Exhibit 10.2(b)
To: Polaroid Holding Corporation (the "OBLIGORS' AGENT")
0000 Xxxx Xxxxxx
Xxxxxxx,
Xxxxxxxxxxxxx 00000
Attn: Treasurer
14 November 2003
SIXTH WAIVER AND AMENDMENT LETTER
Ladies and Gentlemen:
1 The Obligors' Agent, Polaroid Corporation (formerly known as OEP Imaging
Operating Corporation) ("POLAROID"), Polaroid Holding Corporation
(formerly known as OEP Imaging Corporation), and certain subsidiaries of
Polaroid (collectively, the "POLAROID GROUP") entered into a $100
million credit agreement dated July 29, 2002 with a group of lenders led
by Citicorp USA, Inc. as Domestic Administrative Agent, Domestic
Collateral Agent and Foreign Syndication Agent and Bank of America, N.A.
as Foreign Administrative Agent, Foreign Collateral Agent (the
"COLLATERAL AGENT") and Domestic Syndication Agent (as amended by a
first waiver and amendment letter dated August 30, 2002, a second waiver
and amendment letter dated March, 2003, a third waiver and amendment
letter dated April, 2003, a fourth waiver letter - in two parts, both
dated May, 2003, and a fifth waiver and amendment letter dated August 5,
2003, and as may be amended, restated or supplemented from time to time,
collectively the "CREDIT AGREEMENT"). Pursuant to the terms of the
Credit Agreement, the Polaroid Group entered into certain security
arrangements in favour of the Collateral Agent on its own behalf and on
behalf of each of the other Lenders.
2 Unless otherwise defined in this Letter, terms and expressions defined
in (including by reference to another document) the Credit Agreement
shall have the same meanings when used in this Letter.
3 Polaroid has requested certain amendments to the Credit Agreement, INTER
ALIA, to:
3.1 create a $100,000,000 discretionary basket that Polaroid may use
for
3.1.1 acquisitions or other equity investments, including
without limitation, investments in joint ventures;
3.1.2 additional Capital Expenditures or IDP Venture
Expenditures; or
3.1.3 the redemption of preferred stock;
3.2 reduce the frequency of delivering Borrowing Base Certificates,
to the extent and only to the extent that Excess Availability
remains above $25,000,000;
3.3 make certain adjustments to the pricing grids for loans under
the Revolving Credit Facilities;
3.4 revise the frequency of delivering reports of new Leases and
delivering statutory accounts for Foreign Subsidiaries;
3.5 amend the definitions of each of "Available Credit" and "Excess
Availability" to clarify that Available Cash is included in the
calculation thereof;
3.6 amend the final date in the tables for Sections 5.6 (MAXIMUM IDP
VENTURE EXPENDITURE) and 5.7 (CAPITAL EXPENDITURES) to coincide
with the termination of the Facilities; and
3.7 amend the definition of "Tangible Net Worth" to allow for
amounts of any permitted redemption of preferred stock.
4 On our own behalf and on behalf of each of the other Lenders, we set out
the following amendments to be made to the Credit Agreement:
4.1 The following definitions shall be inserted in the correct
alphabetical order in Section 1.1 (DEFINED TERMS) of the Credit
Agreement:
"ACQUISITION CONSIDERATION" means, in relation to Acquisition
Assets, the equivalent in Dollars of the aggregate of the
consideration (including any non-cash consideration and all
costs and expenses incurred in connection therewith) paid and
payable (whether contingent or otherwise) and the gross
liabilities in respect of Indebtedness assumed or to be assumed
or refinanced or which remain subsisting in respect of such
Acquisition Assets following their acquisition.
"ADDITIONAL CAPITAL EXPENDITURES" means, at any time and from
time to time, Capital Expenditures:
(a) which are designated in writing to the Administrative
Agents by any member of the Group as being in addition
to the amount of Capital Expenditures otherwise
permitted under Section 5.7 (CAPITAL EXPENDITURES); and
(b) as to which the Administrative Agents have received, at
least 5 Business Days prior to any such Additional
Capital Expenditure being made, a certificate signed by
the chief financial officer of the Company demonstrating
that such Additional Capital Expenditure will be funded
from the utilisation of surplus cash on the consolidated
balance sheet of the Group (i.e. not from any Loans).
