’s records for such Holder, or for Global Preferred Stock, to the Depository in accordance with its procedures.

(E) Any payment required to be made hereunder on any day that is not a Business Day shall be made on the next succeeding Business Day and no interest or dividends on such payment will accrue or accumulate, as the case may be, in respect of such delay.

Section 16. Definitions.

(A) “Additional Shares” shall have the meaning set forth in Section 8(A).

(B) “Affiliate” means, with respect to any Person, any Person directly or indirectly controlling, controlled by or under common control with such other Person. For purposes of determining whether a Person is an Affiliate, the term “control” and its correlative forms “controlled by” and “under common control with” shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through ownership of securities, contract or otherwise.

(C) “Agent Members” shall have the meaning set forth in Section 14(A)(ii).

(D) “Business Day” means any day except Saturday, Sunday or any other day on which commercial banks located in New York, New York, New Jersey are authorized or required by law to be closed for business.

(E) “Capital Stock” shall mean, for any entity, any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) stock issued by that entity.

 

25


(F) “Certificated Preferred Stock” shall have the meaning set forth in Section 14(A)(iii).

(G) “Certificate of Amendment” shall have the meaning set forth in Section 5(A).

(H) “Change of Control” means a Fundamental Change as set forth in clause (i) of the definition of Fundamental Change.

(I) “close of business” means 5:00 p.m. (New York City time).

(J) “Closing Sale Price” of the Common Stock on any date means the closing sale price per share (or if no closing sale price is reported, the average of the closing bid and ask prices or, if more than one in either case, the average of the average closing bid and the average closing ask prices) on such date as reported in composite transactions for the principal United States national or regional securities exchange on which the Common Stock is traded or, if the Common Stock is not listed for trading on a United States national or regional securities exchange on the relevant date, the last quoted bid price for the Common Stock in the over-the-counter market on the relevant date, as reported by OTC Markets Group Inc. or a similar organization. In the absence of such a quotation, the Closing Sale Price shall be the average of the mid-point of the last bid and ask prices for the Common Stock on the relevant date from each of at least three nationally recognized independent investment banking firms selected by the Company for this purpose.

(K) “Common Stock” shall mean the Common Stock, par value $0.01 per share, of the Company.

(L) “Conversion Date” shall have the meaning specified in Section 5(B).

(M) “Conversion Price” shall mean, at any time, $100.00 (one hundred and 00/100 dollars) divided by the Conversion Rate in effect at such time.

(N) “Conversion Rate” shall have the meaning specified in Section 5(A).

(O) “DTC” or “Depository” shall mean The Depository Trust Company, or any successor depository.

(P) “Dividend Payment Date” shall mean January 15, April 15, July 15 and October 15 of each year, commencing on April 15, 2021.

(Q) “Dividend Period” means the period commencing on, and including, a Dividend Payment Date and ending on, and including, the day immediately preceding the next succeeding Dividend Payment Date, with the exception that the first Dividend Period shall commence on, and include, the Original Issue Date and end on and include April 14, 2021.

(R) “Dividend Rate” shall mean the rate per annum of 4.0% per share of Series B Preferred Stock on the Liquidation Preference.

 

26


(S) “Dividend Record Date” shall mean, with respect to any Dividend Payment Date, the January 1, April 1, July 1 or October 1, as the case may be, immediately preceding such Dividend Payment Date.

(T) “Effective Date” shall mean the date on which a Fundamental Change event occurs or becomes effective, except that, as used in Section 5(D), Effective Date shall mean the first date on which the shares of the Common Stock trade on the applicable exchange or market, regular way, reflecting the relevant share split or share combination, as applicable.

(U) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

(V) “Exchange Price” shall mean the Exchange Property divided by the Market Value of the Common Stock.

(W) “Exchange Property” shall have the meaning set forth in Section 9(A).

(X) “Ex-Date,” when used with respect to any issuance, dividend or distribution on the Common Stock, means the first date on which the Common Stock trades on the applicable exchange or in the applicable market, regular way, without the right to receive such issuance, dividend or distribution from the Company or, if applicable, from the seller of the Common Stock on such exchange or market (in the form of due bills or otherwise) as determined by such exchange or market.

(Y) “Expiration Date” shall have the meaning set forth in Section 7(A).

(Z) “Fundamental Change” shall be deemed to have occurred at any time after the Series B Preferred Stock is originally issued if any of the following occurs:

(i) a “person” or “group” within the meaning of Section 13(d) of the Exchange Act, other than (1) the Company, its subsidiaries or the employee benefit plans of the Company and its subsidiaries and (2) Permitted Holders, becomes the direct or indirect “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of more than 50% of the Voting Stock, provided that a Fundamental Change will be deemed to have occurred if a Permitted Holder Group becomes the direct or indirect “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of more than 70% of the Voting Stock;

(ii) the consummation of (A) any recapitalization, reclassification or change of the Common Stock (other than changes resulting from a subdivision or combination) as a result of which the Common Stock would be converted into, or exchanged for, stock, other securities, other property or assets; (B) any share exchange, consolidation or merger of the Company pursuant to which the Common Stock will be converted into cash, securities or other property; or (C) any sale, lease or other transfer in one transaction or a series of transactions of all or substantially all of the consolidated assets of the Company and its subsidiaries, taken as a whole, to any Person other than one of the Company’s subsidiaries; provided, however, that any merger solely for the purpose of changing the Company’s jurisdiction of incorporation to the United States of America, any State

 

27


thereof or the District of Columbia, and resulting in a reclassification, conversion or exchange of outstanding shares of Common Stock solely into shares of Common Stock of the surviving entity, shall not be a Fundamental Change; provided further that any transaction described in this clause (ii) in which the holders of the Company’s Common Stock immediately prior to such transaction own, directly or indirectly, more than 50% of the common stock of the continuing corporation or transferee or the parent thereof immediately after such transaction in substantially the same proportions as such ownership immediately prior to such transaction shall not be a Fundamental Change pursuant to this clause (ii);

(iii) the Common Stock ceases to be listed or quoted on any of the New York Stock Exchange, the NASDAQ Global Select Market or the NASDAQ Global Market (or any of their respective successors); or

(iv) the stockholders of the Company approve any plan or proposal for the liquidation or dissolution of the Company;

provided, however, that a transaction or transactions described in clause (i) or (ii) above shall not constitute a Fundamental Change, if at least 90% of the consideration received or to be received by holders of the Common Stock of the Company, excluding cash payments for fractional shares and cash payments made pursuant to dissenters’ appraisal rights, in connection with such transaction or transactions consists of shares of common stock that are listed or quoted on any of the New York Stock Exchange, the NASDAQ Global Select Market or the NASDAQ Global Market (or any of their respective successors) or will be so listed or quoted when issued or exchanged in connection with such transaction or transactions and as a result of such transaction or transactions the Series B Preferred Stock becomes convertible into such consideration pursuant to the terms hereof.

(AA) “Fundamental Change Conversion Period” shall have the meaning set forth in Section 7(A).

(BB) “Fundamental Change Effective Date” means, with respect to the occurrence of any Fundamental Change, the effective date of such Fundamental Change.

(CC) “Fundamental Change Notice” shall have the meaning set forth in Section 7(C).

(DD) “Fundamental Change Stock Price” means, for any Fundamental Change, the price paid (or deemed paid) per share of Common Stock in the Fundamental Change, which shall equal (i) if all holders of Common Stock receive only cash in exchange for their Common Stock in such Fundamental Change, the amount of cash paid per share of Common Stock in such Fundamental Change, and (ii) in all other cases, the Market Value per share of Common Stock determined as of the Trading Day immediately preceding the Fundamental Change Effective Date.

(EE) “Global Preferred Stock” shall have the meaning specified in Section 14(A)(i).

 

28


(FF) “Holder” or “holder” shall mean a holder of record of the Series B Preferred Stock.

(GG) “Junior Stock” means all classes of the Company’s Common Stock and any other class of capital stock or series of preferred stock of the Company established after the issue date of the Series B Preferred Stock, the terms of which do not expressly provide that such class or series ranks senior to or pari passu with the Series B Preferred Stock as to dividend rights or rights upon the Company’s liquidation, winding-up or dissolution.

(HH) “Liquidation Preference” means, with respect to each share of Series B Preferred Stock, $100.00 per share.

(II) “Make-Whole Premium” shall have the meaning set forth in Section 8(A).

(JJ) “Mandatory Conversion Date” shall have the meaning specified in Section 6(B).

(KK) “Mandatory Redemption Price” shall have the meaning specified in Section 4.

(LL) “Market Value” shall mean the average of the per share volume-weighted average prices of the Common Stock for each day during a 15 consecutive Trading Day period ending immediately prior to the date of determination, as displayed under the heading “Bloomberg VWAP” on Bloomberg page “KODK Equity VWAP” (or its equivalent successor if such page is not available) in respect of the period from the scheduled open of trading until the scheduled close of trading of the primary trading session on each such Trading Day (or if such volume-weighted average price is unavailable on any such Trading Day, the Closing Sale Price shall be used for such Trading Day). The per share volume-weighted average price on each such Trading Day shall be determined without regard to after-hours trading or any other trading outside of the regular trading session trading hours.

(MM) “Notice of Conversion” shall have the meaning set forth in Section 5(B).

(NN) “Officer” shall mean the Chief Executive Officer, the President, any Vice President, the Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of the Company.

(OO) “Officers’ Certificate” shall mean a certificate signed by two Officers.

(PP) “open of business” means 9:00 a.m. (New York City time).

(QQ) “Original Issue Date” shall mean the first date on which the Series B Preferred Stock is issued.

(RR) “Permitted Holders” shall mean, at any time, each of Southeastern Asset Management, Inc., Longleaf Partners Small-Cap Fund, C2W Partners Master Fund Limited, Deseret Mutual Pension Trust, George Karfunkel, Renee Karfunkel, GKarfunkel Family LLC, Congregation Chemdas Yisroel, Chesed Foundation of America, Marneu Holding Company,

 

29


Moses Marx, Phillippe Katz, K.F. Investors LLC, United Equities Commodities Company, Momar Corporation, 111 John Realty Corporation, GO EK Ventures IV, LLC, Kennedy Lewis Investment Management, LLC and any Affiliate of the foregoing and any group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision) the members of which include any of the Permitted Holders specified above and that, directly or indirectly, holds or acquires beneficial ownership of the Voting Stock (a “Permitted Holder Group”), so long as (1) each member of the Permitted Holder Group has voting rights proportional to the percentage of ownership interests held or acquired by such member and (2) no Person or other “group” (other than Permitted Holders specified above) beneficially owns more than 50% on a fully diluted basis of the Voting Stock held by the Permitted Holder Group (without giving effect to any attribution rules).

(SS) “Person” shall mean any individual, corporation, general partnership, limited partnership, limited liability partnership, joint venture, association, joint-stock company, trust, limited liability company, unincorporated organization or government or any agency or political subdivision thereof.

(TT) “Preferred Dividend Default” shall have the meaning set forth in Section 10(C).

(UU) “Preferred Director” shall have the meaning set forth in Section 10(C).

(VV) “Record Date” shall mean, with respect to any dividend, distribution or other transaction or event in which the holders of the Common Stock (or other applicable security) have the right to receive any cash, securities or other property or in which the Common Stock (or such other security) is exchanged for or converted into any combination of cash, securities or other property, the date fixed for determination of holders of the Common Stock (or such other security) entitled to receive such cash, securities or other property (whether such date is fixed by the Board, statute, contract or otherwise).

(WW) “Reorganization Event” shall have the meaning set forth in Section 9(A).

(XX) “SEC” or “Commission” shall mean the Securities and Exchange Commission.

(YY) “Securities Act” shall mean the Securities Act of 1933, as amended.

(ZZ) “Series B Preferred Stock” shall have the meaning set forth in Section 1.

(AAA) “Series C Preferred Stock” shall mean any Series C Preferred Stock that may be designated by the Company.

(BBB) “Spin-off” shall have the meaning specified in Section 5(D)(iii).

(CCC) “Stock Price” shall mean (i) if holders of the Common Stock receive in exchange for their Common Stock only cash in the transaction constituting a Fundamental Change, the cash amount paid per share or (ii) otherwise, the average of the Closing Sale Prices of the Common Stock on the five Trading Days preceding, but excluding the Effective Date of the Fundamental Change.

 

30


(DDD) “Trading Day” shall mean a day during which trading in the Common Stock generally occurs on the New York Stock Exchange or, if the Common Stock is not listed on the New York Stock Exchange, on the principal other national or regional securities exchange on which the Common Stock is then listed or, if the Common Stock is not listed on a national or regional securities exchange, on the principal other market on which the Common Stock is then listed or admitted for trading. If the Common Stock is not so listed or traded, Trading Day means a Business Day.

(EEE) “Transfer Agent” shall mean Computershare Inc. and Computershare Trust Company N.A., together acting as the Company’s duly appointed transfer agent, registrar, conversion agent and dividend disbursing agent for the Series B Preferred Stock. The Company may, in its sole discretion, remove the Transfer Agent with 10 days’ prior notice to the Transfer Agent and Holders; provided that the Company shall appoint a successor Transfer Agent who shall accept such appointment prior to the effectiveness of such removal.

(FFF) “Valuation Period” shall have the meaning specified in Section 5(D)(iii).

(GGG) “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.

 

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EXHIBIT A

FORM OF SERIES B PREFERRED STOCK CERTIFICATE

FACE OF SECURITY

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR 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.

TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE CERTIFICATE OF AMENDMENT REFERRED TO BELOW.

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY NON-U.S. OR STATE SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE THEREWITH. THIS SECURITY IS ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER AS SET FORTH IN A REGISTRATION RIGHTS AGREEMENT, AS AMENDED FROM TIME TO TIME, COPIES OF WHICH MAY BE OBTAINED UPON REQUEST FROM EASTMAN KODAK COMPANY OR ANY SUCCESSOR THERETO, AND THIS SECURITY MAY NOT BE VOTED OR OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE THEREWITH. THIS SECURITY MAY BE TRANSFERRED IN ACCORDANCE WITH RULE 144A UNDER THE SECURITIES ACT WITHOUT THE DELIVERY OF AN OPINION OF COUNSEL.

 

Certificate Number [    ]    Number of Shares of
   Preferred Stock [    ]
   CUSIP No.: [    ]
   ISIN No. [    ]

 

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4.0% Series B Convertible Preferred Stock

of

EASTMAN KODAK COMPANY

EASTMAN KODAK COMPANY, a New Jersey corporation (the “Company”), hereby certifies that [                ] (the “Holder”) is the registered owner of [                ] fully paid and non-assessable shares of preferred stock, no par value, of the Company designated as the 4.0% Series B Convertible Preferred Stock (the “Series B Preferred Stock”). The shares of Series B Preferred Stock are transferable on the books and records of the Transfer Agent, in person or by a duly authorized attorney, upon surrender of this certificate duly endorsed and in proper form for transfer. The designations, rights, privileges, restrictions, preferences and other terms and provisions of the Series B Preferred Stock represented hereby are as specified in, and the shares of Series B Preferred Stock are issued and shall in all respects be subject to the provisions of, the Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of the Company, dated February 25, 2021, as the same may be amended from time to time (the “Certificate of Amendment”). Capitalized terms used herein but not defined shall have the meaning given them in the Certificate of Amendment. The Company will provide a copy of the Certificate of Amendment to a Holder without charge upon written request to the Company at its principal place of business.

Reference is hereby made to the Certificate of Amendment, which shall for all purposes have the same effect as if set forth at this place.

Upon receipt of this certificate, the Holder is bound by the Certificate of Amendment and is entitled to the benefits thereunder.

Unless the Transfer Agent’s Certificate of Authentication hereon has been properly executed, these shares of Series B Preferred Stock shall not be entitled to any benefit under the Certificate of Amendment or be valid for any purpose.

 

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IN WITNESS WHEREOF, the Company has executed this certificate this         day of    [    ], 2021.

 

EASTMAN KODAK COMPANY

By:

   
 

Name:

 

Title:

By:

   
 

Name:

 

Title:

TRANSFER AGENT’S CERTIFICATE OF AUTHENTICATION

These are shares of Series B Preferred Stock referred to in the within-mentioned Certificate of Amendment.

Dated:

 

COMPUTERSHARE SHAREOWNER SERVICES, as Transfer Agent

By:

   
 

Authorized Signatory

 

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REVERSE OF SECURITY

The Company is authorized to issue 4.0% Series B Convertible Preferred Stock (the “Series B Preferred Stock”) and common stock. The Series B Preferred Stock is convertible preferred stock, with a dividend and liquidation preference over the common stock.

The Company will furnish without charge and upon written request to each Holder the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock and the qualifications, limitations or restrictions of such preferences and/or rights.

The Company will furnish to any shareholder, upon request and without charge, a full statement of the authority of its Board of Directors to divide shares of its capital stock into classes or series and to determine and change the relative rights, preferences and limitations of any class or series.

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned assigns and transfers the shares of Series B Preferred Stock evidenced hereby to:

 

 
    
 
    

(Insert assignee’s social security or tax identification number)

 

 
    

(Insert address and zip code of assignee)

and irrevocably appoints:

 

 
    
 
    
 
    

agent to transfer the shares of Series B Preferred Stock evidenced hereby on the books of the Transfer Agent. The agent may substitute another to act for him or her.

Date:                                                                                                           

Signature:                                                                                                   

(Sign exactly as your name appears on the other side of this Series B Preferred Stock Certificate)

 

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Signature Guarantee:                                                  1

 

1 

(Signature must be guaranteed by an “eligible guarantor institution” that is a bank, stockbroker, savings and loan association or credit union meeting the requirements of the Transfer Agent, which requirements include membership or participation in the Securities Transfer Agents Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Transfer Agent in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.)

 

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EXHIBIT B

NOTICE OF CONVERSION

(To be Executed by the Holder in order to Convert the Series B Preferred Stock)

The undersigned hereby irrevocably elects to convert (the “Conversion”) shares of 4.0% Series B Preferred Stock (the “Series B Preferred Stock”) of Eastman Kodak Company (the “Company”), represented by stock certificate No(s)                 (the “Preferred Stock Certificates”), into shares of Common Stock (“Common Stock”) of the Company according to the conditions of the Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of the Company, dated February 25, 2021, establishing the Series B Preferred Stock (the “Certificate of Amendment”). The Company will pay any documentary, stamp or similar issue or transfer tax on the issuance of the shares of the Company’s Common Stock upon conversion of the Series B Preferred Stock, unless the tax is due because the Holder requests such shares to be issued in a name other than the Holder’s name, in which case the Holder will pay the tax. A copy of each Preferred Stock Certificate is attached hereto (or evidence of loss, theft or destruction thereof).

Capitalized terms used but not defined herein shall have the meanings ascribed thereto in or pursuant to the Certificate of Amendment.

Number of shares of Series B Preferred Stock to be converted:

Name or Names (with addresses) in which the certificate or certificate for any shares of Common Stock to be issued are to be registered:2

Signature:

Name of registered Holder:

Fax No.:

Telephone No.:

 

2 

The Company is not required to issue shares of Common Stock until you (a) if required, furnish appropriate endorsements and transfer documents and (b) if required, pay funds equal to interest payable on the next Dividend Payment Date to which such Holder is not entitled.

 

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IN WITNESS WHEREOF, this Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of the Company is executed on behalf of the Company by its Chief Executive Officer and attested by its Secretary this 25th day of February, 2021.

 

By:  

/s/ James V. Continenza

Name:  

James V. Continenza

Title:  

Chief Executive Officer

 

Attest:
By:   /s/ Roger W. Byrd
Name:  

Roger W. Byrd

Title:   Secretary

 

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STATEMENT

With regard to the Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of Eastman Kodak Company, Exhibits A and B to the Certificate of Amendment are a part of the Certificate of Amendment but cannot be completed in full at this time and thus should be filed in blank form.

 

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Exhibit 3.2

CERTIFICATE OF AMENDMENT TO THE

SECOND AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF

EASTMAN KODAK COMPANY

(Pursuant to Section 14A:7-2(2) and (4) of the

New Jersey Business Corporation Act)


Pursuant to the provisions of N.J.S.A. 14A:7-2(2) and (4), the undersigned corporation executes the following Certificate of Amendment to its Second Amended and Restated Certificate of Incorporation:

1. The name of the corporation is Eastman Kodak Company, a corporation organized and existing under the laws of the State of New Jersey (hereinafter called the “Company”).

2. The following amendment to the Second Amended and Restated Certificate of Incorporation (the “Certificate”), was approved by the Company’s Board of Directors (the “Board”) as required by Section 14A:7-2 of the New Jersey Business Corporation Act at a meeting duly called, convened and held on February 25, 2021.

3. The Board, in accordance with the Certificate, and Fourth Amended and Restated By-laws of the Company, as amended (the “By-laws”), and applicable law, at said meeting duly called, convened and held on February 25, 2021, duly adopted the following resolution authorizing the issuance and sale by the Company of up to $100 million in aggregate liquidation preference of shares of the Company’s preferred stock (and such increases in liquidation preference as will occur in connection with the issuance of PIK Shares or accumulation of Additional Liquidation Preference from time to time in accordance herewith), no par value per share (“Preferred Stock”), and created a series of 5.0% Series C Convertible Preferred Stock of the Company designated as “5.0% Series C Convertible Preferred Stock” on the terms set forth herein.

NOW, THEREFORE, BE IT RESOLVED, that in accordance with N.J.S.A. 14A:7-2(4) and Article III of the Certificate, the Board hereby establishes the terms of the 5.0% Series C Convertible Preferred Stock, no par value per share, and fixes and determines the authorized number of shares of the series, the dividend rate of shares of the series, the designations, and certain other powers, preferences, and relative, participating, optional or other rights, and the qualifications, limitations and restrictions thereof, with the Certificate hereby amended to add such terms to the end of Article III, following Article III.A., of the Certificate as follows:

III.B. 5.0% Series C Convertible Preferred Stock:

Section 1. Designation and Amount. There is hereby created out of the authorized and unissued shares of preferred stock of the Company a series of preferred stock designated as “5.0% Series C Convertible Preferred Stock” (the “Series C Preferred Stock”) and the number of shares constituting the Series C Preferred Stock shall be 1,435,000.

Section 2. Dividends and Distributions.

(A) Holders of shares of Series C Preferred Stock shall be entitled to receive, (i) on each share of Series C Preferred Stock and with respect to each Dividend Period, dividends in the form of PIK Shares (as defined below), which shall be payable as set forth below, in an amount equal to the product of (x) Dividend Rate multiplied by (y) the Liquidation Preference of each such share of Series C Preferred Stock (the “Preferred Dividends”) and (ii) as and if

 

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declared by the Board, out of any funds legally available therefor, dividends and distributions (other than (x) dividends payable in Common Stock and (y) any dividend or distribution to the extent such dividend or distribution will result in an adjustment to the Conversion Rate under Section 5(D)) per share of Series C Preferred Stock which will be payable on the number of shares of Common Stock into which such share of Series C Preferred Stock are convertible on the applicable Record Date for such dividend or distribution; provided that such dividends and distributions will be payable or made, as applicable, only upon redemption or conversion of such share of Series C Preferred Stock into Common Stock (the “Participating Dividends” and, together with the Preferred Dividends, the “Dividends”). Preferred Dividends shall be cumulative and accrue from the date of issue of each share of Series C Preferred Stock (and, in the case of any PIK Shares, from the date such PIK Shares are issued, except as provided in Section 2(B)).

(B) If Preferred Dividends are not declared and paid on any Dividend Payment Date, the unpaid amount shall be added to the Liquidation Preference (the “Additional Liquidation Preference”); provided that if such Preferred Dividends are subsequently paid with respect to Series C Preferred Stock prior to its conversion, the Additional Liquidation Preference shall be reduced by the Original Purchase Price for each PIK Shares issued as payment of such Preferred Dividends and such PIK Shares shall accrue Dividends from the applicable Dividend Payment Date.

(C) Dividends shall be payable to holders of record as they appear on the Company’s stock register on the immediately preceding Dividend Record Date (if such dividend has been declared). Preferred Dividends payable on the Series C Preferred Stock for any period other than a full Dividend Period shall be computed on the basis of a 360-day year consisting of twelve 30-day months and, for partial months, on the basis of the number of days actually elapsed in a 30-day month.

(D) The Company shall make each Preferred Dividend payment on the Series C Preferred Stock by issuance and delivery of additional non-assessable shares of Series C Preferred Stock (the “PIK Shares”) in an amount of PIK Shares for each Holder equal to the quotient of (x) the aggregate dollar amount of the Preferred Dividend payable to such Holder divided by (y) the Original Purchase Price. Preferred Dividends shall be payable only to the extent the Board, or an authorized committee thereof, declares such Preferred Dividends payable. All PIK Shares shall be duly and validly issued and free and clear of all liens and other claims. To the extent any PIK Shares pursuant to the preceding paragraph are prohibited as a result of any legal prohibition, the Company shall use its commercially reasonable efforts to remove any such legal prohibition and shall pay any such Preferred Dividend in PIK Shares at such time and to the extent any such legal prohibition is removed unless and to the extent that the Holders of the Series C Preferred Stock with respect to which the PIK Shares could not be issued and in lieu thereof had the Liquidation Preference for the shares of Series C Preferred Stock held by them in increased in the same amount by the Additional Liquidation Preference.

(E) No Preferred Dividend shall be declared or paid upon any outstanding share of Series C Preferred Stock with respect to any Dividend Period unless Preferred Dividends are declared and paid upon all outstanding shares of Series C Preferred Stock for such Dividend Period.

 

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(F) While any shares of Series C Preferred Stock remain outstanding, unless all accumulated and unpaid dividends on the Series C Preferred Stock for all past Dividend Periods shall have been paid in full in the form of PIK Shares or Additional Liquidation Preference or if at any time the Company has not fully performed its obligation to redeem in full all outstanding shares of the Series C Preferred Stock pursuant to Section 5, the Company shall not:

(i) declare or pay any dividend or make any distribution of assets on any Junior Stock; or

(ii) redeem, purchase or otherwise acquire any shares of Junior Stock or pay or make any monies available for a sinking fund for such shares of Junior Stock, other than (1) upon conversion or exchange for other Junior Stock or (2) the purchase of fractional interests in shares of any Junior Stock pursuant to the conversion or exchange provisions of such shares of Junior Stock;

provided, however, that the foregoing limitations shall not apply to (x) redemptions, purchases or other acquisitions of shares of Junior Stock in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of any one or more employees, officers, directors, managers or consultants of, or to, the Company or any of its subsidiaries; (y) an exchange, redemption, reclassification or conversion of any class or series of Junior Stock for any class or series of Junior Stock that ranks equal or junior to the applicable Junior Stock; or (z) any dividend in the form of stock, warrants, options or other rights where the dividended stock or the stock issuable upon exercise of such warrants, options or other rights is the same stock as that on which the dividend is being paid or ranks equal or junior to the applicable Junior Stock.

(G) Holders of shares of Series C Preferred Stock at the close of business on a Dividend Record Date will be entitled to receive the Preferred Dividend payment on such shares on the corresponding Dividend Payment Date (if such dividend has been declared) notwithstanding the conversion of such shares following such Dividend Record Date or the Company’s default in payment of the Preferred Dividend due on such Dividend Payment Date; provided that any Preferred Dividend payable in respect of any shares of Series C Preferred Stock that have been converted following the Dividend Record Date shall be payable in either cash or a number of additional shares of Common Stock equal to the product of (x) the Conversion Rate multiplied by (y) the Liquidation Preference in respect of such shares of Series C Preferred Stock being converted, as the Company may elect. Holders of shares of Series C Preferred Stock will not be entitled to any Preferred Dividend in excess of full cumulative Preferred Dividends.

 

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Section 3. Rank. The Series C Preferred Stock will rank, as to payment of dividends and distributions of assets upon the liquidation, dissolution or winding up of the Company, (i) senior to the Company’s Common Stock, (ii) either senior to or pari passu with all other preferred stock, (iii) pari passu with the Company’s Series B Preferred Stock and (iv) junior to all shares of capital stock of the Company issued in the future, the terms of which expressly provide that such shares will rank senior to the Series C Preferred Stock.

Section 4. Mandatory Redemption.

(A) Subject to the New Jersey Business Corporation Act, unless no shares of the Series C Preferred Stock are outstanding, on the date that is ninety-one (91) days following the fifth (5th) anniversary of the Original Issue Date (the “Mandatory Redemption Date”), the Company shall redeem from funds legally available therefor all shares of Series C Preferred Stock at a redemption price equal to the Liquidation Preference plus accrued and unpaid Preferred Dividends and accrued and unpaid Participating Dividends to, but excluding the redemption date (the “Mandatory Redemption Price”) which shall be payable in cash to the Holders of the Series C Preferred Stock; provided that, at any time prior to the Mandatory Redemption Date, the Holders of at least a majority of the Series C Preferred Stock may unilaterally extend the Mandatory Redemption Date by up to two (2) years after the originally scheduled Mandatory Redemption Date by submitting notice to the Company substantially in the form of Exhibit C attached hereto specifying the length of such extension.

Section 5. Voluntary Conversion.

(A) Each Holder of Series C Preferred Stock shall have the right at any time, at its option, to convert, subject to the terms and provisions of this Section 5, any or all of such Holder’s shares of Series C Preferred Stock into the number of fully paid and non-assessable shares of Common Stock equal to the product of (x) the Conversion Rate multiplied by (y) the Liquidation Preference per share of Series C Preferred Stock (such number of Common Shares into which a share of Series C Preferred Stock may be converted, the “Conversion Shares”). Upon conversion of any share of Series C Preferred Stock, the Company shall deliver to the converting Holder, in respect of each share of Series C Preferred Stock being converted, the Conversion Shares, together with a (i) cash payment in lieu of any fractional share of Common Stock in accordance with Section 13, (ii) any Preferred Dividend payable pursuant to Section 2(G) and (iii) any Participating Dividends accrued in respect of the shares of Series C Preferred Stock being converted, as soon as practicable and in any event on or before the third Trading Day immediately following the relevant Conversion Date, which in the case of clause (ii) shall be payable in either cash or a number of additional shares of Common Stock equal to the product of (x) the Conversion Rate multiplied by (y) the amount of the Dividend payable, as the Company may elect, and in the case of clause (iii) shall be payable in the same form as the dividend or distribution that was paid to the holders of Common Stock that gave rise to such Participating Dividends.

(B) Before any Holder shall be entitled to convert a share of Series C Preferred Stock as set forth above, such Holder shall (i) complete, manually sign and deliver an irrevocable notice to the Company (or such other conversion or transfer agent as the Company may designate to the Holders from time to time) as set forth in the Form of Notice of Conversion

 

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(or a facsimile thereof) substantially in the form of Exhibit B hereto (a “Notice of Conversion”) and state in writing therein the number of shares of Series C Preferred Stock to be converted and the name or names (with addresses) in which such Holder wishes the certificate or certificates for any shares of Common Stock to be delivered to be registered, and (ii) (a) in the case of Series C Preferred Stock in fully registered certificated form (“Certificated Preferred Stock”), surrender such shares of Series C Preferred Stock at the office of the Transfer Agent, together with any required appropriate endorsements and transfer documents or (b) in the case of a non-certificated book entry interest in the Series C Preferred Stock, comply with such other customary policies and procedures as the Company or its Transfer Agent may require from time to time. The date on which a Holder complies with the procedures in this clause (B) is the “Conversion Date.” If more than one share of Series C Preferred Stock shall be surrendered for conversion at one time by the same Holder, the number of shares of Common Stock to be delivered upon conversion of such shares of Series C Preferred Stock shall be computed on the basis of the aggregate number of shares of Series C Preferred Stock so surrendered.

(C) Immediately prior to the close of business on the Conversion Date with respect to a conversion, a converting Holder of Series C Preferred Stock shall be deemed to be the holder of record of the Common Stock issuable upon conversion of such Holder’s Series C Preferred Stock notwithstanding that the share register of the Company shall then be closed or that certificates representing such Common Stock shall not then be actually delivered to such Holder or book entry positions be created. On the date of any conversion, all rights with respect to the shares of Series C Preferred Stock so converted, including the rights, if any, to receive notices, will terminate, excepting only the rights of holders thereof to (i) receive certificates for the number of whole shares of Common Stock into which such shares of Series C Preferred Stock have been converted (with a cash payment in lieu of any fractional share of Common Stock in accordance with Section 13); (ii) exercise the rights to which they are thereafter entitled as holders of the Common Stock; (iii) receive any Preferred Dividend payable notwithstanding the conversion; and (iv) receive any Participating Dividends payable upon conversion.

(D) The Conversion Rate shall be adjusted, without duplication, upon the occurrence of any of the following events:

(i) If the Company exclusively issues shares of Common Stock as a dividend or distribution on all shares of its Common Stock, or if the Company effects a share split or share combination, the Conversion Rate shall be adjusted based on the following formula:

 

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where,

CR0 = the Conversion Rate in effect immediately prior to the close of business on the Record Date for such dividend or distribution, or immediately prior to the open of business on the Effective Date of such share split or share combination, as the case may be;

 

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CR1 = the Conversion Rate in effect immediately after the close of business on the Record Date for such dividend or distribution, or immediately after the open of business on the Effective Date of such share split or share combination, as the case may be;

OS0 = the number of shares of Common Stock outstanding immediately prior to the close of business on the Record Date for such dividend or distribution, or immediately prior to the open of business on the Effective Date of such share split or share combination, as the case may be; and

OS1 = the number of shares of Common Stock outstanding immediately after giving effect to such dividend or distribution, or such share split or share combination, as the case may be.

Any adjustment made under this Section 5(D)(i) shall become effective immediately after the close of business on the Record Date for such dividend or distribution, or immediately after the open of business on the Effective Date for such share split or share combination, as the case may be. If any dividend or distribution of the type described in this Section 5(D)(i) is declared but not so paid or made, the Conversion Rate shall be immediately readjusted, effective as of the date the Board determines not to pay such dividend or distribution, to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.

(ii) If the Company distributes to all or substantially all holders of its Common Stock any rights, options or warrants entitling them, for a period expiring not more than 45 days immediately following the announcement date of such distribution, to purchase or subscribe for shares of its Common Stock at a price per share that is less than the average of the Closing Sale Prices of the Common Stock over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Ex-Date of such distribution, the Conversion Rate shall be increased based on the following formula:

 

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where,

CR0 = the Conversion Rate in effect immediately prior to the close of business on the Record Date for such distribution;

CR1 = the Conversion Rate in effect immediately after the close of business on the Record Date for such distribution;

OS0 = the number of shares of Common Stock outstanding immediately prior to the close of business on the Record Date for such distribution;

X = the total number of shares of Common Stock issuable pursuant to such rights, options or warrants; and

 

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Y = the number of shares of Common Stock equal to the aggregate price payable to exercise such rights, options or warrants, divided by the average of the Closing Sale Prices of the Common Stock over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Ex-Date of such distribution.

Any increase made under this Section 5(D)(ii) shall be made successively whenever any such rights, options or warrants are distributed and shall become effective immediately after the close of business on the Record Date for such distribution. To the extent that shares of Common Stock are not delivered after the expiration of such rights, options or warrants, the Conversion Rate shall be readjusted, effective as of the date of such expiration, to the Conversion Rate that would then be in effect had the increase with respect to the distribution of such rights, options or warrants been made on the basis of delivery of only the number of shares of Common Stock actually delivered. If such rights, options or warrants are not so distributed, the Conversion Rate shall be decreased, effective as of the date the Board determines not to make such distribution, to be the Conversion Rate that would then be in effect if such Record Date for such distribution had not occurred. If such rights, options or warrants are only exercisable upon the occurrence of certain triggering events, then the Conversion Rate shall not be adjusted until the triggering events occur.

For purposes of this Section 5(D)(ii), in determining whether any rights, options or warrants entitle the holders to subscribe for or purchase shares of Common Stock at less than such average of the Closing Sale Prices of the Common Stock for the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Ex-Date of such distribution, and in determining the aggregate offering price of such shares of Common Stock, there shall be taken into account any consideration received by the Company for such rights, options or warrants and any amount payable on exercise or conversion thereof, the value of such consideration, if other than cash, to be determined by the Board.

(iii) If the Company makes distributions to all or substantially all holders of its Common Stock consisting of shares of its Capital Stock, evidence of indebtedness or other assets or properties, excluding:

(1) dividends or other distributions (including share splits), rights, options or warrants as to which an adjustment is effected in clause (i) or (ii) above or in clause (iv) below;

(2) dividends or other distributions that constitute Exchange Property following a Reorganization Event;

(3) dividends or distributions in cash or other dividends or other distributions in respect of which the Holders will be entitled to receive a Participating Dividend upon the conversion of their shares of Series C Preferred Stock pursuant to Section 2(A); and

 

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(4) spin-offs to which the provisions set forth below in this Section 5(D)(iii) shall apply,

the Conversion Rate shall be increased based on the following the formula:

 

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where:

CR0 = the Conversion Rate in effect immediately prior to the close of business on the Record Date for such distribution;

CR1 = the Conversion Rate in effect immediately after the close of business on the Record Date for such distribution;

M = the average of the Closing Sale Prices of the Common Stock for the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Ex-Date for such distribution; and

F = the fair market value, as determined by the Board, of the portion of the evidence of indebtedness or other assets or properties to be distributed in respect of each share of Common Stock immediately prior to the open of business on the Ex-Date for such distribution.

Any increase pursuant to this Section 5(D)(iii) shall become effective immediately after the close of business on the Record Date for such distribution. If such distribution is not so paid or made, the Conversion Rate shall be decreased, effective as of the date the Board determines not to pay or make such distribution, to be the Conversion Rate that would then be in effect if such distribution had not been declared.

Notwithstanding the foregoing, if “F” (as defined above) is equal to or greater than “M” (as defined above), in lieu of the foregoing increase, each Holder of Preferred Stock shall receive, for each share of Series C Preferred Stock, at the same time and upon the same terms as holders of the Common Stock, the amount of cash that such Holder would have received as if such Holder owned a number of shares of Common Stock equal to the Conversion Rate on the Record Date for such distribution.

