Exhibit 10
[EXECUTION COPY]
AMENDMENT NO. 1 TO
AMENDED AND RESTATED CREDIT AGREEMENT
AMENDMENT dated as of March 31, 1999 to the Amended and Restated Credit
Agreement dated as of December 11, 1998 (the "Credit Agreement") among POLAROID
CORPORATION (the "Company"), the LENDERS party thereto (the "Lenders"), XXXXXX
GUARANTY TRUST COMPANY OF NEW YORK, as Administrative Agent and Collateral Agent
(the "Agent"), and BANKBOSTON, N.A., a Co-Agent.
W I T N E S S E T H :
WHEREAS, pursuant to Section 5.21 of the Credit Agreement, the parties
hereto desire to amend the Credit Agreement to include certain covenants granted
to the holders of the Company's Bonds (as defined below) and to make certain
other changes relating to the Company's Sterling Dry Imaging Investments (as
defined below);
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. DEFINED TERMS; REFERENCES. Unless otherwise specifically
defined herein, each term used herein which is (i) defined in the Credit
Agreement shall have the meaning assigned to such term in the Credit Agreement
and (ii) defined in both the Credit Agreement and the Supplemental Indenture has
the meaning assigned to such term in the Credit Agreement. Each reference to
"hereof", "hereunder", "herein" and "hereby" and each other similar reference
and each reference to "this Agreement" and each other similar reference
contained in the Credit Agreement shall, after this Amendment becomes effective,
refer to the Credit Agreement as amended hereby.
SECTION 2. AMENDMENTS TO DEFINITIONS. (a) Section 1.01 of the
Credit Agreement is amended by inserting, in their appropriate alphabetical
position, the following definitions:
"Affiliate Transaction" has the meaning set forth in Section
5.23.
"Attributable Debt" in respect of a sale and leaseback
transaction means, at the time of determination, the present value
of the obligation of the lessee for net rental payments during the
remaining term of the lease included in such sale and leaseback
transaction including any period for
which such lease has been extended or may, at the option of the
lessor, be extended. Such present value shall be calculated using a
discount rate equal to the rate of interest implicit in such
transaction, determined in accordance with GAAP.
"Bonds" means the 11 1/2% Notes due 2006 issued by the Company
in an aggregate principal amount of $275,000,000.
"Supplemental Indenture" means the First Supplemental
Indenture dated as of February 17, 1999 by and between the Company
and State Street Bank and Trust Company, as Trustee, and relating to
the issuance and sale of the Bonds, as in effect on the date hereof,
which is supplemental to the Indenture dated as of January 9, 1997
by and between the Company and State Street Bank and Trust Company,
as Trustee.
"Sterling Dry Imaging Investments" means the equity
interests owned by the Company consisting of (i) 14% of the common
stock of SDI Holding Corp. and (ii) 100% of the preferred stock of
Sterling Dry Imaging Systems, Inc., a subsidiary of SDI Holding Corp.
(b) Section 1.01 of the Credit Agreement is amended by
inserting at the end thereof the following:
"The following terms, as used herein, have the meanings set forth in
the Supplemental Indenture as in effect on the date hereof:
Capital Stock
Disqualified Stock
Equity Interests
Fixed Charge Coverage Ratio (and, for purposes of this
definition only, all related definitions contained therein)
Stated Maturity"
SECTION 3. DEFINITION OF RESTRICTED PAYMENT. The definition of
"Restricted Payment" in Section 1.01 of the Credit Agreement is amended by
adding "and (iii) any payment on or with respect to or any purchase,
redemption, defeasance, acquisition or retirement for value of any Permitted
Subordinated Debt, except the scheduled payment of interest or principal at
the Stated Maturity thereof" immediately after clause (ii) therein and
replacing the "or" immediately before "(ii)" with a comma.
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SECTION 4. DEFINITION OF CORPORATE RATING. The definition of "Long-
Term Debt Rating" is amended to be named "Corporate Rating" and to read as
follows:
"Corporate Rating" means at any time (i) with respect to
Xxxxx'x, its senior implied rating of the Company at such time or, if
Xxxxx'x does not maintain a senior implied rating of the Company at
such time, the rating assigned by Xxxxx'x at such time to senior
unsecured long-term debt securities of the Company without third-party
credit enhancement and (ii) with respect to S&P, its corporate credit
rating of the Company at such time or, if S&P does not maintain a
corporate credit rating of the Company at such time, the rating
assigned by S&P at such time to the senior unsecured long-term debt
securities of the Company without third-party credit enhancement."