"ADDITIONAL IDP VENTURE EXPENDITURES" means, at any time and
from time to time, IDP Venture Expenditures:
(a) which are designated in writing to the Administrative
Agents by any member of the Group as being in addition
to the amount of IDP Venture Expenditures otherwise
permitted under Section 5.6 (MAXIMUM IDP VENTURE
EXPENDITURE); and
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(b) as to which the Administrative Agents have received, at
least 5 Business Days prior to any such Additional IDP
Venture Expenditure being made, a certificate signed by
the chief financial officer of the Company demonstrating
that such Additional IDP Venture Expenditure will be
funded from the utilisation of surplus cash on the
consolidated balance sheet of the Group (i.e. not from
any Loans).
"AVAILABLE DISCRETIONARY BASKET AMOUNT" means, as of any date of
determination, an amount equal to (a) the Discretionary Basket
Amount MINUS (b) the aggregate amount of any (i) Permitted
Acquisitions/Investments, (ii) Additional IDP Venture
Expenditures, (iii) Additional Capital Expenditures and (iv)
Permitted Stock Redemptions, which in each case have been
designated in writing to the Administrative Agents as being made
out of the Discretionary Basket Amount.
"DISCRETIONARY BASKET AMOUNT" means $100,000,000 (or its
equivalent in other currencies).
"JOINT VENTURE" means any joint venture entity, whether a
company, unincorporated firm, undertaking, association, joint
venture or partnership or any other entity.
"PERMITTED ACQUISITIONS/INVESTMENTS" means the acquisition or
investment by a member of the Group of any company or in a
business (whether by way of shares or assets and including
investments in Permitted Joint Ventures) ("ACQUISITION ASSETS")
which carries on a business which is similar or related to the
business of the Group carried on as of the Closing Date where:
(a) the aggregate of the Acquisition Consideration in
respect of Acquisition Assets is not at any time, when
aggregated with all other Acquisition Consideration,
greater than the Available Discretionary Basket Amount;
and
(b) the cash element of any proposed Acquisition
Consideration is provided by further equity
contributions by the Original Investors or the
utilisation of surplus cash on the consolidated balance
sheet of the Group (i.e. not from any Loans); and
(c) the proposed Acquisition Assets, for the period of the
twelve months prior to the date of their acquisition,
had EBITDA (utilising the definition of EBITDA) which
was:
(1) positive; or
(2) negative, but if negative, then notwithstanding
anything to the contrary in this Agreement the
negative EBITDA in respect of such Acquisition
Assets (when aggregated with the negative EBITDA
in respect of other Acquisition Assets which had
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negative EBITDA on the date of acquisition
thereof) shall not exceed $25,000,000.
The Company shall notify the Administrative Agents of the amount
of such EBITDA and aggregate EBITDA by a certificate signed by
the chief executive officer and a financial officer of the
Company and supported by such evidence as the Administrative
Agents may reasonably request;
PROVIDED THAT, with respect to each of the foregoing paragraphs
(a) through (c):
(i) at least 5 Business Days prior to entering into any
acquisition or investment (including Permitted Joint
Ventures) for which the Acquisition Consideration is
greater than $25,000,000 (or its equivalent in other
currencies), the Administrative Agents shall have
received from the Company revised financial projections,
reflecting the proposed Acquisition Assets therein which
demonstrate that on a PRO FORMA basis for the 12 months
following the completion of the acquisition none of the
financial covenants in Article V (FINANCIAL COVENANTS)
will be breached prior to the Revolving Credit
Termination Date and that no Default or Event of Default
will arise under Section 9.1 (EVENTS OF DEFAULT),
accompanied by a certificate signed by the chief
executive officer and a financial officer of the Company
(x) confirming that they believe that the assumptions
(upon which the forecasts and projections in such
revised financial projections are based) taken as a
whole, and those forecasts and projections, are fair and
reasonable and confirming that, in making those
assumptions and forming those forecasts and projections
the Company has taken full and proper account of all
contingent liabilities relating to the Acquisition
Assets to be acquired pursuant to the proposed
acquisition and the Company has, where it is considered
that such contingent liabilities may become actual
liabilities, attributed a proper amount to such
contingent liabilities in forming those forecasts and
projections and (y) certifying that at all times during