With respect to an adjustment pursuant to this Section 5(D)(iii) where there has been a payment of a dividend or other distribution of the Common Stock in shares of capital stock of any class or series, or similar equity interest, of or relating to a subsidiary or other business unit, where such capital stock or similar equity interest is listed or quoted (or will be listed or quoted upon consummation of the spin-off) on a U.S. national securities exchange, which is referred to herein as a “Spin-off,” the Conversion Rate will be increased based on the following formula:

 

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where:

CR1 = the Conversion Rate in effect immediately after the open of business on the effective date for the Spin-off;

CR0 = the Conversion Rate in effect immediately prior to the open of business on the effective date for the Spin-off;

F = the average of the Closing Sale Prices of the capital stock or similar equity interest distributed to holders of Common Stock applicable to one share of Common Stock over the first 10 consecutive Trading Day period immediately following, and including, the effective date for the Spin-off (such period, the “Valuation Period”); and

MP = the average of the Closing Sale Prices of the Common Stock over the Valuation Period.

The adjustment to the Conversion Rate under the preceding paragraph of this Section 5(D)(iii) will become effective immediately after the open of business on the day after the last day of the Valuation Period. For purposes of determining the Conversion Rate in respect of any conversion during the 10 Trading Days commencing on the effective date for any Spin-off, references within the portion of this Section 5(D)(iii) related to Spin-offs to 10 consecutive Trading Days shall be deemed replaced with such lesser number of Trading Days as have elapsed from, and including, the effective date for such Spin-off to, but excluding, the relevant Conversion Date.

(iv) If the Company or any of its subsidiaries makes a payment in respect of a tender offer or exchange offer for the Common Stock and the cash and value of any other consideration included in the payment per share of the Common Stock exceeds the average of the Closing Sale Price of the Common Stock over the 10 consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer, the Conversion Rate shall be increased based on the following formula:

 

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where,

CR0 = the Conversion Rate in effect immediately prior to the close of business on the last Trading Day of the 10 consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the date such tender or exchange offer expires;

CR1 = the Conversion Rate in effect immediately after the close of business on the last Trading Day of the 10 consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the date such tender or exchange offer expires;

 

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AC = the aggregate value of all cash and any other consideration (as determined by the Board) paid or payable for shares of Common Stock purchased in such tender or exchange offer;

OS0 = the number of shares of Common Stock outstanding immediately prior to the date such tender or exchange offer expires (prior to giving effect to the purchase of all shares of Common Stock accepted for purchase or exchange in such tender or exchange offer);

OS1 = the number of shares of Common Stock outstanding immediately after the date such tender or exchange offer expires (after giving effect to the purchase of all shares of Common Stock accepted for purchase or exchange in such tender or exchange offer); and

SP1 = the average of the Closing Sale Prices of the Common Stock over the 10 consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the date such tender or exchange offer expires.

The increase to the Conversion Rate under this Section 5(D)(iv) shall occur at the close of business on the 10th Trading Day immediately following, and including, the Trading Day next succeeding the date such tender or exchange offer expires; provided that, for purposes of determining the Conversion Rate, in respect of any conversion during the 10 Trading Days immediately following, and including, the Trading Day next succeeding the date that any such tender or exchange offer expires, references within this Section 5(D)(iv) to 10 consecutive Trading Days shall be deemed to be replaced with such lesser number of consecutive Trading Days as have elapsed between the date such tender or exchange offer expires and the relevant Conversion Date.

In the event that the Company or one of its subsidiaries is obligated to purchase shares of Common Stock pursuant to any such tender offer or exchange offer, but the Company or such subsidiary is permanently prevented by applicable law from effecting any such purchases, or all such purchases are rescinded, then the Conversion Rate shall be readjusted to be such Conversion Rate that would then be in effect if such tender offer or exchange offer had not been made. For the avoidance of doubt, this Section 5(D)(iv) shall not apply if the Company otherwise acquires shares of Common Stock, including, but not limited to, through an open market purchase in compliance with Rule 10b-18 promulgated under the Exchange Act or through an “accelerated share repurchase” on customary terms.

(v) All calculations and other determinations under this Section 5(D) shall be made by the Company and shall be made to the nearest one-ten thousandth (1/10,000th) of a share. No adjustment to the Conversion Rate shall be made if it results in a Conversion Price that is less than the par value (if any) of the Common Stock. The Company shall not take any action that would result in the Conversion Price being less than the par value (if any) of the Common Stock pursuant to this Certificate of Amendment and without giving effect to the previous sentence.

 

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(vi) In addition to those adjustments required by clauses (i), (ii), (iii) and (iv) of this Section 5(D), and to the extent permitted by applicable law and subject to the applicable rules of the New York Stock Exchange, the Company from time to time may (but is not required to) increase the Conversion Rate by any amount for a period of at least 20 Business Days or any longer period permitted or required by law if the increase is irrevocable during that period and the Board determines that such increase would be in the Company’s best interest. In addition, the Company may (but is not required to) increase the Conversion Rate to avoid or diminish any income tax to holders of the Common Stock or rights to purchase Common Stock in connection with a dividend or distribution of shares (or rights to acquire shares) or similar event. Whenever the Conversion Rate is increased pursuant to any of the preceding two sentences, the Company shall mail to the Holder of each share of Series C Preferred Stock at its last address appearing on the stock register of the Company a notice of the increase at least 15 days prior to the date the increased Conversion Rate takes effect, and such notice shall state the increased Conversion Rate and the period during which it will be in effect.

(E) If any applicable law requires the deduction or withholding of any tax from any payment or deemed dividend to a Holder on its Series C Preferred Stock or Common Stock, the Company or an applicable withholding agent may withhold on cash dividends, shares of Series C Preferred Stock or Common Stock or sale proceeds paid, subsequently paid or credited with respect to such Holder or such Holder’s successors and assigns.

(F) The Company shall at all times have authorized and reserve and keep available for issuance (i) 435,000 shares of Series C Preferred Stock to issue PIK Shares, less the number of PIK Shares issued from time to time following the Original Issue Date and (ii) such maximum number of its authorized but unissued and otherwise unreserved shares of Common Stock as will from time to time be sufficient to permit the conversion of 120% of all outstanding shares of Series C Preferred Stock, and all PIK Shares reserved pursuant to clause (i) above) together with any Additional Shares in connection with a Fundamental Change) and shall take all action required to increase the authorized number of shares of Series C Preferred Stock and Common Stock if at any time there shall be insufficient unissued shares of Series C Preferred Stock or Common Stock to permit such reservation.

(G) The issuance or delivery of certificates for Common Stock upon the conversion of shares of Series C Preferred Stock shall be made without charge to the converting holder or recipient of shares of Series C Preferred Stock for such certificates or for any documentary, stamp or similar issue or transfer tax in respect of the issuance or delivery of such certificates or the securities represented thereby, and such certificates shall be issued or delivered in the respective names of, or in such names as may be directed by, the holders of the shares of Series C Preferred Stock converted; provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of any such certificate in a name other than that of the holder of the shares of the relevant Series C Preferred Stock and the Company shall not be required to issue or deliver such certificate unless or until the Person or Persons requesting the issuance or delivery thereof shall have paid to the Company the amount of such tax or shall have established to the reasonable satisfaction of the Company that such tax has been paid.

 

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(H) Notwithstanding Section 5(D)(ii), if the Company has a rights plan (including the distribution of rights pursuant thereto to all holders of the Common Stock) in effect while any shares of Series C Preferred Stock remain outstanding, Holders of Series C Preferred Stock will receive, upon conversion of Series C Preferred Stock, in addition to the Common Stock to which such Holder is entitled, a corresponding number of rights in accordance with the rights plan. If, prior to any conversion, such rights have separated from the shares of Common Stock in accordance with the provisions of the applicable rights plan so that Holders of Series C Preferred Stock would not be entitled to receive any rights in respect of the Common Stock delivered upon conversion of Series C Preferred Stock, the Conversion Rate will be adjusted at the time of separation as if the Company had distributed to all holders of its Common Stock, shares of Capital Stock covered by the separated rights, subject to readjustment in the event of the expiration, termination or redemption of such rights.

Section 6. Mandatory Conversion.

(A) At any time on or after the second (2nd) anniversary of the Original Issue Date, the Company shall have the right, at its option, to give notice of its election to cause all outstanding shares of Series C Preferred Stock to be automatically converted into that number of whole shares of Common Stock for each share of Series C Preferred Stock equal to the Conversion Shares (based on the Conversion Rate in effect on the Mandatory Conversion Date), with cash in lieu of any fractional share pursuant to Section 13. The Company may exercise its right to cause a mandatory conversion pursuant to this Section 6 only if the Closing Sale Price of the Common Stock equals or exceeds (i) at any time on or after the second (2nd) anniversary of the Original Issue Date but before the third (3rd) anniversary of the Original Issue Date, 200% of the Conversion Price or (ii) at any time on or after the third (3rd) anniversary of the Original Issue Date, 150% of the Conversion Price, in each case, for at least 45 Trading Days (whether or not consecutive) in a period of 60 consecutive Trading Days, including the last Trading Day of such 60-day period, ending on, and including, the Trading Day immediately preceding the Business Day on which the Company issues a press release announcing the mandatory conversion as described in Section 6(B).

(B) To exercise the mandatory conversion right described in Section 6(A), the Company shall publish such information on the Company’s website or through such other public medium as the Company may use at that time, prior to the open of business on the first Trading Day following any date on which the Company makes a conversion election pursuant to Section 6(A), announcing such a mandatory conversion. The Company shall also give notice by mail to the Holders of the Series C Preferred Stock (not later than three Business Days after the date of the press release) of the mandatory conversion announcing the Company’s intention to convert the Series C Preferred Stock. The conversion date will be a date selected by the Company (the “Mandatory Conversion Date”) and will be no later than 30 calendar days after the date on which the Company issues the press release described in this Section 6(B).

 

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(C) In addition to any information required by applicable law or regulation, the press release and notice of a mandatory conversion described in Section 6(B) shall state, as appropriate: (i) the Mandatory Conversion Date; (ii) the number of shares of Common Stock to be issued upon conversion of each share of Series C Preferred Stock; and (iii) that Dividends on the Series C Preferred Stock to be converted will cease to accrue on the Mandatory Conversion Date.

(D) On and after the Mandatory Conversion Date, Dividends shall cease to accrue on the Series C Preferred Stock called for a mandatory conversion pursuant to this Section 6 and all rights of Holders of such Series C Preferred Stock shall terminate except for the right to receive the Conversion Shares, together with a (i) cash payment in lieu of any fractional share of Common Stock in accordance with Section 13, (ii) any Preferred Dividend payable pursuant to Section 2(G) and (iii) any Participating Dividends accrued in respect of the shares of Series C Preferred Stock being converted, which, in the case of clause (ii) shall be payable in either cash or a number of additional shares of Common Stock equal to the product of (x) the Conversion Rate multiplied by (y) the amount of the Dividend payable, as the Company may elect, and in the case of clause (iii) shall be payable in the same form as the dividend or distribution that was paid to the holders of Common Stock that gave rise to such Participating Dividends. Except as provided above with respect to a mandatory conversion pursuant to this Section 6, no payment or adjustment shall be made upon mandatory conversion of Series C Preferred Stock for accumulated Dividends or dividends with respect to the Common Stock issued upon such mandatory conversion thereof.

(E) The Company may not authorize, issue a press release or give notice of any mandatory conversion pursuant to this Section 6 unless, prior to giving the conversion notice, all accumulated Preferred Dividends on the Series C Preferred Stock (whether or not declared) for periods ended prior to the date of such conversion notice shall have been paid in the form of PIK Shares or Additional Liquidation Preference.

(F) On the Mandatory Conversion Date, each Holder shall (a) in the case of Certificated Preferred Stock, surrender the certificates representing such shares of Series C Preferred Stock at the office of the Transfer Agent, together with any required appropriate endorsements and transfer documents or (b) in the case of a non-certificated book entry interest in the Series C Preferred Stock, comply with such other customary policies and procedures as the Company or its Transfer Agent may require from time to time.

Section 7. Conversion upon a Fundamental Change.

(A) Upon any conversion during the period (the “Fundamental Change Conversion Period”) beginning on a Fundamental Change Effective Date and ending on the date that is 30 days after such Fundamental Change Effective Date (the “Expiration Date”), each Holder of Series C Preferred Stock shall receive, for each share of Series C Preferred Stock converted, either, at its election, (i) a number of shares of the Company’s Common Stock equal to the product of (x) the Liquidation Preference in respect of such share multiplied by (y) the Conversion Rate, plus (a) a number of Additional Shares, if any, per $100 of Liquidation Preference or (b) cash in an amount equal to the value of such Additional Shares based on the Market Value of the Common Stock, or (ii) a number of shares of the Company’s Common Stock equal to the product of (x) the Liquidation Preference in respect of such share multiplied by (y) the Conversion Rate, which Conversion Rate will be increased to equal the quotient

 

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obtained by dividing (A) one by (B) the Market Value of the Common Stock. Notwithstanding the foregoing, the Conversion Rate as adjusted as described in clause (A)(ii) will not exceed 18.00 shares of Common Stock per share of Series C Preferred Stock (subject to adjustment in the same manner as the Conversion Rate as provided in Section 5).

(B) In addition to the number of shares of the Company’s Common Stock issuable upon conversion of each share of Series C Preferred Stock on any Conversion Date during the Fundamental Change Conversion Period, each converting Holder shall have the right to receive additional dividends equal to the sum of:

(i) all accrued, accumulated and unpaid Dividends on such converted shares of Series C Preferred Stock, whether or not declared prior to that date, for all prior Dividend Periods ending on or prior to the Dividend Payment Date immediately preceding the Conversion Date (other than previously declared Dividends on the Series C Preferred Stock payable to holders of record as of a prior date) plus

(ii) an amount equal to the present value at the Conversion Date of all required remaining scheduled Preferred Dividend Payments on such share of Series C Preferred Stock (including any such Preferred Dividend Payments that would accrue with respect to any PIK Shares issuable after such Conversion Date) (and assuming that the Holders have not exercised their extension option pursuant to Section 4 hereof), computed using a discount rate equal to 5.0% per annum (the “Dividend Make-Whole Amount”).

The amount payable in respect of such dividends shall be payable, at the Company’s option in either cash or a number of additional shares of Common Stock equal to the product of (x) the Conversion Rate (which, if the Holder has elected to convert as set forth in Section 7(A)(ii) above, shall be as adjusted pursuant to Section 7(A)(ii) above) multiplied by (y) the amount of such dividends.

(C) The Company must give notice (a “Fundamental Change Notice”) of each Fundamental Change to all record holders of the Series C Preferred Stock by the later of 20 days prior to the anticipated Fundamental Change Effective Date (determined in good faith by the Board) and the first public disclosure by the Company of the anticipated Fundamental Change, if practicable, and otherwise by the earliest practicable date, of the anticipated Fundamental Change Effective Date. The Fundamental Change Notice shall be given by first-class mail to each record holder of shares of Series C Preferred Stock, at such holder’s address as the same appears on the books of the Company or the Transfer Agent. Each such Fundamental Change Notice shall state (i) the anticipated Fundamental Change Effective Date; (ii) the Expiration Date based on the anticipated Fundamental Change Effective Date; (iii) the amount of cash, securities and other consideration that would be paid per share of Common Stock or Series C Preferred Stock, respectively, as a result of the Fundamental Change, (iv) the adjusted Conversion Rate applicable to Section 7(B)(ii) if Holders elected to receive shares pursuant thereto, (v) the name and address of the Transfer Agent; (vi) whether accumulated and unpaid Dividends will be paid in cash, shares of the Company’s Common Stock or a combination thereof; and (vii) the procedures that holders must follow to convert their shares of Series C Preferred Stock pursuant to this Section 7.

 

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(D) On or before the Expiration Date, each holder of shares of Series C Preferred Stock wishing to exercise its conversion right pursuant to this Section 7 shall comply with the procedures set forth in Section 5(B), and on such date the shares of the Company’s Common Stock and the payment for unpaid Dividends due to such holder (if applicable) shall be delivered to the Person whose name appears on the surrendered certificate or certificates as the owner thereof. Notwithstanding anything herein to the contrary, Holders of the Series C Preferred Stock may make an election to convert the Series C Preferred Stock contingent on the consummation of the Fundamental Change

Section 8. Additional Shares upon a Fundamental Change.

(A) For Holders who elect to convert shares of Series C Preferred Stock pursuant to Section 7(A)(i) during the Fundamental Change Conversion Period, the additional number of shares of the Company’s Common Stock issuable for each share of Series C Preferred Stock so converted (the “Additional Shares”), if any, is set forth below in this Section 8.

(B) The number of Additional Shares shall be determined by reference to the table below, based on the Fundamental Change Effective Date and the Fundamental Change Stock Price.

Fundamental Change Stock Price

 

Fundamental
    Change
                                                                                   

Effective Date

   $ 8.25      $ 9.25      $ 10.00      $ 12.50      $ 15.00      $ 17.50      $ 20.00      $ 22.50      $ 25.00      $ 27.50      $ 30.00      $ 32.50  

February 26, 2021

     2.1212        1.7309        1.5056        1.0128        0.7407        0.5776        0.4732        0.4023        0.3516        0.3136        0.2839        0.2600  

February 26, 2022

     2.1212        1.6057        1.3615        0.8342        0.5497        0.3865        0.2904        0.2325        0.1962        0.1718        0.1544        0.1410  

February 26, 2023

     2.1212        1.6057        1.3569        0.7616        0.4516        0.2660        0.0000        0.0000        0.0000        0.0000        0.0000        0.0000  

February 26, 2024

     2.1212        1.5785        1.2757        0.6175        0.0000        0.0000        0.0000        0.0000        0.0000        0.0000        0.0000        0.0000  

February 26, 2025

     2.1212        1.4488        1.1254        0.5183        0.0000        0.0000        0.0000        0.0000        0.0000        0.0000        0.0000        0.0000  

February 26, 2026

     2.1212        0.8108        0.0000        0.0000        0.0000        0.0000        0.0000        0.0000        0.0000        0.0000        0.0000        0.0000  

(C) The Fundamental Change Stock Prices set forth in the first row of the foregoing table (and the corresponding price set forth in clauses 8(D)(ii) and (iii) below) shall be adjusted as of any date on which the Conversion Rate is adjusted. The adjusted Fundamental Change Stock Prices (and the corresponding price set forth in clauses 8(D)(ii) and (iii) below) shall equal the Fundamental Change Stock Prices applicable immediately prior to such adjustment multiplied by a fraction, the numerator of which is the Conversion Rate immediately prior to the adjustment giving rise to the Fundamental Change Stock Price adjustment and the denominator of which is the Conversion Rate as so adjusted.

(D) The exact Fundamental Change Stock Price and Fundamental Change Effective Dates may not be set forth on the table, in which case:

(i) if the Fundamental Change Stock Price is between two Fundamental Change Stock Price amounts on the table or the Fundamental Change Effective Date is between two Fundamental Change Effective Dates on the table, the number of Additional Shares shall be determined by straight-line interpolation between the Additional Shares amounts set forth for the higher and lower Fundamental Change Stock Price amounts and the two dates, as applicable, based on a 365-day year;

 

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(ii) if the Fundamental Change Stock Price is in excess of $32.50 per share (subject to adjustment as described above), then no Additional Shares shall be added to the Conversion Rate; and

(iii) if the Fundamental Change Stock Price is less than $8.25 per share (subject to adjustment as described above), then 2.1212 Additional Shares shall be added to the Conversion Rate.

(E) The Company shall only be required to deliver the Additional Shares and the Dividend Make-Whole Amount with respect to shares of Series C Preferred Stock surrendered for conversion during any Fundamental Change Conversion Period.

Section 9. Reorganization Events.

(A) In the event of:

(i) any recapitalization, reclassification or change of the Common Stock (other than changes resulting from a subdivision or combination);

(ii) any consolidation, merger or combination involving the Company;

(iii) any sale, lease or other transfer to a third party of the consolidated assets of the Company and the Company’s subsidiaries substantially as an entirety; or

(iv) any statutory share exchange,

in each case, as a result of which the Common Stock is converted into, or exchanged for, stock, other securities, other property or assets (including cash or any combination thereof), each of which is herein referred to as a “Reorganization Event,” each share of the Series C Preferred Stock outstanding immediately prior to such Reorganization Event will become convertible into the kind and amount of securities, cash and other property or assets that a holder (that was not the counterparty to the Reorganization Event or an affiliate of such other party) of a number of shares of Common Stock equal to the product of (x) Conversion Rate multiplied by (y) the Liquidation Preference per share of the Series C Preferred Stock prior to the Reorganization Event would have owned or been entitled to receive upon the Reorganization Event (the “Exchange Property”).

(B) Upon any conversion during the period following a Reorganization Event and ending on the date that is 30 days after such Reorganization Event, each Holder of Series C Preferred Stock may elect to receive, for each share of Series C Preferred Stock converted, a number of shares of Common Stock equal to product of (x) the Liquidation Preference in respect of such share multiplied by (y) the Conversion Rate, which will be increased to equal the quotient obtained by dividing (A) one by (B) the Market Value of the Common Stock, provided that such Conversion Rate set forth in this clause (B) will not exceed 18.00 shares of Common Stock per share of Series C Preferred Stock (subject to adjustment in the same manner as the Conversion Rate as provided in Section 5).

 

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(C) In addition, in any Reorganization Event where (i) the Exchange Price (as defined in Section 16) is below $9.19 and there is a Change of Control, or (ii) when there is a Fundamental Change, the Company will have the right to require Holders of the Series C Preferred Stock to convert each share of the Series C Preferred Stock outstanding immediately prior to such Reorganization Event into a number of shares of Common Stock equal to the product of (x) the Liquidation Preference in respect of such share multiplied by (y) the Conversion Rate, which will be increased to equal the quotient obtained by dividing (A) one by (B) the Market Value of the Common Stock, provided that the Conversion Rate set forth in this clause (C) will not exceed 27.00 shares of Common Stock per share of Series C Preferred Stock (subject to adjustment in the same manner as the Conversion Rate as provided in Section 5).

Section 10. Voting Rights.

(A) For so long as the Initial Purchaser holds more than fifty percent (50%) of the shares of Series C Preferred Stock initially issued to the Initial Purchaser, the prior approval of the Initial Purchaser shall be required for repayments and redemptions with respect to Junior Stock or shares of any class or series of stock pari passu with or senior to the Series C Preferred Stock (including the Series B Preferred Stock); provided that repayments and redemptions shall be permitted to the extent that the Holders are afforded the opportunity to participate in such repayment or redemption on a pro rata as-converted basis with the Common Stock and the Series B Preferred Stock, as applicable, as at the time of such repayment or redemption; provided, further that the prior approval of the Initial Purchaser shall not be required for (i) redemptions, purchases or other acquisitions of shares of Junior Stock or shares of any class or series of stock pari passu with or senior to the Series C Preferred Stock in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of any one or more employees, officers, directors, managers or consultants of, or to, the Company or any of its subsidiaries, (ii) an exchange, reclassification or conversion of any class or series of Junior Stock or shares of any class or series of stock pari passu with or senior to the Series C Preferred Stock for any class or series of Junior Stock that ranks equal or junior to the applicable Junior Stock or (iii) any dividend in the form of stock, warrants, options or other rights where the dividended stock or the stock issuable upon exercise of such warrants, options or other rights is the same stock as that on which the dividend is being paid or ranks equal or junior to the applicable Junior Stock.

(B) For so long any shares of Series C Preferred Stock remain outstanding, unless a greater percentage shall be required by law, the affirmative vote or consent of the Holders of more than 66 2/3% of the outstanding shares of Series C Preferred Stock, in person or by proxy, at an annual meeting of the Company’s shareholders or at a special meeting called for such purpose, or by written consent in lieu of such meeting, shall be required to alter, repeal or amend, whether by merger, consolidation, combination, reclassification or otherwise, any provisions of the Second Amended and Restated Certificate of Incorporation, this Certificate of Amendment establishing the Series C Preferred Stock, or the Fourth Amended and Restated By-laws of the Company, as amended, if the amendment would amend, alter or affect the voting rights, dividend rights, preferences or special rights of the Series C Preferred Stock so as to adversely affect the Holders thereof, including, without limitation, (i) any change to the Series B Preferred Stock that adversely affects the Series C Preferred Stock or (ii) the creation of, increase in the authorized number of, or issuance of, shares of any class or series of stock pari passu with

 

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or senior to the Series C Preferred Stock, or security convertible into such capital stock; provided that the Company may issue, without obtaining the vote or consent of any Holder, up to $100,000,000 in aggregate liquidation preference outstanding from time to time (as may be increased by the amount of any dividends paid in kind thereon) of additional preferred stock that is pari passu with the Series C Preferred Stock, on such terms as the Company may designate (including the Series B Preferred Stock issued on the Original Issue Date).

(C) Except to the extent expressly provided herein, no vote or consent of the Holders of the Series C Preferred Stock shall be required to alter, repeal or amend, whether by merger, consolidation, combination, reclassification or otherwise, any provisions of the Second Amended and Restated Certificate of Incorporation, this Certificate of Amendment establishing the Series C Preferred Stock, or the Fourth Amended and Restated By-laws of the Company.

(D) Holders of shares of Series C Preferred Stock shall be entitled to vote as a single class with the holders of the Common Stock and the holders of any other class or series of Capital Stock of the Company then entitled to vote with the Common Stock as a single class on all matters submitted to a vote of the holders of Common Stock (and, if applicable, holders of any other class or series of Capital Stock of the Corporation). The holders of the Series C Convertible Preferred Stock shall be entitled to notice of all stockholders’ meetings in accordance with the Company’s bylaws in the election of directors and as otherwise required by applicable law. Holders of Series C Preferred Stock shall be entitled to the number of votes equal to the number of full shares of Common Stock into which such shares of Series C Preferred Stock could be converted at the record date for the determination of shareholders entitled to vote on such matters, or if no such record date is established, at the date such vote is taken or any written consent of the shareholders is solicited.

(E) Except as set forth in this Section 10, Holders have no voting rights and their consent shall not be required for taking any corporate action.

Section 11. [Reserved].

Section 12. [Reserved].

Section 13. No Fractional Shares. No fractional shares of Common Stock or securities representing fractional shares of Common Stock shall be delivered upon conversion, whether voluntary or mandatory, of the Series C Preferred Stock. Instead, the Company will either (i) make a cash payment to each Holder that would otherwise be entitled to a fractional share based on the Conversion Price of the Common Stock on the relevant Conversion Date or (ii) round up to the nearest whole share, at the Company’s option.

 

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Section 14. Certificates. Notwithstanding any reference above or elsewhere herein to any certificates representing the Series C Preferred Stock, the Series C Preferred Stock may be recorded solely in book entry form, and in such case any references hereto to certificates representing the Series C Preferred Stock being required to be delivered or provided in certain instances shall be deemed automatically waived, and such book entry records shall take the place thereof.

(A) Form and Dating. In the event the Company elects to issue the Series C Preferred Stock in certificated form, the certificates representing the Series C Preferred Stock and the Transfer Agent’s certificate of authentication shall be substantially in the form set forth in Exhibit A. The Series C Preferred Stock certificate may have notations, legends or endorsements required by law or stock exchange rules; provided that any such notation, legend or endorsement is in a form acceptable to the Company. Each Series C Preferred Stock certificate shall be dated the date of its authentication.

(B) Execution and Authentication. The Chief Executive Officer or the President or a Vice President and the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the Company shall sign the Series C Preferred Stock certificate for the Company by manual or facsimile signature.

If an Officer whose signature is on a Series C Preferred Stock certificate no longer holds that office at the time the Transfer Agent authenticates the Series C Preferred Stock certificate, the Series C Preferred Stock certificate shall be valid nevertheless.

A Series C Preferred Stock certificate shall not be valid until an authorized signatory of the Transfer Agent manually signs the certificate of authentication on the Series C Preferred Stock certificate. The signature shall be conclusive evidence that the Series C Preferred Stock certificate has been authenticated under this Certificate of Amendment.

The Transfer Agent shall authenticate and deliver certificates for up to 1,435,000 shares of Series C Preferred Stock for original issue and the issuance of PIK Shares upon a written order of the Company signed by an Officer of the Company (or such greater number of Officers as may be required by law). Such order shall specify the number of shares of Series C Preferred Stock to be authenticated and the issuance date of the Series C Preferred Stock to be authenticated.

The Transfer Agent may appoint an authenticating agent reasonably acceptable to the Company to authenticate the certificates for the Series C Preferred Stock. Unless limited by the terms of such appointment, an authenticating agent may authenticate certificates for the Series C Preferred Stock whenever the Transfer Agent may do so. Each reference in this Certificate of Amendment to authentication by the Transfer Agent includes authentication by such agent. An authenticating agent has the same rights as the Transfer Agent or agent for service of notices and demands.

 

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(C) Transfer and Exchange.

(i) Transfer and Exchange of Certificated Preferred Stock. When Certificated Preferred Stock is presented to the Transfer Agent with a request to register the transfer of such Certificated Preferred Stock or to exchange such Certificated Preferred Stock for an equal number of shares of Certificated Preferred Stock, the Transfer Agent shall register the transfer or make the exchange as requested if its reasonable requirements for such transaction are met; provided that the Certificated Preferred Stock surrendered for transfer or exchange shall be duly endorsed or accompanied by a written instrument of transfer in form reasonably satisfactory to the Company and the Transfer Agent, duly executed by the Holder thereof or its attorney duly authorized in writing.

(ii) Obligations with Respect to Transfers and Exchanges of Series C Preferred Stock.

(1) To permit registrations of transfers and exchanges, the Company shall execute and the Transfer Agent shall authenticate Certificated Preferred Stock as required pursuant to the provisions of this Section 14(C).

(2) All Certificated Preferred Stock issued upon any registration of transfer or exchange of Certificated Preferred Stock or Global Preferred Stock shall be the valid Capital Stock of the Company, entitled to the same benefits under this Certificate of Amendment as the Certificated Preferred Stock or Global Preferred Stock surrendered upon such registration of transfer or exchange.

(3) Prior to due presentment for registration of transfer of any shares of Series C Preferred Stock, the Transfer Agent and the Company may deem and treat the Person in whose name such shares of Series C Preferred Stock are registered as the absolute owner of such Series C Preferred Stock and neither the Transfer Agent nor the Company shall be affected by notice to the contrary.

(4) No service charge shall be made to a Holder for any registration of transfer or exchange upon surrender of any Series C Preferred Stock certificate or Common Stock certificate at the office of the Transfer Agent maintained for that purpose. However, the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Series C Preferred Stock certificates or Common Stock certificates, except as provided in Section 5(G).

(D) Replacement Certificates. If any of the Certificated Preferred Stock certificates shall be mutilated, lost, stolen or destroyed, the Company shall issue, in exchange and in substitution for and upon cancellation of the mutilated Certificated Preferred Stock certificate, or in lieu of and substitution for the Certificated Preferred Stock certificate lost, stolen or destroyed, a new Certificated Preferred Stock certificate of like tenor and representing an equivalent number of shares of Series C Preferred Stock, but only upon receipt of evidence of such loss, theft or destruction of such Certificated Preferred Stock certificate and indemnity, if requested, satisfactory to the Company and the Transfer Agent.

 

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(E) Temporary Certificates. Until definitive Certificated Preferred Stock certificates are ready for delivery, the Company may prepare and the Transfer Agent shall authenticate temporary Certificated Preferred Stock certificates. Any temporary Certificated Preferred Stock certificates shall be substantially in the form of definitive Preferred Stock certificates but may have variations that the Company considers appropriate for temporary Certificated Preferred Stock certificates. Without unreasonable delay, the Company shall prepare and the Transfer Agent shall authenticate definitive Certificated Preferred Stock certificates and deliver them in exchange for temporary Certificated Preferred Stock certificates.

(F) Cancellation. In the event the Company shall purchase or otherwise acquire Certificated Preferred Stock, the same shall thereupon be delivered to the Transfer Agent for cancellation.

(i) The Transfer Agent and no one else shall cancel and destroy all Certificated Preferred Stock certificates surrendered for transfer, exchange, replacement or cancellation and deliver a certificate of such destruction to the Company unless the Company directs the Transfer Agent to deliver canceled Certificated Preferred Stock certificates to the Company. The Company may not issue new Certificated Preferred Stock certificates to replace Certificated Preferred Stock certificates to the extent they evidence Series C Preferred Stock which the Company has purchased or otherwise acquired.

(G) Legends. All certificates or other instruments representing shares of Series C Preferred Stock or Common Stock issuable upon conversion thereof will bear a legend in substantially the following form (excluding in the case of any such Common Stock for which a registration statement covering the resale of such Common Stock has been declared effective by the SEC and that has been disposed of pursuant to such effective registration statement; or sold under circumstances in which all of the applicable conditions of Rule 144 (or any similar provisions then in force) under the Securities Act are met):

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY NON-U.S. OR STATE SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE THEREWITH. THIS SECURITY IS ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER AS SET FORTH IN A REGISTRATION RIGHTS AGREEMENT, AS AMENDED FROM TIME TO TIME, COPIES OF WHICH MAY BE OBTAINED UPON REQUEST FROM EASTMAN KODAK COMPANY OR ANY SUCCESSOR THERETO, AND THIS SECURITY MAY NOT BE VOTED OR OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE THEREWITH. THIS SECURITY MAY BE TRANSFERRED IN ACCORDANCE WITH RULE 144A UNDER THE SECURITIES ACT WITHOUT THE DELIVERY OF AN OPINION OF COUNSEL.

 

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Section 15. Other Provisions.

(A) With respect to any notice to a Holder of shares of Series C Preferred Stock required to be provided hereunder, neither failure to mail such notice, nor any defect therein or in the mailing thereof, to any particular Holder shall affect the sufficiency of the notice or the validity of the proceedings referred to in such notice with respect to the other Holders or affect the legality or validity of any distribution, rights, warrant, reclassification, consolidation, merger, conveyance, transfer, dissolution, liquidation or winding-up, or the vote upon any such action. Any notice which was mailed in the manner herein provided shall be conclusively presumed to have been duly given whether or not the Holder receives the notice.

(B) Shares of Series C Preferred Stock that have been issued and reacquired in any manner, including shares of Series C Preferred Stock that are purchased or exchanged or converted, shall (upon compliance with any applicable provisions of the New Jersey Business Corporation Act) have the status of authorized but unissued shares of preferred stock of the Company undesignated as to series and may be designated or redesignated and issued or reissued, as the case may be, as part of any series of preferred stock of the Company; provided that any issuance of such shares as Series C Preferred Stock must be in compliance with the terms hereof.

(C) The shares of Series C Preferred Stock shall be issuable only in whole shares.

(D) All notice periods referred to herein shall commence on the date of the mailing of the applicable notice. Notice to any Holder shall be given to the registered address set forth in the Company’s or the Transfer Agent’s records for such Holder, or for Global Preferred Stock, to the Depository in accordance with its procedures.

(E) Any payment required to be made hereunder on any day that is not a Business Day shall be made on the next succeeding Business Day and no interest or dividends on such payment will accrue or accumulate, as the case may be, in respect of such delay.

Section 16. Definitions.

(A) “Additional Liquidation Preference” shall have the meaning set forth in Section 2(B).

(B) “Additional Shares” shall have the meaning set forth in Section 8(A).

(C) “Affiliate” means, with respect to any Person, any Person directly or indirectly controlling, controlled by or under common control with such other Person. For purposes of determining whether a Person is an Affiliate, the term “control” and its correlative forms “controlled by” and “under common control with” shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through ownership of securities, contract or otherwise.

(D) “Agent Members” shall have the meaning set forth in Section 14(A)(ii).

 

23


(E) “Business Day” means any day except Saturday, Sunday or any other day on which commercial banks located in New York, New York, New Jersey are authorized or required by law to be closed for business.

(F) “Capital Stock” means, for any entity, any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) stock issued by that entity.

(G) “Certificated Preferred Stock” shall have the meaning set forth in Section 5(B).

(H) “Certificate of Amendment” shall have the meaning set forth in Section 5(A).

(I) “Change of Control” means a Fundamental Change as set forth in clause (i) of the definition of Fundamental Change.

(J) “close of business” means 5:00 p.m. (New York City time).

(K) “Closing Sale Price” of the Common Stock on any date means the closing sale price per share (or if no closing sale price is reported, the average of the closing bid and ask prices or, if more than one in either case, the average of the average closing bid and the average closing ask prices) on such date as reported in composite transactions for the principal United States national or regional securities exchange on which the Common Stock is traded or, if the Common Stock is not listed for trading on a United States national or regional securities exchange on the relevant date, the last quoted bid price for the Common Stock in the over-the-counter market on the relevant date, as reported by OTC Markets Group Inc. or a similar organization. In the absence of such a quotation, the Closing Sale Price shall be the average of the mid-point of the last bid and ask prices for the Common Stock on the relevant date from each of at least three nationally recognized independent investment banking firms selected by the Company for this purpose.

(L) “Common Stock” means the Common Stock, par value $0.01 per share, of the Company.

(M) “Conversion Date” shall have the meaning specified in Section 5(B).

(N) “Conversion Price” means, at any time, the dollar price per share of Common Stock equal to the quotient of (x) one (1) divided by (y) the Conversion Rate in effect at such time. Until the Initial Conversion Rate is adjusted as provided, herein, the Conversion Price shall be $10.

(O) “Conversion Rate” mean the Initial Conversion Rate as may be adjusted from time to time in accordance with Section 5.

(P) “Conversion Shares” shall have the meaning set forth in Section 5(A).

(Q) “Dividends” shall have the meaning set forth in Section 2(A).

 

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(R) “Dividend Make-Whole Amount” shall have the meaning set forth in Section 7(B)(ii).

