Exhibit 10.1
AMENDMENT TO CREDIT AGREEMENT
This AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), dated as of July 24,
2007, among IMATION CORP., a Delaware corporation (“Imation”), IMATION
ENTERPRISES CORP., a Delaware corporation (“Enterprises”) (each of Imation and
Enterprises being referred to herein as a “Borrower” and together as the
“Borrowers”), each lender from time to time party to the Credit Agreement
referred to below (each, a “Lender”, and collectively, the “Lenders”), and BANK
OF AMERICA, N.A., as Administrative Agent (in such capacity, the “Administrative
Agent”) and L/C Issuer.
RECITALS
      The Borrowers, the Lenders, and the Administrative Agent are party to a
Credit Agreement dated as of March 29, 2006, (the “Credit Agreement”), pursuant
to which the Administrative Agent and the Lenders have extended certain credit
facilities to the Borrower.
      The Borrowers have requested that the Administrative Agent and the Lenders
agree to certain amendments to the Credit Agreement, and the Lenders have agreed
to such request, subject to the terms and conditions of this Amendment.
      NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto hereby agree as follows:
      Defined Terms. Unless otherwise defined herein, capitalized terms used
herein shall have the meanings, if any, assigned to such terms in the Credit
Agreement. As used herein, (a) “Amendment Documents” means this Amendment, the
Credit Agreement (as amended by this Amendment), the Guarantor Consent and each
certificate and other document executed and delivered by the Borrowers pursuant
to Section 5 hereof, and (b) “Guarantor Consent” means a Guarantor Consent in
substantially the form attached hereto as Exhibit A.
      Interpretation. The rules of interpretation set forth in Sections 1.02,
1.03, 1.04, 1.05, 1.06 and 1.07 of the Credit Agreement shall be applicable to
this Amendment and are incorporated herein by this reference.
      Amendments to Credit Agreement. Subject to the terms and conditions
hereof, and with effect from and after the Effective Date, the Credit Agreement
shall be amended as follows:
      Section 1.01 of the Credit Agreement shall be amended, at the definition
of “Applicable Rate,” by deleting the table contained therein and replacing it
with the following:

 

--------------------------------------------------------------------------------

 

APPLICABLE RATE

                      Consolidated   Facility   Eurodollar Rate + /   Base Rate
Pricing Level   Leverage Ratio   Fee   Letters of Credit   + 1   = 0.50:1  
0.125%   0.45%   0.0%                   2   >0.50:1 but = 1.00:1   0.15%   0.55%
  0.0%                   3   >1.00:1 but = 1.50:1   0.175%   0.65%   0.0%      
            4   >1.50:1 but = 2.00   0.20%   0.75%   0.25%                   5  
>2.00:1   0.25%   0.95%   0.50%

      Section 1.01 of the Credit Agreement shall be further amended, at the
definition of “Consolidated Fixed Charge Coverage Ratio,” by amending and
restating such definition to read as follows:
     “Consolidated Fixed Charge Coverage Ratio” means, as of any date of
determination, the ratio of (a) Consolidated EBITDA for the Subject Period then
ending, less Capital Expenditures made by Imation and its consolidated
Subsidiaries during such period, less federal, state, local and foreign income
taxes actually paid by Imation and its consolidated Subsidiaries during such
Subject Period to (b) Consolidated Interest Charges for the Subject Period then
ending plus Scheduled principal and interest payments in respect of Indebtedness
made by Imation and its consolidated Subsidiaries during the Subject Period. The
Consolidated Fixed Charge Coverage Ratio shall be calculated on a Pro Forma
Basis if any of the events described in the definition of “Pro Forma Basis”
occurred on the calculation date or prior to the calculation date but during the
Subject Period.
      Section 1.01 of the Credit Agreement shall be further amended, at the
definition of “Letter of Credit Sublimit,” by deleting the amount “$50,000,000”
therein and replacing it with “$75,000,000”.
      Section 1.01 of the Credit Agreement shall be further amended, at the
definition of “Maturity Date,” by deleting the phrase “March 29, 2011” and
inserting in its place “March 29, 2012”.
      Section 1.01 of the Credit Agreement shall be further amended, at the
definition of “Permitted Acquisition”, by (i) deleting “and” at the end of
clause (i) thereof, and (ii) inserting the following immediately prior to the
“.”:

