Document:

Exhibit 4.2

 

 

____________________________________________________________________________

 

 

 

THE VALSPAR CORPORATION

 

$300,000,000 7.250% Notes due 2019

 

THIRD SUPPLEMENTAL INDENTURE

 

Dated as of June 19, 2009

 

to

 

Indenture Dated as of April 24, 2002

 

U.S. BANK NATIONAL ASSOCIATION

 

Series Trustee

 

and

 

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A 

(as successor to Bank One Trust Company, N.A.)

 

Original Trustee

 

 

____________________________________________________________________________

 

THIRD SUPPLEMENTAL INDENTURE (this “Third Supplemental Indenture”), dated as of June 19, 2009, between THE VALSPAR CORPORATION, a Delaware corporation (the “Company”), U.S. Bank National Association, (the “Series Trustee”), and The Bank of New York Mellon Trust Company, N.A. (as successor to Bank One Trust Company, N.A.) (the “Original Trustee,” and together with the Series Trustee, the “Trustee”).

RECITALS

WHEREAS, the Company has heretofore executed and delivered to the Original Trustee an Indenture dated as of April 24, 2002 (the “Existing Indenture” and, together with the First Supplemental Indenture dated as of April 30, 2002, the Second Supplemental Indenture dated as of April 17, 2007 and this Third Supplemental Indenture, the “Indenture”) providing for the issuance by the Company from time to time of its debt securities to be issued in one or more series;

WHEREAS, the Company, in the exercise of the power and authority conferred upon and reserved to it under the provisions of the Existing Indenture and pursuant to appropriate resolutions of the Board of Directors, has duly determined to make, execute and deliver to the Series Trustee this Third Supplemental Indenture to the Existing Indenture in order to issue a new series of debt securities to be designated as the “7.250% Notes due 2019” (the “Notes”), and to set forth the terms that will be applicable thereto and the forms thereof;  

WHEREAS, the Company has duly determined to appoint U.S. Bank National Association as Series Trustee, Security Registrar and Paying Agent under the Indenture with respect to the Notes (but only with respect to the Notes) and U.S. Bank National Association is willing to accept such appointment with respect to the Notes;

WHEREAS, the Company is entering into this Third Supplemental Indenture with the Original Trustee and the Series Trustee to evidence and provide for the acceptance of appointment thereunder by the Series Trustee with respect to the Notes (but only with respect to the Notes), to add to or change any of the provisions of the Existing Indenture as shall be necessary to provide for or facilitate the administration of the trusts thereunder by more than one Trustee, to make certain amendments to the Existing Indenture pursuant to Section 901(2) of the Existing Indenture to expressly permit the appointment of the Series Trustee as Trustee for the Notes (but only with respect to the Notes), and to make certain other amendments to the Existing Indenture; 

WHEREAS, the Company has requested that the Original Trustee enter into this Third Supplemental Indenture in connection with (i) the foregoing amendments and (ii) the Company’s appointment of the Series Trustee with all of the rights, powers, trusts, duties and obligations of Trustee, Security Registrar and Paying Agent with respect to the Notes (but only with respect to the Notes);

WHEREAS, Sections 201, 301 and 901 of the Existing Indenture provide, among other things, that the Company and the Trustee may, without the consent of Holders, enter into indentures supplemental to the Existing Indenture to provide for specific terms applicable to any series of notes and to add to the covenants of the Company for the benefit of the Holders of each series of notes (and if such covenants are to be for the benefit of less than all series of notes, stating that such covenants are expressly being included solely for the benefit of such series); and

WHEREAS, all things necessary to make the Notes, when executed by the Company and authenticated and delivered by the Series Trustee or any Authenticating Agent and issued upon the terms and subject to the conditions set forth hereinafter and in the Indenture against payment therefor, the valid, binding and legal obligations of the Company and to make this Third Supplemental Indenture a valid, binding and legal agreement of the Company, have been done;

2

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the sufficiency and adequacy of which are hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE I

 

APPLICATION OF SUPPLEMENTAL INDENTURE 

AND CREATION OF NOTES 

Section 1.01 Application of this Third Supplemental
 Indenture.

Notwithstanding any other provision of this Third Supplemental Indenture, the provisions of this Third Supplemental Indenture, including the covenants and Events of Default set forth herein, are expressly and solely for the benefit of Notes.  The Notes constitute a series of notes as provided in Section 301 of the Existing Indenture.

Section 1.02 Effect of this Third Supplemental Indenture.

With respect to the Notes only, the Existing Indenture shall be supplemented pursuant to Sections 201, 301 and 901 thereof to establish the terms of the Notes as set forth in this Third Supplemental Indenture, including as follows: 

	
 
 	
(a)
 	
The definitions set forth in Article One of the Existing Indenture shall be modified to the extent provided in Article II of this Third Supplemental Indenture;
 

	
 
 	
(b)
 	
The forms and terms of the securities representing the Notes required to be established pursuant to Sections 201 and 301 of the Existing Indenture shall be established in accordance with Sections 1.03, 1.04, 1.05 and 1.06 of this Third Supplemental Indenture;
 

	
 
 	
(c)
 	
Section 501(1) of the Existing Indenture regarding a certain event of default is deleted as contemplated by Section 301(12) of the Existing Indenture and replaced in its entirety by Section 5.01 of this Third Supplemental Indenture.
 

	
 
 	
(d)
 	
The provisions of Article Ten of the Existing Indenture regarding certain covenants of the Company shall be supplemented and amended by the provisions of Article VI of this Supplemental Indenture.
 

	
 
 	
(e)
 	
Section  901 of the Existing Indenture regarding the entering into of supplemental indentures without the consent of Holders shall be amended by inserting therein a new Section 901(8) of the Existing Indenture (as set forth in Section 7.01 of this Supplemental Indenture).
 

	
 
 	
(f)
 	
Section  901(6) of the Existing Indenture regarding the appointment of a successor Trustee by entering into of supplemental indentures without the consent of Holders shall be amended and replaced in its entirety by Section 8.02 of this Supplemental Indenture. 
 

 

3

Section 1.03 Designation and Amount
of Notes.

The Notes shall be known and designated as the “7.250 Notes due 2019.” The initial maximum aggregate principal amount of the Notes that may be authenticated and delivered under this Third Supplemental Indenture shall not exceed $300,000,000 except for Notes authenticated and delivered upon registration or transfer of, or in exchange for, or in lieu of, Notes pursuant to Sections 202, 304, 305, 306 or 905 of the Existing Indenture (unless the issue of this series of Notes is “reopened” pursuant to Section 901(8) of the Existing Indenture (as set forth in Section 7.01 of this Third Supplemental Indenture)) by issuing additional Notes of such series (the “Additional Notes”), in an amount or amounts and registered in the names of such Persons as shall be set forth in any written order of the Company for the authentication and delivery of the Notes pursuant to
Section 303 of the Existing Indenture.

Section 1.04 Terms; Form of Security.

The Notes and the Additional Notes shall together constitute one series for purposes of the Existing Indenture and this Third Supplemental Indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase.  The Company shall issue any additional notes of a series by adopting a Board Resolution in the manner set forth in Section 301 of the Existing Indenture providing for the terms of such issuance.  Notwithstanding the foregoing, the Notes are issuable in fully registered form as Global Notes (unless otherwise permitted by Section 202 of the Existing Indenture) without coupons and shall be in substantially the form of Exhibit A hereto. The Notes are not issuable in bearer form. The terms and provisions contained in the form of Note shall constitute, and are hereby expressly made, a part of this Third Supplemental Indenture and the Company, by its
execution and delivery of this Third Supplemental Indenture, expressly agrees to such terms and provisions and to be bound thereto. Any of the Notes may have such letters, numbers or other marks of identification and such notations, legends and endorsements as the officers executing the same may approve (execution thereof to be conclusive evidence of such approval) and are not inconsistent with the provisions of the Indenture (and which do not affect the rights, duties or immunities of the Series Trustee), or as may be required to comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any securities exchange or automated quotation system on which the Notes may be listed. 

Section 1.05 Payment of Principal and Interest.

(a)       The Notes shall mature, and the principal of the Notes shall be due and payable in U.S. Dollars to the Holders thereof, together with all accrued and unpaid interest thereon, on June 15, 2009 (the Stated Maturity of principal of the Notes).

(b)       The Notes shall bear interest at 7.250% per annum, from and including June 19, 2009, or from the most recent Interest Payment Date (defined below) on which interest has been paid or provided for until the principal thereof becomes due and payable, and on any overdue principal and (to the extent that payment of such interest is enforceable under applicable law) on any overdue installment of interest at the same rate per annum.  Interest shall be calculated on the basis of a 360-day year comprised of twelve 30-day months.  Interest on the Notes shall be payable semi-annually in arrears in U.S. Dollars on June 15 and December 15 of each year, commencing on December 15, 2009 (each such date, an “Interest Payment
Date” for the purposes of the Notes under this Third Supplemental Indenture).  Payments of interest shall be made to the Person in whose name a Note (or predecessor Note) is registered (which shall initially be the Depositary) at the close of business on the June 1 or December 1, as the case may be, next preceding such Interest Payment Date (each such date, a “Regular Record Date” for the purposes of the Notes under this Third Supplemental Indenture).

4

(c)       For so long as the Notes are represented by one or more Global Notes, all payments of principal and interest shall be made by the Company by wire transfer of immediately available funds in U.S. Dollars to the Depositary or its nominee, as the case may be, as the registered owner of the Global Notes representing such Notes.  In the event that definitive Notes shall have been issued, all payments of principal and interest shall be made by the Company by wire transfer of immediately available funds in U.S. Dollars to the accounts of the registered Holders thereof; provided, that the Company may elect to make such payments at the office of the Paying Agent in The City of New York; and provided further, that the
Company may at its option pay interest by check to the registered address of each Holder of a definitive Note.

(d)       The Notes shall trade in the Depositary’s Same-Day Funds Settlement System until Stated Maturity (or until they are subject to acceleration pursuant to Article V of the Existing Indenture) and secondary market trading activity in the Notes may be required by the Depositary to settle in immediately available funds.

(e)       The Notes are subject to redemption by the Company in whole or in part in the manner described herein. 

Section 1.06 Ranking.

 

The Notes shall be general unsecured obligations of the Company.  The Notes shall rank pari passu in right of payment with all unsecured and unsubordinated indebtedness of the Company and senior in right of payment to all subordinated indebtedness of the Company.

Section 1.07 Sinking Fund.

The Notes are not subject to any sinking fund.

ARTICLE II

 

DEFINITIONS AND INCORPORATION BY REFERENCE

Section 2.01 Definitions.

(a)       All capitalized terms used herein and not otherwise defined below shall have the meanings ascribed thereto in the Existing Indenture.

(b)       The following are definitions used in this Third Supplemental Indenture and to the extent that a term is defined both herein and in the Existing Indenture, the definition in this Third Supplemental Indenture shall govern with respect to the Notes.

“Attributable Debt” for a lease means, as of the date of determination, the present value of net rent for the remaining term of the lease. Rent shall be discounted to present value at a discount rate that is compounded semi-annually. The discount rate shall be 10% per annum or, if the Company elects, the discount rate shall be equal to the weighted average Yield to Maturity of the Notes. Such average shall be weighted by the principal amount of the Notes then outstanding.  Rent is the lesser of (a) rent for the remaining term of the lease assuming it is not terminated, or (b) rent from the date of determination until the first possible termination date plus the termination payment then due, if any.  The remaining term of a lease includes any period for which the lease has been extended. Rent does not include (1) amounts due for maintenance, repairs,
utilities, insurance, taxes, assessments and similar charges, or (2) contingent rent, such as that based on sales. Rent may be reduced by the discounted present value of the rent that any sublessee must pay from the date of determination for all or part of the same property. If the net rent on a lease is not definitely determinable, the Company may estimate it in any reasonable manner.

 

5

“Below Investment Grade Rating Event” means the Notes are rated below Investment Grade by both Rating Agencies on any date from the date of the public notice of an arrangement that could result in a Change of Control until the end of the 60-day period following public notice of the occurrence of a Change of Control (which period shall be extended so long as the rating of the Notes is under publicly announced consideration for possible downgrade by either of the Rating Agencies); provided that a Below Investment Grade Rating Event otherwise arising by virtue of a particular reduction in rating shall not be deemed to have occurred in respect of a particular Change of Control (and thus shall not be deemed a Below Investment Grade Rating Event for purposes of the definition of Change of Control Repurchase Event) if the Rating Agencies
making the reduction in rating to which this definition would otherwise apply do not announce or publicly confirm or inform the Series Trustee in writing at the request of the Company that the reduction was the result, in whole or in part, of any event or circumstance comprised of or arising as a result of, or in respect of, the applicable Change of Control (whether or not the applicable Change of Control shall have occurred at the time of the Below Investment Grade Rating Event).

