EXHIBIT 10.3
To: Polaroid Corporation; and
Polaroid (U.K.) Limited
Date:
Re: Amendment and Waiver Agreement relating to Facility Agreement dated
3 August 1999
We refer to the Amendment and Waiver Agreement (the "AMENDMENT AND WAIVER
AGREEMENT") dated 26 March 2001 entered into between Polaroid Corporation,
Polaroid (UK) Limited, Deutsche Banc Xxxx Xxxxx Inc., ABN AMRO Bank N.V. and
others in relation to the facility agreement dated 3 August 1999 between such
parties and referred to in the Amendment and Waiver Agreement as the UK Facility
Agreement.
Terms and expressions defined in the Amendment and Waiver Agreement and the UK
Facility Agreement shall, unless otherwise defined herein, bear the same
meanings in this letter.
We hereby agree to extend the waiver referred to in the Amendment and Waiver
Agreement so that the Waiver Expiry Time referred to therein shall be the
earlier of (i) 5.00 p.m. (New York City time) on 12 July 2001, (ii) the date on
which any waiver granted in relation to the US Facility Agreement pursuant an
amendment and restatement agreement dated 21 March, 2001, as supplemented on 20
April 2001 and on or around 15 May 2001, expires and (iii) such earlier date as
may be determined pursuant to the other provisions of the Amendment and Waiver
Agreement including Clause 5 thereof. Accordingly, the Waiver Period referred to
in the Amendment and Waiver Agreement shall be construed as being the period
beginning on February 16, 2001 and ending at such Waiver Expiry Time.
In addition we hereby agree that the reference to "first and second Fiscal
Quarters of Fiscal Year 2001" in Clause 2.1 of the Amendment and Waiver
Agreement shall be deleted and replaced by a reference to "first, second and
third Fiscal Quarters of Fiscal Year 2001".
The extension of the waiver and the above amendment is granted by the
Beneficiaries on the following conditions:-
(i) The Amendment and Waiver Agreement shall, with effect from the date on
which this waiver becomes effective, be amended as follows:-
(a) Clause 7 shall be deleted and replaced with the following:-
"7. INTEREST AND FEES
Each of the Guarantor and the Borrower agree that:-
(i) during the period commencing on 5 March 2001 and
ending on the date immediately preceding the date on
which this waiver becomes effective, the Facility Fee
Rate and the Applicable Margin shall be as set forth
in the table below, regardless of the Guarantor's
Long-Term Debt Ratings:-
Facility Fee Rate 0.75%
Applicable Margin 2.50%; and
(ii) (a) during the period commencing on the date on which
this waiver becomes effective and ending on the last
day of the Waiver Period (as extended by this letter)
and (b) if immediately after such Waiver Period ends
any Termination Event has occurred and is continuing,
during any period that any such Termination Event
continues to exist, the Facility Fee Rate and the
Applicable Margin shall be as set forth in the table
below, regardless of the Guarantor's Long-Term Debt
Ratings.
Facility Fee Rate 0.75%
Applicable Margin 3.50%; and
(b) The words "or any provision of any amendment, variation or
extension hereof" shall be inserted after the words "any
provision of this Agreement" in Clause 5.
(c) The reference to "the date hereof" in Clause 8 shall be
construed as being a reference to the date of this letter.
(ii) The UK Facility Agreement shall, with effect from the date on which
this waiver becomes effective, be amended as follows:-
(a) Each of the text in paragraph (A) of Clause 6.2 reading,
"shown in the quarterly balance provided under paragraph 14 of
Schedule 2 or, upon becoming available, in the latest
quarterly balance delivered to the Agent under Clause 18.1(f)"
shall be deleted and replaced with the following wording:-
"shown in the latest monthly balance delivered to the
Agent under Clause 18.1(f)";
(b) Paragraph (D) of Clause 6.2 shall be deleted and replaced with
the following:-
"The Term of the Advance must be a period of 1, 2 or
3 months or any other period as the Agent (on behalf
of, and with the consent of, all the Lenders) and the
Borrower may agree in writing. The Borrower will be
treated as choosing a period of one month if it fails
to select a period";
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(c) Clause 8.3 shall be deleted and replaced with the following:-
"8.3 Payment of Interest
The Borrower agrees to pay interest accrued on each
Advance in arrear on the last day of its Term. Where
the term is longer than three months the Borrower
also agrees to pay interest on the day three months
after the start of the Term."