(S) “Dividend Payment Date” shall mean January 15, April 15, July 15 and October 15 of each year, commencing on April 15, 2021.

(T) “Dividend Period” means the period commencing on, and including, a Dividend Payment Date and ending on, and including, the day immediately preceding the next succeeding Dividend Payment Date, with the exception that the first Dividend Period shall commence on, and include, the Original Issue Date and end on and include April 14, 2021.

(U) “Dividend Rate” means the rate per annum of 5.0% per share of Series C Preferred Stock on the Liquidation Preference.

(V) “Dividend Record Date” shall mean, with respect to any Dividend Payment Date, the January 1, April 1, July 1 or October 1, as the case may be, immediately preceding such Dividend Payment Date.

(W) “Effective Date” shall mean the date on which a Fundamental Change event occurs or becomes effective, except that, as used in Section 5(D), Effective Date shall mean the first date on which the shares of the Common Stock trade on the applicable exchange or market, regular way, reflecting the relevant share split or share combination, as applicable.

(X) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

(Y) “Exchange Price” means the dollar value (based, in the case of any listed securities, on the Market Value thereof) of Exchange Property per share of Common Stock.

(Z) “Exchange Property” shall have the meaning set forth in Section 9(A).

(AA) “Ex-Date,” when used with respect to any issuance, dividend or distribution on the Common Stock, means the first date on which the Common Stock trades on the applicable exchange or in the applicable market, regular way, without the right to receive such issuance, dividend or distribution from the Company or, if applicable, from the seller of the Common Stock on such exchange or market (in the form of due bills or otherwise) as determined by such exchange or market.

(BB) “Expiration Date” shall have the meaning set forth in Section 7(A).

(CC) “Fundamental Change” shall be deemed to have occurred at any time after the Series C Preferred Stock is originally issued if any of the following occurs:

(i) a “person” or “group” within the meaning of Section 13(d) of the Exchange Act, other than (1) the Company, its subsidiaries or the employee benefit plans of the Company and its subsidiaries and (2) Permitted Holders, becomes the direct or indirect “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of more than 50% of the Voting Stock, provided that a Fundamental Change will be deemed to have occurred if a Permitted Holder Group becomes the direct or indirect “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of more than 70% of the Voting Stock;

 

25


(ii) the consummation of (A) any recapitalization, reclassification or change of the Common Stock (other than changes resulting from a subdivision or combination) as a result of which the Common Stock would be converted into, or exchanged for, stock, other securities, other property or assets; (B) any share exchange, consolidation or merger of the Company pursuant to which the Common Stock will be converted into cash, securities or other property; or (C) any sale, lease or other transfer in one transaction or a series of transactions of all or substantially all of the consolidated assets of the Company and its subsidiaries, taken as a whole, to any Person other than one of the Company’s subsidiaries; provided, however, that any merger solely for the purpose of changing the Company’s jurisdiction of incorporation to the United States of America, any State thereof or the District of Columbia, and resulting in a reclassification, conversion or exchange of outstanding shares of Common Stock solely into shares of Common Stock of the surviving entity, shall not be a Fundamental Change; provided further that any transaction described in this clause (ii) in which the holders of the Company’s Common Stock immediately prior to such transaction own, directly or indirectly, more than 50% of the common stock of the continuing corporation or transferee or the parent thereof immediately after such transaction in substantially the same proportions as such ownership immediately prior to such transaction shall not be a Fundamental Change pursuant to this clause (ii);

(iii) the Common Stock ceases to be listed or quoted on any of the New York Stock Exchange, the NASDAQ Global Select Market or the NASDAQ Global Market (or any of their respective successors); or

(iv) the stockholders of the Company approve any plan or proposal for the liquidation or dissolution of the Company;

provided, however, that a transaction or transactions described in clause (i) or (ii) above shall not constitute a Fundamental Change, if at least 90% of the consideration received or to be received by holders of the Common Stock of the Company, excluding cash payments for fractional shares and cash payments made pursuant to dissenters’ appraisal rights, in connection with such transaction or transactions consists of shares of common stock that are listed or quoted on any of the New York Stock Exchange, the NASDAQ Global Select Market or the NASDAQ Global Market (or any of their respective successors) or will be so listed or quoted when issued or exchanged in connection with such transaction or transactions and as a result of such transaction or transactions the Series C Preferred Stock becomes convertible into such consideration pursuant to the terms hereof.

(DD) “Fundamental Change Conversion Period” shall have the meaning set forth in Section 7(A).

(EE) “Fundamental Change Effective Date” means, with respect to the occurrence of any Fundamental Change, the effective date of such Fundamental Change.

 

26


(FF) “Fundamental Change Notice” shall have the meaning set forth in Section 7(C).

(GG) “Fundamental Change Stock Price” means, for any Fundamental Change, the price paid (or deemed paid) per share of Common Stock in such Fundamental Change, which shall equal (i) if all holders of Common Stock receive only cash in exchange for their Common Stock in such Fundamental Change, the amount of cash paid per share of Common Stock in such Fundamental Change, and (ii) in all other cases, the Market Value per share of Common Stock determined as of the Trading Day immediately preceding the Fundamental Change Effective Date.

(HH) “Holder” or “holder” means a holder of record of the Series C Preferred Stock.

(II) “Initial Conversion Rate” means 0.1, which is derived by dividing (i) the quotient of the Original Purchase Price divided by ten (10) dollars, by (ii) the Original Purchase Price.

(JJ) “Initial Purchaser” means the initial Holder of the Series C Preferred Stock on the Original Issue Date.

(KK) “Junior Stock” means all classes of the Company’s Common Stock and any other class of capital stock or series of preferred stock of the Company established after the issue date of the Series C Preferred Stock, the terms of which do not expressly provide that such class or series ranks senior to or pari passu with the Series C Preferred Stock as to dividend rights or rights upon the Company’s liquidation, winding-up or dissolution.

(LL) “Liquidation Preference” means, with respect to each share of Series C Preferred Stock, the Original Purchase Price plus the Additional Liquidation Preference.

(MM) “Mandatory Conversion Date” shall have the meaning set forth in Section 6(B).

(NN) “Mandatory Redemption Date” shall have the meaning set forth in Section

(OO) “Mandatory Redemption Price” shall have the meaning set forth in Section

(PP) “Market Value” means the average of the per share volume-weighted average prices of the Common Stock for each day during a 15 consecutive Trading Day period ending immediately prior to the date of determination, as displayed under the heading “Bloomberg VWAP” on Bloomberg page “KODK Equity VWAP” (or its equivalent successor if such page is not available) in respect of the period from the scheduled open of trading until the scheduled close of trading of the primary trading session on each such Trading Day (or if such volume-weighted average price is unavailable on any such Trading Day, the Closing Sale Price shall be used for such Trading Day). The per share volume-weighted average price on each such Trading Day shall be determined without regard to after-hours trading or any other trading outside of the regular trading session trading hours.

 

27


(QQ) “Notice of Conversion” shall have the meaning set forth in Section 5(B).

(RR) “Officer” means the Chief Executive Officer, the President, any Vice President, the Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of the Company.

(SS) “open of business” means 9:00 a.m. (New York City time).

(TT) “Original Issue Date” means the first date on which the Series C Preferred Stock is issued.

(UU) “Original Purchase Price” means $100.00 per share of Series C Preferred Stock.

(VV) “Participating Dividends” shall have the meaning set forth in Section 2(A).

(WW) “Permitted Holders” means at any time, each of GO EK Ventures IV, LLC, Longleaf Partners Small-Cap Fund, C2W Partners Master Fund Limited, Deseret Mutual Pension Trust, George Karfunkel, Renee Karfunkel, GKarfunkel Family LLC, Congregation Chemdas Yisroel, Chesed Foundation of America, Marneu Holding Company, Moses Marx, Phillippe Katz, K.F. Investors LLC, United Equities Commodities Company, Momar Corporation, 111 John Realty Corporation, Kennedy Lewis Investment Management LLC and any Affiliate of any of the foregoing and any group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision) the members of which include any of the Permitted Holders specified above and that, directly or indirectly, holds or acquires beneficial ownership of the Voting Stock (a “Permitted Holder Group”), so long as (1) each member of the Permitted Holder Group has voting rights proportional to the percentage of ownership interests held or acquired by such member and (2) no Person or other “group” (other than Permitted Holders specified above) beneficially owns more than 50% on a fully diluted basis of the Voting Stock held by the Permitted Holder Group (without giving effect to any attribution rules).

(XX) “Person” means any individual, corporation, general partnership, limited partnership, limited liability partnership, joint venture, association, joint-stock company, trust, limited liability company, unincorporated organization or government or any agency or political subdivision thereof.

(YY) “PIK Shares” shall have the meaning set forth in Section 2(D).

(ZZ) “Preferred Dividends” shall have the meaning set forth in Section 2(A).

(AAA) “Record Date” means, with respect to any dividend, distribution or other transaction or event in which the holders of the Common Stock (or other applicable security) have the right to receive any cash, securities or other property or in which the Common Stock (or such other security) is exchanged for or converted into any combination of cash, securities or other property, the date fixed for determination of holders of the Common Stock (or such other security) entitled to receive such cash, securities or other property (whether such date is fixed by the Board, statute, contract or otherwise).

 

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(BBB) “Reorganization Event” shall have the meaning set forth in Section 9(A).

(CCC) “SEC” or “Commission” means the Securities and Exchange Commission.

(DDD) “Securities Act” means the Securities Act of 1933, as amended.

(EEE) “Series B Certificate of Amendment” means that certain Certificate of Amendment to the Second Amended and Restated Articles of Incorporation, filed on February 25, 2021 with the Department of Treasury of the State of New Jersey, entitled “III.A. 4.0% Series B Convertible Preferred Stock”, as amended from time to time as permitted herein.

(FFF) “Series B Preferred Stock” means the Series B Preferred Stock designated by the Company having the rights, preferences, privileges, restrictions and other matters relating to the Series B Preferred as are as set forth in the Series B Certificate of Amendment.

(GGG) “Series C Preferred Stock” shall have the meaning set forth in Section 1.

(HHH) “Spin-off” shall have the meaning specified in Section 5(D)(iii).

(III) “Stock Price” means (i) if holders of the Common Stock receive in exchange for their Common Stock only cash in the transaction constituting a Fundamental Change, the cash amount paid per share or (ii) otherwise, the average of the Closing Sale Prices of the Common Stock on the five Trading Days preceding, but excluding the Effective Date of the Fundamental Change.

(JJJ) “Trading Day” means a day during which trading in the Common Stock generally occurs on the New York Stock Exchange or, if the Common Stock is not listed on the New York Stock Exchange, on the principal other national or regional securities exchange on which the Common Stock is then listed or, if the Common Stock is not listed on a national or regional securities exchange, on the principal other market on which the Common Stock is then listed or admitted for trading. If the Common Stock is not so listed or traded, Trading Day means a Business Day.

(KKK) “Transfer Agent” means Computershare Inc. and Computershare Trust Company N.A., together acting as the Company’s duly appointed transfer agent, registrar, and dividend disbursing agent for the Series C Preferred Stock. The Company may, in its sole discretion, remove the Transfer Agent with 10 days’ prior notice to the Transfer Agent and Holders; provided that the Company shall appoint a successor Transfer Agent who shall accept such appointment prior to the effectiveness of such removal.

(LLL) “Valuation Period” shall have the meaning specified in Section 5(D)(iii).

(MMM) “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.

 

29


EXHIBIT A

FORM OF SERIES C PREFERRED STOCK CERTIFICATE

FACE OF SECURITY

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY NON-U.S. OR STATE SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE THEREWITH. THIS SECURITY IS ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER AS SET FORTH IN A REGISTRATION RIGHTS AGREEMENT, AS AMENDED FROM TIME TO TIME, COPIES OF WHICH MAY BE OBTAINED UPON REQUEST FROM EASTMAN KODAK COMPANY OR ANY SUCCESSOR THERETO, AND THIS SECURITY MAY NOT BE VOTED OR OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE THEREWITH. THIS SECURITY MAY BE TRANSFERRED IN ACCORDANCE WITH RULE 144A UNDER THE SECURITIES ACT WITHOUT THE DELIVERY OF AN OPINION OF COUNSEL.

 

Certificate Number [    ]    Number of Shares of
   Preferred Stock [    ]
   CUSIP No.: [    ]
   ISIN No. [    ]

 

30


5.0% Series C Convertible Preferred Stock

of

EASTMAN KODAK COMPANY

EASTMAN KODAK COMPANY, a New Jersey corporation (the “Company”), hereby certifies that [                ] (the “Holder”) is the registered owner of [                ] fully paid and non-assessable shares of preferred stock, no par value, of the Company designated as the 5.0% Series C Convertible Preferred Stock (the “Series C Preferred Stock”). The shares of Series C Preferred Stock are transferable on the books and records of the Transfer Agent, in person or by a duly authorized attorney, upon surrender of this certificate duly endorsed and in proper form for transfer. The designations, rights, privileges, restrictions, preferences and other terms and provisions of the Series C Preferred Stock represented hereby are as specified in, and the shares of Series C Preferred Stock are issued and shall in all respects be subject to the provisions of, the Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of the Company, dated February 25, 2021, as the same may be amended from time to time (the “Certificate of Amendment”). Capitalized terms used herein but not defined shall have the meaning given them in the Certificate of Amendment. The Company will provide a copy of the Certificate of Amendment to a Holder without charge upon written request to the Company at its principal place of business.

Reference is hereby made to the Certificate of Amendment, which shall for all purposes have the same effect as if set forth at this place.

Upon receipt of this certificate, the Holder is bound by the Certificate of Amendment and is entitled to the benefits thereunder.

Unless the Transfer Agent’s Certificate of Authentication hereon has been properly executed, these shares of Series C Preferred Stock shall not be entitled to any benefit under the Certificate of Amendment or be valid for any purpose.

 

31


IN WITNESS WHEREOF, the Company has executed this certificate this                 day of    [    ], 2021.

 

EASTMAN KODAK COMPANY

By:    
 

Name:

Title:

By:    
 

Name:

Title:

TRANSFER AGENT’S CERTIFICATE OF AUTHENTICATION

These are shares of Series C Preferred Stock referred to in the within-mentioned Certificate of Amendment.

Dated:

 

COMPUTERSHARE SHAREOWNER SERVICES, as Transfer Agent

By:    
 

Authorized Signatory

 

32


REVERSE OF SECURITY

The Company is authorized to issue 5.0% Series C Convertible Preferred Stock (the “Series A Preferred Stock”) and common stock. The Series C Preferred Stock is convertible preferred stock, with a dividend and liquidation preference over the common stock and voting rights identical to the voting rights of the common stock on an as converted basis that will vote together with the common stock as a single class.

The Company will furnish without charge and upon written request to each Holder the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock and the qualifications, limitations or restrictions of such preferences and/or rights.

The Company will furnish to any shareholder, upon request and without charge, a full statement of the authority of its Board of Directors to divide shares of its capital stock into classes or series and to determine and change the relative rights, preferences and limitations of any class or series.

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned assigns and transfers the shares of Series C Preferred Stock evidenced hereby to:

 

 

 

 

(Insert assignee’s social security or tax identification number)

 

 

(Insert address and zip code of assignee)

and irrevocably appoints:

 

 

 

 

 

 

agent to transfer the shares of Series C Preferred Stock evidenced hereby on the books of the Transfer Agent. The agent may substitute another to act for him or her.

 

Date:    
Signature:    

(Sign exactly as your name appears on the other side of this Series C Preferred Stock Certificate)

 

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Signature Guarantee:       1 

 

1 

(Signature must be guaranteed by an “eligible guarantor institution” that is a bank, stockbroker, savings and loan association or credit union meeting the requirements of the Transfer Agent, which requirements include membership or participation in the Securities Transfer Agents Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Transfer Agent in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.)

 

34


EXHIBIT B

NOTICE OF CONVERSION

(To be Executed by the Holder in order to Convert the Series C Preferred Stock)

The undersigned hereby irrevocably elects to convert (the “Conversion”) shares of 5.0% Series C Preferred Stock (the “Series C Preferred Stock”) of Eastman Kodak Company (the “Company”), represented by stock certificate No(s)             (the “Preferred Stock Certificates”), into shares of Common Stock (“Common Stock”) of the Company according to the conditions of the Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of the Company, dated February 25, 2021, establishing the Series C Preferred Stock (the             “Certificate of Amendment”). The Company will pay any documentary, stamp or similar issue or transfer tax on the issuance of the shares of the Company’s Common Stock upon conversion of the Series C Preferred Stock, unless the tax is due because the Holder requests such shares to be issued in a name other than the Holder’s name, in which case the Holder will pay the tax. A copy of each Preferred Stock Certificate is attached hereto (or evidence of loss, theft or destruction thereof).

Capitalized terms used but not defined herein shall have the meanings ascribed thereto in or pursuant to the Certificate of Amendment.

Number of shares of Series C Preferred Stock to be converted:

Name or Names (with addresses) in which the certificate or certificate for any shares of Common Stock to be issued are to be registered:2

Signature:

Name of registered Holder:

Fax No.:

Telephone No.:

 

2 

The Company is not required to issue shares of Common Stock until you, if required, furnish appropriate endorsements and transfer documents.

 

35


EXHIBIT C

NOTICE OF EXTENSION

(To be Executed by Holders of at a Majority of the Outstanding Series C Preferred Stock in order to Extend the Mandatory Redemption Date)

The undersigned, representing the Holders of at least a majority of the outstanding shares of 5.0% Series C Preferred Stock (the “Series C Preferred Stock”) of Eastman Kodak Company (the “Company”), hereby irrevocably elect to extend the Mandatory Redemption Date of the Series C Preferred Stock in accordance with the Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of the Company, dated February 25, 2021, establishing the Series C Preferred Stock (the “Certificate of Amendment”).

Capitalized terms used but not defined herein shall have the meanings ascribed thereto in or pursuant to the Certificate of Amendment.

Extended Mandatory Redemption Date:3

Signature:

Name of registered Holder:

Fax No.:

Telephone No.:

Fundamental Change Election:4

 

3 

The extended Mandatory Redemption Date shall be up to two (2) years from the originally scheduled Mandatory Redemption Date.65

4 

In the event of a Fundamental Change Conversion, Holder to specify whether conversion shall be pursuant to Section 7(A)(i) or 7(A)(ii).

 

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HOLDER[S]:

 
[        ]
By:    

Name:

 

Title:

 
Class C Preferred Shares Held: [        ]

 

37


IN WITNESS WHEREOF, this Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of the Company is executed on behalf of the Company by its Chief Executive Officer and attested by its Secretary this 25th day of February, 2021.

 

By:   /s/ James V. Continenza

Name: James V. Continenza

Title: Chief Executive Officer

 

Attest:

 
By:   /s/ Roger W. Byrd

Name: Roger W. Byrd

Title: Secretary

 

38


STATEMENT

With regard to the Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of Eastman Kodak Company, Exhibits A, B and C to the Certificate of Amendment are a part of the Certificate of Amendment but cannot be completed in full at this time and thus should be filed in blank form.

 

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Exhibit 10.1

EXECUTION VERSION

SERIES A PREFERRED STOCK REPURCHASE AND EXCHANGE AGREEMENT

THIS REPURCHASE AND EXCHANGE AGREEMENT (this “Agreement”) is made and entered into as of the 26th day of February, 2021, by and among Eastman Kodak Company, a New Jersey corporation (the “Company”), Longleaf Partners Small-Cap Fund, C2W Partners Master Fund Limited, and Deseret Mutual Pension Trust (each a “Holder” and collectively, the “Holders”), and Southeastern Asset Management, Inc. (“Southeastern”).

RECITALS

WHEREAS, the Holders desire to sell to the Company, and the Company desires to repurchase and accept from the Holders, in the aggregate, 1,000,000 shares of the Company’s 5.50% Series A Convertible Preferred Stock (the “Series A Preferred Stock”) held by such Holders individually in the amounts identified on Exhibit A subject to the terms and conditions set forth in this Agreement; and

WHEREAS, the parties hereto intend to effect a further transaction by which the Holders will transfer and deliver to the Company all of the remaining 1,000,000 shares of the Series A Preferred Stock not repurchased by the Company (the “Remaining Series A Preferred Stock”) held by each such Holder as identified on Exhibit B in exchange for shares of the 4.0% Series B Convertible Preferred Stock having the terms set forth with respect thereto in the Series B Certificate of Designations (the “Series B Preferred Stock”) on a one-for-one basis (the “Share Exchange”).

NOW, THEREFORE, in consideration of the premises, and of the representations, warranties, covenants and agreements set forth herein, the Company and the Holders hereby agree as follows:

1. Repurchase. Upon the terms and subject to the conditions set forth in this Agreement, and in reliance on the representations, warranties and covenants contained herein, at the Closing (as defined below), each Holder identified on Exhibit A, severally and not jointly, agrees to sell, assign, convey, transfer and deliver to the Company, and the Company agrees to repurchase and accept from each such Holder, the shares of the Series A Preferred Stock (which total number of Series A Preferred Stock held by each such Holder to be repurchased by the Company in accordance with this Agreement is set forth opposite such Holder’s name on Exhibit A), free and clear of any Liens, for a cash amount per share of the Series A Preferred Stock equal to the Closing Per Share Price (the “Series A Repurchase”). The aggregate cash amount equal to the product of (a) the Closing Per Share Price, multiplied by (b) one million (1,000,000) is referred to in this Agreement as the “Purchase Price.”

2. Share Exchange. Upon the terms and subject to the conditions set forth in this Agreement, and in reliance on the representations, warranties and covenants contained herein, effective at the Closing, the Company hereby exchanges, transfers and delivers to each Holder identified on Exhibit B, and each Holder identified on Exhibit B hereby acquires from the Company, the shares of the Series B Preferred Stock in exchange for, on a one-for-one basis, each share of Remaining Series A Preferred Stock set forth opposite such Holder’s name on Exhibit B.


3. Closing.

a. Time of Closing. Subject to the terms and conditions of this Agreement, the closing of the transactions contemplated by this Agreement (the “Closing”) shall be held at 10:00 a.m. New York time, as soon as reasonably practicable (which may be the date hereof) after the conditions set forth in Section 7 (other than those conditions that by their nature are to be satisfied at the Closing, but subject to their satisfaction) are satisfied or waived, or at such other date, time and place as the Company and the Holders mutually agree in writing (the “Closing Date”).

b. Deliveries at Closing.

i. By Each Holder. Upon the terms and subject to the conditions set forth in this Agreement, at the Closing, each Holder shall deliver or cause to be delivered to the Company:

1. by DWAC, the shares of the Series A Preferred Stock held by DTC on behalf of each such Holder as set forth opposite each such Holder’s name on Exhibit A to be repurchased by the Company, free and clear of all Liens, to an account designated in writing by the Company;

2. by DWAC, the shares of the Remaining Series A Preferred Stock held by DTC on behalf of each such Holder as set forth opposite each such Holder’s name on Exhibit B to be exchanged for shares of the Series B Preferred Stock on a one-for-one basis, free and clear of all Liens, to an account designated in writing by the Company; and

3. an executed cross receipt with respect to (a) such Holder’s receipt of (i) its respective portion of the Purchase Price, and (ii) its respective portion of the Series B Preferred Stock as contemplated by Section 3(b)(ii)(2), and (b) the Company’s receipt of the shares of the Series A Preferred Stock as contemplated by Section 3(b)(i)(1) and the shares of the Remaining Series A Preferred Stock as contemplated by Section 3(b)(i)(2).

ii. By the Company. Upon the terms and subject to the conditions set forth in this Agreement, at the Closing, the Company shall deliver to each Holder:

1. cash, in an amount equal to the number of shares of Series A Preferred Stock set forth opposite the name of such Holder on Exhibit A multiplied by the Closing Per Share Price, by wire transfer of immediately available funds, pursuant to instructions given to the Company by such Holder in writing prior to the Closing Date;

2. the shares of the Series B Preferred Stock, in certificated form and registered in the names of the applicable Holder or its custodian or nominee as previously specified to the Company, exchanged in accordance with Section 2 for the Remaining Series A Preferred Stock held by such Holder as set forth opposite the name of such Holder on Exhibit B; provided that, at the Closing, the Company shall deliver electronic copies of such certificates in PDF format to the parties identified on Exhibit C hereto, and the physical certificates representing such shares may be delivered to each Holder or its custodian at the addresses previously specified to the Company within five (5) Business Days after the Closing;

 

2


3. cash, in an amount equal to the accrued and unpaid dividends on the Remaining Series A Preferred Stock held by each Holder as set forth opposite the name of such Holder on Exhibit B, by wire transfer of immediately available funds, pursuant to instructions given to the Company by such Holder in writing prior to the Closing Date;

4. evidence of the filing of the Series B Certificate of Designations with the New Jersey Department of Treasury;

5. the certificates referred to in Sections 7(a)(v) and 7(a)(vi) below; and

6. an executed cross receipt with respect to (a) the Holders’ receipt of (i) their respective portion of the Purchase Price, and (ii) their respective portion of the Series B Preferred Stock as contemplated by Section 3(b)(ii)(2), and (b) the Company’s receipt of the shares of the Series A Preferred Stock as contemplated by Section 3(b)(i)(1) and the shares of the Remaining Series A Preferred Stock as contemplated by Section 3(b)(i)(2).

4. Representations and Warranties of the Company. The Company hereby represents and warrants to the Holders that:

a. Organization. The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation and has full power and capacity to enter into this Agreement and perform it obligations hereunder.

b. Capitalization. Immediately prior to the Closing, the authorized capital of the Company consists of 500,000,000 shares of Common Stock and 60,000,000 shares of Preferred Stock (the “Preferred Stock”). As of February 22, 2021, there were 77,364,845 shares of Common Stock issued and outstanding. All of the outstanding shares of Common Stock have been duly authorized, are fully paid and nonassessable and were issued in compliance with all applicable federal and state securities laws. The Company holds approximately 711,791 shares of Common Stock in its treasury. As of the Closing, 2,000,000 shares of Preferred Stock have been designated Series A Preferred Stock, all of which are issued and outstanding prior to the Closing; 1,000,000 shares of Preferred Stock have been designated Series B Preferred Stock, none of which is issued and outstanding prior to the Closing; and 1,435,000 shares of Preferred Stock have been designated as Series C Preferred Stock none of which is issued and outstanding prior to the Closing. As of the Closing, no other series of Preferred Stock have been designated. The rights, privileges and preferences of the Preferred Stock are as stated in the Certificate of Incorporation, including all amendments thereto, and as provided by the New Jersey Business Corporation Law. The Company holds no Preferred Stock in its treasury.

c. Authorization.

i. All corporate action required to be taken by the Board of Directors of the Company (the “Board of Directors”) and shareholders in order to authorize the Company to enter into this Agreement and approve the Series A Repurchase and the Share Exchange, including the issuance of the Series B Preferred Stock at Closing, has been taken or will be taken prior to the Closing. All corporate action required to be taken by the Board of Directors

 

3


and shareholders in order to issue the Common Stock issuable upon conversion of the Series B Preferred Stock has been taken or will be taken prior to Closing. All action on the part of the officers of the Company necessary for the execution and delivery of this Agreement, the performance of all obligations of the Company under this Agreement to be performed as of the Closing has been taken or will be taken prior to the Closing.

ii. This Agreement, when or as executed and delivered by the Company, shall and does constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with its terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or other laws of general application relating to or affecting the enforcement of creditors’ rights generally, or (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies (collectively, the “Bankruptcy and Equity Exception”).

d. Valid Issuance of Shares.

i. The Series B Preferred Stock, when issued, exchanged and delivered in accordance with the terms and for the consideration set forth in this Agreement, will be validly issued, fully paid and nonassessable and free and clear of all Liens other than any liens or encumbrances created by or imposed by the Holders.

ii. Assuming the accuracy of the representations of the Holders in Section 5, and subject to the filings described in Section 4(e), below, the Series B Preferred Stock will be issued in compliance with all applicable federal and state securities laws. The Common Stock issuable upon conversion of the Series B Preferred Stock has been or will be duly reserved for issuance, and upon issuance in accordance with the terms of the Certificate of Incorporation, will be validly issued, fully paid and nonassessable and free and clear of all Liens other than any liens or encumbrances created by or imposed by the Holders.

iii. Assuming the accuracy of the representations of the Holders in Section 5, and subject to the filings described in Section 4(e), below, the Common Stock issuable upon conversion of the Series B Preferred Stock will be issued in compliance with all applicable federal and state securities laws.

iv. No Person has any right to purchase any of the Series B Preferred Stock being issued in accordance with this Agreement under the Company’s governing instruments or any contract, agreement or arrangement to which the Company is a party.

e. Governmental Consents and Filings. Assuming the accuracy of the representations made by the Holders in Section 5, no consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any Governmental Entity is required on the part of the Company in connection with the Series A Repurchase and the Share Exchange, except for (i) compliance with any applicable requirements of the Exchange Act, the Securities Act and any other applicable U.S. state or federal securities, takeover or “blue sky” laws and (ii) compliance with any applicable rules of the New York Stock Exchange.

 

4


f. Compliance. The Company is not in violation or default (i) of any provisions of the Certificate of Incorporation or the Fourth Amended and Restated By-laws of the Company (the “Bylaws”), (ii) of any instrument, judgment, order, writ or decree, (iii) under any note, indenture or mortgage, or (iv) under any lease, agreement, contract or purchase order to which it is a party or by which it is bound, or (v) of any provision of federal or state statute, rule or regulation applicable to the Company, except, in the case of clauses (ii), (iii) and (iv) above, for any such violation that would not have a material adverse effect on the ability of the Company to timely consummate the transactions contemplated by this Agreement (the “Transactions”). The execution, delivery and performance of this Agreement and the consummation of the Transactions will not result in any such violation or be in conflict with or constitute, with or without the passage of time and giving of notice, either (i) a default under any such provision, instrument, judgment, order, writ, decree, contract or agreement, or (ii) an event which results in the creation of any lien, charge or encumbrance upon any assets of the Company or the suspension, revocation, forfeiture, or nonrenewal of any permit or license applicable to the Company, except as would not, individually or in the aggregate, have a material adverse effect on the ability of the Company to timely consummate the Transactions.

g. No Additional Representations. Except for the representations and warranties made by the Company in this Section 4, neither the Company nor any other person makes any express or implied representation or warranty with respect to the Company or any subsidiaries or their respective businesses, operations, assets, liabilities, employees, employee benefit plans, conditions or prospects, and the Company hereby disclaims any such other representations or warranties. In particular, without limiting the foregoing disclaimer, neither the Company nor any other person makes or has made any representation or warranty to the Holders, or any of their Affiliates or Representatives, with respect to (i) any financial projection, forecast, estimate, budget or prospect information relating to the Company or any of its subsidiaries or their respective businesses, or (ii) any oral or written information presented to the Holders or any of their Affiliates or Representatives in the course of their due diligence investigation of the Company or the negotiation of this Agreement.

5. Representations and Warranties of the Holders. Each Holder hereby represents and warrants to the Company, severally and not jointly, that:

a. Organization. Such Holder is duly formed and validly existing and in good standing under the Laws of its jurisdiction of formation and has full power and capacity to enter into this Agreement and perform it obligations hereunder.

b. Authorization. This Agreement, when executed and delivered by such Holder, will constitute valid and legally binding obligations of such Holder, enforceable in accordance with its terms, subject to the Bankruptcy and Equity Exception.

c. Ownership of Series A Preferred Stock and Remaining Series A Preferred Stock. The shares of Series A Preferred Stock and Remaining Series A Preferred Stock owned by each such Holder as set forth opposite such Holder’s name on Exhibit A and Exhibit B, respectively, are beneficially owned by each such Holder , free and clear of all Liens.

 

5


d. Registered Securities. Each Holder understand that the shares of Series B Preferred Stock it is acquiring pursuant to this Agreement are characterized as “restricted securities” under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under such laws and applicable regulations such Series B Preferred Stock may be resold or otherwise transferred without registration under the Securities Act only in certain limited circumstances. In the absence of any effective registration statement covering the Series B Preferred Stock or an available exemption from registration under the Securities Act, the Series B Preferred Stock must be held indefinitely.

e. Legends. The Company may place appropriate and customary legends on the shares of the Series B Preferred Stock (and the Common Stock issuable upon conversion or pursuant to the terms thereof) held by each Holder setting forth the restrictions referred to in this Section 5 and any restrictions appropriate for compliance with U.S. federal securities Laws. Each Holder agrees with the Company that, other than to take into account any changes in applicable securities Laws, each share of the Series B Preferred Stock held by such Holder on the Closing Date may be notated with one or all of the following legends:

i. “THESE SECURITIES AND THE SECURITIES ISSUABLE UPON THE CONVERSION THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. THE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT (1) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT RELATING TO SUCH SECURITIES UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE STATE SECURITIES LAWS AND THE SECURITIES LAWS OF OTHER JURISDICTIONS.”

ii. Any legend required by the securities laws of any state to the extent such laws are applicable to the shares of the Series B Preferred Stock represented by the certificate, instrument, or book entry so legended.

f. Disclosure of Information. Such Holder has had an opportunity to discuss the Company’s business, management, financial affairs and the terms and conditions of the Series A Repurchase and the Share Exchange with the Company’s management. The foregoing, however, does not limit or modify the representations and warranties of the Company in Section 4 or the right of such Holder to rely thereon.

g. Regulatory Approvals. No notices, reports or other filings are required to be made by such Holder with, nor are any consents, registrations, approvals, permits or authorizations required to be obtained by such Holder from, any Governmental Entity in connection with the execution, delivery and performance of this Agreement by such Holder or the consummation of the Closing, except (a) for compliance with any applicable requirements of the Exchange Act, or (b) where the failure to so make or obtain would not, individually or in the aggregate, reasonably be likely to prevent, materially delay or materially impair the consummation of the Closing.

 

6


h. No Additional Representation; Access to Information.

i. Each Holder acknowledges and agrees that except as expressly set forth in Section 4, the Company is not making and has not made any representation or warranty, express or implied, at Law or in equity, with respect to this Agreement, the Company, the Series A Preferred Stock (and the Common Stock issuable upon conversion or pursuant to the terms thereof), the Series B Preferred Stock (and the Common Stock issuable upon conversion or pursuant to the terms thereof), any other securities of the Company or the businesses, operations, assets, liabilities, employees, employee benefit plans, conditions or prospects of the Company or any information provided or made available to such Holder in connection therewith (including any forecasts, projections, estimates or budgets), the Transactions or the accuracy, completeness or adequacy of any publicly available information regarding the Company and its Affiliates, including any warranty with respect to merchantability or fitness for any particular purpose, and all other representations or warranties are hereby expressly disclaimed.

ii. Each Holder has relied solely on its own independent investigation in evaluating the Company and the value of the Series A Preferred Stock (and the Common Stock issuable upon conversion or pursuant to the terms thereof) and the Series B Preferred Stock (and the Common Stock issuable upon conversion or pursuant to the terms thereof) in determining to proceed with the Transactions and has not relied on any assertions made by the Company or its affiliates or any person acting on their behalf. Each Holder understands the disadvantage to which it is subject on account of the disparity of information as between the Company and the Holders with respect to the business and financial performance of the Company. Each Holder has access to all information that it believes to be necessary, sufficient or appropriate in connection with the Transactions. Each Holder has undertaken such independent investigation of the Company as in its judgment is appropriate to make an informed decision with respect to the Transactions, and has made its own decision to consummate the Transactions based on its own independent review and consultations with such investment, legal, tax, accounting and other advisers as it has deemed necessary and without reliance on any express or implied representation or warranty of the Company (except as expressly set forth herein). Each Holder understands that the Company has and may come into possession of material non-public information with respect to the Company not known to the Holders, including, without limitation, information with respect to the Company’s financial performance for the year ended December 31, 2020. Each Holder acknowledges that any such material non-public information not known to it may impact the value of the Company, the Series A Preferred Stock (and the Common Stock issuable upon conversion or pursuant to the terms thereof) and the Series B Preferred Stock (and the Common Stock issuable upon conversion or pursuant to the terms thereof) or may otherwise be material to such Holder’s decision to enter into this Agreement and to consummate the Transactions. Each Holder acknowledges that it is proceeding with the Transactions knowingly and voluntarily, without access to or the benefit of such information. Each Holder hereby waives any right to rescind or invalidate the repurchase and exchange of the Series A Preferred Stock (and the Common Stock issuable upon conversion or pursuant to the terms thereof) or the issuance of the Series B Preferred Stock (and the Common Stock issuable upon conversion or pursuant to the terms thereof) or to seek any damages or remuneration from the Company based on the Company’s possession of any information regarding the Company or the lack of possession of any information regarding the Company by each Holder.

 

7


6. Additional Agreements.

a. Registration Statement. The Company shall use its commercially reasonable efforts to register the resale of the Common Stock issuable upon the conversion of the Series B Preferred Stock within six (6) months following the Closing, including, without limitation, by filing a new registration statement, a post-effective amendment to an existing registration statement or a prospectus supplement under an existing registration statement. From and after the Closing, the Registration Rights Agreement shall remain in full force and effect and the shares of Common Stock issuable upon the conversion of the Series B Preferred Stock shall constitute the Registrable Securities thereunder.

b. DTC Eligibility. The Company agrees to cooperate in good faith and use commercially reasonable efforts to (i) work with the Holders to take any actions reasonably necessary to cause the shares of the Series B Preferred Stock to be deposited in book-entry form by or on behalf of the Company and registered in the name of Cede & Co., as nominee of DTC and (ii) facilitate eligibility of the shares of the Series B Preferred Stock for clearance and settlement through DTC, in each case, within sixty (60) days after the Closing Date (or such later date as the Holders shall reasonably agree). Prior to such time, the shares of the Series B Preferred Stock will be evidenced in the form of certificates in the name of the initial Holders.