 

--------------------------------------------------------------------------------

 

     ”, and (iii) the TDK Acquisition, provided any Person that is or becomes a
Domestic Subsidiary acquired thereby delivers to the Administrative Agent the
documents and materials described in Section 6.12.”
      Section 1.01 of the Credit Agreement shall be further amended by adding
the following, in appropriate alphabetical order:
     “TDK Acquisition” means the acquisition by Imation of all or substantially
all of the assets (including stock of relevant Subsidiaries) relating to the
recording media business of TDK Marketing Corporation and its Affiliates,
provided (i) the aggregate consideration paid or incurred (including cash,
capital stock, indebtedness and other) directly or indirectly by Imation or its
Subsidiaries does not exceed $340,000,000 (net of cash acquired), and (ii) such
transaction is consummated no later than November 30, 2007.
      Section 2.13(a) of the Credit Agreement shall be amended by deleting the
amount “$50,000,000” and replacing it with “$100,000,000”.
      Section 7.03(c) of the Credit Agreement shall be amended by deleting the
amount “$25,000,000” and replacing it with “$75,000,000”.
      Schedule 2 to the Compliance Certificate set forth as Exhibit C to the
Credit Agreement shall be amended and restated in the form attached hereto as
Exhibit B.
      Schedule 2.01 of the Credit Agreement shall be amended and restated to
read in full as set forth at Exhibit C hereto.
      Representations and Warranties. Each Borrower hereby represents and
warrants to the Administrative Agent and the Lenders as follows:
      No Default has occurred and is continuing.
      The execution, delivery and performance by each Borrower of this Amendment
and of each Guarantor of the Guarantor Consent have been duly authorized by all
necessary corporate and other action and do not and will not require any
registration with, consent or approval of, or notice to or action by, any Person
(including any Governmental Authority) in order to be effective and enforceable.
      The Amendment Documents constitute the legal, valid and binding
obligations of each Borrower and each Guarantor, as applicable, and are
enforceable against each such Person in accordance with their respective terms,
without defense, counterclaim or offset.
      All representations and warranties of the Borrowers contained in Article V
of the Credit Agreement are true and correct on and as of the Effective Date,
except to the extent that any such representation and warranty specifically
relates to an earlier date.
      Each Borrower is entering into this Amendment on the basis of its own
investigation and for its own reasons, without reliance upon the Administrative
Agent, the Lenders or any other Person.

 

--------------------------------------------------------------------------------

 