SECTION 5. AMENDMENT TO RESTRICTED PAYMENTS. Section 5.10 of the Credit
Agreement is amended by adding "(other than Restricted Payments described in
clause (iii) of the definition thereof)" immediately after the words "make any
Restricted Payment" in subsection (b) thereof and by adding the following new
subsection (c) thereto:
"(c) Neither the Company nor any Subsidiary will declare or
make any Restricted Payment after December 31, 1998 unless no Default
has occurred and is continuing or would result after giving effect
thereto."
SECTION 6. LIMITATION ON INTERCOMPANY DEBT. Clause (a)(ii) of Section
5.11 of the Credit Agreement is amended to read as follows:
"(ii) Debt owing to the Company or to a Subsidiary; PROVIDED
that Debt owing by the Company to a Subsidiary that is not a Subsidiary
Guarantor shall be permitted by this clause (ii) only to the extent
that such Debt is expressly subordinated to the prior payment in full
in cash of the principal of and interest (including Post-Petition
Interest) on the Loans and all other obligations of the Company under
the Financing Documents on terms and conditions reasonably satisfactory
to the Required Lenders;"
SECTION 7. TRANSACTIONS WITH AFFILIATES. Article 5 of the Credit
Agreement is amended to add an additional Section to read as follows:
"SECTION 5.23. TRANSACTION WITH AFFILIATES. The Company shall
not, and shall not permit any Subsidiary, to make any payment to, or
sell, lease, transfer or otherwise dispose of any of its properties or
assets to, or purchase any property or assets from, or enter into or
make or amend any transaction, contract, agreement understanding, loan,
advance or
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Guarantee with, or for the benefit of, any Affiliate (each, an
"Affiliate Transaction"), unless (i) such Affiliate Transaction is
on terms that are no less favorable to the Company or the relevant
Subsidiary than those that would have been obtained in a comparable
transaction by the Company or such Subsidiary with an unrelated
Person; and (ii) the Company delivers to the Administrative Agent:
(A) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration of less
than $10,000,000, a certificate of the Company's chief executive
officer or chief financial officer certifying that such Affiliate
Transaction complies with this Section 5.23, (B) with respect to any
Affiliate Transaction or series of related Affiliate Transaction
involving aggregate consideration equal to or in excess of
$10,000,000 and less than $50,000,000, a certificate of the
Company's chief executive officer or chief financial officer,
approved by the Company's Board of Directors, certifying that such
Affiliate Transaction complies with this Section 5.23 and that such
Affiliate Transaction has been approved by a majority of the
disinterested members of the Board of Directors; and (C) with
respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of
$50,000,000, an opinion as to the fairness to the Lenders of such
Affiliate Transaction from a financial point of view issued by an
accounting, appraisal or investment banking firm of national
standing.
The following items shall not be deemed to be Affiliate Transactions
and, therefore, will not be subject to the provisions of the prior
paragraph: (i) any employment agreement entered into by the Company or
any of its Subsidiaries in the ordinary course of business and
consistent with the past practice of the Company or such Subsidiary, as
the case may be; (ii) transactions between or among the Company and/or
its Subsidiaries; (iii) any sale or other issuance of Equity Interests
(other than Disqualified Stock) of the Company; (iv) payment of
reasonable fees and compensation and indemnity on behalf of officers,
directors, employees and consultants of the Company or any Subsidiary
of the Company who are not otherwise Affiliates of the Company or the
Subsidiary, as the case may be; (v) Restricted Payments that are
permitted by Section 5.10; (vi) reasonable payments, advances or loans
to employees or consultants for moving, entertainment and travel
expenses and similar expenditures in the ordinary course of business;
and (vii) transactions with joint ventures or alliances in
the ordinary course of business and otherwise in compliance with the
provisions of this Agreement on terms at least as favorable as might
reasonably have been obtained at such time from an unaffiliated party."