7. Closing Conditions.

a. Conditions to the Holders’ Obligations at Closing. The obligations of the Holders to consummate the transactions contemplated by this Agreement are subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived by the Holders:

i. No Prohibition. No Order (whether temporary, preliminary or permanent) of a Governmental Entity of competent jurisdiction or other applicable Law shall be in effect which makes illegal, restrains, enjoins or otherwise prohibits or prevents the Closing.

ii. Qualifications. All authorizations, approvals or permits, if any, of any Governmental Entity that are required in connection with the lawful issuance and sale or exchange of the Series A Preferred Stock and Series B Preferred Stock pursuant to this Agreement shall have been obtained and be effective as of the Closing.

iii. Representations and Warranties of the Company. The representations of the warranties of the Company set forth in Section 4 shall be true and correct in all material respects as of the date of this Agreement and as of the Closing Date as though made on and as of such date.

iv. Performance. The Company shall have performed and complied in all material respects with all covenants, agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by the Company on or before the Closing.

 

8


v. Compliance Certificate. The Company shall have delivered to the Holders a certificate of a duly authorized officer of the Company certifying that the conditions specified in Sections 7(a)(i)-(iv) have been fulfilled.

vi. Secretary’s Certificate. The Secretary of the Company shall have delivered to the Holders a certificate certifying (A) the Certificate of Incorporation, including the Series B Certificate of Designations, (B) the Bylaws, (C) the resolutions of the Board of Directors approving the Series A Repurchase and the Share Exchange.

b. Conditions to the Company’s Obligations at Closing. The obligations of the Company to consummate the transactions contemplated by this Agreement are subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived by the Company:

i. Other Financing. Prior to or concurrently with the Closing, the Company shall have closed on debt financing sufficient to pay in full the Purchase Price.

ii. No Prohibition. No Order (whether temporary, preliminary or permanent) of a Governmental Entity of competent jurisdiction or other applicable Law shall be in effect which makes illegal, restrains, enjoins or otherwise prohibits or prevents the Closing.

iii. Qualifications. All authorizations, approvals or permits, if any, of any Governmental Entity that are required in connection with the lawful issuance and sale or exchange of the Series A Preferred Stock and Series B Preferred Stock pursuant to this Agreement shall have been obtained and effective as of the Closing.

iv. Representations and Warranties of the Holders. The representations of the warranties of the Holders set forth in Section 5 shall be true and correct in all material respects as of the date of this Agreement and as of the Closing Date as though made on and as of such date.

v. Performance. The Holders shall have performed and complied in all material respects with all covenants, agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by the Holders on or before the Closing.

8. Costs. Each party to this Agreement shall bear its respective costs and expenses in connection with the transactions contemplated by this Agreement.

9. Definitions.

a. “Affiliate” means, with respect to any specified Person, any other Person who, directly or indirectly, controls, is controlled by, or is under common control with such Person, including, without limitation, any general partner, managing member, officer or director of such Person or any venture capital fund now or hereafter existing that is controlled by one or more general partners or managing members of, or shares the same management company with, such Person.

 

9


b. “Certificate of Incorporation” means the Second Amended and Restated Certificate of Incorporation of the Company, as amended as of the date hereof and after giving effect to the filing of the Series B Certificate of Designations.

c. “Closing Per Share Price” means the quotient of (a) the aggregate Liquidation Preference of the 1,000,000 shares of the Series A Preferred Stock to be repurchased by the Company pursuant to this Agreement, plus all accrued and unpaid dividends on such 1,000,000 shares of the Series A Preferred Stock through the Closing Date, divided by (b) 1,000,000.

d. “Common Stock” means the Company’s Common Stock, par value $0.01 per share.

e. “DTC” means the Depository Trust Company or any successor thereto.

f. “DWAC” means a deposit/withdrawal at custodian.

g. “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

h. “Governmental Entity” means any: (i) federal, state, local, municipal, foreign or other government; (ii) governmental, quasi-governmental, supranational or regulatory authority (including any governmental division, department, agency, commission, instrumentality, organization, unit or body and any court or other tribunal); or (iii) self-regulatory organization (including the New York Stock Exchange).

i. “Law” means any federal, national, supranational, state, provincial, local or similar statute, law, ordinance, regulation, rule, code, order, requirement or rule of law (including common law).

j. “Lien” means any lien, charge, pledge, mortgage, easement, hypothecation, usufruct, deed of trust, security interest, claim or other encumbrance, other than, in each case, restrictions on transfer arising solely under applicable federal and state securities Laws.

k. “Liquidation Preference” means the Liquidation Preference of the Series A Preferred Stock as such term is defined in the Certificate of Incorporation.

l. “Order” means any judgment, order, decision, writ, injunction, decree, stipulation or legal or arbitration award of, or promulgated or issued by, any Governmental Entity.

m. “Person” means any individual, corporation, partnership, trust, limited liability company, association or other entity.

n. “Registration Rights Agreement” means that certain Registration Rights Agreement, dated as of November 15, 2016, between the Company, the Holders and Southeastern.

 

10


o. “Representative” means, with respect to any Person, the directors, officers, employees, investment bankers, financial advisors, attorneys, accountants or other advisors, agents or representatives of such Person.

p. “Registrable Securities” has the meaning assigned to it in the Registration Rights Agreement.

q. “SEC” means the U.S. Securities and Exchange Commission.

r. “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

s. “Series B Certificate of Designations” means the Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of the Company in substantially the form of Exhibit D hereto.

[Remainder of Page Intentionally Blank]

 

11


IN WITNESS WHEREOF, the Company, the Holders and Southeastern have executed this Agreement as of the date first written above.

 

COMPANY:
EASTMAN KODAK COMPANY
By:   /s/ David E. Bullwinkle
Name:   David E. Bullwinkle
Title:   Chief Financial Officer and Senior Vice President


SOUTHEASTERN ASSET MANAGEMENT, INC.
By:   /s/ Andrew R. McCarroll
Name:   Andrew R. McCarroll
Title:   General Counsel


HOLDERS:
LONGLEAF PARTNERS SMALL-CAP FUND
By:   SOUTHEASTERN ASSET MANAGEMENT, INC.
Acting as Investment Counsel
By:   /s/ Andrew R. McCarroll
Name:   Andrew R. McCarroll
Title:   General Counsel
C2W PARTNERS MASTER FUND LIMITED
By:   SOUTHEASTERN ASSET MANAGEMENT, INC.
Acting as Investment Advisor
By:   /s/ Andrew R. McCarroll
Name:   Andrew R. McCarroll
Title:   General Counsel
DESERET MUTUAL PENSION TRUST
By:   SOUTHEASTERN ASSET MANAGEMENT, INC.
Acting as Investment Adviser
By:   /s/ Andrew R. McCarroll
Name:   Andrew R. McCarroll
Title:   General Counse

Exhibit 10.2

EXECUTION VERSION

 

 

 

SERIES C PREFERRED STOCK PURCHASE AGREEMENT

dated as of February 26, 2021

by and among

EASTMAN KODAK COMPANY

and

GO EK VENTURES IV, LLC

 

 

 

 


TABLE OF CONTENTS

 

         Page  
  ARTICLE I   
  DEFINITIONS   

1.1

 

Definitions

     1  
  ARTICLE II   
  PURCHASE; CLOSING   

2.1

 

Authorization, Sale and Issuance of Series C Preferred Stock

     5  

2.2

 

Closing

     6  
  ARTICLE III   
  REPRESENTATIONS AND WARRANTIES OF THE COMPANY   

3.1

 

Organization; Qualifications

     7  

3.2

 

Capitalization

     7  

3.3

 

Authorization

     8  

3.4

 

Valid Issuance of Shares

     9  

3.5

 

Governmental Consents and Filings

     9  

3.6

 

Compliance with Laws

     9  

3.7

 

Litigation

     10  

3.8

 

Intellectual Property

     10  

3.9

 

Compliance with Other Instruments

     10  

3.10

 

Agreements; Actions

     11  

3.11

 

Certain Transactions

     11  

3.12

 

No Bad Actor Disqualification

     11  

3.13

 

Rights of Registration and Voting Rights

     11  

3.14

 

Property

     11  

3.15

 

Financial Statements

     12  

3.16

 

Changes

     12  

3.17

 

Tax Returns and Payments

     12  

3.18

 

Insurance

     12  

3.19

 

Permits

     13  

3.20

 

Corporate Documents

     13  

3.21

 

Environmental Laws

     13  

3.22

 

Company Reports

     14  

3.23

 

Private Placement

     14  

3.24

 

NYSE

     14  

3.25

 

Foreign Corrupt Practices Act

     14  

3.26

 

Data Privacy

     15  

 

i


  TABLE OF CONTENTS   
  (continued)   

 

         Page  

3.27

 

No Rights Agreement; Anti-Takeover Provisions

     15  

3.28

 

Debt and Common Equity Financing

     15  

3.29

 

Series A Repurchase and Exchange

     16  

3.30

 

No Brokers or Finders

     16  

3.31

 

No Additional Representations

     16  
  ARTICLE IV   
  REPRESENTATIONS AND WARRANTIES OF THE PURCHASER   

4.1

 

Organization; Qualifications

     17  

4.2

 

Authorization

     17  

4.3

 

Registered Securities; Purchase Entirely for Own Account

     17  

4.4

 

Disclosure of Information

     17  

4.5

 

Legends

     17  

4.6

 

Accredited Investor

     18  

4.7

 

No General Solicitation

     18  

4.8

 

Regulatory Approvals

     18  

4.9

 

Sufficiency of Funds

     18  

4.10

 

Ownership of Common Stock

     18  

4.11

 

No Additional Representation; Inspection

     18  
  ARTICLE V   
  ADDITIONAL AGREEMENTS   

5.1

 

Filings; Other Actions

     19  

5.2

 

Information Regarding Deemed Dividends

     20  

5.3

 

Public Disclosure

     20  

5.4

 

Use of Proceeds

     20  

5.5

 

Board Representation

     20  

5.6

 

Information Rights

     22  

5.7

 

Protective Provisions

     22  

5.8

 

Commercially Reasonable Efforts to Close

     23  
  ARTICLE VI   
  CLOSING   

6.1

 

Conditions to the Purchaser’s Obligations at the Initial Closing

     23  

6.2

 

Conditions to the Purchaser’s Obligations at the Second Closing

     25  

6.3

 

Conditions to the Company’s Obligations at the Initial Closing

     26  

6.4

 

Conditions to the Company’s Obligations at the Second Closing

     27  

 

ii


  TABLE OF CONTENTS   
  (continued)   

 

         Page  
  ARTICLE VII   
  TERMINATION   

7.1

 

Termination

     28  

7.2

 

Effects of Termination

     28  

7.3

 

Non-Recourse

     28  
  ARTICLE VIII   
  MISCELLANEOUS   

8.1

 

Survival

     28  

8.2

 

Successors and Assigns; No Third Party Beneficiaries

     29  

8.3

 

Governing Law

     29  

8.4

 

Counterparts

     29  

8.5

 

Interpretation

     29  

8.6

 

Notices

     30  

8.7

 

No Finder’s Fees

     30  

8.8

 

Fees and Expenses

     31  

8.9

 

Attorneys’ Fees

     31  

8.10

 

Amendments and Waivers

     31  

8.11

 

Severability

     31  

8.12

 

Delays or Omissions

     31  

8.13

 

Entire Agreement

     31  

8.14

 

Dispute Resolution

     31  

8.15

 

No Commitment for Additional Financing

     32  
EXHIBIT A - SCHEDULE OF PURCHASERS      A-1  
EXHIBIT B - FORM OF SERIES C CERTIFICATE OF AMENDMENT      B-1  
EXHIBIT C - FORM OF SERIES C REGISTRATION RIGHTS AGREEMENT      C-1  

 

 

iii


SERIES C PREFERRED STOCK PURCHASE AGREEMENT

THIS SERIES C PREFERRED STOCK PURCHASE AGREEMENT (this “Agreement”), is made and entered into as of the 26th day of February, 2021, by and among Eastman Kodak Company, a New Jersey corporation (the “Company”) and the investor listed on Exhibit A to this Agreement (the “Purchaser”).

RECITALS

WHEREAS, the Company desires to sell and issue to the Purchaser, and the Purchaser desires to purchase and accept from the Company, in the aggregate, 1,000,000 preferred shares of the Company, designated as 5.00% Series C Convertible Preferred Stock, no par value per share (the “Series C Preferred Stock”), having the terms set forth in the Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of the Company, as amended (the “Certificate of Incorporation”) in the form attached hereto as Exhibit B (the “Series C Certificate of Amendment”), subject to the terms and conditions set forth in this Agreement; and

WHEREAS, in connection with the issuance of the Series C Preferred Stock, the Company and the Purchaser will enter into the Registration Rights Agreement, to be dated as of the Closing Date (as defined below), in the form attached hereto as Exhibit C (the “Series C Registration Rights Agreement”).

NOW, THEREFORE, in consideration of the premises, and of the representations, warranties, covenants and agreements set forth herein, the parties agree as follows:

ARTICLE I

DEFINITIONS

1.1 Definitions. As used in this Agreement, the following terms have the following meanings:

(a) “Additional Liquidation Preference” has the meaning assigned to it in the Series C Certificate of Amendment.

(b) “Antitakeover Provisions” means the provisions of any rights plan or agreement, poison pill (including any distribution under a rights plan or agreement), or any control share acquisition, business combination, interested stockholder, fair price, moratorium or similar anti-takeover provision under the Certificate of Incorporation, the Bylaws, or applicable law of the jurisdiction of incorporation of the Company.

(c) “Affiliate” means (i) with respect to any specified Person other than Purchaser, any other Person who, directly or indirectly, controls, is controlled by, or is under common control with such Person, including, without limitation, any general partner, managing member, officer or director of such Person or any venture capital fund now or hereafter existing that is controlled by one or more general partners or managing members of, or shares the same management company with, such Person and (ii) with respect to Purchaser, any other Person, directly or indirectly, at least a majority of the equity and voting interests of which are beneficially owned by B. Thomas Golisano or his heirs, legal representatives, successors.


(d) “Closing” means the Initial Closing or the Second Closing, as the context requires.

(e) “Closing Date” means the Initial Closing Date or the Second Closing Date, as the context requires.

(f) “Code” means the Internal Revenue Code of 1986, as amended.

(g) “Company Reports” means the Company’s (i) Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 17, 2020 (including information specifically incorporated by reference into the Annual Report on Form 10-K from the Company’s proxy statement on Schedule 14A filed with the SEC on April 9, 2020), (ii) Quarterly Report on Form 10-Q filed with the SEC on May 12, 2020, (iii) Quarterly Report on Form 10-Q filed with the SEC on August 11, 2020, (iv) Quarterly Report on Form 10-Q filed with the SEC on November 10, 2020 and (v) Current Reports on Form 8-K filed or furnished, as the case may be, with the SEC on March 17, 2020, March 26, 2020, April 16, 2020, May 12, 2020, May 27, 2020 (as amended), August 3, 2020, August 7, 2020, August 11, 2020, September 16, 2020, September 30, 2020, October 9, 2020, November 10, 2020 and December 29, 2020.

(h) “Company Intellectual Property” means all intellectual property rights and proprietary rights of any kind, including in or with respect to patents, patent applications, trademarks, trademark applications, service marks, service mark applications, tradenames, copyrights, trade secrets, domain names, mask works, know-how processes, in each case, that are used by the Company and material to its business as currently conducted.

(i) “Company knowledge” or similar phrases (such as “Company’s knowledge” or to the “knowledge of the Company”) means the actual knowledge of the executive officers of the Company, in each case after due inquiry.

(j) “Dividend Payment Date” means January 15, April 15, July 15 and October 15 of each year, commencing on April 15, 2021.

(k) “Dividend Period” means the period commencing on, and including, a Dividend Payment Date and ending on, and including, the day immediately preceding the next succeeding Dividend Payment Date, with the exception that the first Dividend Period shall commence on, and include, the Original Issue Date and end on and include April 14, 2021.

(l) “DFC Related Matters” means investigations, proceedings, and claims arising out or related to the International Development Finance Corporation announcement on July 28, 2020 related to the Company and any events leading up to such announcement..

(m) “Governmental Entity” means any: (i) federal, state, local, municipal, foreign or other government; (ii) governmental, quasi-governmental, supranational or regulatory authority (including any governmental division, department, agency, commission, instrumentality, organization, unit or body and any court or other tribunal); or (iii) self-regulatory organization (including the New York Stock Exchange).

 

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(n) “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

(o) “GAAP” means accounting principles generally accepted in the United States of America.

(p) “HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

(q) “Junior Stock” means all classes of the Company’s Common Stock and any other class of capital stock or series of preferred stock of the Company, the terms of which do not expressly provide that such class or series ranks senior to or pari passu with Series C Preferred Stock as to dividend rights or rights upon the Company’s liquidation, winding-up or dissolution.

(r) “Key Employee” means any executive-level employee (including division director and vice president-level positions).

(s) “Law” means any federal, national, supranational, state, provincial, local or similar statute, law, ordinance, regulation, rule, code, order, requirement or rule of law (including common law).

(t) “Liquidation Preference” has the meaning assigned to it in the Series C Certificate of Amendment.

(u) “Material Adverse Effect” means any circumstance, development, effect, change, event, occurrence or state of facts that, individually or in the aggregate, has had, or would reasonably be expected to have, a material adverse effect on (1) the business, results of operations, assets, or financial condition of the Company and its subsidiaries taken as a whole; provided, however, that none of the following, and no circumstance, development, effect, change, event or occurrence arising out of, or resulting from, the following, shall constitute or be taken into account, individually or in the aggregate, in determining whether a Material Adverse Effect has occurred or may occur: any effect, change, event or occurrence that results from or arises in connection with (A) changes in or conditions generally affecting the industry in which the Company and its subsidiaries operate, (B) general economic or regulatory, legislative or political conditions or securities, credit, financial or other capital markets conditions in any jurisdiction, (C) exchange rate conditions or fluctuations in any jurisdiction, (D) any failure, in and of itself, by the Company and its subsidiaries to meet any internal or published projections, forecasts, estimates or predictions in respect of revenues, earnings or other financial or operating metrics for any period, (E) geopolitical conditions, the outbreak or escalation of hostilities, any acts of war (whether or not declared), sabotage, terrorism or man-made disaster, or any escalation or worsening of any of the foregoing, (F) any volcano, tsunami, pandemic, epidemic or public health emergency (including, for the avoidance of doubt, the COVID-19 pandemic, heightened governmental and social responses thereto, and changes in general economic conditions with respect to or as a result of the COVID-19 pandemic, even if foreseeable), hurricane, tornado, windstorm, flood, earthquake

 

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or other natural disaster, (G) the execution and delivery of this Agreement or the public announcement or pendency of the Transactions, (H) any change, in and of itself, in the market price, credit rating or trading volume of the Company’s securities, (I) in GAAP (or authoritative interpretation thereof), including accounting and financial reporting pronouncements by the SEC and the Financial Accounting Standards Board or applicable Law, or (J) any action required to be taken by the Company, or that the Company is required to take or to cause one of its subsidiaries to take pursuant to the terms of the Transaction Agreements (it being understood that the exceptions in clauses (D) and (H) shall not be taken into account in determining whether or not the underlying cause of any such failure or change referred to therein (if not otherwise falling within any of the exceptions provided by clauses (A) through (J) hereof) gives rise to a Material Adverse Effect); provided, that the exceptions in clauses (A), (B), (E) and (F) above shall not apply to the extent such circumstance, development, effect, change, event, occurrence or state of facts has a materially disproportionate impact on the Company and its subsidiaries, taken as a whole, relative to other participants in any of the industries in which the Company and its subsidiaries operate, or (2) the ability of the Company and its subsidiaries to timely consummate the Transactions.

(v) “Order” means any judgment, order, decision, writ, injunction, decree, stipulation or legal or arbitration award of, or promulgated or issued by, any Governmental Entity.

(w) “Original Issue Date” means the first date on which the Series C Preferred Stock is issued.

(x) “Person” means any individual, corporation, partnership, trust, limited liability company, association or other entity.

(y) “PIK Shares” has the meaning assigned to it in the Series C Certificate of Amendment.

(z) “Preferred Stock” means the Series A Preferred Stock, the Series B Preferred Stock and the Series C Preferred Stock.

(aa) “Representative” means, with respect to any Person, the directors, officers, employees, investment bankers, financial advisors, attorneys, accountants or other advisors, agents or representatives of such Person.

(bb) “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

(cc) “Series A Preferred Stock” means the Company’s 5.5% Series A Convertible Preferred Stock, no par value per share, the terms of which are set forth in a Certificate of Amendment to the Certificate of Incorporation dated November 14, 2016 (the “Series A Certificate of Amendment”).

(dd) “Series B Preferred Stock” means the Company’s 4.0% Series B Convertible Preferred Stock, no par value per share, the terms of which will be as set forth in the form of Certificate of Amendment to the Certificate of Incorporation annexed to the Series A Repurchase and Exchange Agreement as Exhibit A (the “Series B Certificate of Amendment”).

 

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(ee) “Series C Preferred Transaction Agreements” means this Agreement, the Series C Certificate of Amendment and the Series C Registration Rights Agreement.

(ff) “Series C Preferred Transactions” means the transactions contemplated by this Agreement and the Series C Registration Rights Agreement.

(gg) “Specified Public Filings” means the quarterly report on Form 10-Q of the Borrower for each of the fiscal quarters ended on March 31, 2020, June 30, 2020 and September 30, 2020.

(hh) “subsidiary” means, with respect to any person, any corporation, partnership, joint venture, limited liability company or other entity (x) of which such person or a subsidiary of such person is a general partner or (y) of which a majority of the voting securities or other voting interests, or a majority of the securities or other interests of which having by their terms ordinary voting power to elect a majority of the board of directors or persons performing similar functions with respect to such entity, is directly or indirectly owned by such person or one or more subsidiaries thereof.

(ii) “Transaction Agreements” means the Series C Preferred Transaction Agreements, the Debt and Common Equity Agreements and the Series A Repurchase and Exchange Documents.

(jj) “Transactions” means the transactions contemplated by the Transaction Agreements.

ARTICLE II

PURCHASE; CLOSING

2.1 Authorization, Sale and Issuance of Series C Preferred Stock.

(a) The Company has, or before the Initial Closing shall have, duly authorized the creation, sale and issuance pursuant to the terms and conditions hereof of the Shares having the rights, restrictions, privileges and preferences set forth in the Series C Certificate of Amendment to be filed with the Department of Treasury of the State of New Jersey in the form attached hereto as Exhibit B subject to clerical and administrative amendments only.

(b) Subject to the terms and conditions of this Agreement, the Purchaser agrees to purchase at the Initial Closing and the Company agrees to sell and issue to the Purchaser at the Initial Closing the number of shares of Series C Preferred Stock set forth opposite the Purchaser’s name on Exhibit A to be sold at the Initial Closing (the “Initial Closing Shares”), at a purchase price of $100 per share (subject to adjustment in the event of a stock split, stock dividends or similar events) (the “Per Share Purchase Price”). In addition, subject to the terms and conditions of this Agreement, the Purchaser agrees to purchase at a Second Closing and the

 

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Company agrees to sell and issue to the Purchaser at the Second Closing the number of shares of Series C Preferred Stock set forth opposite the Purchaser’s name on Exhibit A (the “Second Closing Shares”) at a purchase price per share equal to the Per Share Purchase Price. The shares of Series C Preferred Stock issued to the Purchaser pursuant to this Agreement shall be referred to in this Agreement as the “Shares”, the shares of Series C Preferred Stock issuable as dividends with respect to the Shares shall be referred to as the “PIK Shares” and the shares of Common Stock issuable upon conversion of the Shares and the PIK Shares shall be referred to as the “Conversion Shares”. The aggregate cash amount equal to the product of the Per Share Purchase Price multiplied by the numbers of Shares shall be referred to in this Agreement as the “Purchase Price.”

2.2 Closing. Subject to the terms and conditions of this Agreement, the initial closing of the purchase and sale of the Shares by the Purchaser and the Company pursuant to this Agreement (the “Initial Closing”) shall be held at 10:00 a.m. New York time, remotely by the exchange of documents and signatures (or their electronic counterparts) as soon as reasonably practicable (which may be the date hereof) after the conditions set forth in Article VI to the Initial Closing (other than those conditions that by their nature are to be satisfied at the Closing, but subject to their satisfaction) are satisfied or waived, or at such other date, time and place as the Company and the Purchaser mutually agree in writing (the “Initial Closing Date”). Subject to the terms and conditions of this Agreement, the second closing of the purchase and sale of the Shares by the Purchaser and the Company pursuant to this Agreement (the “Second Closing”) shall be held at 10:00 a.m. New York time, remotely by the exchange of documents and signatures (or their electronic counterparts) as soon as reasonably practicable after the conditions set forth in Article VI to the Second Closing (other than those conditions that by their nature are to be satisfied at the Closing, but subject to their satisfaction) are satisfied or waived, or at such other date, time and place as the Company and the Purchaser mutually agree in writing (the “Second Closing Date”).

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

Except (a) as set forth in any Company Report, including the exhibits thereto (but (i) without giving effect to any amendment thereof filed with, or furnished to, the SEC on or after the date hereof, (ii) excluding any disclosures contained under the heading “Risk Factors” and any disclosure of risks included in any “forward-looking statements” disclaimer or in any other section to the extent they are forward-looking statements or cautionary, predictive or forward-looking in nature, and (iii) without giving effect to the Company Reports with respect to Sections 3.1 (Organization; Qualifications), 3.2 (Capitalization), 3.3 (Authorization), 3.4 (Valid Issuance of Shares) (for which no exceptions shall apply)) and (b) DFC Related Matters, which exceptions shall be deemed to be part of the representations and warranties made hereunder, the Company represents and warrants to the Purchaser, as of the date hereof and as of the Closing Date, that:

For purposes of these representations and warranties (other than those in Sections 3.1, 3.2, 3.3 and 3.4), the term the “Company” shall include any subsidiaries of the Company, unless otherwise noted herein.

 

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3.1 Organization; Qualifications. 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 to so register or qualify in a jurisdiction outside of the jurisdiction of its incorporation would not, individually or in the aggregate, have a Material Adverse Effect.

3.2 Capitalization.

(a) Immediately prior to the Initial Closing, the authorized capital of the Company consists of 500,000,000 shares of Common Stock and 60,000,000 shares of Preferred Stock. As of February 22, 2020, there were 77,364,845 shares of Common Stock and 2,000,000 shares of Series A Preferred Stock issued and outstanding All of the outstanding shares of Common Stock and Series A Preferred Stock have been duly authorized, are fully paid and nonassessable and were issued in compliance with all applicable federal and state securities laws. As of February 22, 2020, the Company held 711,791 shares of Common Stock in its treasury.

(b) Immediately prior to the Initial Closing, the rights, privileges and preferences of the Series C Preferred Stock are as stated in the Series C Certificate of Amendment and as provided by the New Jersey Business Corporation Law, the rights, privileges and preferences of the Series B Preferred Stock are as stated in the Series B Certificate of Amendment and as provided by the New Jersey Business Corporation Law, and the rights, privileges and preferences of the Series A Preferred Stock are as stated in the Series A Certificate of Amendment, which shall be cancelled and no longer in effect as of the consummation of the transactions contemplated by the Series A Repurchase and Exchange Documents.

(c) Immediately following the Initial Closing, after giving effect to the Transactions, the authorized capital of the Company will consist of (i) 2,000,000 shares of Series A Preferred Stock, of which zero (0) shares are issued and outstanding, (ii) 1,000,000 shares of Series B Preferred Stock, of which 1,000,000 shares are issued and outstanding, (iii) 1,000,000 shares of Series C Preferred Stock, of which 750,000 shares are issued and outstanding (which shall be increased to 1,000,000 shares at the Second Closing and further increased by the number of such shares issued from time to time as dividends payable in kind pursuant to the terms of such shares), and (iv) 500,000,000 shares of Common Stock, of which 77,364,845 shares are issued and outstanding (as of February 12, 2021), 0 shares are reserved for issuance upon conversion of the Series A Preferred Stock, 11,428,572 shares are reserved for issuance upon conversion of the Series B Preferred Stock, 17,220,000 shares are reserved for issuance upon conversion of the Series C Preferred Stock (including any PIK Shares), 3,410,500 shares are reserved for issuance upon conversion of the Convertible Notes (including any shares issuable with respect to interest payable in kind) and 8,000,000 shares are reserved for issuance under the Stock Plan as further described below.

(d) The Company has reserved 8,000,000 shares of Common Stock for issuance to officers, directors, employees and consultants of the Company pursuant to its 2013 Omnibus Incentive Plan, as amended and restated, duly adopted by the Board of Directors of the Company (the “Board of Directors”) and approved by the Company stockholders (the “Stock Plan”). Of such reserved shares of Common Stock, as of the date of this Agreement: 2,646,308 shares have been issued pursuant to or are subject to outstanding awards of restricted stock units, 9,749,404 shares have been issued pursuant to or are subject to outstanding awards of non-

 

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qualified stock options (which shares correspond to the equivalent of 4,493,061 shares of Common Stock for purposes of the Stock Plan under the terms of the counting provisions thereof), and 860,631 shares of Common Stock remain available for issuance to officers, directors, employees and consultants pursuant to the Stock Plan. The Company has filed with the SEC complete and accurate copies of the Stock Plan and forms of agreements used thereunder.

(e) Other than under the Stock Plan, the phantom stock rights of the directors of the Company or pursuant to the conversion privileges of (i) the Shares to be issued under this Agreement and (ii) the Series B Preferred Stock, there are no outstanding options, warrants, rights (including conversion or preemptive rights, put rights, call rights, phantom equity, anti-dilutive rights, and rights of first refusal or similar rights), pledges or agreements, orally or in writing, to purchase or acquire from the Company any shares of Common Stock or Preferred Stock, or any securities convertible into or exchangeable for shares of Common Stock or Preferred Stock.

(f) Except as set forth in the Certificate of Incorporation, as amended by the Series A Certificate of Amendment, the Company has no obligation (contingent or otherwise) to purchase or redeem any of its capital stock.

(g) Except for the Existing Registration Rights Agreements, none of the Company or any subsidiary is a party to any stockholders agreement, voting trust agreement, registration rights agreement or other similar agreement or understanding relating to any of the Company’s capital sock.

3.3 Authorization.

(a) All corporate action required to be taken by the Board of Directors and shareholders in order to authorize the Company to enter into the Transaction Agreements and consummate the Transactions, and to issue the Shares at the applicable Closings and to consummate the other Transactions, has been taken or will be taken prior to the Initial Closing.

(b) All corporate action required to be taken by the Board of Directors and shareholders in order to issue the Conversion Shares has been taken or will be taken prior to the Initial Closing. All action on the part of the officers of the Company necessary for the execution and delivery of the Series C Transaction Agreements, the performance of all obligations of the Company under the Series C Transaction Agreements to be performed as of the Initial Closing, and the issuance and delivery of the Shares at the applicable Closing has been taken or will be taken prior to the Initial Closing.

(c) The Series C Transaction Agreements, when or as executed and delivered by the Company, shall and do constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their respective terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or other laws of general application relating to or affecting the enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies, or (iii) to the extent the indemnification provisions contained in the Registration Rights Agreement may be limited by applicable federal or state securities laws (collectively, the “Bankruptcy and Equity Exception”).

 

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3.4 Valid Issuance of Shares.

(a) The Shares, when issued, sold and delivered in accordance with the terms and for the consideration set forth in this Agreement, and the PIK Shares and the Conversion Shares when issued in accordance with the Series C Certificate of Amendment will be validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under the Series C Transaction Agreements, applicable state and federal securities laws and liens or encumbrances created by or imposed by the Purchaser.

(b) Assuming the accuracy of the representations of the Purchaser in Article IV, and subject to the filings described in Section 3.5, below, the Shares will be issued in compliance with all applicable federal and state securities laws. The Series C Preferred Stock issuable as the PIK Shares and Common Stock issuable upon conversion of the Shares has been or will be duly reserved for issuance by the Initial Closing for the Shares to be sold at both Closings, and upon issuance in accordance with the terms of the Certificate of Incorporation, will be validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under the Series C Transaction Agreements, applicable federal and state securities laws and liens or encumbrances created by or imposed by the Purchaser.

(c) Assuming the accuracy of the representations of the Purchaser in Article IV, and subject to the filings described in Section 3.5, below, the PIK Shares and the Conversion Shares will be issued in compliance with all applicable federal and state securities laws. None of the issued and outstanding shares of capital stock of the Company have been, and none of the shares of capital stock to be issued pursuant to the Transaction will be, issued in violation of any agreement, arrangement or commitment to which the Company or any of its subsidiaries is a party or is subject to or in violation of any preemptive or similar rights of any person.

3.5 Governmental Consents and Filings. Assuming the accuracy of the representations made by the Purchaser in Article IV, no consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any Governmental Entity is required on the part of the Company in connection with the consummation of the Series C Transactions, except for (a) the filing of the Series C Certificate of Amendment with the Department of Treasury of the State of New Jersey, which will have been filed as of the Initial Closing, (b) compliance with any applicable requirements of the Exchange Act, the Securities Act and any other applicable U.S. state or federal securities, takeover or “blue sky” laws which shall be complied with in a timely manner, (c) compliance with any applicable rules of the New York Stock Exchange which shall be complied with in a timely manner, and (d) compliance with the applicable rules and regulations under the HSR Act which shall be complied with in a timely manner.

3.6 Compliance with Laws. The Company currently conducts, and have for the last three (3) years conducted, its business in accordance with all applicable Laws and the Company is not in violation of any such Law, in each case, except as would not, individually or in the aggregate, have a Material Adverse Effect.

 

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3.7 Litigation.

(a) There is no claim, action, suit, proceeding, arbitration, complaint, charge or investigation pending or, to the Company’s knowledge, currently threatened, against the Company or any officer, director or Key Employee of the Company arising out of their employment or board relationship with the Company that (a) would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect or (b) involves any of the Transaction Documents or the Transactions. The written disclosure provided to the Purchaser regarding the DFC Related Matters is true and accurate.

(b) Neither the Company nor, to the Company’s knowledge, any of its officers, directors or Key Employees is a party or is named as subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality (in the case of officers, directors or Key Employees, such as would affect the Company) that would, individually or in the aggregate, have a Material Adverse Effect. There is no action, suit, proceeding or investigation by the Company pending or threatened in writing (or any basis therefor known to the Company) involving the prior employment of any of the Company’s employees, their services provided in connection with the Company’s business, any information or techniques allegedly proprietary to any of their former employers or their obligations under any agreements with prior employers that would, individually or in the aggregate, have a Material Adverse Effect.

3.8 Intellectual Property. Except as would not, individually or in the aggregate, have a Material Adverse Effect, the Company owns or possesses or can acquire on commercially reasonable terms sufficient legal rights to all Company Intellectual Property without any known conflict with, or infringement of, the rights of others. To the Company’s knowledge, no product or service marketed or sold by the Company infringes, misappropriates or otherwise violates any intellectual property rights of any third party, except as would not, individually or in the aggregate, have a Material Adverse Effect. The Company has not received any communications alleging that the Company has violated, or, by conducting its business, would violate any of the intellectual property rights of any other Person that would, individually or in the aggregate, have a Material Adverse Effect. The Company has obtained and possesses valid licenses to use all of the software programs present on the computers and other software-enabled electronic devices that it owns or leases or that it has otherwise provided to its employees for their use in connection with the Company’s business, except as would not, individually or in the aggregate, have a Material Adverse Effect.

3.9 Compliance with Other Instruments. The Company is not in violation or default (a) of any provisions of the Certificate of Incorporation or the Fourth Amended and Restated By-laws of the Company (the “Bylaws”), (b) of any instrument, judgment, order, writ or decree, (iii) under any note, indenture or mortgage, or (c) under any lease, agreement, contract or purchase order to which it is a party or by which it is bound, or (d) of any provision of federal or state statute, rule or regulation applicable to the Company, except, in the case of clauses (b), (c) and (d) above, for any such violation that would not have a Material Adverse Effect. The execution, delivery and performance of the Transaction Agreements and the consummation of the Transactions will not result in any such violation or be in conflict with or constitute, with or without the passage of time and giving of notice, either (a) a default under any such provision, instrument, judgment, order, writ, decree, contract or agreement, or (b) an event which results in the creation of any lien, charge or encumbrance upon any assets of the Company or the suspension, revocation, forfeiture, or nonrenewal of any permit or license applicable to the Company, except on the case of (b), (c) and (d) as would not, individually or in the aggregate, have a Material Adverse Effect.

 

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3.10 Agreements; Actions. Other than between any wholly owned subsidiary of the Company and the Company or another wholly owned subsidiary of the Company, since September 30, 2020, (a) the Company has not incurred any material liabilities (contingent or otherwise) other than (i) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice, (ii) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in the Company Reports (b) the Company has not altered its method of accounting or the manner in which it keeps its accounting books and records in any material respect, (c) the Company has not declared or made any dividend or distribution of cash, shares of capital stock or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock (other than in connection with the Series A Repurchase and Exchange) and (d) the Company has not issued any equity securities, except pursuant to the Company’s Stock Plan or in connection with the Transactions. The Company has not taken any steps, and does not currently expect to take any steps, to seek protection pursuant to any bankruptcy Law nor does the Company have any knowledge or reason to believe that its creditors intend to initiate involuntary bankruptcy or insolvency proceedings. The Company is financially solvent and is generally able to pay its debts as they become due.

3.11 Certain Transactions. Other than (a) standard employee benefits generally made available to all employees, (b) employment contracts entered into in the ordinary course of business, and (c) the purchase or award of shares of the Company’s capital stock, awards of restricted stock units and the issuance of options to purchase shares of Common Stock, in each instance, approved in the written minutes of the Board of Directors or an authorized committee thereof, there are no agreements, understandings or proposed transactions between the Company and any of its officers or directors. The Company is not indebted, directly or indirectly, to any of its directors, officers or employees or to their respective spouses or children or to any Affiliate of any of the foregoing, other than in connection with indemnification obligations pursuant to the Company’s governing documents employment agreements with directors or officers entered into in the ordinary course of business for ongoing matters, expenses or advances of expenses incurred in the ordinary course of business or employee relocation expenses and for other customary employee benefits made generally available to all employees.