      There has occurred since December 31, 2006 no event or circumstance that
has resulted or could reasonably be expected to result in a Material Adverse
Effect.
      Effective Date.
      Subject to the proviso in subsection (i) below, this Amendment will become
effective when each of the following conditions precedent has been satisfied
(the “Effective Date”):
     The Administrative Agent shall have received from each Borrower and the
Required Lenders a duly executed original (or, if elected by the Administrative
Agent, an executed facsimile copy) counterpart to this Amendment; provided (A)
Section 3(a) and 3(d) hereof shall not become effective until and unless the
Administrative Agent shall have received from each Borrower and all Lenders a
duly executed original (or, if elected by the Administrative Agent, an executed
facsimile copy) counterpart to this Amendment, and (B) Section 3(d) hereof shall
not become effective without the signature of the L/C Issuer.
     The Administrative Agent shall have received from each Guarantor a duly
executed original (or, if elected by the Administrative Agent, an executed
facsimile copy) counterpart to the Guarantor Consent.
     The Administrative Agent shall have received from each Borrower a
certificate signed by the secretary or assistant secretary of such Borrower,
dated the Effective Date, in form and substance satisfactory to the
Administrative Agent, and certifying evidence of the authorization of the
execution, delivery and performance by such Borrower of this Amendment.
     The Administrative Agent shall have received from each Borrower a
certificate executed by a Responsible Officer of such Borrower, in form and
substance satisfactory to the Administrative Agent, dated the Effective Date,
and certifying that all representations and warranties contained herein are true
and correct as of the Effective Date, as though made on such date.
     The Borrowers shall have paid (A) to the Arranger such fee as specified in
a fee letter dated as of July 23, 2007 among the Borrower, Administrative Agent
and the Arranger, (B) to the Administrative Agent for the account of each Lender
executing this Amendment, an amendment fee in an amount equal to 0.02% times the
Commitment of such Lender, based upon such Lender’s Commitment as of the time
immediately prior to the Effective Date (disregarding the Effective Date
Assignments), and in an amount equal to 0.05% times the Commitment in respect of
all new Lenders or additional Commitments of existing Lenders arising as of the
Effective Date (including in respect of the Effective Date Assignments), (C) all
Attorney Costs of the Administrative Agent to the extent invoiced prior to the
Effective Date, plus such additional amounts of Attorney Costs as shall
constitute the Administrative Agent’s reasonable estimate of Attorney Costs
incurred or to be incurred by it through the closing proceedings related to this
Amendment (provided that such estimate shall not preclude a final settling of
accounts between the Borrowers and the Administrative Agent), and (D) such other
amounts as may be required pursuant to Section 2.13(e) of the Credit Agreement.
     The Administrative Agent shall have received fully executed and properly
completed Assignment and Assumption documents, pursuant to which (A) The Bank of
New York shall assign immediately prior to the Effective Date its rights and
obligations as a

 

--------------------------------------------------------------------------------

 

Lender to Wells Fargo Bank, N.A. and Bank of America, N.A., and (B) LaSalle
Bank, National Association shall assign immediately prior to the Effective Date
its rights and obligations as a Lender to The Bank of Tokyo-Mitsubishi, Ltd.,
Chicago Branch and Fifth Third Bank (together, the “Effective Date
Assignments”).
     The Administrative Agent shall have received, in form and substance
satisfactory to it, such additional approvals, consents, opinions, documents and
other information as the Administrative Agent shall request.
      For purposes of determining compliance with the conditions specified in
this Section 5, each Lender that has executed this Amendment and delivered it to
the Administrative Agent shall be deemed to have consented to, approved or
accepted, or to be satisfied with, each document or other matter either sent, or
made available for inspection, by the Administrative Agent to such Lender for
consent, approval, acceptance or satisfaction, or required thereunder to be
consented to or approved by or acceptable or satisfactory to such Lender.
      From and after the Effective Date, the Credit Agreement is amended as set
forth herein. Except as expressly amended pursuant hereto, the Credit Agreement
shall remain unchanged and in full force and effect and is hereby ratified and
confirmed in all respects.
      The Administrative Agent will notify the Borrowers and the Lenders of the
occurrence of the Effective Date.
      Reservation of Rights. Each Borrower acknowledges and agrees that neither
the execution nor the delivery by the Administrative Agent and the Lenders of
this Amendment, shall be deemed to create a course of dealing or otherwise
obligate the Administrative Agent or the Lenders to execute similar amendments
under the same or similar circumstances in the future.
      Miscellaneous.
      This Amendment shall be binding upon and inure to the benefit of the
parties hereto and thereto and their respective successors and assigns. No third
party beneficiaries are intended in connection with this Amendment.
      THIS AMENDMENT IS SUBJECT TO THE PROVISIONS OF SECTIONS 10.17 AND 10.18 OF
THE CREDIT AGREEMENT RELATING TO GOVERNING LAW, VENUE AND WAIVER OF RIGHT TO
TRIAL BY JURY, THE PROVISIONS OF WHICH ARE BY THIS REFERENCE INCORPORATED HEREIN
IN FULL.
      This Amendment may be executed in any number of counterparts, each of
which shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument. Transmission of signatures of any
party by facsimile shall for all purposes be deemed the delivery of original,
executed counterparts thereof and the Administrative Agent is hereby authorized
to make sufficient photocopies thereof to assemble complete counterparty
documents.
      This Amendment, together with the other Amendment Documents and the Credit
Agreement, contain the entire and exclusive agreement of the parties hereto with
reference to the matters discussed herein and therein. This Amendment supersedes
all prior

