borrowings under the seven-year term loan consisted initially of Base Rate loans with an interest rate of 8% and on October 20, 2005 were converted to Eurodollar loans.  In the event any amount of the uncommitted term loan is requested, committed and advanced and the applicable margin is more than 0.50% greater than the applicable margin on the outstanding term loan, an adjustment to the margin on the outstanding term loan will be made. 

          In addition, under the terms of the Secured Credit Agreement, Kodak agrees to pay the revolving credit Lenders a commitment fee on a quarterly basis based upon the unused revolving credit commitments.  Based on Kodak’s current credit ratings, the commitment fee rate payable to the revolving credit lenders would be 0.50% per annum of the unborrowed revolving credit commitments.  The Lenders with term loan commitments with respect to the unborrowed $500,000,000 under the Secured Credit Agreement are entitled to an annual commitment fee of 1.50% payable on a quarterly basis based upon the unborrowed commitments. 

          The Secured Credit Agreement contains covenants typical of agreements of this type, including covenants that restrict, among other things, Kodak’s and its subsidiaries’ ability to merge or consolidate with other companies, sell all or substantially all of their business or property, and incur liens, except as permitted under the Secured Credit Agreement.  The obligations of the Lenders to make advances under the Secured Credit Agreement are subject to the ongoing accuracy of Kodak’s representations and warranties under the Secured Credit Agreement and the absence of any events which would be defaults or constitute a material adverse change.  In addition, subject to various conditions and exceptions set forth in the Secured Credit Agreement, in the event Kodak sells assets for net proceeds in excess of $75,000,000 in any year, except for proceeds used within 12 months for reinvestments in the business of up to $300,000,000, proceeds of sales of assets used in the non-digital business of Kodak to prepay or repay debt or to pay cash restructuring charges within 12 months from the date of sale of the assets, or proceeds from sales of inventory in the ordinary course of business, the excess must be applied to prepay loans under the Secured Credit Facility, applied first to the longest maturities of the term loan until the term loan is repaid in full, then to any outstanding revolving credit advances.

          In the event of a default by Kodak under the Secured Credit Agreement, the Lenders may terminate the commitments under the Secured Credit Agreement and declare any principal amount then outstanding, and all accrued interest and other amounts payable by Kodak under the Secured Credit Agreement, to be immediately due and payable. Kodak’s obligations under the Secured Credit Agreement would be accelerated automatically in the event a federal bankruptcy order is entered against Kodak.  Other defaults under the Secured Credit Agreement which could result in the acceleration by the lenders of Kodak’s obligations include the occurrence of certain other bankruptcy and insolvency events, non-payment of advances when due or of interest within five business days after its due date, failure to comply with certain affirmative and negative covenants, including the financial covenants described above, the material inaccuracy of Kodak’s representations and warranties under the Secured Credit Agreement when made, non-payment or defaults which could result in the acceleration of other debt in the amount of $50 million or more, and a change of control of Kodak.  In addition, the failure of the Security Agreement and the Canadian Security Agreement, as defined below, to be binding and enforceable and to provide the substantial intended benefits to the Lenders or to create a first lien would result in an event of default.

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