 “Change of Control” means the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any “person” (as that term is used in Section 13(d)(3) of the Exchange Act) becomes the beneficial owner, directly or indirectly, of more than 50% of the Voting Stock of the Company, measured by voting power rather than number of shares.  Notwithstanding the foregoing, a transaction will not be deemed to involve a Change of Control if (1) the Company becomes a wholly owned subsidiary of a holding company and (2) the holders of the Voting Stock of such holding company immediately following that transaction are substantially the same as the holders of the Company’s Voting Stock immediately prior to that transaction.

“Change of Control Repurchase Event” means the occurrence of both a Change of Control and a Below Investment Grade Rating Event.

“Comparable Treasury Issue” means the United States Treasury security selected by the Quotation Agent as having a maturity comparable to the remaining term of the Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such Notes.

“Comparable Treasury Price” means, with respect to any redemption date, (i) the average of four Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (ii) if the Series Trustee obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations, or (iii) if only one Reference Treasury Dealer Quotation is received, such quotation.

“Consolidated Total Assets” means total consolidated assets as reflected in the Company’s most recent consolidated balance sheet preceding the date of a determination under Section 6.01(i) of this Third Supplemental Indenture.

“Control,” as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise. For purposes of this definition, the terms “controlling,” “controlled by” and “under common control with” have correlative meanings.

 

6

“Debt” means any debt  for borrowed money or any guarantee of such debt.

“Government Securities” means direct obligations of the United States for the payment of which its full faith and credit is pledged, or obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States.

“Investment Grade” means a rating of Baa3 or better by Moody’s (or its equivalent under any successor rating categories of Moody’s); a rating of BBB- or better by S&P (or its equivalent under any successor rating categories of S&P); or the equivalent investment grade credit rating from any additional Rating Agency or Rating Agencies selected by the Company.

“Lien” means any mortgage, pledge, security interest or lien to secure or assure payment of Debt.

“Moody’s” means Moody’s Investors Service, Inc.

 “Long-Term Debt” means Debt that by its terms matures on a date more than 12 months after the date it was created or Debt that the obligor may extend or renew without the obligee’s consent to a date more than 12 months after the date the Debt was created.  

“Officer” means the Chief Executive Officer, the President, the Chief Financial Officer, any Executive or Senior Vice President or the Principal Accounting Officer (so long as such Principal Accounting Officer is at least a Vice President) of the Company.

“Principal Property” means (i) any manufacturing facility, whether now or hereafter owned, located in the United States (excluding territories and possessions other than Puerto Rico), except any such facility that in the opinion of the board of directors of the Company or any authorized committee of such board is not of material importance to the total business conducted by the Company and its consolidated Subsidiaries, and (ii) any shares of stock of a Restricted Subsidiary.

“Quotation Agent” means the Reference Treasury Dealer appointed by the Company.

“Reference Treasury Dealer” means (i) each of Banc of America Securities LLC, Goldman, Sachs & Co. and a Primary Treasury Dealer (as defined below) selected by Wachovia Capital Markets, LLC and its successors; provided, however, that if any of the foregoing shall cease to be a primary U.S. Government securities dealer in New York City (a “Primary Treasury Dealer”), the Company shall substitute therefor another Primary Treasury Dealer, and (ii) any other Primary Treasury Dealer selected by the Company.

 

“Rating Agency” means (1) each of Moody’s and S&P; and (2) if either of Moody’s or S&P ceases to rate the Notes or fails to make a rating of the Notes publicly available for reasons outside of the Company’s control, a “nationally recognized statistical rating organization” within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act, selected by the Company (as certified by a resolution of the Company’s Board of Directors) as a replacement agency for Moody’s or S&P, or both, as the case may be.

 

7

“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Series Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Series Trustee by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third business day preceding such redemption date.

“Restricted Subsidiary” means a Wholly-Owned Subsidiary that has substantially all of its assets located in the United States (excluding territories or possessions other than Puerto Rico) and owns a Principal Property.

“S&P” means Standard & Poor’s Ratings Services, a division of McGraw-Hill, Inc.

“Sale-Leaseback Transaction” means an arrangement pursuant to which the Company or a Restricted Subsidiary now owns or hereafter acquires a Principal Property, transfers it to a person, and leases it back from the person.

“Treasury Rate” means, with respect to any redemption date, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date.

“Voting Stock” of any specified “person” (as that term is used in Section 13(d)(3) of the Exchange Act) as of any date means the capital stock or other equity interest of such person that is at the time entitled to vote generally in the election of the board of directors or equivalent body of such person.

“Wholly-Owned Subsidiary” of any specified Person means a corporation all of whose Voting Stock is owned by the Company or a Wholly-Owned Subsidiary, the accounts of which are consolidated with those of the Company in its consolidated financial statements.

Section 2.02 Other Definitions.

 

	
Term
 	
Defined in Section
 
	
 
 	
 
 
	
“Additional Notes”
 	
1.03
 

 

Section 2.03 Incorporation by Reference of Trust Indenture Act.

The Indenture is subject to the mandatory provisions of the Trust Indenture Act, which are incorporated by reference in and made a part of the Indenture. The following Trust Indenture Act terms have the following meanings: 

“indenture securities” means the Notes.

“indenture security holder” means a Holder.

“indenture to be qualified” means this Third Supplemental Indenture. 

“indenture trustee” or “institutional trustee” means the Series Trustee. 

“obligor” on the indenture securities means the Company and any other obligor on the indenture securities.

 

8

All other Trust Indenture Act terms used in this Indenture that are defined by the Trust Indenture Act, defined by Trust Indenture Act reference to another statute or defined by Commission rule have the meanings assigned to them by such definitions.

ARTICLE III

 

REDEMPTION

Section 3.01 Optional Redemption.

 

The Notes are subject to redemption at any time or from time to time, in whole or in part, at the Company’s option at a Redemption Price equal to the greater of:

 

	
 
 	
(i)
 	
100% of the principal amount of the Notes to be redeemed, and
 

 

	
 
 	
(ii)
 	
as determined by the Quotation Agent, the sum of the present values of the remaining scheduled payments of principal and interest in respect of the Notes to be redeemed (not including any portion of those payments of interest accrued as of the date of redemption) discounted to the date of redemption on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 50 basis points 
 

 

plus accrued interest to the redemption date. The Company may provide in such notice that payment of such Redemption Price and performance of the Company’s obligations with respect to such redemption or purchase may be performed by another Person. Any such notice may, at the Company’s discretion, be subject to the satisfaction of one or more conditions precedent.

Section 3.02 Notices to Series Trustee.

If the Company elects to redeem the Notes pursuant to this Article, it shall notify the Series Trustee in writing of the redemption date and the principal amount of Notes to be redeemed.

The Company shall give each notice to the Series Trustee provided for in this Section at least 35 days but not more than 60 days before the redemption date unless the Series Trustee consents to a shorter period.  Such notice shall be accompanied by an Officers’ Certificate and an Opinion of Counsel from the Company to the effect that such redemption will comply with the conditions herein.  If fewer than all the Notes are to be redeemed, the record date relating to such redemption shall be selected by the Company and given to the Series Trustee, which record date shall be not fewer than 15 days after the date of notice to the Series Trustee.  Any such notice may be canceled at any time prior to notice of such redemption being mailed to any Holder and shall thereby be void and of no effect.

Section 3.03 Selection of Notes To Be Redeemed.

If fewer than all the Notes of a series are to be redeemed, the Series Trustee shall select the Notes of such series to be redeemed pro rata or by lot or by a method that complies with applicable legal and securities exchange requirements, if any, and that the Series Trustee in its sole discretion shall deem to be fair and appropriate and in accordance with methods generally used at the time of selection by fiduciaries in similar circumstances.  The Series Trustee shall make the selection from outstanding Notes of such series not previously called for redemption.  The Series Trustee may select for redemption portions of the principal of the Notes of a series that have denominations larger than $2,000.  The Notes and portions of them the Series Trustee selects shall be in amounts of $2,000 or a whole multiple of $1,000.  Provisions of this Third Supplemental Indenture that apply to the Notes
called for redemption also apply to portions of the Notes called for redemption.  The Series Trustee shall notify the Company promptly of the Notes or portions of the Notes to be redeemed.

9

Section 3.04 Notice of Redemption.

At least 30 days but not more than 60 days before a date for redemption of Securities, the Company shall mail a notice of redemption by first-class mail to each Holder of Securities to be redeemed at such Holder’s registered address.

The notice shall identify the Notes to be redeemed and shall state:

 

	
 
 	
(a)
 	
the redemption date;
 

(b)       the redemption price and the amount of accrued interest to the redemption date;

	
 
 	
(c)
 	
the name and address of the Paying Agent;
 

(d)       that the Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price;

(e)       if fewer than all the outstanding the Notes are to be redeemed, the certificate numbers and principal amounts of the particular the Notes to be redeemed;

(f)        that, unless the Company defaults in making such redemption payment or the Paying Agent is prohibited from making such payment pursuant to the terms of this Indenture, interest on the Notes (or portion thereof) called for redemption ceases to accrue on and after the Redemption Date;

	
 
 	
(g)
 	
the CUSIP number, if any, printed on the Notes being redeemed; and
 

(h)       that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Notes.

At the Company’s request, the Series Trustee shall give the notice of redemption in the Company’s name and at the Company’s expense.  In such event, the Company shall provide the Series Trustee with the information required by this Section.

 

Section 3.05 Effect of Notice of Redemption.

Once notice of redemption is mailed, the Notes called for redemption become due and payable on the Redemption Date and at the redemption price stated in the notice.  Upon surrender to the Paying Agent, such Notes shall be paid at the redemption price stated in the notice, plus accrued interest, if any, to the redemption date; provided, however,  that if the redemption date is after a Regular Record Date and on or prior to the Interest Payment Date, the accrued interest shall be payable to the holder of the redeemed the Notes registered on the relevant Regular Record Date.  Failure to give notice or any defect in the notice to any Holder shall not affect the validity of the notice to any other Holder.

10

Section 3.06 Deposit of Redemption Price.

Prior to 11:00 a.m. New York City time on the redemption date, the Company shall deposit with the Paying Agent (or, if the Company or a Subsidiary is the Paying Agent, shall segregate and hold in trust) money sufficient to pay the redemption price of and accrued interest on all Notes to be redeemed on that date other than the Notes or portions of the Notes called for redemption that have been delivered by the Company to the Series Trustee for cancellation.

Section 3.07 Notes Redeemed in Part.

Upon surrender of a Note that is redeemed in part, the Company shall execute and the Series Trustee shall authenticate for the Holder (at the Company’s expense) a new Note of such series equal in principal amount to the unredeemed portion of the Notes surrendered.

ARTICLE IV

CHANGE OF CONTROL

Section 4.01 Change of Control.

(a)       Upon the occurrence of a Change of Control Repurchase Event, unless all Notes have been called for redemption pursuant to Section 3.01 hereof, each Holder of Notes shall have the right to require the Company to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of such Holder’s Notes at an offer price in cash equal to 101% of the aggregate principal amount of Notes repurchased plus any accrued and unpaid interest on the notes repurchased to the date of purchase (the “Change of Control Payment”).

(b)       Within 30 days following any Change of Control Repurchase Event or, at the Company’s option, prior to any proposed Change of Control, but after the public announcement of the proposed Change of Control, the Company shall mail, or cause to be mailed, a notice (a “Change in Control Offer”) to each Holder, with a copy to the Series Trustee, describing the transaction or transactions that constitute or may constitute the Change of Control Repurchase Event and specifying:

(i)        that the Change of Control Offer is being made pursuant to this Section 4.01 and that all Notes tendered will be accepted for payment;

(ii)       the Change of Control Payment and the purchase date, which shall be a Business Day no earlier than 30 days and no later than 60 days from the date such notice is mailed (the “Change of Control Payment Date”); 

(iii)      the CUSIP numbers for
 the Notes;

(iv)      that any Note not tendered will continue to accrue interest;

 (v)       that, unless the Company defaults in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer will cease to accrue interest after the Change of Control Payment Date; 

11

(vi)      that Holders electing to have any Notes purchased pursuant to a Change of Control Offer will be required to surrender such Notes to the Paying Agent at the address specified in the notice prior to the close of business on the third Business Day preceding the Change of Control Payment Date;

(vii)     that Holders will be entitled to withdraw their election referred to in clause (vi) if the Paying Agent receives, not later than the close of business on the second Business Day preceding the Change of Control Payment Date, a facsimile transmission or letter setting forth the name of the Holder, the principal amount of Notes delivered for purchase, and a statement that such Holder is withdrawing his election to have the Notes purchased; 

(viii)     that Holders whose Notes of any series are being purchased only in part will be issued new Notes of such series equal in principal amount to the unpurchased portion of the Notes surrendered, which unpurchased portion will be equal to $2,000 in principal amount or an integral multiple of $1,000 in excess thereof; and

(ix)       if the notice is mailed prior to the date of consummation of the Change of Control, that the Change of Control Offer is conditioned on the Change of Control Repurchase Event occurring on or prior to the payment date specified in the notice. 