3.12 No Bad Actor Disqualification. No “Bad Actor” disqualifying event described in Rule 506(d)(1)(i) to (viii) of the Securities Act (a “Disqualification Event”) is applicable to the Company, except for a Disqualification Event as to which Rule 506(d)(2)(ii-iv) or (d)(3) is applicable.

3.13 Rights of Registration and Voting Rights. Except as provided in the Series C Preferred Registration Rights Agreement, that certain Registration Rights Agreement, dated as of November 15, 2016 (the “Series A Preferred Registration Rights Agreement”), that certain Registration Rights Agreement, dated as of February 26, 2021 (the “2021 Registration Rights Agreement”) and that certain Registration Rights Agreement, dated as of September 3, 2013 (collectively, with the Series A Preferred Registration Rights Agreement and the 2021 Registration Rights Agreement, the “Existing Registration Rights Agreements”), the Company is not under any obligation to register under the Securities Act any of its currently outstanding securities or any securities issuable upon exercise or conversion of its currently outstanding securities.

3.14 Property. Except as would not, individually or in the aggregate, have a Material Adverse Effect, the Company has good title to, or valid leasehold interests in or rights to use, all its real and personal property material to its business taken as a whole, free of any liens, claims or encumbrances other than those of the lessors of such property or assets.

 

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3.15 Financial Statements.

(a) Prior to the date hereof, the Company has filed with the SEC its audited financial statements as of December 31, 2019 and for the fiscal years ended December 31, 2019 and December 31, 2018, and provided to Purchaser its unaudited financial statements (including balance sheet, income statement and statement of cash flows) as September 30, 2020 and for the three and nine month periods ended September 30, 2020 (collectively, the “Financial Statements”). The Financial Statements have been prepared in accordance with GAAP applied on a consistent basis throughout the periods indicated and the Company maintains a standard system of accounting established and administered in accordance with GAAP

(b) Except as set forth in the audited Financial Statements, the Financial Statements fairly present in all material respects the consolidated financial condition and results of operation and cash flows of the Company and its consolidated subsidiaries as of the dates, and for the periods, indicated therein, in accordance with GAAP subject in the case of the unaudited Financial Statements to normal year-end audit adjustments, none of which are material, individually, or in the aggregate.

(c) Except as set forth in the Financial Statements or resulting from the Transactions, the Company has no material liabilities or obligations, contingent or otherwise, other than (i) liabilities incurred in the ordinary course of business subsequent to September 30, 2020; (ii) obligations under contracts and commitments incurred in the ordinary course of business; (iii) liabilities and obligations of a type or nature not required under GAAP to be reflected in the Financial Statements, and (iv) liabilities which would not, individually and in the aggregate, have a Material Adverse Effect or be required to be reported in a Current Report on Form 8-K.

3.16 Changes. Since September 30, 2020, there has been no change, development, event liability, development or circumstance with respect to the business, properties, liabilities, operations (including results thereof) or condition (financial or otherwise) of the Company and its subsidiaries, taken as a whole, that, individually or in the aggregate, has had or would reasonably be expected to have a Material Adverse Effect.

3.17 Tax Returns and Payments. Except as would not, individually or in the aggregate, have a Material Adverse Effect, (a) there are no federal, state, county, local or foreign taxes due and payable by the Company which have not been timely paid, (b) there are no outstanding examinations or audits of any tax returns or reports by any applicable federal, state, local or foreign governmental agency, (c) the Company has duly and timely filed all federal, state, county, local and foreign tax returns required to have been filed by it, and (d) there are in effect no waivers of applicable statutes of limitations with respect to taxes for any year.

3.18 Insurance.

(a) Except as would not, individually or in the aggregate, have a Material Adverse Effect, the Company has in full force and effect insurance policies or binders of insurance, in amount (subject to reasonable deductions) to allow it to replace its material properties that might be damaged or destroyed consistent with customary practices and standards of companies engaged in businesses and operations similar to those of the Company.

 

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(b) The Company has in effect that directors and officers insurance coverage described in a written presentation provided to the Purchaser prior to date hereof. The Company has provided to the Purchaser written information describing the directors and officers insurance coverage with respect to the Company’s pending litigation naming the Company and its directors and officers as defendants. The Company has no reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business.

3.19 Permits. The Company has all franchises, permits, licenses and any similar authority necessary for the conduct of its business, the lack of which would have a Material Adverse Effect. The Company is not in default in any material respect under any of such franchises, permits, licenses or other similar authority.

3.20 Corporate Documents. The Certificate of Incorporation and Bylaws are in the form as filed with the SEC.

3.21 Environmental Laws. Except as would not, individually or in the aggregate, have a Material Adverse Effect: (a) the Company is and has been in compliance with all Environmental Laws; (b) there has been no release or threatened release of any pollutant, contaminant or toxic or hazardous material, substance or waste or petroleum or any fraction thereof (each a “Hazardous Substance”), on, upon, into or from any site currently or heretofore owned, leased or otherwise used by the Company except as remediated under or in compliance with Environmental Laws; (c) there have been no Hazardous Substances generated by the Company that have been disposed of or come to rest at any site that has been included in any published U.S. federal, state or local “superfund” site list or any other similar list of hazardous or toxic waste sites published by any Governmental Entity in the United States under circumstances that would reasonably be expected to result in liability to the Company; and (d) there are no underground storage tanks located on, no polychlorinated biphenyls (“PCBs”) or PCB-containing equipment used or stored on, and no hazardous waste as defined by the Resource Conservation and Recovery Act, as amended, stored on, any site owned or operated by the Company, except for the storage of Hazardous Substances or waste in compliance with Environmental Laws, (e) the Company is not and has not become subject to, or to the knowledge of the Company has not been threatened with, any Environmental Liability and (f) within the last three (3) years, the Company has not received written notice of any claim with respect to any Environmental Liability or written notice of violation with respect to any Environmental Law.

For purposes of this Section 3.21, the following definitions apply:

Environmental Laws” means any law, regulation, or other applicable requirement of any Governmental Authority relating to: (a) releases or threatened release of Hazardous Substance; (b) pollution, the protection of employee health and safety and public health from exposure to any Hazardous Substance or the protection of the environment; or (c) the manufacture, handling, transport, use, treatment, storage, or disposal of Hazardous Substances

Environmental Liability” means any liability, obligation, damage, loss, claim, action, suit, judgment, order, fine, penalty, fee, expense or cost, contingent or otherwise (including any liability for costs of remedial actions, or natural resource damages, administrative oversight costs, and indemnities), of or related to the Company (including any predecessor for whom the Company bears liability contractually or by operation of law) arising under or relating to any

 

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Environmental Law, including those resulting from or based upon (a) any compliance or noncompliance with any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal or presence of any Hazardous Substances, (c) exposure to any Hazardous Substances, (d) the release or threatened release of any Hazardous Substances into the environment (including as related to indoor air quality) or (e) any of the foregoing for which liability is assumed or imposed by any contract or agreement.

3.22 Company Reports. Since December 31, 2019, the Company has timely filed with the SEC all reports, forms, or other documents required to be filed by the Company pursuant to the Securities Act or the Exchange Act, as applicable, and the Company has complied in all material respects with the filing requirements of the Exchange Act or the Securities Act, as applicable. The Company Reports filed before the applicable Closing Date, when filed with the SEC, complied or will comply when filed in all material respects with the Exchange Act and the applicable rules and regulations of the SEC thereunder. None of the Company Reports, as of their respective date of filing, contained or will contain any untrue statement of a material fact or omit, or will omit, to state a material fact required to be stated in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. As of the date hereof, there are no material outstanding or unresolved comments received from the SEC with respect to any of the Company Reports. Except as set forth in the Company Reports, the Company has received no notices or correspondence from the SEC relating to the Company Reports for the two year preceding the date hereof. To the Company’s knowledge, the SEC has not commenced any enforcement proceedings against the Company or any of its officers or directors.

3.23 Private Placement. Assuming the accuracy of the representations and warranties of the Purchaser set forth in Section 4.4, the offer and sale of the Shares pursuant to this Agreement will be exempt from the registration requirements of the Securities Act. Without limiting the foregoing, neither the Company nor, to the knowledge of the Company, any other Person authorized by the Company to act on its behalf, has engaged in a general solicitation or general advertising (within the meaning of Regulation D of the Securities Act) of investors with respect to offers or sales of Preferred Stock or Common Stock in connection with the Transactions, and neither the Company nor, to the knowledge of the Company, any Person acting on its behalf has made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause the offering or issuance of Shares under this Agreement to be integrated with prior or other offerings by the Company for purposes of the Securities Act that would result in none of Regulation D or any other applicable exemptions from registration under the Securities Act to be available, nor will the Company take any action or steps that would cause the offering or issuance of Series C Preferred Stock under this Agreement to be so integrated with other offerings by the Company.

3.24 NYSE. The Company’s Common Stock is listed on the New York Stock Exchange, and no event has occurred, and the Company is not aware of any event that is reasonably likely to occur, that would result in the Common Stock being delisted from the New York Stock Exchange. The Company is in compliance in all material respects with the listing and listing maintenance requirements of the New York Stock Exchange applicable to it for the continued trading of its Common Stock on the New York Stock Exchange.

3.25 Foreign Corrupt Practices Act. To the Company’s knowledge since December 31, 2015, neither the Company nor any of the Company’s directors, officers, employees or agents have, directly or indirectly, made, offered, promised or authorized any payment or gift of any money or anything of value to or for the benefit of any “foreign official” (as such term is defined in the U.S. Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”)), foreign political party or official thereof or candidate for foreign political office for the purpose of (a) influencing any official act or decision of such official, party or candidate, (b) inducing such

 

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official, party or candidate to use his, her or its influence to affect any act or decision of a foreign Governmental Entity, or (c) securing any improper advantage, in the case of (a), (b) and (c) above in order to assist the Company or any of its Affiliates in obtaining or retaining business for or with, or directing business to, any person. To the Company’s knowledge since December 31, 2015, neither the Company nor any of the Company’s directors, officers, employees or agents have made or authorized any bribe, rebate, payoff, influence payment, kickback or other unlawful payment of funds or received or retained any funds in violation of any law, rule or regulation. The Company has maintained, and has caused each of its Affiliates to maintain, systems of internal controls (including, but not limited to, accounting systems, purchasing systems and billing systems) designed to ensure compliance with the FCPA or any other applicable anti-bribery or anti-corruption law. To the Company’s knowledge, neither the Company nor any of the Company’s directors, officers, employees or agents are the subject of any ongoing allegation, voluntary disclosure, investigation, prosecution or other enforcement action related to the FCPA or any other anti-corruption law.

3.26 Data Privacy. In connection with its collection, storage, transfer (including, without limitation, any transfer across national borders) or use of any personally identifiable information from any individuals, including, without limitation, any customers, prospective customers, employees or other third parties (collectively “Personal Information”), the Company is and, within the three (3) years prior to the date of this Agreement, has been in compliance with all applicable privacy Laws in all relevant jurisdictions (including Laws concerning the loss or theft of Personal Information), the Company’s privacy policies and the privacy requirements of any contract or codes of conduct to which the Company is a party, in each case, except as would not, individually or in the aggregate, have a Material Adverse Effect. Except as would not, individually or in the aggregate, have a Material Adverse Effect, the Company has commercially reasonable physical, technical, organizational and administrative security measures and policies in place to protect all Personal Information collected by it or on its behalf from and against unauthorized access, use or disclosure.

3.27 No Rights Agreement; Anti-Takeover Provisions.

(a) The Company is not a party to a currently effective stockholder rights agreement, “poison pill” or similar anti-takeover agreement or plan

(b) The Tax Asset Protection Plan of the Company entered into on September 12, 2019 and the certificate of amendment to the Second Amended and Restated Certificate of Incorporation filed on September 12, 2019 (the “NOL Charter Amendment”) has expired and is no longer in effect.

(c) The Company and the Board of Directors have taken all necessary actions to ensure that no Antitakeover Provision restricts, or will restrict, the Purchaser’s acquisition, or the Company’s issuance, of the Shares, the PIK Shares, and the Conversion Shares in accordance with this Agreement and the Series C Certificate of Amendment.

3.28 Debt and Common Equity Financing. Company has delivered to Purchaser a true, correct and complete copy, as of the date of this Agreement, of: (a) the term loan agreement with Kennedy Lewis Investment Management, LLC (“Lender”) dated as of the date hereof, duly executed by Company and Lender pursuant to which Lender will provide a $275,000,000 senior secured delayed draw term loan to the Company together with the promissory note, security agreement and all other ancillary documents with any material terms and conditions related thereto (the “Term Loan Agreements”); (b) the unsecured 5.0% convertible promissory note in the principal amount of $25,000,000 duly executed by the Company in favor of

 

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the Lender dated as of the date hereof (the “Convertible Note”); and (c) the securities purchase agreement pursuant to which the Lender shall purchase $10,000,000 of Common Stock and the Convertible Note dated as of the date hereof duly executed by the Company and Lender, together with all other ancillary documents related thereto (collectively, the “Common Stock Purchase Agreements,” and together with the Term Loan Agreements and the Convertible Note, the “Debt and Common Equity Financing Agreements”). Except as set forth in the Debt and Common Equity Financing Documents, there are no conditions precedent to the obligation of the Lender to provide the debt and equity financing described therein (the “Debt and Common Equity Financing”) or any contingencies that would allow the Lender to reduce the total amount of the loan extended or Common Stock subscribed for in the Debt and Common Equity Financing. Company has no reason to believe that the Debt and Common Equity Financing will not close on or before the Initial Closing Date.

3.29 Series A Repurchase and Exchange. Company has delivered to Purchaser true, correct and complete copies, as of the date of this Agreement, of: (a) the Series A Preferred Stock Repurchase and Exchange Agreement duly executed by the Company and the Series A Preferred Stock holders (“Series A Preferred Stockholders”) dated as of the date hereof pursuant to which the Company will redeem on the terms and conditions therein fifty percent of the outstanding Series A Preferred Stock and the Series A Preferred Stockholders will exchange the remaining outstanding Series A Preferred Stock for Series B Preferred Stock, and in connection therewith, extend the mandatory redemption date and otherwise modify the terms and conditions of their equity ownership (“Series A Repurchase and Exchange Agreement”); and (b) the Series B Certificate of Amendment and together with the Series A Registration Rights Agreement and the Series A Repurchase and Exchange Agreement, the “Series A Repurchase and Exchange Documents”). Except as set forth in the Series A Repurchase and Exchange Documents, there are no conditions precedent to the obligations of the Series A Preferred Stockholders to effect the Series A Preferred Stock repurchase and the exchange of the Series A Preferred Stock into Series B Preferred Stock as contemplated therein (the “Series A Repurchase and Exchange”). The Company has no reason to believe that the terms of the Series A Preferred Stock that is not being redeemed on or before the Initial Closing Date will not be exchanged and modified as set forth in the Series A Repurchase and Exchange Documents.

3.30 No Brokers or Finders. No Person has or will have, as a result of the Transactions, any right, interest or claim against or upon the Company for any commission, fee or other compensation as a finder or broker because of any act of the Company.

3.31 No Additional Representations. Except for the representations and warranties made by the Company in this Article III, neither the Company nor any other person makes any express or implied representation or warranty with respect to the Company or any of its respective businesses, operations, assets, liabilities, employees, employee benefit plans, conditions or prospects, and the Company hereby disclaims any such other representations or warranties. In particular, without limiting the foregoing disclaimer, neither the Company nor any other person makes or has made any representation or warranty to the Purchaser, or any of its Affiliates or Representatives, with respect to (i) except for the representations and warranties made by the Company in this Article III, any financial projection, forecast, estimate, budget or prospect information relating to the Company or any of its businesses, or (ii) except for the representations and warranties made by the Company in this Article III, any oral or written information presented to the Purchaser or any of their Affiliates or Representatives in the course of their due diligence investigation of the Company, the negotiation of this Agreement, or in the course of the Transactions.

 

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ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

The Purchaser hereby represents and warrants to the Company that:

4.1 Organization; Qualifications. The Purchaser is duly formed and validly existing and in good standing under the Laws of its jurisdiction of formation and has full power to perform its obligations under this Agreement.

4.2 Authorization. The Purchaser has full power and authority to enter into the Series C Transaction Agreements and each document required by this Agreement to be executed at or prior to the Closing by the Purchaser. The Series C Transaction Agreements, when executed and delivered by the Purchaser, will constitute valid and legally binding obligations of the Purchaser, enforceable in accordance with their terms, subject to the Bankruptcy and Equity Exception.

4.3 Registered Securities; Purchase Entirely for Own Account. Purchaser understands that the shares of Series C Preferred Stock it is acquiring pursuant to this Agreement are characterized as “restricted securities” under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under such laws and applicable regulations such Series C Preferred Stock may be resold or otherwise transferred without registration under the Securities Act only in certain limited circumstances. In the absence of any effective registration statement covering the Series C Preferred Stock or an available exemption from registration under the Securities Act, the Series C Preferred Stock must be held indefinitely. The Purchaser hereby confirms that the Shares to be acquired by the Purchaser will be acquired for investment for the Purchaser’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that the Purchaser has no present intention of selling, granting any participation in, or otherwise distributing the same. By executing this Agreement, the Purchaser further represents that the Purchaser does not presently have any contract, undertaking, agreement or arrangement with any Person to sell, transfer or grant participations to such Person, or to any third Person, with respect to any of the Shares.

4.4 Disclosure of Information. The Purchaser has had an opportunity to discuss the Company’s business, management, financial affairs and the terms and conditions of the offering of the Shares with the Company’s management. The foregoing, however, does not limit or modify the representations and warranties of the Company in Article III or the right of the Purchaser to rely thereon.

4.5 Legends. The Company may place appropriate and customary legends on the Shares, the PIK Shares and the Conversion Shares held by the Purchaser setting forth the restrictions referred to in this Section 4.5 and any restrictions appropriate for compliance with U.S. federal securities Laws. The Purchaser agrees with the Company that, other than to take into account any changes in applicable securities Laws, each Share held by the Purchaser on the applicable Closing Date may be notated with one or all of the following legends:

(a) “THESE SECURITIES AND THE SECURITIES ISSUABLE UPON THE CONVERSION THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. THE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT (1)

 

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PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT RELATING TO SUCH SECURITIES UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE STATE SECURITIES LAWS AND THE SECURITIES LAWS OF OTHER JURISDICTIONS.”

(b) Any legend required by the securities laws of any state to the extent such laws are applicable to the Shares, the PIK Shares or the Conversion Shares represented by the certificate, instrument, or book entry so legended.

4.6 Accredited Investor. The Purchaser is an accredited investor as defined in Rule 501(a) of Regulation D promulgated under the Securities Act, and has such knowledge and experience in business and financial matters so as to enable it to understand and evaluate the risks of and form an investment decision with respect to its investment in the Shares and to protect its own interest in connection with such investment.

4.7 No General Solicitation. Neither the Purchaser, nor any of its officers, directors, employees, agents, stockholders or partners has either directly or indirectly, including, through a broker or finder (a) engaged in any general solicitation, or (b) published any advertisement in connection with the offer and sale of the Shares.

4.8 Regulatory Approvals. No notices, reports or other filings are required to be made by the Purchaser with, nor are any consents, registrations, approvals, permits or authorizations required to be obtained by the Purchaser from, any Governmental Entity in connection with the execution, delivery and performance of this Agreement by the Purchaser or the consummation of the Transactions, except where the failure to so make or obtain would not, individually or in the aggregate, reasonably be likely to prevent, materially delay or materially impair the consummation of the Transactions.

4.9 Sufficiency of Funds. The Purchaser will have, sufficient funds on hand at each closing to consummate the purchase of the Shares to be purchased at such Closing and to deliver the applicable Purchase Price (as set forth on Exhibit A) and all fees and expenses related to the Transactions. Notwithstanding anything to the contrary contained herein, the parties acknowledge and agree that it shall not be a condition to the obligations of the Purchaser to consummate the Transactions that the Purchaser has sufficient funds for payment of the Purchase Price.

4.10 Ownership of Common Stock. As of the date hereof, the Purchaser does not, directly or indirectly, own shares of Common Stock, and has not engaged in any transactions (including hedging or similar transactions) involving Common Stock.

4.11 No Additional Representation; Inspection.

(a) Except as expressly set forth in Article III, the Purchaser acknowledges that the Company is not making and has not made any other representation or warranty, express or implied, at Law or in equity, with respect to this Agreement, the Company, the Shares (and the Common Stock issuable upon conversion or pursuant to the terms thereof), any other securities of the Company or the businesses, operations, assets, liabilities, employees, employee benefit plans, conditions or prospects of the Company or any information provided or made available to the Purchaser in connection therewith (including any forecasts, projections, estimates or budgets), including any warranty with respect to merchantability or fitness for any particular purpose, and all such other representations or warranties are hereby expressly disclaimed.

 

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(b) The Purchaser acknowledges and agrees that it (i) has made its own inquiry and investigations into, and, based thereon, has formed an independent judgment concerning, the Company, the Shares (and the Common Stock issuable upon conversion or pursuant to the terms thereof), and the businesses, operations, assets, liabilities, employees, employee benefit plans, conditions and prospects of the Company, (ii) has been provided with adequate access to such information, documents and other materials relating to the Company, the Shares (and the Common Stock issuable upon conversion or pursuant to the terms thereof), and the businesses, operations, assets, liabilities, employees, employee benefit plans, conditions and prospects of the Company as it has deemed necessary to enable it to form such independent judgment, (iii) has had such time as the Purchaser deems necessary and appropriate to fully and completely review and analyze such information, documents and other materials and (iv) has been provided an opportunity to ask questions of the Company with respect to such information, documents and other materials and has received satisfactory answers to such questions. The foregoing, however, does not limit or modify the representations and warranties of the Company in Article III or the right of the Purchaser to rely thereon.

ARTICLE V

ADDITIONAL AGREEMENTS

5.1 Filings; Other Actions. During the period commencing on the date hereof and terminating on the earlier to occur of (a) the Closing and (b) the termination of this Agreement in accordance with Article VII, the Purchaser, on the one hand, and the Company, on the other hand, will, and it will cause its Affiliates to, cooperate and consult with the other and use commercially reasonable efforts (i) to prepare and file all necessary documentation, (ii) to effect all necessary applications, notices, petitions, filings and other documents, and (iii) to obtain all necessary permits, consents, orders, approvals and authorizations of, or any exemption by, all third parties and Governmental Entities, including filings pursuant to the HSR Act and to wait until the expiration or termination of any applicable waiting period related thereto, in each case of (i)-(iii) to the extent necessary or advisable to consummate the Transactions, and to perform the covenants contemplated by this Agreement. Each party shall execute and deliver both before and after the Closing such further certificates, agreements and other documents and take such other actions as the other parties may reasonably request to consummate or implement the Series C Transactions, including without limitation any filings pursuant to the HSR Act to the extent applicable to the Closing. The Purchaser and the Company will have the right to review in advance, and to the extent practicable each will consult with the other, in each case subject to applicable Laws relating to the exchange of information, all the information relating to such other party, and any of their respective Affiliates, which appears in any filing made with, or written materials submitted to, any third party or any Governmental Entity in connection with the Transactions. In exercising the foregoing right, each of the parties hereto agrees to act reasonably and as promptly as practicable. Each party hereto agrees to keep the other party apprised of the status of matters referred to in this Section 5.1. The Purchaser shall promptly furnish the Company, and the Company shall promptly furnish the Purchaser, to the extent permitted by Law, with copies of written communications received by it or its subsidiaries from any Governmental Entity in respect of the Transactions.

 

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5.2 Information Regarding Deemed Dividends. The Company covenants and agrees to provide the Purchaser with (or alternatively, post on its website in accordance with Treasury Regulations Section 1.6045B-1(a)(3)) the amount and date (as determined in accordance with section 1.305-7(c)(5) of the proposed Treasury regulations as if such regulations were in effect or in any other manner the Company is required to provide under applicable Law) of any deemed distribution under Internal Revenue Code section 305(c) in connection with a conversion rate adjustment with respect to the Series C Preferred Stock pursuant to the Series C Certificate of Amendment. The Company shall provide such information to the Purchaser on or before the 45th day following the conversion rate adjustment, or, if earlier, January 15 of the year following the conversion rate adjustment).

5.3 Public Disclosure. On the date of this Agreement and on the applicable Closing Date, or, in each case, within 24 hours thereafter, the Company shall issue a press release in a form mutually agreed to by the Company and the Purchaser. No other written release, announcement or filing concerning the purchase of the Shares or the Series C Transactions shall be issued, filed or furnished, as the case may be, by any party without the prior written consent of the other party (which consent shall not be unreasonably withheld, conditioned or delayed), except as such release, announcement or filing as may be required by Law or the rules or regulations of any securities exchange, in which case the party required to make the release or announcement shall, to the extent reasonably practicable, allow the other party reasonable time to comment on such release or announcement in advance of such issuance.

5.4 Use of Proceeds. The Company plans to use the proceeds from the sale of the Shares for general corporate purposes including the funding of growth initiatives.

5.5 Board Representation.

(a) Until the earlier of (i) the third anniversary of the Initial Closing or (ii) such time as the Purchaser and its Affiliates do not hold, directly or indirectly, at least a majority of the Shares purchased at the Closings (or the Common Stock received upon the conversion of such Shares) (as adjusted for stock splits, stock dividends, stock combinations and the like) (the “Requisite Shares”), the Purchaser shall be entitled to, at each annual or special meeting of the Company’s shareholders during such period, nominate one (1) director (such Person, the “Purchaser Designee”) to serve on the Board of Directors; provided, however, that such nomination is subject to such Purchaser Designee’s satisfaction of all applicable requirements regarding service as a director of the Company under applicable Law or stock exchange rules regarding service as a director and such other criteria and qualifications for service as a director applicable to all directors of the Company and in effect from time to time. In the event that a Purchaser Designee is nominated, the Company shall (i) include such Purchaser Designee in its slate of nominees for election to the Board of Directors at each annual or special meeting of the Company’s shareholders, (ii) recommend that the Company’s shareholders vote in favor of the election of the Purchaser Designee and (iii) support the Purchaser Designee in a manner generally no less rigorous and favorable than the manner in which the Company supports its other nominees. The Company shall take all reasonably necessary actions to ensure that, at all times when a Purchaser Designee is eligible to be appointed or nominated, there are sufficient vacancies on the Board of Directors to permit such designation. Notwithstanding the foregoing, the rights of the Purchaser under this Section 5.5(a) to nominate one (1) director shall terminate immediately on the earlier of (A) the third anniversary of the Initial Closing or (B) such time as the Purchaser and its Affiliates ceases to own, directly or indirectly, at least a majority of the Requisite Shares.

 

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(b) If any Purchaser Designee ceases to serve on the Board of Directors for any reason during his or her term, the vacancy created thereby shall be filled, and the Company shall cause the Board of Directors to fill such vacancy, with a new Purchaser Designee eligible to serve on the Board of Directors in accordance with Section 5.5(a); provided, however, notwithstanding anything to the contrary in this Agreement, in the event that the Purchaser’s rights under Section 5.5(a) are terminated, any Purchaser Designee serving on the Board of Directors shall immediately tender his or her resignation; provided further that (i) such requirement may be waived in advance by the Company’s Compensation, Nominating & Governance Committee and (ii) such resignation shall be subject to the acceptance by the Board of Directors.

(c) For the avoidance of doubt, a Purchaser Designee shall be entitled (i) to the same retainer, equity compensation and other fees or compensation, including travel and expense reimbursement, paid to the non-executive directors of the Company for his or her service as a director and (ii) to the same indemnification rights as other non-executive directors of the Company, and the Company shall maintain, in full force and effect, directors’ and officers’ liability insurance in reasonable amounts to the same extent it now indemnifies and provides insurance for the non-executive directors on the Board of Directors. A Purchaser Designee shall be bound by the same confidentiality restrictions as the other non-executive directors. Any director minimum ownership requirements shall be deemed satisfied in respect of the Purchaser Designee by the Shares, PIK Shares and Conversion Shares, as applicable, held by the Purchaser or one or more of its Affiliates. The Company acknowledges and agrees that it is the indemnitor of first resort (for the Purchase Designee in connection with matters arising from Purchaser Designee’s service as a director of the Company). For the avoidance of doubt, the Purchaser Designee shall be entitled to customary access and information rights in the same manner as received by the other directors on the Board of Directors.

(d) Following the third anniversary of the Initial Closing, for so long as the Purchaser holds, directly or indirectly, at least a majority of the Requisite Shares, whenever dividends on any Series C Preferred Stock of the Purchaser shall be in arrears for six (6) or more consecutive or non-consecutive Dividend Periods (a “Preferred Dividend Default”), the Purchaser shall be entitled to nominate one (1) additional director of the Company (the “Preferred Director”) for election at the next annual meeting of stockholders and at each subsequent meeting, until all dividends accumulated on such Series C Preferred Stock for the past Dividend Periods and the then current Dividend Period shall have been fully paid or declared in the form of PIK Shares or Additional Liquidation Preference. In such case, should a Preferred Director be subsequently elected, the entire Board shall be increased by one (1) director. Notwithstanding the foregoing, if, prior to the election of any additional director in the manner set forth herein, all accumulated dividends are paid or issued on the Series C Preferred Stock, no such additional director shall be so elected. If and when all accumulated dividends shall have been paid or issued on such Series C Preferred Stock, the right of the Purchaser to nominate the Preferred Director shall immediately cease (subject to revesting in the event of each and every Preferred Dividend Default), and the term of office of any Preferred Director so elected shall immediately terminate and the entire Board shall be reduced accordingly. So long as a Preferred Dividend Default shall continue, the Purchaser shall be entitled to nominate a director to fill any vacancy in the office of a Preferred Director. For purposes of the foregoing paragraph, dividends shall be considered to be in arrears with respect to a Dividend Period if (i) the Company has not issued PIK Shares for such Dividend Period and (ii) the Liquidation Preference of such Shares has not been increased by the Additional Liquidation Preference, in each case, in accordance with and within the times set forth in the Series C Certificate of Amendment.

 

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(e) For the avoidance of doubt, the rights of the Purchaser provided for in this Section 5.5 shall not be transferrable to any other Person other than Purchaser’s Affiliates.

5.6 Information Rights.

(a) For so long as the Purchaser and its Affiliates holds more than fifty percent (50%) of the Requisite Shares, the Company shall provide the Purchaser with, within fifteen (15) days after it has filed the same with the SEC, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the SEC may prescribe) that it may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act (other than confidential filings, documents subject to confidential treatment and correspondence with the SEC) (“Public Company Reports”).

(b) The Company’s obligation set forth in Section 5.6(a) to provide the Purchaser with copies of Public Company Reports shall be satisfied if the Company files such Public Company Reports with the SEC on EDGAR or otherwise makes such reports publicly available on its website.

(c) To the extent the Company is not required to file Public Company Reports with the SEC, and if the Purchaser holds more than fifty percent (50%) of the Requisite Shares, the Company shall furnish to the Purchaser, upon its written request (and subject to the Purchaser entering into customary confidentiality agreements with the Company, consistent with any such agreements entered into generally by shareholders of the Company receiving such information, prior to receiving such information), quarterly reports and annual reports of the Company, which shall be similar in scope to a Form 10-Q and Form 10-K, respectively. In this circumstance, the Company shall furnish to the Purchaser such information as soon as reasonably practicable after such information has been prepared by the Company.

5.7 Protective Provisions. For so long as the Purchaser and its Affiliates hold more than fifty percent (50%) of the Requisite Shares, the prior approval of the Purchaser shall be required for:

(a) repayments and redemptions with respect to Junior Stock or shares of any class or series of stock pari passu with or senior to the Shares (including the Series B Preferred Stock); provided that repayments and redemptions shall be permitted to the extent that the Shares are afforded the opportunity to participate in such repayment or redemption on a pro rata as-converted basis with the Common Stock and the Series B Preferred Stock, as applicable, as at the time of such repayment or redemption; provided, further that the prior approval of the Purchaser shall not be required for (i) redemptions, purchases or other acquisitions of shares of Junior Stock or shares of any class or series of stock pari passu with or senior to the Shares in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of any one or more employees, officers, directors, managers or consultants of, or to, the Company or any of its subsidiaries, (ii) an exchange, reclassification or conversion of any class or series of Junior Stock or shares of any class or series of stock pari passu with or senior to the Shares for any class or series of Junior Stock that ranks equal or junior to the applicable Junior Stock or (iii) subject to the Series C Certificate of Amendment, any dividend in the form of stock, warrants, options or other rights where the dividend stock or the stock issuable upon exercise of such warrants, options or other rights is the same stock as that on which the dividend is being paid or ranks equal or junior to the applicable Junior Stock; or

 

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(b) any alteration, repeal or amendment, whether by merger, consolidation, combination, reclassification or otherwise, of any provisions of the Certificate of Incorporation (including the Series C Certificate of Amendment and the Series B Certificate of Amendment), or the Bylaws, as amended, if the amendment would amend, alter or affect the voting rights, dividend rights, preferences, privileges or other special rights of the Series C Preferred Stock or would adversely affect the Purchaser, including, without limitation, (i) any change to the Series B Preferred Stock that adversely affects the Series C Preferred Stock or (ii) the creation of, increase in the authorized number of, or issuance of, shares of any class or series of stock pari passu with or senior to the Series C Preferred Stock (including the Series A Preferred Stock and the Series B Preferred Stock), or security convertible into such capital stock; or

(c) enter into any agreement with respect to the Series B Preferred Stock or amend the Series A Redemption and Exchange Agreements, in each case in a manner that would adversely affect the Purchaser, or grant additional rights to the holders of the Series B Preferred Stock that are more favorable than the terms granted to the Holder of the Series B Preferred Stock as of the Initial Closing without offering the same or equivalent terms to the Purchaser.

5.8 Commercially Reasonable Efforts to Close. The Company and the Purchaser will use commercially reasonable efforts in good faith to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary under applicable Laws so as to permit consummation of the Series C Transactions as promptly as practicable and otherwise to enable consummation of the Series C Transactions and shall cooperate reasonably and in good faith with the other party hereto to that end. Without limiting the foregoing, the Company will use commercially reasonable efforts in good faith to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary under applicable to satisfy all conditions to closing set forth in the Debt and Common Equity Financing Agreements and the Series A Repurchase and Exchange Documents and to comply with its obligations thereunder.

ARTICLE VI

CLOSING

6.1 Conditions to the Purchasers Obligations at the Initial Closing. The obligations of the Purchaser to purchase the Shares at the Initial Closing are subject to the fulfillment, on or before the Initial Closing, of each of the following conditions, unless otherwise waived by the Purchaser:

(a) Shares. The Initial Closing Shares shall be deposited in book-entry form by or on behalf of the Company and registered in the name of the Purchaser or shall be provided to the Purchaser at the Initial Closing in such other form or manner as reasonably agreed between the Company and the Purchaser.

 

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(b) Representations and Warranties of the Company. (i) The representations and warranties of the Company set forth in Article III (other than Sections 3.1 (Organization; Qualifications), 3.2 (Capitalization), 3.3 (Authorization), 3.4 (Valid Issuance of Shares) and 3.16 (Changes)) shall be true and correct (disregarding all qualifications or limitations as to materiality or Material Adverse Effect) as of the date of this Agreement and as of the Initial Closing Date as though made on and as of such date (except to the extent that such representation or warranty speaks to an earlier date, in which case as of such earlier date), except where the failure of such representations and warranties to be so true and correct would not, individually or in the aggregate, have a Material Adverse Effect, and (ii) the representations and warranties of the Company set forth in Sections 3.1 (Organization; Qualifications), 3.2 (Capitalization), 3.3 (Authorization), 3.4 (Valid Issuance of Shares) and 3.16 (Changes) shall be true and correct as of the date of this Agreement and as of the Initial Closing Date as though made on and as of such date.

(c) Performance. The Company shall have performed and complied in all material respects with all covenants, agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by the Company on or before the Initial Closing.

(d) Compliance Certificate. The Company shall have delivered to the Purchaser a certificate of a duly authorized officer of the Company certifying that the conditions specified in Sections 6.1(b) and 6.1(c) have been fulfilled.

(e) No Prohibition. No Order (whether temporary, preliminary or permanent) of a Governmental Entity of competent jurisdiction or other applicable Law shall be in effect which makes illegal, restrains, enjoins or otherwise prohibits or prevents the Initial Closing.

(f) Qualifications. All authorizations, approvals or permits, if any, of any Governmental Entity that are required in connection with the lawful issuance and sale of the Shares sold at the Initial Closing pursuant to this Agreement shall have been obtained and shall be effective as of the Initial Closing.

(g) Series C Registration Rights Agreement. The Company shall have executed and delivered to the Purchaser the Series C Registration Rights Agreement for the Shares and the PIK Shares issuable with respect thereto and the Conversion Shares purchased at the Initial Closing.

(h) Series C Certificate of Amendment. The Company shall have adopted and filed with the Department of Treasury of the State of New Jersey the Series C Certificate of Amendment which shall remain in full force and effect as of the Initial Closing.

(i) Secretary’s Certificate. The Secretary of the Company shall have delivered to the Purchaser a certificate in form and substance satisfactory to Purchaser certifying (i) the Bylaws, (ii) the Certificate of Incorporation and (iii) the resolutions of the Board of Directors approving the Series C Transaction Agreements and the Series C Transactions (the “Authorization Resolutions”).

 

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(j) Debt and Common Equity Financing; Series A Repurchase and Exchange.

