Kodak 2013 Annual Report Download - page 70

Table of Contents
Registration Rights Agreement
On the Effective Date, the Company and the Backstop Parties executed a registration rights agreement (the “Registration Rights Agreement”).
The Registration Rights Agreement, among other rights, provides the Backstop Parties with certain registration rights with respect to the
common stock.
Following the earlier of the filing of Kodak’s annual report on Form 10-K as of and for the year ending December 31, 2013 or June 30, 2014,
stockholders holding registrable securities representing 25% of the outstanding common stock as of the Effective Date may require the
Company to facilitate a registered offering of registrable securities; provided that if such registration has not been consummated prior to the
second anniversary of the Effective Date, stockholders holding registrable securities representing 10% of the outstanding common stock as of
the Effective Date may require the Company to facilitate such an offering (such offering, the “Initial Registration”). The registrable securities
requested to be sold in the Initial Registration must have an aggregate market value of at least $75 million.
Following the Initial Registration, stockholders holding 10% or more of the outstanding registrable securities may demand that the Company
file a shelf registration statement and effectuate one or more takedowns off of such shelf, or, if a shelf is not available, effectuate one or more
stand-alone registered offerings, provided that such non-shelf registered offerings or shelf takedowns may not be requested more than four
times and, in each case, shall include shares having an aggregate market value of at least $75 million. Beginning on the second anniversary of
the Effective Date, upon request of a stockholder, the Company shall amend its existing shelf registration statement to register additional
registrable securities as set forth in the Registration Rights Agreement. Stockholders also have the right to include their registrable securities in
the Initial Registration or any other non-shelf registered offering or shelf takedown of the common stock by the Company for its own account
or for the account of any holders of common stock.
KPP Global Settlement
The Company had previously issued (pre-petition) a guarantee to Kodak Limited (the “Subsidiary”) and KPP Trustees Limited (“KPP” or the
“Trustee”), as trustee for the U.K. Pension Plan. Under that arrangement, EKC guaranteed to the Subsidiary and the Trustee the ability of the
Subsidiary, only to the extent it became necessary to do so, to (1) make contributions to the U.K. Pension Plan to ensure sufficient assets
existed to make plan benefit payments, as they became due, if the Subsidiary otherwise would not have sufficient assets and (2) make
contributions to the U.K. Pension Plan such that it would achieve fully funded status by the funding valuation for the period ending
December 31, 2022.
The Subsidiary agreed to make certain contributions to the U.K. Pension Plan as determined by a funding plan agreed to by the Trustee. The
Subsidiary did not pay the annual contributions due by the funding plan for 2012 or 2013. The Trustee asserted an unsecured claim against the
Company of approximately $2.8 billion under the guarantee. The Subsidiary also asserted an unsecured claim under the guarantee for an
unliquidated amount. The Trustee also asserted an unliquidated claim against all Debtors, as financial support direction and contribution notice
claims.
On April 26, 2013, Eastman Kodak Company, the Trustee, Kodak Limited and certain other Kodak entities entered into a global settlement
agreement (the “Global Settlement”) that resolved all liabilities of Kodak with respect to the U.K. Pension Plan. The Global Settlement also
provided for the acquisition by KPP and/or its subsidiaries of certain assets, and the assumption by KPP and/or its subsidiaries of certain
liabilities of Kodak’s Personalized Imaging and Document Imaging businesses (together the “Business”) under a Stock and Asset Purchase
Agreement dated April 26, 2013 (the “SAPA”). The underfunded position of the U.K. Pension Plan of approximately $1.5 billion was included
in Liabilities held for sale presented in the Consolidated Statement of Financial Position as of December 31, 2012.
On August 30, 2013, the Company entered into an agreement (the “Amended SAPA”)
amending and restating the SAPA. The Amended SAPA
provides for, among other things, a series of deferred closings that will take place in certain foreign jurisdictions following the initial closing
under the Amended SAPA. The deferred closings will implement the legal transfer of the Business to KPP subsidiaries in the deferred closing
foreign jurisdictions in accordance with local law. Pursuant to the Amended SAPA, Kodak will operate the Business relating to the deferred
closing jurisdictions, subject to certain covenants, until the applicable deferred closing occurs, and will deliver to (or receive from) a KPP
subsidiary at each deferred closing a payment reflecting the actual economic benefit (or detriment) to the Business in the applicable deferred
closing jurisdiction(s) from September 1, 2013 through the time of the applicable deferred closing. Up to the time of the deferred closing, the
results of the operations of the Business will be reported as Earnings (loss) from discontinued operations, net of income taxes in the
Consolidated Statement of Operations and the assets and liabilities of the Business will be categorized as Assets held for sale or Liabilities held
for sale in the Consolidated Statement of Financial Position, as appropriate.
On the Effective Date, the following occurred pursuant to the Amended SAPA and Global Settlement:
PAGE 66
• The acquisition by KPP Holdco Limited (“KPP Holdco”), a wholly owned subsidiary of KPP, and certain direct and indirect
subsidiaries of KPP Holdco (together with KPP Holdco, the “KPP Purchasing Parties”), of certain assets of the Business, and the
assumption by the KPP Purchasing Parties of certain liabilities of the Business, for a total purchase price, exclusive of the
assumption of liabilities, of $650 million, of which a gross $525 million was paid in cash (net cash consideration of $325 million)
and the balance of which was settled by a $125 million note issued by the KPP (the
“
KPP Note
”
).