(c)       The Company shall cause the Change of Control Offer to remain open for at least 20 Business Days or such longer period as is required by applicable law. The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the Notes as a result of a Change in Control Repurchase Event. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 4.01, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under this Section 4.01 by virtue of such conflict. 

(d)       On the Change of Control Payment Date, the Company will, to the extent lawful:

 (i)        accept for payment all Notes or portions thereof properly tendered pursuant to the Change of Control Offer;

(ii)       deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Notes or portions of Notes properly tendered; and 

(iii)      deliver or cause to be delivered to the Series Trustee the Notes so accepted together with an Officers’ Certificate stating the aggregate principal amount of Notes or portions of Notes being purchased by the Company.

(e)       The Paying Agent will promptly mail to each Holder of Notes properly tendered the Change of Control Payment for such Notes, and the Series Trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new Note of the same series equal in principal amount to any unpurchased portion of the Notes surrendered, if any; provided that each new Note will be in a principal amount of $2,000 or an integral multiple of $1,000 in excess thereof. The Company will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.

12

(f)        The Company shall not be required to make a Change of Control Offer upon a Change of Control Triggering Event if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Section 4.01 applicable to a Change of Control Offer made by the Company and purchases all Notes properly tendered and not withdrawn under such Change of Control Offer.

ARTICLE V

 

REMEDIES

Section 5.01 Events of Default.

(a)       For purposes of the Notes, the following events of default shall replace the events of default in Section 501(1), (6) and (7) of the Existing Indenture in its entirety and shall be in addition to the other events of default in Section 501 of the Existing Indenture, which shall in all respects be applicable in respect of the Notes.

(b)       For purposes of the Notes, Section 501(1) of the Existing Indenture is replaced in its entirety by inserting therein a new Section 501(1) to read as follows:

          “(1)     default in the payment of any interest on any Note of such series when such interest becomes due and payable, and continuance of such default for a period of 30 days;”.

(c)       For purposes of the Notes, Section 501(6) of the Existing Indenture is replaced in its entirety by inserting the word “Restricted” before each reference to “Subsidiary” therein, such that Section 501(6) shall read as follows:

 

          “(6)     the entry by a court or agency or supervisory authority having competent jurisdiction of:

          (a)       a decree or order for relief in respect of the Company or any Restricted Subsidiary in an involuntary proceeding under any applicable bankruptcy, insolvency, reorganization or other similar law and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or

          (b)       a decree or order adjudging the Company or any Restricted Subsidiary to be insolvent, or approving a petition seeking reorganization, arrangement, adjustment or composition of the Company or any Restricted Subsidiary and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or

          (c)       a decree or order appointing any Person to act as a custodian, receiver, liquidator, assignee, trustee or other similar official of the Company or any Restricted Subsidiary or of any substantial part of the property of the Company or any Restricted Subsidiary, as the case may be, or ordering the winding up or liquidation of the affairs of the Company or any Restricted Subsidiary and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or”.

(d)       For purposes of the Notes, Section 501(7) of the Existing Indenture is replaced in its entirety by inserting the word “Restricted” before each reference to “Subsidiary” therein, such that Section 501(7) shall read as follows:

13

“(7)     the commencement by the Company or any Restricted Subsidiary of a voluntary proceeding under any applicable bankruptcy, insolvency, reorganization or other similar law or of a voluntary proceeding seeking to be adjudicated insolvent or the consent by the Company or any Restricted Subsidiary to the entry of a decree or order for relief in an involuntary proceeding under any applicable bankruptcy, insolvency, reorganization or other similar law or to the commencement of any insolvency proceeding against it, or the filing by the Company or any Restricted Subsidiary of a petition or answer or consent seeking reorganization or relief under any applicable law, or the consent by the Company or any Restricted Subsidiary to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee,
trustee or similar official of the Company or any Restricted Subsidiary or any substantial part of the property of the Company or any Restricted Subsidiary or the making by the Company or any Restricted Subsidiary of an assignment for the benefit of creditors, or the taking of corporate action by the Company or any Restricted Subsidiary in furtherance of any such action; or”.

ARTICLE VI

 

COVENANTS

The covenants set forth in this Article VI shall be applicable to the Company in addition to the covenants in Article Ten of the Existing Indenture, which shall in all respects be applicable in respect of the Notes.

Section 6.01 Limitation on Liens.

The Company shall not, and shall not permit any Restricted Subsidiary to, create, incur, assume or otherwise cause or suffer to exist or become effective any Lien of any kind on a Principal Property securing Debt unless one or more of the following exceptions apply:

(a)       the Lien equally and ratably secures the Notes and the Debt or any other obligation of the Company or a Subsidiary; provided that any obligation secured by a Lien is not subordinated to the Notes;

(b)       the Lien secures Debt incurred to finance all or part of the purchase price or the cost of construction or improvement of property of the Company or a Restricted Subsidiary; provided that (i) such Lien shall not extend to any other Principal Property owned by the Company or a Restricted Subsidiary at the time the Lien is incurred, except for unimproved real property used for such construction or improvement, and (ii) such Debt shall not be incurred more than 18 months after the later of the acquisition, completion of construction or improvement, or commencement of full operation of the property subject to the Lien;

(c)       the Lien is on property of an entity at the time the entity merges into or consolidates with the Company or a Restricted Subsidiary;

(d)       the Lien is on property at the time such property is acquired by the Company or a Restricted Subsidiary;

(e)       the Lien is on property of a Person at the time such Person becomes a Restricted Subsidiary;

14

(f)        the Lien secures Debt of a Restricted Subsidiary owing to the Company or another Restricted Subsidiary;

(g)       the Lien is in favor of a government or governmental entity and secures (i) payments pursuant to a contract or statute, or (ii) Debt incurred to finance all or part of the purchase price or cost of construction or improvement of the property subject to the Lien;

(h)       the Lien extends, renews or replaces in whole or in part a Lien (“existing Lien”) permitted by any of clauses (a) through (g) or extends to property that at the time is not a Principal Property; provided that (i) such Lien does not extend beyond the property subject to the existing Lien and improvements and construction on such property, and (ii) the amount of the Debt secured by such Lien does not exceed the amount of the Debt secured at the time by the existing Lien unless the existing Lien or a predecessor Lien was incurred under clause (a) or (f); or

(i)        the Debt plus all other Debt secured by Liens on Principal Property at the time does not exceed 10% of Consolidated Total Assets, excluding (i) Debt secured by a Lien permitted by any of clauses (a) through (h) of this Section and (ii) Debt secured by a Lien incurred prior to the date of the Existing Indenture that would have been permitted by any of those clauses if the Existing Indenture had been in effect at the time the Lien was incurred, and including Attributable Debt for any lease permitted by Section 6.02(d) of this Third Supplemental Indenture not otherwise permitted by any of clauses (a) through (h) of this Section.

Section 6.02 Limitation on Sale and Leaseback Transactions.

The Company shall not, and shall not permit any Restricted Subsidiary to, enter into a Sale-Leaseback Transaction for a Principal Property, unless one or more of the following exceptions apply:

(a)       the lease has a term of three years or less;

(b)       the lease is between the Company and a Restricted Subsidiary or between Restricted Subsidiaries;

(c)       the Company or a Restricted Subsidiary under Sections 6.01(b) through (h) of this Third Supplemental Indenture may create a Lien on the property to secure Debt in an amount at least equal to the Attributable Debt for the lease;

(d)       the Company or a Restricted Subsidiary under Section 6.01(i) of this Third Supplemental Indenture could create a Lien on the Principal Property to secure Debt in an amount at least equal to the Attributable Debt for the lease; or

(e)       the Company or a Restricted Subsidiary, within 180 days of the effective date of the lease, retires Long-Term Debt of the Company or a Restricted Subsidiary in an amount at least equal to the Attributable Debt for the lease, excluding Debt of the Company that is subordinated to the Notes and Debt, if paid in cash, that is owned by the Company or a Restricted Subsidiary.

 

15

ARTICLE VII

 

SERIES TRUSTEE, SECURITY REGISTRAR AND PAYING AGENT WITH RESPECT TO THE NOTES

Section 7.01 Appointment by the Company of U.S. Bank National Association as Series Trustee etc.

 

Pursuant to the Existing Indenture as amended by this Third Supplemental Indenture, the Company hereby appoints U.S. Bank National Association as Series Trustee, Security Registrar and Paying Agent under the Indenture with respect to the Notes (but only with respect to the Notes) with all of the rights, powers, trusts, duties and obligations of Trustee, Security Registrar and Paying Agent under the Indenture with respect to the Notes (but only with respect to the Notes) with like effect as if originally named as such in the Indenture.

Section 7.02 Acceptance by U.S. Bank National Association of Appointment as Series Trustee etc.

 

U.S. Bank National Association hereby accepts its appointment as Series Trustee, Security Registrar and Paying Agent under the Indenture with respect to the Notes (but only with respect to the Notes) and accepts all of the rights, powers, trusts, duties and obligations of Trustee, Security Registrar and Paying Agent under the Indenture with respect to the Notes (but only with respect to the Notes), upon the terms and conditions set forth herein and therein, with like effect as if originally named as such in the Indenture. Pursuant to the Existing Indenture, there shall continue to be vested in the Original Trustee all of its rights, powers, trusts, duties and obligations as Trustee under the Existing Indenture with respect to all of the series of securities as to which it has served and continues to serve as Trustee, and the Original Trustee shall have no rights, powers, trusts, duties and
obligations with respect to the Notes.

Section 7.03 Eligibility of Series Trustee.

 

The Series Trustee hereby represents that it is qualified and eligible under the provisions of the Trust Indenture Act and Section 610 of the Existing Indenture to accept its appointment as Series Trustee with respect to the Notes.

Section 7.04 Concerning the Series Trustee.

 

Neither the Original Trustee nor the Series Trustee assumes any duties, responsibilities or liabilities by reason of this Third Supplemental Indenture other than as set forth in the Existing Indenture and, in carrying out its responsibilities hereunder, each shall have all of the rights, powers, privileges, protections, duties and immunities which it possesses under the Existing Indenture.  The Original Trustee and the Series Trustee shall not constitute co-trustees of the same trust, and each of the Original Trustee and the Series Trustee shall be trustee of a trust or trusts under the Indenture separate and apart from any trust or trusts under the Indenture administered by the other trustee.  The Original Trustee shall have no liability for any acts or omissions of the Series Trustee and the Series Trustee shall have no liability for any acts or omissions of the Original Trustee.

16

References in this Third Supplemental Indenture to sections of the Existing Indenture that require or permit actions by the Original Trustee with respect to the Notes shall be deemed to require or permit actions only by the Series Trustee and the Original Trustee shall have no responsibility therefor.

ARTICLE VIII

 

MISCELLANEOUS

Section 8.01 Issuance of Additional Notes.

For purposes of the Notes, Section 901 of the Existing Indenture is hereby amended by inserting therein a new Section 901(8) to read as follows:

          “(8) to issue additional Notes of any series in the future pursuant to Section 303 of this Indenture; provided that such additional Notes have the same terms as, and be deemed part of the same series as, the applicable series of Notes issued hereunder.”

Section 8.02 Amendment to Section 901(6).

For purposes of the Notes, Section 901(6) of the Existing Indenture is hereby amended to read as follows:

 

“(6)     to evidence and provide acceptance of the appointment of a successor Trustee hereunder or if other than the Person named as the “Trustee” in the first paragraph of this Indenture (or a successor to such Person pursuant to the applicable provisions of this Indenture) (for purposes of this Section 901(6), herein called the “Original Trustee”), the identity of a Trustee for such Notes, and, at the election of the Company, other Notes of any series to be issued thereafter pursuant to this Indenture (a “Series Trustee”), and if not the Series Trustee, the identity of each Security Registrar, Paying Agent or Authenticating Agent  with respect to such Notes, and such additions or changes to any provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than
one Trustee, it being understood that, anything contained herein or in any Board Resolution, Officer’s Certificate or supplemental indenture to the contrary notwithstanding, that (i) nothing herein shall constitute such Trustees co-trustees of the same trust, (ii) each such Trustee shall be a trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee, (iii) the Series Trustee shall have all the rights, powers, trusts, duties and obligations of the Original Trustee with respect to, and only with respect to, such Notes, (iv) the Original Trustee shall have no rights, powers, trusts, duties or obligations with respect to such Notes, (v) no Trustee hereunder shall have any liability for any acts or omissions of any other Trustee hereunder and (vi) no appointment of a Series Trustee shall become effective until the acceptance of the appointment by the Series Trustee in writing; or”

Section 8.03 Trust Indenture Act Controls.