(d) In paragraph (f) of Clause 18.1 the reference to "quarterly"
shall be deleted and replaced by a reference to "monthly" and
the reference to "45 days after the end of each quarter of its
financial year "shall be deleted and replaced by a reference
to "30 days after the end of each calendar month"; and
(e) The reference to "THIS AGREEMENT" in paragraph (B) of Clause
20.1 shall be deleted and replaced by a reference to "THE
FINANCE DOCUMENTS".
(iii) Each of the Borrower and the Guarantor agree to procure that, as soon
as possible but in any event no later than the date falling 30 days
after the date hereof, Polaroid Trading B.V. shall execute and deliver
to the Agent the Pledge of Polaroid Trading Receivables together with a
certified copy of evidence of corporate authority approving execution
and delivery of such document in a form satisfactory to the Agent.
(iv) The Guarantor agrees that it will:-
(a) comply with the obligations set out in Sections 4, 5, 6 and
7(c) of the second US supplemental waiver agreement entered
into or to be entered into on or around 15 May 2001 in respect
of the US Facility Agreement (the "SECOND US SUPPLEMENTAL
WAIVER AGREEMENT") as the same may be amended, varied, waived,
supplemented or otherwise superseded from time to time;
(b) deliver to each of the Beneficiaries by facsimile or e-mail,
no later than 9 a.m. (Amsterdam time) on the third Business
Day of each week, a weekly report in relation to the Borrower
and its subsidiaries (on a consolidated basis) and in a form
and level of detail specified by the Beneficiaries and agreed
with the Borrower setting forth the closing cash position for
the Borrower and its subsidiaries (on a consolidated basis)
for the week ending on the most recent Friday.
(v) The Guarantor agrees that, if reasonably requested by the Agent, it
will have a meeting to which all Lenders are invited on a date and in
location to be mutually agreed with the Agent, at which its senior
management will make a detailed presentation of its recent results of
operations and current financial condition and the current status of
its business and affairs, with a particular focus on (a) its liquidity,
(b) the status of the proposed asset-based refinancing previously
described to the Lenders and alternative strategic actions being
considered by the Guarantor and (c) a current analysis of the Operating
Plan referred in the Second US Supplemental Waiver Agreement.
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(vi) The Guarantor agrees that, if the Agent so requests, at least once a
month whilst this waiver or any extended one is effective, and more
frequently if reasonably requested by the Agent, senior management will
participate in a conference call with the Lenders, on a day and at a
time to be mutually agreed with the Agent, during which it will provide
an update on the matters described in paragraphs (a), (b) and (c) of
paragraph (iv) above. The Guarantor further agrees that in addition to
any such conference calls that are requested, promptly after it
receives a substantially final version of the McKinsey report described
at the Lenders' meeting with the Guarantor on 30 April 2001, it will,
initiate a conference call with the Lenders, on a day and at a time to
be mutually agreed with the Agent, during which senior management will
describe the major areas addressed by such report, the major
conclusions that they have taken from such report and what actions, if
any, the Guarantor proposes to take on account thereof.
(vii) The Guarantor agrees that the cumulative net cash flow for any Weekly
Period, as reported in the Weekly Report, will not be less than the
cumulative net cash flow projected for such Weekly Period in the Cash
Forecast by more than $5 million (each such term referred to in this
paragraph (vii) having the meaning ascribed to it in the Second US
Supplemental Waiver Agreement).
(viii) The Guarantor agrees that Consolidated Capital Expenditures (as defined
in the US Facility Agreement) will not, for each period beginning on 1
January 2001 and ending on the last day of a fiscal month specified
below, exceed the amount specified for such fiscal month below:
FISCAL MONTH AMOUNT
April 2001 $24,000,000
May 2001 $32,000,000
June 2001 $41,000,000
Clauses 11, 12, 14 and 15 of the Amendment and Waiver Agreement shall be deemed
incorporated, MUTATIS MUTANDIS, into this letter but so that and all
references:-
(i) in Clauses 11, 12 and 15 of the Amendment and Waiver Agreement to "this
Agreement" shall be construed as being references to this letter; and
(ii) in Clause 14 of the Amendment and Waiver Agreement to "this Agreement"
shall be construed as being references to "the Amendment and Waiver
Agreement and this letter".