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SECTION 8. RESTRICTIONS ON PAYMENTS BY SUBSIDIARIES. Article 5 of the
Credit Agreement is amended to add an additional Section to read as follows:
"SECTION 5.24. RESTRICTIONS ON PAYMENTS BY SUBSIDIARIES. The
Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, create or permit to exist or become effective
any consensual encumbrance or restriction on the ability of any
Subsidiary to:
(a) pay dividends or make any other distributions on its
capital stock to the Company or any of its Subsidiaries, or with
respect to any other interest or participation in, or measured by,
its profits, or pay any debt owed to the Company or any of its
Subsidiaries;
(b) make any loans or advances to the Company or any of
its Subsidiaries; or
(c) transfer any of its properties or assets to the
Company or any of its Subsidiaries;
PROVIDED that the preceding restrictions will not apply to
encumbrances or restrictions existing under or by reason of (i) Debt
outstanding on the date hereof and any amendments, modifications,
restatements, renewals, increases, supplements, refundings,
replacements or refinancings thereof, PROVIDED that such amendments,
modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings are no more restrictive,
taken as a whole, with respect to such dividend and other payment
restrictions than those contained in such outstanding Debt; (ii) the
Supplemental Indenture; (iii) applicable law; (iv) any instrument
governing Debt or Capital Stock of a Person acquired by the Company
or any of its Subsidiaries as in effect at the time of such
acquisition (except to the extent such Debt was incurred in
connection with or in contemplation of such acquisition), which
encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired, PROVIDED that, in the
case of Debt, such Debt was permitted to be incurred pursuant to
Section 5.11; (v) customary non-assignment provisions in leases
entered into in the ordinary course of business; (vi) capital
leases, mortgage financings or purchase money obligations for
property acquired in the ordinary course of business that impose
restrictions on the property so acquired of the nature described in
clause (c) of the preceding paragraph; (vii) any agreement for the
sale or other disposition of a Subsidiary that restricts
distributions by that Subsidiary Guarantor pending its sale or other
disposition; (viii) Debt incurred to refund, replace or refinance
other
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Debt incurred in compliance with this Agreement, PROVIDED that the
restrictions contained in the agreements governing such Debt are no
more restrictive, taken as a whole, than those contained in the
agreements governing Debt being refinanced; (ix) Liens securing Debt
that limit the right of the debtor to dispose of the assets subject
to such Lien; (x) provisions with respect to the distribution or
disposition of assets or property in joint venture agreements, asset
sale agreements, stock sale agreements and other similar agreements
entered into in the ordinary course of business; (xi) restrictions
on cash or other deposits or net worth imposed by customers under
contracts entered into in the ordinary course of business; and (xii)
Debt under the Financing Documents."
SECTION 9. SALE-LEASEBACK TRANSACTIONS. Section 5.14 of the Credit
Agreement is amended by adding "(b)" immediately before the first sentence and
by inserting the following Section 5.14(a) immediately prior to Section 5.14(b):
"(a) The Company will not, and will not permit any of its
Subsidiaries to, enter into any sale and leaseback transaction;
PROVIDED that the Company or any Subsidiary may enter into a sale and
leaseback transaction if:
(i) The Company, or that Subsidiary, as applicable, could
have incurred Debt in an amount equal to the Attributable Debt
relating to such sale and leaseback transaction under (A) the Fixed
Charge Coverage Ratio test in the first paragraph of Section 15(c)
of the Supplemental Indenture or (B) Section 15(c)(xii) of the
Supplemental Indenture, PROVIDED that, in the case of this clause
(B), the aggregate amount of Attributable Debt relating to all such
sale and leaseback transactions shall not exceed $50,000,000 at any
one time outstanding;
(ii) the gross cash proceeds of that sale and leaseback
transaction are at least equal to the fair market value of the
property that is the subject of the sale and leaseback transaction;
and
(iii) the transfer of assets in that sale and leaseback
transaction is permitted by this Agreement, and the Company or such
Subsidiary applies the proceeds of such transaction in compliance
with Section 2.17 of this Agreement."
SECTION 10. ADDITIONAL EVENTS OF DEFAULT. Section 6.01(b) is
amended to add after the reference to Section 5.20 thereof, ", or in Section
5.23 or 5.24".
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SECTION 11. CALCULATION OF INTEREST COVERAGE RATIO, DEBT TO EBITDA
RATIO. The Lenders hereby agree that for purposes of calculating compliance with
the covenants contained in Section 5.07 and 5.08(a) of the Credit Agreement,
Consolidated Net Income for any period shall be calculated on a PRO-FORMA basis
excluding any non-cash charges of up to $40,000,000, in the aggregate, taken
after December 31, 1998 and before December 31, 1999, for losses incurred by the
Company with respect to the sale or other disposition of its equity interests in
the Sterling Dry Imaging Investments or any write-down in the carrying value
thereof.
SECTION 12. AMENDMENT OF PRICING SCHEDULE. The Pricing Schedule is
amended to replace "Long-Term Debt Ratings" in the second paragraph thereof with
the words "Corporate Ratings".
SECTION 13. REPRESENTATIONS OF BORROWER. The Borrower represents and
warrants that (i) the representations and warranties of the Borrower set forth
in Article 4 of the Credit Agreement will be true on and as of the Amendment
Effective Date and (ii) no Default will have occurred and be continuing on such
date.
