Kodak 2011 Annual Report Download - page 159

such Equipment is Equipment in respect of which the Collateral Documents, after giving effect to the related filings of financing statements that have then
been made, if any, do not or have ceased to create a valid and perfected first priority Lien or security interest (subject only to any Liens securing Canadian
Priority Payables) in favor of the Agent, on behalf of the Secured Parties, securing the Secured Obligations; or
(iii) a Loan Party does not have good, valid and unencumbered title thereto, subject only to Liens permitted under clause (a)
or (b) of the definition of Permitted Liens or Liens granted pursuant to any of the Loan Documents (“ Permitted Collateral Liens ”); or
(iv) Equipment that is subject to a voluntary or mandatory recall or is otherwise subject to any similar action that renders it
unsaleable.
“ Eligible Inventory ”
means, at the time of any determination thereof, without duplication, the Inventory Value of the Loan Parties at
such time that is not ineligible for inclusion in the calculation of the Borrowing Base pursuant to any of clauses (i) through (xiii) below. Criteria
and eligibility standards used in determining Eligible Inventory may be fixed and revised from time to time by the Agent in its reasonable
discretion (including, without limitation, criteria and eligibility standards to account for dispositions of Intellectual Property Collateral (as defined
in the Security Agreements) that is material to the value or saleability of any Inventory). Unless otherwise from time to time approved in writing
by the Agent, no Inventory shall be deemed Eligible Inventory if, without duplication:
(i) a Loan Party does not have good, valid and unencumbered title thereto, subject only to Permitted Collateral Liens; or
(ii) it is not located in the United States (in the case of the Company and the US Subsidiary Guarantors) or Canada (in the
case of Kodak Canada and the Canadian Subsidiary Guarantors); provided that in the case of Inventory located in Canada, the Company shall
provide evidence reasonably satisfactory to the Agent that there is an enforceable, perfected first priority security interest (subject only to any
Liens securing Canadian Priority Payables) in such Inventory in favor of the Agent under the laws of the applicable foreign jurisdiction; or
(iii)
it is either (i) a service part in the possession of or held by field engineers or (ii) located at third party premises or (except
in the case of consigned Inventory, which is covered by clause (f) below) in another location not owned by a Loan Party, and is subject to landlord
or warehousemen Liens or other Liens arising by operation of law, unless one of the following applies: (A) the premises is covered by a Landlord
Lien Waiver or (B) a Rent Reserve has been taken with respect to such Inventory or, in the case of any third party premises, a Reserve has been
taken by the Agent in the exercise of its reasonable discretion; or
(iv) it is operating supplies, labels, packaging or shipping materials, cartons, repair parts, labels, miscellaneous spare parts
and other such materials not held for sale, in each case to the extent not considered used for sale in the ordinary course of business of the Loan
Parties by the Agent in its reasonable discretion from time to time; or
(v) it is not subject to a valid and perfected first priority Lien (subject only to any Liens securing Canadian Priority Payables)
in favor of the Agent; or
(vi) it is consigned at a customer, supplier or contractor location but still accounted for in the Loan Party’s inventory balance,
unless (i) if such Inventory is subject to landlord or consignee Liens or other Liens arising by operation of law, then such location is the subject of
a
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