the following 12 months the completion of the
acquisition would not lead to there being less than
$25,000,000 of Available Credit;
(ii) at least 5 Business Days prior to entering into any
acquisition or investment (including Permitted Joint
Ventures) for which the Acquisition Consideration is
greater than $25,000,000 (or its equivalent in other
currencies) there has been provided to the
Administrative Agents copies of all accountants',
environmental and other reports obtained by any member
of the Group in respect of such Acquisition Assets;
(iii) in respect of any acquisition for which the Acquisition
Consideration is $25,000,000 (or its equivalent in other
currencies) or less, the Company certifies that (x) no
Default or Event of Default will arise under Section 9.1
(EVENTS OF DEFAULT) as a result of the proposed
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acquisition of the Acquisition Assets and (y) at all
times during the following 12 months the completion of
the acquisition would not lead to there being less than
$25,000,000 of Available Credit; and
(iv) at least 5 Business Days prior to entering into any
acquisition or investment (including Permitted Joint
Ventures) the Company shall deliver to the
Administrative Agents a certificate signed by the chief
financial officer of the Company demonstrating that such
acquisition or investment will be funded from further
equity contributions by the Original Investors or the
utilisation of surplus cash on the consolidated balance
sheet of the Group (i.e. not from any Loans).
"PERMITTED JOINT VENTURE" means investments in any Joint Venture
or similar arrangement subsisting with any person (which is not
an Affiliate), PROVIDED THAT (i) each Joint Venture is in a
business which is similar or related to the business of the
Group carried on as of the Closing Date, (ii) each Joint Venture
entity is incorporated with limited liability and there is no
recourse to a member of the Group other than for the relevant
investment permitted in accordance with this definition, (iii)
the interest of the relevant member of the Group in each Joint
Venture entity constitutes not less than 20% or more than 50% of
the total interests therein, (iv) the relevant member of the
Group has management control over each Joint Venture entity and
(v) the Administrative Agents are provided with a copy of the
Joint Venture agreement and evidence satisfactory to it (acting
reasonably) as to the proposed investment amount.
"PERMITTED STOCK REDEMPTIONS" means, in respect of the preferred
stock of the Company described in paragraph (a) of Clause 4.3
(OWNERSHIP OF LOAN PARTIES AND SUBSIDIARIES), one or more
redemptions of or the distribution or payment of any dividends
to the shareholders of such preferred stock, PROVIDED that:
(a) any such redemption or payment has been designated in
advance in writing to the Administrative Agents by the
Company or the Obligor's Agent; and
(b) at least 5 Business Days prior to making any such
redemption or payment the Company shall deliver to the
Administrative Agents a certificate signed by the chief
executive officer and a financial officer of the Company
demonstrating that such redemption or payment will be
funded from the utilisation of surplus cash on the
consolidated balance sheet of the Group (i.e. not from
any Loans).
4.2 The definition of "Available Cash" in Section 1.1 (DEFINED
TERMS) of the Credit Agreement shall be amended and restated in
its entirety as follows:
"AVAILABLE CASH" means, at any time and from time to time, an
amount equal to 100% of the unrestricted cash and Cash
Equivalents of the Group which are either (a) pledged to the
relevant Administrative Agent pursuant to the Collateral
Documents or (b) on deposit in an account maintained with either
of the Administrative Agents.
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4.3 The definition of "Available Credit" in Section 1.1 (DEFINED
TERMS) of the Credit Agreement shall be amended and restated in
its entirety as follows:
"AVAILABLE CREDIT" means, on any date of determination, the sum
of (a) the US Available Credit at such time, PLUS (b) the
Foreign Available Credit at such time, PLUS (c) the Available
Cash at such time.
4.4 The definition of "Excess Availability" in Section 1.1 (DEFINED
TERMS) of the Credit Agreement shall be amended and restated in
its entirety as follows:
"EXCESS AVAILABILITY" means, on any date of determination and
without double counting, the sum of (a) the Total Availability
of the Group at such time (but not to exceed the aggregate
Revolving Credit Commitments at such time), PLUS (b) the
Available Cash at such time, LESS (c) the US Revolving Credit
Outstandings at such time, LESS (d) the Foreign Revolving Credit
Outstandings at such time.
