Kodak 2011 Annual Report Download - page 50

obligations of the Borrowers and the Guarantors under the DIP Credit Agreement are secured by a super-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 Credit Agreement terminates and all outstanding commitments must be repaid on the earliest to occur of (i) July 20,
2013, (ii) date of the substantial consummation of certain reorganization plans and (iii) certain other events, including Events of Default and repayment in
full of the obligations pursuant to a mandatory prepayment.
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 the Company must achieve by specific target dates. In addition, the
Company and its subsidiaries are required to maintain consolidated Adjusted EBITDA (as defined in the DIP Credit Agreement) of not less than a specified
level for certain periods, with the specified levels ranging from $(130) million to $175 million depending on the applicable period. The Company and its
subsidiaries must also maintain minimum U.S. Liquidity (as defined in the DIP Credit Agreement) ranging from $100 million to $250 million depending on
the applicable period.
The Borrowers drew approximately $400 million in term loans under the DIP Credit Agreement on January 20, 2012 and issued approximately $102
million of letters of credit under the revolving credit facility. After the initial drawdown under the DIP Credit Agreement and based on the current
borrowing base calculation, as of January 20, 2012, the Borrowers had approximately $98 million available under the revolving credit facility and $300
million committed under the term loan facility. Availability under the DIP Credit Agreement may be further subject to borrowing base availability, reserves
and other limitations. Following the Final DIP Order issued on February 15, 2012, the Company borrowed the remaining $300 million of term loans.
The Company paid approximately $36 million to the Agent for arrangement, incentive, and customary agency administration fees in connection with the
DIP Credit Agreement and will pay to the Lenders participation fees and an unused amount fee and commitment fee as set forth in the DIP Credit
Agreement.
In connection with entering into the DIP Credit Agreement described above, on January 20, 2012, the Company repaid all obligations (other than
reimbursement obligations in respect of undrawn amounts, fees and interest in respect of certain letters of credit and secured agreements that remain
outstanding) and terminated all commitments under the Second Amended and Restated Credit Agreement (the “Prior Credit Agreement”), dated as of
April 26, 2011. In addition, the Company obtained the release of the liens granted to the agents for the benefit of the secured parties in connection with the
Prior Credit Agreement.
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