Kodak 2012 Annual Report Download - page 78

Table of Contents
debt resulted in a $90 million provision for expected allowed claims reflected in Reorganization items, net in the accompanying Consolidated
Statement of Operations.
No portion of the carrying value of Kodak
’s debt was considered Liabilities subject to compromise in the Statement of Financial Position as of
December 31, 2011, as the Debtors filed for chapter 11 bankruptcy protection on January 19, 2012. The amounts shown as Liabilities subject to
compromise as of December 31, 2011 in the table above were classified as long-term debt as of December 31, 2011 and are reflected as
liabilities subject to compromise above only for presentation purposes.
Annual maturities of debt outstanding at December 31, 2012, excluding debt classified as liabilities subject to compromise, were as follows:
DEBTOR-IN-POSSESSION CREDIT AGREEMENT
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”), with certain subsidiaries of the Company and
the Canadian Borrower signatory thereto (“Subsidiary Guarantors”), the lenders signatory thereto (the “Lenders”), Citigroup Global Markets
Inc., as sole lead arranger and bookrunner, and Citicorp North America, Inc., as syndication agent, administration agent and co-collateral agent
(the “Agent”). Pursuant to the terms of the DIP Credit Agreement, the Lenders agreed to lend in 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”). A portion of the revolving credit facility is available to the Canadian
Borrower and may be borrowed in Canadian Dollars. 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 and repayment in full of
the obligations pursuant to a mandatory prepayment.
The Company and each existing and future direct or indirect U.S. subsidiary of the Company (other than indirect U.S. subsidiaries held through
foreign subsidiaries and certain immaterial subsidiaries (if any)) (the “U.S. Guarantors”) have agreed to provide unconditional guarantees of the
obligations of the Borrowers under the DIP Credit Agreement. In addition, the U.S. Guarantors, the Canadian Borrower and each existing and
future direct and indirect Canadian subsidiary of the Canadian Borrower (other than certain immaterial subsidiaries (if any)) (the “Canadian
Guarantors” and, together with the U.S. Guarantors, the “Guarantors”) have agreed to provide unconditional guarantees of the obligations of the
Canadian Borrower under the DIP Credit Agreement. Under the terms of the DIP Credit Agreement, the Company has the option to have interest
on the loans provided thereunder accrue at a base rate or the then applicable LIBOR Rate (subject to certain adjustments and, in the case of the
term loan facility, a floor of 1.00%), plus a margin, (x) in the case of the revolving loan facility, of 2.25% for a base rate revolving loan or 3.25%
for a LIBOR rate revolving loan, and (y) in the case of the term loan facility, of 6.50% for a base rate loan and 7.50% for a LIBOR Rate loan.
The obligations of the Borrowers and the Guarantors under the DIP Credit Agreement are secured by a first-priority security interest in and lien
upon all of the existing and after-acquired personal property of the Company and the U.S. Guarantors, including pledges of all stock or other
equity interest in direct subsidiaries owned by the Company or the U.S. Guarantors (but only up to 65% of the voting stock of each direct foreign
subsidiary owned by the Company or any U.S. Guarantor in the case of pledges securing the Company’s and the U.S. Guarantors’ obligations
under the DIP Credit Agreement). Assets of the type described in the preceding sentence of the Canadian Borrower or any Canadian subsidiary
of the Canadian Borrower are similarly pledged to secure the obligations of the Canadian Borrower and Canadian Guarantor under the DIP
Credit Agreement. The security and pledges are subject to certain exceptions.
The DIP Credit Agreement limits, among other things, the Borrowers’ and the Subsidiary Guarantors’ ability to (i) incur indebtedness, (ii) incur
or create liens, (iii) dispose of assets, (iv) prepay subordinated indebtedness and make other restricted payments, (v) enter into sale and leaseback
transactions and (vi) modify the terms of any organizational documents and certain material contracts of the Borrowers and the Subsidiary
Guarantors. In addition to standard obligations, the DIP Credit Agreement provides for specific milestones that Kodak must achieve by specific
target dates. In addition, the Company and its subsidiaries are required to maintain consolidated
74
(in millions)
Carrying
Value
Maturity
Value
2013
$
699
$
706
2014
—
—
2015
—
—
2016
—
—
2017
—
—
2018 and thereafter
740
750
Total
$
1,439
$
1,456