4.5 The definition of "Fixed Charges" in Section 1.1 (DEFINED TERMS)
of the Credit Agreement shall be amended and restated in its
entirety as follows:
"FIXED CHARGES" means, for any Person for any period, the sum of
(a) the Cash Interest Expense of such Person for such period,
(b) the principal amount of Financial Covenant Debt of such
Person and each of its Subsidiaries determined on a consolidated
basis in conformity with GAAP having a scheduled due date during
such period and (c) all cash dividends payable by such Person
and its Subsidiaries on Stock (other than a dividend qualifying
as a Permitted Stock Redemption) in respect of such period to
Persons other than such Person and its Subsidiaries.
4.6 The definition of "APPLICABLE MARGIN" in Section 1.1 (DEFINED
TERMS) of the Credit Agreement shall be amended by inserting the
following table in the place of the tables set forth for each of
paragraphs (a) and (b) thereof:
BASE RATE EUROCURRENCY
LEVERAGE RATIO LOANS RATE LOANS
-------------------------------------------------------------------------------------------
Greater than or equal to 1.50 to 1 2.50% 3.50%
Less than 1.50 to 1 and equal to or
greater than 1.25 to 1 2.25% 3.25%
Less than 1.25 to 1 and equal to or
greater than 1.00 to 1 2.00% 3.00%
Less than 1.00 to 1 1.25% 2.25%
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4.7 The definition of "UNUSED COMMITMENT FEE RATE" in Section 1.1
(DEFINED TERMS) of the Credit Agreement shall be amended by
inserting the following table in the place of the table set
forth therein:
UNUSED COMMITMENT
LEVERAGE RATIO FEE
-------------------------------------------------------------------
Greater than or equal to 1.00 to 1 0.50%
Less than 1.00 to 1 0.25%
4.8 The definition of "TANGIBLE NET WORTH" in Section 1.1 (DEFINED
TERMS) of the Credit Agreement shall be amended by inserting the
following at the end of the definition after the word "GAAP":
", AND INCLUDING in the determination of Total Assets of such
Person at such date, any actual amount or liability recorded by
such Person in conformity with GAAP that is related to the
Permitted Stock Redemptions under this Agreement".
4.9 Section 5.6 (MAXIMUM IDP VENTURE EXPENDITURE) of the Credit
Agreement shall be amended by:
4.9.1 deleting the reference to the date "August 31, 2005" in
the final row of the table and inserting the date "July
31, 2005" in its place; and
4.9.2 deleting the proviso at the end thereof and inserting in
its place the following proviso:
"PROVIDED, HOWEVER, that in addition to the maximum IDP
Venture Expenditures set forth above, the Group shall be
permitted to make Additional IDP Venture Expenditures
from time to time not to exceed the Available
Discretionary Basket Amount at such time."
4.10 Section 5.7 (CAPITAL EXPENDITURES) of the Credit Agreement shall
be amended by:
4.10.1 deleting the reference to the date "August 31, 2005" in
the final row of the table and inserting the date "July
31, 2005" in its place; and
4.10.2 deleting the proviso at the end thereof and inserting in
its place the following proviso:
"PROVIDED, HOWEVER, that in addition to the maximum
Capital Expenditures set forth above, the Group shall be
permitted to make Additional Capital Expenditures from
time to time not to exceed the Available Discretionary
Basket Amount at such time."
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4.11 Section 6.1(j) (STATUTORY ACCOUNTS) of the Credit Agreement
shall be amended and restated in its entirety as follows:
"(j) STATUTORY ACCOUNTS. On or before the end of the
first Fiscal Quarter following the filing of any statutorily
required management accounts of each applicable Foreign
Subsidiary, copies certified by such Foreign Subsidiary as true
and correct of any such management accounts."