(i) The Debt and Common Equity Financing shall provide sufficient funds to, in addition to any other required use of proceeds thereunder, pay in full the redemption of the Series A Preferred Stock not exchanged for Series B Preferred Stock set forth in the Series A Repurchase and Exchange Documents; and

(ii) The Debt and Common Equity Financing and the Series A Repurchase and Exchange, shall have closed on the terms and conditions set forth in the Debt and Common Equity Financing Agreements and the Series A Repurchase and Exchange Documents, respectively and Purchaser shall have been provided satisfactory evidence thereof; provided that Purchaser shall have the right to review and approve any material amendments to the Debt and Common Equity Agreements and the Series A Repurchase and Exchange Documents prior to the Initial Closing.

6.2 Conditions to the Purchasers Obligations at the Second Closing. The obligations of the Purchaser to purchase the Shares at the Second Closing are subject to the fulfillment, on or before the Second Closing, of each of the following conditions, unless otherwise waived by the Purchaser:

(a) Shares. The Second Closing Shares shall be deposited in book-entry form by or on behalf of the Company and registered in the name of the Purchaser or shall be provided to the Purchaser at the Second Closing in such other form or manner as reasonably agreed between the Company and the Purchaser.

(b) Representations and Warranties of the Company. (i) The representations and warranties of the Company set forth in Article III (other than Sections 3.1 (Organization; Qualifications), 3.2 (Capitalization), 3.3 (Authorization) and 3.4 (Valid Issuance of Shares)) shall be true and correct (disregarding all qualifications or limitations as to materiality or Material Adverse Effect) as of the date of this Agreement and as of the Initial Closing Date as though made on and as of such date (except to the extent that such representation or warranty speaks to an earlier date, in which case as of such earlier date), except where the failure of such representations and warranties to be so true and correct would not, individually or in the aggregate, have a Material Adverse Effect, and (ii) the representations and warranties of the Company set forth in Sections 3.1 (Organization; Qualifications), 3.2 (Capitalization), 3.3 (Authorization) and 3.4 (Valid Issuance of Shares) shall be true and correct as of the date of this Agreement and as of the Initial Closing Date as though made on and as of such date.

(c) Performance. The Company shall have performed and complied in all material respects with all covenants, agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by the Company on or before the Second Closing.

(d) HSR Act. The filings of the Purchaser and the Company pursuant to the HSR Act shall have been made and the applicable waiting period and any extensions thereof shall have expired or been terminated.

 

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(e) Compliance Certificate. The Company shall have delivered to the Purchaser a certificate of a duly authorized officer of the Company certifying that the conditions specified in Sections 6.2(b) and 6.2(c) have been fulfilled.

(f) No Prohibition. No Order (whether temporary, preliminary or permanent) of a Governmental Entity of competent jurisdiction or other applicable Law shall be in effect which makes illegal, restrains, enjoins or otherwise prohibits or prevents the Second Closing.

(g) Qualifications. All authorizations, approvals or permits, if any, of any Governmental Entity that are required in connection with the lawful issuance and sale of the Shares sold at the Second Closing pursuant to this Agreement shall have been obtained and shall be effective as of the Second Closing.

(h) Series C Series Registration Rights Agreement. The Series C Registration Rights Agreement shall be in full force and effect and the Second Closing Shares shall be subject thereto and the Purchaser shall be entitled to the registration rights provided for thereunder with respect to all Conversion Shares issuable upon the conversion of all Shares acquired by the Purchaser from the Company.

(i) Series C Certificate of Amendment. The Series C Certificate of Amendment shall remain in full force and effect as of the Second Closing.

(j) Debt and Common Equity Financing; Series A Repurchase and Exchange. There shall have been no amendments, modifications or waivers of any terms in the Debt and Common Equity Financing Agreements or the Series A Repurchase and Exchange Documents since the Initial Closing that were not approved in writing in advance by the Purchaser.

(k) Secretary’s Certificate. The Secretary of the Company shall have delivered to the Purchaser a certificate certifying that there have not been any changes to the Company’s Certificate of Incorporation, By-Laws or Authorization Resolutions since the Initial Closing.

6.3 Conditions to the Companys Obligations at the Initial Closing. The obligations of the Company to sell the Shares to the Purchaser at the Initial Closing are subject to the fulfillment, on or before the Initial Closing, of each of the following conditions, unless otherwise waived by the Company:

(a) Purchase Price. The Purchaser shall have delivered the Purchase Price for the Initial Closing Shares to the Company by wire transfer of immediately available funds, pursuant to instructions given to the Purchaser by the Company in writing prior to the Initial Closing Date.

(b) Representations and Warranties. The representations and warranties of the Purchaser set forth in Article IV shall be true and correct in all material respects as of the date of this Agreement and as of the Initial Closing Date as though made on and as of such date.

(c) Performance. The Purchaser shall have performed and complied in all material respects with all covenants, agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by the Purchaser on or before the Initial Closing.

 

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(d) No Prohibition. No Order (whether temporary, preliminary or permanent) of a Governmental Entity of competent jurisdiction or other applicable Law shall be in effect which makes illegal, restrains, enjoins or otherwise prohibits or prevents the Initial Closing.

(e) Qualifications. All authorizations, approvals or permits, if any, of any Governmental Entity that are required in connection with the lawful issuance and sale of the Shares pursuant to this Agreement shall have been obtained and effective as of the Initial Closing.

(f) Series C Registration Rights Agreement. The Purchaser shall have executed and delivered to the Company the Series C Registration Rights Agreement.

6.4 Conditions to the Companys Obligations at the Second Closing. The obligations of the Company to sell the Second Closing Shares to the Purchaser at the Second Closing are subject to the fulfillment, on or before the Second Closing, of each of the following conditions, unless otherwise waived by the Company:

(a) Purchase Price. The Purchaser shall have delivered the Purchase Price for the Second Closing Shares to the Company by wire transfer of immediately available funds, pursuant to instructions given to the Purchaser by the Company in writing prior to the Second Closing Date.

(b) Representations and Warranties. The representations and warranties of the Purchaser set forth in Article IV shall be true and correct in all material respects as of the date of this Agreement and as of the Second Closing Date as though made on and as of such date.

(c) Performance. The Purchaser shall have performed and complied in all material respects with all covenants, agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by the Purchaser on or before the Second Closing.

(d) No Prohibition. No Order (whether temporary, preliminary or permanent) of a Governmental Entity of competent jurisdiction or other applicable Law shall be in effect which makes illegal, restrains, enjoins or otherwise prohibits or prevents the Second Closing.

(e) HSR Act. The filings of the Purchaser and the Company pursuant to the HSR Act shall have been made and the applicable waiting period and any extensions thereof shall have expired or been terminated.

(f) Qualifications. All authorizations, approvals or permits, if any, of any Governmental Entity that are required in connection with the lawful issuance and sale of the Shares pursuant to this Agreement shall have been obtained and effective as of the Second Closing.

 

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ARTICLE VII

TERMINATION

7.1 Termination. Prior to the applicable Closing, this Agreement may only be terminated: (a) by mutual written agreement of the Company and the Purchaser; (b) by the Company or the Purchaser if the Initial Closing shall not have occurred on or prior to five (5) business days after the date of this Agreement (provided, that the right to terminate this Agreement pursuant to this Section 7.1(b) shall not be available to any party whose failure to fulfill any obligations under this Agreement shall have been the cause of, or shall have resulted in, the failure of the applicable Closing to occur on or prior to such date); or (c) if any Order permanently restraining, enjoining or otherwise prohibiting the consummation of the Transactions shall have become final and non-appealable.

7.2 Effects of Termination. In the event of the termination of this Agreement pursuant to Section 7.1, this Agreement shall become void and of no effect with no liability to any person on the part of any party (or of any of its Representatives or Affiliates), except to the extent of (a) any fraud or (b) the intentional and willful breach of this Agreement; provided, however, and notwithstanding anything in the foregoing to the contrary, that this Article VII and Article VIII shall survive the termination of this Agreement.

7.3 Non-Recourse. This Agreement may only be enforced against, and any claims or causes of action that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement may only be made against the entities that are expressly identified as parties hereto, and no former, current or future equityholders, controlling persons, directors, officers, employees, agents or Affiliates of any party hereto or any former, current or future equityholder, controlling person, director, officer, employee, general or limited partner, member, manager, advisor, agent or Affiliate of any of the foregoing (each, a “Non-Recourse Party”) shall have any liability for any obligations or liabilities of the parties to this Agreement or for any claim (whether in tort, contract or otherwise) based on, in respect of, or by reason of, the Transactions or in respect of any representations made or alleged to be made in connection herewith. Without limiting the rights of any party against the other parties hereto, in no event shall any party or any of its Affiliates seek to enforce this Agreement against, make any claims for breach of this Agreement against, or seek to recover monetary damages from, any Non-Recourse Party.

ARTICLE VIII

MISCELLANEOUS

8.1 Survival. Except with respect to the representations and warranties contained in Sections 3.1 (Organization; Qualifications), 3.2 (Capitalization), 3.3 (Authorization) and 3.4 (Valid Issuance of Shares), which shall survive the Initial Closing until the second anniversary of the last Closing Date, the representations and warranties of the Company contained in or made pursuant to this Agreement shall not survive the Second Closing or termination of this Agreement. Except with respect to the representations and warranties contained in Sections 4.1 (Organization; Qualifications), 4.2 (Authorization), 4.3 (Registered Securities; Purchase Entirely for Own Account), 4.6 (Accredited Investor), and 4.7 (No General Solicitation), which shall survive the Initial Closing until the expiration of the applicable statute of limitations for violations of section 5 of the Securities Act and no other representations of the Purchaser shall survive the Second Closing. The foregoing survival periods shall not impair any claim by the Purchaser or the Company for common law fraud with respect to the representations and warranties of the other party in this Agreement. Nothing herein shall relieve any party

 

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of liability for any inaccuracy or breach of such representation or warranty to the extent that any good faith allegation of such inaccuracy or breach is made in writing prior to such expiration by a Person entitled to make such claim pursuant to the terms and conditions of this Agreement. All of the covenants and other agreements of the parties contained in this Agreement shall survive until fully performed or fulfilled, unless and to the extent that non-compliance with such covenants or agreements is waived in writing by the party entitled to such performance. For the avoidance of doubt, claims may be made with respect to the breach of any representation, warranty or covenant until the applicable survival period therefor as described above expires.

8.2 Successors and Assigns; No Third Party Beneficiaries. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. No party may assign this Agreement or its rights or obligations under this Agreement without the express written consent of the other party.

8.3 Governing Law. This Agreement shall be governed by the internal law of the State of New York.

8.4 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

8.5 Interpretation. When a reference is made in this Agreement to an Article or Section, such reference shall be to an Article or Section of this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”. The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The words “date hereof” shall refer to the date of this Agreement. The word “or” shall not be exclusive. The word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other thing extends, and shall not simply mean “if”. All references to “$” mean the lawful currency of the United States of America. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such term. Except as specifically stated herein, any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and references to all attachments thereto and instruments incorporated therein. Except as otherwise specified herein, references to a Person are also to its successors and permitted assigns. Each of the parties hereto has participated in the drafting and negotiation of this Agreement. If an ambiguity or question of intent or interpretation arises, this Agreement must be construed as if it is drafted by all the parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of authorship of any of the provisions of this Agreement.

 

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8.6 Notices. All notices, requests, instructions or other communications or documents to be given or made hereunder by any party to the other parties shall be in writing and deemed given when (a) served by personal delivery upon the party for whom it is intended, (b) sent by an internationally recognized overnight courier service upon the party for whom it is intended, or (c) sent by email, provided that the transmission of the email is promptly confirmed by telephone:

if to the Company to:

Eastman Kodak Company

343 State Street

Rochester, New York 14650

  Attention:

General Counsel

  Telephone:

585-726-3536

  Email:

roger.byrd@kodak.com

with a copy to (which shall not constitute notice):

Sullivan & Cromwell LLP

125 Broad Street

New York, New York 10004

  Attention:

Stephen M. Kotran

  Telephone:

(212) 558-4000

  Email:

KotranS@sullcrom.com

if to the Purchaser, to:

GO EK Ventures IV, LLC

7632 County Road 42

Victor, New York, 14564-8906

Attention: David Bovenzi, Managing Director

E-Mail: dbovenzi@grandoakscap.com

with a copy to (which shall not constitute notice):

Woods Oviatt Gilman LLP

1900 Bausch& Lomb Place

Rochester, New York 14604

  Attention:

Gordon E. Forth

  Telephone:

(585) 987-2891

  Email:

gforth@woodsoviatt.com

or to such other address, facsimile number or email address as such party may hereafter specify for the purpose by notice to the other parties hereto.

8.7 No Finders Fees. Each party represents that it neither is nor will be obligated for any finder’s fee or commission in connection with the Series C Transactions. The Purchaser agrees to indemnify and to hold harmless the Company from any liability for any commission or compensation in the nature of a finder’s or broker’s fee arising out of this transaction (and the costs and expenses of defending against such liability or asserted liability) for which the Purchaser or any of its Representatives is responsible. The Company agrees to indemnify and hold harmless the Purchaser from any liability for any commission or compensation in the nature of a finder’s or broker’s fee arising out of the Series C Transactions (and the costs and expenses of defending against such liability or asserted liability) for which the Company or any of its Representatives is responsible.

 

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8.8 Fees and Expenses. The Company shall pay the reasonable and documented legal and out-of-pocket administrative costs incurred by the Purchaser in connection with Transactions, including in the event that the Series C Transactions are not consummated; provided, however, that such amount shall not exceed, in the aggregate, (i) $100,000.00 or (ii) if the Series C Transactions are not consummated, $50,000.00.

8.9 Attorneys Fees. If any action at law or in equity (including arbitration) is necessary to enforce or interpret the terms of any of the Series C Transaction Agreements, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled.

8.10 Amendments and Waivers. Any term of this Agreement may be amended, terminated or waived only with the written consent of the Company and the Purchaser. Any amendment or waiver effected in accordance with this Section 8.10 shall be binding upon the Purchaser and each transferee of the Shares or the Conversion Shares, each future holder of all such securities, and the Company.

8.11 Severability. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.

8.12 Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power or remedy of such non-breaching or non-defaulting party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative.

8.13 Entire Agreement. This Agreement (including the Exhibits hereto), the Series C Certificate of Amendment and the other Series C Transaction Agreements constitute the full and entire understanding and agreement between the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties are expressly canceled.

8.14 Dispute Resolution.

(a) The parties (i) hereby irrevocably and unconditionally submit to the jurisdiction of the state courts of New York and to the jurisdiction of the United States District Court for the Western District of New York for the purpose of any suit, action or other proceeding arising out of or based upon this Agreement, (ii) agree not to commence any suit, action or other proceeding arising out of or based upon this Agreement except in the state courts of New York or the United States District Court for the Western District of New York, and (iii) hereby waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court.

 

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(b) EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE OTHER SERIES C TRANSACTION DOCUMENTS, THE SECURITIES OR THE SUBJECT MATTER HEREOF OR THEREOF. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THE SERIES C TRANSACTIONS, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE), BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THIS SECTION HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES HERETO AND THESE PROVISIONS WILL NOT BE SUBJECT TO ANY EXCEPTIONS. EACH PARTY HERETO HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

(c) Subject to Sections 8.8 and 8.9, each party will bear its own costs in respect of any disputes arising under this Agreement. Each of the parties to this Agreement consents to personal jurisdiction for any equitable action sought in the United States District Court for the Western District of New York or any court of the State of New York having subject matter jurisdiction.

8.15 No Commitment for Additional Financing. The Company acknowledges and agrees that the Purchaser has not made any representation, undertaking, commitment or agreement to provide or assist the Company in obtaining any financing, investment or other assistance, other than the purchase of the Shares as set forth herein and subject to the conditions set forth herein. In addition, the Company acknowledges and agrees that (i) no statements, whether written or oral, made by the Purchaser or its Representatives on or after the date of this Agreement shall create an obligation, commitment or agreement to provide or assist the Company in obtaining any financing or investment, (ii) the Company shall not rely on any such statement by the Purchaser or its Representatives, and (iii) an obligation, commitment or agreement to provide or assist the Company in obtaining any financing or investment may only be created by a written agreement, signed by the Purchaser and the Company, setting forth the terms and conditions of such financing or investment and stating that the parties intend for such writing to be a binding obligation or agreement. The Purchaser shall have the right, in its sole and absolute discretion, to refuse or decline to participate in any other financing of or investment in the Company, and shall have no obligation to assist or cooperate with the Company in obtaining any financing, investment or other assistance.

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

 

COMPANY:
EASTMAN KODAK COMPANY
By:   /s/ James V. Continenza
Name:   James V. Continenza
Title:   Executive Chairman and
  Chief Executive Officer


PURCHASER:
GO EK VENTURES IV, LLC
By:   /s/ B. Thomas Golisano

Name: B. Thomas Golisano

Exhibit 10.3

EXECUTION VERSION

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (the “Agreement”), dated as of February 26, 2021, by and between EASTMAN KODAK COMPANY a New Jersey corporation (the “Company”) and the investor listed on Exhibit A to the Purchase Agreement (as defined below) (the “Purchaser”).

WITNESSETH:

WHEREAS, the Company and the Purchaser have entered into a Series C Preferred Stock Purchase Agreement, dated as of February 26, 2021, (the “Purchase Agreement”), whereunder, among other things, the Purchaser agreed to purchase the Registrable Securities from the Company; and

WHEREAS, the execution of this Agreement by the Company and its delivery to the Purchaser is required by the Purchase Agreement,

NOW THEREFORE, in consideration of the premises and the covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which the parties hereto acknowledge, the parties agree as follows:

ARTICLE 1. DEFINITIONS

Capitalized terms used and not otherwise defined herein shall have the meanings given such terms in the Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings:

Business Day” means any day except Saturday, Sunday and any day which shall be a legal holiday or a day on which banking institutions in the States of New York or New Jersey generally are authorized or required by law or other government action to close.

Closing Date” shall have the meaning set forth in the Purchase Agreement.

Commission” means the United States Securities and Exchange Commission.

Common Stock” means the Company’s Common Stock, par value $0.01 per share.

Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

Filing Date” means the date on which the Registration Statement is initially filed.

Indemnified Party” shall have the meaning set forth in Section 5.3.

Indemnifying Party” shall have the meaning set forth in Section 5.3.

Losses” shall have the meaning set forth in Section 5.1.

Original Issue Date” has the meaning given thereto in the Purchase Agreement.


Person” means any individual, corporation, partnership, trust, limited liability company, association or other entity.

PIK Shares” has the meaning given thereto in the Purchase Agreement.

Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened.

Prospectus” means the prospectus included in the Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by the Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference in such Prospectus.

Purchase Agreement” has the meaning set forth in the Recitations.

Registrable Securities” means the number of shares of Common Stock into which the shares of Series C Preferred Stock purchased by the Purchaser pursuant to the Purchase Agreement or issued as PIK Shares with respect thereto are convertible; provided, that any such securities shall cease to constitute “Registrable Securities” upon the earliest to occur of: (A) the date on which such securities are disposed of pursuant to the Registration Statement; (B) the date on which such securities become eligible for sale under Rule 144 (or any successor rule then in effect) promulgated under the Securities Act, without restriction thereunder and either (1) restrictive legends have been removed from all book entry positions or certificates representing the applicable Registrable Securities or (2) if the Purchaser is unable to deliver an opinion that it is not then an affiliate of the Company, the Company has committed to remove such restrictive legends from the applicable Registrable Securities covered by a Form 144 that has been filed with the Commission pursuant to Rule 144; and (C) the date on which such securities cease to be outstanding.

Registration Statement” means any registration statement contemplated by this Agreement, including (in each case) the Prospectus, amendments and supplements to such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by reference in such registration statement.

Rule 144” means Rule 144 promulgated by the Commission under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

Rule 158” means Rule 158 promulgated by the Commission under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

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Rule 415” means Rule 415 promulgated by the Commission under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

Rule 424” means Rule 424 promulgated by the Commission under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

Series B Preferred Stock” shall have the meaning set forth in the Purchase Agreement.

Series C Preferred Stock” means the 1,000,000 preferred shares of the Company, designated as 5.00% Series C Convertible Preferred Stock, no par value per share, having the terms set forth in the Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of the Company in the form attached as Exhibit B to the Purchase Agreement.

ARTICLE 2. RESALE REGISTRATION STATEMENT

2.1 Registration Statement. Within twenty-one (21) months after the Closing Date and subject to Section 2.3, the Company shall prepare and file with the Commission the Registration Statement, which shall be a “resale” registration statement providing for the resale of the Registrable Securities pursuant to an offering to be made on a continuous basis under Rule 415. The Registration Statement shall be on Form S-3 and shall cover to the extent allowable under the Securities Act and the rules promulgated thereunder, such indeterminate number of additional shares of Common Stock resulting from stock splits, stock dividends or similar transactions of and/or from the Registrable Securities and adjustments in the number of shares of Common Stock into which each share of is convertible made pursuant to the terms of the Series C Preferred Stock. The Registration Statement may include only the Registrable Securities. The Company shall use its commercially reasonable efforts to cause the Registration Statement to be declared effective under the Securities Act no later than the second (2nd) anniversary of the Closing Date and to keep the Registration Statement continuously effective under the Securities Act until the earlier of (x) the date when all Registrable Securities covered by such Registration Statement have been sold or (y) the date on which all Registrable Securities then held by the Purchaser may be sold without restriction pursuant to Rule 144, as determined by counsel satisfactory to the Company and the Purchaser in a written opinion addressed to the Company and its transfer agent.

2.2 Certain Matters.

(a) In the event that, due to limits imposed by the Commission, the Company is unable on the Registration Statement to register for resale under Rule 415 of Regulation C under the Securities Act all of the Registrable Securities that it has agreed to file pursuant to the first sentence of Section 2.1, the Company shall include in the Registration Statement which may be a subsequent Registration Statement if the Company is required, or determines that it is desirable, to withdraw the original Registration Statement and file a new Registration Statement in order to rely on Rule 415 with respect to the full such amount of the Registrable Securities permitted by the Commission.

 

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(b) In the event that Form S-3 is not available for the registration of the resale of Registrable Securities hereunder, the Company shall register the resale of the Registrable Securities on Form S-1 or another appropriate form, and undertake to register the resale of the Registrable Securities on Form S-3 as soon as such form is available.

2.3 Blackout Period. The Company may postpone the filing or effectiveness of any Registration Statement (or amendment or supplement thereto) or suspend the use or effectiveness of any Registration Statement (and in each case suspend any other related action otherwise contemplated hereunder) for a reasonable “blackout period” if the board of directors of the Company determines in good faith that such registration or the sale by the Purchaser of Registrable Securities under such Registration Statement at such time (i) would adversely affect a pending or proposed significant corporate event, proposed financing or negotiations, proposed offering of Common Stock by the Company on its behalf or an underwritten public offering for selling stockholders pursuant to the Registration Rights Agreement dated September 3, 2013 between the Company and stockholders specified in such agreement or the Registration Rights Agreement dated November 15, 2016 between the Company and stockholders specified in such agreement (the “2016 Registration Rights Agreement”), or the Registration Rights Agreement dated February 26, 2021 between the Company and stockholders specified in such agreement or discussions or pending proposals with respect thereto or (ii) would require the disclosure of material non-public information the disclosure of which at such time would, in the good faith judgment of the board of directors of the Company, be materially adverse to the interests of the Company; provided that the filing or effectiveness of a Registration Statement (or amendment or supplement thereto) by the Company may not be postponed and the use or effectiveness of any Registration Statement may not be suspended (A) in the case of clause (i) above, for more than ten (10) days after the abandonment or consummation of any of the pending or proposed significant corporate event, proposed financing or the negotiations, discussions or pending proposals with respect thereto; (B) in the case of clause (ii) above, until the earlier to occur of the filing by the Company of its next succeeding Form 10-K or Form 10-Q or the date upon which such information is otherwise publicly disclosed by the Company; or (C) in any event, in the case of either clause (i) or (ii) above, for more than 90 days after the date of the determination of the board of directors of the Company; provided further that the Company may not postpone the filing or effectiveness of a Registration Statement (or amendment or supplement thereto) or suspend the use or effectiveness of any Registration Statement for more than an aggregate of 90 days in any 365-day period. In addition to the foregoing, the Company shall have the right to suspend the Purchaser’s ability to use a Prospectus in connection with non-underwritten sales off of a Registration Statement during each of its regular quarterly blackout periods applicable to directors and senior officers under the Company’s policies in existence from time to time. The Company shall not be required to effectuate an underwritten offering (during such a regular quarterly blackout period or otherwise) to the extent the Company reasonably concludes, after consultation in good faith with the Purchaser, that the Company cannot provide adequate, timely disclosure or satisfy other underwriting conditions in connection with such offering without undue burden. The Company shall use commercially reasonable efforts to amend the 2016 Registration Rights Agreement to include a provision therein (which the Company shall exercise) that provides blackout rights to the Company as set forth in Section 2.3(i) with respect to the registration of the Series B Preferred Stock or the Common Stock issued pursuant to the conversion thereof if and when the Purchaser is engaged in an offering of its Registrable Securities pursuant hereto.

 

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2.4 Demand Rights for Shelf Takedowns. Subject to Sections 2.3 and 8.4, upon the written demand of the Purchaser, the Company will facilitate in the manner described in this Agreement a “takedown” of Registerable Securities off of the Registration Statement; provided that the Purchaser may not make such demand more than two (2) times in the aggregate; and provided, furthermore, that any demand for an underwritten offering of Registrable Securities shall have an aggregate market value (based on the most recent closing pricing of the Common Stock into which the Series C Preferred Stock is convertible at the time of the demand) of at least $25 million. If a demand by the Purchaser has been made for a shelf takedown, no further demands may be made so long as such offering is still being pursued. Purchaser shall be entitled to withdraw a demand for a shelf takedown if the Company imposes a blackout pursuant to Section 2.3 and, notwithstanding anything to the contrary in this Agreement, if such demand is withdrawn by the Purchaser, such demand shall not count as one of the permitted demands hereunder and the Company shall pay all expenses in connection with such shelf takedown.

ARTICLE 3. NOTICES, CUTBACKS AND OTHER MATTERS

3.1 Notifications Regarding Request for Takedown. In order for the Purchaser to initiate a shelf takedown off of the Registration Statement, the Purchaser must so notify the Company in writing indicating the number of Registrable Securities sought to be offered and sold in such takedown and the proposed plan of distribution. Pending any required public disclosure by the Company and subject to applicable legal requirements, the parties will maintain the confidentiality of all notices and other communications regarding any such proposed takedown.

3.2 Plan of Distribution, Underwriters and Counsel. If the Registrable Securities are proposed to be sold in an underwritten offering, the Purchaser will be entitled to determine the plan of distribution and select the managing underwriters, in each case subject to the consent of the Company (not to be unreasonably withheld), and the Purchaser will also be entitled to select counsel for the Purchaser (which may be the same as counsel for the Company).

3.3 Cutbacks. If the Registrable Securities are proposed to be sold in an underwritten offering and the managing underwriters advise the Company and the Purchaser that, in their opinion, the number of Registrable Securities requested to be included in an underwritten offering exceeds the amount that can be sold in such offering without adversely affecting the distribution of the Registrable Securities being offered, such offering will include only the number of Registrable Securities that the managing underwriters advise can be sold in the offering.

3.4 Withdrawals. If the Purchaser has demanded a registered underwritten offering to be conducted, the Purchaser may, no later than the time at which the public offering price and underwriters’ discount are determined with the managing underwriter, decline to sell all or any portion of the Registrable Securities being offered for the Purchaser’s account; provided that if the Purchaser declines to sell, in whole or in part, the Registrable Securities being offered for the Purchaser’s account, then the demand for such underwritten offering shall count as a demand for purposes of Section 2.4 of this Agreement unless the Purchaser reimburses the Company for all reasonable out-of-pocket expenses incurred by the Company in connection with such underwritten offering.

 

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3.5 Lockups. In connection with any underwritten offering of Registrable Securities, the Company and the Purchaser will agree (in the case of the Company, with respect to the Common Stock and any rights related thereto, and in the case of the Purchaser, with respect to the Registrable Securities held by it and any rights related thereto) to be bound by customary lockup restrictions in the applicable underwriting agreement

3.6 Limitation on Other Registration Rights. From and after the date of this Agreement, the Company shall not, without the (a) prior written consent of the Purchaser or (b) approval of Purchaser’s board nominee, if such nominee is then serving as a director of the Company, enter into any agreement with any holder or prospective holder of any securities of the Company that would provide to such holder the right to include securities in any registration on other than on a subordinate basis after Purchaser has had the opportunity to include in the registration and offering all shares of Registrable Securities that it wishes and such amount would not be subject to cutback by the Commission.

ARTICLE 4. FACILITATING REGISTRATIONS AND OFFERINGS

4.1 Registration Statements. In connection with any Registration Statement, the Company will:

(a) (i) prepare and file with the Commission the Registration Statement covering the applicable Registrable Securities pursuant to Section 2.1 of this Agreement, (ii) file amendments thereto as warranted, (iii) seek the effectiveness thereof, and (iv) file with the Commission such Prospectuses as may be required, all in consultation with the Purchaser (or its representatives) and as reasonably necessary in order to permit the offer and sale of such Registrable Securities in accordance with the applicable plan of distribution;

(b) (1) within a reasonable time prior to the filing of any Registration Statement, any Prospectus, any amendment to any Registration Statement, any amendment or supplement to a Prospectus or any issuer free writing prospectus covering Registrable Securities, provide copies of such documents to the Purchaser (or its representatives) and to the underwriter or underwriters of an underwritten offering, if applicable, and to their respective counsel; fairly consider such reasonable changes in any such documents prior to or after the filing thereof as the counsel to the Purchaser or the underwriter or the underwriters may request; and make such of the representatives of the Company as shall be reasonably requested by the Purchaser or any underwriter available for discussion of such documents;

(2) within a reasonable time prior to the filing of any document which is to be incorporated by reference into any Registration Statement or a Prospectus covering Registrable Securities, provide copies of such document to counsel for the Purchaser and underwriters; fairly consider such reasonable changes in such document prior to or after the filing thereof as counsel for the Purchaser or such underwriter shall request; and make such of the representatives of the Company as shall be reasonably requested by such counsel available for discussion of such document;

 

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(c) use its commercially reasonable efforts to cause any Registration Statement and the related Prospectus and any amendment or supplement thereto, as of the effective date of such Registration Statement, amendment or supplement and during the distribution of the registered Registrable Securities (x) to comply in all material respects with the requirements of the Securities Act and the rules and regulations of the Commission and (y) not to contain any 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;

(d) notify the Purchaser promptly, and, if requested by the Purchaser, confirm such advice in writing, (i) when any Registration Statement has become effective and when any post-effective amendments and supplements thereto become effective if such Registration Statement or post-effective amendment is not automatically effective upon filing pursuant to Rule 462, (ii) of the issuance by the Commission or any U.S. state securities authority of any stop order, injunction or other order or requirement suspending the effectiveness of any Registration Statement or the initiation of any proceedings for that purpose, (iii) if, between the effective date of any Registration Statement and the closing of any sale of securities covered thereby pursuant to any agreement to which the Company is a party, the representations and warranties of the Company contained in such agreement cease to be true and correct in all material respects or if the Company receives any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction or the initiation of any proceeding for such purpose, and (iv) of the happening of any event during the period any Registration Statement is effective as a result of which such Registration Statement or the related Prospectus contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading; provided that the Purchaser, upon receiving written notice of an event described in clauses (ii) to (iv) of this Section 4.1(d), shall discontinue (and direct any other person making offers and sales of Registrable Securities on its behalf to discontinue) offers and sales of Registrable Securities pursuant to any Registration Statement (other than those pursuant to a plan in effect prior to such event and that complies with Rule 10b5-1 under the Exchange Act) until it is advised in writing by the Company that the use of the applicable Prospectus may be resumed and is furnished with an amended or supplemented Prospectus;

(e) furnish counsel for each underwriter, if any, and for the Purchaser with copies of any written correspondence with the Commission or any state securities authority relating to the Registration Statement or Prospectus;

(f) otherwise use its commercially reasonable efforts to comply with all applicable rules and regulations of the Commission, including making available to its security holders an earnings statement covering at least 12 months which shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar provision then in force); and

(g) use its commercially reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of any Registration Statement at the earliest possible time.

 

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4.2 Shelf Takedowns. In connection with any shelf takedown that is demanded by the Purchaser, the Company will:

(a) cooperate with the Purchaser and the sole underwriter or managing underwriter of an underwritten offering, if any, to facilitate the timely preparation and delivery of certificates representing the Registrable Securities to be sold and not bearing any restrictive legends; and enable such Registrable Securities to be in such denominations (consistent with the provisions of the governing documents thereof), and registered in such names as the Purchaser or the sole underwriter or managing underwriter of an underwritten offering of Registrable Securities, if any, may reasonably request at least five days prior to any sale of such Registrable Securities;

(b) furnish to the Purchaser and to each underwriter, if any, participating in the relevant offering, without charge, as many copies of the applicable Prospectus, including each preliminary prospectus, and any amendment or supplement thereto and such other documents as the Purchaser or underwriter may reasonably request in order to facilitate the public sale of the Registrable Securities, subject to the other provisions of this Agreement; the Company hereby consents to the use of the Prospectus, including each preliminary prospectus, by the Purchaser and each underwriter in connection with the offering and sale of the Registrable Securities covered by the Prospectus or the preliminary prospectus;

(c) (i) use its commercially reasonable efforts to register or qualify the Registrable Securities being offered and sold under all applicable U.S. state securities or “blue sky” laws of such jurisdictions as each underwriter shall reasonably request; (ii) use its commercially reasonable efforts to keep each such registration or qualification effective during the period such Registration Statement is required to be kept effective; and (iii) do any and all other acts and things which may be reasonably necessary or advisable to enable each such underwriter, if any, and/or the Purchaser to consummate the disposition in each such jurisdiction of such Registrable Securities owned by the Purchaser, including amending or supplementing such shelf Registration Statement, to enable such Registrable Securities to be offered and sold as contemplated by Purchaser; provided, however, that the Company shall not be obligated to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified, to subject itself to taxation in any such jurisdiction, or to consent to be subject to general service of process (other than service of process in connection with such registration or qualification or any sale of Registrable Securities in connection therewith) in any such jurisdiction;

(d) use its commercially reasonable efforts to cause all Registrable Securities being offered and sold pursuant to this Agreement to be qualified for inclusion in or listed on The New York Stock Exchange or any securities exchange on which the Common Stock issued by the Company are then so qualified or listed if so requested by the Purchaser or if so requested by the underwriter or underwriters of an underwritten offering of Registrable Securities, if any;

(e) cooperate and assist in any filings required to be made with The New York Stock Exchange or other securities exchange and, solely with regard to an underwritten shelf takedown, in the performance of any reasonable due diligence investigation by the underwriters;

(f) solely with regard to an underwritten shelf takedown, use its commercially reasonable efforts to facilitate the distribution and sale of any Registrable Securities to be offered pursuant to this Agreement, including without limitation by making road show presentations, holding meetings with and making calls to potential investors and taking such other actions as shall be reasonably requested by the Purchaser or the lead managing underwriter;

 

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(g) solely with regard to an underwritten shelf takedown, enter into underwriting agreements in customary form (including provisions with respect to indemnification and contribution in customary form) and take all other customary and appropriate actions in order to expedite or facilitate the disposition of such Registrable Securities and in connection therewith:

1. make such representations and warranties to the Purchaser and the underwriters in such form, substance and scope as are customarily made by issuers to underwriters in similar underwritten offerings;

2. obtain opinions of counsel to the Company and updates thereof (which counsel and opinions (in form, scope and substance) shall be reasonably satisfactory to the lead managing underwriter) addressed to the underwriters and, if reasonably obtainable, the Purchaser covering the matters customarily covered in opinions delivered in similar underwritten offerings; and

3. obtain “cold comfort” letters and updates thereof from the Company’s independent certified public accountants addressed to the underwriters, and, if reasonably obtainable, the Purchaser, which letters shall be customary in form and shall cover matters of the type customarily covered in “cold comfort” letters to underwriters in connection with similar underwritten offerings.

4.3 Due Diligence. In connection with each registration and offering of Registrable Securities to be sold by the Purchaser, the Company will, in accordance with customary practice, make reasonably available for inspection by representatives of the Purchaser and underwriters and any counsel or accountant retained by the Purchaser or underwriters all relevant financial and other records, pertinent corporate documents and properties of the Company and cause appropriate officers, managers and employees of the Company to supply all information reasonably requested by any such representative, underwriter, counsel or accountant in connection with their due diligence exercise. Such access to information, documents, personnel and other matters shall be provided to such participants, at such times and in such manner as are customary for offerings of the relevant type and as do not unreasonably burden the Company or unreasonably interfere with its operations. All information, documents and other matters provided or made accessible by the Company in connection with a registered offering hereunder shall be kept confidential pending any public disclosure thereof by the Company and subject to applicable legal requirements.

4.4 Information from the Purchaser. The Purchaser shall furnish to the Company such information regarding itself as is required to be included in any Registration Statement, the ownership of Registrable Securities by the Purchaser and the proposed distribution by the Purchaser of such Registrable Securities as the Company may from time to time reasonably request in writing. The Purchaser participating in a registered offering hereunder shall do so on the terms and conditions applicable to such offering and the applicable plan of distribution; provided that the Purchaser shall not be required to make any representations or warranties to or agreements with the Company or the underwriters other than representations, warranties or agreements regarding the Purchaser and the Purchaser’s Registrable Securities. Notwithstanding any other provision of this Agreement, the Company shall not be required to file any Registration Statement or include Registrable Securities therein unless it has received from the Purchaser, within a reasonable period of time prior to the anticipated filing date of such Registration Statement, all requested information required to be included in the Registration Statement.