 

--------------------------------------------------------------------------------

 

drafts and communications with respect thereto. This Amendment may not be
amended except in accordance with the provisions of Section 10.01 of the Credit
Agreement.
      If any term or provision of this Amendment shall be deemed prohibited by
or invalid under any applicable law, such provision shall be invalidated without
affecting the remaining provisions of this Amendment or the Credit Agreement,
respectively.
      Each Borrower covenants to pay to or reimburse the Administrative Agent,
upon demand, for all costs and expenses (including allocated costs of in-house
counsel) incurred in connection with the development, preparation, negotiation,
execution and delivery of this Amendment.
      This Amendment shall constitute a “Loan Document” under and as defined in
the Credit Agreement.
[Remainder of this page intentionally left blank]
* * *

 

--------------------------------------------------------------------------------

 

      IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first above written.

            IMATION CORP., as a Borrower
      By:   /s/ Paul R. Zeller         Name:   Paul R. Zeller        Title:  
Vice President, Chief Financial Officer     

            IMATION ENTERPRISES CORP., as a Borrower
      By:   /s/ Paul R. Zeller         Name:   Paul R. Zeller        Title:  
Vice President, Chief Financial Officer     

Signature Page 1 to Amendment to Credit Agreement

 

--------------------------------------------------------------------------------

 

            BANK OF AMERICA, N.A., as Administrative Agent
      By:   /s/ Matthew C. Correia         Name:   Matthew C. Correia       
Title:   Vice President     

            BANK OF AMERICA, N.A., as L/C Issuer and as a Lender
      By:   /s/ Debra E. DelVecchio         Name:   Debra E. DelVecchio       
Title:   Managing Director     

Signature Page 2 to Amendment to Credit Agreement

 

--------------------------------------------------------------------------------

 

            JPMORGAN CHASE BANK, N.A., as a Lender
      By:   /s/ Krys Szremski         Name:   Krys Szremski        Title:   Vice
President     

Signature Page 3 to Amendment to Credit Agreement

 

--------------------------------------------------------------------------------

 

            THE BANK OF TOKYO-MISTUBISHI UFJ, LTD.,
CHICAGO BRANCH, as a Lender
      By:   /s/ Matthew Ross         Name:   Matthew Ross        Title:   Vice
President & Manager     

Signature Page 4 to Amendment to Credit Agreement

 

--------------------------------------------------------------------------------

 

            US BANK NATIONAL ASSOCIATION, as a Lender
      By:   /s/ Christine Dean         Name:   Christine Dean        Title:  
Vice President     

Signature Page 5 to Amendment to Credit Agreement

 

--------------------------------------------------------------------------------

 

            WELLS FARGO BANK, NATIONAL ASSOCIATION, as a Lender
      By:   /s/ Brian Buck         Name:   Brian Buck        Title:   Assistant
Vice President     

Signature Page 6 to Amendment to Credit Agreement

 

--------------------------------------------------------------------------------

 

            CITIBANK, N.A., as a Lender
      By:   /s/ Steve T. Zurich         Name:   Steve T. Zurich        Title:  
Vice President     

Signature Page 7 to Amendment to Credit Agreement

 

--------------------------------------------------------------------------------

 

            FIFTH THIRD BANK, as a Lender
      By:   /s/ Christopher Motley         Name:   Christopher Motley       
Title:   Vice President     

Signature Page 8 to Amendment to Credit Agreement

 

--------------------------------------------------------------------------------

 

EXHIBIT A
to Amendment to Credit Agreement
GUARANTORS’ CONSENT
      Each of the undersigned, in its capacity as a Guarantor, acknowledges that
its consent to the foregoing Amendment is not required, but each of the
undersigned nevertheless does hereby consent to the foregoing Amendment and to
the documents and agreements referred to therein. Nothing herein shall in any
way limit any of the terms or provisions of the Guaranty of the undersigned or
the Collateral Documents executed by the undersigned in the Administrative
Agent’s and the Lenders’ favor, or any other Loan Document executed by the
undersigned (as the same may be amended from time to time), all of which are
hereby ratified and affirmed in all respects.

