Kodak 2010 Annual Report Download - page 63

61
Annual maturities (in millions) of long-term debt outstanding at December 31, 2010 were as follows:
Carrying
Principal
Value
Amount
2011
$ 50
$ 50
2012
45
50
2013
341
350
2014
-
-
2015
-
-
2016 and thereafter
809
913
Total
$ 1,245
$ 1,363
Senior Secured Notes due 2018
On March 5, 2010, the Company issued $500 million of aggregate principal amount of 9.75% senior secured notes due March 1,
2018 (the “2018 Senior Secured Notes”). The Company will pay interest at an annual rate of 9.75% of the principal amount at
issuance, payable semi-annually in arrears on March 1 and September 1 of each year, beginning on September 1, 2010.
Upon issuance of the 2018 Senior Secured Notes, the Company received net proceeds of approximately $490 million ($500 million
aggregate principal less $10 million stated discount). The proceeds were used to repurchase all of the Senior Secured Notes due
2017 and to fund the tender of $200 million of the 7.25% Senior Notes due 2013.
In connection with the 2018 Senior Secured Notes, the Company and the subsidiary guarantors (as defined below) entered into an
indenture, dated as of March 5, 2010, with Bank of New York Mellon as trustee and collateral agent (the “Indenture”).
At any time prior to March 1, 2014, the Company will be entitled at its option to redeem some or all of the 2018 Senior Secured
Notes at a redemption price of 100% of the principal plus accrued and unpaid interest and a “make-whole” premium (as defined in
the Indenture). On and after March 1, 2014, the Company may redeem some or all of the 2018 Senior Secured Notes at certain
redemption prices expressed as percentages of the principal plus accrued and unpaid interest. In addition, prior to March 31, 2013,
the Company may redeem up to 35% of the 2018 Senior Secured Notes at a redemption price of 109.75% of the principal plus
accrued and unpaid interest using proceeds from certain equity offerings, provided the redemption takes place within 120 days after
the closing of the related equity offering and not less than 65% of the original aggregate principal remains outstanding immediately
thereafter.
Upon the occurrence of a change of control, each holder of the 2018 Senior Secured Notes has the right to require the Company to
repurchase some or all of such holder’s 2018 Senior Secured Notes at a purchase price in cash equal to 101% of the principal
amount thereof, plus accrued and unpaid interest, if any, to the repurchase date.
The Indenture contains covenants limiting, among other things, the Company’s ability and the ability of the Company’s restricted
subsidiaries (as defined in the Indenture) to (subject to certain exceptions and qualifications): incur additional debt or issue certain
preferred stock; pay dividends or make distributions in respect of capital stock or make other restricted payments; make principal
payments on, or purchase or redeem subordinated indebtedness prior to any scheduled principal payment or maturity; make certain
investments; sell certain assets; create liens on assets; consolidate, merge, sell or otherwise dispose of all or substantially all of the
Company’s and its subsidiaries’ assets; enter into certain transactions with affiliates; and designate the Company’s subsidiaries as
unrestricted subsidiaries. The Company was in compliance with these covenants as of December 31, 2010.
The 2018 Senior Secured Notes are fully and unconditionally guaranteed (the “guarantees”) on a senior secured basis by each of
the Company’s existing and future direct or indirect 100% owned domestic subsidiaries, subject to certain exceptions (the
“Subsidiary Guarantors”). The 2018 Senior Secured Notes and guarantees are secured by second-priority liens, subject to permitted
liens, on substantially all of the Company’s domestic assets and substantially all of the domestic assets of the Subsidiary Guarantors
pursuant to a security agreement entered into with Bank of New York Mellon as second lien collateral agent on March 5, 2010. The
carrying value of the assets pledged as collateral at December 31, 2010 was approximately $2 billion.
The 2018 Senior Secured Notes are the Company’s senior secured obligations and rank senior in right of payment to any future
subordinated indebtedness; rank equally in right of payment with all of the Company’s existing and future senior indebtedness; are
effectively senior in right of payment to the Company’s existing and future unsecured indebtedness, are effectively subordinated in
right of payment to indebtedness under the Company’s Amended Credit Agreement (as defined below) to the extent of the collateral
securing such indebtedness on a first-priority basis; and effectively are subordinated in right of payment to all existing and future
indebtedness and other liabilities of the Company’s non-guarantor subsidiaries.