Eastman Kodak (EK) Completes KKR Transaction

September 29, 2009 4:11 PM EDT

Eastman Kodak Company (NYSE: EK) has completed a previously announced issuance to Kohlberg Kravis Roberts & Co. L.P. (KKR) managed investment vehicles of $300 million in aggregate principal amount of 10.50% Senior Secured Notes due 2017 and warrants to purchase 40 million shares of Kodak common stock. As announced on September 16, 2009, the KKR transaction, along with a separate private placement transaction of $400 million aggregate principal amount of Convertible Senior Notes due 2017, which closed on September 23, 2009, was part of an overall $700 million financing transaction designed to reinforce Kodak's strategic direction and strengthen the company's financial position.

Under the terms of the agreement, and subject to certain exceptions, the KKR group is required to hold the warrants and shares issuable upon exercise of the warrants for a minimum of two years. So long as the KKR group holds warrants to purchase at least 50% of the number of shares of Kodak common stock issuable upon exercise of warrants purchased in the transaction (or at least 50% of the shares issued upon exercise thereof), KKR will have the right to nominate up to two members of Kodak's Board of Directors. If that warrant amount falls below 50%, but is at least 25%, KKR will have the right to nominate one member of Kodak's Board of Directors. If that warrant amount falls below 25%, the KKR group will no longer have the right to nominate any directors.

In conjunction with the closing of the KKR transaction, Kodak's Board of Directors has elected to the board the following two individuals nominated by KKR: Adam H. Clammer and Herald Y. Chen.

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