If any provision of this Third Supplemental Indenture limits, qualifies or conflicts with another provision that is required or deemed to be included in this Third Supplemental Indenture by the Trust Indenture Act, the required or deemed provision shall control.

17

Section 8.04 Notices.

Any notice or communication shall be in writing and delivered in person or mailed by first-class mail or sent by facsimile (with a hard copy delivered in person or by mail promptly thereafter) and addressed as follows:

 

if to the Company:

 

The Valspar Corporation

1101 Third Street South

Minneapolis, Minnesota  55415

Attention:  Rolf Engh

Facsimile:  (612) 375-7313

 

with a copy to:

 

Lindquist & Vennum PLLP

4200 IDS Center

Minneapolis, Minnesota  55402

Attention:  Richard D. McNeil

Facsimile: (612) 371-3207

 

if to the Series Trustee:

 

U.S. Bank National Association

60 Livingston Avenue

EP-MN-WS3C

St. Paul, MN 55107-2292

Attn: Corporate Trust Administration

Fax (651) 495-8097

The Company or the Series Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications. 

Section 8.05 When Notes Disregarded.

In determining whether the Holders of the required principal amount of Notes of any series have concurred in any direction, waiver or consent, Notes of such series owned by the Company or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company shall be disregarded and deemed not to be Outstanding, except that, for the purpose of determining whether the Series Trustee shall be protected in relying on any such direction, waiver or consent, only Notes that a Responsible Officer of the Series Trustee actually knows are so owned shall be so disregarded. Also, subject to the foregoing, only Notes Outstanding at the time shall be considered in any such determination.

Section 8.06 Rules by Series Trustee, Paying Agent and Security Registrar.

The Series Trustee may make reasonable rules for action by or a meeting of Holders. The Security Registrar and the Paying Agent or co-registrar may make reasonable rules for their functions.

18

Section 8.07 Payment on Business Days.

If a payment date is not a Business Day, payment shall be made on the next succeeding day that is a Business Day, and no interest shall accrue for the intervening period. If a Regular Record Date is not a Business Day, the Regular Record Date shall not be affected. 

Section 8.08 Governing Law.

THIS THIRD SUPPLEMENTAL INDENTURE AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.  

Section 8.09 No Personal Liability of Directors, etc.

None of the Company’s directors, officers, employees, incorporators or stockholders, as such, shall have any liability for any of the Company’s obligations under the Notes, the Indenture, or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

Section 8.10 Successors.

All agreements of the Company in the Indenture and the Notes shall bind its successors. All agreements of the Series Trustee in the Indenture shall bind its successors.

Section 8.11 Multiple Originals.

The parties may sign any number of copies of this Third Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. One signed copy is enough to prove this Third Supplemental Indenture.

Section 8.12 Table of Contents; Headings.

The table of contents and headings of the Articles and Sections of this Third Supplemental Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof.

Section 8.13 Trustees Not Responsible for Recitals.

 

The recitals contained herein shall be taken as statements of the Company, and the Original Trustee and the Series Trustee do not assume any responsibility for their correctness.  The Original Trustee and the Series Trustee make no representations as to the validity or sufficiency of this Third Supplemental Indenture, except that the Original Trustee and the Series Trustee each represents that it is duly authorized to execute and deliver this Third Supplemental Indenture and perform its obligations hereunder.

	
Section 8.14 Adoption, Ratification and Confirmation.   
 

The Existing Indenture, as supplemented and amended by this Third Supplemental Indenture, is in all respects hereby adopted, ratified and confirmed.

 

19

IN WITNESS WHEREOF, the parties have caused this Third Supplemental Indenture to be duly executed as of the date first written above.

 

 

	
 
 	
THE VALSPAR CORPORATION
 
	
 
 	
 
 	
 
 
	
 
 	
 
 	
 
 
	
 
 	
By:
 	
/s/ Rolf Engh
 
	
 
 	
 
 	
Name:  Rolf Engh
 Title:  Executive Vice President, General Counsel and Secretary
 
	
 
 	
 
 	
 
 
	
 
 	
 
 	
 
 
	
 
 	
U.S. BANK NATIONAL ASSOCIATION, as Series Trustee
 
	
 
 	
 
 	
 
 
	
 
 	
 
 	
 
 
	
 
 	
By:
 	
/s/ Rick Prokosch
 
	
 
 	
 
 	
Name:  Rick Prokosch
 Title:  Vide President
 
	
 
 	
 
 	
 
 
	
 
 	
 
 	
 
 
	
 
 	
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Original Trustee
 
	
 
 	
 
 	
 
 
	
 
 	
 
 	
 
 
	
 
 	
By:
 	
/s/ J. Bartolini
 
	
 
 	
 
 	
Name:  J. Bartolini
 Title:  Vice President
 

 

 

This is a signature page to the Third Supplemental Indenture.

 

 

20

 

EXHIBIT A

 

THIS NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE THEREOF. THIS NOTE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A NOTE REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITORY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

CUSIP 920355 AF 1

 

THE VALSPAR CORPORATION

 

7.250% NOTE DUE 2019

 

	
$300,000,000
 	
No.: R- ●          
 

 

The Valspar Corporation, a Delaware corporation (herein called the “Company”), for value received, hereby promises to pay to CEDE & CO., or registered assigns, the principal sum of THREE HUNDRED MILLION DOLLARS or such other Principal Amount as shall be set forth on Schedule I hereto on June 19, 2009 and to pay interest thereon at the rate of 7.250% per annum from the Initial Interest Accrual Date or from the most recent Interest Payment Date to which interest has been paid or duly provided for, on June 15 and December 15 of each year, commencing December 15, 2009 (each an “Interest Payment Date”), until the principal hereof is paid or made available for payment.

 

The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, except as provided in the Indenture hereinafter referred to, be paid to the Person in whose name this Note (or one or more Predecessor Notes) is registered at the close of business on the Regular Record Date for such interest, which will be the  June 1 and December 1, as the case may be, immediately preceding each Interest Payment Date.  Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Holder on such Regular Record Date and either may be paid to the Person in whose name this Note (or one or more Predecessor Notes) is registered at the close of business on a Special Record Date for the payment of such defaulted interest to be fixed by the Series Trustee, notice whereof shall be given to the Holders not less than ten days prior to such
Special Record Date, or may be paid at any time in any other lawful manner, all as more fully provided in the Indenture. Payment of the principal of and interest on this Note will be made at the office or agency of the Company maintained for that purpose in Minneapolis, Minnesota, or in such other office or agency as may be established by the Company pursuant to the Indenture (initially the principal corporate trust office of the Series Trustee in New York, New York (the “Corporate Trust Office”)), in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that payment of interest may be made at the option of the Company (i) by check mailed to the address of the Person entitled thereto as such address shall appear in the Note Register or (ii) by wire transfer to an account maintained by the Person entitled thereto as specified in the Note Register. Payments of principal and
interest at maturity will be made against presentation of this Note at the Corporate Trust Office (or such other office as may be established pursuant to the Indenture), by check or wire transfer.

 

A-1

Reference is hereby made to the further provisions of this Note set forth on the reverse side hereof, which further provisions shall for all purposes have the same effect as though fully set forth at this place. 

 

Unless the Certificate of Authentication hereon has been executed by the Series Trustee or an Authenticating Agent under the Indenture referred to on the reverse hereof by the manual signature of one of its authorized officers, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

 

IN WITNESS WHEREOF, the Company has caused this Note to be signed in its name by the manual or facsimile signature of its Chief Executive Officer, its President or one of its Vice Presidents and attested by the manual or facsimile signature of its Secretary or one of its Assistant Secretaries. 

 

Date: 

 

	
 
 	
THE VALSPAR CORPORATION
 
	
 
 	
 
 	
 
 
	
 
 	
 
 	
 
 
	
 
 	
By: 
 	
  
 
	
 
 	
 
 	
Name:
 
	
 
 	
 
 	
Title:
 

 

 

ATTEST:

 

_____________________________

Secretary

 

A-2

Series Trustee’s Certificate of Authentication

 

This is one of the Notes described in the Indenture. 

 

Dated: 

 

	
 
 	
U.S. Bank National Association, as Series Trustee
 
	
 
 	
 
 	
 
 
	
 
 	
 
 	
 
 
	
 
 	
By: 
 	
  
 
	
 
 	
 
 	
Authorized Signatory
 

 

 

 

A-3

(Reverse of Note)

 

THE VALSPAR CORPORATION

 

7.250% NOTE DUE 2019

 

1.         This Note is one of a duly authorized issue of securities of the Company  designated as its 7.250% Notes due 2019 (the “Notes”), issued under an Indenture dated as of April 24, 2002 (herein called, together with the First Supplemental Indenture dated as of April 30, 2002, the Second Supplemental Indenture dated as of  April 17, 2007 and the Third Supplemental Indenture referred to below and all other indentures supplemental thereto, the “Indenture”) between the Company and The Bank of New York Mellon Trust Company, N.A. (successor to Bank One Trust Company, N.A.), as trustee, to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights thereunder of the Company, the Original Trustee (as defined below), the Series Trustee (as defined below) and the
Holders of the Notes, and the terms upon which the Notes are, and are to be, authenticated and delivered. The indebtedness of the Company evidenced by the Notes, including the principal thereof and interest thereon (including post-default interest). 

 

2.         This Note is one of the series designated on the face hereof, limited to an aggregate principal amount not to exceed $THREE HUNDRED MILLION DOLLARS, which amount may be increased at the option of the Company if in the future it determines that it may wish to sell additional Notes of this series, as specified in the Third Supplemental Indenture among the Company, The Bank of New York Mellon Trust Company, N.A., as original trustee (herein called the “Original Trustee,” which term includes any successor trustee thereto under the Indenture) and U.S. Bank National Association, as series trustee for the Notes (herein called the “Series Trustee,” which term includes any successor trustee thereto with respect to the Notes under the Indenture) and as Security Registrar and Paying Agent with respect to the Notes, dated as of
June 19, 2009, establishing the form and certain terms of the Notes pursuant to the Indenture (the “Third Supplemental Indenture”). References herein to “this series” mean the series of Notes designated on the face hereof.

 

3.         The Notes are subject to redemption at any time or from time to time, in whole or in part, at the Company’s option at a Redemption Price equal to the greater of:

 (i)       100% of the principal amount of the Notes to be redeemed, and

 (ii)       as determined by the Quotation Agent, the sum of the present values of the remaining scheduled payments of principal and interest in respect of the Notes to be redeemed (not including any portion of those payments of interest accrued as of the date of redemption) discounted to the date of redemption on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 50 basis points 

plus accrued interest to the redemption date. 

 

A-4

“Comparable Treasury Issue” means the United States Treasury security selected by the Quotation Agent as having a maturity comparable to the remaining term of the Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such Notes.

 

“Comparable Treasury Price” means, with respect to any redemption date, (i) the average of four Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (ii) if the Series Trustee obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations, or (iii) if only one Reference Treasury Dealer Quotation is received, such quotation.

 

“Quotation Agent” means the Reference Treasury Dealer appointed by the Company.

 

“Reference Treasury Dealer” means (i) each of Banc of America Securities LLC, Goldman, Sachs & Co. and a Primary Treasury Dealer (as defined below) selected by Wachovia Capital Markets, LLC and its successors; provided, however, that if any of the foregoing shall cease to be a primary U.S. Government securities dealer in New York City (a “Primary Treasury Dealer”), the Company shall substitute therefor another Primary Treasury Dealer, and (ii) any other Primary Treasury Dealer selected by the Company.

 

“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Series Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Series Trustee by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third business day preceding such redemption date.

 

“Treasury Rate” means, with respect to any redemption date, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date.

 

Any notice to holders of Notes of a redemption pursuant to this paragraph 3 hereof will include the appropriate calculation of the redemption price, but does not need to include the redemption price itself. The actual redemption price, calculated as described above, will be set forth in an Officers’ Certificate of the Company delivered to the Series Trustee no later than two Business Days prior to the redemption date.