 

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ARTICLE 5. REGISTRATION EXPENSES

All fees and expenses incident to the performance of or compliance with this Agreement by the Company, except as and to the extent specified in this Article 5, shall be borne by the Company whether or not the Registration Statement is filed or becomes effective and whether or not any Registrable Securities are sold pursuant to the Registration Statement. The fees and expenses referred to in the foregoing sentence shall include, without limitation, and to the extent applicable (i) all registration and filing fees (including, without limitation, fees and expenses (A) with respect to filings required to be made with each securities exchange or market on which Registrable Securities are required hereunder to be listed, if any, (B) with respect to filing fees required to be paid to the Financial Industry Regulatory Authority and (C) in compliance with state securities or “blue sky” laws (including, without limitation, fees and disbursements of counsel for the Purchaser in connection with “blue sky” qualifications of the Registrable Securities and determination of the eligibility of the Registrable Securities for investment under the laws of such jurisdictions as the Company may designate)), (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities and of printing prospectuses if the printing of prospectuses is requested by the Company), (iii) messenger, telephone and delivery expenses, (iv) Securities Act liability insurance, if the Company elects to purchase such insurance, and (v) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement, including, without limitation, the Company’s independent public accountants (including the expenses of any comfort letters or costs associated with the delivery by independent public accountants of a comfort letter or comfort letters). In addition, the Company shall be responsible for all of its internal expenses incurred in connection with the consummation of the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit, the fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange if required hereunder. The Company shall not be responsible for any underwriters’, brokers’ and dealers’ discounts and commissions, transfer taxes or other similar fees incurred by Purchaser in connection with the sale of the Registrable Securities.

ARTICLE 6. INDEMNIFICATION

6.1 Indemnification by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify and hold harmless the Purchaser, its officers, directors, employees and affiliates, each Person who controls the Purchaser (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors and employees of each such controlling Person (collectively, the “Purchaser Indemnified Parties”), to the full extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, costs of preparation and attorneys’ and expert witnesses’ fees) and expenses (collectively, “Losses”) (as determined by a court of competent jurisdiction in a final judgment not subject to appeal or review), to which such Purchaser Indemnified Parties may become subject under the Securities Act or otherwise, arising out of or relating to any violation of securities laws or untrue or alleged untrue statement of a material fact

 

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contained in any Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in the light of the circumstances under which they were made) not misleading, except to the extent, but only to the extent, that such untrue statements or omissions are based solely upon information regarding the Purchaser furnished in writing to the Company by the Purchaser expressly for use therein. The Company shall notify the Purchaser promptly of the institution, threat or assertion of any Proceeding of which the Company is aware in connection with the transactions contemplated by this Agreement. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Purchaser, the directors and officers of the Purchaser, or controlling Person of the Purchaser, and shall survive the transfer of such securities held by the Purchaser.

6.2 Indemnification by Purchaser. The Purchaser shall indemnify and hold harmless the Company, its directors, officers and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers and employees of such controlling Persons (collectively, the “Company Indemnified Parties”), to the full extent permitted by applicable law, from and against all Losses (as determined by a court of competent jurisdiction in a final judgment not subject to appeal or review), to which the Company Indemnified Parties may become subject under the Securities Act or otherwise, arising solely out of or based solely upon any untrue statement of a material fact contained in any Registration Statement, any Prospectus, or any form of prospectus, or in any amendment or supplement thereto, or arising solely out of or based solely upon any omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in the light of the circumstances under which they were made) not misleading, to the extent, but only to the extent, that such untrue statement or omission is contained in any information so furnished in writing by the Purchaser to the Company specifically for inclusion in the Registration Statement or such Prospectus. Notwithstanding anything to the contrary contained herein, the Purchaser shall be liable under this Section 6.2 for only that amount as does not exceed the net proceeds to the Purchaser as a result of the sale of Registrable Securities pursuant to such Registration Statement.

6.3 Conduct of Indemnification Proceedings.

(a) If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”), such Indemnified Party promptly shall notify the Person from whom indemnity is sought (the “Indemnifying Party”) in writing, and the Indemnifying Party shall be entitled to assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses incurred in connection with defense thereof; provided, that the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) that such failure shall have proximately and materially adversely prejudiced the Indemnifying Party.

 

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(b) An Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such fees and expenses; or (2) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and such parties shall have been advised by counsel that a conflict of interest is likely to exist if the same counsel were to represent such Indemnified Party and the Indemnifying 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 thereof and such counsel shall be at the expense of the Indemnifying Party). The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld or delayed. 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 a party and indemnity has been sought hereunder, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding.

(c) All fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section) shall be paid to the Indemnified Party, as incurred, within thirty (30) Business Days of written notice thereof to the Indemnifying Party (regardless of whether it is ultimately determined that an Indemnified Party is not entitled to indemnification hereunder; provided, that the Indemnified Party shall reimburse all such fees and expenses to the extent it is finally judicially determined that such Indemnified Party is not entitled to indemnification hereunder).

6.4 Contribution.

(a) If a claim for indemnification under Sections 6.1 or 6.2 is due but unavailable to an Indemnified Party, then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand and the Indemnified Party on the other in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission.

 

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(b) The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in Section 6.3, any reasonable attorneys’ or other reasonable fees or expenses incurred by such party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section was available to such party in accordance with its terms. In no event shall the Purchaser be required to contribute an amount under this Section 6.4 in excess of the net proceeds received by it upon the sale of its Registrable Securities pursuant to a Registration Statement giving rise to such contribution obligation.

(c) The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 6.4 were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not also guilty of such fraudulent misrepresentation.

(d) The indemnity and contribution agreements contained in this Article 6 are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties pursuant to the law.

6.5 Survival. The agreements contained in this Article 6 shall survive the transfer of the Registered Securities by the Purchaser and sale of all of the Registrable Securities pursuant to any registration statement and shall remain in full force and effect, regardless of any investigation made by or on behalf of any Purchaser Indemnified Party.

ARTICLE 7. RULE 144

If the Company is subject to the requirements of Section 13, 14 or 15(d) of the Exchange Act, the Company covenants that it will file any reports required to be filed by it under the Securities Act and the Exchange Act, so as to enable the Purchaser to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by (a) Rule 144 under the Securities Act or (b) any successor rule or regulation hereafter adopted by the Commission. Upon the request of the Purchaser, the Company will deliver to the Purchaser a written statement as to whether it has complied with such requirements.

ARTICLE 8. MISCELLANEOUS

8.1 Remedies. In the event of a breach by the Company or the Purchaser of any of their respective obligations under this Agreement, the Company or the Purchaser, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Company and the Purchaser acknowledge and agree that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by either of them of any of the provisions of this Agreement and each hereby further agrees that, in the event of any action for specific performance in respect of such breach, it shall waive the defense that a remedy at law would be adequate.

8.2 No Inconsistent Agreements. The Company shall not enter into any such agreement with respect to its securities that is inconsistent with or violates the rights granted to the Purchaser in this Agreement.

 

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8.3 Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in writing and signed by the Company and the Purchaser shall have consented thereto.

8.4 Termination of Registration Rights. This Agreement to register Registrable Securities for sale under the Securities Act shall terminate on the earliest to occur of (a) the first date on which all outstanding Registrable Securities are eligible for sale under Rule 144 and (i) restrictive legends have been removed from all book entry positions or certificates representing the applicable Registrable Securities, or (ii) if the Purchaser is unable to deliver an opinion that it is not then an affiliate of the Company, the Company has committed to remove such restrictive legends from the applicable Registrable Securities covered by a Form 144 that has been filed with the Commission pursuant to Rule 144, and (b) the later of the third anniversary of the effective date of the Registration Statement filed pursuant to Section 2.1 or the fifth anniversary of the Original Issue Date, in either case which shall be extended day-day-for day for any blackout periods initiated by the Company in accordance with Section 2.3 in effect during the 180 day period prior to the scheduled termination date; provided that the following shall not be taken into account for calculating such day-for-day extensions: (i) closed trading windows established by the Company for its Common Stock that are applicable to the Purchaser while it has a representative serving on the Company’s Board of Directors and (ii) blackout periods related to Purchaser’s possession of material non-public information. Notwithstanding any termination of this Agreement pursuant to this Section 8.4, the parties’ rights and obligations under Article 6 hereof shall continue in full force and effect in accordance with their respective terms.

8.5 Notices. Any notice, demand, request, waiver or other communication required or permitted to be given hereunder shall be in writing and shall be delivered by a recognized courier service, fully prepaid and properly addressed upon the earlier of (i) actual receipt thereof, as shown by the records of such courier or (ii) five days after the receipt thereof by the courier from the party giving it. The addresses for such notice, demand, request, waiver or other communication shall be:

If to the Company:

Eastman Kodak Company

343 State Street

Rochester, NY 14650

Attention:     General Counsel

If to Purchaser:

GO EK Ventures IV, LLC

7632 County Road 42

Victor, New York, 14564-8906

Attention:     David Bovenzi, Managing Director

E-Mail:         dbovenzi@grandoakscap.com

 

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Either party may from time to time change its address for notice by giving at least five (5) days written notice of such changed address to the other party.

8.6 Successors and Assigns.

(a) This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns and shall inure to the benefit of the Purchaser and its successors and permitted assigns. Neither party may assign this Agreement nor any of its rights or obligations hereunder without the prior written consent of the other party; provided, however that Purchaser’s rights under this Agreement may be assigned (but only with all related obligations) to a transferee of Registrable Securities that (i) is an Affiliate of a Purchaser; or (ii) after such transfer, holds shares of Registrable Securities representing at least 2,500,000 shares of Common Stock (subject to appropriate adjustment for stock splits, stock dividends, combinations, and other recapitalizations).

(b) In the event the Company engages in a merger or consolidation in which the Registrable Securities are converted into securities of another company, or if there are any changes in the Common Stock by way of share split, stock dividend, combination or reclassification, appropriate arrangements will be made so that the registration rights provided under this Agreement continue to be provided to the Purchaser by the issuer of such securities. To the extent any new issuer, or any other company acquired by the Company in a merger or consolidation, was bound by registration rights obligations that would conflict with the provisions of this Agreement, the Company will, unless the Purchaser otherwise agrees, use commercially reasonable efforts to modify any such “inherited” registration rights obligations so as not to interfere in any material respects with the rights provided under this Agreement.

8.7 Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and, all of which taken together shall constitute one and the same Agreement and shall become effective when counterparts have been signed by each party and delivered to the other parties hereto, it being understood that all parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile signature were the original thereof.

8.8 Governing Law; Jurisdiction. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York. This Agreement shall not be interpreted or construed with any presumption against the party causing this Agreement to be drafted. The exclusive jurisdiction for the resolution of any conflicts regarding this Agreement shall be in the courts of the Western District of New York. This exclusive jurisdiction is a material provision to this Agreement.

8.9 Waiver of Jury Trial. Each of the parties to this Agreement hereby unconditionally agrees to waive, to the fullest extent permitted by applicable law, its respective rights to a jury trial of any claim or cause of action (whether based on contract, tort or otherwise) based upon, arising out of or relating to this Agreement or the transactions contemplated hereby. The scope of this waiver is intended to be all-encompassing of any and all disputes that may be filed in any court and that

 

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relate to the subject matter of this Agreement, including contract claims, tort claims and all other common law and statutory claims. Each party hereto: (i) acknowledges that this waiver is a material inducement to enter into this Agreement, that each has already relied on this waiver in entering into this Agreement, and that each will continue to rely on this waiver in their related future dealings, (ii) acknowledges that no representative, agent or attorney of any other party has represented, expressly or otherwise, that such other party would not in the event of any action or proceeding, seek to enforce the foregoing waiver and (iii) warrants and represents that it has reviewed this waiver with its legal counsel and that it knowingly and voluntarily waives its jury trial rights following consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION 8.9 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event of litigation, this Agreement may be filed as a written consent to a trial by the court.

8.10 Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any remedies provided by law.

8.11 Severability. If any term, provision, covenant or restriction of this Agreement is held to be invalid, illegal, void or unenforceable in any respect, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

8.12 Section Headings. The Section headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Registration Rights Agreement to be duly executed by a person thereunto authorized as of the date first indicated above.

 

COMPANY:
EASTMAN KODAK COMPANY
By:   /s/ David E. Bullwinkle
Name:   David E. Bullwinkle
Title:   Chief Financial Officer and Senior Vice President

[Signature Page to Series C Registration Rights Agreement]


PURCHASER:
GO EK VENTURES IV, LLC
By:   /s/ B. Thomas Galisano
Name:   B. Thomas Galisano
Title:   Member

[Signature Page to Series C Registration Rights Agreement]

Exhibit 10.4

[Execution]

AMENDMENT NO. 4 TO AMENDED AND RESTATED CREDIT AGREEMENT

AMENDMENT NO. 4 TO AMENDED AND RESTATED CREDIT AGREEMENT, dated as of February 26, 2021 (this “Amendment No. 4”), by and among Bank of America, N.A., a national banking association, in its capacity as administrative agent and collateral agent (in such capacity, together with its successors and assigns, “Agent”) pursuant to the Credit Agreement (as defined below), each of the parties to the Credit as lenders (individually, each a “Lender” and collectively, “Lenders”), Eastman Kodak Company, a New Jersey corporation (the “Borrower” or “Company”), the subsidiaries of Borrower party thereto as Guarantors (individually, each a “Guarantor” and collectively, “Guarantors”).

W I T N E S S E T H :

WHEREAS, Agent, Lenders and certain other parties have entered into a senior secured revolving credit facility pursuant to which Agent and Lenders have made, and may make, loans and advances and provide other financial accommodations to Borrower as set forth in the Amended and Restated Credit Agreement, dated as of May 26, 2016, by and among Borrower, Guarantors, Lenders and Agent (as amended by Amendment No. 1, dated as of November 7, 2016, Amendment No. 2, dated as of May 24, 2019 and Amendment No. 3, dated as of March 27, 2020 and as in effect prior to the date hereof, the “Existing Credit Agreement”) and the other Loan Documents (as defined in the Existing Credit Agreement);

WHEREAS, Borrower and Guarantors have requested that Agent and Lenders agree to certain amendments to the Existing Credit Agreement, and Agent and Lenders are willing to agree to such amendments, subject to the terms and conditions contained herein; and

WHEREAS, by this Amendment No. 4, Agent, Lenders and the Loan Parties intend to evidence such amendments;

NOW, THEREFORE, in consideration of the foregoing and the mutual agreements and covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Definitions.

1.1. Interpretation. For purposes of this Amendment No. 4, the following terms shall have the following meanings, and all terms used herein which are not otherwise defined herein, including but not limited to, those terms used in the recitals hereto, shall have the respective meanings assigned thereto in the Credit Agreement (as defined below).

(a) Amendment No. 4” means Amendment No. 4 to Amended and Restated Credit Agreement, dated as of February 26, 2021, by and among Agent, Lenders, and Loan Parties, as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.

(b) “Amendment No. 4 Effective Date” means the first date on which the conditions precedent set forth in Section 8 of Amendment No. 4 are satisfied as set forth in the notice from Agent to Borrower provided for in Section 8 of Amendment No. 4.


2. Amendments to Existing Credit Agreement. As of the Amendment No. 4 Effective Date, the Existing Credit Agreement is hereby amended and restated in its entirety such that on the Amendment No. 4 Effective Date, the terms and conditions set forth in Exhibit A hereto shall replace and supersede in their entirety the terms and conditions set forth in the Existing Credit Agreement. All schedules and exhibits to the Existing Credit Agreement, as in effect immediately prior to the date of this Amendment No. 4, shall constitute schedules and exhibits to the Credit Agreement, except, that, those schedules and exhibits which are attached to the Credit Agreement as set forth in Exhibit A to this Amendment No. 4 shall constitute those respective schedules and exhibits after the date of this Amendment No. 4. Each Lender signatory hereto and Borrower consent to the amendment of the Existing Credit Agreement as provided for herein pursuant to the terms set forth in Exhibit A. From and after the Amendment No. 4 Effective Date, each reference to the “Agreement”, “Credit Agreement”, “thereunder”, “thereof”, “therein” or words of like import originally applicable to the Existing Credit Agreement contained in any Loan Document shall mean and be a reference to the Credit Agreement as set forth in Exhibit A to this Amendment No. 4 (as such credit agreement may be amended, supplemented, restated or otherwise modified from time to time, the “Credit Agreement”).

3. Intercreditor Agreements. Without limitation of any of the terms set forth in Section 8.01(b) or 8.11 of the Credit Agreement, each Lender (a) authorizes and instructs the Agent to enter into each of the Term Loan Intercreditor Agreement as Agent and on behalf of such Lender and the Supplemental Letter of Credit Facility Intercreditor Agreement as Agent and on behalf of such Lender, (b) agrees that, upon the execution and delivery thereof, such Lender will be bound by the provisions of each of the Term Loan Intercreditor Agreement and the Supplemental Letter of Credit Facility Intercreditor Agreement, in each case, as if it were a signatory thereto and will take no actions contrary to the provisions of the Term Loan Intercreditor Agreement or the Supplemental Letter of Credit Facility Intercreditor Agreement, (d) agrees that no Lender shall have any right of action whatsoever against the Agent as a result of any action taken by Agent pursuant to this Section or in accordance with the terms of the Term Loan Intercreditor Agreement and the Supplemental Letter of Credit Facility Intercreditor Agreement and (e) agrees that the Agent may take all actions (and execute all documents) required (or deemed advisable) by it in accordance with the terms of the Term Loan Interecreditor Agreement and the Supplemental Letter of Credit Facility Intercreditor Agreement, in each case, and without any further consent, authorization or other action by such Lender, including the execution and delivery of such amendments, supplements or other modifications to the Term Loan Intercreditor Agreement or the Supplemental Letter of Credit Facility Intercreditor Agreement as are approved by Agent.

4. Representations and Warranties. Each Loan Party represents and warrants with and to Secured Parties as follows, which representations and warranties shall survive the execution and delivery hereof:

4.1. As of the Amendment No. 4 Effective Date, no Default or Event of Default exists or has occurred and is continuing.

4.2. This Amendment No. 4 has been duly authorized, executed and delivered by all necessary corporate or limited liability company action, as applicable, on the part of each Loan Party and, upon the notification by Agent to Borrower and Lenders of the Amendment No. 4 Effective Date, is in full force and effect as of the date hereof, as the case may be, and the agreements and obligations of each Loan Party, as the case may be, contained herein constitute legal, valid and binding obligations of each Loan Party, enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

 

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4.3. All of the representations and warranties of each Loan Party set forth herein and in each of the other Loan Documents are true and correct in all material respects (or, in the case of any representations and warranties qualified by materiality or Material Adverse Effect, in all respects) on and as of the Amendment No. 4 Effective Date before and after giving effect to the effectiveness of this Amendment No. 4 and the transactions contemplated hereby with the same effect as though made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date in which case such representations and warranties shall be true and correct in all material respects (or, in the case of any representations and warranties qualified by materiality or Material Adverse Effect, in all respects) as of such earlier date.

5. Amendment Fee. Borrower shall pay to Agent, for the account of the Lenders which execute this Amendment No. 4, an amendment fee in an amount equal to seventy-five (75) basis points multiplied by the aggregate Commitment of each such Lender as in effect immediately after the Amendment No. 4 Effective Date, which fee shall be fully earned and payable on the Amendment No. 4 Effective Date and shall be nonrefundable in all circumstances.

6. Reaffirmation. Each Loan Party acknowledges, confirms and agrees that (a) it is indebted to Agent and Lenders under the Existing Credit Agreement, including principal and all interest accrued and accruing thereon (to the extent applicable), and all fees, costs, expenses and other charges relating thereto, all of which are unconditionally owing by Loan Parties, without offset, defense or counterclaim of any kind, nature or description whatsoever, (b) Agent has had and shall on and after the date hereof continue to have, for itself and the benefit of Lenders, a security interest in and lien upon the Collateral heretofore granted to Agent (or its predecessors in whatever capacity) pursuant to the Loan Documents to secure the Obligations, (c) the liens and security interests of Agent in the Collateral shall be deemed to be continuously granted and perfected from the earliest date of the granting and perfection of such liens and security interests to Agent, and (d) the Existing Credit Agreement and each of the other Loan Documents remain in full force and effect and are hereby ratified and confirmed.

7. No Novation. The terms and conditions of the Existing Credit Agreement are amended as set forth in, and restated in their entirety and superseded by, Exhibit A to this Amendment No. 4. Nothing in this Amendment No. 4 (including Exhibit A hereto) shall be deemed to be a novation of any of the Obligations as defined in the Existing Credit Agreement or in any way impair or otherwise affect the rights or obligations of the parties thereunder (including with respect to Revolving Loans and representations and warranties made thereunder) except as such rights or obligations are amended or modified hereby. Notwithstanding any provision of this Amendment No. 4 or any other Loan Document or instrument executed in connection herewith, the execution and delivery of this Amendment No. 4 and the incurrence of Obligations hereunder shall be in substitution for, but not in payment of, the Obligations owed by the Loan Parties under the Existing Credit Agreement. The Existing Credit Agreement as amended and restated pursuant to the terms set forth in Exhibit A shall be deemed to be a continuing agreement among the parties, and all documents, instruments and agreements delivered pursuant to or in connection with the Existing Credit Agreement not amended and restated in connection with the entry of the parties into this Amendment No. 4 shall remain in full force and effect, each in accordance with its terms, as of the date of delivery or such other date as contemplated by such document, instrument or agreement to the same extent as if the modifications to the Existing Credit Agreement contained herein were set forth in an amendment to the Existing Credit Agreement in a customary form, unless such document, instrument or agreement has otherwise been terminated or has expired in accordance with or pursuant to the terms of this Amendment No. 4, the Existing Credit Agreement or such document, instrument or agreement or as otherwise agreed by the required parties hereto or thereto.

8. Conditions Precedent. The effectiveness of this Amendment No. 4 shall be subject to the satisfaction of each of the following conditions:

8.1. Agent shall have received executed counterparts (originals or electronic copies) of this Amendment No. 4, duly authorized, executed and delivered by Agent, each of the Lenders and the Loan Parties;

 

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8.2. Agent shall have received correct and complete copies of each of the Term Loan Documents, as duly authorized, executed and delivered by the parties thereto, each in form and substance reasonably satisfactory to Agent, the Term Loan Facility shall be consummated and effective and Borrower shall have received not less than $225,000,000 in proceeds of loans under the Term Loan Facility;

8.3. Agent shall have received correct and complete copies of each of the Supplemental Letter of Credit Facility Documents, as duly authorized, executed and delivered by the parties thereto, each in form and substance reasonably satisfactory to Agent, and the Supplemental Letter of Credit Facility shall be consummated and effective;

8.4. Agent shall have received correct and complete copies of each of the Convertible Note Documents, as duly authorized, executed and delivered by the parties thereto, each in form and substance reasonably satisfactory to Agent, and the Convertible Notes shall be issued and effective;

8.5. Agent shall have received, in form and substance reasonably satisfactory to Agent, the Term Loan Intercreditor Agreement, as duly authorized, executed and delivered by the parties thereto;

8.6. Agent shall have received, in form and substance reasonably satisfactory to Agent, the Supplemental Letter of Credit Facility Intercreditor Agreement, as duly authorized, executed and delivered by the parties thereto;

8.7. Agent shall have received, for the account of the applicable Lenders, the fee set forth in Section 5 above and payment of all other fees and expenses of Agent or its affiliates in connection with this Amendment No. 4;

8.8. Agent shall have received projected balance sheets, income statements, statements of cash flows and availability of Borrower and its Restricted Subsidiaries giving effect to this Amendment No.4, the Term Loan Facility and the other Transactions, covering the period through the Maturity Date, which projections shall be on a monthly basis for the twelve-month period following the Amendment No. 4 Effective Date, a quarterly basis for the twelve-month period thereafter and on an annual basis thereafter through the Maturity Date, in each case with the results and assumptions in all of such projections in form and substance satisfactory to Agent;

8.9. Agent shall have received, each in form and substance reasonably satisfactory to Agent, (i) customary legal opinions, (ii) customary evidence of authority from each Loan Party, (iii) customary officer’s certificates from each Loan Party, (iv) good standing certificates (to the extent applicable) in the respective jurisdictions of organization of each Loan Party, and (v) lien searches with respect to each Loan Party;

8.10. Agent shall have received (i) evidence that (A) $100,000,000 of the Series A Preferred Stock have been redeemed and cancelled and (B) the remaining balance of the Series A Preferred Stock have been exchanged for Series B Preferred Stock, such that after giving effect to such redemption and such exchange, Borrower has no further obligations or liabilities in respect of the Series A Preferred Stock and (ii) the agreements and documents providing for the redemption of the Series A Preferred Stock and relating to the Series B Preferred Stock Issuance, in each case which shall be on terms and conditions satisfactory to Agent;

 

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8.11. the Excess Availability on the Amendment No. 4 Effective Date after the application of proceeds of the initial funding under this credit facility as amended by this Amendment No. 4 and after payment of all fees and expenses of the transactions related to this Amendment No. 4 payable on the Amendment No. 4 Effective Date, shall be not less than $25,000,000;

8.12. Agent shall have received an update of the Borrowing Base consistent with Agent’s customary procedures and practices so as to obtain current results;

8.13. Agent shall have received a customary solvency certificate from the chief financial officer of Borrower substantially in form and substance reasonably satisfactory to Agent and as of the Amendment No. 4 Effective Date and after giving effect to the transactions related to this Amendment No. 4, Borrower shall not be insolvent or become insolvent as a result thereof;

8.14. after giving effect to this Amendment No. 4, no Default or Event of Default shall exist or have occurred and be continuing;

8.15. no material adverse change in the business, operations, profits, assets or prospects of Loan Parties shall have occurred since September 30, 2020; and

8.16. Agent and Lenders shall have received payment of all reasonable and documented out-of-pocket costs and expenses (including, without limitation, the reasonable and documented fees and expenses of counsel for Agent).

Agent shall notify Borrower and Lenders of the Amendment No. 4 Effective Date and such notice shall be conclusive and binding.

9. Effect of Amendment No. 4. Except as expressly set forth herein, no other amendments, changes or modifications to the Loan Documents are intended or implied, and in all other respects the Loan Documents are hereby specifically ratified, restated and confirmed by all parties hereto as of the effective date hereof and the Loan Parties shall not be entitled to any other or further amendment by virtue of the provisions of this Amendment No. 4 or with respect to the subject matter of this Amendment No. 4. To the extent of conflict between the terms of this Amendment No. 4 and the other Loan Documents, the terms of this Amendment No. 4 shall control. The Credit Agreement and this Amendment No. 4 shall be read and construed as one agreement. This Amendment No. 4, including Exhibit A hereto, is a Loan Document.

10. Jurisdiction. The provisions of Section 9.13 of the Credit Agreement shall apply with like effect to this Amendment No. 4.

11. Binding Effect. This Amendment No. 4 shall be binding upon and inure to the benefit of each of the parties hereto and their respective successors and assigns.

12. Waiver, Modification, Etc. No provision or term of this Amendment No. 4 may be modified, altered, waived, discharged or terminated orally or by course of conduct, but only by an instrument in writing executed by the party against whom such modification, alteration, waiver, discharge or termination is sought to be enforced.

13. Entire Agreement. This Amendment No. 4 represents the entire agreement and understanding concerning the subject matter hereof among the parties hereto, and supersedes all other prior agreements, understandings, negotiations and discussions, representations, warranties, commitments, proposals, offers and contracts concerning the subject matter hereof, whether oral or written.

 

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14. Headings. The headings listed herein are for convenience only and do not constitute matters to be construed in interpreting this Amendment No. 4.

15. Counterparts. This Amendment No. 4 may be executed in any number of counterparts, each of which shall be an original, but all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of this Amendment No. 4 by telefacsimile or other electronic method of transmission (e.g., “pdf” or “tif”) shall have the same force and effect as delivery of an original executed counterpart of this Amendment No. 4. Any party delivering an executed counterpart of this Amendment No. 4 by telefacsimile or other electronic method of transmission shall also deliver an original executed counterpart of this Amendment No. 1, but the failure to do so shall not affect the validity, enforceability, and binding effect of this Amendment No. 4.

16. Designation of Immaterial Subsidiaries. Borrower hereby designates each of (i) FPC Inc., (ii) Laser-Pacific Media Corporation and (iii) NEPC Inc. as Immaterial Subsidiaries in accordance with the Credit Agreement and certifies that each such Subsidiary satisfies, individually and in the aggregate for all Immaterial Subsidiaries, the requirements applicable to Immaterial Subsidiaries set forth in the definition thereof. In reliance upon the foregoing certification, Agent and the Required Lenders waive any requirement with respect to the delivery of a separate certificate with respect to the designation of such Subsidiaries as Immaterial Subsidiaries.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 4 to be duly executed and delivered by their authorized officers as of the day and year first above written.

 

EASTMAN KODAK COMPANY
By:   /s/ David E. Bullwinkle
Name:   David E. Bullwinkle
Title:   Chief Financial Officer and Senior Vice President
FAR EAST DEVELOPMENT LTD.
KODAK (NEAR EAST), INC.
KODAK AMERICAS, LTD.
KODAK PHILIPPINES, LTD.
EASTMAN KODAK INTERNATIONAL CAPITAL
COMPANY, INC.
By:   /s/ Roger W. Byrd
Name:   Roger W. Byrd
Title:   Secretary


Agent and Lenders

BANK OF AMERICA, N.A.,

as Agent and a Lender

By:   /s/ Matthew T. O’Keefe
Name:   Matthew T. O’Keefe
Title:   Senior Vice President

 

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JPMORGAN CHASE BANK, N.A.,

as a Lender

By:   /s/ Daglas Panchal
Name:   Daglas Panchal
Title:   Executive Director

 

9


SIEMENS FINANCIAL SERVICES, INC.,

as a Lender

By:   /s/ Jeffery B. Iervese
Name:   Jeffery B. Iervese
Title:   Vice President
By:   /s/ Sonia Vargas
Name:   Sonia Vargas
Title:   Senior Loan Closer

 

10


WEBSTER BUSINESS CREDIT CORPORATION, as a Lender
By:   /s/ Arthur Kim
Name:   Arthur Kim
Title:   Duly Authorized Signatory

 

11


CREDIT SUISSE AG,

as a Lender

By:   /s/ Vipul Dhadda
Name:   Vipul Dhadda
Title:   Authorized Signatory
By:   /s/ Brady Bingham
Name:   Brady Bingham
Title:   Authorized Signatory

 

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[Execution]

Exhibit A

to

Amendment No. 4 to Amended and Restated Credit Agreement

 

 

AMENDED AND RESTATED CREDIT AGREEMENT

Dated as of May 26, 2016

as amended through February 26, 2021

among

EASTMAN KODAK COMPANY

as Borrower

and

THE GUARANTORS NAMED HEREIN

as Guarantors

and

THE LENDERS NAMED HEREIN

as Lenders

and

BANK OF AMERICA, N.A.

as Administrative and Collateral Agent

and

BANK OF AMERICA, N.A.

and

JPMORGAN CHASE BANK, N.A.

as Joint Lead Arrangers and Joint Bookrunners

 

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TABLE OF CONTENTS

 

         Page  

ARTICLE I DEFINITIONS AND ACCOUNTING TERMS

     1  

SECTION 1.01.

  Certain Defined Terms      1  

SECTION 1.02.

  Computation of Time Periods      52  

SECTION 1.03.

  Accounting Terms      52  

SECTION 1.04.

  Reserves      53  

SECTION 1.05.

  Letter of Credit Amount      53  

SECTION 1.06.

  Currency Equivalents Generally      53  

SECTION 1.07.

  Pro Forma Calculations      53  

SECTION 1.08.

  Divisions      54  

ARTICLE II AMOUNTS AND TERMS OF THE REVOLVING LOANS AND LETTERS OF CREDIT

     54  

SECTION 2.01.

  The Revolving Loans and Letters of Credit      54  

SECTION 2.02.

  Making the Revolving Loans      56  

SECTION 2.03.

  Issuance of and Drawings and Reimbursement Under Letters of Credit      57  

SECTION 2.04.

  Fees      60  

SECTION 2.05.

  Termination or Reduction of the Commitments      61  

SECTION 2.06.

  Letter of Credit Drawings      61  

SECTION 2.07.

  Interest on Revolving Loans      62  

SECTION 2.08.

  Interest Rate Determination      63  

SECTION 2.09.

  Optional Conversion of Revolving Loans      64  

SECTION 2.10.

  Repayments of Revolving Loans; Prepayments of Revolving Loans      64  

SECTION 2.11.

  Increased Costs      65  

SECTION 2.12.

  Illegality      67  

SECTION 2.13.

  Payments and Computations      67  

SECTION 2.14.

  Taxes      68  

SECTION 2.15.

  Sharing of Payments, Etc      71  

SECTION 2.16.

  Evidence of Debt      72  

SECTION 2.17.

  Use of Proceeds      72  

SECTION 2.18.

  Cash Management      72  

SECTION 2.19.

  Defaulting Lenders      74  

SECTION 2.20.

  Replacement of Certain Lenders      77  

SECTION 2.21.

  Increase in the Aggregate Revolving Credit Commitments      78  

SECTION 2.22.

  Swingline Loans; Settlement      79  

SECTION 2.23.

  Failure to Satisfy Conditions Precedent      80  

SECTION 2.24.

  Obligations of Lenders Several      80  

SECTION 2.25.

  Closing Date Transactions      80  

SECTION 2.26.

  Inability to Determine Rates; Replacement of LIBOR      80  

 

i


ARTICLE III CONDITIONS TO EFFECTIVENESS AND LENDING

     83  

SECTION 3.01.

  Conditions Precedent to Effectiveness      83  

SECTION 3.02.

  Conditions Precedent to Each Borrowing and Issuance      85  

SECTION 3.03.

  Additional Conditions to Issuances      86  

SECTION 3.04.

  Determinations Under this Agreement      86  

ARTICLE IV REPRESENTATIONS AND WARRANTIES

     86  

SECTION 4.01.

  Representations and Warranties of the Company      86  

ARTICLE V COVENANTS OF THE LOAN PARTIES

     92  

SECTION 5.01.

  Affirmative Covenants      92  

SECTION 5.02.

  Negative Covenants      103  

SECTION 5.03.

  Financial Covenants      116  

ARTICLE VI EVENTS OF DEFAULT

     117  

SECTION 6.01.

  Events of Default      117  

SECTION 6.02.

  Actions in Respect of the Letters of Credit upon Default      119  

SECTION 6.03.

  [Reserved]      120  

SECTION 6.04.

  Application of Funds      120  

ARTICLE VII GUARANTY

     121  

SECTION 7.01.

  Guaranty; Limitation of Liability      121  

SECTION 7.02.

  Guaranty Absolute      122  

SECTION 7.03.

  Waivers and Acknowledgments      123  

SECTION 7.04.

  Subrogation      124  

SECTION 7.05.

  Guaranty Supplements      125  

SECTION 7.06.

  Subordination      125  

SECTION 7.07.

  Continuing Guaranty; Assignments      126  

SECTION 7.08.

  Qualified ECPs      126  

ARTICLE VIII THE AGENT

     126  

SECTION 8.01.

  Authorization and Action      126  

SECTION 8.02.

  Agent Individually      127  

SECTION 8.03.

  Duties of Agent; Exculpatory Provisions      128  

SECTION 8.04.

  Reliance by Agent      129  

SECTION 8.05.

  Indemnification      129  

SECTION 8.06.

  Delegation of Duties      130  

SECTION 8.07.

  Resignation of Agent      130  

SECTION 8.08.

  Non-Reliance on Agent and Other Lenders      131  

SECTION 8.09.

  No Other Duties, etc      132  

SECTION 8.10.

  Agent May File Proofs of Claim      132  

SECTION 8.11.

  Intercreditor Arrangements      133  

SECTION 8.12.

  [Reserved]      133  

SECTION 8.13.

  Bank Product Obligations      133  

SECTION 8.14.

  Parallel Debt and Dutch Security Rights      134  

SECTION 8.15.

  Certain Matters Relating to German Law      135  

SECTION 8.16.

  German Parallel Debt      136  

ARTICLE IX MISCELLANEOUS

     137  

SECTION 9.01.

  Amendments, Waivers      137  

 

ii


SECTION 9.02.

  Notices, Etc.      139  

SECTION 9.03.

  No Waiver; Remedies      140  

SECTION 9.04.

  Costs and Expenses      141  

SECTION 9.05.

  Payments Set Aside      143  

SECTION 9.06.

  Right of Set-off      143  

SECTION 9.07.

  Binding Effect      144  

SECTION 9.08.

  Assignments and Participations      144  

SECTION 9.09.

  Confidentiality      147  

SECTION 9.10.

  Execution in Counterparts      148  

SECTION 9.11.

  Survival of Representations and Warranties      148  

SECTION 9.12.

  Severability      148  

SECTION 9.13.

  Jurisdiction      149  

SECTION 9.14.

  No Liability of the Issuing Banks      150  

SECTION 9.15.

  PATRIOT Act Notice      150  

SECTION 9.16.

  Release of Collateral; Termination of Loan Documents      150  

SECTION 9.17.

  Judgment Currency      151  

SECTION 9.18.

  No Fiduciary Duty      152  

SECTION 9.19.

  Electronic Execution of Assignments and Certain Other Documents      152  

SECTION 9.20.

  Acknowledgement and Consent to Bail-In of Affected Financial Institutions      152  

SECTION 9.21.

  No Novation      153  

SECTION 9.22.

