Kodak 2012 Annual Report Download - page 64

Table of Contents
of various ongoing matters related to the Bankruptcy Filing. A reorganization plan determines the rights and satisfaction of claims of various
creditors and security holders, and is subject to the ultimate outcome of negotiations, events and Bankruptcy Court decisions.
On February 22, 2013, the Bankruptcy Court entered an order extending the period of time that the Debtors have the exclusive right to file a
reorganization plan and disclosure statement with the Bankruptcy Court through and including April 18, 2013. The extension concerns only the
length of time in which the Debtors have the sole right to file a reorganization plan, not the duration of the case.
The Debtor-In-Possession Credit Agreement (“DIP Credit Agreement” or “DIP”) stipulates that a draft of an acceptable reorganization plan and
disclosure statement is to be provided to the DIP agent on or prior to January 15, 2013 and filed with the court on or prior to February 15, 2013.
On January 15, 2013, the Company provided to the DIP agent a draft reorganization plan and disclosure statement. On February 6, 2013, the
Company entered into an amendment of the DIP Credit Agreement to extend the requirement to file a plan of reorganization and disclosure
statement with the Bankruptcy Court to April 30, 2013.
Under section 1125 of the Bankruptcy Code, the disclosure statement must be approved by the Bankruptcy Court before the Debtors may solicit
acceptance of the proposed reorganization plan. To be approved by the Bankruptcy Court, the disclosure statement must contain “adequate
information” that would enable a hypothetical holder to make an informed judgment about the plan. Once the disclosure statement is approved,
the Debtors may send the proposed reorganization plan, the disclosure statement and ballots to all creditors entitled to vote.
Kodak presently expects that any proposed reorganization plan will provide, among other things, settlement of the obligations under the DIP
Credit agreement, mechanisms for settlement of claims against the Debtors’ estates, treatment of the Company’s existing equity and debt
holders, and certain corporate governance and administrative matters pertaining to the reorganized Company. Any proposed reorganization plan
will be subject to revision prior to submission to the Bankruptcy Court based upon discussions with the Debtors’ creditors and other interested
parties, and thereafter in response to creditor claims and objections and the requirements of the Bankruptcy Code or the Bankruptcy Court. There
can be no assurance that the Debtors’ will be able to secure approval for the Debtors’ proposed reorganization plan from creditors or
confirmation from the Bankruptcy Court. In the event the Debtors’ do not secure approval or confirmation of the reorganization plan, any
outstanding DIP Credit Agreement principal and interest could become immediately due and payable.
DEBTOR
-IN-POSSESSION FINANCING
In connection with the Bankruptcy Filing, on January 20, 2012, the Company and Kodak Canada Inc. (the “Canadian Borrower” and, together
with the Company, the “Borrowers”) entered into a Debtor-in-Possession Credit Agreement, as amended on January 25, 2012, March 5,
2012, April 26, 2012, December 19, 2012, and February 6, 2013 (the “DIP Credit Agreement”). Pursuant to the terms of the DIP Credit
Agreement, the lenders agreed to lend to the Borrowers an aggregate principal amount of up to $950 million, consisting of up to $250 million
super-priority senior secured asset-based revolving credit facilities and an up to $700 million super-priority senior secured term loan facility
(collectively, the “Loans”).
The DIP Credit Agreement was approved on February 15, 2012 by the Bankruptcy Court. The DIP Credit Agreement
terminates and all outstanding obligations must be repaid on the earliest to occur of (i) July 20, 2013, (ii) the date of the substantial
consummation of certain reorganization plans, or (iii) certain other events, including Events of Default (as defined in the DIP Credit Agreement)
and repayment in full of the obligations pursuant to a mandatory prepayment.
On March 1, 2013, the Company and the DIP Credit Agreement agent agreed on terms for the solicitation of consents from the ABL lenders
under the existing DIP Credit Agreement which would consent to the incurrence of the Junior DIP Facility and among other related changes and
conforming changes to the Junior DIP Facility, would extend the maturity date of the DIP Credit Agreement from July 20, 2013 to
September 30, 2013, to match the maturity of the Junior DIP Facility. Refer to Note 11, “Short-Term Borrowings and Long-Term Debt” for
additional information on the DIP Credit Agreement amendments.
On February 28, 2013, the Company and members of the Steering Committee of the Second Lien Noteholders (the “Commitment Parties”)
agreed to structure and arrange a Junior DIP Facility with an aggregate principal amount of up to $848 million of term loans. The term loans
would consist of first lien term loans in the aggregate principal amount of $455 million (the “New Money Loans”) and junior lien term loans in
the aggregate principal amount of up to $375 million consisting of a dollar-for-dollar “roll-up” (such loans, the “Rolled-Up Loans”)
for a portion
of the amounts outstanding under the Company’s 2019 Senior Secured Notes issued March 15, 2011 and 2018 Senior Secured Notes issued
March 5, 2010 (the “Second Lien Notes”). The Bankruptcy Filing created an event of default under the Second Lien Notes. The Junior DIP
Facility will allow for payment of certain fees in cash or additional New Money Loans. The Junior DIP Facility would also contain provisions
allowing for a conversion of up to $654 million of the Junior DIP Facility loans upon emergence from chapter 11 into permanent exit financing
with a five year term, provided that Kodak meets certain conditions and milestones, including Bankruptcy Court approval of a reorganization
plan by September 15, 2013 with an effective date of no later than September 30, 2013; repayment of $200 million of principal amount of New
Money Loans; the resolution of all obligations owing in respect of the KPP on terms reasonably satisfactory to the “Required Lead Lenders” (as
defined in the agreement with the Commitment Parties); there shall have been an additional prepayment of loans in an amount equal to 75% of
U.S. Liquidity (as defined in the agreement with the Commitment Parties) above $200 million; and receiving at least $600 million in cash
proceeds through the disposition of certain specified assets that are not part of the Commercial Imaging business, including any combination of
the Document Imaging and Personalized Imaging businesses and trademarks and related rights provided that, consent of the Required Lead
Lenders
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