            IMATION FUNDING CORP., as a Guarantor
      By:           Name:           Title:        

            IMATION LATIN AMERICA CORP., as a Guarantor
      By:           Name:           Title:        

Exhibit A

 

--------------------------------------------------------------------------------

 

EXHIBIT B
to Amendment to Credit Agreement
For the Quarter/Year ended __________________(“Statement Date”)
SCHEDULE 2
to the Compliance Certificate
($ in 000’s)
I.   Section 7.11(a) — Consolidated Leverage Ratio.

             
A.
  Consolidated EBITDA for four consecutive fiscal quarters ending on above date
(“Subject Period”):
 
  1.   Consolidated Net Income for Subject Period:   $ ____________
 
  2.   Consolidated Interest Charges for Subject Period:   $ ____________
 
  3.   Provision for income taxes for Subject Period:   $ ____________
 
  4.   Depreciation expenses for Subject Period:   $ ____________
 
  5.   Amortization expenses for intangibles for Subject Period:   $
____________
 
  6.   Non-cash charges from asset sales (other than sales of inventory in the
ordinary course of business), asset impairments (including intangible asset
impairments) severance, and stock compensation for Subject Period:   $
____________
 
  7.   To the extent increasing Consolidated Net Income, non-cash gains from
asset sales (other than sales of inventory in the ordinary course of business)
for Subject Period, and cash payments made in such period on account of non-cash
charges expensed in a prior period:   $ ____________
 
  8.   Consolidated EBITDA (Lines I.A.1 + 2 + 3 + 4 + 5 + 6- 7):   $
____________  
B.
  Consolidated Funded Indebtedness at Statement Date:   $ ____________  
C.
  Consolidated Leverage Ratio (Line I.B ¸ Line I.A.8):   ________ to 1.00  
Maximum permitted: 2.50:1.00    

Exhibit B

B- 1

--------------------------------------------------------------------------------

 

Section 7.11(b) — Minimum Fixed Charge Coverage Ratio.

         
A.
  Consolidated EBITDA:   $ _________
B.
  Capital Expenditures:   $ _________
C.
  Consolidated Interest Charges:   $ _________
D.
  Income taxes actually paid during
Subject Period: $    
E.
  Scheduled principal and interest payments for Indebtedness for such Subject
Period:   $ _________
F.
  Minimum Consolidated Fixed Charge Ratio: ((Line II.A. — II.B. — II.D.) ¸
(II.C. + II.E.):   _____ to 1.00   Minimum permitted: 2.50:1.00    

Exhibit B

B- 2

--------------------------------------------------------------------------------

 

EXHIBIT C
to Amendment to Credit Agreement
SCHEDULE 2.01
COMMITMENTS
AND PRO RATA SHARES

                  Lender   Commitment     Pro Rata Share  
Bank of America, N.A.
  $ 60,000,000       18.461538462 %
The Bank of Tokyo-Mitsubishi UFJ,
               
Ltd., Chicago Branch
  $ 50,000,000       15.384615385 %
JPMorgan Chase Bank, N.A.
  $ 40,000,000       12.307692308 %
U.S. Bank National Association
  $ 40,000,000       12.307692308 %
Wells Fargo Bank, National Association
  $ 50,000,000       15.384615385 %
Citibank NA
  $ 35,000,000       10.769230769 %
Fifth Third Bank
  $ 50,000,000       15.384615385 %
 
           
Total
  $ 325,000,000       100.000000000 %