4.12 The first sentence of paragraph (a) of Section 6.12 (BORROWING
BASE DETERMINATION) of the Credit Agreement shall be amended and
restated in its entirety as follows:
"The Company shall deliver, as soon as available and in any
event not later than the Required Borrowing Base Certificate
Delivery Date, a Borrowing Base Certificate in respect of the US
Borrowing Base and the Foreign Borrowing Base, as of the last
day of the immediately preceding Borrowing Base Certificate
Period, executed by a Responsible Officer of the Company."
4.13 Section 6.12 (BORROWING BASE DETERMINATION) of the Credit
Agreement shall be amended by adding the following new paragraph
(e) immediately after the current paragraph (d):
"(e) As used in this Section 6.12:
(i) "REQUIRED BORROWING BASE CERTIFICATE
DELIVERY DATE" means the third Business Day of the third fiscal
week following the end of each fiscal month of each Fiscal Year
(calculated as of the last day of such just completed fiscal
month), PROVIDED, HOWEVER, if Excess Availability is less than
$25,000,000 at any time, "REQUIRED BORROWING BASE CERTIFICATE
DELIVERY DATE" means the third business day of each calendar
week thereafter (calculated as of the last day of the
immediately preceding fiscal week) until such time as Excess
Availability is $25,000,000 or more for 15 consecutive days,
provided further, however, that if at any time the Borrowing
Base Certificate is due weekly "Required Borrowing Base
Certificate delivery date" for the first fiscal week of any
fiscal month shall be the sixth Business Day following the end
of such first fiscal week; and
(ii) "BORROWING BASE CERTIFICATE PERIOD"
means the monthly period (in the case of clause (a) above) or
the weekly period (in the case of clause (b) above) covered by
the applicable Borrowing Base Certificate."
4.14 Paragraph (a)(v) of Section 7.14 (Real Property) of the Credit
Agreement shall be amended and restated in its entirety as
follows:
"(v) notify the Administrative Agents at the end of
each Fiscal Quarter in which any Group Member takes possession
of, or becomes liable under, any new leased premises or Lease."
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4.15 Section 8.3 (INVESTMENTS) of the Credit Agreement shall be
amended and restated by:
4.15.1 deleting the word "and" at the end of subparagraph
(g)(iii) thereof;
4.15.2 deleting the period and replacing it with a semi-colon
and the word "and" at the end of subparagraph (h)
thereof; and
4.15.3 adding the following new subparagraph (i):
"(i) Investments constituting Permitted Acquisitions/
Investments in the amounts set forth in and in accordance with
the definition thereof, PROVIDED that (i) in the case of an
Investment in shares of a company organized in a jurisdiction in
which assets of any other Loan Party are subject to security,
such shares shall be subject to first priority security in
favour of the appropriate Collateral Agent, (ii) in the case of
an Investment in a new Subsidiary which owns assets in a
jurisdiction in which assets of any other Loan Party are subject
to security, such new Subsidiary shall create first priority
security over all or substantially all of its tangible and
intangible assets pursuant to Security Documents in form and
substance satisfactory to the appropriate Collateral Agent and
(iii) and the relevant Loan Parties shall take all steps
necessary to create, perfect and deliver to the appropriate
Collateral Agent such evidence as such Collateral Agent shall
require of the due execution of the relevant Security Document
together with legal opinions to the extent reasonably necessary
in form and substance satisfactory to the appropriate Collateral
Agent."
4.16 Section 8.5 (RESTRICTED PAYMENTS) of the Credit Agreement shall
be amended and restated by:
4.16.1 deleting the word "and" at the end of subparagraph (e)
thereof;
4.16.2 adding the word "and" at the end of subparagraph
(f)(iii) thereof;
4.16.3 deleting the phrase "PROVIDED FURTHER, HOWEVER, that in
the case of each of paragraphs (a) through (f) above)"
in the first line of the proviso to such Section 8.5 and
inserting the phrase "PROVIDED FURTHER, HOWEVER, that in
the case of each of paragraphs (a) through (g) above" in
its place; and
4.16.4 adding the following new subparagraph (g):
"(g) Restricted Payments from time to time
constituting Permitted Stock Redemptions, PROVIDED that no Loans
will be available to any Borrower for the purpose of making any
such Permitted Stock
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Redemption, and PROVIDED FURTHER that at the time of and after
giving effect to the making of any such Permitted Stock
Redemption:
(i) the Fixed Charge Coverage Ratio for the
most recently completed 12 month period shall be greater
than or equal to 2.0 to 1.0; and
(ii) the amount of any such Permitted Stock
Redemption shall not exceed the Available Discretionary
Basket Amount at such time;"
5 In accordance with Section 11.1 (AMENDMENTS, WAIVERS, ETC.) of the
Credit Agreement, on our own behalf and on behalf of each of the other
Lenders, we agree that:
5.1 the amendments requested in each of Clause 4.6 and Clause 4.7
above shall take effect from and after such time as all Lenders
have delivered their approvals thereof; and
5.2 the amendments requested in each of Clauses 4.1 through 4.5 and
Clauses 4.8 through 4.16 above shall take effect from and after
such time as the Requisite Lenders have delivered their
approvals thereof.