 

4.         Upon the occurrence of a Change of Control Repurchase Event, unless all Notes have been called for redemption pursuant to paragraph 3 of this Note, each Holder of the Notes shall have the right to require the Company to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of such Notes at an offer price in cash equal to 101% of the aggregate principal amount of such Notes plus accrued and unpaid interest thereon, if any, to the date of repurchase. “Change of Control Repurchase Event” means the occurrence of both a Change of Control and a Below Investment Grade Rating Event, as such terms are defined in the Indenture. The Change of Control Offer will be made in accordance with the terms specified in the Indenture.

 

A-5

5.         If an Acceleration Event with respect to the Notes shall occur and be continuing, the Series Trustee or the Holders of not less than 25% in principal amount of the Outstanding Notes may declare the principal of all Notes due and payable in the manner and with the effect provided in the Indenture.  An “Acceleration Event” is an Event of Default relating to bankruptcy, insolvency, or reorganization of the Company as more specifically defined by the Indenture. The Indenture provides that such declaration and its consequences may, in certain events, be annulled by the Holders of a majority in principal amount of the Outstanding Notes.

 

6.         The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of Notes under the Indenture at any time by the Company and the Series Trustee with the consent of the Holders of a majority in aggregate principal amount of Notes at the time Outstanding. The Indenture also contains provisions permitting the Holders of specified percentages in aggregate principal amount of Notes at the time Outstanding, on behalf of the Holders of all Notes, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of
this Note and of any Note issued upon the registration of transfer hereof or in exchange therefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note. 

 

7.         No reference herein to the Indenture and no provisions of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Note at the times, places and rate, and in the coin or currency, herein prescribed. 

 

8.         As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note may be registered on the Note Register of the Company, upon surrender of this Note for registration of transfer at the office or agency of the Company to be maintained for that purpose in New York, New York, or at such other office or agency as may be established by the Company for such purpose pursuant to the Indenture (initially the principal corporate trust office of the Series Trustee in New York, New York), duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company, and duly executed by the Holder hereof or such Holder’s attorney duly authorized in writing, and thereupon one or more new Notes, of authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees. 

 

9.         The Notes are issuable only in fully registered form, without coupons, in denominations of $2,000 or any amount in excess thereof which is an integral multiple of $1,000. As provided in the Indenture, and subject to certain limitations therein set forth, the Notes are exchangeable for a like aggregate principal amount of Notes in authorized denominations, as requested by the Holder surrendering the same. 

 

 

A-6

10.       No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. 

 

11.       Prior to the due presentment of this Note for registration of transfer or exchange, the Company, the Series Trustee and any agent of the Company or the Series Trustee may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither the Company, the Series Trustee, nor any such agent shall be affected by notice to the contrary.

 

12.       Interest on the Notes shall be computed on the basis of a 360-day year of twelve 30- day months. Interest shall be payable to and excluding any Interest Payment Date.

 

13.       The Series Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not the Series Trustee.

 

14.       This Note shall not be valid until authenticated by the manual signature of the Series Trustee or an Authenticating Agent.

 

15.       Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUT (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

 

16.       Each Holder of this Note covenants and agrees by such Holder’s acceptance thereof to comply with and be bound by the foregoing provisions.

 

17.       All terms used in this Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

 

 

 

A-7

ASSIGNMENT FORM

 

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto

 

PLEASE INSERT SOCIAL SECURITY OR

OTHER IDENTIFYING NUMBER OF ASSIGNEE

 

	

     
 	
  
 
	
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE
 
	
 
 	
 
 
	
 
 	
 
 
	
 
 	
 
 
	
 
 	
 
 
	
 
 	
 
 
	
 
 	
 
 
	
 
 	
 
 
	
the within Security and all rights thereunder, hereby irrevocably constituting and appointing ______________________________________________ attorney to transfer said Security on the books of the Company, with full power of substitution in the premises.
 

 

Dated:  __________________________

Signature:  ____________________________

 

	
NOTICE:
 	
THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE WITHIN INSTRUMENT IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
 

 

 

Signature Guarantee:

 

SIGNATURE GUARANTEE

 

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

 

 

 

A-8

Schedule I

SCHEDULE OF TRANSFERS AND EXCHANGES

The following increases or decreases in Principal Amount of this Global Security have been made:

 

	
Date of 
 Exchange
 	
     
 	
Amount of Decrease in
 Principal Amount of 
 this Global Security
 	
   
 	
Amount of Increase in
 Principal Amount of 
 this Global Security
 	
   
 	
Principal Amount of this
 Global Security 
 following such Decrease
or Increase
 	
   
 	
Signature of
 Authorized 
 Signatory of Series
 trustee or 
 Custodianexh_41.htm -- Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing

EXHIBIT 4.1

EXECUTION COPY

INVESTOR RIGHTS AGREEMENT

               Investor Rights Agreement, dated as of June 23, 2009, by and among Office Depot, Inc., a Delaware corporation (the “Company”), BC Partners, Inc., as the Investor Representative, and the several investors listed on Schedule 1 (collectively, the “Investors”).

               WHEREAS, on the date of this Agreement, the Company and the Investors entered into a Securities Purchase Agreement (the “Purchase Agreement”) pursuant to which the Company agreed to sell to the Investors, and the Investors agreed to purchase from the Company, the Preferred Shares on the terms and subject to the conditions set forth in the Purchase Agreement; and

               WHEREAS, it is a condition to the closing of the transactions contemplated by the Purchase Agreement that the Company and the Investors enter into this Agreement.

               NOW, THEREFORE, in consideration of the foregoing and the agreements contained in this Agreement, and intending to be legally bound by this Agreement, the Company and the Investors agree as follows:

               1.      Definitions. Capitalized terms used and not otherwise defined in this Agreement that are defined in the Purchase Agreement shall have the meanings given such terms in the Purchase Agreement. As used in this Agreement, the following terms shall have the respective meanings set forth in this Section 1:

               “Adjusted EBITDA” means, for any period, Consolidated Net Income for such period, plus, to the extent reflected as a charge in the statement of such Consolidated Net Income for such period, the sum of, without duplication, (i) taxes, (ii) interest, (iii) amortization or write-off of debt discount and debt issuance costs and commissions, discounts and other fees and charges associated with Indebtedness, (iv) depreciation and amortization, (v) amortization or impairment of intangibles (including but not limited to goodwill) and organization costs, (vi) any extraordinary expenses or losses, (vii) any unusual or non-recurring charges, expenses or losses approved by the finance committee of the Board to the extent (x) consistent with past practices of the Company and (y) disclosed by the Company in its public filings with the SEC and (viii) any other non-cash charges (excluding any non-cash charge that will result in a cash expenditure in a future period), and minus, to the extent reflected as a credit in determining Consolidated Net Income for such period, (A) any extraordinary, unusual or non-recurring credits, income or gains (including, whether or not otherwise includable as a separate item in the statement of Consolidated Net Income for such period, gains on dispositions outside of the ordinary course of business) and (B) any other non-cash items of income for such period (excluding any non-cash items of income in respect of which cash will be received in a future period).

               “Consolidated Debt” means at any point in time, the indebtedness of the Company and its Subsidiaries for such reporting period, presented on a consolidated basis in accordance with Generally Accepted Accounting Principles.

               “Consolidated Net Income” means for any period, the net income of the Company and its Subsidiaries for such period, determined on a consolidated basis in accordance with Generally Accepted Accounting Principles.

               “Credit Facilities” means (i) the Credit Agreement and (ii) each of the Company’s foreign credit facilities in place as of the date of this Agreement, in each case as amended, supplemented, restated, renewed, replaced, refinanced or otherwise modified from time to time as permitted by the terms of Sections 2.5(a)(i) and 2.5(b).

               “Indebtedness” means (i) indebtedness for borrowed money whether or not evidenced by bonds, notes, debentures or other similar instruments, including purchase money obligations or other obligations relating to the deferred purchase price of property, (ii) obligations as lessee under leases which have been recorded as capital leases and (iii) obligations under guaranties in respect of indebtedness or obligations of others of the kind referred to in clauses (i) through (ii) above, as reported in accordance with Generally Accepted Accounting Principles, provided that Indebtedness shall not include (A) trade payables and accrued expenses arising in the ordinary course of business and (B) indebtedness, obligations under guaranties and other liabilities owed by the Company to its Subsidiaries or among the Company’s Subsidiaries.

               “Mexico JV” means Office Depot de Mexico, S.A. de C.V.

               “New Securities” means any shares of capital stock of the Company, including Common Stock and Preferred Stock, whether authorized or not by the Board or any committee of the Board, and rights, options, or warrants to purchase said shares of capital stock, and securities of any type whatsoever that are, or may become, convertible into capital stock; provided, however, that the term “New Securities” shall not include: (i) securities issued to employees, consultants, officers and directors of the Company, pursuant to any arrangement approved by the Board or the Board’s Compensation Committee; (ii) securities issued pursuant to the acquisition of another business entity by the Company by merger, purchase of substantially all of the assets or shares, or other reorganization whereby the Company will own equity securities of the surviving or successor corporation; (iii) securities issued in a registered public offering underwritten, provided that the Company shall have complied with Section 5 with respect to the initial sale or grant by the Company of such securities; (iv) securities issued pursuant to any rights or agreements, including, without limitation, convertible securities, options and warrants, provided that either (x) the Company shall have complied with Section 5 with respect to the initial sale or grant by the Company of such rights or agreements or (y) such rights or agreements existed prior to the Closing Date (it being understood that any modification or amendment to any such pre-existing right or agreement subsequent to the Closing Date with the effect of increasing the percentage of the Company’s fully-diluted securities underlying such rights agreement shall not be included in this clause (iv)); (v) securities issued in connection with any stock split, stock dividend or recapitalization by the Company; (vi) Preferred Shares issued pursuant to the Purchase Agreement and Common Stock issued upon conversion of such Preferred Shares; and (vii) any right, option, or warrant to acquire any security convertible into the securities excluded from the definition of New Securities pursuant to clauses (i) through (vi) above.

               “Ownership Percentage” means, as of any date, the percentage equal to (i) the difference of (x) the aggregate number of shares of Common Stock issued to the Investors pursuant to the Purchase Agreement (calculated assuming (A) the Shareholder Approvals have been obtained and (B) full exercise and conversion of the Preferred Shares issued to each of the Investors pursuant to the Purchase Agreement), minus (y) the aggregate number of any shares of Common Stock and any Preferred Shares (calculated for such purposes as Common Stock, assuming (A) the Shareholder Approvals have been obtained and (B) the full exercise and conversion of such Preferred Shares) transferred by any Investor to any Person (including to the Company in connection with a redemption by the Company pursuant to the terms of the applicable Certificate of Designations or pursuant to a merger or consolidation recommended by the Board in which the Company will not be the surviving entity, but excluding any transfers to such Investor’s Affiliates (including commonly controlled or managed investment funds) who, if required by Section 4.1, execute a written joinder agreement in a form approved by the Company pursuant to Section 4.1) or with respect to which any Investor has entered into any swap or any other agreement, transaction or series of transactions that hedges or transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of such Common Stock or Preferred Shares, whether any such transaction, swap or series of transactions is to be settled by delivery of securities, in cash or otherwise (irrespective of whether such transfer or swap or other agreement is in compliance with the restrictions set forth in this Agreement or the Certificates of Designations) divided by (ii) the total number of shares of Common Stock then outstanding (calculated assuming (A) the Shareholder

2

Approvals have been obtained and (B) full exercise and conversion of the Preferred Shares issued to each of the Investors pursuant to the Purchase Agreement).

               2.      Governance Matters.

               2.1      Board Composition.

                          (a)       Effective as of the Closing, the Company shall increase the size of the Board by three directors and cause Raymond Svider, James Rubin and Justin Bateman to be appointed to the Board. For so long as the Investors’ Ownership Percentage is equal to or greater than the percentage indicated in the left hand column of the table below, the Investor Representative on behalf of the Investors shall have the right to nominate for election to the Board that number of directors indicated in the right hand column of the table below (each an “Investor Designee”), and the Company shall, at any annual or special meeting of shareholders of the Company at which directors are to be elected, subject to the fulfillment of the requirements set forth in Section 2.1(b), nominate the Investor Designees for election to the Board and use all reasonable efforts to cause the Investor Designees to be elected as directors of the Board.