  Acknowledgement Regarding Any Supported QFCs      153  

 

iii


Schedules

 

Schedule I    -    Commitments
Schedule II    -    Subsidiary Guarantors and Restricted Subsidiaries
Schedule III    -    Deposit Accounts
Schedule 1.01(a)    -    Acceptable Foreign Currencies
Schedule 1.01(d)    -    Designated Guarantors
Schedule 1.01(m)    -    [Reserved]
Schedule 1.01(u)    -    Unrestricted Subsidiaries
Schedule 4.01(f)    -    Litigation
Schedule 4.01(i)    -    Intellectual Property
Schedule 4.01(q)    -    Collective Bargaining Agreements
Schedule 4.01(dd)    -    Labor Matters
Schedule 5.01(k)    -    Transactions with Affiliates
Schedule 5.01(m)    -    Foreign Security Interests
Schedule 5.01(r)    -    Post-Closing Obligations
Schedule 5.02(a)    -    Existing Liens
Schedule 5.02(d)    -    Existing Debt
Schedule 5.02(e)    -    Dispositions
Schedule 6.01(f)    -    Judgments and Orders
Schedule 9.02    -    Agent’s Office; Certain Address for Notices

 

iv


Exhibits

 

Exhibit A    -      Form of Note
Exhibit B-1    -      Form of Notice of Borrowing
Exhibit B-2    -      Form of Swingline Loan Notice
Exhibit C    -      Form of Assignment and Acceptance
Exhibit D    -      Form of Solvency Certificate
Exhibit E    -      Form of Guaranty Supplement
Exhibit F    -      Form of Borrowing Base Certificate
Exhibit G    -      Form of Bank Products Obligations Agreement
Exhibit H    -      Form of Compliance Certificate
Exhibit I    -      [Intentionally deleted]

 

v


AMENDED AND RESTATED CREDIT AGREEMENT

Dated as of May 26, 2016,

as amended through February 26, 2021

EASTMAN KODAK COMPANY, a New Jersey corporation (the “Borrower” or “Company”), the Guarantors (as hereinafter defined), the banks, financial institutions and other institutional lenders (the “Lenders”) and issuers of letters of credit from time to time party hereto, BANK OF AMERICA, N.A. and JPMORGAN CHASE BANK, N.A., as joint lead arrangers and joint bookrunners, BANK OF AMERICA, N.A., as administrative agent and collateral agent for the Lenders agree as follows:

WHEREAS, the Borrower entered into that certain Credit Agreement, dated as of September 3, 2013, among the Borrower, the Guarantors, the banks, financial institutions and other institutional lenders and issuers of letters of credit from time to time party thereto, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Bank PLC and J.P. Morgan Securities LLC, as joint lead arrangers and joint bookrunners, Barclays Bank PLC, as syndication agent, and Bank of America, N.A., as administrative agent and collateral agent for the Lenders (as amended, supplemented or otherwise modified prior to the Closing Date, the “Existing Credit Agreement”);

WHEREAS, this Agreement amends and restates the Existing Credit Agreement in its entirety and without novation and shall, upon execution by all parties to the Existing Credit Agreement (and the Non-Consenting Lenders solely for purposes of Section 2.25) and the satisfaction or waiver of the conditions set forth in Section 3.01, be binding on all parties hereto;

NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto hereby agree that on the Closing Date, the Existing Credit Agreement shall be amended and restated in its entirety as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

SECTION 1.01. Certain Defined Terms. As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

ABL Priority Collateral” has the meaning set forth in the Term Loan Intercreditor Agreement and after the termination of the Term Loan Intercreditor Agreement, shall mean all Collateral.

Acceptable Foreign Currency” means Pounds Sterling, Euros, the currencies listed on Schedule 1.01(a), any other currency used in the ordinary course of business of the Company and its Restricted Subsidiaries for cash management purposes outside the United States and any other currency as may be approved by the Agent from time to time in its sole discretion.

Account Debtor” means each Person obligated on an Account.

Acquisition” means a transaction or series of transactions resulting in (a) acquisition of a business, division or substantially all assets of a Person; (b) record or beneficial ownership of 50% or more of the equity interests of a Person; or (c) merger, consolidation or combination of the Borrower or a Restricted Subsidiary with another Person.


Account” has the meaning specified in the UCC.

ACH” means automated clearinghouse transfers.

Activities” has the meaning specified in Section 8.02(b).

Additional Guarantor” has the meaning specified in Section 7.05.

Adjustment Date” has the meaning specified in the definition of “Applicable Margin”.

Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Agent.

Affected Financial Institution” means (a) any EEA Financial Institution or (b) any UK Financial Institution.

Affected Lender” has the meaning specified in Section 2.20.

Affiliate” means, as to any Person, any other Person that, directly or indirectly, controls, is controlled by or is under common control with such Person or is a director or executive officer of such Person. For purposes of this definition, the term “control” (including the terms “controlling”, “controlled by” and “under common control with”) of a Person means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of Voting Stock, by contract or otherwise.

Agent” means, Bank of America, in its capacity as administrative and collateral agent under the Loan Documents, or any successor administrative agent appointed in accordance with Section 8.07.

Agent Parties” has the meaning specified in Section 9.02(d).

Agent’s Account” means the account of the Agent maintained by the Agent at its office as set forth on Schedule 9.02.

Agent’s Group” has the meaning specified in Section 8.02(b).

Agent Sweep Account” has the meaning specified in Section 2.18(b).

Agreement” means this Amended and Restated Credit Agreement, as amended, restated, supplemented or otherwise modified from time to time.

Amendment No. 1” means to Amendment No. 1 to Amended and Restated Credit Agreement, dated as of November 7, 2016, by and among Agent, Lenders, and Loan Parties, as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.

Amendment No. 1 Effective Date” means the “Amendment Effective Date” as defined in Amendment No. 1.

Amendment No. 2” means Amendment No. 2 to Amended and Restated Credit Agreement, dated as of May 24, 2019, by and among Agent, Lenders, and Loan Parties, as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.

 

2


Amendment No. 2 Effective Date” means the first date on which the conditions precedent set forth in Section 8 of Amendment No. 2 are satisfied as set forth in the notice from Agent to Borrower provided for in Section 8 of Amendment No. 2.

Amendment No. 3” means the Amendment No. 3 to Amended and Restated Credit Agreement by and among Agent, Lenders, and Loan Parties, as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.

Amendment No. 3 Effective Date” means the first date on which the conditions precedent set forth in Section 5 of Amendment No. 3 are satisfied as set forth in the notice from Agent to Borrower provided for in Section 8 of Amendment No. 3.

Amendment No. 4” means the Amendment No. 4 to Amended and Restated Credit Agreement by and among Agent, Lenders, and Loan Parties, as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.

Amendment No. 4 Effective Date” means the first date on which the conditions precedent set forth in Section 8 of Amendment No. 4 are satisfied as set forth in the notice from Agent to Borrower provided for in Section 8 of Amendment No. 4.

Anti-Corruption Laws” means all laws, rules and regulations applicable to the Borrower or any of its Subsidiaries from time to time concerning or relating to bribery or corruption.

Applicable Lending Office” means, with respect to each Lender, such Lender’s Domestic Lending Office in the case of a Base Rate Revolving Loan and such Lender’s Eurodollar Lending Office in the case of a Eurodollar Rate Revolving Loan.

Applicable Margin” means four percent (4.00%) per annum, in the case of Eurodollar Rate Revolving Loans, and three percent (3.00%) per annum, in the case of Base Rate Revolving Loans; provided, that, on and after the first Adjustment Date after the Amendment No. 4 Effective Date, the Applicable Margin will be the rate per annum as determined pursuant to the pricing grid below based upon the average daily Excess Availability for the most recently ended fiscal quarter immediately preceding such Adjustment Date:

 

Tier

  

Average Daily
Excess
Availability

   Applicable
Margin
for Base Rate
Revolving
Loans
  Applicable
Margin for
Eurodollar Rate
Revolving
Loans
I    Greater than 67% of the Revolving Credit Facility    2.50%   3.50%
II    Equal to or greater than 33% of the Revolving Credit Facility but less than or equal to 67% of the Revolving Credit Facility    2.75%   3.75%
III    Less than 33% of the Revolving Credit Facility    3.00%   4.00%

 

3


Any change in the Applicable Margin resulting from changes in average daily Excess Availability shall become effective on the first day of the calendar month following each fiscal quarter (the “Adjustment Date”); provided, that, the first Adjustment Date shall occur on the first day of the calendar month following the second full fiscal quarter after the Amendment No. 4 Effective Date. If the Agent is unable to calculate average daily Excess Availability for a fiscal quarter due to Borrower’s failure to deliver any Borrowing Base Certificate when required hereunder, then, at the option of the Agent or the Required Lenders, margins shall be determined as if Tier III (rather than the Tier applicable for the prior period) were applicable until the first day of the calendar month following the receipt of the applicable Borrowing Base Certificate.

In the event that at any time after the end of a fiscal quarter it is discovered that the average daily Excess Availability for such fiscal quarter used for the determination of the Applicable Margin was less than the actual amount of the average daily Excess Availability for such fiscal quarter used to calculate the Applicable Margin, the Applicable Margin for such prior fiscal quarter shall be adjusted to the applicable percentage based on such actual average daily Excess Availability for such fiscal quarter and any additional interest for the applicable period payable as a result of such recalculation shall be promptly paid to the Lenders.

Applicable Percentage” means, (a) three-eighths percent (0.375%) per annum when the aggregate amount of the Unused Revolving Credit Commitments is less than or equal to fifty percent (50%) of the Revolving Credit Facility or (b) one-half percent (0.50%) per annum when the aggregate amount of the Unused Revolving Credit Commitments is greater than fifty percent (50%) of the Revolving Credit Facility.

Approved Fund” means any Fund that is administered or managed by (i) a Lender, (ii) an Affiliate of a Lender or (iii) an entity or an Affiliate of an entity that administers or manages a Lender; provided, that, an Approved Fund shall not include any Disqualified Institution.

Arrangers” means Bank of America, N.A. and JPMorgan Chase Bank, N.A. in their respective capacities as joint lead arrangers and joint bookrunners.

Assignment and Acceptance” means an assignment and acceptance entered into by a Lender and an Eligible Assignee, and accepted by the Agent, in substantially the form of Exhibit C hereto.

Assuming Lender” has the meaning specified in Section 2.21(d).

 

4


Assumption Agreement” has the meaning specified in Section 2.21(d).

Auto-Extension Letter of Credit” has the meaning specified in Section 2.03(a).

Available Amount” of any Letter of Credit means, at any time, the maximum amount available to be drawn under such Letter of Credit at such time (assuming compliance at such time with all conditions to drawing). For purposes of computing the amounts available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.05. For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of any rule under the ISP or any article of the UCP, such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.

Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected Financial Institution.

Bail-In Legislation” means (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law, regulation, rule or requirement for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, Part 1 of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).

Bank of America” means Bank of America, N.A. and its successors.

Bank Product Agreements” means, those agreements entered into from time to time by any Loan Party or its Subsidiaries with a Bank Product Provider in connection with the obtaining of any of the Bank Products to the extent designated in a Bank Products Obligations Agreement.

Bank Products” means any of the following products, services or facilities extended to a Loan Party or Affiliate of a Loan Party by a Bank Product Provider: (a) Cash Management Services; (b) products under Hedging Agreements; (c) commercial credit card and merchant card services; and (d) other banking products or services.

Bank Product Obligations” means Debt, obligations and other liabilities with respect to Bank Products owing by a Loan Party or an Affiliate of a Loan Party to a Bank Product Provider; to the extent designated as such by the Company in writing to the Agent from time to time in accordance herewith, provided, that, Bank Product Obligations of a Loan Party shall not include its Excluded Swap Obligations.

Bank Products Obligations Agreement” means an agreement in substantially the form attached hereto as Exhibit G, in form and substance satisfactory to the Agent, duly executed by the applicable Bank Product Provider, the Company, and the Agent; provided, that, no Bank Products Obligations Agreement shall be required with respect to Bank Products provided by Bank of America, N.A. or any of its Affiliates.

Bank Product Provider” means (a) Bank of America or any of its Affiliates; and (b) any other Lender or Affiliate of a Lender to the extent of any Bank Products furnished by such Lender or Affiliate of a Lender on the Initial Closing Date or, if such Bank Products are established by a Lender or

 

5


Affiliate of a Lender after the Initial Closing Date, to the extent such Person was a Lender or an Affiliate of a Lender on the date such Bank Product is established; provided, that, in each case a Bank Product Obligations Agreement has been duly executed and delivered to the Agent within ten (10) days following the later of the Initial Closing Date or creation of the Bank Product, (i) describing the Bank Product and setting forth the maximum amount to be secured by the Collateral and the methodology to be used in calculating such amount, and (ii) agreeing to be bound by Section 8.13.

Bank Product Reserve” means the aggregate amount of reserves established by the Agent against the Borrowing Base from time to time in its Permitted Discretion in respect of Bank Product Obligations.

Bankruptcy Code” shall mean title 11 of the United States Code, as in effect from time to time.

Bankruptcy Court” shall mean the United States Bankruptcy Court for the Southern District of New York.

Bankruptcy Law” means any proceeding of the type referred to in Section 6.01(e) of this Agreement or the Bankruptcy Code or any similar foreign, federal, provincial or state law for the relief of debtors.

Base Rate” means for any day a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate plus one-half of one percent (1/2 of 1%), (b) the rate of interest in effect for such day as publicly announced from time to time by the Agent as its “prime rate” and (c) the Eurodollar Rate for a one (1)-month Interest Period on such day (or if such day is not a Business Day, the immediately preceding Business Day) plus one percent (1.00%). The “prime rate” and the “base rate” is a rate set by the Agent based upon various factors including the Agent’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such prime rate or base rate announced by the Agent shall take effect at the opening of business on the day specified in the announcement of such change.

Base Rate Revolving Loan” means a Revolving Loan that bears interest as provided in Section 2.07(a)(i).

Beneficial Ownership Certification” means a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation.

Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.

BHC Act Affiliate” of a Person means an “affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such Person.

Board of Governors” means the Board of Governors of the Federal Reserve System.

Bona Fide Debt Fund” means a debt fund or other investment vehicle engaged in the making, purchasing, holding or otherwise investing in commercial loans, bonds or similar extensions of credit in the ordinary course of business and whose managers have fiduciary duties to third party investors in such fund or investment vehicle.

Borrower” has the meaning in the introductory paragraph hereto.

 

6


Borrower Information” has the meaning specified in Section 9.09.

Borrowing” means a borrowing consisting of Revolving Loans of the same Type made on the same day by each of the Lenders pursuant to Section 2.01(a).

Borrowing Base” means, at any time, the amount equal to the Loan Value less applicable Reserves.

Borrowing Base Certificate” means a certificate in substantially the form of Exhibit F hereto (with such changes therein as may be required by the Agent in its Permitted Discretion to reflect the components of, and Reserves against, the Borrowing Base as provided for hereunder from time to time), executed and certified as accurate and complete by a Responsible Officer of the Company, which shall include detailed calculations as to the Borrowing Base as reasonably requested by the Agent.

Borrowing Base Deficiency” means, at any time, the failure of the Borrowing Base to equal or exceed Revolving Credit Facility Usage.

Business Day” means a day of the year on which banks are not required or authorized by law to close in the states of North Carolina and New York and, if the applicable Business Day relates to any Eurodollar Rate Revolving Loans, on which dealings are carried on in the London interbank market.

Capital Expenditures” means, without duplication, any expenditure of money for any purchase or other acquisition of any asset which, in conformity with GAAP, would be required to be classified as a capital expenditure on the Consolidated statement of cash flows of the Company and its Restricted Subsidiaries; provided, that, the term “Capital Expenditures” shall not include (a) any additions to property, plant and equipment and other expenditures made in connection with the replacement, substitution, restoration, repair or improvement of assets to the extent made with (i) the proceeds of equity issuances of, or capital contributions to the Company, provided those expenditures are made substantially contemporaneously with the equity issuances or capital contributions as the case may be, (ii) Debt borrowed (excluding borrowings under this Agreement, the Term Loan Agreement, the Supplemental Letter of Credit Facility Agreement and the Convertible Note Documents) by the Company or any Restricted Subsidiary in connection with such capital expenditures, (iii) the proceeds from any casualty insurance or condemnation or eminent domain paid on account of the loss of or damage to the assets being replaced, substituted, restored, repaired or improved, to the extent that the proceeds therefrom are utilized or committed to be utilized for capital expenditures within twelve (12) months of the receipt of such proceeds and (if so committed) are so utilized within twelve (12) months of the receipt of such proceeds, or (iv) the proceeds from any sale or other Disposition of the Company’s or any Restricted Subsidiary’s assets (other than assets constituting Collateral consisting of Accounts and the proceeds thereof), to the extent that the proceeds therefrom are utilized or committed to be utilized for capital expenditures within twelve (12) months of the receipt of such proceeds and (if so committed) are so utilized within twelve (12) months of the receipt of such proceeds, (b) the purchase price of equipment that is purchased substantially contemporaneously with the trade-in of existing equipment solely to the extent of the amount of such purchase price reduced by the credit granted by the seller of such equipment for the equipment being traded in at such time, (c) expenditures that constitute operating lease expenses in accordance with GAAP, (d) expenditures that constitute Permitted Acquisitions or other investments that consist of the purchase of a business unit, line of business or a division of a Person or all or substantially all of the assets of a Person, (e) any expenditures which are paid by a third party or which are contractually required to be, and are, reimbursed to the Loan Parties in cash by a third party (including landlords) during such period of calculation or (f) any non-cash capitalized interest expense reflected as additions to property, plant or equipment in the consolidated balance sheet of the Company and the Restricted Subsidiaries.

 

7


Capital Lease Obligations” means, with respect to any Person for any period, the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as a capital lease on a balance sheet of such Person under GAAP (as of the date hereof) and the amount of which obligations shall be the capitalized amount thereof determined in accordance with GAAP. For the avoidance of doubt, operating leases shall also be accounted for in accordance with GAAP in effect as of the date hereof.

Captive Insurance Subsidiary” means any Subsidiary that is subject to regulation as an insurance company.

Cases” means the cases under Chapter 11 of the Bankruptcy Code of Borrower and certain of the Guarantors, each as debtor-in-possession, which have been jointly administered as Chapter 11 Case No. 12-10201(ALG) and which are pending in the Bankruptcy Court.

Cash Collateralize” means, in respect of an Obligation, provide and pledge (as a first priority perfected security interest) cash collateral in Dollars in an amount equal to one hundred five percent (105%) of such Obligation, at a location and pursuant to documentation in form and substance reasonably satisfactory to the Agent (and “Cash Collateralization” has a corresponding meaning).

Cash Control Trigger Event” means either (a) the occurrence and continuance of an Event of Default or (b) the failure of the Borrower to maintain Excess Availability of at least the greater of (i) twelve and one-half percent (12.5%) of the Revolving Credit Facility and (ii) $11,250,000. For purposes of this Agreement, the occurrence of a Cash Control Trigger Event shall be deemed to be continuing (A) until such Event of Default has been cured or waived and/or (B) if the Cash Control Trigger Event arises under clause (b) above, until Excess Availability is equal to or greater than the applicable amount set forth above for sixty (60) consecutive days, at which time a Cash Control Trigger Event shall no longer be deemed to be occurring for purposes of this Agreement.

Cash Equivalents” means any of the following:

(a) Acceptable Foreign Currencies;

(b) securities issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality of the United States of America (provided that the full faith and credit of the United States of America is pledged in support of those securities) having maturities of not more than twenty-four (24) months from the date of acquisition;

(c) obligations issued or fully guaranteed by any state of the United States of America or any political subdivision of any such state or province or any instrumentality thereof maturing within one (1) year from the date of acquisition and having a rating of either “A” or better from S&P or A2 or better from Moody’s;

(d) certificates of deposit and eurodollar time deposits with maturities of one (1) year or less from the date of acquisition, banker’s acceptances with maturities not exceeding one (1) year and overnight bank deposits, in each case, with any Lender or with any United States commercial bank having capital and surplus in excess of $250,000,000;

(e) repurchase obligations with a term of not more than seven (7) days for underlying securities of the types described in clauses (b), (c), and (d) above entered into with any financial institution meeting the qualifications specified in clause (d) above;

 

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(f) commercial paper rated at least “P-2” by Moody’s or at least “A-2” by S&P, in each case, maturing within one (1) year after the date of acquisition;

(g) money market funds that either are (x) SEC.270.2a-7 compliant, (i) enhanced cash funds having a weighted average maturity of not greater than one hundred twenty (120) days or (ii) investing at least ninety-five percent (95%) of their assets in securities of the types described in clauses (a) through (f) above;

(h) offshore overnight interest bearing deposits in foreign branches of the Agent, any Lender or an Affiliate of a Lender; or

(i) instruments equivalent to those referred to in clauses (a) through (h) above of comparable tenor to those referred to above, denominated in any Acceptable Foreign Currency and used in the ordinary course of business of the Borrower and its Subsidiaries for cash management purposes in any jurisdiction outside the United States of America to the extent reasonably required or advisable in connection with any business conducted by the Borrower or any Subsidiary.

Cash Management Services” means services relating to operating, collections, payroll, trust, or other depository or disbursement accounts, including automated clearinghouse, e-payable, electronic funds transfer, wire transfer, controlled disbursement, overdraft, depository, information reporting, lockbox and stop payment services.

CFC” means an entity that is a “controlled foreign corporation” of the Company under Section 957 of the Code or an entity all or substantially all of the assets of which consist of equity interests in one or more CFCs, and any entity which would be a “controlled foreign corporation” except for any alternate classification under Treasury Regulation 301.7701-3, or any successor provisions to the foregoing.

Change of Control” means, at any time, (a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities and Exchange Act of 1934 (the “Exchange Act”), other than a Permitted Holder (or group consisting of Permitted Holders), is or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person or group shall be deemed to have “beneficial ownership” of all shares that any such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of Voting Stock of the Company representing more than 35% of the voting power of all Voting Stock of the Company, and (b) during any period of two (2) consecutive years (commencing immediately following the Closing Date), individuals who at the beginning of such period constituted the board of directors of the Company (together with any new directors whose election by such board of directors or whose nomination for election by the Company’s shareholders was approved by a vote of a majority of the Company’s directors then still in office who either were directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Company’s directors then in office (excluding any directors from the numerator and denominator of such calculation to the extent such director is or was designated by a Permitted Holder (or group consisting of Permitted Holders) or pursuant to a contractual agreement with the Company existing on the Closing Date).

Chapter 11 Plan” means the First Amended Joint Chapter 11 Plan of Reorganization of Eastman Kodak Company and its Debtor Affiliates, dated August 21, 2013, as amended, supplemented or otherwise modified from time to time in accordance with Section 3.01(f) of the Existing Credit Agreement, and together with all exhibits, schedules, annexes, supplements and other attachments thereto.

 

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Closing Date” means the first date on which all of the conditions precedent in Article III are satisfied or waived in accordance with Article III.

Closing Date Transactions” shall mean, collectively, (a) the execution, delivery and performance of, this Agreement and the other Loan Documents and (b) all other related transactions including the payment of fees and expenses in connection therewith.

Code” means the United States Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated thereunder.

Collateral” means all “Collateral” as defined in the Security Agreement and the other Collateral Documents.

Collateral Documents” means the Security Agreement, the Control Agreements, each of the other collateral documents, instruments and agreements delivered pursuant to Section 5.01(i) or (j), and each other security agreement or other instrument or document executed and delivered by any Loan Party to secure any of the Obligations or, with respect to Collateral Documents governed by the laws of the Netherlands, the Obligations of Borrower under the Parallel Debt.

Commitment” means a Letter of Credit Commitment and/or a Revolving Credit Commitment, as the context may require.

Commitment Increase” has the meaning specified in Section 2.21(a).

Commitment Letter” means that certain Commitment Letter, dated as of April 28, 2016 among Bank of America, N.A., as an Arranger, the Agent, and the Company (as amended, supplemented or otherwise modified from time to time).

Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.).

Company” has the meaning in the introductory paragraph hereto.

Competitor” means those Persons who are directly or indirectly engaged in the same or similar line of business as the Company or its Subsidiaries.

Compliance Certificate” means a certificate substantially in the form attached as Exhibit H or in such other form as reasonably agreed by the Agent and the Company, by which Company certifies compliance of the Borrower in accordance with Section 5.03.

Concentration Account” means each Deposit Account, other than an Excluded Account, maintained by a Loan Party in which funds of such Loan Party from one or more Deposit Accounts are concentrated.

Confirmation Order” means the Order Confirming the Chapter 11 Plan entered by the Bankruptcy Court in the Cases on August 23, 2013.

Consolidated” refers to the consolidation of accounts in accordance with GAAP.

 

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Consolidated EBITDA” means, at any date of determination, an amount equal to Consolidated Net Income for the most recently completed Measurement Period, plus the following to the extent reducing Consolidated Net Income (without duplication):

(a) (i) Consolidated Interest Charges,

(ii) provision for taxes based on income, profits or capital gains, including foreign, federal, state, franchise and similar taxes and foreign withholding taxes (including penalties and interest related to such taxes or arising from tax examinations) of such Person paid or accrued during such period,

(iii) accretion, depreciation and amortization expense (excluding amortization of a prepaid cash item that was paid and not expensed in a prior period, other than in respect of licenses provided to the Company or a Restricted Subsidiary in connection with the settlement of litigation),

(iv) any non-cash charges (other than (1) amortization of a prepaid cash item that was paid and not expensed in a prior period and (2) write down of current assets) including: (a) write-downs of property, plant and equipment and other assets, (b) impairment of intangible assets, (c) losses resulting from cumulative effect of changes in accounting principles, (d) net foreign currency reevaluation of intercompany indebtedness and remeasurement losses or gains related to the balance sheet of the Company and its Restricted Subsidiaries, (e) losses on sales of accounts receivable, (f) provisions for asset retirement obligations, (g) provisions for environmental restoration and remedial action, (h) net non-cash mark-to-market charges relating to hedging arrangements, (i) unrealized losses from Hedging Agreements and unrealized losses from foreign currency transactions and (j) commercial capital expenses not included in depreciation expenses for such period; provided, that, if such non-cash charges represent an accrual or reserve for potential cash items in any future period, the cash payment in respect thereof in such future period shall be subtracted from Consolidated EBITDA to such extent,

(v) fees, costs, charges, commissions, operating losses, write-downs and expenses (including (A) fees, costs and expenses related to legal, financial, restructuring and other advisors, auditors and accountants, (B) printer costs and expenses, (C) U.S. Securities and Exchange Commission and other filing fees and (D) underwriting, arrangement, syndication, issuance backstop and placement premiums, discounts, fees, costs and expenses) paid, reimbursed or incurred during such period in connection with the negotiation, execution and ongoing performance of the Loan Documents, the Term Loan Documents, the Supplemental Letter of Credit Facility Documents, the Series B Preferred Stock, the Series C Preferred Stock and the Convertible Note Documents (and any Permitted Refinancing of any of the foregoing), and, in each case, any transaction (including any financing, acquisition or disposition, whether or not consummated) or litigation related thereto or contemplated by any of the foregoing, in each case, regardless of whether initially incurred by the Company or paid by the Company to reimburse others for such fees, costs and expenses,

(vi) any extraordinary expenses, charges or losses,

(vii) any non-recurring or unusual expenses, charges or losses in an amount not to exceed for any four fiscal quarter period, the greater of (A) five percent (5%) of Consolidated EBITDA for such period (calculated after giving effect to any amounts added to Consolidated EBITDA pursuant to this clause (vii) and clauses (xi) and (xii) and Section 1.07) and (B) $10,000,000,

(viii) fees, costs and expenses (including fees, costs and expenses related to (A) legal, financial and other advisors, auditors and accountants, (B) printer costs and expenses, (C) SEC and other filing fees and (D) underwriting, arrangement, syndication, backstop and placement premiums, discounts, fees, charges and expenses) of the Company and its Restricted Subsidiaries, incurred as a result of Permitted Acquisitions, Investments, Dispositions, issuance of equity interests or issuance, waiver, refinancing or amendment of Debt, in each case to the extent permitted hereunder, whether or not consummated, other than any fees paid, or costs or expenses reimbursed to any Restricted Subsidiary of the Company other than from a Person that is the Company or any of its Restricted Subsidiaries,

 

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(ix) deferred or amortized financing fees (and any write-offs thereof) for such period,

(x) any cash expenses or losses funded during such period with payments from assets of the Kodak Retirement Income Plan as in effect on January 19, 2012,

(xi) business optimization expenses and restructuring charges and reserves for such period; provided, that, with respect to each such business optimization expense or restructuring charge or reserve pursuant to this subclause (xi), the Company shall have delivered to the Agent an officer’s certificate specifying and quantifying such expense, charge or reserve and stating that such expense, charge or reserve is a business optimization expense or restructuring charge or reserve,

(xii) the amount of cost savings and synergies projected by the Company in good faith to be realized as a result of specified actions taken or expected to be taken prior to or during such period (which cost savings or synergies shall be subject only to certification by a Responsible Officer of the Company and shall be calculated on a pro forma basis as though such cost savings or synergies had been realized on the first day of the relevant period), net of the amount of actual benefits realized during such period from such actions; provided, that, (A) such cost savings or synergies are reasonably identifiable and factually supportable, and (B) such actions have been taken or are to be taken within twelve (12) months after the date of determination to take such action; provided, further, that aggregate amounts added pursuant to this subclause for any period shall not in the aggregate exceed the greater of (1) $10,000,000 or (2) five percent (5%) of the Consolidated EBITDA (calculated without giving effect to this clause or to Section 1.07(c)),

(xiii) any expenses, charges or losses that are covered by indemnification or other reimbursement provisions or insurance in any agreement, to the extent such indemnification or insurance coverage has not been disclaimed or denied and is reasonably expected to be paid within one hundred eighty (180) days of any claim made therefor (provided, that, if such expenses are not reimbursed within such one hundred eighty (180) day period, for purposes of calculating Consolidated EBITDA for any fiscal period in which an addback pursuant to this clause (xiii) has been taken, Consolidated EBITDA shall be re-calculated going forward excluding the addback pursuant to this clause (xiii) for such period),

(xiv) any proceeds from business interruption, casualty or liability insurance received by such Person during such period, to the extent the associated losses arising out of the event that resulted in the payment of such business interruption insurance proceeds were included in computing Consolidated Net Income,

(xv) expenses, charges and accruals for and reserves in respect of any charges, costs or expenses related to Pension Agreements, minus,

(b) without duplication and to the extent included in Consolidated Net Income for such period, the sum of (i) interest income (except to the extent deducted in determining Consolidated Interest Charges), (ii) income, profits or capital gains tax credits, (iii) other non-cash gains increasing Consolidated Net Income for such period (excluding any such non-cash gain to the extent it represents a reversal of an accrual or reserve for potential cash loss that was deducted and not added back to Consolidated EBITDA in any prior period) (provided, that, any cash received with respect to any non-cash items of income (other than extraordinary gains) for any prior period shall be added to the computation of Consolidated EBITDA), (iv) (A) any unusual or non-recurring income or gains not to exceed amounts that can be added back to Consolidated EBITDA pursuant to subclause (a)(vii) or (B) extraordinary income or gains, in each case including, whether or not otherwise includable as a separate item in the statement of such Consolidated Net Income for such period, gains on the sale of assets outside of the ordinary course of business, (v) any other non-cash income arising from the cumulative effect of

 

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changes in accounting principles, (vi) provision for environmental restoration and remedial actions for continuing operations added back pursuant to clause (a)(iv) of this definition to the extent actually paid in cash, (vii) income and gains in respect of Pension Agreements and (viii) cash payments in respect of Pension Agreements, made in the period for which Consolidated EBITDA is being calculated.

Notwithstanding anything herein to the contrary, the add-backs permitted under clauses (vii), (xi) and (xii) above shall not exceed seven and one-half percent (7.5%) of Consolidated EBITDA.

Consolidated Interest Charges” means, for any Measurement Period, all interest, premium payments, debt discount, fees, charges and related expenses in connection with Debt for Borrowed Money (including capitalized interest) or in connection with the deferred purchase price of assets, in each case to the extent treated as interest in accordance with GAAP, including all commissions, discounts and other fees and charges owed with respect to Permitted Receivables Financings, letters of credit and bankers’ acceptance financing and net costs under Hedging Agreements, but excluding (a) any interest paid, directly or indirectly, to any Loan Party by the Company and its Restricted Subsidiaries, (b) any non-cash or deferred interest and financing costs (including any legal and accounting costs, fees on account of bridge, commitment and other financings, any non-cash accretion or accrual of discounted liabilities not constituting Debt, all as determined on a consolidated basis in accordance with GAAP) and (c) amortization or write-off of deferred financing fees, debt issuance costs, commissions, fees and expenses, including expenses resulting from the discounting of any outstanding Debt in connection with the application of purchase accounting and/or fresh start accounting in connection with any acquisition.

Consolidated Net Income” means, as of any date of determination, the net income of the Company and its Restricted Subsidiaries for the most recently completed Measurement Period, all as determined on a consolidated basis in accordance with GAAP; provided, however, that there shall be excluded:

(a) the net income (or loss) of any Person that is not a Restricted Subsidiary, except to the extent of the amount of dividends, distributions or other payments actually paid in cash (or to the extent converted into cash) to the Company or any of its wholly owned Restricted Subsidiaries during such period,

(b) the income (or loss) of any Person (other than a Subsidiary of the Company) in which the Company or any of its Subsidiaries has an ownership interest, except to the extent that any such income is actually received by the Company or any Restricted Subsidiary in the form of dividends or similar distributions,

(c) the income (or loss) of any Person during such Measurement Period and accrued prior to the date it becomes a Restricted Subsidiary of the Company or any of the Company’s Restricted Subsidiaries or is merged into or consolidated with the Company or any of its Restricted Subsidiaries or such Person’s assets are acquired by the Company or any of its Restricted Subsidiaries (but only the portion attributable to such Person or assets prior to the dates it became or is merged or consolidated with the Company or any Restricted Subsidiary or the assets were so acquired),

(d) any after-tax effect of gains or losses attributable to Dispositions or other dispositions or transfers of assets, in each case other than in the ordinary course of business and discontinued operations or disposal of discontinued operations, as determined in good faith by the Company,

 

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(e) effects of adjustments (including the effects of such adjustments pushed down to the Company and its Restricted Subsidiaries) in such Person’s consolidated financial statements (including to property, equipment, inventory and other assets) pursuant to GAAP resulting from the application of purchase accounting in relation to the Loan Documents and the transactions contemplated thereby or any consummated acquisition or the amortization or write-off of any amounts thereof (including the impact on net income (or loss) arising from mark-to-market adjustments with respect to earn-outs), net of taxes,

(f) (i) any non-cash compensation expense recorded from grants or periodic remeasurement of stock appreciation or similar rights, stock options, restricted stock or other rights and any cash charges associated with the rollover, acceleration, or payout of capital stock by management of the Company in connection with the Initial Closing Date Transactions, the Closing Date Transactions and (ii) any costs or expenses incurred pursuant to any management equity plan or stock option plan or other management or employee benefit plan or agreement or any stock subscription agreement, to the extent that such costs or expenses are funded with cash proceeds contributed to the common equity capital of the Company,

(g) any after-tax effect of income (or loss) from the early extinguishment of obligations under Hedging Agreements or other derivative instruments, or Debt,

(h) the undistributed earnings of any Subsidiary of the Borrower to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary is not at the time permitted by the terms of any Contractual Obligation or law applicable to such Subsidiary, and

(i) accruals and reserves and gains, losses or charges with respect to, or relating to, the KPP Settlement Agreement and the completion and implementation of the transactions contemplated thereby and in relation thereto.

Consolidated Subsidiary” means any Person whose accounts are consolidated with the accounts of the Company in accordance with GAAP.

Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

Convert”, “Conversion” and “Converted” each refers to a conversion of Revolving Loans of one Type into Revolving Loans of the other Type pursuant to Section 2.08 or 2.09.

Control Agreement” means a control agreement with (a) the financial institution, at which any Loan Party maintains a deposit account (other than an Excluded Account) pursuant to which such financial institution shall agree with such Loan Party and the Agent to comply with instructions originated by the Agent directing the disposition of funds in such deposit account without the further consent of such Loan Party, such agreement to be in form and substance reasonably satisfactory to the Agent, and (b) the applicable securities intermediary, at which any Loan Party maintains a securities account pursuant to which such securities intermediary shall agree with such Loan Party and the Agent to comply with the instructions of the Agent with respect to such securities and securities account without the further consent of such Loan Party.

Convertible Note Debt” means the Debt of the Company and its Subsidiaries under the Convertible Note Documents.

Convertible Note Documents” means the Convertible Notes and each other agreement, certificate, document, or instrument executed or delivered by the Company or its Subsidiaries with or in favor of the Convertible Noteholders, and any and all renewals, extensions, amendments, modifications, refinancings or restatements of any of the foregoing.

 

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Convertible Noteholder” means any holder of a Convertible Note.

Convertible Notes” means 5.0% convertible promissory notes, in an aggregate original principal amount of $25,000,000, issued by the Borrower.

Covered Entity” means any of the following:

(a) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);

(b) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or

(c) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).

Covered Party” has the meaning specified therefor in Section 9.22 of this Agreement.

Debt” of any Person means (excluding the current portion of accrued liabilities in the ordinary course of business), without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (d) all obligations of such Person in respect of the deferred purchase price of property or services (excluding (i) current accounts payable incurred in the ordinary course of business and accrued expenses and (ii) any earn-out obligations, except to the extent not paid after becoming due and payable or such obligations appear as a liability on the balance sheet of such Person in accordance with GAAP), (e) all Debt of others secured by (or for which the holder of such Debt has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Debt secured thereby has been assumed, but only to the extent of such Lien, and only to the extent of the lesser of the fair market value of the property secured by the Lien and the amount of Debt, (f) all guarantees by such Person of Debt set forth in subclauses (a)-(e) and (g)-(k), (g) all Capital Lease Obligations of such Person, (h) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty, (i) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances, (j) the obligations of such Person in respect of any Hedging Agreement and (k) all Disqualified Stock of such Person. The Debt of any Person shall include the Debt of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Debt provide that such Person is not liable therefor (but only for the portion so liable). For purposes of determining Debt, (x) the “principal amount” of the obligations of any Person in respect of any Hedging Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that such Person would be required to pay if such Hedging Agreement were terminated at such time and (y) in no event shall obligations under any Hedging Agreement be deemed “Debt” for calculating any financial ratio (or component thereof).