SECTION 14. CONSENT BY GUARANTORS. By its signature below, each
Guarantor hereby consents to this Amendment, and acknowledges that this
Amendment shall not alter, release, discharge or otherwise affect any of its
obligations under the Credit Agreement or any Financing Document (as defined in
the Credit Agreement), and hereby ratifies and confirms all of the Financing
Documents (as so defined) to which it is a party.
SECTION 15. GOVERNING LAW. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 16. COUNTERPARTS. This Amendment may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
SECTION 17. EFFECTIVENESS. This Amendment shall become effective
as of the date hereof on the date when the following conditions are met (the
"Amendment Effective Date"):
(a) the Agent shall have received from each of the
Borrower, each Guarantor and the Required Lenders a counterpart
hereof signed by such party or facsimile or other written
confirmation (in form satisfactory to the Agent) that such party has
signed a counterpart hereof; and
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(b) the Agent shall have received an amendment fee for the
account of each Lender that has evidenced its agreement hereto as
provided in clause (a) by 5:00 p.m. (New York City time) on the
later of (i) April 2, 1999 and (ii) the date the Agent issues a
notice to the Lenders saying that the Required Lenders have so
evidenced their agreement hereto, in an amount equal to 0.05% of
such Lender's Commitment.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first above written.
POLAROID CORPORATION
By:
-------------------------------------
Name:
Title:
000 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Treasurer
Facsimile number:
INNER CITY, INC.
By:
-------------------------------------
Name:
Title:
POLAROID ASIA PACIFIC LIMITED
By:
-------------------------------------
Name:
Title:
POLAROID CARIBBEAN
CORPORATION
By:
-------------------------------------
Name:
Title:
POLAROID DIGITAL SOLUTIONS, INC.
By:
-------------------------------------
Name:
Title:
POLAROID EYEWEAR, INC.
By:
-------------------------------------
Name:
Title:
POLAROID ID SYSTEMS, INC.
By:
-------------------------------------
Name:
Title:
POLAROID MALAYSIA LIMITED
By:
-------------------------------------
Name:
Title:
PRD CAPITAL INC.
By:
-------------------------------------
Name:
Title:
XXXXXX GUARANTY TRUST
COMPANY OF NEW YORK
By:
-------------------------------------
Name:
Title:
ABN AMRO BANK N.V.
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
BANKBOSTON, N.A.
By:
-------------------------------------
Name:
Title:
TRANSAMERICA BUSINESS CREDIT
CORPORATION
By:
-------------------------------------
Name:
Title:
FOOTHILL CAPITAL (L.A.)
By:
-------------------------------------
Name:
Title:
DEUTSCHE BANK AG, NEW YORK
AND/OR CAYMAN ISLANDS
BRANCHES
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF
CHICAGO
By:
-------------------------------------
Name:
Title:
SENIOR DEBT PORTFOLIO
By: Boston Management and Research,
as Investment Advisor
By:
-------------------------------------
Name:
Title:
THE SUMITOMO BANK, LIMITED,
NEW YORK BRANCH
By:
-------------------------------------
Name:
Title:
WACHOVIA BANK, N.A.
By:
-------------------------------------
Name:
Title:
FLEET NATIONAL BANK
By:
-------------------------------------
Name:
Title:
MELLON BANK, N.A.
By:
-------------------------------------
Name:
Title:
TEXTRON FINANCIAL CORPORATION
By:
-------------------------------------
Name:
Title:
PNC BANK, NATIONAL ASSOCIATION
By:
-------------------------------------
Name:
Title:
KZH STERLING LLC
By:
-------------------------------------
Name:
Title:
(NY) 27009/480/AMEND/amend1.xx
XXXXXX GUARANTY TRUST
COMPANY OF NEW YORK, as
Administrative Agent
By:
-------------------------------------
Name:
Title:
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Loan Department
Telex number: 177615 MGT UT
Facsimile number: 000-000-0000
BANKBOSTON, N.A., as Co-Agent
By:
-------------------------------------
Name:
Title:
000 Xxxxxxx Xxxxxx
Mail Stop: 01-10-01
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx
Telex number: 4996527
Facsimile number: 000-000-0000
XXXXXX GUARANTY TRUST
COMPANY OF NEW YORK, as
Collateral Agent
By:
-------------------------------------
Name:
Title:
c/o X.X. Xxxxxx Services Inc.
000 Xxxxxxx Xxxxxxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx Xxxxxxx
Facsimile number: (000) 000-0000