All references in the Amendment and Waiver Agreement to "herein", "hereof",
"hereunder", "hereby", "this Agreement", "the waivers granted hereby", "the
waiver referred to in this Agreement", "the waiver contained herein", "this
waiver" and each other similar reference contained in the Amendment and Waiver
Agreement shall be construed as being references to the Amendment and Waiver
Agreement as amended by this letter.
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All other terms of the UK Facility Agreement and the Amendment and Waiver
Agreement shall, save as amended pursuant to this letter, remain in full force
and effect and the terms of the UK Facility Agreement shall be read as one with
the Amendment and Waiver Agreement and this letter.
Each of the Borrower and the Guarantor hereby repeat the representations and
warrants set out in Clause 9 of the Amendment and Waiver Agreement as if
references therein to "the date hereof" were references to the date of this
letter.
By its signature below, the Guarantor consents to the terms of this letter, and
acknowledges that this letter shall not alter, release, discharge or otherwise
affect any of its obligations under the UK Facility Agreement or any Finance
Document and hereby ratifies and confirms all of the Finance Documents to which
it is a party.
Each of the Guarantor and the Borrower confirm, by execution of this letter,
that all corporate or other action or steps required to authorise its entry
into, performance and delivery of each of the Amendment and Waiver Agreement and
this letter and the transactions contemplated thereby have been duly taken.
The Guarantor agrees that it shall, on the date of this letter, pay the Agent in
immediately available funds for the account of each Lender a waiver fee in an
amount equal to 0.25% of such Lender's Commitment (as of the opening of business
on the date hereof). This waiver fee is additional to any waiver fee previously
paid pursuant to the Waiver and Amendment Agreement.
This waiver shall become effective in accordance with the terms herein on the
date when Deutsche Bank AG, in its capacity as Agent under the UK Facility
Agreement, shall have received the following:-
(i) a counterpart hereof signed by each of the parties hereto or a
facsimile evidencing that such party has signed a counterpart
hereof; and
(ii) evidence satisfactory to it that the Lenders under the US
Facility Agreement shall have waived any defaults under the US
Facility Agreement until a date no earlier than 5 p.m. (New
York City time) on 12 July 2001 pursuant to a waiver
containing terms that, taken as a whole, are neither more
favourable to those lenders nor more restrictive or burdensome
to the Guarantor or the Borrower than the terms hereof.
Each of the Borrower and the Guarantor agree that this letter shall be
considered a "Finance Document" for all purposes of the UK Facility Agreement.
This letter shall be governed by and construed in accordance with English law.
Please indicate your agreement to the foregoing terms of this letter by
executing a counterpart hereof in the space provided below and returning it to
the Agent at the address notified by it to you.
For and on behalf of
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CO-ARRANGERS AND DOCUMENTATION AGENT
DEUTSCHE BANC XXXX XXXXX INC.
as Co-Arranger
By: /s/ XXXXX XXXXXX
----------------
Title: Vice President
By: /s/ XXXXX X. XXXXX
------------------
Title: Vice President
ABN AMRO BANK N.V.
as Co-Arranger and Documentation Agent
By: /s/ XXXXXX X. XXXXXXXX
----------------------
Title: Group Senior Vice President
By: /s/ XXXXXXX X. XXXXXXX
----------------------
Title: Group Vice President
LENDERS
ABN AMRO BANK N.V.
By: /s/ XXXXXX X. XXXXXXXX
----------------------
Title: Group Senior Vice President
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By: /s/ XXXXXXX X. XXXXXXX
----------------------
Title: Group Vice President
DEUTSCHE BANK A.G., LONDON BRANCH
By: /s/ XXXXX XXXXXX
----------------
Title: Vice President
By: /s/ XXXXX X. XXXXX
------------------
Title: Vice President
DEUTSCHE BANK A.G., AMSTERDAM BRANCH
By: /s/ XXXXX XXXXXX
----------------
Title: Vice President
By: /s/ XXXXX X. XXXXX
------------------
Title: Vice President
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Agreed to and accepted.
POLAROID CORPORATION
By: /s/ XXXX X. XXXXXXX
-------------------
Title: Vice President & Acting Chief
Financial Officer
Date: May 15, 2001
POLAROID (U.K.) LIMITED
By: /s/ XXXX X. XXXXXXX
-------------------
Title: Vice President & Acting Chief
Financial Officer
Date: May 15, 2001
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