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Monday, June 11, 2012

Kodak Files Motion for Competitive Auction of Digital Imaging Patents

Sale Process Allows Confidential Bids; Bidding Procedures Filed Ahead of Schedule

About Kodak

Media Contacts

  • Hilary Condit
    Eastman Kodak Company
    hilary.condit@kodak.com
    +1 585-724-4513

  • Jeremy Fielding
    Kekst and Company
    jeremy-fielding@kekst.com
    +1 212-521-4800

ROCHESTER, N.Y., June 11 -- 

Eastman Kodak Company today filed a motion seeking approval of bidding procedures for the prompt bankruptcy auction of its Digital Capture and Kodak Imaging Systems and Services (KISS) Patent Portfolios, comprising more than 1,100 patents that are integral to the capture, manipulation, and sharing of digital images.

Kodak’s motion outlines a sale process that is open to all qualified bidders subject to the rules of the bidding procedures. No disclosure of the unsuccessful bidders will be made to other bidders or the public. Only the winning bidder and the amount of the successful bid will be announced publicly at the end of the auction.

“The proposed structure of the auction is tailored to the special nature of the assets,” said Timothy M. Lynch, Kodak Vice President and Chief Intellectual Property Officer. “The bidding procedures are designed to allow bidders to give us their best offers without fear of showing their cards to competitors. In filing these proposed procedures in advance of the June 30 deadline in our lending agreement, we are moving ahead as quickly as possible with the process of monetizing our digital imaging patent portfolio.”

Over the past 12 months, Kodak’s financial advisor, Lazard, has conducted an extensive marketing process for these assets. To date, 20 parties have signed confidentiality agreements and have been provided access to an electronic data room.

Lynch noted that the two portfolios being sold have different characteristics and may interest different buyers. The Digital Capture Portfolio includes over 700 patents, covering key aspects of image capture, processing, and transmission technologies that are crucial to the design and operation of digital cameras and multi-function devices, including camera-enabled smartphones and tablets. The KISS Portfolio includes over 400 patents that cover technologies including image analysis, manipulation and tagging, and network-based services, including image storage, access, and fulfillment. Since 2001, Kodak has generated more than $3 billion from licensing its digital imaging portfolio to industry leaders, including Samsung, LG, Motorola, and Nokia, and is currently pursuing patent litigation against infringers that include Apple, RIM, and HTC.

Kodak expects the motion to approve bidding procedures to be heard by the Court on July 2, the auction to be held in early August, and the winning bidder to be announced by August 13.

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CAUTIONARY STATEMENT PURSUANT TO SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This document includes "forward–looking statements" as that term is defined under the Private Securities Litigation Reform Act of 1995. Forward–looking statements include statements concerning the Company's plans, objectives, goals, strategies, future events, future revenue or performance, capital expenditures, liquidity, financing needs, business trends, and other information that is not historical information. When used in this document, the words "estimates," "expects," "anticipates," "projects," "plans," "intends," "believes," “predicts”, "forecasts," or future or conditional verbs, such as "will," "should," "could," or "may," and variations of such words or similar expressions are intended to identify forward–looking statements. All forward–looking statements, including, without limitation, management's examination of historical operating trends and data are based upon the Company's expectations and various assumptions. Future events or results may differ from those anticipated or expressed in these forward-looking statements. Important factors that could cause actual events or results to differ materially from these forward-looking statements include, among others, the risks and uncertainties described in more detail in the Company's most recent annual report on Form 10–K for the year ended December 31, 2011, and quarterly report on Form 10-Q for the quarter ended March 31, 2012, under the headings "Business," "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations–Liquidity and Capital Resources" and those described in filings made by the Company with the U.S. Bankruptcy Court for the Southern District of New York and in other filings the Company makes with the SEC from time to time, as well as the following: the ability of the Company to continue as a going concern; the Company’s ability to comply with the Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) covenants in its Debtor-in-Possession Credit Agreement; the ability of the Company and its subsidiaries to develop, secure approval of and consummate one or more plans of reorganization with respect to the chapter 11 cases; the Company’s ability to improve its operating structure, balance sheet, and profitability following emergence from chapter 11; the potential adverse effects of the chapter 11 proceedings on the Company's liquidity, results of operations, brand or business prospects; our ability to raise sufficient proceeds from the sale of non-core assets and the potential sale of our digital imaging patent portfolios within our plan; the Company's ability to generate or raise cash and maintain a cash balance sufficient to comply with the minimum liquidity covenants in its Debtor-in-Possession Credit Agreement and to fund continued investments, capital needs, restructuring payments and service its debt; our ability to maintain product reliability and quality; our ability to effectively anticipate technology trends and develop and market new products; and the impact of the global economic environment on the Company. There may be other factors that may cause the Company's actual results to differ materially from the forward–looking statements. All forward–looking statements attributable to the Company or persons acting on its behalf apply only as of the date of this document, and are expressly qualified in their entirety by the cautionary statements included in this document. The Company undertakes no obligation to update or revise forward–looking statements to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events.

2012