	Ownership Percentage  	Investor Designees  
	15%  	3  
	10%  	2  
	5%  	1  

                          (b)       Any Investor Designee shall (i) be an employee of BC Partners Limited, BC Partners Holdings Limited, BC Partners Inc., BC Partners s.à r.l., BC Partners Gmbh, BC Partners s.à r.l., BC Partners Suisse s.r.l. or CIE Management II Limited, (ii) shall be reasonably acceptable to the Board’s Corporate Governance and Nominating Committee (the “Governance Committee”) and (iii) shall comply in all respects with the Company’s corporate governance guidelines as in effect from time to time. The Investor Representative shall notify the Company of any proposed Investor Designee in writing no later than the latest date on which shareholders of the Company may make nominations to the Board in accordance with the Bylaws, together with all information concerning such nominee required to be delivered to the Company by the Bylaws and such other information reasonably requested by the Company; provided that in each such case, all such information is generally required to be delivered to the Company by the other outside directors of the Company (the “Nominee Disclosure Information”); provided, further that in the event the Investor Representative fails to provide any such notice, the Investor Designees shall be the person then serving as the Investor Designee as long as the Investor Representative provides the Nominee Disclosure Information to the Company promptly upon request by the Company.

                          (c)       In the event of the death, disability, resignation or removal of an Investor Designee, the Board will promptly elect to the Board a replacement director designated by the Investor Representative, subject to the fulfillment of the requirements set forth in Section 2.1(b), to fill the resulting vacancy, and such individual shall then be deemed an Investor Designee for all purposes under this Agreement.

                          2.2       Committee Membership. For so long as the Investors’ Ownership Percentage is equal to or greater than 10%, (i) one Investor Designee will be appointed by the Board to sit on each regular committee of the Board (other than the Board’s Audit Committee (the “Audit Committee”)), subject to such Investor Designee satisfying applicable qualifications under applicable law, regulation or stock exchange rules and regulations, (ii) one Investor Designee will be permitted to attend meetings of the Audit Committee as an observer and (iii) the Board’s Finance Committee (the “Finance Committee”) will be comprised of five directors, two of whom will be Investor Designees, and the Finance Committee’s charter will specify that the

3

Finance Committee’s responsibilities include the review of the Company’s annual business plan and operating budget. In the event that the holders of Series A Preferred are entitled to appoint more than one director, the Investor will have the right to designate which director serves on which committee or committees (subject to chosen director satisfying applicable qualifications under law or stock exchange rule), provided that such selection is reasonably acceptable to the Governance Committee. If an Investor Designee fails to satisfy the applicable qualifications under law or stock exchange rule to sit on any committee of the Board, then the Board shall permit such Investor Designee to attend (but not vote) at the meetings of such committee as an observer.

                              2.3      Compensation and Benefits. Each of the Investor Designees will be entitled to receive similar compensation, benefits, reimbursement, indemnification and insurance coverage for their service as directors as the other outside directors of the Company. For so long as the Company maintains directors and officers liability insurance, the Company shall include each Investor Designee as an “insured” for all purposes under such insurance policy for so long as such Investor Designee is a director of the Company and for the same period as for other former directors of the Company when such Investor Designee ceases to be a director of the Company.

                              2.4       Budget Review. For so long as the Investors’ Ownership Percentage is equal to or greater than 10%, the Investor Designees plus the chief executive officer and the chief financial officer of the Company shall meet once annually and review the annual business plan and operating budget produced prior to its submission to the Board.

                              2.5       Special Approval Matters.

                              (a)       For so long as the Investors’ Ownership Percentage is equal to or greater than 10%, the following matters will require the approval of at least 66-2/3% of the directors on the Board to authorize the Company to proceed with such a transaction (excluding any such transaction between the Company and its wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries):

                              (i)      the incurrence of any Indebtedness in excess of $200 million in the aggregate during any fiscal year (excluding any (A) refinancings and replacements of Indebtedness outstanding as of the date of this Agreement and (B) borrowings under the Credit Facilities);

                              (ii)      the sale, transfer or other disposition of assets or businesses of the Company or its Subsidiaries (other than the Mexico JV) with a value in excess of $50 million in the aggregate during any fiscal year (other than sales of inventory or supplies in the ordinary course of business, sales of obsolete assets (excluding real estate), sale-leaseback transactions and accounts receivable factoring transactions);

                              (iii)      the acquisition of any assets or properties (in one or more related transactions) for cash or otherwise for an amount in excess of $50 million in the aggregate during any fiscal year (other than acquisitions of inventory and equipment in the ordinary course of business);

                              (iv)      capital expenditures in excess of $30 million individually (or in the aggregate if related to an integrated program of activities) or in excess of $275 million in the aggregate during any fiscal year; and

                              (v)      making, or permitting any Subsidiary (other than the Mexico JV) to make, loans to, investments in, or purchasing, or permitting any Subsidiary (other than the

4

Mexico JV) to purchase, any stock or other securities in another corporation, joint venture, partnership or other entity (including the Mexico JV) in excess of $50 million in the aggregate during any fiscal year.

                              (b)      For so long as the Investors’ Ownership Percentage is equal to or greater than 10%, the following will require the approval of at least one of the Investor Designees: (i) increasing the size of the Board beyond 14 directors and (ii) the incurrence of any Indebtedness for borrowed money in excess of $200 million in the aggregate during any fiscal year (excluding (A) any borrowings under the Credit Facilities and (B) after June 23, 2011, any refinancings and replacements of Indebtedness outstanding as of the date of this Agreement that do not increase the aggregate principal amount of, or the amount that may be borrowed by the Company or its Subsidiaries under, as applicable, such Indebtedness as in effect on the date of this Agreement) if the ratio of Consolidated Net Debt to the trailing four quarter Adjusted EBITDA of the Company and its Subsidiaries, on a consolidated basis, is more than 4x.

                              (c)      For so long as the Investors or their respective Affiliates (including commonly controlled or managed investment funds) or any direct or indirect owner of the foregoing own any shares of Series A Preferred or Series B Preferred issued to the Investors on the Closing Date (each such owner of such a share, an “Investor Group Member”), issuing (i) convertible debt that is by its terms convertible into capital stock of the Company, (ii) preferred stock or (iii) options or warrants to acquire preferred stock, will require the approval of the Investor Representative; provided, however, that the approval set forth in this Section 2.5(c) will not be required if (A) the Company establishes (or has previously established) a Withholding Tax Escrow (as defined in Annex A) or (B) if the Company reasonably expects that the Company will not collect Withholding Tax (as defined in Annex A) from any Investor Group Member as a result of the issuance of such stock or securities or the payment or accrual of interest or dividends on such stock or securities (provided in the case of this clause (B) that if the Company subsequently determines to collect Withholding Tax as a result of the issuance of such stock or securities or the payment or accrual of interest or dividends on such stock or securities, then, unless the Company has previously established a Withholding Tax Escrow, the Company will, at the time it so determines to begin collecting Withholding Tax, establish a Withholding Tax Escrow). The Company shall establish a Withholding Tax Escrow only if it reasonably expects that such issuance of stock or securities will result in the Company having an obligation to collect Withholding Tax.

            3.       Voting Agreement.

                       3.1     Voting Agreement as to Certain Matters. In connection with any proposal submitted for Company shareholder approval (at any annual or special meeting called, or in connection with any other action (including the execution of written consents)) related to the election or removal of directors of the Board or any business or proposal involving the Company, each of the Investors will (a) cause all of their respective shares of Company capital stock that are entitled to vote, whether now owned or hereafter acquired (collectively, the “Voting Securities”), to be present in person or represented by proxy at all meetings of shareholders of the Company, so that all such shares shall be counted as present for determining the presence of a quorum at such meetings and (b) vote all of their Voting Securities: (i) in favor of any nominee or director nominated by the Governance Committee (provided that the Governance Committee is consistent with the terms of Section 2.1), (ii) against the removal of any director nominated by the Governance Committee, (iii) with respect to any other business or proposal, in accordance with the recommendation of the Board, other than with respect to the approval of any proposed business combination (including, without limitation, any reorganization, merger, tender offer, consolidation, sale of assets or otherwise) agreement between the Company and any other Person and (iv) in favor of the Shareholder Approvals. Notwithstanding anything to the contrary, there shall be no restriction on the ability

5

of any Investor (or any successor in interest to any of the Voting Securities) to exercise its voting rights pursuant to Section 9(b) and 9(c) of each of the Certificates of Designations.

                           3.2      No Successors in Interest. The provisions of this Section 3 shall not be binding upon the successors in interest to any of the Voting Securities other than Affiliates of the Investors (including commonly controlled or managed investment funds).

                           3.3      Termination of Voting Agreement. The provisions of this Section 3 shall terminate upon the earliest to occur of any one of the following events: (i) as to any Investor, the date on which such Investor ceases to own any Preferred Shares and any shares of Common Stock issued upon conversion of the Preferred Shares (for the avoidance of doubt, whether by reason of redemption, transfer or conversion), (ii) the liquidation, dissolution or indefinite cessation of the business operations of the Company, (iii) the execution by the Company of a general assignment for the benefit of creditors or the appointment of a receiver or trustee to take possession of the property and assets of the Company or (iv) the acquisition of the Company by any other Person by means of any transaction or series of related transactions (including, without limitation, any reorganization, merger, consolidation, sale of assets or otherwise).

               4.        Restrictions on Transfer.

                          4.1       No Transfer of Shares Prior to Second Anniversary. Prior to June 23, 2011, each of the Investors agree that they will not directly or indirectly sell, transfer, pledge, encumber, assign or otherwise dispose of any portion of any Preferred Shares or shares of Common Stock issued upon a conversion of the Preferred Shares to any Person without the prior written consent of the Company (which consent may be given or withheld, or made subject to such conditions as are determined by the Company, in its sole discretion) other than (i) to its Affiliates (including commonly controlled or managed investment funds) who execute a written joinder agreement in a form approved by the Company pursuant to which such Affiliate agrees to be bound by the terms of Sections 3, 4 and 6, (ii) pursuant to a tender or exchange offer recommended by the Board, (iii) pursuant to a merger or consolidation recommended by the Board in which the Company will not be the surviving entity or (iv) in connection with a redemption by the Company pursuant to the terms of the applicable Certificate of Designations. Any purported Transfer which is not in accordance with the terms and conditions of this Section 4.1 shall be, to the fullest extent permitted by law, null and void ab initio and, in addition to other rights and remedies at law and in equity, the Company shall be entitled to injunctive relief enjoining the prohibited action.

                          4.2       No Transfer to Competitors. Each Investor agrees that they will not at any time directly or knowingly indirectly (without any duty of investigation) transfer any Preferred Shares or any shares of Common Stock issuable upon conversion of the Preferred Shares to any Competitor of the Company without the prior written consent of the Company (which consent may be given or withheld, or made subject to such conditions as are determined by the Company, in its sole discretion). For purposes of this Section 4.2, “Competitor” shall mean (i) any Person that (x) sells office products or services, whether in retail stores or via direct sales, catalogs or the internet and (y) such sales represent greater than 15% of the total annual sales, for the most recent completed fiscal year, of such Person and its direct and indirect subsidiaries taken as a whole and (ii) any Person that has direct or indirect majority voting control of any Person identified in the preceding clause (i).

                          4.3       No Block Transfers to Individual Persons. Each Investor agrees that it will not, individually or acting together with any other Investor, at any time knowingly (after reasonable inquiry), directly or indirectly, transfer any Preferred Shares or any shares of Common Stock issuable upon conversion of the Preferred Shares (a) to any individual Person or “group” (within the meaning of Section 13(d)(3) of the Exchange Act) in an amount constituting 7.0% or more of the voting capital stock of the Company then outstanding or (b) to any individual Person or “group” (within the meaning of Section 13(d)(3) of the Exchange Act) that, immediately following such transfer, would beneficially own in the aggregate more than

6

9.5% of the voting capital stock of the Company then outstanding (other than, in each case of clauses (a) or (b), to (i) any Investor, (ii) any of its Affiliates (including commonly controlled or managed investment funds) who execute a written joinder agreement in a form approved by the Company pursuant to which such Affiliate agrees to be bound by the terms of Sections 3, 4 and 6 or (iii) an underwriter in connection with a bona fide public offering or distribution).

               5.       Right of First Offer.

                         5.1      Subject to the terms and conditions set forth in this Section 5, the Investors have the right to purchase from the Company an amount of any New Securities that the Company may, from time to time, propose to issue and sell equal to such Investor’s Ownership Percentage (calculated as of the date of delivery of such Notice of Issuance) to the extent such New Securities are actually issued.

                         5.2      In the event the Company proposes to undertake an issuance of New Securities, it shall give the Investor Representative written notice of its intention, describing the type of New Securities and the price and terms upon which the Company proposes to issue such New Securities (a “Notice of Issuance”). Each Investor shall have 30 days from the date of delivery of a Notice of Issuance to the Investor Representative to agree to purchase a portion of the New Securities equal to such Investor’s Ownership Percentage (calculated as of the date of delivery of such Notice of Issuance), for the price and upon the terms specified in the Notice of Issuance. On or prior to the expiration of such 30 day period, the Investors Representative shall deliver a written notice to the Company on the Investors’ behalf stating the quantity of New Securities to be purchased by each Investor (the “Investor Response”), which written notice shall be binding on the Company and such Investor subject only to the completion of the issuance of New Securities described in the applicable Notice of Issuance.