6 The Obligors' Agent, on behalf of itself and each of the other Loan
Parties, hereby certifies, after careful consideration, that the
following statements are true on the date hereof:
6.1 the representations and warranties set forth in Sections 4.1,
4.2, 4.5, 4.7 (save for such litigation as more particularly set
out in the Schedule attached hereto), 4.8, 4.9, 4.10, 4.11(b),
4.11(d), 4.12, 4.14, 4.15(a), 4.15(b), 4.16(c), 4.16(d),
4.17(a), 4.17(b) and 4.18 of Article IV (REPRESENTATIONS AND
WARRANTIES) of the Credit Agreement and the other Loan Documents
are true and correct on and as of the date hereof with the same
effect as though made on and as of such date, except to the
extent such representations and warranties expressly relate to
an earlier date, in which case such representations and
warranties shall have been true and correct as of such earlier
date; and
6.2 no Default or Event of Default has occurred and is continuing on
the date hereof.
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7 The Obligors' Agent, on behalf of itself and each of the other Loan
Parties, confirms its agreement to the above amendments and that the
Loan Parties' obligations under the Loan Documents to which they are
parties remain in full force and effect notwithstanding the making of
such amendments.
8 The Obligors' Agent confirms that in entering into this Letter it is
acting on its own behalf and as Obligors' Agent for the other Loan
Parties under Section 11.19(b) (US OBLIGORS' AGENT) and Section 11.19(a)
(FOREIGN OBLIGORS' AGENT) of the Credit Agreement.
9 Save as amended by this Letter, the provisions of the Credit Agreement
shall continue in full force and effect and the Credit Agreement and
this Letter shall be read and construed as one instrument. This Letter
is a Loan Document.
10 Please sign and return the attached copy of this Letter to signify your
acceptance of its terms and conditions. This Letter may be executed in
counterparts each of which shall be deemed to constitute an original.
11 This Letter and the rights and obligations of the parties hereto shall
be is governed by, and construed and interpreted in accordance with, the
law of the State of New York.
Yours faithfully
/s/ Xxxxxx Xxxxxx /s/ Xxx Xxxxxxxxxxx
------------------------------ ------------------------------
For and on behalf of For and on behalf of
CITICORP USA, INC. BANK OF AMERICA, N.A.
as Domestic Administrative Agent as Foreign Administrative Agent
/s/ Xxxxxx Xxxxxx /s/ Xxx Xxxxxxxxxxx
------------------------------ ------------------------------
For and on behalf of For and on behalf of
CITIBANK, N.A. BANK OF AMERICA, N.A.
as Lender as Lender
/s/ illegible /s/ illegible
------------------------------ ------------------------------
For and on behalf of For and on behalf of
NATIONAL CITY COMMERCIAL FINANCE, INC. UPS CAPITAL CORPORATION
as Lender as Lender
11
To: Citicorp USA, Inc.
as Domestic Administrative Agent
Bank of America, N.A.
as Foreign Administrative Agent
We acknowledge receipt of the Letter and hereby confirm our agreement to the
terms and conditions thereof.
Yours faithfully
/s/ Xxxxx X. Xxxxxxx
-----------------------------
For and on behalf of
POLAROID HOLDING CORPORATION
(acting on its own behalf and as Obligors' Agent
on behalf of each other Loan Party at the date hereof)
Date: 11/11/03
-------------------
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SCHEDULE
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