                         5.3      The Company shall have 120 days following the earlier of (i) the expiration of the 30-day period described in Section 5.2 and (ii) the delivery of the Investor Response to sell or enter into an agreement to sell the New Securities with respect to which the Investors’ right to purchase was not exercised, at a price and upon terms no more favorable than those specified in the Notice of Issuance. If the Company does not sell such New Securities or enter into an agreement to sell such New Securities within such 120-day period, then the Company shall not thereafter issue or sell any New Securities without first offering such New Securities to the Investors in the manner provided in Section 5.2.

                         5.4      If, at the close of any Business Day following the Closing Date, the Investors’ Ownership Percentage is less than 10%, then all obligations of the Company pursuant to this Section 5 shall immediately terminate.

               6.       Standstill Restrictions.

                         6.1      Until the later of (x) the time that the Investors’ Ownership Percentage is less than 3% and (y) June 23, 2012, each of the Investors and their respective Affiliates (including commonly controlled or managed investment funds) shall not (i) directly or indirectly acquire, agree to acquire, or offer to acquire, beneficial ownership of any equity or debt securities of the Company, any warrant or option to purchase such securities, any security convertible into any such securities, or any other right to acquire such securities, other the Preferred Shares, Common Stock acquired upon conversion of such Preferred Shares and any Preferred Shares or Common Stock paid as dividends or as an increase of the accrued liquidation payment amount or distributions thereon, (ii) directly or indirectly enter into or agree to enter into any merger, business combination, recapitalization, restructuring, change of control transaction or other extraordinary transaction involving the Company or any of its Subsidiaries, (iii) make, or in any way participate or engage in, directly or indirectly, any solicitation of proxies to vote, or seek to advise or influence any person with respect to the voting of, any voting securities of the Company or any of Subsidiary of the Company, (iv) bring any action or otherwise act to contest the validity of the restrictions set forth in this

7

Section 6, or seek a release of such restrictions, (v) form, join or in any way participate in a “group” (within the meaning of Section 13(d)(3) of the Exchange Act) with respect to any voting securities of the Company or any Subsidiary of the Company except for any group constituting solely of the Investors and their respective Affiliates, (vi) seek the removal of any directors from the Board or a change in the size or composition of the Board (including, without limitation, voting for any directors not nominated by the Board), except as otherwise provided in Section 2.5(b) and the Series A Certificate of Designations and the Series B Certificate of Designations, (vii) propose or enter into any discussions, negotiations, arrangements, understandings or agreements (whether written or oral) with any other person regarding any possible purchase or sale of any securities or assets of the Company or any Subsidiary of the Company (other than securities owned by the Investors), (viii) call, request the calling of, or otherwise seek or assist in the calling of a special meeting of the shareholders of the Company, (ix) deposit any Preferred Shares or Common Stock in a voting trust or similar arrangement or subject any Preferred Shares or Common Stock to any voting agreement, pooling arrangement or similar arrangement, or grant any proxy with respect to any Preferred Shares or Common Stock to any person not affiliated with the Investor or Company management; (x) enter into any swap or any other agreement, transaction or series of transactions that hedges or transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of the Preferred Shares or the Common Stock, whether any such transaction, swap or series of transactions is to be settled by delivery of securities, in cash or otherwise; (xi) disclose any intention, plan or arrangement prohibited by, or inconsistent with, the foregoing or (xii) make, or take, any action that would reasonably be expected to cause the Company to make a public announcement regarding any intention of any Investor to take an action that would be prohibited by the foregoing; provided, however, that the foregoing shall not restrict the ability of the Investor Designees or other directors appointed or elected to the Board pursuant to the terms of the Series A Certificate of Designations and the Series B Certificate of Designations from exercising their fiduciary duties.

                         6.2      Notwithstanding the foregoing, if the Board decides to engage in a process that could give rise to a change of control of the Company, the Company shall invite the Investors acting through the Investor Representative to participate in such process on the terms and conditions generally made available to the other participants in such process; provided, however, that each Investor Designee shall resign from the Board during the period in which the Investors Representative on behalf of any Investor is participating in such process; provided, further, however, that, following the termination of the Investors participation in any process, the Investors’ right to nominate the Investor Designees shall be reinstated and the Company shall appoint the Investor Designees that resigned to the Board as soon as reasonably possible. In addition, if requested by the Board, the Investor Representative on behalf of the Investors may submit a confidential private acquisition proposal to the Board and respond to any related inquiries from the Board, provided that any such proposal shall be conditioned on approval of the Board.

               7.      Termination. Other than the termination provisions applicable to particular Sections of this Agreement that are specifically provided elsewhere in this Agreement, this Agreement shall terminate (except for Section 8) (a) upon the mutual written agreement of the Company and the Investor Representative or (b) at such time as the Investors no longer beneficially own any shares of Common Stock or any Preferred Shares.

               8.      Confidentiality.

                        8.1       The Investor Representative and each Investor hereby agree to keep confidential, to cause their respective employees, officers, directors and Affiliates to keep confidential and to instruct their respective representatives to keep confidential, any and all confidential information of the Company, including non-public information relating to the Company’s finances and results, trade secrets, know-how, customers, business plans, marketing activities, financial data and other business affairs that was disclosed by the Company on or prior to the date of this Agreement pursuant to the terms of the confidentiality agreement dated January 6, 2009 between the Company and BC Partners, Inc. (the “Confidentiality

8

Agreement”) or that is disclosed on or after the date of this Agreement by the Company or any Investor Designee to the Investor Representative, any Investor or their respective Affiliates or representatives (each a “Receiving Party”), (collectively, the “Company Proprietary Information”), and to utilize the Company Proprietary Information only for purposes related to the purpose for which such information was disclosed (the “Utilization Restriction”); provided, however, that the Utilization Restriction shall not restrict the sale of the Preferred Shares or the Common Stock issued upon conversion of the Preferred Shares so long as such Investor complies with the confidentiality restrictions of this section, the Company’s insider trading policy and applicable securities laws; provided, further, however, that Company Proprietary Information shall not include any information that (i) is or subsequently becomes publicly available without breach of this Section 8 or (ii) is or subsequently becomes known or available to a Receiving Party from a source other than the Company that, to such Receiving Party’s knowledge, is not prohibited from disclosing such Company Proprietary Information to the Receiving Party by a contractual, legal or fiduciary obligation owed by such other third party to the Company. For the avoidance of doubt, subject to the terms of this Section 8, any Investor may disclose Company Proprietary Information to its employees, officers, directors, advisors and representatives (including the Investor Representative). Each Investor shall be responsible for any failure of its employees, officers, directors, advisors and representatives to keep confidential the Company Proprietary Information.

                         8.2       In the event that any Receiving Party is required by applicable law, regulation or legal process to disclose any Company Proprietary Information, then (to the extent reasonably practicable, before substantively responding to any such request or requirement) such Receiving Party will provide the Company with prompt written notice of any such request or requirement so that the Company may (at its sole cost and expense) seek a protective order or other appropriate remedy, or both, or waive compliance with the provisions of this Section 8 or other appropriate remedy, or if the Company so directs, such Receiving Party will exercise its own reasonable best efforts to assist the Company in obtaining a protective order or other appropriate remedy at the Company’s sole cost and expense. If, failing the entry of a protective order or other appropriate remedy or the receipt of a waiver hereunder, disclosure of any Company Proprietary Information is required by law, regulation or legal process then such Receiving Party may furnish only that portion of the Company Proprietary Information that is required to be so furnished pursuant to law, regulation or legal process. In any event, such Receiving Party will cooperate fully with any action by the Company (at its sole cost and expense) to obtain an appropriate protective order or other reliable assurance that confidential treatment will be accorded the Company Proprietary Information.

                         8.3       This Agreement shall supersede the Confidentiality Agreement and, as of the date of this Agreement, the Confidentiality Agreement is terminated.

               9.       Tax Matters.

                         9.1       Each Investor shall deliver to the Company within 90 days after the Closing Date two original copies of whichever of the following is applicable: (i) duly completed and executed copies of Internal Revenue Service Form W-8BEN (or any subsequent versions thereof or successors thereto), claiming eligibility (if any) for benefits of an income tax treaty to which the United States of America is a party, (ii) duly completed and executed copies of Internal Revenue Service Form W-8ECI (or any subsequent versions thereof or successors thereto), (iii) duly completed and executed copies of Internal Revenue Service Form W-8EXP (or any subsequent versions thereof or successors thereto) (iv) duly completed and executed copies of Internal Revenue Service Form W-9 (or any subsequent versions thereof or successors thereto), (v) duly completed and executed copies of Internal Revenue Service Form W-8IMY (or any subsequent versions thereof or successors thereto), together with forms and certificates described in clauses (i) through (iv) above (and additional Form W-8IMYs (or any subsequent versions thereof or successors thereto)) as may be required or (vi) any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in United States federal withholding tax duly completed together with such supplementary documentation as may be prescribed by applicable law to permit the Company to determine the withholding

9

or deduction required to be made. In addition, in each of the foregoing circumstances, each Investor shall deliver such forms upon the obsolescence, expiration or invalidity of any form previously delivered by such Investor. Each Investor shall, as promptly as reasonably practicable notify the Company at any time it determines that it is no longer in a position to provide any previously delivered form or certificate to the Company (or any other form of certification adopted by the United States of America or other taxing authorities for such purpose).

                         9.2      The Investor Representative shall deliver to the Company within 90 days after the Closing Date a schedule setting out the Investors’ calculations in reasonable detail as to how much withholding would be required on payments to each Investor Group Member in the event of a taxable distribution and shall as promptly as reasonably practicable deliver an updated schedule whenever such information changes (including upon any transfer to Investor Group Members not party to this Agreement).

                       9.3     Upon a transfer of shares of Series A Preferred or Series B Preferred to an Investor Group Member not party to this Agreement, within 90 days after such transfer or such earlier date as may be reasonably necessary in light of any upcoming taxable distribution, the Investor Representative shall cause the Investor Group Member receiving such transferred shares to provide the information required by the first sentence of Section 9.1 to be delivered to the Company and shall cause the Investor Group Member to comply with the second and third sentences of Section 9.1 (replacing for this purpose the term “Investor” with “Investor Group Member”).

                          9.4     The Investor Representative represents that it is a domestic corporation for federal income tax purposes and shall deliver to the Company an Internal Revenue Service Form W-9 to such effect.

               10.      Miscellaneous.

                          10.1      Governing Law. This Agreement shall be governed in all respects by the laws of the State of State of Delaware without regard to any choice of laws or conflict of laws provisions that would require the application of the laws of any other jurisdiction.

                          10.2      Jurisdiction; Enforcement. The parties agree that irreparable damage would occur if any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that each of the parties shall be entitled (in addition to any other remedy that may be available to it, including monetary damages) to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement exclusively in the Delaware Court of Chancery and any state appellate court therefrom within the State of Delaware (or, if the Delaware Court of Chancery declines to accept jurisdiction over a particular matter, any state or federal court within the State of Delaware). In addition, each of the parties irrevocably agrees that any legal action or proceeding with respect to this Agreement and the rights and obligations arising hereunder, or for recognition and enforcement of any judgment in respect of this Agreement and the rights and obligations arising hereunder brought by the other party or its successors or assigns, shall be brought and determined exclusively in the Delaware Court of Chancery and any state appellate court therefrom within the State of Delaware (or, if the Delaware Court of Chancery declines to accept jurisdiction over a particular matter, any state or federal court within the State of Delaware). The parties further agree that no party to this Agreement shall be required to obtain, furnish or post any bond or similar instrument in connection with or as a condition to obtaining any remedy referred to in this Section and each party waives any objection to the imposition of such relief or any right it may have to require the obtaining, furnishing or posting of any such bond or similar instrument. Each of the parties hereby irrevocably submits with regard to any such action or proceeding for itself and in respect of its property, generally and unconditionally, to the personal jurisdiction of the aforesaid courts and agrees that it will not bring any action relating to this Agreement or any of the transactions contemplated by this Agreement in any court other than the aforesaid courts. Each of the parties hereby irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any

10

action or proceeding with respect to this Agreement, (a) any claim that it is not personally subject to the jurisdiction of the above named courts for any reason other than the failure to serve in accordance with this Section, (b) any claim that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) to the fullest extent permitted by the applicable Law, any claim that (i) the suit, action or proceeding in such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper or (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such courts. Each party hereby consents to service being made through the notice procedures set forth in Section 10.6 and agrees that service of any process, summons, notice or document by registered mail (return receipt requested and first-class postage prepaid) to the respective addresses set forth in Section 10.6 shall be effective service of process for any suit or proceeding in connection with this Agreement or the transactions contemplated by this Agreement. EACH OF THE PARTIES KNOWINGLY, INTENTIONALLY AND VOLUNTARILY WITH AND UPON THE ADVICE OF COMPETENT COUNSEL IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

                         10.3      Successors and Assigns. Except as otherwise provided in this Agreement, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors, and administrators of the parties; provided, however, the rights of the Investors under this Agreement shall not be assignable to any Person without the consent of the Company.

                         10.4      No Third-Party Beneficiaries. Notwithstanding anything contained in this Agreement to the contrary, nothing in this Agreement, expressed or implied, is intended to confer on any Person other than the parties any rights, remedies, obligations or liabilities under or by reason of this Agreement, and no Person that is not a party to this Agreement (including any partner, member, shareholder, director, officer, employee or other beneficial owner of any party, in its own capacity as such or in bringing a derivative action on behalf of a party) shall have any standing as third-party beneficiary with respect to this Agreement or the transactions contemplated by this Agreement.

                         10.5      Entire Agreement. This Agreement, the Purchase Agreement and the other documents delivered pursuant to the Purchase Agreement, including the Registration Rights Agreement, constitute the full and entire understanding and agreement among the parties with regard to the subjects of this Agreement and such other agreements and documents.

                         10.6      Notices. Except as otherwise provided in this Agreement, all notices, requests, claims, demands, waivers and other communications required or permitted under this Agreement shall be in writing and shall be mailed by reliable overnight delivery service or delivered by hand, facsimile or messenger as follows:

		 	if to the Company:   	  	Office Depot, Inc.  
		 	  	  	6600 North Military Trail  
		 	  	  	Boca Raton FL 33496  
		 	  	  	Attention: Steve Odland  
		 	  	  	Facsimile: (561) 438-4400  
		 	  
		 	with a copy to:                            	  	Wachtell, Lipton, Rosen & Katz  
		 	  	  	51 West 52nd Street  
		 	  	  	New York, New York 10019  
		 	  	  	Attention: David A. Katz  
		 	  	  	Facsimile: (212) 403-2000  

11

		 	if to any Investor

or the Investor Representative:      	  	BC Partners, Inc.  
		 	  	  	667 Madison Avenue  
		 	  	  	New York, New York 10065  
		 	  	  	Attention: James Rubin and Justin Bateman  
		 	  	  	Facsimile: (212) 891-2899  
		 	  
		 	  
		 	with a copy to:  	  	Latham & Watkins LLP  
		 	  	  	885 Third Avenue  
		 	  	  	New York, NY 10022  
		 	  	  	Attention: Raymond Lin and John Giouroukakis  
		 	  	  	Facsimile: (212) 751-4864  

or in any such case to such other address, facsimile number or telephone as either party may, from time to time, designate in a written notice given in a like manner. Notices shall be deemed given when actually delivered by overnight delivery service, hand or messenger, or when received by facsimile if promptly confirmed.

          10.7      Delays or Omissions. No delay or omission to exercise any right, power, or remedy accruing to any party under this Agreement shall impair any such right, power, or remedy of such party, nor shall it be construed to be a waiver of or acquiescence to any breach or default, 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. All remedies, either under this Agreement or by law or otherwise afforded to any holder, shall be cumulative and not alternative.

          10.8      Amendments and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only if such amendment or waiver is in writing and signed, in the case of an amendment, by the Company and the Investor Representative or, in the case of a waiver, by the party against whom the waiver is to be effective. Any amendment or waiver effected in accordance with this paragraph shall be binding upon each holder of any securities purchased under this Agreement at the time outstanding (including securities into which such securities are convertible), each future holder of all such securities, and the Company.

          10.9      Counterparts. This Agreement may be executed in any number of counterparts and signatures may be delivered by facsimile or in electronic format, each of which may be executed by less than all the parties, each of which shall be enforceable against the parties actually executing such counterparts and all of which together shall constitute one instrument.

          10.10      Severability. If any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable, or void, portions of such provision, or such provision in its entirety, to the extent necessary, shall be severed from this Agreement and the balance of this Agreement shall be enforceable in accordance with its terms.

          10.11      Titles and Subtitles; Interpretation. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. When a reference is made in this Agreement to a Section, Schedule or Annex, such reference shall be to a Section, Schedule or Annex of this Agreement unless otherwise indicated. 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 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.

12

Any agreement, instrument or statute defined or referred to in this Agreement 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. Each of the parties has participated in the drafting and negotiation of this Agreement. If an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed as if it is drafted by each of 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.

13

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

	OFFICE DEPOT, INC.
	  
	By:  	  	/s/ Michael Newman                                         
	  	  	Name: Michael Newman  
	  	  	Title: Executive Vice President &

          Chief Financial Officer  
	  	  	
	  
	BC PARTNERS, INC., as the Investor Representative
	  
	  
	By:  	  	/s/ Justin Bateman                                            
	  	  	Name: Justin Bateman
	  	  	Title: Director
	  
	For and on behalf of the Limited Partnerships BC For

and on behalf of the Limited Partnerships BC

European Capital VIII – 1 to 12 and 14 to 34
	  
	/s/ Matthew Elston                                                   
	Name: Matthew Elston  
	Director, CIE Management II Limited acting as General

Partner of the Limited Partnerships BC European Capital

VIII - 1 to 12 and 14 to 34
	  
	/s/ Mark Rodliffe                                                      
	Name: Mark Rodliffe  
	Director, CIE Management II Limited acting as General

Partner of the Limited Partnerships BC European Capital

VIII - 1 to 12 and 14 to 34  
	  
	For and on behalf of BC European Capital 35 SC to 39

SC:
	  
	/s/ Matthew Elston                                                
	Name: Matthew Elston  
	Director, LMBO Europe SAS

As Gérant to BC European Capital 35 SC to 39 SC
	  
	/s/ Mike Twinning                                       
	Name: Mike Twinning  
	Director, LMBO Europe SAS

As Gérant to BC European Capital 35 SC to 39 SC

SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT

Schedule 1

Investors

Investor

BC European Capital VIII-1 

BC European Capital VIII-2 

BC European Capital VIII-3 

BC European Capital VIII-4 

BC European Capital VIII-5 

BC European Capital VIII-6 

BC European Capital VIII-7 

BC European Capital VIII-8 

BC European Capital VIII-9 

BC European Capital VIII-10 

BC European Capital VIII-11 

BC European Capital VIII-12 

BC European Capital VIII-14 

BC European Capital VIII-15 

BC European Capital VIII-16 

BC European Capital VIII-17 

BC European Capital VIII-18 

BC European Capital VIII-19 

BC European Capital VIII-20 

BC European Capital VIII-21 

BC European Capital VIII-22 

BC European Capital VIII-23 

BC European Capital VIII-24 

BC European Capital VIII-25 

BC European Capital VIII-26 

BC European Capital VIII-27 

BC European Capital VIII-28 

BC European Capital VIII-29 

BC European Capital VIII-30 

BC European Capital VIII-31 

BC European Capital VIII-32 

BC European Capital VIII-33 

BC European Capital VIII-34 

BC European Capital VIII-35 SC 

BC European Capital VIII-36 SC 

BC European Capital VIII-37 SC 

BC European Capital VIII-38 SC 

BC European Capital VIII-39 SC

ANNEX A

Withholding Tax Escrow

Pursuant to the terms of Section 2.5(c) and this Annex A, the Company may establish an escrow account for the benefit of the Investor Group Members funded with a total of $6 million of the aggregate proceeds of the issuance of stock, options or convertible securities with respect to which such escrow account is established (“Withholding Tax Escrow”). If the Company so elects to establish the Withholding Tax Escrow:

          (1)      Subject to the limitations contained below and subject to the satisfaction of the delivery requirements set forth below, each Investor Group Member shall be reimbursed from the Withholding Tax Escrow for Withholding Tax imposed with respect to such Investor Group Member as promptly as reasonably practicable upon delivery by the Investor Group Member of documentation establishing to the reasonable satisfaction of the Company the amount of reimbursement to which the Investor Group Member is entitled under this Annex A. Notwithstanding any other provision, in no event shall the aggregate reimbursement exceed $6 million (less the amount, if any, held in the escrow on the date it is terminated pursuant to Paragraph 4 below), and all reimbursements shall be satisfied solely from the Withholding Tax Escrow. In the event that requests for reimbursements satisfying the terms and conditions of this Annex A are or may be in excess of such amount, the Investor Representative will determine how such reimbursements will be allocated among the Investor Group Members, and the Company shall be entitled fully to rely on such determination.

          (2)      Such reimbursement shall not be made for any Withholding Tax to the extent an Investor Group Member (or any direct or indirect owner thereof) is legally entitled to a reduction or exemption from such Withholding Tax, whether by reason of a treaty or otherwise. The Investor Group Members shall comply with Section 9 and promptly deliver to the Company such properly completed and executed documentation prescribed by applicable law as may reduce or eliminate any Withholding Tax (including, for the absence of doubt, documentation properly completed and executed by direct or indirect owners of the Investors). No reimbursements shall be made for any Withholding Tax that would not have been imposed if the Investor Group Members had delivered such forms which they (or their direct or indirect owners) were legally entitled to deliver.

          (3)     If an Investor Group Member (or any direct or indirect owner thereof) is legally entitled to a refund of any Withholding Tax which has previously been reimbursed (refunds being treated for this purpose as first being refunds of Withholding Tax) pursuant to Paragraph 1 of this Annex A, it shall pay over such refund to which it (or its direct or indirect owner) is legally entitled to the Company. The Investor Representative shall promptly deliver to the Company statements setting forth the type and amount of any such refund and any other pertinent information relating thereto.

          (4)      Prior to the termination of the Withholding Tax Escrow, the Company shall not remove or distribute any of the Withholding Tax Escrow, other than with the approval of the Investor Representative to pay any amounts the Company believes in good faith to be owing to an Investor Group Member pursuant to this Annex A (it being understood that making such payments in accordance with such approvals shall relieve the Company of any and all liability under this Annex A or Section 2.5(c) with respect to the Investor Group Members), except that any earnings on the funds held in the Withholding Tax Escrow shall be for the account of the Company, and the Company shall be entitled to withdraw such earnings at any time. The Withholding Tax Escrow shall terminate on the date three years after it is established (or such earlier date as the balance held in the Withholding Tax Escrow is zero), any remaining funds in the Withholding Tax Escrow shall be returned to the Company at that time and no further reimbursements for Withholding Tax shall be made.

          (5)      Any disputes regarding claims against the Withholding Tax Escrow shall be resolved in a manner consistent with the terms and conditions of this Agreement by an independent nationally recognized accountant mutually satisfactory to the Company and the Investor Representative.

          (6)      “Withholding Tax” shall mean withholding tax required to be collected by the Company by Section 1441 or 1442 of the Code (i) on distributions (or deemed distributions) of stock with respect to the Series A Preferred or, if the Shareholder Approvals have been obtained, the Series B Preferred held by the Investor Group Members and (ii) deemed cash distributions in the form of reimbursements pursuant to this Annex A. For the avoidance of doubt, Withholding Tax shall not include withholding tax imposed on any cash distributions other than deemed cash distributions in the form of reimbursements pursuant to this Annex A.

          (7)      The Withholding Tax Escrow shall be deposited by the Company, in trust for the benefit of the Investor Group Members, with a bank, financial institution or trust company doing business in the Borough of Manhattan, The City of New York, and having a capital and surplus of at least $500 million and selected by the Board, and reasonably acceptable to the Investor Representative, and shall only be invested in Eligible Investments. “Eligible Investments” shall mean (i) obligations issued or guaranteed by the United States of America or any agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof); (ii) obligations (including certificates of deposit and banker’s acceptances) of any domestic commercial bank having capital and surplus in excess of $500 million; (iii) repurchase obligations for underlying securities of the type described in clause (i); and (iv) any other investments agreed to in writing by both the Investor Representative and the Company. If otherwise qualified, obligations of the escrow agent or any of its affiliates shall qualify as Eligible Investments.

          (8)      Any Investor Group Member not a party to this Agreement shall not be entitled to reimbursement from the Withholding Tax Escrow unless such Investor Group Member executes and delivers an undertaking in a form reasonably acceptable to the Company pursuant to which the Investor Group Member agrees to comply with Section 9 and this Annex A and acknowledges the limitations contained in this Annex A.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00160-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00160-of-00352.parquet"}]]